ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
SEMI-ANNUAL REPORT
MAY 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
July 29, 1999
Dear Shareholder:
We are pleased to provide you with this report on the Alliance International
Premier Growth Fund (the "Fund"). This report contains investment results and
market activity for the semi-annual period ended May 31, 1999.
INVESTMENT RESULTS
Since October of 1998, the Fund's focus on a carefully selected list of
"premier" large cap growth stocks has begun to generate investment returns
above its benchmark index. Active intra-period trading has also added to the
returns.
The Fund's performance results for the six- and 12-month periods ended May 31,
1999 are shown in the following table. Also shown is the performance for the
Fund's benchmark, the Morgan Stanley Capital International (MSCI) Europe,
Australia, and Far East (EAFE) Index. During the six-month period under review,
your Fund outperformed its benchmark by approximately 200 basis points. The
Fund's strong performance over the six-month period under review was primarily
due to its strong selection of stocks. Some of the Fund's best performing
holdings include stocks such as Nokia AB OY Corp. and Taiwan Semiconductor
Manufacturing Co., Ltd. For the 12-month period under review, your Fund is
still behind its benchmark. This was due to poor performance in late 1998 by
some of the Fund's cyclical stocks. During this period, growth stocks were the
favored investment in the market, and cyclical stocks suffered accordingly.
Nevertheless, the performance gap between the Fund and its benchmark is
narrowing. In fact (as of the time of this writing), we are in line with the
benchmark's performance since the Fund's inception in March of 1998.
INVESTMENT RESULTS*
Periods Ended May 31, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE INTERNATIONAL PREMIER
GROWTH FUND
Class A 6.54% -0.77%
Class B 6.16% -1.55%
Class C 6.16% -1.55%
MSCI EAFE INDEX 4.16% 4.66%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS
OF MAY 31,1999. ALL FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE
BEEN DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY
WHEN SHARES ARE PURCHASED OR REDEEMED. RETURNS FOR THE FUND AND ITS COMPARATIVE
BENCHMARK INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT EXPENSES
ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE MSCI EAFE INDEX MEASURES THE OVERALL PERFORMANCE OF STOCK MARKETS IN 20
COUNTRIES WITHIN EUROPE, AUSTRALIA AND THE FAR EAST. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN INDEX.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
ECONOMIC REVIEW AND OUTLOOK
The emerging market economies continued their recovery from the economic crisis
that began in Southeast Asia in the fourth quarter of 1997. It was just last
autumn that the world's financial markets were gripped by cascading economic
problems in Russia, Eastern Europe, and Latin America. Thanks to both a series
of fiscal easing steps by the finance ministers of the largest economic powers,
as well as the continued robust growth of the United States (without any
meaningful inflation), investors are now more concerned about an overheating
economy than a slowing one.
1
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
Those concerns were quite evident during February of 1999, and again during
late April and early May, as investors generally rotated out of many
traditional growth stocks and into deep cyclical, basic material and value
stocks. We believe that this sector rotation is not sustainable due to the
global production overcapacity for a wide variety of basic materials, chemicals
and energy sources.
In our economic outlook, we believe that a few lingering problems require a
degree of caution. These problems include the lack of sustained economic growth
in Japan, a slowing of economic growth in China, possible restrictions to free
trade and the free movement of capital in Europe and elsewhere, European
Monetary Union (EMU) and Year 2000 effects, and instability in the Middle East
and Eastern Europe.
However, we continue to emphasize many factors that we believe provide cause
for optimism. For instance, the economies of many troubled countries have
bottomed, while many crucial fiscal, monetary, and political reforms are now
being put in place around the world (including the expansion of free-trade
zones like the EMU). Additionally, the swift discipline exerted by the
financial markets in last year's financial market crisis caused all governments
concerned to focus on and deal with their economic woes. Other positive factors
include the immediate availability of capital for worthy projects, the ever
widening expansion of technology which allows global price and value
competition, and the continued economic strength of the U.S. and Europe, which
provides engines for economic growth for much of the rest of the world.
Therefore, our outlook is cautiously optimistic. We believe that U.S. gross
domestic product (GDP) growth will slow to below 4% in 1999. We anticipate that
European GDP growth should be a little higher, and we are hopeful that the
Japanese economy will stabilize near zero economic growth. China's growth is
forecast to be approximately 6%. In our view, inflation in each of the
developed countries should remain quite subdued.
Within this environment, we are hopeful that the companies held by the Fund
will increase their earnings by approximately 20% on average. We believe that
this provides an attractive investment environment.
PORTFOLIO MANAGEMENT AND STRATEGY
The strategy of the Fund has remained consistent: to emphasize stock selection
and investment in a limited number of comparatively large, high-quality
companies. The Fund's current focus reflects an increased interest in slightly
larger, more growth-oriented companies. In following this strategy, we continue
to utilize the fundamental analysis and research of Alliance Capital's large
global equity research team that is situated in numerous locations around the
world. The Fund's industry sector and geographic weightings are a byproduct of
specific bottom-up company-by-company stock selection, rather than from a
predetermined top-down allocation.
The Fund is diversified in terms of industry sector and geographic weightings
as shown in the following charts. As you can see, there is particular emphasis
on the sectors of healthcare, finance, and technology. In addition, the Fund
has significant holdings in consumer services, while cellular telephone service
companies dominate our utility sector holdings. The most significant change
since our last report is an increase in the Fund's technology holdings and a
decrease in consumer staples and manufacturing.
On a geographic basis, we are still underweight in Japan as compared to the
benchmark MSCI EAFE Index. This is due to Japan's high valuation levels as well
as our concerns about the stagnant Japanese economy. We are significantly
overweight in Finland due to our large holding in Nokia AB OY Corp., the
world's leading wireless handset manufacturer and a leading provider of
wireless infrastructure.
2
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
INDUSTRY AND GEOGRAPHIC BREAKDOWNS AS OF MAY 31, 1999*:
9.2% UTILITIES
4.5% CAPITAL GOODS
23.8% FINANCE
27.0% TECHNOLOGY
5.2% CONSUMER SERVICES
2.4% CONSUMER MANUFACTURING
10.4% CONSUMER STAPLES
12.8% HEALTHCARE
4.7% ENERGY
0.7% THAILAND
4.4% CANADA
13.4% FRANCE
18.4% UNITED KINGDOM
6.5% TAIWAN
7.9% FINLAND
1.9% SWITZERLAND
2.2% UNITED STATES
7.5% GERMANY
11.9% SPAIN
0.7% INDIA
8.8% NETHERLANDS
13.8% JAPAN
1.9% BELGIUM
* EXPRESSED AS A PERCENTAGE OF TOTAL INVESTMENTS.
We thank you for your interest and investment in the Alliance International
Premier Growth Fund and look forward to reporting our continued progress to you
later this year.
Sincerely,
John D. Carifa
Chairman and President
Alfred Harrison
Executive Vice President
Thomas Kamp
Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
3
INVESTMENT OBJECTIVE AND POLICIES
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
Alliance International Premier Growth Fund is an open-end, diversified
investment company that seeks long-term growth of capital by investing
predominantly in the equity securities of a limited number of carefully
selected, non-U.S. companies that are judged likely to achieve superior
earnings growth. Normally, about 60 companies will be represented in the
portfolio, with the 30 most highly regarded of these usually constituting 70%
of the Fund's net assets.
INVESTMENT RESULTS
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF MAY 31, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year -0.77% -5.00%
Since Inception* 2.07% -1.38%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year -1.55% -5.49%
Since Inception* 1.36% -1.04%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year -1.55% -2.54%
Since Inception* 1.28% 1.28%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 1999)
CLASS A CLASS B CLASS C
------------ ------------ ------------
1 Year -3.99% -4.37% -1.29%
Since Inception* -0.71% -0.19% 2.59%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B shares (4% year 1, 3% year 2, 2% year 3, 1%
year 4); and for Class C shares (1% year 1). Returns for Class A shares do not
reflect the imposition of the 1 year 1% contingent deferred sales charge for
accounts over $1,000,000. Total return for Advisor Class shares will differ due
to different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 3/3/98 for all share Classes.
4
TEN LARGEST HOLDINGS
MAY 31, 1999 (UNAUDITED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Nokia AB OY Corp.--(Common shares and ADR)--
Develops and manufactures mobile
phones, networks, and systems for cellular
and fixed networks. $ 2,478,473 7.9%
Taiwan Semiconductor Manufacturing Co., Ltd.--
(Common shares and ADR)--Manufactures and
markets integrated circuits used in
computers, communications, and consumer
electronics. 2,044,022 6.5
Tabacalera, SA Series A--Manufactures,
sells, imports and exports tobacco products. 1,460,564 4.6
Mannesmann AG--Designs and manufactures
industrial products and production
machinery as well as provides
telecommunications services. 1,377,876 4.4
Newcourt Credit Group, Inc.--(Common shares
and ADR)--Originates, manages, and sells
asset-based loans. 1,365,625 4.4
Banco Bilbao Vizcaya, SA--The Bank serves
customers in Spain and, through its
network of leading domestic banks,
Latin America. 1,291,910 4.1
Takeda Chemical Industries--Produces and
sells health-care related products, foods,
and chemicals. 1,287,717 4.1
Sanofi-Synthelabo, SA--Manufactures health
care products and medical and surgical
equipment. 1,211,690 3.9
TDK Corp.--Manufactures magnetic tapes and
discs. 1,115,806 3.6
Koninklijke Ahold NV--Distributes and retails
food products through international
supermarkets. 1,114,715 3.5
$14,748,398 47.0%
5
INDUSTRY DIVERSIFICATION
MAY 31, 1999 (UNAUDITED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
PERCENT OF
U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Capital Goods $ 1,377,876 4.4%
Consumer Manufacturing 752,253 2.4
Consumer Services 1,610,580 5.1
Consumer Staples 3,183,102 10.1
Energy 1,430,068 4.6
Finance 7,308,552 23.3
Healthcare 3,938,609 12.6
Technology 8,312,768 26.5
Utilities 2,822,996 9.0
Total Investments* 30,736,804 98.0
Cash and receivables, net of liabilities 629,820 2.0
Net Assets $31,366,624 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
MAY 31, 1999 (UNAUDITED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-98.0%
BELGIUM-1.9%
Petrofina, SA 1,100 $ 592,244
CANADA-4.4%
Newcourt Credit Group,
Inc. 58,500 959,375
ADR 25,000 406,250
---------
1,365,625
FINLAND-7.9%
Nokia AB OY Corp. 24,400 1,732,973
ADR 10,500 745,500
---------
2,478,473
FRANCE-13.5%
Cap Gemini, SA 6,000 862,904
Sanofi-Synthelabo, SA 28,800 1,211,690
Seita 6,400 387,567
Societe Generale, Cl. A 5,100 925,201
Total, SA Cl. B (a) 4,600 558,086
ADR (a) 4,600 279,738
---------
4,225,186
GERMANY-7.5%
DaimlerChrysler AG 6,700 577,378
ADR 2,000 174,875
Mannesmann AG 10,100 1,377,876
Wella AG pfd. 300 220,256
---------
2,350,385
INDIA-0.7%
Infosys Technologies, Ltd. (ADR) (a) 4,600 228,850
JAPAN-13.9%
Alps Electric Co., Ltd. 28,000 601,976
Fuji Bank, Ltd. (a) 97,000 613,594
Fuji Photo Film Co. 6,000 214,330
Takeda Chemical Industries 29,000 1,287,717
TDK Corp. 13,000 1,115,806
Tokyo Electron, Ltd. 5,000 $275,768
Yamanouchi Pharmaceutical Co., Ltd. 7,000 241,369
---------
4,350,560
NETHERLANDS-8.8%
Equant NV
(NY Reg. Shares) (a) 8,500 704,969
Internationale Nederlanden Groep NV 12,000 640,461
Koninklijke Ahold NV 32,000 1,114,715
Wolters Kluwer NV 7,200 289,051
---------
2,749,196
SPAIN-11.9%
Banco Bilbao Vizcaya, SA 89,700 1,291,910
Tabacalera, SA
Series A 75,000 1,460,564
Telefonica, SA 20,000 957,671
New Shares (a) 400 19,153
---------
3,729,298
SWITZERLAND-1.9%
UBS AG 2,100 607,262
TAIWAN-6.5%
Taiwan Semiconductor
Manufacturing Co., Ltd. (a) 555,000 1,994,266
ADR (a) 1,900 49,756
---------
2,044,022
THAILAND-0.7%
Siam Commercial Bank
Warrants, expiring 5/10/02 (a) 670,000 234,771
UNITED KINGDOM-18.4%
Bank of Scotland 75,633 1,024,474
British Airways Plc. 37,000 264,963
ADR 3,600 261,000
7
PORTFOLIO OF INVESTMENTS (CONTINUED)
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Glaxo Wellcome Plc. 32,500 $ 909,083
Orange Plc. (a) 70,600 971,852
Rentokil Initial Plc. 104,000 411,951
SmithKline Beecham Plc. (ADR) 4,400 288,750
Standard Chartered Plc. 40,000 605,255
Vodafone Group Plc. 45,175 871,366
ADR 900 172,238
---------
5,780,932
Total Common Stocks & Other Investments
(cost $29,401,445) 30,736,804
TIME DEPOSIT-2.2%
UNITED STATES-2.2%
Rabobank
4.63%, 6/01/99
(cost $700,000) $700 $ 700,000
TOTAL INVESTMENTS-100.2%
(cost $30,101,445) 31,436,804
Other assets less liabilities-(0.2)% (70,180)
NET ASSETS-100% $31,366,624
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $30,101,445) $ 31,436,804
Foreign cash, at value (cost $395,722) 395,974
Cash 55,612
Receivable for investment securities and foreign
currency sold 2,678,590
Receivable for capital stock sold 283,717
Deferred organization expenses 189,270
Dividends receivable 80,652
Total assets 35,120,619
LIABILITIES
Payable for investment securities and foreign
currency purchased 3,278,333
Organizational expense payable 283,000
Payable for capital stock redeemed 42,783
Advisory fee payable 22,589
Distribution fee payable 19,180
Accrued expenses 108,110
Total liabilities 3,753,995
NET ASSETS $ 31,366,624
COMPOSITION OF NET ASSETS
Capital stock, at par $ 3,075
Additional paid-in capital 31,022,536
Accumulated net investment loss (235,997)
Accumulated net realized loss on investments and
foreign currency transactions (759,037)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 1,336,047
$ 31,366,624
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($10,255,892 /1,000,002 shares of capital stock
issued and outstanding) $10.26
Sales Charge--4.25% of public offering price 0.46
Maximum offering price $10.72
CLASS B SHARES
Net asset value and offering price per share
($14,807,473 / 1,456,560 shares of capital stock
issued and outstanding) $10.17
CLASS C SHARES
Net asset value and offering price per share
($4,720,551 / 464,564 shares of capital stock
issued and outstanding) $10.16
ADVISOR CLASS SHARES
Net asset value, redemption, and offering price
per share ($1,582,708 / 153,900 shares of
capital stock issued and outstanding) $10.28
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $21,617) $ 177,166
Interest 18,393 $ 195,559
EXPENSES
Advisory fee 138,986
Distribution fee - Class A 13,716
Distribution fee - Class B 66,169
Distribution fee - Class C 19,398
Custodian 86,933
Administrative 63,500
Registration 51,913
Audit and legal 43,054
Amortization of organization expense 37,492
Printing 20,294
Transfer agency 19,126
Directors' fees 12,476
Miscellaneous 6,375
Total expenses 579,432
Less: expenses waived by the Adviser
(see Note B) (172,277)
Less: expense offset arrangement
(see Note B) (2,101)
Net expenses 405,054
Net investment loss (209,495)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment
transactions 1,611,226
Net realized loss on foreign currency
transactions (120,154)
Net change in unrealized appreciation
(depreciation) of:
Investments 129,216
Foreign currency denominated assets and
liabilities 44,666
Net gain on investments and foreign
currency transactions 1,664,954
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,455,459
See notes to financial statements.
10
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED MARCH 3, 1998*
MAY 31, 1999 TO
(UNAUDITED) NOV. 30, 1998
---------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss $ (209,495) $ (126,406)
Net realized gain (loss) on investments
and foreign currency transactions 1,491,072 (2,297,346)
Net change in unrealized appreciation of
investments and foreign currency
denominated assets and liabilities 173,882 1,162,165
Net increase (decrease) in net assets
from operations 1,455,459 (1,261,587)
CAPITAL STOCK TRANSACTIONS
Net increase 6,440,822 24,631,630
Total increase 7,896,281 23,370,043
NET ASSETS
Beginning of period 23,470,343 100,300
End of period $ 31,366,624 $ 23,470,343
* Commencement of operations.
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999 (UNAUDITED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance International Premier Growth Fund (the "Fund") was incorporated as a
Maryland Corporation on November 24, 1997 and is registered under the
Investment Company Act of 1940, as a diversified, open-end management
investment company. Prior to commencement of operations on March 3, 1998, the
Fund had no operations other than the sale to Alliance Capital Management L.P.
(the "Adviser") of 10 shares each of Class A, Class B and Class C and 10,000
shares of Advisor Class for the aggregate amount of $100 each on Class A, Class
B and Class C shares and $100,000 on the Advisor Class shares on February 27,
1998. The Fund offers Class A, Class B, Class C, and Advisor Class shares.
Class A shares are sold with a front-end sales charge of up to 4.25% for
purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or
more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with
a contingent deferred sales charge which declines from 4.00% to zero depending
on the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. Advisor Class
shares are sold without an initial or contingent deferred sales charge and are
not subject to ongoing distribution expenses. Advisor Class shares are offered
to investors participating in fee based programs and to certain retirement plan
accounts. All four classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked price on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked price. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $283,000 have been deferred and are
being amortized on a straight-line basis through February, 2003.
3. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, currency gains and
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign withholding tax reclaims recorded on the Fund's books and the U.S.
dollar equivalent amounts actually received or paid. Net currency gains and
losses from valuing foreign currency denomi-
12
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
nated assets and liabilities at period end exchange rates are reflected as a
component of net unrealized appreciation of investments and foreign currency
denominated assets and liabilities.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.
6. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the shares of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and Advisor Class shares (Advisor Class shares also have no
distribution fees).
7. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of 1%
of the average daily net assets of the Fund. Such fee is accrued daily and paid
monthly. The Adviser has agreed to waive its fees and bear certain expenses to
the extent necessary to limit total operating expenses on an annual basis to
2.50%, 3.20%, 3.20% and 2.20% of the daily average net assets for Class A,
Class B, Class C and Advisor Class shares, respectively. For the six months
ended May 31, 1999, such waiver of management fees, amounted to $108,777 and
the waiver of the cost of certain legal and accounting services provided to the
Fund by the Adviser amounted to $63,500.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $21,926 for the six months ended May 31, 1999.
For the six months ended May 31, 1999, the Fund's expenses were reduced by
$2,101 under an expense offset arrangement with Alliance Fund Services.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $8,403 from the sales of Class A shares and $364,
$40,108 and $1,844 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended May 31, 1999.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1999, amounted to $187,179, none of which was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser, nor DLJ directly.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays a distribution fee to the Distributor at an annual rate
of up to .30% of the average daily net assets
13
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
attributable to Class A shares and 1% of the average daily net assets
attributable to the Class B and Class C shares. There is no distribution fee on
the Advisor Class shares. The fees are accrued daily and paid monthly. The
Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $946,807 and $165,302, for Class B and
Class C shares, respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
government securities) aggregated $23,292,327 and $16,162,113, respectively,
for the six months ended May 31, 1999. There were no purchases or sales of U.S.
government or government agency obligations for the six months ended May 31,
1999.
At May 31, 1999, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $3,770,360 and
gross unrealized depreciation of investments was $2,435,001, resulting in net
unrealized appreciation of $1,335,359, excluding foreign currency.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio
holdings, to hedge certain firm purchase and sales commitments denominated in
foreign currencies and for investment purposes. A forward currency contract is
a commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contracts and the closing of such contracts is included in
realized gains or losses from foreign currency transactions. Fluctuations in
the value of forward exchange currency contracts are recorded for financial
reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from
the potential inability of the counterparty to meet the terms of a contract and
from unanticipated movements in the value of a foreign currency relative to the
US dollar. At May 31, 1999, the Fund had no outstanding forward exchange
currency contracts.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class. Each class consists of 3,000,000,000 authorized shares. Transactions in
capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED MAR. 3, 1998* ENDED MAR. 3, 1998*
MAY 31, 1999 TO MAY 31, 1999 TO
(UNAUDITED) NOV. 30, 1998 (UNAUDITED) NOV. 30, 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 398,165 843,613 $ 4,057,899 $ 8,485,886
Shares converted
from Class B 10,531 -0- 108,457 -0-
Shares redeemed (162,338) (89,979) (1,661,677) (841,014)
Net increase 246,358 753,634 $ 2,504,679 $ 7,644,872
14
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED MAR. 3, 1998* ENDED MAR. 3, 1998*
MAY 31, 1999 TO MAY 31, 1999 TO
(UNAUDITED) NOV. 30, 1998 (UNAUDITED) NOV. 30, 1998
------------ ------------ -------------- --------------
CLASS B
Shares sold 469,861 1,350,496 $ 4,820,841 $ 13,632,672
Shares converted
to Class A (10,624) -0- (108,457) -0-
Shares redeemed (225,623) (127,560) (2,285,732) (1,182,495)
Net increase 233,614 1,222,936 $ 2,426,652 $ 12,450,177
CLASS C
Shares sold 193,140 345,438 $ 1,964,900 $ 3,357,877
Shares redeemed (54,510) (19,514) (561,843) (174,357)
Net increase 138,630 325,924 $ 1,403,057 $ 3,183,520
ADVISOR CLASS
Shares sold 18,975 151,569 $ 197,256 $ 1,523,326
Shares redeemed (8,864) (17,780) (90,822) (170,265)
Net increase 10,111 133,789 $ 106,434 $ 1,353,061
NOTE F: CONCENTRATION OF RISK
Investing in securities of foreign companies involves special risks which
include the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies and their markets may be less liquid and their prices
more volatile than those of United States companies. Consequently, the Fund's
investment portfolio may experience greater price volatility than a portfolio
invested in equity securities of U.S. companies.
NOTE G: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
the miscellaneous expenses in the statement of operations. The Fund did not
utilize the Facility during the six months ended May 31, 1999.
* Commencement of operations.
15
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
-------------------------------
SIX MONTHS MARCH 3,
ENDED 1998 (A)
MAY 31, TO
1999 NOVEMBER 30,
(UNAUDITED) 1998
------------- --------------
Net asset value, beginning of period $ 9.63 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b)(c) (.06) (.08)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .69 (.29)
Net increase (decrease) in net asset
value from operations .63 (.37)
Net asset value, end of period $10.26 $ 9.63
TOTAL RETURN
Total investment return based on net asset
value (d) 6.54% (3.70)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $10,256 $7,255
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements (e) 2.52%(f) 2.50%
Expenses, before waivers/
reimbursements (e) 3.75% 5.19%
Net investment loss (e) (1.09)% (.90)%
Portfolio turnover rate 121% 2%
16
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
HSELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
-------------------------------
SIX MONTHS MARCH 3,
ENDED 1998 (A)
MAY 31, TO
1999 NOVEMBER 30,
(UNAUDITED) 1998
------------- --------------
Net asset value, beginning of period $ 9.58 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b)(c) (.09) (.13)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .68 (.29)
Net increase (decrease) in net asset
value from operations .59 (.42)
Net asset value, end of period $10.17 $ 9.58
TOTAL RETURN
Total investment return based on net asset
value (d) 6.16% (4.20)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $14,807 $11,710
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements (e) 3.22%(f) 3.20%
Expenses, before waivers/
reimbursements (e) 4.43% 6.14%
Net investment loss (e) (1.80)% (1.41)%
Portfolio turnover rate 121% 2%
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-------------------------------
SIX MONTHS MARCH 3,
ENDED 1998 (A)
MAY 31, TO
1999 NOVEMBER 30,
(UNAUDITED) 1998
------------- --------------
Net asset value, beginning of period $ 9.57 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b)(c) (.09) (.15)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .68 (.28)
Net increase (decrease) in net asset
value from operations .59 (.43)
Net asset value, end of period $10.16 $ 9.57
TOTAL RETURN
Total investment return based on net
asset value (d) 6.16% (4.30)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $4,721 $3,120
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements (e) 3.22%(f) 3.20%
Expenses, before waivers/
reimbursements (e) 4.44% 6.00%
Net investment loss (e) (1.76)% (1.69)%
Portfolio turnover rate 121% 2%
18
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
-------------------------------
SIX MONTHS MARCH 3,
ENDED 1998 (A)
MAY 31, TO
1999 NOVEMBER 30,
(UNAUDITED) 1998
------------- --------------
Net asset value, beginning of period $ 9.64 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b)(c) (.04) .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .68 (.37)
Net increase (decrease) in net asset value
from operations .64 (.36)
Net asset value, end of period $10.28 $ 9.64
TOTAL RETURN
Total investment return based on net asset
value (d) 6.64% (3.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,583 $1,386
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements (e) 2.22%(f) 2.20%
Expenses, before waivers/
reimbursements (e) 3.48% 6.28%
Net investment income (loss) (e) (.83)% .13%
Portfolio turnover rate 121% 2%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived/reimbursed by the Adviser.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return for a period of less than one year is not
annualized.
(e) Annualized.
(f) Ratio reflects expenses grossed up for expense arrangement with the
transfer agent. For the six months ended May 31, 1999, the net expense ratio
was 2.50%, 3.20%, 3.20% and 2.20% for Class A, B, C and Advisor Class shares,
respectively.
19
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
BRUCE W. CALVERT, EXECUTIVE VICE PRESIDENT
ALFRED HARRISON, EXECUTIVE VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
EDWARD BAKER, VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
STEPHEN H. BEINHACKER, VICE PRESIDENT
RUSSELL BRODY, VICE PRESIDENT
THOMAS KAMP, VICE PRESIDENT
DANIEL NORDBY, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109-3661
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
SEWARD & KISSEL LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
20
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
21
ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
INTAPGSR599
