------------------------------------------------
HIGH NET WORTH INVESTORS -- CAPITAL APPRECIATION
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Alliance Select
Investor Series
-Technology Portfolio
Semi-Annual Report
April 30, 2000
AllianceCapital [LOGO](R)
The Investment Professional's Choice
<PAGE>
Investment Products Offered
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o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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LETTER TO SHAREHOLDERS
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LETTER TO SHAREHOLDERS
April 4, 2000
Dear Shareholder:
We are pleased to provide the first shareholder letter for the Alliance Select
Investor Series Technology Port folio (the "Portfolio") for the semi- annual
reporting period ended April 30, 2000. While our entry into the market was a
somewhat rocky one, coming as it did amid a substantial technology stock
correction, we are encouraged by our relative performance and confident in the
fundamental outlook for the technology companies in which the Portfolio is
invested.
Investment Objective and Policies
Alliance's senior technology research team believes that the information
technology sector provides attractive opportunities to capture particularly
strong revenue and earnings growth. The Alliance Select Investor Series
Technology Portfolio seeks superior long-term growth of capital. The Port folio
invests predominantly in equity securities of companies that are involved with
the development and utilization of innovative technologies. The Portfolio will
invest at least 65% of its total assets and normally substantially more of the
portfolio in these types of securities.
The Portfolio may also invest from time to time up to 15% of its total assets in
equity securities of privately-owned technology companies or venture capital
investments that are planning an initial public offering (IPO) within a
three-year time period. The Port folio may invest up to 40% of its total as sets
in non-U.S. companies. However, to start, the Portfolio is expected to invest
predominantly in U.S.-based companies.
To take advantage of investment opportunities in technology stocks in both
rising and falling markets, the Portfolio may engage in substantial short
selling and may use certain other investment practices, including options,
futures and forward contracts, and leverage. While these techniques are riskier
than many investment strategies, they do provide greater potential for higher
total return. This Portfolio is designed for the sophisticated investor who
appreciates both the potential and the risks inherent in such strategies.
Investment Results
The following table provides performance data for the Fund and its bench mark,
as represented by the NASDAQ Composite Index, for the one-month period ended
April 30, 2000 (the Fund's inception date for all share classes is March 31,
2000.)
INVESTMENT RESULTS*
Period Ended April 30, 2000
Since Inception**
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Alliance Select
Investor Series
Technology Portfolio
Class A -7.70%
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Class B -7.80%
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Class C -7.70%
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NASDAQ
Composite Index -15.57%
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* The Fund's investment results are total returns for the periods shown as
of April 30, 2000 and are based on the net asset value of each class
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 1
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LETTER TO SHAREHOLDERS
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of shares. 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 NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based
common stocks listed on the NASDAQ Stock Market. The index is market-value
weighted and includes over 5,000 companies. An investor cannot invest
directly in an index and its results are not indicative of any specific
investment, including Alliance Select Investor Series Technology
Portfolio.
** Inception date for all classes of shares is 3/31/00.
Additional investment results appear on pages 4 and 5.
While the Portfolio was down in absolute terms for the month, since it was fully
exposed to the market from the inception date, the relative performance versus
the NASDAQ Composite was quite strong. This was due primarily to good initial
stock selection (on average, the equities we purchased at inception dropped less
than the overall index during the month). During the downdraft, we made
selective purchases of those stocks that we believe have the strongest
fundamentals, many of which participated in the recovery.
Investment Review and Outlook
The volatility of technology stocks, which at the Portfolio's inception seemed
extraordinary, has become a normal daily occurrence. This is mostly a function
of a massive valuation adjustment following the remarkable gains in technology
stocks of the past several quarters. While technology earnings results were
generally quite strong, overall stock performance was weak, as investors
continued to grapple with valuation concerns, inflation fears, and an excess
supply of stock in the form of initial public offerings ("IPOs"), secondaries
and lockup expirations. Questions about the sustainability of growth were
magnified by a few weak quarterly reports. Despite those few notable exceptions,
however, broad technology fundamentals are strong and are likely to remain so
through out this year and into next. The Portfolio's equity positions are built
around the following powerful growth themes: Internet and e-commerce
infrastructure and software, communications infrastructure, wireless data, and
the semiconductor up-cycle.
Valuations are certainly high, even after the recent correction, but in many
cases are, we believe, justified by rapid, even accelerating growth rates. The
correction in valuations could indeed have some positive implications: a return
to fundamental analysis and a greater sensitivity to valuation. That is the
world we are most comfortable in.
Volatility in technology stocks is a fact of life for investors these days, and
even the best companies' stocks will be affected by market downdrafts. However,
we believe that the technology sector offers extraordinary investment
opportunities. We will continue to manage for sector diversity, with the
realization
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2 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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LETTER TO SHAREHOLDERS
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[PHOTO] John D.
Carifa
[PHOTO] Janet A.
Walsh
Portfolio Manager, Janet A. Walsh, has over 5 years of investment experience.
that technology is anything but monolithic and with an investment timeframe that
extends beyond just a few days. We will continue to use leverage with the utmost
care and to seek opportunities to enhance performance through the multiple
investment tools at our disposal. Most importantly, we will continue to select
companies in which we have conviction on continued fundamental improvement, a
clear understanding of the business model, and confidence in the management
team.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Janet A. Walsh
Janet A. Walsh
Vice President
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 3
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PORTFOLIO SUMMARY
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PORTFOLIO SUMMARY
April 30, 2000 (unaudited)
INCEPTION DATE PORTFOLIO STATISTICS
(Class A Shares) Assets ($mil): $930.6
3/31/00
SECTOR BREAKDOWN
Technology:
22.30% Semiconductor
Components
17.24% Computer Software
15.44% Networking Software
12.62% Internet Content [PIE CHART OMITTED]
6.06% Computer Hardware
6.06% Computer Services
4.48% Communication Equipment
Computer Services:
5.71% Broadcasting & Cable
4.25% Telecommunications
5.84% Short-Term
HOLDINGS BY ISSUER COUNTRY
91.46% United States
1.43% Finland
.98% France [PIE CHART OMITTED]
.29% Canada
5.84% Short-Term
All data as of April 30, 2000. The Fund's sector and country breakdowns may vary
over time. These breakdowns are expressed as a percentage of total investments.
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4 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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INVESTMENT RESULTS
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INVESTMENT RESULTS
NAV CUMULATIVE TOTAL RETURNS
AS OF APRIL 30, 2000**
Class A Shares
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Without Sales Charge With Sales Charge
Since Inception* -7.70% -11.59%
Class B Shares
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Without Sales Charge With Sales Charge
Since Inception* -7.80% -11.49%
Class C Shares
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Without Sales Charge With Sales Charge
Since Inception* -7.70% -8.62%
The Fund's investment results represent cumulative total returns. The NAV
returns reflect reinvestment of dividends and/or capital gains distributions in
additional shares without and with 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.
Technology stocks, especially those of smaller, less seasoned companies, tend to
be more volatile than the overall stock market.
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 for all share classes: 3/31/00.
** SEC returns are not yet available as the Fund has not, as of the printing
of this report, completed a full calendar quarter of operation.
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 5
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TEN LARGEST HOLDINGS
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TEN LARGEST HOLDINGS
April 30, 2000 (unaudited)
Percent of
Company Value Net Assets
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Cisco Systems, Inc. $74,111,766 8.0%
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Intel Corp. 58,967,812 6.3
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Oracle Corp. 41,807,313 4.5
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Microsoft Corp. 37,930,050 4.1
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VeriSign, Inc. 36,084,187 3.9
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Dell Computer Corp. 30,014,850 3.2
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Micron Technology, Inc. 26,053,675 2.8
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Lucent Technogies, Inc. 25,901,094 2.8
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Foundry Networks, Inc.(a) 25,717,550 2.7
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PMC-Sierra, Inc. 24,425,688 2.6
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$381,013,985 40.9%
(a) Adjusted for market value of call option written.
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6 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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PORTFOLIO OF INVESTMENTS
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PORTFOLIO OF INVESTMENTS
April 30, 2000 (unaudited)
Company Shares Value
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Common Stocks-94.9%
Technology-84.9%
Communication Equipment-4.5%
Lucent Technologies, Inc. .................... 416,500 $ 25,901,094
Nokia Corp. ADR (Finland) .................... 235,200 13,377,000
Sierra Wireless, Inc. (Canada)(a) ............ 51,000 2,751,873
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42,029,967
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Computer Hardware-6.1%
Dell Computer Corp.(a) ....................... 598,800 30,014,850
Lexmark International Group, Inc.(a) ......... 121,600 14,348,800
Palm, Inc.(a) ................................ 457,000 12,453,250
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56,816,900
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Computer Services-6.1%
Sapient Corp.(a) ............................. 263,800 20,889,663
VeriSign, Inc.(a) ............................ 258,900 36,084,187
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56,973,850
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Computer Software-17.4%
Aspect Development, Inc.(a) .................. 156,809 10,839,422
BEA Systems, Inc.(a) ......................... 326,600 15,758,450
Business Objects S.A. ADR (France)(a) ........ 94,100 9,210,037
Mercury Interactive Corp.(a) ................. 165,000 14,850,000
Microsoft Corp.(a) ........................... 543,800 37,930,050
Oracle Corp.(a) .............................. 523,000 41,807,313
Rational Software Corp.(a) ................... 151,800 12,921,975
VERITAS Software Corp.(a) .................... 172,100 18,460,414
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161,777,661
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Internet Content-12.7%
724 Solutions, Inc.(a) ....................... 375,000 18,937,500
Aether Systems, Inc.(a) ...................... 75,400 12,552,922
America Online, Inc.(a) ...................... 288,500 17,255,906
Art Technology Group, Inc.(a) ................ 207,700 12,617,775
eBay, Inc.(a) ................................ 93,800 14,931,787
Portal Software, Inc.(a) ..................... 200,000 9,175,000
PSINet, Inc.(a) .............................. 734,000 17,019,625
TIBCO Software, Inc.(a) ...................... 178,700 15,915,469
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118,405,984
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Networking Software-15.6%
Cisco Systems, Inc.(a) ....................... 1,069,000 74,111,766
E-Tek Dynamics, Inc.(a) ...................... 56,300 11,527,425
Foundry Networks, Inc.(a) .................... 299,300 27,236,300
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 7
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PORTFOLIO OF INVESTMENTS
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Shares or
Principal
Amount
Company (000) Value
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Micromuse, Inc.(a) ........................... 90,000 $ 8,831,250
RADVision Ltd.(a) ............................ 339,800 12,997,350
Turnstone Systems, Inc.(a) ................... 92,500 10,175,000
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144,879,091
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Semiconductor Components-22.5%
Altera Corp.(a) .............................. 204,800 20,940,800
Applied Materials, Inc.(a) ................... 201,600 20,525,400
Applied Micro Circuits Corp.(a) .............. 46,700 6,018,462
Flextronics International Ltd.(a) ............ 134,400 9,441,600
Intel Corp. .................................. 465,000 58,967,812
Micron Technology, Inc. ...................... 187,100 26,053,675
PMC-Sierra, Inc.(a) .......................... 127,300 24,425,688
Sanmina Corp.(a) ............................. 222,700 13,375,919
Teradyne, Inc.(a) ............................ 181,800 19,998,000
Varian Semiconductor Equipment
Associates, Inc.(a) ....................... 140,000 9,415,000
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209,162,356
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790,045,809
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Consumer Services-10.0%
Broadcasting & Cable-5.7%
AT&T Corp. ................................... 324,400 15,145,425
AT&T Corp.-Liberty Media Group Cl. A(a) ...... 200,000 9,987,500
Comcast Corp.(a) ............................. 475,000 19,029,687
Macrovision Corp.(a) ......................... 192,000 9,384,000
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53,546,612
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Telecommunications-4.3%
Amdocs Ltd.(a) ............................... 237,300 16,062,244
Dobson Communications Corp.(a) ............... 194,000 4,971,250
Network Plus Corp.(a) ........................ 200,000 3,800,000
Western Wireless Corp.(a) .................... 301,600 14,985,750
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39,819,244
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93,365,856
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Total Common Stocks
(cost $915,584,613) ....................... 883,411,665
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Short-Term Investment-5.9%
Time Deposit-5.9%
Bank of New York Corp. .......................
5.88%, 5/01/00
(amortized cost $54,748,000) .............. $54,748 54,748,000
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Total Investments-100.8%
(cost $970,332,613) ....................... 938,159,665
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8 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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PORTFOLIO OF INVESTMENTS
------------------------
Company Contracts(b) Value
-------------------------------------------------------------------------------
Call Option Written-(0.2%)(a)
Foundry Networks, Inc.
expiring May '00 @ $90
(premiums received $1,053,685) ........ 1,500 $ (1,518,750)
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Total Investments, Net of Outstanding
Call Option Written-100.6%
(cost $969,278,928) ................... 936,640,915
Other assets less liabilities-(0.6)% ..... (6,072,556)
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Net Assets-100% .......................... $ 930,568,359
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(a) Non-income producing security.
(b) One contract relates to 100 shares.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 9
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STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
April 30, 2000 (unaudited)
Assets
Investments in securities, at value (cost $970,332,613) ..... $ 938,159,665
Cash ........................................................ 7,415,043
Receivable for investment securities sold ................... 65,759,018
Receivable for capital stock sold ........................... 7,898,168
Receivable for initial margin deposit on future contracts ... 2,075,062
Deferred offering costs ..................................... 144,422
Interest and dividends receivable ........................... 35,134
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Total assets ................................................ 1,021,486,512
---------------
Liabilities
Outstanding call options written, at value (premiums
received $1,053,685) ..................................... 1,518,750
Payable for investment securities purchased ................. 80,307,620
Variation margin payable on futures contracts ............... 5,818,501
Advisory fee payable ........................................ 1,640,363
Payable for capital stock redeemed .......................... 693,682
Distribution fee payable .................................... 580,602
Accrued expenses ............................................ 358,635
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Total liabilities ........................................... 90,918,153
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Net Assets .................................................. $ 930,568,359
===============
Composition of Net Assets
Capital stock, at par ....................................... $ 100,845
Additional paid-in capital .................................. 1,009,063,485
Accumulated net investment loss ............................. (739,601)
Accumulated net realized loss on investments
and futures transactions ................................. (39,412,017)
Net unrealized depreciation of investments, written options,
futures transactions and foreign currency denominated
assets and liabilities ................................... (38,444,353)
---------------
$ 930,568,359
===============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($333,164,628/36,081,833 shares of capital stock
issued and outstanding) .................................. $9.23
Sales charge--4.25% of public offering price ................ .41
-----
Maximum offering price ...................................... $9.64
=====
Class B Shares
Net asset value and offering price per share
($362,202,459/39,268,616 shares of capital stock
issued and outstanding) .................................. $9.22
=====
Class C Shares
Net asset value and offering price per share
($235,201,272/25,495,044 shares of capital stock
issued and outstanding) .................................. $9.23
=====
See notes to financial statements.
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10 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Period Ended April 30, 2000(a) (unaudited)
Investment Income
Dividends ....................................... $ 8,330
Interest ........................................ 1,687,247 $ 1,695,577
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Expenses
Advisory fee .................................... 1,640,363
Distribution fee - Class A ...................... 83,007
Distribution fee - Class B ...................... 301,410
Distribution fee - Class C ...................... 196,185
Transfer agency ................................. 52,638
Custodian ....................................... 43,865
Registration .................................... 38,595
Printing ........................................ 24,862
Amortization of offering expenses ............... 13,578
Organization expenses ........................... 12,000
Administrative fee .............................. 11,000
Audit and legal ................................. 9,517
Directors' fees ................................. 2,000
Miscellaneous ................................... 6,158
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Total expenses .................................. 2,435,178
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Net investment loss ............................. (739,601)
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Realized and Unrealized Gain (Loss) on
Investments, Options Written, Futures
and Foreign Currency Transactions
Net realized gain on investment
transactions ................................. 451,689
Net realized loss on futures transactions ....... (39,863,706)
Net unrealized appreciation/depreciation of
investments, options written, futures and
foreign currency transactions ................ (38,444,353)
------------
Net loss on investments ......................... (77,856,370)
------------
Net Decrease in Net Assets from
Operations ................................... $(78,595,971)
============
(a) Commencement of operations, March 30, 2000.
See notes to financial statements.
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 11
<PAGE>
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STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Period Ended
April 30, 2000(a)
(unaudited)
-----------------
Decrease in Net Assets from Operations
Net investment loss ........................................ $ (739,601)
Net realized loss on investment and futures transactions ... (39,412,017)
Net unrealized appreciation/depreciation of investments,
options written, futures and foreign currency
transactions ............................................ (38,444,353)
---------------
Net decrease in net assets from operations ................. (78,595,971)
Capital Stock Transactions
Net increase ............................................... 1,009,164,330
---------------
Total increase ............................................. 930,568,359
Net Assets
Beginning of period ........................................ -0-
---------------
End of period .............................................. $ 930,568,359
===============
(a) Commencement of operations, March 30, 2000.
See notes to financial statements.
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12 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2000 (unaudited)
NOTE A
Significant Accounting Policies
Alliance Select Investor Series, Inc. (the "Company") is registered under the In
vestment Company Act of 1940 as a non-diversified, open-end management
investment company. The Company which is a Maryland corporation, operates as a
series company currently comprised of two portfolios, the Premier Port folio and
the Technology Port folio. Each series is considered to be a separate entity for
financial reporting and tax purposes. The Technology Portfolio (the "Fund")
commenced operations on March 30, 2000. The Fund offers Class A, Class B and
Class C 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. 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) or on the
Nasdaq Stock Market, Inc. 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 (but
excluding securities traded on The Nasdaq Stock Market, Inc.), 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
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ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 13
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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.
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 $12,000 were charged to the Fund as incurred prior to
commencement of operations. Offering expenses of $158,000 have been deferred and
are being 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.
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14 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
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NOTES TO FINANCIAL STATEMENTS
-----------------------------
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.
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
1.50% 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 NASDAQ Composite In x. For
the period from April 1, 2000 through March 31, 2001, the Adviser will receive a
minimum fee, payable monthly, equal to .50% annualized of the average daily 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 2.50%, based on the investment
performance of the Class A shares of the Fund in relation to the investment
record of the NASDAQ Composite Index. The fee will equal 1.50% annualized if the
performance of Class A shares equals the performance of the Index. During the
period ended April 30, 2000, the effective advisory fee was at the annualized
rate of 2.12% of the Fund's average daily net assets.
The Fund and the Adviser have entered into an Expense Limitation Agreement (the
"Agreement"), under which the Adviser has agreed to waive its fees and, if
necessary, reimburse expenses for the period from March 30, 2000 (commencement
of operations of the Fund) to March 31, 2001, to the extent necessary to prevent
total Fund operating expenses from exceeding the annual rate of 3.25% of average
daily net assets for Class A shares and 3.95% 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 March 31, 2003,
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. At April 30, 2000, there were
no expenses waived and reimbursed by the Adviser that are subject to repayment.
Pursuant to the advisory agreement, the Adviser provides certain legal and
accounting services for the Fund. For the period ended April 30, 2000, such fees
amounted to $11,000.
Alliance Fund Distributors, Inc. (the "Distributor") a wholly-owned sub-
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 15
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
sidiary 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
$52,404 from the sale of Class A shares and $97,602 and $26,465 in contingent
deferred sales charges imposed upon redemptions by shareholders of Class B and
Class C shares, respectively, for the period ended April 30, 2000.
Brokerage commissions paid on investment transactions for the period ended April
30, 2000, amounted to $143,917, 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 Funds have adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the In vestment 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 $15,895,448 and
$2,740,699 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 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 in vestments
and U.S. government securities) aggregated $921,938,599 and $6,805,674,
respectively, for the period ended April 30, 2000. There were no purchases or
sales of U.S. government or government agency obligations for the period ended
April 30, 2000.
At April 30, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $45,651,669 and
gross unrealized depreciation of investments was $77,824,617 resulting in net
unrealized depreciation of $32,172,948.
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments.
--------------------------------------------------------------------------------
16 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the time it was closed. At April 30, 2000, the Fund had outstanding futures
contracts, as follows:
<TABLE>
<CAPTION>
Number of Expiration Original Value at Unrealized
Type Contracts Position Month Value April 30, 2000 Depreciation
---------- --------- -------- ---------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
NASDAQ 100 247 Short June 2000 $88,288,499 $94,107,000 (5,818,501)
</TABLE>
2. Options Transactions
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.
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 ac counted 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 re corded 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 Funds 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.
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 17
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Transactions in options written for the period ended April 30, 2000 were as
follows:
Number of
Contracts Premiums
--------------- ---------------
Options outstanding at beginning of period.... -0- $ -0-
Options written............................... 1,500 1,053,685
--------------- ---------------
Options outstanding at April 30, 2000......... 1,500 $ 1,053,685
--------------- ---------------
3. 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.
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
----------------- -----------------
March 30, 2000(a) March 30, 2000(a)
to to
April 30, 2000 April 30, 2000
(unaudited) (unaudited)
----------------------------------------
Class A
Shares sold 36,839,857 $ 367,463,713
--------------------------------------------------------------------------------
Shares redeemed (758,024) (6,568,331)
--------------------------------------------------------------------------------
Net increase 36,081,833 $ 360,895,382
================================================================================
Class B
Shares sold 39,672,384 $ 396,374,032
--------------------------------------------------------------------------------
Shares redeemed (403,768) (3,470,485)
--------------------------------------------------------------------------------
Net increase 39,268,616 $ 392,903,547
================================================================================
(a) Commencement of operations.
--------------------------------------------------------------------------------
18 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
----------------- -----------------
Shares Amount
----------------- -----------------
March 30, 2000(a) March 30, 2000(a)
to to
April 30, 2000 April 30, 2000
(unaudited) (unaudited)
----------------------------------------
Class C
Shares sold 25,885,283 $ 258,663,205
--------------------------------------------------------------------------------
Shares redeemed (390,239) (3,297,804)
--------------------------------------------------------------------------------
Net increase 25,495,044 $ 255,365,401
================================================================================
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 period ended April 30, 2000.
(a) Commencement of operations.
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 19
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding For The Period
<TABLE>
<CAPTION>
----------- ----------- -----------
Class A Class B Class C
----------- ----------- -----------
March 30, March 30, March 30,
2000(a) to 2000(a) to 2000(a) to
April 30, April 30, April 30,
2000 2000 2000
(unaudited) (unaudited) (unaudited)
-------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period ................... $ 10.00 $ 10.00 $ 10.00
-------------------------------------------------
Income From Investment Operations
Net investment loss(b) ................................. -0- (.01) (.01)
-------------------------------------------------
Net realized and unrealized loss on investment
transactions ......................................... (.77) (.77) (.76)
-------------------------------------------------
Net decrease in net asset value from operations ........ (.77) (.78) (.77)
-------------------------------------------------
Net asset value, end of period ......................... $ 9.23 $ 9.22 $ 9.23
=================================================
Total Return
Total investment return based on net asset value(c) .... (7.70)% (7.80)% (7.70)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) .............. $333,165 $362,202 $235,201
Ratios to average net assets of:
Expenses(d) .......................................... 2.69% 3.40% 3.40%
Net investment loss(d) ............................... (.51)% (1.20)% (1.20)%
Portfolio turnover rate ................................ 1.20% 1.20% 1.20%
</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.
--------------------------------------------------------------------------------
20 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
consumer price index (CPI)
An index that measures the cost of living. The CPI is published by the U.S.
Bureau of Labor Statistics.
equity
Another term for stock.
initial public offering (IPO)
A sale of securities by a previously private company to the general public.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
share
A unit which represents ownership in a mutual fund or stock.
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 21
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $394
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 28 of the FORTUNE 100 companies and public retirement funds in 33
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 276
investment professionals in 22 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 3/31/00.
--------------------------------------------------------------------------------
22 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio and Alliance
Select Investor Series Technology Portfolio, which generally have a
$10,000 minimum initial investment) and may make subsequent investments of
$50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 23
<PAGE>
------------------
BOARD OF DIRECTORS
------------------
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
Christopher M. Taub, Senior Vice President
Peter Anastos, Vice President
Thomas J. Bardong, Vice President
Andrew J. Frank, Vice President
Gerald T. Malone, Vice President
Janet A. Walsh, Vice President
Steven R. Weller, Vice President
Anthony V. Xuereb, 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.
--------------------------------------------------------------------------------
24 o ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Limited Maturity Government Fund
Mortgage Securities Income Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
ALLIANCE SELECT INVESTOR SERIES -- TECHNOLOGY PORTFOLIO o 25
<PAGE>
Alliance Select Investor Series -----------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
-----------------
ALLIANCE CAPITAL [LOGO] (R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
SISTPSR400
