GLOBAL INCOME FUND
11 Hanover Square, New York, NY 10005
American Stock
Exchange Symbol:
BBZ
August 12, 1998
Fellow Shareholders:
We are pleased to submit this Annual Report for the fiscal year ended June 30,
1998. We are also pleased to note that annualizing the Fund's July 1998 dividend
and based on the market price on payment date, the Fund's dividend distribution
yield now stands at 11.18%. The Fund's current net asset value per share is
$6.78. With a recent closing market price on the American Stock Exchange of
$6.44 per share, we believe this represents an opportunity to purchase shares at
an attractive discount from their underlying value.
Dividend Distribution Policy Continued
The adoption by the Fund's Board of Directors in June 1997 of a managed 10%
dividend distribution policy has been well received. The policy is intended to
provide shareholders with a stable cash flow and reduce or eliminate any market
price discount to net asset value. The monthly dividend distributions of
approximately 0.83% of the Fund's net asset value (10% on an annual basis)
will be paid primarily from ordinary income and any capital gains with the
balance representing return of capital. For the twelve months ended June 30,
1998, actual distributions were 10.3% of average net assets. We believe shares
of the Fund are a sound value and an attractive investment for income oriented
portfolios.
Review and Outlook
Prices of U.S. government securities have increased generally during the year
as a result of declining interest rates, but we note that the increase was not
uniform throughout the entire maturity spectrum. In our December report to
shareholders, we identified several variables that could contribute to such a
trend. We felt that turmoil in Asia would create a global
preference for the safety of U.S. Government securities, and have a deflationary
impact on the prices of commodities and manufactured imports, offsetting
domestic prices pressures caused by low levels of unemployment. In addition, we
felt that the Federal budget surplus, which reduced the supply of U.S.
Government securities, would also bring lower interest rates. Finally, we
anticipated that a slowdown in the pace of domestic growth could prompt easier
monetary policy and reduce inflationary pressures.
Our outlook for stable or lower interest rates has been generally correct over
the year and, at this writing, remains unchanged. While GDP grew at a high rate
of 5.4% in the first quarter, we anticipate much slower growth for the balance
of the year. We are pleased that monthly inflation reports continue to be low.
We have always been skeptical of the argument that low levels of unemployment
lead to inflation, and continue to expect price competition and gains in
productivity to be prevalent. We also note that yields after inflation on
government securities of the United States are very attractive compared to those
of other developed nations, and expect continued demand for U.S. debt from both
value and safety conscious global investors.
Future declines in interest rates will continue to be constrained by the Federal
Funds overnight rate. Historically, the Federal Funds rate is thought to be
neutral when it is around 1.75 percentage points greater than the rate of
inflation. Over the past year, core producer prices are up only .8%, and core
consumer prices have risen only 2.2%, implying a neutral Fed Funds rate between
2.5% and 4%, much lower than the current 5.5% level. In his February
<PAGE>
Humphrey-Hawkins Testimony to the Congress, Federal Reserve Chairman Alan
Greenspan acknowledged this passive increase in monetary restraint by the
Federal Reserve as a deliberate and welcome tightening, intended to offset
sources of stimulus in the economy, such as rising equity prices. We expect this
rate to remain unchanged until the balance of forces in the economy tilt either
toward a reemergence of inflation, which would prompt greater restraint, or
clear signs that weakness in Asia has become excessively deflationary and
threatens growth globally. While "inverted yield curves" where long term
interest rates are lower than short term rates, are historically anomalous, they
are not unprecedented, and we continue to believe that intermediate and long
term interest rates can decline further.
The markets for the debt of less developed countries were volatile during the
first half of the year. In the first quarter, The J.P. Morgan Emerging Market
Bond Index had a total return of approximately 5.2 %. Over the last twelve
months, the Fund has generally invested between 15% and 30% of its total assets
in these markets, and the returns from the lows of the quarter to the highs were
almost 10.5%. During the second quarter, the index declined by almost 6%. One
positive development during the first half of the yearwas the "decoupling" of
these markets: there is less of a tendency than was the case last fall for bond
prices to drop in all regionssimultaneously in response to an isolated,
independent political or economic event in one region.
However, during times of extreme stress, this "contagion" is still in
evidence. This makes investing in these markets challenging, but we continue to
believe that the magnitude of potential rewards warrant a commitment to this
arena, and are confident in our ability to manage these risks.
In regard to currencies, although we have favored the U.S. dollar for the past
three years, we began increasing our weightings in core European currencies this
spring for several reasons. We are concerned that weakness in Asia will continue
to have a negative impact on our balance of trade. We believe that the
outperformance of European equity markets over the United States will increase
investor confidence and enthusiasm for these markets and anticipate an eventual
diminution of the flight to quality premium associated with dollar strength in
the second quarter. Despite the fact that U.S. dollar denominated yields offer
exceptional value relative to the yields in other developed countries, we have
been successful in increasing our non-dollar allocation in assets which will
contribute positively to the portfolios current yield and total return.
Rights Offering Oversubscribed
As announced previously, the Fund received subscriptions for approximately
2,320,000 shares of the Fund's common stock, well in excess of the 1,576,468
shares offered pursuant to its rights offering, which expired on June 10, 1998.
In accordance with the terms of the rights offering, the subscription price was
$6.15 per share. Since sufficient shares were not available to honor all
requests for over-subscription, pursuant to the terms of the rights offering the
Fund allocated available shares remaining after fulfilling exercises of rights
pursuant to the primary subscription privilege on a pro rata basis, based on the
number of rights owned by the persons requesting over-subscriptions.
An Easy Way to Grow Your Account
The Fund's Dividend Reinvestment Plan provides an attractive opportunity to add
to your holdings, particularly since the Fund's monthly dividends are reinvested
without charge at the net asset value per share or market price, whichever is
lower.
Sincerely,
Thomas B. Winmill Steven A. Landis
President Senior Vice President
Portfolio Manager
<PAGE>
BULL & BEAR GLOBAL INCOME FUND, INC.
Schedule of Portfolio Investments - June 30, 1998
================================================================================
Par Value BONDS (94.9%) Market Value
- -------------------------------------- -----------------------------------------
Argentina (16.4%)
- --------------------------------------------------------------------------------
$1,000,000 Astra Compania Argentina de Petroleo
S.A., 11.625%, due 12/02/99 $ 1,048,750
(2)
- --------------------------------------------------------------------------------
1,000,000 Bridas Corp., 12.50% Senior Notes, due 11/15/99 1,048,750
- -----------------------------------------0--------------------------------------
L2,725,000,000 Perez Companc Floating Rate Notes, due 4/01/02 1,504,593
- --------------------------------------------------------------------------------
750,000 IMASAC S.A. 11%, due 5/02/05 696,563
- --------------------------------------------------------------------------------
892,855 Province of Tucuman, 9.45%, due 8/01/04 830,355
- --------------------------------------------------------------------------------
1,000,000 Republic of Argentina, 8.75%, due 7/10/02 862,500
- --------------------------------------------------------------------------------
500,000 Supercanal Holdings S.A. 11.50%
Senior Notes, due 5/15/05 482,500
- --------------------------------------------------------------------------------
6,474,011
- -------------------------------------------------------------------------------
Brazil (3.4%)
- --------------------------------------------------------------------------------
500,000 Comtel Brasileira Ltda., 10.75%
Notes, due 9/26/04 (2) 462,500
- --------------------------------------------------------------------------------
500,000 Radio e Televisao Bandeirantes Ltda.,
12.875% Notes, due 5/15/06 421,250
- --------------------------------------------------------------------------------
500,000 Voto-Votorantim Overseas Trading Operations N.V. 8.50%,
- --------------------------------------------------------------------------------
due 6/27/05 446,248
- --------------------------------------------------------------------------------
1,329,998
- --------------------------------------------------------------------------------
Chile (2.5%)
- --------------------------------------------------------------------------------
1,000,000 Banco Santiago S.A. 7% Subordinated
Notes, due 7/18/07 1,005,936
- --------------------------------------------------------------------------------
China (1.1%)
- --------------------------------------------------------------------------------
500,000 Guangdong Enterprises (Holdings) Ltd., 8.875% Senior Notes,
- --------------------------------------------------------------------------------
due 5/22/07 432,242
- --------------------------------------------------------------------------------
Colombia (2.4%)
- --------------------------------------------------------------------------------
1,000,000 Termoemcali Funding Corp., 10.125%,
due 12/15/14 (2) 952,500
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dominican Republic (1.2%)
- -------------------------------------------------------------------------------
500,000 Tricom S.A. 11.375% Senior Notes, due 9/01/04 (2) 478,750
- -------------------------------------------------------------------------------
Germany (1.4%)
- -------------------------------------------------------------------------------
2,000,000 Metro Finance BV 18.50%, due 5/22/00 566,389
- -------------------------------------------------------------------------------
Lithuania (6.5%)
- --------------------------------------------------------------------------------
2,560,000 Lietuvos Energija Amortising, Floating
Rate Note, due 4/06/00 2,560,000
- --------------------------------------------------------------------------------
Mexico (3.6%)
- --------------------------------------------------------------------------------
500,000 Bepensa S.A. de C.V. 9.75% Senior Notes,
due 9/30/04 487,500
- --------------------------------------------------------------------------------
1,000,000 Grupo Minero Mexico S.A.de C.V. 8.25%,
due 4/01/08 950,000
- --------------------------------------------------------------------------------
1,437,500
- --------------------------------------------------------------------------------
Panama (1.9%)
- --------------------------------------------------------------------------------
1,000,000 Panama-Interest Reduction Bonds, 3.75% Debentures,
due 7/17/14 745,382
- --------------------------------------------------------------------------------
Poland (2.3%)
- --------------------------------------------------------------------------------
Zl1,000,000 Poland Past due Interest Notes,
due 10/27/14 899,275
- --------------------------------------------------------------------------------
Qatar (1.3%)
- --------------------------------------------------------------------------------
500,000 Ras Laffan Liquified Natural Gas Company Ltd., 8.294%,
- --------------------------------------------------------------------------------
due 3/15/14 (2) 500,509
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------
Russia (2.1%)
- ---------------------------------------------------------------------
500,000 City of St. Petersburg 9.50% Bonds,
due 6/18/02 $ 398,750
- --------------------------------------------------------------------------------
1,000,000 Russian Ministry of Finance 9.375% Bonds,
due 3/31/05 445,934
- --------------------------------------------------------------------------------
844,684
- --------------------------------------------------------------------------------
Turkey (1.1%)
- --------------------------------------------------------------------------------
500,000 Pera Financial Services Company, 9.375%,
due 10/15/02 444,375
- --------------------------------------------------------------------------------
United Kingdom (8.7%)
- --------------------------------------------------------------------------------
£750,000 Sutton Bridge Financing Ltd.,
8.625%, due 6/30/22 (2) 1,479,324
- --------------------------------------------------------------------------------
3,000,000 Rothschild Continuation Finance B.V. Primary Capital Floating
- --------------------------------------------------------------------------------
Rate Notes 1,980,000
- --------------------------------------------------------------------------------
3,459,324
- --------------------------------------------------------------------------------
United States (38.7%)
- --------------------------------------------------------------------------------
$500,000 Conseco Finance Trust II, 8.70%, Capital Trust Pass through
- --------------------------------------------------------------------------------
Securities,due 11/15/26 570,655
- --------------------------------------------------------------------------------
250,000 Equifax Inc., 6.30%, due 7/01/05 248,306
- --------------------------------------------------------------------------------
1,000,000 First Hawaiian Capital I, 8.343%, due 7/01/27 1,079,053
- --------------------------------------------------------------------------------
500,000 MacSaver Financial Services, 7.60% Notes, due 8/01/07 469,537
- -------------------------------------------------------------------------------
500,000 Socgen Real Estate LLC, 7.64% Bonds, due 12/29/49 497,628
- --------------------------------------------------------------------------------
500,000 Staples Inc., 7.125% Senior Notes, due 8/15/07 519,928
- --------------------------------------------------------------------------------
1,000,000 U.S. Treasury Note, 5.50%, due 2/28/03 999,688
- --------------------------------------------------------------------------------
1,500,000 U.S. Treasury Note, 5.75%, due 4/30/03 1,515,002
- --------------------------------------------------------------------------------
1,000,000 U.S. Treasury Note, 5.375%, due 6/30/03 996,251
- --------------------------------------------------------------------------------
2,300,000 U.S. Treasury Note, 6.125%, due 8/15/07 2,394,878
- --------------------------------------------------------------------------------
1,000,000 U.S. Treasury Note, 5.50%, due 2/15/08 1,000,001
- --------------------------------------------------------------------------------
3,000,000 U.S. Treasury Note, 5.625%, due 5/15/08 3,042,189
- --------------------------------------------------------------------------------
13,333,116
- --------------------------------------------------------------------------------
Supernational/Other (5.4%)
- --------------------------------------------------------------------------------
1,000,000 Corporacion Andina De Fomento 5.375% Bonds,
due 1/29/03 558,109
- --------------------------------------------------------------------------------
3,500,000 European Bank for Reconstruction & Development 19.25% Notes,
- --------------------------------------------------------------------------------
due 4/02/00 1,002,122
- --------------------------------------------------------------------------------
1,950,000 International Bank for Reconstruction & Development 18% Notes,
- --------------------------------------------------------------------------------
due 2/27/03 584,385
- --------------------------------------------------------------------------------
2,144,616
- -------------------------------------------------------------------------------
Total Bonds (cost: $38,136,612) 37,608,607
- --------------------------------------------------------------------------------
SHORT TERM HOLDINGS (5.1%) )
- -------------------------------------------------------------------------------
2,000,000 Goldman Sachs Group, Commercial Paper, due 7/01/98
- -----------------------------------------------------------------------------
(cost $2,000,000) 2,000,000
- -----------------------------------------------------------------------------
Shares WARRANTS (0.0%)
- -----------------------------------------------------------------------------
2,526 CHI Energy, Inc., series B (3) 707
- -----------------------------------------------------------------------------
1,640 CHI Energy, Inc., series C (3) 459
- -----------------------------------------------------------------------------
Total Warrants (cost: $513,320) 1,166
- ---------------------------------------------------------------
Total Investments (cost: $40,649,932) (100.0%) $39,609,773
================================================================================
(1) Pa value stated in currency indicated; market value stated in U.S. dollars.
See accompanying notes to financial statements.
(2) Purchased pursuant to Rule 144A exemption from Federal registration
requirements.
(3) Non-income producing security.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
ASSETS:
.Investments at market value (cost: $40,649,932) (note 1) $39,609,773
.Cash.1,910,911
.Interest receivable 834,203
.Other assets 5,322
.......Total assets 42,360,209
LIABILITIES:
Payables:
...Reverse repurchase agreement 8,095,694
...Investment securities purchased 918,244
...Interest 7,154
.Accrued management fees 25,353
.Accrued expenses 73,147
.Other liabilities 216,356
.......Total liabilities 9,335,948
NET ASSETS:
(applicable to 4,762,553
outstanding shares: 20,000,000 shares
of $.01 par value authorized) $33,024,261
NET ASSET VALUE PER SHARE
.($33,024,261 a 4,762,553) $6.93
At June 30, 1998, net assets consisted of:
.Paid-in capital $50,984,809
Accumulated net realized loss on investments,
...foreign currencies and futures (16,920,439)
Net unrealized depreciation on investments and foreign currencies
...and futures (1,040,109)
....... $33,024,261
STATEMENT OF OPERATIONS
Year Ended June 30, 1998
INVESTMENT INCOME:
.Interest (net of $27,253 of foreign tax) $2,755,168
.Dividends 37,245
...Total investment income 2,792,413
EXPENSES:
.Interest (note 5) 488,780
.Investment management (note 3) 176,297
.Professional (note 3) 77,636
.Custodian 65,173
.Directors 24,285
.Printing 23,349
.Transfer agent 17,685
.Registration 11,186
.Other. 3,806
...Total expenses 888,197
...Fee reductions (note 4) (25,872)
...Net expenses 862,325
.......Net investment income 1,930,088
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND FUTURES:
Net realized loss from security
...transactions (537,932)
.Net realized loss from foreign currency and futures transactions (267,625)
Unrealized depreciation of investments,
...foreign currencies and futures during the period (1,211,629)
.Net realized and unrealized loss on investments, foreign currencies
...and futures (2,017,186)
.Net decrease in net assets resulting from operations $ (87,098)
<PAGE>
<TABLE>
<CAPTION>
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30,
1998 1997
OPERATIONS:
<S> <C> <C>
Net investment income $.......1,930,088 $........1,815,036
Net realized gain (loss) from security, foreign currency and futures transactions .........(805,557) .........1,334,266
Unrealized appreciation (depreciation) of investments, foreign currencies and
futures during the period
..Net change in net assets resulting from operations .......(1,211,629) ...........814,544
Subtractions from paid-in capital (note 6) ..........(87,098) .........3,963,846
.........(349,978) ..........(63,200)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.52 and $0.59 per share, respectively) ..................
Distributions from paid-in capital ($0.32 per share) .......(1,660,618) .......(2,005,431)
.........(933,121) _
CAPITAL SHARE TRANSACTIONS:
Change in net assets resulting from capital share transactions (a) (note 6)
..Total change in net assets .......10,694,156 .......(7,399,457)
........7,663,341 .......(5,504,242)
NET ASSETS:
Beginning of period
End of period (including accumulated undistributed net investment deficit of
.......25,360,920f J........30,865,162
$33,024,261 $25,360,920
=================================================================================================================================
</TABLE>
(a) Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
==========================================================================================================================
1998 1997
- ---------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
<S> <C> <C> <C> <C>
Shares sold _ _ 114,223 $ 928,783
Shares issued in reinvestment of distributions 178,392 $ 1,386,689 172,123 1,363,041
Shares issued in rights offering (note 6) 1,576,468 9,307,467 _ _
Shares redeemed - - (1,173,984) (9,691,281)
Net increase (decrease) 1,754,860 $ 10,694,156 (887,638) $ (7,399,457)
============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) The Fund is a Maryland corporation registered under the Investment Company
Act of 1940, as amended, as a diversified, closed-end management investment
company, whose shares are listed on the American Stock Exchange. The primary
objective of the Fund is a high level of income and secondarily, capital
appreciation. The Fund seeks to achieve its investment objectives by investing
primarily in foreign and domestic fixed income securities, depending on the
Investment Manager's evaluation of current and anticipated market conditions, as
set forth in its prospectus. The Fund is subject to the risk of price
fluctuations of the securities held in its portfolio which is generally a
function of the underlying credit ratings of an issuer, the duration and yield
of its securities, and general economic and interest rate conditions. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements. With respect to
security valuation, securities traded on a national securities exchange or the
Nasdaq National Market System ("NMS") are valued at the last reported sales
price on the day the valuations are made. Such securities that are not traded on
a particular day and securities traded in the over-the-counter market that are
not on NMS are valued at the mean between the current bid and asked prices.
Certain of the securities in which the Fund invests are priced through pricing
services which may utilize a matrix pricing system which takes into
consideration factors such as yields, prices, maturities, call features and
ratings on comparable securities. Bonds may be valued according to prices quoted
by a dealer in bonds which offers pricing services. Debt obligations with
remaining maturities of 60 days or less are valued at cost adjusted for
amortization of premiums and accretion of discounts. Securities of foreign
issuers denominated in foreign currencies are translated into U.S. dollars at
prevailing exchange rates. Forward currency contracts are undertaken to hedge
certain assets denominated in foreign currencies. Forward contracts are marked
to market daily and the change in market value is recorded by the Fund as an
unrealized gain or loss. When a contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The Fund could be
exposed to risk if the counterparties are unable to meet the terms of the
contracts or if the value of the currency changes unfavorably. Investment
transactions are accounted for on the trade date (the date the order to buy or
sell is executed). Interest income is recorded on the accrual basis. Discounts
and premiums on securities purchased are amortized over the life of the
respective securities. Dividends and distributions to shareholders are recorded
on the ex-dividend date. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At June 30, 1998, the
Fund had an unused capital loss carryforward of approximately $16,582,000 of
which, $8,549,000 expires in 1999, $1,656,000 in 2000, $4,110,000 in 2001,
$173,000 in 2003, $1,880,000 in 2004 and $214,000 in 2006. Based on Federal
income tax cost of $40,649,932, gross unrealized appreciation and gross
unrealized depreciation were $426,707 and $1,466,866, respectively, at June 30,
1998. Distributions paid to shareholders during the year ended June 30, 1998
differ from net investment income and net gains (losses) from security, foreign
currency and futures transactions as determined for financial reporting purposes
principally as a result of the characterization of realized foreign currency
gains (losses) for tax/book purposes, the taxability of unrealized appreciation
(depreciation) on certain forward currency contracts and the utilization of
capital loss carryforwards. These distributions are classified as "distributions
from paid-in capital" in the Statements of Changes in Net Assets.
(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager. Under
the terms of the Investment Management Agreement, the Investment Manager
receives a management fee, payable monthly, based on the average weekly net
assets of the Fund, at the annual rate of 7/10 of 1% of the first $250 million,
5/8 of 1% from $250 million to $500 million, and 1/2 of 1% over $500 million.
Certain officers and directors of the Fund are officers and directors of the
Investment Manager and Investor Service Center, Inc., the Fund's former
Distributor. The Fund reimbursed the Investment Manager $8,324 for providing
certain administrative and accounting services at cost for the year ended June
30, 1998.
<PAGE>
(4)The Fund has entered into an arrangement with its custodian whereby interest
earned on uninvested cash balances was used to offset a portion of the Fund's
expenses. During the period, the Fund's custodian fees were reduced by $25,872
under such arrangements. Purchases and sales of securities other than short term
notes aggregated $117,540,227 and $110,342,748, respectively, for the year ended
June 30, 1998.
(5) The Fund may borrow through a committed bank line of credit and reverse
repurchase agreements. At June 30, 1998, there was no balance outstanding on the
line of credit and the interest rate was equal to the Federal Reserve Funds Rate
plus 1.00 percentage point. For the year ended June 30, 1998, the weighted
average interest rate was 5.35% based on the balances outstanding from the line
of credit and reverse repurchase agreements and the weighted average amount
outstanding was $9,125,180.
(6) Effective February 7, 1997, the Fund converted from an open-end management
investment company to a closed-end management investment company. In connection
with the conversion, costs of approximately $113,200 were charged against
paid-in capital. In addition, the Fund has adopted a Dividend Reinvestment Plan
(the "Plan"). Under the Plan, each dividend and capital gain distribution, if
any, declared by the Fund on outstanding shares will, unless elected otherwise
by each shareholder by notifying the Fund in writing at any time prior to the
record date for a particular dividend or distribution, be paid on the payment
date fixed by the Directors in additional shares in accordance with the
following: whenever the Market Price (as defined below) per share is equal to or
exceeds the net asset value per share at the time shares are valued for the
purpose of determining the number of shares equivalent to the cash dividend or
capital gain distribution (the "Valuation Date"), participants will be issued
additional shares equal to the amount of such dividend divided by the Fund's net
asset value per share. Whenever the Market Price per share is less than such net
asset value on the Valuation Date, participants will be issued additional shares
equal to the amount of such dividend divided by the Market Price. The Valuation
Date is the dividend or distribution payment date or, if that date is not an
American Stock Exchange trading day, the next trading day. For all purposes of
the Plan: (a) the Market Price of the shares on a particular date shall be the
average closing market price on the five trading days the shares traded
ex-dividend on the Exchange prior to such date or, if no sale occurred on the
Exchange prior to such date, then the mean between the closing bid and asked
quotations for the shares on the Exchange on such date, and (b) net asset value
per share on a particular date shall be as determined by or on behalf of the
Fund.
On May 20, 1998, the Fund issued to its shareholders of record on that date,
non-transferable rights entitling the holders thereof to subscribe for an
aggregate of 1,576,468 shares of the Fund's common stock. In connection with the
rights offering, estimated costs of $300,000 were charged against paid-in
capital. At the conclusion of the offering period, 1,576,468 shares were issued
at a subscription price of $6.15, resulting in $9,307,467 (net of sales load)
credited to paid-in capital.
The date after which notice of a shareholder proposal for the Fund's annual
meeting of stockholders submitted outside the processes of 17 CFR S240.14a-8 is
considered untimely is September 7, 1998. In addition to any other applicable
requirements, for a nomination to be made by a stockholder or for any other
business to be properly brought before the annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written to the
Secretary of the Fund in the manner set forth in the Fund's By-laws.
<PAGE>
FINANCIAL HIGHLIGHTS
Years Ended June 30,
<TABLE>
<CAPTION>
==================================================================================================================================
PER SHARE DATA*
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $8.43 $7.92 $8.00 $8.25 $9.39
Income from investment operations:
....Net investment income .52 .51
...Net realized and unrealized gain (loss) on investments (1.18) .59 .26 .17 .60
........Total from investment operations (.66) 1.10 .23 .18 (1.02)
Less distributions: .49 .35 (.42)
...Distributions from net investment income (.52) (.59)
...Distributions in excess of net realized gains -- -- (.26) (.17) (.60)
...Distributions from paid-in capital (.32) -- -- -- (.12)
.Total distributions (.84) (.59) (.31) (.43) --
Net asset value at end of period $6.93 $8.43 (.57) (.60) (.72)
Per share market value at end of period $6.44 $8.50 $7.92 $8.00 $8.25
TOTAL RETURN ON NET ASSET VALUE BASIS (8.44)% 14.71%
TOTAL RETURN ON MARKET VALUE BASIS (a) (15.65)% 15.71% 6.26% 4.52% (5.12)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $33,024 $25,361 $30,865 $39,180 $44,355
Ratio of expenses to average net assets (b) (c) 3.52% 2.71% 2.18% 2.21% 1.98%
Ratio of net investment income to average net assets (d) 8.53% 7.35% 6.55% 6.20% 6.58%
Portfolio turnover rate 328% 475% 585% 385% 223%
==================================================================================================================================
</TABLE>
* Per share income and operating expenses and net realized
and unrealized gain (loss) on investments have been computed
using the average number of shares outstanding. These
computations had no effect on net asset value per share.
(a) Effective February 7, 1997, the Fund converted
from an open-end management investement company to a
closed-end management investment company. The Fund has
calculated total return on market value basis based upon
purchases and sales of the Fund at current market values and
reinvestment of dividends and distributions at lower of the per
share net asset value on the payment date or the average of
closing market price for the five days preceding the payment date.
(b) Ratio excluding interest expense was 1.58% and
2.00% for the years ended June 30, 1998 and 1997.
(c) Ratio after custodian credits was
3.42% (SUP) (/SUP) for the year ended June 30, 1998.
(d) Ratio including interest expense was 6.59% and
6.64% for the years ended June 30, 1998 and 1997.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholders of
Bull & Bear Global Income Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of Bull &
Bear Global Income Fund, Inc. including the schedule of portfolio investments as
of June 30, 1998, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Bull &
Bear Global Income Fund, Inc. as of June 30, 1998, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with generally accepted accounting
principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 17, 1998
GLOBAL INCOME FUND
11 Hanover Square
New York, NY 10005
1-888-847-4200
Annual Report
June 30, 1998
Independent Accountants
Tait, Weller & Baker
GIF-121-6/8
