ALLIANCE TECHNOLOGY FUND
ANNUAL REPORT
NOVEMBER 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
January 11, 1996
Dear Shareholder:
We are pleased to provide you with an update of Alliance Technology Fund's
performance and investment activity during its annual reporting period ended
November 30, 1995. During the period, the Fund provided shareholders with
superior relative investment performance; the following table compares your
Fund's total returns with that of the overall U.S. stock market, represented by
the S&P 500-stock Index, and with the Pacific Stock Exchange (PSE) High-Tech
Index (complete descriptions of these unmanaged benchmarks appear on page 4):
Twelve Months Ended November 30, 1995
Total Return Ending NAV
------------ ----------
ALLIANCE TECHNOLOGY FUND
Class A +61.63% $46.64
Class B +60.95% $45.76
Class C +60.98% $45.77
S&P 500 +36.95%
PSE HIGH-TECH INDEX +57.30
The Fund's total returns are based on the net asset values of each class of
shares as of November 30; additional investment results appear on page 3. Also
provided on page 4 is a chart that shows the performance of a hypothetical
$10,000 initial investment in Alliance Technology Fund Class A shares over a
10-year period through the end of November.
ECONOMIC CONDITIONS
From an economic perspective, worldwide economies continue to support a healthy
environment for spending on technology products and services. In the U.S.,
moderating economic growth accompanied by low inflation and declining interest
rates has motivated corporations to improve productivity and reduce costs to
remain competitive. Internationally, Europe has seen improving technology
spending despite currently sluggish economies as both the corporate and
consumer appetite for technology is increasing. In Japan, aggressive pricing by
local suppliers has accelerated the demand elasticity for technology products
in an otherwise slow economy. Elsewhere, the low penetration of technology and
ongoing industrialization are driving strong demand.
PORTFOLIO STRATEGY
From a stock market perspective and after an almost unprecedented fifteen-month
uptrend, technology stocks hit some choppy waters this fall. Essentially, the
strong fundamental and stock price performance of this sector pushed
expectations to unsustainably high levels. The anticipation of Microsoft's
Windows 95 pushed these stocks still higher. Since mid September the sector has
corrected by 19% from its peak although some technology stocks have declined by
as much as 50%. While always painful, these sharp corrections are not atypical
for technology stocks. As befits the strong secular fundamentals in this part
of the economy, however, these corrections have historically provided rewarding
buying opportunities.
As fundamentally oriented investors, we always question whether the superior
growth rate of the technology sector will continue. As we examine this issue
today, there is nothing to suggest that the pace of technological innovation is
slowing. If anything, the wheels of invention are turning faster than ever.
Evidence suggests that this environment of constant improvement will expand
existing markets while creating new ones. Current examples include the cellular
phenomenon, video conferencing, high-speed CD-ROM drives for personal
computers, sophisticated video games, two-way paging, direct broadcast TV,
digital cameras, credit card readers and the Internet. Another example is in
the relatively mundane automobile industry, where the value of electronics will
soon exceed the value of steel in the average car. We expect future growth
markets to include movies on demand, satellite navigation for autos, speech
recognition, electronic commerce, PC video and use of the Internet by the
mainstream population as well as the corporate community.
FORCES IN TECHNOLOGY
What we have described is a multitude of mass markets that will be created by
the interplay of three forces. The first, as we mentioned, is the continuous
and possibly accelerating rate of improvement in many technologies, from
semiconductors to software to communications. The second force is the
increasing computer literacy of the general population; specifically, young
people in the
1
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
work force who are eager to embrace rather than resist the changes brought
about by technology. And third is the vast potential of emerging markets around
the world. Many of these economies need-and can now afford-the technology
products and services that once were unaffordable.
These factors have all contributed to the emergence of many substantial,
franchise-type companies over a short period of time. To illustrate, each of
the following has been public less than a decade: 3Com, cisco Systems,
Microsoft, Dell, Oracle and Silicon Graphics. There are a number of companies
like these with substantial revenues, large customer bases and considerable
research budgets that seized opportunities and profited handsomely in very
quick fashion. We are convinced there will be many other such success stories
in the future.
Another benefit from all this opportunity comes in the form of added stability.
Technology markets in the past were dependent on narrow geographies, with fewer
products sold to far fewer customers. We believe that as the technology sector
becomes more diverse and impacts a larger number of end markets while expanding
internationally, the vicious profit cycles of the past should become more
moderate (though this is not necessarily the consensus view).
In any event, this does not mean that individual companies will not stumble. In
reality, as the universe of corporations pushing the limits of technology is
now in the thousands (versus hundreds in the 1980s or dozens in the 1970s), the
relative number of failures will doubtless increase. Managements that resist
change or fail to expand overseas or lose touch with their customers in this
rapidly changing environment will quickly lose ground. More than ever, this
profile of collective opportunity in new markets and the continuing risk of
individual failure supports the need for a diversified portfolio in the
technology sector as well as the professional management of today's many
investment choices.
Thank you for your continued interest and investment in Alliance Technology
Fund. We look forward to reporting its progress to you again in coming months.
Sincerely,
John D. Carifa
Chairman
Peter Anastos
Senior Vice President
Gerald T. Malone
Senior Vice President
2
INVESTMENT RESULTS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF NOVEMBER 30, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +61.93% +55.05%
. Five Years +35.37% +34.20%
. Ten Years +20.12% +19.60%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +60.95% +56.95%
. Since Inception* +40.06% +40.62%
CLASS C SHARES
. One Year +60.98%
. Since Inception* +41.08%
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
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
ALLIANCE TECHNOLOGY FUND
GROWTH OF A $10,000 INVESTMENT:
11/30/85 TO 11/30/95
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
S&P 500
TECHNOLOGY FUND
CLASS A: $59,876
PSE HIGH-TECH
INDEX
11/30/85
11/30/95
This chart illustrates the total value of an assumed $10,000 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 unmanaged Standard and Poor's 500-stock Index includes 500 U.S. stocks, and
is a common measure of the performance of the overall U.S. stock market.
The unmanaged PSE High-Tech Index is comprised of technology stocks traded on
the Pacific Stock Exchange.
When comparing Alliance Technology Fund to the indices 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 indices.
Technology Fund
S&P 500
PSE High-Tech Index
4
TEN LARGEST HOLDINGS
NOVEMBER 30, 1995 ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
cisco Systems, Inc. $ 30,285,000 4.2%
COMPAQ Computer Corp. 24,799,500 3.5
Oracle Systems Corp. 23,821,875 3.3
3Com Corp. 22,417,500 3.1
First Data Corp. 20,590,000 2.9
Applied Materials, Inc. 20,422,500 2.9
General Motors Corp. Cl.E 20,200,000 2.8
Informix Corp. 17,880,587 2.5
Dell Computer Corp. 17,700,000 2.5
Ericsson (L.M.) Telephone Co. Cl.B (ADR) 17,503,750 2.4
$215,620,712 30.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED NOVEMBER 30, 1995
_______________________________________________________________________________
SHARES*
---------------------------
PURCHASES BOUGHT HOLDINGS 11/30/95
- -----------------------------------------------------------------------------
COMPAQ Computer Corp. 211,000 501,000
Discreet Logic, Inc. 183,400 366,800
Ericsson (L.M.) Telephone Co. Cl.B (ADR) 425,000 737,000
First Data Corp. 150,000 290,000
General Motors Corp. Cl.E. 200,000 400,000
Glenayre Technologies, Inc. 290,000 290,000
HBO & Co. 146,700 146,700
Hewlett-Packard Co. 125,000 125,000
Nokia Corp. (ADR) 110,000 290,000
Seagate Technology 150,000 150,000
SALES SOLD HOLDINGS 11/30/95
- -------------------------------------------------------------------------------
Advanced Micro Devices 180,000 -0-
Alliance Semiconductor Corp. 88,200 -0-
Chips & Technologies, Inc. 350,000 -0-
Computer Associates International, Inc. 105,000 -0-
ELS International, Inc. 169,200 -0-
Expert Software, Inc. 175,000 -0-
FTP Software, Inc. 154,200 -0-
Micron Technology, Inc. 18,000 302,000
Novell, Inc. 105,000 -0-
Viacom, Inc. Cl.B. 70,000 -0-
* Adjusted for stock splits.
5
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1995 ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS-85.9%
COMMUNICATIONS-24.6%
Alantec Corp. 152,800 $ 6,226,600
Cabletron Systems, Inc.* 160,000 13,280,000
cisco Systems, Inc.* 360,000 30,285,000
DSC Communications Corp.* 11,000 435,875
Ericsson (L.M.) Telephone Co. Cl.B (ADR)(a) 737,000 17,503,750
Fore Systems 151,800 8,842,350
Gandalf Technologies, Inc.* 715,000 12,155,000
General Instrument Corp.* 130,000 3,331,250
Glenayre Technologies, Inc. 290,000 16,602,500
HBO & Co. 146,700 10,965,825
Newbridge Networks Corp. 161,000 6,862,625
Nokia Corp. (ADR)(b) 290,000 15,732,500
Scientific-Atlanta, Inc. 285,000 4,524,375
Standard Microsystems, Inc.* 368,000 7,590,000
Westell Technologies 19,700 256,100
3Com Corp.* 490,000 22,417,500
177,011,250
COMPUTER SOFTWARE & SERVICES-24.3%
Applix, Inc.* 110,000 4,496,250
Broadway & Seymour, Inc.* 852,600 15,986,250
Cerner Corp. 184,000 4,899,000
Computer Sciences Corp.* 101,000 7,347,750
Discreet Logic, Inc. 366,800 11,187,400
DST Systems, Inc. Delaware 293,000 8,460,375
First Data Corp. 290,000 20,590,000
General Motors Corp. Cl.E 400,000 20,200,000
Informix Corp.* 645,800 17,880,587
Maxis, Inc.* 125,000 5,125,000
Objective Systems Integrators 27,400 520,600
Oracle Systems Corp.* 525,000 23,821,875
Payment Services, Inc. 147,900 4,159,688
Pixar 17,400 709,050
Rational Software Corp. 299,400 5,276,925
Renaissance Solutions, Inc.* 145,800 2,478,600
Sierra On-Line, Inc.* 507,500 17,255,000
Spectrum Holobyte, Inc.* 295,000 2,544,375
Spyglass, Inc. 15,200 1,630,200
174,568,925
SEMI-CONDUCTORS-11.3%
Altera Corp.* 295,300 17,127,400
Atmel Corp.* 300,000 9,000,000
Cirrus Logic, Inc.* 180,000 5,220,000
Intel Corp. 270,000 16,436,250
warrants, expiring 3/16/98 * 25,000 778,125
Micron Technology, Inc. 302,000 16,534,500
National Semiconductor Corp.* 500,000 10,687,500
Oak Technology, Inc.* 114,000 5,358,000
81,141,775
COMPUTER SYSTEMS-9.9%
COMPAQ Computer Corp.* 501,000 24,799,500
Dell Computer Corp.* 400,000 17,700,000
Diamond Multimedia Systems, Inc.* 103,400 3,489,750
Hewlett-Packard Co. 125,000 10,359,375
Silicon Graphics, Inc.* 200,000 7,300,000
Sun Microsystems, Inc.* 90,000 7,571,250
71,219,875
SEMI-CONDUCTOR EQUIPMENT-5.3%
Applied Materials, Inc.* 420,000 20,422,500
Lam Research Corp.* 246,000 13,468,500
Silicon Valley Group, Inc. 158,000 4,305,500
38,196,500
SPECIALIZED ELECTRONICS MANUFACTURING-4.3%
Jabil Circuit, Inc. 114,500 2,375,875
Sanmina Holdings Corp.* 253,300 13,076,612
Solectron Corp.* 368,000 15,640,000
31,092,487
6
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
CONTRACTS(C) OR
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
COMPUTER PERIPHERALS-4.1%
Komag, Inc.* 77,000 $ 4,090,625
Nimbus Cd International, Inc. 200,000 1,725,000
Quantum Corp. 150,000 2,812,500
Read-Rite Corp.* 160,000 4,340,000
Seagate Technology* 150,000 7,912,500
Stormedia, Inc.* 209,700 8,335,575
29,216,200
BUSINESS SERVICES-2.1%
Gartner Group, Inc. New 200,000 8,700,000
Itron, Inc. 225,000 6,356,250
15,056,250
Total Common Stocks and Other Investments
(cost $407,874,414) 617,503,262
PUT OPTION PURCHASED-0.3%
Nasdaq 100 Index expiring March 1996 @ $540
(cost $4,904,052) 1,884 2,425,650
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ----------------------------------------------------------------------
CORPORATE BOND-0.1%
Interactive Light Holdings, Inc.
8.00%, 2/07/99(d)
(cost $500,000) $ 500 $ 500,000
COMMERCIAL PAPER-14.3%
American Express Co.
5.70%, 12/04/95 26,800 26,787,270
General Electric Credit Corp.
5.50%, 12/01/95 25,700 25,700,000
Merrill Lynch & Co., Inc.
5.79%, 12/07/95 25,100 25,075,779
Prudential Funding
5.73%, 12/06/95 25,000 24,980,104
Total Commercial Paper
(amortized cost $102,543,153) 102,543,153
TOTALINVESTMENTS-100.6%
(cost $515,821,619) 722,972,065
Other assets less liabilities-(0.6%) (4,438,259)
NETASSETS-100% $718,533,806
* Non-income producing security.
(a) Country of origin - Sweden.
(b) Country of origin - Finland.
(c) Each contract represents 100 shares.
(d) Illiquid security, valued at fair value (see Notes A & F).
Glossary:
ADR - American Depository Receipt
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995 ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $515,821,619) $722,972,065
Cash 40,776
Receivable for capital stock sold 7,787,848
Receivable for investment securities sold 4,975,279
Dividends and interest receivable 155,619
Total assets 735,931,587
LIABILITIES
Payable for investment securities purchased 14,177,149
Advisory fee payable 1,789,937
Payable for capital stock redeemed 806,979
Distribution fee payable 395,132
Accrued expenses and other liabilities 228,584
Total liabilities 17,397,781
NET ASSETS $718,533,806
COMPOSITION OF NET ASSETS
Capital stock, at par $ 155,381
Additional paid-in capital 471,463,236
Accumulated net realized gain on investments 39,764,743
Net unrealized appreciation of investments 207,150,446
$718,533,806
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($398,262,001/
8,539,100 shares of capital stock issued and outstanding) $46.64
Sales charge-4.25% of public offering price 2.07
Maximum offering price $48.71
CLASS B SHARES
Net asset value and offering price per share($277,110,609/
6,056,113 shares of capital stock issued and outstanding) $45.76
CLASS C SHARES
Net asset value, redemption and offering price per share($43,161,196
/943,066 shares of capital stock issued and outstanding) $45.77
See notes to financial statements.
8
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995 ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $3,792,724
Dividends(net of foreign taxes withheld of $24,380) 446,680 $ 4,239,404
EXPENSES
Advisory fee 4,894,844
Distribution fee - Class A 864,763
Distribution fee - Class B 1,190,729
Distribution fee - Class C 215,495
Transfer agency 654,677
Administrative 149,575
Audit and legal 136,510
Custodian 110,046
Directors' fees 86,300
Printing 69,129
Registration 62,154
Taxes 17,180
Miscellaneous 72,878
Total expenses 8,524,280
Net investment loss (4,284,876)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 44,181,728
Net change in unrealized appreciation of investments 135,347,622
Net gain on investments 179,529,350
NET INCREASE IN NET ASSETS FROM OPERATIONS $175,244,474
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
YEAR ENDED JAN. 1,1994
NOV. 30, TO
1995 NOV. 30,1994*
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (4,284,876) $ (2,212,419)
Net realized gain on investments and options
transactions 44,181,728 24,742,194
Net change in unrealized appreciation of
investments and options 135,347,622 18,337,186
Net increase in net assets from operations 175,244,474 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 337,111,623 11,456,294
Total increase 489,738,008 52,323,255
NET ASSETS
Beginning of period 228,795,798 176,472,543
End of period $718,533,806 $228,795,798
* The Fund changed its fiscal year from December 31 to November 30.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995 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. 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. 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.
3. 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.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
5. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
Since net investment losses may not be carried forward to offset future net
investment income for tax purposes, at November 30, 1995 the Fund reclassified
$4,284,876 from accumulated net investment loss to accumulated net realized
gain on investments. This reclass was the result of the Fund's ability to
offset net investment losses with short term capital gains for tax purposes.
This reclass had no effect on net investment loss, net realized gains and
losses and net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. ('the Adviser'), an advisory fee at 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 fees, 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 year ended November 30, 1995.
Pursuant to the advisory agreement, the Fund paid $149,575 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended November 30, 1995.
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
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 $446,934 for the year ended November 30, 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 $440,810 from the sale of Class A shares and
$367,410 in contingent deferred sales charges imposed upon redemption by
shareholders of Class B shares for the year ended November 30, 1995.
Brokerage commissions paid for the year ended November 30, 1995 on securities
transactions amounted to $330,748, 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 $9,244,048 and $398,864 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 $439,879,042 and $202,944,572,
respectively, for the year ended November 30, 1995. At November 30, 1995, the
cost of securities for federal income tax purposes was $515,901,419.
Accordingly, gross unrealized appreciation on investments was $221,044,889 and
gross unrealized depreciation on investments was $13,974,243 resulting in net
unrealized appreciation of $207,070,646.
For investment and hedging purposes, the Fund purchases put and call options
on stock and stock indices that are traded on U.S. securities exchanges and
over-the-counter markets. The risk associated with purchasing an option is that
the Fund pays a premium whether or not the option is exercised. Additionally,
the Fund bears the risk of loss of premium and change in market value should
the counterparty not perform under the contract. Put and call options purchased
are accounted for in the same manner as portfolio securities. The cost of
securities acquired through the exercise of call options is increased by
premiums paid. The proceeds from securities sold through the exercise of put
options are decreased by the premiums paid. For the year ended November 30,
1995, the Fund realized losses of $3,269,001 in options transactions.
12
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
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
------------------------ ----------------------------
YEAR ENDED JAN. 1,1994 YEAR ENDED JAN. 1,1994
NOV. 30, TO NOV. 30, TO
1995 NOV.30,1994* 1995 NOV. 30,1994*
----------- ----------- ------------ --------------
CLASS A
Shares sold 5,476,959 3,842,268 $217,962,229 $106,665,695
Shares issued in
reinvestment of
distributions 650,071 -0- 18,676,512 -0-
Shares redeemed (3,934,390) (4,147,118) (148,687,714) (115,921,055)
Net increase(decrease) 2,192,640 (304,850) $ 87,951,027 $ (9,255,360)
CLASS B
Shares sold 6,758,431 749,801 $273,611,720 $21,356,069
Shares issued in
reinvestment of
distributions 50,219 -0- 1,424,212 -0-
Shares redeemed (1,334,495) (231,166) (54,629,325) (6,446,377)
Net increase 5,474,155 518,635 $220,406,607 $ 14,909,692
CLASS C
Shares sold 1,323,714 514,554 $ 53,165,092 $ 14,650,671
Shares issued in
reinvestment of
distributions 12,351 -0- 350,273 -0-
Shares redeemed (629,320) (320,413) (24,761,376) (8,848,709)
Net increase 706,745 194,141 $ 28,753,989 $ 5,801,962
NOTE F: ILLIQUID SECURITY
DATE ACQUIRED COST
------------- --------
Interactive Light Holdings, 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 November 30, 1995 was $500,000, representing 0.1% of net assets.
* The Fund changed its fiscal year end from December 31 to November 30.
13
FINANCIAL HIGHLIGHTS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------
JAN. 1,1994
YEAR ENDED TO YEAR ENDED DECEMBER 31,
NOV. 30, NOV. 30, ---------------------------------------------------
1995 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 (.30)(a) (.32) (.29) (.22)(a) (.02) (.03)
Net realized and unrealized gain (loss)
on investments 18.13 6.18 6.39 4.31 10.57 (.56)
Net increase (decrease) in net asset
value from operations 17.83 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 $46.64 $31.98 $26.12 $28.20 $26.38 $19.44
TOTAL RETURN
Total investment return based on net
asset value (b) 61.93% 22.43% 21.63% 15.50% 54.24% (3.08)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $398,262 $202,929 $173,732 $173,566 $191,693 $131,843
Ratio of expenses to average net assets 1.75% 1.66%(c) 1.73% 1.61% 1.71% 1.77%
Ratio of net investment loss to average
net assets (.77)% (1.22)%(c) (1.32)% (.90)% (.20)% (.18)%
Portfolio turnover rate 55% 55% 64% 73% 134% 147%
</TABLE>
See footnote summary on page 16.
14
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
-----------------------------------------
JANUARY 1, MAY 3,
YEAR ENDED 1994 TO 1993(D) TO
NOV. 30, NOV. 30, DEC. 31,
1995 1994* 1993
------------ ------------- ------------
Net asset value, beginning of period $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.60)(a) (.23) (.12)
Net realized and unrealized gain
on investments 17.92 5.86 6.84
Net increase in net asset
value from operations 17.32 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.17) -0- (8.18)
Net asset value, end of period $45.76 $31.61 $25.98
TOTAL RETURN
Total investment return based on
net asset value (b) 60.95% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $277,111 $18,397 $1,645
Ratio of expenses to average net
assets 2.48% 2.43%(c) 2.57%(c)
Ratio of net investment loss to
average net assets (1.47)% (1.95)%(c) (2.30)%(c)
Portfolio turnover rate 55% 55% 64%
See footnote summary on page 16.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-----------------------------------------
JANUARY 1, MAY 3,
YEAR ENDED 1994 TO 1993(D) TO
NOV. 30, NOV. 30, DEC. 31,
1995 1994* 1993
------------ ------------- ------------
Net asset value, beginning of period $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.58)(a) (.24) (.13)
Net realized and unrealized gain
on investments 17.91 5.87 6.85
Net increase in net asset
value from operations 17.33 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.17) -0- (8.18)
Net asset value, end of period $45.77 $31.61 $25.98
TOTAL RETURN
Total investment return based on
net asset value (b) 60.98% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $43,161 $7,470 $1,096
Ratio of expenses to average net
assets 2.48% 2.41%(c) 2.52%(c)
Ratio of net investment loss to
average net assets (1.47)% (1.94)%(c) (2.25)%(c)
Portfolio turnover rate 55% 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) Annualized.
(d) Commencement of distribution.
16
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. (the 'Fund'), including the portfolio of
investments, as of November 30, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, 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, 1995 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, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated periods in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
January 11, 1996
17
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
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)
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.
18
ALLIANCE TECHNOLOGY FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
TECAR
