UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08025
---------------------------------
Global Income Fund, Inc.
--------------------------------------------------------------
(Exact name of registrant as specified in charter)
11 Hanover Square, New York, NY 10005
--------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Thomas B. Winmill, President
11 Hanover Square
New York, NY 10005
--------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-212-344-6310
----------------
Date of fiscal year end: 12/31/04
------------------
Date of reporting period: 1/1/04 - 06/30/04
---------------------------
Form N-CSRS is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policy making roles.
Item 1. Report to Shareholders
- --------------------------------------------------------------------------------
GLOBAL INCOME [Graphic]
FUND
================================================================================
SEMI-ANNUAL REPORT
June 30, 2004
American Stock
Exchange Symbol:
GIF
11 Hanover Square
New York, NY 10005
1-800-278-4353
www.globalincomefund.net
================================================================================
This report, including the financial statements herein, is transmitted to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund. This is not a prospectus,
circular or representation intended for use in the purchase of shares of the
Fund or any securities mentioned in this report. Pursuant to Section 23 of the
Investment Company Act of 1940, notice is hereby given that the Fund may in the
future purchase shares of its own common stock in the open market. These
purchases may be made from time to time, at such times and in such amounts as
may be deemed advantageous to the Fund, although nothing herein shall be
considered a commitment to purchase such shares.
================================================================================
- --------------------------------------------------------------------------------
American Stock
GLOBAL INCOME FUND Exchange Symbol: GIF
================================================================================
11 Hanover Square, New York, NY 10005
www.globalincomefund.net
July 20, 2004
Fellow Shareholders:
It is a pleasure to welcome our new shareholders who have made their
investment since our last Report. The primary objective of Global Income Fund,
Inc. is to provide for its shareholders a high level of income, with capital
appreciation as a secondary objective. The Fund pursues its investment
objectives by investing primarily in a global portfolio of investment grade
fixed income securities. The Fund normally invests at least 65% of its assets in
investment grade fixed income securities, and may allocate up to 35% of its
assets in below investment grade debt that is considered attractive. On June
30th, the Fund was 77% invested in investment grade fixed income securities, 6%
in investment grade preferred stocks, and the balance, 17%, in money market
securities. None of the Fund's assets were invested in below investment grade
debt. Of the investments held by the Fund on June 30th, approximately 44% were
invested in the United States, 39% in the Eurozone, and the balance, 17%, spread
over four other foreign countries. The Fund has paid dividends every year since
its founding in 1983, and paid two quarterly dividends in the first half of
2004.
7% Dividend Distribution Policy
The Fund has a managed quarterly distribution policy, which is intended to
provide shareholders with a relatively stable cash flow and reduce or eliminate
the Fund's market price discount to its net asset value per share. Under the
current policy, distributions of approximately 7% of the Fund's net asset value
per share on an annual basis are intended to be paid primarily from ordinary
income and any net capital gains, with the balance representing return of
capital. This policy is subject to regular review at the Board's quarterly
meetings and the amount of the distribution may vary depending on the Fund's net
asset value per share at the time of declaration. Although the distribution rate
may be further reduced reflecting low current yields, we continue to believe
shares of the Fund are a sound value and attractive for investors seeking a high
level of income, with capital appreciation as a secondary objective.
Completion of Successful Rights Offering
As announced previously, the Fund recently completed a successful rights
offering to holders of the Fund's common stock. Reflecting the attractiveness of
the offering, in the primary subscription and pursuant to the over-subscription
privilege approximately 5,117,000 shares were requested vs. 1,396,252 shares
offered. Pursuant to the terms of the offer, the Fund exercised its discretion
to authorize the issuance of up to an additional 349,063 shares in order to
satisfy at least partially over-subscription requests. Accordingly, the Fund
issued 1,745,315 additional shares of common stock at a price of $4.05 as a
result of the offering. Proceeds to the Fund after deduction of expenses were
approximately $7 million, increasing the Fund's net assets by about 25% to
approximately $34 million.
Market Report
On June 30th, the Federal Open Market Committee (FOMC) of the Federal
Reserve Bank raised the federal funds rate from 1% to 1.25%, the first increase
in the rate since June 2003 when the FOMC lowered the rate to 1%. Thus ended a
period of 16 rate cuts that started in January 2001 when federal funds stood at
6.5%. By some standards, the U.S. economy seems in better shape than it was a
year ago. Corporate earnings have greatly improved year-over-year, at a pace not
seen in the last 20 years and employment has improved. Yet, despite the increase
in corporate earnings, many companies appear cautious when it comes to hiring
full time employees and much of the new job growth is coming from part time
positions. In addition, overall consumer data suggest some hesitancy remains
about the acceptance of higher pricing in consumer goods. Personal consumption
statistics are positive, but consumer resistance to higher prices and the
addition of new suppliers to undercut current prices could slow the encouraging
pace of corporate earnings.
Against this economic backdrop, yields on 5 and 10 year Treasuries rose
from levels of 3.25% and 4.25%, respectively, at the start of the year to 3.77%
and 4.58%, respectively, at the end of June. It should be noted, however, that
during the period the highs were 4.10% and 4.87%, respectively, and the lows
were 2.64% and 3.68%, respectively, reflecting the fixed income markets'
heightened volatility. Over the last six months, the equity markets have also
struggled, with the Dow Jones Industrial Average, the S&P 500 Index, and the
Nasdaq Composite Index showing little headway over the period. The FOMC appears
to be seeking to raise interest rates to a level that allows for economic growth
with low inflation, but without economic disruption. In the last quarter of
2003 and the first quarter of 2004, consumer spending rose at a 3.5% pace, but
whether this pace will have continued in the quarter just ended and will over
the second half is difficult to predict. The stimulus from the prior year's
massive tax cuts may diminish and with higher interest rates the booming
mortgage and refinancing housing markets could contract. At the same time,
emerging internal and external political factors may have an influence,
including the U.S. deficit and presidential election, global terrorism, and
Middle Eastern conflicts.
Although fixed income investing can present challenges, we believe,
however, that the Fund's pursuit of its investment objectives by investing
primarily in a global portfolio of investment grade fixed income securities is
attractive for investors seeking a high level of income, with capital
appreciation as a secondary objective.
We appreciate your support and look forward to serving your investment
needs over the years ahead.
Sincerely,
/s/ Thomas B. Winmill /s/ Marion E. Morris
- ----------------------------- ------------------------------
Thomas B. Winmill Marion E. Morris
President Senior Vice President
Portfolio Manager
GLOBAL INCOME FUND, INC.
2
Schedule of Portfolio Investments - June 30, 2004 (Unaudited)
Par Value Market Value
- ---------------- ------------
DEBT SECURITIES (92.00%)
Australia (6.58%)
A$ 1,000,000 BHP Finance Ltd., 6.25% Notes, due 8/15/08 ................................. $ 697,807
$ 1,000,000 National Australia Bank, 8.60% Subordinated Notes, due 5/19/10 ............. 1,182,742
$ 300,000 Principal Financial Group, 8.20% Senior Notes, due 8/15/09 ................. 347,116
----------
2,227,665
----------
Canada (3.88%)
(euro) 1,000,000 Province of Quebec, 5.50% Notes, due 2/05/10 ............................... 1,311,481
----------
Denmark (3.83%)
(pound) 700,000 Deutsche Ausgleichsbank, 5.75% Euro Medium Term Notes, due 12/07/11 ........ 1,294,716
----------
France (3.70%)
(euro) 1,000,000 Elf Aquitaine 4.50% Senior Unsubordinated Notes, due 3/23/09 ............... 1,251,970
----------
Germany (13.38%)
(euro) 500,000 BMW Finance NV, 5% Medium Term Notes, due 8/06/18 .......................... 604,179
(pound)1,000,000 Dresdner Bank Aktiengesellschaft, 7.75% Subordinated Bonds, due 12/07/07 ... 1,912,466
(pound) 738,000 European Investment Bank, 5.50% Euro-Fungible Notes, due 12/07/11 .......... 1,345,811
(euro) 500,000 Phillips Electronics NV, 6.125% Senior Unsubordinated Notes, due 5/16/11 ... 666,363
----------
4,528,819
----------
Italy (1.75%)
(euro) 500,000 Enel-Societa Per Azioni, 4.75% Euro Medium Term Notes, due 6/12/18 ......... 593,811
----------
Japan (3.68%)
(euro) 1,000,000 Toyota Motor Credit Corp., 4.125% Euro Medium Term Notes, due 1/15/08 ...... 1,245,861
----------
Korea (1.47%)
$ 500,000 Korea Development Bank, 5.75% Notes, due 9/10/13 ........................... 498,650
----------
Netherlands (7.25%)
(euro) 1,000,000 Aegon N.V., 4.625% Euro Medium Term Notes, due 4/16/08 ..................... 1,254,992
(euro) 1,000,000 Rabobank Nederland, 4.25% Euro Medium Term Notes, due 4/22/14 .............. 1,199,248
----------
2,454,240
----------
Sweden (3.81%)
(euro) 1,000,000 Kingdom of Sweden, 5% Eurobonds, due 1/28/09 ............................... 1,288,606
----------
United Kingdom (5.20%)
$ 1,000,000 National Westminster Bank, 7.375% Subordinated Notes, due 10/01/09 ......... 1,133,982
(euro) 500,000 Tesco PLC, 4.75% Medium Term Notes, due 4/13/10 ............................ 627,409
----------
1,761,391
----------
See accompanying notes to financial statements. GLOBAL INCOME FUND, INC.
3
Schedule of Portfolio Investments - June 30, 2004 (Unaudited)
Par Value Market Value
- ---------------- ------------
United States (37.47%)
$ 1,065,000 Beneficial Corp., 7.16% Notes, due 9/01/23 ................................. $ 1,139,535
$ 500,000 CIT RV Trust 1998-A B 6.29% Subordinated Bonds, due 1/15/17 ................ 520,515
$ 250,000 Federal Farm Credit Bank, 4.73% Bonds, due 6/13/18 ......................... 232,899
$ 63,661 Freddie Mac REMIC 2687 Floater Certificates, due 2/15/33 ................... 63,612
$ 500,000 General Electric Capital Corp., 4.75% Global Medium Term Notes,
Series A, due 2/13/19 475,340
(euro) 1,000,000 General Electric Capital Corp., 5.125% Senior Unsubordinated Notes, due
3/04/09 .................................................................... 1,284,189
$ 5,000,000 U.S. Treasury Bill, due 7/29/04 ............................................ 4,995,820
$ 3,000,000 U.S. Treasury Notes, 2.25%, due 4/30/06 .................................... 2,980,431
$ 1,000,000 U.S. Treasury Inflation Index Notes, 1.875%, due 7/15/13 ................... 988,165
-----------
12,680,506
-----------
Total Debt Securities (cost: $31,256,854) ............................... 31,137,716
-----------
Shares
- ----------------
PREFERRED STOCKS (6.04%)
5,000 BAC Capital Trust II, 7.00% ................................................ 126,200
5,000 BAC Capital Trust III, 7.00% ............................................... 126,800
5,000 Corporate-Backed Trust Certificates, 6.00% ................................. 107,750
25,000 Corporate-Backed Trust Certificates, 8.20% ................................. 655,000
20,000 Disney (Walt) Company, 7.00% ............................................... 502,000
10,000 General Motors Corp., 7.25% ................................................ 246,800
5,000 SATURNS SM, 5.87% .......................................................... 106,250
6,900 Wells Fargo Capital Trust V, 7.00% ......................................... 173,535
-----------
Total Preferred Stocks (cost: $2,047,500) ............................... 2,044,335
-----------
Par Value
- ----------------
SHORT TERM INVESTMENTS (1.96%)
$ 664,118 Repurchase Agreement with State Street Bank & Trust, 0.10%,
due 7/01/04 (collateralized by U.S. Treasury Bonds) ........................ 664,118
-----------
Total Short Term Investments (cost: $664,118) ........................... 664,118
-----------
Total Investments (cost: $33,968,472)(100%) .......................... $33,846,169
===========
Note: Par value stated in currency indicated; market value
stated in U.S. dollars.
GLOBAL INCOME FUND, INC. See accompanying notes to financial statements.
4
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2004 (Unaudited)
ASSETS:
Investments at market value (cost: $33,968,472) (note 1) ..... $33,846,169
Interest receivable .......................................... 417,122
Other assets ................................................. 11,706
-----------
Total assets .............................................. 34,274,997
-----------
LIABILITIES:
Accrued expenses ............................................. 116,776
Accrued management fees ...................................... 11,752
-----------
Total liabilities ......................................... 128,528
-----------
NET ASSETS: (applicable to 7,352,761 shares outstanding:
20,000,000 shares of $.01 par value authorized) .............. $34,146,469
===========
NET ASSET VALUE PER SHARE
($34,146,469 / 7,352,761 shares outstanding) ................. $ 4.64
===========
At June 30, 2004, net assets consisted of:
Paid-in capital .............................................. $41,860,976
Accumulated net realized loss on investments, foreign
currencies and futures .................................... (7,592,165)
Net unrealized depreciation on investments and foreign
currencies ................................................ (122,342)
-----------
$34,146,469
===========
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2004 (Unaudited)
INVESTMENT INCOME:
Interest ..................................................... $ 552,695
Dividends .................................................... 67,669
-----------
Total investment income ................................... 620,364
-----------
EXPENSES:
Investment management (note 3) ............................... 96,111
Accounting and auditing (note 3) ............................. 47,522
Legal and compliance (note 3) ................................ 38,214
Directors .................................................... 21,750
Registration ................................................. 12,829
Custodian .................................................... 8,660
Printing ..................................................... 5,160
Transfer agent ............................................... 4,922
Other ........................................................ 12,831
-----------
Total operating expenses .................................. 247,999
Loan interest and fees (note 5) ........................... 1,284
-----------
Total expenses ............................................ 249,283
-----------
Net investment income .................................. 371,081
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain on investments and foreign currencies
(note 4) .................................................. 538,105
Unrealized depreciation on investments and foreign
currencies during the year ................................ (1,660,037)
-----------
Net realized and unrealized loss on investments and
foreign currencies ..................................... (1,121,932)
-----------
Net change in net assets resulting from operations ........ $ (750,851)
===========
See accompanying notes to financial statements. GLOBAL INCOME FUND, INC.
5
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 2004 (Unaudited) and Year Ended December 31,
2003
Six Months Year
Ended Ended
June 30, 2004 December 31,
(Unaudited) 2003
------------- ------------
OPERATIONS:
Net investment income ............................................................. $ 371,081 $ 984,022
Net realized gain on investments and foreign currencies ........................... 538,105 231,336
Unrealized appreciation (depreciation) on investments and foreign currencies ...... (1,660,037) 1,451,311
----------- -----------
Net change in net assets resulting from operations ............................. (750,851) 2,666,669
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders ($0.16 and $0.22 per share, respectively) ........... (892,033) (1,215,358)
Tax return of capital to shareholders ($0.00 and $0.14 per share, respectively) ... -- (767,761)
CAPITAL SHARE TRANSACTIONS:
Net proceeds received from rights offering (1,745,315 shares issued) (note 8) ..... 6,884,812 --
Reinvestment of distributions to shareholders (42,050 and 90,974
shares, respectively) (note 6) ................................................. 192,693 439,788
----------- -----------
Total change in net assets .................................................. 5,434,621 1,123,338
NET ASSETS:
Beginning of period ............................................................... 28,711,848 27,588,510
----------- -----------
End of period ..................................................................... $34,146,469 $28,711,848
=========== ===========
GLOBAL INCOME FUND, INC. See accompanying notes to financial statements.
6
Notes to Financial Statements (Unaudited)
(1) Global Income Fund, Inc., a Maryland corporation registered under the
Investment Company Act of 1940, as amended, is a non-diversified, closed-end
management investment company, whose shares are listed on the American Stock
Exchange. The Fund's primary and fundamental objective is to provide a high
level of income. The Fund's secondary, non-fundamental, investment objective is
capital appreciation. The Fund pursues its investment objectives by investing
primarily in a global portfolio of investment grade fixed income securities. The
Fund is subject to the risk of price fluctuations of the securities held in its
portfolio which is generally a function of the underlying credit ratings of an
issuer, currency denomination, duration, and yield of its securities, and
general economic and interest rate conditions. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. With respect to security valuation,
securities traded on a national securities exchange or the Nasdaq National
Market System ("NMS") are valued at the last reported sales price on the day the
valuations are made. Such securities that are not traded on a particular day and
securities traded in the over-the-counter market that are not on NMS are valued
at the mean between the current bid and asked prices. Certain of the securities
in which the Fund invests are priced through pricing services which may utilize
a matrix pricing system which takes into consideration factors such as yields,
prices, maturities, call features and ratings on comparable securities. Bonds
may be valued according to prices quoted by a dealer in bonds which offers
pricing services. If market quotations are not available or deemed reliable,
then such securities are valued as determined in good faith under the direction
of or pursuant to procedures established by the Fund's Board of Directors. Debt
obligations with remaining maturities of 60 days or less are valued at cost
adjusted for amortization of premiums and accretion of discounts. Securities
denominated in foreign currencies are translated into U.S. dollars at prevailing
exchange rates. Forward contracts are marked to market and the change in market
value is recorded by the Fund as an unrealized gain or loss. When a contract is
closed, the Fund records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed. The Fund could be exposed to risk if the counterparties are unable
to meet the terms of the contracts or if the value of the currency changes
unfavorably. Investment transactions are accounted for on the trade date (the
date the order to buy or sell is executed). Interest income is recorded on the
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities. Dividends and distributions to
shareholders are recorded on the ex-dividend date. In preparing financial
statements in conformity with accounting principles generally accepted in the
United States of America, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At December 31, 2003, the
Fund had an unused capital loss carryforward of approximately $8,130,200 of
which $1,189,000 expires in 2004, $214,000 in 2006, $3,977,000 in 2007,
$1,381,000 in 2008, and $1,369,200 in 2010. No capital gain will be distributed
until the capital loss carryforwards have been exhausted. Based on Federal
income tax cost of $33,968,472, gross unrealized appreciation and gross
unrealized depreciation were $334,104 and $456,407, respectively, at December
31, 2003. Distributions paid to shareholders during the year ended December 31,
2003 differ from net investment income and net gains (losses) from security,
foreign currency, and futures transactions as determined for financial reporting
purposes. These distributions are shown under "Distributions to Shareholders" in
the Statements of Changes in Net Assets.
(3) The Fund retains CEF Advisers, Inc. as its Investment Manager. Under the
terms of the Investment Management Agreement, the Investment Manager receives a
management fee, payable monthly, based on the average weekly net assets of the
Fund at the annual rate of 7/10 of 1% of the first $250 million, 5/8 of 1% from
$250 million to $500 million, and 1/2 of 1% over $500 million. This fee is
calculated by deter-
GLOBAL INCOME FUND, INC.
7
mining the average of net assets on each Friday of a month and applying the
applicable rate to such average for the number of days in the month. Certain
officers and directors of the Fund are officers and directors of the Investment
Manager. The Fund reimbursed the Investment Manager $29,769 for providing at
cost certain compliance services of $6,549 and accounting services of $23,220
for the six months ended June 30, 2004.
(4) The Fund has an arrangement with its custodian and transfer agent whereby
interest earned on uninvested cash balances was used to offset a portion of the
Fund's expenses. Purchases and sales of securities other than short term notes
aggregated $19,072,217 and $12,236,120, respectively, for the six months ended
June 30, 2004. A forward currency contract is an obligation to purchase or sell
a specific currency for an agreed-upon price at a future date. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the terms
of their contracts. The Fund had no forward currency contracts outstanding at
June 30, 2004. Realized gains and losses arising from exchange differences are
included in net realized gains on investments in the statement of operations.
(5) The Fund may borrow through a committed bank line of credit. At June 30,
2004, there was no balance outstanding and the interest rate was at the
borrower's option of (i) overnight federal funds or (ii) LIBOR (30, 60, 90
days), each as in effect from time to time, plus 0.75% per annum, calculated on
the basis of actual days elapsed for a 360-day year. For the six months ended
June 30, 2004, the weighted average interest rate was 1.78% based on the
balances outstanding during the period and the weighted average amount
outstanding was $151,802.
(6) The tax character of distributions paid to shareholders for the six months
ended June 30, 2004 and the year ended December 31, 2003 was follows:
June 30, December 31,
2004 2003
-------- ------------
Distributions paid from:
Ordinary income $892,033 $1,215,358
Return of capital -- 767,761
-------- ----------
$892,033 $1,983,119
======== ==========
A reclassification of ordinary income and return of capital is likely to occur
for the year ended December 31, 2004, although the exact amount is not estimated
at June 30, 2004.
(7) Regarding concentration of credit risk, investing in securities of foreign
issuers involves special risks which include changes in foreign exchange rates
and the possibility of future adverse political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign issuers and in foreign markets may be less liquid and their prices
more volatile than those of U.S. issuers and markets.
(8) At June 30, 2004 there were 7,352,761 shares of $.01 par value common stock
outstanding (20,000,000 shares authorized). The shares issued and resulting
increase in paid-in capital in connection with reinvestment of dividends from
net investment income during the six months ended June 30, 2004 and the year
ended December 31, 2003 were as follows:
Shares issued Increase in paid-in capital
------------- ---------------------------
2004 ............................. 42,050 $192,693
2003 ............................. 90,974 $439,788
During June 2004, the Fund issued 1,745,315 shares of common stock in connection
with a rights offering of the Fund's shares. Shareholders of record on May 21,
2004 were issued one non-transferable right for each share owned. The rights
entitled the shareholders to purchase one new share of common stock for every
four rights held. These shares were issued at a subscription price of $4.05. Net
proceeds to the Fund were $6,884,812 after deducting total estimated expenses as
of June 30, 2004 of $183,713. The net asset value per share of the Fund's common
shareholders was reduced by approximately $0.28 per share as a result of the
share issuance.
GLOBAL INCOME FUND, INC.
8
FINANCIAL HIGHLIGHTS
Six Months
Ended Six Months Year
June 30, Years Ended December 31, Ended Ended
2004 ------------------------------------- December 31, June 30,
(Unaudited) 2003 2002 2001 2000 1999 1999
----------- ------- ------- ------- ------- ------------ --------
PER SHARE DATA*
Net asset value at beginning of period .......... $ 5.16 $ 5.04 $ 5.44 $ 5.72 $ 5.77 $ 5.99 $ 6.93
------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income ........................ .05 .18 .28 .32 .42 .23 .55
Net realized and unrealized gain (loss) on
investments ............................... (.13) .30 (.18) (.04) .11 (.15) (.81)
------- ------- ------- ------- ------- ------- -------
Total from investment operations ....... (.08) .48 .10 .28 .53 .08 (.26)
------- ------- ------- ------- ------- ------- -------
Dilution from rights offering ................... (.28) -- -- -- -- -- --
Less distributions:
Distributions to shareholders ................ (.16) (.22) (.28) (.36) (.42) (.23) (.55)
Tax return of capital to shareholders ........ -- (.14) (.22) (.20) (.16) (.07) (.13)
------- ------- ------- ------- ------- ------- -------
Total distributions ....................... (.16) (.36) (.50) (.56) (.58) (.30) (.68)
------- ------- ------- ------- ------- ------- -------
Net asset value at end of period ................ $ 4.64 $ 5.16 $ 5.04 $ 5.44 $ 5.72 $ 5.77 $ 5.99
======= ======= ======= ======= ======= ======= =======
Per share market value at end of period ......... $ 4.18 $ 5.01 $ 4.60 $ 4.91 $ 4.69 $ 4.44 $ 5.19
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN ON NET ASSET
VALUE BASIS (a) .............................. (6.91)% 10.22% 0.04% 2.33% 9.05% 2.52% (2.23)%
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN ON MARKET VALUE BASIS (a) .......... (13.63)% 17.25% 3.60% 15.94% 19.75% (8.96)% (8.85)%
======= ======= ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) ..... $34,146 $28,712 $27,589 $29,110 $29,783 $29,060 $29,600
======= ======= ======= ======= ======= ======= =======
Ratio of expenses before loan interest,
commitment fees and nonrecurring expenses .... 1.76%** 1.61% 1.44% 1.72% 1.38% 1.48%** 1.46%
======= ======= ======= ======= ======= ======= =======
Ratio of total expenses to average net assets
(b) .......................................... 1.76%** 1.61% 1.44% 1.73% 2.69% 2.26%** 2.45%
======= ======= ======= ======= ======= ======= =======
Ratio of net investment income to average net
assets ....................................... 2.63%** 3.54% 5.35% 5.94% 8.31% 9.21%** 8.95%
======= ======= ======= ======= ======= ======= =======
Portfolio turnover rate ......................... 45% 146% 162% 160% 259% 115% 183%
======= ======= ======= ======= ======= ======= =======
* Per share income and operating expenses and net realized and unrealized
gain (loss) on investments have been computed using the average number of
shares outstanding. These computations had no effect on net asset value per
share.
** Annualized.
(a) Total return on market value basis is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the closing of
the last day of each period reported. Dividends and distributions, if any,
are assumed for purposes of this calculation, to be reinvested at prices
obtained under the Fund's dividend reinvestment plan. Generally, total
return on net asset value basis will be higher than total return on market
value basis in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total return on net asset
value basis will be lower than total return on market value basis in
periods where there is a decrease in the discount or an increase in the
premium of the market value to the net asset value from the beginning to
the end of such periods. Total return calculated for a period of less than
one year is not annualized. The calculation does not reflect brokerage
commissions, if any.
(b) Ratio after custodian credits was 1.72%, 2.66%, 2.24%**, and 2.43% for the
years ended December 31, 2001, and 2000, the six months ended December 31,
1999 and the year ended June 30, 1999, respectively. There were no
custodian credits for the years ended December 31, 2003 and 2002.
GLOBAL INCOME FUND, INC.
9
HISTORICAL DISTRIBUTION SUMMARY
Return
Investment of
Period Income Capital Total
- ------------------------------------------------ ---------- ------- -----
6 Months Ended 6/30/04 ......................... $0.16 $0.00(a) $0.16
2003 ........................................... $0.22 $0.14 $0.36
2002 ........................................... $0.28 $0.22 $0.50
2001 ........................................... $0.36 $0.20 $0.56
2000 ........................................... $0.42 $0.16 $0.58
6 Months Ended 12/31/99 ........................ $0.23 $0.07 $0.30
12 Months Ended 6/30/99 ........................ $0.55 $0.13 $0.68
12 Months Ended 6/30/98 ........................ $0.52 $0.32 $0.84
(a) A reclassification of ordinary income and return of capital is likely to
occur for the year ended December 31, 2004, although the exact amount is
not estimated at June 30, 2004.
- --------------------------------------------------------------------------------
MANAGED DISTRIBUTION
The Board's current policy is to provide investors with a stable quarterly
distribution out of current income, supplemented by realized capital gains, and
to the extent necessary, paid-in capital. The Fund is subject to U.S. corporate,
tax, and securities laws. Under U.S. tax accounting rules, the amount of
distributable net income is determined on an annual basis and is dependent
during the fiscal period on the aggregate gains and losses realized by the Fund
and, to a lesser extent, the actual exchange rate between the U.S. dollar and
the currencies in which Fund assets are denominated. Therefore, the exact amount
of distributable income can only be determined as of the end of the Fund's
fiscal period. Under the U.S. Investment Company Act of 1940, however, the Fund
is required to indicate the source of each distribution to shareholders. The
Fund estimates that distributions for the fiscal period commencing January 1,
2004, including the distributions paid quarterly, are comprised approximately
half of net investment income and the balance from paid-in capital. This
estimated distribution composition may vary from quarter to quarter because it
may be materially impacted by future realized gains and losses on securities and
fluctuations in the value of currencies in which Fund assets are denominated. In
January after each fiscal period, a Form 1099 DIV will be sent to shareholders,
which will state the amount and composition of distributions and provide
information with respect to their appropriate tax treatment.
- --------------------------------------------------------------------------------
PROXY VOTING
The Fund's Proxy Voting Guidelines (the "Guidelines") are available without
charge, by calling the Fund collect at 1-212-344-6310. The Guidelines are also
posted on http://www.globalincomefund.net, the Fund's website, and are available
on the SEC's website at http://sec.gov.
GLOBAL INCOME FUND, INC.
10
DIVIDEND REINVESTMENT PLAN
The Fund has adopted a Dividend Reinvestment Plan (the "Plan"). Under the Plan,
each dividend and capital gain distribution, if any, declared by the Fund on
outstanding shares will, unless elected otherwise by each shareholder by
notifying the Fund in writing at any time prior to the record date for a
particular dividend or distribution, be paid on the payment date fixed by the
Board of Directors or a committee thereof in additional shares. If the Market
Price (as defined below) per share is equal to or exceeds the net asset value
per share at the time shares are valued for the purpose of determining the
number of shares equivalent to the cash dividend or capital gain distribution
(the "Valuation Date"), participants will be issued additional shares equal to
the amount of such dividend divided by the greater of that NAV per share or 95%
of that Market Price per share. If the Market Price per share is less than such
net asset value on the Valuation Date, participants will be issued additional
shares equal to the amount of such dividend divided by the Market Price. The
Valuation Date is the day before the dividend or distribution payment date or,
if that day is not an American Stock Exchange trading day, the next trading day.
For all purposes of the Plan: (a) the Market Price of the shares on a particular
date shall be the average closing market price on the five trading days the
shares traded ex-dividend on the Exchange prior to such date or, if no sale
occurred on any of these days, then the mean between the closing bid and asked
quotations for the shares on the Exchange on such day, and (b) net asset value
per share on a particular date shall be as determined by or on behalf of the
Fund.
- --------------------------------------------------------------------------------
PRIVACY POLICY
Global Income Fund, Inc. recognizes the importance of protecting the personal
and financial information of its shareholders. We consider each shareholder's
personal information to be private and confidential. This describes the
practices followed by us to protect our shareholders' privacy. We may obtain
information about you from the following sources: (1) information we receive
from you on forms and other information you provide to us whether in writing, by
telephone, electronically or by any other means; (2) information regarding your
transactions with us, our corporate affiliates, or others. We do not sell
shareholder personal information to third parties. We will collect and use
shareholder personal information only to service shareholder accounts. This
information may be used by us in connection with providing services or financial
products requested by shareholders. We will not disclose shareholder personal
information to any nonaffiliated third party except as permitted by law. We take
steps to safeguard shareholder information. We restrict access to nonpublic
personal information about you to those employees and service providers who need
to know that information to provide products or services to you. With our
service providers we maintain physical, electronic, and procedural safeguards to
guard your nonpublic personal information. Even if you are no longer a
shareholder, our Privacy Policy will continue to apply to you. We reserve the
right to modify, remove or add portions of this Privacy Policy at any time.
- --------------------------------------------------------------------------------
Visit us on the Internet at www.globalincomefund.net. The site provides
information about the Fund including market performance, net asset value (NAV),
dividends, press releases, and shareholder reports. For further information, you
can email us at info@globalincomefund.net. The Fund is a member of the Closed-
End Fund Association (CEFA). Its website address is www.cefa.com. CEFA is solely
responsible for the content of its website.
GLOBAL INCOME FUND, INC.
11
DIRECTORS AND OFFICERS
DIRECTORS OFFICERS
- --------- --------
BASSETT S. WINMILL THOMAS B. WINMILL, Esq,
Chairman President
JAMES E. HUNT* MARION E. MORRIS
DAVID R. STACK* Senior Vice President
PETER K. WERNER*
WILLIAM G. VOHRER
THOMAS B. WINMILL, Esq. Treasurer
MONICA PELAEZ, Esq.
* Member, Audit Committee Vice President, Secretary
HEIDI KEATING
Vice President
- --------------------------------------------------------------------------------
STOCK DATA
Price (6/30/04) ....................................................... $4.18
Net Asset Value (6/30/04) ............................................. $4.64
Discount .............................................................. 9.91%
American Stock Exchange Symbol: GIF Newspaper exchange listings appear under an
abbreviation, such as: Glinc
2004 DISTRIBUTION PAYMENT DATES
Declaration Record Payment
- ----------- ------------ ------------
March 1 March 17 March 31
June 2 June 16 June 30
September 2 September 16 September 30
December 3 December 17 December 31
- --------------------------------------------------------------------------------
Internet Custodian
www.globalincomefund.net State Street Bank &Trust Co.
email: info@globalincomefund.net 801 Pennsylvania Avenue
Kansas City, MO 64105
Investment Manager
Stock Transfer Agent and Registrar
CEF Advisers, Inc.
11 Hanover Square American Stock Transfer & Trust Co.
New York, NY 10005 59 Maiden Lane
New York, NY 10038
1-800-278-4353
Independent Accountants www.amstock.com
Tait, Weller & Baker
1818 Market St., Suite 2400
Philadelphia, PA 19103
GLOBAL INCOME FUND, INC.
12
GLOBAL INCOME FUND
==================
11 Hanover Square
New York, NY 10005
Printed on recycled paper [GRAPHIC]
GIF-SAR-6/04
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of the report to shareholders filed under Item 1 of this
Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 10. Controls and Procedures
(a) The Principal Executive Officer and Principal Financial Officer have
concluded that Global Income Fund, Inc.'s disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable
assurances that material information relating to Global Income Fund, Inc. is
made known to them by the appropriate persons, based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this report.
(b) There were no significant changes in Global Income Fund, Inc. internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced in (a)(i) above.
Item 11. Exhibits
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940(17 CFR 270.360a-2) attached hereto as Exhibits
EX-31 and EX-32.
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.
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 Income Fund, Inc.
By: /s/ Thomas B. Winmill
---------------------------------------------
Thomas B. Winmill, President
Date: September 9, 2004
By: /s/ William G. Vohrer
---------------------------------------------
William G. Vohrer, Treasurer
Date: September 9, 2004
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 below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Thomas B. Winmill
---------------------------------------------
Thomas B. Winmill, President
Date: September 9, 2004
By: /s/ William G. Vohrer
---------------------------------------------
William G. Vohrer, Treasurer
Date: September 9, 2004