ALLIANCE INTERNATIONAL FUND
ANNUAL REPORT
JUNE 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
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August 2, 1995
Dear Shareholder:
Recent months have seen some of the best performance in global equity and bond
markets since the turbulent start in 1995. In the first quarter of 1995, for
instance, emerging markets were under extreme distress due to the Mexican
crisis, falling 13% as measured by Morgan Stanley's EMF Index in U.S. dollar
terms. However, during the second quarter, economic growth slowed, inflation
declined and interest rates fell virtually across the world. This
non-threatening, benign environment was ideal for financial markets and
produced stellar returns among most of the global equity and fixed income
markets.
EUROPE AND EMERGING MARKETS RECOVER
The U.S. equity market, clearly setting the pace and direction for the positive
trends in the second quarter, led world equity markets higher, climbing close
to 10% between April and June. After collapsing during the first quarter, the
U.S. dollar stabilized versus the European currencies. However, in response to
escalating trade tensions and threats of sanctions, it weakened a further 170
basis points versus the Japanese yen. European equity markets lagged the U.S.
market, but reversed the disappointing first quarter by rising 7% in local
currency terms. Scandinavian markets actually outperformed the U.S., with
returns of 34% in Finland, 12% in Norway and 14% in Sweden. The Japanese stock
market continued to ignore global financial market trends and declined 8% in
local currency terms during the second quarter. The stalled recovery in
Japan-stemming from the 14% appreciation of the yen this year, persistent
political paralysis and uncertainty, and a potential trade war with the
U.S.-has contributed to the market's weakness.
As a result of lower U.S. interest rates, emerging equity markets rallied 10%
in U.S. dollar terms during the second quarter. Mexico led the ascent by
climbing 26% as expectations rose that recovery may be imminent. The Asian
markets appreciated 8%, led by the Philippines, up 18%, Thailand, up 16%, and
Indonesia, up 15%. The weak dollar has actually helped the competitiveness of
the Emerging Asian nations, particularly those that export into Japan and
Europe.
INVESTMENT PERFORMANCE
For the six months ended June 30, 1995, the following table compares Alliance
International Fund's total returns with that of its benchmark, the unmanaged
Morgan Stanley World Index excluding the U.S., and with the Lipper
International Funds Average, which reflects performance of 244 funds. (Complete
descriptions of these benchmarks appear on page 4.)
Six Months Ended June 30, 1995
Total Return Ending NAV
------------ ----------
ALLIANCE INTERNATIONAL FUND
Class A +2.19% $16.81
Class B +1.76% $16.19
Class C +1.76% $16.20
MSCI World Index (-U.S.) +3.07%
Lipper International Funds Average +2.30%
The Fund's total returns are based on the net asset values of each class of
shares as of June 30; additional investment results appear on page 3.
Alliance International Fund's overall performance for the past twelve months
has modestly lagged Morgan Stanley's World ex-U.S. Index. In 1995, the Fund
outperformed the index during the second quarter after underperforming in the
first quarter, when allocations to the emerging markets held back performance
and stock selection in Europe detracted from performance. The European part of
the portfolio had difficulty because of a combination of exposures to poorly
performing cyclical stocks and French insurers and being overweighted in Spain.
Additionally, the underweight position in the Swiss franc, the best performing
currency in Europe, detracted significantly from results in the first quarter.
In the second quarter, performance was augmented by being underexposed to the
poorly performing Japanese market and having moved to an overweighted
positioning in Southeast Asia during April, in particular the Hong Kong market.
Stock selection also helped to add posi-
1
ALLIANCE INTERNATIONAL FUND
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tively to performance as both the Japanese and European positions outperformed
their respective local regional indices. A negative contributor to performance
during the second quarter was having initiated currency hedges in April versus
the German mark, Belgian franc, Swiss franc, French franc and British pound.
Since the dollar immediately weakened, these positions produced losses.
MARKETS SHOULD PICK UP IN THE SECOND HALF
As we enter the third quarter of 1995, the economic environment for financial
market investing remains friendly since growth is gradually slowing worldwide,
inflation has peaked, and interest rates globally are trending lower. Despite
strong market performances earlier in the year, valuations are not excessive
and we continue to find compelling areas for stock investing. As growth is
slowing, stock selection will be critical since the earnings of many companies
will be at risk. Fortunately, falling inflation and interest rates should
provide further support to valuation levels.
After the sharp fall witnessed this year, we believe that downside risk in the
Japanese equity market is minimal. Longer term, we are concerned about the
economy's structural problems. The financial system needs a complete
restructuring which has only just begun. Companies still need to cut costs and
adjust to deregulation, competition, and the severe deflationary environment.
However, all of these issues are well known. Near term, the market appears
oversold, valuations are intriguing relative to history, and our research
analysts are identifying attractive stocks. Consequently, during the second
quarter, we reduced the extent of the portfolio's underexposure to Japan. We
continue to look for opportunities to add to the Fund's positions in Japan.
In Europe, real rates are high in the core European countries and are likely to
fall somewhat in the year ahead. More importantly, the most attractive stock
valuations in the world are in countries such as France, the United Kingdom,
the Netherlands, and among the smaller German and Swiss companies.
Consequently, portfolios are modestly overweighted in the European countries.
We are selectively adding to stocks in the emerging markets as stable or lower
U.S. interest rates should help these markets outperform.
In July, our currency models indicated that the dollar was undervalued versus
the Japanese yen, so we hedged 10% of the portfolio's yen exposure. This is in
addition to the hedges we initiated in April versus the British pound, Swiss
franc, Belgian franc, French franc and German mark. Approximately 15% of the
portfolio's European exposure is hedged.
Thank you for your continued interest and investment in Alliance International
Fund. We look forward to reporting its progress to you at year end.
Sincerely,
John D. Carifa
Chairman and President
A. Rama Krishna
Senior Vice President
2
INVESTMENT RESULTS ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF JUNE 30, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
---------------------------
. One Year +0.59% -3.71%
. Five Years +2.23% +1.34%
. Ten Years +14.12 +13.63
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
---------------------------
. One Year -0.22% -3.84%
. Since Inception* +4.68 +4.68
CLASS C SHARES
. One Year -0.22%
. Since Inception* +7.10
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
Class C shares are not subject to front-end or contingent deferred sales
charges. Past performance does not guarantee future results. Investment return
and principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
* Inception: 9/17/90, Class B; 5/3/93, Class C.
3
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL FUND
GROWTH OF A $10,000 INVESTMENT:
6/30/85 TO 6/30/95
This chart illustrates the total value of an assumed investment in Alliance
International Fund Class A shares after deducting the maximum 4.25% sales
charge, and with dividends and capital gains reinvested. Performance for Class
B and Class C shares will vary from the results shown above due to differences
in expenses charged to those classes. Past performance is not indicative of
future results, and is not representative of future gain or loss in capital
value or dividend income.
The Morgan Stanley Capital International World ex-U.S. Index is an unmanaged
index that measures the overall performance of stock markets in 21 countries
around the world, excluding the United States.
The Lipper International Funds Average reflects performance of 244 funds, only
19 of which have existed for the full ten-year period. These funds have
generally similar investment objectives to Alliance International Fund,
although some funds included in the average may have somewhat different
investment policies.
When comparing Alliance International Fund to the index and the average shown
above, you should note that the Fund's performance reflects the maximum sales
charge of 4.25% while no such charges are reflected in the performance of the
index or average.
4
TEN LARGEST HOLDINGS
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
PERCENT
OF NET
COMPANY U.S. $VALUE ASSETS
- -------------------------------------------------------------------------------
Rohm Co.-Manufacturers of semiconductors $ 4,030,913 1.7%
AB Astra Series A-World's fastest growing
pharmaceutical company 3,672,091 1.6
Fortis Amev N.V.-Provides banking, insurance and
other financial services 3,573,273 1.5
Sumitomo Bank, Ltd.-Large Japanese city bank 3,451,478 1.5
Fuji Photo Film Co.-Top maker of photosensitive materials 2,940,711 1.3
Nintendo Corp., Ltd.-Manufactures & markets video games 2,907,463 1.2
Toyota Motor Corp.-One of world's big three auto makers 2,775,058 1.2
Tokio Marine & Fire Insurance Co., Ltd.-Writes marine,
fire & casualty, automobile & allied lines of insurance 2,695,062 1.1
Deutsche Bank A.G.-Provides comprehensive
banking & related financial services 2,638,724 1.1
B.A.T. Industries Plc.-Manufactures tobacco products and
provides financial services through its eight principal
operating companies 2,496,980 1.1
$31,181,753 13.3%
5
DISTRIBUTION OF PORTFOLIO BY COUNTRY
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
PERCENT OF PORTFOLIO*
- --------------------------------------------------
Japan 35.4%
United Kingdom 15.0
France 8.9
Germany 6.3
Hong Kong 5.0
Netherlands 4.5
Spain 3.3
Switzerland 3.0
Sweden 2.7
Finland 2.1
Malaysia 2.0
Singapore 1.9
Italy 1.4
Belgium 1.3
Australia 1.2
Norway 1.2
Denmark 1.1
New Zealand 0.8
Indonesia 0.8
Mexico 0.4
Thailand 0.3
Brazil 0.3
Canada 0.3
Taiwan 0.2
Philippines 0.2
Portugal 0.2
India 0.1
Korea 0.1
100.0%
* Excludes short-term obligations.
6
INDUSTRY DIVERSIFICATION
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
U.S. $ VALUE PERCENT OF NET ASSETS
- ------------------------------------------------------------------------------
Banking $10,418,989 4.4%
Basic Industries 15,171,421 6.5
Capital Goods 14,711,687 6.3
Consumer Manufacturing 22,377,998 9.6
Consumer Services 32,953,819 14.1
Consumer Staples 29,592,688 12.6
Energy 4,052,149 1.7
Finance 43,919,449 18.8
Healthcare 8,586,492 3.7
Insurance 2,187,853 0.9
Multi Industry 5,103,128 2.2
Technology 10,560,877 4.5
Transportation 4,405,005 1.9
Utilities 19,618,214 8.4
Other 2,304,584 1.0
Total Investments* 225,964,353 96.6
Cash and receivables, net of liabilities 8,008,124 3.4
Net Assets $233,972,477 100.0%
* Excludes short-term obligations.
7
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S.$ VALUE
- ----------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-96.6%
AUSTRALIA-1.2%
Australia & New Zealand Bank Group, Ltd. 11,996 $ 42,631
Coca-Cola Amatil, Ltd. 140,906 871,296
new shares 35,226 175,258
Mayne Nickless, Ltd 258,053 1,065,619
Pacific Dunlop, Ltd 264,000 555,409
2,710,213
BELGIUM-1.3%
Arbed, S.A.* 8,700 1,254,141
Kredietbank, N.V.(c) 7,500 1,782,590
3,036,731
BRAZIL-0.3%
Panamerican Beverages, Inc. Cl.A 10,000 300,000
Usiminas, S.A.(b) 30,000 330,000
630,000
CANADA-0.3%
Imasco, Ltd. 1 18
Renaissance Energy, Ltd.* 33,000 681,818
Rogers Communications, Inc.* 8,900 104,498
786,334
DENMARK-1.0%
Den Danske Bank International, S.A. 38,200 2,398,835
FINLAND-2.0%
Metsa-Serla Oy 32,000 1,424,499
Nokia Corp. pfd. 34,120 1,998,516
Unitas Bank, Ltd. Cl. A.* 395,295 1,278,083
4,701,098
FRANCE-8.6%
Assurance Generale de France(c) 68,300 2,187,853
Banque Nationale de Paris*(c) 40,300 1,943,870
Bouygues, S.A. 13,900 1,664,705
Casino Guichard Perrachon 23,900 697,109
CIE Frananciere de Paribas, S.A.(c) 29,853 1,794,411
new shares 1,302 75,040
Generale des Eaux(c) 17,210 1,915,671
Gruope Danone 8,500 1,429,735
new shares 190 31,332
Klepierre 1,530 185,445
Pechiney, S.A. 19,000 1,095,450
Salomon, S.A. 3,190 1,443,350
SEITA 55,500 1,668,003
SIMCO Union Habit 6,410 556,271
Societe Francaise d'Investissements
Immobiliers et de Gestion 8,420 560,610
Total, S.A. (ADR) 36,560 1,105,940
Cl. B 8,200 493,564
new shares 201 11,767
Unibail 12,160 1,188,114
20,048,240
GERMANY-6.1%
Bayer A.G. 9,650 2,400,550
Deutsche Bank A.G.(c) 54,300 2,638,724
Deutsche Lufthansa
A.G.*(c) 8,500 1,229,345
Henkel KGaA 4,800 1,850,092
Klein, Schanz & Beck 2,200 477,275
pfd. 4,397 779,018
Suedzucker A.G.(c) 2,601 1,519,766
Veba A.G.(c) 6,000 2,358,173
Volkswagen A.G. 3,540 1,022,692
14,275,635
HONG KONG-4.8%
Cheung Kong Hldgs., Ltd 307,000 1,523,534
Citic Pacific, Ltd 372,000 932,668
Dao Heng Bank Group, Ltd 99,000 301,946
Hong Kong & China Gas Co., Ltd 692,800 1,105,751
Hopewell Holdings, Ltd 1,618,000 1,380,082
8
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S.$ VALUE
- ----------------------------------------------------------------------
Hysan Development Co, Ltd. 278,000 $ 635,917
Johnson Electric Holdings, Ltd 324,000 653,209
New World Development Co., Ltd 478,586 1,592,648
Peregrine Investment Holdings, Ltd 424,000 602,755
Sun Hung Kai Properties, Ltd 192,000 1,420,559
Television Broadcasts, Ltd. 220,000 773,346
Yizheng Chemical Fibre Co., Ltd 915,000 319,277
11,241,692
INDIA-0.1%
Bajaj Auto, Ltd. (GDR)(b) 7,400 202,390
INDONESIA-0.8%
PT H.M. Sampoerna 209,000 1,642,344
PT Indosat* 71,000 269,398
1,911,742
ITALY-1.4%
La Rinascente S.p.A 261,100 1,484,785
Telecom Italia S.p.A 204,600 555,145
Telecom Italia S.p.A-Di Risp 570,000 1,206,586
3,246,516
JAPAN-34.3%
Advantest Corp. 12,000 453,071
Amano Corp. 67,000 790,514
Asahi Bank, Ltd.* 144,000 1,537,608
Bank of Tokyo, Ltd. 79,000 1,267,654
Canon Sales 17,000 471,359
Chiba Bank 55,000 499,676
DDI Corp. 4 32,093
Daifuku 55,000 615,834
Dai Nippon Printing Co., Ltd 70,000 1,114,978
Daito Trust Construction Co 10,800 101,941
Daiwa Securities Co., Ltd 31,000 326,990
East Japan Railway Co. 301 1,544,865
Fuji Photo Film Co.(c) 124,000 2,940,711
Heiwa Corp.(c) 97,000 2,208,837
Hitachi Metals, Ltd. 125,000 1,246,239
House Food Corp. 52,000 1,092,089
Ito-Yokado Co., Ltd. 26,000 1,371,247
Kamigumi Co., Ltd. 43,000 431,243
Kandenko Co., Ltd. 60,000 821,190
Kao Corp. 125,000 1,504,336
Kirin Brewery Co., Ltd. 84,000 891,983
Kokuyo Co. 17,000 381,098
Komatsu, Ltd.* 79,000 603,068
Kuraray Co., Ltd. 215,000 2,336,322
Kurita Water Industries 36,000 925,963
Kyocera Corp. 21,000 1,729,455
Maeda Road Construction Corp. 22,000 425,698
Marui Co., Ltd. 55,000 876,055
Matsushita Electric Works 143,000 1,542,116
Matushita Electric Industrial Co., Ltd 118,000 1,837,768
Mitsubishi Heavy Industries, Ltd. 132,000 897,080
Mitsubishi Materials Corp. 87,000 390,065
Mitsui Marine & Fire Insurance Co. 133,000 872,491
Mitsui Trust & Banking Co., Ltd. 221,000 2,033,862
Mori Seiki Co. 24,000 427,585
NGK Insulators 44,000 399,221
NGK Spark Plug Co. 22,000 243,997
National House Industrial 38,000 703,911
Nikko Securitids Co. 81,000 657,519
Nintendo Corp., Ltd.(c) 50,600 2,907,463
Nippon Electric Glass Co., Ltd. 2,800 44,930
Nippon Express Co., Ltd. 153,000 1,408,059
Nippon Steel Co.* 229,000 745,726
Nippon Telegraph & Telephone Corp. 212 1,775,942
Nomura Securities Co., Ltd 86,000 1,501,740
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S.$ VALUE
- ----------------------------------------------------------------------
Osaka Gas Co. 250,000 $ 923,249
Rohm Co.(c) 78,000 4,030,913
Santen Pharmaceutical Co. 11,000 293,316
Sanyo Electric Co., Ltd 93,000 457,566
Seven-Eleven Japan Co., Ltd.(c) 34,700 2,485,151
Shimizu Corp. 81,000 783,671
Shin-Etsu Chemical Co. 22,000 386,762
Sumitomo Bank, Ltd.(c) 199,000 3,451,478
Sumitomo Electric Industries 67,000 798,419
Sumitomo Marine & Fire Insurance 102,000 809,935
Sumitomo Realty and Development Co., Ltd. 132,000 788,060
Taisho Pharmaceutical Co., Ltd 22,000 425,698
Takara Shuzo Co. 121,000 915,120
Takeda Chemical Industries 61,000 806,088
Tokai Bank 76,000 842,900
Tokio Marine & Fire Insurance Co., Ltd.(c) 235,000 2,695,062
Tokyo Electric Power Co., Ltd 46,000 1,411,126
Tokyo Electron, Ltd. 47,000 1,608,165
Tokyo Gas Co., Ltd 412,000 1,623,597
Tokyo Kanetsu 77,000 325,243
Tokyo Steel Mfg. Co. 23,000 393,487
Tostem Corp. 21,000 646,688
Toyota Motor Corp.*(c) 140,000 2,775,058
UBE Industries, Ltd.* 77,000 268,916
Yakult Honsha Co. 57,000 827,208
Yamanouchi Pharmaceutical Co., Ltd. 67,000 1,509,881
Yamazaki Baking Co., Ltd. 41,000 841,720
80,056,069
KOREA-0.1%
Korea Mobile Telecom (GDS) 3,400 121,550
MALAYSIA-1.9%
Aokam Perdana Berhard 131,000 1,558,244
DCB Holdings Berhad 82,250 94,463
Rashid Hussain Berhard 89,000 284,742
Resorts World Berhad 184,000 1,079,245
Telekom Malaysia 184,000 1,396,226
4,412,920
MEXICO-0.3%
Grupo Financiero
Bancomer, S.A. de C.V. Cl.C 25,933 6,846
Series B 700,200 205,019
Telefonos De Mexico, S.A. (ADR) Cl.L 19,700 583,613
795,478
NETHERLANDS-4.0%
D.S.M. N.V. 12,200 1,051,500
Elsevier N.V. 117,700 1,390,579
Fortis Amev N.V. 65,500 3,573,273
Heineken N.V. 12,025 1,820,523
International Nederlanden Groep N.V. 29,300 1,621,126
9,457,001
NEW ZEALAND-0.8%
Lion Nathan, Ltd. 335,000 662,934
Telecom Corp. of New Zealand 338,100 1,265,806
1,928,740
NORWAY-1.1%
Bergesen D.Y. AS 59,100 1,342,600
Christiana Bank OG 560,000 1,299,437
2,642,037
PHILIPPINES-0.2%
Manila Electric Co.Cl.B 61,000 489,624
PORTUGAL-0.2%
Portucel Industrial Empresa 65,000 464,817
10
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S.$ VALUE
- ----------------------------------------------------------------------
SINGAPORE-1.8%
First Capital Corp., Ltd. 17,000 $ 52,551
Fraser & Neave 99,000 1,140,537
Oversea-Chinese Banking Corp.,Ltd 67,000 743,113
Overseas Union Bank, Ltd 170,000 1,070,483
Sembawang Corp., Ltd. 18,000 109,481
Singapore Press Hldgs., Ltd 78,000 1,166,512
4,282,677
SPAIN-3.2%
Banco IntercontinentalEspanol 16,400 1,476,435
Corporacion Bancaria de Espana, S.A. 18,000 665,288
Iberdrola, S.A.* 131,000 986,757
Repsol, S.A. 55,900 1,759,060
Tabacalera, S.A. Series A 38,365 1,435,415
Unidad Editorial, S.A.(a) 297,500 350,659
Uralita, S.A. 68,785 829,451
7,503,065
SWEDEN-2.6%
AB Astra Series A 119,100 3,672,091
Hennes & Mauritz AB
Marieberg Tidings Series A 44,500 928,943
SKF International AB Series A* 7,300 146,373
Stora Kopparbergs Series B 98,500 1,332,471
6,079,878
SWITZERLAND-2.9%
BBC Brown Boveri A.G. 1,040 1,076,578
Ciba-Geigy A.G.(c) 2,580 1,891,029
Electrowatt A.G. 2,290 658,263
Forbo Holdings A.G. 2,440 1,190,864
Nestle, S.A.(c) 1,804 1,877,375
6,694,109
THAILAND-0.3%
Bangkok Bank Co., Ltd. 56,000 617,055
Phatra Thanakit 15,000 125,177
742,232
UNITED KINGDOM-14.5%
Allied Radio Plc.* 1,825,950 65,366
Argos Plc. 168,600 1,158,844
B.A.T. Industries Plc.(c) 325,600 2,496,980
Berkley Group Plc. 118,700 671,389
BOC Group Plc. 40,000 511,045
British Airways Plc. 226,200 1,482,769
British Land Co. Plc. 150,000 953,436
British Telecommunications Plc. 165,000 1,029,091
Dixons Group Plc. 388,250 1,581,376
Forte Plc. 463,900 1,679,150
General Electric Plc. 337,000 1,646,084
Grand Metropolitan Plc. 273,000 1,674,444
Hepworth Plc. 224,000 1,003,252
Johnson Matthey Plc. 131,600 1,201,853
Marley Plc. 356,200 654,575
Meyer International Plc. 93,000 460,919
Mowlen (John) & Co. Plc. 864,000 948,520
Queens Moat Houses Plc.* 50,000 7,955
Royal Bank of Scotland Group Plc.(c) 357,000 2,428,220
Rugby Group Plc. 259,200 437,144
Smithkline Beecham Cl.A 207,600 1,879,418
Thorn EMI Plc.(c) 97,000 2,009,400
Unilever Plc.(c) 110,000 2,227,071
Vodafone Group Plc.(c) 596,800 2,217,172
Wimpey (George) Plc.(c) 1,292,100 2,343,606
W.H. Smith Group Plc. 204,500 1,060,705
33,829,784
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S.$ VALUE
- -----------------------------------------------------------------------
OTHER-0.5%
Asesores Bursatiles Capital Fund N.V.*(a) 25 $ 708,981
CLM Insurance Fund Plc.* 123,000 172,215
Taiwan Fund, Inc. 18,000 393,750
Touche Remnant Ecotec Environmental Fund*(a) 1 -0-
1,274,946
Total Common Stocks & Other Investments
(cost $217,085,662) 225,964,353
PRINCIPAL
AMOUNT
COMPANY (000) U.S.$ VALUE
- ----------------------------------------------------------------------
TIME DEPOSIT-1.3%
Sumitomo Bank
6.3125%, 7/03/95
(cost $3,000,000) US$ 3,000 $ 3,000,000
TOTAL INVESTMENTS-97.9%
(cost $220,085,662) 228,964,353
Other assets less liabilities-2.1% 5,008,124
NET ASSETS-100% $233,972,477
* Non-income producing security.
(a) Illiquid security, valued at fair value (see Notes A and F).
(b) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30, 1995
these securities amounted to $532,390 or 0.23% of net assets.
(c) Securities with an aggregate market value of $58,355,929 segregated to
collateralize forward exchange currency contracts.
Glossary of Terms:
ADR - American depository receipt
GDR - Global depository receipt
GDS - Global depository security
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
ASSETS
Investments in securities, at value (cost $220,085,662) $228,964,353
Cash, at value (cost $3,245,700) 3,251,186
Receivable for investment securities sold 9,730,034
Dividends and interest receivable 955,097
Receivable for shares of beneficial interest sold 309,509
Foreign taxes receivable and other assets 385,752
Total assets 243,595,931
LIABILITIES
Payable for investment securities purchased 7,065,921
Unrealized depreciation of forward exchange currency contracts 820,653
Advisory fee payable 584,931
Payable for shares of beneficial interest redeemed 406,645
Distribution fee payable 81,336
Accrued expenses 663,968
Total liabilities 9,623,454
NET ASSETS $233,972,477
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 140,733
Additional paid-in capital 217,119,669
Accumulated net investment loss (1,111,732)
Accumulated net realized gain on investments and foreign
currency transactions 9,720,703
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 8,103,104
$233,972,477
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($165,580,342/
9,849,363 shares of beneficial interest issued and outstanding) $16.81
Sales charge-4.25% of public offering price .75
Maximum offering price $17.56
CLASS B SHARES
Net asset value and offering price per share ($48,997,443/
3,026,512 shares of beneficial interest issued and outstanding) $16.19
CLASS C SHARES
Net asset value, redemption and offering price per share($19,394,692
/1,197,376 shares of beneficial interest issued and outstanding) $16.20
See notes to financial statements.
13
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $516,127) $4,321,615
Interest 634,177 $4,955,792
EXPENSES
Advisory fee 2,524,729
Distribution fee-Class A 333,671
Distribution fee-Class B 441,073
Distribution fee-Class C 246,454
Custodian 497,877
Transfer agency 478,620
Administrative 135,604
Audit and legal 105,642
Registration 53,702
Printing 52,883
Trustees' fees 36,028
Miscellaneous 58,224
Total expenses 4,964,507
Net investment loss (8,715)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 21,244,929
Net realized loss on foreign currency transactions (1,551,380)
Net change in unrealized appreciation (depreciation) of:
Investments (20,237,245)
Foreign currency denominated assets and liabilities (421,161)
Net loss on investments and foreign currency transactions (964,857)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(973,572)
See notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1995 1994
------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (8,715) $(1,189,227)
Net realized gain on investments and
foreign currency transactions 19,693,549 25,178,246
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (20,658,406) 9,924,850
Net increase (decrease) in net assets from
operations (973,572) 33,913,869
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments and
foreign currency transactions
Class A (15,878,472) (5,633,699)
Class B (4,457,892) (427,595)
Class C (2,832,662) (193,466)
CAPITAL TRANSACTIONS
Net increase 12,753,910 50,062,493
Total increase (decrease) (11,388,688) 77,721,602
NET ASSETS
Beginning of year 245,361,165 167,639,563
End of year $233,972,477 $245,361,165
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance International Fund (the 'Fund'), which is a Massachusetts business
trust, is registered under the Investment Company Act of 1940, as a
diversified, open-end management investment company. The Fund offers Class A,
Class B and Class C shares. Class A shares are sold with a front-end sales
charge of up to 4.25%. Class B shares are sold with a contingent deferred sales
charge which declines from 4% to zero depending on the period of time the
shares are held. Class B shares will automatically convert to Class A shares
eight years after the end of the calendar month of purchase. Class C shares are
sold without an initial or contingent deferred sales charge. All three classes
of shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a United States or European stock exchange for
which market quotations are readily available are valued at the last quoted
sales price on that exchange prior to the time when assets are valued.
Securities listed or traded on certain foreign exchanges whose operations are
similar to the U.S. over-the-counter market are valued at the price within the
limits of the latest available current bid and asked price deemed best to
reflect fair value. Securities which mature in 60 days or less are valued at
amortized cost which approximates market value. Illiquid securities are valued
at fair value as determined by the Board of Trustees. In determining fair
value, consideration is given to cost, operating and other financial data.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized foreign exchange losses of $1,551,380 represent foreign exchange
gains and losses from sales and maturities of debt securities, holding of
foreign currencies, exchange gains and losses realized between the trade and
settlement dates on security transactions, and the difference between the
amounts of dividends, interest and foreign taxes receivable recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net currency gains and losses from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a
component of net unrealized appreciation of investments and foreign currency
denominated assets and liabilities.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
16
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement, the Fund pays its Adviser, Alliance
Capital Management, L.P., (the "Adviser"), a fee at a quarterly rate equal to
1/4 of 1% (approximately 1% on an annual basis) of quarter end net assets up to
$500 million and 3/16 of 1% (approximately .75% on an annual basis) of quarter
end net assets in excess of $500 million. The Adviser has agreed, under the
terms of the advisory agreement, to reimburse the Fund to the extent that its
aggregate expenses (exclusive of interest, taxes, brokerage, distribution fees,
extraordinary expenses and certain other expenses) exceed the limits prescribed
by any state in which the Fund's shares are qualified for sale. The Fund
believes that the most restrictive expense ratio limitation currently imposed
by any state is 2.5% of the first $30 million of the Fund's average daily net
assets, 2% of the next $70 million of its average daily net assets and 1.5% of
its average daily net assets in excess of $100 million. For the year ended June
30, 1995, no such reimbursement was required. Pursuant to the advisory
agreement, the Fund paid $135,604 to the Adviser representing the cost of
certain legal and accounting services provided to the Fund by the Adviser for
the year ended June 30, 1995.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $355,426 for the year ended June 30, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $16,704 from the sale of Class A shares and $210,008
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B for the year ended June 30, 1995. Brokerage commissions paid on
securities transactions for the year ended June 30, 1995, amounted to
$1,381,789, 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, nor 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 a distribution fee to the Distributor at an annual rate
of up to .30 of 1% of the average daily net assets attributable to the Class A
shares and 1% of the average daily net assets attributable to the Class B and
Class C 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
incurred expenses in excess of the distribution costs reimbursed by the Fund in
the amount of $1,672,131 and $455,492, 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)
aggregated $285,030,757 and $295,643,776, respectively, for the year ended June
30, 1995. There were no purchases or sales of U.S. Government and government
agency obligations for the year ended June 30, 1995.
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward exchange currency contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the original contracts and the
closing
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
of such contracts is included in net realized gain or loss from foreign
currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as net change in unrealized appreciation
(depreciation) of foreign currency denominated assets and liabilities.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
At June 30, 1995, the Fund had outstanding forward exchange currency contracts,
as follows:
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
FOREIGN CURRENCY BUY CONTRACTS (000) DATE VALUE (DEPRECIATION)
- ------------------------------ ----------- ---------- ---------- ----------
Australian Dollars,
expiring 7/31/95 5,500,000 $3,958,075 $3,904,927 $(53,148)
Belgian Francs,
expiring 9/29/95 20,880,000 728,669 735,883 7,214
British Pounds,
expiring 8/31/95 2,300,000 3,673,962 3,656,309 (17,653)
Deutsche Marks,
expiring 8/31/95 8,600,000 6,218,332 6,227,385 9,053
French Francs, expiring 8/31/95 10,200,000 2,105,393 2,102,551 (2,842)
FOREIGN CURRENCY SALE CONTRACTS
- -------------------------------
Australian Dollars,
expiring 7/31/95 5,500,000 3,995,200 3,902,733 92,467
Belgian Francs,
expiring 9/29/95 99,650,000 3,510,966 3,503,803 7,163
British Pounds,
expiring 8/31/95-9/29/95 4,500,000 7,065,875 7,148,030 (82,155)
Deutsche Marks,
expiring 8/31/95 8,600,000 5,953,617 6,227,326 (273,709)
French Francs, expiring 8/31/95 30,700,000 5,996,094 6,321,221 (325,127)
Swiss Francs, expiring 8/31/95 7,500,000 6,358,585 6,540,501 (181,916)
$(820,653)
At June 30, 1995, the cost of investments for federal income tax purposes was
$220,367,994. Accordingly, gross unrealized appreciation of investments was
$16,291,336 and gross unrealized depreciation of investments was $7,694,977,
resulting in net unrealized appreciation of $8,596,359.
18
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $.01 par value shares of beneficial interest
authorized, divided into three classes, designated Class A, Class B and Class C
shares. Transactions in shares of beneficial interest were as follows:
SHARES AMOUNT
------------------------ ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
----------- ----------- ------------- ------------
CLASS A
Shares sold 2,705,822 2,597,434 $47,501,995 $45,812,612
Shares issued in
reinvestment of
distributions 926,842 328,484 15,032,351 5,442,987
Shares issued in
connection with the
acquisition of the
Canadian Fund -0- 747,660 -0- 12,699,508
Shares redeemed (4,770,741) (2,744,645) (83,532,846) (48,609,413)
Net increase (decrease) (1,138,077) 928,933 $(20,998,500) $15,345,694
CLASS B
Shares sold 2,388,681 1,519,137 $40,924,713 $26,354,439
Shares issued in
reinvestment of
distributions 246,119 24,318 3,861,611 394,438
Shares redeemed (1,280,863) (275,243) (20,826,680) (4,795,788)
Net increase 1,353,937 1,268,212 $23,959,644 $21,953,089
CLASS C
Shares sold 2,500,356 1,157,061 $42,839,538 $20,136,268
Shares issued in
reinvestment of
distributions 171,490 11,110 2,692,396 180,098
Shares redeemed (2,228,318) (428,880) (35,739,168) (7,552,656)
Net increase 443,528 739,291 $9,792,766 $12,763,710
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
NOTE F: ILLIQUID SECURITIES
DATE
SECURITY ACQUIRED U.S. $ COST
- -------- -------- -----------
Asesores Bursatiles Capital Fund N.V. 10/29/90 $1,113,819
Touche Remnant Ecotec Environmental Fund 6/28/90 247,179
Unidad Editorial, S.A. 1/20/92 369,591
The securities shown are illiquid and have been valued at fair value in
accordance with procedures described in Note A. The value of these securities
at June 30, 1995 was $1,059,640 representing 0.5% of net assets. During the
month of March 1994, the Board of Trustees determined that Touche Remnant
Ecotec Environmental Fund ("T R Ecotec") should be valued at zero to reflect
current fair value. This decision was based on notification from the investment
advisor of T R Ecotec of the company's termination and future liquidation.
NOTE G: ACQUISITION OF THE CANADIAN FUND
On March 25, 1994, the Fund acquired all the net assets of the Canadian Fund,
the sole series of Alliance Global Fund (the "Trust") pursuant to a plan of
reorganization approved by the Canadian Fund shareholders on March 18, 1994.
The acquisition was accomplished by a tax-free exchange of 747,660 shares of
the Fund for 2,321,131 shares of Canadian Fund on March 25, 1994. The aggregate
net assets of the Fund and Canadian Fund immediately before the acquisition
were $215,961,187 and $13,317,340 (including unrealized appreciation of
$7,351,031), respectively. Immediately after the acquisition the combined net
assets of the Fund amounted to $229,278,527.
NOTE H: FOREIGN TAX CREDIT (UNAUDITED)
The Fund has elected to give the benefit to its shareholders of foreign taxes
that have been paid and/or withheld. For the fiscal year ended June 30, 1995,
this amounted to $516,127. Although the Fund has made the election required to
make this credit available, the amount of allowable tax credit is subject to
limitations under the Internal Revenue Code.
A notification reflecting the per share amount to be used by taxpayers on their
federal income tax return will be mailed to shareholders in January 1996.
20
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------
YEAR ENDED JUNE 30,
--------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $18.38 $16.01 $14.98 $14.00 $17.99
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .04 (.09) (.01) .01(b) .05
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .01 3.02 1.17 1.04 (3.54)
Net increase (decrease) in net asset
value from operations .05 2.93 1.16 1.05 (3.49)
LESS: DISTRIBUTIONS
Dividends from net investment income -0- -0- (.04) (.07) (.03)
Distributions from net realized gains
on investments and foreign currency
transactions (1.62) (.56) (.09) -0- (.47)
Total distributions (1.62) (.56) (.13) (.07) (.50)
Net asset value, end of year $16.81 $18.38 $16.01 $14.98 $14.00
TOTAL RETURN
Total investment return based on net
asset value (c) .59% 18.68% 7.86% 7.52% (19.34)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $165,584 $201,916 $161,048 $179,807 $214,442
Ratio of expenses to average net assets 1.73% 1.90% 1.88% 1.82% 1.73%
Ratio of net investment income (loss)
to average net assets .26% (.50)% (.14)% .07% .37%
Portfolio turnover rate 119% 97% 94% 72% 71%
</TABLE>
See footnote summary on page 23.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
SEPTEMBER 17,
YEAR ENDED JUNE 30, 1990 (A)
-------------------------------------------------- TO
1995 1994 1993 1992 JUNE 30,1991
--------- ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.90 $15.74 $14.81 $13.93 $15.52
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.01) (.19)(b) (.12) (.11)(b) .03
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.08) 2.91 1.14 1.02 (1.12)
Net increase (decrease) in net asset
value from operations (.09) 2.72 1.02 .91 (1.09)
LESS: DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- (.03) (.03)
Distributions from net realized gains
on investments and foreign currency
transactions (1.62) (.56) (.09) -0- (.47)
Total distributions (1.62) (.56) (.09) (.03) (.50)
Net asset value, end of period $16.19 $17.90 $15.74 $14.81 $13.93
TOTAL RETURN
Total investment return based on net
asset value (c) (.22)% 17.65% 6.98% 6.54% (6.97)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $48,998 $29,943 $6,363 $5,585 $3,515
Ratio of expenses to average net assets 2.57% 2.78% 2.70% 2.68% 3.39%(d)
Ratio of net investment income (loss)
to average net assets (.62)% (1.15)% (.96)% (.70)% .84%(d)
Portfolio turnover rate 119% 97% 94% 72% 71%
</TABLE>
See footnote summary on page 23.
22
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
CLASS C
----------------------------------
YEAR ENDED JUNE 30, MAY 3,1993(A)
-------------------- TO
1995 1994 JUNE 30,1993
-------- ---------- ------------
Net asset value, beginning of period $17.91 $15.74 $15.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.14) (.11) -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .05 2.84 (.19)
Net increase (decrease) in net asset
value from operations (.09) 2.73 (.19)
LESS: DISTRIBUTIONS
Distributions from net realized gains
on investments and foreign currency
transactions (1.62) (.56) -0-
Total distributions (1.62) (.56) -0-
Net asset value, end of period $16.20 $17.91 $15.74
TOTAL RETURN
Total investment return based on net
asset value (c) (.22)% 17.72% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $19,395 $13,503 $229
Ratio of expenses to average net assets 2.54% 2.78% 2.57%(d)
Ratio of net investment income (loss)
to average net assets (.88)% (1.12)% .08%(d)
Portfolio turnover rate 119% 97% 94%
(a) Commencement of distribution.
(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 for a period of less than one year is not
annualized.
(d) Annualized.
23
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES ALLIANCE INTERNATIONAL FUND
We have audited the accompanying statement of assets and liabilities of
Alliance International Fund, including the portfolio of investments, as of June
30, 1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance International Fund at June 30, 1995, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the indicated
periods, in conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
August 11, 1995
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the fiscal year ended June 30, 1995, the Fund paid on Class A, Class B,
and Class C shares long-term capital gains of $.07.
24
ALLIANCE INTERNATIONAL FUND
- -------------------------------------------------------------------------------
TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER
JOHN H. DOBKIN
W.H. HENDERSON
STIG HOST
RICHARD M. LILLY
ALAN STOGA
JOHN C. WEST
ROBERT C. WHITE
OFFICERS
A. RAMA KRISHNA, SENIOR VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
KELLY A. MORGAN, VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
NICHOLAS E. CROSSLAND, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
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
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
25
ALLIANCE INTERNATIONAL FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
INTAR
