Merrill Lynch International Investment Funds

BMerrillLynch Investment Managers www.mliminternationaI.com

Merrill Lynch International Investment Funds Prospectus

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Contents

Introduction to Merrill Lynch International Investment Funds

General

Distribution

Management and Administration

Enquiries

Board of Directors

Glossary

Investment Management of Funds

Special Risk considerations

Excessive Tradiqg Policy

Investment Objectives & Policies

Classes and Form of Shares

Dealing in Fund Shares

Prices of Share;

Application for Shares

Redemption of Shares

Conversion of Shares

Dividends

Fees, Charges and Expenses

Taxation

Meetings and Reports

Appendix A - livestrnent and Borrowing Powers and Restrictions

Appendix E - Summary of Certain Provisions of the Articles and of Company Practice

Appendix C -Additional Information

Appendix D - Authorised Status

Appendix E -Summary of Charges and Expenses

Appendix F -Available Funds and Share Classes

Summary of Subscription Procedure and Payment Instructions

Page

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41

48

55

58

64

70

Introduction to Merrill Lynch International Investment Funds Structure Listing Merrill Lynch International Investment Funds ("the Company") is

incorporated in Luxembourg as an open-ended investment

company and qualifies as a Part I K I T S (Undertaking for

Collective Investment in Transferable Securities) It has an

"umbrella" structure comprising a number of different Funds,

each having a separate portfolio o f investments The Company

has appointed Merrill Lynch Investment Managers (Luxembourg)

S A as its management company

Shares of certain Classes of all Funds are, or will be, listed on the

Luxembourg Stock Exchange.

Choice of Funds

As of the date of this Prospectus, investors are able t o choose

from the following Funds of Merrill Lynch International

Investment Funds

Asian Dragon Fund (E) P Asian Tiger Bond Fund (E) ERIC Fund* (E) Conservative Allocation Fund (Euro) (M) Conscwative Allocation Fund (US Dollar) (M) Continental European Growth Fund (E) Corporate Bond Fund (Euro) (until 31 July 2006) (6) Emerging Europe Fun&(E) Emerging M d e t s B o b F s d (8) 2 EGerging Maikets Funb (E) Euro Bond fund (B) Euro Corporate Bond fund (effective 31 July 2006) (6) Euro-Markets Fund (E) European Fund (E) European Focus Fund' (E)

~ Eunlp&n Furid (Et Eu+an kurog!an i&kkind~E) Euro ?tesed Fuh8 IB)' Glonal Allocation Fund (M) Global Bond Fund (Euro) (8) Global Bond Fund (US Dollar) (B)

Global Opportunities Fund (E) Global SmallCap Fund (E) Greater China Fund* (E) India Fund* (E) Japan Fund (El2 Japan Opportunities Fund (EF Jdpan Value Fund {E)'

New Energy Fund (E) Pacific Equity Fund (E) Short Duration Bond Fund (Euro) (6) Sterling Reserve Fund (8) Strategic Allocation Fund (Euro) (M) Strategic Allocation Fund (US Dollar) (M) Thailand Fund* (E) UK Focus Fund' (E)

US Basic Value Fund (E) US Dollar Core Bond Fund (8) US Dollar High Yield Bond Fund (E) US Dollar Low Duration Bond Fund (B) US Dollar Reserve Fund (B) US Flexibk Equity F h d (E) -k T US Focused Value Fund (E) US Government Mortgage Fund (B) US Growth Fund (E) US Opportuniues Fund (E) US SmallCap Value Fund (E)

'

Gtin A&rican Fund (E) i

Global Capital Securities Abs Global Dyiiamic E d d y Fund (E Global E&y C o m o d (E) Giobal Eqcity Div&<died Fund Global Fo&s Fun&&) Global Fuhdamen6l i'alue Fu Global G$Wh fu% (E) Global Hiah Yield Bond Fund (

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2 Merrill Lynch International Investment Funds

World Energy Fund (3 World Financialr; Funa (E) World Gold Fund (E) World Healthscience Fund (E) World Income Fund (B) World Mining Fund (E) Wortd Technology Fund {E)

US$ us$ US$ US$ us4 US$ US$

* Fund not available for suhscriotion a the date of this Prospertur Such Funds may be launrhed at the Directors' discretion Confirmation of the launch date of these Funds w II then be made available at the Investor Service Centre Any provisions in this Prospectus relating to any one of these Funds shall only take effect from the launch date of the relevant Fund

I Fund is only registered in Luxembourg, Germany and Switzerlana ' With effect from 29 May 2C06, these Funds will have yen as a dealing currency and also retain US dollars and euro as additional dealing currencies B Bond Fund E Equity Fund

M Mixed Fund

General If you are in any d o u b t a b o u t t h e contents of this

Prospectus o r whe the r a n investment in t h e Company is

suitable for you, y o u should consult you r stockbroker,

solicitor, accountant, relat ionship manager or other

professional adviser.

The Directors of the Company, whose names appear on page 4,

are the persons responsible for the information contained in this

document To the best of the knowledge and belief of the

Directors (who have taken all reasonable care t o ensure that such

is the case), the information Contained in this document is

in accordance wi th the facts and does not omit anything likely

t o affect the import of such information. The Directors accept

responsibility accordingly.

No person has been authorised t o give any information or t o

make any representations other than those contained in this

Prospectus, the documents mentioned herein and any brochures

that are issued by the Company as substitute offering documents.

It should be remembered that the price of the Shares of each

of the Funds can go down as well as up. Changes in the rates

of exchange between currencies may cause the value of Shares,

expressed in their Dealing Currency(ies), t o go up or down

Accordingly, an investor may not receive back the amount

he or she invested.

All decisions to subscribe for Shares should b e made on t h e

basis of t h e i n fo rma t ion conta ined in this Prospectus wh ich

is issued by t h e Company a n d in t h e most recent annual a n d

(if later) i n te r im repor t and accounts of the Company which

are avai lable f r o m t h e registered of f ice of t h e Company.

I n fo rma t ion upda t ing this Prospectus may, if appropriate,

appear in t h e r e p o r t a n d accounts.

Statements made in this Prospectus are based on the law and

practice currently in force in the Grand-Duchy of Luxembourg

and are subject t o changes in such law.

Distribution This Prospectus does not constitute an offer or solicitation

by anyone in anylurisdiction in which such offer or solicitation

is not lawful or in which the person making such offer

or solicitation is not qualified to do so or t o anyone t o whom

i t is unlawful to make such offer or solicitation. Details of

countries in which the Company is currently authorised t o offer

Shares are contained in Appendix D. Prospective subscribers for

Shares should inform themselves as t o the legal requirements

of applying for Shares and of applicable exchange control

regulations and taxes in the countries of their respective

citizenship, residence or domicile. US Persons are not permitted

t o subscribe for Shares. In some countries investors may be able

to subscribe for Shares through Regular Savings Plans. The fees

and commissions relating t o Regular Savings Plans during the first

year must not exceed one third of the amount contributed by the

investor. These fees and commissions do not include premiums t o

be paid by the investor where the Regular Savings Plan is offered

as part of a life insurance or whole life insurance product. Please

contact the Investor Service Centre for more details.

24 March 2006

Merrill Lynch International Investment Funds 3

Management and Administration Management Company

Merrill Lynch Investment Managers (Luxembourg) S.A.

6D route de Treves, L-2633 Senningerberg, Luxembourg

Investment Advisers

Merrill Lynch Investment Managers Limited

33 King William Street, London EC4R 9AS. UK

Fund Asset Management, L.P.

800 Scudders Mill Road, Plainsboro, NJ 08536, USA

Investment Manager a n d Principal Distributor

Merrill Lynch Investment Managers (Channel Islands) Limited

Forum House, Grenville Street, St. Helier, Jersey JE4 8RL,

Channel Islands

Investor Services

Written Enquiries: Merrill Lynch Investment Managers, d o

J.P. Morgan Bank Luxembourg S.A., P.O. Box 1058, L1010

Luxembourg

All other enquiries: Telephone: + 44 207 995 6655,

Fax: + 44 207 743 1 143

Custodian

The Bank of New York Europe Limited. Luxembourg Branch

Aerogolf Center, 1A Hoehenhof, L-1736 Senningerberg,

Luxembourg

Fund Accountant

The Bank of New York Europe Limited, Luxembourg Branch

Aerogolf Center, 1A Hoehenhof, L-1736 Senningerberg,

Luxembourg

Transfer A g e n t a n d Registrar

J.P. Morgan Bank Luxembourg S.A.

6C, Route de TrPves, L-2633 Senningerberg,

Grand Duchy of Luxembourg

Aud i to r

PricewaterhouseCoopers

400 route d'Esch, L1471 Luxembourg

Legal Advisers

Linklaters Loesch

Avenue John F. Kennedy 35, L-1855 Luxembourg

Listing A g e n t

J.P. Morgan Bank Luxembourg S.A.

6C. Route de TrPves, 1-2633 Senningerberg, Grand Duchy of

Luxembourg

Paying Agents

A list of Paying Agents is to be found on page 49.

Registered Of f ice

Aerogolf Centre, 1A Hoehenhof, L-1736 Senningerberg,

Luxembourg

Enquiries In the absence of other arrangements, enquiries regarding the

Company should be addressed as follows: Written enquiries: Merrill Lynch Investment Managers, do

J.P. Morgan Bank Luxembourg SA., P.0 Box 1058, L-1010.

Luxembourg.

All other enquiries: Telephone. + 44 207 995 6655,

Fax: + 44 207 743 1143.

4 Merrill Lynch international Investment Funds

Board of Directors Chairman

Robert Fairbairn

Managing Director, Chief Operating Officer, EMEA Pacific



Directors

Frank P. Le Feuvre

Managing Director, Merrill Lynch Investment Managers

(Channel Islands) Limited

Forum House, Grenville Street, St. Helier, Jersey JE4 8RL.

Channel Islands

Geoffrey Radcliffe

Director and General Manager


6D route de TrPves, L-2633 Senningerberg, Luxembourg

Jean-Claude Wolter

Avocat Honoraire

232, rue Edith Cavell, B-1180 Brussels, Belgium

Andrew Donohue

First Vice President, General Counsel

Merrill Lynch Investment Managers, 1.P.

Princeton, New Jersey, USA

James Charrington

Managing Director, Head of Retail Business, EMEA Pacific


33 King William Street, London EC4R 9AS, UK

Ernilio Novela Berlin

Independent Director

Paseo de la Castellana 40 bis - 4a Planta, 28046 Madrid, Spain


Glossary Base Currency

In relation to Shares of any Fund, the currency indicated on page 2 .

Business Day

In relation t o Shares of any Fund, any day normally treated as a

business day in Luxembourg for banks and the Luxembourg stock

exchange and such other days as the Directors may decide.

CDSC

Contingent deferred sales charge.

Deal ing Currency

In relation t o Shares of any Fund, the currency or currencies

indicated on page 2 as at the date of this Prospectus. Other

additional Dealing Currencies may be introduced at the Directors'

discretion. Confirmation of the further additional Dealing

Currencies and the date of their availability can then be obtained

from the registered office of the Company and from the Investor

Service Centre. An updated list of available Dealing Currencies

will be included in the next version of the Prospectus.

Deal ing Day

In relation t o Shares of any Fund, any Business Day (other than

one falling within a period of suspension).

Directors

The Directors of the Company.

Dis t r ibut ing Funds a n d Dis t r ibut ing Shares

Those Shares for which dividends are currently declared and in

respect of which currency and which Fund are set out in

Appendix F. Dividends may be declared on Distributing Shares of

other Funds and in other currencies at the Directors' discretion.

Confirmation of the additional Funds, Share Classes and

Currencies on which dividends may be declared will then be

made available from the registered office of the Company and

from the Investor Service Centre. An updated list of available

Distributing Shares will be included in the next version of the

Prospectus.

Funds

The funds of the Company described in this Prospectus.

Hedged Share Classes

Those Share Classes of those Funds for which hedged shares are

currently available are set out in Appendix F. Additional Hedged

Share Classes may, at the Directors' discretion, be made available

in other Funds and in other currencies. Confirmation of the other

Funds and currencies in which the Hedged Share Classes may be

available and the date of their launch can then be obtained from

the registered office o f the Company and from the Investor

Service Centre An updated list of available Hedged Share Classes

will be included in the next version of the Prospectus. All

gainsAosses from hedging transactions are borne separately by

the shareholders of the respective Hedged Share Classes

Investment Manager

Merrill Lynch Investment Managers (Channel Islands) Limited

acting either in its capacity as Investment Manager or in its

capacity as Principal Distributor as further described in Appendix

C. References t o distributors may include the Investment

Manager in its capacity as Principal Distributor.

Investor Service Centre

Merrill Lynch Investment Managers Limited (or such other MLlM

Group company that may perform such functions from time t o

time) for dealing and investor servicing functions.

Management Company

Merrill Lynch Investment Managers (Luxembourg) S.A., a

Luxembourg societe anonyme authorised as a management

company under the law of 20 December 2002.

Mer r i l l Lynch

Merrill Lynch International & Co., Inc. or one of its associated

companies (other than the Investment Manager or the

Investment Advisers).

M L Fund

Any fund established in Luxembourg that qualifies as a Part I

UClTS and for which the investment adviser is Merrill Lynch

Investment Managers, L.P. or Merrill Lynch Bank (Suisse) S.A. or

one of their affiliates other than the Investment Manager or

Merrill Lynch Investment Managers Limited.

M L Group

The Merrill Lynch group of companies, the ultimate holding

company of which is Merrill Lynch & Co., Inc.

M L l M Group

The Merrill Lynch Investment Managers group, a business division

of the ML Group.


ML M o n e y Marke t Funds

Non-US registered money market investment funds for which the

investment adviser is Merrill Lynch Investment Managers, L.P or

one of its affiliates other than the Investment Manager or Merrill

Lynch Investment Managers Limited.

N e t Asset Value

In relation t o a Fund or a Share (of any Class), the amount

determined in accordance wi th the provisions described in

paragraphs 11 t o 16 of Appendix B. The Net Asset Value of a

Fund may be adjusted in accordance wi th paragraph 16(c) o f

Appendix B.

Prospectus

This docurnen:.

Share

A share in the capital of the Company, as described in this

Prospectus.

Share Class

The class of share in each case of no par value representing the

capital of the Company and linked to a particular Fund, as

described on page 25.

Subsidiary

Merrill Lynch India Equities Fund (Mauritius) Limited, a wholly-

owned subsidiary of the Company, incorporated as a private

company limited by shares through which the India Fund and

certain other Funds may invest in securities.

UK Dist r ibutor Status Funds and UK Dist r ibutor Status

Shares

Those Funds which currently offer UK Distributor Status on their

Shares as at the date of this Prospectus are set out in Appendix F.

The Company may apply for UK Distributor Status for Shares of

other Funds and for other Share Classes or Dealing Currencies of

these Funds and other Funds. Confirmation of the additional

Funds, Share Classes and Dealing Currencies in respect of which

the Company may apply for UK Distributor Status will then be

available from the registered office of the Company and from the

Investor Service Centre. An updated list of available UK Distributor Sta:us funds, Share Classes and Dealing Currencies


Merrill Lynch international Investment Funds 7

Investment Management of Funds Management

The Directors are responsible for the overall investment policy

of the Company.

Merrill Lynch Investment Managers (Luxembourg) S.A. has been

appointed by the Company t o act as its management company.

The Management Company is authorised t o act as a fund

management company in accordance wi th Chapter 13 of the

law of 20 December 2002.

The Company has signed a management company agreement

(the "Management Company Agreement") with the

Management Company. Under this agreement, the Management

Company is entrusted with the day-to-day management of the

Company, with responsibility for performing directly or by way

of delegation all operational functions relating to the Company's

investment management, administration, and the marketing

of the Funds

In agreement wi th the Company, the Management Company has

decided t o delegate several of its functions as is further described

in this Prospectus.

The directors of the Management Company are:

Frank P Le Feuvre

Managing Director, Merrill Lynch Investment Managers

(Channel Islands) Limited

Forum House, Grenville Street, St. Helier, Jersey JE4 8RL.

Channel Islands

James Stratford

First Vice President, Global Head of Compliance



Geoffrey Radcliffe

Director and General Manager


6D route de Treves, L-2633 Senningerberg, Luxembourg

The Management Company has delegated its investment

management functions to the Investment Manager, w h o in turn

has appointed the Investment Advisers. The Investment Advisers

provide advice and management in the areas of stock and sector

selection and strategic allocation. One of the Investment Advisers,

Merrill Lynch Investment Managers Limited, has sub-delegated

some of these functions t o Merrill Lynch Investment Managers

Co., Ltd. Notwithstanding the appointment of the Investment

Advisers, the Investment Manager accepts full responsibility t o

the Management Company and t o the Company for all

investment transactions, subject t o the direction of the

Management Company's Directors. Merrill Lynch Investment

Managers Limited a150 acts as the Investment Manager t o the

Subsidiary.

Investment Advisers

Merrill Lynch Investment Managers Limited is the principal

operating subsidiary of Merrill Lynch Investment Managers Group

Limited, which is a subsidiary of Merrill Lynch & Co., Inc

It is regulated by the Financial Services Authority ("FSA") but

the Company will not be a customer of Merrill Lynch Investment

Managers Limited for the purposes of the FSA Rules and will

accordingly not directly benefit from the protection of those

Rules

Merrill Lynch Investment Managers Limited forms part of the

MLlM Group. The MLlM Group currently employs over 3,000 staff

who provide investment management services internationally for

institutional, retail and private clients. The MLlM Group has over

US$539 billion of assets under management and is represented in

18 countries. The ML Group is a major financial services group,

the global activities of which include not only those of the MLlM

Group, but also investment banking and securities brokerage

businesses.

Fund Asset Management, L.P. was established 01: 15 December

1976 and is regulated by the Securities and Exchange

Commission. It has over USB133 billion of assets under

management. It is also a directly owned operating subsidiary of

Merrill Lynch & Co., Inc. and forms part of the

MLlM Group

Merrill Lynch Investment Managers (Luxembourg) S.A. 15 a wholly

owned subsidiary within the ML Group. It is regulated by the

Commission de Surveillance du Secteur Financier. Merrill Lynch

Investment Managers (Luxembourg) S A forms part of the M U M

Group


Special Risk Considerations Investors must read these Special Risk Considerations before

investing in any of the Company's Funds.

This section contains explanations of some of the risks that

apply to the Funds. Not all risks apply t o all Funds and the

following table sets out the risks that, in the opinion of the

Investment Manager, could have significant impact to the overall risk of the portfolio. Investors should be aware that other risks may also be relevant t o the Funds from time to

time.

Merrill Lvnch International Investment Funds 9

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x x x x x

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x x x x x x x x X X

: x x x x x x x x x x x x x x

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, I

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Merrill Lynch International Investment Funds 1 1

General

There can be no assurance that the investment objectives of each

Fund will be achieved Also, past performance is no guide t o future

performance, and the value of investments may go down as well as

up. Changes in rates of exchange between currencies may cause

the value of a Fund's investments to diminish or increase.

Emerging Markets

The following considerations, which apply t o some extent t o all

international investment, are of particular significance in certain

smaller and emerging markets. Funds investing in equit ies (see

"Investment Objectives & Policies" below) may include

investments in certain smaller and emerging markets, which

are typical ly those of poorer or less developed countr ies

which exhib i t l ower levels of economic and/or capital

marke t development, a n d h igher levels of share price a n d

currency volat i l i ty. The prospects for economic growth in a

number of these markets are considerable and equity returns

have the potential t o exceed those in mature markets as growth

is achieved. However, share price and currency volatility are

generally higher in emerging markets.

Some governments exercise substantial influence over the private

economic sector and the political and social uncertainties that exist

for many developing countries are particularly significant. Another

risk common t o most such countries is that the economy is heavily

export oriented and, accordingly, is dependent upon international

trade. The existence of overburdened infrastructures and obsolete

financial systems also presents risks in certain countries, as do

environmental problems. Certain economies also depend t o a

significant degree upon exports of primary commodities and,

therefore, are vulnerable t o changes in commodity prices which, in

turn, may be affected by a variety of factors.

In adverse social and political circumstances, governments have

been involved in policies of expropriation, confiscatory taxation,

nationalisation, intervention in the securities market and trade

settlement, and imposition of foreign investment restrictions and

exchange controls, and these could be repeated in the future. In

addition t o withholding taxes on investment income, some

emerging markets may impose different capital gains taxes on

foreign investors.

Generally accepted accounting, auditing and financial reporting

practices in emerging markets may be significantly different from

those in developed markets. Compared t o mature markets, some

emerging markets may have a low level of regulation,

enforcement of regulations and monitoring of investors' activities

Those activities may include practices such as trading on material

non-public information by certain categories of investor.

The securities markets of developing countries are not as large as

the more established securities markets and have substantially

less trading volume, resulting in a lack of liquidity and high price

volatility. There may be a high concentration of market

capitalisation and trading volume in a small number of issuers

representing a limited number of industries as well as a high

concentration of investors and financial intermediaries. These

factors may adversely affect the timing and pricing of a Fund's

acquisition or disposal of securities.

Practices in relation t o settlement of securities transactions in

emerging markets involve higher risks than those in developed

markets, in part because the Company will need t o use brokers

and counterparties which are less well capitalised, and custody

and registration of assets in some countries may be unreliable.

Delays in settlement could result in investment opportunities

being missed if a Fund is unable t o acquire or dispose of a

security. The Custodian is responsible for the proper selection and

supervision of its correspondent banks in all relevant markets in

accordance with Luxembourg law and regulation.

In certain emerging markets, registrars are not subject t o effective

government supervision nor are they always independent from

issuers. The possibility of fraud, negligence, undue influence

being exerted by the issuer or refusal t o recognise ownership

exists, which, along with other factors, could result in the

registration of a shareholding being completely lost. Investors

should therefore be aware that the Funds concerned could suffer

loss arising from these registration problems, and as a result of

archaic legal systems a Fund may be unable t o make a successful

claim for compensation.

While the factors described above may result in a generally higher

level of risk with respect t o the individual smaller and emerging

markets, these may be reduced when there is a low correlation

between the activities of those markets and/or by the

diversification of investments within the relevant Funds.

Investments in Russia are currently subject to certain heightened

risks wi th regard t o the ownership and custody of securities. In

Russia, this is evidenced by entries in the books of a company or

12 hlerrill Lynch international investment Funds

its registrar (which is neither an agent nor responsible to the

Custodian). No certificates representing ownership of Russian

companies will be held by the Custodian or any correspondent or

in an effective central depositary system. As a result o f this system

and the lack of state regulation and enforcement, the Company

could lose its registration and ownership of Russian securities

through fraud, negligence or even mere oversight.

Any Fund investing directly in local Russian stock wil l limit i ts

exposure t o no more than 10% of its Net Asset Value, except for

investment in securities listed on either the Russian Trading Stock

Exchange or :he Moscow Interbank Currency Exchange, which

have been recognised as being regulated markets.

Sovereign Debt

Certain developing countries are especially large debtors to

commercial banks and foreign governments. Investment in debt

obligations (”Sovereign Debt”) issued or guaranteed by developing

governments or their agencies and instrumentalities (“governmental

entities”) involves a high degree of risk. The governmental entity

that controls the repayment of Sovereign Debt may not be able or

willing to repay the principal and/or interest when due in

accordance with the terms of such debt. A governmental entity’s

willingness or ability to repay principal and interest due in a timely

manner may be affected by, among other factors, its cash flow

situation, the extent of its foreign reserves, the availability of

sufficient fore.gn exchange on the date a payment is due, the

relative size of the debt service burden t o the economy as a whole,

the governmental entity’s policy towards the International Monetary

Fund and the political constraints to which a governmental entity

may be subject. Governmental entities may also be dependent on

expected disbursements from foreign governments, multilateral

agencies and others abroad to reduce principal and interest

arrearage on their debt. The commitment on the part of these

governments, agencies and others to make such disbursements may

be conditioned on a governmental entity‘s implementation of

economic reforms and/or economic performance and the timely

service of such debtor’s obligations. Failure to implement such

reforms, achieve such levels of economic performance or repay

principal or interest when due may result in the cancellation of such

third parties’ commitments to lend funds t o the governmental

entity. which may further impair such debtor’s ability or willingness

t o service its debt on a timely basis. Consequently, governmental

entities may default on their Sovereign Debt. Holders of Sovereign

Debt, including a Fund, may be requested t o participate in the

rescheduling of such debt and t o extend further loans t o

governmental entities. There is no bankruptcy proceeding by which

Sovereign Debt on which a governmental entity has defaulted may

be collected in whole or in part.

Restrictions on Foreign Investment

Some countries prohibit or impose substantial restrictions on

investments by foreign entities such as a Fund. As illustrations,

certain countries require governmental approval prior t o

investments by foreign persons, or limit the amount of

investment by foreign persons in a particular company, or limit

the investment by foreign persons in a company to only a specific

class of securities which may have less advantageous terms than

securities of the company available for purchase by nationals.

Certain countries may restrict investment opportunities in issuers

or industries deemed important t o national interests. The manner

in which foreign investors may invest in companies in certain

countries, as well as limitations on such investments, may have an

adverse impact on the operations of a Fund. For example, a Fund

may be required in certain of such countries t o invest initially

through a local broker or other entity and then have the share

purchases re-registered in the name of the Fund. Re-registration

may in some instances not be able t o occur on a timely basis,

resulting in a delay during which a Fund may be denied certain of

its rights as an investor, including rights as t o dividends or t o be

made aware of certain corporate actions. There also may be

instances where a Fund places a purchase order but is

subsequently informed, at the time of re-registration, that the

permissible allocation t o foreign investors has been filled,

depriving the Fund of the ability t o make its desired investment at

the time. Substantial limitations may exist in certain countries

with respect to a Fund’s ability to repatriate investment income,

capital or the proceeds of sales of securities by foreign investors.

A Fund could be adversely affected by delays in, or a refusal t o

grant any required governmental approval for repatriation of

capital, as well as by the application t o the Fund of any restriction

on investments. A number of countries have authorised the

formation of closed-end investment companies t o facilitate

indirect foreign investment in their capital markets. Shares of

certain closed-end investment Companies may at times be

acquired only at market prices representing premiums to their net

asset values. If a Fund acquires shares in closed-end investment

companies, shareholders would bear both their proportionate

share of expenses in the Fund (including management fees) and,

indirectly, the expenses of such closed end investment companies.

A Fund also may seek, at its own cost, t o create its own

investment entities under the laws of certain countries.


Fixed Income Transferable Securities

Debt securities are sublect t o both actual and perceived measures

of creditworthiness. The "downgrading" of a rated debt security

or adverse publicity and investor perception, which may not be

based on fundamental analysis, could decrease the value and

liquidity o f the security, particularly in a thinly traded market

A Fund may be affected by changes in prevailing interest rates

and by credit quality considerations. Changes in market rates of

interest will generally affect a fund's asset values as the prices of

fixed rate securities generally increase when interest rates decline

and decrease when interest rates rise. Prices of shorter-term

securities generally fluctuate less in response t o interest rate

changes than do longer-term securities.

An economic recession may adversely affect an issuer's financial

condition and the market value of high yield debt securities

issued by such entity. The issuer's ability t o service its debt

obligations may be adversely affected by specific issuer

developments, or the issuer's inability t o meet specific projected

business forecasts, or the unavailability o f additional financing. In

the event of bankruptcy of an issuer, a Fund may experience

losses and incur costs.

Investment Grade

The term "investment grade" defines debt securities which are

rated, at the time of purchase, BBB- (Standard and Poor's or

equivalent rating) or better by a t least one recognised rating

agency, or, in the opinion of the Investment Manager, are of

com parable qua I i ty.

Non-Investment Grade

The terms "non-investment grade" or "high yield" define debt

securities which are unrated or rated, at the time of purchase,

BB+ (Standard and Poor's or equlvalent rating) or lower by at least

one recognised rating agency or, in the opinion of the Investment

Manager, are of comparable quality.

Non-investment grade debt may be highly leveraged and carry a

greater risk of default. In addition, non-investment grade

securities tend t o be more volatile than higher rated fixed-income

securities, so that adverse economic events may have a greater

impact on the prices of non-investment grade debt securities

than on higher rated fixed-income securities.

Capital Securities

Where the term "Capital Securities" is used, it refers t o

subordinated fixed income transferable securities within the

meaning of Section 2.1. Appendix A "Investment and Borrowing

Powers and Restrictions" that qualify for treatment as regulatory

capital by regulators or are regarded by rating agencies as having

both debt and equity characteristics and includes, but is not

limited to, financials.

Distressed Securities

Investment in a security issued by a company that is either in

default or in high risk of default ("Distressed Securities") involves

significant risk. Such investments will only be made when the

Investment Adviser believes it is reasonably likely that the issuer of

the securities will make an exchange offer or will be the subject

of a plan of reorganisation; however, there can be n o assurance

that such an exchange offer will be made or that such a plan of

reorganisation will be adopted or that any securities or other

assets received in connection with such an exchange offer or plan

of reorganisation will not have a lower value or income potential

than anticipated when the investment was made. In addition, a

significant period of t ime may pass between the time at which

the investment in Distressed Securities is made and the time that

any such exchange offer or plan of reorganisation is completed.

During this period, i t is unlikely that any interest payments on the

Distressed Securities will be received, there will be significant

uncertainty as t o whether or not the exchange offer or plan of

reorganisation will be completed, and there may be a

requirement t o bear certain expenses t o protect the investing

Fund's interest in the course of negotiations surrounding any

potential exchange or plan of reorganisation. In addition, as a

result of participation in negotiations wi th respect t o any

exchange offer or plan of reorganisation wi th respect t o an issuer

of Distressed Securities, the investing Fund may be precluded

from disposing of such securities. Furthermore, constraints on

investment decisions and actions with respect to Distressed

Securities due t o tax considerations may affect the return realised

on the Distressed Securities.

Some Funds may invest in securities of issuers that are

encountering a variety o f financial or earnings problems and

represent distinct types of risks. A Fund's investments in equity or

fixed income transferable securities of companies or institutions

in weak financial condition may include issuers with substantial

capital needs or negative net worth or issuers that are, have been

or may become, involved in bankruptcy or reorganisation

proceedings.

14 Merrill Lynrh international Investment Funds

Smaller Capital isat ion Companies

Securities of smaller capitalisation companies may, from time to

time, and especially in falling markets, become illiquid and

experience short-term price volatility and wide spreads between bid

and offer prices Investment in smaller capitalisation companies

may involve higher risk than investment in larger companies

The securities of smaller companies may be subject t o more

abrupt or erratic market movements than larger, more established

companies or the market average in general These companies

may have limited product lines, markets or financial resources, or

they may be dependent on a limited management group. Full

development of those companies takes time In addition, many

small company stocks trade less frequently and in smaller volume,

and may be subject t o more abrupt or erratic price movements

than stocks of large Companies The securities of small companies

may also be more sensitive t o market changes than the securities

of large companies These factors may result in above-average

fluctuations ir the Net Asset Value of a Fund’s Shares.

Funds investing in specific sectors or technologies

Investment is Tade in a limited number of market sectors and

therefore these funds may be more volatile than other more

diversified Funds and may be subject t o rapid cyclical changes in

investor activiry. In particular, certain Funds may have exposure to

technology stocks. Investments in securities of technology related

companies present certain risks that may not exist t o the same

degree as in other types of investments and tend t o be relatively

more volatile. Technology-related investments may include smaller

and less seasoned companies. Such companies may have limited

product lines, markets, or financial resources, or may depend on

a limited management group. The companies in which the Funds

concerned may invest are also strongly affected by worldwide

scientific or technological developments, and their products may

rapidly fall into obsolescence.

The share price gains of many companies involved in the

alternative energy and energy technology sectors in the recent

past have been significantly greater than those experienced by

equity markets as a whole. Consequently, the shares of many

alternative energy and energy technology focused companies are

now valued, using certain valuation criteria, at a substantial

premium t o the average for equity markets in general. There can

be no assurance or guarantee that current valuations of

alternative energy and energy technology focused companies are

sustainable,

Competition between technology Companies is intense, and

profit margins can be small or non-existent. In fact, many

technology companies operate a t substantial losses with no

prospect for profit in the foreseeable future. For these reasons,

investment in such companies by a Fund may be considered

speculative.

With regard t o Funds that invest in asset-based securities, while

the market price for an asset-based security and the related

natural resource asset generally are expected t o move in the same

direction, there may not be perfect correlation in the t w o price

movements. Asset-based securities may not be secured by a

security interest in or claim on the underlying natural resource

asset. The asset-based securities in which a Fund may invest may

bear interest or pay preferred dividends at below market rates

and, in some instances, may not bear interest or pay preferred

dividends at all.

Certain asset-based securities may be payable at maturity in cash at

the stated principal amount or, at the option of the holder, directly

in a stated amount of the asset t o which it is related. In such

instance, a Fund would endeavour t o sell the asset-based security

in the secondary market prior to maturity if the value of the stated

amount of the asset exceeds the stated principal amount and

thereby realise the appreciation in the underlying asset

A Fund investing in financial services companies is more

vulnerable t o price fluctuations of financial services companies

and other factors that particularly affect financial services

industries than a more broadly diversified mutual fund. In

particular, the prices of stock issued by many financial services

companies have historically been more closely correlated with

changes in interest rates than other stocks. Generally, when

interest rates go up, stock prices of these companies go down.

This relationship may not continue in the future.

Delayed Delivery Transactions

Funds that invest in fixed income transferable securities may

purchase “To Be Announced” securities (“TBAs”) This refers t o

the common trading practice in the mortgage-backed securities

market in which a security is t o be bought from a mortgage pool

(Ginnie Mae, Fannie Mae or Freddie Mac) for a fixed price at a

future date A t the t ime of purchase the exact security is not

known, but the main characteristics of it are specified Although

the price has been established at the time of purchase, the

principal value has not been finalised Purchasing a TBA involves a


risk of loss if the value of the security t o be purchased declines

prior to the settlement date. Risks may also arise upon entering

into these contracts from the potential inability of counterparties

t o meet the terms of their contracts.

Although the Funds will generally enter into TBA purchase

commitments with the intention of acquiring securities, the Funds

may also dispose of a commitment prior t o settlement if i t is

deemed appropriate t o do so. Proceeds of TBA sales are not

received until the contractual settlement date. During the time a

TBA sale commitment is outstanding, equivalent deliverable

securities, or an offsetting TBA purchase commitment (deliverable

on or before the sale commitment date), are held as cover for the

transaction.

If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the Fund realises a gain or

loss on the commitment without regard t o any unrealised gain or

loss on the underlying security. If the Fund delivers securities

under the commitment, the Fund realises a gain or loss from the

sale of the securities upon the unit price established at the date

the commitment was entered into.

Hedged Share Classes

With regard t o any Hedged Share Classes that may be available, i t

should be noted that the hedging strategies employed by the

Fund or its authorised agent will not completely eliminate the

exposure of the Hedged Share Classes t o movements in other

currencies. While the Fund or its authorised agent may attempt t o

hedge currency risks, there can be no guarantee that it will be

successful in doing so. The hedging strategies adopted may result

in mismatches between the currency position of the Fund and the

Hedged Share Class.

The objective of these strategies is to mitigate major sources of

currency risk, while taking account of practical considerations

including transaction costs. The hedging strategies applied will

vary dependent upon whether a Fund is invested primarily in one

currency or whether i t invests in multiple currencies. Funds

invested in one currency will apply a hedging strategy which aims

to reduce the risk of currency movements between the Base

Currency and the currency of the Hedged Share Class by hedging

the Net Asset Value of the Fund in the currency of the Hedged

Share Class. Funds invested in multiple currencies will apply a

hedging strategy which aims t o reduce the risk of currency

movements between the currency of the Hedged Share Class and

other major currencies. The use of hedging strategies may

substantially limit shareholders in the relevant Hedged Share Class

from benefiting if the Hedge Share Class currency falls against

the currency or currencies in which the assets of the relevant

Funds are invested. All gains/losses from hedging transactions are

borne separately by the shareholders of the respective Hedged

Share Classes.

Derivatives - General

In accordance wi th the investment limits and restrictions set out

in Appendix A, each of the Funds may use derivatives t o hedge

market and currency risk, and for the purposes of efficient

portfolio management.

The use of derivatives may expose Funds t o a higher degree of

risk. In particular, derivative contracts can be highly volatile, and

the amount of initial margin is generally small relative t o the size

of the contract so that transactions are geared. A relatively small

market movement may have a potentially larger impact on

derivatives than on standard bonds or equities.

Derivatives - Bond, M i x e d Funds and certain Equity Funds

In addition t o the above, the Funds may use derivatives to

facilitate more complex efficient portfolio management

techniques. In particular this may involve:

Using swap contracts t o adjust interest rate risk;

Using currency derivatives t o buy or sell currency risk;

Using credit default swaps t o buy or sell credi: risk;

The use of credit default swaps carries a higher risk than investing

in bonds directly. A credit default swap allows the transfer of

default risk. This allows investors t o effectively buy insurance on a

bond they hold (hedging the investment) or buy protection on a

bond they do not physically own in the expectation that the

credit will decline in quality. One party, the protection buyer,

makes a stream of payments t o the seller o f protection, and a

payment is due t o the buyer in the event that there is a "credit

event" (a decline in credit quality, which will be pre-defined in the

agreement). If the credit event does not occur the buyer pays all

the required premiums and the swap terminates on maturity wi th

no further payments. The risk of the buyer is therefore limited t o

the value of the premiums paid.

The market for credit default swaps may sometimes be more

illiquid than bond markets. A Fund entering into credit default

16 Nerrill Lynch international Investment Funds

swaps must at all times be able t o meet the redemption requests.

Credit default swaps are valued on a regular basis according to

verifiable and transparent valuation methods reviewed by the

Company's auditor.

Excessive Trading Policy The Funds do not knowingly allow investments that are

associated with excessive trading practices, as such practices may

adversely affect the interests of all shareholders Excessive trading

includes indiv duals or groups of individuals whose securities

transactions seem t o follow a timing pattern or are characterised

by excessively frequent or large trades.

Investors should, however, be aware that the Funds may be

utilised by certain investors for asset allocation purposes or by

structured product providers, which may require the periodic re-

allocation of assets between Funds. This activity will not normally

be classed as excessive trading unless the activity becomes, in the

opinion of the Directors, too frequent or appears t o fol low a

timing pattern.

As well as the general power of Directors t o refuse subscriptions

or conversions at their discretion, powers exist in other sections of

this Prospectus t o ensure that shareholder interests are protected

against excessive trading. These include:

fair value oricing -Appendix B paragraph 15;

price swinging - Appendix B paragraph 16(c);

in-specie redemptions - Appendix 6 paragraphs 22-23; and

conversion charges -Appendix B paragraphs 18-20.

In addition, where excessive trading is suspected, the Funds may:

combine Shares that are under common ownership or control

for the purposes of ascertaining whether an individual or a

group of iidividuals can be deemed t o be involved in

excessive trading practices. Accordingly, the Directors reserve

the right to reject any application for switching and/or

subscription of Shares from investors whom they consider to

be excessive traders;

adjust the Net Asset Value per Share t o reflect more

accurately the fair value of the Funds' investments at the

point of valuation. This will only take place if the Directors

believe that movements in the market price of underlying

securities mean that in their opinion, the interests of all

shareholders will be met by a fair price valuation; and

levy a redemption charge of 2 % of the redemption proceeds

t o shareholders whom the Directors, in their reasonable

opinion, suspect of excessive trading This charge will be

made for the benefit of the Funds, and affected shareholders

will be warned in advance if such a fee is likely t o be charged

Investment Objectives & Policies Investors must read t h e Special Risk Considerations section

above before investing i n any o f the f o l l o w i n g Funds.

There can b e no assurance t h a t t h e objectives of each Fund

will b e achieved.

Each Fund is managed separately and in accordance with the

investment and borrowing restrictions specified in Appendix A.

Unless defined otherwise in the individual investment policies of

the Funds, the following definitions, investment rules and

restrictions apply t o all Funds of the Company:

Where an individual investment policy of a Fund refers to

70% of its total net assets being invested in a specific type or

range of investments, the remaining 30% of the total net

assets may be invested in financial instruments of companies

or issuers of any site in any sector o f the economy globally,

unless the individual investment policy of such Fund contains

further restrictions. Where an individual investment policy of

a Bond Fund refers t o 70% of its total net assets being

invested in a specific type of investments, such Bond Fund

may, within the remaining 30% of its total net assets, invest

up t o 30% of its total net assets in money market

instruments, up t o 25% of its total net assets in convertible

bonds and bonds with warrants attached and up to 10% of

its total net assets in equities.

Where an investment policy requires a particular percentage

t o be invested in a specific type or range of investments, such

requirement will only apply under normal market conditions

and is subject t o liquidity and/or market risk hedging

considerations arising from the issuance, switching or

redemption of Shares.

Funds may hold cash and near-cash instruments on an

incidental basis.

Funds may use derivative instruments (including those on

foreign exchange) as provided for in Appendix A.


Unless specifically stated to the contrary, the currency

exposure of the Funds will normally be left unhedged.

Where the term "Europe" is used, it refers t o all European

countries including the UK, Eastern Europe and former Soviet

Union countries.

Where the term "Greater China" is used, i t refers t o the

People's Republic of China, Hong Kong and Taiwan.

Funds investing globally or in Europe (including the BRlC

Fund) may contain investments in Russia, sublect always t o

the 10% limit referred t o in the "Emerging Markets" section

above except for investment in securities listed on either the

Russian Trading Stock Exchange or the Moscow Interbank

Currency Exchange, which have been recognised as being

regulated markets.

For the purpose of these investment oblectives and policies all

references t o "transferable securities" shall include "money

market instruments and both fixed and floating rate

instruments".

Where a Fund invests in initial public offerings or new debt

issues, the prices of securities involved in initial public

offerings or new debt issues are often subject t o greater and

more unpredictable price changes than more established

securities.

Funds which include "Absolute Returns" in their title seek to

achieve positive returns, however, this should not be

interpreted t o mean or imply that an absolute return is

guaranteed, as there can be circumstances where negative

returns are generated

The Asian Dragon Fund seeks t o maximise total return

expressed in US dollars. The Fund invests at least 70% of its total

net assets in the equity securities of companies domiciled in, or

exercising the predominant part of their economic activity in,

developing markets located in Asia. The Fund wil l not invest in

Japan.

The Asian Tiger Bond Fund seeks t o maximise total return


net assets in fixed income transferable securities, and at least

70% of its total net assets in the fixed income transferable

securities of issuers domiciled in, or exercising the predominant

part of their economic activity in, designated "Asian Tiger

Countries". These countries include South Korea, the People's

Republic of China, Taiwan, Hong Kong, the Philippines, Thailand,

Malaysia, Singapore, Vietnam, Cambodia, Laos, Myanmar and

Indonesia. The Fund may invest in high yield fixed income

transferable securities. The Fund may also invest in fixed income

transferable securities that are the subject of bankruptcy

proceedings or otherwise in payment default or in significant risk

of being in payment default at the time of purchase. The currency

exposure of the Fund is flexibly managed.

The BRlCFund seeks t o rnaximise total return expressed in US

dollars. The Fund invests at least 70% of its total net assets in the

equity securities of companies domiciled in, or exercising the

predominant part of their economic activity in, Brazil, Russia,

India or Greater China.

The Conservative Allocation fund (Euro) follows an asset

allocation policy, wi th the principal objective of managing

volatility of capital value, subject to which the Fund seeks t o

maximise total return expressed in euro. The Fund invests globally

in fixed income transferable securities (which may include some

high yield fixed income transferable securities) and may also

invest t o a lesser extent in equities. Total return may be derived

from either capital or income. The Fund may invest without

limitation in securities denominated in currencies other than the

reference currency (euro). The currency exposure of the Fund is

flexibly managed.

The Conservative Allocation Fund (US Dollar) follows an asset

allocation policy, wi th the principal objective of managing

volatility o f capital value, subject t o which the Fund seeks t o

maximise total return expressed in US dollars. The Fund invests

globally in fixed income transferable securities (which may include

some high yield fixed income transferable securities) and may also

invest to a lesser extent in equities. Total return may be derived

from either capital or income. The Fund may invest without


reference currency (US dollars). The currency exposure of the

Fund is flexibly managed.

The Continental European Growth Fund seeks t o maximise

total return expressed in euro The Fund invests at least 70% of its total net assets in the equity securities of companies domiciled

in, or exercising the predominant part of their economic activity


in Europe, excluding the UK The Fund places particular emphasis

on companies that, in the opinion of the Investment Adviser,

exhibit growth Investment characteristics, such as sustainable

organic top line growth and high or improving returns on capital.

The Corporate Bond Fund (Euro) seeks to maximise total return

expressed in euro The Fund invests globally at least 90% of its

total net assets in investment grade fixed income transferable

securities At least 70% of the Fund's total net assets are invested

in corporate debt The Fund may invest without limitation in fixed

income transferable securities denominated in currencies other

than the reference currency (euro) although any currency

exposure is normally hedged back into euro

With effect from 31 July 2006, the name of the Corporate Bond

Fund (Euro) and its investment policy and oblective will be as

follows:

The Euro Corporate Bond Fund seeks t o maximise total return

expressed in euro. The Fund invests at least 70% of its total net

assets in investment grade corporate fixed income transferable

securities denominated in euro. Currency exposure is flexibly

managed.

The Emerging Europe Fund seeks t o maximise total return


assets in the equity securities of companies domiciled in, or


developing European countries. It may also invest in companies

domiciled in and around, or exercising the predominant part of

their economic activity in and around, the Mediterranean region.

The Emerging Markets Bond Fund seeks t o maximise total

return expressed in US dollars. The Fund invests at least 90% of

its total net assets in fixed income transferable securities, and at

least 70% of its total net assets in the fixed income transferable

securities of governments, agencies and companies domiciled in,

or exercising the predominant part of their economic activity in,

developing markets. The Fund may invest in both subinvestment

grade and investment grade fixed income transferable securities.

The Fund may also invest in fixed income transferable securities

that are the subject of bankruptcy proceedings or otherwise in

payment default or in significant risk of being in payment default.

This will normally be on a limited basis and will not exceed 20%

of total net assets at the time of purchase. The Fund may invest in

fixed income transferable securities denominated in currencies

other than US dollars. Currency exposure is flexibly managed.

The Emerging Markets Fund seeks t o maximise total return

expressed in US dollars. The Fund invests globally at least 70% of

its total net assets in the equity securities of companies domiciled

in, or exercising the predominant part of their economic activity

in, developing markets. Investment may also be made in the


predominant part of their economic activity in, developed

markets that have significant business operations in these

developing markets.

The Euro Bond Fund seeks t o maxirnise total return expressed in

euro. The Fund invests at least 90% of its total net assets in

investment grade fixed income transferable securities. A t least

70% of the Fund's total Net Assets are invested in Fixed Income

transferable securities denominated in euro. Most currency

exposure is normally hedged back into euro.

With effect from 29 May 2006, the investment policy and

objective of the Euro Bond Fund will be as follows:

The Euro Bond Fund seeks to maximise total return expressed in

euro. The Fund invests at least 80% of its total net assets in

Investment grade fixed income transferable securities. A t least

70% of total net assets will be invested in fixed income

transferable securities denominated in euro. Currency exposure is

flexibly managed.

The Euro-Markets Fund seeks t o maximise total return

expressed in euro The Fund invests at least 70% of its total net

assets in the equity securities of companies domiciled in those EU

Member States participating in EMU It may also invest in those

EU Member States that, in the opinion of the Investment Adviser,

are likely t o loin EMU in the foreseeable future and in companies

based elsewhere that exercise the predominant part o f their

economic activity in EMU - participating countries.


objective of the Euro-Markets Fund will be as follows:

The Euro-Markets Fund seeks t o maximise total return


assets in the equity securities of companies domiciled in those EU

Member States participating in EMU. Other exposure may


include, without limitation, investments in those EU Member

States that, in the opinion of the Investment Adviser, are likely t o

join EMU in the foreseeable future and companies based

elsewhere that exercise the predominant part o f their economic

activity in EMU-participating countries.

The European Fund seeks t o maximise total return expressed in

euro The Fund invests at least 70% of its total net assets in the


predominant part of their economic activity in, Europe.

The European Focus Fund seeks to maximise total return


assets in a concentrated portfolio of equity securities of

companies domiciled in, or exercising the predominant part of

their economic activity in, Europe.

The European Growth Fund seeks to maximise total return



exercising the predominant part of their economic activities in,

Europe. The Fund places particular emphasis on companies that,

in the opinion of the Investment Adviser, exhibit growth

investment characteristics, such as sustainable organic top line

growth and high or improving returns on capital.

The European Opportunities Fund seeks t o maximise total

return expressed in euro. The Fund invests at least 70% of its

total net assets in the equity securities of smaller capitalisation


their economic activity in, Europe. Smaller capitalisation

companies are those whose market capitalisation is similar t o the

market capitalisation of companies in the Citigroup EM1 European

Index at the time of the Fund's investment.

The European Value Fund seeks t o rnaximise total return




Europe. The Fund places particular emphasis on companies that

are, in the opinion of the Investment Adviser, undervalued and

therefore represent intrinsic investment value.

The Euro Reserve Fund aims t o balance growth wi th security o f

capital and high liquidity expressed in euro. The Fund invests at

least 90% of its total net assets in investment grade fixed income

transferable securities denominated in euro and euro cash. The

Fund is managed so that the average remaining maturity of the

Fund's assets will at no time exceed 12 months.

The Global Allocation Fund seeks t o maximise total return

expressed in US dollars. The Fund invests globally in equity, debt

and short term securities, of both corporate and governmental

issuers, wi th no prescribed limits. In normal market conditions the

Fund will invest at least 70% of its total net assets in the

securities of corporate and governmental issuers. The Fund

generally will seek t o invest in securities that are, in the opinion of

the Investment Adviser, undervalued. The Fund may also invest in

the equity securities of small and emerging growth companies.

The Fund may also invest a portion of its debt portfolio in high

yield fixed income transferable securities. Currency exposure is

flexibly managed.

The Global Bond Fund (Euro) seeks t o maximise total return

expressed in euro. The Fund invests globally at least 90% of its

total net assets in fixed income transferable securities and at least

70% of its total net assets in investment grade fixed income

transferable securities that are issued or explicitly guaranteed by a

national government. The Fund may invest without limitation in

fixed income transferable securities denominated in currencies

other than the reference currency (euro), although most currency

exposure is normally hedged back into euro.

The Global Bond Fund (US Dollar) seeks t o maximise total

return expressed in US dollars. The Fund invests globally at least

90% of its total net assets in fixed income transferable securities,

and at least 70% of its total net assets in investment grade fixed

income transferable securities that are issued or explicitly

guaranteed by a national government. The Fund may invest

without limitation in fixed income transferable securities

denominated in currencies other than the reference currency (US

dollars), although most currency exposure is normally hedged

back into US dollars.

The Global Capital Securities Absolute Return Fund seeks t o

achieve an absolute return in euro. The Fund invests at least 90%

of its total net assets in investment grade fixed income

transferable securities. At least 70% of the Fund's total net assets

are invested in Capital Securities that are issued globally. The

average duration of the Fund is not normally more than 2 years.

The Fund may invest without limitation in fixed income

transferable securities denominated in currencies other than the

20 Merrill Lynch international Invertment Funds

reference currency (euro). Currency exposure is flexibly managed,

although at least 90% of total net assets wil l be exposed t o euro.

The Global Dynamic Equity Fund seeks t o maximise total return

expressed in US dollars. The fund invests globally, with no

prescribed country or regional limits, at least 70% of its total net

assets in equity securities. The Fund will generally seek t o invest in

securities that are, in the opinion of the Investment Adviser,

undervalued. The Fund may also invest in the equity securities of

small and emerging growth companies. Currency exposure is

flexibly managed.

The Global Equity Core Fund seeks t o maximise total return


its total net assets in the equity securities of companies domiciled

in, or exercising the predominant part of their economic activity,

in developed markets. The Fund adopts a core approach, which

under normal market conditions will result in the Fund having in

excess of 70 holdings.

The Global Equity Diversified Fund seeks t o maximise total

return expressed in US dollars. The fund invests globally at least

70% of its total net assets in the equity securities of companies

domiciled in, 3r exercising the predominant part of their

economic activity in, developed markets The Fund adopts a

diversified approach which under normal market conditions wi:l

result in the Fund having in excess of 100 holdings

The Global Focus Fund seeks t o maximise total return expressed

in US dollars. The Fund invests globally in a concentrated

portfolio of equity securities with at least 70% of its total net

assets invested in companies domiciled in, or exercising the

predominant oart of their economic activity in, developed

markets.

The Global Fundamental Value Fund seeks t o maximise total

return expressed in US dollars. The Fund invests globally at least

70% of its total net assets in the equity securities of companies

domiciled in, or exercising the predominant part o f their

economic activity in, developed markets. The Fund places

particular emphasis on companies that are, in the opinion of the

Investment Adviser, undervalued and therefore represent intrinsic

investment value.

The Global Growth Fund seeks t o maximise total return

expressed in US dollars. The Fund invests at least 70% of i ts total


exercising the predominant part of their economic activity, in

developed markets. The Fund places particular emphasis on

companies that, in the opinion of the Investment Adviser, exhibit

growth investment characteristics, such as sustainable organic top

line growth and high or improving returns on capital.

The Global High Yield Bond Fund (Euro) seeks t o maximise total

return expressed in euro, a significant portion of which may be

derived from income. The Fund invests globally at least 90% of its

total net assets in fixed income transferable securities, and at least

70% of its total net assets in high yield fixed income transferable

securities. The Fund may invest in fixed income transferable

securities that are the subject of bankruptq proceedings or

otherwise in payment defaillt or in significant risk of being in

payment default at the time of purchase. The Fund may invest

without limitation in fixed income transferable securities

denominated in currencies other than the reference currency (euro),

although any currency exposure is normally hedged back into euro.

The Global Opportunities Fund seeks t o maximise total return


its total net assets in the equity securities of smaller capitalisation

companies. Smaller capitalisation companies are those whose

market capitalisation is similar t o the market capitalisation of

companies in the Citigroup EM1 Global Index at the time of the

Fund's investment. The fund's geographic portfolio weighting is

closely in line wi th that of its benchmark index.

The Global SmallCap Fund seeks t o maximise total return


its total net assets in the equity securities of smaller capitalisation

companies. Smaller capitalisation companies are those whose

market capitalisation is similar t o the market capitalisation of

companies in the MSCI World Small Cap index at the time of the

Fund's Investment. Although it is likely that most of the Fund's

investments wil l be in companies located in the developed

markets of North America, Europe and the Far East, the Fund may

also invest in the developing markets of the world. Currency

exposure is flexibly managed.

The Greater China Fund seeks t o maxirnise total return

expressed in US dollars. The Fund invests at least 70% of i t s total



Greater China.


The lndia Fund seeks t o maximise total return expressed in US

dollars. The Fund invests at least 70% of its total net assets in the


predominant part of their economic activity in, India. (In normal

market conditions the Fund will invest exclusively via the

Subsidiary).

The Japan Fund seeks to maximise total return expressed in US

dollars The Fund invests at least 70% of i t s total net assets in the


predominant part of their economic activity in, Japan.


objective of the Japan Fund will be as follows:

The lapan fund seeks t o maximise total return expressed in yen.

The Fund invests at least 70% of its total net assets in the equity

securities of companies domiciled in, or exercising the

predominant part of their economic activity in, Japan.

The Japan Opportunities Fund seeks t o maximise total return


net assets in the equity securities of smaller capitalisation

companies domiciled in, or exercising the predominant part o f

their economic activity in, Japan. Smaller capitalisation companies

are those whose market capitalisation is similar t o the market

capitalisation of companies in the Citigroup EM1 Japan Index at

the time of the Fund's investment.


objective of the Japan Opportunities Fund will be as follows:

The Japan Opportunities fund seeks t o maxirnise total return

expressed in yen. The Fund invests at least 70% of its total net

assets in the equity securities of smaller capitalisation companies

domiciled in, or exercising the predominant part of their

economic activity in, Japan. Smaller capitalisation companies are

those whose market capitalisation is similar t o the market

capitalisation of companies in the Citigroup EM1 Japan Index at

the time of the Fund's investment.

The Japan Value fund seeks to maximise total return expressed

in US dollars The Fund invests at least 70% of its total net assets

in the equity securities of companies domiciled in, or exercising

the Predominant part of their economic activity in Japan The

Fund places particular emphasis on companies that are, in the

opinion of the Investment Adviser, undervalued and therefore

represent intrinsic investment value.


objective of the Japan Value Fund will be as follows:

The Japan Value Fund seeks t o maximise total return expressed

in yen. The Fund invests at least 70% of its total net assets in the


predominant part o f their economic activity in Japan. The Fund

places particular emphasis on companies that are, in the opinion

of the Investment Adviser, undervalued and therefore represent

intrinsic investment value.

The Latin American fund seeks t o maximise total return




Latin America. Latin America includes Mexico, Central America,

South America and the Spanish speaking islands of the

Caribbean, including Puerto Rico.

The New Energy Fund seeks to maximise total return expressed

in US dollars. The Fund invests globally at least 70% of its total

net assets in the equity securities of companies whose

predominant economic activity is in the alternative energy and

energy technology sectors. Emphasis may be given t o renewable

energy, automotive and on-site power generation, energy storage

and enabling energy technologies.

The Pacific Equity Fund seeks t o maximise total return expressed

in US dollars. The Fund invests at least 70% of its total net assets

in the equity securities of companies domiciled in, or exercising

the predominant part of their economic activity ir., Pacific Basin

and Australasian countries. Currency exposure is flexibly

managed.

The Short Duration Bond Fund (Euro) seeks t o maxirnise total

return expressed in euro. The Fund invests at least 90% of its


securities. A t least 70% of the Fund's total net assets are invested

in fixed income transferable securities wi th a duration of less than

five years. The average duration is not normally more than three

years. At least 70% of the Fund's total net assets will be invested

in fixed income transferable securities issued by entities within

those EU Member States participating in EMU. The Fund may


invest withoLt limitation in fixed income transferable securities

denominated in currencies other than the reference currency

(euro), although most currency exposure is normally hedged back

into euro.

The Sterling Reserve Fund aims t o balance growth with security

o f capital and high liquidity expressed in sterling. The Fund invests

at least 90% of its total net assets in investment grade fixed

income transferable securities denominated in sterling and

sterling cash. The Fund is managed so that the average remaining

maturity of the Fund's assets will at no time exceed 12 months.

The Strategic Allocation Fund (Euro) follows an asset

allocation policy that seeks t o maximise total return expressed in

euro. The Fund invests globally in equities and fixed income

transferable securities (which may include some high yield fixed

income transferable securities). The Fund may invest without


reference currency (euro). The currency exposure of the Fund is

flexibly managed.

The Strategic Allocation Fund (US Dollar) follows an asset

allocation policy that seeks t o maximise total return expressed in

US dollars The Fund invests globally in equities and fixed income

transferable securities (which may include some high yield fixed

income transferable securities). The Fund may invest without


reference currency (US dollars). The currency exposure of the

Fund 15 flexibly managed

The Thailand Fund seeks t o maximise total return expressed in

US dollars. The Fund invests at least 70% of its total net assets in

the equity securities of companies domiciled in, or exercising the

predominant part o f their economic activity in, Thailand.

The UK Focus Fund seeks to maximise total return expressed in

sterling. The Fund invests in a concentrated portfolio of equity

securities with at least 70% of its total net assets invested in

companies domiciled in or exercising the predominant part of

their economic activity in the UK.

The United Kingdom Fund seeks t o maximise total return

expressed in sterling. The Fund invests at least 70% of its total


exercising the predominant part o f their economic activity in,

the UK.

The US Basic Value Fund seeks t o maximise total return



exercising the predominant part of their economic activity in, the

US. The Fund places particular emphasis on companies that are,

in the opinion of the Investment Adviser, undervalued and

therefore reoresent basic investment value.

The US Dollar Core Bond Fund seeks t o maximise total return

expressed in US dollars, a significant portion of which may be

derived from income. The Fund invests at least 90% of its total

net assets in investment grade fixed income transferable

securities. A t least 70% of the Fund's total net assets are invested

in fixed income transferable securities denominated in US dollars.

Currency exposure is flexibly managed.

The US Dollar High Yield Bond Fund seeks t o maximise total

return expressed in US dollars. The Fund invests at least 90% of

i ts total net assets in fixed income transferable securities. At least

70% of the Fund's total net assets are invested in high yield fixed

income transferable securities denominated in US dollars. The

Fund may invest in fixed income transferable securities that are

the subject of bankruptcy proceedings or otherwise in payment

default or in significant risk of being in payment default at the

time of purchase. Most currency exposure is normally hedged

back into US dollars.

The US Dollar Low Duration Bond Fund seeks t o maximise

total return expressed in US dollars. The Fund invests at least

90% of its total net assets in investment grade fixed income

transferable securities. A t least 70% of the Fund's total net assets

are invested in fixed income transferable securities denominated

in US dollars wi th a duration of less than five years. The average

duration is not normally more than three years. Currency


The US Dollar Reserve Fund aims to balance growth with

security of capital and high liquidity expressed in US dollars The

Fund invests at least 90% of its total net assets in investment

grade fixed income transferable securities denominated in US

dollars and US dollar cash The Fund is managed so that the

average remaining maturity of the Fund's assets will at no time

exceed 12 months

The US Flexible Equity Fund seeks t o maximise total return





US. The Fund normally invests in securities that, in the opinion of

the Investment Adviser, exhibit either growth or value investment

characteristics, placing an emphasis as the market outlook

warrants.

The US Focused Value Fund seeks t o maximise total return




US. The Fund places particular emphasis on companies that are,

in the opinion of the Investment Adviser, undervalued relative to

its assessment of their current or prospective condition or relative

t o prevailing market ratios.

The US Government Mortgage Fund seeks a high level of

income expressed in US dollars. The Fund invests at least 90% of

its total net assets in fixed income transferable securities. A t least

80% of the Fund's total net assets are invested in fixed income

transferable securities issued or guaranteed by the United States

Government, its agencies or instrumentalities, including

Government National Mortgage Association ("GNMA")

mortgage-backed certificates and other US Government securities

representing ownership interests in mortgage pools, such as

mortgage-backed securities issued by Fannie Mae and Freddie

Mac. All securities in which the Fund invests are US dollar-

denominated securities.

The US Growth Fund seeks t o maximise total return expressed in

US dollars The Fund invests at least 70% of its total net assets in

the equity securities of companies domiciled in, or exercising the

predominant part of their economic activity in, the US. The Fund

places particular emphasis on companies that have exhibited

above-average growth rates in earnings.

The US Opportunities Fund seeks to maximise total return


net assets in the equity securities of smaller capitalisation


their economic activity in, the US. Smaller capitalisation


market capitalisation of companies in the Russell 2000 Growth

index at the time of the Fund's investment.

The US SmallCap Value Fund seeks to maximise total return

expressed in US dollars. The fund invests at least 70% of its total

net assets in the equity securities of smaller capita!isation


their economic activity in, the US. Smaller capitalisation


market capitalisation of companies in the Russell 2000 or the S&P

SmallCap 600 at the t ime of the Fund's initial investment. The

Fund places particular emphasis on companies that are, in the

opinion of the Investment Adviser, undervalued.

The World Bond Fund seeks t o maximise total return expressed

in US dollars. The Fund invests at least 90% of its total net assets

in fixed income transferable securities, and at least 70% of i ts


securities. Currency exposure is flexibly managed.

The World Energy Fund seeks t o maximise total return

expressed in US dollars. The Fund invests globally a t least 70% of

its total net assets in the equity securities of companies whose

predominant economic activity is in the exploration,

development, production and distribution of energy. Additionally,

the Fund may invest in companies seeking to develop and exploit

new energy technologies.

The World Financials Fund seeks t o maximise total return



predominant economic activity is financial services.

The World Gold Fund seeks to maximise total return expressed in

US dollars. The Fund invests globally at least 70% of its total net

assets in the equity securities of companies whose predominant

economic activity is gold-mining. It may also invest in the equity

securities of companies whose predominant economic activity is

other precious metal or mineral and base metal or mineral mining.

The Fund does not hold physical gold or metal.

The World Healthscience Fund seeks t o maximise total return



predominant economic activity is in healthcare, pharmaceuticals,

medical technology and supplies and the development of biotechnology.


The World lncome fund seeks t o maximise total return

expressed in US Dollars, a significant portion of which may be

derived from income The Fund invests globally at least 90% of i ts

total net assets in fixed income transferable securities

denominated in a variety of currencies. In normal market

conditions, the Fund will invest in securities denorrinated in a variety of currencies In normal market conditions, the Fund will

invest in securities denominated in at least three different

currencies with no set portion of the Fund's investments required

to be denom nated in any single currency The Fund's average

maturity will be less than 15 years The Fund may also invest in

fixed-income securities that are below investment grade

Currency exposure is flexibly managed.

With effect from 29 May 2006, the investment objective and

policy of the World Income Fund will be as follows:

The World lncome fund seeks t o maximise total return

expressed in US dollars, a significant portion of which may be

derived from income. The Fund invests globally at least 90% of its

total net assets in fixed income transferable securities

denominated in a variety of currencies. In normal market

conditions, the Fund will invest in securities denominated in at

least three different currencies wi th no set portion of the Fund's

investments required t o be denominated in any single currency.

The Fund's average maturity will be less than 15 years. The Fund

may invest in fixed-income securities that are below investment

grade and in the securities of emerging market issuers. Currency


The World Mining Fund seeks to maximise total return


its total net assets in the equity securities of mining and metals

companies whose predominant economic activity is the

production of base metals and industrial minerals such as iron ore

and coal. The Fund may also hold the equity securities of

companies whose predominant economic activity is in gold or

other precious metal or mineral mining. The Fund does not hold

physical gold or metal.

The World Technology Fund seeks t o maximise total return

expressed in US dollars The Fund invests globally at least 70% of

i ts total net assets in the equity securities of companies whose

predominant economic activity is in the technology sector.

New Funds or Share Classes

The Directors may create new Funds or issue further Classes of

Shares. This Prospectus will be supplemented to refer t o these

new Funds or Classes.

Classes and Form of Shares Shares in the Funds are divided into Class A, Class B, Class C,

Class D, Class E, Class J, Class Q and Class X Shares, representing

eight different charging structures Shares are further divided into

Distributing arid Non-Distributing Share classes. Non-Distributing

Shares do not pay dividends, whereas Distributing Shares pay

dividends See 'Dividends' on page 30 for further information

Class A Shares

Class A Shares are available to all investors as Distributing and

Non-Distributing Shares and are issued in registered form

("Registered Shares") and global certificate form ("Global

Certificates"). Unless otherwise requested, all Class A Shares will

be issued as Registered Shares.

Class B Shares

Class B Shares are available as Distributing and Non-Distributing

Shares t o clients of Merrill Lynch (which provides nominee

facilities to investors) and t o other investors at the discretion of

the Investment Manager Class B Shares are available as

Registered Shares only.

Class C Shares

Class C Shares are available as Distributing and Non-Distributing

Shares to clients of Merrill Lynch (which provides nominee

facilities to investors) and t o other investors at the discretion of

the Investment Manager. Class C Shares are available as

Registered Shares only.

Class D Shares

Class D Shares are available as Distributing and Non-Distributing

Shares and are issued as Registered Shares only. Unless otherwise

requested, all Class D Shares will be issued as Registered Shares.

They are only available at the Investment Manager's discretion.

Class E Shares

Class E Shares are available in certain countries, subject t o the

relevant regulatory approval, through specific distributors selected

by the Investment Manager (details of which may be obtained

from the Transfer Agent or the investor Service Centre). They are

available as Non-Distributing and Distributing Shares, Registered


Shares and Global Certificates for all Funds. Unless otherwise

requested, all Class E Shares will be issued as Registered Shares.

Class J Shares

Class J Shares are initially only offered to fund of funds in Japan

and will not be publicly offered in Japan. However, they may be

offered t o other funds of funds in the future, at the discretion of

the Investment Manager. Class J Shares are available as

Distributing and Non-Distributing Shares. No fees are payable in

respect of Class J Shares (instead a fee will be paid t o the

Investment Manager or affiliates under an agreement). Class J

shareholders bear all expenses along with other shareholders pro

rata to the Funds' respective Net Asset Values.

Class Q Shares

Class Q Shares are a grandfathered Share Class available t o

investors previously holding shares in other funds sponsored by

entities within the ML Group. Within the Company they are no

longer available for subscription or conversion into. Class Q

shareholders who wish t o convert into another o f the Company's

Funds may do so free of charge and will receive Class B Shares.

Further, any CDSC history will be carried over into the new Fund.

Merrill Lynch at its sole discretion may refuse any request to

transfer record of ownership of Class Q Shares held by or through

Merrill Lynch.

Class X Shares

Class X Shares are available as Non-Distributing Shares and

Distr buting Shares, and are issued as Registered Shares only at

the discretion of the investment Adviser and i ts affiliates. No fees

are payable in respect of Class X Shares (instead a fee will be paid

t o the Investment Adviser or affiliates under an agreement) Class

X shareholders bear all expenses along with all other shareholders

pro rata t o the Funds' respective Net Asset Values

Class X Shares are only available t o institutional investors within

the meaning of Article 129 of the law of 20 December 2002 on

undertakings for collective investment, as amended Investors

must demonstrate that they qualify as institutional investors by

providing the Company and its Transfer Agent or the Investor

Service Centre wi th sufficient evidence.

General

Investors purchasing any Class of Shares through a distributor will

be subject t o the distributor's normal account opening

requirements. Title t o Registered Shares is evidenced by entries in

the Company's Share register. Shareholders will receive

confirmation notes of their transactions. Registered Share

certificates are not issued.

Global Certificates are available under a registered common

global certificate arrangement operated with Clearstream

International and Euroclear. Global Certificates are registered in

the Company's share register in the name of Clearstream

International and Euroclear's common depository. Physical share

certificates are not issued in respect o f Global Certificates. Global

Certificates may be exchanged for Registered Shares under

arrangements between Clearstream International, Euroclear and

the Central Paying Agent.

Bearer Shares (which were available prior t o 1 February 2002)

may be exchanged for Class A Registered Shares or Global

Certificates without charge and bearer Share certificates and

coupons (if any) must be surrendered upon a request for

redemption or conversion.

Information on Global Certificates and their dealing procedures is

available on request from the Transfer Agent or the Investor

Service Centre.

Dealing in Fund Shares Daily Dealing

Dealings can normally be effected daily. Orders for subscription,

redemption and conversion of Shares should be received by the

Transfer Agent or the Investor Service Centre before 12 noon

Luxembourg time on any Dealing Day and the prices applied will

be those calculated in the afternoon of that day. Any dealing

orders received by the Transfer Agent or the Investor Service

Centre after 12 noon Luxembourg time on a Dealing Day will be

dealt wi th on the next Dealing Day. A t the discretion of the

Company, prices applied t o orders backed by uncleared funds

may be those calculated in the afternoon of the day following

receipt of cleared funds. Further details and exceptions are

described under the sections entitled "Application for Shares",

"Redemption of Shares" and "Conversion of Shares" below.

Once given, applications t o subscribe and instructions t o redeem

or convert are irrevocable except in the case of suspension or

deferral (see paragraphs 28 t o 31 of Appendix 6) and cancellation

requests received before 12 noon Luxembourg time. Dealing

orders placed by telephone will be recorded. Redemption and

conversion orders for bearer Shares (where available) must be in

writing.


Orders placed through distributors rather than directly wi th the

Transfer Agent or the Investor Service Centre may be subject t o

different procedures which may delay receipt by the Transfer

Agent or the Investor Service Centre. Investors should consult

their distributor before placing orders in any Fund.

Where shareiolders subscribe for or redeem Shares having a

specific value, the number of Shares dealt in as a result of

dividing the specific value by the applicable Net Asset Value per

Share is rounded t o t w o decimal places Such rounding may result

in a benefit to the Fund or the shareholder.

Shareholders should note that the board of Directors may

determine t o restrict the purchase of Shares when i t is in the

interests of the Company and/or its shareholders t o do so,

including when the Company or any Fund reaches a site that

could impact the ability t o find suitable investments for the

Company and Fund.

General

Confirmation notes, cheques and other documents sent by post

will be at the risk of the investor.

Prices of Shares All prices are determined after the deadline for receipt of dealing

orders 12 noon Luxembourg time on the Dealing Day concerned.

Prices are quoted in the Dealing Currency(ies) of the relevant

Fund as shown on page [ 2 ] . In the case of those Funds for which

t w o or more Dealing Currencies are available, if an investor does

not specify h s choice of Dealing Currency at the time of dealing

then the Base Currency of the relevant Fund will be used.

The previous Dealing Day‘s prices for Shares may be obtained

during business hours from the Investor Service Centre. They will

also be published in such countries as required under applicable

law and at the discretion of the Directors in a number of

newspapers worldwide. The Company cannot accept any

responsibility for error or delay in the publication or non-

publication or prices. Historic dealing prices for all Shares are

available from the Fund Accountant or the Investor Service Centre

Class A, Class D, Class E, Class J a n d Class X Shares

Class A, Class D, Class E, Class J and Class X Shares may normally

be acquired or redeemed at their Net Asset Value Prices may

include or have added t o them, as appropriate: (I) an initial

charge; (11) a distribution fee; and (111) in limited circumstances,

adjustments t o reflect fiscal charges and dealing costs (see

paragraph 16(c) of Appendix B).

Class B, Class C and Class Q Shares

Class B, Class C and Class Q Shares may normally be acquired or

redeemed at their respective Net Asset Values No charge is

added t o or included in the price payable on acquisition or

redemption but, with the exception of Rejerve Fund Shares, a

CDSC, where applicable, will be deducted from the proceeds of

redemption as described under “Fees, Charges and Expenses” on

page 32 and in paragraph 17 of Appendix B Prices may include

or have added t o them, as appropriate. (I) a distribution fee; and

(id, in limited circumstances, adjustments to reflect fiscal charges

and dealing costs (see paragraph 16(c) o f Appendix B).

The specific levels of fees and charges that apply t o each Class of

Share are explained in more detail under “Fees, Charges and

Expenses” on pages 32 t o 33 and in Appendices B, C and E.

Application for Shares Applications

Merrill Lynch clients may enter their application orders through

their Merrill Lynch Financial Advisers. In all other cases, initial

applications for Shares must be made t o the Transfer Agent or

the Investor Service Centre on the application form. For initial

applications for Shares by fax or telephone, applicants will be sent

an application form that must be completed and returned by mail

to the Transfer Agent or the Investor Service Centre t o confirm

the application. Failure t o provide the original application form

will delay the completion of the transaction and consequently the

ability t o effect subsequent dealings in the Shares concerned.

Subsequent applications for Shares may be made in writing or by

fax or telephone. Investors who do not specify a Share Class in

the application will be deemed t o have requested Class A Non-

Distributing Shares.

Applications for Registered Shares should be made for Shares

having a specified value and fractions of Shares will be issued

where appropriate, Global Certificates will be issued in whole

Shares only.

The right is reserved to reject any application for Shares or t o

accept any application in part only In addition, issues of Shares of

any or all Funds may be suspended, and a subscription

constituting over 5% of a Fund’s value may not be accepted, as

described in paragraphs 28 and 32 of Appendix 6, respectively.


The investor acknowledges that personal information and

information relating t o its investments supplied t o a member of

the ML Group may be processed by or transferred t o or disclosed

t o any company in the ML Group world-wide in order t o

administer the services for which the investor has applied or may

apply in the future

This may involve the transfer of data by electronic media

including the internet. The investor's information will be held in

confidence and not shared other than as described without the

investor's permission or as required by applicable law. The

investor may at any time request information about the

companies in the ML Group and the countries in which they

operate. The investor consents t o its information being processed,

transferred or disclosed within the ML Group. The investor may at

any time request a copy of the information held about it and

request any errors t o be corrected. Should the investor wish t o

enjoy protection in respect o f i t s personal data under

Luxembourg law i t should make its application direct t o the

Transfer Agent.

Sett lement

For all Shares, settlement in cleared funds must be made within

three Business Days of the relevant Dealing Day. If timely

settlement is not made (or a completed application form is not

received for an initial subscription) the relevant allotment of

Shares may be cancelled and an applicant may be required t o

compensate the relevant distributor and/or the Company (see

paragraph 25 of Appendix B).

Payment instructions are summarised at the back of this

Prospectus. Whenever payment is t o be made by cheque, dealing

may be delayed until cleared funds have been received, therefore

payment by telegraphic transfer is strongly recommended. Cash,

endorsed cheques or travellers cheques will not be accepted.

Settlement should normally be made in the Dealing Currency for

the relevant Fund or, if there are two or more Dealing Currencies

for the relevant Fund (see page 121). in the one specified by the

investor. An investor may, by prior arrangement with the Transfer

Agent or the Investor Service Centre, provide the Transfer Agent

wi th any other freely convertible currency and the Transfer Agent

will arrange the necessary currency exchange transaction. Any

such currency exchange will be effected at the investor's cost

Minimum Subscription

The minimum initial subscription in respect of any Class of Shares

of a Fund is currently US95.000 (except for Class D Shares where

the minimum is US$lO million) or the approximate equivalent in

the relevant Dealing Currency. The minimum for additions t o

existing holdings of any Class of Shares of a Fund is US$l,OOO or

the approximate equivalent. These minima may be varied for any

particular case or distributor or generally. Details of the current

minima are available from the Transfer Agent or the Investor

Service Centre.

M o n e y Launder ing Prevention

As a result o f anti-money laundering regulation, additional

documentation may be required for subscriptions for Shares. The

circumstances under which i t is required and the precise

requirements are set out in the notes on the application form.

This information will be used t o verify the identity of investors or,

in some cases, the status of financial advisers; it will be used only

for compliance with these requirements. Please note that the

Transfer Agent or the Investor Service Centre reserve the right in

all cases t o request further documentation or information. Failure

t o provide documentation may result in the withholding of

redemption proceeds. If you have any questions regarding the

identification documentation required, you should contact the

Investor Service Centre or the Transfer Agent.

Redemption of Shares Applications to Redeem

Merrill Lynch clients may enter their redemption orders through

their Merrill Lynch Financial Advisers. In all other cases,

instructions for the redemption of Registered Shares should

normally be given by completing the form that accompanies

confirmation notes and is available from the Transfer Agent or

the Investor Service Centre. They may also be given t o the

Transfer Agent or the Investor Service Centre in writing, or by fax

or telephone followed in each case by confirmation in writing

sent by mail t o the Transfer Agent or the Investor Service Centre.

Failure t o provide written confirmations may delay settlement o f

the transaction (see also paragraph 25 of Appendix E). Written

redemption requests (or written confirmations of such requests)

must include the full name($ and address of the holders, the

name of the Fund, the Class (including whether i t is the

Distributing or Non-Distributing Share class), the value or number

of Shares t o be redeemed and full settlement instructions and

must be signed by all holders. Redemptions of bearer Shares wil l

be effected only upon receipt of the relevant certificates.


Redemptions may be suspended or deferred as described in

paragraphs 28 t o 31 of Appendix B.

Set t lement

Subject t o paragraph 21 of Appendix B, redemption payments

will normally be despatched in the relevant Dealing Currency

within three Business Days of the relevant Dealing Day, provided

that the relevant documents (as described above and any

applicable rroney laundering prevention information) have been

received. On written request t o the Transfer Agent or the Investor

Service Centre, payment may be made in such other currency as

may be freely purchased by the Transfer Agent wi th the relevant

Dealing Currency and such currency exchange will be effected at

the shareholder's cost

Redemption payments for Shares are normally made by

telegraphic transfer t o the shareholder's bank account at the

shareholder's cost. If bank account details are not available,

payment will be made by cheque, made payable t o the registered

shareholder(s) and sent t o the registered address. For

redemptions of bearer Shares, payment will be in accordance

with settlement instructions received

Details of redemptions in specie are set out in paragraphs 22 and

23 of Appendix B.

Conversion of Shares Switch ing Between Funds and Share Classes Investors may make conversions of their shareholdings between

the same Class of Shares of the various Funds and thereby alter

the balance of their portfolios t o reflect changing market

conditions.

Shareholders may also convert between Distributing and Non-

Distributing Shares of the same Class or between hedged and un-

hedged Shares of the same Class (where available) However,

converting between Distributing (M) Shares and Distributing (D)

Shares (as defined in the Dividend Section on page 30) is not

permitted.

In addition, shareholders may convert between any Class of UK

Distributor Status Shares in the relevant currency and the

equivalent class of Distributing Shares in non-distributor status

currencies. Such conversions may be a taxable event in the hands

of investors and may give rise t o an immediate tax charge. In

addition, a conversion between Shares held in different funds will

give rise to an immediate tax charge.

As tax laws differ widely from country t o country, shareholders

should consult their tax advisers as to the tax implications of such

a conversion in their individual circumstances. Shareholders who

participate in the Merrill Lynch Global Funds Advisor ("MLGFA")

service may be able t o use their Class B Shares, Distributing and

Non-Distributing, t o fund their participation. If they do this, their

Class B Shares will be converted for Class A Distributing or Class

A Non-Distributing Shares, as appropriate. No conversion fee and

no CDSC or initial charge will be levied by the Fund on such

conversions. Such a conversion may be a taxable event.

Shareholders participating in the MLGFA service should, however,

inform themselves of any fees payable under this service.

With the exception of Class Q Shares to Class B Shares (see

"Classes and Form of Shares" above) and, at the Investment

Adviser's discretion and provided always that the investor is an

institutional investor, conversion from any Class of Shares t o Class

X Shares and any other conversions from Shares of one Class of a

Fund t o Shares of another Class of either the same or a different

Fund (for example, conversions of Class A Shares into Class 6

Shares) are not permitted.

For holders of all Classes of Shares, there is normally no

conversion charge by the Investment Manager. However,

conversion charges may apply in some circumstances - see

paragraphs 18 t o 20 of Appendix 6.

Instructions t o Convert

Instructions for the conversion of Registered Shares should

normally be given by completing the appropriate form that

accompanies confirmation notes and is available from the

Transfer Agent or the Investor Service Centre. They may also be

given by fax or telephone or in writing t o the Transfer Agent or

the Investor Service Centre. Conversion instructions must include

the full name(s) and address of the holder($, the name of the

Fund, the Class (including whether i t is the Distributing or Non-

Distributing Share class), the value or number of Shares t o be

converted and the Fund to be converted into (and the choice of

Dealing Currency of the Fund where more than one is available)

and whether or not they are UK Distributor Status Shares.

Where the Funds t o which a conversion relates have different

Dealing Currencies, currency will be converted at the relevant rate


of exchange on the Dealing Day on which the conversion is

effected.

Conversions may be suspended or deferred and an order for

conversion into a Fund constituting over 5% of a Fund’s value

may not be accepted, as described in paragraphs 28 and 32 of

Appendix B, respectively.

However, no conversions are allowed either into or out o f the

Funds that are only registered in Luxembourg, Germany and

Switzerland, as indicated on page [2].

Exchange Privilege through Merrill Lynch Merrill Lynch allows investors who have acquired Shares through

it t o exchange their Shares for shares with a similar charging

structure of certain other funds, provided that Merrill Lynch

believes that an exchange is permitted under applicable law and

regulations. Details of this exchange privilege can be obtained

from financial advisors or any regional Investor Service Centre.

Minimum Dealing 8 Holding Sizes The Company may refuse t o comply with redemption, conversion

or transfer instructions if they are given in respect of part o f a

holding in the relevant Class of Shares which has a value of less

than US%l,OOO or the approximate equivalent in the relevant

Dealing Currency or if to do so would result in such a holding of

less than USB5,OOO (or approximate equivalent) in value. These

minima may be varied for any particular case or distributor or

generally. Details of any variations t o the current minima shown

above are available from the Transfer Agent or the Investor

Service Centre.

Dividends Dividend Policy

The Directors’ current policy is t o retain and reinvest all net

income except for income from the Distributing Funds and

income from the UK Distributor Status Funds where the policy IS

t o distribute substantially all the investment income for the period

after deduction of expenses

For those Funds which offer Distributing Shares, the frequency at

which the dividend payment is made is determined by the Fund

type, wi th dividends normally paid as follows:

Annually on the Equity Distributing Funds, at the discretion of

the Directors. UK Distributor Status Equity Funds will pay an

annual dividend, if there is income t o distribute.

Distributing Shares wi th alternative payment frequencies may be

introduced at the Directors’ discretion. Confirmation of additional

distribution frequencies and the date of their availability can be

obtained from the Company’s registered office and the Investor

Service Centre. An updated list of available Distributing Shares


Calculation of Dividends

Those Distributing Shares which pay dividends monthly are

further divided into Shares as follows:

Those Shares for which dividends are calculated monthly are

known as Distributing (M) Shares.

Those Shares for which dividends are calculated daily are

known as Distributing (D) Shares.

Investors may choose to hold either Distributing (M) Shares or

Distributing (D) Shares but may not hold both.

Distributing Shares wi th annual dividend payment are known as

Distributing (A) Shares.

Monthly on the Bond Distributing Funds where there is

income t o distribute.

30 lvlerrill Lynch international investment Funds

The calculat on method for each type is described below:

Distributing (M)

Distributtng (0)

The dividend is calculated monthly based upon income accrued during the dividend period less expenses The dividend is distributed to shareholders based upon the number of Shares held a t the month end.

The dividend is calculated daily based upon daily-accrued income less expenses, for the number of Shares outstanding on that day A cumulative monthly dividend is then distributed t o shareholders based upon the number of Shares held and the number of days for which they were held during the period. Hoiders of Distributing (a) Shares shall he entitled to dividends f rom the date of subscription to the date of redemption.

The dtvidend is calculated annually based upon income accrued during the dividend period less expenses The divtdend is distributed to shareholders based upon the number of Shares held a t t h e end of the annual period

Distributing (A)

Declaration, Payment of Reinvestment of Div idend

The chart below describes the declaration and payment of

dividends and the reinvestment options available to shareholders

Distributing Shares (Df

Distrrbuting Shares (M)

&outing Shares (A)

Distributing Shares DS(N1

Distributing Shares D W

Last Business Day of each calendar month in the Dealing Currencyb) of the relevant Fund

Within 10 Business Days of declaration to shareholders holding Shares during the period following the previous declaration

Within 10 Business Days of declaration to shareholders registered in the share reglster on the Business Day prior to the declaration date

Within 10 Business Days of the last Business Day of each fiscal year

Last Business Day of each fiscal year in the Deakng Currency(ies) of the relevant Fund

Last Business Day of each calendar month

Last Business Day of each fiscal year

Within 10 Business Days of declaration to sharehalders registered in the share register on the Business Day prior to the declaration date 5

Declarations and payment o f dividends are announced in the

Luxemburger Wort in Luxembourg.

No initial charge or CDSC is made on Class A, Class B or Class Q Distributing Shares, respectively, issued by way of dividend

reinvestment.

It should be borne in mind that re-invested dividends are likely t o

be treated for tax purposes in most lurisdictions as income

received by the shareholder.

Dwidends of $US 100 or Dividends of

shareholder's bank sameCtas of the same Fund, account by relegraphic i tfnles the shareholder requests transfer in the otherwise. Such,further Shares, shareholoer's chosen including fractions, will be issued dealing currency at the within 10 Business Days of the shareholder's cost declaration date (except Merrill (except Merrill Lynch Lynch investgrs) investors)

All dividends are paid directly to the shareholder's bank account by telegraphic transfer (except Mt investors)

'Dividends will not be automatically reinvested Where cnvestorr would like the distdbUtron amount to be reinvesed in further Shares of the

*same form of the same Class of the same Fund, this can be arranged through the Transfer Ageh'


Fees, Charges and Expenses Please see Appendix E for a summary of fees a n d charges.

Further information on fees, charges and expenses is given in

paragraphs 19 t o 24 of Appendix C, and the following

information must be read in conjunction with those paragraphs.

Management Fees

The Investment Manager receives the management fees from the

Company as shown in Appendix E. The level of management fee

varies according t o which Fund the investor buys and, with the

exception of some Class Q Shares, is the same for all Classes of

Shares within each Fund These fees accrue daily, are based on

the Net Asset Value of the relevant Fund and are paid monthly

The Investment Manager pays certain costs and fees out of the

management fee, including the fees of the Investment Advisers

and the Investor Service Centre.

Dis t r ibut ion Fees

The Principal Distributor receives annual distribution fees as

shown in Appendix E These fees accrue daily, are based on the

Net Asset Value of the relevant Fund (reflecting, when applicable,

any adjustment t o the Net Asset Value of the relevant Fund, as

described in paragraph 16(c) o f Appendix E) and are paid

monthly

Other Fees

The Company also pays the fees of the Custodian, the Transfer

Agent, the Fund Accountant and the Paying Agents.

In i t ia l Charge

On application for Shares an initial charge, payable t o the

Investment Manager, o f up t o 5% may be added t o the price of

Class A Shares (except in the case of the Reserve Funds). An initial

charge of up t o 3 % may be added t o the price of some Class E

Shares and 2% on the Class D Shares (see Appendix E for details)

subject t o terms available from relevant distributors.

Deferred Sales Charge

A CDSC will be deducted from redemption proceeds and paid on

redemption of all Class B and Class Q Shares of all Funds (except

in the case of Reserve Funds) unless the Shares are held for more

than four years. For shorter holding periods, the table below sets

out the maximum rate of the CDSC that wi l l apply, which is a

percentage of the lower of the original purchase price or o f the

redemption price of the Class B or Class Q Shares redeemed:

Relevant Hold ing Period CDSC

Up t o one year 4.0%

Over one year and up t o t w o years 3.0% Over two years and up t o three years

Over three years and up t o four years

2.0%

1 .O%

Over four years Zero

CDSC of 1 % will be deducted from redemption proceeds and

paid on redemption o f all Class C Shares of all Funds (except in

the case of Reserve Funds) unless the Shares are held for more

than a year.

Further information on the CDSC IS contained in paragraph 17 of

Appendix E.

Conversion Charges

Conversion charges may be applied by selected disrributors, on

conversion from a Reserve Fund into another of the Company's

Funds, or on unduly frequent conversions. See paragraphs 18 t o

20 of Appendix B for further details.

Redempt ion Charges

A redemption charge of 2% of the redemption proceeds can be

charged to a shareholder at the discretion of the Directors where

the Directors, in their reasonable opinion, suspect that

shareholder of excessive trading as described under Section

"Excessive Trading Policy" on page I o f this Prospectus This

charge will be made for the benefit of the Funds, and

shareholders will be warned in advance if tt is likely t o be

charged This charge wil l be in addition t o any applicable

conversion charge or deferred sales charge.

General

Over time, the different charging structures surnmarised above

may result in Shares of different Classes of the same Fund, which

were bought at the same time, producing different investment

returns. In this context investors may also wish t o consider the

services provided by their distributor in relation to their Shares.

The Investment Manager may rebate all of or part of its fees and

charges to distributors as described in paragraph 22 of Appendix C.

Expenses

The Company pays certain expenses of the Management

Company, the Paying Agents, the Fund Accountant, the

Custodian, the Principal Distributor, the Transfer Agent and the


Investment Manager and other distributors and agents, and

expenses incurred in operating the Investor Service Centre The

Company pays all other expenses incurred in i t s operation (see

paragraphs 19 t o 24 of Appendix C) including fees and expenses

of the Directors (see paragraph 7 of Appendix C) and exchange

costs arising from the calculation of the dealing prices in the

additional Dealing Currencies (such exchange costs being met by

the relevant Fund)

Al locat ion o f Fees a n d Expenses

Each Fund is charged wi th all fees and expenses specifically

attributable to it If a fee or an expense is attributable solely to a

particular Class of Shares of a Fund, then these will be borne by

Shares of that Class only. Other expenses are allocated between

the Funds on an equitable basis, normally pro rata t o their

respective Not Asset Values Fees and expenses are normally

charged first against investment income. A shareholder who

makes a subscription or a redemption of Shares through the

Paying Agent or other entities responsible for processing Share

transactions may be charged wi th the expenses linked t o the

activity carried out by such entities in Italy

Taxation The following summary is based on current law and practice,

which is subject t o change.

Investors should inform themselves of, a n d w h e n

appropr ia te consult t h e i r professional advisers on, t h e

possible tax consequences of subscribing for, buying,

holding, redeeming, conver t ing or sel l ing shares under t h e

laws o f the i r country of citizenship, residence or domicile.

Investors should n o t e t h a t t h e levels a n d bases of, a n d rel ief

from, taxat ion can change.

Luxembourg

Under presert Luxembourg law and practice, the Company is not

liable t o any Luxembourg income or capital gains tax, nor are

dividends paid by the Company subject t o any Luxembourg

withholding tax. However, the Company is liable to a tax in

Luxembourg 3f 0 05% per annum or, in the case of the Reserve

Funds and Class X Shares, 0 01 % per annum of its Net Asset Value,

payable quarterly on the basis of the value of the net assets of the

respective Funds at the end of the relevant calendar quarter No

stamp or other tax is payable in Luxembourg on the issue of Shares

The benefit of the 0.01 YO tax rate is available t o Class X Shares

on the basis of Luxembouig legal, regulatory and tax provisions

as known t o the Company at the date of this Prospectus and at

the time of admission of subsequent investors. However, such

assessment is subject to interpretations on the status of an

institutional investor by any competent authorities as will exist

from time t o time Any reclassification made by an authority as t o

the stdtus of an investor may submit all Class X Shares to a tax of

0 05%.

Shareholders are not subject t o any capital gains, income,

withholding, gift, estate, inheritance or other tax in Luxembourg

(except for shareholders domiciled, resident or having a

permanent establishment m Luxembourg and except for certain

former residents of Luxembourg if they own more than 10% of the Shares o f the Company).

Un i ted K ingdom

The Company is not resident in the UK for tax purposes and i t is the intention of the Directors t o continue t o conduct the affairs

o f the Company so that it does not become resident in the UK.

Accordingly i t should not be subject t o UK taxation. Shares in the

Company other than the UK Distributor Status Shares will not

qualify as shares in a distributing fund for UK tax purposes, wi th

the result that any gain realised by a UK resident shareholder on

disposal of Shares will be an 'offshore income gain' subject to tax

as income. UK residents will be subject t o income tax on any

dividends received in respect of such shares in the Company.

Dividends received by taxpayers from the Company will,

dependent on personal circumstances, be subject t o income tax.

The attention of individuals ordinarily resident in the UK is drawn

t o sections 739 and 740 of the 1988 Act which contains

provisions for preventing avoidance of income tax by transactions

resulting in the transfer of income t o persons (including

companies) abroad and may render them liable t o taxation in

respect of undistributed income and profits o f the Company.

The provisions of 513 TCGA 1992 may apply t o a holding in the

Company. Where 50% of the Shares in a Fund are held by five or

fewer participators, then any UK person who holds more than

10% of the Shares may be taxed upon his proportion of the

chargeable gain realised by the Fund as calculated for UK tax

purposes.

On the death of a UK resident and domiciled individual

shareholder, the shareholder's estate (excluding the UK Distributor

Status Shdre Classes) will be liable t o pay income tax on any


accrued gain. Inheritance tax may be due on the value of the

holding after deduction of income tax and subject t o any

available inheritance tax exemptions.

A UK corporate shareholder may be subject t o UK taxation in

relation t o its holdings in the Fund. It may be required t o apply a

mark to market basis in respect of its shareholding in accordance

with the Finance Act 1996 and any increases or decreases in

value of the Shares may be taken into account as receipts or

deductions for corporation tax purposes.

UK Dist r ibutor Status

The Directors currently intend t o apply in respect of each account

period for certification of the UK Distributor Status Shares in the

United Kingdom as a distributing share class for United Kingdom

tax purposes. However, no guarantee can be given that such

certification wil l be obtained.

The changes t o the offshore funds legislation in the Finance Act

2004 allow separate sub-funds or share classes t o qualify on their

own for UK Distributor Status whilst having non-qualifying sub-

funds or share classes within the same fund. It is currently

intended that the Company will apply for certification of the UK

Distributor Status sterling denominated Class A Shares under the

Offshore Funds legislation contained in the Income and

Corporation Taxes Act 1988 (the "1988 Act"). Provided such

certification is obtained, shareholders who are UK taxpayers (1.e.

resident or ordinarily resident in the UK for tax purposes) will

(unless regarded as trading in securities) have any gain realised

upon disposal or conversion of the Company's Share treated as a

capital gain which will be subject t o UK capital gains tax.

Otherwse any such gain would be treated as income subject t o

income tax. (In the case of individuals domiciled for UK tax

purposes outside the UK any gain will in either case be subject t o

tax only t o the extent that the gain was, or was deemed t o be,

remitted to the UK).

With a view t o qualifying for certification, i t is intended that the

Company wil l currently make distributions on the UK Distributor

Status Sterling Denominated Class A Shares as are required for

this purpose by the 1988 Act. However, if H M Revenue & Customs were t o determine that the gains realised by this type of

Share upon the disposal of investments were of a revenue rather

than a capital nature, on the basis that the Company was

carrying on a trade of dealing in securities, this type of Share

would not qualify for certification since i t does not normally

intend to distribute such gains. The Company will not apply for

certification of any other share classes, or dealing currencies,

under the 1988 Act.

Generally

Dividends and interest received by the Company on its

investments are generally subject t o irrecoverable withholding

taxes in the countries of origin.

Investors should inform themselves of, and when appropriate

consult their professional advisers on, the possible tax

consequences of subscribing for, buying, holding, redeeming,

converting or selling Shares under the laws of their country of

citizenship, residence or domicile. Investors should note that the

levels and bases of, and reliefs from, taxation can change.

In accordance wi th the provisions of the European Union Savings

Directive ("EUSD") which came into force on 1 July 2005, EU

countries will be required t o apply either exchange information or

withholding tax on certain interest payments t o EU resident

individuals and potentially t o residents of dependent territories. A

further option allowing an EU resident shareholder t o submit an

exemption certification is also available. Although exchange of

information is the ultimate objective of the EUSD, Luxembourg,

Belgium and Austria and certain dependent or associated

territories of EU Member States (such as Jersey, Guernsey and the

Isle of Man) have opted to apply withholding tax during a

transitional period. Under these arrangements withholding tax

will apply when a Luxembourg paying agent makes distributions

from and redemptions of shares in certain funds and where the

beneficiary of these proceeds is an individual residing in another

Member State. However, an individual may specifically request t o

be brought within the EUSD exchange of information regime

which would result in no withholding tax being applied but

instead information regarding the distribution or redemption

being provided t o the fiscal authority in the country in which he is

resident. Broadly, the funds affected will be those which invest in

money debts.

Meetings and Reports Meet ings

The annual general meeting of shareholders of the Company is

held in Luxembourg at 11 a.m. (Luxembourg time) on 20 June

each year (or if such day is not a Business Day in Luxembourg, on

the next following Business Day in Luxembourg). Other general

meetings of shareholders will be held at such times and places as

34 Verrill Lynch International Investment Funds

are indicated in the notices of such meetings. Notices are sent t o

registered shareholders and published in accordance with

Luxembourg law by publication in the Luxemburger Wort and

(when legally required) the Recueil des Societes et Associations d u

Memorial in Luxembourg

Reports

Financial periods of the Company end on 31 December each year

The annual report containing the audited financial accounts of

the Company and of each of the Funds in respect of the

preceding financial period is available within four months of the

relevant year-end An unaudited interim report is available wi:hin

two months of the end of the relevant half-year. Copies of all

reports are available upon request a t the registered office of the

Company and from the Investor Service Centre Registered

shareholders will be sent a personal statement of account twice-

yearly

Merfill Lynch International Investment Funds 35

Appendix A

Appendix A - investment and Borrowing Powers and Restrictions Investment and Borrowing Powers 1. The Company's Art'cles of Association permit it to iivest in

transferable securities and other liquid f inanm assets, to the full extent permitted by Luxembourg law The Articles have the effect that, subject to tne law, it is at the Directors' discretion to determine any restrictions on investment or on borrowing or on the pledging of the Company's assets

Investment and Borrowing Restrictions 2 . The following restrictions of Luxembourg law and (where relevant)

of the Directors currently apply to the Company

2.1. The investments of each Fund shall consist of: Transferable securities a i d money market instruments admitted to official listings on stock exchanges in Member States of the European Uison (the "EU"),

Transferable securities and money market instruments dealt in

on other regulated markets in Member States of the EU, that are operatiig regularly, are recognised and are open to the public,

Transferabe securities and money market instruments admitted to official listings on stock exchanges in any other country in Europe, Asia, Oceania, the Ame74can continents and Africa.

Transferab'e securities and money market instruwnts dea't in on other regulated markets that are operating regularly, are recognised and open to the public of any other country in Europe, Asia, Oceania, the American continents and Africa,

Recently issued transferable securities and money market instruments provided that the terms of the issue include an undertaking that app'ication w II be made for admission to the offic,al listing on o l e of t9e stock exchanges as specified in a) and c) or regulated markets that are operating regularly, are recognised and open to the publzc as specified in b) and d) and that such admission is secured within a year of issue,

Units of UCITS and/or other undertakings for collectm investment ("UCls") within the meaning of Article 1(2), first and second indents of Directive 85/61 l/EEC, as amended, whether they are situated in a Member State or not, provided that:

such other UCls are authorised under laws which

prov de that they are subject to supervision considered by t+e Commission de Su-veillance du Secteur Financier ("CSSF") to be equivaleit to that laid down in Community law, and that cooperation between authorities is sufficiently ensured,

the level of protection for unitholders in the other UCIs is equivalent to that provided for unitho!ders in a UCITS, and in particular that the rules on asset segregation,

bovowiig, lending, ano uncovered sales of transferable securities a i d money market instruments are equivalent to the reqJirements of Dieective 85/61 I/EEC, as awnded,

the bJSineSS of the other UCls is repoqed in half-yearly a i d aniual reports to enable an assessmeit to be made of the assets and Iiabilittes, income and operations over the reporting period;

no more than 10% of the UCITS' or t+e other UCls' assets (or of the assets of any sub-fund thereof, provided that the principle of segregation of liabilities of the different compartments is ensured in relation to ti ird part es), whose acquisition is contemplated, can, according to he i r constitutional documents, be invested in aggregate II units of other UCITS or other UCIs,

(9) depos8ts with c r d t institutions which are repayable 01 demand or have the right to be withdrawn, and matu'iig in no more than 12 months, provided that the credit institution has its registered office in an EU Member State or, if the registered office of the credit institution is situated in a no?- Member State, provided that it is subject to prudential rules considered by the CSSF as equivalent to those laid down in Community law,

(+) financial derivative instruments, including equivalent cash- settled instruments, dea!t in on a regulated market; and/or financial derivative instruments dealt in over-the-counter ('OTC derivatives'), provided that:

the underlying consists of instruments described in sub- paragraphs (a) to (9) above, financial indices, interest rates, foreign exchange rates or currencies, in which the Company may invest according to its investment ob,ectives;

the counterparties to OTC derivative transactions are institutions subject to prudential supervision. and be'onging to the categories approved by the CSSF, and

the OTC derivatives are subject to reliab'e and verifiable valuation on a daily basis and can be sold, liquidated or closed by an offsetting transaction at any time at their fa.r value at the Company's initiat,ve;

(I) money market instruments other than those dealt in on a regulated market, which fall under Article 1 of the 2002 Law, if the issue or issuer of s x h instruments is itself regulated for the pdrpose of protecting nvestors and savings, and provided that they are:

iswed or guaranteed by a central, regioial or local authority or central bank of an EU Member State, the Europeai Central Bank, the EU or the European

36 Werrill Lynch International Investment Funds

Appendix A

2.2

2.3

2.4

Investmeit Bank, a non-Member State or, in the case of a Federa' State, by one of the members making up the federation, or by a pub1 c international body to which one or more Member States belong, or

issJed by an undertaking any securities of which are dealt in on regulated markets referred to in subparagraphs (a), (b) or (c) above, or

9 issued or guaranteed by an establishment subject to prudential supervision, in accordance with criteria defined by Community :aw, or by an establishment which is subject to and complies w,th prudential rules considered by the CSSF to be at least as stringent as those laid down by Community law, or

* issued by other bodses belonging to the categories approved by the CSSF provided t ia t investments in such instruments are subject to investor protection equivalent to that laid dowi in the first, the second or the third indent and provided that the issuer is a company whose capital and reserves amount to at least EUR 10 millioi and which presents and pubi shes its annual accomts in accordance wit+ Directive 78/660/EEC (1 ), is an entity which, within a group of companies which includes one or several listed compaiies, is ded catea to t i e financ ng of the group or is an entity which is dedicated to the financing of securitisation vehicles which benefit from a banting Inquid ty line

Furthermore, each Fund may invest no more than 10% of its net assets in securities and money market instruments other than those referred to in sub-paragraph 2.1 (a) to (I).

Each Fund may acquire the uiits of UCITS aid/or other UCls referred to in paragraph 2.1. (f), provided that the aggregate investment In UCITS or other UCl's does not exceed 10% of the net assets of each Fund, unless otherwise provided for in the relevait Fund's investment policy.

When each Fund has acqu:red shares of UCITS and/or other UCIs, the assets of the respective UCITS or other UCls do not have to be combined for the purposes of the limits laid down in paragraph 2.5.

When a Fund invests in the units of other UCITS and/or other UCls that are managed, directly or by delegation, by the same investment manager or by any othev company with which the investment manager is linked by common management or coitrol, or by a substantial direct or indirect holding, that no subscription or redemption fees may be charged to the Company 01 its investment in the units of such other UCITS and/or UCIs.

A Fund may hold ancillary liquid assets

2 5 A Fund may not invest in any one issuer in excess of the limits set out below (a) Not more than 10% of a Fund's net assets may be invested in

transferable securities or money market instruments issued by the same entity

(b) Not more than 20% of a Fund's net assets may be invested in

deposits made with the same entity

(c) By way of exception, the 10% Iim t stated in the first paragraph of this section may be increased to'

a maximum of 35% if the transferable securities or money market instruments are issued or guaranteed by an EU Member State, by i ts local authorities, by a non- Member State or by public international bodies to whlch one or more Member States belong,

a maximum of 25% in the case of certain bonas when these are issued by a credit institution which has its

registered office in an EU Member State and is subject by law to special public supervision designed to protect bond holoers In particular, sums deriv ng fro71 the issue of these bonds must be invested in conformity with t+e law in assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in the event of fa lure of the issuer, woJld be used on a priority basis for the reimbursement of the principal and payment of the accrued interest When a Fund invests more than 5 % of i ts net assets in the bonds referred to in this paragraph and issued by one issuer, the total value of these investments may not exceed 80% of the value of the net assets of such Fund

(d) The total value of the transferable securities or money market instruments held by a Fund in the issuing bodies in each of which it invests more than 5% of its net assets must not then exceed 40% of the va:ue of i ts net assets. This limitation does not apply to deposits and OTC derivative transactions made with financial institutions subject to prudential supervision. The traisferable securities and money market instruments referred to in the two indents of paragraph 2.5. (c) above shall not be taken into account for the purpose of applying the limit of 40% referred to in this paragraph.

Notwithstanding tne individual limits laid down in sub- paragraphs 2 5 (a) to (d) above, a Fuid may not combine - investments in transferable securities or money market

instrments issJed by a single entity, and/or

- deposits made with a single entity, and/or

- exposures aris,ng from OTC derivative transaaons undertaken with a single entity,

Merrill Lvnch International Investment Funds 37

Appendix A

in excess of 20% of its net assets.

When a transferable secilrity or money market instrument embeds a der vative. the latter must be taken into account when complyiig with tne requirements of the above mentioned restr ctions

The limits provided for ;n sub-paragraphs 2.5. (a) to (d) above may not be combmed, and thus investments in trarlsferable securities or money market instruments issued by the same entity or in deposits or derivative instruments made with this entity carried out in accordance with paragraphs 2.5. (a) to (d) shall under no circumstances exceed in total 35% of the net assets of the Fund.

Companies wh:ci are included in the same group for the purposes of consolidated accounts, as defined i i accordance wit1 Drective 83/349/ EEC or in accordance with recognised international accounting rules, are regarded as a single entity for the purpose of calculating the investment limits mentioned in sub-paragraphs 2.5. (a) to (d) above.

The Fund may not invest cumulatively more that 20% of its

net assets in transferable securities or money market instruments of the same group sdbjed to restrictions 2.5. (a) and the three indents under 2.5. (d) above.

W thout preludice to the limits laid down in paragraph 2 7

below, the limit of 10% laid down in sub-paragraph 2.5 (a) above is raised to a maximum of 20% for investment in equity and/or debt securities issued by the same body whei the aim of the investwnt policy of a Fund is to replicate the composition of a certain equity or debt securities index which is recognmd by the CSSF, on the following basis

the compos tion of the index is sufficiently diversified.

the index represents a n adequate benchmark for the market to which it refers,

it is publ:shed in an appropriate manner.

This limit is 35% bvhere that proves to be justified by exceptional market conditions in particular in regulated markets where ce%n transferable securities or money market instruments are highly dominant. The investment up to this limit is only permitted for a single issuer.

By way of derogation, each Fund is authorised t o invest up t o 100% of i t s net assets in different transferable securities and money market instruments issued or guaranteed by an EU Member State, i t s local authorities, by another member state of the OECD or public international bodies of which one or more EU Member States are members, provided that (i) such securities are part of at least six different issues and (ii) securities f rom any one issue do not account for more than 30% o f the net assets of such Fund.

2 6 The Company may not invest in shares with vat ng rights enabling it to exercise s gnificant influence over the management of the issuing body

2.7 The Company may not:

(a) Acquire more than 10% of tne shares with non-voting rights of one and the same issuer.

(b) Acquire more than 10% of the debt securitiesof one and the same issuer.

(c) Acquire more than 25% of the units of one and the same urldertating for collective investment

(d) Acquire more than 10% of the money market instruments of any single issuer.

The limits stipulated in sub-paragraphs 2 7 (b) (c) and (d) above may be disregarded a t tlle time of acquisition if, at that time, the gross amount of debt securities or of the money market instruments, or the net amount of securities in issue cannot be calculated

2.8. The limits stipulated in paragraphs 2.6. and 2.7. above do not apply to'

(a) Transferable securities and money market instruments issued or guaraiteed by an EL! Member State or its local authorites;

(b) Transferable securities and money market instruments issued or guaraiteed by a non-EU Member State,

(c) Traisferable securities and money market instruments issued by public international institutbns to which one or more EU Member States are members,

(d) Transferable securities held by a Fund in the capital of a company incorporated in a non-Member State investing its assets mainly in the secur:ties of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which such Fund can invest in the securities of issuing bodies of that State. This derogatm, however, shall apply only if in its investment policy the company from the non-Member State complies with the Iim!ts laid down in Articles 43, 46 and 48

(1) and (2) of the 2002 Law. Where the limits set in Articles 43 and 46 of the 2002 Law are exceeded, Article 49 shall apply mutatis mutandis;

(e) Transferable securit es held by the Compaiy in the capital of subsidsaty companies carrying on only the business of management, advice or marketing in t+e country where the subsidiary is located, in regard to the repurchase of units at unitholders' request excluswly on its or their behalf

2.9 The Company may always, in the interest of the shareholders, exercise the subscript,on rights attached to securities, which forms part of its assets.

38 Merrill Lynch International Investmen! Funds

Appendix A

Wben the max mum percentages stated in paragraphs 2 2 through 2.7. above are exceeded for reasons beyond the control of the Compaiy, or as a result of the exercise of subscriptioi rights, the Company must adopt, as a priority ob]ect,ve, sales transactions to remedy the sitdation, taking due account of the iiterests of its

shareholders

2.10. A Fund may borrow to the extent of 10% of :ts total net assets (valued at market value) provided these borrowings are made o i a temporary basis. However, the Company may acquire for the account of a Fund foreign currency by way of back-to-back loan.

2 1 1 Tne Company may not grant credit facilities nof act as guarantor on behalf of third parties. provded that for the pdrpose of this restricton (I) the acquisition of transfefable securities. money market instrdments or other financial investments referred to in sub-paragraphs 2 1 (f), (h) and (I) above, in fu'ly or partly paid form and (11) the permitted lending of portfolio securities shall be deemed not to constitute the making of a loan.

2.12. T+e Ccmpany undertakes not to carry out uncovered sales transactions of transferable securities. money market instruments or othfr financial instruments referred to in sub-paragraphs 2.1. (f), (h) and (I) above; provided that this restriction shall not prevent the Company from making deposits or carrying out accounts in connedion with financial derivatives instruments, permitted with,n the Iim ts referred to above.

2 13 The Company's assets may not include precious metals or certif cates representiog them, com.nodities, commodities contracts, or certificates representing commoditles

2 14 The Company may not purchase or sell real estate or any option, rig+t or interest therein, provided tbat the Company may invest in securities secured by real estate or interests therein or issued by compan es which livest in real estate or interests there n

2 15 The Conpany will in addition comply with sucb further restrictions as may be required by the regulatory authorities in any country in which the Shares are marketed

The Company shall take the risks that it deems reasonable t o reach the assigned objective set for each Fund; however, it

cannot guarantee that it shall reach i t s goals given stock exchange fluctuations and other risks inherent in investments in transferable securities.

3. Financial Techniques and Instruments.

3.1. The Company must employ a risk-management process which enables it to monitor and Teasure at any time the risk of the positions and their contribution to the overall risk profile of the portfolio, it must emp'oy a process for accurate a i d independent assessment of the value of OTC derivative instruments It mdst communicate to the CSSF regularly and in accordance with the detaileo rules defined by the latter, the types of derivative instruments, tne under!ying risks. the quantitative limits a i d the

methods which are chosen in order to estimate the risks assoc ated with traisactions in derivative instruments

3 2 . In addition. the Company is authorised to employ techniques and instruments relating to traisferable securities and to money market instruments under the condit ons and within the limits laid down by t+e CSSF provided that such techniques and instruments are used for the purpose of efficient portfolio management or for hedgmg purposes

3.3 When ticse operations concern the use of derivative instruments, these conditions and limits shall conform to the prov sions laid down in the 2002 Law

Under no circumstances sha I these operations cause the Company to diverge fpom its iwestment policies and investment restrsctions

3 4 The Company will ensure that the global exposure of the underlysng assets shall not exceed the total net value of a Fund. The uiderly ng assets of index based derivative instruments are not combined to the investment limits laid down under sub-paragraphs 2 5 (a) to (d) above

When a transferable security or money market instrument embeds a derivative, the latter must be taken into account when complying with the requirements of the above- mentioned restrictions

The exposure is calculated taking into account the current value of the ilnderlying assets, the counterparty risk, filture market movements and the time available to liquidate the positions.

3 5 Securit'es leiding The Company may enter into securities lending transactions provided that, (a) the transactions are eitered into within a standardised

lending system organised by a recognised securities clearing institution or by a highly rated specialist financial institution,

(b) co'lateral (consisting of cash or government bonds) for the lending is maintained which has a value at least equal to the value of the securities lent; and

(c) lendiig transactions are not carrieo out in respect of securities representing more than 50% of the aggregate market value of the securities in the relevant portfolio. and the term of any lending transaction does not exceed 30 days (unless the lending transact ons are terminable at any time)

Any net income (net of any remuneration to which the Company's stocklend,ng agent is entitled) deriving from securities lending to wh ch the Company is entitled will be re nvested in the Company.

3.6 Repurchase agreements


Appendix A

T i e Company may as bJyer or seller eiter into repurchase agreemeqts whicn cois st in the pdrchase and sale of secur,ties whereby the terms of agreement entmt8e the selw to repurchase from t i e purchaser the securities at an agreed price and t i w , so

long as

(a) during the !ifetime of a repurchase agreement the Company may not sell the securities which are the subject of the agreemeit before the repurchase of the securites by the couiterparty has been carried out or before the repurchase period has expired. and

(b) commitments arising from repurchase agree-nents do not preveit the Company from meetsng redemption obligations.

All sdch permitted transactions must be effected with highly rated spec a:ised financial institutons;

3.7 Risk associated with OTC derivatives The counterparty risk on any transaction involving an OTC dersvative instruments may l o t exceed 10% of the assets of a Fuld when the counterparty is a creeoit institution dom:ciled in the EU or in a country where the CSSF coisiders that supervisory regulations are equivaient to tnose prevailing on the EU This limit is set at 5% in any other case

The Company's delegates will continuously assess the credit or counterparty risk as well as the potential risk, which is for trading achvities, the risx resulting from adverse movements in the leve' of volatility of market prices arld will assess the hedging effectiveness on an ongoing bass. They will define specif,c internal limits applicable to these kinds of operat ons ana monitor the counterparties accepted for these transactions.


Appendix B

Appendix B -Summary of Certain Provisions of the Articles and of Company Practice Articles of Association 1 Terms used in this sumnary that are defined in t i e Articles have

the same meaning beiow (a) Corporate Existence

The Company is a company existing in the form of a sociktk anonyme qualifying as a societe d'mestissement A cap8ta variab'e (SICAV) under t+e name of Merrill Lynch International Investment Funds witn the status of a Part I Undertaking for Collective Investment in Transferable Securities (UCITS)

(b) Sole Object The so:e object of the CoTpany ,s to place the fuids avai ab'e to it in one or more portfol os of transferable securitses or other assets referred to in A-ticle 41(1) of the 2002 Law, referred to as "Funds", with t i e purpose of spreading investment risks and affording to its shareholders the results of the management of the Company's Funds

(c) Capital The cap% is represented by fu!ly paid Shares of no par value and will at any time be equal to the aggregate va!ue of the net assets of the Funds of the Company. Any variation of the Company's capital has immediate effect.

(d) Fractions Fradions of Shares may be issued only as Registered Shares.

(e) Voting In additson to the right to one vote for each whole Share of wiich he LS the holder at general meetings. a holder of Shares of any particJlar Class will be entitled at any separate meeting of the holders of Shares of tnat Class to one vote for each wiole Share of that Class of which he is the holder

(0 Joint Holders The Company will register Registered Shares jointly iq the nmes of not more than four holders should they so require. In such case the rights attaching to such a Snare must be exercised jo:ntly by a'l those parties in whose names it is registered except that verba! mstruct.ons will be accepted by the Company from any one jo i i t holder in cases where verbal instructions are permitted pursuant to provisions of this Prospectus. Written instructions will be accepted by the Company from any one joint holder where all the holders have previously given written authority to toe Transfer Agent or the Investor Sevice Centre to accept those instructions. Instructions accepted on e:ther of such bases w1I: be bind:ng or all the joint holders concerned.

(9) Allotment of Shares

The Directors are authorised without limitation to a!lot ano issue Shares at any time at the current pr,ce per Share without reservng preferential subscription rights to exsting shareholders

Directors The Articles provide for the Company to be managed by a board of Directors composed of at least three persons Directors are elected by the shareholders. The Directors are vested w th all powers to perfor-n all acts of administration and disposition in the Company's interest In particular the Directors have power to appoint any person to act as a functionary to the Fund.

No contract or other transaction between the Company and any other company or firm shall be affected or invalidated by the fact that any one or more of the Directors or offmrs of the Company is interested in, 07 is a director, assocrate, officer of employee of, that other company or firm.

Indemnity The Company may indemnify any Director or officer against expenses reasonably incurred by him in connection w t h any proceedings to which he may be made a party by reason of such position in the Company or in any other company of which the Compaqy is a shareholder or creditor and from which he is not entitled to be indemnified. except where due to gross negligence or wilfur misconduct on his part.

Winding up and Liquidation The Company may be wound up at any time by a resolution adopted by a general meeting of shareholders in accordance w i t i the provisions of the Articles The Directors must submit the qJestion of the winding up of the Company to a general meeting of shareholders if the corporate capital falls below two-thirds of the minimum capital prescribed by law (the miiimum capital is curreit!y the equivalent of €1.250.000)

On a winding up, assets available for distributton amongst the shareholders will be applied in the following priority 0 first, in the payment of any balance then remasring in

the relevant Fund to the holders of Shares of each Class i,nked to tne Fund, such payment being made in accordaice with any applicab e rights attaching to those Shares, ana otherwise in proportion to the total number of Shares of all the relevant Classes held, and

(11) secondly, in the payment to the holders of Shares of any balance then remaining a i d not comprised in any of the Funds, such balance being apportioned as between the Funds pro rata to the Net Asset Value of each Fund immediately prior to any distribution to s+areholders on a w ndiig up, and payment being made of the amounts so apportioned to the holders of Shares of each Class linked to that Fund in such proportions as the liquidators in their absolute discretion think equitable, subject to the AQ,cles and Luxembourg law

Liquidation proceeds not claimed by shareholders at close of liquidat on of a Fuid will be deposited at the Caisse de


Appendix 6

Coisignation !n Luxembourg and shall be forfeited after thirty years

(k) Unclaimed Dividends If a dividend i a s been declared but not paid, and no coupon has been tendered for such dividend w.thin a period of five years, the Compaiy is entitled under Luxembourg law to declare t i e divideid forfeited for the benefit of the Fund concerned. The Directors have, however, resolved as a matter of policy not to exercise tnis right for at least twelve years after the relevant dividend is oeclared. This policy will not be alte:ed without the sanct:on of t i e shareholders in general meeting.

Restrictions on Holding of Shares 2 Shares will be d,vided into Classes each linked to a Fund More

than one Class of Shares may be linked to a Fund Currently, eight Classes of Shares (Class A. B, C, 0, E, J, Q and X %ares) are linked to each Fund except for the Distributing Funds for which there aw sixteen Classes of Shares (Class A D stribut ng, Class A Non- D stributing, Class B Distributiig, Class B Non-DistribJting, Class C D str,buting, Class C Non-D,str bdting, Class D Distributing. Class D Non-Distributing, C'ass E Non-Distribdting, Class E Distribut,ng, Class J Distributing, Class J Non-Distributing, Class Q 0 stributing, Class Q Non-Distr,buting and Class X Non-Distributing, Class X Distributing Shares) Trley have no preferential or pre-emption rights and are freely transferable, save as referred to below

3 The Directors may impose or relax restr.ctions (including restrict,orls on transfer aid/or the requirement that Shares be issued only irl

registered form) on any Shares or Class of Shares (but not necessari'y on all Shares w i t m the same Class) as they may think necessary to e n s m that Shares are neither acquired nor held by or on behalf of any person in circumstances givlng rise to a breach of the laws or reqJiremeits of any country or governmental or reghtory authority on the part of that pepson or the Company, or which might have adverse taxat on or o twr pecuiiary coisequences for the Cornpaiy, iiclud n5 a requirement to register under arly securities or investment or similar laws or requirements of any country or authority The Directors may in this connectiorl require a shareho der to provide such information as they may consicer necessary to establish whether he is the beneficia' owner of the Shares h a t he holds

If the Company becomes aware h a t any Shares are owned direct'y or benefic.al'y by any person in breach of any law or requirement of a country or governmental or regdlatory autnority, or otherme in the circumstances referred to in th s paragraph, the Directors may require the redemption of such Shares, decline to issue any Share and register any transfer of any Share or decline to accept the vote of a iy person who is precluded from hold ng Snares at a iy meeting of the shareholders of the Company

any US res.dent or otier person spec,fied in Regulation 5 under tne US Secdr ties Act of 1933 as amended from time to time and as may be further supp'emented by resolution of t+e D rectors.

If a shareholder currently resident outside the US becomes resident in the US (and consequendy comes within the defiiition of a US Person), that shareholder wiil be required to redeem its Shares.

Funds and Classes of Shares 5. The Company operates separate investmeit "Funos" and w,thin

each Fund separate Classes of Siares are !inked to that Fund

6 Shares may be issued with or have attached thereto sdch preferred, deferred or other special rights, or such restrictions whetner in regard to dividend, return of cap tal, conversion, transfer, the prce payable on allotmeit or otherwse as the Directors may from t i T e

to time determine and such rights or restrictions need not be attached to all Sllares of the same Class

7. The Directors are permitted to reate more than one Class of Share linked to a single Fund. Tnis allows, for example, the creation of accumulation and distribution Shares, Wares with differeit dealing currencies or Classes of Shares with d fferent featilres as regards panicpation n capital and/or income linked to the same Fund; and also permits different charging stvctures. The Articies provide t ia t certain va7:ations of the rights attached to a Class of Shares may only be made with the sanction of a Class meetins of holders of Shares of that Class.

8. The Directors may require redemption of all the Shares linked to a particular Fuid if the Net Asset Value of the relevant Fund falls below US$l5 million (or the equivalent in any relevant Dealing Currency). The Articles also perm,t tne Directors to not.fy shareholders of the c'osure of any particular Fund wiere they deem it in the interests of t i e shareholders or appropriate because of changes in the economic or political situation affecting the Fund bat in such circumstances the Directors intend as a matter of policy to offer holders of any Class of Shares a free transfer into the same Class of Shares of other Funds. As an alternative. subject to at least 30 days' prior notice to holders of Shares of all Classes of tne relevant Funo, the Directors may arrange for a Fund to be merged with another Fund of the Company or with anotk r Luxembourg UCITS (see also paragraph 25 below). Any such merger wi!I be blnding on the ho!ders of the Shares of the Classes of that Fund.

A Fund may be terminated or merged in circumstances ot+er than those mentioned above with the consent of a malority of the Shares preseit or represented at a meeting of all shareholders of the Classes of Shares of that Fund (at which no quorum recuirement will app'y) Where a Fund is terminated or merged the redemption price payable on termination or merger will be calculated on a basis reflectiig the realisation and liquidation costs on terminating or merging tqe Fund

4 The Directors have resolved that no US Persons will be permitted to own Shares. The Directors have resolved that "US Person" means


Appendix B

The D,rectors have power to suspend deal ngs in the %ares linked to any Fund where it is to be terminated or merged in accordance with tl-e above provisions Such suspension may take effect at any time after the notsce has been g ven by the Directors as mentioned above or, where tne termination or merger requires t i e approva: of a meet ng of holders, after t+e passing of t i e relevant resolotioi. Where dealings in the Shares of the Fund are not suspended, the prices of Shares may be adjusted to reflect the anticipated realisation a id liouldation costs meitmoned above

Valuation Arrangements 9. Under the Articles, for the purpose of determining the issue and

redemption price per Share, the net asset value of Shares shall be determined as to the Shares of each Class of Share by the Company from time to time, but in no instance less than twice monthly, as the board of Directors may direct.

10 The Directors' policy is normally to dea' with requests received before 12 noon Luxembourg time on a Dealing Day on that day, other requests are normally dealt with on tne next Dealing Day

Net Asset Value and Price Determination 11 All prices for transact ons in Shares on a Deaiiig Day are based on

the Net Asset Value per Share of the Class of S17ares concerned, as shown by a valdation made at a time or times determineo by the Directo?s The Directors current'y operate "forward pricing" for ail Funds and Classes of Share, i e , prices are calculated on the Dealing Day concerned after the closing time for acceptance of orders (see page 26) Prices in respect of a Deal,ng Day are normally pub1 shed on the next Business Day Neitier the Compaiy nor the Custodian ca i accept any respons bility for any error in publica:ion, or for non-publication of prices or for any inaccuracy of pvces so published or qJoted Notwithstanding any price quoted by the Company, by the Custodian or by any distributor, a I Vansachons are effected strirtly on t i e basis of the prices calculated as described above If for any reason such prices are required to be recalculated or amended, the terms of any transaction effected on the basis of them will be sJbject to correction aid, where appropriate, the investor may be required to make good any underpayment or reimburse a iy overpayment as appropriate Periodic valuations of holdings in any Fund 07 Class of Shares may be sdpplied by arrangement with the Transfer Ageit or the Investor Service Ceitre

12 The Net Asset Value of each Fund, calculated in its Base Currency, is determined by aggregating tne value of securities and other assets of the Company allocated to the relevant Fund and deducting the liabilities of the Company allocated to that Fund The Net Asset Value per Share of the Classes of Shares of a

particular Fond wi!I reflect any adjustment to the Net Asset Val& of tne relevant Fund described in paragraph 16(c) below and will differ as a result of the allocation of different liabilities to those Classes (see "Fees, Charges and Expenses" 01 pages 25 to 26) and as a result of dividends paid

13 The value of all securities and other assets forming any particular Fdnd's portfolio is determined by last known prices upon close of the exchange on which those secuntes or assets are traded or admitted for trading. For securitmes traded on markets clos ng after the time of the va'uation, last known prices as of this tme or such other time may be used If net transactions in Shares of the Fund on any Dealing Day exceed the threshold referred to in paragraph 16(c) below, then additional procedures apply The va!ue of any securities or assets traded on any other regulated market is

determined in tne same way Where such securities or other assets are adoted or dealt in on or by more than one stock exchange or regulated market the Directors may in their discretion select one of such stock exchanges or regulated markets for such purposes

14 If a security is not traded on or admitted to any official stock excharlge or any regulated market, or in the case of securities so

traoed or admitted the last known price 1s not considered to reflect their true va ue, the Directors will value the securities concerned w th prudence and in good faith on the basis of their expected disposal or acquisition price Cash, bills payable on demand and othef debts and prepaid expenses are valued at their nominal amount, udess it appears unlikely that such nominal amount IS

obtainable

15 If in any case a particular value is not ascertainable by the methods outlined above, or if the Directors consider that some other method of vajoat o i more accurately reflects the fa4r va'Je of the relevait security or other asset for the purpose concerned, tne metiod of valuation of the security or asset will be such as the Directors 'n their absolute discretion decide

16. (a) Under current procedures adopted by the Directors the price for all Classes of Shares of any Fund is the Net Asset Value per relevant Class of that Fund calculated to the nearest currency unit of the rekvant Dealing Currency

(b) For those funds with more than one Dealing Currency (as set out on page 2), the add.tional Dealing Currency prices are calculated by converbng the price at the relevant spot exchange rate at the time of valuation

(c) If on a i y Dealing Day the aggregate transactions in Shares of all Classes of a Fund result in a net increase or decrease of Shares which exceeds a threshold set by the Directors from time to time for that Fund (relating to the cost of marcet deal,ng for that Fund), t i e Net Asset Value of the relevant Fund w I( be adjusted by an amount (not exceeding 1 25%, or 3 % in the case of the High Yield Funds, of that Net Asset Va8ue) which reflects both the estimated fiscal charges and deallng costs that may be incurred by the Fund and the estimated b d/offer spread of the assets in which the Fuid iivests The adjustment will be an addition when the net movement results in an increase of all Shares of the Fund and a dedJction when it results in a decrease As certain stock markets and jurisdict,ons may have different charging


Appendix 6

structures on the buy and sell sides, the resulting adlustment may be different for net inflows than for net outflows. Where a Fmd invests substaitialiy in government bonds or money market securities, the D!rectors may decide that it is not appropriate to make sdch an adjustment.

Redemption and Deferred Sales Charges 17 (a) The Directors are entit ed to levy a discretionary redemption

charge on shareholders of a I Classes of Shares where they believe that excessive trading 1s beiig practised.

(b) On redemption of Class 6. C and 4 Shares, the relevant CDSC rate is charged on the lower of (I) the price of the redeemed shares on the Dealing Day for redemption or (ii) the price paid by the sllareholder for the orig nal purchase of the redeemed shares or for the shares from which they were converted or exchanged, in e!ther case calculated in the relevant Dealing Currency of the redeemed shares.

(c) No CDSC w I: be levied on the redemption of (a) Class B. C ana Q Shares derived from reinvestment of dividends, or (b) Class 8, C a id Q Shares in the Reserve Funds (provided they were not converted Vom Shares of a non-Reserve Fund or exchanged from shares of a ML Fund)

(d) The CDSC is levied by reference to the "Relevant Holding Period", which is an aggregate of the periods dur ng which (a) the redeemed shares, and (b) the shares from which they were derived (.f any) as a result of conversion or exchange, were held in:

(i) (i)

any Fund except a Reserve Fund; any ML Fund (but not a ML Money Market Fund).

When the Relevant Holding Period exceeds four years no CDSC is payable in respect of the redeemed shares.

In cases where redeemeo shares are only part of a larger holding of Class B, C and Q Shares, any Shares acquired by dividend reinvestment w,II be redeemed first; and where the holding consists of Class B, C and Q Shares acquired at different times. it will be assumed that those acquired f rst are redeewd first (thus resulting in the lowest CDSC rate Dossible)

Where the redeemed shares have a different dealing currency to the Shares (or sim:lar shares of a ML Fund or ML Money Market Fund, as described on page 6) originally pilrchased, for purposes of determ,ning the CDSC the price paid for the latter w ! ' be converted at the spot exchange rate on the Dealing Day for redemption.

The CDSC may be waived or reduced by the relevant distributor at its discret on or for shareholders who, after purchasing Class B, C and Q Shares, become US Persons and are required to redeem their Shares as a result (see paragraph 4 above)

Conversion 18 The Articles allow the Directors on issuiig new Classes of Shares to

impose such rights of conversion as they determine, as described in

paragraph 6 above The basis of all conversions is dated to the respective Net Asset Values per Share of the relevant Class of the two Funds concerned

19 The Directors have determined t ia t the number of Shares of the Class into which a snareholder wishes to convert h s existing Shares will be calculated by dividing (a) the value of the number of Shares to be converted, ca'cu'ated by reference to the Net Asset Value per Share by (b) the Net Asset Value per Share of the new Class This calculat on will be adlusted where appropriate by the inclusion of a convers on charge (see paragraph 20 below) or a delayed initial charge on Class A, Ciass D or Class E Shares (see paragraph 20 below) No conversion charge will be made whei a delayed initial charge betweei the relevant Dealing Currewes of the Shares of the two Funds will be applied to the calculation

payable If appl cable, the relevant exchange rate

The Net Asset Valueb) per Share used in this calculation may reflect any adjustment($) to the Net Asset Value(sj of the relevant Fund(s) described in paragraph 16(c) above.

20. Except as set out under the sect:on "Switching Between Funds and Share Classes" above, no conversions are permitted between different Classes of Shares of the same Fund or of different Funds.

Se!ected d.stributors may impose a charge on each conversion of those Shares acquired through it, which will be deducted at the time of conversion and paid to the relevant distribdor. While other convers.ons between the same Class of Shares of two Funds are normally free of charge, the Investment Manager may, at its

discretion (and without prior notice), make an adcitional conversion ciarge which would increase the amount paid to up to 1 % if unduly frequent conversions are made Any such charges will be deducted at the time of conversion and paid to the relevait d stributor or the Investment Manager (as applicable)

When Class A, Class D or Class E Shares of a Rese've Funu resulting from a direct investment into that or any other Reserve Fund ("direct Shares") are converted for the first time into Class A, Class D or Class E Shares of a non-Reserve Fund, a delayed initial charge of up to 5% of the price of the new Class A Shares or up to 3% of the price of the new Class E Shares ( w k e applicable) may be payable to the Investment Manager W k e a Reserve Fund holding includes both direct Shares and Shares acquired as a result of a conversion from Snares in any Fund other than a Reserve Fuid ("ordinary Shares") or up to 2 % of the price of the new Class D Shares, a partial conve'sion of the holding will be treated as a conversion of the direct Shares flrst and then of the ordinary Shares


Appendix 6

The Directors reserve t+e right to waive or vary these requirements and also to amend their policy if they consider it appropriate to do so, either generally or in particular circumstaices.

Settlement on Redemptions 21 Paymeit of an amount to a single shareholder in excess of

US$SOO,OOO may be deferred for up to seven Bmness Days beyond t i e normal settlement date The redemption price rnay be payable in specie as explained in paragraph 23 below Failure to meet money laundering prevention requirements may result 17 the withho ding of redemption proceeds The Company resews the right to extend t+e persod of payment of redemption proceeds to such period, not exceeding eight Business Days, as shall be necessary to repatriate proceeds of the sale of investments in the eveit of impediments due to exchange cont'ol requirements or similar constraiits irl the markets in which a substait al pan of t i e assets of the Company are invested or in exceptional circumstances where the liquidityof the Company is not sufficient to meet the redemption requests

In Specie Applications and Redemptions 22.

23.

Shares of the Company may be allotted as consideration for the vesting in the Company of securities acceptable to it and having a value (after deductsng aiy relevaqt charges a id expenses) equal to the price payable for the Shares Such securities will be independent'y valued in accordance with Luxembourg law by a special -eport of an independent auditor, such report being deposited with t+e Luxembodrg District Court

The ob1 gation to pay redemption proceeds may also be sat,sfied by payment in specie by allocat8ng to the holder (subject to their prior consent) investments from the po.tfolio of the relevant Fund equal in valJe (calculated in the manner referred to in paragrapk 13 and 14 abow) to the price of the relevant Shares to be redeemed (net of any applicable CDSC in the case of Class B, Class C and Class Q Shares) The nature a i d type of asset to be transferred in such case w:ll be determined on an equitable basis and without preydicing the interests of the other holders of Shares of the same Class, and the valuat,ons used will be confsrmed by a special report of an independent auditor, deposited with the Luxembourg District Court

Dealings in Shares by the Investment Manager 24. The Investment Manager, acting in its capacity as Principal

D:stributor, may as principal acquire and hold Shares and may at its sole discreton satisfy, in whole or in part, an applicat on or request for the issue, redemption or convers:on of such Shares by selling Shares to and/or buying them from the applicant, as appropriate, provided that the applicant consents to such transaction. Shareholders will be deemed to have consented to deal with the Investment Manager unless they have expressly informed the Transfer Agent or the Investor Service Centre to the contrary. Any such traisaction will be effected on the same terms as to price and settlement as would have applied in the case of a corresponding issue, redemption or conversion of Shares (as relevant) by the Company. The Investment Manager is entitled to retain a i y benefit arising from these transactions.

Default in Settlement 25 Where an appl cant for Shares fails to pay settlement monies on

subscription or to provide a completed application form for an initial application by tne due date, the Directors may, in accordance wit1 the Company's Articles, cancel the allotment or, if applicabie, reaeem the Shares Redemption or conversion instruct ons may be refused or treated as though they have been withdrawn if payment for the Shares has not beei made or a completed initial application forT has not been received by the Company In addition, no deahgs will be effected following a converyon instruction and no proceeds will be paid on a redemption until all documents required in relation to the transaction have been provided to the Company An applicant may be required to indemnify the Company or, a$ described below, the Investment Manager against any losses, costs or expenses incurred directly or indirectly as a result o f the applicant's failure t o pay for Shares applied for or t o lodge the required documents by the due date.

In comput,ng any losses covered under this paragraph 25, account shall be taken, where appropriate, of any movement in the price of the Shares concerned between the transaction date a i d cancellation of tne transaction or redemption of the Shares, and of the costs incurred by the Company or, if applicable, the Investment Manage- in taking proceedings against the applicant

The Investment Manager has agreed to exercise its discretion (specifed in the Company's Articles) to take steps to avoid the Company suffering losses as a result of late settlement by any applicant In cases where payment for Shares is not made on a timely basis, the Investment Manager may assume ownership of the Shares and it mall also have the right to give instructions to the Company to make any consequent alterations in its register of shareholders, delay the completion of the relevant transaction, redeeT the Shares in question, claim indemnification from the applicant and/or take proceedings to enforce any applicable indemnity, al' to the same extent that the Company itself rnay do so

The Company has instructed the Custodian that any interest benefit tnat may arise as a result of tw early settlement of Share sdbscriptions and late clearance of redemption proceeds may be set off against any interest obligation that the Investment Manager may incur as a result of its arrangements to protect the Company fro71 losses from the late settlement of Share subscriptions

Compulsory Redemption 26. If at any t me the Net Asset Value of the Company is less than

US$25 million (or equivalent). all Shares not previously redeemed may be redeemed by notice to all shareholders There is a similar power to redeem Shares of any Class if the Net Asset Va!ue of the Fdnd to wh ch that Class is linked falls below US$15 million (or equlva'ent). or in the circumstances described in paragraph 8 above


Appendix B

Limits on Redemption and Conversion 27 The Company will not be bomd to redeem or convert on any o l e

Dealing Day more than 5% of the value of Shares of a I Classes of a Fuid then in iuue or deemed to be in issue, as described in paragraph 30 below

Suspension and Deferrals 28.

29.

30

Va uations (and conseqdently issues, redemptions and conve%ons) of any Class of Shares of a Fund may be suspended in ce%n circumstances including

the closure of or suspension or restriction of trading on any stock exchange or market on whch are qdoted a substantial proportion of tne investments held in that Fund,

the ex stence of any state of affairs which constitotes an emergency as a result of which disposals or valuation of assets owned by the Company attributable to such Class of Shares would be impractmcable;

any breakdown in the means of communication normally employed in determining the price or value of any of the investments of s x h Class of Shares or t i e current price or valiles on any stock exchange or other market;

any period when the Company is unable to repatriate funds for the purpose of making payments on the redempt on of such Snares or during which any transfer of funds involved in trie real sation or acqdisition of investments or payments due on redemption of shares cannot in the opinion of the directors be effected at normal rates of exchange,

9 any period whei the net asset vaiue per share of any subsidiary of the Company may not be accurately determined;

where not:ce has been given or a resolution passed for the closure or merger of a Fund as explained in paragraph 8,

in respect of a suspension of the issuing of Shares oily, any period when notice of winding up of the Company as a whole has been given

Each period of suspension shall be published, if appropriate, by tne

Company Notice will also be given to any shareholder lodging a request for redemption or conversion of Shares

The Covpany wi I also not be bound to redeem or convert any Shares of a Fmd on any one Dealing Day if there are redemption or outgo,ng convers on orders that day for all Classes of Shares of that Fund with an aggregate value exceeding a particular level (currently fixed at 5%) of the approximate value of that Fund In addition. the Company may defer redemptions and conversions in exceptioial circumstances that may, in the opinion of t k Directors, adversely affect the interests of holders of any Class or Classes of Shares of that Fond In either case, tne Directors may declare at the'r discret on that some 07 all redemptions and conversions may be deferred until the Compmy has executed, as soon as possible,

the necessary realisation of assets out of the Fund conceried or untii the exceptional circumstances cease to apply. Tn,s may resu't in some shareholders having redemptm or conversioi ordefs deferred on a particular Dealing Day, whilst others do not. Redemptions and conversions so deferred will be deait w t i iq

p',ority to later requests.

31. During a period of suspension or deferral a shareholder may withdraw h:s request, in respect of aiy transaction which is

deferred or suspended. by notice in writing to the Company. Suci7 notice will only be effect,ve if received before the transaction is

effected.

Shareholders may not redeem a holding of the Company's Shares unless and unti! cleared funds have been received by the Company in respect of that holdiig.

Non-Acceptance of Orders 32 The Dvectors also have power to decline to accept any order for

rede.npt,on or conversion into a particular Fund on any one Dea i i g Day where the aggregate value of orders for all Classes of Shares of that Fund exceeds a part cular value (currently fixed by the Directors at 5% by approximate value of the Fund concerned) and the Directors consider that to g ve effect to such orders on the relevant Dealing Day would adversely affect the interests of exist ng shareholders In addition, the Company may defer redemptions or conversions in exceptional circumstances that may, in the op nion of the Directors, auversely affect the interests of holoers of any Class or Classes of Shares of that Fund In either case, the Directors may declare at their discretion that some or all redemptions or converssons may be declined on a particular Dealing Day, and this may resdlt in some shareholders having redemption or convers on orders declined whilst others do not In such circumstaices the Directors will inform each applicant as soon as practicable and if the applicant wishes alternative instructions can be given

Transfers 33. The transfer of Registeved Shaves may normal'y be effected by

delivery to the Transfer Agent of an instrument of transfer in appropriate form If a transfer or transmission of Shares results in a holding on the part of the transferor or the transferee having a value of less than a prescribed mln,mum t?e Directors may require the holding to be redeemed. The current minimum is USB5.000 or equivalent

Probate 34 Upon the death of a shareholder, the Directors reserve the right to

reouire t i e provision of approplate legal documentation to evidence the rights of the shareholder's legal successor.

Dividends 35. The Articles impose no restrict:on on dividends other than the

requirement to mainta:n the statutory minimum level of capital (currently tne equivalent of ?1,250,000). The Directors have the


Appendix B

power to pay interim dividends in respect of any Fund. The current diviaend policy of the Directors is explained on page 30.

C h a n g e s of Pol icy or Practice 36 Except as otherwise prov ded In the Artic’es, and subject to any

lega! or regulatoy reqwrements. the Directors reserve the right to amend any practice or policy stated in this Prospectus

I n t e r m e d i a r y A r r a n g e m e n t s

37 Where Shares are issued by the Compaiy to financial institutions (or their no-ninees) wiich act as intermediaries, the benefits ana obligations described in the Prospectus may be applled by the Company to each of the intermediary’s clients as if such client were a direct shareholder


Appendix C

Appendix C - Additional Information History of the Company 1.

2 .

3.

4.

5

6

Tie Company is registered under Number B 631 7 a t the Register of

Commerce at the Distr ct Court of Luxembourg where its Articles of Association are available for irlspectioi a id where copies thereof may be obtained upon request (aid see a's0 paragraph 33 below).

The Company's constitution is aefined in the Art cles. The o q n a l Articles were published iq the R e c w des SocietCs et Associations du M h o r a l (the "Mkmorial") of the Grand-Duchy of Ldxembourg o i 21st July 1962. The Articles have been amended and restated several t!mes. most receitly on 16 September 2005, with publ:cation i i the Mhor ia l on 16 September 2005.

The Company was incorporated as Selected Risk Investments S.A. on 14th June 1962.

With effect from 31st December 1985 the name of the Compaiy was changed to Mercury Selectea TrJst. the Company adopted the legal statds of a societe d' nvest sselnent a capital variable (SICAV) and was reconstituted to enable it to issue different classes of

Shares It qdalifies as a i Undertaking for Collective Iivestment in lraisferable Securities

With effect fro-r 1 J J ! ~ 2002 the name of the Company changed to Merrill Lynch International Investment Funds

With effect from 16 September 2005 the Company was submitted to Part I of the law of 20 December 2002 that implements Directives 2001/107/EC ana 2001/108/EC.

With effect from 16 September 2005 the Company has appointed M e d Lynch Investmeit Managers (Luxembourg) 5 A as i ts

management co.npany

As from the date of this Prospectus, Shares are offered solely on t i e basis of this Prospectus, which supersedes all previous versions

The Not ce Legale required by Luxembourg law in connection with this offer has been filed with the Reg,strar of the District Court of Luxembourg.

Directors' Remuneration and Other Benefits 7 Tiere are no existing or proposed service contracts between any of

toe Directors and the Company and the Artic'es contain no express provision governing the remuqeration (including pensson or other benefits) of the Directors. Tne Directors receive fees and out-of- poccet expenses from the Company Directors who are not representatives of t i e MLlM Group currently receive a fee of USB30.000 per a n n m

Auditor

8 The Company's auditor is PrlcewaterhouseCoopers of 400 route d'Esch, L-1471 Luxembourg

Administrative Organisation 9. The Investment Manager and the Investment Advisers

The Management Company and the Company have entered into an Investwnt Management Agreement with the Investment Manager wllereby the lnvestmerlt Manager is responsible for managing the assets of the Company. The Investment Manager is

entitled to delegate its investmeit managemeit fmctions to any of its subsidiaries or associates and, with the approval of the Management Company, any other person. The Investment Manage: has delegated some fundions to the Investment Advisers, Merrill Lynch Investment Managers Limited and Fund Asset Management, L.P. as described on page 8 and, in the case of certain Funds, Merrill Lynch Investment Managers L!mited has in tu r i sub-delegated some functions to Merrill Lynch Investment Managers Co., Ltd.

The registered office of Merrill Lynch Investment Managers Co., Ltd. is at Nihonbashi 1-chome Building, 1-4-1. Nihonbashi, Chuo-ku, Tokyo 103-0027, Japan.

The Investment Manager, incorporated with lam ted liability in Jersey on 10th August 1972 for an unlimited perlod, has an issued and fully paid-up share capital of f530.000 and carries on the business of, inter a1.a. investment management. The directors of the Investment Manager are: Mr. A.J. Arnold, Mr. F.P. Le Feuvre, Mr G.J. Grime. Mr. G. Hamilton, Mr. A.M. Roe, Mr. R.E.R. Rumboll, Mr. N.J. Coats, Mr. T. Beck, Mr G. Bamping and Ms. T.A. Fritot.

The registered office of the Investment Manager is at Forum House, Grenville Street, S t Helier, Jersey JE4 8RL, Channe Islands

DSP Merrili Lyric+ Fund Managers ("DSPML-FM") provides non- bsiding investmeit advice to the Subsidiay DSPML-FM is du!y registered with the SEBI as an asset management company to DSP Merri'l Lynch Mutual Fund and as a portfolio manager. DSPML-FM is a wel; reputed mutual fund asset manager in India and as of 31 Dece-nber 2005 had assets under management of approximately USBl 9 b llion

The Subsidiary is registered as a sub-account of Merrill Lynch Investment Managers Limited which is an entity registered as a Foreign Institutional Iivestor with the Secdrities and Exchange Board of India under the SEBI (Foreign Institutional Investors) Regulations. 1995 and invests in India under the provisiois of the said regulations.

10 The Investor Service Centre The Investment Manager has entered into an Investor Services Agreement with M e r v Lynch Investment Managers Limited for the provlsioi of an Investor Service Centre to provide dealing facilities and related investor support fmbions Other Merrill Lynch local offices also serve as local Investor Service Centres for customer enquiries only, the dealing facil ties being always provided by Merrill Lynch Investment Managers Limited

48 iderrill Lynch International Investment Funds

Appendix C

11 The Custodian Tne Company has entered into a Custodian Agreement with the Custodian whereby the Custod'an has agreed to act as custodian of the assets of the Company and to assume the functions and respons bi ities of a custod an under the Luxembodrg law of 20t i December 2002

The Custodian anc' Fmd Accountant (see paragraph 12 be!ow) is

The Bank of New York Europe Limited. Luxembourg Branch. Its office is at Aerogolf Center, 1A Hoehenhof, L-1736 Senningerberg, Luxembourg. The Bank of New York Edrope Limited was incorporated with limited iiabil ty in England on 9th August 1996 with an issued and fd!y paid up share capital of f2OO million. Its registered office is One Canada Square, London E14 5AL and its

ult,mate holding company is The Bank of New York Company, Inc. which is incorporated in the Unlted States of America. The Custodial's and the Fund Accountant's principa! bils:ness activty is the probision of custodial ana investment administration sewices and treasury dealing.

12 The Fund Accountant Tne Managemeqt Company and the Investment Manager have entered into an agreement with the Fund Accountant whereby the Fund Accountant has agreed to provide fund accounting. Net Asset Value determination a i d sewices related to these fuidions Subject to Luxembourg law and regulation the Fund ACCOJntant is entitled to delegate specific functions to any other person, firm or company (with the approval of the Management Company and the regulatory authordy)

13. The Transfer Agent ,

The Management Company and the Investment Manager have entered i i to a Traisfer Agency Agreement with the Transfer Agent whereby t i e Transfer Agent has agreed to prov7de all necessary transfer agency functions including applicat 01 and transact.on processing. maintaiiing the share register, and sewices related to these functions

14 Relationship of Custodian and Fund Accountant wi th MLlM

Group The Custodian's and Fund Accountant's associates provide custody and fund accounting services to Merrill Lyncl7 Investment Maiagers Limited and some of its associates in respect of their investment management busiiess generally Under agreements betweei companies i i The Bank of New Yorlc Company, I ic ("BNY") group and some companies in the MLlM Group re ating to the provision of these sewices, payments due from the relevant companies in the MLlM Group to BNY companies w II be abated by the fees paid by the Company to the Custodian and Fund Accountant in respect of custodian and fund accounting services

15. The Paying Agents The Company has appointed the foilowing as Paying Agents:

Austria

Raiffeisei Zeitralbank bsterreich AG Am Stadtpark 9 1030 Vienna

Belgium Citibank Bank nv/sa Boulevard General Jacques 2639 1050 Brusse's

Germany Commerzbank A t Kaiserplatz 60261 Frankfurt am Main

Luxembourg (Central Paying Agent) J.P. Morgan Bank Luxembourg S.A. 5, Rue Plaetis, L-2338 Luxembourg

Swi tzerland HSBC Prvate Bank (Suisse) S.A Paradeplatz 5

CH-8022 Zljrich

Un&d Kingdom UBS Warburg (a financial services group of UB5 A.G.) 1 Fmsbury Avenue London ECZM 2PP Attent,oi Corporate Adion - Paying Agency

16 The Subsidiary In additson to the India Fund, certain other Fuids may livest in securities tirough the wholly-owned subsidiary of the Company, Merrill Lynch India Equities Fund (Maurit,us) Limited The Subsidiary is incorporated as a private company, limited by shares The Subsid ary is organised as an open-ended multi-class fu id and holds a Category 1 Global Business Liceice for the purpose of the Financial Sewices Development Act 2001 and 15 regulated by the Financial Services Commission. Mauritius ("FSC") It must be mderstood that in giving this authorisation, the FSC does not vouch for the financial soundness or tne correctness of any of the statements made or opin.ons expressed wit4 regard to the Subsid dry

The Subsidiary was incorporated on 1 September 2004, and has an unlimited life It is a wholly-owned subsidiary of the Company The Subsid,ay is registered with the Registrar of Companies, Mauritius, and bears file number 52463/Cl/GBL. The Constitution is available for inspection at the registered office of the Subsidiary


....

Appendix C

Tne ailthorised capital of the Subsidiary is US$ 5,000,000,100 and is divided into 100 management shares of nomiial valde US $1 .OO

each, which are issued to the Compaiy; 4,000,000,000 class A redeemable participat:ng siares of noTiia! value US $1.00 each of which may be issiled as A shares ( " A Shares"). which may only be issued to the Company; a i d 1,000,000,000 redeemable participatlng shares of nomina! value US 51 .OO each of which may be issued to the Company in such classes of participat ng shares as the directors may determine with such preferred or qualified or

other special rignts or restrictions whether in regard to voting, dividend, return of cap'tal or otherwise. Additiona' classes of shares may be issued issued to the Company at a later stage in accordance with the Sdbsid:ary's Const tution. The Sdbsidiary issues reg,stered shares oily.

The board of directors of the Sdbsidiary may for efficient managewnt authorise a committee of directors to issue participatsng shares of the Silbsldiary on such terms as approved by t i e board

The business and affairs of the Subs,d'ary are managed by the directors The directors of the Subsidiary are Mr. Geoff Radcliffe. Mr Frank Le Feuvre and Mr. Jean-C aude Wolter as non -resident directors and Mr. Couldip Basanta tala and Mr Dev Joory as resident dmrectors At any time. the directors of the Subsidiary will comprise a malority of directors who are also Directors of the Company The directors are responsible, intev alia, for estab ishing t i e investment objectives and policy of the Subsidiary and for monitoring the Subsidiary's investments and performance.

The Subsdary acts solely 'n favour of the Company and its sole ob,ect is to carry out actwties In favour of the Company and tqe funds

The Subsidiary complies with the investment restrictions of the Company

The Subsdary has appointed Merriil Lynch Investment Managers Limited as its investment manager and DSP Merrill Lynch Fund Managers Ltd to act as its lndlan Investment Adviser.

Internationa! Financial Senms Limited ("IFSL"), Mauritius has been appointed by the Subsidiav as its adminlstrator and secretary (the "Maurit:an Administrator"). IFSL is a lead:ng offshore management company incorporated in Mauritius and licensed by the Financial Services Commission (FSC) to provide advisory and management services for iiternational businesses.

Tie Mauritian Administrator carries on the general administration of the Subsidiary, keeps or causes to be kept the accomts of the Subsidiary and such fiiancia: books and records as are required by law or otherwise for tne proper conduct of its financial affairs. The Mailritian Administrator calculates the net asset value per share on each valdation day and the subscription price and redemption price in accordance with the Const,tution. The Mauritian Administrator

convenes meetings of the directors, keeps the statutory books and records of the Subsdary, maintains the register of shareholders and makes all returns required to be made by the Substdiary uider the laws of Madr ti& Tne MaJritiai Administrator is respois bie for a'l tax filings in Mauritius re ating to the Subsidiary.

The Subsidiay has entered into a Custodian Agreement with the Custodian ana the Compaiy whereby t+e Custodial has agreed to act as custocian of the assets of the Subsidiary and the Company

The Sdbsidiafy has appointed the Mauritian Auditor as auditor of the Subsid ary in Mauritius to perform the aud tor's duties required by Maur i tu law. The Company and t i e Subsidiary shall issue consolidated accounts All assets a id liabilities, income and expenses of the Sdbsidiary are consolidated in the statement of net assets and operat ons of the Company A!I investments held by the Subsdary are disclosed in the accounts of the Company Ail cash, securities and other assets of the Subsidiary are held by the Custodian o i behalf of the Company

Indian Investment Adviser t o the Subsidiary DSP Merrill Lynch Fund Managers Ltd Tulsiani Cnambers, West Wing, 11 th floor, Nariman Point. MJmba. - 400 021. India

Mauritian Auditor to the Subsidiary Pricewaterhousecoopers 6th Floor, terne House, Cnaussee, Port Louis, MaJritius

Mauritian Administrator t o the Subsidiary IFS lnteriational Financial Services Limited IFS Cou?, Twenty Eight, Cybercity, Ebene, Maufhus

17. Taxation of the Subsidiary and the India Fund Mauritius The Subsidiary shall hold a Category 1 Global Bus.ness Licence for the purpose of the Financial Services Development Act, 2001 ("FSD Act") and is liable to tax in Maur:tius at the rate of 15% on its net income. However, the Subsidiary will be entitled to a foreign tax credit equivalent to the higher of the actual foreign tax suffered or a deemed tax creait of 80% of the Mauritian tax on its foreign source income. This will result in a max'mum effective income tax rate of 3% on foreign source income. The Subsidiary is not subject to capital gains tax in Mauritius.

No tax on cap ta' ga ns will be payable in Mauritius on disposals by the Subsidiay of Indian secdrities. T+ere is no witiholding tax payable in Mauritius in respect of payments of dividends to shareholders or in respect of redemption or exchange of shares held in the Subsidiary

The Subsidiary has obtained a tax residence certificate from the Mauritian auttlorit es and such certificatioi is determinative of i ts

resident status far treaty purposes Accord.ngly, the Subsidiav qualifies as a resident of Mauritius for the purposes of the India/Maurit,us Double Tax Avo dance Treaty (the "Treaty") On th,s


Appendix C

bask, the Subsidiary is entitled to certain reliefs from Indian tax, subject to the continuance of the cdrrent terms of the Treaty.

Shareholders are not sdbject to any wealth, capital gams, iqcome, withholding, gift, estate, inheritance or other tax i i Maw tius (except for shareholders domickd, resident or havirlg a permarent establishment in Maurit8us).

India The following are tne tax implications on the income earned by the Subsidiary or as the case may be, the Ind a Fund from Indian portfoiio companies

Tie Subsid ary, or as the case may be, the India Fund, has income in the form of capital gains, income from dsvidends and income from interest

A. Tne tax consequences for the Subsidiary on account of the application of the Treaty, read with the provisions of the Indian Income Tax Act, 1961 ("ITA") are as follows-

1 Capital gams resulting from the sale of India1 secdr ties (including Foreign Currency Convertible Bonds) or Global Depositary Receipts ("GDRs") or American Depositary Rece,pts ("ADRs") issued by Indian companies will not be subject to tax in India, prov:ded the Subsidiary does not have a permaqent establishment in India, however, the purchase and sale of Ind a0 securities in a recognised stock exchange in India is subject to a Securities Transaction Tax (STT) as discussed below. This tax has been recently introduced by the Finance (No 2 ) Act, 2004:

2 Dividends on shares received from an Indian cornpaiy on which dividend distr,bution tax has been pald are exempt from tax in the hands of the shareholders Thus, any dividends distributed by the Indian portfolio companies are not be subject to tax in India, prov8ded the company paying the dividends pays a dividend distribution tax of 12 5 % (plus surcharge arld eddcat.on cess '),

3. Interest income from Indian securities is taxed at the rate of 20% (plus surcharge and education cess); (if the interest income arises out of the Subsidiay's subscription to Foreign Currency Convertible Bonds, the interest wili be taxed at the rate of 10% (plus surcharge and education cess));

B. The tax consequences for:

(I)

(11) The India Fund.

The Subsidiary (in the event Treaty benefits are not available to tne Subsidiary); or

are governed by the provisions of the ITA which are as follows:

' Education cess is an additional surcharge on income-tax and surcharge, introduced by the Finance (No.2) Act, 2004 and continued under the Finance Act 2005.

Dividends on shares received from an Indian company on which dividend distribution tax has been paid are exempt from tax in the hands of the shareholders Thus, m y dsvidends distnbuted by the Indian portfolio companies to the Subsidiary or, as the case may be, the India Funa are not subject to tax in India, provided t i e company payiig the d,v,dends pays a dividend distribution tax of 12 5 % (plus surcharge and education cess as applicable),

Interest income from lndiai securities is taxed at the rate of 20% ( p l ~ s surcharge and education cess as applicable), (if the interest income arises out of the Subsidiary's or, as the case may be, India Fund's subscription to Foreign Currency Convertible Bonds, the iiterest will be taxed at the rate of 10% (plus swcharge a i d eddcation cess));

Capital gains from the sale of Indian securities held for 12 months or less is taxed as short-term capital gains at

the rate of 30% (plus surcharge and education cess);. However, if the short-term capital gains arises on the sale of a !isted security in a recognised stock exchange in India, the rate of tax shall be 10% (phs surcharge and education cess) provided 5Tr as discussed below has been paid on such transfer:

Capita: gains from the sale of Indian securities held for more thai 12 montns are taxed as long-term capital gains at the rate of 10% (plus surcharge and education cess) However, if the long-term capital gains arise on t+e sale of a !isted security in a recognised stock exciange in India, the same will not be subject to tax provided the Sn as d scussed below has been paid on such transfer

All Indian taxes mentioned at A & B above are exclusive of the currently appl cable surcharge of 2 5 % (for companies) on the Ind an tax and education cess at the rate of 2 % on tax and SJrcharge In respect of dividend distribution tax mentioned in A 2 and B(i) above, the applicable surcharge is 10% on the Indian tax

The Subsidiav, of, as the case may be, the India Fund is liable to pay S T , The rates of STT with effect from 1 June 2005 are as follows:

0.1 % on purchase of equity shares in a company or units of equity oriented funds in a recognised stock exchange in India. 0.1 % on sa:e of equity shares in a company or units of equity oriented funds in a recognised stock exchange in Ina,a 0.02% on sale of equity shares in a compaiy or units of eqility oriented funds in a recognised stock exchange in India where the contract for sa:e is settled otherwise then by the actual del.very or transfer of share or unit. 0.01 33% on sale of der;vat;ves in a recognised stock exchange in India.


Appendix C

0.2% on sale of units of an equity oriented fund to the Mutual Fund.

In the event the gains on sale of shaves is taxed under the head, "Profits and Gains of Business or Profession" the Subsidiary (11 case thf Subsidiary is held to have a permanent establishment in India and such gains are attributable to the permanent establishment) or, as the case may be, t i e lnoia Fund, will be liable to tax at t i e rate of 40% (plus surcharge and education cess as indicated above) Credit for STT paid will be available agaiist income tax on income arising from transactions on which STT has been paid.

Special Risk Considerations for the India Fund The India Fmd invests throdgh the Subsldiary, which invests 'n lndiai portfolio companies under the SEE1 (Foreign Inst,tutional Investors) Regulatiois, 1995 The India Fund may also invest directly or tirough its Subsidiary in foresgn securities issued by India? companies

Investors should io te that the Subsidiary relies upon the prowsions of the Treaty to miiimise, so far as possible the taxation of the Subsidiary No assurance can be given that the terms of the Treaty will not be sub,ect to review in the f u t m and any change could have a mater,a adverse effect on the returns of the Subsidsay. The repeal o' amendment of the Treaty, a change in the Maurit us or Indian domestic tax laws, or a change of policy of the Maurdm or Indian tax aatbowes may adversely affect the tax treatment of the investment of t i e lidia Fund and/or the taxation of the Subs diary and, as a conseqmw, the value of the India Fund's siares There ca i be no assurance that tne Treaty will continue and will be in full force and effect during the life of the Subsidiary

T'le current status of the Treaty is that following the issue of assessment orders against certain Mauritian resident companies deriving benefits under the Treaty during 2000, the Indian Central Board of Direct Taxes ("CBDT") issued Circular 789 (the "Circu'ar") on 13 April 2000. The Circular clarified that a certificate of tax residence issued by the Maurit,an tax authorities was sufficient evidence for accepting the status of the resideice as well as beneficial ownership for purposes of applying the Treaty. The Supreme Court has receitly dpheld the validity of the Circular. Accordingly, the Subsdary should be eligible to claim the benef,t of the Treaty. It is to be noted that a curative petition has been fi+d in the Supreme COUZ against the above order. The Supreme Court has not yet admitted th:s petition. The Directors will keep under review the progress of this petition and may at any time implement a policy to pwvide for any potential tax liability in the price of the Shapes. Any such provision will be affected in the Net Asset Value of the Fund.

Fees, Charges and Expenses 18 The Investment Manager is entltled to management fees based on

the Net Asset Va!ue of each Fuid, as shown in Appendix E.

19 The Custodiaq receives annual fees, baseu on the value of securities. which accrue daily, plus transact on fees The annual fees range from 0 01 1 % to 0 608% per a n n m a i d the transaction fees range from US813 to USB157 per transaction. The rates for both categopies of fees will vary according to the country of investment and, in some cases, according to asset class Investments in bonos a i d developed equity markets will be at the lower end of these ranges, while some investments in emergiig or developing markets will be at the upper end Thus the custody cost to each Fund wiil depend on i ts asset allocation at any time

The Transfer Agent receives annm fees calculated according to (a) the number of holdings (ranging from US89 to US825 per holding), (b) transaction processing (rangiqg from US82 to USB13 35 per transaction, depending on the transaction type), and (c) Fundhhare class annual maintenance fees (ranging from USB2.000 to

USB20.000 depending on the nJmber and type of FunddShare Classes).

The Fund Accountant receives ai iual fees calculated according to the Net Asset Value of each Fund, ranging from 0 01 5% to 0.023%.

20 The Investment Manager, in its capacity as Principa! Distributor, is

entitled to receive the initial charge of up to 5% of the price of the Class A

Shares issued, where levied, the initial charge of up to 2% of the price of the Ciass D

Shares issued, where levied. the initial charge of up to 3% of the Net Asset Value of the Class E Shares issued, where applicable and levied. the CDSC on redemptions if the Investment Manager is acting as distributor; any delayed init,al charge on Class A or Class E %ares, respectively. the Investment Manager's charge on unduly frequent conversions of any Class of Shares (see paragraph 20 of Appendix 8). and any dist: bdt o i fees

21 Subject to the approval of the board of Directors, the Management Fee for any FJnd may be increased up to 2 25% by giving snareholders a t least three months' prior notice Any increase to the ManageTent Fees above this level would require approval of siareholcers at an extraordinary general meeting. At least orle monto's notice will be given to shareholders of any increase in the rates of other fees and charges specified in th s Prospectus, unless prior shareholder consent is required under tne Company's Articles when at least one month's notice will be given from the date of such consent.

2 2 . The Investment Manager is entitled at its sole discretion and without recourse or cost to the CoTpany to rebate all of or part of its fees and charges and to pay commsssion to any investors (including discounts on c+arges to directors and employees of the

52 Merrill lynch International lnvestrrent Funds

Appendix C

23.

24.

2s.

26.

Investment Maiager a i d its affiliates) or its distribdor or agents i i

respect of any subscript,ois for, redemption or hold,ngs of, Shares.

The Company bears all expenses incurred in the operation of the Company (whether incurred directly or by the Management Company, the Custodian, the Paying Agents, the Fuid Accountant, the Principal Distributor, the Transfer Agent, t i e Investment Manager and its affiliates, or the Investor Service Centre), including, without limitation, taxes, expenses for legal and auditing services, costs of printing proxies, share certificates, shareholders' reports and statemeqts. prospectuses and other offering documeits and other required documentation, the expenses of issue and redemption of Shares and payment of dividends, foresgn exchange costs arising in the calculation of trle dealing prices in the additional Dealing Currencies. registrat,oo fees dJe to supervisory aJthorities in various jurisdictions and o twr related expenses, fees a i d out-of-pocket expenses of the Dmrectors of the Company, insurance, interest. Iistiig a id brokerage costs, and t i e costs of computation and publication of Net Asset Va8ues and prices The expenses borne by the Company also include costs incurred by distributors and agents in complyng with local regulatory requirements and other costs specifically incurred by them with the approval of the Directors

If a Func is closed at a time when any expenses previodsly al ocated to that Fund have not been amortised in f d , the Directors shall determine how the outstanding expenses should be treated, and may, where appropriate. decide that the outstandiig expenses should be met by the Fund as a liquidation expense.

The operating costs of the Subsidmary includ ng the fees for the Mauritiai Administrator, estimated at approximately US5 36,800 per year, are borne by the Subsidiary There are no management fees borne by the Subsidiary

The India Fund will be launched upon its merger with tne Merrill Lynch Specialist Investment Funds - India Fund and the unamortized expenses of that fund will be carried over to the India Fund as part of tne merger process.

Relationships with the ML Group 27. The ultimate holding company of the Maiagement Company, the

Investment Manager and the Investment Advisers is Merrill Lynch & Go, Inc , a company incorporated in Delaware, USA

28 Sublect to any pol.cies established by the Directors. when arranging investment transactions for the Company, the Investment Advisers will seek to obtain the best net results for the Company, taking into account suci factors as price (including the applicab'e brokerage commiss on or dealer spread), size of order, difficulty of execution and operational facilities of the firm involved and the firm's risk in positioning a block of securities. Therefore, wh,lst the Investment Advisers general!y seek reasonably competitive commission rates, the Compaiy does not necessarily pay the lowest commissm or spread available. In a number of developing markets, cornm,ssions

are fixed pursuant to local law or regulation and, therefore, are not silbject to 0egot:ation.

29 When arranging traisactions i i secur,ties for the Company, compaiies in the ML Group may provide securites brokerage, foreign exchange, banking and other services, or may act as pr ncipal. o i their usual terms and may benefit therefrom Commissions wilt be paid to brokers and agents in accordance with the relevant market pradice a i d the benefit of any bulk or other commission discounts or cash commissions rebates provided by brokers or agents will be passed on to t+e Company The services of ML Group companies w II be used by the Investment Advisers where it is coisidered appropriate to do so provided that (a) their commissions and other terms of business are generally comparable wit? those available from unassociated brokers and agents in the mar<& concerned, and (b) this is consistent with the above policy of obtaining best net results Consistent with the above po'icies, it s anticipated that a proportion of the Company3 investment traisactions will be executed through ML Group broker dealers and that they will be amongst a relatively small group of global firms whlc+ may each be assigned a larger proportion of transactions than t+e proportion assigned to any other firm

30 Subject to the foregoing, and to any restrictions adopted by the Di'ectors or set forth in the Articles, the Investment Manager, the Investment Advisers and any other ML Group company, and any directors of the foregoing, may (a) have an interest in the Company or in a iy transaction effected with or for t, or a re]ationsiip of any descript on with a iy other person, which may involve a potential conflict with their respective duties to the Company, and (b) deal wit1 or othenv se use the services of ML Group companies in connection with the performance of such duties, and none of them will be liable to account for any profit or remunerat.on oer:ved from so doing

For example, such potential conflicts may arise because:

(a) the relevant ML Group company undertakes business for other clients;

(b) any of the relevant ML Group company's directors or employees is a d rector of, holds or deals in securities of, or is

otherwise interested in, any company the securities of which are held by or dealt in on behalf of the Company, the traisaction re ates to an investment in respect of which the re evant ML Grodp company may benefit from a commission, fee, mark-up or mark-down payable otherwise than by the Company,

(c)

(0) a ML GroJp company may act as agent for the Company in relat on to traisactions in wh,ch it is also acting as agent for the account of other clients of ML Group companies,

(e) a ML Group company may deal in investments andlor cuwicies as principal with the Company or any of the Company's shareholders;


Appendix C

(f) tne transaction is in units or shares of a coilective investment scheme or any company of wh ch any ML Group compaoy is

t i e manager, operator, banker, adviser or trustee,

(9) a ML Group company may effect transactions for the Company invalv ng placings aid/or new issiles with another ML Groap company which may be acting as principal or receiving agent's commission.

31. As described above, securities may be held by, or be an appropriate investment for, t i e Company as we!l as by or for other clients of the Investment Manager, the Investmerlt Advisers or other ML Group companies. Because of different objectives or other factors, a particular security may be bought for one or more sdch c:ients, when other clients are selling the s a w security. If purchases or sales of securities for the Company or such clients arise for consideration at or about the same time, such transactions wil' be made, insofar as feasible, for tne relevant clieits in a manner deemed equitable to al:. There may be circumstances when purchases or sales of securities for one or more ML Group c!ients have an adverse effect on ot+er ML Group clients.

32. With respect to the Funds (or porhon of a Fund) for which it provides investment management and advice, FAM L.P. a id any of its connected persons may effect transactions by or tirough the agency of another person wmth weom FAM L.P. and any of its

connected persons have a i arrangement under which t i a t party will from time to time prov de to or procure for FAM L.P. and any of its connected persons goods, services or other benefits such as research and adv sory services, computer hardware associated with specialised software or research sevices and performance measures etc., the nature of which is such that their provision ran reasonably be expected to benefit the Funds as a whole and may contribute to an improvement in the Funds' performance and that of FAM L.P. or any of its connected persons in providing services to the Funds and for which no direct payment is made but instead FAM L.P and any of its connected persons undertake to place business with that party, For the avoidance of doubt, such goods and services do not include travel, accommodation, entertainment, general adm:nistrat,ve goods or services, general office equipment or premises, membersiip fees, employee salaries or direct money payments. Soft doliar commiss:ons may be retained by FAM L.P. or any connected persons of FAM L.P provided that the brokerage rates are not in excess of customary institutional full-service brokerage rates.

33. For investments in the units of other UCITS and/or other UCls that a e e managed, directly or by delegation, by any ML Group company, no management, subscript:on or redemption fees may be charged to the Company on i ts investment in the units of such other UCITS and/or other UCIs.

08536, New Jersey, USA as its stockle1d:ng agent. MLIM LLC has the discretion to arrange stock loan5 with highly rated specialist financial institutions (the "counterparties"). Such counterparties can include associates of MLlM LLC. Collateral, in the form of cash, could be subsequently invested in money market instruments with a rating of A-1 or er;uivalent. Collateral is marked to market on a daily basis and stock loans are repayabie upon demand. At the cost of the Company, MLlM LLC receives remuneration in re!ation to its activ!t;es above. Such remuneration shall not exceed 50% of the revenue from the activities.

Statutory and Other Information

35 Copes of the following documents (together with a ceqified trans ation thereof where relevant) are avai'able for inspection during usual business hours on any weekday (Saturdays and Public Holidays excepted) at the registered off,ce of the Company and at the offices of Merrill Lynch Investment Maiagers (LuxeTbourg) S.A., 60 route de VPves, L-2633 Senlingerberg, Luxembourg (a) the Articles of Assoc ation of the Company, and

(b) the material contracts entered into between the Company and its functionaries (as varied or substituted from time to time).

A copy of the Articles of Association of the Company may be obtained free of charge at the above addresses

34 Witn reference to Paragraph 3 5 of Appendix A, the Company has appo nted Merri I Lync? Investment Managers, LLC ("MLIM LLC"). having its registered office at 800 Scudders Mill Road, Plainsboro.


Appendix 0

Appendix D - Authorised Status Austria The Company has notified the Federal Ministry of Finaice of its inteniion to distribute its Shares in Austria under Afiicle 69 of Ibe Bank,ng Act in

connect 01 with Art cle 36 of tbe Investment Fund Act 1993 Tnis Prospect& is available in a Gerrnai language version, which includes additional information for Austrian investors

Bahrain Approval has been granted by t i e Bahrain Monetary Agency to market tbe Company in Bahrain. subject to its regulatiors on the General Supewioi, Operation and Marketing of Collettive Investment Schemes 1 he Agency takes no responsibility for the financial soundness of tbe Compaiy or for the correciiess of aiy statemei; made or expressed in re'ation :beveto

Belgium Tbe Company nas been registered with the Banking and F nance Commissior in accordance w,t+ Article 130 of t+e Act of 20 July 2004 relating to financial transac:iom and t i e fiiancial markets Tbe French language version of tb s Prospecxs distributed in Belgium includes addi:ional information for 3elgian investors

Brunei The Company's adm'nistrator in Bruiei is Tbe Hong Kong ard Shangha Banking Corporation Limited. BrJrel Darussalam, who holds a license to d stvibute Shares of the Company pursuant to Section 7 of the MJual Funds Order 2001 Shsres may only be publicly distributed in Bruiei by ?he Company's Bruvei admiris:ra:or

Chile The Company has obtained the registration of certain Funds witb the Risk Classification Ccmmission IP Chile followirg an appl,ca:ion by a local pension fund manager The Compaiy's Shares may on y be so'd to ceqain Chilean pension funds

Denmark Approvai has been granted to t k Company by the Dan sh Finaicial Supervisory Authority (Finanstilsynet) in accordance with Sections 11 and 12 of the Danish Act o i Investment Associations, Special-Purpose Associatiors and other Collec:lve livestment Schemes etc (Conso1ida:ed Act no 768 of 19 July 2005) to market its Shares to institutional investors in Dermark The simp' fled prospectus as well as certain inforwa:ion on taxation is available in Danish

Finland The Company has notified tne Financia: Supevision AL?ho:ity ir accordance with Section 127 of tbe Act on Common Funds (29 1 1999148) and by virtde of coifirmation from the Financial Supervision Au:hority the Company m y publicly distribute Jts Shares in Finland Th s Prospems and all other information and documents that the Cornpary must publish in Luxembourg pursuant to applicable Luxembourg Law are trais'ated into Finnish and are available for Finnish investors at the offices of the appointed distributors in Finlard

France The requirements of General Regli'ation of the "Autorite des Marches Finaiciers" (the "AMF") having been met, the Company has beer: autiorised to market its Shares in France Credit Agr cole lndosuez will perform the

services of Ceitra'ising Correspopdent in France T?is Prospectus is available in a French langdage version tbat inc'udes additioral information for French investors The additional information for French investors should be read in conjwtt on with t i e Prospec:us Documentation relating to the Cornpaly car be inspected a: the offices of Credit Agr,cole Indosuez, 91-93, boulevard Pasteur, 75710 Paris Cedex 15, France, dJring normal business hours and copies of the docurneniation can be obtained from them if reqLired

Germany The requiremei:s of Section 15c of :he German Foreign Investment Act have been met and the Company's Siares may be disv'buted public'y ir :he Federa' Republic of Germany Tiis Prospectus is available in a Gepman language version, which includes additioral information for German investors

Gibraltar Tie Company has obtained the status of a recognized scheme under Settion 24 of the Gibraltar Financial Services Ordinance, 1989. By virtue of a confirmation from the Financial Services Commission the Company may publicly distribute its Shares in Gibraltar.

Greece Approval has been granted to the Company by the Capital Markets Commit:ee in accordance w:th the procedures of Articles 49a and 49b of the Law 1969/1991, to distribute 1:s Shares in Greece. This Prospectus IS

ava:lable ir! a Greek language translariot. It must be noted that the relevant Capital Markets Committee guidelines provide that "Mutual Funds do not have a guaranteed retbrn and That previous performance does not secure future performance".

Guernsey Consent under the Control of Borrowing (Bailiwick of Guernsey) Ordqnances, 1959 :o 1989. has beer okained to the circulation of th.2 Prospectus IC

Guernsey Neitier the Guernsey Financial Services Commission nor the States Advisory and Finance Committee takes aiy responsibhty for t k financial soundness of the Company or for the correctness of any of the statement5 made or opiniops expressed wi:h regard to it

Hong Kong The Company is au:horised as a mutual fund corporation by the Securities and Futures Cornmissior in Hong Kong. The Commission takes no responsib.lity for the financial soundness of any schemes or for the correctness of any statements made or opinions expressed in this Prospectus. This Prospectus is available for Hong Kong residents in both English and Chinese Investors using the Epglish language Prospectus should read the Prospechs in coijunction with the Hong Kong addendum, which contains addirional irfo-matioi for Hong Koig res:dents. This additional informatior, is also contained ir: tile English/Chinese Summary of Prospectus that is

available for Hong Kong investors who are considering applying for Class A shaves o:ner than through Merrill Lynch The Company's representative in Hong Kong is Merrill Lynch Investment Managers (Asia) Limited.

Ireland The requirements of Regulai,ons 86 and 90 of the European Communities (Undertakirgs for Co'lective 1nves:ment IF Transferable Securities) Regulations. 1989 havirg been met, tbe Central Bank of Ireland has


Appendix D

corfirmed that the Company may market its Shares in Ireland (subject to the provis,ons of Regulatioi 87) AlBlBNY Fund Maiagement Limited will peeform tne services of fac. i:y agent in lreiand Docmentation re'ating to the Company can be irspected a: AIB/BNY Fund Maiagement Limited's offices at Guild House, Guild keet , IFSC, Dublin 1, Ireland during normal bus ness i-ours and copies of tqe documentdtioi ca i be obtaiied from tbem if requ red AIB/BNY FLnd Maiagemert Limited will also forward any redernptioi or dividerd paymer: requests or ary complaints relat ng to the Covpany to the Transfer Agert

Iceland Ti-e Company has notified ti-e Iceland c Financ al SLpervision AuThority (Fjdrm6 aeftirliti ) in accordance with Sec:ion 43 of the Act No 30/2003 on Undertak ngs for Collenive Investment i i Tramferable Securities (KITS) and livestmeit Funds regarding foreign irvestmen: undertakings' rights to offer UCITS-fJids in lcelaid By virtue of confimat on f*rm the Icelandic Financial Supervision AJtkOrty the Company may market and sell its Shares in Iceland This Prospectus and all other informa:ion and docJments tbat the Company must pub18sh in LuxernboLrg pmuant to appiicable Luxembourg Law are not translated into Ice'andic as the Company's S h e s are only inteided to be offered to professional investors in Iceland

Italy The Company has obtained the reg stratior. in Italy of certain Funds from ti-e Commissior.e Nazionale per le Societd e la Borsa (CONSOB) and from the Baica d'lta:ia pursuant to article 42 of Legislative Decree no. 58 of 24 February 1998 and imp1emen:ir.g regulations. Tlle offering of the Funds can on!y be cawed out by the appoirlted distributors indicated in the Italian wrapper (New Subscription Form) in accordance with the procedures indicated there:n. The Italian translatior. of this Prospectus is avaiiable for Italian investors together with the I ta l ,a i wrapper and the other documents indicated in the ltaiiai wrapper at the offices of the appointed correspondent balk of the Company

Jersey The consent of the Jersey Financial Services Commission (:he "Commission") has been obtained pursJant to the Control of Borrowing (Jersey) Order 1958, as amended, to raise money in the Is'and by the issue of Shares of the Company and for the d,sVibl;t:on of this Prospectus. The Commission is protected by the Control of Borrowing (Jersey) Law 1947, as amended, against liability arising fro71 the dxharge of its funaions under that law

Korea A regis;ration statement for the distr:bdaor of Shares in the Company to the public in Korea has been filed with the Firarclal Supervisory Commission in accordance with the Ind4rect Investment Assets Management Business Adof Korea a id its regulations thereunder

Macau Au:howt,on is given by the Antondade Monetaria De Macau for the advert siqg and marketing the Company and certain registered sub-funds in

Macau i i accordarce with Article 61 a i d 62 of Decree Law No 83/99/M of 22 November 1999 This Prospectus is available to Macau residents in both English and Chinese

Malta The Company has been authorised as a Collective 1nves:ment Sc'leme by the Malta Financial Services Centre ("MFSC") in respect of certain Funds Such authorisation does not constitute a wavranty by the MFSC as to tbe

performance of the Company and the MFSC shall pot be liabie for the performance or default of the Company.

Netherlands The Company bas notified the Netherlands Authority for the Financial Markets (Autorkt Financiele Markten) in accordance with sect on 17 of the Investments Ins:.tut,ons Act (wet toezicht beleggingsinstellirge~) and by virtue of a conf.rmation from the Netherlands Authority for tbe Financia! Markets may offer its Shares to the public in the Netherlands Tnis Prospectus and al: other information and documents that the Company must publish in Luxembourg pursuant to applicable Luxembourg laws are translated into Dutch and are held availab!e by Merrill Lynch N.V., the represenia::ve of the Company in the Netherlands

Norway Tie Company has rotlfied the Banking, Iisurance and Securities Commission of Norway (Kredit: :synet) ir accordance with the Securities Fuids Act of 1981 and the RegJlatlon of 1994 regarding foreign investment undertakings rights to offer UCITS-flrids for sale in Norway By virtue of a confirmation letter from the Banking, Iisgrance and Securities Commission dated 5 March 2001 the Company may market and sell i t s Shares in Norway

Peru The Shares of the Company will not be registered i i PerLi under Decreta Legislativo 862: Texto Unico Ordenado de la Ley del Mercado de Valores. as amended, and may only be offered and sold to ir;sti:utional investors pursuant to a private placement. The Company has obtaired registration in Peru of certa r. Funds with the Superintendencia de Banca, Seguros y AFP pursuart to Decreta Supremo 054-97-EF Texto Unico Ordenado de la Ley del Sistema Pr:vado del Fondo de Pensiones, as amended, and the rules ard regulations enacted thereunder,

Poland The Company has notified the Polish Securities and Exchange Commission (Komisja Papierow Wartoiciowych i Gield) of its intention to distribule its Shares in Poland under aqicle 253 of an Act or. iaves:mert funds (Dz. U.

04 146.1 546). The Company has established its represeitative and payment agent in Poland. T k Company is obliged to publish in the M s h language :his Prospectus, simplified version of Prospectus. annual and semi-annual financial reports and other documents ard information reql;ired by the provisions of lam of the state wbere it maintains its head office The Company d:stributes its Shares in Poland by authorised distributors on!y.

Portugal In Poqugal, the Comissao do Mercado dos Valores Mobilihrios bas issued notifications of no objeaion to the marketing of certain FJnds by several distributors (according to the list of Funds contained in the respective non objectlon no:ifications) with whom the Principal Distributor has entered into distribution agreements


Appendix D

Singapore The offer or invi:a:ion of Shares of tne Company which is the subject of th s Prospectus is only a!lowed to be made to accredited investors and ro: tne retail public in 5 ngapore. Moreover, the Prospecws is not a prospectus as defined i t the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"). Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. You should corsider carefully wbether the investmen: is siltable for you.

The Company s regulated under Pan I of :le Luxembourg Law of 20 December 2002 (the "2002 Law"), as amended, relating to undertakings for collective investmeit and is subject to the supervision of the Commission de Survei'lance du SecteLr Fiiancier (the "CSSF") The cor:act details of t i e LLxembourg CSSF are as follows

Address: 110. route d'Arlon L-2991 Luxembourg

This adthorisation is ro t to be corsidered as a positive assessvei: made by this supervisory authority of the quality of t+e Sbares offered for sale

The Investment Manager of the Company, Merrill Lynch Investment Managers (Channel Islands) Limited, is regulated by the Jersey Financial Serv:ces Commission. T i e cortac: details of the Jersey F.nanc a! Services Commission are as foliows:

Address. PO Box 267 Nelson House David Pace St Helier Jersey, JE4 8TP Channel Islands

This Prospectus has not been reg:stered as a prospectus wrh the Moretary Authority of Singapore. Accordingly, this Prospealis and any other document or material in connection wi:h tne offer or sale, or invitation for subscription or pdrchase, of Shares may not be circulated or distributed, nor may Shares be o'fered or sold, or be made the subject of an invitation for silbscr ption or purchase, whsher directly or ind rectly, to the pub'ic or any membe: of the public in Singapore other than (i) to an institutional investor specified in Section 304 of the SFA, (11) to an accredited investor, and in accordarce with the conditions, specified in Section 305 of the SFA or (111) otherwise pursuant to, and in accordance with the cond,tms of, any o:kr applicable provis on of the SFA.

Spain The Company has obta ned the registration of Class E Shares of cenain Funds wi:h trle Comisidn Nac:oral del Mercado de Valores in Spaii Class E Shares of these Funds may be distributed to the public r Spain tnrough distributors appointed by the Principal O is th to r

Sweden TPe Compary has notified the Financial Supervisoy Au:hority in accordance with Section 7 b of the Securities Fund ACi (1990 1 1 14) and by virtue of a confirmation from the Financial Supewisory Adthority the Company may pub1 cly distribute its Shares *n Sweden

Switzerland T i e Swiss Federal Bankiig Commission has authorised Merrill Lynch Investment Managers Limited (London), Zurich Branch, as the Company's Swiss repesentatve. ta offer and dis:ribute the Sbares of each of the Company's Funds in or from Switzerlard in accordance with Article 45 of the SW~SS Federal Law on lnvestrnert Funds of 18th March 1994 A German language versioi of this Prospectus is available which also includes :he additional inforTation for Swiss investors in Appendix F of this Prospectds

Taiwan The Company has obtaired the registration of certain FLnds wit1 the Securities and Exchange Commission ("SEC") in Ta,wan, fol:ow,ng an applicat,on by a loca securities irvestment consulting enterprise ("SICE") The Shares may be distributed under the rules of tne SEC and in accordance witb t'lc Securities and Exc9ange Law Shares may be recommended by the SICE for pbrchase by its cutomers or directly to customers of authorised banks

United Kingdom The conter::s of tPis Prospectus have been approved solely for the purposes of secion 21 of the UK Financial Services and Markets Act ZOO0 (the "Act") by the Company's UK Dis:ributor, Merrill Lynch Investment Managers Limited. 33 King William Stree:, London EC4R 9AS (which is regulated by the Financia; 5erv:ces Authority in the conduct of investment business in the UK) The Company has obta,ned the status of "recogr.ised scheme'' for the purposes of the Act Some or all of the protections provided by the UK regulatory system will roi apply to investments in the Company. Compensation under the UK Investors Compensat on Scheme will generally not be availabe. The Company prov:des the facilities required by the regulations governing such schemes at the offices of Merrill Lynch Investment Managers Limited. UK bea*er shareholders should contact the UK D stributor for the arrargements that will apply to them. An applicart for Snares will not have the r:ght to cancel his application under the UK Financia; Services AEthority Conduct of Business Rules. Further details or: Merrill Lyrch 1nternat;onal Investment Funds can be obtained from the UK Dis:r,butor's Broker Suppor; Desk in Lopdon, telephone: 08457 405 405.

USA The Shares WII' not be registered under the US Securities Act of 1933, as ameided (he "Secur ties Act") and may not be directly or indirectly offered or so'd in tne USA or aiy of its territor es or possessions or areas subject to i:sjurisdiction or to or for the benefit of a US Person The Company will not be registered uider the US Investment Company Act of 1940 US Persons are not permitted to own Shares Attention is drawn to paragraphs 3 and 4 of Append x B wh,ch specify certain compulsory redemption powers and define "US Person"

Generally The d:stributon of this Prospectus and the offering of the Shares may be au:horised or restr,cted in certain other jwisdictions. The above information is for general guidance oily and it is the responsibility of any persons in possession of th's Prospectus a id of any persons wishing to make applicatioi for Shares to inform themselves of, acd to observe, all appl:cable laws and regula:ions of any relevant jurisdictions.


Appendix E

Appendix E - Summary of Charges and Expenses

Class A C l a s B Class C Class D Class E Class I Class C Class X

5.00% 0 00% 0.00% 2.00% 3.00% 0.00% 0.00% 0.00%

1 50% 0 00% 0 OG% 1 50% 1 00% 4 00% to 0 00% 1 50% 1 25% 1 00% to 0 00% 0 75% 0 00% 0 00% 150% 0 50% 0 00% 0 00% G 00% 0 00% 100% 1 00% 4 00% to 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 100% 0 00% 0 00% Class B 0 00% 100% 1 00% 4 00% to 0 00% Class C 0 00% 100% 1 25% 1 00% lo 0 00% Class E 3 00% 1 .OO% 0 50% 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 100% 0 00% 0 00% Class B 0 00% 100% 1 00% 4 00% to 0 00% Class C 0 00% 100% 125% lOG%ioOW% Class E 3 00% 100% 0 50% 0 W% Class J 0 00% 0 00% 0 00% 0 00% Class Q 0 00% 0 55% 1 00% 4 00% to 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A Class 0 Class C Class 0 Class E Class J Class 0 Class X

5.00% 0 00% 0 00% 2 00% 3 00% 0 00% 0 00% 0 00%

2.00% 2.00% 2 00% 1 CO% 2 GO% 0.00% 2 00%

0 00%

0 00% 0 00% 1 00% 4 00% IO 0 00% 1 25% 1 00% to C 00% 0 00% 0 00% 0 50% 0 00% 0 GO% 0 00% 1 2 5 % 400% to000% 0 00% 0 00%

Class A 5 00% 1 go% 0 00% 0 00% Class B 0 00% 1 50% 1 00% 4 00% to 0 00% CldS c 0 00% 1 50% 1 25% 1 00% to 0 GO% Class 0 1 OG% 0 75% 0 00% 0 00% C'asr E 3 00% 150% 0 50% 0 o w C m s f 0 00% 0 00% 0 00% 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 135% 0 00% 0 00% Class B 0 00% 135% 1.00% 4 00% to 0 00% Class C 0 00% 1 3 5 % 1 25% 1 00% to 0 00% Class E 3 00% 135% 0 50% OW% Class 1 0 00% 0 00% 0 00% 0 00% Class 9 0 00% 0 55% 100% 400% tOOW% Class X 0 00% 0 00% o 00% 0 00%

Cles A 5.00% 1.35% 0.00% O.Oa% Class a 0 00% 1.35% 1 00% 4.00% to 0.00% Class C 0 00% 1.35% 1 25% 1 00% to 0.00% Class E 3 00% 1.35% 0.50% 0 00% Class I 0.00% 0.00% 0.00% 0.00% class G 0 00% 1.35% 1.25% 4.00% to 0 GO% C!ass X 0 00% 0 00% 0.00% O.OG%

Class A 5 00% 135% 0 00% 0.00% Class E 0 00% 1.35% 1.00% 4 00% to 0 00% Class C 0 00% 1.35% 1.25% M O % tOO.OD%

Class E 3 00% 1.35% 0.50% 0.00% Class J 0 00% 0.00% 0 00% 0.00% Class Q 0 00% 1 35% 1 25% 4.00% to0.00% Class X 0 00% 0.00% 0 00% O.W%

Class A 5 00% 150% 0 00% 0 CO% Class B 0 00% 150% 1 00% 4 00% to 0 00% Class c 0 00% 1 5 0 % 1 25% 1 00% to 0 00% Class 0 2 00% 0 75% 0 00% 0 00% Class E 3 00% 150% 0 50% 0 00% Class 1 0 00% 0 00% 0 00% 0 00% Class X 0 OC% 0 00% 0 00% OW%

Class A Class B Class C Class D Class E Class J Class Q Class X

5 00% 0 00% 0.00% 2 00% 3 00% 0 Do% 0 00% 0 W%

1.50%

1 .SO% 1 SO% 0.75% 1.50% 0.00% 1 SO% 0 00%

0 00% 0 00% 1.00% 4.00% to 0 00% 1.25% 100%toOOO% 0 00% 0 00% 0 50% 0 00% 0 00% 0.00% 1 25% 4 00% to 0 00% 0 00% 0 00%

Class A 5 00% 1 .OO% o o w 0.00% Class B 0.00% 1 .OO% 1 00% 4 00% to 0.00% Class c 0.00% 1 .OO% 1.25% 1.00% toO.W% Class E 3.00% 1.00% 0.50% 0.00% Class Q 0 00% 1.15% 1.25% 4.00% to 0.00% Class X 0 00% 0.00% 0.00% 0 00%

As from 29 M a y 2006, the fee table for the Euro Bond Fund shall read:

Class A 5 00% 0.75% 0.00% 0 00% Class B G.OO% 0.75% 1.00% 4.00% to 0.00% Class C 0.00% 0.75% 1.15% 1 .CO% to 0 00% Class E 3.00% 0.75% 0.50% 0 00% Class I 0 00% O.W% 0.00% 0 00% Class Q 0 00% 1.15% 1.25% 4 00% to 0 00% Class X D 00% 0.00% 0 00% 0.00%

58 Merrill Lynch International lnvestrrent Funds

Appendix E

I

Class A 5 00% 1 0 0 % 0 OG% 0 00% Class B 0 00% 1 0 0 % 1 00% 4 00% to 0 00% Class c 0 00% 1 0 0 % 1 25% 1 00% to 0 00% Class E 3 00% 1 0 0 % 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00%

Class X 0 00% 0 00% 0 00% 0 00%

Class A 0 00% 0 75% 0 00% 0 00%

Class E c CO% 0 75% D 00% 0 00% Clasr C 0 00% 0 75% 0 EO% 0 00% Class E 0 00% 0 75% 0 25% G 00% Class J 0 00% 0 0096 0 00% G 00%

Class 0 0 00% 0 75% 0 00% 0 00%

Class X 0 00% 0 00% 0 00% 0 00%

Class A Class B Class c Class D Class E Class J

Class Q Class X

5.00% 0 00% 0 00% 2 00% 3 00% 0.00% 0 00% 0 00%

1 5 0 % 0 00% 0 00% 1 5 0 % 1 00% 4 00% to 0 00% 1 5 0 % 1 25% 1 OG% to 0 00% 0 75% 0 00% 0 00% 1 5 0 % 0 50% 0 00% 0 00% c 00% 0 00% 1 1 5 % 1 25% 4 00% to 0 GO% 0 00% 0 00% 0 00%

Clasr A Class B

Class C Class D Class E Class J Class Q Class X

5 00% 0 00% 0.00% 2 00% 3 00% 0 00% 0 00% 0 00%

1 50% 0 c095 0 00% 1 5C% 1 00% 4 00% to 0 00% 15C% 1 25% 1 00% to G 00% 0 75% 0 00% 0 00% 1 5 0 % 0 50% 0 00% 0 00% 0 00% 0 00%

1 0 0 % 1 00% 4 00% to 0 00% 0 00% 0 00% 0 00%

Class A Class B Class C Class D Class E Class J Class Q Class X

5 00% 0 00% 0 00% 2 00% 3.00% 0.00% 0 00%

0 00%

150% 0 00% 0 00% 1.50% 1 00% 4 00% to 0 00% 150% 1 25% 1 00% to 0 00% 0 75% 0 00% 0 CO% 1 5 0 % 0 50% 0 00% 0 00% 0 00% 0 00% 1 1 5 % 1 25% 4 00% to 0 00%

0 00% 0 00% 0 00%

Class A 5 00% 1 7 5 % 0 00% 0 00%

Class A 5 00% 1 5 0 % 0 00% 0 00% Class B 0 00% 1 5 0 % 1 00% 4 00% to 0 00% Class C 0 00% 1 5 0 % 1 25% 1 00% to 0 00% Class D 2 00% 0 75% 0.00% 0 00% Class E 3 00% 1 5 0 % 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class x 0 00% 0 00% 0 00% 0 00%

Class A Class B Class C Class D Class E Class 1 Class Q Class X

5 00% 0 OG% 0 00% 2 00% 3.00% 0 00% 0 00%

0.00%

1 1 5 % 0 00% 0 00% 1 7 5 % 1 00% 4 00% to 0 00% 1 7 5 % 1 25% 1 OG% to 0 00% 100% 0 00% 0 00%

1 7 5 % 0 50% 0 00% 0 00% 0 00% 0 00%

1 7 5 % 1 25% 4 00% to 0 00% 0 00% 0 00% 0 00%

Class A

Class B Class c Class 0 Class E Class 1 Class Q Class X

5.00% 0 00% 0 00%

2 00% 3 00% 0 00% 0 00% 0 00%

1 50% 0 00% 0 00% 1 5 0 % 1 00% 4 00% tO 0 00% 1 5 0 % 1 25% 1 00% to 0 00%

0 75% 0 00% 0 00% 1 5 0 % 0 50% 0 00% 0 of)% 0 00% 0 00% 1 [XI% 1 00% 4 00% to 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 100% 0 00% 0 00% Class B 0 00% 100% 1.00% 4 00% to 0 00% Class c 0 00% 1 0 0 % 1 25% 1 00% to 0 00% Class E 3 00% 1.00% 0.50% 0 00% Class J c 00% 0 00% 0 00% 0 00% Class Q G 00% 115% 1.25% 4 CO% to 0 00% Class X 0 00% 0 0(1% 0 00% 0 00%

Class A 5 00% 100% 0.00% 0 00% Class B 0.00% 1.00% 1 .OO% 4.00% to 0 00% Class C 0.00% 1 .OO% 1.25% 1.00% toO00% Class E 3 00% 1 .OO% 0.50% 0.00% Class J 0 00% 0 00% O.W% 0.00% Class Q 0.00% 1.15% 1.25% 4.00% t o 0.00% Clars X 0.0046 o.ooo/. 0.00% 0.00%

Class A 5 00% 0 75% 0 0% 0 00% Class B 0 00% 0 75% 1 00% 4 00% to 0 00% Class C 0 00% 0 75% 1 25% 1 00% to 0 00% Class 0 2 00% 0 40% 0 00% 0 09% Class E 3 GO% 0 75% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 1 5 0 % 0 0% 0 00% Class B 0 00% 150% 1 00% 4 00% to 0 00% Class C 0 00% 1 5 0 % 1 25% 1 00% to 0 00% Class D 2 00% 0 75% 0 00% 0 00% Class E 3 00% 1 50% 0 50% 0 09% Class J 0 00% 0 00% 0 00% 0 00% Class X 0 00% 0 00% 0 00% 0 00%


Appendix E

Class A Class B Class C Class 0 Class E Class J Class Q

5.00% 0.00% 0 00% 2 00% 3 OG% 0 00% 0 00%

1.50% 0.00% 0.00% 1 5 0 % 1 00% 4.00% t o 0.00% 1.50% 1.25% 1 .OO% t o 0.00% 0.75% 0.00% 0.00% 1.50% 0.50% 0.00% 0.00% 0 00% 0.00% 1.15% 1.25% 4.00% to 0.00% 0.00% 0.00% 0.00%

Class 4 Class B Class C Class D Class E Class J Class Q Class X

5.00% 0 00% 0 00% 2 00% 3 00% 0 00% 0 00% 0.00%

1 5 0 % 0 00% 0 00% 150% 1 0 0 % boo% too0046 150% 1 2 5 % lOO%toO00% 0 75% 0 00% 0 00% 1 5 0 % 0 50% 0 00% 0 00% 0 00% 000% 100% 100% 400% toO00% 0 00% 0 00% 0 00%

Class A 5 00% 150% 0 00% 0 00% Class B 0 00% 1 50% 1 OG% 4 00% :O 0 00% Class C 0 00% 150% 1 25% 1 00% to 0 00% Class D 2 OC% 0 75% G 00% 0 00% Class E 3 00% 1 50% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class X 0 O W 0 00% 0 00% 0 00%

Class A 5 00% 150% 0 00% 0 00% Class B 0 00% 150% 1 00% 4 00% to 0 0% Class C 0 00% 150% 1 25% 1 GO% to 0 00% Class D 2 00% 0 75% 0 00% 0 00% Class E 3 00% 15G% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 150% 0.00% 0 00% Class A 5.00% 1.75% 0 00% 0 00% Class B O,OO% 1 SO% 1.00% 4 00% to 0 00%

Class C 0 00% 1.50% 1.25% 1 .OO% to G.W% Class D 2 00% 0 75% 0 00% 0.00% Class E 3 00% 1.50% 0.50% 0.00%

Class A 5 00% 1 5 0 % 0 00% 0.00% Class J 0 GO% 0 00% 0 00% 0.00% Ciass B 0 00% 1.50% 1 00% 4 00% to 0 00% Tlaa X 0 00% 0 00% 0.00% 0 00% Clas c 0.00% 1.50% 1.25% 1 .OO% to 0.00% Class 3 2 00% 0.75% 0.00% 0.00%

Class E 3 00% 150% 0.50% 0.00% Class A 5 00% 1.50% 0.00% 0.00% Class J 0 00% 0.00% 0.00% 0,009b Class B 0 00% 1.50% 1 00% 4.00% 10 0 00%

Class C 0.00% 1.50% 1 25% 1 .OO% to 0 00% Class C 0 00% 1 .OO% 1.00% 4 00% to 0.00% Class X 0 00% 0.00% 0 00% 0.00% Class D 2 00% 0.75% 0.00% 0.00%

Class E 3.00% 150% 0 50% 0 00% Class J 0 00% 0.00% 0 00% 0 00%

Class A 5.OG% 1 50% 0 00% 0 00% Class Q 0 00% 1 1 5 % 1 25% 4.00% to 0 00% Class 8 0 00% 150% 1 00% 4 00% to 0 00% C l x q X n M% n 00% 0 00% 0 00% Class C O.OC% 1 50% 1 25% 1 .OO% to 0.00% Class D 2.0095 0 75% G.009'0 0.00% Class E 3.00% 150% 0.50% 0.00% Class A 5.00% 1.50% 0.00% 0 00% Class I 0 00% 0.00% 0.00% 0 00% Class 0 0.00% 1 5 0 % 1 .OO% 4 CO% t o 0 00% Class X 0.00% 0.00% 0.00% 0 00% Class C 0 00% 1.50% 1.25% 1.00% to 0.00%

Class D 2 00% 0.75% 0.00% 0.00% Class E 3 W% ! SO46 0.50% OW%

Class A 5 00% 1 3 5 % 0.00% 0.00% Class J 0.00% 0.00% 0.00% 0 00% Class B 0.00% 135% 1.00% 4 00% ti3 0.00% Class X 0 00% 0 00% 0.00% 0.00% Class C 0 00% 1 3 5 % 1.25% 1.00% to 0.00% Class E 3.00% 1.35% 0 50% O.GO% Class i 0 00% 0.00% 0 00% 0.00% Class 9 0.00% 1.35% 1.25% 4.00% Io 0.00%

n nnc 0.00% 0.00%

class A Class B Class C Class D Class E Class J Clzss Q Class X

5 00% 0 00% 0 00% 2 00% 3 110% 0 00% 0 00% 0 00%

1.50% 0 00% 0.00% 1.50% 1 00% 4.00% to 0.00% 1 5 0 % 1.25% 1.00%?00.#% 0.75% 0 00% 0 00% 1.50% 0.50% 0.00% 0.00% 0 00% 0 GF% 1 5 0 % 1.25% 4.00% lo O.OC% 0.00% 0 00% 0.00%

Class A Class B Class C Class D Class E Class J Class 4 Class X

5 00% 0 00% 0.00% 2 00% 3 00% 0.00% 0 00% 0 00%

1.75% 0.00% 0.00% 1.75% 1 GO% 4.00% to 0 00% 1.75% 1.25% 1 .00% to 0 00% 1 .Do% 0.00% 0 00% 1 .752 0 50% 0.00% 0.00% 0 00% 0.00% 1.75% 1.25% 4.0096 to 0 00% O.OG% 0.00% 0 00%

60 Merri l l Lynch International Investment Funds

Appendix E

Class B 0 00% 1 7 5 % 1 00% 4 00% to 0 00% Class A 5 00% 1 50% 0 00% 0 00% Class C 0 00% 1 1 5 % 1 25% 1 00% to 0 CO% Clars B 0 00% 1 5 0 % 1 00% 4 00% to 0 00% Class 3 2 00% 1 0 0 % 0 00% 0 00% Class C 0 00% 1 50% 1 25% 1 00% to 0 00% Class E 3 00% 1 7 5 % 0 50% 0 00% Class E 3 00% 1 5 0 % 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class J 0 GO% 0 00% 0 00% 0 00%

Class Q 0 00% 100% 1 00% 4 00% !O 0 00% Class 0 0 00% 1 5 0 % 1 25% 4 00% to 0 00% Class X 0 00% 0 00% 0 00% 0 00% Class X 0 00% 0 00% 0 00% 0 00%

Class A 5 00% 1 7 5 % 0 00% 0 00% Clarr A 5 00% 1 5 0 % 0 00% 0 00% Class E 0 00% 175% 1 00% 4 00% to 0 00% Class B c 00% 1 5 0 % 1 00% 4 00% to 0 00% Class c 0 00% 1 7 5 % 1 25% 1 00% to 0 00% Class C 0 00% 1 50% 1 2 5 % 1 0 0 % t o O 0 0 % Class D 2 00% 1 00% G 00% 0 00% Class D 2 00% 0 75% 0 00% 0 00% Class E 3 00% 175% 0 50% 0 00% Class E 3 00% 1 5 0 % 0 50% 0 00% Ciass J 0 00% 0 00% 0 00% 0 00% Class J 0 00% 0 00% 0 00% 0 00%

Class A C!ass E

5.00% 1 5 0 % 0.00% 0 OG% 0 00% 1.50% 1 00% 4 00% to 0 00%

Class C 0.00% 1.50% 1 25% 1 00% to 0.00% Class D 2 00% 0.75% 0 00% 0 00% Class E 3 00% 1.50% 0.50% 0.00% Class J 0.00% 0 00% 0.00% 0 OG% Class Q 0.00% 1.15% 1 00% 4 00% to 0.00% Class X 0.00% 0.00% 0 00% 0.00%

Class A

Class B Class c Class C Class E Class J Class 0 Class X

5.00% 0 00% o o m 2 00% 3 00% 0 00% 0.00% o 011%

1.50% 1.5016 1.50% 0.75% 1.50% 0.00% 1 15%

0 00% 0 00% 1 00% 4 00% to 0 00% 1 25% 1 00% toOOO% 0 00% 0 00% 0.50% 0 00% 0 00% 0 00% 1 2596 4 00% to 0 00%

Class A 5 00% 100% 0 00% 0 00% Class 6 0 00% 100% 1 00% 4 00% to 0 00% Class C 0 00% 1 0 0 % 1 25% 1 00% to 0 00% Class E 3 00% t 00% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class C 0 00% 100% 1 25% 4 00% to 0 00% Class X n nnu n nns n nnsr

Class A 0 00% 0 75% 0 00% 0 00%

Class C 0 00% 0 75% 0 00% 0 00% Class E 0 00% 0 75% 0 25% 0 00% Class J 0 00% 0 00% 0 OG% 0 00% Class Q 0 00% 0 75% 0 00% 0 00% Class X 0 00% o nnu

Class E o (10% G 75% 0 00% 0 GO%

Class A Class E Class C Class C Class E Class J

Class Q

Class X

5 00% 0 00% 0 00% 2.00% 3 00% 0 00% 0.00% 0 00%

1.50% 1.50% 1.50% 0 75% 1 SO% 0 00% 1.00% 0 M t

0.00% 0 00% 1 00% 4 00% to 0 00% 1 25% 1 00% to 0 00% 0 00% 0 00% 0.50% 0 00% 0 00% 0 00% 1 00% 4 00% to 0.00% n nnv+ n no%

Clasr A 5 00% 0 30% 0 00% 0 00% C l a s B 0 00% 0 90% 1 W% 4 00% tO 0 00% Class C 0 00% 0 90% 1 25% 1 00% to 0 00% Class E 3 00% 0 90% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 00% Class Q 0 CO% 0 65% 1 00% 4 00% to 0 00% Class x 0 00% 0 00% 0 00% n 00%

Ciass A 5.00% 1.50% 0.00% 0 00% Clasr E 0 OG3/. 150% 1 00% 4 00% tO O.OG% Class C 0 00% 1 5 0 9 1.25% 1 .OOY to 0.00%

Class J 0 00% 0.00% c 00% 0.00% Class B 0.00% 1.35% 1 .OO% 4.00% to 0.00% Class E 3.00% 1 5 0 % 0 50% 0 00% Class A 5 00% 1.35% 0.00% 0 00%

1 25% 4 00% to 0,OGYa Class C 0 00% 1.35% 1 25% 1 .OO% to 0.00% Class X 0 00% 0 00% 0.00% 0 00% Class E 3 00% 1.35% 050% 0 00%

Class Q 0 00% 1.50%

0 00% Class J 0 00% Class Q 0.00% 0.55% 0 75% 4 00% to 0.00% Class X 0.00% 0.00% 0.00% 0.00%

0.00% O.W%


Appendix E

Class A 3 00% 100% 0 00% 0 00%

Class c 0 00% 100% 1 25% 1 00% to 0 00% C'arr E 3 00% 100% 0 50% 0 00% Class J 0 00% 0 00% 0 00% 0 GO%

a no% 0 00%

Class B 0 00% 100% 1 00% 4 00% to o 00%

Class A Class B Class C Class 0 Class E Clarr J Class Q Class X

5 00% 0 00% 0.00% 2 W% 3 00% 0 00% 0 00% 0 00%

1.50% 1 S O % 1.50% 0.75% 1.50% 0.00% 1 .SO% 0.00%

a 00% 0 00%

1 00% 4.00% to 0 00% 1 25% 1 00% to 0 00% 0 00% 0 00% 0 50% 0.81%

0 00% 0 00% 1 25% 4.00% to 0 00% 0 00% 0 00%

C iass A 0 00% 0 75% 0 00% 0.00% Clasr B 0 00% 0.75% 0 00% 0.00% Class C 0 00% 0.75% 0 00% 0.00% Class E 0 00% 0.75% 0.25% 0.00%

Class Q 0.00% 0.75% 0 OC% 0.00% Class X 0.00% 0.00% 0 00% 0.00%

Class J 0.00% 0.00% 0 00% 0.00%

Class A Class B Class C Class D Class E Class J

Class Q Class X

5.00% o o w o 0 00% z 00% 3.00% 0 00% 0 00% 0 00%

1.50% 150% 1 .SO% 0 75%

1.50% 0 00% 1 15% 0 00%

0 00% 0 00% 1 00% 4 00% to 0 00% 1 25% 1 00% to 0 W% 0 00% 0 00% 0 50% 0 00% 0 00% OW% 1 25% 4 00% to 0 00%

0 00%

Class A Class B Class C Class 0 Class E Class J Class P Class X

5.00% 0 00% 0 00% 2.00% 3 00% 0.00% OW% 000%

1.50% 1.50% 150% 0.75% 1.50% 0.00% 1 .OO$ 0.00%

o 00% 0 00%

1 00% 4 00% to o 00%

1.25% 1 .OO% to 0.00% o 00% 0 00% 0.50% 0 00% 0 00% 0 00% 1 00% 4 00% to 0 00% 0.00% 0 00%

Class A 5 00% 0.85% 0.00% 0 00% Class E 0 00% 0.85% 1.00% 4.00% to 0.00% Class C 0 00% o 85% 1.25% 1 00% to0.0096 Class E 3 00% 0.85% 0.50% 0.00% Class J 0.00% 0 00% 0.00% 0.00% Class X G GO% O.M)% 0.00% 0 00%

Class A Class 8 Class C Class D Class E Class f Class Q riarr x

5 00%

0 00% O.OG% 2.0C% 3 00% 0.00% 0 00% o 00%

150% 0 00% 0 00% 1 50% 1 00% 4 00% to 0 00% 1 50% 1 25% 1 00% to 0 00% 0 75% 0 00% 0 CO% 150% 0 50% 0 00% 0 00% 0 00% 0 00% 100% 1 OG% 4 00% to 0 00% 0 00% 0 00% 0 CO%

Class A Class 0 Class C Class D Class E Class I Class Q Class X

5 GO% 0 00% 0 00% 2 00% 3.00% o 00% o 00%

0 W%

1.75% 0.00% D.00%

175% 1.25% 1 .GO% to 0.00% 1 .OO% 0.00% 0.00% 1.75% 0.50% 0 00% 0.00% 0 00% 0 00% 1.75% 1.25% 4.00% to O,OO%

1.75% 1 .oo% 4 00% to a 00%

0.00% 0.00% o 00%

Class A 5 00% 1 00% 0 00% 0 00% Class B 0 00% 1 00% 1 00% 4 00% to 0 00% Class c 0 00% 100% 1 25% 1 00% to 0 00% Class E 3 00% 100% 0 50% 0 00%

Class J 0 00% 0 00% 0 00% OW% Class Q 0 00% 1 00% 0 75% 4 00% to 0 00%

0 OC'h G 00% 0 00% o aa%

Class A

Class B Class C Class D Clasr E Class J Class Q Class X

5 00% 0.00% 0 00% 2 00% 3 00% 0 00% 0 00% 0.00%

1 7 5 % 0 00% o 00% 1 75% 1 00% 4 00% t3 0 00% 1 75% 1 25% 1 00% to 0 00% 100% 0 0% 0 00%

1 75% 0 50% 0 00% 0 OG% 0 00% 0 00% 100% 100% 400%toO00% 0 00% 0 00% 0 00%

Class A Clao B Ciass C Class D Class E Class J Class 0 Class X

5 00% 0 00% 0 00% 2.00% 3.00% 0 00% 0 00% 0 00%

1.50% 150% 1.50% 0 75% 150% 0 00% 100% 0 00%

0 00% 0 CO% 1 00% 4 00% to 0 00% 1 2S% 1 00% to 0 00% 0 00% 0 00% 0 50% 0 00% 0 00% 0 00% 1 00% 4 00% !a 0 00% 0 00% a 00%

Class A Class B Class C Class D Class E Class J Class 9 Class X

5.00% 0 00% 0 00% 2.00% 3.00% a 00%

0 00% 0 00%

1.75% 1.75% 1.75% 1 .OO% 1.75% 0 00% 1.50% 0 00%

0 GO% 0 00% 1 .OOA 4.00% to 0 00% 1.25% 1 00% to 0 00% 0 00% 0 00% 0 50% 0 00% 0.00% 0 00% 1.25% 4 00% to 0 00% 0 00% 0.00%


Appendix E

Class A Class B Class C Class 0 Class E Class J Class Q Class X

5 00% 0 00% 0 00% 2 00% 3.00% 0.00% 0 00% 0 00%

175% 0 00% 0 00% 1 7 5 % 1 00% 4 00% to 0 00% 175% 1 25% 1 OC% to 0 OC% 100% 0 00% 0 00% 175% 0 50% 0 00% 0 00% 0 00% 0 00% 175% 1 25% 4 00% to 0 00% 0 00% 0 00% 0 W%

Class A 5 00% 100% 0 00% 0 00% Class B 0 00% 100% 1 00% 4 00% to 0.00% Class c 0 00% 100% 1 25% 1 00% to 0 00% Class E 3 00% 100% D 50% 0 OC% Class J 0 00% 0 00% 0 00% 0 00% Class X 0.00% 0 00% 0 00% o 00%

Class A Class B Class C Class 0 Class E Class J Class Q Class X

5 00% 0 00% 0 00% 2 00% 3 00% 0 00% 0.00% 0 00%

1 75% 0 00% 0 00% 1 75% 1 OC% 4 00% to 0 00%

1 75% 1 25% 1 00% to 0 00% 100% 0 OG% 0 00% 1 75% 0 50% 0 00% 0 00% 0 00% 0 00% 150% 1 25% 4 00% to 0 00% 0 00% 0 00% 0 W%

Class A Class B Class C Class 0 Class E Class 1 Class Q Class X

5.00% 0 00% 0 00% 2 00% 3 00% 0 00% 0 00% 0 00%

1 75% 1 . 7 5 % 1 Y5% 100%

1 75% 0.00% 1.00% 0 00%

0 00% 0 00% 1 00% 4 00% to 0 00% 1 25% 1 00% to 0 00% 0 00% 0 00% 0 50% 0 00% 0 00% 0 00% 1 00% 0 00% to 0 00% c 00% 0 00%

Note Subject to the approval of the board of Directors. the Management Fee for ary Fund may be increased up to 2 25% by givirlg shareholders three months' prior not,ce in accordance with

paragraph 21 of Appendix C Any increase above this level would reqdire approval of shareholders at a general meeting


Appendix F

Appendix F - MLllF available funds and share classes All Fmds and Share Classes listed below are i i existence as at the time of issue of the Prospectus This I st may be updated from time to time A copy of the apdated list may be obtained by applica:ion to the Investor Service Centre Not al' share classes are registered in all jurisdictions

Share class descriptions conta,i a numerica' code to represent its reievant d stribution method as defined in :he Prospec:us, for example.

AI = 'A' share class wbich follows Distributing (D) ca'culation method (dividend is calculated montqly based upon income accrued during the d vidend period less expenses anc distributed to SClareholders montdy based upon the number of shares held at the month end

A2 = ' A share class which is Nan-Distributing (no dividend is paid)

A3 = 'A share class which follows Distributing (M) calculation method (Dividend is calculated dai'y based upon daily-accrued income less expenses, for the number of Shares outstanding on that day. A cumulative monthly dividend is distributed to

Shareholders monthly based upon the number of Shares held and the number of days for which they were held during the period.

A4 = 'A' share class which follows Distributing (A) calculation (Dividend is calculated annually based upon income accrued during the dividend period less expenses The dividend is distribded to

Shareholders annual'y based upon the number of Shares held at the end of the annual period

A4 DS = A share class which follows Distributmg (A) calculat on and seeks UK D stributor Stat&

Asian Dragon 142 USD Asian Oxgon A2 EUR Asian DTagon A2 GBP Ash Dragon B2 USD Asian Vagon E2 EUR Asian Dragon 82 GBP Asian Dragon C2 USD Asian Dragon C2 EUR Asian Dragon C2 GBP Asian Dragon E2 USD Asian Dragon €2 EUR Asian Dragon E2 GBP Asian Dragon A4 DS GPB Asian Tiger Bond A1 USD Asizp Tiger Bond A2 US0 Asian Tiger Bond A3 USD AriaE Tiger Bond B1 USD Asian Tiger Bond B: USD Asian Tiger Bond C l USD Asian Tiger Bond C2 USD Asian Tiger Bond E2 USD

US0 USD USD tiSD USD !JSD USD US0 US0 USD US0 USD USD USD USD USD USD USD USD USD USD

Conservative Allocation (Euro) A1 EUR Conservative Albcation (Euro) A2 EUR Conservative Allocat!on (Exo) A3 EUR Conservative Allocation (Euro) 61 EUR Conservauve Alfocatlon (Euro) BZ EUR tonsemative Altocation (Euro) C1 EUR Conservative Allocation (Euro) C2 EUR Conservative Al1ocat;on (Euro) E2 EUR

EUR EUR EUR EUR EUR EUR EUR EUR

Conservative Allocation (US Dollar) A1 USD US0 Conservative Allocation (US Dollar) A2 US0 Conservative Allocation (US Dollar) A3 USE Consewative Allocation (US Dollar) E1 US0 Consewative Allocation (US Dollar) BZ USD conservative Allocation (US Dollar) Cl USC conservative Allocation (US Dollar) C2 US0 Conservative Allocation (US Dollar) E2 USD

Continental European Growth A2 EUR Continental European Growh 82 EUR Continental European Growth E2 EUR Continental European Growth C2 EUR Continental European Growth A4 DS GBP

Corporate Bond Fund (Euro) A1 EUR Corporate Bond Fund (Euro) A2 EUR Corporate Bond Fund (Euro) A3 EUR Corporate Bond Fund (Euro) 81 EUR Corporate Bond Fund (Euro) 82 EUR Corporate Bond Fund (Euro) C 1 EUR Corporate Bond Fund (Euro) C2 EUR Corporate Bond Fund (Euro) E2 EUR "(until 31 July 2006 when the fund will be renamed Euro Corporate Bond Fund"

US0 Non-Distributing EUR Non-Distributing GBP Non-Distributing USD Nan-Distributing EUR Non-Distributing GBF Non-Distributing USD Non-Distributing EUR Non-Distributing GBP Nom-Dlstriboting US0 Non-Distributing EUR hion-Distributing GBP Nun-Distributing GBD Distributing (A) USD Distributing ID) USD Non-Distributing USD Distributing (M) USD Distributing (D) USD Non-Distribrrting USD Distributing (D) US0 Non-Distributing USD Non-Disvibutirg

Emerging Europe A2 EUR Emerging Europe A2 US0 Emerging Europe BZ Ed9 Emerging Europe B2 L1SD Emerging Europe C2 EUR Emerging Europe C2 US0 Emerging Europe E2 EUR Emerging Europe E2 USD Emerging Europe X2 EUA Emerging Europe XZ USD Emerging Europe A4 DS GBP

Emerging Markets Bond At USD Emerging Markets Bond A I EUR Emerging Markets Bond A2 USD Emefging Markets Bond A2 EUR Emerging Markets Bond A3 USD Emerging Markets Bond A3 EUR Emerging Markets Bord B1 USD Emergng Markets Bond E1 EUR Emergicg Markex Bond B2 USD Emergmg Markets Bond B2 EUR

US0 us0 USD US0 US0 US0 USD

EUR EUR EUR EUR EUR

EUR EUR EUR EUR EUR EUR EUR

EUR

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

USD USD USD USD USD US0 USD USD USD USD

EUR Distributing (D) EUR Non-Distributing EUR Cistributing (M) EUR DisTributing (0) EUR Non-Distributing EUR Distributing (D) EUR Ncn-Distibuting EUR Non-Distributmg

USD Distributing (0) USD Non-Distributing USC Distributing (M) USD Dis?ributing (0) U5D Non-Distributing US0 Distributing (D) US0 Non-Distributing USD Ncn-Distributing

EUR Non-Distributing EU9 Non-Distributing EUR Non-Dist:ibuting EUR Non-Distributing GEP Dtstributing (A)

EUR Oirtributing (D) EUR Non-Distributing EUR Non-Distributing (MI EUR Distributing (0) E M Nan-Distributing EUR Distributing (0) EUR Non-Distributing

EUR Non-Distributing

EUR Non-Distributing US0 Non-Distributing EUR Nan-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributmg USD Non-Distributing GBP Distributing (A)

USD Distributing (D) EUR Distributing (0) USD Non-Distributing EUR Non-Distributing USD Non-Distributing (Mi EUR Non-Distributing (M) USD Dislributing (D) EUR Dirtributing (D) US0 Mon-Distributing EUR Non-Distributing


Appendix F

Emerging Markets Bond C1 USD Emerging Markets Bond C1 EUR Emerging Markets Bond CZ USD Emerging Markets Borld C2 EUR Emerging Markets Bond E2 US0 Emerging Markets Bond E2 EUR

Emerging Markets A2 USD Emerging Varken A2 EUR Emerging Markets B2 USD Emerging Markets 82 EUR Emerging Markets C2 tiSG

Emerging Markets C2 EUR Emerging Markets E2 U5D Ernerging Markets EL EUR

Euro Bond A1 EUR Euro Bond A1 USD Eum Bond A2 EUR Euro Bond A2 USD Euro Bond A3 EUR Euro Bond A3 USD

Euro Bond 51 EUR Euro Bond B 1 USD Euro Bond E2 EUR Euro Bond B2 USD Euro Bond C1 EUR Euro Bond C1 USD Euro Bond C2 EUR Euro Bond C2 USD Euro Bond E2 EUR Euro Bond E l USE

Euro Corporate Bond Fund A1 EUR Euro Corporate Bond Fund A2 EUR Euro Corporate Bond Fund A3 EUR Euro Corporate Bond Fund 81 EUR Euro Corporate Bond Fund BZ EUR Euro Corporate Bond Fund C 1 EUR Euro Corpoate Bond Fund C2 EUR Euro Corporate Bond Fund E2 EUR "(from 31 July 2006 wbeq the fund changes its

US0 USD USD US0 USD USD

US0 US0 USD USD iiSC USD USD USD

EUR EUR ELR EUR EUR EUR EUR EUR E 3 EUR EUR EUR EUR EUR EUR EUR

EUR EUR

EUR EL12 EUR EUR EUR

name from Corporate Bond Fund (Euro)"

Euro-Markets A4 EUR EumMarkets A2 EUR

Euro-Markets A2 USD Euro-Markeb B2 EUR Euro-Markets B2 US0 Euro-Markets C2 EU4 Euro-Markets E2 EUR Euro-Markets E2 LSD

Euro Reserve A2 EUR Euro Reserve BZ EUil Euro Reserve C2 EUR Euro Reserve E2 EUR

EUR

EUR EUR EUR EUT( EUR EUR EUR EUR

EUR EUR EUR EUR

US0 Non-Distributing EUR Distributing (D) USD Non-Dis:ribu:;ng EUR Non-Distribu!ing USD Non-Distributing EUR Lor-Distributing

USD Non-Distributing EUR Non-Dvstributing US0 Non-Dis!ribu!ing EUR Non-Distribdting USD hon-Distriouting EUR Non-Distributing USD hon-Distributing EUR Non-Distributing

EUR Distributing (D) USD Distributing (D) EUR Non.Distributing USD Non-Distributing EUR Distributing (MI

USD Distributing (U) EUR DistribGting (3) US0 Distribu!ing (D) EUR Non-Distributing USD Nos-Distributing EUR 0:stributing (D) USD Distributing !D) EUR Non-Distributing USD Non-DisYibuting EUR Non-Disirlbuting USD Non-Distributing

EUR Distributing (0 ) EUR Non-Dis?ribu:ing EUR Non-Dislributing (M) EUR Distributing (D) EUR tion-Distributing EUR Distributing (0 ) EUR Non-Distributlng

EUR Non-Distributing

EUR Distributing (A) EUR Non-Distributing USD Non-Distributing EUR Noo-Distributing USD Fionhtributing EUR Non-Distributing EUR Non-Distributlng US0 Non-Distribu:tng

EUR Non-Distributing EUR Non-Distributipg EUR Non-Distribu',ing EUR Nonhtributing

European A2 EUR European A2 USD European B2 EUR European 82 US0 European C2 EUR Europeai C2 1150 European E2 EUR European E2 USD

European Growth A2 EUR European Growth A2 USD European Growth B2 EiJR Europeaq Growtn BZ USD European Growth C2 EUR European Growth C2 US0 European Growth E2 EUR European Growth E2 USD

European Opportunities A2 EUR European Opportunities A2 LSD European Opportunities 82 EUR European Opportunities B2 USD European Opponunities C2 EUR European Opportunities C2 USD European Opportunities E2 EUR Eumpean Opportunities E2 USD

European Value A4 EUR European Value A2 EUR European Value A2 G9P European Value A2 U5D

Eumpeas Value E2 EUR European Value B2 GBP European Value 82 LiSD European Value C2 EUR EUrOpeanVallle C2 GBP European VdJe CZ USD Europearl Value E2 EUR European Value EZ GB? European Value E2 US0 European Value A4 DS GEP

Global Allocation A2 USD Global Allocation A2 EUR Global Allocation B2 USD Global Allocation B2 E V R G!obal Allocatiov CZ USD Global Allocation C2 EUR Global AllOCdtiOn E2 US0 Global Allocation E2 EUR Global Allocation Hedged A2 EUR Global Allocation Hedged A2 EUR G!obai Allocation Hedged A4 EUR Global Allocation Hedged A2 GBP Global Allocation Hedged B2 EUR Global Allocation Hedged C2 EUR G'oba. Allocation Hedged E2 EUR

EUR EUR EUR EUR EUR EUR EUR EUR

EVR EUR EUR EUR EUR EUR EUR EUR

EUR EUR EUR EUR FUR EUR EUR EUR

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUA EUR

USD USD USD USD US0 us;) USD USD USD USD USD USD USD USD USD

EUR Non-Distributing US0 Non-Distributing EUR Non-Distribbtlng USD Non-Distributing E!JR Non-Distributing US0 Non-Distributing EUR Non-Distributing US0 NowDistributing

EUR Nan-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing

EUR Non-Distributing USD Non-Distributing EUR Nan-Distributing USD Non-Drjtributlng EUR Non-Distributing US0 Non-Distributing EUR Non-Distriburing USD Non-Distributing

EUR Distributing (A) EUR Nun-Distributing GBP Non-Dktributing USD Non-Distributing EUR Non-Distributing GBP Non-Distributing USD Non-Distributing EUR Non-Distributing GEP Non-Distributing USD Non-Distributing EUR Non-Distributing GBP Non-Distribbting USD Non-Distributing GBP Distributing (A)

USD Non-Distributing EUR Non-Distributing US0 Non-Dbtributing EUR Nom-Distributing USD Non-Dtstributing EUR Non-Distributing US0 Non-Distribuung EUR Non-Distributing EUR NomDistributing EUR Non-Distributing EUR Distributing GBP Non-Distributing EUR Non-Distributing EUR Non-Distributing EU4 Non-Distributing


Appendix F

I

Global Bond Fund (Euro) A1 EUR Global Bond Fund (Egroi A2 EUR Global Bond F u ~ d (Euro) A3 EUR Global Bond Fuco (Euro) 81 ECR Global Bond Fund (Em) 82 EUR Global Bond Fund (Euro) C1 EUR Global Bond Furd (Euro) C2 EUR Global Bond Fmd (Eum) E2 FUR

Global Bond Fund (US Dollar) A1 USD Global Bond Fund (US Dollar) A2 USD Global Bond Fund (US Dollar) A3 USD Global Bord Fund (US Dollar) B1 USD Global Bopd Fund (US Dollar) B2 USD Global Bond Fund (US Dollar) C? USD Global Bond FuKd (US Dollar! C2 USD Global BoPd Fund (US Dollar) C3 USD Global Bord Fund (US Dollar) E2 USD

Global Dynamic Equity A2 USD Global Dynamic EquityA2 EUR Global Dynamic Equity 62 USD Global Dynamic Equity 82 EUR Global Dynamic Equity C2 USD Global Dynamic Equity C2 EUR Global Dynamic Equity E2 USD Global Dynamic Equity E2 EUR

Global Equity Core Fund A2 USD Global Equity Core Fund Az EUR Global Equity Core Fbnd 62 USD Global Equity Core Fund B2 EUR Global Equity Core Fund C 2 USD Global Equity Core Fmd C2 EUR Global Equity Core Fund E2 USD Global Equity Core Fund E2 EUR Global Equity Core Fund A4 DS GBP

Global Equity Diversified Fund A4 USD Global Equi?y Diversified Fund A2 USD Global Equity Diversified FundA2 EUR Global Equity Diversified Fund 82 USG Global Equity Diversified Fund 82 ECR Global Equity Diversified Fund C2 LIS3 Global Equity Diversified Fund C2 E 3 Global Equity Elversified Fund E2 MD Global Equity Dsverrified Fund E2 EJR

Global Fundamental Value A2 USD Global Fundamental Value A2 EUR Global Fundamental Value 82 USD Global Fundamental Value 82 EUR Global Fundamental Value C2 USD Global Fundamental Value C2 EUR Global Fundamental Value E2 USD Global Fundamental Value E2 EUR Global Fundamental Value X2 MD

EUR EUR EUR EUR EUR

EUR EUR EUR

USD USD USD USD USD USD USD US0 USD

USD U SD US0 u SD USD USD US0 USD

USD USD USD USD US0 USD US0 USD USD

USD US0 USD USD US0 USD USD USD USD

USD USE USD USD USD USD USD USD USD

EUR Distributing (0) EUR Non-DGr buting EUR Distributicg (M) EUR Distributing (D) EUR Non-Distributing EUR Distributing (0) EUR Non-Distributing EUR Non-Dis:ributing

USD Distributing (D) US0 Non-Distributmg US3 Distribuiing (M)

USD Distributlng (D) US9 Non-Distributing USD Distributing (D) USD Non-Distributing USD Distributing (MI ti5D Non-Distributing

USD Non-Distributing EUR Non-Distributing U5D Non-Distributing EUR tion-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing

US0 Non-Distributing EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing US0 Non-3!stributtng EUR Non-Distributing GBP Distributing (A)

USD Oistributing (A) USD Non-Datribut,ng EUR Non-Distributing USD Nan-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distribuang USD Lon-Distributing EUR Non-Distributing

USD NonDirtributing EUR Non-Distributing USD Non-Distribirting EUR Non-Distributing USD Nan-0:stributing EUR Non-Distributing US3 Nun-Distrhuting EUR Non-Dis?ributing USD Non-Distributing

Global High Yield Bond (Euro) A1 EUR Global High Yield Bond (Euro) Ai USD Global High Yiela Bond ( E m ) A2 EdR

Global High Yield Bond (Euro) A2 US0 Global High Yield Bond (Euro) A3 EUR Global High Yiela Jond (Euro)A3 USD Global High Yield Bond (Euro) B i EUR Global High Yield Bond (Euro) E 1 USD Global High Yield Bond (Em) 62 EUR Global HGh Yield Bond (Euro) 82 USD Global High Yiela Bond (Euro) C1 EUR Global High Yield Bond (Euro) C i USD Global High Yielo aond (Euroj C2 EUR Global High Yield Bond (Euro) CZ USD Global Hgh Yield Bond (Euro)C3 EUR Global High Yield Bond (Euro) E2 EUR Global High Yield Bond (Euro) E2 USD

Global Opportunities A2 USD Global OpportunitteS A2 EUR Global Opportunities B2 US0 Global Opportunities 82 EUR Global Opportunities C2 USD Global Opportunities C2 EUR Global Opportunities E2 USD Global Opportunities E2 EUR

Global SmallCap A2 USD Global Smallcap A2 EUR Global SmailCap E2 USD Global SmallCap E2 EUR Global Smallcap C2 USD GloDai Smallcap C2 EUR Global SmallCap E2 USD Global SmallCap E2 EUR

Japan A2 USD Japan A2 EUR Japan B2 GSD Japan 82 EUR Japan C2 USD Japan C 2 EUR Japan E2 US0 Japan E2 EUR

Japan Opportunities A2 USD Japan Opportunities A2 EUR Japan OppoRunities 82 USD Japan Opportunities 32 Eli2 Japan Opportunities C2 USD Japan Opportunities C2 EUR Japan Opportunities E2 USD Japan Opportunities E2 EUR Japan Opportunities X2 USD Japan CpportunitiesA4 DS GBP

Japan Value A2 USD Japan Value A2 EUR

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

USD USD USD USD USD USD USD USD

USD USD USD US0 U5D US0 US0 US0

Yen Yen Yen Yen Yen Yen Yen Yen

Yen Yen Yen Yen Yen Yen Yen Yen Yen Yen

Yen Yen

EUR Distributing (D) US0 Distributing (0) EUR Non-Distributtng US0 Non-Distibuting EUR Distributing (MI US0 Distributing (M) EUR Distributing (D) US0 Distributing (0) EUR Non-Distributing USD Non-Distributing EUR Distributing (0) US0 Distributing (0) EUR NomDistributing US0 Non-Distributing EUR Distributing (M) EUR Non-Distrrbuting USD Non-Distrrbutmg

USD Non-Distributing EJR Non-Distributing US0 Non-Distributing ELIR Non-Distributing USD Non-Distributing EUR Non-Distributing US0 Non-Distrrbuting EUR Non-Distributing

USD Non-Distributing EUR Nan-Distributing USD No&Distributing EU3 Non-Distributing USD Non-Distributing EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing

USD Non-Distributing EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Nan-Distributing US0 Non-Distributing EUR Non-Distributing

USD Non-Distributing EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing USD Non-Distributing EJR Non-Distributing US0 Non-Distributing EUR Non-Distributing US0 Non-Distributmg GBP Distributing (A)

US0 Non-Distributing EUR Non-Distributing


Appendix F

Japan Value BZ US0 Japan Value 82 ELR Japan Value C2 USD Japan Value C2 EUR Japan Value E2 USD Japan Value E2 EUR Japan Value A4 DS GBP

Latin American A2 USD Latin American A2 GBP Latin American A2 EUR Latin American E2 US0 Latin American B2 GBP Latin American B2 EUR Latin American CZ USD Latin American C2 GSP Latin American C2 EUR Latin American E2 USD Latin American E2 GBP Cziin American E2 EUR Latin American A4 OS G9P

New Energy A2 USD New Ecergy A2 EUR New Energy E2 USD New Energy BZ ELiR New Energy C2 USD New Energy C2 EUR New Energy E2 USD New Energy E2 EUR New Energy A4 DS GBP

Pacific Equity A2 USD Pacific Equity A2 GBP Pac:fic Equity A2 EUR Pacif:c Equity 82 US0 Pacific Equity B2 GBP Pacific Equity 82 EUR Pacific Equity C2 USD Pacific Equity C2 CBP Pacific Equity C Z EJR Pacific Equity E2 UjD Pacific Equity E2 GBP Pacific E w t y E2 EUR

Short Duration Bond A1 EUR Short Duration Bond A2 EUR Snort Duration Bond A3 EUR Short Duration Bond B1 EUR Short Duration Bond 82 EUR Short Duration Bond C1 EUR Short Duration Bond C2 EUR Short Duration Bond E2 EUR

Sterling Reserve A2 GBP Sterling Reserve 82 GBP Sterling Reserve C2 GBP Sterling Reseive E2 GBP Sterling Reserve A3 DS GBP

Yen

Yen Yt n Yen Yen Yen Yen

USD USD VSD liSD USD b5D USD USD USD USE US0 U SD lis0

USD USD USD USD US0 US0 us0 USD USD

USD USD US0 UjD US0 USD USD USD US0 USD LIS0 ilSD

EUR EU? EL9 EUR EUR EUR EUR EUR

GBP GBP GBP GBP GBP

USD Non-Distributing EUR Non-Disiributing USD Non-Distr:buting EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing GBP Distributing (A)

USD Nan-Distributing GBP Non-Ds'ributing EVR Non-Dis%bu:ing USD Non-Disvibdting GBP Non-Distributivg EUR Non-Distributing USD Non-Distributing GBP kon-Distributing EUR NmDistributing USD Non-Distributing GBP Non-Dstributing EUR Non-Distrjbwng GBP Distributing (A)

USD Non-Distributing

USD kon-Distributing EUR NovDistributing USD Non-Distributing EUR Non-Distriou!ing USD Nonhtributing EUR Non-Distributing GBP Dmbuting (AI

EUR NW-DiSWbUting

USD Nan-Distributing GBP Non-Datributing EUR Non-Dtstributing USD Non-Distrnbuting GBP Non-Distributing EUR NowDistributing US0 Non-Distributing GBP Non-Distributing EUR Non-Disuibuting USD Non-Distr,butng GB' Non-3istribui:rg EUR Non-Distributing

EUR Distributing (0) EUR Non-Distributing EUR Distributing (MI EUR Distributivg (0) EUR Non.Distr:but:ng EUR Distributing (0) EUR Non-Distributing EUR Non-Distributing

GBP Non-Distributing GBP Non-Distributing GBP Non-Distributing GBP lion-Distributing GBP Distributing (M)

Strategic Allocation (Euro) A2 EUR Strategic Allota:ion (Euro) B2 EUR Strategic Allocation (Euro) C2 EUR Strategic Allocation (Euro) E2 EUR

Strategic Allocation (US Dollar) A2 USD Strategic Allocation (US Dollar) BZ USD Strategic Allocation (US Dollar) C2 USD Strategic Allocation (US Dollar) E2 USD

United Kingdom A2 GEP United Kingdom A2 E29

Un.ted Kirgoom A2 USD United Kirgoom BZ GBP United Kingoom 82 EUR United Kingdom E2 US0 United Kingdom C2 GBP United Kingdom C2 EUR United Kingdom C2 US3 United Kingdom E2 GB? United Kirgdom E2 EUR United Kirgdom E2 USD United Kingdom A4 OS GBP

US Basic Value A4 USD US Basic Value A4 EdR US Basic Value AZ USD US Basic Value A2 GBP US Basic Value A2 EUR

US Basic Value BZ USD US BasicValue BZ GBP US Basic Value E2 E i l R US Basic Value C2 USD US Basic Value C2 GBP US Basic Value C2 €US US Basic Value E2 USD US Basic Valde E2 GBP US Basic Value E2 EUR US BasicValue X2 US0 US Basic Value A4 OS GBP US Basic Value Hedged A2 EUR US Basic Velue Hedged B2 EUR US Basic Value Hedged C2 EUR US Basic Value Hedged E2 EUR

US Dollar Core Bond A1 USD US Dollar Core Bond A2 USD US Dollar Core Bond A2 EUR US Dollar Core Bond A3 USD US Dollar Core Bond E1 USD US Dollar Core Bond 02 USD US Dollar Core Bond Cl USD US Dollar Core Bond CZ USD US Dollar Core Bond C3 USD US Dc:lar Core Bond E2 USD US Dollar Co'e Bond X2 USD

US Dollar High Yield Bond A1 USD US Dollar HigCl Yield Bond A2 USD

EU R EUR EUR E UR

USD USD US0 USD

GBP GBP GBP GBP GBP GBP GBP GBP GEP GEP GBP GBP GBP

USD USD USD USD USD USD USD USD USD US0 USD USD USD USD us3 USD USD USD USD USD

US0 USD US0 USD U SD USD USD US0 USD USD USD

USD USD

EUR Non-Distributing EUR Non-Distributing EUF Non-Distribu!ing EUR Non-Distributing

USD Non-Distributing US0 Non-Distributing US0 Non-Distributing USD Non-Distributing

GBP Non-Distributing EUR Non-Distributing US0 Non-Datributing GBP Non-Distributing EUR Non-Distributing US0 Non-Distribbting GBP Non-Dlstributing EUR Non-Dktributing USD Non-Dmibuting GBP Non-Distributing EUR Non-Distributiig US0 Non-Distributing GBP Distributing (A)

USD Distributing (A) EUR Distributing (A) USD Non-Distributing GBP Non-Distributing EUR Non-Distributing US0 Non-Distributing GBP Non-Distributing EUR Non-Distributing USD Non-Distributing GBP Non-Dirtributing EUR Non-Distributing USD Non-Distributing GBP Non-Distributing EUR Non-Distributing USD Non-Dist:ibl;ting GBP Distributing (A) EUR Non-Distributing EUR Non-Distributing EUR Non-Distributing EUR Non-Distributing

USD Distributing (0) USD Non-Distribbting EUR Non-Distributing USD Distributing (M) USD Distributing (D) US0 Non.Distributing USD Distrtbuting (D) USD Non-Dlstributing USD Distributing (M) USD Non-Distributing USD Non-Distributing

USD Distributing (D) USD Non-Distributing


Appendix F

US Dollar High Yield aond A3 USD US Doilar eigh Yield Bosd B t USD US Dollar hgh Yield acnd B2 USD US Dollar High Yield Bond :1 USD

US Dollar High Yield Bonu C2 USD US Dol!ar High Yield Eond C3 USD US Doliar High Yield Bond E2 USD

US Dollar Reserve A2 USD US Dol'ar Reserve 32 USD US D o h Reserve C2 USD US Dol!ar Reserve E2 USD

US Flexible Equity A2 USD l i s Flexible Equity A2 EUR US Flexible Equity 82 USD US Flexible Equity E2 EUR US Flexible Equ:ty C2 US0 t i5 Flexible Equity C2 EUR US Flexible Equity E2 USD US Flexible Equity E l EUR US Flexible EqcQ A4 OS GBP 1;s Flexible Equity Hedged A2 EUR US Flexible Equity Hedged C2 EUR US Flexible Equity Hedged E2 EUR

US Focused Value A2 US0 US Focused Vahe A2 EUR US Focused Value 82 USD US Focused Value 92 €US US Focused Vaiue C2 USD US Focused Value C2 EUR US Focused Value E2 USD US Focused Value E2 EUR US Focused Value A4 DS GBP US Focused Value Hedged A2 EUR IJS Focused Value Hedged B2 EUR US Focused Value Hedged C2 EUR US Focured Value Hedged E2 E i R

US Govt Mortgage At US0 US Govt Mortgage A2 USE US Govt Mortgage A3 USD US Govt Mortgage 31 LSD US Govt Mortgage B2 LSD US Govt Mortgage C1 USD US Govt Mortgage C2 USD US Govt Mortgage C3 USD US Govt Mortgage E2 USD US Govt Mortgage X2 US0

US Growth A2 USD US Grow!h A2 EUR US Growth E2 USD US Growth B2 EUR US Growth C 2 US0 US Growth E2 EUR US Growh E2 USD

USD USD U SO USD USD USD LiSD

US0 USD US0 tiSD

USD US0 USD USD US0 USD US0 USD US0 USD USD USD

USD USD USD USD US0 USD US0 USD US0 USD USD USD USD

USD USD USD USD USD USD USD USD USD E D

USD USD USD USD USD USD USD

USD USD USD USD USD USD USD

USD USD USD USD

USD EUR USD EUR US0 EUR US0 EUR GEP EUR EUR EUR

US0 EUR US0 EUR USD EUR USD EUR GBP EUR EUR EUR EUR

USD USD US9 USD us0 bS3 USD USD USD USD

USD EUR USD EUR USD EUR USD

Distributing (M) Distributing (3) Non-D:stribu;,ng Distributing (W Non-Distributing Distributing (M) Non-Distributing

Non-Distributing Non-Distributing Non-0.stributing Non-0:rtribut-ng

Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing ivon-Distributing Non-Distributing Non-Distributing Dsstributing (A) Non-Distributing Non-Distr!buting hior-Distr.buting

Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distribu:ir;g Distributing (A) Non-Distributing Non-DistribuMg Nan-Distribu?ing Non-Distributing

Distributing (0) Mor;-Distributing Distributing (M) Distributing (D)

Non-Dis:ributing Distributicg (D) Non-Distributing Distribu:ing (M) Non-Distributing Non-Distributing

Non-Distributing Non-Distributing Non-Distributing Nor-Distributing Non-Distributing Non-Distributing Non-Distributing

US Growth E2 EUR US Growth X2 USD

US Opportunities A2 USD US Opportunities 82 USD US Opponunities C2 USD US Opportunities E2 USD US Opportunities A2 EUR

US Opponunities 92 EUR US Opportunities C2 EUR US Opportunities E2 EUR

US Small Cap Value A2 USD US Small Cap Value A2 EUR US Small Cap Value 82 USD US Small Cap Value E2 EUR US Small Cap Value C2 USD US Small Cap Value C2 EUR US Small Cap Value E2 US0 US Small Cap Value E2 EUR

USD Low Duration Bond A1 USD USD tow Duration Bond A1 EUR USD tow Duration Bond A2 USD USD Low Duration Bond A2 EUR USD Low Dufation Bond A3 USD US0 tow Duration Bond A3 EUR USD low Duration Bond 81 US0 USD Low Duration Bond 81 EUR USD Low Duration Eond E2 USD USD low Duration Bond 82 fUR USD low Duration Bond C1 US0 USD Low Ocration Bond C1 EUR USG tow Ourabon flond E2 USD USE tow Duraton Bond C2 EUR USD tow Duration Bond E2 USD USD Low Duration Bond E2 EUR

World Bond Fund A1 USD World Bond Fund A2 USD World Bond Fund A3 USD World Bond Fund 81 US0 World Bond Fund C1 USD World Bond Fund E2 USD

World Energy A2 USD World Energy A2 EUR World Energy B2 USD Worid Energy 82 EUR World Energy C2 USD World Energy C2 EUR World Energy E2 iiSD World Energy E2 :UR World EnergyX2 USD World Energy X2 EUR World Energy A4 DS GBP

us3 USD

USD us0 us0 US0 USD US3 USD USD

USD us3 us0 US0 USD US0 USD USD

USD USD USD US0 USD USD USD USD USD USD USD USD USD USD USD USD

USD U5O us0 USD us3 us3

USD USD USD USD 050 USD USD USD USD USD USD

EJil US0

USD USD USD USD EUil ELiR EUR EUR

USD EUR USD EU9 USD EUR USD EUR

USD E l i R USD EUR USD EUR USD EUR USD EUR USD EUR US0 EUR us0 EUR

USD us0 USD USD US0 USD

USD EUR USD EUR USD EUR USD EUR US0 EUR GEP

Non-Distributing Norl-Distributing

Non-Distributing Non-Distributing Non-Distributing Non-Distnbuting Non-Distributing Non-Distributing Non-Distributing Non-Distributing

Non-Distributing Non-Distfibuting Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Nun-Distributing

Distributing (D) Distribdting (0) Non-Distributmg Non-Distributing Distributing (M)

Distributing (M) Distribdting (0) Distributing (0) Non-Distributing Non-Distributing Distributing (0) Distributing (0) Non-Distributing Non-Distributing Non-Distributing Non-Distributing

Distributing (D) Non-Distributing Non-Dirtributtng Distributing (0) Disiributing (0) Non-Distributing

Non-Distributing Non-Distributing Non-Dist:ibuting Non-Distributing Non-Distributing Non.Distributing Non-Distributing Non.Distributing Non-Distributing Non-Distributing Distributing (A)

68 Fserrill Lynch International Inves?rrent Funds

Appendix F

World Finantials A2 USD World F:nancials A2 EUR World Financials 82 USD World Financ als 52 EUR World Financials C2 USD World Financials C2 EUR World Financials E2 US0 World Financ,als E2 EUR

World Gold A2 USD World Gold AZ EUR World Gold B2 USD World Gold B2 EUR World Gold C2 USD World Gold C2 EU7 World Gold E2 USD World Gold E2 EUR World Gold X2 EUR

World Healthscience A2 USD World Healthscience A2 EUR World Healthscience 62 USD World Healthscience B2 EUR World Healthscience CZ USD World Healthscience C2 EUR Wor'.d Healthscience E2 USD World Healthscience E2 EUR

World Income A1 USD Worid income A1 EUR World Income A2 USD World Income A2 EUR World Income A3 US0 World income A3 EUR World lncome B1 USD World Income 61 EUR Worldlncome 02 LSD World Income 02 EUR World Income C 1 USD World Income C1 EUR World Income C2 US0 World Income C2 EUR World Income E2 USD World Income E2 EUR World Income 13 USD

World Mining A2 USD World Mining A2 EUR World Mining 62 UjD World Mining 82 EUR World Mimng C2 US0 World Mining C2 EUR World Mining E USD World Micing E EUR World Mining X US0 World Mining A4 05 GBP

USD USD VSD US0 USD USD USD USD

USD USD USD USD US0 US0 USD USD US0

USD USD US0 USD USD USD US0 US0

us0 US0 USD USD USD US0 USD VSD US0 USD USD USD USD US0 USD USD US0

USD US0 US0 US0 USD USD us0 USD US0 USD

USD Nan-Distributing EUR Non-Distributing USD Non-Distributing EUR Nor: Distcbuting USD Non-Distribdting EUR Non-Distributirg USD Non-Dztributing EUR Non-Dis:ributing

USD Non-Distributing EUR Non-Distributing USD Non-Distributing EUR Non-Distributing USD Non-Distrib~iing EUR Non-Distribukng US0 Non-Datributing EUR Non-Distributing EUR Non-Distrlbuting

Warld Technology A2 USD World Technology A2 EUR World Technology A2 GBP World Technology B2 USD World Techrology B2 GBP World Technology B2 EUR World Technology C2 US0 WorldTechnology C2 GBP WorldTechnology C2 EUR World Techrology E2 USD World Technology E2 GBP WorldTechnology E2 EUR

US0 USD USD U SD USD USD USD USD US0 USD USD USD

USD EUR GBP USD GBP EUR USD C0P

EUR USD GBP EUR

Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distribcting Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing Non-Distributing

USD Non-Distributing EUR Non-Dismbuting USD Non-Dismbuting EUR Fion-Distributing USD Non-Distributing

USD Non-Distributing EUR Non-Distributing

EUR Non-Dis3ibuting

US0 Distributing (0) EUR Distributing (0) US0 Non-Distributing EUR Non-Distributing USD Distributing (M) EUR Dinributing (M) US0 Distributing (0) EUR Distribcting (D) USD Non-Distributing EUR Non-Distributing USD Distributing (Dl EUR Distributing (D) US0 Non-Distributing EUR Non-Distributng USD Non-Distributing EUR Non-Distributing US3 Distributing (MI

USD Non-Distributing EUR Non-Distributing US0 Non-Distributing EUR Non-Distributing USD Non-Dimbuting EUR Non-Distriburing US0 Non-D!stributing EUR Non-Distributing USD Non-Distr1bu:ing GR? Distributing (A)


Summary of Subscription Procedure and Payment Instructions 1.

2 .

3.

4.

5.

6.

Application Form For initial sLbscriptions for Shares you must complete t'le application form wkch may be obtained from the Transfer Agent or the Itwestor Service Certre ard t i e form must be signed by all joint appkants. Subseqdent subscriptions may be made in writirg or by fax or telephoie, stating your registratior details and the amount to be irvested If yobr appiicatlor is being subnitted by your professional adviser, section 5 of the applica:ion form should be ccmpleted. Completed application forms must be sei; to tCle Transfer Agent or t i e Investor Service Centre.

Money Laundering Prevention Please read the notes 01: the appiicatior form regarding the identificat o i documents requ red and ensure that yob provide tnese to the Transfer Agenr or :he Investor Service Ceitre togethev w,th your applicatior form

Payment Yodr cheque or a copy of your telegraphic transfey iistrurtions should be supplied wit+ your appkation (see sections 4 to 6 below).

Payment by Telegraphic Transfer Payment by SWIFT/bank transfer in the relevant currency should be made to one of the accours opposite The SWIFThank transfer irstwrtion should contain :he follow ng information

(I) BankName (11) SWIFT Code or Bank Ideptifier (111) Account (iv) Account NLmber (v) Account Reference - "MLIIF - Fbnd name subscribed into" (v) By order of [Shareholder namelagent name & Siareholder

numberlagent nunberl

Payment by Cheque As payment by cheque may delay dealirg until cleared funds have been received, payment by telegraphic transfer is strongly recommended. Your cheque, made payabie to "Merrill Lyqch 1nvestmer.t Managers (Channel Islands) Limited" and drawn on a bank accoJi: in the comtry or countries of the relevant currency should accompaiy your application.

Foreign Exchange If you wish to make payment in a currency other thai that in the Dealing CLrrency (or ore of the Dealing Currencies) of your chosen Fund (see page 2 of th:s ProspectJs), tbis must be made clear a: tne tm of application

IF Morgan Chase New York SWIFT eode cHAsus33 For the account 6f Merrill Ly%h &ves$ment Managers (Channel Islands) Limited Accouht Number 001-1-460185, CHIPS UID 35999 ' ABA Number 02 100002 1 Quoting Reference "Name of Fund -,Name of Applichnt"

@ I 4

& JP Morgan Frankfurt SWIFT code CHASDEFX, BLZ 501 108 00 For the account of: Merrill Lynch lnvestm

I > I

(formerly 1 1 1 18940)

Pay UBSZurich A$?$$, i SWIFT code UBSW H 80A ?'' f Account JP M$an London Account numbei 023000000441290500008 5 ~

For the accodt of Merrilt h c h Investment Managed & (Channel Islanhs) Ltd '* 4- f# Account Number {IBAN) GB56CHAS609242 17'354770

2- (formerly 17354770) Ref. 'Name of Fun&&rne of Applicant"

umber 40386589 '"A

For the accountof Merrill Lynch In&trnent Managers (Channel Islands) Ltd 8 '!>

4

Account Number (IBAN) G880CHAS609!4222813401 ~

Pay JP Morgan Hong ?% SWIFT code CHASHK

. Account number 6743197685

(formerly 2446631 9) Ref. "Name of Fund -

JP Morgan Tokyo FT code CHASJPJT ount JP Morgan Lo

For the account of Mer (Channel Islands) Ltd Account Number (IBAN) GB69CHA 6092422281 3405 (formerly 22813405) Ref:<Namexof Fund - Name of Applic$t"

c 2 "F >.

8 1

7G Nerrill Lynch International Investment Funds

PRISMA OW1010 MLllF PROS ENG 0306

Merrill Lynch International Investment Funds

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