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.
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Global Bond Fund, Inc.
for the 12-month period ended November 30, 1998. During this period,
characterized by positive global bond markets but highly volatile underlying
currencies, the Dreyfus Global Bond Fund, Inc. was able to deliver a positive
U.S. Dollar return. For that period, your Fund produced a total return of 9.70%
,* which compares to a total return of 12.52% for the Salomon Smith Barney World
Government Bond Index (fully hedged) and 12.69% for the unhedged version of that
Index.**
ECONOMIC REVIEW
The year began with attempts, led by the IMF, to rescue the shattered Asian
economies. Calm was restored to financial markets, and bond investors looked
forward to the prospect of moderate global growth and low inflation. As the year
progressed, economic data began to show that developed economies were slowing
more than expected. This prompted a series of interest rate cuts by central
banks around the world, leading to very positive global bond market performance
Global growth was supported by the U.S. economy, where consumer spending
remained strong despite weaker export growth and declining corporate profits.
Japan, in contrast, remained mired in recession. In November, the U.S. ratings
agency, Moody's, downgraded Japanese debt due to the ballooning fiscal deficit.
In Europe, all eyes were on the imminent arrival of the Euro. At the beginning
of May, European finance ministers decided which countries would become part of
the European Monetary Union on January 1, 1999. Recent weaker economic data has
led to the suggestion that Europe's left-wing governments will be willing to
relax some of their tighter fiscal constraints, once the Euro is launched. This
could end up keeping European interest rates higher, despite the favorable
outlook for European inflation, as the new European Central Bank establishes
credibility in the markets.
MARKET ENVIRONMENT
Global bonds were consistently strong over the last year. The U.K. bond market
performed very well, rising 19%, partly due to its high duration compared with
other markets. Core European markets rose between 11% and 13% as they converged
ahead of European monetary union. U.S. bonds also rallied 11%. Despite touching
record low yields at one point in the year, Japanese bonds gave the poorest
local currency return.
Currency markets were volatile. After a sustained period of U.S. Dollar
strength, the Japanese Yen rebounded very rapidly in early October as investors
were unwinding short Yen positions, and the Fed unexpectedly cut interest rates.
The Deutschmark also rose strongly over this period. Over the entire year, net
currency movements very nearly matched interest rate differentials, so that
unhedged and hedged versions of the Salomon Smith Barney World Government Bond
Index gave similar returns.
PORTFOLIO FOCUS
We worked hard to position the portfolio in what we believed were attractive
markets. The attractiveness of markets was assessed on the basis of adjusted
real yields using our value-based model. As a result of our generally positive
view on interest rates during the reporting period, the Fund benefited from
holding long-duration bonds, particularly in the second half of the year. In
terms of market selection, good performance was generated by the substantial
holding of Australian bonds held in the first part of the year. In the latter
six months, the portfolio shifted into European markets, in particular Spain,
the Netherlands and Sweden.
The currency exposure of the Fund was carefully controlled over a difficult
period. We hedged out all exposure to the Australian Dollar resulting from the
bond holding, due to our negative view on the currency. Instead, Sterling and,
more recently, the Deutschmark were favoured. Further diversification was
obtained through small holdings of Swedish Krone and New Zealand Dollars, and
more recently the Japanese Yen. However, the overall level of foreign currency
exposure of the Fund was hedged back aggressively to the extent of 81% on
average throughout the period, and by as much as 98% in January 1998. This
successfully provided the Fund with protection against the full repercussions of
foreign currency weakness in the first half of the year. A generally lower level
of hedging applied in the second half.
Following the positive performance over the last year, we believe the Fund is
well positioned for the immediate future. We will, of course, continue to adjust
the Fund' s portfolio as we deem appropriate in light of economic and market
conditions.
Sincerely
[Christine Downton signature]
Christine Downton
Portfolio Manager
December 18, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC.-- Unlike the Fund, which can
invest in both corporate and government bonds, 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 14 government bond markets.
DREYFUS GLOBAL BOND FUND, INC. NOVEMBER 30, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS GLOBAL BOND FUND,
INC. AND THE SALOMON SMITH BARNEY WORLD GOVERNMENT BOND INDEX (UNHEDGED)
Dollars
$15,083
Dreyfus Global Bond Fund, Inc.
$14,302
Salomon Smith Barney World Government Bond Index* (unhedged)
*Source: Salomon Smith Barney, Inc.
Average Annual Total Returns
- -----------------------------------------------------------------------------
One Year Ended From Inception (3/18/94)
November 30, 1998 to November 30, 1998
____________________ __________________________
9.70% 9.12%
- ---------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Global Bond Fund,
Inc. on 3/18/94 (Inception Date) to a $10,000 investment made in the Salomon
Smith Barney World Government Bond Index (unhedged) on that date. For
comparative purposes, the value of the Index 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 shown in the line graph takes into account all applicable
fees and expenses. The Salomon Smith Barney World Government Bond Index
(unhedged) 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, including expense reimbursements, if applicable,
is contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998
Principal
Bonds and Notes--86.3% Amount Value
- ------------------------------------------------------- ____________ ____________
<S> <C> <C>
Banking--23.0% Bayerische Landesbank Girozentrale,
Notes, 6.625%, 2007 . . . . . . . . . . . . . . . $ 620,000 $ 661,900
DSL Finance,
Gtd. Notes, 6%, 2007 . . . . . . . . . . . . . . . 590,040 (a) 660,644
European Investment Bank,
Notes, 6.875%, 2009 . . . . . . . . . . . . . . . 590,000 657,305
International Bank for Reconstruction and Development,
Notes, 6.375%, 2005 . . . . . . . . . . . . . . . 410,000 437,553
Sudwestdeutsche Landesbank Capital Markets,
Gtd. Bonds, 6%, 2008 . . . . . . . . . . . . . . . 605,000 636,517
Swedish Export Credit,
Notes, 5.625%, 2005 . . . . . . . . . . . . . . . 766,777 (b) 809,994
____________
3,863,913
____________
Foreign/
Governmental--59.0% Bundesrepublik Deutschland,
Bonds, 4.75%, 2008 . . . . . . . . . . . . . . . . 354,024 (a) 376,480
Canada Government Bonds,
6%, 2008 . . . . . . . . . . . . . . . . . . . . . 456,621 (c) 490,943
France O.A.T., Deb.,
5.25%, 2008 . . . . . . . . . . . . . . . . . . . 492,975 (d) 539,624
Government of New Zealand Bonds,
7%, 2009 . . . . . . . . . . . . . . . . . . . . . 314,820 (e) 351,053
Kingdom of Sweden Notes,
9%, 2009 . . . . . . . . . . . . . . . . . . . . . 1,153,233 (b) 1,594,255
Netherlands Government Bonds,
7.50%, 2010 . . . . . . . . . . . . . . . . . . . 2,337,085 (f) 3,034,978
Spain Government Deb.:
8.80%, 2006 . . . . . . . . . . . . . . . . . . . 1,200,972 (g) 1,564,234
6%, 2008 . . . . . . . . . . . . . . . . . . . . . 1,711,211 (g) 1,935,914
____________
9,887,481
____________
U.S. Government--4.3% U.S. Treasury Bonds,
7.25%, 5/15/2016 . . . . . . . . . . . . . . . . . 594,000 727,133
____________
TOTAL BONDS AND NOTES
(cost $13,740,942) . . . . . . . . . . . . . . . . $14,478,527
____________
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998
Principal
Short-Term Investments--6.3% Amount Value
- ------------------------------------------------------- ____________ ______________
U.S. Treasury Bills; 3.82%, 1/21/1999
(cost $1,055,259) . . . . . . . . . . . . . . . . $1,061,000 $ 1,054,337
____________
TOTAL INVESTMENTS (cost $14,796,201) . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.6% $15,532,864
_______ ____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4% $ 1,233,718
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $16,766,582
_______ ____________
NOTES TO STATEMENT OF INVESTMENTS:
- -----------------------------------------------------------------------------
(a) Converted to U.S. Dollars from German Deutsche Marks.
(b) Converted to U.S. Dollars from Swedish Krona.
(c) Converted to U.S. Dollars from Canadian Dollars.
(d) Converted to U.S. Dollars from French Francs.
(e) Converted to U.S. Dollars from New Zealand Dollars.
(f) Converted to U.S. Dollars from Dutch Guilders.
(g) Converted to U.S. Dollars from Spanish Pesetas.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998
Cost Value
____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments . . . . . . . . . . . . . . . . . . . . . . $14,796,201 $15,532,864
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 895,829 883,556
Receivable for investment securities sold . . . . . . . . 839,779
Interest receivable . . . . . . . . . . . . . . . . . . . 548,464
Net unrealized appreciation on forward currency
exchange contracts--Note 4(a) . . . . . . . . . . . . . 152,950
Receivable for forward currency exchange contracts closed . . 96,747
Receivable for shares of Common Stock subscribed . . . . 33,522
Prepaid expenses and other assets . . . . . . . . . . . . 9,173
Due from The Dreyfus Corporation and affiliates . . . . . 6,418
____________
18,103,473
____________
LIABILITIES: Due to Distributor . . . . . . . . . . . . . . . . . . . 3,370
Payable for investment securities purchased . . . . . . . 827,886
Payable for forward currency exchange contracts closed . 394,583
Payable for shares of Common Stock redeemed . . . . . . . 70,655
Accrued expenses . . . . . . . . . . . . . . . . . . . . 40,397
____________
1,336,891
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,766,582
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $15,781,237
Accumulated distributions in excess of investment
income--net . . . . . . . . . . . . . . . . . . . . . . (544,428)
Accumulated net realized gain (loss) on investments
and foreign currency transactions . . . . . . . . . . . 639,952
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions . . . 889,821
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,766,582
____________
SHARES OUTSTANDING
(300 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . . 1,267,116
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $13.23
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income (net of $3,237 foreign taxes
witheld at source) . . . . . . . . . . . . . . $ 809,445
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . $ 99,683
Shareholder servicing costs--Note 3(b) . . . . . 45,781
Auditing fees . . . . . . . . . . . . . . . . . . 30,681
Registration fees . . . . . . . . . . . . . . . . 27,722
Directors' fees and expenses--Note 3(c) . . . . . 24,641
Organization expenses . . . . . . . . . . . . . . 13,003
Legal fees . . . . . . . . . . . . . . . . . . . 10,905
Prospectus and shareholders' reports . . . . . . 10,730
Custodian fees . . . . . . . . . . . . . . . . . 7,177
Loan commitment fees--Note 2 . . . . . . . . . . 76
Miscellaneous . . . . . . . . . . . . . . . . . . 8,548
___________
Total Expenses . . . . . . . . . . . . . . 278,947
Less--reduction in management fee due to
undertaking--Note 3(a) . . . . . . . . . . . . (86,626)
___________
Net Expenses . . . . . . . . . . . . . . . 192,321
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617,124
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions . . . . . . . . $ 46,210
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . 27,978
___________
Net Realized Gain (Loss) . . . . . . . . . 74,188
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions . 694,741
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 768,929
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $1,386,053
___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
November 30, 1998 November 30, 1997
___________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 617,124 $ 569,985
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 74,188 499,174
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 694,741 (461,429)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 1,386,053 607,730
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (852,420) (755,805)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . (115,181) ---
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (967,601) (755,805)
_____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 7,516,813 2,809,403
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840,782 677,809
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,055,687) (2,071,927)
_____________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . 4,301,908 1,415,285
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 4,720,360 1,267,210
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,046,222 10,779,012
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,766,582 $12,046,222
_____________ _____________
UNDISTRIBUTED INVESTMENT INCOME (DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME)--NET. . $ (544,428) $ 99,270
_____________ _____________
Shares Shares
_____________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590,731 220,169
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 66,344 53,428
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318,868) (162,545)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . 338,207 111,052
_____________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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 each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended November 30,
_______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994(1)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $12.97 $13.18 $13.07 $12.04 $12.50
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .56(2) .65(2) .77(2) .85 .65
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . .63 .02 .55 1.06 (.54)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . 1.19 .67 1.32 1.91 .11
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.81) (.88) (1.21) (.88) (.57)
Dividends from net realized gain on investments . . . . . (.12) -- -- -- --
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . (.93) (.88) (1.21) (.88) (.57)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . ($13.23) $12.97 $13.18 $13.07 $12.04
_______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . 9.70% 5.42% 10.96% 16.47% 1.29%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . .. 1.35% 1.35% 1.34% .81% --
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . 4.36% 5.10% 5.87% 6.76% 7.83%(3)
Decrease reflected in above expense ratios due to
undertakings by the Manager . . . . . . . . . . . . . .61% .75% .66% 1.12% 2.49%(3)
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . 222.22% 274.83% 81.34% 20.46% 4.16%(4)
Net assets, end of period (000's Omitted) . . . . . . . . $16,767 $12,046 $10,779 $16,480 $15,275
- ------------------------
(1) From March 18, 1994 (commencement of operations) to November 30, 1994.
(2) Based on average shares outstanding.
(3) Annualized.
(4) 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") 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 November 30, 1998, MBC Investment Corp., an indirect subsidiary of
Mellon Bank Corporation, held 570,017 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 U.S. Treasury Bills and financial futures) are valued
each business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily available
and are representative of the 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; indications 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
Trustees. Short-term investments, excluding U.S. Treasury Bills, are carried at
amortized cost, which approximates value. 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 $7,478 during the period ended November
30, 1998 based on available cash balances left on deposit. Income earned under
this arrangement is included in interest income.
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 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 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 November 30, 1998, the Board of Directors declared a cash dividend of $.043
per share from undistributed investment income-net, payable on December 1, 1998
(ex-dividend date) , to shareholders of record as of the close of business on
November 30, 1998.
(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.
During the period ended November 30, 1998, the Fund reclassified $408,402 from
accumulated net realized gain on investments to accumulated distributions in
excess of investment income-net.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" 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
November 30, 1998, 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, 1997 through November 30, 1998 to reduce the management fee paid by
the Fund, to the 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 expense reimbursement, pursuant to the undertaking,
amounted to $86,626 during the period ended November 30, 1998.
(B) Under the Shareholder Services Plan, the Fund pays the Distributor at 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
November 30, 1998, the Fund was charged $35,601 pursuant to the Shareholder
Services Plan.
DREYFUS GLOBAL BOND FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 November 30, 1998, the Fund was charged $5,816 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 November 30, 1998 amounted to $29,088,640 and $24,279,744,
respectively.
In addition, the following summarizes open forward currency exchange contracts
at November 30, 1998:
<TABLE>
<CAPTION>
Foreign Unrealized
Currency Appreciation
Forward Currency Exchange Contracts Amounts Proceeds Value (Depreciation)
_________________________________ ________ __________ __________ ____________
<S> <C> <C> <C> <C>
Sales:
______
British Pounds, expiring 12/16/98 . . . . . . . . . . 1,638,000 $2,737,313 $2,701,788 $ 35,525
Canadian Dollars, expiring 12/16/98 . . . . . . . . . 770,000 498,866 502,283 (3,417)
German Deutsche Marks, expiring 12/16/98 . . . . . . 14,716,000 8,766,603 8,689,850 76,753
New Zealand Dollars, expiring 12/16/98 . . . . . . . 643,000 322,465 337,645 (15,180)
Swedish Krona, expiring 12/16/98 . . . . . . . . . . 23,935,000 3,005,925 2,938,253 67,672
Purchases: Cost
_________ _________
Japanese Yen, expiring 12/16/98 . . . . . . . . . . . 55,000,000 $ 455,876 447,473 (8,403)
___________
TOTAL . . . . . . . . . . . . . . . . . . . . . . $152,950
___________
</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.
(B) At November 30, 1998, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $889,613 consisting of
$917,534 gross unrealized appreciation and $27,921 gross unrealized
depreciation.
At November 30, 1998, 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, 1998, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. 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
audits.
We conducted our audits 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 and financial highlights. Our procedures included confirmation of
securities owned as of November 30, 1998 by correspondence with the custodian
and brokers. 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 audits provide 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, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
January 14, 1999
DREYFUS GLOBAL BOND FUND, INC.
- -----------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.086 per share as a
long-term capital gain distribution of the $.430 per share paid on December 23,
1997.
[reg.tm logo]
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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
Printed in U.S.A. 098AR9811
Global Bond
Fund, Inc.
Annual Report
November 30, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GLOBAL BOND FUND, INC. AND THE SALOMON
SMITH BARNEY WORLD GOVERNMENT BOND INDEX (UNHEDGED)
EXHIBIT A:
SALOMON SMITH BARNEY DREYFUS
PERIOD WORLD GOVERNMENT GLOBAL BOND
BOND INDEX* (unhedged) FUND, INC.
3/18/94 10,000 10,000
11/30/94 10,206 10,091
11/30/95 12,056 11,753
11/30/96 12,726 13,041
11/30/97 12,691 13,748
11/30/98 14,302 15,083
* Source: Salomon Smith Barney Inc.
