THE ALLIANCE FUND
SEMI-ANNUAL REPORT
MAY 31, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS THE ALLIANCE FUND
_______________________________________________________________________________
July 27, 1998
Dear Shareholder:
This semi-annual shareholder report reviews investment results and market
activity for The Alliance Fund for the six and 12-month periods ended May 31,
1998. In the following table, the Fund's performance is compared with that of
the S&P 400 Midcap Index (S&P 400), which is a measure of mid-cap stock
performance, and the Russell 1000 Growth Stock Index, which tracks the
performance of large, growth-oriented companies.
INVESTMENT RESULTS
After outperforming its benchmarks in the six and 12-month periods ending
November 30, 1997, the Fund has lagged its benchmark in the current reporting
period ended May 31, 1998. Large holdings in energy service companies, which
were negatively impacted by the sharp decline in the price of oil, was the most
important reason for the Fund's relative underperformance.
INVESTMENT RESULTS*
Periods Ended May 31, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE FUND
Class A 7.31% 28.06%
Class B 6.87% 27.04%
Class C 6.86% 27.18%
S&P 400 MIDCAP INDEX 12.15% 29.91%
RUSSELL 1000 GROWTH
STOCK INDEX 14.70% 28.77%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIODS AND ARE
BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES. 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. 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 S&P 400 MIDCAP INDEX IS AN UNMANAGED INDEX OF 400 U.S. COMPANIES WHICH
ARE CHOSEN FOR THEIR MARKET SIZE, LIQUIDITY AND INDUSTRY GROUP REPRESENTATION.
IT IS A MARKET-VALUE WEIGHTED INDEX REPRESENTING APPROXIMATELY 10% OF THE
AGGREGATE MARKET VALUE OF U.S. DOMESTIC COMPANIES. THE RUSSELL 1000 GROWTH
STOCK INDEX CONSISTS OF 1000 OF THE LARGEST STOCKS REPRESENTING APPROXIMATELY
87% OF THE U.S. EQUITY MARKET. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
REVIEW OF INVESTMENT STRATEGY
While The Alliance Fund will continue to make investments across the
capitalization spectrum, in large-, mid- and small-cap companies, the portfolio
focuses primarily on mid-cap stocks. As of May 31, 1998, the mean and the
median market capitalizations of the holdings in the Fund's portfolio were
approximately $10 billion and $3 billion, respectively. These statistics are
much more comparable to those of a mid-cap index such as the S&P 400, rather
than to those of a larger capitalization index such as the S&P 500 Stock Index
or the Russell 1000 Growth Stock Index. We continue to attempt to identify the
most rapidly growing companies in this mid-cap range, and to buy and hold them
at attractive valuation levels.
Currently, we have major stock holdings in the financial services sector such
as MBNA Corp., CNA Financial Corp., Legg Mason, Inc., and A.G. Edwards, Inc. We
believe that the earnings progress of these companies has been excellent, and
that their valuations remain attractive. These holdings positively influenced
the Fund's relative performance over the six and 12-month periods ended May 31,
1998.
Your Fund is also heavily overweighted in energy service and airline stocks. As
previously mentioned, in recent months energy service stocks negatively
impacted relative portfolio returns. However, our airline holdings modestly
outperformed as lower oil prices had a positive effect on their cost structure.
Going forward, we see airline earnings as quite strong because industry load
factors (the percentage of seats occupied and paid for) are extremely high,
while aircraft capacity additions are growing relatively slowly. Your Fund's
largest holding in the airline sector is Continental Airlines, Inc., a rapidly
improving and very profitable air carrier.
Other important changes in your Fund's portfolio included the sale of the
entire holding in Teleport Communications Group, Inc. at a substantial gain,
after AT&T announced it was acquiring the company. Most of the Fund's Cendant
position was sold prior to the disclosure about accounting irregularities and
the significant decline in the stock price in April 1998. One of the Fund's
larger new purchases was United States Filter Corp., a water
1
THE ALLIANCE FUND
_______________________________________________________________________________
treatment company which we believe has excellent growth prospects.
CURRENT OUTLOOK
Equity valuations are high by historical measures, while fundamental factors
(U.S. economic growth, interest rates, and inflation) remain in very positive
territory. Global financial markets continue to be volatile with Asian concerns
the key reason for the volatility. Although cognizant of current high
valuations for the general U.S. market, we continue to believe good growth
opportunities in the mid-cap area are available at reasonable prices. In
particular, we remain enthusiastic about the attractive valuations and growth
prospects for the stocks in the Fund.
Thank you for your continued interest in The Alliance Fund. We look forward to
reporting to you on market activity and your Fund's investment results in the
coming periods.
Sincerely,
John D. Carifa
Chairman and President
Alden Stewart
Executive 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.
2
INVESTMENT OBJECTIVE AND POLICIES THE ALLIANCE FUND
_______________________________________________________________________________
The Alliance Fund is an open-end, diversified investment company that seeks
long-term growth of capital and income primarily through investments in common
stocks. While the Fund normally invests substantially all of its assets in
equities that Alliance believes will appreciate in value, it may invest in a
variety of securities, including convertible bonds, U.S. Government securities,
and other high-quality instruments. The Fund has the flexibility to invest
without limit in foreign securities.
INVESTMENT RESULTS
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF MAY 31, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 28.06% 22.68%
Five Years 18.98% 17.95%
Ten Years 16.95% 16.45%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 27.04% 23.30%
Five Years 17.96% 17.96%
Since Inception* 16.88% 16.88%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 27.18% 26.25%
Five Years 17.98% 17.98%
Since Inception* 18.90% 18.90%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (MARCH 31,
1998)
CLASS A CLASS B CLASS C
--------- --------- ---------
1 Year 43.57% 44.73% 47.88%
5 Years 19.34% 19.38% n/a
10 Years 17.27% n/a n/a
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 (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 returns for Advisor Class shares will differ due to
different expenses associated with that class.
SEC Average Annual Total Returns as of the most recent quarter-end reflect
reinvestment of all distributions and deduction of the maximum 4.25% front-end
sales charges and applicable 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.
* Since Inception: 3/4/91 Class B; 5/3/93 Class C.
n/a: not applicable.
3
TEN LARGEST HOLDINGS
MAY 31, 1998 (UNAUDITED) THE ALLIANCE FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Continental Airlines, Inc. Cl.B $78,056,250 5.9%
CNA Financial Corp. 68,062,500 5.1
MBNA Corp. 66,543,750 5.0
Republic Industries, Inc. 64,025,000 4.8
WorldCom, Inc. 59,150,000 4.4
Telephone and Data Systems, Inc. 50,828,750 3.8
Northwest Airlines Corp. Cl.A 42,899,500 3.2
United States Filter Corp. 38,046,875 2.9
Diamond Offshore Drilling, Inc. 34,807,500 2.6
Noble Drilling Corp. 32,450,000 2.4
$534,870,125 40.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
_______________________________________________________________________________
SHARES*
---------------------------------
HOLDINGS
PURCHASES BOUGHT 5/31/98
- -------------------------------------------------------------------------------
Altera Corp. 310,000 310,000
ASM Lithography Holding NV 500,000 500,000
BJ Services Co. 400,000 400,000
Carnival Corp. Cl.A 410,000 410,000
Intuit, Inc. 520,000 520,000
Mirage Resorts, Inc. 550,000 550,000
Noble Drilling Corp. 575,000 1,100,000
Royal Caribbean Cruises, Ltd. 460,000 460,000
UAL Corp. 150,000 150,000
United States Filter Corp. 995,000 1,250,000
HOLDINGS
SALES SOLD 5/31/98
- -------------------------------------------------------------------------------
ADC Telecommunications, Inc. 620,000 100,000
Baker Hughes, Inc. 420,000 -0-
Cendant Corp. 900,000 100,000
Halliburton Co. 1,220,000 -0-
Loews Corp. 240,000 120,000
Merrill Lynch & Co., Inc. 460,000 200,000
Morgan Stanley, Dean Witter & Co. 540,000 360,000
Schlumberger, Ltd. 230,000 -0-
Teleport Communications Group, Inc. Cl.A 1,250,000 -0-
Travelers Group, Inc. 700,000 -0-
* Adjusted for stock splits.
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1998 (UNAUDITED) THE ALLIANCE FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-98.8%
CONSUMER SERVICES-22.6%
AIRLINES-11.7%
British Airways Plc. (ADR) (a) 40,000 $ 4,205,000
Continental Airlines, Inc. Cl.B (b) 1,380,000 78,056,250
KLM Royal Dutch Air 275,000 10,707,812
Northwest Airlines Corp. Cl.A (b) 952,000 42,899,500
Southwest Airlines Co. 325,000 8,673,438
UAL Corp. (b) 150,000 11,915,625
------------
156,457,625
APPAREL-0.9%
Abercrombie & Fitch Co. Cl.A (b) 64,500 2,725,125
Nautica Enterprises, Inc. (b) 250,000 7,312,500
Wolverine World Wide, Inc. 104,700 2,584,781
------------
12,622,406
BROADCASTING & CABLE-0.2%
Scripps E.W. Co. Cl.A 60,000 3,172,500
TCI Group Series A (b) 2,959 101,531
------------
3,274,031
ENTERTAINMENT & LEISURE-5.7%
Carnival Corp. Cl.A 410,000 27,777,500
Mirage Resorts, Inc. (b) 550,000 11,446,875
Pep Boys Manny, Moe & Jack 200,000 4,450,000
Royal Caribbean Cruises, Ltd. 460,000 32,056,250
------------
75,730,625
RESTAURANTS & LODGING-1.7%
Extended Stay America, Inc. (b) 1,000,000 11,000,000
Host Marriott Corp. (b) 520,000 10,010,000
Suburban Lodges of America, Inc. (b) 70,000 1,124,375
------------
22,134,375
RETAIL - GENERAL MERCHANDISE-2.2%
Circuit City Stores, Inc. -CarMax Group (b) 550,000 5,328,125
Corrections Corp. of America (b) 100,000 2,275,000
Dickson Concepts International, Ltd. (c) 293,000 380,004
Staples, Inc. (b) 250,000 6,281,250
The Limited, Inc. 225,000 7,481,250
Tiffany & Co. 150,000 7,181,250
------------
28,926,879
MISCELLANEOUS-0.2%
Cendant Corp. (b) 100,000 2,168,750
------------
301,314,691
FINANCE-21.5%
BANKING - REGIONAL-0.1%
PBOC Holdings, Inc. (b) 70,000 988,750
BROKERAGE & MONEY MANAGEMENT-6.6%
Edwards (A.G.), Inc. 460,000 18,601,250
Legg Mason, Inc. 400,000 24,125,000
Merrill Lynch & Co., Inc. 200,000 17,900,000
Morgan Stanley, Dean Witter & Co. 360,000 28,102,500
------------
88,728,750
INSURANCE-7.1%
CNA Financial Corp. (b) 450,000 68,062,500
IPC Holdings Ltd. 112,100 3,355,993
5
PORTFOLIO OF INVESTMENTS (CONTINUED) THE ALLIANCE FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
Life Re Corp. 274,600 $ 20,217,425
NAC Re Corp. 63,300 2,955,319
------------
94,591,237
REAL ESTATE-1.5%
Boston Properties, Inc. 325,000 11,050,000
Excel Legacy Corp. (b) 158,000 809,750
Excel Realty Trust, Inc. 158,000 4,305,500
Impac Mortgage Holdings, Inc. 187,500 2,941,406
Imperial Credit Commercial Mortgage Investment 50,000 692,188
------------
19,798,844
MISCELLANEOUS-6.2%
Associates First Capital Corp. Cl.A 120,000 8,977,500
MBNA Corp. 2,100,000 66,543,750
PMI Group, Inc. 100,000 7,518,750
------------
83,040,000
------------
287,147,581
ENERGY-11.7%
DOMESTIC INTEGRATED-0.2%
USX-Marathon Group 100,000 3,500,000
DOMESTIC PRODUCERS-0.5%
Brown (Tom), Inc. (b) 243,500 4,078,625
Helmerich & Payne, Inc. 50,000 1,262,500
Union Texas Petroleum Holdings, Inc. 44,700 1,229,250
------------
6,570,375
OIL SERVICE-8.3%
BJ Services Co. (b) 400,000 13,075,000
Dresser Industries, Inc. 250,000 11,640,625
Ensco International, Inc. 160,000 4,050,000
Lukoil Holdings (ADR) (d)
Common 15,000 660,000
Preferred 100,000 1,076,000
Noble Drilling Corp. (b) 1,100,000 32,450,000
Oceaneering International,Inc. (b) 347,600 7,473,400
Parker Drilling Co. (b) 1,150,100 9,703,969
Rowan Cos., Inc. (b) 1,200,000 30,675,000
------------
110,803,994
MISCELLANEOUS-2.7%
AES Corp. (b) 20,000 951,250
Diamond Offshore Drilling, Inc. 728,000 34,807,500
------------
35,758,750
------------
156,633,119
UTILITIES-11.3%
TELEPHONE UTILITY-11.3%
Hyperion Telecommunications, Inc. Cl.A (b) 105,000 1,647,187
Millicom International Cellular, SA (b)(e) 350,000 13,606,250
Nextel Communications, Inc. Cl.A (b) 50,000 1,178,125
Telephone and Data Systems, Inc. 1,161,800 50,828,750
United States Cellular Corp. (b) 780,000 23,936,250
WorldCom, Inc. (b) 1,300,000 59,150,000
------------
150,346,562
TECHNOLOGY-10.6%
COMMUNICATION EQUIPMENT-0.9%
ADC Telecommunications, Inc. (b) 100,000 2,812,500
Tellabs, Inc. (b) 140,000 9,620,625
------------
12,433,125
COMPUTER HARDWARE-0.2%
ONSALE, Inc. (b) 120,000 3,082,500
COMPUTER SERVICES-0.7%
DBT Online, Inc. (b) 114,000 2,550,750
First Data Corp. 200,000 6,650,000
------------
9,200,750
6
THE ALLIANCE FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMPUTER SOFTWARE-3.8%
Checkfree Corp. (b) 160,000 $ 3,630,000
Intuit, Inc. (b) 520,000 24,635,000
Networks Associates, Inc. (b) 370,000 22,662,500
------------
50,927,500
NETWORKING SOFTWARE-1.8%
Ascend Communications, Inc. (b) 300,000 12,956,250
Fore Systems, Inc. (b) 480,000 10,560,000
------------
23,516,250
SEMI-CONDUCTOR CAPITAL EQUIPMENT-1.5%
ASM Lithography Holding NV (b)(f) 500,000 19,156,250
SEMI-CONDUCTOR COMPONENTS-1.7%
Altera Corp. (b) 310,000 10,423,750
Xilinx, Inc. (b) 320,000 12,170,000
------------
22,593,750
------------
140,910,125
CONSUMER MANUFACTURING-7.4%
APPLIANCES-0.2%
Steelcase, Inc. 65,000 1,937,812
Sunbeam Corp. 2,200 50,463
------------
1,988,275
AUTO & RELATED-5.3%
Dollar Thrifty Automotive Group, Inc. (b) 497,600 7,153,000
Republic Industries, Inc. (b) 2,600,000 64,025,000
------------
71,178,000
BUILDING & RELATED-0.2%
IRI International Corp. (b) 200,000 2,587,500
TEXTILE PRODUCTS-1.2%
Tommy Hilfiger Corp. (b) 239,800 16,126,550
MISCELLANEOUS-0.5%
Industrie Natuzzi SpA (ADR) (g) 209,800 6,136,650
------------
98,016,975
HEALTH CARE-7.0%
BIOTECHNOLOGY-5.9%
Alkermes, Inc. (b) 50,000 1,093,750
6.50% cv. pfd. (h) 100,000 4,775,000
Centocor, Inc. (b) 746,700 29,121,300
GelTex Pharmaceuticals, Inc. (b) 500,000 11,531,250
Genzyme Corp. (b) 150,000 4,106,250
IDEC Pharmaceuticals Corp. (b) 91,700 2,888,550
MedImmune, Inc. (b) 510,000 25,436,250
------------
78,952,350
MEDICAL PRODUCTS-0.6%
Boston Scientific Corp. (b) 120,000 7,650,000
MEDICAL SERVICES-0.5%
Columbia/HCA Healthcare Corp. 225,000 7,354,687
------------
93,957,037
CAPITAL GOODS-3.3%
ELECTRICAL EQUIPMENT-0.5%
Philips Electronics NV (ADR) (f) 45,000 4,280,625
Western Wireless Corp. Cl.A (b) 120,000 2,220,000
------------
6,500,625
MISCELLANEOUS-2.8%
United States Filter Corp. (b) 1,250,000 38,046,875
------------
44,547,500
7
PORTFOLIO OF INVESTMENTS (CONTINUED) THE ALLIANCE FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
CONSUMER STAPLES-1.4%
FOOD-0.5%
Tyson Foods, Inc. Cl.A 300,000 $ 6,337,500
TOBACCO-0.8%
Loews Corp. 120,000 10,890,000
MISCELLANEOUS-0.1%
Genesis Direct, Inc. (b) 150,000 1,743,750
------------
18,971,250
TRANSPORTATION-0.8%
MISCELLANEOUS-0.8%
Knightsbridge Tankers, Ltd. 175,000 5,053,125
OMI Corp. (b) 600,000 5,512,500
------------
10,565,625
MULTI INDUSTRY COMPANIES-0.8%
Culligan Water Technologies, Inc. (b) 40,000 2,232,500
Dynex Capital, Inc. 150,000 1,790,625
U.S. Industries, Inc. 230,000 6,066,250
------------
10,089,375
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
BASIC INDUSTRIES-0.4%
CHEMICALS-0.2%
AKZO Nobel NV (f) 15,000 $ 3,134,184
CONTAINERS-0.2%
Owens-Illinois, Inc. (b) 50,000 2,246,875
------------
5,381,059
Total Common & Preferred Stocks
(cost $1,125,822,988) 1,317,880,899
SHORT-TERM INVESTMENT-1.1%
COMMERCIAL PAPER-1.1%
Prudential Funding Corp. 5.55%, 6/01/98
(amortized cost $14,960,000) $14,960 14,960,000
TOTAL INVESTMENTS-99.9% (cost $1,140,782,988) 1,332,840,899
Other assets less liabilities-0.1% 693,917
NET ASSETS-100% $1,333,534,816
(a) Country of origin--United Kingdom
(b) Non-income producing security.
(c) Country of origin--Hong Kong.
(d) Country of origin--Russia.
(e) Country of origin--Luxembourg.
(f) Country of origin--Netherlands.
(g) Country of origin--Italy.
(h) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At May 31, 1998, this security
amounted to $4,775,000 or 0.4% of net assets.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED) THE ALLIANCE FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $1,140,782,988) $ 1,332,840,899
Cash 9,853
Receivable for capital stock sold 2,861,776
Dividends receivable 626,702
Prepaid expenses 66,355
Total assets 1,336,405,585
LIABILITIES
Unclaimed dividends 1,005,964
Management fee payable 769,637
Payable for capital stock redeemed 462,045
Distribution fee payable 319,906
Payable for investment securities purchased 43,138
Accrued expenses 270,079
Total liabilities 2,870,769
NET ASSETS $ 1,333,534,816
COMPOSITION OF NET ASSETS
Capital stock, at par $ 1,920,324
Additional paid-in capital 1,027,377,075
Net investment loss (2,349,544)
Accumulated net realized gain on investments and foreign
currency transactions 114,529,050
Net unrealized appreciation of investments 192,057,911
$ 1,333,534,816
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($1,188,742,028 / 169,880,405 shares of capital stock
issued and outstanding) $7.00
Sales charge--4.25% of public offering price .31
Maximum offering price $7.31
CLASS B SHARES
Net asset value and offering price per share
($99,866,127 / 15,393,433 shares of capital stock
issued and outstanding) $6.49
CLASS C SHARES
Net asset value and offering price per share
($30,979,987 / 4,766,330 shares of capital stock
issued and outstanding) $6.50
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($13,946,674 / 1,992,271 shares of capital stock issued
and outstanding) $7.00
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED) THE ALLIANCE FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $32,976) $ 4,370,057
Interest 273,064 $ 4,643,121
EXPENSES
Management fee 4,408,743
Distribution fee - Class A 1,203,653
Distribution fee - Class B 436,662
Distribution fee - Class C 121,543
Transfer agency 457,738
Custodian 117,317
Printing 75,798
Administrative 66,737
Taxes 34,445
Registration 27,099
Audit and legal 16,465
Directors' fees 14,422
Miscellaneous 12,043
Total expenses 6,992,665
Net investment loss (2,349,544)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 132,796,339
Net realized loss on foreign currency
transactions (10,489)
Net change in unrealized appreciation of
investments (39,706,354)
Net gain on investments and foreign currency
transactions 93,079,496
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 90,729,952
See notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS THE ALLIANCE FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (2,349,544) $ (3,938,274)
Net realized gain on investments
and foreign currency transactions 132,785,850 312,544,907
Net change in unrealized
appreciation of investments and
foreign currency denominated
assets and liabilities (39,706,354) 4,067,927
Net increase in net assets from
operations 90,729,952 312,674,560
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A -0- (2,584,179)
Advisor Class -0- (4,914)
Net realized gain on investments
Class A (297,697,708) (136,315,610)
Class B (19,042,143) (6,355,169)
Class C (5,056,456) (1,970,589)
Advisor Class (2,587,444) (148,119)
CAPITAL STOCK TRANSACTIONS
Net increase 266,146,613 77,246,571
Total increase 32,492,814 242,542,551
NET ASSETS
Beginning of year 1,301,042,002 1,058,499,451
End of period $ 1,333,534,816 $ 1,301,042,002
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1998 (UNAUDITED) 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. 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 will 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% 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
Cshares 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 prices 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. 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 and foreign exchange
currency contracts, currency 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. The Fund does not isolate the effect of
fluctuations in foreign currency exchange rates when determining the gain or
loss upon the sale of equity securities. 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 and foreign currency denominated assets and liabilities.
3. 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
12
THE ALLIANCE FUND
_______________________________________________________________________________
company taxable income and net realized gains, if any, to shareholders.
Therefore, no provisions for federal income or excise taxes are required.
4. 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. The Fund accretes discounts and amortizes premiums as
adjustments to interest income. Investment gains and losses are determined on
the identified cost basis.
5. 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 net assets 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 the Advisory Class shares have no distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends 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: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the management agreement, the Fund pays Alliance Capital
Management L.P. (the "Manager"), a fee at an annual rate of .75% on the first
$500 million of average daily net assets, .65% on the next $500 million of
average daily net assets and .55% on average daily net assets in excess of $1
billion. The fee is accrued daily and paid monthly.
Pursuant to the management agreement, the Fund paid $66,737 to the Manager
representing the cost of certain legal and accounting services provided to the
Fund by the Manager for the six months ended May 31, 1998.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Manager, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $290,755 for the six months ended May 31, 1998.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Manager, serves as the Distributor of the Fund's shares. The
Distributor received front-end sales charges of $62,385 from the sale of Class
A shares and $55,177 and $6,205 in contingent deferred sales charges imposed
upon redemptions by shareholders of Class B and Class C shares, respectively,
for the six months ended May 31, 1998.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1998 amounted to $1,896,392, of which $45,930 was paid to Donaldson,
Lufkin & Jenrette Securities Corp., an affiliate of the Manager.
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 Fund's average daily net assets attributable to Class
A shares and 1% of the average daily net assets attributable to both 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
$4,967,632 and $1,134,375, 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 accor-
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ALLIANCE FUND
_______________________________________________________________________________
dance 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.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $701,022,062 and $776,827,706,
respectively, for the six months ended May 31, 1998. There were no purchases or
sales of U.S. government or government agency obligations for the six months
ended May 31, 1998. At May 31, 1998, the cost of investments for federal income
tax purposes was the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $223,891,451 and
gross unrealized depreciation of investments was $31,833,540, resulting in net
unrealized appreciation of $192,057,911.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30, MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 10,021,336 6,987,684 $ 70,316,506 $ 57,214,484
Shares issued in
reinvestment of
dividends and
distributions 36,393,592 16,635,560 236,558,392 106,301,324
Shares converted
from Class B 162,399 212,659 1,628,045 1,657,992
Shares redeemed (14,867,541) (15,229,370) (106,799,898) (116,622,533)
Net increase 31,709,786 8,606,533 $ 201,703,045 $ 48,551,267
CLASS B
Shares sold 5,443,151 4,424,115 $ 36,044,340 $ 33,748,548
Shares issued in
reinvestment of
distributions 2,936,100 865,292 17,763,458 5,287,064
Shares converted
to Class A (169,814) (223,476) (1,628,045) (1,657,992)
Shares redeemed (1,359,585) (2,525,999) (8,533,711) (18,835,577)
Net increase 6,849,852 2,539,932 $ 43,646,042 $ 18,542,043
CLASS C
Shares sold 9,989,844 2,634,424 $ 67,037,738 $ 20,389,284
Shares issued in
reinvestment of
distributions 783,096 248,536 4,745,568 1,518,562
Shares redeemed (8,292,651) (2,472,942) (55,837,625) (19,320,033)
Net increase 2,480,289 410,018 $ 15,945,681 $ 2,587,813
14
THE ALLIANCE FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30, MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
ADVISOR CLASS
Shares sold 1,138,387 2,621,487 $ 7,486,403 $ 21,634,966
Shares issued in
reinvestment of
dividends and
distributions 394,506 22,857 2,560,345 145,601
Shares redeemed (722,454) (1,602,903) (5,194,903) (14,215,119)
Net increase 810,439 1,041,441 $ 4,851,845 $ 7,565,448
15
FINANCIAL HIGHLIGHTS THE ALLIANCE FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS JANUARY 1, 1994
ENDED YEAR ENDED NOVEMBER 30, TO YEAR ENDED
MAY 31, 1998 ------------------------------------- NOVEMBER 30, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $8.70 $7.71 $7.72 $6.63 $6.85 $6.68
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.01)(b) (.02)(b) .02 .02(b) .01 .02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .48 2.09 1.06 2.08 (.23) .93
Net increase (decrease) in net asset
value from operations .47 2.07 1.08 2.10 (.22) .95
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.02) (.02) (.01) -0- (.02)
Distributions from net realized gains (2.17) (1.06) (1.07) (1.00) -0- (.76)
Total dividends and distributions (2.17) (1.08) (1.09) (1.01) -0- (.78)
Net asset value, end of period $7.00 $8.70 $7.71 $7.72 $6.63 $6.85
TOTAL RETURN
Total investment return based on net
asset value (c) 7.31% 31.82% 16.49% 37.87% (3.21)% 14.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,188,742 $1,201,435 $999,067 $945,309 $760,679 $831,814
Ratio of expenses to average net assets .98%(d) 1.03% 1.04% 1.08% 1.05%(d) 1.01%
Ratio of net investment income (loss) to
average net assets (.29)%(d) (.29)% .30% .31% .21%(d) .27%
Portfolio turnover rate 53% 158% 80% 81% 63% 66%
</TABLE>
See footnote summary on page 19.
16
THE ALLIANCE FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS JANUARY 1, 1994
ENDED YEAR ENDED NOVEMBER 30, TO YEAR ENDED
MAY 31, 1998 ---------------------------------- NOVEMBER 30, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $8.25 $7.40 $7.49 $6.50 $6.76 $6.64
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.04)(b) (.08)(b) (.01) (.03)(b) (.03) (.03)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .45 1.99 .99 2.02 (.23) .91
Net increase (decrease) in net asset
value from operations .41 1.91 .98 1.99 (.26) .88
LESS: DISTRIBUTIONS
Distributions from net realized gains (2.17) (1.06) (1.07) (1.00) -0- (.76)
Net asset value, end of period $6.49 $8.25 $7.40 $7.49 $6.50 $6.76
TOTAL RETURN
Total investment return based on net
asset value (c) 6.87% 30.74% 15.47% 36.61% (3.85)% 13.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $99,866 $70,461 $44,450 $31,738 $18,138 $12,402
Ratio of expenses to average net assets 1.80%(d) 1.85% 1.87% 1.90% 1.89%(d) 1.90%
Ratio of net investment loss to
average net assets (1.09)%(d) (1.12)% (.53)% (.53)% (.60)%(d) (.64)%
Portfolio turnover rate 53% 158% 80% 81% 63% 66%
</TABLE>
See footnote summary on page 19.
17
FINANCIAL HIGHLIGHTS (CONTINUED) THE ALLIANCE FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------------
SIX MONTHS JANUARY 1, 1994 MAY 3,
ENDED YEAR ENDED NOVEMBER 30, TO 1993(E) TO
MAY 31, 1998 ----------------------------------- NOVEMBER 30, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $8.26 $7.41 $7.50 $6.50 $6.77 $6.67
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.04)(b) (.08)(b) (.02) (.03)(b) (.03) (.02)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .45 1.99 1.00 2.03 (.24) .88
Net increase (decrease) in net asset
value from operations .41 1.91 .98 2.00 (.27) .86
LESS: DISTRIBUTIONS
Distributions from net realized gains (2.17) (1.06) (1.07) (1.00) -0- (.76)
Net asset value, end of period $6.50 $8.26 $7.41 $7.50 $6.50 $6.77
TOTAL RETURN
Total investment return based on net
asset value (c) 6.86% 30.72% 15.48% 36.79% (3.99)% 13.95%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $30,980 $18,871 $13,899 $10,078 $6,230 $4,006
Ratio of expenses to average net assets 1.79%(d) 1.83% 1.86% 1.89% 1.87%(d) 1.94%(d)
Ratio of net investment loss to
average net assets (1.09)%(d) (1.10)% (.51)% (.51)% (.59)%(d) (.74)%(d)
Portfolio turnover rate 53% 158% 80% 81% 63% 66%
</TABLE>
See footnote summary on page 19.
18
THE ALLIANCE FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
------------------------------------
OCTOBER 2,
SIX MONTHS 1996(E)
ENDED YEAR ENDED TO
MAY 31, 1998 NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning
of period $8.69 $7.71 $6.99
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) -0-(b) (.02)(b) -0-
Net realized and unrealized gain
on investments and foreign currency
transactions .48 2.10 .72
Net increase in net asset
value from operations .48 2.08 .72
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.04) -0-
Distributions from net realized gains (2.17) (1.06) -0-
Total dividends and distributions (2.17) (1.10) -0-
Net asset value, end of period $7.00 $8.69 $7.71
TOTAL RETURN
Total investment return based on net
asset value (c) 7.47% 32.00% 10.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $13,947 $10,275 $1,083
Ratio of expenses to average net assets .79%(d) .83% .89%(d)
Ratio of net investment income (loss) to
average net assets (.09)%(d) (.21)% .38%(d)
Portfolio turnover rate 53% 158% 80%
</TABLE>
(a) The Fund changed its fiscal year end from December 31 to November 30.
(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 return calculated for a period of less than one year
is not annualized.
(d) Annualized.
(e) Commencement of distribution.
19
THE ALLIANCE 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
ALDEN M. STEWART, EXECUTIVE VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
RANDALL E. HAASE, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, 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.
The financial information included therein is taken from the records of
the Fund without audit by independent accountants who do not express an opinion
thereon.
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 Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
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
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder 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
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
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
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
Government Portfolio
General Municipal Portfolio
21
THE ALLIANCE FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHSAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MSARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
ALLSR
