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 811-8327
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: 08/31/04
Date of reporting period: 09/01/03 - 02/29/04
Item 1 - Report to Stockholders
(BULL LOGO)
Merrill Lynch Investment Managers
www.mlim.ml.com
Merrill Lynch
Global Growth
Fund, Inc.
Semi-Annual Report
February 29, 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) on www.mutualfunds.ml.com;
and (3) on the Securities and Exchange Commission's website at
http://www.sec.gov.
Merrill Lynch Global Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
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Merrill Lynch Global Growth Fund, Inc.
Portfolio Information As of February 29, 2004
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
3M Co. United States 3.6%
Samsung Electronics South Korea 3.6
Porsche AG (Preferred) Germany 3.4
General Electric Company United States 2.2
eBay Inc. United States 2.0
Intel Corporation United States 1.9
Banco Popular Espanol SA Spain 1.8
A/S Dampskibsselskabet
Svendborg 'B' Denmark 1.8
HSBC Holdings PLC United Kingdom 1.7
Hewlett-Packard Company United States 1.6
Percent of
Five Largest Industries* Net Assets
Metals & Mining 10.6%
Oil & Gas 9.1
Industrial Conglomerates 8.1
Semiconductors & Semiconductor Equipment 6.8
Automobiles 6.6
*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.
Officers and Directors
Terry K. Glenn, President and Director
Donald W. Burton, Director
M. Colyer Crum, Director
Laurie Simon Hodrick, Director
David H. Walsh, 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
Phillip S. Gillespie, Secretary
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
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
A Letter From the President
Dear Shareholder
As I write to you at February month-end, the equity markets
maintained their positive momentum from year-end 2003. For the six-
month and 12-month periods ended February 29, 2004, the Standard &
Poor's 500 Index returned +14.59% and +38.52%, respectively. The
Morgan Stanley Capital International World Index, which measures the
performance of equity markets in 23 developed countries worldwide,
posted respective returns of +18.75% and +44.36% for the same six-
month and 12-month periods. Much of the boost came from improving
economic conditions in important areas around the globe.
In the United States, the major signposts indicate that we are
seeing a shift from economic growth fueled primarily by fiscal and
monetary stimulus to a broader-based, self-sustaining economic
expansion. U.S. gross domestic product (GDP) growth, which peaked at
an annualized rate of 8.2% in the third quarter of 2003, was 4.1% in
the fourth quarter. A similar level of growth is expected in the
first quarter of 2004. For its part, the Federal Reserve Board has
reiterated its willingness to keep short-term interest rates at
current low levels to ensure the economy's strength.
Elsewhere, China has led the world with a remarkable rate of
economic expansion. With real GDP growth of 9.1% in 2003, the
country has been an attractive area for investment. Japan, in the
meantime, finally appeared to be emerging from a long period of
deflation. In Europe, slower growth last year is likely to prompt
the central bank to take steps aimed at stimulating economic
activity in 2004. The European Union also is preparing to welcome 10
new member nations this year, and the enhanced integration may
create further economic opportunities.
At Merrill Lynch Investment Managers, we believe the events and
efforts of 2003 leave us with stronger global economies and that
recent optimism suggests it is time for investors to consider what
can go right in 2004. We encourage you to revisit your portfolio and
your asset allocation strategy to ensure you are well positioned to
take advantage of the opportunities that lie ahead.
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 GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
A Discussion With Your Fund's Portfolio Manager
The Fund performed in line with the benchmark MSCI World Index and
outperformed the average return of its comparable Lipper category of
global stock funds for the period.
How did the Fund perform during the period in light of the existing
market conditions?
For the six-month period ended February 29, 2004, Merrill Lynch
Global Growth Fund, Inc.'s Class A, Class B, Class C, Class I and
Class R Shares had total returns of +18.91%, +18.44%, +18.44%,
+19.00% and +19.35%, 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 - 8 of this report to shareholders.) The Fund performed in line
with the +18.75% return (in U.S. dollar terms) of its unmanaged
benchmark, the Morgan Stanley Capital International (MSCI) World
Index, for the same period. Fund results for the six-month period
exceeded the +18.15% average return of the Lipper Global Funds
category. (Funds in this Lipper category include the investment
returns of all global equity funds regardless of investment style or
market capitalization.)
The majority of the Fund's stock investments represent the
highest-quality and largest-capitalization companies in the MSCI
World Index. These companies, as a group, continued to provide a
lower average investment return than the lower-quality, smaller-
capitalization stocks in the benchmark. This served to somewhat
suppress the Fund's returns, notwithstanding the competitive results
achieved during the six-month period ended February 29, 2004.
The industry sectors that had a negative effect on Fund performance
during the period were information technology, industrials,
financials and health care. Detracting from returns in the
information technology sector were SanDisk Corporation, Amadeus
Global Travel Distribution SA, Altera Corporation, Cap Gemini Ernst
& Young, UTStarcom Inc., Canon, Inc., Intel Corporation, Electronic
Arts Inc. and Xilinx, Inc. We liquidated our positions in Xilinx,
UTStarcom, Altera and Cap Gemini Ernst & Young, based on concerns
about declining fundamentals at the company level.
In the industrial sector, stocks that had a negative impact included
Johnson Electric Holdings Limited, 3M Co., Adecco SA, Rockwell
Automation, Inc., Daewoo Shipbuilding & Marine Engineering Co., Ltd.
and General Electric Company. We sold our holding in Adecco, where
the stock price decline was prompted by management's disclosure of
an accounting fraud in their North American operations. We
maintained our positions in the other industrial investments based
on our outlook for a continued global recovery in capital spending
and better profits and profitability for most industrial companies.
In the financial sector, our lack of exposure to several bank
holding companies, which have been the object of corporate takeovers
(for example, FleetBoston Financial Corp. and Deutsche Bank AG), was
a negative influence. All of the bank holding companies that we did
hold in the portfolio contributed positively to performance. In the
health care sector, our investments in Gilead Sciences, Inc.,
Medtronic, Inc. and Biogen Idec Inc. detracted from Fund results.
These stock price declines were prompted by what we believe to be
short-term concerns about the business fundamentals of the
companies.
In terms of positive influences on Fund performance, the largest was
our overweight exposure to companies in the materials and energy
sectors. In the materials sector, the most important contributors
were Aluminum Corp. of China Limited, Yanzhou Coal Mining Co., Ltd.
and BHP Billiton Limited. We took meaningful profits in all of these
securities late in the period. In the energy sector, the Fund
benefited most from our investments in PetroChina Co. Ltd., Suncor
Energy Inc., Schlumberger Ltd. and Woodside Petroleum Ltd. Other
holdings that made a significant positive contribution to
performance were Porsche AG, Infosys Technologies Ltd., Varian
Medical Systems, Inc. and Banco Popular Espanol SA. We sold our
position in Infosys at a meaningful profit based on what appeared to
be a relatively high valuation.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
What changes were made to the portfolio during the period?
We did not make any major changes in the sector weightings or the
investment strategy of the Fund during the past six months. We
continued to overweight the consumer discretionary, information
technology, materials and energy sectors, which we believe will
benefit from the burgeoning global economic recovery.
We took profits in several of our investments in the materials,
energy, consumer discretionary, information technology and
utilities sectors. The valuation ratios on many of these companies
rose substantially during the period. Some of the stocks that
were liquidated include Chinese National Offshore Oil Company
Ltd., International Game Technology, Chico's FAS Inc., Magna
International Inc., Petro-Canada, Huaneng Power International, Inc.
and Genentech Inc.
We continued to position the Fund to take advantage of opportunities
arising from China's dramatic growth. Specifically, our focus has
been on those companies providing China with the raw materials,
goods, services and energy needed to fuel its expansion.
How would you characterize the portfolio's position at the close of
the period?
We expect to see a shift in U.S. economic growth propelled by
consumer spending to economic growth fueled by increased capital
spending. Many forecasters have articulated a negative outlook on
consumer spending, citing a decline in retailing stock prices in
December 2003 and January 2004. However, reports in February and
March 2004 have shown a substantial rise in real and nominal
consumer spending. We believe this was prompted by the start of the
Federal disbursement of tax rebate checks for the over-withholding
of 2003 individual income taxes (that is, those taxes paid prior to
the passage of the Federal tax cut).
Orders for capital goods have grown in recent months, partly because
of the accelerated depreciation incentive passed by Federal
legislators in 2003. This could result in improved employment in the
manufacturing sector and higher profits for information technology
and industrial goods companies in 2004. For 2003, even before the
reporting of fourth-quarter results, taxable corporate profits, cash
flow and reported profits - as measured by the U.S. Department of
Commerce - were at absolute record levels.
Equally important for global growth and rising corporate profits is
China, which has continued to grow at an above-average rate.
Consumer markets are still relatively muted in comparison to the
government's demand for public infrastructure needs - including
everything from roads to power generation plants. However, consumer
demand is growing rapidly in all areas, from cellular phone service
to automobiles and air conditioners.
The Fund is invested in stocks of companies that we believe could
prosper from the rapidly growing demand for energy, materials,
industrial goods, technology components and equipment on the part of
China-based manufacturers. The Fund has meaningful positions in
companies in Australia, Hong Kong and South Korea, where we believe
corporate profits will be biased upward by a continued above-average
real rate of growth in China.
Lawrence R. Fuller
Vice President and Portfolio Manager
March 15, 2004
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Performance Data
About Fund Performance
Effective April 14, 2003, Class A Shares were redesignated Class I
Shares and Class D Shares were redesignated Class A Shares.
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 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 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
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 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.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Performance Data (continued)
Recent Performance Results
6-Month 12-Month Since Inception
As of February 29, 2004 Total Return Total Return Total Return
ML Global Growth Fund, Inc.--Class A Shares* +18.91% +45.92% +11.22%
ML Global Growth Fund, Inc.--Class B Shares* +18.44 +44.74 + 5.89
ML Global Growth Fund, Inc.--Class C Shares* +18.44 +44.74 + 5.83
ML Global Growth Fund, Inc.--Class I Shares* +19.00 +46.19 +12.98
ML Global Growth Fund, Inc.--Class R Shares* +19.35 +47.00 +35.69
MSCI World Index** +18.75 +44.36 +27.26/+33.83
*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 & Class I 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 1/03/03.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Performance Data (concluded)
Average Annual Total Return
Return Without Return With
Sales Charge Sales Charge**
Class A Shares*
One Year Ended 2/29/04 +45.92% +38.25%
Five Years Ended 2/29/04 - 3.53 - 4.57
Inception (10/31/97)
through 2/29/04 + 1.69 + 0.83
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Return Return
Without CDSC With CDSC**
Class B Shares*
One Year Ended 2/29/04 +44.74% +40.74%
Five Years Ended 2/29/04 - 4.28 - 4.60
Inception (10/31/97)
through 2/29/04 + 0.91 + 0.91
*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 2/29/04 +44.74% +43.74%
Five Years Ended 2/29/04 - 4.28 - 4.28
Inception (10/31/97)
through 2/29/04 + 0.90 + 0.90
*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 2/29/04 +46.19% +38.52%
Five Years Ended 2/29/04 - 3.29 - 4.33
Inception (10/31/97)
through 2/29/04 + 1.95 + 1.08
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Return Without
Sales Charge
Class R Shares
One Year Ended 2/29/04 +47.00%
Inception (1/03/03)
through 2/29/04 +30.29
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Schedule of Investments
Value Percent of
EUROPE Industry* Shares Held Common Stock (in U.S. dollars) Net Assets
Denmark Marine 1,375 A/S Dampskibsselskabet Svendborg 'B' $ 11,554,622 1.8%
Total Common Stock in Denmark 11,554,622 1.8
Finland Communications 388,400 Nokia Oyj (Series A) 8,508,008 1.3
Equipment
Total Common Stock in Finland 8,508,008 1.3
France Automobiles 203,000 PSA Peugeot Citroen 10,101,711 1.6
Electrical Equipment 700,000 ++Alstom 1,869,962 0.3
Energy Equipment 33,858 Compagnie Francaise d'Etudes et de Construction
& Service (Technip SA) 4,711,679 0.7
Media 181,200 Societe Television Francaise 1 6,236,405 1.0
Semiconductors & 87,300 STMicroelectronics NV 2,261,605 0.3
Semiconductor
Equipment
Total Common Stock in France 25,181,362 3.9
Germany Distributors 70,500 Medion AG 2,947,614 0.5
Industrial 105,100 Siemens AG 8,102,908 1.3
Conglomerates
Software 9,800 SAP AG (Systeme, Anwendungen, Produkte in der
Datenverarbeitung) 1,546,416 0.2
Total Common Stock in Germany 12,596,938 2.0
Norway Oil & Gas 165,000 Frontline Limited 5,273,850 0.8
Total Common Stock in Norway 5,273,850 0.8
Russia Metals & Mining 47,400 Mining and Metallurgical Company Norilsk
Nickel (ADR) (a) 3,318,000 0.5
Oil & Gas 150,350 YUKOS (ADR) (a) 7,559,598 1.2
Total Common Stock in Russia 10,877,598 1.7
Spain Commercial Banks 193,900 Banco Popular Espanol SA 11,768,978 1.8
Construction 149,004 ACS, Actividades de Construccion y Servicios, SA 7,538,798 1.2
& Engineering
IT Services 1,050,000 Amadeus Global Travel Distribution SA 'A' 6,249,154 1.0
Total Common Stock in Spain 25,556,930 4.0
Sweden Machinery 95,500 SKF AB 'B' 3,527,914 0.6
Total Common Stock in Sweden 3,527,914 0.6
Switzerland Health Care 113,700 Alcon, Inc. 7,147,182 1.1
Equipment & Supplies 3,500 Synthes-Stratec Inc. 3,532,932 0.6
Total Common Stock in Switzerland 10,680,114 1.7
United Commercial Banks 650,600 HSBC Holdings PLC 10,570,646 1.7
Kingdom
Household Products 276,500 Reckitt Benckiser PLC 7,214,592 1.1
Media 491,100 British Sky Broadcasting Group PLC ("BSkyB") 6,571,076 1.0
Metals & Mining 254,600 Rio Tinto PLC (Registered Shares) 6,808,535 1.1
Oil & Gas 1,435,700 BG Group PLC 8,446,062 1.3
Total Common Stock in the United Kingdom 39,610,911 6.2
Total Common Stock in Europe 153,368,247 24.0
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Schedule of Investments (continued)
NORTH Value Percent of
AMERICA Industry* Shares Held Common Stock (in U.S. dollars) Net Assets
Canada Gas Utilities 352,700 TransCanada Corporation $ 7,284,008 1.1%
Metals & Mining 412,200 Barrick Gold Corporation 8,365,348 1.3
200,000 Teck Cominco Limited 'B' 3,756,289 0.6
-------------- ------
12,121,637 1.9
Oil & Gas 390,700 Suncor Energy, Inc. 10,124,568 1.6
Total Common Stock in Canada 29,530,213 4.6
United Biotechnology 123,500 ++Biogen Idec Inc. 6,848,075 1.1
States 178,900 ++Gilead Sciences, Inc. 9,698,169 1.5
-------------- ------
16,546,244 2.6
Chemicals 65,000 Air Products and Chemicals, Inc. 3,135,600 0.5
94,000 Praxair, Inc. 3,414,080 0.5
-------------- ------
6,549,680 1.0
Communications 344,100 ++Cisco Systems, Inc. 7,948,710 1.3
Equipment 1,991,200 ++Lucent Technologies Inc. 8,343,128 1.3
-------------- ------
16,291,838 2.6
Computers & 376,400 ++EMC Corporation 5,390,048 0.9
Peripherals 458,400 Hewlett-Packard Company 10,410,264 1.6
209,400 ++SanDisk Corporation 5,310,384 0.8
-------------- ------
21,110,696 3.3
Electrical Equipment 250,800 Rockwell Automation, Inc. 7,639,368 1.2
Electronic Equipment 62,500 ++Agilent Technologies, Inc. 2,136,875 0.3
& Instruments 39,100 Tektronix, Inc. 1,253,155 0.2
-------------- ------
3,390,030 0.5
Energy Equipment 72,900 Diamond Offshore Drilling, Inc. 1,823,229 0.3
& Service 130,500 Schlumberger Limited 8,415,945 1.3
150,000 ++Transocean Inc. 4,422,000 0.7
90,000 ++Weatherford International Ltd. 4,032,000 0.6
-------------- ------
18,693,174 2.9
Health Care Equipment 150,100 Medtronic, Inc. 7,039,690 1.1
& Supplies 77,100 ++Varian Medical Systems, Inc. 6,456,354 1.0
-------------- ------
13,496,044 2.1
Hotels, Restaurants 72,400 Mandalay Resort Group 3,721,360 0.6
& Leisure 100,000 ++Wynn Resorts, Limited 3,634,000 0.6
-------------- ------
7,355,360 1.2
Industrial 297,400 3M Co. 23,203,148 3.6
Conglomerates 428,300 General Electric Company 13,928,316 2.2
-------------- ------
37,131,464 5.8
Internet & Catalog 181,200 ++eBay Inc. 12,477,432 2.0
Retail
Internet Software 72,500 ++Yahoo! Inc. 3,219,000 0.5
& Services
Metals & Mining 63,200 Freeport-McMoRan Copper & Gold, Inc. (Class B) 2,695,480 0.4
91,600 ++Phelps Dodge Corporation 7,901,416 1.2
-------------- ------
10,596,896 1.6
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Schedule of Investments (continued)
NORTH AMERICA Value Percent of
(concluded) Industry* Shares Held Common Stock (in U.S. dollars) Net Assets
United Oil & Gas 336,900 Chesapeake Energy Corporation $ 4,319,058 0.7%
States 75,000 Frontline Limited 2,433,750 0.4
(concluded) -------------- ------
6,752,808 1.1
Pharmaceuticals 110,000 ++Forest Laboratories, Inc. 8,302,800 1.3
Semiconductors 423,200 Intel Corporation 12,370,136 1.9
& Semiconductor 205,500 Texas Instruments Incorporated 6,298,575 1.0
Equipment -------------- ------
18,668,711 2.9
Software 161,600 ++Electronic Arts Inc. 7,621,056 1.2
250,000 ++Oracle Corporation 3,220,000 0.5
-------------- ------
10,841,056 1.7
Specialty Retail 188,100 Best Buy Co., Inc. 10,016,325 1.6
184,300 Lowe's Companies, Inc. 10,320,800 1.6
382,900 PETsMART, Inc. 10,391,906 1.6
53,000 Ross Stores, Inc. 1,698,650 0.3
-------------- ------
32,427,681 5.1
Total Common Stock in the United States 251,490,282 39.4
Total Common Stock in North America 281,020,495 44.0
PACIFIC BASIN
Australia Airlines 3,043,500 Qantas Airways Limited 8,711,870 1.4
Commercial Banks 257,200 Australia and New Zealand Banking Group Ltd. 3,569,984 0.5
Construction 900,000 Boral Limited 4,263,586 0.7
Materials
Food & Staples 563,100 Woolworths Limited 5,096,215 0.8
Retailing
Industrial 195,800 Wesfarmers Limited 4,154,412 0.6
Conglomerates
Media 525,071 The News Corporation Limited 4,930,294 0.8
Metals & Mining 1,400,000 Alumina Limited 5,940,936 0.9
764,500 BHP Billiton Limited 7,231,562 1.1
1,500,000 WMC Resources Limited 6,052,811 1.0
-------------- ------
19,225,309 3.0
Multiline Retail 1,500,000 Harvey Norman Holdings Limited 3,240,511 0.5
Oil & Gas 795,300 Woodside Petroleum Limited 9,339,203 1.5
Road & Rail 450,000 Toll Holdings Limited 3,371,288 0.5
Total Common Stock in Australia 65,902,672 10.3
China Internet Software 46,200 ++SINA.com 2,041,162 0.3
& Services
Metals & Mining 4,300,000 Aluminum Corporation of China Limited 3,480,283 0.5
3,084,000 Yanzhou Coal Mining Co. Ltd. 'H' 3,546,034 0.6
-------------- ------
7,026,317 1.1
Total Common Stock in China 9,067,479 1.4
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Schedule of Investments (continued)
PACIFIC BASIN Value Percent of
(concluded) Industry* Shares Held Common Stock (in U.S. dollars) Net Assets
Hong Kong Airlines 4,625,000 Cathay Pacific Airways $ 9,417,737 1.5%
Construction 1,798,000 Cheung Kong Infrastructure Holdings Limited 4,585,173 0.7
Materials
Electrical 3,103,000 Johnson Electric Holdings Limited 3,727,339 0.6
Equipment
Industrial 1,700,000 China Merchants Holdings International Company
Conglomerates Limited 2,478,850 0.4
Marine 3,400,000 China Shipping Development Company Limited 'H' 2,708,171 0.4
Oil & Gas 9,834,000 PetroChina Company Limited 5,274,633 0.8
Specialty Retail 782,000 Esprit Holdings Limited 3,054,118 0.5
Transportation 1,700,000 Cosco Pacific Limited 2,588,051 0.4
Infrastructure
Total Common Stock in Hong Kong 33,834,072 5.3
Japan Metals & Mining 170,500 JFE Holdings, Inc. 4,306,974 0.7
Office Electronics 130,000 Canon, Inc. 6,341,754 1.0
Total Common Stock in Japan 10,648,728 1.7
South Korea Automobiles 235,000 Hyundai Motor Company Ltd. 9,991,497 1.6
Chemicals 45,500 LG Chem, Ltd. 2,224,702 0.3
Diversified 81,200 KT Corporation 3,003,571 0.5
Telecommunication
Services
Machinery 139,800 Daewoo Shipbuilding & Marine Engineering Co., Ltd. 1,628,622 0.3
Metals & Mining 31,600 POSCO 4,648,639 0.7
Oil & Gas 150,000 S-Oil Corporation 5,433,673 0.8
Semiconductors 49,600 Samsung Electronics 22,986,395 3.6
& Semiconductor
Equipment
Total Common Stock in South Korea 49,917,099 7.8
Total Common Stock in the Pacific Basin 169,370,050 26.5
Total Common Stock
(Cost--$503,979,988) 603,758,792 94.5
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Schedule of Investments (concluded)
Value Percent of
EUROPE Industry* Shares Held Preferred Stock (in U.S. dollars) Net Assets
Germany Automobiles 37,028 Porsche AG $ 21,547,973 3.4%
Total Preferred Stock in Europe 21,547,973 3.4
PACIFIC BASIN
Australia Media 473,919 The News Corporation Limited 3,916,136 0.6
Total Preferred Stock in the Pacific Basin 3,916,136 0.6
Total Preferred Stock
(Cost--$18,188,292) 25,464,109 4.0
Beneficial Interest/
Shares Held Short-Term Securities
$13,005,405 Merrill Lynch Liquidity Series, LLC Cash Sweep
Series I (b) 13,005,405 2.0
$65,216,100 Merrill Lynch Liquidity Series, LLC Money
Market Series (b)(c) 65,216,100 10.2
21,738,700 Merrill Lynch Premier Institutional Fund (b)(c) 21,738,700 3.4
Total Short-Term Securities
(Cost--$99,960,205) 99,960,205 15.6
Total Investments (Cost--$622,128,485) 729,183,106 114.1
Liabilities in Excess of Other Assets (90,250,917) (14.1)
-------------- ------
Net Assets $ 638,932,189 100.0%
============== ======
*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)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:
Interest/
Net Dividend
Affiliate Activity Income
Merrill Lynch Liquidity Series, LLC
Cash Sweep Series I $13,005,405 $60,335
Merrill Lynch Liquidity Series, LLC
Money Market Series $19,613,130 $60,876
Merrill Lynch Premier Institutional Fund (8,663,280) $23,528
(c)Security was purchased with the cash proceeds from securities
loans.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Statement of Assets and Liabilities
As of February 29, 2004
Assets
Investments, at value (including securities loaned of $79,414,206)
(identified cost--$622,128,485) $ 729,183,106
Foreign cash (cost--$393) 391
Receivables:
Securities sold $ 6,273,312
Dividends 2,604,822
Capital shares sold 114,993
Securities lending--net 13,202
Interest from affiliates 2,796 9,009,125
---------------
Prepaid registration fees 140,054
---------------
Total assets 738,332,676
---------------
Liabilities
Collateral on securities loaned, at value 86,954,800
Payables:
Securities purchased 8,815,293
Capital shares redeemed 2,419,564
Other affiliates 429,708
Investment adviser 370,899
Distributor 331,595 12,367,059
---------------
Accrued expenses and other liabilities 78,628
---------------
Total liabilities 99,400,487
---------------
Net Assets
Net assets $ 638,932,189
===============
Net Assets Consist of
Class A Shares of Common Stock, $.10 par value, 100,000,000
shares authorized $ 1,304,667
Class B Shares of Common Stock, $.10 par value, 300,000,000
shares authorized 3,762,354
Class C Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 856,601
Class I Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,349,623
Class R Shares of Common Stock, $.10 par value, 300,000,000
shares authorized 6
Paid-in capital in excess of par 1,178,158,396
Accumulated investment loss--net $ (2,261,968)
Accumulated realized capital losses on investments and foreign currency
transactions--net (651,369,918)
Unrealized appreciation on investments and foreign currency
transactions--net 107,132,428
---------------
Total accumulated losses--net (546,499,458)
---------------
Net Assets $ 638,932,189
===============
Net Asset Value
Class A--Based on net assets of $116,544,513 and 13,046,671
shares outstanding $ 8.93
===============
Class B--Based on net assets of $326,317,607 and 37,623,543
shares outstanding $ 8.67
===============
Class C--Based on net assets of $74,285,642 and 8,566,014
shares outstanding $ 8.67
===============
Class I--Based on net assets of $121,783,925 and 13,496,229
shares outstanding $ 9.02
===============
Class R--Based on net assets of $502.30 and 56.929 shares outstanding $ 8.82
===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Statement of Operations
For the Six Months Ended February 29, 2004
Investment Income
Dividends (net of $355,593 foreign withholding tax) $ 4,709,845
Securities lending--net 84,404
Interest from affiliates 60,335
---------------
Total income 4,854,584
---------------
Expenses
Investment advisory fees $ 2,458,684
Account maintenance and distribution fees--Class B 1,647,953
Transfer agent fees--Class B 450,420
Account maintenance and distribution fees--Class C 367,415
Transfer agent fees--Class I 163,351
Account maintenance fees--Class A 141,861
Accounting services 134,028
Transfer agent fees--Class A 133,338
Transfer agent fees--Class C 106,436
Custodian fees 98,182
Professional fees 44,335
Printing and shareholder reports 43,135
Directors' fees and expenses 35,633
Registration fees 34,888
Pricing fees 6,031
Other 28,095
---------------
Total expenses 5,893,785
---------------
Investment loss--net (1,039,201)
---------------
Realized & Unrealized Gain (Loss) on Investments & Foreign Currency Transactions--Net
Realized gain (loss) on:
Investments--net 85,796,215
Foreign currency transactions--net (830,916) 84,965,299
---------------
Change in unrealized appreciation/depreciation on:
Investments--net 28,512,806
Foreign currency transactions--net 216,799 28,729,605
--------------- ---------------
Total realized and unrealized gain on investments and foreign currency
transactions--net 113,694,904
---------------
Net Increase in Net Assets Resulting from Operations $ 112,655,703
===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
February 29, August 31,
Increase (Decrease) in Net Assets: 2004 2003
Operations
Investment loss--net $ (1,039,201) $ (1,039,227)
Realized gain (loss) on investments and foreign currency
transactions--net 84,965,299 (201,969,464)
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net 28,729,605 233,728,261
--------------- ---------------
Net increase in net assets resulting from operations 112,655,703 30,719,570
--------------- ---------------
Capital Share Transactions
Net decrease in net assets derived from capital share transactions (116,643,451) (125,144,756)
--------------- ---------------
Net Assets
Total decrease in net assets (3,987,748) (94,425,186)
Beginning of period 642,919,937 737,345,123
--------------- ---------------
End of period* $ 638,932,189 $ 642,919,937
=============== ===============
*Accumulated investment loss--net $ (2,261,968) $ (1,222,767)
=============== ===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 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
February 29, For the Year Ended August 31,+++
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
Per Share Operating Performance
Net asset value, beginning of period $ 7.51 $ 6.95 $ 9.44 $ 17.95 $ 13.51
---------- ---------- ---------- ---------- ----------
Investment income (loss)--net*** --++++++++ .03 (.02) --+++++ (.06)
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net 1.42 .53 (2.47) (6.64) 5.50
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.42 .56 (2.49) (6.64) 5.44
---------- ---------- ---------- ---------- ----------
Less distributions from:
Realized gain on investments--net -- -- -- (.58) (1.00)
In excess of realized gain on
investments--net -- -- -- (1.29) --
---------- ---------- ---------- ---------- ----------
Total distributions -- -- -- (1.87) (1.00)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 8.93 $ 7.51 $ 6.95 $ 9.44 $ 17.95
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 18.91%++ 8.06% (26.38%) (39.58%) 41.18%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses 1.36%* 1.42% 1.31% 1.18% 1.12%
========== ========== ========== ========== ==========
Investment income (loss)--net .12%* .40% (.18%) (.001%) (.35%)
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 116,545 $ 110,092 $ 130,310 $ 240,027 $ 511,367
========== ========== ========== ========== ==========
Portfolio turnover 47.82% 121.00% 105.73% 126.37% 75.48%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
***Based on average shares outstanding.
++Aggregate total investment return.
+++Effective April 14, 2003, Class D Shares were redesignated Class
A Shares.
+++++Amount is less than $(.01) per share.
++++++++Amount is less than $.01 per share.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 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
February 29, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
Per Share Operating Performance
Net asset value, beginning of period $ 7.32 $ 6.83 $ 9.35 $ 17.75 $ 13.39
---------- ---------- ---------- ---------- ----------
Investment loss--net*** (.03) (.03) (.08) (.10) (.18)
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net 1.38 .52 (2.44) (6.56) 5.44
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.35 .49 (2.52) (6.66) 5.26
---------- ---------- ---------- ---------- ----------
Less distributions from:
Realized gain on investments--net -- -- -- (.54) (.90)
In excess of realized gain on
investments--net -- -- -- (1.20) --
---------- ---------- ---------- ---------- ----------
Total distributions -- -- -- (1.74) (.90)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 8.67 $ 7.32 $ 6.83 $ 9.35 $ 17.75
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 18.44%++ 7.17% (26.95%) (40.01%) 40.04%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses 2.15%* 2.22% 2.09% 1.95% 1.88%
========== ========== ========== ========== ==========
Investment loss--net (.67%)* (.43%) (.99%) (.77%) (1.11%)
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 326,318 $ 327,483 $ 456,393 $1,046,889 $2,293,020
========== ========== ========== ========== ==========
Portfolio turnover 47.82% 121.00% 105.73% 126.37% 75.48%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
***Based on average shares outstanding.
++Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 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
February 29, For the Year Ended August 31,
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
Per Share Operating Performance
Net asset value, beginning of period $ 7.32 $ 6.83 $ 9.36 $ 17.76 $ 13.39
---------- ---------- ---------- ---------- ----------
Investment loss--net*** (.03) (.03) (.08) (.10) (.19)
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net 1.38 .52 (2.45) (6.56) 5.45
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.35 .49 (2.53) (6.66) 5.26
---------- ---------- ---------- ---------- ----------
Less distributions from:
Realized gain on investments--net -- -- -- (.54) (.89)
In excess of realized gain on
investments--net -- -- -- (1.20) --
---------- ---------- ---------- ---------- ----------
Total distributions -- -- -- (1.74) (.89)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 8.67 $ 7.32 $ 6.83 $ 9.36 $ 17.76
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 18.44%++ 7.17% (27.03%) (39.97%) 40.05%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses 2.16%* 2.24% 2.11% 1.96% 1.89%
========== ========== ========== ========== ==========
Investment loss--net (.69%)* (.43%) (.99%) (.78%) (1.12%)
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 74,286 $ 72,249 $ 95,117 $ 197,356 $ 423,800
========== ========== ========== ========== ==========
Portfolio turnover 47.82% 121.00% 105.73% 126.37% 75.48%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
***Based on average shares outstanding.
++Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 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
February 29, For the Year Ended August 31,+++
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
Per Share Operating Performance
Net asset value, beginning of period $ 7.58 $ 7.00 $ 9.48 $ 18.01 $ 13.55
---------- ---------- ---------- ---------- ----------
Investment income (loss)--net*** .02 .04 --+++++ .03 (.02)
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net 1.42 .54 (2.48) (6.65) 5.51
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.44 .58 (2.48) (6.62) 5.49
---------- ---------- ---------- ---------- ----------
Less distributions from:
Realized gain on investments--net -- -- -- (.59) --
In excess of realized gain on
investments--net -- -- -- (1.32) (1.03)
---------- ---------- ---------- ---------- ----------
Total distributions -- -- -- (1.91) (1.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.02 $ 7.58 $ 7.00 $ 9.48 $ 18.01
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 19.00%++ 8.29% (26.16%) (39.39%) 41.47%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses 1.11%* 1.16% 1.06% .93% .87%
========== ========== ========== ========== ==========
Investment income (loss)--net .36%* .63% .04% .25% (.09%)
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 121,784 $ 133,096 $ 55,525 $ 155,922 $ 288,517
========== ========== ========== ========== ==========
Portfolio turnover 47.82% 121.00% 105.73% 126.37% 75.48%
========== ========== ========== ========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
***Based on average shares outstanding.
++Aggregate total investment return.
+++Effective April 14, 2003, Class A Shares were redesignated Class
I Shares.
+++++Amount is less than $.01 per share.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Financial Highlights (concluded)
Class R
For the For the
Six Period
The following per share data and ratios have been derived Months January 3,
from information provided in the financial statements. Ended 2003++ to
February 29, August 31,
Increase (Decrease) in Net Asset Value: 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 7.39 $ 6.50
---------- ----------
Investment income (loss)--net*** --++++ .06
Realized and unrealized gain on investments and foreign currency transactions--net 1.43 .83
---------- ----------
Total from investment operations 1.43 .89
---------- ----------
Net asset value, end of period $ 8.82 $ 7.39
========== ==========
Total Investment Return**
Based on net asset value per share 19.35%+++ 13.69%+++
========== ==========
Ratios to Average Net Assets
Expenses 1.61%* 1.64%*
========== ==========
Investment income (loss)--net (.14)%* .66%*
========== ==========
Supplemental Data
Net assets, end of period (in thousands) --+++++ --+++++
========== ==========
Portfolio turnover 47.82% 121.00%
========== ==========
*Annualized.
**Total investment return excludes the effects of sales charges.
***Based on average shares outstanding.
++Commencement of operations.
++++Amount is less than $(.01) per share.
+++Aggregate total investment return.
+++++Amount is less than $1,000.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
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 amended, 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 multiple classes of
shares. The Fund's financial statements and financial highlights
contained within this report reflect the new share class
redesignation. 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.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Notes to Financial Statements (continued)
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.
(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 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.
* 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 market 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.
* 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.
* 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.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Notes to Financial Statements (continued)
(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 in 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 UK 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:
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Notes to Financial Statements (continued)
Account
Maintenance Distribution
Fee Fee
Class A .25% --
Class B .25% .75%
Class C .25% .75%
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 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 February 29, 2004, FAMD earned underwriting
discounts and direct commissions 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 $ 472 $ 7,430
Class I $ 75 $ 1,012
For the six months ended February 29, 2004, MLPF&S received
contingent deferred sales charges of $81,473 and $834 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 29, 2004, the Fund lent
securities with a value of $3,446,780 to MLPF&S. 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 29, 2004, MLIM, LLC received $36,136
in securities lending agent fees.
In addition, MLPF&S received $223,311 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended February 29, 2004.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
For the six months ended February 29, 2004, the Fund reimbursed MLIM
$6,825 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 29, 2004 were $305,655,957 and
$439,166,824, respectively.
Net realized gains (losses) for the six months ended February 29,
2004 and net unrealized gains as of February 29, 2004 were as
follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 85,796,215 $ 107,054,621
Foreign currency transactions (830,916) 77,807
-------------- --------------
Total $ 84,965,299 $ 107,132,428
============== ==============
As of February 29, 2004, net unrealized appreciation for Federal
income tax purposes aggregated $106,778,319, of which $115,436,850
related to appreciated securities and $8,658,531 related to
depreciated securities. At February 29, 2004, the aggregate cost of
investments for Federal income tax purposes was $622,404,787.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $116,643,451 and $125,144,756 for the six months ended February
29, 2004 and year ended August 31, 2003, respectively.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Notes to Financial Statements (continued)
Transactions in capital shares for each class were as follows:
Class A Shares for the
Six Months Ended Dollar
February 29, 2004 Shares Amount
Shares sold 492,414 $ 4,117,724
Automatic conversion of shares 712,443 6,010,133
-------------- ---------------
Total issued 1,204,857 10,127,857
Shares redeemed (2,822,125) (23,345,823)
-------------- ---------------
Net decrease (1,617,268) $ (13,217,966)
============== ===============
Class A Shares for the Year Dollar
Ended August 31, 2003 Shares Amount
Shares sold 1,447,586 $ 9,404,253
Automatic conversion of shares 1,605,746 10,648,241
Shares issued resulting
from reorganization 745,332 5,241,248
-------------- ---------------
Total issued 3,798,664 25,293,742
Shares redeemed (7,871,569) (51,893,742)
-------------- ---------------
Net decrease (4,072,905) $ (26,558,031)
============== ===============
Class B Shares for the
Six Months Ended Dollar
February 29, 2004 Shares Amount
Shares sold 689,070 $ 5,615,882
Automatic conversion of shares (732,632) (6,010,133)
Shares redeemed (7,082,910) (57,127,126)
-------------- ---------------
Net decrease (7,126,472) $ (57,521,377)
============== ===============
Class B Shares for the Year Dollar
Ended August 31, 2003 Shares Amount
Shares sold 1,101,287 $ 7,120,141
Shares issued resulting
from reorganization 271,517 1,862,806
-------------- ---------------
Total issued 1,372,804 8,982,947
Automatic conversion of shares (1,639,784) (10,648,241)
Shares redeemed (21,773,344) (140,152,217)
-------------- ---------------
Net decrease (22,040,324) $ (141,817,511)
============== ===============
Class C Shares for the
Six Months Ended Dollar
February 29, 2004 Shares Amount
Shares sold 177,276 $ 1,460,184
Shares redeemed (1,484,377) (11,944,380)
-------------- ---------------
Net decrease (1,307,101) $ (10,484,196)
============== ===============
Class C Shares for the Year Dollar
Ended August 31, 2003 Shares Amount
Shares sold 307,912 $ 2,004,970
Shares issued resulting
from reorganization 48,496 332,713
-------------- ---------------
Total issued 356,408 2,337,683
Shares redeemed (4,400,754) (28,280,421)
-------------- ---------------
Net decrease (4,044,346) $ (25,942,738)
============== ===============
Class I Shares for the
Six Months Ended Dollar
February 29, 2004 Shares Amount
Shares sold 1,665,181 $ 13,932,189
Shares redeemed (5,739,164) (49,352,469)
-------------- ---------------
Net decrease (4,073,983) $ (35,420,280)
============== ===============
Class I Shares for the Year Dollar
Ended August 31, 2003 Shares Amount
Shares sold 1,162,683 $ 7,798,444
Shares issued resulting
from reorganization 11,510,221 81,644,938
-------------- ---------------
Total issued 12,672,904 89,443,382
Shares redeemed (3,035,018) (20,269,958)
-------------- ---------------
Net increase 9,637,886 $ 69,173,424
============== ===============
Class R Shares for the
Six Months Ended Dollar
February 29, 2004 Shares Amount
Shares sold 42 $ 368
-------------- ---------------
Net increase 42 $ 368
============== ===============
Class R Shares for the
Period January 3, 2003++ Dollar
to August 31, 2003 Shares Amount
Shares sold 15 $ 100
-------------- ---------------
Net increase 15 $ 100
============== ===============
++Commencement of operations.
MERRILL LYNCH GLOBAL GROWTH FUND, INC., FEBRUARY 29, 2004
Notes to Financial Statements (concluded)
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 February 29, 2004.
6. Commitments:
At February 29, 2004, the Fund had entered into foreign exchange
contracts, under which it had agreed to sell foreign currency with
an approximate value of $6,266,000.
7. Capital Loss Carryforward:
On August 31, 2003, the Fund had a net capital loss carryforward of
approximately $622,850,819 of which $20,265,967 expires in 2008,
$3,964,136 expires in 2009, $246,071,814 expires in 2010 and
$352,548,902 expires in 2011. This amount will be available to
offset like amounts of any future taxable gains.
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 website
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 GLOBAL GROWTH FUND, INC., FEBRUARY 29, 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 Global Growth Fund, Inc.
By: _/s/ Terry K. Glenn_______
Terry K. Glenn,
President of
Merrill Lynch Global Growth Fund, Inc.
Date: April 16, 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 Global Growth Fund, Inc.
Date: April 16, 2004
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch Global Growth Fund, Inc.
Date: April 16, 2004