ALLIANCE INTERNATIONAL FUND
ANNUAL REPORT
JUNE 30, 1996
ALLIANCE
INVESTING WITHOUT THE MYSTERY.
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
July 8, 1996
Dear Shareholder:
We are pleased to report on the investment results and activity of Alliance
International Fund for the fiscal year ended June 30, 1996. As the accompanying
table makes clear, your Fund and the foreign equity markets in which it invests
have performed well since our last report to you.
MARKET REVIEW
The impressive gains achieved by global stock markets in 1995 persisted through
the first half of 1996. While the U.S. equity market, responding to reasonable
earnings reports and liquidity flows, posted the largest increase of the major
developed countries from December 31, 1995, through June 30 of this
year-10.08%, the emerging markets offered the richest returns. Emerging-stock
markets climbed 11.43% on average when translated into U.S. dollars. This
contrasts with the 7% decline, in U.S. dollar terms, that was reported by the
developing markets at the end of 1995.
Many markets in Europe continued to deliver double-digit returns in local
currency terms as investors anticipated a surge in economic growth in response
to declining short-term interest rates. In Japan, foreign investors and
positive earnings surprises at many companies supported increases in equity
prices. After a strong showing during the second half of 1995, Japanese stocks
moved 7.56%, in local currency terms, during the first six months of 1996. The
returns in Europe and Japan were not spread evenly across all the stocks in
their respective markets, however. Share price appreciation has depended more
on the individual company's prospects than on the overall rise in equity
markets.
The strengthening of the U.S. dollar, which began in the first quarter of 1996
and continued through June, also contributed to the Fund's positive
performance. Since the beginning of the year, the dollar has risen over 6%
versus the German mark and Japanese yen. After two years of weakness, the
dollar is finally gaining momentum.
INVESTMENT RESULTS
The International Fund's total return for the fiscal twelve months ended June
30, 1996, was 15.83% for Class A shares. That performance surpassed the 13.35%
increase for the same period registered by its equity benchmark, the unmanaged
Morgan Stanley Capital International World Index (excluding the U.S.), with
dividends reinvested and stated in U.S. dollars. The Fund also tracked and
slightly exceeded the average return achieved by its Lipper peer group for the
twelve-month period.
INVESTMENT RESULTS*
PERIODS ENDING JUNE 30, 1996
CUMULATIVE TOTAL RETURN
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE INTERNATIONAL FUND
Class A 7.51% 15.83%
Class B 7.06% 14.87%
Class C 7.05% 14.85%
MSCI WORLD INDEX MINUS THE U.S. 4.70% 13.35%
LIPPER INTERNATIONAL FUND AVG. 8.02% 15.48%
THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD AND
ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF 6/30/96. ALL
FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED, BUT
NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES ARE
PURCHASED OR REDEEMED. RETURNS FOR THE FUND AND ITS COMPARATIVE INDICES INCLUDE
THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
ALL COMPARATIVE INDICES ARE UNMANAGED AND REFLECT NO FEES OR EXPENSES. THE
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX MINUS THE U.S., TRACKS THE
PERFORMANCE OF STOCK MARKETS IN 21 FOREIGN COUNTRIES. THE LIPPER INTERNTAIONAL
FUND AVERAGE IS BASED ON THE PERFORMANCE OF 358 MUTUAL FUNDS WITH GENERALLY
SIMILAR INVESTMENT OBJECTIVES, BUT WHICH MAY HAVE DIFFERENT INVESTMENT POLICIES.
FOR ADDITIONAL PERFORMANCE INFORMATION, SEE PAGE 3.
Stock selection and improved performance within the emerging-stock markets had
a positive impact on the Fund's investment results. During the first six months
of 1996, each of the three geographic areas in which the Fund invests-i.e.,
Europe, Japan, and the Pacific region-exceeded their respective regional
benchmarks.
From a regional perspective, since our December report, the Fund has maintained
a fairly neutral posture. European equities were slightly underweighted, while
Pacific
1
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
region stocks received more emphasis. During the second quarter of 1996, this
positioning marginally detracted from the Fund's results since European markets
moved higher than those in the Pacific region.
In 1996, Europe's performance was driven by conglomerates that are possible
candidates for restructuring. They included Henkel, Veba, Bayer, and Ciba
Geigy. In Japan, Honda and Toyota reported impressive earnings, boosting share
prices. The Fund's consumer-related Japanese stocks, such as Shisheido and Fuji
Photo, also gained, while investments in pharmaceutical companies continued
their steady ascent. Underweighting banks and overweighting technology stocks
further enhanced the overall return.
The Fund's Pacific holdings, excluding Japan, provided generous returns in 1996
due to investments in several Hong Kong conglomerates-namely, First Pacific and
Swire Pacific-and to positions in growth stocks such as Korea Mobile
Telecommunications and Coca Cola Amatil.
INVESTMENT OUTLOOK
As 1996 progresses, we believe that European economies will strengthen, aided
by growing exports to North and South America, by lower interest rates, and,
most important, by a strong U.S. dollar. The Fund is not positioned
aggressively for stronger growth since valuations of cyclical stocks are not
compelling. One area where we do see value opportunities, however, is in the
United Kingdom. Our forecast is based on lively consumer spending and the
prospect that the government will stimulate the economy to build support for
the May 1997 elections. We expect that the stocks of retailers and
housing-construction companies will be winners in the months ahead.
In Japan, fiscal and monetary policies have triggered a moderate recovery in
both the economy and corporate profits, but there is little potential for
further fiscal stimulus heading into the second half of 1996. The strength and
sustainability of Japan's recent growth are questionable. For that reason, we
expect to remain underexposed to Japanese cyclicals, such as paper and chemical
companies, while adding to growth-oriented cyclicals-particularly technology
stocks. Pharmaceutical stocks also continue to be attractive.
In other areas of the Pacific, we project growth rates at moderate but healthy
levels. Slower growth should help financial markets since it will ease
inflationary pressures and encourage lower interest rates. In fact, we believe
that growth in the countries of the Pacific will be superior to that of any
other part of the world. We continue to emphasize the more emerging Asian
markets over the core markets of Hong Kong, Singapore, Malaysia, Australia, and
New Zealand. In our opinion, Indonesia offers the best combination of growth
and value in all of Asia.
PORTFOLIO STRATEGY
The Fund remains slightly overweighted in the Pacific (excluding Japan) and
marginally underweighted in Europe. Targeted allocations are 40% of assets in
Japanese stocks, 48% in European issues, and 12% in the stocks of the Pacific
region. We enter the Fund's new fiscal year without currency hedges and fairly
neutral regional allocations. Once again, research-driven stock selections
within each of the geographic areas will drive the Fund's performance in the
future.
We thank you for your continued interest and investment in Alliance
International Fund. We look forward to reporting its progress to you in future
periods.
Sincerely,
John D. Carifa
Chairman and President
A. Rama Krishna
Senior Vice President
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
Alliance International Fund is a diversifed investment company that seeks to
provide investors with a total return on its assets from long-term growth of
capital and income. The Fund invests principally in marketable securities of
established non-U.S. companies participating in foreign economies with
prospects of growth, and foreign government securities.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JUNE 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 15.83% 10.89%
. Five Years 9.91% 8.96%
. Ten Years 8.58% 8.11%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 14.87% 10.87%
. Five Years 8.98% 8.98%
. Since Inception* 6.37% 6.37%
CLASS C SHARES
. One Year 14.85%
. Since Inception* 9.49%
Average annual total returns reflect investment of dividends and/or capital
gain 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 purchased prior to July 1, 1996, are not subject to front-end or
contingent deferred sales charges. Class C shares purchased on or after July 1,
1996, are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase.
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
6/30/86 TO 6/30/96
LIPPER INTERNATIONAL FUNDS
MSCI WORLD INDEX (MINUS THE U.S.)
ALLIANCE INTERNATIONAL FUND
CLASS A: $21,789
$29,000
$27,000
$25,000
$23,000
$21,000
$19,000
$17,000
$15,000
$13,000
$11,000
$9,000
6/30/86 6/30/96
This chart illustrates the total value of an assumed investment in Alliance
International Fund Class A shares after deducting the maximum sales charge, and
with dividends and capital gains reinvested. It is a hypothetical illustration
for illustrative purposes only. Performance for Class B and Class C shares will
vary from the results shown due to differences in expenses and fees 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 Index (minus the United States)
is an unmanaged, market-capitalization-weighted index that measures the
performance of stock markets in 21 countries outside the United States.
The Lipper International Funds Average reflects performance of 358 mutual
funds, only 24 of which have existed for the full ten-year period. These funds
have generally similar investment objectives to Alliance International Fund,
although the investment policies of some funds included in the average may vary.
When comparing Alliance International Fund to the index and 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.
Alliance International Fund
Lipper International Funds Average
MSCI World Index (minus the U.S.)
4
TEN LARGEST HOLDINGS
JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $VALUE NET ASSETS
- -------------------------------------------------------------------------------
DDI Corp.-Provider of long distance telephone and
mobile communication services $ 6,062,631 2.1%
Rohm Co.-Largest specialist maker of custom
linear integrated circuits 5,094,165 1.7
Seven-Eleven Japan Co., Ltd.-Largest CVS operator 4,982,135 1.7
Toyota Motor Corp.-One of world's big three auto makers 4,056,106 1.4
Ciba-Geigy A.G.-Producer of pharmaceuticals,
chemicals, and biological products 3,928,400 1.3
Mitsui Trust & Banking Co., Ltd.-Third largest
Japanese trust bank 3,637,593 1.2
TDK Corp.-Largest manufacturer of magnetic tapes,
floppy discs & electronic parts 3,406,406 1.2
Nestle, S.A.-A holding company with subsidiaries that
produce various prepared foods and dairy products,
as well as pharmaceuticals and cosmetics 2,812,272 1.0
Matsushita Electric Industrial Co., Ltd.-Largest
consumer electronics manufacturer 2,796,180 0.9
B.A.T. Industries Plc.-A holding company that
manufacturers tobacco products, as well as
financial and insurance services 2,786,327 0.9
$39,562,215 13.4%
5
DISTRIBUTION OF PORTFOLIO BY COUNTRY
JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF PORTFOLIO *
- -------------------------------------------------------
Japan 39.4%
United Kingdom 14.8
France 9.1
Germany 6.0
Switzerland 4.1
Netherlands 3.4
Hong Kong 2.8
Italy 2.2
Spain 2.1
Sweden 2.1
Malaysia 1.8
Australia 1.7
Singapore 1.5
South Korea 1.3
Finland 1.1
Indonesia 1.1
Denmark 1.0
New Zealand 0.9
Norway 0.9
India 0.7
Ireland 0.5
Thailand 0.4
Belgium 0.3
Philippines 0.3
Brazil 0.2
People's Republic of China 0.2
Austria 0.1
Canada 0.0
100.0%
Excludes short-term obligations.
6
INDUSTRY DIVERSIFICATION
JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Banking $ 29,980,418 10.1%
Basic Industries 29,097,018 9.8
Capital Goods 17,648,707 6.0
Consumer Manufacturing 34,316,477 11.6
Consumer Services 26,071,524 8.8
Consumer Staples 32,377,384 11.0
Energy 8,947,000 3.0
Finance 12,922,405 4.4
Healthcare 12,171,904 4.1
Insurance 10,473,680 3.5
Multi Industry 1,730,449 0.6
Technology 16,508,230 5.6
Transportation 11,852,010 4.0
Utilities 36,371,641 12.3
Other 648,018 0.2
Total Investments* 281,116,865 95.0
Cash and receivables, net of liabilities 14,579,399 5.0
Net Assets $295,696,264 100.0%
Excludes short-term obligations.
7
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS94.5%
AUSTRALIA1.7%
Coca-Cola Amatil, Ltd. 127,358 $1,414,371
Mayne Nickless, Ltd. 76,000 443,810
Qantas Airways, Ltd. 127,195 214,933
TNT, Ltd.* 272,000 305,703
WMC, Ltd. 123,252 881,516
Woolworths, Ltd. 688,917 1,662,265
------------
4,922,598
AUSTRIA0.1%
Austria Mikro Systeme International AG 1,110 103,718
Mayr-Melnhof Karton AG* 5,940 255,869
------------
359,587
BELGIUM0.3%
Kredietbank NV 2,900 870,087
BRAZIL0.2%
Dixie Toga, S.A. 200,028 193,225
Industrias Klabin de Papel e Celulose, S.A. 207,500 262,436
Siderurgica Riograndense, S.A. 1,022,370 15,170
------------
470,831
CANADA0.0%
Imasco, Ltd. 4 82
DENMARK1.0%
Den Danske Bank 26,000 1,743,897
Tele Danmark AS Cl. B. 24,590 1,238,042
------------
2,981,939
FINLAND1.0%
Merita, Ltd. Cl. A. 372,610 788,225
Nokia Corp. 21,000 775,149
Orion-Yhtymae OY Series B 36,253 1,211,391
------------
2,774,765
FRANCE8.7%
Assurance Generale de France (a) 54,000 1,463,304
Banque Nationale de Paris (a) 53,076 1,864,379
Bouygues (a) 15,500 1,729,504
CEP Communications 4,009 339,003
Compagnie Generale des Eaux (a) 12,900 1,441,901
Gruope Danone (a) 13,800 2,089,751
Temporary Non Tradable Certificates 246 36,487
GTM Entrepose, S.A. (a) 11,219 728,414
Klepierre 2,400 293,920
Lafarge, S.A. 20,800 1,259,503
Temporary Non Tradable Certificates 607 35,576
Legris Industries, S.A. (a) 25,000 1,146,912
Pechiney, S.A. Cl. A 18,900 763,826
PSA Peugeot Citroen 13,500 1,808,135
Salomon, S.A. 1,460 1,335,336
Simco, S.A. 6,084 561,773
new shares 286 23,906
Societe de Immeubles de France* 10,267 662,612
Temporary Non Tradable Certificates 127 8,073
Societe Francaise d'Investissemeants
Immobiliers et de Gestion 9,700 656,189
Societe National Elf Aquitaine, S.A. 18,200 1,339,461
Societe Television Francaise 8,400 960,140
Total, S.A. (ADR) 37,457 1,390,591
Cl. B 15,500 1,150,391
8
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
Union du Credit-Bail Immobilier 12,410 $ 1,239,975
Union Immobiliere de France 7,090 580,238
Usinor Sacilor 57,000 822,715
------------
25,732,015
GERMANY5.7%
Bayer A.G. (a) 76,000 2,686,351
Deutsche Bank A.G. (a) 34,600 1,638,247
Deutsche Lufthansa A.G. 8,980 1,269,654
Henkel KGaA-Vorzug, pfd. 4,600 1,987,440
Hornbach Holding A.G., pfd. 14,250 1,227,600
Klein, Schanz & Beck A.G.* 2,710 463,354
Vorzug (a) 6,180 796,554
Schmalbach-Lubeca A.G. (a)* 7,180 1,411,778
Suedzucker A.G. (a) 3,171 1,576,481
Varta A.G.* 5,080 1,090,731
Veba A.G. (a) 50,000 2,659,060
------------
16,807,250
HONG KONG2.7%
Asia Satellite Telecommunications
Holdings, Ltd.* 33,000 97,839
Citic Pacific, Ltd. 174,000 703,575
Consolidated Electric Power 645,000 1,062,397
Dao Heng Bank Group, Ltd. 284,000 1,097,000
First Pacific Co., Ltd. 592,198 914,222
Hong Kong & China Gas Co., Ltd. 234,960 374,868
warrants expiring 9/30/97* 19,580 5,122
Hysan Development Co., Ltd. 114,000 347,563
warrants expiring 4/30/98* 5,700 3,019
New World Development Co., Ltd. 80,267 372,262
Sun Hung Kai Properties, Ltd. 63,000 636,857
Swire Pacific, Ltd. Cl. A 85,000 727,481
Television Broadcasting, Ltd. 209,000 784,349
Wharf Holdings, Ltd. 188,000 672,751
------------
7,799,305
INDIA0.6%
Bajaj Auto, Ltd. (GDR) (c)* 34,000 1,292,000
Guangshen Railway Co., Ltd. ADR* 25,000 478,125
------------
1,770,125
INDONESIA1.0%
PT HM Sampoerna 156,000 1,776,155
PT Indosat 284,000 954,801
PT Telekomunikasi Indonesia (ADR) 13,000 386,750
------------
3,117,706
IRELAND0.5%
Irish Life Plc. 343,870 1,367,985
ITALY2.1%
Ente Nazionale Idrocarburi S.p.A. 270,000 1,347,643
Instituto Nazionale Delle Azzicuraioni 959,000 1,430,666
La Rinascente S.p.A. 214,000 1,533,387
Magneti Marelli S.p.A. 151,100 215,551
Telecom Italia S.p.A. 808,000 1,738,202
------------
6,265,449
JAPAN36.9%
Amano Corp. 100,000 1,489,469
Asahi Glass Co., Ltd. 186,000 2,226,527
Bank of Tokyo-Mitsubishi 5,000 116,051
Canon, Inc. 97,000 2,020,926
Chiba Bank, Ltd. 59,000 520,802
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
Dai Nippon Printing Co., Ltd. 71,000 $ 1,375,428
Daifuku Co., Ltd. 77,000 1,182,072
Daito Trust Construction Co., Ltd. 120,800 1,810,317
Daiwa House Industry Co., Ltd. 28,000 434,961
Daiwa Securities Co., Ltd. 51,000 657,102
DDI Corp. (a) 694 6,062,631
East Japan Railway Co. 342 1,796,957
Eisai Co., Ltd. (a) 63,000 1,191,666
Fuji Photo Film 21,000 663,956
Furakawa Co., Ltd. 121,000 635,765
Hirose Electric Co. (a) 37,000 2,288,939
Hokkaido Takushoku Bank, Ltd. 8,000 24,270
Honda Motor Co. 26,000 674,738
House Foods Industry 34,000 646,228
Hoya Corp. (a) 86,000 2,781,925
Ishikawajima-Harima Heavy Industries 115,000 562,206
Ito-Yokado Co., Ltd. 17,000 1,026,820
Japan Securities Finance 120,000 1,940,878
Japan Tobacco Inc. 181 1,389,318
Kamigumi Co., Ltd. 79,000 721,890
Kandenko Co., Ltd. 72,000 914,515
Kao Corp. 134,000 1,812,217
Kirin Brewery Co., Ltd. 68,000 832,640
Kokuyo 22,000 609,129
Kuraray Co., Ltd. 141,000 1,584,776
Long-Term Credit Bank of Japan 4,000 31,032
Mabuchi Motor Co. 11,000 701,604
Maeda Road Construction Corp. 24,000 414,493
Matsushita Electric Industrial Co., Ltd. (a) 150,000 2,796,180
Matsushita Electric Works 100,000 1,087,403
Mitsubishi Heavy Industries, Ltd. 144,000 1,254,005
Mitsubishi Materials Corp. 84,000 457,477
Mitsubishi Oil Co. 131,000 1,119,249
Mitsui Marine & Fire Insurance Co. 146,000 1,162,023
Mitsui Trust & Banking Co., Ltd. (a) 311,000 3,637,593
NNational House Industrial Co. 69,000 1,078,174
NGK Insulators 51,000 573,217
Nikko Securities Co., Ltd. 106,000 1,191,392
Nippon Chemical Industrial 7,000 73,560
Nippon Express Co., Ltd. 112,000 1,095,079
Nippon Light Metal Co. 107,000 608,160
Nippon Paper Industries Co. 6,000 37,557
Nippon Steel Co. 307,000 1,054,800
Nisshin Steel Co., Ltd. 572,000 2,221,410
NKK Corp.* 344,000 1,043,615
Nomura Securities Co., Ltd. 106,000 2,072,829
NTT Data Communications Systems 50 1,498,606
Osaka Gas Co. 241,000 883,090
Rohm Co. (a) 77,000 5,094,165
Sankyo Co., Ltd. 24,000 622,835
Santen Pharmaceutical 25,000 582,538
Seven-Eleven Japan Co., Ltd. (a) 78,000 4,982,135
Shimano, Inc. 56,000 1,008,087
Shimizu Corp. 97,000 1,072,509
Shiseido Co., Ltd. 104,000 1,330,470
Sony Music Entertainment 22,000 1,025,266
Sumitomo Electric Industries 74,000 1,061,635
Sumitomo Marine & Fire Insurance Co. 124,000 1,082,104
10
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
Sumitomo Realty and Development Co., Ltd. 143,000 $ 1,132,919
Sumitomo Rubber Industries 59,000 511,637
Taisho Pharmaceutical Co. 48,000 1,039,521
Takeda Chemical Industries 37,000 655,914
TDK Corp. 57,000 3,406,406
Toagosei Co., Ltd. 53,000 279,444
Tokai Bank 122,000 1,583,040
Tokyo Electric Power Co. 62,400 1,585,160
Tokyo Gas Co., Ltd. 533,000 1,948,188
Tokyo Steel Mfg. Co. 123,000 2,416,503
Tostem Corp. 4,000 118,061
Toyo Kanetsu 68,000 346,726
Toyota Motor Corp. (a) 162,000 4,056,106
UBE Industries, Ltd. 75,000 285,786
Ushio, Inc. 94,000 1,151,003
Yakult Honsha Co. 69,000 977,292
Yamanouchi Pharmaceutical Co., Ltd. 84,000 1,826,838
Yamatake Honeywell 60,000 1,091,059
Yamazaki Baking Co., Ltd. 40,000 741,993
------------
109,103,007
MALAYSIA1.8%
AMMB Holdings Berhad 78,000 1,094,408
DCB Holdings Berhad
warrants expiring 12/28/99* 82,250 108,150
Malakoff Berhad 202,000 882,662
Malayan Banking Berhad 73,000 702,345
Petronas Gas Berhad 173,000 742,073
Rashid Hussain Berhad 110,000 403,488
Resorts World Berhad 221,000 1,266,907
------------
5,200,033
NETHERLANDS3.0%
Akzo Nobel N.V. 19,900 2,386,314
Apothekers Cooperative Opg 8,620 230,996
Fortis Amev N.V. 76,900 2,205,039
International Nederlander Groep N.V. 77,300 2,307,164
Koninklijke KNP BT N.V. 38,000 911,356
Koninklijke Nedlloyd Groep N.V. 34,800 801,960
------------
8,842,829
NEW ZEALAND0.9%
Fletcher Challenge, Ltd. Forestry Division 232,000 288,548
Lion Nathan, Ltd. 324,000 848,245
Telecom Corp of New Zealand, Ltd. 331,000 1,391,974
------------
2,528,767
NORWAY0.9%
Bergesen D.Y. AS Cl. A 71,400 1,484,934
Christiana Bank OG Kreditkasse 546,000 1,286,943
------------
2,771,877
PEOPLES REPUBLIC OF CHINA0.2%
Advanced Semiconductor Engineering (GDR) (c)* 81,640 704,145
PHILIPPINES0.4%
Manila Electric Co. Cl. B 94,000 986,641
Philippine Commercial International Bank 10,070 125,875
------------
1,112,516
SINGAPORE1.4%
Overseas Union Bank 200,000 1,374,911
Overseas-Chinese Banking Corp., Ltd. 121,000 1,414,954
Singapore Airlines, Ltd. 34,000 359,036
Singapore Press Holdings., Ltd. 56,000 1,099,362
------------
4,248,263
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
SOUTH KOREA1.2%
Hyundai Motor (GDR) 3,000 $ 37,890
Korea Electric Power Corp. 15,290 527,761
(ADR) 6,400 155,200
Korea Mobile Telecom Corp. (ADR) 134,100 2,269,643
Pohang Iron & Steel Co. (ADR) 26,000 633,750
------------
3,624,244
SPAIN1.8%
Banco Intercontinental Espanol 13,885 1,554,645
Repsol, S.A. 31,100 1,082,548
Sol Melia, S.A.* 15,700 331,209
Tabacalera, S.A. Series A 31,600 1,592,524
Unidad Editorial, S.A. (b)* 297,500 371,917
Uralita, S.A. 56,660 531,248
------------
5,464,091
SWEDEN2.0%
Astra AB Series A 45,600 2,017,507
Electrolux AB Series B 23,700 1,193,512
Marieberg Tidnings Series A 55,050 1,379,901
Stora Kopparbergs Bergslags
Aktiebolag Series B 100,600 1,329,195
------------
5,920,115
SWITZERLAND3.9%
Baloise Holdings, Ltd. 810 1,762,560
Ciba-Geigy A.G. 3,220 3,928,400
Forbo Holdings A.G. 3,650 1,547,600
Nestle, S.A. 2,460 2,812,272
Sandoz A.G. 1,310 1,499,688
------------
11,550,520
THAILAND0.3%
Bangkok Bank Co., Ltd. 38,000 514,889
The Thai Farmers Bank, Ltd. 45,000 492,752
------------
1,007,641
UNITED KINGDOM14.0%
Allied Radio Plc.* 642,000 29,920
Anglian Water Plc. 188,000 1,730,444
B.A.T. Industries Plc. 358,000 2,786,327
Babcock International Group 202,500 286,272
Baird (William) Plc. 109,255 336,061
British Land Co. Plc. (ord) 206,000 1,352,089
British Land Co. Plc. (c) 30,166 197,996
British Telecommunications Plc. 252,000 1,354,528
British Vita Plc. 291,500 964,560
BTR Plc. 528,649 2,077,778
Cadbury Schwepps Plc. 174,000 1,375,873
Coats Viyella Plc. 205,300 546,971
Courtaulds Textiles Plc. 97,300 542,648
Enterprise Oil Plc. 212,300 1,517,117
General Electric Co. Plc. 283,000 1,523,354
Glaxo Wellcome Plc. 96,000 1,293,009
Grand Metropolitan Plc. 321,000 2,129,336
Hazlewood Foods Plc. 457,600 696,664
Hepworth Plc. 401,587 1,799,852
Holliday Chemical Holdings Plc. 260,550 501,908
Marley Plc. 442,000 885,775
McBride Plc. 238,000 476,956
Mowlen (John) & Co. Plc. 579,000 809,529
National Power Plc. 147,800 1,193,958
Northern Foods Plc. 274,700 789,481
Pace Micro Technology Plc.* 232,300 678,451
Royal Bank of Scotland Group Plc. 178,300 1,365,556
Rugby Group Plc. 915,000 1,563,598
Sainsbury (J) Plc. 304,632 1,793,602
Sears Plc. 817,000 1,256,517
Tate & Lyle Plc. 287,264 2,041,661
The Peninsular & Oriental
Steam Navigation Co. 195,000 1,466,193
Vodafone Group Plc. 564,000 2,098,437
Wimpey (George) Plc. 889,000 2,050,876
------------
41,513,297
12
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
a SHARES OR
a PRINCIPAL
a AMOUNT
COMPANY (000) U.S. $VALUE
- -------------------------------------------------------------------------
OTHER0.2%
Asesores Bursatiles Capital Fund N.V. (b)* 25 $ 648,018
Total Common Stocks And Other Investments
(cost $256,016,357) 279,479,087
CONVERTIBLE BONDS0.6%
JAPAN0.6%
Sumitomo Bank International
.75%, 5/31/01 $166,000 1,637,778
Total Convertible Bonds
(cost $1,520,604) 1,637,778
TIME DEPOSIT4.6%
WestDeutsche Landesbank
5.50%, 7/01/96
(cost $13,500,000) 13,500 13,500,000
TOTAL INVESTMENTS99.8%
(cost $271,036,962) 294,616,865
Other assets less liabilities0.4% 1,079,399
NET ASSETS100% $295,696,264
* Non-income producing security.
(a) Securites or portion thereof, with an aggregate market value of
$54,123,976 have been segregated to collateralize forward exchange currency
contracts.
(b) Illiquid security, valued at fair value (see Notes A & F).
(c) 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, 1996,
these securities amounted to $2,194,141 or .74% of net assets.
Glossary of Terms:
ADR - American Depository Receipt
GDR - Global Depository Receipt
GDS - Global Depository Security
See notes to financial statements.
13
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $271,036,962) $294,616,865
Cash, at value (cost $3,592,729) 3,594,732
Receivable for investment securities sold 1,751,930
Receivable for shares of beneficial interest sold 1,264,751
Dividends and interest receivable 1,062,369
Foreign taxes receivable and other assets 465,636
Total assets 302,756,283
LIABILITIES
Payable for investment securities purchased 4,543,610
Payable for shares of beneficial interest redeemed 1,056,571
Advisory fee payable 737,956
Unrealized depreciation of forward exchange currency contracts 286,459
Distribution fee payable 108,690
Accrued expenses 326,733
Total liabilities 7,060,019
NET ASSETS $295,696,264
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 164,130
Additional paid-in capital 255,489,757
Undistributed net investment income 178,791
Accumulated net realized gain on investments and foreign
currency transactions 16,574,157
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 23,289,429
$295,696,264
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($196,261,123/
10,714,609 shares of beneficial interest issued and outstanding) $18.32
Sales Charge-4.25% of public offering price .81
Maximum offering price $19.13
CLASS B SHARES
Net asset value and offering price per share ($72,470,324/
4,154,179 shares of beneficial interest issued and outstanding) $17.45
CLASS C SHARES
Net asset value, redemption and offering price per share($26,964,817
/1,544,224 shares of beneficial interest issued and outstanding) $17.46
See notes to financial statements.
14
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $626,462) $4,619,090
Interest 612,098 $5,231,188
EXPENSES
Advisory fee 2,627,200
Distribution fee - Class A 317,905
Distribution fee - Class B 577,856
Distribution fee - Class C 216,988
Custodian 511,393
Transfer agency 430,107
Administrative 139,801
Printing 66,850
Audit and legal 52,409
Registration 45,765
Trustees' fees 30,248
Miscellaneous 35,875
Total expenses 5,052,397
Net investment income 178,791
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 19,587,865
Net realized gain on foreign currency transactions 2,161,284
Net change in unrealized appreciation (depreciation) of:
Investments 14,701,212
Foreign currency denominated assets and liabilities 485,113
Net gain on investments and foreign currency transactions 36,935,474
NET INCREASE IN NET ASSETS FROM OPERATIONS $37,114,265
See notes to financial statements.
15
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1996 1995
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ 178,791 (8,715)
Net realized gain on investments and foreign
currency transactions 21,749,149 19,693,549
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 15,186,325 (20,658,406)
Net increase (decrease) in net assets from
operations 37,114,265 (973,572)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments and foreign
currency transactions
Class A (10,091,198) (15,878,472)
Class B (3,210,459) (4,457,892)
Class C (1,293,154) (2,832,662)
CAPITAL STOCK TRANSACTIONS
Net increase 39,204,333 12,753,910
Total increase (decrease) 61,723,787 (11,388,688)
NET ASSETS
Beginning of year 233,972,477 245,361,165
End of year $295,696,264 $233,972,477
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 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
currently sold without an initial or contingent deferred sales charge. Class C
shares purchased on or after July 1, 1996 are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
All three classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, 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, operation 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 gains represent foreign exchange gains and losses
from sales and maturities of debt securities, holding of foreign currency
contracts, 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 year 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 and are determined in accordance with income tax regulations.
6. RECLASSIFICATION OF NET ASSETS
As of June 30, 1996 the Fund reclassified certain components of net assets. The
reclassifications resulted in net increase to undistributed net investment
income of
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
$1,111,732, and net decrease to accumulated capital gains and additionally paid
in capital of $300,884 and $810,848 respectively. These reclassifications were
the result of permanent book and tax differences, primarily resulting from
foreign currency gains. Net assets were not affected by the change.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement, the Fund pays 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 Adviser
believes that the most restrictive expense ratio limitation currently imposed
by any state is 2.5% of the first $30 million of its 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,
1996, no such reimbursement was required. Pursuant to the advisory agreement,
the Fund paid $139,801 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, 1996.
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 $318,980 for the year ended June 30, 1996.
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 $11,734 from the sale of Class A shares and $105,187
in contingent deferred sales charges from the redemptions of Class B shares for
the year ended June 30, 1996. Brokerage commissions paid on securities
transactions for the year ended June 30, 1996, amounted to $887,354, 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 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 $2,164,342 and $588,872, for Class B and Class C shares,
respectively; such costs may be recovered from the Fund in future periods so
long as the Agreement is in effect. In accordance with the Agreement, there is
no provision for recovery of unreimbursed distribution costs, incurred by the
Distributor, beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
Government securities) aggregated $212,052,465 and $191,223,893, respectively,
for the year ended June 30, 1996. There were no purchases or sales of U.S.
government or government agency obligations for the year ended June 30, 1996.
18
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
The Fund enters into forward foreign exchange currency contracts in order to
hedge its exposure to changes in for-eign currency exchange rates on its
foreign portfolio holdings and to hedge certain firm purchase and sale
commitments denominated in foreign currencies. A forward foreign 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 contract and the closing of such contract is
included in net realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward foreign exchange currency contracts
are recorded for financial reporting purposes as unrealized gains or losses.
The Fund's custodian will place and maintain cash not available for investment
or liquid, high quality debt 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 June 30, 1996, the Fund had
outstanding forward foreign exchange currency contracts as follows:
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
--------- ----------- ----------- --------------
FOREIGN CURRENCY SALES
Deutsche Marks,
expiring 7/31/96 10,200 $ 6,723,797 $ 6,719,256 $ 4,541
French Francs,
expiring 8/30/96 35,600 6,833,014 6,939,777 (106,763)
Japanese Yen,
expiring 7/31/96 1,791,000 16,983,870 16,434,601 549,269
FOREIGN CURRENCY BUYS
Deutsche Marks,
expiring 7/31/96 5,100 3,368,004 3,359,684 (8,320)
French Francs,
expiring 8/30/96 17,800 3,467,960 3,469,921 1,961
Japanese Yen,
expiring 7/31/96 1,791,000 17,161,748 16,434,601 (727,147)
----------
$(286,459)
At June 30, 1996, the cost of investments for federal income tax purposes was
$271,984,159. Accordingly, gross unrealized appreciation of investments was
$29,518,606 and gross unrealized depreciation of investments was $6,885,900,
resulting in net unrealized appreciation of $22,632,706, excluding foreign
currency.
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. 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,
1996 1995 1996 1995
------------ ------------ ------------- --------------
CLASS A
Shares sold 3,791,114 2,705,822 $66,200,675 $ 47,501,995
Shares issued in
reinvestment of
distributions 532,927 926,842 8,899,875 15,032,351
Shares converted from
Class B to Class A 29,264 -0- 529,368 -0-
Shares redeemed (3,488,059) (4,770,741) (60,868,130) (83,532,846)
Net increase(decrease) 865,246 (1,138,077) $14,761,788 $(20,998,500)
CLASS B
Shares sold 2,178,890 2,388,681 $36,316,916 $ 40,924,713
Shares issued in
reinvestment of
distributions 141,372 246,119 2,259,131 3,861,611
Shares converted from
Class B to Class A (30,710) -0- (529,368) -0-
Shares redeemed (1,161,885) (1,280,863) (19,416,822) (20,826,680)
Net increase 1,127,667 1,353,937 $18,629,857 $ 23,959,644
CLASS C
Shares sold 1,333,369 2,500,356 $22,186,419 $ 42,839,538
Shares issued in
reinvestment of
distributions 49,344 171,490 789,018 2,692,396
Shares redeemed (1,035,865) (2,228,318) (17,162,749) (35,739,168)
Net increase 346,848 443,528 $ 5,812,688 $ 9,792,766
NOTE F: ILLIQUID SECURITIES
DATE
SECURITY ACQUIRED U.S. $COST
- -------- -------- ----------
Asesores Bursatiles Capital Fund N.V. 10/29/90 $1,113,819
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, 1996 was $1,019,935 representing 0.3% of net assets.
20
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEAR ENDED JUNE 30,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.81 $18.38 $16.01 $14.98 $14.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .05(b) .04 (.09) (.01) .01(b)
Net realized and unrealized gain on
investments and foreign currency
transactions 2.51 .01 3.02 1.17 1.04
Net increase in net asset value
from operations 2.56 .05 2.93 1.16 1.05
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- (.04) (.07)
Distributions from net realized gains
on investments and foreign currency
transactions (1.05) (1.62) (.56) (.09) -0-
Total dividends and distributions (1.05) (1.62) (.56) (.13) (.07)
Net asset value, end of year $18.32 $16.81 $18.38 $16.01 $14.98
TOTAL RETURN
Total investment return(c) 15.83% .59% 18.68% 7.86% 7.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $196,261 $165,584 $201,916 $161,048 $179,807
Ratio of expenses to average net assets 1.72% 1.73% 1.90% 1.88% 1.82%
Ratio of net investment income (loss)
to average net assets .31% .26% (.50)% (.14)% .07%
Portfolio turnover rate 78% 119% 97% 94% 72%
</TABLE>
See footnote summary on page 23.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------
YEAR ENDED JUNE 30,
----------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.19 $17.90 $15.74 $14.81 $13.93
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.07)(b) (.01) (.19)(b) (.12) (.11)(b)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions 2.38 (.08) 2.91 1.14 1.02
Net increase (decrease) in net asset
value from operations 2.31 (.09) 2.72 1.02 .91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.03)
Distributions from net realized gains
on investments and foreign currency
transactions (1.05) (1.62) (.56) (.09) -0-
Total dividends and distributions (1.05) (1.62) (.56) (.09) (.03)
Net asset value, end of year $17.45 $16.19 $17.90 $15.74 $14.81
TOTAL RETURN
Total investment return(c) 14.87% (.22)% 17.65% 6.98% 6.54%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $72,470 $48,998 $29,943 $6,363 $5,585
Ratio of expenses to average net assets 2.55% 2.57% 2.78% 2.70% 2.68%
Ratio of net investment loss to average
net assets (.46)% (.62)% (1.15)% (.96)% (.70)%
Portfolio turnover rate 78% 119% 97% 94% 72%
</TABLE>
See footnote summary on page 23.
22
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MAY 3,1993(A)
YEAR ENDED JUNE 30, TO
-------------------------------------- JUNE 30,
1996 1995 1994 1993
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.20 $17.91 $15.74 $15.93
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.07)(b) (.14) (.11) -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.38 .05 2.84 (.19)
Net increase (decrease) in net asset
value from operations 2.31 (.09) 2.73 (.19)
LESS: DIVIDENDS AND DISTRIBUTIONS
Distributions from net realized gains
on investments and foreign currency
transactions (1.05) (1.62) (.56) -0-
Total dividends and distributions (1.05) (1.62) (.56) -0-
Net asset value, end of period $17.46 $16.20 $17.91 $15.74
TOTAL RETURN
Total investment return(c) 14.85% (.22)% 17.72% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $26,965 $19,395 $13,503 $229
Ratio of expenses to average net assets 2.53% 2.54% 2.78% 2.57%(d)
Ratio of net investment income (loss)
to average net assets (.47)% (.88)% (1.12)% .08%(d)
Portfolio turnover rate 78% 119% 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.
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, 1996, 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, 1996, 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, 1996, 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.
New York, New York
July 31, 1996
FOREIGN TAX CREDIT (UNAUDITED)
_______________________________________________________________________________
The Fund will elect to give the benefit to its shareholders of foreign taxes
that have been paid and/or withheld for the year ended June 30, 1996.
Shareholders will receive more detailed information along with their Form
1099-Div in January 1997.
24
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
W.H. HENDERSON (1)
STIG HOST (1)
RICHARD M. LILLY (1)
ALAN STOGA (1)
ROBERT C. WHITE (1)
OFFICERS
A. RAMA KRISHNA, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
NICHOLAS E. CROSSLAND, VICE PRESIDENT
KELLY A. MORGAN, VICE PRESIDENT
DANIEL V. PARKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, 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
(1) Member of Audit Committee.
25
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
26
ALLIANCE INTERNATIONAL FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING 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
