(ICON)
The Global
Government
Plus Fund, Inc.
ANNUAL
REPORT
Dec. 31, 1995
(LOGO)
<PAGE>
The Global Government Plus Fund, Inc.
Performance At A Glance.
1995 was a good year for global bond investors and The Global Government
Plus Fund. We took advantage of changes in the strength of the U.S.
dollar and falling worldwide interest rates by buying foreign bonds
that produced attractive returns. The Fund finished 1995 significantly
ahead of the average general world income fund tracked by Lipper
Analytical Services.
<TABLE>
Cumulative Total Returns1 As of 12/31/95
<CAPTION>
One Five Since
Year Years Inception*
<S> <C> <C> <C>
The Global Gov't Plus Fund 25.1% 54.3% 107.6%
Lipper Closed-End World Income 20.5 54.4 144.8
Fund Developed Nations Avg3
Lipper Gen. World Inc. Avg4 18.1 47.9 104.8
<CAPTION>
Average Annual Total Returns2 As of 12/31/95
One Five Since
Year Years Inception*
<S> <C> <C> <C>
The Global Gov't Plus Fund 20.2% 8.2% 8.5%
</TABLE>
Your Total Dividends
Dividend Paid for 12 Months
As of $0.69
12/31/95
Past performance is not indicative of future results. Investment return
and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost
The Fund operated as a closed end fund as of 12/31/95 and shares of the
Fund traded on the New York Stock Exchange for all periods shown. The
Fund commenced operations as an open-end fund on 1/15/96. Concurrent
with open-ending, the Fund is subject to higher operating expenses
which would have resulted in lower returns if applied to past performance.
*Inception date 7/31/87.
1 Source: Prudential Mutual Fund Management and Lipper Analytical
Services. The cumulative total returns represents the change in net
asset value from the beginning of the respective period through 12/31/95
and assumes the reinvestment of dividends and distributions through the
Fund's dividend reinvestment plan in effect at the time of reinvestment.
2 Source: Prudential Mutual Fund Management. Average annual total return
does take into account the 4% maximum front-end sales charge currently
applicable to Class A shares (formerly the Fund's closed-end shares),
although it does not take into account the higher operation expenses
(such as the distribution fee) to which the Fund's shares are now
subject to as an open-end fund. Dividends and distributions were
assumed to be reinvested in the Fund's dividend reinvestment plan
in effect at the time of reinvestment.
3 Lipper average return is for the 12 funds in the Closed-End World
Income Fund-Developed Nations category for one year, six funds for
five years and four funds since inception, according to Lipper Analytical
Services.
4 Lipper average return is for the 135 funds in the General World Income
Funds category (open-end funds) for one year, 29 funds for five years and
14 funds since inception, according to Lipper Analytical Services.
How Investments Compared.
(As of 12/31/95)
(CHART)
Source: Lipper Analytical Services. Financial markets change, so a mutual
fund's past performance should never be used to predict future results.
The risks to each of the investments listed above are different -- we
provide 12-month total return averages for several Lipper mutual fund
categories to show you that reaching for higher yields means tolerating
more risk. The greater the risk, the larger the potential reward or
loss. In addition, we've added historical 20-year average annual
returns. These returns assume the reinvestment of dividends.
U.S. Growth Funds will fluctuate a great deal. Smaller capitalization
stocks offer greater potential for long-term growth but may be more
volatile than larger capitalization stocks. Investors have received
higher historical total returns from stocks than from most other investments.
General Bond Funds provide more income than stock funds, which can help
smooth out their total returns year by year. But their prices still
fluctuate (sometimes significantly) and their returns have been
historically lower than those of stock funds. Unlike bond funds,
bonds, if held to maturity, offer a fixed rate of return and fixed
principal value.
Global Bond Funds provide more income than global stock funds, which
can help smooth out their total returns year by year. But their prices
still fluctuate (sometimes significantly) and their returns have been
historically lower than those of global stock funds. In addition,
these are foreign investments and are subject to special risks
including political, social and currency risks that may affect performance.
Money Market Funds attempt to preserve a constant share value; they don't
fluctuate much in price but, historically, their returns have been generally
among the lowest of the major investment categories.
*14 years for Global Bond Funds.
<PAGE>
Gabriel Irwin and Simon Wells, Fund Managers
Portfolio (PICTURE)
Managers' Report (PICTURE)
We invest primarily in intermediate-term government bonds issued
throughout the world, including the United States. The Fund seeks
to maximize total return by investing primarily in domestic and foreign
government securities rated in one of the four highest categories by
Moody's, Standard & Poor's or other recognized rating service. The
Fund may invest up to 10% of total assets in bonds rated below
investment grade with a minimum rating of "B" by S&P or in unrated
securities of equivalent quality.
Strategy Session.
We follow a "top down" investment philosophy. This means that we emphasize
country and currency allocations rather than a specific type of bond from
a specific market. We like to invest in countries with well-managed
economies and we may use currency hedges depending upon the strength
and stability of the local currency
1995 was a good year for most foreign bond markets. Slow economic growth
and falling short- term interest rates in Germany and the U.S. created
the perfect environment for bonds to do well -- and well they have done.
During 1995, non-U.S. bonds returned more than 21% and U.S.bonds more
than 17%, according to the J.P. Morgan Government Bond Index.
Our emphasis on the U.S. dollar and currencies that correlate or "track"
the U.S. dollar, such as Australia, Canada and New Zealand, (45% of net
assets as of December 31, 1995) helped us to capitalize on owning
bonds in a strong currency, this time in the U.S. dollar.
We also maintained our core holdings in Germany, Netherlands, the United
Kingdom and Denmark (31% of net assets as of December 31, 1995). These
countries featured well-established economies, steady (if slowing)
growth and low levels of inflation. Later in the year we added bonds
from Spain and Italy as well.
During 1995, we also invested in short-term, high yielding bonds from
emerging market nations, such as the Czech Republic, Hungary, Poland
and others. We liked these countries because they have embraced reforms
to modernize their economies and offered attractive investment
opportunities. Emerging markets may be subject to a greater degree
of political and economic risk than other non-U.S. markets.
An Open-End Fund.
On December 6, 1995, shareholders approved the conversion of your
Fund from a closed-end fund to an open-end mutual fund. On January
15, 1996, the Fund began a continuous public offering of its shares
as an open-end fund. As an open-end mutual fund, it will offer three
classes of shares (A, B or C), which are subject to alternative sales
charges and distribution and/or service fee arrangements.
By now you should have received a statement from the Fund's transfer
agent showing the conversion of your shares. If you wish to redeem your
shares at current net asset value, you will be subject to a 2% fee payable
to the Fund for six months following the conversion on shares purchased
prior to the conversion (including shares acquired through the automatic
reinvestment of dividends and distributions with respect to those shares).
This fee is in place to offset the costs associated with initial redemptions
on the remaining shareholders. Upon expiration of the redemption fee,
shares purchased prior to the conversion may be freely exchanged for
Class A shares of other Prudential mutual funds at net asset value
without any additional sales charge.
<PAGE>
What Went Well.
A Yen For Dollars.
Our best move of the year was correctly anticipating a strengthening of
the U.S. dollar against most currencies. Starting in May, we began selling
our Japanese bonds and used the proceeds to purchase more European bonds.
We also hedged back into the U.S. dollar. We did so for two reasons.
First, the dollar had already fallen to historically low levels compared
to other currencies and it was unlikely that it would weaken further.
Second, we believed that the yen had become overvalued and could
not be sustained given low Japanese interest rates and a sluggish
Japanese economy.
We were right on both counts. By early summer, the dollar had begun
to strengthen compared to other currencies and the yen began to slide.
This trend continued for the remainder of the year.
Strategic Sells.
We sold the last of our Swedish bonds in November after a bond rally
there approached its peak. We likewise eliminated holdings in Japan
in October because of consistently low yields, a weakening yen and an
economy which had apparently "bottomed out." We also substantially
trimmed positions in New Zealand and Australia because these bonds
appeared to us to have become overvalued. These assets were shifted
to European markets where we saw better opportunities.
And Not So Well.
As we stated earlier, 1995 was a very good year for most bond markets
and for your Fund. Looking back, we perhaps could have further enhanced
return by lengthening the duration of the Fund's portfolio more than we
did during the year. Duration is a statistical measure of a fund's
interest rate sensitivity. The longer a fund's duration, the more
likely it is to perform well when interest rates fall, as they did
in 1995.
Sector Breakdown.
The Global Government Plus Fund, Inc.
as of 12/31/95.
(PIE CHART)
Looking Ahead.
Our outlook for world bond markets is positive although there are concerns
that cannot be ignored. On the positive side, the European and U.S.
economies are growing slowly and inflation appears under control. For
the time being, the world's leading central banks, such as the U.S.
Federal Reserve and German Bundesbank, are generally lowering short-term
interest rates to help deflect the possibility of recession. This is a
positive environment for bonds. Japan, however, remains a concern. Japan
has severe economic and fiscal problems as well as rock- bottom bond
yields. Until this changes, we shall be biased towards investments in
European and U.S. dollar-denominated markets -- including the United
States.
1
<PAGE>
President's Letter February 5, 1996
(PICTURE)
Dear Shareholder:
For many investors, 1995 was a profitable year -- most stock and bond
funds enjoyed healthy returns from the U.S. markets. While climbing
returns can tempt even the most skittish investors to start buying
again, it is important to remember that the stock and bond markets go
down just as they go up. At times like these, remember the importance
of working with your Financial Advisor or Registered Representative to
help you find investments that are consistent with your risk tolerance
and time horizon. Your Financial Advisor or Registered Representative
can help you maintain realistic expectations about both the potential
performance and risks associated with your investments.
Shareholder Legislative Action Program.
From time to time we've been informing you about significant legislation
before Congress, such as the American Dream Savings Account, that may
potentially impact mutual fund investors. We want to make it easier
for you to share your views with your Congressional member. So,
beginning in 1996, whenever Congress is considering legislation
that would affect you, we'll send you postage-paid message cards
that you simply drop in the mail if you want to let your senator
or representative know how you want him or her to vote.
Fund Profiles.
Over the past year, we've worked to make your shareholder reports
more interesting, informative and easy to read. This year, we'll be
considering "fund profiles." Some mutual fund companies now offer one
to shareholders along with a full prospectus. The purpose of a fund
profile is to provide a very brief, reader-friendly summary of a
fund's objective, investments, risks and expenses. Would you like
to see fund profiles from us? Please call your Financial Advisor
or Registered Representative to share your views.
As always, thank you for your confidence in Prudential Mutual Funds.
Sincerely,
Richard A. Redeker
President
2
<PAGE>
<PAGE>
Portfolio of Investments as of THE GLOBAL GOVERNMENT PLUS
December 31, 1995 FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description US$ Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS(a)--88.8%
- ------------------------------------------------------------
Australia--2.1%
A$ 4,700 New South Wales Treasury
Corporation,
6.50%, 5/1/06 $ 3,026,877
6,750 Queensland Treasury
Corporation,
6.50%, 6/14/05 4,402,360
------------
7,429,237
- ------------------------------------------------------------
Canada--5.8%
C$ 5,000 British Columbia Provincial
Bond,
7.75%, 6/16/03 3,795,265
Canadian Government Bonds,
13,500 9.00%, 12/1/04 11,147,742
6,200 9.00%, 6/1/25 5,294,678
------------
20,237,685
- ------------------------------------------------------------
Czech Republic--0.2%
CZK 20,000 Skoda Finance,
11.625%, 2/9/98 761,037
- ------------------------------------------------------------
Denmark--6.8%
Danish Government Bonds,
DKr 42,600 8.00%, 5/15/03 8,178,999
57,790 7.00%, 12/15/04 10,353,490
28,250 8.00%, 3/15/06 5,368,853
------------
23,901,342
- ------------------------------------------------------------
France--1.0%
FF 17,000 National Bank of Hungary,
8.00%, 11/12/99 3,382,644
- ------------------------------------------------------------
Germany--10.8%
DM 5,750 DSL Finance BV,
7.375%, 2/15/00 4,345,417
German Government Bonds,
DM 4,140 5.375%, 2/22/99 $ 2,979,852
5,000 5.75%, 8/22/00 3,625,318
21,410 6.75%, 4/22/03 15,813,865
5,300 7.375%, 1/3/05 4,042,341
10,500 6.25%, 1/4/24 6,831,890
------------
37,638,683
- ------------------------------------------------------------
Ireland--3.2%
Irish Government Bonds,
IEP 4,800 9.25%, 7/11/03 8,531,817
1,700 8.00%, 8/18/06 2,808,295
------------
11,340,112
- ------------------------------------------------------------
Italy--4.9%
Lira 2,500,000 Bayerische Landesanstalt Bank,
10.625%, 5/12/00 1,593,394
Italian Government Bonds,
18,500,000 8.50%, 8/1/99 11,069,998
7,500,000 10.00%, 8/1/03 4,604,681
------------
17,268,073
- ------------------------------------------------------------
Netherlands--6.7%
Dutch Government Bonds,
NLG 2,200 7.50%, 6/15/99 1,495,259
4,900 9.00%, 7/1/00 3,535,153
24,000 7.00%, 6/15/05 16,012,476
3,600 7.50%, 1/15/23 2,461,385
------------
23,504,273
- ------------------------------------------------------------
New Zealand--0.8%
NZ$ 4,000 New Zealand Government Bond,
10.00%, 7/15/97 2,685,064
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
3
<PAGE>
<PAGE>
Portfolio of Investments as of THE GLOBAL GOVERNMENT PLUS
December 31, 1995 FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description US$ Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Spain--3.5%
Pts 480,000 Republic of Argentina,
12.80%, 12/9/97 $ 3,879,503
Spanish Government Bonds,
600,000 10.30%, 6/15/02 5,106,692
450,000 8.20%, 2/28/09 3,285,206
------------
12,271,401
- ------------------------------------------------------------
United Kingdom--7.1%
(BP) 2,000 Guaranteed Export Finance
Corporation,
7.25%, 12/15/98 3,123,935
United Kingdom Treasury Bonds,
3,000 9.00%, 3/3/00 5,016,681
6,060 8.00%, 9/25/09 9,693,691
5,250 6.25%, 11/25/10 7,099,607
------------
24,933,914
- ------------------------------------------------------------
United States--35.9%
Corporate Bonds--2.7%
US$ 1,250 Banco Nacional de Commercial
Exterior (Mexico),
7.50%, 7/1/00 1,079,688
2,000 Bancomer SA (Mexico),
8.00%, 7/7/98 1,850,000
Cemex SA (Mexico),
2,300 8.875%, 6/10/98 2,208,000
2,000 9.50%, 9/20/01 1,812,500
2,550 Financira Energetica Nacional,
(Colombia)
9.00%, 11/8/99 2,661,562
------------
9,611,750
------------
Sovereign Bonds--2.9%
Republic of Brazil,
1,900 6.6875%, 1/1/01, IDU, FRB 1,636,375
3,000 6.00%, 9/15/13 1,665,000
2,000 Republic of Colombia,
8.75%, 10/6/99 2,103,128
US$ 2,100 Republic of Ecuador,
6.8125%, 2/28/25, FRB $ 1,060,500
4,650 Republic of Poland,
6.875%, 10/27/24, FRB 3,510,750
------------
9,975,753
------------
Supranational Bond--0.5%
1,800 Corporation Andina de Fomento,
7.375%, 7/21/00 1,804,500
------------
U.S. Government Obligations--29.8%
7,700 United States Treasury Bond,
7.50%, 11/15/24 9,255,631
United States Treasury Notes,
7,750 6.00%, 11/30/97 7,863,847
6,575 6.75%, 5/31/99 6,867,785
27,090 6.75%, 6/30/99 28,325,846
7,000 6.125%, 9/30/00 7,210,000
32,000 5.75%, 8/15/03 32,384,960
10,800 7.875%, 11/15/04 12,501,000
------------
104,409,069
------------
125,801,072
------------
Total long-term investments
(cost US$293,676,856) 311,154,537
------------
SHORT-TERM INVESTMENTS--13.7%
- ------------------------------------------------------------
Australia--1.2%
A$ 5,700 Barclays Bank Time Deposit,
7.125%, 1/5/96 4,241,355
- ------------------------------------------------------------
Czech Republic--0.5%
CZK 45,000 Unilever, Euro Commercial
Paper, (b)
10.40%, 1/17/96 1,676,830
- ------------------------------------------------------------
Italy--0.2%
Lira 1,300,000 Mellon Bank Time Deposit,
10.25%, 1/5/96 819,956
</TABLE>
- -------------------------------------------------------------------------------
4 See Notes to Financial Statements.
<PAGE>
THE GLOBAL GOVERNMENT PLUS FUND, INC.
Portfolio of Investments as of December 31, 1995
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description US$ Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
New Zealand--2.0%
NZ$ 1,700 Mellon Bank Time Deposit,
8.25%, 1/5/96 $ 1,110,610
9,000 New Zealand Government Bond,
9.00%, 11/15/96 5,909,627
------------
7,020,237
- ------------------------------------------------------------
Spain--0.8%
Pts 340,000 Barclays Bank Time Deposit,
9.0625%, 1/5/96 2,804,062
- ------------------------------------------------------------
United States--9.0%
US$ 31,284 Joint Repurchase Agreement
Account,
5.85%, 1/2/96, (Note 4) 31,284,000
------------
Total short-term investments
(cost US$47,825,655) 47,846,440
------------
- ------------------------------------------------------------
Total Investments--102.5%
(cost $341,502,511; Note 3) 359,000,977
Liabilities in excess of other
assets--(2.5%) (8,662,068)
------------
Net Assets--100% $350,338,909
------------
------------
</TABLE>
- ---------------
Portfolio securities are classified according to the security's currency
denomination.
(a) Principal amount segregated as collateral for forward currency contracts.
(b) Percentages quoted represent yields to maturity as of purchase date.
FRB--Floating Rate Bond.
IDU--Interest Due and Unpaid.
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
5
<PAGE>
<PAGE>
Statement of Assets and Liabilities THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
<TABLE>
<S>
<C>
Assets
December 31, 1995
Investments, at value (cost
$341,502,511)...............................................................
$ 359,000,977
Foreign currency, at value (cost
$281,774)..............................................................
283,956
Cash.........................................................................
........................... 623
Interest
receivable...................................................................
.................. 8,685,851
Forward currency contracts--amount receivable from
counterparties....................................... 91,309
Other
assets.......................................................................
..................... 175,769
-----------------
Total
assets.......................................................................
.................. 368,238,485
-----------------
Liabilities
Distribution
payable......................................................................
.............. 9,652,194
Dividend
payable......................................................................
.................. 6,779,229
Forward currency contracts--amount payable to
counterparties............................................ 799,459
Accrued expenses and other
liabilities..................................................................
439,663
Management fee
payable......................................................................
............ 229,031
-----------------
Total
liabilities..................................................................
.................. 17,899,576
-----------------
Net
Assets.......................................................................
....................... $ 350,338,909
-----------------
-----------------
Net assets were comprised of:
Common stock, at
par..........................................................................
....... $ 526,425
Paid-in capital in excess of
par.....................................................................
394,006,793
Cost of 7,000,000 shares held in
treasury............................................................
(50,685,700)
-----------------
343,847,518
Undistributed net investment
income..................................................................
2,754,368
Accumulated net realized loss on
investments.........................................................
(13,047,385)
Net unrealized appreciation on investments and foreign
currencies.................................... 16,784,408
-----------------
Net assets, December 31,
1995...........................................................................
$ 350,338,909
-----------------
-----------------
Net asset value per share:
($350,338,909 / 45,642,508 shares of common stock
outstanding)....................................... $7.68
-----------------
-----------------
</TABLE>
- -------------------------------------------------------------------------------
6 See Notes to Financial Statements.
<PAGE>
<PAGE>
THE GLOBAL GOVERNMENT PLUS FUND, INC.
Statement of Operations
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income December 31, 1995
<S> <C>
Income
Interest and discount earned (net of
foreign
withholding taxes of $55,663)......... $25,453,162
-----------------
Expenses
Management fee........................... 2,570,602
Reports to shareholders.................. 400,000
Custodian's fees and expenses............ 140,000
Transfer agent's fees and expenses....... 125,000
Directors' fees.......................... 94,000
Legal fees and expenses.................. 75,000
Audit fee and expenses................... 72,000
Insurance expense........................ 71,000
Miscellaneous............................ 64,904
-----------------
Total expenses........................ 3,612,506
-----------------
Net investment income....................... 21,840,656
-----------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions.................. 25,951,255
Foreign currency transactions............ 4,643,245
Written options transactions............. (2,543,236)
-----------------
28,051,264
-----------------
Net change in unrealized appreciation on:
Investments.............................. 22,490,162
Foreign currencies....................... 631,249
Written options.......................... 115,131
-----------------
23,236,542
-----------------
Net gain on investments and foreign
currencies............................... 51,287,806
-----------------
Net Increase in Net Assets
Resulting from Operations................... $73,128,462
-----------------
-----------------
</TABLE>
THE GLOBAL GOVERNMENT PLUS FUND, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended December 31,
in Net Assets 1995 1994
<S> <C> <C>
Operations:
Net investment income.......... $ 21,840,656 $ 20,595,065
Net realized gain (loss) on
investment and foreign
currency transactions....... 28,051,264 (36,867,119)
Net change in unrealized
appreciation (depreciation)
on investments and foreign
currency transactions....... 23,236,542 (7,476,303)
------------ ------------
Net increase (decrease) in net
assets resulting from
operations.................. 73,128,462 (23,748,357)
------------ ------------
Dividends and distributions:
Dividends from net investment
income...................... (21,840,656) (10,301,920)
Distribution from net realized
capital gains............... -- (4,634,400)
Distribution in excess of net
investment income........... (9,652,194) --
Tax return of capital
distribution................ -- (10,394,847)
------------ ------------
Total dividends and
distributions.................. (31,492,850) (25,331,167)
------------ ------------
Total increase (decrease)......... 41,635,612 (49,079,524)
Net Assets
Beginning of year................. 308,703,297 357,782,821
------------ ------------
End of year....................... $350,338,909 $308,703,297
------------ ------------
------------ ------------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
7
<PAGE>
Notes to Financial Statements THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
The Global Government Plus Fund, Inc. (the ``Fund'') was organized in Maryland
on April 20, 1987, as a closed-end, non-diversified management investment
company. Investment operations commenced on July 31, 1987. On December 6, 1995,
shareholders approved the conversion of the Fund to an open-end Fund. Effective
January 15, 1996, the Fund began operating as an open-end Fund (Note 6).
The Fund's investment objective is to maximize total return, the components of
which are current income and capital appreciation. The Fund invests primarily
in
investment grade bonds, 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 10% of the Fund's total assets in bonds rated below
investment grade with a minimum rating of B, or in unrated securities of
equivalent quality. The ability of 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 at the mean between the
most recently quoted bid and asked prices provided by principal market makers.
Any security for which the primary market is on an exchange is valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Forward currency
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, as the case may be under triparty repurchase agreements, takes
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
adequecy 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 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 the securities held at 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 debt securities sold during the
year. Accordingly, realized foreign currency gains (losses) are included in the
reported net realized gains on investment transactions.
Net realized gains on foreign currency transactions represent net foreign
exchange gains 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, U.S. and foreign taxes recorded
on the Fund's books and the US dollar equivalent amounts actually received or
paid. Net currency gains (losses) from valuing foreign currency denominated
assets (excluding investments) and liabilities at year end exchange rates are
reflected as a component of net unrealized appreciation on investments and
foreign currencies.
- -------------------------------------------------------------------------------
8
<PAGE>
<PAGE>
Notes to Financial Statements THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
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 on
investments. 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 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.
Options: The Fund may either purchase or write options in order to hedge against
adverse market movements or fluctuations in value caused by changes in
prevailing interest rates or foreign currency exchange rates with respect to
securities or currencies which the Fund currently owns or intends to purchase.
When the Fund purchases an option, it pays a premium and an amount equal to that
premium is recorded as an investment. When the Fund writes an option, it
receives a premium and an amount equal to that premium is recorded as a
liability. The investment or liability is adjusted daily to reflect the current
market value of the option. If an option expires unexercised, the Fund realizes
a gain or loss to the extent of the premium received or paid. If an option is
exercised, the premium received or paid is an adjustment to the proceeds from
the sale or the cost basis of the purchase in determining whether the Fund has
realized a gain or loss. The difference between the premium and the amount
received or paid on effecting a closing purchase or sale transaction is also
treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss
on
written options is presented separately as net realized gain (loss) on written
option transactions.
The Fund, as writer of an option, has no control over whether the underlying
securities or currencies may be sold (called) or purchased (put). As a result,
the Fund bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option. The Fund, as purchaser of
an
option, bears the risk of the potential inability of the counterparties to meet
the terms of their contracts. There were no outstanding options written at
December 31, 1995.
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.
Dividends and Distributions: Dividends are declared quarterly. Distributions of
long-term capital gains, if any, will be declared 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 currencies and loss deferrals.
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 undistributed net investment income by
$12,406,562 and increase accumulated net realized losses on investments by
$12,406,562 for foreign currency gains realized or recognized during the year
ended December 31, 1995. Net investment income, net realized gains and net
assets were not affected by this change.
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 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
- -------------------------------------------------------------------------------
9
<PAGE>
Notes to Financial Statements THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
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 was computed weekly through January 12, 1996 and
payable monthly at the annual rate of 0.75% of the Fund's average weekly net
assets up to US $1 billion and 0.70% of average weekly net assets in excess of
US $1 billion. Effective January 15, 1996, the computation is performed daily
(Note 6).
PMF and PIC are indirect wholly-owned subsidiaries of The Prudential Insurance
Company of America (``Prudential'').
- ------------------------------------------------------------
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments
and options written, for the year ended December 31, 1995 aggregated
$627,326,584 and $619,581,236, respectively.
At December 31, 1995, the Fund had outstanding forward currency contracts to
sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------ --------------- ------------ ---------------
<S> <C> <C> <C>
British Pounds,
expiring
1/24/96......... $ 12,718,897 $ 12,793,075 $ (74,178)
French Francs,
expiring
1/24/96-9/16/96... 10,084,906 10,495,075 (410,169)
German
Deutschemarks,
expiring
1/24/96......... 48,727,275 48,892,076 (164,801)
Irish Punts,
expiring
1/24/96......... 3,905,085 3,921,605 (16,520)
Italian Lira,
expiring
1/5/96.......... 876,349 880,360 (4,011)
Japanese Yen,
expiring
1/24/96......... 5,329,373 5,238,064 91,309
Netherland
Guilders,
expiring
1/24/96......... 25,528,490 25,613,384 (84,894)
Swiss Francs,
expiring
1/24/96......... 14,473,706 14,518,592 (44,886)
--------------- ------------ ---------------
$ 121,644,081 $122,352,231 $(708,150)
--------------- ------------ ---------------
--------------- ------------ ---------------
</TABLE>
Transactions in options written for the year ended December 31, 1995 were as
follows:
<TABLE>
<CAPTION>
Number
of Units Premiums
(000) Received
--------------- -----------
<S> <C> <C>
Options outstanding at
December 31, 1994............ 48,147 $ 531,268
Options written................ 100,002 607,300
Options terminated in closing
purchase transactions........ (131,749) (883,499)
Options exercised.............. (16,400) (255,069)
--------------- -----------
Options outstanding at
December 31, 1995............ 0 0
--------------- -----------
--------------- -----------
</TABLE>
The United States federal income tax basis of the Fund's investments at December
31, 1995 was $342,222,681 and, accordingly, net unrealized appreciation for
United States federal income tax purposes was $16,778,296 (gross unrealized
appreciation--$16,983,383; gross unrealized depreciation--$205,087).
For federal income tax purposes, the Fund had a capital loss carryforward as of
December 31, 1995 of approximately $12,631,300 which will expire in 2002. Such
carryforward is after utilization of approximately $7,264,530 to offset the
Fund's net taxable gains recognized in the year ended December 31, 1995.
Accordingly, no capital gains distribution is expected to be paid to
shareholders until net gains have been realized in excess of such amount.
The Fund has elected to treat approximately $2,362,300 of net capital losses and
approximately $6,843,600 of net currency losses incurred in the two month period
ended December 31, 1994 as having been incurred in the current fiscal year.
- ------------------------------------------------------------
Note 4. 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 December 31, 1995, the
Fund had a 2.7% undivided interest in the joint account. The undivided interest
for the Fund represented $31,284,000 in the principal amount. As of such date,
each repurchase agreement in the joint account and the collateral therefor were
as follows:
Bear, Stearns Co., Inc., 5.80%, in the principal amount of $262,000,000,
repurchase price $262,168,844, due 1/2/96. The value of the collateral including
accrued interest was $267,947,172.
- -------------------------------------------------------------------------------
10
<PAGE>
<PAGE>
Notes to Financial Statements THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
BT Securities Corp., 5.75%, in the principal amount of $61,765,000, repurchase
price $61,804,461, due 1/2/96. The value of the collateral including accrued
interest was $63,059,883.
Goldman, Sachs & Co., 5.90%, in the principal amount of $365,000,000, repurchase
price $365,239,278, due 1/2/96. The value of the collateral including accrued
interest was $372,300,053.
Morgan Stanley & Co., Inc., 5.89%, in the principal amount of $103,000,000,
repurchase price $103,067,408, due 1/2/96. The value of the collateral including
accrued interest was $105,192,608.
Smith Barney, Inc., 5.83%, in the principal amount of $365,000,000, repurchase
price $365,236,439, due 1/2/96. The value of the collateral including accrued
interest was $372,300,416.
- ------------------------------------------------------------
Note 5. Capital
There are 200 million shares of $.01 par value common stock authorized. Of the
45,642,508 shares outstanding at December 31, 1995, Prudential owned 11,000
shares.
Note 6. Subsequent Event
The Board of Directors and shareholders of the Fund approved the conversion of
the Fund from a closed-end fund to an open-end fund and approved specific
changes to the Fund's Articles of Incorporation and investment restrictions to
facilitate the conversion. Effective January 15, 1996 the Fund began operations
as an open-end fund and began offering three classes of shares (Class A, B and
C
shares) through Prudential Securities Incorporated, an indirect wholly-owned
subsidiary of Prudential. Accordingly, the Fund will compute its net asset value
and accept orders to redeem its outstanding shares on a daily basis. However,
a
2% redemption fee, payable to the Fund, will be imposed on all redemptions of
Fund shares acquired prior to the conversion during the first six months
following the conversion. Also in conjunction with the conversion, Prudential
Mutual Fund Services, Inc., a wholly-owned subsidiary of PMF, commenced serving
as the Fund's transfer agent.
Primarily as a result of Fund share redemptions subsequent to the conversion,
total net assets of the Fund declined to approximately $204,984,000 as of
February 26, 1996.
- -------------------------------------------------------------------------------
11
<PAGE>
<PAGE>
Notes to Financial Statements THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
Note 7. Quarterly Data
(Unaudited)
<TABLE>
<CAPTION>
Net realized
and
unrealized
gains
(losses) on Net increase (decrease)
investments in net assets
Quarterly Net Investment and
foreign resulting from
period Total income
currencies operations
ended income Amount Per share Amount
Per share Amount Per share
<S> <C> <C> <C> <C>
<C> <C> <C>
- --------------- ---------- ------------------------
- -------------------------- --------------------------
March 31, 1994 $6,244,690 $5,303,162 $0.12 $(18,489,710)
$ (0.41) $(13,186,548) $ (0.29)
June 30, 1994 6,041,022 5,135,895 0.11 (10,804,079)
(0.23) (5,668,184) (0.12)
Sept. 30, 1994 5,910,445 4,885,074 0.11 (6,032,968)
(0.13) (1,147,894) (0.02)
Dec. 31, 1994 6,073,987 5,270,934 0.11 (9,016,665)
(0.20) (3,745,731) (0.09)
March 31, 1995 5,540,900 4,672,947 0.10 (4,296,139)
(0.09) 376,808 0.01
June 30, 1995 6,265,137 5,424,582 0.12 41,642,365
0.91 47,066,947 1.03
Sept. 30, 1995 6,774,331 5,868,497 0.13 3,726,139
0.08 9,594,636 0.21
Dec. 31, 1995 6,872,794 5,874,630 0.13 10,215,441
0.23 16,090,071 0.36
<CAPTION>
Dividends
Quarterly and Share
period distributions price
ended Amount Per share High Low
<S> <C> <C> <C> <C>
- --------------- ------------------------- ------------
March 31, 1994 $10,040,927 $ 0.22 $7 1/4 $6 1/4
June 30, 1994 5,477,101 0.12 6 1/2 5 5/8
Sept. 30, 1994 5,020,675 0.11 6 1/4 5 3/4
Dec. 31, 1994 4,792,464 0.11 6 5 1/2
March 31, 1995 4,792,273 0.105 6 1/8 5 1/2
June 30, 1995 4,792,273 0.105 6 5/8 5 7/8
Sept. 30, 1995 5,476,881 0.120 7 3/8 6
Dec. 31, 1995 16,431,423 0.360 7 3/4 7 1/8
</TABLE>
- -------------------------------------------------------------------------------
12
<PAGE>
<PAGE>
Financial Highlights THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended December 31,
- ------------------------------------------------------------
1995 1994
1993 1992 1991
<S> <C> <C>
<C> <C> <C>
-------- --------
-------- -------- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year................... $ 6.76 $ 7.84
$ 7.38 $ 8.28 $ 8.25
-------- --------
-------- -------- --------
Net investment income................................ .48 .45
.55 .67 .66
Net realized and unrealized gain (loss) on
investments and foreign currencies................ 1.13 (.97)
.74 (.70) .09
-------- --------
-------- -------- --------
Total from investment operations.................. 1.61 (.52)
1.29 (.03) .75
-------- --------
-------- -------- --------
Dividends from net investment income................. (.48) (.23)
(.23) (.67) (.66)
Distributions from net realized capital gains........ -- (.10)
(.54) (.20) --
Distributions in excess of net investment income (.21) --
-- -- --
Distributions in excess of net capital gains......... -- --
(.06) -- --
Tax return of capital distributions.................. -- (.23)
-- -- (.06)
-------- --------
-------- -------- --------
Total dividends and distributions................. (.69) (.56)
(.83) (.87) (.72)
-------- --------
-------- -------- --------
Net asset value, end of year......................... $ 7.68 $ 6.76
$ 7.84 $ 7.38 $ 8.28
-------- --------
-------- -------- --------
-------- --------
-------- -------- --------
Per share market price, end of year.................. $ 7.375 $ 5.625
$ 7.00 $ 7.00 $ 7.75
-------- --------
-------- -------- --------
-------- --------
-------- -------- --------
TOTAL INVESTMENT RETURN(a)........................... 44.39% (12.04)%
11.57% 1.25% 17.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)........................ $350,339 $308,703
$357,783 $336,780 $377,911
Average net assets (000)............................. $342,741 $331,421
$361,374 $364,037 $364,072
Ratio of expenses to average net assets.............. 1.05% 1.11%
1.07% 1.15% 1.29%
Ratio of net investment income to average net
assets............................................ 6.37% 6.21%
6.93% 8.36% 8.30%
Portfolio turnover rate.............................. 203% 526%
441% 346% 267%
</TABLE>
- ---------------
(a) Total investment return is calculated 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 year 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.
Contained above is selected data for a share of common stock outstanding,
total investment return, ratios to average net assets and other
supplemental data for the years indicated. This information has been
determined based upon information provided in the financial statements and
market price data for the Fund's shares.
- -------------------------------------------------------------------------------
See Notes to Financial Statements. 13
<PAGE>
<PAGE>
Report of Independent Accountants THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
The Global Government Plus Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Global Government Plus Fund,
Inc. (the ``Fund'') at December 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
``financial statements'') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 28, 1996
- -------------------------------------------------------------------------------
14
<PAGE>
Supplemental Proxy Information THE GLOBAL GOVERNMENT PLUS FUND, INC.
- -------------------------------------------------------------------------------
A Special Meeting of Shareholders of The Global Government Plus Fund, Inc. (The
``Fund'') was held on Wednesday, December 6, 1995 at the offices of Prudential
Securities Incorporated, One Seaport Plaza, New York, New York. The meeting was
held for the following purposes:
<TABLE>
<S> <C>
(1) To approve a proposal to convert the Fund to an open-end investment
company.
(2) To approve changes to investment restrictions of the Fund as follows:
a. To increase the Fund's borrowing capabilities.
b. To amend the Fund's restrictions regarding restricted securities.
c. To clarify the Fund's loan policies.
(3) If Proposal No. 1 is approved, to approve a new Management Agreement
between the Fund and Prudential Mutual Fund
Management, Inc. and a new Subadvisory Agreement between Prudential
Mutual Fund Management, Inc. and The Prudential
Investment Corporation.
(4) If proposal No. 1 is approved, to elect seven Directors.
(5) If Proposal No. 1 is approved, to approve a Plan of Distribution
pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended.
(6) If Proposal No. 1 is approved, to approve an amendment to the Fund's
Articles of Incorporation to permit the issuance
of multiple classes of shares.
(7) To transact such other business as may properly come before the meeting
or any adjournment thereof.
</TABLE>
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Votes for Votes Against
Votes Withheld Abstentions
---------- -------------
-------------- -----------
<S> <C> <C>
<C> <C>
(1) 30,618,539 833,457
-- 969,673
(2a) 24,071,153 7,112,842
-- 1,236,952
(2b) 23,727,491 7,359,516
-- 1,333,941
(2c) 24,465,991 6,681,834
-- 1,273,124
(3) 30,141,036 1,075,371
-- 1,204,541
(4)
Edward D. Beach 29,234,021 --
3,186,928 --
Harry A. Jacobs, Jr. 29,203,609 --
3,217,340 --
Donald D. Lennox 29,282,664 --
3,138,285 --
Douglas H. McCorkindale 29,232,657 --
3,188,292 --
Thomas T. Mooney 29,314,333 --
3,106,616 --
Richard A. Redeker 29,261,311 --
3,159,638 --
Louis A. Weil, III 29,255,763 --
3,165,186 --
(5) 28,203,555 2,860,840
-- 1,356,553
(6) 30,052,174 971,192
-- 1,397,582
(7) There was no other business voted upon at the Special Meeting of
Shareholders.
</TABLE>
- -------------------------------------------------------------------------------
15
<PAGE>
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
Internet Address:
http:\\www.prudential.com
Directors
Edward D. Beach
Harry A. Jacobs, Jr.
Donald D. Lennox
Douglas H. McCorkindale
Thomas T. Mooney
Richard A. Redeker
Louis A. Weil, III
Robert F Gunia.
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Susan C. Cote', Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Auditors
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Dechert Price & Rhoads
1500 K Street, NW
Washngton, D.C. 20005
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
<PAGE>
- --The Global Government Plus Fund, Inc.
==J.P. Morgan Global Traded Government Bond Index
The Global Government Plus Fund, Inc. and the
JP Morgan Global Traded Government Bond Index:
Comparing a $10,000 Investment.
Average Annual
Total Returns
- ------------------
With Sales Load
8.5% Since Inception
8.2% for 5 Years
20.2% for 1 Year
Class A
(CHART)
Without Sales Load
9.1% Since Inception
9.1% for 5 Years
25.1% for 1 Year
Past performance is no guarantee of future performance, and an investor's
shares, when redeemed, may be worth more or less than their original
value. The Fund operated as a closed- end fund as of 12/31/95 and shares
of the Fund traded on the New York Stock Exchange for all periods shown.
The Fund commenced operations as an open-end fund on 1/15/96. Concurrent
with open-ending, the Fund is subject to higher operating expenses
which would have resulted in lower returns if applied to past performance.
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in The Global Government Plus Fund, Inc.
with a similar investment in the J.P. Morgan Global Traded Government
Bond Index (the Global 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 (December 31), as measured on a
quarterly basis beginning 7/31/87. For purposes of the graphs and,
unless otherwise indicated, it has been assumed that (a) the current
maximum sales charge (4%) was deducted from the initial $10,000
investment in Class A shares, (b) all recurring fees (including
management fees) were deducted and (c) all dividends and distributions
were reinvested.
The Global Index is a weighted index of the total return of government
bonds from 13 countries, including Australia, Belgium, Canada, Denmark,
France, Germany, Italy, Japan, Netherlands, Spain, Sweden, United
Kingdom and the United States and provides a broad measure of market
performance. The Global Bond 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 that comprise the Global Bond Index may differ
substantially from the securities in the Fund's portfolio. The Global
Bond Index is not the only index that may be used to characterize
performance of global bond funds and other indexes may portray
different comparative performance.
<PAGE>
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
378907109 MF170E
Cat# 42M1825
