UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-02556
Name of Fund: Merrill Lynch Ready Assets Trust
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 Ready Assets Trust, 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: 12/31/05
Date of reporting period: 01/01/05 - 12/31/05
Item 1 - Report to Stockholders
Merrill Lynch
Ready Assets Trust
Annual Report
December 31, 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 Trust unless accompanied or preceded by the
Trust's current prospectus. Past performance results shown in this report
should not be considered a representation of future performance, which will
fluctuate. An investment in the Trust is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Trust seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Trust. Refer to www.mlim.ml.com
to obtain performance data current to the most recent month-end. Statements
and other information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-637-3863; (2) at
www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Trust voted proxies
relating to securities held in the Trust'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 Ready Assets Trust
Box 9011
Princeton, NJ
08543-9011
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Merrill Lynch Ready Assets Trust
Availability of Quarterly Schedule of Investments
The Trust 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 Trust's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Trust'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 Trust 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 READY ASSETS TRUST DECEMBER 31, 2005
A Letter From the President
Dear Shareholder
On balance, 2005 was a year of "muddling through" for the U.S. financial
markets, as oil prices reached new record highs, the Federal Reserve Board
(the Fed) increased the target federal funds rate from 2.25% to 4.25%, the
housing market and the consumer finally showed some signs of slowing, and
Hurricanes Katrina and Rita ravaged the Gulf Coast, causing yet untold
economic damage.
Although they struggled, stocks managed to post their third straight year of
positive performance. The year was equally uncertain for fixed income
markets, which were bemused by a flattening yield curve and a number of
significant credit events that brought a slowdown in high yield market
returns. Notably, the one-year results for the major asset classes - stocks,
bonds and cash - were the closest they have been in more than 100 years. For
the 12- and six-month periods ended December 31, 2005, most of the major
market indexes managed to land in positive territory:
Total Returns as of December 31, 2005 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) + 5.77% + 4.91%
Small-cap U.S. equities (Russell 2000 Index) + 5.88 + 4.55
International equities (MSCI Europe Australasia Far East Index) +14.88 +13.54
Fixed income (Lehman Brothers Aggregate Bond Index) - 0.08 + 2.43
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.60 + 3.51
High yield bonds (Credit Suisse First Boston High Yield Index) + 1.48 + 2.26
In hindsight, these numbers are reasonably good given the headwinds facing
the markets in 2005. U.S. equities found support in strong corporate
earnings, low core inflation and healthy company balance sheets. Strength in
the global economy and non-U.S. equity markets helped, as did robust dividend-
distribution, share-buyback and merger-and-acquisition activity. International
stocks had an excellent year, with many markets benefiting from strong economic
statistics, trade surpluses and solid finances. In the U.S. bond market,
long-term yields remained low and, at year-end, the Treasury curve appeared
ready to invert.
As 2006 begins, the largest question marks center on the Fed's future moves,
the U.S. consumer's ability (or inability) to continue spending, the direction
of the U.S. dollar following a year of appreciation and the potential for
continued strong economic and corporate earnings growth. As you turn the
calendar and consider how these factors might impact your investments, remember
that the new year is a good time to meet with your financial advisor to review
your financial goals, and to make portfolio changes where necessary. For
investing insights and timely "food for thought" for investors, we also invite
you to visit Shareholder magazine at www.mlim.ml.com/shareholdermagazine.
As always, we thank you for trusting Merrill Lynch Investment Managers with
your investment assets, and we look forward to serving you in the new year
and beyond.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Trustee
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
A Discussion With Your Fund's Portfolio Manager
We maintained a relatively conservative approach for much of the year as the
Fed continued to increase short-term interest rates, but are prepared to
adjust our strategy as the end of monetary tightening nears.
How did the Trust perform during the fiscal year in light of the existing
market conditions?
For the 12-month period ended December 31, 2005, Merrill Lynch Ready Assets
Trust paid shareholders a net annualized dividend of 2.57%. For the six-month
period ended December 31, 2005, the Trust paid shareholders a net annualized
dividend of 3.10%. At December 31, 2005, Ready Assets Trust had a seven-day
yield of 3.57%.
The Trust's average portfolio maturity at December 31, 2005 was 59 days,
compared to 60 days at June 30, 2005 and 52 days at December 31, 2004. The
average portfolio maturity ranged from a high of 67 days to a low of 44 days
during the fiscal year.
The economy remained quite resilient throughout the period, growing at an
annualized rate of 3.5% in the first quarter of 2005, 3.3% in the second
quarter and 4.1% in the third quarter (as measured by gross domestic product).
In light of the perceived economic strength, and in an effort to combat
inflation expectations, the Federal Reserve Board (the Fed) continued its
"measured" series of interest rate hikes. In all, the Fed raised rates in 25
basis point (.25%) increments eight times during the year, bringing the
federal funds rate to 4.25% at period-end.
Oil remained a hot topic for much of the period, although there was often
disagreement among market participants as to whether a $20 per barrel increase
in the price of oil posed a greater risk of inflation or a greater threat to
consumer spending. Consumer sentiment figures grew weaker as oil prices rose,
but Fed officials consistently warned that higher crude prices were sure to
result in pricing pressures. This supported their rate increases throughout
the year. Over the past 12 months, the two-year Treasury yield rose 133 basis
points from 3.08% to 4.41% as the 10-year Treasury yield rose just 15 basis
points from 4.24% to 4.39%. The result was a flattening of the yield curve.
Despite this dynamic, the steepness of the yield curve in the front end
offered enticing value. The greatest value seemed to be in the six-month, nine-
month and 12-month sectors. We were able to add higher yields to the portfolio
while still maintaining a relatively short average duration. This allowed us
to be constructive while limiting our interest rate exposure, an approach we
thought was prudent given the expectation for continued interest rate hikes.
How did you manage the portfolio during the fiscal year?
For the most part, we sought to add incremental yield and total return
potential to the portfolio by shifting our focus among maturities based on the
relative steepness of the yield curve in various sectors. As the year began,
our investment strategy was formulated on the premise that the Fed would
continue to advance its program of measured interest rate increases. We
primarily invested in 30-day commercial paper and floating rate securities in
an effort to maximize our ability to respond to higher short-term interest
rates. Floating rate securities, because their interest rates continuously
reset, provide protection in a rising interest rate environment.
At the mid-point of the fiscal year, our floating rate position represented
approximately 55% of portfolio assets. This was reduced to 46% by period-end
as the continued tightening of credit spreads made this asset class very
expensive. This was a result of increased demand but, even more so, was due to
a slowdown in agency issuance. New regulations forced the Federal National
Mortgage Association (Fannie Mae) to reduce its balance sheet. The fewer
mortgages Fannie Mae was permitted to own, the less borrowing it needed to do
in order to fund its holdings. Thus, discount notes outstanding, which had
been the agencies' primary tool of issuance, dipped significantly. With all of
this supply now missing from the market, spreads on short-term agency debt
collapsed. As we trimmed exposure to variable rate issues, the assets were
reallocated mostly to short-dated commercial paper and certificates of
deposit. This allowed us to maintain a shorter average duration and sustain
ample liquidity. Having significant overnight positions in a rising interest
rate environment proves beneficial because it is the most effective way to
meet redemptions while also allowing us to capitalize immediately when the Fed
raises interest rates.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
With the remainder of the portfolio, we searched for sectors that were
attractively priced given the expectation for continued Fed interest rate
hikes. The two-year sector appeared quite expensive for much of the year,
while shorter sectors such as six months and 12 months offered much greater
value. Securities in this range offered attractive yields given the relative
steepness of the yield curve in the front end. Thus, our efforts to add
incremental yield to the portfolio were concentrated on these sectors for a
majority of the time, while we continued to target an average portfolio
duration in the somewhat conservative 60-day range.
As the Trust's fiscal period neared an end, we focused on liquidity in
anticipation of the cyclical year-end redemptions that normally occur as
shareholders require liquidity for consumer spending. In order to meet our
liquidity needs, we favored shorter-dated commercial paper with maturities of
three months or less.
How would you characterize the Trust's position at the close of the period?
Although Hurricanes Katrina and Rita seemed to pose a legitimate threat to
economic growth, the fixed income markets dismissed this as a temporary shock.
It seems the economy is strong enough to absorb a brief slowdown, and the
combination of lofty oil prices and the rebuilding efforts in the Gulf Coast
region may justify even higher rates. In fact, as the period came to an end,
the markets appeared resigned to the idea that short-term interest rates will
move higher, at least until Dr. Ben Bernanke assumes his role as Fed Chairman
on January 31, and probably afterward if the new chairman feels the need to
establish his inflation-fighting credentials.
In the near term, we expect to keep the Trust's average portfolio maturity in
the 55-day - 60-day range, with most investments in the one-month - two-month
sector. However, once the Fed has communicated to the markets that "neutral"
policy has been achieved, we would expect the spread between the federal funds
rate and the two-year Treasury yield, which is typically positively sloped, to
invert. We will look to reposition the portfolio prior to this occurrence.
Specifically, we would look to barbell the portfolio, purchasing six-month
money market securities on the shorter end of the barbell and two-year
Treasury issues on the longer end.
The portfolio's composition, as a percent of net assets, at the end of
December and as of our last report to shareholders is detailed below:
12/31/05 6/30/05
Bank Notes 1.1% --
Certificates of Deposit -- 0.6%
Certificates of Deposit--European 3.8 6.5
Certificates of Deposit--Yankee* 11.0 6.9
Commercial Paper 37.4 28.3
Corporate Notes 25.4 19.2
Funding Agreements 4.4 4.2
Repurchase Agreements 3.3 1.9
U.S. Government, Agency &
Instrumentality Obligations--
Non-Discount 12.7 32.4
Other Assets Less Liabilities 0.9 --++
------ ------
Total 100.0% 100.0%
====== ======
* U.S. branches of foreign banks.
++ Amount is less than 0.1%.
Donaldo S. Benito
Vice President and Portfolio Manager
January 5, 2006
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Disclosure of Expenses
Shareholders of this Trust 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 12b-1 fees, and other Trust expenses. The following example (which
is based on a hypothetical investment of $1,000 invested on July 1, 2005 and
held through December 31, 2005) is intended to assist shareholders both in
calculating expenses based on an investment in the Trust 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 Trust'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 Trust 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 July 1, 2005 to
July 1, December 31, December 31,
2005 2005 2005
Actual
Merrill Lynch Ready Assets Trust $1,000 $1,015.50 $3.44
Hypothetical (5% annual return before expenses)**
Merrill Lynch Ready Assets Trust $1,000 $1,022.09 $3.45
* Expenses are equal to the Trust's annualized expense ratio of .67% multiplied by the average
account value over the period, multiplied by 186/365 (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 READY ASSETS TRUST DECEMBER 31, 2005
Schedule of Investments (In Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
Bank Notes--1.1%
Bank of America, $ 21,000 4.31(a)% 8/10/2006 $ 21,000
NA
U.S. Bank, NA 25,000 4.23(a) 7/28/2006 25,004
Total Bank Notes
(Cost--$46,004) 46,004
Certificates of Deposit--European--3.8%
BNP Paribas, 32,000 4.395 10/04/2006 31,906
London
Barclays Bank 27,000 4.05 3/27/2006 26,900
Plc, London 10,000 4.06 7/25/2006 9,963
Calyon, London 25,000 3.60 4/10/2006 24,922
35,000 3.86 7/05/2006 34,890
22,000 4.365 10/03/2006 21,931
Total Certificates of Deposit--European
(Cost--$151,000) 150,512
Certificates of Deposit--Yankee--11.0%
Barclays Bank 24,000 4.313(a) 6/21/2006 23,998
Plc, NY 53,000 4.329(a) 8/30/2006 52,993
Calyon NY 27,000 4.80 12/27/2006 27,001
Canadian Imperial 39,000 3.995(a) 4/04/2006 38,993
Bank of Commerce, 27,000 4.75 12/05/2006 26,986
NY 56,000 4.429(a) 1/15/2007 56,000
HBOS Treasury 10,000 3.15 1/18/2006 9,995
Services Plc, NY 25,000 3.845 6/30/2006 24,895
Royal Bank of 32,000 4.315(a) 11/16/2006 31,997
Scotland, NY
Swedbank, NY 40,000 3.425 3/27/2006 40,000
Toronto-Dominion 25,000 3.75 6/21/2006 24,887
Bank, NY 25,000 3.95 7/24/2006 24,892
30,000 3.795 7/28/2006 29,842
25,000 3.94 7/31/2006 24,887
Total Certificates of Deposit--Yankee
(Cost--$437,985) 437,366
Commercial Paper--37.4%
Amstel Funding 50,000 4.04 1/11/2006 49,954
Corp. 25,000 4.30 2/06/2006 24,899
19,000 4.32 2/28/2006 18,872
Amsterdam 15,000 4.19 1/09/2006 14,989
Funding Corp.
Aspen Funding 27,000 4.095 1/24/2006 26,935
Corp. 40,000 4.40 3/17/2006 39,640
Barclays U.S. 27,000 4.31 2/28/2006 26,821
Funding Corp.
Barton Capital, 45,000 4.16 1/05/2006 44,990
LLC 47,505 4.17 1/12/2006 47,455
Bryant Park 20,000 4.31 1/17/2006 19,966
Funding, LLC 40,166 4.31 1/18/2006 40,094
35,000 4.22 1/19/2006 34,934
CAFCO, LLC 15,000 4.31 2/07/2006 14,937
15,000 4.36 2/15/2006 14,922
Face Interest Maturity
Issue Amount Rate* Date Value
Commercial Paper (concluded)
CRC Funding, $ 40,000 4.19 % 1/10/2006 $ 39,967
LLC 27,000 4.07 1/17/2006 26,956
Chariot Funding, 20,000 4.34 2/07/2006 19,915
LLC
Compass 16,000 4.23 1/19/2006 15,970
Securitization, LLC 9,000 4.35 1/23/2006 8,978
DNB NOR Bank 41,000 4.12 1/26/2006 40,894
ASA
Dorada Finance 16,000 4.40 3/06/2006 15,878
Inc.
FCAR Owner Trust 40,000 4.07 1/17/2006 39,935
13,000 4.11 1/19/2006 12,977
11,000 4.41 3/15/2006 10,904
Grampian 28,000 4.06 1/18/2006 27,953
Funding Ltd. 37,000 4.27 2/22/2006 36,788
Greyhawk 50,000 4.16 1/09/2006 49,965
Funding, LLC 41,000 4.10 1/23/2006 40,906
39,000 4.11 1/24/2006 38,906
HBOS Treasury 60,000 4.21 2/13/2006 59,710
Services Plc
IXIS Commercial 27,000 4.08 1/23/2006 26,939
Paper Corp.
Jupiter 35,000 4.34 2/01/2006 34,878
Securitization 13,000 4.40 3/20/2006 12,877
Corp.
Morgan Stanley 18,500 4.33(a) 2/21/2006 18,500
21,000 4.33(a) 3/03/2006 21,000
11,500 4.33(a) 3/07/2006 11,500
New Center Asset 40,000 4.39 2/17/2006 39,781
Trust 30,000 4.39 2/21/2006 29,821
20,000 4.33 2/23/2006 19,877
Newport Funding 7,000 4.08 1/19/2006 6,988
Corp. 20,000 4.08 1/20/2006 19,962
27,000 4.31 1/25/2006 26,929
9,000 4.33 2/02/2006 8,968
35,000 4.22 2/13/2006 34,828
37,000 4.24 2/16/2006 36,811
Santander Central 32,000 3.95 3/22/2006 31,694
Hispano Finance,
Inc.
Sheffield 25,000 4.22 1/03/2006 25,000
Receivables Corp. 15,000 4.30 2/07/2006 14,937
Skandinaviska 50,000 4.34(a) 1/23/2006 50,000
Ensklida Banken
AB
Solitaire 20,000 4.23 1/31/2006 19,934
Funding LLC
Spintab AB 32,000 3.92 2/27/2006 31,789
Surrey Funding 10,000 4.18 1/11/2006 9,991
Corp.
Windmill 20,000 4.30 1/10/2006 19,983
Funding Corp. 31,000 4.30 2/10/2006 30,864
Total Commercial Paper
(Cost--$1,489,911) 1,489,861
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Schedule of Investments (continued) (In Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
Corporate Notes--25.4%
ANZ National $ 27,000 4.311(a)% 12/29/2006 $ 27,000
(International),
Ltd.
ASIF Global 15,000 4.38(a) 1/23/2007 15,000
Financing XXX
American Honda 9,000 4.224(a) 1/20/2006 9,000
Finance Corp. 16,000 4.42(a) 2/21/2006 16,002
48,000 4.075(a) 7/10/2006 47,991
24,250 4.65(a) 9/11/2006 24,282
Bank of Ireland 12,000 4.34(a) 1/19/2007 12,000
Blue Heron 21,000 4.409(a) 2/22/2006 21,000
Funding IX, Class A
CC (USA) Inc. 25,000 3.75 4/21/2006 24,925
(Centauri) 26,000 4.318(a) 5/12/2006 26,000
75,000 4.31(a) 11/17/2006 74,998
Citigroup, Inc. 39,000 4.193(a) 1/12/2007 39,039
General Electric 50,000 4.47(a) 1/17/2007 50,000
Capital Corp.
Goldman Sachs 51,700 4.389(a) 1/15/2007 51,700
Group, Inc.
HSBC Finance 40,000 4.266(a) 10/27/2006 40,035
Inc. 39,000 4.369(a) 1/24/2007 39,000
JP Morgan 100,710 4.601(a) 9/15/2006 100,823
Chase & Co.
MetLife Global 16,500 4.31(a) 1/06/2007 16,500
Funding I 11,500 4.429(a) 1/15/2007 11,500
Nationwide 13,000 4.579(a) 1/26/2007 13,005
Building Society
Northern Rock Plc 21,500 4.53(a) 1/09/2007 21,500
Permanent 30,000 4.32(a) 3/10/2006 30,000
Financing (No. 7)
Plc
Permanent 30,000 4.32(a) 6/12/2006 30,000
Financing (No. 8)
Plc
Procter & 33,500 4.45(a) 1/10/2007 33,500
Gamble Co.
Sigma Finance 102,000 4.32(a) 3/21/2006 101,998
Inc. 48,000 4.32(a) 5/19/2006 47,999
24,500 4.31(a) 9/22/2006 24,498
Stanfield Victoria 15,300 4.32(a) 5/15/2006 15,299
Funding LLC
Westpac Banking 11,000 4.49(a) 1/11/2007 11,002
Corp.
White Pine 37,000 4.315(a) 10/12/2006 36,997
Finance LLC
Total Corporate Notes
(Cost--$1,012,648) 1,012,593
Face Interest Maturity
Issue Amount Rate* Date Value
Funding Agreements--4.4%
Jackson National $ 86,000 4.371(a)% 5/01/2006 $ 86,000
Life Insurance
Co. (b)
Metropolitan Life 20,000 4.391(a) 4/03/2006 20,000
Insurance Co. (b)
Monumental Life 20,000 4.436(a) 11/16/2006 20,000
Insurance Co. (b)
New York Life 30,000 4.445(a) 5/26/2006 30,000
Insurance Co. (b) 20,000 4.391(a) 10/18/2006 20,000
Total Funding Agreements
(Cost--$176,000) 176,000
U.S. Government Agency & Instrumentality
Obligations--Non-Discount--12.7%
Fannie Mae 12,000 2.25 2/17/2006 11,969
6,410 1.80 4/20/2006 6,357
8,550 2.55 6/01/2006 8,470
7,200 1.98 6/26/2006 7,109
10,000 4.00 8/08/2006 9,963
10,000 3.00 9/20/2006 9,883
Federal Farm 19,000 4.29(a) 2/21/2006 18,999
Credit Banks 22,000 4.29(a) 5/19/2006 21,998
9,500 2.15 7/21/2006 9,374
25,000 4.30(a) 8/16/2006 25,000
74,000 4.29(a) 12/22/2006 73,993
13,000 4.32(a) 2/20/2008 12,997
Federal Home 12,935 2.40 5/03/2006 12,839
Loan Bank 50,000 4.195(a) 5/10/2006 49,993
System 25,000 4.25(a) 5/19/2006 24,999
37,000 4.29(a) 6/01/2006 36,994
5,000 2.25 6/23/2006 4,944
36,000 4.26(a) 8/21/2006 35,986
15,000 3.25 11/29/2006 14,803
7,000 3.75 11/30/2006 6,938
12,500 3.45 1/10/2007 12,337
10,000 4.00 6/13/2007 9,883
5,300 4.21 9/14/2007 5,250
12,000 4.85 11/09/2007 12,001
Freddie Mac 15,000 2.15 1/30/2006 14,977
1,490 2.15 2/17/2006 1,486
12,500 3.82 7/14/2006 12,445
13,000 4.45 9/28/2007 12,864
10,700 4.705 10/11/2007 10,664
11,000 4.75 10/24/2007 10,970
Total U.S. Government Agency &
Instrumentality Obligations--
Non-Discount (Cost--$507,909) 506,485
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
Face
Amount Issue Value
Repurchase Agreements--3.3%
$130,702 UBS Securities LLC, purchased on 12/30/2005 to yield
4.27% to 1/03/2006, repurchase price of $130,764,
collateralized by Fannie Mae, 4.625% due 10/15/2013 and
Freddie Mac, 4.625% due 12/19/2008 $ 130,702
Total Repurchase Agreements (Cost--$130,702) 130,702
Total Investments (Cost--$3,952,159**)--99.1% 3,949,523
Other Assets Less Liabilities--0.9% 34,246
----------
Net Assets--100.0% $3,983,769
==========
* Commercial Paper and certain U.S. Government Agency & Instrumentality
Obligations are traded on a discount basis; the interest rates shown
reflect the discount rates paid at the time of purchase. Other
securities bear interest at the rates shown, payable at fixed dates
or upon maturity. Interest rates on variable rate securities are
adjustable periodically based upon appropriate indexes. The interest
rates shown are the rates in effect at December 31, 2005.
** The cost and unrealized appreciation (depreciation) of investments as
of December 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 3,952,159
==============
Gross unrealized appreciation $ 58
Gross unrealized depreciation (2,694)
--------------
Net unrealized depreciation $ (2,636)
==============
(a) Floating rate notes.
(b) Restricted securities as to resale, representing 4.4% of net assets,
were as follows:
Acquisition
Issue Date Cost Value
Jackson National Life Insurance Co., 4.371% due 5/01/2006 5/02/2005 $ 86,000 $ 86,000
Metropolitan Life Insurance Co., 4.391% due 4/03/2006 4/01/2005 20,000 20,000
Monumental Life Insurance Co., 4.436% due 11/16/2006 11/18/2005 20,000 20,000
New York Life Insurance Co.:
4.445% due 5/26/2006 5/27/2005 30,000 30,000
4.391% due 10/18/2006 10/19/2005 20,000 20,000
------------ ------------
Total $ 176,000 $ 176,000
============ ============
See Notes to Financial Statements.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Statement of Assets and Liabilities
As of December 31, 2005
Assets
Investments in unaffiliated securities, at value (identified cost--$3,952,158,675) $ 3,949,522,878
Cash 9,721
Receivables:
Beneficial interest sold $ 43,254,949
Interest 15,695,698 58,950,647
---------------
Prepaid expenses and other assets 176,393
---------------
Total assets 4,008,659,639
---------------
Liabilities
Payables:
Beneficial interest redeemed 21,593,198
Other affiliates 1,347,157
Investment adviser 1,193,236
Distributor 602,770 24,736,361
---------------
Accrued expenses and other liabilities 154,316
---------------
Total liabilities 24,890,677
---------------
Net Assets
Net assets $ 3,983,768,962
===============
Net Assets Consist of
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $ 398,640,476
Paid-in capital in excess of par 3,587,764,283
Unrealized depreciation--net (2,635,797)
---------------
Net Assets--Equivalent to $1.00 per share based on 3,986,404,758 shares of beneficial
interest outstanding $ 3,983,768,962
===============
See Notes to Financial Statements.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Statement of Operations
For the Year Ended December 31, 2005
Investment Income
Interest and amortization of premium and discount earned $ 134,769,969
Expenses
Investment advisory fees $ 15,609,428
Transfer agent fees 6,325,279
Distribution fees 4,451,278
Accounting services 574,779
Printing and shareholder reports 196,416
Custodian fees 107,654
Trustees' fees and expenses 87,031
Professional fees 82,160
Registration fees 62,768
Pricing services 14,221
Other 79,958
---------------
Total expenses 27,590,972
---------------
Investment income--net 107,178,997
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain on investments--net 121
Change in unrealized depreciation--net (41,003)
---------------
Total realized and unrealized loss--net (40,882)
---------------
Net Increase in Net Assets Resulting from Operations $ 107,138,115
===============
See Notes to Financial Statements.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Statements of Changes in Net Assets
For the Year Ended
December 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 107,178,997 $ 37,420,584
Realized gain--net 121 119,785
Change in unrealized depreciation--net (41,003) (3,573,903)
--------------- ---------------
Net increase in net assets resulting from operations 107,138,115 33,966,466
--------------- ---------------
Dividends & Distributions to Shareholders
Investment income--net (107,178,997) (37,420,584)
Realized gain--net (121) (119,785)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
shareholders (107,179,118) (37,540,369)
--------------- ---------------
Beneficial Interest Transactions
Net proceeds from sale of shares 5,795,069,803 6,280,350,275
Value of shares issued to shareholders in reinvestment of dividends and
distributions 107,181,785 37,533,122
--------------- ---------------
5,902,251,588 6,317,883,397
Cost of shares redeemed (6,204,025,993) (6,739,428,612)
--------------- ---------------
Net decrease in net assets derived from beneficial interest transactions (301,774,405) (421,545,215)
--------------- ---------------
Net Assets
Total decrease in net assets (301,815,408) (425,119,118)
Beginning of year 4,285,584,370 4,710,703,488
--------------- ---------------
End of year $ 3,983,768,962 $ 4,285,584,370
=============== ===============
See Notes to Financial Statements.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Financial Highlights
The following per share data and ratios have been derived For the Year Ended December 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .0258 .0082 .0068 .0139 .0381
Realized and unrealized gain (loss)--net --++ (.0008) (.0006) (.0005) .0015
---------- ---------- ---------- ---------- ----------
Total from investment operations .0258 .0074 .0062 .0134 .0396
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0258) (.0082) (.0068) (.0139) (.0381)
Realized gain--net --++ --++ (.0001) (.0001) (.0002)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0258) (.0082) (.0069) (.0140) (.0383)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.61% .83% .67% 1.40% 3.81%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses .66% .64% .63% .62% .63%
========== ========== ========== ========== ==========
Investment income and realized gain--net 2.57% .81% .69% 1.40% 3.82%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $3,983,769 $4,285,584 $4,710,703 $5,336,209 $6,003,955
========== ========== ========== ========== ==========
++ Amount is less than $(.0001) per share.
See Notes to Financial Statements.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Notes to Financial Statements
1. Significant Accounting Policies:
Merrill Lynch Ready Assets Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Trust'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. The following is a summary of significant
accounting policies followed by the Trust.
(a) Valuation of investments--Portfolio securities with remaining maturities
of greater than sixty days, for which market quotations are readily available,
are valued at market value. As securities transition from sixty-one to sixty
days to maturity, the difference between the valuation existing on the sixty-
first day before maturity and maturity value is amortized on a straight-line
basis to maturity. Securities maturing sixty days or less from their date of
acquisition are valued at amortized cost, which approximates market value. For
purposes of valuation, the maturity of a variable rate security is deemed to
be the next coupon date on which the interest rate is to be adjusted. Other
investments and assets for which market quotations are not available are
valued at fair value as determined in good faith by or under the direction of
the Board of Trustees.
(b) Repurchase agreements--The Trust may invest in U.S. government securities
pursuant to repurchase agreements. Under such agreements, the counterparty
agrees to repurchase the security at a mutually agreed upon time and price.
The Trust takes possession of the underlying securities, marks-to-market such
securities and, if necessary, receives additions to such securities daily to
ensure that the contract is fully collateralized. If the counterparty defaults
and the fair value of the collateral declines, liquidation of the collateral
by the Trust may be delayed or limited.
(c) Income taxes--It is the Trust'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.
(d) 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. Interest income (including amortization of premium and
discount) is recognized on the accrual basis.
(e) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(f) Dividends and distributions to shareholders--The Trust declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
backup withholding tax) in additional shares of beneficial interest at net
asset value. Dividends are declared from net investment income and
distributions from net realized gain or loss on investments.
(g) Securities lending--The Trust 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 Trust and any additional required collateral is delivered to
the Trust on the next business day. Where the Trust receives securities as
collateral for the loaned securities, it receives a fee from the borrower. The
Trust typically receives the income on the loaned securities, but does not
receive the income on the collateral. Where the Trust 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 Trust 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 Trust
could experience delays and costs in gaining access to the collateral. The
Trust 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.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Notes to Financial Statements (concluded)
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust 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 Trust 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 provides the Trust with investment management, research, statistical and
advisory services, and pays certain other expenses of the Trust. For such
services, the Trust pays a monthly fee based upon the average daily value of
the Trust's net assets at the following annual rates:
Portion of average daily value of net assets: Rate
Not exceeding $500 million .500%
In excess of $500 million but not exceeding $1 billion .400%
In excess of $1 billion but not exceeding $5 billion .350%
In excess of $5 billion but not exceeding $10 billion .325%
In excess of $10 billion but not exceeding $15 billion .300%
In excess of $15 billion but not exceeding $20 billion .275%
In excess of $20 billion .250%
Pursuant to the Distribution and Shareholder Servicing Plan in compliance with
Rule 12b-1 under the Investment Company Act of 1940, Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), an affiliate of MLIM, receives a
distribution fee from the Trust. The fee is accrued daily and paid monthly at
the annual rate of .125% of average daily net assets of the Trust for
shareholders whose Trust accounts are serviced by MLPF&S financial advisors,
whether maintained through MLPF&S or directly with the Trust's transfer agent.
The distribution fee is to compensate MLPF&S for providing, or arranging for
the provision of, account maintenance and sales and promotional activities and
services with respect to shares of the Trust. For the year ended December 31,
2005, MLPF&S earned $4,451,278 under the Shareholder Servicing Plan.
The Trust has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to MLPF&S or its
affiliates. Pursuant to that order, the Trust 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 Trust, invest
cash collateral received by the Trust 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 year ended December 31, 2005, the Trust reimbursed MLIM $94,501 for
certain accounting services.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co.,
is the Trust's transfer agent.
Certain officers and/or trustees of the Trust are officers and/or directors of
MLIM, FDS, PSI, FAMD, ML & Co., and/or MLIM, LLC.
3. Shares of Beneficial Interest:
The number of shares sold, reinvested and redeemed during the years
corresponds to the amounts included in the Statements of Changes in Net Assets
for net proceeds from sale of shares, value of shares reinvested and cost of
shares redeemed, respectively, since shares are recorded at $1.00 per share.
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended December
31, 2005 and December 31, 2004 was as follows:
12/31/2005 12/31/2004
Distributions paid from:
Ordinary income $ 107,179,118 $ 37,532,952
Net long-term capital gains -- 7,417
-------------- --------------
Total taxable distributions $ 107,179,118 $ 37,540,369
============== ==============
As of December 31, 2005, the components of accumulated losses on a tax
basis were as follows:
Undistributed ordinary income--net $ 24,296
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 24,296
Capital loss carryforward --
Unrealized losses--net (2,660,093)*
--------------
Total accumulated losses--net $ (2,635,797)
==============
* The difference between book-basis and tax-basis net unrealized
losses is attributable primarily to the deferral of post-October
capital losses for tax purposes.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of
Merrill Lynch Ready Assets Trust:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Merrill Lynch Ready Assets Trust as
of December 31, 2005, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Trust is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Trust's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of December 31, 2005
by correspondence with the custodian. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Merrill Lynch Ready Assets Trust as of December 31, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and its financial highlights for each
of the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
February 17, 2006
Important Tax Information (unaudited)
The following information is provided with respect to the ordinary income
distributions paid during the year ended December 31, 2005 by Merrill Lynch
Ready Assets Trust:
Federal Obligation Interest 15.89%*
Interest-Related Dividends for Non-U.S. Residents 91.22%**
* The law varies in each state as to whether and what percentage of dividend
income attributable to federal obligations is exempt from state income tax.
We recommend that you consult your tax adviser to determine if any portion
of the dividends you received is exempt from state income tax.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Officers and Trustees
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Trustee
Robert C. Doll, Jr.* President 2005 to President of the MLIM/FAM-advised funds since 131 Funds None
P.O. Box 9011 and present 2005; President of MLIM and FAM since 2001; 177 Portfolios
Princeton, Trustee Co-Head (Americas Region) thereof from 2000
NJ 08543-9011 to 2001 and Senior Vice President from 1999
Age: 51 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") since
2001; President of Princeton Administrators,
L.P. ("Princeton Administrators") since 2001;
Chief Investment Officer of OppenheimerFunds,
Inc. in 1999 and Executive Vice President
thereof from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which MLIM or FAM acts as investment adviser. Mr. Doll
is an "interested person," as described in the Investment Company Act, of the
Trust based on his currrent positions with MLIM, FAM, Princeton Services and
Princeton Administrators. Trustees serve until their resignation, removal or
death, or until December 31 of the year in which they turn 72. As Trust
President, Mr. Doll serves at the pleasure of the Board of Trustees.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Officers and Trustees (continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Trustees*
Donald W. Burton Trustee 2002 to General Partner of The Burton Partnership, 23 Funds Knology, Inc.
P.O. Box 9095 present Limited Partnership (an investment partnership) 42 Portfolios (telecommuni-
Princeton, since 1979; Managing General Partner of The cations) and
NJ 08543-9095 South Atlantic Venture Funds since 1983; Member Symbion, Inc.
Age: 61 of the Investment Advisory Council of the Florida (healthcare)
State Board of Administration since 2001.
Laurie Simon Hodrick Trustee 1999 to Professor of Finance and Economics, Graduate 23 Funds None
P.O. Box 9095 present School of Business, Columbia University since 42 Portfolios
Princeton, 1998.
NJ 08543-9095
Age: 43
John Francis O'Brien Trustee 2005 to President and Chief Executive Officer of 23 Funds ABIOMED
P.O. Box 9095 present Allmerica Financial Corporation (financial 42 Portfolios (medical device
Princeton, services holding company) from 1995 to 2002 manufacturer),
NJ 08543-9095 and Director from 1995 to 2003; President of Cabot
Age: 62 Allmerica Investment Management Co., Inc. Corporation
(investment adviser) from 1989 to 2002, (chemicals),
Director from 1989 to 2002 and Chairman of LKQ Corporation
the Board from 1989 to 1990; President, Chief (auto parts
Executive Officer and Director of First manufacturing)
Allmerica Financial Life Insurance Company and TJX
from 1989 to 2002 and Director of various other Companies, Inc.
Allmerica Financial companies until 2002; Director (retailer)
since 1989, Member of the Governance Nominating
Committee since 2004, Member of the Compensation
Committee of ABIOMED since 1989 and Member of
the Audit Committee of ABIOMED from 1990 to
2004; Director and member of the Governance and
Nomination Committee of Cabot Corporation and
Member of the Audit Committee since 1990;
Director and Member of the Audit Committee and
Compensation Committee of LKQ Corporation since
2003; Lead Director of TJX Companies, Inc. since
1999; Trustee of the Woods Hole Oceanographic
Institute since 2003.
David H. Walsh Trustee 2003 to Consultant with Putnam Investments from 1993 23 Funds None
P.O. Box 9095 present to 2003, and employed in various capacities 42 Portfolios
Princeton, therewith from 1973 to 1992; Director, The
NJ 08543-9095 National Audubon Society since 1998; Director,
Age: 64 The American Museum of Fly Fishing since 1997.
Fred G. Weiss** Trustee 1998 to Managing Director of FGW Associates since 23 Funds Watson
P.O. Box 9095 present 1997; Vice President, Planning, Investment and 42 Portfolios Pharmaceuticals,
Princeton, Development of Warner Lambert Co. from 1979 Inc.
NJ 08543-9095 to 1997; Director of the Michael J. Fox Foundation (pharmaceutical
Age: 64 for Parkinson's Research since 2000; Director of company)
BTG International PLC (a global technology
commercialization company) since 2001.
* Trustees serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Officers and Directors (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Trust Served Principal Occupation(s) During Past 5 Years
Trust Officers*
Donald C. Burke Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
P.O. Box 9011 President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director
Princeton, and and since 2004; Vice President of FAM Distributors, Inc. ("FAMD") since 1999 and
NJ 08543-9011 Treasurer 1999 to Director since 2004; Vice President of MLIM and FAM from 1990 to 1997; Director of
Age: 45 present Taxation of MLIM from 1990 to 2001; Vice President, Treasurer and Secretary of the
IQ Funds since 2004.
Donaldo S. Benito Vice 1998 to Vice President (Global Fixed Income) of MLIM since 1985.
P.O. Box 9011 President present
Princeton,
NJ 08543-9011
Age: 60
Jeffrey Hiller Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
P.O. Box 9011 Compliance present Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief Compliance
Princeton, Officer Officer of the IQ Funds since 2004; Global Director of Compliance at Morgan Stanley
NJ 08543-9011 Investment Management from 2002 to 2004; Managing Director and Global Director
Age: 54 of Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance
Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential
Financial from 1995 to 2000; Senior Counsel in the Commission's Division of
Enforcement in Washington, D.C. from 1990 to 1995.
Alice A. Pellegrino Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999 to
P.O. Box 9011 present 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD
Princeton, and Princeton Services since 2004.
NJ 08543-9011
Age: 45
* Officers of the Trust serve at the pleasure of the Board of Trustees.
Further information about the Trust's Officers and Trustees is available in
the Trust's Statement of Additional Information, which can be obtained
without charge by calling 1-800-637-3863.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-637-3863
MERRILL LYNCH READY ASSETS TRUST DECEMBER 31, 2005
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available
without charge upon request by calling toll-free 1-800-MER-FUND
(1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee
and (ii) each audit committee financial expert is independent: (1)
Donald W. Burton, (2) Laurie Simon Hodrick, (3) John F. O'Brien,
(4) David H. Walsh and (5) Fred G. Weiss.
The registrant's board of directors has determined that Laurie
Simon Hodrick qualifies as a financial expert pursuant to Item
3(c)(4) of Form N-CSR.
Ms. Hodrick has a thorough understanding of generally accepted
accounting principals, financial statements, and internal controls
and procedures for financial reporting. Ms. Hodrick earned a Ph.D.
in economics and has taught courses in finance for over 15 years.
Her M.B.A.-level course centers around the evaluation and analysis
of firms' corporate financial statements. She has also taught in
financial analysts' training programs. Ms. Hodrick has also worked
with several prominent corporations in connection with the analysis
of financial forecasts and projections and analysis of the
financial statements of those companies, serving on the Financial
Advisory Council of one of these major corporations. She has also
served as the Treasurer and Finance Chair of a 501(c)(3)
organization. Ms. Hodrick has published a number of articles in
leading economic and financial journals and is the associate editor
of two leading finance journals.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending December 31, 2005 - $36,000
Fiscal Year Ending December 31, 2004 - $35,000
(b) Audit-Related Fees -
Fiscal Year Ending December 31, 2005 - $0
Fiscal Year Ending December 31, 2004 - $0
(c) Tax Fees - Fiscal Year Ending December 31, 2005 - $5,700
Fiscal Year Ending December 31, 2004 - $5,200
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ending December 31, 2005 - $0
Fiscal Year Ending December 31, 2004 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services
provided to the registrant on an annual basis require specific pre-
approval by the Committee. The Committee also must approve other
non-audit services provided to the registrant and those non-audit
services provided to the registrant's affiliated service providers
that relate directly to the operations and the financial reporting
of the registrant. Certain of these non-audit services that the
Committee believes are a) consistent with the SEC's auditor
independence rules and b) routine and recurring services that will
not impair the independence of the independent accountants may be
approved by the Committee without consideration on a specific case-
by-case basis ("general pre-approval"). However, such services
will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any
proposed services exceeding the pre-approved cost levels will
require specific pre-approval by the Committee, as will any other
services not subject to general pre-approval (e.g., unanticipated
but permissible services). The Committee is informed of each
service approved subject to general pre-approval at the next
regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending December 31, 2005 - $5,577,771
Fiscal Year Ending December 31, 2004 - $11,926,355
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,227,000, 0%
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 second 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 - See Item 2
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 Ready Assets Trust
By: /s/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
Merrill Lynch Ready Assets Trust
Date: February 21, 2006
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 Ready Assets Trust
Date: February 21, 2006
By: /s/ Donald C. Burke
---------------------------
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch Ready Assets Trust
Date: February 21, 2006