ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
ANNUAL REPORT
NOVEMBER 30, 1996
LETTER TO SHAREHOLDERS
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
January 3, 1997
Dear Shareholder:
During 1996, U.S. bond market returns were subdued. The market reacted
negatively to stronger-than-expected job growth as well as uncertainty about
whether the Federal Reserve would raise rates in an attempt to slow economic
growth. Across all major sectors of the bond market, shorter-duration
securities outperformed longer-duration securities as interest rates for all
maturities increased. Debt prices in Mexico and Argentina rose as economic
reforms in those countries continued to promote growth. In Canada, the market
finally recognized the sound economic policies being pursued by the government.
Canadian interest rates fell sharply, even as U.S. rates rose.
The table below shows the Alliance North American Government Income Trust's
total returns for the 6- and 12-month periods ended November 30, 1996. Also
shown are the returns for the overall bond market, represented by the Lehman
Brothers Aggregate Index, and the Lehman Brothers Intermediate-Term Government
Bond Index, which measures performance of bonds in the 1- to 10-year maturity
range. We are pleased to report that the Trust significantly outperformed both
indices.
INVESTMENT RESULTS*
TOTAL RETURNS FOR PERIODS ENDED
NOVEMBER 30, 1996
6-MONTHS 12-MONTHS
-------- ---------
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
Class A 16.83% 35.22%
Class B 16.30 33.96
Class C 16.30 33.96
LEHMAN BROTHERS AGGREGATE INDEX 7.31 6.07
LEHMAN BROTHERS INTERMEDIATE-TERM BOND INDEX 5.70 5.66
* THE TRUST'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD
AND ARE BASED ON THE NET ASSET VALUES OF 11/30/96. ALL FEES AND EXPENSES
RELATED TO THE OPERATION OF THE TRUST HAVE BEEN DEDUCTED, BUT NO ADJUSTMENT HAS
BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES ARE PURCHASED OR
REDEEMED. RETURNS FOR THE TRUST AND ITS COMPARATIVE INDICES INCLUDE THE
REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
The Lehman Brothers indices are unmanaged and do not reflect fees or expenses.
Additional performance information appears on page 4.
INVESTMENT STRATEGY
Most of the portfolio's solid performance over the past year can be attributed
to the portfolio's non-U.S. holdings. Bond markets in Canada, Mexico, and
Argentina all posted strong positive returns as the economies of these
countries benefited from the continuation of economic reforms in a favorable
worldwide climate of moderate economic growth and inflation.
The North American Government Income Trust's investment strategy was created in
the belief that the economies of North America would become increasingly
integrated due to escalation in free trade. In turn, as the U.S.'s trading
partners implemented macroeconomic policies designed to help their economies
compete with the U.S., we projected that significant opportunities would arise
for investors to benefit from these changes. Although this process was
temporarily sidetracked as a result of the 1994 peso devaluation, convergence
with the U.S. economy has proceeded over the past two years and we are pleased
to report that your portfolio has been well positioned to capitalize on the
gains in these markets as a result of this convergence.
ECONOMIC ENVIRONMENT
Rebounding from a slowdown at the end of 1995, the U.S. economy gathered steam
as 1996 progressed. Following first quarter gross domestic product (GDP) growth
of 2% the economic resurgence gained strength during the second quarter, led by
a rapidly improving labor market. Employment gains averaged 272,000 per month
and total hours worked climbed by an annualized 5.7%. Consumer confidence
remained elevated and real household spending continued to grow at a healthy
clip. These factors combined to produce "overheated" GDP growth of 4.7% during
the second quarter of 1996.
The most recent data, however, point to an economy that has slowed sharply from
its strong second quarter pace. Third quarter GDP growth declined to a more
moderate 2.1%, dragged down by a dramatic deceleration in consumer spending.
The annualized gain in retail sales of merchandise measured only 0.4% during
the third quarter while construction spending dropped 5.8% from second
quarter's level. On the production side, industrial production growth slowed to
an annualized 4.3% (from 6.6% for the second quarter), total hours worked grew
by only 2.8%, and non-farm payroll growth slowed to 145,000 per month.
1
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
On the inflation front, the Commerce Department's price index for the key gross
domestic purchases aggregate (which measures prices paid on all purchases by
U.S. residents) decelerated for the second quarter in a row, rising at a
seasonally adjusted annual rate of only 1.8% in the third quarter. This
compares with increases of 2.1% and 2.3%, respectively, in the second and first
quarters. At this broadest level of economic coverage, inflation remains very
well-behaved. As a result, the Federal Reserve has been in a holding pattern
since January 1996, and is expected to maintain that stance for the foreseeable
future.
MARKET REVIEW
Since our last report, the U.S. bond market has posted modest gains. The market
rallied during the second half of the year, pushing year-to-date returns into
positive territory for the first time since January 1996. Data released during
the period eased investors concerns about accelerating economic growth, pushing
interest rates on all maturities downward. However, continued concerns about
inflation kept bond yields trading in a narrow range and held price gains down.
Outside the U.S., emerging market debt prices continued to rise. In Mexico and
Argentina, the continued success of economic reforms has led to lower
inflation, improving current account deficits and growing investor confidence.
These factors supported higher bond prices in these markets over the past year.
In Canada, low growth and inflation rates, combined with drastic fiscal
tightening, have allowed the Bank of Canada to lower interest rates
significantly over the past year. As a result, the bond market posted strong
gains and short- and intermediate-term interest rates are currently 1% to 2%
below rates in the U.S.
GEOGRAPHIC DIVERSIFICATION OF PORTFOLIO HOLDINGS
as of November 30, 1996
ARGENTINA 23.37%
MEXICO 23.34%
CANADA 20.56%
U.S. 32.73%
OUTLOOK
UNITED STATES. Our outlook for the U.S. economy assumes that, while economic
growth may temporarily accelerate during the fourth quarter of 1996, it will
moderate again during the second quarter of 1997. If this occurs, recent upward
pressures on inflation should dissipate. Until clear signs of a slowing economy
emerge, concerns about inflation will keep U.S. interest rates within their
recent ranges.
CANADA. We believe slow growth, low inflation and fiscal tightening will remain
hallmarks of the Canadian economy. Although employment levels have increased
lately, fundamental weakness in the labor market should keep inflation in
check. In addition, an ongoing current account surplus and low domestic
inflation should help Canadian bonds outperform the U.S. market for the near
future.
ARGENTINA. We continue to have a favorable outlook for emerging market debt.
However, as risk premiums for this asset class have narrowed from their highs
at the end of 1994, we expect the pace of price appreciation to slow.
2
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
The strength of Argentina's economic recovery is accelerating with fourth
quarter growth likely to exceed 7%. The recovery is likely to further expand in
1997 as a re-sult of rising demand from middle-income consumers and higher
levels of exportation and investment. Inflation, at a steady trend of around
0.5% per year, remains below that of the U.S. Although unemployment remains
high, well-balanced economic policies are making it possible for the economy to
expand at a sustainable growth rate of 5% per year.
MEXICO. In Mexico, we see economic growth broadening and deepening, led by
strong export performance. The key to the continuation of economic growth will
be the sustainability of consumer demand, which we will continue to monitor
closely. We believe inflation will continue to fall, but, ranging between 18%
and 20% annually, will remain high by U.S. standards. The peso is likely to
weaken somewhat, reflecting inflation differentials between Mexico and the U.S.
Thank you for your continued interest and investment in Alliance North American
Government Income Trust. We look forward to reporting to you again on market
activity and the Trust's investment results in coming periods.
Sincerely,
John D. Carifa
Chairman and President
Wayne D. Lyski
Senior 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 NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
Alliance North American Government Income Trust is an open-end, non-diversified
investment company with an investment objective of seeking the highest level of
current income, consistent with what we believe to be prudent investment risk,
from a portfolio of debt securities issued or guaranteed by the governments of
the United States, Canada, and Mexico. The Trust's investment policies provide
that the Trust expects to maintain at least 25% of its assets in
U.S.-dollar-denominated securities and may invest up to 25% of its total assets
in debt securities issued by governmental entities in Argentina.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURNS AS OF NOVEMBER 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 35.22% 29.47%
. Since Inception* 7.91% 6.92%
SEC Yield** 9.36%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 33.96% 30.96%
. Since Inception* 6.99% 6.99%
SEC Yield** 9.08%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 33.96% 32.96
. Since Inception* 5.86% 5.86
SEC Yield** 9.09%
Average annual total returns reflect reinvestment of dividends and/or capital
gain distributions in additional shares, with and without the effect of the
4.25% maximum front-end sales charge for Class A or an applicable contingent
deferred sales charge for Class A (1%--Year 1 for purchases exceeding
$1,000,000); Class B (3%Year 1; 2%Year 2; 1%Year 3); and Class C shares
(1%--Year 1).
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: 3/27/92, Class A and Class B; 5/3/93, Class C.
** SEC Yields are for the 30 days ended November 30, 1996.
4
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
GROWTH OF A $10,000 INVESTMENT:
3/31/92* TO 11/30/96
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
$8,000
LEHMAN BROTHERS AGGREGATE INDEX: $14,365
LEHMAN BROTHERS INTERMEDIATE-TERM GOV'T INDEX: $13,747
NORTH AMERICAN GOVERNMENT INCOME TRUST CLASS A: $13,675
3/31/92
12/31/92
12/31/93
12/31/94
12/31/95
11/30/96
This chart illustrates the total value of an assumed $10,000 investment in
Class A shares as compared to the performance of appropriate broad-based
indices. The chart reflects the deduction of the maximum 4.25% sales charge
from an initial $10,000 investment in the Fund and assumes the reinvestment of
dividends and capital gains. Performance for Class B and C shares will vary
from the results shown above due to differences in expenses charged to those
classes. Results should not be considered representative of future gains or
losses.
Both the Lehman Brothers Aggregate Index, a measure of the broad U.S. bond
market, and the Lehman Brothers Intermediate-Term Government Bond Index, which
measures performance of bonds with maturities of one to ten years, are
unmanaged.
When comparing Alliance North American Government Income Trust to the indices
shown above, remember that sales charges and expenses are not reflected in the
performance of indices.
North American Government Income Trust
Lehman Brothers Aggregate Index
Lehman Brothers Intermediate-Term Government
* Month-end nearest to Trust inception date (3/27/92).
5
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
ARGENTINA-28.7%
GOVERNMENT OBLIGATIONS-28.7%
Republic of Argentina
Pensioner-Bocon Pre I FRN
3.51%, 4/01/01 (a) ARS 19,114 $ 16,211,728
Pensioner-Bocon Pre III FRN
3.51%, 9/01/02 (b) 73,198 54,485,511
Supplier-Bocon Pro I FRN
3.51%, 4/01/07 (a) 719,610 493,021,600
Total Argentinean Securities
(cost $475,904,182) 563,718,839
CANADA-25.2%
GOVERNMENT/AGENCY OBLIGATIONS-25.2%
Government of Canada
8.00%, 6/01/27 (c) CA$ 134,500 116,025,136
Ontario Hydro
10.00%, 3/19/01 (c) 50,000 44,136,729
Province of British Columbia
7.88%, 11/30/23 (c) 36,000 29,015,682
8.00%, 9/08/23 (c) 24,600 20,557,002
9.00%, 8/23/24 (c) 25,000 23,217,662
Province of Manitoba
7.75%, 12/22/25 (c) 60,200 49,413,413
Province of Ontario
8.00%, 6/02/26 (c) 91,250 76,117,784
Province of Quebec
9.375%, 1/16/23 (c) 88,600 82,152,004
Province of Saskatchewan
9.60%, 2/04/22 (c) 24,600 23,904,126
Quebec Hydro
8.77%, 8/15/20 (d)(e) 250,000 31,327,624
Total Canadian Securities
(cost $423,483,240) 495,867,162
MEXICO-28.6%
GOVERNMENT/AGENCY OBLIGATIONS-28.6%
Bankers Acceptances
Nacional Financiera
S.N.C. (e)
15.00%, 8/13/98 MXP 80,180 6,818,528
16.50%, 12/26/03 414,125 10,770,514
16.95%, 12/24/03 81,401 2,118,404
17.50%, 12/11/03 55,253 1,443,672
Mexican Treasury Bills (e)
26.54%, 11/06/97 MXP 450,000 45,695,994
26.70%, 10/02/97 61,350 6,358,172
27.09%, 5/29/97 345,000 38,554,450
27.40%, 5/08/97 278,387 31,551,498
27.50%, 4/30/97 703,527 80,136,831
27.51%, 5/22/97 449,826 50,497,025
27.75%, 2/20/97 135,956 16,227,473
27.90%, 6/05/97 430,440 47,884,321
29.10%, 7/31/97 653,658 70,271,556
30.85%, 7/03/97 76,517 8,361,751
31.60%, 1/30/97 126,500 15,331,390
31.70%, 4/03/97 162,924 18,899,041
31.70%, 2/13/97 53,485 6,414,446
31.80%, 12/05/96 20,364 2,571,287
31.95%, 3/06/97 86,804 10,250,769
32.00%, 1/23/97 58,089 7,073,324
32.09%, 9/04/97 198,670 20,904,660
32.40%, 1/16/97 293,361 35,907,719
32.40%, 1/09/97 192,881 23,694,436
33.00%, 1/02/97 40,577 5,012,951
Total Mexican Securities
(cost $656,644,727) 562,750,212
UNITED STATES-40.2%
U.S. GOVERNMENT/AGENCY OBLIGATIONS-40.1%
U.S. Treasury Bonds
6.75%, 8/15/26 US$ 106,000 110,637,606
12.375%, 5/15/04 47,200 65,077,047
12.50%, 8/15/14 19,000 29,188,769
14.00%, 11/15/11 94,900 149,645,532
U.S. Treasury Notes
6.125%, 8/31/98 28,000 28,262,528
6.25%, 10/31/01 20,000 20,350,020
6.50%, 10/15/06 76,000 78,541,288
6.75%, 4/30/00 46,100 47,511,859
7.00%, 7/15/06 19,000 20,252,822
U.S. Treasury Strips
Zero Coupon, 5/15/09 52,430 23,983,736
Zero Coupon, 5/15/10 384,970 164,093,463
Zero Coupon, 2/15/11 70,000 28,294,770
Zero Coupon, 5/15/14 13,400 4,314,344
Government National
Mortgage Association
9.75%, 6/15/24 16,413 17,848,828
-------------
788,002,612
6
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
REPURCHASE AGREEMENT-0.1%
Chase Manhattan Bank
5.60%, dated 11/29/96,
due 12/02/96, (collateralized
by $1,497,000 U.S. Treasury Note
5.875%, 7/31/97) US$ 1,500 $ 1,500,000
Total United States Securities
(cost $779,741,899) 789,502,612
TOTAL INVESTMENTS-122.7%
(cost $2,335,774,048) $2,411,838,825
Other assets less liabilities-(22.7)% (445,660,173)
NET ASSETS-100% $1,966,178,652
(a) Interest is compounded monthly and capitalized until May 1, 1997, after
which the security holder will receive monthly paydowns of principal and
interest until maturity.
(b) Interest is compounded monthly and capitalized until October 1, 1998,
after which the security holder will receive monthly paydowns of principal and
interest until maturity.
(c) Securities, or portion thereof, with an aggregate market value of
$464,539,538 have been segregated to collateralize forward exchange currency
contracts.
(d) Private Placement, valued at fair value. (see Note A.)
(e) Interest rate represents annualized yield to maturity at purchase date.
Glossary:
FRN - Floating Rate Note; stated interest rate in effect at November 30,
1996.
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $2,335,774,048) $2,411,838,825
Cash, at value (cost $7,198,628) 7,198,177
Receivable for investment securities sold 54,325,244
Interest receivable 24,639,513
Receivable for capital stock sold 9,572,619
Unrealized appreciation of forward exchange currency contracts 4,733,394
Deferred organization expenses and other assets 102,128
Total assets 2,512,409,900
LIABILITIES
Loan payable 250,000,000
Payable for investment securities purchased 273,555,687
Payable for capital stock redeemed 10,440,337
Dividend payable 6,230,370
Loan interest payable 2,948,265
Advisory fee payable 1,164,500
Distribution fee payable 277,412
Accrued expenses 1,614,677
Total liabilities 546,231,248
NET ASSETS $1,966,178,652
COMPOSITION OF NET ASSETS
Capital stock, at par $ 245,578
Additional paid-in capital 2,194,763,065
Distribution in excess of net investment income (31,212,393)
Accumulated net realized loss on investments and foreign
currency transactions (278,794,004)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 81,176,406
$1,966,178,652
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($385,784,171/
48,184,989 shares of capital stock issued and outstanding) $8.01
Sales charge--4.25% of public offering price .36
Maximum offering price $8.37
CLASS B SHARES
Net asset value and offering price per share($1,329,718,387/
166,083,690 shares of capital stock issued and outstanding) $8.01
CLASS C SHARES
Net asset value and offering price per share($250,676,094/
31,309,744 shares of capital stock issued and outstanding) $8.01
See notes to financial statements.
8
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $289,318) $ 304,694,299
EXPENSES
Advisory fee $13,118,739
Distribution fee - Class A 931,605
Distribution fee - Class B 12,231,411
Distribution fee - Class C 2,345,916
Custodian 2,985,301
Transfer agency 2,816,268
Audit and legal 250,696
Printing 247,025
Administrative 156,382
Registration 77,360
Amortization of organization expenses 67,373
Taxes 46,950
Directors' fees 27,482
Miscellaneous 22,097
Total expenses before interest 35,324,605
Interest expense 16,358,254
Total expenses 51,682,859
Net investment income 253,011,440
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions (66,853,010)
Net realized loss on foreign currency transactions (100,087,454)
Net change in unrealized appreciation (depreciation) of:
Investments 434,683,270
Foreign currency denominated assets and liabilities 990,841
Net gain on investments 268,733,647
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 521,745,087
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 253,011,440 $ 272,121,257
Net realized loss on investments and foreign
currency transactions (166,940,464) (507,701,318)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 435,674,111 43,988,763
Net increase (decrease) in net assets
from operations 521,745,087 (191,591,298)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (31,636,818) -0-
Class B (115,651,793) -0-
Class C (22,209,685) -0-
Tax return of capital
Class A (9,263,080) (33,426,216)
Class B (33,862,188) (152,169,130)
Class C (6,502,870) (30,951,612)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 68,868,628 (310,024,369)
Total increase (decrease) 371,487,281 (718,162,625)
NET ASSETS
Beginning of year 1,594,691,371 2,312,853,996
End of year $1,966,178,652 $1,594,691,371
See notes to financial statements.
10
STATEMENT OF CASH FLOWS
YEAR ENDED NOVEMBER 30, 1996
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
INCREASE (DECREASE) IN CASH FROM:
OPERATING ACTIVITIES:
Interest received $ 164,961,593
Interest paid (16,400,440)
Operating paid (35,075,134)
Net increase in cash from operating activities $113,486,019
INVESTING ACTIVITIES:
Purchases of short-term portfolio
investments, net (241,891,915)
Purchases of long-term portfolio investments (2,839,561,020)
Proceeds from disposition of long-term
portfolio investments 3,128,184,747
Net increase in cash from investing activities 46,731,812
FINANCING ACTIVITIES*:
Subscriptions of capital stock, net 70,836,530
Cash dividends paid (218,879,811)
Net decrease in cash from financing activities (148,043,281)
Effect of exchange rate on cash (5,076,860)
Net increase in cash 7,097,690
Cash at beginning of year 100,487
Cash at end of year $ 7,198,177
RECONCILIATION OF NET INCREASE IN NET ASSETS
FROM OPERATIONS TO NET INCREASE IN CASH FROM
OPERATING ACTIVITIES:
Net increase in net assets from operations $521,745,087
ADJUSTMENTS:
Decrease in interest receivable $ 476,451
Net realized loss on securities 66,853,010
Net change in unrealized appreciation (435,674,111)
Accretion of bond discount (140,217,166)
Increase in accrued expenses and other
liabilities 215,294
Net realized loss on foreign currency
transactions 100,087,454
(408,259,068)
Net increase in cash from operating activities $113,486,019
* Non-cash financing activities not included herein consist of reinvestment of
dividends.
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance North American Government Income Trust (the "Fund"), was incorporated
in the State of Maryland on February 3, 1992 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% 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 purchased on or after July 1, 1996, are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. All three classes of shares have identical voting,
dividend, liquidation and other rights with respect to its distribution plan.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Investments are stated at value. Portfolio securities traded on a national
securities exchange are valued at the last sale price on such exchange on the
day of valuation or, if there was no sale on such day, the last bid price
quoted on such day. Securities traded on the over-the-counter market are valued
at the mean of the closing bid and asked price provided by the principal market
makers. Securities which mature in 60 days or less are valued at amortized
cost, which approximates market value, unless this method does not represent
fair value. Securities for which market quotations are not readily available
and restricted securities are valued in good faith at fair value using methods
determined by the Board of Directors. In determining fair value, consideration
is given to cost, operating and other financial data.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized losses on foreign currency transactions represent foreign exchange
gains and losses from sales and maturities of foreign securities and foreign
exchange currency contracts, holding of foreign currencies, exchange gains or
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of interest recorded on
the Fund's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized currency gains and losses from valuing foreign
currency denominated assets and liabilities at period end exchange rates are
reflected as a component of net unrealized appreciation of investments and
foreign currency denominated assets and liabilities.
3. ORGANIZATION EXPENSES
Organization expenses of approximately $331,965 have been deferred and are
being amortized on a straight-line basis through March 1997.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. 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
adjustments to interest income.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
7. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
As of November 30, 1996, the Fund reclassified certain components of net
assets. The reclassification resulted in net increases to distributions in
excess of net investment
12
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
income of $50,892,211 and to accumulated net realized loss on investments and
foreign currency transactions of $100,087,466, and a net decrease to additional
paid in capital of $49,195,255. These reclassifications were the result of
permanent book and tax differences, primarily resulting from the Fund's tax
return of capital and foreign currency losses. Net assets were not affected by
the change.
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 adjusted daily net assets of the Fund. Such fee is
accrued daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid the Adviser $156,382
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) for providing personnel and facilities to perform transfer agency
services for the Fund. Such compensation amounted to $1,891,919 for the year
ended November 30, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $237,477 from the sale of Class A shares and
$237,571, $1,914,263 and $32,226 in contingent deferred sales charges imposed
upon redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the year ended November 30, 1996.
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 for Class A,
Class B and Class C shares. Under the Agreement, the Fund pays a distribution
fee to the Distributor at an annual rate of up to .30% of the Fund's average
daily net assets attributable to Class A shares and 1% of the average daily net
assets attributable to the Class B and Class C shares. Such fee is 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 $35,196,166 and $3,291,519 for
Class B and Class C shares respectively. Such costs may be recovered from the
Fund in future periods so long as the Agreement is in effect. In accordance
with the Agreement, there is no provision for recovery of unreimbursed
distribution costs, incurred by the Distributor, beyond the current 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 $708,551,808 and $1,108,404,014,
respectively, for the year ended November 30, 1996. There were purchases of
$2,195,939,691 and sales of $1,874,948,267 of U.S. Government and government
agency obligations for the year ended November 30, 1996.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contract and the closing of such contract is included in realized gains or
losses from foreign currency transactions.
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
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 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
total exposure of the Fund in that particular currency contract. At November
30, 1996, the Fund had outstanding forward exchange currency contracts as
follows:
CONTRACT VALUE ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
-------- ------------ ------------ ------------
FOREIGN CURRENCY SALE CONTRACT
Canadian Dollars,
expiring 12/12/96-5/27/97 586,446 $441,648,594 $436,915,200 $4,733,394
At November 30, 1996, the cost of investments for federal income tax purposes
was $2,370,070,560. Accordingly, gross unrealized appreciation of investments
was $154,896,041 and gross unrealized depreciation of investments was
$113,127,776 resulting in net unrealized appreciation of $41,768,265. At
November 30, 1996 the Fund had a capital loss carryforward totaling
$244,497,492, of which $70,618,925 expires in the year 2002, $134,381,470
expires in the year 2003, and $39,497,097 expires in the year 2004.
NOTE E: BANK BORROWING
The Fund entered into a Revolving Credit Agreement with Deutsche Bank AG, New
York Branch on June 25, 1996. The maximum credit available under the credit
facility is $250,000,000 and requires no collateralization. The loan
outstanding, under the Credit Agreement for the year ended November 30, 1996
was $250,000,000 with a related weighted average interest rate at year end of
6.20% and a weighted average annualized interest rate of 6.33%. The
$250,000,000 balance will mature on June 24, 1997. Interest payments on current
borrowings are based on the Eurodollar margin plus the applicable Eurodollar
rate. The Fund is also obligated to pay Deutsche Bank AG, New York Branch a
facility fee computed at the rate of .15% per annum on the daily amount of the
total commitment as in effect.
14
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
NOTE F: 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:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 18,944,431 14,452,683 $ 140,393,513 $ 94,352,169
Shares issued in
reinvestment of
dividends 2,057,846 2,314,466 15,163,942 14,875,359
Shares converted
from Class B 2,279,998 -0- 16,873,171 -0-
Shares redeemed (12,520,904) (16,694,036) (93,408,830) (107,647,756)
Net increase 10,761,371 73,113 $ 79,021,796 $ 1,579,772
CLASS B
Shares sold 35,540,009 29,670,771 $ 262,230,157 $ 194,645,827
Shares issued in
reinvestment of
dividends 6,054,943 9,031,497 44,586,197 58,268,585
Shares converted
to Class A (2,279,998) -0- (16,873,171) -0-
Shares redeemed (39,607,584) (73,890,695) (291,766,451) (477,796,460)
Net decrease (292,630) (35,188,427) $ (1,823,268) $(224,882,048)
CLASS C
Shares sold 8,095,161 6,692,492 $ 59,728,484 $ 43,465,432
Shares issued in
reinvestment of
dividends 1,232,338 2,381,481 9,077,697 15,394,839
Shares redeemed (10,461,384) (22,112,533) (77,136,081) (145,582,364)
Net decrease (1,133,885) (13,038,560) $ (8,329,900) $ (86,722,093)
NOTE G: LITIGATION
On July 25, 1995, a Consolidated and Supplemental Class Action Complaint
("Complaint"), styled IN RE NORTH AMERICAN GOVERNMENT INCOME TRUST, INC.
SECURITIES LITIGATION, was filed in the U.S. District Court for the Southern
District of New York against the Fund, the Adviser, Alliance Capital Management
Corporation ("ACMC"), Alliance Fund Distributors, Inc. ("AFD"), The Equitable
Companies Incorporated ("The Equitable"), a parent of the Adviser, and certain
current and former officers and directors of the Fund and ACMC, alleging
violations of the federal securities laws, fraud and breach of fiduciary duty
in connection with the Fund's investments in Mexican and Argentine securities.
The Complaint seeks certification of a plaintiff class of all persons who
purchased or owned Class A, B or C shares of the Fund from March 27, 1992
through December 23, 1994. Plaintiffs allege that, as of the date of the
Complaint, the Fund's losses exceeded $750,000,000 and seek as relief
unspecified damages, costs and attorneys' fees. On September 26, 1996, the
District Court granted defendants' motion to dismiss the Complaint as to all
claims.
On October 29, 1996, plaintiffs filed a motion for leave to file an amended
complaint. In the proposed amended complaint ("Amended Complaint"), plaintiffs
have asserted claims against the Fund, the Adviser, ACMC,
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
AFD, The Equitable, and certain current and former officers and directors of
the Fund and ACMCalleging violations of federal securities laws, fraud and
breach of fiduciary duty. The principal allegations of the Amended Complaint
relate to (i) the Fund's hedging practices, (ii) the Fund's investments in
certain mortgage-backed securities, and (iii) the risks and objectives of the
Fund as described in the Fund's marketing materials. The Amended Complaint
makes similar requests for class certification and damages as the Complaint.
Defendants have filed papers in opposition to plaintiffs' motion for leave to
file the Amended Complaint, and the motion is currently pending with the Court.
The Fund and the Adviser believe that the allegations in the Complaint and the
Amended Complaint are without merit and intend to defend vigorously against
these claims.
NOTE H: CONCENTRATION OF RISK
Investing in securities of foreign governments involves special risks which
include revaluation of currencies and the possibility of future adverse
political and economic developments. Moreover, securities of many foreign
governments and their markets may be less liquid and their prices more volatile
than those of the United States government. The Fund may invest in the
sovereign debt obligations of countries that are considered emerging market
countries at the time of purchase. Therefore, the Fund is susceptible to
governmental factors and economic and debt restructuring developments adversely
affecting the economies of these emerging market countries. In addition, these
debt obligations may be less liquid and subject to greater volatility than debt
obligations of more developed countries.
16
FINANCIAL HIGHLIGHTS
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
MARCH 27,1992(A)
YEAR ENDED NOVEMBER 30, TO
-------------------------------------------------- NOVEMBER 30,
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 6.75 $ 8.13 $10.35 $ 9.70 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.09(b) 1.18(b) 1.02 1.09 .69(c)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.14 (1.59) (2.12) .66 (.31)
Net increase (decrease) in net asset
value from operations 2.23 (.41) (1.10) 1.75 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.75) -0- (.91) (1.09) (.68)
Tax return of capital (.22) (.97) (.21) -0- -0-
Distributions from net realized gains -0- -0- -0- (.01) -0-
Total dividends and distributions (.97) (.97) (1.12) (1.10) (.68)
Net asset value, end of period $ 8.01 $ 6.75 $ 8.13 $10.35 $ 9.70
TOTAL RETURN
Total investment return based on net
asset value (d) 35.22% (3.59)% (11.32)% 18.99% 3.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $385,784 $252,608 $303,538 $268,233 $61,702
Ratio of expenses to average net assets 2.34% 2.62% 1.70% 1.61% 2.45%(e)(f)
Ratio of expenses to average net assets
excluding interest expense (g) 1.41% 1.51% 1.37% 1.33% 1.66%(e)
Ratio of net investment income to
average net assets 14.82% 18.09% 11.22% 10.77% 10.93%(e)
Portfolio turnover rate 166% 180% 131% 254% 86%
</TABLE>
See footnote summary on page 19.
17
FINANCIAL HIGHLIGHTS (CONTINUED)
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------
MARCH 27,1992(A)
YEAR ENDED NOVEMBER 30, TO
------------------------------------------------------- NOVEMBER 30,
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.75 $8.13 $10.35 $9.70 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.04(b) 1.13(b) .96 1.01 .64(c)
Net realized and unrealized gain (loss)
on investments
and foreign currency transactions 1.12 (1.61) (2.13) .67 (.31)
Net increase (decrease) in net asset
value from operations 2.16 (.48) (1.17) 1.68 .33
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.69) -0- (.84) (1.02) (.63)
Tax return of capital (.21) (.90) (.21) -0- -0-
Distributions from net realized gains -0- -0- -0- (.01) -0-
Total dividends and distributions (.90) (.90) (1.05) (1.03) (.63)
Net asset value, end of period $8.01 $6.75 $8.13 $10.35 $9.70
TOTAL RETURN
Total investment return based on net
asset value (d) 33.96% (4.63)% (11.89)% 18.15% 3.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $1,329,719 $1,123,074 $1,639,602 $1,313,591 $216,317
Ratio of expenses to average net assets 3.05% 3.33% 2.41% 2.31% 3.13%(e)(f)
Ratio of expenses to average net assets
excluding interest expense (g) 2.12% 2.22% 2.07% 2.04% 2.35%(e)
Ratio of net investment income to
average net assets 14.20% 17.31% 10.53% 10.01% 10.16%(e)
Portfolio turnover rate 166% 180% 131% 254% 86%
</TABLE>
See footnote summary on page 19.
18
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MAY 3, 1993(H)
YEAR ENDED NOVEMBER 30, TO
------------------------------------- NOVEMBER 30,
1996 1995 1994 1993
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.75 $8.13 $10.34 $10.04
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.05(b) 1.13(b) .96 .58
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.11 (1.61) (2.12) .30
Net increase (decrease) in net asset
value from operations 2.16 (.48) (1.16) .88
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.69) -0- (.84) (.58)
Tax return of capital (.21) (.90) (.21) -0-
Total dividends and distributions (.90) (.90) (1.05) (.58)
Net asset value, end of period $8.01 $6.75 $ 8.13 $10.34
TOTAL RETURN
Total investment return based on net
asset value (d) 33.96% (4.63)% (11.89)% 9.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $250,676 $219,009 $369,714 $310,230
Ratio of expenses to average net assets 3.04% 3.33% 2.39% 2.21%(e)
Ratio of expenses to average net assets
excluding interest expense (g) 2.12% 2.21% 2.06% 2.04%(e)
Ratio of net investment income to
average net assets 14.22% 17.32% 10.46% 9.74%(e)
Portfolio turnover rate 166% 180% 131% 254%
</TABLE>
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived by the Adviser.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(e) Annualized.
(f) If the Fund had borne all expenses, the ratios of expenses to average net
assets would have been 2.49% and 3.16% for Class A and Class B shares,
respectively.
(g) Net of interest expense of .93% on loan agreement (see Note E).
(h) Commencement of distribution.
19
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS ALLIANCE NORTH AMERICAN GOVERNMENT
INCOME TRUST, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance North American Government Income Trust, Inc. (the "Fund"), including
the portfolio of investments, as of November 30, 1996, and the related
statements of operations and cash flows for the year then ended, the statement
of changes in net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1996, by correspondence
with the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance North American Government Income Trust, Inc. at November 30, 1996, the
results of its operations and its cash flows for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
New York, New York
January 8, 1997
20
ALLIANCE NORTH AMERICAN GOVERNMENT 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
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN AND 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
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
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 Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
22
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
NAGAR
