EMERGING MARKET FIXED INCOME
[GRAPHIC OMITTED]
Alliance Global
Dollar Government
Fund
Semi-Annual Report
February 29, 2000 (unaudited)
AllianceCapital[LOGO](R)
The Investment Professional's Choice
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Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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LETTER TO SHAREHOLDERS
LETTER TO SHAREHOLDERS
April 13, 2000
Dear Shareholder:
We are pleased to report to you on the performance, investment strategy and
outlook for the Alliance Global Dollar Government Fund (the "Fund") for the
period ended February 29, 2000.
Investment Results
The following table includes your Fund's returns as well as the returns for its
benchmark index, as represented by the J.P. Morgan Emerging Markets Bond Index
(the "JPM EMBI").
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INVESTMENT RESULTS*
Periods Ended February 29, 2000
----------------------------
Total Returns
----------------------------
6 months 12 months
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Alliance Global Dollar
Government Fund
Class A 27.13% 38.62%
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Class B 26.52% 37.52%
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Class C 26.69% 37.44%
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J.P. Morgan
Emerging Markets
Bond Index 21.61% 30.24%
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* The Fund's investment results represent total returns and are based on the
net asset value as of February 29, 2000. All fees and expenses related to
the operation of the Fund have been deducted, but no adjustment has been
made for sales charges that may apply when shares are purchased or
redeemed. Returns for the Fund include the reinvestment of any
distributions paid during the period. Past performance is no guarantee of
future results.
The J.P. Morgan Emerging Markets Bond Index is a total return index that
tracks the traded market for U.S. dollar-denominated Brady and other
similar sovereign restructured bonds traded in emerging markets. The index
is unmanaged and reflects no fees or expenses. An investor cannot invest
directly in an index.
Additional investment results appear on pages 4-8.
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Over the six-month period ended February 29, 2000, your Fund significantly
outperformed its benchmark. The Fund's overweighting in Russia, the best
performing emerging market, contributed towards most of the outperformance. The
Fund's holdings in Brazil, which also performed well during the period, also
contributed positively to performance.
Market Overview
During the six months ended February 29, 2000, improved economic fundamentals,
as a result of synchronized global expansion and rising commodity prices, helped
emerging-market debt outperform other fixed-income sectors. In the U.S.,
economic growth and employment remained strong. The U.S. Federal Reserve,
prompted by increasing fears of inflation and economic overheating, raised
official interest rates twice during that six-month period ended February 29,
2000.
Emerging-market debt performed relatively well over the six-month period ended
February 29, 2000, as global economic growth improved and commodity prices
firmed. The emerging-market debt sector, as represented by the JPM EMBI, posted
a strong 21.61% return during the six-month period. Most individual country
returns within the JPM EMBI were positive during the six
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 1
<PAGE>
LETTER TO SHAREHOLDERS
months ended February 29, 2000, with Russia posting the largest gains (67.06%),
and Bulgaria (26.32%), Brazil (25.81%) and Venezuela (23.10%) also
outperforming. During the period, Russian debt posted the highest returns as a
result of restored relations with creditors in finalizing a debt rescheduling
agreement and optimism of Vladimir Putin's victory in the March 26 elections. In
Bulgaria, market confidence was boosted as Bulgaria passed another International
Monetary Fund review. In Brazil, improving economic fundamentals, in addition to
legislation passed by the Lower House to control the government's excessive
spending, proved to be significant in changing Brazil's fiscal regime. Brazil
also has improved its current account deficit, which suggests its external
accounts continue to improve. The presidential victory for the opposition party
(the Allianz) and the confirmation of important labor market reforms in
Argentina signified the country's commitment to resolving some of its troubled
labor legislation. The progress in Argentina's reforms exceeded most investors'
expectations.
Investment Strategy
During the six-month period ended February 29, 2000, we maintained our
overweight position in Russia as the prospect for more effective political
leadership increased and Russia moved to restructure its defaulted Soviet-era
debt. We continued to avoid sovereign debt in Ecuador as a result of their
default and lack of progress in restructuring. Mexico's credit quality continued
to improve as its economy became increasingly well positioned to benefit from
strong U.S. growth. We increased our exposure to Mexican government bonds during
the period based on our growing conviction that Mexico would move to
investment-grade status. Significant progress on fiscal reforms along with a
healthy economic recovery in Brazil led us to increase our position in Brazilian
government bonds. The strong economic recovery in Southeast Asia has improved
credit quality in that region and, therefore, we maintained our positions in the
Philippines. We expect a credit upgrade in the Philippines within the next
twelve months.
Outlook
In the period ahead, we expect the U.S. economy to remain relatively strong and
the global economy to continue to strengthen. Long-term interest rates will
trend up modestly from current levels in this environment. We believe that
ongoing reforms and a favorable economic backdrop will make the emerging-market
debt sector the best performing fixed-income sector. Stronger global growth,
coupled with recent firming in commodity prices, should continue to provide the
environment necessary for emerging countries to further improve their credit
profiles. Emerging European countries are en joying healthy recoveries in the
aftermath of the Russian economic turmoil and the Asian crisis, and we forecast
3.5% growth for this region in 2000. With improving global growth and liquidity
conditions, we expect East Asian growth to reach 6.5% in 2000. Additionally,
labor market conditions are improving, boosting consumer spending, while export
earnings are dri-
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2 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
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LETTER TO SHAREHOLDERS
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[Photo Omitted] [Photo Omitted]
John D. Carifa Wayne D. Lyski
Portfolio Manager, Wayne D. Lyski, oversees fixed-income investment at Alliance
and manages assets in both domestic and international markets.
Mr. Lyski has over 26 years of investment experience.
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ving investment expenditures. The Latin American region will continue its
recovery momentum as we look for this region to head toward 4% growth with
moderate inflation over the next year.
Thank you for your continued interest and investment in Alliance Global Dollar
Government Fund. We look forward to reporting its progress to you in the coming
months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman
/s/ Wayne D. Lyski
Wayne D. Lyski
President
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 3
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PERFORMANCE UPDATE
PERFORMANCE UPDATE
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
GROWTH OF A $10,000 INVESTMENT
2/28/94* TO 2/29/00
[LINE CHART OMITTED]
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Global Dollar Government Fund Class A shares (from 2/28/94 to 2/29/00)
as compared to the performance of an appropriate broad-based index. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B and Class C shares will vary from the
results shown above due to differences in expenses charged to those classes.
Past performance is not indicative of future results, and is not representative
of future gain or loss in capital value or dividend income.
The J.P. Morgan Emerging Markets Bond Index 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 no charges or expenses are reflected in the performance of
the index.
* Closest month-end after Fund's Class A share inception date of 2/25/94.
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4 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
PERFORMANCE UPDATE
PERFORMANCE UPDATE
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
HISTORY OF RETURNS
YEARLY PERIODS ENDED 2/29
[BAR CHART OMITTED]
Past performance is no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on net asset
value. All fees and expenses related to the operation of the Fund have been
deducted. Returns for the Fund include the reinvestment of any distributions
paid during the period. The J.P. Morgan Emerging Markets Bond Index is a total
return index that tracks the traded market for U.S. dollar-denominated Brady and
other similar sovereign restructured bonds traded in emerging markets. The index
is unmanaged and reflects no fees or expenses. An investor cannot invest
directly in an index, and its results are not indicative of any specific
investment, including the Alliance Global Dollar Government Fund.
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 5
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PORTFOLIO SUMMARY
PORTFOLIO SUMMARY
February 29, 2000 (unaudited)
INCEPTION DATE PORTFOLIO STATISTICS
2/25/94 Assets ($mil): $223.8
[The following table was depicted as a pie chart in the printed material.]
SECURITY TYPE BREAKDOWN
o 64.75% Sovereign
o 15.77% Corporate
o 14.30% Brady Bonds
o 3.55% Short Term
o 1.63% Loan Participation
[The following table was depicted as a pie chart in the printed material.]
COUNTRY BREAKDOWN
o 18.63% Mexico
o 17.12% Russia
o 16.02% Brazil
o 10.84% Argentina
o 5.48% United States
o 4.70% Bulgaria
o 4.67% Venezuela
o 3.37% Panama
o 2.99% Netherlands
o 2.94% Philippines
o 2.87% Turkey
o 1.69% Kazakhstan
o 1.63% Morocco
o 1.41% Columbia
o 1.21% Dominican Republic
o 1.15% Peru
o 1.13% Ecuador
o 0.98% Luxembourg
o 0.59% Peoples Republic of China
o 0.47% South Korea
o 0.11% United Kingdom
All data as of February 29, 2000. Security type and country breakdowns may vary
over time. These breakdowns are expressed as a percentage of total investments.
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6 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
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INVESTMENT OBJECTIVE & POLICIES
and INVESTMENT RESULTS
INVESTMENT OBJECTIVE & 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
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF FEBRUARY 29, 2000
Class A Shares
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Without Sales Charge With Sales Charge
One Year 38.62% 32.67%
Five Years 17.88% 16.87%
Since Inception* 9.49% 8.71%
SEC Yield** 13.30%
Class B Shares
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Without Sales Charge With Sales Charge
One Year 37.52% 34.52%
Five Years 17.00% 17.00%
Since Inception* 8.65%(a) 8.65%
SEC Yield** 13.03%
Class C Shares
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Without Sales Charge With Sales Charge
One Year 37.44% 36.44%
Five Years 17.05% 17.05%
Since Inception* 8.69% 8.69%
SEC Yield** 13.02%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) 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);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 2/25/94 for all share classes.
** SEC yields are based on SEC guidelines and are calculated on 30 days ended
February 29, 2000.
(a) Assumes conversion of Class B shares into Class A shares after six years.
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 7
<PAGE>
INVESTMENT RESULTS
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END
(MARCH 31, 2000)
Class A Class B Class C
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1 Year 30.21% 31.95% 33.87%
5 Years 18.62% 18.76% 18.81%
Since Inception* 9.28% 9.24%(a) 9.24%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) 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);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 2/25/94 for all share classes.
(a) Assumes conversion of Class B shares into Class A shares after six years.
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8 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
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PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
February 29, 2000 (unaudited)
Principal
Amount
(000) U.S. $ Value
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Sovereign Debt Obligations-78.7%
Other Sovereign Debt Obligations-63.2%
Argentina-10.5%
Republic of Argentina
11.75%, 4/07/09 ......................... $ 2,500 $ 2,518,750
12.125%, 2/25/19(a) ..................... 11,880 12,396,780
12.00%, 2/01/20 ......................... 8,500 8,776,250
-----------
23,691,780
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Brazil-12.0%
Federal Republic of Brazil
14.50%, 10/15/09 ........................ 13,400 14,485,400
Republic of Brazil
12.750%, 1/15/20 ........................ 12,500 12,250,000
-----------
26,735,400
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Colombia-1.3%
Republic of Colombia
9.75%, 4/23/09 .......................... 3,400 3,070,750
-----------
Kazakhstan-1.7%
Republic of Kazakhstan
13.625%, 10/18/04(b) .................... 3,500 3,701,250
-----------
Mexico-11.0%
United Mexican States
10.375%, 2/17/09(c) ..................... 12,340 13,379,645
9.875%, 2/01/10 ......................... 2,000 2,120,000
11.375%, 9/15/16 ........................ 7,700 9,124,500
-----------
24,624,145
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Panama-1.9%
Republic of Panama
9.375%, 4/01/29 ......................... 4,400 4,207,720
-----------
Philippines-2.9%
Bangko Sentral Pilipinas
8.60%, 6/15/27 .......................... 2,000 1,640,150
Republic of the Philippines
9.875%, 1/15/19 ......................... 5,000 4,775,000
-----------
6,415,150
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Russia-16.7%
Russian Federation
11.00%, 7/24/18 ......................... 6,100 3,934,500
12.75%, 6/24/28(b) ...................... 20,200 15,630,760
Russian Ministry of Finance
3.00%, 5/14/03 .......................... 16,200 6,844,500
12.75%, 6/24/28 ......................... 5,000 3,869,000
-----------
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 9
<PAGE>
PORTFOLIO OF INVESTMENTS
Principal
Amount
(000) U.S. $ Value
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Russia Principal Loan FRN
6.063%, 12/15/20(d)(e) .................. $ 30,350 $ 7,132,250
------------
37,411,010
------------
Turkey-2.8%
Republic of Turkey
11.875%, 1/15/30 ........................ 6,000 6,268,125
------------
Venezuela-2.4%
Republic of Venezuela
9.25%, 9/15/27 .......................... 7,950 5,366,250
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Total Other Sovereign Debt Obligations
(cost $122,778,259) ..................... 141,491,580
------------
Non-Collateralized Brady Bonds-10.60%
Brazil-2.0%
Republic of Brazil DCB FRN
Series L Registered Bond
7.00%, 4/15/12 .......................... 600 445,500
Republic of Brazil C-Bonds
8.00%, 4/15/14(f) ....................... 5,217 3,847,392
------------
4,292,892
------------
Bulgaria-4.6%
Republic of Bulgaria IAB
Series PDI
7.063%, 7/28/11 ......................... 12,500 10,281,250
------------
Panama-1.4%
Republic of Panama FLIRB
Series 18
4.25%, 7/17/14 .......................... 4,000 3,165,200
------------
Peru-1.1%
Republic of Peru FLIRB
3.75%, 3/07/17(b)(g) .................... 1,250 796,875
Republic of Peru PDI
4.50%, 3/07/17(b)(g) .................... 2,450 1,708,875
------------
2,505,750
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Venezuela-1.5%
Republic of Venezuela
Series W-A FRN
7.00%, 3/31/20(h) ....................... 4,700 3,290,000
------------
Total Non-Collateralized Brady Bonds
(cost $21,295,029) ...................... 23,535,092
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10 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
PORTFOLIO OF INVESTMENTS
Principal
Amount
(000) U.S. $ Value
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Collateralized Brady Bond-3.3%
Mexico-2.7%
United Mexican States
Series W-A
6.25%, 12/31/19(a) ........................ $ 7,600 $ 6,175,000
Venezuela-0.6%
Republic of Venezuela
Series W-B FRN
6.875%, 3/31/20(h) ........................ 2,000 1,550,000
------------
Total Collateralized Brady Bonds
(cost $7,356,322) ......................... 7,725,000
------------
Loan Participation-1.6%
Morocco-1.6%
Kingdom of Morocco Loan Participation FRN
Series A
5.90625%, 1/01/09
(cost $3,353,326) ......................... 3,834 3,566,166
------------
Total Sovereign Debt Obligations
(cost $154,782,936) ....................... 176,317,838
------------
Corporate Debt Obligations-15.4%
Alestra, SA
12.625%, 5/15/09 .......................... 500 517,500
Banco Nacional De Commer, SA
7.25%, 2/02/04 ............................ 5,000 4,712,500
Banco Nacional De Desenvolvimiento
Economico
12.193%, 6/16/08(b) ....................... 4,300 3,988,250
Cellco Finance
15.00%, 8/01/05 ........................... 3,000 3,277,500
Conecel Holdings Ltd. ........................
Series AWW FRN
16.50%, 10/01/00(d)(e)(i) ................. 1,000 250,000
Consorcio Ecuatoriano Telecom
14.00%, 5/01/02(d)(e) ..................... 5,500 2,475,000
Grupo Mexicano de Desarrollo, SA
8.25%, 2/17/01(e) ......................... 7,900 2,370,000
Guangdong Enterprises
8.875%, 5/22/07(b)(d)(e) .................. 2,950 1,298,000
Hanvit Bank, SA
12.75%, 3/01/10(b) ........................ 1,000 1,027,500
Innova S De R.L., SA
12.875% 4/01/07 ........................... 3,000 2,797,500
Level 3 Communication, Inc.,
11.00%, 3/15/08(b) ........................ 2,000 2,005,000
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 11
<PAGE>
PORTFOLIO OF INVESTMENTS
Principal
Amount
(000) U.S. $ Value
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Netia Holdings B.V .......................
Series B
11.25%, 11/01/07(j) ................... $ 4,500 $ 3,251,250
PTC Intl. Finance II, SA
11.25%, 12/01/09(b) ................... 2,000 2,150,000
Tricom
11.375%, 9/01/04 ...................... 2,750 2,642,200
Viatel, Inc. .............................
11.50%, 3/15/09 ....................... 1,800 1,692,000
------------
Total Corporate Debt Obligations
(cost $40,695,226) .................... 34,454,200
------------
Time Deposit-3.5%
Bank of New York
5.75%, 3/01/00
(cost $7,754,000) ..................... 7,754 7,754,000
------------
Total Investments-97.6%
(cost $203,232,162) ................... 218,526,038
Other assets less liabilities-2.4% ....... 5,299,756
------------
Net Assets-100% .......................... $223,825,794
============
(a) Securities, or portions thereof, with an aggregate market value of
$18,789,978 have been segregated to collateralize reverse repurchase
agreements.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. At February 29,
2000, these securities amounted to $32,306,510 representing 14.43% of net
assets.
(c) Security trades with warrants expiring February 17, 2009.
(d) Non-income producing security.
(e) Security is in default.
(f) Coupon consists of 5.00% cash payment and 3.00% paid-in-kind.
(g) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at February 29, 2000.
(h) Security trades with oil warrants expiring March 31, 2020.
(i) Security trades with warrants expiring October 1, 2000.
(j) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective.
Glossary of Terms:
DCB - Debt Conversion Bond.
FLIRB - Front Loaded Interest Reduction Bond.
FRN - Floating Rate Note.
IAB - Interest Arrears Bond.
PDI - Past Due Interest.
See notes to financial statements.
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12 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
STATEMENT OF ASSETS & LIABILITIES
February 29, 2000 (unaudited)
Assets
Investments in securities, at value
(cost $203,232,162) .................................... $ 218,526,038
Receivable for investment securities sold ................. 32,732,457
Income receivable ......................................... 6,597,312
Receivable for capital stock sold ......................... 727,579
-------------
Total assets .............................................. 258,583,386
-------------
Liabilities
Due to custodian .......................................... 147
Reverse repurchase agreements ............................. 22,900,928
Payable for investment securities purchased ............... 9,754,000
Payable for capital stock redeemed ........................ 1,127,667
Dividends payable ......................................... 596,309
Interest payable on reverse repurchase agreements ......... 26,899
Accrued expenses .......................................... 351,642
-------------
Total liabilities ......................................... 34,757,592
Net Assets ................................................ $ 223,825,794
=============
Composition of Net Assets
Capital stock, at par ..................................... $ 32,697
Additional paid-in capital ................................ 268,798,847
Distributions in excess of net investment income .......... (2,576,850)
Accumulated net realized loss on investment
transactions ........................................... (57,722,776)
Net unrealized appreciation on investments ................ 15,293,876
-------------
$ 223,825,794
=============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($56,308,140/8,286,815 shares of capital stock
issued and outstanding) ................................ $6.79
Sales charge--4.25% of public offering price .............. 0.30
-----
Maximum offering price .................................... $7.09
=====
Class B Shares
Net asset value and offering price per share
($119,836,257/17,471,139 shares of capital stock
issued and outstanding) ................................ $6.86
=====
Class C Shares
Net asset value and offering price per share
($47,681,397/6,939,156 shares of capital stock
issued and outstanding) ................................ $6.87
=====
See notes to financial statements.
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o
<PAGE>
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (unaudited)
Investment Income
Interest ....................................... $14,670,442
Expenses
Advisory fee ................................... $ 787,260
Distribution fee - Class A ..................... 77,979
Distribution fee - Class B ..................... 574,075
Distribution fee - Class C ..................... 215,663
Transfer agency ................................ 213,005
Audit and legal ................................ 74,837
Custodian ...................................... 59,625
Administrative ................................. 54,677
Registration ................................... 50,549
Printing ....................................... 30,070
Directors' fees ................................ 10,741
Miscellaneous .................................. 5,359
-----------
Total expenses before interest ................. 2,153,840
Interest expense ............................... 72,913
-----------
Net expenses ................................... 2,226,753
-----------
Net investment income .......................... 12,443,689
-----------
Realized and Unrealized Gain
on Investments
Net realized gain on investment
transactions ................................ 5,036,094
Net change in unrealized
appreciation/depreciation of investments .... 32,824,433
-----------
Net gain on investment transactions ............ 37,860,527
-----------
Net Increase in Net Assets
From Operations ............................. $50,304,216
===========
See notes to financial statements.
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14 o Alliance Global Dollar Government Fund
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
STATEMENT OF CHANGES
IN NET ASSETS
Six Months
Ended
February 29, Year Ended
2000 August 31,
(unaudited) 1999
============= =============
Increase in Net Assets from Operations
Net investment income ..................... $ 12,443,689 $ 22,808,033
Net realized gain (loss) on investment
transactions ........................... 5,036,094 (45,085,335)
Net change in unrealized
appreciation/depreciation of investments 32,824,433 65,633,291
------------- -------------
Net increase in net assets from operations 50,304,216 43,355,989
Dividends and Distributions to
Shareholders from:
Net investment income
Class A ................................ (3,351,093) (6,183,246)
Class B ................................ (6,685,529) (12,454,582)
Class C ................................ (2,504,160) (4,170,205)
Distributions in excess of net investment
income
Class A ................................ -0- (317,642)
Class B ................................ -0- (639,811)
Class C ................................ -0- (214,230)
Tax return of capital
Class A ................................ -0- (301,209)
Class B ................................ -0- (606,708)
Class C ................................ -0- (203,145)
Common Stock Transactions
Net increase (decrease) ................... (13,504,165) 45,565,578
------------- -------------
Total increase ............................ 24,259,269 63,830,789
------------- -------------
Net Assets
Beginning of year ......................... 199,566,525 135,735,736
------------- -------------
End of period ............................. $ 223,825,794 $ 199,566,525
============= =============
See notes to financial statements.
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
February 29, 2000 (unaudited)
NOTE A
Significant Accounting Policies
Alliance Global Dollar Government Fund, Inc. (the "Fund") was incorporated in
the state of Maryland on December 2, 1993, as a non-diversified, open-end
management investment company. The Fund offers Class A, Class B and Class C
shares. Class A shares are sold with a front-end sales charge of up to 4.25% for
purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or
more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 3% to zero depending on the
period of time the shares are held. Class B shares will automatically convert to
Class A shares six years after the end of the calendar month of purchase. Class
C shares are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. All three classes of shares have
identical voting, dividend, liquidation and other rights, except that each class
bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. 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 or, if there was no sale on such day, the
last bid price quoted on such day. If no bid prices are quoted, then the
security is valued at the mean of the bid and asked prices as obtained on that
day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, securities listed on a foreign
securities exchange whose operations are similar to the United States
over-the-counter market and securities listed on a national securities exchange
whose primary market is believed to be over-the-counter are valued at the mean
of the closing bid and asked prices 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.
- --------------------------------------------------------------------------------
16 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. 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.
4. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's Class B
and Class C shares bear higher distribution and transfer agent fees than Class A
shares.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends 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 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 Fund has a Transfer Agency 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 $126,798 for the six months ended February 29, 2000.
For the six months ended February 29, 2000, the Fund's expenses were reduced by
$7,122 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor has advised the
Fund that it has received $6,177, $175,547 and $6,382 in contingent deferred
sales charges imposed upon redemptions by shareholders of Class A, Class B and
Class C shares, respectively, for the six months ended February 29, 2000.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays a distribution fee to the Distributor at an annual rate
of up to .30 of 1% of the average daily net assets attributable to Class A
shares and 1% of the average daily net assets attributable to the Class B and
Class C shares. 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 advised
the Fund that it has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $5,032,291 and $1,276,173 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
and U.S. government securities) aggregated $205,723,108 and $218,224,679,
respectively, for the six months ended February 29, 2000. There were no
purchases or sales of U.S. government or government agency obligations for the
six months ended February 29, 2000.
At February 29, 2000, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $24,138,570 and
gross unrealized depreciation was $8,844,694 resulting in net unrealized
appreciation of $15,293,876.
At August 31, 1999 the Fund had a net capital loss carryforward of $16,783,909
which expires in the year 2007.
Capital losses incurred after October 31 ("post October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and elected to defer net capital losses of
$44,391,334 during the fiscal year 1999. To the extent that the carryover losses
are used to offset future capital gains, it is probable that the gain so offset
will not be distributed to shareholders.
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.
- --------------------------------------------------------------------------------
18 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Additionally, the Fund bears the risk of loss of the premium and a 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 options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received 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 received
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.
There were no transactions in options written for the six months ended February
29, 2000.
NOTE E
Capital Stock
There are 9,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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:
<TABLE>
<CAPTION>
------------------------------ -------------------------------
SHARES AMOUNT
------------------------------ -------------------------------
Six Months Six Months
Ended Ended
February 29, Year Ended February 29, Year Ended
2000 August 31, 2000 August 31,
(unaudited) 1999 (unaudited) 1999
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 4,154,524 8,939,122 $ 25,152,065 $ 51,029,072
- --------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 270,168 577,502 1,690,510 3,335,568
- --------------------------------------------------------------------------------------------
Shares converted
from Class B 575,654 280,097 3,794,794 1,604,367
- --------------------------------------------------------------------------------------------
Shares redeemed (5,590,902) (7,334,617) (34,077,088) (42,253,263)
- --------------------------------------------------------------------------------------------
Net increase
(decrease) (590,556) 2,462,104 $ (3,439,719) $ 13,715,744
============================================================================================
Class B
Shares sold 1,469,147 9,146,871 $ 9,136,143 $ 52,340,160
- --------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 377,950 799,008 2,380,291 4,638,409
- --------------------------------------------------------------------------------------------
Shares converted
to Class A (570,192) (278,458) (3,794,794) (1,604,367)
- --------------------------------------------------------------------------------------------
Shares redeemed (2,983,374) (6,261,743) (18,686,109) (35,910,082)
- --------------------------------------------------------------------------------------------
Net increase
(decrease) (1,706,469) 3,405,678 $(10,924,469) $ 19,464,120
============================================================================================
Class C
Shares sold 982,876 7,263,526 $ 6,098,252 $ 41,875,188
- --------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 202,767 402,610 1,282,085 2,342,968
- --------------------------------------------------------------------------------------------
Shares redeemed (1,040,227) (5,566,666) (6,520,314) (31,832,442)
- --------------------------------------------------------------------------------------------
Net increase 145,416 2,099,470 $ 860,023 $ 12,385,714
============================================================================================
</TABLE>
NOTE F
Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
- --------------------------------------------------------------------------------
20 o Alliance Global Dollar Government Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
account with the custodian containing liquid assets having a value at least
equal to the repurchase price.
Amount Broker
=============== =====================
$13,660,928 J.P. Morgan, New York
$ 9,240,000 J.P. Morgan, New York
As of February 29, 2000, the Fund had entered into the following reverse
repurchase agreements:
Interest Rate Maturity
=============== ==============
2.25% March 13, 2000
5.25% March 02, 2000
For the six months ended February 29, 2000, the maximum amount of reverse
repurchase agreements outstanding was $28,239,104, the average amount
outstanding was approximately $10,562,473, and the daily weighted average
interest rate was 2.43%.
NOTE G
Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include the possibility of future political and economic
developments which could adversely affect the value of such securities.
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.
NOTE H
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended February 29, 2000.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 21
<PAGE>
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------------------------
Six Months
Ended
February 29, Year Ended August 31,
2000 -------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............ $ 5.69 $ 5.05 $ 10.64 $ 10.01 $ 8.02 $ 9.14
---------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income .......... .38(a) .71(a) .73(a) .88(a) .84 .86
Net realized and unrealized
gain (loss) on investment
transactions ................. 1.12 .74 (4.03) 1.85 2.10 (1.10)
---------------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................... 1.50 1.45 (3.30) 2.73 2.94 (.24)
---------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............ (.40) (.74) (.73) (.95) (.95) (.88)
Tax return of capital .......... -0- (.03) (.15) -0- -0- -0-
Distributions in excess of
net investment income ........ -0- (.04) (.04) -0- -0- -0-
Distributions from net realized
gain on investments .......... -0- -0- (1.37) (1.15) -0- -0-
---------------------------------------------------------------------------------------
Total dividends and
distributions ................ (.40) (.81) (2.29) (2.10) (.95) (.88)
---------------------------------------------------------------------------------------
Net asset value,
end of period ................ $ 6.79 $ 5.69 $ 5.05 $ 10.64 $ 10.01 $ 8.02
=======================================================================================
Total Return
Total investment return
based on net asset value(b) .. 27.13% 29.40% (38.56)% 30.04% 38.47% (1.48)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) .............. $56,308 $50,540 $32,365 $37,416 $23,253 $12,020
Ratio of expenses to
average net assets ........... 1.57%(c) 1.59% 1.48% 1.55% 1.65% 1.93%
Ratio of expenses to average
net assets, excluding interest
expense ...................... 1.52%(c) -0- -0- -0- -0- -0-
Ratio of net investment income
to average net assets ........ 12.38%(c) 12.34% 8.51% 8.49% 9.23% 11.25%
Portfolio turnover rate ........ 100% 179% 188% 314% 315% 301%
</TABLE>
- --------------------------------------------------------------------------------
22 o Alliance Global Dollar Government Fund
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
CLASS B
----------------------------------------------------------------------------------
Six Months
Ended
February 29, Year Ended August 31,
2000 --------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............ $ 5.74 $ 5.05 $ 10.64 $ 10.01 $ 8.02 $ 9.14
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income .......... .36(a) .67(a) .67(a) .81(a) .78 .80
Net realized and unrealized
gain (loss) on investment
transactions ................. 1.12 .76 (4.05) 1.84 2.08 (1.11)
----------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................... 1.48 1.43 (3.38) 2.65 2.86 (.31)
----------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............ (.36) (.68) (.67) (.87) (.87) (.81)
Tax return of capital .......... -0- (.03) (.14) -0- -0- -0-
Distributions in excess of
net investment income ........ -0- (.03) (.04) -0- -0- -0-
Distributions from net realized
gain on investments .......... -0- -0- (1.36) (1.15) -0- -0-
----------------------------------------------------------------------------------
Total dividends and
distributions ................ (.36) (.74) (2.21) (2.02) (.87) (.81)
----------------------------------------------------------------------------------
Net asset value,
end of period ................ $ 6.86 $ 5.74 $ 5.05 $ 10.64 $ 10.01 $ 8.02
==================================================================================
Total Return
Total investment return
based on net asset value(b) .. 26.52% 28.85% (39.11)% 29.14% 37.36% (2.40)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) .............. $119,836 $110,003 $79,660 $93,377 $84,295 $62,406
Ratio of expenses to
average net assets ........... 2.31%(c) 2.31% 2.22% 2.26% 2.37% 2.64%
Ratio of expenses to average
net assets, excluding interest
expense ...................... 2.23%(c) -0- -0- -0- -0- -0-
Ratio of net investment income
to average net assets ........ 11.67%(c) 11.59% 7.78% 7.81% 8.57% 10.52%
Portfolio turnover rate ........ 100% 179% 188% 314% 315% 301%
</TABLE>
See footnote summary on page 24.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 23
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------------
Six Months
Ended
February 29, Year Ended August 31,
2000 --------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............ $ 5.74 $ 5.05 $ 10.64 $ 10.01 $ 8.02 $ 9.14
------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income .......... .36(a) .67(a) .67(a) .82(a) .77 .79
Net realized and unrealized
gain (loss) on investment
transactions ................. 1.13 .76 (4.05) 1.84 2.10 (1.10)
------------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................... 1.49 1.43 (3.38) 2.66 2.87 (.31)
------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............ (.36) (.68) (.67) (.88) (.88) (.81)
Tax return of capital .......... -0- (.03) (.14) -0- -0- -0-
Distributions in excess of
net investment income ........ -0- (.03) (.04) -0- -0- -0-
Distributions from net realized
gain on investments .......... -0- -0- (1.36) (1.15) -0- -0-
------------------------------------------------------------------------------------
Total dividends and
distributions ................ (.36) (.74) (2.21) (2.03) (.88) (.81)
------------------------------------------------------------------------------------
Net asset value,
end of period ................ $ 6.87 $ 5.74 $ 5.05 $ 10.64 $ 10.01 $ 8.02
====================================================================================
Total Return
Total investment return
based on net asset value(b) .. 26.69% 28.85% (39.09)% 29.17% 37.40% (2.36)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) .............. $47,681 $39,024 $23,711 $25,130 $14,511 $9,330
Ratio of expenses to
average net assets ........... 2.30%(c) 2.30% 2.19% 2.25% 2.35% 2.63%
Ratio of expenses to average
net assets, excluding interest
expense ...................... 2.22%(c) -0- -0- -0- -0- -0-
Ratio of net investment income
to average net assets ........ 11.65%(c) 11.56% 7.75% 7.82% 8.52% 10.46%
Portfolio turnover rate ........ 100% 179% 188% 314% 315% 301%
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the year, reinvestment of all
dividends and distributions at net asset value during the year, and
redemption on the last day of the year. 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.
(c) Annualized.
See footnote summary on page 24.
- --------------------------------------------------------------------------------
24 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
GLOSSARY OF INVESTMENT TERMS
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance is measured. Benchmarks usually consist
of an unmanaged index, such as the Standard & Poor's 500 Stock Index.
bond
Bonds are promissory notes or IOUs issued by a governments or business
corporations in return for loans. They are most often issued in multiples of
$1,000 or $5,000, but $100 and $500 bonds are available. A bond is evidence of a
debt on which the issuer typically promises to pay the bondholder (also called a
lender or creditor) a fixed rate of interest at intervals over a specified
length of time (usually ten years or more), and to repay the original loan upon
expiration (the maturity date). Because a bond represents the debt of the
issuer, a bondholder is not considered an owner of the issuer, as a stockholder
is.
Brady bonds
U.S.-dollar-denominated bonds that are issued by emerging markets, particularly
markets in Latin America, and collateralized by U.S. Treasury zero-coupon bonds.
credit rating
A bond rating that measures of the quality and safety of a bond, based on the
issuer's financial condition. In particular, an evaluation from a rating service
indicating the probability that a debt issuer will be able to meet scheduled
interest and principal repayments. Ratings typically range from AAA, which is
the highest rating, to D, which is the lowest rating.
default
Failure to pay a principal or interest payment when due.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes monetary
policy and monitors the country's economic state.
government bond
A bond that is issued by the U.S. government.
inflation
A broad rise in the cost of goods and services.
investment-grade bond
A bond that is considered safe, having a relatively high bond rating.
spread
The price above a benchmark fixed-income yield that an issuer pays to borrow
money.
Treasuries
Negotiable U.S. government debt obligations, backed by the full faith and credit
of the U.S. government. Treasuries are issued either as bills, notes or bonds
depending on the maturity. Treasuries are exempt from state and local taxes.
U.S. government agency securities
Securities issued by U.S. government-related agencies, such as Government
National Mortgage Association, Federal Home Loan Mortgage Corporation, and
Federal National Mortgage Association that are exempt from state and local
taxes. also called agency securities.
yield
The rate of return on an asset, usually referring to dividend or interest
payments, expressed as a percentage of current market price.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 25
<PAGE>
ALLIANCE CAPTIAL
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $368
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 31 of the FORTUNE 100 companies and public retirement funds in 31
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 277
investment professionals in 21 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 12/31/99.
- --------------------------------------------------------------------------------
26 o Alliance Global Dollar Government Fund
<PAGE>
ALLIANCE CAPITAL AT YOUR SERVICE
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio and Alliance
Select Investor Series Technology Portfolio, which generally have a
$10,000 minimum initial investment) and may make subsequent investments of
$50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 27
<PAGE>
BOARD OF DIRECTORS
BOARD OF DIRECTORS
John D. Carifa, Chairman
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(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
Principal Underwriter
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
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.
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28 o ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND
<PAGE>
THE ALLIANCE FAMILY OF MUTUAL FUNDS
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Limited Maturity Government Fund
Mortgage Securities Income Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
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ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND o 29
<PAGE>
Alliance Global Dollar Government Fund ---------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
---------------
AllianceCapital[LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
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