ALLIANCE
GLOBAL
SMALLCAP
FUND
ANNUAL REPORT
JULY 31, 1995
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
September 5, 1995
Dear Shareholder:
We are pleased to provide you with an update of Alliance Global Small Cap
Fund's performance and investment activity for the fiscal year ended July 31,
1995. For the twelve-month period, the following table compares the Fund's
total returns with that of its benchmark, the unmanaged Morgan Stanley (MS)
World Index, and with the Lipper Global Small Company (GSC) Funds Average,
which reflects the performance of 23 funds:
Twelve Months Ended July 31, 1995
Total Return Ending NAV
------------ ----------
ALLIANCE GLOBAL SMALL CAP FUND
Class A +16.62% $10.38
Class B +15.77% $ 9.95
Class C +15.75% $ 9.96
MS WORLD INDEX +19.24%
LIPPER GSC FUNDS AVG. +16.59%
The Fund's total returns are based on the net asset values of each class of
shares as of July 31; additional investment results and complete descriptions
of the Fund's benchmarks appear on pages 3 and 4.
Previously we have compared your Fund's performance with the unmanaged Russell
2000 Index, which returned +24.98% over the twelve-month reporting period. The
Russell 2000 is composed of the smallest 2,000 stocks on the New York and
American stock exchanges and the NASDAQ. Your Fund's portfolio management team,
which began managing the Fund in mid 1994, has reviewed the components of this
benchmark and concluded that Morgan Stanley's World Index provides a more
accurate comparison for your Fund's performance. Specifically, Alliance Global
Small Cap Fund's allocation is expected to be more in line with the World Index
than that of the previous benchmark due to its weighting in international
markets. Going forward we will compare your Fund's performance with the World
Index and the Lipper average.
U.S. MARKET
The overall U.S. equity market has been propelled to record high levels during
the first seven months of 1995. The valuation of equities has been supported by
a strong bond market, lower interest rates and soaring corporate profits.
The Federal Reserve lowered interest rates in July by 0.25% in tacit
acknowledgment of a slowing U.S. economy. While this may renew market interest
in cyclical stocks short term, we plan to keep our focus on growth, looking for
companies with the best combination of valuation and earnings growth over the
next 3-5 years. Over the medium term, we would expect to see broad,
predominantly large cap market averages pause or pull back after the great
gains year to date, which could position smaller cap issues to outperform. In
that context, selective stock picking should be rewarded and we have identified
a number of companies with excellent growth potential.
Your Fund's portfolio currently reflects the following investment themes:
communication equipment (including cellular), retail, and oil and gas services.
Technology remains a point of tactical focus, although we have trimmed back on
the basis of full valuation. Alliance Global Small Cap Fund's performance was
helped by strong advances in selected technology stocks (examples include
Informix, Komag and Kemet), energy stocks (Global Marine) and multinational
consumer and health care issues (Healthwise of America). Stocks that held back
Fund performance included Sun Healthcare and Adtran.
INTERNATIONAL MARKETS
When the U.S. dollar's sharp fall ended in the second quarter of 1995, the
prospects for stronger economic growth in Europe and Japan increased. If
current dollar strength continues, international stock markets are likely to
perform well relative to the U.S. for the remainder of this economic cycle.
Despite a slowdown in the second quarter of 1995, we expect world growth to
remain positive during the current year. However, global monetary authorities
must continue to supply adequate liquidity to allow ongoing expansion in 1996.
1
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
The Bank of Japan appears to have finally recognized that it must overcome the
effects of deflation and negligible gross national product growth by
significantly adding to the domestic money supply. Meanwhile, public works
spending and corporate cost cutting to regain global competitiveness remain the
dominant economic realities.
Continental European companies face the same deflationary and competitive
pressures as Japanese companies and their growth is now slowing. With the
prospect of reduced public works and capital goods spending, central banks need
to become involved in charting a growth plan for their economies. In this
environment, we are emphasizing international companies with global leadership
positions in capital goods and medical and electronics technology.
Developing markets have become fairly valued after strong second quarter 1995
performance. We continue to participate in these markets, but stock selection
will be critical to performance for the foreseeable future.
Thank you for your continued interest and investment in Alliance Global Small
Cap Fund. We look forward to reporting its progress to you early in 1996.
Sincerely,
John D. Carifa
Chairman and President
Alden M. Stewart
Senior Vice President
2
INVESTMENT RESULTS ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF JULY 31, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +16.62% +11.68%
. Five Years +4.88% +3.98%
. Ten Years +8.84% +8.37%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +15.77% +12.08%
. Since Inception* +7.69% +7.69%
CLASS C SHARES
. One Year +15.75%
. Since Inception* +11.08%
The average annual 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: 9/17/90, Class B; 5/3/93, Class C.
3
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
ALLIANCE GLOBAL SMALL CAP FUND
GROWTH OF A $10,000 INVESTMENT:
7/31/85 TO 7/31/95
$43,000
$38,000
$33,000
$28,000
$23,000
$18,000
$13,000
$8,000
7/31/85
7/31/95
MSCI WORLD
LIPPER GLOBAL SMALL COMPANY FUNDS AVERAGE
RUSSELL 2000
GLOBAL SMALL CAP FUND CLASS A: $22,365
This chart illustrates the total value of an assumed investment in Alliance
Global Small Cap Fund Class A shares after deducting the maximum 4.25% sales
charge, and with dividends and capital gains reinvested. Performance for Class
B and Class C shares will vary from the results shown above due to differences
in expenses charged to those classes. Past performance is not indicative of
future results, and is not representative of future gain or loss in capital
value or dividend income.
The unmanaged Russell 2000 Stock Index is comprised of the smallest 2000 stocks
on the New York and American stock exchanges and the NASDAQ.
The Lipper Global Small Company Funds Average reflects performance of 23 funds,
2 of which have been in existence for the full ten-year period. These funds
have generally similar investment objectives to Alliance Global Small Cap Fund,
although some funds included in the average may have somewhat different
investment policies.
When comparing Alliance Global Small Cap Fund to the indices shown above, you
should note that the Fund's performance reflects the maximum sales charge of
4.25%, while no such charges are reflected in the performance of the indices.
The Lipper average assumes deduction of maximum sales charges where applicable.
Global Small Cap Fund
Russell 2000
Lipper Global Small Company Funds Average
MSCI World
4
TEN LARGEST HOLDINGS
JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY COUNTRY U.S.$VALUE %OF NET ASSETS
- -------------------------------------------------------------------------------
Nine West Group, Inc. United States $1,000,350 1.5%
Informix Corp. United States 915,412 1.4
Reading & Bates Corp. United States 859,000 1.3
Nokia AB Corp. pfd.-free Finland 799,524 1.2
Telephone & Data Systems, Inc. United States 755,625 1.1
Hospitality Franchise Systems United States 752,400 1.1
Global Marine, Inc. United States 745,775 1.1
20th Century Industries, Inc. United States 735,062 1.1
Banco Latinoamericano de
Exportaciones, S.A. (ADR) Panama 730,275 1.1
Filtronic Comtec Plc. United Kingdom 716,227 1.1
$8,009,650 12.0%
MAJOR PORTFOLIO CHANGES
FOR THE SIX MONTHS ENDED JULY 31, 1995
SHARES
PURCHASES COUNTRY BOUGHT HOLDINGS 7/31/95
- -------------------------------------------------------------------------------
ADC Telecommunications, Inc. United States 5,000 5,000
Alaska Air Group, Inc. United States 18,600 30,000
Healthwise America, Inc. United States 14,800 24,100
Infinity Broadcasting Corp. United States 13,800 13,800
Roche Holdings AG, Ltd. Switzerland 60 60
Sgl Carbon Germany 11,000 11,000
Sun Healthcare Group, Inc. United States 22,880 43,400
Telephone & Data Systems, Inc. United States 19,500 19,500
United States Cellular Corp. United States 20,150 20,100
Xtra Corp. United States 12,700 12,700
SALES COUNTRY SOLD HOLDINGS 7/31/95
- -------------------------------------------------------------------------------
Berkeley Group Plc. Ord. United Kingdom 125,000 -0-
Coram Healthcare Corp. United States 29,400 -0-
Cypress Semiconductor Corp. United States 16,400 5,200
Health Management United States 26,900 -0-
Industrie Natuzzi S.p.A. Italy 20,000 19,200
Informix Corp. United States 5,000 30,900
Komag, Inc. United States 12,900 5,800
Kwik-Fit Holdings Plc. United Kingdom 250,000 -0-
Lotus Development Corp. United States 11,900 -0-
National Health Laboratories Hldgs. United States 73,900 -0-
5
TEN LARGEST COUNTRY HOLDINGS
JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
PERCENT OF
COUNTRY VALUE NET ASSETS
- ----------------------------------------------------------------------------
United States $27,032,502 40.6%
Japan 9,732,274 14.6
United Kingdom 4,800,990 7.2
Netherlands 2,859,318 4.3
Germany 2,496,249 3.7
Sweden 1,773,182 2.7
France 1,149,308 1.7
Italy 1,080,933 1.6
Spain 871,736 1.3
Finland 865,199 1.3
$52,661,691 79.0%
TEN LARGEST INDUSTRY HOLDINGS
JULY 31, 1995
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -----------------------------------------------------------------------------
Drugs, Hospital Supplies & Medical Services $3,964,303 5.9%
Communication Equipment 3,161,147 4.8
Retailing 3,042,551 4.6
Oil & Gas 3,028,264 4.6
Machinery 3,002,682 4.5
Semi-Conductors & Related 2,942,061 4.4
Insurance 2,764,444 4.1
Transportation & Shipping 2,568,883 3.9
Telephone - Utility 2,489,729 3.7
Banking 2,086,106 3.1
$29,050,170 43.6%
6
PORTFOLIO OF INVESTMENTS
JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- ------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-91.2%
UNITED STATES INVESTMENTS-40.6%
CONSUMER PRODUCTS & SERVICES-14.5%
APPAREL-0.6%
Nautica Enterprises, Inc.* 14,100 $ 382,463
AUTO & RELATED-0.1%
Ek Chor China Motorcycle Co. 3,000 52,500
BROADCASTING & CABLE-1.8%
Advo, Inc. 17,100 314,212
Cablevision Systems Corp. Cl.A* 4,300 295,088
Data Broadcasting 5,607 44,856
Infinity Broadcasting Corp. 13,800 510,600
Valuevision International, Inc. 10,000 58,125
1,222,881
COSMETICS-0.6%
Jean Phillippe Fragrances, Inc.* 32,600 362,675
DRUGS, HOSPITAL SUPPLIES & MEDICAL SERVICES-5.5%
Apria Healthcare Group, Inc. 11,200 364,000
Centocor, Inc.* 10,300 131,325
Cephalon, Inc. 8,300 194,012
Community Health Systems, Inc.* 16,800 659,400
Healthwise America, Inc.* 24,100 710,950
Laboratory Corp. Of America Holdings
warrant, expiring 4/28/05* 1 2
Manor Care, Inc. 2,000 64,750
Medcath, Inc.* 19,600 269,500
Medimmune, Inc.* 10,000 90,000
Physician Reliance Network* 16,600 390,100
Sun Healthcare Group, Inc.* 43,400 640,150
Surgical Care Affiliates, Inc. 8,400 159,600
3,673,789
ENTERTAINMENT & LEISURE TIME-0.6%
Cinergi Pictures Entertainment, Inc. 26,000 113,750
Discovery Zone, Inc.* 500 3,563
Heritage Media Corp. Cl.A* 10,000 287,500
404,813
PRINTING & PUBLISHING-0.3%
IVI Publishing, Inc.* 27,400 219,200
RESTAURANTS & LODGING-2.5%
Hospitality Franchise Systems 17,100 752,400
Host Marriott Corp. 37,000 411,625
International Pizza Corp.* 16,400 13,325
warrants, expiring 9/22/98* 16,400 2,306
La Quinta Inns, Inc. 10,100 283,727
Redeemable Lion Hotels, Inc. 7,500 159,375
1,622,758
RETAILING-2.5%
Ann Taylor Stores Corp. 1,000 19,695
Bed Bath & Beyond, Inc. 7,500 232,500
Circle K Corp.* 6,100 118,187
Corporate Express, Inc. 7,050 178,894
Musicland Stores, Inc. 14,200 138,450
Nine West Group, Inc.* 24,700 1,000,350
1,688,076
9,629,155
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
TECHNOLOGY-13.0%
COMMUNICATION & EQUIPMENT-2.4%
ADC Telecommunications, Inc.* 5,000 $ 193,750
Adtran, Inc. 4,100 150,675
Ascend Communications, Inc. 3,600 261,000
Cascade Communications Corp.* 1,400 71,050
CD Radio, Inc. 20,700 56,925
Millicom International Cellular, S.A.* 21,400 631,300
Scientific-Atlanta, Inc. 11,900 255,850
1,620,550
COMMUNICATION SERVICES-0.6%
Vanguard Cellular Systems, Inc. 14,300 378,950
COMPUTER EQUIPMENT-0.4%
General Datacomm Industries, Inc. 2,000 27,000
Quantum Corp. 10,000 257,500
284,500
COMPUTER HARDWARE-0.6%
Read-Rite Corp.* 9,200 379,500
COMPUTER PERIPHERALS-0.6%
Komag, Inc.* 5,800 398,025
COMPUTER SOFTWARE & SERVICES-2.1%
Cadence Design Systems, Inc. 6,200 234,050
Informix Corp.* 30,900 915,412
Symantec Corp.* 9,200 250,700
1,400,162
ELECTRICAL EQUIPMENT-0.5%
Kemet Corp. 4,600 $297,850
Smartflex Systems, Inc. 1,500 18,000
315,850
ELECTRONICS-1.7%
Boston Technology, Inc.* 16,900 329,550
Glenayre Technologies, Inc.* 4,000 250,000
Integrated Device Technology, Inc.* 5,400 338,175
Tellabs, Inc.* 4,500 200,250
1,117,975
SEMI-CONDUCTORS & RELATED-0.8%
Cypress Semiconductor Corp.* 5,200 274,300
Lam Research Corp.* 4,200 286,650
560,950
SOFTWARE-0.4%
Intersolv, Inc.* 11,800 293,525
TELEPHONE - UTILITY-2.9%
Dionex Corp.* 10,400 500,500
Telephone & Data Systems, Inc. 19,500 755,625
United States Cellular Corp.* 20,100 678,375
1,934,500
8,684,487
BASIC INDUSTRIES-5.2%
BUSINESS SERVICES-0.5%
Gymboree Corp.* 7,000 216,125
Stratacom, Inc.* 2,400 130,200
346,325
CHEMICALS-0.2%
Wang Labs, Inc. New* 8,300 155,625
MACHINERY-0.3%
JLG Industries, Inc. 5,800 210,250
8
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- ------------------------------------------------------------------------
MINING & METALS-0.5%
Noble Drilling Corp.* 50,900 $ 330,850
OFFICE EQUIPMENT-0.3%
Staples, Inc.* 8,700 195,750
PAPER & FOREST PRODUCTS-0.0%
Asia Pacific Resources International Holding,
Ltd.* 3,000 28,125
POLLUTION CONTROL-0.1%
USA Waste Services, Inc.* 2,100 39,900
TRANSPORTATION & SHIPPING-3.3%
Alaska Air Group, Inc.* 30,000 577,500
America West Airlines, Inc. 9,400 131,600
Mesa Airlines, Inc. 27,000 293,625
Pittston Services Group 10,800 270,000
Southwest Airlines Co. 5,600 161,000
USAIR Group, Inc. 15,600 148,200
Xtra Corp. 12,700 582,612
2,164,537
3,471,362
ENERGY-5.0%
DOMESTIC PRODUCERS-0.8%
Diamond Shamrock, Inc. 19,900 517,400
INTERNATIONAL PRODUCERS-0.1%
XCL, Ltd.* 110,000 75,625
OIL & GAS SERVICES-2.8%
Arethusa, Ltd. 22,600 401,150
BJ Services Co.* 10,500 261,188
Global Marine, Inc.* 129,700 745,775
Rowan Cos., Inc.* 67,000 485,750
1,893,863
OTHER-1.3%
Reading & Bates Corp.* 85,900 859,000
3,345,888
FINANCIAL SERVICES-2.9%
BANKS-0.4%
First USA, Inc. 5,500 250,938
INVESTMENT COMPANIES-0.1%
T. Rowe Price & Associates Inc. 400 16,200
United Asset Management Corp. 500 20,035
36,235
INSURANCE-2.4%
20th Century Industries, Inc. 61,900 735,062
National Re Corp. 11,100 377,400
PXRE Corp. 19,400 501,975
1,614,437
1,901,610
Total United States Investments
(cost $22,368,851) 27,032,502
FOREIGN INVESTMENTS-50.6%
ARGENTINA-0.1%
Telecom Argentina Stet-France (ADR)*(a) 1,000 49,625
Telephone - Utility
AUSTRALIA-1.1%
AAPC, Ltd. 385,000 181,979
Restaurants & Lodging
Advance Bank Australia 30,000 16,396
Banking
Ampolex, Ltd. 40,000 90,399
Oil & Gas Exploration
Diamond Ventures, Ltd.* 154,000 22,747
Mining & Metals
Fai Life, Ltd. 500,000 232,644
Insurance
Oil Search, Ltd. 200,000 165,436
Oil
709,601
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- ------------------------------------------------------------------------
AUSTRIA-0.8%
Austria Mikro Systeme International AG(a) 1,100 $211,844
Semi-Conductors & Related
Benckiser-Wasser-Technik AG 1,500 207,003
Pollution Control
Mayr-Melnhof Karton AG*(a) 2,000 131,205
Packaging
550,052
CANADA-0.8%
Accugraph Corp. 17,000 59,592
Miscellaneous
Cinar Films, Inc. 12,000 112,500
Entertainment & Leisure
MacMillan Bloedel, Ltd. 3,000 42,449
Paper & Forest Products
Nelvana, Ltd.*(a) 13,000 182,757
Entertainment & Leisure
Orbit Oil & Gas, Ltd. 10,000 7,011
Oil & Gas Exploration
Renaissance Energy, Ltd.* 4,000 82,159
Oil & Gas Exploration
Royal Plastics Group, Ltd.*(a) 5,000 63,445
Building & Related
549,913
CHILE-0.4%
Banco Osorno Y La Un (ADR) 11,000 163,625
Banking - Regional
Empresas Telex Chile S.A. 5,000 59,375
Communication Equipment
Enersis, S.A. Sponsored (ADR) 3,000 76,875
Electric Utility
299,875
DENMARK-0.8%
Novo Nordisk AS 2,450 $283,715
Drugs
Tele Danmark AS 4,000 223,439
Telephone - Utility
507,154
FINLAND-1.3%
Nokia AB Corp. pfd.-free(a) 12,000 799,524
Communication Equipment
Tamro AB 15,000 65,675
Medical Services
865,199
FRANCE-1.7%
Coflexip Sponsored (ADR) 13,500 334,125
Oil & Gas Services
Credit Local De France 2,500 231,921
Banking
Ecco Travail Temporary 1,800 123,782
Temporary Help
Lafarge Coppee 2,200 168,966
Building & Related
Synthelabo 5,000 290,514
Drugs, Hospital Supplies &
Medical Services
1,149,308
GERMANY-3.7%
Apcoa Parking AG(b) 2,000 105,316
Business Services
Bayer AG(b) 500 134,170
Chemicals
Duerr Beteiliqunqs AG(b) 700 253,481
Machinery
Fag Kugelfischer(b) 300 45,445
Industrial Machinery
Fielmann AG pfd.(b) 9,000 470,677
Retail
Hach AG(b) 50 24,742
Retail
10
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
Mannesmann AG(b) 900 $ 299,805
Machinery
Marschollek Lautenschlaeger 550 374,125
Insurance
Rheinhold & Mahla AG(b) 400 85,119
Building & Related
Sgl Carbon(a)(b) 11,000 641,131
Specialty Chemical
Veba A.G.(b) 1,500 62,238
Electric Utility
2,496,249
HONG KONG-1.2%
Fu Hui Jewelry Co., Ltd.* 300,000 16,477
Jewelry & Watches
Hong Kong Land Holdings, Ltd. 70,000 135,800
Real Estate
Hong Kong Telecomm 80,000 146,808
Telephone - Utility
HSBC Holdings Plc. 15,000 203,541
Banking
Paul Y.-ITC Construction Holdings, Inc.* 800,000 199,535
Engineering & Construction
Sing Tao 180,000 109,330
Printing & Publishing
811,491
INDIA-0.3%
Gujarat Normal Fertilizer (GDR) 4,000 40,426
Chemicals
Shriram Industrial Enterprises, Ltd.* 15,000 131,250
warrants, expiring 4/28/96* 5,000 1,000
Multi-Industry
172,676
INDONESIA-0.2%
Indonesian Satellite Corp. (ADR) 4,000 150,000
Telecommunications
IRELAND-0.4%
Crean (James) Plc. 25,000 97,922
Multi-Industry
Irish Continental Group 21,500 174,897
Transportation - Shipping
272,819
ITALY-1.6%
Fila Holding Sponsored (ADR) 10,000 292,500
Apparel
Industrie Natuzzi S.p.A. (ADR)* 19,200 696,000
Furniture Products
Marzotto (GAE) & Figli-D'ris 7,000 42,279
Textile Products
Telecom Italia Mob 40,000 50,154
Telephone - Utility
1,080,933
JAPAN-14.6%
Akita Bank(b) 5,000 41,185
Banking - Regional
Asahi Bank(b) 16,000 186,721
Banking - Regional
Aval Data Corp.(b) 9,000 183,549
Semi-Conductors & Related
Canon, Inc.*(b) 18,000 326,309
Computer Peripherals
Chubu Sekiwa Real Estate, Ltd.(b) 1,000 10,798
Real Estate
Daibiru Corp.(b) 9,000 101,971
Real Estate
Denki Kagaku Kogyo(b) 10,000 33,991
Chemicals
Eiden Sakakiya Co. 6,000 89,055
Retail
Familymart Co.(b) 2,000 99,026
Retail - Food
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
Fuji Electronics Co.(b) 5,000 $ 138,228
Semi-Conductors & Related
Fukuda Corp.(b) 7,000 77,487
Engineering & Construction
Futaba Corp.(b) 3,000 148,199
Technology - Electronics
Hachijuni Bank(b) 6,000 72,740
Banking - Regional
Hitachi Metals, Ltd.(b) 3,000 35,010
Steel
Ishiguro Homa Co. 3,000 53,025
Retail
Ishihara Sangyo(b) 23,000 75,572
Chemicals
Kanamoto Co., Ltd.*(b) 2,000 29,912
Engineering & Construction
Kaneshita Construction(b) 9,000 114,208
Engineering & Construction
Keyence Corp.(b) 2,600 321,097
Machinery
Kinden Corp.(b) 6,000 106,730
Electrical Equipment
Koa Fire & Marine 16,000 98,980
Insurance
Kurita Water Industries(b) 8,000 221,165
Chemicals - Specialty
Kyocera Corp.(b) 4,000 345,343
Semi-Conductors & Related
Kyoritsu Maintenance(b) 2,000 82,257
Janitorial Services
Mabuchi Motor Co.(b) 5,000 358,033
Technology - Computer Peripherals
Matsushita Electrical Industrial Co., Ltd.(b) 20,000 333,107
Consumer Appliances
Matsuyadenki Co., Ltd.(b) 3,000 29,810
Retail
Mimasu Semiconductor(b) 1,000 26,059
Semi-Conductors
Minebea Co.(b) 25,000 190,913
Machinery
Ministop Co.(b) 1,000 21,641
Retail - Food
Mitsubishi Bank(b) 10,000 236,800
Banking
Mitsubishi Motors Corp.(b) 15,000 126,445
Auto & Related
Murata Manufacturing Co., Ltd.(b) 3,000 131,203
Communication Equipment
Namura Shipbuildng(b) 12,000 47,995
Machinery
National House Industrial Co.(b) 5,000 96,306
Building & Construction
New Oji Paper Co., Ltd.(b) 30,000 298,436
Paper & Forest Products
Ngk Spark Plug Co.(b) 3,000 37,729
Semi-Conductors & Related
Nichiei Co., Ltd.(b) 3,000 190,347
Financial Services
Nichiha Corp.(b) 4,000 77,498
Miscellaneous
Nihon Dempa Kogyo(b) 8,000 231,135
Communication Equipment
Nikon Corp.(b) 11,000 123,635
Semi-Conductors & Related
Nippon Electric Glass Co., Ltd.(b) 9,000 163,154
Consumer Appliances
Nippon Sanso Corp. 20,000 98,799
Mining & Metals
Nippon Steel Corp. 10,000 33,877
Mining & Metals
Nippon Telegraph & Telephone Corp.(b) 10 85,203
Telephone Utilities
Nippon TV Network(b) 1,000 231,135
Broadcasting
Nissen Corp., Ltd.(b) 1,000 32,064
Retail
Omron Corp.(b) 6,000 136,642
Machinery
12
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
Oriental Construction(b) 4,000 $ 88,375
Building & Construction
P S Corp.(b) 8,700 166,587
Construction
Promise Co., Ltd.(b) 3,600 161,523
Financial Services
Ricoh Elemex Co., Ltd.(b) 2,000 24,926
Computer Peripherals
Rohm Co., Ltd.(b) 4,000 227,056
Semi-Conductors
Sankyo Co.(b) 12,000 282,801
Drugs
Santen Pharmaceutical Co.(b) 7,000 188,761
Drugs
Sanyo Shinpan Finance Co., Ltd.(b) 2,000 163,154
Financial Services
Sato Corp.(b) 7,000 134,036
Technology - Electronics
Secom Co.(b) 1,000 61,636
Business Services
Sekichu Co.(b) 1,000 13,596
Retail
Sekisui Chemical Co.(b) 15,000 180,150
Chemicals
Sharp Corp.(b) 6,000 87,695
Consumer Manufacturing
Shimamura Co., Ltd.(b) 3,000 104,691
Retail
Showa Shell Sekiyu(b) 4,750 45,961
Oil
SMC Corp.(b) 4,000 242,919
Machinery
Takeda Chemical Industries(b) 8,000 107,863
Drugs
TDK Corp.(b) 3,000 152,617
Consumer Products & Services
Toda Corp.(b) 10,000 92,114
Chemicals - Specialty
Toho Bank(b) 8,000 60,005
Banking - Regional
Tokyo Broadcasting(b) 5,000 73,646
Broadcasting
Tokyo Electron, Ltd.(b) 8,000 300,023
Semi-Conductors & Related
Wesco, Inc.*(b) 4,600 112,055
Engineering & Construction
Xebio Co.(b) 300 10,163
Retail
Yamaichi Secs Co.(b) 10,000 62,429
Financial Services
Yamanashi Chuo Bank(b) 7,000 79,311
Banking - Regional
Yamanouchi Pharmaceutical(b) 8,000 177,657
Drugs
9,732,274
MALAYSIA-0.4%
Arab Malaysian Finance 1,000 4,680
Financial Services
Austral Enterprise 9,333 20,132
rights, expiring 8/24/95 4,666 -0-
Multi-Industry
C.I. Holdings Berhad 16,000 64,466
Building & Related
Highlands & Lowlands 10,000 18,884
Real Estate
Malaysian Assuranc 12,000 46,396
Insurance
Metacorp Berhad 33,000 120,203
Engineering & Construction
274,761
13
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
MEXICO-0.3%
Bufete Industrial SA 700 $ 11,900
Engineering & Construction
Grupo Industrial Durango, S.A.* 15,000 136,875
Paper & Forest Products
International de Ceramica* 34,915 54,287
Ceramic Tiles
203,062
NETHERLANDS-4.3%
Akzo Nobel N.V.(b) 1,000 131,316
Chemicals
Amev N.V(b). 4,000 229,160
Insurance
ASM Lithography Holding N.V.(b) 3,000 174,767
Semi-Conductors
Atag Holding N.V.(b) 500 35,082
Multi-Industry
BAM Groep N.V.(b) 1,800 127,686
Engineering & Construction
Boskalis Westminister cum. pfd.(b) 820,000 510,422
Engineering & Construction
Content Beheer N.V.(b) 10,000 256,839
Temporary Help
Elsevier N.V.(b) 22,000 280,399
Printing & Publishing
KLM Royal Dutch Airlines(b) 9,000 338,333
Consumer Services - Airlines
NBM Amstelland Nv 10,000 137,753
Building & Construction
Philips Electronic(b) 5,500 270,132
Appliances
Polygram N.V.(b) 3,000 190,409
Leisure Related
Randstad Holdings N.V.(b) 2,500 177,020
Temporary Help
2,859,318
NEW ZEALAND-0.6%
Air New Zealand 40,000 134,753
Airlines
Helicopter Line 50,000 149,912
Entertainment & Leisure
Lion Nathan, Ltd. 55,000 106,354
Food & Beverages
391,019
NORWAY-0.8%
Tomra Systems AS 82,500 376,467
Pollution Control
Western Bulk Shipping AS(a) 31,500 148,875
Shipping
525,342
PANAMA-1.1%
Banco Latinoamericano de Exportaciones,
S.A. (ADR) 18,200 730,275
Finance
PERU-0.2%
Banco Wiese Sponsored (ADR) 15,000 127,500
Banking - Regional
PORTUGAL-0.1%
TVI Televisao Independente* 7,800 35,859
Broadcasting & Cable
SINGAPORE-0.1%
Lim Kah Ngam, Ltd. 30,000 35,082
Multi-Industry
SOUTH KOREA-1.0%
Samsung Electronics Co., Ltd.
(ADR)(GDS)*(a) 7,000 460,250
bonus shrs*(a)(c) 1,385 89,790
baby shrs(a) 395 52,535
bonus shrs(a)(c) 78 10,302
14
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
rights, expiring
12/31/95*(a) 108 $ -0-
Semi-Conductors & Related
Yukong, Ltd. (ADR) 5,912 71,712
Energy International Producers
684,589
SPAIN-1.3%
Bco Popular Esp 1,200 194,284
Banking
Centros Commerciales Continente, S.A.* 9,000 178,648
Retail
Construcciones Y Aux de Ferr 2,000 80,574
Railroad Transportation
Corporacion Mapfre 3,000 168,702
Insurance
Repsol S.A. 5,000 168,702
Energy
Viscofan Envolturas Celulosi 6,000 80,826
Food
871,736
SWEDEN-2.7%
Autoliv AB (ADS)(a) 3,900 242,124
Auto & Related
Electrolux AB 1,000 52,649
Household Products
Hoganas AB Cl.B(a) 6,000 121,007
Mining & Metals
Kalmar Industries AB(a) 16,000 244,562
Machinery
Rottneros Bruks AB 75,000 124,191
Paper & Forest Products
SKF AB 25,000 548,424
Machinery
Sparbanken Sverige 25,000 221,139
Banking - Regional
SSAB (Svenskt Stal Aktiebolag) Series B 18,000 219,086
Mining & Metals
1,773,182
SWITZERLAND-1.1%
Lindtt & Spruengli AG Ord. 20 316,384
Consumer Staples
Roche Holdings AG, Ltd. 60 408,605
Drugs
724,989
TAIWAN-0.3%
The Taiwan Fund, Inc. 11,500 232,875
Mutual Fund
TURKEY-0.1%
Netas Telekomunik Ord. Cl.B*(a) 215,600 89,535
Communication Equipment
UNITED KINGDOM-7.2%
Aran Energy(b) 350,000 240,607
Oil - International
Asda Group Plc.(b) 40,000 60,432
Retailing
Automated Security Holdings Plc.*(b) 130,008 76,903
Consumer Products & Services
Bell Cablemedia Plc. (ADR)* 5,000 87,500
Broadcasting & Cable
British Airways Plc.(b) 30,000 220,144
Airlines
Bryant Group(b) 100,000 213,429
Building & Related
Caird Group Plc.*(b) 900,000 57,554
Pollution Control
Filtronic Comtec Plc.*(b) 140,000 716,227
Communication Equipment
M.S. International Plc.(b) 650,000 342,926
Machinery
Mcbride(b) 24,000 80,000
Household Products
Mid-States Plc.*(b) 740,000 532,374
Auto & Related
Morrison (William) Supermarkets Plc.(b) 40,000 100,080
Retailing - Food
15
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
COMPANY SHARES U.S. $ VALUE
- -----------------------------------------------------------------------
Mowlem (John) & Co. Plc.(b) 580,000 $ 686,171
Engineering & Construction
Northern Ireland Electricity Plc.(b) 20,000 122,142
Electric Utility
Powerscreen International Plc.(b) 39,000 215,108
Recycling Equipment
Resort Hotels Plc.*(c) 1,000,000 -0-
Restaurants & Lodging
Sears Plc.(b) 40,000 66,827
Retailing
Siebe Plc.(b) 15,000 163,669
Machinery
Tate & Lyle(b) 12,000 84,604
Food & Beverages
Tomkins(b) 30,000 123,022
Household Products
Williams Holdings(b) 20,000 104,396
Building & Construction
WPP Group(b) 70,000 150,520
Advertising
Zeneca Group Plc.(b) 20,000 356,355
Drugs
4,800,990
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -----------------------------------------------------------------------
Total Foreign Investments
(cost $31,531,740) $33,757,283
Total Common Stocks & Other Investments
(cost $53,900,591) 60,789,785
CORPORATE BONDS-0.4%
COMMUNICATION & EQUIPMENT-0.4%
Intelcom Group, Inc.
8.00%, 9/17/98 *(a)(c)
(cost $265,813) $ 269 229,824
COMMERCIAL PAPER-8.5%
Merrill Lynch & Co., Inc.
5.85%, 8/01/95
(amortized cost $5,683,000) 5,683 5,683,000
TOTALINVESTMENTS-100.1%
(cost $59,849,404) 66,702,609
Other assets less liabilities-(0.1%) (74,690)
NET ASSETS-100% $66,627,919
* Non-income producing security.
(a) 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 July 31, 1995
these securities amounted to $3,768,335 representing 5.66% of net assets.
(b) Securities with an aggregate market value of $18,915,717, segregated to
collateralize forward exchange currency contracts.
(c) Illiquid security, valued at fair market value (see Notes A and E).
Glossary of Terms:
ADR - American Depository Receipt
GDR - Global Depository Receipt
GDS - Global Depository Security
See notes to financial statements.
16
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
ASSETS
Investments in securities, at value (cost $59,849,404) $66,702,609
Receivable for investment securities sold 2,323,300
Dividends and interest receivable 39,962
Receivable for capital stock sold 29,020
Foreign taxes receivable 15,580
Total assets 69,110,471
LIABILITIES
Due to custodian 178,618
Payable for investment securities purchased 1,305,359
Unclaimed dividends 634,284
Unrealized depreciation of forward exchange currency contracts 151,877
Management fee payable 42,043
Distribution fee payable 20,175
Payable for capital stock repurchased 8,763
Accrued expenses 141,433
Total liabilities 2,482,552
NET ASSETS $66,627,919
COMPOSITION OF NET ASSETS
Capital stock, at par $64,478
Additional paid-in capital 60,737,913
Accumulated net realized loss on investments and
foreign currency transactions (877,940)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 6,703,468
$66,627,919
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($60,056,776/5,787,350
shares of capital stock issued and outstanding) $10.38
Sales charge-4.25% of public offering price .46
Maximum offering price $10.84
CLASS B SHARES
Net asset value and offering price per share ($5,164,440/519,200
shares of capital stock issued and outstanding) $ 9.95
CLASS C SHARES
Net asset value, redemption and offering price per share($1,406,703/
141,277 shares of capital stock issued and outstanding) $ 9.96
See notes to financial statements.
17
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $69,032) $ 566,752
Interest 304,953
$ 871,705
EXPENSES
Management fee 640,582
Distribution fee - Class A 174,375
Distribution fee - Class B 47,620
Distribution fee - Class C 12,795
Transfer agency 244,934
Administrative 161,181
Custodian 138,414
Audit and legal 99,154
Registration 70,777
Printing 59,692
Directors' fees 25,987
Miscellaneous 37,258
Total expenses 1,712,769
Less: expenses waived and assumed by manager
(See Note B) (46,816)
Net expenses 1,665,953
Net investment loss (794,248)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investments 8,002,975
Net realized loss on foreign currency transactions (213,808)
Net change in unrealized appreciation of investments 2,534,927
Net change in unrealized depreciation of foreign currency
denominated assets and liabilities (98,524)
Net gain on investments and foreign currency 10,225,570
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 9,431,322
See notes to financial statements.
18
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
YEAR ENDED OCT. 1,1993
JULY 31, TO
1995 JULY 31,1994*
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (794,248) $ (751,009)
Net realized gain on investments and
foreign currency transactions 7,789,167 5,770,260
Net change in unrealized appreciation (depreciation)
of investments and foreign currency denominated
assets and liabilities 2,436,403 (6,096,357)
Net increase(decrease) in net assets from operations 9,431,322 (1,077,106)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Tax return of capital
Class A (679,545) -0-
Class B (56,726) -0-
Class C (16,528) -0-
Net realized gain on investments
Class A (10,605,411) -0-
Class B (885,298) -0-
Class C (257,942) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 3,106,523 545,313
Total increase (decrease) 36,395 (531,793)
NET ASSETS
Beginning of period 66,591,524 67,123,317
End of period $66,627,919 $66,591,524
* The Fund changed its fiscal year end from September 30 to July 31.
See notes to financial statements.
19
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995 ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Small Cap Fund, Inc. (the "Fund"), formerly Surveyor Fund,
Inc., is registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end 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
Securities traded on United States or foreign securities exchanges are valued
at the last reported sales price, or, if no sale occurred, at the mean of the
bid and asked price. Securities listed or traded on certain foreign exchanges
whose operations are similar to the U.S. over-the-counter market are valued at
the closing bid price. Debt securities are valued at the mean of the bid and
asked price except that debt securities maturing within 60 days are valued at
amortized cost, which approximates market value. Securities for which current
market quotations are not readily available (including investments which are
subject to limitations as to their sale) are valued at their fair value as
determined in good faith by the Board of Directors. The values of foreign
securities quoted in foreign currencies are translated into U.S. dollars at the
current rate of exchange at July 31, 1995.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward currency exchange 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 loss on foreign currency transactions of $213,808 represents net
foreign exchange losses from holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on foreign security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes recorded on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid.
Net currency gains or losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of
net change in unrealized depreciation of foreign currency denominated assets
and liabilities.
3. 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 the securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis.
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 provisions for federal income or excise taxes are
required.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
6. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
During the year, the Fund reclassified certain components of net assets. The
reclassifications were the result of permanent book to tax differences in the
classification of foreign currency transactions as well as the reclassification
of a tax return of capital. The reclassifications resulted in a net decrease to
accumulated net realized loss of $3,807,433 and a corresponding decrease to
additional paid-in capital of $3,807,433. Net assets were not affected by the
change.
20
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
NOTE B: MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the management agreement, the Fund pays its Manager,
Alliance Capital Management L.P., a management fee at an annual rate of 1% of
the average daily net assets of the Fund. The fee is accrued daily and paid
monthly.
The Manager has agreed to reimburse the Fund to the extent that its aggregate
annual expenses (exclusive of interest, taxes, brokerage, distribution fee and
extraordinary expenses) exceed the limits prescribed by any state in which the
Fund's shares are qualified for sale.
The Manager believes that the most restrictive expense ratio limitation 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. For the year ended July 31,
1995, such reimbursement amounted to $46,816. Pursuant to the management
agreement, the Fund paid $161,181 to the Manager representing the cost of
certain legal and accounting services provided to the Fund by the Manager for
the year ended July 31, 1995.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Manager) in accordance with a Services Agreement for providing personnel
and facilities to perform transfer agency services for the Fund. Such
compensation amounted to $159,995 for the year ended July 31, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Manager)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $2,309 from the sale of Class A shares and $15,749
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the year ended July 31, 1995.
Brokerage commissions paid on securities transactions for the year ended July
31, 1995 amounted to $259,471, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Manager, nor to DLJ directly.
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 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 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 $922,746, and $327,084 for Class
B and 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 Manager may use its own resources
to finance the distribution of the Fund's shares.
21
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $76,675,599 and $87,533,882, respectively, for the year ended July
31, 1995. There were no purchases or sales of U.S. Government and government
agency obligations for the year ended July 31, 1995.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and 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 difference between the original contracts and the closing
of such contracts 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.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At July 31, 1995, the Fund had outstanding forward exchange currency contracts,
both to purchase and sell foreign currencies against the U.S. dollar as follows:
CONTRACT COST ON UNREALIZED
AMOUNT ORIGINATION U.S. $ APPRECIATION
(000) DATE CURRENT VALUE (DEPRECIATION)
------- ---------- ------------- --------------
FOREIGN CURRENCY BUY CONTRACTS
Japanese Yen,
expiring 9/18/95 65,000 $767,233 $741,638 $(25,595)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds,
expiring 9/18/95 1,986 3,103,721 3,171,009 (67,288)
Deutsche Mark,
expiring 9/18/95 1,598 1,112,426 1,154,791 (42,365)
Japanese Yen, expiring
9/18/95-11/15/95 475,954 5,509,027 5,462,939 46,088
Netherland Guilder,
expiring 9/18/95 2,725 1,695,495 1,758,212 (62,717)
----------
$(151,877)
At July 31, 1995, the cost of investments for federal income tax purposes was
$59,926,275. Accordingly, gross unrealized appreciation of investments was
$11,400,151 and gross unrealized depreciation of investments was $4,623,817,
resulting in net unrealized appreciation of $6,776,334.
NOTE E: ILLIQUID SECURITIES
DATE ACQUIRED COST VALUE
------------- -------- ---------
Intelcom Group, Inc. 8.00%, 9/17/98 9/16/93 $265,813 $229,824
Resort Hotels Plc. 5/01/92 719,086 -0-
Samsung Electronics Co., Ltd. Bonus shares 7/10/95 -0- 100,092
--------- ---------
$984,899 $329,916
22
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
The securities shown above are restricted as to sale and have been valued at
fair value in accordance with the procedures described in Note A. The value of
these securities at July 31, 1995 represents 0.5% of net assets.
NOTE F: CAPITAL STOCK
There are 62,500,000 shares of $.01 par value capital stock authorized, divided
into three classes, designated Class A, Class B and Class C shares. Class A and
Class C each consist of 25,000,000 authorized shares and Class B consists of
12,500,000 authorized shares. Transactions in capital stock were as follows:
SHARES AMOUNT
------------------------- ---------------------------
OCT. 1,1993 OCT. 1,1993
YEAR ENDED TO JULY 31, YEAR ENDED TO JULY 31,
JUY 31,1995 1994* JULY 31,1995 1994*
----------- ------------ ------------- ------------
CLASS A
Shares sold 391,760 325,941 $ 3,971,546 $ 3,837,992
Shares issued in
reinvestment
of distributions 952,163 -0- 8,217,164 -0-
Shares redeemed (1,095,655) (632,975) (10,827,369) (7,361,992)
Net increase (decrease) 248,268 (307,034) $ 1,361,341 $(3,524,000)
CLASS B
Shares sold 287,247 333,615 $ 2,886,684 $ 3,794,604
Shares issued in
reinvestment
of distributions 75,995 -0- 631,516 -0-
Shares redeemed (204,792) (77,401) (1,961,914) (875,725)
Net increase 158,450 256,214 $ 1,556,286 $2,918,879
CLASS C
Shares sold 136,839 165,941 $ 1,295,724 $1,883,546
Shares issued in
reinvestment
of distributions 15,861 -0- 131,935 -0-
Shares redeemed (134,697) (66,414) (1,238,763) (733,112)
Net increase 18,003 99,527 $ 188,896 $1,150,434
* The Fund changed its fiscal year end from September 30 to July 31.
23
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
OCT. 1,1993 YEAR ENDED SEPTEMBER 30,
YEAR ENDED TO ----------------------------------------------
JULY 31,1995 JULY 31,1994* 1993 1992 1991 1990
------------- ------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.08 $11.24 $9.33 $10.55 $8.26 $15.54
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.09) (.15) (.15) (.16) (.06) (.05)(a)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.50 (.01) 2.49 (1.03) 2.35 (4.12)
Net increase (decrease) in net asset
value from operations 1.41 (.16) 2.34 (1.19) 2.29 (4.17)
LESS: DISTRIBUTIONS
Tax return of capital (.12) -0- -0- -0- -0- -0-
Distributions from net realized gains (1.99) -0- (.43) (.03) -0- (3.11)
Net asset value, end of period $10.38 $11.08 $11.24 $9.33 $10.55 $8.26
TOTAL RETURN
Total investment return based on
net asset value (b) 16.62% (1.42)% 25.83% (11.30)% 27.72% (31.90)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $60,057 $61,372 $65,713 $58,491 $84,370 $68,316
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 2.54%(c) 2.42%(d) 2.53% 2.34% 2.29% 1.73%
Net investment loss (1.17)% (1.26)%(d) (1.13)% (.85)% (.55)% (.46)%
Portfolio turnover rate 128% 78% 97% 108% 104% 89%
</TABLE>
See footnote summary on page 26.
24
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------
OCT. 1,1993 YEAR ENDED SEPTEMBER 30,
YEAR ENDED TO --------------------------------------------
JULY 31, 1995 JULY 31, 1994* 1993 1992 1991 1990(E)
------------- -------------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.78 $11.00 $9.20 $10.49 $ 8.26 $ 9.12
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.12) (.17)(a) (.15) (.20) (.07) (.01)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.40 (.05) 2.38 (1.06) 2.30 (.85)
Net increase (decrease) in net asset
value from operations 1.28 (.22) 2.23 (1.26) 2.23 (.86)
LESS: DISTRIBUTIONS
Tax return of capital (.12) -0- -0- -0- -0- -0-
Distributions from net realized gains (1.99) -0- (.43) (.03) -0- -0-
Net asset value, end of period $9.95 $10.78 $11.00 $9.20 $10.49 $8.26
TOTAL RETURN
Total investment return based on
net asset value (b) 15.77% (2.00)% 24.97% (12.03)% 27.00% (9.43)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $5,164 $3,889 $1,150 $ 819 $ 121 $ 183
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 3.20%(c) 3.15%(d) 3.26% 3.11% 2.98% 2.61%(d)
Net investment loss (1.92)% (1.93)%(d) (1.85)% (1.31)% (1.39)% (1.30)%(d)
Portfolio turnover rate 128% 78% 97% 108% 104% 89%
</TABLE>
See footnote summary on page 26.
25
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
--------------------------------------
OCTOBER 1, MAY 3,
1993 1993(F)
YEAR ENDED TO TO
JULY 31, JULY 31, SEPTEMBER 30,
1995 1994* 1993
-------------- ----------- -----------
Net asset value, beginning of period $10.79 $11.00 $ 9.86
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.17) (.17)(a) (.05)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.45 (.04) 1.19
Net increase (decrease) in net asset
value from operations 1.28 (.21) 1.14
LESS: DISTRIBUTIONS
Tax return of capital (.12) -0- -0-
Distributions from net realized gains (1.99) -0- -0-
Net asset value, end of period $ 9.96 $10.79 $11.00
TOTAL RETURN
Total investment return based on
net asset value (b) 15.75% (1.91)% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,407 $1,330 $ 261
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 3.25%(c) 3.13%(d) 3.75%(d)
Net investment loss (2.10)% (1.92)%(d) (2.51)%(d)
Portfolio turnover rate 128% 78% 97%
* The Fund changed its fiscal year end from September 30 to July 31.
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) If the Fund had borne all expenses, the expense ratios would have been
2.61%, 3.27%, and 3.31% for Class A, Class B and Class C shares, respectively.
(d) Annualized.
(e) For the period September 17, 1990 (commencement of distribution) to
September 30, 1990.
(f) Commencement of distribution.
26
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS ALLIANCE GLOBAL SMALL CAP FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance Global Small Cap Fund, Inc. including the portfolio of investments, as
of July 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Global Small Cap Fund, Inc. at July 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated periods, in conformity with generally accepted accounting
principles.
New York, New York
September 9, 1995
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the fiscal year ended July 31, 1995, the Fund paid on Class A, Class B
and Class C shares long-term capital gains of $0.10.
FOREIGN TAX CREDIT (UNAUDITED)
The Fund has elected to give the benefit to its shareholders of foreign taxes
that have been paid and/or withheld. For the year ended July 31, 1995, this
benefit amounted to $69,032. Although the Fund has made the election required
to make this credit available, the amount of allowable tax credit is subject to
limitations under the Internal Revenue Code.
A notification reflecting the per share amount to be used by taxpayers on their
federal income tax return will be mailed to shareholders in January 1996.
27
ALLIANCE GLOBAL SMALL CAP FUND
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER
RUTH BLOCK (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
HENRY UGARTE (1)
OFFICERS
ALDEN M. STEWART, SENIOR VICE PRESIDENT-INVESTMENTS
RANDALL E. HAASE, VICE PRESIDENT
RONALD L. SIMCOE, VICE PRESIDENT
TIMOTHY D. RICE, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
28
ALLIANCE GLOBAL SMALL CAP FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.SM
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.
GSCAR
