ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
ANNUAL REPORT
NOVEMBER 30, 1997
ALLIANCE CAPITAL
ALLIANCE NORTH AMERICAN
LETTER TO SHAREHOLDERS GOVERNMENT INCOME TRUST
_______________________________________________________________________________
January 13, 1998
Dear Shareholder:
The U.S. bond market posted solid returns since our last report. Data released
during the period indicating a slowing U.S. economy, together with a favorable
U.S. budget deficit, fueled a rally in the U.S. Treasury market. In October,
financial market turmoil, which started in Southeast Asia, created a ripple
effect that spread to other global bond markets and caused a spike in
volatility. Increased investor demand for safe, liquid securities provided
additional fuel for the rally. U.S. bond yields reached their lowest levels
since early 1996 during October as the financial crisis in Southeast Asia
spread around the world, prompting deflation fears.
TOTAL RETURNS FOR PERIODS
ENDED NOVEMBER 30, 1997
6 MONTHS 12 MONTHS
---------- ----------
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
Class A 6.57% 12.85%
Class B 6.12% 11.88%
Class C 6.12% 11.88%
LEHMAN BROTHERS AGGREGATE BOND INDEX 6.55% 7.55%
LEHMAN BROTHERS INTERMEDIATE-TERM
GOVERNMENT BOND INDEX 4.87% 6.28%
THE LEHMAN BROTHERS INDICES ARE UNMANAGED AND DO NOT REFLECT FEES OR EXPENSES.
ADDITIONAL PERFORMANCE INFORMATION APPEARS ON PAGE 3.
INVESTMENT RESULTS
We are pleased to report that Alliance North American Government Income Trust
posted solid returns over the most recent period. Also shown in the box above
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 1-10 year maturity range. The
Trust significantly outperformed both indices for the twelve-month period. The
Fund has performed well in part because of its exposure to the U.S. and
Canadian government markets which have benefited from the flight to quality as
a result of the Asian crisis. The U.S. and Canadian positions represented 44%
and 12% of the portfolio, respectively.
ECONOMIC ENVIRONMENT
U.S. economic growth continued at a healthy pace over the past six months, led
by continued strength in the labor market and a strong rebound in consumer
spending. After slowing to a 0.9% annualized growth rate in the second quarter,
consumer spending jumped in the third quarter, up 5.7% on an annual basis.
Automotive purchases, which dropped 16.5% in the second quarter, climbed 23.5%
during the third quarter. Business spending remained strong, growing by 18.7%
in the third quarter, following the second quarter's strong 14.6% gain.
Meanwhile, employment growth continued at a rapid pace. After averaging a solid
233,000 new jobs per month during the first nine months of the year, non-farm
payroll growth rose to 287,000 in October and shot to 404,000 new jobs in
November. The unemployment rate subsequently fell to 4.6% in November, its
lowest level in 24 years. Overall, growth in aggregate output (GDP) remained
robust at 3.3% in the third quarter, equaling second quarter's growth rate.
In spite of an increase in wage pressures, inflation remained very well behaved
during the period. Wholesale inflation, as measured by the Producer Price Index
(PPI), fell in 8 of the 11 months of 1997. Overall, producer prices are down
0.6% on a year-over-year basis through November. Consumer prices also remained
tame and are up 1.8% from the same period last year. In light of this favorable
inflation news, the Federal Reserve Bank left monetary policy unchanged over
the past six months.
MARKET REVIEW AND OUTLOOK
The U.S. bond market rallied with little interruption since our last letter,
buoyed by tentative evidence of slowing domestic growth, better-than-expected
inflation news, the smallest federal budget deficit in more than 20 years, and
the diminishing likelihood of an interest rate increase. The prospect of a
major slowdown in Southeast Asia, led to a sell-off in U.S. equities and
emerging markets which, in turn, led to a flood of Treasury buying.
1
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
Emerging market debt prices bounced back from the fall in October. However, the
Asia debt crisis has served to adjust downward expectation for global growth
and inflation. The crisis is fostering an allocation shift into the relative
safety of U.S. government bonds and, therefore, has negatively impacted
emerging market debt prices. Despite the poor performance of emerging market
debt during the month of October, both Mexico and Argentina continue to remain
among the best performing markets.
Our outlook for U.S. financial markets assumes that the U.S. economy will move
onto a slower and more sustainable growth path during the next 6 to 12 months.
The spike in consumer demand in the third quarter 1997 pushed up overall growth
for the period, but that strength is unlikely to continue given that real
income growth is below 3%. The recent decline in interest rates will support
continued economic expansion, but the dollar's past strength and weaker demand
in export markets will be a drag on growth. The currency devaluations and
economic slowing in Southeast Asia will also temper U.S. growth. We look for
growth to slow toward 2% before reaccelerating later in 1998. In light of this
economic slowing and the unsettled conditions in global financial markets, the
Federal Reserve is likely to refrain from raising interest rates over the
near-term.
Although the Mexican peso fell victim to the currency crisis plaguing Southeast
Asia, economic fundamentals remain strong. Third quarter GDP growth rose to
8.8%. We continue to believe that Mexico will grow 5%-6% annually through 2000.
The economy in Canada continues to expand, fueled by consumer spending and
business investment. GDP of 4.7% remains strong and the Bank of Canada has
increased interest rates to guard against the threat of inflation. We expect
the Bank of Canada to continue to raise interest rates to better reflect
underlying fundamentals.
Despite excellent fundamentals, Argentina will continue to be hit by the
spillover from Asia and Brazil. However, we believe that Argentina will be able
to escape the emerging market turmoil with marginal deterioration of its growth
outlook. We expect growth in 1998 to reach 4%-4.5%. Unemployment dropped to a
three-year low, to 13.7% for the five months ended October. Argentina's
economic expansion is creating new jobs and growth is expected to exceed 8%
this year. Longer-term, we remain very positive on Argentina's economic
prospects.
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 Fund's investment results in coming periods.
Sincerely,
John D. Carifa
Chairman
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.
2
ALLIANCE NORTH AMERICAN
INVESTMENT OBJECTIVE AND POLICIES 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, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 12.85% 8.00%
Five Years 9.19% 8.25%
Since Inception* 8.76% 7.94%
SEC Yield** 10.92%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 11.88% 8.88%
Five Years 8.24% 8.24%
Since Inception* 7.84% 7.84%
SEC Yield** 10.70%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 11.88% 10.88%
Since Inception* 7.14% 7.14%
SEC Yield** 10.71%
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 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 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.
* Inception: 3/27/92, Class A and Class B; 5/3/93, Class C.
** SEC Yields are for the 30 days ended November 30, 1997.
3
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
ALLIANCE NORTHAMERICAN GOVERNMENT INCOME TRUST
GROWTH OF A $10,000 INVESTMENT
3/31/92* TO 11/30/97
$16,000
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
LEHMAN BROTHERS AGGREGATE BOND INDEX: $15,451
NORTH AMERICAN GOVERNMENT INCOME TRUST CLASS A: $15,415
LEHMAN BROTHERS INTERMEDIATE-TERM GOV'T BOND INDEX: $14,611
3/31/92 11/30/92 11/30/93 11/30/94 11/30/95 11/30/96 11/30/97
This chart illustrates the total value of an assumed $10,000 investment in
Alliance NorthAmerican Government Income Trust Class A shares (from 3/31/92 to
11/30/97) 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 unmanaged Lehman Brothers Aggregate Bond Index is composed of the
Mortgage-Backed Securities Index, the Asset-Backed Securities Index and the
Government/Corporate Bond Index.
The unmanaged Lehman Brothers Intermediate-Term Government Bond Index measures
the performance of bonds with maturities of one to ten years.
When comparing Alliance North American Government Income Trust to the indices
shown above, you should note that no charges or expenses are reflected in the
performance of the indices.
North American Government Income Trust
Lehman Brothers Aggregate Bond Index
Lehman Brothers Intermediate-Term Gov't Bond Index
* Month-end nearest to Fund's inception date of 3/27/92.
4
PORTFOLIO OF INVESTMENTS ALLIANCE NORTH AMERICAN
NOVEMBER 30, 1997 GOVERNMENT INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
ARGENTINA-27.4%
GOVERNMENT OBLIGATIONS-27.4%
Republic of Argentina
Pensioner-Bocon Pre III FRN
3.58%, 9/01/02 (a) ARS 190,443 $ 151,504,422
Supplier-Bocon Pro I FRN
3.24%, 4/01/07 625,366 444,661,828
Total Argentinian Securities
(cost $542,318,557) 596,166,250
CANADA-14.5%
GOVERNMENT/AGENCY OBLIGATIONS-14.5%
Government of Canada
8.00%, 6/01/27 CA$ 64,500 58,170,254
Province of British Columbia
7.88%, 11/30/23 36,000 30,272,813
8.00%, 9/08/23 24,600 21,325,585
9.00%, 8/23/24 25,000 24,024,788
Province of Manitoba
7.75%, 12/22/25 60,200 51,003,335
Province of Ontario
7.75%, 12/08/03 20,000 15,610,407
Province of Quebec
9.375%, 1/16/23 53,600 51,245,673
Province of Saskatchewan
9.60%, 2/04/22 24,600 24,495,488
Quebec Hydro
Zero Coupon, 8/15/20 (b) 250,000 38,692,462
Total Canadian Securities
(cost $265,404,384) 314,840,805
MEXICO-25.9%
GOVERNMENT/AGENCY OBLIGATIONS-25.9%
Bankers Acceptances Nacional
Financiera S.N.C. (c)
15.00%, 8/13/98 MXP 80,180 8,421,628
16.50%, 12/26/03 414,125 11,648,551
16.95%, 12/24/03 81,401 2,291,236
17.50%, 12/11/03 55,253 1,562,239
Mexican Treasury Bills (c)
19.99%, 7/02/98 623,236 67,153,316
20.05%, 9/24/98 665,954 68,756,239
20.19%, 7/30/98 337,714 35,874,488
21.38%, 8/27/98 358,446 37,531,311
21.38%, 10/22/98 195,075 19,867,320
22.85%, 6/04/98 717,412 78,479,951
23.16%, 5/07/98 874,729 97,180,316
23.50%, 3/05/98 254,792 29,330,473
23.86%, 4/02/98 690,547 78,189,387
23.90%, 2/04/98 66,126 7,736,946
25.47%, 12/31/97 157,216 18,796,642
Total Mexican Securities
(cost $674,975,440) 562,820,043
UNITED STATES-54.2%
U.S. GOVERNMENT/AGENCY OBLIGATIONS-53.7%
U.S. Treasury Bonds
6.375%, 8/15/27 US$ 75,000 77,859,375
6.625%, 2/15/27 78,000 83,362,500
6.75%, 8/15/26 55,000 59,640,625
12.00%, 8/15/13 66,200 96,734,750
12.375%, 5/15/04 41,200 55,323,854
12.50%, 8/15/14 19,000 29,087,803
14.00%, 11/15/11 31,900 49,325,375
U.S. Treasury Notes
6.125%, 8/31/98 18,500 18,557,813
6.125%, 11/15/27 48,000 48,464,976
6.25%, 10/31/01 60,000 60,750,000
6.25%, 2/15/07 58,400 59,732,221
6.625%, 3/31/02 88,900 91,316,924
6.625%, 4/30/02 37,500 38,554,688
6.75%, 4/30/00 21,100 21,535,188
7.00%, 7/15/06 122,900 131,656,625
U.S. Treasury Strips
Zero Coupon, 5/15/09 52,430 26,370,140
Zero Coupon, 5/15/10 384,970 181,470,623
Zero Coupon, 2/15/11 70,000 31,454,150
Zero Coupon, 5/15/14 13,400 4,913,981
---------------
1,166,111,611
5
ALLIANCE NORTH AMERICAN
PORTFOLIO OF INVESTMENTS (CONTINUED) GOVERNMENT INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
REPURCHASE AGREEMENT-0.5%
Brown Brothers Harriman & Co.
5.65%, dated 11/28/97, due 12/01/97,
(collateralized by $12,138,000 U.S.
Treasury Note 5.50%, 11/15/98) US$ 11,900 $ 11,900,000
Total United States Securities
(cost $1,152,798,751) 1,178,011,611
TOTAL INVESTMENTS-122.0%
(cost $2,635,497,132) $ 2,651,838,709
Other assets less liabilities-(22.0)% (478,199,128)
NET ASSETS-100% $ 2,173,639,581
(a) 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.
(b) Private Placement, valued at fair value. (see Note A.)
(c) Interest rate represents annualized yield to maturity at purchase date.
Glossary:
FRN - Floating Rate Note.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES ALLIANCE NORTH AMERICAN
NOVEMBER 30, 1997 GOVERNMENT INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $2,635,497,132) $ 2,651,838,709
Cash 43,812
Interest receivable 24,436,747
Receivable for capital stock sold 12,085,765
Receivable for investment securities sold 5,633,808
Other assets 14,412
Total assets 2,694,053,253
LIABILITIES
Loan payable 250,000,000
Payable for investment securities purchased 247,956,515
Payable for capital stock redeemed 8,744,859
Dividend payable 6,883,811
Loan interest payable 3,015,129
Advisory fee payable 1,269,026
Distribution fee payable 347,088
Accrued expenses 2,197,244
Total liabilities 520,413,672
NET ASSETS $ 2,173,639,581
COMPOSITION OF NET ASSETS
Capital stock, at par $ 270,914
Additional paid-in capital 2,400,615,632
Distributions in excess of net investment income (9,065,648)
Accumulated net realized loss on investments and
foreign currency transactions (234,586,433)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 16,405,116
$ 2,173,639,581
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($511,748,639/63,783,972 shares of capital stock
issued and outstanding) $8.02
Sales charge--4.25% of public offering price .36
Maximum offering price $8.38
CLASS B SHARES
Net asset value and offering price per share
($1,378,407,497/171,797,610 shares of capital stock
issued and outstanding) $8.02
CLASS C SHARES
Net asset value and offering price per share ($283,483,445/
35,332,118 shares of capital stock issued and outstanding) $8.02
See notes to financial statements.
7
STATEMENT OF OPERATIONS ALLIANCE NORTH AMERICAN
YEAR ENDED NOVEMBER 30, 1997 GOVERNMENT INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes
withheld of $277,751) $ 309,800,728
EXPENSES
Advisory fee $15,056,849
Distribution fee - Class A 1,323,985
Distribution fee - Class B 13,592,258
Distribution fee - Class C 2,658,842
Custodian 3,500,404
Transfer agency 2,844,422
Printing 372,609
Audit and legal 148,113
Administrative 141,895
Taxes 138,063
Registration 89,658
Directors' fees 24,240
Amortization of organization expenses 21,187
Miscellaneous 33,800
Total expenses before interest 39,946,325
Interest expense 16,057,710
Total expenses 56,004,035
Net investment income 253,796,693
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 44,207,583
Net realized gain on foreign currency transactions 2,580,983
Net change in unrealized appreciation of:
Investments (59,723,200)
Foreign currency denominated assets and liabilities (5,048,090)
Net loss on investments (17,982,724)
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 235,813,969
See notes to financial statements.
8
ALLIANCE NORTH AMERICAN
STATEMENT OF CHANGES IN NET ASSETS GOVERNMENT INCOME TRUST
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 253,796,693 $ 253,011,440
Net realized gain (loss) on investments
and foreign currency transactions 46,788,566 (166,940,464)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency denominated assets
and liabilities (64,771,290) 435,674,111
Net increase in net assets from operations 235,813,969 521,745,087
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (53,153,774) (31,636,818)
Class B (151,811,556) (115,651,793)
Class C (29,704,053) (22,209,685)
Tax return of capital
Class A -0- (9,263,080)
Class B -0- (33,862,188)
Class C -0- (6,502,870)
CAPITAL STOCK TRANSACTIONS
Net increase 206,316,343 68,868,628
Total increase 207,460,929 371,487,281
NET ASSETS
Beginning of year 1,966,178,652 1,594,691,371
End of year $2,173,639,581 $1,966,178,652
See notes to financial statements.
9
STATEMENT OF CASH FLOWS ALLIANCE NORTH AMERICAN
YEAR ENDED NOVEMBER 30, 1997 GOVERNMENT INCOME TRUST
_______________________________________________________________________________
INCREASE (DECREASE) IN CASH FROM:
OPERATING ACTIVITIES:
Interest received $ 104,359,368
Interest paid (15,618,485)
Operating expenses paid (39,540,730)
Net increase in cash from operating activities $ 49,200,153
INVESTING ACTIVITIES:
Proceeds from disposition of short-term
portfolio investments, net 95,227,304
Purchases of long-term portfolio investments (2,482,075,749)
Proceeds from disposition of long-term
portfolio investments 2,340,269,638
Net decrease in cash from investing activities (46,578,807)
FINANCING ACTIVITIES*:
Subscriptions of capital stock, net 202,107,720
Cash dividends paid (234,015,941)
Net decrease in cash from financing activities (31,908,221)
Effect of exchange rate on cash 22,132,510
Net decrease in cash (7,154,365)
Cash at beginning of year 7,198,177
Cash at end of year $ 43,812
_______________________________________________________________________________
RECONCILIATION OF NET INCREASE IN NET ASSETS
FROM OPERATIONS TO NET INCREASE IN CASH FROM
OPERATING ACTIVITIES:
Net increase in net assets from operations $ 235,813,969
ADJUSTMENTS:
Decrease in interest receivable $ 202,766
Net realized gain on investment transactions (44,207,583)
Net change in unrealized depreciation 64,771,290
Accretion of bond discount (205,644,125)
Increase in accrued expenses and
other liabilities 844,819
Net realized gain on foreign
currency transactions (2,580,983)
(186,613,816)
Net increase in cash from operating activities $ 49,200,153
* Non-cash financing activities not included herein consist of reinvestment
of dividends.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS ALLIANCE NORTH AMERICAN
NOVEMBER 30, 1997 GOVERNMENT INCOME TRUST
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance North American Government Income Trust, Inc. (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 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
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 market 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 price 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 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 earned or accrued.
Net realized gains and losses on foreign currency transactions represent
foreign exchange gains and losses from sales and maturities of foreign
securities and forward exchange currency contracts, holding of foreign
currencies, exchange gains or 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 of the
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. ORGANIZATION EXPENSES
Organization expenses of approximately $331,965 have been deferred and were
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 any, 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 discount as an
adjustment to interest income.
11
ALLIANCE NORTH AMERICAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED) GOVERNMENT INCOME TRUST
_______________________________________________________________________________
6. 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.
7. 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 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 gains, resulted in a net increase in
undistributed net investment income and a corresponding increase in accumulated
net realized loss on investments and foreign currency transactions. This
reclassification had no effect on net assets.
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 $141,895
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended November 30, 1997.
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 $1,861,636 for the year ended November 30, 1997.
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 $291,260 from the sale of Class A shares and $361,
$1,417,334 and $93,896 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, 1997.
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 the Fund's average daily net assets attributable to Class
A shares and 1% of the average daily net assets attributable to both 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 $36,319,865 and $4,072,381 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.
12
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $241,635,118 and $446,906,551,
respectively, for the year ended November 30, 1997. There were purchases of
$2,214,841,459 and sales of $1,844,671,650 of U.S. government and government
agency obligations for the year ended November 30, 1997.
At November 30, 1997, the cost of investments for federal income tax purposes
was $2,682,590,605. Accordingly, gross unrealized appreciation of investments
was $132,422,155 and gross unrealized depreciation of investments was
$163,174,051 resulting in net unrealized depreciation of $30,751,896 excluding
foreign currency transactions. At November 30, 1997, the Fund had a capital
loss carryforward totaling $187,492,968, of which $13,614,389 expires in the
year 2002, $134,381,470 expires in the year 2003, and $39,497,109 expires in
the year 2004.
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 at a future
date at a negotiated forward rate. The gain or loss arising from the difference
between the original contracts and the closing of such contracts is included in
realized gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value equal
to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of 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, reflects the total exposure of the Fund in that particular currency
contract.
At November 30, 1997, the Fund had no outstanding forward exchange currency
contracts.
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, 1997
was $250,000,000 with a related weighted average interest rate at year end of
6.28% and a weighted average annualized interest rate of 6.17%. The
$250,000,000 balance will mature on December 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 .10% per annum on the daily
amount of the total commitment as in effect.
13
ALLIANCE NORTH AMERICAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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
NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1997 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 17,871,465 18,944,431 $144,058,872 $140,393,513
Shares issued in
reinvestment of
dividends and
distributions 2,269,271 2,057,846 18,311,581 15,163,942
Shares converted
from Class B 8,014,844 2,279,998 64,154,628 16,873,171
Shares redeemed (12,556,597) (12,520,904) (100,703,640) (93,408,830)
Net increase 15,598,983 10,761,371 $125,821,441 $ 79,021,796
CLASS B
Shares sold 43,619,890 35,540,009 $351,851,243 $262,230,157
Shares issued in
reinvestment of
dividends and
distributions 5,419,148 6,054,943 43,709,426 44,586,197
Shares converted
to Class A (8,014,844) (2,279,998) (64,154,628) (16,873,171)
Shares redeemed (35,310,274) (39,607,584) (283,575,964) (291,766,451)
Net increase
(decrease) 5,713,920 (292,630) $ 47,830,077 $ (1,823,268)
CLASS C
Shares sold 11,671,925 8,095,161 $ 94,074,275 $ 59,728,484
Shares issued in
reinvestment of
dividends and
distributions 1,158,939 1,232,338 9,352,065 9,077,697
Shares redeemed (8,808,490) (10,461,384) (70,761,515) (77,136,081)
Net increase
(decrease) 4,022,374 (1,133,885) $ 32,664,825 $ (8,329,900)
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 sought 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.
On September 26, 1996, the United States District Court for the Southern
District of New York granted the defendants' motion to dismiss all counts of
the Complaint ("First Decision"). On October 11, 1996, plaintiffs filed a
motion for reconsideration of the First Decision. On November 25, 1996, the
District Court denied plaintiffs' motion for reconsideration of the First
Decision. On October 29, 1997, the United States Court of Appeals for the
Second Circuit issued an order granting defendants' motion to strike and
dismissing plaintiffs' appeal of the First Decision.
14
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
On October 29, 1996, plaintiffs filed a motion for leave to file an amended
complaint. The principal allegations of the proposed amended complaint are that
the Fund did not properly disclose that it planned to invest in mortgage-backed
derivative securities and that two advertisements used by the Fund
misrepresented the risks of investing in the Fund. Plaintiffs also alleged that
the Fund failed to hedge against the risks of investing in foreign securities
despite representations that it would do so. On July 15, 1997, the District
Court denied plaintiffs' motion for leave to file an amended complaint and
ordered that the case be dismissed ("Second Decision"). On October 29, 1997,
the United States Court of Appeals for the Second Circuit dismissed plaintiffs'
appeal of the Second Decision as premature on the grounds that the District
Court failed to enter the final judgment in respect of the Second Decision. The
Court of Appeals remanded the case back to the District Court with instructions
to enter a final judgment in respect of the Second Decision. On November 10,
1997, the District Court entered such a judgment, and on November 17, 1997,
plaintiffs filed a notice of appeal from that judgment.
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.
15
ALLIANCE NORTH AMERICAN
FINANCIAL HIGHLIGHTS GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 8.01 $ 6.75 $ 8.13 $10.35 $ 9.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.03(a) 1.09(a) 1.18(a) 1.02 1.09
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.05) 1.14 (1.59) (2.12) .66
Net increase (decrease) in net asset
value from operations .98 2.23 (.41) (1.10) 1.75
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.97) (.75) -0- (.91) (1.09)
Tax return of capital -0- (.22) (.97) (.21) -0-
Distributions from net realized gains -0- -0- -0- -0- (.01)
Total dividends and distributions (.97) (.97) (.97) (1.12) (1.10)
Net asset value, end of year $ 8.02 $ 8.01 $ 6.75 $ 8.13 $10.35
TOTAL RETURN
Total investment return based on
net asset value (b) 12.85% 35.22% (3.59)% (11.32)% 18.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $511,749 $385,784 $252,608 $303,538 $268,233
Ratio of expenses to average net assets 2.15% 2.34% 2.62% 1.70% 1.61%
Ratio of expenses to average net assets
excluding interest expense (c) 1.38% 1.41% 1.51% 1.37% 1.33%
Ratio of net investment income to
average net assets 12.78% 14.82% 18.09% 11.22% 10.77%
Portfolio turnover rate 118% 166% 180% 131% 254%
</TABLE>
See footnote summary on page 18.
16
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 8.01 $ 6.75 $ 8.13 $10.35 $ 9.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income .98(a) 1.04(a) 1.13(a) .96 1.01
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions (.07) 1.12 (1.61) (2.13) .67
Net increase (decrease) in net asset
value from operations .91 2.16 (.48) (1.17) 1.68
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.90) (.69) -0- (.84) (1.02)
Tax return of capital -0- (.21) (.90) (.21) -0-
Distributions from net realized gains -0- -0- -0- -0- (.01)
Total dividends and distributions (.90) (.90) (.90) (1.05) (1.03)
Net asset value, end of year $ 8.02 $ 8.01 $ 6.75 $ 8.13 $10.35
TOTAL RETURN
Total investment return based on
net asset value (b) 11.88% 33.96% (4.63)% (11.89)% 18.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $1,378,407 $1,329,719 $1,123,074 $1,639,602 $1,313,591
Ratio of expenses to average net assets 2.86% 3.05% 3.33% 2.41% 2.31%
Ratio of expenses to average net assets
excluding interest expense (c) 2.09% 2.12% 2.22% 2.07% 2.04%
Ratio of net investment income to
average net assets 12.15% 14.20% 17.31% 10.53% 10.01%
Portfolio turnover rate 118% 166% 180% 131% 254%
</TABLE>
See footnote summary on page 18.
17
FINANCIAL HIGHLIGHTS (CONTINUED)
ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------------------
MAY 3, 1993(D)
YEAR ENDED NOVEMBER 30, TO
-------------------------------------------------------- NOVEMBER 30,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.01 $ 6.75 $ 8.13 $10.34 $10.04
INCOME FROM INVESTMENT OPERATIONS
Net investment income .98(a) 1.05(a) 1.13(a) .96 .58
Net realized and unrealized gain
(loss) on investments and foreign
currency transaction (.07) 1.11 (1.61) (2.12) .30
Net increase (decrease) in net
asset value from operations .91 2.16 (.48) (1.16) .88
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.90) (.69) -0- (.84) (.58)
Tax return of capital -0- (.21) (.90) (.21) -0-
Total dividends and distributions (.90) (.90) (.90) (1.05) (.58)
Net asset value, end of period $ 8.02 $ 8.01 $ 6.75 $ 8.13 $10.34
TOTAL RETURN
Total investment return based on
net asset value(b) 11.88% 33.96% (4.63)% (11.89)% 9.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $283,483 $250,676 $219,009 $369,714 $310,230
Ratio of expenses to average net assets 2.85% 3.04% 3.33% 2.39% 2.21%(e)
Ratio of expenses to average net assets
excluding interest expense (c) 2.08% 2.12% 2.21% 2.06% 2.04%(e)
Ratio of net investment income to
average net assets 12.14% 14.22% 17.32% 10.46% 9.74%(e)
Portfolio turnover rate 118% 166% 180% 131% 254%
</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 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.
(c) Net of interest expense of .77%, .93%, 1.11%, .33% and .28% respectively,
on loan agreement (see Note E).
(d) Commencement of distribution.
(e) Annualized.
18
REPORT OF ERNST & YOUNG LLP ALLIANCE NORTH AMERICAN
INDEPENDENT AUDITORS 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, 1997, 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, 1997, 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, 1997, 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 7, 1998
19
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
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, 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.
20
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance 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 Greater China '97 Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
21
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
NAGAR
