-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N6f7R2xTbq7MevGxjprlcqlAOv9cnlXjahjHSxo9ABA3prp5B0iQMq/aUBxV1hjJ umazxu/XGFgs/Rh992WbnA== 0001047469-04-022585.txt : 20040706 0001047469-04-022585.hdr.sgml : 20040705 20040706170702 ACCESSION NUMBER: 0001047469-04-022585 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040430 FILED AS OF DATE: 20040706 EFFECTIVENESS DATE: 20040706 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL HIGH INCOME DOLLAR FUND INC CENTRAL INDEX KEY: 0000897996 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07540 FILM NUMBER: 04902884 BUSINESS ADDRESS: STREET 1: C/O UBS GLOBAL ASSET MANAGEMENT (US) INC STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212 882 5575 MAIL ADDRESS: STREET 1: C/O UBS GLOBAL ASSET MANAGEMENT (US) INC STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: GLOBAL OPPORTUNITIES INCOME FUND INC /MD/ DATE OF NAME CHANGE: 19930624 N-CSRS 1 a2138331zn-csrs.txt N-CSRS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-07540 --------------------------------------------- Global High Income Dollar Fund Inc. ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) 51 West 52nd Street, New York, New York 10019-6114 ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Keith A. Weller, Esq. UBS Global Asset Management (US) Inc. 51 West 52nd Street New York, NY 10019-6114 (Name and address of agent for service) Copy to: Jack W. Murphy, Esq. Dechert 1775 I Street, N.W. Washington, DC 20006-2401 Registrant's telephone number, including area code: 212-882 5000 Date of fiscal year end: October 31 Date of reporting period: April 30, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. [UBS GLOBAL ASSET MANAGEMENT LOGO] GLOBAL HIGH INCOME DOLLAR FUND INC. SEMIANNUAL REPORT APRIL 30, 2004 GLOBAL HIGH INCOME DOLLAR FUND INC. June 15, 2004 DEAR SHAREHOLDER, We present you with the semiannual report for Global High Income Dollar Fund Inc. for the six months ended April 30, 2004. PERFORMANCE Over the six-month period, Global High Income Dollar Fund's (the "Fund") net asset value return was 1.83%, compared to the 1.85% return of its peers, as measured by the Lipper Emerging Markets Debt Funds median. On a market price basis, the Fund returned 0.15% over the six-month period, compared with the median's return of 3.49% over the same timeframe. (For more on the Fund's performance, please refer to "Performance At A Glance" on page 5.) Early in the reporting period, emerging bond markets rose sharply. While the Fund participated in this rally, it was hurt on a relative basis versus those peers that used leverage during the period. Leverage tends to magnify a fund's upside and downside returns. By not exposing shareholders to the potential benefits/risks associated with leverage, the Fund slightly underperformed its Lipper median on a net asset value basis. AN INTERVIEW WITH PORTFOLIO MANAGER UWE SCHILLHORN Q. HOW DID EMERGING MARKETS DEBT PERFORM OVER THE PERIOD? A. Emerging markets debt, as measured by the JP Morgan Emerging Markets Bond Index--Global (EMBI--G), returned 1.88% over the six-month period. In comparison, government bonds in developed markets returned 1.62%, as measured by the Citigroup World Government Bond Index (WGBI) on a currency-hedged basis in US dollars. When the reporting period began in November 2003, there were a number of positive factors driving the performance of emerging markets debt. Global economic growth was rising, high commodity and oil prices were benefiting many emerging markets economies, and interest rates were low and expected to remain so, at least in the immediate future. This confluence of events [SIDENOTE] GLOBAL HIGH INCOME DOLLAR FUND INC. INVESTMENT GOALS: Primarily, high level of current income; secondarily, capital appreciation. PORTFOLIO MANAGEMENT: Portfolio Management Team, including Uwe Schillhorn UBS Global Asset Management (US) Inc. COMMENCEMENT: October 8, 1993 NYSE SYMBOL: GHI DIVIDEND PAYMENTS: Monthly 1 helped drive emerging markets debt prices sharply higher in November and December of 2003. As 2004 began, improving global growth, in particular in China and the US, led to fears that interest rates would rise. As a result, investors grew more risk averse, which led to falling demand for emerging markets debt. At the same time, bond issuance increased in January and questions regarding Brazil's economy caused emerging markets debt spreads to slightly widen (a spread is the difference in yield between debt obligations of different categories). This was followed by a period of relative stability in the bond market, despite a number of economic and geopolitical events in February and March, including a terrorist attack in Spain. However, spreads widened further in April, as renewed concerns over rising interest rates pulled down the market. Q. WHAT WERE SOME OF THE STRATEGIES THAT ENHANCED PERFORMANCE DURING THE REPORTING PERIOD? A. As the period began, we were overweight in Brazil, as the Lula administration was successfully meeting the country's fiscal deficit targets and championing tax and social security reform. ("Overweight" or "underweight" refers to the Fund's degree of investment in a category of investments versus that of a reference portfolio or benchmark index.) In mid-January 2004, however, we shifted to an underweight position. While economic growth in Brazil was expected to continue, we felt that the positive outlook was already reflected in spreads, and that most market participants appeared to be overweight in the country, thus limiting upside potential. Our underweight position proved beneficial when Brazil's bonds subsequently declined. Later in the reporting period, we moved back to a more neutral position. While many market participants are still strongly overweight in Brazil, the potential political ramifications of that country's upcoming October 2004 municipal elections keep us from further increasing our position. We chose to overweight Colombia, because we felt its government was capable of implementing necessary fiscal reforms. This enhanced results when that country's bond prices rose during the period. Our duration strategy was another positive for performance. While the Fund was largely neutral versus the EMBI--G, we were underweight in the five-year portion of the yield curve and overweight in 30-year securities. This was beneficial, as shorter-term securities underperformed when yields rose (and prices fell), and the longer end of the yield curve outperformed. Q. WERE THERE ANY STRATEGIES THAT DETRACTED FROM RESULTS? A. In addition to the aforementioned issue related to leveraging, the Fund was hurt by its positioning in several countries. For example, we were underweight in Turkey, as spreads there were relatively low, and we felt it was not worth taking the risk to maintain a larger exposure to the country. However, Turkish 2 bonds did well as spreads declined even further amid continuing hopes that Turkey would become a member of the European Economic Union. At this point, we believe spread levels in the country are well past their intrinsic, or true, values. Political issues in Venezuela caused us to underweight the country; however, many other investors overlooked these problems as they focused on high oil prices and the positive impact this had on the country's economy. As a result, our underweight position hurt relative results. Q. HOW WERE YOU POSITIONED IN OTHER EMERGING MARKET COUNTRIES? A. We were largely neutral in Mexico, and overweight in Russia during the period. This did not have a material impact on performance, as spreads were fairly stable over the period as a whole. However, within Mexico, the Fund's holding in PEMEX enhanced results when its bonds performed well during the reporting period. (PEMEX is Mexico's state-owned oil monopoly.) During the period, we established a position in Poland. While our investment in Poland's government bonds underperformed initially, we viewed this as an opportunity, given our opinion that these bonds were trading below their intrinsic value. We therefore increased the Fund's exposure, and have since seen Poland's bond prices stabilize. Q. WHAT IS YOUR OUTLOOK FOR THE GLOBAL ECONOMY AND EMERGING MARKETS DEBT IN THE COMING MONTHS? A. The global economy appears to continue to expand, and we expect commodity prices to strengthen further. It's also widely expected that the Federal Reserve Board will have to raise interest rates at some point. We don't expect spreads to tighten significantly from current levels, as the improving macroeconomic picture for many emerging markets has already been priced into their bond prices. Based on this outlook, the Fund is neutrally positioned. We are focusing on the medium- to shorter-end of the yield curve, which could help protect the Fund somewhat if interest rates rise and subsequently lead to a selloff in the emerging debt markets. 3 Our ultimate objective in managing your investments is to help you successfully meet your financial goals. We thank you for your continued support and welcome any comments or questions you may have. For additional information on the UBS funds,* please contact your financial advisor, or visit us at www.ubs.com. Sincerely, /s/ Joseph A. Varnas /s/ Uwe Schillhorn Joseph A. Varnas Uwe Schillhorn PRESIDENT PORTFOLIO MANAGEMENT TEAM MEMBER Global High Income Dollar Fund Inc. Global High Income Dollar Fund Inc. MANAGING DIRECTOR DIRECTOR UBS Global Asset Management (US) Inc. UBS Global Asset Management (US) Inc. * Mutual funds are sold by prospectus only. The prospectus for a fund contains more complete information regarding investment objectives, risks, charges and expenses, and should be read carefully before investing. This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended April 30, 2004, and reflects our views at the time of its writing. Of course, these views may change in response to changing circumstances, and they do not guarantee the future performance of the markets or the Fund. We encourage you to consult your financial advisor regarding your personal investment program. 4 PERFORMANCE AT A GLANCE AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 4/30/04
NET ASSET VALUE RETURNS* 6 MONTHS 1 YEAR 5 YEARS 10 YEARS - ---------------------------------------------------------------------------------------- Global High Income Dollar Fund Inc. 1.83% 8.46% 13.56% 12.46% Lipper Emerging Market Debt Funds median** 1.85 11.54 15.25 14.12 MARKET PRICE RETURNS* Global High Income Dollar Fund Inc. 0.15% 11.45% 19.71% 14.25% Lipper Emerging Market Debt Funds median** 3.49 6.87 14.36 12.73
* Past performance does not predict future performance. The return and value of an investment will fluctuate, so that an investor's shares, when sold, may be worth more or less than their original cost. NAV return assumes, for illustration only, that dividends were reinvested at the net asset value on the distribution dates. Market returns assume that dividends are reinvested at prices according to the dividend reinvestment plan. NAV and market price returns for periods of one year or less have not been annualized. Returns do not reflect taxes paid on dividends/distributions or brokerage commisions and taxes paid on the sale of shares. ** Lipper closed-end fund peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of the Lipper Emerging Market Debt Funds median peer group. 5 PORTFOLIO STATISTICS
CHARACTERISTICS* 4/30/04 10/31/03 4/30/03 - -------------------------------------------------------------------------------------------------------- Net Asset Value $ 15.34 $ 15.92 $ 15.79 Market Price $ 16.26 $ 17.07 $ 16.15 12-Month Dividends/ Distributions $ 1.7667 $ 1.6840 $ 1.5874 Dividend/Distribution at Period-End $ 0.1486 $ 0.1461 $ 0.1403 Net Assets (mm) $ 298.2 $ 309.5 $ 306.9 CURRENCY EXPOSURE** 4/30/04 10/31/03 4/30/03 - -------------------------------------------------------------------------------------------------------- U.S. Dollar Denominated 95.8% 98.2% 97.9% Foreign Denominated 4.2 1.8 2.1 TOTAL 100.0% 100.0% 100.0% TOP 10 COUNTRIES (EXCLUDING U.S.)** 4/30/04 10/31/03 4/30/03 - -------------------------------------------------------------------------------------------------------- Brazil 21.4% Brazil 20.0% Russia 20.0% Russia 19.4 Russia 17.0 Brazil 17.6 Mexico 12.6 Mexico 14.4 Mexico 14.8 Argentina 4.9 Venezuela 5.0 Malaysia 4.3 Colombia 4.9 Trinidad & Tobago 3.2 Venezuela 4.0 Venezuela 3.8 Panama 3.2 Trinidad & Tobago 3.8 Bulgaria 3.2 Malaysia 3.2 Peru 3.6 Malaysia 3.2 Peru 2.7 Colombia 3.2 Poland 2.4 Philippines 2.3 Panama 3.0 South Africa 2.3 Colombia 2.0 Philippines 2.4 TOTAL 78.1% 73.0% 76.7% CREDIT QUALITY** 4/30/04 10/31/03 4/30/03 - -------------------------------------------------------------------------------------------------------- A1/P1 -- 8.7% 6.6% A 13.4% 2.1 4.1 BBB 14.9 24.2 23.6 BB 34.9 28.2 33.7 B 26.7 22.4 18.9 CCC 7.0 8.9 7.4 Selective Default 0.9 1.9 1.9 Non-Rated 2.2 1.6 2.5 Net Receivable -- 2.0 1.3 TOTAL 100.0% 100.0% 100.0%
* Prices and other characteristics will vary over time. ** Weightings represent percentages of net assets as of the dates indicated. The Fund's portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on those assigned by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and/or Moody's Investors Services, Inc. to indvidual portfolio holdings. Both are independent ratings agencies. Past performance is no guarantee of future results. The value of an investment will fluctuate, so that an investor's shares, when sold, may be worth more or less than their original cost. 6 Portfolio of Investments -- April 30, 2004 (unaudited)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------------------------------------------------------------------------------------------------- FOREIGN DEBT SECURITIES--96.13% ALGERIA--1.59% $ 4,863 The People's Democratic Republic of Algeria Loan Participation, Tranche 3 (JP Morgan Chase Bank) (1) 03/04/10 1.985%+ $ 4,741,620 ARGENTINA--4.93% 18,540 Republic of Argentina 08/03/12 1.234+ 12,125,160 5,000 Republic of Argentina, PAR (2) 03/31/23 6.000 2,587,500 14,712,660 BAHAMAS--1.48% 4,560 Odebrecht Overseas Ltd. 02/25/09 11.500 4,423,200 BRAZIL--21.36% 1,140 Braskem S.A., 144A 01/22/14 11.750 1,100,100 3,700 Braskem S.A., 144A 11/05/08 12.500 3,755,500 2,174 Federal Republic of Brazil 04/15/12 2.063 1,815,395 384 Federal Republic of Brazil 04/15/06 2.125 369,600 8,280 Federal Republic of Brazil 04/15/24 8.875 6,624,000 3,620 Federal Republic of Brazil 05/15/27 10.125 3,181,075 3,500 Federal Republic of Brazil 07/26/07 11.250 3,745,000 15,774 Federal Republic of Brazil, C 04/15/14 8.000 14,511,874 18,937 Federal Republic of Brazil, DCB 04/15/12 2.125+ 15,812,003 10,000 Federal Republic of Brazil, DISC 04/15/24 2.063+ 7,650,000 6,650 Federal Republic of Brazil, PAR 04/15/24 6.000++ 5,120,500 63,685,047 BULGARIA--3.22% 1,440 Republic of Bulgaria 01/15/15 8.250 1,648,800 8,000 Republic of Bulgaria, Series A 07/28/24 2.000+ 7,950,000 9,598,800 CHILE--0.34% 1,000 Republic of Chile 01/15/13 5.500 1,005,608 CHINA--0.80% 2,485 People's Republic of China 10/29/13 4.750 2,381,086 COLOMBIA--4.91% 8,318 Republic of Colombia 04/09/11 9.750 9,233,261 5,400 Republic of Colombia 01/28/33 10.375 5,400,000 14,633,261
7
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------------------------------------------------------------------------------------------------- FOREIGN DEBT SECURITIES--(CONTINUED) ECUADOR--2.16% $ 5,660 Republic of Ecuador 08/15/30 7.000%++ $ 3,947,850 2,800 Republic of Ecuador, 144A 11/15/12 12.000 2,492,000 6,439,850 EL SALVADOR--0.30% 830 Republic of El Salvador, 144A 01/24/23 7.750 900,550 INDONESIA--0.77% 3,000 Republic of Indonesia Loan Participation (Deutsche Bank AG, Singapore Branch) (1)(3) 12/14/19 2.125+ 2,310,000 IVORY COAST--0.34% 5,700 Republic of Ivory Coast (3) 03/29/18 2.000+ 1,040,250 MALAYSIA--3.17% 4,784 Petroliam Nasional Berhad, 144A 10/15/26 7.625 5,188,228 3,800 Petroliam Nasional Berhad 05/22/22 7.875 4,259,057 9,447,285 MEXICO--12.59% 3,170 Conproca S.A. de C.V. 06/16/10 12.000 4,025,900 820 PEMEX Finance Ltd. 05/15/07 8.020 861,000 1,100 PEMEX Finance Ltd. 08/15/07 10.610 1,466,869 3,000 PEMEX Finance Ltd., 144A (3)(5) 11/15/18 9.150 3,582,669 2,500 PEMEX Project Funding Master Trust 02/01/22 8.625 2,662,500 1,250 Petroleos Mexicanos 03/30/18 9.250 1,437,500 3,718 United Mexican States 04/15/14 5.875 3,606,460 3,317 United Mexican States 04/08/33 7.500 3,283,830 14,535 United Mexican States 08/15/31 8.300 15,625,125 800 United Mexican States 02/17/09 10.375 982,000 37,533,853 NETHERLANDS--1.42% 781 ING Bank NV 05/31/14 8.476 397,859 1,115 ING Bank NV 05/31/13 8.511 617,247 1,373 ING Bank NV 05/31/12 8.545 826,258 1,754 ING Bank NV 05/31/11 8.550 1,148,721 1,093 ING Bank NV 05/31/10 8.571 778,637 606 ING Bank NV 05/31/09 8.597 469,574 - ------------------------------------------------------------------------------------------------------- 4,238,296 - -------------------------------------------------------------------------------------------------------
8
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------------------------------------------------------------------------------------------------- FOREIGN DEBT SECURITIES--(CONCLUDED) PANAMA--2.00% $ 2,800 Republic of Panama 01/16/23 9.375% $ 2,926,000 3,484 Republic of Panama, PDI 07/17/16 2.000+ 3,031,426 5,957,426 PERU--1.78% 890 Republic of Peru 05/03/16 8.375 843,275 5,330 Republic of Peru, FLIRB 03/07/17 4.500++ 4,477,200 5,320,475 PHILIPPINES--1.35% 3,935 Republic of Philippines 01/15/19 9.875 4,038,294 POLAND--2.39% PLN11,000 Republic of Poland 10/24/13 5.000 2,332,376 $ 2,000 Republic of Poland 01/15/14 5.250 1,980,000 PLN11,940 Republic of Poland 06/24/08 5.750 2,805,015 7,117,391 QATAR--2.15% $ 4,722 State of Qatar 06/15/30 9.750 6,398,310 ROMANIA--1.36% ECU 2,900 Government of Romania 05/08/12 8.500 4,045,523 RUSSIA--19.44% $ 7,230 Gaz Capital S.A. 04/28/34 8.625 7,230,000 31,494 Russian Federation, 144A 03/31/30 5.000++ 28,856,001 14,064 Russian Federation, 144A 03/31/10 8.250 15,277,035 5,810 Russian Federation, 144A 06/26/07 10.000 6,608,875 57,971,911 SOUTH AFRICA--2.28% 3,500 Republic of South Africa 04/25/12 7.375 3,841,250 2,500 Republic of South Africa 05/19/09 9.125 2,943,750 6,785,000 URUGUAY--0.25% 1,141 Republic of Uruguay 01/15/33 7.875 753,079 VENEZUELA--3.75% 1,746 Republic of Venezuela 08/07/10 5.375 1,357,515 11,280 Republic of Venezuela 03/31/20 6.750 9,813,600 11,171,115 - ------------------------------------------------------------------------------------------------------- Total Foreign Debt Securities (cost--$273,276,013) 286,649,890 - -------------------------------------------------------------------------------------------------------
9
NUMBER OF RIGHTS (000) VALUE - ------------------------------------------------------------------------------------------------------- RIGHTS--0.03% MEXICO--0.03% 1,885 United Mexican States Value Recovery Rights Series B 6/30/04 (4) $ 8,482 1,885 United Mexican States Value Recovery Rights Series C 6/30/05 (4) 32,987 1,885 United Mexican States Value Recovery Rights Series D 6/30/06 (4) 23,563 1,885 United Mexican States Value Recovery Rights Series E 6/30/07 (4) 14,138 79,170 VENEZUELA--0.00% 27 Venezuela Oil Indexed Payment Obligations, Expiration Date 4/15/20 (4) -- Total Rights (cost--$0) 79,170 NUMBER OF SHARES INTEREST (000) RATE - ------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT--1.10%** UNITED STATES--1.10% 3,281 UBS Supplementary Trust U.S. Cash Management Prime Fund (cost--$3,281,433) 1.089%* 3,281,433 Total Investments (cost--$276,557,446)--97.26% 290,010,493 Other assets in excess of liabilities--2.74% 8,173,480 Net Assets--100.00% $ 298,183,973
Note: The Portfolio of Investments is listed by the issuer's country of origin. + Reflects rate at April 30, 2004 on variable rate instruments. ++ Reflects rate at April 30, 2004 on step coupon rate instruments. * Interest rate reflects yield at April 30, 2004. ** Security is issued by a fund that is advised by an affiliate of UBS Global Asset Management (US) Inc., Global High Income Dollar Fund Inc.'s advisor. (1) Participation interest was acquired through the financial institution indicated parenthetically. (2) Bond interest in default. (3) Illiquid securities represents a value of $6,932,919 or 2.33% of net assets. (4) Rights do not currently accrue income. Quarterly income, if any, will vary based on several factors including oil exports, prices, and inflation. (5) Represents a restricted security. C Front-Load Interest Reduction with Capitalized Interest Bond. DCB Debt Conversion Bond DISC Discount Bond ECU Euro FLIRB Front-Loaded Interest Reduction Bond PAR Par Bond PDI Past Due Interest Bond PLN Poland Zloty 144A Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration, normally to qualified buyers. At April 30, 2004, the value of these securities amounted to $67,760,958 or 22.72% of net assets. 10 FUTURES CONTRACTS
UNREALIZED NUMBER OF IN EXPIRATION APPRECIATION/ CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATES (DEPRECIATION) - --------------------------------------------------------------------------------------------- 295 U.S. Treasury Note 10 Year Futures $ 32,597,500 June 2004 $ (932,938) CONTRACTS TO DELIVER 149 U.S. Treasury Bond 10 Year Futures 15,956,969 June 2004 793,741 - --------------------------------------------------------------------------------------------- $ (139,197) - ---------------------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION/ DELIVER EXCHANGE FOR DATES (DEPRECIATION) - --------------------------------------------------------------------------------------- Euro Dollar 13,150,000 USD 16,251,871 05/06/04 $ 508,925 Euro Dollar 11,400,000 USD 13,463,400 08/06/04 (152,143) United States Dollar 15,666,598 EUR 13,150,000 05/06/04 76,348 United States Dollar 7,366,581 THB 288,733,145 07/29/04 (151,974) - --------------------------------------------------------------------------------------- $ 281,156 - ---------------------------------------------------------------------------------------
Currency Type Abbreviations: EUR Euro THB Thailand Baht USD United States Dollar ILLIQUID RESTRICTED SECURITY
ACQUISITION COST MARKET VALUE ACQUISITION ACQUISITION PERCENTAGE MARKET PERCENT OF SECURITY DATE COST OF NET ASSETS VALUE NET ASSETS - -------------------------------------------------------------------------------------------- PEMEX Finance Ltd., 144A 12/04/98 $ 2,999,270 1.01% $ 3,582,669 1.20%
INVESTMENTS BY TYPE OF ISSUER
PERCENTAGE OF NET ASSETS ------------------------------ LONG-TERM OTHER INVESTMENTS - -------------------------------------------------------------------------------------------- Government and other public issuers 81.29% -- Oil/Gas 6.98 -- Financial Services 3.40 -- Industrials 2.83 -- Minerals 1.63 -- Rights -- 0.03% Mutual Funds -- 1.10 - -------------------------------------------------------------------------------------------- 96.13% 1.13% - --------------------------------------------------------------------------------------------
See accompanying notes to financial statements 11 GLOBAL HIGH INCOME DOLLAR FUND INC. Statement of Assets and Liabilities -- April 30, 2004 (unaudited) ASSETS: Investments in securities of unaffiliated issuers, at value (cost--$273,276,013) $ 286,729,060 Investments in securities of a related entity, at value (cost--$3,281,433) 3,281,433 Cash 5,156,092 Foreign currency, at value (cost--$53) 52 Cash collateral for futures contracts 1,067,351 Interest receivable 3,976,721 Receivable for investments sold 1,387,976 Unrealized appreciation on forward foreign currency contracts 663,894 Variation margin receivable 96,797 Other assets 27,373 Total assets 302,386,749 - ------------------------------------------------------------------------------------------------- LIABILITIES: Payable for investments purchased 2,910,715 Payable to investment advisor and administrator 657,713 Unrealized depreciation on forward foreign currency contracts 382,738 Variation margin payable 74,500 Accrued expenses and other liabilities 177,110 Total liabilities 4,202,776 - ------------------------------------------------------------------------------------------------- NET ASSETS: Capital stock--$0.001 par value; 100,000,000 shares authorized; 19,439,667 shares issued and outstanding 268,246,555 Distributions in excess of net investment income (9,650,763) Accumulated net realized gain from investment transactions 26,009,843 Net unrealized appreciation of investments, futures and other assets and liabilities denominated in foreign currencies 13,578,338 Net assets $ 298,183,973 Net asset value per share $ 15.34 - -------------------------------------------------------------------------------------------------
See accompanying notes to financial statements 12 GLOBAL HIGH INCOME DOLLAR FUND INC. Statement of Operations
FOR THE SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED) - ------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest income (includes $21,239 from a related entity) $ 10,943,897 Securities lending income 154 10,944,051 - ------------------------------------------------------------------------------------------------- EXPENSES: Investment advisory and administration fees 1,960,669 Custody and accounting fees 125,483 Reports and notices to shareholders 39,361 Professional fees 29,964 Directors' fees 8,432 Transfer agency fees 7,370 Other expenses 31,544 2,202,823 - ------------------------------------------------------------------------------------------------- Net investment income 8,741,228 - ------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES: NET REALIZED GAIN (LOSS) FROM: Investment transactions 25,880,257 Foreign currency transactions (530,091) Futures 297,538 NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION OF: Investments (28,724,526) Futures (82,838) Other assets, liabilities and forward foreign currency contracts 404,786 Net realized and unrealized gains (losses) from investment activities (2,754,874) - ------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 5,986,354 - -------------------------------------------------------------------------------------------------
See accompanying notes to financial statements 13 GLOBAL HIGH INCOME DOLLAR FUND INC. Statement of Changes in Net Assets
FOR THE SIX MONTHS ENDED FOR THE APRIL 30, 2004 YEAR ENDED (UNAUDITED) OCTOBER 31, 2003 - ------------------------------------------------------------------------------------------ FROM OPERATIONS: Net investment income $ 8,741,228 $ 19,877,411 Net realized gain from investment transactions 25,880,257 12,426,980 Net realized gain (loss) from futures and foreign currency transactions (232,553) 2,143,359 Net change in unrealized appreciation/(depreciation) of: Investments (28,724,526) 33,037,627 Futures (82,838) (56,359) Other assets, liabilities and forward foreign currency contracts 404,786 (144,666) - ------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 5,986,354 67,284,352 - ------------------------------------------------------------------------------------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (17,318,799)(1) (22,097,218) Net realized gains -- (10,316,523) Return of capital -- (322,658) Total dividends and distributions to shareholders (17,318,799) (32,736,399) Net increase (decrease) in net assets (11,332,445) 34,547,953 - ------------------------------------------------------------------------------------------ NET ASSETS: Beginning of period 309,516,418 274,968,465 - ------------------------------------------------------------------------------------------ End of period $ 298,183,973 $ 309,516,418 - ------------------------------------------------------------------------------------------
(1) The actual sources of the Fund's fiscal year 2004 dividends/distributions may be net investment income, net realized capital gains, return of capital or a combination of the foregoing and may be subject to retroactive recharacterization at the end of the Fund's fiscal year based on tax regulations. Shareholders will be informed of the tax characteristics of dividends/distributions after the close of the 2004 fiscal year. See accompanying notes to financial statements 14 GLOBAL HIGH INCOME DOLLAR FUND INC. Notes to Financial Statements (unaudited) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Global High Income Dollar Fund Inc. (the "Fund") was incorporated in Maryland on February 23, 1993 and is registered with the Securities and Exchange Commission as a closed-end, non-diversified management investment company. The Fund's primary investment objective is to achieve a high level of current income. As a secondary objective the Fund seeks capital appreciation, to the extent consistent with it's primary objective. In the normal course of business the Fund enters into contracts that contain a variety of representations that provide general indemnification. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires the Fund's management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies: VALUATION OF INVESTMENTS--The Fund calculates its net asset value based on the current market value, where available, for its portfolio securities. The Fund normally obtains market values for its securities from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, current market quotations or valuations from computerized "matrix" systems that derive values based on comparable securities. A matrix system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities. Securities traded in the over-the-counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq") normally are valued at the NASDAQ Official Closing Price. Other OTC securities are valued at the last bid price available on the valuation date prior to valuation. Securities which are listed on U.S. and foreign stock exchanges normally are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities are traded on more than one exchange, the securities are valued on the exchange designated as the primary market by UBS Global Asset Management (US) Inc. ("UBS Global AM"), the investment advisor and administrator of the Fund. UBS Global AM is an indirect wholly owned asset management subsidiary of UBS AG, an internationally diversified organization with headquarters in Zurich, Switzerland and operations in many areas of the financial services industry. If a market value is not available from an independent pricing source for a particular security, that security is valued at fair value as determined in good faith by or under the direction of the Fund's board of directors (the "Board"). All investments quoted in foreign currencies will be valued weekly in U.S. dollars on the basis of the foreign currency exchange rates. 15 Foreign currency exchange rates are generally determined prior to the close of the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value of foreign investments and such exchange rates occur between the time at which they are determined and the close of the NYSE, which will not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities or currency exchange rates occur during such time periods, the securities will be valued at their fair value as determined in good faith by or under the direction of the Board. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are recorded on the trade date. Realized gains and losses from investment and foreign exchange transactions are calculated using the identified cost method. Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments. FOREIGN CURRENCY TRANSLATION--The books and records of the Fund are maintained in U.S. dollars using the WM/Reuters closing spot rates as of 4:00 pm London time. For purposes of calculating the U.S. dollar equivalent value of a non-U.S. dollar denominated obligation, foreign currency amounts are translated into U.S. dollars on the following basis: (1) market value of investment securities and other assets and liabilities--at the exchange rates prevailing at the end of the Fund's fiscal period; and (2) purchases and sales of investment securities and income and expenses at the rates of exchange prevailing on the respective dates of such transactions. Although the net assets and the market value of the Fund's portfolio are presented at the foreign exchange rates at the end of the Fund's fiscal period, the Fund does not generally isolate the effect of fluctuations in foreign exchange rates from the effect of the changes in market prices of securities. However, the Fund does isolate the effect of fluctuations in foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-denominated securities pursuant to U.S. federal income tax regulations. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reduction of ordinary income in accordance with U.S. federal income tax regulations. FORWARD FOREIGN CURRENCY CONTRACTS--The Fund may enter into forward foreign currency exchange contracts ("forward contracts") in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund may also use forward contracts to enhance income. The Fund has no specific limitation on the percentage of assets which may be committed to such contracts. The Fund may enter into forward contracts or maintain a net exposure to forward contracts only if (1) the consummation of the contracts would not obligate the Fund to deliver an amount of foreign currency in excess of the value of the position being hedged by such contracts or (2) the Fund identifies cash or liquid securities in an amount not less than the value of its total assets committed to the consummation of the forward contracts and not covered as provided in (1) above, as marked-to-market daily. 16 Risks may arise upon entering into forward contracts from the potential inability of counterparties to meet the terms of their forward contracts and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. Fluctuations in the value of forward contracts are recorded for book purposes as unrealized gains or losses by the Fund. Realized gains and losses include net gains and losses recognized by the Fund on contracts which have been sold or matured. FUTURES CONTRACTS--The Fund may use financial futures contracts for hedging purposes and to adjust exposure to U.S. and foreign fixed income markets in connection with a reallocation of the Fund's assets or to manage the average duration of the Fund. However, imperfect correlations between futures contracts and the related securities or markets, or market disruptions, do not normally permit full control of these risks at all times. Using financial futures contracts involves various market risks. The maximum amount at risk from the purchase of a futures contract is the contract value. Upon entering into a financial futures contract, the Fund is required to pledge to a broker an amount of cash and/or liquid securities equal to a certain percentage of the contract amount. This amount is known as the "initial margin". Subsequent payments, known as "variation margin," are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying financial futures contracts. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized gain or loss on futures until the financial futures contract is closed, at which time the net gain or loss is reclassified to realized gain or loss on futures. DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital is determined in accordance with U.S. federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. CONCENTRATION OF RISK Investing in securities of foreign issuers and currency transactions may involve certain considerations and risks not typically associated with investments in the United States. These risks include revaluation of currencies, adverse fluctuations in foreign currency values and possible adverse political, social and economic developments, including those particular to a specific industry, country or region, which could cause the securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities. These risks are greater with respect to securities of issuers located in emerging market countries in which the Fund invests. The ability of the issuers of debt securities held by the Fund to meet their obligations may be affected by economic and political developments particular to a specific industry, country or region. 17 INVESTMENT ADVISOR AND ADMINISTRATOR AND OTHER TRANSACTIONS WITH RELATED ENTITIES The Board has approved an Investment Advisory and Administration Contract ("Advisory Contract") with UBS Global AM, under which UBS Global AM serves as investment advisor and administrator of the Fund. In accordance with the Advisory Contract, the Fund pays UBS Global AM an investment advisory and administration fee, which is accrued weekly and paid monthly, at the annual rate of 1.25% of the Fund's average weekly net assets. The Fund invests in shares of the UBS Supplementary Trust U.S. Cash Management Prime Fund ("Supplementary Trust"). Supplementary Trust is a business trust managed by UBS Global Asset Management (Americas) Inc., an affiliate of UBS Global AM. The Fund pays no management fees to Supplementary Trust. Distributions from the Supplementary Trust are reflected as interest income on the statement of operations. Amounts relating to those investments at April 30, 2004 and for the period ended are summarized as follows:
% OF SALES INTEREST NET FUND PURCHASES PROCEEDS INCOME VALUE ASSETS - ----------------------------------------------------------------------------------------- UBS Supplementary Trust U.S. Cash Management Prime Fund $ 58,330,350 $ 55,048,917 $ 21,239 $ 3,281,433 1.1%
SECURITIES LENDING The Fund may lend securities up to 33 1/3% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, cash equivalents or U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. The Fund will regain ownership of loaned securities to exercise certain beneficial rights; however, the Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives compensation for lending its securities from interest or dividends earned on the cash, cash equivalents or U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. UBS Securities LLC, an indirect wholly owned subsidiary of UBS AG, and other affiliated broker-dealers have been approved as borrowers under the Fund's securities lending program. At April 30, 2004, the Fund did not have any securities on loan. For the six months ended April 30, 2004, the Fund earned $154 for lending its securities and UBS Securities LLC earned $51 in compensation as the Fund's lending agent. At April 30, 2004, the Fund owed UBS Securities LLC $15 in compensation as the Fund's lending agent. 18 CAPITAL STOCK There are 100,000,000 shares of $0.001 par value common stock authorized and 19,439,667 shares outstanding at April 30, 2004. For the six months ended April 30, 2004 and for the year ended October 31, 2003, the Fund did not repurchase any shares of common stock. For the period September 17, 1998 (commencement of repurchase program) through February 28, 2001, the Fund repurchased 3,297,000 shares of common stock at an average market price per share of $11.68 and a weighted average discount from net asset value of 14.88%. As of April 30, 2004, paid-in-capital has been reduced by the cost of $38,698,693 of capital stock repurchased. FEDERAL TAX STATUS For federal income tax purposes, the cost of securities owned at April 30, 2004, was substantially the same as the cost of securities for financial statement purposes. At April 30, 2004, the components of net unrealized appreciation of investments at April 30, 2004 were as follows: Gross appreciation (investments having an excess of value over cost) $ 20,361,301 Gross depreciation (investments having an excess of cost over value) (6,908,254) Net unrealized appreciation of investments $ 13,453,047
For the six months ended April 30, 2004, aggregate purchases and sales of portfolio securities, excluding short-term securities, were $202,192,487 and $190,304,027, respectively. The Fund intends to distribute substantially all of its taxable income and to comply with the other requirements of the Internal Revenue Code applicable to regulated investment companies. Accordingly, no provision for federal income taxes is required. In addition, by distributing during each calendar year, substantially all of its net investment income, realized capital gains and certain other amounts, if any, the Fund intends not to be subject to a federal excise tax. The tax character of distributions paid during the fiscal year ended October 31, 2003 were as follows:
DISTRIBUTIONS PAID FROM: 2003 - ------------------------------------------------------------------------------------ Net investment income $ 24,240,920 Net realized gains 8,172,821 Return of capital 322,658 - ------------------------------------------------------------------------------------ $ 32,736,399 - ------------------------------------------------------------------------------------
The tax character of distributions paid and the components of accumulated earnings (deficit) on a tax basis for the current fiscal year will be calculated after the Fund's fiscal year ending October 31, 2004. 19 GLOBAL HIGH INCOME DOLLAR FUND INC. Financial Highlights Selected data for a share of common stock outstanding thoughout each period is presented below:
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED OCTOBER 31, APRIL 30, 2004 ----------------------------------------------------------------------- (UNAUDITED) 2003 2002+ 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 15.92 $ 14.14 $ 14.16 $ 14.42 $ 13.66 $ 13.02 Net investment income 0.45 1.02 1.04 1.24 1.48 1.10 Net realized and unrealized gains (losses) from investment and foreign currency transactions (0.14) 2.44 0.52 0.10 0.71 0.78 Net increase from investment operations 0.31 3.46 1.56 1.34 2.19 1.88 Dividends from net investment income (0.89)(2) (1.13) (1.31) (1.15) (1.48) (1.10) Distributions from net realized gains from investment transactions -- (0.53) -- -- -- (0.30) Distributions from paid-in-capital -- (0.02) (0.27) (0.46) -- -- Distributions in excess of net investment income -- -- -- -- (0.09) -- Total dividends and distributions to shareholders (0.89) (1.68) (1.58) (1.61) (1.57) (1.40) Net increase in net asset value resulting from repurchase of common stock -- -- -- 0.01 0.14 0.16 NET ASSET VALUE, END OF PERIOD $ 15.34 $ 15.92 $ 14.14 $ 14.16 $ 14.42 $ 13.66 MARKET VALUE, END OF PERIOD $ 16.26 $ 17.07 $ 13.87 $ 12.98 $ 12.63 $ 11.50 TOTAL INVESTMENT RETURN(1) 0.15% 36.52% 19.38% 15.80% 24.55% 13.23% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 298,184 $ 309,516 $ 274,968 $ 275,205 $ 281,955 $ 284,266 Expenses to average net assets 1.40%* 1.43% 1.43% 1.41% 1.39% 1.42% Net investment income to average net assets 5.56%* 6.66% 7.23% 8.46% 10.12% 8.27% Portfolio turnover 64% 53% 57% 51% 43% 33%
(1) Total investment return is calculated assuming a purchase of common stock at the current market price on the first day of each period reported and a sale at the current market price on the last day of each period reported, and assuming reinvestment of dividends and other distributions, if any, at prices obtained under the Fund's Dividend Reinvestment Plan. Total investment return does not reflect brokerage commissions or the deduction of taxes that a shareholder would pay on Fund dividends/distributions. Total investment return for periods of less than one year has not been annualized. (2) The actual sources of the Fund's fiscal year 2004 dividends/distributions may be net investment income, net realized capital gains, return of capital or a combination of the foregoing and may be subject to retroactive recharacterization at the end of the Fund's fiscal year based on tax regulations. Shareholders will be informed of the tax characteristics of dividends/distributions after the close of the 2004 fiscal year. + As required, effective as of November 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide, Audits of Investment Companies, and began amortizing premium on debt securities for financial statement reporting purposes only. The effect of this change for the year ended October 31, 2002 was to decrease net investment income per share by $0.02, increase net realized and unrealized gains from investment activities per share by $0.02, and decrease the ratio of net investment income to average net assets from 7.35% to 7.23%. Per share ratios and supplemental data for years prior to November 1, 2001 have not been restated to reflect this change in presentation. * Annualized. 20 GLOBAL HIGH INCOME DOLLAR FUND INC. General Information (unaudited) THE FUND Global High Income Dollar Fund Inc. (the "Fund") is a non-diversified, closed-end management investment company whose shares trade on the New York Stock Exchange ("NYSE"). The Fund's primary investment objective is to achieve a high level of current income. As a secondary objective, the Fund seeks capital appreciation to the extent consistent with its primary objective. The Fund's investment advisor and administrator is UBS Global Asset Management (US) Inc. ("UBS Global AM"), an indirect wholly owned asset management subsidiary of UBS AG, which had over $55.9 billion in assets under management as of March 31, 2004. SHAREHOLDER INFORMATION The Fund's NYSE trading symbol is "GHI." Comparative net asset value and market price information about the fund is published weekly in THE WALL STREET JOURNAL, THE NEW YORK TIMES AND BARRON'S, as well as in numerous other publications. An annual meeting of shareholders of the Fund was held on February 19, 2004. At the meeting, Margo N. Alexander, Richard Q. Armstrong, David J. Beaubien, Richard R. Burt, Meyer Feldberg, Carl W. Schafer, Brian M. Storms and William D. White were elected to serve as directors until the next annual meeting of shareholders, or until their successors are elected and qualified or until they resign or are otherwise removed. The shares were voted as indicated below:
SHARES SHARES WITHHOLD TO ELECT EIGHT MEMBERS OF ITS BOARD OF DIRECTORS: VOTED FOR AUTHORITY - ------------------------------------------------------------------------------------- Margo N. Alexander 18,197,253.5492 204,952.7554 Richard Q. Armstrong 18,202,853.5492 199,352.7554 David J. Beaubien 18,192,914.5492 209,291.7554 Richard R. Burt 18,200,934.5492 201,271.7554 Meyer Feldberg 18,196,133.5492 206,072.7554 Carl W. Schafer 18,190,122.5492 212,083.7554 Brian M. Storms 18,213,627.5492 188,578.7554 William D. White 18,198,992.5492 203,213.7554
Mr. Storms has since resigned from the Fund's Board. To the best of the Fund's knowledge, there were no "broker non-votes." (A "broker non-vote" results when a broker has the authority to vote unvoted underlying shares.) PROXY VOTING POLICIES AND PROCEDURES You may obtain a description of the Fund's proxy voting policies and procedures, without charge, upon request by contacting the Fund directly at 1-800-647-1568, online on the Fund's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov). 21 DIVIDEND REINVESTMENT PLAN The Fund's Board has established a Dividend Reinvestment Plan (the "Plan") under which all shareholders whose shares are registered in their own names, or in the name of UBS Financial Services Inc. or its nominee, will have all dividends and other distributions on their shares of common stock automatically reinvested in additional shares, unless such shareholders elect to receive cash. Shareholders who elect to hold their shares in the name of another broker or nominee should contact such broker or nominee to determine whether, or how, they may participate in the Plan. The ability of such shareholders to participate in the Plan may change if their shares are transferred into the name of another broker or nominee. A shareholder may elect not to participate in the Plan or may terminate participation in the Plan at any time without penalty, and shareholders who have previously terminated participation in the Plan may rejoin it at any time. Changes in elections must be made in writing to the Fund's transfer agent and should include the shareholder's name and address as they appear on that share certificate or in the transfer agent's records. An election to terminate participation in the Plan, until such election is changed, will be deemed an election by a shareholder to take all subsequent distributions in cash. An election will be effective only for distributions declared and having a record date at least ten days after the date on which the election is received. Additional shares of common stock acquired under the Plan will be purchased in the open market, on the NYSE or otherwise, at prices that may be higher or lower than the net asset value per share at the time of the purchase. Investors should consider whether continued participation in the dividend reinvestment plan is appropriate for them when the Fund's market price exceeds its net asset value; a portion of a dividend may represent a return of capital, which would be reinvested in the Fund at a premium to net asset value. The number of shares of common stock purchased with each dividend will be equal to the result obtained by dividing the amount of the dividend payable to a particular shareholder by the average price per share (including applicable brokerage commissions) that the transfer agent was able to obtain in the open market. The Fund will not issue any new shares in connection with the Plan. There currently is no charge to participants for reinvesting dividends or other distributions. The transfer agents fees for handling the reinvestment of distributions are paid by the Fund. However, each participant pays a pro rata share of brokerage commissions incurred with respect to the transfer agent's open market purchases of common stock in connection with the reinvestment of distributions. The automatic reinvestment of dividends and other distributions in shares of common stock does not relieve participants of any income tax that may be payable on such distributions. Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund reserves the right to amend or terminate the Plan with respect to any 22 dividend or other distribution if notice of the change is sent to Plan participants at least 30 days before the record date for such distribution. The Plan also may be amended or terminated by the transfer agent by at least 30 days' written notice to all Plan participants. Additional information regarding the Plan may be obtained from, and all correspondence concerning the Plan should be directed to, the transfer agent at PFPC Inc., P.O. Box 43027. Providence, Rhode Island 02940-3027. For further information regarding the Plan, you may also contact the transfer agent directly at 1-800-331-1710. DISTRIBUTION POLICY The Fund's Board adopted a managed distribution policy in December 1999, which means that the Fund will make regular monthly distributions at an annualized rate equal to 11% of the Fund's net asset value, as determined as of the last trading day during the first week of that month (usually a Friday unless the NYSE is closed that Friday). Prior to December 20, 1999, the Fund's distributions varied based on the Fund's net investment income and realized capital gains or losses. To the extent that the Fund's taxable income in any fiscal year exceeds the aggregate amount distributed based on a fixed percentage of its net asset value, the Fund would distribute that excess near the end of the fiscal year. If the aggregate amount distributed by the Fund (based on a fixed percentage of its net asset value) exceeds its taxable income, the amount of that excess would constitute a return of capital for tax purposes. Monthly distributions based on a fixed percentage of the Fund's net asset value may require the Fund to make multiple distributions of long-term capital gains during a single fiscal year. The Fund has received exemptive relief from the Securities and Exchange Commission that enables it to do so. The Fund's Board will annually reassess the annualized percentage of net assets at which the Fund's monthly distributions will be made. 23 (This page intentionally left blank). DIRECTORS Richard Q. Armstrong INTERIM CHAIRMAN Margo N. Alexander David J. Beaubien Richard R. Burt Meyer Feldberg Carl W. Schafer William D. White PRINCIPAL OFFICERS Joseph A. Varnas PRESIDENT Keith A. Weller VICE PRESIDENT AND ASSISTANT SECRETARY Paul H. Schubert VICE PRESIDENT AND TREASURER W. Douglas Beck VICE PRESIDENT INVESTMENT ADVISOR AND ADMINISTRATOR UBS Global Asset Management (US) Inc. 51 West 52nd Street New York, New York 10019-6114 NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(c) OF THE INVESTMENT COMPANY ACT OF 1940 THAT FROM TIME TO TIME THE FUND MAY PURCHASE SHARES OF ITS COMMON STOCK IN THE OPEN MARKET AT MARKET PRICES. THIS REPORT IS SENT TO THE SHAREHOLDERS OF THE FUND FOR THEIR INFORMATION. IT IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR THE USE IN THE PURCHASE OR SALE OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN THIS REPORT. THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM THE RECORDS OF THE FUND WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION THEREON. (C)2004 UBS GLOBAL ASSET MANAGEMENT (US) INC. ALL RIGHTS RESERVED. [UBS LOGO] Presorted Standard US Postage PAID Smithtown, NY Permit 700 UBS GLOBAL ASSET MANAGEMENT (US) INC. 51 West 52nd Street New York, New York 10019 ITEM 2. CODE OF ETHICS. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 6. SCHEDULE OF INVESTMENTS Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant's Board has established a Nominating Committee. The Nominating Committee will consider nominees recommended by shareholders if a vacancy occurs among those board members who are not "interested persons" as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended. In order to recommend a nominee, a shareholder should send a letter to the chairperson of the Nominating Committee, Mr. Meyer Feldberg, care of the Secretary of the registrant at UBS Global Asset Management (US) Inc., 51 West 52nd Street, New York, New York 10019-6114, and indicate on the envelope "Nominating Committee." The shareholder's letter should state the nominee's name and should include the nominee's resume or curriculum vitae, and must be accompanied by a written consent of the individual to stand for election if nominated for the Board and to serve if elected by shareholders. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a) (1) Code of Ethics - Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. (a) (2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.CERT. (b) Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Global High Income Dollar Fund Inc. By: /s/ Joseph A. Varnas -------------------- Joseph A. Varnas President Date: July 6, 2004 ------------ Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Joseph A. Varnas -------------------- Joseph A. Varnas President Date: July 6, 2004 ------------ By: /s/ Paul H. Schubert -------------------- Paul H. Schubert Treasurer Date: July 6, 2004 ------------ EX-99.302CERT 2 a2138331zex-99_302cert.txt EX 99.302CERT Exhibit EX-99.CERT CERTIFICATIONS I, Joseph A. Varnas, President of Global High Income Dollar Fund Inc. certify that: 1. I have reviewed this report on Form N-CSR of Global High Income Dollar Fund Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Joseph A. Varnas -------------------- Joseph A. Varnas President Date: July 6, 2004 ------------ I, Paul H. Schubert, Treasurer of Global High Income Dollar Fund Inc., certify that: 1. I have reviewed this report on Form N-CSR of Global High Income Dollar Fund Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Paul H. Schubert -------------------- Paul H. Schubert Treasurer Date: July 6, 2004 ------------ EX-99.906CERT 3 a2138331zex-99_906cert.txt EX 99.906CERT Exhibit EX-99.906CERT Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) In connection with the attached report of Global High Income Dollar Fund Inc. (the "Registrant") on Form N-CSR (the "Report"), each of the undersigned officers of the Registrant does hereby certify that, to the best of such officer's knowledge: 1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented in the Report. Dated: July 6, 2004 ------------ By: /s/ Joseph A. Varnas -------------------- Joseph A. Varnas President Dated: July 6, 2004 ------------ By: /s/ Paul H. Schubert -------------------- Paul H. Schubert Treasurer This certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. -----END PRIVACY-ENHANCED MESSAGE-----