ALLIANCE WORLDWIDE PRIVATIZATION FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
January 10, 1997
Dear Shareholder:
Alliance Worldwide Privatization Fund enjoyed a year which proved to be
excellent for equity markets (with the exception of Japan and, to a lesser
extent, Switzerland) and for privatization investors in particular. Growing
investor confidence in the prospects for recovery in Europe, lower interest
rates, a revival of confidence in Eastern Europe, the re-election of Boris
Yeltsin in Russia, and the continued strong performance of the U.S. has led to
savers committing a greater proportion of their assets to equities. This, in
turn, has generated greater enthusiasm for privatized initial public offerings
(IPOs).
As yet, there is little sign of any revival of inflation. Provided that cost
pressures remain subdued, we look forward to further progress in equity prices
during 1997.
INVESTMENT RESULTS
As you can see below, the Fund outperformed its benchmark indices for both the
6- and 12-month periods ended December 31, 1996.
TOTAL RETURN FOR THE PERIODS ENDED
DECEMBER 31, 1996
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A 6.20% 23.14%
Class B 5.84 22.31
Class C 5.93 22.41
MSCI EAFE INDEX 1.62 6.36
MSCI EMERGING MARKETS FREE INDEX -4.19 6.03
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF
12/31/96. THE TOTAL RETURN FOR ADVISOR CLASS SHARES FROM INCEPTION (OCTOBER 2,
1996) THROUGH DECEMBER 31, 1996 WAS 6.21%. 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 (MSCI) EUROPE, AUSTRALIA,
AND FAR EAST (EAFE) INDEX TRACKS THE PERFORMANCE OF MARKETS IN THOSE REGIONS.
THE MSCI EMERGING MARKETS FREE INDEX TRACKS THE PERFORMANCE OF 19 EMERGING
MARKETS. FOR ADDITIONAL PERFORMANCE INFORMATION, PLEASE SEE PAGE 3.
MARKET ENVIRONMENT
The past year proved to be highly successful for privatization programs
worldwide. For the fiscal year, we estimate that around $90 billion was raised
from the markets in privatization transactions, a record amount following the
$73 billion raised in 1995 and $64 billion in 1994.
The majority of transactions continues to emanate from Western Europe, which
again provided more than 50% of the total monetary volume of privatized initial
public offerings. Deal volume rose significantly in Latin America after a dull
year in 1995 and remained strong in Eastern Europe and Russia. Privatization
activity was slow only in Asia, reflecting the loss of enthusiasm for these
markets by global investors and deregulation delays by some governments.
The telecommunications industry remained the dominant industrial sector for
privatization, led by the massive privatization of Deutsche Telekom. We hope
this will prove the start of a substantial increase in the number of
transactions coming out of Germany. There was a noticeable broadening of the
industry base for privatization IPOs. Railways, energy and pharmaceuticals
played an increasingly important part in the overall spread of industry
representation.
At the same time, the successful implementation of major privatization programs
in emerging markets such as Egypt and Croatia have provided tremendous returns
for investors and led to a structural shift in the way these economies operate.
Looking forward, we anticipate a strong flow of new transactions in 1997, with
European issues continuing to dominate privatizations. However, we anticipate a
continued widening of both country and industry representation.
GEOGRAPHIC DIVERSIFICATION OF PORTFOLIO HOLDINGS
We continue to maintain a well-diversified portfolio, with holdings issued in
51 different countries, representing a broad range of industry subsets. The
chart below reflects holdings as of December 31, 1996, based on market value.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NORTH AMERICA 10.4%
AUSTRALIA/NEW ZEALAND 4.4%
SOUTH AMERICA 12.6%
MIDDLE EAST/AFRICA 4.3%
ASIA 13.7%
RUSSIA/EASTERN EUROPE 10.6%
WESTERN EUROPE 44.0%
CURRENT OUTLOOK
We are confident that privatizations will continue to offer one of the most
attractive ways to gain exposure to global investment opportunities and the
themes of deregulation and restructuring.
As always, we appreciate the confidence you have placed in Alliance Capital. We
look forward to building further on our 1996 results and reporting to you in
the coming periods.
Sincerely,
John D. CarifaChairman and President
Mark H. BreedonSenior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
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 DECEMBER 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 23.14% 17.95%
. Since Inception* 10.35% 8.52%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 22.31% 18.31%
. Since Inception* 9.57% 8.90%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 22.41% 21.41%
. Since Inception* 16.16% 16.16%
Average annual total returns reflect reinvestment 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 an applicable contingent
deferred sales charge for Class A (1%-Year 1 for purchases exceeding
$1,000,000); Class B (4%-Year 1; 3%-Year 2; 2%-Year 3; 1%-Year 4); Class C
(1%-Year 1). Total return for Advisor Class shares will differ from the results
shown above because of different expenses associated with that class. 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
TEN LARGEST HOLDINGS
DECEMBER 31, 1996 (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 $ 19,812,500 3.2%
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 13,507,325 2.2
National Grid Holdings Plc.--Operates the electric
transmission system in England and Wales and
provides related services to Scotland and France 13,362,180 2.1
British Energy Plc.--generates and sells
electricity in England and Scotland 12,505,630 2.0
Korea Mobile Telecom Corp.--Provider of mobile
communications and radio paging services in Korea 11,265,305 1.8
Commonwealth Serum Lab., Ltd.--Develops,
manufactures, and markets human and veterinary
pharmaceutical and diagnostic products 10,970,317 1.8
Akzo Nobel N.V.--Produces chemicals, paints,
drugs, veterinary products, hospital supplies
and diagnostics 10,921,821 1.8
Deutsche Lufthansa A.G.--Operates international
airline services and various related services 10,917,598 1.7
Deutsche Telekom A.G.--Provides local and
long-distance telephone services as well as
voice, data, and image transmission 10,136,724 1.6
Light Servicios de Electricidade, S.A. (ADR).--
Supplies electric power, transmission and
distribution within the state of Rio de Janeiro 9,945,000 1.6
$123,344,400 19.8%
4
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------
Basic Industries $ 57,921,031 9.3%
Capital Goods 15,680,771 2.5
Consumer Manufacturing 18,710,383 3.0
Consumer Services 44,050,473 7.1
Consumer Staples 16,169,549 2.6
Energy 57,810,839 9.3
Finance 74,131,191 11.9
Healthcare 32,979,388 5.3
Multi-Industry 14,200,807 2.3
Technology 14,864,281 2.4
Transportation 26,136,070 4.2
Utilities 223,657,566 36.0
Total Investments 596,312,349 95.9
Cash and receivables 25,335,746 4.1
Net Assets $621,648,095 100.0%
5
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-90.9%
ARGENTINA-0.6%
Central Costanera, S.A. Cl. B 383,815 $ 1,174,691
Dragados y Construcciones Argentina Cl. B 363,499 1,345,195
Metrogas, S.A. (ADR) 163,300 1,530,938
------------
4,050,824
AUSTRALIA-3.1%
Commonwealth Serum Lab., Ltd. 2,319,621 10,970,317
Qantas Airways, Ltd. 2,015,301 3,363,910
Tab Corp Holdings, Ltd. 1,000,000 4,769,100
------------
19,103,327
AUSTRIA-4.0%
Austria Mikro Systeme International AG (a) 68,374 5,279,232
Boehler-Uddeholm AG 40,000 2,863,091
Creditanstalt Bankverein AG (a) 40,000 2,707,930
Flughafen Wien AG (a) 100,000 5,098,149
VA Technologies AG 40,000 6,278,482
Voest-Alpine Stahl AG 80,000 2,846,097
------------
25,072,981
BELGIUM-0.4%
Credit Communal Holding Dexia (b) 29,100 2,657,422
BERMUDA-0.4%
Central European Media Enterprises,
Ltd. Cl. A (b) 75,000 2,381,250
BOTSWANA-0.6%
Sechaba Investment Trust, Ltd. 5,227,000 3,439,784
BRAZIL-5.1%
Compania Paulista de
Forca e Luz (b) 53,278,000 6,306,606
Rights (b) 309,598 -0-
Compania Siderurgica Nacional (b) 58,000,000 1,646,617
Light Particpacoes, S.A. (b) 26,750,000 6,487,345
Light Servicios de Electricidade,
S.A. (ADR) 130,000 9,945,000
Siderurgica Riograndense, S.A. 174,587,490 2,923,513
Telecomunicacoes de Sao Paulo, S.A. 14,450,473 3,123,588
Telecomunicacoes Brasileiras, S.A. 17,500,000 1,254,692
------------
31,687,361
CANADA-3.4%
Alberta Energy Co., Ltd. 200,000 4,776,337
Canadian National Railway Co. 250,000 9,500,000
Petro-Canada 500,000 7,065,912
------------
21,342,249
CHILE-0.4%
Compania Cervecerias Unidas, S.A. (ADR) 57,000 919,125
Enersis, S.A. (ADR) 50,000 1,387,500
------------
2,306,625
COLOMBIA-0.2%
Banco de Colombia (GDR) 125,000 984,375
CZECH REPUBLIC-1.5%
Ceske Energeticke Zavody (GDS) (b)(c) 44,000 1,584,000
Ceske Radiokomunikace A.S. (b) 20,000 2,802,515
Komercni Banka A.S. (GDR) 67,500 1,829,250
6
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
PVT 13,000 $ 2,246,571
Tabak A.S. 4,525 1,139,694
------------
9,602,030
DENMARK-0.5%
Copenhagen Airport (a) 32,500 3,312,347
EGYPT-1.7%
Commercial International Bank
Ordinary 6,666 1,005,922
(GDR) 129,000 1,818,900
Egypt America (b) 18,946 843,186
Housing Development Bank 42,000 699,402
Madinet Nasar City 40,500 4,571,753
Torrah Portland Cement 69,500 1,403,151
------------
10,342,314
FINLAND-1.4%
OY Tamro AB (a) 330,000 2,196,571
Unitas Bank, Ltd. Cl. A (a)(b) 1,000,000 3,110,613
Valmet OY 200,000 3,497,808
------------
8,804,992
FRANCE-3.9%
Assurances Generales de France (a) 78,750 2,542,281
Renault, S.A. (a) 120,000 2,578,780
Seita 72,930 3,050,171
Societe National Elf Aquitaine (a) 80,000 7,282,259
Usinor Sacilor 600,000 8,730,847
------------
24,184,338
GERMANY-4.7%
Bankgesellschaft Berlin A.G. 53,000 964,388
Deutsche Lufthansa A.G. 800,000 10,917,598
Deutsche Telekom A.G. (a)(b) 480,690 10,136,724
Viag A.G. (a) 14,000 5,495,191
New 4,785 1,819,096
------------
29,332,997
GHANA-0.6%
Ashanti Goldfields Co., Ltd. (GDR) 300,000 3,712,500
GREECE-1.0%
Hellenic Sugar 250,000 2,339,158
Hellenic Tellecommunication
Organization, S.A. 200,000 3,444,385
------------
5,783,543
HONG KONG-0.3%
The Guangshen Railway Co., Ltd. (ADR) (b) 76,000 1,567,500
HUNGARY-2.0%
Magyar Olaj-es Gazipare Reszvenytar 260,000 3,247,990
OTP Bank (GDR) 150,000 2,711,250
Tiszai Vegyi Kombinat (GDR) (b) 379,000 4,339,550
Zalakeramia 55,000 2,158,863
------------
12,457,653
INDIA-1.0%
Industrial Credit & Investment Corporation
of India, Ltd. (GDR) (b)(c) 154,000 1,501,500
State Bank of India (GDR) (b)(c) 125,000 2,171,250
Steel Authority of India, Ltd. (GDR) 285,000 2,700,375
------------
6,373,125
INDONESIA-2.3%
PT Indosat 3,137,000 8,632,726
PT Tambang Timah (GDR) 46,000 831,450
PT Telekomunikasi Indonesia
(ADR) 99,000 3,415,500
Cl. B. 913,000 1,575,138
------------
14,454,814
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
IRELAND-1.2%
Greencore Group Plc. 600,000 $ 3,844,900
Irish Life Plc. (a) 821,344 3,808,241
------------
7,653,141
ISRAEL-0.7%
Bank Hapoalim, Ltd. 1,073,300 1,701,041
Tadiran, Ltd. (ADR) 92,500 2,601,562
------------
4,302,603
ITALY-3.5%
Ente Nazionale Idrocarburi S.p.A 1,000,000 5,132,272
Instituto Mobilaire Italiano S.p.A. (a) 500,000 4,285,134
Instituto Nazionale delle Azzicurazioni (a) 3,000,000 3,908,042
Telecom Italia Mobile S.p.A. 3,305,000 4,717,158
Telecom Italia S.p.A. Di Risp (a) 1,800,000 3,512,491
------------
21,555,097
JAPAN-1.8%
DDI Corp. 1,085 7,176,496
East Japan Railway Co. 387 1,741,015
Japan Tobacco, Inc. 298 2,019,946
------------
10,937,457
JORDAN-0.3%
Arab Potash Co. 217,433 1,746,204
KENYA-0.1%
Kenya Airways 4,650,000 689,359
MALAYSIA-0.2%
Petronas Gas Berhad 343,000 1,426,054
MEXICO-2.0%
Alfa, S.A. 836,200 3,898,443
Banpais, S.A. (ADR) (b)(d)(e) 96,000 -0-
GBM Atlantico, S.A. (ADR) (b)(c)(d) 78,000 234,000
Grupo Financiero Bancomer,
S.A. de C.V. Cl. B (b) 7,569,000 3,028,754
Cl. L (b) 49,796 16,763
Grupo Financiero Bancrecer,
S.A. de C.V. Cl. B (b) 3,953,843 753,400
Grupo Financiero Banorte,
S.A. de C.V. Cl. B (b) 3,499,677 3,467,668
Grupo Financiero Probursa,
S.A.de C.V. Cl. B (b) 12,771,846 648,976
Grupo Profesional Planeacion Y Proyectos,
S.A. Cl. B 129,000 557,165
------------
12,605,169
NETHERLANDS-3.9%
Akzo Nobel N.V. 80,000 10,921,821
European Vinyls Corp. International N.V. (a) 104,000 3,296,909
KLM Royal Dutch Air Lines N.V. (a) 160,714 4,518,383
Koninklijke PTT Nederland N.V. (a) 150,000 5,718,337
------------
24,455,450
NEW ZEALAND-1.1%
Telecom Corp. of New Zealand, Ltd. 500,000 2,552,089
Tranz Rail Holdings, Ltd. (b) 614,200 3,734,195
Trustpower, Ltd. 508,700 899,064
------------
7,185,348
NORWAY-1.7%
Christiana Bank OG Kreditkasse 1,000,000 3,172,486
Den Norske Bank 800,000 3,078,254
Norsk Hydro ASA (a) 80,000 4,347,248
------------
10,597,988
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
PAKISTAN-0.7%
Hub Power Co., Ltd. (GDR) (b) 100,000 $ 2,012,500
Pakistan Telecom
Ordinary (b) 5,521 344,545
(GDR) (b) 28,813 1,786,406
------------
4,143,451
PERU-1.6%
Cementos Lima, S.A. 9,380 137,207
Cementos Norte Pacasmayo
C Shares 1,277,241 1,716,682
T Shares 593,956 836,974
CPT Telefonica del Peru, S.A. 1,161,065 2,160,741
Explosivos, S.A. Cl. C (b) 801,705 838,083
Ontario-Quinta A.V.V. (d) 2,000,000 2,000,000
Telefonica del Peru, S.A. (ADR) 105,400 1,989,425
------------
9,679,112
PHILIPPINES-2.2%
First Philippine Holdings Corp.
Series B 2,197,116 5,012,432
International Container
Terminal Services, Inc. (b) 4,672,875 2,443,043
Manila Electric Co.
Series B 722,543 5,906,720
Philippine National Bank (b) 32,563 386,918
------------
13,749,113
POLAND-1.0%
Bank Przemyslowo Handlowy 20,000 1,290,368
Elektrim, S.A. 262,000 2,375,671
Wielkopolski Bank Kredytowy, S.A. 400,000 2,706,284
------------
6,372,323
PORTUGAL-0.8%
Portugal Telecom, S.A. 100,000 2,851,552
Televisao Independiente (b)(d) 676,000 2,006,151
------------
4,857,703
ROMANIA-0.0%
Societatea R (d) 30,454 297,920
RUSSIA-1.4%
Gazprom (ADR) (b)(c) 181,500 3,221,625
Nearmedic Austrian Certs (b)(d) 23,452 3,357,261
Sun Brewing (GDR) (b)(c) 264,000 2,343,000
------------
8,921,886
SLOVAK REPUBLIC-0.0%
Nafta Gbely, S.A. 5,514 275,334
SOUTH AFRICA-0.3%
South African Iron & Steel 2,500,000 1,784,760
SOUTH KOREA-3.5%
Korea Electric Power Corp. 85,390 2,485,910
(ADR) 138,600 2,841,300
Korea Mobile Telecom Corp. 11,284 11,265,305
(ADR) 335,780 4,323,168
Korean Air Lines 28,730 442,000
Pohang Iron & Steel Co. 7,280 418,234
------------
21,775,917
SPAIN-3.4%
Argentaria Bancaria de Espana 80,000 3,582,866
Empresa Nacional de Celulosas, S.A. (a) 200,000 2,397,314
Endesa 70,000 4,985,796
Gas Natural SDG, S.A. (a) 18,300 4,260,127
Repsol, S.A. 150,000 5,758,178
------------
20,984,281
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SWEDEN-0.6%
Sparbanken Sverige AB, Cl. A (c) 200,000 $ 3,431,491
THAILAND-1.2%
Electricity Generating Public of Thailand 594,000 1,621,305
The Industrial Finance Corp. of Thailand 2,068,800 5,606,395
------------
7,227,700
TRINIDAD & TOBAGO-0.5%
B.W.I.A. International Airways (b)(d) 2,727,272 2,999,999
TURKEY-1.5%
Efes Sinai Yatrim
Ordinary (b)(d) 13,438,261 642,064
Receipts (b)(d) 17,314,682 827,275
Eregli Demir Ve Celik Fabrikalari T.A.S. 20,116,750 2,411,413
Petrokimya Holding A.S. 1,907,000 764,910
Tupras Turkiye Petrol Rafinerileri A.S. (b) 5,595,000 1,392,946
Turk Hava Yollari A.O. (b) 6,847,275 1,515,303
Usas Ucak Servisi A.S. 857,250 1,739,004
------------
9,292,915
UNITED KINGDOM-12.0%
Anglian Water Plc. (a) 800,000 8,058,422
British Energy Plc. Partially paid (a) 5,000,000 12,505,630
East Midland Electric Plc. 197,120 2,235,483
National Grid Holdings Plc. 4,000,000 13,362,180
National Power Plc. 660,000 5,517,552
Northern Ireland Electricity Plc. 700,000 4,532,863
Powergen Plc. 773,522 7,579,689
RJB Mining (a) 300,000 2,184,203
Scottish Hydro Electric 600,000 3,361,102
Stagecoach Holdings Plc. 800,000 9,593,360
Wessex Water Plc. 903,806 5,759,713
------------
74,690,197
UNITED STATES-3.7%
Austelko Holdings Series A (b)(d) 260 1,934,400
Near East International (b)(d) 10 1,000,000
Pharmacia & Upjohn, Inc. 500,000 19,812,500
------------
22,746,900
VENEZUELA-0.9%
Compania Anonima Nacional Telefonos
de Venezuela (ADR) (b) 199,700 5,616,563
Total Common Stocks
(cost $493,061,326) 564,955,786
PREFERRED STOCKS-5.0%
BRAZIL-2.8%
Bardella Industrias Mecanicas, S.A. 20,786 1,980,181
Centrais Electricas de
Santa Catarina, S.A. (b) 4,182,133 3,904,022
(GDR) (b) 13,000 1,189,500
Centrais Electricas de Goias (b) 5,877,000 322,440
Compania Vale Do Rio Doce PN 4,000 76,990
Industrias Verlome Ishibras (b)(d)(e) 8,250,000 -0-
Industrias Villares, S.A. 1,800,000 814,166
Iven, S.A. (b) 8,614,000 4,136,643
Metalurgica Gerdau, S.A. 86,897,892 1,965,259
Telecomunicacoes de Sao Paulo, S.A. 6,190,355 1,340,419
Telecomunicacoes do Rio de Janeiro,
S.A. (b) 5,535,000 700,411
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Telecomunicacoes Brasileiras, S.A. 3,250,000 $ 250,217
Trikem, S.A. 357,264,050 1,168,990
-------------
17,849,238
RUSSIA-2.2%
RNGS Holdings, Ltd.
8%, redeemable pfd. (d) 37,500 13,507,325
Total Preferred Stocks
(cost $30,803,229) 31,356,563
TOTAL INVESTMENTS-95.9%
(cost $523,864,555) $596,312,349
Other assets less liabilities-4.1% 25,335,746
NET ASSETS-100% $621,648,095
(a) Securities or portion thereof, have been segregated to collateralize
forward exchange currency contracts with aggregate market value of
approximately $112,540,558.
(b) Non-income producing security.
(c) 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, 1996
these securities amounted to $14,486,866 or 2.33% of net assets.
(d) Illiquid security--valued at fair market value. (see Notes A & H)
(e) 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.
11
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $523,864,555) $596,312,349
Cash, at value (cost $23,086,722) 23,379,876
Receivable for investment securities sold 18,070,311
Dividends receivable 1,497,856
Receivable for capital stock sold 865,917
Deferred organization expense 106,959
Foreign taxes receivable and other assets 1,174,739
Total assets 641,408,007
LIABILITIES
Loan payable 15,000,000
Unrealized depreciation of forward exchange currency contracts 1,365,011
Payable for capital stock redeemed 1,216,927
Advisory fee payable 539,185
Distribution fee payable 214,899
Payable for investment securities purchased 140,640
Accrued commitment fees 41,194
Accrued expenses 1,242,056
Total liabilities 19,759,912
NET ASSETS $621,648,095
COMPOSITION OF NET ASSETS
Capital stock, at par $ 55,331
Additional paid-in capital 526,257,280
Undistributed net investment income 5,756,233
Accumulated net realized gain on investments and foreign
currency transactions 18,106,501
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities. 71,472,750
$621,648,095
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($529,414,635/
47,022,799 shares of capital stock issued and outstanding) $11.26
Sales charge4.25% of public offering price .50
Maximum offering price $11.76
CLASS B SHARES
Net asset value and offering price per share ($88,035,035/
7,930,175 shares of capital stock issued and outstanding) $11.10
CLASS C SHARES
Net asset value and offering price per share ($4,052,628/
364,934 shares of capital stock issued and outstanding) $11.11
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share($145,797
/12,999 shares of capital stock issued and outstanding) $11.22
See notes to financial statements.
12
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $1,088,718) $9,034,481
Interest 311,301 $9,345,782
EXPENSES
Advisory fee 3,483,648
Distribution fee - Class A 914,528
Distribution fee - Class B 418,570
Distribution fee - Class C 16,488
Custodian 774,358
Transfer agency 667,429
Printing 113,006
Audit and legal 90,346
Registration 76,730
Administrative 75,000
Amortization of organization expenses 22,270
Loan commitment fees (see note E) 19,967
Loan agreement expense 15,935
Directors' fees 13,455
Miscellaneous 38,100
Total expenses before interest 6,739,830
Interest expense 76,135
Total expenses 6,815,965
Net investment income 2,529,817
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments 63,216,981
Net realized loss on foreign currency transactions (488,793)
Net change in unrealized appreciation of:
Investments (27,998,194)
Foreign currency denominated assets and liabilities (338,053)
Net gain on investments and foreign currency transactions 34,391,941
NET INCREASE IN NET ASSETS FROM OPERATIONS $36,921,758
See notes to financial statements.
13
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 2,529,817 $ 4,399,665
Net realized gain on investments and foreign
currency transactions 62,728,188 37,218,701
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (28,336,247) 101,102,039
Net increase in net assets from operations 36,921,758 142,720,405
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (6,643,203) -0-
Class B (562,618) -0-
Class C (25,237) -0-
Advisor Class (2,150) -0-
Net realized gain on investments
Class A (62,888,986) -0-
Class B (9,986,471) -0-
Class C (447,961) -0-
Advisor Class (16,066) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (92,866,709) 522,213,677
Total increase (decrease) (136,517,643) 664,934,082
NET ASSETS
Beginning of period 758,165,738 93,231,656
End of period (including undistributed net
investment income of $5,756,233) $ 621,648,095 $758,165,738
See notes to financial statements.
14
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INCREASE (DECREASE) IN CASH FROM:
OPERATING ACTIVITIES:
Interest and dividends received $13,297,218
Interest expense paid (39,559)
Operating expense paid (6,545,421)
Net increase in cash from operating activities $ 6,712,238
INVESTING ACTIVITIES:
Proceeds from disposition of short-term
portfolio investments, net 29,400,000
Purchases of long-term portfolio investments (161,501,644)
Proceeds from disposition of long-term
portfolio investments 308,797,559
Net increase in cash from investing activities 176,695,915
FINANCING ACTIVITIES*:
Redemptions of capital stock, net (93,394,924)
Cash dividends paid (80,572,692)
Net decrease in cash from financing activities (173,967,616)
Effect of exchange rate on cash 11,627,294
Net increase in cash 21,067,831
Cash at beginning of period 2,312,045
Cash at end of period $ 23,379,876
RECONCILIATION OF NET INCREASE IN NET ASSETS
FROM OPERATIONS TO NET INCREASE IN CASH FROM
OPERATING ACTIVITIES:
Net increase in net assets from operations $ 36,921,758
ADJUSTMENTS:
Decrease in interest and dividends receivable $ 3,951,436
Net realized gain on securities (63,216,981)
Net change in unrealized appreciation 28,336,247
Increase in accrued expenses and other
liabilities 230,985
Net realized loss on foreign currency
transactions 488,793
(30,209,520)
Net increase in cash from operating activities $ 6,712,238
* Non-cash financing activities not included herein consist of reinvestment
of dividends.
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Worldwide Privatization Fund (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. On April
15, 1996, the Board of Directors approved the creation of the fourth class of
shares, Advisor Class shares. The Fund offers Class A, Class B, Class C and
Advisor Class 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% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase will be subject to a contingent deferred
sales charge of 1%. Class B shares are currently sold with a contingent
deferred sales charge which declines from 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 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.
Advisor Class shares are sold without an initial or contingent deferred sales
charge. Advisor Class shares are offered solely to investors participating in
fee based programs. All four classes 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 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.
16
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
5. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes 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 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.
Pursuant to the advisory agreement, the Fund paid $75,000 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, 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 $292,070 for the six months ended December 31, 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 $10,902 from the sale of Class A shares and
$146,371 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B shares for the six months ended December 31, 1996.
Brokerage commissions paid on securities transactions for the six months ended
December 31, 1996, amounted to $938,947, 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. There is no distribution fee on the Advisor Class 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
$4,268,780 and $116,927 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.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. Government securities) aggregated $152,631,246 and $312,930,456,
respectively, for the six months ended December 31, 1996. There were no
purchases or sales of U.S. Government or government agency obligations for the
six months ended December 31, 1996. At December 31, 1996, the cost of
securities for federal income tax purposes was $524,291,295. Accordingly, gross
unrealized appreciation of investments was $122,092,933 and gross unrealized
depreciation of investments was $50,071,879, resulting in net unrealized
appreciation of $72,021,054 excluding foreign currency.
At June 30, 1996, the Fund had $809,172 of The Global Privatization Fund's
(which was acquired in 1995; see Note I) capital loss carryforward 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.
FORWARD EXCHANGE CURRENCY CONTRACTS
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 liquid assets 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, 1996, the fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE DEPRECIATION
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
Austrian Schilling, expiring 1/31/97 136,141 $12,435,230 $12,595,087 $ (159,857)
British Pounds, expiring 1/31/97 13,240 22,266,769 22,668,240 (401,471)
Danish Krone, expiring 1/31/97 9,264 1,557,053 1,576,030 (18,977)
Deutsche Marks, expiring 1/31/97 22,316 14,382,250 14,529,305 (147,055)
Finnish Markka, expiring 1/31/97 18,576 4,000,000 4,048,733 (48,733)
French Francs, expiring 1/31/97 62,958 12,000,000 12,154,891 (154,891)
Irish Punt, expiring 1/31/97 1,722 2,872,890 2,919,346 (46,456)
Italian Lira, expiring 1/31/97 15,022,480 9,786,632 9,887,977 (101,345)
Netherlands Guilder, expiring 1/31/97 21,604 12,380,424 12,521,328 (140,904)
Norwegian Krone, expiring 1/31/97 21,183 3,276,520 3,331,650 (55,130)
Spanish Peseta, expiring 1/31/97 836,616 6,366,553 6,444,117 (77,564)
Swedish Krona, expiring 1/31/97 19,275 2,817,406 2,830,034 (12,628)
$(1,365,011)
</TABLE>
18
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE E: BANK BORROWING
The Fund's Revolving Credit Agreement with NationsBank expired on October 26,
1996. The Fund entered into a new credit agreement on October 25, 1996 with the
Bank of New York. The maximum credit available is $20,000,000 and requires no
collateralization. The loan outstanding, under the renewed Credit Agreement at
December 31, 1996 was $15,000,000 with a related weighted average interest rate
of 6.64%.
The weighted average amount of bank loans outstanding for the six months ended
December 31, 1996, amounted to approximately $15,838,709 at a weighted average
interest rate of 5.58%.
The Fund is obligated to pay Bank of New York 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 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 Advisor
Class.
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
DEC. 31, 1996 JUNE 30, DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
Shares sold 7,352,208 1,832,982 $ 87,742,883 $ 29,432,663
Shares issued in
reinvestment of
dividends and
distributions 2,573,137 -0- 27,867,077 -0-
Shares issued in
connection with
the acquisition
of Global
Privatization Fund -0- 102,861,209 -0- 1,034,044,558
Shares converted
from Class B 19,026 17,485 226,346 204,175
Shares redeemed (18,368,252) (50,594,492) (221,544,478) (534,852,442)
Net increase
(decrease) (8,423,881) 54,117,184 $(105,708,172) $ 528,828,954
CLASS B
Shares sold 1,420,891 1,323,183 $ 16,306,099 $ 15,468,400
Shares issued in
reinvestment of
dividends and
distributions 361,705 -0- 3,863,013 -0-
Shares converted
to Class A (19,330) (17,389) (226,346) (204,175)
Shares redeemed (777,154) (2,218,161) (9,178,001) (23,735,902)
Net increase(decrease) 986,112 (912,367) $ 10,764,765 $ (8,471,677)
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30, DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 191,768 195,418 $ 2,266,823 $ 2,183,955
Shares issued in
reinvestment of
dividends and
distributions 33,043 -0- 353,234 -0-
Shares redeemed (59,159) (29,593) (702,078) (327,555)
Net increase 165,652 165,825 $ 1,917,979 $ 1,856,400
OCT. 2,1996* OCT. 2, 1996*
TO TO
DEC. 31,1996 DEC. 31, 1996
(UNAUDITED) (UNAUDITED)
------------ --------------
ADVISOR CLASS
Shares sold 11,343 $ 140,850
Shares issued in
reinvestment of
dividends and
distributions 1,656 17,869
Net increase 12,999 $ 158,719
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.
* Commencement of distribution.
20
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE H: ILLIQUID SECURITIES
SECURITY DATE ACQUIRED U.S. $ COST
- -------- ----------------- ------------
Austelko Holdings Series A 11/22/95 $ 1,934,400
Banpais S.A. ADR 6/30/94-9/19/94 926,975
B.W.I.A. International Airways 2/21/95 2,999,999
Efes Sinai Yatrim 7/12/94 1,816,057
GBM Atlantico, S.A. ADR 3/23/94-11/9/94 1,687,400
Industrias Verlome Ishibras 11/11/94 64,772
Near East International 9/29/95 1,000,000
Nearmedic, Ltd 3/18/96-4/30/96 1,285,000
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 have been valued at fair value in accordance with
procedures described in Note A. The aggregate amount of securities valued at
fair values on December 31, 1996 was $28,806,395 representing 4.6% 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
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30, JUNE 2,1994(a)
1996 ------------------------ TO
(UNAUDITED) 1996 1995 JUNE 30,1994
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.13 $10.18 $ 9.75 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .05(b) .10(b) .06 .01
Net realized and unrealized gain (loss)
on investments .65 1.85 .37 (.26)
Net increase (decrease) in net asset
value from operations .70 1.95 .43 (.25)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.15) -0- -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.42) -0- -0- -0-
Total dividends and distributions (1.57) .00 .00 .00
Net asset value, end of period $11.26 $12.13 $10.18 $ 9.75
TOTAL RETURN
Total investment return based on
net asset value (c) 6.20% 19.16% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $529,415 $672,732 $13,535 $4,990
Ratio of expenses to average net assets 1.87%(d) 1.87% 2.56% 2.75%(d)
Ratio of expenses to average net assets
excluding interest expense (e) 1.85%(d) 1.85% 2.56% 2.75%(d)
Ratio of net investment income (loss)
to average net assets .83%(d) .95% .66% 1.03%(d)
Portfolio turnover rate 46% 28% 36% -0-%
Average commission rate paid (f) $.0126 -- -- --
</TABLE>
See footnote summary on page 25.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30, JUNE 2,1994(a)
1996 ------------------------ TO
(UNAUDITED) 1996 1995 JUNE 30,1994
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.96 $10.10 $ 9.74 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) -0-(b) (.02)(b) .02 -0-
Net realized and unrealized gain (loss)
on investments .64 1.88 .34 (.26)
Net increase (decrease) in net asset
value from operations .64 1.86 .36 (.26)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.08) -0- -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.42) -0- -0- -0-
Total dividends and distributions (1.50) -0- -0- -0-
Net asset value, end of period $11.10 $11.96 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on net
asset value (c) 5.84% 18.42% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $88,035 $83,050 $79,359 $22,859
Ratio of expenses to average net assets 2.57%(d) 2.83% 3.27% 3.45%(d)
Ratio of expenses to average net assets
excluding interest expense (e) 2.55%(d) 2.82% 3.27% 3.45%(d)
Ratio of net investment income (loss)
to average net assets -0-%(d) (.20)% .01% .33%(d)
Portfolio turnover rate 46% 28% 36% -0-%
Average commission rate paid (f) $.0126 -- -- --
</TABLE>
See footnote summary on page 25.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-----------------------------------
SIX MONTHS FEB. 8,
ENDED 1995(G)
DEC. 31, YEAR ENDED TO
1996 JUNE 30, JUNE 30,
(UNAUDITED) 1996 1995
----------- --------- -----------
Net asset value, beginning of period $11.96 $10.10 $ 9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.01)(b) .03(b) .05
Net realized and unrealized gain
on investments .66 1.83 .52
Net increase in net asset value
from operations .65 1.86 .57
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.08) -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.42) -0- -0-
Total dividends and distributions (1.50) -0- -0-
Net asset value, end of period $11.11 $11.96 $10.10
TOTAL RETURN
Total investment return based on
net asset value (c) 5.93% 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $4,053 $2,383 $338
Ratio of expenses to average net assets 2.57%(d) 2.57% 1.03%(d)
Ratio of expenses to average net assets
excluding interest expense (e) 2.54%(d) 2.57% 1.03%(d)
Ratio of net investment income (loss)
to average net assets (.22)%(d) .63% 1.04%(d)
Portfolio turnover rate 46% 28% 36%
Average commission rate paid (f) $.0126 -- --
See footnote summary on page 25.
24
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
------------------
OCTOBER 2, 1996(G)
TO
DECEMBER 31, 1996
(UNAUDITED)
------------------
Net asset value, beginning of period $12.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) -0-(b)
Net realized and unrealized gain on investments
and foreign currency transactions .69
Net increase in net asset value from operations .69
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.19)
Distributions from net realized gains on investments
and foreign currency transactions (1.42)
Total dividends and distributions (1.61)
Net asset value, end of period $11.22
TOTAL RETURN
Total investment return based on net asset value (c) 6.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $146
Ratio of expenses to average net assets 2.44%(d)
Ratio of expenses to average net assets
excluding interest expense (e) 2.38%(d)
Ratio of net investment income (loss) to average net assets (.18)%(d)
Portfolio turnover rate 46%
Average commission rate paid (f) $.0126
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) 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.
(d) Annualized.
(e) Net of interest expense of .02%, .02%, .03% and .06% for Class A, Class B,
Class C and Advisor Class respectively (see Note F).
(f) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(g) Commencement of distributions.
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)
DONALD J. ROBINSON (1)
OFFICERS
MARK H. BREEDON, SENIOR VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
DAVID EDGERLY, VICE PRESIDENT
A. RAMA KRISHNA, VICE PRESIDENT
DANIEL V. PANKER, 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
Alliance/Regent Sector Opportunity 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 Real Estate Investment 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
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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.
WWPSR
