ALLIANCE ALL-ASIA INVESTMENT FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
LETTER TO SHAREHOLDERS ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
June 4, 1996
Dear Shareholder:
We are pleased to provide the semi-annual report to shareholders of the
Alliance All-Asia Investment Fund for the six months ended April 30, 1996.
Since the beginning of the fiscal year in November 1995, the Asian-Pacific
markets have risen significantly, as has the net asset value of your Fund.
As shown in the table below, Alliance All-Asia Investment Fund enjoyed very
favorable returns in both the six- and twelve-month periods ended April 30,
1996. For comparison we've shown the performance for the overall stock markets
of the Far East, represented by the unmanaged Morgan Stanley Pacific Index
(MSCI PI), and for the Lipper Pacific Region Funds Average, which reflects
performance of 38 funds. These peer group funds have overall similar investment
objectives to All-Asia Investment Fund, though investment policies for the
various funds may differ.
TOTAL RETURN
PERIODS ENDED APRIL 30, 1996
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE ALL-ASIA INVESTMENT FUND
Class A +17.52% +19.93%
Class B +16.91% +19.08%
Class C +17.01% +18.95%
MSCI PI +18.15% +7.72%
LIPPER PACIFIC REGION FUNDS AVERAGE +13.51% +15.92%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
APRIL 30; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3. THE FUND'S BENCHMARKS
ARE UNMANAGED.
Over the first six months of the fiscal year, Fund performance benefited from
stock selection in Thailand, Philippines, South Korea, India and the
overweighted position in Malaysia. Fund performance was negatively impacted by
underweighted positions in Australia and Hong Kong at the beginning of year.
MARKETS ARE ON TRACK
In the letter of our annual report to shareholders for the fiscal year ended
October 31, 1995, we expressed optimism about the fact that many of the
negative elements affecting Asian equity markets at that time were only
temporary. We believed this situation presented an outstanding investment
opportunity for the Fund. Our forecasts proved accurate; since December 1995,
the Asian equity markets have moved significantly higher. Year-to-date 1996 has
seen the Philippines rise about 24%, followed by India and Indonesia at 23% and
18% respectively. The Japanese stock market rose only about 1.4% in U.S. dollar
terms, lagging behind the performance of other larger Asian markets such as
Hong Kong and Malaysia, for example, which rose 10% and 15%, respectively.
Among other markets, Taiwan was up 13% and Korea climbed by about one percent.
Weakness in the yen has largely offset the rise in the Japanese equity market
for U.S. dollar-based investors. However, the All-Asia Investment Fund's
Japanese stock exposure has been partially hedged against the weakness in the
Japanese currency, thereby limiting the negative impact.
STABLE ECONOMIC GROWTH
Unlike the United States, where interest rates have been moving higher in the
past few months, monetary conditions are favorable throughout much of the
Asian-Pacific region. Interest rates are moving downward selectively in certain
countries, most notably South Korea and Thailand. In other countries in the
region, economic growth rates have slowed; but even in these countries, growth
rates are high in comparison to their counterparts elsewhere in the world. We
expect growth rates to remain at these moderating but healthy levels. In fact,
we view this slowdown as positive for financial assets as inflationary
pressures recede and allow interest rates to fall.
The Japanese economy is at an important inflection point. Fiscal and monetary
stimulus has resulted in a moderate recovery in the overall economy as well as
in corporate profits. However, the strength and sustainability of the recovery
is questionable, given that there is little potential for further fiscal
stimulus as we head into the second half of 1996. Further weakness in the
currency is possible, but may not be sufficient to keep the Japanese economy on
a strong uptrend. We see a reflationary policy by the Bank of Japan as
essential for a sustained recovery.
1
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
PORTFOLIO ACTIVITY
We continue to adhere to a research-intensive stock selection philosophy that
focuses on growth at a reasonable price. Earnings momentum should be quite
strong for a number of stocks in 1996-97. We also expect this trend to continue
and even grow stronger in 1997-98. Core holdings in consumer, infrastructure
and financial stocks comprise much of the portfolio. The companies that we own
in these areas have secular growth rates in excess of the average stock in
Asia.
Country weightings are largely an outcome of the stock selection process. We
have steadily decreased our exposure to the Japanese market versus other Asian
markets, as Japanese stock prices moved higher and exceeded our valuation
targets relative to other Asian stocks. We continue to maintain overweight
positions in the Philippines and Indonesia, given the strong growth rates for
the stocks that we favor in both countries. We added to our Hong Kong weighting
in the last two months as the decline in bank as well as other stocks made
their valuations compelling. We continue to build on our positions in Malaysia,
particularly in the gaming sector, because of the strong earnings growth and
reasonable valuations. In Thailand, we remain positive on the financials,
particularly high quality banks, versus most other sectors.
We continue to be optimistic that 1996 will be an excellent year for Asian
equities. Valuations for many Asian stocks are less expensive than those in the
United States and these valuations come with superior earnings growth. Growth
rates for gross domestic product in Asia in the medium term should remain
significantly higher than comparable growth rates for U.S. and European
economies. Inflation and interest rate scenarios are fairly benign in much of
Asia, creating the environment for what we expect to be good stock market
performance.
Thank you for your continued interest and investment in Alliance All-Asia
Investment Fund. We look forward to reporting its progress to you again later
in the year.
Sincerely,
John D. Carifa
Chairman and President
A. Rama Krishna
Senior Vice President and Portfolio Manager
2
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
OBJECTIVE AND POLICIES
Alliance All-Asia Investment Fund seeks long-term capital appreciation. The
Fund invests principally in a non-diversified portfolio of equity securities of
Asian/Pacific countries.
INVESTMENT RESULTS
_______________________________________________________________________________
TOTAL RETURN AS OF APRIL 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +19.93% +14.88%
. Since Inception* +15.57% +12.12%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +19.08% +15.08%
. Since Inception* +14.84% +12.84%
CLASS C SHARES
. One Year +18.95%
. Since Inception* +14.90%
The total returns reflect investment of dividends and/or capital gains
distributions in additional shares-with and without the effect of the 4.25%
maximum front-end sales charge for Class A or applicable contingent deferred
sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4); Class C
shares are not subject to front-end or contingent deferred sales charges. Past
performance does not guarantee future results. Investment return and principal
value will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
* Inception: 11/28/94.
3
TEN LARGEST HOLDINGS*
APRIL 30, 1996 (UNAUDITED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $VALUE NET ASSETS
- -------------------------------------------------------------------------------
PT HM Sampoerna-Multi-Industry Indonesian company $ 1,392,788 4.0%
Malayan Banking Berhad-Offers commercial and
merchant banking, finance, leasing and insurance and
other financial services in Malaysia and Singapore 1,354,602 3.9
Resorts World Berhad-Operates a tourist resort at
Genting Highlands 1,247,483 3.6
Korea Mobile Telecom Corp. (GDR)-Provides mobile
telecommunications and radio paging services 1,197,000 3.4
Bangkok Bank Co., Ltd.-Provides commercial banking
services in Thailand and overseas 1,130,950 3.3
AMMB Holdings Berhad-Subsidiary of Arab Malaysian
Merchant Bank Berhad offering banking and
financial services 1,105,173 3.2
Commerce Asset Holdings Berhad-An investment
holding company which provides commercial
banking and related services 1,022,659 2.9
Consolidated Electric Power Asia, Ltd.-Develops and
operates power station projects and provides civil
construction and engineering services 981,242 2.8
Philippine Commercial International Bank-Provides
commercial and merchant banking and other
financial services 936,186 2.7
Dao Heng Bank Group, Ltd.-An investment holding company
with principal activities in commercial banking,
deposit-taking, bullion, trustee and nominee
services to individuals, commerce and industry 933,669 2.7
$11,301,752 32.5%
* Excludes short-term obligations.
4
INDUSTRY DIVERSIFICATION
APRIL 30, 1996 (UNAUDITED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Aerospace & Defense $ 39,769 0.1%
Banking 8,065,688 23.2
Basic Industries 1,217,076 3.5
Capital Goods 716,418 2.1
Consumer Manufacturing 2,505,162 7.2
Consumer Services 5,693,721 16.4
Consumer Staples 2,791,935 8.0
Energy 54,032 0.2
Finance 4,416,299 12.7
Healthcare 351,455 1.0
Muli-Industry 1,670,219 4.8
Technology 1,432,544 4.1
Transportation 278,260 0.8
Utilities 4,566,797 13.2
Total Investments* 33,799,375 97.3
Cash and receivables, net of liabilities 952,626 2.7
Net Assets $34,752,001 100.0%
* Excludes short-term obligations.
5
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
COMMON STOCKS97.3%
AUSTRALIA3.9%
Coca-Cola Amatil, Ltd. 30,235 $ 318,027
Goldfields, Ltd. * 4,176 10,990
National Australia Bank, Ltd. 21,000 188,391
Qantas Airways, Ltd. 116,382 206,618
Tab Corp Holdings, Ltd. 59,750 247,356
TNT, Ltd. 82,000 108,861
Woolworths, Ltd. 107,236 273,778
----------
1,354,021
CHINA0.4%
Siliconware Precision (GDR) 10,000 136,250
HONG KONG15.9%
Consolidated Electric Power Asia, Ltd. 593,000 981,242
Dao Heng Bank Group, Ltd. 244,000 933,669
First Pacific Co. 555,000 738,996
Guoco Group, Ltd. 56,000 278,715
HSBC Holdings, Plc. 60,000 895,870
Hutchison Whampoa, Ltd. 29,000 179,950
Hysan Development Co., Ltd. (a) 11,000 35,337
New World Infrastructure * 16 35
Sun Hung Kai Properties, Ltd. (b) 30,000 286,989
Swire Pacific, Ltd. Cl. A 30,000 255,963
Television Broadcasting, Ltd. 139,000 557,042
Wharf Holdings, Ltd. 103,000 382,147
----------
5,525,955
INDIA2.7%
Bajaj Auto, Ltd. (GDR) (c) 17,000 612,000
Steel Authority Of India (GDR) * 22,000 339,570
----------
951,570
INDONESIA7.5%
PT HM Sampoerna 126,000 1,392,788
PT Indosat 175,000 608,500
PT Semen Cibinong 15,000 44,430
PT Semen Gresik 2,000 $6,933
PT Telekomunikasi Indonesia (ADR) * 10,000 341,250
Series B 136,000 227,688
----------
2,621,589
JAPAN19.7%
Amano Corp. 5,000 71,220
Asahi Glass Co., Ltd. 11,000 133,550
Bank Of Tokyo-Mitsubishi 2,000 46,269
Canon, Inc. 7,000 139,190
Chiba Bank, Ltd. 2,000 18,068
Dai Nippon Printing Co., Ltd. 4,000 75,331
Daifuku Co., Ltd. 4,000 63,094
Daito Trust Construction Co., Ltd. 7,300 108,169
Daiwa House Industry Co., Ltd. 1,000 15,965
Daiwa Securities Co., Ltd. 3,000 46,174
DDI Corp. 20 171,885
East Japan Railway Co. 20 106,878
Eisai Co., Ltd. 4,200 83,113
Fuji Photo Film (b) 1,000 31,165
Furakawa Co., Ltd. 6,000 32,121
Hirose Electric 3,000 185,268
Hokkaido Takushoku Bank 7,000 20,276
Honda Motor Co. 2,000 45,696
House Foods Industry 1,000 20,075
Hoya Corp. 5,000 176,856
Ishikawajima-Harima Heavy Industries 8,000 39,769
Japan Securities Finance 16,000 253,908
Kamigumi Co., Ltd. 5,000 51,623
Kandenko Co., Ltd. 4,200 57,416
Kao Corp. 8,000 107,069
Kirin Brewery Co., Ltd. 4,000 52,005
Kokuyo* 1,000 27,723
Kuraray Co., Ltd. 7,000 80,971
Long-Term Credit Bank of Japan 26,000 225,439
Mabuchi Motor Co. 1,000 61,565
Maeda Road Construction 1,000 18,355
6
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
Matsushita Electric Industrial Co. 9,000 $ 159,170
Matsushita Electric Works 6,000 68,257
Mitsubishi Heavy Industries, Ltd. 7,000 62,502
Mitsubishi Materials Corp. 4,000 24,091
Mitsubishi Oil Co. 6,000 54,032
Mitsui Marine & Fire Insurance Co. 7,000 59,357
Mitsui Trust & Banking 18,000 216,816
Mori Seiki 3,000 68,544
National House Industrial 3,000 53,057
NGK Insulators 2,000 22,752
Nikko Securities Co. 5,000 63,572
Nintendo Corp., Ltd. (b) 3,600 278,075
Nippon Express Co., Ltd. 6,000 62,521
Nippon Light Metal Co. 6,000 39,004
Nippon Paper Industries Co. 5,000 36,614
Nippon Steel Co. 13,000 46,977
Nisshin Steel Co., Ltd. 25,000 110,415
NKK Corp. * 18,000 56,441
Nomura Securities Co., Ltd. 5,000 108,981
NTT Data Communications Systems Co. 3 104,966
Osaka Gas Co. 12,000 48,067
Rohm Co. (b) 9,000 573,013
Sakura Bank, Ltd. 10,000 117,585
Sankyo Co., Ltd. 1,000 24,282
Santen Pharmaceutical Co. 1,000 23,421
Seven-Eleven Japan 3,200 226,681
Shimano, Inc. 3,000 60,800
Shimizu Corp. 5,000 57,359
Shiseido Co., Ltd. 5,000 63,094
Sony Music Entertainment, Inc. 200 10,841
Sumitomo Electric Industries 4,000 57,359
Sumitomo Marine & Fire Insurance Co. 6,000 57,129
Sumitomo Realty and Development 7,000 56,345
Sumitomo Rubber Industries 4,000 36,365
Taisho Pharmaceutical 2,000 43,784
Takeda Chemical Industries 2,000 34,606
Toagosei Co., Ltd. 3,000 16,777
Tokai Bank 5,000 64,050
Tokyo Electric Power Co. 3,010 82,008
Tokyo Gas Co., Ltd. 25,000 98,227
Tokyo Mitsubishi Bank 8,200 188,920
Tokyo Steel Mfg. Co. 5,000 100,856
Tostem Corp. 3,000 93,208
Tokyo Kanetsu 3,000 16,462
Toyota Motor Corp. 8,000 182,783
UBE Industries, Ltd. 4,000 16,481
Yakult Honsha 3,000 44,166
Yamanouchi Pharmaceutical 6,000 142,249
Yamazaki Baking Co., Ltd. 2,000 40,916
----------
6,840,184
MALAYSIA21.4%
AMMB Holdings Berhad* 73,000 1,105,173
Commerce Asset Holdings Berhad 150,000 1,022,659
Lion Land Berhad 172,000 217,975
Magnum Corp. Berhad 500,000 866,252
Malakoff Berhad 86,000 406,978
Malayan Banking Berhad 139,000 1,354,602
Petronas Gas Berhad* 99,000 436,735
Rashid Hussain Berhad 110,000 388,209
Resorts World Berhad 206,000 1,247,483
Telekom Malaysia Berhad 27,000 254,462
YTL Corp. Berhad 27,000 135,352
----------
7,435,880
NEW ZEALAND2.6%
Air New Zealand, Ltd. Cl. B 2,000 7,003
Fletcher Challenge, Ltd. 36,000 46,466
Lion Nathan, Ltd. 215,000 535,818
Telecom Corp. of New Zealand 75,000 318,216
907,503
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $VALUE
- ------------------------------------------------------------------------
PHILIPPINES6.1%
Alson's Cement Corp. * 163,000 $ 76,299
International Container Terminal Svcs., Inc.* 26,250 18,306
Manila Electric Co. Series B 60,000 559,419
Metropolitan Bank & Trust Co. 19,000 511,846
Philippine Commercial International Bank * 70,000 936,186
----------
2,102,056
SINGAPORE3.6%
First Capital Corp., Ltd. 11,000 34,906
Overseas Union Bank Corp., Ltd. 21,000 162,860
Overseas-Chinese Banking Corp., Ltd. 5,000 68,659
Singapore Airlines, Ltd. 38,000 383,920
Singapore Press Holdings, Ltd. 31,600 598,051
----------
1,248,396
SOUTH KOREA5.2%
Hyundai Motor (GDR) 1,000 16,200
Korea Electric Power (ADR)* 6,900 191,475
Korea Mobile Telecom Corp. (GDR) * (b) 21,000 1,197,000
Korean Air Lines 5,000 161,902
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $VALUE
- ------------------------------------------------------------------------
Pohang Iron & Steel Co. (ADR) 8,000 $ 220,000
----------
1,786,577
TAIWAN0.3%
Advanced Semi-Conductor Engineering (GDR)*(b) 8,000 117,000
THAILAND8.0%
Bangkok Bank Co., Ltd. 78,000 1,130,950
Phatra Thanakit Co., Ltd. 72,000 627,513
The Thai Farmers Bank, Ltd. 76,000 873,131
Total Access Communication Plc. (b) 16,000 140,800
----------
2,772,394
Total Common Stocks
(cost $30,689,256) 33,799,375
TIME DEPOSIT4.0%
Republic National Bank
5.3125%, 5/01/96
(cost $1,400,000) US$ 1,400 1,400,000
TOTAL INVESTMENTS101.3%
(cost $32,089,256) 35,199,375
Other assets less liabilities(1.3%) (447,374)
NET ASSETS100% $34,752,001
* Non-income producing security.
(a) Security has warrants attached. These warrants will begin pricing on May
6, 1996.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30, 1996,
these securities amounted to $2,066,800 or 5.9% of net assets.
Glossary of Terms:
ADR - American Depository Receipt.
GDR - Global Depository Receipt.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $32,089,256) $35,199,375
Cash, at value (cost $231,678) 231,706
Receivable for investment securities sold 2,690,791
Receivable for capital stock sold 576,764
Deferred organization expenses 145,130
Dividends and interest receivable 39,256
Total assets 38,883,510
LIABILITIES
Payable for investment securities purchased 2,465,630
Payable for capital stock redeemed 1,469,947
Advisory fee payable 25,146
Distribution fee payable 19,870
Accrued expenses 150,428
Total liabilities 4,131,509
NET ASSETS $34,752,001
COMPOSITION OF NET ASSETS
Capital stock, at par $ 2,868
Additional paid-in capital 31,623,010
Distributions in excess of net investment income (142,155)
Accumulated net realized gain on investments and foreign
currency transactions 162,851
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 3,105,427
$34,752,001
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($11,644,985/
955,403 shares of capital stock issued and outstanding) $12.19
Sales Charge-4.25% of public offering price .54
Maximum offering price $12.73
CLASS B SHARES
Net asset value and offering price per share ($20,176,284/
1,670,000 shares of capital stock issued and outstanding) $12.08
CLASS C SHARES
Net asset value, redemption and offering price per share($2,930,732
/242,416 shares of capital stock issued and outstanding) $12.09
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $11,275) $103,816
Interest 47,417 $ 151,233
EXPENSES
Advisory fee 91,430
Distribution fee - Class A 8,221
Distribution fee - Class B 55,487
Distribution fee - Class C 8,539
Custodian 114,437
Audit and legal 38,509
Registration 28,688
Amortization of organization expenses 20,281
Transfer agency 18,311
Directors' fees 17,044
Printing 14,100
Administrative 13,714
Miscellaneous 9,978
Total expenses 438,739
Less expenses waived and assumed by Adviser
(see Note B) (76,625)
Net expenses 362,114
Net investment loss (210,881)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 199,103
Net realized gain on foreign currency transactions 45,731
Net change in unrealized appreciation of:
Investments 3,091,000
Foreign currency denominated assets and liabilities (8,192)
Net gain on investments and foreign currency transactions 3,327,642
NET INCREASE IN NET ASSETS FROM OPERATIONS $3,116,761
See notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
SIX MONTHS ENDED NOV. 28,
APRIL 30,1996 1994* TO
(UNAUDITED) OCT. 31,1995
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (210,881) $ (123,468)
Net realized gain on investments and foreign
currency transactions 244,834 184,401
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities 3,082,808 22,619
Net increase in net assets from operations 3,116,761 83,552
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (21,900) -0-
Class B (46,814) -0-
Class C (5,476) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 23,071,936 8,451,942
Total increase 26,114,507 8,535,494
NET ASSETS
Beginning of period 8,637,494 102,000
End of period $34,752,001 $8,637,494
* Commencement of operations.
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance All-Asia Investment Fund, Inc. (the 'Fund'), was organized as a
Maryland corporation on September 21, 1994 and is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The Fund had no operations other than the sale to Alliance
Capital Management L.P. (the 'Adviser') of 10,000 shares of Class A common
stock and 100 shares each of Class B and Class C shares of common stock for the
aggregate amount of $102,000 on October 18, 1994. Class A, Class B and Class C
shares, commenced operations on November 28, 1994. The Fund offers three
classes of shares. Class A shares are sold with an initial sales charge of up
to 4.25%. Class B shares are sold with a contingent deferred sales charge which
declines from 4.00% to zero depending on the period of time the shares are
held. Class B shares will automatically convert to Class A shares eight years
after the end of the calendar month of purchase. Class C shares are sold
without an initial or contingent deferred sales charge. All three classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange for which market
quotations are readily available are valued at the last quoted sales price on
that exchange prior to the time when assets are valued. Securities listed or
traded on certain foreign exchanges whose operations are similar to the U.S.
over-the-counter market are valued at the price within the limits of the latest
available current bid and asked price deemed best to reflect fair value.
Securities which mature in 60 days or less are valued at amortized cost which
approximates market value. Restricted securities are valued at fair value as
determined by the Board of Directors. In determining fair value, consideration
is given to cost, operating and other financial data.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $201,500 have been deferred and are
being amortized on a straight-line basis through October, 1999.
3. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gain on foreign currency transactions represents foreign exchange
gains and losses from the holding of foreign currencies, foreign currency
contracts, exchange gains or losses realized between the trade and settlement
dates on security transactions, and the difference between the amounts of
dividends, interest and foreign taxes receivable recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
currency gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation (depreciation) of investments and foreign currency
denominated assets and liabilities.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provision for federal income or excise taxes is
required.
5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
12
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of an investment advisory agreement, the Fund pays its Adviser,
Alliance Capital Management L.P. a fee at an annual rate of 1% of the Fund's
average daily net assets. Such fee is accrued daily and paid monthly. The
Adviser has agreed, under the terms of the advisory agreement, to reimburse the
Fund to the extent that its aggregate expenses (exclusive of interest, taxes,
brokerage, distribution fees, foreign custody fees, extraordinary expenses and
certain other expenses) exceed the limits prescribed by any state in which the
Fund's shares are qualified for sale. The Fund believes that the most
restrictive expense ratio limitation currently imposed by any state is 2.5% of
the first $30 million of its average daily net assets, 2% of the next $70
million of its average daily net assets and 1.5% of its average daily net
assets in excess of $100 million. In compliance with this limitation, the
Adviser has voluntarily agreed to waive a portion of its Advisory fees. Such
waiver amounted to $76,625 for the six months ended April 30, 1996. borne
certain expenses incurred in the operation of the Fund and to the extent
necessary to limit the aggregate expenses. For the six months ended April 30,
1996 the Adviser has reimbursed the Fund for $76,625 of its expenses incurred.
Under the terms of an Administrative Agreement, the Fund pays Alliance Capital
Management L.P., (the 'Administrator') a monthly fee equal to the annualized
rate of .15 of 1% of the Fund's average daily net assets. Such compensation
amounted to $13,714 for the six months ended April 30, 1996.
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.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $11,725 for the six months ended April 30, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $8,693 from the sales of Class A shares and $9,985
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended April 30, 1996.
Brokerage commissions paid on securities transactions for the six months ended
April 30, 1996 amounted to $177,034, of which $3,780 was paid to Baring
Securities, a broker utilizing the services of the Pershing Division of
Donaldson, Lufkin & Jenrette Securities Corp., an affiliate of the Adviser.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30 of 1% of the Fund's average daily net assets attributable to
Class A shares and 1% of the average daily net assets attributable to both
Class B and Class C shares. The fees are accrued daily and paid monthly. The
Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $1,077,245 and $56,818 for Class B and
Class C shares respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $26,372,227 and $3,658,838, respectively, for the six months ended
April 30, 1996. At April 30, 1996, the cost of securities for federal income
tax purposes was $32,102,459. Accordingly,
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
gross unrealized appreciation of investments was $3,358,962 and gross
unrealized depreciation of investments was $262,046 resulting in net unrealized
appreciation of $3,096,916.
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the differences between the original
contract and the closing of such contract is included in net realized gain or
loss on foreign currency transactions. Fluctuations in the value of forward
exchange currency contracts are recorded for financial reporting purposes as
unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or securities in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of foreign
currencies relative to the U.S. dollar.
NOTE E: CAPITAL STOCK
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C. Each class
consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED NOV. 28, SIX MONTHS ENDED NOV. 28,
APRIL 30,1996 1994* TO APRIL 30,1996 1994* TO
(UNAUDITED) OCT. 31,1995 (UNAUDITED) OCT. 31,1995
------------ ------------ -------------- --------------
CLASS A
Shares sold 927,165 517,977 $10,530,949 $5,445,327
Shares issued in
reinvestment of
distributions 1,703 -0- 18,287 -0-
Shares redeemed (248,056) (253,386) (2,739,381) (2,728,474)
Net increase 680,812 264,591 $ 7,809,855 $2,716,853
CLASS B
Shares sold 1,410,989 594,882 $15,915,693 $6,165,639
Shares issued in
reinvestment of
distributions 3,362 -0- 35,911 -0-
Shares redeemed (241,237) (98,096) (2,764,915) (1,034,923)
Net increase 1,173,114 496,786 $13,186,689 $5,130,716
CLASS C
Shares sold 278,896 82,858 $ 3,146,531 $ 865,593
Shares issued in
reinvestment of
distributions 481 -0- 5,146 -0-
Shares redeemed (94,267) (25,652) (1,076,285) (261,220)
Net increase 185,110 57,206 $ 2,075,392 $ 604,373
* Commencement of operations.
14
FINANCIAL HIGHLIGHTS ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------
SIX MONTHS ENDED NOV. 28,
APRIL 30,1996 1994* TO
(UNAUDITED) OCT. 31,1995
------------- -----------
Net asset value, beginning of period $10.45 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (c) (.10)** (.19)**
Net realized and unrealized gain on investments 1.92 .64
Net increase in net asset value from operations 1.82 .45
LESS: DISTRIBUTIONS
Distributions from net realized gains on investments
and foreign currency transactions (.08) -0-
Net asset value, end of period $12.19 $10.45
TOTAL RETURN
Total investment return based on net asset value(b) 17.52% 4.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11,645 $2,870
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.47%(a) 4.42%(a)
Expenses, before waivers/reimbursements 4.32%(a) 10.57%(a)
Net investment loss, net of waivers/reimbursements (1.75)%(a) (1.87)%(a)
Portfolio turnover rate 42% 90%
Average commission rate paid (d) $.0286 $ -0-
See footnote summary on page 17.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
-----------------------------
SIX MONTHS ENDED NOV. 28,
APRIL 30,1996 1994* TO
(UNAUDITED) OCT. 31,1995
-------------- -----------
Net asset value, beginning of period $10.41 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (c) (.14)** (.25)**
Net realized and unrealized gain on investments 1.89 .66
Net increase in net asset value from operations 1.75 .41
LESS: DISTRIBUTIONS
Distributions from net realized gains on investments
and foreign currency transactions (.08) -0-
Net asset value, end of period $12.08 $10.41
TOTAL RETURN
Total investment return based on net asset value(b) 16.91% 4.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $20,176 $5,170
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 4.17%(a) 5.20%(a)
Expenses, before waivers/reimbursements 5.01%(a) 11.32%(a)
Net investment loss, net of waivers/reimbursements (2.42)%(a) (2.64)%(a)
Portfolio turnover rate 42% 90%
Average commission rate paid (d) $.0286 $ -0-
See footnote summary on page 17.
16
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-----------------------------
SIX MONTHS ENDED NOV. 28,
APRIL 30,1996 1994* TO
(UNAUDITED) OCT. 31,1995
-------------- -----------
Net asset value, beginning of period $10.41 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (c) (.14)** (.35)**
Net realized and unrealized gain on investments 1.90 .76
Net increase in net asset value from operations 1.76 .41
LESS: DISTRIBUTIONS
Distributions from net realized gains on investments
and foreign currency transactions (.08) -0-
Net asset value, end of period $12.09 $10.41
TOTAL RETURN
Total investment return based on net asset value(b) 17.01% 4.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,931 $597
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 4.18%(a) 5.84%(a)
Expenses, before waivers/reimbursements 5.01%(a) 11.38%(a)
Net investment loss, net of waivers/reimbursements (2.44)%(a) (3.41)%(a)
Portfolio turnover rate 42% 90%
Average commission rate (d) $.0286 $ -0-
* Commencement of operations.
** Net of expenses reimbursed by the Adviser.
(a) Annualized.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Based on average shares outstanding.
(d) For fiscal year beginning on or after September 1, 1995, a fund is
required to disclosure its average commission rate per share for trades on
which commissions are charged.
17
ALLIANCE ALL-ASIA INVESTMENT FUND, INC.
_______________________________________________________________________________
DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
W.H. HENDERSON (1)
STIG HOST (1)
RICHARD M. LILLY (1)
ALAN STOGA (1)
ROBERT C. WHITE (1)
OFFICERS
A. RAMA KRISHNA, SENIOR VICE PRESIDENT
KARAN TREHAN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
NICHOLAS E. CROSSLAND, VICE PRESIDENT
KELLY A. MORGAN, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER AND CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800)-221-5672
(1) Members of the Audit Committee.
18
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
19
ALLIANCE ALL-ASIA INVESTMENT FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
AAISR
