ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
SEMI-ANNUAL REPORT
FEBRUARY 29, 1996
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
April 5, 1996
Dear Shareholder:
The Global Dollar Government Fund's February 29, 1996, semi-annual reporting
period closely coincided with the completion of its second year of operations
on February 25. Despite hitting some rough spots in world bond markets over the
course of those two years, we're glad to report that your Fund's extraordinary
returns over the 12 months ended February 29 placed it at the top of all
general world income funds tracked by Lipper-based on Class A shares' total
return. Of the 140 funds included in this peer group, the Fund's Class C shares
ranked #2 and Class B shares ranked #3.
INVESTMENT RESULTS
The following table shows how your Fund performed in the periods ended February
29, and for comparison we've shown returns for the unmanaged J.P. Morgan (JPM)
Emerging Markets Bond Index, which measures performance of the overall Brady
bond market. The Index provides an appropriate broad-based comparison for the
Global Dollar Government Fund because it is made up of dollar-denominated
restructured sovereign bonds, of which a large percentage is represented by
Brady bonds.
Total Return
Periods Ended February 29, 1996
Six Months Twelve Months
---------- -------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
Class A +18.20% +47.91%
Class B +17.70% +46.59%
Class C +17.72% +46.63%
JPM EMERGING MARKETS BOND INDEX +15.32% +41.00%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
FEBRUARY 29; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
The U.S. bond market enjoyed a sustained broad-based rally throughout most of
1995 and into early 1996, but economic news led to a setback in February. The
market reacted negatively to the stronger-than-expected job growth in the U.S.
and doubts about whether the Federal Reserve would lower interest rates again.
Outside the U.S., emerging market and other foreign debt prices rose sharply as
positive developments in Latin America and Central Europe encouraged foreign
investors.
ECONOMIC REVIEW
The U.S. economy survived an inventory scare in 1995 and entered '96 in a
relatively balanced and healthy condition. The latest economic data show the
U.S. economy's 'soft landing' is still intact. February's shocking payroll gain
grabbed headlines, but the 12-month comparisons were all numbers that support a
soft landing. Consumer confidence has bounced back, debt service burdens are
still manageable, and February retail sales had their best showing since last
summer, climbing 5% on a year-on-year basis. Manufacturing is likely to remain
a soft spot, although new orders for durable goods are showing hidden strength
and unfilled orders continue to rise. Revised data show the much-feared
slowdown in capital spending has already occurred. A gradual re-strengthening
in the U.S. economy is expected over the next six to 12 months.
Measured inflation at the consumer and producer levels remains well behaved and
the U.S. economy continues to operate in the inflation 'safe zone.' However,
recent increases in unit labor costs and commodity prices warn against
complacency. Federal Reserve policy has moved into a holding pattern, and
chances for a meaningful deficit reduction plan have receded as politicians
increasingly turn their attention to the 1996 election campaign.
INVESTMENT OUTLOOK
The U.S. economy appears to be healthy, with modest growth expected in the
period ahead and falling into the 2%-2.5% range by year end. With a gradually
strengthening economy and steady inflation, we expect no Federal Reserve action
on interest rates over the medium term. If our forecast proves correct, the
result should be steady U.S. bond prices.
We continue to have a favorable outlook for emerging market debt securities.
Moderate growth in the U.S., stable inflation and steady bond prices provide a
strong positive environment for this area of fixed income investing. Further,
emerging market countries continue to
1
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
follow policies leading to improving fundamentals. The last 15 months have
proved to be a difficult period, but in general, the reform process has not
been halted. We continue to believe that Argentina and Poland provide very
good risk/return profiles. Argentina has held steady to the economic policies
designed to keep inflation around 2.0%, and bank deposits and international
reserves have returned to levels existing prior to the Mexican peso devaluation
in December 1994. Poland's Brady bonds received an investment-grade rating from
Moody's Investor Services in January, highlighting Poland's improving credit
fundamentals. This rating is a breakthrough event as it proves that Brady bonds
can receive investment-grade ratings if the countries undertake necessary
economic reforms. Since an investment-grade rating broadens the investor base
for Brady bonds, it can also lead to a considerable narrowing of yield spreads
resulting from increased demand. Between the end of December and the end of
January, the yield spreads on Polish Brady bonds narrowed over 200 basis
points, or about 2%, versus U.S. Treasury securities due largely to the rating
upgrade.
Some of the significant factors that could affect emerging market bond prices
in the coming months include elections in Russia and Ecuador, the International
Monetary Fund agreement on economic reforms in Brazil, and ongoing resolution
of the banking system problems in Mexico.
Thank you for your interest in Alliance Global Dollar Government Fund. 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
President
2
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
OBJECTIVE AND POLICIES
Alliance Global Dollar Government Fund seeks primarily a high level of current
income and, secondarily, capital appreciation. It invests primarily in a
non-diversified portfolio of sovereign debt obligations and in U.S. and
non-U.S. corporate fixed-income securities. Substantially all of the Fund's
assets are invested in lower-rated securities.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF FEBRUARY 29, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +47.91% +41.67%
. Since Inception* +5.82% +3.57%
SEC Yield 9.74%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +46.59% +43.59%
. Since Inception* +4.89% +4.47%
SEC Yield 9.41%
CLASS C SHARES
. One Year +46.63%
. Since Inception* +4.92%
SEC Yield 9.42%
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 February 29, 1996.
* Inception: 2/25/94 for all Classes.
3
PORTFOLIO OF INVESTMENTS
FEBRUARY 29, 1996 (UNAUDITED) ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- ------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-79.5%
COLLATERALIZED BRADY BONDS*-53.7%
ARGENTINA-15.5%
Republic of Argentina Par Bonds FRN
5.00%, 3/31/23(a) (cost $17,821,317) $29,940 $15,868,275
BRAZIL-7.5%
Republic of Brazil Par Bonds Ser. YL4 FRN
4.25%, 4/15/24(a) (cost $7,948,457) 15,000 7,668,750
BULGARIA-2.6%
Republic of Bulgaria FLIRB Par Bonds
2.00%, 7/28/12 (cost $2,785,207) 8,400 2,698,500
ECUADOR-6.7%
Republic of Ecuador Discount Bonds FRN
6.0625%, 2/28/25(a) (cost $6,345,279) 13,000 6,890,000
MEXICO-4.2%
United Mexican States Euro Par Bonds Ser. B.
6.25%, 12/31/19(b) (cost $4,206,090) 7,000 4,333,420
NIGERIA-5.1%
Central Bank of Nigeria Par Bonds VRN
6.25%, 11/15/20(a) (cost $5,326,792) 10,250 5,176,250
VENEZUELA-12.1%
Republic of Venezuela Series W-A, Par Bonds
6.75%, 3/31/20 (cost $11,714,393) 22,500 12,318,750
Total Collateralized Brady Bonds
(cost $56,147,535) 54,953,945
LOAN PARTICIPATION-6.4%
MOROCCO-6.4%
Kingdom of Morocco Loan Participation FRN
6.593%, 1/01/09(a) (cost $6,687,825) 10,000 6,550,000
OTHER SOVEREIGN DEBT OBLIGATIONS-19.4%
BULGARIA-5.5%
Bulgaria IAB FRN
6.25%, 7/28/11(a) (cost $5,306,496) 12,000 5,595,000
COLUMBIA-5.6%
Republic of Colombia,
8.70%, 2/15/16 (cost $5,694,180) 6,000 5,666,280
ECUADOR-2.7%
Republic of Ecuador FRN PDI
6.8125%, 2/27/15(a)(c)(d)
(cost $2,725,921) 6,893 2,757,317
PANAMA-2.8%
Republic of Panama
6/30/14(d) (cost $2,720,000) 6,000 2,820,000
4
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- ------------------------------------------------------------------------
POLAND-2.8%
Republic of Poland PDI FRN
3.75%, 10/27/14(a) (cost $2,720,823) $ 3,800 $ 2,833,375
Total Other Sovereign Debt Obligations
(cost $19,167,420) 19,671,972
Total Sovereign Debt Obligations
(cost $82,002,780) 81,175,917
CORPORATE DEBT OBLIGATIONS-10.7%
YANKEE OBLIGATIONS-8.8%
Companhia Brasil De Projertos Oderbrecht
12.50%, 12/22/97(d) 2,000 2,025,000
Consorcio 'G', Groupo Dina
10.50%, 11/18/97 4,000 3,000,000
OPPPetroquimica, SA
11.50%, 2/23/04(d) 4,000 4,010,000
Total Yankee Obligations (cost $9,734,937) 9,035,000
INDUSTRIAL-1.9%
Communications & Power Industry
12.00%, 8/01/05(d) (cost $1,840,000) 1,840 1,922,800
Total Corporate Debt Obligations
(cost $11,547,037) 10,957,800
U.S. GOVERNMENT OBLIGATIONS-13.9%
U.S. Treasury Note, 5.25%, 1/31/01 $ 5,000 $4,898,430
U.S. Treasury Stripped Bond
Zero coupon, 5/15/09 22,000 9,344,566
Total U.S. Government Obligations
(cost $15,071,785) 14,242,996
OTHER SOVEREIGN DEBT RELATED-9.6%
Morgan Guaranty Trust Indexed to Ivory
Coast Restructured Loan Assignment
9.00%, 03/02/96(e) (cost $390,000) 390 388,986
Morgan Guaranty Trust Indexed to
Republic of Poland PDI Bonds
10.00%, 7/25/96(e) (cost $2,450,000) 2,450 3,410,861
Morgan Guaranty Trust Indexed to Russian
Vneshekonombank Loan Assignment
10.00%, 7/23/96(e) 1,039 987,643
10.00%, 7/31/96(e) (cost $5,988,750) 4,950 4,985,145
Total Other Sovereign Debt Related
(cost $8,828,750) 9,772,635
5
PORTFOLIO OF INVESTMENTS (CONTINUED)
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $VALUE
- -------------------------------------------------------------------------
TIME DEPOSITS-0.7%
Bank of New York
5.0625%, 3/01/96 (cost $774,000) $ 774 $ 774,000
TOTAL INVESTMENTS-114.4%
(cost $118,224,352) $116,923,348
Other assets less liabilities-(14.4%) (14,700,344)
NET ASSETS-100% $102,223,004
* 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 February 29, 1996.
(b) Security trades with value recovery rights expiring June 30, 2003.
(c) Coupon consists of 3% cash payment and 3.8125% paid in kind.
(d) 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 February 29, 1996
these securities amounted to $13,535,117 representing 13.2% of net assets.
(e) 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:
FLIRB - Front loaded interest reduction bonds.
FRN - Floating rate note.
IAB - Interest arrears bond.
PDI - Past due interest.
VRN - Variable rate notes.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996 (UNAUDITED) ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $118,224,352) $116,923,348
Cash 553,828
Receivable for investment securities sold 16,446,476
Interest receivable 1,982,649
Receivable for capital stock sold 1,258,317
Deferred organizational expense 109,645
Total assets 137,274,263
LIABILITIES
Payable for investment securities purchased 33,811,676
Payable for capital stock redeemed 659,642
Dividends payable 260,279
Distribution fee payable 76,882
Advisory fee payable 64,753
Accrued expenses 178,027
Total liabilities 35,051,259
NET ASSETS $102,223,004
COMPOSITION OF NET ASSETS
Capital stock, at par $ 11,387
Additional paid-in capital 101,510,585
Distributions in excess of net investment income (722,483)
Accumulated net realized gain on investments 2,724,519
Net unrealized depreciation of investments and other assets (1,301,004)
$102,223,004
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($16,613,833/
1,850,672 shares of capital stock issued and outstanding) $8.98
Sales charge-4.25% of public offering price .40
Maximum offering price $9.38
CLASS B SHARES
Net asset value and offering price per share ($74,342,990/
8,281,128 shares of capital stock issued and outstanding) $8.98
CLASS C SHARES
Net asset value, redemption and offering price per share($11,266,181
/1,255,013 shares of capital stock issued and outstanding) $8.98
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED)
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 5,284,620
EXPENSES
Advisory fee $349,920
Distribution fee - Class A 21,394
Distribution fee - Class B 344,873
Distribution fee - Class C 50,372
Administrative 79,320
Transfer Agency 76,716
Custodian 48,055
Registration 46,350
Audit and Legal 36,035
Printing 23,822
Amortization of organization expenses 18,932
Director's fees 8,446
Miscellaneous 2,891
Total expenses 1,107,126
Net investment income 4,177,494
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on security transactions 10,478,011
Net realized gain on option transactions 157,500
Net change in unrealized depreciation of investments
and other assets 137,425
Net gain on investments 10,772,936
NET INCREASE IN NET ASSETS FROM OPERATIONS $14,950,430
See notes to financial statements.
8
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29,1996 AUGUST 31,
(UNAUDITED) 1995
------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 4,177,494 $ 7,403,586
Net gain (loss) on investments 10,635,511 (6,232,470)
Net change in unrealized appreciation
(depreciation) of investments and other assets 137,425 (2,422,506)
Net increase (decrease) in net assets from
operations 14,950,430 (1,251,390)
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (777,187) (1,208,666)
Class B (3,478,820) (5,358,271)
Class C (508,333) (975,155)
CAPITAL STOCK TRANSACTIONS
Net increase 8,281,403 24,118,989
Total increase 18,467,493 15,325,507
NET ASSETS
Beginning of year 83,755,511 68,430,004
End of period $102,223,004 $83,755,511
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996 (UNAUDITED) 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 prescribed
by any state in which the Fund's shares are qualified for sale. The Adviser
believes that the most
10
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
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 six months ended February 29, 1996.
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 $36,417 for the six months ended February 29, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $8,721 from the sale of Class A shares and $189,206
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended February 29, 1996.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A,
Class B and Class C shares. Under the Agreement, the Fund pays a distribution
fee to the Distributor at an annual rate of up to .30 of 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 $1,850,190, and
$212,083 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 $170,943,802 and $147,146,843, respectively, for the six months
ended February 29, 1996. There were purchases of $24,980,061 and sales of
$9,955,000 of U.S. Government and government agency obligations for the six
months ended February 29, 1996.
At February 29, 1996, the cost of securities for federal income tax purposes
was $118,722,966. Accordingly, gross unrealized appreciation of investments was
$2,664,624 and gross unrealized depreciation was $4,464,242 resulting in net
unrealized depreciation of $1,799,618.
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 dif-
11
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
ference between the premium and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is also treated as a realized
gain, or if the premium is less than the amount paid for the closing purchase
transaction, as a realized loss. If a call option is exercised, the premium is
added to the proceeds from the sale of the underlying security or currency in
determining whether the Fund has realized a gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security or currency
purchased by the Fund. In writing an option, the Fund bears the market risk of
an unfavorable change in the price of the security or currency underlying the
written option. Exercise of an option written by the Fund could result in the
Fund selling or buying a security or currency at a price different from the
current market value.
Transactions in options written for the six months ended February 29, 1996 were
as follows:
NUMBER OF
CONTRACTS PREMIUM
--------- ----------
Options outstanding at beginning of period 60 $ 588,600
Options written 15,000 124,500
Options terminated in closing purchase
transactions (15,060) (713,100)
Options outstanding at February 29, 1996 -0- $ -0-
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
----------------------------- -----------------------------
SIX MONTHS ENDED YEAR ENDE DSIX MONTHS ENDED YEAR ENDED
FEB. 29,1996 AUGUST 31, FEB. 29,1996 AUGUST 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
----------- ----------- ------------ ------------
CLASS A
Shares sold 653,274 939,599 $ 5,786,569 $ 7,111,993
Shares issued in
reinvestment of
dividends 41,191 87,837 354,717 681,938
Shares redeemed (342,733) (731,811) (3,016,121) (5,661,952)
Net increase 351,732 295,625 $ 3,125,165 $ 2,131,979
CLASS B
Shares sold 2,007,415 4,834,175 $17,591,450 $38,167,334
Shares issued in
reinvestment of
dividends 95,716 304,146 824,430 2,379,932
Shares redeemed (1,599,876) (2,504,226) (14,166,529) (18,823,774)
Net increase 503,255 2,634,095 $ 4,249,351 $21,723,492
CLASS C
Shares sold 426,055 1,184,103 $ 3,868,942 $ 9,605,468
Shares issued in
reinvestment of
dividends 19,669 70,463 169,250 554,186
Shares redeemed (353,849) (1,229,437) (3,131,305) (9,896,136)
Net increase 91,875 25,129 $ 906,887 $ 263,518
12
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.
13
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS A
-------------------------------------
SIX MONTHS FEB. 25,
ENDED YEAR ENDED 1994(C)
FEB. 29,1996 AUGUST 31, TO
(UNAUDITED) 1995 AUG.31,1994
------------- --------- -----------
Net asset value, beginning of period $8.02 $9.14 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .41 .86 .45
Net realized and unrealized gain (loss)
on investments 1.02 (1.10) (.86)
Net increase (decrease) in net asset
value from operations 1.43 (.24) (.41)
LESS: DISTRIBUTIONS
Dividends from net investment income (.47) (.88) (.45)
Total dividends (.47) (.88) (.45)
Net asset value, end of period $8.98 $8.02 $ 9.14
TOTAL RETURN
Total investment return based on net
asset value (a) 18.20% (1.48)% (3.77)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $16,614 $12,020 $10,995
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.78%(b) 1.93% .75%(b)
Expenses, before waivers and
reimbursements 1.78%(b) 1.93% 1.91%(b)
Net investment income 9.55%(b) 11.25% 9.82%(b)
Portfolio turnover rate 165% 301% 100%
See footnote summary on page 16.
14
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS B
------------------------------------
SIX MONTHS FEB. 25,
ENDED YEAR ENDED 1994(C)
FEB. 29,1996 AUGUST 31, TO
(UNAUDITED) 1995 AUG.31,1994
------------ --------- -----------
Net asset value, beginning of period $8.02 $9.14 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .38 .80 .42
Net realized and unrealized gain(loss)
on investments 1.02 (1.11) (.86)
Net increase (decrease) in net asset
value from operations 1.40 (.31) (.44)
LESS: DISTRIBUTIONS
Dividends from net investment income (.44) (.81) (.42)
Total dividends (.44) (.81) (.42)
Net asset value, end of period $8.98 $8.02 $ 9.14
TOTAL RETURN
Total investment return based on net
asset value (a) 17.70% (2.40)% (4.17)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $74,343 $62,406 $47,030
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 2.48%(b) 2.64% 1.45%(b)
Expenses, before waivers and
reimbursements 2.48%(b) 2.64% 2.63%(b)
Net investment income 8.85%(b) 10.52% 9.11%(b)
Portfolio turnover rate 165% 301% 100%
See footnote summary on page 16.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS C
------------------------------------
SIX MONTHS FEB. 25,
ENDED YEAR ENDED 1994(C)
FEB. 29,1996 AUGUST 31, TO
(UNAUDITED) 1995 AUG.31,1994
------------ --------- -----------
Net asset value, beginning of period $8.02 $9.14 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .38 .79 .42
Net realized and unrealized gain (loss)
on investments 1.02 (1.10) (.86)
Net increase (decrease) in net asset
value from operations 1.40 (.31) (.44)
LESS: DISTRIBUTIONS
Dividends from net investment income (.44) (.81) (.42)
Total dividends (.44) (.81) (.42)
Net asset value, end of period $8.98 $8.02 $ 9.14
TOTAL RETURN
Total investment return based on net
asset value (a) 17.72% (2.36)% (4.16)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11,266 $9,330 $10,404
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 2.48%(b) 2.63% 1.45%(b)
Expenses, before waivers and
reimbursements 2.48%(b) 2.63% 2.59%(b)
Net investment income 8.85%(b) 10.46% 9.05%(b)
Portfolio turnover rate 165% 301% 100%
(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.
(c) Commencement of operations.
16
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.
17
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT
SHAREHOLDERS OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
GDGSR
