ALLIANCE WORLD DOLLAR GOVERNMENT FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
June 26, 1998
Dear Shareholder:
We are pleased to report to you on our strategy, performance and outlook of the
Alliance World Dollar Government Fund, for the semi-annual reporting period
ended April 30, 1998. The Fund is designed for investors who seek high current
income and capital appreciation. To achieve this objective, the Fund invests in
high yielding, high risk debt obligations of developing countries that we
expect to benefit from improving economic and credit fundamentals.
MARKET OVERVIEW
During the six-month period under review, emerging market debt posted the best
returns among all the sectors of the fixed income market. After having fallen
in late October due to negative economic events in East Asia, emerging market
debt prices climbed upward, finally reaching pre-October price levels in late
March. The sector's positive performance results from the concerted effort made
by emerging market governments along with the International Monetary Fund (IMF)
and world leaders to stabilize the situation in East Asia. Additionally, once
it appeared that emerging markets outside of East Asia would not experience
similar consequences such as currency devaluation, investors returned to the
sector looking for undervalued, higher yielding securities. Although the worst
of the crisis appears to be behind us, volatility should continue to persist
due to concerns about a possible currency devaluation by China and the
uncertain economic environment in Japan and Russia.
INVESTMENT STRATEGY
Consistent with our long-term positive outlook on the emerging markets, we
maintained an above-market spread duration in your Fund. Spread duration is a
measure of a bond's price sensitivity to changes in its yield spread to
Treasuries that can be driven by the country's credit risk profile. Maintaining
an above-market spread duration enhances price movement in the portfolio. In
addition, we increased diversification among Latin American holdings, which
make up more than 50% of the Fund's holdings at this time. In Eastern Europe,
we increased our allocation in Russia. After it became apparent that these
countries would not be negatively affected by events in East Asia, we sought
out debt issues that we believed offered good relative value.
INVESTMENT PERFORMANCE
The following table shows how your Fund performed over the past six and
12-month periods. For comparison we have included the J.P. Morgan Emerging
Markets Bond Index, a standard measure of the performance of a basket of
unmanaged emerging market debt securities.
Over the six-month period, your Fund slightly underperformed the benchmark due
to its overweight position in Russia and above-market spread duration. However,
over the longer 12-month period, overweighting Russia and spread duration
helped the Fund outperform the benchmark.
INVESTMENT RESULTS*
Periods Ended April 30, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE WORLD DOLLAR
GOVERNMENT FUND 14.38% 18.49%
J.P. MORGAN EMERGING
MARKETS BOND INDEX 14.56% 16.71%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
FUND'S NET ASSET VALUE AS OF APRIL 30, 1998. ALL FEES AND EXPENSES RELATED TO
THE OPERATION OF THE FUND HAVE BEEN DEDUCTED. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
THE J.P. MORGAN EMERGING MARKETS BOND INDEX IS COMPOSED OF
DOLLAR-DENOMINATED RESTRUCTURED SOVEREIGN BONDS; A LARGE PERCENTAGE OF THE
INDEX IS MADE UP OF BRADY BONDS. THE INDEX IS UNMANAGED AND REFLECTS NO FEES OR
EXPENSES. AN INVESTOR CANNOT INVEST DIRECTLY IN THE INDEX.
INVESTMENT POLICY CHANGE
At their annual meeting held on March 31, 1998, the Fund's shareholders
approved a modification to the Fund's fundamental investment policy regarding
Brady Bonds. Prior to the modification, the Fund had been required to invest at
least 75% of its total assets in a combination of zero coupon obligations and
collateralized Brady Bonds. The modified investment policy approved by the
shareholders requires the Fund to invest at least
1
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
75% of its total assets in a combination of zero coupon obligations and any
type of sovereign debt obligation, not solely collateralized Brady Bonds.
Inasmuch as the supply of collateralized Brady Bonds continues to shrink, we
believe this modification will provide the Fund with important additional
flexibility in meeting its investment goals.
ECONOMIC OUTLOOK
Emerging market debt price volatility remains quite high, as renewed turmoil in
Asia has heightened investor concern about all higher yielding asset classes.
Security prices have been under pressure in all emerging market countries, even
those whose economic fundamentals remain strong. Argentina, Mexico, Panama, and
Poland fall into this category. Russian assets have come under the most
pressure as concern rises over the government's ability to rollover short-term
debt and maintain current valuations of the ruble. However, continued low
inflation, the return of economic growth, and a new prime minister and cabinet
that is very pro-reform, lead us to believe that Russia will survive this
current bout of uncertainty. Although, Russia may need the help of the G7
nations to restructure its current debt profile.
We view the steps taken by Korea thus far to be very positive. The new
government appears to recognize the severity of the country's problems, and has
shown a willingness to take the costly measures to resolve the current
problems. Korea and the Philippines are the only two Asian sovereign credits we
would be comfortable owning at this time. The Fund is currently invested in
Korea.
Thank you for your continued interest and investment in Alliance World Dollar
Government Fund. We look forward to reporting its progress to you in the coming
months.
Sincerely,
John D. Carifa
Chairman
Wayne D. Lyski
President
2
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-96.4%
COLLATERALIZED BRADY BONDS (A)-51.2%
ARGENTINA-17.6%
Republic of Argentina
Discount Bonds FRN
Series L-GL 6.875%, 3/31/23 $25,000 $21,453,125
BRAZIL-13.2%
Republic of Brazil
Discount Bonds FRN
Series Z-L 6.625%, 4/15/24 19,160 16,082,425
BULGARIA-3.1%
Republic of Bulgaria
Discount Bonds FRN
6.563%, 7/28/24 4,575 3,762,938
ECUADOR-1.7%
Republic of Ecuador
Discount Bonds
6.625%, 2/28/25 2,850 2,096,531
MEXICO-15.6%
United Mexican States
Discount Bonds FRN Series B
6.617%, 12/31/19 (b) 10,240 9,600,000
Euro Par Bonds Series A
6.25%, 12/31/19 (b) 8,600 7,274,847
Euro Par Bonds Series B
6.25%, 12/31/19 (b) 2,500 2,114,781
------------
18,989,628
Total Collateralized Brady Bonds
(cost $60,590,336) 62,384,647
OTHER SOVEREIGN DEBT OBLIGATIONS-33.1%
BRAZIL-5.6%
Republic of Brazil Global Bond
10.125%, 5/15/27 7,000 6,825,000
COLOMBIA-2.5%
Republic of Colombia
8.625%, 4/01/08 3,000 3,000,000
KOREA-2.0%
Republic of Korea
8.875%, 4/15/08 2,500 2,465,000
RUSSIA-18.6%
Russian IAN FRN
6.719%, 12/15/15 31,500 22,640,625
VENEZUELA-4.4%
Republic of Venezuela
9.25%, 9/15/27 6,000 5,301,000
Total Other Sovereign Debt Obligation
(cost $39,787,504) 40,231,625
NON-COLLATERALIZED BRADY BONDS-8.4%
BRAZIL-2.3%
Republic of Brazil C-Bonds
8.00%, 4/15/14 (c) 3,434 2,842,892
PANAMA-3.2%
Republic of Panama IRB
3.75%, 7/17/14 (d) 5,000 3,921,875
PERU-2.9%
Republic of Peru FLIRB
3.25%, 3/07/17 (d) 2,000 1,225,000
3.25%, 3/07/17 (d)(e) 1,500 918,750
Republic of Peru PDI 4.00%, 3/07/17 (d) 2,000 1,366,250
------------
3,510,000
Total Non-Collateralized Brady Bonds
(cost $9,944,483) 10,274,767
3
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- ------------------------------------------------------------------------
LOAN PARTICIPATION-3.7%
MOROCCO-3.7%
Kingdom of Morocco Loan Participation
FRN Series A
6.656%, 1/01/09
(cost $2,592,894) $ 5,000 $ 4,459,375
Total Sovereign Debt Obligations
(cost $112,915,217) 117,350,414
U.S. GOVERNMENT OBLIGATION-40.2%
U.S. Treasury Strip Zero coupon, 2/15/03
(cost $49,427,303) 64,000 48,932,864
TIME DEPOSIT-8.0%
Bank of New York
5.125%, 5/01/98
(cost $ 9,753,000) 9,753 9,753,000
TOTAL INVESTMENTS-144.6%
(cost $172,095,520) 176,036,278
Other assets less liabilities-(44.6%) (54,323,470)
NET ASSETS-100% $121,712,808
(a) Sovereign debt obligations issued as part of debt restructurings that are
collateralized in full as to principal due at maturity by U.S. Treasury zero
coupon obligations which have the same maturity as the Brady Bond.
(b) Security trades with value recovery rights expiring June 30, 2003.
(c) Coupon consists of 5.00% cash payment and 3.00% paid-in-kind.
(d) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at April 30, 1998.
(e) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30, 1998,
these securities amounted to $918,750 representing 0.8% of net assets.
Glossary of Terms:
FLIRB - Front Loaded Interest Reduction Bond.
IAN - Interest Arrears Note.
FRN - Floating Rate Note.
IRB - Interest Reduction Bond.
PDI - Past Due Interest.
See notes to financial statements.
4
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE (COST $172,095,520) $176,036,278
Receivable for investment securities sold 23,256,310
Interest receivable 2,896,541
Other assets 22,248
Total assets 202,211,377
LIABILITIES
Due to custodian 272,570
Payable for investment securities purchased 79,740,935
Advisory fee payable 107,607
Administrative fee payable 16,144
Unrealized depreciation on interest rate swap contract 7,812
Accrued expenses 353,501
Total liabilities 80,498,569
NET ASSETS $121,712,808
COMPOSITION OF NET ASSETS
Capital stock, at par $ 79,964
Additional paid-in capital 109,380,620
Undistributed net investment income 1,203,078
Accumulated net realized gain on investment transactions 7,116,200
Net unrealized appreciation of investments 3,932,946
$121,712,808
NET ASSET VALUE PER SHARE
(based on 7,996,375 shares outstanding) $15.22
See notes to financial statements.
5
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
INVESTMENT INCOME
INTEREST $ 6,783,881
EXPENSES
Advisory fee $646,031
Administrative fee 96,908
Audit & legal 60,502
Custodian 58,327
Transfer agency 36,556
Directors' fees 18,708
Printing 13,555
Registration 10,306
Amortization of organization expenses 1,109
Taxes 2,044
Miscellaneous 3,724
Total expenses 947,770
Net investment income 5,836,111
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment
transactions 8,333,971
Net change in unrealized appreciation of investments 3,914,387
Net gain on investments 12,248,358
NET INCREASE IN NET ASSETS FROM OPERATIONS $18,084,469
See notes to financial statements.
6
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
---------------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 5,836,111 $ 13,896,423
Net realized gain on investment
transactions 8,333,971 23,952,946
Net change in unrealized appreciation
of investments and other assets 3,914,387 (19,652,839)
Net increase in net assets from
operations 18,084,469 18,196,530
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (7,394,073) (13,628,017)
Distributions from net realized gain on
investments (17,841,882) -0-
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in
issuance of Common Stock 5,459,141 -0-
Tender offer resulting in the
redemption of 1,034,042 shares of
Common Stock (15,303,829) -0-
Total increase (decrease) (16,996,174) 4,568,513
NET ASSETS
Beginning of year 138,708,982 134,140,469
End of period (including undistributed
net investment income of $1,203,078
and $2,761,040, respectively $121,712,808 $138,708,982
See notes to financial statements.
7
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance World Dollar Government Fund, Inc. (the "Fund") was incorporated under
the laws of the State of Maryland on August 20, 1992 and is registered under
the Investment Company Act of 1940, as a non-diversified, closed-end management
investment company. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sale price, if there was no sale on such
day, the last bid price quoted on such day. If no bid prices are quoted, then
the security is valued at the mean of the bid and asked prices as obtained on
that day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the United States
over-the-counter market, 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
market value of such securities.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $90,000 have been deferred and were
amortized on a straight-line basis through November, 1997.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes is
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discount as an
adjustment to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences, do not require such
reclassification.
NOTE B: ADVISORY, ADMINISTRATIVE FEES AND OTHER AFFILIATED TRANSACTIONS
Under the terms of an Investment Advisory Agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee equal to the annualized
rate of 1% of the Fund's average weekly net assets.
Under the terms of an Administration Agreement, the Fund pays Alliance Capital
Management L.P. (the "Administrator") a monthly fee equal to the annualized
rate of .15 of 1% of the Fund's average weekly net assets. The Administrator
provides administrative functions as well as other clerical services to the
Fund and prepares financial and regulatory reports.
The Fund entered into a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Adviser, whereby the Fund
reimburses
8
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
AFS for costs relating to servicing phone inquiries for the Fund. During the
six months ended April 30, 1998, the Fund reimbursed AFS $3,480, relating to
shareholder servicing costs.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $85,173,745 and $128,062,689,
respectively, for the six months ended April 30, 1998. There were purchases of
$98,050,678 and sales of $97,164,155 of U.S. government obligations for the six
months ended April 30, 1998.
At April 30, 1998, the cost of investments for federal income tax purposes was
$173,768,235. Accordingly, gross unrealized appreciation of investments was
$5,058,651 and gross unrealized depreciation of investments was $2,790,608
resulting in net unrealized appreciation of $2,268,043 (excluding swap
contracts).
1. INTEREST RATE SWAP AGREEMENT
The Fund enters into interest rate swaps on sovereign debt obligations to
protect itself from interest rate fluctuations on the underlying floating rate
debt instruments and for investment purposes. A swap is an agreement that
obligates two parties to exchange a series of cash flows at specified intervals
based upon or calculated by reference to changes in specified prices or rates
for a specified amount of an underlying asset. The payment flows are usually
netted against each other, with the difference being paid by one party to the
other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the value
of swap contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation of investments.
At April 30, 1998, the Fund had an outstanding interest rate swap contract with
the following terms:
<TABLE>
<CAPTION>
RATE TYPE
--------------------------------
SWAP NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED UNREALIZED
COUNTERPARTY AMOUNT DATE BY THE FUND BY THE FUND DEPRECIATION
- ------------ -------------- ----------- ------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Morgan US$ 12,000,000 1/01/09 LIBOR# 6.8526% $(7,812)
Guaranty
</TABLE>
# LIBOR (London Interbank Offered Rate).
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $0.01 par value Common Stock authorized. Of the
7,996,375 shares outstanding at April 30, 1998, the Adviser owned 7,200 shares.
During the six months ended April 30, 1998, the Fund purchased 1,034,042 shares
of its outstanding Common Stock for $14.80 per share pursuant to a tender
offer. The Fund incurred tender offer costs of $207,000 which were charged to
additional paid-in capital. During the six months ended April 30, 1998, the
Fund issued 377,710 shares in connection with the Fund's dividend reinvestment
plan. During the year ended October 31, 1997, the Fund did not issue shares in
connection with the dividend reinvestment plan.
9
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
NOTE E: 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 invests 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.
NOTE F:YEAR 2000
Many computer software systems in use today cannot properly process
date-related information from and after January 1, 2000. Should any of the
computer systems employed by the Fund's major service providers fail to process
this type of information properly, that could have a negative impact on the
Fund's operations and the services that are provided to the Fund's
shareholders. The Adviser, as well as Alliance Fund Services, have advised the
Fund that they are reviewing all of their computer systems with the goal of
modifying or replacing such systems prior to January 1, 2000, to the extent
necessary to foreclose any such negative impact. In addition, the Adviser has
been advised by the Fund's custodian that it is also in the process of
reviewing its systems with the same goal. As of the date of this report, the
Fund and the Adviser have no reason to believe that these goals will not be
achieved. Similarly, the values of certain of the portfolio securities held by
the Fund may be adversely affected by the inability of the securities' issuers
or of third parties to process this type of information properly.
10
FINANCIAL HIGHLIGHTS ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS NOVEMBER 2,
ENDED YEAR ENDED OCTOBER 31, 1992(A) TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.03 $15.50 $11.88 $11.08 $22.09 $13.82(b)
INCOME FROM INVESTMENT OPERATIONS
Net investment income .71(c) 1.61 1.46 1.51(c) 1.32 1.54
Net realized and unrealized gain (loss)
on investments 1.43 .50 3.50 .71 (5.66) 8.19
Net increase (decrease) in net asset
value from operations 2.14 2.11 4.96 2.22 (4.34) 9.73
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.89) (1.58) (1.34) (1.42) (1.39) (1.46)
Distributions from net realized gains (2.06) -0- -0- -0- (4.96) -0-
Distributions in excess of net
realized gains -0- -0- -0- -0- (.09) -0-
Tax return of capital distribution -0- -0- -0- -0- (.23) -0-
Total dividends and distributions (2.95) (1.58) (1.34) (1.42) (6.67) (1.46)
Net asset value, end of period $15.22 $16.03 $15.50 $11.88 $11.08 $22.09
Market value, end of period $15.9375 $15.875 $13.625 $11.75 $13.00 $20.375
TOTAL RETURN
Total investment return based on: (d)
Market value 20.94% 28.74% 28.49% 2.78% (7.52)% 59.14%
Net asset value 14.38% 14.24% 44.57% 21.92% (27.29)% 72.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $121,713 $138,709 $134,140 $102,757 $93,528 $164,622
Ratio of expenses to average net assets 1.49%(e) 1.43% 1.70% 1.55% 1.43% 1.44%(e)
Ratio of net investment income to average
net assets 9.16%(e) 9.50% 10.84% 14.12% 9.08% 9.79%(e)
Portfolio turnover rate 102% 281% 352% 441% 395% 417%
</TABLE>
(a) Commencement of operations.
(b) Net of offering costs of $.13.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
the period reported. Dividends and distributions, if any, are assumed, for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment Plan. Generally, total investment return based on
net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or a decrease in
the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net asset
value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return calculated for a period of less than one
year is not annualized.
(e) Annualized.
11
ADDITIONAL INFORMATION ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of Shareholders of the Alliance World Dollar Government Fund
was held on March 31, 1998. The description of each proposal and number of
shares voted at the meeting are as follows:
SHARES SHARES VOTED
VOTED FOR WITHOUT AUTHORITY
- -------------------------------------------------------------------------------
1. To elect directors: Class One Directors
(term expires 2001)
David H. Dievler 4,891,345 133,224
Clifford L. Michel 4,893,205 131,364
Donald J. Robinson 4,891,555 133,014
SHARES SHARES VOTED SHARES VOTED
VOTED FOR AGAINST ABSTAIN
- -------------------------------------------------------------------------------
2. To ratify the selection of
Ernst & Young LLP as the
Fund's independent auditors
for the Fund's fiscal year
ending October 31, 1998: 4,888,090 25,357 111,123
12
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN
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)
ROBERT C. WHITE (1)
OFFICERS
WAYNE D. LYSKI, PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL J. DENOON, VICE PRESIDENT
VICKI L. FULLER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT, L.P.
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR
FIRST DATA INVESTOR SERVICES GROUP, INC.(FORMERLY THE SHAREHOLDER SERVICES
GROUP, INC.)
53 State Street
Boston, MA 02109
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
LEGALCOUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY10004
(1) Member of the Audit Committee.
13
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
Summary of General Information
THE FUND
Alliance World Dollar Government Fund is a closed-end management investment
company which seeks high current income from investment in debt obligations of
countries with emerging economies whose recent interest rates are higher than
those of the United States.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transactions Section of newspapers each day, under the
designation "Alliance Wrld". The Fund's NYSE trading symbol is "AWG". Weekly
comparative net asset value (NAV) and market price information about the Fund
is published each Monday in THE WALL STREET JOURNAL, each Sunday in the NEW
YORK TIMES and each Saturday in BARRON'S and other newspapers in a table called
"Closed-End Funds."
DIVIDEND REINVESTMENT PLAN
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains distributions in additional Fund shares.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call First Data
Investor Services Group at 1-800-331-1710.
ALLIANCE WORLD DOLLAR GOVERNMENT FUND
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
WDGSR
