<PAGE>
LETTER TO SHAREHOLDERS ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
January 5, 1995
Dear Shareholder:
At the regular meeting of the Board of Directors of ACM Managed Multi-Market
Trust, held on December 7, 1994, the Board approved acquisition of your
Fund's assets by Alliance Multi-Market Strategy Trust, an open-end investment
company with substantially similar investment objectives and policies.
As stated in your Fund's 1990 prospectus, the Fund's Articles of Incorporation
require that the Board submit a proposal to stockholders to convert the Fund to
an open-end investment company at its 1995 Annual Meeting of Stockholders.
Alliance Multi-Market Strategy Trust has a substantially lower expense ratio
than would the Fund itself if it were converted to an open-end fund and, after
considering a number of other factors, the Board concluded that it would be in
the best interest of the Fund and its stockholders if the Fund's assets were
acquired by Strategy Trust. If approved by the stockholders at the Fund's
special meeting to be held during the first quarter of 1995, the transaction
would occur shortly thereafter. Under the terms of the transaction, the Fund
would transfer its portfolio of investments to Strategy Trust in exchange for
Class A common stock of Strategy Trust, which would be distributed to the
stockholders of the Fund on a relative net asset value basis without the
imposition of a sales charge. Following the acquisition, the Fund's shares would
no longer be listed on the New York Stock Exchange.
MARKET ENVIRONMENT
Since we last reported to you in May, continued tightening in U.S. monetary
policy by the Federal Reserve and political and economic events in dollar
bloc countries such as Canada and Mexico have triggered declining bond prices
with high price volatility in these markets. Stricter U.S. monetary policy
placed downward pressure on domestic and international bond prices for most
of the year. Adding to this price pressure is the Mexican government's recent
decision to abandon its currency trading band and float the peso. This
unexpected action led to significant price declines for all Mexican debt
obligations. While this dramatic shift in Mexican economic policy may prove
beneficial to the long-term performance of the economy, it negatively
impacted the net asset value of your Fund.
U.S. ECONOMIC AND INTEREST RATE ENVIRONMENT
Early last year, the Federal Reserve shifted monetary policy to reflect its
view that inflation had become a serious concern. Through the end of
November, the Federal Reserve raised short-term interest rates six times in
an attempt to slow U.S. economic expansion and quell inflationary pressures.
During the twelve-month period ended November 30, two-year U.S. Treasury
yields rose from 4.22% to 7.40%, a 3.18% increase, and thirty-year U.S.
Treasury yields rose from 6.30% to 8.00%, a 1.70% increase. However, over the
past six months, we have seen some moderation in interest rate volatility.
ECONOMIC CRISIS IN MEXICO
The Mexican government's decision to float the peso has resulted in a 30%
devaluation of its currency versus the U.S. dollar. This decline, which was
in addition to the 10.5% devaluation that had occurred over the previous 11
months, led to the collapse of the government's economic strategy, which was
established by former President Salinas. The Mexican government floated the
peso in hopes of improving the trade deficit, lowering interest rates and
halting the depletion of its currency reserves. However, in taking such
action, the government has raised the likelihood of higher inflation and
lower growth in 1995, and has severely shaken investor confidence in their
economic programs.
1
<PAGE>
ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
President Ernesto Zedillo Ponce de Leon's economic rescue plan includes
defending the peso with the use of an international aid package, cutting
government spending, limiting wage increases and privatizing several
state-owned facilities. To be successful, the government's plan must maintain
the price advantages that come with a substantial currency devaluation,
without setting off inflation. Results from the program may begin to appear
in the second half of the year.
The Mexican crisis has also compounded the weakness of the Canadian dollar,
which has been weighed down by the country's budget deficits and uncertainty
over Quebec's status. As the peso stabilizes, the Canadian dollar should
strengthen and more closely reflect the country's economic strength. Canada
enjoyed rapid economic growth and very low inflation in 1994 and we forecast
further growth with minimal price pressure in 1995.
INVESTMENT OUTLOOK
We are forecasting a healthy but less robust U.S. economy in 1995. Our
estimate for annual GDP growth is 2.5%, with inflation, as measured by the
Consumer Price Index, to crest at 4.0% during the second half of 1995. The
Federal Reserve has repeatedly shown its willingness to raise short-term
interest rates to combat inflationary pressures and expectations. The firming
of monetary policy has been followed despite indications that U.S. economic
growth is moderating from its rapid pace in 1994. The Federal Reserve's
objective is to bring the rate of economic expansion down to non-inflationary
levels, generally estimated to be GDP growth of less than 2.5%. Slower growth
and a strong anti-inflationary posture by the Federal Reserve should brighten
the 1995 outlook for the U.S. bond markets.
Despite recent events in Mexico, our long-term outlook indicates the
continuation of export-led economic growth. Economic fundamentals remain
strong and the long-term impact of the North American Free Trade Agreement
should continue to boost economic activity and increase regional trade.
INVESTMENT RESULTS
For the twelve months ended November 30, 1994, ACM Managed Multi-Market Trust
had a total return of -0.82% based on the net asset value. Over the same
period, the Lehman Brothers 1-3 Year U.S. Government Bond Index returned
0.72%. Since we last reported, your Fund paid dividends totaling $.72 per
share, and on November 30 had a current yield of 8.73% based on the market
price of $8.25 and the current monthly dividend distribution rate of $.06 per
share.
Following is a discussion with Douglas Peebles, your Fund's portfolio
manager. He details the Fund's strategy and the market activity that affected
performance over the period. We appreciate your investment in ACM Managed
Multi-Market Trust and look forward to reporting its progress to you in the
coming months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
2
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
DOUGLAS J. PEEBLES, VICE PRESIDENT ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
Q.: WITH THE WELL PUBLICIZED SELL-OFF IN GLOBAL BOND MARKETS OVER THE LAST
YEAR, MANY FIXED-INCOME FUNDS SUFFERED DECLINES DURING THE TWELVE-MONTH
PERIOD ENDED NOVEMBER 30, 1994. HOW DID ACM MANAGED MULTI-MARKET TRUST FARE
IN THIS ENVIRONMENT?
MR. PEEBLES: The Fund was negatively impacted by 1994's bond market
volatility -- more so than the average for short-term global bond funds. The
Fund's extended average weighted maturity, typically longer than the group
average, resulted in sharper price declines for some of its securities. The
Fund's maximum maturity is five years, although we have kept the average
relatively shorter in recent quarters because of rising U.S. short-term
interest rates. On November 30, the portfolio's average maturity was
approximately 12 1/2 months.
Q: WHY IS THE FUND'S CURRENT EXPOSURE TO EUROPEAN FIXED-INCOME SECURITIES
SMALLER THAN IN PREVIOUS QUARTERS?
MR. PEEBLES: The growth rates of the European economies have been a great
deal stronger than market consensus forecasts at the start of 1994. Total
year-over-year gross domestic product, or GDP, growth rates for 1994 are
likely to be 2.0 - 2.5% in Germany, France and Italy; 3.5 - 4.0% in the
United Kingdom, and 4.5 - 5.0% in Denmark. These rates are considerably
higher the projected early in the year.
Q.: IF GROWTH IN EUROPE IS SO STRONG, IS IT BENEFICIAL TO BE INVESTED IN ANY
EUROPEAN SECURITIES?
MR. PEEBLES: Growth rates in Europe have been buoyed by exports sectors of
the respective economies. A healthy U.S. economy and booming economies in the
newly industrialized countries of Asia have provided a healthy market for
European exports. The domestic sectors of the European economies, however,
have not kept pace. Stubbornly high unemployment rates combined with
continued fiscal tightening (less government spending and higher tax rates)
have combined to keep the consumer on the sidelines. We believe the markets
are pricing in interest rate increases in the near future that are too great
for the upcoming domestic economic environment.
Q.: WITH ALL THIS TALK OF STRONG ECONOMIC GROWTH, ARE THERE WAYS THAT THE
PORTFOLIO CAN BENEFIT FROM THIS GLOBAL ECONOMIC UPTURN?
MR. PEEBLES: Yes. Strong global growth usually means strong demand for
commodities and natural resources. This is especially true given that the
emerging market economies - the strongest growth region of the world - tend
to be inefficient and thus big users of commodities. To take advantage of
this we have positioned the portfolio long the currencies of New Zealand and
Canada, which are large exporters of commodities. Canada and New Zealand are
both experiencing stronger growth than the United States while maintaining
substantially higher real interest rates, which should also help these
currencies.
Q: IS IT TRUE THAT THE FUND'S INVESTMENT STYLE FOR U.S. DOLLAR BLOC
CURRENCIES IS SIMILAR TO THE STYLE PREVIOUSLY APPLIED TO THE EUROPEAN BLOC IN
THE FUND'S EARLIER YEARS?
MR. PEEBLES: Yes, it is quite similar. The objective is to invest in currency
positions when the relative interest rate differentials will more than
compensate for the expected exchange rate movement.
Q: IN THE FUTURE, IS IT POSSIBLE THAT THE FUND WILL INVEST MORE IN EUROPEAN
CROSS CURRENCY-HEDGED ASSETS?
MR. PEEBLES: Yes, this is quite possible. Given the continued search for
European Monetary Union and economic convergence within Europe, it is easy to
foresee this as an attractive investment environment once again. Also, the
German unification, while still being smoothed out, is no longer driving the
German economy in a different direction from the rest of its European
neighbors.
Q: IN LIGHT OF RECENT EVENTS IN MEXICAN FINANCIAL MARKETS, WHAT IS YOUR
OUTLOOK FOR THE MEXICAN PESO?
MR. PEEBLES: Exposure to the Mexican peso hurt performance when the peso
weakened against the dollar during 1994, but as stated in the Chairman's
letter, we are hopeful that by mid-1995 we will see signs of success for the
new economic plan. We will continue to assess the new administration's
credibility, and to closely monitor the moves of the government and the
Mexican Central Bank during 1995.
3
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1994 ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CANADA -- 2.2%
DEBT OBLIGATION -- 1.2%
Abbey National, Plc.
7.50%, 7/16/98....................... CA$ 1,500* $ 1,034,381
-----------
GOVERNMENT OBLIGATION -- 1.0%
Government of Canada
Zero coupon, 6/29/95................. 1,300* 910,166
-----------
Total Canadian Securities
(cost $2,054,662).................... 1,944,547
-----------
FINLAND -- 4.3%
DEBT OBLIGATION -- 4.3%
Finnish Export Credit
Global Bond
6.00%, 1/15/99
(cost $3,644,951).................... FIM 21,000* 3,780,074
-----------
GERMANY -- 3.5%
DEBT OBLIGATION -- 3.5%
Westdeutsche Landesbank
5.75%, 6/01/98
(cost $2,981,443).................... DEM 5,000* 3,056,237
-----------
ITALY -- 1.4%
DEBT OBLIGATION -- 1.4%
Deutsche Bank
11.75%, 2/23/98
(cost $1,391,811).................... LIRA 2,000,000* 1,264,666
-----------
JAPAN -- 5.9%
GOVERNMENT OBLIGATION -- 5.9%
Government of Japan
5.00%, 9/21/98
(cost $5,286,100).................... JPY 500,000* 5,262,652
-----------
MEXICO -- 17.9%
GOVERNMENT OBLIGATION -- 11.0%
Mexican Treasury Bills
Zero coupon, 1/05/95................. MXP 10,570* 3,035,393
Zero coupon, 2/23/95................. 4,000* 1,126,547
Zero coupon, 3/02/95................. MXP 10,756* 3,021,381
Zero coupon, 11/09/95................ 10,000* 2,557,740
-----------
9,741,061
-----------
DEBT OBLIGATION -- 6.9%
Mexican Nafinsa Pagare
Zero coupon, 12/22/94................ 21,436* 6,143,868
-----------
Total Mexican Securities
(cost $16,719,458)................... 15,884,929
-----------
NEW ZEALAND -- 4.2%
GOVERNMENT OBLIGATION -- 4.2%
Government of
New Zealand
8.00%, 11/15/95
(cost $3,609,339).................... NZ$ 6,000* 3,714,953
-----------
UNITED KINGDOM -- 2.5%
GOVERNMENT OBLIGATION -- 2.5%
United Kingdom Treasury
Loans
8.75%, 9/01/97
(cost $2,187,950).................... GBP 1,400* 2,228,682
-----------
UNITED STATES -- 60.7%
DEBT OBLIGATIONS -- 19.5%
Mexican Tesobonos
Zero coupon, 5/04/95................. US$ 4,144* 4,001,861
Zero coupon, 10/26/95................ 4,600* 4,252,700
Mexus Co., Ltd.
Peso Linked
Medium Term Secured
Notes 7.4375%,
12/16/94(a)............................ 8,000* 8,000,000
PLUS Capital Co., Ltd. II
Peso Linked U.S. Dollar
Secured Notes
5.625%, 12/07/94(a).................... 1,000* 1,000,000
-----------
17,254,561
-----------
TIME DEPOSIT -- 19.4%
Westdeutsche Landesbank
5.6875%, 12/01/94.................... 17,200 17,200,000
-----------
</TABLE>
4
<PAGE>
ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 14.4%
Bayerische Landesbank
Peso Linked
Zero coupon,
4/12/95.............................. US$ 4,000* $ 3,879,600
Deutsche Bank
Peso Linked
8.8125%, 6/01/95..................... 4,000* 4,000,000
Morgan Guaranty
Trust Co.
Nassau Peso Linked
Zero coupon, 1/19/95*........... 5,000 4,946,500
-----------
12,826,100
-----------
GOVERNMENT OBLIGATION -- 2.9%
U.S. Treasury Note
7.375%, 11/15/97..................... 2,600* 2,582,060
-----------
COMMERCIAL PAPER -- 4.5%
Bankers Trust Co.
Peso Linked
Zero coupon,
12/01/94............................. US$ 4,000* 3,999,200
-----------
Total United States Securities
(cost $53,904,046)................... 53,861,921
-----------
TOTAL INVESTMENTS -- 102.6%
(cost $91,779,760)................... 90,998,661
Other assets less liabilities -- (2.6%) (2,333,885)
-----------
NET ASSETS -- 100% $88,664,776
===========
</TABLE>
- --------------------------------------------------------------------------------
* Securities segregated to collateralize forward exchange contracts with an
aggregate market value of approximately $73,800,000.
(a) Securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
November 30, 1994 these securities amounted to $9,000,000 or 10.2% of net
assets.
See notes to financial statements.
5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1994 ACM MANAGED MULTI-MARKET TRUST, INC.
<TABLE>
- -----------------------------------------------------------------------------------------------
- ------------------------
<S>
<C>
ASSETS
Investment in securities, at value (cost
$91,779,760).................................................. $90,998,661
Cash...........................................................................................
........ 62,368
Interest
receivable....................................................................................
1,005,367
Net unrealized appreciation of forward exchange currency
contracts..................................... 946,542
Deferred organization
expense.......................................................................... 2,397
-----------
Total
assets.........................................................................................
.. 93,015,335
-----------
LIABILITIES
Payable for investment securities
purchased............................................................ 4,000,000
Net unrealized depreciation of swap
contract........................................................... 101,396
Advisory fee
payable...................................................................................
47,847
Administrative fee
payable.............................................................................
14,722
Accrued expenses and other
liabilities................................................................. 186,594
-----------
Total
liabilities....................................................................................
.. 4,350,559
-----------
NET ASSETS (equivalent to $8.89 per share, based on 9,973,931 shares
outstanding)........................ $88,664,776
===========
COMPOSITION OF NET ASSETS
Capital stock, at
par.................................................................................. $
99,739
Additional paid-in
capital.............................................................................
95,520,012
Accumulated net realized loss on investments, options and foreign currency
transactions................ (7,035,323)
Net unrealized appreciation of investments and foreign currency denominated assets and
liabilities..... 80,348
-----------
$88,664,776
===========
NET ASSET VALUE PER
SHARE................................................................................
$8.89
===========
- -----------------------------------------------------------------------------------------------
- ------------------------
</TABLE>
See notes to financial statements.
6
<PAGE>
STATEMENT OF OPERATIONS
NOVEMBER 30, 1994 ACM MANAGED MULTI-MARKET TRUST, INC.
<TABLE>
- -----------------------------------------------------------------------------------------------
- ------------------------
<S> <C>
<C>
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $38,235)..............................
$7,511,464
EXPENSES
Advisory fee.....................................................................
$597,916
Administrative fee...............................................................
183,973
Custodian........................................................................
161,622
Audit and legal..................................................................
76,644
Transfer agency..................................................................
65,247
Loan expenses....................................................................
37,848
Directors' fees..................................................................
28,927
Printing.........................................................................
22,003
Amortization of organization expenses............................................
9,855
Miscellaneous....................................................................
43,567
- --------
Total expenses...................................................................
1,227,602
-----------
Net investment income ...........................................................
6,283,862
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized loss on investment transactions.......................................
(1,513,322)
Net realized loss on options and foreign currency transactions.....................
(7,171,787)
Net change in unrealized depreciation of investments...............................
1,696,739
Net change in unrealized appreciation of options and foreign currency
denominated assets and liabilities.............................................
(693,305)
-----------
Net loss on investments and foreign currency denominated assets and liabilities....
(7,681,675)
-----------
NET DECREASE IN NET ASSETS FROM OPERATIONS.........................................
$(1,397,813)
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- ------------------------
YEAR
ENDED YEAR ENDED
NOVEMBER
30, NOVEMBER 30,
1994
1993
- ------------ -------------
<S> <C>
<C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income......................................................... $
6,283,862 $ 7,956,620
Net realized loss on investment transactions..................................
(1,513,322) (2,487,570)
Net realized loss on options and foreign currency transactions................
(7,171,787) (3,106,375)
Net change in unrealized depreciation of investments, options and foreign
currency denominated assets and liabilities.................................
1,003,434 6,454,533
- ----------- -----------
Net increase (decrease) in net assets from operations...........................
(1,397,813) 8,817,208
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income........................................................... -0-
(7,380,608)
Tax return of capital distribution..............................................
(7,181,087) -0-
- ----------- -----------
Total increase (decrease).......................................................
(8,578,900) 1,436,600
NET ASSETS
Beginning of year...............................................................
97,243,676 95,807,076
- ----------- -----------
End of year.....................................................................
$88,664,776 $97,243,676
=========== ===========
- -----------------------------------------------------------------------------------------------
- ------------------------
</TABLE>
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1994 ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
ACM Managed Multi-Market Trust, Inc. (the "Fund"), was incorporated in the
State of Maryland on November 17, 1989 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
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the day of valuation.
Securities which market quotations are not readily available and restricted
securities are valued in good faith at fair value using methods determined by
the Board of Directors. 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. OPTION WRITING
When the Fund writes an option, an amount equal to 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 treated by the Fund on the expiration
date as realized gains. 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
than 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 in determining whether the Fund has realized a gain or loss. If
a put option is exercised, the premium reduces the cost basis of the
securities or currencies purchased by the Fund. In writing an option, the
Fund bears the market risk of unfavorable changes in the price of the
security or currency underlying the written option. Exercise of an option
written by the Fund could result in the Fund selling or buying a security or
currency at a price different from the current market value.
3. 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 prices of such currencies against the
U.S. dollar. Purchases and sales of portfolio securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated at rates of exchange prevailing when
accrued.
Net realized loss on options and foreign currency transactions of $7,171,787
represent foreign exchange gains and losses from sales and maturities of
securities, holding of foreign currencies, options on foreign currencies,
exchange gains and losses realized between the trade and settlement dates on
security transactions, and the difference between the amounts of interest
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 of investments and
foreign currency denominated assets and liabilities.
4. ORGANIZATION EXPENSE
Organization expenses of approximately $50,000 have been deferred and are
being amortized on a straight-line basis through February, 1995.
5. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
6. INVESTMENT INCOME AND SECURITY TRANSACTIONS
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. The Fund accretes discounts as
adjustments to interest income.
7. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
8
<PAGE>
ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
NOTE B: ADVISORY AND ADMINISTRATIVE FEES
Under the terms of the investment advisory agreement, the Fund pays the
Adviser an advisory fee at an annualized rate of .65 of 1% of the average
adjusted weekly net assets of the Fund during the month.
Under the terms of the administrative agreement, the Fund pays Prudential
Mutual Fund Management, Inc. (the "Administrator"), a monthly fee equal to
the annualized rate of .20 of 1% of the Fund's average adjusted weekly net
assets up to $100 million, .18 of 1% of the Fund's next $150 million of
average adjusted weekly net assets, and .16 of 1% of the Fund's average
adjusted weekly net assets in excess of $250 million. The Administrator
prepares financial and regulatory reports for the Fund and provides other
clerical services.
- --------------------------------------------------------------------------------
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
investments) aggregated $265,247,437 and $306,470,224, respectively, for the
year ended November 30, 1994.
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 loss on options
and 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 a counterparty to meet the terms of a contract and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
At November 30, 1994, the Fund had outstanding forward exchange currency
contracts as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON
U.S. $ UNREALIZED
AMOUNT ORIGINATION
CURRENT APPRECIATION
FOREIGN CURRENCY BUY CONTRACTS (000) DATE
VALUE (DEPRECIATION)
- ------------------------------ -------------- --------------
- -------------- --------------
<S> <C> <C> <C>
<C>
British Pounds
expiring 02/23/95........................... 1,799 $ 2,825,733 $
2,819,418 $ (6,315)
Canadian Dollars
expiring 12/28/94........................... 7,748 5,629,996
5,633,015 3,019
Deutsche Marks
expiring 02/21/95 - 02/23/95................ 16,287 10,566,319
10,394,589 (171,730)
Finnish Markkaa
expiring 01/09/95........................... 14,761 3,114,040
3,036,466 (77,574)
Indonesian Rupiah
expiring 03/07/95 - 03/08/95................ 11,600,000 5,155,714
5,230,381 74,667
Italian Lira
expiring 12/12/94........................... 2,570,000 1,663,883
1,586,930 (76,953)
New Zealand Dollars
expiring 01/24/95........................... 11,339 6,894,147
7,097,218 203,071
Spanish Pesetas
expiring 01/23/95........................... 79,122 610,512
602,486 (8,026)
Swiss Francs
expiring 02/21/95........................... 5,933 4,517,590
4,492,628 (24,962)
</TABLE>
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.) ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTRACT COST ON
U.S. $ UNREALIZED
AMOUNT ORIGINATION
CURRENT APPRECIATION
FOREIGN CURRENCY SELL CONTRACTS (000) DATE
VALUE (DEPRECIATION)
- ------------------------------- -------------- --------------
- -------------- --------------
<S> <C> <C> <C>
<C>
Belgian Francs
expiring 01/11/95 - 01/26/95................ 155,659 $4,938,079
$4,821,675 $116,404
Deutsche Marks
expiring 02/21/95 - 02/23/95................ 11,345 7,300,915
7,241,375 59,540
Finnish Markkaa
expiring 01/09/95........................... 35,309 7,588,959
7,257,878 331,081
French Francs
expiring 01/31/95........................... 12,270 2,392,766
2,279,148 113,618
Italian Lira
expiring 12/12/94........................... 778,346 499,307
480,596 18,711
Japanese Yen
expiring 12/21/94........................... 533,000 5,450,459
5,398,485 51,974
New Zealand Dollars
expiring 01/24/95........................... 2,800 1,751,680
1,750,140 1,540
Spanish Pesetas
expiring 12/14/94........................... 376,236 3,012,662
2,870,313 142,349
Swedish Kronor
expiring 12/06/94 - 01/23/95................ 47,812 6,387,962
6,328,313 59,649
Swiss Francs
expiring 02/21/95........................... 5,860 4,571,567
4,435,088 136,479
--------
$946,542
========
</TABLE>
Transactions in foreign currency call and put options written for the year
ended November 30, 1994 were as follows:
NUMBER OF
CONTRACTS PREMIUMS
--------- --------
[S] [C] [C]
Options outstanding at
beginning of the year.... 1 $ 14,327
Options written........... 4 56,752
Options expired........... (5) (71,079)
--- --------
Options outstanding at
end of year.............. -0- $ -0-
=== ========
At November 30, 1994, the cost of investments for federal income tax purposes
was $91,779,760. Accordingly, gross unrealized appreciation of investments
was $368,543 and gross unrealized depreciation was $1,149,642, resulting in
net unrealized depreciation of $781,099 (excluding foreign currency
transactions).
At November 30, 1994, the Fund had a capital loss carryforward of $5,733,218
of which $318,312 expires in the year 2000, $2,402,000 expires in the year
2001 and $3,012,906 expires in the year 2002.
At November 30, 1994, the Fund had outstanding an Interest Rate Swap Agreement
with Morgan Guaranty Trust Company of New York. An Interest Rate Swap is an
agreement between counterparties to exchange interest rate payments that are
based on specified interest rates and a notional amount. On December 20, 1993,
the Fund entered into an agreement to exchange quarterly floating rate interest
payments based on LIBOR (London Interbank Offered Rate) on a ESP 350,000,000
notional amount for fixed payments of 7.919% that terminates on December 20,
1998. Net unrealized depreciation of the outstanding swap agreement at
November 30, 1994 was $101,396.
10
<PAGE>
ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
NOTE D: CAPITAL STOCK
There are 300,000,000 shares of $.01 par value common stock authorized. Of the
9,973,931 shares outstanding at November 30, 1994, the Adviser owned 9,000
shares.
- --------------------------------------------------------------------------------
NOTE E: BANK BORROWING
The Fund entered into a Multi-Currency Credit Agreement with Morgan Guaranty
Trust Company of New York on April 25, 1990, which terminates on October 6,
1995, unless extended for an additional one year period by the Fund. The
maximum credit available is $30,000,000 and requires no collateralization. No
loan amounts were outstanding under the Multi-Currency Credit Agreement
during the year ended November 30, 1994. Interest payments on borrowings are
based on the London Interbank Offered Rate. The Fund is also obligated to pay
Morgan Guaranty Trust Company of New York a commitment fee computed at the
rate .125 of 1% per annum on the daily average unused portion of the
revolving credit.
- --------------------------------------------------------------------------------
NOTE F: QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED AND (DECREASE)
UNREALIZED GAIN (LOSS) IN NET ASSETS
NET INVESTMENT ON INVESTMENTS AND RESULTING
MARKET PRICE
INCOME FOREIGN CURRENCY FROM OPERATIONS
ON NYSE
-------------- ---------------------- ----------------
- --------------
TOTAL PER TOTAL PER TOTAL PER
(000) SHARE (000) SHARE (000) SHARE
HIGH LOW
------- ----- ------- ----- ------- -----
- ------ ------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
November 30, 1994....... $1,465 $.15 $ 218 $ .02 $ 1,683 $ .17
$8.375 $8.000
August 31, 1994......... 1,529 .16 (2,351) (.24) (822) (.08)
$8.625 $8.000
May 31, 1994............ 1,635 .16 (3,807) (.38) (2,172) (.22)
$9.000 $8.000
February 28, 1994....... 1,655 .16 (1,742) (.17) (87) (.01)
$9.250 $8.750
------ ---- ------- ----- ------- -----
$6,284 $.63 $(7,682) $(.77) $(1,398) $(.14)
====== ==== ======= ===== ======= =====
November 30, 1993....... $2,006 $.20 $ (790) $(.08) $1,216 $ .12
$9.375 $9.000
August 31, 1993......... 2,114 .21 1,203 .12 3,317 .33
$9.375 $8.875
May 31, 1993............ 1,831 .18 549 .06 2,380 .24
$9.375 $8.875
February 28, 1993....... 2,006 .20 (102) (.01) 1,904 .19
$9.375 $8.875
------ ---- ------- ----- ------- -----
$7,957 $.79 $ 860 $ .09 $ 8,817 $ .88
====== ==== ======= ===== ======= =====
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.) ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
NOTE G: CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS
During the year ended November 30, 1994, the Fund adopted Statement of Position
93-2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies.
Accordingly, distributions have been determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
transactions and the temporary timing differences related to recognition of
losses from transactions. Through the year ended November 30, 1994, the
cumulative effect of such differences totaled $15,860,497 and was reclassified
from accumulated net realized loss to undistributed net investment income.
Permanent book and tax differences relating to shareholder distributions have
been reclassified to paid-in capital. The cumulative effect of such differences
as of November 30, 1994 totaled $16,930,026 and was reclassified from
undistributed net investment income to paid-in capital. Net assets, net
investment income and net realized gains were not affected by these changes.
- --------------------------------------------------------------------------------
NOTE H: CONCENTRATION OF RISK
Investing in foreign companies and foreign governments involves special risks
which include revaluation of currency and future adverse political and economic
developments. Moreover, securities of many foreign companies and foreign
governments and their markets may be less liquid and their prices more volatile
than those of comparable U.S. companies and the United States government. At
November 30, 1994, the Fund had investments in Mexican government and debt
obligations totaling $24,139,490, which represents approximately 27% of net
assets.
- --------------------------------------------------------------------------------
NOTE I: SUBSEQUENT EVENT
Subsequent to November 30, 1994 and through January 13, 1995, the Fund's net
asset value per share declined by approximately 12%, primarily due to the
devaluation of the Mexican peso.
12
<PAGE>
FINANCIAL HIGHLIGHTS ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
JANUARY 26,
YEAR ENDED NOVEMBER
30, 1990* TO
- -------------------------------------------- NOVEMBER 30,
1994 1993 1992
1991 1990
------- ------- -------
-------- -----------
<S> <C> <C> <C>
<C> <C>
Net asset value, beginning of period ..................... $9.75 $9.61 $11.22
$11.53 $11.06(a)
----- ----- ------
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income..................................... .63 .79 1.20
1.33 1.24
Net realized and unrealized gain (loss)
on investments.......................................... (.77) .09 (1.72)
(.13) .41
----- ----- ------
------ ------
Net increase (decrease) in net asset value
from operations ........................................ (.14) .88 (.52)
1.20 1.65
----- ----- ------
------ ------
LESS: DISTRIBUTIONS
Dividends from net investment income...................... -0- (.74) (1.09)
(1.34) (1.18)
Distributions from net realized gains on
investments and foreign currency transactions........... -0- -0- -0-
(.17) -0-
Tax return of capital distribution........................ (.72) -0- -0-
-0- -0-
----- ----- ------
------ ------
Total dividends and distributions....................... (.72) (.74) (1.09)
(1.51) (1.18)
----- ----- ------
------ ------
Net asset value, end of period.......................... $8.89 $9.75 $ 9.61
$11.22 $11.53
===== ===== ======
====== ======
Market value, end of period............................. $8.25 $9.00 $ 9.25
$12.25 $11.50
===== ===== ======
====== ======
TOTAL RETURN BASED ON: (B)
Market value............................................ (.29)% 5.42% (16.43)%
21.21% 14.30%
Net asset value......................................... (.82)% 9.92% (5.21)%
10.73% 14.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)............... $88,665 $97,244 $95,807
$111,133 $113,252
Ratio of expenses to average net assets................. 1.34% 2.18% 3.06%
3.37% 2.90%(c)
Ratio of expenses to average net assets
excluding loan expenses ................................ 1.30% 1.42% 1.55%
1.51% 1.39%(c)
Ratio of net investment income to average net assets.... 6.83% 8.26% 11.23%
11.62% 12.90%(c)
Portfolio turnover rate................................. 393% 319% 176%
95% 101%
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of operations.
(a) Net of offering costs of $.10.
(b) 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 the 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 years 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 net asset value will be lower than total investment return based
on market value in years 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 end of such periods. Total investment return calculated for a
period of less than one year is not annualized.
(c) Annualized.
13
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
ACM MANAGED MULTI-MARKET TRUST, INC.
We have audited the accompanying statement of assets and liabilities of ACM
Managed Multi-Market Trust, Inc. (the "Fund"), including the portfolio of
investments, as of November 30, 1994 and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and the financial highlights for each
of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of securities
owned as of November 30, 1994, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Multi-Market Trust, Inc. at November 30, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated periods in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
New York, New York
January 20, 1995
14
<PAGE>
ADDITIONAL INFORMATION ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
Shareholders whose shares are registered in their own names may elect to be
participants in the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
pursuant to which dividends and capital gain distributions to shareholders will
be paid in or reinvested in additional shares of the Fund (the "Dividend
Shares"). State Street Bank and Trust Company (the "Agent") will act as agent
for participants under the Plan. Shareholders whose shares are held in the name
of a broker or nominee should contact such broker or nominee to determine
whether or how they may participate in the Plan.
A shareholder who has elected to participate in the Plan may withdraw from
the Plan at any time. There will be no penalty for withdrawal from the Plan
and shareholders who have previously withdrawn from the Plan may rejoin it at
any time. Changes in elections must be in writing and should include the
shareholder's name and address as it appears on the share certificate. An
election to withdraw from the Plan will, until such election is changed, be
deemed to be an election by a shareholder to take all subsequent
distributions in cash. An election will only be effective for a distribution
declared and having a record date of at least ten days after the date on
which the election is received.
Commencing not more than five business days before the dividend payment date,
purchases of the Fund's shares may be made by the Agent, on behalf of the
participants in the Plan, from time to time to satisfy dividend reinvestment
under the Plan. Such purchases by the Agent on or before the dividend
payment date may be made on the New York Stock Exchange (the "Exchange") or
elsewhere at any time when the price plus estimated commissions of the Fund's
Common Stock on the Exchange is lower than the Fund's most recently
calculated net asset value per share.
If the Agent determines on the dividend payment date that the shares
purchased as of such date are insufficient to satisfy the dividend
reinvestment requirements, the Agent, on behalf of the participants in the
Plan, will obtain the necessary additional shares as follows. To the extent
that outstanding shares are not available at a cost of less than per share
net asset value, the Agent, on behalf of the participants in the Plan, will
accept payment of the dividend, or the remaining portion thereof, in authorized
but unissued shares of the Fund on the dividend payment date. Such shares will
be issued at a per share price equal to the higher of (1) the net asset value
per share on the payment date, or (2) 95% of the closing market price per share
on the payment date. If the closing sale or offer price, plus estimated
commissions, of the Common Stock on the Exchange on the payment date is less
than the Fund's net asset value per share on such day, then the Agent will
purchase additional outstanding shares on the Exchange or elsewhere. If before
the Agent has completed such purchases, the market price plus commissions
exceeds the net asset value of the Fund's shares, the average per share purchase
price paid by the Agent may exceed the net asset value of the Fund's shares,
resulting in the acquisition of fewer shares than if shares had been issued by
the Fund.
The Agent will maintain all shareholders' accounts in the Plan and furnish
written confirmation of all transactions in the account, including
information needed by shareholders for tax records. Shares in the account of
each Plan participant will be held by the Agent in non-certificate form in
the name of the participant, and each shareholder's proxy will include those
shares purchased or received pursuant to the Plan.
15
<PAGE>
ADDITIONAL INFORMATION (CONT.) ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
There will be no brokerage charges with respect to shares issued directly by
the Fund to satisfy the dividend reinvestment requirements. However, each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Agent's open market purchases of shares. In each case, the
cost per share of shares purchased for each shareholder's account will be the
average cost, including brokerage commissions, of any shares purchased in the
open market plus the cost of any shares issued by the Fund.
Shareholders participating in the Plan may receive benefits not available to
shareholders not participating in the Plan. If the market price plus
commissions of the Fund's shares is above the net asset value, participants
in the Plan will receive shares of the Fund at a discount of up to 5% from
the current market value. However, if the market price plus commissions is
below the net asset value, participants will receive distributions in shares
with a net asset value greater than the value of any cash distribution they
would have received on their shares available in the market to make
distributions in shares at prices below the net asset value. Also, since the
Fund does not redeem its shares, the price on resale may be more or less than
the net asset value.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
written notice of the change sent to participants in the Plan at least 90 days
before the record date for such dividend or distribution. The Plan may also be
amended or terminated by the Agent on at least 90 days written notice to
participants in the Plan; however, the Fund reserves the right to amend the Plan
to include a service charge payable to the Agent by the participants. All
correspondence concerning the Plan should be directed to the Agent at State
Street Bank and Trust Company, P.O. Box 366, Boston, Massachusetts 02101.
Since the filing of the most recent amendment to the Fund's registration
statement with the Securities and Exchange Commission, there have been (i) no
material changes in the Fund's investment objectives or policies, (ii) no
changes to the Fund's charter or bylaws that would delay or prevent a change
of control of the Fund, (iii) no material changes in the principal risk
factors associated with investment in the Fund, and (iv) no change in the
person primarily responsible for the day-to-day management of the Fund's
portfolio, who is Douglas J. Peebles, Vice President of the Fund.
16
<PAGE>
ACM MANAGED MULTI-MARKET TRUST, INC.
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
JOHN D. CARIFA, Chairman and President
RUTH BLOCK /(1)/
DAVID H. DIEVLER
JAMES R. GREENE /(1)/
DR. JAMES M. HESTER /(1)/
HON. JAMES D. HODGSON /(1)/
CLIFFORD L. MICHEL /(1)/
ROBERT C. WHITE /(1)/
OFFICERS
ROBERT M. SINCHE, Senior Vice President
DOUGLAS J. PEEBLES, Vice President
EDMUND P. BERGAN, JR., Secretary
MARK D. GERSTEN, Treasurer & Chief Financial Officer
JOSEPH J. MANTINEO, Controller
ADMINISTRATOR
PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
One Seaport Plaza
New York, NY 10292-3592
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110
LEGAL COUNSEL
SEWARD AND KISSELL
1 Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
CUSTODIAN
BROWN BROTHERS HARRIMAN AND CO.
40 Water Street
Boston, MA 02109
- --------------------------------------------------------------------------------
/(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 Managed Multi-Market Trust, 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 securities mentioned in this report.
17
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ACM
- --------------------------------
Managed
- --------------------------------
Multi-Market
- --------------------------------
Trust
- --------------------------------
Annual Report
November 30, 1994
ALLIANCE(R)
Mutual Funds Without the Mystery./SM/
ACM MANAGED MULTI-MARKET TRUST, INC.
Summary of General Information
THE FUND
ACM Managed Multi-Market Trust, Inc. is a closed-end management investment
company designed to obtain the highest level of current income, consistent with
what the Fund's investment adviser considers to be prudent investment risk, that
is available from a portfolio of high-quality debt securities having remaining
maturities of not more than five years.
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 MgdMult Fd". The Fund's NYSE trading symbol is "MMF". Weekly
comparative net asset value (NAV) and market price information about the Fund
is published each Monday in The Wall Street Journal and each Saturday in The New
York Times and Barron's and other newspapers in a table called "Closed-End Bond
Funds." Additional information about the Fund is available by calling
1-800-247-4154.
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, State Street Bank & Trust Company P.O. Box 8200,
Boston, MA 02266-8200 or call 1-800-219-4218.
ACM MANAGED MULTI-MARKET TRUST, INC.
1345 Avenue of the Americas
New York, New York 10105
[LOGO OF ALLIANCE CAPITAL APPEARS HERE]
(R) These registered service marks used under license from the owner,
Alliance Capital Management, L.P.
MMTAR
