ALLIANCE INTERNATIONAL FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
January 30, 1998
Dear Shareholder:
This semi-annual report contains investment results and market activity for
Alliance International Fund for the period ended December 31, 1997.
MARKET REVIEW
Third quarter equity market volatility spilled over into the fourth quarter as
global equities once again experienced three consecutive months of staggered
price performance. Concerns about an upward drift in interest rates abated
rapidly in the face of the deflationary impulse emanating from the economic
crisis in Asia. This allowed bonds to rally sharply during the period and
provided support to equities, which were generally under pressure from an
increasingly uncertain outlook for corporate earnings.
As the quarter and year drew to a close, the Asian crisis, which has so broadly
affected the investment equation, appeared to recede slightly on positive news
from both Korea and Japan. In the case of Korea, faster than expected receipt
of funds from the International Monetary Fund (IMF) helped stem the slide in
the won. This helped buy time for the authorities to continue working on a plan
to restructure the economy. In Japan, government officials made several
attempts to restore confidence in the financial system and the economy. This
was accomplished through measures designed to provide funding for the
capital-strapped financial institutions, to create additional fiscal spending
and to introduce a tax cut for corporations and individuals. With news turning
for the better, albeit modestly, investors pushed equity prices higher toward
year-end, thus allowing many markets in Europe and the U.S. to finish at or
near the record highs achieved during the summer.
INVESTMENT RESULTS
During the six month period ended December 31, 1997, your Fund, as well as its
benchmarks, performed poorly. Your Fund's Class A shares posted a -7.49% return
at net asset value, while the Lipper International Funds Average achieved a
- -6.45% return and the MSCI World Index (minus the U.S.) had a -7.92% return.
Your Fund underperformed its Lipper benchmark as a result of its overweight
exposure to European technology stocks such as Nokia Corp. and
Telefonaktiebolaget LM Ericsson
which exhibited poor stock performance. The Fund's overweight position in Hong
Kong, which saw a significant decline during the period, also hurt performance.
Stock selection in Japan, which was also hit by the Asian crisis, contributed
significantly to your Fund's performance during the period.
INVESTMENT RESULTS*
Period Ended December 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE INTERNATIONAL FUND
Class A -7.49% 1.41%
Class B -7.83% 0.57%
Class C -7.88% 0.50%
MSCI WORLD INDEX
(minus the U.S.) -7.92% 2.56%
LIPPER INTERNATIONAL FUNDS AVERAGE -6.45% 5.44%
* 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,
1997. 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. TOTAL RETURN FOR ADVISOR CLASS SHARES WILL
DIFFER DUE TO DIFFERENT EXPENSES CHARGED TO THAT CLASS. RETURNS FOR THE FUND
AND ITS COMPARATIVE BENCHMARKS INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS
PAID DURING THE PERIOD. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
ALL COMPARATIVE BENCHMARKS 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 FOR THE SIX AND 12 MONTH PERIODS ENDED DECEMBER 31,
1997 REFLECTS THE PERFORMANCE OF 472 AND 421 MUTUAL FUNDS, RESPECTIVELY. THESE
FUNDS HAVE GENERALLY SIMILAR INVESTMENT OBJECTIVES TO YOUR FUND, ALTHOUGH
INVESTMENT POLICIES FOR THE VARIOUS FUNDS MAY DIFFER. AN INVESTOR CANNOT INVEST
DIRECTLY IN THE INDEX OR AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
MARKET PERFORMANCE
European equities rose 0.1% and 23.8%, during the fourth quarter and year,
respectively, in U.S. dollar terms. Measured in local terms, the two best
performing markets were Switzerland and Italy, both returning over 55% for the
year. Even Austria, the most poorly performing developed market in Europe,
appreciated 18.5%.
1
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
Japan suffered further declines in equity prices during the quarter on the back
of concerns about the health of the banking system, the bankruptcy of several
prominent corporations and a backward slide in domestic activity toward near
recession levels. Overall, equity prices fell 13.6% for the fourth quarter and
14.5% for the year as measured by the MSCI Japan Index in local currency terms.
A further strengthening of the U.S. dollar added to these loses for
dollar-based investors, thus bringing U.S. dollar returns to a decline of 19.8%
for the fourth quarter and 23.7% for the year as measured by the MSCI Japan
Index in local currency terms. Market breadth continued to narrow as only a
handful of export sensitive and domestically oriented stocks did well. By
quarter's end, nearly 30% of the stocks listed on the Tokyo Stock Exchange were
trading at prices below $5.00 per share.
In the Asian emerging markets, a material widening in risk premiums for both
equity and debt led to significant declines in prices for both asset groups. As
measured by the MSCI Far East Free ex-Japan Index, equity prices fell in U.S.
dollar terms by 44.3% for the full year. This decline was composed almost
equally of declining local prices and depreciating currencies versus the U.S.
dollar.
EXPORTS DRIVING EUROPEAN GROWTH
On the economic front, the UK economy appeared to slow modestly under the
weight of high short-term interest rates and a strong currency. Increased
domestic activity in all Continental markets but Germany appeared evident
during the quarter. Given the 1% value added tax increase in Germany scheduled
for this spring, we do not expect a material improvement in domestic
consumption. Exports, which have been driving economic growth in much of
Europe, should continue to do so in 1998 even with the Asian crisis providing a
modestly slower tempo.
We used price weakness in October to add to many of our positions in Europe as
we still find many opportunities to generate significant returns with these
stocks. Nokia Corp. is a prime example of a well managed company with great
growth prospects that investors sold off to unusually low levels in the fourth
quarter. Like many companies, Nokia Corp. is "exposed" to Asia and may
experience some decline in sales as a result of the slowdown in Asia. But, in
our view, this impact will be minor and in no way deserves the price adjustment
that the markets imposed on Nokia Corp. in October and November. There is a
long list of companies that fit this characterization. We continue with the
theme of restructuring and unlocking of shareholder value in many of our core
holdings. This includes such stocks as Nestle, SA, Ciba Specialty Chemical
Holding, Akzo Nobel NV and Novartis AG.
MORE OF THE SAME IN JAPAN
The outlook for Japan appears to be lackluster, with poor progress on financial
restructuring. The authorities seem to be interested only in quelling the
immediate threats and appear hesitant to clean up the financial system due to
the lack of consensus. The possibility of a significant new fiscal stimulus
package exists to bail out the banking system. However, the focus seems to be
on saving the system rather than cleaning it up and strengthening it for the
medium term. The trend toward restructuring is already slowing down in both the
financial and manufacturing companies. Additionally, the lack of rapid capacity
closure is going to make for slower profit growth in the year ahead.
Earnings momentum is remarkably slow for companies in general with the obvious
exceptions. The economy continues to be disinflationary. Japanese Government
bond yields are at all time lows. The stock market has the potential for
further downside, although it is likely to be volatile as a result of potential
policy announcements. The Fund's cash levels are relatively high right now due
to recent sales and price strength in the stocks we would like to buy. Quality
companies that are well-positioned in growth areas, both domestically and
abroad, should continue to do well. We expect the companies in the portfolio to
deliver earnings growth at or above market expectations.
We are still focusing on companies such as Rohm Co., Advantest Corp., Nintendo
Co. and Sony Corp. We are looking for companies like these which earn a return
on investment that is significantly in excess of their cost of capital and
trade at reasonable valuations. As long as the Asian currencies are weak, we
expect the Japanese currency to continue to remain weak versus the U.S. dollar.
We are, however, only partly hedged because of the possibility of a stimulus
package which would boost the yen.
2
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SOME STABILITY IN ASIA
The Asian crisis appears to be slowly abating, although the repercussions are
likely to last for some time. Our response has been to maintain the overweight
position in Hong Kong that we initiated at the end of October, but to otherwise
further lighten our exposure to Asia. Although there are some well managed
companies that look very inexpensive, they are unlikely to escape the credit
crunch that is slowly developing in the region.
The big question is whether China devalues. China is a much larger exporter
than many of the Asian countries put together. Even though the renminbi has
soared over 60% relative to the rest of Asia, anecdotal evidence indicates that
manufacturing costs in China are still fairly competitive versus the rest of
Asia. Any decline in the Chinese currency is likely to encounter significant
opposition from U.S. Treasury officials and the IMF as it would exacerbate
China's trade surplus and prolong the Asian crisis. We do not foresee a Chinese
devaluation in the near term, however, it is possible in the medium term.
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.
3
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 RETURNS AS OF DECEMBER 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 1.41% -2.92%
Five Years 10.03% 9.07%
Ten Years 8.32% 7.85%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 0.57% -3.16%
Five Years 9.12% 9.12%
Since Inception* 5.01% 5.01%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 0.50% -0.43%
Since Inception* 6.32% 6.32%
The average annual total returns reflect reinvestment of dividends and/or
capital gains distributions in additional shares with and without the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/17/90, Class B; 5/3/93, Class C.
4
TEN LARGEST HOLDINGS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S.$ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Ciba Specialty Chemical Holding--Develops and
manufactures and markets chemical products which
provide color, performance and care for plastics,
coatings, fibers, fabrics, and other materials. $ 9,003,416 3.5%
Nokia Corp.--Develops and manufactures mobile
phones, networks, and systems for cellular and
fixed networks. 8,834,884 3.5
Nestle, SA--A holding company whose subsidiaries
produce and sell a variety of food and consumer
products. 8,428,219 3.3
Novartis AG--Manufactures healthcare products for
use in medical fields, as well as nutritional
and agricultural products. 8,158,431 3.2
Sanofi, SA--Researches and manufactures health
care products and beauty aids. 7,274,206 2.8
Akzo Nobel NV--A worldwide operating company,
products include chemicals, man-made fibres,
paints, enamels and salts, ethical drugs,
veterinary products, hospital supplies and
diagnostics. 7,172,191 2.8
Ladbroke Group Plc.--Diversified company with
interests in off-track betting, hotels, and
real estate. 6,813,235 2.7
Credito Italiano--provides a full range of banking
services. 5,987,402 2.3
HSBC Holdings Plc.--Provides a variety of banking
and financial services worldwide. 5,447,284 2.1
KLM Royal Dutch Airlines NV--An international airline
providing both cargo and passenger services. 5,344,243 2.1
$72,463,511 28.3%
5
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
U.S.$ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Aerospace & Defense $ 8,805 0.0%
Basic Industries 12,296,212 4.8
Capital Goods 3,112,354 1.2
Consumer Manufacturing 12,970,584 5.1
Consumer Services 37,007,842 14.4
Consumer Staples 27,789,227 10.8
Energy 9,212,989 3.6
Finance 54,292,993 21.2
Healthcare 34,953,010 13.6
Multi Industry 6,629,810 2.6
Mutual Funds 521,088 0.2
Technology 30,459,013 11.9
Transportation 505,250 0.2
Utilities 8,485,154 3.3
Total Investments* 238,244,331 92.9
Cash and receivables, net of liabilities 18,244,523 7.1
Net Assets $256,488,854 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-92.9%
ARGENTINA-0.8%
Telecom Argentina, SA (ADR) 58,000 $ 2,073,500
AUSTRALIA-1.3%
Coca-Cola Amatil, Ltd. 139,083 1,039,362
Normandy Mining, Ltd. 1,042,173 1,012,062
Qantas Airways, Ltd. 135,697 240,204
Woolworths, Ltd. 309,504 1,034,820
------------
3,326,448
BELGIUM-0.3%
Barco NV 4,444 814,378
BRAZIL-0.6%
Dixie Toga, SA 85,928 43,886
Telebras (ADR) 13,000 1,513,688
------------
1,557,574
CHINA-0.2%
Guangshen Railway Co., Ltd. (ADR) 37,600 505,250
DENMARK-1.2%
Sophus Berendsen AS Cl. B 18,757 3,093,344
FINLAND-5.3%
Enso OY Cl. R 150,000 1,164,397
Nokia Corp. 124,400 8,834,884
Orion-Yhtymae OY Series B 137,634 3,538,615
------------
13,537,896
FRANCE-9.8%
Banque Nationale De Paris (a) 63,573 3,379,082
Elf Aquitaine, SA (a) 29,384 3,417,596
Sanofi, SA (a) 65,343 7,274,206
SGS Thomson Microelectronics (a) (b) 18,320 1,133,871
Societe Generale (a) 36,422 4,962,373
Total, SA (ADR) 38,298 2,125,539
Cl. B 24,778 2,696,617
------------
24,989,284
GERMANY-3.9%
Adidas AG 23,920 3,164,514
Merck KG 60,480 2,033,930
Prosieben Media AG pfd. (b) 105,914 4,886,527
------------
10,084,971
HONG KONG-5.9%
Cheung Kong Holdings 384,000 2,514,905
Citic Pacific, Ltd. 218,000 869,299
Dickson Concept International, Ltd. 329,000 479,765
HSBC Holdings Plc. 221,000 5,447,284
Hysan Development Co., Ltd.
warrants, expiring 4/30/98 (b) 4,700 33
Sun Hung Kai Properties, Ltd. 716,000 5,012,647
Television Broadcasting, Ltd. 265,000 755,775
------------
15,079,708
INDIA-0.4%
Industrial Credit & Investment Corp 4,000 52,000
(GDR) (c) 33,300 432,900
State Bank Of India (GDR) (c) 14,100 256,620
Videsh Sanchar Nigam (GDR) (c) 11,600 162,690
------------
904,210
ITALY-3.7%
Credito Italiano 1,942,000 5,987,402
Telecom Italia SpA 560,572 3,580,175
------------
9,567,577
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S.$ VALUE
- -------------------------------------------------------------------------
JAPAN-20.5%
Advantest Corp. (a) 41,900 $ 2,374,119
Bank of Tokyo-Mitsubishi (a) 195,000 2,687,596
Bridgestone Corp. (a) 134,000 2,903,675
Canon, Inc. 134,000 3,119,142
Dai Nippon Printing Co., Ltd. 37,000 694,104
Daito Trust Construction Co., Ltd. 282,200 1,722,155
Fuji Photo Film Co. 20,000 765,697
Fujitsu, Ltd. 248,000 2,658,499
Honda Motor Co. (a) 113,000 4,144,487
Hoya Co. 52,000 1,632,465
Japan Tobacco, Inc. 270 1,914,395
Kokuyo 40,000 689,127
Nintendo Co. (a) 39,800 3,900,766
Rohm Co. (a) 34,000 3,462,481
Santen Pharmaceutical 99,000 1,137,060
Shimano, Inc. 52,000 955,590
Shiseido Co., Ltd. 91,000 1,240,276
Sony Corp. (a) 42,000 3,730,475
Sumitomo Electric Industries 102,000 1,390,199
Sumitomo Realty and Development Co., Ltd. 187,000 1,073,890
Takeda Chemical Industries 17,000 484,227
TDK Corp. (a) 48,000 3,616,539
Tokai Bank (a) 631,000 2,937,580
Yamanouchi (a) Pharmaceutical Co., Ltd. 155,000 3,323,124
------------
52,557,668
MEXICO-1.6%
Fomento Ecomo, SA 304,000 2,429,589
Panamerican Beverages Cl. A 52,000 1,696,500
------------
4,126,089
NETHERLANDS-6.9%
Akzo Nobel NV 41,600 7,172,191
International Nederlander Groep NV 123,200 5,188,666
KLM Royal Dutch Airlines NV 144,490 5,344,243
------------
17,705,100
PHILIPPINES-0.1%
Manila Electric Co. Cl. B 110,300 364,943
RUSSIA-0.4%
Lukoil Oil Co. (ADR) 10,550 973,237
SINGAPORE-0.4%
Singapore Press Holdings., Ltd. 87,000 1,089,113
SOUTH KOREA-0.4%
S.K. Telecom Co., Ltd. (ADR) 146,592 952,848
SPAIN-0.1%
Unidad Editorial, SA (d) 297,500 312,313
SWEDEN-4.0%
ABB AB Series B 276,501 3,276,453
Sparbanken Sverige AB Series A 152,300 3,465,425
Telefonaktiebolaget LM Ericsson 92,065 3,464,322
------------
10,206,200
SWITZERLAND-12.6%
Ciba Specialty Chemical Holding (b) 75,608 9,003,416
Nestle, SA 5,626 8,428,219
Novartis AG 5,030 8,158,431
Sairgroup (b) 2,012 2,753,901
Zurich Vericher Namen 8,170 3,891,541
------------
32,235,508
UNITED KINGDOM-12.3%
Bass Plc. 176,200 2,740,564
BPB Industries Plc. 618,000 3,450,906
British Aerospace Plc. 309 8,805
8
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Compass Group Plc. 388,000 $ 4,772,866
Guardian Royal Exchange Plc. 688,885 3,742,073
Diageo Plc. 569,200 5,206,979
Ladbroke Group Plc. 1,571,389 6,813,235
Tomkins Plc. 353,000 1,669,679
United Assurance Group Plc. 378,201 3,260,977
------------
31,666,084
OTHER-0.2%
Asesores Bursatiles Capital Fund NV (b)(d) 25 521,088
Total Common Stocks & Other Investments
(cost $230,927,958) 238,244,331
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
TIME DEPOSIT-3.6%
Bank of Montreal 6.25%, 1/02/98
(cost $9,200,000) $9,200 $ 9,200,000
TOTAL INVESTMENTS-96.5%
(cost $240,127,958) 247,444,331
Other assets less liabilities-3.5% 9,044,523
NET ASSETS-100% $256,488,854
(a) Securities or portion thereof, with an aggregate market value of
$53,247,970 have been segregated to collateralize forward exchange currency
contracts.
(b) Non-income producing security.
(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 December 31, 1997,
these securities amounted to $852,210 or .33% of net assets.
(d) Restricted and illiquid Securities valued at fair value (See Notes A & F).
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $240,127,958) $247,444,331
Cash, at value (cost $3,082,433) 3,070,564
Receivable for investment securities sold 10,368,053
Unrealized appreciation of forward exchange currency contracts 3,381,946
Receivable for shares of beneficial interest sold 2,741,084
Foreign taxes receivable 278,265
Dividends and interest receivable 193,749
Total assets 267,477,992
LIABILITIES
Payable for investment securities purchased 9,200,000
Payable for shares of beneficial interest redeemed 583,671
Advisory fee payable 545,039
Distribution fee payable 91,649
Accrued expenses 568,779
Total liabilities 10,989,138
NET ASSETS $256,488,854
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 162,957
Additional paid-in capital 247,192,600
Distributions in excess of net investment income (1,990,398)
Accumulated net realized gain on investments and foreign
currency transactions 452,251
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 10,671,444
$256,488,854
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($126,895,431/
7,895,359 shares of beneficial interest issued and outstanding) $16.07
Sales Charge--4.25% of public offering price .71
Maximum offering price $16.78
CLASS B SHARES
Net asset value and offering price per share ($69,144,028/
4,563,529 shares of beneficial interest issued and outstanding) $15.15
CLASS C SHARES
Net asset value and offering price per share ($19,207,127/
1,267,118 shares of beneficial interest issued and outstanding) $15.16
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($41,242,268/2,569,732 shares of beneficial interest issued
and outstanding) $16.05
See notes to financial statements.
10
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $128,531) $1,212,395
Interest 68,182 $ 1,280,577
EXPENSES
Advisory fee 1,214,715
Distribution fee - Class A 119,471
Distribution fee - Class B 375,340
Distribution fee - Class C 111,981
Custodian 398,391
Transfer agency 304,300
Audit and legal 96,655
Printing 75,013
Administrative 64,000
Registration 41,779
Trustees' fees 16,000
Miscellaneous 39,889
Total expenses 2,857,534
Net investment loss (1,576,957)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 10,395,985
Net realized loss on foreign currency transactions (1,515,676)
Net change in unrealized appreciation of:
Investments (29,501,825)
Foreign currency denominated assets and liabilities 3,195,142
Net loss on investments and foreign currency transactions (17,426,374)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(19,003,331)
See notes to financial statements.
11
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1997 JUNE 30,
(UNAUDITED) 1997
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ (1,576,957) $ 136,758
Net realized gain on investments and foreign
currency transactions 8,880,309 11,103,038
Net change in unrealized appreciation of
investments and foreign currency
denominated assets and liabilities (26,306,683) 13,688,698
Net increase (decrease) in net assets from
operations (19,003,331) 24,928,494
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (340,015) (1,212,031)
Advisor Class (164,972) (6,456)
Net realized gain on investments and foreign
currency transactions
Class A (8,564,123) (11,329,853)
Class B (5,015,932) (4,543,388)
Class C (1,492,502) (1,515,641)
Advisor Class (2,849,305) (47,863)
CAPITAL STOCK TRANSACTIONS
Net decrease (5,943,727) (2,106,765)
Total increase (decrease) (43,373,907) 4,166,497
NET ASSETS
Beginning of year 299,862,761 295,696,264
End of period (including undistributed net
investment income of $91,546 at June 30,1997) $256,488,854 $299,862,761
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance International Fund (the "Fund"), which is a Massachusetts business
trust, is registered under the Investment Company Act of 1940, as a
diversified, open-end management investment company. The Fund offers Class A,
Class B, 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 are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. Advisor Class shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered to investors participating in fee
based programs and to certain retirement plan accounts. All four classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The financial statements have
been prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Restricted securities, illiquid
securities and securities for which current market quotations are not readily
available are valued at their fair value as determined in good faith by, or in
accordance with procedures adopted by, the Fund's Board of Trustees. Fixed
income securities may be valued on the basis of prices obtained from a pricing
service when such prices are believed to reflect the fair value of such
securities.
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 and losses 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 any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
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. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisor Class shares have no distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under 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. Effective July 1, 1997 the Adviser has
voluntarily agreed to waive unilaterally, for a minimum of two years, that
portion of the Fund's advisory fee on the first $500 million of net assets in
excess of the annualized rate of .85 of 1%. Pursuant to the advisory agreement,
the Fund paid $64,000 to the Adviser representing the cost of certain legal and
accounting services provided to the Fund by the Adviser for the six months
ended December 31, 1997.
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 $175,134 for the six months ended December 31, 1997.
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 $2,956 from the sale of Class A shares and $85,088
and $4,073 in contingent deferred sales charges from the redemptions of Class B
and Class C shares, respectively for the six months ended December 31, 1997.
Brokerage commissions paid on investment transactions for the six months ended
December 31, 1997, amounted to $979,569, 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
$2,623,897 and $821,560, 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
14
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
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 $183,457,641 and $218,021,335, respectively,
for the six months ended December 31, 1997. There were no purchases or sales of
U.S. government or government agency obligations for the six months ended
December 31, 1997.
At December 31, 1997, the cost of investments for federal income tax purposes
was $240,714,315. Accordingly, gross unrealized appreciation of investments was
$24,580,669 and gross unrealized depreciation of investments was $17,850,653,
resulting in net unrealized appreciation of $6,730,016, excluding foreign
currency.
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 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 by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or liquid assets having a value equal to the aggregate amount of the Fund's
commitments under forward foreign 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, 1997, the Fund had outstanding forward foreign exchange
currency contracts as follows:
CONTRACT VALUE ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
------------- ----------- ----------- ------------
FOREIGN CURRENCY
SALE CONTRACTS
- ------------------
French Francs,
expiring 3/05/98 115,455,000 $19,613,189 $19,251,099 $ 362,090
Japanese Yen
expiring 2/04/98 4,245,698,000 35,684,432 32,664,576 3,019,856
----------
$3,381,946
15
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 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, 1997 JUNE 30, DEC. 31, 1997 JUNE 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ -------------- --------------
CLASS A
Shares sold 9,262,012 6,622,075 $162,844,080 $114,715,975
Shares issued in
reinvestment of
dividends and
distributions 434,528 663,141 7,195,776 11,054,555
Shares converted
from Class B 107,942 117,002 1,897,573 2,047,012
Shares redeemed (12,086,321) (7,939,629) (219,035,690) (137,402,166)
Net decrease (2,281,839) (537,411) $(47,098,261) $ (9,584,624)
CLASS B
Shares sold 2,249,939 2,125,113 $ 37,792,755 $ 35,155,961
Shares issued in
reinvestment of
distributions 253,584 214,830 3,960,979 3,409,345
Shares converted
to Class A (114,230) (123,261) (1,897,573) (2,047,012)
Shares redeemed (2,213,721) (1,982,904) (37,755,006) (32,750,197)
Net increase 175,572 233,778 $ 2,101,155 $ 3,768,097
CLASS C
Shares sold 284,073 1,792,800 $ 4,875,063 $ 29,797,881
Shares issued in
reinvestment of
distributions 55,617 50,633 869,855 804,053
Shares redeemed (384,672) (2,075,557) (6,485,956) (34,583,108)
Net decrease (44,982) (232,124) $ (741,038) $ (3,981,174)
SIX MONTHS OCT. 2, SIX MONTHS DOC. 2,
ENDED 1996(A) ENDED 1996(A)
DEC. 31,1997 TO DEC. 31,1997 TO
(UNAUDITED) JUNE 30,1997 (UNAUDITED) JUNE 30, 1997
------------ ------------ -------------- --------------
ADVISOR CLASS
Shares sold 2,892,089 501,850 $54,759,950 $8,317,799
Shares issued in
reinvestment of
dividends and
distributions 181,876 2,960 3,008,222 49,249
Shares redeemed (970,020) (39,023) (17,973,755) (676,112)
Net increase 2,103,945 465,787 $39,794,417 $7,690,936
(a) Commencement of distribution.
16
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
NOTE F: RESTRICTED AND ILLIQUID SECURITIES
DATE
SECURITY ACQUIRED U.S. $ COST
- -------- ---------- -------------
Asesores Bursatiles Capital Fund, NV 10/29/90 $1,066,499
Unidad Editorial, SA 1/20/92 369,591
The securities shown above are restricted as to sale and have been valued at
fair value in accordance with procedures described in Note A. The value of
these securities at December 31, 1997 was $833,401 representing 0.3% of net
assets.
17
FINANCIAL HIGHLIGHTS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1997 ----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.69 $18.32 $16.81 $18.38 $16.01 $14.98
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.07)(a) .06(a) .05(a) .04 (.09) (.01)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (1.29) 1.51 2.51 .01 3.02 1.17
Net increase (decrease) in net asset
value from operations (1.36) 1.57 2.56 .05 2.93 1.16
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) (.12) -0- -0- -0- (.04)
Distributions from net realized gains on
investments and foreign currency
transactions (1.21) (1.08) (1.05) (1.62) (.56) (.09)
Total dividends and distributions (1.26) (1.20) (1.05) (1.62) (.56) (.13)
Net asset value, end of period $16.07 $18.69 $18.32 $16.81 $18.38 $16.01
TOTAL RETURN
Total investment return(b) (7.49)% 9.30% 15.83% .59% 18.68% 7.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $126,895 $190,173 $196,261 $165,584 $201,916 $161,048
Ratio of expenses to average net assets 1.77%(c) 1.74%(d) 1.72% 1.73% 1.90% 1.88%
Ratio of net investment income (loss) to
average net assets (.82)%(c) .31% .31% .26% (.50)% (.14)%
Portfolio turnover rate 135% 94% 78% 119% 97% 94%
Average commission rate paid(e) $.0334 $.0363 -- -- -- --
</TABLE>
See footnote summary on page 21.
18
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1997 -----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.71 $17.45 $16.19 $17.90 $15.74 $14.81
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.14)(a) (.09)(a) (.07)(a) (.01) (.19)(a) (.12)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (1.21) 1.43 2.38 (.08) 2.91 1.14
Net increase (decrease) in net asset
value from operations (1.35) 1.34 2.31 (.09) 2.72 1.02
LESS: DISTRIBUTIONS
Distributions from net realized gains on
investments and foreign currency
transactions (1.21) (1.08) (1.05) (1.62) (.56) (.09)
Net asset value, end of period $15.15 $17.71 $17.45 $16.19 $17.90 $15.74
TOTAL RETURN
Total investment return(b) (7.83)% 8.37% 14.87% (.22)% 17.65% 6.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $69,144 $77,725 $72,470 $48,998 $29,943 $6,363
Ratio of expenses to average net assets 2.63%(c) 2.59%(d) 2.55% 2.57% 2.78% 2.70%
Ratio of net investment loss to
average net assets (1.71)%(c) (.51)% (.46)% (.62)% (1.15)% (.96)%
Portfolio turnover rate 135% 94% 78% 119% 97% 94%
Average commission rate paid(e) $.0334 $.0363 -- -- -- --
</TABLE>
See footnote summary on page 21.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 3,1993(F)
DECEMBER 31, YEAR ENDED JUNE 30, TO
1997 -------------------------------------------------- JUNE 30,
(UNAUDITED) 1997 1996 1995 1994 1993
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.73 $17.46 $16.20 $17.91 $15.74 $15.93
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.15)(a) (.09)(a) (.07)(a) (.14) (.11) -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (1.21) 1.44 2.38 .05 2.84 (.19)
Net increase (decrease) in net asset
value from operations (1.36) 1.35 2.31 (.09) 2.73 (.19)
LESS: DISTRIBUTIONS
Distributions from net realized gains on
investments and foreign currency
transactions (1.21) (1.08) (1.05) (1.62) (.56) -0-
Net asset value, end of period $15.16 $17.73 $17.46 $16.20 $17.91 $15.74
TOTAL RETURN
Total investment return(b) (7.88)% 8.42% 14.85% (.22)% 17.72% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $19,207 $23,268 $26,965 $19,395 $13,503 $229
Ratio of expenses to average net assets 2.61%(c) 2.58%(d) 2.53% 2.54% 2.78% 2.57%(c)
Ratio of net investment income (loss) to
average assets (1.69)%(c) (.51)% (.47)% (.88)% (1.12)% .08%(c)
Portfolio turnover rate 135% 94% 78% 119% 97% 94%
Average commission rate paid(e) $.0334 $.0363 -- -- -- --
</TABLE>
See footnote summary on page 21.
20
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
ADVISOR CLASS
--------------------------
SIX MONTHS OCTOBER 2,
ENDED 1996(F)
DECEMBER 31, TO
1997 JUNE 30,
(UNAUDITED) 1997
------------ ------------
Net asset value, beginning of period $18.67 $17.96
INCOME FROM INVESTMENT OPERATIONS
Net investment gain (loss)(a) (.07) .16
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (1.27) 1.78
Net increase (decrease) in net asset value
from operations (1.34) 1.94
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.07) (.15)
Distributions from net realized gains on
investments and foreign currency transactions (1.21) (1.08)
Total dividends and distributions (1.28) (1.23)
Net asset value, end of period $16.05 $18.67
TOTAL RETURN
Total investment return based on net asset value(b) (7.38)% 11.57%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $41,242 $8,697
Ratio of expenses to average net assets(c) 1.64% 1.69%(d)
Ratio of net investment income (loss) to
average net assets(c) (.84)% 1.47%
Portfolio turnover rate 135% 94%
Average commission rate paid $.0334 $.0363
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) Ratio reflects expenses grossed up for expense offset arrangement with the
transfer agent. For the year ended June 30, 1997, the net expense ratio was
1.73%, 2.58%, 2.56% and 1.69% for Class A, B, C and Advisor Class shares,
respectively.
(e) 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. This amount includes commissions paid to foreign
brokers which may materially affect the rate shown. Amounts paid in foreign
currencies have been converted into US dollars using the prevailing exchange
rate on the date of the transaction.
(f) Commencement of distribution.
21
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
EDWARD BAKER, VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
STEPHEN M. BEINHACKER, VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
FRANCIS P. REEVES, 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.
22
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 High Yield Fund
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 Environment 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 Greater China '97 Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage 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
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
23
ALLIANCE INTERNATIONAL FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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
