ALLIANCE GROWTH & INCOME FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
LETTER TO SHAREHOLDERS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
June 3, 1996
Dear Shareholder:
It has been a period of steady gains in global financial markets, and Alliance
Growth and Income Fund enjoyed solid returns in the six months since we last
reported. The following table shows how your Fund performed during its fiscal
half year ended April 30, 1996. As a comparison we also show the performance of
the overall U.S. stock market, represented by the S&P 500-stock Index, and of
the Lipper Growth & Income Funds Average. The latter reflects the performance
of 479 funds that have generally similar investment objectives to Alliance
Growth and Income Fund, though investment policies for the various funds may
differ.
TOTAL RETURN
PERIODS ENDED APRIL 30, 1996
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE GROWTH & INCOME FUND
Class A +14.46% +33.24%
Class B +14.53% +32.41%
Class C +14.07% +32.37%
S&P 500 +13.76% +30.13%
LIPPER GI FUNDS AVG. +13.75% +26.93%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
APRIL 30; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3. THE FUND'S BENCHMARKS
ARE UNMANAGED.
We are pleased to report that your Fund's three classes of shares exceeded
their benchmarks for the six and twelve month periods ending April 30, 1996. We
believe these investment results are a direct reflection of the success of the
restructuring of the Fund's portfolio undertaken one year ago.
INVESTMENT ENVIRONMENT
Steady growth trends became apparent earlier this year as stable short-term
interest rates and ample liquidity helped fuel continued stock market gains.
However, lack of political progress in addressing U.S. fiscal budget deficits,
higher-than-expected commodity prices and continued economic resiliency renewed
inflationary fears, resulting in lowered bond prices.
Corporate earnings growth, while slowing, partly mitigated price declines in
corporate bonds relative to U.S. government bonds. Increasingly, strong cash
flow generation is funding higher dividends and resulting in more frequent
stock repurchase programs. We believe high cash flow generation will continue
and be accompanied by a moderate and sustained economic environment, providing
a favorable underpinning to our common-stock investing, as well as supplying
growing dividend rates to produce attractive total returns.
We believe the stock market will be unusually sensitive to the near-term
direction of the economy over the next six to 12 months. The economy is
expected to accelerate in the second quarter, but fall back to a more
sustainable growth rate in the second half of the year. If the economy exceeds
projections later this year and the Federal Reserve subsequently increases
interest rates, the stock market's current strong performance could slow. But
if the economy slows, as we expect, further earnings gains in a benign
inflation environment should allow for continued market strength.
INVESTMENT STRATEGY
In the eighteen months since your Fund has acquired its new portfolio manager,
investment results have continued to be strong. As we've mentioned to you in
the past, our strategy is not to engage in market timing, but rather to
maintain a well-diversified portfolio across industry and sector classes and to
take full advantage of Alliance's internal research capabilities in selecting
stocks that we expect to deliver superior performance. We will continue to
manage your Fund according to these principles.
While the short-term direction of the market is difficult to predict, over the
long-term stocks have historically outperformed other types of investments. For
this reason we remain fully invested in equities and believe that stock-picking
on a selective basis will be the key to superior performance regardless of the
economy's whims.
1
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
Thank you for your continued interest and investment in Alliance Growth and
Income Fund. We look forward to reporting to you again on market activity and
the Fund's investment results later in the year.
Sincerely
John D. Carifa
Chairman and President
Paul Rissman
Senior Vice President
2
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
OBJECTIVE AND POLICIES
Alliance Growth and Income seeks to provide income and appreciation. The Fund
invests principally in a diversified portfolio of dividend-paying common stocks
of good quality, and, under certain market conditions, other types of
securities, including bonds, convertible bonds and preferred stocks.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF APRIL 30, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +33.24% +27.80%
. Five Years +12.87% +11.87%
. Ten Years +12.25% +11.76%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +32.41% +28.41%
. Five Years +11.98% +11.98%
. Since Inception* +11.85% +11.85%
CLASS C SHARES
. One Year +32.37%
. Since Inception* +14.32%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with 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);
Class C shares are not subject to front-end or contingent deferred sales
charges. Class B shares convert to Class A shares after 8 years. 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: 2/8/91, Class B; 5/3/93, Class C.
3
TEN LARGEST HOLDINGS
APRIL 30, 1996 (UNAUDITED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
AT&T Corp. $ 32,058,250 4.2%
Goodyear Tire & Rubber Co. 25,515,187 3.4
Philip Morris Cos., Inc. 21,607,469 2.9
PepsiCo, Inc. 20,704,175 2.7
General Electric Co. 19,909,750 2.6
First Union Corp. 18,450,000 2.4
RJR Nabisco Holdings Corp. 18,074,375 2.4
Enron Corp. 17,710,000 2.4
Century Telephone Enterprises, Inc. 17,675,175 2.3
Dow Chemical Co. 16,886,250 2.2
$208,590,631 27.5%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
_______________________________________________________________________________
SHARES OR PRINCIPAL
-----------------------------
PURCHASES BOUGHT HOLDINGS 4/30/96
- -------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 605,000 605,000
First Union Corp. 300,000 300,000
AT&T Corp. 276,000 523,400
Baxter International, Inc. 330,000 330,000
Dow Chemical Co. 190,000 190,000
Amoco Corp. 195,000 195,000
Xerox Corp. 108,000 108,000
Cablevision Systems Corp. 520,000 520,000
General Reinsurance Corp. 75,000 75,000
Nabisco Holdings Corp. 440,000 440,000
SALES SOLD HOLDINGS 4/30/96
- -------------------------------------------------------------------------------
Time Warner, Inc., 8.75%, 1/10/15 $22,750,400 -0-
Travelers Group, Inc. 283,000 102,429
Sprint Corp. 421,500 -0-
Rohm & Haas Co. 216,400 -0-
U.S. Healthcare, Inc. 265,600 -0-
Monsanto Co. 99,000 50,250
American International Group, Inc. 136,209 -0-
BankAmerica Corp. 154,000 -0-
Philip Morris Cos., Inc. 111,000 239,750
Renaissance Energy, Ltd. 390,100 -0-
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS-96.1%
CONSUMER PRODUCTS, MANUFACTURING & SERVICES-40.2%
BROADCASTING & CABLE-3.5%
Cablevision Systems Corp. 520,000 $13,455,000
Comcast Corp. Cl.A (SPL) K 210,548 3,671,431
TCI Group Series A* 234,000 4,489,875
Tele-Communications, Inc.-Liberty Media Cl. A* 188,500 5,136,625
-----------
26,752,931
DRUGS, HEALTHCARE, MEDICAL SERVICES &
PRODUCTS-10.7%
Baxter International, Inc. 330,000 14,602,500
Centocor, Inc.* 198,300 7,944,394
Columbia/HCA Healthcare Corp. 284,000 15,087,500
Lilly (Eli) & Co., Inc. 103,968 6,134,112
Meditrust 340,000 11,517,500
Merck & Co., Inc. 185,800 11,240,900
Schering-Plough Corp. 259,900 14,911,762
-----------
81,438,668
ENTERTAINMENT & LEISURE TIME-0.9%
Eastman Kodak Co. 92,400 7,068,600
FOOD, BEVERAGES & TOBACCO-10.7%
Campbell Soup Co. 120,000 7,500,000
Nabisco Holdings Corp. 440,000 13,475,000
PepsiCo, Inc. 326,050 20,704,175
Philip Morris Cos., Inc. 239,750 21,607,469
RJR Nabisco Holdings Corp. 605,000 18,074,375
-----------
81,361,019
HOUSEHOLD PRODUCTS-2.1%
Black & Decker Corp. 200,000 8,050,000
Colgate-Palmolive Co. 100,000 7,662,500
-----------
15,712,500
REAL ESTATE-3.5%
Evans Withycombe Residential 250,000 $5,406,250
Gables Residential Trust 350,000 8,268,750
Highwoods Properties, Inc. 186,000 5,626,500
Post Properties, Inc. 130,000 4,371,250
Sovran Self Storage, Inc. 106,000 2,716,250
-----------
26,389,000
RESTAURANTS-0.8%
Wendy's International, Inc. 302,032 5,776,362
RETAILING-GENERAL-3.7%
Lowes Cos., Inc. 417,000 13,500,375
May Department Stores Co. 137,500 7,012,500
Nordstrom, Inc. 149,400 7,582,050
-----------
28,094,925
TIRE & RUBBER-3.4%
Goodyear Tire & Rubber Co. 489,500 25,515,187
TRANSPORTATION-0.9%
Xtra Corp. 156,000 7,098,000
-----------
305,207,192
BASIC INDUSTRIES-17.4%
CHEMICALS-4.2%
Dow Chemical Co. 190,000 16,886,250
Monsanto Co. 50,250 7,612,875
Union Carbide Corp. 160,000 7,280,000
-----------
31,779,125
ELECTRICAL EQUIPMENT-3.7%
Cooper Industries, Inc. 190,000 8,075,000
General Electric Co. 256,900 19,909,750
-----------
27,984,750
ENVIRONMENTAL CONTROL-1.9%
WMX Technologies, Inc 420,000 14,595,000
MACHINERY-1.1%
BWIP, Inc. Cl. A 231,300 4,799,475
Giddings & Lewis, Inc. 210,000 3,885,000
-----------
8,684,475
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ------------------------------------------------------------------------
METALS & MINING-0.8%
Reynolds Metals Co. 105,300 $ 5,659,875
OIL & GAS-5.7%
Amoco Corp. 195,000 14,235,000
Enron Corp. 440,000 17,710,000
Unocal Corp. 3.50% cv. pfd.(a) 206,900 11,353,638
------------
43,298,638
------------
132,001,863
TECHNOLOGY-15.1%
COMMUNICATIONS EQUIPMENT-4.8%
DSC Communications Corp.* 270,000 8,471,250
General Instrument Corp.* 341,400 11,180,850
Nokia Corp. (ADR)(b) 461,500 16,787,062
------------
36,439,162
COMPUTER HARDWARE & SERVICES-6.9%
Compaq Computer Corp.* 155,000 7,226,875
First Data Corp. 160,000 12,160,000
International Business Machines Corp. 156,800 16,856,000
Xerox Corp. 108,000 15,822,000
------------
52,064,875
SEMI-CONDUCTORS & RELATED-3.4%
Atmel Corp.* 183,000 7,308,563
Intel Corp. 156,800 10,633,000
National Semiconductor Corp.* 495,763 7,808,267
------------
25,749,830
------------
114,253,867
PUBLIC UTILITIES-11.8%
ELECTRIC-1.9%
FPL Group, Inc. 156,000 6,727,500
Houston Industries, Inc. 284,000 6,070,500
Portland General Corp. 67,400 1,979,875
------------
14,777,875
ELECTRIC & GAS-0.5%
New York State Electric & Gas Co. 150,000 3,431,250
TELEPHONE-9.4%
Alltel Corp. 453,000 14,892,375
AT&T Corp. 523,400 32,058,250
Century Telephone Enterprises, Inc. 539,700 17,675,175
Vodafone Group Plc. (ADR)(c) 168,000 6,741,000
------------
71,366,800
------------
89,575,925
FINANCIAL SERVICES-11.6%
BANKING & CREDIT-5.8%
First Chicago Corp. 162,900 6,719,625
First Union Corp. 300,000 18,450,000
Fleet Financial Group, Inc. 165,300 7,107,900
NationsBank Corp. 150,500 12,002,375
------------
44,279,900
BROKERAGE & MONEY MANAGEMENT-1.8%
Merrill Lynch & Co., Inc. 225,100 13,590,413
INSURANCE-4.0%
Allstate Corp. 246,000 9,471,000
General Reinsurance Corp. 75,000 10,715,625
PennCorp Financial Group, Inc. 51,000 3,799,500
Travelers Group, Inc. 102,429 6,299,383
------------
30,285,508
------------
88,155,821
Total Common and Preferred Stocks
(cost $625,319,807) 729,194,668
6
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ------------------------------------------------------------------------
LONG TERM DEBT SECURITIES-0.6%
ELECTRONICS-0.6%
Altera Corp.
5.75%, 6/15/02 (cost $4,540,381) $3,700 $ 4,481,958
COMMERCIAL PAPER-1.8%
Ford Motor Credit Corp.
5.29%, 5/02/96 6,859 6,857,992
Prudential Funding
5.18%, 5/01/96 $7,000 $ 7,000,000
Total Commercial Paper
(amortized cost $13,857,992) 13,857,992
TOTAL INVESTMENTS-98.5%
(cost $643,718,180) 747,534,618
Other assets less liabilities-1.5% 11,554,051
NET ASSETS-100% $759,088,669
* Non-income producing security.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At April 30, 1996, this security
amounted to $11,353,638 or 1.5% of net assets.
(b) Country of origin-Finland.
(c) Country of origin-United Kingdom.
Glossary:
ADR - American Depository Receipt.
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $643,718,180) $747,534,618
Cash 2,571
Receivable for investment securities sold 10,571,531
Receivable for capital stock sold 1,454,299
Dividends and interest receivable 582,706
Other assets 27,149
Total assets 760,172,874
LIABILITIES
Payable for capital stock redeemed 326,444
Advisory fee payable 310,315
Distribution fee payable 277,775
Accrued expenses and other liabilities 169,671
Total liabilities 1,084,205
NET ASSETS $759,088,669
COMPOSITION OF NET ASSETS
Capital stock, at par $ 2,666,471
Additional paid-in capital 583,030,291
Distributions in excess of net investment income (293,375)
Accumulated net realized gain on investments 69,872,664
Net unrealized appreciation of investments and other assets 103,812,618
$759,088,669
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($518,880,486/
181,990,726 shares of capital stock issued and outstanding) $2.85
Sales charge-4.25% of public offering price .13
Maximum offering price $2.98
CLASS B SHARES
Net asset value and offering price per share ($189,725,447/
66,875,711 shares of capital stock issued and outstanding) $2.84
CLASS C SHARES
Net asset value, redemption and offering price per share
($50,482,736/17,780,657 shares of capital stock interest
issued and outstanding) $2.84
See notes to financial statements.
8
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $53,299) $7,968,809
Interest 1,340,669 $ 9,309,478
EXPENSES
Advisory fee 1,783,406
Distribution fee - Class A 513,791
Distribution fee - Class B 806,504
Distribution fee - Class C 212,728
Transfer agency 509,793
Administrative 65,000
Custodian 63,583
Registration 43,719
Audit and legal 40,448
Printing 38,548
Directors' fees 14,033
Miscellaneous 24,975
Total expenses 4,116,528
Net investment income 5,192,950
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 70,539,862
Net change in unrealized appreciation of
investments and other assets 16,849,024
Net gain on investments 87,388,886
NET INCREASE IN NET ASSETS FROM OPERATIONS $92,581,836
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SIX MONTHS ENDED
APRIL 30,1996 YEAR ENDED
(UNAUDITED) OCT. 31,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 5,192,950 $ 9,330,907
Net realized gain on investments 70,539,862 51,173,722
Net change in unrealized appreciation of
investments and other assets 16,849,024 59,820,854
Net increase in net assets from operations 92,581,836 120,325,483
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (4,387,532) (8,640,268)
Class B (864,756) (1,398,551)
Class C (228,961) (298,822)
Net realized gain on investments
Class A (35,016,779) (20,295,635)
Class B (10,839,746) (5,118,075)
Class C (2,808,691) (954,530)
CAPITAL STOCK TRANSACTIONS
Net increase 89,902,839 10,804,177
Total increase 128,338,210 94,423,779
NET ASSETS
Beginning of year 630,750,459 536,326,680
End of period $759,088,669 $630,750,459
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Growth and Income Fund, Inc. (the 'Fund'), is registered under the
Investment Company Act of 1940, as a diversified, open-end management
investment company. 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%. Class B shares
are 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 sold without an initial or
contingent deferred sales charge. All three classes of shares have identical
voting, dividend, liquidation and other rights, and the same terms and
conditions, except that each class bears different distribution expenses and
has exclusive voting rights with respect to its distribution plan. The
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 sales price, or, if no sale occurred, at the mean of the bid and asked
price at the close of the New York Stock Exchange. Over-the-counter securities
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 fair value as
determined in good faith by the Board of Directors. In determining fair value,
consideration is given to cost, operating and other financial data. Securities
which mature in 60 days or less are valued at amortized cost, which
approximates market value. The ability of issuers of debt securities held by
the Fund to meet their obligations may be affected by economic developments in
a specific industry or region.
2. 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.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
4. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an advisory agreement, the Fund pays its Adviser, Alliance
Capital Management L.P., an advisory fee at an annual rate of 0.625% of the
first $200 million, 0.50% of the next $200 million and 0.45% in excess of $400
million of the average daily net assets of the Fund. Such fee is accrued daily
and paid monthly. The Adviser has agreed, under the terms of the advisory
agreement, to reimburse the Fund to the extent that its aggregate expenses
(exclusive of interest, taxes, brokerage, distribution fees, and extraordinary
expenses) exceed the limits prescribed by any state in which the Fund's shares
are qualified for sale. The Fund believes that the most restrictive expense
ratio limitation imposed by any state is 2.5% of the first $30 million of its
average daily net assets, 2% of the next $70 million of its average daily net
assets and 1.5% of its average daily net assets in excess of $100 million. No
reimbursement was required for the six months ended April 30, 1996. Pursuant to
the advisory agreement, the Fund reimbursed the Adviser for the cost of certain
legal and accounting services provided to the Fund by the Adviser. For the six
months ended April 30, 1996 such reimbursement amounted to $65,000.
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
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 $388,225 for the six months ended April 30, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $37,588 from the sale of Class A shares and $115,177
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended April 30, 1996.
Brokerage commissions paid on securities transactions for the six months ended
April 30, 1996 amounted to $782,154, none of which was paid to Donaldson,
Lufkin & Jenrette Securities Corp. ('DLJ'), an affiliate of the Adviser.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to 0.30% of the Fund's average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to Class B
and Class C shares. The Agreement provides that the Distributor will use such
payments in their entirety for distribution assistance and promotional
activities. The Distributor has incurred expenses in excess of the distribution
costs reimbursed by the Fund in the amount of $4,584,784 and $762,203 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 investments)
aggregated $329,544,858 and $292,464,424, respectively, for the six months
ended April 30, 1996. There were no purchases or sales of U.S. Government or
government agency obligations for the six months ended April 30, 1996.
OPTION TRANSATIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on U.S. and foreign government securities and foreign currencies that
are traded on U.S. and foreign securities exchanges and over-the-counter
markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund
bears the market risk of an unfavorable change in the price of the security or
currency underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling or buying a security or currency at a
price different from the current market value.
12
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
For the six months ended April 30, 1996, the Fund did not engage in any options
transactions.
At April 30, 1996, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation of investments was $110,730,699 and gross unrealized
depreciation of investments was $6,914,261, resulting in net unrealized
appreciation of $103,816,438. The Fund may be able to use up to $4,337,154 of
Alliance Convertible Fund's (which was acquired in 1991) capital loss
carryforward, to offset future realized gains which expires through 1998.
NOTE E: CAPITAL STOCK
There are 900,000,000 shares of $0.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Class A consists of 450,000,000 shares, Class B of 225,000,000 and Class C of
225,000,000. Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30,1996 OCTOBER 31, APRIL 30,1996 OCTOBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ ------------- -------------
CLASS A
Shares sold 12,080,004 9,243,334 $33,600,785 $ 22,536,400
Shares issued in
reinvestment of
dividends and
distributions 11,010,375 9,307,957 29,030,471 20,218,363
Shares redeemed (10,413,718) (25,767,526) (28,771,976) (61,337,761)
Net increase(decrease) 12,676,661 (7,216,235) $33,859,280 $(18,582,998)
CLASS B
Shares sold 17,575,991 15,198,094 $48,314,320 $ 37,172,148
Shares issued in
reinvestment of
dividends and
distributions 3,748,681 2,615,018 9,842,151 5,634,043
Shares redeemed (5,208,001) (10,922,318) (14,358,474) (25,915,044)
Net increase 16,116,671 6,890,794 $43,797,997 $ 16,891,147
CLASS C
Shares sold 5,141,823 8,491,685 $14,143,462 $ 20,818,230
Shares issued in
reinvestment of
dividends and
distributions 875,838 364,223 2,308,353 793,203
Shares redeemed (1,530,256) (3,857,242) (4,206,253) (9,115,405)
Net increase 4,487,405 4,998,666 $12,245,562 $ 12,496,028
* Commencement of distribution.
13
FINANCIAL HIGHLIGHTS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $2.71 $2.35 $2.61 $2.48 $2.52 $2.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03 .02 .06 .06 .06 .07
Net realized and unrealized gain (loss)
of investments .35 .52 (.08) .29 .11 .56
Net increase (decrease) in net asset
value from operations .38 .54 (.02) .35 .17 .63
LESS: DISTRIBUTIONS
Dividends from net investment income (.03) (.06) (.06) (.06) (.06) (.09)
Distributions from net realized gains (.21) (.12) (.18) (.16) (.15) (.30)
Total dividends and distributions (.24) (.18) (.24) (.22) (.21) (.39)
Net asset value, end of period $2.85 $2.71 $2.35 $2.61 $2.48 $2.52
TOTAL RETURN
Total investment return based on net
asset value (a) 14.46% 24.21% (.67)% 14.98% 7.23% 31.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $518,880 $458,158 $414,386 $459,372 $417,018 $409,597
Ratio of expenses to average net assets .95%(b) 1.05% 1.03% 1.07% 1.09% 1.14%
Ratio of net investment income to
average net assets 1.74%(b) 1.88% 2.36% 2.38% 2.63% 2.74%
Portfolio turnover rate 43% 142% 68% 91% 104% 84%
Average commission rate (c) $.0672 $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
See footnote summary on page 16.
14
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1996 ---------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991(D)
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $2.69 $2.34 $2.60 $2.47 $2.52 $2.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02 .01 .04 .05 .04 .04
Net realized and unrealized gain (loss)
of investments .36 .49 (.08) .28 .11 .12
Net increase (decrease) in net asset
value from operations .38 .50 (.04) .33 .15 .16
LESS: DISTRIBUTIONS
Dividends from net investment income (.02) (.03) (.04) (.04) (.05) (.04)
Distributions from net realized gains (.21) (.12) (.18) (.16) (.15) -0-
Total dividends and distributions (.23) (.15) (.22) (.20) (.20) (.04)
Net asset value, end of period $2.84 $2.69 $2.34 $2.60 $2.47 $2.52
TOTAL RETURN
Total investment return based on net
asset value (a) 14.53% 22.84% (1.50)% 14.22% 6.22% 6.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $189,725 $136,758 $102,546 $76,633 $29,656 $10,221
Ratio of expenses to average net assets 1.76%(b) 1.86% 1.85% 1.90% 1.90% 1.99%
Ratio of net investment income to
average net assets .92%(b) 1.05% 1.56% 1.58% 1.69% 1.67%
Portfolio turnover rate 43% 142% 68% 91% 104% 84%
Average commission rate (c) $.0672 $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
See footnote summary on page 16.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------
SIX MONTHS
ENDED MAY 3,1993(E)
APRIL 30, YEAR ENDED OCTOBER 31, TO
1996 ------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $2.70 $2.34 $2.60 $2.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02 .01 .04 .02
Net realized and unrealized gain (loss)
on investments .35 .50 (.08) .17
Net increase (decrease) in net asset
value from operations .37 .51 (.04) .19
LESS: DISTRIBUTIONS
Dividends from net investment income (.02) (.03) (.04) (.02)
Distributions from net realized gains (.21) (.12) (.18) -0-
Total dividends and distributions (.23) (.15) (.22) (.02)
Net asset value, end of period $2.84 $2.70 $2.34 $2.60
TOTAL RETURN
Total investment return based on net
asset value (a) 14.07% 23.30% (1.50)% 7.85%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $50,483 $35,835 $19,395 $7,774
Ratio of expenses to average net assets 1.74%(b) 1.84% 1.84% 1.96%(c)
Ratio of net investment income to
average net assets .93%(b) 1.04% 1.61% 1.45%(c)
Portfolio turnover rate 43% 142% 68% 91%
Average commission rate (c) $.0672 $ -0- $ -0- $ -0-
</TABLE>
(a) 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 distribution 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.
(b) Annualized.
(c) For fiscal years 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.
(d) For the period February 8, 1991 (commencement of distribution) to October
31, 1991.
(e) Commencement of distribution.
16
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
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)
ROBERT C. WHITE (1)
OFFICERS
PAUL RISSMAN, SENIOR VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
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
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800)-221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036
(1) Member of the Audit Committee.
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an opinion
thereon.
17
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
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 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
18
ALLIANCE GROWTH AND INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING WITHOUT THE MYSTERY.
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.
GTHSR
