ALLIANCE WORLDWIDE PRIVATIZATION FUND
ANNUAL REPORT
JUNE 30, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
August 8, 1997
Dear Shareholder:
We are pleased to provide investment results for the Alliance Worldwide
Privatization Fund for the periods ended June 30, 1997. As you can see in the
box below, the Fund has performed well compared with both of its benchmark
indices.
INVESTMENT RESULTS*
TOTAL RETURNS FOR THE PERIODS ENDED
JUNE 30, 1997
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A 17.76% 25.16%
Class B 17.48 24.34
Class C 17.37 24.33
MSCI EAFE INDEX 11.36 13.16
MSCI EMERGING MARKETS FREE INDEX 17.75 12.82
* THE TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT
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 22 EMERGING
MARKETS.
MARKET REVIEW AND OUTLOOK
Outside the U.S., particularly in Europe and Japan, there are increasingly
optimistic signs of economic recovery. International equities, which have
underperformed U.S. equities for several years, are very attractively valued at
this point. It is our opinion that international equity markets remain
undervalued relative to the U.S. and that signs of recovery will be greeted
with further price appreciation from the major stock markets of the world.
The outlook for privatizations remains strong. Clearly the election of
socialist governments in the U.K. and in France means that the pace of
privatization that we have seen in Europe over the past few years is likely to
slow. However, we know that in other areas of the world, notably China, Brazil,
Eastern Europe, and Africa, there are a large number of new deals in the
pipeline. Last year, there were $90 billion in privatizations and we expect to
see a comparable amount for 1997.
INVESTMENT STRATEGY
The Alliance Worldwide Privatization Fund has continued to perform well against
its benchmark indices. Our focus in Western Europe and Latin America, as well
as Eastern Europe and Russia, has helped your fund achieve strong relative
returns against other international equity funds.
Your Fund remains broadly diversified, with portfolio holdings representing 52
countries and 45 industry subsets. The chart below shows the Fund's geographic
breakdown as of June 30, 1997.
GEOGRAPHIC BREAKDOWN
AUSTRALIA/NEW ZEALAND 4.0%
ASIA 13.8%
MIDDLE EAST/AFRICA 5.3%
WESTERN EUROPE 47.6%
SOUTH AMERICA 15.1%
NORTH AMERICA 7.6%
RUSSIA/EASTERN EUROPE 6.6%
Your Fund continues to benefit from its size and prestige in terms of
allocations of new IPO transactions. Underwriters recognize the long-term
advantages of placing stock issues with a dedicated Fund such as yours. We look
forward to continuing to secure substantial portions of new privatization
equity offerings.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
As always, we thank you for the confidence you have placed in Alliance Capital
and we look forward to continuing to serve your investment needs.
Sincerely,
John D. Carifa
President and Chairman
Mark H. Breedon
Senior 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 JUNE 30, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 25.16% 19.83%
Since Inception* 14.52% 12.93%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 24.34% 20.34%
Since Inception* 13.75% 13.50%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 24.33% 23.33%
Since Inception* 20.46% 20.46%
The average annual total returns reflect reinvestment 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);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
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
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ALLIANCE WORLDWIDE PRIVATIZATION FUND
$10,000 INVESTMENT OVER LIFE OF FUND
6/2/94 TO 6/30/97
ALLIANCE WORLDWIDE
PRIVATIZATION FUND
CLASS A: $14,542
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
MSCIEAFE: $13,109
MSCIEMF: $12,236
6/2/94 6/30/95 6/30/96 6/30/97
This chart illustrates the total value of an assumed investment in Alliance
Worldwide Privatization Fund Class A shares since inception (6/2/94) after
deducting the maximum sales charge, and with dividends and capital gains
reinvested. It is a hypothetical illustration for illustrative purposes only.
Performance for Class B, Class C and Advisor shares will vary from the results
shown due to differences in expenses and fees charged to those classes. Past
performance is not indicative of future results, and is not representative of
future gain or loss in capital value or dividend income.
The Morgan Stanley Capital International EAFEIndex (MSCIEAFE) is an unmanaged,
market-capitalization-weighted index that measures stock performance in Europe,
Australia, and the Far East.
The Morgan Stanley Capital International Emerging Markets Free Index (MSCIEMF)
is an unmanaged, market-capitalization-weighted index composed of companies
representative of the market structure of 22 emerging-market countries
inEurope, Latin America, and the Pacific Basin. The Index excludes closed
markets and those shares in otherwise free countries which are not purchasable
by foreigners.
When comparing Alliance Worldwide Privatization Fund to the indices shown
above, you should note that the Fund's performance reflects the maximum sales
charge of 4.25% while no such charges are reflected in the performance of the
indices.
Worldwide Privatization Fund
MSCIEAFEIndex
MSCIEMFIndex
4
TEN LARGEST HOLDINGS
JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Deutsche Telekom A.G.--Provides local and long-
distance telephone services as well as voice,
data and image transmission $ 16,393,704 2.4%
Telecomunicacoes Brasileiras, S.A. ADR-Telebras--
Provides domestic and international telephone
and data transmission services throughout Brazil 14,513,322 2.1
Commonwealth Serum Lab., Ltd.--Develops,
manufactures, and markets human and veterinary
pharmaceutical and diagnostic products 14,007,117 2.0
Akzo Nobel N.V.--Produces chemicals, paints,
drugs, veterinary products, hospital supplies
and diagnostics 13,703,064 2.0
Electricidade de Portugal, S.A.--Provides electric
power through the operation of hydroelectric,
fuel oil, coal fired, gas oil and wind driven
facilities 12,126,097 1.7
SK Telecom--Provides mobile telecommunications and
paging services in Korea and India 11,849,186 1.7
National Grid Holdings Plc.--operates the
electric transmission system in England and
Wales and provides related services to Scotland
and France 10,962,049 1.6
Usinor Sacilor--A large steel producer of flat
and long products such as alloy and electrical
steelwire 10,822,400 1.6
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 10,425,000 1.5
British Energy Plc.--Generates and sells
electricity in England and Scotland 9,755,142 1.4
$124,557,081 18.0%
5
INDUSTRY DIVERSIFICATION
JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $ 83,933,654 12.1%
Capital Goods 17,266,674 2.5
Consumer Manufacturing 18,197,840 2.6
Consumer Services 57,024,608 8.2
Consumer Staples 23,136,344 3.3
Energy 42,273,371 6.1
Finance 104,491,476 15.0
Healthcare 33,559,680 4.8
Multi-Industry 13,624,636 2.0
Technology 27,431,340 3.9
Telephone Utilities 106,882,633 15.3
Transportation 16,126,435 2.3
Utilities 139,079,977 20.0
Total Investments* 683,028,668 98.1
Cash and receivables 13,239,371 1.9
Net Assets $696,268,039 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-91.6%
ARGENTINA-1.0%
Central Costanera, S.A. Cl. B 383,815 $ 1,324,367
Dragodos y Construcciones
Argentina Cl. B 148,699 654,377
Metrogas, S.A. (ADR) 181,346 1,813,460
Nortel Inversora S.A. (ADR) 75,000 2,034,375
Telecom Argentina Stet
France, S.A. (ADR) 27,900 1,464,750
------------
7,291,329
AUSTRALIA-3.5%
Commonwealth Serum Lab., Ltd. 2,284,636 14,007,117
Qantas Airways, Ltd. 2,072,616 4,851,279
Tab Corp Holdings, Ltd. 1,000,000 5,436,360
------------
24,294,756
AUSTRIA-3.2%
Austria Mikro Systeme
International AG (a) 68,374 5,795,107
Boehler-Uddeholm AG (a) 40,000 3,100,114
Flughafen Wien AG (a) 100,000 4,221,501
VA Technologies AG 30,000 5,486,932
Voest-Alpine Stahl AG 80,000 3,621,690
------------
22,225,344
BELGIUM-0.5%
Credit Communal Holding Dexia (b) 30,000 3,222,455
BERMUDA-0.3%
Central European Media
Enterprises, Ltd. Cl. A 75,000 1,950,000
BOTSWANA-0.5%
Sechaba Investment Trust, Ltd. 3,000,000 3,570,000
BRAZIL-4.4%
Companhia Energetica de Minas
Gerais (ADR) 52,000 $ 2,678,000
Companhia Paulista de
Forca e Luz 36,591,000 6,152,033
Light Particpacoes, S.A. 7,550,000 3,008,639
Multicanal Particpacoes (ADR) 114,900 1,565,513
Petroleo Brasileros, S.A. (ADR) 50,000 1,450,000
Ttelecomunicacoes Brasileiras, S.A. 17,500,000 2,373,322
(ADR) 80,000 12,140,000
Unibanco (GDR) 39,500 1,466,438
------------
30,833,945
CANADA-2.2%
Alberta Energy Co., Ltd. 200,000 5,032,767
Canadian National Railway Co. 120,000 5,250,000
Petro-Canada 300,000 4,866,215
------------
15,148,982
CHILE-0.3%
Enersis, S.A. (ADR) 50,000 1,778,125
COLOMBIA-0.1%
Banco de Colombia (GDR) (c) 125,000 750,000
CZECH REPUBLIC-1.1%
Ceske Energeticke Zavody (GDS) (b) (c) 44,000 1,226,500
Ceske Radiokomunikace, A.S. (b) 20,000 2,519,428
Komercni Banka A.S. (GDR) 67,500 1,400,625
Podnik Vypocetni Techniky 13,000 1,148,544
Tabak A.S. 4,525 1,060,503
------------
7,355,600
DENMARK-0.5%
Copenhagen Airport (a) 32,500 3,447,974
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
EGYPT-1.9%
Commercial International Bank
Ordinary 66,660 $ 1,394,491
(GDR) 129,000 2,689,650
Egypt America (b) 18,946 746,970
Financial and Industrial 16,600 991,482
Housing Development Bank 38,000 983,891
Madinet Nasar City 52,000 3,656,639
Paints and Chemicals Industry 27,800 952,909
Torrah Portland Cement 69,500 1,758,588
------------
13,174,620
FINLAND-1.8%
Outokumpu OY Cl. A 350,000 6,949,641
OY Tamro AB (a) 330,000 2,290,201
Rauma OY (a) 138,700 3,181,856
------------
12,421,698
FRANCE-7.5%
Assurance Generales de France (a) 93,750 2,995,942
Certs 4,317 137,957
Compagnie des Machines
Bull, S.A (a) 181,820 1,847,066
Le Carbone Lorraine (a) 9,000 2,190,005
Pechiney, S.A. Cl. A 70,000 2,757,500
Renault, S.A. (a) 120,000 3,036,398
Sanofi, S.A. 42,873 4,202,162
Seita 72,930 2,308,264
SGS-Thomson
Microelectronics N.V. 65,000 5,132,132
Societe Generale 45,000 5,023,227
Temp Certs 1,201 134,064
Societe National Elf Aquitaine 80,000 8,630,694
Union des Assurances Federales 24,000 2,821,992
Usinor Sacilor (a) 600,000 10,822,400
------------
52,039,803
GERMANY-5.3%
BHW Holding A.G. 125,350 $ 2,120,434
Deutsche Lufthansa A.G. (a) 500,000 9,590,573
Deutsche Telekom A.G. (a) 680,690 16,393,704
Viag A.G. (a) 14,000 6,366,191
New 4,785 2,169,013
------------
36,639,915
GHANA-0.8%
Ashanti Goldfields Co.,
Ltd. (GDR) 300,000 3,506,250
Social Security Bank, Ltd. 3,268,469 2,091,201
------------
5,597,451
GREECE-0.2%
Hellenic Sugar 250,000 1,565,299
HONG KONG-0.3%
Beijing Datang Power Co. 445,500 205,576
The Guangshen Railway
Co., Ltd. (ADR) (b) 76,000 1,662,500
------------
1,868,076
HUNGARY-2.0%
Gedeon Richter (GDR) 28,800 2,635,200
Magyar Olaj-es Gazipare
Reszvenytar 150,000 3,324,166
OTP Bank (GDR) 130,000 3,445,000
Tiszai Vegyi Kombinat, (GDR) (b) 258,000 4,418,250
------------
13,822,616
INDIA-0.7%
Industrial Credit & Investment
Corporation of India, Ltd.
(GDR) (b)(c) 121,000 1,739,375
State Bank Of India (GDR) (b)(c) 95,000 2,517,500
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Videsh Sanchar Nigam,
Ltd. (GDR) (c) 45,700 $ 948,275
------------
5,205,150
INDONESIA-2.1%
PT Indosat 3,137,000 9,383,912
PT Tambang Timah (GDR) 46,000 701,500
PT Telekomunikasi Indonesia
(ADR) 99,000 3,217,500
Cl. B 913,000 1,492,259
------------
14,795,171
IRELAND-0.4%
Greencore Group Plc. (a) 608,536 2,998,539
ISRAEL-0.7%
Bank Hapoalim, Ltd. 1,073,300 2,234,623
Tadiran, Ltd. (ADR) 92,500 2,647,813
------------
4,882,436
ITALY-2.8%
Eni S.p.A. 1,000,000 5,659,886
Instituto Mobilaire Italiano
S.p.A. (a) 500,000 4,498,507
Instituto Nazionale delle
Azzicurazioni (a) 2,000,000 3,046,048
Telecom Italia Di Risp. S.p.A. 1,400,000 2,770,257
Telecom Italia Mobile S.p.A. 2,000,000 3,575,284
------------
19,549,982
JAPAN-5.2%
Daiwa Securities Co., Ltd. 890,000 7,019,981
DDI Corp. 1,255 9,263,851
East Japan Railway Co. 387 1,985,481
Japan Tobacco, Inc. 851 6,719,789
Nippon Telegraph &
Telephone Corp. 418 4,011,866
Nomura Securities Co., Ltd. 545,000 7,513,306
------------
36,514,274
JORDAN-0.3%
Arab Potash Co. 217,433 $ 2,039,393
KENYA-0.1%
Kenya Airways 4,650,000 699,633
MALAYSIA-0.5%
Malakoff Berhad 278,000 1,211,569
Telekom Malaysia 417,000 1,949,525
------------
3,161,094
MEXICO-2.3%
Alfa, S.A. 561,200 3,827,969
Grupo Financiero Banamex Cl. B 1,378,500 3,539,064
Grupo Financiero Bancrecer, S.A.
de C.V. Cl. B (b) 3,953,843 383,144
Grupo Financiero Banorte, S.A.
de C.V. Cl. B (b) 3,499,677 3,637,973
Grupo Financiero Probursa, S.A.
de C.V. Cl. B (b) 929,280 235,068
Grupo Minsa, S.A. de C.V.
Cl. C 1,837,000 2,381,211
Grupo Profesional Planeacion
Y Proyectos, S.A. Cl. B (d) 129,000 600,680
Telefonos de Mexico, S.A.
Cl.L (ADR) (b) 31,000 1,480,250
------------
16,085,359
NETHERLANDS-4.9%
Akzo Nobel N.V. 100,000 13,703,064
European Vinyls Corp.
International N.V. 104,000 2,633,026
ING Groep N.V. 152,272 7,019,950
KLM Royal Dutch Air
Lines N.V. (a) 210,714 6,494,028
Koninklijke PTT Nederland N.V. 100,000 3,922,438
------------
33,772,506
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
NEW ZEALAND-0.5%
Tranz Rail Holdings, Ltd. (b) 614,200 $ 3,504,441
NORWAY-0.8%
Christiana Bank OG Kreditkasse (a) 800,000 2,731,907
Den Norske Bank (a) 700,000 2,744,201
------------
5,476,108
PAKISTAN-0.7%
Hub Power Co., Ltd. (GDR) (b) 100,000 2,512,500
Pakistan Telecom
Ordinary (b) 552,100 417,098
(GDR) (b) 28,813 2,175,382
------------
5,104,980
PERU-1.9%
Cementos Lima, S.A. 10,444 210,258
Cementos Norte Pacasmayo, S.A.
Cl. C 1,467,597 2,268,482
Cl. T. 775,483 1,204,520
CPT Telefonica del Peru, S.A.
Cl. B 1,161,065 3,050,942
Explosivos, S.A. Cl. C (b)(d) 1,005,528 1,099,352
Fereyos, S.A. 727,500 836,522
Ontario Quinta A.V.V.(d) 2,000,000 2,000,000
Telefonica del Peru, S.A. (ADR) 95,400 2,498,288
------------
13,168,364
PHILLIPINES-1.5%
First Philippine Holdings
Corp. Series B 2,316,394 3,205,504
International Container Terminal
Services, Inc. (b) 4,672,875 2,391,713
Manila Electric Co. Series B 939,305 4,629,574
------------
10,226,791
POLAND-1.5%
Bank Handlowy W Warszawie 290,200 $ 3,346,594
(GDR) (c) 98,200 1,217,680
Bank Przemyslowo Handlowy 20,000 982,808
Elektrim, S.A. 262,000 2,279,993
Wielkopolski Bank Kredytowy, S.A. 400,000 2,288,148
------------
10,115,223
PORTUGAL-2.2%
Electricidade de Portugal, S.A. 667,500 12,126,097
Portucel Industrial-Empresa
Productora de Celulose, S.A. 218,100 1,616,653
TVI Televisao Independiente (b)(d) 676,000 1,766,262
------------
15,509,012
ROMANIA-0.1%
Societatea, S.A. (d) 30,454 477,199
RUSSIA-1.4%
Gazprom (ADR) (b)(c) 181,500 3,121,800
Nearmedic Austrian Certs (b)(d) 30,452 4,541,550
Sun Brewing (GDR) (b)(c) 264,000 1,848,000
------------
9,511,350
SLOVAK REPUBLIC-0.0%
Nafta Gbely, S.A. 814 26,621
SOUTH AFRICA-0.2%
South African Iron & Steel 2,520,750 1,666,795
SOUTH KOREA-2.6%
Korea Electric Power Corp. 85,390 2,548,238
(ADR) 138,600 2,590,088
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Korean Air Lines 28,730 $ 583,530
Pohang Iron & Steel Co. 7,280 756,038
Sk Telecom, Ltd. 11,622 8,672,656
(ADR) 315,680 3,176,530
------------
18,327,080
SPAIN-2.6%
Empresa Nacional de Celulosas, S.A. 349,014 6,157,246
Endesa (a) 70,000 5,875,408
Repsol, S.A (a) 150,000 6,340,881
------------
18,373,535
SWEDEN-1.7%
Assi Doman 182,000 5,184,607
Castellum AB 295,500 2,219,255
Sparbanken Sverige AB, Cl. A (a) 200,000 4,454,307
------------
11,858,169
SWITZERLAND-1.3%
Sairgroup Namen 8,000 8,961,315
THAILAND-0.5%
Electricity Generating Public
of Thailand 594,000 1,456,051
The Industrial Finance Corp.
of Thailand 1,632,800 2,080,000
------------
3,536,051
TRINIDAD & TOBAGO-0.4%
B.W.I.A. International
Airways (b)(d) 2,727,272 2,999,999
TURKEY-1.5%
Efes Sinai Yatrim
Ordinary (b)(d) 13,438,261 468,823
Receipts (b)(d) 17,314,682 604,060
Eregli Demir Ve Celik
Fabrikalari T.A.S. 10,116,750 1,685,841
Petrokimya Holding A.S. 1,907,000 654,819
Tupras Turkiye Petrol
Rafinerileri A.S. (b) 5,595,000 3,164,316
Turk Hava Yollari A.O. (b) 6,847,275 $ 1,959,328
Usas Ucak Servisi A.S. 857,250 2,020,114
------------
10,557,301
UNITED KINGDOM-9.7%
Anglian Water Plc. 800,000 8,676,416
Birkby Plc. 930,000 2,430,629
British Energy Plc.
Partially Paid 4,000,000 9,755,142
National Grid Holdings Plc. 3,000,000 10,962,049
National Power Plc. (a) 660,000 5,735,225
Northern Ireland
Electricity Plc. (a) 700,000 4,835,954
Powergen Plc. 793,961 9,436,987
RJB Mining (a) 300,000 1,797,876
Scottish Hydro Electric 600,000 4,145,103
Stagecoach Holdings Plc 353,404 3,724,013
Wessex Water Plc. 917,691 6,217,659
------------
67,717,053
UNITED STATES-2.4%
Near East International (b)(d) 10 1,000,000
Pharmacia & Upjohn, Inc. (a) 300,000 10,425,000
United Telecom Holding, Ltd. (d) 17,862 5,358,600
------------
16,783,600
VENEZUELA-0.7%
Banco Mercantil (ADR) 15,000 625,590
Compania Anonima Nacional
Telefonos de Venezuela (ADR) (b) 99,700 4,299,563
------------
4,925,153
Total Common Stocks
(cost $541,432,495) 637,527,665
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
PREFERRED STOCKS-6.5%
BRAZIL-6.0%
Bardella Industrias Mecanicas,
S.A. 20,786 $ 3,050,660
Celesc Centrais Electricas
de Santa Catarina, S.A.
(GDR) (c) 13,000 1,807,000
Cl. B 4,182,133 6,215,608
Companhia Riograndense de Telcom
Cl. A 6,024,000 9,120,914
Receipts 5/97 191,091 245,664
Companhia Vale Do Rio Doce
PNB (e) 12,000 -0-
Companhia Paulista de
Forca e Luz 9,309,598 1,547,059
Iven, S.A. 8,614,000 5,881,092
Metalurgica Gerdau, S.A. 86,897,892 4,197,381
Siderurgica Riograndense, S.A. 194,587,490 7,410,791
Telecomunicacoes Brasileiras,
S.A. 8,250,000 1,251,428
Trikem, S.A. 357,264,933 995,583
------------
41,723,180
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
RUSSIA-0.5%
RNGS Holdings, Ltd. 8%,
redeemable pfd. (b)(d) 990,700 $ 3,777,823
Total Preferred Stocks
(cost $24,252,691) 45,501,003
TIME DEPOSITS-0.4%
Royal Bank of Canada
5.00%, 7/01/97 1,700 1,700,000
Sumitomo Bank
6.38%, 7/01/97 1,000 1,000,000
Total Time Deposits
(cost $2,700,000) 2,700,000
TOTAL INVESTMENTS-98.5%
(cost $568,385,186) 685,728,668
Other assets less
liabilities-1.5% 10,539,371
NET ASSETS-100% $696,268,039
(a) Securities or portion thereof, with an aggregate market value of
$91,926,681 have been segregated to collateralize forward exchange currency
contracts.
(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 June 30, 1997
these securities amounted to $15,176,130 or 2.18% of net assets.
(d) Illiquid security--valued at fair market value (See Note A).
(e) The shares are a result of a corporate action. Awaiting shareholder
approval for conversion.
Glossary of terms:
ADR - American depository receipt.
GDR - Global depository receipt.
GDS - Global depository security.
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $568,385,186) $685,728,668
Foreign cash, at value (cost $4,449,507) 4,399,117
Cash 12,642
Receivable for investment securities sold 16,552,131
Dividends and interest receivable 3,146,666
Receivable for capital stock sold 2,321,011
Foreign taxes receivable and other assets 911,938
Unrealized appreciation of forward exchange
currency contracts 731,590
Deferred organization expense 85,053
Total assets 713,888,816
LIABILITIES
Payable for investment securities purchased 14,522,799
Payable for capital stock redeemed 1,634,433
Advisory fee payable 557,305
Distribution fee payable 240,323
Accrued commitment fees 6,606
Accrued expenses 659,311
Total liabilities 17,620,777
NET ASSETS $696,268,039
COMPOSITION OF NET ASSETS
Capital stock, at par $ 52,666
Additional paid-in capital 505,633,039
Accumulated net investment income 10,115,291
Accumulated net realized gain on investments and
foreign currency transactions 62,490,649
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 117,976,394
$696,268,039
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($561,792,552/42,351,841 shares of capital stock
issued and outstanding) $13.26
Sales charge--4.25% of public offering price .59
Maximum offering price $13.85
CLASS B SHARES
Net asset value and offering price per share
($121,172,834/9,294,525 shares of capital stock
issued and outstanding) $13.04
CLASS C SHARES
Net asset value and offering price per share
($12,928,985/991,544 shares of capital stock
issued and outstanding) $13.04
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($373,668/28,234 shares of capital stock issued and
outstanding) $13.23
See notes to financial statements.
13
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $2,146,896) $ 19,582,058
Interest 600,933 $ 20,182,991
EXPENSES
Advisory fee 6,703,589
Distribution fee - Class A 1,715,290
Distribution fee - Class B 929,555
Distribution fee - Class C 55,079
Custodian 1,221,490
Transfer agency 826,982
Printing 163,250
Administrative 146,597
Registration 129,666
Audit and legal 109,384
Amortization of organization expenses 44,176
Directors' fees 32,200
Loan commitment fees (see note E) 30,022
Loan agreement expense 15,935
Miscellaneous 22,321
Total expenses before interest 12,145,536
Interest expense 79,562
Total expenses 12,225,098
Net investment income 7,957,893
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment
transactions 110,135,048
Net realized gain on foreign
currency transactions 7,362,852
Net change in unrealized appreciation
(depreciation) of:
Investments 16,897,494
Foreign currency denominated assets and liabilities 1,269,903
Net gain on investments and foreign currency transactions 135,665,297
NET INCREASE IN NET ASSETS FROM OPERATIONS $143,623,190
See notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1997 1996
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 7,957,893 $ 4,399,665
Net realized gain on investments and
foreign currency transactions 117,497,900 37,218,701
Net change in unrealized appreciation
(depreciation)of investments and foreign
currency denominated assets and
liabilities 18,167,397 101,102,039
Net increase in net assets from operations 143,623,190 142,720,405
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (6,642,639) -0-
Class B (562,618) -0-
Class C (25,246) -0-
Advisor Class (2,150) -0-
Net realized gain on investments
Class A (62,883,647) -0-
Class B (9,986,472) -0-
Class C (448,021) -0-
Advisor Class (16,066) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (124,954,030) 522,213,677
Total increase (decrease) (61,897,699) 664,934,082
NET ASSETS
Beginning of year 758,165,738 93,231,656
End of year (including undistributed net
investment income of $11,184,864 and
$10,459,624, respectively) $ 696,268,039 $ 758,165,738
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Worldwide Privatization Fund, Inc. (the "Fund"), organized as a
Maryland corporation on March 16, 1994, is registered under the Investment
Company Act of 1940 as a non-diversified, open-end management investment
company. The Fund offers Class A, Class B, Class C and Advisor Class shares.
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.
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
16
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
on the ex-dividend date and are determined in accordance with income tax
regulations.
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification. During the current fiscal year, permanent differences
resulted in a net increase in additional paid in capital and a corresponding
decrease in accumulated net investment income, accumulated net realized gain on
investments and foreign currency transactions. These reclassifications had no
effect on net assets.
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 $146,597 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended June 30, 1997.
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 $547,234 for the year ended June 30, 1997.
In addition, for the year ended June 30, 1997, fund expenses were reduced by
$58,794 under expense offset arrangements with Alliance Fund Services. Transfer
agency fees reported in the statement of operations exclude these credits.
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 $36,182 from the sale of Class A shares and
$309,365 and $1,116 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B and Class C shares, respectively, for
the year ended June 30, 1997. Brokerage commissions paid on securities
transactions for the year ended June 30, 1997, amounted to $1,512,610, 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
$5,013,479 and $251,109 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 $314,916,094 and $480,833,742,
respectively, for the year ended June 30, 1997. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
June 30, 1997.
At June 30, 1997, the cost of securities for federal income tax purposes was
$574,581,353. Accordingly, gross unrealized appreciation of investments was
$159,990,918 and gross unrealized depreciation of investments was $42,647,436,
resulting in net unrealized appreciation of $111,147,315 excluding foreign
currency.
At June 30, 1997, the Fund utilized $809,172 of the Global Privatization Fund's
(which was acquired in 1995; see Note H) capital loss carryforward. Such
capital loss carryforward has been depleted as of June 30, 1997.
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 June 30, 1997, the fund had outstanding forward exchange currency contracts,
as follows:
<TABLE>
CONTRACT COST ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
---------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY
SALE CONTRACTS
Austrian Schilling,
expiring 7/31/97 136,140,900 $11,239,703 $11,116,408 $123,295
Danish Krone,
expiring 7/31/97 9,264,000 1,412,497 1,397,757 14,740
Deutsche Marks,
expiring 7/31/97 22,315,500 12,968,850 12,825,297 143,553
Finnish Markka,
expiring 7/31/97 18,576,000 3,618,795 3,589,562 29,233
French Francs,
expiring 7/31/97 62,958,000 10,837,450 10,735,294 102,156
Irish Punt,
expiring 7/31/97 1,722,356 2,614,020 2,610,092 3,928
Italian Lira,
expiring 7/31/97 15,022,480,000 8,909,179 8,824,698 84,481
Netherlands Guilder,
expiring 7/31/97 21,603,840 11,148,643 11,029,304 119,339
Norwegian Krone,
expiring 7/31/97 21,182,700 2,925,787 2,899,157 26,630
Spanish Peseta,
expiring 7/31/97 836,616,000 5,747,371 5,678,009 69,362
Swedish Krona,
expiring 7/31/97 19,275,000 2,513,693 2,498,820 14,873
$731,590
</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. There was no loan outstanding at June 30, 1997.
The weighted average amount of bank loans outstanding for the year ended June
30, 1997, amounted to approximately $15,424,242 at a weighted average interest
rate of 5.63%.
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
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 11,570,307 1,832,982 $ 138,235,504 $ 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 77,169 17,485 953,384 204,175
Shares redeemed (27,315,452) (50,594,492) (329,157,216) (534,852,442)
Net increase
(decrease) (13,094,839) 54,117,184 $(162,101,251) $ 528,828,954
CLASS B
Shares sold 3,844,583 1,323,183 $ 45,492,932 $ 15,468,400
Shares issued in
reinvestment of
dividends and
distributions 361,705 -0- 3,863,013 -0-
Shares converted
to Class A (78,087) (17,389) (953,384) (204,175)
Shares redeemed (1,777,739) (2,218,161) (21,130,378) (23,735,902)
Net increase
(decrease) 2,350,462 (912,367) $ 27,272,183 $ (8,471,677)
CLASS C
Shares sold 921,243 195,418 $ 11,138,227 $ 2,183,955
Shares issued in
reinvestment of
dividends and
distributions 33,043 -0- 353,234 -0-
Shares redeemed (162,024) (29,593) (1,962,355) (327,555)
Net increase 792,262 165,825 $ 9,529,106 $ 1,856,400
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
OCT. 2, 1996(A) OCT. 2, 1996(A)
TO TO
JUNE 30, 1997 JUNE 30, 1997
------------ --------------
ADVISOR CLASS
Shares sold 26,710 $ 329,652
Shares issued in
reinvestment of
dividends and
distributions 1,656 17,869
Shares redeemed (132) (1,589)
Net increase 28,234 $ 345,932
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 are transferred 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: ACQUISITION OF THE GLOBAL PRIVATIZATION FUND
On October 30, 1995 the Fund acquired all of 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 $1,057,272,285 (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.
(a) Commencement of distribution.
20
FINANCIAL HIGHLIGHTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
JUNE 2,
YEAR ENDED JUNE 30, 1994(A)
------------------------------------- TO
1997 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 .15(b) .10(b) .06 .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.55 1.85 .37 (.26)
Net increase (decrease) in net asset
value from operations 2.70 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 $13.26 $12.13 $10.18 $ 9.75
TOTAL RETURN
Total investment return based on net
asset value(c) 25.16% 19.16% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $561,793 $672,732 $13,535 $4,990
Ratio of expenses to average net assets 1.72% 1.87% 2.56% 2.75%(d)
Ratio of expenses to average net assets
excluding interest expense 1.71%(e) 1.85%(e) 2.56% 2.75%(d)
Ratio of net investment income to
average net assets 1.27% .95% .66% 1.03%(d)
Portfolio turnover rate 48% 28% 36% -0-%
Average commission rate paid(f) $.0132 -- -- --
</TABLE>
See footnote summary on page 24.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
JUNE 2,
YEAR ENDED JUNE 30, 1994(A)
------------------------------------- TO
1997 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) .08 (b) (.02)(b) .02 -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.50 1.88 .34 (.26)
Net increase (decrease) in net
asset value from operations 2.58 1.86 .36 (.26)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.08) -0- -0- -0-
Distributions from net realized gains
on and foreign currency transactions (1.42) -0- -0- -0-
Total dividends and distributions (1.50) -0- -0- -0-
Net asset value, end of period $13.04 $11.96 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on
net asset value(c) 24.34% 18.42% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $121,173 $83,050 $79,359 $22,859
Ratio of expenses to average net assets 2.43% 2.83% 3.27% 3.45%(d)
Ratio of expenses to average net assets
excluding interest expense 2.42%(e) 2.82%(e) 3.27% 3.45%(d)
Ratio of net investment income (loss)
to average net assets .66% (.20)% .01% .33%(d)
Portfolio turnover rate 48% 28% 36% -0-%
Average commission rate paid(f) $.0132 -- -- --
</TABLE>
See footnote summary on page 24.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------
FEB. 8,
1995(G)
YEAR ENDED JUNE 30, TO
------------------------ JUNE 30,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period $11.96 $10.10 $ 9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income .12(b) .03(b) .05
Net realized and unrealized gain on
investments and foreign currency
transactions 2.46 1.83 .52
Net increase in net asset value
from operations 2.58 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 $13.04 $11.96 $10.10
TOTAL RETURN
Total investment return based on net
asset value(c) 24.33% 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,929 $2,383 $338
Ratio of expenses to average net assets 2.42% 2.57% 1.03%(d)
Ratio of expenses to average net assets
excluding interest expense 2.41%(e) 2.57%(e) 1.03%(d)
Ratio of net investment income to
average net assets 1.06% .63% 1.04%(d)
Portfolio turnover rate 48% 28% 36%
Average commission rate paid(f) $.0132 -- --
</TABLE>
See footnote summary on page 24.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
OCTOBER 2, 1996(G)
TO
JUNE 30, 1997
------------------
Net asset value, beginning of period $12.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b) .18
Net realized and unrealized gain on investments and
foreign currency transactions 2.52
Net increase in net asset value from operations 2.70
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 $13.23
TOTAL RETURN
Total investment return based on net asset value(c) 25.24%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $374
Ratio of expenses to average net assets(d) 1.96%
Ratio of expenses to average net assets
excluding interest expense(d)(e) 1.95%
Ratio of net investment income to average net assets(d) 2.97%
Portfolio turnover rate 48%
Average commission rate paid $.0132
(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 .01%, .02%, respectively, since inception on
loan agreement (See Note E).
(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. This amount includes commissions paid in foreign
currencies, which have been converted into US dollars using the prevailing
exchange rate on the date of the transaction. Such conversions may materially
affect the rate shown.
(g) Commencement of distribution.
24
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE WORLDWIDE PRIVATIZATION
FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Worldwide Privatization
Fund, Inc. (the "Fund") at June 30, 1997, the result of its operations for the
year then ended, the changes in its net assets for the two years then ended and
the financial highlights for the three years then ended and for the period June
2, 1994 through June 30, 1994, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1997 by correspondence with the
custodian and brokers, and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
August 15, 1997
FOREIGN TAX CREDIT (UNAUDITED)
The fund paid foreign taxes during the fiscal year ended June 30,1997, which it
intends to pass through pursuant to Section 853 of the Internal Revenue Code to
its shareholders.
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
KATHLEEN CORBET, SENIOR VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
DAVID EDGERLY, VICE PRESIDENT
A. RAMA KRISHNA, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
FRANCIS REEVES, 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 High Yield Fund
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
Massachusetts 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
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
WWPAR
