ACM GOVERNMENT OPPORTUNITY FUND
SEMI-ANNUAL REPORT
JANUARY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
February 28, 1997
Dear Shareholder:
ACM Government Opportunity Fund's primary investment objective is to provide
high current income, and its secondary objective is growth of capital. The Fund
invests at least 65% of its total assets in U.S. Government and agency
securities and has the flexibility to invest the remaining 35% in selected
foreign government securities and dividend paying equity securities. No more
than 20% of its total assets may be invested in equity securities.
INVESTMENT RESULTS
For the twelve months ended January 31, 1997, ACM Government Opportunity Fund
achieved a total return of 5.39% on a net asset value basis. From the initial
public offering in August of 1988 through January 31, 1997, the Fund has
provided shareholders with an average annual total return of 10.63% on a net
asset value basis.
ECONOMIC REVIEW
The U.S. economy finished 1996 on a strong note. After moderating in the third
quarter, the economy picked up speed in the fourth quarter, led by a rebound in
consumer spending. The annualized gain in retail sales of merchandise jumped to
4.8% in the fourth quarter, up from only 0.9% in the third quarter. Preliminary
indications of strong export growth also added to year-end Gross Domestic
Product (GDP) growth. The production side of the economy showed strength, too.
Industrial production grew at an annualized pace of 6% and payroll growth
increased to 217,000 per month, up from third quarter's average of 171,000 per
month. In all, growth in aggregate output (GDP), which dipped to 2.1% in the
third quarter, accelerated to 4.7% during the final three months of 1996.
Broad inflation measures were slightly higher at the end of 1996 as consumer
prices increased 3.3% year-over-year and producer prices were up 2.8%. However,
excluding the volatile food and energy sectors, inflation remained very
well-behaved with year-over-year consumer and producer prices up only 2.6% and
0.6%, respectively.
MARKET REVIEW
Subsequent to our last report to you in July 1996, the U.S. bond market has
posted solid gains. The market rallied during the second half of the year,
pushing 1996 year-to-date returns into positive territory for the first time
since January. Data released during the period eased investors' concerns about
accelerating economic growth and interest rates on all maturities fell.
However, ongoing concerns about inflation kept bond yields trading in a narrow
range and held price gains down. Mortgage-backed securities and corporate bonds
were the best performing sectors as increased investor demand for
yield-oriented securities drove up prices on these bonds.
Outside the U.S., developed foreign bond markets and emerging market debt
continued to post gains. Throughout most of Europe, tight fiscal policies and
falling interest rates supported higher bond prices, as these countries move to
meet the requirements of monetary union. In emerging markets, the continued
success of economic reforms in a worldwide environment of moderate growth and
low inflation has led to improving current account deficits, growing investor
confidence and lower inflation, all factors which supported higher bond prices
in these markets over the past six months.
Fueled by strong earnings and declines in interest rates, the U.S. equity
markets continued their heady climb in 1996 with the S&P 500 Stock Index rising
22.95%. Since the beginning of 1995, the index is up 69%. Growth stocks,
generally driven by investor cash flow and earnings momentum, led the market.
Value stocks, whose performance is based more on low valuation to earnings,
lagged.
As we mentioned in our last report, high equity valuations and correspondingly
low dividend levels have made bond markets, particularly foreign bond markets,
relatively more attractive for an income-oriented fund such as this one. As a
result, during this reporting period, we eliminated the Fund's equity exposure.
INVESTMENT OUTLOOK
Our outlook for the U.S. economy assumes that while economic growth accelerated
at the end of 1996, it will moderate again by the middle of 1997. As this
occurs, current upward pressures on inflation should dissipate. Until clear
signs of a slowing economy emerge, concerns about inflation will keep U.S.
interest rates trading near the upper end of their recent ranges. Federal
Reserve interest rate policy has been on hold since January of
1
ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
1996, however, recently released data has pushed the Fed closer to a preemptive
tightening. Given justified concerns about the economic outlook and the
potential for an interest rate hike, further near-term weakness in bond prices
and higher bond yields cannot be ruled out. However, such developments would
only contribute to the economic slowing we see later in 1997.
Overall, we think the non-dollar bond markets will continue to outperform the
U.S. Treasury market into 1997. Continued tight fiscal policy in Europe, Canada
and Australia should support higher bond prices in these markets in the
upcoming year. We continue to have a favorable outlook for emerging market
debt. However, as risk premiums for this asset class have narrowed from their
highs at the end of 1994, we expect the pace of price appreciation of these
securities to slow. We will continue to monitor this sector for tactical
opportunities to add to the portfolio during the upcoming year.
Thank you for your continued interest and investment in ACM Government
Opportunity Fund. We look forward to reporting its progress to you in the
coming months.
Sincerely,
John D. Carifa
Chairman and President
Wayne D. Lyski
Senior Vice President
2
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED) ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS-90.5%
U.S. TREASURY SECURITIES-82.9%
U.S. Treasury Bonds
8.125%, 8/15/19 (a) US$ 6,000 $ 6,843,750
10.75%, 8/15/05 (a) 4,000 5,092,500
12.75%, 11/15/10 (a) 3,250 4,566,250
14.00%, 11/15/11 (a) 7,500 11,439,839
U.S. Treasury Notes
6.25%, 10/31/01 (a) 19,500 19,487,812
6.50%, 8/15/05 (a) 13,200 13,212,367
7.00%, 7/15/06 9,000 9,303,750
8.875%, 11/15/97 (a) 4,000 4,100,000
8.875%, 2/15/99 (a) 5,000 5,278,125
U.S. Treasury Strip
Zero coupon, 2/15/15 40,000 11,526,880
Total U.S. Treasury Securities 90,851,273
MORTGAGERELATED SECURITY-4.7%
Government National Mortgage Association
8.00%, 12/01/26 TBA 5,000 5,115,625
FEDERAL AGENCY SECURITY-2.9%
Student Loan Marketing Association
15.00%, 9/23/97 3,000 3,173,700
Total U.S. Government and Agency
Obligations
(cost $99,672,074) 99,140,598
SOVEREIGNDEBTOBLIGATIONS-16.1%
AUSTRALIA-9.1%
Commonwealth of Australia
7.50%, 9/15/09 AU$ 9,500 7,218,518
12.00%, 11/15/01 3,000 2,757,730
Total Australian Securities 9,976,248
CANADA-7.0%
Canadian Government
7.50%, 12/01/03 CA$ 3,000 2,394,525
8.00%, 6/01/27 6,500 5,259,549
Total Canadian Securities 7,654,074
Total Sovereign Debt Obligations
(cost $17,449,366) 17,630,322
TIME DEPOSITS-6.6%
Bank of New York 5.125%, 2/03/97
(cost $7,195,000) US$ 7,195 7,195,000
TOTAL INVESTMENTS-113.2%
(cost $124,316,440) 123,965,920
Other assets less liabilities-(13.2%) (14,461,083)
NET ASSETS-100% $109,504,837
(a) Securities or portion thereof, with an aggregate market value of
$53,687,233, have been segregated to collateralize forward exchange currency
contracts and the TBA security.
Glossary:
TBA - To be announced.
See notes to financial statements.
3
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED) ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $124,316,440) $123,965,920
Cash, at value (cost $7,414,108) 7,302,766
Receivable for investment securities sold 6,761,000
Interest receivable 2,419,185
Unrealized appreciation of forward exchange currency contracts 529,350
Other assets 4,932
Total assets 140,983,153
LIABILITIES
Payable for investment securities purchased 31,236,568
Advisory fee payable 68,170
Administration fee payable 13,634
Accrued expenses and other liabilities 159,944
Total liabilities 31,478,316
NET ASSETS $109,504,837
COMPOSITION OF NET ASSETS
Capital stock, at par $ 130,719
Additional paid-in capital 112,861,429
Undistributed net investment income 268,239
Accumulated net realized loss (3,991,557)
Net unrealized appreciation on investments and foreign
currency denominated assets and liabilities 236,007
$109,504,837
NET ASSET VALUE PER SHARE (based on 13,071,872 shares outstanding) $8.38
See notes to financial statements.
4
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1997(UNAUDITED) ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $4,416,945
Dividends 76,590 $4,493,535
EXPENSES
Advisory fee 407,871
Administrative fee 81,574
Custodian 46,016
Transfer agency 43,947
Audit and legal 35,600
Printing 15,710
Directors' fees 15,000
Registration fee 13,474
Miscellaneous 16,216
Total expenses 675,408
Net investment income 3,818,127
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 8,796,707
Net realized gain on foreign currency transactions 54,051
Net change in unrealized appreciation (depreciation) of:
Investments (4,639,409)
Foreign currency denominated assets and liabilities 654,448
Net gain on investments and foreign currency transactions 4,865,797
NET INCREASE IN NET ASSETS FROM OPERATIONS $8,683,924
See notes to financial statements.
5
STATEMENTS OF CHANGES IN NET ASSETS ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1997 JULY 31,
(UNAUDITED) 1996
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 3,818,127 $ 6,881,350
Net realized gain on investments, options
written and foreign currency transactions 8,850,758 1,553,134
Net change in unrealized appreciation of
investments, options written and foreign
currency denominated assets and liabilities (3,984,961) 168,301
Net increase in net assets from operations 8,683,924 8,602,785
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (3,725,486) (7,290,617)
Tax return of capital distribution -0- (323,758)
Total increase 4,958,438 988,410
NET ASSETS
Beginning of year 104,546,399 103,557,989
End of period (including undistributed net
investment income of $268,239 at January 31,
1997 and $175,598 at July 31, 1996,
respectively) $109,504,837 $104,546,399
See notes to financial statements.
6
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 (UNAUDITED) ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
ACM Government Opportunity Fund (the "Fund") is registered under the Investment
Company Act of 1940, as a non-diversified closed-end management investment
company. 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 sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recently quoted bid and asked price
provided by the principle market makers. The U.S. dollar value of forward
exchange currency contracts is determined using forward currency exchange rates
supplied by a quotation service. Options are valued at market value or fair
value using methods determined by the Board of Directors. Securities for which
market quotations are not readily available and illiquid securities which are
subject to limitations as to their resale are valued in good faith, at fair
value, using methods determined by the Board of Directors. Readily marketable
fixed-income securities may be valued on the basis of prices provided by a
pricing service when such prices are believed by Alliance Capital Management
L.P. (the "Adviser") to reflect the fair value of such securities. 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.
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 provision for federal income or excise taxes are
required. Foreign taxes have been provided for on interest income earned on
foreign investments in accordance with the applicable country's tax rates and
to the extent unrecoverable are recorded as a reduction of investment income.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Dividend income is recorded on the
ex-dividend date. Investment transactions are accounted for on a trade date
basis. Investment gains and losses are determined on the identified cost basis.
The Fund accretes discounts as adjustments to interest income.
4. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rate of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain on foreign currency transactions represents foreign exchange
gains and losses from sales and maturities of foreign investments, closed
forward exchange currency contracts, holdings of foreign currencies, exchange
gains and losses realized between the trade and settlement dates on foreign
investment transactions and the difference between the amounts of interest and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net currency gains and
losses from valuing foreign currency denominated assets and liabilities at year
end exchange rates are reflected as a component of net unrealized appreciation
on investments and foreign currency denominated assets and liabilities.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
7
NOTES TO FINANCIAL STATEMENTS (CONT.) ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
NOTE B: ADVISORY, ADMINISTRATIVE FEES AND OTHER AFFILIATED TRANSACTIONS
Under the terms of an Investment Advisory Agreement, the Fund pays its Adviser
a fee at an annualized rate of .75 of 1% of the Fund's average weekly net
assets.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc., ("AFS"), an affiliate of the Adviser, the Fund reimburses AFS
for costs related to servicing phone inquiries for the Fund. The Fund
reimbursed AFS $2,525 during the six months ended January 31, 1997.
Under the terms of an Administrative Agreement, the Fund pays Alliance Capital
Management L.P., a monthly fee equal to the annualized rate of .15 of 1% of the
Fund's average weekly net assets.
Brokerage commissions paid for the six months ended January 31, 1997 on
securities transactions amounted to $26,368 none of which was paid to
affiliated brokers.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $78,553,779 and $99,873,749,
respectively, for the six months ended January 31, 1997. There were purchases
of $177,390,548 and sales of $166,786,838 of U.S. government and government
agency obligations for the six months ended January 31, 1997.
At January 31, 1997, the cost of investments for federal income tax purposes
was $124,316,440. Accordingly, gross unrealized appreciation of investments was
$373,464 and gross unrealized depreciation of investments was $723,984
resulting in net unrealized depreciation of $350,520 (excluding foreign
currency). For federal income tax purposes, the Fund had a capital loss
carryforward at July 31, 1996 of $9,780,458 which $6,024,225 will expire in
2003 and $3,756,233 will expire in 2004.
1. FORWARD EXCHANGE CURRENCY CONTRACTS
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 and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. 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
contract and the closing of such contract is included in net realized gain or
loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized gains or losses by the
Fund.
The Fund's custodian will place and maintain liquid asset in a separate account
of the Fund having a value at least equal to the aggregate amount of the Fund's
commitments under forward exchange currency contracts entered into with respect
to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of foreign
currencies relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
8
ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
At January 31, 1997, the Fund had outstanding forward exchange currency
contracts as follows:
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
-------- ----------- ----------- --------------
FOREIGN CURRENCY BUY CONTRACTS
Australian Dollars,
expiring 2/3/97-3/31/97 18,001 $13,881,273 $13,726,888 $(154,385)
Canadian Dollars,
expiring 2/7/97-2/28/97 5,300 3,952,854 3,935,032 (17,822)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollars,
expiring 2/3/97-3/31/97 29,084 22,808,024 22,168,866 639,158
Canadian Dollars,
expiring 2/7/97-2/28/97 12,100 9,061,416 8,999,017 62,399
----------
$ 529,350
2. OPTIONS TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on foreign currencies that are traded on U.S. and foreign securities
exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less that the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
currency in determining whether the Fund has a realized a gain or loss. If a
put option is exercised, the premium reduces the cost basis of the currency
purchased by the Fund. In writing an option, the Fund bears the market risk of
an unfavorable change in the price of the currency underlying the written
option. Exercise of an option written by the Fund could result in the Fund
selling or buying a currency at a price different from the current market value.
There were no transactions in options written for the six months ended January
31, 1997.
NOTE D: CAPITAL STOCK
There are 300,000,000 shares of $.01 par value common stock authorized, of
which 13,071,872 shares were outstanding at January 31, 1997. During the six
months ended January 31, 1997 and the year ended July 31, 1996, the Fund did
not issue shares in connection with the dividend reinvestment plan.
9
FINANCIAL HIGHLIGHTS ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
-----------------------------------------------------------------------------
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1997 --------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.00 $7.92 $8.12 $9.92 $9.66 $9.02
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29 .53 .59 .68 .79 .69
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .38 .13 -0- (.89) .68 .89
Net increase (decrease) in net asset
value from operations .67 .66 .59 (.21) 1.47 1.58
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.56) (.48) (.68) (.80) (.90)
Distributions from net realized gains -0- -0- -0- (.61) (.41) (.04)
Tax return of capital distribution -0- (.02) (.31) (.30) -0- -0-
Total dividends and distributions (.29) (.58) (.79) (1.59) (1.21) (.94)
Net asset value, end of period $8.38 $8.00 $7.92 $8.12 $9.92 $9.66
Market value, end of period $7.375 $7.00 $7.50 $8.125 $9.875 $9.75
TOTAL RETURN
Total investment return based on:
Market value (a) 9.59% 1.08% 2.85% (2.66)% 14.94% 14.84%
Net asset value (a) 8.45% 9.40% 8.67% (3.16)% 16.30% 18.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $109,505 $104,546 $103,558 $105,830 $122,500 $115,831
Ratio of expenses to average net assets 1.22%(b) 1.28% 1.18% 1.20% 1.19% 1.22%
Ratio of net investment income to
average net assets 6.89%(b) 6.42% 7.62% 7.50% 8.27% 7.31%
Portfolio turnover rate 218% 375% 228% 297% 588% 505%
Average commission rate paid (c) $.0500 -- -- -- -- --
</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 period 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 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 periods. Conversely, total investment return based on the 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) Annualized.
(c) 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.
10
ACM GOVERNMENT OPPORTUNITY FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JAMES R. GREENE (1)
DR. JAMES M. HESTER (1)
HON. JAMES D. HODGSON (1)
CLIFFORD L. MICHEL (1)
ROBERT C. WHITE (1)
DONALD J. ROBINSON (1)
OFFICERS
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
BRUCE W. CALVERT, SENIOR VICE PRESIDENT
THOMAS PERKINS, SENIOR VICE PRESIDENT
PAUL J. DENOON, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
DANIEL J. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 Avenue of the Americas
New York, NY 10105
DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR
FIRST DATA INVESTOR SERVICES GROUP, INC.
(formerly The Shareholder Services Group, Inc.)
53 State Street
Boston, MA 02109
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
CUSTODIAN
BANK OF NEW YORK
48 Wall Street
New York, New York 10286
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
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 statements herein, is transmitted to
the shareholders of ACM Government Opportunity Fund for their information. The
financial information included herein is taken from the records of the Fund.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report.
11
ACM GOVERNMENT OPPORTUNITY FUND
Summary of General Information
THE FUND
ACM Government Opportunity Fund is a closed-end investment company whose shares
trade on the New York Stock Exchange. The Fund seeks to provide high current
income. Its secondary objective is capital appreciation. The Fund invests
principally in U.S. Government obligations. The Fund also has the flexibility
to invest its assets in securities of selected foreign governments (maximum
35%) and equity securities (maximum 20%). Additionally, the Fund may use
certain other investment techniques, including options and futures contracts.
The investment advisor of the Fund is Alliance Capital Management L.P.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction Section of newspapers each day, under the
designation "ACM OppFd". The Fund's NYSE trading symbol is "AOF". Weekly
comparative net asset value (NAV) and market price information about the Fund
is published each Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW
YORK TIMES and each Saturday in BARRON'S and other newspapers in a table called
"Closed-End Bond Funds." Additional information about the Fund is available by
calling 1-800-221-5672.
DIVIDEND REINVESTMENT PLAN
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains in additional Fund Shares. For a copy of the Plan Brochure,
please write to the Plan Agent, First Data Investor Services Group, Inc., P.O.
Box 1376, Boston, MA 02104.
ACM GOVERNMENT OPPORTUNITY FUND
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
OPPSR
