ALLIANCE WORLDWIDE PRIVATIZATION FUND
ANNUAL REPORT
JUNE 30, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
August 27, 1999
Dear Shareholder:
This annual report contains investment results and market activity for Alliance
Worldwide Privatization Fund (the "Fund") for the period ended June 30, 1999.
INVESTMENT RESULTS
We recently changed the Fund's benchmarks from the Morgan Stanley Capital
International (MSCI) Europe, Australasia and Far East (EAFE) Index to the MSCI
World Index (minus the U.S.). As the country allocations in the MSCI World
Index (minus the U.S.) more closely match those maintained over time by the
Fund, we have determined that it is a more appropriate and accurate gauge of
the Fund's performance. As you can see, this report shows your Fund's
investment results as compared to both indices. The Fund's next report (for the
period ended December 31, 1999) will no longer show the MSCI EAFE Index. In
conformity with this change, the Fund's composite benchmark index has also been
changed from a 60%/40% split of the MSCI EAFE Index and MSCI Emerging Markets
Free (EMF) Index, respectively, to a 65%/35% split of the MSCI World Index
(minus the U.S.) and the MSCI EMF Index, respectively.
The following table provides performance for Alliance Worldwide Privatization
Fund as well as its old benchmark (the MSCI EAFE Index), its new benchmark (the
MSCI World Index [minus the U.S.]), and its composite benchmark, a 65%/35%
composite of the MSCI World Index (minus the U.S.) and the MSCI EMF Index,
respectively. Over the six-month period ended June 30, 1999, your Fund's Class
A shares returned 14.51% at net asset value (NAV), underperforming its
benchmark composite which returned 16.98%. Over the 12-month period ended June
30, 1999, your Fund's Class A shares returned 9.86% at NAV, underperforming its
benchmark composite which returned 15.04% over the same period. Despite
positive overall stock selection, the Fund's underperformance versus the
composite benchmark over the periods under review was a result of two factors.
First, relative to the composite, the Fund was underweight in both the emerging
market sector and Japan. Second, relative to the composite, the Fund was
overweight in developed Europe in general and, in particular, Spain and Italy.
INVESTMENT RESULTS*
Periods ended June 30, 1999
TOTAL RETURNS
6 MONTHS 2 MONTHS
-------- --------
Alliance Worldwide Privatization Fund
Class A 14.51% 9.86%
Class B 13.97% 8.91%
Class C 13.97% 8.91%
MSCI EAFE Index 4.11% 7.92%
MSCI World Index (minus the U.S.) 4.65% 7.68%
65%/35% Composite: 65% MSCI World Index
(minus the U.S.)/35% MSCI EMF 16.98% 15.04%
* 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, 1999. ALL FEES
AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED BUT NO
ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES ARE
PURCHASED OR REDEEMED. 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 MSCI EAFE INDEX IS AN UNMANAGED, MARKET CAPITALIZATION-WEIGHTED INDEX
THAT MEASURES STOCK PERFORMANCE IN 20 COUNTRIES IN EUROPE, AUSTRALASIA, AND THE
FAR EAST. THE MSCI WORLD INDEX (MINUS THE U.S.) IS AN UNMANAGED, MARKET
CAPITALIZATION-WEIGHTED INDEX THAT MEASURES THE PERFORMANCE OF STOCK MARKETS IN
21 COUNTRIES OUTSIDE THE UNITED STATES. THE MSCI EMERGING MARKETS FREE (EMF)
INDEX IS AN UNMANAGED, MARKET CAPITALIZATION-WEIGHTED INDEX COMPOSED OF
COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF 25 EMERGING MARKET
COUNTRIES IN EUROPE, LATIN AMERICA, AND THE PACIFIC BASIN. THE INDEX EXCLUDES
CLOSED MARKETS AND THOSE SHARES IN OTHERWISE FREE COUNTRIES WHICH ARE NOT
PURCHASABLE BY FOREIGNERS. THE BENCHMARKS ARE UNMANAGED AND REFLECT NO FEES OR
EXPENSES. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
MARKET REVIEW
During the period under review, equity returns were broadly positive across
most regional markets. During this time, the strong U.S. economy as well as
positive U.S. equity returns were the key drivers to the strength of
international equity markets. The Federal Reserve's
1
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
recent interest rate hikes and its adoption of a cautionary bias failed to
dampen enthusiasm for equities. We continue to believe that the U.S. economic
growth story remains intact despite the recent further interest rate rise. We
anticipate that the prospect of continued strength for the U.S. economy and
equity markets will be beneficial to international equity returns.
European equity returns, although positive, were subdued during the period
under review. After initial enthusiasm for the European currency unit (the
Euro), European equity markets were hit by the failure of European economies to
show clear signs of recovery. Additionally, the region's equity markets have
been hit by the fear that European interest rates have bottomed and that U.S.
inflationary pressure may spread to the region.
The Japanese equity market appears to have started rising out of the doldrums.
The market has been boosted by positively surprising economic figures that
increased foreign investor interest in the market. However, we believe a
sustained economic recovery is dependent on continued economic and corporate
restructuring.
The emerging equity markets posted particularly strong returns during the
period under review with the Asian markets leading the way. The recovery of
Asian economic growth has been promoted by aggressive corporate and economic
restructuring, and, indeed, the countries that have embraced this process most
aggressively have posted the best equity market returns. We maintain our belief
that privatization is an essential part of the restructuring process and that,
as we have seen here in the recovery of Asia's economy, it should drive
economic and corporate health. In our view, the weakness of the Chinese
economy, the risk that interest rates may trend upwards, and an easing of the
restructuring process are the main threats to the Asian recovery story.
Latin American markets have recovered from the devaluation shocks the region
faced in the early part of the year. Despite the fragility of the region's
economies, we are confident that if governments implement policies to
liberalize and privatize, exciting investment opportunities will arise. Equity
valuations throughout the region remain among the most attractive across global
equity markets.
INVESTMENT OUTLOOK
Our outlook for both privatizations and the Fund continues to be positive, and
we expect 1999 to be another record year for privatizations around the world.
Thanks to the strong relative performance by countries in the Far East, we
continue to believe that privatization and liberalization will create new
interest in countries going through the restructuring process. Moreover,
opportunities presented by the withdrawal of government from industry will, in
our judgment, reward investors, as the management of inefficient and
non-profit-oriented businesses make the enhancement of shareholder value their
primary objective. 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.
INVESTMENT STRATEGY AND REVIEW
Throughout the period, the Fund remained broadly diversified and was typically
invested in over 40 different countries. Sectors largely represented in the
Fund include telecommunications and utilities. At this point in time, we do not
foresee any immediate, significant changes to the Fund's composition. As the
global privatization process continues to expand, however, we anticipate
further opportunities to broaden your Fund's industry and geographic diversity.
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,
John D. Carifa
Chairman and President
Mark H. Breedon
Senior Vice President
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
The Alliance Worldwide Privitization 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, privitization, 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, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 9.86% 5.21%
Five Years 13.29% 12.32%
Since Inception* 12.51% 11.56%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
One Year 8.91% 5.19%
Five Years 12.49% 12.49%
Since Inception* 11.70% 11.70%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
One Year 8.91% 7.98%
Since Inception* 14.92% 14.92%
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 shares or applicable
contingent deferred sales charge for Class B shares (4% year 1, 3% year 2, 2%
year 3, 1% year 4); and for Class C shares (1% year 1). Returns for Class A
shares do not reflect the imposition of the 1 year 1% contingent deferred sales
charge for accounts over $1,000,000. Total return for Advisor Class shares will
differ due to different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Since Inception: 6/2/94, Class A; 6/2/94, Class B; 2/8/95, Class C.
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.
3
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ALLIANCE WORLDWIDE PRIVATIZATION FUND
GROWTH OF A $10,000 INVESTMENT 6/30/94* TO 6/30/99
$18,000
$14,000
$10,000
$ 6,000
Worldwide Privatization Fund Class A: $17,877
MSCI World Index (minus the U.S.): $15,244
MSCI EAFE Index: $15,050
MSCI EMF Index: $9,594
6/30/94 6/30/95 6/30/96 6/30/97 6/30/98 6/30/99
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 6/30/99)
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 Europe, Australasia and Far EastIndex
(MSCIEAFE) is an unmanaged, market-capitalization-weighted index that measures
stock performance in 20 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 25 emerging-market countries in
Europe, LatinAmerica, and the Pacific Basin. The Index excludes closed markets
and those shares in otherwise free countries which are not purchasable by
foreigners.
The Morgan Stanley Capital International (MSCI) World Index (minus the United
States) is an unmanaged, market-capitalization-weighted index that measures the
performance of stock markets in 21 countries outside the United States.
When comparing Alliance Worldwide Privatization Fund to the indices shown
above, you should note that no charges or expenses are reflected in the
performance of the indices.
Alliance Worldwide Privatization Fund
MSCI EMF Index
MSCI EAFE Index
MSCI World Index (minus the U.S.)
* Month-end nearest to Fund's Class A share inception date of 6/2/94.
4
TEN LARGEST HOLDINGS
JUNE 30, 1999 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Japan Tobacco, Inc.--Manufactures and
distributes tobacco products under
exclusive government contract within
Japan. $ 15,112,324 3.2%
United Pan-Europe Communications NV--
Television and telecommunications
company that offers cable, TV, phone
and internet services. 11,707,665 2.4
Nippon Telegraph & Telephone Corp.--
Provides telecommunication services,
including telephone, telegraph, leased
circuits and other related services
within Japan. 11,658,192 2.4
Daiwa Securities Co., Ltd.--Provides
financial services such as brokerage,
underwriting, and distribution of
securities. 10,629,625 2.2
STMicroelectronics NV--Designs, develops,
manufactures and markets semiconductor
integrated circuits and discrete
devices. 10,386,478 2.2
ING Groep NV--Provides financial services
including commercial, savings and
investment banking, as well as life,
property and commercial insurance. 10,298,860 2.1
NTT Mobile Communications Network, Inc.--
Provides various telecommunication
services including cellular phones,
car phones, pagers and packet
communication services. 10,070,693 2.1
Grupo Financiero Banorte, SA de CV
Series O--Offers credit, investment
planning, risk and money management,
and factoring services. 9,710,161 2.0
Telefonos de Mexico, SA Cl. L (ADR)--
Provides domestic and international
long-distance, as well as local
telephone service throughout Mexico. 9,495,469 2.0
Equant NV (NY Shares)--Operates a data
network and provides seamless
international data network services
to multinational business. 8,913,638 1.9
$107,983,105 22.5%
5
SECTOR DIVERSIFICATION
JUNE 30, 1999 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
PERCENT OF
U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Aerospace & Defense $ 978,528 0.2%
Basic Industries 37,978,574 7.9
Capital Goods 587,175 0.1
Consumer Manufacturing 5,086,058 1.1
Consumer Services 58,932,205 12.3
Consumer Staples 39,099,702 8.2
Energy 26,468,273 5.5
Finance 116,724,786 24.3
Healthcare 16,589,046 3.5
Multi-Industry 6,687,740 1.4
Technology 21,652,747 4.5
Transportation 20,125,061 4.2
Utilities 118,575,506 24.7
Total Investments 469,485,401 97.9
Cash and receivables, net of liabilities 10,134,890 2.1
Net Assets $479,620,291 100.0%
6
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-97.9%
ARGENTINA-0.8%
Nortel Inversora, SA (ADR) 208,000 $ 3,614,000
AUSTRALIA-1.6%
Commonwealth Serum Lab, Ltd. 650,000 5,603,919
TABCORP Holdings, Ltd. 340,000 2,288,026
------------
7,891,945
AUSTRIA-2.9%
Austria Tabakwerke AG 100,000 5,823,173
Bank Austria AG 150,000 7,884,472
------------
13,707,645
BRAZIL-5.1%
Bardella Industrias Mecanicas, SA pfd (a) 20,786 587,175
Celular CRT Participacoes,
SA pfd 3,994,362 534,838
Rts. expiring 7/5/99 (a) 2,104,833 0
Companhia Paranaense de Energia (ADR) 470,000 3,936,250
Companhia Paulista de Forca e Luz pfd 176,463 10,867
Companhia Riograndense de Telecomunicacoes
Cl. A pfd 594,362 144,225
Embratel Participacoes, SA (ADR) 110,000 1,526,250
Espirito Santo Centrais Eletricas, SA 6,247 229,480
Gerdau, SA pfd 310,791,935 5,179,866
Gerdau Metalurgica, SA (a)(b) 10,044,305 224,153
pfd 178,009,484 5,380,513
Iven, SA pfd (b) 8,614,000 1,119,333
Tele Sudeste Celular Participacoes, SA
(ADR) 90,000 2,610,000
Telesp Participacoes, SA (ADR) 140,900 3,223,087
------------
24,706,037
CHILE-0.3%
Compania de Telecomunicaciones de Chile
(ADR) 60,000 1,485,000
CROATIA-0.5%
Pliva D.D. (GDR) 153,000 2,317,950
CYPRUS-0.2%
Premier Telesports (a)(b) 85,000 700,842
Primamedic, Ltd. (a)(b) 1,522,600 439,395
------------
1,140,237
CZECH REPUBLIC-0.9%
Ceske Radiokomunikace AS 92,000 3,196,373
Tabak AS 4,000 951,045
------------
4,147,418
EGYPT-0.3%
Commercial International Bank 100,000 898,063
Madinet NASR for Housing & Development 56,000 626,799
------------
1,524,862
FINLAND-1.1%
MeritaNordbanken Oyj 900,000 5,110,993
FRANCE-8.0%
Aerospatiale Matra (a) 42,480 978,528
CNP Assurances 189,300 5,168,253
Elf Aquitaine, SA 59,600 8,741,025
Sanofi-Synthelabo, SA 194,000 8,227,782
SEITA 139,400 8,045,666
Societe Generale Cl. A 39,700 6,992,682
------------
38,153,936
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
GERMANY-2.9%
MVV Energie AG New Shares (a) 277,400 $ 4,374,305
Stinnes AG (a) 302,000 4,699,970
Viag AG 10,000 4,720,377
------------
13,794,652
GHANA-0.3%
Social Security Bank, Ltd. 2,000,000 1,440,151
GREECE-0.5%
Heracles General Cement, SA 84,400 2,259,112
HONG KONG-1.4%
China Telecom (Hong Kong), Ltd. 1,100,000 3,055,319
Ng Fung Hong, Ltd. 3,500,000 2,909,674
Shandong International Power
Development Co., Ltd. Cl. H (a) 4,250,000 958,614
------------
6,923,607
HUNGARY-1.0%
Magyar Olaj-es Gazipari Reszvenytar 128,900 3,104,613
OTP Bank Reszvenytar (GDR) 42,500 1,761,625
------------
4,866,238
INDIA-1.3%
Industrial Credit & Investment Corp.
(GDR), Ltd. 1,460,000 2,473,721
Mahanagar Telephone Nigam, Ltd. (GDR) 222,300 2,200,770
Videsh Sanchar Nigam, Ltd. (GDR) (c) 126,000 1,614,375
------------
6,288,866
INDONESIA-0.3%
PT Tambang Timah TBK (GDR) (a) 135,000 1,204,875
ISRAEL-0.5%
Bank Hapoalim, Ltd. 1,000,000 2,565,421
ITALY-5.3%
Banca Nazionale del Lavoro (a) 2,000,000 6,286,965
ENI SpA 800,000 4,773,971
Instituto Nazionale delle Assicurazioni 1,300,000 3,014,651
Monte dei Paschi di Siena SpA (a) 807,500 3,578,674
Telecom Italia Mobile SpA 937,800 3,450,561
Telecom Italia SpA 827,853 4,487,972
------------
25,592,794
JAPAN-12.9%
Daiwa Securities Co., Ltd. 1,607,000 10,629,625
East Japan Railway Co. 907 4,874,530
Japan Tobacco, Inc. 1,364 15,112,324
Nippon Telegraph & Telephone Corp. 1,000 11,658,192
Nomura Securities Co., Ltd. 600,000 7,029,641
NTT Mobile Communications Network, Inc. 150 2,033,982
New Shares (a) 600 8,036,711
West Japan Railway Co. 600 2,301,873
------------
61,676,878
MALAWI-0.1%
Press Corp., Ltd. (GDR) (a) 94,000 623,220
MALAYSIA-0.7%
Telekom Malaysia Berhad 1,000,000 3,364,929
8
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MALTA-0.3%
Maltacom Plc. (GDR) 75,000 $ 1,368,750
MEXICO-4.8%
Grupo Financiero Banorte, SA de CV
Series O (a) 6,635,277 9,710,161
Telefonos de Mexico, SA Cl. L (ADR) 117,500 9,495,469
Tubos de Acero de Mexico, SA (ADR) 338,000 3,675,750
------------
22,881,380
NETHERLANDS-10.3%
Akzo Nobel NV 200,000 8,410,104
Equant NV (NY Shares) (a) 94,700 8,913,638
ING Groep NV 190,335 10,298,860
STMicroelectronics NV 156,000 10,386,478
United Pan-Europe Communications NV (a) 215,960 11,707,665
------------
49,716,745
NORWAY-0.4%
Christiana Bank OG Kreditkasse 500,000 1,795,571
PEOPLE'S REPUBLIC OF CHINA-0.8%
Beijing Datang Power Generation Co.,
Ltd. Cl. H 5,285,800 1,703,207
Yanzhou Coal Mining Co., Ltd. Cl. H 5,740,000 2,071,508
------------
3,774,715
PERU-1.4%
Cementos Norte Pacasmayo, SA Cl. C 743,620 970,667
Explosivos, SA (b) 1,571,704 1,344,143
Ferreyros, SA 1,430,661 940,179
Ontario Quinta AVV (a)(d) 2,000,000 3,360,000
------------
6,614,989
PHILIPPINES-1.0%
International Container Terminal
Services, Inc. (a) 2,754,769 358,373
Manila Electric Co. Series B 533,305 1,920,178
Philippine Long Distance Telephone Co. 80,500 2,454,139
------------
4,732,690
POLAND-1.7%
Kredyt Bank PBI, SA (GDR) (c) 93,400 2,229,925
New Shares (GDR) (a)(c) 46,700 1,114,963
Orbis, SA (a) 327,220 2,816,767
Powszechny Bank Kredy (GDR) (a) 86,700 2,102,475
------------
8,264,130
PORTUGAL-0.9%
Electricidade de Portugal, SA 110,000 1,979,466
Soporcel-Sociedade Portuguesa de Papel,
SA (a) 208,250 2,135,597
------------
4,115,063
ROMANIA-0.0%
Societatea, SA (b) 30,454 154,076
RUSSIA-1.3%
Gazprom (ADR) (c) 93,400 1,053,085
Lukoil Holdings (ADR) 81,000 3,207,600
Sberbank of Russia 20,607 835,614
Sun Interbrew, Ltd. (GDR) voting
shares (a)(b)(c) 156,000 763,712
(GDR) Non-voting shares (a)(c)(d) 156,000 351,000
------------
6,211,011
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SINGAPORE-1.1%
Development Bank of Singapore, Ltd. 445,000 $ 5,438,308
SOUTH AFRICA-0.3%
Iscor, Ltd. 4,810,000 1,506,613
SOUTH KOREA-5.3%
Housing & Commercial Bank, Korea 76,300 2,406,004
Korea Electric Power Corp. 120,000 4,986,609
Korea Telecom Corp. (ADR) (a) 108,189 4,327,560
Pohang Iron & Steel Co., Ltd. 52,400 6,295,017
SK Telecom Co., Ltd. 3,645 4,929,803
(ADR) 108,289 1,840,913
Rts. expiring 7/26/99 (a) 836 439,487
------------
25,225,393
SPAIN-5.1%
Aldeasa, SA 200,000 5,532,529
Argentaria, Caja Postal y Banco
Hipotecario de Espana, SA 229,700 5,229,593
Indra Sistemas, SA 380,000 4,092,711
Repsol, SA 225,000 4,591,546
Tabacalera, SA Cl. A 254,600 5,143,108
------------
24,589,487
SWEDEN-0.4%
ForeningsSparbanken AB, Cl. A 126,000 1,781,569
SWITZERLAND-1.5%
SairGroup 9,400 1,968,539
Swisscom AG 14,100 5,306,891
------------
7,275,430
TAIWAN-0.8%
Taiwan Semiconductor Manufacturing
Co. (a) 1,033,200 3,950,471
THAILAND-1.1%
PTT Exploration & Production Public
Co., Ltd. 268,000 2,049,519
Siam Commercial Bank Public Co., Ltd.
pfd (a) 2,322,000 3,305,898
------------
5,355,417
TRINIDAD & TOBAGO-0.0%
B.W.I.A. International Airways, Ltd.
(a)(d) 2,727,272 0
TURKEY-0.5%
Petkim Petrokimya Holding AS 69,459,000 954,401
Turkiye Is Bankasi Series C 91,801,600 1,631,120
------------
2,585,521
UNITED KINGDOM-8.9%
Anglian Water Plc. 200,000 2,211,689
Birkby Plc. 811,000 3,765,066
British Airways Plc. 813,000 5,610,262
British Energy Plc. 667,000 5,677,878
Energis Plc. (a) 200,000 4,770,186
Mersey Docks & Harbour Co. 428,650 3,591,472
National Grid Group Plc. 657,000 4,572,593
National Power Plc. 831,000 6,052,146
PowerGen Plc. 187,600 2,022,811
Stagecoach Holdings Plc. 1,200,000 4,298,843
------------
42,572,946
UNITED STATES-1.0%
Near East International LLC (a)(d) 10 1,000,000
United Customer Management
Solutions (a)(b) 17,862 3,929,640
------------
4,929,640
10
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
VENEZUELA-0.1%
Mercantil Servicios Financieros, CA
(ADR) 82,500 $244,720
------------
U.S. $ VALUE
- -------------------------------------------------------------------------
TOTAL INVESTMENTS-97.9%
(cost $374,037,965) $469,485,401
Other assets less liabilities-2.1% 10,134,890
NET ASSETS-100% $479,620,291
(a) Non-income producing security.
(b) Illiquid securities, valued at fair value (see Note A).
(c) Securities are exempt from registration under Rule 144A of the
Securitities Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30, 1999
these securities amounted to $7,127,060 or 1.5% of net assets.
(d) Restricted and illiquid securities, valued at fair value (see Notes A &G).
Glossary of terms:
ADR- American Depositary Receipt.
GDR- Global Depositary Receipt.
NY Shares- New York Registered Shares.
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $374,037,965) $469,485,401
Cash 721,186
Foreign cash, at value (cost $8,908,764) 8,911,691
Receivable for investment securities sold 6,434,804
Dividends and interest receivable 1,375,427
Receivable for capital stock sold 478,236
Foreign taxes receivable 323,810
Total assets 487,730,555
LIABILITIES
Payable for investment securities purchased 5,787,080
Payable for capital stock redeemed 1,143,942
Advisory fee payable 388,010
Distribution fee payable 194,015
Accrued expenses 597,217
Total liabilities 8,110,264
NET ASSETS $479,620,291
COMPOSITION OF NET ASSETS
Capital stock, at par $ 40,861
Additional paid-in capital 361,800,378
Accumulated net investment loss (425,731)
Accumulated net realized gain on investments and
foreign currency transactions 22,818,208
Net unrealized appreciation of investments and
foreign currency denominated assets and
liabilities 95,386,575
$479,620,291
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($340,193,716 / 28,742,845 shares of capital stock
issued and outstanding) . $11.84
Sales Charge--4.25% of public offering price .53
Maximum offering price $12.37
CLASS B SHARES
Net asset value and offering price per share
($117,419,840 / 10,206,563 shares of capital stock
issued and outstanding) $11.50
CLASS C SHARES
Net asset value and offering price per share
($20,397,220 / 1,774,377 shares of capital stock
issued and outstanding) $11.50
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,609,515 / 136,805 shares of capital stock
issued and outstanding) $11.77
See notes to financial statements.
12
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1999 ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $1,089,797) $ 9,620,671
Interest 237,493 $ 9,858,164
EXPENSES
Advisory fee 5,177,294
Distribution fee - Class A 1,107,619
Distribution fee - Class B 1,250,782
Distribution fee - Class C 217,886
Transfer agency 1,358,590
Custodian 1,220,392
Printing 215,031
Administrative 173,000
Audit and legal 72,695
Registration 55,258
Amortization of organization expenses 40,877
Directors' fees 22,000
Miscellaneous 45,783
Total expenses before interest and waivers
assumed by adviser (see Note B) 10,957,207
Interest expense 38,057
Total expenses before waivers assumed by adviser 10,995,264
Less: Expense offset arrangement (see Note B) (75,016)
Total expenses 10,920,248
Net investment loss (1,062,084)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments 26,673,782
Net realized loss on foreign currency
transactions (42,036)
Net change in unrealized appreciation of:
Investments 3,635,095
Foreign currency denominated assets
and liabilities 17,152
Net gain on investments and foreign currency
transactions 30,283,993
NET INCREASE IN NET ASSETS FROM OPERATIONS $29,221,909
See notes to financial statements.
13
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1999 1998
---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss) $ (1,062,084) $ 4,543,175
Net realized gain on investments and foreign
currency transactions 26,631,746 79,032,204
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency denominated assets and
liabilities 3,652,247 (26,242,066)
Net increase in net assets from operations 29,221,909 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 (94,004) (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 (123,251,264) (20,593,202)
Total decrease (173,038,166) (43,609,582)
NET ASSETS
Beginning of year 652,658,457 696,268,039
End of year (including undistributed net
investment income (loss) of ($425,731)
and $14,037,753, respectively) $479,620,291 $652,658,457
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 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 were
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 investments at period end exchange rates are
reflected as a component of unrealized appreciation of investments. Net
currency gains and losses from valuing foreign currency denominated assets and
liabilities other than investments at period end ex-
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
change rates are reflected as a component of unrealized appreciation of foreign
currency denominated assets and liabilities.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if 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 net assets 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. During the current fiscal year, permanent differences,
primarily due to foreign currency losses and a reclassification of
distributions, resulted in a net decrease in undistributed net investment
income and a corresponding increase in accumulated net realized gains 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 $173,000 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, 1999.
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 $817,915 for the year ended June 30, 1999.
For the year ended June 30, 1999, the Fund's expenses were reduced by $75,016
under an expense offset arrangement with Alliance Fund Services.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $35,878
from the sale of Class A shares and $1,421, $328,557 and $18,552 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, 1999.
Brokerage commissions paid on investment transactions for the year ended June
30, 1999, amounted to $2,195,358, of which $8,404 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
16
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
daily net assets attributable to Class A shares and 1% of the average daily net
assets attributable to the Class B and Class C shares. There is no distribution
fee on the Advisor Class shares. The fees are accrued daily and paid monthly.
The Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has advised the Fund that it has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $6,347,503 and
$637,365 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 $294,756,097 and $508,378,776,
respectively, for the year ended June 30, 1999. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
June 30, 1999.
At June 30, 1999, 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 $123,930,667 and gross unrealized
depreciation of investments was $28,483,231 resulting in net unrealized
appreciation of $95,447,436, excluding foreign currency transactions.
Capital losses incurred after October 31, within the Fund's fiscal year are
deemed to arise on the first business day of the following fiscal year. The
Fund incurred and elected to defer post October currency losses of $1,030,211
for the year ended June 30, 1999.
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, 1999, the Fund had no outstanding forward exchange currency
contracts.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 20,129,070 39,736,256 $ 220,466,098 $ 492,815,245
Shares issued in
reinvestment of
dividends and
distributions 3,254,908 2,835,212 32,569,021 30,762,050
Shares converted
from Class B 64,507 10,886 724,710 137,149
Shares redeemed (31,626,451) (48,013,384) (346,387,403) (601,039,158)
Net decrease (8,177,966) (5,431,030) $ (92,627,574) $ (77,324,714)
CLASS B
Shares sold 1,893,631 5,439,686 $ 20,245,038 $ 68,476,838
Shares issued in
reinvestment of
dividends and
distributions 1,107,404 814,878 10,841,481 8,662,153
Shares converted
to Class A (66,200) (11,023) (724,710) (137,149)
Shares redeemed (5,371,341) (2,894,997) (57,094,013) (35,371,129)
Net increase
(decrease) (2,436,506) 3,348,544 $ (26,732,204) $ 41,630,713
CLASS C
Shares sold 814,567 9,900,745 $ 8,966,825 $ 123,043,119
Shares issued in
reinvestment of
dividends and
distributions 227,787 142,928 2,230,039 1,519,326
Shares redeemed (1,421,031) (8,882,163) (15,010,418) (110,861,845)
Net increase
(decrease) (378,677) 1,161,510 $ (3,813,554) $ 13,700,600
ADVISOR CLASS
Shares sold 387,963 112,659 $ 4,202,308 $ 1,479,232
Shares issued in
reinvestment of
dividends and
distributions 18,391 12,770 183,179 137,919
Shares redeemed (405,419) (17,793) (4,463,419) (216,952)
Net increase
(decrease) 935 107,636 $ (77,932) $ 1,400,199
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,
18
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, Ltd. 2/21/95 $2,999,999
Near East International LLC 9/29/95 1,000,000
Ontario Quinta AVV 8/15/94 2,052,257
Sun Interbrew, Ltd. (GDR) Non-voting shares 6/22/99 975,000
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, 1999 was $4,711,000 representing 1.0%
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. During the year ended
June 30, 1999, the Fund had borrowings outstanding for twenty-eight days the
weighted average interest on such borrowings was 5.24%. The Fund had no
borrowing outstanding on June 30, 1999.
19
FINANCIAL HIGHLIGHTS ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEAR ENDED JUNE 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.67 $13.26 $12.13 $10.18 $9.75
INCOME FROM INVESTMENT OPERATIONS
Net investment income -0-(a) .10(a) .15(a) .10(a) .06
Net realized and unrealized gain
on investments and foreign currency
transactions .93 .85 2.55 1.85 .37
Net increase in net asset value
from operations .93 .95 2.70 1.95 .43
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.12) (.18) (.15) -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 (1.76) (1.54) (1.57) -0- -0-
Net asset value, end of year $11.84 $12.67 $13.26 $12.13 $10.18
TOTAL RETURN
Total investment return based on net
asset value(b) 9.86% 9.11% 25.16% 19.16% 4.41%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $340,194 $467,960 $561,793 $672,732 $13,535
Ratio of expenses to average net assets 1.92%(c) 1.73% 1.72% 1.87% 2.56%
Ratio of expenses to average net assets
excluding interest expense 1.92%(c) 1.73% 1.71% 1.85% 2.56%
Ratio of net investment income (loss)
to average net assets (.01)% .80% 1.27% .95% .66%
Portfolio turnover rate 58% 53% 48% 28% 36%
</TABLE>
See footnote summary on page 23.
20
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
YEAR ENDED JUNE 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.37 $13.04 $11.96 $10.10 $9.74
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.08)(a) .02(a). 08(a) (.02)(a) .02
Net realized and unrealized gain
on investments and foreign currency
transactions .89 .82 2.50 1.88 .34
Net increase in net asset value from
operations .81 .84 2.58 1.86 .36
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 year $11.50 $12.37 $13.04 $11.96 $10.10
TOTAL RETURN
Total investment return based on net
asset value(b) 8.91% 8.34% 24.34% 18.42% 3.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $117,420 $156,348 $121,173 $83,050 $79,359
Ratio of expenses to average net assets 2.63%(c) 2.45% 2.43% 2.83% 3.27%
Ratio of expenses to average net assets
excluding interest expense 2.63%(c) 2.45% 2.42% 2.82% 3.27%
Ratio of net investment income (loss)
to average net assets (1.43)% .20% .66% (.20)% .01%
Portfolio turnover rate 58% 53% 48% 28% 36%
</TABLE>
See footnote summary on page 23.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------
FEBRUARY 8,
1995 (D)
TO
YEAR ENDED JUNE 30, JUNE 30,
------------------------------------------------- ------------
1999 1998 1997 1996 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) (.08)(a) .05(a) .12(a) .03(a) .05
Net realized and unrealized gain
on investments and foreign currency
transactions .89 .79 2.46 1.83 .52
Net increase in net asset value from
operations .81 .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 $11.50 $12.37 $13.04 $11.96 $10.10
TOTAL RETURN
Total investment return based on net
asset value(b) 8.91% 8.34% 24.33% 18.42% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $20,397 $26,635 $12,929 $2,383 $338
Ratio of expenses to average net assets 2.63%(c) 2.44% 2.42% 2.57% 1.03%(e)
Ratio of expenses to average net assets
excluding interest expense 2.62%(c) 2.44% 2.41% 2.57% 1.03%(e)
Ratio of net investment income (loss)
to average net assets (1.44)% .38% 1.06% .63% 1.04%(e)
Portfolio turnover rate 58% 53% 48% 28% 36%
</TABLE>
See footnote summary on page 23.
22
ALLIANCE WORLDWIDE PRIVATIZATION FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIO
ADVISOR CLASS
------------------------------------
OCTOBER 2,
1996 (D)
TO
YEAR ENDED JUNE 30, JUNE 30,
------------------------ ----------
1999 1998 1997
----------- ----------- ----------
Net asset value, beginning of period $12.63 $13.23 $12.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) .02 .19 .18
Net realized and unrealized gain
on investments and foreign currency
transactions .93 .80 2.52
Net increase in net asset value from
operations .95 .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 $11.77 $12.63 $13.23
TOTAL RETURN
Total investment return based on net
asset value(b) 10.12% 9.48% 25.24%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,610 $1,716 $374
Ratio of expenses to average net assets 1.62%(c) 1.45% 1.96%(e)
Ratio of expenses to average net assets
excluding interest expense 1.62%(c) 1.45% 1.95%(e)
Ratio of net investment income
to average net assets .37% 1.48% 2.97%(e)
Portfolio turnover rate 58% 53% 48%
(a) Based on average shares outstanding.
(b) 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.
(c) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the year ended June 30, 1999 the ratios of expenses to
average net assets were 1.91%, 2.62%, 2.61%, and 1.61% for Class A, B, C and
Advisor Class shares, respectively.
(d) Commencement of distribution.
(e) Annualized.
23
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, 1999, the results 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, 1999 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
August 16, 1999
TAX INFORMATION (UNAUDITED)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $41,871,236 of long term capital gain
distributions during the fiscal year ended June 30, 1999, subject to the
maximum tax rate of 20%.
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, 1999 is $1,222,125. The gross
foreign source income for information reporting purposes is $10,947,961.
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 2000.
24
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
MICHAEL LEVY, ASSISTANT VICE PRESIDENT
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 LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
25
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 U.S. Government Fund
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
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors 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
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
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
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
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
General Municipal Portfolio
Government Portfolio
26
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.
WWPAR699
