LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Global Bond Fund, Inc. completed its first fiscal year on
November 30, 1994, a period of 8 1/2 months since the inception of the Fund
on March 18, 1994.
The investment strategy of the Fund has remained fairly constant since
its inception. We have continued to retain an underweight position in U.S.
bonds compared to standard industry benchmarks, because American interest
rates seemed set to rise. By the same token, we have overweighted the bond
markets of several European nations, which remain far behind the U.S. in the
economic cycle. The mainstream European markets still enjoy excellent
fundamentals in terms of growth and inflation, and, in our opinion, offer
excellent prospects for a sharp improvement in price once more confidence
returns. Our assessment of bond market prospects had led us to hold
shorter-dated bonds in the U.S. market - predominantly floating rate notes,
which aim to preserve capital and offer increasing yields in a rising
interest rate environment. In Europe, where we are most positive about market
developments, we have concentrated our investment in longer-dated securities.
The overall average duration of the Fund, at 5.5 years, is very much in line
with that of the Salomon Brothers World Government Bond Index.* The credit
quality of the underlying securities in the Fund remains high, with an
average rating of AA2. This average rating is a combined Moody's and S&P
rating, that is calculated by Dreyfus.
The Fund's first year coincided with a period that will not be remembered
with pleasure by global fixed-income investors. For the fiscal year, Dreyfus
Global Bond Fund, Inc. provided a total return of just .91%,** even though
the Fund's annualized distribution rate per share for the period was
7.60%.*** The difference, of course, was accounted for by price declines in
the Fund's net asset value resulting from declines in the portfolio's
fixed-income securities and by currency fluctuations.
IMPROVED CLIMATE FOR BONDS
The year-to-date performance of all fixed-income markets has been
negative in local currency terms. That said, the key fixed-income markets
appear to have stabilized since the summer. Though there has yet to be a
resurgence of confidence in any sector, most economic statistics have
confirmed the healthy worldwide trends of steady growth, low inflation and,
in many cases, stable to falling deficits. We believe this is a very benign
climate for bonds, especially with the very high level of real interest rates
available in virtually every sector.
Initially, in starting the Fund's operations last March, the portfolio
was heavily biased toward European bonds, with somewhat smaller positions in
Japan and the U.S. From a currency standpoint, the Fund was skewed toward the
U.S. dollar at the expense of the Yen, the Guilder and the Deutsche Mark.
As the fiscal year ended, American securities represented the largest
share of assets, though less than in the benchmark weightings. Japan, the
United Kingdom, Germany and the Netherlands ranked next in importance, in
that order. In Japan, the U.K. and the Netherlands we were overweighted, but
underweighted in Germany. In currency terms, the U.S. dollar is still by far
the Fund's largest commitment, with Japan, the U.K. and Germany next in line.
INFLUENCE OF U.S. MARKET
The past few months were dominated by speculation concerning the policies
of the U.S. Federal Reserve Board, the outcome of the U.S. midterm elections
and the direction of the dollar. Because the U.S. is believed to be the
vanguard in the world economic cycle, it has been generally assumed that the
U.S. market blueprint will prove good for other nations which have only just
begun to emerge from recession. One consequence of this development has been
an increasingly high correlation between all bond markets, whether they enjoy
the same fundamentals as the U.S. or not. It appears to have taken the return
of a Republican majority in both the House of Representatives and the Senate
to convince investors to return to the Treasury market. The 3/4% increase in
both the Fed Funds and discount rates several days later raised hopes that
the Fed is demonstrating its modicum of independence by acting decisively to
curb inflation and stronger than anticipated growth. This has assisted the
U.S. Treasury market, and a few buyers have begun to emerge both in the U.S.
and Europe.
IMPROVEMENT IN EUROPE AND JAPAN
Many of the thunderclouds which had overhung the international capital
markets have begun to dissipate. Although it has long been evident that
inflation was all but dead in the major European economies and had turned
negative in Japan, it has been encouraging to see that the economic
statistics have continued to confirm the trend. Growth has begun to pick up,
but at a manageable rate, which in turn has led to reduced deficits. In
Germany, the explosion in money supply engendered by unification has begun to
subside, and political worries occasioned by the autumn elections have more
or less disappeared with the return of Chancellor Kohl.
The U.K. market for gilt-edged bonds has been one of the best performers,
due among other things to a reduction in the Public Sector Borrowing
Requirement and a recent official report recommending that domestic pension
funds shift their asset allocation in favor of bonds rather than the more
traditional equities. Even though the Bank of England has made a preemptive
strike by raising base rates, the longer end of the yield curve has continued
to perform well, with the 20-25 year area now somewhat inverted. In Japan,
where government bond yields have risen to over 4.7% (and inflation is
negative!), there is a similarly favorable story. Japanese individuals, who
are the most cash-rich savers in the world, have begun to invest again in
their own domestic bond market. It is unlikely that we will see a dramatic
rebound in Japan's fixed income sector until the Japanese become more active,
and this first sign of returning confidence is very encouraging.
THE LAGGING U.S. DOLLAR
Up to this point we have concentrated on bonds. Of course, the major
component of global bond performance has been currency. The dollar has proved
to be a disappointment throughout 1994, but at no time more than now. With
U.S. interest rates sharply higher, political worries out of the way and
stronger than expected economic growth, one would have expected the currency
to have rebounded. Instead, it has made only half-hearted progress, now being
only slightly off its historic lows. We have maintained for some time that
the dollar was dangerously low, and that it would be a risky proposition to
hold aggressive foreign currency positions against a dollar base. As it
happens, this has not helped performance: in the period between March and
November 30th, global bonds posted a -0.67% total return in local terms, but
a positive return of 2.06% when expressed in the unusually inexpensive U.S.
dollars. Across a basket of foreign currencies during this period, the dollar
fell by nearly 3%. Your Fund has by no means been heavily overweighted in the
U.S. currency, but at 56.2% versus an index of 35.89% it is overweight
nonetheless.
IMPROVED FUTURE PROSPECTS
We believe the prospects for global bond markets and the dollar now look
better than they have for most of 1994, and we expect that the next few
months will bring improved results.
We appreciate your investment in the Fund and will continue exerting our
best efforts to bring you competitive returns.
Sincerely,
(logo signature)
Theodora Zemek
Portfolio Manager, Global Fixed Income
Dreyfus Global Bond Fund, Inc.
M&G Investment Management, Ltd.
December 15, 1994
London, U.K.
* The Salomon Brothers World Government Bond Index is a
market-capitalization weighted benchmark covering debt issues of 14
government bond markets.
**Total return represents the change during the period in a hypothetical
account with dividends reinvested.
***Distribution rate per share is based upon dividends per share paid from
net investment income during the period divided by the net asset value
per share at the end of the period, adjusted for capital gain
distributions.
PERFORMANCE
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS GLOBAL BOND
FUND, INC.
AND THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX
* Source: Lipper Analytical Services, Inc.
Exhibit A
ACTUAL AGGREGATE TOTAL RETURN
From Inception (3/18/94) to November 30, 1994............. .. .91%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment in Dreyfus Global Bond Fund on
3/18/94 (Inception Date) to a $10,000 investment made in the Salomon Brothers
World Government Bond Index on that date. For comparative purposes, the value
on 3/31/94 is used as the beginning value on 3/18/94. All dividends and
capital gain distributions are reinvested.
The Fund's performance takes into account all applicable fees and expenses.
The Salomon Brothers World Government Bond Index is a fixed-income index and
is a market-capitalization weighted benchmark that tracks the performance and
covers debt issues of 14 Government bond markets. The Index measures the
total rate-of-return performance for Government bond markets with a remaining
maturity of at least one year and does not take into account charges, fees
and other expenses. Further information relating to Fund performance is
contained in the Condensed Financial Information section of the Prospectus
and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1994
PRINCIPAL
BONDS AND NOTES_92.1% AMOUNT VALUE
--------- -----------
<S> <C> <C>
BANKING_9.7% Bayerische Landesbank Girozentrale,
Bonds, 6%, 2004...................... $ 553,787 (a) $ 495,086
Societe Generale,
Floating Rate Notes, 5 3/4%, 2008.... 500,000 (b) 500,075
Sudwestdeutsche Landesbank Capital Markets,
Bonds (Gtd. by Sudwestdeutsche Landesbank
Girozentrale), 6 1/4%, 2003.......... 541,057 (a) 490,739
--------
1,485,900
---------
CHEMICALS_8.7% Eastman Kodak,
Notes, 7 7/8%, 1997.................. 450,000 446,963
Hoechst,
Bearer Bonds, 6%, 2000............... 500,000 447,200
Imperial Chemical Industries,
Bonds, 9 3/4%, 2005.................. 430,513 (c) 440,199
--------
1,334,362
--------
FINANCIAL SERVICES_7.0% Credit Local De France,
Bonds, 6%, 2001...................... 757,959 (d) 813,480
Ford Motor Credit,
Floating Rate Notes, 6 3/16%, 1998... 250,000 (b) 249,975
--------
1,063,455
--------
MACHINERY AND
ENGINEERING_3.0% Fuji Heavy Industries,
Bonds (Gtd. by The Industrial Bank of Japan),
8 3/4%, 1999......................... 450,000 449,438
--------
MISCELLANEOUS_11.7% B.A.T. Capital,
Gtd. Bonds (Gtd. by B.A.T. Industries p.l.c.),
6 1/2%, 2003......................... 500,000 427,825
Petroleos Mexicanos,
Gtd. Notes, 9%, 2003................. 508,788 (c) 459,207
Treasury Corp. of Victoria,
Bonds (Gtd. by The Government of Victoria),
7 1/4%, 2003......................... 545,706 (e) 435,200
Ville de Montreal,
Notes, 6 3/8%, 2001.................. 545,137 (f) 462,004
--------
1,784,236
--------
TELECOMMUNICATIONS_2.8%. Cable and Wireless,
Bonds, 6 1/2%, 2003.................. 500,000 429,700
--------
UTILITIES-ELECTRIC_5.1% Chubu Electric Power,
Bonds, 6 1/8%, 2001.................. 505,306 (d) 543,835
Tokyo Electric Power,
Notes, 10 1/2%, 2001................. 218,055 (f) 228,063
--------
771,898
--------
DREYFUS GLOBAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
-------- -----------
FOREIGN/
GOVERNMENTAL_44.1% Asfinag,
Bonds (Gtd. by the Republic of Austria),
6%, 2000............................. $ 808,489 (d) $ 865,083
France O.A.T.:
Coupon Strips:
Zero Coupon, 2018................ 1,857,010 (g) 251,253
Zero Coupon, 2022................ 1,822,500 (h) 177,511
Deb., 6 3/4%, 2004................... 371,402 (g) 339,536
Ireland Treasury Securities,
6 1/4%, 2004......................... 437,190 (i) 371,830
Italy Treasury Bonds,
8 1/2%, 1999......................... 784,920 (j) 711,137
Kingdom of Denmark Bullet,
7%, 2004............................. 544,715 (k) 486,567
Kingdom of Spain Government Bonds,
4 5/8%, 2004......................... 505,306 (d) 500,910
Netherlands Government Bonds,
5 3/4%, 2004......................... 1,081,020 (l) 963,188
Republic of Italy,
Notes, 5 1/8%, 2003.................. 454,775 (d) 463,302
Spain Government Bonds,
8%, 2004............................. 572,082 (m) 469,536
United Kingdom Treasury Securities,
8%, 2003............................. 665,338 (c) 642,882
United Mexican States (Aztec),
Collateralized Floating Rate Bonds,
7 5/16%, 2008........................ 500,000 (b) 499,375
--------
6,742,110
--------
TOTAL BONDS AND NOTES
(cost $14,419,771)................... $14,061,099
===========
SHORT-TERM INVESTMENTS_2.9%
U.S. TREASURY BILLS:........ 4.51%, 12/8/1994 $ 162,000 $ 161,859
4.65%, 12/15/1994...................... 39,000 38,927
5.06%, 12/22/1994...................... 249,000 248,208
--------
TOTAL SHORT-TERM INVESTMENTS
(cost $449,053)...................... $ 448,994
===========
TOTAL INVESTMENTS (cost $14,868,824)........................................ 95.0% $14,510,093
===== ===========
CASH AND RECEIVABLES (NET).................................................. 5.0% $ 765,400
===== ===========
NET ASSETS.................................................................. 100.0% $15,275,493
===== ===========
</TABLE>
DREYFUS GLOBAL BOND FUND, INC.
NOTES TO STATEMENT OF INVESTMENTS:
(a) Denominated in German Deutsche Marks.
(b) Variable rate security-interest rate subject to periodic change.
(c) Denominated in British Pounds.
(d) Denominated in Japanese Yen.
(e) Denominated in Australian Dollars.
(f) Denominated in Canadian Dollars.
(g) Denominated in French Francs.
(h) Denominated in European Currency Units.
(i) Denominated in Irish Pounds.
(j) Denominated in Italian Lire.
(k) Denominated in Danish Krone.
(l) Denominated in Dutch Guilders.
(m) Denominated in Spanish Pesetas.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $14,868,824)_see statement..................................... $14,510,093
Cash.................................................................... 147,483
Interest receivable..................................................... 408,388
Net unrealized appreciation on forward currency exchange
contracts_Note 3(a)................................................... 129,068
Prepaid expenses_Note 1(e).............................................. 70,091
Due from The Dreyfus Corporation........................................ 135,687
-----------
15,400,810
LIABILITIES:
Due to Distributor...................................................... $ 6,054
Payable for shares of Common Stock redeemed............................. 56,853
Accrued expenses and other liabilities.................................. 62,410 125,317
----------- -----------
NET ASSETS.................................................................. $15,275,493
=============
REPRESENTED BY:
Paid-in capital......................................................... $15,709,085
Accumulated undistributed investment income_net......................... 104,796
Accumulated net realized (loss) on investments and foreign currency transactions (308,725)
Accumulated net unrealized (depreciation) on investments
and foreign currency transactions_Note 3(b)........................... (229,663)
-----------
NET ASSETS at value applicable to 1,268,902 shares outstanding
(300 million shares of $.001 par value Common Stock authorized)......... $15,275,493
=============
NET ASSET VALUE, offering and redemption price per share
($15,275,493 / 1,268,902 shares)........................................ $12.04
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
STATEMENT OF OPERATIONS
FROM MARCH 18, 1994 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME (net of $4,066 foreign taxes withheld at source)........ $ 683,264
EXPENSES:
Management fee_Note 2(a)............................................. $ 61,095
Shareholder servicing costs_Note 2(b,c)............................... 60,907
Organization expenses_Note 1(f)....................................... 23,652
Legal fees............................................................ 22,134
Auditing fees......................................................... 18,036
Directors' fees and expenses_Note 2(d)................................ 11,790
Prospectus and shareholders' reports_Note 2(b)........................ 6,329
Registration fees..................................................... 6,153
Custodian fees........................................................ 6,114
Miscellaneous......................................................... 1,213
----------
217,423
Less_expense reimbursement from Manager due to
undertakings_Note 2(a)............................................ 217,423
----------
TOTAL EXPENSES.................................................. --
----------
INVESTMENT INCOME_NET.......................................... 683,264
----------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments_Note 3(a)............................. $ 1,839
Net realized (loss) on forward currency exchange contracts_Note 3(a).... (310,564)
----------
Net Realized (Loss)................................................... (308,725)
Net unrealized (depreciation) on investments and forward currency
exchange contracts.................................................... (229,663)
----------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (538,388)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 144,876
=========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM MARCH 18, 1994 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1994
<S> <C>
OPERATIONS:
Investment income_net................................................................... $ 683,264
Net realized (loss) on investments....................................................... (308,725)
Net unrealized (depreciation) on investments for the period.............................. (229,663)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... 144,876
----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income_net................................................................... (578,468)
----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................................ 16,832,717
Dividends reinvested..................................................................... 514,095
Cost of shares redeemed.................................................................. (1,737,727)
----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................................. 15,609,085
----------
TOTAL INCREASE IN NET ASSETS....................................................... 15,175,493
NET ASSETS:
Beginning of period_Note 1.............................................................. 100,000
----------
End of period (including undistributed investment income_net of $104,796)................ $15,275,493
=========
SHARES
----------
CAPITAL SHARE TRANSACTIONS:
Shares sold.............................................................................. 1,361,664
Shares issued for dividends reinvested................................................... 42,403
Shares redeemed.......................................................................... (143,165)
----------
NET INCREASE IN SHARES OUTSTANDING..................................................... 1,260,902
=========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the period March 18, 1994
(commencement of operations) to November 30, 1994. This information has been
derived from the Fund's financial statements.
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period............................................................ $12.50
------
INVESTMENT OPERATIONS:
Investment income_net.......................................................................... .65
Net realized and unrealized (loss) on investments and foreign currency contracts................ (.54)
------
TOTAL FROM INVESTMENT OPERATIONS.............................................................. .11
------
DISTRIBUTIONS;
Dividends from investment income_net........................................................... (.57)
------
Net asset value, end of period.................................................................. $12.04
=======
TOTAL INVESTMENT RETURN 1.29%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................................................... --
Ratio of net investment income to average net assets............................................ 7.83%(1)
Decrease reflected in above expense ratio due to undertaking by Dreyfus......................... 2.49%(1)
Portfolio Turnover Rate......................................................................... 4.16%(2)
Net Assets, end of period (000's Omitted)....................................................... $15,277
(1) Annualized.
(2) Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS GLOBAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Global Bond Fund, Inc. (the "Fund") was incorporated on September
8, 1993 and had no operations until March 18, 1994 (commencement of
operations) other than matters relating to its organization and registration
as a non-diversified open-end management investment company under the
Investment Company Act of 1940 ("Act") and the Securities Act of 1933 and the
sale and issuance of 8,000 shares of Common Stock ("Initial Shares") to The
Dreyfus Corporation ("Dreyfus"), the Fund's investment adviser. M&G
Investment Management Limited ("M&G") serves as the Fund's sub-investment
adviser. Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's shares, which
are sold to the public without a sales load. Effective August 24, 1994, the
Manager became a direct subsidiary of Mellon Bank, N.A.
As of November 30, 1994, Major Trading Corporation, a subsidiary of
Mellon Bank Investments Corporation, held 427,458 of the Fund's outstanding
shares. Mellon Bank Investments Corporation is a subsidiary of Mellon Bank.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities are valued each
business day at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of
exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts of interest and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities,
resulting from changes in exchange rates.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, including, where applicable, amortization of discount on investments,
is recognized on the accrual basis.
DREYFUS GLOBAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
On November 30, 1994, the Board of Directors declared a cash dividend of
$.080 per share from undistributed investment income-net, payable on December
1, 1994 (ex-dividend date), to shareholders of record as of the close of
business on November 30, 1994.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $241,000
available for Federal income tax purposes to be applied against future net
securities profits, if any realized subsequent to November 30, 1994. If not
applied, the carryover expires in fiscal 2002.
(F) OTHER: Organization expenses paid by the Fund are included in prepaid
expenses and are being amortized to operations from March 18, 1994, the date
operations commenced, over the period during which it is expected that a
benefit will be realized, not to exceed five years. At November 30, 1994, the
unamortized balance of such expenses amounted to $67,196. In the event that
any of the Initial Shares are redeemed during the amortization period, the
redemption proceeds will be reduced by any unamortized organization expenses
in the same proportion as the number of such shares being redeemed bears to
the number of such shares outstanding at the time of such redemption.
NOTE 2_INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, the management fee
is computed at the annual rate of .70 of 1% of the average daily value of
the Fund's net assets and is payable monthly. Dreyfus and M&G have agreed
that if in any full fiscal year the Fund's aggregate expenses, exclusive of
interest, taxes, brokerage and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund, Dreyfus and M&G
will bear the excess expense in proportion to their management fee and
sub-advisory fee to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such expenses
(exclusive of distribution expenses and certain expenses as described above)
exceed 2 1/2% of the first $30 million, 2% of the next $70 million and 1 1/2%
of the excess over $100 million of the average value of the Fund's net assets
in accordance with California "blue sky" regulations.
However, Dreyfus has undertaken from March 18, 1994 through December 31,
1994, or until such time as the net assets of the Fund exceed $50 million,
regardless of whether they remain at that level, to assume all expenses of
the Fund. The expense reimbursement, pursuant to the undertaking, amounted to
$217,423 for the period ended November 30, 1994.
DREYFUS GLOBAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and M&G,
the sub-advisory fee is computed at the annual rate of .28 of 1% of the
average daily value of the Fund's net assets and is payable monthly by
Dreyfus.
(B) On August 2, 1994, the shareholders approved a revised Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and (b)
pays the Manager, Dreyfus Service Corporation and any affiliate of either of
them for advertising and marketing relating to the Fund, at an aggregate
annual rate of .25 of 1% of the value of the Fund's average daily net assets.
The distributor may pay one or more Service Agents in respect of distribution
services. The Distributor determines the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such payments are made.
The fees payable under the Plan are payable without regard to actual expenses
incurred. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the Fund's average daily net assets for any full fiscal year.
Prior to August 24, 1994, the Fund's Distribution Plan ("prior
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation at
an annual rate of .25 of 1% of the value of the Fund's average daily net
assets, for costs and expenses in connection with advertising, marketing and
distributing the Fund's shares and for servicing shareholder accounts.
Dreyfus Service Corporation made payments to one or more Service Agents based
on the value of the Fund's shares owned by clients of the Service Agents. The
prior Distribution Plan also separately provided for the Fund to bear the
costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated
with implementing and operating the prior Distribution Plan, not to exceed
the greater of $100,000 or .005 of 1% of the Fund's average daily net assets
for any full fiscal year.
During the period ended November 30, 1994, $10,695 was charged to the
Fund pursuant to the Plan and $13,225 was charged to the Fund pursuant to the
prior Distribution Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the Fund pays the
Distributor an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for servicing shareholder accounts. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. From March 18, 1994 (commencement of operations) through August 23,
1994, $12,364 was charged to the Fund, by Dreyfus Service Corporation. From
August 24, 1994 through November 30, 1994, $9,456 was charged to the Fund by
the Distributor pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of Dreyfus and/or Dreyfus
Service Corporation. Each director who is not an "affiliated person" receives
an annual fee of $1,000 and an attendance fee of $250 per meeting.
DREYFUS GLOBAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3_SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period ended November 30, 1994 amounted to $14,746,109 and
$443,597, respectively.
In addition, the following summarizes open forward currency exchange
contracts at November 30, 1994:
<TABLE>
<CAPTION>
U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACT PROCEEDS VALUE APPRECIATION
----------- ----------- -------------
<S> <C> <C> <C>
Danish Krone, expiring 4/28/95........................... $ 255,493 $ 244,300 $ 11,193
Dutch Guilders, expiring 4/28/95......................... 867,017 829,045 37,972
German Deutsche Marks, expiring 4/28/95.................. 564,062 538,611 25,451
Japanese Yen, expiring 4/28/95........................... 2,341,294 2,297,621 43,673
Spanish Pesetas, expiring 4/28/95........................ 238,190 227,411 10,779
---------
$129,068
========
</TABLE>
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified rate on a certain date in
the future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchase of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gains on such
contracts that are recognized in the statement of assets and liabilities.
(B) At November 30, 1994, accumulated net unrealized depreciation on
investments was $229,663, consisting of $254,595 gross unrealized
appreciation and $484,258 gross unrealized depreciation.
At November 30, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS GLOBAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS GLOBAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Global Bond Fund, Inc., including the statement of investments, as of
November 30, 1994, and the related statements of operations and changes in
net assets and financial highlights for the period from March 18, 1994
(commencement of operations) to November 30, 1994. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1994 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Global Bond Fund, Inc. at November 30, 1994, and the
results of its operations, the changes in its net assets and the financial
highlights for the period from March 18, 1994 to November 30, 1994, in
conformity with generally accepted accounting principles.
(logo signature)
New York, New York
January 9, 1995
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding the income dividends paid by the Fund for its fiscal
year ended November 30, 1994:
_ the portion representing taxes paid to foreign countries
amounts to .5942%. This amount was included in the ordinary dividends
reportable on the 1994 Form 1099-DIV which will be mailed by January
31, 1995, and
_ the portion representing income sourced from all foreign
countries is 83.52%.
$10,206
Salomon Brothers
World Government
Bond Index*
$10,091
Dreyfus Global
Bond Fund
In Dollars
DREYFUS GLOBAL BOND FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISOR
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISOR
M&G Investment Management Limited
Three Quays, Tower Hill
London, EC3R 6BQ, England
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 098AR9411
Global Bond
Fund, Inc.
Annual Report
November 30, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GLOBAL BOND FUND, INC. AND THE SALOMON
BROTHERS WORLD GOVERNMENT BOND INDEX
EXHIBIT A:
______________________________________________________________
| | SALOMON BROTHERS | |
| PERIOD | WORLD GOVERNMENT | DREYFUS |
| | BOND INDEX* | GLOBAL BOND FUND |
|----------- | ------------------- | -------------------|
| 3/18/94 | 10,000 | 10,000 |
| 5/31/94 | 9,924 | 9,872 |
| 8/31/94 | 10,113 | 9,955 |
| 11/30/94 | 10,206 | 10,091 |
|-------------------------------------------------------------|
* Source: Lipper Analytical Services, Inc.
