ALLIANCE ALL-MARKET ADVANTAGE FUND
ANNUAL REPORT
SEPTEMBER 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
November 2, 1995
Dear Shareholder:
We are pleased to provide the first annual shareholder report for Alliance
All-Market Advantage Fund, a closed-end fund trading under the New York Stock
Exchange symbol "AMO." Your Fund's investment objective is to seek long-term
growth of capital through all market conditions. AMO invests a majority of its
assets in a core portfolio of equity securities of large, intensely researched,
high quality companies that we believe are likely to achieve superior earnings
growth. The core portfolio will typically consist of the 25 companies that are
the most highly regarded at any point in time. The balance of the portfolio may
be invested in equity securities of other U.S. and non-U.S. companies that we
believe have exceptional growth potential.
The following pages include information that covers the period from November 4,
1994, when operations for the Fund began, through September 30, 1995, its
fiscal year end. During that time, AMO's net asset value (NAV) increased from
the initial public offering price of $20.00 per share to $23.78, and it
achieved a total return of +28.60%. This compares with a return of +26.99% for
the unmanaged S&P 500-stock Index over the same period. AMO has paid four
quarterly dividends thus far, which totaled $1.476 per share.
The Fund's market price ended the period at $19.50 per share, representing an
18% discount to NAV. We believe that AMO's investment flexibility, superior net
asset value performance and its distribution policy-to distribute 2% of the NAV
quarterly-has not yet been fully reflected in the Fund's share price, which has
continued to trade at a discount to NAV. These factors could eventually lead to
AMO's discount narrowing to levels somewhat more in line with other general
closed-end equity funds, though there can be no guarantees that this will
happen.
THE YEAR IN REVIEW
During the past year, the Fund benefited from a strong domestic equity market.
The portfolio was structured to take advantage of the general rise in stock
prices by staying fully invested in stocks and, to a more limited extent, in
options. Because of our positive outlook for the U.S. market during the period,
the Fund has held limited foreign securities and short positions. The sectors
of the market where we found the greatest risk versus reward characteristics
were in technology, financial services and consumer services. In these sectors
we uncovered many companies whose valuations were modest compared to their
growth rates. As of the end of the fiscal year, our estimated earnings growth
for the companies held in AMO's portfolio was in excess of twice the market's
growth for valuations that were slightly below those of the market. This is
consistent with our investment philosophy of buying "future" growth stocks at
reasonable valuations. Additionally, given the Fund's intent to limit market
risk by hedging we periodically use specialized investment techniques including
short selling and options and futures contracts.
MARKET ENVIRONMENT AND OUTLOOK
The market has benefited from 1995's modest growth and modest inflation
economy. When economic growth is neither too fast nor too slow-known as a
"Goldilocks" economy-we often see better corporate profits and higher market
valuations. As stock investors have accepted this scenario as opposed to a
"boom/bust" scenario, higher stock prices have followed.
Looking forward, we still have a positive outlook for the equity market and
believe the U.S. economy continues to be characterized by moderate growth and
moderate inflation. This environment is allowing most leading U.S. companies to
show rising earnings and cash flow and improvements in their balance sheets.
Continual cost cutting by corporations coupled with a somewhat weak dollar has
placed the U.S. in a very competitive position in relation to Europe and Japan.
We should mention that any change in Washington that demonstrates fiscal
1
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
responsibility (through Social Security, Medicare, Medicaid or balanced
budgets) would be viewed positively by the markets. Finally, while valuations
have increased this year, we believe that considering current market conditions
they are still below historical averages.
We appreciate your investment in Alliance All-Market Advantage Fund and look
forward to reporting to you again in the coming months.
Sincerely,
John D. Carifa
Chairman and President
Alfred Harrison
Senior Vice President
2
TEN LARGEST HOLDINGS*
SEPTEMBER 30, 1995 ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
COMPANY VALUE PERCENTOFNETASSETS
- ------------------------------------------------------------------------
Intel Corp. $ 4,033,462 6.8%
Philip Morris Cos., Inc. 2,773,388 4.6
Motorola, Inc. 2,717,913 4.6
Norwest Corp. 2,190,975 3.7
Airtouch Communications, Inc. 1,880,375 3.2
Applied Materials Inc. 1,820,050 3.1
Nokia Corporation ADR 1,729,800 2.9
cisco Systems, Inc. 1,683,600 2.8
Tele Communications, Inc. 1,629,250 2.7
Mc Donalds Corp. 1,623,375 2.7
$22,082,188 37.1%
* Excludes short-term obligations
3
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SHARES VALUE
- -----------------------------------------------------------------------
COMMON STOCKS-73.9%
TECHNOLOGY-32.1%
BUSINESS EQUIPMENT & SERVICES-2.1%
General Motors Cl. E 27,300 $ 1,242,150
COMMUNICATION EQUIPMENT-10.7%
cisco Systems, Inc.* 24,400 1,683,600
DSC Communications Corp.* 10,000 592,500
Ericsson (LM) Tel-SP-ADR 3,100 75,950
Rights expiring on 10/16/95*(a) 3,100 -0-
Motorola, Inc 30,300 2,314,163
Nokia Corporation ADR 24,800 1,729,800
6,396,013
COMPUTER HARDWARE-3.9%
Compaq Computer Corp.* 21,700 1,049,737
Hewlett-Packard Co 15,400 1,283,975
2,333,712
COMPUTER SOFTWARE & SERVICES-2.9%
First Data Corp 5,300 328,600
Microsoft Corp.* 9,100 823,550
Oracle Systems Corp.* 14,400 552,600
1,704,750
SEMI-CONDUCTORS & EQUIPMENT-12.5%
Applied Materials Inc.* 17,800 1,820,050
Intel Corp 57,700 3,469,212
Warrants expiring 3/14/98* 31,000 999,750
Micron Technology, Inc 14,200 1,128,900
7,417,912
19,094,537
CONSUMER PRODUCTS & SERVICES-22.4%
AIRLINES-1.1%
Northwest Airlines Co.* 15,300 650,250
BEVERAGES - SOFT DRINKS-1.8%
Coca Cola Company 5,000 345,000
PepsiCo., Inc 13,800 703,800
1,048,800
BROADCASTING & CABLE-11.0%
Airtouch Communications, Inc.* 61,400 1,880,375
Comcast Corp. C1.A 60,000 1,200,000
Cox Communications C1.A* 60,000 1,215,000
Tele Communications, Inc. C1.A* 93,100 1,629,250
Tele Comm-Liberty Media GR-A* 23,275 622,606
6,547,231
COSMETICS-0.6%
Gillette Co. 7,500 357,187
ENTERTAINMENT-1.7%
Walt Disney Co 18,000 1,032,750
RESTAURANTS-1.9%
McDonalds Corp 29,500 1,128,375
RETAILING-1.9%
Home Depot, Inc 28,100 1,120,488
TOBACCO-2.4%
Philip Morris Cos., Inc 17,200 1,436,200
13,321,281
FINANCE-11.1%
BANKING-REGIONAL-5.2%
First Chicago Corp 13,000 892,125
Norwest Corp 66,900 2,190,975
3,083,100
FINANCIAL SERVICES - DIVERSIFIED-1.0%
ITT Corp 5,000 620,000
4
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SHARES OR
CONTRACTS VALUE
- -----------------------------------------------------------------------
INSURANCE-2.8%
American International Group 7,350 $ 624,750
General Re Corp 6,800 1,026,800
1,651,550
MORTGAGE BANKING-2.1%
Federal National Mortgage Association 11,900 1,231,650
6,586,300
HEALTHCARE-6.8%
BIOTECHNOLOGY-1.7%
Amgen, Inc 20,200 1,007,475
MEDICAL SERVICES-3.0%
Columbia/HCA Healthcare Corp 24,500 1,191,312
United Healthcare Corp 12,700 620,713
1,812,025
PHARMACEUTICALS-2.1%
Merck Co 22,400 1,254,400
4,073,900
UTILITIES-1.5%
TELEPHONE UTILITY-1.5%
MCI Communications Corp 34,400 896,550
Total Common Stocks (cost $37,681,075) 43,972,568
CALL OPTIONS PURCHASED-21.3%*
AT&T Corp.
expiring Jan. '96 @ $60 140 92,750
expiring Jan '97 @ $45 520 1,189,500
cisco Systems, Inc.
expiring Jan '96 @ $40 175 519,531
Citicorp
expiring Jan '97 @ $40 200 645,000
Coca Cola Co.
expiring Jan '96 @ $45 75 183,750
CONTRACTS VALUE
- -----------------------------------------------------------------------
Conrail, Inc.
expiring Jan '96 @ $45 150 $ 362,925
Dean Witter
expiring Jan '96 @ $40 240 412,500
FNMA
expiring Jan '97 @ $70 125 450,000
General Electric Corp.
expiring Jan '97 @ $40 230 572,125
Gillette Co.
expiring Dec '95 @ $37.50 375 396,094
Hewlett Packard Co.
expiring Jan '96 @ $45 140 544,250
Intel Corp.
expiring Jan '97 @ $32.50 185 564,250
ITT
expiring Mar '96 @ $110 55 107,250
expiring Mar '97 @ $105 50 112,500
McDonalds Corp.
expiring Jan '97 @ $30 440 495,000
Merrill Lynch
expiring Jan '97 @ $40 310 755,625
Motorola, Inc.
expiring Jan '97 @ $60 170 403,750
PepsiCo., Inc.
expiring Jan '97 @ $35 410 753,375
Philip Morris Cos., Inc.
expiring Jan '97 @ $50 389 1,337,188
Schering-Plough
expiring Jan '96 @ $42.50 200 210,000
UAL Corp.
expiring Jan '96 @ $100 175 1,275,313
United Healthcare Corp.
expiring Jan '96 @ $35 600 885,000
Walt Disney Co.
expiring Jan '97 @ $40 210 427,875
Total Call Options Purchased
(cost $11,135,157) 12,695,551
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
CONTRACTS VALUE
- -----------------------------------------------------------------------
PUT OPTIONS PURCHASED-0.2%*
Standard & Poors 500 Index
expiring Dec '95 @ 525 350 $ 56,875
expiring Dec '95 @ 535 200 32,500
expiring Dec '95 @ 550 100 33,750
Total Put Options Purchased
(cost $1,368,250) 123,125
TOTAL INVESTMENTS-95.4%
(cost $50,184,482) 56,791,244
CALL OPTIONS WRITTEN-(0.1%)*
UAL Corp.
expiring Oct '95 @ $175 70 (23,625)
United Healthcare Corp.
expiring Jan '96 @ $55 300 (38,439)
Total Call Options Written
(premiums received $73,205) (62,064)
SHARES VALUE
- -----------------------------------------------------------------------
SECURITIES SOLD SHORT-(5.3%)
Catepillar, Inc. 10,500 $ (597,188)
Cyrix Corp.* 16,000 (610,000)
International Business Machines 6,400 (604,000)
Nexgen, Inc.* 32,000 (600,000)
Roadway Services, Inc. 2,500 (124,375)
Union Carbide Corp.
Hldg. Co. 15,000 (596,250)
Total Securities Sold Short
(proceeds $3,136,382) (3,131,813)
TOTAL INVESTMENTS, NET OF OUTSTANDING
CALL OPTIONS WRITTEN AND
SECURITIES SOLD SHORT-90.0% 53,597,367
Other assets less liabilities-10.0% 5,963,303
NET ASSETS-100% $59,560,670
* Non-income producing.
(a) The rights entitle the subscriber to ten shares of common stock for each
right.
Glossary:
ADR - American Depository Receipt.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $50,184,482) $56,791,244
Cash 480,220
Due from brokers for securities sold short 4,348,071
Receivable for investment securities sold 4,047,562
Dividends receivable 65,305
Deferred organization expense 16,405
Other assets 4,455
Total assets 65,753,262
LIABILITIES
Securities sold short, at value (proceeds $3,136,382) 3,131,813
Outstanding call options written, at value
(premiums received $73,205) 62,064
Payable for investment securities purchased 1,729,073
Dividend payable 1,106,709
Advisory fee payable 58,594
Administration fee payable 12,207
Accrued expenses and other liabilities 92,132
Total liabilities 6,192,592
NET ASSETS
(equivalent to $23.78 per share, based on 2,505,000
shares outstanding) $59,560,670
COMPOSITION OF NET ASSETS
Capital stock, at par $ 25,050
Additional paid-in capital 49,343,315
Accumulated net realized gain 3,569,833
Net unrealized appreciation of investments, short sales and
options written 6,622,472
$59,560,670
NET ASSET VALUE PER SHARE $23.78
See notes to financial statements.
7
STATEMENT OF OPERATIONS
FROM NOVEMBER 4, 1994* TO SEPTEMBER 30, 1995
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign withholding taxes of $1,223) $600,846
Interest 122,284 $ 723,130
EXPENSES
Advisory fee 571,725
Administration fee 119,110
Audit and legal 48,149
Shareholder servicing 47,645
Printing 44,088
Custodian 43,626
Directors' fees 22,015
Dividends on securities sold short 17,600
Registration 14,624
Transfer agency 10,086
Amortization of organization expenses 3,595
Miscellaneous 10,031
Total expenses 952,294
Net investment loss (229,164)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on long transactions 7,373,759
Net realized loss on short sale transactions (192,192)
Net realized gain on option transactions 314,819
Net unrealized appreciation of investments, short sales and
options written 6,622,472
Net gain on investments 14,118,858
NET INCREASE IN NET ASSETS FROM OPERATIONS $13,889,694
* Commencement of operations.
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
NOV. 4, 1994*
TO
SEP. 30, 1995
-------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (229,164)
Net realized gain on investment, short sale and
option transactions 7,496,386
Net unrealized appreciation of investments, short sales and
options written 6,622,472
Net increase in net assets from operations 13,889,694
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments (3,697,389)
COMMON STOCK TRANSACTIONS
Net proceeds from sale of shares of common stock 50,000,000
Offering costs charged to additional paid-in capital (731,635)
Total increase 59,460,670
NET ASSETS
Beginning of period 100,000
End of year $59,560,670
* Commencement of operations.
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance All-Market Advantage Fund, Inc. (the "Fund") was incorporated under
the laws of the state of Maryland on August 16, 1994 and is registered under
the Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. On October 27, 1994, the Fund sold 5,000 shares of common
stock for $100,000 to Alliance Capital Management L.P. (the "Investment
Adviser"). The Fund commenced operations on November 4, 1994. The following is
a summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange are valued at the
closing price on such exchange on the day of valuation or, if no such closing
price is available, at the mean of the bid and asked price quoted on such day.
Listed securities not traded and securities traded in the over-the-counter
market are valued at the mean between the most recently quoted bid and asked
price provided by the principal market makers. Options are valued at market
value or fair value, if no market exists, using methods determined by the Board
of Directors. Securities for which market quotations are not readily available
and illiquid securities which are subject to limitations as to their resale are
valued in good faith, at fair value, using methods determined by the Board of
Directors. Securities which mature in 60 days or less are valued at amortized
cost, which approximates market value, unless this method does not represent
fair value.
2. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provision for federal income or excise taxes are
required.
To reflect reclassifications arising from permanent book/tax differences for
the period ended September 30, 1995, ($229,164) was reclassified from net
investment income to accumulated net realized gain.
3. ORGANIZATION EXPENSES
Organization expenses of approximately $20,000 have been deferred and are being
amortized on a straight-line basis through November, 1999.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income (or expense on securities sold short) is recorded on the
ex-dividend date. Investment transactions are accounted for on the date
securities are purchased or sold. Investment gains and losses are determined on
the identified cost basis.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
NOTE B: ADVISORY, ADMINISTRATIVE FEES AND OTHER AFFILIATED TRANSACTIONS
Under the terms of an Investment Advisory Agreement, the Fund pays the
Investment Advisor a monthly fee at an annualized rate of 1.50% of the Fund's
average weekly net assets (the "Basic Fee") and an adjustment to the Basic Fee
based upon the investment performance of the Fund in relation to the investment
record of the Russell 1000 Growth Index for certain prescribed periods. The
Basic Fee, as adjusted, will range between 1.20% and 1.80% annualized of the
Fund's average net assets. The Investment Advisor received the minimum fee of
1.20% and no performance fee was paid for the period ended September 30, 1995.
Under the terms of the Administrative Agreement, the Fund pays its
Administrator, Alliance Capital Management L.P., a monthly fee equal to the
annualized rate of .25 of 1% of the Fund's average weekly net assets.
Brokerage commissions paid for the year ended September 30, 1995 on investment
transactions amounted to $276,800, none of which was paid to affiliated brokers.
10
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and options) aggregated $100,137,994 and $63,125,636, respectively, for the
period ended September 30, 1995.
At September 30, 1995, the cost of investments for federal income tax purpose
was $48,939,357. Accordingly, gross unrealized appreciation of investments was
$8,256,701 and gross unrealized depreciation of investments was $404,814
resulting in net unrealized appreciation of $7,851,887.
1. OPTIONS TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) covered put and
call options on U.S. securities that are traded on U.S. securities exchanges
and over-the-counter markets and options on market indices.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written.
Premiums received from writing options which expire unexercised are recorded by
the Fund on the expiration date as realized gains from option transactions. The
difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase transaction, as a realized loss. If a written call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether the Fund has realized a gain or loss. If a
written put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. In writing covered options, the Fund bears the
market risk of an unfavorable change in the price of the security underlying
the written option. Exercise of an option written by the Fund could result in
the Fund selling or buying a security at a price different from the current
market value.
Transactions in options written for the period ended September 30, 1995 were as
follows:
NUMBER PREMIUMS
OF CONTRACTS RECEIVED
------------ --------
Options outstanding at beginning of period -0- $ -0-
Options written 430 85,339
Options terminated in closing purchase transactions (60) (12,134)
Options outstanding at September 30, 1995 370 $73,205
The cost of cancelling options in closing purchase transactions was $5,670
resulting in a net short-term capital gain of $6,464.
The average value of purchased options outstanding during the period ended
September 30, 1995 was $3,210,560.
2. SECURITIES SOLD SHORT
The Fund may sell securities short. A short sale is a transaction in which the
Fund sells securities it does not own, but has borrowed, in anticipation of a
decline in the market price of the securities. The Fund is obligated to replace
the borrowed securities at their market price at the time of replacement. The
Fund's obligation to replace the securities borrowed in connection with a short
sale will be partially secured by collateral deposited with the broker that
consists of cash, U.S. government securities or other liquid, high grade debt
obligations. In addition, the Fund will (i) maintain cash or liquid high grade
debt securities with the broker-dealer and/or in a segregated account with its
custodian in an aggregate amount equal to the market value of the securities
sold short or (ii) consider the short sale to be a borrowing by the Fund that
is
11
NOTES TO FINANCIAL STATEMENTS (CONT.) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
subject to the asset requirements of the 1940 Act. Short sales by the Fund
involve certain risks and special considerations. Possible losses from short
sales differ from losses that could be incurred from a purchase of a security
because losses from short sales may be unlimited, whereas losses from purchases
can not exceed the total amount invested.
NOTE D: CAPITAL STOCK
There are 300,000,000 shares of $.01 par value common stock authorized. Of the
2,505,000 shares outstanding at September 30, 1995, the Adviser owned 5,000
shares. In addition to the shares issued to the Investment Adviser, an initial
public offering of the Fund's shares resulted in the issuance of 2,500,000
shares of the Fund's common stock for net proceeds of $50,000,000.
Offering costs of $731,635 relating to the initial public offering have been
charged to additional paid-in capital.
NOTE E: QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED AND (DECREASE)
UNREALIZED GAIN IN NET ASSETS
NET INVESTMENT (LOSS) ON RESULTING FROM MARKET PRICE
INCOME (LOSS) INVESTMENTS OPERATIONS ON NYSE
---------------- ------------------ ------------------ ------------------
TOTAL PER TOTAL PER TOTAL PER
QUARTER ENDED (000) SHARE (000) SHARE (000) SHARE HIGH LOW
- ------------------- ------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 1995 $(108) $(.04) $ 5,413 $2.17 $ 5,305 $2.13 $20.000 $18.375
June 30, 1995 (79) (.03) 5,569 2.23 5,490 2.20 $19.375 $16.875
March 31, 1995 (51) (.02) 4,514 1.80 4,463 1.78 $17.750 $15.625
December 31, 1994* 9 -0- (1,377) (.55) (1,368) (.55) $20.000 $15.750
$(229) $(.09) $14,119 $5.65 $13,890 $5.56
</TABLE>
* From November 4, 1994 (commencement of operations).
12
FINANCIAL HIGHLIGHTS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT THE PERIOD
NOVEMBER 4, 1994*
TO SEPTEMBER 30,
1995
-----------------
Net asset value, beginning of period $19.70+
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.09)
Net realized and unrealized gain on investments 5.65
Net increase in net asset value from operations 5.56
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.48)
Net asset value, end of period $23.78
Market value, end of period $19.50
TOTAL RETURN
Total investment return based on: (a)
Market value 5.46%
Net asset value 28.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $59,561
Ratio of expenses to average net assets 2.00%(b)
Ratio of net investment loss to average net assets (.48)%(b)
Portfolio turnover rate 140%
* Commencement of operations.
+ Net of offering costs of $.30.
(a) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Generally, total investment return based on
net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or a decrease in
the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on the net
asset value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total return for a period of less than one year is not annualized.
(b) Annualized.
13
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE ALL-MARKET ADVANTAGE
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 All-Market Advantage Fund
(the "Fund") at September 30, 1995, and the results of its operations, the
changes in its net assets and the financial highlights for the period November
4, 1994 (commencement of operations) through September 30, 1995 in conformity
with generally accepted accounting principles. 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 audit. We conducted our
audit 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 audit, which included confirmation of securities at September 30, 1995 by
correspondence with the custodian and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
November 16, 1995
14
ADDITIONAL INFORMATION ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
Shareholders whose shares are registered in their own names will automatically
be participants in the Dividend Reinvestment and Cash Purchase Plan (the
"Plan"), pursuant to which dividends and capital gain distributions to
shareholders will be paid in or reinvested in additional shares of the Fund
(the "Dividend Shares"). Bank of New York (the "Agent") will act as agent for
participants under the Plan. Shareholders whose shares are held in the name of
a broker or nominee should contact such broker or nominee to determine whether
or how they may participate in the Plan.
If the Board declares an income distribution or determines to make a capital
gain distribution payable either in shares or in cash, as holders of the Common
Stock may have elected, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in shares of Common Stock
of the Fund valued as follows:
(i) If the shares of Common Stock are trading at net asset value or at a
premium above net asset value at the time of valuation, the Fund will issue new
shares at the greater of net asset value or 95% of the then current market
price.
(ii) If the shares of Common Stock are trading at a discount from net asset
value at the time of valuation, the Plan Agent will receive the dividend or
distribution in cash and apply it to the purchase of the Fund's shares of
Common Stock in the open market on the New York Stock Exchange or elsewhere,
for the participants' accounts. Such purchases will be made on or shortly after
the payment date for such dividend or distribution and in no event more than 30
days after such date except where temporary enrollment or suspension of
purchase is necessary to comply with Federal securities laws. If, before the
Plan agent has completed its purchases, the market price exceeds the net asset
value of a share of Common Stock, the average purchase price per share paid by
the Plan agent may exceed the net asset value of the Fund's shares of Common
Stock, resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund.
The Agent will maintain all shareholders' accounts in the Plan and furnish
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Agent in non-certificate form in the name of
the participant, and each shareholder's proxy will include those shares
purchased or received pursuant to the Plan.
There will be no charges with respect to shares issued directly by the Fund to
satisfy the dividend reinvestment requirements. However, each participant will
pay a pro rata share of brokerage commissions incurred with respect to the
Agent's open market purchases of shares. In each case, the cost per share of
shares purchased for each shareholder's accounts will be the average cost,
including brokerage commissions, of any shares purchased in the open market
plus the cost of any shares issued by the Fund.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to suspend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent
to written notice of the change sent to participants in the Plan at least 90
days before the record date for such dividend or distribution. The Plan may
also be amended or terminated by the Agent on at least 90 days' written notice
to participants in the Plan. All correspondence concerning the Plan should be
directed to the Agent at the Bank of New York, 101 Barclay Street, New York, NY
10286.
Since the filing of the most recent amendments to the Fund's registration
statement with the Securities and Exchange Commission, there have been (i) no
material changes in the Fund's investment objectives or policies, (ii) no
changes to the Fund's charter or by-laws that would delay or prevent a change
of control of the Fund, (iii) no material changes in the principal risk factors
associated with investment in the Fund, and (iv) no change in the person
primarily responsible for the day-to-day management of the Fund's portfolio,
who is Alfred Harrison, the Senior Vice President of the Fund.
15
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
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)
ROBERT C. WHITE (1)
OFFICERS
ALFRED HARRISON, SENIOR VICE PRESIDENT
PETER W. ADAMS, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
JACK KOLTES, VICE PRESIDENT
ERIC PERKINS, VICE PRESIDENT
JAMES G. REILLY, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
ADMINISTRATOR
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 Avenue of the Americas
New York, NY 10105
DIVIDEND PAYING AGENT, TRANSFER
AGENT AND REGISTRAR
THE BANK OF NEW YORK
101 Barclay Street
New York, NY 10286
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
(1) Member of the Audit Committee.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of Alliance All-Market Advantage Fund, Inc. for their information.
The financial information included herein is taken from the records of the
Fund. This is not a prospectus, circular or representation intended for use in
the purchase of shares of the Fund or any securities mentioned in this report.
16
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
Summary of General Information
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
"AllncAll". The Fund's NYSE trading symbol is "AMO". Weekly comparative net
asset value (NAV) and market price information about the Fund is published each
Monday in THE WALL STREET JOURNAL and each Saturday in BARRON'S and THE NEW
YORK TIMES, as well as other newspapers ina table called "Closed-End Funds".
Additional information about the Fund is available by calling 1-800-221-5672.
DIVIDEND REINVESTMENT PLAN
All shareholders whose shares are registered in their own names will have all
distributions reinvested automatically in additional shares, unless a
shareholder elects to receive cash.
Shareholders whose shares are held in the name of a broker or nominee will
automatically have distributions reinvested by the broker or nominee in
additional shares under the Plan, unless the automatic reinvestment service is
not provided by the particular broker or nominee or the Shareholder elects to
receive distributions in cash.
The Plan provides you with a convenient way to reinvest your dividends and
capital gains in additional shares of the Fund, thereby enabling you to
compound your returns from the Fund.
A brochure describing the Plan is available from the Plan Agent, The Bank of
New York, by calling 1-800-432-8224.
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
AMAAR
