<PAGE>
LETTER TO SHAREHOLDERS ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
January 5, 1995
Dear Shareholder:
We are pleased to report that for the twelve months ended November 30, 1994,
Alliance Technology Fund achieved total returns of +26.76% (Class A), +25.91%
(Class B) and +25.87% (Class C), based on the net asset value. These results
compare favorably with the more modest 1.07% increase in the S&P 500 (an
unmanaged index of 500 U.S. stocks) and a 21.8% increase in the unmanaged PSE
(Pacific Stock Exchange) High Tech Index over the same period. Additional
investment results for your Fund appear on page 3.
ECONOMIC CONDITIONS
Worldwide economies have generally remained strong throughout 1994. The U.S.
has experienced robust growth driven by improved consumer spending, strong
exports and continued business investment in productivity enhancing
technology products. The economies of Japan and Europe continue to improve
while many of the developing nations of Latin America and Asia are
experiencing strong growth. Looking forward, relative economic strength
should shift toward international economies - U.S. growth may be tempered by
tightening monetary policy aimed at controlling inflation while international
growth accelerates. Technology companies should benefit in this environment.
While overall business investment in the U.S. may slow in the coming year,
the need for technology products that reduce costs and enhance productivity
should increase. Meanwhile, the combination of cyclical recoveries in Europe
and Japan and continued strong growth in developing nations make the
international environment for spending on technology products look even
stronger as these economies focus on building a technology and communications
infrastructure.
PORTFOLIO STRATEGY
We have commented often to shareholders about the healthy tone of business at
most of the technology companies we monitor. In fact, this strength in
business conditions appears as widespread now as it was in 1993, which was a
very good year. Experience has taught us, however, that an encouraging
environment should raise some questions for the investor. For example, does
this strength in orders result from a worldwide economic boom that is
peaking? Has this momentum created shortages which have allowed technology
companies to temporarily benefit from rising prices? Do rising shipment
levels mean that demand will soon be satisfied and that 1995 growth rates are
likely to decline? And finally, have these beneficial circumstances created
unrealistic expectations that can only lead to disappointment?
We offer some brief responses to these questions. As mentioned earlier,
worldwide economies do not appear to have peaked. Growth in the U.S. economy
remains solid while conditions elsewhere appear to be strengthening.
Furthermore, the strength in the technology sector of these economies has
been balanced; with the exception of semiconductor memory products, we have
not seen any shortages or the temporary price increases which accompany them.
With respect to a possible saturation of near-term demand, such shortages
are unlikely; rapid declines in the prices of most technology products and
the increasing dependence on them by businesses, governments and consumers
around the world makes the idea of saturation also unlikely. The last
question, about high expectations, is the most difficult. Technology stocks
performed well during most of 1994 because companies delivered strong
results. Has a strong 1995 now been discounted? We cannot be definitive
about this but we are encouraged by two things: first, considerable
skepticism in the investment community about how long-lasting this strength
in technology demand will be, and second, valuation levels which continue to
be reasonable by most historical measures.
TOP FUND HOLDINGS
Alliance Technology Fund remains positioned to take advantage of the
particularly dynamic secular as well as cyclical growth characteristics of
the technology sector. Among your Fund's more significant exposures are such
markets as database software and networks, distributed computing, cellular
telephony, and semiconductor capital goods. The top-five holdings as of
November 30, 1994, reflect many of these themes. Cisco Systems sells
products that help companies build corporate-wide data networks, a
1
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
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. 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. Oracle Systems is the leading supplier of database software
technology, a key building block for migrating applications to client/server
architectures. Compaq Computer is the world's leading manufacturer of
personal computer and PC systems.
We appreciate your investment in Alliance Technology Fund and look forward to
reporting your Fund's progress to you in the coming months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Peter Anastos
Peter Anastos
Senior Vice President
/s/ Gerald T. Malone
Gerald T. Malone
Vice President
2
<PAGE>
INVESTMENT RESULTS ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF NOVEMBER 30, 1994
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------------------------
* One Year +26.76% +21.37%
* Five Years +20.89 +19.85
* Ten Years +17.06 +16.56
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------------------------
* One Year +25.91% +22.08%
* Since Inception* +29.84 +28.22
CLASS C SHARES
* One Year +25.87%
* Since Inception* +29.84%
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: 5/3/93, Class B and Class C.
3
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND
GROWTH OF A $10,000 INVESTMENT:
11/30/84 TO 11/30/94
[GRAPH APPEARS HERE]
Mountain Chart depicting growth of a $10,000 investment 11/30/84 - 11/30/94
<TABLE>
<CAPTION>
Measurement period
(Fiscal Year Covered) Technology S&P 500 PSE High-Tech
- --------------------- ---------- ------- -------------
<S> <C> <C> <C>
Measurement PT -
11/30/84 $10,000 $10,000 $10,000
FYE 12/31/84 $10,010 $10,340 $10,000
FYE 12/31/85 $12,630 $13,610 $10,100
FYE 12/31/86 $14,150 $16,150 $11,163
FYE 12/31/87 $16,870 $16,980 $11,486
FYE 12/31/88 $16,980 $19,780 $12,405
FYE 12/31/89 $17,990 $26,040 $11,661
FYE 12/31/90 $17,440 $25,220 $12,477
FYE 12/31/91 $26,900 $32,880 $12,477
FYE 12/31/92 $31,070 $35,380 $18,341
FYE 12/31/93 $37,800 $38,930 $19,350
FYE 11/30/94 $46,280 $38,700 $23,046
</TABLE>
This chart illustrates the total value of an assumed investment in
Alliance Technology 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. Past performance is not
indicative of future results, and is not 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 PSE High-Tech Index is an unmanaged index comprised of technology
stocks traded on the Pacific Stock Exchange.
When comparing Alliance Technology 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 index.
4
<PAGE>
TEN LARGEST HOLDINGS
NOVEMBER 30, 1994 ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY VALUE PERCENT OF NET ASSETS
<S> <C> <C>
cisco Systems, Inc. $ 9,997,500 4.4%
Broadway & Seymour, Inc. 9,945,000 4.3
3Com Corp. 8,700,000 3.8
Oracle Systems Corp. 8,456,250 3.7
COMPAQ Computer Corp. 8,216,250 3.6
Solectron Corp. 8,083,250 3.5
Altera Corp. 7,700,000 3.4
Applied Materials, Inc. 7,660,000 3.4
General Motors Corp. Cl.E 7,350,000 3.2
Sun Microsystems, Inc. 7,336,500 3.2
$83,444,750 36.5%
</TABLE>
MAJOR PORTFOLIO CHANGES
FIVE MONTHS ENDED NOVEMBER 30, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES (A)
PURCHASES BOUGHT HOLDINGS 11/30/94
<S> <C> <C>
Ericsson (L.M.) Telephone Co. Cl.B (ADR) 78,000 78,000
Exabyte Corp. 125,000 125,000
General Instrument Corp. 25,000 50,000
Informix Corp. 200,000 200,000
Micron Technology, Inc. 50,000 50,000
Motorola, Inc. 74,000 74,000
Nokia Corp. (ADR) 90,000 90,000
Novell, Inc. 105,000 105,000
Sybase, Inc. 75,000 75,000
Viacom, Inc. Cl.B 100,000 100,000
<CAPTION>
SALES SOLD HOLDINGS 11/30/94
<S> <C> <C>
Advanced Micro Devices 70,000 120,000
Alliance Semiconductor Corp. 115,000 85,000
Atmel Corp. 105,800 200,000
BMC Software, Inc. 95,000 -0-
Cyrix Corp. 145,000 -0-
HBO & Co. 222,500 -0-
Intuit, Inc. 41,000 -0-
Microsoft Corp. 109,800 85,000
S3, Inc. 130,900 -0-
Time Warner, Inc. 112,000 -0-
</TABLE>
- --------------------------------------------------------------------------------
* The Fund changed its fiscal year end from December 31 to November 30.
(a) Adjusted for stock splits.
5
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1994 ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
<TABLE>
COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS-85.4%
SOFTWARE-26.0%
Broadway & Seymour, Inc.*(b)............ 510,000 $9,945,000
Broderbund Software, Inc.*.............. 90,000 3,217,500
Computer Associates
International, Inc.................... 70,000 3,185,000
Computer Sciences Corp.*................ 81,000 3,736,125
General Computer Corp., Inc.*........... 41,600 260,000
General Motors Corp.
Cl. E................................. 200,000 7,350,000
Informix Corp.*......................... 200,000 5,750,000
Microsoft Corp.*........................ 85,000 5,344,375
Novell, Inc.*........................... 105,000 2,086,875
Oracle Systems Corp.*................... 205,000 8,456,250
Sierra On-Line, Inc.*................... 175,000 5,009,375
Spectrum Holobyte ...................... 123,200 1,632,400
Sybase, Inc.*........................... 75,000 3,637,500
-----------
59,610,400
-----------
COMPUTER
NETWORKING-20.5%
Bolt Beranek & Newman, Inc.*............ 60,440 1,201,245
Cabletron Systems, Inc.*................ 105,000 4,987,500
cisco Systems, Inc.*.................... 310,000 9,997,500
EIS International, Inc.*................ 80,000 1,070,000
Ericsson (L.M.) Telephone
Co. Cl.B (ADR)........................ 78,000 4,329,000
General Instrument Corp.*............... 50,000 1,500,000
Inter-Tel, Inc.*........................ 77,800 544,600
Motorola, Inc........................... 74,000 4,171,750
Nokia Corp. (ADR)....................... 90,000 6,288,750
Scientific-Atlanta, Inc................. 213,200 4,210,700
3Com Corp.*............................. 200,000 8,700,000
-----------
47,001,045
-----------
SEMI-CONDUCTOR-17.2%
Advanced Micro Devices*................. 120,000 3,030,000
Alliance Semiconductor
Corp.*................................ 85,000 2,783,750
Altera Corp.*........................... 200,000 7,700,000
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Atmel Corp.*............................ 200,000 $6,800,000
Cirrus Logic, Inc.*..................... 90,000 2,272,500
Intel Corp.............................. 102,500 6,470,313
Lam Research Corp.*..................... 60,000 2,535,000
Micron Technology, Inc.................. 50,000 2,075,000
Standard Microsystems, Inc.*............ 235,000 5,610,625
-----------
39,277,188
-----------
COMPUTER SYSTEMS-10.8%
COMPAQ Computer Corp.*.................. 210,000 8,216,250
Dell Computer Corp.*.................... 100,000 4,306,250
Radius, Inc.*........................... 162,500 1,543,750
Silicon Graphics, Inc.*................. 110,000 3,382,500
Sun Microsystems, Inc.*................. 219,000 7,336,500
-----------
24,785,250
-----------
SPECIALIZED ELECTRONICS
MANUFACTURING-4.7%
Sanmina Holdings Corp.*................. 100,000 2,612,500
Solectron Corp.*........................ 298,000 8,083,250
-----------
10,695,750
-----------
SEMI-CONDUCTOR
EQUIPMENT-3.3%
Applied Materials, Inc.*................ 160,000 7,660,000
-----------
COMPUTER
PERIPHERALS-1.2%
Exabyte Corp.*.......................... 125,000 2,640,625
-----------
OTHER-1.7%
Viacom, Inc. Cl.B*...................... 100,000 3,850,000
-----------
Total Common Stocks
(cost $123,717,434)................... 195,520,258
-----------
CORPORATE BOND-0.2%
Interactive Light
Holdings, Inc.
8.00%, 2/07/99 (a)
(cost $500,000)....................... $500 500,000
-----------
</TABLE>
6
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER-11.4%
American Express
Credit Corp.
5.50%, 12/05/94.................... $10,770 $10,763,418
5.65%, 12/01/94.................... 5,245 5,245,000
Prudential Funding
5.45%, 12/08/94.................... 10,000 9,989,403
------------
Total Commercial Paper
(amortized cost $25,997,821) $ 25,997,821
------------
TOTAL INVESTMENTS-97.0%
(cost $150,215,255).................. 222,018,079
Other assets less liabilities-3.0% 6,777,719
------------
NET ASSETS-100%...................... $228,795,798
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) Illiquid security, valued at fair value (see notes A & F).
(b) Investment in non-controlled affiliates (see Note A(6)).
See notes to financial statements.
7
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1994 ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
<TABLE>
<S>
<C>
ASSETS
Investments in securities, at value (cost $150,215,255) ........................ $
222,018,079
Cash ...........................................................................
13,389
Receivable for investment securities sold ......................................
10,265,781
Receivable for capital stock sold ..............................................
1,360,740
Dividends and interest receivable ..............................................
64,866
Other assets ...................................................................
6,572
- --------------
Total assets ...................................................................
233,729,427
- --------------
LIABILITIES
Payable for capital stock redeemed .............................................
2,357,149
Payable for investment securities purchased ....................................
2,058,937
Advisory fee payable ...........................................................
381,959
Distribution fee payable .......................................................
19,082
Accrued expenses ...............................................................
116,502
- --------------
Total liabilities ..............................................................
4,933,629
- --------------
NET ASSETS .......................................................................... $
228,795,798
==============
COMPOSITION OF NET ASSETS
Capital stock, at par .......................................................... $
71,648
Additional paid-in capital .....................................................
131,726,763
Accumulated net realized gain ..................................................
25,194,563
Net unrealized appreciation of investments .....................................
71,802,824
- --------------
$
228,795,798
==============
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($202,928,995 / 6,346,460 shares of capital stock issued and
outstanding) .................................................................
$31.98
Sales charge-4.25% of public offering price ....................................
1.42
------
Maximum offering price .........................................................
$33.40
======
CLASS B SHARES
Net asset value and offering price per share
($18,396,429 / 581,958 shares of capital stock issued and outstanding) .......
$31.61
======
CLASS C SHARES
Net asset value, redemption and offering price per share
($7,470,374 / 236,321 shares of capital stock issued and outstanding) ........
$31.61
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
8
<PAGE>
STATEMENT OF OPERATIONS
ELEVEN MONTHS ENDED NOVEMBER 30, 1994* ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME
Interest .................................................... $576,992
Dividends (net of foreign taxes withheld of $591) ........... 195,370 $
772,362
----------
EXPENSES
Advisory fee ................................................ 1,794,378
Distribution fee-Class A .................................... 408,075
Distribution fee-Class B .................................... 69,839
Distribution fee-Class C .................................... 29,582
Transfer agency ............................................. 196,868
Administrative .............................................. 143,023
Audit and legal ............................................. 73,496
Registration ................................................ 69,721
Directors' fees ............................................. 65,105
Printing .................................................... 53,575
Custodian ................................................... 36,573
Taxes ....................................................... 13,704
Miscellaneous ............................................... 30,842
----------
Total expenses ..............................................
2,984,781
- -------------
Net investment loss .........................................
(2,212,419)
- -------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on securities transactions ................
24,742,194
Net change in unrealized appreciation of investments ........
18,337,186
- -------------
Net gain on investments .....................................
43,079,380
- -------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .................... $
40,866,961
=============
</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 loss ................................................... $ (2,212,419)
$ (2,289,465)
Net realized gain on investments ...................................... 24,742,194
45,709,608
Net change in unrealized appreciation (depreciation) of investments.... 18,337,186
(8,883,836)
-----------
-----------
Net increase in net assets from operations ............................ 40,866,961
34,536,307
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A ............................................................. -0-
(42,363,529)
Class B ............................................................. -0-
(401,368)
Class C ............................................................. -0-
(279,922)
CAPITAL STOCK TRANSACTIONS
Net increase .......................................................... 11,456,294
11,414,815
-----------
-----------
Total increase ........................................................ 52,323,255
2,906,303
NET ASSETS
Beginning of year ..................................................... 176,472,543
173,566,240
-----------
-----------
End of period ......................................................... $228,795,798
$176,472,543
===========
===========
</TABLE>
- --------------------------------------------------------------------------------
*The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1994 ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
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. Distribution of Class B and Class C shares commenced on May
3, 1993. 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. AFFILIATED ISSUERS
Issuers in which the fund held 5.0% of the outstanding voting securities are
defined as "affiliated" in the Act. As of November 30, 1994, the Fund owned
6.2% of the outstanding voting shares of Broadway & Seymour, Inc. which had
unrealized appreciation of $3,986,593. During the eleven months ended
November 30, 1994, the Fund purchased 160,500 shares of Broadway & Seymour,
Inc. at a cost of $1,692,363.
7. CHANGE OF YEAR END
The Fund changed its fiscal year end from December 31, to November 30.
Accordingly, the statement of operations and changes in net assets, and
financial highlights reflect the period from January 1 to November 30, 1994.
10
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
8. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
Effective November 1, 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.
In accordance with Federal Income Tax Regulations certain short-term realized
gains were offset against the Fund's accumulated net investment loss for the
period ended November 30, 1994. Accordingly, $2,212,419 was reclassified
from accumulated net investment loss to accumulated net realized gains. Net
increase in net assets from operations and net assets were not affected by
this change.
- --------------------------------------------------------------------------------
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 period ended November 30,
1994.
Pursuant to the advisory agreement, the Fund paid $143,023 to the Adviser
representing the cost of certain legal and accounting services provided to
the Fund by the Adviser for the period ended November 30, 1994.
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 $138,081 for the period ended November 30, 1994.
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 $20,381 from the sale of Class A shares and
$27,593 in contingent deferred sales charges imposed upon redemption 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 $96,154 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 $698,886 and $221,888 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
NOTE D: INVESTMENT TRANSACTIONS
Total purchases and sales of investment securities, (excluding short-term
investments and options) aggregated $97,629,363 and $110,280,490, respectively,
for the period ended November 30, 1994. At November 30, 1994, the cost of
securities for federal income tax purposes was the same as the cost for
financial reporting purposes. Accordingly, gross unrealized appreciation on
investments was $73,745,711 and gross unrealized depreciation on investments was
$1,942,887 resulting in net unrealized appreciation of $71,802,824.
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
SHARES
AMOUNT
JANUARY 1, 1994 YEAR ENDED JANUARY
1, 1994 YEAR ENDED
TO DECEMBER 31,
TO DECEMBER 31,
NOVEMBER 30, 1994* 1993 NOVEMBER
30, 1994* 1993
------------------ ------------
- ------------------ -------------
<S> <C> <C> <C>
<C>
CLASS A
Shares sold....................... 3,842,268 3,519,278 $
106,665,695 $ 108,549,106
Shares issued in reinvestment
of distributions................ -0- 1,489,907
- -0- 38,916,363
Shares redeemed................... (4,147,118) (4,512,673)
(115,921,055) (139,323,306)
---------- ----------
- ------------- -------------
Net increase (decrease)........... (304,850) 496,512 $
(9,255,360) $ 8,142,163
========== ==========
============= =============
</TABLE>
<TABLE>
<CAPTION>
------------------ -----------------
- ------------------ -----------------
JANUARY 1, 1994 MAY 3, 1993** JANUARY
1, 1994 MAY 3, 1993**
TO TO TO
TO
NOVEMBER 30, 1994* DECEMBER 31, 1993 NOVEMBER
30, 1994* DECEMBER 31, 1993
------------------ -----------------
- ------------------ -----------------
<S> <C> <C> <C>
<C>
CLASS B
Shares sold....................... 749,801 57,841
$21,356,069 $1,884,262
Shares issued in reinvestment
of distributions................ -0- 14,256
- -0- 370,370
Shares redeemed................... (231,166) (8,774)
(6,446,377) (282,226)
---------- ----------
- ------------- -------------
Net increase...................... 518,635 63,323
$14,909,692 $1,972,406
========== ==========
============= =============
CLASS C
Shares sold....................... 514,554 39,078
$14,650,671 $1,253,594
Shares issued in reinvestment
of distributions................ -0- 7,960
- -0- 206,807
Shares redeemed................... (320,413) (4,858)
(8,848,709) (160,155)
---------- ----------
- ------------- -------------
Net increase...................... 194,141 42,180 $
5,801,962 $1,300,246
========== ==========
============= =============
</TABLE>
- --------------------------------------------------------------------------------
* The Fund changed its fiscal year end from December 31 to November 30.
** Commencement of distribution.
12
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
NOTE F: ILLIQUID SECURITY
<TABLE>
<CAPTION>
DATE
ACQUIRED
COST
--------
- --------
<S> <C>
<C>
Interactive Light Holding, Inc.
8.00%, 2/07/99.................................................. 1/27/94
$500,000
</TABLE>
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 November 30, 1994 was $500,000, representing 0.2% of net assets.
13
<PAGE>
FINANCIAL HIGHLIGHTS ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
JANUARY 1, 1994 YEAR
ENDED DECEMBER 31,
TO
- ---------------------------------------
NOVEMBER 30, 1994* 1993
1992 1991 1990
----------------- ------
- ------ ------ ------
<S> <C> <C>
<C> <C> <C>
Net asset value, beginning of period....................... $26.12 $28.20
$26.38 $19.44 $21.57
------ ------
- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment loss........................................ (.32) (.29)
(.22)(a) (.02) (.03)
Net realized and unrealized gain (loss) on investments..... 6.18 6.39
4.31 10.57 (.56)
------ ------
- ------ ------ ------
Net increase (decrease) in net asset value
from operations.......................................... 5.86 6.10
4.09 10.55 (.59)
------ ------
- ------ ------ ------
LESS: DISTRIBUTIONS
- -------------------
Distributions from net realized gains...................... -0- (8.18)
(2.27) (3.61) (1.54)
------ ------
- ------ ------ ------
Net asset value, end of period............................. $31.98 $26.12
$28.20 $26.38 $19.44
====== ======
====== ====== ======
TOTAL RETURN
- ------------
Total investment return based on net asset value (b)....... 22.43% 21.63%
15.50% 54.24% (3.08)%
====== ======
====== ====== ======
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (000's omitted).................. $202,929 $173,732
$173,566 $191,693 $131,843
Ratio of expenses to average net assets.................... 1.66%(d) 1.73%
1.61% 1.71% 1.77%
Ratio of net investment loss to average net assets......... (1.22)%(d) (1.32)%
(.90)% (.20)% (.18)%
Portfolio turnover rate.................................... 55% 64%
73% 134% 147%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 15.
14
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
CLASS C
JANUARY 1, 1994 MAY 3, 1993(C) JANUARY
1, 1994 MAY 3, 1993(C)
TO TO TO
TO
NOVEMBER 30,1994* DECEMBER 31, 1993 NOVEMBER
30, 1994* DECEMBER 31,1993
---------------- -----------------
- ----------------- ----------------
<S> <C> <C> <C>
<C>
Net asset value, beginning of period.. $25.98 $27.44
$25.98 $27.44
------ ------
- ------ ------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment loss................... (.23) (.12)
(.24) (.13)
Net realized and unrealized gain on investments 5.86 6.84
5.87 6.85
------ ------
- ------ ------
Net increase in net asset value
from operations..................... 5.63 6.72
5.63 6.72
------ ------
- ------ ------
LESS: DISTRIBUTIONS
- -------------------
Distributions from net realized gains. -0- (8.18)
- -0- (8.18)
------ ------
- ------ ------
Net asset value, end of period........ $31.61 $25.98
$31.61 $25.98
====== ======
====== ======
TOTAL RETURN
- ------------
Total investment return based on net asset value (b) 21.67% 24.49%
21.67% 24.49%
====== ======
====== ======
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (000's omitted) $18,397 $1,645
$7,470 $1,096
Ratio of expenses to average net assets 2.43%(d) 2.57%(d)
2.41%(d) 2.52%(d)
Ratio of net investment loss to average net assets (1.95)%(d) (2.30)%(d)
(1.94)%(d) (2.25)%(d)
Portfolio turnover rate............... 55% 64%
55% 64%
</TABLE>
- --------------------------------------------------------------------------------
* 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
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
ALLIANCE TECHNOLOGY FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance Technology Fund, Inc., including the portfolio of investments, as of
November 30, 1994, and the related statement of operations for the eleven
months then ended, and the statement of changes in net assets and the
financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of securities
owned as of November 30, 1994, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Technology Fund, Inc. at November 30, 1994, the results of its
operations for the eleven months then ended, and the changes in its net
assets and the financial highlights for each of the indicated periods, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
January 9, 1995
16
<PAGE>
ALLIANCE TECHNOLOGY FUND
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
JOHN D. CARIFA, Chairman and President
ROBERT C. ALEXANDER (1)
DAVID H. DIEVLER
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
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
17
<PAGE>
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<PAGE>
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<PAGE>
Alliance
- ----------
Technology
- ----------
Fund
- ----------
Annual Report
November 30, 1994
ALLIANCE(R)
Mutual Funds without the Mystery/SM/
Bulk Rate
U.S. Postage
Paid
New York, NY
Permit No. 8048
Alliance Technology Fund
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO OF ALLIANCE CAPITAL APPEARS HERE]
Mutual funds without the Mystery/SM/
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.
TECAR
