Alliance Global Dollar
Government Fund, Inc.
Annual Report
August 31, 1995
Alliance
Mutual Funds without the Mystery
Letter To Shareholders Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
October 9, 1995
Dear Shareholder:
The U.S. bond market staged an impressive, broad-based rally in the first nine
months of 1995. The rally was sparked, in large part, by a slowing U.S.
economy, moderating inflationary pressures and a shift in Federal Reserve
monetary policy. Outside the U.S., emerging market and other foreign debt
prices also rose sharply in response to positive developments in Mexico and
Argentina.
INVESTMENT RESULTS
The following table compares Alliance Global Dollar Government Fund's total
returns over the twelve- and six-month periods ended August 31, 1995, with that
of the overall Brady bond market, represented by the J.P. Morgan (JPM) Emerging
Markets Bond Index. The Fund benefited from the recent bond market gains,
though twelve-month performance was restrained by the difficult market
conditions that existed in 1994 and early 1995. Over the past six months,
however, Fund performance significantly improved.
Twelve Months Six Months
Through August 31, 1995
----------------------------
Alliance Global Dollar Government Fund
Class A -1.48% +25.16%
Class B -2.40% +24.56%
Class C -2.36% +24.58%
JPM Emerging
Markets Bond Index +3.52% +22.27%
The Fund's total returns are based on the net asset values of each class of
shares as of August 31; additional investment results and a complete
description of the Fund's benchmark, which is unmanaged, appear on pages 3 and
4.
THE U.S. ECONOMIC ENVIRONMENT
The U.S. economy experienced a slowdown in the first six months of 1995. In the
second quarter, Gross Domestic Product growth fell to 1.3%, reflecting declines
in industrial production and lower final sales growth. More recent data,
however, point to a modest reacceleration in economic growth. The pickup in
economic growth is largely the result of increased consumer spending,
particularly in the automobile and housing sectors. Excluding automobile sales,
third quarter retail sales data have been flat, as gains in personal income and
high consumer confidence have not translated into improved sales. The
manufacturing sector appears to be recovering, after slumping for much of the
year. Industrial production rose modestly in July, followed by a sharp increase
in August. Despite the recent increase in economic activity, concerns regarding
inflation have largely subsided. Broad price indices such as the Consumer Price
Index and Producer Price Index have risen very modestly and labor costs remain
under control. The favorable inflation outlook and the continued sluggishness
of the economy led the Federal Reserve to cut interest rates 0.25% in early
July.
BOND MARKET REVIEW
Since January, the U.S. bond market has posted impressive gains across nearly
all fixed income sectors. The rally was sparked, in large part, by the
aforementioned economic developments. Investment grade and high yield corporate
securities were the best performing sectors. Treasury and mortgage obligations
also performed well, though mortgage returns were tempered by higher prepayment
activity. Across all major sectors of the U.S. fixed income market, longer
duration securities outperformed shorter duration securities as interest rates
for all maturities declined. Outside the U.S., emerging market and other
foreign debt prices rebounded sharply since March. Positive developments in
Mexico and Argentina have helped to restore investor confidence in all emerging
markets.
INVESTMENT OUTLOOK
It is our view that U.S. economic growth will reaccelerate modestly in the
second half of the year, to an annual growth rate of approximately 2.5%. This
projected rate of economic growth should not add significantly to inflationary
pressures, allowing the Federal Reserve to cut interest rates again if growth
stalls. If our forecast proves correct, the result should be further gains in
U.S. bond prices.
1
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
The outlook for emerging markets has significantly improved from earlier in the
year. Mexico and Argentina have both successfully implemented the initial
stages of their respective economic recovery plans. Mexico's current account
deficit has declined dramatically and inflation and interest rates have fallen
after rising earlier in the year. While the Mexican economy is currently in a
deep recession, it is our expectation that economic activity will recover as a
result of lower interest rates. In Argentina, the current account deficit has
improved significantly and inflation remains low. Looking forward, we believe
that Argentine President Menem will continue to effectively address the
country's economic concerns and maintain its commitment to the currency
convertibility system.
Brazil and Poland may offer the best investment opportunities in emerging
markets over the next six months. It is our expectation that Brazilian debt
will outperform obligations of other Latin American countries as a result of
improving economic conditions and a possible debt buy-back program that would
help boost bond prices over the near term. Similarly, Polish debt obligations
should outperform other non-Latin debt as the country continues its impressive
economic growth.
We appreciate your continued interest in Alliance Global Dollar Government Fund
and look forward to reporting its progress to you early in 1996.
Sincerely,
John D. Carifa
Chairman
Wayne D. Lyski
President
2
Investment Results Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Average Annual Total Return as of August 31, 1995
CLASS A SHARES
Without With
Sales Charge Sales Charge
---------------------------
. One Year -1.48% -5.72%
. Since Inception* -3.45 -6.15
SEC Yield 10.52%
CLASS B SHARES
Without With
Sales Charge Sales Charge
---------------------------
. One Year -2.40% -5.03%
. Since Inception* -4.30 -5.39
SEC Yield 10.28%
CLASS C SHARES
. One Year -2.36%
. Since Inception* -4.27
SEC Yield 10.250%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (3% year 1, 2% year 2, 1% year 3, 0% year 4);
Class C shares are not subject to front-end or contingent deferred sales
charges. 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. Yields are for the 30 days
ended August 31, 1995.
* Inception: 2/25/94 for all Classes.
3
Alliance Global Dollar Government Fund, Inc.
Alliance Global Dollar Government Fund
$10,000 Investment Over Life Of Fund:
2/28/94 to 8/31/95
$10,000
$9,000
$8,000
$7,000
$6,000
JPMEMBI:
$9,896
Global Dollar
Government Fund Class A: $9,081
2/28/94 8/31/95
This chart illustrates the total value of an assumed investment in Alliance
Global Dollar Government Fund Class A shares (since inception) after deducting
the maximum 4.25% sales charge, and with dividends and capital gains
reinvested. 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 J.P. Morgan Emerging Markets Bond Index (JPMEMBI) is an unmanaged index
composed of dollar-denominated restructured sovereign bonds; a large percentage
of the index is made up of Brady bonds.
When comparing Alliance Global Dollar Government Fund to the index shown
above, you should note that the Fund's performance reflects the maximum sales
charge of 4.25% while no such charges are reflected in the performance of the
index.
4
Portfolio Of Investments
August 31, 1995 Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Principal
Amount
(000) U.S. $Value
- ------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-73.1%
COLLATERALIZED BRADY BONDS*-37.3%
ARGENTINA-5.5%
Republic of Argentina
ParBonds FRN
5.00%, 3/31/23(a)
(cost $4,745,255) $ 9,750 $4,625,156
BRAZIL-3.5%
Republic of Brazil
ParBonds Ser. YL4 FRN(a)
4.25%, 4/15/24
(cost $3,004,167) 6,500 2,967,640
ECUADOR-5.9%
Republic of Ecuador
Discount Bonds FRN
6.812%, 2/28/25(a)
(cost $4,841,653) 10,000 4,950,000
JORDAN-3.8%
Kingdom of Jordan
Par Bonds VRN
4.00%, 12/23/23(a)
(cost $3,453,444) 7,225 3,143,072
MEXICO-4.7%
United Mexican States
Euro Par Bonds Ser. B.
6.25%, 12/31/19(c)
(cost $3,745,161) 6,500 3,946,703
NIGERIA-4.2%
Central Bank of Nigeria
Par Bonds VRN
6.25%, 11/15/20(a)
(cost $3,544,437) 8,000 3,520,000
VENEZUELA-9.7%
Republic of Venezuela
Series W-A, Par Bonds
6.75%, 3/31/20
(cost $8,146,836) 16,000 8,095,000
Total Collateralized
Brady Bonds
(cost $31,480,953) $31,247,571
LOAN PARTICIPATIONS & ASSIGNMENTS-6.3%
MOROCCO-4.4%
Kingdom of Morocco
Loan Participation FRN
7.375%, 1/01/09(a)
(cost $4,247,045) 6,000 3,671,250
RUSSIA-1.9%
Vneshekonombank
Loan Assignment(b)
(cost $1,612,500) 5,000 1,576,563
Total Loan Participations &
Assignments
(cost $5,859,545) 5,247,813
OTHER SOVEREIGN DEBT OBLIGATIONS-29.5%
ARGENTINA-7.3%
Republic of Argentina FRB
7.313%, 3/31/05(a)
(cost $6,078,860) 10,000 6,125,000
BRAZIL-6.3%
Republic of Brazil
C-Bonds
8.00%, 4/15/14(d)
(cost $5,562,056) 10,706 5,322,775
BULGARIA-4.4%
Bulgaria IAB FRN(a)
6.75%, 7/28/11
(cost $2,909,904) 8,500 3,742,635
ECUADOR-2.5%
Republic of Ecuador
FRN PDI(a)(e)
7.25%, 2/27/15
(cost $2,639,468) 6,762 2,096,294
5
Portfolio Of Investments (continued)
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Principal
Amount
(000) U.S. $Value
- ------------------------------------------------------------
POLAND-9.0%
Republic of Poland PDI FRN(a)
3.25%, 10/27/14
(cost $6,974,297) $12,250 $7,503,125
Total Other Sovereign
Debt Obligations
(cost $24,164,585) 24,789,829
Total Sovereign
Debt Obligations
(cost $61,505,083) 61,285,213
CORPORATE DEBT OBLIGATIONS-15.1%
YANKEE obligations-9.3%
Companhia Brasil De
Projertos Oderbrecht
12.50%, 12/22/97(f) 2,000 1,985,000
Consorcio Groupo Dina 'G',
S.A. de C.V.
10.50%, 11/18/97 4,000 2,880,000
Metrogas, S.A.
12.00%, 8/15/00(f) 3,000 2,958,750
Total Yankee Obligations
(cost $8,651,966) 7,823,750
INDUSTRIAL-5.8%
Communications & Power Industry
12.00%, 8/01/05(f) 1,840 1,863,000
Ralphs Grocery Co.
10.45%, 6/15/04 3,000 2,951,250
Total Industrial
(cost $4,825,261) 4,814,250
Total Corporate Debt Obligations
(cost $13,477,227) 12,638,000
Shares, Contracts
or Principal
Amount
(000) U.S.$ Value
- ------------------------------------------------------------
OTHER SOVEREIGN DEBT RELATED-4.8%
Bayerische Landesbank
Spread Note
U.S. Treasury Bond
6.25%, 8/15/23 vs
Brazil Par Bond 4.00%, 4/15/24
9.125%, 9/28/95(g)
(cost $2,000,000) $ 2,000 $ 1,666,100
Morgan Guaranty Trust
Indexed to Argentina
Spread Note
9.00%, 1/19/96(g)
(cost $1,244,391) 1,244 1,116,723
Morgan Guaranty Trust
Indexed to Ivory Coast
Restructured Loan Assignment
9.00%, 12/19/95(g)
(cost $314,548) 315 303,759
Morgan Guaranty Trust
Indexed to Russian
Vneshekonombank
Loan Assignment
10.00%, 1/23/96(g)
(cost $884,730) 885 938,963
Total Other Sovereign
Debt Related
(cost $4,443,669) 4,025,545
PREFERRED STOCK-0.5%
Prime Retail, Inc.
Series A, 10.50%
(cost $500,000) 20,000 382,500
CALL OPTION PURCHASED-0.0%
Republic of Argentina
Euro Par Bonds FRB
expiring September 1995
@ $72.50
(cost $600) 60 -0-
6
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Contracts U.S. $Value
- ------------------------------------------------------------
TOTAL INVESTMENTS-93.5%
(cost $79,926,579) $78,331,258
PUT OPTION WRITTEN-(0.5)%
Republic of Argentina
Euro Par Bonds FRB
expiring September 1995
@ $68.50
(Premium received $588,600) 60 (431,112)
U.S. $Value
- ------------------------------------------------------------
TOTAL INVESTMENTS, NET OF OUTSTANDING
PUT OPTION WRITTEN-93.0% $77,900,146
Other assets less liabilities-7.0% 5,855,365
NET ASSETS-100% $83,755,511
* Sovereign debt obligations issued as part of debt restructuring 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.
(a) Stated interest rate in effect at August 31,1995.
(b) Non-income producing security.
(c) Security trades with value recovery rights expiring June 30, 2003.
(d) Coupon consists of 4.00% cash payment and 4.00% paid-in-kind.
(e) Coupon consists of 3% cash payment and 4.25% paid in kind.
(f) 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 August 31, 1995
these securities amounted to $6,806,750 representing 8.13% of net assets.
(g) The redemption value of these securities is indexed to the spread between
the referenced treasury yield and the referenced emerging market debt yield.
Glossary of Terms:
FRB - Floating rate bonds.
FRN - Floating rate note.
IAB - Interest arrears bond.
PDI - Past due Interest.
VRN - Variable rate notes.
See notes to financial statements.
7
Statement Of Assets And Liabilities
August 31, 1995 Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $79,926,579) $78,331,258
Cash 3,760,283
Interest receivable 2,262,176
Receivable for investment securities sold 1,440,208
Receivable for capital stock sold 172,364
Deferred organizational expense 128,577
Total assets 86,094,866
LIABILITIES
Outstanding put option written, at value(premium received $588,600) 431,112
Payable for investment securities purchased 1,201,250
Dividends payable 280,014
Payable for capital stock redeemed 125,777
Distribution fee payable 62,880
Advisory fee payable 52,452
Accrued expenses 185,870
Total liabilities 2,339,355
NET ASSETS $83,755,511
COMPOSITION OF NET ASSETS
Capital stock, at par $10,441
Additional paid-in capital 93,230,128
Distributions in excess of net investment income (135,637)
Accumulated net realized loss on investments (7,910,992)
Net unrealized depreciation of investments and other assets (1,438,429)
$83,755,511
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($12,020,009/
1,498,940 shares of capital stock issued and outstanding) $8.02
Sales charge-4.25% of public offering price 0.36
Maximum offering price $8.38
CLASS B SHARES
Net asset value and offering price per share ($62,405,890/
7,777,873 shares of capital stock issued and outstanding) $8.02
CLASS C SHARES
Net asset value,redemption and offering price per share ($9,329,612/
1,163,138 shares of capital stock issued and outstanding) $8.02
See notes to financial statements.
8
Statement Of Operations
Year Ended August 31, 1995 Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
INVESTMENT INCOME
Interest $9,051,389
Dividends 118,034 $ 9,169,423
EXPENSES
Advisory fee 522,850
Distribution fee - Class A 31,261
Distribution fee - Class B 501,675
Distribution fee - Class C 91,244
Transfer Agency 133,819
Audit and Legal 110,438
Custodian 98,819
Administrative 85,688
Printing 57,197
Registration 49,044
Amortization of organization expenses 37,578
Director's fees 26,554
Miscellaneous 19,670
Total expenses 1,765,837
Net investment income 7,403,586
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS
Net realized loss on security transactions (5,559,355)
Net realized loss on option transactions (673,115)
Net change in unrealized appreciation of:
Investments (2,578,379)
Option and other assets 155,873
Net loss on investments (8,654,976)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(1,251,390)
See notes to financial statements.
9
Statement Of Changes
In Net Assets Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Year Ended Feb. 25,1994*
August 31, to
1995 Aug. 31,1994
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 7,403,586 $2,071,990
Net loss on investments (6,232,470) (1,678,522)
Net change in unrealized appreciation of
investments and other assets (2,422,506) 984,077
Net increase (decrease) in net assets from
operations (1,251,390) 1,377,545
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,208,666) (384,490)
Class B (5,358,271) (1,353,757)
Class C (975,155) (330,874)
CAPITAL STOCK TRANSACTIONS
Net increase 24,118,989 69,021,380
Total increase 15,325,507 68,329,804
NET ASSETS
Beginning of year 68,430,004 100,200
End of year (including undistributed net
investment income of $2,869, at August 31,1994) $83,755,511 $68,430,004
* Commencement of operations
See notes to financial statements.
10
Notes To Financial Statements
August 31, 1995 Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
Alliance Global Dollar Government Fund, Inc. (the 'Fund'), organized as a
Maryland corporation on December 2, 1993, is registered under the Investment
Company Act of 1940 as an open-end, non-diversified management investment
company. Prior to the commencement of operations on February 25, 1994, the Fund
had no operations other than the sale to Alliance Capital Management L.P. (the
'Adviser') of 10,000 shares of Class A and 10 shares of Class B and Class C
shares of common stock for the aggregate amount of $100,200 on January 21,
1994. The Fund offers three classes of shares. Class A shares are sold with a
front-end sales charge of up to 4.25%. 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 sold without an initial or contingent deferred
sales charge. All three classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan.
1. Security Valuation
Portfolio securities traded on a national securities exchange are valued at the
last sales 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. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recently quoted bid and asked price
provided by the principle market makers. Publicly traded Sovereign Debt
Obligations are typically traded internationally on the over-the-counter
market. Readily marketable Sovereign Debt Obligations may be valued on the
basis of prices provided by a pricing service when such prices are believed by
the Adviser to reflect the fair value of such securities. Securities for which
market quotations are not readily available and restricted securities which are
subject to limitations as to their resale 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.
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.
2. Organization Expenses
Organization expenses of approximately $184,000 have been deferred and are
being amortized on a straight-line basis through February, 1999.
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 applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. Investment Income and Security Transactions
Interest income is accrued daily. Dividend income is recorded on the
ex-dividend date. Security transactions are accounted for on the date
securities are purchased or sold. Security gains and losses are determined on
the identified cost basis. The Fund accretes discounts as adjustments to
interest income.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
NOTE B: Advisory and Administrative Fees
Under the terms of an Investment Advisory Agreement, the Fund pays Alliance
Capital Management L.P. (the 'Adviser') a monthly fee equal to the annualized
rate of .75 of 1% of the average adjusted daily net assets of the Fund. Such
fee will be accrued daily and paid monthly. The Adviser has agreed, under the
terms of the investment advisory agreement, to reimburse the Fund to the extent
that the aggregate annual expenses (exclusive of interest, taxes, brokerage,
distribution services fees and extraordinary expenses, all to the extent
permitted by applicable state law and regulation) exceed the limits
11
Notes To Financial Statements
(continued) Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
prescribed by any state in which the Fund's shares are qualified for sale. The
Adviser believes that the most restrictive expense ratio limitation imposed by
any state is 2.5% of the first $30 million of its average daily net assets, 2%
of the next $70 million of its average daily net assets and 1.5% of its average
daily net assets in excess of $100 million.
No such reimbursement was required for the year ended August 31, 1995. The Fund
has a service agreement with Alliance Fund Services, Inc. (a wholly-owned
subsidiary of the Adviser) to provide personnel and facilities to perform
transfer agency services for the Fund. Compensation under this agreement
amounted to $67,699 for the year ended August 31, 1995. 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 $11,408 from the sale of Class A shares and $216,845 in contingent
deferred sales charges imposed upon redemptions by shareholders of Class B
shares for the year ended August 31, 1995.
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 1% 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. The fees are
accrued daily and paid monthly. The Agreement provides that the Distributor
will use such payments in their entirety for distribution assistance and
promotional activities. The Distributor has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $1,832,927, and
$174,111 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 fiscal year for Class A shares. The Agreement also provides that the
Adviser may use its own resources to finance the distribution of the Fund's
shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
aggregated $214,462,797 and $228,752,246, respectively, for the year ended
August 31, 1995.
At August 31, 1995, the cost of securities for federal income tax purposes was
$80,891,326. Accordingly, gross unrealized appreciation of investments was
$1,566,481 and gross unrealized depreciation was $3,969,061 resulting in net
unrealized depreciation of $2,402,580.
1. Options Transactions
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a clos-
12
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
ing purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase transaction, as a realized loss. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security or
currency in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the security or
currency purchased by the Fund. In writing an option, the Fund bears the market
risk of an unfavorable change in the price of the security or currency
underlying the written option. Exercise of an option written by the Fund could
result in the Fund selling or buying a security or currency at a price
different from the current market value.
Transactions in put options written for the year ended August 31, 1995 were as
follows:
Number of
Contracts Premium
--------- -----------
Options outstanding at beginning of period -0- $ -0-
Options written 290 1,604,450
Options terminated in closing purchase
transactions (170) (904,850)
Options expired (60) (111,000)
Options outstanding at August 31, 1995 60 $ 588,600
NOTE E: Capital Stock
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
-------------------------- --------------------------
Year Ended Feb. 25,1994* Year Ended Feb. 25,1994*
August 31, to August 31, to
1995 Aug. 31,1994 1995 Aug. 31,1994
----------- ------------ ------------ ------------
Class A
Shares sold 939,599 1,255,865 $ 7,111,993 $11,495,551
Shares issued in
reinvestment of
dividends 87,837 23,857 681,938 208,694
Shares redeemed (731,811) (86,407) (5,661,952) (766,001)
Net increase 295,625 1,193,315 $ 2,131,979 $10,938,244
Class B
Shares sold 4,834,175 5,452,348 $38,167,334 $50,206,353
Shares issued in
reinvestment of
dividends 304,146 66,347 2,379,932 578,396
Shares redeemed (2,504,226) (374,927) (18,823,774) (3,325,848)
Net increase 2,634,095 5,143,768 $21,723,492 $47,458,901
Class C
Shares sold 1,184,103 1,336,256 $ 9,605,468 $12,393,427
Shares issued in
reinvestment of
dividends 70,463 18,446 554,186 160,664
Shares redeemed (1,229,437) (216,703) (9,896,136) (1,929,856)
Net increase 25,129 1,137,999 $ 263,518 $10,624,235
* Commencement of operations.
13
Notes To Financial Statements
(continued) Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
NOTE F: Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include revaluation of currency and future adverse
political and economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and
their prices more volatile than those of comparable U.S. companies and 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.
14
Financial Highlights Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Selected Data For A Share of Capital Stock Outstanding Throughout The Period
CLASS A
--------------------------
Year Ended Feb. 25, 1994*
August 31, to
1995 Aug. 31,1994
---------- --------------
Net asset value, beginning of period $ 9.14 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .86 .45
Net realized and unrealized loss on investments (1.10) (.86)
Net decrease in net asset value from operations (.24) (.41)
LESS: DISTRIBUTIONS
Dividends from net investment income (.88) (.45)
Total dividends (.88) (.45)
Net asset value, end of period $ 8.02 $ 9.14
TOTAL RETURN
Total investment return based on net asset value (a) (1.48)% (3.77)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,020 $10,995
Ratio to average net assets of:
Expenses, net of waivers and reimbursements 1.93% .75%(b)
Expenses, before waivers and reimbursements 1.93% 1.91%(b)
Net investment income 11.25% 9.82%(b)
Portfolio turnover rate 301% 100%
See footnote summary on page 17.
15
Financial Highlights (continued) Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Selected Data For A Share of Capital Stock Outstanding Throughout The Period
CLASS B
--------------------------
Year Ended Feb. 25,1994*
August 31, to
1995 Aug. 31,1994
---------- --------------
Net asset value, beginning of period $ 9.14 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .80 .42
Net realized and unrealized loss on investments (1.11) (.86)
Net decrease in net asset value from operations (.31) (.44)
LESS: DISTRIBUTIONS
Dividends from net investment income (.81) (.42)
Total dividends (.81) (.42)
Net asset value, end of period $ 8.02 $ 9.14
TOTAL RETURN
Total investment return based on net asset value (a) (2.40)% (4.17)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $62,406 $47,030
Ratio to average net assets of:
Expenses, net of waivers and reimbursements 2.64% 1.45%(b)
Expenses, before waivers and reimbursements 2.64% 2.63%(b)
Net investment income 10.52% 9.11%(b)
Portfolio turnover rate 301% 100%
See footnote summary on page 17.
16
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
Selected Data For A Share of Capital Stock Outstanding Throughout The Period
CLASS C
--------------------------
Year Ended Feb. 25,1994*
August 31, to
1995 Aug. 31,1994
---------- --------------
Net asset value, beginning of period $ 9.14 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .79 .42
Net realized and unrealized loss on investments (1.10) (.86)
Net decrease in net asset value from operations (.31) (.44)
LESS: DISTRIBUTIONS
Dividends from net investment income (.81) (.42)
Total dividends (.81) (.42)
Net asset value, end of period $ 8.02 $ 9.14
TOTAL RETURN
Total investment return based on net asset value (a) (2.36)% (4.16)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 9,330 $10,404
Ratio to average net assets of:
Expenses, net of waivers and reimbursements 2.63% 1.45%(b)
Expenses, before waivers and reimbursements 2.63% 2.59%(b)
Net investment income 10.46% 9.05%(b)
Portfolio turnover rate 301% 100%
* Commencement of operations.
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(b) Annualized.
17
Report Of Ernst & Young llp
Independent Auditors Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
To the Shareholders and Board of Directors
Alliance Global Dollar Government Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Alliance GlobalDollar Government Fund, Inc. (the 'Fund'), including the
portfolio of investments, as of August 31, 1995, and the related statement of
operations for the year then ended, and the statement of changes in net assets
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
August 31, 1995 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 Global Dollar Government Fund, Inc. at August 31, 1995, the results of
its operations for the year then ended, and the changes in its net assets and
the financial highlights for each of the indicated periods, in conformity with
generally accepted accounting principles.
New York, New York
October 16, 1995
18
Alliance Global Dollar Government Fund, Inc.
_______________________________________________________________________________
BOARD OF DIRECTORS
John D. Carifa, Chairman
Ruth Block (1)
David H. Dievler (1)
John H. Dobkin (1)
William H. Foulk, Jr. (1)
Mr. James M. Hester (1)
Clifford L. Michel (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
Patrick J. Farrell, Controller
PRINCIPAL UNDERWRITER
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN
The Bank of New York
48 Wall Street
New York, N.Y. 10286
TRANSFER AGENT
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
19
Alliance Global Dollar Government Fund, Inc.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
AllianceCapital A
Mutual funds without the Mystery.SM
This report is distributed solely to shareholders of the Fund
and is not to be used as sales literature.
R These registered service marks used under license from the owner,
Alliance Capital Management L.P.
GDGAR
