<PAGE>
<PAGE>
LETTER TO SHAREHOLDERS THE ALLIANCE FUND
- --------------------------------------------------------------------------------
January 5, 1995
Dear Shareholder:
The focus of the market in 1994 has been on a fear of inflation and higher
interest rates as the economic recovery gains strength. The Federal Reserve has
been prompt in seeking to restrain inflation and we consider this to be a good
recipe for extending the period of moderate growth. Stocks are trading down, at
about 13.5x 1995 earnings, and we believe that this multiple undervalues the
profits achievement that will likely be enjoyed by U.S. companies in the years
ahead. So, while this year has been frustrating for equity investors as no real
progress was made in stocks, we believe that The Alliance Fund shareholders
should not be discouraged.
INVESTMENT STRATEGY
Your Fund's portfolio continues to invest in a broad range of companies that we
believe will show earnings growth averaging close to 20% in 1995. If, as seems
likely, the economy grows at a slightly slower pace and the Federal Reserve's
restrictive policy slackens, we would expect growth stocks to perform very well.
We find value in the market not just in traditional areas of growth such as
technology, media, health care and the consumer services, but there is every
likelihood that many economically sensitive companies and finance-oriented
companies will also show strong earnings growth and will provide excellent
returns.
INVESTMENT RESULTS
For the twelve months ended November 30, 1994, The Alliance Fund had total
returns of -1.23% (Class A),-2.13% (Class B) and -2.14% (Class C), based on the
net asset value. Over the same period, the unmanaged S&P 500-stock Index
returned +1.07% and the unmanaged Russell 1000 Growth Index, described on page
3, returned +0.77%. Additional investment results for your Fund appear on
page 2.
We appreciate your investment in The Alliance Fund and look forward to reporting
to you on its progress during 1995.
Sincerely,
John D. Carifa
Chairman and President
Alfred Harrison
Executive Vice President
<PAGE>
INVESTMENT RESULTS THE ALLIANCE FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF NOVEMBER 30, 1994
CLASS A SHARES
Without With
Sales Sales
Charge Charge
------ ------
- - One Year - 1.23% - 5.41%
- - Five Years +10.64 + 9.68
- - Ten Years +14.07 +13.57
CLASS B SHARES
Without With
Sales Sales
Charge Charge
------ ------
- - One Year -2.13% -5.65%
- - Since Inception* +9.48 +9.27
CLASS C SHARES
- - One Year -2.14%
- - Since Inception* +5.82
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares--with and without the effect of the
4.25% maximum sales charge (Class A) or 4% contingent deferred sales charge
(Class B); Class C shares are not subject to front-end or contingent deferred
sales charges. 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: 3/4/91, Class B; 5/3/93, Class C.
<PAGE>
TEN LARGEST HOLDINGS
NOVEMBER 30, 1994 THE ALLIANCE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY VALUE PERCENT OF NET ASSETS
<S> <C> <C>
Intel Corp. $ 43,089,125 5.5%
United Healthcare Corp. 39,824,000 5.1
Merrill Lynch & Co., Inc. 35,499,600 4.5
General Motors Corp. (common & Cl.H) 31,711,875 4.0
Motorola, Inc. 31,344,500 4.0
Tele-Communications, Inc. Cl.A 30,150,225 3.8
Chrysler Corp. 28,657,350 3.7
UAL, Inc. 26,706,575 3.4
Federal National Mortgage Assn. 25,398,737 3.2
Norwest Corp. 24,490,500 3.1
$316,872,487 40.3%
</TABLE>
<TABLE>
<CAPTION>
MAJOR PORTFOLIO CHANGES
FIVE MONTHS ENDED NOVEMBER 30, 1994*
- --------------------------------------------------------------------------------
SHARES**
PURCHASES BOUGHT HOLDINGS 11/30/94
<S> <C> <C>
AirTouch Communications, Inc. 248,900 248,900
AMR Corp. 174,400 244,400
Caterpillar, Inc. 151,500 151,500
COMPAQ Computer Corp. 424,200 481,200
Conrail, Inc. 240,500 321,500
Du Pont (E.I.) de Nemours & Co. 301,500 301,500
Federal Home Loan Mortgage Corp. 111,000 111,000
Federal National Mortgage Assn. 102,400 357,100
First Bank Systems, Inc. 210,000 405,000
General Motors Corp. 460,000 753,000
<CAPTION>
SALES SOLD HOLDINGS 11/30/94
<S> <C> <C>
cisco Systems, Inc. 584,200 40,000
Cooper Industries, Inc. 90,000 -0-
Home Depot, Inc. 410,000 -0-
Intel Corp. 264,400 682,600
McCaw Cellular Communications, Inc. Cl.A 420,400 -0-
MCI Communications Corp. 203,500 572,900
Microsoft Corp. 260,950 210,350
Motorola, Inc. 76,000 556,000
Reliance Electric Co. (NEW) Cl.A 150,000 -0-
Student Loan Marketing Assn. 471,200 -0-
<FN>
* The Fund changed its fiscal year end from December 31 to November 30.
** Adjusted for stock splits.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1994 THE ALLIANCE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS & OTHER INVESTMENTS--95.5%
CONSUMER PRODUCTS & SERVICES--27.6%
AIRLINES--5.0%
AMR Corp.* . . . . . . . . . . . . . . . . . 244,400 $ 12,403,300
UAL, Inc.* . . . . . . . . . . . . . . . . . 279,650 26,706,575
------------
39,109,875
------------
APPAREL--0.2%
Jones Apparel Group, Inc.* . . . . . . . . . 55,000 1,402,500
------------
BROADCASTING & CELLULAR--7.9%
AirTouch Communications, Inc.* . . . . . . . 248,900 6,751,413
Bell Cablemedia Plc. (ADR)*. . . . . . . . . 70,000 1,575,000
Cablevision Systems Corp. Cl.A*. . . . . . . 97,000 4,910,625
Comcast Corp. Cl.A (SPL) . . . . . . . . . . 450,000 7,143,750
CommNet Cellular, Inc.*. . . . . . . . . . . 100,000 2,900,000
Jones Intercable, Inc. Cl.A* . . . . . . . . 330,000 4,455,000
New World Communications Group, Inc.*. . . . 150,000 1,950,000
Tele-Communications, Inc. Cl.A*. . . . . . . 1,276,200 30,150,225
Viacom, Inc.
Cl.B*. . . . . . . . . . . . . . . . . . . 60,000 2,310,000
Cl.B rights, 9/29/95*. . . . . . . . . . . 93,100 133,831
------------
62,279,844
------------
BUILDING & BUILDING PRODUCTS--0.6%
Armstrong World Industries, Inc. . . . . . . 52,200 2,088,000
Owens-Corning Fiberglass Corp.*. . . . . . . 50,000 1,450,000
Royal Plastics Group, Ltd.*(a)(b). . . . . . 80,000 654,160
------------
4,192,160
------------
DRUGS, HOSPITAL SUPPLIES & MEDICAL SERVICES--5.7%
AB Astra(c). . . . . . . . . . . . . . . . . 70,000 $ 1,881,250
Boston Scientific Corp.* . . . . . . . . . . 30,000 480,000
Healthtrust, Inc.* . . . . . . . . . . . . . 90,000 2,902,500
United Healthcare Corp.. . . . . . . . . . . 838,400 39,824,000
------------
45,087,750
------------
ENTERTAINMENT & LEISURE--1.2%
Eastman Kodak Co.. . . . . . . . . . . . . . 75,000 3,421,875
Mirage Resorts, Inc.*. . . . . . . . . . . . 173,600 3,428,600
Promus Cos., Inc.* . . . . . . . . . . . . . 90,000 2,497,500
------------
9,347,975
------------
PRINTING & PUBLISHING--0.8%
Aamulehti Yhtymae Oy-II*(d). . . . . . . . . 165,000 3,153,860
American Greetings Corp. . . . . . . . . . . 30,000 832,500
Multimedia, Inc.*. . . . . . . . . . . . . . 80,000 2,300,000
------------
6,286,360
------------
RESTAURANTS & LODGING--0.9%
Host Marriott Corp.. . . . . . . . . . . . . 180,000 1,710,000
John Q. Hammons Hotels, Inc.*. . . . . . . . 150,000 2,175,000
Marriott International, Inc. . . . . . . . . 101,800 2,672,250
------------
6,557,250
------------
RETAILING--2.2%
Dillard Department Stores, Inc.. . . . . . . 70,000 1,968,750
Fingerhut Cos., Inc. . . . . . . . . . . . . 220,000 3,630,000
Limited, Inc.. . . . . . . . . . . . . . . . 150,000 2,906,250
Payless Cashways, Inc.*. . . . . . . . . . . 270,000 2,362,500
Price/Costco, Inc.*. . . . . . . . . . . . . 115,000 1,768,125
Wal-Mart Stores, Inc.. . . . . . . . . . . . 216,400 5,004,250
------------
17,639,875
------------
<PAGE>
<CAPTION>
COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
TELEPHONE UTILITY--2.6%
MCI Communications Corp. . . . . . . . . . . 572,900 $ 11,171,550
Sprint Corp. . . . . . . . . . . . . . . . . 100,000 2,987,500
Telefonos de Mexico S.A. de cv. Series L
(ADS) . . . . . . . . . . . . . . . . . . . 81,300 4,308,900
Telephone and Data Systems, Inc. . . . . . . 45,000 1,951,875
------------
20,419,825
------------
TEXTILE PRODUCTS--0.3%
Cone Mills Corp.*. . . . . . . . . . . . . . 180,000 2,160,000
------------
OTHER--0.2%
SafeCard Services, Inc.. . . . . . . . . . . 125,000 1,968,750
------------
216,452,164
------------
BASIC INDUSTRIES--25.6%
AUTOMOTIVE--7.3%
Chrysler Corp. . . . . . . . . . . . . . . . 592,400 28,657,350
General Motors Corp. . . . . . . . . . . . . 753,000 28,708,125
------------
57,365,475
------------
CHEMICALS--3.7%
Air Products & Chemicals, Inc. . . . . . . . 55,000 2,440,625
Dow Chemical Co. . . . . . . . . . . . . . . 35,000 2,240,000
Du Pont (E.I.) de Nemours & Co.. . . . . . . 301,500 16,243,313
Hercules, Inc. . . . . . . . . . . . . . . . 30,000 3,431,250
Lubrizol Corp. . . . . . . . . . . . . . . . 90,000 2,835,000
Monsanto Co. . . . . . . . . . . . . . . . . 20,000 1,440,000
------------
28,630,188
------------
MACHINERY--2.0%
AlliedSignal, Inc. . . . . . . . . . . . . . 62,000 2,022,750
Case Corp. . . . . . . . . . . . . . . . . . 150,000 2,943,750
Caterpillar, Inc.. . . . . . . . . . . . . . 151,500 8,181,000
Coltec Industries, Inc.* . . . . . . . . . . 170,000 2,783,750
------------
15,931,250
------------
MINING & METALS--2.2%
Bethlehem Steel Corp.. . . . . . . . . . . . 743,300 13,193,575
Birmingham Steel Corp. . . . . . . . . . . . 44,300 941,375
Kaiser Aluminum Corp.* . . . . . . . . . . . 70,000 743,750
Lukens, Inc. . . . . . . . . . . . . . . . . 90,000 2,497,500
------------
17,376,200
------------
OIL & GAS--3.6%
Brown (Tom), Inc.* . . . . . . . . . . . . . 165,500 1,675,688
Camco International, Inc.. . . . . . . . . . 120,000 2,280,000
ENSERCH Corp.. . . . . . . . . . . . . . . . 100,000 1,262,500
Enterra Corp.* . . . . . . . . . . . . . . . 135,000 2,666,250
Louis Dreyfus Natural Gas Corp.* . . . . . . 215,000 2,633,750
Louisiana Land & Exploration Co. . . . . . . 70,000 2,870,000
Mitchell Energy & Development Corp. Cl.A . . 78,500 1,265,812
Noble Affiliates, Inc. . . . . . . . . . . . 90,000 2,475,000
Petroleum Geo-Services A/S (ADR)*. . . . . . 75,000 1,668,750
Seagull Energy Corp.*. . . . . . . . . . . . 110,000 2,351,250
United Meridian Corp.* . . . . . . . . . . . 261,600 3,270,000
Unocal Corp. . . . . . . . . . . . . . . . . 65,000 1,730,625
YPF S.A. (ADS) . . . . . . . . . . . . . . . 100,000 2,262,500
------------
28,412,125
------------
PAPER & FOREST PRODUCTS--1.5%
Georgia Pacific Corp.. . . . . . . . . . . . 73,500 5,255,250
Jefferson Smurfit Corp.* . . . . . . . . . . 200,200 3,203,200
Rayonier, Inc. . . . . . . . . . . . . . . . 125,000 3,500,000
------------
11,958,450
------------
SERVICES--0.8%
Ryder System, Inc. . . . . . . . . . . . . . 180,000 3,892,500
TNT Freightways Corp.. . . . . . . . . . . . 86,300 2,146,712
------------
6,039,212
------------
SURFACE TRANSPORTATION--3.5%
Conrail, Inc.. . . . . . . . . . . . . . . . 321,500 16,718,000
GATX Corp. . . . . . . . . . . . . . . . . . 100,000 4,000,000
Illinois Central Corp. . . . . . . . . . . . 90,000 2,722,500
Santa Fe Pacific Corp. . . . . . . . . . . . 80,000 1,340,000
Southern Pacific Rail Corp.* . . . . . . . . 130,000 2,372,500
------------
27,153,000
------------
OTHER--1.0%
Aviall, Inc. . . . . . . . . . . . . . . . . 150,000 1,368,750
Mannesmann AG (ADR). . . . . . . . . . . . . 9,000 2,378,250
<PAGE>
<CAPTION>
COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Sea Containers, Ltd. Cl.A. . . . . . . . . . 125,000 $ 1,593,750
WMX Technologies, Inc. . . . . . . . . . . . 100,000 2,575,000
------------
7,915,750
------------
200,781,650
------------
FINANCIAL SERVICES--23.2%
BANKING & CREDIT--5.7%
Charter One Financial, Inc.. . . . . . . . . 150,000 2,812,500
First Bank Systems, Inc. . . . . . . . . . . 405,000 13,466,250
First Chicago Corp.. . . . . . . . . . . . . 75,000 3,487,500
Norwest Corp.. . . . . . . . . . . . . . . . 1,126,000 24,490,500
------------
44,256,750
------------
BANKING & INSURANCE--0.5%
TIG Holdings, Inc. . . . . . . . . . . . . . 220,000 3,850,000
------------
BROKERAGE--6.3%
Edwards (A.G.), Inc. . . . . . . . . . . . . 150,000 2,587,500
Legg Mason, Inc. . . . . . . . . . . . . . . 160,000 3,460,000
Merrill Lynch & Co., Inc.. . . . . . . . . . 934,200 35,499,600
Morgan Stanley Group, Inc. . . . . . . . . . 138,300 8,176,987
------------
49,724,087
------------
INSURANCE--4.7%
American International Group, Inc. . . . . . 83,100 7,614,038
Emphesys Financial Group, Inc. . . . . . . . 74,500 2,160,500
Home State Holdings, Inc.* . . . . . . . . . 57,400 746,200
John Alden Financial Corp. . . . . . . . . . 110,000 2,818,750
Life Partners Group, Inc.. . . . . . . . . . 185,000 3,746,250
NAC Re Corp. . . . . . . . . . . . . . . . . 115,000 2,903,750
Progressive Corp. (Ohio) . . . . . . . . . . 70,000 2,327,500
Transatlantic Holdings, Inc. . . . . . . . . 45,000 2,345,625
Travelers, Inc.. . . . . . . . . . . . . . . 381,057 12,527,249
------------
37,189,862
------------
REAL ESTATE--1.2%
Avalon Properties, Inc.. . . . . . . . . . . 100,000 1,825,000
Bay Apartment Communities Inc. . . . . . . . 100,000 1,800,000
JP Reality, Inc. . . . . . . . . . . . . . . 80,000 1,500,000
Simon Property Group, Inc. . . . . . . . . . 120,000 2,835,000
Spieker Properties, Inc. . . . . . . . . . . 70,000 1,382,500
------------
9,342,500
------------
OTHER--4.8%
American Express Co. . . . . . . . . . . . . 90,000 2,666,250
Federal Home Loan Mortgage Corp. . . . . . . 111,000 5,536,125
Federal National Mortgage Assn.. . . . . . . 357,100 25,398,737
MGIC Investment Corp.. . . . . . . . . . . . 140,000 4,182,500
------------
37,783,612
------------
182,146,811
------------
SCIENCE & TECHNOLOGY--19.1%
AEROSPACE--0.5%
General Motors Corp. Cl.H. . . . . . . . . . 90,000 3,003,750
Rockwell International Corp. . . . . . . . . 30,000 1,016,250
------------
4,020,000
------------
COMMUNICATION EQUIPMENT--0.9%
General Instrument Corp.*. . . . . . . . . . 140,000 4,200,000
Nokia AB(d). . . . . . . . . . . . . . . . . 20,000 2,726,600
------------
6,926,600
------------
COMPUTER HARDWARE--2.6%
COMPAQ Computer Corp.* . . . . . . . . . . . 481,200 18,826,950
SCI Systems, Inc.* . . . . . . . . . . . . . 100,000 1,850,000
------------
20,676,950
------------
COMPUTER SOFTWARE & SERVICES--3.5%
Ceridian Corp. . . . . . . . . . . . . . . . 160,000 4,000,000
<PAGE>
<CAPTION>
COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Ciber, Inc.* . . . . . . . . . . . . . . . . 85,000 $ 775,625
cisco Systems, Inc.* . . . . . . . . . . . . 40,000 1,290,000
Lotus Development Corp.* . . . . . . . . . . 90,000 4,027,500
Microsoft Corp.* . . . . . . . . . . . . . . 210,350 13,225,756
Micro Warehouse, Inc.* . . . . . . . . . . . 50,000 1,628,125
Symantec Corp.*. . . . . . . . . . . . . . . 130,000 2,388,750
------------
27,335,756
------------
SEMI-CONDUCTORS & RELATED--11.4%
Advanced Micro Devices, Inc.*. . . . . . . . 130,000 3,282,500
Intel Corp.. . . . . . . . . . . . . . . . . 682,600 43,089,125
Lam Research Corp.*. . . . . . . . . . . . . 35,000 1,478,750
Motorola, Inc. . . . . . . . . . . . . . . . 556,000 31,344,500
National Semiconductor Corp.*. . . . . . . . 340,300 6,253,012
Teradyne, Inc.*. . . . . . . . . . . . . . . 130,000 4,062,500
------------
89,510,387
------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER--0.2%
ITT Corp.. . . . . . . . . . . . . . . . . . 20,000 $ 1,592,500
------------
150,062,193
------------
Total Common Stocks & Other Investments
(cost $662,423,358). . . . . . . . . . . . 749,442,818
------------
COMMERCIAL PAPER--3.8%
American Express Credit Corp. 5.65%, 12/01/94
(amortized cost $30,125,000) . . . . . . . $30,125 30,125,000
------------
TOTAL INVESTMENTS--99.3%
(cost $692,548,358). . . . . . . . . . . . 779,567,818
Other assets less liabilities--0.7%. . . . . 5,479,022
------------
NET ASSETS--100% . . . . . . . . . . . . . . $785,046,840
------------
------------
<FN>
- --------------------------------------------------------------------------------
* Non-income producing.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. The security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1994 this security amounted to $654,160 or 0.1% of net assets.
See notes to financial statements.
(b) Canadian holding
(c) Swiss holding
(d) Finnish holding
Glossary of Terms:
ADR -- American Depository Receipt
ADS -- American Depository Security
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30,. 1994 THE ALLIANCE FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $692,548,358). . . $779,567,818
Receivable for investment securities sold. . . . . . . . . . 16,099,191
Dividends receivable . . . . . . . . . . . . . . . . . . . . 1,260,167
Receivable for capital stock sold. . . . . . . . . . . . . . 208,516
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 24,235
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 797,159,927
------------
LIABILITIES
Due to custodian . . . . . . . . . . . . . . . . . . . . . . 30,654
Payable for investment securities purchased. . . . . . . . . 8,789,692
Payable for capital stock redeemed . . . . . . . . . . . . . 1,489,601
Unclaimed dividends . . . . . . . . . . . . . . . . . . . . 1,008,512
Management fee payable . . . . . . . . . . . . . . . . . . . 468,779
Distribution fee payable . . . . . . . . . . . . . . . . . . 141,220
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . 184,629
------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 12,113,087
------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $785,046,840
------------
------------
COMPOSITION OF NET ASSETS
Capital stock, at par. . . . . . . . . . . . . . . . . . . . $ 1,184,478
Additional paid-in capital . . . . . . . . . . . . . . . . . 580,047,194
Undistributed net investment income. . . . . . . . . . . . . 1,393,547
Accumulated net realized gain. . . . . . . . . . . . . . . . 115,402,161
Net unrealized appreciation of investments . . . . . . . . . 87,019,460
------------
$785,046,840
------------
------------
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($760,678,774/114,697,802 shares of capital stock
issued and outstanding). . . . . . . . . . . . . . . . . . $6.63
Sales charge-4.25% of public offering price. . . . . . . . . .29
-----
Maximum offering price . . . . . . . . . . . . . . . . . . . $6.92
-----
-----
CLASS B SHARES
Net asset value and offering price per share
($18,137,909/2,791,823 shares of capital stock
issued and outstanding) . . . . . . . . . . . . . . . . . $6.50
-----
-----
CLASS C SHARES
Net asset value, redemption and offering price per share
($6,230,157/958,113 shares of capital stock
issued and outstanding) . . . . . . . . . . . . . . . . . $6.50
-----
-----
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
ELEVEN MONTHS ENDED NOVEMBER 30, 1994* THE ALLIANCE FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends. . . . . . . . . . . . . . . . . $8,577,121
Interest . . . . . . . . . . . . . . . . . 901,528 $ 9,478,649
----------
EXPENSES
Management fee . . . . . . . . . . . . . . 5,342,226
Distribution fee--Class A. . . . . . . . . 1,330,008
Distribution fee--Class B. . . . . . . . . 145,955
Distribution fee--Class C. . . . . . . . . 52,236
Transfer agency . . . . . . . . . . . . . 672,350
Administrative . . . . . . . . . . . . . . 146,993
Custodian. . . . . . . . . . . . . . . . . 82,009
Printing . . . . . . . . . . . . . . . . . 73,952
Taxes. . . . . . . . . . . . . . . . . . . 62,775
Registration . . . . . . . . . . . . . . . 42,308
Audit and legal. . . . . . . . . . . . . . 37,783
Directors' fees. . . . . . . . . . . . . . 22,411
Miscellaneous . . . . . . . . . . . . . . 46,354
----------
Total expenses . . . . . . . . . . . . . . 8,057,360
--------------
Net investment income. . . . . . . . . . . 1,421,289
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments . . . . . 117,472,711
Net change in unrealized appreciation of
investments. . . . . . . . . . . . . . . (146,186,786)
--------------
Net loss on investments. . . . . . . . . . (28,714,075)
--------------
NET DECREASE IN NET ASSETS FROM OPERATIONS . $ (27,292,786)
--------------
<FN>
* The Fund changed its fiscal year end from December 31 to November 30.
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUARY 1, 1994 YEAR ENDED
TO DECEMBER 31,
NOVEMBER 30, 1994* 1993
------------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,421,289 $ 2,149,164
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . 117,472,711 88,173,129
Net change in unrealized appreciation of investments . . . . . . . . . . . . . (146,186,786) 19,927,370
------------- ------------
Net increase (decrease) in net assets from operations. . . . . . . . . . . . . (27,292,786) 110,249,663
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (2,141,373)
Net realized gain on investments
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (83,667,101)
Class B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (1,247,441)
Class C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (402,973)
Distributions in excess of net realized gain
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (1,514,652)
Class B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (22,583)
Class C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (7,295)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,882,976) 28,418,103
------------- ------------
Total increase (decrease). . . . . . . . . . . . . . . . . . . . . . . . . . . (63,175,762) 49,664,348
NET ASSETS
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848,222,602 798,558,254
------------- ------------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 785,046,840 $848,222,602
------------- ------------
------------- ------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1994 THE ALLIANCE FUND
- --------------------------------------------------------------------------------
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Alliance Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. On
February 23, 1993, the creation of a third class of shares, Class C shares, was
approved by the Board of Directors. The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge of up to 4.25%.
Class B shares are sold with a contingent deferred sales charge which declines
from 4% 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 sold without an initial or
contingent deferred sales charge. All three 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. Distribution of Class C shares commenced on May 3, 1993.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Securities traded on national securities exchanges are valued at the last
reported sales price, or, if no sale occurred, at the mean of the bid and asked
price at the close of the New York Stock Exchange. Over-the-counter securities
not traded on national securities exchanges are valued at the closing bid price.
Debt securities are valued at the mean of the bid and asked price except that
debt securities maturing within 60 days are valued at amortized cost which
approximates market value. Securities for which current market quotations are
not readily available (including investments which are subject to limitations as
to their sale) are valued at their fair value as determined in good faith by the
Board of Directors.
2. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date and dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. The Fund amortizes discounts on debt securities owned. Security gains and
losses are determined on the identified cost basis.
3. CURRENCY TRANSACTION
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 at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Foreign exchange gains and losses from sales and maturities of securities,
holdings of foreign currencies exchange gains and losses realized between the
trade and settlement dates on security transactions, and the difference between
the amounts of interest recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid are reflected as a component of net
realized loss on investments. Net currency gains and losses from valuing
foreign currency denominated assets and liabilities at period end exchange rates
are reflected as a component of net unrealized appreciation of investments.
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. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
6. CHANGE OF YEAR END
The Fund changed its fiscal year end from December 31 to November 30.
Accordingly, the statement of operations, changes in net assets and financial
highlights reflect the period from January 1, 1994 to November 30, 1994.
7. CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS
During the year ended December 31, 1993, the Fund adopted Statement of Position
93-2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
Accordingly, permanent book and tax basis differences relating to shareholder
distributions have been reclassified to paid-in capital. As of November 30,
1994, the cumulative effect of such differences totaling $(291,536) and
$2,329,594 was reclassified from undistributed net investment income and
accumulated net realized gain, respectively, to additional paid-in capital. Net
investment income, net realized gains, and net assets were not affected by this
change.
<PAGE>
NOTE B: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Prior to April 30, 1993, the Fund paid its Manager, Alliance Capital Management
L.P., a basic fee at an annual rate of 0.50% on the first $500 million of
average daily net assets, 0.40% on the next $500 million of average daily net
assets and 0.30% on average daily net assets in excess of $1 billion. The fee
was accrued daily and paid monthly. The basic fee was increased or decreased by
0.01% (0.0025% quarterly) of average daily net assets over the latest 12
calendar quarters for each 2 percentage points by which the total return of the
Fund (reflecting reinvestment of dividends from net investment income and
capital gains distributions) was better or poorer than that of the Standard &
Poor's 400 Index (with dividends also reinvested) for the same 12-quarter
period. The maximum reward or penalty rate was 0.05% for performance better or
poorer than that of the index by 10 percentage points or more. In accordance
with such arrangement, the Manager reduced its fee for the four months ended
April 30, 1993 in the aggregate amount of $119,330.
At a meeting of the stockholders of the Alliance Fund, held on April 20, 1993,
the following change was approved in the management agreement. Under the terms
of the new management agreement, the Fund pays its manager, Alliance Capital
Management L.P., a fee at an annual rate of 0.75% on the first $500 million of
average daily net assets, 0.65% on the next $500 million of average daily net
assets and 0.55% on average daily net assets in excess of $1 billion. The fee is
accrued daily and paid monthly.
In addition, pursuant to the management agreement, the Fund reimburses its
Manager for the cost of certain legal and accounting services provided to the
Fund by the Manager. For the period ended November 30, 1994 such reimbursement
amounted to $146,993.
The Manager has agreed to reimburse the Fund to the extent that the Fund's
aggregate annual expenses (exclusive of interest, taxes, brokerage, distribution
fee and extraordinary expenses) exceed the limits prescribed by any state in
which the Fund's shares are qualified for sale. The Fund believes that the most
restrictive expense ratio limitation imposed by any state is 2 1/2% of the first
$30 million, 2% of the next $70 million and 1 1/2% of any excess over $100
million of average daily net assets. No such reimbursement was required for the
period ended November 30, 1994.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Manager) for providing personnel and facilities to perform transfer agency
services for the Fund. Such compensation amounted to $481,280 for the period
ended November 30, 1994.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Manager)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $33,798 from the sale of Class A shares and $40,483
in contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the period ended November 30, 1994.
Brokerage commissions paid for the period ended November 30, 1994 on securities
transactions amounted to $1,214,725, 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 Manager, nor to 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 0.30% of the Fund's average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to the
Class B and Class C shares. Such fee is 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 $1,442,425 and $399,204, for Class B and 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 Manager may use its own resources to finance the distribution of the
Fund's shares.
<PAGE>
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $500,222,530 and $569,910,627, respectively, for the period ended
November 30, 1994. At November 30, 1994, the cost of securities for federal
income tax purposes was $693,066,477. Accordingly, gross unrealized
appreciation of investments was $138,942,257 and gross unrealized depreciation
of investments was $52,440,916, resulting in net unrealized appreciation of
$86,501,341.
- --------------------------------------------------------------------------------
NOTE E: CAPITAL STOCK
There are 600,000,000 shares of $0.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Class A shares consists of 300,000,000 shares. Class B and Class C shares each
consist of 150,000,000 shares. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------------------ ------------------------------------
ELEVEN MONTHS ENDED YEAR ENDED ELEVEN MONTHS ENDED YEAR ENDED
NOVEMBER 30, DECEMBER 31, NOVEMBER 30, DECEMBER 31,
1994** 1993 1994** 1993
------------------- ------------ ------------------- --------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold. . . . . . . . . . . . . . . . . 4,326,797 7,594,167 $ 29,295,693 $ 53,508,076
Shares issued in
reinvestment
of dividends and
distributions. . . . . . . . . . . . . . . -0- 9,738,918 -0- 66,715,479
Shares redeemed. . . . . . . . . . . . . . . (10,990,633) (14,916,844) (74,078,822) (104,869,993)
----------- ----------- ------------ -------------
Net increase (decrease) . . . . . . . . . . (6,663,836) 2,416,241 $(44,783,129) $ 15,353,562
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
CLASS B
Shares sold. . . . . . . . . . . . . . . . . 1,460,913 1,409,840 $ 9,756,379 $ 10,019,007
Shares issued in
reinvestment of
dividends and
distributions. . . . . . . . . . . . . . . -0- 160,944 -0- 1,087,983
Shares redeemed. . . . . . . . . . . . . . . (502,655) (313,338) (3,332,022) (2,343,628)
----------- ----------- ------------ -------------
Net increase . . . . . . . . . . . . . . . . 958,258 1,257,446 $ 6,424,357 $ 8,763,362
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
<CAPTION>
SHARES AMOUNT
------------------------------------- -------------------------------------
ELEVEN MONTHS ENDED MAY 3, 1993* ELEVEN MONTHS ENDED MAY 3, 1993*
NOVEMBER 30, TO DECEMBER 31, NOVEMBER 30, TO DECEMBER 31,
1994** 1993 1994** 1993
------------------- --------------- ------------------- ---------------
<S> <C> <C> <C> <C>
CLASS C
Shares sold. . . . . . . . . . . . . . . . . 905,525 675,830 $6,039,305 $4,943,194
Shares issued in
reinvestment of
dividends and
distributions. . . . . . . . . . . . . . . -0- 37,401 -0- 253,202
Shares redeemed. . . . . . . . . . . . . . . (539,376) (121,267) (3,563,509) (895,217)
----------- ----------- ------------ -------------
Net increase . . . . . . . . . . . . . . . . 366,149 591,964 $2,475,796 $4,301,179
----------- ----------- ------------ -------------
----------- ----------- ------------ -------------
<FN>
- --------------------------------------------------------------------------------
* Commencement of distribution.
** The Fund changed its fiscal year end from December 31 to November 30.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS THE ALLIANCE FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
ELEVEN MONTHS ENDED
NOVEMBER 30, YEAR ENDED DECEMBER 31,
------------------- -----------------------------------------------------
1994** 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year . . . . . $6.85 $6.68 $6.29 $5.22 $6.87
----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . .01 .02 .05 .07 .09
Net realized and unrealized gain
(loss) on securities . . . . . . . . . . . (.23) .93 .87 1.70 (.32)
----- ----- ----- ----- -----
Net increase (decrease) in net asset value
from operations. . . . . . . . . . . . . . (.22) .95 .92 1.77 (.23)
----- ----- ----- ----- -----
LESS: DISTRIBUTIONS
Dividends from net investment income . . . . -0- (.02) (.05) (.07) (.18)
Distributions from net realized gains. . . . -0- (.76) (.48) (.63) (1.24)
----- ----- ----- ----- -----
Total dividends and distributions. . . . . . -0- (.78) (.53) (.70) (1.42)
----- ----- ----- ----- -----
Net asset value, end of period . . . . . . . $6.63 $6.85 $6.68 $6.29 $5.22
----- ----- ----- ----- -----
----- ----- ----- ----- -----
TOTAL RETURN
Total investment return based on
net asset value (c) . . . . . . . . . . . (3.21)% 14.26% 14.70% 33.91% (4.36)%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted). . . . . . . . . . . . . . $760,679 $831,814 $794,733 $748,226 $620,374
Ratio of expenses to average net assets. . . 1.05%(d) 1.01% .81% .83% .81%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . .21%(d) .27% .79% 1.03% 1.56%
Portfolio turnover rate. . . . . . . . . . . 63% 66% 58% 74% 71%
- -------------------------------------------------------------------------------------------------------------------------------
See footnote summary on page 15.
<PAGE>
<CAPTION>
CLASS B
--------------------------------------------------------------
ELEVEN MONTHS ENDED
NOVEMBER 30, YEAR ENDED DECEMBER 31,
------------------- -------------------------------------
1994** 1993 1992 1991
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of year . . . . . . . . . . . . . . $6.76 $6.64 $6.27 $6.14
----- ----- ----- -----
----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) . . . . . . . . . . . . . . . . . (.03) (.03) (.01)(b) .01(b)
Net realized and unrealized gain (loss) on securities. . . . (.23) .91 .87 .79
----- ----- ----- -----
Net increase (decrease) in net asset value from operations . (.26) .88 .86 .80
----- ----- ----- -----
LESS: DISTRIBUTIONS
Dividends from net investment income . . . . . . . . . . . . -0- -0- (.01) (.04)
Distributions from net realized gains. . . . . . . . . . . . -0- (.76) (.48) (.63)
----- ----- ----- -----
Total dividends and distributions. . . . . . . . . . . . . . -0- (.76) (.49) (.67)
----- ----- ----- -----
Net asset value, end of period . . . . . . . . . . . . . . . $6.50 $6.76 $6.64 $6.27
----- ----- ----- -----
----- ----- ----- -----
TOTAL RETURN
Total investment return based on net asset value (c) . . . . (3.85)% 13.28% 13.75% 13.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted). . . . . . . . . . $18,138 $12,402 $3,825 $852
Ratio of expenses to average net assets. . . . . . . . . . . 1.89%(d) 1.90% 1.64% 1.64%(d)
Ratio of net investment income (loss) to average net assets. (.60)%(d) (.64)% (.04)% .10%(d)
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 63% 66% 58% 74%
<CAPTION>
CLASS C
-------------------------------------
ELEVEN MONTHS ENDED MAY 3, 1993(A)
NOVEMBER 30, TO DECEMBER 31,
1994** 1993
------------------- ---------------
<S> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . $6.77 $6.67
----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment loss. . . . . . . . . . . . . . . . . . . . . . (.03) (.02)
Net realized and unrealized gain (loss) on securities. . . . . (.24) .88
----- -----
Net increase (decrease) in net asset value from operations . . (.27) .86
----- -----
LESS: DISTRIBUTIONS
Dividends from net investment income . . . . . . . . . . . . . -0- -0-
Distributions from net realized gains. . . . . . . . . . . . . -0- (.76)
----- -----
Total dividends and distributions. . . . . . . . . . . . . . . -0- (.76)
----- -----
Net asset value, end of period . . . . . . . . . . . . . . . . $6.50 $6.77
----- -----
----- -----
TOTAL RETURN
Total investment return based on net asset value (c) . . . . . (3.99)% 13.95%
----- -----
----- -----
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted). . . . . . . . . . . $6,230 $4,006
Ratio of expenses to average net assets. . . . . . . . . . . . 1.87%(d) 1.94%(d)
Ratio of net investment loss to average net assets. . . . . . (.59)%(d) (.74)%(d)
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . . 63% 66%
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
* For the period March 4, 1991 (commencement of distribution) to December 31,
1991.
** The Fund changed its fiscal year end from December 31 to November 30.
(a) Commencement of distribution.
(b) Based on average shares outstanding.
(c) 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 charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment returns calculated for periods
of less than one year are not annualized.
(d) Annualized.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS THE ALLIANCE FUND
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF THE ALLIANCE FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Alliance Fund, Inc. (the
"Fund") at November 30, 1994, the results of its operations for the period
January 1, 1994 to November 30, 1994, the changes in net assets for the period
ended November 30, 1994 and for the year ended December 31, 1993 and the
financial highlights for each of the periods presented in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit To obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 1994 by
correspondence with the custodian and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
January 20, 1995
<PAGE>
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK(1)
DAVID H. DIEVLER
JOHN H. DOBKIN(1)
WILLIAM H. FOULK, JR.(1)
DR. JAMES M. HESTER(1)
CLIFFORD L. MICHEL(1)
ROBERT C. WHITE(1)
OFFICERS
ALFRED HARRISON, EXECUTIVE VICE PRESIDENT
PAUL H. JENKEL, SENIOR VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
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
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
<PAGE>
THE ALLIANCE FUND
GROWTH OF A $10,000 INVESTMENT:
11/30/84 TO 11/30/94
[Growth Chart - see appendix]
------------------------------------------------------------
1 2 3 4
------------------------------------------------------------
1 Alliance Fund S & P 500 Russell 1000
------------------------------------------------------------
2 11/30/84 10000 10000 10000
------------------------------------------------------------
3 12/31/84 9790 10340 10350
------------------------------------------------------------
4 12/31/85 12880 13610 13662
------------------------------------------------------------
5 12/31/86 14500 16150 16121
------------------------------------------------------------
6 12/31/87 15210 16980 16604
------------------------------------------------------------
7 12/31/88 17800 19780 19426
------------------------------------------------------------
8 12/31/89 21980 26040 25254
------------------------------------------------------------
9 12/31/90 21020 25220 24244
------------------------------------------------------------
10 12/31/91 28150 32880 32365
------------------------------------------------------------
11 12/31/92 32280 35380 35116
------------------------------------------------------------
12 12/31/93 36890 38930 38627
------------------------------------------------------------
13 11/30/94 35708 38700 37854
------------------------------------------------------------
This chart illustrates the total value of an assumed investment in The Alliance
Fund Class A shares after deducting the maximum 4.25% sales charge, and with
dividends and capital gains reinvested. Performance for Class B and Class C
shares will vary from the results shown above due to differences in expenses
charged to those classes. Results should not be considered representative of
future gain or loss in capital value or dividend income.
The Standard and Poor's 500-stock index is an unmanaged index that includes 500
U.S. stocks. It is a common measure of the performance of the overall U.S.
stock market.
The Russell 1000 Index is an unmanaged index that compiles the 1000 largest U.S.
stocks as measured by price to book ratios: those with the highest ratios are
considered "growth" stocks (the remaining are considered value stocks).
When comparing The Alliance Fund to the two indexes shown above, you should note
that the Fund's performance reflects the maximum sales charge of 4.25% while no
such charges are reflected in the performance of the indexes.
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
<TABLE>
<S> <C>
BULK RATE
U.S. POSTAGE
PAID
New York, NY
Permit No. 8048
</TABLE>
ANNUAL REPORT
NOVEMBER 30, 1994
ALLAR
