-----------------
SPECIALTY EQUITY
-----------------
Alliance Technology Fund
Semi-Annual Report
May 31, 2000
[GRAPHIC OMITTED]
AllianceCapital [LOGO](R)
The Investment Professionals Choice
<PAGE>
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
<PAGE>
-----------------------
LETTER TO SHAREHOLDERS
-----------------------
LETTER TO SHAREHOLDERS
July 24, 2000
Dear Shareholder:
We are pleased to provide an update of Alliance Technology Fund's (the "Fund")
performance and investment activity for the semi-annual reporting period ended
May 31, 2000.
Investment Objective and Policies
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 invests primarily in securities of companies
expected to benefit from technological advances and improvements. The Fund
normally will have substantially 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
The following table provides the Fund's investment results for the six- and
12-month periods ended May 31, 2000. For comparison, we have also included
performance for the Standard & Poor's (S&P) 500 Stock Index, a standard measure
of the performance of the overall U.S. stock market, the Pacific Stock Exchange
("PSE") High Technology Index, a measure of the overall U.S. technology and
science sector, and the Lipper Science and Technology Fund Index (the "Lipper
Index"), which is a performance index of the largest qualifying funds that have
a science and technology investment objective.
As shown, during the six- and 12-month periods ended May 31, 2000, the Fund
substantially outperformed the S&P 500 Stock Index and also outperformed the
Lipper Index for the six-month period. The strong relative performance vs. the
S&P 500 Stock Index reflects the high growth rates of many stocks in the Fund
which are not part of the S&P 500 Stock Index. The Fund's underperformance
versus the PSE High Technology Index partly reflects the fact that biotechnology
stocks, which have done well in the last six months and are contained in the PSE
Index, are not a sector in which the Fund invests.
INVESTMENT RESULTS*
Periods Ended May 31, 2000
---------------------
Total Returns
---------------------
6 Months 12 Months
-------------------------------------------
Alliance
Technology Fund
Class A 22.40% 66.82%
-------------------------------------------
Class B 21.95% 65.62%
-------------------------------------------
Class C 21.95% 65.61%
-------------------------------------------
S&P 500 2.90% 10.47%
-------------------------------------------
PSE High
Technology
Index 30.82% 87.74%
-------------------------------------------
Lipper Science
and Technology
Fund Index 17.10% 79.53%
-------------------------------------------
* The Fund's investment results represent total returns for the periods
shown and are based on the net asset value of each class of shares as of
May 31, 2000. All fees and expenses related to the
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
operation of the Fund have been deducted, but no adjustment has been made for
sales charges that may apply when shares are purchased or redeemed. Returns for
the Fund include the reinvestment of any distributions paid during the period.
Past performance is no guarantee of future results.
The S&P 500 Stock Index is an unmanaged index of 500 U.S. companies and is a
common measure of the performance for the overall U.S. stock market. The PSE
High Technology Index is a price-weighted, broad-based index, representing 100
listed and over-the-counter U.S. stocks designed to mirror the U.S. technology
sector. The PSE High Technology Index is designed to represent the entire U.S.
technology and science sector, including such industry groups as computer
software products, information processing services, medical technology, and
biotechnology, among others. The Lipper Science and Technology Fund Index is an
equally-weighted performance index, adjusted for capital gains distributions and
income dividends, of the largest qualifying funds that have a science and
technology investment objective. (According to Lipper, this investment objective
includes those funds that invest at least 65% of their equity portfolios in
science and technology stocks.) These funds have generally similar investment
objectives to the Fund, although investment policies for the various funds may
differ. All comparative indices are unmanaged and reflect no fees or expenses.
An investor cannot invest directly in an index, and its results are not
indicative of the performance for any specific investment, including Alliance
Technology Fund.
Additional investment results appear on pages 5-8 .
Market Commentary
Charles Dickens' classic A Tale of Two Cities begins, "It was the best of times.
It was the worst of times." That is an appropriate theme for this letter because
we see a "split personality" in today's technology landscape. This split is best
summarized by an S.G. Cowen survey of information technology (IT) budgets in the
U.S. which shows IT expenditures growing approximately 7% this year. That growth
rate is about normal. However, e-commerce initiatives will represent one-fifth
of this spending and are expected to increase 35% this year. This means that
spending not related to e-commerce, which is virtually everything else, will be
flat in 2000. This massive shift in where corporations are investing is a
bonanza for the software and service vendors who can exploit it, but a major
problem for those who did not anticipate how rapidly businesses would "web-ify"
their operations.
Another split is seen within the growing collection of Internet companies
themselves. There were more than 400 "pure play" U.S. Internet companies in
operation at the beginning of June, but the contrast in fortunes is striking.
The weak business models of many of the companies have been exposed, their cash
is dwindling and their stocks are collapsing. At the same time, another group of
well-managed Internet companies with defensible technology or strong brand names
are enjoying hyper growth and are either narrowing their losses or increasing
their profits.
--------------------------------------------------------------------------------
2 O ALLIANCE TECHNOLOGY FUND
<PAGE>
-----------------------
LETTER TO SHAREHOLDERS
-----------------------
Another example of the "split personality" can be seen in investor behavior. The
indiscriminate acceptance of almost any technology initial public offering (IPO)
earlier this year has been replaced with a rejection of many new offerings. The
bidding up of many technology stocks on the basis of concept has now shifted to
a cynicism which severely punishes a stock if the sequential growth rate
declines by even a small amount.
Adding to all of this inconsistency is an unprecedented daily volatility in
technology stocks. It is easy to pin the blame on the retail investor or the day
traders for this volatility, but institutional investors are contributing as
well. The complexity of today's technology and the rapidity with which it
impacts everything seems to be changing how investment decisions are made.
Old-fashioned skill, care and prudence in the investment business is shifting
(at least with technology stocks) to a new kind of momentum-driven psychology
which feeds on itself in both directions but lacks any conviction based on
security analysis. Recent examples of this include the change from enthusiasm,
to despair, to confusion, about the longevity of the semi-conductor cycle, the
value of advertising on the Internet and the future growth rate of cellular
telephony.
Outlook
Traders may love all of this, but we do not. We continue to believe that the
best way to navigate this constant turmoil is to strive to select--after a
diligent research process--solid and rapidly growing companies and to worry less
about the daily drama in stock prices. Fortunately, that focus on secular
fundamentals leads to many exciting investment opportunities. An abbreviated
list would include: wireless Internet access, the use of voice over the
Internet, new security requirements, e-commerce enablement, new optics
technologies, changing semi-conductor processes, new operating systems,
sophisticated hand-held devices and the convergence of the TV with the Internet.
This partial list is just another reminder that technology both creates and
destroys. The challenge is to embrace the new but with the understanding that
valuation judgments must continue to be made, that the majority of new
technology companies do not succeed, and that short-term price movements often
bear no relationship to underlying fundamentals.
Calendar year 1999 was an unusual year, one in which momentum investing ruled
the day and the time-consuming process of security analysis seemed slow and
timid. Our results this year suggest that a careful selection of sec-
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 3
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
tors and companies is paying off once again. We are gratified with the results
shown above, and we will continue to do our best to invest with reason and to
embrace change while resisting the fad of the week.
Thank you for your support.
Sincerely,
/s/ John D. Carifa
John D. Carifa
President and Chairman
/s/ Peter Anastos
Peter Anastos
Senior Vice President
/s/ Gerald T. Malone
Gerald T. Malone
Senior Vice President
[PHOTO]
John D. Carifa
[PHOTO]
Peter Anastos
[PHOTO]
Gerald T. Malone
Mr. Anastos and Mr. Malone
are both Senior Vice Presidents
and Portfolio Managers
--------------------------------------------------------------------------------
4 O ALLIANCE TECHNOLOGY FUND
<PAGE>
-------------------
PERFORMANCE UPDATE
-------------------
PERFORMANCE UPDATE
ALLIANCE TECHNOLOGY FUND
GROWTH OF A $10,000 INVESTMENT
5/31/90 TO 5/31/00
o Alliance Technology Fund
o Pacific Stock Exchange (PSE) High Tech Index
o Standard & Poor's 500 Stock Index
[The following table was depicted as a mountain chart in the printed material.]
[PLOT POINTS TO COME]
PSE High Tech Index: $137,342
Alliance Technology Fund Class A: $112,715
S&P 500 Stock Index: $ 49,822
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Technology Fund Class A shares (from 5/31/90 to 5/31/00) as compared to
the performance of appropriate broad-based indices. The chart reflects the
deduction of the maximum 4.25% sales charge from the initial $10,000 investment
in the Fund and assumes the reinvestment of dividends and capital gains.
Performance for Class B, Class C and Advisor Class shares will vary from the
results shown above due to differences in expenses charged to these 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 & 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 Pacific Stock Exchange (PSE) High Technology Index is a
price-weighted, broad-based index, representing 100 listed and over-the-counter
U.S. stocks designed to mirror the U.S. technology sector. The PSE High
Technology Index is designed to represent the entire U.S. technology and science
sector, including such industry groups as computer software products,
information processing services, medical technology and biotechnology, among
others.
When comparing Alliance Technology Fund to the indices shown above, you should
note that no charges or expenses are reflected in the performance of the
indices. An investor cannot invest directly in an index and its results are not
indicative of any specific investment, including Alliance Technology Fund.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 5
<PAGE>
-------------------
PERFORMANCE UPDATE
-------------------
PERFORMANCE UPDATE
ALLIANCE TECHNOLOGY FUND
HISTORY OF RETURNS
YEARLY PERIODS ENDED 5/31
o Alliance Technology Fund
o PSE High Technology Index
[The following table was depicted as a bar chart in the printed material.]
Alliance Technology Fund-Yearly Periods Ended 5/31
--------------------------------------------------------------------------------
Alliance Technology Fund PSE High Technology Index
--------------------------------------------------------------------------------
5/31/91 5.78% 12.32%
5/31/92 12.42% 5.72%
5/31/93 31.49% 18.30%
5/31/94 14.08% 15.32%
5/31/95 52.89% 39.15%
5/31/96 35.89% 36.91%
5/31/97 9.79% 25.44%
5/31/98 19.29% 18.01%
5/31/99 45.41% 60.12%
5/31/00 66.82% 87.74%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on the net
asset value. All fees and expenses related to the operation of the Fund have
been deducted. Returns for the Fund include the reinvestment of any
distributions paid during the period. The Pacific Stock Exchange (PSE) High
Technology Index is a price-weighted, broad-based index, representing 100 listed
and over-the-counter U.S. stocks designed to mirror the U.S. technology sector.
The PSE High Technology Index is designed to represent the entire U.S.
technology and science sector, including such industry groups as computer
software products, information processing services, medical technology, and
biotechnology, among others. An investor cannot invest directly in an index, and
its results are not indicative of any specific investment, including Alliance
Technology Fund.
--------------------------------------------------------------------------------
6 O ALLIANCE TECHNOLOGY FUND
<PAGE>
------------------
PORTFOLIO SUMMARY
------------------
PORTFOLIO SUMMARY
May 31, 2000 (unaudited)
INCEPTION DATE PORTFOLIO STATISTICS
(Class A shares) Assets ($ mil): $11,469
3/1/82 Median Market Capitalization ($ mil): $22,321
SECTOR BREAKDOWN
Technology
o 18.33% Semi-Conductor Components
o 14.56% Computer Software
o 11.04% Computer Services
o 8.54% Contract Manufacturing
o 8.24% Communication Equipment [PIE CHART OMITTED]
o 6.72% Semi-Conductor Capital Equip
o 6.64% Internet
o 5.57% Computer Hardware
o 4.76% Networking Software
o 1.99% Computer Peripherals
Consumer Services
o 1.66% Cellular Communications
o 1.60% Broadcasting & Cable
o 2.97% Utilities
o 7.38% Short-term
SECURITY TYPE
o 92.62% Equity
o 7.38% Short-term securities [PIE CHART OMITTED]
COUNTRY BREAKDOWN
o 83.43% United States
o 4.31% Finland
o 1.62% Singapore
o 1.60% United Kingdom [PIE CHART OMITTED]
o 1.19% Netherlands
o 0.47% Canada
o 7.38% Short-term
All data as of May 31, 2000. Sector and country breakdowns and security types
may vary over time. These breakdowns are expressed as a percentage of total
investments.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 7
<PAGE>
-------------------
INVESTMENT RESULTS
-------------------
INVESTMENT RESULTS
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF MAY 31, 2000
Class A Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 66.82% 59.72%
5 Years 33.98% 32.82%
10 Years 27.96% 27.41%
Class B Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 65.62% 61.62%
5 Years 33.04% 33.04%
Since Inception* 34.15% 34.15%
Class C Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 65.61% 64.61%
5 Years 33.03% 33.03%
Since Inception* 34.14% 34.14%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 2000)
Class A Class B Class C
--------------------------------------------------------------------------------
1 Year 80.10% 82.76% 85.76%
5 Years 39.99% 40.22% 40.21%
10 Years 30.85% 38.16%* 38.15%*
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year, 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Many equity stocks, and technology stocks in particular, have experienced
significant gains in recent years. There is no assurance that these gains will
continue. Technology stocks, especially those of smaller, less-seasoned
companies, tend to be more volatile than the overall stock market.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Since Inception: Inception Date: 5/3/93 for Class B and Class C shares.
--------------------------------------------------------------------------------
8 O ALLIANCE TECHNOLOGY FUND
<PAGE>
---------------------
TEN LARGEST HOLDINGS
---------------------
TEN LARGEST HOLDINGS
May 31, 2000 (unaudited)
Percent of
Company Value Net Assets
--------------------------------------------------------------------------------
Cisco Systems, Inc. $ 546,372,250 4.8%
--------------------------------------------------------------------------------
Nokia Corp. (ADR) 495,076,400 4.3
--------------------------------------------------------------------------------
PMC-Sierra, Inc. 475,841,250 4.2
--------------------------------------------------------------------------------
Amdocs, Ltd. 421,175,000 3.7
--------------------------------------------------------------------------------
Xilinx, Inc. 390,353,775 3.4
--------------------------------------------------------------------------------
Sanmina Corp. 381,298,262 3.3
--------------------------------------------------------------------------------
Dell Computer Corp. 371,250,188 3.2
--------------------------------------------------------------------------------
First Data Corp. 360,554,756 3.1
--------------------------------------------------------------------------------
eBay, Inc. 349,686,838 3.1
--------------------------------------------------------------------------------
Altera Corp. 335,281,762 2.9
--------------------------------------------------------------------------------
$4,126,890,481 36.0%
MAJOR PORTFOLIO CHANGES
Six Months Ended May 31, 2000 (unaudited)
-----------------------------------
Shares*
-----------------------------------
Purchases Bought Holdings 5/31/00
--------------------------------------------------------------------------------
AT&T Corp. 2,339,000 2,339,000
--------------------------------------------------------------------------------
AT&T Wireless Group 6,673,200 6,673,200
--------------------------------------------------------------------------------
eBay, Inc. 5,383,900 5,589,400
--------------------------------------------------------------------------------
JDS Uniphase Corp. 1,856,500 1,856,500
--------------------------------------------------------------------------------
Lucent Technologies, Inc. 3,060,200 3,060,200
--------------------------------------------------------------------------------
Micron Technology, Inc. 2,878,000 2,878,000
--------------------------------------------------------------------------------
Microsoft Corp. 1,567,000 4,047,700
--------------------------------------------------------------------------------
Oracle Corp. 3,708,600 3,708,600
--------------------------------------------------------------------------------
Sapient Corp. 1,653,100 1,911,200
--------------------------------------------------------------------------------
U S WEST, Inc. 3,610,500 3,610,500
--------------------------------------------------------------------------------
Sales Sold Holdings 5/31/00
--------------------------------------------------------------------------------
Amdocs, Ltd. 724,100 6,800,000
--------------------------------------------------------------------------------
Compaq Computer Corp. 1,275,000 -0-
--------------------------------------------------------------------------------
DII Group, Inc. 548,900 -0-
--------------------------------------------------------------------------------
IXL Enterprises, Inc. 545,500 -0-
--------------------------------------------------------------------------------
Mannesmann AG (ADR) 779,550 -0-
--------------------------------------------------------------------------------
Motorola, Inc. 181,318 1,182,282
--------------------------------------------------------------------------------
New Era of Networks, Inc. 1,807,400 -0-
--------------------------------------------------------------------------------
Radioshack Corp. 1,312,200 -0-
--------------------------------------------------------------------------------
WorldCom, Inc. 1,235,600 -0-
--------------------------------------------------------------------------------
Yahoo!, Inc. 876,800 -0-
--------------------------------------------------------------------------------
* Adjusted for stock splits
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 9
<PAGE>
-------------------------
PORTFOLIO OF INVESTMENTS
-------------------------
PORTFOLIO OF INVESTMENTS
May 31, 2000 (unaudited)
Company Shares Value
--------------------------------------------------------------------------------
Common Stocks-92.6%
Technology-86.4%
Communication Equipment-8.2%
JDS Uniphase Corp.(a)....................... 1,856,500 $ 163,372,000
Lucent Technologies, Inc. .................. 3,060,200 175,578,975
Motorola, Inc. ............................. 1,182,282 110,838,937
Nokia Corp. (ADR) (Finland)................. 9,520,700 495,076,400
---------------
944,866,312
---------------
Computer Hardware-5.6%
Apex, Inc.(a)............................... 2,095,350 76,218,356
Brocade Communications Systems, Inc.(a)..... 326,900 38,553,769
Dell Computer Corp.(a)...................... 8,608,700 371,250,188
Gateway, Inc.(a)............................ 3,086,700 152,791,650
---------------
638,813,963
---------------
Computer Peripherals-2.0%
Lexmark International Group, Inc. Cl.A(a) .. 3,272,550 228,260,363
---------------
Computer Services-11.0%
Computer Sciences Corp.(a).................. 2,314,700 222,066,531
Convergys Corp.(a).......................... 1,208,000 54,284,500
DST Systems, Inc.(a)........................ 3,175,400 238,353,462
First Data Corp. ........................... 6,431,300 360,554,756
Fiserv, Inc.(a)............................. 2,692,825 125,889,569
Gartner Group, Inc. Cl.A.................... 1,181,600 15,730,050
MarchFirst, Inc.(a)......................... 1,252,180 23,634,898
Sabre Holdings Corp. Cl.A................... 1,235,000 35,506,250
Sapient Corp.(a)............................ 1,911,200 191,000,550
---------------
1,267,020,566
---------------
Computer Software-14.6%
Amdocs, Ltd.(a)............................. 6,800,000 421,175,000
BEA Systems, Inc.(a)........................ 5,386,000 194,569,250
I2 Technologies, Inc.(a).................... 1,874,400 199,389,300
Macrovision Corp.(a)........................ 919,300 64,236,088
Mercury Interactive Corp.(a)................ 72,500 6,144,375
Microsoft Corp.(a).......................... 4,047,700 253,234,231
Oracle Corp.(a)............................. 3,708,600 266,555,625
Rational Software Corp.(a).................. 1,326,900 97,278,356
TIBCO Software, Inc.(a)..................... 959,000 53,344,375
VERITAS Software Corp.(a)................... 626,800 73,022,200
Vitria Technology, Inc. .................... 1,177,275 41,204,625
---------------
1,670,153,425
---------------
--------------------------------------------------------------------------------
10 O ALLIANCE TECHNOLOGY FUND
<PAGE>
-------------------------
PORTFOLIO OF INVESTMENTS
-------------------------
Company Shares Value
--------------------------------------------------------------------------------
Contract Manufacturing-8.6%
Celestica, Inc. (Canada)(a)..................... 1,161,200 $ 54,068,375
Flextronics International, Ltd. (Singapore)(a) . 3,420,000 186,176,250
Jabil Circuit, Inc.(a).......................... 3,012,200 109,945,300
Sanmina Corp.(a)................................ 5,992,900 381,298,262
Solectron Corp.(a).............................. 7,526,000 248,828,375
--------------
980,316,562
--------------
Internet-6.6%
America Online, Inc.(a)......................... 5,751,200 304,813,600
DoubleClick, Inc.(a)............................ 2,531,000 106,934,750
eBay, Inc.(a)................................... 5,589,400 349,686,838
--------------
761,435,188
--------------
Networking Software-4.8%
Cisco Systems, Inc.(a).......................... 9,596,000 546,372,250
--------------
Semi-Conductor Capital Equipment-6.7%
Amkor Technology, Inc.(a)....................... 2,835,900 126,906,525
Applied Materials, Inc.(a)...................... 2,858,660 238,698,110
KLA-Tencor Corp.(a)............................. 2,626,300 130,165,994
Teradyne, Inc.(a)............................... 3,205,000 275,630,000
--------------
771,400,629
--------------
Semi-Conductor Components-18.3%
Altera Corp.(a)................................. 3,904,300 335,281,762
Fairchild Semiconductor Corp.(a)................ 4,053,200 182,394,000
Intel Corp. .................................... 1,657,000 206,607,187
Micron Technology, Inc.(a)...................... 2,878,000 201,280,125
PMC-Sierra, Inc.(a)............................. 3,105,000 475,841,250
SCG Holding Corp.(a)............................ 95,000 1,834,688
STMicroelectronics N.V. (Netherlands)........... 2,274,000 136,155,750
Texas Instruments, Inc. ........................ 2,396,000 173,111,000
Xilinx, Inc.(a)................................. 5,127,800 390,353,775
--------------
2,102,859,537
--------------
9,911,498,795
--------------
Consumer Services-3.2%
Broadcasting & Cable-1.6%
Vodafone AirTouch Plc (ADR) (United Kingdom) ... 3,999,282 183,216,735
--------------
Cellular Communications-1.6%
AT&T Wireless Group(a).......................... 6,673,200 190,603,275
--------------
373,820,010
--------------
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 11
<PAGE>
-------------------------
PORTFOLIO OF INVESTMENTS
-------------------------
Shares or
Principal
Amount
Company (000) Value
--------------------------------------------------------------------------------
Utilities-3.0%
Telephone Utility-3.0%
AT&T Corp. ................................. 2,339,000 $ 81,134,063
U S WEST, Inc. ............................. 3,610,500 259,956,000
----------------
341,090,063
----------------
Total Common Stocks
(cost $6,705,322,354).................... 10,626,408,868
----------------
Private Placement-0.0%
Interactive Light Holdings, Inc.(a)(b)
(cost $692,548).......................... 287,572 692,548
----------------
Short-Term Investment-7.4%
Time Deposit-7.4%
State Street Euro Dollar
6.00%, 6/01/00
(amortized cost $846,520,000)............ $846,520 846,520,000
----------------
Total Investments-100%
(cost $7,552,534,902).................... 11,473,621,416
Other assets less liabilities-0.0%.......... (4,506,131)
----------------
Net Assets-100%............................. $ 11,469,115,285
================
(a) Non-income producing security.
(b) Illiquid security, valued at fair value (see Notes A & F).
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
--------------------------------------------------------------------------------
12 O ALLIANCE TECHNOLOGY FUND
<PAGE>
----------------------------------
STATEMENT OF ASSETS & LIABILITIES
----------------------------------
STATEMENT OF ASSETS & LIABILITIES
May 31, 2000 (unaudited)
Assets
Investments in securities, at value (cost $7,552,534,902) .. $11,473,621,416
Receivable for capital stock sold .......................... 37,485,206
Receivable for investment securities sold .................. 680,653
Interest and dividends receivable .......................... 259,063
---------------
Total assets ............................................... 11,512,046,338
---------------
Liabilities
Advisory fee payable ....................................... 28,580,969
Payable for capital stock redeemed ......................... 10,718,223
Distribution fee payable ................................... 2,239,820
Accrued expenses and other liabilities ..................... 1,392,041
---------------
Total liabilities .......................................... 42,931,053
---------------
Net Assets ................................................. $11,469,115,285
===============
Composition of Net Assets
Capital stock, at par ...................................... $ 904,808
Additional paid-in capital ................................. 6,712,415,632
Net investment loss ........................................ (73,673,718)
Accumulated net realized gain on investments ............... 908,382,049
Net unrealized appreciation of investments ................. 3,921,086,514
---------------
$11,469,115,285
===============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($3,472,182,990 / 26,344,485 shares of capital
stock issued and outstanding) ........................... $131.80
Sales charge--4.25% of public offering price ............... 5.85
-------
Maximum offering price ..................................... $137.65
=======
Class B Shares
Net asset value and offering price per share
($6,063,004,134 / 48,766,602 shares of capital stock
issued and outstanding) ................................. $124.33
=======
Class C Shares
Net asset value and offering price per share
($1,585,521,344 / 12,757,684 shares of capital stock
issued and outstanding) ................................. $124.28
=======
Advisor Class Shares
Net asset value, redemption and offering price per share
($348,406,817/ 2,612,042 shares of capital stock
issued and outstanding) ................................. $133.38
=======
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 13
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2000 (unaudited)
Investment Income
Interest ..................................... $22,290,693
Dividends (net of foreign taxes withheld
of $277,398) .............................. 11,530,839 $ 33,821,532
-----------
Expenses
Advisory fee ................................. 58,158,196
Distribution fee - Class A ................... 4,843,660
Distribution fee - Class B ................... 28,767,952
Distribution fee - Class C ................... 7,291,063
Transfer agency .............................. 6,687,825
Printing ..................................... 905,097
Registration ................................. 281,370
Custodian .................................... 274,998
Audit and legal .............................. 74,781
Administrative ............................... 64,000
Directors' fees .............................. 57,000
Miscellaneous ................................ 89,308
-----------
Total expenses ............................... 107,495,250
---------------
Net investment loss .......................... (73,673,718)
---------------
Realized and Unrealized Gain on
Investments
Net realized gain on investment
transactions .............................. 918,514,771
Net realized gain on written option
transactions .............................. 1,457,512
Net change in unrealized
appreciation/depreciation of
investments ............................... 677,668,427
---------------
Net gain on investments ...................... 1,597,640,710
---------------
Net Increase in Net Assets from
Operations ................................ $ 1,523,966,992
===============
See notes to financial statements.
--------------------------------------------------------------------------------
14 O ALLIANCE TECHNOLOGY FUND
<PAGE>
-----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
-----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Six Months
Ended Year Ended
May 31, 2000 November 30,
(unaudited) 1999
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss ...................... $ (73,673,718) $ (74,760,515)
Net realized gain on investments and
written option transactions ........... 919,972,283 347,003,054
Net change in unrealized
appreciation/depreciation of
investments and options ............... 677,668,427 2,306,750,853
--------------- ---------------
Net increase in net assets from operations 1,523,966,992 2,578,993,392
Distributions to Shareholders from:
Net realized gain on investments
Class A ............................... (80,013,126) (62,357,963)
Class B ............................... (152,696,179) (117,727,553)
Class C ............................... (35,768,774) (21,549,871)
Advisor Class ......................... (11,845,515) (17,168,091)
Capital Stock Transactions
Net increase ............................. 2,897,716,723 2,150,736,566
--------------- ---------------
Total increase ........................... 4,141,360,121 4,510,926,480
Net Assets
Beginning of period ...................... 7,327,755,164 2,816,828,684
--------------- ---------------
End of period........................... $11,469,115,285 $ 7,327,755,164
=============== ===============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 15
<PAGE>
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 (unaudited)
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 may 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 are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Advisor Class shares are sold without
an initial or contingent deferred sales charge and are not subject to ongoing
distribution expenses. Advisor Class shares are offered to investors
participating in fee-based programs and to certain retirement plan accounts. All
four classes of shares have identical voting, dividend, liquidation and other
rights, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. The financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange, on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on The
Nasdaq Stock Market, Inc. are generally valued at the last reported sales price
or if no sale occurred, at the mean of the closing bid and asked prices on that
day. Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to the U.S. over-the-counter market, and securities listed on a national
securities exchange whose primary market is believed to be over-the-counter (but
excluding securities traded on The Nasdaq Stock Market, Inc.), are valued at the
mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of prices
obtained from a pricing service when such prices are believed to reflect the
fair market value of such securities.
--------------------------------------------------------------------------------
16 O ALLIANCE TECHNOLOGY FUND
<PAGE>
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
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 any, Selected Data
For A Share Of Capital Stock Outstanding Throughout Each Period 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. The Fund accretes discounts as adjustments to interest
income. Investment gains and losses are determined on the identified cost basis.
4. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees than
Class A shares and the Advisor Class shares have no distribution fees.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with accounting principles generally accepted in the United States.
To the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences, do not require such reclassification.
NOTE B
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"), a quarterly advisory fee equal to the
following percentages of the value of the Fund's aggregate net assets at the
close of business on the last business day of the previous quarter: .25 of 1.00%
of the first $10 billion, .25 of .975% of the next $2.5 billion, .25 of .95% of
the next $2.5 billion, .25 of .925% of the next $2.5 billion, .25 of .90% of the
next $2.5 billion, .25 of .875% of the next $2.5 billion and .25 of .85% of the
net assets in excess of $22.5 billion. Prior to March 1, 2000, the effective
advisory fee was a quarterly rate equal to .25% (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 $64,000 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, 2000.
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
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 17
<PAGE>
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
compensation amounted to $5,247,764 for the six months ended May 31, 2000.
For the six months ended May 31, 2000, the Fund's expenses were reduced by
$409,420 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $1,365,089
from the sales of Class A shares and $53,023, $3,499,378 and $288,862 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, 2000.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 2000 amounted to $2,217,415, none of which was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser, and of which $873,733 was paid to
DLJ directly.
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 distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets attributable
to Class A shares and 1% of the average daily net assets attributable to both
Class B and Class C shares. There are no distribution and servicing fees on the
Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement
provides that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities. The Distributor has advised
the Fund that it has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $103,528,198 and $6,783,459 for Class B
and Class C shares, respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In 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 securities) aggregated $4,518,331,963 and $2,254,826,088,
respectively, for the six months ended May 31, 2000. There were no purchases or
sales of U.S. government and government agency obligations for the six months
ended May 31, 2000.
At May 31, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized ap-
--------------------------------------------------------------------------------
18 O ALLIANCE TECHNOLOGY FUND
<PAGE>
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
preciation of investments was $4,437,895,445 and gross unrealized depreciation
of investments was $516,808,931 resulting in net unrealized appreciation of
$3,921,086,514.
Option Transactions
For hedging and investment purposes, the Fund purchases and writes call options
listed on national securities exchanges and purchases listed put options,
including put options on market indices.
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.
When the Fund writes an option, 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 recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the sale
of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. The
risk involved in writing an option is that, if the option was exercised the
underlying security could then be purchased or sold by the Fund at a
disadvantageous price.
Transactions in options written for the six months ended May 31, 2000 were as
follows:
Number of
Contracts Premiums
---------- -----------
Options outstanding at beginning of
the period .................................. -0- $ -0-
Options written ................................ 2,997 2,064,654
Options terminated in closing purchase
transactions ................................ (2,997) (2,064,654)
---------- -----------
Options outstanding at May 31, 2000 ............ -0- $ -0-
========== ===========
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 19
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE E
Capital Stock
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
--------------------------------- -----------------------------------
Shares Amount
--------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
May 31, 2000 November 30, May 31, 2000 November 30,
(unaudited) 1999 (unaudited) 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 36,354,913 48,158,052 $ 5,034,947,120 $ 4,282,232,634
-------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 651,837 818,921 75,041,697 56,434,216
-------------------------------------------------------------------------------------------------
Shares converted
from Class B 156,860 179,018 21,787,806 15,931,334
-------------------------------------------------------------------------------------------------
Shares redeemed (30,262,484) (41,734,391) (4,210,926,027) (3,717,567,978)
-------------------------------------------------------------------------------------------------
Net increase 6,901,126 7,421,600 $ 920,850,596 $ 637,030,206
=================================================================================================
Class B
Shares sold 14,218,610 17,813,433 $ 1,857,623,911 $ 1,500,823,911
-------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 1,302,828 1,659,877 141,955,884 109,253,532
-------------------------------------------------------------------------------------------------
Shares converted
to Class A (166,008) (188,164) (21,787,806) (15,931,334)
-------------------------------------------------------------------------------------------------
Shares redeemed (3,690,588) (4,852,485) (481,151,814) (403,812,165)
-------------------------------------------------------------------------------------------------
Net increase 11,664,842 14,432,661 $ 1,496,640,175 $ 1,190,333,944
=================================================================================================
Class C
Shares sold 10,162,247 16,762,551 $ 1,319,950,915 $ 1,400,120,630
-------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 307,787 306,206 33,525,030 20,148,985
-------------------------------------------------------------------------------------------------
Shares redeemed (6,301,057) (12,607,292) (823,561,596) (1,053,263,050)
-------------------------------------------------------------------------------------------------
Net increase 4,168,977 4,461,465 $ 529,914,349 $ 367,006,565
=================================================================================================
Advisor Class
Shares sold 1,580,733 4,254,845 $ 221,046,525 $ 373,307,248
-------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 98,852 242,885 11,501,365 16,853,793
-------------------------------------------------------------------------------------------------
Shares redeemed (2,002,249) (4,898,671) (282,236,287) (433,795,190)
-------------------------------------------------------------------------------------------------
Net decrease (322,664) (400,941) $ (49,688,397) $ (43,634,149)
=================================================================================================
</TABLE>
--------------------------------------------------------------------------------
20 O ALLIANCE TECHNOLOGY FUND
<PAGE>
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
NOTE F
Illiquid Security
Date Acquired Cost
------------- ---------
Interactive Light Holdings, Inc......... 2/08/99 $ 692,548
The security shown above is illiquid and has been valued at fair value in
accordance with the procedures described in Note A. The value of this security
at May 31, 2000 was $692,548, representing .01% of net assets.
NOTE G
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended May 31, 2000.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 21
<PAGE>
---------------------
FINANCIAL HIGHLIGHTS
---------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
2000 ----------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .............................. $ 111.46 $ 68.60 $ 54.44 $ 51.15 $ 46.64 $ 31.98
----------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(a) ................ (.63) (.99) (.68) (.51) (.39) (.30)
Net realized and unrealized gain
on investment and written
option transactions ................. 25.01 49.02 15.42 4.22 7.28 18.13
----------------------------------------------------------------------------------------
Net increase in net asset value
from operations ..................... 24.38 48.03 14.74 3.71 6.89 17.83
----------------------------------------------------------------------------------------
Less: Distributions
Distributions from net realized
gains ............................... (4.04) (5.17) (.58) (.42) (2.38) (3.17)
----------------------------------------------------------------------------------------
Net asset value, end of period ........ $ 131.80 $ 111.46 $ 68.60 $ 54.44 $ 51.15 $ 46.64
========================================================================================
Total Return
Total investment return based on
net asset value(b) .................. 22.40% 74.67% 27.36% 7.32% 16.05% 61.93%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ..................... $3,472,183 $2,167,060 $ 824,636 $624,716 $594,861 $398,262
Ratio of expenses to average
net assets .......................... 1.53%(c) 1.68%(d) 1.66%(d) 1.67%(d) 1.74% 1.75%
Ratio of net investment loss to
average net assets .................. (.90)%(d) (1.11)% (1.13)% (.97)% (.87)% (.77)%
Portfolio turnover rate ............... 23% 54% 67% 51% 30% 55%
</TABLE>
See footnote summary on page 25.
--------------------------------------------------------------------------------
22 O ALLIANCE TECHNOLOGY FUND
<PAGE>
----------------------
FINANCIAL HIGHLIGHTS
----------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
2000 --------------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $ 105.73 $ 65.75 $ 52.58 $ 49.76 $ 45.76 $ 31.61
---------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(a) ......... (1.05) (1.54) (1.08) (.88) (.70) (.60)
Net realized and unrealized gain
on investment and written
option transactions .......... 23.69 46.69 14.83 4.12 7.08 17.92
---------------------------------------------------------------------------------------------
Net increase in net asset value
from operations .............. 22.64 45.15 13.75 3.24 6.38 17.32
---------------------------------------------------------------------------------------------
Less: Distributions
Distributions from net realized
gains ........................ (4.04) (5.17) (.58) (.42) (2.38) (3.17)
---------------------------------------------------------------------------------------------
Net asset value, end of period . $ 124.33 $ 105.73 $ 65.75 $ 52.58 $ 49.76 $ 45.76
=============================================================================================
Total Return
Total investment return based on
net asset value(b) ........... 21.95% 73.44% 26.44% 6.57% 15.20% 60.95%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) .............. $ 6,063,004 $3,922,584 $1,490,578 $1,053,436 $660,921 $277,111
Ratio of expenses to average
net assets ................... 2.23%(c) 2.39%(d) 2.39%(d) 2.38%(d) 2.44% 2.48%
Ratio of net investment loss to
average net assets ........... (1.61)%(d) (1.83)% (1.86)% (1.70)% (1.61)% (1.47)%
Portfolio turnover rate ........ 23% 54% 67% 51% 30% 55%
</TABLE>
See footnote summary on page 25.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 23
<PAGE>
---------------------
FINANCIAL HIGHLIGHTS
---------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
2000 -----------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $ 105.69 $ 65.74 $ 52.57 $ 49.76 $ 45.77 $ 31.61
------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(a) ......... (1.06) (1.57) (1.08) (.88) (.70) (.58)
Net realized and unrealized gain
on investment and written
option transactions .......... 23.69 46.69 14.83 4.11 7.07 17.91
------------------------------------------------------------------------------------------
Net increase in net asset value
from operations .............. 22.63 45.12 13.75 3.23 6.37 17.33
------------------------------------------------------------------------------------------
Less: Distributions
Distributions from net realized
gains ........................ (4.04) (5.17) (.58) (.42) (2.38) (3.17)
------------------------------------------------------------------------------------------
Net asset value, end of period . $ 124.28 $ 105.69 $ 65.74 $ 52.57 $ 49.76 $ 45.77
==========================================================================================
Total Return
Total investment return based
on net asset value(b) ........ 21.95% 73.40% 26.44% 6.55% 15.17% 60.98%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) .............. $ 1,585,521 $907,707 $271,320 $184,194 $108,488 $43,161
Ratio of expenses to average
net assets ................... 2.23%(c) 2.41%(d) 2.40%(d) 2.38%(d) 2.44% 2.48%
Ratio of net investment loss
to average net assets ........ (1.61)%(d) (1.85)% (1.87)% (1.70)% (1.60)% (1.47)%
Portfolio turnover rate ........ 23% 54% 67% 51% 30% 55%
</TABLE>
See footnote summary on page 25.
--------------------------------------------------------------------------------
24 O ALLIANCE TECHNOLOGY FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Advisor Class
--------------------------------------------------------------------------------------
Six Months October 2,
Ended 1996(e) to
May 31, Year Ended November 30, November
2000 ------------------------------------------------- 30,
(unaudited) 1999 1998 1997 1996
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $ 112.59 $ 69.04 $ 54.63 $ 51.17 $ 47.32
--------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(a) ......... (.42) (.68) (.50) (.45) (.05)
Net realized and unrealized gain
on investment and written
option transactions .......... 25.25 49.40 15.49 4.33 3.90
--------------------------------------------------------------------------------------
Net increase in net asset value
from operations .............. 24.83 48.72 14.99 3.88 3.85
--------------------------------------------------------------------------------------
Less: Distributions
Distributions from net realized
gains ........................ (4.04) (5.17) (.58) (.42) -0-
--------------------------------------------------------------------------------------
Net asset value, end of period . $ 133.38 $ 112.59 $ 69.04 $ 54.63 $ 51.17
======================================================================================
Total Return
Total investment return based on
net asset value(b) ........... 22.58% 75.22% 27.73% 7.65% 8.14%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) .............. $ 348,407 $ 330,404 $ 230,295 $ 167,120 $ 566
Ratio of expenses to average
net assets ................... 1.23%(c) 1.35%(d) 1.37%(d) 1.39%(d) 1.75%(c)
Ratio of net investment loss to
average net assets ........... (.61)%(d) (.78)% (.84)% (.81)% (1.21)%(c)
Portfolio turnover rate ........ 23% 54% 67% 51% 30%
</TABLE>
(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 charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period
of less than one year is not annualized.
(c) Annualized.
(d) Ratio reflects expenses grossed up for expense offset arrangement with the
Transfer Agent. For the periods shown below, the net expense ratios were
as follows:
Year Ended November 30,
--------------------------------
1999 1998 1997
--------------------------------
Class A .................. 1.66% 1.65% 1.66%
Class B .................. 2.38% 2.38% 2.36%
Class C .................. 2.40% 2.38% 2.37%
Advisor Class ............ 1.34% 1.36% 1.38%
(e) Commencement of distribution.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 25
<PAGE>
-----------------------------
GLOSSARY OF INVESTMENT TERMS
-----------------------------
GLOSSARY OF INVESTMENT TERMS
basis point (bp)
One basis point equals 0.01%.
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
bond
Bonds are issued by governments or corporations when they need to raise cash.
Bonds are sold, or issued, to investors and have a maturity date, which is the
date the issuer is obligated to repay the investor for the principal, or face
amount, of the bond. Bonds also pay interest until maturity. Bonds are also
called fixed-income securities.
equity
Another term for stock.
government bond
A bond that is issued by the U.S. government or its agencies.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
portfolio
The collection of securities that make up a Fund's or an investor's investments.
sector
Refers to a distinct part of the economy, for example, the technology sector.
yield
The rate of return on an asset, usually referring to dividend or interest
payments, expressed as a percentage of current market price.
--------------------------------------------------------------------------------
26 O ALLIANCE TECHNOLOGY FUND
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $394
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 28 of the FORTUNE 100 companies and public retirement funds in 33
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 276
investment professionals in 22 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 3/31/00.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 27
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio and Alliance
Select Investor Series Technology Portfolio, which generally have a
$10,000 minimum initial investment) and may make subsequent investments of
$50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
28 O ALLIANCE TECHNOLOGY FUND
<PAGE>
-------------------
BOARD OF DIRECTORS
-------------------
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)
Marshall C. Turner, Jr.(1)
OFFICERS
Peter Anastos, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Gerald T. Malone, Senior Vice President
Thomas J. Bardong, 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 LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free (800) 221-5672
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 29
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund Growth
Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Limited Maturity Government Fund
Mortgage Securities Income Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
30 O ALLIANCE TECHNOLOGY FUND
<PAGE>
NOTES
--------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND O 31
<PAGE>
NOTES
--------------------------------------------------------------------------------
32 O ALLIANCE TECHNOLOGY FUND
<PAGE>
Alliance Technology Fund ---------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
---------------
AllianceCapital [LOGO](R)
The Investment Professionals Choice
(R) These registered service marks used under
license from the owner, Alliance Capital
Management L.P.
TECSR500
