ALLIANCE GLOBAL STRATEGIC INCOME TRUST
ANNUAL REPORT
OCTOBER 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
November 10, 1999
Dear Shareholder:
This letter includes a discussion of the performance, investment strategy and
outlook for the Alliance Global Strategic Income Trust (the "Fund") for the
annual reporting period ended October 31, 1999. The Fund is designed for
investors who seek high current income and, secondarily, 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 October 31, 1999. For comparison, we have included
performance for the Lehman Brothers Aggregate Bond Index, which is a standard
measure of the performance of a basket of unmanaged debt securities, and the
Lipper Multi-Sector Income Funds Average, which reflects the average
performance of a group of funds with similar investment objectives.
During the six-month period ended October 31, 1999, your Fund underperformed
the Lehman Brothers Aggregate Bond Index and outperformed the Lipper
Multi-Sector Income Funds Average. Overall portfolio performance was dampened
by rising interest rates throughout developed bond markets. Our relative
underperformance versus the benchmark was primarily due to our allocation to
European government bonds. European government bonds underperformed U.S.
government bonds as stronger-than-expected European growth increased
expectations of an interest rate hike by the European Central Bank.
However, during the full fiscal year ended October 31, 1999, your Fund strongly
outperformed both the Lehman Brothers Aggregate Bond Index and the Lipper
Multi-Sector Income Funds Average. The Fund's outperformance over this
twelve-month period was primarily due to our European bond market allocation,
which performed well in the first six months of the reporting period, as well
as our emerging market bond market allocation. European government bonds were
strong performers during the first half of the twelve-month period when
economic growth slowed and interest rates fell, and emerging market debt
recovered sharply from the lows reached in the third quarter of 1998 as global
economic growth improved.
INVESTMENT RESULTS*
Periods Ended October 31, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE GLOBAL STRATEGIC
INCOME TRUST
Class A -1.42% 7.17%
Class B -1.86% 6.44%
Class C -1.86% 6.44%
THE LEHMAN BROTHERS
AGGREGATE BOND INDEX -0.15% 0.53%
LIPPER MULTI-SECTOR
INCOME FUNDS AVERAGE -2.25% 3.54%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
NET ASSET VALUE AS OF OCTOBER 31, 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 REFLECTS THE
PERFORMANCE FOR 113 FUNDS FOR THE SIX-MONTH PERIOD AND 104 FUNDS FOR THE
TWELVE-MONTH PERIOD ENDED OCTOBER 31, 1999. THE LIPPER MULTI-SECTOR INCOME
FUNDS AVERAGE HAS GENERALLY SIMILAR INVESTMENT OBJECTIVES TO YOUR FUND,
ALTHOUGH INVESTMENT POLICIES FOR THE VARIOUS FUNDS MAY DIFFER. THE UNMANAGED
LEHMAN BROTHERS AGGREGATE BOND INDEX IS COMPOSED OF THE LEHMAN BROTHERS
MORTGAGE-BACKED SECURITIES INDEX, THE LEHMAN BROTHERS ASSET-BACKED SECURITIES
INDEX AND THE LEHMAN BROTHERS 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.
1
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
MARKET OVERVIEW
During the six-month period ended October 31, 1999, global economic growth
improved and continued to broaden as Europe, Japan and Asia showed further
signs of strengthening. After more than 180 central bank easings around the
world during the past year, the U.S. Federal Reserve began a global monetary
policy tightening cycle with two official interest rate hikes this past summer.
(A third increase in interest rates was announced on November 15, 1999, which
was after the close of the Fund's reporting period.)
Additionally, during the course of the past month, the central banks of Europe,
Australia and Sweden have all indicated a tightening bias. The growing
consensus among policymakers is that growth has responded sufficiently to the
global easing cycle, which began in response to the Asian economic crisis in
1997-1998, such that inflation, not deflation, bears the greater future risk.
In the currency markets, the yen strengthened against the U.S. dollar while the
euro ended the period where it began, at US$1.05/euro.
During the six-month period ended October 31, 1999, as global growth gained
momentum and expectations of monetary tightening grew, the global bond market,
as represented by the JP Morgan Government Bond Index Broad (the "JPM GBI
Broad"), declined by 2.48% in local terms, and fell by 1.23% when hedged into
U.S. dollars. All developed bond markets within the JPM GBI Broad posted
negative results. The U.S. bond market outperformed the other developed bond
markets, while European markets posted the worst performance as growth across
the continent strengthened and investors factored in future European Central
Bank rate hikes.
Emerging market debt performed well over the six-month period ended October 31,
1999, as global economic growth improved and commodity prices firmed. The
emerging market debt sector, as represented by the JP Morgan Emerging Markets
Bond Index-Plus (the "JPM EMBI-Plus") outperformed all other bond market
sectors, gaining 3.54% during the six-month period. Most individual country
returns within the JPM EMBI were positive during the period with Russia posting
the largest gains (+64%) and Bulgaria (+18%) and Venezuela (+11%) also
outperforming. Rising oil prices boosted the performance of Russian and
Venezuelan debt as both countries are heavily dependent on oil exports. Russian
bond prices were also helped by indications that the government will
restructure its Soviet Union-era debt. Ecuador's debt posted the worst
performance, declining by 37% after the government delayed interest payments on
its debt.
Outside of the government bond markets, U.S. and European corporate bond
markets underperformed. The U.S. corporate bond market, as represented by the
Lehman Brothers U.S. Corporate Index, fell by 1.12%, while the European
corporate bond market, as represented by the Lehman E.U. Corporate Index,
declined by 3.83%. Fears of oversupply in the corporate bond market, related to
precautionary Y2K funding, pushed credit spreads wider. The performance of the
U.S. high-yield sector was dampened by these factors as well as rising default
rates and mutual fund outflows. However, the European high-yield sector
performed relatively well, driven higher by strong investor demand and merger
activity in the telecommunications sector.
INVESTMENT STRATEGY
Over the reporting period, we decreased our allocation to European government
debt. European economic growth was reported stronger than expected, increasing
the possibility that the European Central Bank would increase interest rates.
We remained underweight with U.S. government bonds, because we expected the
Federal Reserve to continue increasing interest rates as U.S. growth remained
strong. Our corporate exposure was focused primarily on European high yield, in
particular the telecom sector, which benefited from merger activity.
OUTLOOK
The global economy continues to gather momentum. We expect the U.S. economy to
remain strong through year-end and into the millennium. The risk of tighter
monetary policy in the U.S. remains. Positive inflation fundamentals however,
should keep long-term interest rates trading in a range between 6.00% and
6.75%. We expect Europe and Japan to continue to strengthen and take over the
relative growth leadership, although we do not believe that growth will surge
in either place. That said, excess returns relative to cash are still expected
to be somewhat better in Euroland and Japan.
2
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
Stronger global growth coupled with the recent firming in commodity prices will
continue to provide the environment necessary for emerging countries to
gradually improve their credit profiles. Country selection within the sector
remains critical, however. In Latin America, Brazil continues to exceed
expectations for fiscal reform, while Mexico could move to investment-grade
status in the year 2000. In Asia, the macroeconomic picture continues to
surprise on the upside, but progress on corporate restructuring remains slow.
We expect the credit-sensitive sectors to outperform governments. Improvements
in global growth, accompanied by low inflation will allow the monetary
authorities to fine tune economies with less risk of a hard landing. Thus, the
chance of a macro-induced shock to top-line earnings and/or to the cost or
availability of credit should remain modest. Moreover, market liquidity, which
has had a negative impact on swap market and credit sector risk premia during
the lead up to Y2K, should improve dramatically after the turn of the year.
We continue to view the high-yield sector favorably. Currently, the average
high-yield index is yielding about 6.0% over Treasuries, which offers
significant value. The combination of strong growth and low inflation suggests
high-yield spreads should contract, resulting in rising bond prices.
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 OCTOBER 31, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 7.17% 2.63%
Since Inception* 10.89% 9.64%
SEC Yield** 6.52%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 6.44% 2.55%
Since Inception* 10.25% 10.04%
SEC Yield** 6.09%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 6.44% 5.47%
Since Inception* 10.25% 10.25%
SEC Yield** 6.10%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (SEPTEMBER
30, 1999)
CLASS A CLASS B CLASS C
------- ------- -------
1 Year 2.76% 2.58% 5.49%
Since Inception* 9.67% 10.09% 10.31%
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
October 31, 1999.
4
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
GROWTH OF A $10,000 INVESTMENT
1/31/96* TO 10/31/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
ALLIANCE GLOBAL STRATEGIC INCOME TRUST CLASS A: $13,541
LEHMAN BROTHERS AGGREGATE BOND INDEX: $12,228
LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE: $12,122
1/31/96 10/31/96 10/31/97 10/31/98 10/31/99
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
10/31/99) 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 (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.
The Lipper Multi-Sector Income Funds Average reflects performance of 56 funds
(based on the number of funds in the average from 1/31/96 to 10/31/99). 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 Global Strategic 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.
Alliance Global Strategic Income Trust
Lehman Brothers Aggregate Bond Index
Lipper Multi-Sector Income Funds Average
* Closest month-end after the Fund's Class A share inception date of 1/9/96.
5
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
ARGENTINA-3.6%
CORPORATE DEBT OBLIGATIONS-2.6%
CEI Citicorp Holdings
11.25%, 2/14/07 (a)(b) ARS 2,000 $ 1,540,724
CIA Radiocomunic Moviles
9.25%, 5/08/08 (a)(b) US$ 1,000 872,380
Perez Companc, SA
Series B
9.00%, 5/01/06 (a)(b) 1,200 1,084,320
-----------
3,497,424
GOVERNMENT OBLIGATION-1.0%
Republic of Argentina
Supplier-Bocon FRN
Pro1
2.86%, 4/01/07 (a) ARS 2,100 1,427,151
Total Argentinian Securities
(cost $5,381,263) 4,924,575
AUSTRALIA-1.9%
GOVERNMENT OBLIGATION-1.9%
Government of Australia
10.00%, 10/15/02
(cost $2,585,160) AUD 3,600 2,535,536
BRAZIL-1.1%
GOVERNMENT OBLIGATION-1.1%
Republic of Brazil
10.13%, 5/15/27
(cost $1,471,913) US$ 2,000 1,565,000
CANADA-1.5%
CORPORATE DEBT OBLIGATIONS-1.5%
Clearnet Communications
10.40%, 5/15/08 (a)(c) CAD 1,000 419,526
Metronet Communications
9.95%, 6/15/08 (c) US$ 2,000 1,565,000
Total Canadian Securities
(cost $1,953,403) 1,984,526
CAYMAN ISLANDS-2.1%
PREFERRED STOCK-2.1%
Centaur Funding Corp.
9.08%, 4/21/20 (b)
(cost $2,889,211) 2,800 2,902,334
CHILE-1.8%
CORPORATE DEBT OBLIGATION-1.8%
Empresa Nacional de Electric, SA
7.88%, 2/01/27 (a)
(cost $2,897,593) US$ 3,000 2,519,310
DENMARK-1.6%
GOVERNMENT OBLIGATION-1.6%
Kingdom of Denmark
6.00%, 11/15/09
(cost $2,203,958) DKK 15,000 2,193,960
DOMINICAN REPUBLIC-1.3%
CORPORATE DEBT OBLIGATION-1.3%
Tricom, SA
11.38%, 9/01/04 (a)
(cost $1,819,684) US$ 2,000 1,825,000
ECUADOR-0.1%
CORPORATE DEBT OBLIGATIONS-0.1%
Conecel Holdings, Ltd.
16.50%, 10/01/00 (a)(b)(d) 500 75,000
16.50%, 10/01/00 (d) 500 75,000
Total Ecuadorian Securities
(cost $1,065,000) 150,000
FRANCE-4.0%
CORPORATE DEBT OBLIGATION-1.5%
Credit Lyonnais FRN
6.31%, 9/19/49 (a) 2,250 2,075,486
GOVERNMENT OBLIGATION-2.5%
Government of France
4.50%, 7/12/03 (a) EUR 3,201 3,360,848
Total French Securities
(cost $5,660,445) 5,436,334
GERMANY-4.4%
GOVERNMENT OBLIGATIONS-4.4%
Republic of Germany
4.00%, 7/04/09 (a) 5,000 4,783,189
6.75%, 7/15/04 (a) 1,070 1,220,078
Total German Securities
(cost $6,185,527) 6,003,267
6
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
GREECE-1.3%
GOVERNMENT OBLIGATION-1.3%
Hellenic Republic
8.90%, 4/01/03 (a)
(cost $2,025,292) GRD 550,000 $ 1,817,798
HONG KONG-0.4%
CORPORATE DEBT OBLIGATION-0.4%
Guangdong Enterprises
8.88%, 5/22/07 (a)(b)
(cost $933,986) US$ 2,500 512,500
HUNGARY-1.4%
CORPORATE DEBT OBLIGATION-1.4%
Euronet Services, Inc.
12.38%, 7/01/06 (c)(e)
(cost $1,849,888) DEM 8,000 1,893,154
ITALY-4.0%
GOVERNMENT OBLIGATIONS-4.0%
Republic of Italy
6.25%, 3/01/02 (a) EUR 1,033 1,132,697
6.25%, 5/15/02 (a) 3,099 3,404,610
8.25%, 7/01/01 (a) 775 869,162
Total Italian Securities
(cost $5,626,938) 5,406,469
LUXEMBOURG-0.7%
CORPORATE DEBT OBLIGATION-0.7%
Carrier1 International, SA
Series B
13.25%, 2/15/09 US$ 1,000 990,000
warrants, expiring 2/19/09 (f) 1,000 3,000
Total Luxembourg Securities
(cost $1,040,000) 993,000
MEXICO-3.9%
CORPORATE DEBT OBLIGATIONS-2.4%
Innova S de R.L.
12.88%, 4/01/07 (a) 3,000 2,467,500
Petroleos Mexicanos
9.25%, 3/30/18 (a) 1,000 857,500
----------
3,325,000
GOVERNMENT OBLIGATION-1.5%
Mexican Cetes
23.41%, 7/13/00 (g) MXP 22,362 2,024,522
Total Mexican Securities
(cost $5,478,268) 5,349,522
NETHERLANDS-9.7%
CORPORATE DEBT OBLIGATIONS-9.7%
KPNQWEST
7.13%, 6/01/09 (a)(b) EUR 2,000 2,040,686
Netia Holdings, BV
Series B
11.00%, 11/01/07 (c) DEM 4,000 1,398,353
TPSA Finance, BV
7.75%, 12/10/08 (a)(b) 2,000 1,887,500
United Pan Europe Communications
10.88%, 8/01/09 (b) EUR 1,000 1,044,694
11.25%, 11/01/09 (b) 3,000 3,124,143
Versatel Telecom, BV
11.875%, 7/15/09 (a) 2,000 2,082,760
13.25%, 5/15/08 (a) US$ 1,250 1,262,500
warrants, expiring 5/15/08 (a)(f) 2,750 398,750
Total Dutch Securities
(cost $13,220,683) 13,239,386
PANAMA-0.7%
GOVERNMENT OBLIGATION-0.7%
Republic of Panama
9.38%, 4/01/29 (a)
(cost $999,205) 1,000 941,300
POLAND-1.2%
GOVERNMENT OBLIGATION-1.2%
Government of Poland
10.00%, 6/12/04 (a)
(cost $2,035,623) PLN 8,000 1,693,092
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
RUSSIA-1.2%
GOVERNMENT OBLIGATIONS-1.2%
Russian Ministry of Finance
Series IV
3.00%, 5/14/03 US$ 4,000 $ 904,800
Russia Principal Loans FRN
5.97%, 12/15/20 (a)(d) 8,000 730,400
Total Russian Securities
(cost $5,403,908) 1,635,200
SOUTH AFRICA-1.9%
CORPORATE DEBT OBLIGATIONS-1.9%
Development Bank of South Africa
Zero coupon,
12/31/27 (a) ZAR 50,000 199,430
European Bank for
Reconstruction & Development
Zero coupon,
12/31/29 (a)(h) 50,000 183,150
International Bank for
Reconstruction & Development
Zero coupon, 12/31/25 (a) 350,000 1,957,265
Zero coupon, 2/17/26 (a)(h) 50,000 260,724
Total South African Securities
(cost $5,421,094) 2,600,569
TURKEY-0.7%
GOVERNMENT OBLIGATION-0.7%
Republic of Turkey
12.00%, 12/15/08
(cost $993,807) US$ 1,000 1,012,500
UNITED KINGDOM-12.5%
CORPORATE DEBT OBLIGATIONS-4.1%
Luxfer Holdings Plc.
10.13%, 5/01/09 (a)(b) GBP 1,800 2,706,845
RSL Communications Plc.
10.00%, 3/15/08 (a)(c)(e) DEM 5,000 1,613,484
Telewest Communication Plc.
9.88%, 4/15/09 (a)(b)(c) GBP 1,250 1,277,002
----------
5,597,331
GOVERNMENT OBLIGATIONS-7.2%
U.K. Treasury Gilts
5.75%, 12/07/09 GBP 2,400 4,057,088
6.75%, 11/26/04 (a) 3,465 5,859,875
----------
9,916,963
PREFERRED STOCKS-1.2%
Abbey National Bank Plc.
7.76% (a) 400 908,855
Bank of Scotland
9.25% (a) 300 712,457
----------
1,621,312
Total United Kingdom Securities
(cost $29,732,807) 17,135,606
UNITED STATES-40.8%
CORPORATE DEBT OBLIGATIONS-17.7%
@Entertainment, Inc.
Series B
14.50%, 2/01/09 (c) US$ 5,120 3,161,600
Asian Development Bank
5.59%, 7/16/18 (a) 1,000 984,745
Auburn Hills Trust
12.00%, 5/01/20 2,200 3,293,387
Comcast Cable Communications
8.88%, 5/01/17 (a) 1,500 1,668,243
Derby Cycle Corp.
9.38%, 5/15/08 (a)(e) DEM 1,700 502,869
Dresdner Funding Trust
5.79%, 6/30/11 (a)(b) EUR 2,000 1,940,650
Federal-Mogul Corp.
7.50, 1/15/09 (b) US$ 2,500 2,225,783
Ford Motor Company
7.45%, 7/16/31 3,000 2,968,920
InterAmericas Communication
14.00%, 10/27/07 (a) 500 400,000
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05 (a)(d) 2,000 130,000
NTL, Inc.
Series B
10.75%, 4/01/08 (a)(c) 2,000 2,140,659
OpTel, Inc.
Series B
13.00%, 2/15/05 (a)(d)(i) 500 127,500
8
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Viatel, Inc.
11.15%, 4/15/08 (a)(e) DEM 1,000 $ 516,315
11.50%, 3/15/09 EUR 2,000 2,030,167
Williams Communication Group, Inc.
10.88%, 10/1/09 US$ 2,000 2,060,000
-----------
24,150,838
U.S. GOVERNMENT OBLIGATIONS-14.1%
Treasury Bills
zero coupon, 11/04/99 US$ 10,000 9,996,320
Treasury Notes
4.75%, 11/15/08 2,000 1,809,376
5.50%, 5/15/09 4,800 4,603,502
6.00%, 8/15/09 2,915 2,912,269
-----------
19,321,467
COMMON STOCKS & WARRANTS-0.1%
Consorcio Ecuatoriano de
Telecomunicaciones, SA
Cl. B
warrants expiring 10/01/00 (a)(f) 6,750 0
Firstcom Corp.
warrants, expiring 10/27/07 (a)(b)(f) US$ 17,500 105,000
OpTel, Inc. (a)(b)(f) 500 5
Viatel, Inc. (a)(f) 1,627 54,635
-----------
159,640
TIME DEPOSIT-8.9%
Republic of London
5.19%, 11/01/99 12,200 12,200,000
Total United States Securities
(cost $44,868,130) 55,831,945
TOTAL INVESTMENTS-103.8%
(cost $153,742,786) 142,101,883
Other liabilities less assets-(3.8)% (5,247,003)
NET ASSETS-100% $ 136,854,880
(a) Securities, or a portion thereof, with an aggregate market value of
$63,460,036, have been segregated to collateralize forward exchange currency
contracts.
(b) 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, 1999,
these securities amounted to $21,957,559 or 16.04% of net assets.
(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) Security is in default and is non-income producing.
(e) Will be converted to Euro based upon a predetermined schedule.
(f) Non-income producing security.
(g) Annualized yield to maturity at purchase date.
(h) Unit consists of 1 senior discount note and 2.77 junior subordinate
debentures.
(i) Consists of $500,000 senior notes and 500 shares of common stock.
Glossary:
FRN-Floating Rate Note.
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
ASSETS
Investments in securities, at value
(cost $153,742,786) $ 142,101,883
Cash, at value (cost $3,199,735) 3,199,458
Interest receivable 2,973,754
Receivable for capital stock sold 1,356,813
Receivable for investment securities sold 1,062,486
Unrealized appreciation of forward exchange
currency contracts 1,021,462
Deferred organization expenses 36,983
Unrealized appreciation of swap contracts 28,597
Total assets 151,781,436
LIABILITIES
Payable for investment securities purchased 13,131,175
Payable for capital stock sold 1,064,242
Dividend payable 375,590
Distribution fee payable 93,031
Advisory fee payable 85,824
Accrued expenses and other liabilities 176,694
Total liabilities 14,926,556
NET ASSETS $ 136,854,880
COMPOSITION OF NET ASSETS
Capital stock, at par $ 13,818
Additional paid-in capital 150,756,047
Distributions in excess of net investment income (1,023,118)
Accumulated net realized loss on investments and
foreign currency transactions (2,125,546)
Net unrealized depreciation of investments and
foreign currency denominated assets and liabilities (10,766,321)
$ 136,854,880
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($33,813,233 / 3,411,568 shares of
capital stock issued and outstanding) $ 9.91
Sales charge--4.25% of public offering price .44
Maximum offering price $10.35
CLASS B SHARES
Net asset value and offering price per share
($79,084,975 / 7,987,491 shares of
capital stock issued and outstanding) $ 9.90
CLASS C SHARES
Net asset value and offering price per share
($22,597,561 / 2,281,807 shares of
capital stock issued and outstanding) $ 9.90
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,359,111 / 137,053 shares of
capital stock issued and outstanding) $ 9.92
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999 ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes
withheld of $13,175) $ 12,794,107
Dividends (net of foreign taxes
withheld of $8,046) 72,416 $ 12,866,523
EXPENSES
Advisory fee 874,909
Distribution fee - Class A 81,191
Distribution fee - Class B 684,598
Distribution fee - Class C 198,819
Custodian 248,203
Transfer agency 193,802
Administration 110,180
Audit and legal 96,984
Registration 69,551
Printing 50,955
Amortization of organization expenses 29,930
Directors' fees 26,115
Miscellaneous 11,666
Total expenses 2,676,903
Net investment income 10,189,620
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions (2,125,545)
Net realized gain on foreign currency
transactions 939,635
Net change in unrealized depreciation of:
Investments (3,285,405)
Foreign currency denominated assets and
liabilities 1,035,326
Net loss on investment transactions (3,435,989)
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,753,631
See notes to financial statements.
11
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 10,189,620 $ 4,526,553
Net realized gain (loss) on investments
and foreign currency transactions (1,185,910) 76,173
Net change in unrealized depreciation
of investments and foreign
currency denominated assets and
liabilities (2,250,079) (7,854,398)
Net increase (decrease) in net assets
from operations 6,753,631 (3,251,672)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (2,526,820) (1,411,993)
Class B (5,848,991) (2,495,352)
Class C (1,694,862) (556,457)
Advisor Class (118,947) (62,751)
Distributions in excess of net
investment income
Class A (75,442) (488,490)
Class B (262,528) (964,594)
Class C (78,399) (214,532)
Advisor Class (5,051) (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 40,879,087 74,331,248
Total increase 37,021,678 63,636,010
NET ASSETS
Beginning of year 99,833,202 36,197,192
End of year $ 136,854,880 $ 99,833,202
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 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
denominated assets and liabilities represents net currency gains
13
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
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. During the current fiscal year, permanent differences,
primarily due to foreign currency gains, resulted in a net increase in
accumulated net realized loss on investment and foreign currency transactions,
a net decrease in distributions in excess of net investment income and a
corresponding increase in additional paid-in capital. 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 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 paid $110,180 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 31, 1999.
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 $193,802, for the year ended October 31, 1999.
For the year ended October 31, 1999, the Fund's expenses were reduced by $5,695
under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $27,984
from the sale of Class A shares and $193,213 and $13,234 in contingent deferred
sales charges imposed upon redemption by shareholders of Class B and Class C
shares, respectively, for the year ended October 31, 1999.
14
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
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 distribution and servicing fees 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 are no distribution and servicing
fees 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 advised the Fund that it has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $4,610,457 and
$642,232 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 $253,161,142 and $229,329,042,
respectively, for the year ended October 31, 1999. There were purchases of
$27,254,353 and sales of $40,230,006 of U.S. government and government agency
obligations for the year ended October 31, 1999.
At October 31, 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 $2,387,461 and
gross unrealized depreciation of investments was $14,028,364 resulting in net
unrealized depreciation of $11,640,903 (excluding foreign currency
transactions).
At October 31, 1999, the Fund had a net capital loss carryforward of $2,125,545
which expires in the year 2007.
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, 1999, the Fund had outstanding forward exchange currency
contracts, as follows:
15
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FORWARD EXCHANGE CURRENCY
BUY CONTRACTS
Australian Dollars,
settling 11/01/99-12/30/99 4,021 $ 2,637,165 $ 2,564,842 $ (72,323)
Canadian Dollars,
settling 11/01/99 546 370,729 370,742 13
Danish Krona,
settling 11/04/99 1,068 154,861 151,107 (3,754)
FORWARD EXCHANGE CURRENCY
SALE CONTRACTS
Australian Dollars,
settling 11/01/99 4,000 2,590,355 2,551,200 39,155
Canadian Dollars,
settling 11/01/99-12/01/99 1,091 737,453 741,705 (4,252)
Danish Krona,
settling 11/04/99 16,386 2,357,710 2,319,246 38,464
Euro,
settling 11/15/99-12/15/99 32,872 35,628,778 34,682,390 946,388
British Pound,
settling 11/30/99 11,019 18,188,643 18,110,872 77,771
-----------
$ 1,021,462
</TABLE>
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 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 year ended October 31, 1999, the Fund did not engage in any options
transactions.
16
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
3. INTEREST RATE SWAP AGREEMENTS
The Fund enters into currency and interest rate swaps to protect itself from
foreign currency and interest rate fluctuations on the underlying debt
instruments. A swap is an agreement that obligates two parties to exchange a
series of cash flows at specified intervals based upon or calculated by
reference to changes in specified prices or rates for a specified amount of an
underlying asset. The payment flows are usually netted against each other, with
the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the foreign securities or currencies.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the value
of investments are recorded for financial statement purposes as unrealized
appreciation or depreciation of investments. Realized gains and losses from
terminated swaps are included in net realized gains on investment transactions.
At October 31, 1999, the Fund had an outstanding interest rate swap contract
with the following terms:
<TABLE>
<CAPTION>
RATE TYPE
----------------------------------
SWAP NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED UNREALIZED
COUNTERPARTY AMOUNT DATE BY THE FUND BY THE FUND APPRECIATION
------------- -------- -------------- ---------------- ----------------- -------------
<C> <C> <C> <C> <C> <C>
Morgan GBP 6/25/04 Floating 6 month Fixed--6.33% US$ 28,597
Guaranty 5,000,000 GBP Libor-BBA*
</TABLE>
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
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 2,169,162 1,598,361 $ 22,169,720 $ 17,759,050
Shares issued in
reinvestment of
dividends and
distributions 149,679 132,962 1,524,262 1,459,025
Shares converted
from Class B 25,906 14,015 261,732 151,910
Shares redeemed (1,348,486) (460,665) (13,762,106) (4,969,798)
Net increase 996,261 1,284,673 $ 10,193,608 $ 14,400,187
* LIBOR (London Interbank Offered Rate)
17
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS B
Shares sold 3,834,483 4,986,132 $ 39,159,037 $ 55,353,973
Shares issued in
reinvestment of
dividends and
distributions 220,611 142,636 2,246,476 1,558,164
Shares converted to
Class A (25,906) (14,015) (261,732) (151,910)
Shares redeemed (1,751,141) (1,050,901) (17,916,604) (11,262,473)
Net increase 2,278,047 4,063,852 $ 23,227,177 $ 45,497,754
CLASS C
Shares sold 1,669,635 1,453,523 $ 17,120,813 $ 15,925,299
Shares issued in
reinvestment of
dividends and
distributions 62,703 24,272 636,061 264,273
Shares redeemed (1,030,285) (281,009) (10,563,627) (3,002,847)
Net increase 702,053 1,196,786 $ 7,193,247 $ 13,186,725
DECEMBER 18, DECEMBER 18,
1997* 1997*
TO TO
OCTOBER 31, OCTOBER 31,
1998 1998
------------- -------------
ADVISOR CLASS
Shares sold 49,768 105,163 $ 514,645 $ 1,180,306
Shares issued in
reinvestment of
dividends and
distributions 11,472 6,251 117,493 67,683
Shares redeemed (35,477) (124) (367,083) (1,407)
Net increase 25,763 111,290 $ 265,055 $ 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 year ended October 31, 1999.
* Commencement of distribution.
18
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
JANUARY 9,
1996(A)
YEAR ENDED OCTOBER 31, TO
------------------------------------ OCTOBER 31,
1999 1998 1997 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) .94 .78(c) .74(c) .69(c)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.22) (.64) 1.02 .95
Net increase in net asset value from
operations .72 .14 1.76 1.64
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.94) (.78) (.75) (.81)
Distributions in excess of net investment
income (.05) (.28) (.28) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.99) (1.42) (1.13) (.81)
Net asset value, end of period $ 9.91 $ 10.18 $ 11.46 $ 10.83
TOTAL RETURN
Total investment return based on net asset
value (d) 7.17% 1.00% 16.83% 17.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $33,813 $24,576 $12,954 $2,295
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.77% 1.89% 1.90% 1.90%(e)
Expenses, before waivers/reimbursements 1.77% 2.08% 4.06% 19.20%(e)
Net investment income 9.34% 7.08% 6.56% 8.36%(e)
Portfolio turnover rate 254% 183% 417% 282%
</TABLE>
See footnote summary on page 22.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
MARCH 21,
1996(F)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1999 1998 1997 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) .87 .69(c) .66(c) .41(c)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (.22) (.63) 1.03 1.01
Net increase in net asset value from
operations .65 .06 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.87) (.69) (.67) (.56)
Distributions in excess of net investment
income (.05) (.30) (.29) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.92) (1.35) (1.06) (.56)
Net asset value, end of period $ 9.90 $ 10.17 $ 11.46 $ 10.83
TOTAL RETURN
Total investment return based on net asset
value (d) 6.44% .27% 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $79,085 $58,058 $18,855 $800
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.47% 2.58% 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 2.47% 2.76% 4.76% 19.57%(e)
Net investment income 8.54% 6.41% 5.86% 7.26%(e)
Portfolio turnover rate 254% 183% 417% 282%
</TABLE>
See footnote summary on page 22.
20
ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MARCH 21,
1996(F)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1999 1998 1997 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) .88 .68(c) .66(c) .39(c)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (.23) (.62) 1.03 1.03
Net increase in net asset value from
operations .65 .06 1.69 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.88) (.68) (.67) (.56)
Distributions in excess of net investment
income (.04) (.31) (.29) -0-
Distributions from net realized gains on
investments -0- (.36) (.10) -0-
Total dividends and distributions (.92) (1.35) (1.06) (.56)
Net asset value, end of period $ 9.90 $ 10.17 $ 11.46 $ 10.83
TOTAL RETURN
Total investment return based on net asset
value (d) 6.44% .27% 16.12% 14.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $22,598 $16,067 $4,388 $750
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.46% 2.58% 2.60% 2.60%(e)
Expenses, before waivers/reimbursements 2.46% 2.77% 4.77% 19.49%(e)
Net investment income 8.52% 6.43% 5.86% 7.03%(e)
Portfolio turnover rate 254% 183% 417% 282%
</TABLE>
See footnote summary on page 22.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GLOBAL STRATEGIC INCOME TRUST
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
----------------------------
DECEMBER 18,
1997(F)
YEAR ENDED TO
OCTOBER 31, OCTOBER 31,
1999 1998
------------- ------------
Net asset value, beginning of period $ 10.18 $ 11.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .98 .85(c)
Net realized and unrealized loss on
investments and foreign currency
transactions (.22) (.84)
Net increase in net asset value from
operations .76 .01
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.98) (.85)
Distributions in excess of net investment
income (.04) (.07)
Total dividends and distributions (1.02) (.92)
Net asset value, end of period $ 9.92 $ 10.18
TOTAL RETURN
Total investment return based on net asset
value (d) 7.58% .07%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 1,359 $ 1,133
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.45% 1.58%(e)
Expenses, before waivers/reimbursements 1.45% 1.77%(e)
Net investment income 9.52% 7.64%(e)
Portfolio turnover rate 254% 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.
22
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, 1999, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, 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, 1999, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated periods, in conformity with generally accepted
accounting principles.
New York, New York
December 21, 1999
23
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.
24
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Limited Maturity Government Fund
Alliance Mortgage Securities Income 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 Health Care 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
25
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.
GSIFAR1099
