ALLIANCE NEW EUROPE FUND
ANNUAL REPORT
JULY 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
August 20, 1996
Dear Shareholder:
Since our report to you in February 1996, European equity markets and your Fund
have performed well, although July proved to be an extremely difficult month.
The absence of sustainable economic growth in the region, no further
interest-rate cuts, weakness in the dollar after an extended show of strength,
and volatility in the U.S. equity markets had a negative impact on stock
markets on the Continent. Markets that had previously done well posted the
worst returns. Only the United Kingdom, which had performed poorly for a year,
survived the month largely unscathed.
INVESTMENT RESULTS*
PERIODS ENDING JULY 31, 1996
CUMULATIVE TOTAL RETURN
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE NEW EUROPE FUND
Class A 5.81% 8.20%
Class B 5.37% 7.53%
Class C 5.43% 7.59%
MSCI EUROPE INDEX 4.63% 8.08%
LIPPER EUROPEAN REGION FUNDS AVG. 8.48% 8.60%
* THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIODS
SHOWN AND ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF
7/31/96. ALL FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN
DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN
SHARES ARE PURCHASED OR REDEEMED. RETURNS FOR THE FUND AND ITS BENCHMARKS
INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE INDEX IS UNMANAGED
AND DOES NOT REFLECT FEES AND EXPENSES. THE INDEX MEASURES THE PERFORMANCE OF
STOCK MARKETS IN 14 EUROPEAN COUNTRIES. THE LIPPER EUROPEAN REGION FUNDS
AVERAGE IS BASED ON THE PERFORMANCE OF A UNIVERSE OF MUTUAL FUNDS WITH
GENERALLY SIMILAR INVESTMENT OBJECTIVES. SALES CHARGES ARE NOT DEDUCTED.
FOR ADDITIONAL PERFORMANCE INFORMATION, SEE PAGE 3.
The table on this page provides information on the Fund's performance and, for
comparison, that of relevant benchmarks for the six and twelve months ended
July 31, 1996. The Fund surpassed the unmanaged Morgan Stanley Capital
International (MSCI) Europe Index on a six-month basis but tracked its results
for the last twelve months. The Fund nevertheless lagged the average return of
its Lipper universe of mutual funds during both periods. These funds have
generally similar investment objectives, although they may pursue different
investment policies.
MARKET AND ECONOMIC OVERVIEW
The gains made by European markets in the second half of 1995 were followed by
good performance during the early part of 1996. Low interest rates and a
stronger U.S. dollar provided a favorable profit environment for many European
companies. Market sentiment reversed dramatically in July, when confidence in
the region's economies and the outlook for a stronger dollar dimmed.
Currently, economic growth in Europe remains sluggish and forecasts continue to
be revised down. One area where we do see potential, however, is in the United
Kingdom. Our view is based on lively consumer spending and the prospect that
the government will ease monetary and fiscal restraints to stimulate the
economy in time for elections next spring. In other areas of Europe, consumer
spending remains depressed. Faced with governments that are committed to
tightening their belts to meet the Maastricht criteria for economic and
monetary unity and confronted by the possibility that the dollar's six-month
surge in strength may be waning, uncompetitive industries will be forced to
restructure.
Given this scenario, we believe European governments will take steps to reduce
interest rates and relax monetary policies to engineer an economic recovery
later this year. There is already some evidence that consumer demand may be
increasing, but excess inventory should delay improvements in industrial
production. In the meantime, we see no sharp increase in either prices or
inflation.
The dollar remains the key variable to market performance through the remainder
of 1996. If it weakens, European industry faces difficult competitive
conditions and will continue to restructure and relocate production outside the
region. In that event, employment, consumer spending, and corporate profits
will suffer.
1
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
INVESTMENT ACTIVITY AND OUTLOOK
Europe's recent economic woes and investor concern about the prognosis and
timing of a recovery has created a difficult investment environment. Cyclical
stocks, in particular, have struggled. The Fund's exposure to the small,
cyclical companies that are most vulnerable to changes in domestic economic
conditions depressed returns during the last six months. Many of their stocks
now sell at very low valuations relative to their long-term earnings potential.
Going forward, we will continue to maintain positions in those companies and
industries that offer the best prospects for appreciation. We believe the
long-awaited recovery will arrive as 1997 approaches and that Europe's equity
markets will recognize and reward those undervalued companies.
In the short term, we are emphasizing investments in the United Kingdom, where
economic conditions are the most favorable. The Fund's portfolio holds stocks
of companies expected to benefit from strong consumer demand. Industries
represented are retail, leisure, and housing. Elsewhere, we continue to favor
sectors where supply conditions are being constrained so that even a small
increase in demand may enhance prices and profits.
Although the six-month earnings reports issued by many European companies in
June were poor, there were no real surprises and investor interest remains
strong despite misgivings about the near-term outlook for European economies.
We therefore remain modestly optimistic about the performance of European
equities over the next twelve months.
As always, we appreciate your investment in the New Europe Fund and look
forward to reporting its progress to you in the coming period.
Sincerely,
John D. Carifa
Chairman and President
Greg Eckersley
Vice President
Nigel Hankin
Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
Alliance New Europe Fund is a non-diversified investment company that seeks
long-term capital appreciation through investment primarily in the equity
securities of companies based in Europe.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JULY 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 8.20% 3.61%
. Five Years 13.85% 12.86%
. Since Inception* 7.92% 7.18%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 7.53% 3.53%
. Five Years 13.11% 13.11%
. Since Inception* 9.63% 9.63%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 7.59% 6.59%
. Since Inception* 14.68% 14.68%
Average annual total returns reflect investment of dividends and/or capital
gain distributions in additional shares, with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4%-Year 1; 3%-Year 2; 2%-Year 3; 1%-Year 4);
Class C shares purchased prior to July 1, 1996, are not subject to front-end or
contingent deferred sales charges. Class C shares purchased on or after July 1,
1996, are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 4/2/90, Class A; 3/5/91, Class B; 5/3/93, Class C.
3
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
ALLIANCE NEW EUROPE FUND
$10,000 INVESTMENT OVER LIFE OF FUND
4/2/90 TO 7/31/96
MSCI EUROPE
INDEX
LIPPER EUROPEAN
REGION FUNDS
NEW EUROPE FUND
CLASS A: $15,509
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
4/2/90
7/31/96
This chart illustrates the total value of an assumed investment in Alliance New
Europe Fund Class A shares after deducting the maximum sales charge, and with
dividends and capital gains reinvested. It is a hypothetical illustration for
illustrative purposes only. Performance for Class B and Class C shares will
vary from the results shown due to differences in expenses and fees charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Morgan Stanley Capital International (MSCI) Europe Index measures
the overall performance of stock markets in 14 European countries.
The Lipper European Region Funds Average reflects the performance of 55 mutual
funds, 13 of which have existed for the full time represented. These funds have
generally similar investment objectives to Alliance New Europe Fund, although
the investment policies of some funds included in the average may vary.
When comparing Alliance New Europe Fund to the index and average shown above,
you should note that the Fund's performance reflects the maximum sales charge
of 4.25% while no such charges are reflected in the performance of the index or
average.
New Europe Fund
MSCI Europe Index
Lipper European Region Funds Average
4
TEN LARGEST HOLDINGS
JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------
Ciba-Geigy A.G. $ 3,430,908 2.7%
Total, S.A. Cl. B 2,705,382 2.1
B.A.T. Industries Plc. 2,676,066 2.1
Nestle, S.A. 2,649,560 2.1
Veba A.G. 2,442,686 1.9
Bayer A.G. 2,386,267 1.9
International Nederlanden 2,361,690 1.9
Fortis Amev N.V. 2,239,510 1.8
Grand Metropolitan Plc. 2,164,960 1.7
Vodafone Group Plc. 2,129,806 1.7
$25,186,835 19.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JULY 31, 1996
_______________________________________________________________________________
SHARES*
--------------------
HOLDINGS
PURCHASES COUNTRY BOUGHT 7/31/96
- -------------------------------------------------------------------------------
Akzo Nobel Netherlands 18,800 18,800
Cadbury Schweppes Plc. United Kingdom 163,000 163,000
Enterprise Oil Plc. United Kingdom 228,000 228,000
Glaxo Wellcome Plc. United Kingdom 92,000 92,000
Hornback Holding A.G. Germany 18,100 18,100
INA (Instituto Nationale delle Assicurazioni)Italy 987,000 987,000
Lafarge, S.A. France 22,200 22,200
Sandoz A.G. Switzerland 1,170 1,170
Sears Plc. United Kingdom 842,000 842,000
Tesco Plc. United Kingdom 268,000 268,000
HOLDINGS
SALES COUNTRY SOLD 7/31/96
- -------------------------------------------------------------------------------
AB Astra, Ser. A Sweden 24,300 6,500
British Airways Plc. United Kingdom 230,000 -0-
Compagnie Financiere de Paribas, S.A. France 20,900 -0-
Den Danske Bank International, S.A. Denmark 10,400 25,300
Deutsche Bank A.G. Germany 19,200 32,600
Fortis Amev N.V. Netherlands 23,600 78,100
Nokia Corp. Finland 21,350 19,700
Sanofi, S.A. France 16,600 -0-
Telecom Italia Mobile S.p.A. Italy 657,700 -0-
Usinor Sacilor France 56,300 34,000
* Adjusted for stock splits.
5
INDUSTRY DIVERSIFICATION
JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
COMPANY U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Consumer Staples $ 18,813,661 14.8%
Consumer Manufacturing 15,887,044 12.5
Banking 12,739,288 10.0
Utilities 10,948,392 8.6
Chemicals 9,328,523 7.4
Insurance 7,847,944 6.2
Energy 7,754,461 6.1
Retail 6,474,979 5.1
Healthcare 5,895,927 4.7
Capital Goods 5,404,693 4.3
Consumer Services 3,999,709 3.2
Real Estate 3,496,163 2.8
Multi-Industry 2,999,351 2.4
Transportation 2,842,145 2.2
Printing and Publishing 2,590,706 2.0
Basic Industries 1,912,354 1.5
Forest Products and Paper 1,381,913 1.1
Finance 911,686 0.7
Communication Equipment 693,186 0.5
Other 213,934 0.2
Total Investments 122,136,059 96.3
Cash & Receivables, net of liabilities 4,692,243 3.7
Net Assets $126,828,302 100.0%
6
PORTFOLIO OF INVESTMENTS
JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS92.9%
AUSTRIA0.2%
Mayr-Melnhof Karton A.G.* 5,580 $ 251,450
BELGIUM0.6%
Kredietbank, N.V. 2,210 704,288
DENMARK2.2%
Den Danske Bank International, S.A. 25,300 1,728,964
Tele Danmark A.S. Ser.B 23,220 1,080,996
------------
2,809,960
FINLAND1.6%
Merita, Ltd.* 354,380 753,695
Orion-yhtyma Oy Ser. B 39,600 1,296,401
------------
2,050,096
FRANCE19.3%
Assurances Generales de France (a) 57,000 1,541,992
Banque Nationale de Paris (a) 50,057 1,797,877
Bouygues, S.A. (a) 14,978 1,609,380
Cep Communications 9,300 707,126
Eaux (Cie Generale) (a) 11,100 1,141,607
Elf Aquitane, S.A. (a) 17,100 1,220,135
Groupe Danone (a) 13,193 1,971,946
GTM Entrepose, S.A. 13,600 792,702
Klepierre 2,480 315,106
Lafarge, S.A. 22,200 1,330,395
Legris Industries, S.A. (a) 27,310 1,092,905
Pechiney, S.A. Ser.A 6,532 268,589
Peugeot, S.A. (a) 14,130 1,707,692
Salomon, S.A. 1,050 903,418
SEFIMEG 9,700 675,431
SIMCO 7,649 621,539
Societe de Immeubles De France, S.A.
(ordinary) 9,560 659,945
Societe de Immeubles De France, S.A. (new) 104 7,179
Total, S.A. Cl.B (a) 37,662 2,705,382
TV Francaise 9,000 1,057,089
Unibail (a) 11,720 1,205,373
Union Immobiliere de France 8,000 678,714
Usinor Sacilor 34,000 474,518
------------
24,486,040
GERMANY9.4%
Bayer A.G.(a) 71,000 2,386,267
Deutsche Bank A.G.(a) 32,600 1,650,580
Henkel KGAA Vz 4,360 179,989
Klein, Schanz & Beck* 2,490 363,491
Lufthansa 9,600 1,372,078
Schmalbach Lubeca A.G.* (a) 6,740 1,169,247
Sueddeutsche Zucker 2,833 1,431,117
Varta A.G.* 4,550 945,341
Veba A.G.(a) 48,000 2,442,686
------------
11,940,796
IRELAND0.9%
Irish Life Plc. 309,649 1,168,027
ITALY4.4%
Eni S.p.A (Ente Nazionale Idrocarburi) 253,000 1,137,817
INA (Instituto Nationale delle Assicurazioni) 987,000 1,414,667
La Rinascente S.p.A. 200,000 1,301,860
Magneti Marelli S.p.A. 340,250 469,783
Telecom Italia S.p.A.* 675,700 1,277,276
------------
5,601,403
NETHERLANDS6.6%
Akzo Nobel 18,800 2,109,729
Apothekers Cooperate O.P.G. 14,990 399,005
Fortis Amev N.V. 78,100 2,239,510
International Nederlanden 77,000 2,361,690
Kon Nedlloyd N.V. 29,100 640,794
Thermo Eurotech N.V. (b) 160,000 580,752
------------
8,331,480
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
NORWAY1.7%
Bergesen Cl.A 44,700 $ 947,582
Christiania Bank Og Kreditkasse 506,000 1,223,609
------------
2,171,191
SPAIN3.2%
Banco Intercontinental Espanol 11,385 1,277,126
Repsol, S.A. 29,400 987,055
Tabacalera, S.A. Ser. A 24,500 1,099,327
Unidad Editorial, S.A. (b) 549,920 699,993
------------
4,063,501
SWEDEN4.0%
AB Astra
Ser. A 6,500 272,970
Ser. B 32,500 1,340,258
Electrolux AB Ser. B 22,600 1,108,135
Marieberg Tidnings AB Ser. A 47,400 1,183,587
Stora Kopparbergs Ser. B 90,000 1,130,463
------------
5,035,413
SWITZERLAND8.1%
Baloise Holdings 740 1,483,748
Ciba-Geigy A.G. 2,890 3,430,908
Forbo Holding A.G. (a) 3,550 1,468,083
Nestle, S.A. 2,320 2,649,560
Sandoz A.G. (a) 1,170 1,305,899
------------
10,338,198
UNITED KINGDOM30.5%
Anglian Water Plc. 178,000 1,549,330
Babcock Int'l Group Plc. 151,900 208,133
B.A.T. Industries Plc. (a) 341,000 2,676,066
British Land Co. Plc. 134,600 911,686
British Telecom Plc. 240,000 1,358,400
British Vita Plc. 278,200 875,023
BTR Plc. 485,000 1,857,744
Cadbury Schweppes Plc. 163,000 1,288,059
Coats Viyella Plc. 195,150 502,902
Courtaulds Textiles Plc. 111,100 574,331
Enterprise Oil Plc. 228,000 1,704,072
General Electric Co.Plc. 233,000 1,378,638
Glaxo Wellcome Plc. 92,000 1,281,394
Grand Metropolitan Plc. (a) 320,000 2,164,960
Hazelwood Foods Plc. 654,000 941,956
Hepworth Plc. 347,354 1,395,425
Holliday Chemical Holdings Plc. 260,150 526,596
Marley Plc. 431,839 833,795
McBride Plc. 249,000 500,141
Mowlem (John) & Co. Plc. 572,000 743,657
National Power Plc. 180,000 1,109,898
Northern Foods Plc. 226,000 658,044
Peninsular & Oriental Steam Navigation 165,000 1,253,769
Royal Bank of Scotland Group Plc. 170,000 1,241,459
Rugby Group Plc. 863,000 1,397,456
Sainsbury (J), Plc. 247,000 1,446,086
Sears Plc. 842,000 1,265,189
Tate & Lyle Plc. 231,500 1,672,564
Tesco Plc. 268,000 1,220,606
Vodafone Group Plc. 596,000 2,129,806
Wimpey (George) Plc. (a) 917,000 2,013,274
------------
38,680,459
OTHER0.2%
Asesores Bursatiles Capital Fund N.V.*(b) 800 213,934
Total Common Stocks & Other Investments
(cost $107,744,753) 117,846,236
8
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
PREFERRED STOCKS3.4%
FINLAND0.6%
Nokia Corp. (a) 19,700 $ 693,186
GERMANY2.8%
Henkel KGAA Vz 39,240 1,579,932
Hornback Holding A.G. 18,100 1,241,238
Klein, Schanz & Beck 6,310 775,467
------------
3,596,637
Total Preferred Stocks
(cost $4,794,852) 4,289,823
TOTAL INVESTMENTS96.3%
(cost $112,539,605) $122,136,059
Other assets less liabilities3.7% 4,692,243
NET ASSETS100% $126,828,302
* Non-income producing.
(a) Securities or a portion, thereof, with an aggregate market value of
approximately $30,448,182 are segregated to collateralize forward exchange
currency contracts.
(b) Illiquid security, valued at fair value (see Notes A & F).
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value(cost $112,539,605) $122,136,059
Cash, at value (cost $2,359,063) 2,361,366
Receivable for investment securities sold 1,815,599
Dividends and interest receivable 1,274,811
Receivable for capital stock sold 759,940
Total assets 128,347,775
LIABILITIES
Unrealized depreciation of forward exchange currency contracts 438,973
Payable for investment securities purchased 350,540
Payable for capital stock redeemed 318,133
Advisory fee payable 115,277
Distribution fee payable 63,959
Accrued expenses and other liabilities 232,591
Total liabilities 1,519,473
NET ASSETS $126,828,302
COMPOSITION OF NET ASSETS
Capital stock, at par $ 81,200
Additional paid-in capital 106,512,004
Undistributed net investment income 386,447
Accumulated net realized gain on investments and foreign
currency transactions 10,670,450
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 9,178,201
$126,828,302
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($74,026,037/
4,672,831 shares of capital stock issued and outstanding) $15.84
Sales charge-4.25% of public offering price .70
Maximum offering price $16.54
CLASS B SHARES
Net asset value and offering price per share ($42,661,505/
2,785,737 shares of capital stock issued and outstanding) $15.31
CLASS C SHARES
Net asset value and offering price per share($10,140,760/
661,464 shares of capital stock issued and outstanding) $15.33
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $618,697) $ 4,083,153
EXPENSES
Advisory fee $1,318,528
Distribution fee - Class A 227,874
Distribution fee - Class B 383,518
Distribution fee - Class C 86,891
Custodian 242,194
Transfer agency 227,793
Administrative 153,910
Audit and legal 140,979
Printing 74,893
Registration 49,647
Directors' fees 34,450
Miscellaneous 29,479
Total expenses 2,970,156
Net investment income 1,112,997
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 11,218,709
Net realized gain on foreign currency transactions 25,547
Net change in unrealized appreciation (depreciation) of:
Investments (3,888,485)
Foreign currency denominated assets and liabilities 751,676
Net gain on investments and foreign currency transactions 8,107,447
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 9,220,444
See notes to financial statements.
11
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,112,997 $ 167,293
Net realized gain on investments and foreign
currency transactions 11,244,256 23,504,623
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (3,136,809) (1,551,521)
Net increase in net assets from operations 9,220,444 22,120,395
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A -0- (563,832)
Class B -0- (232,044)
Class C -0- (73,698)
Net realized gain on investments
Class A (2,403,847) -0-
Class B (1,133,126) -0-
Class C (271,554) -0-
CAPITAL STOCK TRANSACTIONS
Net decrease (7,025,006) (22,827,762)
Total decrease (1,613,089) (1,576,941)
NET ASSETS
Beginning of year 128,441,391 130,018,332
End of year (including undistributed net
investment income of $386,447) $126,828,302 $128,441,391
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996 ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance New Europe Fund, Inc. (the "Fund"), which is a Maryland corporation,
is registered under the Investment Company Act of 1940, as a non-diversified,
open-end management investment company. The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end sales charge of up to
4.25%. Class B shares are sold with a contingent deferred sales charge which
declines from 4% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares eight years after
the end of the calendar month of purchase. Class C shares were sold without an
initial or contingent deferred sales charge. However, Class C shares purchased
on or after July 1, 1996, are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. All three classes
of shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a United States or European stock exchange for
which market quotations are readily available are valued at the last quoted
sales price on that exchange on the day of valuation or, if no such closing
price is available, at the last bid price quoted on such day. Other securities,
including securities of issuers within Eastern European countries, for which
market quotations are readily available are valued in a like manner. Readily
marketable fixed income securities are valued on the basis of prices provided
by a pricing service when such prices are believed by the Adviser to reflect
the fair market value of such securities. Securities, including securities of
issuers within Eastern European countries, and assets for which market
quotations are not readily available, including investments that are subject to
limitations as to their sale (restricted securities), are valued at fair value
as determined in good faith by the Fund's Board of Directors. In determining
fair value, consideration is given to cost, operating and other financial data.
2. 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 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 foreign exchange gains represent foreign exchange gains and losses from
sales and maturities of debt securities, holding of foreign currencies,
exchange gains or losses realized between the trade and settlement dates on
security transactions, and the difference between the amounts of dividends,
interest and foreign taxes receivable 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
period end exchange rates are reflected as a component of net unrealized
appreciation of foreign currency denominated assets and liabilities.
3. 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.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.
5. CONCENTRATION OF RISK
The Fund has invested approximately 31% of its' net assets in United Kingdom
equity securities. Political, social or economic changes in this market may
have a greater impact on the value of the Funds portfolio due to this
concentration.
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement, the Fund pays Alliance Capital
Management L.P., (the "Adviser"), a monthly fee equal to the annualized rate of
1.10% of the Fund's average daily net assets up to $100 million, .95% of the
next $100 million of the Fund's average daily net assets and .80% of the Fund's
average daily net assets over $200 million. The Adviser has agreed, under the
terms of the advisory agreement, to reimburse the Fund to the extent that its
aggregate expenses (exclusive of interest, taxes, brokerage, distribution fee,
extraordinary expenses and certain other expenses) exceed the limits prescribed
by any state in which the Fund's shares are qualified for sale. The Fund
believes that the most restrictive expense ratio limitation currently imposed
by any state is 2.5% of the first $30 million of the Fund's average daily net
assets, 2% of the next $70 million of its average daily net assets and 1.5% of
its average daily net assets in excess of $100 million. For the year ended July
31, 1996, no such reimbursement was required. Pursuant to the advisory
agreement, the Fund paid $153,910 to the Adviser representing the cost of
certain legal and accounting services provided to the Fund by the Adviser for
the year ended July 31, 1996.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $157,702 for the year ended July 31, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $20,247 from the sale of Class A shares and $92,235
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the year ended July 31, 1996.
Brokerage commissions paid on securities transactions for the year ended July
31, 1996, amounted to $316,516, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30 of 1% of the average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to the Class
B and Class C shares. The fees are accrued daily and paid monthly. The
Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $2,109,619 and $394,639 for Class B and
C shares, respectively; such costs may be recovered from the Fund in future
periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
14
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $82,846,182 and $92,568,260,
respectively, for the year ended July 31, 1996. There were no purchases or
sales of U.S. Government and government agency obligations for the year ended
July 31, 1996.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward foreign 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 foreign 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 contract is included in net
realized gain or loss from foreign currency transactions.
Fluctuations in the value of forward foreign 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 cash not available for investment
or liquid securities in a separate account of the Fund having a value equal to
the aggregate amount of the Fund's commitments under forward foreign exchange
currency contracts entered into with respect to position hedges.
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. 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.
At July 31, 1996, the Fund had outstanding forward foreign exchange currency
contracts both to sell or purchase foreign currencies against the U.S. dollar,
as follows:
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
-------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SELL CONTRACTS
French Francs, expiring 8/30/96 61,250 $11,756,238 $12,288,588 $(532,350)
Swiss Francs, expiring 8/30/96 2,800 2,218,700 2,344,384 (125,684)
FOREIGN CURRENCY BUY CONTRACTS
French Francs, expiring 8/30/96 61,250 12,091,994 12,288,588 196,594
Swiss Francs, expiring 8/30/96 2,800 2,321,917 2,344,384 22,467
----------
$(438,973)
</TABLE>
At July 31, 1996, the cost of investments for federal income tax purposes was
$113,073,068. Accordingly, gross unrealized appreciation of investments was
$13,772,931 and gross unrealized depreciation of investments was $4,709,940,
resulting in net unrealized appreciation of $9,062,991.
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 150,000,000 shares of $0.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 50,000,000 authorized shares. Transactions in shares of
beneficial interest were as follows:
SHARES AMOUNT
--------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, JULY 31, JULY 31, JULY 31,
1996 1995 1996 1995
------------ ------------ -------------- -------------
CLASS A
Shares sold 1,080,506 669,629 $ 16,829,742 $ 9,073,455
Shares issued in
reinvestment of
dividends and
distributions 87,353 22,756 1,262,243 286,723
Shares converted from
Class B to Class A 38,780 -0- 620,439 -0-
Shares redeemed (2,233,336) (1,846,522) (33,970,313) (24,604,898)
Net decrease (1,026,697) (1,154,137) $(15,257,889) $(15,244,720)
CLASS B
Shares sold 1,396,359 1,138,036 $ 20,526,104 $ 14,986,892
Shares issued in
reinvestment of
dividends and
distributions 46,664 9,139 654,706 112,591
Shares converted from
Class B to Class A (39,816) -0- (620,439) -0-
Shares redeemed (965,104) (1,330,104) (14,257,684) (17,132,367)
Net increase(decrease) 438,103 (182,929) $ 6,302,687 $ (2,032,884)
CLASS C
Shares sold 818,362 1,012,937 $ 12,075,167 $ 13,356,791
Shares issued in
reinvestment of
dividends and
distributions 5,746 1,254 80,733 15,462
Shares redeemed (692,655) (1,440,571) (10,225,704) (18,922,411)
Net increase(decrease) 131,453 (426,380) $ 1,930,196 $ (5,550,158)
NOTE F: ILLIQUID SECURITIES
DATE
SECURITY ACQUIRED U.S. $COST
- ------------------------------------- ---------- ----------
Asesores Bursatiles Capital Fund N.V. 10/29/90 $356,924
Thermo Eurotech N.V. 3/19/91 512,088
Unidad Editorial, S.A. 10/01/92 699,170
The securities shown above are illiquid and have been valued at fair value in
accordance with procedures described in Note A. The value of these securities
at July 31, 1996 was $1,494,679, representing 1.2% of net assets.
16
FINANCIAL HIGHLIGHTS ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------
MARCH 1,1994
YEAR ENDED JULY 31, TO YEAR ENDED FEBRUARY 28,
------------------------ JULY 31, -------------------------------------
1996 1995 1994(B) 1994 1993 1992
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.11 $12.66 $12.53 $9.37 $9.81 $9.76
INCOME FROM INVESTMENT OPERATIONS
Net investment income .18 .04 .09 .02(c) .04 .02(c)
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions 1.02 2.50 .04 3.14 (.33) .05
Net increase (decrease) in net asset
value from operations 1.20 2.54 .13 3.16 (.29) .07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.09) -0- -0- (.15) (.02)
Distributions from net realized gains
on investments and foreign currency
transactions (.47) -0- -0- -0- -0- -0-
Total dividends and distributions (.47) (.09) -0- -0- (.15) (.02)
Net asset value, end of period $15.84 $15.11 $12.66 $12.53 $9.37 $9.81
TOTAL RETURN
Total investment return based on net
asset value (d) 8.20% 20.22% 1.04% 33.73% (2.82)% .74%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $74,026 $86,112 $86,739 $90,372 $79,285 $108,510
Ratio of expenses to average net assets 2.14% 2.09% 2.06%(e) 2.30% 2.25% 2.24%
Ratio of net investment income to
average net assets 1.10% .37% 1.85%(e) .17% .47% .16%
Portfolio turnover rate 69% 74% 35% 94% 125% 34%
</TABLE>
See footnote summary on page 19.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
MARCH 5,
MARCH 1,1994 1991(A)
YEAR ENDED JULY 31, TO YEAR ENDED FEBRUARY 28, TO
------------------------ JULY 31, ----------------------- FEBRUARY 29,
1996 1995 1994(B) 1994 1993 1992
----------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.71 $12.41 $12.32 $ 9.28 $ 9.74 $ 9.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .08 (.05) .07 (.05)(c) (.02) (.04)(c)
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions .99 2.44 .02 3.09 (.33) (.04)
Net increase (decrease) in net asset
value from operations 1.07 2.39 .09 3.04 (.35) (.08)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.09) -0- -0- (.11) (.02)
Dividends from net realized gains on
investments and foreign currency
transactions (.47) -0- -0- -0- -0- -0-
Total dividends and distributions (.47) (.09) -0- -0- (.11) (.02)
Net asset value, end of period $15.31 $14.71 $12.41 $12.32 $ 9.28 $ 9.74
TOTAL RETURN
Total investment return based on net
asset value (d) 7.53% 19.42% .73% 32.76% (3.49)% .03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $42,662 $34,527 $31,404 $20,729 $1,732 $1,423
Ratio of expenses to average net assets 2.86% 2.79% 2.76%(e) 3.02% 3.00% 3.02%(e)
Ratio of net investment income (loss) to
average net assets .59% (.33)% 1.15%(e) (.52)% (.50)% (.71)%(e)
Portfolio turnover rate 69% 74% 35% 94% 125% 34%
</TABLE>
See footnote summary on page 19.
18
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------
MAY 3,
MARCH 1,1994 1993(A)
YEAR ENDED JULY 31, TO TO
---------------------- JULY 31, FEBRUARY 28,
1996 1995 1994(B) 1994
---------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.72 $12.42 $12.33 $10.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .08 (.07) .06 (.04)(c)
Net realized and unrealized gain
on investments and foreign
currency transactions 1.00 2.46 .03 2.16
Net increase in net asset
value from operations 1.08 2.39 .09 2.12
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.09) -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (.47) -0- -0- -0-
Total dividends and distributions (.47) (.09) -0- -0-
Net asset value, end of period $15.33 $14.72 $12.42 $12.33
TOTAL RETURN
Total investment return based on net
asset value (d) 7.59% 19.40% .73% 20.77%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $10,141 $7,802 $11,875 $10,886
Ratio of expenses to average net assets 2.87% 2.78% 2.76%(e) 3.00%(e)
Ratio of net investment income (loss)
to average net assets .58% (.33)% 1.15%(e) (.52)%(e)
Portfolio turnover rate 69% 74% 35% 94%
</TABLE>
(a) Commencement of distribution.
(b) The Fund changed its year end from February 28 to July 31.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return for a period of less than one year is not
annualized.
(e) Annualized.
19
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
ALLIANCE NEW EUROPE FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance New Europe Fund, Inc. (the "Fund"), including the portfolio of
investments, as of July 31, 1996, 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 assur-ance 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 July
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance New Europe Fund, Inc. at July 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated periods, in conformity with generally accepted accounting principles.
New York, New York
September 5, 1996
FOREIGN TAX CREDIT (UNAUDITED)
_______________________________________________________________________________
The Fund will elect to give the benefit to its shareholders of foreign taxes
that have been paid and/or withheld for the year ended July 31, 1996.
Shareholders will receive more detailed information along with their form
1099-DIV in January, 1997.
20
ALLIANCE NEW EUROPE FUND, INC.
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
W.H. HENDERSON (1)
STIG HOST (1)
RICHARD M. LILLY (1)
ALAN J. STOGA (1)
ROBERT C. WHITE (1)
OFFICERS
THOMAS J. BARDONG, VICE PRESIDENT
NICHOLAS CROSSLAND, VICE PRESIDENT
GREG ECKERSLEY, VICE PRESIDENT
NIGEL HANKIN, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
EDMUND P. BERGAN, JR., SECRETARY
VINCENT NOTO, CONTROLLER
CUSTODIAN AND ADMINISTRATOR
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
(1) Member of the Audit Committee.
21
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
22
ALLIANCE NEW EUROPE FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
EURAR
