(ICON)
Prudential
Global
Limited
Maturity
Fund, Inc.
Limited Maturity
Portfolio
ANNUAL
REPORT
Oct. 31, 1997
(LOGO)
<PAGE>
Prudential Global Limited Maturity Fund, Inc.
Limited Maturity Portfolio
Performance At A Glance.
Tame inflation helped support world bond
prices during the past year, soothing
investor concern that rising inflationary
pressures might erode the value of
their bonds' fixed interest and principal
payments. World bonds returns,
however, were modest when translated into
U.S. dollars because the dollar
strengthened against many currencies. The
Prudential Global Limited Maturity
Fund-Limited Maturity Portfolio beat the
return on the average global income
fund tracked by Lipper Analytical Services by
limiting investments in the
emerging markets to better quality bonds,
increasing exposure to the U.S.
dollar and initiating a position in Swedish
bonds.
Cumulative Total Returns1
As of 10/31/97
<TABLE>
<CAPTION>
One
Five Since
Year
Years Inception2
<S> <C>
<C> <C>
Class A 5.14%
31.28% 45.01%
Class B 4.59
27.23 38.14
Class C 4.59
N/A 23.02
Class Z N/A
N/A 3.53
Lipper Global
Income Fund Avg3 4.69
39.42 ***
</TABLE>
Average Annual Total Returns1
As of 9/30/97
<TABLE>
<CAPTION>
One
Five Since
Year
Years Inception2
<S> <C>
<C> <C>
Class A 4.85%
5.48% 5.21%
Class B 4.52
5.46 4.94
Class C 6.52
N/A 7.11
</TABLE>
Past performance is not indicative of future
results. Total return and
principal 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 Analytical
Services. The cumulative total returns do not
take into account sales charges.
The average annual total returns do take into
account sales charges. The Fund
charges a maximum front-end sales load of 3%
for Class A shares. Class B
shares are subject to a declining contingent
deferred sales charge (CDSC) of
3%, 2%, 1% and 1% over four years. Class C
shares have a 1% CDSC for one year.
Class B shares will automatically convert to
Class A shares on a quarterly
basis after approximately five years. Class Z
shares do not carry sales
charges or distribution fees. Since Class Z
shares have been in existence less
than one year, no average annual total
returns are presented.
2 Inception dates: 11/1/90 for Class A and
Class B shares; 8/1/94 for Class C
shares; 1/27/97 for Class Z shares.
3 This is the Lipper Global Income Fund
Average of 137 funds for one year and
48 funds for five years.
4 Lipper Since Inception returns were: Class
A & B, 64.75%; Class C, 31.92%;
and Class Z, 3.64% for all funds in each
share class.
How Investments Compared.
(As of 10/31/97)
(GRAPH)
U.S. General General Money
Growth Bond Muni Debt Market
Funds Funds Funds Funds
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 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.
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.
<PAGE>
Gabriel Irwin and Simon Wells, Fund Managers
Portfolio
Managers' Report
(PHOTOS)
The Fund seeks total return by investing
primarily in debt securities
denominated in the U.S. dollar and a range of
foreign currencies. The Fund's
weighted average maturity ranges from more
than two but less than five years,
with each security generally maturing in no
more than 10 years. The Fund may
invest up to 20% of total investments in
securities rated below investment
grade, but with a minimum rating of single B
by Moody's Investors Service or
Standard & Poor's or another nationally
recognized credit rating organization.
The Fund is nondiversified, meaning it may
invest more than 5% of its total
investments in the securities of one or more
issuers. This carries greater
risk and greater share price volatility than
investments held in a more
diversified portfolio.
We Are Vigilant.
Your Fund avoided much of the difficulties
stemming from the financial
uncertainty that began in Southeast Asia
because we held only one position in
that region. When warning signs emerged early
in the summer, we took steps to
reduce the Fund's risk by entering into
forward contracts to sell Indonesian
rupiahs. This removed the risk of owning
rupiahs from the Fund's Indonesian
bonds.
Strategy Session.
Robust U.S. economic growth and deteriorating
financial conditions in East
Asia concerned global bond investors over the
past 12 months. Solid consumer
spending helped power the vigorous U.S.
economic expansion. Historically, such
fast growth has kindled higher inflation so
investors expected the Federal
Reserve to increase the federal funds rate
(what banks charge each other for
overnight loans) to rein in the economy.
Investors pushed prices on U.S.
Treasury securities and some world bonds
lower (and yields higher) in
anticipation of a change in monetary policy.
We scaled back duration (a
measure of the Fund's sensitivity to interest
rate changes) to protect the
value of the Fund as the market declined. On
March 25, the federal funds rate
was raised to 5.50%.
Expecting another federal funds rate rise in
May, investors drove bond prices
lower in April. But as they realized the
central bank did not need to move
again because inflationary pressures were
unexpectedly mild, Treasuries
rallied, pulling global bond prices higher.
Under these opportune conditions,
we lengthened the Fund's duration to take
better advantage of bond gains.
The financial whirlwind that swept through
East Asia spread through global
stock, bond and currency markets. Noting
signs of financial fragility in
Southeast Asia stemming from unsound banking
practices, we entered into
forward contracts this summer to sell
Indonesian rupiahs and remove the risk
of owning rupiahs from the Fund's Indonesian
bonds, which were the Fund's only
holding in that region.
Portfolio Composition.
Sectors expressed as a percentage of
total investments as of 10/31/97.
(PIE CHART)
<PAGE>
What Went Well.
Playing It Safe.
Emerging markets bonds typically carry higher
yields and greater risks than
bonds of developed countries. We therefore
adopted a conservative approach to
investing in Mexico, Colombia, Argentina,
Lithuania and other developing
nations by purchasing bonds issued by
governments or select corporations. For
most of the year, these bonds performed very
well, trading more in line with
U.S. Treasuries. Then the East Asian
financial crisis triggered a widespread
selloff in the emerging markets in October.
Fortunately, our higher quality
bonds weathered the sharp decline far better
than more risky emerging markets
bonds.
Greenback Gains.
The nearly ideal combination of robust
economic growth and surprisingly
subdued inflation helped push the U.S. dollar
higher against a variety of
currencies for much of the reporting period.
U.S. Treasuries also gained
under these favorable conditions. We took
advantage of this positive trend by
increasing the Fund's holdings of bonds
denominated in U.S. dollars.
Smorgasbord!
We feasted on Swedish bonds, which climbed to
5.5% of the Fund's total
investments by October 31, 1997 from zero at
the start of the reporting
period. A favorable inflation outlook lured
us to Sweden's bond market. We
were not disappointed as a strong rally drove
government bond prices higher
until the yield on the 10 year benchmark bond
fell to 5.93% in October, a
record low.
And Not So Well.
A Bit Slow.
Because of concern that a second federal
funds rate increase was imminent, we
were reluctant in the spring to extend your
Fund's duration to enable it to
gain more rapidly if bond prices rose. We
worried that a longer duration would
hurt if the federal funds rate were increased
again and bond prices fell. As
it turned out, monetary policy remained
unchanged. While we eventually
extended duration to 3.4 years from 2.8
years, the Fund's performance would
have been better had we acted sooner.
Five Largest Issuers.
9.0% Queensland Treasury
Govt. Bonds
8.4% U.S. Treasury Notes
5.5% Swedish Govt. Bonds
4.9% Danish Govt. Bonds
4.7% Spanish Govt. Bonds
Expressed as a percentage of net assetsas of
10/31/97.
Looking Ahead.
The deflationary winds blowing from Southeast
Asia could help lift prices of
U.S. Treasuries and Western European
government bonds over the next six
months. With factories around the world
churning out cars, electronics and
other products, supply could exceed demand,
particularly if lingering economic
woes cause East Asian consumers to spend
less. Overcapacity in world markets
could then result in declining inflation in
some countries and head off
incipient price pressures in the United
States, which might benefit Treasuries
and Western European government bonds.
Furthermore, if the recent decline
discourages some investors from returning to
emerging markets bonds,
Treasuries and core European government bonds
could rack up even more gains.
- ---------------------------------------------
- ----------------------------------
1
<PAGE>
President's Letter
December 18, 1997
(PHOTO)
It Was Another Good Year.
Dear Shareholder:
By many measures 1997 was another good year
for investors. The economy
continued its sixth straight year of moderate
growth. Inflation remained
subdued and unemployment fell to record lows.
Thanks to this favorable
environment, the stock market posted its
third year of double-digit returns
while bond values rose as yields declined to
five-year lows.
There were periods of uncertainty, of course.
The financial markets declined
significantly three times during the year.
Yet following each episode the
markets rebounded as investors took advantage
of buying opportunities. That
is very important because it shows that
investors today are not easily swayed
by temporary setbacks -- they choose to stay
the course and are investing for
the long term.
As we begin a new year, here are a few
thoughts to help guide your investment
decisions:
- - Keep your investment expectations
realistic. Seasoned investors know that
financial markets rise and fall -- as will
the value of their holdings. Over
time, however, stocks have been shown to
produce very attractive returns. In
fact, the S&P 500 rose more than 280% from
the time of the last major market
decline (October 31, 1987) through December
31, 1996, according to Lipper
Analytical Services.
- - Don't make rash decisions. If you have an
investment plan, stick to it.
(If you don't have one, see your Prudential
Financial Professional.) While
past performance is not indicative of future
results, many investors have
profited by the long-term growth prospects of
stocks and income producing
potential of bonds.
- - Review your portfolio. Sit down with your
Prudential Securities Financial
Advisor or Pruco Securities Registered
Representative today. Your Prudential
professional can advise you on financial
strategies and explain important new
developments, such as the federal Taxpayer
Relief Act of 1997, which may
change the way you save for college, a
retirement nest egg or other long-term
financial goal.
Thank you for your continued confidence in
Prudential Mutual Funds &
Annuities. In 1998, we'll do everything we
can to keep you informed and earn
your trust.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds &
Annuities
- ---------------------------------------------
- ----------------------------------
2
<PAGE>
PRUDENTIAL
GLOBAL LIMITED
Portfolio of Investments MATURITY FUND,
INC.
as of October 31, 1997 LIMITED
MATURITY PORTFOLIO
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Principal
US$
Amount
Value
(000) Description
(Note 1)
<C> <S>
<C>
- ---------------------------------------------
- ---------------
LONG-TERM INVESTMENTS--81.2%
- ---------------------------------------------
- ---------------
Australia--10.0%
A$ 1,250 Federal National Mortgage
Association,
6.375%, 8/15/07
$ 892,032
Queensland Treasury Corporation,
4,500 8.00%, 8/14/01
3,424,364
6,000 8.00%, 5/14/03
4,639,597
- -----------
8,955,993
- ---------------------------------------------
- ---------------
Canada--9.3%
C$ 4,000 British Columbia Provincial
Bonds,
7.75%, 6/16/03
3,179,928
4,000 Canadian Government Bonds,
9.00%, 12/1/04
3,455,702
2,000 Province of Quebec,
9.25%, 4/1/02
1,643,271
- -----------
8,278,901
- ---------------------------------------------
- ---------------
Denmark--4.9%
DKr 27,000 Danish Government Bonds,
7.00%, 12/15/04
4,376,624
- ---------------------------------------------
- ---------------
Germany--6.0%
DM 3,000 Ministry Of Finance, (Russia),
9.00%, 3/25/04
1,641,432
3,000 Republic of Columbia,
7.25%, 12/21/00
1,809,050
3,000 Tokyo Gas Co. Ltd.,
7.00%, 7/27/05
1,869,844
- -----------
5,320,326
- ---------------------------------------------
- ---------------
Greece--2.3%
Hellenic Republic,
GRD243,500 10.70%, 12/31/99
840,673
325,000 12.60%, 12/31/03, FRN
1,163,826
- -----------
2,004,499
Hungary--0.4%
HUF 65,000 Hungarian Government Bonds,
16.50%, 4/12/99
$ 324,784
- ---------------------------------------------
- ---------------
Netherlands--2.7%
NLG 2,500 Dutch Government Bonds,
6.50%, 4/15/03
1,364,395
2,000 Republic of Argentina,
7.625%, 7/5/99
1,053,780
- -----------
2,418,175
- ---------------------------------------------
- ---------------
New Zealand--3.9%
NZ$ 750 Canadian Government Bonds,
6.625%, 10/3/07
461,594
1,750 Federal National Mortgage
Association,
7.25%, 6/20/02
1,097,777
3,000 New Zealand Government Bonds,
8.00%, 2/15/01
1,933,321
- -----------
3,492,692
- ---------------------------------------------
- ---------------
Spain--4.7%
Spanish Government Bonds,
Pts300,000 10.30%, 6/15/02
2,453,433
225,000 8.00%, 5/30/04
1,735,492
- -----------
4,188,925
- ---------------------------------------------
- ---------------
Sweden--5.5%
SEK 37,000 Swedish Government Bonds,
6.00%, 2/9/05
4,872,578
- ---------------------------------------------
- ---------------
United Kingdom--7.9%
BP 500 Banco Nacional de Comercio
Exterior SNC,
8.75%, 9/28/00
801,642
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 3
<PAGE>
PRUDENTIAL
GLOBAL LIMITED
Portfolio of Investments MATURITY FUND,
INC.
as of October 31, 1997 LIMITED
MATURITY PORTFOLIO
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Principal
US$
Amount
Value
(000) Description
(Note 1)
<C> <S>
<C>
- ---------------------------------------------
- ---------------
United Kingdom (cont'd.)
BP 1,300 Powergen PLC,
8.875%, 3/26/03
$ 2,326,124
2,200 United Kingdom Treasury Bonds,
7.75%, 9/8/06
3,955,611
- -----------
7,083,377
- ---------------------------------------------
- ---------------
United States--23.6%
Central Banks--2.8%
US$ 750 Banco del Estado Chile,
8.39%, 8/1/01
795,000
1,750 National Bank of Romania,
9.75%, 6/25/99
1,732,500
- -----------
2,527,500
- ---------------------------------------------
- ---------------
Corporate Bonds--4.5%
1,000 Cadbury Schweppes, PLC,
6.25%, 10/4/99
1,004,000
2,000 Ford Motor Credit Co.,
6.25%, 11/8/00
2,011,000
1,000 Petroleas Mexicano, FRN,
6.7188%, 3/8/99
995,000
- -----------
4,010,000
- ---------------------------------------------
- ---------------
Sovereign Bonds--7.9%
500 Jamaican Government Bonds,
9.625%, 7/2/02
477,500
1,000 Ministry Of Finance, (Russia),
10.00%, 6/26/07
900,000
1,750 Municpality of Rio De Janeiro,
10.375%, 7/12/99
1,776,250
480 Republic of Argentina, FRB,
6.6875%, 3/31/05
409,200
1,200 Republic of Brazil, IDU,
6.8125%, 1/1/01
713,369
944 Republic of Croatia, FRN,
6.625%, 7/31/06
830,822
US$ 400 Republic of Lithuania,
7.125%, 7/22/02
$ 388,000
500 Sultan of Oman,
7.125%, 3/20/02
501,250
1,015 Trinidad & Tobago Republic,
9.75%, 11/3/00
1,040,375
- -----------
7,036,766
- ---------------------------------------------
- ---------------
U.S. Government Obligations--8.4%
United States Treasury Notes,
4,500 6.125%, 9/30/00
4,547,790
1,000 7.875%, 11/15/04
1,114,840
1,750 6.25%, 2/15/07
1,793,208
- -----------
7,455,838
- -----------
21,030,104
- -----------
Total long-term investments
(cost US$73,933,445)
72,346,978
- -----------
SHORT-TERM INVESTMENTS--16.3%
- ---------------------------------------------
- ---------------
Hungary--0.7%
HUF 120,000 Hungarian Government Bonds,
23.50%, 5/17/98
626,919
- ---------------------------------------------
- ---------------
Indonesia--0.9%
IDR1,000,000 Bank Negara Indonesia, NCD,
25.00%(a), 12/7/97
270,910
2,000,000 Bank Tabungan Negara, NCD,
25.00%(a), 2/18/98
519,570
- -----------
790,480
- ---------------------------------------------
- ---------------
Poland--0.2%
PLN 750 Polish Government Bonds,
16.00%, 10/12/98
201,211
- ---------------------------------------------
- ---------------
Spain--1.4%
Pts 180,000 Republic of Argentina,
12.80%, 12/9/97
1,240,188
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 4
<PAGE>
PRUDENTIAL
GLOBAL LIMITED
Portfolio of Investments MATURITY FUND,
INC.
as of October 31, 1997 LIMITED
MATURITY PORTFOLIO
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Principal
US$
Amount
Value
(000) Description
(Note 1)
<C> <S>
<C>
- ---------------------------------------------
- ---------------
United States--13.1%
Corporate Bonds--7.4%
US$ 3,080 Empresa de Petroleos,
7.25%, 7/8/98
$ 3,061,520
2,500 Empresas La Moderna S.A. de
C.V.,
10.25%, 11/12/97
2,501,563
1,000 Nacional Financiera SNC,
5.875%, 2/17/98
995,500
- -----------
6,558,583
- ---------------------------------------------
- ---------------
Repurchase Agreement--2.0%
1,821 Joint Repurchase Agreement
Account,
5.70%, 11/3/97, (Note 5)
1,821,000
- ---------------------------------------------
- ---------------
Sovereign Bonds--2.2%
2,000 Communidad de Madrid,
5.75%, 7/8/98
1,996,000
Supranational Bonds--1.5%
US$ 1,300 Corporacion Andina de Formento,
7.25%, 4/30/98
$ 1,308,450
- -----------
11,684,033
- -----------
Total short-term investments
(cost US$15,432,441)
14,542,831
- -----------
- ---------------------------------------------
- ---------------
Total Investments--97.5%
(cost US$89,365,886; Note 4)
86,889,809
Other assets in excess of
liabilities--2.5%
2,268,519
- -----------
Net Assets--100%
$89,158,328
- -----------
- -----------
</TABLE>
- ---------------
Portfolio securities are classified by
country according to the security's
currency denomination.
(a) Percentages quoted represent yield-to-
maturity as of purchase date.
FRB--Floating Rate Bond.
FRN--Floating Rate Note.
IDU--Interest Due and Unpaid Bonds.
NCD--Negotiable Certificates of Deposit.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 5
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Statement of Assets and Liabilities
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
<TABLE>
Assets
October 31, 1997
<S>
<C>
Investments, at value (cost
$89,365,886).................................
................................. $
86,889,809
Foreign currency, at value (cost
$381,190)....................................
............................
382,422
Cash.........................................
.............................................
................ 796
Interest
receivable...................................
.............................................
....... 2,653,754
Receivable for investments
sold.........................................
..................................
539,471
Forward currency contracts - net amount
receivable from
counterparties...............................
..... 496,987
Receivable for Fund shares
sold.........................................
..................................
870
Other
assets.......................................
.............................................
.......... 2,629
- ----------------
Total
assets.......................................
.............................................
....... 90,966,738
- ----------------
Liabilities
Forward currency contracts - net amount
payable to
counterparties...............................
.......... 1,083,966
Payable for Fund shares
reacquired...................................
.....................................
256,228
Accrued
expenses.....................................
.............................................
........ 209,304
Dividends
payable......................................
.............................................
...... 202,250
Management fee
payable......................................
.............................................
. 42,845
Distribution fee
payable......................................
............................................
13,817
- ----------------
Total
liabilities..................................
.............................................
....... 1,808,410
- ----------------
Net
Assets.......................................
.............................................
............ $ 89,158,328
- ----------------
- ----------------
Net assets were comprised of:
Common stock, at
par..........................................
.........................................
$ 10,602
Paid-in capital in excess of
par..........................................
.............................
139,070,079
- ----------------
139,080,681
Undistributed net investment
income.......................................
.............................
4,198,301
Accumulated net realized loss on
investments..................................
.........................
(51,059,616)
Net unrealized depreciation on investments
and foreign
currencies...................................
... (3,061,038)
- ----------------
Net assets, October 31,
1997.........................................
..................................... $
89,158,328
- ----------------
- ----------------
Class A:
Net asset value and redemption price per
share
($85,109,511 / 10,123,058 shares of
common stock issued and
outstanding)............................
$8.41
Maximum sales charge (3.00% of offering
price).......................................
.................. .26
- ----------------
Maximum offering price to
public.......................................
................................
$8.67
- ----------------
- ----------------
Class B:
Net asset value, offering price and
redemption price per share
($3,937,855 / 466,008 shares of common
stock issued and
outstanding)................................
$8.45
- ----------------
- ----------------
Class C:
Net asset value, offering price and
redemption price per share
($106,702 / 12,627 shares of common
stock issued and
outstanding).................................
.. $8.45
- ----------------
- ----------------
Class Z:
Net asset value, offering price and
redemption price per share
($4,260 / 505 shares of common stock
issued and
outstanding).................................
....... $8.44
- ----------------
- ----------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 6
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Statement of Operations
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income
October 31, 1997
<S>
<C>
Income
Interest...................................
$ 8,427,387
- ----------------
Expenses
Management
fee.............................
559,063
Distribution fee--Class
A.................. 125,386
Distribution fee--Class
B.................. 134,558
Distribution fee--Class
C.................. 870
Transfer agent's fees and
expenses......... 179,000
Custodian's fees and
expenses.............. 163,000
Reports to
shareholders....................
159,000
Registration
fees..........................
63,000
Directors' fees and
expenses............... 34,000
Audit
fee..................................
30,000
Legal fees and
expenses.................... 20,000
Insurance..................................
2,000
Miscellaneous..............................
9,391
- ----------------
Total
expenses..........................
1,479,268
- ----------------
Net investment
income.........................
6,948,119
- ----------------
Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized gain (loss) on:
Investment
transactions....................
(647,881)
Foreign currency
transactions.............. 4,587,258
- ----------------
3,939,377
- ----------------
Net change in unrealized depreciation of:
Investments................................
(5,168,458)
Foreign
currencies.........................
(495,920)
- ----------------
(5,664,378)
- ----------------
Net loss on investments and foreign
currencies.................................
(1,725,001)
- ----------------
Net Increase in Net Assets
Resulting from
Operations..................... $
5,223,118
- ----------------
- ----------------
</TABLE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
LIMITED MATURITY PORTFOLIO
Statement of Changes in Net Assets
- ---------------------------------------------
- ---------------
<TABLE>
<CAPTION>
Increase (Decrease) Year
Ended October 31,
in Net Assets 1997
1996
<S> <C>
<C>
Operations
Net investment income......... $
6,948,119 $ 8,406,425
Net realized gain on
investment and foreign
currency transactions......
3,939,377 3,647,613
Net change in unrealized
appreciation/depreciation
of investments and foreign
currencies.................
(5,664,378) 1,604,117
----------
- ------ ------------
Net increase in net assets
resulting from operations.....
5,223,118 13,658,155
----------
- ------ ------------
Dividends and distributions (Note
1):
Dividends from net investment
income
Class A....................
(5,803,256) (3,551,164)
Class B....................
(1,137,460) (4,273,201)
Class C....................
(7,370) (258)
Class Z....................
(33) --
----------
- ------ ------------
(6,948,119) (7,824,623)
----------
- ------ ------------
Distributions in excess of net
investment income
Class A....................
(2,383,691) --
Class B....................
(802,612) --
Class C....................
(1,338) --
Class Z....................
(4) --
----------
- ------ ------------
(3,187,645) --
----------
- ------ ------------
Fund share transactions (net of
share conversions) (Note 6)
Net proceeds from shares
sold.......................
15,362,799 43,445,909
Net asset value of shares
issued in reinvestment of
dividends and
distributions..............
5,830,223 4,419,538
Cost of shares reacquired.....
(41,030,001) (66,462,304)
----------
- ------ ------------
Net decrease in net assets from
Fund share transactions.......
(19,836,979) (18,596,857)
----------
- ------ ------------
Total decrease...................
(24,749,625) (12,763,325)
Net Assets
Beginning of year................
113,907,953 126,671,278
----------
- ------ ------------
End of year...................... $
89,158,328 $113,907,953
----------
- ------ ------------
----------
- ------ ------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 7
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Notes to Financial Statements
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
Prudential Global Limited Maturity Fund, Inc.
(the 'Fund') is registered under
the Investment Company Act of 1940 as a non-
diversified, open-end, management
investment company. The Fund was incorporated
in Maryland on February 21, 1990.
Prior to January 19, 1996 the Fund consisted
of two series, namely: Limited
Maturity Portfolio and Global Assets
Portfolio. On January 19, 1996, the Limited
Maturity Portfolio acquired the assets of the
Global Assets Portfolio. The
Limited Maturity Portfolio (the 'Portfolio')
commenced investment operations on
November 1, 1990. The investment objective of
the Portfolio is to maximize total
return, the components of which are current
income and capital appreciation, by
investing primarily in a portfolio of
investment grade debt securities. 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 currency value. Government
securities for which quotations are
available will be based on prices provided by
an independent pricing service or
broker-dealer. Other 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,
will be valued at the average of the
quoted bid and asked prices provided by an
independent pricing service or 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, at the mean between the last bid
and asked prices on such day or at the bid
price on such day in the absence of
an asked price. 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.
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 which approximates
market value.
In connection with transactions in repurchase
agreements with U.S. financial
institutions, it is the Fund's policy that
its custodian or designated
subcustodians, as the case may be under
triparty repurchase agreements, take
possession of the underlying collateral
securities, the value of which exceeds
the principal amount of the repurchase
transaction including accrued interest.
If the seller defaults and the value of the
collateral declines or if bankruptcy
proceedings are commenced with respect to the
seller of the security,
realization of the collateral by the Fund may
be delayed or limited.
Foreign Currency Translation: The books and
records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on
the following basis:
(i) market value of investment securities,
other assets and liabilities--at the
closing daily rate of exchange;
(ii) purchases and sales of investment
securities, income and expenses--at the
rate of exchange prevailing on the respective
dates of such transactions.
Although the net assets of the Fund are
presented at the foreign exchange rates
and market values at the close of the fiscal
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 securities held at the end of the
fiscal period. 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 fiscal period.
Accordingly, such realized foreign
currency gains and losses are included in the
reported net realized gains
(losses) on investment transactions.
Net realized gain on foreign currency
transactions represents net foreign
exchange gains or losses from sales and
maturities of short-term securities,
holding of foreign currencies, currency gains
or losses realized between the
trade and settlement dates on security
transactions, and the difference between
the amounts of interest and foreign taxes
recorded on the Fund's books and the
U.S. dollar equivalent amounts actually
received or paid. Net unrealized
currency gains and losses from valuing
foreign currency denominated assets and
liabilities at fiscal period end exchange
rates are reflected as a component of
net unrealized appreciation/depreciation on
investments and foreign currencies.
Foreign security and currency transactions
may involve certain considerations
and risks not typically associated with those
of U.S. companies as a result of,
among other factors, the possibility of
political and 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
- ---------------------------------------------
- -----------------------------------
8
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Notes to Financial Statements
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
forward rate. The Fund enters into forward
currency contracts in order to hedge
its exposure to changes in foreign currency
exchange rates on its foreign
portfolio holdings or on specific receivables
and payables denominated in a
foreign currency. The contracts are valued
daily at current exchange rates and
any unrealized gain or loss is included in
net unrealized appreciation or
depreciation on investments and foreign
currencies. Gain or loss is realized on
the settlement date of the contract equal to
the difference between the
settlement value of the original and
renegotiated forward contracts. This gain
or loss, if any, is included in net realized
gain (loss) on foreign currency
transactions. Risks may arise upon entering
into these contracts from the
potential inability of the counterparties to
meet the terms of their contracts.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains
and losses from security and currency
transactions are calculated on the identified
cost basis. Interest income is
recorded on the accrual basis. The Fund
amortizes discounts on purchases of debt
securities as adjustments to 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.
Dividends and Distributions: The Fund
declares daily and pays dividends from
book basis net investment income monthly and
makes distributions at least
annually of any net capital gains. Dividends
and distributions are recorded on
the ex-dividend date.
Income distributions and capital gain
distributions are determined in accordance
with income tax regulations which may differ
from generally accepted accounting
principles. These differences are primarily
due to differing treatments for
foreign currency transactions.
Reclassification of Capital Accounts: The
Portfolio accounts and reports for
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 increase undistributed
net investment income by
$3,566,228, increase accumulated net realized
loss on investments by $14,498,557
and increase paid in capital by $10,932,329.
This was primarily the result of
net foreign currency gains incurred for the
year ended October 31, 1997 and the
capital loss carryforward of $10,932,329
assumed upon the merger of Global
Assets Portfolio on January 19, 1996. Net
investment income, net realized gains
and net assets were not affected by this
change.
Federal Income Taxes: It is the intent of the
Fund 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.
- ---------------------------------------------
- ---------------
Note 2. Agreements
The Fund has a management agreement with
Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement,
PIFM has responsibility for all
investment advisory services and supervises
the subadviser's performance of such
services. PIFM has entered into a subadvisory
agreement with The Prudential
Investment Corporation ('PIC'); PIC, through
an agreement with PRICOA Asset
Management Ltd. ('PRICOA'), furnishes
investment advisory services in connection
with the management of the Fund. PIFM pays
for the services of PIC, the cost of
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 .55 of 1% of the average daily net
assets of the Portfolio.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI'), which acts as the distributor of the
Class A, B, C and Z shares of the
Fund. The Fund compensates PSI for
distributing and servicing the Fund's Class
A, Class B and Class C shares, pursuant to
plans of distribution (the 'Class A,
B and C Plans'), regardless of expenses
actually incurred by PSI. The
distribution fees are accrued daily and
payable monthly. No distribution or
service fees are paid to PSI as distributor
of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the
Fund compensates PSI 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 .15 of 1%,
.75 of 1% and .75 of 1% of the
average daily net assets of the Class A, B
and C shares, respectively, for the
year ended October 31, 1997.
PSI has advised the Fund that it has received
approximately $2,000 in front-end
sales charges resulting from sales of Class A
shares during the year ended
October 31, 1997. From these fees, PSI paid
such sales charges
- ---------------------------------------------
- -----------------------------------
9
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Notes to Financial Statements
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
to affiliated broker-dealers, which in turn
paid commissions to salespersons and
incurred other distribution costs.
PSI has advised the Fund that for the year
ended October 31, 1997, it received
approximately $17,700 and $300 in contingent
deferred sales charges imposed upon
certain redemptions by Class B and C
shareholders, respectively.
The Fund, along with other affiliated
registered investment companies (the
'Funds'), entered into a credit agreement
(the 'Agreement') on December 31, 1996
with an unaffiliated lender. The maximum
commitment under the Agreement is
$200,000,000. The Agreement expires on
December 30, 1997. Interest on any such
borrowings outstanding will be at market
rates. The purpose of the Agreement is
to serve as an alternative source of funding
for capital share redemptions. The
Fund has not borrowed any amounts pursuant to
the Agreement as of October 31,
1997. The Funds pay a commitment fee at an
annual rate of .055 of 1% on the
unused portion of the credit facility. The
commitment fee is accrued and paid
quarterly on a pro-rata basis by the Funds.
PSI, PIFM, PIC and PRICOA are indirect,
wholly-owned subsidiaries of The
Prudential Insurance Company of America.
- ---------------------------------------------
- ---------------
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 year ended October 31, 1997,
the Portfolio incurred fees of approximately
$153,000 for the services of PMFS.
As of October 31, 1997, approximately $11,000
of such fees were due to PMFS.
Transfer agent fees and expenses in the
Statement of Operations include certain
out-of-pocket expenses paid to non-
affiliates.
- ---------------------------------------------
- ---------------
Note 4. Portfolio Securities
Purchases and sales of investment securities,
other than short-term investments
and options, for the year ended October 31,
1997 aggregated $47,422,134 and
$56,954,513, respectively.
The United States federal income tax basis of
the Portfolio's investments at
October 31, 1997 was substantially the same
as for financial reporting purposes
and, accordingly, net unrealized depreciation
of investments was $2,476,077
(gross unrealized appreciation--$995,229;
gross unrealized
depreciation--$3,471,306).
For federal income tax purposes, the
Portfolio had a capital loss carryforward
as of October 31, 1997, of approximately
$51,059,600 of which $4,207,200 expires
in 2000, $32,949,600 expires in 2001,
$12,011,000 expires in 2002, $1,565,600
expires in 2003 and $326,200 expires in 2004.
Such carryforward is after
utilization of approximately $373,100 of net
taxable gains realized and
recognized during the year ended October 31,
1997. Accordingly, no capital gains
distributions are expected to be paid to
shareholders until future net gains
have been realized in excess of such
carryforward.
At October 31, 1997, the Portfolio had
outstanding forward currency contracts
both to purchase and sell foreign currencies
as follows:
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Date
Current
Purchase Contracts Payable
Value Appreciation
- --------------------------- ---------------
- ---------- --------------
<S> <C>
<C> <C>
Deutschemarks,
expiring 11/4/97......... $ 309,119
$ 307,598 $ (1,521)
Deutschemarks,
expiring 4/30/98......... 1,950,258
1,959,037 8,779
Norwegian Krone,
expiring 11/25/97........ 2,738,351
2,804,370 66,019
---------------
- ---------- -------
$ 4,997,728
$5,071,005 $ 73,277
---------------
- ---------- -------
---------------
- ---------- -------
</TABLE>
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Date
Current Appreciation/
Sale Contracts Receivable
Value Depreciation
- ------------------------- --------------- -
- ---------- ------------
<S> <C>
<C> <C>
Australian Dollars,
expiring 11/25/97...... $ 9,073,347 $
8,991,073 $ 82,274
French Francs,
expiring 11/25/97...... 4,280,708
4,423,136 (142,428)
Greek Drachma,
expiring 11/4/97....... 309,120
308,198 922
Greek Drachma,
expiring 4/30/98....... 1,950,258
2,135,589 (185,331)
Indonesian Rupiah,
expiring 12/8/97 -
2/18/98................ 1,147,807
808,814 338,993
Netherland Guilders,
expiring 11/25/97...... 11,347,297
11,680,819 (333,522)
Netherland Guilders,
expiring 11/25/97...... 3,638,352
3,753,158 (114,806)
New Zealand Dollars,
expiring 11/25/97...... 3,445,112
3,457,983 (12,871)
Swiss Francs,
expiring 11/25/97...... 5,211,527
5,505,014 (293,487)
--------------- -
- ---------- ------------
$40,403,528
$41,063,784 $ (660,256)
--------------- -
- ---------- ------------
--------------- -
- ---------- ------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
10
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Notes to Financial Statements
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
Note 5. Joint Repurchase Agreement Account
The Portfolio, 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 October 31,
1997, the Portfolio has a 0.2% undivided
interest in the repurchase agreements
in the joint account. The undivided interest
for the Portfolio represents
$1,821,000 in principal amount. As of such
date, each repurchase agreement in
the joint account and the value of the
collateral therefor were as follows:
Bear Stearns, 5.70%, in the principal amount
of $236,000,000, repurchase price
$236,112,100, due 11/3/97. The value of the
collateral including accrued
interest was $241,912,917.
Credit Suisse First Boston, 5.72%, in the
principal amount of $237,440,000,
repurchase price $237,553,180, due 11/3/97.
The value of the collateral
including accrued interest was $246,134,363.
Deutsche Morgan Grenfell, 5.70%, in the
principal amount of $236,000,000,
repurchase price $236,112,100, due 11/3/97.
The value of the collateral
including accrued interest was $240,720,618.
SBC Warburg, 5.66%, in the principal amount
of $92,714,000, repurchase price
$92,757,730, due 11/3/97. The value of the
collateral including accrued interest
was $94,588,984.
- ---------------------------------------------
- ---------------
Note 6. Capital
The Portfolio offers Class A, Class B, Class
C and Class Z shares. Class A
shares are sold with a front-end sales charge
of up to 3.0%. Class B shares are
sold with a contingent deferred sales charge
which declines from 3% to zero
depending on the period of time the shares
are held. Class C shares are sold
with a contingent deferred sales charge of 1%
during the first year. Class B
shares will automatically convert to Class A
shares on a quarterly basis
approximately five years after purchase. A
special exchange privilege is also
available for shareholders who qualified to
purchase Class A shares at net asset
value. Effective January 27, 1997, the
Portfolio commenced offering Class Z
shares. 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 Portfolio 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 for
the fiscal years ended October 31,
1997 and 1996 were as follows.
<TABLE>
<CAPTION>
Class A
Shares Amount
- ------------------------------------ -------
- --- ------------
<S> <C>
<C>
Year ended October 31, 1997:
Shares sold.........................
1,677,463 $ 14,801,446
Shares issued in reinvestment of
dividends and distributions.......
550,154 4,710,600
Shares reacquired...................
(2,618,160) (22,399,789)
-------
- --- ------------
Net decrease in shares outstanding
before conversion.................
(390,543) (2,887,743)
Shares issued upon conversion from
Class B...........................
2,682,675 22,909,615
-------
- --- ------------
Net increase in shares
outstanding.......................
2,292,132 $ 20,021,872
-------
- --- ------------
-------
- --- ------------
Year ended October 31, 1996:
Shares sold.........................
2,325,511 $ 19,588,772
Shares acquired in connection with
acquisition of Global Assets
Portfolio.........................
2,681,423 22,872,535
Shares issued in reinvestment of
dividends.........................
229,876 1,972,625
Shares reacquired...................
(2,553,129) (21,903,466)
-------
- --- ------------
Net increase in shares outstanding
before conversion.................
2,683,681 22,530,466
Shares issued upon conversion from
Class B...........................
2,976,230 25,476,313
-------
- --- ------------
Net increase in shares
outstanding.......................
5,659,911 $ 48,006,779
-------
- --- ------------
-------
- --- ------------
<CAPTION>
Class B
- ------------------------------------
Year ended October 31, 1997:
Shares sold.........................
53,550 $ 462,980
Shares issued in reinvestment of
dividends and distributions.......
128,673 1,112,119
Shares reacquired...................
(2,106,270) (18,586,016)
-------
- --- ------------
Net decrease in shares outstanding
before conversion.................
(1,924,047) (17,010,917)
Shares reacquired upon conversion
into Class A......................
(2,672,625) (22,909,615)
-------
- --- ------------
Net decrease in shares
outstanding.......................
(4,596,672) $(39,920,532)
-------
- --- ------------
-------
- --- ------------
</TABLE>
- ---------------------------------------------
- -----------------------------------
11
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Notes to Financial Statements
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class B
Shares Amount
- ------------------------------------ -------
- --- ------------
<S> <C>
<C>
Year ended October 31, 1996:
Shares sold.........................
109,083 $ 932,602
Shares issued in reinvestment of
dividends.........................
286,095 2,446,729
Shares reacquired...................
(5,250,123) (44,558,838)
-------
- --- ------------
Net decrease in shares outstanding
before conversion.................
(4,854,945) (41,179,507)
Shares reacquired upon conversion
into Class A......................
(2,966,156) (25,476,313)
-------
- --- ------------
Net decrease in shares
outstanding.......................
(7,821,101) $(66,655,820)
-------
- --- ------------
-------
- --- ------------
<CAPTION>
Class C
- ------------------------------------
Year ended October 31, 1997:
Shares sold.........................
10,910 $ 94,072
Shares issued in reinvestment of
dividends and distributions.......
872 7,480
Shares reacquired...................
(5,205) (44,196)
-------
- --- ------------
Net increase in shares
outstanding.......................
6,577 $ 57,356
-------
- --- ------------
-------
- --- ------------
Year ended October 31, 1996:
Shares sold.........................
5,939 $ 52,000
Shares issued in reinvestment of
dividends.........................
21 184
-------
- --- ------------
Increase in shares outstanding......
5,960 $ 52,184
-------
- --- ------------
-------
- --- ------------
<CAPTION>
Class Z
- ------------------------------------
January 27, 1997(a) through
October 31, 1997:
Shares sold.........................
502 $ 4,301
Shares issued in reinvestment of
dividends and distributions.......
3 24
-------
- --- ------------
Increase in shares outstanding......
505 $ 4,325
-------
- --- ------------
-------
- --- ------------
</TABLE>
- ---------------
(a) Commencement of offering of Class Z
shares.
- ---------------------------------------------
- ---------------
Note 7. Dividends
On December 11, 1997, the Board of Directors
of the Fund declared a Special
Ordinary Income Dividend of $.30 per Class A,
B, C, and Z Shares, payable on
December 19, 1997 to shareholders of record
on December 16, 1997.
- ---------------------------------------------
- -----------------------------------
12
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Financial Highlights
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class A
- ---------------------------------------------
- -----------
Year Ended October 31,
- ---------------------------------------------
- -----------
1997(b) 1996 1995 1994
1993
- ------- ------- ------- -------
- --------
<S>
<C> <C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
year.................. $ 8.82 $ 8.39
$ 8.56 $ 9.29 $ 9.16
- ------- ------- ------- -------
- --------
Income from investment operations
Net investment
income...............................
.60 .60 .61 .70
.97
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions..... (.16) .40
(.21) (.86) (.26)
- ------- ------- ------- -------
- --------
Total from investment
operations................. .44
1.00 .40 (.16) .71
- ------- ------- ------- -------
- --------
Less distributions
Dividends from net investment
income................ (.60)
(.57) (.48) -- (.58)
Distributions in excess of net investment
income.... (.25) -- --
- -- --
Tax return of capital
distributions................. --
- -- (.09) (.57) --
- ------- ------- ------- -------
- --------
Total
distributions..............................
(.85) (.57) (.57) (.57)
(.58)
- ------- ------- ------- -------
- --------
Net asset value, end of
year........................ $ 8.41 $
8.82 $ 8.39 $ 8.56 $ 9.29
- ------- ------- ------- -------
- --------
- ------- ------- ------- -------
- --------
TOTAL
RETURN(a):...................................
. 5.14% 12.35% 4.92%
(1.89)% 7.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(000)....................... $85,109
$69,051 $18,216 $28,841 $ 59,458
Average net assets
(000)............................ $83,590
$53,284 $20,153 $38,000 $ 70,347
Ratios to average net assets:
Expenses, including distribution
fees............ 1.35% 1.32%
1.21% 1.17% 1.02%
Expenses, excluding distribution
fees............ 1.20% 1.17%
1.06% 1.02% .87%
Net investment
income............................
6.94% 7.12% 7.25% 7.67%
10.81%
For Class A, B, C and Z shares:
Portfolio turnover
rate.......................... 53%
101% 199% 232% 307%
</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.
(b) Calculated based upon average shares
outstanding during the year.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 13
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Financial Highlights
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class B
- ---------------------------------------------
- --------------
Year Ended October 31,
- ---------------------------------------------
- --------------
1997(b) 1996 1995 1994
1993
- ------- -------- -------- -------
- - --------
<S>
<C> <C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
year............... $ 8.85 $ 8.42
$ 8.56 $ 9.29 $ 9.16
- ------- -------- -------- -------
- - --------
Income from investment operations
Net investment
income............................ .55
.55 .56 .62 .88
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
. (.16) .40 (.19)
(.86) (.26)
- ------- -------- -------- -------
- - --------
Total from investment
operations.............. .39
.95 .37 (.24) .62
- ------- -------- -------- -------
- - --------
Less distributions
Dividends from net investment
income............. (.55) (.52)
(.43) -- (.49)
Distributions in excess of net investment
income.......................................
. (.24) -- --
- -- --
Tax return of capital
distributions.............. --
- -- (.08) (.49) --
- ------- -------- -------- -------
- - --------
Total
distributions...........................
(.79) (.52) (.51) (.49)
(.49)
- ------- -------- -------- -------
- - --------
Net asset value, end of
year..................... $ 8.45 $
8.85 $ 8.42 $ 8.56 $ 9.29
- ------- -------- -------- -------
- - --------
- ------- -------- -------- -------
- - --------
TOTAL
RETURN(a):.................................
4.59% 11.61% 4.60% (2.62)%
7.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(000).................... $ 3,938 $
44,804 $108,454 $188,966 $375,013
Average net assets
(000)......................... $17,941
$ 70,794 $139,248 $281,143
$474,175
Ratios to average net assets:
Expenses, including distribution
fees......... 1.95% 1.92%
1.83% 1.97% 1.87%
Expenses, excluding distribution
fees......... 1.20% 1.17%
1.08% 1.02% .87%
Net investment
income......................... 6.34%
6.51% 6.61% 6.82% 9.42%
</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.
(b) Calculated based upon average shares
outstanding during the year.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 14
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Financial Highlights
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
<TABLE>
<CAPTION>
Class C Class Z
- ---------------------------------------------
- ---------- -----------
August 1, January 27,
1994(c) 1997(d)
Year Ended October 31, Through
Through
- ---------------------------------------
October 31, October 31,
1997(f) 1996 1995
1994 1997(f)
- ------- ----------- ----------- -
- ---------- -----------
<S>
<C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............. $ 8.85 $ 8.42
$ 8.56 $ 8.61 $ 8.57
- ------- ----------- ----------- -
- ---------- -----------
Income from investment operations
Net investment
income............................ .55
.55 .54 .14
.43
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions.................................
. (.16) .40 (.17)
(.06) (.11)
- ------- ----------- ----------- -
- ---------- -----------
Total from investment
operations.............. .39
.95 .37 .08
.32
- ------- ----------- ----------- -
- ---------- -----------
Less distributions
Dividends from net investment
income............. (.55) (.52)
(.43) -- (.43)
Distributions in excess of net investment
income.......................................
. (.24) -- --
- -- (.02)
Tax return of capital
distributions.............. --
- -- (.08) (.13)
- --
- ------- ----------- ----------- -
- ---------- -----------
Total
distributions...........................
(.79) (.52) (.51)
(.13) (.45)
- ------- ----------- ----------- -
- ---------- -----------
Net asset value, end of
period................... $ 8.45 $
8.85 $ 8.42 $ 8.56
$ 8.44
- ------- ----------- ----------- -
- ---------- -----------
- ------- ----------- ----------- -
- ---------- -----------
TOTAL
RETURN(a):.................................
4.59% 11.61% 4.60%
0.75% 3.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).................. $ 107 $
54 $ 755(e) $ 200(e) $
4
Average net assets
(000)......................... $ 116
$ 4 $ 1,461(e) $ 199(e)
$ 308(e)
Ratios to average net assets:
Expenses, including distribution
fees......... 1.95% 1.92%
1.70% .93%(b) 1.20%(b)
Expenses, excluding distribution
fees......... 1.20% 1.17%
.95% .18%(b) 1.20%(b)
Net investment
income......................... 6.36%
6.35% 6.43% 7.02%(b)
14.07%(b)
</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 returns for periods
of less than a full year are not
annualized.
(b) Annualized.
(c) Commencement of offering of Class C
shares.
(d) Commencement of offering of Class Z
shares.
(e) Figures are actual and not rounded to the
nearest thousand.
(f) Calculated based upon average shares
outstanding during the period.
- ---------------------------------------------
- -----------------------------------
See Notes to Financial Statements. 15
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Report of Independent Accountants
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
To the Shareholders and Board of Directors of
Prudential Global Limited Maturity Fund, Inc.
Limited Maturity Portfolio
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
Prudential Global Limited Maturity
Fund, Inc., Limited Maturity Portfolio (the
'Fund') at October 31, 1997, and the
results of its operations, the changes in its
net assets and the financial
highlights for the year 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 audit. We
conducted our audit 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 audit, which included
confirmation of securities at October 31,
1997 by correspondence with the
custodian and brokers, provides a reasonable
basis for the opinion expressed
above. The accompanying statement of changes
in net assets for the year ended
October 31, 1996 and the financial highlights
for the periods other than the
year ended October 31, 1997 were audited by
other independent accountants, whose
opinion dated December 12, 1996 was
unqualified.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
December 23, 1997
- ---------------------------------------------
- -----------------------------------
16
<PAGE>
PRUDENTIAL GLOBAL LIMITED
MATURITY FUND, INC.
Changes of Auditors
LIMITED MATURITY PORTFOLIO
- ---------------------------------------------
- -----------------------------------
Effective March 1, 1997, Deloitte & Touche
LLP was terminated as the Fund's
auditors. For the years ended October 31,
1993, through October 31, 1996,
Deloitte & Touche LLP expressed an
unqualified opinion on the Fund's financial
statements. There were no disagreements
between Fund management and Deloitte &
Touche LLP prior to their termination. The
Board of Directors approved the
termination of Deloitte & Touche LLP and the
appointment of Price Waterhouse LLP
as the Fund's independent accountants.
- ---------------------------------------------
- -----------------------------------
17
<PAGE>
Getting The Most From Your Prudential Mutual
Fund.
Some mutual fund shareholders won't ever read
this -- they don't read annual
and semi-annual reports. It's quite
understandable. These annual and semi-
annual reports are prepared to comply with
Federal regulations. They are often
written in language that is difficult to
understand. So when most people run
into those particularly daunting sections of
these reports, they don't read
them.
We think that's a mistake.
At Prudential Mutual Funds, we've made some
changes to our report to make it
easier to understand and more pleasant to
read, in hopes you'll find it
profitable to spend a few minutes
familiarizing yourself with your investment.
Here's what you'll find in the report:
At A Glance
Since an investment's performance is often a
shareholder's primary concern, we
present performance information in two
different formats. You'll find it first
on the "At A Glance" page where we compare
the Fund and the comparable average
calculated by Lipper Analytical Services, a
nationally recognized mutual fund
rating agency. We report both the cumulative
total returns and the average
annual total returns. The cumulative total
return is the total amount of
income and appreciation the Fund has achieved
in various time periods. The
average annual total return is an annualized
representation of the Fund's
performance -- it generally smoothes out
returns and gives you an idea how
much the Fund has earned in an average year,
for a given time period. Under
the performance box, you'll see legends that
explain the performance
information, whether fees and sales charges
have been included in returns,
and the inception dates for the Fund's share
classes.
See the performance comparison charts at the
back of the report for more
performance information. And keep in mind
that past performance is not
indicative of future results.
Portfolio Manager's Report
The portfolio manager who invests your money
for you reports on successful --
and not-so-successful -- strategies in this
section of your report. Look for
recent purchases and sales here, as well as
information about the sectors the
portfolio manager favors and any changes that
are on the drawing board.
Portfolio Of Investments
This is where the report begins to look
technical, but it's really just a
listing of each security held at the end of
the reporting period, along with
valuations and other information. Please note
that sometimes we discuss a
security in the Portfolio Manager's Report
that doesn't appear in this listing
because it was sold before the close of the
reporting period.
<PAGE>
Statement Of Assets And Liabilities
The balance sheet shows the assets (the value
of the Fund's holdings),
liabilities (how much the Fund owes) and net
assets (the Fund's equity, or
holdings after the Fund pays its debts) as of
the end of the reporting period.
It also shows how we calculate the net asset
value per share for each class of
shares. The net asset value is reduced by
payment of your dividend, capital
gain, or other distribution, but remember
that the money or new shares are
being paid or issued to you. The net asset
value fluctuates daily along with
the value of every security in the portfolio.
Statement Of Operations
This is the income statement, which details
income (mostly interest and
dividends earned) and expenses (including
what you pay us to manage your
money). You'll also see capital gains here --
both realized and unrealized.
Statement Of Changes In Net Assets
This schedule shows how income and expenses
translate into changes in net
assets. The Fund is required to pay out the
bulk of its income to shareholders
every year, and this statement shows you how
we do it -- through dividends and
distributions -- and how that affects the net
assets. This statement also
shows how money from investors flowed into
and out of the Fund.
Notes To Financial Statements
This is the kind of technical material that
can intimidate readers, but it
does contain useful information. The Notes
provide a brief history and
explanation of your Fund's objectives. In
addition, they also outline how
Prudential Mutual Funds prices securities.
The Notes also explain who manages
and distributes the Fund's shares, and more
importantly, how much they are
paid for doing so. Finally, the Notes explain
how many shares are outstanding
and the number issued and redeemed over the
period.
Financial Highlights
This information contains many elements from
prior pages, but on a per share
basis. It is designed to help you understand
how the Fund performed and to
compare this year's performance and expenses
to those of prior years.
Independent Auditor's Report
Once a year, an outside auditor looks over
our books and certifies that the
information is fairly presented and complies
with generally accepted
accounting principles.
Tax Information
This is information which we report annually
about how much of your total
return is taxable. Should you have any
questions, you may want to consult a
tax advisor.
Performance Comparison
These charts are included in the annual
report and are required by the
Securities Exchange Commission. Performance
is presented here as a
hypothetical $10,000 investment in the Fund
since its inception or for
10 years (whichever is shorter). To help you
put that return in context,
we are required to include the performance of
an unmanaged, broad based
securities index, as well. The index does not
reflect the cost of buying
the securities it contains or the cost of
managing a mutual fund. Of course,
the index holdings do not mirror those of the
fund -- the index is a broadly
based reference point commonly used by
investors to measure how well they are
doing. A definition of the selected index is
also provided. Investors
generally cannot invest directly in an index.
<PAGE>
Getting The Most From Your Prudential Mutual
Fund.
Change Your Mind.
You can exchange your shares in most
Prudential Mutual Funds for shares in
most other Prudential Mutual Funds, without
charges. This may be most helpful
if your investment needs change.
Reinvest Dividends Free Of Charge.
Reinvest your dividends and/or capital gains
distributions automatically --
without charge.
Invest For Retirement.
There is no minimum investment for an IRA.
Plus, you defer taxes on your
investment earnings by investing in an IRA.
If you'd like, you can contribute up to
$2,000 a year in an IRA. And if you
are married and not covered by a retirement
plan at work, you and your spouse
may each contribute $2,000 a year to an IRA
for a total of $4,000.
Change Your Job.
You can take your pension with you. Use a
rollover IRA to manage your company-
sponsored retirement plan while retaining the
special tax-deferred advantages.
Invest In Your Children.
There's no fee to open a custodial account
for a child's education or other
needs.
Take Income.
Would you like to receive monthly or
quarterly checks in any amount from your
fund account? Just let us know. We'll take
care of it. Of course, there are
minimum amounts. And shares redeemed may be
subject to tax, and Class B and C
shares may be subject to contingent deferred
sales charges. We'll gladly
answer your questions.
Keep Informed.
We want to keep you up-to-date. Of course,
you receive account activity
statements every quarter. But you also
receive annual and semi-annual fund
reports, as well as other important updates
on events that affect your
investments, including tax information.
This material is only authorized for
distribution when preceded or accompanied
by a current prospectus. Read the prospectus
carefully before you invest or
send money.
<PAGE>
Comparing A $10,000 Investment.
Prudential Global Limited Maturity Fund, Inc.
- - Limited
Maturity Portfolio vs. J.P. Morgan Global
Short Term Index.
[] Prudential Global Limited Maturity Fund,
Inc.: Limited Maturity Portfolio
- -- J.P. Morgan Global ST Index
Past performance is not indicative of future
results. Investment return and
principal will fluctuate so an investor's
shares, when redeemed, may be worth
more or less than their original cost. The
box on top of the graphs are
designed to give you an idea how much the
Portfolio's returns can fluctuate
from year to year by measuring the best and
worst calendar years in terms of
total annual returns since the inception of
each share class.
These graphs are furnished to you in
accordance with SEC regulations. They
compare a $10,000 investment in the
Prudential Global Limited Maturity Fund -
Limited Maturity Portfolio (Class A, Class B,
Class C and Class Z) with a
similar investment in the J.P. Morgan Global
Short-Term Index (GSTI) by
portraying the initial account values and the
commencement of operations of
Class A, Class B, Class C and Class Z shares
and subsequent account values at
the end of each fiscal year (October 31)
beginning in 1990 for Class A and
Class B shares, in 1994 for Class C shares
and in 1997 for Class Z shares.
For purposes of the graphs and unless
otherwise indicated the accompanying
tables, it has been assumed that (a) the
current maximum sales charge was
deducted from the initial $10,000 investment
in Class A shares; (b) the
maximum applicable contingent deferred sales
charge was deducted from the
value of the investment in Class B and C
shares, assuming full redemption of
shares on October 31, 1997; (c) all recurring
fees (including management fees)
were deducted; and (d)all dividends and
distributions were reinvested. Class B
shares will automatically convert to Class A
shares on a quarterly basis
approximately five years after purchase. This
conversion feature is not
reflected in these graphs. Class Z shares do
not carry sales charges or
distribution fee. Since Class Z shares have
been in existence less than a
year, no average annual total returns are
presented.
The J.P. Morgan Global Short-Term Index is a
weighted index of liquid, short-
term government bonds of the following
nations: Belgium, Sweden, Germany,
Australia, Canada, Denmark, France, Italy,
Japan, the Netherlands, Spain, the
United States and the United Kingdom. The
GSTI is an unmanaged index and
changes in market capitalization in the GSTI
are revised monthly. The GSTI
does not reflect the payment of transaction
costs and advisory fees associated
with an investment in the Portfolio. The
securities which comprise the GSTI
may differ substantially from the securities
held by the Portfolio. The GSTI
is not the only index that may be used to
characterize performance of global
income funds and other indexes may portray
different comparative performance.
Best Year: 1996 12.73%
Worst Year: 1994 -4.70%
Class A Average Annual Total Returns
- - Class A
With Sales Load
5.00% Since Inception
4.95% for 5 Years
1.99% for 1 Year
Without Sales Load
5.45% Since Inception
5.60% for 5 Years
5.14% for 1 Year
Best Year: 1996 11.98%
Worst Year: 1994 -5.13%
Class B Average Annual Total Returns
- - Class B
With Sales Load
4.73% Since Inception
4.94% for 5 Years
1.59% for 1 Year
Without Sales Load
4.73% Since Inception
4.94% for 5 Years
4.59% for 1 Year
Class C Average Annual Total Returns
- - Class C
With Sales Load
6.58% Since Inception
3.59% for 1 Year
Without Sales Load
6.58% Since Inception
4.59% for 1 Year
Class Z
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Donald D. Lennox
Douglas H. McCorkindale
Mendel A. Melzer
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
Officers
Richard A. Redeker, President
Thomas A. Early, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
PRICOA Asset Management Ltd.,
100 Piccadilly
London W1V9FN England
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 LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
This report is not authorized for
distribution to prospective investors unless
preceded or accompanied by a current
prospectus.
74433F108 MF144E
74433F207 Cat. #4443632
74433F504
74433F603
