ALLIANCE WORLD INCOME TRUST
SEMI-ANNUAL REPORT
APRIL 30, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
June 26, 1998
Dear Shareholder:
We are pleased to report to you on our strategy, performance and outlook of the
Alliance World Income Trust, for the semi-annual reporting period ended April
30, 1998. The Fund is designed for investors who seek the highest level of
current income that is available from a portfolio of high-quality, global short
term (0-1 year maturity) debt.
MARKET OVERVIEW
Over the six-month period under review, the U.S. economy continued its healthy
expansion, coupled with low inflation; this in spite of economic turmoil in
East Asia. Fueled by strong domestic demand, first quarter Gross Domestic
Product (GDP) growth, a standard measure of economic growth, grew 4.8%, an
increase from the fourth quarter of 1997. In addition, the Consumer Price Index
(CPI), a measure of inflation, recorded a 10 year low 1.4% increase over the 12
months ended in April, despite the tightest labor market in 28 years. Helped by
strong economic fundamentals and uncertainty overseas, the U.S. dollar
continued to strengthen against the major currencies.
Through December of 1997, the U.S. bond market continued to climb as investors,
concerned about events in the emerging markets, sought the safety of U.S.
Treasuries. When overseas markets stabilized in January and investor focus
shifted to short-term expectations of U.S. monetary policy, the market began
trading within a 30 basis point range until the end of the period. Over the
entire period, two year Treasury yields decreased slightly from 5.61% to 5.57%
and 30-year yields decreased from 6.15% to 5.95%. Sighting low inflation and
slowing demand from Asia, the Federal Reserve left interest rates unchanged.
In most developed countries outside of the U.S., growth remained positive while
inflation declined. European bond markets outperformed all other regions of the
world including the U.S., on a hedged basis. Modestly improving growth
prospects were offset by benign inflation as 11 countries, including Spain and
Italy, were formally recommended for membership in the European Monetary Union.
East Asian bond markets were the worst performing over the period. In Japan,
the already precarious economic recovery was further jeopardized by deepening
economic and financial turmoil in the region. In Australia, economic growth
remained strong but weak consumer surveys, falling commodity prices, and the
government's announcement that it will repurchase more of its debt, moved bond
prices higher.
Emerging market debt prices improved substantially during the first quarter of
1998 from the low levels reached late in 1997. As Korea's situation became
better defined, and their short-term debt was successfully rolled over,
investors aggressively moved back into the sector, reducing the risk premium
back to spring 1997 levels. Countries such as Russia and Brazil, that had been
particularly hard hit last year, were the strongest performers, benefiting from
improvement in both general investor sentiment and their specific economic
fundamentals.
Despite the temporary sell-off caused by the events in East Asia, emerging
market debt remained the best performing bond market sector over the period,
followed by high yield and fully hedged non-U.S. dollar denominated sovereign
debt. With interest rates trading in a relatively narrow range for much of the
period, investors aggressively pursued yield opportunities.
INVESTMENT STRATEGY
Over the period under review, we underweighted the U.S. bond market in order to
pursue investment opportunities in foreign markets. Most notably, we held
positions in Poland and Mexico. Both of these countries continue to benefit
from strong economic fundamentals and remain committed to economic reform.
INVESTMENT PERFORMANCE
The following table shows how your Fund performed over the past six and
12-month periods. For comparison, we have included the Merrill Lynch 1 Year
Government Treasury Bond Index, a standard measure of the performance of a
basket of unmanaged short term debt securities, and the Lipper Short World
Multi-Market Income Funds Average, which reflects the average performance of 27
funds with similar investment objectives.
Over the six-month period under review, the Fund outperformed its benchmark and
its peers due to underweighting the U.S. market, which performed poorly
relative to other markets. Also, your Fund's holdings in the emerging markets,
Poland and Mexico, which outperformed
1
ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
the U.S. market, enhanced performance over the six-month period.
INVESTMENT RESULTS*
Periods Ended April 30, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE WORLD INCOME TRUST 2.75% 4.52%
MERRILL LYNCH 1 YEAR GOVERNMENT
TREASURY BOND INDEX 2.68% 6.14%
LIPPER SHORT WORLD MULTI-MARKET
INCOME FUNDS AVERAGE 1.87% 4.99%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
FUND'S NET ASSET VALUE AS OF APRIL 30, 1998. ALL FEES AND EXPENSES RELATED TO
THE OPERATION OF THE FUND HAVE BEEN DEDUCTED. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
THE UNMANAGED MERRILL LYNCH 1 YEAR GOVERNMENT TREASURY BOND INDEX IS
COMPRISED OF A SINGLE ISSUE PURCHASED AT THE BEGINNING OF THE MONTH AND HELD
FOR A FULL MONTH. AT THE END OF THE MONTH, THAT ISSUE IS SOLD AND ROLLED INTO A
NEWLY SELECTED ISSUE. THE ISSUE SELECTED AT EACH MONTH-END REBALANCING IS THE
OUTSTANDING TREASURY BILL WITH THE LONGEST MATURITY. THE LIPPER SHORT WORLD
MULTI-MARKET INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE OF 27 FUNDS FOR BOTH
THE SIX AND 12-MONTH PERIODS ENDED APRIL 30, 1998 THAT INVEST IN NON-U.S.
DOLLAR AND U.S. DOLLAR DEBT INSTRUMENTS. THE AVERAGE HAS GENERALLY SIMILAR
INVESTMENT OBJECTIVES TO YOUR FUND, ALTHOUGH SOME OF THE FUNDS MAY HAVE
SOMEWHAT DIFFERENT INVESTMENT POLICIES. AN INVESTOR CANNOT INVEST DIRECTLY IN
THE INDEX OR AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
As of April 30, 1998, the Fund's total investments based on issuing country
were distributed as follows:
PORTFOLIO DISTRIBUTION BY COUNTRY
MEXICO 5.7%
POLAND 9.2%
UNITED STATES 85.1%
ECONOMIC OUTLOOK
We anticipate global growth will be slower, and inflation pressures will
continue to be muted, as Asia exports cheaper goods to the world and imports
less from abroad. With global inflation under control and global growth at
risk, we expect monetary policy to remain substantially unchanged for most of
1998 in the U.S., Germany and Japan. In the U.S., growth is expected to slow
throughout the second quarter and perhaps into the third. U.S. interest rates
should remain in their recent trading range, with the 30 year Treasury yield
centered around 6.0%.
European growth is expected to increase over 1997 levels in most countries,
reaching 2.5% to 3.0%, despite the drag on growth resulting from weakness in
Asia. In Japan, policy inaction and the economic consequences of Asia's
slowdown are damaging investor confidence and further weakening Japan's growth
prospects; Japan's GDP is expected to be negative in 1998. There are concerns
that a deflationary cycle could take hold in Japan. Japanese investors will
focus on the effect of the latest stimulus package on consumers and on the need
for structural reforms to encourage efficient capital flows.
Emerging market debt price volatility remains quite high, as renewed turmoil in
Asia has heightened investor concern about all higher yielding asset classes.
However, we remain positive in our view on Latin America. Although tougher
competition and falling demand from Asia will slow Latin American economies, we
still anticipate healthy growth in the region. In particular, we favor Mexico.
In Eastern Europe, we continue to view Poland
2
ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
positively because it continues to have strong economic fundamentals and
remains committed to economic reform. Also, Poland will likely be the first
Eastern European country to join the European Union.
Thank you for your continued interest and investment in Alliance World Income
Trust. We look forward to reporting to you again on market activity and the
Fund's investment results in coming periods.
Sincerely,
John D. Carifa
Chairman and President
Douglas Peebles
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.
3
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
Alliance World Income Trust seeks the highest level of current income through
investment in a portfolio of high-quality debt securities having remaining
maturities of not more than one year. It invests primarily in a non-diversified
portfolio of debt securities denominated in the U.S. dollar and selected
foreign currencies. While the Fund normally will maintain a substantial portion
of its assets in debt securities denominated in foreign currencies, the Fund
will invest at least 35% of its net assets in U.S. dollar-denominated
securities.
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 1998
One Year 4.52%
Five Years 2.27%
Since Inception* 2.71%
SEC Yield** 4.21%
The average annual total returns reflect reinvestment of dividends and/or
capital gains distributions in additional shares. 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: 12/90.
** Yield is for the 30 days ended April 30, 1998.
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ------------------------------------------------------------------------
MEXICO-5.7%
GOVERNMENT OBLIGATION-5.7%
Mexican Treasury Bill
22.85%, 6/04/98 (a)(b)
(cost $1,129,405) MXP 9,159 $ 1,060,748
POLAND-9.1%
GOVERNMENT OBLIGATION-9.1%
Government of Poland Treasury Bill
23.05%, 9/30/98 (a)(b)
(cost $1,695,066) PLN 6,300 1,697,745
UNITED STATES-85.0%
CERTIFICATES OF DEPOSIT-32.3%
Canadian Imperial Bank of Commerce
5.72%, 5/27/98 (a) US$ 1,500 1,500,000
Deutsche Bank AG
5.75%, 7/29/98 (a) 1,500 1,500,000
Morgan Guaranty Trust Co.
5.87%, 8/06/98 (a) US$ 1,500 1,501,034
Westdeutsche Landesbank
5.72%, 8/26/98 (a) 1,500 1,500,000
------------
6,001,034
TIME DEPOSIT-52.7%
Union Bank of Switzerland
5.50%, 5/01/98 9,800 9,800,000
Total United States Securities
(cost $15,801,034) 15,801,034
TOTAL INVESTMENTS-99.8%
(cost $18,625,505) 18,559,527
Other assets less liabilities-0.2% 36,196
NET ASSETS-100% $18,595,723
(a) Securities, or portion thereof, with an aggregate market value of
$8,759,527 have been segregated to collateralize forward exchange currency
contracts.
(b) Annualized yield to maturity at purchase date.
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $18,625,505) $18,559,527
Cash 13,117
Receivable for investment securities sold 9,801,443
Interest receivable 200,510
Unrealized appreciation of forward exchange currency contracts 22,066
Receivable for capital stock sold 10,000
Total assets 28,606,663
LIABILITIES
Payable for investment securities purchased 9,800,000
Payable for capital stock redeemed 51,007
Dividend payable 25,768
Distribution fee payable 9,995
Advisory fee payable 7,979
Accrued expenses 116,191
TOTAL LIABILITIES 10,010,940
NET ASSETS $18,595,723
COMPOSITION OF NET ASSETS
Capital stock, at par $23,009
Additional paid-in capital 23,108,985
Distributions in excess of net investment income (227,489)
Accumulated net realized loss on investments and foreign
currency transactions (4,264,870)
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (43,912)
$18,595,723
NET ASSET VALUE PER SHARE (based on 11,504,322
shares outstanding) $1.62
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest $776,060
EXPENSES
Advisory fee $65,978
Distribution fee 91,355
Administrative 62,885
Custodian 55,395
Audit and legal 53,853
Transfer agency 22,738
Registration 13,506
Directors' fees 10,955
Printing 9,905
Miscellaneous 2,230
Total expenses 388,800
Less: Fees waived by Adviser and Distributor (38,573)
Net expenses 350,227
Net investment income 425,833
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions (1,978)
Net realized loss on foreign currency transactions (22,927)
Net change in unrealized appreciation (depreciation) of:
Investments 111,051
Foreign currrency denominated assets and liabilities 28,194
Net gain on investments and foreign currency transactions 114,340
NET INCREASE IN NET ASSETS FROM OPERATIONS $540,173
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
----------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 425,833 $ 1,797,409
Net realized loss on investments and foreign
currency transactions (24,905) (68,961)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 139,245 (301,725)
Net increase in net assets from operations 540,173 1,426,723
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (587,636) (1,502,762)
Tax return of capital -0- (1,092,302)
CAPITAL STOCK TRANSACTIONS
Net decrease (2,886,046) (22,192,637)
Total decrease (2,933,509) (23,360,978)
NET ASSETS
Beginning of year 21,529,232 44,890,210
End of period $18,595,723 $21,529,232
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance World Income Trust, Inc. (the "Fund"), was incorporated in the State
of Maryland on October 29, 1990 as a non-diversified, open-end management
investment company. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sale price, if there was no sale on such
day, the last bid price quoted on such day. If no bid prices are quoted, then
the security is valued at the mean of the bid and asked prices as obtained on
that day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the United States
over-the-counter market and securities listed on a national securities exchange
whose primary market is believed to be over-the-counter are valued at the mean
of the closing bid and asked prices provided by two or more dealers regularly
making a market in such securities. U.S. government securities and other debt
securities which mature in 60 days or less are valued at amortized cost unless
this method does not represent fair value. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by, or in accordance with procedures approved by, the Board of
Directors. Fixed income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities.
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 on the valuation date. 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 earned or accrued.
Net realized gain and losses on foreign currency transactions represent foreign
exchange gains and losses from sales and maturities of securities and forward
exchange currency contracts, holdings of foreign currencies, exchange gains and
losses realized between the trade and settlement dates on investment
transactions, and the difference between the amounts of interest recorded on
the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net change in unrealized appreciation (depreciation) of foreign currency
denominated assets and liabilities represents net currency gains and losses
from valuing foreign currency denominated assets and liabilities at period end
exchange rates.
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 any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discounts as an
adjustment to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of
.65 of 1% of the average daily net assets of the Fund. Such fee is accrued
daily and paid monthly. For the six months ended April 30, 1998, the Adviser
agreed to waive a portion of its advisory fee. The amount of such fee waiver
was $16,241.
Pursuant to the advisory agreement, the Fund paid $62,885 to the Adviser
representing reimbursement of the cost of certain legal and accounting services
provided to the Fund by the Adviser for the six months ended April 30, 1998.
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 $14,509 for the six months ended April 30, 1998.
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 .90 of 1% of the average daily net assets of the Fund. The fees
are accrued daily and paid monthly. For the six months ended April 30, 1998,
the Distributor agreed to waive a portion of its distribution fee. The amount
of such fee waiver was $22,332. The Agreement provides that the Distributor
will use the payments in their entirety for distribution assistance and
promotional activities. The Agreement also provides that the Adviser may use
its own resources to finance the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
At April 30, 1998, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $2,679 and gross
unrealized depreciation of investments was $68,657 resulting in net unrealized
depreciation of $65,978 (excluding foreign currency transactions).
For federal income tax purposes, the Fund had a capital loss carryforward at
October 31, 1997 of $4,239,965 of which $293,011 expires in the year 1998,
$104,550 expires in the year 1999, $833,703 expires in the year 2000, $240,553
expires in the year 2001, $2,640,608 expires in the year 2002, $47,400 expires
in the year 2004, and $80,140 expires in the year 2005.
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio
holdings, to hedge certain firm purchase and sale commitments denominated in
foreign currencies and for investment purposes. A forward exchange currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a negotiated forward rate. The gain or loss arising from the difference
between the original contracts and the closing of such contracts is included in
realized gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value equal
to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
10
ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
At April 30, 1998, the Fund had outstanding forward exchange currency
contracts, as follows:
CONTRACT U.S. VALUE ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- -------------- ------- -------------
FORWARD EXCHANGE CURRENCY
BUY CONTRACTS
Deutsche Marks,
settling 6/17/98 1,050 $577,834 $586,666 $ 8,832
New Zealand Dollars,
settling 6/17/98 375 209,138 207,486 (1,652)
FORWARD EXCHANGE CURRENCY
SALE CONTRACTS
British Pounds,
settling 5/18/98 250 421,798 417,837 3,961
Deutsche Marks,
settling 8/20/98 243 135,841 136,240 (399)
Japanese Yen,
settling 6/17/98 74,813 581,863 568,553 13,310
New Zealand Dollars,
settling 6/17/98 375 205,500 207,486 (1,986)
----------
$22,066
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. 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 of the underlying
security or currency 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
security or currency purchased by the Fund.
In writing an option, the Fund bears the market risk of an unfavorable change
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. There were no transactions in written options for the six months ended
April 30, 1998.
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 3,000,000,000 shares of $.002 par value capital stock authorized.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
Shares sold 116,950 1,098,101 $189,008 $ 1,819,549
Shares issued in
reinvestment of
dividends and
distributions 250,376 632,580 404,609 1,041,737
Shares redeemed (2,154,529) (15,377,403) (3,479,663) (25,053,923)
Net decrease (1,787,203) (13,646,722) $(2,886,046) $(22,192,637)
12
FINANCIAL HIGHLIGHTS ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.62 $ 1.67 $ 1.66 $ 1.88 $ 1.90 $ 1.91
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03(a) .07(a) .09(a) .11(a) .18 .22
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions -0- (.01) .02 (.23) (.12) (.16)
Net increase (decrease) in net asset
value from operations .03 .06 .11 (.12) .06 .06
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.03) (.06) (.10) -0- (.05) (.07)
Tax return of capital -0- (.05) -0- (.10) (.03) -0-
Total dividends and distributions (.03) (.11) (.10) (.10) (.08) (.07)
Net asset value, end of period $1.62 $1.62 $1.67 $1.66 $1.88 $1.90
TOTAL RETURN:
Total investment return based on net
asset value (b) 2.75% 3.47% 6.98% (6.35)% 3.27% 3.51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,596 $21,529 $44,890 $55,778 $103,310 $149,623
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.45%(c) 2.25% 2.10% 1.97% 1.70% 1.54%
Expenses, before waivers/reimbursements 3.83%(c) 2.63% 2.48% 2.35% 2.08% 1.92%
Net investment income 4.20%(c) 4.35% 5.37% 6.46% 3.96% 5.14%
</TABLE>
Based on average shares outstanding.
(b) 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.
(c) Annualized
13
ALLIANCE WORLD INCOME TRUST
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
DOUGLAS J. PEEBLES, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER AND CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITERS
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800)-221-5692
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
14
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 High Yield Fund
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 Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity 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 Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage 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
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
15
ALLIANCE WORLD INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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.
WITSR
