ALLIANCE TECHNOLOGY FUND
SEMI-ANNUAL REPORT
MAY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
July 17, 1997
Dear Shareholder:
We are pleased to provide an update of the Alliance Technology Fund's
performance and investment activity for the semi-annual reporting period ended
May 31, 1997. As is shown in the table below, the Fund underperformed its
benchmarks. A major reason was our investment commitment to networking stocks
and our unwillingness to sell these securities when short-term issues arose.
INVESTMENT RESULTS*
TOTAL RETURNS FOR THE PERIODS ENDED
MAY 31, 1997
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE TECHNOLOGY FUND
Class A Shares 0.99% 9.80%
Class B Shares 0.64 9.01
Class C Shares 0.64 9.01
PACIFIC STOCK EXCHANGE HIGH TECH INDEX 13.00 25.44
S&P 500 STOCK INDEX 13.18 29.44
* TOTAL RETURNS FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT EXPENSES.
According to the Soundview Technology Index, networking stocks declined 37% in
the first calendar quarter as sentiment turned against these stocks, in spite
of their positive long-term outlook. We have stayed the course, however, and
have been rewarded by a significant recovery in the weeks since May 31.
For the three months ended June 30, 1997, the Fund's Class A shares achieved a
total return of 18.74%, exceeding those of the Pacific Stock Exchange High
Technology Index and the S&P 500 Stock Index (15.9% and 17.5%, respectively.)
The Fund's positive relative performance has continued as of this writing as
the technology sector, driven by strong relative June earnings reports, has
outperformed the broader market averages in July.
Indeed, on a long-term basis, the Fund continues to outperform its benchmarks.
For the 5- and 10-year periods ended May 31, the average annual returns for the
Fund's Class A shares were 27.89% and 14.45%. This compares favorably with
returns for the Pacific Stock Exchange High Technology Index (26.66% and
13.52%) and the S&P 500 (18.37% and 14.70%) for the same time periods. We
remain optimistic about our opportunities as we focus on stock selection based
on company fundamentals and our consistent investment strategy.
INVESTMENT STRATEGY
The repeated pattern in investor sentiment about technology stocks, from
euphoria to despair and back to euphoria again, offers us two choices: try to
anticipate those swings by raising (and then spending) lots of cash or leave
that psychological roller coaster to others and focus instead on enduring
investment themes and the companies best positioned to exploit them.
We have opted for the latter approach for several reasons. First, anticipating
shifts in psychology is even more difficult than predicting changes in business
fundamentals. Second, sentiment changes can sometimes last a very short time
and can disorient the investor who pays them too much attention. Finally, we
remain convinced that the secular outlook for technology is as attractive as
any industry, and that our efforts are best spent finding the best companies
with an attractive long-term outlook.
PORTFOLIO OUTLOOK
Convergence may be an overused term in technology but we are returning to it
once more because it provides an excellent overview of today's favorable
technology fundamentals. It describes several positive developments: 1) the
emergence of Microsoft's NT operating system as a platform for most new
client/server applications; 2) growth in the power of the Pentium
microprocessor to a point where this architecture can now process many
power-hungry, enterprise-type tasks in combination with NT; 3) a significant
decline in the price of computer memory, or DRAM's 4) steady improvement in the
speed or bandwidth of most corporate networks; 5) a new breed of distributed
software applications which are improving the financial returns of many
technology savvy corporations; and 6) the spreading use of technology in most
worldwide markets because of improved ease of use, the greater affordability of
these products and the phenomenon of the Internet.
1
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
As information technology has become more powerful and more accessible, it is
changing the way companies manage their affairs. A recent survey of Fortune
1000 chief executive officers, for example, found that 83% now view information
technology expenditures as strategic, while the small remainder view this item
as a cost which needs to be controlled. (The Fortune 1000 are the 1,000 leading
companies in America as determined by Fortune magazine.)
The following list is a list of technologies and products which have arrived or
are imminent. It illustrates how the forces of change and improvement should
create an abundance of investment opportunities for your Fund for many years.
Some of these changes include: video conferencing, digital video discs,
high-definition television (HDTV), asynchronous transfer mode switching (ATM),
gigabit ethernet, 56k modems, cable modems, e-mail, electronic commerce,
groupware, digital cellular, fiber optics, virtual reality, voice and
handwriting recognition, the Internet and intranets, web appliances,
intelligent agents, smart phones, 256 MB DRAMs, global positioning systems,
visual computing, 400 MHZ microprocessors and digital cameras. It's an exciting
environment.
As always, we appreciate your involvement in these promising developments
through the Alliance Technology Fund and thank you for your continued support.
Sincerely,
John D. Carifa
Chairman
Peter Anastos
Senior Vice President
Gerald T. Malone
Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
Alliance Technology Fund is a diversified investment company that emphasizes
growth of capital and invests for capital appreciation, and only incidentally
for current income. The Fund may seek income by writing listed call options.
The Fund invests primarily in securities of companies expected to benefit from
technological advances and improvements. The Fund normally will have
substanially all of its assets invested in equity securities, but it also
invests in debt securities offering appreciation potential. The Fund may invest
in listed and unlisted U.S. and foreign securities and has the flexibility to
invest both in well-known, established companies and in new, unseasoned
companies. The Fund's policy is to invest in any company and industry and in
any type of security with potential for capital appreciation.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURNS AS OF MAY 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 9.80% 5.12%
. Five Years 27.89% 26.78%
. Ten Years 14.45% 13.96%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 9.01% 5.01%
. Since Inception* 28.92% 28.92%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 9.01% 8.01%
. Since Inception* 28.92% 28.92%
The average annual total returns reflect reinvestment 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);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total returns for Advisor Class shares will differ due to
different expenses associated with that class.
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.
* The inception date for Class B and C shares was 5/3/93.
3
TEN LARGEST HOLDINGS
MAY 31, 1997 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Dell Computer Corp. $ 96,435,000 5.6%
COMPAQ Computer Corp. 83,352,500 4.8
Cisco Systems, Inc. 82,485,625 4.8
Altera Corp. 63,706,000 3.7
Intel Corp. 60,600,000 3.5
Oracle Systems, Inc. 55,950,000 3.3
Applied Materials, Inc. 49,426,875 2.9
Tellabs, Inc. 43,416,000 2.5
Microsoft Corp. 42,482,400 2.5
Sanmina Holdings Corp. 42,329,138 2.5
$620,183,538 36.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
_______________________________________________________________________________
SHARES
---------------------------------------
PURCHASES BOUGHT HOLDINGS 5/31/97
- -------------------------------------------------------------------------------
Applied Materials, Inc. 356,100 757,500
Bay Networks, Inc. 1,495,800 1,495,800
CFM Technologies, Inc. 441,900 441,900
Cisco Systems, Inc. 291,500 1,217,500
Computer Sciences Corp. 214,500 372,000
Ingram Micro, Inc. Cl.A 705,400 853,000
Motorola, Inc. 400,000 400,000
Tellabs, Inc. 864,000 864,000
Texas Instruments, Inc. 274,700 274,700
VLSI Technology, Inc. 947,600 947,600
SALES SOLD HOLDINGS 5/31/97
- -------------------------------------------------------------------------------
3Com Corp. 501,500 348,500
CUC International, Inc. 419,908 -0-
DSP Communications, Inc. 337,900 -0-
Electronic Data Systems Corp. 673,600 -0-
General Instrument Corp. 400,000 -0-
Glenayre Technologies, Inc. 965,000 -0-
Informix Corp. 995,800 -0-
Micron Technology, Inc. 245,400 -0-
Seagate Technology, Inc. 253,200 578,000
Western Digital Corp. 304,400 -0-
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-83.8%
TECHNOLOGY-81.9%
COMMUNICATIONS EQUIPMENT-8.7%
Ericsson (L.M.) Telephone Co. Cl.B (ADR) (a) 880,000 $ 31,350,000
Motorola, Inc. 400,000 26,550,000
Nokia Corp. (ADR) (b) 358,000 23,628,000
PairGain Technologies, Inc. (c) 616,600 12,871,525
Scientific-Atlanta, Inc. 655,000 11,871,875
Tellabs, Inc. (c) 864,000 43,416,000
------------
149,687,400
COMPUTER HARDWARE-11.2%
COMPAQ Computer Corp. (c) 770,000 83,352,500
Dell Computer Corp. (c) 857,200 96,435,000
Sun Microsystems, Inc. (c) 390,000 12,577,500
------------
192,365,000
COMPUTER PERIPHERALS-1.6%
Seagate Technology, Inc. (c) 578,000 23,481,250
Stormedia, Inc. (c) 303,550 3,604,656
------------
27,085,906
COMPUTER SERVICES-6.7%
Computer Sciences Corp. (c) 372,000 28,783,500
DST Systems, Inc. (c) 418,000 12,853,500
First Data Corp. 810,000 32,400,000
Gartner Group Inc. (c) 756,600 22,035,975
PMT Services, Inc. (c) 443,700 7,099,200
Renaissance Solutions, Inc. (c) 322,000 11,914,000
------------
115,086,175
COMPUTER SOFTWARE-10.6%
HBO & Co. 461,300 29,580,862
I2 Technologies, Inc. (c) 139,400 5,959,350
IONA Technologies Plc (ADR) (c) 173,800 2,998,050
Microsoft Corp. (c) 342,600 42,482,400
Netscape Communications Corp. (c) 670,000 19,806,875
Object Design, Inc. (c) 435,000 3,208,125
Oracle Systems Corp. (c) 1,200,000 55,950,000
Pegasystems, Inc. (c) 237,500 6,739,063
Rational Software Corp. (c) 656,600 12,393,325
Spectrum Holobyte, Inc. (c) 400,000 2,550,000
------------
181,668,050
NETWORK SOFTWARE-15.3%
3Com Corp. (c) 348,500 16,902,250
Ascend Communications, Inc. (c) 511,300 28,504,975
Bay Networks, Inc. (c) 1,495,800 36,647,100
Cabletron Systems, Inc. (c) 643,400 28,309,600
Cascade Communications Corp. (c) 742,800 28,412,100
Cisco Systems, Inc. (c) 1,217,500 82,485,625
Fore Systems (c) 998,200 16,532,687
Newbridge Networks Corp. (c) 640,000 25,680,000
------------
263,474,337
SEMI-CONDUCTOR COMPONENTS-15.3%
Altera Corp. (c) 1,202,000 63,706,000
Atmel Corp. (c) 821,000 23,603,750
Intel Corp. 400,000 60,600,000
LSI Logic Corp. (c) 507,500 21,188,125
Microchip Technology, Inc. (c) 688,655 24,447,253
National Semiconductor Corp. (c) 752,200 21,155,625
Texas Instruments, Inc. 274,700 24,688,662
VLSI Technology, Inc. (c) 947,600 23,038,525
------------
262,427,940
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
SEMI-CONDUCTOR EQUIPMENT-6.9%
Applied Materials, Inc. (c) 757,500 $ 49,426,875
CFM Technologies, Inc. (c) 441,900 13,422,713
Lam Research Corp. (c) 258,000 9,384,750
Silicon Valley Group, Inc. (c) 814,750 19,503,078
Teradyne, Inc. (c) 678,000 27,798,000
---------------
119,535,416
MISCELLANEOUS-5.6%
Ingram Micro, Inc. Cl.A (c) 853,000 20,365,375
Sanmina Holdings Corp. (c) 730,600 42,329,138
Solectron Corp. (c) 549,700 34,356,250
---------------
97,050,763
------------
1,408,380,987
UTILITIES-1.2%
TELEPHONE UTILITY-1.2%
WorldCom, Inc. (c) 670,450 19,862,081
CONSUMER SERVICES-0.7%
MISCELLANEOUS-0.7%
Equifax, Inc. 400,000 12,500,000
Total Common Stocks (cost $962,711,271) 1,440,743,068
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
PRIVATE PLACEMENT-0.0%
Interactive Light Holdings,
Inc. 8.00%, 2/07/99 (d)
(cost $500,000) $ 500 $ 500,000
SHORT-TERM INVESTMENTS-17.8%
American Express Co.
5.45%, 6/02/97 22,300 22,296,624
5.52%, 6/02/97 41,600 41,593,621
Ford Motor Credit Corp.
5.48%, 6/04/97 50,000 49,977,167
General Electric Capital Corp.
5.40%, 6/03/97 44,475 44,461,658
Merrill Lynch & Co., Inc.
5.50%, 6/10/97 69,100 69,004,987
Prudential Funding
5.45%, 6/06/97 50,000 49,962,153
5.54%, 6/05/97 28,550 28,532,426
Total Short-Term Investments
(amortized cost $305,828,636) 305,828,636
TOTAL INVESTMENTS-101.6%
(cost $1,269,039,907) 1,747,071,704
Other assets less liabilities-(1.6%) (28,211,290)
NET ASSETS-100% $1,718,860,414
(a) Country of origin--Sweden.
(b) Country of origin--Finland.
(c) Non-income producing security.
(d) Illiquid security, valued at fair value (see Note A).
Glossary:
ADR - American depository receipt
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $1,269,039,907) $1,747,071,704
Cash 5,828
Receivable for investment securities sold 16,463,576
Receivable for capital stock sold 15,366,592
Dividends and interest receivable 198,270
Prepaid expenses 50,556
Total assets 1,779,156,526
LIABILITIES
Payable for investment securities purchased 53,927,457
Advisory fee payable 4,287,251
Payable for capital stock redeemed 1,345,229
Distribution fee payable 293,027
Accrued expenses and other liabilities 443,148
Total liabilities 60,296,112
NET ASSETS $1,718,860,414
COMPOSITION OF NET ASSETS
Capital stock, at par $ 341,764
Additional paid-in capital 1,283,932,206
Accumulated net investment loss (8,695,484)
Accumulated net realized loss on investments (34,749,869)
Net unrealized appreciation of investments 478,031,797
$1,718,860,414
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($631,966,677/
12,335,917 shares of capital stock issued and outstanding) $51.23
Sales charge--4.25% of public offering price 2.27
Maximum offering price $53.50
CLASS B SHARES
Net asset value and offering price per share ($864,199,528/
17,406,098 shares of capital stock issued and outstanding) $49.65
CLASS C SHARES
Net asset value and offering price per share ($145,145,731/
2,923,515 shares of capital stock issued and outstanding) $49.65
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($77,548,478/1,510,832 shares of capital stock issued and
outstanding) $51.33
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $5,359,798
Dividends(net of foreign taxes withheld of $79,639) 767,631 $ 6,127,429
EXPENSES
Advisory fee 7,815,364
Distribution fee - Class A 879,377
Distribution fee - Class B 3,591,048
Distribution fee - Class C 597,683
Transfer agency 1,325,110
Printing 150,165
Custodian 106,230
Registration 99,262
Administrative 67,500
Audit and legal 62,202
Taxes 55,530
Directors' fees 40,000
Miscellaneous 33,442
Total expenses 14,822,913
Net investment loss (8,695,484)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions (35,146,025)
Net change in unrealized appreciation of investments 75,969,611
Net gain on investments 40,823,586
NET INCREASE IN NET ASSETS FROM OPERATIONS $32,128,102
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (8,695,484) $ (12,439,324)
Net realized gain (loss) on investment
transactions (35,146,025) 9,777,700
Net change in unrealized appreciation of
investments 75,969,611 194,911,740
Net increase in net assets from operations 32,128,102 192,250,116
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (4,879,328) (20,562,397)
Class B (5,671,806) (14,814,489)
Class C (916,491) (2,297,287)
Advisor Class (4,489) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 333,368,635 491,726,042
Total increase 354,024,623 646,301,985
NET ASSETS
Beginning of year 1,364,835,791 718,533,806
End of period $1,718,860,414 $1,364,835,791
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Technology Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Fund offers Class A, Class B, Class C and Advisor Class shares. Class A
shares are sold with a front-end sales charge of up to 4.25% for purchases not
exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a contingent
deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares purchased on or after July 1, 1996 are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. Advisor Class shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered to investors participating in fee
based programs and to certain retirement plans accounts. All four classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The 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, unless this method does not represent
fair 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 INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date the securities are
purchased or sold. Investment 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.
For federal income tax purposes, the Fund's distributions of income and capital
gains are subject to recharacterization, which may include a tax return of
capital, at the end of the year to reflect the final investment results for
that year.
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 .25 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.
Pursuant to the advisory agreement, the Fund paid $67,500 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, 1997.
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 $1,001,624 for the six months ended May 31, 1997.
10
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
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 $195,833 from the sale of Class A shares and $3,823,
$836,755 and $35,789 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended May 31, 1997.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1997 amounted to $539,130 of which $9,645 was paid to Donaldson, Lufkin
& Jenrette Securities Corp. ("DLJ"), 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. There is no distribution fee on the Advisor Class
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
$27,353,803 and $1,304,888, 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.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, (excluding short-term investments
and U.S. government secutities) aggregated $491,508,095 and $349,627,180,
respectively, for the six months ended May 31, 1997. There were no purchases or
sales of U.S. government and government agency obligations for the six months
ended May 31, 1997.
At May 31, 1997, the cost of securities for federal income tax purposes was
1,273,072,102. Accordingly, gross unrealized appreciation of investments was
$515,079,839 and gross unrealized depreciation of investments was $41,080,237
resulting in net unrealized appreciation of $473,999,602.
OPTION TRANSACTIONS
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 six months ended May 31,
1997, the Fund did not engage in any options transactions.
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 250,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Class A shares consist of 100,000,000 authorized shares, Class B,
Class C and Advisor Class each consist of 50,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 5,032,835 6,739,722 $ 244,947,103 $ 295,599,004
Shares issued in
reinvestment of
distributions 78,495 444,491 3,942,438 18,184,138
Shares converted
from Class B 59,292 71,011 2,876,097 3,227,821
Shares redeemed (4,463,730) (4,165,299) (214,813,687) (185,541,160)
Net increase 706,892 3,089,925 $ 36,951,951 $ 131,469,803
CLASS B
Shares sold 5,426,061 9,295,231 $ 253,881,926 $ 397,304,488
Shares issued in
reinvestment of
distributions 90,200 288,200 4,404,454 11,551,039
Shares converted
to Class A (61,164) (72,846) (2,876,097) (3,227,821)
Shares redeemed (1,331,540) (2,284,157) (62,403,530) (98,298,021)
Net increase 4,123,557 7,226,428 $ 193,006,753 $ 307,329,685
CLASS C
Shares sold 1,538,186 2,488,614 $ 71,549,986 $ 106,395,529
Shares issued in
reinvestment of
distributions 11,824 34,075 577,364 1,366,065
Shares redeemed (806,759) (1,285,491) (37,783,678) (55,371,330)
Net increase 743,251 1,237,198 $ 34,343,672 $ 52,390,264
OCT. 2,1996(A) OCT. 2,1996(A)
TO TO
NOV. 30,1996 NOV. 30,1996
------------ --------------
ADVISOR CLASS
Shares sold 1,542,292 11,363 $ 71,009,525 $ 551,761
Shares issued in
reinvestment of
distributions 89 -0- 4,489 -0-
Shares redeemed (42,606) (306) (1,947,755) (15,471)
Net increase 1,499,775 11,057 $ 69,066,259 $ 536,290
(a) Commencement of distribution.
12
FINANCIAL HIGHLIGHTS ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------
SIX MONTHS JANUARY 1,
ENDED YEAR ENDED NOVEMBER 30, 1994 TO YEAR ENDED DECEMBER 31,
MAY 31, 1997 ------------------------- NOVEMBER 30, ------------------------
(UNAUDITED) 1996 1995 1994(A) 1993 1992
------------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $51.15 $46.64 $31.98 $26.12 $28.20 $26.38
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.20)(b) (.39)(b) (.30)(b) (.32) (.29) (.22)(b)
Net realized and unrealized gain on
investment transactions .70 7.28 18.13 6.18 6.39 4.31
Net increase in net asset value
from operations .50 6.89 17.83 5.86 6.10 4.09
LESS: DISTRIBUTIONS
Distributions from net realized gains (.42) (2.38) (3.17) -0- (8.18) (2.27)
Net asset value, end of period $51.23 $51.15 $46.64 $31.98 $26.12 $28.20
TOTAL RETURN
Total investment return based on net
asset value (c) .99% 16.05% 61.93% 22.43% 21.63% 15.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $631,967 $594,861 $398,262 $202,929 $173,732 $173,566
Ratio of expenses to average net assets 1.64%(d) 1.74% 1.75% 1.66%(d) 1.73% 1.61%
Ratio of net investment loss to average
net assets (.81)%(d) (.87)% (.77)% (1.22)%(d) (1.32)% (.90)%
Portfolio turnover rate 28% 30% 55% 55% 64% 73%
Average commission rate (e) $.0576 $.0612 -- -- -- --
</TABLE>
See footnote summary on page 16.
13
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
SIX MONTHS JANUARY 1, MAY 3,
ENDED YEAR ENDED NOVEMBER 30, 1994 TO 1993(F) TO
MAY 31, 1997 ------------------------- NOVEMBER 30, DECEMBER 31,
(UNAUDITED) 1996 1995 1994(A) 1993
------------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $49.76 $45.76 $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.35)(b) (.70)(b) (.60)(b) (.23) (.12)
Net realized and unrealized gain
on investment transactions .66 7.08 17.92 5.86 6.84
Net increase in net asset value
from operations .31 6.38 17.32 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (.42) (2.38) (3.17) -0- (8.18)
Net asset value, end of period $49.65 $49.76 $45.76 $31.61 $25.98
TOTAL RETURN
Total investment return based on
net asset value (c) .64% 15.20% 60.95% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $864,200 $660,921 $277,111 $18,397 $1,645
Ratio of expenses to average net assets 2.35%(d) 2.44% 2.48% 2.43%(d) 2.57%(d)
Ratio of net investment loss to average
net assets (1.50)%(d) (1.61)% (1.47)% (1.95)%(d) (2.30)%(d)
Portfolio turnover rate 28% 30% 55% 55% 64%
Average commission rate (e) $.0576 $.0612 -- -- --
</TABLE>
See footnote summary on page 16.
14
ALLIANCE TECHNOLOGY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------
SIX MONTHS JANUARY 1, MAY 3,
ENDED YEAR ENDED NOVEMBER 30, 1994 TO 1993(F) TO
MAY 31, 1997 ------------------------- NOVEMBER 30, DECEMBER 31,
(UNAUDITED) 1996 1995 1994(A) 1993
------------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $49.76 $45.77 $31.61 $25.98 $27.44
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.35)(b) (.70)(b) (.58)(b) (.24) (.13)
Net realized and unrealized gain on
investment transactions .66 7.07 17.91 5.87 6.85
Net increase in net asset value from
operations .31 6.37 17.33 5.63 6.72
LESS: DISTRIBUTIONS
Distributions from net realized gains (.42) (2.38) (3.17) -0- (8.18)
Net asset value, end of period $49.65 $49.76 $45.77 $31.61 $25.98
TOTAL RETURN
Total investment return based on net
asset value (c) .64% 15.17% 60.98% 21.67% 24.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $145,146 $108,488 $43,161 $7,470 $1,096
Ratio of expenses to average net assets 2.36%(d) 2.44% 2.48% 2.41%(d) 2.52%(d)
Ratio of net investment loss to average
net assets (1.50)%(d) (1.60)% (1.47)% (1.94)%(d) (2.25)%(d)
Portfolio turnover rate 28% 30% 55% 55% 64%
Average commission rate (e) $.0576 $.0612 -- -- --
</TABLE>
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
ADVISOR CLASS
--------------------------
OCTOBER 2,
SIX MONTHS 1996 (F)
ENDED TO
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996
------------ ------------
Net asset value, beginning of period $51.17 $47.32
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (.10) (.05)
Net realized and unrealized gain on investment
transactions .68 3.90
Net increase in net asset value from operations .58 3.85
LESS: DISTRIBUTIONS
Distributions from net realized gains (.42) -0-
Net asset value, end of period $51.33 $51.17
TOTAL RETURN
Total investment return based on net asset value (c) 1.15% 8.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $77,548 $566
Ratio of expenses to average net assets (d) 1.55% 1.75%
Ratio of net investment loss to average net
assets (d) (.48)% (1.21)%
Portfolio turnover rate 28% 30%
Average commission rate $.0576 $.0612
(a) The Fund changed its fiscal year end from December 31 to November 30.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales 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.
(d) Annualized.
(e) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(f) Commencement of distribution.
16
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)
PETER J. POWERS (1)
MARSHALL C. TURNER, JR. (1)
OFFICERS
PETER ANASTOS, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, VICE PRESIDENT
THOMAS G. BARDONG, VICE PRESIDENT
GERALD T. MALONE, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
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.
17
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
18
ALLIANCE TECHNOLOGY FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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.
TECSR
