(ICON)
Global
Utility
Fund, Inc.
SEMI
ANNUAL
REPORT
March 31, 1999
(LOGO)
<PAGE>
Global Utility Fund, Inc.
Performance At A Glance
The Global Utility Fund's Class A shares gained 12.6% for
the six months ended
March 31, 1999, compared to a 19.1% advance in the all
equity Financial Times
World Utilities Index. As shown below, the Fund's record
since its inception
compares favorably with relevant indexes and Lipper
averages.
Cumulative Total Returns1
As of 3/31/99
<TABLE>
<CAPTION>
Since
6 Mos. 1 Year 5 Years
Inception2
<S> <C> <C> <C>
<C>
Class A 12.58% 5.98%
101.70% 240.63%
Class B 12.09 5.13
94.15 177.57
Class C 12.09 5.13 N/A
90.89
Class Z 12.64 6.19 N/A
52.64
FT/S&P Actuaries
World Utilities Index3 19.10 18.88
124.30 **
Lipper Utility Avg4 7.53 3.97
95.00 ***
</TABLE>
Average Annual Total Returns1
As of 3/31/99
<TABLE>
<CAPTION>
Since
1 Year 5 Years
Inception2
<S> <C> <C>
<C>
Class A 0.68%
13.89% 13.55%
Class B 0.13
14.07 13.55
Class C 3.07 N/A
14.63
Class Z 6.19 N/A
20.32
</TABLE>
Past performance is not indicative of future results.
Principal and investment
return will fluctuate so that an investor's shares, when
redeemed, may be
worth more or less than their original cost.
1 Source: Prudential Investments Fund Management 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 5% for Class A
shares, and a
declining contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1% and
1% for six years for Class B shares. 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 fee.
2 Inception dates: Class A, 1/2/90; Class B, 3/18/91; Class
C, 8/1/94; and
Class Z, 12/16/96. The Fund operated as a closed-end fund
from its inception
until February 1, 1991.
3 Source: Goldman, Sachs & Co. The Financial Times (FT)/S&P
Actuaries World
Utilities Index is an unmanaged index and is currently
comprised of
approximately 183 world utility stocks representing
approximately 29
countries. Investors cannot invest directly in an index.
4 Lipper average returns are for all funds in each share
class for the six-
month, one-, and five-year periods in the Utility Fund
category.
**The FT/S&P Actuaries World Utilities Index Since Inception
returns are
191.39% for Class A; 208.91% for Class B; 121.62% for Class
C; and 81.93% for
Class Z.
***Lipper Since Inception returns are 189.14% for Class A;
175.67% for
Class B; 94.84% for Class C; and 42.83% for Class Z based on
all funds in
each share class.
How Investments Compared.
(As of 3/31/99)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper, Inc. 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
returns for several Lipper mutual fund categories to show
you that reaching
for higher returns means tolerating more risk. The greater
the risk, the
larger the potential reward or loss. In addition, we've
included historical
20-year average annual returns. These returns assume the
reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great deal. Investors
have received
higher historical total returns from stocks than from most
other investments.
Smaller capitalization stocks offer greater potential for
long-term growth,
but may be more volatile than larger capitalization stocks.
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.
General Municipal Debt Funds invest in bonds issued by state
governments,
state agencies and/or municipalities. This investment
provides income that
is usually exempt from federal and state income taxes.
U.S. Taxable Money 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.
<PAGE>
Portfolio Manager's Report
(PHOTO)
William C.S. Hicks
Fund Manager
Investment Goals and Style
The Global Utility Fund invests primarily in the stocks and
bonds of utility
companies from around the world. The Fund seeks to provide
total return,
without incurring undue risk, by investing primarily in
income-producing
securities. There can be no assurance that the Fund will be
able to achieve
its investment objective. Investors should also keep in mind
that there are
special risks associated with foreign investing (such as
currency fluctuations
and social, political, and economic developments) and with
investing in
utility securities.
Portfolio Composition
Expressed as a percentage of net assets as of 3/31/99.
(PIE CHART)
Merger mania
The Fund's investments in the dynamic telecommunications
area fared well
during our reporting period. International mergers continued
as represented
by Vodafone Group PLC/AirTouch Communications, SBC
Communications/Ameritech,
Bell Atlantic/GTE, and Lucent Technologies/Ascend
Communications combinations.
Additional alliances are expected to produce benefits to
other companies, such
as the agreement between AT&T and British Telecommunications
(BTY) that will
enable these companies to provide more data, voice, and
Internet services to
multinational corporations. Furthermore, AT&T and BTY are
negotiating for a
joint 30% stake in Japan Telecom in order to give a Western
presence in the
fast growing, $110 billion-a-year Japanese
telecommunications market.
Electric utilities poised to shine
The slower-growing electric utility industry has also been
characterized by
domestic consolidation and the combination of several
electric and gas
companies. This trend should lead to utility companies
offering to manage
an industrial company's energy requirements, proposing
reduced energy costs
and shared earnings from the realized savings. Long-term,
domestic industry
growth is estimated at less than 2% per annum over the next
10 years, so
companies may continue to acquire foreign assets. Companies
with the lowest
costs, favorable growth territories, and imaginative
management will deliver
the best future investment results.
A three-part fixed-income strategy
We continue to pursue a three-part strategy in the fixed-
income portfolio of
the Global Utility Fund. The first theme is the close
scrutiny of emerging
markets for investment opportunities. The securities
purchased in the past
to implement this theme have severely hurt performance
during the last year
since bonds of emerging market issuers were affected by the
Russian default,
and by concerns over the spreading of the Asian flu. Our
second theme is the
pursuit of companies with respectable operating histories in
developed
countries--countries with investment-grade ratings.
In the future, we expect to pursue a third theme, where the
Fund invests in
companies that are privatizing in both developed and
emerging countries. We
believe that improvements in costs and operations by these
companies will
result in higher credit quality.
<PAGE>
What Went Well
Benefitting from telecommunications companies
Our Fund benefitted from gains in MCI WorldCom, Sprint, and
AT&T. Cellular
companies were particularly dynamic, led by internationally
based Vodafone
and AirTouch Communications. Some of the foreign and
telephone issues also
contributed meaningfully, as Telmex rebounded as did BCE,
Telecom Italia
S.p.A, and Telecom New Zealand. Lucent Technologies, the
leading telecom
equipment manufacturer, reported strong earnings and
meaningful price
appreciation over this period (+56%).
Portfolio Breakdown
Breakdown of net assets by country as of 3/31/99.
United States 61.31%
United Kingdom 8.66
Italy 6.02
Canada 5.49
Spain 3.60
The Philippines 1.84
Argentina 1.59
Finland 1.40
Australia 1.17
France 1.09
Brazil 1.05
Chile 0.99
Greece 0.91
Germany 0.89
Mexico 0.88
China 0.85
India 0.76
Poland 0.61
South Korea 0.60
Portugal 0.59
New Zealand 0.53
Liabilities in excess of
other assets (0.83)
-------
100.00%
-------
-------
And Not So Well
Traditional electric utilities lagged
The Fund's holdings in the traditional electric utility
sector lagged the
overall portfolio performance, despite reasonable earnings
gains. Also,
some of our pipeline companies were lackluster, and our
emerging market
stocks were mixed.
Five Largest Holdings
Expressed as a percentage of net assets as of 3/31/99
MCI Worldcom, Inc. 6.6%
Telecommunications
Telecom Italia S.p.A. Risp 4.0
Telecommunications
SBC Communications Inc. 4.0
Telecommunications
AT&T Corp. 3.5
Telecommunications
Scottish Power PLC 2.5
Electric Utility
Looking Ahead
Taking the industry dynamics into consideration, we continue
to maintain our
largest sector bet in telecom where the dynamics are
favorable--albeit
somewhat more volatile and technologically challenging. The
telecom sector
is 49% of the total equity assets, as compared to 42% in the
preceding period.
Cellular telephones continue to increase, and we retain our
interest in
Vodafone/AirTouch Communications which will soon merge their
operations
throughout the world. The environment for oil and gas prices
has stabilized,
and we continue to hold interests in foreign and domestic
producers where we
believe earnings may surprise on the upside despite a
difficult pricing
environment.
Although the electric utility industry has been
disappointing recently, we
believe price levels may now be low enough to re-evaluate
some of the better
companies. Therefore, in the coming months we will be
looking for fresh new
candidates that are available at historically low relative
multiples.
In summary, we see a number of attractive future investment
candidates in the
evolving and growing international utilities industries.
Thank you for your
continuing support.
- ------------------------------------------------------------
- -------------------
1
<PAGE>
Portfolio of Investments as of March 31, 1999
(Unaudited) GLOBAL
UTILITY FUND, INC.
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
US$
Value
Shares Description (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--99.2%
COMMON STOCKS--76.2%
- ------------------------------------------------------------
Electrical Utilities--16.9%
60,000 CMS Energy Corp. $
2,403,750
180,000 COPEL (ADR-Peferred B
Shares)(Brazil)
1,350,000
300,000 DPL, Inc.
4,950,000
130,000 DQE, Inc.
4,988,750
100,000 DTE Energy Co.
3,843,750
200,000 Endesa S.A. (ADR) (Spain)
4,975,000
187,800 Espoon Sahko (ADR) (Finland)
4,157,124
150,000 Huaneng Power International, Inc.*
(ADR) (China)
1,490,625
140,000 Korea Electric Power Corp. (ADR)
(South Korea)
1,776,250
100,000 NIPSCO Industries, Inc.
2,700,000
70,000 Pinnacle West Capital Corp.
2,546,250
850,000 Scottish Power PLC (United Kingdom)
7,432,479
277,300 Shandong Huaneng Power Ltd. (ADR)
(China)
1,039,875
90,000 Texas Utilities Holding Co.
3,751,875
50,000 VEBA AG (Germany)
2,629,314
-------
- -----
50,035,042
- ------------------------------------------------------------
Gas Utilities--11.1%
350,000 Australian Gas Light Co. (Australia)
2,485,548
125,000 El Paso Energy Corp.
4,085,938
100,000 Enron Corp.
6,425,000
20,000 Equitable Resources, Inc.
521,250
50,000 MCN Energy Group, Inc.
803,125
54,426 NTL Incorporated*
4,430,617
200,000 TransCanada Pipelines Ltd. (Canada)
2,544,613
250,000 Westcoast Energy, Inc. (Canada)
4,890,945
100,000 Williams Companies, Inc.
3,950,000
90,000 YPF Sociedad Anonima (ADR-Class D
Shares) (Argentina)
2,840,625
-------
- -----
32,977,661
Telecommunications--41.6%
65,000 AirTouch Communications, Inc.* $
6,280,625
130,000 AT&T Corp.
10,375,625
120,000 BCE, Inc. (Canada)
5,317,500
75,000 BCT Telus Communications, Inc.
(Canada) (Voting)
1,834,104
25,000 BCT Telus Communications, Inc.
(Canada) (Non-voting)
590,714
140,000 Bell Atlantic Corp.
7,236,250
18,000 British Telecommunications PLC
(United Kingdom)
2,953,080
101,096 Cia Telecom de Chile, S.A., (ADR)
(Chile)
2,382,074
111,222 Hellenic Telecom Org. (Greece)
2,697,082
220,000 MCI WorldCom, Inc.*
19,476,875
40,000 Portugal Telecom, S.A. (ADS)
(Portugal)
1,752,500
250,000 SBC Communications Inc.
11,781,250
70,000 Sprint Corp.
6,868,750
35,000 Sprint Corp., PCS Group
1,550,938
40,000 Telecom Corp. New Zealand Ltd. (ADR)
(New Zealand)
1,560,000
500,000 Telecom Italia Mobile S.P.A. (Italy)
3,363,579
2,000,000 Telecom Italia S.p.A. Risp
(Nonconvertible) (Italy)
11,877,805
44,508 Telefonica, S.A. (ADR) (Spain)
5,685,897
40,000 Telefonos de Mexico, S.A. (ADR -
Class L Shares) (Mexico)
2,620,000
331,100 Telekomunikacja Polska, S.A. (GDR)*
(Poland)
1,796,217
110,000 US West Inc.
6,056,875
220,000 Videsh Sanchar Nigam Ltd. (GDR)
(India)
2,244,000
36,000 Vodafone Group PLC (ADR)
(United Kingdom)
6,759,000
-------
- -----
123,060,740
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 2
<PAGE>
Portfolio of Investments as of March 31, 1999
(Unaudited) GLOBAL
UTILITY FUND, INC.
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
US$
Value
Shares Description (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
Water Utilities & Other--6.6%
28,000 Alcatel Alsthom (France) $
3,219,965
167,800 American Water Works Co., Inc.
4,876,688
280,000 Anglian Water PLC (United Kingdom)
3,433,105
41,000 ENI S.p.A. (ADR) (Italy)
2,588,125
50,000 Lucent Technologies, Inc.
5,387,500
-------
- -----
19,505,383
-------
- -----
Total common stocks
(cost $124,146,937)
225,578,826
-------
- -----
- ------------------------------------------------------------
PREFERRED STOCKS--1.5%
Philippine Long Distance Telephone
Co. (The Philippines)
43,700 $3.50 Conv. Ser. III (GDS)
2,075,750
92,216 5.75% Conv. Ser. II (GDS)
2,427,363
-------
- -----
Total preferred stocks
(cost $4,189,000)
4,503,113
-------
- -----
-------------------------------------------------------
- -----
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000)
<S> <C> <C> <C>
DEBT OBLIGATIONS--21.5%
CORPORATE BONDS--20.8%
- ------------------------------------------------------------
Electrical Utilities--13.5%
Ba1 $ 1,000 AES Corp.,
8.375%, 8/15/07
981,250
A2 1,000 Alabama Power Co.,
5.35%, 11/15/03
981,650
NR 1,000 Arizona Public Service Co.,
6.25%, 1/15/05
1,003,280
NR 1,000 Cleveland Elec. Illum. Co.,
7.43%, 11/1/09
1,051,170
Ba3 1,000 CMS Energy Corp.,
8.125%, 5/15/02
1,028,090
NR 1,000D Compania De Transporte
Energia,
9.25%, 4/1/08 (Brazil)
911,250
A1 $ 1,000 Consolidated Edison Co. of
NY, Inc.,
7.625%, 3/1/04 $
1,079,770
NR 1,000D CSW Investments,
7.45%, 8/1/06
(United Kingdom)
1,064,790
Aa3 1,000 Duke Energy Corp.,
5.875%, 6/1/01
1,006,630
Baa1 1,000D Eastern Energy Limited,
6.75%, 12/1/06
(Australia)
992,450
Ba2 1,000 El Paso Electric Co.,
8.25%, 2/1/03, Ser. C
1,059,660
Baa1 1,000D Empresa Electrica del Norte
Grande S.A.,
7.75%, 3/15/06 (Chile)
545,000
Florida Power Corp.,
Aa3 500 6.00%, 7/1/03
504,935
A1 650 6.75%, 2/1/28
647,745
Baa3 1,000 Gulf States Utilities Co.,
8.25%, 4/1/04
1,087,400
Baa1 1,000 Hyder PLC,
6.875%, 12/15/07
(United Kingdom)
1,009,900
Ba1 1,000D Inversora Electrica Buenos
Aires S.A.,
9.00%, 9/16/04
(Argentina)
830,000
A1 1,500 Monongahela Power Co.,
7.375%, 7/1/02
1,558,560
Northern States Power Co.,
Aa3 1,000 5.75%, 12/1/00
1,004,500
Aa3 1,000 6.50%, 3/1/28
973,890
Baa3 1,000 NRG Energy, Inc.,
7.50%, 6/15/07
1,031,120
Aa3 640 Oklahoma Gas & Electric Co.,
6.50%, 4/15/28
619,398
Baa2 1,000 PP&L Capital Funding Inc.,
6.79%, 11/22/04
981,270
Ba1 1,000 Public Service Co.,
7.10%, 8/1/05
1,003,970
Baa1 1,000 Puget Sound Energy Inc.,
6.46%, 3/9/09
1,013,210
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of March 31, 1999
(Unaudited) GLOBAL
UTILITY FUND, INC.
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
Principal
Moody's Amount US$
Value
Rating (000) Description
(Note 1)
<S> <C> <C> <C>
- ------------------------------------------------------------
Electrical Utilities (cont'd.)
A2 $ 1,000D Quebec Hydro,
7.50%, 4/1/16 (Canada) $
1,091,040
Baa1 1,000D Southern Investments PLC,
6.80%, 12/1/06
(United Kingdom)
1,015,830
Aa3 2,000 Southwestern Electric Power Co.,
5.25%, 4/1/00
1,993,880
Aa2 1,000 Southwestern Public Service Co.,
7.25%, 7/15/04
1,059,940
Baa3 1,000 System Energy Resources,
Inc.,
7.71%, 8/1/01
1,035,640
Aa2 1,000 Tampa Electric Co.,
7.75%, 11/1/22
1,061,280
A3 1,000 Texas Utilities Electric Co.,
9.27%, 1/14/00
1,029,980
Baa3 1,000 Texas-New Mexico Power Co.,
10.75%, 9/15/03
1,063,220
A2 1,000D United Utilities PLC,
6.45%, 4/1/08
(United Kingdom)
1,000,950
A2 2,000 Virginia Electric & Power
Co.,
6.625%, 4/1/03
2,064,380
Baa3 918 W3A Funding Corp.,
8.09%, 1/2/17
964,976
Aa3 1,000 Wisconsin Electric Power Co.,
6.625%, 11/15/06
1,037,040
Aa3 500 Wisconsin Power & Light Co.,
5.70%, 10/15/08
489,810
Baa2 1,000D Yorkshire Power Finance Ltd.,
6.496%, 2/25/08
(United Kingdom)
964,950
-----
- --------
39,843,804
- ------------------------------------------------------------
Gas Distribution & Other Related Industries--1.8%
Baa2 1,000 El Paso Natural Gas Co.,
7.50%, 11/15/26
1,045,900
Baa2 1,000 Enron Corp.,
7.00%, 8/15/23
943,190
Ba3 1,000D Metrogas, S.A., Ser. B,
10.875%, 5/15/01
(Argentina)
1,025,000
A2 1,600 Michigan Consolidated Gas
Co., 8.25%, 5/1/14
1,795,456
Aa2 $ 535 Wisconsin Gas Co.,
5.50%, 1/15/09 $
509,550
-----
- --------
5,319,096
- ------------------------------------------------------------
Telecommunications, Media & Related Industries--5.5%
A1 1,000 AT&T Corp.,
7.75%, 3/1/07
1,107,570
Aaa 2,000 BellSouth Telecommunications,
7.00%, 10/1/25
2,064,080
Baa1 1,000 Century Telephone
Enterprises, Inc.,
6.30%, 1/15/08
995,840
NR 1,000D Comtel Brasileira Ltd.,
10.75%, 9/26/04 (Brazil)
835,000
Baa1 1,000 GTE Corp.,
7.51%, 4/1/09
1,096,610
A2 1,000 GTE Florida, Inc.,
7.25%, 10/15/25
1,040,270
Aa1 1,000 Indiana Bell Telephone Co.,
Inc.,
7.30%, 8/15/26
1,076,850
Aa2 1,000 New Jersey Bell Telephone Co.,
8.00%, 6/1/22
1,144,530
A2 1,000 New York Telephone Co.,
6.00%, 4/15/08
993,360
A1 2,000 Pacific Bell,
6.625%, 11/1/09
2,075,640
Ba2 1,000D Philippine Long Distance
Telephone Co.,
9.25%, 6/30/06
(The Philippines)
940,000
Baa1 1,000 Sprint Capital Corp.,
5.70%, 11/15/03
986,900
A3 1,000 US West Inc.,
6.375%, 7/15/08
1,017,320
Baa2 1,000 Worldcom, Inc.,
6.40%, 8/15/05
1,011,660
-----
- --------
16,385,630
-----
- --------
Total corporate bonds
(cost $61,533,303)
61,548,530
-----
- --------
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of March 31, 1999
(Unaudited) GLOBAL
UTILITY FUND, INC.
- ------------------------------------------------------------
- -------------------
- ------------------------------------------------------------
- -------------------
<TABLE>
<CAPTION>
US$
Value
Shares Description (Note
1)
<C> <S> <C>
- ------------------------------------------------------------
U.S. GOVERNMENT SECURITIES--0.7%
$ 2,000 United States Treasury Notes,
5.75%, 8/15/03
(cost $2,042,188) $
2,040,620
-------
- -----
Total debt obligations
(cost $63,575,491)
63,589,150
-------
- -----
Total long-term investments
(cost $191,911,428)
293,671,089
-------
- -----
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.6%
REPURCHASE AGREEMENT--1.6%
4,848 ABN AMRO, 4.90%, due 4/1/99 in the
amount of $4,848,660; (cost
$4,848,000; collateralized by
$4,678,000 U.S. Treasury Notes,
6.125%, due 8/15/07, value
including accrued
interest-$4,923,337)
4,848,000
- ------------------------------------------------------------
Total Investments--100.8%
(cost $196,759,428; Note 4)
298,519,089
Liabilities in excess of other
assets--(0.8%)
(2,463,391)
-------
- -----
Net Assets--100%
$296,055,698
-------
- -----
-------
- -----
</TABLE>
- ---------------
*--Non-income-producing security.
D--US$ Denominated Bonds.
ADR--American Depository Receipts.
ADS--American Depository Shares.
GDR--Global Depository Receipts.
GDS--Global Depository Shares.
NR--Not rated by Moody's or Standard & Poor's.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 5
<PAGE>
Statement of Assets and Liabilities (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Assets
March 31, 1999
<S>
<C>
Investments, at value (cost
$196,759,428)...............................................
................... $298,519,089
Foreign currency, at value (cost
$45,037)....................................................
.............. 45,024
Cash........................................................
...............................................
20,308
Dividends and interest
receivable..................................................
........................ 1,900,652
Withholding taxes
receivable..................................................
............................. 48,071
Receivable for Fund shares
sold........................................................
.................... 35,613
Other
assets......................................................
......................................... 4,925
- --------------
Total
assets......................................................
...................................... 300,573,682
- --------------
Liabilities
Payable for investments
purchased...................................................
....................... 2,953,080
Payable for Fund shares
reacquired..................................................
....................... 1,148,615
Accrued
expenses....................................................
....................................... 208,204
Distribution fee
payable.....................................................
.............................. 163,623
Withholding taxes
payable.....................................................
............................. 27,597
Deferred director's
fee.........................................................
........................... 12,571
Management fee
payable.....................................................
................................ 4,294
- --------------
Total
liabilities.................................................
...................................... 4,517,984
- --------------
Net
Assets......................................................
...........................................
$296,055,698
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par.........................................................
........................... $ 16,732
Paid-in capital in excess of
par.........................................................
............... 185,918,818
- --------------
185,935,550
Distributions in excess of net investment
income......................................................
.. (559,400)
Accumulated net realized gains on investments and foreign
currency transactions.........................
8,920,534
Net unrealized appreciation on investments and foreign
currencies.......................................
101,759,014
- --------------
Net assets, March 31,
1999........................................................
......................... $296,055,698
- --------------
- --------------
Class A:
Net asset value and redemption price per share
($136,208,668 / 7,697,409 shares of common stock
issued and outstanding).............................
$17.70
Maximum sales charge (5% of offering
price)......................................................
....... .93
Maximum offering price to
public......................................................
.................. $18.63
- --------------
- --------------
Class B:
Net asset value, offering price and redemption price per
share
($151,880,156 / 8,585,258 shares of common stock
issued and outstanding).............................
$17.69
- --------------
- --------------
Class C:
Net asset value and redemption price per share
($1,175,020 / 66,422 shares of common stock issued and
outstanding)..................................
$17.69
Sales charge (1% of offering
price)......................................................
............... .18
Offering price to
public......................................................
.......................... $17.87
- --------------
- --------------
Class Z:
Net asset value, offering price and redemption price per
share
($6,791,854 / 383,486 shares of common stock issued
and outstanding).................................
$17.71
- --------------
- --------------
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 6
<PAGE>
GLOBAL UTILITY FUND, INC.
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six
Months
Ended
Net Investment Income March 31,
1999
<S> <C>
Income
Dividends (net of foreign withholding taxes
of $113,384)............................. $
2,255,921
Interest....................................
2,449,297
----------
- ----
Total income.............................
4,705,218
----------
- ----
Expenses
Management fee..............................
1,016,183
Distribution fee--Class A...................
166,193
Distribution fee--Class B...................
803,801
Distribution fee--Class C...................
5,720
Transfer agent's fees and expenses..........
207,000
Custodian's fees and expenses...............
94,000
Reports to shareholders.....................
32,000
Audit fee and expenses......................
16,000
Registration fees...........................
10,000
Legal fees and expenses.....................
7,000
Directors' fees.............................
7,000
Insurance...................................
3,000
Miscellaneous...............................
2,601
----------
- ----
Total expenses...........................
2,370,498
----------
- ----
Net investment income..........................
2,334,720
----------
- ----
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions
Net realized gain on:
Investment transactions.....................
7,185,487
Foreign currency transactions...............
25,490
----------
- ----
7,210,977
----------
- ----
Net change in unrealized appreciation (depreciation) on:
Investments.................................
24,984,442
Foreign currencies..........................
(10,956)
----------
- ----
24,973,486
----------
- ----
Net gain on investments and foreign
currencies..................................
32,184,463
----------
- ----
Net Increase in Net Assets
Resulting from Operations...................... $
34,519,183
----------
- ----
----------
- ----
</TABLE>
GLOBAL UTILITY FUND, INC.
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended
Ended
September
Increase (Decrease) March 31, 30,
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment income.......... $ 2,334,720 $
6,265,657
Net realized gain on investment
and foreign currency
transactions................ 7,210,977
33,945,593
Net change in unrealized
appreciation (depreciation)
ofinvestments and foreign
currencies.................. 24,973,486
(4,314,139)
------------ --------
- ----
Net increase in net assets
resulting from operations... 34,519,183
35,897,111
------------ --------
- ----
Dividends and distributions (Note 1)
Dividends from net investment
income
Class A..................... (1,292,865)
(2,991,973)
Class B..................... (961,908)
(3,134,288)
Class C..................... (6,849)
(17,223)
Class Z..................... (73,098)
(122,173)
------------ --------
- ----
(2,334,720)
(6,265,657)
------------ --------
- ----
Distributions in excess of net
investment income
Class A..................... (290,072)
(180,906)
Class B..................... (279,962)
(266,336)
Class C..................... (2,253)
(1,178)
Class Z..................... (12,603)
(114)
------------ --------
- ----
(584,890)
(448,534)
------------ --------
- ----
Distributions from net realized
gains
Class A..................... (13,289,267)
(10,062,149)
Class B..................... (15,638,891)
(14,813,745)
Class C..................... (109,572)
(65,425)
Class Z..................... (635,248)
(6,437)
------------ --------
- ----
(29,672,978)
(24,947,756)
------------ --------
- ----
Fund share transactions (net of
share conversions) (Note 5)
Net proceeds from shares
sold........................ 17,837,907
34,214,868
Net asset value of shares
issued in reinvestment of
dividends and
distributions............... 27,331,965
26,214,007
Cost of shares reacquired...... (36,281,483)
(80,331,082)
------------ --------
- ----
Net increase (decrease) in net
assets from Fund share
transactions................... 8,888,389
(19,902,207)
------------ --------
- ----
Total increase (decrease)......... 10,814,984
(15,667,043)
Net Assets
Beginning of period............... 285,240,714
300,907,757
------------ --------
- ----
End of period..................... $296,055,698
$285,240,714
------------ --------
- ----
------------ --------
- ----
</TABLE>
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 7
<PAGE>
Notes to Financial Statements (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
Global Utility Fund, Inc. (the 'Fund') is an open-end
diversified management
investment company. The Fund seeks to achieve its investment
objective of
obtaining a high total return, without incurring undue risk,
by investing
primarily in common stocks, debt securities and preferred
stocks of domestic and
foreign companies in the utility industries. Debt securities
in which the Fund
invests are generally within the four highest ratings
categories by a nationally
recognized statistical rating organization or, if not rated,
are of comparable
quality. The ability of the issuers of the debt securities
held by the Fund to
meet their obligations may be affected by economic
developments in a specific
country or industry.
- ------------------------------------------------------------
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 exchange rate. 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. 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 an independent pricing service
or by principal
market makers. Securities 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
take possession of the
underlying collateral securities, the value of which exceeds
the principal
amount of the repurchase transaction including accrued
interest. If the seller
defaults and the value of the collateral declines or if
bankruptcy proceedings
are commenced with respect to the seller of the security,
realization of the
collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the
Fund are maintained
in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and
liabilities--at the
closing 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 fiscal 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 fiscal 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
securities sold during
the fiscal period. Accordingly, realized foreign currency
gains (losses) are
included in the reported net realized gain on investment
transactions.
The Fund recognizes foreign currency gains and losses from
the holding of
foreign currencies, the sales and maturities of short-term
securities and
forward currency contracts, and the difference between the
amounts of dividends,
interest and foreign taxes recorded on the Fund's books and
the U.S. dollar
equivalent of amounts actually received or paid.
Foreign security and currency transactions may involve
certain considerations
and risks not typically associated with those of domestic
origin as a result of,
among other factors, the possibility of political and
economic instability and
the level of governmental supervision and regulation of
foreign securities
markets.
Securities Transactions and Net Investment Income: Security
transactions are
recorded on the trade date. Realized gains and losses from
security and currency
transactions are calculated on the identified cost basis.
Dividend income is
recorded on the ex-dividend date and interest income is
recorded on the accrual
basis. The Fund amortizes premiums and original issue
discount paid on purchases
of debt securities as adjustments to interest income.
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.
Federal Income Taxes: It is the Fund's policy to continue to
meet the
requirements of the Internal Revenue Code applicable to
regulated investment
companies and to distribute all of its taxable income to
shareholders.
Therefore, no federal income tax provision is required.
- ------------------------------------------------------------
- --------------------
8
<PAGE>
Notes to Financial Statements (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
Withholding taxes on foreign dividends and interest are
provided in accordance
with the Fund's understanding of the applicable country's
tax rules and rates.
Dividends and Distributions: Dividends from net investment
income are declared
and paid quarterly. The Fund will distribute at least
annually any net capital
gains in excess of loss carryforwards. 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 wash
sales and foreign currency transactions.
Reclassification of Capital Accounts: The Fund accounts for
and reports
distributions to shareholders in accordance with American
Institute of Certified
Public Accountants (AICPA) 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 decrease distributions in excess of
net investment income
and decrease accumulated net realized gains on investments
by $25,490 relating
to net realized foreign currency gains. 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
Wellington
Management Company, LLP ('Wellington'); Wellington furnishes
investment advisory
services in connection with the management of the Fund. PIFM
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 PIFM is computed daily and payable
monthly at an annual
rate of .70% of the Fund's average daily net assets up to
and including $250
million, .55% of the Fund's average daily net assets of the
next $250 million,
.50% of the Fund's average daily net assets of the next $500
million and .45% of
the Fund's average daily net assets in excess of $1 billion.
Pursuant to the
subadvisory agreement, PIFM compensates Wellington for its
services at an annual
rate of .50% of the Fund's average daily net assets up to
and including $250
million, .35% of the Fund's average daily net assets of the
next $250 million,
.30% of the Fund's average daily net assets of the next $500
million and .25% of
the Fund's average daily net 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, Class B,
Class C and Class 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, Class B and
Class C Plans'),
regardless of expenses actually incurred by them. The
distribution fees are
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%, 1% and 1%, of
the average daily
net assets of the Class A, B and C shares, respectively, for
the six months
ended March 31, 1999.
PIMS has advised the Fund that it received approximately
$14,500 and $520 in
front-end sales charges resulting from sales of Class A and
Class C shares
during the six months ended March 31, 1999. From these fees
PIMS paid such sales
charges to affiliated broker-dealers which in turn paid
commissions to
salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the six months ended
March 31, 1999, it
received approximately $79,000 and $18 in contingent
deferred sales charges
imposed upon certain redemptions by Class B and Class C
shareholders,
respectively.
PIMS and PIFM 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. The SCA expires on March 10,
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 March 31, 1999. The
purpose of the
- ------------------------------------------------------------
- --------------------
9
<PAGE>
Notes to Financial Statements (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
agreements are 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 March 31,
1999, the Fund incurred fees of approximately $159,000 for
the services of PMFS.
As of March 31, 1999, approximately $26,000 of such fees
were due to PMFS.
Transfer agent fees and expenses in the Statement of
Operations include certain
out-of-pocket expenses paid to nonaffiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than
short-term investments,
for the six months ended March 31, 1999 were $9,712,930 and
$23,180,118,
respectively.
The United States federal income tax basis of the Fund's
investments at March
31, 1999 was substantially the same as for financial
reporting purposes and,
accordingly, net unrealized appreciation of investments was
$101,759,661 (gross
unrealized appreciation--$112,380,648; gross unrealized
depreciation--$10,620,987).
- ------------------------------------------------------------
Note 5. Capital
The Fund offers Class A, Class B, Class C and Class Z
shares. Class A shares are
sold with an initial sales charge of up to 5%. Class B
shares are sold with a
contingent deferred sales charge which declines from 5% to
zero depending upon
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 qualify 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.
The Fund has authorized 2 billion shares of common stock at
$.001 par value per
share equally divided into Class A, B, C and Z shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- ----------------------------------- ---------- --------
- ----
<S> <C> <C>
Six months ended March 31, 1999:
Shares sold........................ 410,910 $
7,506,889
Shares issued in reinvestment of
dividends and distributions...... 649,481
11,079,285
Shares reacquired.................. (701,644)
(12,675,532)
---------- --------
- ----
Net increase in shares outstanding
before conversion................ 358,747
5,910,642
Shares issued upon conversion from
Class B.......................... 353,996
6,589,610
---------- --------
- ----
Net increase in shares
outstanding...................... 712,743 $
12,500,252
---------- --------
- ----
---------- --------
- ----
Year ended September 30, 1998:
Shares sold........................ 521,948 $
9,321,818
Shares issued in reinvestment of
dividends and distributions...... 563,544
9,496,627
Shares reacquired.................. (1,757,287)
(31,298,612)
---------- --------
- ----
Net decrease in shares outstanding
before conversion................ (671,795)
(12,480,167)
Shares issued upon conversion from
Class B.......................... 759,647
13,683,739
---------- --------
- ----
Net increase in shares
outstanding...................... 87,852 $
1,203,572
---------- --------
- ----
---------- --------
- ----
<CAPTION>
Class B
- -----------------------------------
Six months ended March 31, 1999:
Shares sold........................ 362,671 $
6,566,656
Shares issued in reinvestment of
dividends and distributions...... 904,159
15,419,275
Shares reacquired.................. (1,098,196)
(19,926,878)
---------- --------
- ----
Net increase in shares outstanding
before conversion................ 168,634
2,059,053
Shares reacquired upon conversion
into Class A..................... (354,568)
(6,589,610)
---------- --------
- ----
Net decrease in shares
outstanding...................... (185,934) $
(4,530,557)
---------- --------
- ----
---------- --------
- ----
Year ended September 30, 1998:
Shares sold........................ 661,584 $
11,938,327
Shares issued in reinvestment of
dividends and distributions...... 982,123
16,503,067
Shares reacquired.................. (2,346,288)
(42,011,836)
---------- --------
- ----
Net decrease in shares outstanding
before conversion................ (702,581)
(13,570,442)
Shares reacquired upon conversion
into Class A..................... (759,735)
(13,683,739)
---------- --------
- ----
Net decrease in shares
outstanding...................... (1,462,316)
$(27,254,181)
---------- --------
- ----
---------- --------
- ----
</TABLE>
- ------------------------------------------------------------
- --------------------
10
<PAGE>
Notes to Financial Statements (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Class C Shares
Amount
- ----------------------------------- ---------- --------
- ----
<S> <C> <C>
Six months ended March 31, 1999:
Shares sold........................ 163,098 $
2,944,969
Shares issued in reinvestment of
dividends and distributions...... 6,607
112,682
Shares reacquired.................. (157,486)
(2,829,698)
---------- --------
- ----
Net increase in shares
outstanding...................... 12,219 $
227,953
---------- --------
- ----
---------- --------
- ----
Year ended September 30, 1998:
Shares sold........................ 343,836 $
6,262,967
Shares issued in reinvestment of
dividends and distributions...... 4,668
78,586
Shares reacquired.................. (337,668)
(6,158,331)
---------- --------
- ----
Net increase in shares
outstanding...................... 10,836 $
183,222
---------- --------
- ----
---------- --------
- ----
<CAPTION>
Class Z
- -----------------------------------
Six months ended March 31, 1999:
Shares sold........................ 44,985 $
819,393
Shares issued in reinvestment of
dividends and distributions...... 42,192
720,723
Shares reacquired.................. (46,805)
(849,375)
---------- --------
- ----
Net increase in shares
outstanding...................... 40,372 $
690,741
---------- --------
- ----
---------- --------
- ----
Year ended September 30, 1998:
Shares sold........................ 379,786 $
6,691,756
Shares issued in reinvestment of
dividends and distributions...... 7,648
135,727
Shares reacquired.................. (47,365)
(862,303)
---------- --------
- ----
Net increase in shares
outstanding...................... 340,069 $
5,965,180
---------- --------
- ----
---------- --------
- ----
</TABLE>
- ------------------------------------------------------------
- --------------------
11
<PAGE>
Financial Highlights (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Class A
- ------------------------------------------------------------
- --
Six Months
Ended Year Ended September 30,
March 31, ---------------------------------------------
- --
1999 1998 1997 1996 1995
- ---------- -------- -------- -------- ------
- --
<S>
<C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 17.66 $ 17.52
$ 15.03 $ 14.72 $ 13.66
- ---------- -------- -------- -------- ------
- --
Income from investment operations
Net investment
income........................................ .19
.46(b) .49 .51 .49
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. 1.94
1.67 3.34 .73 1.35
- ---------- -------- -------- -------- ------
- --
Total from investment
operations.......................... 2.13
2.13 3.83 1.24 1.84
- ---------- -------- -------- -------- ------
- --
Less distributions
Dividends from net investment
income......................... (.19) (.46)
(.49) (.51) (.48)
Distributions in excess of net investment
income............. (.02) (.02) (.02)
- -- --
Distributions from net realized
gains........................ (1.88) (1.51)
(.83) (.42) (.30)
- ---------- -------- -------- -------- ------
- --
Total
distributions.......................................
(2.09) (1.99) (1.34) (.93) (.78)
- ---------- -------- -------- -------- ------
- --
Net asset value, end of
period............................... $ 17.70 $
17.66 $ 17.52 $ 15.03 $ 14.72
- ---------- -------- -------- -------- ------
- --
- ---------- -------- -------- -------- ------
- --
TOTAL
RETURN(a)..............................................
12.58% 12.90% 26.90% 8.65% 14.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $136,209
$123,346 $120,825 $112,800 $124,423
Average net assets
(000)..................................... $133,320
$122,384 $116,303 $120,122 $122,837
Ratios to average net assets:
Expenses, including distribution
fees..................... 1.18%(c) 1.18%
1.21% 1.30% 1.31%
Expenses, excluding distribution
fees..................... .93%(c) .93%
.96% 1.05% 1.06%
Net investment
income..................................... 1.94%(c)
2.49% 3.00% 3.38% 3.58%
For Class A, B, C and Z shares:
Portfolio turnover
rate................................... 3%
20% 13% 13% 15%
<CAPTION>
1994
- --------
<S>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 14.63
- --------
Income from investment operations
Net investment
income........................................ .47
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. (.82)
- --------
Total from investment
operations.......................... (.35)
- --------
Less distributions
Dividends from net investment
income......................... (.42)
Distributions in excess of net investment
income............. --
Distributions from net realized
gains........................ (.20)
- --------
Total
distributions.......................................
(.62)
- --------
Net asset value, end of
period............................... $ 13.66
- --------
- --------
TOTAL
RETURN(a)..............................................
(2.49)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $126,254
Average net assets
(000)..................................... $139,166
Ratios to average net assets:
Expenses, including distribution
fees..................... 1.25%
Expenses, excluding distribution
fees..................... 1.02%
Net investment
income..................................... 3.39%
For Class A, B, C and Z shares:
Portfolio turnover
rate................................... 19%
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each year reported and includes reinvestment
of dividends and
distributions. Total return for periods of less than a
full year are not
annualized.
(b) Calculated based upon weighted average shares
outstanding during the year.
(c) Annualized.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 12
<PAGE>
Financial Highlights (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Class B
- ------------------------------------------------------------
- --
Six Months
Ended Year Ended September 30,
March 31, ---------------------------------------------
- --
1999 1998 1997 1996 1995
- ---------- -------- -------- -------- ------
- --
<S>
<C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 17.66 $ 17.52
$ 15.03 $ 14.71 $ 13.66
- ---------- -------- -------- -------- ------
- --
Income from investment operations
Net investment
income........................................ .13
.32(b) .37 .40 .39
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. 1.92
1.67 3.34 .74 1.34
- ---------- -------- -------- -------- ------
- --
Total from investment
operations.......................... 2.05
1.99 3.71 1.14 1.73
- ---------- -------- -------- -------- ------
- --
Less distributions
Dividends from net investment
income......................... (.13) (.32)
(.37) (.40) (.38)
Distributions in excess of net investment
income............. (.01) (.02) (.02)
- -- --
Distributions from net realized
gains........................ (1.88) (1.51)
(.83) (.42) (.30)
- ---------- -------- -------- -------- ------
- --
Total
distributions.......................................
(2.02) (1.85) (1.22) (.82) (.68)
- ---------- -------- -------- -------- ------
- --
Net asset value, end of
period............................... $ 17.69 $
17.66 $ 17.52 $ 15.03 $ 14.71
- ---------- -------- -------- -------- ------
- --
- ---------- -------- -------- -------- ------
- --
TOTAL
RETURN(a)..............................................
12.09% 12.06% 25.96% 7.90% 13.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $151,880
$154,873 $179,270 $187,557 $227,189
Average net assets
(000)..................................... $161,202
$177,326 $185,693 $210,305 $237,983
Ratios to average net assets:
Expenses, including distribution
fees..................... 1.93%(c) 1.93%
1.96% 2.05% 2.06%
Expenses, excluding distribution
fees..................... .93%(c) .93%
.96% 1.05% 1.06%
Net investment
income..................................... 1.20%(c)
1.74% 2.25% 2.62% 2.83%
<CAPTION>
1994
- --------
<S>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 14.63
- --------
Income from investment operations
Net investment
income........................................ .37
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. (.82)
- --------
Total from investment
operations.......................... (.45)
- --------
Less distributions
Dividends from net investment
income......................... (.32)
Distributions in excess of net investment
income............. --
Distributions from net realized
gains........................ (.20)
- --------
Total
distributions.......................................
(.52)
- --------
Net asset value, end of
period............................... $ 13.66
- --------
- --------
TOTAL
RETURN(a)..............................................
(3.22)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $272,673
Average net assets
(000)..................................... $270,466
Ratios to average net assets:
Expenses, including distribution
fees..................... 2.02%
Expenses, excluding distribution
fees..................... 1.02%
Net investment
income..................................... 2.68%
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each year reported and includes reinvestment
of dividends and
distributions. Total return for periods of less than a
full year are not
annualized.
(b) Calculated based upon weighted average shares
outstanding during the year.
(c) Annualized.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 13
<PAGE>
Financial Highlights (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Class C
- ------------------------------------------------------
Six Months
Ended Year Ended September 30,
March 31, ---------------------------------------
1999 1998 1997 1996 1995
- ---------- ------ ------ ------ ------
<S>
<C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $17.66 $17.52
$15.03 $14.71 $13.66
- ----- ------ ------ ------ ------
Income from investment operations
Net investment
income........................................ .13
.32(b) .37 .40 .39
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. 1.92
1.67 3.34 .74 1.34
- ----- ------ ------ ------ ------
Total from investment
operations.......................... 2.05 1.99
3.71 1.14 1.73
- ----- ------ ------ ------ ------
Less distributions
Dividends from net investment
income......................... (.13) (.32)
(.37) (.40) (.38)
Distributions in excess of net investment
income............. (.01) (.02) (.02)
- -- --
Distributions from net realized
gains........................ (1.88) (1.51)
(.83) (.42) (.30)
- ----- ------ ------ ------ ------
Total
distributions.......................................
(2.02) (1.85) (1.22) (.82) (.68)
- ----- ------ ------ ------ ------
Net asset value, end of
period............................... $17.69
$17.66 $17.52 $15.03 $14.71
- ----- ------ ------ ------ ------
- ----- ------ ------ ------ ------
TOTAL
RETURN(a)..............................................
12.09% 12.06% 25.96% 7.90% 13.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $1,175 $ 957
$ 760 $ 661 $ 563
Average net assets
(000)..................................... $1,147
$ 969 $ 727 $ 608 $ 410
Ratios to average net assets:
Expenses, including distribution
fees..................... 1.93%(c) 1.93%
1.96% 2.05% 2.06%
Expenses, excluding distribution
fees..................... .93%(c) .93%
.96% 1.05% 1.06%
Net investment
income..................................... 1.20%(c)
1.74% 2.25% 2.66% 2.83%
<CAPTION>
August 1,
1994(d)
through
September 30,
1994
- -------------
<S>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 13.93
- -----
Income from investment operations
Net investment
income........................................ .06
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. (.24)
- -----
Total from investment
operations.......................... (.18)
- -----
Less distributions
Dividends from net investment
income......................... (.07)
Distributions in excess of net investment
income............. --
Distributions from net realized
gains........................ (.02)
- -----
Total
distributions.......................................
(.09)
- -----
Net asset value, end of
period............................... $ 13.66
- -----
- -----
TOTAL
RETURN(a)..............................................
(1.32)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $ 226
Average net assets
(000)..................................... $ 131
Ratios to average net assets:
Expenses, including distribution
fees..................... 2.06%(c)
Expenses, excluding distribution
fees..................... 1.06%(c)
Net investment
income..................................... 2.46%(c)
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each period reported and includes
reinvestment of dividends and
distributions. Total return for periods of less than a
full year are not
annualized.
(b) Calculated based upon weighted average shares
outstanding during the year.
(c) Annualized.
(d) Commencement of offering of Class C shares.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 14
<PAGE>
Financial Highlights (Unaudited)
GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
Class Z
- ----------------------------------------------
December 16,
Six Months 1996(d)
Ended Year Ended through
March 31, September 30, September 30,
1999 1998 1997
- ---------- ------------- -------------
<S>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $17.68 $ 17.54
$ 15.02
- ----- ------ -----
Income from investment operations
Net investment
income........................................ .22
.50(b) .34
Net realized and unrealized gain (loss) on investment and
foreign currency
transactions............................. 1.92
1.68 2.59
- ----- ------ -----
Total from investment
operations.......................... 2.14
2.18 2.93
- ----- ------ -----
Less distributions
Dividends from net investment
income......................... (.22) (.50)
(.34)
Distributions in excess of net investment
income............. (.01) (.03)
(.07)
Distributions from net realized
gains........................ (1.88) (1.51)
- --
- ----- ------ -----
Total
distributions.......................................
(2.11) (2.04) (.41)
- ----- ------ -----
Net asset value, end of
period............................... $17.71 $
17.68 $ 17.54
- ----- ------ -----
- ----- ------ -----
TOTAL
RETURN(a)..............................................
12.64% 13.18% 19.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).............................. $6,792 $
6,065 $ 53
Average net assets
(000)..................................... $6,686
$ 4,041 $ 16
Ratios to average net assets:
Expenses, including distribution
fees..................... .93%(c) .93%
.96%(c)
Expenses, excluding distribution
fees..................... .93%(c) .93%
.96%(c)
Net investment
income..................................... 2.19%(c)
2.74% 3.25%(c)
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales
loads. Total return is
calculated assuming a purchase of shares on the first
day and a sale on the
last day of each period reported and includes
reinvestment of dividends and
distributions. Total return for periods of less than a
full year are not
annualized.
(b) Calculated based upon weighted average shares
outstanding during the year.
(c) Annualized.
(d) Commencement of offering of Class Z shares.
- ------------------------------------------------------------
- --------------------
See Notes to Financial Statements. 15
<PAGE>
Getting The Most From Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you receive
financial advice
through a Prudential Securities financial advisor or
Prudential/Pruco
Securities registered representative. Your advisor or
representative can
provide you with the following services:
There's No Reward Without Risk; But Is This Risk Worth It?
Your financial advisor or registered representative can help
you match the
reward you seek with the risk you can tolerate. And risk can
be difficult
to gauge--sometimes even the simplest investments bear
surprising risks.
The educated investor knows that markets seldom move in just
one direction--
there are times when a market sector or asset class will
lose value or provide
little in the way of total return. Managing your own
expectations is easier
with help from someone who understands the markets and who
knows you!
Keeping Up With The Joneses
A financial advisor or registered representative can help
you wade through
the numerous mutual funds available to find the ones that
fit your own
individual investment profile and risk tolerance. While the
newspapers and
popular magazines are full of advice about investing, they
are aimed at
generic groups of people or representative individuals, not
at you personally.
Your financial advisor or registered representative will
review your
investment objectives with you. This means you can make
financial decisions
based on the assets and liabilities in your current
portfolio and your risk
tolerance--not just based on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the
most common investor mistakes. But, sometimes it's difficult
to hold on to
an investment when it's losing value every month. Your
financial advisor or
registered representative can answer questions when you're
confused or worried
about your investment, and remind you that you're investing
for the long haul.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Eugene C. Dorsey
Douglas H. McCorkindale
Thomas T. Mooney
Officers
Robert F. Gunia, President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
David F. Connor, Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
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
Kirkpatrick & Lockhart LLP
1800 Massachusetts Ave., N.W.
Washington, D.C. 20036
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 March 31, 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.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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