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 811-05576
Name of Fund: Merrill Lynch Global Allocation Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, Merrill Lynch Global Allocation 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: 10/31/05
Date of reporting period: 11/01/04 - 04/30/05
Item 1 - Report to Stockholders
Merrill Lynch
Global Allocation Fund, Inc.
Semi-Annual Report
April 30, 2005
(BULL LOGO) Merrill Lynch Investment Managers
www.mlim.ml.com
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.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. Please see the Fund's prospectus for a description of risks
associated with global investments.
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 Web site at http://www.sec.gov. Information about how the
Fund voted proxies relating to securities held in the Fund's portfolio
during the most recent 12-month period ended June 30 is available (1) at
www.mutualfunds.ml.com; and (2) on the Securities and Exchange Commission's
Web site at http://www.sec.gov.
Merrill Lynch Global Allocation Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
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A Letter From the President
Dear Shareholder
Financial markets faced a number of crosscurrents over the past several
months, but most major benchmarks managed to post positive returns for the
annual and semi-annual reporting periods ended April 30, 2005:
Total Returns as of April 30, 2005 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) +3.28% + 6.34%
Small-cap U.S. equities (Russell 2000 Index) -0.15% + 4.71%
International equities (MSCI Europe Australasia Far East Index) +8.71% +14.95%
Fixed income (Lehman Brothers Aggregate Bond Index) +0.98% + 5.26%
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.93% + 6.81%
High yield bonds (Credit Suisse First Boston High Yield Index) +0.65% + 6.92%
After expanding at an annualized rate of 4.4% in 2004, U.S. gross domestic
product growth for the first quarter of 2005 came in at an estimated 3.1%
(although that figure was later revised upward to 3.5%). Nevertheless, the
Federal Reserve Board continued increasing interest rates at a measured
pace to combat emergent inflation. The most recent hike came on May 3, and
brought the federal funds rate to 3%. Recently, signs of inflation have
taken the form of rising business costs and increasing consumer prices,
particularly in the areas of gasoline, healthcare, housing and education.
U.S. equities ended 2004 in a strong rally, but stumbled into negative
territory in 2005. The market weakness was largely fueled by the potential
for slowing economic and corporate earnings growth, renewed energy price
concerns and a lack of investor conviction. On the positive side, certain
sectors of the market have been performing well (particularly energy) and
corporate transactions, such as mergers and acquisitions, stock buy-backs
and dividend payouts, have all increased. International equities,
especially in Asia, have benefited from higher economic growth rates.
In the bond market, we witnessed a yield curve flattening trend over the
past several months as short-term yields increased and longer-term
interest rates remained more stable or fell. At the end of April 2005, the
two-year Treasury note yielded 3.66% and the 10-year Treasury note yielded
4.21%, a difference of 55 basis points (.55%). This compared to a spread
of 149 basis points six months earlier and 222 basis points 12 months ago.
Looking ahead, the environment is likely to be a challenging one for
investors. With this in mind, we encourage you to meet with your financial
advisor to review your goals and asset allocation and to rebalance your
portfolio, as necessary, to ensure it remains aligned with your objectives
and risk tolerance. As always, 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,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Director
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
We are pleased to present to you the management team of
Merrill Lynch Global Allocation Fund, Inc.
Dennis Stattman, who joined Merrill Lynch Investment Managers in 1989,
is Senior Portfolio Manager of Merrill Lynch Global Allocation Fund.
Mr. Stattman received a bachelor's degree from the University of Virginia
and an MBA from the University of Chicago and is a CFA (R) charterholder.
Mr. Stattman's investment team includes Associate Portfolio Manager Dan Chamby
and Analysts Karen Morely Westcott, James Wei, Catharine Brady Rauscher and
Lisa O'Donnell. Mr. Chamby holds a bachelor's degree from Duquesne University
and an MBA from the Wharton School of the University of Pennsylvania and is a
CFA charterholder. Ms. Westcott received an MBA from Boston College and is a
CFA charterholder. Mr. Wei received a bachelor's degree from the California
Institute of Technology and a master's degree from the University of Chicago
and is a CFA charterholder. Ms. Rauscher earned a bachelor's degree from The
Pennsylvania State University and an MBA from St. Joseph's University and is
a CFA charterholder. Ms. O'Donnell received a bachelor's degree from The
College of William and Mary and a Juris Doctorate from Rutgers University
School of Law.
Dennis Stattman
Senior Portfolio Manager
Table of Contents Page
A Letter From the President 2
A Discussion With Your Fund's Portfolio Manager 4
Portfolio Information 6
Performance Data 8
Disclosure of Expenses 11
Schedule of Investments 12
Financial Information 32
Financial Highlights 35
Notes to Financial Statements 40
Officers and Directors 46
CFA (R) and Chartered Financial Analyst (R) are trademarks owned by the
Association for Investment Management and Research.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
A Discussion With Your Fund's Portfolio Manager
The Fund outperformed its Reference Portfolio and its comparable Lipper
category of Global Flexible Portfolio Funds for the period, benefiting from
an asset allocation that favored equities over fixed income investments.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended April 30, 2005, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C, Class I and Class R
Shares had total returns of +6.79%, +6.38%, +6.35%, +6.89% and +6.71%,
respectively. (Fund results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance information,
including average annual total returns, can be found on pages 8 - 10 of
this report to shareholders. A full description of the Reference Portfolio
can be found on page 9 of this report to shareholders.)
Fund results outpaced the +6.33% return of its broad-based, all-equity
benchmark, the unmanaged Financial Times Stock Exchange (FTSE) World Index,
and significantly exceeded the +4.05% return of its Reference Portfolio for
the six-month period. Because the Fund invests in a combination of equities
and bonds, the Reference Portfolio provides a truer representation of the
Fund's composition and, therefore, a more comparable means for measurement.
Returns for each component of the Reference Portfolio for the six months
ended April 30, 2005 were as follows: the Standard & Poor's 500 (S&P 500)
Index returned +3.28%; the FTSE World Index (ex-U.S.) returned +9.26%; the
Merrill Lynch Treasury Index GA05 returned -.81%; and the Citigroup (non-U.S.
dollar) World Government Bond Index returned +5.03%.
The Fund also outperformed its comparable Lipper category of Global
Flexible Portfolio Funds, which posted an average return of +5.11% for the
six months ended April 30, 2005. (Funds in this Lipper category allocate
their investments across various asset classes, including both domestic and
foreign stocks, bonds and money market instruments, and focus on total
return. At least 25% of portfolio assets are invested in securities traded
outside the United States, and may include shares of gold mines, gold-
oriented mining finance houses, gold coins or bullion.)
The Fund achieved these results in an environment that saw global equity
markets rise, aided by evidence of moderately improving economic and
earnings news in the United States. For the most part, the equity markets
achieved the gains during the first four months of the period, when the
conclusion of the U.S. presidential election in early November sparked a
strong rally. During this time, the U.S. dollar continued to show signs of
weakness and U.S. government bond yields increased before reversing
sharply. The Federal Reserve Board (the Fed) continued to increase short-
term interest rates at a measured pace, bringing the federal funds rate to
2.75% in March (and to 3% shortly after the close of the period). As short-
term interest rates rose and long-term bond yields declined, the yield
curve began to flatten in what Fed Chairman Alan Greenspan in February
described as a "conundrum." Inflation remained relatively subdued during
this time, and investors continued to wait for evidence of meaningful
employment growth.
In early March, equity markets hit their peak, and declined thereafter.
The reversal reflected investor reaction to many factors, including the
potential for slowing economic and corporate earnings growth, higher oil
prices, increased inflation expectations and the outlook for the Fed to
continue raising short-term interest rates.
Over the six months as a whole, global equities enjoyed positive returns.
U.S. dollar returns from international markets were often buoyed by the
additional impact of the weakening U.S. dollar. During this same period,
the U.S. bond market proved volatile, with the yield on the 10-year
Treasury note ranging between 3.99% and 4.64%, before closing at 4.21%
on April 30, 2005.
What factors contributed to the Fund's performance during the period?
The Fund's performance reflected an asset allocation strategy that included
a slight underweight position in equities at the beginning of the period,
and a significant underweight in fixed income, particularly high-quality,
long-term U.S. government bonds. During the six-month period, the Fund
benefited from the aforementioned appreciation in global equity markets,
notably in the United States and Asia. It also benefited from overweight
positions in both the energy and materials sectors as the price of oil
increased sharply and growth in Asia, particularly in China, fueled an
increase in demand for raw materials. In addition, effective stock
selection in the industrials and financials sectors contributed to
performance, as did the Fund's overweight position in international
equities compared to the Reference Portfolio.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Although it was significantly underweight in fixed income as a whole, the
Fund continued to benefit from the positioning of its fixed income component.
This included exposure to U.S. corporate bonds (both convertible and high
yield), emerging market debt and European Union sovereign debt - all of
which were favored over U.S. Treasury issues.
What changes were made to the portfolio during the period?
We continued to focus on attractively valued stocks, particularly in Asia
and the United States. Our strategy over the past six months included
increasing the quality of the equity portfolio and taking profits in those
stocks that outperformed, notably in the energy and materials sectors.
We began the period with an equity weighting below that of our Reference
Portfolio at 54% of net assets versus the benchmark's 60% weighting. As of
April 30, 2005, the Fund's equity allocation stood at 56% of net assets,
reflecting an increase primarily in our Asian equity exposure but also in
our European exposure, and a slight reduction in our allocation to U.S.
equity holdings.
The Fund was significantly underweight in fixed income securities for the
duration of the six-month period, with approximately 21% of net assets
invested in bonds worldwide compared to the Reference Portfolio's fixed
income allocation of 40%. While exposure to U.S. dollar-denominated
corporate bonds decreased due to profit-taking as markets appreciated, we
also reduced our weighting in European sovereign bonds. This was offset by
an increase in the allocation to Asian currency-denominated bonds. (Please
note that the Fund's U.S. fixed income exposure includes bonds of non-U.S.
issuers denominated in U.S. dollars.) Approximately 3.7% of the Fund's net
assets was invested in convertible securities as of April 30, 2005,
compared to 3.2% at October 31, 2004. These securities are reported as a
portion of the Fund's fixed income securities, although some of these
securities may tend to perform similarly to equities.
Reflecting the changes outlined above, primarily the increase in equity
exposure, the Fund's cash holdings decreased slightly from 25% of net
assets to 23% over the past six months. Cash is actively managed and, as
such, allocations to cash are an integral part of the Fund's investment
strategy. Currently, most of the Fund's cash is considered zero-duration
fixed income, and includes short-term U.S. dollar and non-U.S. dollar fixed
income securities and other money market-type instruments.
How would you characterize the Fund's position at the close of the period?
Compared to its Reference Portfolio, the Fund ended the period slightly
underweight in equities, significantly underweight in fixed income
securities and overweight in cash equivalents.
Within the equity segment, the Fund ended the period underweight in U.S.
and European stocks and overweight in Asian stocks. In terms of sector
allocations, the Fund was overweight in the energy, materials and
telecommunications industries and underweight in consumer discretionary,
financials, health care, industrials, technology, consumer staples and
utilities. The investment team continues to look for undervalued companies
that are expected to generate above-average rates of return.
At April 30, 2005, the Fund had little exposure to long-term, high-grade
fixed income securities in the United States, as we find the current yield
on these instruments to be unattractive relative to the associated risk of
higher interest rates. As for currency exposure, we ended the period with
an underweight in the euro and the U.S. dollar. We have small overweight
positions in several Asian currencies.
Although the portfolio's equity allocation was modestly underweight
relative to our Reference Portfolio at period-end, it was still higher than
during most of the Fund's history. Thus, as mentioned in previous reports
to shareholders, we expect the Fund may exhibit a somewhat higher beta
versus the S&P 500 Index and higher volatility in net asset value than
historically has been the case. Nevertheless, given the Fund's current
positioning, we believe that both of these measures should remain below
those typical of most all-equity funds in most market conditions.
Dennis Stattman
Vice President and Senior Portfolio Manager
May 15, 2005
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Portfolio Information
Worldwide Investments as of April 30, 2005
Breakdown of Stocks &
Fixed Income Securities Percent of
By Country Net Assets++
United States 30.7%
Japan 8.8
Germany 5.1
United Kingdom 3.6
India 2.5
South Korea 2.4
France 2.0
Europe 1.9
Australia 1.6
Netherlands 1.4
Canada 1.4
Singapore 1.2
Malaysia 1.0
Italy 0.9
Thailand 0.9
Brazil 0.7
Sweden 0.7
Hong Kong 0.6
Mexico 0.6
Switzerland 0.6
Chile 0.6
Taiwan 0.5
Cayman Islands 0.3
Norway 0.3
Indonesia 0.3
New Zealand 0.3
Spain 0.3
Poland 0.3
Belgium 0.2
Israel 0.2
Iceland 0.2
China 0.2
Ireland 0.1
Portugal 0.1
Denmark 0.1
Luxembourg 0.1
Finland 0.1
South Africa 0.0*
Vietnam 0.0*
Russia 0.0*
++ Total may not equal 100%.
* Holdings are less than 0.1%.
Five Largest Industries* Percent of
(Equity Investments) Net Assets
Insurance 5.7%
Oil & Gas 5.7
Pharmaceuticals 3.9
Commercial Banks 3.2
Metals & Mining 3.1
* 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.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
General Electric Company 1.0%
Millea Holdings, Inc. 0.9
Foster Wheeler Ltd. 0.9
Reliance Industries Ltd. 0.8
Nipponkoa Insurance Co., Ltd. 0.8
Mitsui Sumitomo Insurance Co., Ltd. 0.8
Microsoft Corporation 0.8
Pfizer, Inc. 0.8
American International Group, Inc. 0.7
Citigroup, Inc. 0.6
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Portfolio Information (concluded)
Overall Asset Exposure as of April 30, 2005
Percent of Fund's Net Assets Reference Portfolio+++
4/30/05 10/31/04 Percentages
U.S. Equities 26.3*% 27.1*% 36.0%
European Equities 9.4* 8.8* 14.2
Pacific Basin Equities 18.4 15.8* 7.8
Other Equities 2.0 2.1 2.0
Total Equities 56.1* 53.8* 60.0
U.S. Dollar Denominated Fixed Income Securities 8.2 8.4 24.0
U.S. Issuers 5.8 6.2 --
Non-U.S. Issuers 2.4 2.2 --
Non-U.S. Dollar Denominated Fixed Income Securities 12.4 12.4 16.0
Total Fixed Income Securities 20.6++ 20.8++ 40.0
Cash & Cash Equivalents** 23.3 25.4 --
* Includes value of financial futures contracts.
** Cash & Cash Equivalents are reduced by the market (or nominal) value of long financial futures contracts.
++ Includes Preferred Stock.
+++ The Reference Portfolio is an unmanaged weighted index comprised as follows: 36% of the S&P 500 Index;
24% FTSE World Index (Ex-U.S.) Equities; 24% Merrill Lynch Treasury Index GA05; and 16% Citigroup
World Government Bond Index (Ex-U.S.). Descriptions of these Indexes can be found on page 9 of this
report to shareholders in the "Recent Performance Results" section.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Performance Data
About Fund Performance
Investors are able to purchase shares of the Fund through multiple pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end load) of
5.25% and an account maintenance fee of 0.25% per year (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% per year and an account
maintenance fee of 0.25% per year. These shares automatically convert to
Class A Shares after approximately eight years. (There is no initial sales
charge for automatic share conversions.) All returns for periods greater
than eight years reflect this conversion.
* Class C Shares are subject to a distribution fee of 0.75% per year and an
account maintenance fee of 0.25% per year. 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% per year 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 a
deferred sales charge. These shares are subject to a distribution fee of
0.25% per year and an account maintenance fee of 0.25% per year. Class R
Shares are available only to certain retirement plans. Prior to inception,
Class R Share performance results are those of Class I Shares (which have
no distribution or account maintenance fees) restated for Class R Share
fees.
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 performance
data current to the most recent month-end. Performance results do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The Fund may charge a 2%
redemption fee for sales or exchanges of shares within 30 days of purchase.
Performance data does not reflect this potential fee. 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. The Fund's Investment Adviser voluntarily waived a
portion of its management fee. Without such a waiver, the Fund's
performance would have been lower.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Performance Data (continued)
Recent Performance Results
6-Month 12-Month 10-Year
As of April 30, 2005 Total Return Total Return Total Return
ML Global Allocation Fund, Inc.--Class A Shares* +6.79% +12.25% +199.37%
ML Global Allocation Fund, Inc.--Class B Shares* +6.38 +11.41 +181.51
ML Global Allocation Fund, Inc.--Class C Shares* +6.35 +11.40 +177.03
ML Global Allocation Fund, Inc.--Class I Shares* +6.89 +12.48 +207.10
ML Global Allocation Fund, Inc.--Class R Shares* +6.71 +12.04 +193.59
FTSE World Index** +6.33 +11.53 +104.52
Reference Portfolio*** +4.05 + 9.23 +112.22
U.S. Stocks: S&P 500 (R) Index**** +3.28 + 6.34 +165.62
Non-U.S. Stocks: FTSE World Index (Ex-U.S.) Equities***** +9.26 +17.00 + 70.39
U.S. Bonds: ML Treasury Index GA05++ -0.81 + 2.77 + 84.48
Non-U.S. Bonds: Citigroup World Government
Bond Index (Ex-U.S.)++++ +5.03 +13.69 + 70.54
* Investment results shown do not reflect sales charges; results shown would be lower if a sales
charge was included. Cumulative 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.
** This unmanaged broad-based capitalization-weighted Index is comprised of 2,200 equities from 24
countries in 12 regions, including the United States.
*** The Reference Portfolio is an unmanaged weighted Index comprised as follows: 36% of the S&P 500 Index;
24% of the FTSE World Index (Ex-U.S.) Equities; 24% of the Merrill Lynch Treasury Index GAO5; and 16%
of the Citigroup World Government Bond Index (Ex-U.S.).
**** This unmanaged Index covers 500 industrial, utility, transportation and financial companies of the
U.S. markets (mostly NYSE issues) representing about 75% of NYSE market capitalization and 30% of
NYSE issues.
***** This unmanaged capitalization-weighted Index is comprised of 1,631 companies in 28 countries,
excluding the United States.
++ This unmanaged Index is designed to track the total return of the current coupon five-year U.S.
Treasury bond.
++++ This unmanaged market capitalization-weighted Index tracks ten government bond indexes, excluding
the United States.
S&P 500 is a registered trademark of the McGraw-Hill Companies.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Performance Data (concluded)
Average Annual Total Return
Return Without Return With
Sales Charge Sales Charge**
Class A Shares*
One Year Ended 4/30/05 +12.25% + 6.36%
Five Years Ended 4/30/05 + 9.50 + 8.32
Ten Years Ended 4/30/05 +11.59 +10.99
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
Return Return
Without CDSC With CDSC**
Class B Shares*
One Year Ended 4/30/05 +11.41% + 7.41%
Five Years Ended 4/30/05 + 8.66 + 8.37
Ten Years Ended 4/30/05 +10.90 +10.90
* 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 4/30/05 +11.40% +10.40%
Five Years Ended 4/30/05 + 8.66 + 8.66
Ten Years Ended 4/30/05 +10.73 +10.73
* 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 4/30/05 +12.48% + 6.58%
Five Years Ended 4/30/05 + 9.77 + 8.59
Ten Years Ended 4/30/05 +11.87 +11.27
*Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
Class R Shares Return
One Year Ended 4/30/05 +12.04%
Five Years Ended 4/30/05 + 9.33
Ten Years Ended 4/30/05 +11.37
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and
exchange fees; and (b) operating expenses including advisory fees,
distribution fees including 12(b)-1 fees, and other Fund expenses. The
following example (which is based on a hypothetical investment of $1,000
invested on November 1, 2004 and held through April 30, 2005) is intended
to assist shareholders both in calculating expenses based on an investment
in the Fund and in comparing these expenses with similar costs of investing
in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid
during the period covered by this report, shareholders can divide their
account value by $1,000 and then multiply the result by the number in the
first line under the heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio
and an assumed rate of return of 5% per year before expenses. In order to
assist shareholders in comparing the ongoing expenses of investing in this
Fund and other funds, compare the 5% hypothetical example with the 5%
hypothetical examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the second
table is useful in comparing ongoing expenses only, and will not help
shareholders determine the relative total expenses of owning different
funds. If these transactional expenses were included, shareholder expenses
would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value November 1, 2004
November 1, April 30, to April 30,
2004 2005 2005
Actual
Class A $1,000 $1,067.90 $5.62
Class B $1,000 $1,063.80 $9.57
Class C $1,000 $1,063.50 $9.57
Class I $1,000 $1,068.90 $4.33
Class R $1,000 $1,067.10 $6.91
Hypothetical (5% annual return before expenses)**
Class A $1,000 $1,019.50 $5.49
Class B $1,000 $1,015.66 $9.35
Class C $1,000 $1,015.66 $9.35
Class I $1,000 $1,020.74 $4.23
Class R $1,000 $1,018.25 $6.74
* For each class of the Fund, expenses paid are equal to the annualized expense ratio for the class
(1.09% for Class A, 1.86% for Class B, 1.86% for Class C, .84% for Class I and 1.34% for Class R),
multiplied by the average account value over the period, multiplied by 182/365 (to reflect the
one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in the
most recent fiscal half year divided by 365.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
Australia--1.0% Food Products--0.0% 7,500,000 Burns Philp & Co., Ltd. (b) $ 5,586,519
Metals & Mining--0.9% 3,250,000 BHP Billiton Ltd. (c) 41,111,457
1,000,000 Rio Tinto Ltd. 32,526,130
3,500,000 WMC Resources Ltd. 21,784,344
---------------
95,421,931
Oil & Gas--0.1% 400,000 Woodside Petroleum Ltd. (c) 7,384,713
Total Common Stocks in Australia 108,393,163
Belgium--0.2% Diversified 331,868 Belgacom SA (b) 12,749,635
Telecommunication
Services--0.1%
Leisure Equipment & 120,810 AGFA-Gevaert NV 3,956,822
Products--0.1%
Total Common Stocks in Belgium 16,706,457
Brazil--0.5% Metals & Mining--0.2% 118,200 Cia Vale do Rio Doce (e) 3,185,490
582,000 Cia Vale do Rio Doce (Sponsored) (e) 13,502,400
---------------
16,687,890
Oil & Gas--0.3% 750,000 Petroleo Brasileiro SA (c)(e) 31,447,500
Total Common Stocks in Brazil 48,135,390
Canada--0.9% Chemicals--0.0% 290,000 Agrium Inc. 5,162,000
Communications 8,688,000 Nortel Networks Corp. (b) 21,633,120
Equipment--0.2%
Media--0.2% 701,400 Rogers Communications, Inc. Class B 20,172,264
Metals & Mining--0.2% 1,300,000 Placer Dome, Inc. 17,368,000
Multiline Retail--0.1% 1,365,500 Hudson's Bay Co. 14,961,253
Oil & Gas--0.1% 139,300 Petro-Canada 7,754,491
18,000 Suncor Energy, Inc. 666,385
75,000 Talisman Energy, Inc. 2,269,214
---------------
10,690,090
Road & Rail--0.1% 210,000 CP Railway Limited (USD) 7,333,200
90,000 Canadian Pacific Railway Ltd. 3,151,918
---------------
10,485,118
Total Common Stocks in Canada 100,471,845
China--0.1% Automobiles--0.0% 8,000,000 Denway Motors Ltd. 2,801,806
Industrial 4,046,000 Shanghai Electric Group Corp. (b) 871,916
Conglomerates--0.0%
Insurance--0.1% 115,400 China Life Insurance Co. Ltd. (b)(c)(e) 3,051,176
1,325,500 Ping An Insurance Group Co. of China Ltd. 2,028,971
---------------
5,080,147
Transportation 3,000,000 Hainan Meilan International Airport Co., Ltd. 1,728,337
Infrastructure--0.0%
Total Common Stocks in China 10,482,206
Denmark--0.1% Commercial Banks--0.1% 333,120 Danske Bank A/S 9,788,962
Total Common Stocks in Denmark 9,788,962
Finland--0.1% Communications 397,500 Nokia Oyj (e) 6,352,050
Equipment--0.1%
Total Common Stocks in Finland 6,352,050
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
France--1.1% Automobiles--0.2% 286,580 Peugeot SA $ 17,040,873
Commercial Banks--0.2% 286,406 BNP Paribas 18,960,780
Communications 244,500 Alcatel SA (b)(e) 2,630,820
Equipment--0.0%
Construction & 83,540 Vinci SA 12,595,782
Engineering--0.1%
Food & Staples 227,087 Carrefour SA 11,064,560
Retailing--0.1%
Hotels, Restaurants & 68,492 Accor SA 3,144,456
Leisure--0.0%
Metals & Mining--0.1% 576,764 Arcelor 11,731,088
Oil & Gas--0.3% 137,353 Total SA 30,641,773
Pharmaceuticals--0.1% 101,724 Sanofi-Aventis 9,037,036
Total Common Stocks in France 116,847,168
Germany--0.9% Air Freight & 642,649 Deutsche Post AG (c) 15,125,314
Logistics--0.2%
Auto Components--0.1% 176,201 Continental AG 13,030,220
Construction & 343,081 Hochtief AG 10,226,329
Engineering--0.1%
Diversified Financial 167,226 Deutsche Boerse AG 12,678,250
Services--0.1%
Diversified 470,452 Deutsche Telekom AG 8,918,786
Telecommunication
Services--0.1%
Electric Utilities--0.1% 135,598 E. On AG 11,529,670
Multi-Utilities & 366,908 RWE AG 21,978,562
Unregulated Power--0.2%
Total Common Stocks in Germany 93,487,131
Hong Kong--0.6% Commercial Banks--0.2% 1,133,659 HSBC Holdings Plc Hong Kong Registered 18,181,354
Industrial 2,999,950 Hutchison Whampoa Ltd. 26,789,057
Conglomerates--0.2%
Real Estate--0.2% 1,000,000 Cheung Kong Holdings Ltd. 9,452,323
3,000,000 Wharf Holdings Ltd. 10,018,595
---------------
19,470,918
Total Common Stocks in Hong Kong 64,441,329
India--2.2% Automobiles--0.1% 540,000 Bajaj Auto Ltd. 13,521,709
300,000 Tata Motors Ltd. 2,830,645
---------------
16,352,354
Commercial Banks--0.1% 500,000 Oriental Bank of Commerce 3,142,660
568,500 State Bank of India Ltd. 7,624,726
---------------
10,767,386
Construction & 300,000 Larsen & Toubro Ltd. 6,641,971
Engineering--0.1%
Construction 1,399,331 Gujarat Ambuja Cements Ltd. 13,544,868
Materials--0.1%
Diversified 3,500,000 Mahanagar Telephone Nigam Ltd. 9,330,887
Telecommunication
Services--0.1%
Household Products--0.1% 4,750,000 Hindustan Lever Ltd. 15,025,844
IT Services--0.4% 897,600 Infosys Technologies Ltd. 38,905,735
Oil & Gas--0.9% 150,000 Hindustan Petroleum Corp. 1,039,762
7,500,000 Reliance Industries Ltd. 90,763,300
---------------
91,803,062
Pharmaceuticals--0.0% 100,000 Wockhardt Ltd. 800,382
Road & Rail--0.1% 412,000 Container Corp. of India 8,269,781
Thrifts & Mortgage 1,400,000 Housing Development Finance Corp. Ltd. 23,505,399
Finance--0.2%
Total Common Stocks in India 234,947,669
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
Indonesia--0.3% Commercial Banks--0.0% 11,000,000 Bank Danamon Indonesia Tbk PT $ 5,361,732
Tobacco--0.3% 26,299,500 HM Sampoerna Tbk PT 28,717,854
Total Common Stocks in Indonesia 34,079,586
Ireland--0.1% Commercial Banks--0.1% 878,103 Bank of Ireland 13,356,440
Total Common Stocks in Ireland 13,356,440
Israel--0.2% Communications 3,036,217 ECI Telecom Ltd. (b)(e) 21,162,432
Equipment--0.2% 159,588 Ectel Ltd. (b)(e) 555,366
---------------
21,717,798
Pharmaceuticals--0.0% 150,000 Teva Pharmaceutical Industries Ltd. (e) 4,686,000
Total Common Stocks in Israel 26,403,798
Italy--0.7% Commercial Banks--0.3% 1,708,178 Banca Intesa SpA 8,181,906
2,505,619 Capitalia SpA 13,472,991
1,433,107 UniCredito Italiano SpA 8,048,956
---------------
29,703,853
Diversified 2,175,393 Telecom Italia SpA 7,394,981
Telecommunication
Services--0.1%
Insurance--0.1% 344,682 Fondiaria-Sai SpA 8,883,154
Oil & Gas--0.2% 923,122 ENI SpA 23,287,290
Total Common Stocks in Italy 69,269,278
Japan--8.2% Auto Components--0.1% 400,000 Toyota Industries Corp. 11,092,987
Automobiles--0.7% 2,100,000 Fuji Heavy Industries Ltd. 9,608,144
179,100 Honda Motor Co., Ltd. 8,613,981
3,082,000 Suzuki Motor Corp. 52,459,413
23,500 Toyota Motor Corp. 852,181
---------------
71,533,719
Beverages--0.6% 1,500 Coca-Cola Central Japan Co., Ltd. 12,816,727
815,500 Coca-Cola West Japan Co., Ltd. 18,727,825
692,000 Hokkaido Coca-Cola Bottling Co., Ltd. 5,045,660
1,007,000 Kinki Coca-Cola Bottling Co., Ltd. 11,018,961
1,477,500 Mikuni Coca-Cola Bottling Co., Ltd. 15,524,226
---------------
63,133,399
Capital Markets--0.1% 750,000 Nomura Holdings, Inc. 9,535,665
Chemicals--0.2% 1,500,000 Asahi Kasei Corp. 7,215,611
500,000 Shin-Etsu Chemical Co., Ltd. 18,422,269
---------------
25,637,880
Commercial Banks--0.1% 1,500,000 The Bank of Yokohama Ltd. (b) 8,572,176
24 Mitsubishi Tokyo Financial Group, Inc. 207,307
699,600 Shinsei Bank Ltd. 3,790,528
27 Sumitomo Mitsui Financial Group, Inc. 174,165
---------------
12,744,176
Construction & 1,900,000 JGC Corp. 19,391,565
Engineering--0.3% 1,440,000 Kinden Corp. 11,985,357
---------------
31,376,922
Consumer Finance--0.2% 550,000 Credit Saison Co., Ltd. 18,735,586
Diversified Financial 921,119 RHJ International (b) 23,544,649
Services--0.2%
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
Japan Electronic Equipment 2,000,000 Hitachi Ltd. $ 11,728,959
(concluded) & Instruments--0.2% 200,000 Murata Manufacturing Co., Ltd. 9,907,554
---------------
21,636,513
Food & Staples 600,000 Ito-Yokado Co., Ltd. 20,653,919
Retailing--0.2% 200,000 Ministop Co., Ltd. 3,709,058
---------------
24,362,977
Food Products--0.3% 1,850,000 Ajinomoto Co., Inc. 22,191,844
250,000 House Foods Corp. 3,576,867
---------------
25,768,711
Gas Utilities--0.2% 5,000,000 Tokyo Gas Co., Ltd. 20,062,431
Household Durables--0.0% 175,000 Rinnai Corp. 4,483,816
Household Products--0.1% 419,700 Rohto Pharmaceutical Co., Ltd. 5,304,986
Insurance--3.0% 8,998,600 Aioi Insurance Co., Ltd. 46,365,817
7,052 Millea Holdings, Inc. 96,050,465
9,500,350 Mitsui Sumitomo Insurance Co., Ltd. 86,231,020
12,926,000 Nipponkoa Insurance Co., Ltd. 86,579,893
388,000 Nissay Dowa General Insurance Co., Ltd. 1,905,702
---------------
317,132,897
Machinery--0.2% 200,000 Fanuc Ltd. 11,762,899
2,500,000 Kubota Corp. 12,882,973
---------------
24,645,872
Office Electronics--0.4% 600,000 Brother Industries Ltd. 5,580,549
738,000 Canon, Inc. 38,362,127
---------------
43,942,676
Pharmaceuticals--0.8% 2,000,000 Shionogi & Co., Ltd. 27,777,462
750,000 Takeda Pharmaceutical Co., Ltd. 36,476,111
1,500,000 Tanabe Seiyaku Co., Ltd. 15,770,490
---------------
80,024,063
Real Estate--0.1% 4,122 Marco Polo Investment Holdings Ltd. (b) 8,242,458
Road & Rail--0.1% 1,675 East Japan Railway Co. 8,710,407
Trading Companies & 250,000 Mitsubishi Corp. 3,423,478
Distributors--0.0% 29,000 Mitsui & Co., Ltd. 275,054
---------------
3,698,532
Wireless Telecommunication 7,470 NTT DoCoMo, Inc. 11,559,766
Services--0.1%
Total Common Stocks in Japan 866,911,088
Malaysia--0.5% Diversified 2,500,000 Telekom Malaysia Bhd 6,352,862
Telecommunication
Services--0.1%
Electric Utilities--0.1% 1,000,000 Malakoff Bhd 1,932,087
3,000,000 Tenaga Nasional Bhd 8,368,421
---------------
10,300,508
Food Products--0.1% 5,500,000 IOI Corp. Bhd 13,263,760
Tobacco--0.1% 800,000 British American Tobacco Malaysia Bhd 9,057,641
Wireless Telecommunication 4,500,000 Maxis Communications Bhd 11,430,725
Services--0.1%
Total Common Stocks in Malaysia 50,405,496
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
Mexico--0.3% Beverages--0.1% 200,000 Fomento Economico Mexicano SA de CV (e) $ 10,210,000
Food Products--0.0% 700,000 Grupo Industrial Maseca SA de CV (e) 5,873,000
Media--0.2% 350,000 Grupo Televisa SA (e) 19,663,000
Total Common Stocks in Mexico 35,746,000
Netherlands--0.6% Commercial Services 1,004,382 Buhrmann NV 8,961,242
& Supplies--0.1%
Diversified Financial 575,468 ING Groep NV CVA 15,907,527
Services--0.1%
Food & Staples 682,333 Koninklijke Ahold NV (b) 5,179,948
Retailing--0.1% 473,202 Koninklijke Ahold NV (e)(g) 3,412,023
---------------
8,591,971
Food Products--0.0% 375,000 Koninklijke Wessanen NV CVA 5,175,118
Household Durables--0.1% 378,040 Koninklijke Philips Electronics NV (b) 9,407,952
Insurance--0.1% 723,374 Aegon NV 9,097,915
Oil & Gas--0.1% 200,000 Royal Dutch Petroleum Co. (e) 11,751,320
Total Common Stocks in the Netherlands 68,893,045
New Zealand--0.1% Diversified 2,000,000 Telecom Corp. of New Zealand Ltd. 8,906,583
Telecommunication
Services--0.1%
Total Common Stocks in New Zealand 8,906,583
Norway--0.3% Commercial Banks--0.1% 1,045,381 DNB NOR ASA 9,995,327
Diversified 1,675,757 Telenor ASA 14,028,764
Telecommunication
Services--0.1%
Oil & Gas--0.1% 772,816 Statoil ASA 13,605,328
Total Common Stocks in Norway 37,629,419
Portugal--0.1% Electric Utilities--0.1% 4,737,261 Energias de Portugal SA 12,868,231
Total Common Stocks in Portugal 12,868,231
Singapore--1.2% Commercial Banks--0.1% 800,000 Oversea-Chinese Banking Corp. 6,570,326
Diversified 12,000,000 Singapore Telecommunications Ltd. 19,153,047
Telecommunication
Services--0.2%
Health Care Providers 8,100,000 Parkway Holdings Ltd. 8,237,823
& Services--0.1%
Industrial 1,500,000 Fraser and Neave Ltd. 14,257,246
Conglomerates--0.4% 5,000,000 Keppel Corp. Ltd. 32,833,502
---------------
47,090,748
Real Estate--0.2% 6,000,000 CapitaLand Ltd. 9,368,075
7,150,000 Keppel Land Ltd. 11,011,687
---------------
20,379,762
Transportation 7,552,800 SembCorp Logistics Ltd. 7,578,215
Infrastructure--0.1%
Wireless 12,000,000 MobileOne Ltd. 15,042,941
Telecommunication
Services--0.1%
Total Common Stocks in Singapore 124,052,862
South Paper & Forest 525,000 Sappi Ltd. (e) 5,239,500
Africa--0.0% Products--0.0%
Total Common Stocks in South Africa 5,239,500
South Korea--2.3% Chemicals--0.2% 1,008,700 Samsung Fine Chemicals Co., Ltd. 18,139,089
Commercial Banks--0.1% 800,000 Pusan Bank 6,200,678
Diversified 2,200,000 KT Corp. (e) 44,418,000
Telecommunication
Services--0.4%
Electric Utilities--0.2% 700,000 Korea Electric Power Corp. 20,393,873
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
South Korea Electrical Equipment--0.3% 248,000 CJ Corp. $ 17,796,675
(concluded) 550,000 LS Cable Ltd. 12,083,235
---------------
29,879,910
Food Products--0.0% 17,500 Nong Shim Co., Ltd. 5,391,431
Metals & Mining--0.6% 210,330 POSCO 38,313,089
500,000 POSCO (e) 22,765,000
---------------
61,078,089
Textiles, Apparel & Luxury 250,000 Cheil Industries, Inc. 4,276,367
Goods--0.0%
Tobacco--0.4% 1,250,000 KT&G Corp. 45,220,839
Wireless Telecommunication 371,650 SK Telecom Co., Ltd. (e) 7,232,309
Services--0.1% 19,640 SK Telecom Co., Ltd. 3,252,233
---------------
10,484,542
Total Common Stocks in South Korea 245,482,818
Spain--0.3% Commercial Banks--0.1% 690,084 Banco Santander Central Hispano SA 8,063,680
Diversified 179,614 Telefonica SA (e) 9,160,314
Telecommunication
Services--0.1%
Tobacco--0.1% 264,379 Altadis SA 11,238,537
Total Common Stocks in Spain 28,462,531
Sweden--0.3% Diversified Financial 698,497 Investor AB 9,178,515
Services--0.1%
Insurance--0.1% 1,551,764 Skandia Forsakrings AB 7,367,655
Machinery--0.1% 346,867 Volvo AB Class B 14,077,800
Total Common Stocks in Sweden 30,623,970
Switzerland--0.6% Capital Markets--0.2% 512,791 Credit Suisse Group 21,665,937
Chemicals--0.1% 585,062 Clariant AG 9,221,019
Construction 231,584 Holcim Ltd. 14,121,466
Materials--0.1%
Electrical 1,390,071 ABB Ltd. (b) 8,728,242
Equipment--0.1%
Insurance--0.1% 71,150 Swiss Life Holding (b) 9,852,000
Total Common Stocks in Switzerland 63,588,664
Taiwan--0.5% Building Products--0.0% 2,000,000 Taiwan Glass Industrial Corp. 1,796,899
Commercial Banks--0.1% 11,505,560 SinoPac Financial Holdings Co., Ltd. 6,230,789
7,969,180 Taishin Financial Holdings Co., Ltd. 7,154,471
---------------
13,385,260
Diversified 1,250,000 Chunghwa Telecom Co. Ltd. (c)(e) 25,337,500
Telecommunication
Services--0.2%
Electronic Equipment 5,300,000 Delta Electronics, Inc. 8,479,956
& Instruments--0.1%
Machinery--0.1% 6,000,000 Yungtay Engineering Co., Ltd. 3,302,773
Total Common Stocks in Taiwan 52,302,388
Thailand--0.9% Commercial Banks--0.2% 19,000,000 Siam Commercial Bank PCL Foreign Shares 22,728,052
Construction Materials--0.2% 2,500,000 Siam Cement PCL Foreign Shares 15,061,204
641,700 Siam City Cement PCL Foreign Shares 4,520,846
---------------
19,582,050
Electronic Equipment 10,000,000 Hana Microelectronics PCL 4,941,713
& Instruments--0.1%
Food Products--0.0% 3,300,000 Thai Union Frozen Products PCL Foreign Shares 2,326,214
Household Durables--0.1% 38,000,000 Land and Houses PCL Foreign Shares 7,053,689
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
Thailand Oil & Gas--0.3% 1,500,000 PTT Exploration & Production PCL $ 13,228,586
(concluded) 4,500,000 PTT PCL 22,807,907
---------------
36,036,493
Real Estate--0.0% 9,000,000 Sansiri PCL Foreign Shares 652,306
Transportation 4,000,000 Bangkok Expressway PCL Foreign Shares 2,610,238
Infrastructure--0.0%
Total Common Stocks in Thailand 95,930,755
United Aerospace & Defense--0.1% 2,987,285 BAE Systems Plc 14,651,092
Kingdom--2.7%
Commercial Banks--0.8% 2,703,758 Barclays Plc 27,922,747
1,052,718 HBOS Plc 15,629,054
495,646 HSBC Holdings Plc 7,935,031
1,058,607 Royal Bank of Scotland Group Plc 32,001,259
---------------
83,488,091
Food & Staples 938,094 Boots Group Plc 10,794,410
Retailing--0.1%
Food Products--0.1% 1,393,552 Cadbury Schweppes Plc 14,031,619
Industrial 778,794 Smiths Group Plc 12,804,709
Conglomerates--0.1%
Insurance--0.1% 1,568,580 Prudential Plc 14,155,868
Oil & Gas--0.3% 2,676,988 BP Plc 27,318,737
Pharmaceuticals--0.3% 1,040,972 GlaxoSmithKline Plc 26,327,175
Specialty Retail--0.1% 1,663,472 Kesa Electricals Plc 8,446,260
Tobacco--0.1% 734,922 Gallaher Group Plc 11,474,457
Transportation 1,086,870 BAA Plc 12,071,513
Infrastructure--0.1%
Wireless 14,130,197 Vodafone Group Plc 36,982,914
Telecommunication 700,000 Vodafone Group Plc (e) 18,298,000
Services--0.5% ---------------
55,280,914
Total Common Stocks in the United Kingdom 290,844,845
United Aerospace & Defense--0.1% 47,000 General Dynamics Corp. 4,937,350
States--26.1% 125,000 Raytheon Co. 4,701,250
---------------
9,638,600
Air Freight & 70,000 FedEx Corp. 5,946,500
Logistics--0.1%
Auto Components--0.1% 225,000 Lear Corp. 7,625,250
Beverages--0.3% 281,000 Anheuser-Busch Cos., Inc. 13,170,470
400,000 The Coca-Cola Co. 17,376,000
80,000 Molson Coors Brewing Co. Class B 4,940,000
---------------
35,486,470
Biotechnology--0.0% 56,200 Amgen, Inc. (b) 3,271,402
50,000 Celgene Corp. (b) 1,895,500
---------------
5,166,902
Capital Markets--0.4% 417,600 The Bank of New York Co., Inc. 11,667,744
200,000 The Charles Schwab Corp. 2,070,000
25,000 Goldman Sachs Group, Inc. 2,669,750
699,500 Knight Trading Group, Inc. Class A (b) 5,896,785
25,000 Lehman Brothers Holdings, Inc. 2,293,000
175,000 Mellon Financial Corp. 4,845,750
250,000 Morgan Stanley 13,155,000
---------------
42,598,029
Chemicals--0.3% 300,000 E.I. du Pont de Nemours & Co. 14,133,000
500,000 Hercules, Inc. (b) 6,615,000
289,940 Lyondell Chemical Co. 7,274,595
---------------
28,022,595
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
United States Commercial Banks--0.6% 249,900 Bank of America Corp. $ 11,255,496
(continued) 400,000 Fifth Third Bancorp 17,400,000
213,090 Santander BanCorp 4,722,074
219,300 Wachovia Corp. 11,223,774
350,000 Wells Fargo & Co. 20,979,000
---------------
65,580,344
Commercial Services 8,200 ChoicePoint, Inc. (b) 323,654
& Supplies--0.2% 1,500,000 Corinthian Colleges, Inc. (b) 21,315,000
---------------
21,638,654
Communications 2,439,300 3Com Corp. (b) 7,683,795
Equipment--0.6% 1,375,000 ADC Telecommunications, Inc. (b) 3,121,250
1,713,300 Cisco Systems, Inc. (b) 29,605,824
150,000 Comverse Technology, Inc. (b) 3,418,500
1,200,000 JDS Uniphase Corp. (b) 1,776,000
1,621,200 Lucent Technologies, Inc. (b) 3,939,516
230,000 Motorola, Inc. 3,528,200
1,000,000 Tellabs, Inc. (b) 7,760,000
---------------
60,833,085
Computers & 725,000 EMC Corp. (b) 9,512,000
Peripherals--0.7% 1,100,000 Hewlett-Packard Co. 22,517,000
216,700 International Business Machines Corp. 16,551,546
1,500,000 Maxtor Corp. (b) 7,275,000
134,000 NCR Corp. (b) 4,422,000
3,000,000 Sun Microsystems, Inc. (b) 10,890,000
---------------
71,167,546
Construction & 100,000 Chicago Bridge & Iron Co. NV 2,238,000
Engineering--1.7% 6,267,500 Foster Wheeler Ltd. (b)(o) 92,132,250
2,981,700 McDermott International, Inc. (b) 60,558,327
3,386,300 Quanta Services, Inc. (b) 27,022,674
---------------
181,951,251
Consumer Finance--0.0% 150,000 MBNA Corp. 2,962,500
Containers & 600,000 Crown Holdings, Inc. (b) 9,030,000
Packaging--0.1% 500,000 Smurfit-Stone Container Corp. (b) 6,555,000
---------------
15,585,000
Diversified Financial 450,000 CIT Group, Inc. 18,126,000
Services--1.0% 1,450,500 Citigroup, Inc. (h) 68,115,480
200,000 JPMorgan Chase & Co. 7,098,000
243,594 Leucadia National Corp. (c) 8,472,199
---------------
101,811,679
Diversified 25,879 AboveNet, Inc. (b) 776,370
Telecommunication 374,900 Alltel Corp. 21,354,304
Services--0.9% 320,000 BellSouth Corp. 8,476,800
50,000 CenturyTel, Inc. 1,534,500
800,000 Cincinnati Bell, Inc. (b) 3,200,000
775,000 General Communication Class A (b) 6,541,000
145,100 Metromedia International Group, Inc. (b)(c) 179,924
850,000 SBC Communications, Inc. 20,230,000
750,000 Sprint Corp. (c) 16,695,000
450,000 Verizon Communications, Inc. 16,110,000
---------------
95,097,898
Electric Utilities--0.3% 183,000 DTE Energy Co. 8,408,850
350,000 PPL Corp. 18,991,000
---------------
27,399,850
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
United States Electronic Equipment 200,000 Jabil Circuit, Inc. (b) $ 5,520,000
(continued) & Instruments--0.1% 1,200,000 Sanmina-SCI Corp. (b) 4,812,000
---------------
10,332,000
Energy Equipment & 89,200 Baker Hughes, Inc. 3,935,504
Services--0.9% 391,700 ENSCO International, Inc. (c) 12,769,420
500,000 GlobalSantaFe Corp. 16,800,000
146,700 Halliburton Co. 6,101,253
562,000 Key Energy Services, Inc. (b) 6,322,500
50,000 Maverick Tube Corp. (b) 1,454,500
82,700 Noble Corp. 4,209,430
473,500 Rowan Cos., Inc. (b) 12,561,955
332,100 Schlumberger Ltd. 22,718,961
78,300 Tidewater, Inc. 2,699,001
147,400 Transocean, Inc. (b) 6,834,938
---------------
96,407,462
Food & Staples 200,000 CVS Corp. 10,316,000
Retailing--0.7% 200,000 Sysco Corp. (c) 6,920,000
1,000,000 Wal-Mart Stores, Inc. 47,140,000
200,000 Walgreen Co. 8,612,000
---------------
72,988,000
Food Products--0.3% 230,000 Archer-Daniels-Midland Co. (c) 4,137,700
144,000 ConAgra Foods, Inc. 3,852,000
320,000 Corn Products International, Inc. 7,046,400
110,000 Ralcorp Holdings, Inc. 4,358,200
275,000 Sara Lee Corp. 5,882,250
605,000 Tyson Foods, Inc. Class A 10,218,450
---------------
35,495,000
Health Care Equipment 250,000 Baxter International, Inc. 9,275,000
& Supplies--0.1% 150,000 Waters Corp. (b) 5,944,500
---------------
15,219,500
Health Care Providers 125,000 AmerisourceBergen Corp. 7,660,000
& Services--0.5% 75,000 HCA, Inc. 4,188,000
100,000 Health Management Associates, Inc. Class A 2,473,000
100,000 Humana, Inc. (b) 3,465,000
50,000 LifePoint Hospitals, Inc. (b) 2,222,500
150,000 Manor Care, Inc. 5,002,500
300,000 Stewart Enterprises, Inc. Class A 1,620,000
100,000 Tenet Healthcare Corp. (b) 1,197,000
175,000 Triad Hospitals, Inc. (b)(c) 8,968,750
375,000 WellChoice, Inc. (b) 21,075,000
---------------
57,871,750
Hotels, Restaurants & 11,200 Brinker International, Inc. (b) 378,560
Leisure--0.6% 44,000 Darden Restaurants, Inc. 1,320,000
6,500,000 La Quinta Corp. (b) 56,550,000
150,000 Papa John's International, Inc. (b) 5,142,000
---------------
63,390,560
Household Durables--0.2% 850,000 Maytag Corp. (c) 8,236,500
11,700 NVR, Inc. (b) 8,404,695
---------------
16,641,195
Household Products--0.0% 70,000 Kimberly-Clark Corp. 4,371,500
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
United States IT Services--0.1% 200,000 Automatic Data Processing, Inc. $ 8,688,000
(continued) 154,700 SYKES Enterprises, Inc. (b) 1,082,900
---------------
9,770,900
Industrial 2,960,000 General Electric Co. 107,152,000
Conglomerates--1.2% 751,100 Tyco International Ltd. 23,516,941
---------------
130,668,941
Insurance--1.7% 600,000 ACE Ltd. (h) 25,776,000
195,000 The Allstate Corp. 10,951,200
1,450,000 American International Group, Inc. 73,732,500
264,000 Assurant, Inc. 8,735,760
153,300 Bristol West Holdings, Inc. 2,311,764
88,700 Hartford Financial Services Group, Inc. 6,419,219
179,900 Metlife, Inc. 6,998,110
100,000 Prudential Financial, Inc. 5,715,000
800,000 The St. Paul Travelers Cos., Inc. 28,640,000
86,000 UnumProvident Corp. 1,437,920
200,000 XL Capital Ltd. Class A 14,060,000
---------------
184,777,473
Internet Software & 500,000 DoubleClick, Inc. (b) 4,020,000
Services--0.1% 974,800 webMethods, Inc. (b) 4,552,316
---------------
8,572,316
Machinery--0.1% 50,000 Deere & Co. 3,127,000
200,000 Navistar International Corp. (b) 5,906,000
---------------
9,033,000
Media--1.0% 830,000 Comcast Corp. Class A (b)(c) 26,651,300
250,000 The DIRECTV Group, Inc. (b) 3,530,000
650,000 Liberty Media Corp. Class A (b)(c) 6,526,000
100,000 Liberty Media International, Inc. Class A (b) 4,147,000
291,673 NTL, Inc. (b)(c) 18,661,239
550,000 Time Warner, Inc. (b) 9,245,500
944,363 Viacom, Inc. Class B 32,693,847
---------------
101,454,886
Metals & Mining--1.1% 375,000 AK Steel Holding Corp. (b) 2,718,750
175,000 Alcoa, Inc. 5,078,500
543,931 Aleris International, Inc. (b) 11,672,759
200,000 Arch Coal, Inc. (c) 8,868,000
100,000 Consol Energy, Inc. 4,324,000
450,000 Freeport-McMoRan Copper & Gold, Inc. Class B 15,597,000
900,000 Inco Limited (USD) 32,166,000
1,611,000 International Coal Group, Inc. (b)(g) 22,554,000
89,682 James River Coal Co. (b) 2,668,936
100,000 Massey Energy Co. 3,611,000
116,919 Mittal Steel Co. NV (b) 2,800,212
90,000 United States Steel Corp. 3,848,400
---------------
115,907,557
Multi-Utilities & 600,000 The AES Corp. (b) 9,648,000
Unregulated Power--0.1%
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
United States Oil & Gas--2.9% 116,500 Amerada Hess Corp. $ 10,910,225
(continued) 839,000 Chevron Corp. 43,628,000
157,500 ConocoPhillips 16,513,875
208,000 Devon Energy Corp. 9,395,360
5,400,000 El Paso Corp. 53,946,000
720,000 Exxon Mobil Corp. (h) 41,061,600
450,000 Kerr-McGee Corp. 34,920,000
650,000 Marathon Oil Corp. 30,270,500
112,900 Noble Energy, Inc. 7,239,148
392,400 Occidental Petroleum Corp. 27,075,600
310,000 Stone Energy Corp. (b) 13,931,400
275,000 Unocal Corp. 15,001,250
100,000 Williams Cos., Inc. 1,702,000
---------------
305,594,958
Paper & Forest 700,000 Bowater, Inc. 22,743,000
Products--0.3% 209,300 Deltic Timber Corp. 7,419,685
---------------
30,162,685
Personal Products--0.1% 150,000 The Gillette Co. 7,746,000
Pharmaceuticals--2.7% 445,670 Abbott Laboratories 21,909,137
22,100 Allergan, Inc. 1,555,619
353,000 Andrx Corp. (b) 7,028,230
902,100 Bristol-Myers Squibb Co. 23,454,600
285,000 Eli Lilly & Co. 16,663,950
58,000 Forest Laboratories, Inc. (b) 2,069,440
159,200 IVAX Corp. (b) 3,008,880
849,000 Johnson & Johnson 58,266,870
39,900 King Pharmaceuticals, Inc. (b) 319,200
1,008,200 Merck & Co., Inc. 34,177,980
44,000 Mylan Laboratories 726,000
3,083,800 Pfizer, Inc. 83,786,846
689,800 Schering-Plough Corp. 14,396,126
53,100 Watson Pharmaceuticals, Inc. (b) 1,593,000
404,100 Wyeth 18,160,254
---------------
287,116,132
Real Estate--0.2% 350,000 Aames Investment Corp. 2,957,500
100,000 Catellus Development Corp. 2,770,000
50,000 Cedar Shopping Centers, Inc. 690,000
700,000 Friedman Billings Ramsey Group, Inc. Class A 8,463,000
300,000 Provident Senior Living Trust (j) 5,925,000
---------------
20,805,500
Road & Rail--0.4% 300,000 CSX Corp. 12,039,000
300,000 Swift Transportation Co., Inc. (b) 6,399,000
350,000 Union Pacific Corp. 22,375,500
---------------
40,813,500
Semiconductors & 1,000,000 Agere Systems, Inc. Class A (b) 1,170,000
Semiconductor 2,500,000 Agere Systems, Inc. Class B (b) 2,950,000
Equipment--0.3% 200,000 Altera Corp. (b) 4,146,000
500,000 Cirrus Logic, Inc. (b) 2,110,000
821,000 Intel Corp. 19,309,920
380,000 Micron Technology, Inc. (b)(c) 3,689,800
---------------
33,375,720
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Common Stocks Value
United States Software--2.0% 1,300,000 BMC Software, Inc. (b) $ 21,060,000
(concluded) 580,000 Borland Software Corp. (b) 3,369,800
2,503,589 Computer Associates International, Inc. 67,346,544
300,000 Compuware Corp. (b) 1,785,000
3,325,300 Microsoft Corp. 84,130,090
2,500,800 Siebel Systems, Inc. (b) 22,507,200
804,000 TIBCO Software, Inc. (b) 5,740,560
125,000 Veritas Software Corp. (b) 2,573,750
---------------
208,512,944
Specialty Retail--0.1% 250,000 Home Depot, Inc. 8,842,500
76,600 The Sports Authority, Inc. (b) 2,037,560
---------------
10,880,060
Textiles, Apparel & Luxury 1,350,000 Unifi, Inc. (b) 4,144,500
Goods--0.0%
Thrifts & Mortgage 50,000 Doral Financial Corp. 702,500
Finance--0.3% 275,000 Fannie Mae 14,836,250
50,000 Freddie Mac 3,076,000
200,000 Washington Mutual, Inc. 8,264,000
---------------
26,878,750
Tobacco--0.4% 535,200 Altria Group, Inc. 34,782,648
2,100,000 DIMON, Inc. 12,495,000
---------------
47,277,648
Transportation 930,100 Macquarie Infrastructure Co. Trust (b) 25,345,225
Infrastructure--0.2%
Total Common Stocks in the United States 2,769,715,815
Total Investments in Common Stocks
(Cost--$4,430,165,658)--54.0% 5,740,766,482
Mutual Funds
South Korea--0.1% 500,000 Korea Fund (USD) 12,525,000
Total Mutual Funds in South Korea 12,525,000
Vietnam--0.0% 1,272,540 Vietnam Enterprise Investments Ltd. Redeemable
Shares (b) 1,679,753
Total Mutual Funds in Vietnam 1,679,753
Total Investments in Mutual Funds
(Cost--$7,676,572)--0.1% 14,204,753
Preferred Stocks
Australia--0.2% Commercial Banks--0.2% 492,000 National Australia Bank Ltd. 7.875% (d) 18,646,800
Total Preferred Stocks in Australia 18,646,800
United Diversified 104,238 McLeodUSA, Inc. Series A 2.50% (d) 78,179
States--0.5% Telecommunication
Services--0.0%
Insurance--0.1% 340,000 XL Capital Ltd. 6.50% (d) 7,803,000
Oil & Gas--0.1% 10,650 El Paso Corp. 4.99% (d)(j) 9,941,775
Thrifts & Mortgage 385 Fannie Mae 5.375% (d) 35,467,309
Finance--0.3%
Total Preferred Stocks in the United States 53,290,263
Total Investments in Preferred Stocks
(Cost--$72,489,634)--0.7% 71,937,063
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Country Industry++ Shares Held Warrants (k) Value
Japan--0.1% Real Estate--0.1% 6,131,614 Marco Polo Investment Holdings Ltd.
(expires 8/29/2013) $ 9,197,421
Total Warrants in Japan 9,197,421
Russia--0.0% Diversified 47,330 Metromedia International Group, Inc.
Telecommunication (expires 6/01/2006) 47
Services--0.0%
Total Warrants in Russia 47
United Construction 4,000,000 Foster Wheeler Ltd. Class B (expires 9/24/2007) (o) 3,000,000
States--0.1% & Engineering--0.0%
Diversified Financial 2,900,000 Citigroup, Inc. (expires 6/03/2005) 5,017,000
Services--0.1%
Diversified 10,894 AboveNet, Inc. (expires 9/08/2008) 98,046
Telecommunication 12,816 AboveNet, Inc. (expires 9/08/2010) 115,344
Services--0.0% 230,981 McLeodUSA, Inc. (expires 4/16/2007) 2,541
Total Warrants in the United States 8,232,931
Total Investments in Warrants
(Cost--$9,928,445)--0.2% 17,430,399
Rights
United Commercial Services 836,400 Information Resources, Inc. (i) 501,840
States--0.0% & Supplies--0.0%
Total Rights in the United States 501,840
Total Investments in Rights
(Cost--$1,405,152)--0.0% 501,840
Currency Face
Denomination Amount Floating Rate Loan Interest (p)
United Household USD 6,810,000 Vitro Envases Norteamerica SA de CV,
States--0.1% Durables--0.1% Term, due 2/23/2010 6,673,800
Textiles, Apparel & 9,652,088 Galey & Lord, Inc., Term, due 9/05/2009 2,799,106
Luxury Goods--0.0%
Total Floating Rate Loan Interest
(Cost--$13,678,143)--0.1% 9,472,906
Fixed Income Securities
Australia--0.6% Food USD 12,325,000 Burns, Philp Capital Property Ltd., 10.75% due
Products--0.1% 2/15/2011 13,619,125
Foreign AUD 69,000,000 Australia Government Bond Series 705, 7.50% due
Government 7/15/2005 54,068,407
Obligations--0.5%
Total Fixed Income Securities in Australia 67,687,532
Brazil--0.2% Chemicals--0.1% USD 11,000,000 Cosan SA Industria e Comercio, 9% due 11/01/2009 (j) 11,068,750
Commercial 2,000,000 Banco Nacional de Desenvolvimento Economico e Social,
Banks--0.0% 5.83% due 6/16/2008 (a) 1,992,500
Foreign Government 11,500,000 Brazilian Government International Bond, 8.25%
Obligations--0.1% due 1/20/2034 10,482,250
Total Fixed Income Securities in Brazil 23,543,500
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Currency Face
Country Industry++ Denomination Amount Fixed Income Securities Value
Canada--0.5% Foreign Canadian Government Bond:
Government CAD 350,000 4.25% due 9/01/2008 $ 286,652
Obligations--0.3% 38,600,000 4% due 9/01/2010 31,144,213
521,000 5.25% due 6/01/2013 448,613
175,000 Series WL43, 5.75% due 6/01/2029 162,404
---------------
32,041,882
Wireless Rogers Wireless Communications, Inc.:
Telecommunication USD 11,600,000 6.135% due 12/15/2010 (a) 11,919,000
Services--0.2% CAD 6,250,000 7.625% due 12/15/2011 5,104,785
---------------
17,023,785
Total Fixed Income Securities in Canada 49,065,667
Cayman Commercial JPY 1,005,000,000 SMFG Finance Ltd., 2.25% due 7/11/2005
Islands--0.3% Banks--0.2% (Regulation S) (b)(d) 20,595,244
Industrial USD 7,400,000 First Pacific Finance Ltd., 0% due 1/18/2010 (d)(l) 7,538,750
Conglomerates--0.1%
Oil & Gas--0.0% 4,750,000 Momenta/Cayman, 2.50% due 8/01/2007
(Regulation S) (d) 4,720,312
Total Fixed Income Securities in the Cayman Islands 32,854,306
Chile--0.6% Electric 70,712,690 Empresa Electrica del Norte Grande SA,
Utilities--0.6% 4% due 11/05/2017 60,459,350
Total Fixed Income Securities in Chile 60,459,350
China--0.1% Industrial 7,750,000 Hutchison Whampoa International Ltd., 5.45% due
Conglomerates--0.1% 11/24/2010 7,972,378
Total Fixed Income Securities in China 7,972,378
Europe--1.9% Commercial European Investment Bank:
Banks--1.9% EUR 38,750,000 3.50% due 10/15/2005 50,335,480
GBP 60,200,000 6.125% due 12/07/2005 115,795,002
EUR 30,700,000 4% due 1/15/2007 40,755,595
---------------
206,886,077
Total Fixed Income Securities in Europe 206,886,077
France--0.9% Commercial 39,150,000 ERAP, 2.875% due 7/12/2006 50,940,436
Banks--0.5%
Containers USD 5,480,000 Crown European Holdings SA, 10.875% due 3/01/2013 6,260,900
& Packaging--0.1%
Foreign Government EUR 23,500,000 Caisse d'Amortissement de la Dette Sociale, 4%
Obligations--0.3% due 10/25/2014 31,651,007
Software--0.0% 1,505,000 Infogrames Entertainment SA Series WW, 4% due
4/01/2009 (d) 1,255,989
Total Fixed Income Securities in France 90,108,332
Germany--4.2% Commercial Kreditanstalt fuer Wiederaufbau:
Banks--2.1% GBP 34,250,000 4.125% due 6/07/2006 64,997,746
7,700,000 4.80% due 10/27/2006 14,676,751
EUR 39,150,000 3.125% due 11/15/2006 51,232,866
GBP 11,550,000 5.375% due 12/07/2007 22,412,788
11,550,000 4.50% due 12/07/2008 21,876,572
EUR 38,750,000 4.25% due 7/04/2014 53,281,375
---------------
228,478,098
Foreign Government 115,870,000 Bundesobligation Series 136, 5% due 8/19/2005 150,807,208
Obligations--2.1% 51,000,000 Federal State of North Rhine Westphalia
Series 387, 4.25% due 2/16/2007 68,065,399
---------------
218,872,607
Total Fixed Income Securities in Germany 447,350,705
Iceland--0.2% Foreign ISK 1,316,000,000 Iceland Rikisbref, 7.25% due 5/17/2013 20,323,117
Government
Obligations--0.2%
Total Fixed Income Securities in Iceland 20,323,117
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Currency Face
Country Industry++ Denomination Amount Fixed Income Securities Value
India--0.3% Automobiles--0.1% USD 8,100,000 Tata Motors Ltd., 1% due 7/31/2008 (d)(j) $ 12,818,250
Media--0.2% 21,360,000 Zee Telefilms Ltd, 0.50% due 4/29/2009 (d) 21,014,481
Total Fixed Income Securities in India 33,832,731
Italy--0.2% Foreign Government JPY 2,075,000,000 Italy Government International Bond, 0.375%
Obligations--0.2% due 10/10/2006 19,873,917
Total Fixed Income Securities in Italy 19,873,917
Japan--0.6% Commercial 860,000,000 The Bank of Fukuoka Ltd., Series 2, 1.10% due
Banks--0.3% 9/28/2007 (d) 11,802,193
1,644,000,000 The Bank of Kyoto Ltd. Series 1, 1.90% due
9/30/2009 (d) 22,303,587
---------------
34,105,780
Insurance--0.0% 735,000,000 ASIF III Jersey Ltd., 0.95% due 7/15/2009 7,162,927
Leisure Equipment 771,000,000 Shoei Co., Ltd. Series 2, 0% due 12/30/2009 (d)(l) 9,039,032
& Products--0.1%
Trading Companies 1,600,000,000 Mitsubishi Corp., 0% due 6/17/2011 (d)(l) 18,352,716
& Distributors--0.2%
Total Fixed Income Securities in Japan 68,660,455
Luxembourg--0.1% Industrial USD 5,750,000 Tyco International Group SA, 2.75% due
Conglomerates--0.1% 1/15/2018 (d)(j) 7,956,563
Total Fixed Income Securities in Luxembourg 7,956,563
Malaysia--0.5% Foreign Government MYR 38,600,000 Johor Corp., 1% due 7/31/2009 (l) 10,361,053
Obligations--0.5% 156,500,000 Malaysia Government Bond Series 386X, 8.60%
due 12/01/2007 46,715,826
---------------
57,076,879
Total Fixed Income Securities in Malaysia 57,076,879
Mexico--0.3% Household USD 18,250,000 Vitro Envases Norteamerica SA de CV, 10.75% due
Durables--0.2% 7/23/2011 (j) 17,793,750
Oil & Gas--0.1% GBP 4,930,000 Petroleos Mexicanos, 14.50% due 3/31/2006 10,187,857
Total Fixed Income Securities in Mexico 27,981,607
Netherlands--0.8% Food Products--0.2% EUR 13,200,000 Royal Numico NV, 4.25% due 6/26/2005
(Regulation S) (d) 17,066,174
Foreign Government 24,000,000 Netherlands Government Bond, 3.75% due 7/15/2014 31,922,925
Obligations--0.3%
Semiconductors ASM International NV (d):
& Semiconductor USD 4,235,000 4.25% due 12/06/2011 (j) 3,906,787
Equipment--0.3% 1,500,000 4.25% due 12/06/2011 1,461,435
EUR 22,850,000 Infineon Technologies Holding BV, 4.25% due
2/06/2007 (d) 29,867,064
---------------
35,235,286
Total Fixed Income Securities in the Netherlands 84,224,385
New Zealand--0.2% Foreign Government NZD 20,750,000 New Zealand Government Bond Series 216, 4.50%
Obligations--0.2% due 2/14/2016 19,852,205
Total Fixed Income Securities in New Zealand 19,852,205
Poland--0.3% Foreign Government PLN 91,500,000 Poland Government Bond, 3% due 8/24/2016 27,613,888
Obligations--0.3%
Total Fixed Income Securities in Poland 27,613,888
South Korea--0.1% Wireless USD 15,750,000 LG Telecom Ltd, 8.25% due 7/15/2009 (j) 16,310,857
Telecommunication
Services--0.1%
Total Fixed Income Securities in South Korea 16,310,857
Sweden--0.4% Foreign Government Sweden Government Bond:
Obligations--0.4% SEK 28,100,000 Series 1040, 6.50% due 5/05/2008 4,400,682
203,500,000 Series 3101, 4% due 12/01/2008 35,825,574
---------------
40,226,256
Total Fixed Income Securities in Sweden 40,226,256
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Currency Face
Country Industry++ Denomination Amount Fixed Income Securities Value
United Commercial GBP 17,000,000 Bank Nederlandse Gemeenten, 4.625% due 12/07/2006 $ 32,434,093
Kingdom--0.9% Banks--0.4% 3,850,000 International Bank for Reconstruction &
Development, 7.125% due 7/30/2007 7,728,780
---------------
40,162,873
Diversified Colt Telecom Group Plc:
Telecommunication EUR 20,150,000 2% due 3/29/2006 29,654,540
Services--0.4% 11,575,000 2% due 4/03/2007 (Regulation S) (d) 17,931,373
---------------
47,585,913
Foreign Government United Kingdom Gilt:
Obligations--0.0% GBP 260,000 7.25% due 12/07/2007 529,643
85,000 8% due 6/07/2021 226,274
---------------
755,917
Insurance--0.1% USD 7,000,000 Swiss Life Finance Ltd., 2% due 5/20/2005 (d) 7,953,750
Total Fixed Income Securities in the United Kingdom 96,458,453
United Aerospace 3,700,000 GenCorp, Inc., 5.75% due 4/15/2007 (d) 4,060,750
States--4.5% & Defense--0.0%
Airlines--0.0% 4,941,985 Northwest Airlines, Inc. Series 1999-3-B, 9.485%
due 10/01/2016 3,111,314
Biotechnology--0.2% Abgenix, Inc. (d):
12,765,000 3.50% due 3/15/2007 11,679,975
5,000,000 1.75% due 12/15/2011 (j) 4,000,000
---------------
15,679,975
Communications 11,200,000 Corning, Inc., 7% due 3/15/2007 11,214,000
Equipment--0.2% 5,790,000 Lucent Technologies, Inc., 8% due 8/01/2031 (d) 5,927,512
---------------
17,141,512
Construction 55,593,750 Foster Wheeler LLC Series A, 10.359% due
& Engineering--0.8% 9/15/2011 (o) 58,790,391
14,765,000 J Ray McDermott SA, 11% due 12/15/2013 (j) 16,315,325
9,000,000 McDermott, Inc., 8.75% due 5/19/2023 9,045,000
---------------
84,150,716
Consumer 170,000 HSBC Finance Corp., 6.40% due 6/17/2008 179,956
Finance--0.0% 3,805,000 Triad Acquisition Corp., 11.125% due 5/01/2013 (j) 3,780,267
---------------
3,960,223
Containers 10,050,000 Anchor Glass Container Corp., 11% due 2/15/2013 8,140,500
& Packaging--0.1% 5,904,000 Crown Cork & Seal Co., Inc., 7.50% due 12/15/2096 5,047,920
---------------
13,188,420
Diversified Financial 120,000 American Honda Finance Corp., 3.85% due 11/06/2008 117,690
Services--0.3% General Electric Capital Corp.:
JPY 1,350,000,000 0.10% due 12/20/2005 12,866,684
1,500,000,000 1.40% due 11/02/2006 14,559,129
---------------
27,543,503
Diversified MCI, Inc.:
Telecommunication USD 14,051,000 5.908% due 5/01/2007 14,261,765
Services--1.5% 14,051,000 6.688% due 5/01/2009 14,507,657
9,624,000 7.735% due 5/01/2014 10,417,980
122,057,412 Metromedia International Group, Inc. Series B,
10.50% due 9/30/2007 (l) 122,057,960
---------------
161,245,362
Gas Utilities--0.0% 3,470,000 Aventine Renewable Energy Holdings, Inc., 9.01%
due 12/15/2011 (a)(j) 3,157,700
Health Care Providers 2,297,000 Beverly Enterprises, Inc., 7.875% due 6/15/2014 2,515,215
& Services--0.1% 10,000,000 Tenet Healthcare Corp., 9.25% due 2/01/2015 (j) 10,000,000
---------------
12,515,215
Hotels, Restaurants 20,800,000 Uno Restaurant Corp., 10% due 2/15/2011 (j) 20,592,000
& Leisure--0.2%
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Currency Face
Country Industry++ Denomination Amount Fixed Income Securities Value
United States Insurance--0.1% USD 170,000 AIG SunAmerica Global Financing VII, 5.85% due
(concluded) 8/01/2008 $ 177,589
4,945,000 Fortis Insurance NV, 7.75% due 1/26/2008 (d)(j) 5,016,702
---------------
5,194,291
Multi-Utilities GBP 3,393,000 The AES Corp., 8.375% due 3/01/2011 6,480,261
& Unregulated USD 10,200,000 Calpine Corp., 7.625% due 4/15/2006 7,038,000
Power--0.5% Calpine Generating Co. LLC (a):
28,300,000 6.31% due 4/01/2009 28,158,500
15,500,000 8.831% due 4/01/2010 14,492,500
---------------
56,169,261
Oil & Gas--0.1% 6,425,000 McMoRan Exploration Co., 5.25% due 10/06/2011 (d) 8,344,469
Semiconductors 22,400,000 Conexant Systems, Inc., 4% due 2/01/2007 (d) 19,236,000
& Semiconductor 9,050,000 LSI Logic Corp., 4% due 11/01/2006 (d) 8,812,437
Equipment--0.3% ---------------
28,048,437
Wireless 14,325,000 Nextel Communications, Inc., 5.25% due
Telecommunication 1/15/2010 (d) 14,181,750
Services--0.1%
Total Fixed Income Securities in the United States 478,284,898
Total Investments in Fixed Income Securities
(Cost--$1,826,788,276)--18.7% 1,984,604,058
U.S. Government Obligations
73,373,877 U.S. Treasury Inflation Indexed Bonds, 1.625%
due 1/15/2015 73,577,342
U.S. Treasury Notes (h):
23,250,000 4% due 6/15/2009 23,393,499
23,100,000 4.75% due 5/15/2014 24,079,948
Total Investments in U.S. Government Obligations
(Cost--$118,948,589)--1.1% 121,050,789
Beneficial
Interest Other Interests (f)
United Diversified USD 19,750,000 AboveNet, Inc. (Litigation Trust Certificates) 0
States--0.0% Telecommunication 5,700 McLeodUSA, Inc. (Litigation Trust Certificates) 0
Services--0.0% 35,000,000 WilTel Communications Group, Inc. (Litigation
Trust Certificates) 0
Total Investments in Other Interests
(Cost--$0)--0.0% 0
Face
Amount Short-Term Securities
Singapore--0.4% Time SGD 61,601,080 SGD Time Deposit, 1.97% due 5/13/2005 37,688,027
Deposits--0.4%
Total Short-Term Securities in Singapore 37,688,027
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Currency Beneficial
Denomination Interest Short-Term Securities Value
USD 2,269,603,830 Merrill Lynch Liquidity Series, LLC Cash Sweep
Series I (m) $ 2,269,603,830
142,706,937 Merrill Lynch Liquidity Series, LLC Money
Market Series (m)(n) 142,706,937
Total Short-Term Securities in the United States 2,412,310,767
Total Investments in Short-Term Securities 2,449,998,794
(Cost--$2,449,724,117)--23.1%
Total Investments (Cost--$8,930,804,586)--98.0% 10,409,967,084
Number of
Contracts Call Options Written
Options--0.3% 2,500 3Com Corp., expiring January 2006 at USD 5,
Broker UBS Warburg (37,500)
3,326 Andrx Corp., expiring June 2005 at USD 17.5,
Broker Citigroup Global Market (964,540)
BMC Software, Inc.:
10,000 expiring January 2006 at USD 15, Broker Credit
Suisse First Boston (2,750,000)
3,000 expiring January 2006 at USD 15, Broker UBS
Warburg (825,000)
3,800 Borland Software Corp., expiring January 2006 at
USD 5, Broker Deutsche Bank AG (627,000)
5,000 Cirrus Logic, Inc., expiring January 2006 at USD 5,
Broker Deutsche Bank AG (275,000)
4,000 Cisco Systems, Inc., expiring January 2006 at
USD 17.5, Broker Deutsche Bank AG (660,000)
Corinthian Colleges, Inc.:
3,000 expiring May 2005 at USD 15, Broker UBS Warburg (75,000)
2,000 expiring January 2006 at USD 15, Broker Deutsche
Bank AG (410,000)
1,911 expiring January 2006 at USD 20, Broker
Citigroup Global Market (152,880)
3,000 expiring January 2006 at USD 20, Broker Credit
Suisse First Boston (240,000)
772 expiring January 2006 at USD 20, Broker
Goldman Sachs (61,760)
1,545 expiring January 2006 at USD 20, Broker
Morgan Stanley (123,600)
772 expiring January 2006 at USD 20, Broker UBS
Securities (61,760)
2,000 expiring January 2006 at USD 20, Broker UBS
Warburg (160,000)
5,000 El Paso Corp., expiring January 2006 at USD 12.5,
Broker Deutsche Bank AG (325,000)
2,000 Intel Corp., expiring January 2006 at USD 22.5,
Broker Credit Suisse First Boston (560,000)
2,000 Jabil Circuit, Inc., expiring January 2006 at
USD 20, Broker Credit Suisse First Boston (1,760,000)
1,000 Massey Energy Co., expiring January 2006 at
USD 35, Broker Citigroup Global Market (630,000)
McDermott International, Inc.:
437 expiring May 2005 at USD 12.5, Broker
Deutsche Bank AG (353,970)
1,145 expiring May 2005 at USD 15, Broker UBS Warburg (652,650)
1,069 expiring May 2005 at USD 17.5, Broker UBS Warburg (374,150)
2,511 expiring January 2006 at USD 17.5, Broker
Citigroup Global Market (1,481,490)
1,266 expiring January 2006 at USD 17.5, Broker
Credit Suisse First Boston (746,940)
850 expiring January 2006 at USD 17.5, Broker
Deutsche Bank AG (501,500)
579 expiring January 2006 at USD 17.5, Broker
Morgan Stanley (341,610)
1,060 expiring January 2006 at USD 17.5, Broker UBS
Warburg (625,400)
3,451 expiring January 2006 at USD 20, Broker
Citigroup Global Market (1,449,420)
1,549 expiring January 2006 at USD 20, Broker
Deutsche Bank AG (650,580)
2,000 expiring January 2006 at USD 25, Broker UBS
Securities (490,000)
1,000 Merck & Co., Inc., expiring January 2006 at
USD 27.5, Broker Morgan Stanley (710,000)
2,000 Nokia Oyj, expiring January 2006 at USD 15,
Broker Goldman Sachs & Co. (420,000)
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (continued) (in U.S. dollars)
Number of
Contracts Call Options Written Value
Options Nortel Networks Corp.:
(concluded) 10,000 expiring January 2006 at USD 2.5, Broker
Morgan Stanley $ (550,000)
24,780 expiring January 2006 at USD 2.5, Broker
UBS Warburg (1,362,900)
Quanta Services, Inc.:
1,155 expiring May 2005 at USD 7.5, Broker
Deutsche Bank AG (63,525)
1,204 expiring August 2005 at USD 7.5, Broker
Susquehanna (126,420)
1,914 expiring November 2005 at USD 7.5, Broker
Citigroup Global Market (239,250)
1,541 expiring January 2006 at USD 10, Broker
Morgan Stanley (92,460)
1,542 expiring January 2006 at USD 10, Broker
UBS Warburg (92,520)
Siebel Systems, Inc.:
10,008 expiring January 2006 at USD 7.5, Broker
Citigroup Global Market (2,051,640)
5,000 expiring January 2006 at USD 7.5, Broker
Goldman Sachs (1,025,000)
5,000 expiring January 2006 at USD 7.5, Broker
UBS Warburg (1,025,000)
766 The Sports Authority, Inc., expiring October 2005
at USD 25, Broker Deutsche Bank AG (329,380)
8,040 TIBCO Software, Inc., expiring November 2005 at
USD 7.5, Broker UBS Warburg (804,000)
3,000 Tyson Foods, Inc. Class A, expiring January 2006
at USD 17.5, Broker Deutsche Bank AG (345,000)
webMethods, Inc.:
5,850 expiring October 2005 at USD 5, Broker
Morgan Stanley (438,750)
3,899 expiring October 2005 at USD 5.01, Broker
UBS Warburg (292,425)
---------------
(28,335,020)
Total Investments in Call Options Written
(Premiums Received--$30,223,942)--0.3% (28,335,020)
Total Investments, Net of Options Written (Cost--$8,900,580,644*)--97.7% 10,381,632,064
Other Assets Less Liabilities--2.3% 239,008,449
---------------
Net Assets--100.0% $10,620,640,513
===============
* The cost and unrealized appreciation (depreciation) of investments as
of April 30, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost, including options $ 8,911,693,473
=================
Gross unrealized appreciation $ 1,690,729,476
Gross unrealized depreciation (220,790,885)
-----------------
Net unrealized appreciation $ 1,469,938,591
=================
++ 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.
(a) Floating rate note.
(b) Non-income producing security.
(c) Security, or a portion of security, is on loan.
(d) Convertible security.
(e) Depositary Receipts.
(f) Other interests represent beneficial interest in liquidiation trusts and
other reorganization entities and are non-income producing.
(g) Restricted securities as to resale, representing 0.2% of net assets,
were as follows:
Acquisition
Issue Date(s) Cost Value
International Coal
Group, Inc. 12/06/2004-12/14/2004 $ 16,501,425 $ 22,554,000
Koninklijke Ahold NV* 12/11/2003 2,811,386 3,412,023
------------ ------------
Total $ 19,312,811 $ 25,966,023
============ ============
* Depositary Receipts.
(h) All or a portion of security held as collateral in connection with open
financial futures contracts.
(i) The rights entitle the holders to potential cash distributions pending
litigation settlements.
(j) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Schedule of Investments (concluded) (in U.S. dollars)
(k) Warrants entitle the Fund to purchase a predetermined number of shares
of common stock and are non-income producing. The purchase price and
number of shares are subject to adjustment under certain conditions
until the expiration date.
(l) Represents a zero coupon or step bond: the interest rate shown reflects
the effective yield at the time of purchase by the Fund.
(m) Investments in companies considered to be an affiliate of the Fund
(such companies are defined as "Affiliated Companies" in Section 2(a)(3)
of the Investment Company Act of 1940) were as follows:
Net Interest
Affiliate Activity Income
Merrill Lynch Liquidity Series, LLC Cash Sweep Series I $215,430,649 $24,416,417
Merrill Lynch Liquidity Series, LLC Money Market Series $106,027,387 $ 70,708
(n) Security was purchased with the cash proceeds from securities loans.
(o) Investments in companies 5% or more of whose outstanding securities are
held by the Fund (such companies are defined as "Affiliated Companies" in
Section 2(a)(3) of the Investment Company Act of 1940) were as follows:
Interest/
Net Purchase Sales Realized Dividend
Affiliate Activity Cost Cost Gains (Losses) Income
Foster Wheeler Ltd. (8,833,412) $44,383,382* $23,314,582 $3,301,447 +++
Foster Wheeler Ltd. (Convertible Preferred) (104,914) -- $44,383,382* -- +++
Foster Wheeler Ltd. (Class B) (Warrants) -- -- -- -- +++
Foster Wheeler Ltd.:
10.359% due 9/15/2011 (Series A) 27,450,000 $27,450,000* -- -- $2,955,407
10.359% due 9/15/2011 (Series B) (27,450,000) -- $27,450,000* -- --
+++ Non-income producing security.
* Shares were exchanged due to a corporate action.
(p) Floating rate loan interests in which the Fund invests generally pays
interest at rates that are periodically redetermined by reference to a
base lending rate plus a premium. These base lending rates are generally
(i) the lending rate offered by one or more major European banks, such as
LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one
or more U.S. banks, or (iii) the certificate of deposit rate.
Financial futures contracts purchased as of April 30, 2005 were as follows:
Unrealized
Number of Expiration Appreciation
Contracts Issue Exchange Date Face Value (Depreciation)
2,610 EJ Euro Stoxx Euronext Paris June 2005 $ 99,403,071 $ (1,421,093)
479 FTSE LIFFE June 2005 45,643,038 (1,767,410)
271 Nikkei 225 Index OSAKA June 2005 30,605,360 (2,269,374)
148 S&P 500 Index NYSE June 2005 42,618,287 246,213
-------------
Total Unrealized Depreciation--Net $ (5,211,664)
=============
Financial futures contracts sold as of April 30, 2005 were as follows:
Number of Expiration Unrealized
Contracts Issue Exchange Date Face Value Depreciation
95 Japanese Government Bond Tokyo June 2005 $124,382,425 $ (2,848,666)
Forward foreign exchange contracts as of April 30, 2005 were as follows:
Unrealized
Foreign Currency Sold Settlement Date Depreciation
AUD 10,400,000 July 2005 $ (169,363)
-------------
Total Unrealized Depreciation on Forward Foreign
Exchange Contracts--Net (USD Commitment--$7,907,640) $ (169,363)
=============
Currency Abbreviations:
AUD Australian Dollar
CAD Canadian Dollar
EUR Euro Dollar
GBP Great Britain Pound
ISK Icelandic Crona
JPY Japanese Yen
MYR Malaysian Ringgit
NZD New Zealand Dollar
PLN Polish Zloty
SEK Swedish Krona
SGD Singapore Dollar
USD U.S. Dollar
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Statement of Assets and Liabilities
As of April 30, 2005
Assets
Investments in unaffiliated securities, at value (including securities loaned
of $138,229,115)(identified cost--$6,425,423,031) $ 7,843,733,676
Investments in affiliated securities, at value (identified cost--$2,505,381,555) 2,566,233,408
Foreign cash (cost--$337,452,041) 336,226,336
Cash 8,833,938
Receivables:
Interest (including $894,531 from affiliates) $ 44,620,672
Capital shares sold 27,446,066
Dividends 19,927,516
Securities sold 15,460,312
Variation margin 806,609
Securities lending 12,116 108,273,291
---------------
Prepaid expenses and other assets 1,134,142
---------------
Total assets 10,864,434,791
---------------
Liabilities
Collateral on securities loaned, at value 142,706,937
Options written, at value (premiums received--$30,223,942) 28,335,020
Unrealized depreciation on forward foreign exchange contracts 169,363
Deferred foreign capital gain tax 93,510
Payables:
Securities purchased 43,685,891
Capital shares redeemed 15,866,691
Investment adviser 5,515,001
Distributor 4,274,301
Other affiliates 3,147,564 72,489,448
--------------- ---------------
Total liabilities 243,794,278
---------------
Net Assets
Net assets $10,620,640,513
===============
Net Assets Consist of
Class A Shares of Common Stock, $.10 par value, 900,000,000 shares authorized $ 24,216,949
Class B Shares of Common Stock, $.10 par value, 2,000,000,000 shares authorized 13,267,001
Class C Shares of Common Stock, $.10 par value, 200,000,000 shares authorized 14,472,057
Class I Shares of Common Stock, $.10 par value, 450,000,000 shares authorized 13,758,987
Class R Shares of Common Stock, $.10 par value, 2,000,000,000 shares authorized 228,923
Paid-in capital in excess of par 8,830,369,632
Undistributed investment income--net $ 30,949,315
Undistributed realized capital gains--net 221,760,748
Unrealized appreciation--net 1,471,616,901
---------------
Total accumulated earnings--net 1,724,326,964
---------------
Net Assets $10,620,640,513
===============
Net Asset Value
Class A--Based on net assets of $3,955,355,301 and 242,169,490 shares outstanding $ 16.33
===============
Class B--Based on net assets of $2,122,267,603 and 132,670,005 shares outstanding $ 16.00
===============
Class C--Based on net assets of $2,252,057,291 and 144,720,566 shares outstanding $ 15.56
===============
Class I--Based on net assets of $2,254,342,713 and 137,589,871 shares outstanding $ 16.38
===============
Class R--Based on net assets of $36,617,605 and 2,289,228 shares outstanding $ 16.00
===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Statement of Operations
For the Six Months Ended April 30, 2005
Investment Income
Interest (net of $10,361 foreign withholding tax and including $27,371,824
from affiliates) $ 77,630,322
Dividends (net of $4,304,120 foreign withholding tax) 75,709,172
Securities lending--net 70,708
---------------
Total income 153,410,202
---------------
Expenses
Investment advisory fees $ 38,059,250
Account maintenance and distribution fees--Class B 10,974,478
Account maintenance and distribution fees--Class C 9,997,960
Account maintenance fees--Class A 4,763,472
Transfer agent fees--Class A 2,103,862
Transfer agent fees--Class B 1,413,350
Transfer agent fees--Class C 1,302,106
Transfer agent fees--Class I 1,167,135
Custodian fees 1,055,250
Accounting services 869,526
Printing and shareholder reports 168,840
Registration fees 101,304
Professional fees 75,978
Account maintenance and distribution fees--Class R 72,240
Pricing fees 50,652
Directors' fees and expenses 25,326
Transfer agent fees--Class R 15,809
Other 92,862
---------------
Total expenses before waiver 72,309,400
Waiver of expenses (3,574,232)
---------------
Total expenses after waiver 68,735,168
---------------
Investment income--net 84,675,034
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain on:
Investments--net (including $23,293 in foreign capital gain and $3,301,447
from affiliates) 245,775,080
Financial futures contracts--net 525,000
Options written--net 4,281,286
Foreign currency transactions--net 9,586,111 260,167,477
---------------
Change in unrealized appreciation/depreciation on:
Investments--net (includes $9,939 deferred foreign capital gain tax credit) 267,736,767
Financial futures contracts--net (6,123,246)
Options written--net 8,280,709
Foreign currency transactions--net (4,500,952) 265,393,278
--------------- ---------------
Total realized and unrealized gain--net 525,560,755
---------------
Net Increase in Net Assets Resulting from Operations $ 610,235,789
===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 84,675,034 $ 104,463,973
Realized gain--net 260,167,477 378,403,324
Change in unrealized appreciation/depreciation--net 265,393,278 524,900,034
--------------- ---------------
Net increase in net assets resulting from operations 610,235,789 1,007,767,331
--------------- ---------------
Dividends & Distributions to Shareholders
Investment income--net:
Class A (67,569,219) (91,382,369)
Class B (32,907,332) (51,423,881)
Class C (29,670,456) (28,501,031)
Class I (39,415,207) (51,844,795)
Class R (438,549) (136,942)
Realized gain--net:
Class A (40,397,160) --
Class B (24,717,612) --
Class C (21,446,555) --
Class I (22,165,323) --
Class R (272,891) --
--------------- ---------------
Net decrease in net assets resulting from dividends & distributions to shareholders (279,000,304) (223,289,018)
--------------- ---------------
Capital Share Transactions
Net increase in net assets derived from capital share transactions 1,075,535,696 1,422,983,251
--------------- ---------------
Redemption Fees
Redemption fees 39,879 24,086
--------------- ---------------
Net Assets
Total increase in net assets 1,406,811,060 2,207,485,650
Beginning of period 9,213,829,453 7,006,343,803
--------------- ---------------
End of period* $10,620,640,513 $ 9,213,829,453
=============== ===============
* Undistributed investment income--net $ 30,949,315 $ 116,275,044
=============== ===============
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Financial Highlights
Class A
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of period $ 15.75 $ 14.27 $ 11.17 $ 12.50 $ 14.30
---------- ---------- ---------- ---------- ----------
Investment income--net*** .16 .23 .28 .35 .39
Realized and unrealized gain (loss)--net .90 1.72 3.23 (1.19) (.20)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.06 1.95 3.51 (.84) .19
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.30) (.47) (.41) (.48) (.30)
Realized gain--net (.18) -- -- (.01) (1.69)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.48) (.47) (.41) (.49) (1.99)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 16.33 $ 15.75 $ 14.27 $ 11.17 $ 12.50
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 6.79%++ 13.90% 32.10% (7.08%) 1.27%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver 1.09%* 1.13% 1.18% 1.19% 1.19%
========== ========== ========== ========== ==========
Expenses 1.16%* 1.18% 1.22% 1.22% 1.24%
========== ========== ========== ========== ==========
Investment income--net 1.93%* 1.54% 2.28% 2.85% 2.92%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $3,955,355 $3,442,396 $2,675,367 $2,051,843 $1,846,554
========== ========== ========== ========== ==========
Portfolio turnover 16.01% 42.58% 45.28% 58.42% 44.87%
========== ========== ========== ========== ==========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Financial Highlights (continued)
Class B
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of period $ 15.44 $ 13.99 $ 10.96 $ 12.25 $ 14.04
---------- ---------- ---------- ---------- ----------
Investment income--net*** .09 .11 .19 .25 .27
Realized and unrealized gain (loss)--net .89 1.69 3.15 (1.16) (.19)
---------- ---------- ---------- ---------- ----------
Total from investment operations .98 1.80 3.34 (.91) .08
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.24) (.35) (.31) (.37) (.18)
Realized gain--net (.18) -- -- (.01) (1.69)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.42) (.35) (.31) (.38) (1.87)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 16.00 $ 15.44 $ 13.99 $ 10.96 $ 12.25
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 6.38%++ 13.08% 31.05% (7.75%) .47%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver 1.86%* 1.89% 1.96% 1.96% 1.96%
========== ========== ========== ========== ==========
Expenses 1.93%* 1.95% 2.00% 2.00% 2.00%
========== ========== ========== ========== ==========
Investment income--net 1.16%* .75% 1.52% 2.04% 2.08%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $2,122,268 $2,159,322 $2,094,428 $1,787,415 $2,650,313
========== ========== ========== ========== ==========
Portfolio turnover 16.01% 42.58% 45.28% 58.42% 44.87%
========== ========== ========== ========== ==========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Financial Highlights (continued)
Class C
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of period $ 15.04 $ 13.66 $ 10.72 $ 12.02 $ 13.83
---------- ---------- ---------- ---------- ----------
Investment income--net*** .09 .11 .17 .25 .27
Realized and unrealized gain (loss)--net .86 1.65 3.10 (1.14) (.19)
---------- ---------- ---------- ---------- ----------
Total from investment operations .95 1.76 3.27 (.89) .08
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.25) (.38) (.33) (.40) (.20)
Realized gain--net (.18) -- -- (.01) (1.69)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.43) (.38) (.33) (.41) (1.89)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 15.56 $ 15.04 $ 13.66 $ 10.72 $ 12.02
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 6.35%++ 13.08% 31.03% (7.76%) .42%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver 1.86%* 1.90% 1.96% 1.96% 1.97%
========== ========== ========== ========== ==========
Expenses 1.93%* 1.96% 2.00% 2.00% 2.01%
========== ========== ========== ========== ==========
Investment income--net 1.17%* .78% 1.45% 2.10% 2.12%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $2,252,057 $1,698,382 $ 865,342 $ 521,679 $ 346,124
========== ========== ========== ========== ==========
Portfolio turnover 16.01% 42.58% 45.28% 58.42% 44.87%
========== ========== ========== ========== ==========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Financial Highlights (continued)
Class I
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of period $ 15.80 $ 14.31 $ 11.20 $ 12.53 $ 14.33
---------- ---------- ---------- ---------- ----------
Investment income--net*** .18 .27 .32 .38 .42
Realized and unrealized gain (loss)--net .90 1.72 3.23 (1.19) (.20)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.08 1.99 3.55 (.81) .22
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.32) (.50) (.44) (.51) (.33)
Realized gain--net (.18) -- -- (.01) (1.69)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.50) (.50) (.44) (.52) (2.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 16.38 $ 15.80 $ 14.31 $ 11.20 $ 12.53
========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 6.89%++ 14.21% 32.42% (6.83%) 1.52%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver .84%* .88% .94% .94% .94%
========== ========== ========== ========== ==========
Expenses .91%* .94% .97% .98% .98%
========== ========== ========== ========== ==========
Investment income--net 2.19%* 1.79% 2.55% 3.09% 3.14%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $2,254,343 $1,893,248 $1,370,866 $1,168,632 $1,284,915
========== ========== ========== ========== ==========
Portfolio turnover 16.01% 42.58% 45.28% 58.42% 44.87%
========== ========== ========== ========== ==========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Financial Highlights (concluded)
Class R
For the Six For the For the Period
Months Ended Year Ended January 3, 2003++
The following per share data and ratios have been derived April 30, October 31, to October 31,
from information provided in the financial statements. 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 15.44 $ 14.04 $ 11.43
------------ ------------ ------------
Investment income--net*** .14 .21 .08
Realized and unrealized gain--net .89 1.66 2.71
------------ ------------ ------------
Total from investment operations 1.03 1.87 2.79
------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.29) (.47) (.18)
Realized gain--net (.18) -- --
------------ ------------ ------------
Total dividends and distributions (.47) (.47) (.18)
------------ ------------ ------------
Net asset value, end of period $ 16.00 $ 15.44 $ 14.04
============ ============ ============
Total Investment Return**
Based on net asset value per share 6.71%++++ 13.60% 24.57%++++
============ ============ ============
Ratios to Average Net Assets
Expenses, net of waiver 1.34%* 1.38% 1.42%*
============ ============ ============
Expenses 1.41%* 1.45% 1.47%*
============ ============ ============
Investment income--net 1.69%* 1.35% 1.93%*
============ ============ ============
Supplemental Data
Net assets, end of period (in thousands) $ 36,618 $ 20,482 $ 341
============ ============ ============
Portfolio turnover 16.01% 42.58% 45.28%
============ ============ ============
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
++++ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Notes to Financial Statements
1. Significant Accounting Policies:
Merrill Lynch Global Allocation 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 U.S. generally accepted accounting principles, which may
require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect
all adjustments, which are, in the opinion of management, necessary to
present a fair statement of the results for the interim period. All such
adjustments are of a normal, recurring nature. The Fund offers multiple
classes of shares. Shares of Class A and Class I are sold with a front-end
sales charge. Shares of Class B and Class C may be subject to a contingent
deferred sales charge. Class R Shares are sold only to certain retirement
plans. All classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that Class A,
Class B, Class C and Class R Shares bear certain expenses related to the
account maintenance of such shares, and Class B, Class C and Class R Shares
also bear certain expenses related to the distribution of such shares. Each
class has exclusive voting rights with respect to matters relating to its
account maintenance and distribution expenditures (except that Class B
shareholders may vote on material changes to the Class A distribution
plan). Income, expenses (other than expenses attributable to a specific
class) and realized and unrealized gains 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--Debt securities are traded primarily in the
over-the-counter markets ("OTC") and are valued at the last available bid
price in the OTC market or on the basis of values obtained by a pricing
service. Pricing services use valuation matrixes that incorporate both
dealer-supplied valuations and valuation models. The procedures of the
pricing service and its valuations are reviewed by the officers of the Fund
under the general direction of the Board of Directors. Such valuations and
procedures will be reviewed periodically by the Board of Directors of the
Fund. Financial futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of such
exchanges. Options written or purchased are valued at the last sales price
in the case of exchange-traded options. In the case of options traded in
the OTC market, valuation is the last asked price (options written) or the
last bid price (options purchased). Swap agreements are valued by quoted
fair valuations received daily by the Fund from the counterparty. Short-
term investments with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value, under which method the
investment is valued at cost and any premium or discount is amortized on a
straight line basis to maturity. Repurchase agreements are valued at cost
plus accrued interest. Investments in open-end investment companies are
valued at their net asset value each business day. Securities and other
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.
Equity securities that are held by the Fund, which 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 asked
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 OTC market, Nasdaq Small Cap or
Bulletin Board are valued at the last available bid price 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 asked 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.
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of business on the New York Stock
Exchange ("NYSE"). The values of such securities used in computing the net
asset value of the Fund's shares are determined as of such times. Foreign
currency exchange rates also are generally determined prior to the close of
business on the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which
they are determined and the close of business on the NYSE that may not be
reflected in the computation of the Fund's net asset value. If events (for
example, a company announcement, market volatility or a natural disaster)
occur during such periods that are expected to materially affect the value
of such securities, those securities may be valued at their fair value as
determined in good faith by the Fund's Board of Directors or by the
Investment Adviser using a pricing service and/or procedures approved by
the Fund's Board of Directors.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Notes to Financial Statements (continued)
(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.
* 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 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.
* Options--The Fund may purchase and write covered call and put options.
When the Fund writes an option, an amount equal to the premium received by
the Fund is reflected as an asset and an equivalent liability. The amount
of the liability is subsequently marked-to-market to reflect the current
value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added
to (or deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option expires (or
the Fund enters into a closing transaction), the Fund realizes a gain or
loss on the option to the extent of the premiums received or paid (or gain
or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
* Financial futures contracts--The Fund may purchase or sell financial
futures contracts and options on such futures contracts. Futures contracts
are contracts for delayed delivery of securities at a specific future date
and at a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract,
the Fund agrees to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
* Swaps--The Fund may enter into swap agreements, which are over-the-
counter contracts in which the Fund and a counterparty agree to make
periodic net payments on a specified notional amount. The net payments can
be made for a set period of time or may be triggered by a pre-determined
credit event. The net periodic payments may be based on a fixed or variable
interest rate; the change in market value of a specified security, basket
of securities, or index; or the return generated by a security. These
periodic payments received or made by the Fund are recorded in the
accompanying Statement of Operations as realized gains or losses,
respectively. Gains or losses are also realized upon termination of the
swap agreements. Swaps are marked-to-market daily based on dealer-supplied
valuations and changes in value are recorded as unrealized appreciation
(depreciation). Risks include changes in the returns of the underlying
instruments, failure of the counterparties to perform under the contracts'
terms and the possible lack of liquidity with respect to the swap
agreements.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
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 on the accrual basis. The
Fund amortizes all premiums and discounts on debt securities.
(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 Plan
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 of .75%, on an annual basis, of the average daily value of the
Fund's net assets. MLIM has agreed to waive a portion of its fee payable by
the Fund so that such fee is reduced for average daily net assets of the
Fund in excess of $2.5 billion from the annual rate of .75% to .70%, from
..70% to .65% for average daily net assets in excess of $5 billion, from
..65% to .625% for average daily net assets in excess of $7.5 billion, and
from .625% to .60% for average daily net assets in excess of $10 billion.
For the six months ended April 30, 2005, MLIM earned fees of $38,059,250,
of which $3,574,232 was waived. 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 Plan 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 ALLOCATION FUND, INC., APRIL 30, 2005
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"), an affiliate of MLIM, 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 April 30, 2005, 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 $ 222,557 $2,983,163
Class I $ 7,264 $ 82,420
For the six months ended April 30, 2005, MLPF&S received contingent
deferred sales charges of $668,040 and $147,597 relating to transactions in
Class B and Class C Shares, respectively. Furthermore, MLPF&S received
contingent deferred sales charges of $684 relating to transactions subject
to front-end sales charge waivers in Class A.
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 April 30, 2005, the Fund lent securities with a value of
$5,770,750. 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
April 30, 2005, MLIM, LLC received $30,531 in securities lending agent
fees.
In addition, MLPF&S received $308,099 in commissions on the execution
of portfolio security transactions for the Fund for the six months ended
April 30, 2005.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co.,
is the Fund's transfer agent.
For the six months ended April 30, 2005, the Fund reimbursed MLIM $99,250
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 April 30, 2005 were $1,787,973,694 and $1,243,770,647,
respectively.
Transactions in call options written for the six months ended April 30, 2005
were as follows:
Number of Premiums
Contracts Received
Outstanding call options written,
beginning of period 177,498 $ 23,690,958
Options written 114,859 23,169,502
Options exercised (94,946) (12,320,512)
Options expired (35,689) (4,231,689)
Options closed (2,480) (84,317)
--------------- ---------------
Outstanding call options written,
end of period 159,242 $ 30,223,942
=============== ===============
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions was
$1,075,535,696 and $1,422,983,251, for the six months ended April 30, 2005
and the year ended October 31, 2004, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the
Six Months Ended Dollar
April 30, 2005 Shares Amount
Shares sold 22,025,392 $ 362,045,941
Automatic conversion of shares 13,735,415 226,523,572
Shares issued to shareholders
in reinvestment of dividends
and distributions 5,750,065 93,093,547
--------------- ---------------
Total issued 41,510,872 681,663,060
Shares redeemed (17,873,283) (293,992,127)
--------------- ---------------
Net increase 23,637,589 $ 387,670,933
=============== ===============
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Notes to Financial Statements (continued)
Class A Shares for the Year Dollar
Ended October 31, 2004 Shares Amount
Shares sold 29,413,964 $ 446,285,057
Automatic conversion of shares 25,674,787 391,158,919
Shares issued resulting from
reorganization 370,669 5,621,877
Shares issued to shareholders in
reinvestment of dividends 5,384,687 78,909,584
--------------- ---------------
Total issued 60,844,107 921,975,437
Shares redeemed (29,803,044) (453,494,611)
--------------- ---------------
Net increase 31,041,063 $ 468,480,826
=============== ===============
Class B Shares for the
Six Months Ended Dollar
April 30, 2005 Shares Amount
Shares sold 15,352,524 $ 247,464,068
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,152,504 50,124,809
--------------- ---------------
Total issued 18,505,028 297,588,877
--------------- ---------------
Automatic conversion of shares (14,010,727) (226,523,572)
Shares redeemed (11,704,028) (188,621,536)
--------------- ---------------
Total redeemed (25,714,755) (415,145,108)
--------------- ---------------
Net decrease (7,209,727) $ (117,556,231)
=============== ===============
Class B Shares for the Year Dollar
Ended October 31, 2004 Shares Amount
Shares sold 31,224,000 $ 464,115,619
Shares issued resulting from
reorganization 5,057,375 75,279,586
Shares issued to shareholders in
reinvestment of dividends 3,121,229 44,694,557
--------------- ---------------
Total issued 39,402,604 584,089,762
--------------- ---------------
Automatic conversion of shares (26,184,628) (391,158,919)
Shares redeemed (23,048,347) (342,963,009)
--------------- ---------------
Total redeemed (49,232,975) (734,121,928)
--------------- ---------------
Net decrease (9,830,371) $ (150,032,166)
=============== ===============
Class C Shares for the
Six Months Ended Dollar
April 30, 2005 Shares Amount
Shares sold 36,257,061 $ 568,977,250
Shares issued to shareholders in
reinvestment of dividends and
distributions 2,944,387 45,549,662
--------------- ---------------
Total issued 39,201,448 614,526,912
Shares redeemed (7,429,327) (116,461,773)
--------------- ---------------
Net increase 31,772,121 $ 498,065,139
=============== ===============
Class C Shares for the Year Dollar
Ended October 31, 2004 Shares Amount
Shares sold 55,170,866 $ 801,189,226
Shares issued resulting from
reorganization 2,102,491 30,484,584
Shares issued to shareholders in
reinvestment of dividends 1,792,271 25,154,700
--------------- ---------------
Total issued 59,065,628 856,828,510
Shares redeemed (9,466,353) (137,495,407)
--------------- ---------------
Net increase 49,599,275 $ 719,333,103
=============== ===============
Class I Shares for the
Six Months Ended Dollar
April 30, 2005 Shares Amount
Shares sold 23,719,585 $ 390,902,661
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,272,348 53,110,212
--------------- ---------------
Total issued 26,991,933 444,012,873
Shares redeemed (9,232,163) (152,176,410)
--------------- ---------------
Net increase 17,759,770 $ 291,836,463
=============== ===============
Class I Shares for the Year Dollar
Ended October 31, 2004 Shares Amount
Shares sold 37,884,864 $ 578,373,183
Shares issued resulting from
reorganization 111,983 1,702,701
Shares issued to shareholders in
reinvestment of dividends 2,990,700 44,006,866
--------------- ---------------
Total issued 40,987,547 624,082,750
Shares redeemed (16,960,674) (258,457,830)
--------------- ---------------
Net increase 24,026,873 $ 365,624,920
=============== ===============
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Notes to Financial Statements (concluded)
Class R Shares for the
Six Months Ended Dollar
April 30, 2005 Shares Amount
Shares sold 1,460,749 $ 23,587,434
Shares issued to shareholders in
reinvestment of dividends and
distributions 44,804 711,032
--------------- ---------------
Total issued 1,505,553 24,298,466
Shares redeemed (542,560) (8,779,074)
--------------- ---------------
Net increase 962,993 $ 15,519,392
=============== ===============
Class R Shares for the Year Dollar
Ended October 31, 2004 Shares Amount
Shares sold 1,726,216 $ 25,964,499
Shares issued to shareholders in
reinvestment of dividends 9,241 136,575
--------------- ---------------
Total issued 1,735,457 26,101,074
Shares redeemed (433,525) (6,524,506)
--------------- ---------------
Net increase 1,301,932 $ 19,576,568
=============== ===============
The Fund charges a 2% redemption fee on the proceeds (calculated at market
value) of a redemption (either by sale or exchange) of Fund shares made
within 30 days of purchase. The redemption fee is paid to the Fund and is
intended to offset the trading costs, market impact and other costs
associated with short-term trading into and out of the Fund.
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 a group of 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 defined in the credit agreement. The Fund did not
borrow under the credit agreement during the six months ended April 30,
2005. On November 26, 2004, the credit agreement was renewed for one year
under substantially the same terms.
6. Commitments:
At April 30, 2005, the Fund had entered into foreign exchange contracts
under which it had agreed to purchase various foreign currencies with an
approximate value of $4,876,000.
7. Capital Loss Carryforward:
On October 31, 2004, the Fund had a net capital loss carryforward of
$28,584,329, of which $21,351,156 expires in 2008, $5,337,789 expires in
2009 and $1,895,384 expires in 2010. This amount will be available to
offset like amounts of any future taxable gains.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Officers and Directors
Robert C. Doll, Jr., President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Donald C. Burke, Vice President and Treasurer
Dennis W. Stattman, Vice President and
Senior Portfolio Manager
Jeffrey Hiller, Chief Compliance Officer
Alice A. Pellegrino, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109-3661
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-637-3863
Effective January 1, 2005, Terry K. Glenn, President and Director and Kevin
A. Ryan, Director of Merrill Lynch Global Allocation Fund, Inc. retired.
The Fund's Board of Directors wishes Messrs. Glenn and Ryan well in their
retirements.
Effective January 1, 2005, Robert C. Doll, Jr. became President and
Director of the Fund.
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC., APRIL 30, 2005
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Fund's Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
Electronic Delivery
The Fund offers electronic delivery of communications to its shareholders.
In order to receive this service, you must register your account and
provide us with e-mail information. To sign up for this service, simply
access this Web site at 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 ALLOCATION FUND, INC., APRIL 30, 2005
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 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not
Applicable
Item 11 - Controls and Procedures
11(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.
11(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 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(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 Allocation Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
Merrill Lynch Global Allocation Fund, Inc.
Date: June 20, 2005
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/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
Merrill Lynch Global Allocation Fund, Inc.
Date: June 20, 2005
By: /s/ Donald C. Burke
-------------------------------
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch Global Allocation Fund, Inc.
Date: June 20, 2005