ALLIANCE GLOBAL SMALL CAP FUND
SEMI-ANNUAL REPORT
JANUARY 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
March 8, 1996
Dear Shareholder:
It's been a period of strong gains in global financial markets, and Alliance
Global Small Cap Fund enjoyed solid returns in the six months since we last
reported. The following table shows how your Fund performed during its fiscal
half year ended January 31, 1996, and for comparison we've shown the
performance for the Morgan Stanley Capital International (MSCI) unmanaged
World Index (a measure of stock market performance in 23 countries) and for
the average of its Lipper universe of 25 global small company funds. This
peer group has generally similar investment objectives to Global Small Cap
Fund though investment policies for the various funds may differ.
Total Return
Periods Ended January 31, 1996
Six Months Twelve Months
---------- -------------
ALLIANCE GLOBAL SMALL CAP FUND
Class A +11.50% +33.03%
Class B +11.08% +32.05%
Class C +11.17% +32.29%
MSCI WORLD INDEX +7.50% +25.39%
LIPPER GSC FUNDS AVG. +1.98% +23.27%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
JANUARY 31; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
Our good performance relative to the benchmarks during the past year is largely
due to specific growth stock selection and the overweighting of the strong U.S.
market.
THE PERIOD IN REVIEW
Declining inflation and interest rates set the stage for strong performance in
1995 in the world's financial markets. The U.S. equity market, measured by the
S&P 500, led the advance by gaining 37.5% for the full calendar year. In our
view the source of strength was the combined effects of slow but steady
economic growth, mild inflation, advancing technology stocks, positive earnings
reports and an enhanced global competitive positioning resulting from the weak
U.S. dollar.
The strongest areas of the stock market were technology, which benefited from
very rapid industry growth; financial services, which benefited from the drop
in rates; and health care, which benefited from its non-cyclical earnings and
was not negatively affected by the economic slowdown. The industry also
continued its recovery from the health care bear market, which came to an end
when reform legislation failed.
The bull market in the U.S. has continued virtually uninterrupted since early
1995. Despite political uncertainty and declines in the last week of February,
the S&P 500 still managed to gain almost 4% in the first two months of 1996.
Both large and small cap stocks have performed well early in the year.
AREAS OF U.S. INVESTMENT
A significant portion of Global Small Cap Fund's U.S. portfolio continues to be
represented by the technology and retail-consumer products areas of the market.
With the overall market advance of the past several quarters, we've become more
valuation sensitive in both buy and sell decisions for the Fund. For example,
technology stocks were significantly reduced in July of last year-from about
28% of assets down to about 8%. U.S. financial services stocks were eliminated
during the period because we believe they had become fully valued. We still
think there are bargains in retail because it's such a broad industry. In
particular, apparel companies that can continue to grow their franchises and
expand their customer bases should produce very good results.
INTERNATIONAL INVESTMENTS
An emphasis on growth companies resulted in strong performance from the Fund's
European holdings. By year end, however, growth stocks had achieved
historically high valuations, while cyclical shares had fallen to low levels.
As a result we have modestly shifted from growth to quasi-cyclical shares while
retaining the Fund's positions in financial services issues.
Although Japanese technology holdings were significantly reduced during the
fourth quarter, the Japanese portion of the portfolio is still overweight in
the technol-
1
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
ogy and capital goods sectors. We are underweight the important banking sector
because of the likelihood of lending margin pressure as the Japanese economy
recovers. We are continuing to buy companies which are exposed to a recovery in
Japan's industrial base.
The emerging markets exposure has remained generally stock specific throughout
the year, and is concentrated in growth stocks.
OUTLOOK
In international markets, modest economic growth in the developed economies is
being accompanied by falling inflation. Central bankers are responding by
providing monetary stimulus and lowering interest rates. Foreign bond and
equity markets anticipate further interest rate reductions in the first half
of 1996.
Only Japan is employing both fiscal and monetary policy to boost economic
activity. Current evidence indicates that growth in industrial activity is
accelerating. By summer the strength and sustainability of the rebound should
become clear.
In Europe, fiscal stimulus can only be utilized to a limited extent because
countries are committed to the Maastricht criterion for limiting government
budget deficits. Slowing economic growth is being met by an increase in
corporate rationalization. While these measures are necessary, they cannot
disguise limited prospects for sales growth. Global economic recovery appears
to be key for continued strong performance by European equities.
Because of linkages in currency and capital flows, developing markets remain
beneficiaries of reductions in short-term U.S. interest rates. In most markets,
surges in economic growth must be controlled by local policy makers to avoid
flare-ups in inflation and interest rates. A number of attractive new issues
are expected to enter the market in 1996, but their entrance must coincide with
the availability of adequate market liquidity.
IN SUMMARY
We believe that foreign markets will begin to perform better on a relative
basis during 1996. However, we do not see significant downside risk for U.S.
equities. Domestic economic expansion hasn't produced excesses that require a
recession to correct. It may be difficult for U.S. companies to maintain the
strong profit growth seen in 1995, however, and we suspect that the stock
market will hit weakness at some point during the year as more realistic profit
forecasts are built into stock prices.
As always, we appreciate your investment in the Global Small Cap Fund and look
forward to reporting its progress to you in coming periods.
Sincerely,
John D. Carifa
Chairman and President
Alden M. Stewart
Senior Vice President
2
INVESTMENT RESULTS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
Alliance Global Small Cap Fund seeks long-term growth of capital. It invests
principally in a diversified global portfolio of the equity securities of small
capitalization companies.
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURN AS OF JANUARY 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +33.03% +27.32%
. Five Years +11.19% +10.24%
. Ten Years +8.69% +8.22%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +32.05% +28.05%
. Five Years +10.38% +10.38%
. Since Inception* +9.06% +9.06%
CLASS C SHARES
. One Year +32.29%
. Since Inception* +13.20%
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
TEN LARGEST HOLDINGS
JANUARY 31, 1996 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
OF NET
COMPANY COUNTRY U.S. $VALUE% ASSETS
- -------------------------------------------------------------------------------
Healthsouth Corp. United States $1,517,943 2.0%
Healthwise America, Inc. United States 1,181,250 1.6
Telephone and Data Systems, Inc. United States 1,084,687 1.4
Reading & Bates Corp. United States 1,052,300 1.4
Millicom International Cellular, S.A. United States 932,100 1.2
Nine West Group, Inc. United States 872,550 1.2
Industrie Natuzzi S.p.A. (ADR) Italy 853,125 1.1
Diamond Offshore Drilling, Inc. United States 846,375 1.1
Banco Latinoamericano
de Exportaciones, S.A. (ADR) Panama 839,475 1.1
SGL Carbon AG Germany 836,211 1.1
$10,016,016 13.2%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
SHARES OR PRINCIPAL
-------------------
HOLDINGS
PURCHASES COUNTRY BOUGHT 1/31/96
- -------------------------------------------------------------------------------
CMICFinance & Security Public Co. Thailand $159,200 $159,200
Diamond Offshore Drilling, Inc. United States 22,200 22,200
Healthsouth Corp. United States 47,068 47,068
Mitsubishi Heavy Industries Japan 90,000 90,000
Mitsubishi Trust and Bank Japan 8,000 8,000
Office Max, Inc. United States 33,700 33,700
Oxford Resources Corp. United States 18,600 18,600
Sierra On-Line, Inc. United States 12,600 12,600
USAIRGroup, Inc. United States 20,100 35,700
USAWaste Services, Inc. United States 30,700 32,800
HOLDINGS
SALES COUNTRY SOLD 1/31/96
- -------------------------------------------------------------------------------
20th Century Industries, Inc. United States 61,900 -0-
Aran Energy United Kingdom 350,000 -0-
Cephalon, Inc. United States 8,300 -0-
Community Health Systems, Inc. United States 16,800 -0-
Dionex Corp. United States 10,400 -0-
Global Marine, Inc. United States 61,300 68,400
Physician Reliance Network United States 16,600 -0-
PXRECorp. United States 19,400 -0-
Staples, Inc. United States 8,700 -0-
Sun Healthcare Group, Inc. United States 43,400 -0-
4
TEN LARGEST COUNTRY HOLDINGS
JANUARY 31, 1996 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COUNTRY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
United States $29,792,088 39.3%
Japan 13,054,178 17.3
United Kingdom 4,029,544 5.3
Netherlands 2,833,096 3.8
Germany 2,807,766 3.7
Australia 1,516,969 2.0
France 1,310,753 1.7
Sweden 1,238,124 1.6
Italy 1,235,571 1.6
Canada 1,072,890 1.4
$58,890,979 77.7%
TEN LARGEST INDUSTRY HOLDINGS
JANUARY 31, 1996 (UNAUDITED)
_______________________________________________________________________________
INDUSTRY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Drugs, Hospital Supplies,
Medical Services & Products $ 8,251,364 10.9%
Retail 4,033,485 5.3
Oil & Gas 3,430,197 4.5
Transportation & Shipping 3,406,879 4.5
Machinery 3,402,176 4.5
Computer Software & Services 3,201,849 4.2
Insurance 2,882,652 3.8
Communication Equipment 2,851,182 3.8
Financial Services 2,751,286 3.7
Utility-Telephone 2,505,348 3.3
$36,716,418 48.5%
5
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
COMMON STOCKS AND OTHER INVESTMENTS-91.7%
UNITED STATES INVESTMENTS-39.0%
CONSUMER PRODUCTS, SERVICES & STAPLES-14.4%
APPAREL-1.0%
Gucci Group N.V.* 8,900 $ 361,562
Nautica Enterprises, Inc.* 10,400 405,600
-----------
767,162
AUTO & RELATED-0.0%
Ek Chor China Motorcycle Co. 2,000 28,250
BROADCASTING & CABLE-1.1%
Cablevision Systems Corp. Cl.A* 3,900 219,375
Data Broadcasting* 5,607 65,181
Infinity Broadcasting Corp.* 13,000 516,750
-----------
801,306
DRUGS, HOSPITAL SUPPLIES, MEDICAL
SERVICES & PRODUCTS-8.0%
Apria Healthcare Group, Inc. 15,500 406,875
Centocor, Inc.* 10,800 369,900
Geltex Pharmaceuticals, Inc.* 20,300 380,625
Healthsouth Corp.* 47,068 1,517,943
Healthwise America, Inc.* 31,500 1,181,250
Laboratory Corp. of America Holdings
warrants, expiring 4/28/00* 1 1
Medimmune, Inc.* 10,000 182,500
National Surgery Centers, Inc.* 11,000 308,000
Neurex Corp.* 9,400 132,775
Pet Practice, Inc.* 29,500 272,875
Physio Control International Corp.* 37,800 774,900
Summit Technology, Inc.* 5,750 $195,500
Veterinary Centers America, Inc.* 22,900 352,087
-----------
6,075,231
ENTERTAINMENT & LEISURE TIME-0.3%
Heritage Media Corp.* 7,700 231,963
REAL ESTATE-0.2%
Summit Properties, Inc. 9,300 182,513
RESTAURANTS & LODGING-1.8%
Extended Stay America, Inc.* 5,600 173,600
HFS, Inc.* 8,400 697,200
Host Marriott Corp.* 30,800 354,200
Host Marriott Services Corp.* 3,840 24,480
International Pizza Corp.* 16,400 32,800
warrants, expiring 9/22/98* 16,400 8,712
Manhattan Bagel, Inc.* 2,200 34,650
-----------
1,325,642
RETAILING-2.0%
Bed Bath & Beyond, Inc.* 12,400 492,125
Jones Apparel Group, Inc.* 4,800 180,600
Nine West Group, Inc.* 25,200 872,550
-----------
1,545,275
-----------
10,957,342
TECHNOLOGY-8.9%
COMMUNICATION & EQUIPMENT-1.9%
Andrew Corp.* 6,800 299,200
Ascend Communications, Inc.* 4,400 171,050
CD Radio, Inc.* 11,200 40,600
Millicom International Cellular, S.A.* 23,900 932,100
-----------
1,442,950
6
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
COMMUNICATION SERVICES-0.4%
Vanguard Cellular Systems, Inc.* 13,700 $ 287,700
COMPUTER EQUIPMENT-0.6%
Western Digital Corp.* 13,500 249,750
Zebra Technologies Corp.* 8,100 251,100
-----------
500,850
COMPUTER PERIPHERALS-0.3%
Storage Technology Corp.* 7,500 198,750
COMPUTER SOFTWARE & SERVICES-2.8%
Cadence Design Systems, Inc.* 9,100 356,038
DST Systems, Inc.* 9,400 285,525
Exabyte Corp.* 22,700 306,450
Informix Corp.* 20,500 684,187
Intersolv, Inc.* 15,000 155,625
Sierra On-Line, Inc.* 12,600 313,425
-----------
2,101,250
ELECTRONICS-0.7%
BMC Industries, Inc. 12,200 260,775
Tellabs, Inc.* 6,300 277,200
-----------
537,975
TELEPHONE UTILITY-2.2%
Telephone and Data Systems, Inc. 26,700 1,084,687
United States Cellular Corp.* 16,800 569,100
-----------
1,653,787
-----------
6,723,262
BASIC INDUSTRIES-8.8%
BUSINESS SERVICES-0.9%
Oxford Resources Corp.* 18,600 462,675
Phymatrix Corp.* 8,000 172,000
-----------
634,675
CHEMICALS-0.3%
Cytec Industries, Inc.* 3,000 228,750
MACHINERY-0.4%
JLG Industries, Inc. 11,000 292,875
MINING & METALS-0.9%
Kaiser Aluminum Corp.* 11,700 162,338
Noble Drilling Corp.* 44,600 437,637
Pittston Co.* 5,450 108,319
-----------
708,294
OFFICE EQUIPMENT-1.0%
Office Max, Inc.* 33,700 775,100
POLLUTION CONTROL-1.4%
United Waste Systems, Inc.* 9,400 405,375
USA Waste Services, Inc.* 32,800 680,600
-----------
1,085,975
TRANSPORTATION & SHIPPING-3.9%
Alaska Air Group, Inc.* 27,800 549,050
America West Airlines, Inc.* 31,400 537,725
Pittston Services Group 10,900 272,500
USAIR Group, Inc.* 35,700 535,500
Wisconsin Central Transport Corp.* 5,400 405,000
Xtra Corp. 14,600 622,325
-----------
2,922,100
-----------
6,647,769
ENERGY-5.2%
DOMESTIC PRODUCERS-0.3%
Diamond Shamrock, Inc. 7,000 199,500
INTERNATIONAL PRODUCERS-0.0%
XCL, Ltd.* 110,000 34,375
OIL & GAS SERVICES-3.5%
Arethusa, Ltd. 19,600 646,800
Diamond Offshore Drilling, Inc.* 22,200 846,375
Global Marine, Inc.* 68,400 589,950
Rowan Cos., Inc.* 52,900 575,288
-----------
2,658,413
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
OTHER-1.4%
Reading & Bates Corp.* 61,900 $ 1,052,300
-----------
3,944,588
FINANCIAL SERVICES-1.7%
BANKS-0.3%
Roosevelt Financial Group, Inc. 11,000 191,125
INSURANCE-1.4%
20th Century Industries, Inc.* 32,000 584,000
Allmerica Financial Corp. 6,500 173,063
National Re Corp. 9,200 332,350
-----------
1,089,413
-----------
1,280,538
Total United States Investments
(cost $23,008,345) 29,553,499
FOREIGN INVESTMENTS-52.7%
AUSTRALIA-2.0%
AAPC, Ltd. 300,000 172,041
Hotels
Advance Bank Australia 30,000 261,414
Banking
Cochlear, Ltd.* 180,100 382,278
Medical Devices
Diamond Ventures, Ltd. 120,000 21,449
Mining & Metals
Fai Life, Ltd. 395,000 220,637
Insurance
Oil Search, Ltd. 200,000 193,640
Oil
Plutonic Resources 20,000 111,715
Metals & Mining
WMC, Ltd. 25,000 153,795
Metals & Mining
-----------
1,516,969
AUSTRIA-0.8%
Austria Mikro Systeme
International AG(a) 1,060 171,156
Semi-Conductors & Related
Benckiser-Wasser-Technik AG 1,500 169,111
Pollution Control
OMV AG 3,000 283,762
Oil - International
-----------
624,029
CANADA-1.4%
Accugraph Corp.* 17,000 39,584
Computer Software
Alumax, Inc.* 2,000 63,000
Metals & Mining
Cinar Films, Inc.* 11,000 156,750
Entertainment & Leisure
Istar Internet, Inc.*(a) 26,000 212,836
Computer Software & Services
Loewen Group, Inc. 9,500 267,187
Business Services
Nelvana, Ltd.*(a) 12,000 156,079
Entertainment & Leisure
Renaissance Energy, Ltd.* 4,000 99,687
Oil & Gas Exploration
Royal Plastics Group, Ltd.*(a) 5,000 77,767
Building & Related
-----------
1,072,890
CHILE-0.4%
Banco Osornoy La Un (ADR) 11,000 154,000
Banking - Regional
Empresas Telex Chile S.A. (ADR) 4,000 44,000
Communication Equipment
Enersis S.A. Sponsored (ADR) 3,000 82,500
Electric Utility
-----------
280,500
DENMARK-1.4%
Novo Nordisk AS 2,450 328,084
Drugs
8
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
Scandinavian Mobility Intl.(a) 18,400 $ 459,601
Medical Products
Tele Danmark AS 5,000 275,802
Telephone Utility
-----------
1,063,487
FINLAND-0.7%
Nokia AB OY Corp. pfd.(a) 12,000 467,197
Communication Equipment
OYTamro AB 15,000 70,080
Medical Services
-----------
537,277
FRANCE-1.7%
Business Objects S.A. (ADR) 8,100 372,600
Computer Software & Services
Casino Guichard Perrachon 7,000 225,771
Retail
Coflexip S.A. (ADR) 7,700 141,488
Oil & Gas Services
Credit Local de France 2,500 210,133
Banking
Ecco Travail Temporary 800 59,580
Temporary Help
Lafarge Coppee 2,200 148,321
Building Materials
Michelin 2,000 84,835
Tire & Rubber
Synthelabo 1,000 68,025
Drugs
-----------
1,310,753
GERMANY-3.7%
Adidas AG*(a)(b) 7,400 422,573
Apparel
Apcoa Parking AG(a) 2,000 155,862
Business Services
Bayer AG 500 149,479
Chemicals
Duerr Beteiliqunqs AG 600 203,158
Machinery
Fag Kugelfischer 300 43,735
Industrial Machinery
Fielmann AG pfd.(b) 9,000 498,824
Retail
Hach AG 50 19,046
Retail
Mannesmann AG 700 242,896
Machinery
Merck KG*(a) 2,500 101,444
Drugs
Rheinhold & Mahla AG 300 45,549
Building & Related
SGL Carbon AG(a)(b) 9,000 836,211
Specialty Chemical
Veba AG 2,000 88,989
Electric Utility
-----------
2,807,766
HONG KONG-1.0%
Amoy Properties 100,000 121,569
Real Estate
Fu Hui Jewelry Co., Ltd. 200,000 6,466
Jewelry & Watches
Hong Kong Land Holdings, Ltd. 70,000 158,900
Real Estate
Hong Kong Telecomm 20,000 38,023
Telephone Utility
HSBC Holdings Plc. 15,000 248,312
Banking
Paul Y.-ITC Construction Holdings, Inc.* 600,000 138,124
warrants, expiring 3/31/97* 60,000 1,847
warrants, expiring 3/31/98* 60,000 1,979
Engineering & Construction
-----------
715,220
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
INDIA-0.1%
Gujarat Narmada Valley Fertilizers Co.,
Ltd. (GDR)(a) 4,000 $ 21,956
Chemicals
Shriram Industrial Enterprises, Ltd. (GDR)(a) 15,000 52,500
warrants, expiring 4/28/96*(a) 5,000 25
Consumer Appliances
-----------
74,481
INDONESIA-0.2%
Indonesian Satellite Corp. (ADR) 4,000 162,000
Telecommunications
IRELAND-0.6%
Crean (James) Plc. 55,000 193,492
Multi-Industry
Fyffes 50,000 87,574
Food
Irish Continental Group 21,500 168,179
Transportation - Shipping
-----------
449,245
ITALY-1.6%
Fila Holding Sponsored (ADR) 5,000 242,500
Apparel
Industrie Natuzzi S.p.A. (ADR) 17,500 853,125
Furniture Products
Societa Italiana Per L'Eserreizio
Delle Telecommunicazioni, P.A. 40,000 67,959
Utility - Telephone
Telecom Italia Mob* 40,000 71,987
Telephone Utility
-----------
1,235,571
JAPAN-17.2%
Ado Electronic Industries 6,000 153,270
Retail - Electronics
Advan Co. 1,000 30,411
Building & Related
Alpine Electronics 10,000 165,622
Electronics
Asahi Bank 4,000 47,909
Banking - Regional
Asahi Diamond Industrial 12,000 166,183
Machinery
Asatsu, Inc. 4,000 160,943
Professional Services
Aval Data Corp. 5,000 86,554
Semi-Conductors & Related
Canon, Inc.(b) 18,000 340,226
Computer Peripherals
Chiyoda Co. 6,000 138,112
Retail - General
Credit Saison Co.(b) 9,000 211,378
Financial Services
Daibiru Corp. 1,000 11,977
Real Estate
Doshisha Co., Ltd.* 1,000 35,557
Retail
Eiden Sakakiya Co. 6,000 71,302
Retail
Fujitsu Electronics 2,000 21,521
Electronics
Hachijuni Bank 5,000 54,272
Banking - Regional
Hirose Electric Co. 2,500 136,849
Electronics
Hitachi Metals, Ltd. 12,000 141,480
Steel
Honda Motor Co.(b) 18,000 394,124
Automobiles
Hoya Corp. 6,000 196,500
Electronics
Isetan Co. 6,000 79,162
Retail
10
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
Ishihara Sangyo(b) 45,000 $ 153,691
Chemicals
Japan Industrial Land Development 3,000 120,427
Engineering & Construction
Kanamoto Co., Ltd. 2,000 24,516
Engineering & Construction
Kaneshita Construction 9,000 115,374
Engineering & Construction
Kawasaki Kisen(b) 55,000 192,991
Transportation
Keyence Corp.(b) 3,600 387,387
Machinery
Koa Fire & Marine 21,000 125,367
Insurance
Kurita Water Industries 1,000 25,919
Chemicals - Specialty
Kyoritsu Maintenance 1,000 27,978
Janitorial Services
Mabuchi Motor Co.(b) 5,000 311,594
Technology - Computer Peripherals
Matsushita Electrical Industrial Co., Ltd. 7,000 116,590
Consumer Appliances
Matsuyadenki Co., Ltd. 3,000 33,967
Retail - General
Minebea Co. 18,000 156,470
Machinery
Ministop Co. 2,000 54,646
Retail - Food
Mitsubishi Bank 6,000 130,252
Banking
Mitsubishi Estate 16,000 194,629
Real Estate
Mitsubishi Heavy Industries(b) 90,000 714,981
Industrial Machinery
Mitsubishi Trust and Bank 8,000 124,263
Banks
Mitsui Home Co. 3,000 46,879
Homebuilders
Namura Shipbuildng 12,000 69,056
Machinery
Nanno Construction 12,000 154,955
Building & Construction
NEC Corp.(b) 26,000 316,272
Electronics
New Oji Paper Co., Ltd. 15,000 137,129
Paper & Forest Products
Ngk Spark Plug Co. 10,000 117,900
Semi-Conductors & Related
Nichiei Co.(b) 4,000 280,715
Financial Services
Nichiha Corp. 4,000 86,086
Miscellaneous
Nikon Corp. 10,000 120,707
Semi-Conductors & Related
Nippon Electric Glass Co., Ltd. 10,000 183,400
Consumer Appliances
Nippon Kanzai Co. 1,000 32,563
Business Services
Nippon Paper Industries Co. 10,000 71,114
Paper
Nippon TV Network(b) 1,200 345,841
Broadcasting
Nissen Corp., Ltd. 3,300 71,021
Retail
NSK, Ltd. 7,000 51,090
Machinery
NTT Data Communications Systems 8 239,543
Computer Software & Services
Omron Corp. 9,000 198,746
Machinery
Oriental Construction 4,000 80,472
Building & Construction
Paris Miki, Inc.(b) 7,000 243,006
Retail - General
Penta Ocean Construction 18,000 131,038
Building & Construction
Promise Co., Ltd. 3,500 158,183
Financial Services
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
PS Corp. 7,000 $ 121,175
Building & Construction
Rohm Co., Ltd. 5,000 276,972
Semi-Conductors
Sankyo Co. 12,000 284,083
Drugs
Santen Pharmaceutical Co. 11,000 237,766
Drugs
Sanyo Shinpan Finance Co., Ltd. 2,500 188,781
Financial Services
Sato Corp. 4,000 96,940
Technology - Electronics
Sekisui Chemical Co. 14,000 188,640
Chemicals
Seven Eleven Japan 2,000 138,299
Retail - Food
Shimamura Co., Ltd. 1,800 67,035
Retail - General
Sho Bond Corp. 5,500 175,494
Building & Construction
Shohkoh Fund & Co. 1,000 180,593
Financial Services
SMC Corp.(b) 4,500 317,489
Industrial Machinery
Sumitomo Metal Industries 90,000 293,909
Steel
Taisho Pharmaceutical Co. 9,000 176,008
Drugs
TDK Corp. 3,000 149,621
Consumer Products & Services
Toda Corp. 10,000 91,232
Chemicals - Specialty
Toho Bank 5,000 37,429
Banking - Regional
Tokyo Broadcasting 12,000 197,623
Broadcasting
Tokyo Electron, Ltd. 6,000 222,326
Semi-Conductors & Related
Wesco, Inc.* 4,600 117,077
Engineering & Construction
Xebio Co. 2,000 68,307
Retail
Yamaichi Securities Co.(b) 35,000 270,188
Financial Services
Yamanashi Chuo Bank 5,000 46,786
Banking - Regional
Yamanouchi Pharmaceutical 7,000 153,270
Drugs
Yaskawa Electric Corp. 34,000 167,025
Machinery
-----------
13,054,178
MALAYSIA-0.7%
Austral Enterprise 9,333 17,349
Multi-Industry
C.I. Holdings Berhad 15,000 52,720
Building & Related
Highlands & Lowlands 10,000 14,996
Real Estate
Malaysian Assurance 13,500 69,063
Insurance
Metacorp Berhad 25,000 72,246
Engineering & Construction
Pacific & Orient 50,000 159,136
Insurance
Road Builder (M) Holdings BHD 30,000 111,298
Building & Construction
-----------
496,808
MEXICO-0.2%
Bufete Industrial S.A. (ADR)* 700 13,650
Engineering & Construction
Grupo Industrial Durango, S.A. (ADR)* 15,000 105,000
Paper & Forest Products
International de Ceramica* 34,915 49,375
Ceramic Tiles
-----------
168,025
NETHERLANDS-3.7%
Aegon N.V.(b) 18,000 737,908
Insurance
12
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
Amev N.V.(b) 4,000 $ 257,237
Insurance
BAM Groep N.V.(b) 1,800 103,027
Engineering & Construction
Content Beheer N.V.(b) 10,000 263,111
Temporary Help
Elsevier N.V.(b) 25,000 347,618
Printing & Publishing
IHC Caland N.V.(b) 8,000 284,327
Machinery
KLM Royal Dutch Airlines(b)9,000 276,176
Consumer Services - Airlines
Kon Ptt Nederland(b) 5,000 191,789
Telephone Utility
Nutricia Verenidge Bedrijuen(a)(b) 1,300 116,014
Food
Philips Electronic(b) 5,500 219,209
Appliances
Randstad Holdings N.V. 800 36,680
Temporary Help
-----------
2,833,096
NEW ZEALAND-0.8%
Air New Zealand 40,000 126,531
Airlines
Fisher & Paykel Industries 20,000 61,516
Consumer Appliances
Helicopter Line 50,000 99,273
Entertainment & Leisure
Lion Nathan, Ltd. 55,000 129,190
Food & Beverages
Warehouse Group 62,500 166,577
Retail
-----------
583,087
NORWAY-1.3%
Fokus Bank 6,000 34,322
Banks
Merkantildata 18,000 149,066
Computer Software
Tomra Systems AS 75,000 690,121
Pollution Control
Western Bulk Shipping AS(a) 26,000 123,608
Shipping
-----------
997,117
PANAMA-1.1%
Banco Latinoamericano de Exportaciones,
S.A. (ADR) 18,200 839,475
Finance
PERU-0.1%
Banco Wiese Sponsored (ADR) 15,000 105,000
Banking - Regional
PORTUGAL-0.1%
TVI Televisao Independente*(c) 7,800 31,290
Broadcasting & Cable
SINGAPORE-0.1%
Lim Kah Ngam, Ltd. 30,000 33,815
Multi - Industry
SOUTH KOREA-0.8%
Samsung Electronics Co., Ltd. (ADR)(GDS)*(a) 8,637 490,124
(GDR) bonus shares*(a)(c) 596 58,830
Electronics
Yukong, Ltd. (ADR)*(a) 5,912 53,208
Energy International Produce
-----------
602,162
SPAIN-1.4%
Banco Popular Esp 1,200 214,679
Banking
Centros Commerciales Continente, S.A.* 8,000 149,813
Retail
Construcciones Y Aux de Ferr2,000 68,213
Railroad Transportation
Corporacion Mapfre* 4,000 221,850
Insurance rights, expiring 2/22/96 4,000 2,040
Insurance
13
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
Fomento de Construcciones Y Contratas, S.A. 1,000 $ 82,875
Building & Construction
Hidroel Cantabrico 2,000 66,220
Utility - Electric
Repsol S.A. 5,000 173,719
Energy
Viscofan Envolturas Celulosi6,000 64,547
Food
-----------
1,043,956
SWEDEN-1.6%
Autoliv AB 2,500 120,898
Auto & Related
Autoliv AB Sponsored (ADR)(a) 3,900 188,614
Auto & Related
Hoganas AB Cl.B(a) 2,000 50,662
Mining & Metals
Kalmar Industries AB(a) 16,000 257,916
Machinery
Nordbanken AB*(a) 6,000 101,900
Banks
SKF AB 25,000 465,961
Machinery
SSAB (Svenskt Stal Aktiebolag) Series B 5,000 52,173
Mining & Metals
-----------
1,238,124
SWITZERLAND-1.0%
BBC Brown Boveri AG 300 345,212
Miscellaneous
Roche Holdings AG, Ltd. 60 438,505
Drugs
-----------
783,717
TAIWAN-0.2%
The Taiwan Fund, Inc. 7,300 146,000
Mutual Fund
THAILAND-1.4%
CMIC Finance & Security Public Co. 159,200 621,973
Financial Services
Nawarat Pattanakar* 20,000 $83,662
Engineering & Construction
Total Access Communication*40,000 312,000
Communication Services
-----------
1,017,635
TURKEY-0.1%
Netas Telekomunik Ord. Cl.B*(a) 215,600 78,861
Communication Equipment
UNITED KINGDOM-5.3%
Asda Group Plc. 40,000 63,868
Retailing
Automated Security Holdings Plc. 120,008 47,112
Consumer Products & Services
Barclays Plc. 14,000 167,628
Banks
British Airways Plc. 20,000 160,048
Airlines
Caird Group Plc. 900,000 20,383
Pollution Control
Carlton Communications Plc. 8,000 125,140
Broadcasting
Filtronic Comtec Plc. 100,000 623,584
Communication Equipment
Grand Metropolitan Plc. 10,000 67,190
Restaurants & Lodging
M.S. International Plc. 500,000 211,385
Machinery
McBride*(a) 30,000 66,133
Household Products
Mid-States Plc. 300,000 203,835
Auto & Related
Mirror Group Plc 25,000 70,776
Newspapers
Misys Plc. 10,000 86,970
Computer Software & Services
14
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
Morrison (William) Supermarkets Plc. 90,000 $ 210,630
Retail - Food
Mowlem (John) & Co. Plc. 580,000 542,956
Engineering & Construction
Powerscreen International Plc. 44,000 253,118
Recycling Equipment
Rank Organisation 10,000 69,379
Entertainment & Leisure
Resort Hotels Plc.*(c) 1,000,000 -0-
Restaurants & Lodging
Siebe Plc. 15,000 179,488
Machinery
Tate & Lyle Plc. 20,000 142,534
Food & Beverages
Tomkins 35,000 145,591
Household Products
WPP Group 70,000 182,848
Advertising
Zeneca Group Plc. 20,000 388,948
Drugs
-----------
4,029,544
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ------------------------------------------------------------------------
Total Foreign Investments
(cost $37,392,022) $39,932,078
Total Common Stocks and Other Investments
(cost $60,400,367) 69,485,577
CORPORATE BONDS-0.3%
COMMUNICATION & EQUIPMENT-0.3%
Intelcom Group, Inc.
8.00%, 9/17/98 (a)(c)
(cost $274,579) $ 278 238,589
COMMERCIAL PAPER-5.7%
Merrill Lynch & Co., Inc.
5.45%, 2/12/96
(amortized cost $4,292,839) 4,300 4,292,839
TOTAL INVESTMENTS-97.7%
(cost $64,967,785) 74,017,005
Other assets less liabilities-2.3% 1,747,454
NET ASSETS-100% $75,764,459
* Non-income producing security.
(a) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At January 31, 1996, these
securities amounted to $4,959,666 representing 6.5% of net assets.
(b) Securities with an aggregate market value of $9,033,907, segregated to
collateralized forward exchange currently 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.
15
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $64,967,785) $74,017,005
Cash, at value (cost $1,771,288) 1,766,027
Receivable for investment securities sold 1,481,527
Unrealized appreciation of forward exchange currency contracts 173,252
Receivable for capital stock sold 71,515
Dividends and interest receivable 32,000
Foreign taxes receivable 9,927
Total assets 77,551,253
LIABILITIES
Payable for investment securities purchased 869,748
Unclaimed dividends 634,139
Advisory fee payable 61,598
Payable for capital stock repurchased 33,678
Distribution fee payable 24,244
Accrued expenses 163,387
Total liabilities 1,786,794
NET ASSETS $75,764,459
COMPOSITION OF NET ASSETS
Capital stock, at par $ 69,220
Additional paid-in capital 65,587,215
Accumulated net investment loss (577,657)
Accumulated net realized gain on investments and foreign
currency transactions 1,469,540
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 9,216,141
$75,764,459
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($65,266,864/
5,922,690 shares of capital stock issued and outstanding) $11.02
Sales charge-4.25% of public offering price .49
Maximum offering price $11.51
CLASS B SHARES
Net asset value and offering price per share($7,820,902/
744,790 shares of capital stock issued and outstanding) $10.50
CLASS C SHARES
Net asset value, redemption and offering price per share($2,676,693
/254,536 shares of capital stock issued and outstanding) $10.52
See notes to financial statements.
16
STATEMENT OF OPERATIONS
JANUARY 31, 1996 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $20,406) $193,301
Interest 159,585 $ 352,886
EXPENSES
Management fee 347,954
Distribution fee - Class A 92,635
Distribution fee - Class B 31,351
Distribution fee - Class C 7,820
Custodian 115,378
Transfer agency 102,225
Administrative 75,713
Audit and legal 52,293
Registration 46,183
Printing 32,039
Directors' fees 17,210
Miscellaneous 9,742
Total expenses 930,543
Net investment loss (577,657)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investments 5,101,196
Net realized gain on foreign currency transactions 616,193
Net change in unrealized appreciation of investments 2,196,015
Net change in unrealized depreciation of foreign
currency denominated assets and liabilities 316,658
Net gain on investments and foreign currency 8,230,062
NET INCREASE IN NET ASSETS FROM OPERATIONS $7,652,405
See notes to financial statements.
17
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JANUARY 31,1996 JULY 31,
(UNAUDITED) 1995
--------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $(577,657) $ (794,248)
Net realized gain on investments and foreign
currency transactions 5,717,389 7,789,167
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities 2,512,673 2,436,403
Net increase in net assets from operations 7,652,405 9,431,322
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (2,964,670) (10,605,411)
Class B (331,138) (885,298)
Class C (74,101) (257,942)
Tax return of capital
Class A -0- (679,545)
Class B -0- (56,726)
Class C -0- (16,528)
CAPITAL STOCK TRANSACTIONS
Net increase 4,854,044 3,106,523
Total increase 9,136,540 36,395
NET ASSETS
Beginning of period 66,627,919 66,591,524
End of period $75,764,459 $66,627,919
See notes to financial statements.
18
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED) 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 January 31, 1996.
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 gain on foreign currency transactions of $616,193 represents net
foreign exchange gains 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 and are determined in accordance with income tax regulations.
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.
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
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. No reimbursement was
required for the six months ended January 31, 1996. Pursuant to the management
agreement, the Fund paid $75,713 to the Manager representing the cost of
certain legal and accounting services provided to the Fund by the Manager for
the six months ended January 31, 1996.
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 $75,873 for the six months ended January 31, 1996.
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 $2,338 from the sale of Class A shares and $9,851 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the six months ended January 31, 1996.
Brokerage commissions paid on securities transactions for the six months ended
January 31, 1996 amounted to $208,668, 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 $1,070,742, and $369,793 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.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $45,804,587 and $44,362,231, respectively, for the six months ended
January 31, 1996. There were no purchases or sales of U.S. Government and
government agency obligations for the six months ended January 31, 1996.
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.
20
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
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. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
At January 31, 1996, the Fund had outstanding forward exchange currency
contracts, both to purchase and sell foreign currencies against the U.S.
dollar, as follows:
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
------- ---------- ---------- -------------
FOREIGN CURRENCY BUY CONTRACTS
Japanese Yen,
expiring 3/13/96 150,670 $1,498,012 $1,418,025 $(79,987)
FOREIGN CURRENCY SALE CONTRACTS
Deutsche Mark,
expiring 5/20/96 2,500 1,725,328 1,689,411 35,917
Japanese Yen,
expiring 3/13/96-5/8/96 301,000 2,994,392 2,838,689 155,703
Netherland Guilder,
expiring 5/20/96 4,400 2,716,552 2,654,933 61,619
---------
$173,252
At January 31, 1996, the cost of investments for federal income tax purposes
was $65,214,580. Accordingly, gross unrealized appreciation of investments was
$13,274,295 and gross unrealized depreciation of investments was $4,471,870,
resulting in net unrealized appreciation of $8,802,425.
NOTE E: ILLIQUID SECURITIES
DATE ACQUIRED COST
------------- ----------
Intelcom Group, Inc. 8.00%, 9/17/98 9/16/93 $ 274,579
Resort Hotels Plc. 5/01/92 719,086
TVI Televisao Independente 10/24/94 56,543
----------
$1,050,208
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 January 31, 1996 was $269,879, representing 0.4% of net
assets.
21
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
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
----------------------------- ------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
JAN. 31,1996 YEAR ENDED JAN. 31,1996 YEAR ENDED
(UNAUDITED) JULY 31,1995 (UNAUDITED) JULY 31,1995
----------- ------------ ------------- -------------
CLASS A
Shares sold 285,371 391,760 $3,073,750 $ 3,971,546
Shares issued in
reinvestment of
distributions 214,025 952,163 2,238,697 8,217,164
Shares redeemed (364,056) (1,095,655) (3,904,907) (10,827,369)
Net increase 135,340 248,268 $1,407,540 $ 1,361,341
CLASS B
Shares sold 329,180 287,247 $3,347,100 $ 2,886,684
Shares issued in
reinvestment of
distributions 21,595 75,995 215,523 631,516
Shares redeemed (125,185) (204,792) (1,271,857) (1,961,914)
Net increase 225,590 158,450 $2,290,766 $ 1,556,286
CLASS C
Shares sold 175,426 136,839 $1,789,497 $ 1,295,724
Shares issued in
reinvestment of
distributions 4,299 15,861 42,946 131,935
Shares redeemed (66,466) (134,697) (676,705) (1,238,763)
Net increase 113,259 18,003 $1,155,738 $ 188,896
22
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------
SIX MONTHS OCTOBER 1,
ENDED 1993
JANUARY 31, YEAR ENDED TO YEAR ENDED SEPTEMBER 30,
1996 JULY 31, JULY 31, --------------------------------
(UNAUDITED) 1995 1994* 1993 1992 1991
------------ ----------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.38 $11.08 $11.24 $9.33 $10.55 $8.26
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.09)(f) (.09) (.15) (.15) (.16) (.06)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.26 1.50 (.01) 2.49 (1.03) 2.35
Net increase (decrease) in net asset
value from operations 1.17 1.41 (.16) 2.34 (1.19) 2.29
LESS: DISTRIBUTIONS
Distributions from net realized gains (.53) (1.99) -0- (.43) (.03) -0-
Tax return of capital -0- (.12) -0- -0- -0- -0-
Net asset value, end of period $11.02 $10.38 $11.08 $11.24 $9.33 $10.55
TOTAL RETURN
Total investment return based on net
asset value (b) 11.50% 16.62% (1.42)% 25.83% (11.30)% 27.72%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $65,267 $60,057 $61,372 $65,713 $58,491 $84,370
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.59%(d) 2.54%(c) 2.42%(d) 2.53% 2.34% 2.29%
Net investment loss (1.60)%(d) (1.17)% (1.26)%(d) (1.13)% (.85)% (.55)%
Portfolio turnover rate 68% 128% 78% 97% 108% 104%
</TABLE>
See footnote summary on page 25.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
SIX MONTHS OCTOBER 1,
ENDED 1993
JANUARY 31, YEAR ENDED TO YEAR ENDED SEPTEMBER 30,
1996 JULY 31, JULY 31, --------------------------------
(UNAUDITED) 1995 1994* 1993 1992 1991
------------ ----------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.95 $10.78 $11.00 $9.20 $10.49 $8.26
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.12)(f) (.12) (.17)(a) (.15) (.20) (.07)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.20 1.40 (.05) 2.38 (1.06) 2.30
Net increase (decrease) in net asset
value from operations 1.08 1.28 (.22) 2.23 (1.26) 2.23
LESS: DISTRIBUTIONS
Distributions from net realized gains (.53) (1.99) -0- (.43) (.03) -0-
Tax return of capital -0- (.12) -0- -0- -0- -0-
Net asset value, end of period $10.50 $9.95 $10.78 $11.00 $9.20 $10.49
TOTAL RETURN
Total investment return based on net
asset value (b) 11.08% 15.77% (2.00)% 24.97% (12.03)% 27.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $7,821 $5,164 $3,889 $1,150 $819 $121
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.31%(d) 3.20%(c) 3.15%(d) 3.26% 3.11% 2.98%
Net investment loss (2.36)%(d) (1.92)% (1.93)%(d) (1.85)% (1.31)% (1.39)%
Portfolio turnover rate 68% 128% 78% 97% 108% 104%
</TABLE>
See footnote summary on page 25.
24
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------
SIX MONTHS OCTOBER 1, MAY 3,
ENDED 1993 1993(E)
JANUARY 31, YEAR ENDED TO TO
1996 JULY 31, JULY 31, SEPTEMBER 30,
(UNAUDITED) 1995 1994* 1993
------------ ---------- ------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.96 $10.79 $11.00 $ 9.86
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.11)(f) (.17) (.17)(a) (.05)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.20 1.45 (.04) 1.19
Net increase (decrease) in net asset
value from operations 1.09 1.28 (.21) 1.14
LESS: DISTRIBUTIONS
Distributions from net realized gains (.53) (1.99) -0- -0-
Tax return of capital -0- (.12) -0- -0-
Net asset value, end of period $10.52 $ 9.96 $10.79 $11.00
TOTAL RETURN
Total investment return based on net
asset value (b) 11.17% 15.75% (1.91)% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,677 $1,407 $1,330 $261
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.30%(d) 3.25%(c) 3.13%(d) 3.75%(d)
Net investment loss (2.37)%(d) (2.10)% (1.92)%(d) (2.51)%(d)
Portfolio turnover rate 68% 128% 78% 97%
</TABLE>
* 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) Commencement of distribution.
(f) Based on average shares outstanding.
25
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
DAVID H. DIEVLER (1)
RUTH BLOCK (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (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.
26
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
27
ALLIANCE GLOBAL SMALL CAP FUND, INC.
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS 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.
GSCSR
