ALLIANCE QUASAR FUND, INC.
ANNUAL REPORT
SEPTEMBER 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
November 2, 1995
Dear Shareholder:
We are pleased to report on equity market activity and on the investment
results for Alliance Quasar Fund's fiscal year ended September 30, 1995. The
following table compares the Fund's total returns over the twelve and six
months with that of the overall U.S. stock market, represented by the unmanaged
S&P 500-stock Index, and with the Russell 2000 Stock Index, also unmanaged,
which measures the performance of the smallest 2,000 stocks on the New York and
American Stock Exchanges and the NASDAQ:
Twelve Months Six Months
Through September 30, 1995
--------------------------
ALLIANCE QUASAR FUND
Class A +30.73% +25.83%
Class B +29.78% +25.37%
Class C +29.87% +25.29%
S&P 500 INDEX +29.64% +18.19%
RUSSELL 2000 +20.18% +23.40%
The Fund's total returns are based on the net asset values of each class of
shares as of September 30; additional investment results appear on page 3. Also
provided on page 4 is a chart that shows the performance of a hypothetical
$10,000 initial investment in Alliance Quasar Fund may increase in value over a
ten-year period.
THE YEAR IN REVIEW
During the past year, the Fund benefited from a strong domestic equity market.
The portfolio was invested to take advantage of the general rise in stock
prices by staying fully invested in small capitalization stocks. The sectors of
the market where we found the greatest reward versus risk characteristics were
in technology, energy and consumer services. In these sectors we uncovered many
companies whose valuations were modest compared to their growth rates. As of
the end of the fiscal year, our estimated earnings growth for the companies
held in Alliance Quasar Fund's portfolio was in excess of twice the market's
growth for valuations that were slightly below those of the market. This is
consistent with our investment philosophy of buying 'future' growth stocks at
reasonable valuations.
Three of the Fund's larger investments are examples of this strategy. Nine
West, at 4.3% of the portfolio, is currently the biggest position. Nine West
has continued to grow internally while increasing its long-term growth rate by
acquiring the shoe division of U.S. Shoe, Inc. Through an excellent management
team and a proven strategy, we believe Nine West will continue to be a dominant
category leader in the retailing area.
Hummingbird Communications represents another example of our investment
philosophy. Hummingbird currently enjoys a 45% market share of an industry that
is growing at more than 40% annually and has recently made an acquisition to
enable it to compete in the Internet market. The company has excellent
management, is well positioned for the future and is trading at a market
multiple of about 20 times.
Another large position for the Fund is in Reading & Bates, which was increased
during the reporting period. There is currently a supply/demand imbalance in
deep-sea drilling rigs and we believe Reading & Bates is, and will be, one of
the main beneficiaries of this situation.
MARKET ENVIRONMENT AND OUTLOOK
The market has benefited from 1995's modest growth and modest inflation
economy. When economic growth follows such a path-neither too fast nor too
slow-we often see better corporate profits and higher market valuations. As
stock investors have accepted this scenario as opposed to a 'boom/bust'
scenario, higher stock prices have followed.
Looking forward, we still have a positive outlook for the equity market and
believe the U.S. economy continues to be characterized by moderate growth and
moderate inflation. This environment is allowing most leading U.S. companies to
show rising earnings and cash flow and improvements in their balance sheets.
Continual cost cutting by corporations coupled with a somewhat weak dollar has
placed the U.S. in a very competitive position in relation to Europe and Japan.
We should mention that any change in Washington that demonstrates fiscal
responsibility (through Social Security, Medicare, Medicaid or balanced
budgets) would be viewed positively by the markets. Finally, while valuations
have increased this year, we believe that considering current market conditions
the Fund's investments are still relatively cheap.
1
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
We continue to believe that Alliance Quasar Fund's strategy will provide
superior relative investment results for long-term shareholders. We appreciate
your continued investment in the Fund and look forward to reporting to you
again in the coming months.
Sincerely,
Alden M. Stewart
President
2
INVESTMENT RESULTS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF SEPTEMBER 30, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
---------------------------
. One Year +30.73% +25.15%
. Five Years +15.57% +14.57%
. Ten Years +12.43% +11.94%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
---------------------------
. One Year +29.78% +25.78%
. Five Years +12.61% +12.61%
. Since Inception* +12.50% +12.50%
CLASS C SHARES
. One Year +29.87%
. Since Inception* +16.59%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
Class C shares are not subject to front-end or contingent deferred sales
charges. Past performance does not guarantee future results. Investment return
and principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
* Inception: 9/17/90, Class B; 5/3/93, Class C.
3
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
ALLIANCE QUASAR FUND
GROWTH OF A $10,000 INVESTMENT:
9/30/85 TO 9/30/95
This chart illustrates the total value of an assumed investment in Alliance
Quasar Fund Class A shares after deducting the maximum 4.25% sales charge, and
with dividends and capital gains reinvested. Performance for Class B and Class
C shares will vary from the results shown above due to differences in expenses
charged to those classes. Past performance is not indicative of future results,
and is not representative of future gain or loss in capital value or dividend
income.
The unmanaged Russell 2000 Stock Index is comprised of the smallest 2000 stocks
on The New York and American stock exchanges and the NASDAQ.
The unmanaged Standard and Poor's 500-stock index includes 500 U.S. stocks. It
is a common measure of the performance of the overall U.S. stock market.
When comparing Alliance Quasar Fund to the two indices shown above, you should
note that the Fund's performance reflects the maximum sales charge of 4.25%
while no such charges are reflected in the performance of the indices.
4
TEN LARGEST HOLDINGS
SEPTEMBER 30, 1995 ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Nine West Group, Inc. $ 6,633,900 4.0%
Telephone and Data Systems, Inc. 5,825,400 3.5
Reading & Bates Corp. 5,140,800 3.1
Healthwise of America, Inc. 4,208,400 2.6
Informix Corp. 4,088,500 2.5
United States Cellular Corp. 4,044,200 2.5
Millicom International Cellular, S.A. 3,835,725 2.3
Community Health Systems, Inc. 3,734,688 2.3
Twentieth Century Industries, Inc. 3,619,275 2.2
Global Marine, Inc. 3,559,650 2.2
$44,690,538 27.2%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED SEPTEMBER 30, 1995
SHARES
PURCHASES BOUGHT HOLDINGS 9/30/95
- -------------------------------------------------------------------------------
Alaska Air Group, Inc. 180,300 180,300
Apria Healthcare Group, Inc. 80,280 80,280
Bed Bath & Beyond, Inc. 74,300 74,300
Healthwise of America, Inc. 106,800 150,300
La Quinta Inns, Inc. 57,200 57,200
Noble Drilling Corp. 286,200 286,200
Telephone and Data Systems, Inc. 138,700 138,700
USA Waste Services, Inc. 113,200 113,200
USAir Group, Inc. 156,100 156,100
Xtra Corp 71,300 71,300
SALES SOLD HOLDINGS 9/30/95
- -------------------------------------------------------------------------------
ADVO Systems, Inc. 161,600 -0-
Abbey Healthcare Group, Inc. 70,600 -0-
Coram Healthcare Corp. 141,500 -0-
Cypress Semiconductor Corp. 67,900 -0-
Global Marine, Inc. 576,100 499,600
HFS, Inc. 75,100 46,200
Lotus Development Corp. 74,200 -0-
National Health Labs Holdings, Inc. 301,900 -0-
PXRE Corp. 98,400 30,100
Tommy Hilfiger Corp. 104,100 -0-
5
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-92.5%
CONSUMER PRODUCTS & SERVICES-28.8%
AIRLINES-5.7%
Alaska Air Group, Inc.* 180,300 $2,817,187
America West Airlines, Inc.* 103,200 1,599,600
Mesa Airlines, Inc.* 145,800 1,485,338
Pittston Services Group 65,100 1,765,837
USAir Group, Inc.* 156,100 1,795,150
9,463,112
APPAREL-2.5%
Jones Apparel Group, Inc.* 39,400 1,403,625
Nautica Enterprises, Inc.* 78,375 2,684,344
4,087,969
BROADCASTING & CABLE-3.0%
Cablevision Systems Corp. Cl.A* 23,700 1,413,112
CD Radio, Inc.* 119,400 485,063
Infinity Broadcasting Corp. Cl.A* 78,800 2,580,700
Valuevision International, Inc.* 80,000 470,000
4,948,875
COSMETICS-1.1%
Jean Philippe Fragrances, Inc.* 168,350 1,767,675
ENTERTAINMENT & LEISURE-1.0%
Heritage Media Corp.* 55,000 1,656,875
REAL ESTATE-0.5%
Summit Properties, Inc. 47,800 902,225
RESTAURANTS & LODGING-4.6%
HFS, Inc.* 46,200 2,419,725
Host Marriott Corp.* 204,300 2,528,213
La Quinta Inns, Inc. 57,200 1,601,600
Red Lion Hotels, Inc.* 45,800 961,800
7,511,338
RETAILING-9.6%
Bed Bath & Beyond, Inc.* 74,300 2,266,150
Corporate Express, Inc.* 68,700 1,674,562
Industrie Natuzzi S.p.A. (ADR)(a) 78,700 2,803,687
Musicland Stores, Inc.* 114,400 972,400
Nine West Group, Inc.* 145,800 6,633,900
Staples, Inc.* 49,750 1,405,438
15,756,137
OTHER-0.8%
Robert Mondavi Corp. Cl.A* 51,600 1,315,800
47,410,006
TECHNOLOGY-24.8%
COMMUNICATIONS EQUIPMENT-2.6%
Ascend Communications, Inc* 10,800 864,000
Dionex Corp.* 33,000 1,724,250
Scientific-Atlanta, Inc. 53,000 894,375
Stratacom, Inc.* 15,000 828,750
4,311,375
COMPUTER PERIPHERALS-2.8%
Komag, Inc.* 31,700 2,072,387
Lam Research Corp.* 14,200 848,450
Quantum Corp.* 44,400 971,250
Read-Rite Corp.* 20,900 762,850
4,654,937
COMPUTER SOFTWARE & SERVICES-6.8%
Cadence Design Systems, Inc.* 29,800 1,169,650
Checkfree Corp.* 13,100 262,000
Computer Management Sciences, Inc.* 3,400 57,800
Hummingbird Communications, Ltd.* 37,600 1,400,600
Informix Corp.* 125,800 4,088,500
Intersolv, Inc.* 60,100 1,209,512
Mentor Graphics Corp.* 52,400 1,093,850
6
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
Symantec Corp.* 45,800 $ 1,374,000
Wang Labs, Inc.* 31,700 503,238
11,159,150
ELECTRONICS-0.8%
Kemet Corp.* 37,400 1,280,950
TELECOMMUNICATIONS-11.8%
Adtran, Inc.* 22,100 767,975
Glenayre Technologies, Inc.* 12,850 925,200
Millicom International Cellular, S.A.* 119,400 3,835,725
Ortel Corp.* 78,300 1,096,200
Telephone and Data Systems, Inc. 138,700 5,825,400
Tellabs, Inc.* 20,200 850,925
United States Cellular Corp.* 110,800 4,044,200
Vanguard Cellular Systems, Inc. Cl.A* 81,200 2,080,750
19,426,375
40,832,787
HEALTH CARE-15.1%
BIOTECHNOLOGY-1.4%
Centocor, Inc.* 61,000 663,375
Cephalon, Inc.* 36,000 990,000
Medimmune, Inc.* 57,800 643,025
2,296,400
DRUGS, HOSPITAL SUPPLIES & MEDICAL SERVICES-13.7%
Apria Healthcare Group, Inc.* 80,280 1,986,930
Community Health Systems, Inc.* 92,500 3,734,688
Healthwise of America, Inc.* 150,300 4,208,400
Manor Care, Inc. 34,800 1,183,200
Medcath, Inc.* 107,600 1,990,600
Physician Reliance Network, Inc.* 91,400 3,381,800
Sun Healthcare Group, Inc.* 225,400 2,902,025
Surgical Care Affiliates, Inc. 90,300 2,099,475
Ventritex, Inc.* 54,600 1,173,900
22,661,018
24,957,418
ENERGY-11.9%
OIL & GAS SERVICES-10.3%
Arethusa, Ltd. 113,250 2,335,781
BJ Services Co.* 50,900 1,285,225
Global Marine, Inc.* 499,600 3,559,650
Noble Drilling Corp.* 286,200 2,218,050
Reading & Bates Corp.* 428,400 5,140,800
Rowan Cos., Inc.* 320,100 2,400,750
16,940,256
OTHER-1.6%
Diamond Shamrock, Inc. 110,200 2,713,675
19,653,931
FINANCIAL SERVICES-6.4%
BANKS-1.1%
First USA, Inc. 32,600 1,768,550
INSURANCE-4.7%
National Re Corp. 60,700 2,147,262
PXRE Corp. 30,100 820,225
Roosevelt Financial Group, Inc. 65,500 1,154,438
Twentieth Century Industries, Inc.* 235,400 3,619,275
7,741,200
OTHER-0.6%
Union Acceptance Corp. Cl.A* 53,100 995,625
10,505,375
BASIC INDUSTRIES-5.5%
ELECTRONICS-1.5%
AVX Corp.* 66,500 2,227,750
Zycon Corp.* 20,300 248,675
2,476,425
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ----------------------------------------------------------------------
ENVIRONMENTAL CONTROL-1.3%
USA Waste Services, Inc.* 113,200 $ 2,207,400
MACHINERY-0.8%
JLG Industries, Inc. 29,500 1,327,500
SURFACE TRANSPORTATION & SHIPPING-1.9%
Xtra Corp. 71,300 3,163,938
9,175,263
Total Common Stocks & Other Investments
(cost $125,569,438) 152,534,780
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ----------------------------------------------------------------------
CORPORATE BONDS-0.9%
COMMUNICATION & EQUIPMENT-0.9%
Intelcom Group, Inc.
8.00%, 9/17/98(b)(c)
(cost $1,673,559) $1,699 $1,456,386
SHORT-TERM DEBT SECURITIES-8.5%
Federal Home Loan Mortgage Corp.
6.30%, 10/02/95
(amortized cost $14,097,532) 14,100 14,097,532
TOTAL INVESTMENTS-101.9%
(cost $141,340,529) 168,088,698
Other assets less liabilities-(1.9%) (3,209,290)
NET ASSETS-100% $164,879,408
* Non-income producing security.
(a) Country of origin-Italy.
(b) Illiquid security, valued at fair value (see Notes A & F).
(c) Interest on this bond is paid-in-kind.
Glossary:
ADR - American Depository Receipt.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $141,340,529) $168,088,698
Cash 24,438
Receivable for investment securities sold 318,075
Receivable for capital stock sold 80,032
Dividends and interest receivable 33,595
Total assets 168,544,838
LIABILITIES
Payable for investment securities purchased 1,692,671
Payable for capital stock redeemed 1,343,956
Advisory fee payable 412,199
Distribution fee payable 40,482
Accrued expenses 176,122
Total liabilities 3,665,430
NET ASSETS $164,879,408
COMPOSITION OF NET ASSETS
Shares of capital stock, at par $13,725
Additional paid-in capital 96,201,509
Accumulated net realized gain 41,916,370
Net unrealized appreciation of investments 26,747,804
$164,879,408
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($146,663,499/
6,071,212 shares of capital stock issued and outstanding) $24.16
Sales charge-4.25% of public offering price 1.07
Maximum offering price $25.23
CLASS B SHARES
Net asset value and offering price per share ($16,604,423/
720,979 shares of capital stock issued and outstanding) $23.03
CLASS C SHARES
Net asset value, redemption and offering price per share($1,611,486/
69,926 shares of capital stock issued and outstanding) $23.05
See notes to financial statements.
9
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995 ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $4,114) $ 641,381
Interest 525,071 $ 1,166,452
EXPENSES
Advisory fee 1,503,752
Distribution fee - Class A 287,237
Distribution fee - Class B 134,166
Distribution fee - Class C 12,807
Transfer agency 390,653
Administrative 148,275
Custodian 101,033
Printing 88,152
Audit and legal 87,054
Registration 64,101
Directors' fees 35,750
Miscellaneous 40,212
Total expenses 2,893,192
Net investment loss (1,726,740)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 34,342,023
Net change in unrealized appreciation of investments 7,569,209
Net gain on investments 41,911,232
NET INCREASE IN NET ASSETS FROM OPERATIONS $40,184,492
See notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (1,726,740) $ (2,438,629)
Net realized gain on investments 34,342,023 27,802,854
Net change in unrealized appreciation
of investments 7,569,209 (34,057,642)
Net increase (decrease) in net assets
from operations 40,184,492 (8,693,417)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (23,368,345) (6,805,737)
Class B (2,216,109) (534,138)
Class C (172,655) (50,698)
CAPITAL STOCK TRANSACTIONS
Net decrease (20,139,054) (59,096,002)
Total decrease (5,711,671) (75,179,992)
NET ASSETS
Beginning of year 170,591,079 245,771,071
End of year $164,879,408 $170,591,079
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Quasar Fund, Inc. (the 'Fund'), is registered under the Investment
Company Act of 1940 as a diversified open-end management investment company.
The Fund offers Class A, Class B, and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares are sold without an initial or contingent deferred
sales charge. All three classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange are valued at the
last reported sales price, or, if no sale occurred, at the mean of the bid and
asked price at the regular close of the New York Stock Exchange.
Over-the-counter securities not traded on national securities exchanges are
valued at the mean of the closing bid and asked price. Securities which mature
in 60 days or less are valued at amortized cost which approximates market
value. Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at their fair value as determined in good faith by the Board of
Directors.
2. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
5. RECLASSIFICATION OF NET ASSETS
As the Fund may not utilize net investment losses in future periods for tax
purposes, the Fund reclassified net investment losses of $1,726,740 to
additional paid-in capital at September 30, 1995. This reclassification had no
effect on net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser'), an advisory fee at a quarterly rate
equal to .25 of 1% (approximately 1% on an annual basis) of the net assets of
the Fund valued on the last business day of the previous quarter. The Adviser
has agreed, under the terms of the investment advisory agreement, to reimburse
the Fund to the extent that its aggregate expenses (exclusive of interest,
taxes, brokerage, distribution fees and extraordinary expenses) exceed the
limits prescribed by any state in which the Fund's shares are qualified for
sale. The Adviser believes that the most restrictive expense ratio limitation
imposed by any state is 2.5% of the first $30 million of its average daily net
assets, 2% of the next $70 million of its average daily net assets and 1.5% of
its average daily net assets in excess of $100 million. No reimbursement was
required for the year ended September 30, 1995. Pursuant to the advisory
12
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
agreement, the Fund paid $148,275 to the Adviser representing the cost of
certain legal and accounting services provided to the Fund by the Adviser for
the year ended September 30, 1995.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) in accordance with a Services Agreement for providing personnel
and facilities to perform transfer agency services for the Fund. Such
compensation amounted to $291,350 for the year ended September 30, 1995.
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 $6,484 from the sales of Class A shares and $72,236
in contingent deferred sales charges imposed upon redemption by shareholders of
Class B shares for the year ended September 30, 1995.
Brokerage commissions paid on securities transactions for the year ended
September 30, 1995 amounted to $742,458, of which $9,305 was paid to affiliated
brokers.
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 0.30% of the Fund's average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to both
Class B and C shares. Such fee is 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 $764,753 and $159,240 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
investments), aggregated $232,454,092 and $280,514,164, respectively, for the
year ended September 30, 1995. At September 30, 1995, the cost of securities
for federal income tax purposes was $141,700,353. Accordingly, gross unrealized
appreciation of investments was $31,262,644 and gross unrealized depreciation
of investments was $4,874,299, resulting in net unrealized appreciation of
$26,388,345.
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 150,000,000 shares of $.002 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 50,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
----------- ----------- ------------- -------------
CLASS A
Shares sold 3,338,142 4,705,316 $ 67,549,983 $109,905,120
Shares issued in
reinvestment of
distributions 1,152,408 242,531 19,717,689 5,699,462
Shares redeemed (5,282,536) (7,451,665) (108,851,637) (174,329,735)
Net decrease (791,986) (2,503,818) $(21,583,965) $(58,725,153)
CLASS B
Shares sold 1,011,429 480,794 $ 19,591,440 $ 10,693,132
Shares issued in
reinvestment of
distributions 103,261 16,646 1,694,515 381,352
Shares redeemed (1,027,961) (565,891) (20,017,278) (12,697,287)
Net increase (decrease) 86,729 (68,451) $ 1,268,677 $ (1,622,803)
CLASS C
Shares sold 207,104 199,009 $ 4,321,456 $ 4,482,922
Shares issued in
reinvestment of
distributions 8,223 1,676 135,017 38,404
Shares redeemed (201,051) (149,962) (4,280,239) (3,269,372)
Net increase 14,276 50,723 $ 176,234 $ 1,251,954
_______________________________________________________________________________
NOTEF: ILLIQUID SECURITY
DATE
ACQUIRED COST
-------- ----------
Intelcom Group, Inc., 8.00%, 9/17/98 9/16/93 $1,673,559
The security shown above is restricted as to sale and has been valued at fair
value in accordance with the procedures described in Note A.
The value of this security at September 30, 1995 was $1,456,386 representing
0.9% of net assets.
14
FINANCIAL HIGHLIGHTS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $22.65 $24.43 $19.34 $21.27 $15.67
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.22)(d) (.60) (.41) (.24) (.05)
Net realized and unrealized gain (loss) on investments 5.59 (.36) 6.38 (1.53) 5.71
Net increase (decrease) in net asset value from operations 5.37 (.96) 5.97 (1.77) 5.66
LESS: DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.06)
Distributions from net realized gains (3.86) (.82) (.88) (.16) -0-
Total dividends and distributions (3.86) (.82) (.88) (.16) (.06)
Net asset value, end of year $24.16 $22.65 $24.43 $19.34 $21.27
TOTAL RETURN
Total investment return based on net asset value (a) 30.73% (4.05)% 31.58% (8.34)% 36.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $146,663 $155,470 $228,874 $252,140 $333,806
Ratio of expenses to average net assets 1.83% 1.67% 1.65% 1.62% 1.64%
Ratio of net investment loss to average net assets (1.06)% (1.15)% (1.00)% (.89)% (.22)%
Portfolio turnover rate 160% 110% 102% 128% 118%
</TABLE>
See footnote summary on page 17.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $21.92 $23.88 $19.07 $21.14 $15.66
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.37)(d) (.53) (.18) (.39) (.13)
Net realized and unrealized gain (loss) on investments 5.34 (.61) 5.87 (1.52) 5.67
Net increase (decrease) in net asset value from operations 4.97 (1.14) 5.69 (1.91) 5.54
LESS: DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.06)
Distributions from net realized gains (3.86) (.82) (.88) (.16) -0-
Total dividends and distributions (3.86) (.82) (.88) (.16) (.06)
Net asset value, end of year $23.03 $21.92 $23.88 $19.07 $21.14
TOTAL RETURN
Total investment return based on net asset value (a) 29.78% (4.92)% 30.53% (9.05)% 35.54%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $16,604 $13,901 $16,779 $9,454 $7,346
Ratio of expenses to average net assets 2.65% 2.50% 2.46% 2.42% 2.41%
Ratio of net investment loss to average net assets (1.88)% (1.98)% (1.81)% (1.67)% (1.28)%
Portfolio turnover rate 160% 110% 102% 128% 118%
</TABLE>
See footnote summary on page 17.
16
Alliance Quasar Fund, Inc.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-----------------------------------
MAY 3, 1993(B)
TO
YEAR ENDED SEP. 30, SEP. 30,
1995 1994 1993
---------- -------- -------------
Net asset value, beginning of period $21.92 $23.88 $20.33
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.37)(d) (.36) (.10)
Net realized and unrealized gain (loss)
on investments 5.36 (.78) 3.65
Net increase (decrease) in net asset
value from operations 4.99 (1.14) 3.55
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.86) (.82) -0-
Total distributions (3.86) (.82) -0-
Net asset value, end of period $23.05 $21.92 $23.88
TOTAL RETURN
Total investment return based on
net asset value (a) 29.87% (4.92)% 17.46%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $1,611 $1,220 $118
Ratio of expenses to average net assets 2.64% 2.48% 2.49%(c)
Ratio of net investment loss to
average net assets (1.76)% (1.96)% (1.90)%(c)
Portfolio turnover rate 160% 110% 102%
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for periods of less than one year is
not annualized.
(b) Commencement of distribution.
(c) Annualized.
(d) Based on average shares outstanding.
17
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS ALLIANCE QUASAR FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance Quasar Fund, Inc. (the 'Fund'), including the portfolio of
investments, as of September 30, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Quasar Fund, Inc. at September 30, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated periods, in conformity with generally accepted accounting principles.
New York, New York
November 3, 1995
18
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
HENRY UGARTE (1)
OFFICERS
ALDEN M. STEWART, PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
RANDALL E. HAASE, VICE PRESIDENT
TIMOTHY D. RICE, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR
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
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
19
ALLIANCE QUASAR FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
QSRAR
