ALLIANCE WORLDWIDE PRIVATIZATION FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
January 28, 1998
Dear Shareholder:
This semi-annual report provides investment results and market commentary for
the period ended December 31, 1997.
INVESTMENT RESULTS
Despite volatility in the Asian markets, Alliance Worldwide Privatization Fund
outperformed both its benchmarks by a wide margin in 1997. The Fund returned
13.18% for the year (Class A shares at NAV), compared with 2.06% for the Morgan
Stanley Capital International (MSCI) Europe, Asia, Far East (EAFE) Index and
- -11.59% for the MSCI Emerging Markets Free Index. The Fund's outperformance was
largely due to substantial portfolio holdings in Europe and Brazil and
underweighting in Southeast Asia and Japan.
INVESTMENT RESULTS*
Period Ended December 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
--------- ---------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A -3.89% 13.18%
Class B -4.36% 12.35%
Class C -4.28% 12.36%
MSCI EAFE INDEX -8.36% 2.06%
MSCI EMERGING MARKETS FREE INDEX -24.91% -11.59%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF
12/31/97. THE TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO
DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. 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.
MARKET ENVIRONMENT
Last year proved to be another successful year for privatization stocks. An
estimated $150 billion of new issues was raised during the year, setting
another record.
Most of this new paper was concentrated in Western Europe and Latin America,
while both Japan and Southeast Asia, with the exception of China, remained
quiet. The Southeast Asian crisis at the end of 1997, we believe, was prompted
by the failure of many governments in the region to liberalize and privatize
their economies. We hope that the radical measures needed to be put in place in
the region will be undertaken by Asian governments.
DIVERSIFICATION OF PORTFOLIO HOLDINGS
Your Fund remains well diversified with representation in over 40 different
countries around the globe and more than 180 different issues. We continue to
provide a well diversified core international fund with exposure to the most
exciting and rapidly growing areas of the financial markets.
GEOGRAPHIC DIVERSIFICATION
By net asset value, as of 12/31/97
RUSSIA/EASTERN EUROPE 6.6%
NORTH AMERICA 8.4%
SOUTH AMERICA 13.0%
WESTERN EUROPE 51.8%
MIDDLE EAST/AFRICA 4.8%
ASIA 12.0%
AUSTRALIA/NEW ZEALAND 3.4%
CURRENT OUTLOOK
Looking forward to 1998, we would expect to see another substantial increase in
privatization equity issues with Brazil, Western Europe and Russia leading the
way. We are optimistic that international markets can record another positive
performance for the year. Our confidence is based upon an expectation of some
recovery in Western Europe and inflation remaining low on a global basis. We
anticipate that the flows into international mutual funds will continue to
provide liquidity support for world markets.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
As always, we appreciate the confidence you have placed in Alliance Capital. We
look forward to building further on our 1997 results and reporting to you in
the coming periods.
Sincerely,
John D. Carifa
Chairman and President
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 RETURNS AS OF DECEMBER 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 13.18% 8.37%
Since Inception* 11.13% 9.80%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 12.35% 8.42%
Since Inception* 10.34% 10.12%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 12.36% 11.37%
Since Inception* 14.84% 14.84%
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 $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 6/2/94, Class A and Class B; 2/8/95, Class C.
3
TEN LARGEST HOLDINGS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S.$ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Sairgroup Namen--Operates an international airline
for passengers, mail and freight $ 15,049,275 2.4%
Akzo Nobel NV--Produces chemicals, paints,
drugs, veterinary products, hospital supplies
and diagnostics 13,792,676 2.2
Energis Plc.--Provides broadband national and
international communications services 13,671,702 2.1
Telecomunicacoes Brasileiras, SA - ADR and
preferred stocks--Provides domestic and
international telephone and data transmission
services throughout Brazil 13,607,640 2.1
Commonwealth Serum Lab., Ltd.--Develops,
manufactures, and markets human and veterinary
pharmaceutical and diagnostic products 12,959,578 2.0
Electricidade de Portugal, SA--Provides electric
power through the operation of hydroelectric,
fuel oil, coal fired, gas oil and wind driven
facilities 11,361,247 1.8
Sanofi, SA--Researches and manufactures health
care products and beauty aids 11,132,342 1.7
Austria Tabakwerke AG--Manufactures cigarettes,
cigars, chewing tobacco and other tobacco products 11,060,327 1.7
Viag AG--Provides electrical power and natural
gas services, packaging, chemicals and logistics
services 10,950,528 1.7
British Energy Plc.--Generates and sells
electricity in England and Scotland 10,420,711 1.6
$124,006,026 19.3%
4
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $ 71,611,663 11.2%
Capital Goods 4,438,632 0.7
Consumer Manufacturing 16,227,949 2.5
Consumer Services 77,924,077 12.1
Consumer Staples 35,718,276 5.6
Energy 30,191,725 4.7
Finance 112,308,087 17.5
Healthcare 28,394,240 4.4
Multi-Industry 10,903,329 1.7
Technology 22,451,163 3.5
Telephone Utilities 64,845,943 10.1
Transportation 8,184,558 1.3
Utilities 121,714,912 19.0
Total Investments* 604,914,554 94.3
Cash and receivables 36,536,474 5.7
Net Assets $641,451,028 100.0%
* Excludes short-term obligations.
5
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS &OTHER INVESTMENTS-89.5%
ARGENTINA-0.8%
Banco Rio De La Plata, SA (ADR) 33,800 $ 473,200
Metrogas, SA Cl. B (ADR) 49,846 386,306
Nortel Inversora SA (ADR) 83,000 2,116,500
Telecom Argentina, SA (ADR) 53,300 1,905,475
------------
4,881,481
AUSTRALIA-3.2%
Amrad Corporation, Ltd. 2,000,000 2,998,050
Commonwealth Serum Lab., Ltd. 2,071,279 12,959,578
Tab Corp Holdings, Ltd. 1,000,000 4,692,600
------------
20,650,228
AUSTRIA-2.9%
Austria Mikro Systeme International AG 60,000 3,033,689
Austria Tabakwerke AG 250,000 11,060,326
Boehler-Uddeholm AG 40,000 2,340,049
Voest-Alpine Stahl AG 60,000 2,308,448
------------
18,742,512
BELGIUM-0.8%
Credit Communal Holding Dexia (a) 40,000 5,362,858
BOTSWANA-0.5%
Sechaba Breweries, Ltd. 3,000,000 3,170,291
BRAZIL-4.6%
Celesc Centrais Electricas de Santa
Catarina, SA (GDR) (b) 13,000 1,371,500
Companhia Energetica de Minas Gerais (ADR) 52,000 2,340,000
Companhia Paranaense de Energia 75,000 1,026,562
Comphania Paulista de Forca e Luz 32,091,000 4,226,851
Espirito Santo Centrais Electicas SA 6,247 783,639
Light Particpacoes, SA 7,550,000 2,266,251
Metalurgica Gerdau, SA 10,044,305 269,996
Multicanal Particpacoes (ADR) 114,900 675,037
Petroleo Brasileros, SA (ADR) 80,000 1,840,000
(ADR) (b) 26,500 609,500
Telecomunicacoes
Brasileiras, SA 17,500,000 1,779,714
(ADR) 93,500 10,886,906
Unibanco (GDR) 35,600 1,145,875
------------
29,221,831
COLOMBIA-0.1%
Banco De Colombia (GDR) (b) 125,000 733,800
CZECH REPUBLIC-1.0%
Ceske Radiokomunikace, AS (a) 20,000 2,514,890
Czech Power Company (GDR) (b) 44,000 1,443,948
Komercni Banka AS (GDR) 67,500 810,000
Podnik Vypocetni Techniky 13,000 822,038
Tabak AS 4,525 1,033,583
------------
6,624,459
EGYPT-1.7%
Commercial International Bank
Ordinary 66,660 1,345,151
(GDR) 129,000 2,699,325
Egyptian Financial and Industrial 16,600 1,000,049
6
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Housing Development Bank 38,000 $ 1,016,311
Madinet Nasar City 30,000 1,896,547
Mi Bank 9,000 268,453
Paints and Chemicals Industry 27,800 890,580
Torrah Portland Cement 69,500 1,593,036
------------
10,709,452
FINLAND-0.8%
Outokumpu OY Cl. A 450,000 5,326,498
FRANCE-8.6%
Assurances Generales de France 49,000 6,431,835
Pechiney, SA Cl. A 71,078 2,806,037
Renault, SA 120,000 3,375,592
Sanofi, SA 100,000 11,132,342
Seita 170,000 6,101,188
SGS-Thomson Microelectronics NV 65,000 4,023,012
Societe Generale 46,201 6,294,728
Societe National Elf Aquitaine 80,000 9,304,644
Usinor Sacilor 400,000 5,775,525
------------
55,244,903
GERMANY-3.2%
BHW Holding AG 125,350 2,055,489
Deutsche Lufthansa AG 400,000 7,515,286
Viag AG 20,000 10,950,528
------------
20,521,303
GHANA-0.4%
Social Security Bank, Ltd. 3,268,469 2,458,583
HONG KONG-0.2%
The Guangshen Railway Co., Ltd. (ADR) (a) 69,100 928,531
Tianjin Development Holdings Ltd. 189,000 175,610
------------
1,104,141
HUNGARY-0.8%
Magyar Olaj-es Gazipare Reszvenytar 100,000 2,423,560
OTP Bank (GDR) 70,000 2,660,000
------------
5,083,560
INDIA-1.8%
Industrial Credit & Investment Corporation
of India, Ltd. (GDR) (a)(b) 337,900 4,392,700
Mahanagar Telephone Nigam, Ltd. (GDR) 160,900 2,485,905
State Bank of India (GDR) (a)(b) 45,000 819,000
Videsh Sanchar Nigam, Ltd. (GDR) (b) 296,200 4,154,205
------------
11,851,810
INDONESIA-1.8%
PT Indostat 3,899,000 7,230,873
PT Tambang Timah (GDR) 323,000 3,472,250
PT Telekomunikasi Indonesia
(ADR) 49,000 542,063
Cl. B 913,000 485,550
------------
11,730,736
ISRAEL-0.7%
Bank Hapoalim, Ltd. 1,073,300 2,575,265
Tadiran, Ltd. (ADR) 52,500 1,857,188
------------
4,432,453
ITALY-4.9%
Aeroporti Di Roma 600,000 6,222,742
Eni SpA 1,000,000 5,668,856
Instituto Mobilaire Italiano SpA 500,000 5,934,495
Instituto Nazionale delle Azzicurazioni 2,000,000 4,052,412
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Telecom Italia Mobile SpA 2,000,000 $ 5,685,811
Telecom Italia SpA 813,953 3,588,297
------------
31,152,613
JAPAN-4.0%
Daiwa Securities Co., Ltd. 1,084,000 3,735,069
East Japan Railway Co. 310 1,398,086
Japan Tobacco, Inc. 1,131 8,019,188
Nippon Telegraph & Telephone, Corp. 663 5,685,758
Nomura Securities Co., Ltd. 520,000 6,928,025
------------
25,766,126
JORDAN-0.3%
Arab Potash Co. 217,433 1,903,784
KENYA-0.1%
Kenya Airways 4,650,000 553,132
MEXICO-2.4%
Alfa, SA 251,200 1,702,576
Grupo Financiero Banamex Cl. B 1,178,500 3,526,519
Grupo Financiero Bancrecer SA de CV
Cl. B (a) 2,140,843 95,496
Grupo Financiero Banorte, SA de CV
Cl. B (a) 3,299,677 5,748,523
Grupo Minsa, SA de CV Cl. C 1,637,000 1,107,493
Grupo Profesional Planeacion Y Proyectos,
SA Cl. B (c) 129,000 501,103
Telefonos de Mexico,
SA Cl. L (ADR) (a) 18,200 1,020,338
Tubos de Acero de Mexico SA (ADR) 70,000 1,513,750
------------
15,215,798
NETHERLANDS-4.9%
Akzo Nobel NV 80,000 13,792,676
ING Groep NV 202,197 8,515,687
KLM Royal Dutch Air Lines NV 250,000 9,246,735
------------
31,555,098
NEW ZEALAND-0.2%
Tranz Rail Holdings, Ltd. (a) 268,000 1,011,492
NORWAY-0.7%
Christiana Bank OG Kreditkasse 600,000 2,424,406
Den Norske Bank 500,000 2,359,322
------------
4,783,728
PAKISTAN-0.7%
Hub Power Co., Ltd. (GDR) (a) 75,000 2,334,375
Pakistan Telecom
Ordinary (a) 100 75
(GDR) (a) 28,813 1,988,097
------------
4,322,547
PEOPLES REPUBLIC OF CHINA-1.7%
Bejing Datang Power 7,415,500 3,397,216
China Southern Airlines Co. 11,286,000 2,912,892
Zhejiang Southern Electric Power Co.,
Ltd. (GDR) (b) 300,600 4,779,540
------------
11,089,648
PERU-1.7%
Cementos Lima, SA 10,444 227,583
Cementos Norte
Pacasmayo SA Cl. C 1,600,893 2,291,186
Class T 845,917 1,195,149
CPT Telefonica del Peru, SA Cl. B 1,161,065 2,594,821
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Explosivos, SA Cl. C (a)(c) 1,005,528 $ 1,143,903
Fereyos, SA 1,091,012 1,153,070
Ontario Quinta AVV (c) 2,000,000 2,000,000
------------
10,605,712
PHILIPPINES-1.2%
First Philippine Holdings Corp. Series B 2,316,394 1,801,640
International Container Terminal
Services, Inc. (a) 4,877,187 602,122
Manila Electric Co. Series B 1,642,305 5,433,799
------------
7,837,561
POLAND-2.2%
Bank Handlowy W Warszawie 140,200 1,789,787
Bank Przemyslowo Handlowy 20,000 1,038,298
Elektrim, SA 200,000 1,934,752
Kredyt Bank, SA (GDR) (b) 585,000 7,341,750
Wielkopolski Bank Kredytowy, SA 400,000 2,008,511
------------
14,113,098
PORTUGAL-2.0%
Electricidade de Portugal, SA 600,000 11,361,247
Portucel Industrial-Empresa Productora
de Celulose, SA 218,100 1,330,783
TVI Televisao
Independiente (a)(c) 676,000 -0-
Rts 676,000 220,379
------------
12,912,409
ROMANIA-0.1%
Societatea, SA (c) 30,454 422,658
RUSSIA-2.2%
Gazprom (ADR) (a)(b) 100,000 2,412,500
Lukoil Holding (ADR) 30,000 2,767,500
Nearmedic Ltd. (c) 1,522,600 3,127,513
RNGS Holdings (ADR) 184,202 2,641,640
Sun Brewing (GDR) (a)(b) 200,000 3,050,000
------------
13,999,153
SLOVAKIA-0.2%
Slovakofarma AS (GDR) 156,200 1,304,270
SOUTH AFRICA-0.5%
South African Iron & Steel 10,329,133 3,056,396
SOUTH KOREA-1.3%
Korea Electric Power Corp 85,390 790,928
(ADR) 138,600 1,394,662
Korean Air Lines 28,730 120,683
Pohang Iron & Steel Co. 7,280 203,054
Sk Telecom Co., Ltd. 11,622 3,966,565
(ADR) 291,160 1,892,540
------------
8,368,432
SPAIN-4.4%
Aceralia, SA 730,200 8,959,140
Aldeasa, SA 409,270 8,673,518
Empresa Nacional de Celulosas, SA 410,177 5,584,346
Repsol, SA 120,000 5,117,731
------------
28,334,735
SWEDEN-2.1%
Assi Doman 182,000 4,611,550
Castellum AB 295,500 2,942,822
Sparbanken Sverige AB, Cl. A 250,000 5,688,485
------------
13,242,857
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SWITZERLAND-2.3%
Sairgroup Namen 10,995 $15,049,275
TRINIDAD & TOBAGO-0.5%
B.W.I.A. International Airways (a)(c) 2,727,272 2,999,999
TURKEY-1.5%
Efes Sinai Yatrim
Ordinary (a)(c) 13,438,261 950,948
Receipts (a)(c) 17,314,682 1,225,259
Eregli Demir Ve Celik Fabrikalari TAS 7,116,750 1,098,847
Petrokimya Holding AS 1,907,000 1,035,163
Tupras Turkiye Petrol Rafinerileri AS (a) 20,000,000 2,267,793
Turk Hava Yollari AO (a) 6,847,275 1,205,913
Usas Ucak Servisi AS 857,250 2,068,154
------------
9,852,077
UNITED KINGDOM-12.0%
Anglian Water Plc. 600,000 8,178,903
Birkby Plc. 930,000 2,436,180
British Energy Plc. Partially Paid 1,500,000 10,420,711
Energis Plc. 3,264,500 13,671,702
National Grid Holdings Plc. 1,000,000 4,746,392
National Power Plc. 660,000 6,503,706
Northern Ireland Electricity Plc. 700,000 6,099,867
Powergen Plc. 500,000 6,503,706
RJB Mining 300,000 625,735
Scottish Hydro Electric 600,000 4,946,758
Stagecoach Holdings Plc. 353,404 4,846,449
Wessex Water Plc. 942,246 7,938,663
------------
76,918,772
UNITED STATES-1.0%
Central European Media Enterprises, Ltd.
Cl. A 75,000 1,893,750
Near East International (a)(c) 10 1,000,000
United Telecommunications (c) 3,929,640
------------
6,823,390
VENEZUELA-0.5%
Compania Anonima Nacional Telefonos
de Venezuela (ADR) (a) 49,700 2,068,763
Mercantil Servicios Financieros (ADR) 75,000 1,079,700
------------
3,148,463
Total Common Stocks &Other Investments
(cost $533,499,735) 574,194,122
PREFERRED STOCKS-4.8%
BRAZIL-4.8%
Banco do Estado Sao Paulo, SA 52,000,000 2,119,977
Bardella Industrias Mecanicas, SA 20,786 2,234,954
Celesc Centrais Electricas de Santa
Catarina, SA Cl. B 4,182,133 5,208,696
Companhia Riograndense
de Telcom Cl. A 4,124,000 5,080,866
Receipts 5/97 191,091 236,970
Compania Paulista de Forca e Luz 9,309,598 959,279
Gerdau, SA 258,841,935 3,246,976
Gerdau Metalurgica SA 163,029,484 4,893,587
Iven, SA 8,614,000 4,901,116
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
Telecomunicacoes Brasileiras, SA 8,250,000 $ 941,020
Telepar Pfd 686,000 368,800
Trikem, SA 357,264,933 528,191
Total Preferred Stocks
(cost $26,596,379) 30,720,432
TIME DEPOSIT-5.5%
UNITED STATES-5.5%
Bank of Montreal
6.25%, 1/02/98
(cost $35,300,000) $3,530 35,300,000
TOTAL INVESTMENTS-99.8%
(cost $595,396,113) $640,214,554
Other assets less liabilities-0.2% 1,236,474
NET ASSETS-100% $641,451,028
(a) Non-income producing security.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31, 1997
these securities amounted to $31,108,443 or 4.8% of net assets.
(c) Illiquid security--valued at fair market value (See Note A).
Glossary of terms:
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
11
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $595,396,113) $640,214,554
Foreign cash, at value (cost $11,596,584) 11,239,308
Receivable for investment securities sold 46,025,427
Dividends and interest receivable 1,161,403
Foreign taxes receivable and other assets 652,321
Receivable for capital stock sold 540,469
Deferred organization expense 62,784
Total assets 699,896,266
LIABILITIES
Due to custodian 481,892
Payable for investment securities purchased 55,199,074
Payable for capital stock redeemed 1,257,093
Advisory fee payable 547,856
Distribution fee payable 258,245
Accrued commitment fees 8,440
Accrued expenses 692,638
Total liabilities 58,445,238
NET ASSETS $641,451,028
COMPOSITION OF NET ASSETS
Capital stock, at par $ 57,787
Additional paid-in capital 559,941,370
Accumulated net investment loss (90,468)
Accumulated net realized gain on investments and foreign
currency transactions 37,044,706
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities. 44,497,633
$641,451,028
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($480,188,858/
43,026,665 shares of capital stock issued and outstanding) $11.16
Sales charge--4.25% of public offering price .50
Maximum offering price $11.66
CLASS B SHARES
Net asset value and offering price per share ($138,142,072/
12,646,511 shares of capital stock issued and outstanding) $10.92
CLASS C SHARES
Net asset value and offering price per share ($21,894,586/
2,003,415 shares of capital stock issued and outstanding) $10.93
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,225,512 / 110,411 shares of capital stock issued
and outstanding) $11.10
See notes to financial statements.
12
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $467,573) $5,120,273
Interest 359,915 $ 5,480,188
EXPENSES
Advisory fee 3,551,221
Distribution fee - Class A 825,553
Distribution fee - Class B 703,042
Distribution fee - Class C 91,982
Custodian 725,339
Transfer agency 483,192
Printing 58,502
Administrative 47,805
Registration 44,832
Audit and legal 43,844
Amortization of organization expenses 22,270
Directors' fees 14,963
Miscellaneous 17,819
Total expenses 6,630,364
Net investment loss (1,150,176)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments 43,299,718
Net realized gain on foreign currency transactions 2,562,279
Net change in unrealized appreciation (depreciation) of:
Investments (72,525,041)
Foreign currency denominated assets and liabilities (953,717)
Net loss on investments and foreign currency transactions (27,616,761)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(28,766,937)
See notes to financial statements.
13
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1997 JUNE 30,
(UNAUDITED) 1997
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ (1,150,176) $ 7,957,893
Net realized gain on investments and foreign
currency transactions 45,861,997 117,497,900
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (73,478,758) 18,167,397
Net increase (decrease) in net assets
from operations (28,766,937) 143,623,190
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (7,099,536) (6,642,639)
Class B (1,696,385) (562,618)
Class C (237,218) (25,246)
Advisor Class (22,444) (2,150)
Net realized gain on investments
Class A (53,640,939) (62,883,647)
Class B (15,380,560) (9,986,472)
Class C (2,150,777) (448,021)
Advisor Class (135,664) (16,066)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 54,313,449 (124,954,030)
Total decrease (54,817,011) (61,897,699)
NET ASSETS
Beginning of year 696,268,039 758,165,738
End of period (undistributed net investment
income of $10,115,291 for the year ended
June 30, 1997) $641,451,028 $696,268,039
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Worldwide Privatization Fund, Inc. (the "Fund"), organized as a
Maryland corporation on March 16, 1994, is registered under the Investment
Company Act of 1940 as a non-diversified, open-end management investment
company. The Fund 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
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities in the
financial statements and amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities (other than foreign securities exchanges whose operations are
similar to those of the United States over-the-counter market) are generally
valued at the last reported sales price or if no sale occurred, at the mean of
the closing bid and asked prices on that day. Readily marketable securities
traded in the over-the-counter market, securities listed on a foreign
securities exchange whose operations are similar to the US over-the-counter
market, and securities listed on a national securities exchange whose primary
market is believed to be over-the-counter, are valued at the mean of the
current bid and asked prices. U.S. government and fixed income securities which
mature in 60 days or less are valued at amortized cost, unless this method does
not represent fair value. Securities for which current market quotations are
not readily available are valued at their fair value as determined in good
faith by, or in accordance with procedures adopted by, the Fund's Board of
Directors. Fixed income securities may be valued on the basis of prices
obtained from a pricing service when such prices are believed to reflect the
fair value of such securities.
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 quoted bid and asked price of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at rates of exchange
prevailing when earned or accured.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, currency gains and
losses realized between the trade and settlement dates on security transactions
and the difference between the amounts of interest recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. The Fund does
not isolate the effect of fluctuations in foreign currency exchange rates when
determining the gain or loss upon the sale or maturity of equity securities.
Net currency gains and losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of
unrealized appreciation of investments and foreign currency denominated assets
and liabilities.
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
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. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the shares of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisory Class shares have no distribution fees.
7. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded 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.
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 $47,805 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, 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 $316,171 for the six months ended December 31, 1997.
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 $69,667 from the sale of Class A shares and
$105,426 and $5,794 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B and Class C shares, respectively, for
the six months ended December 31, 1997. Brokerage commissions paid on
securities transactions for the six months ended December 31, 1997, amounted to
$858,853, 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
$6,213,770 and $414,554 for Class B and Class C shares,
16
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
respectively; such costs may be recovered from the Fund in future periods so
long as the Agreement is in effect. In accordance with the Agreement, there is
no provision for recovery of unreimbursed distribution costs, incurred by the
Distributor, beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $191,538,212 and $246,964,550,
respectively, for the six months ended December 31, 1997. There were no
purchases or sales of U.S. government or government agency obligations for the
six months ended December 31, 1997.
At December 31, 1997, the cost of securities for federal income tax purposes
was $640,214,554. Accordingly, gross unrealized appreciation of investments was
$123,352,109 and gross unrealized depreciation of investments was $78,533,668
resulting in net unrealized appreciation of $44,818,441 excluding foreign
currency transactions.
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 was 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 December 31, 1997, the Fund had no outstanding forward exchange currency
contracts.
NOTE E: BANK BORROWING
The Fund's Revolving Credit Agreement with The Bank of New York expired on
October 27, 1997. The maximum credit available was $20,000,000 and required no
collateralization. There was no loan outstanding during the six month ending
December 31, 1997. The Fund was obligated to pay The 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.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
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, 1997 JUNE 30, DEC. 31, 1997 JUNE 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ -------------- --------------
CLASS A
Shares sold 9,103,594 11,570,307 $ 113,128,239 $ 138,235,504
Shares issued in
reinvestment of
dividends and
distributions 2,624,337 2,573,137 28,474,056 27,867,077
Shares converted
from Class B 6,876 77,169 77,436 953,384
Shares redeemed (11,059,983) (27,315,452) (141,834,433) (329,157,216)
Net increase
(decrease) 674,824 (13,094,839) $ (154,702) $(162,101,251)
CLASS B
Shares sold 4,206,384 3,844,583 $ 52,551,125 $ 45,492,932
Shares issued in
reinvestment of
dividends and
distributions 267,042 361,705 2,838,658 3,863,013
Shares converted
to Class A (7,027) (78,087) (77,436) (953,384)
Shares redeemed (1,114,413) (1,777,739) (14,014,578) (21,130,378)
Net increase 3,351,986 2,350,462 $ 41,297,769 $ 27,272,183
CLASS C
Shares sold 4,640,492 921,243 $ 59,127,533 $ 11,138,227
Shares issued in
reinvestment of
dividends and
distributions 81,705 33,043 868,525 353,234
Shares redeemed (3,710,326) (162,024) (47,909,073) (1,962,355)
Net increase 1,011,871 792,262 $ 12,086,985 $ 9,529,106
SIX MONTHS OCTOBER 2, SIX MONTHS OCTOBER 2,
ENDED 1996(A) ENDED 1996(A)
DEC. 31, 1997 TO DEC. 31, 1997 TO
(UNAUDITED) JUNE 30,1997 (UNAUDITED) JUNE 30, 1997
------------- ------------ -------------- --------------
ADVISOR CLASS
Shares sold 89,727 26,710 $1,177,462 $329,652
Shares issued in
reinvestment of
dividends and
distributions -0- 1,656 -0- 17,869
Shares redeemed (7,550) (132) (94,065) (1,589)
Net increase 82,177 28,234 $1,083,397 $345,932
(a) Commencement of distribution.
18
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE G: CONCENTRATION OF RISK
Investing in securities of foreign companies involves special risks which
include revaluation of currency and future adverse political and economic
developments. Moreover, securities of many foreign companies and their markets
may be less liquid and their prices more volatile than those of comparable U.S.
companies. The Fund invests in securities issued by enterprises that are
undergoing, or that have undergone, privatization. Privatization is a process
through which the ownership and control of companies or assets in whole or in
part 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.
19
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)
1997 --------------------------------------- TO
(UNAUDITED) 1997 1996 1995 JUNE 30,1994
------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.26 $12.13 $10.18 $9.75 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.01)(b) .15(b) .10(b) .06 .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.55) 2.55 1.85 .37 (.26)
Net increase (decrease) in net asset
value from operations (.56) 2.70 1.95 .43 (.25)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.18) (.15) -0- -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.36) (1.42) -0- -0- -0-
Total dividends and distributions (1.54) (1.57) .00 .00 .00
Net asset value, end of period $11.16 $13.26 $12.13 $10.18 $9.75
TOTAL RETURN
Total investment return based on net
asset value(c) (3.89)% 25.16% 19.16% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $480,189 $561,793 $672,732 $13,535 $4,990
Ratio of expenses to average net assets 1.71%(d) 1.72% 1.87% 2.56% 2.75%(d)
Ratio of expenses to average net assets
excluding interest expense 1.71%(d) 1.71%(e) 1.85%(e) 2.56% 2.75%(d)
Ratio of net investment income to
average net assets (.15)%(d) 1.27% .95% .66% 1.03%(d)
Portfolio turnover rate 57% 48% 28% 36% -0-%
Average commission rate paid(f) $.0122 $.0132 -- -- --
</TABLE>
See footnote summary on page 23.
20
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)
1997 --------------------------------------- TO
(UNAUDITED) 1997 1996 1995 JUNE 30,1994
------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.04 $11.96 $10.10 $ 9.74 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.06)(b) .08(b) (.02)(b) .02 -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.55) 2.50 1.88 .34 (.26)
Net increase (decrease) in net asset
value from operations (.61) 2.58 1.86 .36 (.26)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.15) (.08) -0- -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.36) (1.42) -0- -0- -0-
Total dividends and distributions (1.51) (1.50) -0- -0- -0-
Net asset value, end of period $10.92 $13.04 $11.96 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on
net asset value(c) (4.36)% 24.34% 18.42% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $138,142 $121,173 $83,050 $79,359 $22,859
Ratio of expenses to average net assets 2.43%(d) 2.43% 2.83% 3.27% 3.45%(d)
Ratio of expenses to average net assets
excluding interest expense 2.43%(d) 2.42%(e) 2.82%(e) 3.27% 3.45%(d)
Ratio of net investment income (loss)
to average net assets (.92)%(d) .66% (.20)% .01% .33%(d)
Portfolio turnover rate 57% 48% 28% 36% -0-%
Average commission rate paid(f) $.0122 $.0132 -- -- --
</TABLE>
See footnote summary on page 23.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------
SIX MONTHS
ENDED FEBRUARY 8,
DECEMBER 31, YEAR ENDED JUNE 30, 1995(G)
1997 ------------------------- TO
(UNAUDITED) 1997 1996 JUNE 30,1995
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.04 $11.96 $10.10 $9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.06)(b) .12(b) .03(b) .05
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.54) 2.46 1.83 .52
Net increase (decrease) in net asset
value from operations (.60) 2.58 1.86 .57
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.15) (.08) -0- -0-
Distributions from net realized gains
on investments and foreign currency
transactions (1.36) (1.42) -0- -0-
Total dividends and distributions (1.51) (1.50) -0- -0-
Net asset value, end of period $10.93 $13.04 $11.96 $10.10
TOTAL RETURN
Total investment return based on
net asset value(c) (4.28)% 24.33% 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $21,895 $12,929 $2,383 $338
Ratio of expenses to average net assets 2.41%(d) 2.42% 2.57% 1.03%(d)
Ratio of expenses to average net assets
excluding interest expense 2.41%(d) 2.41%(e) 2.57% 1.03%(d)
Ratio of net investment income to
average net assets (.93)%(d) 1.06% .63% 1.04%(d)
Portfolio turnover rate 57% 48% 28% 36%
Average commission rate paid(f) $.0122 $.0132 -- --
</TABLE>
See footnote summary on page 23.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
---------------------------
SIX MONTHS
ENDED OCTOBER 2,
DECEMBER 31, 1996(G)
1997 TO
(UNAUDITED) JUNE 30, 1997
----------- --------------
Net asset value, beginning of period $13.23 $12.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b) -0- .18
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (.54) 2.52
Net increase (decrease) in net asset value
from operations (.54) 2.70
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.19)
Distributions from net realized gains on
investments and foreign currency transactions (1.36) (1.42)
Total dividends and distributions (1.59) (1.61)
Net asset value, end of period $11.10 $13.23
TOTAL RETURN
Total investment return based on net asset value(c) (3.78)% 25.24%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,226 $374
Ratio of expenses to average net assets(d) 1.43% 1.96%
Ratio of expenses to average net assets excluding
interest expense(d) 1.43% 1.95%(e)
Ratio of net investment income to average net
assets(d) (.01)% 2.97%
Portfolio turnover rate 57% 48%
Average commission rate paid $.0122 $.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% and .02% for Class A and .01% for Class B,
Class C and Adviser Class Shares, 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 U.S. dollars using the prevailing
exchange rate on the date of the transaction. Such conversions may materially
affect the rate shown.
(g) Commencement of distribution.
23
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 A. CORBET, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, 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.
24
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 Environment 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 Greater China '97 Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage 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
25
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.
WWPSR
