ALLIANCE STRATEGIC BALANCED FUND
SEMI-ANNUAL REPORT
JANUARY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
February 19, 1997
Dear Shareholder:
The U.S. stock market turned in a robust performance during the 6-month period
ended January 31, 1997. Equities, as measured by the S&P 500 Stock Index,
generated a 24.13% return during this period. Although bonds, as represented by
the Lehman Government/Corporate Bond Index, posted a moderate 4.75% return,
their performance was much improved compared with the negative rates of return
recorded during the previous six months.
Foreign stocks, as measured by the Morgan Stanley Capital International EAFE
(Europe, Australia, Far East) Index, substantially underperformed domestic
equities with a rate of return barely above U.S. dollars. Japanese equities
were the major culprit of foreign stock underperformance. The Nikkei Index
dropped more than 20% during the period.
INVESTMENT RESULTS*
Total returns as of January 31, 1997
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE STRATEGIC BALANCED FUND
Class A 11.88% 11.64%
Class B 11.52 10.89
Class C 11.52 10.89
S&P 500 STOCK INDEX 24.13 26.33
LEHMAN BROTHERS GOVERNMENT/
CORPORATE BOND INDEX 4.75 2.39
* TOTAL RETURNS ARE CUMULATIVE FOR THE PERIOD AND ARE BASED ON THE NET ASSET
VALUE OF EACH CLASS OF SHARES AS OF 1/31/97. TOTAL RETURNS FOR ADVISOR CLASS
SHARES WILL DIFFER DUE TO DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. ALL
FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED, BUT
NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES ARE
PURCHASED OR REDEEMED. RETURNS FOR THE FUND AND ITS COMPARATIVE BENCHMARKS
INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
MARKET ENVIRONMENT
The performance disparities among sectors within the U.S. market were
extraordinarily high during the last half of 1996, repeating the patterns that
characterized the market's behavior in 1995. The large-capitalization sector of
the stock market continued to dominate upward price action, outstripping
performance of the smaller-capitalization issues by a significant margin.
Indeed, the disparity was even greater than that which occurred during the
first half of 1996. This disparate performance appears to be exaggerated by the
flow of new money into mutual funds, especially indexed funds.
INVESTMENT STRATEGY
The Alliance Strategic Balanced Fund was adversely affected by this wide
disparity in the performance among various market sectors. Earlier in the
fiscal year, we had increased the weighting of mid-cap stocks based on
strengthening earnings growth prospects and attractive valuations relative to
large-cap stocks. Similarly, we increased the portfolio's exposure to
international equities because we believed that foreign economies offered the
potential for a cyclical recovery in business conditions and corporate profits.
Both of these decisions detracted from performance relative to the Fund's
benchmark, a combination of the S&P 500 and the Lehman Brothers
Government/Corporate Bond Index.
CURRENT OUTLOOK
The U.S. economy continues to set records for the longevity of this economic
expansion and for the apparent absence of inflationary pressures
notwithstanding low levels of unemployment and high rates of capacity
utilization. Looking forward, we are anticipating a relatively slow-growth,
non-recessionary economic environment. While there are risks to the market if
the economy materially deviates from that track, we believe the prospects for
remaining on that course still appear favorable.
We do expect more moderate returns in equities over the next few years.
Furthermore, we anticipate that the divergence among the rates of return in
various asset classes will narrow. We expect a broader range of stocks will
participate in the rising market and that international equities will
outperform U.S. securities owing to more attractive profit trends and more
compelling valuations. Consequently, we are maintaining our weightings in both
international equities and mid-cap U.S. stocks.
1
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
Given a comparatively stable inflation and interest rate environment, we also
anticipate the gap between bonds and stocks will be much smaller in the coming
period than was reported in 1996. The diversification of the Fund's fixed
income portfolio into mortgage-backed securites and corporate bonds was
beneficial during the most recent six months, as the fixed income component of
the portfolio generated returns in excess of the Lehman index.
As always, we appreciate the confidence you have placed in us, and look forward
to continuing to serve your investment needs.
Sincerely,
John D. Carifa
Chairman
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.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
Alliance Strategic Balanced Fund seeks a high long-term total return by
investing in a combination of equity and debt securities. It invests
principally in a diversified portfolio of dividend-paying common stocks and
fixed-income securities, and also in equity-type securities such as warrants,
preferred stocks and convertible debt instruments.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JANUARY 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 11.64% 6.91%
. Five Years 7.47% 6.54%
. Since Inception* 12.57% 11.80%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 10.89% 7.13%
. Five Years 6.72% 6.72%
. Since Inception* 12.32%** 12.32%**
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 10.89% 9.95%
. Since Inception* 8.06% 8.06%
The average annual total returns reflect reinvestment of dividends and/or
capital gains distributions in additional shares and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/4/90, Class A; 10/23/87, Class B; 8/2/93, Class C.
** Reflects conversion to Class A shares.
3
TEN LARGEST HOLDINGS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Treasury Notes $7,882,354 15.2%
Government National Mortgage Association 3,472,960 6.7
Federal National Mortgage Association 3,101,756 6.0
Federal Home Loan Bank, 7.00%, 9/01/11 986,949 1.9
St. George Bank, Ltd., 7.15%, 10/15/05 844,798 1.6
Quebec Province Canada, 7.50%, 7/15/23 842,103 1.6
Time Warner, Inc. (common stock and bond) 836,968 1.6
John Hancock Mutual Life Insurance Co.,
7.375%, 2/15/24 762,736 1.5
First Union Capital, 7.935%, 1/15/27 740,235 1.4
RAS Laffan Liquefied Natural Gas,
8.294%, 3/15/14 720,125 1.4
$20,190,984 38.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JANUARY 31, 1997 (UNAUDITED)
_______________________________________________________________________________
SHARES OR PRINCIPAL
PURCHASES BOUGHT HOLDINGS 1/31/97
- -------------------------------------------------------------------------------
Deutsche Bank Financial, Inc., 6.70%, 12/13/06 $700,000 $700,000
First Union Capital, 7.935%, 1/15/27 $750,000 $750,000
Government National Mortgage Association,
7.50%, 5/15/26 $1,209,576 $1,209,576
Government National Mortgage Association,
8.00%, 1/15/27 $2,211,000 $2,211,000
Leucadia Capital Trust I, 8.65%, 1/15/27 $500,000 $500,000
Quebec Province Canada, 7.50%, 7/15/23 $850,000 $850,000
RAS Laffan Liquefied Natural Gas,
8.294%, 3/15/14 $700,000 $700,000
Republic of Croatia, 6.50%, 7/31/97 $450,000 $450,000
St. George Bank, Ltd., 7.15%, 10/15/05 $500,000 $850,000
U.S. Treasury Note, 6.375%, 5/15/99 $3,860,000 $3,860,000
SALES SOLD HOLDINGS 1/31/97
- -------------------------------------------------------------------------------
Auburn Hills Trust, 12.00%, 5/01/20 $550,000 -0-
Exxon Corp. 5,700 -0-
Federal National Mortgage Association,
8.50%, 12/01/25 $1,089,000 -0-
Government National Mortgage Association,
7.50%, 1/15/26 $813,992 -0-
North Grumman Corp., 7.75%, 3/01/16 $750,000 -0-
U.S. Treasury Bond, 6.00%, 2/15/26 $545,000 -0-
U.S. Treasury Note, 5.75%, 8/15/03 $375,000 $2,045,000
U.S. Treasury Note, 6.125%, 5/15/98 $4,300,000 $2,005,000
U.S. Treasury Note, 6.50%, 8/15/05 $1,450,000 -0-
U.S. Treasury Note, 7.75%, 1/31/00 $900,000 -0-
4
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-55.0%
UNITED STATES INVESTMENTS-42.2%
TECHNOLOGY-8.5%
COMMUNICATIONS EQUIPMENT-0.6%
ACT Networks, Inc (a) 800 $ 24,600
Cable Design Technologies Corp. (a) 900 27,450
ICG Communications, Inc. (a) 1,500 25,875
Premisys Communications, Inc. (a) 600 16,050
Scientific-Atlanta, Inc. 5,000 95,000
Sterling Commerce, Inc. (a) 2,940 99,592
TeleSpectrum Worldwide, Inc. (a) 2,700 44,213
------------
332,780
COMPUTER HARDWARE-0.9%
BMC Industries, Inc. 1,600 52,400
Ceridian Corp. (a) 3,500 132,125
COMPAQ Computer Corp. (a) 2,250 195,469
Storage Technology Corp. (a) 1,350 66,150
------------
446,144
COMPUTER NETWORKING SOFTWARE-2.0%
3Com Corp. (a) 6,700 449,737
Cisco Systems, Inc. (a) 8,100 564,975
------------
1,014,712
COMPUTER PERIPHERALS-0.3%
Read-Rite Corp. (a) 1,100 36,300
Seagate Technology, Inc. (a) 2,500 128,750
------------
165,050
COMPUTER SOFTWARE & SERVICES-2.7%
3D Labs, Inc., Ltd. (a) 900 20,475
Applix, Inc. (a) 1,200 20,419
Electronic Data Systems Corp. 1,900 87,400
First Data Corp. 4,500 162,000
HMT Technology Corp. (a) 1,500 32,438
IDT Corp. (a) 1,600 13,600
Informix Corp. (a) 15,000 311,250
Insight Enterprises, Inc. (a) 1,000 32,812
Learning Co., Inc. (a) 1,400 17,675
Microsoft Corp. (a) 2,000 204,000
Netscape Communications Corp. (a) 2,500 94,687
Network General Corp. (a) 1,100 31,075
Oracle Systems Corp. (a) 7,550 293,506
Sterling Software, Inc. (a) 900 25,988
Systemsoft Corp. (a) 1,800 24,750
Universal Outdoor Holdings, Inc. (a) 900 25,200
------------
1,397,275
SEMICONDUCTORS CAPITAL EQUIPMENT-0.1%
Teradyne, Inc. (a) 1,000 30,875
SEMI-CONDUCTORS & RELATED-1.5%
Altera Corp. (a) 7,600 328,700
Intel Corp. 1,905 309,086
Micron Technology, Inc. 2,000 69,500
National Semiconductor Corp. (a) 1,000 27,750
Texas Instruments, Inc. 500 39,188
------------
774,224
TELEPHONE UTILITY-0.3%
WorldCom, Inc. (a) 5,780 145,222
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MISCELLANEOUS-0.1%
Harman International Industries, Inc 900 $ 41,738
Kent Electronics (a) 800 26,100
------------
67,838
------------
4,374,120
FINANCE-7.1%
BANKING-MONEY CENTERS-0.5%
Chase Manhattan Corp. 2,200 203,500
RAC Financial Group, Inc. (a) 1,100 36,300
------------
239,800
BANKING-REGIONAL-0.6%
First Union Corp. 3,700 309,413
BROKERAGE & MONEY MANAGEMENT-0.5%
Aames Financial Corp. 800 34,400
Hambrecht & Quist Group, Inc. (a) 1,400 32,900
Merrill Lynch & Co., Inc. 2,600 219,050
------------
286,350
INSURANCE-2.2%
ITT Hartford Group, Inc. 100 7,338
Life Re Corp. 7,000 304,500
PennCorp Financial Group, Inc. 4,900 179,462
TIG Holdings, Inc. 4,000 138,500
Travelers Group, Inc. 9,500 497,562
------------
1,127,362
REAL ESTATE-0.1%
JP Realty, Inc. 1,000 26,875
The Macerich Co. 1,000 27,500
------------
54,375
MISCELLANEOUS-3.2%
American Express Co. 7,300 455,337
Associates First Capital Corp. 3,300 160,462
Beneficial Corp. 1,750 117,688
Dean Witter, Discover & Co. 9,200 350,750
MBNA Corp. 12,540 432,630
MGIC Investment Corp. 1,700 125,375
UUnion AcceptanceCorp. (a) 2,100 39,375
------------
1,681,617
------------
3,698,917
CONSUMER SERVICES-6.8%
ADVERTISING-0.3%
Evergreen Media Corp. (a) 2,500 77,500
Ha Lo Industries, Inc. (a) 2,800 70,700
------------
148,200
AIRLINES-0.2%
Northwest Airlines Corp. Cl.A (a) 2,800 95,200
APPAREL-0.9%
Designer Holdings, Ltd. (a) 1,700 24,013
Nike, Inc. Cl.B 400 27,150
Reebok International, Ltd. 7,975 378,812
Stage Stores, Inc. (a) 1,400 24,325
Warnaco Group, Inc. 1,100 29,975
------------
484,275
BROADCASTING & CABLE-1.0%
Cablevision Systems Corp. (a) 4,000 125,500
CommNet Cellular, Inc. (a) 1,000 28,375
EZ Communications, Inc. (a) 600 25,800
Millicom International Cellular, S.A. (a) 600 22,050
Sinclair Broadcast Group, Inc. (a) 900 22,950
6
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Tele-Communications, Inc.-Liberty Media
Cl.A (a) 8,000 $ 152,000
Viacom, Inc. Cl.B (a) 3,080 105,490
Westwood One, Inc. (a) 500 9,250
------------
491,415
ENTERTAINMENT & LEISURE-1.1%
Carnival Corp. Cl.A 2,200 80,850
Cyrk International, Inc. (a) 9,900 116,325
Time Warner, Inc. 2,000 77,000
Walt Disney Co. 3,944 288,898
------------
563,073
PRINTING & PUBLISHING-0.3%
New York Times Co. 4,200 161,175
RESTAURANTS & LODGING-1.0%
Brinker International, Inc. (a) 7,700 83,737
Doubletree Corp. (a) 1,300 53,625
Host Marriott Corp. (a) 8,100 137,700
Innkeepers USA Trust 2,100 27,825
Interstate Hotels Co. (a) 1,500 45,188
La Quinta Inns, Inc. 6,700 130,650
Suburban Lodges of America, Inc. (a) 1,600 29,000
------------
507,725
RETAILING-GENERAL-1.7%
AutoZone, Inc. (a) 10,700 231,387
CompUSA, Inc. (a) 8,200 168,100
Consolidated Stores Corp. (a) 1,000 32,875
Dayton Hudson Corp. 4,600 173,075
Federated Department Stores, Inc. (a) 3,500 115,063
Fingerhut Cos., Inc. 7,000 104,125
Nine West Group, Inc. (a) 1,400 72,275
------------
896,900
MISCELLANEOUS-0.3%
Equifax, Inc. 4,000 126,000
Equity Corp. (a) 1,150 22,712
Interim Services, Inc. (a) 400 14,500
------------
163,212
------------
3,511,175
ENERGY-5.0%
DOMESTIC PRODUCTS-1.1%
Apache Corp. 3,700 141,987
Brown (Tom), Inc. (a) 700 14,525
Louis Dreyfus Natural Gas Corp. (a) 12,200 207,400
Louisiana Land & Exploration Co. 2,900 163,125
Murphy Oil Corp. 1,000 50,375
------------
577,412
INTERNATIONAL-0.6%
Texaco, Inc. 2,700 285,863
OIL SERVICE-2.4%
Baker Hughes, Inc. 6,600 257,400
BJ Services Co. (a) 3,700 171,125
Halliburton Co. 1,000 72,375
Nabors Industries, Inc. (a) 4,300 79,550
Noble Drilling Corp. (a) 6,000 131,250
Parker Drilling Co. (a) 5,100 49,725
Rowan Cos., Inc. (a) 2,500 63,125
Schlumberger, Ltd. 750 83,344
Transocean Offshore, Inc. 5,400 353,700
------------
1,261,594
UTILITY/ELECTRIC-0.4%
Cinergy Corp. 1,700 58,650
FPL Group, Inc. 2,800 123,900
------------
182,550
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MISCELLANEOUS-0.5%
Costilla Energy, Inc. (a) 2,900 $43,500
KCS Energy, Inc. 1,000 38,875
Republic Industries, Inc. (a) 3,200 134,000
Superior Services, Inc. (a) 1,800 34,200
Ultramar Diamond Shamrock 816 23,970
------------
274,545
------------
2,581,964
HEALTH CARE-4.9%
BIOTECHNOLOGY-1.3%
Biogen, Inc. (a) 6,324 295,647
Centocor, Inc. (a) 5,650 216,112
Geltex Pharmaceuticals, Inc. (a) 2,400 58,800
Medimmune, Inc. (a) 1,500 23,813
Steris Corp. (a) 2,668 79,706
------------
674,078
DRUGS-1.4%
Medicis Pharmaceutical Corp. (a) 100 6,400
Merck & Co., Inc. 4,000 363,000
Pfizer, Inc. 3,600 334,350
Rotech Medical Corp. (a) 1,600 27,600
------------
731,350
MEDICAL PRODUCTS-1.0%
Boston Scientific Corp. (a) 3,600 245,700
Buckeye Cellulose Corp. (a) 1,100 31,212
Enterprise Systems, Inc. (a) 1,300 27,300
Medtronic, Inc. 2,700 184,950
National Surgery Centers, Inc. (a) 900 30,713
------------
519,875
MEDICAL SERVICES-1.1%
Columbia/HCA Healthcare Corp. 7,500 296,250
Oxford Health Plans, Inc. (a) 3,300 179,438
Pacificare Health Systems, Inc. (a) 900 72,225
------------
547,913
MISCELLANEOUS-0.1%
Compdent Corp. (a) 800 24,400
Jones Medical Industries, Inc. 900 34,200
------------
58,600
------------
2,531,816
CONSUMER STAPLES-3.3%
COSMETICS-0.4%
Gillette Co. 2,640 215,160
FOOD-1.7%
Anheuser Busch Cos., Inc. 2,000 85,000
Campbell Soup, Co. 2,460 204,180
Coca-Cola Co. 6,400 370,400
Nabisco Holdings Corp. 4,995 191,059
United Natural Foods, Inc. (a) 1,700 23,375
------------
874,014
HOUSEHOLD PRODUCTS-0.4%
Colgate-Palmolive Co. 2,330 225,427
TOBACCO-0.7%
Philip Morris Cos., Inc. 3,050 362,569
MISCELLANEOUS-0.1%
Mohawk Industries, Inc. (a) 1,800 46,350
------------
1,723,520
CAPITAL GOODS-2.6%
ELECTRICAL EQUIPMENT-0.7%
General Electric Co. 3,700 381,100
8
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
MACHINERY-0.9%
Allied-Signal, Inc. 4,600 $ 323,150
Comverse Technology, Inc. (a) 2,000 90,000
Crompton & Knowles Corp. 3,400 63,750
------------
476,900
POLLUTION CONTROL-1.0%
United Waste Systems, Inc. (a) 1,300 49,238
USA Waste Services, Inc. (a) 6,900 251,850
WMX Technologies, Inc. 5,500 201,437
------------
502,525
------------
1,360,525
BASIC INDUSTRIES-1.5%
CHEMICALS-0.4%
Cytec Industries, Inc. (a) 2,300 91,713
Freeport McMoran, Inc. 3,700 106,837
Polymer Group, Inc. (a) 1,600 22,800
------------
221,350
CONTAINERS-0.3%
Crown Cork & Seal, Inc. 3,000 172,500
METALS & MINING-0.6%
Century Aluminum Co. 2,100 39,375
Gibraltar Steel Corp. (a) 1,200 28,275
Kaiser Aluminum Corp. (a) 13,100 168,663
Olympic Steel, Inc. (a) 600 12,975
Steel Dynamics, Inc. (a) 1,500 34,875
------------
284,163
PAPER & FOREST PRODUCTS-0.1%
Louisiana-Pacific Corp. 2,300 47,725
MISCELLANEOUS-0.1%
United States Filter Corp. (a) 1,200 46,050
------------
771,788
CONSUMER MANUFACTURING-1.3%
APPLIANCES-0.7%
Sunbeam Corp. 14,000 388,500
AUTO & RELATED-0.2%
Miller Industries, Inc. (a) 1,050 21,263
Team Rental Group, Inc. (a) 2,600 70,200
------------
91,463
BUILDING & RELATED-0.1%
Hughes Supply, Inc. 800 27,700
TEXTILE PRODUCTS-0.1%
Tommy Hilfiger Corp. (a) 900 46,125
MISCELLANEOUS-0.2%
U.S. Industries, Inc. (a) 3,000 101,625
------------
655,413
TRANSPORTATION-0.7%
RAILROADS-0.7%
Burlington Northern Santa Fe 1,300 113,750
Genesee & Wyoming, Inc. (a) 1,200 38,700
Hub Group, Inc. (a) 700 18,900
Union Pacific Corp. 2,900 174,000
------------
345,350
SCIENCE & TECHNOLOGY-0.4%
AEROSPACE & DEFENSE-0.4%
Boeing Co. 800 85,700
United Technologies Corp. 2,100 146,475
------------
232,175
MULTI INDUSTRY COMPANIES-0.1%
Corestaff, Inc. (a) 1,100 25,300
Petco Animal Supplies, Inc. (a) 1,600 39,000
------------
64,300
Total United States Investments
(cost $18,202,097) 21,851,063
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
FOREIGN INVESTMENTS-12.8%
AUSTRALIA-0.1%
Woolworths, Ltd. 15,000 $ 37,643
Retail-General Merchandise
CANADA-0.5%
Canadian Pacific, Ltd. 5,000 135,625
Railroads
Cognos, Inc (a) 900 26,662
Computer Software & Services
Gulf Canada Resources, Ltd. (a) 4,400 35,750
Oil & Gas Services
Philip Environmental, Inc. (a) 2,900 50,025
Motorcycles
248,062
------------
FINLAND-0.3%
Nokia Corp. (ADR) 2,000 133,750
Telecommunications
FRANCE-1.1%
Bouygues 44 4,326
Engineering & Construction
Eaux (cie Generale) 1,937 248,329
Diversified
Television Francaise 1,500 132,685
Broadcasting
Total, S.A. Cl.B 2,351 202,639
Utility/Electric
587,979
------------
GERMANY-1.2%
Bayer AG 5,300 201,528
Chemicals
Deutsche Bank A.G. 2,300 114,874
Banks
Fresenius Medical Care A.G. (a) 900 79,117
Drugs, Hospital Supplies & Medical Services
Hornbach Holding A.G, 1,000 73,053
General Merchandise
Lufthansa A.G. 2,000 27,020
Airlines
Veba A.G. 2,000 110,772
Utility/Electric
606,364
------------
HONG KONG-0.3%
Asia Satellite Telephone (a) 4,000 8,904
Utility/Telephone
Dao Heng Bank Group, Ltd. 14,000 69,377
Banks
Hong Kong and China Gas Co., Ltd.
warrants, expiring 9/30/97 3,000 1,568
Utility/Electric
Swire Pacific 7,000 64,363
Multi-Industry
144,212
------------
INDIA-0.0%
Bajaj Auto, Ltd. (GDR) (b) 800 27,200
Auto & Related
INDONESIA-0.3%
Hanjaya Mandala Sampoerna (a) 12,000 75,221
Tobacco
Indonesian Satellite Corp. (ADR) 2,000 56,250
Computer Peripherals
Ramayana Lestari (a) 3,000 6,310
Retail-General
137,781
------------
10
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
ITALY-0.1%
Industrie Natuzzi S.p.A. (ADR) 1,000 $ 23,000
Consumer Manufacturing
Instituto Nazionale delle Assicurazioni 20,000 27,651
Insurance
Magneti Marelli 14,800 20,553
Miscellaneous
71,204
------------
JAPAN-4.2%
Bank of Tokyo, Ltd. 4,000 58,724
Banks
Canon, Inc. 8,000 169,574
Technology-Misc.
Ezaki Glico Co. 5,000 39,589
Food
Fuji Bank, Ltd. 6,000 62,848
Banks
Fuji Photo Film Co. (ORD) 4,000 121,407
Leisure Related
Hitachi, Ltd. 16,000 143,841
Electrical Equipment
Honda Motor Co. 5,000 134,026
Auto & Related
Ito-Yokado Co., Ltd. 3,000 139,057
Retailing-General
Kirin Brewery Co., Ltd. 14,000 122,397
Beverages
Kokuyo 2,000 41,899
Miscellaneous
Matsushita Electric Works 3,000 25,238
Building & Related
Matsushita Electrical Industrial Co., Ltd. 7,000 105,654
Electrical Equipment
National House Industrial Co. 2,000 24,083
Building & Construction
Nippon Express Co., Ltd. 3,000 17,865
Trucking
Nomura Securities Co., Ltd. 8,000 102,272
Brokerage & Money Management
Sakura Bank, Ltd. 11,000 62,600
Banks
Seven Eleven Japan 3,000 170,234
Retailing-General
Sharp Corp. 3,000 41,074
Appliances
Shimano Industrial Co. 3,000 49,239
Miscellaneous
Shiseido Co., Ltd. 4,000 46,517
Cosmetics
Sumitomo Electric Industries 3,000 40,332
Electrical Equipment
Taisho Pharmaceutical Co. 4,000 91,055
Drugs
Tokia Marine & Fire Co. 14,000 127,016
Insurance
Tokyo Electric Power 5,000 96,499
Utility/Electric
Toyota Corp. 6,000 154,893
Auto & Related
2,187,933
------------
MALAYSIA-0.2%
Berjaya Sports 10,000 51,891
Entertainment & Leisure
Resorts World Bhd 15,000 75,422
Leisure Related
127,313
------------
NETHERLANDS-1.0%
AKZO Nobel N.V. 1,500 211,020
Chemicals
Internationale Nederlanden Groep N.V. 8,005 301,903
Banking-Money Centers
512,923
------------
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
NEW ZEALAND-0.1%
Telecom Corp. of New Zealand, Ltd. 13,000 $ 65,953
Telecommunications
RUSSIA-0.2%
Tatneft ADR (a)(b) 1,400 90,230
International
SINGAPORE-0.1%
Overseas Chinese Bank 4,400 60,009
Banks
SOUTH KOREA-0.2%
Korea Mobile Telecommunications Corp. (ADR) 6,180 91,928
Utility/Telephone
SPAIN-0.1%
Uralita, S.A. 3,000 27,727
Engineering & Construction
SWEDEN-0.1%
Sparbanken Sverige AB 2,000 31,773
Banks
SWITZERLAND-0.7%
Nestle, S.A. 200 217,357
Food
Novartis A.G. (a) 121 138,741
Drugs
356,098
------------
THAILAND-0.0%
Bangkok Bank Public Co., Ltd. 3,000 25,936
Banking-Money Centers
UNITED KINGDOM-2.0%
BAT Industries Plc 13,000 100,609
Tobacco
British Telecommunications Plc 20,000 136,837
Utility/Telephone
BTR Plc 30,000 124,259
Multi-Industry Companies
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
Cadbury Schweppes Plc 12,000 $ 90,562
Food & Beverages
Doncasters Plc (ADR)(a) 1,500 29,438
Computer Technology
General Accident Plc 6,000 77,584
Insurance
Grand Metropolitan Plc 21,000 155,456
Food & Beverages
Reuters Holdings 5,600 58,773
Printing, Publishing & Broadcasting
Sears Plc 40,000 55,119
Retailing-General
Smithkline Beecham 5,800 83,083
Drugs
Tesco 13,700 78,235
Machinery
Unichem 10,000 40,298
Medical Products
1,030,253
------------
Total Foreign Investments
(cost $6,453,061) 6,602,271
Total Common Stocks & Other Investments
(cost $24,655,158) 28,453,334
U.S. GOVERNMENT & AGENCIES-29.8%
Federal Home Loan Bank
7.00%, 9/01/11 985 986,949
Federal National Mortgage Association
6.00%, 4/01/11 383 369,100
6.50%, 5/01/11 636 624,826
6.50%, 6/01/11 713 700,657
6.50%, 9/01/11 442 434,653
7.00%, 5/01/26 994 972,520
Government National Mortgage Association
7.50%, 5/15/26 1,210 1,212,213
8.00%, 1/15/27 2,211 2,260,747
12
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
U.S. Treasury Notes
5.75%, 8/15/03 $2,045 $ 1,977,249
6.125%, 5/15/98 2,005 2,013,762
6.375%, 5/15/99 3,860 3,891,343
Total U.S. Government & Agencies
(cost $15,417,190) 15,444,019
CORPORATE DEBT OBLIGATIONS-6.7%
BANKING-1.4%
First Union Capital
7.935%, 1/15/27 750 740,235
FINANCIAL-3.8%
Ford Motor Credit Co.
6.125%, 1/09/06 750 703,650
John Hancock Mutual Life Insurance Co.
7.375%, 2/15/24 (b) 800 762,736
Leucadia Capital Trust I
8.65%, 1/15/27 (b) 500 506,410
1,972,796
------------
INDUSTRIAL-1.5%
Time Warner, Inc.
8.375%, 3/15/23 750 759,968
Total Corporate Debt Obligations
(cost $3,386,142) 3,472,999
YANKEE BONDS-6.0%
Deutsche Bank Financial, Inc.
6.70%, 12/13/06 $700 $682,668
Quebec Province Canada
7.50%, 7/15/23 850 842,103
RAS Laffan Liquefied Natural Gas
8.294%, 3/15/14 (b) 700 720,125
St. George Bank, Ltd.
7.15%, 10/15/05 (b) 850 844,798
Total Yankee Bonds
(cost $3,049,167) 3,089,694
SOVEREIGNDEBT OBLIGATIONS-0.9%
CROATIA
Republic of Croatia FRN
6.50%, 7/31/97
(cost $443,889) 450 443,531
TOTAL INVESTMENTS-98.4%
(cost $46,951,546) 50,903,577
Other assets less liabilities-1.6% 846,064
NET ASSETS-100% $51,749,641
(a) Non-income producing security.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to certain qualified institutional buyers. At January
31, 1997, these securities amounted to $2,951,499 representing 5.7% of net
assets.
Glossary of Terms:
ADR - American depository receipt.
FRN - Floating rate note.
GDR - Global depository receipt.
ORD - Ordinary.
See notes to financial statements.
13
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $46,951,546) $50,903,577
Cash, at value (cost $553,672) 541,004
Receivable for investment securities sold 1,086,071
Interest and dividends receivable 304,218
Receivable for shares of beneficial interest sold 300
Total assets 52,835,170
LIABILITIES
Payable for investment securities purchased 887,662
Distribution fee payable 32,427
Advisory fee payable 3,941
Payable for shares of beneficial interest redeemed 2,630
Accrued expenses 158,869
Total liabilities 1,085,529
NET ASSETS $51,749,641
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 32
Additional paid-in capital 47,362,546
Distributions in excess of net investment income (1,776)
Accumulated net realized gain on investments and foreign
currency transactions 470,145
Net unrealized appreciation on investments and foreign
currency denominated assets and liabilities 3,918,694
$51,749,641
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($19,330,282/
1,081,720 shares of beneficial interest issued and outstanding) $17.87
Sales charge--4.25% of public offering price .79
Maximum offering price $18.66
CLASS B SHARES
Net asset value and offering price per share ($28,886,391/
1,921,041 shares of beneficial interest issued and outstanding) $15.04
CLASS C SHARES
Net asset value and offering price per share ($3,532,922/
234,962 shares of beneficial interest issued and outstanding) $15.04
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share ($46/
2.574 shares of beneficial interest issued and outstanding) $17.87
See notes to financial statements.
14
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1997 (UNAUDITED)
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 817,519
Dividends (net of foreign taxes withheld of $9,319) 136,035 $ 953,554
EXPENSES
Advisory fee 194,954
Distribution fee - Class A 28,614
Distribution fee - Class B 147,468
Distribution fee - Class C 17,083
Custodian 89,260
Transfer agency 48,711
Audit and legal 39,014
Registration 31,111
Printing 28,363
Trustees' fees 12,873
Miscellaneous 13,488
Total expenses 650,939
Less: expenses waived and assumed by adviser
(see Note B) (171,845)
Net expenses 479,094
Net investment income 474,460
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investment transactions 560,206
Net realized gain on foreign currency transactions 777
Net change in unrealized depreciation of investments 4,627,576
Net change in unrealized appreciation on foreign currency
denominated assets and liabilities (17,871)
Net gain on investments and foreign currency transactions 5,170,688
NET INCREASE IN NET ASSETS FROM OPERATIONS $5,645,148
See notes to financial statements.
15
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1997 JULY 31,
(UNAUDITED) 1996
--------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 474,460 $ 645,462
Net realized gain on investments and foreign
currency transactions 560,983 7,954,336
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 4,609,705 (4,551,438)
Net increase in net assets from operations 5,645,148 4,048,360
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (368,073) (251,709)
Class B (450,279) (425,006)
Class C (53,257) (52,350)
Net realized gain on investments
Class A (2,227,559) (479,820)
Class B (3,959,058) (1,296,269)
Class C (468,257) (159,666)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) 3,652,903 (3,771,397)
Total increase (decrease) 1,771,568 (2,387,857)
NET ASSETS
Beginning of year 49,978,073 52,365,930
End of period (including undistributed net
investment income of $395,373 at July 31,1996) $51,749,641 $49,978,073
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Strategic Balanced Fund (the "Fund"), formerly Alliance Balanced Fund,
a series of The Alliance Portfolios (the "Trust"), is registered under the
Investment Company Act of 1940, as a diversified, open-end investment company.
The Fund offers Class A, Class B, Class C and Advisor Class shares. Class A
shares are sold with a front-end sales charge of up to 4.25% for purchases not
exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a contingent
deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Shares purchased before August 2, 1993
and redeemed within six years of purchase are subject to different rates than
shares purchased after that date. Class C shares purchased on or after July 1,
1996, are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Advisor Class shares are sold
without an initial or contingent deferred sales charge and are not subject to
ongoing distribution expenses. Advisor Class shares are offered soley to
investors participating in fee-based programs. All four classes of shares have
identical voting, dividend, liquidation and other rights, except that each
class bears different distribution expenses and has exclusive votings rights
with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last sale price or, if no sale occurred, at the mean of the bid and asked price
at the regular close of that exchange. Securities traded on the
over-the-counter market are valued at the mean of the closing bid and asked
price. Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at their fair value as determined in good faith by the Board of
Trustees. The Board of Trustees has further determined that the value of
certain portfolio debt securities, other than temporary investments in short
term securities, be determined by reference to valuations obtained from a
pricing service. Restricted securities are valued at fair value as determined
by the Board of Trustees. Securities which mature in 60 days or less are valued
at amortized cost, which approximates market value.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized gain on foreign currency transactions for the Fund represents net
foreign exchange gains and losses from holdings of foreign currencies, currency
gains or losses realized between the trade and settlement dates on investment
transactions, and the difference between the amounts of dividends and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities at January 31, 1997
are reflected as a component of unrealized depreciation on 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 provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income 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 and amortizes premiums as adjustments
to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
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 Funds'
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisory Class shares have no distribution fees.
Expenses attributable to the Fund are charged to the Fund. Expenses of the
Trust are charged to the Fund in proportion to net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P., (the "Adviser"), an advisory fee at an annual rate of
.75% of the Fund's average daily net assets. Such fee is accrued daily and paid
monthly. The Adviser has agreed to voluntarily waive its fees and bear certain
expenses so that total expenses do not exceed on an annual basis 1.40%, 2.10%,
2.10% and 1.10% of average net assets, respectively, for the Class A, Class B,
Class C and Advisor Class shares. Prior to August 2, 1993, the annual expense
cap for Class B Shares was 2.15%. For the six months ended January 31, 1997,
such reimbursement amounted to $171,845.
The Fund has a Services Agreement with Alliance Fund Services, Inc., a
wholly-owned subsidiary of the Adviser, to provide personnel and facilities to
perform transfer agency services for the Fund. Compensation under this
agreement amounted to $36,095 for the six months ended January 31, 1997.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, serves as the Distributor of the Fund's shares. The
Distributor received front-end sales charges of $266 from the sales of Class A
shares and $21,322 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B shares for the six months ended January
31, 1997.
Brokerage commissions paid on securities transactions for the six months ended
January 31, 1997 amounted to $38,947, none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp., an affiliate of the Adviser.
Accrued expenses includes $59,438 owed to the Trustees under the Trusts
deferred compensation plan.
NOTE C: DISTRIBUTION PLANS
The Trust has adopted a Plan for each class of shares of the Fund, except the
Advisor Class pursuant to Rule 12b-1 under the Investment Company Act of 1940
(each a "Plan" and collectively the "Plans"). Under the Plan, the Fund pays a
distribution fee to the Distributor at an annual rate of up to .50% 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
Trustees currently limit payments under the Class A plan to .30% of the Fund's
average daily net assets attributable to Class A shares. The Plan provides that
the Distributor will use such payments in their entirety for distribution
assistance and promotional activities.
The Fund is not obligated under the Plan to pay any distribution services fee
in excess of the amounts set forth above. The purpose of the payments to the
Distributor under the Plan is to compensate the Distributor for its
distribution services with respect to the sale of the Funds' shares. Since the
Distributor's compensation is not directly tied to its expenses, the amount of
compensation received by it under the Plan during any year may be more or less
than its actual expenses. For this reason, the Plan is characterized by the
staff of the Commission as being of the "compensation" variety.
18
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
In the event that a Plan is terminated or not continued, (i) no distribution
services fees (other than current amounts accrued but not yet paid) would be
owed by the Funds to AFD with respect to the relevant class and (ii) the Funds
would not be obligated to pay AFD for any amounts expended by AFD not
previously recovered by AFD from distribution services fees in respect of
shares of such class or, in the case of Class B shares, recovered through
deferred sales charges.
The Plans 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 $17,138,350 and $17,090,127,
respectively, for the six months ended January 31, 1997. There were purchases
of $14,694,212 and sales of $16,786,161 of U.S. government and government
agency obligations for the six months ended January 31, 1997. At January 31,
1997, the cost of securities for federal income tax purposes was $47,062,290.
Accordingly, gross unrealized appreciation of investments was $5,198,861 and
gross unrealized depreciation of investments was $1,357,574 resulting in net
unrealized appreciation of $3,841,287 excluding foreign currency.
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $0.00001 par value shares of beneficial
interest authorized divided into four classes, designated Class A, Class B,
Class C and Advisor Class shares. Transactions in shares of beneficial interest
were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JAN. 31, 1997 JULY 31, JAN. 31, 1997 JULY 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 2,922 107,270 $ 72,239 $ 1,979,138
Shares issued in
reinvestment of
dividends and
distributions 140,143 37,530 2,423,081 680,784
Shares converted
from Class B 73,853 488,896 1,389,862 9,126,460
Shares redeemed (126,947) (251,216) (2,402,065) (4,690,077)
Net increase 89,971 382,480 $ 1,483,117 $ 7,096,305
CLASS B
Shares sold 138,211 328,916 $ 2,205,931 $ 5,260,317
Shares issued in
reinvestment of
dividends and
distributions 270,973 98,905 3,945,364 1,547,870
Shares converted
to Class A (86,655) (566,688) (1,389,862) (9,126,460)
Shares redeemed (194,304) (466,102) (3,124,558) (7,499,239)
Net increase(decrease) 128,225 (604,969) $ 1,636,875 $(9,817,512)
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JAN. 31, 1997 JULY 31, JAN. 31, 1997 JULY 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 33,153 59,772 $ 528,939 $ 956,171
Shares issued in
reinvestment of
dividends and
distributions 28,201 11,410 410,610 178,564
Shares redeemed (25,064) (136,703) (406,905) (2,184,925)
Net increase(decrease) 36,290 (65,521) $ 532,644 $(1,050,190)
OCTOBER 2, 1996* OCTOBER 2, 1996*
TO TO
JANUARY 31, 1997 JANUARY 31, 1997
(UNAUDITED) (UNAUDITED)
------------ --------------
ADVISOR CLASS
Shares sold 1,460 $ 26,057
Shares redeemed (1,457) (25,790)
Net increase 3 $ 267
* Commencement of distribution.
20
FINANCIAL HIGHLIGHTS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS MAY 1,
ENDED 1994
JANUARY 31, YEAR ENDED JULY 31, TO YEAR ENDED APRIL 30,
1997 ---------------------- JULY 31, -------------------------------
(UNAUDITED) 1996 1995 1994(a) 1994 1993 1992
------------ ------------ -------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.48 $17.98 $16.26 $16.46 $16.97 $17.06 $14.48
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .22(c) .35(c) .34 .07 .16 .39 .27
Net realized and unrealized gain (loss)
on investments 1.89 1.08 1.64 (.27) .74 .59 2.80
Net increase (decrease) in net asset
value from operations 2.11 1.43 1.98 (.20) .90 .98 3.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.39) (.32) (.22) -0- (.24) (.42) (.17)
Distributions from net realized gains (2.33) (.61) (.04) -0- (1.17) (.65) (.32)
Total dividends and distributions (2.72) (.93) (.26) -0- (1.41) (1.07) (.49)
Net asset value, end of period $17.87 $18.48 $17.98 $16.26 $16.46 $16.97 $17.06
TOTAL RETURN
Total investment return based on net
asset value (d) 11.88% 8.05% 12.40% (1.22)% 5.06% 5.85% 20.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $19,330 $18,329 $10,952 $9,640 $9,822 $8,637 $6,843
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.40%(e) 1.40% 1.40% 1.40%(e) 1.40% 1.40% 1.40%
Expenses, before waivers/reimbursements 2.06%(e) 1.76% 1.81% 1.94%(e) 1.70% 1.85% 2.05%
Net investment income 2.27%(e) 1.78% 2.07% 1.63%(e) 1.67% 2.29% 1.92%
Portfolio turnover rate 65% 173% 172% 21% 139% 98% 103%
Average commission rate (f) $.0545 -- -- -- -- -- --
</TABLE>
See footnote summary on page 24.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
SIX MONTHS MAY 1,
ENDED 1994
JANUARY 31, YEAR ENDED JULY 31, TO YEAR ENDED APRIL 30,
1997 ---------------------- JULY 31, -------------------------------
(UNAUDITED) 1996 1995 1994(a) 1994 1993 1992
------------ ------------ -------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.89 $15.56 $14.10 $14.30 $14.92 $15.51 $13.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .13(c) .16(c) .22 .03 .06 .23 .22
Net realized and unrealized gain (loss)
on investments 1.62 .98 1.40 (.23) .63 .53 2.70
Net increase (decrease) in net asset
value from operations 1.75 1.14 1.62 (.20) .69 .76 2.92
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.20) (.12) -0- (.14) (.25) (.29)
Distributions from net realized gains (2.33) (.61) (.04) -0- (1.17) (1.10) (1.08)
Total dividends and distributions (2.60) (.81) (.16) -0- (1.31) (1.35) (1.37)
Net asset value, end of period $15.04 $15.89 $15.56 $14.10 $14.30 $14.92 $15.51
TOTAL RETURN
Total investment return based on net
asset value (d) 11.52% 7.41% 11.63% (1.40)% 4.29% 4.96% 20.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $28,887 $28,492 $37,301 $43,578 $43,616 $36,155 $31,842
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.10%(e) 2.10% 2.10% 2.10%(e) 2.10% 2.15% 2.15%
Expenses, before waivers/reimbursements 2.76%(e) 2.47% 2.49% 2.64%(e) 2.42% 2.56% 2.70%
Net investment income 1.57%(e) .99% 1.38% .92%(e) .93% 1.55% 1.34%
Portfolio turnover rate 65% 173% 172% 21% 139% 98% 103%
Average commission rate (f) $.0545 -- -- -- -- -- --
</TABLE>
See footnote summary on page 24.
22
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------
SIX MONTHS MAY 1, AUGUST 2,
ENDED 1994 1993(g)
JANUARY 31, YEAR ENDED JULY 31, TO TO
1997 ----------------------- JULY 31, APRIL 30,
(UNAUDITED) 1996 1995 1994(a) 1994
------------ ------------ --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.89 $15.57 $14.11 $14.31 $15.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .13(c) .14(c) .16 .03 .15
Net realized and unrealized gain (loss)
on investments 1.62 .99 1.46 (.23) (.17)
Net increase (decrease) in net asset
value from operations 1.75 1.13 1.62 (.20) (.02)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.20) (.12) -0- (.14)
Distributions from net realized gains (2.33) (.61) (.04) -0- (1.17)
Total dividends and distributions (2.60) (.81) (.16) -0- (1.31)
Net asset value, end of period $15.04 $15.89 $15.57 $14.11 $14.31
TOTAL RETURN
Total investment return based on net
asset value (d) 11.52% 7.34% 11.62% (1.40)% .45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $3,533 $3,157 $4,113 $4,317 $4,289
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.10%(e) 2.10% 2.10% 2.10%(e) 2.10%(e)
Expenses, before waivers/reimbursements 2.76%(e) 2.48% 2.50% 2.64%(e) 2.07%(e)
Net investment income 1.57%(e) .99% 1.38% .93%(e) .69%(e)
Portfolio turnover rate 65% 173% 172% 21% 139%
Average commission rate (f) $.0545 -- -- -- --
</TABLE>
See footnote summary on page 24.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
------------------
OCTOBER 2, 1996(g)
TO
JANUARY 31, 1997
(UNAUDITED)
------------------
Net asset value, beginning of period $19.49
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c) .19
Net realized and unrealized loss on investments (1.81)
Net decrease in net asset value from operations (1.62)
Net asset value, end of period $17.87
TOTAL RETURN
Total investment return based on net asset value (d) (8.31)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $0
Ratio to average net assets of:
Expenses, net of waivers/reimbursements (e) 1.10%
Expenses, before waivers/reimbursements (e) 2.52%
Net investment income (e) 3.55%
Portfolio turnover rate 65%
Average commission rate (f) $.0545
(a) The Fund changed its fiscal year end from April 30 to July 31.
(b) Net of fees waived and expenses reimbursed by the Adviser.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment returns calculated for periods of less than one year
are not annualized.
(e) Annualized.
(f) For fiscal year beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(g) Commencement of distribution.
24
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
BOARD OF TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
RICHARD W. COUPER (1)
WILLIAM H. FOULK, JR. (1)
BRENTON W. HARRIES (1)
DONALD J. ROBINSON (1)
OFFICERS
BRUCE CALVERT, VICE PRESIDENT
KATHLEEN A. CORBET, VICE PRESIDENT
WAYNE D. LYSKI, VICE PRESIDENT
BARBARA J. KRUMSIEK, VICE PRESIDENT - MARKETING
EDMUND P. BERGAN, JR., CLERK
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER & CHIEF ACCOUNTING OFFICER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
ROPES & GRAY
One International Place
Boston, MA 02110-2624
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
25
THE ALLIANCE FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
26
ALLIANCE STRATEGIC BALANCED FUND
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.
ASBSR
