THE SPAIN FUND
SEMI-ANNUAL REPORT
MAY 31, 1996
LETTER TO SHAREHOLDERS THE SPAIN FUND
_______________________________________________________________________________
July 23, 1996
Dear Shareholder:
We reported to you in our last letter that we expected Spain's Partido Popular
to forge a coalition with the Catalan Nationalist party, producing the first
right-wing-led government since Franco died and democracy was restored. In
fact, that has happened. Equally important, the inauguration of the new
coalition has coincided with a surge of optimism for Spanish equities.
Investors who believe that a new era of government attached to a more liberal
economic doctrine will provide a more favorable investment environment are
embracing stocks, and their prices have been rising. Both the broad market and
your Fund have benefited in the last quarter.
INVESTMENT RESULTS
We are pleased to report that for the three months ended May 31, 1996, The
Spain Fund outperformed its benchmark, the Madrid General Index, gaining 2.52%
on a net asset value basis versus a 1.1% increase for the benchmark. Returns
for the Fund and its comparative index include reinvested dividends.
During the fiscal semi-annual and rolling 12-month periods also ending May 31,
1996, the Fund posted attractive gains on a net asset value basis of 13.15% and
14.35%, respectively, but lagged the 13.2% and 21.0% returns of the Madrid
General Index for the same 6- and 12-month periods. As we reported to you last
quarter, the Fund's longer-term performance has trailed the Index due to the
portfolio's investments in small-capitalization, growth-company stocks, which
have, until recently, underperformed the large-capitalization stocks that make
up the Index.
ECONOMIC OVERVIEW: MIXED SIGNALS AND A FORECAST FOR MODEST GROWTH
Although we certainly welcome the change in government, there remains a long
road ahead before Spain's economy can finally be described as modernized. As
yet, the new administration has shown little willingness to tackle the
country's archaic labor laws and sprawling bureaucracy, which remain the prime
inhibitors to growth at this time. What is evident already is that the primary
policy objective of the new regime will be to meet the Maastricht targets for
the European Monetary Unit (EMU) by the end of 1997.
Spain has reduced the size of its budget deficit in order to comply with
Maastricht, and the first budget of the new government has incorporated $1.5
billion of spending cuts. Unfortunately, most of the cuts were aimed at
investment spending and public works while social welfare remained largely
untouched. Spending growth this year, however, is forecast to be unchanged in
real terms from 1995. That bodes well for the overall deficit, although more
cuts will probably be needed in 1997.
Investors' response to the package has been favorable. The peseta (Pta) remains
at the top of the Exchange Rate Mechanism despite the fact that the Bank of
Spain has cut short-term interest rates by 2% since December 1995.
Consequently, the outlook for growth in 1996 and 1997 remains uncertain. Cuts
in government spending will dampen growth prospects, while lower interest rates
should prove stimulative.
We currently estimate that gross domestic product will increase approximately
2% in 1996 and in 1997, but foresee a change in its components. The consumer,
having been extremely reticent over the past five years due to high
unemployment and falling, inflation-adjusted asset values, may provide the
major element of growth. We believe declining interest rates will stimulate the
housing market and lower the costs of borrowing.
PORTFOLIO STRATEGY: A NEW EMPHASIS ON DEMAND-SENSITIVE ISSUES
Given our belief that domestic demand will continue to improve, we have shifted
the emphasis of the Fund's portfolio toward more demand-sensitive issues.
Additions of Cortefiel, the broadly based retailer, and Sol Melia, the hotel
management group, which recently completed its initial public offering, mean
that your Fund now maintains a greater exposure to stocks driven by consumer
spending.
At the same time, we have added the three motorway concession companies:
Iberpistas, Autopistas Concesionaria Espanola, S.A., and Autopistas del Mare
Nostrum, S.A. These investments look attractive relative to current bond market
conditions and should benefit from a recovery in consumer confidence.
We have also increased the Fund's exposure to real estate. We recently acquired
shares of Vallehermoso, a property company with a substantial land bank. We
expect that it will benefit from an improvement in housing-market conditions.
1
THE SPAIN FUND
_______________________________________________________________________________
A POSITIVE OUTLOOK FOR STOCKS
Your portfolio remains broadly and fully invested, reflecting our continued
optimism for the future course of equities in Spain. Our positive view has been
enhanced by the government's recent move to a flat-rate capital-gains tax of
20% above the Pta 200,000 exemption limit. This new rate compares with the
previous practice of taxing capital gains at the taxpayers' highest marginal
rate of income. This move should help attract more domestic savings to the
local stock market. Spanish investors have largely neglected stocks, and the
flow to mutual funds has been invested primarily in income-producing,
cash-equivalent investments and bonds. Any significant shift in asset
allocation by these funds toward the stock market would lift valuations from
their comparatively low levels.
We thank you for your continued interest in The Spain Fund. We look forward to
reporting to you again on market activity and the Fund's investment results in
coming periods.
Sincerely,
Dave H. Williams
Chairman and President
Mark H. Breedon
Vice President and Portfolio Manager
2
TEN LARGEST EQUITY HOLDINGS
MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
COMPANY U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Iberdrola I, S.A. $10,931,445 9.2%
Compania Telefonica Nacional de Espana, S.A. 9,819,116 8.3
Corporacion Financiera Alba, S.A. 7,094,551 6.0
Endesa 6,743,763 5.7
Banco Bilbao Vizcaya 6,720,319 5.7
Banco Intercontinental 4,846,436 4.1
Viscofan Envolturas Celulosicas 4,709,808 4.0
Corporacion Mapfre, S.A. 4,422,184 3.7
Repsol, S.A. 4,416,316 3.7
Electricas Reunidas de Zaragoza, S.A. 4,069,285 3.5
$63,773,223 53.9%
3
PORTFOLIO OF INVESTMENTS
MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS99.2%
UTILITIES35.0%
ELECTRIC & GAS26.7%
Electricas Reunidas de Zaragoza, S.A. 151,562 $ 4,069,285
Endesa (a) 109,000 6,743,763
Gas Natural, S.A. 20,000 3,533,170
Gas y Electricidad, S.A. 32,000 1,743,238
Iberdrola I, S.A. 1,076,362 10,931,445
Sevillana de Electricidad 272,000 2,339,052
Union Electrica Fenosa Sppt500 370,000 2,248,855
------------
31,608,808
TELEPHONE8.3%
Compania Telefonica Nacional de Espana, S.A. 546,200 9,819,116
------------
41,427,924
FINANCIAL SERVICES26.5%
BANKING21.3%
Argentaria Corporacion Bancaria
de Espana, S.A. 75,593 3,170,875
Banco Bilbao Vizcaya (a) (b) 177,500 6,720,319
Banco Central Hispanoamericano, S.A. 100,000 2,011,728
Banco de Andalucia 6,400 871,619
Banco de Castilla 1,500 730,759
Banco de Santander, S.A. 80,928 3,696,967
Banco Intercontinental (a) 47,000 4,846,436
Banco Popular Espanol, S.A. 15,800 2,760,464
Banco Zaragozano, S.A. 25,000 416,354
------------
25,225,521
INSURANCE3.7%
Corporacion Mapfre, S.A. (a) 89,627 4,422,184
REAL ESTATE1.5%
Estacionamientos Subterraneos, S.A. * 82,500 1,117,151
Filo, S.A. 148,058 645,251
------------
1,762,402
------------
31,410,107
CONSUMER STAPLES8.6%
FOOD5.4%
El Aguila, S.A. 175,000 1,026,876
Natra, S.A. 70,134 649,508
Viscofan Envolturas Celulosicas (a) 287,503 4,709,808
------------
6,386,192
TOBACCO3.2%
Tabacalera, S.A. Series A (a) 81,779 3,735,843
------------
10,122,035
MULTI INDUSTRY6.0%
Corporacion Financiera Alba, S.A. 82,500 7,094,551
ENERGY5.5%
Compania Espanola de Petroleros, S.A. 70,200 2,138,837
Repsol, S.A. (a) 128,973 4,416,316
------------
6,555,153
CONSUMER MANUFACTURING4.1%
BUILDING & RELATED2.7%
Portland Valderrivas, S.A. (a) 19,590 1,192,202
Uralita, S.A. 219,650 1,940,152
------------
3,132,354
TRANSPORTATION1.4%
Autopistas Concesionaria Espanola, S.A. 107,000 1,153,300
Autopistas del Mare Nostrum, S.A. 45,000 541,065
------------
1,694,365
------------
4,826,719
CONSUMER SERVICES4.0%
PRINTING & PUBLISHING2.3%
Midesa 141,519 996,717
Unidad Editorial, S.A. Series A (c) 1,511,470 1,678,660
------------
2,675,377
RETAIL1.7%
Centros Comerciales Continente, S.A. 90,500 1,989,646
------------
4,665,023
4
THE SPAIN FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
BASIC INDUSTRIES3.6%
MINING AND METALS3.6%
Acerinox, S.A. 33,816 $ 3,736,967
Asturiana de Zinc, S.A. 65,000 505,850
------------
4,242,817
CAPITAL GOODS2.0%
ENGINEERING & CONSTRUCTION2.0%
Fomento de Construcciones Y Contratas, S.A. 29,158 2,337,242
HEALTHCARE1.9%
Fabrica Espanol de Products Quimicos
Farmaceuticos 30,375 1,430,146
Indo Internacional, S.A. 19,119 587,721
Prim, S.A. 92,026 288,261
------------
2,306,128
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $VALUE
- -------------------------------------------------------------------------
OTHER2.0%
Asesores Bursatiles
Capital Fund N.V. (c) 25 $ 648,025
Capital Fund N.V. II (c) 25 1,728,559
------------
2,376,584
Total Common Stocks and Other Investments
(cost $99,077,183) 117,364,283
TIME DEPOSIT0.8%
Bank of Tokyo - Mitsubishi
5.50%, 6/03/96
(cost $1,000,000) $1,000 1,000,000
TOTAL INVESTMENTS100.0%
(cost $100,077,183) 118,364,283
Other assets less liabilities0.0% 26,450
NET ASSETS100% $118,390,733
* Non-income producing security.
(a) Security, or portion thereof, has been segregated to collateralize a
forward exchange currency contract. Total value of segregated securities
amounted to $33,293,994 at May 31, 1996.
(b) Security represents an investment in an affiliate.
(c) Restricted security, valued at fair value (see Notes A and E).
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $100,077,183) $118,364,283
Foreign cash, at value (cost $2,010,911) 2,001,736
Cash 31,573
Receivable for investment securities sold 1,000,146
Foreign taxes receivable 165,021
Interest receivable and other assets 103,176
Unrealized appreciation of forward exchange currency contract 8,768
Total assets 121,674,703
LIABILITIES
Payable for investment securities purchased 2,694,299
Management fee payable 102,949
Accrued expenses 486,722
Total liabilities 3,283,970
NET ASSETS $118,390,733
COMPOSITION OF NET ASSETS
Capital stock, at par $ 100,267
Additional paid-in capital 106,918,079
Undistributed net investment income 340,052
Accumulated net realized loss on investments and foreign
currency transactions (7,236,677)
Net unrealized appreciation on investments and foreign
currency denominated assets and liabilities 18,269,012
-------------
$118,390,733
NET ASSET VALUE PER SHARE(based on 10,026,746 shares outstanding) $11.81
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $232,727) $1,307,904
Interest 73,956 $1,381,860
EXPENSES
Management fee 581,658
Custodian 141,653
Professional 93,307
Transfer agency 80,885
Printing 49,675
Directors' fees and expenses 36,755
Registration 10,860
Miscellaneous 47,015
Total expenses 1,041,808
Net investment income 340,052
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 597,640
Net realized gain on foreign currency transactions 605,152
Net change in unrealized appreciation of investments 12,298,292
Net change in unrealized appreciation of foreign currency
denominated assets and liabilities (161,072)
Net gain on investments and foreign currency denominated
assets and liabilities 13,340,012
NET INCREASE IN NET ASSETS FROM OPERATIONS $13,680,064
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS THE SPAIN FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31,1996 NOVEMBER 30,
(UNAUDITED) 1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 340,052 $ 897,991
Net realized gain (loss) on investments and
foreign currency transactions 1,202,792 (1,788,684)
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities 12,137,220 6,016,278
Net increase in net assets from operations 13,680,064 5,125,585
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (300,802) -0-
Total increase 13,379,262 5,125,585
NET ASSETS
Beginning of year 105,011,471 99,885,886
End of period(including undistributed net
investment income of $340,052 and $300,802
respectively) $118,390,733 $105,011,471
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Spain Fund, (the "Fund") was incorporated in the state of Maryland on June
30, 1987 as a non-diversified, closed-end management investment company.
The financial statements include the accounts of the Fund and its wholly-owned
subsidiary (Spain Shares Investments Maryland B.V.). The Fund is currently in
the process of dissolving and liquidating its wholly-owned subsidiary. The
following is a summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the day of valuation or at
the last bid price quoted on such day if no such closing price is available. If
there are no quotations available for the day of valuation, the last available
closing price will be used. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Directors. Such securities have a value of $4,055,244 at May 31, 1996.
In determining fair value, consideration is given to cost, operating and other
financial data. Securities which mature in 60 days or less are valued at
amortized cost, which approximates market value, unless this method does not
represent fair value. Foreign security and currency transactions may involve
certain considerations and risks not normally associated with those of domestic
origin as a result of, among others, the possibility of political and economic
instability and the level of government supervision and regulation of foreign
securities markets.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in Spanish pesetas are translated into U.S.
dollars at the mean of the quoted bid and asked price of the peseta 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 gain on foreign currency transactions represents net foreign exchange
gains and losses from holding of foreign currencies, currency gains or losses
realized between the trade and settlement dates on security transactions,
foreign currency forward contracts and the difference between the amounts of
dividends, interest and foreign taxes recorded on the Fund's books and the U.S.
dollar equivalent amounts actually received or paid. Net unrealized 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.
The exchange rate for the Spanish Peseta at May 31, 1996 was 128.497 ESP to
U.S. 1.00.
3. TAXES
It is the Fund's policy to meet the requirements of the U.S. 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 its
shareholders. Therefore, no provisions for federal income or excise taxes are
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the Spanish tax rates.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the fund is
informed of the dividend. Interest income is accrued daily. Security
transactions are accounted for on the date securities are purchased or sold.
Realized and unrealized gains and losses from security and currency
transactions are calculated on the identified cost basis.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with tax regulations, which may differ from generally accepted
accounting principals.
6. SPECIAL CONSIDERATIONS
Investment in the Fund's shares requires consideration of certain factors that
are not typically associated with investments in U.S. equity securities such as
currency fluctuations, potential price volatility, lower liquidity and
concentration of the Spanish equities market and limitations on the
concentration of investment in the equity securities of companies in certain
industry sectors.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE SPAIN FUND
_______________________________________________________________________________
NOTE B: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an Investment Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P., (the "Investment Manager"), a fee, calculated
weekly and paid monthly, at an annualized rate of 1.10% of the Fund's average
weekly net assets up to $50 million, 1.00% of the Fund's average weekly net
assets on the next $50 million, and .90% of the Fund's average weekly net
assets over $100 million.
The Fund and the Investment Manager entered into a Sub-Advisory Agreement with
Privanza Banco Personal, S.A. (the "Sub-Adviser"). Under this agreement the
subadviser received a fee at the annual rate of .25 of 1% of the Fund's average
weekly net assets. All amounts paid to the subadviser are payable by the
Investment Manager from its fee. An officer of the Fund is a director of the
Sub-Adviser.
The Fund entered into a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS") whereby the Fund reimburses AFS for costs relating to
servicing calls for the Fund. The Fund reimbursed AFS $8,419 during the six
months ended May 31, 1996 relating to shareholder servicing costs.
Banco Bilbao Vizcaya, an affiliate of the subadviser, serves as subcustodian of
the Fund. Fees paid to the sub-custodian are payable by the custodian from its
fee. For the six months ended May 31, 1996, the Fund earned $45,262 of interest
income on cash balances maintained at the subcustodian. For the six months
ended May 31, 1996, the Fund received dividend income of $122,560 from common
stock of Banco Bilbao Vizcaya owned by the Fund.
Brokerage commissions paid on securities transactions for the six months ended
May 31, 1996 amounted to $110,190 of which $8,986 was paid to Banco Bilbao
Vizcaya.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. Government obligations) aggregated $22,701,208 and $19,843,421,
respectively, for the six months ended May 31, 1996.
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward 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 contracts and the
closing of such contracts is included in net realized gains or losses on
foreign currency transactions. Fluctuations in the value of forward exchange
currency contracts are recorded for financial reporting purposes as unrealized
gains or losses by the Fund. Risks may arise from the potential inability of
the 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
May 31, 1996, the Fund had an outstanding forward exchange currency contract
with Brown Brothers Harriman & Co to sell 3,169,000,000 Spanish Pesetas
expiring on June 28, 1996, for $24,632,724. The market value of the forward
exchange currency contract at May 31, 1996 was $24,623,956 resulting in an
unrealized appreciation of $8,768.
At May 31, 1996, the cost of securities for federal income tax purposes was
$100,077,183. Accordingly, gross unrealized appreciation of investments was
$27,512,129 and gross unrealized depreciation of investments was $9,225,029
resulting in net unrealized appreciation of $18,287,100 (excluding foreign
currency). At November 30, 1995, the Fund had a total capital loss carryforward
of $8,187,572 of which 6,894,268 expires in the year 2001 and 1,293,304 expires
in the year 2003. No capital gain distribution is expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
10
THE SPAIN FUND
_______________________________________________________________________________
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. At May
31, 1996 10,026,746 shares were outstanding.
NOTE E: RESTRICTED SECURITIES
DATE ACQUIRED SHARES COST
------------- --------- ----------
Asesores Bursatiles Capital Fund, N.V. 10/29/90 25 $1,115,170
Asesores Bursatiles Capital Fund, N.V. II 5/24/94 25 1,772,724
Unidad Editorial S.A. Series A 12/12/89 462,750 513,710
Unidad Editorial S.A. Series A 9/30/92 1,048,720 1,330,964
The securities shown above are restricted as to sale and have been valued at
fair value in accordance with the policy described in Note A.
The value of these securities at May 31, 1996 was $4,055,244, representing 3.4%
of net assets.
11
FINANCIAL HIGHLIGHTS THE SPAIN FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
------------------------------------------------------------------------------
ENDED
MAY 31, YEAR ENDED NOVEMBER 30,
1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.47 $9.96 $9.49 $8.28 $11.65 $12.26
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03 .09 .05 .10 .16 .15
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.34 .42 .88 1.29 (3.16) .53
Net increase (decrease) in net asset
value from operations 1.37 .51 .93 1.39 (3.00) .68
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.03) -0- (.10) (.17) (.15) (.14)
Distributions in excess of net
investment income -0- -0- (.05) -0- -0- -0-
Distributions from net realized gain
on investments and foreign
currency transactions -0- -0- (.31) (.01) (.22) (1.15)
Total dividends and distributions (.03) -0- (.46) (.18) (.37) (1.29)
Net asset value, end of period $11.81 $10.47 $9.96 $9.49 $8.28 $11.65
Market value, end of period $9.625 $8.625 $9.125 $9.625 $8.375 $13.25
TOTAL RETURN(A)
Total investment return based on:
Market value 11.94% (5.48)% (1.29)% 17.31% (34.82)% 17.62%
Net asset value 13.15% 5.12% 9.28% 16.99% (26.71)% 6.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $118,391 $105,011 $99,886 $95,058 $82,920 $116,665
Ratio of expenses to average net assets 1.85% 2.07% 2.09% 2.24% 2.34% 1.98%
Ratio of net investment income to
average net assets .61%(c) .89% .53% 1.10% 1.50% 1.33%
Portfolio turnover rate 36%(c) 38% 22% 65% 43% 35%
Average commission rate paid (b) $.0540 $-0- $-0- $-0- $-0- $-0-
</TABLE>
(a) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each year reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such years. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount or
an increase in the premium of the market value to the net asset value from the
beginning to the end of such years.
(b) 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.
(c) Annualized.
12
THE SPAIN FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
DAVE H. WILLIAMS, CHAIRMAN AND PRESIDENT
ANGEL CORCOSTEGUI
H.R.H. PILAR DE BORBON Y BORBON
INMACULADA DE HABSBURGO-LORENA
ENRIQUE L. FEVRE
IGNACIO GOMEZ-ACEBO
DR. JAMES M. HESTER
JOSE LUIS FEITO HIGUERUELA
MARILYN PERRY
FRANCISCO GOMEZ ROLDAN
JUAN MANUEL SAINZ DE VICUNA
REBA W. WILLIAMS
CARLOS DELCLAUX ZULUETA
OFFICERS
NORMAN S. BERGEL, VICE PRESIDENT
MARK H. BREEDON, VICE PRESIDENT
NICHOLAS CROSSLAND, VICE PRESIDENT
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
EDMUND P. BERGAN, JR., SECRETARY
JOSEPH J. MANTINEO, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE, LLP
1177 Avenue of the Americas
New York, NY 10036-2798
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
The financial information included herein is taken from the records of the Fund
without audit by independent accountants who do not express an opinion thereon.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report, including the financial statement herein is transmitted to the
shareholders of The Spain Fund, Inc. for their information. This is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any security mentioned in this report.
13
THE SPAIN FUND, INC.
Summary of General Information
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek long-term capital appreciation
through investment primarily in the equity securities of Spanish companies.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
SpainFd. The Fund's NYSEtrading symbol is "SNF". Weekly comparative net asset
value (NAV) and market price information about the Fund is published each
Monday in THE WALL STREET JOURNAL and each Sunday in THE NEW YORK TIMES and
BARRON'S, and other newspapers in a table called "Closed End Funds". Additional
information about the fund is available by calling 1-800-221-5672.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
A Dividend Reinvestment Plan is available to shareholders in the Fund, which
provides automatic reinvestment of dividends and capital gain distributions in
additional Fund shares. The Plan also allows you to make optional cash
investments in Fund shares through the Plan Agent. A brochure describing the
Plan is available from the Plan Agent, State Street Bank and Trust Company, by
calling 1-800-219-4218.
If you wish to participate in the Plan and your shares are held in your name,
simply complete and mail the enrollment form in the brochure. If your shares
are held in the name of your brokerage firm, bank or other nominee, you should
ask them whether or how you can participate in the Plan.
THE SPAIN FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
SPNSR
