PRUDENTIAL GLOBAL TOTAL RETURN FUND INC, N-30D, 1999-09-08

PRUDENTIAL GLOBAL TOTAL RETURN FUND INC
N-30D, 1999-09-08

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<PAGE>

(ICON)

Prudential
Global
Total Return
Fund, Inc.

SEMI
ANNUAL
REPORT

June 30, 1999

(LOGO)

<PAGE>

A Message from the Fund's President August 20, 1999
(PHOTO)

Dear Shareholder,
Prudential Global Total Return Fund posted negative returns for the
six-month period that ended on June 30, 1999, as did its benchmark,
the Lipper Global Income Fund Average. The Fund was hurt primarily
by its still-considerable exposure to U.S. Treasuries. These
government securities and bonds of certain other major debt
markets sold off in the first half of the year amid concern
about the potential for higher inflation. The following report
takes a closer look at bond market events that
took place during the six-month reporting period, and explains
how Prudential Global Total Return Fund was positioned accordingly.

Our integrated and expanded team
I would like to take this opportunity to tell you about some changes
we've made to our Fixed Income Group. Earlier in the year, we
combined our fixed-income areas into one integrated group that
will manage money for Prudential's retail and institutional
investors, as well as its policyholders. This integrated group
now manages approximately $145 billion in assets, making it one
of the three largest fixed-income money managers in the country.
The expanded depth, breadth, and scale of our investment team
also allow us to tap the best talent and share investment ideas,
proprietary research, and analytical tools. The group is co-headed
by Senior Managing Directors Jim Sullivan, who is responsible for
portfolio management and credit research, and Jack Gaston, who
is in charge of risk management and quantitative research.

To utilize these integrated resources more effectively, Mr.
Sullivan recently organized the group into teams, each
specializing in a different sector of the fixed-income
market. The Global Bond Sector team will now be responsible
for the day-to-day management of your Prudential Global
Total Return Fund. Many of the investment professionals
who supported the management of the Fund in the past are
part of this new team that will work together to share
their knowledge and strive to enhance performance.

Thank you for your continued confidence in Prudential mutual
funds. I firmly believe that the group's combined resources
and our new team approach will make us a powerhouse in the
world of fixed-income investing across all sectors.

Sincerely,

John R. Strangfeld
President and Chief Investment Officer
Prudential Global Total Return Fund, Inc.

<PAGE>

Performance Review

<TABLE>
Cumulative Total Returns1 As of 6/30/99
<CAPTION>
Six One Five Ten Since
Months Year Years Years Inception2
<S> <C> <C> <C> <C> <C>
Class A -3.30% 0.95% 54.80% 135.11% 233.08%
Class B -3.60 0.34 N/A N/A 21.38
Class C -3.60 0.34 N/A N/A 21.39
Class Z -3.22 1.23 N/A N/A 11.42
Lipper Global Inc.
Fund Avg.3 -3.35 -0.05 36.02 102.23 ***
</TABLE>

<TABLE>
Average Annual Total Returns1 As of 6/30/99
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -3.09% 8.25% 8.48% 9.37%
Class B -4.66 N/A N/A 5.26
Class C -1.66 N/A N/A 5.46
Class Z 1.23 N/A N/A 4.85
</TABLE>

<TABLE>
Distributions and Yields As of 6/30/99
<CAPTION>
Total Distributions 30-Day
Paid for Six Mos. SEC Yield
<S> <C> <C>
Class A $0.26 4.85%
Class B $0.23 4.53%
Class C $0.23 4.49%
Class Z $0.26 5.31%
</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.
Past performance numbers--with the exception of
one-year returns--do not fully reflect the higher
operating expenses incurred since the Fund commenced
operations as an open-end mutual fund on January 15,
1996. If these expenses had been applied since the Fund's
inception, past performance returns would have been lower.
Prior to January 15, 1996, the Fund operated as a closed-end
fund with shares being traded on the New York Stock Exchange.

1 Source: Prudential Investments Fund Management LLC and
Lipper, Inc. The cumulative total returns do not take into
account sales charges. The average annual total returns do
take into account applicable sales charges. The Fund charges
a maximum front-end sales charge of 4% for Class A shares.
Class B shares are subject to a declining contingent deferred
sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% for six
years. Class B shares will automatically convert to Class
A shares, on a quarterly basis, approximately seven years
after purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months. Class
C shares bought before November 2, 1998, have a 1% CDSC if
sold within one year. Class Z shares are not subject to
a sales charge or distribution and service (12b-1) fees.

2 Inception dates: Class A, 7/7/86; Class B and Class C,
1/15/96; and Class Z, 3/17/97.

3 Lipper average returns are for all funds in each share
class for the six-month, one-, five-, and ten-year periods
in the Global Income Fund category.

***Lipper Since Inception returns are 180.49% for Class A,
14.59% for Class B and Class C, and 8.13% for Class Z, based
on all funds in each share class.

We increased exposure to emerging market bonds
The first half of 1999 began on a somber note for emerging
market bonds. In January, the Brazilian government devalued
the nation's currency--the real--amid doubts about its ability
to solve Brazil's longstanding fiscal difficulties. But the
Brazilian government acted quickly to regain investor
confidence by cutting spending, raising taxes, and taking
other measures. Encouraged by these moves, investor demand
increased for Brazilian debt securities and other emerging
market bonds. In addition, investor sentiment toward emerging
market bonds of Southeast Asian countries improved as economic
stability returned to that region. As a whole, emerging market
bonds performed better than debt securities in other fixed-income
markets during the six months, based on Lehman Brothers indexes.

The Fund's exposure to below-investment-grade emerging market bonds
rose from 2.04% of its total investments as of December 31, 1998 to
8.73% as of June 30, 1999. We selectively purchased a mixture of
shorter- and longer-term government bonds of Jordan, Venezuela,
Bulgaria, and Malaysia--all of which were denominated in U.S.
dollars. Emerging market bonds provide high yields because they
are often rated below investment grade and carry greater credit
risk than the government bonds of developed western economies.
For these reasons, we limit the Fund's exposure to these
lower-quality bonds.

We trimmed U.S. Treasuries and Australian bonds
The money we used to purchase emerging market bonds came from
selling some of the Fund's longer-term, dollar-bloc bonds, which
is a group that includes U.S. Treasuries and the government bonds
of Australia, Canada, and New Zealand. In this case, we
primarily sold Treasuries and Australian government bonds,
which caused dollar-bloc bonds to fall from 49.2% of the Fund's
total investments as

<PAGE>

of December 31, 1998 to 45.5% by the end of June 1999. Selling
these bonds helped to lower the Fund's duration (a measure of
its sensitivity to changes in the level of interest rates)
from 6.1 years to 4.2 years. A shorter duration made the Fund
less sensitive to the rise in the yields of dollar-bloc bonds
and the decline in their prices. However, our still-considerable
exposure to these bonds--especially Treasuries--was a key factor
that caused the Fund to post negative returns for the
first half of the year.

In fact, dollar-bloc bonds and many major European government
bond markets provided negative returns for the six months,
according to Lehman Brothers indexes. They sold off amid concern
that the powerful U.S. economic expansion, a pickup in world
economic growth, and rising commodity prices would spark higher
inflation. Investors dislike rising inflation because it erodes
the value of their bonds' fixed interest payments. Because bond
yields typically reflect the anticipated rate of
inflation, investors began to push yields higher in many bond
markets and their prices lower, particularly in the Treasury
market.

Fed acted to slow U.S. economic growth
This trend continued amid growing expectations that the Federal
Reserve would increase the Federal funds rate--the rate U.S. banks
charge each other for overnight loans--to keep the U.S. economy
from overheating.

In mid-May, Federal Reserve policy makers announced they were
considering raising the key rate because of the potential for
higher inflation. Finally on June 30, 1999, the Federal Reserve
boosted the Federal funds rate by a quarter of a percentage
point to 5.00%.

Besides dollar-bloc bonds, we sold long-term German government
bonds to shorten the Fund's duration. As for currencies, we
substantially reduced the Fund's euro exposure. When the euro
debuted on January 1, 1999, the new single-European currency was
widely expected to gain in value. As it turned out, the euro
weakened by approximately 12% against the U.S. dollar in its
first six months, largely reflecting the superior strength of
the U.S. economy compared with that of continental Europe. Even
though we cut the Fund's euro weighting in the first half of
the year, our remaining exposure to the currency still detracted
from the Fund's performance.

Five Largest Issuers
Expressed as a percentage of net assets as of 6/30/99

German Government Bonds 21.1%
U.S. Treasury Obligations 12.3
United Kingdom Treasury Strip 4.3
Danish Government Bonds 3.9
French Government Bonds 2.9

Geographic/Currency Concentration
Expressed as a percentage of total investments as of 6/30/99

United States 36%
Euro 27
Other 22
United Kingdom 5
Australia 4
Denmark 4
Cash Equivalents 2

Investment Goals and Style
Your Fund seeks total return made up of current income
and capital appreciation. The Fund invests primarily in
intermediate-term, investment-grade debt securities issued
around the world. The Fund may also invest up to 15% of
total net assets in bonds rated below investment grade with
a minimum rating of "B" by Standard & Poor's or Moody's, or
of comparable quality in our view. Lower-rated securities
carry a greater risk of loss of principal and interest than
higher-rated securities. There are special risks associated
with foreign investing, including social, political and
currency risks, as well as potential illiquidity. There
can be no assurance that the Fund's investment objective
will be achieved.

1
<PAGE>

Review Cont'd.

Looking Ahead
Our emerging market bond outlook remains positive--in the medium term
We expect to maintain a significant exposure to emerging market bonds,
which offer yield spreads that, on average, are notably higher than
they have been in recent years. Although these bonds carry
considerable risks, we believe investors with
prudent exposure to eastern European and Asian bonds will
continue to be rewarded. As for the euro, its substantial
decline will likely have a stimulative effect on the European
economy because the weaker currency has made prices of European
exports very competitive. Should signs of economic recovery
continue to emerge in Europe, the euro's outlook will probably
improve.

2
<PAGE>
Portfolio of Investments as
of June 30, 1999 (Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount US$
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--84.6%
- ------------------------------------------------------------
Australia--4.1%
A$ 2,950 Commonwealth of Australia,
10.00%, 10/15/02 $ 2,205,259
5,700 New South Wales Treasury
Corporation,
6.50%, 5/1/06 3,784,411
------------
5,989,670
- ------------------------------------------------------------
Canada--3.7%
C$ 3,250 British Columbia Provincial
Bond,
6.00%, 6/9/08 2,215,272
4,500 Province of Quebec,
6.50%, 10/1/07 3,144,115
------------
5,359,387
- ------------------------------------------------------------
Denmark--3.9%
Danish Government Bonds,
DKr 20,000 7.00%, 12/15/04 3,129,019
15,515 8.00%, 3/15/06 2,571,503
------------
5,700,522
- ------------------------------------------------------------
Euro--25.4%
EURO 4,240 French Government Bond,
4.00%, 4/25/09 4,168,070
1,755 Italian Government Bond,
6.50%, 11/1/27 2,036,022
German Government Bonds,
1,010 4.50%, 5/17/02 1,071,607
8,610 3.75%, 8/26/03 8,881,797
5,060 7.375%, 1/3/05 6,058,338
5,530 3.75%, 1/4/09 5,382,509
7,925 6.25%, 1/4/24 9,157,204
------------
36,755,547
Germany--1.9%
DM 5,000 Republic of Colombia,
7.25%, 12/21/00 $ 2,701,836
- ------------------------------------------------------------
Greece--2.5%
GRD 680,000 Hellenic Republic, FRN,
11.90%, 12/31/03 2,243,967
365,200 Republic of Greece,
8.60%, 3/26/08 1,334,597
------------
3,578,564
- ------------------------------------------------------------
Hungary--0.4%
HUF 150,000 Hungarian Government Bond,
15.00%, 7/24/01 629,254
- ------------------------------------------------------------
New Zealand--3.8%
NZ$ 6,700 Federal National Mortgage
Association,
7.25%, 6/20/02 3,637,200
3,300 International Bank of
Reconstruction Development,
7.25%, 5/27/03 1,797,159
------------
5,434,359
- ------------------------------------------------------------
Russia--0.1%
RUB 8,600 European Bank of Reconstruction
Development,
Zero Coupon, 5/28/02 88,642
- ------------------------------------------------------------
Sweden--3.5%
SEK 12,200 Kingdom of Sweden,
5.00%, 1/15/04 1,465,669
29,000 Swedish Government Bond,
6.00%, 2/9/05 3,638,599
------------
5,104,268
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3

<PAGE>
Portfolio of Investments as
of June 30, 1999 (Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount US$
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
United Kingdom--4.3%
BP 3,360 United Kingdom Treasury Strip,
9.50%, 10/25/04 $ 6,270,424
- ------------------------------------------------------------
United States--31.0%
Corporate Bonds--2.5%
US$ 1,200 General Motors Acceptance
Corp.,
5.75%, 11/10/03 1,161,048
1,700 Household Finance Corporation,
6.40%, 6/17/08 1,615,391
1,000 Petroliam Nasional Berhad
(Malaysia),
7.125%, 10/18/06 912,000
------------
3,688,439
- ------------------------------------------------------------
Foreign Government Bonds--1.1%
1,700 Province of Ontario (Canada),
6.00%, 2/21/06 1,639,650
- ------------------------------------------------------------
Sovereign Bonds--11.8%
750 Kingdom Of Jordan,
5.50%, 12/23/23 450,000
600 Malaysia,
8.75%, 6/1/09 605,640
1,800 Ministry Of Finance (Russia),
10.00%, 6/26/07 887,625
1,000 Oman Sultanate (India),
7.125%, 3/20/02 985,000
930 Republic of Argentina, FRN,
5.9375%, 3/31/05 791,709
3,000 11.00%, 10/9/06 2,773,500
615 Republic of Brazil, FRN,
6.0625%, 1/1/01 588,124
1,250 Republic of Bulgaria,
2.50%, 7/28/12 743,750
1,000 Republic of Colombia,
7.25%, 2/23/04 831,000
1,770 Republic of Croatia, FRN,
5.8125%, 7/31/06 1,486,985
US$ 800 Republic of Lithuania,
7.125%, 7/22/02 $ 754,000
1,200 Republic of Panama,
7.875%, 2/13/02 1,167,000
1,400 Republic of Peru,
4.50%, 3/7/17 859,320
Republic of Venezuela,
1,417 6.3125%, 12/18/07 1,082,045
800 13.625%, 8/15/18 716,000
1,675 Russian Federation,
11.00%, 7/24/18 829,125
1,500 United Mexican States,
9.75%, 2/6/01 1,562,250
------------
17,113,073
- ------------------------------------------------------------
Supranational Bonds--3.3%
4,800 Corporacion Andina de Fomento,
7.375%, 7/21/00 4,766,592
- ------------------------------------------------------------
U.S. Government Obligations--12.3%
1,750 United States Treasury Bond,
6.625%, 2/15/27 1,848,157
United States Treasury Notes,
6,065 5.00%, 4/30/01 6,013,811
9,750 6.25%, 2/15/07 9,934,373
------------
17,796,341
------------
45,004,095
------------
Total long-term investments
(cost US$130,707,164) 122,616,568
------------
SHORT-TERM INVESTMENTS--8.8%
- ------------------------------------------------------------
Hungary--1.6%
Hungarian Government Bonds,
HUF 250,000 16.50%, 7/24/99 1,034,643
300,000 16.00%, 4/12/00 1,252,741
------------
2,287,384
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4

<PAGE>
Statement of Assets and Liabilities
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets June 30, 1999
<S> <C>
Investments, at value (cost $144,489,850)................................................................... $135,343,860
Foreign currency, at value (cost $1,339).................................................................... 1,341
Cash........................................................................................................ 36,411
Receivable for investments sold............................................................................. 12,357,638
Interest receivable......................................................................................... 2,933,667
Forward currency contracts--amount receivable from counterparties........................................... 414,230
Receivable for Fund shares sold............................................................................. 44,789
Other assets................................................................................................ 4,103
-------------
Total assets............................................................................................. 151,136,039
-------------
Liabilities
Payable for investments purchased........................................................................... 5,490,457
Payable for Fund shares reacquired.......................................................................... 317,557
Accrued expenses and other liabilities...................................................................... 175,186
Management fee payable...................................................................................... 91,073
Forward currency contracts-amount payable to counterparties................................................. 66,678
Distribution fee payable.................................................................................... 31,500
-------------
Total liabilities........................................................................................ 6,172,451
-------------
Net Assets.................................................................................................. $144,963,588
-------------
-------------
Net assets were comprised of:
Common stock, at par..................................................................................... $ 193,136
Paid-in capital in excess of par......................................................................... 154,985,228
-------------
155,178,364
Distributions in excess of net investment income......................................................... (1,796,162 )
Accumulated net realized gain on investments............................................................. 379,528
Net unrealized depreciation on investments and foreign currencies........................................ (8,798,142 )
-------------
Net assets, June 30, 1999................................................................................... $144,963,588
-------------
-------------
Class A:
Net asset value and redemption price per share
($138,356,077 / 18,434,074 shares of common stock issued and outstanding)............................. $7.51
Maximum sales charge (4% of offering price).............................................................. .31
-------------
Maximum offering price to public......................................................................... $7.82
-------------
-------------
Class B:
Net asset value, offering price and redemption price per share
($3,785,970 / 504,075 shares of common stock issued and outstanding).................................. $7.51
-------------
-------------
Class C:
Net asset value and redemption price per share
($290,702 / 38,704 shares of common stock issued and outstanding)..................................... $7.51
Sales charge (1% of offering price)...................................................................... .08
-------------
Offering price to public................................................................................. $7.59
-------------
-------------
Class Z:
Net asset value, offering price and redemption price per share
($2,530,839 / 336,785 shares of common stock issued and outstanding).................................. $7.51
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6

<PAGE>
PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income June 30, 1999
<S> <C>
Income
Interest and discount earned (net of
foreign withholding taxes of $11,736)... $ 5,996,888
-------------
Expenses
Management fee............................. 582,303
Distribution fee--Class A.................. 185,791
Distribution fee--Class B.................. 14,048
Distribution fee--Class C.................. 1,061
Transfer agent's fees and expenses......... 159,000
Custodian's fees and expenses.............. 112,000
Reports to shareholders.................... 49,000
Legal fees and expenses.................... 38,000
Registration fees.......................... 25,000
Audit fee and expenses..................... 18,000
Directors' fees............................ 9,000
Insurance.................................. 1,000
Miscellaneous.............................. 2,923
-------------
Total expenses.......................... 1,197,126
-------------
Net investment income......................... 4,799,762
-------------
Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions.................... (1,351,593)
Foreign currency transactions.............. 741,137
-------------
(610,456)
-------------
Net change in unrealized appreciation (depreciation) on:
Investments................................ (9,551,527)
Foreign currencies......................... 80,519
-------------
(9,471,008)
-------------
Net loss on investments and foreign
currencies................................. (10,081,464)
-------------
Net Decrease in Net Assets
Resulting from Operations..................... $(5,281,702)
-------------
-------------
</TABLE>

PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) June 30, December 31,
in Net Assets 1999 1998
<S> <C> <C>
Operations:
Net investment income.......... $ 4,799,762 $ 11,321,302
Net realized gain (loss) on
investments and foreign
currency transactions....... (610,456) 1,570,888
Net change in unrealized
appreciation (depreciation)
on investments and foreign
currencies.................. (9,471,008) 1,857,462
------------ ------------
Net increase (decrease) in net
assets resulting from
operations.................. (5,281,702) 14,749,652
------------ ------------
Dividends and distributions (Note
1)
Dividends from net investment income
Class A..................... (3,074,196) (7,425,915)
Class B..................... (73,178) (127,509)
Class C..................... (5,445) (8,896)
Class Z..................... (56,932) (83,453)
------------ ------------
(3,209,751) (7,645,773)
------------ ------------
Distributions in excess of net
investment income
Class A..................... (1,720,306) (432,992)
Class B..................... (40,950) (7,435)
Class C..................... (3,047) (519)
Class Z..................... (31,859) (4,866)
------------ ------------
(1,796,162) (445,812)
------------ ------------
Distributions from net realized
gains
Class A..................... -- (3,221,486)
Class B..................... -- (55,316)
Class C..................... -- (3,859)
Class Z..................... -- (36,203)
------------ ------------
-- (3,316,864)
------------ ------------
Fund share transactions (net of
conversions) (Note 6)
Net proceeds from shares
sold........................ 2,797,138 8,184,792
Net asset value of shares
issued in reinvestment of
dividends and
distributions............... 1,422,888 2,953,974
Cost of shares reacquired...... (14,236,097) (35,442,667)
------------ ------------
Net decrease in net assets from
Fund share transactions..... (10,016,071) (24,303,901)
------------ ------------
Total decrease.................... (20,303,686) (20,962,698)
------------ ------------
Net Assets
Beginning of period............... 165,267,274 186,229,972
------------ ------------
End of period..................... $144,963,588 $165,267,274
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7

<PAGE>
Notes to Financial Statements
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
Prudential Global Total Return Fund, Inc., (the 'Fund'), formerly known as The
Global Total Return Fund, Inc., is an open-end, nondiversified management
investment company whose investment objective is to seek total return, the
components of which are current income and capital appreciation. The Fund
invests primarily in governmental (including supranational), semi-governmental
or governmental agency debt securities or in short-term bank debt securities or
deposits in the United States and in foreign countries denominated in U.S.
dollars or in foreign currencies, including debt securities issued or guaranteed
by the U.S. Government and foreign governments, their agencies, authorities or
instrumentalities (U.S. Government Securities and Foreign Government Securities,
respectively). The remainder is generally invested in corporate debt securities
or longer term bank debt securities. The bonds are primarily of investment
grade, i.e., bonds rated within the four highest quality grades as determined by
Moody's Investor's Service or Standard & Poor's Rating's Group, or in unrated
securities of equivalent quality. In addition the Fund is permitted to invest up
to 15% of the Fund's total assets in bonds rated below investment grade with a
minimum rating of B, or on unrated securities of equivalent quality. The ability
of the issuers of debt securities held by the Fund to meet their obligations may
be affected by economic and political developments in a specific country or
region.

- ------------------------------------------------------------
Note 1. Accounting Policies

The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.

Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued on the basis of valuations
provided by an independent pricing agent or principal market makers. Any
security for which the primary market is on an exchange or NASDAQ National
Market System Securities are valued at the last sale price on such exchange on
the day of valuation or, if there was no sale on such day, at the mean between
the last bid and asked prices on such day or at the bid price on such day in the
absence of an asked price. Forward currency exchange contracts are valued at the
current cost of covering or offsetting the contract on the day of valuation.
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors of the Fund.

Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.

In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians under triparty repurchase agreements as the case may be, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to ensure the
adequacy of the collateral. 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 United States dollars. Foreign currency amounts are translated into United
States dollars on the following basis:

(i) market value of investment securities, other assets and liabilities--at the
current rates of exchange.

(ii) purchases and sales of investment securities, income and expenses--at the
rates 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 period, 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 the securities held at period-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 debt securities sold
during the period. Accordingly, such realized foreign currency gains and losses
are included in the reported net realized gains on investment transactions.

Net realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from sales and maturities of short-term
securities and forward currency contracts, disposition of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of interest,
discount 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 (excluding investments) and
liabilities at period-end exchange rates are
- --------------------------------------------------------------------------------
8
<PAGE>
Notes to Financial Statements
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
reflected as a component of net unrealized appreciation or depreciation on
investments and foreign currencies.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political or economic instability and
the level of governmental supervision and regulation of foreign securities
markets.

Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments and foreign currencies. Gain or loss is realized on
the settlement date of the contract equal to the difference between the
settlement value of the original and renegotiated forward contracts. This gain
or loss, if any, is included in net realized gain (loss) on foreign currency
transactions. Risks may arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.

Security Transactions and Net Investment Income: Security transactions are
recorded on the trade date. Realized and unrealized gains and losses from
security and currency transactions are calculated on the identified cost basis.
Interest income, which is comprised of three elements: stated coupon, original
issue discount and market discount, is recorded on the accrual basis. Expenses
are recorded on the accrual basis, which may require the use of certain
estimates by management.

Net investment income (other than distribution fees), and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.

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 or excise tax provision is required.

Withholding taxes on foreign interest have been provided for in accordance with
the Fund's understanding of the applicable country's tax rules and rates.

Dividends and Distributions: Dividends are declared quarterly. Distributions of
capital gains, if any, will be declared at least 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.

Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' 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 of applying
this statement was to increase distributions in excess of net investment income
by $1,590,011 and increase accumulated net realized gain on investments by
$1,590,011 for foreign currency losses realized and recognized during the six
months ended June 30, 1999. Net investment income, net realized gains and net
assets were not affected by this change.

- ------------------------------------------------------------
Note 2. Agreements

The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with The Prudential
Investment Corporation ('PIC'); PIC, through an agreement with PRICOA Asset
Management Ltd. ('PRICOA'), furnishes investment advisory services in connection
with the management of the Fund. PIFM pays for the cost of the subadviser's
services, 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 PIFM is computed daily and payable monthly at an annual
rate of .75 of 1% of the Fund's average daily net assets up to $500 million, .70
of 1% of such assets between $500 million and $1 billion, and .65 of 1% of such
assets in excess of $1 billion.

The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A, B, C and Z
shares of the Fund. The Fund compensates PIMS 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
- --------------------------------------------------------------------------------
9

<PAGE>
Notes to Financial Statements
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
accrued daily and payable monthly. No distribution or service fees are paid to
PIMS as distributor of the Class Z shares of the Fund.

Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B, and C shares, respectively.
Such expenses under the Plans were .25 of 1%, .75 of 1% and .75 of 1% of the
average daily net assets of the Class A, B and C shares, respectively, for the
six months ended June 30, 1999.

PIMS has advised the Fund that it has received approximately $11,200 and $470 in
front-end sales charges resulting from sales of Class A and Class C shares,
respectively, during the six months ended June 30, 1999. From these fees, PIMS
paid such sales charges to dealers, which in turn paid commissions to
salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the six months ended June 30, 1999, it
received approximately $7,800 and $350 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.

PIFM, PIC, PIMS and PRICOA are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.

As of March 11, 1999, the Fund, along with other affiliated registered
investment companies (the 'Funds'), entered into a syndicated credit agreement
('SCA') with an unaffiliated lender. The maximum commitment under the SCA is $1
billion. The Funds pay a commitment fee at an annual rate of .065 of 1% on the
unused portion of the credit facility, which is accrued and paid quarterly on a
pro rata basis by the Funds. Interest on any such borrowings outstanding will be
at market rates. The SCA expires on March 9, 2000. Prior to March 11, 1999, the
Funds had a credit agreement with a maximum commitment of $200,000,000. The
commitment fee was .055 of 1% on the unused portion of the credit facility. The
Fund did not borrow any amounts pursuant to either agreement during the six
months ended June 30, 1999. The purpose of the agreements is to serve as an
alternative source of funding for capital share redemptions.

- ------------------------------------------------------------
Note 3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the six months ended June 30,
1999, the Fund incurred fees of approximately $125,000 for the services of PMFS.
As of June 30, 1999, approximately $20,500 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 nonaffiliates.

- ------------------------------------------------------------
Note 4. Portfolio Securities

Purchases and sales of investment securities, other than short-term investments
for the six months ended June 30, 1999, aggregated $75,259,993 and $90,028,618,
respectively.

At June 30, 1999, the Fund had outstanding forward currency contracts to
pruchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Current Settlement Date Appreciation/
Purchase Contracts Value Payable (Depreciation)
- ---------------------- ----------- ---------------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 7/15/99..... $ 1,526,171 $ 1,520,089 $ 6,082
Canadian Dollars,
expiring 7/8/99...... 4,021,378 4,033,762 (12,384)
Euros,
expiring 7/13/99..... 1,840,334 1,855,388 (15,054)
Pound Sterling,
expiring 8/4/99...... 1,363,546 1,372,886 (9,340)
Swedish Krona,
expiring 7/9/99...... 4,553,962 4,496,411 57,551
----------- ---------------- -------
$13,305,391 $ 13,278,536 $ 26,855
----------- ---------------- -------
----------- ---------------- -------
</TABLE>

<TABLE>
<CAPTION>
Value at
Foreign Currency Current Settlement Date Appreciation/
Sale Contracts Value Receivable (Depreciation)
- ---------------------- ----------- ---------------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 7/15/99..... $ 2,240,099 $ 2,241,364 $ 1,265
Canadian Dollars,
expiring 7/8/99...... 5,884,565 5,921,849 37,284
Euros,
expiring 7/13/99 -
7/23/99.............. 15,226,301 15,300,803 74,502
Japanese Yen,
expiring 7/26/99..... 1,966,916 1,976,315 9,399
New Zealand Dollars
expiring 7/19/99..... 5,613,381 5,653,346 39,965
Pound Sterling,
expiring 8/4/99...... 1,161,581 1,187,236 25,655
Swedish Krona,
expiring 7/9/99...... 1,518,761 1,493,406 (25,355)
Swiss Franc,
expiring 7/9/99...... 10,835,703 10,993,685 157,982
----------- ---------------- -------
$44,447,307 $ 44,768,004 $320,697
----------- ---------------- -------
----------- ---------------- -------
</TABLE>

The United States federal income tax basis of the Fund's investments at June 30,
1999 was $144,580,708 and, accordingly, net unrealized depreciation for United
States federal income tax purposes was $9,236,848 (gross
- --------------------------------------------------------------------------------
10

The Fund has elected to treat approximately $283,907 of net foreign currency
losses incurred in the two month period ended December 31, 1998 as having
occurred in the current fiscal year.

- ------------------------------------------------------------
Note 5. Joint Repurchase Agreement Account

The Fund, along with other affiliated registered investment companies, transfers
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 June 30, 1999, the Fund
had a .30% undivided interest in the joint account. The undivided interest for
the Fund represents $2,299,000 in the principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefor were as
follows:

Deutsche Bank Securities Inc., 4.75%, in the principal amount of $150,000,000,
repurchase price $150,019,792, due 7/1/99. The value of the collateral including
accrued interest was $153,000,548.

Goldman Sachs & Co., 4.85%, in the principal amount of $200,000,000, repurchase
price $200,026,944, due 7/1/99. The value of the collateral including accrued
interest was $204,001,378.

Morgan Stanley Dean Witter, 4.70%, in the principal amount of $178,944,000,
repurchase price $178,967,362, due 7/1/99. The value of the collateral including
accrued interest was $182,666,733.

Morgan Stanley Dean Witter, 4.72%, in the principal amount of $50,000,000,
repurchase price $50,006,556, due 7/1/99. The value of the collateral including
accrued interest was $51,021,154.

Warburg Dillon Read LLC, 4.81%, in the principal amount of $200,000,000,
repurchase price $200,026,722, due 7/1/99. The value of the collateral including
accrued interest was $204,001,326.

- ------------------------------------------------------------
Note 6. Capital

The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 4%. 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Prior to November 2, 1998, Class C shares were 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. A special exchange privilege is also available for
shareholders who qualified to purchase Class A shares at net asset value. Class
Z shares are not subject to any sales or redemption charge and are offered
exclusively for sale to a limited group of investors.

There are 2 billion authorized shares of common stock at $.01 par value per
share, divided equally into Class A, B, C and Z shares. As of June 30, 1999
Prudential owned 24 Class A shares, 12 Class B shares, 12 Class C shares and 12
Class Z shares.

Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------ ---------- ------------
<S> <C> <C>
Six months ended June 30, 1999:
Shares sold......................... 106,880 $ 840,946
Shares issued in reinvestment of
dividends and distributions....... 162,267 1,233,223
Shares reacquired................... (1,642,503) (12,857,944)
---------- ------------
Net decrease in shares outstanding
before conversion................. (1,373,356) (10,783,775)
Shares issued upon conversion from
Class B........................... 6,446 49,479
---------- ------------
Net decrease in shares
outstanding....................... (1,366,910) $(10,734,296)
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 339,598 $ 2,730,063
Shares issued in reinvestment of
dividends and distributions....... 333,052 2,661,857
Shares reacquired................... (4,101,283) (32,833,746)
---------- ------------
Net decrease in shares outstanding
before conversion................. (3,428,633) (27,441,826)
Shares issued upon conversion from
Class B........................... 3,881 31,322
---------- ------------
Net decrease in shares
outstanding....................... (3,424,752) $(27,410,504)
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
11

<PAGE>
Notes to Financial Statements
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares Amount
- ------------------------------------ ---------- ------------
Six months ended June 30, 1999:
<S> <C> <C>
Shares sold......................... 124,608 $ 977,925
Shares issued in reinvestment of
dividends and distributions....... 12,655 96,155
Shares reacquired................... (78,405) (614,197)
---------- ------------
Net increase in shares outstanding
before conversion................. 58,858 459,883
Shares reacquired upon conversion
into Class A...................... (6,446) (49,479)
---------- ------------
Net increase in shares
outstanding....................... 52,412 $ 410,404
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 237,833 $ 1,906,388
Shares issued in reinvestment of
dividends and distributions....... 20,064 160,430
Shares reacquired................... (94,011) (752,207)
---------- ------------
Net increase in shares outstanding
before conversion................. 163,886 1,314,611
Shares reacquired upon conversion
into Class A...................... (3,884) (31,322)
---------- ------------
Net increase in shares
outstanding....................... 160,002 $ 1,283,289
---------- ------------
---------- ------------
<CAPTION>
Class C Shares Amount
- ------------------------------------ ---------- ------------
<S> <C> <C>
Six months ended June 30, 1999:
Shares sold......................... 9,216 $ 72,187
Shares issued in reinvestment of
dividends and distributions....... 988 7,505
Shares reacquired................... (5,710) (44,844)
---------- ------------
Net increase in shares
outstanding....................... 4,494 $ 34,848
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 11,948 $ 95,300
Shares issued in reinvestment of
dividends and distributions....... 1,404 11,227
Shares reacquired................... (3,185) (25,475)
---------- ------------
Net increase in shares
outstanding....................... 10,167 $ 81,052
---------- ------------
---------- ------------
<CAPTION>
Class Z
- ------------------------------------
<S> <C> <C>
Six months ended June 30, 1999:
Shares sold......................... 114,576 $ 906,080
Shares issued in reinvestment of
dividends and distributions....... 11,304 86,005
Shares reacquired................... (92,292) (719,112)
---------- ------------
Net increase in shares
outstanding....................... 33,588 $ 272,973
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 429,296 $ 3,453,041
Shares issued in reinvestment of
dividends and distributions....... 15,060 120,460
Shares reacquired................... (228,142) (1,831,239)
---------- ------------
Net increase in shares
outstanding....................... 216,214 $ 1,742,262
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
12

- ---------------
(a) Total investment return based on net asset value 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 return does not consider the effect of sales load. Prior to January
15, 1996 the Fund operated as a closed-end investment company and total
investment return was calculated based on market value assuming a purchase
of common stock at the current market value on the first day and a sale at
the current market value on the last day of each period reported. Dividends
and distributions are assumed for purposes of this calculation to be
reinvested at prices obtained under the dividend reinvestment plan. This
calculation does not reflect brokerage commissions. Total investment returns
for periods of less than a full year are not annualized.
(b) Prior to January 15, 1996 the Fund operated as a closed-end investment
company.
(c) Calculated based upon weighted average shares outstanding during the period.
(d) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13

<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
--------------------------------------------------- ---------------------------
January 15,
Six Months Year Ended 1996(d) Six Months
Ended December 31, Through Ended Year Ended
June 30, ------------------- December 31, June 30, December 31,
1999(f) 1998(f) 1997(f) 1996 1999 1998(f)
---------- ------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.03 $ 7.89 $ 8.39 $ 8.51 $ 8.03 $ 7.88
----- ------- ------- ----- ----- -----
Income from investment operations
Net investment income......................... .22 .46 .49 .57 .25 .52
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... (.51) .16 (.16 ) .26 (.51) .17
----- ------- ------- ----- ----- -----
Total from investment operations........... (.29) .62 .33 .83 (.26) .69
----- ------- ------- ----- ----- -----
Less distributions
Dividends from net investment income.......... (.15) (.30 ) (.64 ) (.57) (.17) (.36)
Distributions in excess of net investment
income..................................... (.08) (.02 ) (.19 ) (.50) (.09) (.02)
Distributions from net realized capital
gains...................................... -- (.16 ) -- -- -- (.16)
----- ------- ------- ----- ----- -----
Total distributions........................ (.23) (.48 ) (.83 ) (1.07) (.26) (.54)
----- ------- ------- ----- ----- -----
Redemption fee retained by Fund............... -- -- -- .12 -- --
----- ------- ------- ----- ----- -----
Net asset value, end of period................ $ 7.51 $ 8.03 $ 7.89 $ 8.39 $ 7.51 $ 8.03
----- ------- ------- ----- ----- -----
----- ------- ------- ----- ----- -----
TOTAL INVESTMENT RETURN(a):................... (3.60)% 8.13 % 3.98 % 11.99% (3.22)% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 291 $ 275 $ 190 $ 210(b) $2,531 $2,435
Average net assets (000)...................... $ 285 $ 220 $ 397 $ 204(b) $2,641 $1,771
Ratios to average net assets:
Expenses, including distribution fees...... 2.03%(c) 1.93% 1.99% 1.93%(c) 1.28% 1.18%
Expenses, excluding distribution fees...... 1.28%(c) 1.18% 1.24% 1.18%(c) 1.28% 1.18%
Net investment income...................... 5.70%(c) 5.84% 6.05% 6.41%(c) 6.46% 6.65%
<CAPTION>
<S> <C>
March 17,
1997(e)
through
December 31,
1997(f)
------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.32
-----
Income from investment operations
Net investment income......................... .39
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... .05
-----
Total from investment operations........... .44
-----
Less distributions
Dividends from net investment income.......... (.69)
Distributions in excess of net investment
income..................................... (.19)
Distributions from net realized capital
gains...................................... --
-----
Total distributions........................ (.88)
-----
Redemption fee retained by Fund............... --
-----
Net asset value, end of period................ $ 7.88
-----
-----
TOTAL INVESTMENT RETURN(a):................... 5.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 686
Average net assets (000)...................... $ 257
Ratios to average net assets:
Expenses, including distribution fees...... 1.24%(c)
Expenses, excluding distribution fees...... 1.24%(c)
Net investment income...................... 5.41%(c)
</TABLE>
- ---------------
(a) Total investment 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 investment return does
not consider the effect of sales load. Total investment returns for periods
of less than a full year are not annualized.
(b) Figure is actual and not rounded to nearest thousand.
(c) Annualized.
(d) Commencement of offering of Class C shares.
(e) Commencement of offering of Class Z shares.
(f) Calculated based upon weighted average shares outstanding during the period.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 15

<PAGE>
Getting the Most from Your Prudential Mutual Fund

How many times have you read these reports--or other financial
materials-- and stumbled across a word that you don't understand?

Many shareholders have run into the same problem. We'd like to
help. So we'll use this space from time to time to explain some
of the words you might have read, but not understood. And if you
have a favorite word that no one can explain to your
satisfaction, please write to us.

Basis Point: 1/100th of 1%. For example, one-half of one percent
is 50 basis points.

Collateralized Mortgage Obligations (CMOs): Mortgage-backed bonds
that separate mortgage pools into different maturity classes,
called tranches. These instruments are sensitive to changes in
interest rates and homeowner refinancing activity. They
are subject to prepayment and maturity extension risk.

Derivatives: Securities that derive their value from other
securities. The rate of return of these financial instruments
rises and falls--sometimes very suddenly --in response to
changes in some specific interest rate, currency, stock,
or other variable.

Discount Rate: The interest rate charged by the Federal Reserve
on loans to member banks.

Federal Funds Rate: The interest rate charged by one bank to
another on overnight loans.

Futures Contract: An agreement to purchase or sell a specific
amount of a commodity or financial instrument at a set price
at a specified date in the future.

Leverage: The use of borrowed assets to enhance return. The
expectation is that the interest rate charged on borrowed
funds will be lower than the return on the investment. While
leverage can increase profits, it can also magnify losses.

Liquidity: The ease with which a financial instrument (or
product) can be bought or sold (converted into cash) in the
financial markets.

Price/Earnings Ratio: The price of a share of stock divided
by the earnings per share for a 12-month period.

Option: An agreement to purchase or sell something, such as
shares of stock, by a certain time for a specified price. An
option need not be exercised.

Spread: The difference between two values; often used to
describe the difference between "bid" and "asked" prices
of a security, or between the yields of two similar maturity
bonds.

Yankee Bond: A bond sold by a foreign company or government
in the U.S. market and denominated in U.S. dollars.

<PAGE>

Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

(800) 225-1852
http://www.prudential.com

Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
John R. Strangfeld
Louis A. Weil, III
Clay T. Whitehead

Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Marguerite E.H. Morrison, Secretary
Stephen M. Ungerman, Assistant Treasurer

Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777

PRICOA Asset Management, Ltd.
115 Houndsditch
London EC3A 7BU

Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795

The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.

The accompanying financial statements as of June 30, 1999,
were not audited and, accordingly, no opinion is expressed
on them.

This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.

(LOGO)

Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852

744337106 MF169E2
744337205
744337304
744337403