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INTERNATIONAL MID CAP
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Alliance Worldwide
Privatization Fund
Annual Report
June 30, 2000
[GRAPHIC OMITTED]
Alliance Capital Management [LOGO](R)
The Investment Professional's Choice
<PAGE>
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
LETTER TO SHAREHOLDERS
August 3, 2000
Dear Shareholder:
This report provides you with the performance and market activity for Alliance
Worldwide Privatization Fund (the "Fund") for the annual reporting period ended
June 30, 2000.
Investment Objectives and Policies
Alliance Worldwide Privatization Fund is an open end fund that seeks to provide
investors with long-term capital appreciation. As a fundamental policy, the Fund
invests at least 65% of its total assets in equity securities issued by
enterprises that are undergoing, or have undergone, privatization, although
normally significantly more of its assets will be invested in such securities.
Investment Results
The following table provides performance data for the Fund and its benchmarks as
represented by the Morgan Stanley Capital International ("MSCI") World Index
(minus the U.S.) and the MSCI Emerging Markets Free ("EMF") Index for the six-
and 12-month periods ended June 30, 2000. It also provides performance results
for the Fund's composite benchmark, a 65%/35% composite of the MSCI World Index
(minus the U.S.) and the MSCI EMF Index, respectively.
Investment Results*
Periods Ended June 30, 2000
-------------------
Total Returns
-------------------
6 Months 12 Months
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Alliance Worldwide
Privatization Fund
Class A -8.99% 24.26%
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Class B -9.31% 23.45%
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Class C -9.31% 23.37%
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MSCI World
Index
(minus the U.S.) -2.84% 19.09%
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MSCI Emerging
Markets Free
Index -7.99% 9.47%
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65%/35%
Composite:
65% MSCI World
Index
(minus the U.S.) /
35% MSCI
Emerging Markets
Free Index -4.64% 15.72%
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* The Fund's investment results are total returns for the periods shown and
are based on the net asset value of each class of shares as of June 30,
2000. 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. Returns for the Fund include the
reinvestment of any distributions paid during each period. Past
performance is no guarantee of future results.
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 EMF Index is
an unmanaged, market capitalization-weighted index composed of companies
representative of the market structure of 26 emerging market countries in
Europe, Latin America, and the Pacific Basin. An investor cannot invest
directly in an index and its results are not indicative of the performance
for any specific investment, including Alliance Worldwide Privatization
Fund.
Additional investment results appear on pages 4-7.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
During the 12-month period ended June 30, 2000, the Fund significantly
outperformed its composite benchmark. The Fund's stock selection was the
principal reason for the strong investment results. In particular, the Fund's
high relative weighting in telecommunication stocks and in major developed
markets, such as in the MSCI EAFE countries, were positive factors. Conversely,
during the six-month period, the Fund's relative weighting in European and
Japanese telecommunication and cable stocks were the major reason for the Fund's
underperformance.
Overall asset allocation had a neutral impact on performance during the
six-month period under review. The portfolio's relative underweight position in
Japanese equities and the relative overweight position in Latin American
equities were positive contributors to performance. The relative overweighting
of the other emerging-market regions had a negative effect at the asset
allocation level.
Review and Outlook
Equity returns during the six-month period ended June 30, 2000 were negative as
global markets went through a period of correction. Following a prolonged phase
of exceptionally strong stock market performance, investors became concerned
that equity valuations were excessive, resulting in a bout of profit taking with
aggressive selling centered around the technology, media and telecommunication
sectors. Increased risk aversion led to a rotation out of growth oriented and
emerging-market assets in favor of value oriented and defensive assets.
Upwardly trending global interest rates were a further drag on equity returns.
Interest rate rises resulted from the strength of the U.S. economy, combined
with accelerations in European activity, a robust Asian region underpinned by
higher domestic consumption and improved outlooks for Japan and Latin America.
Additional fears that inflationary pressure might return to the system further
negatively impacted stock market performance.
The overall outlook for the world economy on balance remains positive. Signs
that the U.S. economy has started to respond to Federal Reserve action has led
most commentators to suggest that the U.S. will see a "soft-landing" with
sustained low inflation growth. European and Asian business and consumer
confidence continue to improve and a strong showing from Japan's opposition
Democratic Party in recent elections may advance the country's reform,
liberalization and privatization process. The prospects for equities look bright
as valuations across the major markets look appealing following the recent
market correction. Additionally, corporate profitability growth should be
underpinned by the bright macro outlook and by productivity gains. In our view,
fundamental investors are set to be the major beneficiaries as concerns
surrounding the interest rate cycle are replaced by a focus on earnings numbers.
Privatization activity has begun to accelerate following a slow start to the
year. Asian activity has been particularly strong with China being a notable
participant. Encouragingly, we continue to see governments across the
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2 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
globe rolling out privatization programs and adopting the privatization ethos.
The expansion of industry representation persists as governments seek to extend
privatization across the broader economy.
We expect the Fund will be a beneficiary of the strength in privatization
activity, and we look forward to participating in the most attractive deals the
market offers. We maintain our aim of providing a well diversified, core
international fund with exposure to the most exciting and rapidly growing area
of the financial markets. Presently, the portfolio maintains positions in
approximately 40 countries with close to 100 different issues and representation
in approximately 40 different industries.
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 the 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
[PHOTO OMITTED] John D.
Carifa
[PHOTO OMITTED] Mark H.
Breedon
Portfolio Manager, Mark H. Breedon, has over 23 years of investment experience.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 3
<PAGE>
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PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE WORLDWIDE PRIVATIZATION FUND
GROWTH OF A $10,000 INVESTMENT
6/30/94* TO 6/30/00
[The following was represented by a bar chart in the printed material.]
<PLOT POINTS TO COME>
Alliance Worldwide Privatization Fund Class A: $22,213
MSCI World Index (minus the U.S.): $18,154
MSCI EMF Index: $10,502
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 6/30/00)
as compared to the performance of appropriate indices. 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 these 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 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 EMF Index is an unmanaged, market capitalization-weighted index
composed of companies representative of the market structure of 26 emerging
market countries in Europe, Latin America, and the Pacific Basin.
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. An investor cannot invest directly in an index and its results are
not indicative of any specific investment, including Alliance Worldwide
Privatization Fund.
* Closest month-end after Fund's Class A share inception date of 6/2/94.
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4 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
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PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE WORLDWIDE PRIVATIZATION FUND
HISTORY OF RETURNS
ANNUAL PERIODS ENDED 6/30
Alliance Worldwide Privatization Fund
Composite*
[BAR CHART OMITTED]
Alliance Worldwide Privatization Fund - Yearly Periods Ended 6/30
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Alliance Worldwide Privatization Fund Composite*
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6/30/94** -2.50% -0.20%
6/30/95 4.41% 1.67%
6/30/96 19.16% 11.87%
6/30/97 25.16% 13.50%
6/30/98 9.11% -9.40%
6/30/99 9.86% 15.04%
6/30/00 24.26% 15.72%
Past performance in no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on the
net asset value. 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. Returns for the Fund
include the reinvestment of any distributions paid during the period.
* Composite: 65% MSCI World Index (minus the U.S.) / 35% MSCI Emerging
Markets Free ("EMF") Index. 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 EMF Index is an unmanaged, market capitalization-weighted index
composed of companies representative of the market structure of 26
emerging market countries in Europe, Latin America, and the Pacific Basin.
An investor cannot invest directly in an index and its results are not
indicative of the performance for any specific investment, including
Alliance Worldwide Privatization Fund.
** The Fund's return for the period ended 6/30/94 is from the Fund's
inception date of 6/2/94. The benchmark's return for the period ended
6/30/94 is from 5/31/94 through 6/30/94.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 5
<PAGE>
-----------------
PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
June 30, 2000
INCEPTION DATE PORTFOLIO STATISTICS
(Class A Shares) Net Assets ($mil): $597.6
6/2/94 Median Market Capitalization ($mil): $21,994
[PIE CHART OMITTED] [PIE CHART OMITTED]
SECTOR BREAKDOWN SECURITY BREAKDOWN
8.30% Basic Industry 8.59% American Depositary Receipt
0.47% Capital Goods 82.49% Common Stock
0.17% Consumer Manufacturing 2.44% Global Depositary Receipt
20.02% Consumer Service 2.35% Preferred Stock
3.72% Consumer Staples 4.13% Time Deposit
2.91% Energy
14.84% Finance
4.90% Health Care
1.71% Miscellaneous Consumer
3.31% Multi-Industry
10.68% Technology
1.48% Transportation
23.36% Utilities
4.13% Short-Term
All data as of June 30, 2000. The Fund's sector and security breakdowns may vary
over time. These breakdowns are expressed as a percentage of total investments.
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6 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
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INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS AS OF JUNE 30, 2000
Class A Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 24.26% 18.93%
5 Years 17.31% 16.30%
Since Inception* 14.36% 13.56%
Class B Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 23.45% 19.45%
5 Years 16.49% 16.49%
Since Inception* 13.56% 13.56%
Class C Shares
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Without Sales Charge With Sales Charge
1 Year 23.37% 22.37%
5 Years 16.47% 16.47%
Since Inception* 16.44% 16.44%
The Fund's investment results represent average annual total returns. The
returns reflect reinvestment of dividends and/or capital gains distributions in
additional shares without and with the effect of the 4.25% maximum front-end
sales charge for Class A or applicable contingent deferred sales charge for
Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4); and for Class C shares (1%
year 1). Returns for Class A shares do not reflect the imposition of the 1 year
1% contingent deferred sales charge for accounts over $1,000,000. Total return
for Advisor Class shares will differ due to different expenses associated with
that class.
Substantially all of the Fund's assets will be invested in foreign securities
which may magnify these fluctuations due to changes in foreign exchange rates
and the possibility of substantial volatility due to political and economic
uncertainties in foreign countries.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception Date: 6/2/94, Class A, Class B; 2/8/95 Class C.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 7
<PAGE>
--------------------
TEN LARGEST HOLDINGS
--------------------
TEN LARGEST HOLDINGS
June 30, 2000
Percent of
Company U.S. $ Value Net Assets
================================================================================
NTT Docomo, Inc.
Network, Inc.--Provides various
telecommunication services including
cellular phones, car phones, pagers
and packet communication services. $ 23,902,021 4.0%
--------------------------------------------------------------------------------
United Pan-Europe Communications
NV--Owns and operates broadband
communucations networks in various
countries in Europe and Israel. 23,093,254 3.9
--------------------------------------------------------------------------------
Sanofi-Synthelabo, SA--The company's
principle area of business is ethical
pharmaceuticals. The core therapeutic
areas are cardiovascular disease and
thrombosis, diseases of the central
nervous system, cancer, and internal
medicine. 20,259,306 3.4
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STMicroelectronics NV--Designs,
develops, manufactures and markets
semiconductor integrated circuits
and discrete devices. 19,527,919 3.3
--------------------------------------------------------------------------------
Vodafone Airtouch Plc.--Provides
mobile telecommunications services,
including paging, digital and cellular
telephones. 18,080,322 3.0
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Akzo Nobel NV--Produces and markets
chemicals, coatings, polymers,
catalysts, pulp and paper chemicals,
salt base chemicals, paint,
manufactures polymers, catalysts,
pulp and paper chemicals, salt, base
chemicals, paint, automobile
finishes, industrial coatings,
resins, oral contraceptives,
antidepressants, cardiovascular
drugs, diagnostic kits, home
pregnancy kits and veterinary drugs. 17,748,986 3.0
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Japan Tobacco, Inc.--Manufactures
and distributes tobacco products
under exclusive government contract
within Japan. 17,717,462 3.0
--------------------------------------------------------------------------------
Nippon Telegraph & Telephone Corp.--
Provides telecommunication services,
including telephone, telegraph,
leased circuits and other related
services within Japan. 17,082,858 2.8
--------------------------------------------------------------------------------
Daiwa Securities Group, Inc.--Provides
financial services such as brokerage,
underwriting, and distribution of
securities. 16,645,155 2.8
--------------------------------------------------------------------------------
Telefonos de Mexico, SA Cl. L (ADR)--
Provides domestic and international
long-distance, as well as local
telephone service throughout Mexico. 14,647,878 2.4
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$188,705,161 31.6%
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8 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
----------------------
SECTOR DIVERSIFICATION
----------------------
SECTOR DIVERSIFICATION
June 30, 2000
Percent of
U.S. $ Value Net Assets
--------------------------------------------------------------------------------
Basic Industries $ 49,246,890 8.2%
--------------------------------------------------------------------------------
Capital Goods 2,816,509 0.5
--------------------------------------------------------------------------------
Consumer Manufacturing 1,000,000 0.2
--------------------------------------------------------------------------------
Consumer Services 118,778,750 19.9
--------------------------------------------------------------------------------
Consumer Staples 22,064,690 3.7
--------------------------------------------------------------------------------
Energy 17,293,981 2.9
--------------------------------------------------------------------------------
Finance 88,065,019 14.7
--------------------------------------------------------------------------------
Healthcare 29,046,356 4.8
--------------------------------------------------------------------------------
Miscellaneous Consumer 10,141,623 1.7
--------------------------------------------------------------------------------
Multi-Industry 19,630,773 3.3
--------------------------------------------------------------------------------
Technology 63,346,229 10.6
--------------------------------------------------------------------------------
Transportation 8,784,661 1.5
--------------------------------------------------------------------------------
Utilities 138,629,245 23.2
--------------------------------------------------------------------------------
Total Investments* 568,844,726 95.2
--------------------------------------------------------------------------------
Cash and receivables, net of liabilities 28,771,068 4.8
--------------------------------------------------------------------------------
Net Assets $ 597,615,794 100.0%
--------------------------------------------------------------------------------
* Excludes short-term obligations.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 9
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
June 30, 2000
Company Shares U.S. $ Value
--------------------------------------------------------------------------------
Common Stocks & Other Investments-95.2%
Argentina-0.7%
Nortel Inversora, SA (ADR).................. 218,000 $ 4,142,000
-------------
Australia-1.4%
Commonwealth Serum Lab, Ltd. ............... 325,000 6,412,300
TABCORP Holdings, Ltd. ..................... 340,000 1,949,424
-------------
8,361,724
-------------
Austria-1.3%
Austria Tabakwerke AG....................... 58,600 2,165,907
Bank Austria AG............................. 118,600 5,764,156
-------------
7,930,063
-------------
Brazil-5.8%
Celular CRT Participacoes, SA pfd(a)........ 894,362 391,764
Companhia Paranaense de Energia (ADR)(a).... 215,000 2,002,188
Companhia Riograndense de
Telecomunicacoes Cl. A pfd(a)............ 94,362 31,916
Embratel Participacoes, SA (ADR)............ 145,000 3,425,625
Gerdau, SA pfd.............................. 493,583,870 6,020,984
Gerdau Metalurgica, SA pfd.................. 346,018,968 7,482,528
Investimentos Itau, SA...................... 800,000 776,268
Tele Celular Sul Participacoes, SA(a)....... 78,900 3,570,225
Tele Centro Sul Participacoes, SA (ADR)..... 71,000 5,187,438
Telemig Celular Participacoes, SA (ADR)..... 26,300 1,880,450
Telesp Celular Participacoes, SA............ 85,000 3,814,375
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34,583,761
-------------
Chile-0.7%
Compania de Telecommunicaciones de
Chile (ADR).............................. 240,000 4,350,000
-------------
China-0.3%
Beijing Capital International Airport
Company, Ltd.(a)......................... 9,508,000 1,805,123
-------------
Croatia-0.4%
Pliva D.D. (GDR)(a)......................... 230,000 2,374,750
-------------
Cyprus-0.1%
Premier Telesports(a)(b).................... 85,000 404,855
-------------
Czech Republic-0.5%
Ceske Radiokommunikace AS(a)................ 70,000 3,119,966
-------------
Egypt-0.4%
Eastern Company for Tobacco & Cigarettes.... 100,000 2,181,320
-------------
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10 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares U.S. $ Value
--------------------------------------------------------------------------------
Finland-2.1%
Sonera Oyj.................................. 271,500 $ 12,349,625
-------------
France-10.6%
BNP Paribas................................. 119,300 11,455,434
Eramet SLN.................................. 57,500 2,437,465
New Shares(a)............................ 579 23,916
Sanofi-Synthelabo, SA....................... 426,200 20,259,306
STMicroelectronics NV....................... 310,600 19,527,919
Total Fina, Elf Series B.................... 60,622 9,274,412
-------------
62,978,452
-------------
Germany-2.2%
Deutsche Lufthansa AG....................... 143,000 3,337,434
MVV Energie AG........................... 277,400 3,699,517
Stinnes AG.................................. 302,000 6,041,389
-------------
13,078,340
-------------
Ghana-0.1%
Social Security Bank, Ltd.(a)............... 2,000,000 703,802
-------------
Greece-0.4%
Hellenic Telecommunications Organization,
SA (ADR)(a).............................. 187,800 2,288,813
-------------
Hong Kong-3.4%
China Merchants Holdings International, Ltd. 2,262,000 1,552,396
China Mobile (Hong Kong), Ltd.(a)........... 1,116,000 9,842,217
China Resources Enterprises, Ltd. .......... 2,764,000 3,315,169
Citic Pacific, Ltd. ........................ 1,028,000 5,393,522
-------------
20,103,304
-------------
India-1.3%
ICICI Bank, Ltd. (ADR)(a)................... 183,100 2,654,950
ICICI, Ltd. (ADR)........................... 102,000 1,912,500
Mahanagar Telephone Nigam, Ltd. (GDR)....... 335,700 3,419,944
-------------
7,987,394
-------------
Italy-2.3%
AEM SpA .................................... 1,284,000 5,076,024
Enel SpA ................................... 950,000 4,199,061
ENI SpA .................................... 800,000 4,610,584
-------------
13,885,669
-------------
Japan-16.3%
Daiwa Securities Group, Inc. ............... 1,262,000 16,645,155
Japan Tobacco, Inc. ........................ 2,020 17,717,462
Nippon Telegraph & Telephone Corp. ......... 1,286 17,082,858
Nomura Securities Co., Ltd. ................ 464,000 11,343,728
NTT Data Corp. ............................. 1,042 10,700,269
NTT Docomo, Inc. ........................... 884 23,902,021
-------------
97,391,493
-------------
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 11
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares U.S. $ Value
--------------------------------------------------------------------------------
Lithuania-0.5%
Lietuvos Telekomas(a) ...................... 441,000 $ 2,932,650
-------------
Malawi-0.0%
Press Corp., Ltd. (GDR)(a)(c) .............. 85,000 255,000
-------------
Malaysia-0.6%
Telekom Malaysia Berhad .................... 1,000,000 3,447,368
-------------
Mexico-5.5%
Grupo Financiero Bancomer, SA de CV ........ 1,550,000 787,362
Grupo Financiero Banorte, SA de CV Series O(a) 6,635,277 9,167,913
Grupo Iusacell, SA(a) ...................... 212,614 3,322,094
Telefonos de Mexico, SA Cl. L (ADR) ........ 256,418 14,647,878
Tubos de Acero de Mexico, SA (ADR) ......... 338,000 4,689,750
-------------
32,614,997
-------------
Netherlands-11.0%
Akzo Nobel NV .............................. 418,700 17,748,986
ING Groep NV ............................... 179,034 12,074,784
United Pan-Europe Communications NV(a) ..... 885,080 23,093,254
World Online International NV(a) ........... 1,077,300 12,930,573
-------------
65,847,597
-------------
Peru-0.3%
Explosivos, SA(b) .......................... 1,780,057 1,595,033
Ferreyros, SA(a) ........................... 1,430,661 455,350
Tecsur, SA Cl. B(a)(b) ..................... 199,535 52,637
-------------
2,103,020
-------------
Poland-1.1%
Orbis, SA(a) ............................... 477,220 3,692,839
Polski Koncern Naftowy, SA (GDR) ........... 323,000 3,036,200
-------------
6,729,039
-------------
Portugal-0.6%
Soporcel-Sociedade Portuguesa de
Papel, SA(a) ............................ 293,450 3,801,750
-------------
Romania-0.0%
Societatea, SA(a)(b) ....................... 30,454 114,033
-------------
Russia-0.5%
Mobile Telesystems (ADR)(a) ................ 123,000 2,905,875
-------------
Singapore-1.9%
Development Bank of Singapore, Ltd. ........ 292,535 3,759,350
SIA Engineering Company, Ltd.(a) ........... 2,508,000 2,816,510
Singapore Airport Terminal Services, Ltd.(a) 1,572,000 1,910,970
Singapore Press Holdings, Ltd. ............. 199,000 3,110,275
-------------
11,597,105
-------------
--------------------------------------------------------------------------------
12 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares U.S. $ Value
--------------------------------------------------------------------------------
South Korea-4.8%
Housing Commercial Bank, Korea (GDR)(d) .... 232,400 $ 5,420,730
Kookmin Bank ............................... 186,000 2,368,736
Korea Telecom Corp. (ADR) .................. 108,189 5,233,643
Pohang Iron & Steel Co., Ltd. .............. 19,600 1,708,616
SK Telecom Co., Ltd. ....................... 42,000 13,748,571
-------------
28,480,296
-------------
Spain-4.5%
Aldeasa, SA ................................ 136,100 2,366,092
Amadeus Global Travel Distribution, SA ..... 890,900 10,141,622
Indra Sistemas, SA ......................... 217,800 4,971,132
Repsol, SA ................................. 275,700 5,475,873
Terra Networks, SA(a) ...................... 98,400 3,796,302
-------------
26,751,021
-------------
Sweden-1.6%
Tele1 Europe Holding AB(a) ................. 761,120 9,305,488
-------------
Switzerland-0.4%
Swisscom AG ................................ 7,000 2,421,478
-------------
Taiwan-2.2%
China Steel Corp. .......................... 4,900,000 3,349,064
Taiwan Semiconductor Manufacturing Co.(a) .. 2,080,256 9,885,025
-------------
13,234,089
-------------
Trinidad & Tobago-0.0%
B.W.I.A. International Airways, Ltd.(a)(c) . 2,727,272 -0-
-------------
Turkey-0.5%
Turkiye Is Bankasi Series C ................ 151,255,200 3,230,152
-------------
United Kingdom-8.1%
BP Amoco Plc ............................... 435,000 4,171,324
British Airways Plc ........................ 676,000 3,885,310
British Energy Plc. Deferred Shares(a) ..... 667,000 -0-
British Telecommunications Plc ............. 611,000 7,892,134
Energis Plc.(a) ............................ 86,200 3,230,754
Kingston Communications (Hull) Plc.(a) ..... 164,100 1,613,308
Mersey Docks & Harbour Co. ................. 378,650 2,743,272
National Grid Group Plc .................... 657,000 5,177,242
PowerGen Plc ............................... 197,440 1,687,248
Vodafone Airtouch Plc ...................... 4,477,128 18,080,322
-------------
48,480,914
-------------
United States-0.8%
Near East International LLC(c) ............. 10 1,000,000
United Customer Management Solutions(b) .... 3,929,640 3,572,400
-------------
4,572,400
-------------
Total Common Stocks & Other Investments
(cost $444,433,176) ..................... 568,844,726
-------------
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 13
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
Company (000) U.S. $ Value
--------------------------------------------------------------------------------
Time Deposit-4.1%
Societe Generale
7.00%, 7/03/00
(cost $24,500,000) ...................... $24,500 $ 24,500,000
-------------
Total Investments-99.3%
(cost $468,933,176) ..................... 593,344,726
Other assets less liabilities-0.7% ......... 4,271,068
-------------
Net Assets-100% ............................ $ 597,615,794
=============
(a) Non-income producing security.
(b) Illiquid securities, valued at fair value.
(c) Restricted and illiquid securities, valued at fair value (see Notes A &
G).
(d) This security is exempt from registration under Rule 144A of the
Securitities Act of 1933. This security may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
June 30, 2000 this security amounted to $5,420,730 or 0.9% of net assets.
Glossary of terms:
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
See notes to financial statements.
--------------------------------------------------------------------------------
14 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
June 30, 2000
Assets
Investments in securities, at value
(cost $468,933,176) ....................................... $ 593,344,726
Cash ......................................................... 49,270
Foreign cash, at value (cost $4,794,643) ..................... 4,722,851
Receivable for capital stock sold ............................ 3,348,781
Receivable for investment securities sold .................... 2,222,615
Dividends and interest receivable ............................ 1,701,387
-------------
Total assets ................................................. 605,389,630
-------------
Liabilities
Payable for capital stock redeemed ........................... 3,377,840
Payable for investment securities purchased .................. 3,133,706
Advisory fee payable ......................................... 490,245
Distribution fee payable ..................................... 262,146
Accrued expenses ............................................. 509,899
-------------
Total liabilities ............................................ 7,773,836
-------------
Net Assets ................................................... $ 597,615,794
=============
Composition of Net Assets
Capital stock, at par ........................................ $ 44,634
Additional paid-in capital ................................... 414,778,488
Accumulated net investment loss .............................. (184,168)
Accumulated net realized gain on investments and
foreign currency transactions ............................. 58,640,082
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities ....... 124,336,758
-------------
$ 597,615,794
=============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($394,664,858 / 29,093,224 shares of capital stock
issued and outstanding) ................................... $13.57
Sales Charge--4.25% of public offering price ................. .60
------
Maximum offering price ....................................... $14.17
======
Class B Shares
Net asset value and offering price per share
($160,847,267 / 12,320,703 shares of capital stock
issued and outstanding) ................................... $13.06
======
Class C Shares
Net asset value and offering price per share
($39,597,594 / 3,035,147 shares of capital stock
issued and outstanding) ................................... $13.05
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($2,506,075 / 185,292 shares of capital stock
issued and outstanding) ................................... $13.53
======
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 15
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Year Ended June 30, 2000
Investment Income
Dividends (net of foreign taxes
withheld of $859,276) ................... $ 7,322,568
Interest ................................... 724,491 $ 8,047,059
-------------
Expenses
Advisory fee ............................... 5,639,852
Distribution fee - Class A ................. 1,152,931
Distribution fee - Class B ................. 1,466,148
Distribution fee - Class C ................. 306,261
Transfer agency ............................ 1,125,925
Custodian .................................. 885,051
Administrative ............................. 144,000
Printing ................................... 142,554
Audit and legal ............................ 107,482
Registration ............................... 71,846
Directors' fees ............................ 21,000
Miscellaneous .............................. 17,886
-------------
Total expenses ............................. 11,080,936
Less: expense offset arrangement
(see Note B) ............................ (58,217)
-------------
Net expenses ............................... 11,022,719
-------------
Net investment loss ........................ (2,975,660)
-------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions
Net realized gain on investments
(Net of foreign capital gain taxes of
$795,000) ............................. 80,702,344
Net realized gain on foreign currency
transactions ............................ 28,572
Net change in unrealized appreciation/
depreciation of:
Investments ............................. 28,964,114
Foreign currency denominated assets
and liabilities ....................... (13,931)
-------------
Net gain on investments and foreign
currency transactions ................... 109,681,099
-------------
Net Increase in Net Assets
from Operations ......................... $ 106,705,439
=============
See notes to financial statements.
--------------------------------------------------------------------------------
16 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Year Ended Year Ended
June 30, June 30,
2000 1999
============= =============
Increase (Decrease) in Net Assets
from Operations
Net investment loss .......................... $ (2,975,660) $ (1,062,084)
Net realized gain on investments and
foreign currency transactions ............. 80,730,916 26,631,746
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities ........................... 28,950,183 3,652,247
------------- -------------
Net increase in net assets from operations ... 106,705,439 29,221,909
Dividends and Distributions to
Shareholders from:
Net investment income
Class A ................................... -0- (3,960,735)
Class B ................................... -0- (437,988)
Class C ................................... -0- (94,004)
Advisor Class ............................. -0- (20,394)
Net realized gain on investments
Class A ................................ (28,814,407) (53,210,205)
Class B ................................... (10,666,722) (17,946,553)
Class C ................................... (2,042,364) (3,142,307)
Advisor Class ............................. (168,326) (196,625)
Capital Stock Transactions
Net increase (decrease) ...................... 52,981,883 (123,251,264)
------------- -------------
Total increase (decrease) .................... 117,995,503 (173,038,166)
Net Assets
Beginning of period .......................... 479,620,291 652,658,457
------------- -------------
End of period ................................ $ 597,615,794 $ 479,620,291
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 17
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
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 accounting principles generally accepted in the United States 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) or on the
Nasdaq Stock Market, Inc. 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,(but
excluding securities traded on The Nasdaq Stock Market, Inc.) 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
--------------------------------------------------------------------------------
18 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
pricing service when such prices are believed to reflect the fair market value
of such securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked price of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of investments and foreign
currency contracts, the holding of foreign currencies, currency gains or losses
realized between the trade and settlement dates on foreign security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes receivable recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized currency
gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation (depreciation) of investments and foreign currency
denominated assets and liabilities.
3. 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.
4. 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.
5. 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 Advisor Class shares (Advisor Class shares also have no
distribution fees).
6. 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
accounting principles generally accepted in the United States. To the extent
these differences are permanent, such amounts are reclassified within the
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 19
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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 tax adjustments on passive foreign
investment companies sold by the Fund, resulted in a net decrease in accumulated
net realized gain on investments and foreign currency transactions and a
corresponding decrease in accumulated net investment loss. 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 $144,000 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, 2000.
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 $700,527 for the year ended June 30, 2000.
For the year ended June 30, 2000, the Fund's expenses were reduced by $58,217
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 $21,509
from the sale of Class A shares and $31,259, $190,705 and $7,361 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, 2000.
Brokerage commissions paid on investment transactions for the year ended June
30, 2000, amounted to $1,809,942, of which $4,458 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 distribution and servicing fees 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 are no distribution and
servicing fees 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
--------------------------------------------------------------------------------
20 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
the Fund in the amount of $7,123,959 and $927,952 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 $363,636,244 and $375,840,512,
respectively, for the year ended June 30, 2000. There were no purchases or sales
of U.S. government or government agency obligations for the year ended June 30,
2000.
At June 30, 2000, 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 $163,945,645 and gross unrealized
depreciation of investments was $39,534,095 resulting in net unrealized
appreciation of $124,411,550, excluding foreign currency transactions.
Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sales commitments denominated in
foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contracts is included in realized gains or
losses on foreign currency transactions. Fluctuations in the value of forward
exchange currency contracts are recorded for financial reporting purposes as
unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or liquid assets in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from the
potential inability of a counterparty to meet the terms of a contract and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar.
At June 30, 2000 the Fund had no outstanding forward exchange currency
contracts.
NOTE E
Capital Stock
There are 12,000,000,000 shares of $0.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C, and Advisor
Class.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 21
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
<TABLE>
<CAPTION>
--------------------------- ------------------------------
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 12,390,206 20,129,070 $ 172,489,972 $ 220,466,098
------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 1,538,235 3,254,908 19,320,231 32,569,021
------------------------------------------------------------------------------------
Shares converted
from Class B 407,811 64,507 5,372,657 724,710
------------------------------------------------------------------------------------
Shares redeemed (13,985,873) (31,626,451) (191,688,292) (346,387,403)
------------------------------------------------------------------------------------
Net increase
(decrease) 350,379 (8,177,966) $ 5,494,568 $ (92,627,574)
====================================================================================
Class B
Shares sold 4,061,589 1,893,631 $ 55,599,243 $ 20,245,038
------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 783,921 1,107,404 9,516,807 10,841,481
------------------------------------------------------------------------------------
Shares converted
to Class A (415,048) (66,200) (5,372,657) (724,710)
------------------------------------------------------------------------------------
Shares redeemed (2,316,322) (5,371,341) (30,143,341) (57,094,013)
------------------------------------------------------------------------------------
Net increase
(decrease) 2,114,140 (2,436,506) $ 29,600,052 $ (26,732,204)
====================================================================================
Class C
Shares sold 2,138,310 814,567 $ 29,302,427 $ 8,966,825
------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 157,926 227,787 1,915,646 2,230,039
------------------------------------------------------------------------------------
Shares redeemed (1,035,466) (1,421,031) (14,010,354) (15,010,418)
------------------------------------------------------------------------------------
Net increase
(decrease) 1,260,770 (378,677) $ 17,207,719 $ (3,813,554)
====================================================================================
</TABLE>
--------------------------------------------------------------------------------
22 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
--------------------------- ------------------------------
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Advisor Class
Shares sold 287,647 387,963 $ 3,893,507 $ 4,202,308
------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 9,937 18,391 124,107 183,179
------------------------------------------------------------------------------------
Shares redeemed (249,097) (405,419) (3,338,070) (4,463,419)
------------------------------------------------------------------------------------
Net increase
(decrease) 48,487 935 $ 679,544 $ (77,932)
====================================================================================
</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, 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 LLC. ........... 9/29/95 1,000,000
Press Corp., Ltd. (GDR)................. 3/10/98 901,850
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, 2000 was $1,255,000 representing 0.2%
of total net assets.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 23
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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 year ended June 30, 2000.
--------------------------------------------------------------------------------
24 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------
Year Ended June 30,
2000 1999 1998 1997 1996
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,beginning of period ..... $11.84 $12.67 $13.26 $12.13 $10.18
------------------------------------------------------------------------------
Income From Investment Operations
Net investment income (loss)(a) ......... (.04) -0- .10 .15 .10
Net realized and unrealized gain on
investments and foreign currency
transactions .......................... 2.83 .93 .85 2.55 1.85
------------------------------------------------------------------------------
Net increase in net asset value
from operations ....................... 2.79 .93 .95 2.70 1.95
------------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income .... -0- (.12) (.18) (.15) -0-
Distributions from net realized gains on
investments and foreign currency
transactions .......................... (1.06) (1.64) (1.36) (1.42) -0-
------------------------------------------------------------------------------
Total dividends and distributions ....... (1.06) (1.76) (1.54) (1.57) -0-
------------------------------------------------------------------------------
Net asset value, end of period .......... $13.57 $11.84 $12.67 $13.26 $12.13
==============================================================================
Total Return
Total investment return based on
net asset value(b) .................... 24.26% 9.86% 9.11% 25.16% 19.16%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $394,665 $340,194 $467,960 $561,793 $672,732
Ratio of expenses to average net assets . 1.74%(c) 1.92%(c) 1.73% 1.72% 1.87%
Ratio of expenses to average net assets
excluding interest expense ............ 1.74%(c) 1.92%(c) 1.73% 1.71% 1.85%
Ratio of net investment income (loss) to
average net assets .................... (.31)% (.01)% .80% 1.27% .95%
Portfolio turnover rate ................. 67% 58% 53% 48% 28%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 25
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------
Year Ended June 30,
2000 1999 1998 1997 1996
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $11.50 $12.37 $13.04 $11.96 $10.10
------------------------------------------------------------------------------
Income From Investment Operations
Net investment income (loss)(a) ......... (.13) (.08) .02 .08 (.02)
Net realized and unrealized gain on
investments and foreign currency
transactions ........................... 2.75 .89 .82 2.50 1.88
------------------------------------------------------------------------------
Net increase in net asset value
from operations ........................ 2.62 .81 .84 2.58 1.86
-------------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ..... -0- (.04) (.15) (.08) -0-
Distributions from net realized gains
on investments and foreign
currency transactions .................. (1.06) (1.64) (1.36) (1.42) -0-
------------------------------------------------------------------------------
Total dividends and distributions ........ (1.06) (1.68) (1.51) (1.50) -0-
------------------------------------------------------------------------------
Net asset value, end of period ........... $13.06 $11.50 $12.37 $13.04 $11.96
==============================================================================
Total Return
Total investment return based on net asset
value(b) ............................ 23.45% 8.91% 8.34% 24.34% 18.42%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $160,847 $117,420 $156,348 $121,173 $83,050
Ratio of expenses to average net assets .. 2.47%(c) 2.63%(c) 2.45% 2.43% 2.83%
Ratio of expenses to average net assets
excluding interest expense ............. 2.47%(c) 2.63%(c) 2.45% 2.42% 2.82%
Ratio of net investment income (loss) to
average net assets ..................... (1.02)% (1.43)% .20% .66% (.20)%
Portfolio turnover rate .................. 67% 58% 53% 48% 28%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
26 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Class C
-------------------------------------------------------------------------
Year Ended June 30,
2000 1999 1998 1997 1996
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $11.50 $12.37 $13.04 $11.96 $10.10
-------------------------------------------------------------------------
Income From Investment Operations
Net investment income (loss)(a) ......... (.12) (.08) .05 .12 .03
Net realized and unrealized gain on
investments and foreign currency
transactions ........................... 2.73 .89 .79 2.46 1.83
-------------------------------------------------------------------------
Net increase in net asset value
from operations ........................ 2.61 .81 .84 2.58 1.86
-------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ..... -0- (.04) (.15) (.08) -0-
Distributions from net realized gains on
investments and foreign currency
transactions ........................... (1.06) (1.64) (1.36) (1.42) -0-
-------------------------------------------------------------------------
Total dividends and distributions ........ (1.06) (1.68) (1.51) (1.50) -0-
-------------------------------------------------------------------------
Net asset value, end of period ........... $13.05 $11.50 $12.37 $13.04 $11.96
=========================================================================
Total Return
Total investment return based on net asset
value(b) ............................... 23.37% 8.91% 8.34% 24.33% 18.42%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $39,598 $20,397 $26,635 $12,929 $2,383
Ratio of expenses to average net assets .. 2.44%(c) 2.63%(c) 2.44% 2.42% 2.57%
Ratio of expenses to average net assets
excluding interest expense ............. 2.44%(c) 2.62%(c) 2.44% 2.41% 2.57%
Ratio of net investment income (loss) to
average net assets ..................... (0.94)% (1.44)% .38% 1.06% .63%
Portfolio turnover rate .................. 67% 58% 53% 48% 28%
</TABLE>
See footnote summary on page 28.
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ALLIANCE WORLDWIDE PRIVATIZATION FUND o 27
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------
Advisor Class
------------------------------------------
October 2,
Year Ended June 30, 1996(d) to
-------------------------------- June 30,
2000 1999 1998 1997
------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,beginning of period ................ $11.77 $12.63 $13.23 $12.14
------------------------------------------
Income From Investment Operations
Net investment income(a) ........................... -0- .02 .19 .18
Net realized and unrealized gain on investments
and foreign currency transactions ................ 2.82 .93 .80 2.52
------------------------------------------
Net increase in net asset value from operations .... 2.82 .95 .99 2.70
------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ............... -0- (.17) (.23) (.19)
Distributions from net realized gains on investments
and foreign currency transactions ................ (1.06) (1.64) (1.36) (1.42)
------------------------------------------
Total dividends and distributions .................. (1.06) (1.81) (1.59) (1.61)
------------------------------------------
Net asset value, end of period ..................... $13.53 $11.77 $12.63 $13.23
==========================================
Total Return
Total investment return based on net asset value(b) 24.68% 10.12% 9.48% 25.24%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) .......... $2,506 $1,610 $1,716 $374
Ratio of expenses to average net assets ............ 1.43%(c) 1.62%(c) 1.45% 1.96%(e)
Ratio of expenses to average net assets excluding
interest expense ................................. 1.43%(c) 1.62%(c) 1.45% 1.95%(e)
Ratio of net investment income to average net assets 0.01% .37% 1.48% 2.97%(e)
Portfolio turnover rate ............................ 67% 58% 53% 48%
</TABLE>
(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, 2000 and the year ended June
30, 1999, the ratios of expenses to average net assets were 1.73% and
1.91% for Class A shares, 2.46% and 2.62% for Class B shares, 2.43% and
2.61% for Class C shares and 1.42% and 1.61% for Advisor Class shares,
respectively.
(d) Commencement of distribution.
(e) Annualized.
--------------------------------------------------------------------------------
28 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
REPORT OF INDEPENDENT
ACCOUNTANTS
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, 2000, 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 accounting principles generally accepted in the United States.
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 auditing standards generally accepted in the United States, 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, 2000 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
August 8, 2000
TAX INFORMATION (UNAUDITED)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $18,932,898 of long term capital gain
distributions during the fiscal year ended June 30, 2000, 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, 2000 is $618,737. The gross foreign source
income for information reporting purposes is $8,906,335.
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 2001.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 29
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
capitalization or market capitalization
The absolute dollar value of a company's outstanding stock. Capitalization is
determined by multiplying the amount of publicly owned shares by the stock's
current market value.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes monetary
policy and monitors the country's economic state.
equity
Another term for stock.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
portfolio
The collection of securities that make up a fund's or an investor's investments.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
--------------------------------------------------------------------------------
30 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with nearly $388
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 29 of the FORTUNE 100 companies and public retirement funds in 33
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 282
investment professionals in 22 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 6/30/00.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 31
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio, Alliance
Select Investor Series Technology Portfolio and Alliance Select Investor
Series Biotechnology Portfolio, which generally have a $10,000 minimum
initial investment) and may make subsequent investments of $50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
32 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
------------------
BOARD OF DIRECTORS
------------------
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
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 (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.
--------------------------------------------------------------------------------
ALLIANCE WORLDWIDE PRIVATIZATION FUND o 33
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Bio Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Closed-End Funds
The Spain Fund
ACM Municipal Securities Income Fund
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Government Opportunity Fund
ACM Managed Income Fund
The Southern Africa Fund
The Austria Fund
Alliance World Dollar Government Fund
ACM Managed Dollar Income Fund
The Korean Investment Fund
Alliance World Dollar Government Fund II
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
34 o ALLIANCE WORLDWIDE PRIVATIZATION FUND
<PAGE>
Alliance Worldwide Privatization Fund ---------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
---------------
Alliance Capital Management [LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
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