ALLIANCE WORLDWIDE PRIVATIZATION FUND
ANNUAL REPORT
JUNE 30, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
August 27, 1998
Dear Shareholder:
We are pleased to provide you with investment results and market commentary for
Alliance Worldwide Privatization Fund for the annual reporting period ended
June 30, 1998.
INVESTMENT RESULTS
The following table provides performance for Alliance Worldwide Privatization
Fund as well as its benchmarks, the Morgan Stanley Capital International (MSCI)
Europe, Australasia, Far East (EAFE) Index and the MSCI Emerging Markets Free
Index. For the six months ended June 30, 1998, your Fund's Class A shares
gained 13.53%, underperforming the MSCI EAFE Index return of 16.08%, but
substantially outperforming the MSCI Emerging Markets Free Index decline of
18.87%. Over the 12-month period ended June 30, 1998, your Fund's Class A
shares advanced 9.11%, outpacing both the MSCI EAFE Index and the MSCI Emerging
Markets Free Index returns, which respectively appreciated 6.38% and declined
39.08%. The significant outperformance of your Fund relative to the MSCI
Emerging Markets Free Index was mainly due to your Fund's relative
underweighting in Japan and overweighting in Europe.
INVESTMENT RESULTS*
Periods Ended June 30, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
--------- ---------
ALLIANCE WORLDWIDE PRIVATIZATION FUND
Class A 13.53% 9.11%
Class B 13.28% 8.34%
Class C 13.17% 8.34%
MSCI EAFE INDEX 16.08% 6.38%
MSCI EMERGING MARKETS FREE INDEX -18.87% -39.08%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIODS AND ARE
BASED ON THE NET ASSET VALUE OF THE FUND'S SHARES AS OF JUNE 30, 1998. ALL FEES
AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED. TOTAL
RETURNS FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT EXPENSES
ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA, AND FAR
EAST (EAFE) INDEX TRACKS THE PERFORMANCE OF MARKETS IN THOSE REGIONS. THE MSCI
EMERGING MARKETS FREE INDEX TRACKS THE PERFORMANCE OF 26 EMERGING MARKETS. AN
INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
ADDITIONAL INVESTMENT RESULTS CAN BE FOUND ON PAGE 3.
ECONOMIC AND MARKET REVIEW
The first half of 1998 has seen dramatic diversity in performance from various
regions of the world. Europe has been particularly strong as investors have
become increasingly enthusiastic about the prospects for European Monetary
Union and a discernible change in savings habits has resulted in a shift
towards equity ownership by individuals in the region.
Asia, however, has remained in the doldrums. The financial crisis enveloping
the region has shown little sign of coming to an end and it is hard to envisage
a significant improvement without some sort of economic recovery in Japan,
which remains tardy in resolving the problems inside its banking system. The
key to a significant upturn in these markets will be Asian governments'
reaction to the current crisis. We believe that there is no alternative but for
governments to withdraw further from the economy and that the key to economic
revival will be privatization. We currently see a continued flow of deals from
China but the rest of the Asian region has been slow to grasp this key point.
We believe that it is only with privatization and liberalization that the
region can see brighter prospects for the future.
The contagion effect from the Asia crisis has affected both Eastern Europe and
Latin America as investors have become concerned over currency and equity
market levels. Looking forward, we currently find some excellent values in
privatization issues in these areas, although we are more sanguine about
opportunities in South East Asia.
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT OUTLOOK
In this volatile market environment, privatization issues have continued at a
high level. We currently anticipate more than US$100 billion of privatization
initial public offerings (IPOs) and secondary offerings over the course of
1998. We believe it is significant that market volatility has not dampened the
desire by governments to privatize and we look forward to a significant
increase in the number of transactions over the next 12 months.
On an industry basis, privatizations have continued to be dominated by telecoms
and utility transactions. However, there remains a noticeable expansion in
terms of industry representation and geographical spread. We look forward to
this trend continuing in the future, and we anticipate further opportunities to
broaden your Portfolio's industry and geographical spread.
We are confident that privatizations will continue to offer one of the most
attractive ways to gain exposure to global investment opportunities and the
themes of deregulation and restructuring.
Thank you for your continued interest and participation in Alliance Worldwide
Privatization Fund. We look forward to reporting to you again on market
activity and your Fund's investment results in 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
_______________________________________________________________________________
The 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
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF JUNE 30, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 9.11% 4.46%
Since Inception* 13.17% 11.98%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 8.34% 4.54%
Since Inception* 12.40% 12.40%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 8.34% 7.39%
Since Inception* 16.75% 16.75%
The Fund's investment results represent Average Annual Total Returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) 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 returns 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.
* Since Inception: 6/2/94 Class A & Class B; 2/8/95 Class C.
3
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ALLIANCE WORLDWIDE PRIVATIZATION FUND
GROWTH OF A $10,000 INVESTMENT
6/30/94* TO 6/30/98
ALLIANCE WORLDWIDE PRIVATIZATION FUND CLASS A: $16,273
MSCIEAFE: $13,945
MSCIEMF: $7,454
$16,000
$13,000
$10,000
$7,000
6/30/94 6/30/95 6/30/96 6/30/97 6/30/98
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Worldwide Privatization Fund Class A shares (from 6/30/94 to 6/30/98)
as compared to the performance of an appropriate broad-based index. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B, Class C and Advisor Class shares will
vary from the results shown above due to differences in expenses 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 21
countries in Europe, Australasia, 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 26 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
* Closest month-end after Fund's Class A share inception date of 6/2/94.
4
TEN LARGEST HOLDINGS
JUNE 30, 1998 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Akzo Nobel NV--Produces chemicals, paints,
drugs, veterinary products, hospital supplies
and diagnostics. $ 20,026,400 3.1%
Energis Plc.--Provides broadband national and
international communications services. 19,455,046 3.0
Viag AG--Provides electrical power and natural
gas services, packaging, chemicals and
logistics services. 16,919,535 2.6
ING Groep NV--Provides financial services including
commercial, savings and investment banking, as
well as life, property and commercial insurance. 16,693,706 2.5
Bank Austria AG--(preferred stocks and rights)--
Provides commercial and corporate banking
services and financial services. 16,258,577 2.5
Austria Tabakwerke AG--Manufactures
cigarettes, cigars, chewing tobacco and other
tobacco products. 15,713,491 2.4
SGS-Thomson Microelectronics NV--Designs,
develops, manufactures and markets semiconductor
integrated circuits and discrete devices. 14,185,219 2.2
Commonwealth Serum Lab., Ltd.--Develops,
manufactures, and markets human and veterinary
pharmaceutical and diagnostic products. 13,436,050 2.0
British Energy Plc.--Generates and sells
electricity in England and Scotland. 13,148,888 2.0
Telecomunicacoes Brasileiras, SA--(ADR)--Provides
domestic and international telephone and data
transmission services throughout Brazil. 12,392,781 1.9
$158,229,693 24.2%
5
INDUSTRY DIVERSIFICATION
JUNE 30, 1998 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Basic Industries $ 51,402,969 7.9%
Capital Goods 3,429,231 0.5
Consumer Manufacturing 18,265,164 2.8
Consumer Services 58,740,344 9.0
Consumer Staples 56,870,556 8.7
Energy 39,019,671 6.0
Finance 155,183,611 23.8
Healthcare 48,514,981 7.4
Multi-Industry 10,870,800 1.7
Technology 39,160,230 6.0
Transportation 15,224,689 2.3
Utilities 155,988,248 23.9
Total Investments 652,670,494 100.0
Cash and receivables, net of liabilities (12,037) (0.0)
Net Assets $652,658,457 100.0%
6
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-93.4%
ARGENTINA-0.6%
Nortel Inversora, SA (ADR) 98,000 $ 2,437,750
Telecom Argentina, SA (ADR) 53,300 1,589,006
------------
4,026,756
AUSTRALIA-4.1%
Amrad Corporation, Ltd. (a) 2,000,000 2,420,925
Commonwealth Serum Lab, Ltd. 2,071,279 13,436,050
GIO Australia Holdings, Ltd. 2,000,000 5,144,776
Tab Corp Holdings, Ltd. 1,000,000 5,121,187
Tab, Ltd. (a) 359,600 531,268
------------
26,654,206
AUSTRIA-4.0%
Austria Mikro Systeme International AG 60,000 4,068,584
Austria Tabakwerke AG 281,877 15,713,491
Bank Austria AG Rts. (a) 200,000 9
Boehler-Uddeholm AG 40,000 2,646,157
Premier Telesports (a)(b) 85,000 1,541,489
Voest-Alpine Stahl AG 60,000 2,408,034
------------
26,377,764
BELGIUM-0.9%
Credit Communal Holding Dexia 38,000 5,724,185
BOTSWANA-0.4%
Sechaba Breweries, Ltd. 1,750,700 2,320,334
BRAZIL-3.4%
Celesc Centrais Electricas
de Santa Catarina, SA (GDR) (c) 13,000 975,000
Companhia Energetica de Minas Gerais (ADR) 63,636 1,969,687
Companhia Paranaense de Energia (ADR) 75,000 693,750
Comphania Paulista de Forca e Luz 25,091,000 2,560,191
Espirito Santo Centrais Electricas, SA 6,247 367,296
Gerdau Metalurgica, SA (b) 10,044,305 239,698
Light Particpacoes, SA 7,125,900 2,526
Multicanal Participacoes (ADR) (a) 114,900 567,319
Petroleo Brasileros, SA
(ADR) 40,000 740,000
(ADR) (c) 26,500 490,250
Telecomunicacoes Brasileiras, SA (ADR) 113,500 12,392,781
Unibanco (GDR) 29,600 873,200
------------
21,871,698
COLOMBIA-0.1%
Banco de Colombia (GDR) (c) 125,000 558,750
CZECH REPUBLIC-2.1%
Ceske Radiokomunikace, AS (a) 20,000 3,803,973
New Shares (a) 72,557 1,168,569
Czech Power Company (GDR) (c) 44,000 1,217,515
Komercni Banka AS (GDR) (a) 424,900 5,374,985
Podnik Vypocetni Techniky (a) 13,000 1,053,240
Tabak AS 4,525 1,091,913
------------
13,710,195
EGYPT-0.9%
Commercial International Bank (GDR) 131,869 1,430,779
Egyptian Financial and Industrial 33,200 710,473
Housing Development Bank 38,000 902,866
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Madinet Nasr City for Housing & Development 30,000 $ 1,435,691
Torrah Portland Cement 69,500 1,196,959
------------
5,676,768
FINLAND-1.4%
Merita PLC, Series A 828,000 5,472,279
Outokumpu Oy Cl. A 300,000 3,833,969
------------
9,306,248
FRANCE-9.3%
Sanofi, SA 100,000 11,768,601
Seita 270,000 12,245,303
SGS-Thomson Microelectronics NV (a) 200,000 14,185,219
Societe Generale 30,000 6,241,827
Societe National Elf Aquitaine 80,000 11,255,483
Union Assurances Federales 30,000 4,732,268
------------
60,428,701
GERMANY-4.4%
BHW Holding AG 225,350 3,894,074
Salzgitter AG 172,000 2,261,337
Viag AG 25,000 16,919,535
Volkswagen AG 6,000 5,774,832
------------
28,849,778
GHANA-0.5%
Social Security Bank, Ltd. (a) 3,000,000 3,362,680
GREECE-2.1%
Commercial Bank of Greece 50,000 3,710,424
Hellenic Petroleum, SA (a) 258,000 2,107,988
Hellenic Telecommunication Organization, SA 144,444 3,704,396
National Bank Of Greece 15,780 2,022,937
STET Hellas Telecommunications, SA (a) 26,870 1,110,649
(ADR) (a) 26,870 1,115,105
------------
13,771,499
HONG KONG-0.1%
The Guangshen Railway Co., Ltd. (ADR) 69,100 470,744
HUNGARY-1.1%
Inter-Europa Bank Rts. 9,490 581,782
MOL Magyar Olaj-es Gazipari 150,000 4,048,861
OTP Bank (GDR) 50,000 2,455,000
------------
7,085,643
INDIA-1.2%
Industrial Credit & Investment
Corporation of India, Ltd. (GDR) (c) 287,900 2,943,777
Mahanagar Telephone Nigam, Ltd. (GDR) 139,700 1,463,358
State Bank of India (GDR) (a)(c) 45,000 533,250
Videsh Sanchar Nigam, Ltd. (GDR) (a)(c) 296,200 3,169,340
------------
8,109,725
INDONESIA-0.2%
PT Tambang Timah (GDR) 323,000 1,437,350
ISRAEL-0.8%
Bank Hapoalim, Ltd. 1,073,300 3,247,460
Tadiran, Ltd. (ADR) 52,500 1,739,062
------------
4,986,522
ITALY-4.7%
Alitalia SpA (a) 1,410,400 4,526,466
Eni SpA 1,000,000 6,559,460
Instituto Mobilaire Italiano SpA 400,000 6,306,090
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Instituto Nazionale delle Azzicurazioni 1,600,000 $ 4,549,393
Telecom Italia Mobile di Risp SpA 1,500,000 5,067,394
Telecom Italia SpA 813,953 3,943,595
------------
30,952,398
JAPAN-5.6%
Daiwa Securities Co., Ltd. 2,050,000 8,859,169
East Japan Railway Co. 610 2,879,004
Japan Tobacco, Inc. 1,631 11,086,243
Nippon Telegraph & Telephone, Corp. 900 7,492,128
Nomura Securities Co., Ltd. 520,000 6,079,120
------------
36,395,664
JORDAN-0.3%
Arab Potash Co. 217,433 1,828,761
KENYA-0.1%
Kenya Airways (a) 4,650,000 550,874
MALAWI-0.2%
Press Corp. (GDR) (b) 94,000 997,340
MALAYSIA-0.3%
Telekom Malaysia Berhad 1,000,000 1,686,645
MALTA-0.2%
Maltacom Plc. (GDR) (a) 86,000 1,225,500
MEXICO-1.5%
Alfa, SA 251,200 1,020,456
Grupo Financiero Banamex Cl. B (a) 1,178,500 2,295,353
Grupo Financiero Bancrecer, SA de CV
Cl. B (a)(b) 2,140,843 71,481
Grupo Financiero Banorte, SA de CV
Cl. B (a) 3,299,677 3,672,429
Grupo Minsa, SA de CV
Cl. C (a) 449,700 221,722
Grupo Profesional Planeacion Y Proyectos,
SA Cl. B (a)(b) 129,000 297,195
Telefonos de Mexico, SA Cl. L (ADR) 33,200 1,595,675
Tubos de Acero de Mexico, SA (ADR) 70,000 896,875
------------
10,071,186
NETHERLANDS-5.6%
Akzo Nobel NV 90,000 20,026,400
ING Groep NV 254,694 16,693,706
------------
36,720,106
NEW ZEALAND-0.1%
Tranz Rail Holdings, Ltd. 268,000 613,597
NORWAY-0.8%
Christiana Bank OG Kreditkasse 600,000 2,520,469
Den Norske Bank 500,000 2,630,397
------------
5,150,866
PAKISTAN-0.1%
Hub Power Co., Ltd. (GDR) 75,000 515,625
PEOPLES REPUBLIC OF CHINA-1.0%
Beijing Datang Power 6,285,800 1,764,535
Yanzhou Coal Mining Co., Ltd. Cl. H (a) 6,698,000 1,279,432
Zhejiang Southeast Electric Power Co.,
Ltd. (GDR) (c) 249,200 3,451,420
------------
6,495,387
PERU-1.4%
Cementos Norte
Pacasmayo SA Cl. C 1,661,620 2,658,592
Cl. T 330,606 528,969
Explosivos, SA Cl. C (a)(b) 1,218,398 1,348,015
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Fereyos, SA 1,091,012 $ 1,470,777
Ontario Quinta AVV (b) 2,000,000 3,360,000
------------
9,366,353
PHILIPPINES-1.5%
First Philippine Holdings Corp. Series B 2,779,672 1,866,446
International Container
Terminal Services, Inc. (a) 4,877,187 555,555
Manila Electric Co. Series B 2,053,305 5,416,392
Philippine Long Distance Telephone Co. 94,200 2,146,043
------------
9,984,436
POLAND-1.5%
Bank Polska Kasa Opieki Grupa Pekao, SA (a) 130,600 2,059,937
Bank Przemyslowo Handlowy 20,000 1,433,897
Elektrim, SA 200,000 2,437,625
Kredyt Bank, SA (GDR) (a)(c) 100,000 1,870,000
Orbis, SA (a) 224,386 1,994,828
------------
9,796,287
PORTUGAL-1.3%
Electricidade de Portugal, SA 351,400 8,177,929
TVI Televisao Independiente (a)(b) 169,000 -0-
------------
8,177,929
ROMANIA-0.1%
Societatea, SA (b) 30,454 350,429
RUSSIA-2.1%
Gazprom (ADR) (c) 100,000 1,107,500
JSC Rosneftegazstroy (ADR) (a) 184,202 899,219
Lukoil Holding (ADR) 150,000 4,987,500
Nearmedic Ltd. (a)(b) 1,522,600 1,800,822
Sberbank of Russia 27,493 2,639,328
Sun Brewing (GDR) (a)(c) 156,000 2,106,000
------------
13,540,369
SLOVAKIA-0.1%
Slovakofarma AS (GDR) 156,200 863,005
SOUTH AFRICA-0.8%
South African Iron & Steel (a) 29,329,133 5,539,398
SOUTH KOREA-1.5%
Korea Electric Power Corp. 85,390 911,117
(ADR) 138,600 987,525
Korean Air Lines 35,912 92,592
Pohang Iron & Steel Co., Ltd. 7,280 242,758
(ADR) 169,800 2,037,600
SK Telecom Co., Ltd. 11,970 5,783,611
(ADR) 8,480 47,170
------------
10,102,373
SPAIN-5.9%
Aceralia, SA 600,000 9,018,550
Aldeasa, SA 200,000 7,123,347
Empresa Nacional de Celulosas, SA 300,000 5,293,497
Repsol, SA 90,000 4,958,242
Tabacalera, SA Cl. A 285,000 5,848,334
Telefonica de Espana, SA 140,000 6,486,821
------------
38,728,791
SWEDEN-2.5%
Assi Doman AB 182,000 5,297,590
Castellum AB 295,500 3,485,012
Diligentia AB 142,800 1,236,221
Mandamus AB (a) 10,000 62,732
Sparbanken Sverige AB, Cl. A 200,000 6,022,269
------------
16,103,824
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SWITZERLAND-1.7%
Sairgroup 33,925 $11,179,142
THAILAND-0.3%
PTT Exploration & Production
Public Co., Ltd. (a) 301,000 2,282,464
TRINIDAD & TOBAGO-0.2%
B.W.I.A. International Airways (a)(b) 2,727,272 1,500,000
TURKEY-2.4%
Efes Sinai Yatrim Ordinary (a) 30,752,943 6,237,217
Eregli Demir Ve Celik Fabrikalari TAS (a) 7,116,750 1,109,277
Petrokimya Holding AS 1,907,000 1,038,554
Tupras Turkiye Petrol Rafinerileri AS (a) 20,000,000 3,230,047
Turkiye Is Bankasi Series C 49,700,000 2,006,667
Usas Ucak Servisi AS 857,250 2,028,422
------------
15,650,184
UNITED KINGDOM-10.8%
Anglian Water Plc. 300,000 4,207,644
Birkby Plc. 930,000 2,375,816
British Energy Plc. 1,500,000 13,148,888
Energis Plc. (a) 1,276,800 19,455,046
Mersey Docks & Harbour Co. 513,550 4,874,742
National Grid Holdings Plc. 850,000 5,738,008
National Power Plc. 660,000 6,215,291
Powergen Plc. 256,436 3,545,257
RJB Mining 300,000 611,110
Stagecoach Holdings Plc. 300,000 6,386,603
Wessex Water Plc. 500,000 3,806,916
------------
70,365,321
UNITED STATES-1.0%
Central European Media Enterprises, Ltd.
Cl. A (a) 75,000 1,621,875
Near East International (a)(b) 10 1,000,000
United Customer Management Solutions (b) 17,862 3,929,640
------------
6,551,515
VENEZUELA-0.2%
Compania Anonima Nacional Telefonos
de Venezuela (ADR) 49,700 1,242,500
Mercantil Servicios Financieros (ADR) 75,000 379,634
------------
1,622,134
Total Common Stocks & Other Investments
(cost $523,193,181) 609,637,449
PREFERRED STOCKS-6.6%
AUSTRIA-2.5%
Bank Austria AG 200,000 16,258,568
BRAZIL-4.1%
Banco Estado de Sao Paulo, SA 38,000,000 1,758,143
Bardella Industrias Mecanicas, SA 20,786 2,111,579
Celesc Centrais Electricas de Santa
Catarina, SA Cl. B 3,882,133 2,953,852
Companhia Riograndense de Telcom Cl. A 4,494,619 4,900,536
Compania Paulista de Forca e Luz
Receipts 4/98 176,463 13,732
Eletropaulo Metropolitana 12,114,030 911,262
Empresa Bandeirante de Energia, SA (a) 12,114,030 191,679
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Empresa Metropolitana
de Aguas e Energie, SA (a) 12,114,030 $ 9,427
Empresa Paulista de
Transmissao de Energia Eletrica, SA 12,114,030 42,840
Gerdau, SA 260,841,935 3,608,552
Gerdau Metalurgica, SA 163,029,484 5,212,771
Iven, SA (b) 8,614,000 4,316,124
Telepar Pfd. 686,000 172,012
Telepar Cellular Pfd. (a) 686,000 62,274
Trikem, SA (a) 357,264,933 509,694
------------
26,774,477
Total Preferred Stocks
(cost $37,664,972) 43,033,045
TOTAL INVESTMENTS-100.0%
(cost $560,858,153) 652,670,494
Other assets less liabilities-(0.0)% (12,037)
NET ASSETS-100% $652,658,457
(a) Non-income producing security.
(b) Restricted and illiquid security, valued at fair value. (See notes A & G.)
(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, 1998
these securities amounted to $18,422,802 or 2.8% of net assets.
Glossary of terms:
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
12
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $560,858,153) $652,670,494
Foreign cash, at value (cost $4,475,933) 4,462,587
Dividends and interest receivable 2,482,028
Foreign taxes receivable 1,077,859
Receivable for capital stock sold 1,031,508
Receivable for investment securities and foreign currency sold 762,414
Deferred organization expense 40,877
Total assets 662,527,767
LIABILITIES
Due to custodian 1,348,300
Payable for capital stock redeemed 5,166,783
Payable for investment securities and foreign currency purchased 1,951,476
Advisory fee payable 422,477
Distribution fee payable 270,068
Accrued expenses 710,206
Total liabilities 9,869,310
NET ASSETS $652,658,457
COMPOSITION OF NET ASSETS
Capital stock, at par $ 51,853
Additional paid-in capital 485,040,650
Undistributed net investment income 14,037,753
Accumulated net realized gain on investments and foreign
currency transactions 61,793,873
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 91,734,328
$652,658,457
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($467,959,963/
36,920,811 shares of capital stock issued and outstanding) $12.67
Sales Charge--4.25% of public offering price .56
Maximum offering price $13.23
CLASS B SHARES
Net asset value and offering price per share ($156,347,781/
12,643,069 shares of capital stock issued and outstanding) $12.37
CLASS C SHARES
Net asset value and offering price per share ($26,634,959/
2,153,054 shares of capital stock issued and outstanding) $12.37
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,715,754/135,870 shares of capital stock issued and
outstanding) $12.63
See notes to financial statements.
13
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1998 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $1,729,836) $17,028,700
Interest 661,160 $17,689,860
EXPENSES
Advisory fee 6,894,591
Distribution fee - Class A 1,560,842
Distribution fee - Class B 1,460,673
Distribution fee - Class C 219,003
Custodian 1,464,677
Transfer agency 1,030,440
Printing 127,052
Administrative 109,342
Audit and legal 80,285
Registration 78,998
Amortization of organization expenses 44,176
Directors' fees 34,057
Miscellaneous 18,739
Total expenses before interest 13,122,875
Interest expense 23,810
Total expenses 13,146,685
Net investment income 4,543,175
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments 75,856,870
Net realized gain on foreign currency transactions 3,175,334
Net change in unrealized appreciation (depreciation) of:
Investments (25,531,141)
Foreign currency denominated assets and liabilities (710,925)
Net gain on investments and foreign currency transactions 52,790,138
NET INCREASE IN NET ASSETS FROM OPERATIONS $57,333,313
See notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1998 1997
------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 4,543,175 $ 7,957,893
Net realized gain on investments and foreign
currency transactions 79,032,204 117,497,900
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (26,242,066) 18,167,397
Net increase in net assets from operations 57,333,313 143,623,190
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (7,099,073) (6,642,639)
Class B (1,695,396) (562,618)
Class C (237,218) (25,246)
Advisor Class (22,444) (2,150)
Net realized gain on investments
Class A (53,637,469) (62,883,647)
Class B (15,371,652) (9,986,472)
Class C (2,150,777) (448,021)
Advisor Class (135,664) (16,066)
CAPITAL STOCK TRANSACTIONS
Net decrease (20,593,202) (124,954,030)
Total decrease in net assets (43,609,582) (61,897,699)
NET ASSETS
Beginning of year 696,268,039 758,165,738
End of year (including undistributed net
investment income of $14,037,753
and $10,115,291, respectively) $652,658,457 $ 696,268,039
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 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 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 and to certain retirement plan accounts. 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 exchange (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 price 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 U.S.
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 price. 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
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 market 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 accrued.
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.
16
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 any, 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.
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,
primarily due to foreign currency gains and passive foreign investment company
adjustments, resulted in a net increase in undistributed net investment income
and a corresponding decrease in accumulated net realized gain on investments
and foreign currency transactions. This reclassification 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 $109,342 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, 1998.
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 $659,710 for the year ended June 30, 1998.
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 $79,491 from the sale of Class A shares and
$257, $273,885 and $17,603 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the year ended June 30, 1998. Brokerage commissions paid on
investment transactions for the year ended June 30, 1998, amounted to
$1,667,217, of which $360 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
17
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
distribution assistance and promotional activities. The Distributor has
incurred expenses in excess of the distribution costs reimbursed by the Fund in
the amount of $6,609,791 and $537,949 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.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $353,726,996 and $440,783,356,
respectively, for the year ended June 30, 1998. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
June 30, 1998.
At June 30, 1998, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes. Gross
unrealized appreciation of investments was $168,159,118 and gross unrealized
depreciation of investments was $76,346,777 resulting in net unrealized
appreciation of $91,812,341, excluding foreign currency transactions.
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.
At June 30, 1998, the Fund had no outstanding forward exchange currency
contracts.
NOTE E: 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,
1998 1997 1998 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 39,736,256 11,570,307 $ 492,815,245 $ 138,235,504
Shares issued in
reinvestment of
dividends and
distributions 2,835,212 2,573,137 30,762,050 27,867,077
Shares converted
from Class B 10,886 77,169 137,149 953,384
Shares redeemed (48,013,384) (27,315,452) (601,039,158) (329,157,216)
Net decrease (5,431,030) (13,094,839) $ (77,324,714) $(162,101,251)
18
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SHARES AMOUNT
-------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998 1997 1998 1997
------------ ------------ -------------- --------------
CLASS B
Shares sold 5,439,686 3,844,583 $ 68,476,803 $ 45,492,932
Shares issued in
reinvestment of
dividends and
distributions 814,878 361,705 8,662,153 3,863,013
Shares converted
to Class A (11,023) (78,087) (137,114) (953,384)
Shares redeemed (2,894,997) (1,777,739) (35,371,129) (21,130,378)
Net increase 3,348,544 2,350,462 $ 41,630,713 $ 27,272,183
CLASS C
Shares sold 9,900,745 921,243 $ 123,043,119 $ 11,138,227
Shares issued in
reinvestment of
dividends and
distributions 142,928 33,043 1,519,326 353,234
Shares redeemed (8,882,163) (162,024) (110,861,845) (1,962,355)
Net increase 1,161,510 792,262 $ 13,700,600 $ 9,529,106
YEAR ENDED OCT. 2,1996(A) YEAR ENDED OCT. 2,1996(A)
JUNE 30, TO JUNE 30, TO
1998 JUNE 30,1997 1998 JUNE 30, 1997
------------ ------------ -------------- --------------
ADVISOR CLASS
Shares sold 112,659 26,710 $ 1,479,232 $ 329,652
Shares issued in
reinvestment of
dividends and
distributions 12,770 1,656 137,919 17,869
Shares redeemed (17,793) (132) (216,952) (1,589)
Net increase 107,636 28,234 $ 1,400,199 $ 345,932
NOTE F: 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.
(a) Commencement of distribution.
19
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
NOTE G: RESTRICTED AND ILLIQUID SECURITIES
DATE ACQUIRED U.S. $ COST
- -------------------------------------------------------------------------------
B.W.I.A. International Airways 2/21/95 $2,999,999
Explosivos, SA Cl. C 11/17/94 2,125,514
Gerdau Metalurgica, SA 10/11/94-2/20/97 109,841
Grupo Financiero Bancrecer, SA de CV Cl. B 6/08/94-6/24/96 1,597,078
Grupo Profesional Planeacion Y Proyectos,
SA Cl. B 6/10/94-10/28/94 1,067,729
Iven, SA 7/11/95-8/20/96 4,127,657
Near East International 9/29/95 1,000,000
Nearmedic Ltd. 3/18/96-5/20/97 2,252,799
Ontario Quinta AVV 8/15/94 2,052,257
Premier Telesports 5/11/98-5/19/98 1,918,417
Press Corp. (GDR) 3/10/98 997,340
Societatea, SA 11/15/94-8/30/94 512,631
TVI Televisao Independiente 10/21/97 -0-
United Customer Management Solutions 11/25/95 1,934,400
The securities shown above are restricted as to resale and have been valued at
fair value in accordance with the procedures described in Note A. The Fund will
not bear any costs, including those involved in registration under the
Securities Act of 1933, in connection with the disposition of these securities.
The value of these securities at June 30, 1998 was $20,752,233 representing
3.2% of total net assets.
NOTE H: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility") to
provide for short-term financing if necessary in connection with abnormal
redemption activity. Commitment fees related to the Facility are paid by the
participating funds and are included in the miscellaneous expenses in the
statement of operations. During the year ended June 30, 1998, the Fund had
borrowings outstanding for 14 days and the weighted average interest on such
borrowings was 5.99%. The Fund had no borrowings outstanding on June 30, 1998.
20
FINANCIAL HIGHLIGHTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
YEAR ENDED JUNE 30, JUNE 2,1994(A)
-------------------------------------------------- TO
1998 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 .10(b) .15(b) .10(b) .06 .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .85 2.55 1.85 .37 (.26)
Net increase (decrease) in net asset
value from operations .95 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 $12.67 $13.26 $12.13 $10.18 $ 9.75
TOTAL RETURN
Total investment return based on net
asset value(c) 9.11% 25.16% 19.16% 4.41% (2.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $467,960 $561,793 $672,732 $13,535 $4,990
Ratio of expenses to average net assets 1.73% 1.72% 1.87% 2.56% 2.75%(d)
Ratio of expenses to average net assets
excluding interest expense 1.73% 1.71% 1.85% 2.56% 2.75%(d)
Ratio of net investment income to
average net assets .80% 1.27% .95% .66% 1.03%(d)
Portfolio turnover rate 53% 48% 28% 36% -0-%
</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
-----------------------------------------------------------------
YEAR ENDED JUNE 30, JUNE 2,1994(A)
-------------------------------------------------- TO
1998 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) .02(b) .08(b) (.02)(b) .02 -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .82 2.50 1.88 .34 (.26)
Net increase (decrease) in net asset
value from operations .84 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 $12.37 $13.04 $11.96 $10.10 $ 9.74
TOTAL RETURN
Total investment return based on net
asset value(c) 8.34% 24.34% 18.42% 3.70% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $156,348 $121,173 $83,050 $79,359 $22,859
Ratio of expenses to average net assets 2.45% 2.43% 2.83% 3.27% 3.45%(d)
Ratio of expenses to average net assets
excluding interest expense 2.45% 2.42% 2.82% 3.27% 3.45%(d)
Ratio of net investment income (loss) to
average net assets .20% .66% (.20)% .01% .33%(d)
Portfolio turnover rate 53% 48% 28% 36% -0-%
</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
----------------------------------------------------
FEBRUARY 8,
YEAR ENDED JUNE 30, 1995(E)
------------------------------------- TO
1998 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 .05(b) .12(b) .03(b) .05
Net realized and unrealized gain on
investments and foreign currency
transactions .79 2.46 1.83 .52
Net increase in net asset value from
operations .84 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 $12.37 $13.04 $11.96 $10.10
TOTAL RETURN
Total investment return based on net
asset value(c) 8.34% 24.33% 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $26,635 $12,929 $2,383 $338
Ratio of expenses to average net assets 2.44% 2.42% 2.57% 1.03%(d)
Ratio of expenses to average net assets
excluding interest expense 2.44% 2.41% 2.57% 1.03%(d)
Ratio of net investment income to
average net assets .38% 1.06% .63% 1.04%(d)
Portfolio turnover rate 53% 48% 28% 36%
</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,
YEAR ENDED 1996(E)
JUNE 30, TO
1998 JUNE 30, 1997
---------- -------------
Net asset value, beginning of period $13.23 $12.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .19 .18
Net realized and unrealized gain on investments
and foreign currency transactions .80 2.52
Net increase in net asset value from operations .99 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 $12.63 $13.23
TOTAL RETURN
Total investment return based on net asset value(c) 9.48% 25.24%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,716 $374
Ratio of expenses to average net assets 1.45% 1.96%(d)
Ratio of expenses to average net assets excluding
interest expense 1.45% 1.95%(d)
Ratio of net investment income to average net assets 1.48% 2.97%(d)
Portfolio turnover rate 53% 48%
(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) 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, 1998, the result of its operations for the
year then ended, the changes in its net assets for each of the two years then
ended and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting priciples. 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, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
August 17, 1998
TAX INFORMATION (UNAUDITED)
_______________________________________________________________________________
In order to meet certain requirements of the Internal Revenue Code we are
advising you that $41,414,314 and $13,787,297 of the capital gain distributions
paid by the fund during the fiscal year June 30, 1998 are subject to maximum
tax rates of 28% and 20% respectively.
In addition, the Fund intends to make an election under Internal Revenue Code
Section 853 to pass through foreign taxes paid by the Fund to its shareholders.
The total amount of foreign taxes that may be passed through to the
shareholders for the fiscal year ended June 30, 1998 is $1,920,073. The gross
foreign source income for information reporting purposes is $19,419,696.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 1999.
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 A. CORBET, SENIOR VICE PRESIDENT
DANIEL V. PANKER, 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
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036
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 Environment 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 Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth 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
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
