N-CSRS: Certified semi-annual shareholder report of registered management investment companies filed on Form N-CSR
Published on September 7, 2005
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
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Global Income Fund, Inc.
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(Exact name of registrant as specified in charter)
11 Hanover Square, New York, NY 10005
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(Address of principal executive offices) (Zipcode)
Thomas B. Winmill, President
11 Hanover Square
New York, NY 10005
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-212-344-6310
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Date of fiscal year end: 12/31
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Date of reporting period: 1/1/05 - 6/30/05
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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-CSRS in its
regulatory, disclosure review, inspection, and policy making roles.
A registrant is required to disclose the information specified by Form
N-CSRS and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSRS
unless the Form displays a current valid Office of Management and Budget ("OMB")
control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under clearance requirements of 44 U.S.C. sec. 3507.
Item 1. Report to Shareholders.
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[LOGO] GLOBAL INCOME FUND
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SEMI-ANNUAL REPORT
June 30, 2005
American Stock
Exchange Symbol:
GIF
11 Hanover Square
New York, NY 10005
1-800-278-4353
www.globalincomefund.net
[CHART]
Pie chart
COUNTRY ALLOCATION*
Netherlands 17.48%
Germany 11.57%
United Kingdom 11.02%
United States 10.38%
Supranational/Other 7.85%
France 7.73%
Australia 6.80%
Austria 4.06%
Canada 4.03%
Denmark 3.99%
Sweden 3.91%
Japan 3.75%
Italy 1.98%
Cyprus 1.96%
Hungary 1.90%
Korea 1.59%
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100.00%
PORTFOLIO ANALYSIS*
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Currency Diversification
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U.S. Dollar 23%
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Euro 60%
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British Pound 14%
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Australian Dollar 2%
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99%
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Ratings
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AAA 40%
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AA 15%
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A 41%
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BBB 2%
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*BBB 0%
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NR 2%
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100%
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* Country allocation is shown as an approximate percentage of all
investments. Portfolio analysis uses approximate percentages of total net
assets, and may not add up to 100%, due to leverage or other assets,
rounding, and other factors. Ratings are not a guarantee of credit quality
and may change. NR means "not rated."
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American Stock
GLOBAL INCOME FUND Exchange Symbol: GIF
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11 Hanover Square, New York, NY 10005
www.globalincomefund.net
July 20, 2005
Fellow Shareholders:
It is a pleasure to welcome our new shareholders who have made their
initial investment in shares of the Fund 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 normally investing at least 65% in a global
portfolio of 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 30, 2005, the Fund was 96% invested in investment grade or deemed
investment grade fixed income securities, and 4% in investment grade preferred
stocks. As shown in the accompanying table to the left, at June 30 investments
originated from 15 countries, plus supranationals, with approximately 61% from
the Eurozone. The Fund has paid dividends every year since its founding in 1983,
and paid two quarterly dividends in the first half of 2005. Quarterly dividend
distributions for the balance of the year are scheduled to be paid September 30
and December 30 to shareholders of record September 16 and December 15,
respectively.
6% 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 6% 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 of Directors'
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 dollar
amount of the distributions cannot be predicted, we continue to believe shares
of the Fund are a sound long term value for investors seeking a high level of
income, with capital appreciation as a secondary objective.
Market Report
On June 30, the Federal Open Market Committee (FOMC) raised its key
overnight Federal funds target rate for the ninth time in a year by a quarter of
a percentage point, as expected, to 3.25%. In addition, the FOMC restated that
it still expects to raise rates at a "measured" pace, thus leaving unchanged the
language they have previously used in prior quarter point increases. Although
the FOMC continues to embrace the view that inflationary pressures remain
elevated, most economic statistics reported indicate that the inflation rate
remains contained. The trend of the 10 year Treasury bond benchmark to 4%, even
in the face of record oil prices, will continue to present a hurdle for the
FOMC. For periods ended June 30, 2005, the 10 year Treasury bond has averaged
4.22% over the last six months, 4.15% over the last three months and, most
surprisingly, 3.99% over the past month. Keeping in mind that bond markets move
on expectation as much as reality, we look for the economy to remain in good
shape, with the inflation outlook remaining benign. We think the FOMC might push
the Federal funds rate higher by its November meeting, but then we would not be
surprised to see the economy slow for a few quarters, with the anticipation of a
FOMC easing keeping the 10 year Treasuries at approximately 4.25%.
We believe that shares of the Fund are attractive, and look forward to
serving your investment needs in the months and years ahead.
Sincerely,
/s/ Thomas B. Winmill /s/ Marion E. Morris
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Thomas B. Winmill Marion E. Morris
President Senior Vice President
Portfolio Manager
Schedule of Portfolio Investments - June 30, 2005 (Unaudited)
See accompanying notes to financial statements.
GLOBAL INCOME FUND, INC. 2
Schedule of Portfolio Investments - June 30, 2005 (Unaudited)
Note: Par value stated in currency indicated; market value stated in U.S.
dollars.
* 144A securities may be sold to institutional investors only. The total
market value of these securities at June 30, 2005, is $340,530, which
represents approximately 1.0% of total investments.
See accompanying notes to financial statements.
3 GLOBAL INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (Unaudited)
ASSETS:
Investments at market value (cost: $33,403,603) (note 1) .... $33,774,200
Interest receivable ......................................... 595,259
Other assets ................................................ 14,078
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Total assets ............................................. 34,383,537
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LIABILITIES:
Note payable ................................................ 444,511
Accrued expenses ............................................ 42,661
Management fees payable (note 3) ............................ 19,533
Administrative services payable (note 3) .................... 6,724
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Total liabilities ........................................ 513,429
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NET ASSETS: (applicable to 7,380,979 shares outstanding:
20,000,000 shares of $.01 par value authorized) ............. $33,870,108
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NET ASSET VALUE PER SHARE
($33,870,108 / 7,380,979 shares outstanding) $ 4.59
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At June 30, 2005, net assets consisted of:
Paid-in capital ............................................. $40,137,861
Accumulated net realized loss on investments and
foreign currencies ....................................... (6,610,761)
Net unrealized appreciation on investments and foreign
currencies ............................................... 343,008
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$33,870,108
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STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (Unaudited)
INVESTMENT INCOME:
Interest .................................................... $ 627,387
Dividends ................................................... 59,647
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Total investment income .................................. 687,034
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EXPENSES:
Investment management (note 3) .............................. 132,702
Administrative services (note 3) ............................ 45,587
Bookkeeping and pricing ..................................... 17,530
Auditing .................................................... 11,403
Custodian ................................................... 9,050
Printing and postage ........................................ 8,590
Directors ................................................... 7,815
Exchange listing ............................................ 6,625
Insurance ................................................... 5,792
Transfer agent .............................................. 4,160
Other ....................................................... 137
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Total operating expenses ................................. 249,391
Loan interest and fees (note 5) .......................... 266
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Total expenses ........................................... 249,657
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Net investment income ................................. 437,377
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain on investments and foreign currencies
(note 4) ................................................. 330,108
Unrealized depreciation on investments and foreign
currencies ............................................... (2,549,948)
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Net realized and unrealized loss on investments and
foreign currencies .................................... (2,219,840)
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Net change in net assets resulting from operations ....... $(1,782,463)
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See accompanying notes to financial statements.
GLOBAL INCOME FUND, INC. 4
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 2005 (Unaudited) and the Year Ended December
31, 2004
See accompanying notes to financial statements.
5 GLOBAL INCOME FUND, INC.
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. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Withholding taxes on foreign
dividends have been provided for in accordance with the Fund's understanding of
the applicable country's tax rules and rates. 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, 2004, the
Fund had an unused capital loss carryforward of approximately $6,940,900 of
which $2,481,600 expires in 2007, $1,708,500 in 2008, $1,381,600 in 2009, and
$1,369,200 in 2011. No capital gain will be distributed until the capital loss
carryforwards have been exhausted. Based on Federal income tax cost of
$33,403,603, gross unrealized appreciation and gross unrealized depreciation
were $775,599 and $405,002, respectively, at June 30, 2005. Distributions paid
to shareholders during the year ended December 31, 2004 differ from net
investment income and net gains (losses) from security, foreign currency, and
futures transactions as a result of capital distributions due to the managed
distribution policy of the Fund. 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 determining 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 $45,587 for
providing at cost certain administrative services comprised of compliance
services of $23,330 and accounting services of $22,257 during the six months
ended June 30, 2005.
GLOBAL INCOME FUND, INC. 6
Notes to Financial Statements (Unaudited)
(4) The Fund has an arrangement with its custodian and transfer agent whereby
interest earned on uninvested cash balances is used to offset a portion of the
Fund's expenses. Purchases and sales of securities other than short term notes
aggregated $3,000,000 and $4,123,088, respectively, for the six months ended
June 30, 2005. 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, 2005. Realized gains and losses arising from exchange differences are
included in net realized gain on investments and foreign currencies in the
Statement of Operations.
(5) The Fund may borrow through a committed bank line of credit. At June 30,
2005, there was $444,511 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, 2005,
the weighted average interest rate was 3.48% based on the balances outstanding
during the period and the weighted average amount outstanding was $13,673.
(6) The tax character of distributions paid to shareholders for the six months
ended June 30, 2005 and for the year ended December 31, 2004 was as follows:
June 30, December 31,
2005 2004
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Distributions paid from:
Ordinary income $1,032,967* $1,607,586
Return of capital -- 573,375
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$1,032,967 $2,180,961
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* A reclassification between ordinary income and return of capital is likely to
occur for the Fund's fiscal year ended December 31, 2005, although the exact
amount is not estimable at June 30, 2005.
As of December 31, 2004, the components of distributable earnings on a tax basis
were as follows:
Unrealized appreciation on investments and foreign currencies $ 2,892,956
Capital loss carryforwards (6,940,869)
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$(4,047,913)
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Accounting principles generally accepted in the United States of America require
certain components of net assets be reclassified between financial and tax
reporting. These reclassifications have no effect on net assets or net asset
value per share. For the year ended December 31, 2004, a permanent difference
between book and tax accounting of $1,188,534 was reclassified from accumulated
net realized loss on investments and foreign currencies to paid-in capital as a
result of the expiration of capital loss carryforward in 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, 2005 there were 7,380,979 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 distributions
during the six months ended June 30, 2005 and for the year ended December 31,
2004 were as follows:
Shares issued Increase in paid-in capital
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6 months ended 6/30/05 ........... 3,439 $ 15,019
2004 ............................. 66,829 $300,947
7 GLOBAL INCOME FUND, INC.
Notes to Financial Statements (Unaudited) (concluded)
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 $6,875,737 after deducting total expenses of $192,789.
The net asset value per share of the Fund's common shareholders was reduced by
approximately $0.21 per share as a result of the share issuance.
FINANCIAL HIGHLIGHTS
(a) Computed using average shares outstanding throughout the period.
(b) 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.
(c) Ratio after custodian credits was 1.72% and 2.66%, for the years ended
December 31, 2001 and 2000. There were no custodian credits for the six
months ended June 30, 2005 and for the years ended December 31, 2004, 2003,
and 2002.
* Annualized.
GLOBAL INCOME FUND, INC. 8
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The additional information below and on the following pages is supplemental and
not part of the financial statements of the Fund.
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BOARD OF DIRECTORS' ANNUAL APPROVAL OF THE INVESTMENT MANAGEMENT AGREEMENT
The investment management agreement between the Fund and the Investment Manager
generally provides that the agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Directors of the Fund who are not parties to the agreement, or interested
persons of any such party and (ii) by the Board of Directors of the Fund or by
the vote of the holders of a majority of the outstanding voting securities of
the Fund.
In considering the annual approval of the agreement between the Fund and the
Investment Manager, the Board of Directors considered information that had been
provided throughout the year at regular Board meetings, as well as information
furnished to the Board for a meeting held in March 2005 to specifically consider
the renewal of the agreement. Such information included, among other things, the
following: information comparing the management fee of the Fund with those of
comparable funds; information regarding Fund investment performance in
comparison to a relevant peer group of funds; the economic outlook and the
general investment outlook in relevant investment markets; the Investment
Manager's results and financial condition and the overall organization of the
Investment Manager; the allocation of brokerage and the benefits received by the
Investment manager as a result of brokerage allocation; the Investment Manager's
management of relationships with the custodian, transfer agent, and fund
accountant; the resources devoted to the Investment Manager's compliance efforts
undertaken on behalf of the funds it manages and the record of compliance with
the investment policies and restrictions and with policies on personal
securities transactions; the quality, nature, cost, and character of the
administrative and other non-investment management services provided by the
Investment Manager and its affiliates; and the terms of the agreement and the
reasonableness and appropriateness of the particular fee paid by the Fund for
the services described therein.
The Board of Directors also considered the nature, extent, and quality of the
management services provided by the Investment Manager. In so doing, the Board
considered the Investment Manager's management capabilities with respect to the
types of investments held by the Fund, including information relating to the
education, experience, and number of investment professionals and other
personnel who provide services under the agreement. The Board also took into
account the time and attention to be devoted by management to the Fund and the
other funds in the Investment Company Complex. The Board evaluated the level of
skill required to manage the Fund and concluded that the human resources
available at the Investment Manager were appropriate to fulfill effectively its
duties on behalf of the Fund.
The Board received information concerning the investment philosophy and
investment process applied by the Investment Manager in managing the Fund. In
this regard, the Board considered the Investment Manager's in-house research
capabilities as well as other resources available to the Investment Manager
personnel, including research services that may be available to the Investment
Manager as a result of securities transactions effected for the Fund and related
investment management clients. The Board concluded that the Investment Manager's
investment process, research capabilities and philosophy were well suited to the
Fund, given the Fund's investment objective and policies.
In its review of comparative information with respect to Fund investment
performance, the Board received comparative information, comparing the Fund's
performance to that of similar peer groups. After reviewing this information,
the Board concluded that the Fund has performed within a range that the Board
deemed competitive. With respect to its review of investment management fees,
the Board considered information comparing the Fund's management fee and expense
ratio to those of comparable funds with similar management fee characteristics.
This information assisted the Board in concluding that the fee paid by the Fund
is within the range of those paid by comparable funds within the fund industry.
In reviewing the information regarding
Additional Information 9 GLOBAL INCOME FUND, INC.
the expense ratio of the Fund, the Board concluded that although the Fund's
expense ratio is within a higher range, it is competitive with comparable funds
in light of the quality of services received.
In addition to the factors mentioned above, the Board reviewed the level of the
Investment Manager's profits in providing investment management and related
services for the Fund and for all the funds in the Investment Company Complex.
In addition, the Board considered the fiduciary duty assumed by the Investment
Manager in connection with the services rendered to the Fund and the business
reputation of the Investment Manager and its financial resources. The Board
concluded that in light of the services rendered, the profits realized by the
Investment Manager are not unreasonable.
The Board did not consider any single factor as controlling in determining
whether or not to renew the agreement. Nor are the items described herein all
the matters considered by the Board. In assessing the information provided by
the Investment Manager and its affiliates, the Board also took into
consideration the benefits to shareholders of investing in a fund that is part
of a family of funds which provides a large variety of shareholder services.
Based on its consideration of the foregoing factors and conclusions, and such
other factors and conclusions as it deemed relevant, and assisted by counsel,
the Board concluded that the approval of the agreement, including the fee
structure, is in the interests of shareholders.
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.
PROXY VOTING
The Fund's Proxy Voting Guidelines (the "Guidelines") as well as its voting
record for the 12 months ended December 31, 2004, are available without charge,
by calling the Fund collect at 1-212-344-6310 and on the SEC's website at
http://www.sec.gov. The Guidelines are also posted on the Fund's website at
http://www.globalincomefund.net.
QUARTERLY HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's Internet site at http://www.sec.gov and may be
reviewed and copied at the SEC's Public Reference Room. Copies of this
information can be obtained, after paying a duplicating fee, by e-mail request
to publicinfo@sec.gov, or by writing to the SEC's Public Reference Section,
Washington, DC 20549-0102. The Fund's Investment Company Act file number is
811-08025. The Fund makes the information on Form N-Q available to shareholders
upon request free of charge by e-mail request to info@globalincomefund.net or by
calling the Fund collect at 1-212-344-6310.
GLOBAL INCOME FUND, INC. 10 Additional Information
WWW.GLOBALINCOMEFUND.NET
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.
MANAGED DISTRIBUTIONS
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 year 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 year. 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, 2005,
including the distributions paid quarterly, are comprised approximately
two-thirds 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 year, 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.
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 of the volume weighted average sales prices or, if no
sales occurred then the mean between the closing bid and asked quotations, for
the shares on the Exchange on each of the five trading days the shares traded
ex-dividend on the Exchange immediately prior to such date, and (b) net asset
value per share on a particular date shall be as determined by or on behalf of
the Fund.
Additional Information 11 GLOBAL INCOME FUND, INC.
HISTORICAL DISTRIBUTION SUMMARY
Investment Return of
Period Income Capital Total
- --------------------------- ---------- --------- ------
6 Months Ended 6/30/05 .... $0.140 $0.000(a) $0.140
2004 ...................... $0.245 $0.090 $0.335
2003 ...................... $0.220 $0.140 $0.360
2002 ...................... $0.280 $0.220 $0.500
2001 ...................... $0.360 $0.200 $0.560
2000 ...................... $0.420 $0.160 $0.580
6 Months Ended 12/31/99 ... $0.230 $0.070 $0.300
12 Months Ended 6/30/99 ... $0.550 $0.130 $0.680
12 Months Ended 6/30/98 ... $0.520 $0.320 $0.840
(a) A reclassification of ordinary income and return of capital is likely to
occur for the year ended December 31, 2005, although the exact amount is not
estimable at June 30, 2005.
STOCK DATA
Price (6/30/05) ............. $4.35
Net Asset Value (6/30/05) ... $4.59
Discount .................... 5.23%
American Stock Exchange Symbol: GIF Newspaper exchange listings appear under an
abbreviation, such as: Glinc
2005 DISTRIBUTION PAYMENT DATES
Declaration Record Payment
- ----------- ------------ ------------
March 1 March 17 March 31
June 2 June 16 June 30
September 1 September 16 September 30
December 2 December 15 December 30
FUND INFORMATION
Investment Manager Custodian
CEF Advisers, Inc. State Street Bank & Trust Co.
11 Hanover Square 801 Pennsylvania Avenue
New York, NY 10005 Kansas City, MO 64105
Independent Registered Public Stock Transfer Agent and Registrar
Accounting Firm American Stock Transfer & Trust Co.
Tait, Weller & Baker 59 Maiden Lane
1818 Market St., Suite 2400 New York, NY 10038
Philadelphia, PA 19103 www.amstock.com
1-800-278-4353
Internet
www.globalincomefund.net
email: info@globalincomefund.net
GLOBAL INCOME FUND, INC. 12 Additional Information
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Additional Information 13 GLOBAL INCOME FUND, INC.
GLOBAL INCOME FUND
11 Hanover Square
New York, NY 10005
Printed on recycled paper
GIF-SAR-6/05
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. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. 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 (the "1940 Act")) are effective as of a date within 90
days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the disclosure
controls and procedures required by Rule 30a-3(b) under the 1940 Act and
15d-15(b) under the Securities Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred
during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that have materially
affected, or are likely to materially affect the registrant's internal
control over financial reporting.
Item 12. Exhibits.
(a)(1) The Code of Ethics - not applicable for filing of Semi-Annual
Reports to Shareholders.
(a)(2) The certifications required by Rule 30a-2 of the Investment Company
Act of 1940, as amended, and Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.
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 7, 2005
By: /s/ Thomas O'Malley
---------------------------------------------
Thomas O'Malley, Chief Financial Officer
Date: September 7, 2005
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 7, 2005
By: /s/ Thomas O'Malley
---------------------------------------------
Thomas O'Malley, Chief Financial Officer
Date: September 7, 2005