ALLIANCE INTERNATIONAL FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
January 6, 1997
Dear Shareholder:
The following pages contain investment results and activity for Alliance
International Fund for the fiscal year ended December 31, 1996.
MARKET REVIEW
The MSCI World Index (minus the U.S.), returned 7.2% for the twelve month
period ended December 31, 1996. Of the three regions in which the Fund's assets
are concentrated, namely Japan, Europe and Pacific Ex-Japan, only the Japanese
market showed negative returns for the year. This, unfortunately, impacted upon
the Fund's overall performance since the largest single country weighting
within the portfolio is in Japan.
During the fourth quarter of 1996, Japan experienced another difficult period
which added to the country's disappointing investment performance for the year.
Although the economic outlook is improving for Japan, political entrenchment
and poor fiscal policy are contributing to a stalled recovery. In addition, the
strong dollar, which is good for Japanese earnings in many sectors, is further
encouraging portfolio investment outside of Japan.
In the Pacific Ex-Japan region, every developed market experienced solid
performance in the last quarter of 1996. Some of the Asian emerging markets
lagged, however, there are still attractive stocks in this region. In Europe,
markets in Denmark, Finland, the Netherlands, Spain, Sweden and the United
Kingdom were up over 10% in 1996. While the Fund currently does not invest in
Canada, growth picked up and interest rates moved down sharply in 1996,
resulting in strong positive performance for this country.
INVESTMENT RESULTS
For the twelve month period ended December 31, 1996, Alliance International
Fund Class A shares achieved a total return of 7.2% on a net asset value basis.
The Fund underperformed its benchmark, the unmanaged Lipper International Funds
Average, which posted an 11.78% return, but matched its international equity
index, the unmanaged Morgan Stanley Capital International (MSCI) World Index
(excluding the U.S.), which also had a 7.2% return.
Despite encouraging regional returns relative to the respective regional
indices, the asset mix of the portfolio
during 1996 led to a disappointing total Fund performance relative to the peer
group benchmark. The average manager within the Lipper survey employs a
different asset allocation policy in comparison to Alliance. Our philosophy is
to remain approximately neutral relative to the MSCI Index (minus the U.S.) and
we seek to add value through stock selection. Our peer group managers tend to
underweight Japan relative to the MSCI Index (minus the U.S.) and this is the
main reason why our performance lagged behind their results on average.
However, our stock selection in Japan was effective, and we handily
outperformed the MSCI Japan Index.
Within the Japanese portfolio, we underweighted the financial sector and
concentrated on other sectors such as technology. This led to good performance
in the fourth quarter, relative to the market. Within Europe, performance was
enhanced by our largest holdings, Novartis AG, Bayer and Barclays. Bayer was
mentioned in our last report as a possible candidate for restructuring, while
Barclays reflects good prospects for the banking sector within the United
Kingdom.
INVESTMENT RESULTS*
Period Ended December 31, 1996
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE INTERNATIONAL FUND
Class A -0.29% 7.20%
Class B -0.69% 6.32%
Class C -0.63% 6.38%
MSCI WORLD INDEX (minus the U.S.) 2.23% 7.20%
LIPPER INTERNATIONAL FUNDS AVERAGE 3.39% 11.78%
* 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 DECEMBER 31,
1996. 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 20 FOREIGN COUNTRIES. THE LIPPER INTERNATIONAL
FUNDS AVERAGE IS BASED ON THE PERFORMANCE OF 389 MUTUAL FUNDS WITH GENERALLY
SIMILAR INVESTMENT OBJECTIVES, BUT WHICH MAY HAVE DIFFERENT INVESTMENT POLICIES.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
1
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
INVESTMENT OUTLOOK
1996 was a mixed year for the developed international markets with Japan down
sharply and both Europe and Pacific Ex-Japan performing well. Looking toward
1997, we feel that interest rates should continue to trend down, inflation
should continue to be moderate and GDP growth in Europe and Japan should remain
low.
As mentioned earlier, several factors are impeding recovery in Japan. However,
many stocks in the technology sector will benefit from the stronger dollar, and
we expect good growth from many of them. In Pacific Ex-Japan, we feel that
growth should pick up in many of the Asian countries in 1997, while inflation
should remain moderate. Some of the emerging Asian markets currently appear to
be undervalued, and we expect the best growth prospects here. Continental
Europe has been slow to pull out of its economic doldrums, but the United
Kingdom has its recovery well underway. Presently, Europe is focusing on
European Monetary Union convergence. This continues to result in wide spread
restrictive fiscal policy and is strongly impeding growth in this region.
Even though growth improved in Canada in 1996, we remain cautious. Unemployment
is stubbornly high and consumer confidence low. However, if consumers can
overcome their unemployment worries, and if the government can maintain its
relaxed monetary policy, good things could happen. If positive signs develop
here, the Fund may begin investing in this region sometime in the future.
PORTFOLIO STRATEGY
The largest proportion of the Portfolio's holdings in any one country remains
in Japan, although the largest regional weighting is in Europe. We remain
committed to our policy of approximate benchmark neutrality with respect to
asset allocation. Target allocations are therefore 30% of assets in Japan, 58%
in Europe and 12% in the Pacific region. We will continue to seek long-term
growth of capital and expect our research driven stock selection to drive the
Portfolio's performance.
We thank you for your continued interest and investment in Alliance
International Fund and look forward to reporting its progress to you in future
periods.
Sincerely,
John D. Carifa
Chairman and President
A. Rama Krishna
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
Alliance International Fund is a diversified 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 DECEMBER 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 7.20% 2.62%
Five Years 8.41% 7.47%
Ten Years 7.58% 7.11%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 6.32% 2.33%
Five Years 7.50% 7.50%
Since Inception* 5.73% 5.73%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 6.38% 5.38%
Since Inception* 7.96% 7.96%
Average annual total returns reflect reinvestment 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 A (1%-year 1 for purchases exceeding
$1,000,000); for Class B (3%-year 1; 2%-year 2; 1%-year 3; 0%-year 4); Class C
(1%-year 1).
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
TEN LARGEST HOLDINGS
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
DDI Corp.--Provider of long distance telephone
and mobile communication services $ 5,555,997 1.9%
Rohm Co.--Largest specialist maker of custom
linear integrated circuits 5,315,603 1.8
Toyota Motor Corp. -- One of world's big three
auto makers 4,888,179 1.7
Seven-Eleven Japan Co., Ltd. -- Largest CVS operator 4,332,268 1.5
Novartis AG -- manufactures healthcare products
for use in medical fields, as well as
nutritional and agricultural products 3,479,458 1.2
TDK Corp. -- Largest manufacturer of magnetic
tapes, floppy discs & electronic parts 3,324,842 1.1
Bayer A.G. -- produces and markets polymers,
organic, industrial, healthcare, agro-chemicals,
and imaging technology products and equipment. 3,264,882 1.1
Veba A.G. -- provides electrical energy services
to customers throughout Germany 3,209,969 1.1
Barclays Bank -- offers commercial, investment
banking, insurance, financial and related services 3,164,931 1.1
International Nederlander Groep NV--international
financial service group of companies, offers a
wide range of financial services to individuals,
corporations and other institutions 3,159,206 1.1
$39,695,335 13.6%
4
DISTRIBUTION OF PORTFOLIO BY COUNTRY
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF PORTFOLIO*
- -------------------------------------------------
Japan 34.5%
United Kingdom 21.9
France 7.1
Germany 6.2
Netherlands 4.4
Switzerland 3.3
Hong Kong 2.1
Spain 2.0
Indonesia 1.9
Italy 1.8
Sweden 1.8
Australia 1.7
Finland 1.6
Singapore 1.5
Denmark 1.4
Malaysia 1.3
Norway 1.2
India 1.0
South Korea 1.0
New Zealand 0.6
Belgium 0.6
Thailand 0.4
Philippines 0.3
Peoples Republic of China 0.3
Brazil 0.1
Canada 0.0
100.0%
* Excludes short-term obligations.
5
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Aerospace & Defense $ 2,361,869 0.8%
Basic Industries 23,518,042 8.1
Capital Goods 13,768,800 4.7
Consumer Manufacturing 24,430,463 8.4
Consumer Services 35,482,127 12.2
Consumer Staples 28,155,331 9.7
Energy 14,564,741 5.0
Finance 49,680,240 17.0
Healthcare 16,640,618 5.7
Multi-Industry 18,203,988 6.2
Mutual Funds 663,102 0.2
Technology 19,254,018 6.6
Transportation 4,383,103 1.5
Utilities 29,855,409 10.2
Total Investments* 280,961,851 96.3
Cash and receivables, net of liabilities 10,721,147 3.7
Net Assets $291,682,998 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS-95.8%
AUSTRALIA-1.6%
Coca-Cola Amatil, Ltd. 90,084 $ 963,064
Mayne Nickless, Ltd. 86,000 587,871
Qantas Airways, Ltd. 131,945 220,241
WMC, Ltd. 166,279 1,048,083
Woolworths, Ltd. 810,614 1,952,279
------------
4,771,538
BELGIUM-0.6%
Delhaize Feres NV 12,400 737,313
Kredietbank NV 3,300 1,082,596
------------
1,819,909
BRAZIL-0.1%
Dixie Toga, S.A. 135,628 103,114
Industrias Klabin de Papel e Celulose, S.A. 83,000 76,682
Siderurgica Riograndense, S.A. 1,673,632 28,025
------------
207,821
CANADA-0.0%
Imasco, Ltd. 4 98
DENMARK-1.3%
Bikuben Girobank 13,100 614,160
Den Danske Bank 27,700 2,234,985
ISS International Services Cl. B. 36,550 962,322
------------
3,811,467
FINLAND-1.5%
Kesko (ord) 22,000 310,583
Nokia Corp. 24,000 1,393,902
Orion-Yhtymae OY Series B 45,300 1,744,140
Upm-Kymmene Oy (a) 50,100 1,051,659
------------
4,500,284
FRANCE-6.8%
Alcatel Alsthom Cie Gen D'Electric 4,000 321,326
Assurance Generale de France 59,600 1,924,063
Bouygues 15,955 1,654,387
Compagnie Generale des Eaux 13,152 1,629,900
Elf Aquitaine, S.A. 28,300 2,576,099
GTM Entrepose, S.A. 14,970 692,454
Legris Industries, S.A. 28,720 1,209,467
Pechiney, S.A. Cl. A 19,171 803,272
Salomon, S.A. 10,900 934,856
Simco, S.A. 8,890 776,172
Societe de Immeubles de France 10,812 637,655
Societe Francaise d'Investissemeants
Immobiliers et de Gestion 9,700 702,939
Total, S.A. (ADR) 38,298 1,541,494
Cl. B 20,648 1,679,379
Union du Credit-Bail Immobilier 12,410 1,234,183
Union Immobiliere de France 8,125 663,185
Usinor Sacilor 67,000 974,945
------------
19,955,776
GERMANY-6.0%
Bayer A.G. 80,000 3,264,882
Deutsche Telekom A.G. (a) 28,900 609,439
Henkel KGaA-Vorzug, pfd. 44,700 2,245,457
Hornbach Holding A.G., pfd. 19,300 1,379,646
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Klein, Schanz & Beck A.G., Vorzug 7,180 $ 1,110,502
Lufthansa A.G. 108,800 1,484,793
Preussag A.G. 2,790 631,866
Schmalbach-Lubeca A.G. (a) 7,880 1,935,690
Suedzucker A.G. 3,171 1,547,583
Veba A.G. 55,500 3,209,969
------------
17,419,827
HONG KONG-1.8%
Asia Satellite Telecommunications
Holdings, Ltd. (a) 33,000 75,945
Citic Pacific, Ltd. 174,000 1,010,098
First Pacific Co., Ltd. 571,383 742,440
Hong Kong & China Gas Co., Ltd. 198,960 381,997
warrants expiring 9/30/97 (a) 19,580 10,885
Hysan Development Co., Ltd. 104,000 414,144
warrants expiring 4/30/98 (a) 5,700 5,159
New World Development Co., Ltd. 69,267 465,691
Swire Pacific, Ltd. Cl. A 81,000 774,969
Television Broadcasting, Ltd. 226,000 891,202
Wharf Holdings, Ltd. 117,000 583,903
------------
5,356,433
INDIA-1.2%
Bajaj Auto, Ltd. (GDR) 44,000 1,496,000
Guangshen Railway Co., Ltd. (ADR) (a) 25,000 515,625
Industrial Credit & Investment 4,000 39,000
(GDR) (a)(b) 56,000 546,000
State Bank Of India (GDR) (a)(b) 51,000 885,870
------------
3,482,495
INDONESIA-1.8%
PT Indosat 512,000 1,408,975
PT Telekomunikasi Indonesia (ADR) 13,000 448,500
PT HM Sampoerna 578,000 3,083,319
Telekomunikasi Indostat B 160,000 276,037
------------
5,216,831
ITALY-1.8%
Ente Nazionale Idrocarburi S.p.A. 347,000 1,780,898
Magneti Marelli S.p.A. 404,200 502,295
Saipem 159,200 732,571
Telecom Italia S.p.A. 818,700 2,126,533
------------
5,142,297
JAPAN-32.7%
Amano Corp. 107,000 1,145,670
Asahi Glass Co., Ltd. 196,000 1,844,746
Bank of Tokyo-Mitsubishi 113,000 2,097,833
Canon, Inc. 100,000 2,210,517
Chiba Bank, Ltd. 63,000 429,756
Dai Nippon Printing Co., Ltd. 75,000 1,314,653
Daifuku Co., Ltd. 87,000 1,096,796
Daito Trust Construction Co., Ltd. 102,800 1,145,082
Daiwa Securities Co., Ltd. 53,000 471,375
DDI Corp. 840 5,555,997
East Japan Railway Co. 291 1,309,136
Eisai Co., Ltd. 51,000 1,004,058
Fuji Photo Film 22,000 725,671
Furakawa Co., Ltd. 147,000 495,035
Hirose Electric Co. 38,000 2,201,710
Hokkaido Takushoku Bank, Ltd. 8,000 15,543
Honda Motor Co. 37,000 1,057,508
8
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
House Foods Industry 35,000 $ 565,150
Hoya Corp. 67,000 2,632,329
Ishikawajima-Harima Heavy Industries 122,000 542,527
Ito-Yokado Co., Ltd. 18,000 783,352
Japan Securities Finance 111,000 1,293,930
Japan Tobacco, Inc. 146 989,638
Kamigumi Co., Ltd. 72,000 472,498
Kandenko Co., Ltd. 76,000 721,872
Kao Corp. 141,000 1,643,640
Kirin Brewery Co., Ltd. 71,000 698,903
Kokuyo 46,000 1,135,999
Kuraray Co., Ltd. 148,000 1,367,412
Kyocera Corp. 17,000 1,059,839
Long-Term Credit Bank of Japan 4,000 21,656
Maeda Road Construction Corp. 25,000 289,267
Matsushita Electric Industrial Co., Ltd. 158,000 2,578,534
Matsushita Electric Works 104,000 895,329
Mitsubishi Heavy Industries, Ltd. 152,000 1,207,495
Mitsubishi Materials Corp. 88,000 355,617
Mitsubishi Oil Co. 137,000 819,800
Mitsui Marine & Fire Insurance Co. 153,000 823,064
Mitsui Trust & Banking Co., Ltd. 296,000 2,313,099
National House Industrial Co. 73,000 970,728
NGK Insulators 53,000 503,411
Nikko Securities Co., Ltd. 110,000 820,654
Nippon Express Co., Ltd. 118,000 809,015
Nippon Light Metal Co. 114,000 468,561
Nippon Steel Co. 323,000 953,855
Nisshin Steel Co., Ltd. 601,000 1,613,945
NKK Corp. (a) 362,000 815,836
Nomura Securities Co., Ltd. 111,000 1,667,732
Osaka Gas Co. 253,000 692,522
Rohm Co. 81,000 5,315,603
Sankyo Co., Ltd. 13,000 368,189
Santen Pharmaceutical 26,000 538,814
Seven-Eleven Japan Co., Ltd. 74,000 4,332,268
Shimano, Inc. 59,000 993,437
Shimizu Corp. 101,000 754,382
Shiseido Co., Ltd. 92,000 1,064,502
Sumitomo Electric Industries 78,000 1,091,097
Sumitomo Marine & Fire Insurance Co. 130,000 808,220
Sumitomo Realty and Development Co., Ltd. 150,000 945,514
Sumitomo Rubber Industries 63,000 469,467
Taisho Pharmaceutical Co. 50,000 1,178,655
Takeda Chemical Industries 39,000 818,323
TDK Corp. 51,000 3,324,842
Toagosei Co., Ltd. 57,000 201,796
Tokai Bank 128,000 1,337,363
Tokyo Electric Power Co. 52,400 1,149,262
Tokyo Gas Co., Ltd. 560,000 1,518,349
Tokyo Steel Mfg. Co. 141,000 2,008,894
Toyo Kanetsu 73,000 253,398
Toyota Motor Corp. 170,000 4,888,179
UBE Industries, Ltd. 79,000 223,746
Ushio, Inc. 98,000 1,066,229
Yakult Honsha Co. 64,000 663,155
Yamanouchi Pharmaceutical Co., Ltd. 88,000 1,808,479
Yamatake Honeywell 52,000 839,651
Yamazaki Baking Co., Ltd. 42,000 670,927
------------
95,281,036
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MALAYSIA-1.3%
AMMB Holdings Berhad 100,000 $ 839,438
DCB Holdings Berhad
warrants expiring 12/28/99 (a) 82,250 123,758
Magnum Corp. Berhad 97,000 188,200
Malakoff Berhad 128,000 628,470
Malayan Banking Berhad 73,000 809,345
Resorts World Berhad 233,000 1,060,978
------------
3,650,189
NETHERLANDS-4.2%
Akzo Nobel N.V. 21,100 2,880,630
Apothekers Cooperative Opg 15,580 447,937
CSM CVA 5,600 310,994
Fortis Amev N.V. 88,300 3,090,361
International Nederlander Groep N.V. 87,800 3,159,206
Sgs Thomson Microelectronics (a) 9,000 636,600
Vendex International N.V. 41,500 1,774,131
------------
12,299,859
NEW ZEALAND-0.7%
Fletcher Challenge, Ltd. Forestry Division 193,096 323,527
Lion Nathan, Ltd. 245,000 587,157
Telecom Corp of New Zealand, Ltd. 197,000 1,005,523
------------
1,916,207
NORWAY-1.1%
Bergesen D.Y. AS Cl. A 71,400 1,749,328
Orkla AS Cl. A 12,400 870,518
Schibsted 23,500 433,665
Unitor AS 15,330 197,426
------------
3,250,937
PEOPLES REPUBLIC OF CHINA-0.3%
Advanced Semiconductor
Engineering (GDR) (b) 81,640 793,949
PHILIPPINES-0.3%
Manila Electric Co. Cl. B 91,000 743,916
Phillippine Commerce International Bank 10,070 132,097
------------
876,013
SINGAPORE-1.4%
Overseas Union Bank 143,000 1,103,695
Overseas-Chinese Banking Corp., Ltd. 106,000 1,318,088
Singapore Airlines, Ltd. 20,000 181,519
Singapore Press Holdings., Ltd. 77,000 1,518,759
------------
4,122,061
SOUTH KOREA-1.0%
Hyundai Motor (GDR) 3,000 22,350
Korea Electric Power Corp. 15,290 445,129
(ADR) 6,400 131,200
Korea Mobile Telecom Corp. (ADR) 138,123 1,778,335
Pohang Iron & Steel Co. (ADR) 26,000 526,500
------------
2,903,514
SPAIN-1.7%
Autopistas Cesa 58,000 800,287
Banco De Santander 13,000 832,739
Repsol, S.A. 35,100 1,347,414
Tabacalera, S.A. Series A 28,800 1,240,991
Unidad Editorial, S.A. (a)(c) 297,500 366,920
Viscofan Envolturas Celulosicas 16,700 244,588
------------
4,832,939
10
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SWEDEN-1.7%
Astra AB Series A 40,300 $ 1,991,600
Electrolux AB Series B 12,100 702,664
Incentive AB Series B 5,700 413,759
Sparbanken Sverige AB Series A (b) 29,900 513,008
Stora Kopparbergs Bergslags Aktiebolag
Series B 105,900 1,444,262
------------
5,065,293
SWITZERLAND-3.2%
Adecco, S.A. 2,505 628,823
Baloise Holdings, Ltd. 810 1,627,867
Nestle, S.A. 1,360 1,460,082
Novartis AG (a) 3,038 3,479,458
Schindler-Holdings AG 690 750,056
Swissair Zuerich (a) 860 695,839
Zurich Vericher Namen 2,570 714,262
------------
9,356,387
THAILAND-0.4%
Bangkok Bank Co., Ltd. 27,000 261,093
The Thai Farmers Bank, Ltd. 157,000 979,490
Warrants expiring 9/15/02 (a) 5,625 5,319
------------
1,245,902
UNITED KINGDOM-21.1%
Anglian Water Plc. 158,000 1,591,538
B.A.T. Industries Plc. 138,000 1,144,214
BAA Plc. 237,000 1,965,063
Barclays Bank Plc. 184,380 3,164,931
Bass Plc. 106,000 1,492,658
BPB Industries Plc. 107,000 703,879
British Aerospace Plc. 83,100 1,819,343
British Petroleum Plc. 235,000 2,818,050
British Sky Broadcasting Group Plc. 161,000 1,439,724
British Telecommunications Plc. 228,000 1,542,818
BTR Plc. 487,449 2,379,889
Cadbury Schwepps Plc. 197,000 1,663,780
Compass Group Plc. 127,000 1,348,895
General Electric Co. Plc. 243,000 1,594,365
Glaxo Wellcome Plc. 119,200 1,939,914
Grand Metropolitan Plc. 220,000 1,726,120
Hanson Plc. 693,000 973,486
Hepworth Plc. 113,997 492,126
Holliday Chemical Holdings Plc. 347,000 725,224
Kingfisher Plc. 70,000 755,477
Ladbroke Group Plc. 442,000 1,756,681
National Grid Holdings Plc. 584,000 1,950,878
National Westminster Bank 134,000 1,574,750
Pearson Plc. 98,800 1,268,561
Rank Group Plc. 299,000 2,243,510
Reed International Plc. 117,500 2,210,156
Reuters Holdings Plc. 183,000 2,359,067
Rugby Group Plc. 565,000 909,827
Sainsbury (J) Plc. 304,800 2,020,732
Sears Plc. 948,600 1,527,544
Shell Transport & Trading Plc. 73,200 1,269,037
Siebe Plc. 95,000 1,764,150
Smithkline Beecham Plc. 127,800 1,768,988
Tesco Plc. 56,000 339,605
TI Group Plc. 206,000 2,043,283
Tomkins Plc. 308,100 1,425,077
United Assurance Group Plc. 133,000 1,093,643
Vodafone Group Plc. 302,000 1,277,871
Wimpey (George) Plc. 661,000 1,415,449
------------
61,500,303
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
OTHER-0.2%
Asesores Bursatiles Capital Fund N.V. (a)(c) 25 $ 663,103
Total Common Stocks And Other Investments
(cost $261,963,709) 279,442,468
CONVERTIBLE BONDS-0.5%
JAPAN-0.5%
Sumitomo Bank International
.75%, 5/31/01
(cost $1,520,604) $166,000 1,519,385
TIME DEPOSIT-3.1%
Societe General
6.25%, 1/02/97
(cost $9,000,000) 9,000 9,000,000
TOTAL INVESTMENTS-99.4%
(cost $272,484,313) 289,961,853
Other assets less liabilities-0.6% 1,721,145
NET ASSETS-100% $291,682,998
(a) Non-income producing security.
(b) 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 December 31, 1996,
these securities amounted to $2,738,827 or .94% of net assets.
(c) Illiquid security, valued at fair value (see Notes A & F).
Glossary of Terms:
ADR - American depository receipt.
GDR - Global depository receipt.
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $272,484,313) $289,961,853
Cash, at value (cost $1,997,610) 1,955,275
Receivable for investment securities sold 10,141,903
Dividends and interest receivable 370,025
Receivable for shares of beneficial interest sold 355,634
Foreign taxes receivable 347,044
Total assets 303,131,734
LIABILITIES
Payable for investment securities purchased 9,995,983
Advisory fee payable 618,071
Payable for shares of beneficial interest redeemed 308,724
Distribution fee payable 215,012
Accrued expenses 310,946
Total liabilities 11,448,736
NET ASSETS $291,682,998
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 173,940
Additional paid-in capital 271,188,434
Distributions in excess of net investment income (1,269,886)
Accumulated net realized gain on investments and foreign
currency transactions 4,116,538
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 17,473,972
$291,682,998
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($193,414,162/
11,342,582 shares of beneficial interest issued and outstanding) $17.05
Sales Charge--4.25% of public offering price .76
Maximum offering price $17.81
CLASS B SHARES
Net asset value and offering price per share ($72,962,700/
4,496,039 shares of beneficial interest issued and outstanding) $16.23
CLASS C SHARES
Net asset value and offering price per share ($24,493,044/
1,507,643 shares of beneficial interest issued and outstanding) $16.25
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share($813,092
/47,762 shares of beneficial interest issued and outstanding) $17.02
See notes to financial statements.
13
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $315,072) $2,333,921
Interest 293,055 $ 2,626,976
EXPENSES
Advisory fee 1,455,099
Distribution fee - Class A 164,067
Distribution fee - Class B 362,676
Distribution fee - Class C 126,307
Custodian 292,692
Transfer agency 234,819
Administrative 69,061
Audit and legal 45,783
Printing 33,442
Registration 26,225
Trustees' fees 17,793
Miscellaneous 29,253
Total expenses 2,857,217
Net investment loss (230,241)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 5,562,844
Net realized loss on foreign currency transactions (584,512)
Net change in unrealized appreciation (depreciation) of:
Investments (6,102,363)
Foreign currency denominated assets and liabilities 286,906
Net loss on investments and foreign currency transactions (837,125)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(1,067,366)
See notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ (230,241) $ 178,791
Net realized gain on investments and foreign
currency transactions 4,978,332 21,749,149
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency denominated assets
and liabilities (5,815,457) 15,186,325
Net increase (decrease) in net assets from
operations (1,067,366) 37,114,265
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,211,980) -0-
Class B -0- -0-
Class C -0- -0-
Advisor Class (6,456) -0-
Net realized gain on investments and foreign
currency transactions
Class A (11,329,381) (10,091,198)
Class B (4,543,253) (3,210,459)
Class C (1,515,454) (1,293,154)
Advisor Class (47,863) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 15,708,487 39,204,333
Total increase (decrease) (4,013,266) 61,723,787
NET ASSETS
Beginning of period 295,696,264 233,972,477
End of period $291,682,998 $295,696,264
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 (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. On April 15, 1996 the
Board of Directors approved the creation of a fourth class of shares, Advisor
Class shares. The Fund offers Class A, Class B, Class C, and Advisor Class
shares. Class A shares are sold with a front-end sales charge of up to 4.25%
for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000
or more, Class A shares redeemed within one year of purchase will be subject to
a contingent deferred sales charge of 1%. Class B shares are sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares purchased on or after July 1, 1996 are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. Advisor Class shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered soley to investors participating in
fee based programs. All four classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a 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 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 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 INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment 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 tax regulations.
16
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
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. Pursuant to the advisory agreement, the
Fund paid $69,061 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, 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 $175,445 for the six months ended December 31, 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 $10,902 from the sale of Class A shares and $146,371
in contingent deferred sales charges from the redemptions of Class B shares for
the six months ended December 31, 1996. Brokerage commissions paid on
securities transactions for the six months ended December 31, 1996, amounted to
$1,457,465, 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. There is no distribution fee on the Advisor Class shares. The
fees are accrued daily and paid monthly. The Agreement provides that the
Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has incurred expenses in
excess of the distribution costs reimbursed by the Fund in the amount of
$2,302,077 and $688,366, 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 $86,423,441 and $86,056,797, respectively,
for the six months ended December 31, 1996. There were no purchases or sales of
U.S. Government or government agency obligations for the six months ended
December 31, 1996.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward foreign exchange currency contracts in order to
hedge its exposure to changes in foreign 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
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
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 from 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 high grade liquid assets 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, 1996, the Fund had no
outstanding forward foreign exchange currency contracts.
At December 31, 1996, the cost of investments for federal income tax purposes
was $273,569,521. Accordingly, gross unrealized appreciation of investments was
$34,800,539 and gross unrealized depreciation of investments was $18,408,207,
resulting in net unrealized appreciation of $16,392,332, excluding foreign
currency.
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $.01 par value shares of beneficial interest
authorized, divided into four classes, designated Class A, Class B, Class C and
Advisor Class. Transactions in shares of beneficial interest were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30, DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
Shares sold 2,202,060 3,791,114 $ 38,903,868 $ 66,200,675
Shares issued in
reinvestment of
dividends and
distributions 663,142 532,927 11,054,555 8,899,875
Shares converted
from Class B 61,039 29,264 1,089,703 529,368
Shares redeemed (2,298,268) (3,488,059) (40,943,239) (60,868,130)
Net increase 627,973 865,246 $ 10,104,887 $ 14,761,788
CLASS B
Shares sold 774,829 2,178,890 $ 13,074,500 $ 36,316,916
Shares issued in
reinvestment of
distributions 214,831 141,372 3,409,345 2,259,131
Shares converted
to Class A (64,222) (30,710) (1,089,703) (529,368)
Shares redeemed (583,578) (1,161,885) (9,897,915) (19,416,822)
Net increase 341,860 1,127,667 $ 5,496,227 $ 18,629,857
18
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30, DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 741,971 1,333,369 $ 12,555,419 $ 22,186,419
Shares issued in
reinvestment of
distributions 50,633 49,344 804,053 789,018
Shares redeemed (829,185) (1,035,865) (14,113,475) (17,162,749)
Net increase(decrease) (36,581) 346,848 $ (754,003) $ 5,812,688
OCTOBER 2,1996* OCTOBER 2,1996*
TO TO
DEC. 31, 1996 DEC. 31, 1996
(UNAUDITED) (UNAUDITED)
-------------- ---------------
ADVISOR CLASS
Shares sold 49,879 $ 904,088
Shares issued in
reinvestment of
dividends and
distributions 2,960 49,249
Shares redeemed (5,077) (91,961)
Net increase 47,762 $ 861,376
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 December 31, 1996 was $1,030,023 representing 0.4% of net assets.
* Commencement of distribution.
19
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1996 ---------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.32 $16.81 $18.38 $16.01 $14.98 $14.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .01(a) .05(a) .04 (.09) (.01) .01(a)
Net realized and unrealized gain
on investments and foreign currency
transactions (.08) 2.51 .01 3.02 1.17 1.04
Net increase (decrease) in net asset
value from operations (.07) 2.56 .05 2.93 1.16 1.05
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.12) -0- -0- -0- (.04) (.07)
Distributions from net realized gains
on investments and foreign currency
transactions (1.08) (1.05) (1.62) (.56) (.09) -0-
Total dividends and distributions (1.20) (1.05) (1.62) (.56) (.13) (.07)
Net asset value, end of period $17.05 $18.32 $16.81 $18.38 $16.01 $14.98
TOTAL RETURN
Total investment return (b) (.29)% 15.83% .59% 18.68% 7.86% 7.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $193,414 $196,261 $165,584 $201,916 $161,048 $179,807
Ratio of expenses to average net assets 1.68%(c) 1.72% 1.73% 1.90% 1.88% 1.82%
Ratio of net investment income (loss)
to average net assets .12%(c) .31% .26% (.50)% (.14)% .07%
Portfolio turnover rate 62% 78% 119% 97% 94% 72%
Average commission rate paid (d) $.0603 -- -- -- -- --
</TABLE>
See footnote summary on page 23.
20
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1996 ----------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.45 $16.19 $17.90 $15.74 $14.81 $13.93
INCOME FROM INVESTMENT OPERATIONS
Net investment (loss) (.06)(a) (.07)(a) (.01) (.19)(a) (.12) (.11)(a)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.08) 2.38 (.08) 2.91 1.14 1.02
Net increase (decrease) in net asset
value from operations (.14) 2.31 (.09) 2.72 1.02 .91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- -0- (.03)
Distributions from net realized gains
on investments and foreign currency
transactions (1.08) (1.05) (1.62) (.56) (.09) -0-
Total dividends and distributions (1.08) (1.05) (1.62) (.56) (.09) (.03)
Net asset value, end of period $16.23 $17.45 $16.19 $17.90 $15.74 $14.81
TOTAL RETURN
Total investment return (b) (.69)% 14.87% (.22)% 17.65% 6.98% 6.54%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $72,963 $72,470 $48,998 $29,943 $6,363 $5,585
Ratio of expenses to average net assets 2.53%(c) 2.55% 2.57% 2.78% 2.70% 2.68%
Ratio of net investment loss
to average net assets (.73)%(c) (.46)% (.62)% (1.15)% (.96)% (.70)%
Portfolio turnover rate 62% 78% 119% 97% 94% 72%
Average commission rate paid (d) $.0603 -- -- -- -- --
</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 PERIOD
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------------
SIX MONTHS
ENDED MAY 3,1993(E)
DECEMBER 31, YEAR ENDED JUNE 30, TO
1996 ------------------------------------- JUNE 30,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.46 $16.20 $17.91 $15.74 $15.93
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.06)(a) (.07)(a) (.14) (.11) -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.07) 2.38 .05 2.84 (.19)
Net increase (decrease) in net asset
value from operations (.13) 2.31 (.09) 2.73 (.19)
LESS: DIVIDENDS AND DISTRIBUTIONS
Distributions from net realized gains
on investments and foreign currency
transactions (1.08) (1.05) (1.62) (.56) -0-
Total dividends and distributions (1.08) (1.05) (1.62) (.56) -0-
Net asset value, end of period $16.25 $17.46 $16.20 $17.91 $15.74
TOTAL RETURN
Total investment return (b) (.63)% 14.85% (.22)% 17.72% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $24,493 $26,965 $19,395 $13,503 $229
Ratio of expenses to average net assets 2.51%(c) 2.53% 2.54% 2.78% 2.57%(c)
Ratio of net investment income (loss)
to average assets (.68)%(c) (.47)% (.88)% (1.12)% .08%(c)
Portfolio turnover rate 62% 78% 119% 97% 94%
Average commission rate paid (d) $.0603 -- -- -- --
</TABLE>
See footnote summary on page 23.
22
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
-----------------
OCTOBER 2,1996(E)
TO
DECEMBER 31,1996
(UNAUDITED)
-----------------
Net asset value, beginning of period $17.96
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.02)(a)
Net realized and unrealized gain on investments
and foreign currency transactions .31
Net increase in net asset value from operations .29
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.15)
Distributions from net realized gains on investments
and foreign currency transactions (1.08)
Total dividends and distributions (1.23)
Net asset value, end of period $17.02
TOTAL RETURN
Total investment return based on net asset value (b) 1.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $813
Ratio of expenses to average net assets 3.15%(c)
Rate of net investment loss to average net assets (1.22)%(c)
Portfolio turnover rate 62%
Average commission rate paid (d) $.0603
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(e) Commencement of distribution.
23
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)
OFFICERS
A. RAMA KRISHNA, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
MARK H. BREEDON, 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.
24
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
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
25
ALLIANCE INTERNATIONAL FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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.
INTSR
