<PAGE>
GLOBAL HIGH
INCOME DOLLAR
FUND INC.
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
- --------------------------------------------------------------------------------
December 20, 1995
Dear Shareholder,
The year ended October 31, 1995 marked a turbulent period in the trading of
emerging market debt. The Mexican peso devaluation in December 1994 and the
liquidity crisis it precipitated dominated the emerging market debt world for
the first several months of 1995. Mexico's balance of payments problems seemed
to have precipitated more generalized concerns about the continued
creditworthiness of many emerging market debt issuers. By April 1995, a degree
of recovery occurred, and emerging market debt rebounded from the lows reached
during early 1995. Recently, emerging market debt, particularly Brady bonds, has
rallied strongly as perceptions about credit stability improve and as interest
rates in the major world markets continue to fall.
The Fund's total return for the year ended October 31, 1995 was 13.14% based on
the Fund's net asset value, and 13.65% based on the Fund's share price on the
New York Stock Exchange. As of October 31, 1995, the Fund's net asset value per
share was $13.07, while its share price on the New York Stock Exchange was
$11.63. During the fiscal year, the Fund made distributions totalling $1.31 per
share.
Immediately after the peso devaluation, the Fund's position in U.S. dollar
denominated Mexican corporate debt was reduced, at prices not materially
different from where the bonds had traded prior to the devaluation. The impact
of the crisis on the Fund's net asset value was mitigated by a significant cash
balance the Fund maintained through the early months of the crisis. As yields
became more attractive in March and April 1995, the Fund reinvested its cash.
During the second half of the Fund's fiscal year, world bond market conditions
were generally favorable and the Fund remained close to fully invested, with a
wide exposure to emerging market debt. The Fund continues to hold large
positions in U.S. dollar denominated Mexican, Brazilian and Polish government
bonds, as well as South African Rand bonds.
While most emerging market countries continue to face economic challenges, we
remain encouraged by the prospects for improvement in the creditworthiness of
many emerging market issuers. Although Mexico faces serious economic problems,
many of which are the result of the peso devaluation, there are important
differences in Mexico's situation now versus last December. The value of the
peso is no longer creating a balance of trade problem--now Mexico runs a strong
trade surplus. However, the economy has plunged into a severe recession and
credit problems within the domestic economy are growing. Solutions to these
problems will take time and strong and creative management. In Brazil, economic
reforms continue slowly, but the process has produced tangible results in
opening the Brazilian economy to more competition in telecommunications, oil and
shipping. The progress of this economic reform will determine whether Brazil's
creditworthiness continues to improve. Credit developments in other emerging
debt markets continue to produce a mixed picture.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
While not all developments in emerging markets may be positive going forward,
the question is whether or not the sector offers sufficient compensation for the
risks involved. We believe available yields generally compensate for the risk of
maintaining a balanced exposure to emerging market debt.
We value you as a shareholder and a client, and thank you for your continued
support. We welcome any comments or questions you may have.
Sincerely,
/s/ Stuart Waugh
STUART WAUGH
Vice President and Portfolio Manager,
Global High Income Dollar Fund Inc.
- --------------------------------------------------------------------------------
2
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Portfolio of Investments
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- --------- ------------------------ ------------------------ ------------
<S> <C> <C> <C> <C>
LONG-TERM DEBT SECURITIES--92.86%
<CAPTION>
ARGENTINA--4.89%
<S> <C> <C> <C> <C>
US$28,000 Republic of Argentina................... 03/31/05 to 03/31/23 5.000 to 6.813%+ $ 14,526,250
------------
<CAPTION>
BRAZIL--19.39%
<S> <C> <C> <C> <C>
US$ 8,318 Banco National de Desenvelvimento
Economico e Social.................... 04/27/98 to 06/23/98 9.375 to 10.375 8,293,625
US$ 7,000 Celulose Nipo-Brasileira, S.A........... 12/21/03 9.375 6,720,000
US$ 6,000 Companhia Brasileira de Petroleos
Ipiranga.............................. 02/25/02 8.625 5,790,000
US$42,000 Federative Republic of Brazil Investment
Bonds................................. 09/15/13 6.000 21,210,000
US$ 7,000 Metalurgica Gerbau, S.A................. 11/23/01 10.250 6,623,750
US$17,000 Republic of Brazil...................... 04/15/24 4.250 to 6.812+ 8,981,250
------------
57,618,625
------------
<CAPTION>
CHILE--1.06%
<S> <C> <C> <C> <C>
US$ 3,000 Banco del Estado Chile, S.A............. 08/01/01 8.390 3,157,500
------------
<CAPTION>
COLUMBIA--2.76%
<S> <C> <C> <C> <C>
US$ 3,000 Banco Ganadero, S.A..................... 08/26/99 9.750 3,037,500
US$ 5,000 Republic of Columbia.................... 10/06/99 8.750 5,150,000
------------
8,187,500
------------
<CAPTION>
HUNGARY--0.84%
<S> <C> <C> <C> <C>
US$ 3,000 National Bank of Hungary................ 11/01/13 8.875 2,505,000
------------
<CAPTION>
INDIA--1.01%
<S> <C> <C> <C> <C>
US$ 3,000 Reliance Industries Ltd................. 09/27/05 8.125 3,015,000
------------
<CAPTION>
INDONESIA--4.01%
<S> <C> <C> <C> <C>
9,500,000 Bank Pembangunan Indonesia.............. 07/17/97 15.860+ 3,472,039
12,000,000 Bank Tambungan Negara................... 01/23/98 to 07/31/98 15.600 to 16.100+ 4,889,916
4,000,000 Perusahaan Listrik Negara............... 10/29/00 16.860+ 1,655,658
5,000,000 Polysindo Eka Perkasa................... 05/05/98 15.920+ 1,904,447
------------
11,922,060
------------
<CAPTION>
JAMAICA--1.98%
<S> <C> <C> <C> <C>
US$ 6,671 Government of Jamaica Loan
Participation, Tranche A (JP
Morgan)(3)............................ 10/16/00 6.750+ 5,870,118
------------
<CAPTION>
MEXICO--22.74%
<S> <C> <C> <C> <C>
US$ 6,570 Empresas La Moderna, S.A. de C.V........ 11/12/97 10.250 6,307,200
US$ 3,720 Grupo Industrial Durango, S.A. de
C.V................................... 07/15/01 12.000 3,301,500
US$21,000 Petroleos Mexicanos..................... 12/01/23 8.625 14,437,500
GBP 5,000 United Mexican States................... 12/03/98 12.250 7,874,859
US$44,000 United Mexican States Collateralized
Notes, Discount Bonds(1).............. 12/31/19 6.766 to 7.188+ 29,452,280
US$10,500 United Mexican States Collateralized
Notes,
Par Bonds(2).......................... 12/31/19 6.250 6,168,750
------------
67,542,089
------------
<CAPTION>
MOROCCO--2.50%
<S> <C> <C> <C> <C>
US$12,500 Kingdom of Morocco Loan Participation,
Tranche A (JP Morgan)(3).............. 01/01/09 6.688+ 7,437,500
------------
</TABLE>
3
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- --------- ------------------------ ------------------------ ------------
<S> <C> <C> <C> <C>
LONG-TERM DEBT SECURITIES--(CONCLUDED)
<CAPTION>
NETHERLANDS--1.56%
<S> <C> <C> <C> <C>
US$ 4,500 Indah Kiat International Finance........ 06/15/06 12.500% $ 4,612,500
------------
<CAPTION>
PHILIPPINES--4.30%
<S> <C> <C> <C> <C>
US$16,500 Republic of Philippines................. 12/01/09 to 12/01/17 5.750 to 6.875+ 12,765,625
------------
<CAPTION>
POLAND--9.08%
<S> <C> <C> <C> <C>
US$ 8,000 Republic of Poland, Discount Bond....... 10/27/24 6.875+ 6,120,000
US$ 8,000 Republic of Poland, Par Bond............ 10/27/24 2.750# 3,520,000
US$27,000 Republic of Poland PDI.................. 10/27/14 3.750# 17,347,500
------------
26,987,500
------------
<CAPTION>
SOUTH AFRICA--9.05%
<S> <C> <C> <C> <C>
37,000 Electricity Supply Commission of South
Africa................................ 06/01/08 11.000 7,971,666
US$ 3,517 Electricity Supply Commission of South
Africa Second Interim Dollar Agreement
Loans................................. 12/23/97 to 02/09/00 7.250 to 7.430+ 3,419,334
47,000 Republic of South Africa................ 08/31/10 13.000 11,448,812
15,000 Umgeni Waterboard....................... 09/30/05 15.000 4,040,716
------------
26,880,528
------------
<CAPTION>
TRINIDAD & TOBAGO--3.16%
<S> <C> <C> <C> <C>
US$ 9,000 Republic of Trinidad and Tobago......... 11/20/97 to 11/03/00 9.750 to 11.500 9,375,000
------------
<CAPTION>
TURKEY--0.99%
<S> <C> <C> <C> <C>
US$ 3,000 Republic of Turkey...................... 06/15/99 9.000 2,947,500
------------
<CAPTION>
VENEZUELA--3.54%
<S> <C> <C> <C> <C>
US$ 6,000 Bariven Petroleos de Venezuela, S.A..... 03/17/02 10.625 5,580,000
US$10,000 Republic of Venezuela................... 12/18/07 6.813+ 4,943,700
------------
10,523,700
------------
<CAPTION>
TOTAL LONG-TERM DEBT SECURITIES
(cost--$278,215,315)............................... 275,873,995
------------
<S> <C> <C> <C> <C>
<CAPTION>
SHORT-TERM DEBT SECURITIES--2.36%
UNITED STATES--2.36%
<S> <C> <C> <C> <C>
7,000 United States Treasury Bills
(cost--$6,999,020).................... 11/02/95 5.197@ 6,999,020
------------
</TABLE>
<TABLE>
<CAPTION>
INDEXED SECURITY--2.24%
<S> <C> <C> <C> <C>
THAILAND--2.24%
US$ 7,000 Morgan Guaranty Trust Company Thailand
Baht Linked CD (cost--$6,778,478)..... 02/05/96 12.600@(4) 6,663,874
------------
</TABLE>
4
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATE RATE VALUE
- --------- ------------------------ ------------------------ ------------
REPURCHASE AGREEMENT--0.71%
<S> <C> <C> <C> <C>
$2,107 Repurchase Agreement dated 10/31/95,
with Morgan Stanley Inc.,
collateralized by $1,415,000 U.S.
Treasury Bonds, 12.000%
due 08/15/13; proceeds: $2,107,342
(cost--$2,107,000).................... 11/01/95 5.850% $ 2,107,000
------------
Total Investments (cost--$294,099,813)--98.17%..... 291,643,889
Other assets in excess of liabilities--1.83%....... 5,443,398
------------
Net Assets (applicable to 22,736,667 shares;
equivalent to
$13.07 per share)--100.00%.......................
$297,087,287
------------
------------
</TABLE>
- ------------
Note: The Portfolio of Investments is listed by the issuers' country of origin.
@ Yield to maturity
* In local currency unless otherwise indicated
GBP British Pounds
+ Reflects rate at October 31, 1995 on variable rate instruments
# Reflects rate at October 31, 1995 on step coupon rate instruments
PDI Past Due Interest
(1) With an additional 67,691,000 recoverable rights attached expiring on
06/30/03 with no market value
(2) With an additional 10,500,000 recoverable rights attached expiring on
06/30/03 with no market value
(3) Participation interest was acquired through the financial institution
indicated parenthetically.
(4) The yield is not guaranteed. Only if certain economic conditions exist
on the maturity date will the fund receive the yield as stated.
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY CONTRACTS
<S> <C> <C> <C> <C>
CONTRACT TO IN EXCHANGE MATURITY UNREALIZED
DELIVER FOR DATES DEPRECIATION
-------------- ------------- -------------------- --------------
Indonesian Rupiah.............................. 18,813,000,000 US$ 8,131,212 11/24/95 to 12/21/95 $ 68,116
South African Rand............................. 49,100,000 US$13,186,290 11/08/95 to 11/27/95 229,225
--------------
$297,341
--------------
--------------
<CAPTION>
TOTAL INVESTMENTS BY TYPE OF ISSUER
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
-------------------------
LONG-TERM SHORT-TERM
----------- -----------
<S> <C> <C>
Government and other public issuers..... 58.95 % 2.36 %
Banks................................... 8.53 2.24
Oil/Gas................................. 8.70 --
Utilities--Electric & Water............. 5.75 --
Paper................................... 3.37 --
Steel................................... 2.23 --
Financial............................... 1.55 0.71
Other................................... 3.78 --
----- ---
92.86 % 5.31 %
----- ---
----- ---
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost--$294,099,813).... $291,643,889
Interest receivable......................................... 8,767,722
Receivable for investments sold............................. 2,125,782
Deferred organizational expenses............................ 80,557
Other assets................................................ 588
------------
Total assets............................................ 302,618,538
------------
LIABILITIES:
Payable for investments purchased........................... 4,672,698
Payable to investment adviser and administrator............. 319,549
Net unrealized depreciation of forward foreign currency
contracts.................................................. 297,341
Accrued expenses and other liabilities...................... 241,663
------------
Total liabilities....................................... 5,531,251
------------
NET ASSETS:
Capital stock--$0.001 par value; total authorized
shares--100,000,000; 22,736,667 shares issued and
outstanding................................................ 335,819,052
Distributions in excess of net investment income............ (379,068)
Accumulated net realized losses from investment
transactions............................................... (35,599,539)
Net unrealized depreciation of investments, other assets,
liabilities and forward contracts denominated
in foreign currencies..................................... (2,753,158)
------------
Net assets.............................................. $297,087,287
------------
------------
Net asset value per share............................... $13.07
------------
------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes).............. $34,603,070
----------
EXPENSES:
Investment advisory and administration................... 3,540,880
Custody and accounting................................... 350,717
Reports and notices to shareholders...................... 95,801
Legal and audit.......................................... 72,624
Amortization of organizational expenses.................. 27,428
Transfer agency fees..................................... 24,588
Directors' fees.......................................... 9,500
Other expenses........................................... 10,249
----------
4,131,787
----------
NET INVESTMENT INCOME....................................... 30,471,283
----------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT
ACTIVITIES:
Net realized losses from:
Investment transactions............................... (15,994,840)
Foreign currency transactions......................... (4,621,486)
Net change in unrealized appreciation/depreciation of:
Investments........................................... 25,637,170
Other assets, liabilities and forward contracts
denominated in
foreign currencies.................................. (417,075)
----------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENT
ACTIVITIES................................................ 4,603,769
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $35,075,052
----------
----------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended
October 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................... $ 30,471,283 $ 32,536,964
Net realized losses from investment
transactions................................. (15,994,840) (19,604,699)
Net realized losses from foreign currency
transactions................................. (4,621,486) (2,946,450)
Net change in unrealized
appreciation/depreciation of investments..... 25,637,170 (32,089,428)
Net change in unrealized
appreciation/depreciation of other assets,
liabilities and forward contracts denominated
in foreign currencies........................ (417,075) 158,795
------------ ------------
Net increase (decrease) in net assets resulting
from operations.............................. 35,075,052 (21,944,818)
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................... (26,227,183) (30,340,124)
Paid-in-capital................................ (3,512,377) (1,718,576)
------------ ------------
(29,739,560) (32,058,700)
------------ ------------
Net increase (decrease) in net assets.......... 5,335,492 (54,003,518)
NET ASSETS:
Beginning of year.............................. 291,751,795 345,755,313
------------ ------------
End of year.................................... $297,087,287 $291,751,795
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Global High Income Dollar Fund Inc. (the 'Fund') was incorporated in
Maryland on February 23, 1993 as a closed-end, non-diversified management
investment company. Organizational costs have been deferred and are being
amortized on the straight line method over a period not to exceed 60 months from
the date the Fund commenced operations.
Valuation of Investments--Securities which are listed on U.S. and foreign
stock exchanges are valued at the last sale price on the day the securities are
being valued or, lacking any sales on such day, at the last available bid price.
In cases where securities are traded on more than one exchange, the securities
are generally valued on the exchange designated by Mitchell Hutchins Asset
Management Inc. ('Mitchell Hutchins'), a wholly owned subsidiary of PaineWebber
Incorporated and investment adviser of the fund as the primary market.
Securities traded in the over-the-counter ('OTC') market and listed on the
National Association of Securities Dealers Automated Quotation System ('NASDAQ')
are valued at the last trade price on NASDAQ prior to the time of valuation;
other OTC securities are valued at the last bid price available in the OTC
market prior to the time of valuation. The amortized cost method of valuation
generally is used to value short-term debt instruments with sixty days or less
remaining to maturity. Securities and assets for which market quotations are not
readily available (including restricted securities subject to limitations as to
their sale) are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors. All investments quoted in foreign
currencies will be valued weekly in U.S. dollars on the basis of foreign
currency exchange rates prevailing at the time such valuation is determined by
the Fund's custodian.
Foreign currency exchange rates are generally determined prior to the close
of the New York Stock Exchange ('NYSE'). Occasionally events affecting the value
of foreign investments and such exchange rates occur between the time at which
they are determined and the close of the NYSE, which will not be reflected in
the computation of the Fund's net asset value. If events occurred materially
affecting the value of such securities or currency exchange rates during such
time period, the securities will be valued at their fair value as determined in
good faith by or under the direction of the Fund's Board of Directors.
Repurchase Agreements--The Fund's custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. The Fund occasionally
participates in joint repurchase agreement transactions with other funds managed
by Mitchell Hutchins.
9
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Investment Transactions and Investment Income--Investment transactions are
recorded on trade date. Realized gains and losses from sales of investments and
foreign exchange transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Discounts are accreted as
adjustments to interest income and the identified cost of investments.
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:
(1) market value of investment securities, other assets and
liabilities--at the exchange rates prevailing at the end of the period.
(2) 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 and the market value of the Fund's securities are
presented at the foreign exchange rates at the end of the period, the Fund does
not generally isolate the effect of fluctuations in foreign exchange rates from
the effect of the changes in market prices of securities. However, the Fund does
isolate the effect of fluctuations in foreign exchange rates when determining
the gain or loss upon the sale or maturity of foreign currency-denominated debt
obligations pursuant to U.S. federal income tax regulations. Certain foreign
exchange gains/losses included in realized and unrealized gains/losses are
included in or reduce ordinary income for federal income tax purposes.
Realized gains/losses from investment transactions includes realized
foreign exchange gains and losses from the sale of portfolio securities, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions and the difference between interest
and foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts received or paid. Unrealized gains and losses from
translating foreign currency-denominated assets and liabilities at year-end
exchange rates are included in change in unrealized appreciation of other
assets, liabilities and forward contracts denominated in foreign currencies.
Forward Foreign Currency Contracts--The Fund may enter into forward foreign
currency exchange contracts ('forward contracts') in connection with planned
purchases or sales of securities or to hedge the U.S. dollar value of portfolio
securities denominated in a particular currency.
The Fund has no specific limitation on the percentage of assets which may
be committed to such contracts. The Fund may enter into forward contracts or
maintain a net exposure to forward contracts only if (1) the consummation of the
contracts would not obligate the Fund to deliver an amount of foreign currency
in excess of the value of the position being hedged by such contracts or (2) the
Fund maintains cash, U.S. government securities or liquid, high-grade debt
securities in a segregated account in an amount not less than the value of its
total assets committed to the
10
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
consummation of the forward contracts and not covered as provided in (1) above,
as marked-to-market daily.
Risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their forward contracts and
from unanticipated movements in the value of foreign currencies relative to the
U.S. dollar.
Fluctuations in the value of forward contracts are recorded for book
purposes as an unrealized gain or loss by the Fund. Realized gains and losses
include net gains and losses recognized by the Fund on contracts which have
matured or the Fund has terminated by entering into offsetting commitments.
Dividends and Distributions--Dividends and distributions to shareholders
are recorded on the ex-dividend date. Dividends from net investment income and
distributions from realized capital gains are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles. These 'book/tax' differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications. Dividends and distributions which exceed net investment
income and net realized capital gains for financial reporting purposes, but not
for tax purposes, are reported as dividends in excess of net investment income
or distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax purposes,
they are reported as distributions of paid-in-capital.
Federal Taxes--The Fund intends to distribute substantially all of its
taxable income and to comply with the other requirements of the Internal Revenue
Code applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is required. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, the Fund intends not to be subject to a federal
excise tax.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of currencies,
adverse fluctuations in foreign currency values and possible adverse political,
social and economic developments, including those particular to a specific
industry, country or region, which could cause the securities and their markets
to be less liquid and prices more volatile than those of comparable U.S.
companies and U.S. government securities. These risks are greater with respect
to securities of issuers located in emerging market countries in which each Fund
is authorized to invest. The ability of the issuers of debt securities held by
the Fund to meet their obligations may be affected by economic and political
developments in a specific industry, country or region.
11
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has an Investment Advisory and Administration Contract ('Advisory
Contract') with Mitchell Hutchins. In accordance with the Advisory Contract, the
Fund pays Mitchell Hutchins an investment advisory and administration fee, which
is accrued weekly and paid monthly, at the annual rate of 1.25% of the Fund's
average weekly net assets.
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at October
31, 1995, was substantially the same as the cost of securities for financial
statement purposes.
At October 31, 1995, the components of net unrealized depreciation of
investments were as follows:
<TABLE>
<S> <C>
Gross depreciation (from investments having an excess of
cost over value).......................................... (17,348,525)
Gross appreciation (from investments having an excess of
value over cost).......................................... $14,892,601
-----------
Net unrealized depreciation of investments.................. $(2,455,924)
-----------
-----------
</TABLE>
For the year ended October 31, 1995, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were $178,945,731 and
$185,153,711, respectively.
CAPITAL STOCK
There are 100,000,000 shares of $0.001 par value capital stock authorized.
Of the 22,736,667 shares outstanding at October 31, 1995 Mitchell Hutchins owned
6,727 shares.
FEDERAL TAX STATUS
To reflect reclassifications arising from permanent 'book/tax' differences
for the year ended October 31, 1995, accumulated net realized gain/loss was
increased by $4,621,486; undistributed net investment income was decreased by
$1,109,109; and capital stock was decreased by $3,512,377.
At October 31, 1995, the Fund had a capital loss carryforward of
$34,742,334 available as a reduction, to the extent provided in the regulations,
of any future net realized capital gains, $19,604,699 will expire by October 31,
2002 and $15,137,635 will expire by October 31, 2003. To the extent that such
losses are used to offset future capital gains, it is probable that the gains so
offset will not be distributed.
12
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Quarterly Results of Operations (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED AND NET
UNREALIZED INCREASE
GAINS (LOSSES) (DECREASE)
FROM INVESTMENTS IN NET ASSETS
NET INVESTMENT AND FOREIGN RESULTING FROM
INCOME CURRENCY TRANSACTIONS OPERATIONS
------------------- --------------------- ---------------------
TOTAL PER TOTAL PER TOTAL PER
QUARTER ENDED (000) SHARE (000) SHARE (000) SHARE
- ------------------------------ ------- ----- -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
October 31, 1995.............. $ 7,815 $0.34 $ 3,761 $ 0.17 $ 11,576 $ 0.51
July 31, 1995................. 7,898 0.35 18,103 0.80 26,001 1.15
April 30, 1995................ 7,200 0.32 3,827 0.17 11,027 0.49
January 31, 1995.............. 7,558 0.33 (21,087) (0.93) (13,529) (0.60)
------- ----- -------- ------ -------- ------
Totals............ $30,471 $1.34 $ 4,604 $ 0.21 $ 35,075 $ 1.55
------- ----- -------- ------ -------- ------
------- ----- -------- ------ -------- ------
October 31, 1994.............. $ 8,113 $0.36 $ 7,433 $ 0.33 $ 15,546 $ 0.69
July 31, 1994................. 8,400 0.37 (13,095) (0.58) (4,695) (0.21)
April 30, 1994................ 8,246 0.36 (55,918) (2.46) (47,672) (2.10)
January 31, 1994.............. 7,778 0.34 7,098 0.31 14,876 0.65
------- ----- -------- ------ -------- ------
Totals............ $32,537 $1.43 $(54,482) $(2.40) $(21,945) $(0.97)
------- ----- -------- ------ -------- ------
------- ----- -------- ------ -------- ------
</TABLE>
13
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Years Ended
October 31, For the Period
-------------------- October 8, 1993+
1995 1994 to October 31, 1993
-------- -------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of
period...................... $ 12.83 $ 15.21 $ 15.00
-------- -------- ----------
Net investment income......... 1.34 1.43 0.04
Net realized and unrealized
gains (losses) from
investments and foreign
currency transactions....... 0.21 (2.40) 0.17
-------- -------- ----------
Total increase (decrease) from
investment operations....... 1.55 (0.97) 0.21
-------- -------- ----------
Dividends from net investment
income...................... (1.16) (1.34) --
Distributions of
paid-in-capital............. (0.15) (0.07) --
-------- -------- ----------
Total dividends and
distributions............... (1.31) (1.41) --
-------- -------- ----------
Net asset value, end of
period...................... $ 13.07 $ 12.83 $ 15.21
-------- -------- ----------
-------- -------- ----------
Per share market value, end of
period...................... $ 11.63 $ 11.50 $ 15.00
-------- -------- ----------
-------- -------- ----------
Total investment return (1)... 13.65% (14.80)% 0.00%
-------- -------- ----------
-------- -------- ----------
Ratios/Supplemental Data:
Net assets, end of period
(000's)..................... $297,087 $291,752 $ 345,755
Expenses to average net
assets...................... 1.46% 1.50% 1.41%*
Net investment income to
average net assets.......... 10.76% 10.40% 4.60%*
Portfolio turnover rate....... 71% 51% 1%
</TABLE>
- ------------------
* Annualized
+ Commencement of operations
(1) Total investment return on market value is calculated assuming a purchase of
one share at market value on the first day of each period reported,
reinvestment of all dividends and other distributions in accordance with the
Dividend Reinvestment Plan, and a sale at market value on the last day of
each period reported. Total investment returns for periods of less than one
year have not been annualized.
14
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Global High Income Dollar Fund Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Global High Income Dollar Fund Inc.
(the 'Fund') at October 31, 1995, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the two years in the
period then ended and for the period October 8, 1993 (commencement of
operations) through October 31, 1993, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as 'financial statements') are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995 by correspondence with the
custodian and brokers provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 20, 1995
15
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (October 31,
1995) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that $1.1547 per share
paid during the fiscal year by the Fund was derived from net investment income
and is taxable as ordinary income. Additionally, the Fund paid a nontaxable
distribution of $0.1533 per share to shareholders during the fiscal year.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need
not be reported as taxable income. Some retirement trusts (e.g., corporate,
Keogh and 403(b)(7) plans) may need this information for their annual
information reporting.
Since the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar 1995. The second notification, which will
reflect the amount to be used by calendar year taxpayers on their federal income
tax returns, will be made in conjunction with Form 1099 DIV and will be mailed
in January 1995. Shareholders are advised to consult their own tax advisers with
respect to the tax consequences of their investment in the Fund.
16
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------
THE FUND
Global High Income Dollar Fund Inc. (the 'Fund') is a non-diversified,
closed-end management investment company whose shares trade on the New York
Stock Exchange ('NYSE'). The Fund's primary investment objective is to achieve a
high level of current income; capital appreciation, to the extent consistent
with its primary objective, is a secondary objective in the selection of
investments. The Fund's investment adviser and administrator is Mitchell
Hutchins Asset Management Inc., a wholly owned subsidiary of PaineWebber
Incorporated, which has over $44.6 billion in assets under management as of
October 31, 1995.
SHAREHOLDER INFORMATION
The Fund's NYSE trading symbol is 'GHI'. Weekly comparative net asset value and
market price information about the Fund is published each Monday in the Wall
Street Journal and New York Times and each Saturday in Barron's, as well as in
numerous other newspapers.
An annual meeting of shareholders of the Fund was held on February 16, 1995. At
the meeting, Richard Q. Armstrong, E. Garrett Bewkes, Jr., Richard R. Burt, John
R. Torell III and William D. White were elected as directors to serve until the
annual meeting of shareholders in 1996, or until their successors are elected
and qualified, and the selection of Price Waterhouse LLP as the Fund's
independent accountants for the fiscal year ending October 31, 1995 was
ratified. The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
---------------- -------------------------
<S> <C> <C>
Richard W. Armstrong............ 20,948,216 571,402
E. Garrett Bewkes, Jr........... 21,000,784 518,834
Richard R. Burt................. 21,002,645 516,974
John R. Torell III.............. 20,986,593 533,025
William D. White................ 20,949,679 569,939
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
---------- ------------- ------------------
<S> <C> <C> <C>
Ratification of the selection of
Price Waterhouse LLP........... 21,139,266 89,825 290,527
</TABLE>
Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' totals.
17
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
- --------------------------------------------------------------------------------
General Information--(concluded)
- --------------------------------------------------------------------------------
DISTRIBUTION POLICY
Under current policies of the Fund's board of directors, shareholders may
affirmatively elect to receive all dividends and other distributions in cash
paid by check mailed directly to the shareholders by PNC Bank, National
Association ('Transfer Agent'), as dividend disbursing agent. Under the Fund's
Dividend Reinvestment Plan (the 'Plan'), shareholders not making such election
and whose shares are registered in their own names will receive all such
distributions in additional Fund shares. Shareholders whose shares are held in
the name of a broker or nominee should contact such broker or nominee to
determine whether, or how, they may participate in the Plan.
The Transfer Agent will serve as agent for the shareholders in administering the
Plan. After the Fund declares a dividend or determines to make a capital gain
distribution, the Transfer Agent will, as agent for the participants, receive
the cash payment and use it to buy Fund shares in the open market, on the New
York Stock Exchange or elsewhere, for the participants' accounts.
18
<PAGE>
- --------------------------------------
BOARD OF DIRECTORS
Richard Q. Armstrong
E. Garrett Bewkes, Jr., Chairman
Richard R. Burt
John R. Torell III
William D. White
- --------------------------------------
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Stuart Waugh
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
- --------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
Mitchell Hutchins Asset Management
Inc.
1285 Avenue of the Americas
New York, New York 10019
- --------------------------------------
Notice is hereby given in accordance
with Section 23(c) of the Investment
Company Act of 1940 that from time to
time the Fund may purchase at market
prices shares of its common stock in
the open market.
This report is sent to the
shareholders of the Fund for their
information. It is not a prospectus,
circular or representation intended
for use in the purchase or sale of
shares of the Fund or of any
securities mentioned in the report.
(Copyright)1995 PaineWebber Incorporated
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