<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-K

               (x) Annual Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
                                (Fee Required)

                 For the fiscal year ended:  December 31, 1995
                                      or
                 ( ) Transition Report Pursuant to Section 13
                or 15(d) of the Securities Exchange Act of 1934
                               (No Fee Required)

                       Commission file number:  0-15298

                THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
                ----------------------------------------------
            (Exact name of registrant as specified in its charter)

          Delaware                                               13-3365950
-------------------------------                              -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  c/o  Merrill Lynch Investment Partners Inc.
                (formerly ML Futures Investment Partners Inc.)
                       Merrill Lynch World Headquarters
                            World Financial Center
                South Tower, 6th Fl., New York, NY  10080-6106
                   (Address of principal executive offices)

      Registrant's telephone number, including area code:  (212) 236-4161

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
                                                            -------------------
                                                                   Units
                                                                   -----
                                                             (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.                             Yes  X     No
                                                                   ---      ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.                                                                 [X]

Aggregate market value of the voting stock held by non-affiliates:  the
registrant is a limited partnership and, accordingly, has no voting stock held
by non-affiliates or otherwise.

                      Documents Incorporated By Reference

The registrant's "1995 Annual Report and Independent Auditors' Report," the
annual report to security holders for the fiscal year ended December 31, 1995.
<PAGE>
 
                THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
                      Annual Report for 1995 on Form 10-K

                               Table of Contents
                               -----------------

 
                                    PART I
                                    ------
                                                               PAGE
                                                               ----

Item 1.     Business                                             1
 
Item 2.     Properties                                           2
 
Item 3.     Legal Proceedings                                    3
 
Item 4.     Submission of Matters to a Vote of Security Holders  3
 
                                    PART II
                                    -------

Item 5.     Market for Registrant's Common
            Equity and Related Stockholder Matters               3
 
Item 6.     Selected Financial Data                              3
 
Item 7.     Management's Discussion and Analysis
            of Financial Condition and Results of Operations     3
 
Item 8.     Financial Statements and Supplementary Data          5
 
Item 9.     Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure                  5
 
                                   PART III
                                   --------

Item 10.    Directors and Executive Officers of the Registrant   5
 
Item 11.    Executive Compensation                               6
 
Item 12.    Security Ownership of Certain Beneficial Owners
            and Management                                       6
 
Item 13.    Certain Relationships and Related Transactions       6
 
                                    PART IV
                                    -------

Item 14.    Exhibits, Financial Statement
            Schedules and Reports on Form 8-K                    7
<PAGE>
 
                                 PART I
                                 ------

Item 1:  Business
         --------

       (a) General Development of Business:
           ------------------------------- 

          The Futures Expansion Fund Limited Partnership (the "Partnership" or
the "Fund") was organized under the Delaware Revised Uniform Limited Partnership
Act on August 13, 1986.  Its sole public offering of units of limited
partnership interest ("Units") commenced on October 27, 1986, and the
Partnership began commodity futures, forwards and options trading on January 2,
1987 through a Joint Venture (the "Joint Venture") with and under the direction
of Millburn Ridgefield Corporation ("Millburn Ridgefield" or the "Trading
Advisor").  Millburn Ridgefield is a Delaware corporation registered with the
Commodity Futures Trading Commission ("CFTC") as a commodity trading advisor,
commodity pool operator and futures commission merchant.  The Partnership,
through the Joint Venture, engages in the speculative trading of commodity
futures, forward and options contracts on currencies, financial instruments,
stock indices, metals, and energy and agricultural products.

          Merrill Lynch Investment Partners Inc. (formerly ML Futures Investment
Partners Inc.) (the "General Partner" or "MLIP") acts as the general partner of
the Partnership, and Merrill Lynch Futures Inc. (the "Commodity Broker" or
"MLF") is the Joint Venture's commodity broker.  The Commodity Broker is an
indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. The General
Partner is currently a wholly-owned subsidiary of Merrill Lynch Group Inc.,
which in turn is a wholly-owned subsidiary of Merrill Lynch & Co., Inc.

       The General Partner maintains a minimum account balance equal to at least
1% of the total capital of the Fund, and must do so as long as it remains
General Partner of the Partnership.

       (b) Financial Information about Industry Segments:
           --------------------------------------------- 
          The Joint Venture's business constitutes only one segment for
financial reporting purposes, i.e., a speculative "commodity pool."

       (c) Narrative Description of Business:
           --------------------------------- 

          The Joint Venture Agreement between the Partnership and the Trading
Advisor may be terminated by the General Partner, acting on behalf of the
Partnership, under certain circumstances involving, for example, substantial
losses or changes in control of the Trading Advisor.  The termination of the
Joint Venture Agreement would not necessarily terminate the Partnership, but
would require the General Partner to make other advisory arrangements for the
Joint Venture.  The Joint Venture Agreement has been continually renewed since
the inception of trading and currently terminates on December 31, 1996 unless
further renewed.  Millburn Ridgefield has been the sole Trading Advisor of the
Fund since inception.

          The Joint Venture is a speculative commodity pool and, as such, the
success of its operations depends entirely upon the profitability of its trading
as directed by the Trading Advisor (or such other advisor as may be selected for
the Partnership in the future) in charge of managing the Partnership's assets
from time to time.  Since the Joint Venture's inception, the Trading Advisor has
served in this capacity.

          The objective of Millburn Ridgefield's trading method is to
participate in all major sustained price moves in the markets traded.  Millburn
Ridgefield will make trading decisions pursuant to its trading method which
includes technical trend analysis (and certain non-trend-following technical
systems) and money management principles which may be revised from time to time.
Given trends in price of sufficient duration and magnitude, these trading
systems may be profitable even though more than half of all individual trades
are unprofitable.  A period of time without such trends, however, may result in
substantial losses.  Millburn Ridgefield has a substantial ongoing research
effort to improve its currency and futures trading method and to apply its
quantitative analysis expertise to new financial products.

          Trading is limited to markets which Millburn Ridgefield believes are
sufficiently liquid in respect of the amount of trading contemplated.

          In addition to the volatility overall, Millburn Ridgefield's risk
management focuses on money management principles applicable to the portfolio as
a whole rather than to individual markets.  The first principle is portfolio
diversification which further improves the quality of profits by reducing
volatility.  In any currency and futures portfolio, Millburn Ridgefield will
select markets and assign them relevant weightings to achieve broad
diversification.  Factors considered include profitability, liquidity, market
depth, correlation of losing periods and Millburn Ridgefield's trading
experience.  Millburn Ridgefield seeks a portfolio where returns from trading
are not highly correlated; returns are not all positive or negative at the same
time.

          Additional money management principles, applicable to the portfolio as
a whole include: limiting the assets committed as margin, generally within a
range of 15% to 30% of an account's net assets at exchange minimum margins,
(including imputed margins on forward positions) although the amount committed
to margin at any time may be substantially higher; prohibiting pyramiding (that
is, using unrealized profits in a particular market as margin for additional
positions in the same market) and changing the equity utilized for trading by an
account solely on a controlled 

                                       1
<PAGE>
 
periodic basis rather than as an automatic consequence of an increase in equity
resulting from trading profits.

          Another important risk management function is the careful control of
leverage or portfolio size.  Appropriate leverage levels are determined by
simulating the entire portfolio - all markets, all systems, all risk control
overlays, the exact weightings of the markets in the portfolio and the proposed
level of leverage - over the past five or ten years to determine the worst case
experienced by the portfolio in the simulation period.

          The money management principles, computer assisted research into
historical trading data, and experience of the principals of Millburn Ridgefield
are factors upon which decisions concerning the percentage of assets to be used
for each market traded and the size of positions taken or maintained are based.
From time to time decisions to increase or decrease the size of a position, long
or short, may be made.  Such decisions also require the exercise of judgment and
may include consideration of the volatility of the particular market; the
pattern of price movement, both inter-day and intra-day; open interest; volume
of trading; changes in spread relationships between various forward contracts;
and overall portfolio balance and risk exposure.

          The Trading Manager also engages in trading on commodity exchanges
outside the United States on behalf of the Joint Venture.  Trading on such
exchanges is not regulated by any United States government agency and may
involve certain risks not applicable to trading on United States exchanges.
Furthermore, as the Joint Venture determines its Net Asset Value in United
States dollars, with respect to trading on foreign markets the Joint Venture is
subject to the risk of fluctuations in the exchange rate between the local
currency and dollars and to the possibility of exchange controls.

          The Joint Venture trades forward contracts through a Foreign Exchange
Desk (the "F/X Desk") that contacts at least two counterparties along with
Merrill Lynch International Bank ("MLIB") for all of the Joint Ventures currency
trades. The F/X Desk contacts at least two counterparties in addition to MLIB
for a price quote on each trade.  All counterparties other than MLIB are
unaffiliated with any Merrill Lynch entity.  The F/X Desk charges a service fee
(at current exchange rates) equal to approximately $5.00 to $12.50 on each
purchase or sale of a futures-contract equivalent face amount of a foreign
currency on each transaction.   No service fee is charged on trades awarded to
MLIB (on which MLIB receives a "bid-ask" spread).  MLIB is awarded trades only
if its price is (without the service fee) equal to or better than the best price
(including the service charge) offered by any of the other counterparties
contacted.

          The F/X Desk trades using credit lines provided by a Merrill Lynch
entity.  The Joint Venture is not required to margin or otherwise guarantee its
F/X Desk trading.

          Certain of the Joint Venture's currency trades are executed in the
form of "exchange of futures for physical" ("EFP") transactions involving MLIB
and MLF.  In these transactions, a spot or forward (collectively referred to as
"cash") currency position is acquired and exchanged for an equivalent futures
position on the Chicago Mercantile Exchange's International Monetary Market
("IMM"). In its EFP trading with Merrill Lynch, the Joint Venture acquires cash
currency positions through the F/X Desk in the same manner and on the same terms
as in the case of the Joint Venture's other F/X Desk trading.  When the Joint
Venture exchanges these positions for futures, there is a "differential" between
the prices of these two positions.  This "differential" reflects, in part, the
different settlement dates of the cash and the futures contracts as well as
prevailing interest rates, but also includes a pricing spread in favor of MLIB
or another Merrill Lynch entity.  The General Partner estimates the Joint
Venture's service fee and EFP differential costs to total no more than 0.25 of
1% of the Joint Venture's average month-end Net Assets on an annual basis.

          The Fund, to the extent that it has executed currency EFP transactions
in the past, has both acquired its cash positions and effected the exchange of
positions for futures contracts through brokers other than MLF (to which the
futures positions were ultimately given up to be cleared).

          A substantial portion of the Partnership's assets are maintained as
cash in trading accounts with the Commodity Broker. The Commodity Broker credits
the Partnership's accounts with interest on its assets (not all of which are
available for investment) at a rate of 0.5% per annum below the 91-day Treasury
bill rate. Certain of the Partnership's assets are invested in short-term
sovereign debt obligations of foreign countries and used to margin futures
positions on such countries exchanges.

          Each Limited Partner may redeem any or all of their Units at month-end
upon notifying the General Partner ten days prior to such month-end. Each Unit
redeemed is paid the current month-end Net Asset Value as calculated by the
General Partner.

          The General Partner, the Trading Advisor and Commodity Broker are each
subject to regulation by the Commodity Futures Trading Commission and National
Futures Association. Other than in respect of its periodic reporting
requirements, the Partnership is generally not subject to regulation by the
Securities and Exchange Commission.

          (i) through (xii) -- not applicable.

          (xiii) The Joint Venture has no employees.

                                       2
<PAGE>
 
         (d)  Financial Information about Foreign and Domestic Operations Export
              ------------------------------------------------------------------
              Sales:
              -----
              The Partnership does not engage in material operations in foreign
countries (although it does trade on certain foreign exchanges), nor is a
material portion of the Partnership's revenues derived from customers in foreign
countries.

Item 2:  Properties
         ----------

         The Partnership does not use any physical properties in the conduct of
its business.

         The Partnership's principal place of business is the principal place of
business of the General Partner (see Item 10 herein), and the principal place of
business of the Joint Venture, through which the Partnership trades, is in
Ridgefield, Connecticut. The General Partner performs all administrative
services for the Partnership from its offices.

Item 3:  Legal Proceedings
         -----------------

         There are no pending legal proceedings to which the Partnership or the
Joint Venture is a party.

Item 4:  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

         The Partnership has never submitted any matters to a vote of its
Limited Partners.

                                    PART II
                                    -------

Item 5:  Market for Registrant's Common Equity and Related Stockholder Matters
         ---------------------------------------------------------------------

         (a)  Market Information:
              ------------------ 
              There is no established public trading market for the Units, nor
will one develop. Rather, Limited Partners may redeem Units as of the end of
each month at Net Asset Value.

         (b)  Holders:
              ------- 
         As of December 31, 1995, there were 464 holders of Units, including the
General Partner.

         (c)  Dividends:
              --------- 
         The Partnership has made no distributions since trading commenced, nor
does the General Partner presently intend to make any such distributions in the
future.

Item 6:  Selected Financial Data
         -----------------------

         The following is a summary of selected consolidated financial data of
the Partnership:

<TABLE>
<CAPTION>
 
                             Year Ended     Year Ended    Year Ended     Year Ended    Year Ended 
                             December 31,  December 31,  December 31,   December 31,  December 31,
                                 1995          1994          1993           1992          1991    
                             ------------  ------------  ------------   ------------  ------------  
<S>                         <C>           <C>            <C>           <C>            <C>
Revenues:
  Realized gain (loss)       $ 2,689,922    $2,206,016     $  369,871   $ 3,222,430   $  (602,041)
  Change in unrealized
    gain (loss)                  405,757      (891,323)     1,010,906    (1,250,488)    1,042,707
  Interest income                468,023       290,482        216,417       266,889       516,060
                             ------------  ------------  ------------   ------------  ------------  
       Total revenue           3,563,702     1,605,175      1,597,194     2,238,831       956,726
 
Expenses:
   Brokerage commissions       1,208,671     1,056,436      1,196,550     1,239,484     1,383,678
   Profit shares                 471,976       119,420         83,410       187,260           -0-
                             ------------  ------------  ------------   ------------  ------------  
       Total Expenses          1,680,647     1,175,856      1,279,960     1,426,744     1,383,678
                             ------------  ------------  ------------   ------------  ------------  
Net income (loss)            $ 1,883,055    $  429,319     $  317,234   $   812,087   $  (426,952)
                             ============  ============  ============   ============  ============  
Total assets                 $10,477,200    $9,155,701     $9,936,486   $10,627,856   $11,496,970
Total partners' capital      $ 9,891,103    $8,863,340     $9,610,371   $10,291,312   $11,233,427
Net Asset Value per Unit         $238.96       $195.94        $185.64       $179.60       $164.41
</TABLE>

Item 7:    Management's Discussion and Analysis of Financial Condition and
           ---------------------------------------------------------------
           Results of Operations
           ---------------------

Operational Overview; Advisor Selections
----------------------------------------
         Due to the nature of the Fund's business, its results of operations
depend on Trading Advisor's ability to recognize and capitalize on trends and
other profit opportunities in different sectors of the world commodity markets.
The Trading Advisor's trading methods are confidential, so that substantially
the only information that can be furnished regarding the Fund's results of
operations is contained in the performance record of its trading. Unlike
operating businesses, general economic or seasonal conditions do not directly
affect the profit potential of the Fund, and its past performance is not
necessarily indicative of future results. Because of the speculative nature of
its trading, operational or economic trends have little relevance to the Fund's
results. MLIP believes, however, that there are 

                                       3
<PAGE>
 
certain market conditions, for example, markets with strong price trends, in
which the Fund has a better likelihood of being profitable than in others.

Results of Operations - General
-------------------------------
         Unlike an operating business, MLIP believes that it is difficult to
identify "trends" in the Fund's operations and virtually impossible to make any
predictions regarding future results based on results to date (even over the
nine year operational history of the Fund to date). The Trading Advisor regards
its strategy as long-term in nature.

         Markets in which sustained price trends occur with some frequency tend
to be more favorable to managed futures investments than "whipsaw," "choppy"
markets, but (i) this is not always the case, (ii) it is impossible to predict
when trending markets will occur and (iii) the Trading Advisor is affected by
trends in general as well as by particular types of trends.

         The Fund controls credit risk in its trading in the derivatives markets
by trading only through Merrill Lynch entities which MLIP believes to be
creditworthy. The Trading Advisor attempts to control the market risk inherent
in derivatives trading by applying multiple trading systems in each market as
well as implementing the basic risk management policies described above under
"Item 1: Business - (c) Narrative Description of Business." However, as a 
single-advisor fund, the Partnership must be considered a more speculative 
investment than the multi-advisor funds which have become popular in the public
commodity pool markets during approximately the last decade. Millburn Ridgefield
trades a diversified portfolio for the Fund, but with an emphasis on the
currency and financial instrument markets.

Performance Summary
-------------------
         During 1993, the Fund's average month-end Net Assets equalled
$9,410,468, and the Fund recognized gross trading gains of $1,380,777 or 14.67%
of such average month-end Net Assets. Brokerage commissions of $1,196,550 or
12.72% and Profit Shares of $83,410 or 0.89% of average month-end Net Assets
were paid. Interest income of $216,417 or 2.30% of average month-end Net Assets
resulted in net income of $317,234 or 3.37% of average month-end Net Assets,
which resulted in a 3.36% increase in the Net Asset Value per Unit.

         During 1994, the Fund's average month-end Net Assets equalled
$8,284,849, and the Fund recognized gross trading gains of $1,314,693 or 15.87%
of such average month-end Net Assets. Brokerage commissions of $1,056,436 or
12.75% and Profit Shares of $119,420 or 1.44% of average month-end Net Assets
were paid. Interest income of $290,482 or 3.51% of average month-end Net Assets
resulted in net income of $429,319 or 5.18% of average month-end Net Assets,
which resulted in a 5.55% decrease in the Net Asset Value per Unit.

         During 1995, the Fund's average month-end Net Assets equalled
$9,852,663, and the Fund recognized gross trading gains of $3,095,679 or 31.42%
of such average month-end Net Assets. Brokerage commissions of $1,208,671 or
12.27% and Profit Shares of $471,976 or 4.79% of average month-end Net Assets
were paid. Interest income of $468,023 or 4.75% of average month-end Net Assets
resulted in net income of $1,883,055 or 19.11% of average month-end Net Assets
which resulted in a 21.96% increase in the overall Net Asset Value of the Fund.

         In its past 36 months of trading, the Fund experienced 19 profitable
months and 17 unprofitable months.

                      MONTH-END NET ASSET VALUE PER UNIT
                      ----------------------------------

<TABLE> 
<CAPTION> 

        Jan.     Feb.     Mar.     Apr.     May      June     July     Aug.     Sept.    Oct.     Nov.     Dec.
        -------  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
<S>     <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C> 
1993    $174.03  $182.97  $181.37  $190.86  $186.44  $180.53  $188.27  $172.77  $173.34  $170.26  $172.38  $185.64
1994    $170.96  $168.29  $179.52  $174.67  $182.59  $191.83  $186.02  $174.47  $179.91  $184.24  $192.32  $195.94
1995    $189.48  $201.01  $231.61  $240.44  $235.91  $237.51  $230.15  $231.47  $226.17  $224.81  $224.36  $238.96
</TABLE> 

Importance of Market Factors
----------------------------
         Comparisons between the Fund's performance in one fiscal year to that
in a prior year are unlikely to be meaningful, given the uncertainty of price
movements in the markets traded by the Fund. In general, MLIP expects that the
Fund is most likely to trade successfully in markets which exhibit strong and
sustained price trends. Millburn Ridgefield's strategy is based on technical
trend analysis (and certain non-trend following technical systems).
Consequently, one would expect that in trendless, "choppy" markets the Fund
would likely be unprofitable, while in markets in which major price movements
occur, the Fund would have its best profit potential (although there could be no
assurance that the Fund would, in fact, trade profitably). However, the Trading
Advisor will not infrequently miss major price movements, and market corrections
can result in rapid and material losses (sometimes as much as 10% in a single
day).

Liquidity
---------
         Most of the Joint Venture's assets are held as cash which, in turn, is
used to margin its futures positions and earns interest income and is withdrawn,
as necessary, to pay redemptions and fees.

         The futures contracts in which the Joint Venture trades may become
illiquid under certain market conditions. Commodity exchanges limit fluctuations
in futures prices during a single day by regulations referred to as "daily
limits." During a single day no trades may be executed at prices beyond the
daily limit. Once the price of a futures contract for a particular commodity has
increased 

                                       4
<PAGE>
 
or decreased by an amount equal to the daily limit, positions in the
commodity can generally neither be taken nor liquidated unless traders are
willing to effect trades at or within the limit. Futures contracts have
occasionally moved to the daily limit for several consecutive days with little
or no trading. Such market conditions could prevent the Joint Venture from
promptly liquidating its futures (including its options) positions. There are no
limitations on the daily price moves in trading foreign currency forward
contracts through banks, although illiquidity may develop in the forward markets
due to large spreads between "bid" and "ask" prices quoted. (Forward contracts
are the bank version of currency futures contracts and are not traded on
exchanges.)

Capital Resources
-----------------
         The Joint Venture does not have, nor does it expect to have, any
capital assets and has no material commitments for capital expenditures. The
Joint Venture uses its assets to supply the necessary margin or premiums for,
and to pay any losses incurred in connection with, its trading activity and to
pay redemptions and fees.

         Inflation is not a significant factor in the Fund's profitability,
although inflationary cycles can give rise to the type of major price movements
which can have a materially favorable or adverse impact on the Fund's
performance.

Item 8:  Financial Statements and Supplementary Data
         -------------------------------------------

         The financial statements required by this Item are included on pages 
E-1 through E-15.

         The supplementary financial information ("selected quarterly financial
data" and "information about oil and gas producing activities") specified by
Item 302 of Regulation S-K is not applicable.

Item 9:   Changes in and Disagreements with Accountants on Accounting and
          ---------------------------------------------------------------
          Financial Disclosure
          --------------------
          
          There were no changes in or disagreements with accountants on
accounting and financial disclosure.

                                   PART III
                                   --------

Item 10:  Directors and Executive Officers of the Registrant
          --------------------------------------------------

  (a,b)   Identification of Directors and Executive Officers:
          ---------------------------------------------------
          As a limited partnership, the Joint Venture itself has no officers or
directors and is managed by the General Partner. Trading decisions are made on
behalf of the Joint Venture, through the Joint Venture, by the Trading Advisor.

          Merrill Lynch Investment Partners Inc. (formerly ML Futures Investment
Partners Inc.), a Delaware corporation, was organized in 1986 principally in
order to serve as the general partner and commodity pool operator of commodity
pools for which Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as
selling agent. The principal offices of the General Partner are located at
Merrill Lynch World Headquarters, 6th Floor, South Tower, World Financial
Center, New York, New York 10080-6106; telephone (212) 236-4161.

          The directors and officers of the General Partner, and titles as of
December 31, 1995 are as follows:

        John R. Frawley, Jr.  President, Chief Executive Officer and Director
        James M. Bernard      Chief Financial Officer, Senior Vice President and
                              Treasurer
        Jeffrey F. Chandor    Senior Vice President and Director of Sales,
                              Marketing and Research
        William T. Maitland   Secretary and Director
        Allen N. Jones        Chairman and Director

        John R. Frawley, Jr. was born in 1943. Mr. Frawley is Chief Executive
Officer, President and a Director of MLIP and Co-Chairman of Merrill Lynch
Futures. He joined MLPF&S in 1966 and has served in various positions, including
Retail and Institutional Sales, Manager of New York Institutional Sales,
Director of Institutional Marketing, Senior Vice President of Merrill Lynch
Capital Markets and Director of International Institutional Sales. Mr. Frawley
holds a Bachelor of Science degree from Canisius College. From its formation in
1990 through its dissolution in 1994, Mr. Frawley served on the CFTC's
Regulatory Coordination Advisory Committee. Mr. Frawley is currently a member of
the CFTC's Financial Products Advisory Committee. In January 1996, Mr. Frawley
was re-elected to a one-year term as Chairman of the Managed Futures
Association, the national trade association of the United States managed futures
industry. Mr. Frawley is also a Director of that organization and Vice Chairman
of the Futures Industry Institute.

        James M. Bernard was born in 1950. Mr. Bernard is Chief Financial
Officer, Senior Vice President and Treasurer of MLIP. He joined Merrill Lynch
Futures in 1983. Prior to such time he was the Commodity Controller for Nabisco
Brands Inc. from November 1976 to 1982 and a Supervisor with Ernst & Whinney
from 1972 to November 1976. Mr. Bernard is a member of 

                                       5
<PAGE>
 
the American Institute of Certified Public Accountants and holds a Bachelor of
Science degree from St. John's University and a Master of Business
Administration degree from Fordham University.

        Jeffrey F. Chandor was born in 1945. Mr. Chandor is Senior Vice
President and the Director of Sales, Marketing and Research of MLIP. He joined
MLPF&S in 1971 and has served as the Product Manager of International
Institutional Equities, Derivatives and Mortgage-Backed Securities as well as
Managing Director of International Sales in the United States, and Managing
Director of Sales in Europe. Mr. Chandor holds a Bachelor of Arts degree from
Trinity College, Hartford, Connecticut.

        William T. Maitland was born in 1949. From MLIP's inception in August
1986 through June 1, 1988, Mr. Maitland was the Secretary and a Director of MLIP
and, on August 15, 1992, he once again assumed these positions. Mr. Maitland is
the General Counsel for Futures & Options for MLPF&S, a position he has held
since November 1990, and is a member of the Board of Directors of Merrill Lynch
Futures. In 1971, Mr. Maitland graduated with a Bachelor of Arts degree from
Fordham University where his field of concentration was economics. In 1974, he
received his Juris Doctor degree from Fordham Law School. Mr. Maitland joined
MLPF&S in 1979. Mr. Maitland is presently a member of the Board of Directors of
the NFA and the Futures Industry Association ("FIA") and a past President of the
Executive Committee of the Law & Compliance Division of the FIA. He is a member
of the Committee on Commodities Regulation of the Association of the Bar of the
City of New York.

        Allen N. Jones was born in 1942. Mr. Jones is Chairman and a Director of
MLIP. Mr. Jones graduated from the University of Arkansas with a Bachelor of
Science, Business Administration degree in 1964. Since June 1992, Mr. Jones has
held the position of Senior Vice President of MLPF&S. From June 1992 through
February 1994, Mr. Jones was the President and Chief Executive Officer of
Merrill Lynch Insurance Group, Inc. ("MLIG") and remains on the Board of
Directors of MLIG and its subsidiary companies. In February 1994, Mr. Jones
became the Director of Individual Financial Services of the Merrill Lynch
Private Client Group. From January 1992 to May 1992, he held the position of
First Vice President of MLPF&S. From January 1990 to June 1992, he held the
position of District Director of MLPF&S. Prior to January 1990, he held the
position of Senior Regional Vice President of MLPF&S.

     (c)  Identification of Certain Significant Employees:
          -----------------------------------------------
          None. The Trading Advisor directs the trading activities of the Joint
Venture through the Joint Venture.

     (d)  Family Relationships:
          --------------------
          None.

     (e)  Business Experience:
          -------------------
          See Item 10(a)(b) above.

     (f)  Involvement in Certain Legal Proceedings:
          ----------------------------------------
          None.

     (g)  Promoters and Control Persons:
          -----------------------------
          The General Partner is the sole promoter and controlling person of the
Partnership.

Item 11:  Executive Compensation
          ----------------------

          The officers of the General Partner are remunerated in their
respective positions. The Partnership does not itself have any officers,
directors or employees. The Partnership pays brokerage commissions to an
affiliate of the General Partner. The directors and officers receive no "other
compensation" from the Partnership, and the directors receive no compensation
for serving as directors of the General Partner. There are no compensation plans
or arrangements relating to a change in control of either the Partnership or the
General Partner.

Item 12:  Security Ownership of Certain Beneficial Owners and Management:
          --------------------------------------------------------------

          (a)  Security Ownership of Certain Beneficial Owners:
               -----------------------------------------------
               As of December 31, 1995, no person or "group" is known to be or
have been the beneficial owner of more than five percent of the Units. All of
the Partnership's units of general partnership interest are owned by the General
Partner.

          (b)  Security Ownership of Management:
               --------------------------------
               As of December 31, 1995, the Trading Advisor owned 1,026 Units
and the General Partner owned 518 Unit equivalents. This represents, on a
combined basis, less than 4% of the total Units outstanding.

          (c)  Changes in Control
               ------------------
               None.

Item 13:  Certain Relationships and Related Transactions
          ----------------------------------------------

          (a)  Transactions with Management and Others:
               ---------------------------------------

                                       6
<PAGE>
 
        The General Partner performs certain services for the Partnership, which
include selecting a Trading Advisor to make trading decisions for the
Partnership through the Joint Venture, managing the Joint Venture and providing
for all normal ongoing administrative functions of the Partnership, such as
accounting, legal and printing services. The General Partner pays all expenses
relating to such services, including all such expenses of the Joint Venture, at
no cost to the Partnership. The monthly brokerage commission rate paid by the
Joint Venture to the Commodity Broker was 1% (12% annually). This rate was
reduced to 11.92% annually during 1993. Effective January 1, 1996, the brokerage
commission the Joint Venture pays to the Commodity Broker will be reduced to
 .9725% (a 11.67% annual rate), and the Partnership will pay an administrative
fee of .020833% (a .25% annual rate). The General Partner estimates that the
round-turn equivalent commission rate charged to the Joint Venture during the
year ended December 31, 1995, 1994 and 1993 was approximately $120, $33 and $29,
respectively (not including forward contracts on a futures contract equivalent
basis in calculating the round-turn rate). The consulting fee rate paid by the
commodity broker to the Trading Advisor is 0.33% (4% annually) of the Joint
Venture's month-end Net Assets.

        (b)  Certain Business Relationships:
             ------------------------------
             MLF, an affiliate of the General Partner, acts as Commodity Broker
for the Joint Venture at the selection of the General Partner. The General
Partner will not negotiate for lower commissions to be charged to the Joint
Venture and the commissions charged to the Joint Venture have not been
negotiated at arms' length between the General Partner and its affiliate,
Merrill Lynch Futures Inc.

             In 1995, the Joint Venture paid $1,208,671 in brokerage fees to
MLF, which, in turn, paid $405,561 in consulting fees to the Trading Advisor.

             See Item 1(c) "Narrative Description of Business" for a discussion
of other business dealings between MLIP affiliates and the Joint Venture.

        (c)  Indebtedness of Management:
             --------------------------
             The Joint Venture is prohibited from making any loans.

        (d)  Transactions with Promoters:
             ---------------------------
             Not applicable.

                                    PART IV
                                    -------

Item 14:  Exhibits, Financial Statement Schedules and Reports on Form 8-K
          ---------------------------------------------------------------
 
          (a)1. Financial Statements:
                --------------------
                                                                  Page
                                                                  ----

Independent Auditors' Report                                      E-5
 
Consolidated Statements of Financial Condition
  as of December 31, 1995 and 1994                                E-6
 
For the Years Ended December 31, 1995, 1994 and 1993:
      Consolidated Statements of Income                           E-7
      Consolidated Statements of Changes in
         Partners' Capital                                        E-8
 
Notes to Consolidated Financial Statements                        E-9

(a)2. Financial Statement Schedules:
      -----------------------------
      Financial statement schedules not included in this Form 10-K have been
omitted for the reason that they are not required or are not applicable or that
equivalent information has been included in the financial statements or notes
thereto.

(a)3. Exhibits:
      --------
      The following exhibits are incorporated by reference or are filed herewith
to this Annual Report on Form 10-K:

Designation     Description
-----------     -----------

1.01            Form of Selling Agreement among the Partnership, the General
                Partner, Merrill Lynch Futures Inc., the Trading Advisor, and
                the Selling Agent.

Exhibit 1.01:   Is incorporated by reference from Exhibit 1.01 contained in
------------
                Amendment No. l to the Registration Statement (File No. 33-8377)
                filed on October 21, 1986 on Form S-l under the Securities Act
                of 1933.

3.01            Amended and Restated Limited Partnership Agreement of the
                Partnership.

                                       7
<PAGE>
 
Exhibit 3.01:   Is incorporated by reference from Exhibit 3.0l contained in
------------    Amendment No. l to the Registration Statement (File No. 33-8377)
                filed on October 21, 1986, on Form S-l under the Securities Act 
                of 1933.
                
3.02            Amendment No. 1 to the Amended and Restated Limited Partnership
                Agreement dated March 1, 1990.

Exhibit 3.02:   Is incorporated by reference from Exhibit 3.02 contained in the
------------    Partnership's report on Form 10-K for the fiscal year ended 
                December 31, 1989.                                           

3.03            Amended and Restated Certificate of Limited Partnership, dated
                March 1, 1990.

Exhibit 3.03:   Is incorporated by reference from Exhibit 3.03 contained in the
------------    Partnership's report on Form 10-K for the fiscal year ended 
                December 31, 1989.                                           

3.04            Amended and Restated Certificate of Limited Partnership of the
                Partnership, dated July 27, 1995.

Exhibit 3.04:   Is incorporated by reference from Exhibit 3.04 contained in the
------------    Partnership's report on Form 10-Q for the Quarter Ended       
                September 30 , 1995.                                           
                
10.03           Consulting Agreement, dated as of April 1, 1987.

Exhibit 10.03:  Is incorporated by reference from Exhibit 10.05(a) contained in
-------------   the Partnership's Form 10-K of December 31, 1987 filed on March
                28, 1988.                                                       
                
10.04           Amendment No. 2 to the Joint Venture Agreement, dated as of
                December 31, 1987.

Exhibit 10.04:  Is incorporated by reference from Exhibit 10.04 contained in the
-------------   Partnership's report on Form 10-K for the fiscal year ended  
                December 31, 1989.                                            

10.05           Amendment No. 3 to the Joint Venture Agreement, dated as of
                December 31, 1988.

Exhibit 10.05:  Is incorporated by reference from Exhibit 10.05 contained in the
-------------   Partnership's report on Form 10-K for the fiscal year ended 
                December 31, 1989.                                           

10.06           Amendment No. 4 to the Joint Venture Agreement, dated as of
                December 31, 1989.

Exhibit 10.06:  Is incorporated by reference from Exhibit 10.06 contained in the
-------------   Partnership's report on Form 10-K for the fiscal year ended 
                December 31, 1989.                                          
                
10.07           Amendment No. 5 to the Joint Venture Agreement, dated as of
                January 1, 1990.

Exhibit 10.07:  Is incorporated by reference from Exhibit 10.07 contained in the
-------------   Partnership's Form 10-K of December 31, 1990, filed on March 27,
                1991.

10.08           Amendment No. 6 to the Joint Venture Agreement, dated as of
                January 1, 1992.

Exhibit 10.08:  Is incorporated by reference from Exhibit 10.08 contained in the
-------------   Partnership's report on Form 10-K for the Fiscal Year Ended 
                December 31, 1991.                                           

10.09           Amendment No. 7 to the Joint Venture Agreement, dated as of
                January 1, 1993.

Exhibit 10.09:  Is incorporated by reference from Exhibit 10.09 contained in the
-------------   Partnership's report on Form 10-K for the Fiscal Year Ended 
                December 31, 1992.                                            

10.10           Amendment No. 8 to the Joint Venture Agreement, dated as
                of January 1, 1994.

Exhibit 10.10:  Is incorporated by reference from Exhibit 10.09 contained in the
-------------   Partnership's report on Form 10-K for the Fiscal Year Ended
                December 31, 1994.                                          

10.11           Form of Advisory Agreement between the Partnership, Merrill
                Lynch Investment Partners Inc., Merrill Lynch Futures Inc. and
                prospective trading advisors.

Exhibit 10.11:  Is incorporated by reference from Exhibit 10.11 contained in the
-------------   Registrant's report on Form 10-Q for the Quarter Ended June 30,
                1995.                                                          
                
13.01           1995 Annual Report and Independent Auditors' Report.

Exhibit 13.01:  Is filed herewith.
-------------

99.01           Prospectus of the Partnership dated October 27, 1986.

Exhibit 99.01:  Is incorporated by reference as filed with the Securities and
-------------   Exchange Commission pursuant to Rule 424 under the Securities
                Act of 1933, as amended, on October 31, 1986.                 
                
                                       8
<PAGE>
 
(b)  Reports on Form 8-K:
     -------------------
     Form 8-K was filed by the Registrant on July 28, 1995 disclosing MLIP's
name change from ML Futures Investment Partners Inc.

                                       9
<PAGE>
 
                                  SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                        THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP

                        By:  MERRILL LYNCH INVESTMENT PARTNERS INC.
                                        General Partner


                        By:  /s/ John R. Frawley, Jr.
                             ------------------------
                             John R. Frawley, Jr.
                             President, Chief Executive Officer and
                             Director (Principal Executive Officer)

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed on March 28, 1996 by the
following persons on behalf of the Registrant and in the capacities indicated.

<TABLE>
<CAPTION>
 
      Signature                                       Title                               Date
-----------------------               -------------------------------------           --------------
<S>                                   <C>                                             <C>
                                                                            
/s/John R. Frawley, Jr.               President and Chief Executive Officer           March 28, 1996
-----------------------                                                     
John R. Frawley, Jr.                  and Director                          
                                                                            
/s/James M. Bernard                   Chief Financial Officer, Treasurer              March 28, 1996
-------------------                                                         
James M. Bernard                      (Principal Financial and Accounting   
                                      Officer) and Senior Vice President    
                                                                            
/s/Jeffrey F. Chandor                 Senior Vice President and Director              March 28, 1996
---------------------                                                       
Jeffrey F. Chandor                    of Sales, Marketing and Research      
                                                                            
/s/William T. Maitland                Director                                        March 28, 1996
----------------------                                                      
William T. Maitland                                                         
                                                                            
/s/Allen N. Jones                     Director                                        March 28, 1996
-----------------
Allen N. Jones
</TABLE>


(Being the principal executive officer, the principal financial and accounting
officer and a majority of the directors of Merrill Lynch Investment Partners
Inc.)

MERRILL LYNCH INVESTMENT       General Partner of       March 28, 1996
   PARTNERS INC.                 Registrant


By: /s/ John R. Frawley, Jr.
    ------------------------
    John R. Frawley, Jr.
<PAGE>
 
                THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
                                1995 FORM 10-K
                               INDEX TO EXHIBITS
                               -----------------

                                   EXHIBIT                      PAGE
                             ---------------------
Exhibit 13.01           1995 Annual Report and Independent       E-1
                        Auditors' Report