Global High Income Fund Inc. – Fund Commentary

  Global High Income Fund Inc. – Fund Commentary

Business Wire

NEW YORK -- November 16, 2012

Global High Income Fund Inc. (the "Fund") (NYSE: GHI) is a non-diversified,
closed-end management investment company seeking high current income and,
secondarily, capital appreciation through investments primarily in securities
of emerging markets debt issuers.

Fund Commentary for the third quarter 2012 from UBS Global Asset Management
(Americas) Inc. (“UBS Global AM”), the Fund’s investment advisor

Market Review

The emerging market asset class generated strong results during the third
quarter. US dollar-denominated emerging markets debt, as measured by the JP
Morgan Emerging Markets Bond Index Global (EMBI Global), posted a return of
6.76% over the period. Local market investments (that is, investments
denominated in the local emerging markets currency) also rallied during the
quarter and returned 4.80%, based on the JP Morgan GBI-EM Global Diversified
Index. Appreciating local market currencies relative to the US dollar was the
main contributor in September, while declining yields drove returns in July
and August.

Risk aversion, which was elevated at times during the second quarter, was
largely replaced with robust risk appetite during the third quarter. Economic
fundamentals in most developed countries remained weak and growth rates in
emerging market countries generally decelerated during the third quarter. In
addition, numerous macro issues remained, including the ongoing European
sovereign debt crisis. However, these headwinds were largely overshadowed by
expectations for additional quantitative easing by developed country central
banks. New policy accommodation came to fruition in September, as the US
Federal Reserve Board (Fed), the European Central Bank and the Bank of Japan
all introduced new programs to help stimulate growth. Against this backdrop,
risk assets sharply rallied, including emerging markets debt and local
currencies. Of particular note, investment grade-rated emerging markets debt
posted stronger results in July and August and lower rated emerging markets
debt outperformed in September, as the "risk-on" environment gathered

Performance review

For the third quarter of 2012, the Fund posted a net asset value total return
of 7.40% and a market price total return of 9.18%. On a net asset value basis,
the Fund outperformed its benchmark, the Global High Income Fund Index (the
“Index”),^1 which returned 5.78% for the quarter.

Our allocation to US dollar-denominated bonds was beneficial for results. In
contrast to weak results during the prior quarter, our allocations to higher
risk countries like Argentina and Venezuela contributed to performance during
the third quarter. The Fund's quasi-sovereign bonds in both the Middle East
and Russia also boosted performance.^2 Our overweight to local currencies was
also rewarded in September, when they rallied versus the US dollar following
the Fed's unveiling of QE3, its latest quantitative easing initiative. In
particular, allocations to the Indian rupee, the Nigerian naira and the
Ghanaian cedi enhanced the Fund's results.

Detracting somewhat from performance during the quarter were the Fund's
underweights to high quality, US dollar-denominated debt from Brazil, Mexico
and Panama.


We maintain our positive long-term outlook for the emerging markets debt asset
class. However, we could see periods of volatility in the coming months, given
the previously mentioned unresolved macro issues, slowing growth in China and
the US “fiscal cliff” situation. Against this backdrop, we reduced certain
holdings during the third quarter to capture profits and reduce the Fund's
overall risk exposure. Should spreads widen from current levels, we would look
to add to our risk exposure.^3 While we have maintained our local currency
exposure, we have become more cautious in terms of local duration exposure
given our outlook for 2013. Exceptions to this are our long duration exposures
in Brazil, Mexico and India, based on country-specific events and
opportunities. Looking ahead, we feel the gap between growth rates between
emerging and developed counties will remain in place in 2013. We feel this
should be supportive for the emerging markets debt asset class over the

Disclaimers Regarding Fund Commentary - The Fund Commentary is intended to
assist shareholders in understanding how the Fund performed during the period
noted. Views and opinions were current as of the date of this press release.
They are not guarantees of performance or investment results and should not be
taken as investment advice. Investment decisions reflect a variety of factors,
and the Fund and UBS Global AM reserve the right to change 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.

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. Any Fund net asset value ("NAV")
returns cited in a Fund Commentary assume, for illustration only, that
dividends and other distributions, if any, were reinvested at the NAV on the
payable dates. Any Fund market price returns cited in a Fund Commentary assume
that all dividends and other distributions, if any, were reinvested at prices
obtained under the Fund's Dividend Reinvestment Plan. Returns for periods 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 Global High Income Fund Index is an unmanaged index compiled by the
advisor, currently constructed as follows: 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
^2 Quasi-sovereign bonds are securities issued by entities supported by the
local government.
^3 “Spreads” refers to differences between the yield paid on US Treasury bonds
and other types of debt, such as emerging markets bonds.


UBS Global Asset Management
Closed-End Funds Desk: 888-793-8637
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