ALLIANCE GLOBAL SMALL CAP FUND
SEMI-ANNUAL REPORT
JANUARY 31, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
March 27, 1998
Dear Shareholder:
This semi-annual report contains investment results and market activity for
Alliance Global Small Cap Fund for the period ended January 31, 1998.
INVESTMENT RESULTS
Alliance Global Small Cap Fund outperformed the Lipper Global Small Company
Funds Average for the six and 12 month periods ended January 31, 1998. 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 same six and 12 month periods 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) during this time frame.
INVESTMENT RESULTS*
Periods Ended January 31, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
--------- ---------
ALLIANCE GLOBAL SMALL CAP FUND
Class A -2.41% 8.37%
Class B -2.66% 7.73%
Class C -2.65% 7.72%
MSCI WORLD INDEX -1.23% 18.04%
LIPPER GLOBAL SMALL COMPANY
FUNDS AVERAGE -6.66% 2.61%
* THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD
AND ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF JANUARY 31,
1998. ALL FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN
DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN
SHARES ARE PURCHASED OR REDEEMED. TOTAL RETURNS FOR ADVISOR CLASS SHARES WILL
DIFFER DUE TO DIFFERENT EXPENSES CHARGED TO THAT CLASS. RETURNS FOR THE FUND
AND ITS COMPARATIVE BENCHMARKS INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS
PAID DURING THE PERIOD. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
ALL COMPARATIVE BENCHMARKS ARE UNMANAGED AND REFLECT NO FEES OR EXPENSES.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI )WORLD INDEX IS A
MARKET-CAPITALIZATION WEIGHTED INDEX THAT MEASURES THE PERFORMANCE OF STOCK
MARKETS IN 23 COUNTRIES. THE LIPPER GLOBAL SMALL COMPANY FUNDS AVERAGE FOR THE
SIX AND 12 MONTH PERIODS ENDED JANUARY 31, 1998 REFLECTS THE PERFORMANCE OF 33
AND 32 MUTUAL FUNDS, RESPECTIVELY. THESE FUNDS HAVE GENERALLY SIMILAR
INVESTMENT OBJECTIVES TO YOUR FUND, ALTHOUGH INVESTMENT POLICIES FOR THE
VARIOUS FUNDS MAY DIFFER. AN INVESTOR CANNOT INVEST DIRECTLY IN THE INDEX OR
AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
U.S. INVESTMENTS
We have continued to add to the Fund's positions in the retail and apparel
sectors. By and large, these companies have continued to report earnings per
share (EPS) gains between 20% and 30% with price to earnings (P/E) ratios
between 12 and 18 times earnings, and these stocks have not kept up with the
overall market. In addition to long-standing positions in Nautica Enterprises,
Inc. and Tommy Hilfiger Corp., Tiffany & Co., CDW Computer Centers, Inc. and
Furniture Brands International, Inc. have been added to the portfolio.
Thus far, our position in Circuit City Stores, Inc.-CarMax Group has been a
disappointment. However, we are still very confident that the changing
landscape within the automobile retail sector will benefit CarMax as their
superstore format further penetrates the automobile market. The automobile
rental market continues to see higher prices, lower capacity and better yield
management. Within this sector, we continue to like Budget Group, Inc. and Avis
Rent A Car, Inc.
Within the healthcare group, the biotechnology sector continues to act
favorably as more of the smaller tier companies are able to get their products
approved by the Federal Drug Administration (FDA). We are 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. The Fund currently has
positions in Geltex Pharmaceuticals, Inc., Centocor, Inc., MedImmune, Inc. and
Neurex Corp.
1
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
We have reduced the Fund's exposure within the hotel sector, primarily due to
its currently fair valuation. However, the fundamentals for the high-end
segment continue to be very strong. We have increased our exposure to the real
estate sector via some of the Real Estate Investment Trusts (REIT's) that are
now publicly traded. The REIT industry has gone through a tremendous change in
ownership from the private sector to the public sector and this bodes well for
valuations. The Fund now has positions in Chelsea GCA Realty, Inc., Glenborough
Realty Trust, Inc. and Security Capital Group, Inc. Cl. B.
The airline industry has just completed its third year of profitability after
showing losses from 1990-1994. We believe that 1998 will mark the fourth
consecutive year of profitability in this sector. Furthermore, this industry is
more fundamentally sound than at any point since World War II with load factors
over 70% for two years in a row, levels never before attained. In the past,
when times were good, the carriers took their excess cash flow and bought more
planes. This only added to their existing capacity and took away their pricing
power. Today, the carriers are using their cash flow to pay down debt, buy back
stock and restructure their balance sheets. As demand outpaces capacity growth,
pricing power should continue to increase, allowing them to maximize both
revenues and earnings. The Fund continues to hold positions in Continental
Airlines, Inc. and Alaska Air Group, Inc. Recently America West Airlines, Inc.
Cl. B and Trans World Airlines, Inc. were added to the portfolio.
In the technology sector, we increased our positions in DBT Online, Inc., a
data information company, and N2K, Inc., an online music company that services
the Internet. We think both of these companies should be able to grow their
customer bases and revenues 30% to 50% over the next several years.
INTERNATIONAL INVESTMENTS
European markets experienced another positive surge in January 1998. This
pushed their 12 month performance above that of the S&P 500 Stock Index. Our
European portfolio remains concentrated in core growth sectors such as
pharmaceuticals, publishing and insurance. We have added significantly to
restructuring candidates during the past six months, particularly in the
banking industry. We continue to sell long term growth holdings which have
reached lofty valuations to fund investment in restructuring stories.
Despite good stock selection in Japanese growth industries such as
pharmaceuticals, technology and consumer finance, and our underweight position
in the market, the Japanese segment of the portfolio continued to hurt overall
performance. Small cap issues have dramatically underperformed the broad market
over the past six months as domestic economic growth expectations receded. We
sold domestically oriented cyclical shares into a January 1998 rally. This
further concentrated the portfolio on core growth sectors and globally
competitive exporters.
In developing markets, the Fund was negatively impacted by the currency and
stock market turbulence in Southeast Asia despite a significantly underweighted
position in those countries. We expect to retain holdings in Hong Kong (China)
and Singapore, but are reducing positions elsewhere in the region. Within Latin
America, we are emphasizing consumer-related shares in Mexico and utilities in
Brazil. Our East European holdings are concentrated in Russian brewers.
MARKET OUTLOOK
Steady, moderate economic growth in most developed economies is expected for
1998. Sturdy economic conditions in the U.S. and Great Britain appear to be
gaining momentum while central bankers try to assess the impact of Asia's
economic slowdown. Continental Europe continues to strengthen from a subdued
base with the aid of weakening currencies. The Japanese economy is slowing
sharply and may slip into recession without significant government action.
Pricing power remains constrained in most product and service categories where
there is global competition.
Our outlook for U.S. equities remains positive. However, an increase in
interest rates would put some pressure on P/E ratios. This 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.
2
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
U.K. economic growth should slow in 1998 under the impact of prior year
interest rate increases and a strong currency. Continental Europe, by contrast,
continues to use currency weakness to boost net exports. Continental bond
markets are underpinned by expectations of low inflation after formation of the
European Monetary Union in 1999. Corporate managements are aggressively
pursuing restructuring which boosts earnings prospects for their companies.
The Japanese government needs to bolster the psychology of the consumer.
Monetary stimulus appears to have stabilized at a positive level while fiscal
stimulus is expected to become mildly expansionary in 1998. The willingness of
the government to provide adequate sustained stimulus to get the economy moving
remains in question.
Without renewed Japanese growth, the smaller economies of Southeast Asia are
likely to recover from their recent turmoil only gradually. Although these
markets should experience trading rallies, we think emerging market investment
should be concentrated in markets such as Eastern Europe and Mexico where
economic growth is likely to strengthen over the year. While we anticipate the
volatility associated with investment in developing markets, we also expect
ongoing opportunity in these markets.
IN SUMMARY
Although we are concerned by the historically high valuations being accorded
growth stocks, we continue to believe that we can identify attractive
investment ideas around the globe.
As always, we appreciate your investment in 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.
3
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 RETURNS AS OF JANUARY 31, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 8.37% 3.80%
Three Year 20.04% 18.30%
Five Years 13.44% 12.47%
Ten Years 10.46% 9.97%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 7.73% 3.79%
Three Year 19.20% 18.73%
Five Years 12.65% 12.65%
Since Inception* 10.17% 10.17%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 7.72% 6.73%
Three Year 19.25% 19.25%
Since Inception* 13.21% 13.21%
SEC AVERAGE ANNUAL TOTAL RETURNS (AT MAXIMUM OFFERING PRICE) AS OF THE MOST
RECENT QUARTER-END (DECEMBER 31, 1997)
CLASS A CLASS B CLASS C
-------- ---------- ----------
Year to Date** 3.49% 3.45% 6.38%
1 Year 3.49% 3.45% 6.38%
5 Year 12.48% 12.64% 12.80%***
10 Year 9.97% 9.87%*** n/a
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 $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class. SEC average annual total returns
for the period shown reflect reinvestment of all distributions and deduction of
the maximum 4.25% front-end sales charges.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/17/90 Class B; 5/3/93, Class C.
** Not Annualized.
*** Since inception.
n/a: not applicable.
4
TEN LARGEST HOLDINGS
JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
% OF NET
COMPANY COUNTRY U.S.$ VALUE ASSETS
- -------------------------------------------------------------------------------
Mohawk Industries, Inc. United States $ 2,634,450 2.0%
Centocor, Inc. United States 2,304,000 1.8
Continental Airlines, Inc. Cl.B United States 2,235,275 1.7
Geltex Pharmaceuticals, Inc. United States 1,890,000 1.5
OMI Corp. United States 1,887,000 1.4
Alaska Air Group, Inc. United States 1,743,394 1.3
Bethlehem Steel Corp. United States 1,639,250 1.3
Telephone and Data Systems, Inc. United States 1,628,000 1.2
Budget Group, Inc. Cl.A United States 1,544,237 1.2
Gulfstream Aerospace Corp. United States 1,417,000 1.1
$18,922,606 14.5%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
_______________________________________________________________________________
SHARES
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES COUNTRY BOUGHT 1/31/98
- -------------------------------------------------------------------------------
CDW Computer Centers, Inc. United States 23,000 23,000
Compass Group Plc United Kingdom 90,000 90,000
Gulfstream Aerospace Corp. United States 41,600 41,600
Oceaneering International, Inc. United States 36,800 36,800
Royal Oak Mines, Ltd. United States 235,200 235,200
Signature Resorts, Inc. United States 30,100 30,100
Teekay Shipping Corp. United States 30,800 30,800
Telephone and Data Systems, Inc. United States 18,900 37,000
Tiffany & Co. United States 25,800 25,800
Wolverine World Wide, Inc. United States 33,900 33,900
HOLDINGS
SALES COUNTRY SOLD 1/31/98
- -------------------------------------------------------------------------------
Abercrombie & Fitch Co. United States 24,400 -0-
American Disposal Services, Inc. United States 20,500 -0-
Evergreen Media Corp. United States 19,700 -0-
Check Point Software Technologies, Ltd. Israel 14,100 -0-
Crompton & Knowles Corp. United States 39,100 -0-
FORE Systems, Inc. United States 39,000 -0-
Hughes Supply, Inc. United States 21,900 -0-
Nine West Group, Inc. United States 20,600 -0-
Parker Drilling Co. United States 68,800 95,400
Rowan Cos., Inc. United States 29,000 12,300
5
TEN LARGEST COUNTRY HOLDINGS
JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COUNTRY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------
United States $ 63,519,672 48.8%
Japan 11,853,137 9.1
United Kingdom 9,764,136 7.5
Netherlands 3,160,490 2.4
France 2,912,533 2.2
Spain 2,624,260 2.0
Sweden 2,452,426 1.9
Australia 2,088,688 1.6
Germany 2,065,506 1.6
Norway 1,788,658 1.4
$102,229,506 78.5%
INDUSTRY DIVERSIFICATION
JANUARY 31, 1998 (UNAUDITED)
_______________________________________________________________________________
U.S. $VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------
Aerospace & Defense $ 1,494,345 1.1%
Basic Industries 5,403,636 4.2
Capital Goods 6,231,262 4.8
Consumer Manufacturing 9,699,214 7.4
Consumer Services 32,541,063 25.0
Consumer Staples 6,350,606 4.9
Energy 5,893,798 4.5
Finance 10,372,955 8.0
Healthcare 12,967,183 10.0
Multi Industry 4,445,458 3.4
Technology 12,660,805 9.7
Transportation 7,170,875 5.5
Utilities 4,310,072 3.3
Total Investments* 119,541,272 91.8
Cash and receivables,
net of liabilities 10,710,499 8.2
Net Assets $130,251,771 100.0%
* Excludes short-term obligations.
6
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-91.8%
UNITED STATES INVESTMENTS-48.8%
CONSUMER SERVICES-16.5%
ADVERTISING-1.1%
Brylane, Inc. (a) 11,600 $ 577,100
Snyder Communications, Inc. (a) 21,200 797,650
------------
1,374,750
AIRLINES-3.9%
Alaska Air Group, Inc. (a) 35,900 1,743,394
America West Airlines, Inc. Cl.B (a) 27,800 606,387
Continental Airlines, Inc. Cl.B (a) 48,200 2,235,275
Trans World Airlines, Inc. (a) 42,600 495,225
------------
5,080,281
APPAREL-1.4%
Nautica Enterprises, Inc. (a) 31,100 870,800
Wolverine World Wide, Inc. 33,900 915,300
------------
1,786,100
BROADCASTING & CABLE-2.2%
Sinclair Broadcast Group, Inc. Cl.A (a) 14,100 666,225
Telephone and Data Systems, Inc. 37,000 1,628,000
Young Broadcasting Corp. Cl.A (a) 15,400 625,625
------------
2,919,850
ENTERTAINMENT & LEISURE-1.7%
AT Entertainment, Inc. (a) 15,000 170,625
Bally Total Fitness Holding Corp. (a) 27,000 543,375
N2K, Inc. (a) 18,200 $445,900
Pep Boys Manny, Moe & Jack 15,800 345,625
Signature Resorts, Inc. (a) 30,100 733,688
------------
2,239,213
RESTAURANTS & LODGING-1.6%
Capstar Hotel Co. (a) 19,800 662,063
Extended Stay America, Inc. (a) 24,611 304,561
Florida Panthers Holdings, Inc. Cl.A (a) 26,800 453,925
QPQ Corp. warrants, expiring 9/22/98 (a) 16,400 0
Suburban Lodges of America, Inc. (a) 48,400 641,300
------------
2,061,849
RETAIL - GENERAL MERCHANDISE-3.3%
Circuit City Stores, Inc. -
CarMax Group (a) 76,900 591,169
Furniture Brands International, Inc. (a) 35,600 918,925
Movado Group, Inc. 25,900 556,850
Pacific Sunwear of California (a) 20,400 586,500
Tiffany & Co. (a) 25,800 999,750
U.S. Office Products Co. (a) 34,300 621,687
------------
4,274,881
MISCELLANEOUS-1.3%
Central Garden & Pet Co. (a) 12,100 372,075
Century Business Services, Inc. (a) 56,600 863,150
International Alliance Services, Inc.
warrants, expiring 12/30/99 (a) 61,100 360,001
PETsMART, Inc. (a) 20,100 149,494
------------
1,744,720
------------
21,481,644
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
HEALTH CARE-6.8%
BIOTECHNOLOGY-5.4%
Centocor, Inc. (a) 57,600 $ 2,304,000
Geltex Pharmaceuticals, Inc. (a) 72,000 1,890,000
Gensia Sicor, Inc. (a) 64,400 313,950
MedImmune, Inc. (a) 28,000 1,284,500
Neurex Corp. (a) 74,400 1,339,200
------------
7,131,650
DRUGS-0.2%
Corixa Corp. (a) 26,200 232,525
MEDICAL SERVICES-1.2%
AutoCyte, Inc. (a) 28,100 152,794
Mid Atlantic Medical Services, Inc. (a) 40,100 378,443
National Surgery Centers, Inc. (a) 37,850 927,325
Veterinary Centers of America, Inc. (a) 6,500 94,250
------------
1,552,812
------------
8,916,987
TECHNOLOGY-5.2%
COMMUNICATIONS EQUIPMENT-0.9%
Globecomm Systems, Inc. (a) 27,700 263,150
GST Telecommunications, Inc. (a) 27,100 304,875
Level One Communications, Inc. (a) 14,300 552,338
------------
1,120,363
COMPUTER HARDWARE-0.0%
Radius, Inc. (a) 151 57
COMPUTER SERVICES-1.4%
DBT Online, Inc. (a) 38,000 1,040,250
Princeton Video Image, Inc. (a) 16,100 128,800
Renaissance Worldwide, Inc. (a) 14,200 693,137
------------
1,862,187
COMPUTER SOFTWARE-1.8%
CDW Computer Centers, Inc. (a) 23,000 1,400,125
CheckFree Holdings Corp. (a) 27,800 688,050
QAD, Inc. (a) 21,500 314,437
------------
2,402,612
SEMI-CONDUCTOR COMPONENTS-0.7%
Applied Micro Circuits Corp. (a) 20,200 386,325
PMC-Sierra, Inc. (a) 16,300 554,200
------------
940,525
MISCELLANEOUS-0.4%
Excalibur Technologies Corp. (a) 1,200 12,750
Hadco Corp. (a) 11,200 475,650
------------
488,400
------------
6,814,144
TRANSPORTATION-4.7%
AUTO & RELATED-0.7%
Avis Rent A Car, Inc. (a) 25,300 906,056
RAILROAD-0.1%
Genesee & Wyoming, Inc. Cl.A (a) 5,400 114,750
SHIPPING-2.7%
Knightsbridge Tankers, Ltd. 25,800 719,175
OMI Corp. (a) 222,000 1,887,000
Teekay Shipping Corp. 30,800 910,525
------------
3,516,700
TRUCKING-1.1%
Consolidated Freightways Corp. (a) 94,600 1,401,263
MISCELLANEOUS-0.1%
Carey International, Inc. (a) 6,500 113,750
------------
6,052,519
8
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
CONSUMER MANUFACTURING-4.0%
AUTO & RELATED-2.3%
Budget Group, Inc. Cl.A (a) 44,200 $ 1,544,237
Miller Industries, Inc. (a) 55,400 605,938
Monaco Coach Corp. (a) 23,500 760,812
------------
2,910,987
TEXTILE PRODUCTS-1.3%
Novel Denim Holdings, Ltd. (a) 22,200 444,000
Tommy Hilfiger Corp. (a) 28,800 1,254,600
------------
1,698,600
MISCELLANEOUS-0.4%
Synetic, Inc. (a) 12,800 553,600
------------
5,163,187
ENERGY-2.9%
DOMESTIC PRODUCERS-0.7%
Valero Energy Corp. 31,100 981,594
OIL SERVICE-1.6%
Oceaneering International, Inc. (a) 36,800 591,100
Parker Drilling Co. (a) 95,400 1,109,025
Rowan Cos., Inc. (a) 12,300 324,413
------------
2,024,538
PIPELINES-0.6%
Southern Union Co. (a) 32,635 760,803
------------
3,766,935
FINANCE-2.2%
REAL ESTATE-2.2%
CCA Prison Realty Trust 11,400 456,000
Chelsea GCA Realty, Inc. 28,100 1,071,312
Glenborough Realty Trust, Inc. 22,900 727,075
Security Capital Group, Inc. Cl.B (a) 20,000 603,750
------------
2,858,137
CONSUMER STAPLES-2.0%
MISCELLANEOUS-2.0%
Mohawk Industries, Inc. (a) 109,200 2,634,450
BASIC INDUSTRIES-2.0%
CONTAINERS-0.5%
U.S. Can Corp. (a) 40,200 603,000
MINING & METALS-1.5%
Bethlehem Steel Corp. (a) 166,000 1,639,250
Royal Oak Mines, Ltd. (a) 235,200 338,100
------------
1,977,350
------------
2,580,350
CAPITAL GOODS-1.1%
ELECTRICAL EQUIPMENT-0.2%
Rofin Sinar Technologies, Inc. (a) 20,000 252,500
MACHINERY-0.9%
Comverse Technology, Inc. (a) 24,500 825,344
United Rentals, Inc. (a) 17,300 413,037
------------
1,238,381
------------
1,490,881
AEROSPACE & DEFENSE-1.1%
AEROSPACE-1.1%
Gulfstream Aerospace Corp. (a) 41,600 1,417,000
MULTI-INDUSTRY COMPANY-0.3%
Roadway Express, Inc. 15,700 343,438
Total United States Investments
(cost $56,806,505) 63,519,672
FOREIGN INVESTMENTS-43.0%
ARGENTINA-0.0%
Quilmes Industrial Quinsa, SA (ADS) 2,000 25,125
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
AUSTRALIA-1.6%
AAPC, Ltd. 150,000 $ 67,860
Brambles Industries, Ltd. 20,000 407,157
Broken Hill Proprietary Co., Ltd. 10,000 98,931
Cochlear, Ltd. (b) 3,000 11,104
ERG, Ltd. 230,000 209,679
GIO Australia Holding 80,000 214,957
Great Central Mines, Ltd. 15,000 20,656
Hoyts Cinemas, Ltd. (b) 105,000 215,917
Oil Search, Ltd. 87,000 165,365
Orogen Minerals, Ltd. (GDS) (b) 10,000 224,100
Spectrum Network, Ltd. 480,000 121,736
Suncorp-Metway, Ltd. (a) 74,330 203,798
Village Roadshow, Ltd. pfd. 30,000 74,029
WMC, Ltd. 15,121 53,399
------------
2,088,688
AUSTRIA-0.8%
Austria Mikro Systeme International AG 900 50,887
Austria Tabak AB (a) 5,155 246,530
Benckiser-Wasser-Technik AG 600 100,190
Die Erste (a) 5,610 289,748
KTM Motorradholdings AG 3,000 188,730
OMV AG 1,200 158,534
V.A. Technologies AG 200 28,426
------------
1,063,045
BRAZIL-0.6%
Companhia Paranaense de Energy (ADS) 33,000 396,000
Companhia Riograndense de Telecom (a) 13,534 16,672
Companhia Riograndense de Telecom pfd. (a) 380,000 394,177
------------
806,849
CANADA-0.7%
Boardwalk Equities, Inc. (a) 9,000 112,828
Canadian Fracmaster, Ltd. (a)(b) 57,100 372,626
Leitch Technology Corp. (a) 4,700 93,952
Nelvana, Ltd. (a)(b) 8,000 159,368
Royal Group Technologies, Ltd. (a)(b) 5,000 123,304
------------
862,078
CHILE-0.1%
Enersis, SA (ADR) 3,000 79,313
Santa Isabel, SA (ADR) 2,000 37,250
------------
116,563
DENMARK-0.8%
Carli Gry International AS (b) 7,965 466,657
Coloplast 1,500 120,328
Novo Nordisk AS 3,000 429,744
------------
1,016,729
FINLAND-1.3%
KCI Konecranes International Corp. (b) 6,000 205,518
Kesko 5,000 79,233
Nokia AB OY Corp. 11,000 860,653
Orion-Yhtymae OY Cl.B 16,000 483,149
OY Hartwall AB Cl.A 1,000 83,830
------------
1,712,383
FRANCE-2.2%
Accor 1,500 294,736
Alcatel Alsthom 1,400 185,444
Bouygues Offshore, SA (ADR) 9,000 171,563
Coflexip, SA (ADR) 6,000 285,000
Compagnie Generale de Geophysique, SA (ADR) (a) 20,000 395,000
Compagnie Generale des Eaux 2,030 294,030
Lafarge, SA 1,705 108,394
10
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Louis Dreyfus Citrus (b) 5,700 $ 170,878
Michelin Cl.B 3,000 159,587
Moulinex 11,000 277,612
S T Dupont (a)(b) 7,540 84,765
SEITA 7,000 260,032
Societe Nacionale Elf Aquitaine, SA 2,000 225,492
------------
2,912,533
GERMANY-1.6%
Apcoa Parking AG (b) 1,460 99,623
Bayer AG 3,000 112,506
BERU AG (a)(b) 20,000 376,658
Beta Systems Software AG (a)(b) 1,000 75,332
BUS Berzelius Umwelt Service AG 8,000 96,075
Deutsche Lufthansa AG (a) 5,000 90,071
DIS Deutscher Industrie Service AG (a) 10,000 436,705
ProSieben Media AG (a) 2,800 138,326
SGL Carbon AG (b) 4,000 502,211
Veba AG 2,000 137,999
------------
2,065,506
GREECE-0.5%
Hellenic Telecommunication Organization, SA 5,375 99,006
Petzetakis, SA 100,000 534,151
------------
633,157
HONG KONG-0.3%
Cheung Kong Holdings, Ltd. 24,000 122,528
Giordano Holdings 50,000 12,925
HSBC Holdings Plc 4,000 88,665
ITC Corporation, Ltd. 287,800 4,464
Swire Pacific, Ltd. 10,000 45,496
Television Broadcasting, Ltd. 21,000 59,441
------------
333,519
HUNGARY-0.3%
Matav RT (ADR) (a) 15,000 352,500
INDIA-0.1%
Gujarat Narmada Valley
Fertilizers Co., Ltd. (GDR) (c) 4,000 10,381
Shriram Industrial Enterprises, Ltd. 15,000 26,250
Videsh Sanchar Nigam, Ltd. (GDS) (a)(b) 12,000 138,000
------------
174,631
INDONESIA-0.2%
Great River International 427,000 10,923
Gulf Indonesia Resources, Ltd. (a) 11,800 230,100
PT Indosat (ADR) 4,000 69,500
------------
310,523
IRELAND-1.3%
Crean (James) Plc 55,000 140,967
Fyffes Plc 280,000 516,991
Irish Continental Group Plc 15,000 215,413
Irish Life Plc 100,000 643,205
Marlborough International Plc (a) 75,000 205,155
------------
1,721,731
ITALY-1.4%
Gildemeister Italiana SpA 60,000 224,097
Industrie Natuzzi SpA (ADR) 51,800 1,269,100
Mediaset SpA 40,000 213,252
Zucchini SpA 9,050 67,553
------------
1,774,002
JAPAN-9.1%
Aiful Corp (d) 3,000 231,587
Akita Bank 6,000 28,594
Asahi Bank 7,000 33,746
Asahi Diamond Industrial 6,852 36,001
Asatsu, Inc. 5,000 96,495
Bank of Tokyo, Ltd. 19,250 279,007
Canon, Inc. 4,000 97,046
Capcom Co. 200 3,293
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Credit Saison Co. (d) 24,015 $ 567,507
Dai Nippon Ink & Chemical, Inc. 10,000 28,988
Daibiru Corp. 4,000 32,454
Daiichi Kangyo Bank 21,000 158,968
Daito Trust Construction Co., Ltd. 5,000 42,930
Data Communication System 6,000 97,834
DDI Corp. 30 95,943
Doshisha Co. 600 3,190
Eiden Sakakiya Co. 5,000 22,450
Enplas Corp. 2,000 27,570
Enshu 5,000 9,846
Familymart Co. (d) 6,200 236,865
FCC Co., Ltd. 100 1,142
Fuji Soft ABC, Inc. (d) 6,280 210,240
Fujikura (d) 28,000 206,002
Fujimi, Inc. 2,040 107,825
Homac Corp. 2,000 12,619
Home Wide Corp. 4,000 15,439
Honda Motor Co. 4,000 145,254
Hoya Corp. (d) 6,000 163,529
Imagineer Co., Ltd. 1,400 15,991
INES Corp. 6,000 60,496
Isetan Co. 15,000 88,618
Ishihara Sangyo 12,000 18,243
Ishikawajima-Harima Heavy Industries 10,000 21,268
Japan Airport Terminal 12,200 91,296
Japan Industrial Land Development 5,200 16,384
Japan Tobacco, Inc. 20 136,117
Kaneshita Construction 7,000 44,553
Kawasaki Heavy Industries 21,000 56,077
Keyence Corp. 50 7,562
Kikuchi Co. 3,000 11,698
King Co. 10,000 17,093
Koa Fire & Marine 3,000 14,061
Kokuyo 3,000 51,516
Mabuchi Motor Co. 2,500 130,957
Matsuda Sangyo 3,000 21,268
Meitec Corp. (d) 14,800 465,160
Micronics Co. 5,500 145,136
Minebea Co. (d) 20,000 212,682
Mitsubishi Corp. 3,000 25,994
Mitsubishi Heavy Industries, Ltd. 35,000 149,705
Mitsubishi Trust and Bank 5,000 57,897
Mitsui Home Co. 4,000 25,364
N I C Corp. 9,000 61,678
Namco 1,400 41,024
Namura Shipbuilding 1,000 3,442
Nanno Construction 7,000 12,076
New Oji Paper Co., Ltd. 3,000 13,706
NGK Spark Plug Co. 9,000 60,827
Nichiei Co., Ltd. 1,200 126,664
Nichiha Corp. 12,900 101,615
Nichii Gakkan Co. 1,000 44,112
Nikon Corp. 10,000 107,917
Nintendo Corp., Ltd. 1,300 137,219
Nippon Broadcasting System (d) 4,000 209,531
Nippon Denwa Shisetsu 5,500 24,478
Nippon Kanzai Co. 240 3,592
Nippon Paper Industries Co. 12,000 53,974
Nippon System Development 4,500 108,113
Nippon Television Network Corp. 400 131,705
Nireco Corp. 8,000 42,221
Nitta Corp. 8,000 83,182
Nitto Kohki Co. 5,600 72,785
Noritsu Koki Co. (d) 9,000 320,441
Ohmoto Gumi, Co. 3,400 18,748
Oie Sangyo Co., Ltd. 4,400 19,375
Paris Miki, Inc. 8,380 120,139
Promise Co., Ltd. 70 3,683
PS Corp. 5,000 28,161
12
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Raito Kogyo 5,000 $ 31,115
Ricoh Elemex Co., Ltd. 3,000 21,268
Rohm Co. (d) 3,000 328,476
Sankyo Co., Ltd. (d) 12,000 312,879
Sankyo Engineering 3,000 12,170
Santen Pharmaceutical Co. (d) 25,420 334,395
Sanyo Electric Co. 6,000 17,724
Sanyo Engineering and Construction Co. 4,000 18,905
Sanyo Pax Co. 8,500 75,660
Sanyo Shinpan Finance Co., Ltd. 1,220 61,024
Sato Corp. (d) 13,000 241,670
Seven-Eleven Japan (d) 4,200 297,755
Shimano, Inc. 4,000 86,648
Shizuoka Bank 8,000 88,854
Sho Bond Corp. (d) 9,800 204,569
SMC Corp. (d) 4,000 359,197
Sodick Co. 22,000 74,518
Sumitomo Bank, Ltd. (d) 20,000 239,464
Sumitomo Metal Industries 56,000 89,106
Sumitomo Realty & Development Co., Ltd. 14,000 85,467
Taisho Pharmaceutical Co. 1,000 25,049
Takefuji Corp. (d) 5,800 294,226
TDK Corp. (d) 6,000 464,592
Toei Co. 7,000 29,775
Toho Bank 12,000 53,218
Toho Titanium Co. 10,000 98,464
Tokyo Broadcasting (d) 9,000 119,811
Tokyo Cathode Laboratory 5,400 68,058
Toso Co., Ltd. 6,500 30,721
Towa Corp. 800 20,039
Toyoda Gosei 7,000 25,199
Wesco, Inc. 1,616 6,619
Xebio Co. 800 9,579
Yamaichi Electronics Co., Ltd. 5,000 104,766
Yamanouchi Pharmaceutical Co., Ltd. 21,000 509,492
Yamato Transport 4,000 50,098
Yaskawa Electric Corp. 3,000 8,625
Yokogawa Electric 20,000 126,034
------------
11,853,137
LUXEMBOURG-0.9%
Millicom International Cellular, SA (a) 32,400 1,223,100
MALAYSIA-0.2%
AMMB Holdings Bhd 10,000 6,326
Arab Malaysian Finance Berhad 40,000 6,944
Hong Leong Bank Berhad 40,000 21,118
Lingkaran Trans Kota Holding (b) 40,000 19,025
Mancon Berhad 20,333 6,770
Metacorp Berhad 40,000 13,127
Pacific & Orient 50,000 19,857
Pernas International Hotels Bhd 80,000 18,644
RJ Reynolds Berhad 15,000 24,257
SAP Holdings Berhad 6,000 1,498
Sime Darby Berhad 50,000 51,130
Sriwani Holdings Bhd 40,000 9,893
Star Publications 10,000 10,131
Talam Corp. Berhad 50,000 9,810
UMW Holdings Bhd. 30,000 16,694
------------
235,224
MEXICO-0.3%
Grupo Elektra 150,000 232,462
Grupo Industrial Durango, SA (ADS) (a) 11,000 125,125
Industrias Campos Hermanos Cl.B (a) 20,000 77,369
------------
434,956
NETHERLANDS-2.4%
Aegon NV 3,000 285,825
AKZO Nobel NV 800 144,613
ASR Verzekeringsgroep NV 6,100 380,853
13
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Content Beheer NV (b) 9,000 $ 238,890
Elsevier NV 17,100 289,065
Fortis Amev NV 5,900 276,346
Fugro 10,000 302,245
IHC Caland NV 4,000 215,059
ING Groep NV 6,000 274,345
KLM Royal Dutch Airlines NV 2,000 69,264
Kon Ptt Nederland 2,000 86,314
Nutricia Verenigde Bedrigven (b) 4,800 152,053
Vedior 20,000 445,618
------------
3,160,490
NEW ZEALAND-0.1%
Restaurant Brands, Ltd. (a) 93,700 82,496
Tourism Holdings, Ltd. 50,000 27,880
Warehouse Group, Ltd. 28,000 72,641
------------
183,017
NORWAY-1.4%
Alvern ASA 34,600 77,375
Choice Hotels International, Inc. (a) 135,000 390,692
Frontline, Ltd. (a) 80,000 258,883
Hafslund ASA 4,000 17,627
Navia ASA 38,000 127,468
Sparebanken Nor 8,000 272,563
Tomra Systems AS 32,000 644,050
------------
1,788,658
PANAMA-0.2%
Banco Latinoamericano de Exportaciones,
SA (ADR) 6,000 257,625
PERU-0.3%
Banco Wiese (ADS) 15,000 73,125
Telefonica del Peru, SA (ADS) 14,000 274,750
------------
347,875
PHILIPPINES-0.0%
Alsons Cement 240,000 11,051
Asian Terminals, Inc. 193,333 8,093
International Container Terminal
Services, Inc. 285,000 21,209
------------
40,353
PORTUGAL-0.7%
Bpi Soc Gestora 6,000 184,147
Brisa-Auto Estradas de Portugal (a) 1,700 71,049
Electricidade de Portugal SA (a) 10,795 223,045
Portugal Telecom, SA 670 34,199
Telecel-Comunicacaoes Pesscasis, SA (a)(b) 3,420 438,129
------------
950,569
RUSSIA-0.4%
Sun Brewing, Ltd. (ADR) (a)(b) 30,000 450,000
SINGAPORE-0.2%
Avimo Group, Ltd. 85,000 102,129
City Developments 14,000 43,686
Lim Kah Ngam, Ltd. 30,000 8,662
Singapore Airlines, Ltd. 10,000 65,325
Singapore Land, Ltd. 20,000 38,262
United Overseas Bank 8,000 29,863
------------
287,927
SOUTH KOREA-0.4%
Samsung Electronics Co., Ltd. (GDR) (b) 10,912 151,349
bonus shares (GDR) (a)(b) 1,089 34,445
SK Telecom Co., Ltd. (ADR) 32,001 280,008
------------
465,802
SPAIN-2.0%
Aldeasa, SA 10,000 251,836
Catalana Occidente, SA 9,800 514,427
Construcciones Y Aux de Ferr 2,000 73,425
14
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Corporacion Mapfre Esp500 12,000 $ 318,434
Gas Y Electricidad 7,000 534,265
Hidroel Cantabrico 2,000 85,534
Iberdrola II, SA 15,000 226,555
Portland Valderriv 900 82,893
Repsol, SA 5,000 214,157
Telefonica de Espana 7,000 228,584
Viscofan Envolturas Celulosicas 3,345 94,150
------------
2,624,260
SWEDEN-1.9%
Astra AB Series A 5,001 91,560
Autoliv, Inc. (ADS) (b) 2,000 68,548
Dahl International AB (b) 13,000 206,754
Forenings Sparbanken 2,800 65,762
Kalmar Industries AB (b) 6,750 102,776
Netcom Systems AB (b) 9,000 208,048
Nordbanken Holding AB (a) 41,000 228,982
Scandic Hotels AB (b) 27,000 679,069
Skandia Foersaekrings AB 2,800 146,022
Skandinaviska Enskilda Banken 32,000 394,521
Swedish Match AB 80,000 260,384
------------
2,452,426
SWITZERLAND-1.1%
ABB AG (a) 50 63,454
Ciba Specialty Chemicals AG (a) 2,100 240,279
Nestle, SA 50 79,486
Novartis AG 140 239,098
Roche Holdings AG, Ltd. 35 362,427
Selecta Gruppe (a) 2,700 372,722
Tag Heuer International, SA (ADS) (a) 11,600 110,200
------------
1,467,666
THAILAND-0.1%
CMIC Finance & Security Public Co. (c) 110,000 -0-
Thai Engine Manufacturing 39,300 64,817
------------
64,817
UNITED KINGDOM-7.5%
Amvescap Plc 20,000 183,167
Barclays Plc 10,000 301,196
Bass Plc 10,000 158,353
British Airways Plc 4,000 33,630
Carlton Communications Plc 42,100 290,721
Carpetright Plc 5,000 37,956
Compass Group Plc 90,000 1,216,540
De La Rue Plc 5,000 30,283
Diageo Plc (a) 60,000 537,256
Dixons Group Plc 25,000 200,594
EMI Group Plc 15,000 110,561
Energis Plc (a) 82,500 484,853
Filtronic Comtek Plc 90,000 784,580
Harvey Nichols Group Plc (b) 20,000 79,013
Holliday Chemical Holdings Plc 100,000 399,963
House of Fraser Plc 30,000 86,686
Imperial Tobacco Group Plc 37,000 269,999
Johnson Matthey Plc 10,000 84,074
LucasVarity Plc 30,000 101,378
M.S. International Plc (b) 225,000 67,953
McBride Plc 30,000 88,155
Mirror Group Plc 15,000 44,445
Misys Plc 10,000 381,189
National Grid Group Plc 50,000 235,896
National Power Plc 30,000 326,663
Norwich Union Plc (a) 10,000 71,993
Powerscreen International Plc 40,000 169,127
Reed International Plc 15,000 154,516
Rentokil Initial Plc 42,000 196,610
15
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Shandwick International Plc 10,000 $ 8,979
Siebe Plc 7,000 119,417
Smith (WH) Group Plc 25,000 181,820
SmithKline Beecham Plc 10,000 127,335
Thistle Hotels Plc (b) 37,600 105,577
Tomkins Plc 28,000 150,843
Virgin Express Holdings Plc (ADS) (a) 32,000 616,000
Vodafone Group Plc 50,000 384,046
WPP Group Plc 70,000 302,829
Zeneca Group Plc 16,000 639,940
-------------
9,764,136
Total Foreign Investments
(cost $54,135,269) 56,021,600
Total Common Stocks & Other Investments
(cost $110,941,774) 119,541,272
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-7.7%
COMMERCIAL PAPER-7.0%
American Express Co.
5.53%, 2/09/98 $1,000 $ 998,771
Ford Motor Credit Corp.
5.51%, 2/03/98 3,000 2,999,082
5.57%, 2/04/98 1,800 1,799,164
General Electric Capital Corp.
5.40%, 2/02/98 1,600 1,599,760
Prudential Funding Corp.
5.50%, 2/10/98 1,700 1,697,663
-------------
9,094,440
TIME DEPOSIT-0.7%
State Street Cayman Islands
5.25%, 2/02/98 1,000 1,000,000
Total Short-Term Investments
(amortized cost $10,094,440) 10,094,440
TOTAL INVESTMENTS -99.5%
(cost $121,036,214) 129,635,712
Other assets less liabilities-0.5% 616,059
NET ASSETS-100% $130,251,771
(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 January 31, 1998, these
securities amounted to $6,227,690 representing 4.8% of net assets.
(c) Illiquid security, valued at fair market value (see Note A).
(d) Securities with an aggregate market value of $6,020,578 have been
segregated to collateralize foreign exchange currency contracts.
Glossary of Terms:
ADR - American Depositary Receipt
ADS - American Depositary Shares
GDR - Global Depositary Receipt
GDS - Global Depositary Shares
pfd. - Preferred Stock
See notes to financial statements.
16
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $121,036,214) $129,635,712
Cash, at value (cost $503,806) 502,489
Receivable for investment securities and foreign currency sold 1,112,872
Unrealized appreciation of forward exchange currency contracts 322,622
Receivable for capital stock sold 158,979
Dividends and interest receivable 94,504
Foreign taxes receivable 29,978
Total assets 131,857,156
LIABILITIES
Unclaimed dividends 634,139
Payable for investment securities and foreign
currency purchased 494,789
Management fee payable 108,285
Distribution fee payable 57,482
Payable for capital stock redeemed 38,191
Accrued expenses and other liabilities 272,499
Total liabilities 1,605,385
NET ASSETS $130,251,771
COMPOSITION OF NET ASSETS
Capital stock, at par $ 115,665
Additional paid-in capital 118,758,096
Accumulated net investment loss (1,228,777)
Accumulated net realized gain on investments and foreign
currency transactions 3,686,277
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 8,920,510
$130,251,771
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($85,877,041/
7,426,724 shares of capital stock issued and outstanding) $11.56
Sales charge--4.25% of public offering price .51
Maximum offering price $12.07
CLASS B SHARES
Net asset value and offering price per share ($35,745,385/
3,338,231 shares of capital stock issued and outstanding) $10.71
CLASS C SHARES
Net asset value and offering price per share ($8,284,316/
771,827 shares of capital stock issued and outstanding) $10.73
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($345,029 / 29,734 shares of capital stock issued and
outstanding) $11.60
See notes to financial statements.
17
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $39,162) $ 403,908
Interest 228,234 $ 632,142
EXPENSES
Management fee 659,753
Distribution fee - Class A 129,877
Distribution fee - Class B 180,045
Distribution fee - Class C 44,325
Transfer agency 197,223
Custodian 160,391
Audit and legal 54,392
Administrative 45,080
Registration 36,332
Printing 31,638
Directors' fees 19,000
Miscellaneous 5,311
Total expenses 1,563,367
Less: expense offset arrangement (see Note B) (16,902)
Net expenses 1,546,465
Net investment loss (914,323)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investment transactions 5,947,121
Net realized gain on foreign currency transactions 53,627
Net change in unrealized appreciation of:
Investments (8,131,241)
Foreign currency denominated assets and liabilities (441,494)
Net loss on investments and foreign currency transactions (2,571,987)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(3,486,310)
See notes to financial statements.
18
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 1998 JULY 31,
(UNAUDITED) 1997
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (914,323) $ (1,513,106)
Net realized gain on investments and foreign
currency transactions 6,000,748 10,850,949
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities (8,572,735) 15,515,927
Net increase (decrease) in net assets from
operations (3,486,310) 24,853,770
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (6,916,368) (9,231,726)
Class B (3,117,971) (2,729,321)
Class C (796,537) (783,298)
Advisor Class (28,565) (38,258)
CAPITAL STOCK TRANSACTIONS
Net increase 18,382,999 27,153,600
Total increase 4,037,248 39,224,767
NET ASSETS
Beginning of year 126,214,523 86,989,756
End of period $130,251,771 $126,214,523
See notes to financial statements.
19
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1998 (UNAUDITED) ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Small Cap Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end 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 financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair value of such securities.
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 earned or accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt 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. The Fund does not isolate the effect of
fluctuations in foreign currency exchange rates when determining the gain or
loss upon the sale of equity securities. Net currency gains and losses from
valuing foreign currency denominated assets and liabilities at period end
exchange rates are reflected as a component of net unrealized appreciation of
investments and foreign currency denominated assets and liabilities.
3. 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 any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
20
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
4. 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 trade date the
securities are purchased or sold. Investment gains and losses are determined on
the identified cost basis.
5. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and Advisor Class shares (Advisor Class shares have no
distribution fees).
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with 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.
NOTE B: MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of 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. Such fee is accrued daily and
paid monthly.
Pursuant to the management agreement, the Fund paid $45,080 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, 1998.
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 $127,232 for the six months ended January 31, 1998.
In addition, for the six months ended January 31, 1998, the Fund's expenses
were reduced by $16,902 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., (the "Distributor"), a wholly-owned
subsidiary of the Manager, serves as the Distributor of the Fund's shares. The
Distributor received front-end sales charges of $4,315 from the sales of Class
A shares and $72,697 and $957 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B and Class C shares, respectively, for
the six months ended January 31, 1998.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 1998 amounted to $298,937, none of which was paid to Donaldson,
Lufkin & Jenrette Securities Corp., an affiliate of the Manager.
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 $2,373,479 and $610,917 for Class B and
Class C shares, respectively; such costs may be recovered from the Fund
21
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL SMALL CAP 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
and U.S. government securities) aggregated $81,458,729 and $76,506,568,
respectively, for the six months ended January 31, 1998. There were no
purchases or sales of U.S. government and government agency obligations for the
six months ended January 31, 1998.
At January 31, 1998, the cost of investments for federal income tax purposes
was $121,659,606. Accordingly, gross unrealized appreciation of investments was
$20,970,948 and gross unrealized depreciation of investments was $12,994,842,
resulting in net unrealized appreciation of $7,976,106 (excluding foreign
currency transactions).
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward foreign exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on 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 foreign 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 other 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 January 31, 1998, the Fund had outstanding forward foreign exchange currency
contracts to buy and 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 BUY CONTRACTS
Japanese Yen, settling 2/27/98 152,000 $1,173,473 $1,201,883 $ 28,410
FOREIGN CURRENCY SALE CONTRACTS
Japanese Yen, settling 2/27/98 152,000 1,290,761 1,201,883 88,878
Japanese Yen, settling 3/9/98 250,000 2,065,180 1,979,643 85,537
Japanese Yen, settling 4/13/98 500,000 4,099,428 3,979,631 119,797
----------
$322,622
22
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
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JAN. 31,1998 JULY 31, JAN. 31,1998 JULY 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------- --------------- -------------
CLASS A
Shares sold 1,186,090 993,161 $ 14,712,100 $ 11,718,840
Shares issued in
reinvestment of
distributions 491,288 632,521 5,620,291 6,982,712
Shares converted
from Class B 53,243 62,837 646,059 741,976
Shares redeemed (925,459) (975,383) (11,192,563) (11,573,247)
Net increase 805,162 713,136 $ 9,785,887 $ 7,870,281
CLASS B
Shares sold 1,212,897 2,096,355 $ 14,064,441 $ 23,394,278
Shares issued in
reinvestment of
distributions 257,230 179,345 2,724,757 1,859,822
Shares converted
to Class A (56,077) (65,905) (646,059) (741,976)
Shares redeemed (730,802) (846,665) (8,250,402) (9,385,983)
Net increase 683,248 1,363,130 $ 7,892,737 $ 15,126,141
CLASS C
Shares sold 336,404 781,046 $ 3,864,085 $ 8,633,201
Shares issued in
reinvestment of
distributions 69,786 37,793 741,195 392,675
Shares redeemed (357,582) (468,473) (3,950,268) (5,183,229)
Net increase 48,608 350,366 $ 655,012 $ 3,842,647
OCT. 2,1996(A) OCT. 2,1996(A)
TO TO
JULY 31,1997 JULY 31,1997
------------ --------------
ADVISOR CLASS
Shares sold 3,505 32,509 $ 44,210 $ 401,185
Shares issued in
reinvestment of
distributions 2,093 2,983 24,004 32,937
Shares redeemed (1,721) (9,635) (18,851) (119,591)
Net increase 3,877 25,857 $ 49,363 $ 314,531
(a) Commencement of distribution.
23
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 JULY 31, TO YEAR ENDED
1998 ------------------------------------- JULY 31, SEP. 30,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
-------------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.87 $11.61 $10.38 $11.08 $11.24 $9.33
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.07)(b) (.15)(b) (.14)(b) (.09) (.15)(b) (.15)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.25) 2.97 1.90 1.50 (.01) 2.49
Net increase (decrease) in net asset
value from operations (.32) 2.82 1.76 1.41 (.16) 2.34
LESS: DISTRIBUTIONS
Distributions from net realized gains (.99) (1.56) (.53) (1.99) -0- (.43)
Tax return of capital -0- -0- -0- (.12) -0- -0-
Net asset value, end of period $11.56 $12.87 $11.61 $10.38 $11.08 $11.24
TOTAL RETURN
Total investment return based on net
asset value (c) (2.41)% 26.47% 17.46% 16.62% (1.42)% 25.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $85,877 $85,217 $68,623 $60,057 $61,372 $65,713
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.12%(d)(e) 2.41%(e) 2.51% 2.54%(f) 2.42%(d) 2.53%
Net investment loss (1.15)%(d) (1.25)% (1.22)% (1.17)% (1.26)%(d) (1.13)%
Portfolio turnover rate 62% 129% 139% 128% 78% 97%
Average commission rate (g) $.0401 $.0364 -- -- -- --
</TABLE>
See footnote summary on page 27.
24
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 JULY 31, TO YEAR ENDED
1998 ------------------------------------- JULY 31, SEP. 30,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
-------------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.03 $11.03 $9.95 $10.78 $11.00 $9.20
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.11)(b) (.21)(b) (.20)(b) (.12) (.17)(b) (.15)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.22) 2.77 1.81 1.40 (.05) 2.38
Net increase (decrease) in net asset
value from operations (.33) 2.56 1.61 1.28 (.22) 2.23
LESS: DISTRIBUTIONS
Distributions from net realized gains (.99) (1.56) (.53) (1.99) -0- (.43)
Tax return of capital -0- -0- -0- (.12) -0- -0-
Net asset value, end of period $10.71 $12.03 $11.03 $9.95 $10.78 $11.00
TOTAL RETURN
Total investment return based on net
asset value (c) (2.66)% 25.42% 16.69% 15.77% (2.00)% 24.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $35,745 $31,946 $14,247 $5,164 $3,889 $1,150
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.82%(d)(e) 3.11%(e) 3.21% 3.20%(f) 3.15%(d) 3.26%
Net investment loss (1.84)%(d) (1.92)% (1.88)% (1.92)% (1.93)%(d) (1.85)%
Portfolio turnover rate 62% 129% 139% 128% 78% 97%
Average commission rate (g) $.0401 $.0364 -- -- -- --
</TABLE>
See footnote summary on page 27.
25
FINANCIAL HIGHLIGHTS (CONTINUED) 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(H)
JANUARY 31, YEAR ENDED JULY 31, TO TO
1998 ------------------------------------- JULY 31, SEP. 30,
(UNAUDITED) 1997 1996 1995 1994(A) 1993
-------------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.05 $11.05 $9.96 $10.79 $11.00 $ 9.86
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.11)(b) (.22)(b) (.20)(b) (.17) (.17)(b) (.05)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.22) 2.78 1.82 1.45 (.04) 1.19
Net increase (decrease) in net asset
value from operations (.33) 2.56 1.62 1.28 (.21) 1.14
LESS: DISTRIBUTIONS
Distributions from net realized gains (.99) (1.56) (.53) (1.99) -0- -0-
Tax return of capital -0- -0- -0- (.12) -0- -0-
Net asset value, end of period $10.73 $12.05 $11.05 $ 9.96 $10.79 $11.00
TOTAL RETURN
Total investment return based on net
asset value (c) (2.65)% 25.37% 16.77% 15.75% (1.91)% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,284 $8,718 $4,119 $1,407 $1,330 $261
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.80%(d)(e) 3.10%(e) 3.19% 3.25%(f) 3.13%(d) 3.75%(d)
Net investment loss (1.84)%(d) (1.93)% (1.85)% (2.10)% (1.92)%(d) (2.51)%(d)
Portfolio turnover rate 62% 129% 139% 128% 78% 97%
Average commission rate (g) $.0401 $.0364 -- -- -- --
</TABLE>
See footnote summary on page 27.
26
ALLIANCE GLOBAL SMALL CAP FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
----------------------
SIX MONTHS OCTOBER 2,
ENDED 1996(H)
JANUARY 31, TO
1998 JULY 31,
(UNAUDITED) 1997
----------- ---------
Net asset value, beginning of period $12.89 $12.56
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (.05) (.08)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (.25) 1.97
Net increase (decrease) in net asset
value from operations (.30) 1.89
LESS: DISTRIBUTIONS
Distributions from net realized gains (.99) (1.56)
Net asset value, end of period $11.60 $12.89
TOTAL RETURN
Total investment return based on net asset value (c) (2.24)% 17.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $345 $333
Ratios to average net assets of:
Expenses, net of waivers/reimbursements (d) (e) 1.82% 2.05%
Net investment loss (d) (.85)% (.84)%
Portfolio turnover rate 62% 129%
Average commisson rate $.0401 $.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 periods of less than one year is
not annualized.
(d) Annualized.
(e) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the six months ended January 31, 1998 and the year ended
July 31, 1997, the ratios of expenses net of waivers/reimbursements were 2.11%
and 2.38% for Class A shares, 2.81% and 3.08% for Class B shares, 2.79% and
3.08% for Class C shares and 1.81% and 2.04% for Advisor Class shares,
respectively.
(f) 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.
(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 distribution.
27
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.
28
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 Environment 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 Greater China '97 Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage 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
29
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.
GSCSR
