Prudential
Global Fund, Inc.
- ------------------------------------------------
Prudential Mutual Funds
BUILDING YOUR FUTURE
(LOGO)
ON OUR STRENGTH
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Letter to Shareholders
December 6, 1993
Dear Shareholder:
Global stock markets have enjoyed attractive returns in the last year,
outperforming almost every domestic stock and bond sector as the
worldwide economic picture began to improve. The Prudential Global
Fund has benefitted both from this general
trend and from its current emphasis on the growing economies of the
Pacific Rim.
As of October 31, 1993, 96% of the Fund's portfolio was invested in
stocks and convertible securities, with a modest 4% in cash.
Riding A Wave Of Global Strength
The global stock markets are rebounding with vigor from a four-year
slump that started in 1988. Global markets have returned 18.32% for
the 12 months ended November 30, as measured by the Morgan Stanley World
Index (a weighted index comprised of
over 1,400 securities listed on the stock exchanges of the U.S.,
Europe, Canada, Australia, New Zealand and the Far East). In contrast,
the S&P 500 is up 10.11% for the same time period.
A primary focus on careful stock selection is the key to global equity
investing. Our strategy of identifying major structural changes in the
world and buying stocks that are positioned to benefit is in large measure
responsible for the past year's strong investment results.
These trends restated below continue to dominate global investing
in the 1990s:
A new age is dawning in Japan. The Liberal Democratic Party,
which dominated Japanese politics since World War II, is out and a
generational shift to a younger power base is taking place. Consumption
is replacing thrift as society's byword,
which should over time create more opportunities for investors. As the
new government makes it easier for young, urban dwellers to buy homes,
we have invested in single-family homebuilders like Higashi Nihon. We
have also purchased Nissen, which is
patterned after Spiegel, a discount catalog clothing concern.
-1-
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The low-cost manufacturing centers of the Pacific Basin should
continue to fuel explosive economic growth in that region. In addition,
international businesses in countries like Malaysia and Singapore represent
a chance to take part in China's
growth. Our Singaporean holdings include Sembawang Shipyards, which does
business with mainland China. Pilecon Engineering, a Malaysian company,
is a public works construction firm with lucrative building contracts in
the region.
Also in Asia, the Fund has begun to pursue Korean companies.
This country is shifting from low-cost manufacturing to more
sophisticated technology. In addition, it is poised to be one of
China's key trading partners. Stocks we hold include
Samsung Electronics, the consumer electronics giant heavily diversified
into semiconductors. In addition, we hold Dong-Ah, a large contractor
with technical expertise, contracting experience and the overseas
exposure to exploit its strengths.
The U.S. market is a mature one that may display relatively
slow growth for the foreseeable future. One strong sector in the U.S.
is computer software technology. We have purchased Adaptec, which
manufactures software that helps peripherals
communicate with the central processor.
The merging of Eastern and Western Europe will have broad
implications. As Europe moves slowly toward economic unification,
we favor multinational companies that are doing business with the
former Eastern bloc nations, as well as those with
strong non-European operations.
Into The New Year
The U.S. economy appears to be settling into an extended period of
steady--if somewhat slow--growth. Although there are signs inflation
may be creeping into the picture, new U.S. taxes in 1993 and 1994 may
dampen the expansion. The U.S. stock
market, which reached record levels in 1993, may be lackluster as a result.
Overseas, the European economies may have reached their bottom. Therefore,
we are actively looking for opportunities in Europe, especially among
companies that should profit in an expansionary economy. Asia remains
the ""jewel'' in the growth crown. Japan's conversion to a consumer-based
economy should bode well for all the booming Pacific economies, including
Malaysia, Singapore and Korea or Indonesia.
The downside to our optimistic outlook would be a return to recession in
the U.S. or the rest of the world. Investors--especially those with a
negative global economic outlook--should carefully consider the currency,
economic and stock market risks
associated with global investing. Additional risks include political and
social developments, which can also affect performance. Those who anticipate
slow and steady growth, however, might want to remain diversified by keeping
a portion of their equity portfolio in global equities.
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As always, we are pleased to have you as a Prudential Global Fund
shareholder and to take the opportunity to report our activities to you.
Sincerely,
Lawrence C. McQuade
President
Daniel J. Duane
Portfolio Manager
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<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--94.4%
Common Stocks--83.9%
Australia--2.4%
223,000 Broken Hill Proprietary $ 2,630,743
Company, Ltd.
(Energy sources)
1,272,405 BTR Nylex, Ltd. ........... 2,659,896
(Industrial components)
270,000 Coca Cola Amatil, Ltd. .... 1,851,445
(Food & household ------------
products)
7,142,084
------------
Belgium--1.5%
4,400 Bekaert S.A., N.V. ........ 2,365,234
(Industrial components)
9,700 Krediet Bank N.V. ......... 2,024,440
(Banking)
9,700 Krediet Bank N.V. (Rights) 7,192
......................... ------------
(Banking)
4,396,866
------------
Federal Republic of Germany--1.5%
4,090 Bilfinger & Berger Bau AG 2,230,688
.........................
(Construction & housing)
11,050 Commerzbank AG ............ 2,244,101
(Banking) ------------
4,474,789
------------
France--4.4%
7,000 Guyenne et Gascogne ....... 2,106,468
(Merchandising)
25,000 Imetal S.A. ............... 2,267,526
(Miscellaneous materials &
commodities)
28,500 La Farge Coppee ........... 2,087,310
(Building materials &
components)
14,915 Plastic Omnium ............ 1,656,239
(Automotive)
20,500 Societe Generale .......... $ 2,422,395
(Banking)
13,200 Valeo ..................... 2,437,026
(Automotive) ------------
12,976,964
------------
Hong Kong--6.4%
5,500,000 CDL Hotels International 2,455,513
.........................
(Real estate)
4,000,000 Giordano Holdings ......... 2,562,276
(Merchandising)
1,200,000 Guoco Group, Ltd. ......... 5,241,022
(Financial services)
1,270,000 Hopewell Holdings, Ltd. ... 1,273,697
(Real estate)
8,990,000 Hung Hing Printing Group, 3,170,198
Ltd. ....................
(General manufacturing)
1,112,000 Hutchison Whampoa, Ltd. ... 4,187,537
(Multi-industry) ------------
18,890,243
------------
Indonesia--1.0%
867,000 Kabel Metal Industries, 2,887,868
Ltd.* ................... ------------
(Wire & cable)
Japan--13.2%
153,000 Aiwa Co. .................. 2,498,247
(Consumer electronics)
63,000 Aoyama Trading Co. ........ 4,719,188
(Merchandising)
6,500 Autobacs Seven Co. ........ 791,513
(Merchandising)
53,000 Higashi Nihon House ....... 2,958,026
(Housing)
200,000 Kamigumi Co., Ltd. ........ 2,269,373
(Transportation &
warehousing)
</TABLE>
-3- See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Japan--(cont'd.)
47,000 Kyocera Ltd. .............. $ 2,666,513
(Public works-electronics)
170,000 Mitsui Fudosan Co., Ltd. 2,054,428
.........................
(Real estate)
111,000 Mitsui Home Co. ........... 2,191,328
(Housing)
75,000 Mr. Max Corp. ............. 2,075,646
(Merchandising)
150,000 Murata Manufacturing Co., 5,272,140
Ltd. ....................
(Electronic components)
40,000 Namco ..................... 1,014,760
(Recreation & other
consumer goods)
41,000 Nissen Co., Ltd. .......... 1,758,764
(Merchandising)
355,000 Ricoh Corp., Ltd. ......... 2,344,834
(Data processing &
reproduction)
73,200 Sega Enterprises, Ltd. .... 6,118,007
(Recreation & other ------------
consumer goods)
38,732,767
------------
Korea--2.5%
2,000 Daewoo Securities Co., Ltd. 51,241
.........................
(Financial services)
23,843 Dong-Ah Construction Co. 424,951
(New) ...................
(Housing)
123,090 Dong-Ah Construction Co. 3,336,433
(Old) ...................
(Housing)
60,000 Kun Young Construction Corp. 995,111
.........................
(Housing)
1,326 Samsung Electronics (New)* 42,999
.........................
(Electronics)
46,383 Samsung Electronics (Old) 2,365,220
......................... ------------
(Electronics)
7,215,955
------------
Malaysia--12.7%
100,000 Aokam Perdana Berhad ...... $ 1,134,541
(Forest products & paper)
533,000 Arab-Malaysian Finance 2,074,782
Berhad* .................
(Banking)
79,000 Arab Malaysian Merchant Bank 233,344
Berhad .
(Banking)
1,000,000 Bedford Berhad ............ 2,073,471
(Real estate)
417,000 Granite Industries Berhad* 2,349,204
.........................
(Leisure)
2,400,000 IJM Corp. Berhad .......... 4,600,757
(Construction & housing)
514,000 Kedah Cement Holdings ..... 840,546
(Building materials &
components)
1,687,500 Magnum Corp. Berhad ....... 4,159,168
(Leisure & tourism)
2,631,000 Pilecon Engineering Berhad 4,693,617
.........................
(Machinery & engineering)
2,962,000 Renong Berhad* ............ 4,148,491
(Infrastructure)
1,192,000 Resorts World ............. 6,528,696
(Leisure & tourism)
1,000,000 Tech Resources Industries 4,420,797
Berhad* ------------
(Data processing &
reproduction)
37,257,414
------------
Mexico--3.2%
385,000 Apasco, S.A.* ............. 2,591,287
(Building materials &
components)
310,000 Banacci* .................. 1,913,030
(Banking)
</TABLE>
-4- See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Mexico--(cont'd.)
860,000 Cifra, S.A. de C.V.* ...... $ 2,166,843
(Merchandising)
530,000 Fomento Economico Mexicano,
S.A.
de C.V.* ..................
(Merchandising)
2,728,377
------------
9,399,537
------------
Netherlands--1.9%
223,700 Royal Boskalis Westminster 5,561,144
N.V. .................... ------------
(Construction & housing)
Singapore--7.5%
1,637,000 Kim Eng Holdings .......... 3,487,588
(Financial services)
1,020,250 Sembawang Maritime, Ltd. 4,823,117
.........................
(Transportation)
789,000 Sembawang Maritime, Ltd.
Convertible unsecured loan 1,243,302
stock ....................
(Transportation)
395,000 Sembawang Shipyard, Ltd. 3,286,479
.........................
(Machinery & engineering)
440,000 Singapore Airlines, Ltd. 3,439,017
.........................
(Transportation)
2,250,000 Wing Tai Holdings ......... 5,616,135
(Multi-industry) ------------
21,895,638
------------
Spain--2.2%
159,962 Centros Commerciale (Pryca) 1,700,967
.........................
(Merchandising)
123,200 Dragados y Construcciones 1,958,236
.........................
(Construction & housing)
149,900 Vallehermoso .............. 2,765,847
(Real estate) ------------
6,425,050
------------
Sweden--2.3%
156,000 Astra B Free .............. 3,320,448
(Health & personal care)
114,000 Hennes & Mauritz B Free ... $ 3,416,597
(Merchandising) ------------
6,737,045
------------
Thailand--0.9%
140,000 Land & House Public Co., 2,541,436
Ltd.* ................... ------------
(Housing)
United Kingdom--7.0%
290,000 Barclays Bank PLC ......... 2,440,332
(Banking)
276,000 BAT Industries PLC ........ 2,036,297
(Multi-industry)
175,000 Carlton Communications PLC 1,983,363
.........................
(Television &
communication equipment)
272,000 Guest Keen & Nettlefolds 1,926,191
.........................
(Automotive)
308,571 Kingfisher PLC ............ 3,000,040
(Merchandising)
235,000 S.G. Warburg Group PLC .... 3,220,418
(Financial services)
325,000 Siebe PLC ................. 2,638,557
(Machinery & engineering)
397,230 Vodafone Group ............ 3,242,621
(Telecommunications) ------------
20,487,819
------------
United States--13.3%
92,000 Adaptec, Inc.* ............ 3,317,750
(Electronics/semiconductors)
45,000 Avon Products (Rights) .... 2,272,500
(Health & personal care)
120,000 Cirrus Logic Corp.* ....... 4,185,000
(Electronics/semiconductors)
10,400 General Electric Co. ...... 1,008,800
(Electronics)
43,200 Intel Corp. ............... 2,737,800
(Electronics/semiconductors)
</TABLE>
-5- See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
United States--(cont'd.)
112,500 Mattel, Inc. .............. $ 3,262,500
(Recreation & other
consumer goods)
16,400 Microsoft Corp.* .......... 1,314,050
(Computer services)
35,000 Mobil Corp. (Rights) ...... 2,852,500
(Energy sources)
35,600 Motorola, Inc. ............ 3,729,100
(Television & electronics)
37,900 Nationsbank Corp. ......... 1,767,087
(Banking)
60,000 Norwest Corp. ............. 1,545,000
(Banking)
50,000 Novell, Inc.* ............. 1,078,125
(Electronics)
54,000 Society Corp. ............. 1,545,750
(Banking)
83,600 Southern Pacific Rail Corp.* 1,494,350
.........................
(Transportation)
100,000 Time Warner, Inc. ......... 4,475,000
(Broadcasting &
publishing)
46,500 U.S. West, Inc. ........... 2,330,812
(Telecommunications) ------------
38,916,124
------------
Total common stocks
(cost US$184,492,411)..... 245,938,743
------------
Warrants*--2.7%
Federal Republic Of Germany--0.1%
276 Commerzbank AG.............. 208,843
Warrants expiring July '05 @ ------------
DM300
(Banking)
France--0.1%
3,500 La Farge Coppee............. $ 256,336
Warrants expiring April '96 ------------
@ FF460
(Building materials &
components)
Japan--1.3%
50 Autobacs Seven Co........... 193,125
Warrants expiring Feb. '95
@ Y=8,089
(Merchandising)
400 Autobacs Seven Co........... 1,475,000
Warrants expiring Mar. '96
@ Y=8,231.10
(Merchandising)
1,000 Kamigumi Co., Ltd........... 287,834
Warrants expiring Sept. '96
@ Y=1,079
(Transportation &
warehousing)
1,900 Mr. Max Corp................ 473,591
Warrants expiring July '95
@ Y=2,194.40
(Merchandising)
1,136 Nissen Co., Ltd............. 1,415,786
Warrants expiring Nov. '96 ------------
@ Y=1,681
(Merchandising)
3,845,336
------------
Singapore--1.2%
1,076,000 United Overseas Bank, 3,662,401
Ltd.*..................... ------------
Warrants expiring Nov. '94
@ SGD3.16
(Banking)
Total warrants
(cost US$3,994,534)....... 7,972,916
------------
</TABLE>
-6- See Notes to Financial Statements.
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<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Preferred Stocks--5.1%
Federal Republic of Germany--0.9%
1,600 Krones...................... $ 2,544,807
(Machinery & engineering) ------------
Finland--2.5%
132,200 Nokia Corp.*................ 7,292,976
(Television & electronics) ------------
Korea--1.7%
70,000 Daewoo Securities Co., Ltd.* 1,689,461
.........................
(Financial services)
45,000 Daishin Securities Co. .... 941,271
(Financial services)
63,700 Mando Machinery Corp........ 2,310,056
(Automotive parts) ------------
4,940,788
------------
Total preferred stocks
(cost US$10,714,688)........ 14,778,571
------------
<CAPTION>
Principal
Amount
(000) Convertible Bonds--2.7%
- ---------
<C> <S> <C>
France
Societe Generale
FF 820 3.50%, 1/1/00 ............. 111,215
(Banking) ------------
Japan--1.5%
Capcom, Ltd.
Y=299,000 3.90%, 9/30/96 ............ 4,275,368
(Recreation & other ------------
consumer goods)
Korea--0.9%
USD1,470 Samsung Electronics
3.75%, 12/31/07 ...........
(Electronics)
$ 2,763,600
------------
Thailand--0.3%
USD 600 Land & House Public Co.,
Ltd.
5.00%, 4/29/03 ............
(Housing)
843,000
------------
Total convertible bonds
(cost US$6,255,282)....... 7,993,183
------------
Total long-term investments
(cost US$205,456,915).....
276,683,413
------------
SHORT-TERM INVESTMENTS--4.2%
Repurchase Agreement
Joint Repurchase Agreement Account,
$12,337 2.93%, 11/1/93
(cost US$12,337,000; Note 12,337,000
5)........................
------------
Total Investments--98.6%
(cost US$217,793,915; Note
4)........................ 289,020,413
Other assets in excess
of liabilities--1.4%...... 4,133,814
------------
Net Assets--100%............ $293,154,227
------------
------------
</TABLE>
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*Non-income producing security.
-7- See Notes to Financial Statements.
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PRUDENTIAL GLOBAL FUND, INC.
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets
October 31, 1993
----------------
<S> <C>
Investments, at value (cost $217,793,915)................................................. $289,020,413
Foreign currency, at value (cost $1,610,156).............................................. 1,589,147
Cash...................................................................................... 680,353
Receivable for Fund shares sold........................................................... 7,090,863
Receivable for investments sold........................................................... 1,479,478
Dividends and interest receivable......................................................... 500,785
Deferred expenses and other assets........................................................ 8,129
----------------
Total assets........................................................................ 300,369,168
----------------
Liabilities
Payable for investments purchased......................................................... 5,937,596
Payable for Fund shares reacquired........................................................ 508,240
Accrued expenses.......................................................................... 378,990
Due to Distributors....................................................................... 188,621
Due to Manager............................................................................ 174,837
Withholding taxes payable................................................................. 26,657
----------------
Total liabilities................................................................... 7,214,941
----------------
Net Assets................................................................................ $293,154,227
----------------
----------------
Net assets were comprised of:
Common stock, at par.................................................................... $ 225,923
Paid-in capital in excess of par........................................................ 230,506,276
----------------
230,732,199
Undistributed net investment income..................................................... 2,750,711
Accumulated net realized loss on investment and foreign currency transactions........... (11,500,429)
Net unrealized appreciation on investments and foreign currencies....................... 71,171,746
----------------
Net assets, October 31, 1993............................................................ $293,154,227
----------------
----------------
Class A:
Net asset value and redemption price per share ($42,020,875 / 3,190,724 shares of
common stock issued andoutstanding)....................................................... $13.17
Maximum sales charge (5.25% of offering price).......................................... .73
----------------
Maximum offering price to public........................................................ $13.90
----------------
----------------
Class B:
Net asset value, offering price and redemption price per share ($251,133,352 /
19,401,536 shares of common stock issued and outstanding)............................. $12.94
----------------
----------------
</TABLE>
See Notes to Financial Statements.
-8-
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PRUDENTIAL GLOBAL FUND, INC.
Statement of Operations
<TABLE>
<CAPTION>
Net Investment Income Year Ended
October 31,
1993
-----------
<S> <C>
Income
Dividends (net of foreign
withholding taxes of $294,359)... $ 3,288,939
Interest (net of foreign
withholding taxes of $6,434)..... 479,039
-----------
Total income..................... 3,767,978
-----------
Expenses
Distribution fee--Class A.......... 42,818
Distribution fee--Class B.......... 1,609,543
Management fee..................... 1,538,624
Transfer agent's fees and
expenses........................... 617,000
Custodian's fees and expenses...... 382,000
Directors' fees.................... 88,000
Audit fee.......................... 50,000
Registration fees.................. 41,000
Reports to shareholders............ 30,000
Legal fees......................... 22,000
Insurance expense.................. 6,100
Miscellaneous...................... 10,870
-----------
Total operating expenses......... 4,437,955
-----------
Net investment loss.................. (669,977)
-----------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions............ 12,614,934
Foreign currency transactions...... (453,947)
-----------
12,160,987
-----------
Net change in unrealized appreciation
on:
Investments........................ 55,661,915
Foreign currencies................. 327,849
-----------
55,989,764
-----------
Net gain on investments and foreign
currencies......................... 68,150,751
-----------
Net Increase in Net Assets
Resulting from Operations............ $67,480,774
-----------
-----------
</TABLE>
PRUDENTIAL GLOBAL FUND, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
Increase (Decrease) in ------------------------------
Net Assets 1993 1992
------------- -------------
<S> <C> <C>
Operations
Net investment loss.... $ (669,977) $ (958,626)
Net realized gain
(loss) on investment
and foreign currency
transactions......... 12,160,987 (3,775,768)
Net change in
unrealized
appreciation/depreciation
of investments and
foreign currencies... 55,989,764 (8,705,423)
------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 67,480,774 (13,439,817)
------------- -------------
Net equalization credits
(debits)............... 134,235 (162,632)
------------- -------------
Fund share transactions
(Note 6)
Net proceeds from
shares subscribed.... 153,827,341 83,542,120
Cost of shares
reacquired............. (120,699,004) (141,264,598)
------------- -------------
Net increase (decrease)
in net assets from
Fund share
transactions......... 33,128,337 (57,722,478)
------------- -------------
Total increase
(decrease)............. 100,743,346 (71,324,927)
Net Assets
Beginning of year........ 192,410,881 263,735,808
------------- -------------
End of year.............. $ 293,154,227 $ 192,410,881
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
-9-
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<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
Notes to Financial Statements
Prudential Global Fund, Inc. (the ``Fund'') is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The investment objective of the Fund is to seek long-term capital
growth, with income as a secondary objective, by investing in a diversified
portfolio of securities consisting of marketable securities of U.S. and non-U.S.
issuers.
Note 1. Accounting The following is a summary
Policies of significant accounting
policies followed by the Fund in the preparation
of its financial statements.
Securities Valuation: Securities traded on an exchange (whether domestic or
foreign) are valued at the last reported sales price on the primary exchange on
which they are traded. Securities traded in the over-the-counter market
(including securities listed on exchanges for which a last sales price is not
available) are valued at the average of the last reported bid and asked prices.
Short-term securities which mature in more than 60 days are valued based upon
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian takes possession of the
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction including accrued interest. If the seller
defaults and the value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at
the closing daily rate of exchange as reported by a major bank;
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal year, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at fiscal year end. Similarly, the Fund does
not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the fiscal year.
Net realized losses on foreign currency transactions of $453,947 represent
net foreign exchange gains or losses from sales and maturities of short-term
securities, holding of foreign currencies, currency gains or losses realized
between the trade and settlement dates on security transactions, and the
difference between the amounts of dividends, interest and foreign taxes recorded
on the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net currency gains and losses from valuing foreign currency denominated
assets and liabilities (other than investments) at year end exchange rates are
reflected as a component of unrealized appreciation on foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
currency transactions are calculated on the identified cost basis. Dividend
income is recorded on the ex-dividend date, and interest income is recorded on
an accrual basis.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares of the Fund
based upon the relative proportion of net assets of each class at the beginning
of the day.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income
-10-
<PAGE>
<PAGE>
per share is unaffected by sales or reacquisitions of the Fund's shares.
Reclassification of Capital Accounts: Effective November 1, 1992, the Fund began
accounting and reporting for distributions to shareholders in accordance with
Statement of Position 93-2: Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions by
Investment Companies. As a result of this statement, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. The effect caused by adopting this
statement was to decrease paid-in capital by $2,292,122, increase undistributed
net investment income by $2,681,567 and decrease accumulated net realized losses
on investments by $389,445 with respect to amounts reported through October 31,
1993. Net investment income, net realized gains and net assets were not affected
by this change.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital and currency gains, if any,
annually. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign withholding taxes.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends and interest have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Note 2. Agreements The Fund has a manage
ment agreement with Prudential Mutual Fund
Management, Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility
for all investment advisory services and supervises the subadviser's performance
of such services. PMF has entered into a subadvisory agreement with The
Prudential Investment Corporation (``PIC''); PIC furnishes investment advisory
services in connection with the management of the Fund. PMF pays for the cost of
the subadviser's services, the compensation of officers of the Fund, occupancy
and certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.
The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .75 of 1% of the average daily net assets of the Fund.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated (``PSI''), which
acts as distributor of the Class B shares of the Fund (collectively the
``Distributors''). To reimburse the Distributors for their expenses incurred in
distributing and servicing the Fund's Class A and B shares, the Fund, pursuant
to plans of distribution, pays the Distributors a reimbursement, accrued daily
and payable monthly.
Pursuant to the Class A plan, the Fund reimburses PMFD for its expenses with
respect to Class A shares at an annual rate of up to .30 of 1% of the average
daily net assets of the Class A shares. Such expenses under the Class A Plan
were .20 of 1% of the average daily net assets of the Class A shares for the
fiscal year ended October 31, 1993. PMFD pays various broker-dealers, including
PSI and Pruco Securities Corporation (``Prusec''), affiliated broker-dealers,
for account servicing fees and other expenses incurred by such broker-dealers.
Pursuant to the Class B plan, the Fund reimburses PSI for its
distribution-related expenses with respect to the Class B shares at an annual
rate of up to .75 of 1% of the average daily net assets up to the level of
average daily net assets as of February 26, 1986, plus 1% of the average daily
net assets in excess of such level.
The Class B distribution expenses include commission credits for payments of
commissions and account servicing fees to financial advisers and an allocation
for overhead and other distribution-related expenses, interest and/or carrying
charges, the cost of printing and mailing prospectuses to potential investors
and of advertising incurred in connection with the distribution of shares.
The Distributors recover the distribution expenses and account servicing fees
incurred through the receipt of reimbursement payments from the Fund under the
plans and receipt of initial sales charges (Class A only) and contingent
deferred sales charges (Class B only) from shareholders.
PMFD has advised the Fund that it has received approximately $220,700 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year
-11-
<PAGE>
<PAGE>
ended October 31, 1993. From these fees, PMFD paid such sales charges to dealers
(PSI and Prusec) which in turn paid commissions to salespersons.
With respect to the Class B Plan, at any given time, the amount of expenses
incurred by PSI in distributing the Fund's shares and not recovered through the
imposition of contingent deferred sales charges in connection with certain
redemptions of shares may exceed the total payments made by the Fund pursuant to
the Class B Plan. PSI has advised the Fund that for the fiscal year ended
October 31, 1993, that it received approximately $290,200 in contingent deferred
sales charges imposed upon certain redemptions by investors. PSI, as
distributor, has also advised the Fund that at October 31, 1993, the amount of
distribution expenses incurred by PSI and not yet reimbursed by the Fund or
recovered through contingent deferred sales charges approximated $11,678,000.
This amount may be recovered through future payments under the Class B Plan or
contingent deferred sales charges.
In the event of termination or noncontinuation of the Class B Plan, the Fund
would not be contractually obligated to pay PSI, as distributor, for any
expenses not previously reimbursed or recovered through contingent deferred
sales charges.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund
Transactions Services, Inc. (``PMFS''), a
With Affiliates wholly owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the fiscal year ended October 31, 1993, the Fund incurred fees of
approximately $520,000 for the services of PMFS. As of October 31, 1993,
approximately $44,000 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to non-affiliates.
Note 4. Portfolio Purchases and sales of
Securities investment securities, other
than short-term investments, for the fiscal year
ended October 31, 1993 were $162,876,729 and $137,928,274, respectively.
The United States federal income tax basis of the Fund's investments is
substantially the same as for financial reporting purposes and, accordingly, as
of October 31, 1993 net unrealized appreciation for federal income tax purposes
was $71,226,498 (gross unrealized appreciation--$77,167,676; gross unrealized
depreciation-- $5,941,178).
For federal income tax purposes, the Fund has a capital loss carryforward as
of October 31, 1993 of approximately $11,527,100 of which $1,370,900 expires in
1998 and $6,017,600 expires in 1999 and $4,138,600 expires in 2000. During the
fiscal year ended October 31, 1993 the Fund utilized approximately $12,614,900
of its capital loss carryforward. Accordingly, no capital gains distribution is
expected to be paid to shareholders until net gains have been realized in excess
of such carryforward.
Note 5. Joint The Fund, along with other
Repurchase affiliated registered invest
Agreement ment companies, transfers
Account uninvested cash balances
into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or Federal agency obligations. As of October 31, 1993, the Fund
has a 0.9% undivided interest in the repurchase agreements in the joint account.
The undivided interest for the Fund represents $12,337,000 in the principal
amount. As of such date, each repurchase agreement in the joint account and the
collateral therefor were as follows:
CS First Boston Corp., 2.93%, in the principal amount of $360,000,000,
repurchase price $360,087,900, due 11/1/93, collateralized by $47,400,000 U.S.
Treasury Notes, 6.75%, due 2/28/97; $40,000,000 U.S. Treasury Notes, 11.25%, due
2/15/95; $100,000,000 U.S. Treasury Bonds, 7.50%, due 11/15/16; $50,000,000 U.S.
Treasury Bonds, 10.375%, due 11/15/12 and $50,000,000 U.S. Treasury Bonds,
12.00%, due 5/15/05; aggregate value including accrued interest-- $368,368,052.
Goldman Sachs & Co., 2.93%, in the principal amount of $450,154,000,
repurchase price $450,263,913, due 11/1/93, collateralized by $104,915,000 U.S.
Treasury Bonds, 12.00%, due 8/15/13 and $200,000,000 U.S. Treasury Bonds,
10.75%, due 8/15/05; aggregate value including accrued interest--$462,739,932.
Kidder, Peabody & Co. Inc., 2.95%, in the principal amount of $305,000,000,
repurchase price $305,074,979, due 11/1/93, collateralized by $210,030,000 U.S.
Treasury Bonds, 9.875%, due 11/15/15; value including accrued
interest--$311,527,136.
Nomura Securities International, Inc., 2.90%, in the principal amount of
$60,889,000, repurchase price
-12-
<PAGE>
<PAGE>
$60,903,715, due 11/1/93, collateralized by $8,280,000 U.S. Treasury Notes,
7.75%, due 2/15/95; $25,000,000 U.S. Treasury Notes, 7.375%, due 5/15/96 and
$22,775,000 U.S. Treasury Notes, 8.875%, due 2/15/96; aggregate value including
accrued interest--$62,140,276.
Smith Barney Shearson, Inc., 2.94%, in the principal amount of $175,000,000,
repurchase price $175,042,875, due 11/1/93, collateralized by $4,465,000 U.S.
Treasury Bonds, 12.00%, due 5/15/05; $11,435,000 U.S. Treasury Notes, 9.125%,
due 5/15/99; $75,000,000 U.S. Treasury Bonds, 8.125%, due 8/15/19 and
$50,000,000 U.S. Treasury Bonds, 8.00%, due 11/15/21; aggregate value including
accrued interest--$178,771,706.
Note 6. Capital The Fund offers both Class
A and Class B shares. Class A shares are sold with
a front-end sales charge of up to 5.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Both classes of shares have equal rights as
to earnings, assets and voting privileges except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. There are 500 million shares of common stock, $.01 par value
per share, divided into two classes, designated Class A and Class B common
stock, each of which consists of 250 million authorized shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- ------------
<S> <C> <C>
Year ended October 31, 1993:
Shares sold................... 7,605,778 $ 81,814,374
Shares reacquired............. (5,873,417) (61,680,363)
---------- ------------
Net increase in shares
outstanding................. 1,732,361 $ 20,134,011
---------- ------------
---------- ------------
Year ended October 31, 1992:
Shares sold................... 5,694,636 $ 55,067,359
Shares reacquired............. (5,640,760) (54,729,390)
---------- ------------
Net increase in shares
outstanding................. 53,876 $ 337,969
---------- ------------
---------- ------------
<CAPTION>
Class B
- ------------------------------
<S> <C> <C>
Year ended October 31, 1993:
Shares sold................... 6,320,592 $ 72,012,967
Shares reacquired............. (5,752,085) (59,018,641)
---------- ------------
Net increase in shares
outstanding................. 568,507 $ 12,994,326
---------- ------------
---------- ------------
Year ended October 31, 1992:
Shares sold................... 2,945,501 $ 28,474,761
Shares reacquired............. (8,948,802) (86,535,208)
---------- ------------
Net decrease in shares
outstanding................. (6,003,301) $(58,060,447)
<CAPTION>
---------- ------------
---------- ------------
</TABLE>
-13-
<PAGE>
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
Class A
--------------------------------------------- Class B
January 22, ------------------------------------------------------
1990@
Year Ended October 31, through Year Ended October 31,
PER SHARE OPERATING ------------------------------ October 31, ------------------------------------------------------
PERFORMANCE (1): 1993 1992 1991 1990 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------- ------- ------- ------------ ---------- -------- -------- -------- --------
Net asset value,
beginning of period.... $ 9.58 $ 10.08 $ 9.19 $10.38 $ 9.47 $ 10.05 $ 9.14 $ 10.46 $ 10.09
---------- ------- ------- ------ ---------- -------- -------- -------- --------
Income from investment
operations
Net investment income
(loss)................. .02 .03 .07 .12 (.04) (.05) -- .05 .15
Net realized and
unrealized gain (loss)
on investment and
foreign currency
transactions........... 3.57 (.53) 1.02 (1.31) 3.51 (.53) 1.02 (1.10) .53
---------- ------- ------- ------ ---------- -------- -------- -------- --------
Total from investment
operations............. 3.59 (.50) 1.09 (1.19) 3.47 (.58) 1.02 (1.05) .68
Less distributions
Dividends from net
investment income...... -- -- (.16) -- -- -- (.07) (.18) (.19)
Distributions paid to
shareholders from net
realized gains on
investment and foreign
currency
transactions........... -- -- (.04) -- -- -- (.04) (.09) (.12)
---------- ------- ------- ------ ---------- -------- -------- -------- --------
Total distributions.... -- -- (.20) -- -- -- (.11) (.27) (.31)
---------- ------- ------- ------ ---------- -------- -------- -------- --------
Net asset value, end of
period................. $ 13.17 $ 9.58 $ 10.08 $ 9.19 $ 12.94 $ 9.47 $ 10.05 $ 9.14 $ 10.46
---------- ------- ------- ------ ---------- -------- -------- -------- --------
---------- ------- ------- ------ ---------- -------- -------- -------- --------
TOTAL RETURN#:........... 37.47% (4.96)% 12.11% (11.46)% 36.64% (5.77)% 11.29% (10.43)% 6.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).................. $ 42,021 $13,973 $14,154 $8,727 $ 251,133 $178,438 $249,582 $261,555 $385,578
Average net assets
(000).................. $ 21,409 $14,758 $10,593 $7,151 $ 183,741 $210,464 $253,866 $328,467 $448,737
Ratios to average net
assets:
Expenses, including
distribution fees.... 1.56% 1.71% 1.72% 1.57%* 2.24% 2.40% 2.44% 2.23% 1.82%
Expenses, excluding
distribution fees.... 1.36% 1.51% 1.52% 1.37%* 1.36% 1.51% 1.53% 1.37% 1.34%
Net investment
income/loss............ 0.20% 0.22% 0.65% 1.61%* (0.39)% (0.47)% (0.01)% 0.51% 1.45%
Portfolio turnover
rate................... 69% 58% 126% 35% 69% 58% 126% 35% 60%
</TABLE>
- ---------------
* Annualized.
@ Commencement of offering of Class A shares.
(1) Based on average shares outstanding, by class.
# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of dividends
and distributions. Total returns for periods of are not annualized.
See Notes to Financial Statements.
-14-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
Prudential Global Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Prudential Global Fund, Inc., including the portfolio of investments, as of
October 31, 1993, the related statements of operations for the year then ended
and 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 the securities owned as of
October 31, 1993 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential Global
Fund, Inc. as of October 31, 1993, the results of its operations, the changes in
its net assets and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche
New York, New York
December 15, 1993
-15-
<PAGE>
<PAGE>
Past performance is not predictive of future performance and an investor's
shares may be worth more or less than their original cost.
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in Prudential Global Fund (Class A and Class B)
with a similar investment in the Morgan Stanley Capital International ``World''
Index (World Index) by portraying the initial account values at the commencement
of operations of each class and subsequent account values at the end of each
fiscal year (October 31), as measured on a quarterly basis, beginning in 1990
for Class A shares and in 1984 for Class B shares. For purposes of the graphs
and, unless otherwise indicated, the accompanying tables, it has been assumed
that (a) the maximum sales charge was deducted from the initial $10,000
investment in Class A shares; (b) the maximum applicable contingent deferred
sales charge was deducted from the value of the investment in Class B shares
assuming full redemption on October 31, 1993; (c) all recurring fees (including
management fees) were deducted; and (d) all dividends and distributions were
reinvested.
The World Index is a weighted index comprised of approximately 1500 companies
listed on the stock exchanges of the U.S.A., Europe, Canada, Australia, New
Zealand and the Far East. The combined market capitalization of these companies
represents approximately 60% of the aggregate market value of the stock
exchanges in the countries comprising the World Index. The World Index is an
unmanaged index and includes the reinvestment of all dividends, but does not
reflect the payment of transaction costs and advisory fees associated with an
investment in the Fund. The securities which comprise the World Index may differ
substantially from the securities in the Fund's portfolio. The World Index is
not the only index which may be used to characterize performance of global funds
and other indexes may portray different comparative performance.
-16-
<PAGE>
<PAGE>
Directors
Stephen C. Eyre
Delayne D. Gold
Don G. Hoff
Harry A. Jacobs, Jr.
Sidney R. Knafel
Robert E. La Blanc
Lawrence C. McQuade
Thomas A. Owens, Jr.
Richard A. Redeker
Clay T. Whitehead
Officers
Lawrence C. McQuade, President
David W. Drasnin, Vice President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Domenick Pugliese, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Deloitte & Touche
1633 Broadway
New York, NY 10019
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852
Collect (908) 417-7555
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
744332107 MF115E
744332206 Cat #44014AY
<PAGE>
<PAGE>
I. Prudential Global Fund
Chart entitled Prudential Mutual Funds: Risk/Reward Spectrum.
The chart shows a graphic representation of the spectrum of risks
of various categories of Prudential Mutual Funds including stock
funds, tax-exempt bond funds, taxable bond funds and global taxable
bond funds. The chart rates the risk of individual Prudential
Mutual Funds relative to other Prudential Mutual Funds in each
category.
Under the category of stock funds, the chart lists from low risk to
high risk the following funds (beginning at the low end of the
spectrum):
FlexiFund (The Conservatively Managed Portfolio)
IncomeVertible Fund
FlexiFund (The Strategy Portfolio)
Equity Income Fund
Utility Fund
Global Utility Fund
Equity Fund
Growth Fund
Global Fund
Nicholas-Applegate Growth Equity Fund
Growth Opportunity Fund
Multi-Sector Fund
Global Natural Resources Fund
Global Genesis Fund
Pacific Growth Fund
Under the category of tax-exempt bond funds, the chart lists from
low risk to high risk the following funds (beginning at the low end
of the spectrum):
Municipal Bond Fund (Modified Term Series)
Municipal Bond Fund (Insured Series)
National Municipals Fund
Municipal Series Fund (State Series Fund)
California Municipal Fund (California Income Series)
Municipal Bond Fund (High Yield Series)
Under the category of taxable bond funds, the chart lists from low
risk to high risk the following funds (beginning at the low end of
the spectrum):
Adjustable Rate Securities Fund
The BlackRock Government Income Fund
Structured Maturity Fund (Income Portfolio)
Government Securities Trust (Intermediate Term Series)
GNMA Fund
Government Plus Fund
U.S. Government Fund
High Yield Fund
Under the category of global taxable bond funds, the chart lists
from low risk to high risk the following funds (beginning at the
low end of the spectrum):
Short-Term Global Income Fund (Global Assets Portfolio)
Short-Term Global Income Fund (Short-Term Global Income
Portfolio)
Intermediate Global Income Fund
<PAGE>
<PAGE>
II. Prudential Global Fund
Performance Charts
A. Historical Investment Results
The chart shows comparative historical investment results for the
one-year, five-year and since inception periods ended October 31,
1993 for the Class A shares of the Fund, the Class B shares of the
Fund, the Lipper Global Fund Average and the Morgan Stanley Capital
International World Index, without taking into account front-end or
contingent deferred sales charges.
B. Average Annual Total Returns
The chart also shows the average annual total returns for the one-
year, five-year and since inception periods ended September 30,
1993 for Class A and Class B shares taking into account any
applicable sales charges.
<PAGE>
<PAGE>
III. Prudential Global Fund
Mountain Charts
Two mountain charts show the growth of an assumed investment
of $10,000 in Prudential Global Fund. The charts represent
historical performance and are not a guarantee of future
performance of Class A shares or Class B shares.
A. Class A shares
The chart shows the growth of a $10,000 investment in Class A
shares from inception on January 22, 1990 through September 30,
1993, and assumes a front-end sales charge of 5.25%. The chart
shows the value of the investment as of September 30, 1993 (i) with
the reinvestment of dividends and distributions in additional
shares of the Fund and (ii) with all dividends and distributions
taken in cash.
B. Class B shares
The chart shows the growth of a $10,000 investment in Class B
shares from inception on May 16, 1984 through September 30, 1993,
and does not assume the effect of a contingent deferred sales
charge on redemptions. The chart shows the value of the investment
as of September 30, 1993 (i) with the reinvestment of dividends and
distributions in additional shares of the Fund and (ii) with all
dividends and distributions taken in cash.
<PAGE>
<PAGE>
IV. Prudential Global Fund
Asset Allocation Pie Chart
The chart shows asset allocation by country as a percentage of
the Fund's net assets as of October 31, 1993. As of that date,
35.1% of the Fund's net assets were invested in the Pacific Basin,
3.2% in Mexico, 7.0% in the United Kingdom, 13.3% in the United
States, 2.4% in Australia, 16.0% in Japan, 17.4% in Europe and 5.6%
was held in cash.
<PAGE>
<PAGE>
V. Prudential Global Fund
SEC Required Charts
The following two charts compare a $10,000 investment in Class
A shares and Class B shares, with a similar investment in the
Morgan Stanley Capital International World Index. Included in the
charts are the average annual total returns for each Class for the
one-year, five-year and since inception periods with and without
sales charges.
