ALLIANCE WORLDWIDE PRIVATIZATION FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1995
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
February 12, 1996
Dear Shareholder:
International markets have generally enjoyed a strong burst of activity since
the beginning of the year. We've seen a significant recovery in emerging
markets worldwide, particularly in Eastern Europe, which we expect to continue
at least over the first half of 1996.
Most of the improvement has been driven by declining short-term interest rates
in Europe. It's now clear that growth is beginning to slow in the U.S. and
Western Europe and at the same time inflation shows no signs of increasing. In
fact, as we'll explain further, some economies may see declines in inflation in
1996. Consequently central banks worldwide have been more willing to reduce
interest rates. This monetary easing is expected to continue well over the
remainder of the year and we anticipate further positive market reaction to a
reduction in the cost of money.
Despite the relative weakness of many foreign stock markets, especially in the
emerging markets arena, privatization volume-including both public and private
equity transactions-reached $70 billion in 1995. This was well ahead of most
estimates and close to the record 1994 total. Consequently we're anticipating
another record year in 1996, particularly as the recent rally in emerging
markets has revived investors' appetite for new issues from the region.
MARKET PERFORMANCE IN 1995
Looking at 1995 overall, the U.S. market posted the best performance of all
major global markets, outperforming Europe, Japan and the developing markets.
During the year, the S&P 500-stock Index gained 37.5%; the European Index
gained 21.5%, of which 8% represented currency gains; Japan was up 0.7% despite
yen weakness, and developing markets lagged with a decline of 7% for the full
year.
Weak growth and too-high interest rates held down returns in foreign markets in
1995. Currency-market volatility was another major factor as the U.S. dollar
experienced a roller coaster ride against the yen in particular. From January
to April, the dollar weakened dramatically, which reduced earnings for most
non-dollar based companies as their goods and services began to look expensive
in the competitive global marketplaces. A significant reversal of the dollar's
weakness occurred by year end, after settlement of the U.S./Japan trade dispute
and intervention by major central banks, primarily in the U.S. and Japan.
This situation is changing in 1996: On balance, we look for easier monetary
policies in both developed markets like Europe and Japan and emerging regions
like Latin America and Eastern Europe. We also expect stronger growth in Japan
and many of the emerging markets.
1996 FORECAST
If interest rates globally continue to decline and inflation remains subdued,
foreign markets should soon begin to catch up with U.S. markets, which are
unlikely to reach last year's levels. Our 1996 forecast includes better sales
and earnings comparisons for European and Japanese manufacturers against
dollar-based competitors.
In Europe, Germany and France appear to be slowing quite rapidly. Their
economies are being hurt by overvalued exchange rates both relative to the U.S.
dollar and relative to other European currencies. The monetary easing that is
accompanying this slowing of growth does not appear to be offsetting the tight
fiscal policy in Europe that most countries are following in order to meet the
Maastricht criteria for government debt. (The Maastricht Treaty, enacted in
1992, stipulates that European Union nations joining the planned monetary union
must meet certain economic criteria, including specified annual rates of
inflation.) In this environment, the outlook for further declines in inflation
remains very good. In markets such as Italy and Spain structural reforms appear
to be having the desired effect of reducing inflation and the government
deficits.
Japan, of course, is still struggling to jump-start its economy. Monetary and
fiscal stimuli are more advanced than elsewhere and we are hopeful that low
inflation rates and government intervention will be successful in stimulating
the economy. If such efforts succeed, Japan may have the most favorable outlook
for growth. The concern, however, is whether it will be able to sustain any
improvement if other economies to which Japan is a net exporter continue to
slow.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PRIVATIZATIONS IN 1996
As we mentioned, we're looking for the possibility of another record year for
privatization volume in 1996. Privatization performance will be driven to some
extent by lower short-term interest rates and increased demand for
international securities in Japanese and American markets.
Several upcoming new issues have exciting possibilities. Among these are
Railtrack in the United Kingdom; Deutsche Telekom in Germany (which will
probably be the largest privatization ever); Gazprom in Russia; and ENA in
Italy. There is significant breadth of other medium and smaller companies
across a broad range of industries that also offer strongly positive investment
potential.
INVESTMENT RESULTS
The following table shows the Worldwide Privatization Fund's investment results
over the six-month period since we last reported (June 30, 1995, through
December 31). Also shown for comparison are total returns for the benchmark
EAFE Index, an unmanaged but broad measure of stock market performance in
Europe, Australia and the Far East, and for Morgan Stanley's Emerging Markets
Free Index, also unmanaged, which measures stock performance for a universe of
19 emerging markets:
Six Months Ended December 31, 1995
Total Return* Ending NAV
------------- ----------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A +2.85% $10.47
Class B +2.48% $10.35
Class C +2.48% $10.35
MSCI EAFE INDEX +7.98%
MSCI EMERGING MARKETS FREE INDEX -1.98%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
12/31/95; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
Performance trailed the EAFE over the period because more than a third of
Worldwide Privatization Fund's assets are invested in emerging markets. The
developed markets which make up most of the index performed better than the
particularly weak emerging markets over much of 1995. Also, the Japanese
market, the second largest in the world, comprises a large part of the EAFE and
the Fund's exposure to Japan is relatively small. (The Japanese equity market,
measured by Morgan Stanley's Japan Index, gained more than 9% in the last half
of 1995).
We're glad to report that your Fund's performance since inception continues to
be favorable particularly in light of weak returns in international markets
over much of this period. In the table below are average annual total returns,
based on net asset values, updated through the end of January 1996:
Average Annual Total Returns
as of January 31, 1996
----------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A +7.31% (from 6/2/94)
Class B +6.51%
MSCI EAFE INDEX +7.45%
MSCI EMERGING MARKETS FREE INDEX +1.24%
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class C +16.94% (from 2/8/95)
MSCI EAFE INDEX +16.85%
MSCI EMERGING MARKETS FREE INDEX +13.62%
PORTFOLIO CHARACTERISTICS
Overall Worldwide Privatization Fund remains broadly fully invested and well
diversified by country, industry and issue. At the end of December the
portfolio was about 99% invested, with approximately 62% in developed markets
and 38% in emerging markets (our normal target is 60% in developed and 40% in
emerging markets).
The Fund's portfolio held approximately 180 equity issues and represented the
markets of 47 countries with diversification led by the United Kingdom, France
and Brazil. The major areas of investment included electric and gas utilities,
telecoms and airlines.
2
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
Since we're expecting further strengthening for the dollar over the course of
the year we've maintained significant hedges on European currencies. At the
time of writing approximately 17% of the Fund's assets were hedged into U.S.
dollars and a further 30% was invested in U.S. dollar-related currencies.
Consequently we consider the Fund adequately protected from a significant rise
in the dollar.
THE GLOBAL PRIVATIZATION FUND ACQUIRED
This letter gives us the opportunity to welcome the former shareholders of The
Global Privatization Fund, a closed-end fund whose assets were acquired by
Worldwide in October of 1995. We're pleased that you have continued to include
us in your overall investment plan and that, like us, you remain enthusiastic
about the long-term growth potential afforded by a portfolio of carefully
selected privatized companies. Worldwide Privatization Fund, with assets
totaling about $774 million, remains the only mutual fund for U.S. investors
that invests exclusively in the privatization process.
We remain confident about the outlook for world equity markets and the
potential of privatization issues in particular over the course of 1996. As
always we look forward to reporting your Fund's progress to you in coming
periods.
Sincerely,
John D. Carifa
Chairman and President
Mark H. Breedon
Senior Vice President
3
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
Alliance Worldwide Privatization Fund seeks to provide investors with long-term
capital appreciation. It is a non-diversified fund that, as a fundamental
policy, 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 DECEMBER 31, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
----------------------------
. One Year +4.91% +0.48%
. Since Inception* +2.95% +0.18%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
----------------------------
. One Year +4.13% +0.12%
. Since Inception* +2.20% +0.32%
CLASS C SHARES
. Since Inception* +9.61%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
Class C shares are not subject to front-end or contingent deferred sales
charges. Past performance does not guarantee future results. Investment return
and principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
* Inception: 6/2/94, Class A and Class B; 2/8/95, Class C.
4
TEN LARGEST HOLDINGS
DECEMBER 31, 1995 (UNAUDITED) 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 $ 22,668,750 2.9%
East Japan Railway Co.-Largest of six
railway companies born out of privatized
and divided Japanese National Railway 22,365,133 2.9
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 16,875,000 2.2
Korea Mobile Telecom Corp.-Provider of
mobile communications and radio paging
services in Korea 16,075,243 2.1
Roussel-Uclaf-France's major drug provider
and distributor focused on antibiotics 14,763,852 1.9
CPT Telefonica del Peru, S.A. Cl. B-Peru's
provider of telecommuncation services 14,101,835 1.8
Viag AG-Provides electrical power and
natural gas services, aluminum and
aluminum products, chemicals, ceramics
and glass and other services 13,431,301 1.8
Seita-France's major tobacco producer and
distributor 12,564,902 1.6
Usinor Sacilor-France's and Europe's major
steel producer 11,914,741 1.5
PT Indosat-Provider of international
telecommunications services in Indonesia 11,140,477 1.4
$155,901,234 20.1%
5
DISTRIBUTION OF PORTFOLIO BY COUNTRY
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF PORTFOLIO*
---------------------
United Kingdom 9.2%
France 8.7
Brazil 6.6
Austria 4.4
Italy 4.4
Germany 4.1
Japan 4.1
Peru 3.4
South Korea 3.3
United States 3.1
Netherlands 2.8
Finland 2.7
Australia 2.6
Russia 2.6
Spain 2.4
Hungary 2.2
Denmark 2.1
Philippines 2.1
Malaysia 2.1
Canada 2.0
Hong Kong 1.9
Indonesia 1.9
New Zealand 1.8
Argentina 1.7
Turkey 1.7
Thailand 1.5
Portugal 1.4
Ireland 1.4
Poland 1.3
Norway 1.2
Sweden 1.1
Pakistan 1.1
Czech Republic 0.9
Ghana 0.8
Mexico 0.8
South Africa 0.8
Kazakhstan 0.7
Greece 0.6
Israel 0.5
Botswana 0.5
Trinidad & Tobago 0.4
Egypt 0.3
Jordan 0.2
Ecuador 0.2
Colombia 0.1
Slovak Republic 0.1
Bolivia 0.1
Romania 0.1
Peoples Republic of China 0.0
------
100.0%
* Excludes short-term obligations.
6
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $ 65,961,787 8.5%
Capital Goods 24,287,136 3.1
Consumer Manufacturing 26,098,112 3.4
Consumer Services 64,820,677 8.4
Consumer Staples 33,448,630 4.3
Energy 59,315,223 7.6
Financial Services 98,043,355 12.7
Healthcare 38,716,095 5.0
Multi-Industry 37,010,383 4.8
Technology 2,330,292 0.3
Telephone Utilities 103,617,478 13.4
Transportation 27,402,025 3.5
Utilities 155,637,104 20.1
Other 496,588 0.1
Total Investments* 737,184,885 95.2
Cash and receivables, net of liabilities 37,192,179 4.8
Net Assets $774,377,064 100.0%
* Excludes short-term obligations.
7
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
COMMON STOCKS89.6%
ARGENTINA1.7%
Central Costanera, S.A. Cl. B 1,516,000 $ 4,668,580
Central Puerto, S.A. Cl. B 259,003 984,064
Dragados y Construcciones Argentina Cl. B 519,899 1,715,409
Metrogas, S.A. (ADR) 275,200 2,683,200
Telecom Argentina, S.A. Cl. B 83,888 395,892
Telefonica de Argentina S.A. Cl. B (ADR) 200 5,450
Transportadora de Gas del Sur, S.A. Cl. B* 986,000 2,375,904
-----------
12,828,499
AUSTRALIA2.5%
Commonwealth Serum Lab., Ltd. 3,326,000 9,888,200
Qantas Airways, Ltd. 1,886,287 3,140,442
Tab Corp Holdings, Ltd. 2,295,000 6,481,885
-----------
19,510,527
AUSTRIA4.2%
Austria Mikro Systeme International AG (a) 68,374 11,078,766
Burgenland Holdings AG 116,280 4,782,289
Flughafen Wein AG (a) 100,000 6,738,940
VA Technologies AG * 80,000 10,148,051
-----------
32,748,046
BOLIVIA0.0%
Compania Boliviana de Energia, S.A. 13,000 432,250
BOTSWANA0.5%
Sechaba Investment Trust, Ltd. 5,227,000 3,987,822
BRAZIL3.0%
Acesita Acos Especiais 117,972,000 558,332
Centrais Elecricas Brasileiras, S.A. 170,000 113,689
Centrais Eletricas Brasileiras (ADR) 105,000 1,417,500
Companhia Siderurgica de Tubarao (ADR)(b) 21,900 427,050
Companhia Siderurgica Nacional 173,000,000 3,559,854
Compania Paulista de Forca e Luz 47,400,000 2,296,970
Light Servicios de Electricidade, S.A. 26,750,000 8,559,339
(ADR) 37,500 1,776,563
Siderurgica Riograndense, S.A. 55,000,000 831,833
Telecomunicacoes Brasileiras, S.A. 20,000,000 773,702
Telecomunicacoes de Sao Paulo, S.A. 18,450,000 2,667,035
-----------
22,981,867
CANADA1.9%
Alberta Energy Co., Ltd. 391,500 6,271,511
Canadian National Railway 21,400 321,000
Near East International(c) 10 1,000,000
Petro-Canada 620,000 7,150,965
-----------
14,743,476
CZECH REPUBLIC0.9%
Ceske Energeticke Zavody (GDS)(b)* 44,000 1,590,640
Elektrarny Opatovice 10,513 1,259,620
Prague Brewery A.S. 275 12,788
Tabak A.S. 4,525 695,736
Vodni Stavby Praha A.S. 66,000 3,229,956
-----------
6,788,740
DENMARK2.0%
Copenhagen Airport 82,500 6,298,451
Tele Danmark, A.S. Series B (a) 170,000 9,274,821
15,573,272
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
ECUADOR0.1%
La Cemento Nacional Ecuador (b) 6,600 $ 1,155,000
EGYPT0.2%
Commercial International Bank 6,000 896,871
Torrah Portland Cement 69,500 995,483
-----------
1,892,354
FINLAND2.6%
Finnair Oy (a) 850,400 6,256,137
Unitas Bank, Ltd. Cl. A (a) 2,576,000 6,514,357
Valmet Corp. Series A (a) 300,000 7,448,658
-----------
20,219,152
FRANCE8.3%
Allevard Industries 28,000 1,688,816
Banque Nationale de Paris 9 406
Eramet 67,902 4,442,576
Renault, S.A. (a) 249,000 7,178,287
Roussel-Uclaf 87,000 14,763,852
Seita (a) 346,225 12,564,902
SGS-Thomson Microelectronics N.V. 126,000 4,830,300
Societe National Elf Aquitaine 90,987 6,711,942
Usinor Sacilor (a) 900,000 11,914,742
-----------
64,095,823
GERMANY3.9%
Bankgesellschaft Berlin A.G. 22,425 5,715,119
Deutsche Lufthansa A.G. 80,000 11,016,979
Viag A.G. 33,500 13,431,301
-----------
30,163,399
GHANA0.8%
Ashanti Goldfields Co., Ltd.* (b) 250,000 5,031,250
(GDR) 50,000 1,012,500
-----------
6,043,750
GREECE0.5%
Hellenic Sugar 318,840 4,111,808
HONG KONG1.8%
Consolidated Electric Power 2,575,000 4,678,791
Hopewell Holdings 9,181,684 5,283,995
Yizheng Chemical Fibre Co. 18,060,900 4,064,140
-----------
14,026,926
HUNGARY2.1%
Danubius Hotels RT 159,850 1,503,383
Interuropa Bank (c) 14,772 1,081,168
Magyar Olaj-es Gazipare Reszvenytar 511,000 4,226,231
OTP Bank (GDR) 615,000 4,305,000
Primagaz Hungaria Co.
(Austrian certificates) 80,000 2,400,644
Ordinary 19,088 572,794
Richter Gedeon Vegyeszeti Gyar 6,650 128,493
Zalakeramia 75,000 1,635,184
Zalakeramia RT 6,300 150,318
-----------
16,003,215
INDONESIA1.8%
PT Indosat 3,069,000 11,140,477
PT Tambang Timah (GDR) 51,000 619,650
PT Telekomunikasi Indonesia (ADR) 77,000 1,944,250
-----------
13,704,377
IRELAND1.3%
Greencore Plc. (a) 512,617 4,470,914
Irish Life Plc. (a) 1,500,000 5,689,138
-----------
10,160,052
ISRAEL0.5%
Bank Hapoalim 1,073,300 1,772,777
Tadiran, Ltd. 92,500 2,220,000
3,992,777
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
ITALY4.2%
Ente Nazionale Idrocarburi 2,721,000 $ 9,510,016
Instituto Nazionale delle Azzicurazioni (a) 7,000,000 9,279,186
Istituto Mobiliare Italiano S.p.A. (a) 1,000,000 6,297,378
Telecom Italia Mobile S.p.A. 3,305,000 3,475,743
Telecom Italia S.p.A. Di Risp 3,305,000 4,041,852
-----------
32,604,175
JAPAN3.9%
DDI Corp. 415 3,215,496
East Japan Railway Co. 4,600 22,365,133
Nippon Telegraph & Telephone Corp. 566 4,577,337
-----------
30,157,966
JORDAN0.2%
Arab Potash Co. 217,433 1,809,386
KAZAKHSTAN0.7%
Bakyrchik Gold Plc. 1,240,450 5,318,626
MALAYSIA2.0%
Aokam Perdana Berhad 708,000 1,142,970
Ekran Berhad 813,000 1,984,723
Gamuda Berhad 729,166 3,588,839
warrants expiring 1/17/00 250,000 460,684
Petronas Gas Berhad 430,000 1,464,543
Telekom Malaysia Berhad 740,000 5,769,185
United Engineers, Ltd. 140,000 893,019
-----------
15,303,963
MEXICO0.8%
Banpais S.A. (ADR)(c)* 96,000 -0-+
Consorcio Grupo Dina 'L', S.A. de C.V. 8,000 3,774
Consorcio Grupo Dina 'L', S.A. de C.V. (ADR) 39,920 54,890
Empresas ICA Sociedad Controladora,
S.A. de C.V. (ADR) 2,500 25,625
GBM Atlantico, S.A. (ADR)(c) 78,000 234,000
Grupo Financiero Banamex Accival,
S.A. de C.V. Cl. L 69,800 103,682
Grupo Financiero Bancomer,
S.A. de C.V. Cl. L 318,519 82,571
Grupo Financiero Bancrecer,
S.A. de C.V. Cl. B 3,146,767 860,619
Grupo Financiero Banorte,
S.A. de C.V. Cl. B 3,695,582 3,439,310
Grupo Financiero Probursa,
S.A. de C.V. Cl. B 8,701,000 349,619
Grupo Mexicano de Desarrollo, S.A. de C.V.
(ADR) Cl. B 14,000 31,500
Grupo Profesional Planeacion Y Proyectos,
S.A. Cl. B 129,000 658,795
-----------
5,844,385
NETHERLANDS2.7%
KLM Royal Dutch Air Lines N.V. (a) 300,000 10,541,629
Koninklijke PTT Nederland NV 287,324 10,436,331
-----------
20,977,960
NEW ZEALAND1.8%
Energy Direct Corp., Ltd. 3,490,575 5,339,793
Telecom Corp. of New Zealand, Ltd. 1,000,000 4,314,749
Trustpower, Ltd. 3,816,000 3,916,694
-----------
13,571,236
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
NORWAY1.1%
Christiana Bank OG Kreditkasse (a) 2,000,000 $ 4,644,828
Den Norske Bank 1,500,000 3,886,489
-----------
8,531,317
PAKISTAN1.1%
Hub Power Co. Ltd. (GDR) 300,000 5,295,000
Pakistan Telecom
(GDR) 28,813 2,506,731
Ordinary 5,521 493,640
-----------
8,295,371
PEOPLES REPUBLIC OF CHINA0.0%
Tsingtao Brewery Co., Ltd. 82,000 18,982
PERU3.2%
Compania de Minas Buenaventura, S.A. 827,799 5,345,268
CPT Telefonica del Peru, S.A. 6,573,734 14,101,835
Explosivos, S.A. Cl. C 634,117 1,044,266
Norte Cementos Pacasmayo Private
Placement (c) 634,437 1,357,324
Ordinary 559,479 1,018,337
Ontario-Quinta A.V.V. (c) 2,000,000 2,000,000
-----------
24,867,030
PHILIPPINES2.0%
First Philippine Holdings Corp.
Series B 1,927,597 3,747,901
International Container Terminal Services,
Inc.* 2,479,250 1,299,645
Manila Electric Co. Series B 1,233,495 10,063,589
Philippine National Bank 32,563 360,018
-----------
15,471,153
POLAND1.2%
Bank Przemyslowo Handlowy 96,000 2,784,019
Bank Rozwoju Eksportu 135,000 2,053,336
Elektrim, S.A. 665,000 2,252,180
Polifarb Cieszyn 150,072 569,123
Polifarb Wroclaw 54,510 158,080
Vistula, S.A. 162,200 578,933
Wielkopolski Bank Kredytowy, S.A. 582,078 1,204,055
-----------
9,599,726
PORTUGAL1.4%
Portugal Telecom, S.A. 162,000 3,047,238
Semapa Society Investment E Gestao 406,500 4,346,038
Televisao Independiente (c) 676,000 3,139,384
-----------
10,532,660
ROMANIA0.0%
Societatea R (c) 30,454 410,840
RUSSIA0.3%
Sun Brewing (GDR)(b) 264,000 2,508,000
SLOVAK REPUBLIC0.1%
Nafta Gbely S.A.* 6,667 483,801
SOUTH AFRICA0.7%
South African Iron & Steel 6,109,746 5,497,179
SOUTH KOREA3.1%
Korea Electric Power Corp. 85,390 3,390,283
(ADR) 127,200 3,370,800
Korea Mobile Telecom Corp. 14,260 16,075,243
Korean Air Lines 28,730 1,007,355
Pohang Iron & Steel Co. 7,280 528,130
-----------
24,371,811
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
SPAIN2.3%
Argentaria Bancaria de Espana 100,000 $ 4,114,943
Endesa (a) 120,000 6,784,718
Repsol, S.A. (a) 200,000 6,542,760
-----------
17,442,421
SWEDEN1.2%
Austelko Holdings Series A (c) 260 1,934,400
Stadshypotek 300,000 6,006,986
-----------
7,941,386
THAILAND1.4%
Electricity Generating
Public of Thailand 594,000 2,027,948
The Industrial Finance Corp of Thailand 2,663,800 9,041,481
-----------
11,069,429
TRINIDAD & TOBAGO0.4%
B.W.I.A. International Airways (c) 2,727,272 2,999,999
TURKEY1.6%
Efes Sinai Yatrim (c) 13,438,261 507,521
Eregli Demir Ve Celik Fabrikalari T.A.S.* 40,116,750 3,293,658
Petrokimya Holding A.S. 1,907,000 970,723
Tofas Turk Otomobil Fabrikasi
(GDR) 3,064,000 1,685,200
Group E 760,000 73,629
Tupras Turkiye Petrol
Rafinerileri A.S.* 5,595,000 927,906
Turk Hava Yollari A.O.* 30,847,275 4,102,840
Usas Ucak Servisi A.S. 857,250 1,182,414
-----------
12,743,891
UNITED KINGDOM8.7%
East Midland Electric Plc. 197,120 2,040,995
London Electricity (a) 388,500 3,461,270
National Express Group Plc. 827,500 4,640,730
National Grid Holdings Plc 471,858 1,458,732
National Power Plc. (a) 660,000 4,608,767
Partially paid 115,000 275,125
Northern Ireland Electricity Plc. (a) 840,000 5,611,240
Northwest Water 674,859 6,458,101
Powergen Plc. 659,068 5,446,945
Partially paid 92,000 315,857
RJB Mining (a) 1,000,000 8,482,107
Scottish Hydro Electric 766,000 4,277,980
Scottish Power Corp. 740,000 4,253,481
Southern Water Plc. (a) 637,791 6,811,805
Stagecoach Holdings Plc. 834,500 4,602,203
Wessex Water Plc. 903,806 4,914,217
-----------
67,659,555
UNITED STATES2.9%
Pharmacia & Upjohn, Inc. (a) 585,000 22,668,750
Total Common Stocks (cost $658,622,721) 693,864,130
PREFERRED STOCKS5.5%
BRAZIL3.3%
Acesita Acos Especiais Itabira* 93,241,560 542,018
Bardella Industrias Mecanicas S.A. 12,786 1,052,400
Centrais Electric STA 2,500,000 1,208,910
Centrais Electricas de Goias 153,500,000 5,053,758
Companhia Energetica de Sao Paulo
(ADR) 172,600 1,445,525
Ordinary 47,887,140 1,393,824
Companhia Siderurgica Paulista 129,000 171,213
Compania Vale Do Rio Doce PN* 18,500,000 3,045,424
Fertilizantes Fosfatados 378,855,800 1,130,389
Industrial Verolme Ishibras 8,250,000 17,825
12
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
Iven, S.A. 4,214,000 $ 1,864,314
Marcopolo, S.A. Cl. B 2,700,000 400,021
Metalurgica Gerdau, S.A. 31,900,000 557,951
Petroleo Brasileiro, S.A. 6,666,666 569,234
(Petrobras Distributor), S.A. 19,800,000 529,657
Salegma Cl. B 249,835,663 1,285,229
Telecomunicacoes de Sao
Paulo, S.A. 17,663,355 2,598,755
Telecomunicacoes do
Parana, S.A. 1,000,000 317,918
Telecomunicacoes
Brasileiras, S.A.* 3,250,000 156,490
Usinas Siderurgicas de
Minas Gerais, S.A. (ADR)(b) 261,200 2,154,900
-----------
25,495,755
RUSSIA2.2%
RNGS Holdings, Ltd.
8.00% redeemable pfd. (c) 37,500 16,875,000
Total Preferred Stocks (cost $46,241,536) 42,370,755
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $VALUE
- ------------------------------------------------------------------------
CONVERTIBLE BONDS0.1%
COLOMBIA0.1%
Banco de Colombia
5.20%, 2/01/99 (b) $ 150 $ 114,000
5.20%, 2/01/99 1,100 836,000
Total Convertible Bonds (cost $1,287,500) 950,000
TIME DEPOSITS4.0%
Toronto-Dominion Bank 5.88% , 1/02/96 15,700 15,700,000
Wachovia Bank 5.84%, 1/02/96 15,600 15,600,000
Total Time Deposits (cost $31,300,000) 31,300,000
TOTAL INVESTMENTS-99.2%
(cost $737,451,757) 768,484,885
Other assets less liabilities-0.8% 5,892,179
NET ASSETS100% $774,377,064
* Non-income producing security.
+ Currently non-salable and accordingly has no market value.
(a) Securities or portions thereof, have been segregated to collateralize
forward exchange contracts with an aggregate market value of approximately
$84,144,243.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31, 1995,
these securities amounted to $12,980,840 or 1.7% or net assets.
(c) Valued at fair market value (see Notes A & H).
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
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $737,451,757) $768,484,885
Cash, at value (cost $245,585) 245,571
Receivable for investment securities sold 40,134,603
Dividends and interest receivable 3,276,236
Unrealized appreciation of forward exchange currency contracts 244,355
Receivable for capital stock sold 147,729
Prepaid expenses 40,385
Deferred organization expense and other assets 337,612
Total assets 812,911,376
LIABILITIES
Payable for investment securities purchased 31,856,819
Payable for capital stock redeemed 3,893,266
Advisory fee payable 668,344
Distribution fee payable 242,687
Accrued expenses 1,873,196
Total liabilities 38,534,312
NET ASSETS $774,377,064
COMPOSITION OF NET ASSETS
Cap stock, at par $ 74,060
Additional paid-in capital 746,810,176
Accumulated net investment loss (1,781,784)
Accumulated net realized loss on investments and foreign
currency transactions (2,032,675)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 31,307,287
$774,377,064
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($702,073,588/
67,073,344 shares of capital stock issued and outstanding) $10.47
Sales Charge - 4.25% of public offering price .46
Maximum offering price $10.93
CLASS B SHARES
Net asset value and offering price per share($71,612,662/
6,919,446 shares of capital stock issued and outstanding) $10.35
CLASS C SHARES
Net asset value and offering price per share($690,814/
66,776 shares of capital stock issued and outstanding) $10.35
See notes to financial statements.
14
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes witheld of $375,223) $2,763,585
Interest 517,203 $ 3,280,788
EXPENSES
Advisory fee 1,739,444
Distribution fee - Class A 405,545
Distribution fee - Class B 387,118
Distribution fee - Class C 2,704
Custodian 1,130,638
Registration 247,878
Transfer agency 124,277
Administrative 73,494
Printing 36,564
Audit and legal 34,220
Loan Commitment fees (see note E) 26,582
Amortization of organization expenses 22,270
Directors' fees 12,092
Loan agreement expense 7,417
Miscellaneous 10,852
Total expenses before interest 4,261,095
Interest expense 77,176
Total expenses 4,338,271
Net investment loss (1,057,483)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investments 2,120,003
Net realized loss on foreign currency transactions (2,436,034)
Net change in unrealized depreciation of:
Investments 32,341,471
Foreign currency denominated assets and liabilities 258,858
Net gain on investments and foreign currency transactions 32,284,298
NET INCREASE IN NET ASSETS FROM OPERATIONS $31,226,815
See notes to financial statements.
15
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31,1995 JUNE 30,
(UNAUDITED) 1995
---------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ (1,057,483) $ 77,871
Net realized loss on investments and foreign
currency transactions (316,031) (2,432,221)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 32,600,329 (708,535)
Net increase (decrease) in net assets from
operations 31,226,815 (3,062,885)
CAPITAL STOCK TRANSACTIONS
Net increase 649,918,593 68,445,326
Total increase 681,145,408 65,382,441
NET ASSETS
Beginning of period 93,231,656 27,849,215
End of period $774,377,064 $93,231,656
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 (UNAUDITED) 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 had no operations other than the sale to Alliance Capital
Management L.P. (the 'Adviser') of 10,000 shares of Class A common stock and
100 shares of Class B common stock for the aggregate amount of $101,000 on
April 6, 1994. Class A and B shares commenced operations on June 2, 1994. Class
C commenced operations on February 8, 1995. The Fund offers Class A, Class B
and Class C shares. Class A shares are sold with an initial sales charge of up
to 4.25%. Class B shares are 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 are sold
without an initial or contingent deferred sales charge. 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 and illiquid securities 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 loss on foreign currency transactions of $2,436,034 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 period 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.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with tax regulations, which may differ from generally accepted
accounting principles.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
7. CHANGES IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS
Effective June 30, 1994, the Fund adopted Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
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 Fund 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 six months ended
December 31, 1995. Pursuant to the advisory agreement, the Fund paid $73,494 to
the Adviser representing the cost of certain legal and accounting services
provided to the Fund by the Adviser for the six months ended December 31, 1995.
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 $64,949 for the six months ended December 31, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $7,224 from the sale of Class A shares and $441,203
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B for the six months ended December 31, 1995.
Brokerage commissions paid on securities transactions for the six months ended
December 31, 1995, amounted to $816,042, 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 $3,895,515 and $20,379 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 investments)
aggregated $43,859,445 and $320,206,271, respectively, for the six months ended
December 31, 1995. There were no purchases or sales of U.S. Government and
government agency obligations for the six months ended December 31, 1995. At
December 31, 1995, the cost of securities for federal income tax purposes was
$737,476,059. Accordingly, gross unrealized appreciation of investments was
$114,658,735 and gross unrealized depreciation of investments was $83,649,909,
resulting in net unrealized appreciation of $31,008,826.
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sales commitments denominated
in foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contracts is included in realized gains or
losses on foreign currency transactions. Fluctuations in the value of forward
exchange currency contracts are recorded for financial reporting purposes as
unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or securities in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from
the potential inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The face or contract amount, in U.S. dollars, as reflected in the
following table, reflects the total exposure the Fund has in that particular
currency contract.
At December 31, 1995, the Fund had outstanding forward exchange currency
contracts, as follows:
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
-------- ----------- ----------- -------------
FOREIGN CURRENCY SALE CONTRACTS
Austrian Schilling,
expiring 1/31/96 136,141 $13,540,969 $13,506,736 $ 34,233
British Pound,
expiring 1/31/96 22,783 35,541,839 35,371,537 170,302
Danish Krone,
expiring 1/31/96 24,830 4,486,012 4,473,166 12,846
Finnish Markkaa,
expiring 1/31/96 44,035 10,146,405 10,135,180 11,225
French Francs,
expiring 1/31/96 122,866 25,074,612 25,131,172 (56,560)
Irish Punt,
expiring 1/31/96 1,722 2,777,299 2,756,245 21,054
Italian Lira,
expiring 1/31/96 15,022,480 9,432,913 9,423,549 9,364
Netherlands Guilder,
expiring 1/31/96 15,061 9,413,113 9,397,454 15,659
Norwegian Krone,
expiring 1/31/96 21,183 3,355,409 3,345,468 9,941
Spanish Peseta,
expiring 1/31/96 836,616 6,879,924 6,865,018 14,906
Swedish Krona,
expiring 1/31/96 19,275 2,896,144 2,894,759 1,385
--------
$244,355
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 December 31, 1995.
The Fund is obligated to pay NationsBank a commitment fee computed at the rate
of .25 of 1% per annum on the average daily unused portion of the revolving
credit.
NOTE F: CAPITAL STOCK
There are 12,000,000,000 shares of $0.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Class D
shares. Currently only Class A, Class B and Class C shares are outstanding.
Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
----------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31,1995 JUNE 30, DECEMBER 31,1995 JUNE 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ ---------------- -------------
CLASS A
Shares sold 132,909 1,237,218 $ 5,210,565 $13,013,117
Shares issued in
connection with the
acquisition of
Global Privatization
Fund 102,861,209 -0- 1,034,044,558 -0-
Shares redeemed (37,250,270) (419,714) (380,684,044) (4,175,651)
Net increase 65,743,848 817,504 $ 658,571,079 $ 8,837,466
CLASS B
Shares sold 429,855 6,976,991 $ 4,447,194 $73,736,087
Shares redeemed (1,366,839) (1,467,380) (13,452,367) (14,453,504)
Net increase(decrease) (936,984) 5,509,611 $ (9,005,173) $59,282,583
SHARES AMOUNT
---------------------------- -----------------------------
SIX MONTHS ENDED FEB. 8, SIX MONTHS ENDED FEB. 8,
DEC. 31,1995 1995* TO DEC. 31,1995 1995* TO
(UNAUDITED) JUNE 30,1995 (UNAUDITED) JUNE 30,1995
------------ ------------ ---------------- ------------
CLASS C
Shares sold 43,456 33,457 $451,003 $325,277
Shares redeemed (10,137) -0- (98,316) -0-
Net increase 33,319 33,457 $352,687 $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 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
DATE
SECURITY ACQUIRED U.S. $ COST
- -------------------------------- ----------------- -----------
Austelko Holdings 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
GBM Atlantios, S.A. 3/23/94-11/9/94 1,687,400
Efes Sinai Yatrim 7/12/94 1,000,000
Intereuropa Bank 4/13/94 2,007,288
Near East International 9/29/95 1,000,000
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
Televisao Idependiente 6/24/94-1/18/95 4,577,775
The securities shown are illiquid and have been valued at fair value in
accordance with procedures described in Note A. The value of these securities
at December 31, 1995 was $31,539,636 representing 4.1% 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 $26,068,831) respectively. Immediately after the
acquisition the combined net assets of the Fund amounted to $1,143,938,565.
21
FINANCIAL HIGHLIGHTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS A
----------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 2,
DECEMBER 31,1995 JUNE 30, 1994* TO
(UNAUDITED) 1995 JUNE 30,1994
------------ --------- ------------
Net asset value, beginning of period $10.18 $ 9.75 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.02)(c) .06 .01
Net realized and unrealized gain (loss) on
investments .31 .37 (.26)
Net increase (decrease) in net asset value
from operations .29 .43 (.25)
Net asset value, end of period $10.47 $10.18 $ 9.75
TOTAL RETURN
Total investment return based on net asset
value (a) 2.85% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $702,074 $13,535 $4,990
Ratio of expenses to average net assets 2.28%(b) 2.56% 2.75%(b)
Ratio of expenses to average net assets
excluding interest expense (see Note E) 2.23%(b) -0- -0-
Ratio of net investment income (loss) to
average net assets (.41)%(b) .66% 103%(b)
Portfolio turnover rate 22% 36% -0-%
See footnote summary on page 24.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
A CLASS B
----------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 2,
DECEMBER 31,1995 JUNE 30, 1994* TO
(UNAUDITED) 1995 JUNE 30,1994
------------ --------- ------------
Net asset value, beginning of period $10.10 $ 9.74 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.07)(c) .02 -0-
Net realized and unrealized gain (loss)
on investments .32 .34 (.26)
Net increase (decrease) in net asset value
from operations .25 .36 (.26)
Net asset value, end of period $10.35 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on net asset
value (a) 2.48% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $71,613 $79,359 $22,859
Ratio of expenses to average net assets 3.28%(b) 3.27% 3.45%(b)
Ratio of expenses to average net assets
excluding interest expense (see Note E) 3.27%(b) -0- -0-
Ratio of net investment income (loss) to
average net assets (1.30)%(b) .01% .33%(b)
Portfolio turnover rate 22% 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 THE PERIOD
CLASS C
-----------------------------
SIX MONTHS ENDED FEBRUARY 8,
DECEMBER 31,1995 1995** TO
(UNAUDITED) JUNE 30,1995
------------- ------------
Net asset value, beginning of period $10.10 $ 9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.07)(c) .05
Net realized and unrealized gain on investments .32 .52
Net increase in net asset value from operations .25 .57
Net asset value, end of period $10.35 $10.10
TOTAL RETURN
Total investment return based on net asset value (a) 2.48% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 691 $ 338
Ratio of expenses to average net assets 3.25%(b) 1.03%(b)
Ratio of expenses to average net assets excluding
interest expense (see Note E) 3.23%(b) -0-
Ratio of net investment income (loss) to average
net assets (1.27)%(b) 1.04%(b)
Portfolio turnover rate 22% 36%
* Commencement of operations.
** Commencement of distributions.
(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.
(e) Based on average shares outstanding.
24
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
A. RAMA KRISHNA, 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
PATRICK J. FARRELL, 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.
25
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Mortgage Securities Income Fund
Alliance Mortgage Strategy Trust
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
GROWTH
The Alliance Fund
Alliance Counterpoint 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
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
26
ALLIANCE WORLDWIDE PRIVATIZATION FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
WWPSR
