<PAGE>
Global High Income Dollar Fund Inc. Semiannual Report
June 16, 1997
Dear Shareholder,
We are pleased to report to you on the Fund's performance during the past six
months. It was a time of surprising stability in emerging market bonds,
considering the selloff in the U.S. market in connection with the Federal
Reserve's March interest rate hike.
General Market Overview
- ----------------------------------------
During the past six months, credit developments in most emerging markets
were generally positive or neutral. Two of the better performers were Brazil and
Argentina, both ahead of one-notch upgrades by Standard & Poor's. Bulgarian debt
performed well in anticipation of the successful implementation of an
International Monetary Fund program establishing a currency board.
Portfolio Review
- ----------------------------------------
For the six months ended April 30, 1997, the Fund's total return was 7.8%,
based on the net asset value change and assuming dividends were reinvested at
the net asset value on the payable dates (for illustrative purposes only); the
return was 11.2%, based on the Fund's New York Stock Exchange share prices
(assuming dividends were invested under the Dividend Reinvestment Plan). Over
the same period, the JP Morgan Emerging Market Bond Plus (which includes Russian
debt) returned 10%. The Fund paid dividends totaling $0.636 during the same
timeframe.
The Fund's largest holdings include Mexico (21% of total net assets), which
has successfully stabilized its economy after the 1995 debt crisis, and Poland
(11.5% of total net assets) which has made great strides towards improving its
creditworthiness. We also hold debt instruments of Morocco (5% of total net
assets) and Bulgaria (4% of total net assets).
- ----------------------------------------
Global High Income
Dollar Fund Inc.
Fund Profile
Goal:
High level of current
income, secondarily
capital appreciation
Portfolio Manager:
Stuart Waugh,
Mitchell Hutchins
Asset Management Inc.
Total Net Assets:
$352.7 million (as of
April 30, 1997)
Dividend Payment:
Monthly
- ----------------------------------------
1
<PAGE>
SEMIANNUAL REPORT
We were hurt by our decision to hold fewer Brazilian bonds (14% of
total net assets) than our rivals, but we stand by that decision. We believe
Brazil may become vulnerable to balance of payments problems because of its
overvalued currency, deteriorating trade balance and growing short-term public
debt load. We also hold fewer Argentine bonds than the average emerging market
debt fund (7% of total net assets) because these bonds would suffer, if
Brazilian bond prices fell. We continue to avoid some of the very risky credits,
among them Ecuador and Nigeria.
Outlook
- ----------------------------------------
Overall, the performance of emerging market debt for the remainder of this
year is likely to be highly influenced by the U.S. Treasury market's
performance. Right now, prospects for continued stable short-term U.S. interest
rates should support present valuation levels of emerging market debt. If the
Federal Reserve continues to raise U.S. interest rates, however, we may
reconsider this position. In that environment, emerging market bonds would most
probably perform worse than other bonds as investors seek safe havens and shun
risk.
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued support,
and welcome any comments or questions you may have.
Sincerely,
/s/ Margo N. Alexander /s/ Stuart Waugh
- ---------------------- ----------------------
MARGO N. ALEXANDER STUART WAUGH
President, Vice President
Mitchell Hutchins and Portfolio Manager,
Asset Management Inc. Global High Income
Dollar Fund Inc.
2
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ------------- --------------------- ------------------------- ------------
LONG-TERM DEBT SECURITIES--83.90%
ARGENTINA--7.32%
<S> <C> <C> <C>
US$ 7,435 Republic of Argentina........................ 01/30/17 11.375% $ 7,895,077
US$ 10,195 Republic of Argentina........................ 03/31/05 6.750+ 9,360,061
US$ 4,033 Republic of Argentina, DISC.................. 03/31/23 6.375+ 3,327,225
5,000 Republic of Argentina........................ 02/12/07 11.750 5,225,758
------------
25,808,121
------------
BRAZIL--13.63%
US$ 6,000 Celulose Nipo-Brasileira, S.A................ 12/21/03 9.375 6,007,500
US$ 3,000 Companhia Brasileira de Petroleos Ipiranga... 02/25/02 10.625++ 3,187,500
US$ 17,000 Federal Republic of Brazil, DISC............. 04/15/24 6.875+ 13,663,750
US$ 22,000 Federal Republic of Brazil, EXIT............. 09/15/13 6.000 16,087,500
US$ 6,000 Metalurgica Gerbau, S.A...................... 11/23/01 to 05/24/04 10.250 to 11.125 6,112,500
US$ 3,000 Tevecap, S.A................................. 11/26/04 12.625 3,030,000
------------
48,088,750
------------
BULGARIA--4.24%
US$ 10,110 Republic of Bulgaria, IAB.................... 07/28/11 6.563+ 6,337,757
US$ 18,000 Republic of Bulgaria, FLIRB.................. 07/28/12 2.250++ 8,628,840
------------
14,966,597
------------
CHILE--1.80%
US$ 3,000 Banco del Estado Chile, S.A.................. 08/01/01 8.390 3,131,100
US$ 3,250 Empresa Nacional de Electricdad, S.A......... 02/01/37 7.325 3,201,250
------------
6,332,350
------------
HUNGARY--1.96%
1,250,000 Government of Hungary........................ 05/17/98 to 04/12/99 16.500 to 23.500 6,914,410
------------
INDONESIA--0.93%
US$ 3,000 Indah Kiat International Finance............. 06/15/06 12.500 3,281,250
------------
JAMAICA--1.04%
US$ 3,812 Government of Jamaica Loan Participation,
Tranche A (JP Morgan)(1)................... 10/16/00 6.625+ 3,659,289
------------
KAZAKHSTAN--0.86%
US$ 3,000 Republic of Kazakhstan....................... 12/20/99 9.250 3,030,000
------------
MEXICO--19.58%
US$ 2,500 Altos Hornos de Mexico....................... 04/30/02 to 04/30/04 11.375 to 11.875 2,531,250
US$ 2,415 Copamex Industrias, S.A...................... 04/30/04 11.375 2,478,394
US$ 6,720 Grupo Industrial Durango, S.A. de C.V........ 07/15/01 to 08/01/03 12.000 to 12.625 7,220,400
US$ 10,000 Mexican Multi Year Refinance Loan
Participation (Salomon Brothers)(1)........ 03/20/05 6.563+ 9,400,000
US$ 9,500 Petroleos Mexicanos.......................... 12/01/23 8.625 7,837,500
US$ 35,650 United Mexican States, DISC (2).............. 12/31/19 6.352 to 6.867+ 31,572,709
US$ 7,568 United Mexican States........................ 05/15/26 11.500 8,036,308
------------
69,076,561
------------
</TABLE>
3
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ------------- --------------------- ------------------------- ------------
LONG-TERM DEBT SECURITIES--(CONCLUDED)
MOROCCO--4.98%
<S> <C> <C> <C>
US$ 5,000 Kingdom of Morocco Loan Participation,
Tranche A (Chase Manhattan Bank) (1)....... 01/01/09 6.375%+ $ 4,390,650
US$ 15,000 Kingdom of Morocco Loan Participation,
Tranche A (Morgan Guaranty Trust) (1)...... 01/01/09 6.375+ 13,171,950
------------
17,562,600
------------
PANAMA--3.47%
US$ 14,521 Republic of Panama, PDI...................... 07/17/16 6.563+ 12,252,380
------------
PHILIPPINES--2.11%
US$ 2,639 Republic of Philippines...................... 10/07/16 8.750 2,620,527
US$ 5,000 Republic of Philippines, DCB................. 12/01/09 6.375+ 4,825,000
------------
7,445,527
------------
POLAND--8.86%
25,210 Republic of Poland........................... 10/12/01 to 06/12/02 12.000 6,339,395
US$ 30,600 Republic of Poland, PDI...................... 10/27/14 4.000++ 24,900,750
------------
31,240,145
------------
ROMANIA--0.87%
US$ 3,000 National Bank of Romania..................... 06/25/99 9.750 3,056,250
------------
RUSSIA--4.84%
US$ 5,000 Russian Principle Loan#...................... - - 2,912,500
US$ 8,000 Vnesheconombank Loan Participation (Chase
Manhattan Bank) (1) ##..................... - - 6,480,000
US$ 9,500 Vnesheconombank Loan Participation (Morgan
Guaranty Trust) (1) ##..................... - - 7,695,000
------------
17,087,500
------------
TRINIDAD & TOBAGO--2.77%
US$ 9,000 Republic of Trinidad and Tobago.............. 11/03/00 to 10/03/04 9.750 to 11.750 9,787,500
------------
VENEZUELA--4.64%
US$ 16,175 Republic of Venezuela, PAR (3)............... 03/31/20 6.750 11,737,065
US$ 5,250 Republic of Venezuela, DCB................... 12/18/07 6.500+ 4,636,432
------------
16,373,497
------------
Total Long-Term Debt Securities (cost-$252,764,789)......... 295,962,727
------------
<CAPTION>
SHORT-TERM DEBT SECURITIES--8.79%
INDONESIA--0.24%
<S> <C> <C> <C> <C>
2,000,000 Bank Tambungan Negara........................ 01/23/98 17.000 831,276
------------
MEXICO--1.38%
45,393 United Mexican States Treasury Bills......... 02/04/98 23.400@ 4,856,748
------------
POLAND--2.65%
32,080 Republic of Poland Treasury Bills............ 06/18/97 to 04/02/98 18.768 to 21.650@ 9,343,872
------------
</TABLE>
4
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------- --------------------- ------------------------- ------------
SHORT-TERM DEBT SECURITIES--(CONCLUDED)
UNITED STATES--4.52%
<S> <C> <C> <C>
$ 16,000 U. S. Treasury Bills......................... 05/29/97 5.000%@ $ 15,937,760
------------
Total Short-Term Debt Securities (cost-$32,285,617)......... 30,969,656
------------
REPURCHASE AGREEMENTS--7.66%
3,034 Repurchase agreement dated 04/30/97 with
Citicorp Securities, collateralized by
$2,590,000 U.S. Treasury Bonds, 11.750%,
due 02/15/01; proceeds: $3,034,455......... 05/01/97 5.400 3,034,000
5,275 Repurchase agreement dated 04/30/97 with
First Chicago Capital Markets, Inc.,
collateralized by $5,090,000 U.S. Treasury
Notes, 9.250%, due 08/15/98; proceeds:
$5,275,788................................. 05/01/97 5.375 5,275,000
6,725 Repurchase agreement dated 04/30/97 with
First Chicago Capital Markets, Inc.,
collateralized by $6,830,000 U.S. Treasury
Notes, 6.000%, due 08/15/99; proceeds:
$6,726,004................................. 05/01/97 5.375 6,725,000
12,000 Repurchase agreement dated 04/30/97 with
Salomon Brothers, Inc., collateralized by
$12,080,000 U.S. Treasury Notes, 5.625%,
due 11/30/98; proceeds: $12,001,780........ 05/01/97 5.340 12,000,000
------------
Total Repurchase Agreements (cost-$27,034,000).............. 27,034,000
------------
</TABLE>
<TABLE>
<S> <C>
Total Investments (cost-$312,084,406)-100.35%................................................................. 353,966,383
Liabilities in excess of other assets-(-0.35%)................................................................ (1,228,329)
------------
Net Assets-100.00%............................................................................................ $352,738,054
------------
------------
</TABLE>
- ---------------
<TABLE>
<S> <C>
Note: The Portfolio of Investments is listed by the issuer's country of origin
* In local currency unless otherwise indicated
@ Yield to maturity
+ Reflects rate at April 30, 1997 on variable rate instruments
++ Reflects rate at April 30, 1997 on step coupon rate instruments
# Purchased on a when-issued basis, coupon rate and maturity date will be determined upon settlement
## Non-performing loans currently under restructuring
(1) Participation interest was acquired through the financial institution indicated parenthetically
(2) With an additional 54,845,000 recoverable rights attached maturing on 06/30/03 with no market value
(3) With an additional 80,875 warrants attached maturing on 4/15/20 with no market value
DCB Debt Conversion Bond
DISC Discount Bond
EXIT Investment Bond
FLIRB Front-loaded Interest Reduction Bond
IAB Interest Arrears Bond
PAR Par Bond
PDI Past Due Interest Bond
</TABLE>
5
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO MATURITY APPRECIATION
DELIVER IN EXCHANGE FOR DATES (DEPRECIATION)
-------------- ---------------- ----------------- --------------
<S> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY CONTRACTS
Indonesian Rupiah............................... 20,000,000,000 US$ 7,890,935 7/18/97 to $(339,517)
04/06/98
U.S. Dollars.................................... 7,882,055 IDR 20,000,000,000 7/18/97 to 348,397
04/06/98
-----------
$ 8,880
-----------
-----------
</TABLE>
- ---------------
CURRENCY TYPE ABBREVIATIONS:
IDR-Indonesian Rupiah
INVESTMENTS BY TYPE OF ISSUER
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
----------------------------
LONG-TERM SHORT-TERM
------------- -------------
<S> <C> <C>
Government and other public issuers............... 69.42% 8.55%
Repurchase agreements............................. -- 7.66
Paper............................................. 3.75 --
Oil/Gas........................................... 3.13 --
Banks and other financial institutions............ 2.68 0.24
Industrial........................................ 2.28 --
Steel............................................. 1.73 --
Utilities--Electric & Water....................... 0.91 --
----- -----
83.90% 16.45%
----- -----
----- -----
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost - $312,084,406)... $353,966,383
Cash........................................................ 5,299,792
Receivable for investments and foreign currency sold........ 29,806,309
Interest receivable......................................... 6,964,649
Unrealized appreciation on forward foreign currency
contracts................................................. 348,397
Deferred organizational expenses............................ 38,839
Other assets................................................ 9,750
------------
Total assets................................................ 396,434,119
------------
LIABILITIES
Payable for investments and foreign currency purchased...... 42,881,683
Payable to investment adviser and administrator............. 356,474
Unrealized depreciation on forward currency contracts....... 339,517
Accrued expenses and other liabilities...................... 118,391
------------
Total liabilities........................................... 43,696,065
------------
NET ASSETS
Capital stock - $0.001 par value; total authorized shares -
100,000,000; 22,736,667 shares issued and outstanding..... 335,561,113
Undistributed net investment income......................... 378,640
Accumulated net realized losses from investment
transactions.............................................. (25,049,960)
Net unrealized appreciation of investments, other assets,
liabilities and forward contracts denominated in foreign
currencies................................................ 41,848,261
------------
Net assets.................................................. $352,738,054
------------
------------
Net asset value per share................................... $15.51
------------
------------
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, 1997
(UNAUDITED)
--------------
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes)................. $ 17,309,641
--------------
EXPENSES:
Investment advisory and administration...................... 2,181,153
Custody and accounting...................................... 132,270
Reports and notices to shareholders......................... 68,009
Legal and audit............................................. 42,130
Transfer agency fees........................................ 16,833
Amortization of organizational expenses..................... 13,906
Directors' fees............................................. 6,125
Other expenses.............................................. 9,133
--------------
2,469,559
--------------
Net investment income....................................... 14,840,082
--------------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT
ACTIVITIES:
Net realized gains (losses) from:
Investment transactions................................... 7,450,203
Foreign currency transactions............................. (3,873,530)
Net change in unrealized appreciation/depreciation of:
Investments............................................... 7,966,264
Other assets, liabilities and forward contracts
denominated in foreign currencies....................... (94,424)
--------------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENT
ACTIVITIES................................................ 11,448,513
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 26,288,595
--------------
--------------
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
APRIL 30, ENDED
1997 OCTOBER 31,
(UNAUDITED) 1996
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income............................. $ 14,840,082 $29,631,958
Net realized gains from investment transactions... 7,450,203 6,972,906
Net realized losses from foreign currency
transactions.................................... (3,873,530) (590,711)
Net change in unrealized appreciation/
depreciation of:
Investments..................................... 7,966,264 36,371,633
Other assets, liabilities and forward contracts
denominated in foreign currencies............. (94,424) 357,946
------------ ------------
Net increase in net assets resulting from
operations...................................... 26,288,595 72,743,732
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............................. ( 14,460,520) (28,921,040)
------------ ------------
Net increase in net assets........................ 11,828,075 43,822,692
NET ASSETS:
Beginning of period............................... 340,909,979 297,087,287
------------ ------------
End of period (including undistributed net
investment income of $378,640 at
April 30, 1997)................................. $352,738,054 $340,909,979
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Global High Income Dollar Fund Inc. (the 'Fund') was incorporated in the
state of Maryland on February 23, 1993 and is registered with the Securities and
Exchange Commission as a closed-end, non-diversified management investment
company. Organizational costs have been deferred and are being amortized using
the straight line method over a period not to exceed 60 months from the date the
Fund commenced operations.
The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies:
Valuation of Investments--Securities which are listed on 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 as the primary market by Mitchell Hutchins
Asset Management Inc. ('Mitchell Hutchins'), a wholly owned subsidiary of
PaineWebber Incorporated ('PaineWebber') and investment adviser and
administrator of the Fund. Securities traded in the over-the-counter ('OTC')
market and listed on The Nasdaq Stock Market, Inc. ('Nasdaq') are valued at the
last available sales price, or last bid price available if no sales occur 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 (other
than short-term investments that mature in 60 days or less). The amortized cost
method of valuation 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 a management committee 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 regular trading on 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 on that day. If
events materially affecting the value of such securities or currency exchange
rates occurred 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.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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.
Investment Transactions and Investment Income--Investment transactions are
recorded on the trade date. Realized gains and losses from investments and
foreign exchange transactions are calculated on 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; and (2) Purchases and sales of investment securities, income and
expenses--at the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets and the market value of the Fund's portfolio 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 federal income tax regulations. Certain foreign exchange
gains and losses included in realized and unrealized gains and losses are
included in or are a reduction of ordinary income in accordance with federal
income tax regulations.
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 may also use forward
currency contracts to attempt to enhance income.
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 or liquid securities in a segregated account in an amount
not less than the value of its total assets committed to the consummation of the
forward contracts and not covered as provided in (1) above, as marked-to-market
daily.
Risks may arise with respect to 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Fluctuations in the value of forward contracts are recorded for book purposes
as unrealized gains or losses by the Fund. Realized gains and losses include net
gains and losses recognized by the Fund on contracts which have matured.
Dividends and Distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions 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 reclassification.
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 the 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
particular to specific industry, country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's board of directors has approved an Investment Advisory and
Administration Contract ('Advisory Contract') with Mitchell Hutchins, under
which Mitchell Hutchins serves as investment adviser and administrator of the
Fund. 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.
SECURITY LENDING
The Fund may lend up to 33 1/3% of its total assets to qualified
institutions. The loans are secured at all times by cash or U.S. government
securities in an amount at least equal to the market value of the securities
loaned, plus accrued interest, determined on a daily basis and adjusted
accordingly. The Fund may regain record ownership of loaned securities to
exercise certain beneficial rights, however, the Fund may bear the risk of delay
in recovery of, or even loss of rights in, the securities loaned should the
borrower fail financially. The Fund receives compensation, which is included in
interest income, for lending its securities from interest earned on the cash or
U.S. government securities held as collateral, net of fee rebates paid to the
borrower plus reasonable administrative and custody fees. The Fund's lending
agent is PaineWebber Global Security Lending, a wholly owned subsidiary of
PaineWebber, who received no compensation from the Fund for the six months ended
April 30, 1997. As of April 30, 1997, the Fund had no portfolio securities
loaned outstanding.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at April 30,
1997, was substantially the same as the cost of securities for financial
statement purposes.
At April 30, 1997, the components of net unrealized appreciation of
investments were as follows:
<TABLE>
<S> <C>
Gross appreciation (investments having an excess of value
over cost)................................................ $ 43,967,178
Gross depreciation (investments having an excess of cost
over value)............................................... (2,085,201)
-------------
Net unrealized appreciation of investments.................. $ 41,881,977
-------------
-------------
</TABLE>
For the six months ended April 30, 1997, total aggregate purchases and sales
of portfolio securities, excluding short-term securities, were $77,084,658 and
$74,008,451, 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 April 30, 1997 Mitchell Hutchins owned
7,756 shares.
FEDERAL INCOME TAX STATUS
The Fund intends to distribute 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.
At October 31, 1996, the Fund had capital loss carryforwards of $28,626,547
available as a reduction, to the extent provided in the regulations, of any
future net realized capital gains which expires as follows: $13,488,912 in 2002
and $15,137,635 in 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.
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
SIX MONTHS FOR THE YEARS ENDED
ENDED OCTOBER 31, FOR THE PERIOD
APRIL 30, 1997 -------------------------------------- OCTOBER 8, 1993+
(UNAUDITED) 1996 1995 1994 TO OCTOBER 31, 1993
-------------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 14.99 $ 13.07 $ 12.83 $ 15.21 $ 15.00
-------------- -------- -------- -------- --------
Net investment income......................... 0.65 1.30 1.34 1.43 0.04
Net realized and unrealized gains (losses)
from investments and foreign currency....... 0.51 1.89 0.21 (2.40) 0.17
-------------- -------- -------- -------- --------
Net increase (decrease) from investment
operations.................................. 1.16 3.19 1.55 (0.97) 0.21
-------------- -------- -------- -------- --------
Dividends from net investment income.......... (0.64) (1.27) (1.16) (1.34) --
Distributions from paid-in-capital............ -- -- (0.15) (0.07) --
-------------- -------- -------- -------- --------
Total dividends and distributions to
shareholders................................ (0.64) (1.27) (1.31) (1.41) --
-------------- -------- -------- -------- --------
Net asset value, end of period................ $ 15.51 $ 14.99 $ 13.07 $ 12.83 $ 15.21
-------------- -------- -------- -------- --------
-------------- -------- -------- -------- --------
Per share market value, end of period......... $ 13.38 $ 12.63 $ 11.63 $ 11.50 $ 15.00
-------------- -------- -------- -------- --------
-------------- -------- -------- -------- --------
Total investment return (1)................... 11.18% 20.26% 13.65% (14.80)% 0.00%
-------------- -------- -------- -------- --------
-------------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000's)............. $352,738 $340,910 $297,087 $291,752 $ 345,755
Expenses to average net assets................ 1.42%* 1.43% 1.46% 1.50% 1.41%*
Net investment income to average net assets... 8.50%* 9.18% 10.76% 10.40% 4.60%*
Portfolio turnover rate....................... 26% 80% 71% 51% 1%
</TABLE>
- ------------------
<TABLE>
<S> <C>
+ Commencement of operations
* Annualized
(1) Total investment return on market value is calculated assuming a purchase at market value on the first day of
each period reported, reinvestment of all dividends and distributions in accordance with the Dividend
Reinvestment Plan, and a sale at market value on the last day of each period reported. Total investment return
for periods less than one year has not been annualized. Total investment return does not reflect brokerage
commissions.
</TABLE>
14
<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. As a secondary objective the Fund seeks capital
appreciation, to the extent consistent with its primary objective. The Fund's
investment adviser and administrator is Mitchell Hutchins Asset Management Inc.,
a wholly owned subsidiary of PaineWebber Incorporated, which has over $43.0
billion in assets under management as of April 30, 1997.
SHAREHOLDER INFORMATION
The Fund's NYSE trading symbol is 'GHI.' Comparative net asset value and
market price information about the Fund is published weekly in The Wall Street
Journal and New York Times and Barron's, as well as in numerous other
publications.
An annual meeting of shareholders of the Fund was held on February 20, 1997.
At the meeting, Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes,
Jr., Richard R. Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen, Frederic
V. Malek, Carl W. Schafer and John R. Torell III were elected to serve as
directors until the next annual meeting of shareholders, or until their
successors are elected and qualified. (Mr. Torell has since resigned.)
1. To elect ten members of its Board of Directors:
<TABLE>
<CAPTION>
SHARES FOR VOTED SHARES WITHHOLD AUTHORITY
---------------- -------------------------
<S> <C> <C>
Margo N. Alexander........................................ 20,908,254.427 627,959.000
Richard Q. Armstrong...................................... 20,916,662.427 619,551.000
E. Garrett Bewkes, Jr..................................... 20,915,466.617 620,746.810
Richard R. Burt........................................... 20,917,594.427 618,619.000
Mary C. Farrell........................................... 20,916,802.427 619,411.000
Meyer Feldberg............................................ 20,916,221.427 619,992.000
George W. Gowen........................................... 20,914,181.427 622,032.000
Frederic V. Malek......................................... 20,911,831.427 624,382.000
Carl W. Schafer........................................... 20,921,158.427 615,055.000
John R. Torell III........................................ 20,915,314.427 620,899.000
</TABLE>
2. Ratification of the selection of Price Waterhousee, LLP as independent
auditors for the current fiscal year.
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR AGAINST ABSTAIN
---------------- ----------------- --------------------------
<S> <C> <C> <C>
21,032,247.518 421,431.909 82,534.000
</TABLE>
(Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' and 'Shares Abstain' totals.)
15
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
General Information (Concluded)
Distribution Policy
The Fund has established a Dividend Reinvestment Plan under which all
shareholders whose shares are registered in their own names, or in the name of
PaineWebber or its nominee, will have all dividends and other distributions on
their shares automatically reinvested in additional shares, unless such
shareholders elect to receive cash. Shareholders who elect to hold their shares
in the name of another broker or nominee should contact such broker or nominee
to determine whether, or how, they may participate in the Dividend Reinvestment
Plan. Additional shares acquired under the Dividend Reinvestment Plan will be
purchased in the open market, on the NYSE or otherwise, at prices that may be
higher or lower than the net asset value per share at the time of the purchase.
The Fund will not issue any new shares in connection with its Dividend
Reinvestment 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 NYSE or elsewhere, for the participants' accounts.
16
<PAGE>
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<PAGE>
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<PAGE>
- ----------------------------------------
Directors
E. Garrett Bewkes, Jr.
Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
Principal Officers
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Paul H. Schubert
Vice President and Treasurer
Stuart Waugh
Vice President
Investment Adviser and
Administrator
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
This report is sent to the shareholders of the Fund for their information. It is
not a prospectus, circular or representation intended for the use in the
purchase or sale of shares of the Fund or of any securities mentioned in this
report.
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
shares of its common stock in the open market at market prices.
The financial information included herein is taken from the records of the Fund
without examination by independent accountants who do not express an opinion
thereon.
<PAGE>
April 30, 1997
SEMIANNUAL REPORT
- -----------------------------------
Global High
Income Dollar
Fund Inc.
PAINEWEBBER
(Copyright)1997 PaineWebber Incorporated
Member SIPC
