ADDING and REPLACING Strategic Global Income Fund, Inc. - Distribution Declaration, Portfolio Statistics and Quarterly Commentary

by C-BW@CLARI.NET (UBS GLOBAL ASSET MANAGEMENT CLOSED-END FUNDS DESK VIA BIZWIRE) on 2003-07-14 21:50:28

NEW YORK--(BUSINESS WIRE)--July 14, 2003--ADD to BW5796 issued
July 14, 2003, (NY-STRATEGIC-GLOBAL), after second footnote xxx Prices
and yields will vary.

Strategic Global Income Fund, Inc. -- Second Quarter 2003
Commentary

Market and Strategy Review

Over the second quarter, we raised the Fund's duration by close to
one year, primarily by extending maturities in Denmark and core
Europe, and by adding duration exposure in Canada. As of June 30,
2003, the Fund's duration of approximately 4.8 years remained under
the interest rate durations of both the Citigroup World Government
Bond Index (5.8 years) and the JP Morgan Emerging Market Bond Index
(6.0 years), and its overarching strategy is one of moderate, although
increased, duration.
We made the decision to increase the Fund's duration as both the
Federal Open Market Committee and the European Central Bank continued
to ease monetary conditions. Judging from recent statements made by
the Fed governors, we do not expect to see an increase in rates based
solely on the initial strengthening of the economy. The governors have
yet to articulate just what conditions will lead them to consider
raising rates, but they have made clear their current willingness to
tolerate some reversion of disinflation as an "insurance policy"
against deflation. Such policy helps explain the low spread between
the fed funds rate and the two-year US Treasury note; ordinarily, we
would expect more of a risk premium after such an easing phase in the
interest rate cycle. We added duration primarily in Canada and Europe,
because we think those central bankers have more scope to ease policy
in the future than the Federal Reserve does.
While we have concentrated the Fund's higher quality credit
exposure in Canadian and European government bonds, we more broadly
concentrate credit exposure in US dollar bonds. The Fund has a large
weight in long-dated US dollar investment grade emerging market debt
-for example, in Mexico, Trinidad & Tobago, Qatar and Russia. Of
emerging market investments, Brazil presently appears to be the most
risky, but also offers substantial upside potential. Clearly, the Lula
administration needs to move forward with social security reform in
order to avoid the unwinding of the "virtuous circle" (stronger
currency, easier domestic debt roll-overs and lower debt:gdp ratios)
that the country has achieved in the last eight months.
We also increased the Fund's position in Mexican peso-denominated
Bonos. We think the Banco de Mexico's monetary policy will keep the
peso stable in the near-term and, as a consequence, Bonos yields are
attractive relative to UMS (United Mexican States) dollar-denominated
global yields.
Although we've adjusted the Fund's Euro exposure several times in
recent months, it continues to fluctuate at a range around 30% of net
assets. The Fund also maintains a substantial weight -- roughly 11% --
in the Australian and Canadian dollars. We think world monetary
policies aimed at staving-off deflation are positive for
commodity-producing economies like Australia and Canada, and are
therefore positive for their currencies.
The Fund is actively managed and its composition differs over
time. The views expressed are those of UBS Global Asset Management and
its member firms (and individual portfolio managers) as of June 30,
2003. The views are subject to change based on market conditions; they
are not intended to predict or guarantee the future performance of the
markets, any market segment or any fund. It should not be assumed that
investments in these securities were or will be profitable.

The corrected release reads:

Strategic Global Income Fund, Inc. - Distribution Declaration,
Portfolio Statistics and Quarterly Commentary

Strategic Global Income Fund, Inc. ("Fund") (NYSE: SGL), a
non-diversified, closed-end management investment company seeking a
high level of current income as a primary objective and capital
appreciation as a secondary objective through investments in U.S. and
foreign debt securities, today announced that the Fund's Board of
Directors declared a distribution of $0.1095 per share. The
distribution is payable on July 31, 2003 to shareholders of record as
of July 24, 2003. The ex-dividend date is July 22, 2003.
The Fund adopted a managed distribution policy in May 1998, which
was revised effective January 2000. Pursuant to the policy as
currently in effect, the Fund makes regular monthly distributions at
an annualized rate equal to 10% of the Fund's net asset value, as
determined as of the last day on which the New York Stock Exchange is
open for trading during the first week of that month.
Based on information available at this time, it is projected that
a portion of the Fund's current distribution, as well as that of the
Fund's distributions to date, will be a return of capital. Estimates
of the return of capital will be provided to shareholders with their
June distribution; however, these estimates are subject to change
based on the Fund's investment experience during the remainder of its
fiscal year. The actual sources of the Fund's 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. The actual amounts attributable to each of the sources
will be reported to each shareholder in January 2004 on Form 1099-DIV.
Monthly distributions based on a fixed percentage of the Fund's
net asset value may require the Fund to make multiple distributions of
long-term capital gains during a single fiscal year. The Fund has
received exemptive relief from the Securities and Exchange Commission
that enables it to do so. The Fund's Board will annually reassess the
annualized percentage of net assets at which the Fund's monthly
distributions will be made.


Portfolio Statistics (% of net assets) as of June 30, 2003:(1)


Asset Allocation by Currency Currency Exposure
----------------------------------------------- ----------------------
Investment Grade Debt 78.5% U.S. Dollar 51.8%
------------------------------------------ Euro & Euro
Non-U.S. Dollar Denominated 59.9% area (DKR,HUF) 29.3
------------------------------------------ Australia &
Euro-12 33.4 Canada 11.3
Canada 6.1 British Pound 4.6
Denmark 4.8 Other (less
Australia 5.2 than3%) 3.0
United Kingdom 4.7 ----------------------
Other (less than3%) 5.7 Total 100.0%



Characteristics
----------------------
Market Yield(2) 8.96%
U.S. Dollar Denominated 18.6% NAV Yield(2) 9.98%
------------------------------------------
U.S. Treasurys & Agencies 2.7 IPO Yield(2) 8.76%
Yankee Bonds Market Price $14.67
& Emerging Market Debt 11.9 Net Asset Value $13.17
U.S. Corporates 4.0 IPO Price (Feb. $15.00
1992)
----------------------



Credit Quality
----------------------
Non-Investment Grade U.S. Dollar A1/P1 4.8%
Denominated Debt 15.3% AAA 52.6
------------------------------------------ AA 9.3
Russia 6.0 A 4.4
Brazil 3.3 BBB 12.0
Other (less than3%) 6.0 BB 11.2
B 3.3
CCC .8

Net Interest 1.6
Receivable

Cash & Cash Equivalents 4.6%
Net Interest Receivable 1.6%
----------------------------------------------- ----------------------
Total 100% Total 100%
----------------------------------------------- ----------------------


(1) The Fund is actively managed and the composition of its
portfolio will vary over time.

(2) Market yield is calculated by multiplying the current month's
distribution by 12 and dividing by the month-end market price. NAV
yield is calculated by multiplying the current month's distribution by
12 and dividing by the month-end net asset value. IPO yield is
calculated by multiplying the current month's distribution by 12 and
dividing by the initial public offering price. Prices and yields will
vary.

Strategic Global Income Fund, Inc. -- Second Quarter 2003
Commentary

Market and Strategy Review

Over the second quarter, we raised the Fund's duration by close to
one year, primarily by extending maturities in Denmark and core
Europe, and by adding duration exposure in Canada. As of June 30,
2003, the Fund's duration of approximately 4.8 years remained under
the interest rate durations of both the Citigroup World Government
Bond Index (5.8 years) and the JP Morgan Emerging Market Bond Index
(6.0 years), and its overarching strategy is one of moderate, although
increased, duration.
We made the decision to increase the Fund's duration as both the
Federal Open Market Committee and the European Central Bank continued
to ease monetary conditions. Judging from recent statements made by
the Fed governors, we do not expect to see an increase in rates based
solely on the initial strengthening of the economy. The governors have
yet to articulate just what conditions will lead them to consider
raising rates, but they have made clear their current willingness to
tolerate some reversion of disinflation as an "insurance policy"
against deflation. Such policy helps explain the low spread between
the fed funds rate and the two-year US Treasury note; ordinarily, we
would expect more of a risk premium after such an easing phase in the
interest rate cycle. We added duration primarily in Canada and Europe,
because we think those central bankers have more scope to ease policy
in the future than the Federal Reserve does.
While we have concentrated the Fund's higher quality credit
exposure in Canadian and European government bonds, we more broadly
concentrate credit exposure in US dollar bonds. The Fund has a large
weight in long-dated US dollar investment grade emerging market debt
-for example, in Mexico, Trinidad & Tobago, Qatar and Russia. Of
emerging market investments, Brazil presently appears to be the most
risky, but also offers substantial upside potential. Clearly, the Lula
administration needs to move forward with social security reform in
order to avoid the unwinding of the "virtuous circle" (stronger
currency, easier domestic debt roll-overs and lower debt:gdp ratios)
that the country has achieved in the last eight months.
We also increased the Fund's position in Mexican peso-denominated
Bonos. We think the Banco de Mexico's monetary policy will keep the
peso stable in the near-term and, as a consequence, Bonos yields are
attractive relative to UMS (United Mexican States) dollar-denominated
global yields.
Although we've adjusted the Fund's Euro exposure several times in
recent months, it continues to fluctuate at a range around 30% of net
assets. The Fund also maintains a substantial weight -- roughly 11% --
in the Australian and Canadian dollars. We think world monetary
policies aimed at staving-off deflation are positive for
commodity-producing economies like Australia and Canada, and are
therefore positive for their currencies.
The Fund is actively managed and its composition differs over
time. The views expressed are those of UBS Global Asset Management and
its member firms (and individual portfolio managers) as of June 30,
2003. The views are subject to change based on market conditions; they
are not intended to predict or guarantee the future performance of the
markets, any market segment or any fund. It should not be assumed that
investments in these securities were or will be profitable.