- --------------------------------------------------------------------------------
Alliance
------------------------------
Worldwide
------------------------------
Privatization
------------------------------
Fund
------------------------------
Semi-Annual
Report
December 31, 1998
Alliance Capital [LOGO]
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<PAGE>
LETTER TO SHAREHOLDERS Alliance Worldwide Privatization Fund
================================================================================
February 24, 1999
Dear Shareholder:
We are pleased to provide you with investment results and market commentary for
Alliance Worldwide Privatization Fund for the semi-annual reporting period ended
December 31, 1998.
INVESTMENT RESULTS
The following table provides performance for Alliance Worldwide Privatization
Fund as well as its composite benchmark, a 60%/40% composite of the Morgan
Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) index
and the MSCI Emerging Markets Free (EMF) Index, respectively. This composite
benchmark approximates the normal allocation of the Fund's portfolio between
developed and emerging markets. For reference, we have also included performance
for each index separately.
As shown, your Fund's Class A shares returned -4.06% at net asset value (NAV),
underperforming the composite return of -1.00% for the six-month period ended
December 31, 1998. However, your Fund's Class A shares gained 8.92% at NAV,
outperforming the benchmark return of 2.06% for the 1998 calendar year. Your
Fund's performance, relative to its composite benchmark, was negatively impacted
by its strong relative weighting in emerging market stocks. However, performance
of the Fund did benefit from relative underweighting in Japan and overweighting
in Europe. Stock selection continued to positively impact performance across all
regions.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS*
Periods Ended December 31, 1998
Total Returns
6 Months 12 Months
------------- -------------
Alliance Worldwide
Privatization Fund
Class A -4.06% 8.92%
Class B -4.44% 8.25%
Class C -4.44% 8.15%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Returns
6 Months 12 Months
------------- -------------
Morgan Stanley
Capital International
(MSCI) Europe,
Australasia, Far
East (EAFE) Index 3.66% 20.33%
MSCI Emerging
Markets Free
(EMF) Index -7.98% -25.34%
60%/40% Composite:
60% MSCI EAFE /
40% EMF -1.00% 2.06%
* 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 December
31, 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 21 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 appear on page 3.
- --------------------------------------------------------------------------------
REVIEW AND OUTLOOK
1998 featured dramatically diverse equity returns from the various regions of
the world. Economic uncertainty originating in Asia negatively affected all
emerging markets globally. Developed market returns were largely positive but
were subject to accentuated volatility.
European markets were particularly strong as investors' enthusiasm for the
prospects arising from European Monetary Union grew. Additional support for
equity markets in the region arose from the continued change in savings patterns
with a shift towards equity ownership by individuals.
Asian markets recovered from lows but remained depressed following the financial
crisis that engulfed the region. The strongest recovering markets in the region
were those in which economic reform had been em-
1
<PAGE>
Alliance Worldwide Privatization Fund
================================================================================
braced most aggressively. We believe that the process of economic reform is
still at an early stage and feel that governments must continue to withdraw from
the economy for revival to be maintained. Privatization will be key to this
process and we expect to see an acceleration of privatization issues and
opportunities for your Fund in Asia.
The Japanese market and economy remained in the doldrums as the government
failed to deal adequately with the country's banking crisis. Two large
privatizations at the end of the year offered some encouragement that the
Japanese administration has accepted the need to implement change. We expect to
see the Japanese government continue in its efforts to privatize and reform,
although at a slow pace.
The contagion effect from Asia negatively impacted the Latin American markets.
Additional uncertainty in the region was caused by the failure of President
Cardoso's Brazilian government to implement fiscal reforms and reduce the
country's huge public sector budget deficit. Ultimately, this resulted in the
removal of the Brazilian currency peg and a sharp devaluation of the real. We
strongly believe that economic and fiscal reform must be implemented in order
for both Brazil and the Latin American economic environment to improve. We
believe that some excellent opportunities will arise for the Fund to invest in
the countries that restructure most aggressively.
East European markets were similarly affected by the Asian contagion and the
economic collapse in Russia. We currently find some excellent value in
privatization issues in the region.
Despite the market volatility in 1998, privatization volumes were strong, with
over US$140 billion of initial public offerings (IPO) and secondary offerings.
Over the next 12 months, we anticipate a significant increase in the number of
privatization issues both in the developed economies of the world and the
emerging economies that accelerate restructuring of their economic systems.
On an industry basis, privatizations continued to be dominated by telecoms and
utility transactions. However, as noted in previous years, there continued to be
an expansion in both industry and geographic spread. We believe this will be a
lasting trend, and we anticipate further opportunities to broaden your Fund's
industry and geographic diversity.
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 the future.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Mark H. Breedon
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
<PAGE>
Investment Objective And Policies Alliance Worldwide Privatization Fund
================================================================================
The Alliance Worldwide Privatization Fund 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 December 31, 1998
-----------------------------
Class A Shares
-----------------------------
Without With
Sales Charge Sales Charge
------------------------------
One Year 8.92% 4.25%
Since Inception* 10.65% 9.61%
-----------------------------
Class B Shares
-----------------------------
Without With
Sales Charge Sales Charge
------------------------------
One Year 8.25% 4.55%
Since Inception* 9.88% 9.88%
-----------------------------
Class C Shares
-----------------------------
Without With
Sales Charge Sales Charge
------------------------------
One Year 8.15% 7.22%
Since Inception* 13.08% 13.08%
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
<PAGE>
Ten Largest Holdings
December 31, 1998 (unaudited) Alliance Worldwide Privatization Fund
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
COMPANY U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Japan Tobacco, Inc.--Manufactures and distributes
tobacco products under exclusive government
contract within Japan. $ 16,320,110 3.2%
- --------------------------------------------------------------------------------------------------------
Sanofi, SA--Researches and manufactures
healthcare products and beauty aids. 13,888,034 2.7
- --------------------------------------------------------------------------------------------------------
ING Groep NV--Provides financial services
including commercial, savings and investment
banking, as well as life, property and commercial
insurance. 13,495,450 2.6
- --------------------------------------------------------------------------------------------------------
Akzo Nobel NV--Produces chemicals, paints, drugs,
veterinary products, hospital supplies and
diagnostics. 12,802,564 2.5
- --------------------------------------------------------------------------------------------------------
Volkswagen AG--Manufactures economy and
luxury automobiles, sports cars and trucks for
worldwide distribution. 10,849,003 2.1
- --------------------------------------------------------------------------------------------------------
Bank Austria AG--Provides commercial and
corporate banking, as well as life, property and
commercial insurance. 10,114,974 2.0
- --------------------------------------------------------------------------------------------------------
Seita--Manufactures cigarettes, cigars, pipe and
loose tobacco, as well as matches. 9,978,537 2.0
- --------------------------------------------------------------------------------------------------------
STMicroelectronics--Designs, develops, manufactures
and markets semiconductor integrated circuits and
discrete devices. 9,963,155 2.0
- --------------------------------------------------------------------------------------------------------
Aldeasa, SA--Operates 54 duty-free shops in Spanish
airports under agreement with government, as well
as airport franchise stores. 9,961,408 1.9
- --------------------------------------------------------------------------------------------------------
Nippon Telegraph & Telephone Corp.--Provides
telecommunication services, including telephone,
telegraph, leased circuits and other related services
within Japan. 9,790,985 1.9
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$117,164,220 22.9%
- --------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Industry Diversification
December 31, 1998 (unaudited) Alliance Worldwide Privatization Fund
================================================================================
- --------------------------------------------------------------------------------
U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------
Basic Industries $ 37,383,675 7.3%
- --------------------------------------------------------------------------------
Capital Goods 860,276 0.2
- --------------------------------------------------------------------------------
Consumer Manufacturing 17,335,676 3.4
- --------------------------------------------------------------------------------
Consumer Services 31,297,021 6.1
- --------------------------------------------------------------------------------
Consumer Staples 50,616,859 9.9
- --------------------------------------------------------------------------------
Energy 33,653,327 6.6
- --------------------------------------------------------------------------------
Finance 113,030,551 22.0
- --------------------------------------------------------------------------------
Healthcare 22,899,273 4.5
- --------------------------------------------------------------------------------
Multi-Industry 4,776,066 0.9
- --------------------------------------------------------------------------------
Technology 29,968,643 5.8
- --------------------------------------------------------------------------------
Transportation 21,976,522 4.3
- --------------------------------------------------------------------------------
Utilities 144,869,950 28.3
- --------------------------------------------------------------------------------
Total Investments 508,667,839 99.3
- --------------------------------------------------------------------------------
Cash and receivables, net of liabilities 3,649,656 0.7
- --------------------------------------------------------------------------------
Net Assets $512,317,495 100.0%
- --------------------------------------------------------------------------------
5
<PAGE>
Portfolio Of Investments
December 31, 1998 (unaudited) Alliance Worldwide Privatization Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
COMMON STOCKS -95.8%
ARGENTINA-0.7%
Nortel Inversora, SA (ADR) ................ 208,000 $ 3,354,000
-----------
AUSTRALIA-1.6%
Amrad Corporation, Ltd. (a) ............... 2,000,000 1,666,816
CSL, Ltd. ................................. 750,000 6,431,183
-----------
8,097,999
-----------
AUSTRIA-3.9%
Austria Tabakwerke AG ..................... 120,740 9,254,024
Bank Austria AG ........................... 199,000 10,114,974
Premier Telesports, Ltd. (a)(b) ........... 85,000 769,959
-----------
20,138,957
-----------
BOTSWANA-0.4%
Sechaba Breweries, Ltd .................... 1,635,700 1,891,155
-----------
BRAZIL-1.2%
Celesc Centrais Electricas de Santa
Catarina, SA (GDR) (c) ................. 13,000 581,030
Companhia Paranaense de Energia-Copel
(ADR) .................................. 470,000 3,348,750
Companhia Paulista Forca e Luz (a) ........ 176,463 11,684
Embratel Participacoes, SA (ADR) .......... 80,000 1,115,000
Espirito Santo Centrais Electicas, SA ..... 6,247 413,571
Globo Cabo, SA (ADR) (a) .................. 269,900 607,275
Metalurgica Gerdau, SA (b) ................ 10,044,305 166,262
-----------
6,243,572
-----------
CZECH REPUBLIC-1.2%
Ceske Radiokomunikace AS (a) .............. 140,100 $ 4,518,572
Komercni Banka AS (GDR) (a) ............... 138,650 578,864
Tabak AS .................................. 4,225 1,180,706
-----------
6,278,142
-----------
DENMARK-0.6%
Kobenhavns Lufthavne AS.................... 25,600 3,185,021
-----------
EGYPT-0.9%
Egyptian Financial & Industrial........... 31,000 512,727
Egyptian Mobile Phone ..................... 397,033 2,415,963
Housing Development Bank .................. 36,800 820,176
Madinet Nasr City for Housing &
Development ............................ 28,000 845,255
-----------
4,594,121
-----------
FINLAND-2.3%
Fortum Oyj (a) ............................ 873,506 5,428,779
Merita Plc Oyj, Series A .................. 964,000 6,124,330
-----------
11,553,109
-----------
FRANCE-8.6%
CNP Assurances (a) ........................ 225,400 6,845,452
Sanofi, SA ................................ 84,400 13,888,034
SEITA ..................................... 159,400 9,978,537
Societe Generale .......................... 28,100 4,548,471
Societe National Elf Aquitaine ............ 75,000 8,665,713
-----------
43,926,207
-----------
GERMANY-4.0%
Viag AG ................................... 16,400 9,610,316
Volkswagen AG ............................. 136,000 10,849,003
-----------
20,459,319
-----------
6
<PAGE>
Alliance Worldwide Privatization Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
GHANA-0.4%
Social Security Bank, Ltd. (a) ............... 2,000,000 $ 1,923,077
-----------
GREECE-1.0%
Commercial Bank of Greece .................... 28,100 2,761,225
Heracles General Cement, SA .................. 93,800 2,543,595
-----------
5,304,820
-----------
HONG KONG-0.7%
Ng Fung Hong, Ltd. ........................... 4,180,000 3,749,677
-----------
HUNGARY-1.2%
MOL Magyar Olaj-es Gazipari .................. 130,800 3,587,681
OTP Bank (GDR) ............................... 46,700 2,302,310
-----------
5,889,991
-----------
INDIA-0.5%
Mahanagar Telephone Nigam, Ltd. (GDR) ........ 69,700 862,538
Videsh Sanchar Nigam, Ltd. (GDR) (c) ......... 148,200 1,833,975
-----------
2,696,513
-----------
INDONESIA-0.4%
PT Tambang Timah (GDR) ....................... 323,000 2,139,875
-----------
ISRAEL-0.5%
Bank Hapoalim, Ltd. .......................... 1,507,000 2,727,618
-----------
ITALY-5.1%
Banca Nazionale del Lavoro (a) ............... 2,485,500 7,446,211
Eni SpA ...................................... 938,000 6,137,364
Instituto Nazionale delle Assicurazioni ..... 1,501,000 3,969,358
Telecom Italia Mobile di Risp SpA ............ 937,800 4,420,233
Telecom Italia SpA ........................... 528,853 3,332,143
Unione Immobiliaer SpA ....................... 1,501,000 783,869
-----------
26,089,178
-----------
JAPAN-11.5%
Daiwa Securities Co., Ltd. .................. 2,381,000 8,138,369
East Japan Railway Co. ....................... 1,017 5,682,520
Japan Tobacco, Inc. .......................... 1,631 16,320,110
Nippon Telegraph & Telephone Corp. .......... 1,268 9,790,985
Nomura Securities Co., Ltd. .................. 739,000 6,445,719
NTT Mobile Communications Network,
Inc. (a) ................................... 232 9,552,820
West Japan Railway Co. ....................... 700 3,099,265
-----------
59,029,788
-----------
JORDAN-0.1%
Arab Potash Co. .............................. 137,633 541,253
-----------
KENYA-0.1%
Kenya Airways ................................ 4,650,000 613,476
-----------
LUXEMBOURG-0.5%
Societe Europeenne des Satellites (a) ........ 15,900 2,603,131
-----------
MALAWI-0.1%
Press Corp. (GDR) (a) ........................ 94,000 625,100
-----------
MALAYSIA-0.4%
Telekom Malaysia Berhad (b) .................. 1,000,000 1,841,621
-----------
MALTA-0.2%
Maltacom Plc. (GDR) (a) ...................... 80,700 1,089,450
-----------
MEXICO-3.6%
Grupo Financiero Banamex Cl. B (a) ........... 178,500 233,915
Grupo Financiero Bancrecer, SA de CV
Cl. B (a)(b) .............................. 2,140,843 64,841
Grupo Financiero Banorte, SA de CV
Cl. B (a) ................................. 6,735,277 5,779,894
7
<PAGE>
Portfolio Of Investments (continued) Alliance Worldwide Privatization Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
Grupo Profesional Planeacion y Proyectos,
SA Cl. B (a)(b) ............................. 129,000 $ 34,513
Telefonos de Mexico, SA Cl. L (ADR) ............ 196,200 9,552,488
Tubos de Acero de Mexico, SA (ADR) ............ 448,000 2,884,000
-----------
18,549,651
-----------
NETHERLANDS-9.8%
Akzo Nobel NV .................................. 281,300 12,802,564
Equant NV (ADR) (a) ............................ 122,400 8,300,251
ING Groep NV ................................... 221,422 13,495,450
KLM Royal Dutch Airlines Co. NV ................ 190,871 5,770,977
STMicroelectronics (a) ......................... 126,600 9,963,155
-----------
50,332,397
-----------
NEW ZEALAND-0.7%
Auckland International
Airport, Ltd. (a) ........................... 2,660,000 3,709,184
-----------
NORWAY-0.7%
Christiana Bank OG Kreditkasse ................. 563,000 1,965,777
Den Norske Bank ................................ 469,000 1,631,363
-----------
3,597,140
-----------
PAKISTAN-0.1%
Hub Power Co., Ltd. (GDR) (a) .................. 75,000 431,250
-----------
PEOPLE'S REPUBLIC
OF CHINA-1.1%
Beijing Datang Power Generation Co., Ltd. ......
Cl. H ....................................... 6,285,800 1,886,324
Yanzhou Coal Mining Co., Ltd. Cl. H ............ 6,698,000 1,123,884
Zhejiang Southeast Electric Power Co.,
Ltd. (GDR) (c) .............................. 249,200 2,504,460
-----------
5,514,668
-----------
PERU-1.4%
Cementos Norte Pacasmayo, SA Cl. C ............. 1,661,620 1,684,252
Explosivos, SA (b) ............................. 1,218,410 1,042,036
Ferreyros, SA .................................. 1,295,777 1,169,770
Ontario Quinta AVV (a)(d) ...................... 2,000,000 3,360,000
-----------
7,256,058
-----------
PHILIPPINES-1.7%
First Philippine Holdings Corp. Series B ...... 2,779,672 1,500,594
International Container Terminal Services,
Inc. (a) .................................... 7,315,780 611,215
Manila Electric Co. Series B ................... 1,240,305 3,985,556
Philippine Long Distance Telephone Co. ......... 94,200 2,421,594
-----------
8,518,959
-----------
POLAND-0.6%
Kredyt Bank PBI, SA (GDR) (a)(c) ............... 93,400 1,517,750
Orbis, SA (a) .................................. 209,586 1,648,027
-----------
3,165,777
-----------
PORTUGAL-0.8%
Electricidade de Portugal, SA................... 187,600 4,126,287
-----------
ROMANIA-0.1%
Societatea, SA (b) ............................. 30,454 236,390
-----------
RUSSIA-0.8%
Gazprom (ADR) (a)(c) ........................... 93,400 796,235
JSC Rosneftegazstroy (ADR) (a) ................. 184,202 325,923
Lukoil Holdings (ADR) .......................... 81,000 1,312,200
Primamedic, Ltd. (a)(b) ....................... 1,522,600 913,240
Sberbank of Russia ............................. 28,271 353,388
Sun Brewing (GDR) (a)(c) ....................... 156,000 382,200
-----------
4,083,186
-----------
8
<PAGE>
Alliance Worldwide Privatization Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
SINGAPORE-1.0%
Development Bank of Singapore, Ltd. ........... 538,000 $ 4,858,303
------------
SOUTH AFRICA-0.6%
Iscor, Ltd. ................................... 16,119,936 2,900,918
------------
SOUTH KOREA-4.8%
Korea Electric Power Corp. .................... 154,690 3,831,889
Pohang Iron & Steel Co., Ltd. ................. 97,840 6,286,549
ADR ........................................ 210,000 3,543,750
SK Telecom Co., Ltd. .......................... 10,840 8,059,418
ADR ........................................ 305,189 3,109,113
------------
24,830,719
------------
SPAIN-5.4%
Aldeasa, SA ................................... 253,200 9,961,408
Argentaria Caja Postal Y Banco Hipotecario
de Espana, SA .............................. 267,300 6,925,947
Repsol, SA .................................... 75,000 4,002,948
Tabacalera, SA Cl. A .......................... 267,300 6,765,755
------------
27,656,058
------------
SWEDEN-1.1%
Diligentia AB ................................. 133,900 943,580
ForeningsSparbanken AB, Cl. A ................. 187,600 4,870,520
------------
5,814,100
------------
SWITZERLAND-1.6%
Sairgroup ..................................... 9,400 2,335,786
Swisscom AG (a) ............................... 14,100 5,907,965
------------
8,243,751
------------
THAILAND-0.4%
PTT Exploration & Production Public
Co., Ltd. (a) .............................. 301,000 2,119,835
------------
TRINIDAD & TOBAGO-0.0%
B.W.I.A. International Airways (a)(d) ......... 2,727,272 -0-
------------
TURKEY-1.3%
Efes Sinai Yatirim Ordinary Cl. B (a) ......... 113,223,774 1,094,695
Eregli Demir Ve Celik Fabrikalari TAS ......... 6,647,750 273,951
Petkim Petrokimya Holding AS .................. 1,781,000 804,516
Tupras Turkiye Petrol Rafinerileri AS ......... 46,708,000 2,072,884
Turkiye Is Bankasi Series C ................... 46,428,000 1,206,840
Usas Ucak Servisi AS .......................... 800,850 1,142,403
------------
6,595,289
------------
UNITED KINGDOM-9.0%
Anglian Water Plc ............................. 234,500 3,258,126
Birkby Plc .................................... 872,000 2,681,864
British Energy Plc ............................ 750,000 8,603,179
Energis Plc. (a) .............................. 268,400 5,979,101
Mersey Docks & Harbour Co. .................... 481,650 3,883,487
National Grid Group Plc ....................... 717,000 5,721,488
National Power Plc ............................ 923,925 7,971,732
PowerGen Plc .................................. 187,600 2,479,411
Stagecoach Holdings Plc ....................... 1,407,000 5,602,066
------------
46,180,454
------------
UNITED STATES-1.0%
Near East International LLC (a)(d) ............ 10 1,000,000
United Customer Management
Solutions (b) .............................. 17,862 3,929,641
------------
4,929,641
------------
VENEZUELA-0.1%
Mercantil Servicios Financieros (ADR) ......... 75,000 458,370
------------
Total Common Stocks (cost $438,235,773) ....... 490,694,555
------------
9
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) Alliance Worldwide Privatization Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS-3.5%
BRAZIL-3.5%
Bardella Industrias Mecanicas, SA ............ 20,786 $ 825,763
Celesc Centrais Electricas de Santa
Catarina, SA Cl. B (a) .................... 4,482,133 2,003,188
Companhia Riograndense de Telcom
Cl. A (a) ................................. 4,994,619 1,798,187
Gerdau, SA ................................... 310,791,935 2,315,024
Iven, SA (a)(b) .............................. 8,614,000 1,711,036
Metalurgica Gerdau, SA ....................... 178,029,484 2,946,898
Telecomunicacoes Brasileiras, SA
(ADR) (a) ................................. 86,000 6,251,125
Telecommunicacoes de Parana, SA .............. 686,000 122,063
------------
Total Preferred Stocks
(cost $30,805,079) ........................ 17,973,284
------------
TOTAL INVESTMENTS-99.3%
(cost $469,040,852) ....................... 508,667,839
Other assets less
liabilities-0.7% .......................... 3,649,656
------------
NET ASSETS-100% .............................. $512,317,495
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Illiquid security, valued at fair value (see Note A).
(c) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1998 these securities amounted to $7,615,650 or 1.5% of net assets.
(d) Restricted and illiquid security, valued at fair value. (See Notes A & G.)
Glossary of terms:
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998 (unaudited) Alliance Worldwide Privatization Fund
================================================================================
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $469,040,852) .......................... $508,667,839
Foreign cash, at value (cost $1,124,978) ......................................... 1,150,125
Receivable for investment securities sold ........................................ 3,178,361
Dividends and interest receivable ................................................ 1,166,029
Foreign taxes receivable ......................................................... 504,211
Receivable for capital stock sold ................................................ 254,524
Deferred organization expense .................................................... 18,245
------------
Total assets ..................................................................... 514,939,334
------------
LIABILITIES
Payable for capital stock redeemed ............................................... 942,951
Advisory fee payable ............................................................. 486,322
Distribution fee payable ......................................................... 350,684
Payable for investment securities purchased ...................................... 146,231
Accrued expenses ................................................................. 695,651
------------
Total liabilities ................................................................ 2,621,839
------------
NET ASSETS .......................................................................... $512,317,495
============
COMPOSITION OF NET ASSETS
Capital stock, at par ............................................................ $ 49,892
Additional paid-in capital ....................................................... 456,449,730
Undistributed net investment income .............................................. 7,654,096
Accumulated net realized gain on investments and foreign currency transactions ... 8,538,428
Net unrealized appreciation of investments and foreign currency denominated assets
and liabilities ................................................................ 39,625,349
------------
$512,317,495
============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share
($362,280,670 / 35,027,163 shares of capital stock issued and outstanding) ..... $10.34
Sales Charge--4.25% of public offering price ..................................... 0.46
------
Maximum offering price ........................................................... $10.80
======
Class B Shares
Net asset value and offering price per share
($125,431,334 / 12,430,458 shares of capital stock issued and outstanding) ..... $10.09
======
Class C Shares
Net asset value and offering price per share
($22,196,179 / 2,199,712 shares of capital stock issued and outstanding) ....... $10.09
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($2,409,312 / 234,600 shares of capital stock issued and outstanding) .......... $10.27
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1998
(unaudited) Alliance Worldwide Privatization Fund
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $433,223)........ $ 3,884,832
Interest..................................................... 226,477 $ 4,111,309
------------
EXPENSES
Advisory fee................................................. 2,875,796
Distribution fee - Class A................................... 616,962
Distribution fee - Class B................................... 688,417
Distribution fee - Class C................................... 120,987
Custodian.................................................... 737,791
Transfer agency.............................................. 710,741
Printing..................................................... 80,992
Administrative............................................... 70,000
Audit and legal.............................................. 37,237
Registration................................................. 28,697
Amortization of organization expenses........................ 22,633
Directors' fees.............................................. 13,310
Miscellaneous................................................ 30,550
------------
Total expenses............................................... 6,034,113
Less: expense offset arrangement (see Note B)................ (34,953)
------------
Net expenses................................................. 5,999,160
-------------
Net investment loss.......................................... (1,887,851)
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments............................. 20,344,245
Net realized gain on foreign currency transactions........... 896,000
Net change in unrealized appreciation (depreciation) of:
Investments................................................ (52,185,352)
Foreign currency denominated assets and liabilities........ 76,373
-------------
Net loss on investments and foreign currency transactions.... (30,868,734)
-------------
NET DECREASE IN NET ASSETS FROM OPERATIONS...................... $ (32,756,585)
=============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS Alliance Worldwide Privatization Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1998 June 30,
(unaudited) 1998
---------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss)........................................ $ (1,887,851) $ 4,543,175
Net realized gain on investments and foreign currency transactions.. 21,240,245 79,032,204
Net change in unrealized appreciation (depreciation) of investments
and foreign currency denominated assets and liabilities........... (52,108,979) (26,242,066)
------------- ------------
Net increase (decrease) in net assets from operations............... (32,756,585) 57,333,313
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A........................................................... (3,960,735) (7,099,073)
Class B........................................................... (437,988) (1,695,396)
Class C........................................................... (76,689) (237,218)
Advisor Class..................................................... (20,394) (22,444)
Net realized gain on investments
Class A........................................................... (53,210,205) (53,637,469)
Class B........................................................... (17,946,553) (15,371,652)
Class C........................................................... (3,142,307) (2,150,777)
Advisor Class..................................................... (196,625) (135,664)
CAPITAL STOCK TRANSACTIONS
Net decrease........................................................ (28,592,881) (20,593,202)
------------- ------------
Total decrease...................................................... (140,340,962) (43,609,582)
NET ASSETS
Beginning of year................................................... 652,658,457 696,268,039
------------- ------------
End of period (including undistributed net investment income of
$7,654,096 and $14,037,753, respectively)......................... $ 512,317,495 $652,658,457
============= ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 (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 an 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 may 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.
14
<PAGE>
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 Advisor 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.
- --------------------------------------------------------------------------------
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 $70,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended December 31, 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 $428,499 for the six months ended December 31, 1998.
In addition, for the six months ended December 31, 1998, the Fund's expenses
were reduced by $34,953 under an expense offset arrangement with Alliance Fund
Services. Transfer agency fees reported in the statement of operations exclude
these credits.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
received front-end sales charges of $7,958 from the sale of Class A shares and
$1,038, $175,158 and $13,630 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended December 31, 1998. Brokerage commissions
paid on investment transactions for the six months ended December 31, 1998,
amounted to $1,418,873, 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
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Worldwide Privatization Fund
================================================================================
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 $6,501,035 and $606,139 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 $214,702,508 and $326,821,310,
respectively, for the six months ended December 31, 1998. There were no
purchases or sales of U.S. government or government agency obligations for the
six months ended December 31, 1998.
At December 31, 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 $110,532,681 and gross unrealized
depreciation of investments was $70,905,694 resulting in net unrealized
appreciation of $39,626,987, 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 December 31, 1998, the Fund had no outstanding forward exchange currency
contracts.
16
<PAGE>
Alliance Worldwide Privatization Fund
================================================================================
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:
<TABLE>
<CAPTION>
----------------------------------- -----------------------------------
SHARES AMOUNT
----------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1998 June 30, December 31, 1998 June 30,
(unaudited) 1998 (unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Class A
Shares sold...................... 9,501,163 39,736,256 $ 109,478,781 $ 492,815,245
Shares issued in reinvestment of
dividends and distributions... 3,319,415 2,835,212 33,293,731 30,762,050
Shares converted from Class B.... 46,873 10,886 553,282 137,149
Shares redeemed.................. (14,761,099) (48,013,384) (169,173,157) (601,039,158)
-------------- -------------- -------------- --------------
Net decrease..................... (1,893,648) (5,431,030) $ ( 25,847,363) $ (77,324,714)
============== ============== ============== ==============
Class B
Shares sold...................... 1,234,275 5,439,686 $ 13,234,555 $ 68,476,803
Shares issued in reinvestment of
dividends and distributions... 1,107,404 814,878 10,841,481 8,662,153
Shares converted to Class A...... (48,092) (11,023) (553,282) (137,114)
Shares redeemed.................. (2,506,198) (2,894,997) (27,598,646) (35,371,129)
-------------- -------------- -------------- --------------
Net increase (decrease).......... (212,611) 3,348,544 $ (4,075,892) $ 41,630,713
============== ============== ============== ==============
Class C
Shares sold...................... 585,840 9,900,745 $ 6,571,903 $ 123,043,119
Shares issued in reinvestment of
dividends and distributions... 227,787 142,928 2,230,040 1,519,326
Shares redeemed.................. (766,969) (8,882,163) (8,349,626) (110,861,845)
-------------- -------------- -------------- --------------
Net increase..................... 46,658 1,161,510 $ 452,317 $ 13,700,600
============== ============== ============== ==============
Advisor Class
Shares sold...................... 206,052 112,659 $ 2,167,956 $ 1,479,232
Shares issued in reinvestment of
dividends and distributions... 18,392 12,770 183,179 137,919
Shares redeemed.................. (125,714) (17,793) (1,473,078) (216,952)
-------------- -------------- -------------- --------------
Net increase..................... 98,730 107,636 $ 878,057 $ 1,400,199
============== ============== ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
NOTE F: Concentration of Risk
Investing in securities of foreign companies involves special risks which
include changes in foreign exchange rates and the possibility of future
political and economic developments which could adversely affect the value of
such securities. 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,
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Worldwide Privatization Fund
================================================================================
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 G: Restricted Securities
Date Acquired U.S. $ Cost
--------------- ---------------
B.W.I.A. International Airways............... 2/21/95 $2,999,999
Near East International...................... 9/29/95 1,000,000
Ontario Quinta AVV........................... 8/15/94 2,052,257
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 value of
these securities at December 31, 1998 was $4,360,000 representing 0.9% 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 $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended December 31, 1998.
18
<PAGE>
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)
1998 ----------------------------------------------- to
(unaudited) 1998 1997 1996 1995 June 30, 1994
----------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $12.67 $13.26 $12.13 $10.18 $ 9.75 $10.00
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (loss)............. (.03)(b) .10(b) .15(b) .10(b) .06 .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................... (.54) .85 2.55 1.85 .37 (.26)
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset
value from operations................. (.57) .95 2.70 1.95 .43 (.25)
------ ------ ------ ------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income..... (.12) (.18) (.15) -0- -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions.......................... (1.64) (1.36) (1.42) -0- -0- -0-
------ ------ ------ ------ ------ ------
Total dividends and distributions........ (1.76) (1.54) (1.57) .00 .00 .00
------ ------ ------ ------ ------ ------
Net asset value, end of period........... $10.34 $12.67 $13.26 $12.13 $10.18 $9.75
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value(c)........................ (4.06)% 9.11% 25.16% 19.16% 4.41% (2.50)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $362,281 $467,960 $561,793 $672,732 $13,535 $4,990
Ratio of expenses to average net assets.. 1.90%(d)(e) 1.73% 1.72% 1.87% 2.56% 2.75%(d)
Ratio of expenses to average net assets
excluding interest expense............ 1.89%(d) 1.73% 1.71% 1.85% 2.56% 2.75%(d)
Ratio of net investment income (loss) to
average net assets.................... (.46)%(d) .80% 1.27% .95% .66% 1.03%(d)
Portfolio turnover rate.................. 79% 53% 48% 28% 36% -0-%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 22.
19
<PAGE>
FINANCIAL HIGHLIGHTS (continued) 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)
1998 ----------------------------------------------- to
(unaudited) 1998 1997 1996 1995 June 30, 1994
----------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.37 $13.04 $11.96 $10.10 $ 9.74 $10.00
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (loss)............. (.07)(b) .02(b) .08(b) (.02)(b) .02 -0-
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions.......................... (.53) .82 2.50 1.88 .34 (.26)
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset
value from operations.................. (.60) .84 2.58 1.86 .36 (.26)
------ ------ ------ ------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income..... (.04) (.15) (.08) -0- -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions........................... (1.64) (1.36) (1.42) -0- -0- -0-
------ ------ ------ ------ ------ ------
Total dividends and distributions........ (1.68) (1.51) (1.50) -0- -0- -0-
------ ------ ------ ------ ------ ------
Net asset value, end of period........... $10.09 $12.37 $13.04 $11.96 $10.10 $9.74
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value(c)......................... (4.44)% 8.34% 24.34% 18.42% 3.70% (2.60)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $125,431 $156,348 $121,173 $83,050 $79,359 $22,859
Ratio of expenses to average net assets.. 2.60%(d)(e) 2.45% 2.43% 2.83% 3.27% 3.45%(d)
Ratio of expenses to average net assets
excluding interest expense............. 2.59%(d) 2.45% 2.42% 2.82% 3.27% 3.45%(d)
Ratio of net investment income (loss) to
average net assets..................... (1.16)%(d) .20% .66% (.20)% .01% .33%(d)
Portfolio turnover rate.................. 79% 53% 48% 28% 36% -0-%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 22.
20
<PAGE>
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(f)
1998 ----------------------------------- to
(unaudited) 1998 1997 1996 June 30, 1995
----------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $12.37 $13.04 $11.96 $10.10 $9.53
------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (loss).............. (.07)(b) .05(b) .12(b) .03(b) .05
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................... (.53) .79 2.46 1.83 .52
------ ------ ------ ------ ------
Net increase (decrease) in net asset
value from operations.................. (.60) .84 2.58 1.86 .57
------ ------ ------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income...... (.04) (.15) (.08) -0- -0-
Distributions from net realized gains on
investments and foreign currency
transactions........................... (1.64) (1.36) (1.42) -0- -0-
------ ------ ------ ------ ------
Total dividends and distributions......... (1.68) (1.51) (1.50) -0- -0-
------ ------ ------ ------ ------
Net asset value, end of period............ $10.09 $12.37 $13.04 $11.96 $10.10
====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value(c)......................... (4.44)% 8.34% 24.33% 18.42% 5.98%
Ratios/Supplemental Data
Net assets, end of period (000's omitted). $22,196 $26,635 $12,929 $2,383 $338
Ratio of expenses to average net assets... 2.60%(d)(e) 2.44% 2.42% 2.57% 1.03%(d)
Ratio of expenses to average net assets
excluding interest expense............. 2.59%(d) 2.44% 2.41% 2.57% 1.03%(d)
Ratio of net investment income (loss) to
average net assets..................... (1.16)%(d) .38% 1.06% .63% 1.04%(d)
Portfolio turnover rate................... 79% 53% 48% 28% 36%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 22.
21
<PAGE>
FINANCIAL HIGHLIGHTS (continued) 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, Year Ended 1996(f)
1998 June 30, to
(unaudited) 1998 June 30, 1997
----------- ---------- -------------
Net asset value, beginning of period...... $12.63 $13.23 $12.14
------ ------ ------
Income From Investment Operations
Net investment income (loss) (b).......... (.01) .19 .18
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ (.54) .80 2.52
------ ------ ------
Net increase (decrease) in net asset
value from operations................... (.55) .99 2.70
------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income...... (.17) (.23) (.19)
Distributions from net realized gains on
investments and foreign currency
transactions............................ (1.64) (1.36) (1.42)
------ ------ ------
Total dividends and distributions......... (1.81) (1.59) (1.61)
------ ------ ------
Net asset value, end of period............ $10.27 $12.63 $13.23
====== ====== ======
Total Return
Total investment return based on net
asset value(c).......................... (3.92)% 9.48% 25.24%
Ratios/Supplemental Data
Net assets, end of period (000's omitted). $2,409 $1,716 $374
Ratio of expenses to average net assets... 1.63%(d)(e) 1.45% 1.96%(d)
Ratio of expenses to average net assets
excluding interest expense.............. 1.62%(d) 1.45% 1.95%(d)
Ratio of net investment income (loss) to
average net assets...................... (.21)%(d) 1.48% 2.97%(d)
Portfolio turnover rate................... 79% 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) Ratio reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the six months ended December 31, 1998, the ratios of
expenses to average net assets were 1.89%, 2.59%, 2.59% and 1.62% for Class
A, B, C and Advisor Class shares, respectively.
(f) Commencement of distribution.
22
<PAGE>
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
Russell Brody, Vice President
David Edgerly, 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
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.
23
<PAGE>
ALLIANCE WORLDWIDE PRIVATIZATION FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital [LOGO]
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
