UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-8327
Name of Fund: Merrill Lynch Global Growth Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
Merrill Lynch Global Growth Fund, 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: 08/31/03
Date of reporting period: 09/01/02 - 2/28/03
Item 1 - Attach shareholder report
(BULL LOGO)
Merrill Lynch Investment Managers
Semi-Annual Report
February 28, 2003
Merrill Lynch
Global Growth
Fund, Inc.
www.mlim.ml.com
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch Global Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL GROWTH FUND, INC.
Portfolio
Information as of
February 28, 2003
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
ExxonMobil Corporation United States 3.0%
Unilever PLC United Kingdom 2.9
Verizon Communications United States 2.8
HSBC Holdings PLC United Kingdom 2.8
3M Co. United States 2.8
Porsche AG (Preferred) Germany 2.5
Clear Channel
Communications, Inc. United States 2.4
BP Amoco PLC United Kingdom 2.3
Unicredito Italiano SpA Italy 2.1
Microsoft Corporation United States 2.1
Percent of
Five Largest Industries* Net Assets
Oil & Gas 14.9%
Media 7.8
Food Products 5.7
Metals & Mining 5.1
Specialty Retail 5.1
*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.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
DEAR SHAREHOLDER
For the six-month period ended February 28, 2003, Merrill Lynch
Global Growth Fund, Inc.'s Class A, Class B, Class C and Class D
Shares had total returns of -11.86%, -12.30%, -12.30% and -11.94%,
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 5 and 6 of this report to
shareholders.) The total returns of the Fund were below the Lipper
Global Funds Average investment return of -9.32% for the same
period. The Fund also underperformed the net investment return of
- -8.75% for the Morgan Stanley Capital International (MSCI) World
Stock Index (in U.S. dollars).
During the six-month period ended February 28, 2003, major global
stock markets continued in a downward trend with overall market
indexes almost touching new lows in comparison to the most recent
low level reached in early October 2002. News media reports and
investment community commentaries continuously focused on the
military confrontation with Iraq. It appears that this emphasis
imposed a negative discount on overall equity market valuations.
We shifted our investment strategy for the Fund during the last
three months of the period by significantly increasing the Fund's
exposure to the energy sector by adding equity positions in Europe,
Canada, Australia and China. At February 28, 2003, almost 15% of the
Fund's net assets were invested in energy company equities, which
compared to an energy sector weighting in the MSCI World Stock Index
of 8%. The energy reserves and production of the major integrated
energy companies worldwide have been declining absolutely for about
three years, reflecting the decreasing production of the major
energy fields outside of the Middle East and Russia. The real price
of oil has been in a downward trend since 1990 when Iraq invaded
Kuwait. In the last three years, China has become a major new source
of increasing demand for oil, natural gas, coal, copper, steel and
most basic materials. Industrial and manufacturing activities in
China, which many economists forecasted to have real economic growth
above 5% per year, caused the country to become one of the largest
consumers of basic materials in the world. Over the same period,
global expenditures for the exploration and development of new and
existing energy reserves declined absolutely. Assuming a recovery in
manufacturing activity in Europe and the United States during the
coming years from today's recessionary levels, there may be a
persistently higher level of nominal prices for energy and basic
commodities. On average, over the last two years the comparative
investment returns on stocks of companies in the basic materials and
chemicals, energy and industrials were among the best. The
relatively high dividend yields on many of these stocks was a
material factor in comparative investment returns.
We added investments in the metals and mining industry including
Barrick Gold Corporation in Canada, BHP Billiton Limited in
Australia, Companhia Vale do Rio Doce in Brazil, POSCO in South
Korea and Rio Tinto PLC in the United Kingdom. The materials and
industrial sectors were equal to almost 9% of the Fund's net assets
at February 28, 2003. We also added shares of General Dynamics
Corporation, United Technologies Corporation, Danaher Corporation
and Illinois Tool Works Inc. in the United States, Johnson Electric
Holdings Limited in Hong Kong and Wesfarmers Limited in Australia.
We sold equity holdings in the diversified financials, insurance,
media, pharmaceuticals, banks and diversified telecommunication
services sectors, and used the proceeds to purchase investments in
the energy, industrial and materials sectors. In the residential
mortgage banking industry, we sold investments in Washington Mutual,
Inc. and Fannie Mae because of our concern that the record levels of
mortgage refinancing may be coming to an end and that the interest
rates may increase as the conflict with Iraq is resolved. These
developments would likely reduce the valuations and earnings
prospects for these companies. With respect to Citigroup Inc.,
American Express Company and MBNA Corporation, we were concerned
about increasing credit quality problems in the consumer credit
arena and the possible decline in earnings estimates and valuations
as a result of these developments. The delinquency rates on both
residential mortgage loans and lower quality consumer installment
loans have been rising in recent months. We sold Credit Lyonnais in
France because of a continued deterioration in commercial credit
quality.
In the insurance industry, the increase in loss reserves by American
International Group, Inc. was a disturbing development. Substantial
increases in loss reserves for several commercial lines of insurance
that were historically very profitable may not be the end of the
deterioration in profitability of these lines of coverage.
Therefore, we sold the Fund's holdings in Travelers Property
Casualty Corp. In Europe, we liquidated insurance company equity
investments in Allianz AG, Assicurazioni Generali, Aegon NV and
Swiss Re because of a continued deterioration in adequate policy
reserves for guaranteed investment returns on annuity products and
the changes in the cost of liabilities for various commercial
coverages resulting from case court rulings. In the media sector, we
had a cyclical recovery in advertising and pricing for services, but
the profitability of individual companies suffered as a result of
poor management policies and strategies. We liquidated the Fund's
holdings in The Interpublic Group of Companies, Inc., Viacom, Inc.
(Class B), The Walt Disney Company in the United States and Seat
Pagine Gialle SpA in Italy. The persistency of relatively deflated
equity markets and relatively low interest rates in most of the
major developed economies in the world is a significant problem for
generating improved earnings and returns in the insurance,
commercial banking and investment banking industries around the
globe.
In the global pharmaceutical industry, we are concerned about the
adverse pricing and regulatory environment in the most important
U.S. market. A group of state governments with major purchasing
power in terms of matching Medicare payments for drugs have banded
together to form a non-profit pharmaceutical benefit management
company that is being challenged by the for-profit pharmaceutical
industry. This case is presently before the U.S. Supreme Court.
Another concern is that the research pipeline for new drug therapies
is slim. The U.S. Securities & Exchange Commission and the New York
State Attorney General have become involved in investigating the
pricing and marketing practices of the ethical drug industry that
may produce very negative repercussions. Thus, we sold the Fund's
holdings in Pfizer Inc., Aventis SA, Sanofi-Synthelabo SA, Novartis
AG and AstraZeneca Group PLC.
In the telecommunications services sector, we observed continued
deterioration in overall business conditions in Europe and the
United States during the six months ended February 28, 2003.
European service providers collectively paid more than $100 billion
for rights to offer enhanced wireless services that were only
modestly successful in attracting new subscribers. Additionally, the
debt leverage of the companies proved to be a problem in a
recessionary type of environment. We sold equity investments in
Nextel Communications, Inc. (Class A), Sprint Corp. (PCS Group),
France Telecom SA, Deutsche Telekom AG, Telecom Italia Mobile (TIM)
SpA and Telefonica SA. The consumer endorsement rate of the new
wireless services was much less than that projected by all of the
European service companies after extraordinary expenses were
incurred to gear up to provide these services.
We reduced the Fund's investment exposure to the information
technology sector. There has been a normal cyclical recovery in
global spending on technology as represented by data from the
Semiconductor Industry Association on corporate sales of all types
of semiconductor devices. The cyclical bottom occurred in September
2001, with a year-to-year decline in industry revenues of over 50%.
The first year-to-year positive comparison in total industry sales
was May 2002 at approximately 5%. There was so much built up
capacity to provide product that only a few companies were
successful. The Fund's investment in Samsung Electronics in South
Korea was an example of a successful company able to generate a
cyclical rise in revenues and profits with more than a 20% return on
equity. However, U.S., European and Japanese information technology
companies still remain in a recession and as a result, we sold the
Fund's holdings in Sun Microsystems, Inc., Oracle Corporation and
STMicroelectronics NV.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
We added numerous companies in the health care equipment and
supplies industry as substitutes for ethical drug companies. These
companies included Alcon Inc., Medtronic, Inc., Stryker Corporation,
Varian Medical Systems, Inc. and Zimmer Holdings, Inc. These
companies are focused on minimally invasive devices for diagnostics
and therapy within the human body, cardiac therapy devices,
orthopedic replacement devices and precision laser therapy, and
optometry devices and therapies. Our investments in these companies
proved to be more successful on a comparative return basis than
those in ethical drug companies.
Over the last six months, the best investment performance came from
companies that were characterized by small- to mid-size market
capitalizations and lower-quality balance sheets and credit ratings.
The Fund is focused on what we believe are the largest companies
with the best quality balance sheets and credit ratings. Thus, the
Fund's comparative investment performance has lagged relative to the
opportunities for investment.
Market Outlook
We anticipate that a resolution of the hostilities between the
United States and Iraq may result in an upward trend in U.S. and
other major global equity market prices. Formerly, this development
took place shortly after the start of the Gulf War in 1991 and the
Vietnam War in late 1974 - early 1975. Alan Greenspan, Chairman of
the U.S. Federal Reserve Board of Governors, stated in a recent
public speech that it was likely that Americans raised $200 billion
in 2002 in new liquidity from the refinancing of residential
mortgages. It may be that they did not spend this increased
liquidity in the year-end holiday season. Military conflict or the
prospect of a conflict has dampened consumer spending in the past.
We believe that the household sector has the liquidity and the
relatively low-financing interest rates for durable goods purchases
and homeowner purchases to spark a meaningful economic recovery when
the Middle East problems are resolved even on a short-term basis.
We remain relatively fully invested in equities. If the Bush
Administration is successful in the Middle East and convinces the
U.S. Congress to bring forward the 2004 and 2006 income tax
reductions and make them permanent, the U.S. economy could be the
leading force for a global economic recovery of real growth and
corporate profitability. Another important global economic force is
China, which is investing significantly in an infrastructure that is
leading, in our opinion, to the upward trend in energy and basic
material prices. We attempted to restructure the Fund to benefit
from these perceived trends in the world economy and markets, and
recent positive comparative investment results have reflected these
changes in the Fund's investment strategy.
In Conclusion
We thank you for your continued investment in Merrill Lynch Global
Growth Fund, Inc., and we look forward to sharing our investment
results and strategy with you in our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Lawrence R. Fuller)
Lawrence R. Fuller
Vice President and
Portfolio Manager
March 26, 2003
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund through five
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.
* Effective June 1, 2001, Class B Shares are subject to a maximum
contingent deferred sales charge of 4% declining to 0% after six
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 D 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 D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
* 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. Performance results do not reflect 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 gains distributions at net asset value on the ex-
dividend date. Investment return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. Dividends paid to each class of shares
will vary because of the different levels of account maintenance,
distribution and transfer agency fees applicable to each class,
which are deducted from the income available to be paid to
shareholders.
Recent
Performance
Results
6-Month 12-Month Since Inception
As of February 28, 2003 Total Return Total Return Total Return
ML Global Growth Fund, Inc. Class A Shares* -11.86% -29.73% -22.72%
ML Global Growth Fund, Inc. Class B Shares* -12.30 -30.43 -26.84
ML Global Growth Fund, Inc. Class C Shares* -12.30 -30.51 -26.89
ML Global Growth Fund, Inc. Class D Shares* -11.94 -29.90 -23.78
ML Global Growth Fund, Inc. Class R Shares* -- -- - 7.69
MSCI World Index** - 8.75 -20.60 -11.84/-1.75
*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 inception dates are from 10/31/97 for Class A, Class B, Class
C and Class D Shares and from 1/03/03 for Class R Shares.
**This unmanaged market capitalization-weighted Index is comprised
of a representative sampling of large-, medium- and small-
capitalization companies in 22 countries, including the United
States. Since inception total returns are from 10/31/97 and 1/31/03,
respectively.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
PERFORMANCE DATA (CONCLUDED)
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
One Year Ended 2/28/03 -29.73% -33.42%
Five Years Ended 2/28/03 - 7.19 - 8.18
Inception (10/31/97) through 2/28/03 - 4.72 - 5.68
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
One Year Ended 2/28/03 -30.43% -33.21%
Five Years Ended 2/28/03 - 8.13 - 8.44
Inception (10/31/97) through 2/28/03 - 5.70 - 5.84
*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 2/28/03 -30.51% -31.21%
Five Years Ended 2/28/03 - 8.14 - 8.14
Inception (10/31/97) through 2/28/03 - 5.71 - 5.71
*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*
One Year Ended 2/28/03 -29.90% -33.58%
Five Years Ended 2/28/03 - 7.42 - 8.42
Inception (10/31/97) through 2/28/03 - 4.97 - 5.92
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return Without
Sales Charge
Class R Shares*
Inception (1/03/03) through 2/28/03 - 7.69%
SCHEDULE OF INVESTMENTS (in U.S. dollars)
LATIN Shares Percent of
AMERICA Industry* Held Common Stock Value Net Assets
Brazil Metals & 210,900 Companhia Vale do Rio Doce (ADR)(a) $ 5,747,025 1.1%
Mining
Total Common Stock in Latin America (Cost--$5,770,642) 5,747,025 1.1
NORTH
AMERICA
Canada Auto 101,000 Magna International Inc. 'A' 5,606,591 1.1
Components
Media 1,113,300 ++Rogers Communications, Inc. 'B' 10,275,121 1.9
Metals & 356,100 Barrick Gold Corporation 5,743,780 1.1
Mining
Oil & Gas 198,200 Petro-Canada 7,058,996 1.3
337,600 Suncor Energy, Inc. 6,118,405 1.2
-------------- ------
13,177,401 2.5
Total Common Stock in Canada 34,802,893 6.6
United Aerospace & 128,100 General Dynamics Corporation 7,591,206 1.5
States Defense 95,900 United Technologies Corporation 5,617,822 1.1
-------------- ------
13,209,028 2.6
Air Freight & 91,000 United Parcel Service, Inc. (Class B) 5,236,140 1.0
Logistics
Beverages 128,000 The Coca-Cola Company 5,148,160 1.0
Biotechnology 106,700 ++Amgen Inc. 5,822,619 1.1
Chemicals 199,700 The Dow Chemical Company 5,451,810 1.0
144,400 E.I. du Pont de Nemours and Company 5,295,148 1.0
-------------- ------
10,746,958 2.0
Communications 431,100 ++Cisco Systems, Inc. 6,022,467 1.2
Equipment
Computers & 78,800 International Business Machines Corporation 6,142,460 1.2
Peripherals
Diversified 209,400 BellSouth Corporation 4,537,698 0.9
Telecommuni- 210,300 SBC Communications Inc. 4,374,240 0.8
cation 429,400 Verizon Communications 14,848,652 2.8
Services -------------- ------
23,760,590 4.5
Energy 141,900 Diamond Offshore Drilling, Inc. 3,114,705 0.6
Equipment &
Service
Food & Drug 292,300 SYSCO Corporation 7,927,176 1.5
Retailing
Health Care 130,000 Medtronic, Inc. 5,811,000 1.1
Equipment & 107,100 Stryker Corporation 6,982,920 1.3
Supplies 30,100 ++Varian Medical Systems, Inc. 1,521,555 0.3
151,900 ++Zimmer Holdings, Inc. 6,742,841 1.3
-------------- ------
21,058,316 4.0
Health Care 180,000 HCA Inc. 7,423,200 1.4
Providers & 405,500 Health Management Associates, Inc. (Class A) 7,266,560 1.4
Services 320,500 ++Tenet Healthcare Corporation 5,823,485 1.1
-------------- ------
20,513,245 3.9
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (continued) (in U.S. dollars)
NORTH AMERICA Shares Percent of
(concluded) Industry* Held Common Stock Value Net Assets
United Household 159,300 The Clorox Company $ 6,739,983 1.3%
States Products 75,000 The Procter & Gamble Company 6,139,500 1.2
(concluded) -------------- ------
12,879,483 2.5
Industrial 117,400 3M Co. 14,718,438 2.8
Conglomerates
Leisure 153,100 Eastman Kodak Company 4,531,760 0.8
Equipment &
Products
Machinery 45,100 Danaher Corporation 2,932,402 0.5
91,000 Illinois Tool Works Inc. 5,420,870 1.0
-------------- ------
8,353,272 1.5
Media 798,300 ++AOL Time Warner Inc. 9,036,756 1.7
342,100 ++Clear Channel Communications, Inc. 12,490,071 2.4
-------------- ------
21,526,827 4.1
Multiline 140,000 Wal-Mart Stores, Inc. 6,728,400 1.3
Retail
Oil & Gas 459,600 ExxonMobil Corporation 15,635,592 3.0
Paper & Forest 171,200 International Paper Company 5,997,136 1.1
Products
Semiconductor 343,500 Intel Corporation 5,925,375 1.1
Equipment &
Products
Software 141,200 ++Electronic Arts Inc. 7,453,948 1.4
462,000 Microsoft Corporation 10,954,020 2.1
-------------- ------
18,407,968 3.5
Specialty 193,800 Lowe's Companies, Inc. 7,616,340 1.4
Retail 322,700 The TJX Companies, Inc. 5,185,789 1.0
-------------- ------
12,802,129 2.4
Total Common Stock in the United States 256,208,244 48.7
Total Common Stock in North America (Cost--$351,535,132) 291,011,137 55.3
PACIFIC
BASIN
Australia Industrial 168,300 Wesfarmers Limited 2,601,538 0.5
Conglomerates
Media 419,000 The News Corporation Limited 2,591,226 0.5
Metals & 1,142,300 BHP Billiton Limited 6,343,346 1.2
Mining
Oil & Gas 389,000 Woodside Petroleum Limited 2,561,512 0.5
Total Common Stock in Australia 14,097,622 2.7
China Oil & Gas 15,390,000 PetroChina Company Limited 3,216,487 0.6
Total Common Stock in China 3,216,487 0.6
Hong Kong Construction 1,550,000 Cheung Kong Infrastructure Holdings Limited 2,822,121 0.5
Materials
Electric 3,896,000 Huaneng Power International, Inc. 'H' 3,471,836 0.7
Utilities
Electrical 2,692,500 Johnson Electric Holdings Limited 3,003,520 0.6
Equipment
Oil & Gas 2,369,000 CNOOC Limited 3,326,095 0.6
Specialty 673,500 Esprit Holdings Limited 1,334,202 0.3
Retail
Total Common Stock in Hong Kong 13,957,774 2.7
Japan Food & Drug 113,000 Seven-Eleven Japan Co., Ltd. 2,642,800 0.5
Retailing
Total Common Stock in Japan 2,642,800 0.5
South Korea Metals & 27,300 POSCO 2,527,248 0.5
Mining
Semiconductor 34,900 Samsung Electronics 8,172,035 1.5
Equipment &
Products
Total Common Stock in South Korea 10,699,283 2.0
Total Common Stock in the Pacific Basin (Cost--$47,525,162) 44,613,966 8.5
WESTERN
EUROPE
France Automobiles 164,300 PSA Peugeot Citroen 7,260,384 1.4
Food & Drug 137,500 Carrefour SA 5,209,142 1.0
Retailing
Food Products 44,300 Groupe Danone 5,242,570 1.0
Media 158,000 Societe Television Francaise 1 3,613,605 0.7
Oil & Gas 75,000 TotalFinaElf SA 9,910,371 1.9
Total Common Stock in France 31,236,072 6.0
Germany Software 32,600 SAP AG (Systeme, Anwendungen, Produkte in
der Datenverarbeitung) 2,725,170 0.5
Total Common Stock in Germany 2,725,170 0.5
Italy Banks 2,792,300 Unicredito Italiano SpA 11,180,445 2.1
Oil & Gas 521,500 ENI SpA 7,715,572 1.5
Total Common Stock in Italy 18,896,017 3.6
Netherlands Beverages 77,700 Heineken NV 2,776,149 0.5
Oil & Gas 265,700 Royal Dutch Petroleum Company 10,524,151 2.0
Total Common Stock in the Netherlands 13,300,300 2.5
Spain Banks 154,600 Banco Popular Espanol SA 6,298,534 1.2
Specialty 210,100 Industria de Disenso Textil, SA 5,072,385 1.0
Retail
Total Common Stock in Spain 11,370,919 2.2
Sweden Specialty 345,100 Hennes & Mauritz AB 'B' 7,279,992 1.4
Retail
Total Common Stock in Sweden 7,279,992 1.4
Switzerland Food Products 46,400 Nestle SA (Registered Shares) 9,341,593 1.8
Health Care 100,000 ++Alcon, Inc. 3,915,000 0.7
Equipment &
Supplies
Total Common Stock in Switzerland 13,256,593 2.5
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (concluded) (in U.S. dollars)
WESTERN EUROPE Shares Percent of
(concluded) Industry* Held Common Stock Value Net Assets
United Banks 1,367,300 HSBC Holdings PLC $ 14,730,858 2.8%
Kingdom 430,900 Royal Bank of Scotland Group PLC 9,861,665 1.9
-------------- ------
24,592,523 4.7
Beverages 1,070,400 Allied Domecq PLC 5,049,531 0.9
Food 1,708,600 Unilever PLC 15,232,282 2.9
Products
Household 238,800 Reckitt Benckiser PLC 3,765,100 0.7
Products
Media 330,000 ++British Sky Broadcasting Group PLC ("BSkyB") 3,266,836 0.6
Metals & 308,200 Rio Tinto PLC (Registered Shares) 6,237,979 1.2
Mining
Oil & Gas 1,901,500 BP Amoco PLC 11,980,211 2.3
Total Common Stock in the United Kingdom 70,124,462 13.3
Total Common Stock in Western Europe (Cost--$178,348,596) 168,189,525 32.0
Western
Europe Preferred Stock
Germany Automobiles 40,407 Porsche AG 13,047,779 2.5
Total Preferred Stock in Western Europe (Cost--$16,963,186) 13,047,779 2.5
SHORT-TERM
SECURITIES Issue
19,880,684 Merrill Lynch Premier Institutional Fund (b)(c) 19,880,684 3.8
Beneficial
Interest
$ 5,431,679 Merrill Lynch Liquidity Series, LLC Cash Sweep
Series I (c) 5,431,679 1.0
24,298,616 Merrill Lynch Liquidity Series, LLC Money Market
Series (b)(c) 24,298,616 4.6
-------------- ------
29,730,295 5.6
Total Investments in Short-Term Securities
(Cost--$49,610,979) 49,610,979 9.4
Total Investments (Cost--$649,753,697) 572,220,411 108.8
Liabilities in Excess of Other Assets (46,432,187) (8.8)
-------------- ------
Net Assets $ 525,788,224 100.0%
============== ======
*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.
++Non-income producing security.
(a)American Depositary Receipts (ADR).
(b)Security was purchased with the cash proceeds from securities
loans.
(c)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) are as
follows:
Dividend/
Net Interest
Affiliate Activity Income
Merrill Lynch Liquidity Series, LLC Cash
Sweep Series I $ 5,431,679 $185,063
Merrill Lynch Liquidity Series, LLC Money
Market Series $24,298,616 53,299
Merrill Lynch Premier Institutional Fund 19,880,684 59,910
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
As of February 28, 2003
Assets: Investments, at value (including securities loaned of $43,154,839)
(identified cost--$649,753,697) $ 572,220,411
Receivables:
Securities sold $ 2,196,585
Dividends 1,081,375
Capital shares sold 44,191
Securities lending--net 15,103
Interest 9,794 3,347,048
--------------
Prepaid registration fees and other assets 110,925
--------------
Total assets 575,678,384
--------------
Liabilities: Collateral on securities loaned, at value 44,179,300
Payables:
Securities purchased 2,621,139
Capital shares redeemed 1,898,132
Distributor 322,028
Investment adviser 309,098 5,150,397
--------------
Accrued expenses and other liabilities 560,463
--------------
Total liabilities 49,890,160
--------------
Net Assets: Net assets $ 525,788,224
==============
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000
Consist of: shares authorized $ 691,774
Class B Shares of Common Stock, $.10 par value, 300,000,000
shares authorized 5,297,831
Class C Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,145,699
Class D Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,589,064
Class R Shares of Common Stock, $.10 par value, 300,000,000
shares authorized 2
Paid-in capital in excess of par 1,271,861,327
Accumulated investment loss--net $ (6,119,309)
Accumulated realized capital losses on investments and foreign
currency transactions--net (671,183,056)
Unrealized depreciation on investments and foreign currency
transactions--net (77,495,108)
--------------
Total accumulated losses--net (754,797,473)
--------------
Net assets $ 525,788,224
==============
Net Asset Class A--Based on net assets of $42,660,374 and 6,917,738
Value: shares outstanding $ 6.17
==============
Class B--Based on net assets of $317,270,160 and 52,978,310
shares outstanding $ 5.99
==============
Class C--Based on net assets of $68,615,805 and 11,456,989
shares outstanding $ 5.99
==============
Class D--Based on net assets of $97,241,793 and 15,890,641
shares outstanding $ 6.12
==============
Class R--Based on net assets of $92.35 and 15.385
shares outstanding $ 6.00
==============
See Notes to Financial Statements.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 2003
Investment Dividends (net of $214,232 foreign withholding tax) $ 2,758,517
Income: Interest 416,188
Securities lending--net 113,209
--------------
Total income 3,287,914
--------------
Expenses: Investment advisory fees $ 2,344,586
Account maintenance and distribution fees--Class B 1,912,059
Transfer agent fees--Class B 690,958
Account maintenance and distribution fees--Class C 407,782
Transfer agent fees--Class D 177,127
Transfer agent fees--Class C 155,295
Account maintenance fees--Class D 140,545
Accounting services 136,879
Transfer agent fees--Class A 76,906
Professional fees 50,487
Custodian fees 41,330
Printing and shareholder reports 39,216
Directors' fees and expenses 33,750
Registration fees 24,754
Pricing fees 6,888
Other 35,618
--------------
Total expenses 6,274,180
--------------
Investment loss--net (2,986,266)
--------------
Realized & Realized loss on:
Unrealized Investments--net (161,766,990)
Gain (Loss) on Foreign currency transactions--net (1,295,188) (163,062,178)
Investments & --------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions-- Investments--net 83,776,472
Net: Foreign currency transactions--net (101,549) 83,674,923
-------------- --------------
Total realized and unrealized loss on investments and
foreign currency transactions--net (79,387,255)
--------------
Net Decrease in Net Assets Resulting from Operations $ (82,373,521)
==============
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six For the
Months Ended Year Ended
February 28, August 31,
Increase (Decrease) in Net Assets: 2003 2002
Operations: Investment loss--net $ (2,986,266) $ (9,227,449)
Realized loss on investments and foreign currency transactions--net (163,062,178) (277,713,019)
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net 83,674,923 (45,374,886)
-------------- --------------
Net decrease in net assets resulting from operations (82,373,521) (332,315,354)
-------------- --------------
Capital Share Net decrease in net assets derived from capital share transactions (129,183,378) (570,533,138)
Transactions: -------------- --------------
Net Assets: Total decrease in net assets (211,556,899) (902,848,492)
Beginning of period 737,345,123 1,640,193,615
-------------- --------------
End of period* $ 525,788,224 $ 737,345,123
============== ==============
*Accumulated investment loss--net $ (6,119,309) $ (3,133,043)
============== ==============
See Notes to Financial Statements.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
FINANCIAL HIGHLIGHTS
The following per share data and ratios Class A
have been derived from information For the Six
provided in the financial statements. Months Ended
February 28, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
Per Share Net asset value, beginning of period $ 7.00 $ 9.48 $ 18.01 $ 13.55 $ 10.78
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net++++ --++ --++ .03 (.02) .11
Realized and unrealized gain (loss)
on investments and foreign
currency transactions--net (.83) (2.48) (6.65) 5.51 2.93
---------- ---------- ---------- ---------- ----------
Total from investment operations (.83) (2.48) (6.62) 5.49 3.04
---------- ---------- ---------- ---------- ----------
Less distributions:
Realized gain on investments--net -- -- (.59) -- (.18)
In excess of realized gain on
investments--net -- -- (1.32) (1.03) (.09)
---------- ---------- ---------- ---------- ----------
Total distributions -- -- (1.91) (1.03) (.27)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 6.17 $ 7.00 $ 9.48 $ 18.01 $ 13.55
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (11.86%)+++ (26.16%) (39.39%) 41.47% 28.46%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses 1.18%* 1.06% .93% .87% .90%
Average ========== ========== ========== ========== ==========
Net Assets: Investment income (loss)--net (.12%)* .04% .25% (.09%) .88%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 42,660 $ 55,525 $ 155,922 $ 288,517 $ 171,140
Data: ========== ========== ========== ========== ==========
Portfolio turnover 68.34% 105.73% 126.37% 75.48% 46.91%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
++Amount is less than $.01 per share.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
The following per share data and ratios Class B
have been derived from information For the Six
provided in the financial statements. Months Ended
February 28, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
Per Share Net asset value, beginning of period $ 6.83 $ 9.35 $ 17.75 $ 13.39 $ 10.68
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment loss--net++++ (.04) (.08) (.10) (.18) (.03)
Realized and unrealized gain (loss)
on investments and foreign
currency transactions--net (.80) (2.44) (6.56) 5.44 2.92
---------- ---------- ---------- ---------- ----------
Total from investment operations (.84) (2.52) (6.66) 5.26 2.89
---------- ---------- ---------- ---------- ----------
Less distributions:
Realized gain on investments--net -- -- (.54) (.90) (.18)
In excess of realized gain on
investments--net -- -- (1.20) -- --++
---------- ---------- ---------- ---------- ----------
Total distributions -- -- (1.74) (.90) (.18)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 5.99 $ 6.83 $ 9.35 $ 17.75 $ 13.39
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (12.30%)+++ (26.95%) (40.01%) 40.04% 27.27%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses 2.23%* 2.09% 1.95% 1.88% 1.91%
Average ========== ========== ========== ========== ==========
Net Assets: Investment loss--net (1.18%)* (.99%) (.77%) (1.11%) (.27%)
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 317,270 $ 456,393 $1,046,889 $2,293,020 $1,677,022
Data: ========== ========== ========== ========== ==========
Portfolio turnover 68.34% 105.73% 126.37% 75.48% 46.91%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
++Amount is less than $.01 per share.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
FINANCIAL HIGHLIGHTS (continued)
The following per share data and ratios Class C
have been derived from information For the Six
provided in the financial statements. Months Ended
February 28, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
Per Share Net asset value, beginning of period $ 6.83 $ 9.36 $ 17.76 $ 13.39 $ 10.68
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment loss--net++ (.04) (.08) (.10) (.19) (.04)
Realized and unrealized gain (loss)
on investments and foreign
currency transactions--net (.80) (2.45) (6.56) 5.45 2.93
---------- ---------- ---------- ---------- ----------
Total from investment operations (.84) (2.53) (6.66) 5.26 2.89
---------- ---------- ---------- ---------- ----------
Less distributions:
Realized gain on investments--net -- -- (.54) (.89) (.18)
In excess of realized gain on
investments--net -- -- (1.20) -- --
---------- ---------- ---------- ---------- ----------
Total distributions -- -- (1.74) (.89) (.18)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 5.99 $ 6.83 $ 9.36 $ 17.76 $ 13.39
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (12.30%)+++ (27.03%) (39.97%) 40.05% 27.23%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses 2.25%* 2.11% 1.96% 1.89% 1.92%
Average ========== ========== ========== ========== ==========
Net Assets: Investment loss--net (1.19%)* (.99%) (.78%) (1.12%) (.30%)
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 68,616 $ 95,117 $ 197,356 $ 423,800 $ 302,247
Data: ========== ========== ========== ========== ==========
Portfolio turnover 68.34% 105.73% 126.37% 75.48% 46.91%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (continued)
The following per share data and ratios Class D
have been derived from information For the Six
provided in the financial statements. Months Ended
February 28, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
Per Share Net asset value, beginning of period $ 6.95 $ 9.44 $ 17.95 $ 13.51 $ 10.75
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net++++ (.01) (.02) --++ (.06) .07
Realized and unrealized gain (loss)
on investments and foreign
currency transactions--net (.82) (2.47) (6.64) 5.50 2.94
---------- ---------- ---------- ---------- ----------
Total from investment operations (.83) (2.49) (6.64) 5.44 3.01
---------- ---------- ---------- ---------- ----------
Less distributions:
Realized gain on investments--net -- -- (.58) (1.00) (.18)
In excess of realized gain on
investments--net -- -- (1.29) -- (.07)
---------- ---------- ---------- ---------- ----------
Total distributions -- -- (1.87) (1.00) (.25)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 6.12 $ 6.95 $ 9.44 $ 17.95 $ 13.51
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (11.94%)+++ (26.38%) (39.58%) 41.18% 28.21%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses 1.43%* 1.31% 1.18% 1.12% 1.14%
Average ========== ========== ========== ========== ==========
Net Assets: Investment income (loss)--net (.37%)* (.18%) (.001%) (.35%) .51%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 97,242 $ 130,310 $ 240,027 $ 511,367 $ 301,552
Data: ========== ========== ========== ========== ==========
Portfolio turnover 68.34% 105.73% 126.37% 75.48% 46.91%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
++Amount is less than $.01 per share.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
FINANCIAL HIGHLIGHTS (concluded)
Class R
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Jan. 3, 2003++
to Feb. 28,
Increase (Decrease) in Net Asset Value: 2003
Per Share Net asset value, beginning of period $ 6.50
Operating ----------
Performance: Investment income--net++++ .01
Realized and unrealized loss on investments and foreign currency transactions--net (.51)
----------
Total from investment operations (.50)
----------
Net asset value, end of period $ 6.00
==========
Total Investment Based on net asset value per share (7.69%)+++
Return:** ==========
Ratios to Expenses 1.67%*
Average ==========
Net Assets: Investment income--net .45%*
==========
Supplemental Net assets, end of period (in thousands) --+++++
Data: ==========
Portfolio turnover 68.34%
==========
*Annualized.
**Total investment return excludes the effects of sales charges.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
+++++Amount is less than $1,000.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Growth Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund's financial statements are
prepared in conformity with accounting principles generally accepted
in the United States of America, which may require the use of
management accruals and estimates. These unaudited financial
statements reflect all adjustments, which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal,
recurring nature. The Fund offers five classes of shares. Shares of
Class A and Class D 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 B, Class C, Class D 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--Portfolio securities that are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities that are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written or
purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the over-the-
counter market, valuation is the last asked price (options written)
or the last bid price (options purchased). Short-term securities are
valued at amortized cost, which approximates market value. Other
investments, including futures contracts and related options, are
stated at market value. Securities and assets for which market
quotations are not available are valued at fair value as determined
in good faith by or under the direction of the Fund's Board of
Directors. Occasionally, events affecting the values of securities
and other assets may occur between the times at which valuations of
such securities are determined (that is, close of the market on
which such security trades) and the close of business on the NYSE.
If events (for example, company announcement, natural disasters,
market volatility) occur during such periods that are expected to
materially affect the value for such securities, those securities
may be valued at their fair market 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 Board of
Directors of the Fund.
(b) 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.
(c) Derivative financial instruments--The Fund may engage in various
portfolio investment strategies to increase or decrease the level of
risk to which the Fund is exposed more quickly and efficiently than
transactions in other types of instruments. Losses may arise due to
changes in the value of the contract or if the counterparty does not
perform under the contract.
* Options--The Fund is authorized to 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 market value of the option
written.
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
NOTES TO FINANCIAL STATEMENTS (continued)
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.
* Forward foreign exchange contracts--The Fund is authorized to
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.
* 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.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. 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.
(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.
(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.
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 Fund 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 based upon the average daily
value of the Fund's net assets at an annual rate of .75% of the
average daily net assets not exceeding $1.5 billion and .725% of the
average daily net assets in excess of $1.5 billion. 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 Fund 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 B .25% .75%
Class C .25% .75%
Class D .25% --
Class R .25% .25%
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 B, Class C, Class D 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 February 28, 2003, FAMD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class A and Class D Shares as
follows:
FAMD MLPF&S
Class A $ 15 $ 334
Class D $397 $6,316
For the six months ended February 28, 2003, MLPF&S received
contingent deferred sales charges of $161,585 and $2,160 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 February 28, 2003, the Fund lent
securities with a value of $4,801,552 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 February 28, 2003, MLIM, LLC
received $46,448 in securities lending agent fees.
In addition, MLPF&S received $184,280 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended February 28, 2003.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
For the six months ended February 28, 2003, the Fund reimbursed MLIM
$7,336 for certain accounting services.
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, PSI, MLAM U.K., FDS, FAMD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended February 28, 2003 were $388,919,188 and
$491,206,383, respectively.
Net realized losses for the six months ended February 28, 2003 and
net unrealized gains (losses) as of February 28, 2003 were as
follows:
Realized Unrealized
Losses Gains (Losses)
Long-term investments $ (161,766,990) $ (77,533,286)
Foreign currency transactions (1,295,188) 38,178
--------------- ----------------
Total $ (163,062,178) $ (77,495,108)
=============== ================
Merrill Lynch Global Growth Fund, Inc., February 28, 2003
NOTES TO FINANCIAL STATEMENTS (concluded)
As of February 28, 2003, net unrealized depreciation for Federal
income tax purposes aggregated $78,612,805, of which $6,127,239
related to appreciated securities and $84,740,044 related to
depreciated securities. At February 28, 2003, the aggregate cost of
investments for Federal income tax purposes was $606,653,916.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $129,183,378 and $570,533,138 for the six months ended February
28, 2003 and for the year ended August 31, 2002, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended February 28, 2003 Shares Amount
Shares sold 500,685 $ 3,269,410
Shares redeemed (1,515,273) (9,903,783)
-------------- ---------------
Net decrease (1,014,588) $ (6,634,373)
============== ===============
Class A Shares for the Year Dollar
Ended August 31, 2002 Shares Amount
Shares sold 1,497,562 $ 13,033,319
Shares redeemed (10,007,288) (83,170,795)
-------------- ---------------
Net decrease (8,509,726) $ (70,137,476)
============== ===============
Class B Shares for the Six Months Dollar
Ended February 28, 2003 Shares Amount
Shares sold 625,855 $ 4,015,585
Automatic conversion of shares (938,427) (6,069,214)
Shares redeemed (13,499,457) (86,253,429)
-------------- ---------------
Net decrease (13,812,029) $ (88,307,058)
============== ===============
Class B Shares for the Year Dollar
Ended August 31, 2002 Shares Amount
Shares sold 2,161,507 $ 18,590,028
Automatic conversion of shares (4,194,473) (36,215,355)
Shares redeemed (43,110,945) (365,570,987)
-------------- ---------------
Net decrease (45,143,911) $ (383,196,314)
============== ===============
Class C Shares for the Six Months Dollar
Ended February 28, 2003 Shares Amount
Shares sold 195,681 $ 1,267,539
Shares redeemed (2,656,153) (16,904,943)
-------------- ---------------
Net decrease (2,460,472) $ (15,637,404)
============== ===============
Class C Shares for the Year Dollar
Ended August 31, 2002 Shares Amount
Shares sold 728,112 $ 6,328,168
Shares redeemed (7,905,731) (67,050,802)
-------------- ---------------
Net decrease (7,177,619) $ (60,722,634)
============== ===============
Class D Shares for the Six Months Dollar
Ended February 28, 2003 Shares Amount
Shares sold 428,666 $ 2,776,792
Automatic conversion of shares 920,686 6,069,214
-------------- ---------------
Total issued 1,349,352 8,846,006
Shares redeemed (4,195,555) (27,450,649)
-------------- ---------------
Net decrease (2,846,203) $ (18,604,643)
============== ===============
Class D Shares for the Year Dollar
Ended August 31, 2002 Shares Amount
Shares sold 2,035,700 $ 18,183,018
Automatic conversion of shares 4,139,062 36,215,355
-------------- ---------------
Total issued 6,174,762 54,398,373
Shares redeemed (12,851,926) (110,875,087)
-------------- ---------------
Net decrease (6,677,164) $ (56,476,714)
============== ===============
Class R Shares for the Period
January 3, 2003++ to Dollar
February 28, 2003 Shares Amount
Shares sold 15 $ 100
-------------- ---------------
Net increase 15 $ 100
============== ===============
++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 29, 2002, the credit agreement was
renewed for one year under the same terms, except that the total
commitment was reduced from $1,000,000,000 to $500,000,000. The Fund
did not borrow under the credit agreement during the six months
ended February 28, 2003.
6. Commitments:
At February 28, 2003, the Fund had entered into foreign exchange
contracts, under which it had agreed to purchase and sell various
foreign currencies with approximate values of $2,613,000 and
$2,205,000, respectively.
7. Capital Loss Carryforward:
On August 31, 2002, the Fund had a net capital loss carryforward of
$242,107,678, all of which expires in 2010. This amount will be
available to offset like amounts of any future taxable gains.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald W. Burton, Director
M. Colyer Crum, Director
Laurie Simon Hodrick, Director
Fred G. Weiss, Director
Robert C. Doll Jr., Senior Vice President
Lawrence R. Fuller, Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Susan B. Baker, Secretary
J. Thomas Touchton, Director of Merrill Lynch Global Growth Fund,
Inc., has recently retired. The Fund's Board of Directors wishes
Mr. Touchton well in his retirement.
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-637-3863
Item 2 - Did registrant adopt a code of ethics, as of the end of the
period covered by this report, that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party? If not, why not? Briefly describe
any amendments or waivers that occurred during the period. State
here if code of ethics/amendments/waivers are on website and give
website address-. State here if fund will send code of ethics to
shareholders without charge upon request--N/A (not answered until
July 15, 2003 and only annually for funds)
Item 3 - Did the registrant's board of directors determine that the
registrant either: (i) has at least one audit committee financial
expert serving on its audit committee; or (ii) does not have an
audit committee financial expert serving on its audit committee?
If yes, disclose name of financial expert and whether he/she is
"independent," (fund may, but is not required, to disclose name/
independence of more than one financial expert) If no, explain
why not. -N/A (not answered until July 15, 2003 and only annually
for funds)
Item 4 - Disclose annually only (not answered until December 15,
2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements
for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of
the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance
of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising the fees disclosed
under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the
last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs
(a) through (c) of this Item. Registrants shall describe the nature
of the services comprising the fees disclosed under this category.
N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X. N/A.
(e)(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Items 5-6 - Reserved
Item 7 - For closed-end funds that contain voting securities in
their portfolio, describe the policies and procedures that it uses
to determine how to vote proxies relating to those portfolio
securities. N/A (not answered until July 1, 2003)
Item 8--Reserved
Item 9(a) - Disclose the conclusions of the registrant's principal
executive officer or officers and principal financial officer or
officers, or persons performing similar functions, about the
effectiveness of the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-2(c)))
based on their evaluation of these controls and procedures as of a
date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph. N/A (not answered until
July 15, 2003 and only annually for funds)
Item 9(b)--There were no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of
ethics or amendments/waivers is on website or offered to
shareholders upon request without charge. N/A.
10(b) - Attach certifications (4 in total pursuant to Sections 302
and 906 for CEO/CFO). 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 Global Growth Fund, Inc.
By: /s/ Terry K. Glenn
Terry K. Glenn,
President of
Merrill Lynch Global Growth Fund, Inc.
Date: April 21, 2003
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 Global Growth Fund, Inc.
Date: April 21, 2003
By: /s/ Donald C. Burke
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch Global Growth Fund, Inc.
Date: April 21, 2003