<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC. SEMIANNUAL REPORT
June 15, 1998
Dear Shareholder,
We are pleased to present you with the semiannual report for the Global High
Income Dollar Fund Inc. (the "Fund") for the six-month period ended April 30,
1998.
GENERAL MARKET OVERVIEW
- ------------------------------------------------------------------------------
[PICTURE]
Emerging markets lagged developed markets in the early part of the
six-month period as a result of the sharp sell-off in October 1997. By the end
of the period, however, emerging markets had begun to outperform developed
markets.
The Asian crisis has produced both disinflationary influences (lower
commodity prices and cheaper imports) and expansionary impacts (lower interest
rates). These influences have produced growth with low inflation--beneficial
conditions for bonds.
PORTFOLIO REVIEW
- ------------------------------------------------------------------------------
[PICTURE]
Performance--For the six-month period ended April 30, 1998, the Fund
(symbol: GHI) returned 10.68% based on changes in the Fund's net asset value
(assuming, for illustration only, that dividends could be, and were,
reinvested at the net asset value on the payable dates) and 13.44% based on
changes in its share price on the New York Stock Exchange (assuming dividends
were reinvested under the Dividend Reinvestment Plan).
At April 30, 1998 the Fund's net asset value per share was $16.11, while
its share price on the New York Stock Exchange was $13.88. During the
six-month period ended April 30, 1998, the Fund paid dividends from net
investment income totaling $0.65 per share, or approximately 11 cents per
share per month.
Portfolio Highlights--Early in the period we reinvested most of the cash
we had raised prior to the market's sell-off in October 1997. We invested most
of it in Brazil, Mexico and Russia, increasing the Fund's holdings in those
countries to 12.9%, 24.2% and 7.4% respectively, of net assets on April 30,
1998.
GLOBAL HIGH INCOME
DOLLAR FUND INC.
FUND PROFILE
[ARROW] GOAL:
High level of current income, secondarily capital appreciation
[ARROW] PORTFOLIO MANAGER:
Stuart Waugh, Mitchell Hutchins Asset Management Inc.
[ARROW] TOTAL NET ASSETS:
$366.3 million as of April 30, 1998
[ARROW] DIVIDEND PAYMENTS:
Monthly
GLOBAL HIGH
INCOME DOLLAR
FUND INC.
Top five countries as percent of net assets, April 30, 1998*
Mexico 24.2%
[Bar Graph]
Brazil 12.9%
[Bar Graph]
Poland 10.8%
{Bar Graph]
Russia 7.4%
[Bar Graph]
Morocco 4.8%
[Bar Graph]
* Allocations are subject to change.
1
<PAGE>
SEMIANNUAL REPORT
OUTLOOK
- ------------------------------------------------------------------------------
[Picture of Arrow]
Lower commodity prices for exports and robust consumer demand have led to
deteriorating trade balances for most of Latin America. In this environment,
we believe Latin American sovereign issues will continue to trade in the range
they have over the last year. Mexican debt continues to represent the Fund's
largest exposure. We believe Mexico's flexible exchange rate and responsible
fiscal and monetary policies make it the most stable of Latin sovereign
issuers.
Brazil prevented substantial deterioration in its balance of payments by
raising real interest rates above 20%, which led to a dramatic accumulation of
currency reserves. Brazil's fiscal accounts continue to deteriorate as high
interest rates suppress economic activity (and tax revenues) and increase the
government's financing costs. With adequate global liquidity, however,
Brazil's sovereign spreads should compensate for these risks.
While it is not difficult to identify many investment risk scenarios in
Russia, present debt levels offer extremely high yields to compensate for such
risks. Sovereign spreads on Russian loans the Fund owns recently traded about
seven percent over Treasurys.
Eastern European countries like Poland and Hungary continue to maintain
balanced macroeconomic policies. We believe these countries could receive
credit upgrades.
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.
For a quarterly Fund Profile on the Global High Income Dollar Fund Inc.
or a fund in the PaineWebber Family of Funds,(1) please contact your investment
executive.
Sincerely,
/s/ Margo Alexander /s/ Stuart Waugh
Margo Alexander Stuart Waugh
President, Managing Director, Mitchell Hutchins
Mitchell Hutchins Asset Management Inc. Portfolio Manager,
Asset Management Inc. Global High Income Dollar Fund Inc.
This letter is intended to assist shareholders in understanding how the
Fund performed during the six-month period ended April 30, 1998, and
reflects our views at the time we are writing this report. Of course,
these views may change in response to changing circumstances. We
encourage you to consult your investment executive regarding your
personal investment program.
(1) Mutual funds are sold by prospectus only. The prospectuses for the
funds contain more complete information regarding risks, charges and
expenses, and should be read carefully before investing.
GLOBAL HIGH INCOME
DOLLAR FUND INC.
Currency exposure as percent of net assets, April 30, 1998*
[Pie Graph]
U.S. Dollar 88.8%
Unhedged 10.1%
Cross-Currency Hedged 1.1%
* Currency positions subject to change.
2
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ---------- -------------------- ---------- ----------
LONG-TERM DEBT SECURITIES--87.03%
<S> <C> <C> <C>
ARGENTINA--3.46%
9,050 Republic of Argentina 02/12/07 11.750% $ 9,209,710
US$ 4,033 Republic of Argentina, DISC 03/31/23 6.875+ 3,468,380
----------
12,678,090
----------
BRAZIL--12.91%
US$ 3,000 Celulose Nipo-Brasileira, S.A. 12/21/03 9.375 2,943,750
US$30,513 Federal Republic of Brazil, C 04/15/14 8.000 25,269,172
US$13,300 Federal Republic of Brazil, DISC 04/15/24 6.875 11,155,375
US$ 6,000 Federal Republic of Brazil, EXIT 09/15/13 6.000 4,920,000
US$ 3,000 Metalurgica Gerbau, S.A. 11/23/01 10.250 2,996,250
----------
47,284,547
----------
BULGARIA--4.04%
US$ 3,500 Republic of Bulgaria, DISC 07/28/24 6.563+ 2,854,705
US$ 3,555 Republic of Bulgaria, IAB 07/28/11 6.562+ 2,792,915
US$13,700 Republic of Bulgaria, FLIRB(4) 07/28/12 2.250a++ 9,161,875
----------
14,809,495
----------
CHILE--1.42%
US$ 3,000 Banco del Estado Chile, S.A. 08/01/01 8.390 3,165,000
US$ 2,000 Empresa Nacional de Electricidad, S.A. 02/01/37 7.325 2,037,612
---------
5,202,612
---------
COSTA RICA--0.96%
US$ 3,500 Republic of Costa Rica 05/01/03 8.000 3,517,500
---------
GREECE--1.55%
1,786,000 Republic of Hellenic 03/21/00 to 03/21/02 9.200 to 9.800 5,689,019
---------
HUNGARY--1.06%
808,160 Government of Hungary 01/12/00 to 08/24/00 16.000 to 18.500 3,879,084
---------
KAZAKHSTAN--0.93%
US$ 3,500 Republic of Kazakhstan 10/02/02 8.375 3,403,750
---------
MEXICO--24.24%
US$ 3,464 Coca-Cola Femsa, S.A. de C.V. 11/01/06 8.950 3,637,200
US$ 3,000 Grupo Industrial Durango, S.A. de C.V. 07/15/01 12.000 3,251,250
US$ 5,700 Grupo Televisa, S.A. de C.V. 05/15/08 0/13.250@ 4,545,750
US$ 8,750 Mexican Multi Year Refinance Loan Participation
(Salomon Brothers)(1)(5) 03/20/05 6.443 to 6.750+ 8,192,188
US$ 9,500 Petroleos Mexicanos 03/30/05 to 12/01/23 8.375 to 8.625 9,137,500
US$ 3,000 Sanluis Corp., S.A. de C.V. 03/18/08 8.870 2,940,000
US$25,053 United Mexican States(4) 01/15/07 to 05/15/26 8.625 to 11.500 28,420,111
US$30,621 United Mexican States, DISC(2) 12/31/19 6.590 to 6.750+ 28,649,926
----------
88,773,925
----------
MOROCCO--4.79%
US$ 5,000 Kingdom of Morocco Loan Participation,
Tranche A (Chase Manhattan Bank)(1)(5) 01/01/09 6.656+ 4,446,900
US$14,745 Kingdom of Morocco Loan Participation,
Tranche A (Morgan Guaranty Trust)(1)(5) 01/01/09 6.656+ 13,113,908
----------
17,560,808
----------
</TABLE>
3
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000)* Dates Rates Value
- ---------- ----------------- ------------ -------------
LONG-TERM DEBT SECURITIES (concluded)
<S> <C> <C> <C>
PANAMA--2.53%
US$11,164 Republic of Panama, PDI 07/17/16 6.562%+ $ 9,280,540
-------------
PERU--1.48%
US$ 8,000 Republic of Peru, PDI 03/07/17 4.000++ 5,435,040
---------
PHILIPPINES--1.17%
US$ 4,800 Republic of Philippines, DCB 12/01/09 6.750+ 4,272,000
---------
POLAND--10.81%
US$ 1,700 Republic of Poland, PAR 10/27/24 3.000++ 1,088,000
US$30,600 Republic of Poland, PDI 10/27/14 4.000++ 27,922,500
43,640 Republic of Poland(5) 10/21/01 to 02/12/03 12.000 10,600,822
----------
39,611,322
----------
RUSSIA--7.41%
US$22,080 Russian Principal Loan (Chase Manhattan Bank)(1)(5) 12/15/20 6.719+ 13,993,200
US$18,257 Russian IAN 12/15/15 6.719+ 13,145,298
----------
27,138,498
----------
TRINIDAD & TOBAGO--2.64%
US$ 9,000 Republic of Trinidad and Tobago 11/03/00 to 10/03/04 9.750 to 11.750 9,686,250
---------
TUNISIA--1.87%
US$ 7,000 Banque Centrale de Tunisie 09/19/07 7.500 6,860,000
---------
VENEZUELA--3.76%
US$ 4,510 Republic of Venezuela 09/15/27 9.250 3,985,713
US$ 3,095 Republic of Venezuela, DCB(4) 12/18/07 6.812+ 2,777,976
US$ 8,175 Republic of Venezuela, PAR(3) 03/31/20 6.750 6,974,338
-----------
13,738,027
-----------
Total Long-Term Debt Securities (cost - $282,675,811) 318,820,507
SHORT-TERM DEBT SECURITIES--2.18%
HUNGARY--2.18%
1,676,600 Government of Hungary (cost - $9,225,963) 05/17/98 to 04/12/99 16.500 to 23.500 7,984,508
---------
REPURCHASE AGREEMENTS--10.10%
$ 12,000 Repurchase agreement dated 05/01/98 with
Dresdner Securities, Inc., collateralized
by $12,171,000 U.S. Treasury Note, 4.750%
due 8/31/98 (Value - $12,246,486);
proceeds: $12,001,817 05/01/98 5.450 12,000,000
12,000 Repurchase agreement dated 05/01/98 with
Salomon Smith Barney Inc., collateralized
by $12,000,000
U.S. Treasury Note, 8.875% due 02/15/19
(Value - $12,240,375);
proceeds: $12,001,817 05/01/98 5.450 12,000,000
6,577 Repurchase agreement dated 05/01/98 with
First Chicago National Bank Inc.,
collateralized by $6,100,000
U.S. Treasury Note, 8.000% due 05/15/01
(Value - $6,710,000);
proceeds: $6,578,005 05/01/98 5.500 6,577,000
</TABLE>
4
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATE RATE VALUE
------ -------- -------- -----
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (CONCLUDED)
US$ 6,404 Repurchase agreement dated 05/01/98 with
First Chicago National Bank Inc., collateralized
by $6,404,000 U.S. Treasury Note, 6.125%
due 12/31/01 (Value - $6,532,352);
proceeds: $6,404,978 05/01/98 5.500% $ 6,404,000
-------------
Total Repurchase Agreements (cost - $36,981,000) 36,981,000
-------------
Total Investments (cost - $328,882,774) - 99.31% 363,786,015
Other assets in excess of liabilities - 0.69% 2,528,711
-------------
Net Assets - 100.00% $ 366,314,726
=============
</TABLE>
- -------------------------
Note: The Portfolio of Investments is listed by the issuer's country of origin
* In local currency unless otherwise indicated
@ Current coupon rate is 0% on step coupon rate, Subsequent to 05/15/01
will change to 13.250%
+ Reflects rate at April 30, 1998 on variable rate instruments
++ Reflects rate at April 30, 1998 on step coupon rate instruments
(1) Participation interest was acquired through the financial institution
indicated parenthetically
(2) With an additional 47,108,000 recoverable rights attached maturing on
06/30/03 with no market value
(3) With an additional 40,875 warrants attached maturing on 04/15/20
with no market value
(4) Security, or portion thereof, was on loan at April 30, 1998
(5) Illiquid Securities represent 13.74% of Net Assets
C Capitalization Bond
DCB Debt Conversion Bond
DISC Discount Bond
EXIT Investment Bond
FLIRB Front-loaded Interest Reduction Bond
IAB Interest Arrears Bond
IAN Interest Accrual Note
PAR Par Bond
PDI Past Due Interest Bond
5
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO APPRECIATION
DELIVER IN EXCHANGE FOR MATURITY DATES (DEPRECIATION)
------------- ------------------ -------------------- -------------
<S> <C> <C> <C> <C>
German Deutschemarks 6,987,403 US$ 3,838,200 06/30/98 to 10/02/98 $ (78,701)
Korean Wons 5,455,000,000 US$ 3,619,774 05/11/98 (461,782)
U.S. Dollars 3,586,456 KRW 5,455,000,000 05/11/98 495,100
----------
$ (45,383)
==========
</TABLE>
- ----------------------------
CURRENCY TYPE ABBREVIATIONS:
KRW-Korean Wons
INVESTMENTS BY TYPE OF ISSUER
Percentage of Net Assets
------------------------
Long-term Short-term
--------- ----------
Government and other public issuers 75.70% 2.18%
Repurchase agreements -- 10.10
Financial 3.54 --
Industrial 2.23 --
Oil/Gas 2.49 --
Paper 1.69 --
Steel 0.82 --
Utilities--Electric & Water 0.56 --
----- -----
87.03% 12.28%
===== =====
See accompanying notes to financial statements
6
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost - $328,882,774) 363,786,015
Cash denominated in foreign currencies (cost - $4,004) 4,004
Receivable for investments and foreign currency sold 11,680,998
Interest receivable 8,249,522
Unrealized appreciation on forward foreign currency contracts 495,100
Deferred organizational expenses 11,142
Other assets 4,434
-----------
Total assets 384,231,215
-----------
LIABILITIES
Payable for investments and foreign currency purchased 16,779,013
Unrealized depreciation on forward currency contracts 540,483
Due to affiliates 385,884
Accrued expenses and other liabilities 211,109
----------
Total liabilities 17,916,489
----------
NET ASSETS
Capital stock - $0.001 par value; total authorized shares - 100,000,000;
22,736,667 shares issued and outstanding 331,328,209
Undistributed net investment income 304,857
Accumulated net realized losses from investment
transactions and foreign currency (244,478)
Net unrealized appreciation of investments, other assets, liabilities
and forward contracts denominated in foreign currencies 34,926,138
-------------
Net assets $ 366,314,726
=============
Net asset value per share $ 16.11
=======
</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, 1998
(UNAUDITED)
--------------
INVESTMENT INCOME:
<S> <C>
Interest (net of foreign withholding taxes) $ 17,600,775
------------
EXPENSES:
Investment advisory and administration 2,216,492
Custody and accounting 164,000
Reports and notices to shareholders 68,765
Legal and audit 42,285
Transfer agency fees 25,908
Amortization of organizational expenses 13,791
Directors' fees 5,250
Other expenses 25,333
---------
2,561,824
---------
Net investment income 15,038,951
----------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions 5,505,630
Foreign currency transactions (1,093,297)
Net change in unrealized appreciation/depreciation of:
Investments 16,711,069
Other assets, liabilities and forward contracts
denominated in foreign currencies 273,957
----------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENT ACTIVITIES 21,397,359
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 36,436,310
============
</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, 1998 ENDED
(UNAUDITED) OCTOBER 31, 1997
---------- ----------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 15,038,951 $ 29,733,816
Net realized gains from investment transactions 5,505,630 23,969,822
Net realized losses from foreign currency transactions (1,093,297) (5,045,492)
Net change in unrealized appreciation/depreciation of:
Investments 16,711,070 (15,723,541)
Other assets, liabilities and forward contracts
denominated in foreign currencies 273,956 (311,768)
------------- -------------
Net increase in net assets resulting from operations 36,436,310 32,622,837
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO STOCKHOLDERS:
From net investment income (14,733,360) (24,688,136)
In excess of net investment income -- 4,232,904
------------- -------------
Total dividends and distributions to stockholders (14,733,360) (28,921,040)
------------- -------------
Net increase in net assets 21,702,950 3,701,797
NET ASSETS:
Beginning of period 344,611,776 $ 340,909,979
------------- -------------
End of period (including undistributed net investment
income of $304,857 at April 30, 1998) $ 366,314,726 $ 344,611,776
============= =============
</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 asset
management 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 and/or illiquid 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. 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.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 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.
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.
Option Transactions--For hedging purposes and to enhance income, the Fund
may purchase and write (sell) put and call options on debt securities, indices
of debt securities and foreign currencies. The risk associated with purchasing
an option is that the Fund pays a premium whether or not the option is
exercised. Additionally, the Fund bears the risk of loss of premium and change
in market value should the counterparty not perform under the contract. Put
and call options purchased are accounted for in the same manner as portfolio
securities. The cost of securities acquired through the exercise of call
options is increased by the premiums paid. The proceeds from securities sold
through the exercise of put options are decreased by the premiums paid.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Dividends and Distributions--Dividends and distributions to stockholders
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 invests. 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 a specific industry, country
or region.
INVESTMENT ADVISOR 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. At April 30, 1998, the Fund owed Mitchell Hutchins $376,750
in investment advisory and administration fees.
SECURITY LENDING
The Fund may lend securities 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 will 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. For the six months ended April 30, 1998, PaineWebber earned $55,081 as
the Fund's lending agent. At April 30, 1998, the Fund owed PaineWebber $9,134
for security lending fees.
As of April 30, 1998, the Fund held the following securities having an
aggregate value of $32,095,926 (as listed below) as collateral for portfolio
securities loaned having a market value of $29,553,962.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST MARKET
(000) DATES RATES VALUE
----- ------------------ -------------- ------------
<S> <C> <C> <C>
$ 25,140 U.S. Treasury Bonds 5/15/17 to 8/15/19 8.125 to 8.750% $ 32,095,926
</TABLE>
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at April
30, 1998, was substantially the same as the cost of securities for financial
statement purposes.
At April 30, 1998, the components of net unrealized appreciation of
investments were as follows:
Gross appreciation
(investments having an excess of value over cost) $ 37,297,872
Gross depreciation
(investments having an excess of cost over value) (2,394,631)
------------
Net unrealized appreciation of investments $ 34,903,241
============
For the period ended April 30, 1998, total aggregate purchases and sales
of portfolio securities, excluding short-term securities, were $131,245,613
and $114,091,463 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, 1998 Mitchell
Hutchins owned 8,504 shares.
FEDERAL INCOME TAX STATUS
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.
At October 31, 1997, the Fund had capital loss carryforwards of
$4,656,811 available as a reduction, to the extent provided in the
regulations, of any future net realized capital gains which 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.
13
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each period
is presented below:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX OCTOBER 8, 1993+
MONTHS ENDED FOR THE YEARS ENDED OCTOBER 31, THROUGH
APRIL 30, 1998 ------------------------------ OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.16 $ 14.99 $ 13.07 $ 12.83 $ 15.21 $ 15.00
--------- --------- --------- --------- --------- ---------
Net investment income 0.66 1.31 1.30 1.34 1.43 0.04
Net realized and unrealized gains (losses)
from investments and foreign currency 0.94 0.13 1.89 0.21 (2.40) 0.17
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from
investment operations 1.60 1.44 3.19 1.55 (0.97) 0.21
Dividends from net investment income (0.65) (1.08) (1.27) (1.16) (1.34) --
Distributions in excess of net
investment income -- (0.19) -- -- -- --
Distributions from paid-in-capital -- -- -- (0.15) (0.07) --
--------- --------- --------- --------- --------- ---------
Total dividends and distributions to shareholders (0.65) (1.27) (1.27) (1.31) (1.41) --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 16.11 $ 15.16 $ 14.99 $ 13.07 $ 12.83 $ 15.21
========= ========= ========= ========= ========= =========
Per share market value, end of period $ 13.88 $ 12.81 $ 12.63 $ 11.63 $ 11.50 $ 15.00
========= ========= ========= ========= ========= =========
Total investment return (1) 13.44% 11.47% 20.26% 13.65% (14.80)% 0.00%
========= ========= ========= ========= ========= =========
Ratios/supplemental data:
Net assets, end of period (000's) $ 366,315 $ 344,612 $ 340,910 $ 297,087 $ 291,752 $ 345,755
Expenses to average net assets 1.44%* 1.42% 1.43% 1.46% 1.50% 1.41%*
Net investment income to average net assets 8.48%* 8.24% 9.18% 10.76% 10.40% 4.60%*
Portfolio turnover rate 38% 56% 80% 71% 51% 1%
</TABLE>
- --------------------
+ Commencement of operations
* Annualized
(1) Total investment return 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 of less than one year have not been
annualized. Total investment return does not reflect brokerage
commissions.
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 asset management subsidiary of PaineWebber
Incorporated, which has over $52.0 billion in assets under management as of
April 30, 1998.
SHAREHOLDER INFORMATION
The Fund's NYSE trading symbol is "GHI." Comparative net asset value and
market price information of the Fund is published weekly in The Wall Street
Journal and New York Times and Barron's, as well as numerous other
publications.
An annual meeting of stockholders of the Fund was held on February 19,
1998. 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 and Carl W. Schafer were elected to serve as
directors until the next annual meeting of stockholders, or until their
successors are elected and qualified.
1. TO ELECT NINE MEMBERS
OF ITS BOARD OF DIRECTORS: SHARES FOR VOTED SHARES WITHHOLD AUTHORITY
---------------- -------------------------
Margo N. Alexander 21,473,282.239 819,561.308
Richard Q. Armstrong 21,491,294.929 801,548.618
E. Garrett Bewkes, Jr. 21,454,206.155 838,637.392
Richard R. Burt 21,494,636.155 798,207.392
Mary C. Farrell 21,484,339.155 808,504.392
Meyer Feldberg 21,489,608.155 803,235.392
George W. Gowen 21,478,292.155 814,551.392
Frederic V. Malek 21,485,314.155 807,529.392
Carl W. Schafer 21,494,183.155 798,660.392
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR AGAINST ABSTAIN
--------- ------- -------
<S> <C> <C> <C>
2. RATIFICATION OF THE SELECTION OF
PRICE WATERHOUSE LLP AS INDEPENDENT
AUDITORS FOR THE CURRENT FISCAL YEAR. 21,566,806.039 510,732.990 215,304.518
</TABLE>
(Broker non-votes and abstentions are included within the "Shares Withhold
Authority" totals.)
15
<PAGE>
GLOBAL HIGH INCOME DOLLAR FUND INC.
GENERAL INFORMATION
DISTRIBUTION POLICY
The Fund has established a Dividend Reinvestment Plan (the "Plan") under
which all stockholders 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 stockholders elect to receive cash. Stockholders 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. The ability of such stockholders to participate in
the Plan may change if their shares are transferred into the name of another
broker or nominee.
A stockholder may elect not to participate in the Plan or may terminate
participation in the Plan at any time without penalty, and stockholders who
have previously terminated participation in the Plan may rejoin it at any
time. Changes in elections must be made in writing to the Fund's transfer
agent and should include the stockholder's name and address as they appear on
that share certificate or in the transfer agent's records. An election to
terminate participation in the Plan, until such election is changed, will be
deemed an election by a stockholder to take all subsequent distributions in
cash. An election will be effective only for distributions declared and having
a record date at least ten days after the date on which the election is
received.
Additional shares of common stock 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 number of shares of common stock
purchased with each dividend will be equal to the result obtained by dividing
the amount of the dividend payable to a particular stockholder by the average
price per share (including applicable brokerage commissions) that the transfer
agent was able to obtain in the open market. The Fund will not issue any new
shares in connection with its Dividend Reinvestment Plan. There currently is
no charge to participants for reinvesting dividends or other distributions.
The transfer agent's fees for handling the reinvestment of distributions are
paid by the Fund. However, each participant pays a pro rata share of brokerage
commissions incurred with respect to the transfer agent's open market
purchases of common stock in connection with the reinvestment of
distributions. The automatic reinvestment of dividends and other distributions
in shares of common stock does not relieve participants of any income tax that
may be payable on such distributions.
Additional information regarding the Plan may be obtained from, and all
correspondence concerning the Plan should be directed to, the transfer agent
at PNC Bank, National Association, c/o PFPC Inc., P.O. Box 8950, Wilmington,
Delaware 19899.
16
<PAGE>
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<PAGE>
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<PAGE>
- ------------------------------------------------------------------------------
DIRECTORS
E. Garrett Bewkes, Jr. Mary C. Farrell
Chairman Meyer Feldberg
Margo N. Alexander George W. Gowen
Richard Q. Armstrong Frederic V. Malek
Richard R. Burt Carl W. Schafer
PRINCIPAL OFFICERS
Margo N. Alexander Paul H. Schubert
President Vice President and Treasurer
Victoria E. Schonfeld Stuart Waugh
Vice President Vice President
Dianne E. O'Donnell
Vice President and Secretary
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>
SEMIANNUAL REPORT
- ------------------------------------------------------------------------------
GLOBAL HIGH
INCOME DOLLAR
FUND INC.
APRIL 30, 1998
PAINEWEBER
(COPYRIGHT)1998p PaineWeber Incorported
Member SIPC
