ALLIANCE TECHNOLOGY FUND
SEMI-ANNUAL REPORT
MAY 31, 1995
Alliance
Mutual funds without the Mystery.
(cover)
LETTER TO SHAREHOLDERS ALLIANCE TECHNOLOGY FUND
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July 11, 1995
Dear Shareholder:
We are pleased to provide you with an update of Alliance Technology Fund's
performance and investment activity during its fiscal semi-annual reporting
period ended May 31, 1995. During the six-month period, the Fund provided
shareholders with superior relative performance; the following table compares
your Fund's total returns with that of the overall U.S. stock market,
represented by the unmanaged S&P 500-stock Index, and with the Pacific Stock
Exchange (PSE) High-Tech Index, also unmanaged, which is composed of technology
stocks traded on the PSE.
Six Months Ended May 31, 1995
Total Return Ending NAV
------------ ----------
ALLIANCE TECHNOLOGY FUND
Class A +27.21% $36.64
Class B +26.80% $36.05
Class C +26.80% $36.05
S&P 500 +19.17%
PSE HIGH-TECH INDEX +19.51%
The Fund's total returns are based on the net asset values of each class of
shares as of May 31; additional investment results appear on page 3.
ECONOMIC CONDITIONS
After enjoying strong growth last year, the economies of most major
industrialized countries are experiencing more moderate growth in 1995. The
U.S. Federal Reserve's focus on controlling inflation by tightening monetary
policy has slowed the growth rate of the domestic economy to modest levels. It
is our view that the U.S. economic expansion should moderate to an annual
growth rate of 2.0% in the second half of the year. Slower economic growth
would be positive for inflation and inflationary expectations. We believe that
inflationary pressures have crested and project that inflation, as measured by
the Consumer Price Index, will peak near 3.5% in 1995. In tacit acknowledgment
of the weakening U.S. economy, the Federal Reserve recently cut interest rates
0.25%.
Fortunately, technology companies are experiencing strong demand despite this
slowing growth. As we wrote in our last letter, the pressures of lower growth
reinforce the need for corporations around the world to reduce costs and
improve productivity by investing in and deploying technology products and
solutions. Meanwhile, the secular outlook for this sector remains bright as
continuously improving performance and ever lower costs have expanded the
markets for technology both globally and beyond the corporation to the consumer.
PORTFOLIO STRATEGY
Technology stocks have been very strong for more than a year.
Uncharacteristically, however, we have not seen any serious correction in the
sector since last June. In fact, history shows that this current period of
uninterrupted stock appreciation is greater than average in terms of both
duration and magnitude. As a result, it is to be questioned whether these
stocks have become fully priced, at least in the short term. It is entirely
possible, we believe, that in the short run investor profit taking will create
downward pressure on technology stock prices. However, technology stock
valuations and strong fundamentals support a positive long-term outlook for
this sector.
First, valuation measures offer an upbeat element to the technology picture.
Despite the big upswing in many technology stocks last year and in 1995,
profits have kept pace. As a result, the average price to earnings multiple of
Alliance Technology Fund is 20x expected 1995 earnings and 16x the expected
earnings in calendar 1996. This is about the average level seen during the
1990s. However, as discussed below, current growth rates are faster than at any
other time in recent memory.
Second, technology's business fundamentals are the most important and the most
encouraging piece of the story. We must go back to this industry's early years
when managements were inexperienced, balance sheets were strained and much of
the technology was primitive or untested, to see the kind of growth rates in
evidence today. Furthermore, as we mentioned earlier, this growth is occurring
in spite of the economic slowdown in some parts of the world. This is not a
short-lived recovery from depressed levels or something confined to the U.S.
but a worldwide trend which is gathering momentum. We have
1
ALLIANCE TECHNOLOGY FUND
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discussed some of the factors behind all this, including the increased share of
many U.S.-based companies, the shift from centralized to client/server-based
computing and the growing demand for technology solutions in many foreign
markets. One other factor may be as important as any, however: the growing
affordability of technology. Price and performance improvements have been
compounding so regularly and for so long that each new generation of products
and services now brings with it an enormous increase in power of function, more
so than at any other time.
In analyzing these considerations and while granting the possibility of a
correction in these stocks at some point, reasonable valuations and extremely
strong fundamentals convince us to stay the course. We are maintaining
positions in the companies we consider attractive and will opportunistically
add to them if their prices temporarily suffer from any market pullback.
TOP FUND HOLDINGS
Alliance Technology Fund is well positioned to exploit the dynamic secular and
cyclical growth characteristics of the technology sector over the long term.
Among your Fund's more significant exposures are such markets as database
software and networks, distributed computing, cellular telephony, and
semiconductor capital goods. The Fund's top holdings as of May 31, 1995,
reflect many of these themes. 3Com Corp. is a computer networking company
which, as a result of new management, a successful new product development
program and selected acquisitions, has become a significant player in this
dynamic market. Cisco Systems sells products which help companies build
corporate-wide data networks, another critical element in the accelerating
shift to distributed computing. Broadway and Seymour targets the financial
services industry with software products and systems integration services and
enjoys significant repeat business from its customer base. Intel may be the
world's preeminent semiconductor company while enjoying particular dominance in
the microprocessor industry. Altera designs semi-conductors which can be
customized by clients; this programmability can be done very quickly and
provides a significant competitive advantage as product design cycles continue
to shorten.
Thank you for your interest and investment in Alliance Technology Fund. We look
forward to reporting its progress to you in the coming months.
Sincerely,
John D. Carifa
Chairman and President
Peter Anastos
Senior Vice President
Gerald T. Malone
Vice President
2
INVESTMENT RESULTS ALLIANCE TECHNOLOGY FUND
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AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
--------------------------------
. One Year +52.89% +46.39%
. Five Years +22.22% +21.16%
. Ten Years +18.90 +18.38
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
--------------------------------
. One Year +51.82% +47.82%
. Since Inception* +36.65 +35.97
CLASS C SHARES
. One Year +51.76%
. Since Inception* +36.65
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 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);
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: 5/3/93, Class B and Class C.
3
TEN LARGEST HOLDINGS
MAY 31, 1995 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
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COMPANY VALUE PERCENT OF NET ASSETS
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Intel Corp. $15,153,750 4.2%
Micron Technology, Inc. 14,280,000 4.0
Oracle Systems Corp. 14,247,500 3.9
3Com Corp. 14,080,000 3.9
cisco Systems, Inc. 14,000,000 3.9
National Semiconductor Corp. 12,500,000 3.5
Altera Corp. 12,460,000 3.5
Applied Materials, Inc. 12,320,000 3.4
Informix Corp. 11,846,900 3.3
Broadway & Seymour, Inc. 11,797,500 3.3
$132,685,650 36.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
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SHARES*
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PURCHASES BOUGHT HOLDINGS 5/31/95
Chips & Technologies, Inc. 350,000 350,000
First Data Corp. 140,000 140,000
FTP Software, Inc. 154,200 154,200
General Instrument Corp. 130,000 180,000
Komag, Inc. 110,000 110,000
Lam Research Corp. 110,000 170,000
Micron Technology, Inc. 270,000 320,000
National Semiconductor Corp. 500,000 500,000
Oracle Systems Corp. 205,000 410,000
Read-Rite Corp. 185,000 185,000
SALES SOLD HOLDINGS 5/31/95
Alliance Semiconductor Corp. 26,200 58,800
Altera Corp. 40,000 160,000
Atmel Corp. 50,000 150,000
Broderbund Software, Inc. 90,000 -0-
Exabyte Corp. 125,000 - 0-
Microsoft Corp. 85,000 - 0-
Motorola, Inc. 74,000 - 0-
Sun Microsystems, Inc. 99,000 120,000
Sybase, Inc. 75,000 - 0-
Viacom, Inc. Cl.B 30,000 70,000
* Adjusted for stock splits.
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
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COMPANY SHARES VALUE
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COMMON STOCKS-88.3%
SOFTWARE-23.6%
Applix, Inc.* 110,000 $ 2,406,250
Broadway & Seymour, Inc.* 660,000 11,797,500
Computer Associates International, Inc. 70,000 4,585,000
Computer Sciences Corp.* 81,000 4,293,000
Expert Software, Inc.* 175,000 2,581,250
First Data Corp. 140,000 8,085,000
FTP Software, Inc.* 154,200 3,296,025
General Motors Corp. Cl.E 200,000 8,500,000
Informix Corp.* 280,400 11,846,900
Maxis, Inc.* 67,500 1,316,250
Novell, Inc.* 105,000 2,027,812
Oracle Systems Corp.* 410,000 14,247,500
Renaissance Solutions, Inc.* 145,800 1,786,050
Sierra On-Line, Inc.* 310,000 5,618,750
SPECTRUM HOLOBYTE, INC.* 190,000 2,660,000
85,047,287
SEMI-CONDUCTORS-23.1%
Advanced Micro Devices* 180,000 5,917,500
Alliance Semiconductor Corp.* 58,800 2,469,600
Altera Corp.* 160,000 12,460,000
Atmel Corp.* 150,000 6,600,000
Chips & Technologies, Inc.* 350,000 3,368,750
Cirrus Logic, Inc.* 90,000 4,432,500
Intel Corp. 135,000 15,153,750
Micron Technology, Inc. 320,000 14,280,000
National Semiconductor Corp.* 500,000 12,500,000
Nexgen, Inc.* 15,300 367,200
Oak Technology, Inc.* 57,300 1,647,375
Standard Microsystems, Inc.* 235,000 4,083,125
83,279,800
COMMUNICATIONS-18.7%
Cabletron Systems, Inc.* 160,000 $ 8,560,000
cisco Systems, Inc.* 320,000 14,000,000
EIS International, Inc.* 169,200 2,495,700
Ericsson (L.M.) Telephone Co. Cl.B (ADR) (a) 78,000 5,728,125
Gandalf Technologies, Inc.* 615,000 3,690,000
General Instrument Corp.* 180,000 5,557,500
Nokia Corp. (ADR) (b) 180,000 8,370,000
Scientific-Atlanta, Inc. 250,000 4,656,250
3Com Corp.* 220,000 14,080,000
67,137,575
COMPUTER SYSTEMS-8.8%
COMPAQ Computer Corp.* 290,000 11,346,250
Dell Computer Corp.* 125,000 6,296,875
Diamond Multimedia Systems, Inc.* 90,700 1,643,938
Radius, Inc.* 113,500 1,184,656
Silicon Graphics, Inc.* 125,000 4,859,375
Sun Microsystems, Inc.* 120,000 5,400,000
Videonics, Inc.* 73,000 1,049,375
31,780,469
SEMI-CONDUCTOR EQUIPMENT-6.1%
Applied Materials, Inc.* 160,000 12,320,000
LAM RESEARCH CORP.* 170,000 9,732,500
22,052,500
SPECIALIZED ELECTRONICS MANUFACTURING-3.8%
Sanmina Holdings Corp.* 100,000 3,600,000
Solectron Corp.* 333,000 10,031,625
13,631,625
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
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SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
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COMPUTER PERIPHERALS-3.3%
Komag, Inc.* 110,000 $ 4,262,500
Read-Rite Corp.* 185,000 4,174,063
Stormedia, Inc.* 79,700 1,613,925
Western Digital Corp.* 100,000 1,762,500
11,812,988
OTHER-0.9%
Viacom, Inc. Cl.B* 70,000 3,263,750
Total Common Stocks
(cost $197,344,572) 318,005,994
CORPORATE BOND-0.1%
Interactive Light Holdings, Inc.
8.00%, 2/07/99 (c)
(cost $500,000) $ 500 500,000
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
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COMMERCIAL PAPER-5.9%
Merrill Lynch & Co. FRN
6.05%, 6/07/95 $19,700 $ 19,680,136
Prudential Funding Corp.
5.90%, 6/01/95 1,400 1,400,000
Total Commercial Paper
(amortized cost $21,080,136) 21,080,136
TOTAL INVESTMENTS-94.3%
(cost $218,924,708) 339,586,130
Other assets less
liabilities-5.7% 20,467,306
NET ASSETS-100% $360,053,436
* Non-income producing security.
(a) Country of origin - Sweden.
(b) Country of origin - Finland.
(c) Illiquid security, valued at fair value (see Notes A & F).
Glossary of Terms:
ADR - American Depository Receipt
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
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ASSETS
Investments in securities, at value (cost $218,924,708) $339,586,130
Cash 11,282,404
Receivable for investment securities sold 14,001,822
Receivable for capital stock sold 6,656,649
Dividends and interest receivable 168,094
Other assets 15,185
Total assets 371,710,284
LIABILITIES
Payable for capital stock redeemed 6,861,847
Payable for investment securities purchased 3,670,120
Advisory fee payable 901,455
Distribution fee payable 116,286
Accrued expenses 107,140
Total liabilities 11,656,848
NET ASSETS $360,053,436
COMPOSITION OF NET ASSETS
Capital stock, at par $ 98,732
Additional paid-in capital 215,533,940
Distributions in excess of net investment income (1,171,778)
Accumulated net realized gain 24,931,120
Net unrealized appreciation of investments 120,661,422
$360,053,436
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($255,131,341/
6,962,670 shares of capital stock issued and outstanding) $36.64
Sales charge-4.25% of public offering price 1.63
Maximum offering price $38.27
CLASS B SHARES
Net asset value and offering price per share ($88,367,156/
2,451,052 shares of capital stock issued and outstanding) $36.05
CLASS C SHARES
Net asset value, redemption and offering price per share($16,554,939
/459,269 shares of capital stock issued and outstanding) $36.05
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
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INVESTMENT INCOME
Interest $1,089,577
Dividends (net of foreign taxes withheld of $24,380) 252,729 $1,342,306
EXPENSES
Advisory fee 1,598,543
Distribution fee - Class A 171,035
Distribution fee - Class B 229,656
Distribution fee - Class C 55,206
Transfer agency 162,866
Administrative 76,820
Audit and legal 60,685
Directors' fees 38,536
Registration 37,409
Custodian 34,176
Printing 20,000
Taxes 6,657
Miscellaneous 22,495
Total expenses 2,514,084
Net investment loss (1,171,778)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on securities transactions 22,354,646
Net change in unrealized appreciation of investments 48,858,598
Net gain on investments 71,213,244
NET INCREASE IN NET ASSETS FROM OPERATIONS $70,041,466
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE TECHNOLOGY FUND
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SIX MONTHS ENDED JAN.1,1994*
MAY 31, 1995 TO
(UNAUDITED) NOV.30,1994
------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $(1,171,778) $(2,212,419)
Net realized gain on investments 22,354,646 24,742,194
Net change in unrealized appreciation
of investments 48,858,598 18,337,186
Net increase in net assets from operations 70,041,466 40,866,961
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (20,080,339) -0-
Class B (1,920,276) -0-
Class C (617,474) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 83,834,261 11,456,294
Total increase 131,257,638 52,323,255
NET ASSETS
Beginning of period 228,795,798 176,472,543
End of period $360,053,436 $228,795,798
* The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
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NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Technology Fund, Inc. (the 'Fund') is registered under the Investment
Company Act of 1940 ('Act') as a diversified, open-end management investment
company. 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. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange and
over-the-counter securities listed on the NASDAQ National Market System are
valued at the last reported sales price at the regular close of the New York
Stock Exchange. Over-the-counter securities not listed on the NASDAQ National
Market System are valued at the mean of the closing bid and asked price.
Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their resale) are
valued at their fair value as determined in good faith by the Board of
Directors. Securities which mature in 60 days or less are valued at amortized
cost, which approximates market value.
2. OPTION WRITING
When the Fund writes an option, an amount equal to the premium received by the
Fund is recorded as a liability and is subsequently adjusted to the current
market value of the option written. Premiums received from writing options
which expire unexercised are treated by the Fund on the expiration date as
realized capital gains from the sale of securities. The difference between the
premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a gain, or if the premium
is less than the amount paid for the closing purchase transaction, as a loss.
If a call option is exercised, the premium is added to the proceeds from the
sale in determining whether the Fund has realized a gain or loss. As a writer
of options, the Fund bears the risk of unfavorable changes in the price of the
financial instruments underlying the options.
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 company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date the securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
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 changes in net assets and financial highlights
reflect the period from January 1 to November 30, 1994.
10
ALLIANCE TECHNOLOGY FUND
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NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays its Adviser,
Alliance Capital Management L.P., an advisory fee at a quarterly rate equal to
1/4 of 1% (approximately 1% on an annual basis) of the net assets of the Fund
valued on the last business day of the previous quarter. The Adviser has
agreed, under the terms of the investment advisory agreement, to reimburse the
Fund to the extent that its aggregate 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 2.5% of the first $30 million of its average daily net assets, 2.0% of
the next $70 million of its average daily net assets and 1.5% of its average
daily net assets in excess of $100 million. No reimbursement was required for
the six months ended May 31, 1995.
Pursuant to the advisory agreement, the Fund paid $76,820 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended May 31, 1995.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $113,285 for the six months ended May 31, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $110,722 from the sale of Class A shares and $67,356
in contingent deferred sales charges imposed upon redemption by shareholders of
Class B shares for the six months ended May 31, 1995.
Brokerage commissions paid for the six months ended May 31, 1995 on securities
transactions amounted to $121,188 none of which was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ('DLJ') nor to DLJ directly, an affiliate of the Adviser.
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 1% 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. 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 $2,577,588 and $275,530 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 Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Total purchases and sales of investment securities, (excluding short-term
investments and options) aggregated $123,452,706 and $57,785,330, respectively,
for the six months ended May 31, 1995. At May 31, 1995, the cost of securities
for federal income tax purposes was $219,082,101. Accordingly, gross unrealized
appreciation on investments was $122,539,083 and gross unrealized depreciation
on investments was $2,035,054 resulting in net unrealized appreciation of
$120,504,029.
11
NOTES TO FINANCIAL STATEMENTS (CONT.) ALLIANCE TECHNOLOGY FUND
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NOTE E: CAPITAL STOCK
There are 200,000,000 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 consist of 100,000,000 authorized shares, Class B and Class C
each consist of 50,000,000 authorized shares. Transactions in capital stock
were as follows:
SHARES AMOUNT
----------------------------- ----------------------------
SIX MONTHS ENDED JAN.1,1994 SIX MONTHS ENDED JAN.1,1994
MAY 31, 1995 TO MAY 31, 1995 TO
(UNAUDITED) NOV.30,1994* (UNAUDITED) NOV.30,1994*
------------ ------------ ------------- --------------
CLASS A
Shares sold 2,293,342 3,842,268 $73,980,945 $106,665,695
Shares issued in
reinvestment
of distributions 650,071 -0- 18,676,424 -0-
Shares redeemed (2,327,203) (4,147,118) (76,185,511) (115,921,055)
Net increase (decrease) 616,210 (304,850) $16,471,858 $(9,255,360)
CLASS B
Shares sold 2,188,782 749,801 $70,977,227 $21,356,069
Shares issued in
reinvestment
of distributions 50,220 -0- 1,423,380 -0-
Shares redeemed (369,908) (231,166) (12,123,466) (6,446,377)
Net increase 1,869,094 518,635 $60,277,141 $14,909,692
CLASS C
Shares sold 453,092 514,554 $14,415,868 $14,650,671
Shares issued in
reinvestment
of distributions 12,351 -0- 350,271 -0-
Shares redeemed (242,495) (320,413) (7,680,877) (8,848,709)
Net increase 222,948 194,141 $7,085,262 $5,801,962
NOTE F: ILLIQUID SECURITY
DATE ACQUIRED COST
------------- --------
Interactive Light Holding, Inc.
8.00%, 2/07/99 1/27/94 $500,000
The security shown above is illiquid and has been valued at fair value in
accordance with the procedures described in Note A. The value of this security
at May 31, 1995 was $500,000, representing 0.1% of net assets.
* The Fund changed its fiscal year end from December 31 to November 30.
12
FINANCIAL HIGHLIGHTS ALLIANCE TECHNOLOGY FUND
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SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS JANUARY 1, 1994
ENDED TO YEAR ENDED
MAY 31, 1995 NOVEMBER 30, --------------------------------------- DECEMBER 31,
(UNAUDITED) 1994* 1993 1992 1991 1990
-------------- ------------ ----------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $31.98 $26.12 $28.20 $26.38 $19.44 $21.57
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.11) (.32) (.29) (.22)(a) (.02) (.03)
Net realized and unrealized gain (loss)
on investments 7.94 6.18 6.39 4.31 10.57 (.56)
Net increase (decrease) in net asset value
from operations 7.83 5.86 6.10 4.09 10.55 (.59)
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.17) -0- (8.18) (2.27) (3.61) (1.54)
Net asset value, end of period $36.64 $31.98 $26.12 $28.20 $26.38 $19.44
TOTAL RETURN
Total investment return based on net
asset value (b) 27.21% 22.43% 21.63% 15.50% 54.24% (3.08)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $255,131 $202,929 $173,732 $173,566 $191,693 $131,843
Ratio of expenses to average net assets 1.59%(d) 1.66%(d) 1.73% 1.61% 1.71% 1.77%
Ratio of net investment loss to average
net assets (.65)%(d) (1.22)%(d) (1.32)% (.90)% (.20)% (.18)%
Portfolio turnover rate 23% 55% 64% 73% 134% 147%
</TABLE>
See footnote summary on page 15.
13
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
--------------------------------------
SIX MONTHS JANUARY 1, MAY 3,
ENDED 1994 TO 1993(C) TO
MAY 31,1995 NOV. 30, DEC. 31,
(UNAUDITED) 1994* 1993
------------ ---------- -----------
Net asset value, beginning of period $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.14) (.23) (.12)
Net realized and unrealized gain
on investments 7.75 5.86 6.84
Net increase in net asset value
from operations 7.61 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.17) -0- (8.18)
Net asset value, end of period $36.05 $31.61 $25.98
TOTAL RETURN
Total investment return based on net
asset value (b) 26.80% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $88,367 $18,397 $1,645
Ratio of expenses to average net assets 2.47%(d) 2.43%(d) 2.57%(d)
Ratio of net investment loss to average
net assets (1.51)%(d) (1.95)%(d) (2.30)%(d)
Portfolio turnover rate 23% 55% 64%
See footnote summary on page 15.
14
ALLIANCE TECHNOLOGY FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
--------------------------------------
SIX MONTHS JANUARY 1, MAY 3,
ENDED 1994 TO 1993(C) TO
MAY 31, 1995 NOV. 30, DEC. 31,
(UNAUDITED) 1994* 1993
------------- ---------- -----------
Net asset value, beginning of period $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.18) (.24) (.13)
Net realized and unrealized gain
on investments 7.79 5.87 6.85
Net increase in net asset value
from operations 7.61 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.17) -0- (8.18)
Net asset value, end of period $36.05 $31.61 $25.98
TOTAL RETURN
Total investment return based on net
asset value (b) 26.80% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $16,555 $7,470 $1,096
Ratio of expenses to average net assets 2.45%(d) 2.41%(d) 2.52%(d)
Ratio of net investment loss to average
net assets (1.49)%(d) (1.94)%(d) (2.25)%(d)
Portfolio turnover rate 23% 55% 64%
* The Fund changed its fiscal year end from December 31 to November 30.
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Commencement of distribution.
(d) Annualized.
15
ALLIANCE TECHNOLOGY FUN
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
ROBERT C. ALEXANDER (1)
DAVID H. DIEVLER (1)
DR. CHARLES H. FERGUSON (1)
WILLIAM H. FOULK, JR. (1)
D. JAMES GUZY (1)
RICHARD HERMON-TAYLOR (1)
ELLIOT STEIN, JR. (1)
MARSHALL C. TURNER, JR. (1)
OFFICERS
PETER ANASTOS, SENIOR VICE PRESIDENT
GERALD T. MALONE, 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
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
(16)
ALLIANCE TECHNOLOGY FUND
- -------------------------------------------------------------------------------
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital
Mutual funds without the Mystery.
THIS REPORT IS DISTRIBUTED SOLELY TO SHAREHOLDERS OF THE FUND
AND IS NOT TO BE USED AS SALES LITERATURE.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
TECSR
BULK RATE
U.S. POSTAGE
PAID
New York, NY
Permit No. 7131
20
