ALLIANCE WORLDWIDE PRIVATIZATION FUND
ANNUAL REPORT
JUNE 30, 1996
ALLIANCE
INVESTING WITHOUT THE MYSTERY.
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
July 8, 1996
Dear Shareholder:
We are pleased to report on the investment results and activity of Alliance
Worldwide Privatization Fund for the fiscal year ended June 30, 1996. Over the
last twelve months, international equity markets have performed well, providing
double-digit returns on a U.S. dollar basis. More important, your Fund's
investment results at the close of its second year of operation handsomely
surpassed the returns of the international markets (see the table below).
INVESTMENT RESULTS*
PERIODS ENDING JUNE 30, 1996
CUMULATIVE TOTAL RETURN
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A 15.86% 19.16%
Class B 15.56% 18.42%
Class C 15.56% 18.42%
MSCI EAFE INDEX 4.67% 13.62%
MSCI EMERGING MARKETS FREE INDEX 10.67% 8.47%
* THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD
AND ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF 6/30/96. 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 AND ITS COMPARATIVE INDICES INCLUDE
THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
ALL COMPARATIVE INDICES ARE UNMANAGED AND REFLECT NO FEES OR EXPENSES. THE
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALIA, AND FAR EAST (MSCI
EAFE) INDEX TRACKS THE PERFORMANCE OF MARKETS IN THOSE REGIONS. THE MORGAN
STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX MEASURES STOCK
PERFORMANCE FOR A UNIVERSE OF 19 EMERGING MARKETS.
FOR ADDITIONAL PERFORMANCE INFORMATION, SEE PAGE 3.
The Fund's performance was helped by its holdings in emerging markets.
MARKET REVIEW
The international markets made positive strides during the last twelve months,
although falling short of the 25.93% gain produced by the S&P 500 stocks in the
United States. The Morgan Stanley Capital International Europe, Australia, and
Far East Index, which excludes the results of the U.S. stock market, gained
13.62% in U.S. dollar terms, with net dividends reinvested. While emerging
markets lagged on a twelve-month basis, as evidenced by the 8.47% rise in the
Morgan Stanley Capital International Emerging Markets Free Index, their
six-month returns were superior to those of the developed markets (see the
table on this page). They also edged out the S&P 500-Stock Index, which rose
10.08% for the half year ended June 30, 1996.
Eastern Europe dominated emerging-market performance, propelled by investors
who began to believe that Boris Yeltsin would remain in power following the
Russian election. The favorable market environment, in both developed and
emerging countries, led to an upsurge in privatization transactions in the
first half of 1996.
Western Europe remained the largest source of privatization deals throughout
the Fund's fiscal year. In the first six months of 1996, however, much of the
volume was the result of second- or third-stage sales by governments of earlier
listings. The most substantial gains, both in volume and in price, were seen in
Eastern Europe. Transactions such as Pliva, the Croatian drug company, and
Borsodchem, the Hungarian poly-vinyl-chloride producer, proved extremely
successful.
Transaction volume in Latin America and the Far East remained disappointingly
low. We are optimistic about increased privatization activity in those regions
during the second half of 1996, however, when Brazilian and Japanese
privatization programs are expected to build momentum.
INVESTMENT OUTLOOK
We believe 1996 may prove to be a record year in terms of the U.S.-dollar
volume of privatization transactions. We are encouraged also by the range and
variety of industries that brought deals to the market this year. The
pharmaceutical, rail transportation, electronics, and insurance industries have
become increasingly represented in our potential universe of investment
opportunities.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
The returns in the first half of 1996 were positive, however, the recent
volatility besetting the equity markets have unnerved some investors. It is our
contention that this volatility, which may very well continue over the near
term, is a healthy reaction to the increase in bond yields in the United States
and elsewhere. We also believe that as the year progresses investors will focus
more on the prospects for economic recovery in Germany and Japan. At the same
time, we see little evidence of renewed inflationary pressure and we anticipate
that price increases on the retail level will remain subdued.
To date, economic growth outside the United States has been sustained largely
by investment spending and governmental programs. In the coming months, we
think the consumer is likely to play a more important role in fueling growth
throughout the world. The strong impetus for this are particularly true given
the spending cuts undertaken by European governments to fulfill the Maastricht
criteria for 1997 and the attempts by the U.S. government to curtail its
expenditures.
There is also the possibility in the near term for some further reductions in
short-term interest rates. We expect Europe to make the first move since
inflation in that region continues to decline along with the monetary
aggregates.
An area of concern is a potential increase in the value of the U.S. dollar.
While few privatizations occur in the United States, the Fund will hedge
certain of the portfolio's currencies back into the U.S. dollar to protect
shareholders from a significant upward movement in the U.S. dollar. Currently
we have 30% of the portfolio hedged back into the U.S. dollar.
THE PORTFOLIO
The Worldwide Privatization Fund enters a new fiscal year with its assets fully
invested. On June 30, 1996, cash represented approximately 5% of assets.
Assets are well diversified among countries, industries, and issuers. At the
period's close, the Fund had approximately 190 different equity positions
representing stock markets in 52 different countries. The United Kingdom,
France, Brazil, Austria, and Italy were the most significant country weightings.
From an industry viewpoint, the portfolio also remains diversified, with
electric and gas utilities, telephones, pharmaceuticals, and airlines
representing the largest exposures.
We thank you for your continued interest in Alliance Worldwide Privatization
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 and President
Mark H. Breedon
Senior Vice President
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
Alliance Worldwide Privatization Fund is a non-diversified fund that seeks to
provide investors with long-term capital appreciation. As a fundamental policy,
the Fund invests at least 65% of its total assets in equity securities issued
by enterprises that are undergoing, or have undergone, privatization, although
normally significantly more of its assets will be invested in such securities.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JUNE 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 19.16% 14.11%
. Since Inception* 9.73% 7.48%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 18.42% 14.42%
. Since Inception* 8.99% 8.11%
CLASS C SHARES
. One Year 18.42%
. Since Inception* 17.75%
Average annual total returns reflect investment of dividends and/or capital
gain distributions in additional shares, with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4%-Year 1; 3%-Year 2; 2%-Year 3; 1%-Year 4);
Class C shares purchased prior to July 1, 1996, are not subject to front-end or
contingent deferred sales charges. Class C shares purchased on or after July 1,
1996, are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase.
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: 6/2/94, Class A and Class B; 2/8/95, Class C.
3
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ALLIANCE WORLDWIDE PRIVATIZATION FUND
$10,000 INVESTMENT OVER LIFE OF FUND
6/2/94 TO 6/30/96
$12,000
$11,500
$11,000
$10,500
$10,000
$9,500
6/2/94
6/30/96
MSCI EAFE
MSCI EMF
WORLDWIDE PRIVATIZATION FUND
CLASS A: $11,628
This chart illustrates the total value of an assumed investment in Alliance
Worldwide Privatization Fund Class A shares since inception (6/2/94) after
deducting the maximum sales charge, and with dividends and capital gains
reinvested. It is a hypothetical illustration for illustrative purposes only.
Performance for Class B and Class C shares will vary from the results shown due
to differences in expenses and fees 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 Morgan Stanley Capital International EAFE Index (MSCI EAFE) is an
unmanaged, market- capitalization-weighted index that measures stock
performance in Europe, Australia, and the Far East.
The Morgan Stanley Capital International Emerging Markets Free Index (MSCI EMF)
is an unmanaged, market-capitalization-weighted index composed of companies
representative of the market structure of 22 emerging-market countries in
Europe, Latin America, and the Pacific Basin. The Index excludes closed markets
and those shares in otherwise free countries which are not purchasable by
foreigners.
When comparing Alliance Worldwide Privatization Fund to the indices shown
above, you should note that the Fund's performance reflects the maximum sales
charge of 4.25% while no such charges are reflected in the performance of the
index or average.
Worldwide Privatization Fund
MSCI EAFE Index
MSCI EMF Index
4
TEN LARGEST HOLDINGS
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $VALUE NET ASSETS
- -------------------------------------------------------------------------------
Pharmacia & Upjohn Inc.-An international
pharmaceutical and biotechnological group of
companies which manufacture and market a
wide assortment of subscription and over-the-
counter products $ 25,959,375 3.4%
Korea Mobile Telecom Corp.-Provider of mobile
communications and radio paging services in Korea 22,681,015 3.0
Roussel-Uclaf-France's major drug provider and
distributor focused on antibiotics 20,886,427 2.8
Deutsche Lufthansa A.G.-Operates international
airline services and various related services. 15,552,560 2.1
Commonwealth Serum Lab., Ltd.-Develops,
manufactures, and markets human and veterinary
pharmaceutical and diagnostic products. 13,985,273 1.8
RNGS Holdings, Ltd. 8%, pfd. -Russian Oil and
Gas Construction. A Russian Government Trust
Company, successor to the former Soviet Union
Oil & Gas Construction Company 13,665,534 1.8
Ente Nazionale Idrocarburi-Explores for, produces,
refines, transports, and markets oil and
natural gas as well as produce chemicals 13,581,242 1.8
Manila Electric Co. Series B-Distributes
electricity for heat and power 12,946,990 1.7
National Grid Holdings Plc.-Operates the electric
transmission system in England and Wales and
provides related services to Scotland and France 12,241,996 1.6
The Industrial Finance Corp. of Thailand-Provides
investment banking, leasing, financial and
advisory services 11,961,289 1.6
$163,461,701 21.6%
5
DISTRIBUTION OF PORTFOLIO BY COUNTRY
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF PORTFOLIO*
---------------------
United Kingdom 8.4%
France 6.6
Brazil 5.4
Italy 5.1
Austria 4.7
South Korea 4.3
Germany 4.0
United States 4.0
Australia 3.8
Hungary 3.5
Netherlands 3.3
Canada 2.9
Philippines 2.9
Finland 2.8
Russia 2.7
Spain 2.6
Poland 2.3
Indonesia 2.1
Japan 2.1
Turkey 2.1
Thailand 2.0
Argentina 1.8
New Zealand 1.8
Ireland 1.6
Malaysia 1.3
Czech Republic 1.3
Norway 1.3
Pakistan 1.3
Peru 1.3
Mexico 1.1
Greece 0.9
Sweden 0.9
Ghana 0.8
India 0.8
Hong Kong 0.7
Portugal 0.6
South Africa 0.6
Botswana 0.7
Israel 0.6
Denmark 0.4
Egypt 0.4
Trinidad & Tobago 0.4
Chile 0.3
Singapore 0.3
Bermuda 0.3
Colombia 0.2
Ecuador 0.2
Jordan 0.1
Bolivia 0.1
Croatia 0.1
Kenya 0.1
Slovak Republic 0.1
Romania 0.0
100.0%
* Excludes short-term obligations.
6
INDUSTRY DIVERSIFICATION
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $ 61,129,675 8.1%
Capital Goods 16,686,543 2.2
Consumer Manufacturing 23,347,547 3.1
Consumer Services 75,623,358 10.0
Consumer Staples 15,598,742 2.1
Energy 50,067,830 6.6
Financial Services 102,359,662 13.5
Healthcare 62,811,362 8.3
Multi-Industry 30,888,982 4.1
Technology 13,573,878 1.7
Telephone Utilities 72,301,017 9.5
Transportation 25,051,384 3.3
Utilities 170,084,324 22.4
Total Investments* 719,524,304 94.9
Cash and receivables, net of liabilities 38,641,434 5.1
Net Assets $758,165,738 100.0%
* Excludes short-term obligations.
7
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS89.9%
ARGENTINA1.7%
Central Costanera, S.A. Cl. B 1,258,815 $ 4,634,177
Dragados y Construcciones Argentina Cl. B 502,799 2,338,892
Metrogas, S.A. (ADR) * 163,300 1,724,856
Telecom Argentina France Telecom, S.A. (ADR) 50,000 2,343,750
Transportadora de Gas del Sur, S.A. (ADR) 150,000 1,875,000
------------
12,916,675
AUSTRALIA3.6%
Commonwealth Serum Lab., Ltd. 3,326,000 13,985,273
Qantas Airways, Ltd. 1,942,744 3,282,834
Tab Corp Holdings, Ltd. 2,295,000 10,371,593
------------
27,639,700
AUSTRIA4.4%
Austria Mikro Systeme International AG (a) 68,374 6,388,836
Boehler-Uddeholm AG 69,150 5,362,916
Flughafen Wein AG (a) 100,000 6,845,381
VA Technologies AG 80,000 9,837,316
Voest-Alpine Stahl AG 150,000 5,073,767
------------
33,508,216
BERMUDA0.2%
Central European Media Enterprises, Ltd.
Cl. A * 75,000 1,875,000
BOLIVIA0.1%
Compania Boliviana deEnergia, S.A. 13,000 510,250
BOTSWANA0.5%
Sechaba Investment Trust, Ltd. 5,227,000 4,120,836
BRAZIL2.1%
Acesita Acos Especiais 60,723,600 $175,371
Companhia Siderurgica Nacional 48,000,000 1,223,722
Compania Paulista de Forca e Luz * 41,400,000 3,793,059
Light Particpacoes, S.A. (b)* 26,750,000 905,741
Light Servicios de Electricidade,
S.A. (ADR) 77,500 5,395,937
Siderurgica Riograndense, S.A. 63,250,000 938,530
Telecomunicacoes Brasileiras, S.A. 17,500,000 1,028,233
Telecomunicacoes de Sao
Paulo, S.A. 13,320,000 2,347,896
Receipts * 1,130,473 199,267
------------
16,007,756
CANADA2.8%
Alberta Energy Co., Ltd. 391,500 7,384,087
Canadian National Railway 321,400 5,905,725
Petro-Canada 620,000 7,697,491
------------
20,987,303
CHILE0.3%
Banco BHIF (ADR) * 38,500 774,813
Enersis, S.A. sponsored (ADR) 42,700 1,323,700
------------
2,098,513
CROATIA0.1%
Zagrebacka Banka (GDR) * 51,500 437,750
CZECH REPUBLIC1.2%
Ceske Energeticke Zavody (GDS) (c)* 44,000 1,749,880
Ceske Radiokomunikace* 9,962 1,448,334
Elektrarny Opatovice 10,513 1,765,349
Komercni Banka A.S. (GDR) 67,500 1,822,500
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Podnik Vypocetni Techniky * 7,479 $ 1,304,809
Tabak A.S. 4,525 1,118,380
------------
9,209,252
DENMARK0.4%
Copenhagen Airport (a) 32,500 3,217,112
ECUADOR0.2%
La Cemento Nacional Ecuador (c) 6,600 1,194,600
EGYPT0.4%
Commercial International Bank * 6,000 740,850
Nasr City for Housing & Reconstruction * 40,500 1,068,609
Torrah Portland Cement 69,500 909,640
------------
2,719,099
FINLAND2.7%
Finnair Oy (a) 850,400 5,837,406
OY Tamro AB 330,000 1,980,288
Unitas Bank, Ltd. Cl. A * 2,576,000 5,449,310
Valmet OY (a) 400,000 6,777,963
------------
20,044,967
FRANCE6.3%
Allevard Industries 28,000 1,469,602
Assurances Generales de France 78,750 2,133,985
Renault, S.A. (a) 120,000 3,100,160
Roussel-Uclaf (a) 87,000 20,886,427
SGS-Thomson Microelectronics N.V. * 126,000 4,433,299
Societe National Elf Aquitaine 90,987 6,696,346
Usinor Sacilor* 600,000 8,660,155
------------
47,379,974
GERMANY3.8%
Bankgesellschaft Berlin A.G. 22,425 4,770,649
Deutsche Lufthansa A.G. (a) 110,000 15,552,560
Viag A.G. 16,750 6,686,121
new shares 4,785 1,872,275
------------
28,881,605
GHANA0.8%
Ashanti Goldfields Co.,
Ltd. (c) 250,000 4,921,875
(GDR) 50,000 981,250
------------
5,903,125
GREECE0.9%
Hellenic Sugar 318,840 2,995,336
Hellenic Tellecommunication Organization S.A. 223,000 3,698,640
------------
6,693,976
HONG KONG0.6%
Consolidated Electric Power 2,575,000 4,241,353
HUNGARY3.3%
Danubus Hotels rights * 159,850 2,715,187
Interuropa Bank (b) 14,772 3,591,527
Magyar Olaj-es Gazipare Reszvenytar 511,000 5,684,396
OTP Bank (GDR) 615,000 9,686,250
Zalakeramia 75,000 2,985,394
rights* 6,300 258,085
------------
24,920,839
INDIA0.8%
Steel Authority of India, Ltd. (GDR) * 300,000 4,425,000
The Guangshen Railway Co., Ltd. (ADR) * 80,000 1,530,000
------------
5,955,000
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
INDONESIA2.0%
PT Indosat 3,215,000 $ 10,808,754
PT Tambang Timah (GDR) 51,000 925,650
PT Telekomunikasi Indonesia (ADR) 110,000 3,272,500
------------
15,006,904
IRELAND1.5%
Greencore Group Plc. (a) 1,039,880 5,465,964
Irish Life Plc. 1,545,858 6,149,738
------------
11,615,702
ISRAEL0.5%
Bank Hapoalim, Ltd. 1,073,300 1,574,562
Tadiran, Ltd. (ADR) 92,500 2,497,500
------------
4,072,062
ITALY4.8%
Ente Nazionale Idrocarburi S.p.A. 2,721,000 13,581,242
Instituto Nazionale delle Azzicurazioni (a) 4,000,000 5,967,324
Istituto Mobiliare Italiano S.p.A. 800,000 6,685,493
Telecom Italia Mobile S.p.A. (a) 3,305,000 4,509,737
Telecom Italia S.p.A. Di Risp 3,305,000 5,707,299
------------
36,451,095
JAPAN2.0%
DDI Corp. 415 3,625,348
East Japan Railway Co. 1,700 8,932,243
Japan Tobacco, Inc. 331 2,540,686
------------
15,098,277
JORDAN0.2%
Arab Potash Co. 217,433 1,618,106
KENYA0.1%
Kenya Airways * 4,650,000 1,054,054
MALAYSIA1.2%
Petronas Gas Berhad 686,000 2,942,554
Telekom Malaysia Berhad 740,000 6,585,689
------------
9,528,243
MEXICO1.0%
Banpais, S.A. (ADR) (b)(d)* 96,000 -0-
GBM Atlantico, S.A. (ADR) (b)* 78,000 209,625
Grupo Financiero Bancrecer,
S.A. de C.V. Cl. B * 2,846,767 566,726
Grupo Financiero Banorte,
S.A. de C.V. Cl. B * 3,056,977 2,917,932
Grupo Financiero Probursa,
S.A. de C.V. Cl. B * 7,701,000 659,941
Grupo Profesional Planeacion Y Proyectos,
S.A. Cl. B 129,000 705,801
Telefonos de Mexico, S.A. (ADR) Cl. L 83,400 2,793,900
------------
7,853,925
NETHERLANDS3.1%
European Vinyls Corp. International N.V. 107,100 3,328,484
KLM Royal Dutch Air Lines N.V. (a) 300,000 9,604,948
Koninklijke PTT Nederland N.V. 287,324 10,883,925
------------
23,817,357
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
NEW ZEALAND1.7%
Energy Direct Corp., Ltd. 1,605,300 $ 2,934,198
Telecom Corp. of New Zealand, Ltd. 1,000,000 4,205,358
Tranz Rail Holdings, Ltd. * 255,000 1,195,023
Trustpower, Ltd. 3,816,000 4,877,226
------------
13,211,805
NORWAY1.2%
Christiana Bank OG Kreditkasse (a) 2,000,000 4,714,075
Den Norske Bank 1,500,000 4,552,318
------------
9,266,393
PAKISTAN1.2%
Hub Power Co., Ltd. (GDR) * 200,000 4,975,000
Pakistan Telecom
(GDR) * 28,813 3,399,934
Ordinary * 5,521 628,679
------------
9,003,613
PERU1.2%
Compania de Minas Buenaventura, S.A. Cl. A 173,700 1,564,224
CPT Telefonica del Peru, S.A. 1,461,065 2,966,387
Explosivos, S.A. Cl. C * 634,117 661,890
Norte Cementos Pacasmayo Private
Placement (b) 634,437 1,282,030
Ordinary 509,479 875,895
Ontario-Quinta A.V.V. (b)* 2,000,000 2,000,000
------------
9,350,426
PHILIPPINES2.8%
First Philippine Holdings Corp. Series B 2,313,116 5,650,360
International Container
Terminal Services, Inc.* 3,279,250 2,221,629
Manila Electric Co. Series B 1,233,495 12,946,990
Philippine National Bank * 32,563 543,752
------------
21,362,731
POLAND2.2%
Bank Przemyslowo Handlowy * 56,000 4,039,155
Bank Rozwoju Eksportu 135,000 3,527,269
Elektrim, S.A. 665,000 5,457,239
Vistula, S.A. 162,200 620,770
Wielkopolski Bank Kredytowy, S.A. 582,078 3,148,799
------------
16,793,232
PORTUGAL0.6%
Portugal Telecom, S.A. 100,000 2,616,645
TVI Televisao Independiente (b)* 676,000 2,022,533
------------
4,639,178
ROMANIA0.0%
Societatea R (b)* 30,454 348,978
RUSSIA0.7%
Nearmedic, Ltd. (b)* 53 1,987,500
new shares (b)* 90 351,000
Sun Brewing (GDR) (c)* 264,000 3,102,000
------------
5,440,500
SINGAPORE0.2%
Singapore Airlines, Ltd. 180,000 1,900,780
SLOVAK REPUBLIC0.1%
Nafta Gbely, S.A. 6,667 496,245
SOUTH AFRICA0.6%
South African Iron & Steel 6,187,339 4,840,775
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SOUTH KOREA4.1%
Korea Electric Power
Corp. (b) 85,390 $ 3,418,968
(ADR) 145,600 3,530,800
Korea Mobile Telecom
Corp. (b) 14,260 16,875,740
(ADR) 343,000 5,805,275
Korean Air Lines (b) 28,730 756,394
Pohang Iron & Steel Co. (b) 7,280 593,833
------------
30,981,010
SPAIN2.5%
Argentaria Bancaria de Espana 100,000 4,367,682
Endesa 120,000 7,491,473
Repsol, S.A. (a) 200,000 6,961,726
------------
18,820,881
SWEDEN1.1%
Stadshypotek (a) 300,000 6,704,487
THAILAND1.9%
Electricity Generating Public of Thailand 594,000 2,070,624
The Industrial Finance Corp. of Thailand 2,663,800 11,961,289
------------
14,031,913
TRINIDAD & TOBAGO0.4%
B.W.I.A. International Airways (b)* 2,727,272 2,999,999
TURKEY2.0%
Efes Sinai Yatrim (b)* 13,438,261 376,376
Eregli Demir Ve Celik Fabrikalari T.A.S. 40,116,750 4,445,475
Petrokimya Holding A.S. 1,907,000 905,662
Tofas Turk Otomobil Fabrikasi
Group E 1,330,000 63,973
(GDR) 5,362,000 1,045,590
Tupras Turkiye Petrol Rafinerileri A.S. * 5,595,000 1,056,046
Turk Hava Yollari A.O. * 21,847,275 5,985,919
Usas Ucak Servisi A. S. 857,250 1,252,679
------------
15,131,720
UNITED KINGDOM8.0%
Anglian Water Plc. 891,500 8,205,801
East Midland Electric Plc. 197,120 1,604,624
London Electricity Plc. 333,000 3,235,808
National Grid Holdings Plc. 4,621,858 12,241,996
National Power Plc. (a) 660,000 5,331,612
Northern Ireland Electricity Plc. (a) 700,000 4,561,853
Powergen Plc. 681,522 4,965,511
Partially paid (a) 92,000 470,213
RJB Mining 300,000 2,577,257
Scottish Hydro Electric 766,000 3,522,344
Scottish Power Corp. 740,000 3,494,754
Stagecoach Holdings Plc. (a) 834,500 5,613,394
Wessex Water Plc. (a) 903,806 5,026,544
------------
60,851,711
UNITED STATES3.8%
Austelko Holdings Series A (b)* 260 1,934,400
Near East International (b)* 10 1,000,000
Pharmacia & Upjohn Inc. 585,000 25,959,375
------------
28,893,775
Total Common Stocks
(cost $580,821,169) 681,648,778
PREFERRED STOCKS4.8%
BRAZIL3.0%
Bardella Industrias Mecanicas, S.A. * 12,786 1,413,380
Centrais Electric STA * 2,500,000 2,340,288
Centrais Electricas de Goias * 114,217,000 4,549,798
12
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- -------------------------------------------------------------------------
Companhia Energetica de Sao Paulo
(ADR) (c)* 142,600 $ 1,497,300
Ordinary * 42,887,140 1,494,846
Compania Vale Do Rio Doce PN 148,000 2,866,703
Fertilizantes Fosfatados 328,355,800 1,399,555
Industrial Verolme Ishibras * 8,250,000 14,378
Iven, S.A. * 6,214,000 2,506,269
Marcopolo, S.A. Cl. B * 1,400,000 320,530
Metalurgica Gerdau, S.A. 36,685,000 683,174
Salegma Cl. B 249,835,663 972,820
Telecomunicacoes de Sao Paulo, S.A. 13,058,355 2,795,943
Telecomunicacoes Brasileiras, S.A. 3,250,000 226,883
------------
23,081,867
RUSSIA1.8%
RNGS Holdings, Ltd.
8%, redeemable pfd. (b)* 37,500 13,665,534
Total Preferred Stocks
(cost $36,969,647) 36,747,401
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $VALUE
- -------------------------------------------------------------------------
CONVERTIBLE BONDS0.2%
COLOMBIA0.2%
Banco de Colombia
5.20%, 2/01/99 $ 1,100 $ 992,750
5.20%, 2/01/99 (c) 150 135,375
Total Convertible Bonds
(cost $1,287,500) 1,128,125
TIME DEPOSIT3.9%
Bank of Scotland
5.50%, 7/01/96 14,700 14,700,000
WestDeutsche Landesbank
5.50%, 7/01/96 14,700 14,700,000
Total Time Deposits
(cost $29,400,000) 29,400,000
TOTAL INVESTMENTS98.8%
(cost $648,478,316) 748,924,304
Other assets less liabilities1.2% 9,241,434
NET ASSETS100% $758,165,738
* Non-income producing security.
(a) Securities or portions thereof, have been segregated to collateralize
forward exchange currency contracts. This collateral has a total market value
of approximately $133,537,722.
(b) Valued at fair market value (see Notes A & H).
(c) Securities are exempt from registration under Rule 144 A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1996,
these securities amounted to $12,601,030 or 1.7% of net assets.
(d) Currently non-salable and accordingly has no market value.
Glossary of Terms:
ADR - American Depository Receipt.
GDR - Global Depository Receipt.
GDS - Global Depository Security.
See notes to financial statements.
13
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $648,478,316) $748,924,304
Cash, at value (cost $2,306,566) 2,312,045
Receivable for investment securities sold 13,645,627
Dividends and interest receivable 5,449,292
Receivable for capital stock sold 940,161
Deferred organization expense 129,229
Other assets 111,077
Total assets 771,511,735
LIABILITIES
Payable for investment securities purchased 9,011,038
Payable for capital stock redeemed 1,819,386
Advisory fee payable 619,153
Unrealized depreciation of forward exchange currency contracts 579,560
Distribution fee payable 234,245
Accrued commitment fees 12,698
Accrued expenses 1,069,917
Total liabilities 13,345,997
NET ASSETS $758,165,738
COMPOSITION OF NET ASSETS
Capital stock, at par $ 62,590
Additional paid-in capital 619,116,730
Accumulated net investment income 10,459,624
Accumulated net realized gain on investments and foreign
currency transactions 28,717,797
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 99,808,997
$758,165,738
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($672,731,913/
55,446,680 shares of capital stock issued and outstanding) $12.13
Sales Charge-4.25% of public offering price .54
Maximum offering price $12.67
CLASS B SHARES
Net asset value and offering price per share($83,050,451/
6,944,063 shares of capital stock issued and outstanding) $11.96
CLASS C SHARES
Net asset value, redemption and offering price per share($2,383,374
/199,282 shares of capital stock issued and outstanding) $11.96
See notes to financial statements.
14
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of
$1,583,984) $14,236,629
Interest 1,310,984 $ 15,547,613
EXPENSES
Advisory fee 5,562,841
Distribution fee - Class A 1,431,198
Distribution fee - Class B 781,372
Distribution fee - Class C 10,808
Custodian 1,291,032
Transfer agency 831,269
Printing 337,114
Registration 296,022
Audit and legal 219,316
Administrative 150,664
Loan commitment fees (see note E) 53,264
Amortization of organization expenses 44,297
Loan agreement expense 34,065
Directors' fees 21,414
Miscellaneous 6,096
Total expenses before interest 11,070,772
Interest expense 77,176
Total expenses 11,147,948
Net investment income 4,399,665
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments 35,199,467
Net realized gain on foreign currency transactions 2,019,234
Net change in unrealized appreciation (depreciation) of:
Investments 101,754,331
Foreign currency denominated assets and liabilities (652,292)
Net gain on investments and foreign currency transactions 138,320,740
NET INCREASE IN NET ASSETS FROM OPERATIONS $142,720,405
See notes to financial statements.
15
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1996 1995
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 4,399,665 $ 77,871
Net realized gain (loss) on investments and
foreign currency transactions 37,218,701 (2,432,221)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 101,102,039 (708,535)
Net increase (decrease) in net assets from
operations 142,720,405 (3,062,885)
CAPITAL STOCK TRANSACTIONS
Net increase 522,213,677 68,445,326
Total increase 664,934,082 65,382,441
NET ASSETS
Beginning of year 93,231,656 27,849,215
End of year $758,165,738 $93,231,656
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Worldwide Privatization Fund, Inc. (the "Fund"), organized as a
Maryland corporation on March 16, 1994, is registered under the Investment
Company Act of 1940 as a non-diversified, open-end management investment
company. The Fund offers Class A, Class B and Class C shares. Class A and B
shares commenced operations on June 2, 1994. Class C commenced operations on
February 8, 1995. Class A shares are sold with an initial sales charge of up to
4.25%. Class B shares are currently sold with a contingent deferred sales
charge which declines from 4.00% to zero depending on the period of time the
shares are held. Class B shares will automatically convert to Class A shares
eight years after the end of the calendar month of purchase. Class C shares
were sold without an initial or contingent deferred sales charge. However,
Class C shares purchased on or after July 1, 1996, are subject to a contingent
deferred sales charge of 1% on redemptions made within the first year after
purchase. All three class of shares have identical voting, dividend,
liquidation and other rights, and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange for which market
quotations are readily available are valued at the last quoted sales price on
that exchange prior to the time when assets are valued. Securities listed or
traded on certain foreign exchanges whose operations are similar to the U.S.
over-the-counter market are valued at the price within the limits of the latest
available current bid and asked price deemed best to reflect fair value.
Securities which mature in 60 days or less are valued at amortized cost which
approximates market value. Restricted securities, illiquid securities and
securities for which the closing of market prices are not considered
representative of their value are valued at fair value as determined by the
Board of Directors. In determining fair value, consideration is given to cost,
operating and other financial data.
2. ORGANIZATION EXPENSES
Organization Expenses of approximately $220,000 have been deferred and are
being amortized on a straight-line basis through June 1999.
3. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gain on foreign currency transactions represents foreign exchange
gains and losses from the holding of foreign currency contracts, foreign
currencies, exchange gains or losses realized between the trade and settlement
dates on security transactions, and the difference between the amounts of
dividends, interest and foreign taxes receivable recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
currency gains and losses from valuing foreign currency denominated assets and
liabilities at year end exchange rates are reflected as a component of net
unrealized appreciation of investments and foreign currency denominated assets
and liabilities.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. 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 on short-term securities as adjustments
to interest income.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
6. RECLASSIFICATION OF NET ASSETS
To reflect reclassifications arising from permanent book/tax differences for
the year ended June 30, 1996, $6,784,260 was reclassified from accumulated net
realized gain on investments and foreign currency transactions to accumulated
net investment income.
7. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance with
tax regulations, which may differ from generally accepted accounting principles.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement, the Fund pays its Adviser, Alliance
Capital Management L.P., (the "Adviser"), a fee at an annual rate of 1% of the
Fund's average daily net assets. Such fee is accrued daily and paid monthly.
The Adviser has agreed, under the terms of the advisory agreement, to reimburse
the Fund to the extent that its aggregate expenses (exclusive of interest,
taxes, brokerage, distribution fee, extraordinary expenses and certain other
expenses) exceed the limits prescribed by any state in which the Fund's shares
are qualified for sale. The Adviser believes that the most restrictive expense
ratio limitation currently imposed by any state is 2.5% of the first $30
million of its average daily net assets, 2% of the next $70 million of its
average daily net assets and 1.5% of its average daily net assets in excess of
$100 million. No such reimbursement was required for the year ended June 30,
1996. Pursuant to the advisory agreement, the Fund paid $150,664 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended June 30, 1996.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $598,508 for the year ended June 30, 1996.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, serves as the Distributor of the Fund's shares. The
Distributor received front-end sales charges of $6,949 from the sale of Class A
shares and $458,792 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B for the year ended June 30, 1996.
Brokerage commissions paid on securities transactions for the year ended June
30, 1996, amounted to $1,479,941, none of which was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser.
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 Fund's 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 incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $4,025,624 and $62,445 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.
18
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
Government securities) aggregated $157,677,751 and $554,740,696, respectively,
for the year ended June 30, 1996. There were no purchases or sales of U.S.
Government and government agency obligations for the year ended June 30, 1996.
At June 30, 1996, the cost of securities for federal income tax purposes was
$657,049,959. Accordingly, gross unrealized appreciation of investments was
$144,104,311 and gross unrealized depreciation of investments was $52,229,966,
resulting in net unrealized appreciation of $91,874,345 excluding foreign
currency.
At June 30, 1996, the Fund has $809,172 of Alliance Global Privatization Fund's
(which was acquired in 1995; see Note I) capital loss carry forward which
expires in 2003 to offset future gains. The Fund utilized a capital loss
carryover of $1,658,803 to offset gains realized during the year ended June 30,
1996.
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sales commitments denominated
in foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contracts is included in realized gains or
losses on foreign currency transactions. Fluctuations in the value of forward
exchange currency contracts are recorded for financial reporting purposes as
unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or securities in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from
the potential inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The face or contract amount, in U.S. dollars, as reflected in the
following table, reflects the total exposure the Fund has in that particular
currency contract.
At June 30, 1996, the fund had outstanding forward exchange currency contracts,
as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
Austrian Schilling, expiring 7/31/96 136,141 $12,674,881 $12,741,940 $ (67,059)
British Pounds, expiring 7/31/96 13,240 20,409,583 20,562,886 (153,303)
Danish Krone, expiring 7/31/96 12,415 2,111,401 2,121,541 (10,140)
Deutsche Marks, expiring 7/31/96 22,316 14,621,897 14,700,102 (78,205)
Finnish Markka, expiring 7/31/96 44,035 9,503,496 9,519,508 (16,012)
French Francs, expiring 7/31/96 122,866 23,789,494 23,916,410 (126,916)
Irish Punt, expiring 7/31/96 1,722 2,727,351 2,752,350 (24,999)
Italian Lira, expiring 7/31/96 15,022,480 9,763,099 9,779,153 (16,054)
Netherlands Guilder, expiring 7/31/96 15,061 8,807,591 8,849,978 (42,387)
Norwegian Krone, expiring 7/31/96 21,183 3,246,888 3,265,145 (18,257)
Spanish Peseta, expiring 7/31/96 836,616 6,495,970 6,526,181 (30,211)
Swedish Krona, expiring 7/31/96 19,275 2,913,480 2,909,497 3,983
-----------
$(579,560)
</TABLE>
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE E: BANK BORROWING
The Fund entered into a Revolving Credit Agreement with NationsBank of Georgia
on October 27, 1995, which terminates on October 26, 1996 unless extended for
an additional one year period by the Fund. The maximum credit available is
$50,000,000 and requires no collateralization. There was no loan outstanding
under the Revolving Credit Agreement, at June 30, 1996.
The weighted average of bank loans outstanding for the year ended June 30,
1996, amounted to approximately $1,247,000 at a weighted average interest rate
of 6.12%. For the year then ended, interest expense of $77,176, commitment fees
of $53,264 and loan origination fees of $34,065 were charged to the Fund.
The Fund is obligated to pay NationsBank of Georgia a commitment fee computed
at the rate of .10% per annum on the average daily unused portion of the
revolving credit.
NOTE F: CAPITAL STOCK
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
------------ ----------- --------------- ------------
CLASS A
Shares sold 1,832,982 1,237,218 $ 29,432,663 $13,013,117
Shares issued in
connection with the
acquisition of Global
Privatization Fund 102,861,209 -0- 1,034,044,558 -0-
Shares converted from
Class B to Class A 17,485 -0- 204,175 -0-
Shares redeemed (50,594,492) (419,714) (534,852,442) (4,175,651)
Net increase 54,117,184 817,504 $ 528,828,954 $ 8,837,466
CLASS B
Shares sold 1,323,183 6,976,991 $ 15,468,400 $73,736,087
Shares converted from
Class B to Class A (17,389) -0- (204,175) -0-
Shares redeemed (2,218,161) (1,467,380) (23,735,902) (14,453,504)
Net increase(decrease) (912,367) 5,509,611 $ (8,471,677) $59,282,583
SHARES AMOUNT
-------------------------- ------------------------------
YEAR ENDED FEB. 8,1995* YEAR ENDED FEB. 8,1995*
JUNE 30, TO JUNE 30, TO
1996 JUNE 30, 1995 1996 JUNE 30,1995
------------ ------------ -------------- --------------
CLASS C
Shares sold 195,418 33,457 $2,183,955 $325,277
Shares redeemed (29,593) -0- (327,555) -0-
Net increase 165,825 33,457 $1,856,400 $325,277
* Commencement of distributions.
20
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE G: CONCENTRATION OF RISK
Investing in securities of foreign companies involves special risks which
include revaluation of currency and future adverse political and economic
developments. Moreover, securities of many foreign companies and their markets
may be less liquid and their prices more volatile than those of comparable U.S.
companies. The Fund invests in securities issued by enterprises that are
undergoing, or that have undergone, privatization. Privatization is a process
through which the ownership and control of companies or assets changed in whole
or in part from the public sector to the private sector. Through privatization
a government or state divests or transfers all or a portion of its interest in
a state enterprise to some form of private ownership. Therefore, the Fund is
susceptible to the government re-nationalization of these enterprises and
economic factors adversely affecting the economics of these countries. In
addition, these securities created through privatization may be less liquid and
subject to greater volatility than securities of more developed countries.
NOTE H: ILLIQUID SECURITIES
SECURITY DATE ACQUIRED U.S. $ COST
- ------------------------------- ----------------- -----------
Austelko Holdings series A 11/22/95 $ 1,934,400
Banpais S.A. ADR 6/30/94-9/19/94 926,925
B.W.I.A. International Airways 2/21/95 2,999,999
Efes Sinai Yatrim 7/12/94 1,000,000
GBM Atlantico, S.A 3/23/94-11/9/94 1,687,400
Interuropa Bank 4/13/94 2,007,288
Light Participacoes, S.A 3/16/94-9/30/94 929,912
Near East International 9/29/95 1,000,000
Nearmedic, Ltd 3/18/96-4/30/96 934,000
Nearmedic, Ltd; new 4/16/96 351,000
Norte Cementos Pacasmayo 6/23/95 1,402,597
Ontario-Quinta A.V.V. 8/15/94 2,052,257
RNGS Holdings, Ltd. 8% pfd. 10/18/94-12/28/94 11,287,500
Societatea R 11/15/94-8/30/95 512,631
TVI Televisao Idependiente 6/24/94-1/18/95 4,577,775
The securities shown have been valued at fair value in accordance with
procedures described in Note A. The aggregate amount of securities valued at
fair values on June 30, 1996 was $54,320,178 representing 7.2% of net assets.
NOTE I: ACQUISITION OF THE GLOBAL PRIVATIZATION FUND
On October 30, 1995, the Fund acquired all the net assets of the Global
Privatization Fund pursuant to a plan of reorganization approved by the Global
Privatization Fund shareholders on October 18, 1995. The acquisition was
accomplished by a tax-free exchange of 102,861,209 shares of the Fund for
75,207,200 shares of Global Privatization Fund on October 30, 1995. The
aggregate net assets of the Fund and Global Privatization Fund immediately
before the acquisition were $86,665,280 and $1,057,273,285 (including
unrealized appreciation of $23,228,727) respectively. Immediately after the
acquisition the combined net assets of the Fund amounted to $1,143,938,565.
Former shareholders of Global Privatization Fund that redeem their shares were
subject to a redemption fee of 2% prior to June 30, 1996 and 1% through
September 30, 1996.
21
FINANCIAL HIGHLIGHTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
------------------------------------
JUNE 2,
YEAR ENDED JUNE 30, 1994(E)
---------------------- TO
1996 1995 JUNE 30,1994
----------- --------- ------------
Net asset value, beginning of period $10.18 $9.75 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .10(c) .06 .01
Net realized and unrealized gain (loss)
on investments 1.85 .37 (.26)
Net increase (decrease) in net asset
value from operations 1.95 .43 (.25)
Net asset value, end of period $12.13 $10.18 $ 9.75
TOTAL RETURN
Total investment return based on net
asset value(a) 19.16% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $672,732 $13,535 $4,990
Ratio of expenses to average net assets 1.87% 2.56% 2.75%(b)
Ratio of expenses to average net assets
excluding interest expense (see Note E) 1.85% 2.56% 2.75%
Ratio of net investment income to
average net assets .95% .66% 1.03%(b)
Portfolio turnover rate 28% 36% -0-%
See footnote summary on page 24.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
------------------------------------
JUNE 2,
YEAR ENDED JUNE 30, 1994(E)
---------------------- TO
1996 1995 JUNE 30,1994
----------- --------- ------------
Net asset value, beginning of period $10.10 $ 9.74 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.02)(c) .02 -0-
Net realized and unrealized gain(loss)
on investments 1.88 .34 (.26)
Net increase (decrease) in net asset
value from operations 1.86 .36 (.26)
Net asset value, end of period $11.96 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on net
asset value(a) 18.42% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $83,050 $79,359 $22,859
Ratio of expenses to average net assets 2.83% 3.27% 3.45%(b)
Ratio of expenses to average net assets
excluding interest expense (see Note E) 2.82% 3.27% 3.45%
Ratio of net investment income (loss)
to average net assets (.20)% .01% .33%(b)
Portfolio turnover rate 28% 36% -0-%
See footnote summary on page 24.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
------------------------
FEB. 8,
YEAR ENDED 1995(F)
JUNE 30, TO
1996 JUNE 30,1995
---------- ------------
Net asset value, beginning of period $10.10 $ 9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03(c) .05
Net realized and unrealized gain on investments 1.83 .52
Net increase in net asset value from operations 1.86 .57
Net asset value, end of period $11.96 $10.10
TOTAL RETURN
Total investment return based on net asset value(a) 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,383 $338
Ratio of expenses to average net assets 2.57% 1.03%(b)
Ratio of expenses to average net assets excluding
interest expense (see Note E) 2.57% 1.03%
Ratio of net investment income to average net assets .63% 1.04%(b)
Portfolio turnover rate 28% 36%
(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 for a period of less than one year is not
annualized.
(b) Annualized.
(c) Based on average shares outstanding.
(e) Commencement of operations.
(f) Commencement of distributions.
24
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE WORLDWIDE PRIVATIZATION
FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Worldwide Privatization
Fund, Inc. (the "Fund") at June 30, 1996, the result of its operations for the
year then ended, the changes in its net assets for the two years then ended and
the financial highlights for the two years then ended and for the period June
2, 1994 through June 30, 1994, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1996 by correspondence with the
custodian and brokers, and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
August 16, 1996
25
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
ROBERT C. WHITE (1)
OFFICERS
MARK H. BREEDON, SENIOR VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
NICHOLAS CROSSLAND, VICE PRESIDENT
DAVID EDGERLY, VICE PRESIDENT
A. RAMA KRISHNA, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
ERIC N. PERKINS, VICE PRESIDENT
JEAN VAN DE WALLE, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & COMPANY
40 Water Street
Boston, MA 02109-3661
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
26
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
27
ALLIANCE WORLDWIDE PRIVATIZATION FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING 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.
WWPAR
