ALLIANCE GLOBAL STRATEGIC INCOME TRUST
SEMI-ANNUAL REPORT
APRIL 30, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
June 14, 1999
Dear Shareholder:
We are pleased to report to you on the performance, strategy and outlook of the
Alliance Global Strategic Income Trust (the "Fund"), for the semi-annual
reporting period ended April 30, 1999. The Fund is designed for investors who
seek high current income and capital appreciation. To achieve this objective,
the Fund invests in a wide variety of fixed income markets including U.S.
government, agency and corporate securities, U.S. dollar-denominated government
bonds of emerging countries, and non-U.S. dollar denominated bonds of developed
and emerging markets.
INVESTMENT PERFORMANCE
The following table shows how your Fund performed over the six- and
twelve-month periods ended April 30, 1999. For comparison we have included the
Lehman Brothers ("LB") Aggregate Bond Index, a standard measure of the
performance of a basket of unmanaged debt securities, and the Lipper
Multi-Sector Income Funds Average ("Lipper Average"), which reflects the
average performance of a group of funds with similar investment objectives.
Over the six-month period your Fund outperformed both the LB Aggregate Bond
Index and the Lipper Average. On a twelve-month basis, your Fund underperformed
the U.S.-only LB Aggregate Bond Index and outperformed the Lipper Average,
which holds market segments similar to the Fund.
Over the six-month period, our holdings in the emerging markets and high yield
sector enhanced performance. Our holdings in countries such as Argentina and
Mexico posted strong performance as economic fundamentals continued to improve
and fallout from the Brazilian devaluation was significantly less than
expected. However, over the twelve-month period our emerging market holdings
dampened performance. The Russian market posted the worst returns among the
emerging markets over the twelve-month period as a result of Russia's domestic
debt default and the devaluation of the ruble.
INVESTMENT RESULTS*
Periods Ended April 30, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
Class A 8.70% 1.77%
Class B 8.46% 1.10%
Class C 8.46% 1.10%
LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE 6.12% 1.05%
THE LEHMAN BROTHERS AGGREGATE BOND INDEX 0.69% 6.27%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
NET ASSET VALUE AS OF APRIL 30, 1999. TOTAL RETURNS FOR ADVISOR CLASS SHARES
WILL DIFFER DUE TO DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. 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. RETURNS FOR THE FUND INCLUDE THE REINVESTMENT OF ANY
DISTRIBUTIONS PAID DURING THE PERIOD. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
THE UNMANAGED LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE ("LIPPER AVERAGE")
REFLECTS THE PERFORMANCE FOR 101 FUNDS FOR THE SIX-MONTH PERIOD AND 94 FUNDS
FOR THE TWELVE-MONTH PERIOD ENDED APRIL 30, 1999. THE LIPPER AVERAGE HAS
GENERALLY SIMILAR INVESTMENT OBJECTIVES TO YOUR FUND, ALTHOUGH INVESTMENT
POLICIES FOR THE VARIOUS FUNDS MAY DIFFER. THE UNMANAGED LEHMAN BROTHERS ("LB")
AGGREGATE BOND INDEX IS COMPOSED OF THE LB MORTGAGE-BACKED SECURITIES INDEX,
THE LB ASSET-BACKED SECURITIES INDEX AND THE LB GOVERNMENT/CORPORATE BOND
INDEX. IT IS A BROAD MEASURE OF THE PERFORMANCE OF TAXABLE BONDS IN THE U.S.
MARKET, WITH MATURITIES OF AT LEAST ONE YEAR. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN INDEX OR AN AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
MARKET OVERVIEW
During the six-month period ended April 30, 1999, financial markets stabilized
and recovered from the turmoil experienced in the third quarter of 1998. The
ongoing strength of the U.S. economy and interest rate cuts by central banks
around the world helped to restore prospects for the global economy. Equity
markets reached new highs while credit markets stabilized as investors
1
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
moved out of traditional safe-haven government bond markets and into
higher-yielding asset classes.
During the period under review, the U.S. high yield sector performed strongly
while the U.S. Treasury market lagged. After the Federal Reserve cut interest
rates and the equity market rebounded, investors moved out of safe-haven
Treasuries and back into the high yield sector in search of higher returns.
Subsequently, high yield debt prices rebounded, however, not to the levels
reached in August of 1998.
Emerging market debt outperformed all other sectors of the bond market over the
six months under review. After the initial shock of Russia's currency
devaluation and domestic debt default was absorbed by global markets, both
investor sentiment regarding emerging market debt and prospects for the global
economy improved. Individual emerging markets decoupled from the troubled
Russian market and debt price movements became more dependent on individual
country fundamentals. In addition, sound policy initiatives undertaken by the
Brazilian government following the January 1999 devaluation of the Brazilian
real, combined with growing evidence that economic activity in Asia has
bottomed and the rise in oil prices further increased investors' confidence in
emerging market debt. All emerging markets posted healthy positive returns for
the six-month period ended April 30, 1999.
In the developed government bond markets, all countries except Japan
outperformed the U.S. The U.S. government bond market performed relatively
poorly over the period as stronger-than-expected U.S. economic data reduced
expectations of further interest rate cuts. In Japan, concerns about the
ability of the bond market to absorb a glut of government bonds being issued as
well as further erosion of Japanese economic fundamentals pushed prices down
dramatically. European markets performed relatively well over the period, with
non-Euro countries outperforming Euro countries as more evidence of slowing
growth and rate cuts made government bonds in those non-Euro countries
relatively more attractive.
INVESTMENT STRATEGY
During the six-months ended April 30, 1999, we increased our holdings of
non-U.S. securities as central banks around the world cut interest rates and
financial markets stabilized. In particular, we decreased our U.S. Treasury
holdings as their safe-haven premium diminished. We increased our holdings in
Europe to take advantage of slowing economic growth and in anticipation of
further interest rate cuts as the eleven members of the European Monetary Union
moved toward convergence. Also, we increased our holdings in the emerging
markets as individual markets decoupled from the troubled Russian market and
turmoil in Brazil was successfully managed by the Brazilian government. Within
the corporate sector, we continued to focus on B-rated and BBB-rated
securities. After the market turmoil of the third quarter of 1998, we
selectively chose solid credits which we believed to be undervalued. We were
particularly interested in the communications sector, which benefited from
heavy new issuance and merger activity.
OUTLOOK
Global financial markets have continued to stabilize from late last year and
investors are now able to focus more on economic fundamentals. We expect global
growth to continue to slow and inflation to remain low. Central banks in Europe
and Japan will keep rates low, while it is becoming more likely that the
Federal Reserve will increase official U.S. interest rates. U.S. economic
activity is expected to moderate from the robust rate of the first quarter with
1999 growth estimated around 3.7%. The slowing in industrial production appears
to be abating and consumption should moderate slightly from the robust level in
1998. Inflation will remain benign, and U.S. interest rates will remain low
with the 30-year Treasury centered around 6.00%.
Outside of the U.S., fundamentals still point toward lower yields. In Europe,
the recent action by the European Central Bank ("ECB") to cut rates was
expected, but the size of the interest rate cut of 0.50% was more than we were
expecting. The cut by the ECB confirms our views of weak growth in Europe but
also puts pressure on European politicians to address the structural problems
that continue to plague the European economies. We have received numerous
statements from ECB officials that people should not expect further interest
rate cuts. Japanese policymakers have recently achieved a greater degree of
coordination in their efforts to stimulate the economy and Japanese gross
domestic product is expected to decline by 1.0% in 1999, an improvement
2
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
over the 2.8% decline in 1998. Whether or not economic activity in Japan has
actually bottomed will be a key question going forward and will largely
determine the direction of global growth and interest rate patterns later this
year.
In the emerging markets, rising oil prices, a strong U.S. economy, improved
sentiment regarding Brazil and evidence that Asian economies are bottoming have
improved prospects for growth. Furthermore, economic weakness in Latin America
appears to be less severe than was originally expected. This environment
supports gradually improving economic prospects for emerging market countries,
although there may well be short-term market volatility as sentiment shifts
with events. Country selection will remain important.
We continue to view the high yield sector favorably. The combination of
moderate growth and low inflation will help high yield spreads to continue
contracting throughout 1999. In addition, the recent launch of the Euro, the
new currency for eleven countries in Europe, has created new opportunities for
high yield investing in Europe. However, the importance of issuer selection
will increase as the global economy slows.
Thank you for your continued interest and investment in the Alliance Global
Strategic Income Trust. We look forward to reporting to you again on market
activity and the Fund's investment results in the 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.
3
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 market countries and non-U.S. dollar-denominated bonds of developed
and emerging markets.
INVESTMENT RESULTS
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 1.77% -2.58%
Since Inception* 13.12% 11.66%
SEC Yield** 6.84%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 1.10% -2.60%
Since Inception* 12.67% 12.42%
SEC Yield** 6.42%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 1.10% 0.18%
Since Inception* 12.67% 12.67%
SEC Yield** 6.43%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (MARCH 31,
1999)
CLASS A CLASS B CLASS C
------------ ------------ ------------
1 Year -4.29% -4.31% -1.58%
Since Inception* 11.25% 12.01% 12.27%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) 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 returns for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 1/9/96 Class A; 3/21/96 Classes B and C.
** SEC yields are based on SEC guidelines and are calculated on 30 days ended
April 30, 1999.
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1999 (UNAUDITED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
ARGENTINA-5.1%
CORPORATE DEBT OBLIGATIONS-3.7%
CEI Citicorp Holdings
11.25%, 2/14/07 (a) ARS 2,000 $ 1,455,597
CIA Radiocomunic Moviles
9.25%, 5/08/08 (a) US$ 3,000 2,835,000
------------
4,290,597
GOVERNMENT OBLIGATION-1.4%
Republic of Argentina
Supplier-Bocon FRN
Pro 1
2.87%, 4/01/07 (b) ARS 2,243 1,662,853
Total Argentinian Securities
(cost $6,221,529) 5,953,450
BRAZIL-1.9%
CORPORATE DEBT OBLIGATION-0.2%
Trikem, SA
10.63%, 7/24/07 (a)(b) US$ 500 242,500
GOVERNMENT OBLIGATION-1.7%
Republic of Brazil
11.63%, 4/15/04 2,000 1,947,500
Total Brazilian Securities
(cost $2,481,328) 2,190,000
CANADA-0.4%
CORPORATE DEBT OBLIGATION-0.4%
Clearnet Communications
10.40%, 5/15/08 (c)
(cost $439,154) CA$ 1,000 442,387
CAYMAN ISLANDS-1.4%
PREFERRED STOCK-1.4%
Centaur Funding Corp.
Zero coupon, 4/21/20 (a)
(cost $1,571,800) US$ 10,000 1,642,140
CHILE-2.4%
CORPORATE DEBT OBLIGATION-2.4%
Empresa Nacional de
Electricidad, SA
7.88%, 2/01/27
(cost $2,893,686) 3,000 2,798,013
DENMARK-2.2%
CORPORATE DEBT OBLIGATION-2.2%
Danske Kredit
Series ANN
6.00%, 10/01/29
(cost $2,794,543) DKK 17,944 2,525,097
DOMINICAN REPUBLIC-1.6%
CORPORATE DEBT OBLIGATION-1.6%
Tricom, SA
11.38%, 9/01/04 (a)
(cost $1,805,915) US$ 2,000 1,862,500
ECUADOR-2.4%
CORPORATE DEBT OBLIGATION-0.2%
Conecel Holdings, Ltd.
15.50%, 10/01/00
(a)(b)(d) US$ 1,000 175,000
GOVERNMENT OBLIGATION-2.2%
Republic of Ecuador
4.00%, 2/28/25 6,000 2,542,800
Total Ecuadorian Securities
(cost $3,607,844) 2,717,800
FRANCE-4.9%
CORPORATE DEBT OBLIGATION-1.8%
Credit Lyonnais FRN
6.31%, 9/19/49 2,250 2,058,914
GOVERNMENT OBLIGATION-3.1%
Government of France
4.50%, 7/12/03 (b) EUR 3,201 3,563,095
Total French Securities
(cost $5,660,207) 5,622,009
GERMANY-5.6%
GOVERNMENT OBLIGATIONS-5.6%
Republic of Germany
4.75%, 7/04/28 5,068 5,249,426
6.00%, 7/04/07 1,000 1,215,974
Total German Securities
(cost $7,063,426) 6,465,400
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
GREECE-1.7%
GOVERNMENT OBLIGATION-1.7%
Hellenic Republic
8.90%, 4/01/03
(cost $2,025,292) GRD 550,000 $ 1,927,160
HONG KONG-0.6%
CORPORATE DEBT OBLIGATION-0.6%
Guangdong Enterprises
8.88%, 5/22/07 (a)
(cost $906,829) US$ 2,500 725,000
HUNGARY-3.2%
CORPORATE DEBT OBLIGATION-1.4%
Euronet Services, Inc.
12.38%, 7/01/06 (e) DEM 8,000 1,642,069
GOVERNMENT OBLIGATION-1.8%
Government of Hungary
12.50%, 4/12/02 HUF 500,000 2,090,581
Total Hungarian Securities
(cost $3,989,421) 3,732,650
ITALY-4.9%
GOVERNMENT OBLIGATIONS-4.9%
Republic of Italy
6.25%, 3/01/02 (b) EUR 1,033 1,187,247
6.25%, 5/15/02 (b) 3,099 3,579,747
8.25%, 7/01/01 (b) 775 909,668
Total Italian Securities
(cost $5,626,220) 5,676,662
MEXICO-6.2%
CORPORATE DEBT OBLIGATIONS-2.3%
Innova S de R.L.
12.88%, 4/01/07 (a) US$ 2,000 1,745,000
Petroleos Mexicanos
9.25%, 3/30/18 (a) 1,000 935,000
------------
2,680,000
GOVERNMENT OBLIGATIONS-3.9%
Mexican Treasury Bills
25.80%, 6/03/99 (b)(f) MXP 5,050 536,730
30.75%, 8/05/99 (f) 18,165 1,862,666
United Mexican States
10.38%, 2/17/09 US$ 2,000 2,146,500
------------
4,545,896
Total Mexican Securities
(cost $6,975,062) 7,225,896
NETHERLANDS-2.7%
CORPORATE DEBT OBLIGATIONS-2.7%
Versatel Telecom, BV
13.25%, 5/15/08 2,750 2,983,750
warrants, expiring
5/15/08 (a) 2,500 175,000
Total Dutch Securities
(cost $2,684,116) 3,158,750
NORWAY-2.7%
GOVERNMENT OBLIGATION-2.7%
Kingdom of Norway
5.75%, 11/30/04 (b)
(cost $3,167,640) NOK 23,000 3,106,953
PANAMA-0.9%
GOVERNMENT OBLIGATION-0.9%
Republic of Panama
9.38%, 4/01/29
(cost $999,192) US$ 1,000 1,030,500
POLAND-2.4%
CORPORATE DEBT OBLIGATIONS- 2.4%
Netia Holdings, BV
Series B
11.00%, 11/01/07
(a)(b)(e) DEM 2,000 748,114
TPSA Finance, BV
7.75%, 12/10/08 (a) US$ 2,000 2,020,000
Total Polish Securities
(cost $2,762,271) 2,768,114
QATAR-0.4%
CORPORATE DEBT OBLIGATION-0.4%
Ras Laffan Liquid
Natural Gas
8.29%, 3/15/14 (a)(b)
(cost $462,945) US$ 450 427,230
6
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
RUSSIA-0.5%
GOVERNMENT OBLIGATIONS-0.5%
Russian IAN FRN
5.97%, 12/15/15 US$ 169 $ 12,644
Russian Principal Loans
FRN
5.97%, 12/15/20 (b)(g) 8,000 555,000
Total Russian Securities
(cost $4,364,560) 567,644
SOUTH AFRICA-2.1%
CORPORATE DEBT OBLIGATIONS-2.1%
Development Bank of
South Africa
18.59%, 12/31/27 (b) ZAR 50,000 193,098
European Bank for
Reconstruction &
Development
Zero coupon, 12/31/29 (b)(h) 50,000 209,532
International Bank for
Reconstruction &
Development
Zero coupon, 12/31/25 350,000 1,811,832
Zero coupon, 2/17/26 (b)(h) 50,000 254,725
Total South African
Securities
(cost $4,113,943) 2,469,187
SWEDEN-5.4%
GOVERNMENT OBLIGATIONS-5.4%
Government of Sweden
8.00%, 8/15/07 (b) SEK 21,500 3,255,495
10.25%, 5/05/03 (b) 20,000 2,977,804
Total Swedish Securities
(cost $6,464,583) 6,233,299
UNITED KINGDOM-8.1%
CORPORATE DEBT OBLIGATIONS-5.7%
Espirit Telecom Group, Plc.
11.00%, 6/15/08 (e) DEM 1,000 583,367
HMV Media Group Plc.
10.88%, 5/15/08 (a) GBP 650 1,139,693
LCR Finance Plc.
4.50%, 12/07/28 (a) GBP 1,000 1,540,246
Luxfer Holding, Plc.
10.13%, 5/01/09 (a) 1,800 2,895,480
RSL Communications Plc.
10.00%, 3/15/08 (b)(e) DEM 1,000 352,451
------------
6,511,237
GOVERNMENT OBLIGATION-0.9%
U. K. Treasury Gilts
9.00%, 10/13/08 (b) GBP 500 1,063,687
PREFERRED STOCKS-1.5%
Abbey National Bank Plc.
8.625% 400,000 942,640
Bank of Scotland
9.25% 300,000 817,973
------------
1,760,613
Total United Kingdom
Securities
(cost $9,388,975) 9,335,537
UNITED STATES-29.5%
COMMON STOCK-0.0%
OpTel, Inc.
Series C (a)(b) US$ 500 13
CONVERTIBLE BOND-0.1%
Viatel, Inc.
10.00%, 4/15/11
(a)(b)(e) DEM 40 55,471
CORPORATE DEBT OBLIGATIONS-13.1%
@Entertainment, Inc.
14.50%, 2/01/09 (a)(c) US$ 5,120 2,515,200
Airtouch Communications
5.50%, 7/24/08 (e) DEM 2,000 1,151,787
Asian Development Bank
5.59%, 7/16/18 US$ 1,000 945,277
Comcast Cable
Communications
8.88%, 5/01/17 1,500 1,788,418
Derby Cycle Corp.
9.38%, 5/15/08 (e) DEM 1,700 798,888
Federal-Mogul Corp.
7.88%, 7/01/10 US$ 1,000 999,923
ICO Global Communication
15.00%, 8/01/05 1,000 645,000
InterAmericas
Communication
14.00%, 10/27/07 (a)(b) 500 342,500
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05 (a)(b) US$ 1,000 $355,000
Nextel Communications
9.75%, 8/15/04 (i) 1,000 1,042,500
NTL, Inc.
Series B
10.75%, 4/01/08 (a)(c) GBP 2,000 2,211,825
OpTel Inc.,
Series B
13.00%, 2/15/05 (b)(j) US$ 500 497,500
Viatel Inc.
11.15%, 4/15/08 (a)(e) DEM 1,000 561,760
12.40%, 4/15/08 (a)(c)(e) 3,000 1,057,352
12.40%, 4/15/08 (b)(e) 700 246,715
------------
15,159,645
PREFERRED STOCK-0.0%
Nextel Communications
Series E
11.13%, 2/15/10 (a)(b)(i) US$ 30 33,450
U.S. GOVERNMENT OBLIGATIONS-10.9%
U.S. Treasury Bonds
3.63%, 4/15/28 (TIPS) US$ 2,018 1,934,568
13.75%, 8/15/04 4,000 5,520,000
U.S. Treasury Notes
6.88%, 5/15/06 US$ 4,700 5,102,437
------------
12,557,005
WARRANTS-0.0%
Firstcom Corp.
warrants, expiring
10/27/07 (a)(b) 17,500 43,750
TIME DEPOSIT-5.4%
West Deutsche Landesbank
Girozentrale
4.88%, 5/03/99 6,300 6,300,000
Total United States
Securities
(cost $35,222,483) 34,149,334
TOTAL INVESTMENTS-99.2%
(cost $123,692,964) 114,752,712
Other assets less liabilities-0.8% 964,680
NET ASSETS-100% $ 115,717,392
(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 April 30, 1999,
these securities amounted to $27,739,821 or 24.0% of net assets.
(b) Securities, or a portion thereof, with an aggregate market value of
$22,942,586 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) Consists of $1,000,000 notes and 6,750 shares of warrants.
(e) Will be converted to Euro based upon a predetermined schedule.
(f) Annualized yield to maturity at purchase date.
(g) Paid-in-kind in Russian IAN's.
(h) Unit consists of 1 senior discount note and 2.77 junior subordinate
debentures.
(i) PIK (paid-in-kind) preferred quarterly stock payments.
(j) Consists of $500,000 senior notes and 500 shares of common stock.
Glossary of terms:
FRN - Floating Rate Note.
IAN - Interest Arrears Note.
TIPS - Treasury Inflation Protection Securities.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $123,692,964) $ 114,752,712
Cash, at value (cost $87,368) 86,989
Receivable for investment securities sold 7,965,068
Interest receivable 2,853,667
Receivable for capital stock sold 1,339,606
Unrealized appreciation of forward exchange currency
contracts 1,231,236
Deferred organization expenses 51,907
Total assets 128,281,185
LIABILITIES
Payable for investment securities purchased 11,614,793
Payable for capital stock sold 335,740
Dividend payable 331,577
Distribution fee payable 82,871
Advisory fee payable 74,805
Accrued expenses and other liabilities 124,007
Total liabilities 12,563,793
NET ASSETS $ 115,717,392
COMPOSITION OF NET ASSETS
Capital stock, at par $ 10,971
Additional paid-in capital 121,989,212
Distributions in excess of net investment income (2,147,279)
Accumulated net realized gain on investments and foreign
currency transactions 3,821,310
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (7,956,822)
$ 115,717,392
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($26,471,554/2,508,277 shares of capital stock issued
and outstanding) $10.55
Sales charge--4.25% of public offering price .47
Maximum offering price $11.02
CLASS B SHARES
Net asset value and offering price per share
($68,707,391/6,515,567 shares of capital stock issued
and outstanding) $10.55
CLASS C SHARES
Net asset value and offering price per share
($19,214,669/1,821,825 shares of capital stock issued
and outstanding) $10.55
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,323,778/125,360 shares of capital stock issued
and outstanding) $10.56
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld
of $4,928) $ 5,542,938
Dividends (net of foreign taxes withheld
of $2,775) 24,972 $ 5,567,910
EXPENSES
Advisory fee 404,738
Distribution fee - Class A 35,338
Distribution fee - Class B 320,453
Distribution fee - Class C 95,458
Custodian 88,901
Transfer agency 70,883
Administration 58,248
Audit and legal 48,378
Registration 32,749
Printing 17,377
Amortization of organization expenses 15,006
Directors' fees 14,897
Miscellaneous 2,950
Total expenses 1,205,376
Less: expenses waived and assumed by Adviser
(see Note B) (33,250)
Net expenses 1,172,126
Net investment income 4,395,784
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 985,151
Net realized gain on foreign currency
transactions 2,773,597
Net change in unrealized appreciation
(depreciation) of:
Investments (584,755)
Foreign currency denominated assets and
liabilities 1,144,175
Net gain on investments 4,318,168
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 8,713,952
See notes to financial statements.
10
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 4,395,784 $ 4,526,553
Net realized gain on investments and
foreign currency transactions 3,758,748 76,173
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency denominated assets and
liabilities 559,420 (7,854,398)
Net increase (decrease) in net assets from
operations 8,713,952 (3,251,672)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (1,139,143) (1,411,993)
Class B (2,884,794) (2,495,352)
Class C (856,993) (556,457)
Advisor Class (59,277) (62,751)
Distributions in excess of net investment income
Class A -0- (488,490)
Class B -0- (964,594)
Class C -0- (214,532)
Advisor Class -0- (17,887)
Net realized gain on investments
Class A -0- (429,062)
Class B -0- (663,991)
Class C -0- (138,457)
CAPITAL STOCK TRANSACTIONS
Net increase 12,110,445 74,331,248
Total increase 15,884,190 63,636,010
NET ASSETS
Beginning of year 99,833,202 36,197,192
End of period $ 115,717,392 $ 99,833,202
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED) 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 may 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
fee-based programs and to certain retirement plan accounts. 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 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 sale price or, if there was no sale on
such day, the last bid price quoted on such day. If no bid prices are quoted,
then the security is valued at the mean of the bid and asked prices as obtained
on that day from one or more dealers regularly making a market in that
security. Securities traded on the over-the-counter market, securities listed
on a foreign securities market whose operations are similar to the United
States 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 closing bid and asked prices provided by two or more dealers
regularly making a market in such securities. U.S. government securities and
other debt securities which mature in 60 days or less are valued at amortized
cost unless this method does not represent fair value. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by, or in accordance with procedures approved by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market 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 at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gains or losses 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
denomi-
12
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
nated 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 any, 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 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.
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 waive its fees and bear certain expenses to the
extent necessary to limit total operating expenses on an annual basis to 1.90%,
2.60%, 2.60% and 1.60% of the daily average net assets for the Class A, Class
B, Class C and Advisor Class shares, respectively.
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 six months ended April 30, 1999, the Adviser agreed to waive fees for
certain legal and accounting services in the amount of $33,250.
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. Such compensation
amounted to $46,895 for the six months ended April 30, 1999.
For the six months ended April 30, 1999, the Fund's expenses were reduced by
$2,646 under an expense offset arrangement with Alliance Fund Services.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
received front-end sales charges of $5,814 from the sale of Class A shares and
$91,035 and $7,286 in contingent deferred sales charges imposed upon redemption
by shareholders of Class B and Class C shares, respectively, for the six months
ended April 30, 1999.
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
13
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
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
$3,670,982 and $519,946 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.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government obligations) aggregated $114,428,403 and $97,751,173,
respectively, for the six months ended April 30, 1999. There were purchases of
$8,579,680 and sales of $18,116,321 of U.S. government and government agency
obligations for the six months ended April 30, 1999.
At April 30, 1999, the cost of investments for federal income tax purposes was
substantially the same as the costs for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $2,225,009 and
gross unrealized depreciation of investments was $11,165,261 resulting in net
unrealized depreciation of $8,940,252 (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 April 30, 1999, the Fund had outstanding forward exchange currency
contracts, as follows:
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
-------- ------------ ------------ -------------
FORWARD EXCHANGE CURRENCY
BUY CONTRACTS
Australian Dollars,
settling 5/17/99 6,682 $ 4,226,156 $ 4,422,233 $ 196,077
British Pounds,
settling 5/17/99 964 1,558,808 1,549,831 (8,977)
Danish Krone,
settling 5/03/99 16,386 2,339,198 2,329,157 (10,041)
14
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
-------- ------------ ------------ -------------
FORWARD EXCHANGE CURRENCY
BUY CONTRACTS (CONTINUED)
European Euros,
settling 5/20/99 2,137 $ 2,311,727 $ 2,260,235 $ (51,492)
Japanese Yen,
settling 6/15/99 489,667 4,113,651 4,123,698 10,047
FORWARD EXCHANGE CURRENCY
SALE CONTRACTS
Australian Dollars,
settling 5/17/99 5,000 3,228,400 3,308,819 (80,419)
British Pounds,
settling 5/17/99 6,641 10,672,826 10,681,688 (8,862)
Canadian Dollars,
settling 5/10/99 609 401,704 417,999 (16,295)
Danish Krone,
settling
5/03/99-7/06/99 32,772 4,753,819 4,666,150 87,669
European Euros,
settling
5/20/99-7/15/99 27,884 30,480,144 29,507,067 973,077
Japanese Yen,
settling 6/15/99 462,075 3,982,544 3,891,329 91,215
Norwegian Krona,
settling 6/08/99 24,606 3,184,779 3,147,133 37,646
Swedish Krona,
settling 5/25/99 51,833 6,170,554 6,158,963 11,591
------------
$ 1,231,236
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign government 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.
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 received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added
15
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
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 received 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. For the six months ended April 30,
1999, the Fund did not engage in any options transactions.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $0.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 887,024 1,598,361 $ 9,222,327 $ 17,759,050
Shares issued in
reinvestment of
dividends and
distributions 55,703 132,962 580,429 1,459,025
Shares converted
from Class B 3,550 14,015 37,104 151,910
Shares redeemed (853,307) (460,665) (8,798,270) (4,969,798)
Net increase 92,970 1,284,673 $ 1,041,590 $ 14,400,187
CLASS B
Shares sold 1,551,206 4,986,132 $ 16,135,969 $ 55,353,973
Shares issued in
reinvestment of
dividends and
distributions 86,845 142,636 904,167 1,558,164
Shares converted
to Class A (3,550) (14,015) (37,104) (151,910)
Shares redeemed (828,378) (1,050,901) (8,618,322) (11,262,473)
Net increase 806,123 4,063,852 $ 8,384,710 $ 45,497,754
CLASS C
Shares sold 909,721 1,453,523 $ 9,442,080 $ 15,925,299
Shares issued in
reinvestment of
dividends and
distributions 20,210 24,272 210,548 264,273
Shares redeemed (687,860) (281,009) (7,115,820) (3,002,847)
Net increase 242,071 1,196,786 $ 2,536,808 $ 13,186,725
16
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED DEC. 18, 1997*SIX MONTHS ENDEDDEC. 18, 1997*
APRIL 30, 1999 TO APRIL 30, 1999 TO
(UNAUDITED) OCT. 31, 1998 (UNAUDITED) OCT. 31, 1998
------------ ------------ -------------- --------------
ADVISOR CLASS
Shares sold 43,334 105,163 $ 449,859 $ 1,180,306
Shares issued in
reinvestment of
dividends and
distributions 5,292 6,251 55,192 67,683
Shares redeemed (34,556) (124) (357,714) (1,407)
Net increase 14,070 111,290 $ 147,337 $ 1,246,582
NOTE F: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility ("the Facility")
intended to provide for short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 1999.
* Commencement of distribution.
17
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, JANUARY 9, 1996(A)
APRIL 30, 1999 -------------------------- TO
(UNAUDITED) 1998 1997 OCTOBER 31, 1996
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.18 $11.46 $10.83 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .45 .78 .74 .69
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .42 (.64) 1.02 .95
Net increase in net asset value from
operations .87 .14 1.76 1.64
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.50) (.78) (.75) (.81)
Distributions in excess of net investment
income -0- (.28) (.28) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.50) (1.42) (1.13) (.81)
Net asset value, end of period $10.55 $10.18 $11.46 $10.83
TOTAL RETURN
Total investment return based on net
asset value (d) 8.70% 1.00% 16.83% 17.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $26,472 $24,576 $12,954 $2,295
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.63%(e) 1.89% 1.90% 1.90%(e)
Expenses, before waivers/reimbursements 1.66%(e) 2.08% 4.06% 19.20%(e)
Net investment income 8.73%(e) 7.08% 6.56% 8.36%(e)
Portfolio turnover rate 237% 183% 417% 282%
</TABLE>
See footnote summary on page 21.
18
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, MARCH 21, 1996(F)
APRIL 30, 1999 -------------------------- TO
(UNAUDITED) 1998 1997 OCTOBER 31, 1996
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.17 $11.46 $10.83 $ 9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .42 .69 .66 .41
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .43 (.63) 1.03 1.01
Net increase in net asset value from
operations .85 .06 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.69) (.67) (.56)
Distributions in excess of net investment
income -0- (.30) (.29) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.47) (1.35) (1.06) (.56)
Net asset value, end of period $10.55 $10.17 $11.46 $10.83
TOTAL RETURN
Total investment return based on net asset
value (d) 8.46% .27% 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $68,707 $58,058 $18,855 $800
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.34%(e) 2.58% 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 2.37%(e) 2.76% 4.76% 19.57%(e)
Net investment income 7.98%(e) 6.41% 5.86% 7.26%(e)
Portfolio turnover rate 237% 183% 417% 282%
</TABLE>
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
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, MARCH 21, 1996(F)
APRIL 30, 1999 -------------------------- TO
(UNAUDITED) 1998 1997 OCTOBER 31, 1996
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.17 $11.46 $10.83 $ 9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .42 .68 .66 .39
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .43 (.62) 1.03 1.03
Net increase in net asset value from
operations .85 .06 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.68) (.67) (.56)
Distributions in excess of net investment
income -0- (.31) (.29) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.47) (1.35) (1.06) (.56)
Net asset value, end of period $10.55 $10.17 $11.46 $10.83
TOTAL RETURN
Total investment return based on net asset
value (d) 8.46% .27% 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $19,215 $16,067 $4,388 $750
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.33%(e) 2.58% 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 2.36%(e) 2.77% 4.77% 19.49%(e)
Net investment income 7.94%(e) 6.43% 5.86% 7.03%(e)
Portfolio turnover rate 237% 183% 417% 282%
</TABLE>
See footnote summary on page 21.
20
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
----------------------------------
DECEMBER 18,
SIX MONTHS ENDED 1997(F)
APRIL 30, 1999 TO
(UNAUDITED) OCTOBER 31, 1998
------------ ------------
Net asset value, beginning of period $10.18 $11.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .47 .85
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .43 (.84)
Net increase in net asset value from
operations .90 .01
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.52) (.85)
Distributions in excess of net investment
income -0- (.07)
Total dividends and distributions (.52) (.92)
Net asset value, end of period $10.56 $10.18
TOTAL RETURN
Total investment return based on net asset
value (d) 8.96% .07%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,324 $1,133
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.33%(e) 1.58%(e)
Expenses, before waivers/reimbursements 1.36%(e) 1.77%(e)
Net investment income 8.92%(e) 7.64%(e)
Portfolio turnover rate 237% 183%
(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
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 LLP
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.
22
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 U.S. Government Fund
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 Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
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
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
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
General Municipal Portfolio
Government Portfolio
23
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
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.
GSISR
