ALLIANCE
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MULTI-MARKET
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STRATEGY
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TRUST
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Annual Report
October 31, 1998
Alliance Capital [LOGO](R)
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LETTER TO SHAREHOLDERS Alliance Multi-Market Strategy Trust
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December 28, 1998
Dear Shareholder:
We are pleased to report to you on our strategy, performance and outlook for
Alliance Multi-Market Strategy Trust for the annual reporting period ended
October 31, 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 (0-5 year maturity) debt.
MARKET OVERVIEW
During the six-month period ended October 31, 1998, global markets suffered from
heightened concerns about recession as the financial and economic turmoil in
Asia spread to Russia and Latin America.
The U.S. bond market recorded positive returns during the six months ended
October 31, 1998 in an environment of moderating economic growth, falling
interest rates and low inflation. However, returns were dampened across all
non-Treasury sectors when the economic and financial turmoil spreading through
the emerging markets heightened investors' concerns about all credit sensitive
assets. Renewed volatility in Asia, and the collapse of the Russian financial
system in August, led to a sell-off across global credit sensitive bond and
stock markets. Investor confidence was slowly restored in October when the
Federal Reserve, along with other central banks, began cutting interest rates in
an effort to avoid slowing growth. During this volatile period, the U.S.
government sector, acting as a safe haven, posted the best return among the U.S.
bond market sectors, while the high yield sector posted the worst return.
In other developed markets outside of the U.S., government bond returns were
augmented by investors' aversion to risk. Traditional safe haven markets
benefited from both the flight to quality and the increased probability of
monetary easing, while non-safe haven countries suffered from low liquidity.
On a hedged basis, only New Zealand and Japan posted stronger gains than the
U.S. Treasury market.
In Europe, slower than expected growth, combined with low inflation, led to
increased expectations of official interest rate cuts which drove yields lower.
All 11 first round European Monetary Union (EMU) countries posted strong returns
in both local and hedged terms. As the EMU inception date approached, the
marketplace became less discriminating in its treatment of these 11 markets
based on country specific fundamentals.
In the Dollar bloc countries (Australia, New Zealand and Canada) growth slowed
and inflation remained low as a result of falling commodity prices and falling
demand from Asia. The New Zealand bond market posted the strongest returns of
the three markets, as it continued to benefit from sharp rate cuts made by the
central bank to stop the economy from slipping into recession. In Canada, a weak
currency and low liquidity helped place the Canadian bond market as the worst
performing on both a local and hedged basis.
INVESTMENT STRATEGY
During the six-month period ended October 31, 1998, we underweighted the Fund's
portfolio in the U.S. bond market to pursue investment opportunities in foreign
markets. We maintained our investments in Europe, including Germany, Italy,
Norway and Denmark. We also increased our weighting in France as lower interest
rates and slowing growth benefited the bond market in that region. In addition,
we maintained our Mexican Treasuries.
INVESTMENT PERFORMANCE
The following table shows how your Fund performed during the past six- and
12-month periods. In previous reports, we have shown your Fund's performance in
comparison to the Merrill Lynch 1-3 Year Government Bond Index, a standard
measure of the performance of a basket of unmanaged debt securities, and the
Lipper Short World Multi-Market Income Funds Average, which reflects the average
performance of 26 funds with similar investment objectives. We are changing the
Fund's benchmark index from the Merrill Lynch 1-3 Year Government Bond Index to
the Merrill Lynch 1 - 5 Year Government Bond Index because the 1 - 5 Year Index
more closely reflects the average maturity of the securities in which your Fund
invests. This report will include both Merrill Lynch Indices, however, your next
report for the period ended April 30, 1999 will only show the 1 - 5 Year Index.
1
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Alliance Multi-Market Strategy Trust
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INVESTMENT RESULTS*
Periods Ended October 31, 1998
Total Returns
6 Months 12 Months
--------------- ---------------
Alliance Multi-Market
Strategy Trust
Class A 2.79% 6.90%
Class B 2.46% 6.24%
Class C 2.32% 6.10%
Merrill Lynch 1-3 Year
Government Bond
Index 4.68% 7.70%
Merrill Lynch 1-5 Year
Government Bond
Index 5.58% 8.72%
Lipper Short World
Multi-Market
Income Funds
Average 2.25% 4.25%
* The Fund's investment results represent total returns and are based on the
net asset value of each class of shares as of October 31, 1998. 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. Past performance is no guarantee of future
results.
The unmanaged Merrill Lynch 1-3 Year Government Bond Index consists of
short-term U.S. Treasury securities maturing in 1 to 3 years. The
unmanaged Merrill Lynch 1-5 Year Government Bond Index consists of
short-term U.S. Treasury securities maturing in 1 to 5 years. The
unmanaged Lipper Short World Multi-Market Income Funds Average reflects
the performance of 26 funds for both the six and 12-month periods ended
October 31, 1998. The Average has generally similar investment objectives
to your Fund, although investment policies for the various funds may
differ. An investor cannot invest directly in the Index or Average.
Additional investment results appear on page 4.
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As of October 31, 1998, the Fund's total investments based on issuing country
were distributed as follows:
PORTFOLIO DISTRIBUTION BY COUNTRY
[The following table was represented as a pie chart in the printed material.]
United States 23.06%
Germany 18.74%
Italy 13.64%
France 9.45%
Australia 7.84%
Denmark 7.40%
Mexico 6.22%
Sweden 4.61%
Norway 4.53%
Canada 4.51%
During the past six- and 12-month periods ended October 31, 1998, your Fund
underperformed both the Merrill Lynch 1-3 Year Government Bond Index and the
Merrill Lynch 1 -5 Year Government Bond Index which are U.S.-only based indices.
However, the Fund outperformed the Lipper Short World Multi-Market Income Funds
Average which invests in similar U.S. and non-U.S. markets to your Fund.
For the six-month period under review, the U.S. outperformed most global
markets. The U.S. benefited over the period as investors, in a flight to quality
caused by global turmoil, preferred the safety offered by the U.S. bond market.
Our underweighting in the U.S. dampened performance. However, our country
selection and country weighting outside of the U.S. enhanced performance and
allowed us to outperform other similarly managed accounts.
ECONOMIC OUTLOOK
While the outlook for global recession has diminished, we continue to project a
slower growth trajectory for the global economy in 1999.
In the U.S., economic activity is expected to slow further, with growth
estimates centered around 2% for the next year. Further interest rate reductions
to sustain growth by
2
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Alliance Multi-Market Strategy Trust
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the Federal Reserve are likely in 1999. U.S. interest rates, as well as
inflation, will remain low and the U.S. Treasury market will continue to provide
a safe haven during times of volatility.
In Europe, growth is expected to slow to less than 2% in 1999 from 2.4% in 1998.
Inflation should remain benign. Recent interest rate reductions in Europe may be
followed by additional rate cuts in 1999 to offset the effects of the global
slowdown. Global policy makers should continue their efforts at reflating the
world's economy. Deflationary pressures, slow demand from Asia, and falling
commodity prices could be countered by further easing of monetary policy.
We believe the current climate of slowing global growth and declining interest
rates form a favorable environment conducive for the Fund.
Thank you for your continued interest and investment in Alliance Multi-Market
Strategy Trust. We look forward to reporting to you again on market activity and
the Fund's investment results in coming periods.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Douglas Peebles
Douglas Peebles
Vice President
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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.
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3
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INVESTMENT OBJECTIVE AND POLICIES Alliance Multi-Market Strategy Trust
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Alliance Multi-Market Strategy Trust seeks the highest level of current income
that is available from a portfolio of high-quality debt securities having
remaining maturities of not more than five years. It invests primarily in a
non-diversified portfolio of debt securities denominated in the U.S. dollar and
selected foreign currencies. The Fund expects to maintain at least 70% of its
assets in debt securities denominated in foreign currencies, but not more than
25% of the Fund's total assets may be invested in debt securities denominated in
a single currency other than the U.S. dollar.
INVESTMENT RESULTS
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NAV and SEC Total Returns as of October 31, 1998
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CLASS A SHARES
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Without With
Sales Charge Sales Charge
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One Year 6.90% 2.30%
Five Years 4.08% 3.17%
Since Inception* 4.04% 3.44%
SEC Yield** 4.14%
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CLASS B SHARES
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Without With
Sales Charge Sales Charge
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One Year 6.24% 3.42%
Five Years 3.25% 3.25%
Since Inception*(a) 3.38% 3.38%
SEC Yield** 3.56%
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CLASS C SHARES
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Without With
Sales Charge Sales Charge
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One Year 6.10% 5.16%
Five Years 3.24% 3.24%
Since Inception* 3.94% 3.94%
SEC Yield** 3.38%
SEC Total Returns as of the most recent quarter-end
(September 30, 1998)
Class A Class B Class C
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1 Year 1.18% 2.24% 4.11%
5 Years 3.39% 3.45% 3.50%
Since Inception* 3.40% 3.34%(a) 3.95%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (3% year 1, 2% year 2, 1% year 3, 0% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000.
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.
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* Inception: 5/29/91, Class A and Class B; 5/3/93, Class C.
** SEC Yields are based on SEC guidelines and are calculated on 30 days ended
October 31, 1998.
(a) Assumes conversion of Class B shares into Class A shares after 6 years.
4
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Alliance Multi-Market Strategy Trust
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ALLIANCE MULTI-MARKET STRATEGY TRUST
GROWTH OF A $10,000 INVESTMENT
5/31/91* TO 10/31/98
[The following table was represented as a line chart in the printed material.]
Lipper Short
Merrill Lynch Merrill Lynch World Multi- Multi-Market
1-5 Year Government 1-3 Year Government Market Income Strategy
Bond Index Bond Index Funds Average Trust
------------------- ------------------- ------------- ------------
5/31/91
10/31/91
10/31/92
10/31/93
10/31/94
10/31/95
10/31/96
10/31/97
10/31/98 $16,738 $16,691 $13,625 $12,853
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Multi-Market Strategy Trust Class A shares (from 5/31/91 to 10/31/98)
as compared to the performance of appropriate broad-based indices. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B and Class C shares will vary from the
results shown above due to differences in expenses 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 Merrill Lynch 1-3 Year Government Bond Index is composed of U.S.
Government agency and Treasury securities with maturities of one to three years.
The Merrill Lynch 1-5 Year Government Bond Index is composed of U.S.
Government agency and Treasury securities with maturities of one to five years.
The Lipper Short World Multi-Market Income Funds Average reflects
performance of 9 funds. These funds have generally similar investment objectives
to Alliance Multi-Market Strategy Trust, although the investment policies of
some funds included in the average may vary.
When comparing Alliance Multi-Market Strategy Trust to the indices and
average shown above, you should note that no charges or expenses are reflected
in the performance of the indices. Lipper results include fees and expenses.
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* Month-end nearest to Fund's Class A share inception date of 5/29/91.
5
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PORTFOLIO OF INVESTMENTS
October 31, 1998 Alliance Multi-Market Strategy Trust
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Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------
AUSTRALIA-7.7%
DEBT OBLIGATIONS-7.7%
Deutsche Bank AG
6.00%, 7/05/00 (a)....... AU$ 8,000 $ 5,092,036
State Bank of South Wales
8.63%, 8/20/01 (a)....... 6,000 4,104,141
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Total Australian Securities
(cost $10,486,171)....... 9,196,177
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CANADA-4.4%
GOVERNMENT
OBLIGATION-4.4%
Government of Canada
5.25%, 9/01/03 (a)
(cost $5,348,888)........ CA$ 8,000 5,294,621
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DENMARK-7.3%
GOVERNMENT
OBLIGATION-7.3%
Kingdom of Denmark
9.00%, 11/15/00 (a)
(cost $9,941,782)........ DKK 50,000 8,684,854
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FRANCE-9.3%
GOVERNMENT
OBLIGATIONS-9.3%
Government of France
4.50%, 7/12/03 (a)....... FRF 31,000 5,743,633
7.75%, 4/12/00 (a)....... 28,000 5,341,492
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Total French Securities
(cost $10,464,535)....... 11,085,125
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GERMANY-18.5%
DEBT OBLIGATIONS-13.5%
Bayerische Landesbank
Girozentrale
5.75%, 2/28/01 (a)....... US$ 5,000 5,072,245
Bayerische Vereinsbank
Finansiering
5.25%, 5/17/01 (a)....... DEM 7,400 4,642,033
Deutsche Hypothekenbank
5.75%, 10/02/01 (a)...... 10,000 6,375,657
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16,089,935
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GOVERNMENT
OBLIGATION-5.0%
Government of Germany
8.00%, 7/22/02 (a)....... DEM 8,500 5,909,406
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Total German Securities
(cost $21,848,162)....... 21,999,341
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ITALY-13.4%
GOVERNMENT
OBLIGATIONS-13.4%
Republic of Italy
6.00%, 2/15/00 (a)....... ITL 10,400,000 6,530,561
6.25%, 5/15/02 (a)....... 14,400,000 9,479,095
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Total Italian Securities
(cost $14,070,634)....... 16,009,656
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MEXICO-6.1%
GOVERNMENT
OBLIGATION-6.1%
Mexican Treasury Bill
21.93%, 6/03/99 (a)(b)
(cost $8,926,727)........ MXP 89,121 7,295,934
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NORWAY-4.5%
GOVERNMENT
OBLIGATION-4.5%
Kingdom of Norway
7.00%, 5/31/01 (a)
(cost $6,198,983)........ NOK 38,000 5,312,612
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SWEDEN-4.5%
GOVERNMENT
OBLIGATION-4.5%
Kingdom of Sweden
10.25%, 5/05/03 (a)
(cost $5,374,100)........ SEK 34,000 5,407,546
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UNITED STATES-22.7%
DEBT OBLIGATION-3.5%
Morgan Guaranty Trust Co.
6.38%, 3/26/01 (a)....... US$ 4,000 4,136,008
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GOVERNMENT AGENCY
OBLIGATION-3.6%
FNMA Global
7.25%, 6/20/02 (a)....... NZ$ 7,850 4,296,226
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GOVERNMENT
OBLIGATION-6.7%
U.S. Treasury Bill
Zero coupon, 6/24/99..... US$ 8,250 8,038,033
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6
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Alliance Multi-Market Strategy Trust
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Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------
TIME DEPOSITS-8.9%
Dresdner Bank
5.56%, 11/02/98.......... US$ 3,600 $ 3,600,000
Rabo Bank
5.69%, 11/02/98.......... 3,500 3,500,000
Republic National Bank of
New York
5.50%, 11/02/98.......... 3,500 3,500,000
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10,600,000
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Total United States
Securities
(cost $27,996,555)....... 27,070,267
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TOTAL INVESTMENTS-98.4%
(cost $120,656,537) ..... $ 117,356,133
Other assets less
liabilities-1.6%......... 1,946,714
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NET ASSETS-100%............. $ 119,302,847
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(a) Securities, or portion thereof, with an aggregate market value of
$92,151,759 have been segregated to collateralize forward exchange
currency contracts.
(b) Annualized yield to maturity at purchase date.
Glossary:
FNMA - Federal National Mortgage Association
See notes to financial statements.
7
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STATEMENT OF ASSETS AND LIABILITIES
October 31, 1998 Alliance Multi-Market Strategy Trust
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<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $120,656,537)................................ $ 117,356,133
Cash ................................................................................. 76,678
Interest receivable.................................................................... 2,452,092
Unrealized appreciation of forward exchange currency contracts......................... 363,999
Receivable for capital stock sold...................................................... 162,929
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Total assets........................................................................... 120,411,831
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LIABILITIES
Dividend payable....................................................................... 333,160
Payable for capital stock redeemed..................................................... 275,026
Advisory fee payable................................................................... 60,443
Distribution fee payable............................................................... 41,606
Accrued expenses and other liabilities................................................. 398,749
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Total liabilities...................................................................... 1,108,984
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NET ASSETS................................................................................ $ 119,302,847
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COMPOSITION OF NET ASSETS
Capital stock, at par.................................................................. $ 17,966
Additional paid-in capital............................................................. 148,892,245
Distributions in excess of net investment income....................................... (3,327,129)
Accumulated net realized loss on investments and foreign currency transactions......... (23,443,984)
Net unrealized depreciation of investments and foreign currency denominated assets
and liabilities..................................................................... (2,836,251)
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$ 119,302,847
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CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share ($95,568,374 / 14,398,527 shares of
capital stock issued and outstanding)............................................... $6.64
Sales Charge--4.25% of public offering price........................................... .29
-----
Maximum offering price................................................................. $6.93
=====
Class B Shares
Net asset value and offering price per share ($7,216,950 / 1,084,367 shares of
capital stock issued and outstanding)............................................... $6.66
=====
Class C Shares
Net asset value and offering price per share ($16,517,523 / 2,483,284 shares of
capital stock issued and outstanding)............................................... $6.65
=====
</TABLE>
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See notes to financial statements.
8
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STATEMENT OF OPERATIONS
Year Ended October 31, 1998 Alliance Multi-Market Strategy Trust
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest.................................................... $ 9,272,305
EXPENSES
Advisory fee................................................ $ 681,090
Distribution fee - Class A.................................. 297,398
Distribution fee - Class B.................................. 128,290
Distribution fee - Class C.................................. 15,774
Transfer agency............................................. 359,292
Custodian................................................... 218,126
Administrative.............................................. 128,543
Audit and legal............................................. 108,519
Printing.................................................... 52,587
Registration................................................ 40,880
Directors' fees............................................. 32,039
Miscellaneous............................................... 13,882
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Total expenses.............................................. 2,076,420
Less: expense offset arrangement (see Note B)............... (14,591)
-----------
Net expenses................................................ 2,061,829
------------
Net investment income....................................... 7,210,476
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions................ 204,548
Net realized loss on foreign currency transactions.......... (2,348,178)
Net change in unrealized depreciation of:
Investments.............................................. 1,054,695
Foreign currency denominated assets and liabilities...... 1,228,633
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Net gain on investments and foreign currency transactions... 139,698
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................... $ 7,350,174
============
</TABLE>
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See notes to financial statements.
9
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STATEMENT OF CHANGES IN NET ASSETS Alliance Multi-Market Strategy Trust
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, October 31,
1998 1997
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income....................................................... $ 7,210,476 $ 8,855,944
Net realized gain (loss) on investments and foreign currency transactions... (2,143,630) 8,391,096
Net change in unrealized depreciation of investments and foreign
currency denominated assets and liabilities.............................. 2,283,328 (6,614,322)
------------- -------------
Net increase in net assets from operations.................................. 7,350,174 10,632,718
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A.................................................................. (6,215,407) (4,899,179)
Class B.................................................................. (912,135) (3,883,236)
Class C.................................................................. (82,934) (73,529)
Distributions in excess of net investment income
Class A.................................................................. (6,230,346) (2,095,730)
Class B.................................................................. (914,327) (1,692,062)
Class C.................................................................. (83,132) (32,833)
Tax return of capital
Class A.................................................................. (942,328) -0-
Class B.................................................................. (138,290) -0-
Class C.................................................................. (12,574) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease)..................................................... 199,282 (28,950,404)
------------- -------------
Total decrease.............................................................. (7,982,017) (30,994,255)
NET ASSETS
Beginning of year........................................................... 127,284,864 158,279,119
------------- -------------
End of year (including undistributed net investment income of
$6,044,326 at October 31, 1997).......................................... $ 119,302,847 $ 127,284,864
============= =============
</TABLE>
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See notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1998 Alliance Multi-Market Strategy Trust
================================================================================
NOTE A: Significant Accounting Policies
Alliance Multi-Market Strategy Trust, Inc. (the "Fund"), was incorporated in the
State of Maryland 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% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase will be subject to a contingent deferred
sales charge of 1%. Class B shares are sold with a contingent deferred sales
charge which declines from 3.0% to zero depending on the period of time the
shares are held. Class B shares will automatically convert to Class A shares six
years after the end of the calendar month of purchase. Class C shares are
subject to a contingent deferred sales charge of 1.0% on redemptions made within
the first year after purchase. All three classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. 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 or, 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.
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 gains or 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.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.) Alliance Multi-Market Strategy Trust
================================================================================
4. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date the 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. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's Class B
and Class C shares bear higher distribution and transfer agent fees than Class A
shares.
6. 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. During the current fiscal year, permanent differences
primarily due to foreign currency losses and a tax return of capital, resulted
in a net increase in distributions in excess of net investment income and a
corresponding decrease in additional paid-in capital and in accumulated net
realized loss on investments and in foreign currency transactions. This
reclassification had no effect on net assets.
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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 .60
of 1% of the average daily net assets of the Fund. Such fee is accrued daily and
paid monthly.
Pursuant to the advisory agreement, the Fund paid $128,543 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 31, 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 $194,021 for the year ended October 31, 1998.
In addition, for the year ended October 31, 1998, the Fund's expenses were
reduced by $14,591 under an expense offset arrangement with Alliance Fund
Services. Transfer Agency fees reported in this statement of operations exclude
these credits.
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 $2,987 from the sale of Class A shares and $12,234,
and $1,638 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B and Class C shares, respectively, for the year ended
October 31, 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 .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 both 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 $9,716,694 and $619,498 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
12
<PAGE>
Alliance Multi-Market Strategy Trust
================================================================================
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.
- --------------------------------------------------------------------------------
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government obligations) aggregated $15,943,351 and $29,110,616,
respectively for the year ended October 31, 1998. There were purchases of
$5,689,922 and sales of $5,876,406 of U.S. government and government agency
obligations for the year ended October 31, 1998.
At October 31, 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 $3,295,313 and
gross unrealized depreciation of investments was $6,595,717 resulting in net
unrealized depreciation of $3,300,404 (excluding foreign currency transactions).
At October 31, 1998, the Fund had a capital loss carryforward of $27,690,413 of
which $1,283,783 expires in the year 2000, $4,570,679 expires in the year 2001,
$11,533,613 expires in the year 2002, $10,215,734 expires in the year 2003,
$80,140 expires in the year 2004, and $6,464 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 sales commitments denominated in foreign
currencies, and for investment purposes. A forward exchange currency contract is
a commitment to purchase or sell a foreign currency on 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 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 of the
Fund in that particular currency contract.
At October 31, 1998, the Fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
U.S. $
Contract Value on U.S. $ Unrealized
Amount Origination Current Appreciation
(000) Date Value (Depreciation)
----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Forward Exchange Currency
Buy Contracts
Deutsche Marks,
settling 11/27/98-12/18/98........... 20,518 $ 12,474,954 $ 12,411,237 $ (63,717)
Japanese Yen,
settling 11/19/98.................... 408,800 3,470,289 3,515,795 45,506
Forward Exchange Currency
Sale Contracts
Australian Dollars,
settling 1/13/99..................... 17,127 10,579,860 10,720,921 (141,061)
</TABLE>
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.) Alliance Multi-Market Strategy Trust
================================================================================
<TABLE>
<CAPTION>
U.S. $
Contract Value on U.S. $ Unrealized
Amount Origination Current Appreciation
(000) Date Value (Depreciation)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Canadian Dollars,
settling 11/23/98.................... 8,313 $ 5,376,519 $ 5,387,191 $ (10,672)
Danish Krona,
settling 11/30/98.................... 55,000 8,745,707 8,738,623 7,084
Deutsche Marks,
settling 12/18/98.................... 83,630 51,149,837 50,602,954 546,883
French Francs,
settling 12/18/98.................... 26,444 4,889,282 4,769,786 119,496
Italian Lira,
settling 11/25/98.................... 12,660,183 7,781,305 7,727,119 54,186
Japanese Yen,
settling 11/19/98.................... 408,800 3,514,745 3,515,795 (1,050)
New Zealand Dollars,
settling 11/17/98.................... 7,880 4,065,028 4,174,460 (109,432)
Swedish Krona,
settling 11/19/98.................... 30,671 3,848,282 3,931,506 (83,224)
-----------
$ 363,999
===========
</TABLE>
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 year ended October 31, 1998.
3. Interest Rate Swap Agreements
The Fund enters into currency and interest rate swaps to protect itself from
foreign currency and interest rate fluctuations on the underlying debt
instruments. A swap is an agreement that obligates two parties to exchange a
series of cash flows at specified intervals based upon or calculated by
reference to changes in specified prices or rates for a specified amount of an
underlying asset. The pay-ment flows are usually netted against each other,
with the difference being paid by one party to the other.
14
<PAGE>
Alliance Multi-Market Strategy Trust
================================================================================
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by the
failure of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may arise
from unanticipated movements in interest rates or in the value of the foreign
securities or currencies.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of
investments are recorded for financial statement purposes as unrealized
appreciation or depreciation of investments. Realized gains and losses from
terminated swaps are included in net realized gains on investment transactions.
There were no outstanding currency or interest rate swap contracts at October
31, 1998.
- --------------------------------------------------------------------------------
NOTE E: Capital Stock
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares. Each
class consists of 3,000,000,000 authorized shares. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
----------------------------------------- -----------------------------------------
SHARES AMOUNT
----------------------------------------- -----------------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1998 1997 1998 1997
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............................. 530,311 516,722 $ 3,571,273 $ 3,728,611
Shares issued in reinvestment of
dividends............................ 449,493 211,609 3,054,490 1,529,106
Shares converted from Class B........... 3,186,541 5,542,644 21,941,497 39,662,519
Shares redeemed......................... (3,289,006) (2,268,565) (22,364,893) (16,382,016)
----------------- ----------------- ----------------- -----------------
Net increase............................ 877,339 4,002,410 $ 6,202,367 $ 28,538,220
================= ================= ================= =================
Class B
Shares sold............................. 626,552 509,209 $ 4,228,522 $ 3,686,703
Shares issued in reinvestment of
dividends............................ 97,710 176,547 668,814 1,277,395
Shares converted to Class A............. (3,186,541) (5,542,644) (21,941,497) (39,662,519)
Shares redeemed......................... (665,735) (3,169,143) (4,572,168) (22,944,703)
----------------- ----------------- ----------------- -----------------
Net decrease............................ (3,128,014) (8,026,031) $ (21,616,329) $ (57,643,124)
================= ================= ================= =================
Class C
Shares sold............................. 214,001 114,774 $ 1,435,335 $ 838,047
Shares issued in reinvestment of
dividends............................ 9,006 7,279 61,303 52,557
Shares issued in connection with
the acquisition of World Income
Trust................................ 2,285,690 -0- 15,429,617 -0-
Shares redeemed......................... (194,644) (101,777) (1,313,011) (736,104)
----------------- ----------------- ----------------- -----------------
Net increase............................ 2,314,053 20,276 $ 15,613,244 $ 154,500
================= ================= ================= =================
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.) Alliance Multi-Market Strategy Trust
================================================================================
NOTE F: Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility") to
provide short-term financing if necessary, subject to certain restrictions in
connection with abnormal redemption activity. Commitment fees related to the
Facility are paid by the participating funds and are included in the
miscellaneous expense in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 1998.
- --------------------------------------------------------------------------------
NOTE G: Acquisition of World Income Trust
On October 16, 1998 the Fund acquired all of the assets of World Income Trust
pursuant to the plan of reorganization approved by World Income Trust
shareholders on October 12, 1998. The acquisition was accomplished by a tax-free
exchange of 2,285,690 shares of the fund for 9,587,483 shares of World Income
Trust on October 16, 1998. The aggregate net assets of the Fund and World Income
Trust immediately before the acquisition were $103,915,311 and $15,130,026.
Immediately after the acquisition the combined net assets of the Fund amounted
to $119,045,337.
- --------------------------------------------------------------------------------
NOTE H: Subsequent Event
On November 13, 1998 the Fund acquired all of the assets of Alliance Short-Term
Multi-Market Trust pursuant to the plan of reorganization approved by Short-Term
Multi-Market Trust shareholders on November 9, 1998. The acquisition was
accomplished by a tax-free exchange of 62,472,861 shares of the Fund for
55,807,704 shares of Short-Term Multi Market Trust on November 13, 1998. The
aggregate net assets of the Fund and Short-Term Multi-Market Trust immediately
before the acquisition were $118,348,530 and $413,049,483. Immediately after the
acquisition the combined net assets of the Fund amounted to $531,398,013.
16
<PAGE>
FINANCIAL HIGHLIGHTS Alliance Multi-Market Strategy Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
---------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.11 $ 7.23 $ 6.83 $ 8.04 $ 8.94
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income ................................ .44(a) .47(a) .59(a) .77(a) .85
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. .02 .08 .48 (1.31) (1.08)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ .46 .55 1.07 (.54) (.23)
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.44) (.47) (.67) -0- (.09)
Distributions in excess of net investment income ..... (.42) (.20) -0- -0- -0-
Tax return of capital ................................ (.07) -0- -0- (.67) (.58)
------- ------- ------- ------- -------
Total dividends and distributions .................... (.93) (.67) (.67) (.67) (.67)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 6.64 $ 7.11 $ 7.23 $ 6.83 $ 8.04
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (b) . 6.90% 7.82% 16.37% (6.47)% (2.64)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $95,568 $96,133 $68,776 $76,837 $52,385
Ratio to average net assets of:
Expenses .......................................... 1.74%(c) 1.58%(c) 1.64% 1.60% 1.41%
Expenses, excluding interest expense .............. 1.74% 1.58% 1.60%(d) 1.55%(d) 1.30%(d)
Net investment income ............................. 6.46% 6.50% 8.40% 8.56% 7.17%
Portfolio turnover rate .............................. 24% 173% 215% 400% 605%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 19.
17
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Multi-Market Strategy Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.11 $ 7.23 $ 6.83 $ 8.04 $ 8.94
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income ................................ .36(a) .42(a) .53(a) .44(a) .88
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. .05 .06 .47 (1.05) (1.18)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ .41 .48 1.00 (.61) (.30)
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.36) (.42) (.60) -0- (.08)
Distributions in excess of net investment income ..... (.43) (.18) -0- -0- -0-
Tax return of capital ................................ (.07) -0- -0- (.60) (.52)
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.86) (.60) (.60) (.60) (.60)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 6.66 $ 7.11 $ 7.23 $ 6.83 $ 8.04
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (b) . 6.24% 6.90% 15.35% (7.31)% (3.35)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $ 7,217 $ 29,949 $ 88,427 $116,551 $233,896
Ratio to average net assets of:
Expenses .......................................... 2.41%(c) 2.29%(c) 2.35% 2.29% 2.11%
Expenses, excluding interest expense .............. 2.41% 2.29% 2.31%(d) 2.22%(d) 2.01%(d)
Net investment income ............................. 5.64% 5.79% 7.69% 7.53% 6.44%
Portfolio turnover rate .............................. 24% 173% 215% 400% 605%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 19.
18
<PAGE>
Alliance Multi-Market Strategy Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.11 $ 7.23 $ 6.83 $ 8.04 $ 8.94
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income ................................ .25(a) .42(a) .54(a) .44(a) .46
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. .16 .07 .47 (1.04) (.75)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ .41 .49 1.01 (.60) (.29)
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.41) (.42) (.61) -0- (.09)
Distributions in excess of net investment income ..... (.42) (.19) -0- -0- -0-
Tax return of capital ................................ (.04) -0- -0- (.61) (.52)
------- ------- ------- ------- -------
Total dividends and distributions .................... (.87) (.61) (.61) (.61) (.61)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 6.65 $ 7.11 $ 7.23 $ 6.83 $ 8.04
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (b) . 6.10% 6.92% 15.36% (7.29)% (3.34)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $16,518 $ 1,203 $ 1,076 $ 786 $ 1,252
Ratio to average net assets of:
Expenses .......................................... 2.61%(c) 2.28%(c) 2.34% 2.29% 2.08%
Expenses, excluding interest expense .............. 2.61% 2.28% 2.30%(d) 2.24%(d) 1.99%(d)
Net investment income ............................. 5.28% 5.80% 7.62% 7.55% 6.10%
Portfolio turnover rate .............................. 240% 173% 215% 400% 605%
</TABLE>
- --------------------------------------------------------------------------------
(a) 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. Initial sales charge or
contingent deferred sales charge is not reflected in the calculation of
the total investment return.
(c) Ratio reflects expense offset arrangement with the Transfer Agent. For the
year ended October 31, 1998 and October 31, 1997, the net expense ratios
were 1.73% and 1.57% for Class A, 2.40% and 2.28% for Class B and 2.60%
and 2.27% for Class C shares, respectively.
(d) Interest expense includes commitment fees paid.
19
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS Alliance Multi-Market Strategy Trust
================================================================================
To the Shareholders and Board of Directors
Alliance Multi-Market Strategy Trust, Inc.
We have audited the accompanying statement of assets and liabilities of Alliance
Multi-Market Strategy Trust, Inc. (the "Fund"), including the portfolio of
investments, as of October 31, 1998, 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
October 31, 1998, 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 Multi-Market Strategy Trust, Inc. at October 31, 1998, 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
December 2, 1998
20
<PAGE>
Alliance Multi-Market Strategy 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 & Chief Financial Officer
Juan J. Rodriguez, Controller
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
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
TRANSFER AGENT
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
21
<PAGE>
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 U.S. Government Fund
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
Select Investors Series - Premier Portfolio
Growth & Income
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors 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
Institutional
Premier Growth
Quasar
Real Estate Investment
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
22
<PAGE>
(This page left intentionally blank.)
<PAGE>
---------------
ALLIANCE MULTI-MARKET STRATEGY TRUST BULK RATE
1345 Avenue of the Americas U.S. POSTAGE
New York, NY 10105 PAID
(800) 221-5672 New York, NY
Permit No. 7131
---------------
Alliance Capital [LOGO](R)
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.
ASTAR
