ALLIANCE ALL-MARKET ADVANTAGE FUND
SEMI-ANNUAL REPORT
MARCH 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
April 20, 1996
Dear Shareholder:
We are pleased to provide the semi-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.
FUND PERFORMANCE
The following pages include information that covers the period from October 1,
1995, the beginning of the fiscal year, through March 31, 1996. During the six
months, AMO paid two dividends totaling $0.912 per share and a year-end capital
gains distribution of $1.155 per share. The Fund's net asset value (NAV) ended
the period at $22.62 per share, down from $23.78 per share on September 30 of
last year due primarily to the distributions just mentioned. The table below
shows how the Fund performed during the periods ended March 31, 1996, and for
comparison we've shown returns for the overall U.S. stock market, represented
by the unmanaged S&P 500-stock Index, and for the Russell 1000 Growth Stock
Index, which measures the performance of the 1,000 largest publicly traded U.S.
stocks.
TOTAL RETURN
PERIODS ENDED MARCH 31, 1996
SIX MONTHS TWELVE MONTHS
---------- -------------
AMO +5.06% +28.39%
S&P 500 +11.70% +32.00%
RUSSELL 1000 +11.38% +32.74%
TOTAL RETURNS FOR THE FUND ARE BASED ON THE NET ASSET VALUE AS OF 3/31/96.
MARKET DISCOUNT NARROWS OVER PERIOD
The Fund's market price ended the period at $19.875 per share, representing a
12.1% discount to NAV. When we last reported, AMO's market price was trading at
an 18% discount; as we stated at that time, we believed that AMO's investment
flexibility, favorable net asset value performance and its policy to distribute
2% of the NAV quarterly was not fully reflected in the Fund's share price.
Though there is no absolute way to measure the impact of these factors, the
narrowing of the discount over the past six months may indicate that AMO is
gaining attention among investors.
SIX MONTHS IN REVIEW
Investment performance in the past six months benefited from a continued strong
domestic equity market. AMO's portfolio was structured to take advantage of the
general rise in prices by staying fully investing in stocks and, to a more
limited extent, in options. The core of the portfolio benefited from favorable
stock selection within the financial and technology sectors, where we have
maintained overweight positions relative to the market. Within the financial
sector-where growth rates of 12-15% can be bought at 9 to 11 times earnings-the
Fund benefited from its holdings in Merrill Lynch, Citicorp, Norwest Bank,
NationsBank and First Interstate. Within the technology sector, holdings in
Hewlett-Packard, Microsoft, cisco Systems and Sterling Software provided
incremental returns even though the technology sector underperformed the S&P
500 Index during the period. Poor performance by Philip Morris, one of the
Fund's largest holdings, was a drag on the six-month return, but we continue to
be quite confident about the longer-term fundamental outlook for this company.
As of the end of March, our estimated earnings growth rate for the companies in
the Fund was in excess of twice the market's growth rate 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.
1
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
MARKET ENVIRONMENT AND OUTLOOK
In the first few months of 1996 the equity markets continued their advance
despite a modest increase in bond yields. However, in the first few days of
April the bond market had deteriorated more sharply and, with the yield on the
long bond now approaching 7%, the advancement of the equity market has slowed.
Recent employment figures might suggest that the economy is beginning to
strengthen, carrying with it the potential for a rise in inflation. In our
opinion, however, there is not yet sufficient evidence to support any revision
of the 'moderate growth, moderate inflation' thesis which we, and probably most
market participants, have shared up to this point. Moreover, even if some
strength is developing, it is hard to believe that it will be of sufficient
magnitude to significantly upset this thesis as U.S. consumers are still quite
strapped and the key world economies are generally sluggish.
Consequently, we continue to believe that long bond yields of 6% to 7%
adequately reflect a secular approach to inflation which we anticipate will be
no greater than half that amount. This would leave a roughly equivalent 'real
return' to bond investors. Similarly, although considerably higher than a year
ago, we believe that the stock market still represents fair value. The market's
earnings yield (the reciprocal of the current price earnings multiple of 16
times) is about equal to the yield on the long bond.
We have stated before that we are impressed with the position of the U.S. in
world markets. U.S. companies have engaged in significant cost cutting over the
last decade and the pervasiveness of the computer has helped firmly establish
our technology leadership. Moreover, with the dollar at still quite competitive
levels, there is little reason for domestic or foreign investors to take a
negative approach to the U.S. market. We certainly admit that U.S. equities are
unlikely to reap the gains of 1995; however, it is not unreasonable to believe
that the moderate growth, moderate inflation environment could help produce
another year of double-digit returns.
Thank you for your continued interest in Alliance All-Market Advantage Fund. We
look forward to reporting to you again on market activity and the Fund's
investment results later in the year.
Sincerely,
John D. Carifa
Chairman and President
Alfred Harrison
Senior Vice President
Michael J. Reilly
Portfolio Manager
2
TEN LARGEST HOLDINGS*
MARCH 31, 1996 (UNAUDITED) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
cisco Systems, Inc. $ 2,471,787 4.4%
Applied Materials, Inc. 2,354,062 4.2
Philip Morris Cos., Inc. (a) 2,236,000 3.9
McDonald's Corp. (a) 2,014,437 3.6
Walt Disney Co. (a) 1,819,437 3.2
Federal National Mortgage Association (a) 1,796,687 3.2
NationsBank Corp. (a) 1,772,600 3.1
Merrill Lynch & Co. (a) 1,736,000 3.1
Amgen, Inc. (a) 1,625,000 2.9
Hewlett Packard Co. (a) 1,591,850 2.8
$19,417,860 34.4%
* Excludes short-term obligations.
(a) Adjusted for market value of call options purchased.
3
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SHARES VALUE
- ------------------------------------------------------------------------
COMMON STOCKS-74.6%
TECHNOLOGY-22.4%
COMMUNICATION EQUIPMENT-7.0%
cisco Systems, Inc.* (a) 53,300 $2,471,787
Ericsson (LM)Tel-SPADR 37,410 799,639
Tellabs, Inc.* 15,000 725,625
----------
3,997,051
COMPUTER HARDWARE-3.1%
Compaq Computer Corp.* (a) 24,700 954,038
Hewlett-Packard Co. (a) 8,400 789,600
----------
1,743,638
COMPUTER SOFTWARE & SERVICES-8.1%
First Data Corp. (a) 15,000 1,057,500
Microsoft Corp.* 10,000 1,031,250
Sterling Software, Inc. (a) 20,000 1,410,000
3Com Corp.* 27,000 1,076,625
----------
4,575,375
SEMI-CONDUCTORS & EQUIPMENT-4.2%
Applied Materials, Inc.* (a) 67,500 2,354,062
----------
12,670,126
CONSUMER PRODUCTS & SERVICES-22.0%
AIRLINES-5.0%
KLMRoyal Dutch Air Lines NV 23,400 813,150
Northwest Airlines, Inc.* (a) 26,900 1,378,625
UALCorp.* 3,000 625,500
----------
2,817,275
BROADCASTING & CABLE-5.5%
Airtouch Communications, Inc.* 17,500 544,688
Cox Communications, Inc. Cl.A* (a) 51,000 1,115,625
Tele Communications - TCIGP-A* (a) 63,100 $1,171,294
Tele Comm-Liberty Media GR-A* 10,000 263,750
----------
3,095,357
COSMETICS & TOILETRIES-1.8%
Colgate-Palmolive Co. 7,500 584,063
Gillette Co. 3,000 155,250
Kimberly-Clark Corp. 4,000 298,000
----------
1,037,313
ENTERTAINMENT-2.3%
Walt Disney Co. (a) 20,500 1,309,437
FOOD PROCESSING-0.9%
Pioneer Hi-Bred International, Inc. 10,000 526,250
RESTAURANTS-4.7%
ITTCorp.* (a) 24,500 1,470,000
McDonald's Corp. (a) 25,000 1,200,000
----------
2,670,000
TOBACCO-1.8%
Philip Morris Cos., Inc. (a) 11,500 1,009,125
----------
12,464,757
FINANCE-17.4%
BANKING - REGIONAL-6.8%
Chase Manhattan Corp. 4,000 294,000
First Union Corp. 10,000 605,000
MBNACorp. 30,000 888,750
NationsBank Corp. (a) 18,800 1,506,350
Norwest Corp. 15,000 551,250
----------
3,845,350
FINANCIAL SERVICES - DIVERSIFIED-2.6%
Household International, Inc. 5,000 336,250
Merrill Lynch & Co., Inc. (a) 19,000 1,154,250
----------
1,490,500
4
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SHARES VALUE
- ------------------------------------------------------------------------
INSURANCE-3.4%
American International Group, Inc. 7,700 $ 720,913
General Re Corp. (a) 6,300 918,225
Travelers Group, Inc. 4,000 264,000
----------
1,903,138
MORTGAGE BANKING-4.6%
Green Tree Financial Corp. (a) 28,000 962,500
Federal National Mortgage Association (a) 51,700 1,647,937
----------
2,610,437
----------
9,849,425
HEALTHCARE-9.6%
BIOTECHNOLOGY-0.5%
Amgen, Inc.* 5,000 290,625
MEDICAL PRODUCTS-5.2%
Baxter International, Inc. (a) 20,500 927,625
Boston Scientific Corp.* 15,800 726,800
Guidant Corp. 13,200 714,450
Johnson&Johnson 3,000 276,750
Medtronic, Inc. (a) 5,000 298,125
----------
2,943,750
MEDICAL SERVICES-3.1%
Columbia/HCAHealthcare Corp. (a) 10,000 577,500
NCSHealthcare, Inc. Cl.A* 15,200 372,400
United Healthcare Corp. (a) 12,700 781,050
----------
1,730,950
PHARMACEUTICALS-0.8%
Merck & Co., Inc. 3,000 186,750
Schering-Plough Corp. 5,000 290,625
----------
477,375
----------
5,442,700
CAPITAL GOODS-2.3%
MACHINERY-2.3%
Case Corp. 10,200 518,925
Deere &Co. (a) 19,000 793,250
----------
1,312,175
SHARES
OR
CONTRACTS VALUE
- ------------------------------------------------------------------------
UTILITIES-0.9%
TELEPHONE UTILITY-0.9%
AT & TCorp. 9,000 $ 551,250
Total Common Stocks (cost $39,355,944) 42,290,433
CALL OPTIONS PURCHASED-31.4%*
Airtouch Communications, Inc.
expiring Apr '96 @$22.50 550 481,250
expiring Jan '97 @ $20 150 183,750
American International Group, Inc.
expiring May '96 @$80 115 164,594
Amgen, Inc.
expiring Jan '97 @$27.50 290 924,375
expiring Jan '97 @$40 200 410,000
AT&TCorp.
expiring Jan. '97@$45 300 517,500
Baxter International, Inc.
expiring Aug '96 @ $35 190 206,625
Boeing Co.
expiring May '96 @$65 100 218,750
Carnival Corp.
expiring Jul '96 @$22.50 80 44,000
Chase Manhattan Corp.
expiring Jan '97 @$35 75 288,750
Citicorp
expiring Jan '97 @$40 220 888,250
Federal National Mortgage Association
expiring Jan '97 @$17.50 100 148,750
First Interstate Bancorp
expiring Apr '96 @ $95 70 553,000
General Electric Co.
expiring Jan '97 @$40 230 885,500
General ReCorp.
expiring Jun '96 @ $135 40 53,500
Gillette Co.
expiring Jan '97 @$35 290 522,000
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
CONTRACTS VALUE
- ------------------------------------------------------------------------
Hewlett-Packard Co.
expiring Jan '97 @$45 100 $ 501,250
expiring Jan '97 @$52.50 70 301,000
Intel Corp.
expiring Jan '97 @$32.50 248 644,800
International Business Machines Corp.
expiring Jul '96 @$85 70 196,875
Johnson &Johnson
expiring Jan '97 @$75 80 161,000
Marriott International, Inc.
expiring Jan '97 @$20 120 339,000
McDonald's Corp.
expiring Jan '97 @$30 415 814,437
Merck &Co., Inc.
expiring Jan '97 @$40 160 380,000
Merrill Lynch &Co., Inc.
expiring Jan '97 @$40 260 581,750
Monsanto Co.
expiring Jan '97 @$100 60 338,250
NationsBank Corp.
expiring Jan '97 @$45 75 266,250
Norwest Corp.
expiring Jul '96 @$25 700 818,125
PepsiCo., Inc.
expiring Jan '97 @$35 475 1,395,312
Perkin-Elmer Corp.
expiring Jun '96 @$30 300 742,500
Pfizer, Inc.
expiring Jan '97 @$35 150 489,375
Philip Morris Cos., Inc.
expiring Jan '97 @$50 289 1,083,750
expiring Jan '97 @ $60 50 143,125
Schering-Plough Corp.,
expiring Jan '97 @ $40 150 284,063
Seagate Technology, Inc.
expiring Sep '96 @$47.50 100 117,500
Sterling Software, Inc.
expiring Jun '96 @$45 50 130,625
Tele Comm-Liberty Media GR-A
expiring Jul '96 @ $22.50 180 82,125
CONTRACTS OR
PRINCIPAL
VALUE
(000) VALUE
- ------------------------------------------------------------------------
Travelers Group, Inc.
expiring Jun '96 @$45 215 $ 462,250
UALCorp.
expiring May '96 @$160 30 149,625
expiring May '96 @ $170 50 204,375
United Healthcare Corp.
expiring Jun '96 @ $45 85 146,625
Walt Disney Co.
expiring Jan '97 @$40 200 510,000
Total Call Options Purchased
(cost $15,582,572) 17,774,581
PUT OPTIONS PURCHASED-0.8%*
Motorola, Inc.
expiring Apr '96 @$65 180 216,000
expiring Jul '96 @$65 90 110,250
Standard &Poor's 500 Index
expiring Apr '96 @$645 175 166,250
Total Put Options Purchased
(cost $542,835) 492,500
COMMERCIAL PAPER-3.9%
Prudential Funding Corp.,
5.43%, 4/01/96
(cost $2,216,000) $2,216 2,216,000
TOTAL INVESTMENTS-110.7%
(cost $57,697,351) 62,773,514
CALL OPTIONS WRITTEN-(0.5%)*
Applied Materials, Inc.
expiring May '96 @$40 120 (12,000)
cisco Systems, Inc.
expiring Apr '96 @$47.50 50 (9,375)
Citicorp
expiring Apr '96 @ $80 90 (18,000)
First Interstate Bancorp
expiring Apr '96 @ $170 35 (21,875)
Hewlett-Packard Co.
expiring Apr '96 @ $100 30 (3,375)
Seagate Technology, Inc.
expiring Sep '96 @$70 100 (22,500)
6
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
CONTRACTS
OR
SHARES VALUE
- -------------------------------------------------------------------------
Standard & Poor's 500 Index
expiring Apr '96 @ $665 100 $ (25,000)
UALCorp.
expiring May '96 @$190 30 (72,000)
expiring May '96 @$195 50 (101,250)
Total Call Options Written
(premiums received $184,951) (285,375)
SECURITIES SOLD SHORT-(7.1%)*
Advanced Micro Devices, Inc. 34,600 (596,850)
Caterpillar, Inc. 7,000 (476,000)
Cummins Engine Co., Inc. 16,000 (646,000)
Cyrix Corp. 16,000 (382,000)
SHARES VALUE
- -------------------------------------------------------------------------
Georgia-Pacific Corp. 10,000 $ (693,750)
Phelps Dodge Corp. 7,500 (514,688)
Weyerhaeuser Co. 16,000 (738,000)
Total Securities Sold Short
(proceeds $4,256,052) (4,047,288)
TOTAL INVESTMENTS, NET OF OUTSTANDING
CALL OPTIONS WRITTEN AND
SECURITIES SOLD SHORT-103.1% $58,440,851
Other assets less liabilities-(3.1%) (1,778,904)
NET ASSETS-100% $56,661,947
* Non-income producing.
(A) Security, or portion thereof, has been segregated to collateralize short
sales and options. This collateral has a total market value of approximately
$21,405,394.
Glossary of Terms:
ADR - American Depository Receipt.
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996 (UNAUDITED) ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $57,697,351) $62,773,514
Cash 164,933
Receivable for investment securities sold 2,798,868
Dividends receivable 66,265
Deferred organization expenses and other assets 41,749
Total assets 65,845,329
LIABILITIES
Securities sold short, at value (proceeds $4,256,052) 4,047,288
Outstanding call options written, at value
(premiums received $184,951) 285,375
Payable for investment securities purchased 3,579,292
Dividend payable 1,092,180
Advisory fee payable 59,208
Administration fee payable 12,140
Accrued expenses and other liabilities 107,899
Total liabilities 9,183,382
NET ASSETS $56,661,947
COMPOSITION OF NET ASSETS
Capital stock, at par $ 25,050
Additional paid-in capital 49,343,315
Distributions in excess of net investment income (2,965,039)
Accumulated net realized gain 5,074,118
Net unrealized appreciation of investments, short sales and
options written 5,184,503
$56,661,947
NET ASSET VALUE PER SHARE (based on 2,505,000 shares outstanding) $22.62
See notes to financial statements.
8
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends $151,164
Interest 21,761 $ 172,925
EXPENSES
Advisory fee 543,513
Administration fee 72,456
Custodian 71,392
Audit and legal 49,505
Shareholder servicing 28,983
Dividends on securities sold short 28,350
Transfer agency 17,820
Printing 12,993
Directors' fees 12,881
Registration 7,430
Amortization of organization expenses 2,006
Miscellaneous 7,076
Total expenses before interest 854,405
Interest expense 52,583
Total expense 906,988
Net investment loss (734,063)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on long transactions 6,474,288
Net realized loss on short sale transactions (230,924)
Net realized loss on option transactions (1,793,221)
Net change in unrealized appreciation of investments,
short sales and options written (1,437,969)
Net gain on investments 3,012,174
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,278,111
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SIX MONTHS ENDED NOV. 4,1994*
MARCH 31, 1996 TO
(UNAUDITED) SEP. 30,1995
------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (734,063) $ (229,164)
Net realized gain on investment, short sale and
option transactions 4,450,143 7,496,386
Net change in unrealized appreciation of
investments, short sales and options written (1,437,969) 6,622,472
Net increase in net assets from operations 2,278,111 13,889,694
DIVIDENDSAND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income (2,283,559) -0-
Distributions from net realized gain on
investments (2,893,275) (3,697,389)
COMMON STOCK TRANSACTIONS
Net proceeds from sale of shares of common stock -0- 50,000,000
Offering costs charged to additional
paid-in capital -0- (731,635)
Total increase (decrease) (2,898,723) 59,460,670
NET ASSETS
Beginning of period 59,560,670 100,000
End of period $56,661,947 $59,560,670
* Commencement of operations.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 (UNAUDITED) 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.
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. In addition the Investment Adviser received a
performance fee of .30% of the Fund's average net assets for the period of
November 4, 1994 through October 31, 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. The
administrator provides administrative functions to the Fund as well as other
clerical services. The Administrator also prepares financial and regulatory
reports for the Fund.
Brokerage commissions paid for the six months ended March 31, 1996 on
investment transactions amounted to $191,549, none of which was paid to
affiliated brokers.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and short-term options) aggregated $54,214,216 and $61,197,593, respectively,
for the six months ended March 31, 1996.
11
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
At March 31, 1996, the cost of investments for federal income tax purpose was
$57,796,811. Accordingly, gross unrealized appreciation of investments was
$7,090,137 and gross unrealized depreciation of investments was $2,113,434
resulting in net unrealized appreciation of $4,976,703.
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 six months ended March 31, 1996 were as
follows:
NUMBER PREMIUMS
OF CONTRACTS RECEIVED
------------ -----------
Options outstanding at beginning of period 370 $ 73,205
Options written 5,180 1,437,296
Options terminated in closing purchase transactions (3,905) (1,119,415)
Options expired (1,040) (206,135)
Options outstanding at March 31, 1996 605 $ 184,951
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. In
addition, the Fund will consider the short sale to be a borrowing by the Fund
that is 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. The Fund is currently
paying an interest expense of 8.25% on the market value of the short sales.
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 March 31, 1996, 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.
12
FINANCIAL HIGHLIGHTS ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT THE PERIOD
SIX MONTHS ENDED NOV. 4,1994*
MARCH 31, 1996 TO SEP. 30,
(UNAUDITED) 1995
-------------- ------------
Net asset value, beginning of period $23.78 $19.70+
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.27) (.09)
Net realized and unrealized gain on investments 1.18 5.65
Net increase in net asset value from operations .91 5.56
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.91) -0-
Distributions from net realized gains (1.16) (1.48)
Total distributions (2.07) (1.48)
Net asset value, end of period $22.62 $23.78
Market value, end of period $19.875 $19.50
TOTAL RETURN
Total investment return based on: (a)
Market value 12.87% 5.46%
Net asset value 5.06% 28.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $56,662 $59,561
Ratio of expenses to average net assets 3.25%(b) 2.00%(b)
Ratio of expenses to average net assets
excluding interest expense 2.94%(b) 2.00%(b)
Ratio of net investment loss to average net assets (2.53)%(b) (.48)%(b)
Portfolio turnover rate 108% 140%
Average commission rate paid $.0606 $-0-
* 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
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
_______________________________________________________________________________
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of Shareholders of the Alliance All-Market Advantage Fund,
Inc. was held on Tuesday, January 9, 1996. The description of each proposal and
number of shares are as follows:
SHARES VOTED
SHARES WITHOUT
VOTED FOR AUTHORITY
- -------------------------------------------------------------------------------
1. To elect directors: Class One Directors
(term expires 1998)
David H. Dievler 2,447,803 14,402
Clifford L. Michel 2,447,803 14,402
Class Two Directors
(term expires 1999)
John H. Dobkin 2,447,803 14,402
William H. Foulk, Jr. 2,448,003 14,202
James Hester 2,447,803 14,402
Class Three Directors
(term expires 1997)
John D. Carifa 2,447,803 14,402
Ruth Block 2,446,753 15,452
Robert C. White 2,447,803 14,402
SHARES SHARES VOTED SHARES VOTED
VOTED FOR AGAINST ABSTAIN
- -------------------------------------------------------------------------------
2. To ratify the selection of Price
Waterhouse LLP as the Fund's
independent auditors for the Fund's
fiscal year ending September 30,1996: 2,450,200 4,196 7,809
14
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.
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an opinion
thereon.
15
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.
AMASR
