Letter to Shareholders
December 15, 1994
Dear Shareholder:
International investors have enjoyed moderate returns this year as most
of the world's economies began to shrug off the effects of the global
recession that marked the beginning of the decade. Of course, economic
growth has been followed by generally rising rates around the world.
This held back stock returns in the U.S., which in turn dampened stock
market activity on most of the world's financial exchanges. We're pleased
to report that the Prudential Global Fund Inc. has racked up
some gains this year and our investors have achieved above-average total
returns.
The Fund's Objective
The Prudential Global Fund seeks long-term capital growth with income as
a secondary objective. It invests primarily in a diversified portfolio of
U.S. and foreign stocks, as well as bonds. Since it invests globally, the
Fund is subject to all the risks associated with foreign investing, including
currency, political and social risks. The Fund occasionally uses derivatives
like options and futures to hedge currency risk.
FUND PERFORMANCE
<TABLE>
<CAPTION>
Cumulative Total Returns Average Annual Returns1
As of 10/31/94 As of 9/30/94
Since Since
1-Yr. 5-Yr. 10-Yr. Incep.* 1-Yr. 5-Yr. 10-Yr. Incep.*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A 13.1% N/A N/A 46.6% 10.0% N/A N/A 6.7%
Class B 12.3 44.1% 278.4% 295.8 9.9 6.0% 13.9% 13.9
Class C N/A N/A N/A 3.6 N/A N/A N/A N/A
Lipper
Global
Avg.** 8.1 51.0 305.2 325.3(D) N/A N/A N/A N/A
</TABLE>
Past performance is not indicative of future results. Principal and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
1 Source: Prudential Mutual Fund Management Inc. Cumulative total
returns do not take into account sales charges; average annual total
returns do take into account applicable sales charges. The Fund charges
a maximum front-end sales load of 5% for Class A shares and a contingent
deferred sales charge of 5%, 4%, 3%, 2%, 1% and 1% for six years, for Class
B shares. Beginning in February 1995, Class B shares will automatically
convert to Class A shares approximately seven years after
purchase. Class C shares are subject to a one year contingent deferred
sales charge of 1%. Class C average annual total returns are not reported
since the share Class has only been in existence since August.
*Inception dates: 1/22/90 Class A; 5/16/84 Class B; 8/3/94 Class C.
** These are the average returns of 86 funds in the global fund category
for one year, 25 funds for five years, 12 for 10 years and 10 since
inception of the Class B shares, as determined by Lipper Analytical
Services, Inc.
(D) Since 5/16/84
-1-
<PAGE>
The Market
Against a backdrop of expanding global economies, 1994 marks what appears
to be a lull in one of the strongest U.S. bull stock markets in many
decades. And Wall Street's woes have led to slow equity markets in some
parts of the world. Still, there's an underlying tone of confidence in
global earnings and growth and it's reflected in returns: the S&P 500 is
up a meager 3.6% through the end of October 1994, while the Morgan Stanley
Capital International index is up 9.3% for the same period.
Why are world stock market returns uneven while most economies are thriving?
The U.S. Federal Reserve, with one eye on growing gross domestic product and
the other on rising commodities prices (a historical precursor to inflation),
began in February to dampen growth by raising short-term interest rates. But
around the world, investors are not so much afraid of resurging inflation as
concerned that moves to stave it off may also crush the global economic
recovery. The U.S. stock market slumped on the news of rising U.S.
rates, and many exchanges followed suit. The news was slightly less
damaging in Europe, however, since valuations there remain exceptionally
low -- exactly opposite to the situation in the U.S
Although U.S. investors are fearful of inflation now, it remains at very
low levels -- below 3% in the U.S. In addition, the U.S. recovery appears
to be driven by productivity gains, not increased sales. That means wage
pressures may be held down indefinitely since workers are not going back
to high-salary jobs. The period of economic growth is likely to be longer
and less spectacular than some in the past, which in turn points to moderate
stock market gains.
What we did well...
In general, our growth investing style would not lend itself to spectacular
returns when interest rates are rising, but we made three good moves when we
decided to concentrate on Europe, U.S. technology firms and Korea. Here's why:
- --Europe. The European economy is clearly coming out of a long and deep
recession. While stock performance has been uneven, the countries of
continental Europe have outperformed eastern Europe (which we avoided
entirely during the reporting period) and the United Kingdom. We are
looking at a lot of discount retailers, technology firms and companies
that supply parts and equipment to Europe's big manufacturers. They should
benefit as individuals and businesses spend money in the
growing economy, as well as from a trend towards thrift and increased
productivity. Two companies that have done especially well are located
in Finland -- Nokia, which manufactures cellular telephones, and Kymmene,
the paper manufacturer.
-2-
<PAGE>
- --In the U.S., technology giants Motorola and Microsoft have performed well.
They have produced stellar results despite high price/earnings ratios, so
we're glad we didn't ignore them. One reason these companies have performed
well is that the global recovery is bringing with it a growing appetite for
technology. The U.S. embraced the technological revolution five years ago,
but the industrialized and developing countries of the world have a long way
to go before there's a computer in every office, much less every kitchen.
And even in the U.S. we see room for growth since ever-falling prices are
stimulating demand beyond what was predicted even two years ago.
- --In Korea, we are most pleased about our decision to own Samsung stock,
1.9% of the portfolio at fiscal year end. Once again, the boom in electronic
demand is behind this semi-conductor manufacturer's good performance. We also
continue to look in Korea for companies that will profit from ties to
China -- a market we believe may open up tremendously. But that's still
in the future, and hasn't been one of our real growth themes this year.
...And where we're looking for more growth
The global recovery has been accompanied by a growing demand for basic
materials, or commodities. So we began shifting a portion of the portfolio
that way earlier this year (to 11% on 11/30/94 from 3% a year ago), into
companies like Fletcher Challenge, a nickel producer in New Zealand, and
Western Mining, a nickel mine in Australia. These have already begun to
show results as the world's manufacturers step up their demand for raw
materials.
Interest rates are the barometer
Looking into the next 12 months, we plan to keep our eye on U.S.
interest rates. The world's stock markets probably won't start producing
healthy returns until interest rates settle into a comfortable new trading
range. In the meantime, we'll keep looking for basic goods producers and
hope that interest rates don't rise so high they choke off the global
recovery. If interest rates spike another percentage point higher, you
can expect us to buy more defensive stocks. But with growth
continuing at a moderate pace, we also feel confident that technology
stocks will be good performers for the foreseeable future, so they are
likely to form a big part of our strategy this year.
-3-
<PAGE>
In closing, we are realistic, but still optimistic. Despite weak
performance throughout much of this year, we believe there is an
underlying tone of confidence in the stock markets. The transition
from a disinflationary economy to one that is
more inflationary is bound to make the stock markets jumpy, but with
strong earnings growth, we expect to find more stability around the
bend. We're pleased you've chosen to weather this transition with us.
Sincerely,
Lawrence C. McQuade
President
Dan Duane
Portfolio Manager
-4-
<PAGE>
PORTFOLIO Q&A
(PICTURE)
Dan Duane
Talking With Dan Duane
Since the value of the U.S. dollar, compared to the currencies of other
countries, plays a role in returns, we talked with Dan about how the
markets are reacting to the weak U.S. dollar.
Q How does the weak U.S. dollar impact returns?
A. Generally, investors believe the dollar's movements have more impact
on total returns than they actually do. It's true that when the U.S.
dollar is weak, returns from stocks denominated in the foreign currency
are improved because it takes less yen, for instance, to buy a dollar.
Japan is the perfect example, because the dollar is weakest against this
currency. When we value our Japanese holdings every day, or when they pay
dividends or we take profits in them, we translate the yen value of our
holdings into U.S. dollars. If it now takes less yen to buy a dollar,
our dollar value automatically rises.
Q. What happens if the dollar starts rising?
A. We are looking for companies that will benefit from a rising dollar.
These are generally companies that have assets or revenue denominated in
dollars and costs denominated in a foreign currency. That steers us to
commodities, (metals, oil, gold, timber) since most are priced in dollars.
We do not invest directly in commodities. In addition, most technology and
telecommunications company revenues are in dollars. So companies from all
these sectors are important in our portfolio for two reasons -- because the
global recovery should stimulate demand for their products and because their
stocks are a good hedge against a rising dollar.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC. Portfolio of Investments
October 31, 1994
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Common Stocks--87.5%
Australia--6.9%
337,000 Brambles Industries, Ltd. $ 3,373,228
........................
(Business & public
services)
423,100 Broken Hill Proprietary
Co., Ltd. ............... 6,490,815
(Energy sources)
1,848,539 BTR Nylex, Ltd. .......... 3,280,593
(Industrial components)
983,751 Coca Cola Amatil, Ltd. ... 6,209,120
(Food & household
products)
1,365,000 Nine Network Australia, 4,115,139
Ltd. ...................
(Broadcasting &
Publishing)
1,627,325 Western Mining Corp. 10,138,230
Holdings, Ltd. ------------
(Non-ferrous metals)
33,607,125
------------
Belgium--0.7%
4,600 Bekaert S.A., N.V. ....... 3,566,526
(Industrial components) ------------
Federal Republic Of Germany--2.5%
20,000 BASF AG .................. 4,232,290
(Chemicals)
1,000 BASF AG, Dem50 (var) ..... 211,614
(Chemicals)
6,288 Bilfinger & Berger AG .... 3,549,189
(Construction & housing)
13,600 Preussag AG .............. 3,982,847
(Multi-industry) ------------
11,975,940
------------
Finland--1.0%
170,100 Kymmene Corp. ............ 4,650,163
(Forest products & paper) ------------
France--4.8%
7,000 Guyenne et Gascogne* ..... $ 1,889,320
(Merchandising)
40,900 Imetal S.A. .............. 4,367,960
(Miscellaneous materials
& commodities)
3,850 La Farge Coppee (New) .... 305,234
(Building materials &
components)
46,850 La Farge Coppee (Old) .... 3,714,340
(Building materials &
components)
4,300 Legrand S.A. ............. 5,761,165
(Electronics)
18,300 Plastic Omnium ........... 2,256,408
(Automotive)
90,800 Valeo .................... 4,927,884
(Automotive) ------------
23,222,311
------------
Hong Kong--4.8%
5,850,130 CDL Hotels International* 2,687,708
........................
(Real estate)
1,470,000 CITIC Pacific, Ltd. ...... 4,423,126
(Transportation)
1,680,000 Guoco Group, Ltd. ........ 7,935,809
(Financial services)
8,990,000 Hung Hing Printing Group, 1,942,964
Ltd. ...................
(General manufacturing)
1,378,000 Hutchison Whampoa, Ltd.* 6,366,585
........................ ------------
(Multi-industry)
23,356,192
------------
Indonesia--0.5%
1,734,000 Kabel Metal Industries, 2,495,824
Ltd.* .................. ------------
(Wire & cable)
</TABLE>
-6- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Japan--16.0%
104,000 Acom Co., Ltd. ........... $ 3,820,846
(Financial services)
199,000 Aiwa Co. ................. 5,421,672
(Consumer electronics)
7,100 Autobacs Seven Co. ....... 893,910
(Merchandising)
520 Ddi Corp. ................ 4,711,662
(Telecommunications)
33,000 Japan Associates Finance 4,869,969
Co. ....................
(Financial services)
367,000 Kamigumi Co., Ltd. ....... 4,014,654
(Transportation &
warehousing)
48,000 Keyence Corp. ............ 5,795,666
(Electronic components)
81,000 Kyocera Corp. ............ 6,169,040
(Public works -
electronics)
598,000 Minebea Co. .............. 5,190,072
(Industrial components)
86,500 Murata Manufacturing Co., 3,534,985
Ltd. ...................
(Electronic components)
101,800 Nichiei Co. .............. 6,566,047
(Financial services)
77,200 Nissen Co., Ltd. ......... 3,154,923
(Merchandising)
150,000 Nisshin Steel Company .... 788,980
(Metals)
129,000 Rohm Co., Ltd. ........... 5,657,895
(Financial services)
252,000 Shin-Etsu Chemical Co., 5,357,275
Ltd. ...................
(Chemicals)
84,300 Sony Corp. ............... 4,776,130
(Consumer goods)
105,000 Suzuki Motor Co., Ltd. ... 1,332,816
(Automotive)
169,000 Tokyo Electronic Co., Ltd. $ 5,650,773
........................ ------------
(Electronic components)
77,707,315
------------
Korea--2.1%
9,921 Daewoo Securities Co., 441,818
Ltd.* ..................
(Financial services)
9,102 Daishin Securities Co.* 203,244
........................
(Financial services)
6,700 Pohang Iron & Steel Co., 634,573
Ltd. ...................
(Metals)
49,722 Samsung Electronics (Old) 8,495,435
........................
(Electronics)
2,652 Samsung Electronics (New) 444,135
........................
(Electronics)
1,400 Shinsegae ................ 168,952
(Merchandising) ------------
10,388,157
------------
Malaysia--4.1%
631,600 Malaysian Helicopter ..... 1,557,065
(Transportation)
3,026,000 Renong Berhad ............ 4,736,450
(Infrastructure)
1,146,000 Resorts World ............ 7,264,802
(Leisure & tourism)
1,658,000 Technology Resources
Industries Berhad* ..... 6,455,526
(Data processing & ------------
reproduction)
20,013,843
------------
Mexico--3.4%
519,700 Apasco, S.A. ............. 4,840,046
(Building materials)
1,449,000 Cifra, S.A. de C.V. ...... 4,124,335
(Merchandising)
787,500 Fomento Economico Mexicano,
S.A. 3,460,782
de C.V.* ...............
(Merchandising)
</TABLE>
-7- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Mexico--(cont'd)
Grupo Financiero Banamex
Accival,
S.A. de C.V.
567,000 Class C (Old).............. $ 3,894,412
15,500 Class L (New) ............ 102,852
(Banking) ------------
16,422,427
------------
Netherlands--1.0%
223,700 Royal Boskalis Westminster 5,081,678
N.V. .................... ------------
(Construction & housing)
New Zealand--1.8%
3,186,300 Fletcher Challenge, Ltd. 8,594,809
........................ ------------
(Forest products & paper)
Singapore--6.1%
135,000 Fraser & Neave Ltd. ...... 1,600,136
(Beverages & tobacco)
997,000 O'Seas Union Bank ........ 5,704,904
(Banking)
982,250 Sembawang Maritime, Ltd. 4,717,208
........................
(Transportation)
672,000 Singapore Airlines, Ltd. 6,454,496
........................
(Transportation)
709,000 United Overseas Bank, Ltd. 7,775,817
........................
(Banking)
1,575,000 Wing Tai Holdings ........ 3,218,664
(Multi-industry) ------------
29,471,225
------------
Spain--2.8%
33,200 Acerinox S.A. ............ 3,678,273
(Metals-steel)
214,162 Centros Commerciale (Pryca) 3,526,568
........................
(Merchandising)
178,700 Dragados y Construcciones* 2,671,215
........................
(Construction & housing)
204,583 Vallehermoso (Old) ....... $ 3,663,197
(Real estate) ------------
13,539,253
------------
Sweden--4.1%
163,800 Astra B Free ............. 4,381,052
(Health & personal care)
119,700 Hennes & Mauritz B Free 6,636,521
........................
(Merchandising)
93,600 Missouri Och Domsjo AB ... 4,276,741
(Forest products & paper)
241,500 Volvo AB ................. 4,777,149
(Automotive) ------------
20,071,463
------------
Thailand--0.5%
110,702 Land & House Public Co., 2,274,181
Ltd. ...................
(Housing)
16,000 Mdx Public Co., Ltd. ..... 89,877
(Real estate) ------------
2,364,058
------------
United Kingdom--8.0%
304,500 Barclays Bank PLC ........ 2,914,233
(Banking)
168,000 British Land Co. PLC ..... 1,043,043
(Real estate)
304,500 Carlton Communications PLC 4,393,767
........................
(Television &
communication equipment)
231,000 Great Portland Estates PLC 687,804
........................
(Real estate)
618,400 Guest Keen & Nettlefolds 6,161,237
........................
(Automotive)
514,500 J. Sainsbury PLC ......... 3,358,454
(Merchandising)
114,400 MEPC PLC ................. 795,419
(Real estate)
367,500 PowerGen PLC* ............ 3,414,969
(Utilities-electric &
gas)
</TABLE>
-8- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
United Kingdom--(cont'd)
246,700 S.G. Warburg Group PLC ... $ 2,470,027
(Financial services)
655,700 Siebe PLC ................ 5,792,687
(Machinery & engineering)
183,700 Slough Estates PLC ....... 656,662
(Real estate)
2,117,490 Vodafone Group ........... 7,309,453
(Telecommunications) ------------
38,997,755
------------
United States--16.4%
252,300 Adaptec, Inc. ............ 5,865,975
(Electronics/semiconductors)
107,100 Applied Materials, Inc. 5,569,200
........................
(Electronics)
141,000 Cirrus Logic Corp. ....... 4,053,750
(Electronics/semiconductors)
212,600 Electronic Arts, Inc. .... 4,783,500
(Consumer goods)
209,525 Mattel, Inc. ............. 6,128,606
(Recreation & other
consumer goods)
214,100 MCI Communications Corp. 4,924,300
........................
(Telecommunications)
107,500 Microsoft Corp. .......... 6,772,500
(Computer services)
59,600 Mobil Corp. .............. 5,125,600
(Energy sources)
128,300 Motorola, Inc. ........... 7,553,663
(Television &
electronics)
251,900 Nextel Communications, Inc. 5,274,156
........................
(Telecommunications)
189,500 Norwest Corp. ............ 4,642,750
(Banking)
142,800 Oracle Systems Corp. ..... 6,568,800
(Business & public
services)
91,200 Pohang Iron & Steel (ADR) $ 2,998,200
........................
(Metals)
178,400 Silicon Graphics, Inc.* 5,418,900
........................
(Electronic components)
105,000 Time Warner, Inc. ........ 3,727,500
(Broadcasting & ------------
publishing)
79,407,400
------------
Total common stocks
(cost US$346,794,677).... 424,933,464
------------
Preferred Stocks--6.4%
Federal Republic Of Germany--1.0%
5,440 Krones ................... 4,976,525
(Machinery & engineering) ------------
Finland--4.0%
130,000 Nokia Corp. .............. 19,602,951
(Television & ------------
electronics)
Korea--1.4%
70,000 Daewoo Securities Co., 1,782,600
Ltd.* ..................
(Financial services)
45,060 Daishin Securities Co.* 650,053
........................
(Financial services)
64,970 Mando Machinery Corp. .... 2,445,086
(Automotive Parts)
18,096 Samsung Electronics ...... 1,702,565
(Electronics) ------------
6,580,304
------------
Total preferred stocks
(cost US$15,167,088)..... 31,159,780
------------
Warrants*--1.0%
<CAPTION>
Warrants France
- ----------
<C> <S> <C>
La Farge Coppee
3,500 Warrants expiring April '96 28,238
@ FF460.................. ------------
(Building materials & components)
</TABLE>
-9- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
<TABLE>
<CAPTION>
Value
Warrants Description (Note 1)
<C> <S> <C>
Japan--1.0%
Autobacs Seven Co.
50 Warrants expiring Feb. '95 $ 216,250
@ (YEN)8,089 ...........
(Merchandising)
Autobacs Seven Co.
400 Warrants expiring Mar. '96 1,615,000
@ (YEN)8,231.10 ........
(Merchandising)
Kamigumi Co., Ltd.
1,000 Warrants expiring Sept. '96 180,833
@ (YEN)902 .............
(Transportation &
warehousing)
Nissen Co., Ltd.
1,136 Warrants expiring Nov. '96 1,510,488
@ (YEN)1,681 ...........
(Merchandising)
Nitori Co.
5,250 Warrants expiring Feb. '98 823,611
@ (YEN)3,268 ........... ------------
(Merchandising)
4,346,182
------------
Singapore
Kim Eng Holdings
327,400 Warrants expiring Nov. '97 189,571
@ SGD2.00 .............. ------------
(Financial services)
Total Warrants
(cost US$2,663,038)...... 4,563,991
------------
<CAPTION>
Principal
Amount
(000)
<C> <S> <C>
Corporate Bonds--2.0%
Malaysia--1.4%
IJM Corp. Berbad
MYR 2,400 Convertible unsecured loan
stock $ 6,926,237
7.00%, 2/15/97 ......... ------------
(Construction & housing)
Singapore--0.2%
Kim Eng Holdings
SGD 165 Loan Stock
3.50%, 1/20/97 ......... 103,968
(Financial Services)
Sembawang Maritime, Ltd.
SGD 524 Convertible unsecured loan
stock 820,981
1.50%, 10/25/98 ........ ------------
(Transportation)
924,949
------------
Thailand--0.4%
MDX Public Co.
Convertible bond
USD 2,324 4.75%, 9/17/03 ........... 1,911,490
(Real Estate) ------------
Total corporate bonds
(cost US$4,936,948)...... 9,762,676
------------
Total Investments--96.9%
(cost US$369,561,751; Note
4)....................... 470,419,911
Other assets in excess of
liabilities--3.1%........ 15,120,056
------------
Net Assets--100%........... $485,539,967
------------
------------
</TABLE>
- ---------------
*Non-income producing security.
ADR--American Depository Receipt
-10- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets October 31, 1994
----------------
<S> <C>
Investments, at value (cost $369,561,751)............................................... $470,419,911
Foreign currency, at value (cost $5,436,182)............................................ 5,542,343
Cash.................................................................................... 3,782,699
Receivable for investments sold......................................................... 8,314,785
Receivable for Fund shares sold......................................................... 1,941,861
Dividends and interest receivable....................................................... 1,178,170
Deferred expenses and other assets...................................................... 10,305
----------------
Total assets...................................................................... 491,190,074
----------------
Liabilities
Payable for investments purchased....................................................... 3,450,050
Payable for Fund shares reacquired...................................................... 1,188,448
Due to Distributors..................................................................... 334,334
Due to Manager.......................................................................... 298,948
Accrued expenses........................................................................ 258,520
Withholding taxes payable............................................................... 63,106
Deferred Thailand capital gains tax..................................................... 56,701
----------------
Total liabilities................................................................. 5,650,107
----------------
Net Assets.............................................................................. $485,539,967
----------------
----------------
Net assets were comprised of:
Common stock, at par.................................................................. $ 332,974
Paid-in capital in excess of par...................................................... 376,179,248
----------------
376,512,222
Undistributed net investment income................................................... 1,763,101
Accumulated net realized gain on investment and foreign currency transactions......... 6,424,560
Net unrealized appreciation on investments and foreign currencies..................... 100,840,084
----------------
Net assets, October 31, 1994.......................................................... $485,539,967
----------------
----------------
Class A:
Net asset value and redemption price per share
($73,814,857 / 4,956,216 shares of common stock issued and outstanding)............. $14.89
Maximum sales charge (5% of offering price)........................................... .78
----------------
Maximum offering price to public...................................................... $15.67
----------------
----------------
Class B:
Net asset value, offering price and redemption price per share
($410,519,780 / 28,258,174 shares of common stock issued and outstanding)........... $14.53
----------------
----------------
Class C:
Net asset value, offering price and redemption price per share
($1,205,330 / 82,973 shares of common stock issued and outstanding)................. $14.53
----------------
----------------
</TABLE>
See Notes to Financial Statements.
-11-
<PAGE>
PRUDENTIAL GLOBAL FUND, INC.
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
October 31,
Net Investment Income 1994
-----------
<S> <C>
Income
Dividends (net of foreign withholding
taxes of $586,932)................. $ 4,812,284
Interest (net of foreign withholding
taxes of $5,369)................... 317,132
-----------
Total income....................... 5,129,416
-----------
Expenses
Distribution fee--Class A............ 146,139
Distribution fee--Class B............ 3,229,844
Distribution fee--Class C............ 1,554
Management fee....................... 3,032,864
Transfer agent's fees and expenses... 870,000
Custodian's fees and expenses........ 800,000
Reports to shareholders.............. 238,000
Registration fees.................... 118,000
Directors' fees...................... 88,000
Audit fee............................ 50,000
Legal fees........................... 45,000
Insurance expense.................... 9,000
Miscellaneous........................ 32,049
-----------
Total operating expenses........... 8,660,450
-----------
Net investment loss.................... (3,531,034)
-----------
Realized and Unrealized Gain
on Investments and Foreign Currency
Transactions
Net realized gain on:
Investment transactions (net of
Thailand capital gains tax of
$278,312).......................... 17,677,641
Foreign currency transactions........ 360,031
-----------
18,037,672
-----------
Net change in unrealized appreciation
on:
Investments (net of deferred Thailand
capital gains tax of $56,701)...... 29,631,662
Foreign currencies................... 36,676
-----------
29,668,338
-----------
Net gain on investments and foreign
currencies........................... 47,706,010
-----------
Net Increase in Net Assets
Resulting from Operations.............. $44,174,976
-----------
-----------
</TABLE>
PRUDENTIAL GLOBAL FUND, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
Increase (Decrease) in ------------------------------
Net Assets 1994 1993
------------- -------------
<S> <C> <C>
Operations
Net investment loss... $ (3,531,034) $ (669,977)
Net realized gain on
investment and
foreign currency
transactions........ 18,037,672 12,160,987
Net change in
unrealized
appreciation of
investments and
foreign
currencies.......... 29,668,338 55,989,764
------------- -------------
Net increase in net
assets resulting
from operations..... 44,174,976 67,480,774
------------- -------------
Net equalization
credits............... 193,130 134,235
------------- -------------
Fund share transactions
(Note 5)
Net proceeds from
shares subscribed... 373,867,022 153,827,341
Cost of shares
reacquired............ (225,849,388) (120,699,004)
------------- -------------
Net increase in net
assets from Fund
share
transactions........ 148,017,634 33,128,337
------------- -------------
Total increase.......... 192,385,740 100,743,346
Net Assets
Beginning of year....... 293,154,227 192,410,881
------------- -------------
End of year............. $ 485,539,967 $ 293,154,227
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
-12-
<PAGE>
<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 poli-
cies 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 or designated
subcustodians, as the case may be under triparty repurchase agreements, take
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 gains on foreign currency transactions of $360,031 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 unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities (other than investments) at fiscal year end
exchange rates are reflected as a component of net unrealized appreciation on
investments and 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 per share is unaffected by sales or reacquisitions of the Fund's shares.
-13-
<PAGE>
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the A.I.C.P.A.'s Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. The effect caused by adopting this statement was to decrease paid-in
capital in excess of par by $2,237,611, increase undistributed net investment
income by $2,350,294, and decrease accumulated net realized gain on investments
and foreign currency transactions by $112,683 for the period ended October 31,
1994.
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 currency transactions.
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, interest and capital gains 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 management
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 and Class C shares of the Fund (collectively
the ``Distributors''). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the ``Class A, B and C Plans'') regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B Plans under which the distribution plans became compensation plans,
effective August 1, 1994. Prior thereto, the distribution plans were
reimbursement plans, under which PMFD and PSI were reimbursed for expenses
actually incurred by them up to the amount permitted under the Class A and Class
B Plans, respectively. The Fund is not obligated to pay any prior or future
excess distribution costs (costs incurred by the Distributors in excess of
distribution fees paid by the Fund or contingent deferred sales charges received
by the Distributors). The rate of the distribution fees charged to Class A and
Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.
Pursuant to the Class A, B and C Plans, the Fund compensates PMFD for
distribution-related activities 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, .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 of the Class B shares and 1% of average daily net assets of Class C
shares. Such expenses under the Plans were .25 of 1%, .93% of 1% and 1% of the
average daily net assets of Class A, B and C shares, respectively, for the year
ended October 31, 1994.
PMFD has advised the Fund that it has received approximately $575,300 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended October 31, 1994. From these fees, PMFD paid such sales charges to
dealers (PSI and Prusec) which in turn paid commissions to salespersons.
PSI has advised the Fund that for the fiscal year ended October 31, 1994, it
received approximately $508,700 in contingent deferred sales charges imposed
upon certain redemptions by Class B and C shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
-14-
<PAGE>
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, 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, 1994, the Fund incurred fees of
approximately $727,000 for the services of PMFS. As of October 31, 1994,
approximately $67,000 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.
For the fiscal year ended October 31, 1994, PSI and/or its foreign affiliates
earned approximately $2,220 in brokerage commissions from portfolio transactions
executed on behalf of the Fund.
Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments, for the six months ended
October 31, 1994 were $342,678,644 and $196,526,761, respectively.
The United States federal income tax basis of the Fund's investments at
October 31, 1994 was $370,675,999 and accordingly, net unrealized appreciation
for federal income tax purposes was $99,743,912 (gross unrealized
appreciation--$112,910,743; gross unrealized depreciation--$13,166,831).
The Fund utilized its capital loss carryforward of approximately $11,527,100
to offset the Fund's net taxable gains realized and recognized in the fiscal
year ended October 31, 1994.
Note 5. Capital The Fund offers Class A,
Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 5%. 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. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing in or about February 1995. There are 500 million
shares of common stock, $.01 par value per share, divided into three classes,
designated Class A, Class B and Class C common stock, each of which consists of
166,666,666 2/3 authorized shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ---------- -------------
<S> <C> <C>
Fiscal year ended
October 31, 1994:
Shares sold................... 8,934,836 $ 124,979,118
Shares reacquired............. (7,169,344) (100,448,720)
---------- -------------
Net increase in shares
outstanding................. 1,765,492 $ 24,530,398
---------- -------------
---------- -------------
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
---------- -------------
---------- -------------
<CAPTION>
Class B
- ------------------------------
<S> <C> <C>
Fiscal year ended
October 31, 1994:
Shares sold................... 17,971,424 $ 247,670,808
Shares reacquired............. (9,114,786) (125,372,515)
---------- -------------
Net increase in shares
outstanding................. 8,856,638 $ 122,298,293
---------- -------------
---------- -------------
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
---------- -------------
---------- -------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
August 3, 1994* through
October 31, 1994:
Shares sold................... 84,982 $ 1,217,096
Shares reacquired............. (2,009) (28,153)
---------- -------------
Net increase in shares
outstanding................. 82,973 $ 1,188,943
---------- -------------
---------- -------------
- ---------------
* Commencement of offering of Class C shares.
</TABLE>
Note 6. Dividends On December 1, 1994, the
and Distributions Board of Trustees of the Fund
declared the following dividends and distributions
per share, payable on December 15, 1994 to shareholders of record on December
18, 1994:
<TABLE>
<CAPTION>
Class A Class B and C
------- -------------
<S> <C> <C>
Long-Term Capital Gains................ $ 0.185 $ 0.185
</TABLE>
-15-
<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): 1994 1993 1992 1991 1990 1994
1993 1992
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
----------- ------- ------- ------- ------------ -----------
-------- --------
Net asset value, beginning of
period..................... $ 13.17 $ 9.58 $ 10.08 $ 9.19 $10.38 $ 12.94
$ 9.47 $ 10.05
----------- ------- ------- ------- ------------ -----------
-------- --------
Income from investment
operations
Net investment income
(loss)..................... (.04) .02 .03 .07 .12 (.13)
(.04) (.05)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............... 1.76 3.57 (.53) 1.02 (1.31) 1.72
3.51 (.53)
----------- ------- ------- ------- ------------ -----------
-------- --------
Total from investment
operations............... 1.72 3.59 (.50) 1.09 (1.19) 1.59
3.47 (.58)
Less distributions
Dividends from net investment
income..................... -- -- -- (.16) -- --
-- --
Distributions paid to
shareholders from net
realized gains on
investment and foreign
currency transactions...... -- -- -- (.04) -- --
-- --
----------- ------- ------- ------- ------------ -----------
-------- --------
Total distributions........ -- -- -- (.20) -- --
-- --
----------- ------- ------- ------- ------------ -----------
-------- --------
Net asset value, end of
period..................... $ 14.89 $ 13.17 $ 9.58 $ 10.08 $ 9.19 $ 14.53
$ 12.94 $ 9.47
----------- ------- ------- ------- ------------ -----------
-------- --------
----------- ------- ------- ------- ------------ -----------
-------- --------
TOTAL RETURN#:............... 13.06% 37.47% (4.96)% 12.11% (11.46)% 12.29%
36.64% (5.77)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)...................... $73,815 $42,021 $13,973 $14,154 $8,727 $ 410,520
$251,133 $178,438
Average net assets (000)..... $58,455 $21,409 $14,758 $10,593 $7,151 $ 345,771
$183,741 $210,464
Ratios to average net assets:
Expenses, including
distribution fees........ 1.55% 1.56% 1.71% 1.72% 1.57%* 2.24%
2.24% 2.40%
Expenses, excluding
distribution fees........ 1.30% 1.36% 1.51% 1.52% 1.37%* 1.30%
1.36% 1.51%
Net investment
income/loss................ (0.29)% 0.20% 0.22% 0.65% 1.61%* (0.97)%
(0.39)% (0.47)%
Portfolio turnover rate...... 49% 69% 58% 126% 35% 49%
69% 58%
- ---------------
<CAPTION>
Class C
-----------
August 3,
1994@@
through
PER SHARE OPERATING October 31,
PERFORMANCE (1): 1991 1990 1994
<S> <<C> <C> <C>
-------- -------- -----------
Net asset value, beginning of
period..................... $ 9.14 $ 10.46 $ 14.03
-------- -------- -----------
Income from investment
operations
Net investment income
(loss)..................... -- .05 (.03)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............... 1.02 (1.10) .53
-------- -------- -----------
Total from investment
operations............... 1.02 (1.05) .50
Less distributions
Dividends from net investment
income..................... (.07) (.18) --
Distributions paid to
shareholders from net
realized gains on
investment and foreign
currency transactions...... (.04) (.09) --
-------- -------- -----------
Total distributions........ (.11) (.27) --
-------- -------- -----------
Net asset value, end of
period..................... $ 10.05 $ 9.14 $ 14.53
-------- -------- -----------
-------- -------- -----------
TOTAL RETURN#:............... 11.29% (10.43)% 3.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)...................... $249,582 $261,555 $ 1,205
Average net assets (000)..... $253,866 $328,467 $ 630
Ratios to average net assets:
Expenses, including
distribution fees........ 2.44% 2.23% 2.63%*
Expenses, excluding
distribution fees........ 1.53% 1.37% 1.63%*
Net investment
income/loss................ (0.01)% 0.51% (1.21)%*
Portfolio turnover rate...... 126% 35% 49%
- ---------------
</TABLE>
* Annualized.
@ Commencement of offering of Class A shares.
@@ Commencement of offering of Class C 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 including reinvestment
of dividends and distributions. Total returns for periods of less than a
full year are not annualized.
## Because of the events referred to in @@ and the timing of such, the
ratios for the Class C shares are not necessarily comparable to that of
Class A or B shares and are not necessarily indicative of future ratios.
See Notes to Financial Statements.
-16-
<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, 1994, 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, 1994 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, 1994, the results of its operations, the changes in
its net assets, and its financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
December 16, 1994
FEDERAL INCOME TAX INFORMATION
In January 1995, you will be advised on IRS Form 1099, DIV or substitute Form
1099, as to the federal tax status of the distributions received by you in
calendar 1994.
-17-
<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, Class B, and Class C) 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, in 1984 for Class B
shares and 1994 for Class C 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 and Class C shares assuming full redemption on October 31,
1994; (c) all recurring fees (including management fees) were deducted; and
(d) all dividends and distributions were reinvested. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately
seven years after purchase. This conversion feature is expected to be
implemented on or about February 1995 and is not reflected in the graph.
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.
-18-
