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 Fund Inc.
 
(Exact name of registrant as specified in charter)
 
1285 Avenue of the Americas, New York, New York 10019-6028
 
(Address of principal executive offices) (Zip code)

Mark F. Kemper, Esq.
UBS Global Asset Management
1285 Avenue of the Americas
New York, NY 10019-6028
(Name and address of agent for service)

Copy to:
Jack W. Murphy, Esq.
Dechert LLP
1900 K Street, N.W.
Washington, DC 20006

Registrant’s telephone number, including area code: 212-821 3000

Date of fiscal year end: October 31

Date of reporting period: April 30, 2013



Item 1. Reports to Stockholders.

   
   
  Closed-end funds   Semiannual Report



Global High Income Fund Inc.
Semiannual Report
April 30, 2013













 

 



Global High Income Fund Inc.:
Managed distribution policy—key points to note




Global High Income Fund Inc.
 

June 14, 2013

Dear shareholder,
We present you with the semiannual report for Global High Income Fund Inc. (the “Fund”) for the six months ended April 30, 2013.

Performance
During the six months ended April 30, 2013, the Fund returned 4.87% on a net asset value (“NAV”) basis, and 5.34% on a market price basis. In comparison, the Fund’s benchmark, the Global High Income Fund Index (the “Index”), returned 4.99%. Over the same period, the median for the Fund’s Lipper Emerging Markets Debt Funds peer group returned 4.52% on a NAV basis and 5.38% on a market price basis. (For more performance information, including a description of the Index, please refer to “Performance at a glance’’ on page 4.)

The Fund did not use structural leverage during the reporting period. This means the Fund did not have preferred stock outstanding or borrow from banks for investment purposes, as some of its peers may have done. Leverage magnifies returns on both the upside and on the downside, and creates a wider range of returns within the Fund’s peer group.

The Fund traded at a discount to its NAV during the reporting period. On the last trading day of the preceding fiscal year, October 31, 2012, the Fund traded at a discount of 5.3%. At the close of the current fiscal period, April 30, 2013, the Fund traded at a discount of 5.0%. As of the same dates, the Lipper peer group medians reported discounts of 5.1% and 3.4%, respectively.

Global High Income
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 (Americas) Inc.

Commencement:
October 8, 1993

NYSE symbol:
GHI

Distribution payments:
Monthly



A fund trades at a premium when the market price at which its shares trade is more than its NAV per share. Alternatively, a fund trades at a discount when the market price at which its shares trade is less than its NAV per share. The market price is the price the market is willing to pay for shares of a fund at a given time, and may be influenced by a range of factors, including supply and demand and market conditions. NAV per share is determined by dividing the value of the Fund’s securities, cash and other assets, less all liabilities, by the total number of common shares outstanding.

An interview with Portfolio Manager Uwe Schillhorn
Q. 

How did emerging markets debt perform over the reporting period?

A. While the emerging markets debt asset class experienced periods of volatility during the reporting period, it ultimately generated positive results. The asset class rallied during the first two months of the period, driven by an improving economic backdrop in the US and indications that China’s economy was stabilizing. Investor sentiment was also lifted by further monetary policy accommodation by the Federal Reserve Board (“Fed”) and European Central Bank (“ECB”). After a strong start, the asset class weakened over much of the next three months. This turnaround was triggered by a number of factors, including signs of moderating global growth, fears of contagion from Europe, rising US Treasury yields and falling commodity prices. However, the reporting period ended on a positive note, as investor risk appetite returned and US Treasury yields declined.

1



Global High Income Fund Inc.

 
During the six months ended April 30, 2013, US dollar-denominated emerging markets debt, as measured by the JP Morgan Emerging Markets Bond Index Global (EMBI Global), posted a return of 2.97%. Local market investments (emerging markets debt denominated in the currency of the issuer) returned 7.02%, as measured by the JP Morgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM Global Diversified). A portion of local markets’ relative outperformance was driven by weaker performance of US dollar-denominated debt due to increasing industry yields and strong investor demand for local debt, as investors looked to generate incremental yield.

Q.  The Fund modestly underperformed its benchmark on a NAV basis during the reporting period. What factors negatively impacted its performance?
A. The following strategies detracted from performance during the reporting period.
  • An overweight to Argentina US dollar-denominated debt was negative. While our overweight to Argentina was beneficial toward the end of the reporting period, overall it detracted from performance. During the fourth quarter of 2012, a US court ruled that Argentina could not discriminate between its creditors, in connection with a longstanding dispute between holdouts from Argentina’s 2001 sovereign default. Against this backdrop, Standard & Poor’s cut the country’s credit rating from B, to B-, Moody’s lowered the country’s rating from B2, to B3, and Fitch placed the country’s B rating on Rating Watch Negative. Investor sentiment for Argentina’s debt remained weak, as appeals in the court case have yet to be resolved.
     
  • Our exposure to the South Korean won was not rewarded. The Korean won performed poorly during the reporting period, as investor sentiment was weak given heighted political risks with North Korea. In addition, the won was negatively impacted by the depreciation of the Japanese yen, as it was believed that this would negatively impact South Korean exports.

Q.  What factors positively impacted the Fund’s performance during the period?
A. The following strategies were positive contributors to performance during the reporting period.
  • An overweight to local currencies was beneficial. Although the overall sentiment for local currencies was not overly optimistic, our currency selection was rewarded, including our exposures to the Sri Lankan rupee, Brazilian real and Nigerian naira.
     
  • Overweights to local bonds in several countries aided results. The Fund was rewarded for having an overweight position to long duration local bonds issued by Brazil, as their yields moved lower and their prices rose. An overweight to local bonds from Belarus contributed to performance, as demand was generally solid given their attractive yields.
     
  • The Fund’s exposure to Indian local bonds was beneficial for performance. The Indian government lowered rates—one of the few such emerging market central banks to do so during the reporting period—as it looked to boost its weak economy. The potential remains for additional rate reductions, given continued economic headwinds and relatively benign inflation.

Q.  Were there any significant adjustments to the Fund’s positioning during the reporting period?
A. Several adjustments were made to the portfolio during the reporting period. We reduced the Fund’s allocation to US dollar-denominated debt by paring our exposure to Argentina, even though the Fund maintains an overweight position. Conversely, we added to the Fund’s allocation to Venezuelan US dollar-denominated debt, as we found it to be attractively valued. From a currency perspective, we reduced our exposure to the Taiwan dollar and South Korean won. Elsewhere, we actively participated in the new issuance market, as it has become more active in recent weeks.

2



Global High Income Fund Inc.


Q.  What derivative instruments did the Fund utilize over the reporting period and what impact did they have on performance?
A.

Currency forwards and currency options to manage the Fund’s overall currency exposure were among the most commonly utilized instruments. (A currency forward is an agreement between two parties to exchange a certain amount in currencies at a certain rate at a future date.) During this period, the usage of these derivatives was rewarded and added to performance.

The Fund also used credit default swaps (a type of credit derivative) and structured notes to adjust the Fund’s exposure to the debt of certain emerging markets countries, such as Argentina. Whereas credit default swaps were generally used to adjust the Fund’s US dollar-denominated debt exposure, structured notes were employed almost exclusively to gain access to various local markets. The Fund’s overall management of its US dollar-denominated assets, including derivatives, modestly contributed to performance.


Q.  What is your outlook for the emerging markets debt asset class?
A. Since the end of the reporting period, investor risk aversion increased and volatility in emerging markets has become more elevated. The trigger for the bond sell-off was hints from the Fed that it might start tapering its quantitative easing program as early as the summer of 2013. While the overall message from the Fed was presumably a positive one in noting the continued improvement in US economic growth projections, global markets did not respond kindly to the notion that the end of the extreme monetary policy accommodation might arrive sooner than previously anticipated. Many emerging market countries are experiencing growth well above the levels of major developed markets, although emerging market countries are not immune to global developments. Growth rates in emerging markets should be lower than were expected at the end of 2012, based on lower exports into developed markets. However, advantages in terms of growth and relatively low fiscal deficits are favorable for debt dynamics in emerging markets on a longer-term horizon. While volatility may stay elevated in the near term due to market uncertainty and investor risk aversion, we continue to have a positive long-term outlook for emerging markets investments. Solid fundamental data, stable reserves, a stronger fiscal situation and lower indebtedness are signs of such strengths, especially for sovereigns, quasi-sovereigns and in currencies.

We thank you for your continued support and welcome any comments or questions you may have. For additional information regarding your fund, please contact your financial advisor, or visit us at www.ubs.com/globalam-us.

Sincerely,


Mark E. Carver Uwe Schillhorn, CFA
President Portfolio Management Team Member
Global High Income Fund Inc. Global High Income Fund Inc.
Managing Director Managing Director
UBS Global Asset Management UBS Global Asset Management
(Americas) Inc. (Americas) Inc.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended April 30, 2013. The views and opinions in the letter were current as of June 14, 2013.They are not guarantees of future performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund’s future investment intent. We encourage you to consult your financial advisor regarding your personal investment program.

3



Global High Income Fund Inc.


Performance at a glance (unaudited)
Average annual total returns for periods ended 04/30/13

Net asset value returns       6 months       1 year       5 years       10 years
Global High Income Fund Inc. 4.87 % 11.10 % 8.11 % 10.27 %
Lipper Emerging Markets Debt Funds median 4.52 11.11 9.47 10.71
Market price returns
Global High Income Fund Inc. 5.34 % 6.83 % 5.60 % 9.16 %
Lipper Emerging Markets Debt Funds median 5.38 12.67 12.11 10.98
Index returns
Global High Income Fund Index1 4.99 % 11.01 % 9.61 % 10.57 %
J.P. Morgan Emerging Markets Bond
Index Global (EMBI Global)2 2.97 11.60 10.21 10.29

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. The Fund’s net asset value (“NAV”) returns assume, for illustration only, that dividends and other distributions, if any, were reinvested at the NAV on the payable dates. The Fund’s market price returns assume that all dividends and other distributions, if any, were reinvested at prices obtained under the Fund’s Dividend Reinvestment Plan. Returns for the period of less than one year have not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and other distributions, if any, or on the sale of Fund shares.

1 The Global High Income Fund Index is an unmanaged index compiled by UBS Global Asset Management (Americas) Inc. constructed as follows: from the Fund’s inception until 12/31/93: 100% J.P. Morgan Emerging Markets Bond Index (EMBI); from 01/01/94 to 11/05/06: 100% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global); from 11/06/06 to 03/31/08: 70% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) and 30% J.P. Morgan Government Bond Index-Emerging Markets Diversified (GBI-EM Diversified); from 04/01/08 to 05/31/08: 50% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) and 50% J.P. Morgan Government Bond Index-Emerging Markets Diversified (GBI-EM Diversified); from 06/01/08 to Present: 50% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) and 50% J.P. Morgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM Global Diversified). Investors should note that indices do not reflect the deduction of fees and expenses.
2 The J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index which is designed to track total returns for US dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans and Eurobonds. Investors should note that indices do not reflect the deduction of fees and expenses.

Lipper 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 peer group. Lipper classifies the Fund in its “Emerging Market Debt Funds” category, which includes both leveraged and non-leveraged closed-end funds that seek either current income or total return by investing primarily in emerging market debt securities.

Performance information reflects the deduction of the Fund’s fees and expenses, as indicated in the Statement of operations included in its shareholder reports, such as investment advisory and administration fees, custody fees, exchange listing fees, etc. It does not reflect any transaction charges that a shareholder may incur when (s)he buys or sells shares (e.g., a shareholder’s brokerage commissions).

Further information regarding the Fund, including a discussion of principal objectives, principal investment strategies and principal risks, may be found in the fund overview located at http://www.ubs.com/closedendfundsinfo. You may also request copies of the fund overview by calling the Closed-End Funds Desk at 888-793 8637.

4



Global High Income Fund Inc.


Portfolio statistics (unaudited)

Characteristics1       04/30/13       10/31/12       04/30/12
Net asset value $13.62 $13.45 $13.16
Market price $12.94 $12.74 $13.04
12-month dividends/distributions $0.9457 $0.9889 $1.0600
Monthly dividend/distribution at period-end $0.0785 $0.0792 $0.0867
Net assets (mm) $294.0 $290.4 $284.2
Weighted average maturity (yrs.) 10.7 11.2 11.5
Modified duration (yrs.)2 6.9 7.2 7.0
 
Currency exposure3 04/30/13 10/31/12 04/30/12
US dollar denominated 30.0 % 36.4 % 44.9 %
Foreign denominated 70.0 63.6 55.1
Total 100.0 % 100.0 % 100.0 %

Top ten countries
(bond holdings)4
      04/30/13             10/31/12             04/30/12
Brazil 13.4 % Brazil 12.1 % Brazil 11.8 %
Russia 7.3 Russia 7.7 South Africa 6.9
Turkey 6.3 Indonesia 7.2 Turkey 5.5
Indonesia 5.9 Turkey 6.1 Indonesia 5.5
Mexico 5.8 Mexico 5.5 Russia 5.4
Venezuela 5.3 Venezuela 5.3 Mexico 5.4
India 4.6 India 5.0 Venezuela 5.3
South Africa 4.2 South Africa 4.9 Malaysia 4.7
Malaysia 4.0 Peru 3.4 Peru 3.2
Sri Lanka 3.5 Poland 2.8 China 3.0
60.3 % 60.0 % 56.7 %

Credit quality5       04/30/13       10/31/12       04/30/12
AA 0.8 % 2.6 % 3.4 %
A 9.5 7.9 12.2
BBB 18.6 19.6 19.7
BB 11.3 13.8 12.7
B 11.1 10.4 10.3
Non-rated 46.2 39.7 37.0
Cash equivalents 0.3 3.8 4.6
Other assets less liabilities 2.2 2.2 0.1
Total 100.0 % 100.0 % 100.0 %

1 Prices and other characteristics will vary over time.
2 Duration is a measure of price sensitivity of a fixed income investment or portfolio (expressed as % change in price) to a 1 percentage point (i.e., 100 basis points) change in interest rates, accounting for optionality in bonds such as prepayment risk and call/put features.
3 Exposure represents a percentage of market value as of dates indicated.
4 Weightings represent percentage of net assets as of the dates indicated. The Fund’s portfolio is actively managed and its composition will vary over time.
5 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. (“S&P”), to individual portfolio holdings. S&P is an independent ratings agency. While S&P may provide a credit rating for a bond issuer (e.g., a specific company or country); certain issues, such as some sovereign debt, may not be covered or rated and therefore are reflected as non-rated for the purposes of this table.

5




Global High Income Fund Inc.


Industry diversification (unaudited)
As a percentage of net assets
As of April 30, 2013
Bonds
Corporate bonds
Building products 0.07 %
Capital markets 0.15
Commercial banks 7.19
Construction materials 0.14
Distributors 0.11
Diversified financial services 1.34
Electric utilities 2.50
Food products 0.08
Industrial conglomerates 0.12
Machinery 0.39
Metals & mining 0.84
Oil, gas & consumable fuels 4.75
Paper & forest products 0.19
Road & rail 0.93
Specialty retail 0.23
Total corporate bonds 19.03
Non-US government obligations 70.66
Convertible bond 1.20
Structured notes 6.43
Total bonds 97.32
Short-term investment 0.25
Options purchased 0.25
Total investments 97.82
Cash and other assets, less liabilities 2.18
Net assets 100.00 %

6



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face
amount       Value
Bonds—97.32%
Corporate bonds—19.03%
Argentina—0.10%
WPE International
       Cooperatief UA,
       10.375%, due 09/30/201 $ 300,000 $ 288,000
Brazil—2.72%
Banco do Brasil SA,
       5.875%, due 01/26/222 1,900,000 2,073,375
Banco do Nordeste do Brasil SA,
       4.375%, due 05/03/191 300,000 308,850
Braskem America Finance Co.,
       7.125%, due 07/22/411 300,000 318,750
Caixa Economica Federal,
       2.375%, due 11/06/172 200,000 194,500
Centrais Eletricas Brasileiras SA,
       5.750%, due 10/27/211 2,200,000 2,392,500
       5.750%, due 10/27/212 500,000 543,750
Odebrecht Finance Ltd.,
       7.125%, due 06/26/421 300,000 343,500
State of Minas Gerais,
       5.333%, due 02/15/282 1,600,000 1,811,200
7,986,425
China—0.60%
China Automation Group Ltd.,
       7.750%, due 04/20/16 1,150,000 1,138,500
China Liansu Group
       Holdings Ltd.,
       7.875%, due 05/13/161 200,000 213,000
China Shanshui Cement
       Group Ltd.,
       10.500%, due 04/27/171 360,000 407,700
1,759,200
Croatia—0.08%
Agrokor DD,
       8.875%, due 02/01/202 200,000 223,400
Czech Republic—0.17%
EP Energy AS,
       5.875%, due 11/01/192 EUR 350,000 505,463
Indonesia—0.74%
Majapahit Holding BV,
       7.250%, due 06/28/172 $ 100,000 116,870
Pertamina Persero PT,
       6.000%, due 05/03/422 1,700,000 1,836,000
       6.500%, due 05/27/411 200,000 226,750
2,179,620
Kazakhstan—0.90%
Alliance Bank JSC,
       10.500%, due 03/25/171 350,000 337,750
Development Bank of
       Kazakhstan JSC,
       5.500%, due 12/20/152 264,000 283,140
Kazakhstan Temir Zholy
       Finance BV,
       6.950%, due 07/10/421 350,000 418,250
       6.950%, due 07/10/422 750,000 896,250
KazMunayGas National Co.,
       5.750%, due 04/30/432 700,000 712,492
2,647,882
Malaysia—1.52%
Malayan Banking Bhd,
       3.250%, due 09/20/221,3 4,400,000 4,469,960
Mexico—1.25%
Comision Federal de Electricidad,
       5.750%, due 02/14/422 500,000 558,750
Grupo Papelero Scribe SA,
       8.875%, due 04/07/201 550,000 544,500
Pemex Project Funding
       Master Trust,
       6.625%, due 06/15/35 2,050,000 2,578,445
3,681,695
Mongolia—0.13%
Mongolian Mining Corp.,
       8.875%, due 03/29/171 360,000 368,100
Peru—0.49%
Banco de Credito del Peru,
       5.375%, due 09/16/201 900,000 992,250
El Fondo MIVIVIENDA SA,
       3.500%, due 01/31/232 450,000 445,500
1,437,750
Philippines—1.27%
Power Sector Assets & Liabilities
       Management Corp.
       9.625%, due 05/15/28 2,360,000 3,728,800
Russia—3.15%
RSHB Capital SA for OJSC Russian
       Agricultural Bank,
       7.125%, due 01/14/142 300,000 311,250
       9.000%, due 06/11/142 550,000 593,313
SB Capital SA,
       5.180%, due 06/28/191 2,550,000 2,808,187
       5.717%, due 06/16/211 330,000 365,310
VEB Finance Ltd.,
       6.025%, due 07/05/222 200,000 226,750
       6.800%, due 11/22/251 900,000 1,077,750
       6.800%, due 11/22/252 1,000,000 1,197,500
       6.902%, due 07/09/202 200,000 237,250
Vnesheconombank, Series 6
       7.900%, due 10/13/203 RUB  75,000,000 2,437,830
9,255,140

7



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face
amount       Value
Bonds—(continued)
Corporate bonds—(concluded)
Singapore—1.16%
DBS Bank Ltd.,
       3.625%, due 09/21/221,3 $ 200,000 $ 210,280
Oversea-Chinese Banking
       Corp. Ltd.,
       3.150%, due 03/11/231,3 1,500,000 1,541,298
       3.750%, due 11/15/223 700,000 740,600
United Overseas Bank Ltd.,
       2.875%, due 10/17/221,3 900,000 917,834
3,410,012
South Africa—0.71%
Edcon Pty Ltd.,
       9.500%, due 03/01/181 300,000 309,750
       9.500%, due 03/01/182 350,000 361,375
Transnet Ltd., Series 2
       10.000%, due 03/30/29 ZAR 12,000,000 1,429,958
2,101,083
Turkey—0.70%
Export Credit Bank of Turkey,
       5.375%, due 11/04/162 $ 700,000 759,500
       5.875%, due 04/24/192 400,000 453,500
Turkiye Halk Bankasi AS,
       4.875%, due 07/19/172 800,000 855,000
2,068,000
Ukraine—1.00%
Biz Finance PLC,
       11.000%, due 02/03/144 UAH 15,000,000 1,685,185
NAK Naftogaz Ukraine,
       9.500%, due 09/30/14 $ 1,220,000 1,259,650
2,944,835
United Arab Emirates—0.65%
IPIC GMTN Ltd.,
       5.500%, due 03/01/221 1,620,000 1,909,170
Venezuela—1.69%
Petroleos de Venezuela SA,
       5.250%, due 04/12/171 530,000 458,450
       5.375%, due 04/12/271 1,150,000 802,125
       8.500%, due 11/02/171 780,000 754,650
       8.500%, due 11/02/172 1,500,000 1,451,250
       9.000%, due 11/17/211 120,000 113,400
       9.750%, due 05/17/351 1,500,000 1,402,500
  4,982,375
Total corporate bonds
       (cost $52,713,762) 55,946,910
Non-US government obligations—70.66%
Albania—0.85%
Republic of Albania,
       7.500%, due 11/04/15 EUR 1,800,000 2,485,100
Argentina—2.20%
Republic of Argentina,
       6.055%, due 12/15/355 2,200,000 83,024
       6.266%, due 12/15/355 $ 15,601,737 513,957
       6.266%, due 12/15/355 14,290,000 466,649
       Series VII, 7.000%,
       due 09/12/13 675,000 677,887
       7.000%, due 10/03/15 1,000,000 866,222
       Series X, 7.000%,
       due 04/17/17 1,150,000 932,969
       7.820%, due 12/31/33 EUR 362,896 270,023
       8.280%, due 12/31/33 $ 1,434,289 813,959
       Series NY, 8.280%,
       due 12/31/33 355,550 209,774
       Series 1, 8.750%,
       due 06/02/17 2,072,897 1,627,224
  6,461,688
Belarus—1.67%
Republic of Belarus,
       8.750%, due 08/03/151 4,550,000 4,737,687
       8.950%, due 01/26/181 150,000 162,188
  4,899,875
Brazil—10.65%
Federal Republic of Brazil,
       5.625%, due 01/07/41 750,000 943,500
       6.000%, due 08/15/506 BRL 1,340,000 1,958,933
Letras do Tesouro Nacional,
       7.593%, due 04/01/147 12,650,000 5,866,927
Notas do Tesouro Nacional,
       Series B,
       6.000%, due 08/15/166 4,100,000 5,080,446
       6.000%, due 05/15/456 9,250,000 13,507,500
       Series F,
       10.000%, due 01/01/17 1,280,000 658,490
       10.000%, due 01/01/21 6,428,000 3,299,222
  31,315,018
Chile—1.12%
Bonos de la Tesoreria
       de la Republica,
       3.000%, due 07/01/176 CLP  1,307,929,410 2,836,781
Bonos del Banco Central de
       Chile en Pesos,
       6.000%, due 02/01/21 140,000,000 313,034
       6.000%, due 03/01/22 70,000,000 157,550
  3,307,365
China—0.19%
China Government Bond,
       2.480%, due 12/01/20 CNY 3,500,000 562,044

8



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)

Face      
amount Value
Bonds—(continued)
Non-US government obligations—(continued)
Colombia—2.24%
Republic of Colombia,
       4.375%, due 07/12/21 $ 1,000,000 $ 1,145,000
       4.375%, due 03/21/23 COP 395,000,000 219,184
       6.125%, due 01/18/41 $ 150,000 201,750
       7.375%, due 09/18/37 575,000 871,125
       7.750%, due 04/14/21 COP 1,530,000,000 1,045,929
       8.125%, due 05/21/24 $ 250,000 368,750
       9.850%, due 06/28/27 COP 3,200,000,000 2,730,141
  6,581,879
Croatia—0.19%
Republic of Croatia,
       6.250%, due 04/27/172 $ 500,000 548,750
Dominican Republic—0.21%
Republic of Dominica,
       7.500%, due 05/06/212 550,000 627,000
El Salvador—0.39%
Republic of El Salvador,
       7.750%, due 01/24/231 320,000 388,800
       8.250%, due 04/10/321 615,000 767,213
  1,156,013
Hungary—2.32%
Hungarian Development Bank,
       5.875%, due 05/31/16 EUR 1,200,000 1,641,578
Hungary Government Bond,
       5.375%, due 02/21/23 $ 550,000 566,500
       6.000%, due 11/24/23 HUF 200,000,000 916,663
       6.500%, due 06/24/19 90,000,000 425,146
       6.750%, due 02/24/17 70,000,000 328,158
       7.500%, due 11/12/20 380,000,000 1,901,433
       7.625%, due 03/29/41 $ 900,000 1,055,250
  6,834,728
Indonesia—5.13%
Indonesia Treasury Bond,
       9.500%, due 07/15/23 IDR  29,400,000,000 3,900,849
       11.750%, due 08/15/23 4,600,000,000 688,167
       12.000%, due 09/15/26 12,215,000,000 1,919,096
Republic of Indonesia,
       4.875%, due 05/05/212 $ 1,080,000 1,223,100
       5.875%, due 03/13/201 740,000 880,600
       6.625%, due 02/17/371 920,000 1,200,600
       7.750%, due 01/17/381 3,135,000 4,639,799
       8.500%, due 10/12/351 400,000 622,000
  15,074,211
Latvia—0.10%
Republic of Latvia,
       5.250%, due 02/22/171 250,000 281,453
Lithuania—0.42%
Republic of Lithuania,
       6.125%, due 03/09/211 450,000 552,267
       6.125%, due 03/09/212 250,000 306,815
       6.625%, due 02/01/222 300,000 382,374
  1,241,456
Malaysia—2.43%
Malaysia Government Bond,
       3.197%, due 10/15/15 MYR 10,300,000 3,398,577
       3.580%, due 09/28/18 2,600,000 867,592
       3.892%, due 03/15/27 1,400,000 474,528
       4.262%, due 09/15/16 5,100,000 1,740,789
       4.392%, due 04/15/26 1,900,000 674,601
  7,156,087
Mexico—4.52%
Mexican Bonos,
       Series M,
       6.500%, due 06/10/21 MXN 10,700,000 1,004,090
       10.000%, due 11/20/36 2,000,000 268,795
Mexican Udibonos,
       2.500%, due 12/10/206 15,905,901 1,454,421
       4.000%, due 11/15/406 43,741,227 5,141,016
United Mexican States,
       4.750%, due 03/08/44 $ 1,100,000 1,215,500
       6.050%, due 01/11/40 2,030,000 2,669,450
       Series A,
       6.750%, due 09/27/34 450,000 630,000
       7.500%, due 04/08/33 600,000 895,500
  13,278,772
Mongolia—1.30%
Development Bank of
       Mongolia LLC,
       5.750%, due 03/21/171 1,500,000 1,545,000
Mongolia Government
       International Bond,
       4.125%, due 01/05/182 300,000 291,750
       5.125%, due 12/05/222 2,100,000 1,984,500
  3,821,250
Montenegro—0.72%
Republic of Montenegro,
       7.875%, due 09/14/15 EUR 1,550,000 2,114,799
Nigeria — 2.66%
Nigeria Treasury Bills,
       10.995%, due 03/06/147 NGN 100,000,000 572,420
       11.053%, due 01/09/147 33,000,000 193,659
       11.054%, due 01/23/147 33,000,000 192,863
       11.275%, due 11/21/137 180,000,000 1,068,847
       11.450%, due 09/26/137 150,000,000 902,504
       11.456%, due 04/10/147 225,000,000 1,275,467
       12.802%, due 09/05/137 135,000,000 818,494
       14.864%, due 11/07/137 144,500,000 859,089
Republic of Nigeria,
       15.100%, due 04/27/17 280,000,000 1,936,864
7,820,207

9



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face
amount       Value
Bonds—(continued)
Non-US government obligations—(continued)
Pakistan—0.29%
Islamic Republic of Pakistan,
       6.875%, due 06/01/171 $ 250,000 $ 231,250
       7.875%, due 03/31/361 830,000 610,050
  841,300
Peru—2.66%
Peru Government Bond,
       Series 7, 8.200%,
       due 08/12/26 PEN 1,442,000 759,427
Republic of Peru,
       5.625%, due 11/18/50 $ 1,750,000 2,231,250
       6.900%, due 08/12/371 PEN 1,750,000 835,292
       6.950%, due 08/12/312 1,750,000 825,707
       7.840%, due 08/12/201 6,700,000 3,171,097
  7,822,773
Philippines—1.11%
Republic of the Philippines,
       9.125%, due 09/04/16 PHP    110,000,000 3,257,970
Poland—3.40%
Government of Poland,
       4.000%, due 10/25/23 PLN 5,200,000 1,748,747
       5.000%, due 03/23/22 $ 650,000 756,672
       5.500%, due 10/25/19 PLN 6,000,000 2,178,110
       5.750%, due 09/23/22 14,000,000 5,307,693
  9,991,222
Romania—0.47%
Romanian Government
       International Bond,
       4.375%, due 08/22/232 $ 200,000 207,000
       5.750%, due 01/27/16 RON 2,200,000 684,117
       6.750%, due 02/07/221 $ 100,000 122,750
       6.750%, due 02/07/222 300,000 368,250
  1,382,117
Russia—4.16%
Russian Federation,
       5.625%, due 04/04/421 200,000 238,250
       5.625%, due 04/04/422 1,000,000 1,191,250
       7.000%, due 01/25/23 RUB 25,100,000 840,178
       7.500%, due 03/31/301,8 $ 34,270 43,129
       7.500%, due 03/31/302,8 1,306,424 1,640,890
       7.600%, due 04/14/21 RUB 155,000,000 5,383,367
       8.150%, due 02/03/27 79,700,000 2,894,412
  12,231,476
South Africa—3.53%
Republic of South Africa,
       4.665%, due 01/17/24 $ 1,810,000 2,018,150
       5.500%, due 03/09/20 100,000 117,500
       6.750%, due 03/31/21 ZAR 18,000,000 2,097,863
       7.000%, due 02/28/31 30,000,000 3,228,147
       7.750%, due 02/28/23 23,650,000 2,917,407
  10,379,067
Sri Lanka—1.97%
Republic of Sri Lanka,
       5.875%, due 07/25/221 400,000 423,000
       6.250%, due 10/04/201 1,700,000 1,853,000
       6.250%, due 10/04/202 550,000 599,500
       6.250%, due 07/27/211 1,100,000 1,190,750
       6.250%, due 07/27/212 1,000,000 1,082,500
       7.400%, due 01/22/151 600,000 639,720
  5,788,470
Thailand—3.42%
Thailand Government Bond,
       1.200%, due 07/14/211,6 THB 156,329,160 5,448,367
       3.580%, due 12/17/27 58,000,000 1,975,139
       3.775%, due 06/25/32 78,000,000 2,635,053
  10,058,559
Turkey—5.55%
Government of Turkey,
       10.500%, due 01/15/20 TRY 12,100,000 8,389,655
Republic of Turkey,
       5.125%, due 03/25/22 $ 1,450,000 1,654,812
       5.625%, due 03/30/21 1,000,000 1,175,000
       6.000%, due 01/14/41 900,000 1,082,250
       6.250%, due 09/26/22 1,300,000 1,603,875
       6.750%, due 05/30/40 750,000 981,563
       6.875%, due 03/17/36 250,000 328,125
       7.250%, due 03/05/38 250,000 344,063
       7.500%, due 11/07/19 200,000 255,500
       8.000%, due 02/14/34 350,000 510,125
  16,324,968
Ukraine—0.81%
Financing of Infrastructural Projects
       State Enterprise,
       8.375%, due 11/03/172 1,150,000 1,170,125
Government of Ukraine,
       7.500%, due 04/17/232 400,000 385,500
       7.800%, due 11/28/221 250,000 248,438
       9.250%, due 07/24/172 550,000 587,125
  2,391,188
Uruguay—0.07%
Oriental Republic of Uruguay,
       6.875%, due 09/28/25 150,000 204,000
Venezuela—3.61%
Republic of Venezuela,
       6.000%, due 12/09/201 500,000 416,250
       7.000%, due 03/31/381 3,250,000 2,583,750
       7.650%, due 04/21/25 2,850,000 2,472,375
       7.750%, due 10/13/191 150,000 140,250
       8.250%, due 10/13/241 2,000,000 1,800,000
       9.250%, due 09/15/27 500,000 491,250
       9.250%, due 05/07/281 280,000 268,100
       9.375%, due 01/13/34 2,550,000 2,441,625
10,613,600

10



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face      
amount Value
Bonds—(concluded)
Non-US government obligations—(concluded)
Vietnam—0.17%
Socialist Republic of Vietnam,
       6.750%, due 01/29/201 $ 200,000 $ 236,750
       6.875%, due 01/15/161 250,000 277,500
  514,250
Zambia—0.13%
Republic of Zambia,
       5.375%, due 09/20/222 400,000 393,000
Total Non-US government obligations
       (cost $186,120,288) 207,761,655
Convertible bond — 1.20%
China—1.20%
China Petroleum &
       Chemical Corp.,
       10.063%, due 04/24/147
       (cost $3,264,360) HKD 23,000,000 3,541,813
Structured notes—6.43%
Ghana—0.34%
Citigroup Funding Inc.,
       23.000%, due 08/23/172,7
       (linked to Ghana
       Government Bonds,
       23.000%, due 08/23/17) $ 1,750,000 996,215
India—4.57%
Standard Chartered Bank,
       7.830%, due 04/13/182
       (linked to Indian
       Government Bonds,
       7.830%, due 04/13/18) 2,496,960 2,510,031
       8.130%, due 09/23/222
       (linked to Indian
       Government Bonds,
       8.130%, due 09/23/22) 5,918,535 5,936,012
       8.130%, due 09/23/222
       (linked to Indian
       Government Bonds,
       8.130%, due 09/23/22) 3,235,610 3,203,481
       8.130%, due 09/23/222
       (linked to Indian
       Government Bonds,
       8.130%, due 09/23/22) 1,792,460 1,790,293
  13,439,817
Sri Lanka—1.52%
Citigroup Funding Inc,
       5.800%, due 07/20/172
       (linked to Sri Lanka
       Government Bonds,
       5.800%, due 07/20/17) LKR   110,000,000 707,680
       8.000%, due 06/20/172
       (linked to Sri Lanka
       Government Bonds,
       8.000%, due 06/20/17) 240,000,000 1,698,632
       8.500%, due 02/06/182
       (linked to Sri Lanka
       Government Bonds,
       8.500%, due 02/06/18) 80,000,000 554,793
       8.500%, due 04/01/182
       (linked to Sri Lanka
       Government Bonds,
       8.500%, due 04/01/18) 218,000,000 1,511,810
   4,472,915
Total structured notes
       (cost $18,713,632) 18,908,947
Total bonds
       (cost $260,812,042) 286,159,325
    
  Shares
Short-term investment—0.25%
Investment company—0.25%
UBS Cash Management Prime
       Relationship Fund9
       (cost $745,439) 745,439 745,439
    
Face amount
covered by
contracts
Options Purchased*—0.25%
Call Options—0.03%
Foreign Exchange Option,
       Buy USD/CZK, strike @ CZK
       19.8500, expires July 2013 $ 1,910,000 23,696
Foreign Exchange Option,
       Buy USD/SAR, strike @ SAR
       3.7468, expires July 2013 10,587,500 12,075
Foreign Exchange Option,
       Buy USD/THB, strike @
       THB 29.7500, expires
       October 2013 1,700,000 25,339
Foreign Exchange Option,
       Buy USD/THB, strike @
       THB 30.0000, expires
       October 2013 1,020,000 15,637
76,747

11



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face amount
covered by
contracts       Value
Options Purchased*—(continued)
Put Options—0.22%
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.5700,
       expires May 2013 EUR     2,040,000 $          502
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.4000,
       expires June 2013 1,360,000 41
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.5200,
       expires June 2013 1,360,000 2,058
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.5400,
       expires June 2013 1,350,000 4,327
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.6500,
       expires July 2013 1,020,000 22,235
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.6400,
       expires July 2013 1,020,000 19,954
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.5000,
       expires September 2013 3,400,000 19,635
Foreign Exchange Option, Buy
       EUR/BRL, strike @ BRL 2.5000,
       expires September 2013 1,680,000 9,572
Foreign Exchange Option, Buy
       EUR/MXN, strike @ MXN
       15.8800, expires May 2013 2,610,000 10,862
Foreign Exchange Option, Buy
       EUR/MXN, strike @ MXN
       15.9800, expires May 2013 2,400,000 14,539
Foreign Exchange Option, Buy
       EUR/MXN, strike @ MXN
       15.8500, expires May 2013 1,020,000 3,992
Foreign Exchange Option, Buy
       EUR/MXN, strike @ MXN
       16.0000, expires July 2013 820,000 12,890
Foreign Exchange Option, Buy
       EUR/MXN, strike @ MXN
       16.0000, expires July 2013 1,020,000 16,034
Foreign Exchange Option, Buy
       EUR/PLN, strike @ PLN 4.0000,
       expires October 2013 3,400,000 12,213
Foreign Exchange Option, Buy
       EUR/PLN, strike @ PLN 4.0000,
       expires January 2014 3,000,000 18,256
Foreign Exchange Option,
       Buy EUR/RUB, strike @ RUB
       40.8000, expires July 2013 1,680,000 18,634
Foreign Exchange Option, Buy
       EUR/TRY, strike @ TRY 2.3300,
       expires June 2013 3,400,000 12,554
Foreign Exchange Option,
       Buy EUR/ZAR, strike @ ZAR
       11.8000, expires June 2013 EUR 1,360,000 22,412
Foreign Exchange Option,
       Buy EUR/ZAR, strike @ ZAR
       11.5000, expires July 2013 1,010,000 9,193
Foreign Exchange Option,
       Buy EUR/ZAR, strike @ ZAR
       12.0000, expires July 2013 1,020,000 31,907
Foreign Exchange Option,
       Buy EUR/ZAR, strike @
       ZAR 11.5000, expires
       October 2013 1,910,000 35,086
Foreign Exchange Option, Buy
       GBP/BRL, strike @ BRL 2.9000,
       expires June 2013 GBP 1,450,000 157
Foreign Exchange Option, Buy
       GBP/BRL, strike @ BRL 2.9000,
       expires September 2013 2,410,000 4,171
Foreign Exchange Option,
       Buy GBP/MXN, strike @
       MXN 18.8000, expires
       September 2013 1,910,000 50,289
Foreign Exchange Option,
       Buy GBP/RUB, strike @
       RUB 45.9000, expires
       September 2013 3,900,000 16,034
Foreign Exchange Option,
       Buy GBP/ZAR, strike @
       ZAR 13.2000, expires
       September 2013 2,920,000 22,429
Foreign Exchange Option,
       Buy GBP/ZAR, strike @
       ZAR 13.2000, expires
       September 2013 1,820,000 13,980
Foreign Exchange Option, Buy
       USD/BRL, strike @ BRL 1.9000,
       expires April 2014 $ 9,860,000 64,473
Foreign Exchange Option,
       Buy USD/CLP, strike @ CLP
       465.0000, expires May 2013 6,000,000 3,321
Foreign Exchange Option, Buy
       USD/MXN, strike @ MXN
       12.0000, expires July 2013 1,360,000 10,872
Foreign Exchange Option,
       Buy USD/MXN, strike @
       MXN 12.0000, expires
       October 2013 3,370,000 46,066
Foreign Exchange Option,
       Buy USD/RUB, strike @ RUB
       30.4000, expires May 2013 2,430,000 4,551
Foreign Exchange Option,
       Buy USD/RUB, strike @ RUB
       31.0000, expires June 2013 1,500,000 11,459

12



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Face amount
covered by
contracts
       Value
Options Purchased*—(concluded)
Put Options—(concluded)
Foreign Exchange Option,
       Buy USD/SAR, strike @ SAR
       3.7468, expires July 2013 $ 10,587,500 $ 1,793
Foreign Exchange Option,
       Buy USD/ZAR, strike @ ZAR
       9.0000, expires June 2013 2,040,000 34,035
Foreign Exchange Option,
       Buy USD/ZAR, strike @ ZAR
       8.5000, expires July 2013 3,000,000 11,957
Foreign Exchange Option,
       Buy USD/ZAR, strike @ ZAR
       8.4000, expires August 2013 5,050,000 16,856
Foreign Exchange Option,
       Buy USD/ZAR, strike @
       ZAR 9.0000, expires  
       September 2013   1,870,000 45,995
  655,334
Total options purchased
       (cost $1,367,234)   732,081
Total investments — 97.82%
       (cost $262,924,715) 287,636,845
Cash and other assets,
       less liabilities — 2.18% 6,408,319
Net assets — 100.00% $ 294,045,164

13



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Notes to portfolio of investments
Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation $ 31,036,493
Gross unrealized depreciation (6,324,363 )
Net unrealized appreciation of investments $ 24,712,130

For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 21. Portfolio footnotes begin on page 20.

Forward foreign currency contracts

Counterparty       Contracts
to deliver
      In exchange for       Maturity
date
      Unrealized
appreciation/
(depreciation)
BB ARS 1,754,000 USD 324,514 06/11/13 $ (1,273 )
BB CLP 1,918,500,000 USD 3,999,792 06/14/13 (48,592 )
BB COP 2,863,660,000 USD 1,573,872 06/14/13 10,182
BB EUR 1,130,000 USD 1,478,962 07/11/13 (9,911 )
BB INR 267,360,000 USD 4,807,768 06/14/13 (112,819 )
BB PEN 5,150,000 USD 1,984,586 06/14/13 41,685
BB SGD 1,771,000 USD 1,425,134 05/29/13 (12,721 )
BB SGD 315,000 USD 257,416 07/08/13 1,662
BB USD 317,117 ARS 1,760,000 06/11/13 9,784
BB USD 11,481,617 CNY 72,139,000 06/14/13 193,920
BB USD 2,619,305 HUF 606,500,000 06/14/13 36,831
BB   USD 6,082,912 KRW 6,634,024,300 06/14/13   (68,884 )
BB USD 3,707,355 RUB 115,667,999 06/14/13 (20,685 )
BB USD 256,031 SGD 315,000 07/08/13 (277 )
BB USD 2,292,185 ZAR 20,990,000 06/14/13 33,146
CSI BRL 31,838,994 USD 16,023,651 06/14/13 194,905
CSI CLP 489,311,000 USD 1,026,993   05/29/13 (7,827 )
CSI IDR    12,500,000,000 USD 1,273,561 06/14/13 (5,189 )
CSI INR 188,830,000 USD 3,414,894 06/14/13   (60,399 )
CSI USD 158,559 ARS 880,000 06/11/13 4,892
CSI USD 324,214 ARS 1,754,000 06/14/13 584
CSI USD 1,020,000 CLP 489,311,000 05/29/13   14,820
CSI USD 3,894,183 HUF 902,087,499 06/14/13 56,463
CSI USD 6,131,753 IDR    60,060,516,958 06/14/13 12,439
CSI USD 2,946,409 INR 162,630,000 06/14/13 46,691
CSI USD 1,985,996 RUB 62,400,000 06/14/13 2,870
DB EUR 2,392,000 USD 3,143,853 05/29/13 (6,847 )
DB GBP 2,375,188 SGD 4,464,000 05/29/13 (64,532 )
DB GBP 471,000   USD 728,166 05/29/13 (3,324 )
DB MXN 11,730,000 USD 963,252 05/29/13 (562 )
DB MXN 48,220,000 USD 3,864,432 06/14/13 (92,395 )
DB PLN 18,540,000 USD 5,674,410 06/14/13 (174,075 )
DB THB 33,950,000 USD 1,156,335 06/14/13 2,519
DB UAH 2,238,000 USD 226,404 02/03/14 (12,785 )
DB UAH 3,861,000 USD 422,660 02/03/14 10,010
DB USD 949,951 MXN 11,730,000 05/29/13 13,863
DB USD 5,146,675 THB 153,338,590 06/14/13 64,651
DB USD 2,969,212 TRY 5,420,000 06/14/13 40,236
DB USD 5,932,754 TWD 175,490,872 06/14/13 16,950

14



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Forward foreign currency contracts (concluded)

Counterparty       Contracts
to deliver
      In exchange for       Maturity
date
      Unrealized
appreciation/
(depreciation)
DB USD 5,625,766 ZAR 51,860,000 06/14/13 $ 119,430
GSI BRL 2,200,000 USD 1,077,111 06/14/13 (16,618 )
GSI PHP 8,950,000 USD 220,443 06/14/13 3,398
GSI RON 1,400,000 USD 410,196 06/14/13 (13,980 )
GSI TRY 5,720,000 USD 3,114,959 06/14/13 (61,063 )
GSI UAH 2,238,000 USD 226,289 02/03/14 (12,900 )
GSI USD 158,559 ARS 880,000 06/11/13 4,892
GSI   USD 14,086,251 MXN      179,545,000 06/14/13 646,816
GSI USD 11,034,923 MYR 34,500,687 06/14/13 268,125
GSI USD 5,458,257 PLN 17,515,000 06/14/13 66,890
GSI USD 6,430,284 TRY 11,679,324 06/14/13   54,646
JPMCB MXN      14,350,000 USD 1,174,112   06/14/13 (3,417 )
JPMCB USD 317,143 ARS 1,776,000 06/11/13 12,730
JPMCB USD 594,619 RON 2,000,000 06/14/13 11,347
RBS USD 475,837   ARS 2,652,000 06/11/13 16,743
SSB EUR 7,980,000 USD 10,399,935 07/11/13   (114,406 )
Net unrealized appreciation on forward foreign currency contracts $ 1,088,639

Futures contracts

Expiration
date
      Cost/
(proceeds)
      Value       Unrealized
appreciation/
(depreciation)
US Treasury futures buy contracts:
5 Year US Treasury Notes, 65 contracts (USD) June 2013   $ 8,055,714 $ 8,101,641 $ 45,927  
10 Year US Treasury Notes, 70 contracts (USD) June 2013   9,202,669   9,335,156     132,487
US Treasury futures sell contracts:    
US Long Bond, 45 contracts (USD) June 2013 (6,506,639 ) (6,676,875 ) (170,236 )
Net unrealized appreciation on futures contracts $ 8,178

Options written

Expiration
date
      Premiums
received
      Value
Call options
Foreign Exchange Option, Sell EUR/BRL, EUR 2,040,000
face amount covered by contracts, strike @ BRL 2.7700 July 2013 $ 25,400 $ (22,909 )
Foreign Exchange Option, Sell USD/BRL, USD 2,410,000
face amount covered by contracts, strike @ BRL 2.0300 June 2013 20,292 (17,973 )
Foreign Exchange Option, Sell USD/BRL, USD 1,350,000
face amount covered by contracts, strike @ BRL 2.0300 June 2013 11,813 (10,346 )
Foreign Exchange Option, Sell USD/BRL, USD 1,960,000
face amount covered by contracts, strike @ BRL 2.0800 February 2014 74,294 (76,910 )
Foreign Exchange Option, Sell USD/BRL, USD 4,080,000
face amount covered by contracts, strike @ BRL 2.2500 April 2014 98,868 (93,208 )
Foreign Exchange Option, Sell USD/CLP, USD 1,020,000
face amount covered by contracts, strike @ CLP 472.3000 May 2013     9,160   (4,640 )
Foreign Exchange Option, Sell USD/CLP, USD 1,020,000    
face amount covered by contracts, strike @ CLP 474.0000 June 2013 14,362 (10,487 )
Foreign Exchange Option, Sell USD/CZK, USD 1,910,000
face amount covered by contracts, strike @ CZK 20.5000 July 2013 16,808 (10,795 )
Foreign Exchange Option, Sell USD/THB, USD 1,020,000
face amount covered by contracts, strike @ THB 32.0000 October 2013 3,427 (3,427 )
Foreign Exchange Option, Sell USD/THB, USD 1,700,000
face amount covered by contracts, strike @ THB 31.0000 October 2013 10,982 (9,193 )

15



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Options written (concluded)

Expiration
date
      Premiums
received
      Value
Put options
Foreign Exchange Option, Sell EUR/BRL, EUR 2,700,000
face amount covered by contracts, strike @ BRL 2.4400 June 2013 $ 7,687 $ (777 )
Foreign Exchange Option, Sell EUR/BRL, EUR 1,020,000
face amount covered by contracts, strike @ BRL 2.5600 July 2013 11,684 (7,466 )
Foreign Exchange Option, Sell EUR/BRL, EUR 1,020,000
face amount covered by contracts, strike @ BRL 2.5500 July 2013 9,825 (6,636 )
Foreign Exchange Option, Sell EUR/BRL, EUR 3,400,000
face amount covered by contracts, strike @ BRL 2.4000 September 2013 15,630 (5,425 )
Foreign Exchange Option, Sell EUR/BRL, EUR 1,680,000
face amount covered by contracts, strike @ BRL 2.4000 September 2013 8,054 (2,612 )
Foreign Exchange Option, Sell EUR/MXN, EUR 1,020,000
face amount covered by contracts, strike @ MXN 15.5000 May 2013 3,111 (582 )
Foreign Exchange Option, Sell EUR/MXN, EUR 820,000
face amount covered by contracts, strike @ MXN 15.5000 July 2013 7,702 (3,521 )
Foreign Exchange Option, Sell EUR/MXN, EUR 1,020,000
face amount covered by contracts, strike @ MXN 15.5000 July 2013 7,125 (4,380 )
Foreign Exchange Option, Sell EUR/PLN, EUR 3,400,000
face amount covered by contracts, strike @ PLN 3.9000 October 2013 5,687 (3,904 )
Foreign Exchange Option, Sell EUR/PLN, EUR 3,000,000
face amount covered by contracts, strike @ PLN 3.9000 January 2014 12,506 (7,790 )
Foreign Exchange Option, Sell EUR/RUB, EUR 1,680,000
face amount covered by contracts, strike @ RUB 40.0000 July 2013 6,670 (6,804 )
Foreign Exchange Option, Sell EUR/TRY, EUR 4,260,000
face amount covered by contracts, strike @ TRY 2.2800 June 2013 6,703 (2,881 )
Foreign Exchange Option, Sell EUR/ZAR, EUR 1,360,000
face amount covered by contracts, strike @ ZAR 11.2000 June 2013 7,272 (3,083 )
Foreign Exchange Option, Sell EUR/ZAR, EUR 1,010,000
face amount covered by contracts, strike @ ZAR 11.0000 July 2013 4,611 (2,153 )
Foreign Exchange Option, Sell EUR/ZAR, EUR 2,040,000
face amount covered by contracts, strike @ ZAR 11.4000 July 2013 10,928 (15,526 )
Foreign Exchange Option, Sell EUR/ZAR, EUR 1,910,000
face amount covered by contracts, strike @ ZAR 11.0000 October 2013 19,768 (14,619 )
Foreign Exchange Option, Sell GBP/BRL, GBP 1,450,000
face amount covered by contracts, strike @ BRL 2.8000 June 2013 13,154 (3 )
Foreign Exchange Option, Sell GBP/BRL, GBP 2,410,000
face amount covered by contracts, strike @ BRL 2.7500 September 2013 23,984 (272 )
Foreign Exchange Option, Sell GBP/MXN, GBP 2,870,000
face amount covered by contracts, strike @ MXN 17.9000 September 2013 31,688 (20,153 )
Foreign Exchange Option, Sell GBP/RUB, GBP 3,900,000  
face amount covered by contracts, strike @ RUB 44.2000 September 2013 31,451 (6,731 )
Foreign Exchange Option, Sell GBP/ZAR, GBP 4,740,000
face amount covered by contracts, strike @ ZAR 12.7500 September 2013 58,297 (15,086 )
Foreign Exchange Option, Sell USD/BRL, USD 9,860,000
face amount covered by contracts, strike @ BRL 1.8000 April 2014   26,166 (20,188 )
Foreign Exchange Option, Sell USD/MXN, USD 6,740,000
face amount covered by contracts, strike @ MXN 11.5000 October 2013 31,354 (25,640 )
Foreign Exchange Option, Sell USD/ZAR, USD 1,360,000
face amount covered by contracts, strike @ ZAR 8.6500 June 2013 4,529   (5,979 )
Foreign Exchange Option, Sell USD/ZAR, USD 3,740,000
face amount covered by contracts, strike @ ZAR 8.4000 September 2013 18,737   (20,379 )
Total options written $ 669,729 $ (462,478 )

16



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Foreign exchange written option activity for the period ended April 30, 2013 was as follows:

Premiums
received
Foreign exchange options outstanding at October 31, 2012 $ 43,987
Foreign exchange options written 2,254,343
Foreign exchange options terminated in closing purchase transactions (1,624,254 )
Foreign exchange options expired prior to exercise (4,347 )
Foreign exchange options outstanding at April 30, 2013 $ 669,729

Currency swap agreements4

Counterparty      Pay
contracts
     Receive
contracts
     Termination
date
     Pay
rate10
     Receive
rate10
     Upfront
payments
     Value      Unrealized
appreciation/
(depreciation)
6 month
BB INR   308,000,000 USD 5,966,670 12/05/16   4.500% USD LIBOR $ 444,005 $ 444,005
6 month  
BB PHP 85,653,500 USD 2,085,803   12/18/15 1.300   USD LIBOR     (16,822 ) (16,822 )
      6 month        
CITI USD 3,206,107 COP  6,300,000,000 06/11/13 USD LIBOR 5.250% 316,172 316,172
$ 743,355 $ 743,355

Interest rate swap agreements

Counterparty      Notional
amount
     Termination
date
     Payments
made by
the Fund
10
     Payments
received by
the Fund10
     Upfront
payments
     Value      Unrealized
appreciation/
(depreciation)
BB KRW  3,250,000,000 08/19/16 3.530% 3 month CD KSDA $ (84,800 ) $ (84,800 )
BB MYR 10,700,000 08/23/22 3 month KLIBOR 3.880% 14,570 14,570
CITI KRW 2,900,000,000 08/26/16 3.410 3 month CD KSDA     (66,634 ) (66,634 )
CITI MYR 1,950,000 08/24/15 3 month KLIBOR 3.505 5,166 5,166
CITI   MYR 14,550,000 08/23/22 3 month KLIBOR   3.860 15,869 15,869
DB MYR 7,650,000 08/24/15   3 month KLIBOR 3.500 19,960   19,960
DB MYR 20,450,000   08/23/22 3 month KLIBOR 3.860 22,305   22,305
DB TWD 85,000,000 08/22/16 1.325 3 month TWCPBA   (29,842 )   (29,842 )
GSI TWD 85,500,000 08/26/16 1.280 3 month TWCPBA (25,907 ) (25,907 )
MLI MXN 7,200,000 11/16/28 28 day MXIBTIIE 8.830 201,461 201,461
MLI MXN 7,000,000 11/21/28 28 day MXIBTIIE 8.610 181,986 181,986  
$ 254,134 $ 254,134

17



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Credit default swaps on credit indices—buy protection11

Counterparty       Referenced
Index12
      Notional
amount
      Termination
date
      Payments
made
by the
Fund10
      Upfront
payments
received
      Value       Unrealized
depreciation
BB CDX.EM Series 18 Index USD 2,350,000 12/20/17   5.000 %   $ 282,470 $ (289,015 )    $ (6,545 )   
DB CDX.EM Series 17 Index USD 1,900,000   06/20/17 5.000   207,100 (213,096 )   (5,996 )
GSI CDX.EM Series 18 Index USD 4,050,000 12/20/17 5.000     470,775   (498,089 ) (27,314 )
MLI CDX.EM Series 18 Index USD 1,100,000 12/20/17 5.000 128,700   (135,284 ) (6,584 )
$ 1,089,045 $ (1,135,484 ) $ (46,439 )

Credit default swaps on sovereign issues—sell protection13

Counterparty      Referenced
Obligation12
     Notional
amount
     Termination
date
     Payments
received
by the
Fund10
     Upfront
payments
(made)/
received
     Value      Unrealized
appreciation
     Credit
spread14
BB Federation of Russia
bond, 2.250%,
due 03/31/30 USD  2,900,000 12/20/22 1.000 % $ 277,973 $ (204,734 ) $ 73,239 1.853 %
BB Federal Republic of
  Brazil bond, 12.250%,
due 03/06/30 USD 180,000 06/20/22 1.000 14,775 (6,673 ) 8,102 1.466
CITI Republic of Korea bond,  
4.875%, due 09/22/14 USD 2,860,000 06/20/18 1.000 (25,725 ) 45,324 19,599   0.708
CSI United Mexican      
States bond, 7.500%,    
due 04/08/33 USD 1,000,000 02/20/14 4.170   40,791   40,791 0.184
DB Federal Republic of
Brazil bond, 12.250%,  
due 03/06/30 USD 800,000 06/20/22 1.000 64,908 (29,657 )   35,251 1.466
$ 331,931 $ (154,949 ) $ 176,982

18



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


The following is a summary of the fair valuations according to the inputs used as of April 30, 2013 in valuing the Fund’s investments:

Description Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)
      Other significant
observable inputs
(Level 2)
      Unobservable
inputs
(Level 3)
      Total
Corporate bonds   $  —   $ 55,946,910   $— $ 55,946,910
Non-US government obligations 207,761,655   — 207,761,655
Convertible bond 3,541,813   — 3,541,813
Structured notes 18,908,947   — 18,908,947
Short-term investment   745,439     — 745,439
Options purchased   732,081   — 732,081
Forward foreign currency contracts, net 1,088,639   — 1,088,639
Futures contracts, net   8,178   — 8,178
Options written (462,478 )   —     (462,478 )
Swap agreements, net (292,944 )   — (292,944 )
Total $ 8,178 $ 287,970,062 $— $ 287,978,240

Level 3 rollforward disclosure

The following is a rollforward of the Fund’s investments that were valued using unobservable inputs for the period:

Corporate
bonds
Assets
Beginning balance $ 440
Purchases
Issuances
Sales 0
Accrued discounts (premiums)
Total realized gain (loss) (4,243,962 )
Change in net unrealized appreciation/depreciation 4,243,522
Transfers into Level 3  
Transfers out of Level 3
Ending balance $

19



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Portfolio footnotes

*  

Non-income producing security.

1   Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At April 30, 2013, the value of these securities amounted to $60,855,864 or 20.70% of net assets.
2   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 2013, the value of these securities amounted to $49,371,461 or 16.79% of net assets.
3   Variable or floating rate security — The interest rate shown is the current rate as of April 30, 2013 and changes periodically.
4   Security is illiquid. At April 30, 2013, the value of this security and other illiquid derivative instruments amounted to $2,462,184 or 0.84% of net assets.
5   Security pays, when required, a floating rate that is determined annually based on the Argentina GDP.
6   Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities’ principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
7   Rate shown reflects annualized yield at April 30, 2013 on zero coupon bond.
8   Step bond — Coupon rate increases in increments to maturity. Rate disclosed is as of April 30, 2013. Maturity date disclosed is the ultimate maturity date.
9   The table below details the Fund’s investment in a fund advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description       Value
10/31/12
      Purchases
during the
six months
ended
04/30/13
      Sales
during the
six months
ended
04/30/13
      Value
04/30/13
      Income
earned from
affiliate for the
six months
ended
04/30/13
UBS Cash Management Prime Relationship Fund $11,067,701 $38,580,343 $48,902,605 $745,439 $5,888

10  

Payments made or received are based on the notional amount.

11   If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the underlying securities comprising the referenced index.
12   Payments from/to the counterparty will be received/made upon the occurrence of bankruptcy and/or restructuring event with respect to the referenced index/obligation.
13   If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.
14   Credit spreads, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default or other credit event occurring for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity.

20



Global High Income Fund Inc.
Portfolio of investments—April 30, 2013
(unaudited)


Portfolio acronyms              
CD KSDA        Korean Securities Dealer Association 91-day KLIBOR Korea Interbank Offered Rate
Certificate of Deposit Rate LIBOR London Interbank Offered Rate
GDP Gross Domestic Product MXIBTIIE Mexico Interbank TIIE 28 Day Rate
JSC Joint stock company OJSC Open joint stock company
TWCPBA Taiwan Secondary Markets Bills Rate
  
Counterparty abbreviations
BB Barclays Bank PLC JPMCB JPMorgan Chase Bank
CITI Citibank NA MLI Merrill Lynch International
CSI Credit Suisse International RBS Royal Bank of Scotland PLC
DB Deutsche Bank AG SSB State Street Bank & Trust
GSI Goldman Sachs International
 
Currency abbreviations
ARS Argentine Peso MYR Malaysian Ringgit
BRL Brazilian Real NGN Nigerian Naira
CLP Chilean Peso PEN Peru Nuevo Sol
CNY Chinese Yuan PHP Philippine Peso
COP Colombian Peso PLN Polish Zloty
CZK Czech Koruna RON Romanian Leu
EUR Euro RUB Russian Ruble
GBP Great Britain Pound SAR Saudi Arabian Riyal
HKD Hong Kong Dollar SGD Singapore Dollar
HUF Hungarian Forint THB Thai Baht
IDR Indonesian Rupiah TRY Turkish Lira
INR Indian Rupee TWD New Taiwan Dollar
KRW Korean Won UAH Ukrainian Hryvna
LKR Sri Lanka Rupee USD United States Dollar
MXN Mexican Peso ZAR South African Rand

  See accompanying notes to financial statements 21



Global High Income Fund Inc.
Statement of assets and liabilities—April 30, 2013
(unaudited)


Assets:      
Investments in securities of unaffiliated issuers, at value (cost—$262,179,276) $ 286,891,406
Investment in affiliated issuer, at value (cost—$745,439) 745,439
Total investments, at value (cost—$262,924,715) 287,636,845
Foreign currency, at value (cost—$623,476) 621,580
Cash 1,412,571
Interest receivable 4,856,840
Receivable for investments sold 1,320,577
Foreign tax reclaims receivable 113,226
Due from broker 3,558
Cash collateral for futures contracts 94,350
Cash collateral for swap agreements 1,270,000
Outstanding swap agreements, at value1 1,307,609
Unrealized appreciation on forward foreign currency contracts 2,014,120
Other assets 20,063
Total assets 300,671,339
 
Liabilities:
Payable for investments purchased 2,781,187
Outstanding swap agreements, at value1 1,600,553
Unrealized depreciation on forward foreign currency contracts 925,481
Options written, at value (premiums received—$669,729) 462,478
Deferred capital gain country tax 337,421
Payable for investment advisory and administration fees 255,970
Directors’ fees payable 4,199
Accrued expenses and other liabilities 258,886
Total liabilities 6,626,175
 
Net assets:2
Capital stock—$0.001 par value; 100,000,000 shares authorized; 21,591,836 shares issued and outstanding $ 280,838,723
Distributions in excess of net investment income (8,705,191 )
Accumulated net realized loss   (4,895,028 )
Net unrealized appreciation   26,806,660
Net assets $ 294,045,164
Net asset value per share $ 13.62

1   Net upfront payments received by the Fund on outstanding swap agreements amounted to $1,420,976.
2   The actual sources of the Fund’s fiscal year 2013 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 2013 fiscal year.

22 See accompanying notes to financial statements  



Global High Income Fund Inc.
Statement of operations


      For the six
months ended
April 30, 2013
(unaudited)
Investment income:
Interest income, net of foreign withholding taxes of $174,436 $ 10,392,709
Affiliated interest 5,888
Total income 10,398,597
 
Expenses:
Investment advisory and administration fees 1,813,708
Custody and accounting fees 159,973
Professional fees 63,160
Reports and notices to shareholders 42,099  
Listing fees 11,766
Directors’ fees 8,660
Transfer agency fees 8,275  
Insurance expense   3,137
Other expenses   19,289
Total expenses 2,130,067
Less: Fee waivers by investment advisor and administrator (263,366 )
Net expenses   1,866,701
Net investment income 8,531,896
 
Realized and unrealized gains (losses)
from investment activities:
Net realized gain (loss) on:
       Investments (3,025,329 )
       Futures contracts 129,723
       Options written 321,406
       Swap agreements (955,134 )
       Forward foreign currency contracts 552,090
       Foreign currency transactions (1,669,376 )
Change in net unrealized appreciation/depreciation on:
       Investments 8,988,299
       Futures contracts (44,613 )
       Options written 175,051
       Swap agreements 1,037,331
       Forward foreign currency contracts (102,286 )
       Translation of other assets and liabilities denominated in foreign currency 12,430
Net realized and unrealized gain from investment activities 5,419,592
Net increase in net assets resulting from operations $ 13,951,488

  See accompanying notes to financial statements 23



Global High Income Fund Inc.
Statement of changes in net assets


      For the six
months ended
April 30, 2013
(unaudited)
      For the
year ended
October 31, 2012
From operations:
Net investment income $ 8,531,896 $ 17,115,420
Net realized gain (loss) (4,646,620 ) 7,037,450
Change in net unrealized appreciation/depreciation 10,066,212 6,767,688
Net increase in net assets resulting from operations 13,951,488 30,920,558
Dividends and distributions to  
shareholders from:    
Net investment income (10,273,396 )1     (15,338,633 )
Net realized gains     (6,013,534 )
Total dividends and distributions to shareholders (10,273,396 ) (21,352,167 )
Net increase in net assets 3,678,092 9,568,391
Net assets:
Beginning of period   290,367,072   280,798,681  
End of period $ 294,045,164 $ 290,367,072
Distributions in excess of net investment income $ (8,705,191 )1 $ (6,963,691 )

1   The actual sources of the Fund’s fiscal year 2013 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 2013 fiscal year.

24 See accompanying notes to financial statements  



Global High Income Fund Inc.
Financial highlights


Selected data for a share of common stock outstanding throughout each period is presented below:

For the
six months
ended
April 30, 2013
(unaudited)




For the years ended October 31,
            2012       2011       2010       2009       2008
Net asset value, beginning of period $13.45 $13.00 $14.16 $12.90 $9.82 $15.26
Net investment income1 0.40 0.79 0.63 0.77 0.76 0.84
Net realized and unrealized gains (losses) 0.25 0.65 (0.39 ) 1.55 3.30 (4.28 )
Net increase (decrease) from operations 0.65 1.44 0.24 2.32 4.06 (3.44 )
Dividends from net investment income (0.48 )2 (0.71 ) (1.37 ) (1.06 ) (0.72 ) (0.95 )
Distributions from net realized gains (0.28 ) (0.73 )
Return of capital (0.03 ) (0.26 ) (0.32 )
Total dividends, distributions and return of capital (0.48 ) (0.99 ) (1.40 ) (1.06 ) (0.98 ) (2.00 )
Net asset value, end of period $13.62 $13.45 $13.00 $14.16 $12.90 $9.82
Market price, end of period $12.94 $12.74 $12.54 $14.98 $11.47 $8.22
Total net asset value return3 4.87 % 11.53 % 1.95 % 18.91 % 43.02 % (25.76 )%
Total market price return4 5.34 % 9.79 % (6.98 )% 41.52 % 54.20 % (33.99 )%
Ratios to average net assets:
Expenses before fee waivers 1.47 %5 1.48 % 1.50 % 1.54 % 1.56 % 1.48 %
Expenses after fee waivers 1.29 %5 1.36 % 1.44 % 1.47 % 1.51 % 1.39 %
Net investment income 5.88 %5 6.10 % 4.64 % 5.76 % 6.71 % 6.01 %
Supplemental data:
Net assets, end of period (000’s) $294,045     $290,367 $280,799 $305,683 $278,635 $212,049
Portfolio turnover rate 25 % 52 % 71 % 84 % 104 % 83 %

1   Calculated using the average shares method.
2 The actual sources of the Fund’s fiscal year 2013 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 2013 fiscal year.
3 Total net asset value return is calculated assuming a $10,000 purchase of common stock at the current net asset value on the first day of each period reported and a sale at the current net asset value on the last day of each period reported, and assuming reinvestment of dividends and other distributions at the net asset value on the payable dates. Total net asset value return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or a sale of Fund shares. Total return based on net asset value is hypothetical as investors cannot purchase or sell Fund shares at the net asset value but only at market prices. Total net asset value return for the period of less than one year has not been annualized.
4 Total market price return is calculated assuming a $10,000 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 at prices obtained under the Fund’s Dividend Reinvestment Plan. Total market price return does not reflect brokerage commissions or the deduction of taxes that a shareholder would pay on Fund dividends/distributions or a sale of Fund shares. Total market price return for the period of less than one year has not been annualized.
5 Annualized.

  See accompanying notes to financial statements 25



Global High Income Fund Inc.
Notes to financial statements (unaudited)


Organization and significant accounting policies
Global High Income Fund Inc. (the “Fund”) was incorporated in Maryland on February 23, 1993 and is registered with the US Securities and Exchange Commission (“SEC”) 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 its primary objective.

In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnification for certain liabilities. 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative US generally accepted accounting principles (“US GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative US GAAP for SEC registrants. The Fund’s financial statements are prepared in accordance with US GAAP, which may require the use of management estimates and assumptions. 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 of securities. The Fund normally obtains market values for its securities and other instruments from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, official market closing prices, current market quotations or valuations from computerized evaluation systems that derive values based on comparable securities or instruments. An evaluation 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 or instruments. Securities and other instruments also may be valued based on appraisals derived from information concerning the security or instrument or similar securities or instruments received from recognized dealers in those holdings. Securities and instruments 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 on the valuation date available prior to valuation. Securities and instruments which are listed on US and foreign stock exchanges normally are valued at the market closing price, 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 or instruments are traded on more than one exchange, the securities and instruments are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. (“UBS Global AM” or the “Advisor”), the investment advisor 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 and Basel, Switzerland and operations in many areas of the financial services industry. If a market value is not readily available from an independent pricing source for a particular security or instrument, that security or instrument is valued at fair value as determined in good faith by or under the direction of the Fund’s Board of Directors (the “Board”). Various factors may be reviewed in order to make a good faith determination of a security’s or instrument’s fair value. These factors include, but are not limited to, fundamental analytical data relating to the investment; the nature and duration of restrictions on disposition of the securities or instruments; and the evaluation of forces which influence the market in which the securities or instruments are purchased and sold. Foreign currency exchange rates are generally determined as of the close of the New York Stock Exchange (”NYSE”).

26



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

Certain securities or instruments in which the Fund invests are traded in markets that close before 4:00 p.m., Eastern time. Normally, developments that occur between the close of the foreign markets and 4:00 p.m., Eastern time, will not be reflected in the Fund’s net asset value. However, if the Fund determines that such developments are so significant that they will materially affect the value of the Fund’s securities or instruments, the Fund may adjust the previous closing prices to reflect what is believed to be the fair value of these securities or instruments as of 4:00 p.m., Eastern time.

The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with sixty days or less remaining to maturity, unless the Board determines that this does not represent fair value. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Fund’s use of the practical expedient within ASC Topic 820, investments in non-registered investment companies are also valued at the daily net asset value. All investments quoted in foreign currencies are valued daily in US dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Fund’s custodian and accounting agent.

Futures contracts are generally valued at the settlement price established each day on the exchange on which they are traded. Forward foreign currency contracts are valued daily using forward exchange rates quoted by independent pricing services.

Swaps are marked-to-market daily based upon values from third party vendors or quotations from market makers to the extent available, and the change in value, if any, is recorded as an unrealized gain or loss on the Statement of assets and liabilities. In the event that market quotations are not readily available or deemed unreliable, the swap is valued at fair value as determined in good faith by or under the direction of the Board (or a committee designated by it).

The Board has delegated to the UBS Global Asset Management Global Valuation Committee (“GVC”) the responsibility for making fair value determinations with respect to the Fund’s portfolio holdings. The GVC is comprised of representatives of management, including members of the investment team.

The GVC provides reports to the Board at each quarterly meeting regarding any securities or instruments that have been fair valued, valued pursuant to standing instructions approved by the GVC, or where non-vendor pricing sources had been used to make fair value determinations when sufficient information exists during the prior quarter. Fair valuation determinations are subject to review at least monthly by the GVC during scheduled meetings. Pricing decisions, processes, and controls over fair value determinations are subject to internal and external reviews, including annual internal compliance reviews and periodic internal audit reviews.

The types of securities or instruments for which such fair value pricing may be necessary include, but are not limited to: foreign securities and instruments under some circumstances, as discussed below, securities of an issuer that has entered into a restructuring; securities or instruments whose trading has been halted or suspended; fixed income securities that are in default and for which there is no current market value quotation; and securities or instruments that are restricted as to transfer or resale. The need to fair value the Fund’s portfolio securities and other instruments may also result from low trading volume in foreign markets or thinly traded domestic securities or instruments, and when a security is subject to a trading limit or collar on the exchange or market on which it is primarily traded reaches the “limit up” or “limit down” price and no trading has taken place at that price. Various factors may be reviewed in order to make a good faith determination of a security’s or instrument’s fair value. These factors include, but are not limited to, fundamental analytical data relating to the investment; the nature and duration of restrictions on disposition of securities or instruments; and the evaluation of forces which influence the market in which the securities or instruments are purchased and sold. Valuing securities and other instruments

27



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

at fair value involves greater reliance on judgment than valuing securities and other instruments that have readily available market quotations. Fair value determinations can also involve reliance on quantitative models employed by a fair value pricing service.

US GAAP requires disclosure regarding the various inputs that are used in determining the value of the Fund’s investments. These inputs are summarized into the three broad levels listed below:

Level 1—Unadjusted quoted prices in active markets for identical investments.

Level 2—Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risk.

Level 3—Unobservable inputs inclusive of the Fund’s own assumptions in determining the fair value of investments.

A fair value hierarchy has been included near the end of the Fund’s Portfolio of investments.

In January 2013, Accounting Standards Update 2013-01 (“ASU 2013-01”), “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, replaced Accounting Standards Update 2011-11 (“ASU 2011-11”), “Disclosures about Offsetting Assets and Liabilities”. ASU 2013-01 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 was intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. ASU 2013-01 limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. Management is currently evaluating the application of ASU 2013-01 and its impact, if any, on the Fund’s financial statements.

The provisions of ASC Topic 815 “Derivatives and Hedging” (“ASC Topic 815”) require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements. Since investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of operations, they do not qualify for hedge accounting under ASC Topic 815. Accordingly, even though the Fund’s investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under ASC Topic 815. ASC Topic 815 requires that (1) objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation, (2) the fair values of derivative instruments and their gains and losses be disclosed in a tabular format, and (3) information be disclosed about credit-risk contingent features of derivatives contracts. Details of this disclosure can be found below as well as in the Portfolio of investments. Swap agreements, forward foreign currency contracts, swaptions and options written entered into by the Fund may contain credit-risk related contingent features that could be triggered subject to certain circumstances. Such circumstances include agreed upon net asset value thresholds. If triggered, the derivative counterparty could request additional cash margin and/or terminate the derivative contract. The aggregate fair value of the derivative contracts that are in a net liability position that contain these triggers can be found in the Portfolio of investments. The aggregate fair value of assets that are already posted as collateral as of April 30, 2013 is reflected in the Statement of assets and liabilities. If the applicable credit-risk related contingent features were triggered as of April 30, 2013, the Fund would be required to post additional collateral or may be required to terminate the contracts and settle any amounts outstanding. The volume of derivatives that is presented in the Portfolio of investments of the Fund is consistent with the derivative activity during the period ended April 30, 2013. The Fund may be a seller of protection through credit default swap agreements which are by nature credit-risk contingent (the terms of these agreements can be found within the Portfolio of investments, with further discussion in the Notes to financial statements).

28



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

Disclosure of derivatives by underlying risk for the Fund as of and for the period ended April 30, 2013 is as follows:

Asset derivatives
      Interest
rate risk
      Credit
risk
      Foreign
exchange
risk
      Total
Forward contracts1         $         $  — $ 2,014,120   $ 2,014,120
Futures contracts2 178,414   178,414
Options purchased1     732,081 732,081
Swap agreements1 461,317   86,115 760,177   1,307,609
Total value $ 639,731 $ 86,115 $ 3,506,378 $ 4,232,224

Statement of assets and liabilities location: Options purchased are shown within investments in securities of unaffiliated issuers, at value, unrealized appreciation on forward foreign currency contracts and outstanding swap agreements, at value.
Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin, if any, is reported within the Statement of assets and liabilities within Due from broker.

Liability derivatives
      Interest
rate risk
      Credit
risk
      Foreign
exchange
risk
      Total
Forward contracts1 $  — $  —   $ (925,481 ) $ (925,481 )
Futures contracts2 (170,236 )       (170,236 )
Options written1       (462,478 )   (462,478 )
Swap agreements1 (207,183 ) (1,376,548 ) (16,822 ) (1,600,553 )
Total value $ (377,419 ) $ (1,376,548 ) $ (1,404,781 ) $ (3,158,748 )

Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts, written options, at value and outstanding swap agreements, at value.
Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin, if any, is reported within the Statement of assets and liabilities within Due to broker.

29



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

Activities in derivative instruments during the period ended April 30, 2013 were as follows:

      Interest
rate risk
      Credit
risk
      Foreign
exchange
risk
      Total
Net realized gain (loss)1
Forward contracts $  — $ $ 552,090 $ 552,090
Futures contracts 129,723 129,723  
Options purchased3 (1,571,586 ) (1,571,586 )
Options written 3,779   317,627 321,406
Swap agreements 28,993 (963,659 ) (20,468 ) (955,134 )
Total net realized gain (loss) $ 162,495 $ (963,659 ) $ (722,337 ) $ (1,523,501 )
Change in net unrealized appreciation/depreciation2      
Forward contracts $  — $ $ (102,286 ) $ (102,286 )
Futures contracts   (44,613 )     (44,613 )
Options purchased3 41,003   41,003
Options written 175,051   175,051
Swap agreements 228,361 737,349 71,621 1,037,331
Total change in net unrealized appreciation/depreciation $ 183,748 $ 737,349 $ 185,389 $ 1,109,486

Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts.
Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts, options written, swap agreements and forward foreign currency contracts.
Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and change in net unrealized appreciation/ depreciation on investments.

Restricted securities
The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult. Restricted securities are identified, if any, in the Portfolio of investments and information regarding them, is included in the Fund’s Portfolio footnotes.

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 Fund uses the foreign currency exchange rates determined as of the close of regular trading on the NYSE. For purposes of calculating the US dollar equivalent value of a non-US dollar denominated obligation, foreign currency amounts are translated into US 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

30



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

fluctuations in foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-denominated securities pursuant to US 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 US 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 US dollar value of portfolio securities denominated in a particular currency. The Fund may also use forward contracts in an attempt to enhance income or gains.

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 assets committed to the consummation of the forward contracts and not covered as provided in (1) above, as marked-to-market daily.

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 US 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 US and foreign fixed income markets in connection with a reallocation of the Fund’s assets or to manage the average duration of the Fund. The Fund may also use futures contracts in an attempt to enhance income or gains. 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, including interest rate risk. Risks of entering into futures contracts include the possibility that there may be an illiquid market or that a change in the value of the contract may not correlate with changes in the value of the underlying securities. To the extent that market prices move in an unexpected direction, there is a risk that the Fund will not achieve the anticipated benefits of the futures contract or may realize a loss.

Upon entering into a financial futures contract, the Fund is required to deliver 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 as part of Due to or Due from broker for financial statement purposes on a daily basis as an unrealized gain or loss on futures until the financial futures contract is closed or expires, at which time the net gain or loss is reclassified to realized gain or loss on futures.

Swap agreements
The Fund may engage in swap agreements, including but not limited to interest rate, currency, total return, and credit default swap agreements. The Fund expects to enter into these transactions to preserve a return or spread on a particular investment or to hedge a portion of the portfolio’s duration, to protect against any increase in the price of securities the Fund anticipates purchasing at a later date, to gain exposure to certain markets in the most economical way possible or in an attempt to enhance income or gains.

31



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

The Fund may enter into interest rate swap agreements with another party to receive or pay interest (e.g., an exchange of fixed rate payments for floating rate payments) to protect itself from interest rate fluctuations. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. In addition, the Fund may enter into interest rate cap and floor transactions which involve an agreement between two parties in which one party agrees to make payments to the other when a designated market interest rate goes above (in the case of a cap) or below (in the case of a floor) a designated level on pre-determined dates or during a specified period. Interest rate swap agreements are subject to general market risk, liquidity risk, counterparty risk and interest rate risk.

The Fund may enter into currency swap agreements with another party to receive or pay amounts based on changes in currency exchange rates in order to protect itself from or take advantage of exchange rate fluctuations. The Fund utilizes currency swaps to earn income and enhance returns as well as to manage the risk profile of the Fund. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified currency exchange rate(s) for a specified amount. Currency swap agreements are subject to general market risk, liquidity risk, counterparty risk, foreign exchange risk and interest rate risk.

Credit default swap agreements involve commitments to make or receive payments in the event of a default or other credit event of a referenced security. As a buyer, the Fund would make periodic payments to the counterparty, and the Fund would receive payments only upon the occurrence of a credit event. If no credit event occurs, the Fund will lose its periodic stream of payments over the term of the contract. However, if a credit event does occur, the Fund typically would receive full notional value for a reference obligation that may have little or no value. As a seller, the Fund would receive periodic payments from the counterparty, and the Fund would make payments only upon the occurrence of a credit event. If no credit event occurs, the Fund will retain the periodic stream of payments it received over the term of the contract. However, if a credit event occurs, the Fund will pay full notional value for a reference obligation that may have little or no value. Credit default swaps may involve greater risks than if the Fund had invested in the reference obligation directly and are subject to general market risk, liquidity risk, counterparty risk and credit risk.

Credit default swap agreements on sovereign issues of an emerging market country involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in delivery of a security with a value other than had been anticipated (such as a party’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues or sovereign issues of an emerging market country to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of April 30, 2013 for which the Fund is the seller of protection are disclosed under the section “Credit default swaps on sovereign issues—sell protection” in the Notes to portfolio of investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into, if any, by the Fund for the same referenced entity or entities.

32



Global High Income Fund Inc.
Notes to financial statements (unaudited)
 

The use of swap agreements involves investment techniques and risks different from those associated with ordinary portfolio security transactions. If UBS Global AM is incorrect in its forecast of market values, interest rates and other applicable factors, the investment performance of the Fund will be less favorable than it would have been if this investment technique was never used. Swap agreements do not involve the delivery of securities and are subject to counterparty risk. If the other party to a swap agreement defaults and fails to consummate the transaction, the Fund’s risk of loss will consist of the net amount of interest or other payments that the Fund is contractually entitled to receive. Therefore, the Fund would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.

The Fund accrues for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swap agreements on the Statement of assets and liabilities. Once interim payments are settled in cash, the net amount is recorded as realized gain/loss on swap agreements, in addition to realized gain/loss recorded upon the termination of swap agreements on the Statement of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation on swap agreements.

Structured notes
The Fund may invest in structured notes whose values are based on the price movements of a referenced security or index. The value of these structured notes will rise and fall in response to changes in the referenced security or index. On the maturity date of each structured note, the Fund will receive a payment from a counterparty based on the value of the referenced security or index (notional amount multiplied by the price of the referenced security or index) and record a realized gain or loss.

Structured notes may present a greater degree of market risk than many types of securities and may be more volatile and less liquid than less complex securities. Structured notes are also subject to the risk that the issuer of the structured notes may fail to perform its contractual obligations.

Option writing
The Fund may write (sell) put and call options on foreign or US securities, indices, foreign currencies and interest rate swaps (commonly referred to as swaptions), in order to gain exposure to or protect against changes in the markets. When the Fund writes a call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s Statement of assets and liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. If an option which the Fund has written either expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option which the Fund has written is exercised, the Fund recognizes a realized gain or loss (long-term or short-term, depending on the holding period of the underlying security) from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. If a put option which the Fund has written is exercised, the amount of the premium originally received reduces the cost of the security or derivative instrument which the Fund purchases upon exercise of the option.

In writing an option, the Fund bears the market risk of an unfavorable change in the price of the derivative instrument, security, index or currency underlying the written option. Exercise of an option written by the Fund could result in the Fund selling or buying a derivative instrument, security or currency at a price different from current market value.

33



Global High Income Fund Inc.
Notes to financial statements (unaudited)


Purchased options
The Fund may purchase put and call options on foreign or US securities, indices, foreign currencies and interest rate swaps (commonly referred to as swaptions), as well as exchange listed call options on particular market segment indices to achieve temporary exposure to a specific security, currency, industry or geographic region. Purchasing call options tends to increase exposure to the underlying instrument. Purchasing put options tends to decrease exposure to the underlying instrument. The Fund pays a premium which is included in the Statement of assets and liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying futures, security or currency transaction to determine the realized gain or loss.

Dividends and distributions
Dividends and distributions to shareholders are recorded on the ex-distribution date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital are determined in accordance with income tax regulations, which may differ from US GAAP. 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 US securities. 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 US companies and US 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, state or region.

Investment advisor and administrator and other transactions with related entities
The Fund’s Board has approved an investment advisory and administration contract (“Advisory Contract”) with UBS Global AM. 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. Since August 1, 2005, UBS Global AM has contractually agreed to waive compensation otherwise payable to it to reduce the fee it receives under the Advisory Contract so that it is paid at the annual rate of 1.25% of the Fund’s average weekly net assets on assets up to $200 million, and at the annual rate of 1.00% of the Fund’s average weekly net assets on assets above $200 million. This fee reduction “breakpoint” continues indefinitely unless the Board agrees to any change. Additionally, effective August 1, 2012, through July 31, 2013, UBS Global AM has agreed voluntarily to waive compensation otherwise payable to it to reduce the fee it receives under the Advisory Contract so that it is paid at the following annual rates:

Average weekly net assets       Advisory fee
Up to $200 million 1.10 %
Above $200 million   1.00 %

At April 30, 2013, the Fund owed UBS Global AM $255,970 which is composed of $299,390 of investment advisory and administration fees less fees waived of $43,420. For the six months ended April 30, 2013, UBS Global AM waived $263,366 of investment advisory and administration fees from the Fund.

34



Global High Income Fund Inc.
Notes to financial statements (unaudited)


Additional information regarding compensation to affiliate of a board member
Professor Meyer Feldberg serves as a senior advisor to Morgan Stanley, a financial services firm with which the Fund may conduct transactions, resulting in him being an interested director of the Fund. The Fund has been informed that Professor Feldberg’s role at Morgan Stanley does not involve matters directly affecting any UBS funds. Fund transactions are executed through Morgan Stanley based on that firm’s ability to provide best execution of the transactions. During the six months ended April 30, 2013, the Fund purchased and sold certain securities (e.g., fixed income securities) in principal trades with Morgan Stanley having an aggregate value of $1,139,718. Morgan Stanley received compensation in connection with these trades, which may have been in the form of a “mark-up” or “mark-down” of the price of the securities, a fee from the issuer for maintaining a commercial paper program, or some other form of compensation. Although the precise amount of this compensation is not generally known by UBS Global AM, UBS Global AM believes that under normal circumstances it represents a small portion of the total value of the transactions.

Securities lending
The Fund may lend securities up to 33⅓% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, cash equivalents or US government securities in an amount at least equal to 102% of the market value of the securities loaned with respect to domestic securities and 105% of the market value of the securities loaned with respect to foreign securities, 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 US government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. The Fund did not lend any securities during the six months ended April 30, 2013.

Capital stock
There are 100,000,000 shares of $0.001 par value common stock authorized and 21,591,836 shares outstanding at April 30, 2013. For the six months ended April 30, 2013 and for the year ended October 31, 2012, there were no transactions involving common stock.

Purchases and sales of securities
For the six months ended April 30, 2013, aggregate purchases and sales of portfolio securities, excluding short-term securities, were $76,205,935 and $69,268,692, respectively.

Federal tax status
It is the Fund’s policy to comply with all requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. In addition, by distributing during each calendar year substantially all of its net investment income, net realized capital gains and certain other amounts, if any, the Fund intends not to be subject to a federal excise tax. Accordingly, no federal income tax provision was required.

The tax character of distributions paid during the year ended October 31, 2012 was as follows:

Distributions paid from: 2012
Ordinary income $ 15,338,633
Net long-term capital gains 6,013,534
Total distributions paid $ 21,352,167

35



Global High Income Fund Inc.
Notes to financial statements (unaudited)


The tax character of distributions paid and components of accumulated earnings (deficit) on a tax basis for the current fiscal year will be determined after the Fund’s fiscal year ending October 31, 2013.

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized by the Fund after December 31, 2010 may be carried forward indefinitely, and retain their character as short term and/or long term losses. The Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

At October 31, 2012 the Fund had no pre-enactment capital loss carryforwards for federal income tax purposes available to offset future capital gains.

As of and during the period ended April 30, 2013, the Fund did not have any liabilities for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of operations. During the period, the Fund did not incur any interest or penalties.

Each of the tax years in the four year period ended October 31, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.

36



Global High Income Fund Inc.
General information (unaudited)


The Fund
Global High Income 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. There can be no assurance that the Fund’s investment objective will be achieved. The Fund’s investment advisor and administrator is UBS Global Asset Management (Americas) Inc. (“UBS Global AM”).

Shareholder information
The Fund’s NYSE trading symbol is “GHI.” Net asset value and market price information as well as other information about the Fund is updated each business day on UBS’s web site at the following internet address: http://globalam-us.ubs.com/corpweb/closedendedfunds.do.

Shareholder meeting information
An annual meeting of shareholders of the Fund was held on February 21, 2013. At the meeting, the two nominees as Class III directors, namely Richard R. Burt and Meyer Feldberg, were elected to serve as board members for three year terms and until their successors are duly elected and qualified or until they retire, resign or are earlier removed. The shares were voted as indicated below:

To vote for or withhold authority in the election of: Shares
voted for
      Shares
withhold
authority
Richard R. Burt 18,963,223    956,241   
Meyer Feldberg 18,893,806 1,025,657

The following persons’ terms of office as directors also continued after the annual meeting given that they are in other director classes: Richard Q. Armstrong, Alan S. Bernikow, Bernard H. Garil, Barry M. Mandinach and Heather R. Higgins. The Fund is not aware of any broker non-votes. (Broker non-votes are shares held in street name for which the broker indicates that instructions have not been received from the beneficial owners or other persons entitled to vote and for which the broker does not have discretionary voting authority.)

Quarterly Form N-Q portfolio schedule
The Fund will file its complete schedule of portfolio holdings with the Securities and Exchange Commission (“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 Web site at http://www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-202-551-8090. Additionally, you may obtain copies of Form N-Q from the Fund upon request by calling 1 888-793 8637.

Proxy voting policies, procedures and record
You may obtain a description of the Fund’s (1) proxy voting policies (2) proxy voting procedures, and (3) information regarding how the Fund voted any proxies related to portfolio securities during the most recent 12-month period ended June 30 for which an SEC filing has been made, without charge, upon request by contacting the Fund directly at 1-888-793 8637, online on UBS’s Web site: http://www.ubs.com/us/en/asset_management/individual_investors/ closed_end_funds.html or on the EDGAR Database on the SEC’s Web site (http://www.sec.gov).

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,

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Global High Income Fund Inc.
General information (unaudited)


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/distribution 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/distribution will be equal to the result obtained by dividing the amount of the dividend/distribution 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 agent’s 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 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 BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035. For further information regarding the Plan, you may also contact the transfer agent directly at 1-866-352 5528.

Distribution policy
The Fund’s Board adopted a managed distribution policy in December 1999, which was revised (1) effective June 2005, (2) effective August 2009 and (3) effective June 2012. Pursuant to the policy as in effect from December 1999 through early May 2005, the Fund made 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). The Board approved reducing the annualized rate for distribution pursuant to the policy from 11% to 9% effective beginning with the June 2005 monthly distribution. The Board approved a further reduction in the annualized rate for distributions pursuant to the policy from 9% to 8% in July 2009, effective beginning with the August 2009 monthly distribution. The Board approved a subsequent reduction

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