ALLIANCE SELECT INVESTOR SERIES PREMIER PORTFOLIO
ANNUAL REPORT
OCTOBER 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
December 28, 1999
Dear Shareholder:
We are pleased to provide the investment results and market activity for
Alliance Select Investor Series Premier Portfolio (the "Fund") for the annual
reporting period ended October 31, 1999. The Fund's investment objective is to
seek long-term growth of capital through all market conditions. The Fund
invests a majority of its assets in a core portfolio of stocks of large,
intensely researched, high-quality companies that we believe are likely to
achieve superior earnings growth. The Fund's core portfolio typically consists
of the 25 companies that are the most highly regarded at any point in time. The
balance of the Fund's portfolio may be invested in equity securities of other
U.S. and non-U.S. companies that we believe have exceptional growth potential.
INVESTMENT RESULTS
The following table shows how the Fund performed over the six- and 12-month
periods ended October 31, 1999. For comparison, we have shown returns for the
overall U.S. stock market, as represented by the unmanaged Standard & Poor's
500 Stock Index ("S&P 500"), and the Russell 1000 Growth Stock Index.
The Fund outperformed its benchmarks for the six- and 12-month periods ended
October 31, 1999 primarily due to strong stock selection.
INVESTMENT RESULTS*
Periods Ended October 31, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE SELECT INVESTOR SERIES -
PREMIER PORTFOLIO
Class A 10.44% 48.79%
Class B 10.04% 47.84%
Class C 10.04% 47.68%
S&P 500 2.74% 25.66%
RUSSELL 1000 GROWTH
STOCK INDEX 7.46% 34.25%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIOD AND ARE
BASED ON THE NET ASSET VALUE AS OF OCTOBER 31, 1999. ALL FEES AND EXPENSES
RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED. RETURNS FOR THE FUND
INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE S&P 500 IS AN UNMANAGED INDEX OF 500 U.S. COMPANIES AND IS A COMMON
MEASURE OF THE PERFORMANCE OF THE OVERALL U.S. STOCK MARKET. THE RUSSELL 1000
GROWTH STOCK INDEX CONSISTS OF 1000 OF THE LARGEST STOCKS REPRESENTING
APPROXIMATELY 87% OF THE U.S. EQUITY MARKET. THE INDICES REFLECT NO FEES OR
EXPENSES. AN INVESTOR CANNOT INVEST DIRECTLY IN THE INDICES.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 4.
THE YEAR IN REVIEW
The market rebounded quite nicely in the fiscal first quarter (November 1998 to
January 1999) as fear of a financial meltdown, largely due to "The Asian
Contagion," subsided. Actions we took in the weak July to October 1998 period
to position the Fund's portfolio for a rebound in the market allowed us to get
off to a very strong start. In essence, we used our "V-Factor" methodology to
take advantage of the volatility in the market.
As the 1999 calendar year progressed, the market began to wrestle with the
historically high market valuations and the rising interest rates that were
caused by the fear of higher inflation and stronger world growth. Subsequently,
the higher interest rates somewhat contained the market's appreciation during
the summer months (July to September 1999). As fears of higher inflation have
subsided in recent months (October to November 1999), the market has once again
begun to rise.
Despite the volatility in the market, the Fund has had a very strong fiscal
year. Strong stock selection coupled with prudent use of protective strategies
(such as written calls or purchased puts against individual stocks or indices)
enabled the Fund to outperform its benchmarks during the 12-month period ended
October 31, 1999. Standout performers during this period included several
technology names (Nokia Corp., Cisco Systems Inc. and EMC Corp.), several
financial names (Morgan Stanley Dean Witter & Co. and Citigroup Inc.), and
consumer service companies (AT&T Corp-Liberty Media Group, Vodafone AirTouch
PLC and Home Depot Inc.). The
1
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
Fund's performance was helped by not only owning the equity in these stocks,
but also by owning (where appropriate) the underlying options to further
enhance the Fund's returns.
As of the end of October 1999, the short positions in the Fund consisted of
written calls against individual stocks and written calls against market
indices and short sales.
MARKET ENVIRONMENT AND OUTLOOK
As we have discussed before, our investment philosophy is predicated on the
correct marriage of prospective fundamentals and valuation. Our outlook for the
U.S. economy and financial markets remains favorable. In our view, the current
concern about U.S. dollar weakness is overblown since the weakness relates
strictly to the yen, even though the dollar has rallied for most of the year
against the euro. The real domestic economy continues to grow at 2.5% to 3.5%,
creating corporate profits of around 8%, as well as new job opportunities.
Inflation, the key economic fundamental, remains under control. Even though oil
prices are approaching the high $20 range per barrel, energy comprises only 6%
of the consumer price index ("CPI"). The CPI was up a modest 2.2% during the
third calendar quarter, and we are forecasting a 1.5% to 2.5% range for
expected inflation through the year-end in 2000. The underpinnings for our
confidence in continued moderate inflation are sourced directly to the offset
of labor's productivity improvements (approximately 2% to 4%) with healthy
nominal wage gains of 3.5%. Also, U.S. consumers and corporate purchasing
departments remain steadfast against price increases. Our ongoing focus will be
on productivity and unit labor cost trends, since real labor costs represent
two-thirds of the CPI. We believe that the risk of a synchronized global
recovery, which could lead to an overheated situation, is mitigated by the fact
that the international economies remain mixed and that U.S. consumer demand may
slow sometime in the next several quarters. A rise in rates (especially
mortgages) and a modest slump in the stock market will likely dampen future
consumer spending. In congressional testimony, Federal Bank Chairman Alan
Greenspan defined recent and potential tightening as a reversal of the easing
undertaken last fall, rather than the start of a sustained, deliberate program
designed to throttle the economy.
This constructive fundamental outlook should also have positive consequences
for the U.S. bond markets.
We believe that the rest of 1999 and the first half of 2000 will undoubtedly
bring us challenges. These challenges may include everything from dollar/yen
considerations, Y2K purchase lockdowns, and finally the psychological overhang
of additional Federal Reserve rate increases at some future date. However,
assuming that we can come through this quarter adequately, the year 2000 is
shaping up quite nicely. There should be continued growth in the U.S.,
supplemented by a slightly better tone both in Europe and Asia. Moreover, no
great inflationary strains should emerge in this competitive, technologically
driven environment.
PORTFOLIO STRATEGY
Consistent with our prior guidance, which expressed absolute valuation
concerns, we currently have the Fund's net long position at 100% within an 80%
to 120% range. We would, however, adopt a more defensive strategy if the bond
market were to weaken significantly from current 6.25% levels. Looking past
year-end, corporate earnings and cashflow are projected to grow at a 7% to 10%
rate for the year 2000, which should justify commensurate S&P 500 upside.
Recognizing that current stock prices reflect future corporate performance, we
remain fundamentally focused on the strongest prospective corporate earnings
for the best available prices. We will continue to capture the rich premiums by
selling at-the-money and slightly in-the-money calls on the S&P 500 and NASDAQ,
while purchasing (when appropriate) S&P 500 puts for added protection. It is
important, however, to remember that this is a long-biased Fund. Therefore, we
can mitigate, but not avoid, losses if the market should experience a sustained
decline.
At the end of the fiscal year, the Fund's gross long portfolio had a weighted
average price-to-earnings multiple of 30 times for 24% projected 2000 earnings
growth versus 25 times for 7% earnings growth for the S&P 500. Despite absolute
valuation concerns, we believe that the best relative investment opportunity is
to stay with the Fund's long portfolio positions, which provide strong relative
earnings growth (four times the market's growth rate) for only a modest premium
to the market's valua-
2
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
tion. Our rigorous bottom-up, company-specific research process is especially
important in today's environment where companies with disappointing
fundamentals are treated harshly by the market.
Thank you for your continued interest in Alliance Select Investor Series
Premier Portfolio. 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 and President
Alfred Harrison
Senior Vice President
Michael J. Reilly
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 SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
Alliance Select Investor Series Premier Portfolio seeks long-term capital
appreciation by investing in a non-diversified portfolio of equity securities
of large, intensively researched, high-quality companies that are judged likely
to achieve superior earnings growth.
INVESTMENT RESULTS
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF OCTOBER 31, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
1 Year 48.79% 42.51%
Since Inception* 31.94% 27.51%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
1 Year 47.84% 43.84%
Since Inception* 30.83% 28.61%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
1 Year 47.68% 46.68%
Since Inception* 30.83% 30.83%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (SEPTEMBER
30, 1999)
CLASS A CLASS B CLASS C
------- ------- -------
1 Year 43.63% 44.91% 47.74%
Since Inception* 21.17% 22.17% 24.64%
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.
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 date: 7/29/98 for all share Classes.
4
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
ALLIANCE SELECT INVESTOR SERIES PREMIER PORTFOLIO
GROWTH OF A $10,000 INVESTMENT
7/31/98* TO 10/31/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
ALLIANCE SELECT INVESTOR SERIES PREMIER PORTFOLIO CLASS A: $13,622
RUSSELL 1000 GROWTH INDEX: $13,274
S&P 500 STOCK INDEX: $12,369
7/31/98 10/31/98 10/31/99
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Select Investor Series Premier Portfolio Class A shares (from 7/31/98
to 10/31/99) as compared to the performance of appropriate broad-based indices.
The chart reflects the deduction of the maximum 4.25% sales charge from the
initial $10,000 investment in the Fund and assumes the reinvestment of
dividends and capital gains. Performance for Class B 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 Standard & Poor's 500 Stock Index includes 500 U.S. stocks and is
a common measure of the performance of the overall U.S. stock market.
The unmanaged Russell 1000 Growth Index contains those securities in the
Russell 1000 Stock Index with a greater-than-average growth orientation. The
unmanaged Russell 1000 Stock Index is comprised of 1000 of the largest
capitalized companies that are traded in the United States.
When comparing Alliance Select Investor Series Premier Portfolio to the indices
shown above, you should note that no charges or expenses are reflected in the
performance of the indices.
Alliance Select Investor Series Premier Portfolio
Standard & Poor's 500 Stock Index
Russell 1000 Growth Index
* Closest month-end after the Fund's Class A share inception date of 7/29/98.
5
TEN LARGEST HOLDINGS
OCTOBER 31, 1999
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Nokia Corp. ADR (a) $ 15,695,519 6.0%
Dell Computer Corp. 13,594,350 5.2
Intel Corp. 12,436,463 4.7
Morgan Stanley Dean Witter & Co. 11,320,000 4.3
Home Depot, Inc.(a) 11,155,263 4.3
Tyco International Ltd.(a) 10,651,669 4.1
Cisco Systems, Inc. 10,619,000 4.1
Schering-Plough Corp.(a) 10,592,150 4.0
AT&T Corp.-Liberty Media Group Cl. A 10,207,625 3.9
Microsoft Corp.(a) 8,580,069 3.3
$114,852,108 43.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED OCTOBER 31, 1999
_______________________________________________________________________________
SHARES#
- -------------------------------------------------------------------------------
PURCHASES BOUGHT HOLDINGS 10/31/99
- -------------------------------------------------------------------------------
AT&T Corp. - Liberty Media Group Cl.A 144,300 257,200
Dell Computer Corp. 99,800 338,800
Schering-Plough Corp. 99,000 187,200
Pfizer, Inc. 90,600 123,400
Associates First Capital Corp. Cl.A 76,000 76,000
Intel Corp. 74,200 160,600
Cisco Systems, Inc. 71,750 143,500
Tyco International, Ltd. 63,322 154,444
Morgan Stanley Dean Witter & Co. 63,000 92,000
The Gap, Inc. 57,600 95,700
SALES SOLD HOLDINGS 10/31/99
- -------------------------------------------------------------------------------
McKesson HBOC, Inc. 137,087 -0-
AirTouch Communications, Inc. 49,000 -0-
Chancelor Media Corp. Cl.A 42,700 -0-
Newcourt Credit Group, Inc. 41,600 17,000
IMS Health, Inc. 35,000 18,600
Nokia Corp. ADR 32,300 107,500
Warner-Lambert Co. 23,500 -0-
Carnival Corp. Cl.A 22,200 -0-
Ascend Communications, Inc. 22,000 -0-
Lucent Technologies, Inc. 13,400 -0-
(a) Adjusted for market value of call options purchased and written.
# Adjusted for stock splits.
6
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-76.1%
TECHNOLOGY-30.2%
COMMUNICATION EQUIPMENT-7.2%
EMC Corp. (a)(b) 87,200 $ 6,365,600
Nokia Corp. ADR (Finland) 107,500 12,422,969
------------
18,788,569
COMPUTER HARDWARE-5.8%
Dell Computer Corp. (a)(b) 338,800 13,594,350
Sun Microsystems, Inc. (a) 15,000 1,587,188
------------
15,181,538
COMPUTER SOFTWARE-3.3%
Microsoft Corp. (a) 93,100 8,617,569
INTERNET-3.5%
America Online, Inc. (a)(b) 45,800 5,939,687
eBay, Inc. (a) 4,000 540,500
VeriSign, Inc. (a) 4,000 494,000
Yahoo! Inc. (a) 12,000 2,148,750
------------
9,122,937
NETWORKING SOFTWARE-4.1%
Cisco Systems, Inc. (a)(b) 143,500 10,619,000
Sycamore Networks, Inc. (a) 1,100 236,500
------------
10,855,500
SEMICONDUCTOR COMPONENTS-6.3%
Applied Materials, Inc. (a)(b) 24,900 2,236,331
Intel Corp. (b) 160,600 12,436,463
Solectron Corp. (a)(b) 24,200 1,821,050
------------
16,493,844
------------
79,059,957
CONSUMER SERVICES-22.1%
BROADCASTING & CABLE-8.3%
AMFM, Inc. (a)(b) 42,300 2,961,000
AT&T Corp.-Liberty Media
Group Cl. A (a)(b) 257,200 10,207,625
Clear Channel
Communications, Inc. (a) 30,000 2,411,250
MediaOne Group, Inc. (a)(b) 86,900 6,175,331
------------
21,755,206
ENTERTAINMENT & LEISURE-1.4%
Time Warner, Inc. (b)(c) 53,600 3,735,250
RETAIL - GENERAL MERCHANDISE-11.8%
Costco Wholesale Corp. (a)(b) 50,300 4,039,719
Dayton Hudson Corp. (b) 74,200 4,795,175
Home Depot, Inc. (b) 95,900 7,240,450
Kohl's Corp. (a)(b) 49,100 3,673,294
Lowe's Companies, Inc. 92,800 5,104,000
The Gap, Inc. (b) 95,700 3,552,862
Wal-Mart Stores, Inc. (b) 44,400 2,516,925
------------
30,922,425
TELECOMMUNICATIONS-0.6%
Vodafone AirTouch PLC.
ADR (United Kingdom) (b) 30,000 1,438,125
------------
57,851,006
FINANCE-9.4%
BANKING - REGIONAL-0.8%
Bank of America Corp. (b) 30,400 1,957,000
7
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
SHARES OR
COMPANY CONTRACTS(d) VALUE
- -------------------------------------------------------------------------
BROKERAGE & MONEY MANAGEMENT-5.2%
Citigroup, Inc. (b) 56,875 $ 3,078,359
Morgan Stanley Dean
Witter & Co. 92,000 10,148,750
Goldman Sachs Group, Inc. 5,100 362,100
------------
13,589,209
MORTGAGE BANKING-1.7%
Freddie Mac (b) 81,000 4,379,063
MISCELLANEOUS-1.7%
Associates First Capital
Corp. Cl. A (b) 76,000 2,774,000
MBNA Corp. (b) 54,620 1,508,877
Newcourt Credit Group, Inc. 17,000 279,438
------------
4,562,315
------------
24,487,587
HEALTHCARE-8.2%
DRUGS-7.0%
Bristol-Myers Squibb Co. (b) 44,600 3,425,838
Genentech, Inc. 5,700 830,775
Pfizer, Inc. 123,400 4,874,300
Schering-Plough Corp. 187,200 9,266,400
------------
18,397,313
MEDICAL PRODUCTS-1.0%
Medtronic, Inc. (b) 78,000 2,700,750
MEDICAL SERVICES-0.2%
IMS Health, Inc. (b) 18,600 539,400
------------
21,637,463
UTILITY-3.5%
TELEPHONE UTILITY-3.5%
MCI WorldCom, Inc. (a) 74,800 6,418,775
Sprint Corp. 35,000 2,600,937
------------
9,019,712
MULTI-INDUSTRY-2.7%
CAPITAL GOODS-2.7%
General Electric Co. 7,000 948,937
Tyco International Ltd. (b) 154,444 6,168,107
------------
7,117,044
Total Common Stocks
(cost $159,974,890) 199,172,769
CALL OPTIONS PURCHASED-20.0% (A)
AirTouch Communications, Inc.
expiring Jan '00 @ $30 346 3,416,750
American International Group, Inc. (e)
expiring Jan '00 @ $48 300 2,081,250
Associates First Capital
Corp. Cl. A
expiring Jan '00 @ $22.50 650 942,500
expiring Jan '00 @ $25 710 847,562
expiring Jan '01 @ $20 70 127,750
Bank of America Corp.
expiring Jan '00 @ $40 325 800,313
Bristol-Myers Squibb Co.
expiring Jan '00 @ $30 70 329,875
expiring Jan '00 @ $35 100 423,750
expiring Jan '00 @ $40 100 372,500
expiring Jan '01 @ $35 450 1,968,750
Citigroup, Inc.
expiring Jan '00 @ $20 (f) 160 837,000
expiring Jan '00 @ $23.33 (f) 500 2,371,875
Colgate-Palmolive Co.
expiring Jan '00 @ $30 240 735,000
Freddie Mac
expiring Jan '00 @ $35 200 387,500
expiring Jan '00 @ $40 200 290,000
General Electric Co.
expiring Jan '00 @ $50 243 2,091,319
expiring Jan '01 @ $60 95 746,344
8
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
CONTRACTS (D)
OR PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
Home Depot, Inc.
expiring Jan '00 @ $27.50 520 $ 2,512,250
expiring Jan '00 @ $32.50 200 868,750
expiring Jan '00 @ $35 130 533,813
IBM Corp.
expiring Jan '00 @ $45 250 1,350,000
Lowe's Companies, Inc.
expiring Jan '00 @ $30 200 507,500
MBNA Corp.
expiring Jan '00
@ $13.375(f) 1,069 2,325,075
expiring Jan '00 @ $15 3,360 4,410,000
MCI WorldCom, Inc.
expiring Jan '00 @ $25 150 916,875
expiring Jan '00 @ $40 200 960,000
MediaOne Group, Inc.
expiring Jan '00 @ $40 200 630,000
Merrill Lynch & Co., Inc.
expiring Jan '00 @ $45 100 340,000
expiring Jan '00 @ $50 195 577,687
Morgan Stanley Dean Witter & Co.
expiring Jan '00 @ $40 100 710,000
expiring Jan '00 @ $50 75 461,250
Motorola, Inc.
expiring Jan '00 @ $45 170 898,875
Nokia Corp. ADR (Finland)
expiring Jan '00 @ $30 240 2,061,000
expiring Jan '00 @ $35 168 1,355,550
Pfizer, Inc.
expiring Jan '00 @ $23.33 450 742,500
Schering-Plough Corp.
expiring Jan '00 @ $30 540 1,073,250
expiring Jan '00 @ $37.50 200 252,500
Sprint Corp.
expiring Jan '00 @ $40 200 700,000
Time Warner, Inc.
expiring Jan '00 @ $35 225 788,906
Tyco International Ltd.
expiring Jan '00 @ $15 660 1,658,250
expiring Jan '00 @ $20 1350 2,851,875
United Technologies Corp.
expiring Jan '00 @ $35 400 1,035,000
expiring Jan '00 @ $40 150 313,125
expiring Jan '01 @ $35 250 684,375
Wal-Mart Stores, Inc.
expiring Jan '00 @ $20 600 2,223,750
Total Call Options Purchased
(cost $39,850,937) 52,512,194
SHORT TERM INVESTMENT-7.0%
COMMERCIAL PAPER-7.0 %
General Electric Capital Corp.
5.10%, 11/01/99
(cost $18,356,000) $18,356 18,356,000
TOTAL INVESTMENTS-103.1%
(cost $218,181,827) 270,040,963
CALL OPTIONS WRITTEN-(1.2%) (A)
Chicago Board Options Exchange
NASDAQ 100 Index
expiring Nov '99 @ $2440 10 (197,500)
expiring Nov '99 @ $2460 30 (600,375)
expiring Nov '99 @ $2480 30 (555,000)
Colgate-Palmolive Co.
expiring Nov '99 @ $47.50 61 (81,587)
EMC Corp.
expiring Nov '99 @ $70 260 (139,750)
Microsoft Corp.
expiring Nov '99 @ $90 75 (37,500)
Nokia Corp. ADR (Finland)
expiring Nov '99 @ $100 90 (144,000)
Standard & Poor's 100 Index
expiring Nov '99 @ $1275 15 (144,750)
expiring Nov '99 @ $1290 25 (222,500)
expiring Nov '99 @ $1295 15 (128,250)
9
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
SHARES OR
COMPANY CONTRACTS (D) VALUE
- -------------------------------------------------------------------------
Sun Microsystems, Inc.
expiring Nov '99 @ $90 150 $ (251,250)
Tyco International Ltd.
expiring Nov '99 @ $45 170 (26,563)
Vodafone AirTouch PLC.
ADR (United Kingdom)
expiring Nov '99 @ $42 200 (128,750)
expiring Nov '99 @ $48 450 (75,938)
Total Call Options Written
(premiums received $1,566,891) (3,080,213)
SECURITIES SOLD SHORT-(0.0%)
Martha Stewart Living Omnimedia, Inc. (a)
(proceeds $118,737) 3,000 (110,625)
TOTAL INVESTMENTS, NET OF OUTSTANDING
CALL OPTIONS WRITTEN AND SECURITIES
SOLD SHORT-101.9%
(cost $216,496,199) 266,850,125
Other assets less liabilities-(1.9%) (5,052,398)
NET ASSETS-100% $261,797,727
(a) Non-income producing security.
(b) Security, or a portion thereof, which has been segregated to collateralize
written call options and short sales. This collateral has a total market value
of approximately $86,655,728.
(c) Security trades with preferred stock purchase rights expiring January 20,
2004.
(d) One contract relates to 100 shares unless indicated otherwise.
(e) One contract relates to 125 shares.
(f) One contract relates to 150 shares.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $218,181,827) $270,040,963
Receivable for capital stock sold 2,671,980
Receivable for investment securities sold 1,401,668
Dividends receivable 19,024
Other assets 10,000
Total assets 274,143,635
LIABILITIES
Due to custodian 91,923
Payable for investment securities purchased 7,377,462
Outstanding call options written, at value
(premiums received $1,566,891) 3,080,213
Payable for capital stock redeemed 957,871
Advisory fee payable 259,505
Distribution fee payable 156,816
Securities sold short, at value (proceeds $118,737) 110,625
Accrued expenses 311,493
Total liabilities 12,345,908
NET ASSETS $261,797,727
COMPOSITION OF NET ASSETS
Capital stock, at par $ 18,599
Additional paid-in capital 209,160,079
Accumulated net realized gain on investments, short sales
and written option transactions 2,265,123
Net unrealized appreciation of investments, short sales
and options written 50,353,926
$261,797,727
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($84,657,169 / 5,971,900 shares of capital stock issued
and outstanding) $14.18
Sales charge--4.25% of public offering price .63
Maximum offering price $14.81
CLASS B SHARES
Net asset value and offering price per share
($115,623,545 / 8,242,462 shares of capital stock issued
and outstanding) $14.03
CLASS C SHARES
Net asset value and offering price per share
($61,517,013 / 4,384,273 shares of capital stock issued
and outstanding) $14.03
See notes to financial statements.
11
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $12,215) $ 499,596
Interest 335,764 $ 835,360
EXPENSES
Advisory fee 2,456,775
Distribution fee - Class A 168,875
Distribution fee - Class B 779,391
Distribution fee - Class C 414,057
Amortization of offering expenses 162,388
Custodian 120,537
Administrative fee 106,000
Repayment to Adviser (see Note B) 102,622
Transfer agency 89,749
Registration 80,299
Audit and legal 77,407
Printing 74,192
Directors' fees 26,000
Miscellaneous 23,984
Interest expense on short sales 5,788
Total expenses 4,688,064
Less: expenses waived (see Note B) (31,750)
Net expenses 4,656,314
Net investment loss (3,820,954)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SHORT SALES AND OPTIONS WRITTEN
Net realized gain on investment
transactions 12,317,516
Net realized loss on written option
transactions (1,593,018)
Net realized loss on short sale
transactions (83,296)
Net change in unrealized appreciation
of investments, short sales and
options written 47,407,910
Net gain on investments 58,049,112
NET INCREASE IN NET ASSETS FROM OPERATIONS $54,228,158
See notes to financial statements.
12
STATEMENT OF CHANGES
IN NET ASSETS
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
JULY 29,
YEAR ENDED 1998(A)
OCTOBER 31, TO
1999 OCT. 31, 1998
----------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (3,820,954) $ (295,432)
Net realized gain (loss) on investment
and written option transactions 10,641,202 (4,555,125)
Net change in unrealized appreciation
of investments, short sales and
options written 47,407,910 2,946,016
Net increase (decrease) in net assets
from operations 54,228,158 (1,904,541)
COMMON STOCK TRANSACTIONS
Net increase 121,943,450 87,430,460
Total increase 176,171,608 85,525,919
NET ASSETS
Beginning of period 85,626,119 100,200
End of period $261,797,727 $85,626,119
(a) Commencement of operations
See notes to financial statements.
13
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Premier Portfolio (the "Fund"), the initial portfolio of Alliance Select
Investor Series, Inc. (the "Company") was incorporated in the state of Maryland
on May 21, 1998 and is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. The Fund offers Class
A, Class B and Class C shares. Prior to commencement of operations on July 29,
1998, the Fund had no operations other than the sale to Alliance Capital
Management L.P. (the "Adviser") of 10,000 shares of Class A and 10 shares of
each of Class B and Class C for the aggregate amount of $100,000 on Class A
shares and $100 on each of Class B and Class C shares on June 25, 1998. 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. All three classes
of shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The financial statements have
been prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or, if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities. Listed put or call options purchased
by the Fund are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day.
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 foreign exchange gains or losses represent foreign exchange gains
and losses from sales of investments and forward currency exchange contracts,
holding of foreign currencies, currency gains or losses realized between the
trade and settlement dates on foreign security transactions, and the difference
between the amounts of dividends, interest and foreign taxes receivable
recorded on the Fund's books and the U.S. dollar equivalent amounts actually
received or paid. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates would be
reflected as a component of net unrealized appreciation (depreciation) of
investments and foreign currency denominated assets and liabilities.
14
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provision for federal income or excise taxes is
required.
4. ORGANIZATION AND OFFERING EXPENSES
Organization expenses of $62,500 were charged to the Fund as incurred prior to
commencement of operations and reimbursed by the Adviser. Offering expenses of
$216,500 have been fully amortized on a straight-line basis over a one year
period.
5. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income (or expense on securities sold short) is recorded on the
ex-dividend date. Interest income is accrued daily. Investment transactions are
accounted for on the date securities are purchased or sold. Investment gains
and losses are determined on the identified cost basis. The Fund accretes
discounts as adjustments to interest income.
6. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the 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.
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 with 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 net investment loss, resulted in net decrease in accumulated
net investment loss and a corresponding decrease in accumulated net realized
gain on investment transactions. 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") a monthly fee at an annualized rate of
1.10% of the Fund's average daily net assets (the "Basic Fee") and an
adjustment to the Basic Fee based upon the investment performance of the Class
A shares of the Fund in relation to the investment record of the Russell 1000
Growth Index. For the period from August 1, 1998 through July 31, 1999, the
Adviser will receive a minimum fee payable monthly equal to .80% annualized of
the average net assets of the Fund for each day included in such annual period.
The fee paid to the Adviser for this period may be increased to 1.40%, based on
the investment performance of the Class A shares of the Fund in relation to the
investment record of the Russell 1000 Growth Index. During the year ended
October 31, 1999, the effective advisory fee was at the annualized rate of
1.40% of the Fund's average daily net assets.
The Fund and the Adviser have entered into an Expense Limitation Agreement (the
"Agreement"), dated June 29, 1998, under which the Adviser has agreed to waive
its fees and, if necessary, reimburse expenses for the period from May 21, 1998
(date of organization of the Fund) to July 31, 1999, exceeding the annual rate
of 2.50% of average daily net assets for Class A shares and 3.20% of average
daily net assets for Class B shares and Class C shares, respectively. Under the
Agreement, any waivers or reimbursements made by the Adviser during this period
are subject to repayment by the Fund in subsequent periods, but no later than
July 31, 2001, provided that repayment does not result in the Fund's aggregate
expenses in those subsequent periods exceeding the foregoing expense
limitations. Further, the aggregate repayment to the Adviser will not exceed
the sum of the Fund's organization costs and initial offering expenses. During
the year ended October 31, 1999, the Fund repaid $102,622 of such previously
waived and reimbursed expenses to the Adviser. At October 31, 1999, the total
amount of expenses waived and reimbursed by the
15
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
Adviser that are subject to repayment amounted to $9,413.
Pursuant to the advisory agreement, the Adviser provides certain legal and
accounting services for the Fund. For the year ended October 31, 1999, such
fees amounted to $106,000. In addition, the Adviser agreed to waive a portion
of its fees for such services. Such waiver amounted to $31,750.
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 $52,230 for the year ended October 31, 1999.
For the year ended October 31, 1999, the Fund's expenses were reduced by $3,984
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 charge of $71,900
from the sale of Class A shares and $229,187 and $26,903 in contingent deferred
sales charges imposed upon redemptions by shareholders of Class B and Class C
shares, respectively, for the year ended October 31, 1999.
Brokerage commissions paid on investment transactions for the year ended
October 31, 1999, amounted to $338,819, none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution and servicing fees to the Distributor
at an annual rate of up to .30 of 1% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. 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
$2,671,673 and $392,459, for Class B and C shares, respectively. Such costs may
be recovered from the Fund in future periods so long as the Agreement is in
effect. In accordance with the Agreement there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the 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 securities) aggregated $224,914,106 and $136,652,070,
respectively, for the year ended October 31, 1999. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
October 31, 1999.
At October 31, 1999, the cost of investments for federal income tax purposes
was $216,077,458. Gross unrealized appreciation of investments was $56,148,874
and gross unrealized depreciation of investments was $5,376,207 resulting in
net unrealized appreciation of $50,772,667.
The Fund utilized a capital loss carryover of $4,455,022 in the current year.
1. OPTIONS TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) options on market
indices and covered put and call options on U.S. securities that are traded on
U.S. securities exchanges and over-the-counter markets.
16
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
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 the premium and any 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 writing options which expire unexercised are recorded by
the Fund on the expiration date as realized gains from option transactions. The
difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase transaction, as a realized loss. If a written call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether the Fund has realized a gain or loss. If a
written put option is exercised, the premium reduces the costs basis of the
security purchased by the Fund. In writing covered options, the Fund bears the
market risk of an unfavorable change in the price of the security underlying
the written option. Exercise of an option written by the Fund could result in
the Fund selling or buying a security at a price different from the current
market value.
Transactions in options written for the year ended October 31, 1999 were as
follows:
NUMBER PREMIUMS
OF CONTRACTS RECEIVED
------------ -------------
Options outstanding at beginning of year 50 $ 26,099
Options written 7,292 17,304,696
Options terminated in closing purchase
transactions (5,641) (15,628,384)
Options expired (75) (135,520)
Options outstanding at October 31, 1999 1,626 $ 1,566,891
2. SECURITIES SOLD SHORT
The Fund may sell securities short. A short sale is a transaction in which the
Fund sells securities it does not own, but has borrowed, in anticipation of a
decline in the market price of the securities. The Fund is obligated to replace
the borrowed securities at their market price at the time of replacement. The
Fund's obligation to replace the securities borrowed in connection with a short
sale will be fully secured by collateral deposited with the broker. In
addition, the Fund will consider the short sale to be a borrowing by the Fund
that is subject to the asset coverage requirements of the 1940 Act. Short sales
by the Fund involve certain risks and special considerations. Possible losses
from short sales differ from losses that could be incurred from a purchase of a
security because losses from short sales may be unlimited, whereas losses from
purchases can not exceed the total amount invested. The Fund is currently
paying an interest expense of approximately 6.10% to respective brokers on the
market value of the short sales.
17
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 9,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C. Each
consists of 3,000,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
JULY 29, JULY 29,
YEAR ENDED 1998(A) YEAR ENDED 1998(A)
OCT. 31, TO OCT. 31, TO
1999 OCT. 31, 1998 1999 OCT. 31, 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 5,441,838 3,023,758 $ 68,849,657 $28,756,722
Shares redeemed (2,181,001) (322,695) (27,737,086) (2,854,007)
Net increase 3,260,837 2,701,063 $ 41,112,571 $25,902,715
CLASS B
Shares sold 5,238,554 4,396,418 $ 66,704,207 $42,449,402
Shares redeemed (1,091,630) (300,890) (13,877,483) (2,503,948)
Net increase 4,146,924 4,095,528 $ 52,826,724 $39,945,454
CLASS C
Shares sold 3,260,171 2,447,233 $ 41,534,082 $23,765,875
Shares redeemed (1,075,227) (247,914) (13,529,927) (2,183,584)
Net increase 2,184,944 2,199,319 $ 28,004,155 $21,582,291
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 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.
(a) Commencement of operations.
18
FINANCIAL HIGHLIGHTS
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------------------------------------------------------------
JULY 29, JULY 29, JULY 29,
1998(A) 1998(A) 1998(A)
YEAR ENDED TO YEAR ENDED TO YEAR ENDED TO
OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31,
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.53 $10.00 $ 9.49 $10.00 $ 9.50 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (.22) (.03) (.30) (.04) (.30) (.04)
Net realized and unrealized gain (loss)
on investments and written option
transactions 4.87 (.44) 4.84 (.47) 4.83 (.46)
Net increase (decrease) in net asset
value from operations 4.65 (.47) 4.54 (.51) 4.53 (.50)
Net asset value, end of period $14.18 $ 9.53 $14.03 $ 9.49 $14.03 $ 9.50
TOTAL RETURN
Total investment return based on net
asset value (c) 48.79% (4.70)% 47.84% (5.10)% 47.68% (5.00)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $84,657 $25,835 $115,624 $38,887 $61,517 $20,904
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 2.18% 2.50%(d) 2.87% 3.20%(d) 2.87% 3.20%(d)
Expenses, before waivers/
reimbursements 2.20% 2.70%(d) 2.89% 3.39%(d) 2.89% 3.39%(d)
Net investment loss net of waivers/
reimbursements (1.70)% (1.19)%(d) (2.40)% (1.87)%(d) (2.40)% (1.85)%(d)
Portfolio turnover rate 87% 29% 87% 29% 87% 29%
</TABLE>
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(d) Annualized.
19
REPORT OF INDEPENDENT ACCOUNTANTS
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE SELECT INVESTOR SERIES,
INC. PREMIER PORTFOLIO
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Select Investor Series,
Inc. Premier Portfolio (the "Fund") at October 31, 1999, the results of its
operations for the year then ended and the changes in its net assets and the
financial highlights for the year then ended and for the period July 29, 1998
(commencement of operations) through October 31, 1998, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
December 16, 1999
20
ALLIANCE SELECT INVESTOR SERIES
PREMIER PORTFOLIO
_______________________________________________________________________________
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
ALFRED HARRISON, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
JOHN A. KOLTES, VICE PRESIDENT
DANIEL NORDBY, VICE PRESIDENT
MICHAEL J. REILLY, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
THE BANK OF NEW YORK
One Wall Street
New York, NY 10286
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
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036-2798
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
21
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
22
ALLIANCE SELECT INVESTOR SERIES PREMIER PORTFOLIO
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.
SISPPAR1099
