Dreyfus Global Bond Fund, Inc.
SEMIANNUAL REPORT
May 31, 1999
<PAGE>
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- -------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
8 Statement of Assets and Liabilities
9 Statement of Operations
10 Statement of Changes in Net Assets
11 Financial Highlights
12 Notes to Financial Statements
FOR MORE INFORMATION
- --------------------------------------------------------
Back Cover
<PAGE>
Dreyfus
Global Bond Fund, Inc. The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Global Bond Fund,
Inc., covering the six-month period from December 1, 1998 through May 31, 1999.
Inside, you'll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager,
Christine Downton.
Many regional economies showed marked improvement over the past six months after
many of the world's central banks lowered key short-term interest rates to
stimulate economic growth. Less restrictive monetary policies especially helped
prevent further economic deterioration in Japan, Asia, Latin America and Eastern
Europe, where the worst of the global currency and credit crisis appears to be
behind us. In contrast, some Western European economies slowed moderately after
the formation of the European Monetary Union (EMU) and the debut of a new
currency, the euro. These economic conditions produced mixed results for most
global fixed-income markets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Global Bond Fund, Inc.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
June 14, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Christine Downton, Portfolio Manager
How did Dreyfus Global Bond Fund, Inc.
perform relative to its benchmark?
For the six-month period ended May 31, 1999, Dreyfus Global Bond Fund, Inc.
produced a total return of -1.24%.1 This compares with a total return of -3.62%
for the Salomon Smith Barney World Government Bond Index (unhedged), the fund's
benchmark, and 1.16% for the fully hedged version of that Index.2
We attribute the fund's performance to two factors. First, slowing economic
growth in the European markets dampened the performance of our investments
there. And second, in April and May, we maintained a slightly
longer-than-average duration relative to the fund's benchmark. In an environment
characterized by rising bond yields in the United States, our longer duration
served to hinder the fund's overall performance.
What is the fund's investment approach?
The fund invests primarily in debt obligations of issuers located throughout the
world. These debt obligations may include government bonds and notes, sovereign
debt obligations, convertible securities, mortgage-related securities, municipal
obligations, money market instruments and corporate bonds, debentures and notes.
The fund will generally invest in debt obligations issued by governments or
corporations of at least three countries. We typically select foreign securities
based on their real yields relative to other countries, the economic and
financial markets of the countries in which the issuers are located, and the
interest rate environment in those countries. We typically invest in developed
countries' sovereign debt, and the average credit quality of the portfolio was
AA as of June 30, 1999.
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the fund's performance?
During the first three months of the reporting period, the fund focused on
investments in the European markets, particularly in Spain, Italy, Sweden and
the Netherlands. Contrary to the expectations of most analysts and economists,
the new euro currency began to decline in value against the strong U.S. dollar.
As a result, we were able to purchase European bonds at lower prices than
comparable U.S. bonds, thereby adding value to the portfolio. In April and May,
the U.S. bond markets began to show signs of weakening, both absolutely and
relative to the European markets by comparison. In response, we realized profits
by selling some of our European holdings, and we redeployed those assets to
dollar-related markets, which are markets whose currencies are closely linked to
the U.S. dollar, such as Canada and Australia and, to a lesser degree, New
Zealand.
Once we began shifting assets out of Europe and into the dollar-related markets,
we also extended the portfolio's duration, which is a measure of its sensitivity
to interest rates, from about six years to approximately eight years at the end
of the reporting period. In comparison, the benchmark's average duration was 5.7
years at the end of the reporting period. In hindsight, we extended the
portfolio's average duration a little too early. That's because as bond prices
in the U.S. continued to drop in the months that followed, their yields -- which
move in the opposite direction of prices -- rose. By maintaining a longer
average duration, the portfolio experienced some decline in price.
Finally, we continued to avoid investments in Japan because we believed the
Japanese market remained overvalued. Japanese authorities have begun to address
their deep-seated economic problems, and companies there seem to be increasingly
recognizing their need to restructure. However, we believe Japan still has a
long road to recovery. As a result, we currently prefer to wait for more
positive signs before we invest in Japanese bonds.
4
<PAGE>
What is the fund's current strategy?
We are confident that our decision to gradually move out of European markets --
where we believe fair values have already been reached -- and back into
dollar-related markets was a prudent one. Our longer-than-average duration was
designed to position us appropriately in the market's current investment
climate, especially if economic growth slows and interest rates begin to fall in
key markets. As always, however, we remain prepared to re-allocate assets among
the world's bond markets and change the portfolio's average duration as economic
and market conditions continue to evolve.
June 14, 1999
1 Total return includes reinvestment of dividends and any capital gains paid.
Past performance is no guarantee of future results. Share price and investment
return fluctuate such that upon redemption fund shares may be worth more or
less than their original cost. Return figures provided reflect the
absorption of fund expenses by The Dreyfus Corporation pursuant to an
undertaking in effect that may be extended, terminated or modified at any
time. Had these expenses not been absorbed, the fund's returns would have
been lower.
2 SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Salomon Smith Barney 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 18 government bond markets.
The Fund 5
<PAGE>
STATEMENT OF INVESTMENTS
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal
Bonds and Notes--82.7% Amount ($) Value ($)
- --------------------------------------------------------------------------------
Banking--16.8%
AB Spintab,
Bonds, 6%, 2009 232,239 a 243,050
Bayerische Landesbank Girozentrale,
Notes, 6.625%, 2007 620,000 622,891
Eurofima,
Medium-Term Notes, 5.625%, 2008 232,239 a 248,355
European Investment Bank,
Notes, 6.875%, 2009 590,000 614,234
International Bank of Reconstruction
and Development,
Notes, 6.375%, 2005 518,000 523,002
Sudwestdeutsche Landesbank Capital Markets,
Gtd. Bonds, 6%, 2008 455,000 443,791
Swedish Export Credit,
Notes, 5.625%, 2005 643,303 a 676,955
3,372,278
Foreign/Governmental--62.9%
Australia Government,
Bonds, 7.5%, 2009 652,400 b 725,028
Canada Government Bonds,
5.75%, 2029 151,217 c 157,735
Government of New Zealand Bonds:
7%, 2009 694,267 d 731,758
6%, 2011 162,317 d 157,369
Halifax,
Ser. 17, Sr. Notes, 6%, 2008 510,000 490,120
Kingdom of Sweden Notes:
4%, 2008 464,479 a 505,377
6.75%, 2014 34,836 a 41,169
Province of Ontario,
Medium-Term Notes, 5%, 2009 678,104 c 636,266
Province of Quebec,
Ser. OS, Deb., 6%, 2029 613,684 c 601,104
Netherlands Government Bonds,
7.5%, 2010 2,538,477 e 3,244,139
New South Wales Treasury,
Ser. 8, Notes, 8%, 2008 456,680 b 507,551
Spain Government Deb.:
5.15%, 2009 2,291,241 e 2,411,685
6%, 2029 2,213,166 e 2,462,199
12,671,500
6
<PAGE>
- --------------------------------------------------------------------------------
Principal
Bonds and Notes (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
U.S. Government--3.0%
U.S. Treasury Bonds:
5.25%, 2/15/2029 616,000 565,771
7.25%, 5/15/2016 34,000 38,017
603,788
Total Bonds and Notes
(cost $17,697,550) 16,647,566
- --------------------------------------------------------------------------------
Short-Term Investments--9.0%
- --------------------------------------------------------------------------------
Kingdom of Belgium Treasury Bills--1.6%
2.37%, 7/15/1999 320,628 e 319,563
U.S. Treasury Bills--7.4%
4.27%, 6/10/1999 251,000 250,628
4.37%, 6/24/1999 101,000 100,687
4.36%, 7/22/1999 887,000 881,119
4.39%, 7/29/1999 121,000 120,094
4.47%, 8/5/1999 141,000 139,873
1,492,401
Total Short-Term Investments
(cost $1,824,401) 1,811,964
- --------------------------------------------------------------------------------
Total Investments (cost $19,521,951) 91.7% 18,459,530
Cash and Receivables (Net) 8.3% 1,670,580
Net Assets 100.0% 20,130,110
a Converted to U.S. Dollars from Swedish Krona.
b Converted to U.S. Dollars from Australian Dollars.
c Converted to U.S. Dollars from Canadian Dollars.
d Converted to U.S. Dollars from New Zealand Dollars.
e Converted to U.S. Dollars from Euros.
See notes to financial statements.
The Fund 7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Cost Value
- --------------------------------------------------------------------------------
Assets ($):
Investments in securities--See Statement of
Investments 19,521,951 18,459,530
Cash 141,661
Cash denominated in foreign currencies 2,888,185 2,792,907
Net unrealized appreciation on forward currency
exchange contracts--Note 4(a) 917,266
Receivable for forward currency exchange contracts closed 302,467
Interest receivable 294,021
Receivable for shares of Common Stock subscribed 79,637
Prepaid expenses and other assets 28,610
23,016,099
- --------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 370
Due to Distributor 4,351
Payable for investment securities purchased 2,621,207
Payable for forward currency exchange contracts closed 199,397
Payable for shares of Common Stock redeemed 7,844
Accrued expenses 52,820
2,885,989
- --------------------------------------------------------------------------------
Net Assets ($) 20,130,110
- --------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 20,011,263
Accumulated distributions in excess of investment income--net (498,179)
Accumulated net realized gain (loss) on investments and
foreign currency transactions 756,364
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions (139,338)
- --------------------------------------------------------------------------------
Net Assets 20,130,110
- --------------------------------------------------------------------------------
Shares Outstanding
(300 million shares of $.001 par value Common Stock authorized) 1,592,708
Net Asset Value, offering and redemption price per share ($) 12.64
See notes to financial statements.
8
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------
Interest Income 419,562
Expenses:
Management fee--Note 3(a) 65,507
Shareholder servicing costs--Note 3(b) 28,478
Legal fees 18,142
Auditing fees 13,174
Directors' fees and expenses--Note 3(c) 13,084
Registration fees 10,917
Custodian fees 4,589
Prospectus and shareholders' reports 2,748
Loan commitment fees--Note 2 36
Miscellaneous 7,357
Total Expenses 164,032
Less--reduction in management fee due to undertaking--Note 3(a) (38,217)
Net Expenses 125,815
Investment Income--Net 293,747
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4 ($):
Net realized gain (loss) on investments and foreign currency
transactions 292,915
Net realized gain (loss) on forward currency exchange contracts 159,076
Net Realized Gain (Loss) 451,991
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions (1,029,159)
Net Realized and Unrealized Gain (Loss) on Investments (577,168)
Net Decrease in Net Assets Resulting from Operations (283,421)
See notes to financial statements.
The Fund 9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended Year Ended
May 31, 1999 November 30,
(Unaudited) 1998
- --------------------------------------------------------------------------------
Operations ($):
Investment income--net 293,747 617,124
Net realized gain (loss) on investments 451,991 74,188
Net unrealized appreciation (depreciation)
on investments (1,029,159) 694,741
Net Increase (Decrease) in Net Assets
Resulting from Operations (283,421) 1,386,053
- --------------------------------------------------------------------------------
Dividends to Shareholders from ($):
Investment income--net (247,498) (852,420)
Net realized gain on investments (335,579) (115,181)
Total Dividends (583,077) (967,601)
- --------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 6,637,143 7,516,813
Dividends reinvested 504,599 840,782
Cost of shares redeemed (2,911,716) (4,055,687)
Increase (Decrease) in Net Assets from
Capital Stock Transactions 4,230,026 4,301,908
Total Increase (Decrease) in Net Assets 3,363,528 4,720,360
- --------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 16,766,582 12,046,222
End of Period 20,130,110 16,766,582
- --------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 511,772 590,731
Shares issued for dividends reinvested 38,865 66,344
Shares redeemed (225,045) (318,868)
Net Increase (Decrease) in Shares Outstanding 325,592 338,207
See notes to financial statements.
10
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal period indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
- --------------------------------------------------------------------------------
Six Months Ended
May 31, 1999 Year Ended November 30,
--------------------------------------
(Unaudited) 1998 1997 1996 1995 1994a
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value,
beginning of period 13.23 12.97 13.18 13.07 12.04 12.50
Investment Operations:
Investment income--net .27 .56b .65b .77b .85 .65
Net realized and unrealized
gain (loss) on investments (.70) .63 .02 .55 1.06 (.54)
Total from Investment Operations (.43) 1.19 .67 1.32 1.91 .11
Distributions:
Dividends from investment
income--net (.16) (.81) (.88) (1.21) (.88) (.57)
Dividends from net realized gain
on investments -- (.12) -- -- -- --
Total Distributions (.16) (.93) (.88) (1.21) (.88) (.57)
Net asset value, end of period 12.64 13.23 12.97 13.18 13.07 12.04
- --------------------------------------------------------------------------------
Total Investment Return (%) (2.49)c 9.70 5.42 10.96 16.47 1.29c
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average
net assets 1.34c 1.35 1.35 1.34 .81 --
Ratio of net investment income
to average net assets 3.14c 4.36 5.10 5.87 6.76 7.83c
- --------------------------------------------------------------------------------
Decrease reflected in above
expense ratios due to
undertakings by the Manager .41c .61 .75 .66 1.12 2.49c
Portfolio Turnover Rate 100.80d 222.22 274.83 81.34 20.46 4.16d
- --------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 20,130 16,767 12,046 10,779 16,480 15,275
a From March 18, 1994 (commencement of operations) to November 30, 1994.
b Based on average shares outstanding.
c Annualized.
d Not annualized.
See notes to financial statements.
The Fund 11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Global Bond Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a non-diversified open-end
management investment company. The fund's investment objective is to seek total
return. The Dreyfus Corporation (the "Manager") serves as the fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank Corporation. Premier Mutual Fund
Services, Inc. (the "Distributor") is the distributor of the fund's shares,
which are sold to the public without a sales charge.
As of May 31, 1999, MBC Investments Corp., an indirect subsidiary of Mellon Bank
Corporation, held 589,211 shares of the fund.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding short-term
investments, other than Treasury Bills and financial futures) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of securities of comparable quality, coupon, maturity and
type; indication as to values from dealers; and general market conditions.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Short-term investments, excluding Treasury Bills, are carried at amortized
cost, which approximates value.
12
<PAGE>
Financial futures are valued 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 on each business day. 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.
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 and the difference between the amount 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. Such gains and losses are included with net realized and
unrealized gain or loss on investments.
(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. Under the terms of the custody agreement, the
fund received net earnings credits of $5,544 during the period ended May 31,
1999 based on available cash balances left on deposit. Income earned under
this arrangement is included in interest income.
(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 are nor-
The Fund 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
mally 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 of 1986, as amended (the "Code"). This may result in distributions
that are in excess of investment income-net and net realized gain on a fiscal
year basis. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the fund not to distribute
such gain.
On May 28, 1999, the Board of Directors declared a cash dividend of $.027 per
share from undistributed investment income-net, payable on June 1, 1999
(ex-dividend date), to shareholders of record as of the close of business on May
28, 1999.
(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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--BankLine of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended May
31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .70 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager has undertaken from
December 1, 1998 through May 31, 1999 to reduce the management fee paid by the
fund, to the
14
<PAGE>
extent that the fund's aggregate annual expenses (exclusive of taxes,
brokerage, interest on borrowings, commitment fees and extraordinary expenses)
exceed an annual rate of 1.35% of the value of the fund's average daily net
assets. The reduction in management fee, pursuant to the undertaking, amounted
to $38,217 during the period ended May 31, 1999.
(b) Under the 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 the
provision of certain services. 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. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended May
31, 1999, the fund was charged $23,395 pursuant to the Shareholder Services
Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended May 31, 1999, the fund was charged $4,364 pursuant to the transfer agency
agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--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 May 31, 1999, amounted to $19,809,951 and $16,129,472,
respectively.
The Fund 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
In addition, the following summarizes open forward currency exchange contracts
at May 31, 1999:
<TABLE>
<CAPTION>
Foreign Unrealized
Currency Appreciation
Forward Currency Exchange Contracts Amounts Proceeds($) Value($) (Depreciation)($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales:
Australian Dollars,
expiring 6/16/99 2,000,000 1,335,080 1,304,820 30,260
Canadian Dollars,
expiring 6/16/99 790,000 523,257 535,758 (12,501)
Euros, expiring 6/16/1999 8,111,963 9,233,912 8,452,828 781,084
Japanese Yen,
expiring 6/16/99 62,000,000 541,248 510,694 30,554
New Zealand Dollars,
expiring 6/16/99 2,700,000 1,504,505 1,446,538 57,967
Swedish Krona,
expiring 6/16/99 12,965,000 1,601,848 1,506,653 95,195
Purchases: Cost ($)
British Pounds, expiring 6/16/99 177,000 288,706 283,328 (5,378)
Japanese Yen, expiring 6/16/99 69,600,000 633,210 573,295 (59,915)
Total 917,266
</TABLE>
The fund enters into forward currency exchange contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. 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 purchases 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 gain on each open
contract.
16
<PAGE>
(b) At May 31, 1999, accumulated net unrealized depreciation on investments and
forward currency exchange contracts was $139,338 consisting of $1,122,077 gross
unrealized appreciation and $1,261,415 gross unrealized depreciation.
At May 31, 1999, 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).
The Fund 17
<PAGE>
For More Information
Dreyfus
Global Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request
to [email protected]
On the Internet Information
can be viewed online or
downloaded from:
http://www.dreyfus.com
(c) 1999, Dreyfus Service Corporation 098SA995
