ALLIANCE GLOBAL SMALL CAP FUND
ANNUAL REPORT
JULY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
September 2, 1997
Dear Shareholder:
Your Fund outpaced the Lipper Global Small Company Funds' Average for the
fiscal year ended July 31, 1997. This was largely due to the Fund's emphasis on
growth stocks, which performed well in a global environment of low inflation,
stable prices, and low interest rates. For the period under review, your Fund's
performance trailed that of the Morgan Stanley Capital International (MSCI)
World Index due to the significant outperformance of large capitalization
stocks (the primary components of the MSCI World Index.)
INVESTMENT RETURNS*
TOTAL RETURN FOR THE PERIODS
ENDED JULY 31, 1997
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE GLOBAL SMALL CAP FUND
Class A 11.04% 26.47%
Class B 10.67 25.42
Class C 10.65 25.37
MSCI WORLD INDEX 19.51 33.16
LIPPER GLOBAL SMALL COMPANY
FUNDS AVERAGE 9.36 18.79
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS
OF 7/31/97. THE TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO
DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. RETURNS FOR THE FUND AND ITS
COMPARATIVE INDICES INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING
THE PERIOD. FOR ADDITIONAL PERFORMANCE INFORMATION, PLEASE SEE PAGE 3.
THE MSCI WORLD INDEX IS AN UNMANAGED, MARKET-CAPITALIZATION WEIGHTED INDEX
THAT MEASURES THE PERFORMANCE OF STOCK MARKETS IN 23 COUNTRIES. THE LIPPER
GLOBAL SMALL COMPANY FUNDS AVERAGE REFLECTS PERFORMANCE OF 32 FUNDS WHICH HAVE
INVESTMENT OBJECTIVES SIMILAR TO THAT OF THE ALLIANCE GLOBAL SMALL CAP FUND.
AREAS OF INVESTMENT: U.S. MARKET
We have added recently to your Fund's healthcare holdings, focusing
specifically on biotechnology companies with products either approved by the
FDA or nearing the end of the approval process. Therefore, many of the risk
hurdles that these companies typically face are already behind them. We
currently hold positions in Geltex Pharmaceuticals, Centocor, Medimmune, and
Neurex.
The retail and apparel sectors continue to present attractive growth stocks
with very low price/earning ratio multiples. We believe that the strong trend
favoring casual wear will continue to benefit Nautica Enterprises, Tommy
Hilfiger and Timerberland.
The changing landscape within the automobile retail sector is likely to benefit
Circuit City's CarMax as the superstore format further penetrates the
automobile market. On a related note, we believe Budget Group will benefit as
the automobile rental market continues to see higher prices, lower capacity,
and better inventory management.
On the cyclical side, offshore drillers are now in the third year of
profitability. While we have used this as an opportunity to lock in profits
through selected sales, we still hold Rowan Companies and Parker Drilling in
the portfolio. A related theme with a similar demand/supply potential imbalance
is the oil tanker industry. The Fund owns holdings in both OMI and
Knightsbridge Tankers.
The airline industry illustrates another cyclical sector that is experiencing
growth characteristics, and we have positioned the Fund to take advantage of
this through stakes in Continental Airlines and Alaska Air Group. Airline
carriers are flying with all-time record load factors. We believe that the
industry is in the third year of a positive, multi-year cycle, which began in
1995, the first year the airline industry was profitable since 1989. Airlines
are using their cash flow to pay down debt and restructure their balance
sheets. As demand outpaces capacity growth, pricing power is increasing. This
contrasts sharply with past cycles when airlines used profits to buy more
planes and increase capacity in order to maximize revenue growth, eroding their
pricing power in the process.
INTERNATIONAL INVESTMENTS
The Funds' traditional emphasis on growth companies resulted in strong
performance from our European holdings. Pharmaceutical, publishing, and
insurance stocks make up the largest components of our core growth portfolio.
We continue to sell some long-term holdings which have reached lofty valuations
in order to invest in cyclical companies and conglomerates whose managements
are promising to significantly improve returns for shareholders.
1
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
The portfolio maintained an underweight position in Japan during the period,
but the Fund's Japanese exposure still slowed overall performance. While the
Fund's Japanese pharmaceutical, technology, and consumer finance stocks
performed well for us, most small capitalization issues suffered over concerns
about an economic slowdown. We continue to sell Japanese cyclical shares in
favor of core growth stocks and globally competitive exporters.
In developing markets, Mexican consumer shares, Brazilian utilities, and Hong
Kong/Chinese property stocks and conglomerates were our best performers. Aside
from India and Hong Kong, we continue to underweight southeast Asia, where
economic growth rates are slowing sharply. We are selectively buying emerging
market companies which we believe will produce significant positive earnings
surprises for the foreseeable future.
MARKET OUTLOOK
Steady, moderate economic growth in most developed economies is expected for
the remainder of 1997. Sturdy economic conditions in the U.K. and the U.S.
appear to be gaining momentum. Continental Europe is strengthening with the aid
of weaker currencies from a very subdued base. The Japanese economy appears to
be slowing sharply, but is expected to continue modest positive growth. Pricing
power is being constrained in most product and service categories due to strong
global competition.
Our outlook for U.S. equities remains positive. However, an increase in
interest rates would put some pressure on price/earnings ratios, which means
that stocks with higher P/Es could become vulnerable. As a result, we continue
to focus on the underlying earnings of each company, working to avoid the risk
of unsustainable valuations.
While U.K. economic and earnings growth are now self sustaining, continental
Europe remains heavily dependent on competitive currencies. Continental bond
markets are underpinned by expectations of low inflation during formation of
the European Monetary Union. Central banks are allowing their currencies to
devalue versus the dollar in order to aid exports. Corporate managements are
aggressively pursuing corporate restructuring, which boosts earnings prospects
for their companies.
Japanese consumers hold the key to their economy. Monetary stimulus has
stabilized at a high level while fiscal stimulus is being aggressively
withdrawn from the economy. Because exports are already strong, domestic
capital spending and consumer reaction to this year's personal tax increases
will tell the tale.
Outside of Asia, developing markets continue to offer potential upside growth
surprises. We believe that growth in India, Eastern Europe, and Mexico is
likely to accelerate through year end. While we anticipate ongoing opportunity
in developing markets' shares, we also expect the normal volatility associated
with investment in these markets.
IN SUMMARY
Though we are concerned by the historically high valuations being accorded
growth stocks, we continue to believe we can identify attractive investment
ideas around the globe.
As always we appreciate your investment in the Alliance 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
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES 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 equity securities issued by
small capitalization companies.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JULY 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +26.47% +21.04%
. Five Years +15.16% +14.16%
. Ten Years +7.81% +7.34%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +25.42% +21.42%
. Five Years +14.34% +14.34%
. Since Inception* +11.40% +11.40%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +25.37% +24.37%
. Since Inception* +15.64% +15.64%
The average annual total returns reflect reinvestment 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);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
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
7/31/87 TO 7/31/97
$28,000
$25,000
$22,000
$19,000
$16,000
$13,000
$10,000
$7,000
MSCI WORLD INDEX: $26,333
LIPPER GLOBAL SMALL COMPANY AVERAGE: $24,717
GLOBAL SMALL CAP FUND
CLASS A SHARES: $20,305
7/31/87 7/31/88 7/31/89 7/31/90 7/31/91 7/31/92
7/31/93 7/31/94 7/31/95 7/31/96 7/31/97
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Global Small Cap Fund Class A shares (from 7/31/87 to 7/31/97) as
compared to the performance of appropriate broad-based indices. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B, Class C and Advisor Class shares will
vary from the results shown above due to differences in expenses charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged,
market capitalization-weighted index that measures the performance of stock
markets in 23 countries.
The Lipper Global Small Company Funds Average reflects performance of 32 funds,
2 of which have been in existence for the full ten-year period. These funds
have generally similar investment objectives to Alliance Global SmallCap Fund,
although the investment policies of some funds included in the average may
differ.
When comparing Alliance Global Small Cap Fund to the index and average shown
above, you should note that no charges or expenses are reflected in the
performance of the index. Lipper results include fees and expenses.
Global Small Cap Fund
Lipper Global Small Company Average
MSCIWorld Index
4
TEN LARGEST HOLDINGS
JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY COUNTRY U.S.$ VALUE %OF NET ASSETS
- -------------------------------------------------------------------------------
Mohawk Industries, Inc. United States $ 2,392,950 1.9%
Parker Drilling Co. United States 2,144,862 1.7
Omi Corp. United States 1,923,512 1.5
Budget Group, Inc. United States 1,821,875 1.4
Consolidated Freightways Corp. United States 1,649,362 1.3
Industrie Natuzzi S.p.A. (ADR) Italy 1,402,931 1.1
Geltex Pharmaceuticals, Inc. United States 1,377,350 1.1
Rowan Cos., Inc. United States 1,357,738 1.1
Bethlehem Steel Corp. United States 1,321,875 1.1
Centocor, Inc. United States 1,320,550 1.0
$16,713,005 13.2%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JULY 31, 1997
_______________________________________________________________________________
SHARES
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES COUNTRY BOUGHT 7/31/97
- -------------------------------------------------------------------------------
AT Entertainment, Inc. United States 36,000 36,000
Bethlehem Steel Corp. United States 117,500 117,500
Circuit City Stores, Inc. United States 69,000 69,000
Cognos, Inc. United States 27,300 27,300
Consolidated Freightways Corp. United States 108,600 108,600
Knightsbridge Tankers, Ltd. United States 38,900 38,900
Mohawk Industries, Inc. United States 42,700 90,300
Nautica Enterprises, Inc. United States 40,900 40,900
Southern Union Co. United States 37,700 37,700
Stride Rite Corp. United States 54,300 54,300
HOLDINGS
SALES COUNTRY SOLD 7/31/97
- -------------------------------------------------------------------------------
AK Steel Holding Corp. United States 23,500 -0-
Budget Group, Inc. United States 15,800 58,300
Hexcel Corp. United States 46,900 -0-
International Specialty
Products, Inc. United States 71,200 -0-
Jones Apparel Group, Inc. United States 16,900 -0-
Nine West Group, Inc. United States 16,400 20,600
Taubman Centers, Inc. United States 67,400 -0-
TeleSpectrum Worldwide, Inc. United States 64,300 -0-
Ugly Duckling Corp. United States 32,100 -0-
Ultramar Diamond Shamrock United States 29,754 -0-
5
TEN LARGEST COUNTRY HOLDINGS
JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COUNTRY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
United States $ 57,826,067 45.8%
Japan 16,129,128 12.8
United Kingdom 7,334,933 5.8
France 3,403,795 2.7
Netherlands 2,729,224 2.2
Australia 2,488,558 2.0
Spain 2,246,017 1.8
Italy 2,152,650 1.7
Germany 1,945,741 1.5
Sweden 1,921,510 1.5
$98,177,623 77.8%
INDUSTRY DIVERSIFICATION
JULY 31, 1997
U.S. $ VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Aerospace & Defense $ 143,515 0.1%
Basic Industries 8,087,051 6.4
Capital Goods 7,217,709 5.7
Consumer Manufacturing 11,036,379 8.7
Consumer Services 24,238,465 19.2
Consumer Staples 5,530,247 4.4
Energy 12,704,256 10.1
Finance 8,860,210 7.0
Healthcare 9,965,805 7.9
Multi Industry 6,254,682 5.0
Technology 13,319,607 10.6
Transportation 4,809,254 3.8
Utilities 4,847,822 3.8
Total Investments* 117,015,002 92.7
Cash and receivables, net of liabilities 9,199,521 7.3
Net Assets $126,214,523 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-92.7%
UNITED STATES INVESTMENTS-45.8%
CONSUMER SERVICES-12.0%
ADVERTISING-0.1%
Precision Response Corp. (a) 5,300 $ 60,287
AIRLINES-1.9%
Alaska Air Group, Inc. (a) 37,700 1,114,506
Continental Airlines, Inc. (a) 34,000 1,266,500
------------
2,381,006
APPAREL-1.6%
Mossimo, Inc. (a) 1,900 14,487
Nautica Enterprises, Inc. (a) 40,900 1,124,750
Tommy Hilfiger Corp. (a) 18,300 815,494
------------
1,954,731
BROADCASTING & CABLE-2.1%
Evergreen Media Corp. (a) 19,700 906,200
Jacor Communications, Inc. (a) 8,700 373,013
Sinclair Broadcast Group, Inc. (a) 18,500 642,875
Telephone and Data Systems, Inc. 18,100 694,587
------------
2,616,675
ENTERTAINMENT & LEISURE-0.6%
AT Entertainment, Inc. (a) 36,000 756,000
RESTAURANTS & LODGING-1.4%
Extended Stay America, Inc. (a) 25,511 411,365
Florida Panthers Holdings, Inc. (a) 21,600 463,050
Interstate Hotels Co. (a) 12,300 351,319
QPQ Corp. (a) 16,400 2,563
warrants, expiring 9/22/98 (a) 16,400 -0-
Suburban Lodges of America, Inc. (a) 27,500 567,187
------------
1,795,484
RETAIL-GENERAL MERCHANDISE-3.0%
Abercrombie & Fitch Co. (a) 24,400 484,950
Circuit City CarMax Group (a) 69,000 978,937
Furniture Brands International, Inc. (a) 29,200 600,425
Nine West Group, Inc. (a) 20,600 825,288
Stride Rite Corp. 54,300 736,444
Timberland Co. (a) 3,400 219,725
------------
3,845,769
TRAVEL SERVICES-0.2%
Galileo International, Inc. 9,900 259,875
MISCELLANEOUS-1.1%
Equity Corp. International (a) 19,300 464,406
International Alliance Services, Inc. (a) 56,800 497,000
warrants, expiring 12/31/00 (a) 61,100 76,009
TeleTech Holdings, Inc. (a) 19,000 380,000
------------
1,417,415
------------
15,087,242
ENERGY-8.9%
DOMESTIC PRODUCERS-1.0%
Valero Energy Corp. 30,200 1,298,600
OIL SERVICE-6.0%
Friede Goldman International, Inc. (a) 14,800 425,500
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Knightsbridge Tankers, Ltd. 38,900 $ 1,074,613
Noble Drilling Corp. (a) 23,200 651,050
OMI Corp. (a) 172,900 1,923,512
Parker Drilling Co. (a) 164,200 2,144,862
Rowan Cos., Inc. (a) 41,300 1,357,738
------------
7,577,275
PIPELINES-0.7%
Southern Union Co. 37,700 871,812
MISCELLANEOUS-1.2%
Costilla Energy, Inc. (a) 39,200 534,100
KCS Energy, Inc. 14,000 304,500
Superior Services, Inc. (a) 23,500 616,875
------------
1,455,475
------------
11,203,162
TECHNOLOGY-5.0%
COMMUNICATION EQUIPMENT-0.8%
CHS Electronics, Inc. (a) 12,100 462,069
Comverse Technology, Inc. (a) 11,400 555,750
------------
1,017,819
COMPUTER HARDWARE-0.0%
Radius, Inc. (a) 151 64
COMPUTER PERIPHERALS-0.2%
Read-Rite Corp. (a) 12,500 323,438
COMPUTER SERVICES-1.3%
Cognos, Inc. (a) 27,300 824,119
DBT Online, Inc. (a) 10,100 503,737
Renaissance Solutions, Inc. (a) 8,000 318,000
------------
1,645,856
COMPUTER SOFTWARE-0.5%
Rational Software Corp. (a) 34,500 664,125
NETWORKING SOFTWARE-0.5%
FORE Systems, Inc. (a) 39,000 626,437
SEMI-CONDUCTOR CAPITAL EQUIPMENT-0.4%
CFM Technologies, Inc. (a) 18,400 478,400
SEMI-CONDUCTOR COMPONENTS-0.7%
PMC-Sierra, Inc. (a) 27,300 894,075
MISCELLANEOUS-0.6%
Hadco Corp. (a) 5,400 356,062
Harman International Industries, Inc. 9,000 357,750
------------
713,812
------------
6,364,026
HEALTH CARE-5.0%
BIOTECHNOLOGY-3.3%
BioReliance Corp. (a) 1,700 30,388
Centocor, Inc. (a) 34,300 1,320,550
Geltex Pharmaceuticals, Inc. (a) 65,200 1,377,350
Medimmune, Inc. (a) 39,500 938,125
Neurex Corp. (a) 35,500 443,750
------------
4,110,163
DRUGS-0.0%
Viro Pharmaceuticals, Inc. (a) 3,200 48,000
MEDICAL SERVICES-1.4%
Mid Atlantic Medical Services, Inc. (a) 46,400 690,200
National Surgery Centers, Inc. (a) 16,100 513,187
Orthodontic Centers of America, Inc. (a) 16,700 308,950
Synetic, Inc. (a) 6,700 277,213
------------
1,789,550
8
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MISCELLANEOUS-0.3%
Buckeye Cellulose Corp. (a) 11,200 $ 403,200
------------
6,350,913
CONSUMER MANUFACTURING-4.3%
AUTO & RELATED-3.4%
Autoliv, Inc. (a) 6,000 208,875
Budget Group, Inc. (a) 58,300 1,821,875
Keystone Automotive Industries, Inc. (a) 10,300 200,850
Miller Industries, Inc. (a) 50,900 858,938
Monaco Coach Corp. (a) 23,100 594,825
Watsco, Inc. 21,800 656,725
------------
4,342,088
BUILDING & RELATED-0.5%
Hughes Supply, Inc. 21,900 563,925
TEXTILE PRODUCTS-0.4%
Novel Denim Holdings, Ltd. (a) 23,900 537,750
------------
5,443,763
BASIC INDUSTRIES-3.7%
CHEMICALS-1.4%
Crompton & Knowles Corp. 39,100 962,837
Cytec Industries, Inc. (a) 12,300 485,850
Polymer Group, Inc. (a) 30,700 416,369
------------
1,865,056
CONTAINERS-0.3%
U.S. Can Corp. (a) 22,000 353,375
MINING & METALS-2.0%
Bethlehem Steel Corp. (a) 117,500 1,321,875
Birmingham Steel Corp. 9,800 178,238
Kaiser Aluminum Corp. (a) 23,100 346,500
Steel Dynamics, Inc. (a) 25,000 662,500
------------
2,509,113
------------
4,727,544
CONSUMER STAPLES-2.4%
HOUSEHOLD PRODUCTS-0.5%
Silgan Holdings, Inc. (a) 15,600 574,275
MISCELLANEOUS-1.9%
Mohawk Industries, Inc. (a) 90,300 2,392,950
------------
2,967,225
TRANSPORTATION-2.1%
RAILROAD-0.4%
Genesee & Wyoming, Inc. (a) 18,500 471,750
TRUCKING-1.7%
Consolidated Freightways Corp. (a) 108,600 1,649,362
Roadway Express, Inc. 20,700 473,836
------------
2,123,198
------------
2,594,948
CAPITAL GOODS-1.1%
ELECTRICAL EQUIPMENT-0.3%
Rofin Sinar Technologies, Inc. (a) 20,000 362,500
POLLUTION CONTROL-0.8%
American Disposal Services, Inc. (a) 20,500 594,500
United Waste Systems, Inc. (a) 10,800 461,700
------------
1,056,200
------------
1,418,700
FINANCE-1.0%
REAL ESTATE-1.0%
CCA Prison Realty Trust (a) 10,500 325,500
Chelsea GCA Realty, Inc. 12,600 496,913
Glenborough Realty Trust, Inc. 18,500 440,531
------------
1,262,944
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MULTI INDUSTRY-0.3%
Culligan Water Technologies, Inc. (a) 9,600 $ 405,600
Total United States Investments
(cost $48,144,440) 57,826,067
FOREIGN INVESTMENTS-46.9%
ARGENTINA-0.0%
Quilmes Industrial Quinsa S.A. (ADR) 2,000 23,000
AUSTRALIA-2.0%
AAPC, Ltd. 150,000 87,194
Brambles Industries, Ltd. 20,000 414,359
Broken Hill Proprietary Co., Ltd. 10,000 135,933
Cochlear, Ltd. (b) 6,000 20,345
ERG, Ltd. 230,000 238,256
GIO Australia Holding 80,000 246,827
Great Central Mines, Ltd. 15,000 30,741
Hoyts Cinemas Group
Auditorium 10,000 21,985
Rights Expire 9/03/97 1,667 435
Oil Search, Ltd. 140,000 440,294
Orogen Minerals, Ltd. (GDR) (b) 15,000 442,650
Plutonic Resources 20,000 59,322
Spectrum Network 480,000 182,437
Village Roadshow, Ltd. 30,000 80,040
WMC, Ltd. 15,121 87,740
------------
2,488,558
AUSTRIA-0.4%
Austria Mikro Systeme International AG 900 82,460
Benckiser-Wasser-Technik AG 600 96,958
KTM Motorradholding (a) 3,000 200,178
OMV AG 1,000 138,400
V.A. Technologies AG 200 41,806
------------
559,802
BRAZIL-1.0%
Cia Riograndense de Telefonia (a) 13,534 17,290
Cia Riograndense de Telefonia pfd. (a) 380,000 631,784
Companhia Paranaense de Energy (ADR) (a) 33,000 635,250
------------
1,284,324
CANADA-0.6%
Accugraph Corp. (a) 17,000 14,147
Architel Systems Corp. (a)(b) 14,400 93,784
Cinar Films, Inc. Cl.B (ADR) (a) 5,000 165,000
Nelvana, Ltd. (a)(b) 8,000 121,572
Prime Resources Group, Inc. 5,000 41,247
Renaissance Energy, Ltd. (a) 6,000 148,274
Royal Group Technologies, Ltd. (a)(b) 5,000 136,045
------------
720,069
CHILE-0.1%
Banco Santander (ADR) 2,000 31,500
Enersis, S.A. (ADR) 3,000 111,562
Santa Isabel, S.A. (ADR) 1,000 27,500
------------
170,562
DENMARK-0.7%
Carli Gry International AS (b) 7,965 482,445
Coloplast 1,500 101,545
Novo Nordisk A.S. 3,000 315,538
Scandinavian Mobility International (b) 4,000 39,335
------------
938,863
10
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
FINLAND-1.4%
Kesko 15,000 $ 210,061
KCI Konecranes International Corp. (b) 6,000 240,070
Nokia AB OY Corp. pfd. 12,000 1,035,574
Orion-Yhtymae OY Cl.B 7,000 253,347
OY Hartwall AB 1,000 67,292
------------
1,806,344
FRANCE-2.7%
Accor (c) 1,500 225,253
Alcatel Alsthom (Cie Gen. de Electricite) (c) 1,400 182,490
Bouygues Offshore, S.A. (ADR) (c) 11,600 174,000
Coflexip, S.A. (ADR) (c) 7,700 261,800
Compagnie Generale de Geophysique,
S.A. (ADR)(a) 29,000 594,500
Compagnie Generale des Eaux (c) 2,030 256,107
warrants, expiring 05/02/01 1,500 894
Dexia France (c) 1,800 178,076
Lafarge, S.A. (c) 3,000 210,800
Louis Dreyfus Citrus (a)(b)(c) 5,700 196,541
Michelin (c) 3,000 186,438
Moulinex (c) 12,000 291,959
S T Dupont (a)(b)(c) 7,540 212,605
SEITA (c) 5,000 151,458
SGS-Thomson Microelectronics N.V. (a)(c) 1,200 108,470
Television Francaise (c) 2,000 172,404
------------
3,403,795
GERMANY-1.5%
Adidas AG 1,000 117,283
Apcoa Parking AG (b)(c) 1,460 127,236
Bayer AG (c) 3,000 126,079
Beta Systems Software AG (a)(b)(c) 3,700 341,532
BHW Holding AG (a) 3,400 57,784
BUS Berzelius Umwelt Service AG (c) 8,000 113,374
Deutsche Telekom AG (ADR) (c) 14,400 336,600
Fielmann AG pfd. (c) 2,000 48,976
ProSieben Media AG (a) 670 29,758
SGL Carbon AG (b)(c) 4,000 531,031
Veba AG (c) 2,000 116,088
------------
1,945,741
GREECE-0.4%
Hellenic Telecommunications, S.A. (a) 370 8,105
Hellenic Telecommunication Organization, S.A. 5,000 109,523
Petzetakis, S.A. 100,000 434,616
------------
552,244
HONG KONG-0.4%
China Travel International 50,000 29,706
HSBC Holdings Plc. 4,000 139,490
Pacific Rim Infrastructure
Management Enterprises, Ltd. (a) 1,195,800 134,368
Sino Land Co. 150,000 156,926
------------
460,490
INDIA-0.2%
Gujarat Narmada Valley
Fertilizers Co., Ltd. (GDR) (b) 4,000 16,669
Shriram Industrial Enterprises,
Ltd. (GDR) (a) 15,000 30,000
Videsh Sanchar Nigam, Ltd. (GDR) (a)(b) 12,000 217,200
------------
263,869
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
INDONESIA-0.3%
Great River International 427,000 $ 236,769
PT Indosat (ADR) 4,000 124,500
------------
361,269
IRELAND-0.8%
Crean (James) Plc. 55,000 164,705
Fyffes Plc. 280,000 395,558
Irish Continental Group Plc. 15,000 167,122
Jurys Hotel Group Plc. 50,000 302,203
------------
1,029,588
ISREAL-0.4%
Check Point Software Technologies, Ltd. (a) 14,100 380,700
Tadiran Telecommunications, Ltd. 7,000 149,625
------------
530,325
ITALY-1.7%
Aeroporti di Roma S.p.A. (a) 4,200 34,108
ENI S.p.A. (ADR) 3,000 176,438
Fila Holding Sponsored (ADR) 3,000 98,063
Industrie Natuzzi S.p.A. (ADR) 50,900 1,402,931
Mediaset 40,000 181,457
Mondadori (Arnoldo) Editore S.p.A. 10,000 61,116
Telecom Italia 43,100 145,141
Zucchini S.p.A. 9,050 53,396
------------
2,152,650
JAPAN-12.8%
Akita Bank 7,000 41,580
Asahi Bank 13,000 97,541
Asahi Diamond Industrial 9,852 81,163
Asatsu, Inc. 4,000 126,067
Bank of Tokyo-Mitsubishi, Ltd. 20,250 376,426
Bridgestone Metalpha Corp. 2,000 15,040
Canon, Inc. 2,000 63,878
Capcom Co. 1,400 30,283
Credit Saison Co. 18,415 566,376
Daibiru Corp. 5,000 59,992
Daiichi Kangyo Bank 20,000 248,416
Daimon Co. 2,000 12,167
Dainippon Ink & Chemical, Inc. 4,000 16,392
Daiseki Co. 1,400 25,433
Daito Trust Construction Co., Ltd. 7,000 75,116
DDI Corp. 30 206,337
Deodeo Corp. 600 9,379
Doshisha Co. 600 5,070
Eiden Sakakiya Co. 6,000 49,683
Enplas Corp. 6,000 112,548
Enshu 9,000 24,335
Exedy Corp. Industries, Ltd. 1,500 13,435
Familymart Co. 1,000 49,768
FCC Co., Ltd. 100 2,374
Fuji Soft ABC, Inc. 8,600 399,662
Fujikura 20,000 196,029
Fujimi, Inc. 440 30,114
Hachijuni Bank 3,000 28,390
Hirose Electric Co. 300 24,385
Hitachi Metals, Ltd. 6,000 38,226
Hitachi Plant Engineering & Construction Co. 6,000 24,335
Hokushin Co. 300 1,508
Home Wide Corp. 4,000 28,627
Honda Motor Co. 8,000 267,681
Hoya Corp. 8,000 405,577
Imagineer Co., Ltd. 3,600 111,635
INES Corp. 6,000 105,450
Isetan Co. 15,000 155,894
Ishiguro Homa Co. 2,000 27,376
Ishihara Sangyo 26,000 68,103
Ishikawajima-Harima Heavy Industries 17,000 57,457
Japan Airport Terminal 13,200 163,954
12
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Japan Industrial Land Development 5,200 $ 42,619
Kajima Corp. 5,000 25,898
Kaneshita Construction 7,000 50,393
Kawasaki Heavy Industries 21,000 86,058
Kawasaki Kisen 8,000 13,519
Keyence Corp. 450 73,004
Kikuchi Co. 3,000 28,137
King Co. 15,000 45,627
Koa Fire & Marine 3,000 17,490
Kokuyo 3,000 71,736
Mabuchi Motor Co. 3,100 197,237
Makino Milling 2,000 15,547
Mars Engineering 2,000 42,248
Matsuda Sangyo 3,000 50,697
Meitec Corp. 10,000 337,136
Micronics Co. 5,000 281,791
Minebea Co. 14,000 166,793
Mitsubishi Corp. 4,000 42,924
Mitsubishi Estate 10,000 142,797
Mitsubishi Heavy Industries, Ltd. 35,000 246,937
Mitsubishi Trust and Bank 13,000 190,030
Mitsui Home Co. 7,000 59,738
N I C Corp. 9,000 91,255
Namco 3,800 143,523
Namura Shipbuilding 6,000 25,399
Nanno Construction 8,000 24,842
NGK Spark Plug Co. 11,000 114,322
Nichiei Co. 2,800 298,099
Nichiha Corp. 14,400 217,795
Nichii Gakkan Co. 4,000 190,959
Nintendo Corp., Ltd. 2,100 212,928
Nippon Broadcasting System 3,000 304,182
Nippon Denwa Shisetsu 7,500 57,034
Nippon Kanzai Co. 240 5,049
Nippon Paper Industries Co. 3,000 16,223
Nippon System Development 1,000 21,631
Nireco Corp. 9,000 68,289
Nissen Corp., Ltd. 1,200 3,549
Nitta Corp. 9,000 95,817
Nitto Kohki Co. 6,300 188,973
Noritsu Koki Co. 8,400 391,077
Ohmoto Gumi, Co. 3,400 22,121
Oie Sangyo Co., Ltd. 4,400 37,178
Oji Paper Co., Ltd. 11,000 57,626
Oriental Construction 3,000 26,869
Paris Miki, Inc. 8,380 238,619
Promise Co., Ltd. 1,200 66,920
PS Corp. 5,000 52,387
Raito Kogyo 5,000 43,093
Renown, Inc. 16,000 30,689
Ricoh Elemex Co., Ltd. 3,000 35,488
Rohm Co., Ltd. 1,000 130,967
Sankyo Co., Ltd. 11,000 393,156
Sankyo Engineering 2,000 13,519
Santen Pharmaceutical Co. 19,420 338,024
Sanyo Chemical Industries 4,000 33,697
Sanyo Electric Co. 15,000 62,864
Sanyo Engineering and Construction Co. 6,000 41,166
Sanyo Pax Co. 8,500 125,687
Sanyo Shinpan Finance Co., Ltd. 2,020 122,548
Sato Corp. 10,700 171,779
Seven-Eleven Japan 3,200 254,161
Shinko Electric Industries 1,800 77,871
Shizuoka Bank 19,000 205,492
Sho Bond Corp. 11,200 280,118
SMC Corp. 1,800 177,947
Sodick Co. 27,000 205,323
Suido Kiko Kaisha 1,000 5,070
Sumitomo Bank, Ltd. 26,000 417,406
Sumitomo Forestry 3,000 28,644
Sumitomo Heavy Industries 24,000 83,143
Sumitomo Metal Industries 58,000 146,041
13
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Sumitomo Realty & Development 36,000 $ 261,597
Taisho Pharmaceutical Co. 9,000 234,981
Takefuji Corp. 7,060 343,008
TDK Corp. 4,000 344,740
Toei Co. 6,000 37,262
Toho Bank 12,000 74,626
Toho Titanium Co. 9,000 126,996
Tokyo Broadcasting 11,000 182,172
Tokyo Cathode Laboratory 6,000 171,863
Tokyo Electron, Ltd. 400 24,740
Toso Co., Ltd. 6,500 52,176
Towa Corp. 4,000 179,806
Toyoda Gosei 10,000 65,061
Toyota Motor Corp. 9,000 276,046
Wesco, Inc. 5,616 39,718
Xebio Co. 1,200 28,897
Yamaichi Electronics Co., Ltd. 6,000 164,259
Yamaichi Securities Co. 18,000 39,544
Yamato Transport 15,000 190,114
Yaskawa Electric Corp. 8,000 31,770
Yokogawa Electric 21,000 191,635
------------
16,129,128
LUXEMBOURG-0.9%
Millicom International Cellular, S.A. (a) 18,900 1,067,850
MALAYSIA-1.0%
AMMB Holdings Bhd 10,000 56,872
Arab Malaysian Finance Berhad 40,000 83,412
Hong Leong Bank Berhad 40,000 89,479
Kim Hin Industry 10,000 12,057
Cl.A 2,000 2,351
Lingkaran Trans Kota Holding (b) 74,000 147,298
Mancon Berhad 21,333 37,530
Metacorp Berhad 40,000 69,460
Pacific & Orient 50,000 109,953
Pernas International Hotels Bhd 100,000 84,550
RJ Reynolds Berhad 65,000 147,867
SAP Holdings Berhad 10,000 21,232
Sime Darby Berhad 50,000 157,346
Sriwani Holdings Bhd 40,000 71,583
Star Publications 10,000 40,569
Talam Corp. Berhad 50,000 54,028
UMW Holdings Bhd 30,000 118,294
------------
1,303,881
MEXICO-0.5%
Grupo Elektra 15,000 224,319
Grupo Industrial Durango, S.A. (ADR) (a) 12,000 192,000
Industrias Campos Hermanos (a) 20,000 92,874
International de Ceramica (a) 34,915 75,931
------------
585,124
NETHERLANDS-2.2%
Aegon N.V. (c) 3,500 265,374
AKZO Nobel N.V. (c) 1,000 154,729
Content Beheer N.V. (b)(c) 9,000 345,102
Elsevier N.V. (c) 18,000 316,886
Fortis Amev N.V. (c) 7,000 318,381
IHC Caland N.V. 4,000 215,502
KLM Royal Dutch Airlines (c) 9,000 320,793
Kon Ptt Nederland (c) 3,000 122,992
Nutricia Verenidge Bedrijuen (b)(c) 1,000 169,778
Vedior (a)(c) 20,000 499,687
------------
2,729,224
NEW ZEALAND-0.2%
Restaurant Brands, Ltd. (a) 93,700 146,680
Tourism Holdings, Ltd. 50,000 67,553
Warehouse Group 28,000 81,843
------------
296,076
14
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
NORWAY-1.2%
Alvern A/S 50,000 $ 346,800
Hafslund ASA (c) 4,000 20,939
Navia ASA (a)(c) 38,000 166,595
Sparebanken NOR (c) 8,000 238,703
Tomra Systems AS (c) 33,070 675,136
------------
1,448,173
PANAMA-0.6%
Banco Latinoamericano de
Exportaciones, S.A. (ADR) 15,000 712,500
PERU-0.4%
Banco Wiese (ADR) 15,000 93,750
Telefonica del Peru, S.A. (ADR) 15,000 370,312
------------
464,062
PHILIPPINES-0.1%
Alsons Cement 250,000 30,932
Asian Terminals, Inc. 193,333 26,215
International Container 190,000 88,559
------------
145,706
PORTUGAL-0.5%
Electricidade de Portugal (a) 10,795 182,887
Portugal Telecom, S.A. 670 26,693
Telecel-Comunicacaoes Pesscasis, S.A. (a)(b) 4,320 337,954
TVI Televisao Independente (a)(d) 7,800 19,291
------------
566,825
SINGAPORE-0.6%
City Developments 10,000 84,970
Fraser & Neave, Ltd. 40,000 271,905
Lim Kah Ngam, Ltd. 30,000 31,405
Overseas Union Bank, Ltd. 400 2,597
Singapore Airlines, Ltd. 12,000 112,569
Singapore Land, Ltd. 30,000 147,849
United Overseas Bank 8,000 87,010
------------
738,305
SOUTH KOREA-0.6%
Samsung Electronics Co., Ltd.
(GDR)(a)(b) 10,912 331,725
bonus shares (GDR)(a)(b) 1,089 64,632
SK Telecom Co., Ltd. (ADR) 31,930 367,195
------------
763,552
SPAIN-1.8%
Banco Popular Esp (c) 200 44,260
Catalana Occidente, S.A. (c) 9,730 492,959
Centros Commerciales Continente, S.A. (c) 2,000 38,577
Construcciones Y Aux de Ferr (c) 2,000 81,396
Corporacion Mapfre Esp500 (c) 5,452 304,612
Gas Y Electricidad (c) 7,000 450,059
Hidroel Cantabrico (c) 2,000 78,568
Iberdrola II, S.A. (c) 20,000 221,815
Portland Valderriv (c) 1,000 79,275
Repsol, S.A. (c) 5,000 199,955
Telefonica de Espana (c) 6,000 160,671
Viscofan Envolturas Celulosicas (c) 4,000 93,870
------------
2,246,017
SWEDEN-1.5%
Astra AB (c) 5,001 89,616
Autoliv, Inc. (a)(b)(c) 2,000 70,174
Dahl International AB (b)(c) 13,000 247,616
Kalmar Industries AB (b)(c) 8,000 134,334
Netcom Systems AB (a)(b)(c) 22,000 333,580
Scandic Hotels AB (a)(b)(c) 35,100 584,993
Skandia Foersaekrings AB (c) 3,600 146,163
Sparbanken Sverige AB (c) 2,800 61,403
Swedish Match (c) 80,000 253,631
------------
1,921,510
15
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
SWITZERLAND-1.4%
ABB AG (a) 120 $ 170,319
Ciba Specialty Chemicals AG (a) 2,589 238,535
Novartis AG 140 224,410
Roche Holdings AG, Ltd. 55 531,256
Selecta Gruppe (b) 2,700 405,687
Tag Heuer International, S.A. (ADR) (a) 11,600 187,050
------------
1,757,257
THAILAND-0.2%
CMIC Finance & Security Public Co. (a)(d) 110,000 -0-
Nawarat Patanakarn 20,000 8,157
Siam Makro 10,000 25,176
Thai Engine Manufacturing 39,300 253,986
------------
287,319
UNITED KINGDOM-5.8%
Amvescap Plc 20,000 122,083
Barclays Plc 7,000 147,739
Bass Plc 10,000 136,851
British Airways Plc 4,000 43,517
Caird Group Plc 3,000 32,096
Carlton Communications Plc 42,100 336,083
Carpetright Plc 5,000 43,238
Dixons Group Plc 25,000 249,212
Doncasters Plc (ADR) (a) 21,400 556,400
Filtronic Comtek Plc 90,000 534,605
Grand Metropolitan Plc 10,000 98,208
Guinness Plc 50,000 479,963
Harvey Nichols Group Plc (b) 20,000 79,419
Holliday Chemical Holdings Plc 100,000 224,803
House of Fraser Plc 40,000 122,739
Imperial Tobacco Group Plc 25,000 155,270
Johnson Matthey Plc 10,000 95,008
LucasVarity Plc 50,000 154,244
M.S. International Plc 325,000 125,324
McBride Plc 30,000 69,902
Mirror Group Plc 20,000 63,995
Misys Plc 10,000 249,417
National Grid Group Plc 40,000 169,341
National Power Plc 40,000 354,762
Norwich Union Plc (a) 23,500 123,396
Powerscreen International Plc 40,000 420,070
Rank Group Plc 10,000 56,611
Reed International Plc 16,000 160,677
Rentokil Initial Plc 100,000 356,896
Shandwick International Plc 10,000 6,892
Siebe Plc 8,000 144,399
Smith (WH) Group Plc. 6,200 38,030
Thistle Hotels Plc (b) 37,600 86,531
Tomkins Plc 35,000 176,889
Vodafone Group Plc 60,000 303,238
WPP Group Plc 70,000 285,434
Zeneca Group Plc 16,000 531,651
------------
7,334,933
Total Foreign Investments
(cost $52,139,823) 59,188,935
Total Common Stocks & Other Investments
(cost $100,284,263) 117,015,002
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
COMMERCIAL PAPER-2.1%
American Express Co.
5.43%, 8/01/97 $ 1,200 1,200,000
General Electric Capital Corp.
5.40%, 8/04/97 800 799,640
Prudential Funding
5.55%, 8/05/97 700 699,568
Total Commercial Paper
(amortized cost $2,699,208) 2,699,208
16
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
U.S. $ VALUE
- -------------------------------------------------------------------------
TOTAL INVESTMENTS -94.8%
(cost $102,983,471) $119,714,210
Other assets less liabilities-5.2% 6,500,313
NET ASSETS-100% $126,214,523
(a) Non-income producing security.
(b) 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 July 31, 1997, these securities
amounted to $6,557,883 representing 5.2% of net assets.
(c) Securities with an aggregate market value of $12,331,939 segregated to
collateralize forward exchange currency contracts.
(d) Illiquid security, valued at fair market value (see Note A).
Glossary of Terms:
ADR - American Depository Receipt
GDR - Global Depository Receipt
See notes to financial statements.
17
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $102,983,471) $119,714,210
Cash, at value (cost $135,309) 135,196
Receivable for investment securities and foreign currency sold 9,871,447
Unrealized appreciation of forward exchange currency contracts 766,712
Receivable for capital stock sold 254,352
Dividends and interest receivable 68,894
Foreign taxes receivable 36,675
Total assets 130,847,486
LIABILITIES
Payable for investment securities and foreign currency purchased 3,433,486
Unclaimed dividends 634,139
Payable for capital stock redeemed 119,533
Management fee payable 105,101
Distribution fee payable 68,759
Accrued expenses 271,945
Total liabilities 4,632,963
NET ASSETS $126,214,523
COMPOSITION OF NET ASSETS
Capital stock, at par $ 100,256
Additional paid-in capital 100,390,506
Accumulated net investment loss (314,454)
Accumulated net realized gain on investments and
foreign currency transactions 8,544,970
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 17,493,245
$126,214,523
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($85,216,704/
6,621,562 shares of capital stock issued and outstanding) $12.87
Sales charge -- 4.25% of public offering price .57
Maximum offering price $13.44
CLASS B SHARES
Net asset value and offering price per share($31,946,061/
2,654,983 shares of capital stock issued and outstanding) $12.03
CLASS C SHARES
Net asset value and offering price per share($8,718,392/
723,219 shares of capital stock issued and outstanding) $12.05
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share($333,366
/25,857 shares of capital stock issued and outstanding) $12.89
See notes to financial statements.
18
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $113,927) $ 885,936
Interest 317,186 $ 1,203,122
EXPENSES
Management fee 1,054,834
Distribution fee- Class A 219,566
Distribution fee- Class B 228,764
Distribution fee- Class C 65,224
Transfer agency 370,417
Custodian 306,369
Audit and legal 129,737
Administrative 122,541
Registration 103,798
Printing 79,287
Directors' fees 38,000
Miscellaneous 24,612
Total expenses 2,743,149
Less: expense offset arrangement (see Note B) (26,921)
Net expenses 2,716,228
Net investment loss (1,513,106)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investment transactions 9,872,914
Net realized gain on foreign currency transactions 978,035
Net change in unrealized appreciation of:
Investments 14,524,713
Foreign currency denominated assets and liabilities 991,214
Net gain on investments and foreign currency transactions 26,366,876
NET INCREASE IN NET ASSETS FROM OPERATIONS $24,853,770
See notes to financial statements.
19
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $(1,513,106) $(1,012,261)
Net realized gain on investments and foreign
currency transactions 10,850,949 16,929,870
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 15,515,927 (4,726,150)
Net increase in net assets from operations 24,853,770 11,191,459
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (9,231,726) (2,964,670)
Class B (2,729,321) (331,138)
Class C (783,298) (74,101)
Advisor Class (38,258) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 27,153,600 12,540,287
Total increase 39,224,767 20,361,837
NET ASSETS
Beginning of year 86,989,756 66,627,919
End of year $126,214,523 $86,989,756
See notes to financial statements.
20
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Small Cap Fund (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Fund offers Class A, Class B, Class C and Advisor Class shares. Class A
shares are sold with a front-end sales charge of up to 4.25% for purchases not
exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a contingent
deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 4% 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 Cshares are subject to a contingent deferred sales charge of 1%
on redemptions made within the first year after purchase. Advisor Class shares
are sold without an initial or contingent deferred sales charge and are not
subject to ongoing distribution expenses. Advisor Class shares are offered to
investors participating in fee-based programs and to certain retirement plan
accounts. All four 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, unless this method does not
approximate fair value. Restricted securities, illiquid securities and
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, 1997.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized foreign currency gains represent foreign exchange gains from sales
and maturities of securities and foreign exchange currency contracts, currency
gains and losses realized between the trade and settlement dates on security
transactions and the difference between the amounts of interest recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net currency gains and losses from valuing foreign currency denominated assets
and liabilities at year end exchange rates are reflected as a component of
unrealized appreciation of investments and foreign currency denominated assets
and liabilities.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date the securities are
purchased or sold. Investment 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.
21
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences, do not require such
reclassification. During the current fiscal year, permanent differences,
primarily due to tax treatment of foreign currency gains, resulted in a net
decrease in accumulated net investment loss and net realized gain on investment
and foreign currency transactions and a correpsonding increase to additional
paid-in capital. This reclassification had no affect on net assets.
NOTE B: MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement the Fund pays Alliance Capital
Management L.P. (the "Manager") 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.
Pursuant to the management agreement, the Fund paid $122,541 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, 1997.
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 $256,078 for the year ended July 31, 1997.
In addition, for the year ended July 31, 1997, the Fund's expenses were reduced
by $26,921 under an expense offset arrangement with Alliance Fund Services.
Transfer Agency fees reported in the statement of operations excludes these
credits.
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 $10,485 from the sales of Class A shares and $27,720
and $1,969 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B and Class C, respectively, for the year ended July 31,
1997.
Brokerage commissions paid on securities transactions for the year ended July
31, 1997 amounted to $573,077, 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. There is no distribution fee on the Advisor Class 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 $2,055,687 and $586,919 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.
22
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $138,898,059 and $128,840,473,
respectively, for the year ended July 31, 1997. There were no purchases or
sales of U.S. government and government agency obligations for the year ended
July 31, 1997.
At July 31, 1997, the cost of investments for federal income tax purposes was
$103,626,942. Accordingly, gross unrealized appreciation of investments was
$23,334,125 and gross unrealized depreciation of investments was $7,246,857,
resulting in net unrealized appreciation of $16,087,268, excluding foreign
currency.
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.
The Fund's custodian will place and maintain cash not available for investment
or liquid assets in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of 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 July 31, 1997, the Fund had outstanding forward exchange currency contracts
to sell foreign currencies against the U.S. dollar, as follows:
CONTRACT VALUE ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
-------- ---------- ----------- -----------
FOREIGN CURRENCY SALE CONTRACTS
Deutsche Mark, maturing 9/22/97 3,016 $1,795,666 $1,643,600 $152,066
French Franc, maturing 10/14/97 13,877 2,402,944 2,246,595 156,349
Netherland Guilder,
maturing 9/22/97 4,598 2,434,736 2,225,413 209,323
Norwegian Krone,
maturing 10/14/97 10,750 1,507,714 1,411,778 95,936
Spanish Peseta,
maturing 10/14/97 238,000 1,637,472 1,531,045 106,427
Swedish Krona,
maturing 10/14/97 13,400 1,729,925 1,683,314 46,611
----------
$766,712
23
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 87,500,000 shares of $.01 par value capital stock authorized, divided
into four classes, designated Class A, Class B, Class C, and Advisor Class
shares. Class A, Class C and Advisor Class 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
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, JULY 31, JULY 31, JULY 31,
1997 1996 1997 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 993,161 666,687 $11,718,840 $ 7,703,615
Shares issued in
reinvestment of
distributions 632,521 214,027 6,982,712 2,238,721
Shares converted
from Class B 62,837 29,137 741,976 365,303
Shares redeemed (975,383) (788,775) (11,573,247) (8,976,608)
Net increase 713,136 121,076 $ 7,870,281 $ 1,331,031
CLASS B
Shares sold 2,096,355 1,035,693 $23,394,278 $11,503,034
Shares issued in
reinvestment of
distributions 179,345 21,596 1,859,822 215,523
Shares converted
to Class A (65,905) (30,676) (741,976) (365,303)
Shares redeemed (846,665) (253,960) (9,385,983) (2,731,200)
Net increase 1,363,130 772,653 $15,126,141 $ 8,622,054
CLASS C
Shares sold 781,046 501,624 $ 8,633,201 $ 5,589,123
Shares issued in
reinvestment of
distributions 37,793 4,299 392,675 42,946
Shares redeemed (468,473) (274,347) (5,183,229) (3,044,867)
Net increase 350,366 231,576 $ 3,842,647 $ 2,587,202
OCT. 2, 1996* OCT. 2, 1996*
TO TO
JULY 31, 1997 JULY 31, 1997
------------ -------------
ADVISOR CLASS
Shares sold 32,509 $ 401,185
Shares issued in
reinvestment of
distributions 2,983 32,937
Shares redeemed (9,635) (119,591)
Net increase 25,857 $314,531
* Commencement of distribution.
24
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
OCTOBER 1,
1993
YEAR ENDED JULY 31, TO YEAR ENDED
-------------------------------------- JULY 31, SEP. 30,
1997 1996 1995 1994(A) 1993
------------ ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.61 $10.38 $11.08 $11.24 $9.33
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.15)(b) (.14)(b) (.09) (.15)(b) (.15)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.97 1.90 1.50 (.01) 2.49
Net increase (decrease) in net asset
value from operations 2.82 1.76 1.41 (.16) 2.34
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.56) (.53) (1.99) -0- (.43)
Tax return of capital -0- -0- (.12) -0- -0-
Net asset value, end of period $12.87 $11.61 $10.38 $11.08 $11.24
TOTAL RETURN
Total investment return based on net
asset value (c) 26.47% 17.46% 16.62% (1.42)% 25.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $85,217 $68,623 $60,057 $61,372 $65,713
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.41%(d) 2.51% 2.54%(e) 2.42%(f) 2.53%
Net investment loss (1.25)% (1.22)% (1.17)% (1.26)%(f) (1.13)%
Portfolio turnover rate 129% 139% 128% 78% 97%
Average commission rate (g) $.0364 -- -- -- --
</TABLE>
See footnote summary on page 28.
25
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
OCTOBER 1,
1993
YEAR ENDED JULY 31, TO YEAR ENDED
-------------------------------------- JULY 31, SEP. 30,
1997 1996 1995 1994(A) 1993
------------ ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.03 $9.95 $10.78 $11.00 $9.20
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.21)(b) (.20)(b) (.12) (.17)(b) (.15)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.77 1.81 1.40 (.05) 2.38
Net increase (decrease) in net asset
value from operations 2.56 1.61 1.28 (.22) 2.23
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.56) (.53) (1.99) -0- (.43)
Tax return of capital -0- -0- (.12) -0- -0-
Net asset value, end of period $12.03 $11.03 $9.95 $10.78 $11.00
TOTAL RETURN
Total investment return based on net
asset value (c) 25.42% 16.69% 15.77% (2.00)% 24.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $31,946 $14,247 $5,164 $3,889 $1,150
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.11%(d) 3.21% 3.20%(e) 3.15%(f) 3.26%
Net investment loss (1.92)% (1.88)% (1.92)% (1.93)%(f) (1.85)%
Portfolio turnover rate 129% 139% 128% 78% 97%
Average commission rate (g) $.0364 -- -- -- --
</TABLE>
See footnote summary on page 28.
26
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------
OCTOBER 1, MAY 3
1993 1993(H)
YEAR ENDED JULY 31, TO TO
-------------------------------------- JULY 31, SEP. 30,
1997 1996 1995 1994(A) 1993
------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.05 $ 9.96 $10.79 $11.00 $ 9.86
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.22)(b) (.20)(b) (.17) (.17)(b) (.05)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 2.78 1.82 1.45 (.04) 1.19
Net increase (decrease) in net asset
value from operations 2.56 1.62 1.28 (.21) 1.14
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.56) (.53) (1.99) -0- -0-
Tax return of capital -0- -0- (.12) -0- -0-
Net asset value, end of period $12.05 $11.05 $9.96 $10.79 $11.00
TOTAL RETURN
Total investment return based on net
asset value (c) 25.37% 16.77% 15.75% (1.91)% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,718 $4,119 $1,407 $1,330 $261
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 3.10%(d) 3.19% 3.25%(e) 3.13%(f) 3.75%(f)
Net investment loss (1.93)% (1.85)% (2.10)% (1.92)%(f) (2.51)%(f)
Portfolio turnover rate 129% 139% 128% 78% 97%
Average commission rate (g) $.0364 -- -- -- --
</TABLE>
See footnote summary on page 28.
27
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
------------------
OCTOBER 2, 1996(H)
TO
JULY 31, 1997
------------------
Net asset value, beginning of period $12.56
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (.08)
Net realized and unrealized gain on investments 1.97
Net increase in net asset value from operations 1.89
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.56)
Net asset value, end of period $12.89
TOTAL RETURN
Total investment return based on net asset value (c) 17.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $333
Ratio to average net assets of:
Expenses, net of waivers/reimbursements (d)(f) 2.05%
Net investment loss (f) (.84)%
Portfolio turnover rate 129%
Average commisson rate $.0364
(a) The Fund changed its fiscal year end from September 30 to July 31.
(b) Based on average shares outstanding.
(c) 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 charges are not reflected in the calculation of total investment
return. Total investment return calculated for period of less than one year is
not annualized.
(d) Ratio reflects expenses grossed up for expense offset arrangement with the
transfer agent. For the year ended July 31, 1997, the net expense ratio was
2.38%, 3.08%, 3.08% and 2.04% for the Class A, B, C and Advisor Class shares,
respectively.
(e) 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.
(f) Annualized.
(g) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(h) Commencement of distributions.
28
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, 1997, 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, 1997, 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, 1997, 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 3, 1997
29
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
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
RANDALL E. HAASE, VICE PRESIDENT
RONALD L. SIMCOE, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, 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.
30
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 High Yield Fund
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
Alliance/Regent Sector Opportunity 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 Real Estate Investment 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
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
31
ALLIANCE GLOBAL SMALL CAP FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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
