ALLIANCE QUASAR FUND, INC.
SEMI-ANNUAL REPORT
MARCH 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
May 3, 1996
Dear Shareholder:
It's been a period of strong gains in global financial markets, and as shown in
the table below Alliance Quasar Fund enjoyed extraordinary returns in both the
six- and twelve-month periods ended March 31, 1996. For comparison we've shown
the performance for the S&P 500-stock Index, a common measure of stock market
performance in the U.S., and for the Russell 2000, which measures the
performance of the smallest 2,000 stocks on the New York and American stock
exchanges.
TOTAL RETURN
PERIODS ENDED MARCH 31, 1996
SIX MONTHS TWELVE MONTHS
---------- -------------
ALLIANCE QUASAR FUND
Class A +30.84% +64.64%
Class B +30.54% +63.65%
Class C +30.31% +63.26%
S&P 500 +11.68% +32.00%
RUSSELL 2000 +7.41% +29.09%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
MARCH 31; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3. THE FUND'S BENCHMARKS
ARE UNMANAGED.
SIX MONTHS IN REVIEW
During the past six months the Fund benefited tremendously from several
factors. In July 1995, we reduced the Fund's technology weighting from 28% of
net assets to 8% because of the premium valuations being given to technology
stocks. This represented an underweighting in the sector relative to the 14-15%
included in the Russell 2000 Index. (Technology holdings have subsequently
moved back up to about 22%.) The Fund's overweight position in energy stocks,
at about 9% of the portfolio, also contributed to strong performance as these
stocks continued to outperform the broad equity market (this sector generally
has not received a lot of attention for several years and is finally getting
noticed). Within the sector, the Fund's holdings in offshore drilling companies
performed particularly well. There is a worldwide shortage of offshore drilling
rigs and the day rates for oil and gas drilling are up over 100% year over year
for companies such as Diamond Offshore Drilling, Global Marine and Rowan
Companies.
The Fund also benefited from a 5% overweight position in airline stocks that we
initiated during the fall of 1995 with purchases of U.S. Air, Alaska Airlines
and AmericaWest. Calendar 1995 was the first profitable year for the airline
industry in many years and we believe 1996 will be the second year of a
multi-year secular cycle for the industry. Unlike past airline cycles, these
companies are taking their cash flow and paying down debt and restructuring
their balance sheets. With increasing demand outpacing capacity growth, this
allows for tremendous pricing power and higher yields. In prior airline cycles
the operators used profits to buy more planes and increase capacity to maximize
revenue growth, which in retrospect proved to be a costly mistake.
The Fund's retail holdings continued to perform well as investors' fears of
recession faded. Holdings in Nine West, Bed Bath & Beyond, Nautica and Gucci
performed quite well. Next, the Fund's cellular stocks continued to appreciate;
Millicom International, the world's largest provider of cellular coverage in
lesser developed countries, was up sharply and its subscriber growth continues
to exceed 100% on a year over year basis. We've had the Fund underweighted in
financial stocks, technology stocks, and cyclical stocks for the entire
reporting period.
MARKET ENVIRONMENT AND OUTLOOK
The market continues to benefit from modest economic growth and modest
inflation. As a result, the companies that are reporting better than average
earnings are gaining attention in the marketplace which has consequently driven
market valuations higher.
Looking forward, we still have a positive outlook for the U.S. economy and
equity market. However, an increase in interest rates would put some pressure
on price earnings multiples which means that stocks with higher multiples could
become vulnerable. As a result, we continue to focus on the underlying earnings
of each company and to avoid unnecessary risk with regard to price earnings
multiples.
We remain enthusiastic about the growth potential of small capitalization
stocks. After underperforming large cap stocks in both 1994 and 1995, small cap
stocks have outperformed large
1
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
cap stocks so far this year, and it looks as though this could be the beginning
of a multi-year cycle for small cap investing.
Thank you for your continued interest in Alliance Quasar Fund. We look forward
to reporting to you again on market activity and the Fund's investment results
later in the year.
Sincerely,
Alden M. Stewart
President
Randall E. Haase
Vice President and Portfolio Manager
2
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
OBJECTIVE AND POLICIES
Alliance Quasar Fund seeks growth of capital by pursuing aggressive investment
policies. Quasar Fund invests primarily in a diversified portfolio of equity
securities of any company and industry and in any type of security which is
believed to offer possibilities for capital appreciation.
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURN AS OF MARCH 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +64.64% +57.66%
. Five Years +16.19% +15.19%
. Ten Years +11.18% +10.70%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +63.65% +59.65%
. Five Years +15.28% +15.28%
. Since Inception* +16.80% +16.80%
CLASS C SHARES
. One Year +63.26%
. Since Inception* +24.34%
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
TEN LARGEST HOLDINGS
MARCH 31, 1996 (UNAUDITED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Healthsouth Corp. $ 9,069,805 3.8%
Healthwise of America, Inc. 7,063,575 3.0
Telephone and Data Systems, Inc. 6,997,625 2.9
Nine West Group, Inc. 6,608,600 2.8
Office Max, Inc. 6,377,750 2.7
Millicom International Cellular, S.A. 5,864,700 2.4
USA Waste Services, Inc. 5,365,200 2.2
Physio-Control International Corp. 4,374,000 1.8
Alaska Air Group, Inc. 4,282,675 1.8
Arethusa, Ltd. 4,174,494 1.7
$60,178,424 25.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
_______________________________________________________________________________
SHARES
--------------------------------
PURCHASES BOUGHT HOLDINGS 3/31/96
- -------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 81,700 81,700
Exabyte Corp. 174,300 174,300
Loewen Group, Inc. 104,300 104,300
Office Max, Inc. 263,000 263,000
Physio-Control International Corp. 218,700 218,700
Sterling Software, Inc. 40,600 40,600
Stewart Enterprises, Inc. 54,200 54,200
Tommy Hilfiger Corp. 51,600 51,600
United Waste Systems, Inc. 53,900 53,900
Wisconsin Central Transport Corp. 39,900 39,900
SALES SOLD HOLDINGS 3/31/96
- -------------------------------------------------------------------------------
Apria Healthcare Group, Inc. 80,280 -0-
AVX Corp. 66,500 -0-
Community Health Systems, Inc. 92,500 -0-
Dionex Corp. 33,000 -0-
Global Marine, Inc. 287,000 212,600
HFS, Inc. 46,200 -0-
Medcath, Inc. 107,600 -0-
Physician Reliance Network, Inc. 91,400 -0-
Reading & Bates Corp. 318,500 109,900
Sun Healthcare Group, Inc. 225,400 -0-
4
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
COMMON STOCKS-89.1%
CONSUMER PRODUCTS & SERVICES-26.8%
AIRLINES-4.7%
Alaska Air Group, Inc.* 160,100 $ 4,282,675
America West Airlines, Inc.* 151,600 3,240,450
USAir Group, Inc.* 205,800 3,755,850
-----------
11,278,975
APPAREL-3.9%
Gucci Group N.V.*(a) 50,500 2,424,000
Jones Apparel Group, Inc.* 35,600 1,726,600
Nautica Enterprises, Inc.* 60,075 2,868,581
Tommy Hilfiger Corp.* 51,600 2,367,150
-----------
9,386,331
BROADCASTING & CABLE-2.2%
American Radio Systems Corp.* 33,400 1,127,250
Cablevision Systems Corp. Cl.A* 22,000 1,265,000
Infinity Broadcasting Corp. Cl.A* 64,900 2,815,038
-----------
5,207,288
ENTERTAINMENT & LEISURE-1.0%
Heritage Media Corp.* 43,600 1,564,150
Penske Motorsports, Inc.* 22,200 826,950
-----------
2,391,100
RESTAURANTS & LODGING-3.6%
Extended Stay America, Inc.* 50,100 1,114,725
Host Marriott Corp.* 300,200 4,052,700
La Quinta Inns, Inc. 118,100 3,469,187
-----------
8,636,612
RETAILING-9.1%
Bed Bath & Beyond, Inc.* 41,800 2,204,950
Charming Shoppes, Inc.* 200,500 1,033,828
Industrie Natuzzi S.p.A. (ADR)*(b) 68,800 3,741,000
Nine West Group, Inc.* 152,800 6,608,600
Office Max, Inc.* 263,000 6,377,750
Williams-Sonoma, Inc.* 84,800 1,929,200
-----------
21,895,328
OTHER-2.3%
Loewen Group, Inc. 104,300 3,050,775
Stewart Enterprises, Inc. 54,200 2,317,050
-----------
5,367,825
-----------
64,163,459
TECHNOLOGY-22.2%
COMMUNICATIONS EQUIPMENT-1.9%
Ascend Communications, Inc* 25,000 1,346,875
Cascade Communications Corp.* 20,200 1,812,950
Intelcom Group, Inc.* 85,800 1,522,950
-----------
4,682,775
COMPUTER PERIPHERALS-0.9%
Western Digital Corp.* 78,000 1,501,500
Xircom, Inc.* 40,500 561,938
-----------
2,063,438
COMPUTER SOFTWARE & SERVICES-8.3%
Cadence Design Systems, Inc.* 41,100 1,813,537
DST Systems, Inc.* 53,400 1,635,375
Exabyte Corp.* 174,300 2,843,269
Hyperion Software Corp.* 88,700 1,929,225
Informix Corp.* 100,900 2,661,237
Integrated Systems, Inc.* 34,000 1,640,500
Intersolv, Inc.* 99,400 1,155,525
Sierra On-line, Inc.* 5,700 191,663
Sterling Software, Inc.* 40,600 2,862,300
Storage Technology Corp.* 47,000 1,227,875
Wonderware Corp.* 78,500 1,844,750
-----------
19,805,256
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
ELECTRONICS-2.4%
BMC Industries, Inc. 68,900 $ 1,481,350
Cable Design Technologies Corp.* 33,900 1,245,825
Cambridge Technology Partners, Inc.* 2,700 154,237
Fore Systems, Inc.* 24,200 1,730,300
Kemet Corp.* 54,000 1,221,750
-----------
5,833,462
TELECOMMUNICATIONS-8.7%
Andrew Corp.* 45,350 1,734,637
Millicom International Cellular, S.A.* 135,600 5,864,700
Telephone and Data Systems, Inc. 151,300 6,997,625
Tellabs, Inc.* 30,300 1,465,763
United States Cellular Corp.* 95,000 3,277,500
Vanguard Cellular Systems, Inc. Cl.A* 77,500 1,550,000
-----------
20,890,225
-----------
53,275,156
HEALTH CARE-14.2%
BIOTECHNOLOGY-3.9%
Centocor, Inc.* 58,500 2,113,312
Medimmune, Inc.* 59,900 943,425
Neurex Corp.* 93,900 1,948,425
Physio-Control International Corp.* 218,700 4,374,000
-----------
9,379,162
DRUGS, HOSPITAL SUPPLIES & MEDICAL SERVICES-10.3%
GelTex Pharmaceuticals, Inc.* 69,200 1,487,800
Healthsouth Corp.* 266,759 9,069,805
Healthwise of America, Inc.* 177,700 7,063,575
National Surgery Centers, Inc.* 63,300 2,041,425
Summit Technology, Inc.* 59,100 $1,396,239
Veterinary Centers of America, Inc.* 129,700 3,501,900
-----------
24,560,744
-----------
33,939,906
BASIC INDUSTRIES-11.2%
AIR FREIGHT-0.7%
Pittston Brink's Group 61,500 1,645,125
CHEMICALS-0.7%
Cytec Industries, Inc.* 20,000 1,690,000
ENVIRONMENTAL CONTROL-3.3%
United Waste Systems, Inc.* 53,900 2,695,000
USA Waste Services, Inc.* 210,400 5,365,200
-----------
8,060,200
MACHINERY-1.2%
JLG Industries, Inc. 62,200 2,845,650
METAL HARDWARE-2.5%
Alumax, Inc.* 66,200 2,341,825
Century Aluminum Co.* 141,100 1,922,487
Kaiser Aluminum Corp.* 112,500 1,729,688
-----------
5,994,000
SURFACE TRANSPORTATION & SHIPPING-2.8%
Wisconsin Central Transport Corp.* 39,900 2,653,350
Xtra Corp. 85,700 4,006,475
-----------
6,659,825
-----------
26,894,800
ENERGY-9.3%
OIL & GAS SERVICES-9.3%
Arethusa, Ltd. 110,950 4,174,494
Diamond Offshore Drilling, Inc.* 81,700 3,502,887
Diamond Shamrock, Inc. 106,000 3,445,000
Global Marine, Inc.* 212,600 2,126,000
Noble Drilling Corp.* 252,900 3,129,638
Reading & Bates Corp.* 109,900 2,170,525
Rowan Cos., Inc.* 298,500 3,805,875
-----------
22,354,419
6
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
FINANCIAL SERVICES-5.4%
FINANCE-2.3%
Money Store, Inc. 94,700 $ 2,639,763
Onyx Acceptance Corp.* 81,400 1,139,600
Oxford Resources Corp.* 62,400 1,747,200
-----------
5,526,563
INSURANCE-3.1%
Guaranty National Corp. 39,700 655,050
National Re Corp. 52,200 1,761,750
Riscorp, Inc.* 97,900 1,860,100
Roosevelt Financial Group, Inc. 19,100 353,350
Twentieth Century Industries, Inc.* 160,200 2,683,350
-----------
7,313,600
-----------
12,840,163
Total Common Stocks
(cost $159,908,067) 213,467,903
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ------------------------------------------------------------------------
CORPORATE BONDS-0.6%
COMMUNICATION & EQUIPMENT-0.6%
Intelcom Group, Inc.(c)(d)
8.00%, 9/17/98
(cost $1,727,657) $ 1,758 $ 1,506,606
SHORT-TERM DEBT SECURITIES-12.5%
Federal Home Loan Bank
5.25%, 4/01/96
(amortized cost $29,786,963) 29,800 29,800,000
TOTAL INVESTMENTS-102.2%
(cost $191,435,724) 244,774,509
Other assets less liabilities-(2.2%) (5,166,542)
NET ASSETS-100% $239,607,967
* Non-income producing security.
(A) Country of origin - Netherlands.
(b) Country of origin - Italy.
(c) Illiquid security, valued at fair value (see Notes A & F).
(d) Interest on this bond is paid-in-kind.
Glossary:
ADR - American Depository Receipt
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996 (UNAUDITED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $191,435,724) $244,774,509
Cash 1,175,253
Receivable for investment securities sold 3,584,226
Receivable for capital stock sold 1,490,494
Interest and dividends receivable 30,392
Other assets 4,575
Total assets 251,059,449
LIABILITIES
Payable for investment securities purchased 10,591,274
Advisory fee payable 594,323
Distribution fee payable 61,674
Payable for capital stock redeemed 39,807
Accrued expenses 164,404
Total liabilities 11,451,482
NET ASSETS $239,607,967
COMPOSITION OF NET ASSETS
Shares of capital stock, at par $ 18,864
Additional paid-in capital 152,611,354
Accumulated net investment loss (1,141,958)
Accumulated net realized gain 34,781,489
Net unrealized appreciation of investments and other assets 53,338,218
-------------
$239,607,967
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($203,483,237/
7,932,977 shares of capital stock issued and outstanding) $25.65
Sales charge-4.25% of public offering price 1.14
Maximum offering price $26.79
CLASS B SHARES
Net asset value and offering price per share($29,345,764/
1,217,397 shares of capital stock issued and outstanding) $24.11
CLASS C SHARES
Net asset value, redemption and offering price per share($6,778,966
/281,461 shares of capital stock issued and outstanding) $24.08
See notes to financial statements.
8
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 437,252
Dividends 187,259 $ 624,511
EXPENSES
Advisory fee 1,054,194
Distribution fee - Class A 168,582
Distribution fee - Class B 98,881
Distribution fee - Class C 17,636
Transfer agency 170,985
Administrative 67,292
Custodian 59,444
Registration 44,128
Audit and legal 39,351
Directors' fees 17,390
Printing 12,330
Miscellaneous 16,256
Total expenses 1,766,469
Net investment loss (1,141,958)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 26,532,917
Net change in unrealized appreciation of investments 26,590,414
Net gain on investments 53,123,331
NET INCREASE IN NET ASSETS FROM OPERATIONS $51,981,373
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SIX MONTHS ENDED
MARCH 31,1996 YEAR ENDED
(UNAUDITED) SEP. 30,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (1,141,958) $ (1,726,740)
Net realized gain on investments 26,532,917 34,342,023
Net change in unrealized appreciation of
investments 26,590,414 7,569,209
Net increase in net assets from operations 51,981,373 40,184,492
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (29,221,160) (23,368,345)
Class B (3,571,423) (2,216,109)
Class C (875,215) (172,655)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 56,414,984 (20,139,054)
Total increase (decrease) 74,728,559 (5,711,671)
NET ASSETS
Beginning of year 164,879,408 170,591,079
End of period $239,607,967 $164,879,408
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 (UNAUDITED) 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 any, 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 the 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.
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 six months ended March 31, 1996. Pursuant to the advisory
agreement, the Fund paid $67,292 to the Adviser representing the cost of
certain legal and accounting services provided to the Fund by the Adviser for
the six months ended March 31, 1996.
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 $124,338 for the six months ended March 31, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
charges of $20,828 from the sales of Class A shares and $29,693 in contingent
deferred sales charges imposed upon redemption by shareholders of Class B
shares for the six months ended March 31, 1996.
Brokerage commissions paid on securities transactions for the six months ended
March 31, 1996 amounted to $328,100, none of which 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 $1,003,031 and $261,774 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 $159,154,846 and $151,223,416, respectively, for the
six months ended March 31, 1996. At March 31, 1996, the cost of securities for
federal income tax purposes was $191,944,040. Accordingly, gross unrealized
appreciation of investments was $54,183,650 and gross unrealized depreciation
of investments was $1,353,178, resulting in net unrealized appreciation of
$52,830,472.
12
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
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ -------------- -------------
CLASS A
Shares sold 2,940,904 3,338,142 $ 68,757,337 $ 67,549,983
Shares issued in
reinvestment of
distributions 1,253,727 1,152,408 25,952,159 19,717,689
Shares redeemed (2,332,866) (5,282,536) (53,787,157) (108,851,637)
Net increase(decrease) 1,861,765 (791,986) $ 40,922,339 $(21,583,965)
CLASS B
Shares sold 741,480 1,011,429 $ 16,254,850 $ 19,591,440
Shares issued in
reinvestment of
distributions 171,932 103,261 3,349,236 1,694,515
Shares redeemed (416,994) (1,027,961) (9,059,012) (20,017,278)
Net increase 496,418 86,729 $ 10,545,074 $ 1,268,677
CLASS C
Shares sold 788,494 207,104 $ 17,359,802 $ 4,321,456
Shares issued in
reinvestment of
distributions 16,499 8,223 321,569 135,017
Shares redeemed (593,458) (201,051) (12,733,800) (4,280,239)
Net increase 211,535 14,276 $ 4,947,571 $ 176,234
NOTEF: ILLIQUID SECURITY
DATE
ACQUIRED COST
-------- ----------
Intelcom Group, Inc., 8.00%, 9/17/98 9/16/93 $1,727,657
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 March 31, 1996 was $1,506,606 representing 0.6%
of net assets.
13
FINANCIAL HIGHLIGHTS ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31,1996 ------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ------------ ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $24.16 $22.65 $24.43 $19.34 $21.27 $15.67
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.12) (.22)(d) (.60) (.41) (.24) (.05)
Net realized and unrealized gain (loss)
on investments 6.42 5.59 (.36) 6.38 (1.53) 5.71
Net increase (decrease) in net asset
value from operations 6.30 5.37 (.96) 5.97 (1.77) 5.66
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- -0- (.06)
Distributions from net realized gains (4.81) (3.86) (.82) (.88) (.16) -0-
Total dividends and distributions (4.81) (3.86) (.82) (.88) (.16) (.06)
Net asset value, end of period $25.65 $24.16 $22.65 $24.43 $19.34 $21.27
TOTAL RETURN
Total investment return based on
net asset value (a) 30.84% 30.73% (4.05)% 31.58% (8.34)% 36.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $203,483 $146,663 $155,470 $228,874 $252,140 $333,806
Ratio of expenses to average net assets 1.83%(c) 1.83% 1.67% 1.65% 1.62% 1.64%
Ratio of net investment loss to average
net assets (1.14)%(c) (1.06)% (1.15)% (1.00)% (.89)% (.22)%
Portfolio turnover rate 87% 160% 110% 102% 128% 118%
Average commission rate (e) $.0599 $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
See footnote summary on page 16.
14
ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31,1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ------------ ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $23.03 $21.92 $23.88 $19.07 $21.14 $15.66
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.14) (.37)(d) (.53) (.18) (.39) (.13)
Net realized and unrealized gain (loss)
on investments 6.03 5.34 (.61) 5.87 (1.52) 5.67
Net increase (decrease) in net asset
value from operations 5.89 4.97 (1.14) 5.69 (1.91) 5.54
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- -0- (.06)
Distributions from net realized gains (4.81) (3.86) (.82) (.88) (.16) -0-
Total dividends and distributions (4.81) (3.86) (.82) (.88) (.16) (.06)
Net asset value, end of period $24.11 $23.03 $21.92 $23.88 $19.07 $21.14
TOTAL RETURN
Total investment return based on
net asset value (a) 30.54% 29.78% (4.92)% 30.53% (9.05)% 35.54%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $29,346 $16,604 $13,901 $16,779 $9,454 $7,346
Ratio of expenses to average net assets 2.64%(c) 2.65% 2.50% 2.46% 2.42% 2.41%
Ratio of net investment loss to average
net assets (1.95)%(c) (1.88)% (1.98)% (1.81)% (1.67)% (1.28)%
Portfolio turnover rate 87% 160% 110% 102% 128% 118%
Average commision rate (e) $.0599 $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
See footnote summary on page 16.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE QUASAR FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------
SIX MONTHS MAY 3, 1993(B)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31,1996 ------------------------- SEPTEMBER 30,
(UNAUDITED) 1995 1994 1993
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $23.05 $21.92 $23.88 $20.33
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.14) (.37)(d) (.36) (.10)
Net realized and unrealized gain (loss)
on investments 5.98 5.36 (.78) 3.65
Net increase (decrease) in net asset
value from operations 5.84 4.99 (1.14) 3.55
LESS: DIVIDENDS AND DISTRIBUTIONS
Distributions from net realized gains (4.81) (3.86) (.82) -0-
Total distributions (4.81) (3.86) (.82) -0-
Net asset value, end of period $24.08 $23.05 $21.92 $23.88
TOTAL RETURN
Total investment return based on
net asset value (a) 30.31% 29.87% (4.92)% 17.46%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $6,779 $1,611 $1,220 $118
Ratio of expenses to average net assets 2.65%(c) 2.64% 2.48% 2.49%(c)
Ratio of net investment loss to average
net assets (1.95)%(c) (1.76)% (1.96)% (1.90)%(c)
Portfolio turnover rate 87% 160% 110% 102%
Average commission rate (e) $.0599 $ -0- $ -0- $ -0-
</TABLE>
(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.
(b) Annualized.
(d) Based on average shares outstanding.
(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.
16
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)
DONALD J. ROBINSON (1)
OFFICERS
ALDEN M. STEWART, PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
RANDALL E. HAASE, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
TIMOTHY D. RICE, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, 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.
17
THE ALLIANCE FAMILY OF MUTUAL FUNDS
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
18
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.
QSRSR
