<PAGE>
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
February 13, 1995
Dear Shareholder:
The tone for financial market performance in 1994 was set in mid-January when
the U.S. Federal Reserve Board increased interest rates anticipating rising
inflation. In addition, during 1994, the European and Japanese economies emerged
from recession and began to recover earlier and stronger than originally
anticipated. Consequently, the cycle of declining interest rates enjoyed by
investors around the globe for many years came to an end. Most financial markets
responded accordingly with European markets down 9% in local currency terms, and
emerging economies, such as Hong Kong, down 29%.
INTERNATIONAL MARKET PERFORMANCE LED BY JAPAN
The Japanese market was the one exception among the large equity markets
worldwide, up about 8% in local currency terms. Japanese companies, particularly
in the technology sector, benefiting from the strong cyclical and secular trends
occurring within their businesses, reported earnings exceeding consensus
expectations. Overall, the emerging markets disappointed investors, falling 9%
after 1993's extraordinary returns. Rising interest rates triggered by the
actions of the U.S. Federal Reserve and severe currency devaluations in Turkey,
Venezuela, and recently Mexico caused the turmoil and losses.
Currency markets were extremely volatile. Despite rising U.S. interest rates,
the Japanese yen and European currencies appreciated 12% and 9%, respectively,
versus the U.S. dollar. Investors liquidated North American assets and sought
higher returns overseas, pushing the U.S. dollar downward. On the other hand,
the currencies of many emerging economies came under severe pressure versus the
U.S. dollar because of unsustainable imbalances within their economies. The
Mexican peso fell 38%, and the Turkish lira and Venezuelan peso lost 61% and
38%, respectively.
INVESTMENT PERFORMANCE
Asset allocation and currency management were fairly neutral in 1994. Although
the portfolio was correctly overweighted in Japan and underweighted in Southeast
Asia, allocations to the emerging markets detracted from results. Currency
management was neutral since the portfolio was unhedged for the majority of the
year. During the last six months of 1994 the Fund gave up some of its gains from
the first half of the year. Overall performance for calendar year 1994 was
positive, however, and was driven by stock selection, particularly within the
European part of the portfolio. Holdings such as Nokia (+142%), the Finnish
producer of mobile telephones; Hennes & Mauritz (+49%), the Swedish low price,
growth retailer; and Heineken (+22%), the global brewing giant based in the
Netherlands, led the strong performance in Europe.
The following table compares Alliance International Fund's total returns with
that of its benchmark, represented by the unmanaged Morgan Stanley Capital
International World Index excluding the U.S., and with the overall U.S. stock
market, represented by the unmanaged S&P 500-stock Index:
<TABLE>
<CAPTION>
TOTAL RETURN ENDING NAV
------------ ----------
SIX MONTHS
ENDED DECEMBER 31, 1994
------------------------------
<S> <C> <C>
Alliance International Fund
Class A -1.57% $16.45
Class B -1.94% $15.91
Class C -1.94% $15.92
MSCI World Index
(-U.S.) -0.48%
S&P 500 +4.87%
</TABLE>
The Fund's total returns are based on the net asset values as of December 31,
1994. Additional investment results for your Fund appear on page 3.
1
<PAGE>
Alliance International Fund
- --------------------------------------------------------------------------------
MARKET PERFORMANCE SHOULD IMPROVE AS INTEREST RATES STABILIZE
Stock selection will remain our focus for 1995. We are de-emphasizing cyclicals
and increasing weightings in consumer non-durable and pharmaceutical stocks in
both Europe and Japan.
As we head into 1995, we are reducing exposure to the Japanese equity market.
The portfolio has been overweighted in this market since January 1994 and we are
now moving to about an 8% underweighted position relative to the appropriate
benchmarks. Japanese equities are approaching fair value and given that economic
recovery is on its way interest rates are no longer falling.
Half of the funds moved from Japan's market will be allocated toward Europe to
increase the portfolio's overweighted positioning in this region. Liquidity
conditions in Europe are analogous to those in Japan; rates are no longer
declining and may actually increase in the second half of 1995 as the economies
continue to recover. However, after the sharp corrections experienced in 1994,
valuations are attractive and we find many interesting stocks to consider.
Remaining funds are targeted for Hong Kong and some of the Asian emerging
markets. Valuations for a number of companies have become increasingly
attractive and we will be looking to buy into these stocks on weakness.
The portfolio is beginning 1995 partially hedged versus the Japanese yen and
German mark. We expect the U.S. dollar to strengthen during the first half of
1995 as the Federal Reserve increases rates in its continuing attempts to slow
the economy. Japanese and European interest rates should remain steady at
current levels--despite their recovering economies--since inflationary pressures
are not apparent in either place. Also, the rate of increase in the Japanese
trade surplus with the United States appears to have finally slowed.
Interest rates should stabilize and equity market performance should improve as
we expect economic growth in the U.S. and Europe to slow over the next twelve
months.
We appreciate your continued interest in Alliance International Fund and look
forward to reporting its progress to you in the coming months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ A. Rama Krishna
A. Rama Krishna
Senior Vice President
2
<PAGE>
INVESTMENT RESULTS ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
CLASS A SHARES
--------------
Without With
Sales Sales
Charge Charge
-------- --------
<S> <C> <C>
* One Year + 5.68% + 1.19%
* Five Years + 1.55 + 0.67
* Ten Years +15.33 +14.83
<CAPTION>
CLASS B SHARES
--------------
Without With
Sales Sales
Charge Charge
------- ------
<S> <C> <C>
* One Year +4.85% +1.05%
* Since Inception* +4.81 +4.81
<CAPTION>
CLASS C SHARES
--------------
<S> <C>
* One Year +4.78%
* Since Inception* +8.19
</TABLE>
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares--with and without the effect of the
4.25% maximum sales charge (Class A) or 3% contingent deferred sales charge
(Class B); Class C shares are not subject to front-end or contingent deferred
sales charges. Past performance does not guarantee future results. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
________________________________________________________________________________
* Inception: 9/17/90, Class B; 5/3/93, Class C.
3
<PAGE>
TEN LARGEST HOLDINGS
DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sony Corp. --Consumer electronics and
entertainment company $ 4,224,034 1.6%
- ----------------------------------------------------------------------------------------------------------------
Sumitomo Bank, Ltd.--Large Japanese city bank 4,194,681 1.6
- ----------------------------------------------------------------------------------------------------------------
Asahi Glass Co., Ltd. --Largest comprehensive
glass manufacturer 3,801,706 1.5
- ----------------------------------------------------------------------------------------------------------------
AB Astra Series A--World's fastest growing
pharmaceutical company 3,762,187 1.5
- ----------------------------------------------------------------------------------------------------------------
Dai-Ichi Kangyo Bank--Large Japanese city bank 3,603,412 1.4
- ----------------------------------------------------------------------------------------------------------------
Toyota Motor Corp.--One of world's big three
auto makers 3,582,539 1.4
- ----------------------------------------------------------------------------------------------------------------
Asahi Bank, Ltd.--Medium Japanese city bank 3,480,582 1.4
- ----------------------------------------------------------------------------------------------------------------
Mitsubishi Chemical Corp.--Largest all-round chemical
manufacturer 3,467,275 1.4
- ----------------------------------------------------------------------------------------------------------------
Hitachi Metals, Ltd.--Largest manufacturer of
free-access floors 3,415,755 1.3
- ----------------------------------------------------------------------------------------------------------------
Bank of Tokyo, Ltd.--Foreign exchange specialized
bank with worldwide network 3,384,445 1.3
- ----------------------------------------------------------------------------------------------------------------
$36,916,616 14.4%
</TABLE>
4
<PAGE>
DISTRIBUTION OF PORTFOLIO BY COUNTRY
DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Percent Of Portfolio*
- --------------------------------------------------------------------------------
<S> <C>
Japan 42.6%
- --------------------------------------------------------------------------------
United Kingdom 12.9
- --------------------------------------------------------------------------------
Germany 6.9
- --------------------------------------------------------------------------------
France 6.6
- --------------------------------------------------------------------------------
Netherlands 5.1
- --------------------------------------------------------------------------------
Sweden 3.6
- --------------------------------------------------------------------------------
Spain 2.9
- --------------------------------------------------------------------------------
Australia 2.0
- --------------------------------------------------------------------------------
Italy 1.9
- --------------------------------------------------------------------------------
Finland 1.6
- --------------------------------------------------------------------------------
Hong Kong 1.5
- --------------------------------------------------------------------------------
Malaysia 1.5
- --------------------------------------------------------------------------------
Switzerland 1.5
- --------------------------------------------------------------------------------
Thailand 1.2
- --------------------------------------------------------------------------------
Singapore 1.1
- --------------------------------------------------------------------------------
Belgium 1.0
- --------------------------------------------------------------------------------
Canada 0.9
- --------------------------------------------------------------------------------
Mexico 0.9
- --------------------------------------------------------------------------------
Philippines 0.9
- --------------------------------------------------------------------------------
Ghana 0.8
- --------------------------------------------------------------------------------
Denmark 0.6
- --------------------------------------------------------------------------------
Brazil 0.5
- --------------------------------------------------------------------------------
Argentina 0.5
- --------------------------------------------------------------------------------
Norway 0.5
- --------------------------------------------------------------------------------
Indonesia 0.2
- --------------------------------------------------------------------------------
Taiwan 0.2
- --------------------------------------------------------------------------------
India 0.1
- --------------------------------------------------------------------------------
100.0%
- --------------------------------------------------------------------------------
</TABLE>
*Excludes short-term obligations.
5
<PAGE>
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Banking $ 35,859,474 14.0%
- -------------------------------------------------------------------------------------------------------------------
Basic Industries 38,274,698 15.0
- -------------------------------------------------------------------------------------------------------------------
Brokerage and Money Management 4,473,236 1.8
- -------------------------------------------------------------------------------------------------------------------
Capital Goods 13,555,130 5.3
- -------------------------------------------------------------------------------------------------------------------
Consumer Manufacturing 24,550,779 9.6
- -------------------------------------------------------------------------------------------------------------------
Consumer Services 32,695,397 12.8
- -------------------------------------------------------------------------------------------------------------------
Consumer Staples 19,519,541 7.6
- -------------------------------------------------------------------------------------------------------------------
Energy 6,868,773 2.7
- -------------------------------------------------------------------------------------------------------------------
Finance 7,141,668 2.8
- -------------------------------------------------------------------------------------------------------------------
Healthcare 8,770,681 3.4
- -------------------------------------------------------------------------------------------------------------------
Insurance 8,830,986 3.5
- -------------------------------------------------------------------------------------------------------------------
Multi-Industry 6,501,433 2.5
- -------------------------------------------------------------------------------------------------------------------
Technology 9,673,817 3.8
- -------------------------------------------------------------------------------------------------------------------
Transportation 2,829,724 1.1
- -------------------------------------------------------------------------------------------------------------------
Utilities 20,095,331 7.9
- -------------------------------------------------------------------------------------------------------------------
Other 1,810,364 0.7
- -------------------------------------------------------------------------------------------------------------------
Total Investments* 241,451,032 94.5
- -------------------------------------------------------------------------------------------------------------------
Cash and receivables, net of liabilities 14,099,007 5.5
- -------------------------------------------------------------------------------------------------------------------
Net Assets $255,550,039 100.0%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
*Excludes short-term obligations.
6
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY SHARES U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS & OTHER
INVESTMENTS--94.5%
ARGENTINA--0.5%
Buenos Aires
Embotelladora, S.A............... 13,400 $ 432,150
YPF, S.A. Cl.D (ADR)............... 36,600 782,325
-----------
1,214,475
-----------
AUSTRALIA--1.9%
Australia & New Zealand
Bank Group, Ltd.................. 312,541 1,029,764
Boral, Ltd......................... 361,099 951,803
Broken Hill Proprietary
Co., Ltd......................... 67,278 1,022,283
Coca-Cola Amatil, Ltd.............. 152,178 967,403
Mayne Nickless, Ltd................ 165,154 845,036
-----------
4,816,289
-----------
BELGIUM--0.9%
Arbed, S.A.*....................... 3,800 570,480
Kredietbank, N.V................... 8,450 1,770,154
-----------
2,340,634
-----------
BRAZIL--0.5%
Panamerican Beverages,
Inc. Cl.A........................ 38,900 1,230,212
-----------
CANADA--0.9%
Alcan Aluminium, Ltd............... 23,200 589,200
American Barrick
Resources Corp................... 13,400 298,150
Finning, Ltd....................... 8,900 126,100
Hemlo Gold Mines, Inc.............. 10,700 109,651
Imasco, Ltd........................ 146 4,137
Noranda, Inc....................... 10,700 202,139
Northern Telecom, Ltd.............. 58 1,933
Placer Dome, Inc................... 5,300 115,275
Renaissance Energy, Ltd.*.......... 33,000 638,121
Rogers Communications,
Inc.*............................ 8,900 118,963
-----------
2,203,669
-----------
DENMARK--0.6%
Den Danske Bank
International, S.A............... 26,800 1,462,477
-----------
FINLAND--1.5%
Metsa-Serla Oy..................... 22,100 970,346
Nokia Corp. pfd.................... 19,230 2,833,386
-----------
3,803,732
-----------
FRANCE--6.2%
Assurance Generale
de France........................ 58,500 2,322,037
Banque Nationale de Paris.......... 20,500 942,286
Bouygues, S.A...................... 12,000 1,148,100
CIE Frananciere
de Paribas, S.A.................. 27,853 1,851,304
Generale des Eaux.................. 23,210 2,255,381
Gruope Danone...................... 5,500 771,297
Pechiney, S.A. .................... 15,200 1,024,527
Salomon, S.A....................... 3,300 1,319,135
Saint Gobain ...................... 19,200 2,207,227
Total, S.A. (ADR).................. 48,560 1,432,520
Cl. B............................ 5,300 307,819
Unibail............................ 4,040 369,129
-----------
15,950,762
-----------
GERMANY--6.5%
BASF A.G........................... 9,810 2,022,583
Bayer A.G.......................... 8,350 1,955,958
Bayer Motoren Werke
A.G.............................. 2,427 1,205,943
Deutsche Bank A.G.(c).............. 5,350 2,485,723
Deutsche Lufthansa
A.G.*(c)........................ 21,925 2,758,929
Klein, Schanz & Beck............... 520 125,835
Pfd. ............................ 610 127,932
Papierwerke Waldhof................ 9,800 1,505,114
Suedzucker A.G.(c)................. 4,101 2,050,963
Veba A.G.(c)....................... 6,780 2,362,598
-----------
16,601,578
-----------
GHANA--0.8%
Ashanti Goldfields Co.,
Ltd. (GDS)*................. 4,900 105,962
Ashanti Goldfields Co.,
Ltd. (ADR) (b)*............. 89,000 1,924,625
-----------
2,030,587
-----------
HONG KONG--1.4%
Hong Kong Land
Holdings, Ltd.............. 327,000 638,152
Hong Kong Aircraft &
Engineering Co., Ltd........ 200 667
Hutchinson Whampoa,
Ltd. ....................... 203,000 829,053
Jardine Strategic
Holdings, Ltd............... 233,000 764,872
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY SHARES U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Peregrine Investment
Holdings, Ltd................... 179,000 $ 210,520
Sun Hung Kai
Properties, Ltd................. 73,000 435,877
Television Broadcasts, Ltd........ 194,000 784,776
------------
3,663,917
------------
INDIA--0.1%
Baja Auto, Ltd. (GDR)............. 7,400 177,600
------------
INDONESIA--0.2%
PT Astra International............ 179,000 342,038
PT Indosat*....................... 62,500 223,925
------------
565,963
------------
ITALY--1.8%
Burgo (Cartiere) S.p.A.*.......... 215,900 1,431,160
La Rinascente S.p.A............... 232,100 1,305,260
Telecom Italia S.p.A.............. 309,600 805,639
Telecom Italia S.p.A.--
Di Risp*................... 570,000 1,137,042
------------
4,679,101
------------
JAPAN--40.2%
Asahi Bank, Ltd................... 299,000 3,480,582
Asahi Glass Co., Ltd. ............ 308,000 3,801,706
Bank of Tokyo, Ltd................ 219,000 3,384,445
Canon, Inc. ...................... 145,000 2,459,107
DDI Corp.......................... 206 1,777,822
Dai-Ichi Kangyo Bank.............. 191,000 3,603,412
Dai Nippon Printing Co.,
Ltd. ........................... 70,000 1,194,180
Daiwa Securities Co.,
Ltd. ........................... 121,000 1,748,520
East Japan Railway Co............. 259 1,294,350
Fuji Photo Film Co................ 127,000 2,944,004
Hankyu Department
Store........................... 170,000 2,183,643
Hitachi Metals, Ltd............... 279,000 3,415,755
Ito-Yokado Co., Ltd. ........... 29,000 1,551,129
Kajima Corp. ..................... 50,000 428,500
Kao Corp. ........................ 68,000 771,099
Komatsu Ltd....................... 124,000 1,119,920
Kuraray Co., Ltd.................. 187,000 2,214,350
Long Term Credit Bank Of
Japan, Ltd...................... 287,000 3,139,288
Matsushita Electric Works......... 241,000 2,466,834
Mitsubishi Chemical Corp.......... 630,500 3,467,275
Mitsubishi Electric Corp.......... 415,000 2,944,355
Mitsubishi Heavy
Industries, Ltd................. 158,000 $ 1,205,017
NEC Corp. ........................ 277,000 3,168,891
NTN Corp. ........................ 359,000 2,691,149
Nippon Denso ..................... 144,000 3,034,621
Nippon Electric Glass
Co., Ltd....................... 28,000 556,347
Nippon Express Co., Ltd........... 153,000 1,535,374
Nippon Paper Industries
Co.*............................ 212,000 1,557,291
Nippon Steel Co.*................. 490,000 1,843,954
Nippon Telegraph &
Telephone Corp.................. 241 2,130,667
Nomura Securities Co.,
Ltd. ........................... 86,000 1,786,453
Sakura Bank Ltd................... 250,000 3,361,766
Santen Pharmaceutical
Co.............................. 76,000 2,112,594
Sanyo Electric Co., Ltd........... 93,000 534,762
Seven-Eleven Japan Co.,
Ltd. ........................... 15,000 1,205,720
Sony Corp. ....................... 74,500 4,224,034
Sumitomo Bank, Ltd. (c)........... 220,000 4,194,681
Sumitomo Realty and
Development Co., Ltd............ 102,000 603,914
Taisho Pharmaceutical
Co., Ltd. ...................... 90,000 1,725,038
Takara Shuzo Co................... 224,000 1,778,063
Tokio Marine & Fire
Insurance Co., Ltd.............. 262,000 3,207,627
Tokyo Electric Power
Co., Ltd........................ 46,000 1,283,292
Tokyo Gas Co., Ltd................ 359,000 1,556,327
Toyota Motor Corp.*............... 170,000 3,582,539
UBE Industries, Ltd.*............. 425,000 1,641,997
Yamazaki Baking Co.,
Ltd. ...................... 143,000 2,870,045
------------
102,782,439
------------
MALAYSIA--1.4%
Aokam Perdana Berhad.............. 98,000 606,383
DCB Holdings Berhad............... 329,000 734,404
Resorts World Berhad.............. 33,000 781,281
Technology Resources
Industries Berhad*......... 256,000 817,074
TA Enterprise Berhad*............. 247,500 649,403
------------
3,588,545
------------
</TABLE>
8
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY SHARES U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MEXICO--0.9%
Grupo Financiero
Bancomer, S.A. de
C.V. Cl.C........................ 1,340,200 $ 643,835
Grupo Tribasa, S.A. de C.V.
(ADR)*........................... 44,700 743,137
Telefonos De Mexico, S.A.
(ADR) Cl.L....................... 19,700 807,700
-----------
2,194,672
-----------
NETHERLANDS--4.7%
D.S.M. N.V. ....................... 20,300 1,612,833
Elsevier N.V....................... 117,700 1,227,394
European Vinyls Corp............... 12,000 531,663
Fortis Amev N.V.................... 72,555 3,080,803
Heineken N.V....................... 15,500 2,337,924
Koninklijke PTT N.V.*.............. 36,500 1,230,206
Ver Ned Uitgevers.................. 16,600 1,723,423
-----------
11,744,246
-----------
NORWAY--0.4%
Transocean Drilling,
A.S.*............................ 136,300 1,138,535
-----------
PHILIPPINES--0.8%
JG Summit Holdings
Series B......................... 1,787,000 654,313
Manila Electric Co. Cl.B........... 107,000 1,458,299
-----------
2,112,612
-----------
SINGAPORE--1.0%
Development Bank
of Singapore, Ltd................ 84,000 864,494
Keppel Corp., Ltd.*................ 101,000 859,280
Singapore Press Hldgs.,
Ltd. ............................ 47,000 854,545
-----------
2,578,319
-----------
SPAIN--2.8%
Banco Intercontinental
Espanol.......................... 11,200 924,806
Centros Commerciales
Continente, S.A.................. 44,000 885,730
Iberdrola, S.A. ................... 141,700 874,035
Repsol, S.A........................ 64,000 1,735,606
Tabacalera, S.A. Series A.......... 38,365 1,022,929
Telefonica de Espana............... 114,800 1,356,049
Unidad Editorial, S.A.(a).......... 297,500 322,511
-----------
7,121,666
-----------
SWEDEN--3.4%
AB Astra Series A................. 145,600 $ 3,762,187
ASEA AB Series B................... 8,275 599,140
Hennes & Mauritz AB
Series B......................... 16,300 835,777
Marieberg Tidings
Series A......................... 35,400 800,369
SKF International AB
Series A*........................ 41,000 678,683
Series B*........................ 27,000 445,120
Stora Kopparbergs
Series B......................... 26,700 1,609,782
-----------
8,731,058
-----------
SWITZERLAND--1.4%
Electrowatt A.G.................... 2,780 734,820
Nestle, S.A........................ 2,933 2,794,080
Swiss Reinsurance Co.
(registered)
B warrants
expiring 6/30/95*................ 3,900 35,753
-----------
3,564,653
-----------
THAILAND--1.1%
Advanced Information
Services Plc..................... 72,000 986,576
Bangkok Bank Co., Ltd.............. 107,000 1,142,243
Securities One, Ltd................ 87,000 727,744
-----------
2,856,563
-----------
UNITED KINGDOM--12.1%
Allied Radio Plc.*................. 1,825,950 150,001
Argos Plc.......................... 263,300 1,450,235
B.A.T. Industries Plc.............. 369,100 2,489,236
Barclays Plc....................... 224,000 2,141,578
Barratt Development Plc............ 21,000 54,876
British Airways Plc................ 398,600 2,232,879
British Land Co. Plc............... 189,800 1,138,954
British Petroleum Co. Plc.......... 142,700 950,098
Dixons Group Plc................... 724,500 2,153,956
Forte Plc.......................... 786,900 2,967,436
General Electric Plc............... 287,000 1,239,469
Johnson Matthey Plc................ 205,100 1,752,278
Mowlen (John) & Co. Plc............ 690,700 1,080,772
News International Plc.
special div. shares.............. 279,600 936,258
Queens Moat
Houses Plc.* (a)................. 500,000 7,824
</TABLE>
9
<PAGE>
PAGE>
PORTFOLIO OF INVESTMENTS (continued) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY SHARES U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Royal Bank of Scotland
Group Plc. .................... 298,700 $ 1,841,519
SmithKline Beecham Cl.A.......... 165,000 1,170,863
Thorn EMI Plc. .................. 140,456 2,273,608
Vodafone Group Plc. ............. 778,000 2,580,835
Wimpey (George) Plc. ............ 1,159,100 2,339,674
------------
30,952,349
------------
OTHER--0.5%
Asesores Bursatiles Capital
Fund N.V.* (a)................. 25 639,863
CLM Insurance Fund Plc. ......... 123,000 184,766
Taiwan Fund, Inc. ............... 18,000 519,750
Touche Remnant Ecotec
Environmental Fund*(a)......... 1 -0-
------------
1,344,379
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
Company (000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Total Common Stocks &
Other Investments
(cost $235,068,304)............ $241,451,032
------------
TIME DEPOSIT--5.6%
First National Bank
of Chicago
5.875%, 1/03/95
(cost $14,400,000)............. US$14,400 14,400,000
------------
TOTAL INVESTMENTS--100.1%
(cost $249,468,304).............. 255,851,032
Other assets less liabilities--(0.1%) (300,993)
------------
NET ASSETS--100% $255,550,039
============
- ------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) Illiquid Security, valued at fair market value. (See Notes A and F.)
(b) This security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1994 this security amounted to $1,924,625 or 0.8% of net assets.
(c) Securities with an aggregate market value of $13,852,894 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.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $249,468,304)..................................
$255,851,032
Cash, at value (cost $1,609,106).........................................................
1,620,139
Receivable for investment securities sold................................................
24,867,430
Receivable for shares of beneficial interest sold........................................
610,644
Dividends and interest receivable........................................................
344,842
Foreign taxes receivable and other assets................................................
250,720
- ------------
Total assets.............................................................................
283,544,807
- ------------
LIABILITIES
Payable for investment securities purchased..............................................
24,634,016
Payable for shares of beneficial interest redeemed.......................................
1,920,882
Advisory fee payable.....................................................................
640,482
Distribution fee payable.................................................................
92,144
Unrealized depreciation of forward exchange currency contracts...........................
52,914
Accrued expenses.........................................................................
654,330
- ------------
Total liabilities........................................................................
27,994,768
- ------------
NET ASSETS .................................................................................
$255,550,039
============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par.................................................... $
156,977
Additional paid-in capital...............................................................
242,592,291
Accumulated net investment loss..........................................................
(2,014,811)
Accumulated net realized gain on investments and foreign currency transactions...........
8,476,527
Net unrealized appreciation of investments and foreign currency denominated assets
and liabilities..........................................................................
6,339,055
- ------------
$255,550,039
============
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($176,845,154/10,751,205 shares of beneficial interest issued and outstanding)..........
$16.45
Sales charge--4.25% of public offering price.............................................
.73
- ------
Maximum offering price...................................................................
$17.18
======
CLASS B SHARES
Net asset value and offering price per share
($49,532,149/3,113,731 shares of beneficial interest issued and outstanding)............
$15.91
======
CLASS C SHARES
Net asset value, redemption and offering price per share
($29,172,736/1,832,760 shares of beneficial interest issued and outstanding)............
$15.92
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1994 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $185,860)...................... $1,344,974
Interest................................................................... 423,180
$1,768,154
----------
EXPENSES
Advisory fee............................................................... 1,358,900
Distribution fee-Class A................................................... 184,665
Distribution fee-Class B................................................... 203,823
Distribution fee-Class C................................................... 133,406
Custodian.................................................................. 272,638
Transfer agency............................................................ 271,139
Administrative............................................................. 84,983
Audit and legal............................................................ 49,741
Printing................................................................... 45,815
Registration............................................................... 35,529
Trustees' fees............................................................. 19,225
Miscellaneous.............................................................. 20,084
----------
Total expenses.............................................................
2,679,948
- -----------
Net investment loss........................................................
(911,794)
- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investment transactions...............................
19,612,564
Net realized loss on foreign currency transactions.........................
(1,163,191)
Net change in unrealized appreciation (depreciation) of:
Investments................................................................
(22,733,208)
Foreign currency denominated assets and liabilities........................
310,753
- -----------
Net loss on investments and foreign currency transactions..................
(3,973,082)
- -----------
NET DECREASE IN NET ASSETS FROM OPERATIONS.......................................
$(4,884,876)
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR
ENDED
DECEMBER 31, 1994 JUNE
30,
(UNAUDITED) 1994
-----------------
- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss............................................................. $ (911,794) $
(1,189,227)
Net realized gain on investments and foreign currency transactions.............. 18,449,373
25,178,246
Net change in unrealized appreciation (depreciation) of investments
and foreign currency denominated assets and liabilities........................ (22,422,455)
9,924,850
------------
- ------------
Net increase (decrease) in net assets from operations........................... (4,884,876)
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)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase ................................................................... 38,242,776
50,062,493
------------
- ------------
Total increase ................................................................. 10,188,874
77,721,602
NET ASSETS
Beginning of year............................................................... 245,361,165
167,639,563
------------
- ------------
End of period................................................................... $255,550,039
$245,361,165
============
============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 (UNAUDITED) 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. Restricted 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 $1,163,191 represent foreign exchange
gains and losses from sales and maturities of debt securities, holding of
foreign currencies, exchange gains or 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.
6. CHANGES IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS
Effective June 30, 1994, the Fund adopted Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. As
a result, the Fund changed the classification of distributions to
shareholders to better disclose the differences between financial statement
amounts and distributions determined in accordance with income tax
regulations.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) 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 fee, 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 six months ended December 31, 1994,
no such reimbursement was required. Pursuant to the advisory agreement, the
Fund paid $84,983 to the Adviser representing the cost of certain legal and
accounting services provided to the Fund by the Adviser for the six months
ended December 31, 1994.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary
of the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $162,170 for the six months ended December 31, 1994.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $8,601 from the sale of Class A shares and
$129,380 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B for the six months ended December 31, 1994. Brokerage
commissions paid on securities transactions for the six months ended December
31, 1994, amounted to $603,281, 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 $1,459,486 and $365,010, 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 $154,865,107 and $145,931,194, respectively, for the
six months ended December 31, 1994. There were no purchases or sales of U.S.
Government and government agency obligations for the six months ended
December 31, 1994.
The Fund enters into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
14
<PAGE>
ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
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 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 unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for
investment or U.S. Government securities in a separate account of the Fund
having a value equal to the aggregate amount of the Fund's commitments under
forward exchange currency contracts entered into with respect to position
hedges.
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. At December 31, 1994, the Fund
had outstanding forward exchange currency contracts, both to purchase and
sell foreign currencies against the U.S. dollar as follows:
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
FOREIGN CURRENCY SALE CONTRACTS (000) DATE VALUE (DEPRECIATION)
- ------------------------------- -------- ----------- ------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks, expiring, 2/28/95 ............ 12,000 $7,676,561 $7,752,486 $(75,925)
Japanese Yen, expiring, 2/28/95 .............. 417,000 4,232,214 4,209,203 23,011
--------
$(52,914)
========
</TABLE>
At December 31, 1994, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation of investments was $17,152,467 and gross unrealized
depreciation of investments was $10,769,739, resulting in net unrealized
appreciation of $6,382,728. At June 30, 1994, to the extent provided in the
regulations, the Fund had a capital loss carry forward of $169,387 which expires
in the year 1999.
- --------------------------------------------------------------------------------
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:
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1994 JUNE 30, DECEMBER 31, 1994 JUNE 30,
(UNAUDITED) 1994 (UNAUDITED) 1994
----------------- ---------- ----------------- ----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold........................ 1,596,019 2,597,434 $ 29,418,851 $ 45,812,612
Shares issued in reinvestment of
dividends and distributions....... 926,429 328,484 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.................... (2,758,683) (2,744,645) (51,066,944) (48,609,413)
---------- ---------- ------------ ------------
Net increase (decrease)............ (236,235) 928,933 $ (6,615,742) $ 15,345,694
========== ========== ============ ============
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1994 JUNE 30, DECEMBER 31, 1994 JUNE 30,
(UNAUDITED) 1994 (UNAUDITED) 1994
----------------- ---------- ----------------- ----------
<S> <C> <C> <C> <C>
CLASS B
Shares sold........................ 1,629,722 1,519,137 $ 28,975,071 $26,354,439
Shares issued in reinvestment of
distributions..................... 246,119 24,318 3,861,838 394,438
Shares redeemed.................... (434,685) (275,243) (7,533,977) (4,795,788)
--------- --------- ------------ -----------
Net increase....................... 1,441,156 1,268,212 $ 25,302,932 $21,953,089
========= ========= ============ ===========
CLASS C
Shares sold........................ 1,622,229 1,157,061 $ 29,077,802 $20,136,268
Shares issued in reinvestment of
distributions .................... 171,490 11,110 2,692,396 180,098
Shares redeemed.................... (714,807) (428,880) (12,214,612) (7,552,656)
--------- --------- ------------ -----------
Net increase....................... 1,078,912 739,291 $ 19,555,586 $12,763,710
========= ========= ============ ===========
</TABLE>
- --------------------------------------------------------------------------------
NOTE F: ILLIQUID SECURITIES
<TABLE>
<CAPTION>
DATE
SECURITY ACQUIRED U.S. $
COST
--------
- -----------
<S> <C> <C>
Asesores Bursatiles Capital Fund N.V.......................................... 10/29/90
$1,113,819
Queens Moat Houses Plc........................................................ 9/22/92
275,315
Touche Remnant Ecotec Environmental Fund...................................... 6/28/90
260,066
Unidad Editorial, S.A. ....................................................... 1/20/92
369,591
</TABLE>
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
December 31, 1994 was $970,198 representing 0.4% 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.
16
<PAGE>
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1994 ----------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year...... $18.38 $16.01 $14.98 $14.00 $17.99 $17.24
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income (loss)............ (.05) (.09) (.01) .01(b) .05 .03
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................... (.26) 3.02 1.17 1.04 (3.54) 2.87
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset
value from operations.................. (.31) 2.93 1.16 1.05 (3.49) 2.90
------ ------ ------ ------ ------ ------
LESS: DISTRIBUTIONS
- -------------------
Dividends from net investment
income................................. -0- -0- (.04) (.07) (.03) (.04)
Distributions from net realized gains
on investments and foreign currency
transactions........................... (1.62) (.56) (.09) -0- (.47) (2.11)
------ ------ ------ ------ ------ ------
Total distributions..................... (1.62) (.56) (.13) (.07) (.50) (2.15)
------ ------ ------ ------ ------ ------
Net asset value, end of period.......... $16.45 $18.38 $16.01 $14.98 $14.00 $17.99
====== ====== ====== ====== ====== ======
TOTAL RETURN
- ------------
Total investment return based on net
asset value (c)........................ (1.57)% 18.68% 7.86% 7.52% (19.34)% 16.98%
====== ====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of year (000's omitted). $176,845 $201,916 $161,048 $179,807 $214,442 $265,999
Ratio of expenses to average net assets 1.77%(d) 1.90% 1.88% 1.82% 1.73% 1.45%
Ratio of net investment income (loss)
to average net assets.................. (.46)%(d) (.50)% (.14)% .07% .37% .33%
Portfolio turnover rate................. 57% 97% 94% 72% 71% 37%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 19.
17
<PAGE>
FINANCIAL HIGHLIGHTS (continued) ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30, SEPTEMBER 17, 1990 (A)
DECEMBER 31, 1994 ------------------------------ TO
(UNAUDITED) 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)................. (.06)(b) (.19)(b) (.12) (.11)(b) .03
Net realized and unrealized gain (loss) on
investments and foreign
currency transactions....................... (.31) 2.91 1.14 1.02 (1.12)
------ ------ ------ ------ ------
Net increase (decrease) in net asset value
from operations............................ (.37) 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............... $15.91 $17.90 $15.74 $14.81 $13.93
====== ====== ====== ====== ======
TOTAL RETURN
- ------------
Total investment return based on net
asset value (c)............................. (1.94)% 17.65% 6.98% 6.54% (6.97)%
====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (000's omitted).... $49,532 $29,943 $6,363 $5,585 $3,515
Ratio of expenses to average net assets...... 2.56%(d) 2.78% 2.70% 2.68% 3.39%(d)
Ratio of net investment income (loss)
to average net assets....................... (1.32)%(d) (1.15)% (.96)% (.70)% .84%(d)
Portfolio turnover rate...................... 57% 97% 94% 72% 71%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 19.
18
<PAGE>
ALLIANCE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MAY 3, 1993(A)
DECEMBER 31, 1994 JUNE 30, TO
(UNAUDITED) 1994 JUNE 30, 1993
----------------- ---------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................. $17.91 $15.74 $15.93
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income (loss).......................... (.03) (.11) -0-
Net realized and unrealized gain (loss) on
investments and foreign currency transactions........ (.34) 2.84 (.19)
------ ------ ------
Net increase (decrease) in net asset value
from operations...................................... (.37) 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........................ $15.92 $17.91 $15.74
====== ====== ======
TOTAL RETURN
- ------------
Total investment return based on net
asset value (c)...................................... (1.94)% 17.72% (1.19)%
====== ====== ======
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (000's omitted)............. $29,173 $13,503 $229
Ratio of expenses to average net assets............... 2.56%(d) 2.78% 2.57%(d)
Ratio of net investment income (loss)
to average net assets................................ (1.29)%(d) (1.12)% .08%(d)
Portfolio turnover rate............................... 57% 97% 94%
</TABLE>
- --------------------------------------------------------------------------------
(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.
19
<PAGE>
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
DANIEL V. PANKER, Vice President
EDMUND P. BERGAN, JR., Secretary
MARK D. GERSTEN, Treasurer and 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
20
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Alliance
- --------------------------------------------------------------------------------
International
- --------------------------------------------------------------------------------
Fund
- --------------------------------------------------------------------------------
Semi-Annual
Report
December 31, 1994
Alliance(R)
Mutual funds without the Mystery(SM)
Alliance International Fund
1345 Avenue of the Americas
New York, New York 10105
(800) 221-5672
AllianceCapital [LOGO APPEARS HERE]
Distribution of this report other than to shareholders must be
preceded or accompanied by the Fund's current prospectus, which
contains further information about the Fund (includes fees and
expenses) and should be read before investing.
INTSR
