ALLIANCE GLOBAL STRATEGIC INCOME TRUST
500 Plaza Drive, Secaucus, NJ 07094, (201) 319-4000
ANNUAL REPORT
OCTOBER 31, 1997
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
December 1, 1997
Dear Shareholder:
We are pleased to provide you with market activity and investment performance
for Alliance Global Strategic Income Trust for the annual period ended October
31, 1997.
Global bond markets posted solid returns over the past six months. Lower global
bond yields and a convergence in spreads in European and Dollar Bloc markets
pushed bond prices higher and helped non-core markets to outperform core
markets. Data released indicating a slowing U.S. economy, together with a
favorable U.S. budget deficit, fueled a rally in U.S. Treasuries. In October,
financial market turmoil, which started in Southeast Asia, created a ripple
effect that spread to other global bond markets and caused a spike in
volatility. Rate hikes in Europe, budgetary problems in Italy, and potential
European Monetary Union (EMU) participation by the U.K., also contributed to
increased volatility.
INVESTMENT RESULTS
We are pleased to report that Alliance Global Strategic Income Trust posted
solid returns over the most recent period. For the six months ended October 31,
1997, Class A shares returned 8.21% on a net asset value (NAV) basis. This
compares with 7.07% for the unmanaged Lehman Brothers Aggregate Bond Index and
6.52% for the Lipper Average of Multi-Sector Income Funds, which reflects the
performance of 79 funds. The Lipper peer group has generally similar investment
objectives to Global Strategic Income Trust although investment policies for
the various funds may differ significantly. We are pleased to report that for
the trailing 12 months, Class A shares achieved a total return of 16.83%, which
compares favorably with returns of both the Lipper benchmark and the Lehman
Aggregate benchmark, which returned 9.83% and 8.89%, respectively. The Fund's
outperformance of its benchmarks can be attributed to the overweight positions
in both emerging markets and high yield securities early in the period and
subsequent reduction of those positions as volatility increased.
INVESTMENT RESULTS*
Period Ended October 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
Class A 8.21% 16.83%
Class B 7.89% 16.12%
Class C 7.89% 16.12%
LIPPER AVERAGE OF MULTI-SECTOR INCOME FUNDS 6.52% 9.83%
LEHMAN BROTHERS AGGREGATE BOND INDEX 7.07% 8.89%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF
OCTOBER 31, 1997. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE UNMANAGED LEHMAN BROTHERS AGGREGATE BOND INDEX IS COMPOSED OF THE
MORTGAGE-BACKED SECURITIES INDEX, THE ASSET-BACKED SECURITIES INDEX AND THE
GOVERNMENT/CORPORATE BOND INDEX. THE UNMANAGED LIPPER MULTI-SECTOR INCOME FUNDS
AVERAGE REFLECTS THE PERFORMANCE OF 79 FUNDS. BOTH BENCHMARKS 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 5.
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ALLIANCE GLOBAL STRATEGIC INCOME TRUST
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As of October 31, 1997, the Fund's total investments based on issuing country
were distributed as follows:
PORTFOLIO DISTRIBUTION BY COUNTRY
COUNTRY PORTFOLIO %
- ------- ------------
United States 20.79%
Italy 8.58%
United Kingdom 8.12%
Sweden 8.09%
Germany 7.98%
Argentina 6.62%
New Zealand 5.67%
Poland 5.37%
Spain 5.24%
Canada 3.78%
Russia 3.49%
Dominican Republic 2.75%
Denmark 2.74%
Australia 1.73%
Ecuador 1.47%
Qatar 1.33%
Brazil 1.32%
Norway 1.22%
Mexico 1.19%
Greece 1.02%
Belgium 0.83%
South Africa 0.67%
ECONOMIC REVIEW
Throughout the second quarter, economic growth and inflation were well
contained worldwide. U.S. Gross Domestic Product (GDP) growth slowed from the
4.9% robust pace of the first quarter to 3.3% in the second quarter. Weakness
in consumer spending was the catalyst, as retail and auto sales declined, and
housing activity slowed.
The economy continued at a healthy pace during the third quarter. Although U.S.
growth slowed from its first half level, the economy remained strong, led by
strength in the labor market. In October, the unemployment rate dropped to
4.7%, the lowest level in 24 years, as the economy added a larger-than-expected
284,000 jobs. GDP growth for the third quarter was 3.5%.
During the period, inflation remained well-behaved with consumer prices
advancing 2.2% between October 1996 and October 1997. Wholesale inflation, as
measured by the Producer Price Index (PPI), fell for an unprecedented seven
months in a row before finally showing an increase in the past three months.
Overall, producer prices are down 0.2% on an annual basis through October. The
Federal Reserve made no change to monetary policy during the period despite
growth remaining above trend levels. Improving inflation fundamentals, a strong
dollar, and currency devaluations in Southeast Asia, argued against an increase
in official U.S. interest rates.
In Japan, economic problems continued to prevail, and the latest government
plan offered little help for the ailing Japanese economy. The April consumption
tax hike continues to negatively affect consumer spending as evidenced by a
weak Tankan report on business confidence. Growth prospects in Japan have been
further jeopardized by over-reliance on an increase in exports to the Southeast
and North Asia region. With the recent economic and financial crisis in these
regions, Asian GDP growth will slow further, thus negatively impacting Japanese
growth rates. More recently, the Japanese growth problems have spilled over
into a financial sector crisis as highlighted by the fall of Yamaichi
Securities, previously the fourth largest securities firm in Japan.
In Canada, strong growth and low budget deficits, together with stable U.S.
monetary policy, allowed Canada to delay interest rate hikes. In Australia and
New Zealand, high unemployment, lower Asian demand for their exports, and good
inflation performance, set the stage for the Reserve Banks of Australia and New
Zealand to lower interest rates.
Stronger growth, and increasing import price inflation in Germany, set the tone
for European markets. The Bundesbank's continued concern about inflation
resulted in the Bundesbank's larger-than-expected rate hike in October. The
Bundesbank raised interest rates 30 basis points, indicating that it was
necessary to move core European official rates in-line with what is expected to
be the necessary European average rate for EMU. This increase led to subsequent
rate increases throughout the core European countries of France, Denmark and
the Netherlands.
2
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
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INVESTMENT OUTLOOK
In the U.S., recent slowing in employment gains and soft retail sales suggest
slower growth towards year-end and early 1998. The currency devaluations and
economic slowing in Southeast Asia will also temper U.S. growth. We anticipate
3.5% GDP growth for 1997. We expect interest rates to stabilize at somewhat
higher levels and to settle back into our anticipated 5.75% - 6.75% range on
the U.S. 30-year bond. The healthy U.S. economy will continue to cycle gently
between stronger and weaker periods of growth. Given the prolonged period of
strong capacity utilization and employment gains, and the difficulty of
forecasting U.S. inflation in an increasingly global economy, there is a small
but measurable risk that the Federal Reserve will raise interest rates as a
precautionary measure. The U.S. dollar should appreciate against the yen, but
remain range bound against European currencies.
Globally, we do not expect any of the world's three major central banks--the
U.S. Federal Reserve, the Bank of Japan or the German Bundesbank--to increase
rates again before year-end as they assess the impact of the Asian crisis on
future growth. Thus, global government bonds will generate positive returns
through year-end and early 1998.
In Europe, we continue to forecast a timely start to European Monetary Union,
with broad membership including Italy and Spain. Accordingly, we expect that
stronger growth prospects will be balanced by tighter monetary policy, where
necessary, and fiscal restraint will prevail in most countries. The Bundesbank
has started the process of official rate convergence in Europe. In Australia
and New Zealand, further interest rate cuts are expected as sluggish domestic
demand and weak trade partners (Japan and Southeast Asia) will delay a full
economic recovery. We expect the Bank of Canada to raise interest rates before
year-end to better reflect underlying economic fundamentals.
In the developing markets, we believe that commitment to economic integration
remains high and the global environment of relatively stable growth and
inflation will support the integration process. Nonetheless, in the period
ahead, we believe growth and inflation prospects will diverge. Latin America,
Eastern Europe and Russia will generally enhance global growth as their
economic and inflation trends improve. We anticipate that much of Southeast
Asia will detract from global growth, as their economies slow and inflation
increases. Country selection will remain critical in the emerging markets.
The picture in Latin America continues to be one of growth, albeit slower than
in past years, and low inflation. The Mexican economy continues to perform
strongly and attention will focus on the 1998 budget. Although the Mexican peso
fell victim to the currency crisis prevailing in Southeast Asia, economic
fundamentals remain strong. We continue to believe that Mexico will grow 5% -
6% annually through 2000. Despite excellent fundamentals, Argentina will
continue to be affected by the spillover from the Southeast Asian crisis.
Although there is no question about the government's resolve to protect the
currency, Argentina is vulnerable to investor concerns about a devaluation
and/or loss in liquidity, due to the fixed exchange rate mechanism. Long-term,
we remain very positive on Argentina's economic prospects.
In Russia, the economy appears to be expanding. GDP in August showed a 0.7%
increase over levels in August 1996. Industrial production shows a similar
pattern, increasing 3.0% between August 1996 and August 1997 following a 3.4%
increase between July 1996 and July 1997. The recently completed restructuring
of Russia's London Club debt should also support continued gains in the prices
of Russian bonds. However, a recent downturn in revenue generation, the
Achilles heel of the Russian reform program, threatens the excellent reform
momentum and bears close scrutiny.
We continue to have a favorable outlook for the high yield market. The strong
U.S. economy will provide support for this market sector, and as interest rates
remain in a trading range between 5.75% - 6.75%, investor demand for higher
yields should remain strong. However, as the economy begins to slow, security
selection within the high yield sector will take on added importance. We will
continue to review each security using a fundamental, bottom-up approach.
3
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
Thank you for your continued interest and investment in Alliance Global
Strategic Income Trust. We look forward to reporting to you again on market
activity and the Fund's investment results in coming periods.
Sincerely,
John D. Carifa
Chairman
Douglas Peebles
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.
4
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
Alliance Global Strategic Income Trust seeks to provide high current monthly
income and, secondarily, capital appreciation. The Trust invests in a wide
variety of fixed income markets including U.S. government and agency
securities, U.S. corporate securities, U.S. dollar-denominated government bonds
of emerging countries and non-U.S. dollar-denominated bonds of developed and
emerging markets.
INVESTMENT RESULTS
_______________________________________________________________________________
TOTAL RETURN AS OF OCTOBER 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 16.83% 11.88%
Since Inception* 18.99% 16.20%
SEC Yield** 5.25%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 16.12% 13.12%
Since Inception* 19.39% 18.29%
SEC Yield** 4.71%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 16.12% 15.12%
Since Inception* 19.40% 19.40%
SEC Yield** 4.68%
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.
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: 1/9/96, Class A; 3/25/96, Class B and C.
** Yields are for the 30 day period ended October 31, 1997.
5
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
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ALLIANCE GLOBAL STRATEGIC INCOME TRUST
GROWTH OF A $10,000 INVESTMENT
1/31/96* TO 10/31/97
GLOBAL STRATEGIC INCOME TRUST CLASS A: $12,512
LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE: $11,729
LEHMAN BROTHERS AGGREGATE BOND INDEX: $11,124
$13,000
$12,000
$11,000
$10,000
$9,000
1/31/96 10/31/96 1/31/97 10/31/97
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Global Strategic Income Trust Class A shares (from 1/31/96 to
10/31/97) as compared to the performance of an appropriate broad-based index.
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 and Class C shares will
vary from the results shown above due to differences in expenses charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Lehman Brothers Aggregate Bond Index is composed of the
Mortgage-Backed Securities Index, the Asset-Backed Securities Index and the
Government/Corporate Bond Index.
The unmanaged Lipper Multi-Sector Income Funds Average reflects performance of
91 funds. These funds have generally similar investment objectives to Alliance
Global Strategic Income Trust, although the investment policies of some funds
included in the average may vary.
When comparing Alliance GlobalStrategic Income Trust 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 Strategic Income Trust
Lehman Brothers Aggregate Bond Index
Lipper Multi-Sector Income Funds Average
* Month-end nearest to Fund's Class A share inception date of 1/9/96.
6
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
ARGENTINA-6.5%
CORPORATE DEBT OBLIGATIONS-4.3%
Bridas Corp.
12.50%, 6/10/03 (a) ARS 500 $ 600,440
Perez Companc, SA
8.13%, 7/15/07 (a) 1,000 935,000
------------
1,535,440
GOVERNMENT OBLIGATION-2.2%
Republic of Argentina
Pensioner-Bocon Series 1 FRN
3.24%, 4/01/07 (b) 1,238 807,638
Total Argentinian Securities
(cost $2,575,235) 2,343,078
AUSTRALIA-1.7%
GOVERNMENT OBLIGATION-1.7%
Republic of Australia
9.75%, 3/15/02 (b)
(cost $635,823) AU$ 750 611,828
BELGIUM-0.8%
CORPORATE DEBT OBLIGATION-0.8%
ITT Promedia
9.13%, 9/15/07 (a)(b)
(cost $282,087) DEM 500 294,288
BRAZIL-1.3%
CORPORATE DEBT OBLIGATION-1.3%
Trikem, SA
10.63%, 07/24/07 (a)(b)
(cost $499,641) US$ 500 468,750
CANADA-3.7%
CORPORATE DEBT OBLIGATIONS-3.7%
Clearnet Communications
11.75%, 8/13/07 (b)(c) CA$ 1,500 662,681
Microcell Telecommunications
11.13%, 10/15/07 (a)(c) 1,700 675,633
Total Canadian Securities
(cost $1,376,041) 1,338,314
DENMARK-2.7%
GOVERNMENT OBLIGATION-2.7%
Kingdom of Denmark
7.00%, 11/15/07 (b)
(cost $944,395) DKK 6,000 970,500
DOMINICAN REPUBLIC-2.7%
CORPORATE DEBT OBLIGATION-2.7%
Tricom, SA
11.38%, 9/01/04 (a)
(cost $1,040,000) US$ 1,000 975,000
ECUADOR-1.4%
CORPORATE DEBT OBLIGATION-1.4%
Conecel Holdings, Ltd.
14.00%, 10/1/00 (a)
(cost $517,500) US$ 500 520,000
GERMANY-7.8%
CORPORATE DEBT OBLIGATION-3.2%
Exide Holding Europe, SA
9.13%, 4/15/04 (a) DEM 2,000 1,165,555
GOVERNMENT OBLIGATION-4.6%
Republic of Germany
6.00%, 7/04/07 (b) 2,780 1,662,035
Total German Securities
(cost $2,815,671) 2,827,590
GREECE-1.0%
CORPORATE DEBT OBLIGATION-1.0%
Merrill Lynch & Co.
9.38%, 2/18/99 (b)
(cost $368,114) GRD 100,000 361,037
ITALY-8.4%
GOVERNMENT OBLIGATIONS-8.4%
Republic of Italy
6.25%, 3/01/02 (b) ITL 2,000,000 1,205,641
6.25%, 5/15/02 (b) 1,450,000 875,460
8.25%, 7/01/01 (b) 1,500,000 958,176
Total Italian Securities
(cost $2,918,292) 3,039,277
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
MEXICO-1.2%
GOVERNMENT OBLIGATIONS-1.2%
Mexican Treasury Bills
20.30%, 7/02/98 (b)(d) MXP 1,667 $ 172,028
20.45%, 7/02/98 (b)(d) 2,403 247,855
(cost $458,451) 419,883
NEW ZEALAND-5.6%
GOVERNMENT OBLIGATIONS- 5.6%
Government of New Zealand
8.00%, 11/15/06 (b) NZD 900 614,462
10.00%, 3/15/02 (b) 2,000 1,395,359
Total New Zealand Securities
(cost $2,132,650) 2,009,821
NORWAY-1.2%
GOVERNMENT OBLIGATION-1.2%
Kingdom of Norway
5.75%, 11/30/04 (b)
(cost $457,109) NOK 3,000 432,126
POLAND-5.3%
GOVERNMENT OBLIGATIONS-5.3%
Government of Poland
12.00%, 6/12/02 PLN 4,000 833,859
Republic of Poland PDI
4.00%, 10/27/14 (b)(e) US$ 1,300 1,067,625
Total Polish Securities
(cost $2,018,865) 1,901,484
QATAR-1.3%
CORPORATE DEBT OBLIGATION-1.3%
Ras Laffan Liquid Natural Gas
8.29%, 3/15/14 (a)(b)
(cost $462,945) US$ 450 472,840
RUSSIA-3.4%
GOVERNMENT DEBT OBLIGATION-1.6%
Russia Principal Loan-WI FRN
12/15/20 (a)(f) US$ 1,000 590,000
SOVEREIGN DEBT RELATED-1.8%
Credit Suisse First Boston Corp.
Indexed Note Linked Russian
Federation GKO
12.50%, 11/03/97 (d)(g) US$ 650 646,750
Total Russian Securities
(cost $1,374,878) 1,236,750
SOUTH AFRICA-0.7%
CORPORATE DEBT OBLIGATION-0.7%
Development Bank of South Africa
18.59%, 12/31/27 (b)(d)
(cost $286,758) ZAR 50,000 238,812
SPAIN-5.1%
GOVERNMENT OBLIGATION-5.1%
Government of Spain
7.40%, 7/30/99 (b)
(cost $1,828,789) ESP 260,000 1,856,681
SWEDEN-7.9%
GOVERNMENT OBLIGATIONS-7.9%
Government of Sweden
5.50%, 4/12/02 (b) SEK 14,500 1,900,656
8.00%, 8/15/07 (b) 6,500 964,813
Total Swedish Securities
(cost $2,876,007) 2,865,469
UNITED KINGDOM-7.9%
GOVERNMENT OBLIGATION-7.9%
U.K. Treasury Gilts
6.75%, 11/26/04 (b)
(cost $2,731,569) GBP 1,700 2,876,960
UNITED STATES-20.3%
CORPORATE DEBT OBLIGATIONS-6.9%
InterAmericas Communication
14.00%, 10/27/07 (a)(b) US$ 500 476,250
Iridium LLC Capital Corp.
14.00%, 7/15/05 (a)(b) 500 527,500
OpTel Inc., Series B
13.00%, 2/15/05 (b)(h) 500 517,500
8
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
Providian Capital I
9.53%, 02/01/27 (a)(b) US$ 400 $ 437,875
Riggs Capital, Trust II
8.88%, 3/15/27 (a)(b) 500 532,250
------------
2,491,375
U.S. GOVERNMENT OBLIGATIONS-9.8%
U.S. Treasury Notes
6.13%, 8/15/07 1,000 1,022,187
6.25%, 8/31/02 (b) 2,500 2,550,000
------------
3,572,187
TIME DEPOSIT-3.6%
Dresdner Bank
5.65%, 11/03/97 US$ 1,300 1,300,000
Total United States Securities
(cost $7,236,588) 7,363,562
TOTAL INVESTMENTS-97.9%
(cost $35,837,408) 35,424,050
Other assets less liabilities-2.1% 773,142
NET ASSETS-100% $36,197,192
(a) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31, 1997,
these securities amounted to $8,671,381 or 23.96% of net assets.
(b) Securities, or portion thereof, with an aggregate market value of
$26,159,626 have been segregated to collateralize forward exchange currency
contracts.
(c) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective until
final maturity.
(d) Annualized yield to maturity at purchase date.
(e) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at October 31, 1997.
(f) An interest rate based on the six-month Libor Rate plus 81.25 basis points
will take effect upon issuance of bond.
(g) Redemption value of this security will be an amount equal to the principal
amount of such note; plus or minus any calculated cost to the issuer.
(h) Consists of $500,000 senior notes and 500 shares of common stock.
Glossary of terms:
FRN - Floating Rate Note.
PDI - Past Due Interest.
WI - When Issued.
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $35,837,408) $35,424,050
Cash 1,536,383
Receivable for investment securities sold 1,918,880
Receivable for capital stock sold 1,069,097
Interest receivable 811,346
Receivable from adviser 24,973
Deferred organization expenses 96,843
Total assets 40,881,572
LIABILITIES
Payable for investment securities purchased 3,671,482
Payable for capital stock sold 589,337
Unrealized depreciation of forward exchange currency contracts 252,690
Dividend payable 89,259
Distribution fee payable 22,396
Accrued expenses and other liabilities 59,216
Total liabilities 4,684,380
NET ASSETS $36,197,192
COMPOSITION OF NET ASSETS
Capital stock, at par $ 3,159
Additional paid-in capital 35,555,331
Undistributed net investment income 70,179
Accumulated net realized gain on investments and foreign
currency transactions 1,230,367
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (661,844)
$36,197,192
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($12,954,453/
1,130,634 shares of capital stock issued and outstanding) $11.46
Sales charge--4.25% of public offering price .51
Maximum offering price $11.97
CLASS B SHARES
Net asset value and offering price per share ($18,854,593/
1,645,592 shares of capital stock issued and outstanding) $11.46
CLASS C SHARES
Net asset value and offering price per share ($4,388,146/
382,968 shares of capital stock issued and outstanding) $11.46
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $118) $1,537,572
Dividends 12,595 $1,550,167
EXPENSES
Advisory fee 138,196
Distribution fee - Class A 17,509
Distribution fee - Class B 100,393
Distribution fee - Class C 25,503
Custodian 148,289
Administration 118,000
Registration 93,019
Audit and legal 77,523
Transfer agency 31,235
Amortization of organization expenses 29,910
Printing 23,916
Directors' fees 23,547
Miscellaneous 9,172
Total expenses 836,212
Less expenses waived and assumed by the Adviser
(see Note B) (397,971)
Net expenses 438,241
Net investment income 1,111,926
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 1,242,731
Net realized gain on foreign currency transactions 542,613
Net change in unrealized appreciation of:
Investments (571,544)
Foreign currency denominated assets and liabilities (256,445)
Net gain on investments 957,355
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,069,281
See notes to financial statements.
11
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
YEAR ENDED JAN. 9,1996*
OCTOBER 31, TO
1997 OCT. 31,1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,111,926 $ 137,202
Net realized gain on investments and foreign
currency transactions 1,785,344 60,401
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities. (827,989) 166,145
Net increase in net assets from operations 2,069,281 363,748
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (382,874) (139,600)
Class B (581,432) (13,366)
Class C (147,620) (12,007)
Distributions in excess of net investment income
Class A (142,461) -0-
Class B (253,949) -0-
Class C (64,814) -0-
Net realized gain on investments
Class A (22,494) -0-
Class B (23,190) -0-
Class C (10,520) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 31,913,077 3,545,413
Total increase 32,353,004 3,744,188
NET ASSETS
Beginning of period 3,844,188 100,000
End of period (undistributed net investment
income of $70,179) $36,197,192 $3,844,188
* Commencement of operations.
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Strategic Income Trust, Inc. (the "Fund"), was incorporated in
the State of Maryland on October 25, 1995 as a non-diversified, open-end
management investment company. Prior to commencement of operations on January
9, 1996, the Fund had no operations other than the sale to Alliance Capital
Management L.P. (the "Adviser") of 10,000 shares of Class A shares for the
aggregate amount of $100,000 on December 18, 1995. 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 C shares 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
certain fee-based programs and retirement plans. All four classes of shares
have identical voting, dividend, liquidation and other rights and the same
terms and conditions, 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
Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the day of valuation or if
no such closing price is available, at the mean of the last bid and ask price
quoted on such day. However, readily marketable portfolio securities may be
valued on the basis of prices provided by a pricing service when such prices
are believed by the Adviser to reflect the fair value of such security. Options
are valued at market value or fair value using methods determined by the Board
of Directors. Securities which mature in 60 days or less are valued at
amortized cost, which approximates market value, unless this method does not
represent fair value. Securities for which market quotations are not readily
available and restricted securities are valued in good faith at fair value
using methods determined by the Board of Directors.
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 at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when earned or accrued.
Net realized gains on foreign currency transactions represent foreign exchange
gains and losses from sales and maturities of securities and forward exchange
currency contracts, holdings of foreign currencies, exchange gains and losses
realized between the trade and settlement dates on investment 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 change in
unrealized appreciation (depreciation) of foreign currency denominated assets
and liabilities represents net currency gains and losses from valuing foreign
currency denominated assets and liabilities at period end exchange rates.
3. ORGANIZATION EXPENSES
Organization expenses of approximately $151,270 have been deferred and are
being amortized on a straight-line basis through January 2001.
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. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's
13
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisor Class shares have no distribution fees.
6. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
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. The Fund accretes discounts as an
adjustment to interest income.
7. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
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 foreign currency gains, resulted in a net decrease in
accumulated net realized gain on investments and foreign currency transactions
and a corresponding increase in undistributed net investment income. This
reclassification had no effect on net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of
.75 of 1% of the average daily net assets of the Fund. Such fee is accrued
daily and paid monthly.
The Adviser has agreed to voluntarily waive its fees and bear certain expenses
so that total expenses do not exceed on an annual basis 1.90%, 2.60% and 2.60%
of the average daily net assets for the Class A, Class B and Class C shares
respectively.
For the year ended October 31, 1997, the Adviser waived $138,196 in fees and
reimbursed the Fund $135,775 for additional expenses. Pursuant to the Advisory
Agreement, the Fund may reimburse the Adviser for certain legal and accounting
services provided to the Fund by the Adviser. For the year ended October 31,
1997, the Adviser agreed to waive administrative expenses in the amount of
$118,000.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. For the year ended
October 31, 1997 the transfer agent agreed to waive fees in the amount of
$6,000.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $10,947 from the sale of Class A shares and $11,816,
and $4,488 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B and Class C shares, respectively, for the year ended
October 31, 1997.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30 of 1% of the average daily net assets attributable to the
Class A shares and up to 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 fees are accrued daily and paid monthly. The Agreement
provides that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities. The Distributor has
incurred expenses in excess of the distribution costs reimbursed by the Fund in
the amount of $994,542 and $188,869 for Class B and Class C shares,
respectively. Such costs may be recovered from the Fund in future periods so
long as the Agreement is in effect. In accordance with the Agreement, there is
no provision for recovery of unreimbursed distribution costs, incurred by the
Distributor, beyond the current fiscal period for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of the Fund's shares.
14
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government obligations) aggregated $90,499,741 and $65,056,215,
respectively, for the year ended October 31, 1997. There were purchases of
$9,459,588 and sales of $6,294,264 of U.S. government and government agency
obligations for the year ended October 31, 1997.
At October 31, 1997, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation of investments was $543,718 and gross unrealized
depreciation of investments was $957,076, resulting in net unrealized
depreciation of $413,358 (excluding foreign currency transactions).
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio
holdings, to hedge certain firm purchase and sales commitments denominated in
foreign currencies and for investment purposes. 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
realized gains or losses from 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 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 October 31, 1997, the Fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
FORWARD EXCHANGE CURRENCY BUY CONTRACTS
Canadian Dollars, expiring 11/03/97-12/16/97 2,633 $1,893,273 $1,871,617 $(21,656)
Deutsche Marks, expiring 11/07/97 2,300 1,311,266 1,333,997 22,731
European Currency Unit, expiring 11/06/97 213 243,185 242,925 (260)
Indonesia Rupiah, expiring 11/12/97-1 /16/98 550,000 218,692 150,128 (68,564)
Japanese Yen, expiring 1/12/98 10,485 92,103 87,985 (4,118)
Norwegian Krone, expiring 11/03/97-12/03/97 7,302 1,027,438 1,042,844 15,406
</TABLE>
15
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
<TABLE>
<CAPTION>
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
FORWARD EXCHANGE CURRENCY SALE CONTRACTS
Australian Dollars, expiring 11/14/97 869 $ 638,425 $ 611,410 $ 27,015
British Pounds, expiring 11/24/97 1,634 2,650,871 2,739,598 (88,727)
Canadian Dollars, expiring 11/03/97-12/16/97 3,520 2,548,502 2,501,817 46,685
Danish Krone, expiring 11/25/97 5,282 786,648 805,863 (19,215)
Deutsche Marks, expiring 11/07/97-12/03/97 9,989 5,670,587 5,798,450 (127,863)
European Currency Unit, expiring 11/06/97 213 235,487 242,925 (7,438)
French Francs, expiring 11/06/97 10,023 1,685,724 1,738,828 (53,104)
Greek Dracmas, expiring 1/05/98 100,000 357,526 362,985 (5,459)
Indonesian Rupiah, expiring 11/12/97-1/16/98 550,000 214,691 150,127 64,564
Italian Lira, expiring 11/10/97-11/24/97 5,125,284 2,960,322 3,025,066 (64,744)
Japanese Yen, expiring 1/12/98 10,485 108,822 87,986 20,836
New Zealand Dollar, expiring 11/10/97 3,109 1,994,596 1,935,257 59,339
Norwegian Krone, expiring 11/03/97 3,240 457,212 462,322 (5,110)
Spanish Pesetas, expiring 11/06/97 29,754 198,941 204,188 (5,247)
Swedish Krona, expiring 12/04/97 22,474 2,956,102 2,993,863 (37,761)
$(252,690)
</TABLE>
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign securities and foreign currencies that are
traded on U.S. and foreign securities exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
16
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund
bears the market risk of an unfavorable change in the price of the security or
currency underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling or buying a security or currency at a
price different from the current market value. There were no transactions in
written options for the year ended October 31, 1997.
NOTE E: CAPITAL STOCK
There are 12,000,000 shares of $.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000 authorized shares. Transactions
in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED JAN. 9,1996* YEAR ENDED JAN. 9, 1996*
OCTOBER 31, TO OCTOBER 31 TO
1997 OCT. 31,1996 1997 OCT. 31, 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 1,031,467 253,587 $11,857,018 $2,571,898
Shares issued in
reinvestment of
dividends and
distributions 23,531 4,140 268,816 42,969
Shares converted
from Class B 3,566 -0- 40,424 -0-
Shares redeemed (139,876) (55,781) (1,591,569) (570,111)
Net increase 918,688 201,946 $10,574,689 $2,044,756
MARCH 25,1996** MARCH 25,1996**
TO TO
OCT. 31,1996 OCT. 31, 1996
------------ --------------
CLASS B
Shares sold 1,904,244 78,358 $21,544,554 $ 822,339
Shares issued in
reinvestment of
dividends and
distributions 26,698 107 304,645 1,138
Shares converted
to Class A (3,566) -0- (40,424) -0-
Shares redeemed (355,663) (4,586) (4,010,478) (47,937)
Net increase 1,571,713 73,879 $17,798,297 $ 775,540
* Commencement of operations.
** Commencement of distribution.
17
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED MAR. 25,1996** YEAR ENDED MAR. 25,1996**
OCTOBER 31, TO OCTOBER 31, TO
1997 OCT. 31,1996 1997 OCT. 31,1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 425,583 74,590 $ 4,822,709 $781,283
Shares issued in
reinvestment of
dividends and
distributions 5,283 117 60,139 1,225
Shares redeemed (117,161) (5,444) (1,342,757) (57,391)
Net increase 313,705 69,263 $ 3,540,091 $725,117
** Commencement of distribution.
18
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
-------------------------
YEAR ENDED JAN. 9,
OCTOBER 31, 1996(A) TO
1997 OCT. 31, 1996
----------- ------------
Net asset value, beginning of period $10.83 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .74 .69
Net realized and unrealized gain on investments and
foreign currency transactions 1.02 .95
Net increase in net asset value from operations 1.76 1.64
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.75) (.81)
Distributions in excess of net investment income (.28) -0-
Distributions from net realized gains on investments (.10) -0-
Total dividends and distributions (1.13) (.81)
Net asset value, end of period $11.46 $10.83
TOTAL RETURN
Total investment return based on net asset value(d) 16.83% 17.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,954 $2,295
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.90% 1.90%(e)
Expenses, before waivers/reimbursements 4.06% 19.20%(e)
Net investment income 6.56% 8.36%(e)
Portfolio turnover rate 417% 282%
See footnote summary on page 21.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
-------------------------
YEAR ENDED MARCH 25,
OCTOBER 31, 1996(F) TO
1997 OCT. 31,1996
----------- ------------
Net asset value, beginning of period $10.83 $ 9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .66 .41
Net realized and unrealized gain on investments
and foreign currency transactions 1.03 1.01
Net increase in net asset value from operations 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.67) (.56)
Distributions in excess of net investment income (.29) -0-
Distributions from net realized gains on investments (.10) -0-
Total dividends and distributions (1.06) (.56)
Net asset value, end of period $11.46 $10.83
TOTAL RETURN
Total investment return based on net asset value(d) 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,855 $800
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 4.76% 19.57%(e)
Net investment income 5.86% 7.26%(e)
Portfolio turnover rate 417% 282%
See footnote summary on page 21.
20
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS C
-------------------------
YEAR ENDED MARCH 25,
OCTOBER 31, 1996(F) TO
1997 OCT. 31,1996
----------- ------------
Net asset value, beginning of period $10.83 $ 9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .66 .39
Net realized and unrealized gain on investments
and foreign currency transactions 1.03 1.03
Net increase in net asset value from operations 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.67) (.56)
Distributions in excess of net investment income (.29) -0-
Distributions from net realized gains on investments (.10) -0-
Total dividends and distributions (1.06) (.56)
Net asset value, end of period $11.46 $10.83
TOTAL RETURN
Total investment return based on net asset value(d) 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $4,388 $750
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 4.77% 19.49%(e)
Net investment income 5.86% 7.03%(e)
Portfolio turnover rate 417% 282%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived/reimbursed by the Adviser.
(d) 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.
Total investment return calculated for a period of less than one year is not
annualized.
(e) Annualized.
(f) Commencement of distribution.
21
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS ALLIANCE GLOBAL STRATEGIC INCOME
TRUST, INC.
We have audited the accompanying statement of assets and liabilities of
Alliance Global Strategic Income Trust, Inc. (the "Fund"), including the
portfolio of investments, as of October 31, 1997, and the related statement of
operations for the year then ended and the statement of changes in net assets
and the financial highlights for the year ended October 31, 1997 and for the
period from January 9, 1996 (commencement of operations) to October 31, 1996.
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
October 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 Strategic Income Trust, Inc., at October 31, 1997, the results
of its operations for the year then ended and the changes in its net assets and
the financial highlights for the year ended October 31, 1997 and for the period
from January 9, 1996 to October 31, 1996 in conformity with generally accepted
accounting principles.
New York, New York
December 10, 1997
22
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
DOUGLAS J. PEEBLES, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
23
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
24
