ALLIANCE INTERNATIONAL FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
February 26, 1999
Dear Shareholder:
This semi-annual report contains investment results and market activity for
Alliance International Fund for the period ended December 31, 1998. Your Fund's
new portfolio manager, as of January 1999, is Nicholas D. Carn. Mr. Carn is a
Senior Vice President and Chief Investment Officer of Alliance Capital's Asset
Allocation Group and has 20 years of investment experience.
The Fund primarily seeks to obtain a total return on its assets from long-term
growth of capital and from income. It invests principally in marketable
securities of established non-United States companies (or United States
companies having their principal activities and interests outside the United
States), companies participating in foreign economies with prospects for
growth, and foreign government securities.
INVESTMENT RESULTS
For the 12-month period ended December 31, 1998, the Alliance International
Fund provided a total return of 9.64% at net asset value (NAV), underperforming
the MSCI World Index (minus the U.S.) return of 19.11%. A defensive strategy of
hedging the portfolio's yen exposure during a period of yen strength
represented an opportunity cost relative to the benchmark. However, an
underweight position in the Japanese stock market in the second part of the
year hurt the Fund's relative performance as Japan significantly outperformed
many other markets. Additionally, the Japanese stocks held in the Fund's
portfolio underperformed relative to the Japanese stock market during this time.
INVESTMENT RESULTS*
Periods Ended December 31, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE INTERNATIONAL FUND
Class A -5.01% 9.64%
Class B -5.25% 8.88%
Class C -5.31% 8.81%
MSCI WORLD INDEX
(minus the U.S.) 2.89% 19.11%
LIPPER INTERNATIONAL
FUNDS AVERAGE -2.32% 13.02%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIOD AND ARE
BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF DECEMBER 31, 1998.
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.
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX (MINUS THE U.S.),
TRACKS THE PERFORMANCE OF STOCK MARKETS IN 22 FOREIGN COUNTRIES. THE BENCHMARK
IS UNMANAGED AND REFLECTS NO FEES OR EXPENSES. THE LIPPER INTERNATIONAL FUNDS
AVERAGE FOR THE SIX- AND 12-MONTH PERIODS ENDED DECEMBER 31, 1998 REFLECTS THE
PERFORMANCE OF 575 AND 527 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 REVIEW
Subdued inflation, falling interest rates and improved corporate margins have
been the fuel for the global bull market in the 1990s. Although most markets
bottomed in the early 1990s, the current bull phase in the U.S. really dates
from 1995 when global equities began to outperform global bonds. Although not
generally appreciated, bonds, as measured by the Salomon Brothers World
Government Bond Index provided a better return than equities, as measured by
the MSCI World Index with net dividends reinvested from 1987 to 1995.
1
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
Although corporate earnings have grown since 1995, stock market returns have
far out-stripped the growth in corporate net worth. A lower discount rate
applied to future earnings is part of the explanation, while a steady reduction
in the equity risk premium explains the balance.
Equity market sentiment went full circle in 1998. In the first half of the
year, the implosion in Asian economies was largely ignored. During the third
quarter, and after Russia's default, markets reversed as investors stared into
a deflationary abyss only to recover in the fourth quarter as the western
economies, in particular the U.S., apparently emerged unscathed and the Central
Banks cut interest rates.
Despite this very high volatility, 1998 was an excellent year for stock markets
with the world equity index providing the best return for 10 years. Growth
upsets in developing economies, and the financial losses emanating from Asia
and Russia, left the European and U.S. economies largely unaffected despite a
sharp fall off in world trade and export volumes. The U.S., in particular, put
in a very strong economic performance as interest rates and real income effects
more than offset the weaker trend in exports and a dramatic widening of the
trade deficit.
Notwithstanding buoyant economic conditions in the U.S. and some European
economies, government bond yields continued to fall over the year. This was a
consequence of weak commodity prices, deflation at the wholesale price level
and the concerted round of reductions in short-term interest rates after the
Russian default and the financial market turmoil of the summer. Government
bonds fared better than corporates as credit spreads widened.
The forces at work in bond markets, namely investor concerns about quality and
liquidity, were also apparent in the equity markets. Large capitalization
growth stocks were by far the best performing category in almost every market
with performance at the benchmark level dominated by an unusually small number
of stocks.
INVESTMENT OUTLOOK
World growth should be much weaker in 1999. Japan, in our view, is not
recovering, and European business confidence is deteriorating fast, leaving the
increasingly unbalanced U.S. economy as almost the only engine for growth. A
negative savings ratio and a foreign borrowing requirement of $300 billion is
clearly not sustainable in the long run. Sustainable world growth depends on
successful measures to stimulate consumption outside the United States. So far
these measures have been slow in coming.
We believe that stock markets will continue to experience a two-way pull.
Interest rates and inflation are likely to remain low, providing a supportive
environment for the current high levels of valuation. At the same time,
earnings growth will be increasingly hard to achieve in a slowing world
economy. The authorities should continue to lower interest rates as necessary
to sustain world growth. Nonetheless, the Japanese economy will probably
continue to struggle and the pressure for further competitive currency
devaluations will persist.
FUND STRATEGY
Your Fund's portfolio remains well diversified, from both a sector and
geographic standpoint. As you can see from the following two charts, as of
December 31, 1998, your Fund's portfolio is weighted heavily in the consumer
staples, finance, health care and utility sectors. Geographically, we have
focused on the United Kingdom, Japan, France and Switzerland during the period
under review.
INDUSTRIAL AND GEOGRAPHIC BREAKDOWNS AS OF DECEMBER 31, 1998*
3.6% BASIC INDUSTRY
7.2% TECHNOLOGY
7.5% CONSUMER MANUFACTURING
9.7% OTHER
9.9% CONSUMER SERVICES
10.6% UTILITIES
14.1% HEALTH CARE
18.1% FINANCE
19.3% CONSUMER STAPLES
* EXPRESSED AS A PERCENTAGE OF TOTAL INVESTMENTS.
2
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
4.2% SWEDEN
6.1% GERMANY
6.8% FINLAND
7.3% SPAIN
8.0% THE NETHERLANDS
10.5% SWITZERLAND
12.4% FRANCE
13.3% OTHER
15.5% JAPAN
15.9% UNITED KINGDOM
* EXPRESSED AS A PERCENTAGE OF TOTAL INVESTMENTS.
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
Bruce W. Calvert
Senior Vice President
Nicholas D. Carn
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
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 9.64% 5.00%
Five Years 6.76% 5.84%
Ten Years 6.27% 5.81%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 8.88% 4.90%
Five Years 5.91% 5.91%
Since Inception*(a) 5.51% 5.51%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 8.81% 7.82%
Five Years 5.88% 5.88%
Since Inception* 6.77% 6.77%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A shares or applicable
contingent deferred sales charge for Class B shares (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.
SEC average annual total returns for the periods shown reflect reinvestment of
all distributions and deduction of the maximum 4.25% front-end sales charges
and applicable contingent deferred sales charges.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/17/90, Class B; 5/3/93, Class C.
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
4
TEN LARGEST HOLDINGS
DECEMBER 31, 1998 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Nokia Oyj Corp. Series A--Develops and
manufactures mobile phones, networks, and
systems for cellular and fixed networks. $11,009,304 5.3%
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. 7,281,942 3.5
Sanofi, SA--Researches and manufactures
healthcare products and beauty aids. 6,911,107 3.3
Zurich Allied AG--Holding company with control
of 57% of Zurich Financial Services Group. 6,669,824 3.2
Nestle, SA--A holding company whose subsidiaries
produce and sell a variety of food and
consumer products. 6,536,472 3.2
Telefonica, SA (common stocks & rights)--
Provider of telecommunications to industrial,
residential and municipal customers in Spain. 6,352,825 3.1
Seita--Manufactures cigarettes, cigars, pipe
and loose tobacco, as well as matches. 6,260,061 3.0
Tabacalera, SA Cl. A--Manufactures, sells,
imports and exports tobacco products, and
distributes fiscal securities, postage stamps
to wholesale outlets worldwide. 6,074,751 2.9
Novartis AG--Manufactures healthcare products
for use in medical fields, as well as
nutritional and agricultural products. 5,902,499 2.9
Diageo Plc.--Operations in food and alcohol,
fast food restaurants, and property
management. 5,548,427 2.7
$68,547,212 33.1%
5
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1998 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
PERCENT OF
U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $7,281,942 3.5%
Capital Goods 814,226 0.4
Consumer Manufacturing 15,458,007 7.5
Consumer Services 20,206,881 9.7
Consumer Staples 39,499,644 19.1
Energy 2,794,745 1.3
Finance 37,181,889 17.9
Healthcare 28,970,578 14.0
Multi-Industry 3,138,041 1.5
Technology 14,668,208 7.1
Utilities 21,697,507 10.5
Total Investments* 191,711,668 92.5
Cash and receivables, net of liabilities 15,488,005 7.5
Net Assets $207,199,673 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS &
OTHER INVESTMENTS-92.5%
AUSTRALIA-1.0%
Coca-Cola Amatil, Ltd. 340,000 $ 1,266,780
The News Corporation, Ltd. 130,000 858,778
-----------
2,125,558
BRAZIL-1.0%
Telecomunicacoes Brasileiras, SA pfd.
(ADR) (a) 30,000 2,180,625
CANADA-1.7%
Newcourt Credit Group, Inc. 100,000 3,492,167
FINLAND-6.7%
Nokia Oyj Corp. Series A 90,000 11,009,304
Orion-Yhtyma OY Series B 125,700 2,951,263
-----------
13,960,567
FRANCE-12.2%
Carrefour, SA 5,000 3,773,028
Lafarge, SA 25,000 2,374,352
Sanofi, SA 42,000 6,911,107
Seita 100,000 6,260,061
Total, SA Cl. B 20,000 2,024,682
Union des Assurances Federales, SA 30,000 3,981,399
-----------
25,324,629
GERMANY-6.0%
Hornbach Holding pfd.
AG-non voting 28,730 1,705,965
Merck KG 50,000 2,249,213
Prosieben Media AG pfd. 60,000 2,771,030
Volkswagen AG 40,000 3,190,883
Wella AG pfd.-non voting 3,000 2,501,125
-----------
12,418,216
HONG KONG-0.5%
Dickson Concepts International, Ltd. 241,500 187,026
Johnson Electric Holdings, Ltd. 317,000 814,226
-----------
1,001,252
ITALY-2.2%
Telecom Italia Mobile di Risp Spa 200,000 1,478,241
Telecom Italia Spa 360,000 3,075,225
-----------
4,553,466
JAPAN-15.3%
Banyu Pharmaceutical Co., Ltd. 50,000 929,779
Credit Saison Co., Ltd. 125,000 3,082,662
Daiwa Securities Co., Ltd. 270,000 922,872
FamilyMart Co., Ltd. 40,000 1,997,698
Fuji Photo Film Co. 75,000 2,789,339
Honda Motor Co. 130,000 4,270,787
NTT Mobile Comunications Network, Inc. 80 3,294,076
Orix Corp. 40,000 2,989,463
Sony Corp. 30,000 2,186,310
Takeda Chemical Industries 60,000 2,311,166
TDK Corp. 40,000 3,658,904
Yamanouchi Pharmaceutical Co., Ltd. 100,000 3,223,236
-----------
31,656,292
NETHERLANDS-8.0%
Akzo Nobel NV 160,000 7,281,942
International Nederlander Groep NV 60,000 3,656,940
Koninklijke Ahold NV 150,000 5,541,302
-----------
16,480,184
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
NORWAY-0.4%
Stolt Comex Seaway, SA 53,500 $ 361,125
ADR (a) 72,700 408,938
-----------
770,063
SPAIN-7.2%
Banco Bilbao Vizcaya, SA 140,000 2,211,052
Tabacalera, SA Cl. A 240,000 6,074,751
Telefonica, SA 140,000 6,228,453
Bonus Rights expiring 1/30/99 (a) 140,000 124,372
Unidad Editorial, SA (b) 297,500 335,606
-----------
14,974,234
SWEDEN-4.1%
Astra AB Series A 265,000 5,422,094
Autoliv, Inc. 65,000 2,338,458
ForeningsSparbanken AB Cl. A 30,000 778,868
-----------
8,539,420
SWITZERLAND-10.4%
Nestle, SA 3,000 6,536,472
Novartis AG 3,000 5,902,499
UBS AG 8,000 2,460,103
Zurich Allied AG 9,000 6,669,824
-----------
21,568,898
UNITED KINGDOM-15.8%
Bank of Scotland Plc. 390,400 4,672,947
BPB Industries Plc. 300,000 1,097,217
Compass Group Plc. 160,000 1,827,365
Diageo Plc. 500,000 5,548,427
Granada Group Plc. 110,000 1,929,273
Orange Plc. (a) 180,000 2,064,763
Rentokil Initial Plc. 400,000 3,017,806
Reuters Group Plc. 76,900 811,799
Royal Bank Of Scotland Group Plc. 110,000 1,799,436
Standard Chartered Plc. 40,000 464,156
Tomkins Plc. 660,000 3,138,041
United News & Media Inc. 350,000 3,043,115
Vodafone Group Plc. 200,000 3,251,752
-----------
32,666,097
Total Common Stocks &
Other Investments
(cost $173,586,266) 191,711,668
TIME DEPOSIT-6.3%
Dresdner Bank,
4.00%, 1/04/99
(cost $13,100,000) $13,100 13,100,000
TOTAL INVESTMENTS-98.8%
(cost $186,686,266) 204,811,668
Other assets less liabilities-1.2% 2,388,005
NET ASSETS-100% $207,199,673
(a) Non-income producing security.
(b) Restricted and illiquid securities valued at fair value (See Notes A & F).
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $186,686,266) $204,811,668
Cash, at value (cost $2,963,071) 2,969,560
Receivable for investment securities sold 2,219,641
Foreign taxes receivable 231,868
Dividends and interest receivable 211,428
Receivable for shares of beneficial interest sold 57,019
Total assets 210,501,184
LIABILITIES
Payable for investment securities purchased 2,139,917
Advisory fee payable 456,957
Payable for shares of beneficial interest redeemed 128,678
Distribution fee payable 83,834
Accrued expenses 492,125
Total liabilities 3,301,511
NET ASSETS $207,199,673
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $132,320
Additional paid-in capital 188,671,674
Distributions in excess of net investment income (4,539,109)
Accumulated net realized gain on investments and
foreign currency transactions 4,769,129
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 18,165,659
$207,199,673
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($91,200,885 / 5,677,051 shares of beneficial interest
issued and outstanding) $16.06
Sales charge--4.25% of public offering price .71
Maximum offering price $16.77
CLASS B SHARES
Net asset value and offering price per share
($62,849,468 / 4,168,559 shares of beneficial interest
issued and outstanding) $15.08
CLASS C SHARES
Net asset value and offering price per share
($18,352,563 / 1,216,900 shares of beneficial interest
issued and outstanding) $15.08
ADVISOR CLASS SHARES
Net asset value, redemption, and offering price per share
($34,796,757 / 2,169,531 shares of beneficial interest
issued and outstanding) $16.04
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1998 (UNAUDITED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of
$56,686) $ 738,624
Interest 288,919 $ 1,027,543
EXPENSES
Advisory fee 986,639
Distribution fee - Class A 102,242
Distribution fee - Class B 319,603
Distribution fee - Class C 92,120
Custodian 345,976
Transfer agency 330,962
Administrative 63,500
Audit and legal 44,924
Registration 39,120
Printing 37,142
Trustees' fees 17,000
Miscellaneous 26,718
Total expenses 2,405,946
Less: expenses waived by the Adviser (see Note B) (147,996)
Less: expense offset arrangement (see Note B) (18,476)
Net expenses 2,239,474
Net investment loss (1,211,931)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 9,076,335
Net realized loss on foreign currency transactions (2,226,502)
Net change in unrealized appreciation of:
Investments (17,810,195)
Foreign currency denominated assets and liabilities 37,220
Net loss on investments and foreign currency transactions (10,923,142)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(12,135,073)
See notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1998 JUNE 30,
(UNAUDITED) 1998
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss $ (1,211,931) $ (858,571)
Net realized gain on investments and
foreign currency transactions 6,849,833 22,105,436
Net change in unrealized appreciation of
investments and foreign currency
denominated assets and liabilities (17,772,975) (1,039,493)
Net increase (decrease) in net assets
from operations (12,135,073) 20,207,372
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income
Class A (2,466,185) (340,015)
Class B (1,292,800) -0-
Class C (380,668) -0-
Advisor Class (1,016,696) (164,972)
Net realized gain on investments and
foreign currency transactions
Class A (5,415,223) (8,564,124)
Class B (4,025,046) (5,015,932)
Class C (1,185,184) (1,492,502)
Advisor Class (2,031,445) (2,849,305)
CAPITAL STOCK TRANSACTIONS
Net decrease (33,369,315) (31,125,975)
Total decrease (63,317,635) (29,345,453)
NET ASSETS
Beginning of year 270,517,308 299,862,761
End of period (including undistributed
net investment income of
$1,829,171 at June 30, 1998) $207,199,673 $270,517,308
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 (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 may 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 price 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 price. 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. 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
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 market 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.
12
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. The Adviser has agreed to waive that
portion of the Fund's advisory fee or reimbursed the Fund for that portion of
its operating expenses to reduce total fund operating expenses by .15% for the
Fund's fiscal year. For the six months ended December 31, 1998, such waiver
amounted to $147,996. Pursuant to the advisory agreement, the Fund paid $63,962
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, 1998.
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 $227,108 for the six months ended December 31, 1998.
In addition, for the six months ended December 31, 1998, the Fund's expenses
were reduced by $18,476 under an expense offset arrangement with Alliance Fund
Services. Transfer agency fees reported in the statement of operations exclude
these credits.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
received front-end sales charges of $3,296 from the sale of Class A shares and
$1,005, $51,608 and $1,550 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended December 31, 1998.
Brokerage commissions paid on investment transactions for the six months ended
December 31, 1998, amounted to $691,192, 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
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
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 $2,593,180 and $870,285 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 $114,677,628 and $180,919,172, respectively,
for the six months ended December 31, 1998. There were no purchases or sales of
U.S. government or government agency obligations for the six months ended
December 31, 1998.
At December 31, 1998, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $25,875,463 and
gross unrealized depreciation of investments was $7,750,061 resulting in net
unrealized appreciation of $18,125,402 (excluding foreign currency
transactions).
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, 1998, the Fund had no outstanding forward foreign exchange
currency contracts.
14
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
DECEMBER 31, 1998 JUNE 30, DECEMBER 31, 1998 JUNE 30,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 4,524,464 24,484,292 $76,567,139 $429,262,692
Shares issued in
reinvestment of
dividends and
distributions 379,772 434,528 5,935,837 7,195,776
Shares converted
from Class B 59,845 135,142 1,005,227 2,418,317
Shares redeemed (6,381,167) (28,137,023) (111,562,865) (501,332,312)
Net decrease (1,417,086) (3,083,061) $(28,054,662) $(62,455,527)
CLASS B
Shares sold 1,582,195 5,858,963 $24,719,611 $98,173,143
Shares issued in
reinvestment of
distributions 292,363 253,584 4,291,892 3,960,979
Shares converted to
Class A (63,832) (143,173) (1,005,227) (2,422,365)
Shares redeemed (1,740,618) (6,258,880) (27,190,902) (105,349,658)
Net increase
(decrease) 70,108 (289,506) $815,374 $(5,637,901)
CLASS C
Shares sold 480,172 1,285,146 $7,484,706 $21,956,475
Shares issued in
reinvestment of
distributions 70,803 55,617 1,039,382 869,855
Shares redeemed (506,618) (1,480,320) (7,899,343) (25,121,032)
Net increase
(decrease) 44,357 (139,557) $624,745 $(2,294,702)
ADVISOR CLASS
Shares sold 117,267 2,988,364 $1,794,992 $56,300,890
Shares issued in
reinvestment of
dividends and
distributions 194,675 181,876 3,036,923 3,008,222
Shares redeemed (685,606) (1,092,832) (11,586,687) (20,046,957)
Net increase
(decrease) (373,664) 2,077,408 $(6,754,772) $39,262,155
NOTE F: RESTRICTED SECURITY
DATE
SECURITY ACQUIRED U.S. $ COST
- -------------------------------------------------------------------------------
Unidad Editorial, SA 1/20/92 $369,591
The security shown above is restricted as to sale and has been valued at fair
value in accordance with procedures described in Note A. The value of this
security at December 31, 1998 was $335,606 representing 0.16% of net assets.
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
NOTE G: CONCENTRATION OF RISK
Investing in securities of foreign companies involves special risks which
include the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies and their markets may be less liquid and their prices
more volatile than those of United States companies.
NOTE H: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended December 31, 1998.
16
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,
1998 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $18.55 $18.69 $18.32 $16.81 $18.38 $16.01
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.07)(a)(b) (.01)(a)(b) .06(a) .05(a) .04 (.09)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.90) 1.13 1.51 2.51 .01 3.02
Net increase (decrease) in net asset
value from operations (.97) 1.12 1.57 2.56 .05 2.93
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.48) (.05) (.12) -0- -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions (1.04) (1.21) (1.08) (1.05) (1.62) (.56)
Total dividends and distributions (1.52) (1.26) (1.20) (1.05) (1.62) (.56)
Net asset value, end of period $16.06 $18.55 $18.69 $18.32 $16.81 $18.38
TOTAL RETURN
Total investment return(c) (5.01)% 6.79% 9.30% 15.83% .59% 18.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $91,201 $131,565 $190,173 $196,261 $165,584 $201,916
Ratio to average net assets of:
Expenses, net of waivers 1.80%(d)(e) 1.65% 1.74%(e) 1.72% 1.73% 1.90%
Expenses, before waivers 1.94%(d) 1.80% 1.74% 1.72% 1.73% 1.90%
Ratio of net investment income (loss)
to average net assets (.85)%(b)(d) (.05)%(b) .31% .31% .26% (.50)%
Portfolio turnover rate 114% 121% 94% 78% 119% 97%
</TABLE>
See footnote summary on page 20.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1998 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $17.41 $17.71 $17.45 $16.19 $17.90 $15.74
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.13)(a)(b) (.16)(a)(b) (.09)(a) (.07)(a) (.01) (.19)(a)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.82) 1.07 1.43 2.38 (.08) 2.91
Net increase (decrease) in net asset
value from operations (.95) .91 1.34 2.31 (.09) 2.72
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.34) -0- -0- -0- -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions (1.04) (1.21) (1.08) (1.05) (1.62) (.56)
Total dividends and distributions (1.38) (1.21) (1.08) (1.05) (1.62) (.56)
Net asset value, end of period $15.08 $17.41 $17.71 $17.45 $16.19 $17.90
TOTAL RETURN
Total investment return(c) (5.25)% 5.92% 8.37% 14.87% (.22)% 17.65%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $62,849 $71,370 $77,725 $72,470 $48,998 $29,943
Ratios to average net assets of:
Expenses, net of waivers 2.64%(d)(e) 2.49% 2.58%(e) 2.55% 2.57% 2.78%
Expenses, before waivers 2.78%(d) 2.64% 2.58% 2.55% 2.57% 2.78%
Ratio of net investment loss
to average net assets (1.66)%(b)(d) (.90)%(b) (.51)% (.46)% (.62)% (1.15)%
Portfolio turnover rate 114% 121% 94% 78% 119% 97%
</TABLE>
See footnote summary on page 20.
18
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1998 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $17.42 $17.73 $17.46 $16.20 $17.91 $15.74
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.13)(a)(b) (.15)(a)(b) (.09)(a) (.07)(a) (.14) (.11)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.83) 1.05 1.44 2.38 .05 2.84
Net increase (decrease) in net asset
value from operations (.96) .90 1.35 2.31 (.09) 2.73
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (0.34) -0- -0- -0- -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions (1.04) (1.21) (1.08) (1.05) (1.62) (.56)
Total dividends and distributions (1.38) (1.52) (1.08) (1.05) (1.62) (.56)
Net asset value, end of period $15.08 $17.42 $17.73 $17.46 $16.20 $17.91
TOTAL RETURN
Total investment return(c) (5.31)% 5.85% 8.42% 14.85% (.22)% 17.72%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,353 $20,428 $23,268 $26,965 $19,395 $13,503
Ratios to average net assets of:
Expenses, net of waivers 2.65%(d)(e) 2.48% 2.56%(e) 2.53% 2.54% 2.78%
Expenses, before waivers 2.79%(d) 2.63% 2.56% 2.53% 2.54% 2.78%
Ratio of net investment loss
to average net assets (1.66)%(b)(d) (.90)%(b) (.51)% (.47)% (.88)% (1.12)%
Portfolio turnover rate 114% 121% 94% 78% 119% 97%
</TABLE>
See footnote summary on page 20.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE INTERNATIONAL FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
------------------------------------
SIX MONTHS
ENDED OCTOBER 2,
DECEMBER 31, YEAR ENDED 1996(F)
1998 JUNE 30, TO
(UNAUDITED) 1998 JUNE 30, 1997
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period $18.54 $18.67 $17.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(a) (.05)(b) .02(b) .16
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.89) 1.13 1.78
Net increase (decrease) in net asset
value from operations (.94) 1.15 1.94
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.52) (.07) (.15)
Distributions from net realized gains on
investments and foreign currency
transactions (1.04) (1.21) (1.08)
Total dividends and distributions (1.56) (1.28) (1.23)
Net asset value, end of period $16.04 $18.54 $18.67
TOTAL RETURN
Total investment return based on net
asset value(c) (4.81)% 6.98% 11.57%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $34,797 $47,154 $8,697
Ratio to average net assets of:
Expenses, net of waivers 1.60%(d)(e) 1.47% 1.69%(d)(e)
Expenses, before waivers 1.74%(d) 1.62% 1.69%(d)
Ratio of net investment income (loss)
to average net assets .64%(b)(d) .13%(b) 1.47%(d)
Portfolio turnover rate 114% 121% 94%
</TABLE>
(a) Based on average shares outstanding.
(b) Net of fees waived by Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales 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.
(d) Annualized.
(e) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the six months ended December 31, 1998 and the year ended
June 30, 1997, the ratios of expenses net of waivers were 1.79% and 1.73% for
Class A shares, 2.63% and 2.58% for Class B shares, 2.63% and 2.56% for Class C
shares and 1.59% and 1.69% for Advisor Class shares, respectively.
(f) Commencement of distribution.
20
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)
ALAN STOGA (1)
OFFICERS
BRUCE W. CALVERT, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
EDWARD BAKER, VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
STEPHEN M. BEINHACKER, VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
RUSSELL BRODY, VICE PRESIDENT
NICHOLAS D. CARN, 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.
21
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 U.S. Government Fund
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 Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
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
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Trust Portfolio
Treasury Portfolio
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
22
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
