ALLIANCE ALL-MARKET ADVANTAGE FUND
SEMI-ANNUAL REPORT
MARCH 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
April 30, 1997
Dear Shareholder:
We are pleased to provide the semi-annual report to shareholders 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 earning
growth. The core portfolio typically consists 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.
During the six month period ended March 31, 1997, AMO paid two dividends
totaling $0.9366 per share. The Fund's net asset value (NAV) ended the period
at $24.49 per share, up from $22.19 per share on September 30, 1996, due to
strong Fund performance offset by regular distributions. The table below shows
how the Fund performed during the periods ended March 31, 1997. For comparison,
we've shown returns for the overall U.S. stock market, represented by the
unmanaged S&P 500 Stock Index, and the Russell 1000 Growth Stock Index, which
measures the performance of the 1,000 largest publicly traded U.S. stocks.
INVESTMENT RESULTS*
FOR PERIODS ENDED MARCH 31, 1997
6-MONTHS 12-MONTHS
-------------- ---------------
ALLIANCE ALL-MARKET ADVANTAGE FUND 14.89% 18.22%
S&P 500 STOCK INDEX 11.24% 19.82%
RUSSELL 1000 GROWTH STOCK INDEX 6.61% 17.48%
* TOTAL RETURNS ARE BASED ON NET ASSET VALUE. THE S&P AND RUSSELL INDICES ARE
UNMANAGED.
SIX MONTHS IN REVIEW
During the past six months, Fund performance has benefited from the increased
volatility in the market and strong stock picking. Unlike 1995, when the market
went straight up, the last six months have brought both euphoria and pessimism.
It is this volatility that has allowed us to change our market weightings to
take advantage of the market's emotions. The Fund has also benefited from short
selling certain stocks.
The Fund continues to invest approximately 25-30% of the portfolio in
technology stocks. Our largest position, Intel, benefited from increasing
earnings, continued dominance in the microprocessor market, and an attractive
valuation. Admittedly, we are not alone in extolling the virtues of such world
leaders as Intel and Microsoft. Nevertheless, we feel confident that such
companies still have their best days ahead of them.
Similarly, we feel that financial companies with dominant industry positions
and earnings growth of 12-15% annually are simply too cheap at their current
P/E multiples of 12-13 times earnings. We can envision strong potential for
such companies trading up to higher relative P/E multiples. Accordingly, we
continue to hold approximately 20-25% of the Fund in this area as our secondary
sector of emphasis. Interestingly, if economic growth should falter and
interest rates come down, holdings in this area could also prove to counter
earnings disappointments elsewhere in the portfolio. Our largest holdings in
the financial sectors are Fannie Mae, Merrill Lynch and MBNA.
Beyond these two groups our selections cover a broad range of companies such as
Philip Morris and UAL, and drug stocks like Pfizer and Merck. Drug stocks have
seen their growth rates enhanced as the population ages and as health
maintenance organizations have begun to use drugs more as preventive medication.
MARKET ENVIRONMENT AND OUTLOOK
Back in 1994 the Federal Reserve engaged in a steady stream of rate increases,
and spoiled the party for the bond and equity markets. However, the Fed's
actions checked any budding inflationary tendencies and helped control
subsequent growth of gross domestic product (GDP) within a sustainable 2-3%
rate. This laid the groundwork for the excellent stock market experience of
1995 and 1996.
1
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
We can see that the market has learned nothing from this experience, and once
again has the jitters. However, it seems to us that the Fed is once more doing
exactly the right thing if the so-called new paradigm of moderate growth and
moderate inflation is to be extended towards the next century.
Certainly, with the market's average price/earnings ratio at 18, we do not want
to suggest that the equity markets will repeat the pace of advance seen since
1994. With hindsight, we can see that good earnings gains, in concert with low
inflation, have justified such a market climb, and this combination continues
to underpin current valuations.
Looking out over the next few months, it will be interesting to see how the
economic statistics unfold, and whether the Federal Reserve will take
additional action. We will also be watching the strength of the U.S. dollar,
which is likely to negatively impact the reported earnings of certain companies.
In short, we believe the returns of 1995 and 1996 should not be expected in
1997. However, just as the Fed needed to raise rates in 1994 in order to ensure
the continuation of a moderate growth, moderate inflation environment, we feel
1997 will replicate 1994 and set up solid market returns in the years to follow.
CHANGE IN QUARTERLY DISTRIBUTION
On May 5, 1997, the Fund's Board of Directors announced an increase in the
Fund's minimum quarterly "managed" distribution from 2% to 2.5% of total net
assets. There is a growing body of evidence that managed distribution policies,
such as the Fund's, have proven more likely to improve a fund's trading
characteristics if the annualized distribution rate is at least 10%. The Board
of Directors thus increased the Fund's annualized distribution rate to the 10%
level with a view to reducing the Fund's market discount.
Under the Fund's revised managed distribution policy, the Fund will distribute
to its shareholders an amount equal to 2.5% of the Fund's total net assets as
of the beginning of each of the first three quarters of the calendar year. With
respect to the fourth quarter, an amount equal to at least 2.5% of total net
assets will be distributed to shareholders. If the distribution exceeds the
Fund's aggregate net investment income and net realized capital gains with
respect to a given year, the difference will generally constitute a tax-free
return of capital to shareholders.
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
Chariman and President
Alfred Harrison
Senior Vice President
Michael J. Reilly
Vice President
2
TEN LARGEST HOLDINGS
MARCH 31, 1997 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
COMPANY VALUE PERCENTOFNETASSETS
- -------------------------------------------------------------------------------
Intel Corp. (a) $ 5,496,150 9.0%
UAL Corp. (a) 3,031,500 4.9
MBNA Corp. (a) 2,725,194 4.5
Philip Morris Cos., Inc. (a) 2,602,374 4.2
Cisco Systems, Inc. 2,492,875 4.1
Seagate Technology, Inc. 2,459,150 4.0
Merrill Lynch & Co., Inc. (a) 2,281,250 3.7
Compaq Computer Corp. 2,145,500 3.5
Microsoft Corp. 2,044,631 3.3
Federal National Mortgage Association (a) 1,795,500 2.9
$27,074,124 44.1%
(a) Adjusted for market value of call options purchased.
3
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-68.7%
TECHNOLOGY-28.8%
COMMUNICATION EQUIPMENT-2.1%
Nokia Corp. ADR (a) 22,200 $1,293,150
COMPUTER HARDWARE-6.0%
Compaq Computer Corp. (b) 28,000 2,145,500
Dell Computer Corp. (b) 22,400 1,514,800
------------
3,660,300
COMPUTER PERIPHERALS-4.0%
Seagate Technology, Inc. (b) 54,800 2,459,150
COMPUTER SOFTWARE & SERVICES-8.7%
Cisco Systems, Inc. (b)(c) 51,800 2,492,875
First Data Corp. 24,100 816,388
Microsoft Corp. (b) 22,300 2,044,631
------------
5,353,894
SEMI-CONDUCTORS & EQUIPMENT-8.0%
Applied Materials, Inc. (b)(c) 18,800 871,850
Intel Corp. 3,000 417,375
Warrants expiring 3/14/98 (b) 24,000 2,379,000
Novellus Systems, Inc. (b) 6,500 448,500
Teradyne, Inc. (b) 28,000 808,500
------------
4,925,225
------------
17,691,719
FINANCE-16.8%
BANKING - REGIONAL-3.7%
First Union Corp. 11,500 932,937
NationsBank Corp. 10,000 553,750
Norwest Corp. 17,000 786,250
------------
2,272,937
BROKERAGE & MONEY MANAGEMENT-3.5%
Merrill Lynch & Co., Inc. 20,000 1,717,500
Morgan Stanley Group, Inc. 8,000 470,000
------------
2,187,500
INSURANCE-0.5%
Travelers Group, Inc.
Warrants expiring 7/31/98 (b) 5,000 286,250
MORTGAGE BANKING-3.2%
Federal National Mortgage Association (c) 36,000 1,300,500
Green Tree Financial Corp. 19,400 654,750
------------
1,955,250
MISCELLANEOUS-5.9%
Household International, Inc. 14,700 1,266,037
MBNA Corp. 84,850 2,365,194
------------
3,631,231
------------
10,333,168
CONSUMER PRODUCTS & SERVICES-11.3%
AIRLINES-7.0%
Northwest Airlines, Inc. Cl. A (b) 46,900 1,764,612
UAL Corp. (b) 39,000 2,525,250
------------
4,289,862
ENTERTAINMENT-1.8%
Walt Disney Co. 15,500 1,131,500
RETAILING-2.3%
Home Depot, Inc. 13,700 732,950
Kohl's Corp. (b) 7,000 296,625
Wal-Mart Stores, Inc. 14,000 390,250
------------
1,419,825
TOBACCO-0.2%
Philip Morris Cos., Inc. 1,000 114,125
------------
6,955,312
HEALTHCARE-8.4%
MEDICAL SERVICES-4.7%
Columbia/HCA Healthcare Corp. 48,250 1,622,406
Oxford Health Plans, Inc. (b) 7,000 410,375
PacifiCare Health Systems, Inc. Cl. B (b) 9,500 819,375
------------
2,852,156
4
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
SHARES OR
CONTRACTS VALUE
- -------------------------------------------------------------------------
MEDICAL PRODUCTS-2.0%
Johnson & Johnson 6,000 $ 317,250
Medtronic, Inc. 15,000 933,750
------------
1,251,000
PHARMACEUTICALS-1.7%
Abbott Laboratories (c) 10,700 600,538
Schering-Plough Corp. 6,000 436,500
------------
1,037,038
------------
5,140,194
MULTI-INDUSTRY-1.2%
CAPITAL GOODS-1.2%
Tyco International Ltd. 13,500 742,500
ENERGY-1.2%
OIL SERVICE-1.2%
Baker Hughes, Inc. 9,800 376,075
Schlumberger Ltd. 3,200 343,200
------------
719,275
POLLUTION CONTROL-1.0%
Philip Environmental, Inc. (b) 38,500 582,313
Total Common Stocks (cost $36,674,238) 42,164,481
CALL OPTIONS PURCHASED-29.9% (B)
Airtouch Communications, Inc.
expiring Jan '98 @ $20 400 197,500
AlliedSignal, Inc.
expiring Jan '98 @ $35 145 538,313
Amgen, Inc.
expiring Jan '98 @ $30 190 524,875
Boeing Co.
expiring Jan '98 @ $60 70 286,125
Campbell Soup Co.
expiring Jan '98 @ $22.50 150 369,375
Chase Manhattan Corp.
expiring Jan '98 @ $40 140 798,000
Citicorp
expiring Jan '98 @ $50 70 413,875
expiring Jan '99 @ $60 65 336,375
Coca-Cola Co.
expiring Jan '98 @ $30 185 494,875
Dean Witter Discover & Co.
expiring Jul '97 @ $30 150 95,625
Federal National Mortgage Association
expiring Jan '98 @ $20 300 495,000
General Electric Co.
expiring Jan '98 @ $50 100 500,000
expiring Jan '99 @ $60 50 215,000
Gillette Co.
expiring Jan '98 @ $35 40 155,250
expiring Jan '99 @ $55 60 142,875
Home Depot, Inc.
expiring Jan '98 @ $35 100 205,000
Intel Corp.
expiring Jan '98 @ $40 50 503,750
expiring Jan '99 @ $50 233 2,196,025
Johnson & Johnson
expiring Jan '98 @ $30 140 332,500
Marriott International, Inc.
expiring Jan '98 @ $30 120 259,500
MBNA Corp.
expiring Jan '98 @ $16.625 200 360,000
Merck & Co., Inc.
expiring Jan '98 @ $40 230 1,035,000
expiring Jan '99 @ $55 150 498,750
Merrill Lynch & Co., Inc.
expiring Jan '98 @ $30 100 563,750
NationsBank Corp.
expiring Jan '99 @ $35 100 226,250
Nike, Inc.
expiring Jan '98 @ $32.50 100 312,500
expiring Jan '98 @ $40 50 118,125
Nokia Corp.
expiring Jul '97 @ $45 190 274,313
Pfizer, Inc.
expiring Jan '98 @ $50 210 748,125
expiring Jan '99 @ $60 75 225,000
Philip Morris Cos., Inc.
expiring Jan '98 @ $60 80 440,000
expiring Jan '98 @ $70 215 970,187
expiring Jan '99 @ $70 235 1,078,062
Schering-Plough Corp.
expiring Jan '99 @ $50 50 131,563
5
PORTFOLIO OF INVESTMENTS (CONTINUED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
CONTRACTS OR
PRINCIPAL
VALUE
(000) VALUE
- -------------------------------------------------------------------------
Sears, Roebuck and Co.
expiring Jan '98 @ $25 255 $ 656,625
Texaco Inc.
expiring Jan '98 @ $90 30 64,500
UAL Corp.
expiring Jan '98 @ $32.50 150 506,250
United Technologies Corp.
expiring Jan '98 @ $40 100 361,250
Wal-Mart Stores, Inc.
expiring Jan '98 @ $20 150 142,500
Walt Disney Co.
expiring Jan '99 @ $50 200 555,000
Total Call Options Purchased
(cost $17,244,344) 18,327,588
SHORT-TERM INVESTMENTS-6.1%
Prudential Funding 6.76%, 4/01/97
(cost $3,734,000) $3,734 3,734,000
TOTAL INVESTMENTS-104.7%
(cost $57,652,582) 64,226,069
CALL OPTIONS WRITTEN-(0.9%) (B)
Chase Manhattan Corp.
expiring Apr '97 @ $100 20 (1,375)
Chicago Board Options
Exchange NASDAQ 100 Index
expiring Apr '97 @ $790 25 (78,125)
expiring Apr '97 @ $810 90 (173,250)
expiring Apr '97 @ $820 50 (74,375)
CONTRACTS
OR SHARES VALUE
- -------------------------------------------------------------------------
Citicorp
expiring Apr '97 @ $115 30 $ (3,563)
Standard & Poor's 500 Index
expiring Apr '97 @ $750 100 (180,000)
expiring Apr '97 @ $780 100 (42,500)
expiring Apr '97 @ $785 20 (8,000)
expiring Apr '97 @ $790 15 (3,750)
Total Call Options Written
(premiums received $1,174,298) (564,938)
SECURITIES SOLD SHORT-(1.2%) (B)
Apple Computer, Inc. 5,000 (91,250)
Hercules, Inc. 5,000 (211,250)
Tosco Corp. 15,400 (438,900)
Total Securities Sold Short
(proceeds $756,033) (741,400)
TOTAL INVESTMENTS, NET OF OUTSTANDING
CALL OPTIONS WRITTEN AND
SECURITIES SOLD SHORT-102.6%
(cost $55,722,251) 62,919,731
Other assets less liabilities-(2.6%) (1,578,243)
NET ASSETS-100% $61,341,488
(a) Country of origin--Finland.
(b) Non-income producing.
(c) Security, or portion thereof, has been segregated to collateralize short
sales and options. This collateral has a total market value of approximately
$2,606,769.
Glossary:
ADR - American depository receipt.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $57,652,582) $64,226,069
Cash 5,153
Receivable for investment securities sold 5,263,472
Dividends receivable 32,314
Deferred organization expenses and other assets 35,873
Total assets 69,562,881
LIABILITIES
Securities sold short, at value (proceeds $756,033) 741,400
Outstanding call options written, at value
(premiums received $1,174,298) 564,938
Payable for investment securities purchased 5,451,591
Dividend payable 1,234,464
Advisory fee payable 80,899
Administration fee payable 13,876
Accrued expenses and other liabilities 134,225
Total liabilities 8,221,393
NET ASSETS $61,341,488
COMPOSITION OF NET ASSETS
Capital stock, at par $ 25,050
Additional paid-in capital 49,343,315
Accumulated net realized gain on investments 4,775,643
Net unrealized appreciation of investments, short sales
and options written 7,197,480
$61,341,488
NET ASSET VALUE PER SHARE (based on 2,505,000 shares outstanding) $24.49
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends $154,259
Interest 11,504 $ 165,763
EXPENSES
Advisory fee 455,672
Administrative 79,392
Custodian 71,451
Audit and legal 41,270
Shareholder servicing 31,755
Directors' fees and expenses 14,620
Transfer agency 9,727
Printing 8,979
Registration 7,110
Amortization of organization expenses 1,994
Dividends on securities sold short 924
Miscellaneous 3,996
Total expenses before interest 726,890
Interest expense on short sales 18,433
Total expenses 745,323
Net investment loss (579,560)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SHORT SALES AND OPTIONS WRITTEN
Net realized gain on long transactions 9,255,593
Net realized loss on short sale transactions (408,266)
Net realized loss on written option transactions (94,378)
Net change in unrealized appreciation of investments,
short sales and options written (68,204)
Net gain on investments 8,684,745
NET INCREASE IN NET ASSETS FROM OPERATIONS $8,105,185
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MARCH 31,1997 SEPTEMBER 30,
(UNAUDITED) 1996
--------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (579,560) $(1,199,997)
Net realized gain on investment, short sale and
option written transactions 8,752,949 4,019,458
Net change in unrealized appreciation of
investments, short sales and options written (68,204) 643,212
Net increase in net assets from operations 8,105,185 3,462,673
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments (2,346,185) (7,440,855)
Total increase (decrease) 5,759,000 (3,978,182)
NET ASSETS
Beginning of year 55,582,488 59,560,670
End of period $61,341,488 $55,582,488
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997 (UNAUDITED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance All-Market Advantage Fund (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. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities including securities sold short 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 Alliance
Capital Management L.P. (the "Investment Adviser") 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.
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.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Adviser, the Fund
reimburses AFS for costs relating to servicing phone inquiries for the Fund.
The Fund reimbursed AFS$920 during the six months ended March 31, 1997.
10
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
Under terms of a Shareholder Servicing Agreement, the Fund pays its Shareholder
Servicing Agent, Paine Webber Inc. a quarterly fee equal to the annualized rate
of .10 of 1% of the Fund's average weekly net assets.
Brokerage commissions paid for the six months ended March 31, 1997 on
investment transactions amounted to $120,968, none of which was paid to
affiliated brokers.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments,
short-term options, and U.S. government securities) aggregated $45,675,104 and
$49,493,613, respectively, for the six months ended March 31, 1997. There were
no purchases or sales of U.S. government and government agency obligations for
the six months ended March 31, 1997.
At March 31, 1997, the cost of investments for federal income tax purposes was
$55,735,088. Accordingly, gross unrealized appreciation of investments was
$8,901,599 and gross unrealized depreciation of investments was $1,716,956
resulting in net unrealized appreciation of $7,184,643.
1. OPTIONS TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) options on market
indices and covered put and call options on U.S. securities that are traded on
U.S. securities exchanges and over-the-counter markets.
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, 1997 were as
follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Options outstanding at beginning of period 320 $ 207,873
Options written 6,154 7,159,881
Options terminated in closing purchase transactions (5,624) (5,877,167)
Options expired (400) (316,289)
Options outstanding at March 31, 1997 450 $ 1,174,298
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
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
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 6.25% to
the prospective brokers 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, 1997, the Investment Adviser owned
5,000 shares. During the six months ended March 31, 1997 and the year ended
September 30, 1996, the Fund did not issue shares in connection with the
dividend reinvestment plan.
12
FINANCIAL HIGHLIGHTS
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT THE PERIOD
NOV. 4,
SIX MONTHS ENDED YEAR ENDED 1994(a)
MARCH 31,1997 SEP. 30, TO SEP. 30,
(UNAUDITED) 1996 1995
--------------- ---------- ------------
Net asset value, beginning of period $22.19 $23.78 $19.70(b)
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.23) (.48) (.09)
Net realized and unrealized gain on
investments 3.47 1.86 5.65
Net increase in net asset value from
operations 3.24 1.38 5.56
LESS: DIVIDENDS AND DISTRIBUTIONS
Distributions from net realized gains (.94) (2.97) (1.48)
Total dividends and distributions (.94) (2.97) (1.48)
Net asset value, end of period $24.49 $22.19 $23.78
Market value, end of period $21.00 $19.00 $19.50
TOTAL RETURN
Total investment return based on:(c)
Market value 15.44% 13.26% 5.46%
Net asset value 14.89% 8.10% 28.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $61,341 $55,582 $59,561
Ratio of expenses to average net
asset 2.36%(d) 2.87% 2.00%(d)
Ratio of expenses to average net
assets excluding interest expense 2.30%(d)(e) 2.62% 2.00%(d)
Ratio of net investment loss to
average net assets (1.83)%(d) (2.11)% (.48)%(d)
Portfolio turnover rate 77% 199% 140%
Average commission rate paid (f) $.0490 $.0616 --
(a) Commencement of operations.
(b) Net of offering costs of $.30.
(c) 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.
(d) Annualized.
(e) Net of interest expense of .06% on short sales (see Note C).
(f) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
13
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of Shareholders of the Alliance All-Market Advantage Fund
was held on January 9, 1997. The description of each proposal and number of
shares are as follows:
SHARES SHARES VOTED
VOTED FOR WITHOUT AUTHORITY
- -------------------------------------------------------------------------------
1. To elect directors: Class One Directors
(term expires 1998)
Donald J. Robinson 1,979,627 34,844
Class Three Directors
(term expires 2000)
John D. Carifa 1,979,627 34,844
Ruth Block 1,979,627 34,844
Robert C. White 1,979,627 34,844
SHARES SHARES
SHARES VOTED 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, 1997: 1,992,591 3,707 18,173
14
ALLIANCE ALL-MARKET ADVANTAGE FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
ROBERT C. WHITE (1)
OFFICERS
ALFRED HARRISON, SENIOR VICE PRESIDENT
KATHLEEN CORBET, SENIOR VICE PRESIDENT
PETER W. ADAMS, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
JACK KOLTES, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
MICHAEL J. 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 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.
15
ALLIANCE ALL-MARKET ADVANTAGE FUND
Summary of General Information
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is to seek long-term growth of capital through
all market conditions. Consistent with the investment style of the Adviser's
Large-Cap Growth Group, the Fund will invest in a core portfolio of equity
securities (common stocks, securities convertible into common stocks and rights
and warrants to subscribe for or purchase common stocks) of large,
intensely-researched, high-quality companies that, in the judgement of the
Adviser, are likely to achieve superior earnings growth.
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, each Sunday in THE NEW YORK TIMES and each
Saturday in BARRON'S, 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
1345 Avenue of the Americas
New York, New York 10105
ALLIANCE CAPITAL
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
AMASR
