ALLIANCE GROWTH AND INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
November 24, 1997
Dear Shareholder:
We are pleased to provide you with an update of your Fund's performance and
market activity for Alliance Growth and Income Fund for the period ended
October 31, 1997.
INVESTMENT PERFORMANCE
The following table shows how your Fund performed in comparison to the
performance of the S&P 500 Stock Index and the Lipper Growth & Income Funds
Average for the period ended October 31, 1997.
As you can see, your Fund outperformed both its peer group, the Lipper Growth
and Income Funds Universe, and the S&P 500 Stock Index for the six month period
ended October 31, 1997. For the entire fiscal year, your Fund also outperformed
the average Growth and Income Fund in the Lipper Universe. Class A shares
offered a yearly return greater than the S&P 500, while Class B and Class C
shares offered comparable returns.
The first half of the fiscal year witnessed very strong returns from the
largest growth stocks of the S&P 500. These stocks were already among the most
expensive in the market on a price to earnings basis. Positive revisions to
profit estimates relative to smaller stocks, and a decline in inflation
expectations which benefits growth stocks disproportionately, nevertheless
caused the largest, most expensive growth stocks to become even more
overvalued. All of this began to reverse in mid-June when large growth stocks
such as Coca-Cola and Gillette Corp. announced that second quarter earnings
would fall short of expectations. From that point on, large growth stocks
underperformed their more modestly valued peers. As your Fund has shied away
from ownership of the more expensive growth stocks, it was able to exhibit
higher returns than its benchmark.
INVESTMENT RESULTS*
Period Ended October 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- ----------
ALLIANCE GROWTH AND INCOME FUND
Class A 17.64% 33.28%
Class B 17.07% 31.83%
Class C 16.68% 31.83%
S&P 500 STOCK INDEX 15.16% 32.10%
LIPPER GROWTH & INCOME FUNDS AVERAGE 16.02% 28.12%
* THE FUND'S INVESTMENT RESULTS ARE CUMULATIVE TOTAL RETURNS FOR THE PERIOD
AND ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF OCTOBER 31,
1997. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE UNMANAGED S&P 500 STOCK INDEX INCLUDES 500 U.S. STOCKS AND IS A COMMON
MEASURE OF THE PERFORMANCE OF THE OVERALL U.S. STOCK MARKET. THE UNMANAGED
LIPPER GROWTH & INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE OF 632 FUNDS.
THESE FUNDS HAVE GENERALLY SIMILAR INVESTMENT OBJECTIVES TO ALLIANCE GROWTH AND
INCOME FUND, ALTHOUGH THE INVESTMENT POLICIES OF SOME FUNDS INCLUDED IN THE
AVERAGE MAY VARY. AN INVESTOR CANNOT INVEST DIRECTLY IN THE INDEX OR AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
MARKET ENVIRONMENT
The stock market is navigating between a very strong domestic economy, in which
interest rates threaten to rise to head off inflation, and a rapidly weakening
situation in Asia. Equities are priced as though these two forces will balance,
slowing the U.S. economy enough to keep interest rates low, but continuing to
allow for decent earnings growth. This would extend the nearly perfect economic
conditions of 1995, 1996 and the first half of 1997, which saw the S&P 500
Stock Index increase by almost 120% since the end of 1994.
It would appear to us that the downside risks of the market reside with those
companies that are major exporters to the emerging world. We therefore are
cautious regarding multinational technology, capital goods and consumer
products companies whose stock prices do not reflect the possibility of a
strong slowdown in their overseas markets.
1
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
PORTFOLIO STRATEGY
Your Fund has been consistent in its portfolio characteristics of maintaining a
defensive dividend yield and price to earnings ratio, fully invested posture,
and high degree of sector and industry diversification. We continue to seek the
stocks of companies with primarily secular growth potential combined with
reasonable valuation. Finally, we rely on Alliance's internal research
capabilities in selecting stocks that we expect to deliver superior performance.
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 in the future.
Sincerely,
John D. Carifa
Chairman and President
Paul Rissman
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
Alliance Growth and Income Fund 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 RETURNS AS OF OCTOBER 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 33.28% 27.74%
Five Years 18.10% 17.08%
Ten Years 15.38% 14.89%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 31.83% 27.83%
Five Years 17.17% 17.17%
Since Inception* 14.62% 14.62%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 31.83% 30.83%
Since Inception* 17.69% 17.69%
The average annual total returns reflect reinvestment 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);
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: 2/8/91, Class B; 5/3/93, Class C.
3
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
ALLIANCE GROWTH ANDINCOME FUND
GROWTH OF A $10,000 INVESTMENT
10/31/87 TO 10/31/97
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
10/31/87 10/31/88 10/31/89 10/31/90 10/31/91 10/31/92
10/31/93 10/31/94 10/31/95 10/31/96 10/31/97
S&P 500: $48,661
LIPPER GROWTH & INCOME FUNDS AVERAGE: $41,881
GROWTH ANDINCOME FUND CLASS A: $40,071
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth andIncome Fund Class A shares (from 10/31/87 to 10/31/97) as
compared to the performance of an appropriate broad-based index. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B, Class C and Advisor Class shares will
vary from the results shown above due to differences in expenses charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Standard & Poor's 500 Stock Index includes 500 U.S. stocks and is
a common measure of the performance of the overall U.S. stock market.
The unmanaged Lipper Growth andIncome Funds Average reflects performance of 632
funds, 130 of which have existed for the full 10-year period. These funds have
generally similar investment objectives to Alliance Growth andIncome Fund,
although the investment policies of some funds included in the average may vary.
When comparing Alliance Growth andIncome Fund to the index and average shown
above, you should note that no charges or expenses are reflected in the
performance of the index. Lipper results include fees and expenses.
Growth and Income Fund
Standard &Poor's 500 Stock Index
Lipper Growth &Income Funds Average
4
TEN LARGEST HOLDINGS
OCTOBER 31, 1997 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Chase Manhattan Corp. $ 67,032,875 5.0%
Texaco, Inc. 48,852,375 3.6
Campbell Soup Co. 47,850,000 3.5
RJR Nabisco Holdings Corp. 44,045,625 3.3
Philip Morris Cos., Inc. 35,751,656 2.6
Morgan Stanley, Dean Witter, Discover and Co. 34,300,000 2.5
Cisco Systems, Inc. 32,673,047 2.4
Mobil Oil Corp. 30,581,250 2.3
Merck & Co., Inc. 30,505,650 2.3
First Data Corp. 30,341,250 2.2
$401,933,728 29.7%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED OCTOBER 31, 1997
_______________________________________________________________________________
SHARES OR PRINCIPAL*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES BOUGHT 10/31/97
- -------------------------------------------------------------------------------
American International Group, Inc. 268,000 268,000
Campbell Soup Co. 370,000 928,000
Chase Manhattan Corp. 217,000 581,000
Du Pont E.I. de Nemours & Co. 411,000 411,000
First Data Corp. 1,044,000 1,044,000
Home Depot, Inc. 394,000 394,000
PacifiCare Health Systems, Inc. Cl.B 256,000 383,000
RJR Nabisco Holdings Corp. 1,306,000 1,390,000
Texaco, Inc. 614,000 858,000
United Technologies Corp. 244,000 244,000
HOLDINGS
SALES SOLD 10/31/97
- -------------------------------------------------------------------------------
3Com Corp., 10.25%, 11/01/01 $15,000,000 -0-
American Express Co. 170,000 -0-
Chrysler Corp. 400,000 -0-
COMPAQ Computer Corp. 24,500 130,500
Dow Chemical Co. 190,000 -0-
Exxon Corp. 202,000 -0-
International Business Machines Corp. 83,800 -0-
Merrill Lynch & Co., Inc. 107,100 -0-
National Semiconductor Corp. 547,000 168,763
WMX Technologies, Inc. 420,000 -0-
* Adjusted for stock splits and other corporate actions.
5
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-96.1%
FINANCE-19.7%
BANKING - MONEY CENTER-5.0%
Chase Manhattan Corp. 581,000 $ 67,032,875
BANKING - REGIONAL-3.2%
First Union Corp. 600,000 29,437,500
U.S. Bancorp 139,000 14,134,562
------------
43,572,062
BROKERAGE & MONEY MANAGEMENT-3.0%
Bear Stearns Cos., Inc. 169,000 6,707,188
Morgan Stanley, Dean Witter,
Discover and Co. 700,000 34,300,000
------------
41,007,188
INSURANCE-5.0%
American International Group, Inc. 268,000 27,352,750
EXEL, Ltd. (Bermuda) 119,700 7,234,369
General Reinsurance Corp. 75,000 14,789,062
The Hartford Financial Services
Group, Inc. 144,500 11,704,500
Travelers Group, Inc. 95,000 6,650,000
------------
67,730,681
MORTGAGE BANKING-0.9%
Allstate Corp.
6.76% exchangeable note 246,000 12,253,875
REAL ESTATE-1.1%
Ambassador Apartments, Inc. 5,000 107,188
American General Hospitality Corp. 8,200 223,450
Arden Realty Group, Inc. 8,000 244,000
Avalon Properties, Inc. 6,900 202,688
Bay Apartment Community, Inc. 5,300 207,362
Beacon Properties Corp. 9,800 412,825
Brandywine Realty Trust 11,700 274,219
Cali Realty Corp. 5,600 226,800
Crescent Operating, Inc. (a) 1,160 27,115
Crescent Real Estate Equities Co. 9,400 338,400
Duke Realty Investments, Inc. 8,000 180,000
Essex Property Trust, Inc. 10,900 373,325
Excel Realty Trust, Inc. 10,900 328,362
FelCor Suite Hotels, Inc. 1,700 62,263
Glenborough Realty Trust, Inc. 15,000 384,375
Golf Trust of America, Inc. 6,100 158,981
Great Lakes REIT, Inc. 2,500 46,875
Highwoods Properties, Inc. 8,500 293,250
Innkeepers USA Trust 14,900 248,644
IRT Property Co. 15,200 186,200
Macerich Co. 8,800 233,200
Meridian Industrial Trust, Inc. 8,600 198,338
Mills Corp. 10,000 250,000
Pan Pacific Retail Properties, Inc. 14,700 319,725
Patriot American Hospitality, Inc. 11,600 382,800
Public Storage, Inc. 11,600 319,000
Reckson Associates Realty Corp. 10,300 269,731
Security Capital Group, Inc.,
warrants expiring 9/18/98 (a) 12,627 60,767
Security Capital Industrial Trust 269,981 6,631,408
Security Capital Pacific Trust 7,900 176,763
SL Green Realty Corp. (a) 12,600 315,787
6
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
Spieker Properties, Inc. 7,200 $ 281,700
Starwood Lodging Trust 6,900 412,706
Sunstone Hotel Investors, Inc. 4,700 82,544
------------
14,460,791
MISCELLANEOUS-1.5%
Household International, Inc. 58,000 6,568,500
MBNA Corp. 510,000 13,419,375
------------
19,987,875
------------
266,045,347
CONSUMER STAPLES-14.2%
FOOD-7.3%
Anheuser Busch Cos., Inc. 550,000 21,965,625
Campbell Soup Co. 928,000 47,850,000
General Mills, Inc. 185,000 12,210,000
Heinz (H.J.) Co. 375,000 17,414,062
------------
99,439,687
RETAIL - FOOD & DRUG-1.0%
Kroger Co. (a) 400,500 13,066,313
TOBACCO-5.9%
Philip Morris Cos., Inc. 902,250 35,751,656
RJR Nabisco Holdings Corp. 1,390,000 44,045,625
------------
79,797,281
------------
192,303,281
CONSUMER SERVICES-12.0%
AIRLINES-1.0%
Delta Air Lines, Inc. 139,000 14,004,250
APPAREL-0.9%
Reebok International, Ltd. 326,500 12,039,688
BROADCASTING & CABLE-0.8%
Tele-Communications, Inc. - Liberty Media
Cl.A (a) 307,750 10,703,930
ENTERTAINMENT & LEISURE-2.9%
Cablevision Systems Corp.
8.5% cv. pfd. Ser. I 595,000 18,593,750
Harley-Davidson, Inc. 250,000 6,937,500
Walt Disney Co. 163,000 13,406,750
------------
38,938,000
PRINTING & PUBLISHING-2.0%
Gannett Co., Inc. 132,000 6,938,250
Reuters Holdings Plc Cl.B (ADR) (b) 298,000 19,556,250
------------
26,494,500
RETAIL - GENERAL MERCHANDISE-4.4%
Dayton Hudson Corp. 327,000 20,539,687
Home Depot, Inc. 394,000 21,916,250
Sears, Roebuck & Co. 420,000 17,587,500
------------
60,043,437
------------
162,223,805
TECHNOLOGY-10.4%
COMMUNICATIONS EQUIPMENT-0.4%
Scientific-Atlanta, Inc. 260,000 4,826,250
COMPUTER HARDWARE-0.6%
COMPAQ Computer Corp. (a) 130,500 8,319,375
COMPUTER PERIPHERALS-0.6%
Seagate Technology, Inc. (a) 323,000 8,761,375
COMPUTER SERVICES-3.0%
Electronic Data Systems Corp. 270,300 10,457,231
First Data Corp. 1,044,000 30,341,250
------------
40,798,481
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
NETWORKING SOFTWARE-2.8%
Cabletron Systems, Inc. (a) 185,000 $ 5,365,000
Cisco Systems, Inc. (a) 398,300 32,673,047
------------
38,038,047
SEMI-CONDUCTOR COMPONENTS-2.4%
Atmel Corp. (a) 300,900 7,776,384
Intel Corp. 242,400 18,672,375
National Semiconductor Corp. (a) 168,763 6,075,468
------------
32,524,227
MISCELLANEOUS-0.6%
Solectron Corp. (a) 198,000 7,771,500
------------
141,039,255
ENERGY-10.3%
DOMESTIC INTEGRATED-2.2%
USX-Marathon Group 825,000 29,493,750
DOMESTIC PRODUCERS-1.1%
Apache Corp. 211,000 8,862,000
Murphy Oil Corp. 117,000 6,778,688
------------
15,640,688
INTERNATIONAL-5.9%
Mobil Corp. 420,000 30,581,250
Texaco, Inc. 858,000 48,852,375
------------
79,433,625
OIL SERVICE-1.1%
Baker Hughes, Inc. 181,100 8,319,281
Transocean Offshore, Inc. 130,000 7,020,000
------------
15,339,281
------------
139,907,344
HEALTH CARE-9.7%
BIOTECHNOLOGY-1.1%
Centocor, Inc. (a) 339,500 14,916,781
DRUGS-4.4%
Merck & Co., Inc. 341,800 30,505,650
Schering-Plough Corp. 514,000 28,816,125
------------
59,321,775
MEDICAL PRODUCTS-1.1%
Baxter International, Inc. 193,000 8,926,250
Boston Scientific Corp. (a) 138,000 6,279,000
------------
15,205,250
MEDICAL SERVICES-3.1%
Columbia HCA/Healthcare Corp. 226,000 6,384,500
Meditrust 240,000 10,260,000
PacifiCare Health Systems,
Inc. Cl.B (a) 383,000 24,847,125
------------
41,491,625
------------
130,935,431
UTILITIES-5.9%
ELECTRIC & GAS UTILITY-2.7%
CMS Energy Corp. 305,000 11,132,500
FPL Group, Inc. 383,000 19,796,312
NIPSCO Industries, Inc. 124,000 5,448,250
------------
36,377,062
TELEPHONE UTILITY-3.2%
AT&T Corp. 283,500 13,873,781
Teleport Communications
Group, Inc. Cl.A (a) 300,300 14,508,244
WorldCom, Inc. (a) 460,000 15,453,125
------------
43,835,150
------------
80,212,212
CAPITAL GOODS-4.8%
ELECTRICAL EQUIPMENT-1.3%
General Electric Co. 275,800 17,806,338
ENGINEERING & CONSTRUCTION-0.7%
Fluor Corp. 210,000 8,636,250
MACHINERY-0.7%
Cooper Industries, Inc. 190,000 9,903,750
8
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
POLLUTION CONTROL-0.8%
USA Waste Services, Inc. (a) 297,020 $ 10,989,740
MISCELLANEOUS-1.3%
United Technologies Corp. 244,000 17,080,000
------------
64,416,078
BASIC INDUSTRY-3.2%
CHEMICALS-2.7%
Du Pont E.I. de Nemours & Co. 411,000 23,375,625
Praxair, Inc. 300,000 13,068,750
------------
36,444,375
CONTAINERS-0.5%
Sealed Air Corp. (a) 145,000 7,476,563
------------
43,920,938
MULTI INDUSTRY COMPANIES-2.7%
Tyco International, Ltd. 680,000 25,670,000
Whitman Corp. 430,000 11,287,500
------------
36,957,500
CONSUMER MANUFACTURING-1.2%
APPLIANCES-1.2%
Sunbeam Corp. 350,000 15,859,375
TRANSPORTATION-1.1%
RAILROADS-1.1%
Canadian Pacific, Ltd. (c) 165,000 4,919,063
Union Pacific Corp. 155,000 9,493,750
------------
14,412,813
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
AEROSPACE & DEFENSE-0.9%
AEROSPACE-0.9%
General Dynamics Corp. 153,500 $ 12,462,281
Total Common & Preferred Stocks
(cost $1,105,148,524) 1,300,695,660
CONVERTIBLE BOND-0.8%
Federated Department Stores, Inc.
5.00%, 10/01/03
(cost $9,170,000) $ 8,000 10,900,000
COMMERCIAL PAPER-3.0%
American Express Co.
5.55%, 11/05/97 4,593 4,590,167
Ford Motor Credit Corp.
5.51%, 11/04/97 10,910 10,904,991
5.60%, 11/06/97 5,000 4,996,111
5.60%, 11/07/97 6,650 6,643,793
Prudential Funding
5.51%, 11/03/97 5,750 5,748,240
5.53%, 11/10/97 7,574 7,563,529
Total Commercial Paper
(amortized cost $40,446,831) 40,446,831
TOTAL INVESTMENTS-99.9%
(cost $1,154,765,355) 1,352,042,491
Other assets less liabilities-0.1% 1,655,534
NET ASSETS-100% $ 1,353,698,025
(a) Non-income producing security.
(b) Country of origin--United Kingdom.
(c) Country of origin--Canada.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $1,154,765,355) $ 1,352,042,491
Receivable for capital stock sold 9,094,961
Receivable for investment securities sold 3,328,004
Dividends and interest receivable 946,061
Total assets 1,365,411,517
LIABILITIES
Due to custodian 188,125
Payable for investment securities purchased 6,229,097
Payable for capital stock redeemed 3,542,562
Distribution fee payable 643,968
Advisory fee payable 571,977
Accrued expenses and other liabilities 537,763
Total liabilities 11,713,492
NET ASSETS $ 1,353,698,025
COMPOSITION OF NET ASSETS
Capital stock, at par $3,904,771
Additional paid-in capital 969,077,706
Accumulated net realized gain on investment transactions 183,450,227
Net unrealized appreciation of investments and other assets 197,265,321
$ 1,353,698,025
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($787,565,667/226,440,876 shares of capital stock
issued and outstanding) $3.48
Sales charge--4.25% of public offering price .15
Maximum offering price $3.63
CLASS B SHARES
Net asset value and offering price per share ($456,398,675/
132,264,937 shares of capital stock issued and outstanding) $3.45
CLASS C SHARES
Net asset value and offering price per share ($106,526,350/
30,848,724 shares of capital stock issued and outstanding) $3.45
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($3,207,333/922,521 shares of capital stock issued
and outstanding) $3.48
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $70,261) $ 22,100,789
Interest 3,257,634 $ 25,358,423
EXPENSES
Advisory fee 5,444,322
Distribution fee - Class A 1,442,986
Distribution fee - Class B 3,482,734
Distribution fee - Class C 850,210
Transfer agency 1,482,813
Printing 240,511
Custodian 213,914
Registration 165,776
Administrative 131,750
Audit and legal 90,467
Taxes 56,625
Directors' fees 26,800
Miscellaneous 36,768
Total expenses 13,665,676
Less: expense offset arrangement (see Note B) (111,616)
Net expenses 13,554,060
Net investment income 11,804,363
REALIZED AND UNREALIZED GAIN ON
INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 187,140,969
Net change in unrealized appreciation of
investments and other assets 91,558,026
Net gain on investments 278,698,995
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 290,503,358
See notes to financial statements.
11
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
-------------- --------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 11,804,363 $ 10,962,043
Net realized gain on investment transactions 187,140,969 111,164,477
Net change in unrealized appreciation of
investments and other assets 91,558,026 18,743,701
Net increase in net assets from operations 290,503,358 140,870,221
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (10,304,349) (8,958,676)
Class B (3,192,222) (1,957,466)
Class C (778,427) (514,681)
Advisor Class (26,635) -0-
Net realized gain on investments
Class A (69,814,848) (35,016,914)
Class B (30,538,252) (10,843,381)
Class C (7,901,806) (2,808,344)
Advisor Class (45,499) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 335,939,551 138,335,936
Total increase 503,840,871 219,106,695
NET ASSETS
Beginning of year 849,857,154 630,750,459
End of year $1,353,698,025 $ 849,857,154
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 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, 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 sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. Advisor Class
shares are sold without an initial or contingent deferred sales charge and are
not subject to ongoing distribution expenses. Advisor Class shares are offered
to investors participating in fee-based programs and to certain retirement plan
accounts. All four classes of shares have identical voting, dividend,
liquidation and other rights, and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The 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 regular close of that 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 are valued at fair value as
determined in good faith by the Fund's Board of Directors. Securities which
mature in 60 days or less are valued at amortized cost, which approximates
market value.
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 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 as adjustments to interest income.
4. 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 net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisory Class shares have no distribution fees.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences, do not require such
reclassification. During the current fiscal year, permanent differences,
primarily due to distributions and capital loss carry forward utilization,
resulted in a net increase in additional paid-in capital and a decrease in
accumulated net investment loss and a corresponding decrease in accumulated net
realized gain on investment transactions. This reclassification had no effect
on net assets.
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an advisory agreement, the Fund pays Alliance Capital
Management L.P. (the "Adviser") 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.
Pursuant to the advisory agreement, the Fund paid $131,750 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 31, 1997.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Compensation under
this agreement amounted to $1,023,687 for the year ended October 31, 1997.
In addition, for the year ended October 31, 1997, the Fund's expenses were
reduced by $111,616 under an expense offset arrangement with Alliance Fund
Services. Transfer agency fees reported in the statement of operation exclude
these credits.
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 $137,615 from the sales of
Class A shares and $995, $485,137 and $25,439 in contingent deferred sales
charges imposed upon redemptions by shareholders of Class A, Class B and Class
C shares, respectively, for the year ended October 31, 1997.
Brokerage commissions paid on investment transactions for the year ended
October 31, 1997 amounted to $2,342,114, of which $11,820 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 .30% 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. There is no distribution fee on Advisor Class shares. The
fees are accrued daily and paid monthly. The Agreement provides that the
Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has incurred expenses in
excess of the distribution costs reimbursed by the Fund in the amount of
$11,066,118 and $1,326,535 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
and U.S. government securities) aggregated $1,147,234,209 and $940,298,104,
respectively, for the year ended October 31, 1997. There were no purchases or
sales of U.S. government and government agency obligations for the year ended
October 31, 1997.
At October 31, 1997, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes. Gross
unrealized appreciation of investments was $231,237,977 and gross unrealized
depreciation of investments was $33,960,841, resulting in net unrealized
appreciation of $197,277,136. The Fund may be able to use up to $1,445,718 of
Alliance Convertible Fund's (which was acquired in 1991) capital loss
carryforward, to offset future realized gains which expires in 1998. During the
year ended October 31, 1997, the Fund utilized $1,445,718 of capital loss
carryforward.
OPTION TRANSACTIONS
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.
14
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
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 received and the amount paid
on effecting a closing purchase transaction, including brokerage commissions,
is also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. The
risk involved in writing an option is that, if the option were exercised, the
underlying security would then be purchased or sold by the Fund at a
disadvantageous price.
For the year ended October 31, 1997, the Fund did not engage in any options
transactions.
NOTE E: CAPITAL STOCK
There are 1,350,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Class A consists of 450,000,000 shares, Class B of 225,000,000,
Class C of 225,000,000 and Advisor Class of 450,000,000. Transactions in
capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1997 1996 1997 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 43,288,597 20,905,586 $ 142,221,081 $ 59,170,697
Shares issued in
reinvestment of
dividends and
distributions 20,847,869 11,954,453 60,706,640 31,791,651
Shares converted
from Class B 6,451,809 1,815,203 21,180,500 5,221,368
Shares redeemed (28,296,289) (19,840,417) (90,979,316) (55,989,608)
Net increase 42,291,986 14,834,825 $ 133,128,905 $ 40,194,108
CLASS B
Shares sold 66,784,549 36,536,109 $ 213,984,586 $ 102,742,616
Shares issued in
reinvestment of
dividends and
distributions 9,723,395 4,052,450 28,200,000 10,727,979
Shares converted
to Class A (6,490,215) (1,824,728) (21,180,500) (5,221,368)
Shares redeemed (16,514,449) (10,761,214) (53,237,363) (30,355,431)
Net increase 53,503,280 28,002,617 $167,766,723 $77,893,796
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1997 1996 1997 1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 14,640,703 10,295,296 $ 46,769,033 $ 29,011,135
Shares issued in
reinvestment of
dividends and
distributions 2,362,593 951,608 6,851,659 2,529,282
Shares redeemed (6,677,129) (4,017,599) (21,392,727) (11,379,623)
Net increase 10,326,167 7,229,305 $ 32,227,965 $ 20,160,794
OCT. 2, 1996(A) OCT. 2, 1996(A)
TO TO
OCT. 31, 1996 OCT. 31, 1996
------------ --------------
ADVISOR CLASS
Shares sold 2,631,151 29,058 $ 9,238,958 $ 87,238
Shares issued in
reinvestment of
dividends and
distributions 22,536 -0- 67,922 -0-
Shares redeemed (1,760,224) -0- (6,490,922) -0-
Net increase 893,463 29,058 $ 2,815,958 $ 87,238
NOTE F: DEVELOPMENTS
At a Special Meeting of Shareholders of the Fund held on March 27, 1997, the
Shareholders approved a change in fundamental investment policies of the Fund
to allow the Fund to purchase and sell financial forward and futures contracts
and options thereon. The Shareholders also approved the adoption by the Fund of
non-fundamental investment policies, which may be changed by the Board of
Directors of the Fund without a shareholder vote, governing the use of these
financial forward and futures contracts and options thereon. These policies
provide that the Fund will enter into such transactions for hedging purposes
only, and will not enter into any futures contract or option thereon if
immediately thereafter the market values of the outstanding futures contracts
of the Fund and the futures contracts subject to outstanding options written by
the Fund would exceed 50% of the Fund's total assets. The Fund may not purchase
or sell a stock index futures contract if immediately thereafter more than 30%
of its total assets would be hedged with stock index futures. Finally, the Fund
will not purchase or sell a stock index future contract if immediately
thereafter the sum of the amount of margin deposits on the Fund's existing
future positions would exceed 5% of the market value of the Fund's total assets.
(a) Commencement of distribution.
16
FINANCIAL HIGHLIGHTS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.00 $2.71 $2.35 $2.61 $2.48
INCOME FROM INVESTMENT OPERATIONS
Net investment income .04(a) .05 .02 .06 .06
Net realized and unrealized gain (loss)
of investment transactions .87 .50 .52 (.08) .29
Net increase (decrease) in net asset
value from operations .91 .55 .54 (.02) .35
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) (.05) (.06) (.06) (.06)
Distributions from net realized gains (.38) (.21) (.12) (.18) (.16)
Total dividends and distributions (.43) (.26) (.18) (.24) (.22)
Net asset value, end of year $3.48 $3.00 $2.71 $2.35 $2.61
TOTAL RETURN
Total investment return based on
net asset value (b) 33.28% 21.51% 24.21% (.67)% 14.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $787,566 $553,151 $458,158 $414,386 $459,372
Ratio of expenses to average net assets .92%(c) .97% 1.05% 1.03% 1.07%
Ratio of net investment income to
average net assets 1.39% 1.73% 1.88% 2.36% 2.38%
Portfolio turnover rate 88% 88% 142% 68% 91%
Average commission rate (d) $.0589 $.0625 -- -- --
</TABLE>
See footnote summary on page 20.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 2.99 $ 2.69 $ 2.34 $ 2.60 $ 2.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02(a) .03 .01 .04 .05
Net realized and unrealized gain (loss)
of investment transactions .85 .51 .49 (.08) .28
Net increase (decrease) in net asset
value from operations .87 .54 .50 (.04) .33
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.03) (.03) (.03) (.04) (.04)
Distributions from net realized gains (.38) (.21) (.12) (.18) (.16)
Total dividends and distributions (.41) (.24) (.15) (.22) (.20)
Net asset value, end of year $ 3.45 $ 2.99 $ 2.69 $ 2.34 $ 2.60
TOTAL RETURN
Total investment return based on
net asset value (b) 31.83% 21.20% 22.84% (1.50)% 14.22%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $456,399 $235,263 $136,758 $102,546 $76,633
Ratio of expenses to average net assets 1.72%(c) 1.78% 1.86% 1.85% 1.90%
Ratio of net investment income to
average net assets .56% .91% 1.05% 1.56% 1.58%
Portfolio turnover rate 88% 88% 142% 68% 91%
Average commission rate (d) $.0589 $.0625 -- -- --
</TABLE>
See footnote summary on page 20.
18
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------------
MAY 3, 1993(E)
YEAR ENDED OCTOBER 31, TO
-------------------------------------------------- OCTOBER 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 2.99 $ 2.70 $ 2.34 $ 2.60 $ 2.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02(a) .03 .01 .04 .02
Net realized and unrealized gain (loss)
on investment transactions .85 .50 .50 (.08) .17
Net increase (decrease) in net asset
value from operations .87 .53 .51 (.04) .19
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.03) (.03) (.03) (.04) (.02)
Distributions from net realized gains (.38) (.21) (.12) (.18) -0-
Total dividends and distributions (.41) (.24) (.15) (.22) (.02)
Net asset value, end of period $ 3.45 $ 2.99 $ 2.70 $ 2.34 $ 2.60
TOTAL RETURN
Total investment return based on
net asset value (b) 31.83% 20.72% 23.30% (1.50)% 7.85%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $106,526 $61,356 $35,835 $19,395 $7,774
Ratio of expenses to average net assets 1.71%(c) 1.76% 1.84% 1.84% 1.96%(f)
Ratio of net investment income to
average net assets .58% .93% 1.04% 1.61% 1.45%(f)
Portfolio turnover rate 88% 88% 142% 68% 91%
Average commission rate (d) $.0589 $.0625 -- -- --
</TABLE>
See footnote summary on page 20.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
------------------------
OCTOBER 2,
YEAR ENDED 1996(E) TO
OCTOBER 31, OCTOBER 31,
1997 1996
----------- -----------
Net asset value, beginning of period $ 3.00 $ 2.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income .05(a) -0-
Net realized and unrealized gain
on investment transactions .87 .03
Net increase in net asset
value from operations .92 .03
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.06) -0-
Distributions from net realized gains (.38) -0-
Total dividends and distributions (.44) -0-
Net asset value, end of period $ 3.48 $ 3.00
TOTAL RETURN
Total investment return based on
net asset value (b) 33.61% 1.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $3,207 $87
Ratio of expenses to average net assets .71%(c) .37%(f)
Ratio of net investment income to
average net assets 1.42% 3.40%(f)
Portfolio turnover rate 88% 88%
Average commission rate $.0589 $.0625
(a) Based on average shares outstanding.
(b) 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.
(c) Ratio reflects expenses grossed up for expense offset arrangement with the
Transfer Agent. For the year ended October 31, 1997, the ratio of expenses to
average net assets was .91%, 1.71%, 1.70% and .70% for Class A, B, C and
Advisor Class shares, respectively.
(d) 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.
(e) Commencement of distribution.
(f) Annualized.
20
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
ALLIANCE GROWTH AND INCOME FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Growth and Income Fund,
Inc. (the "Fund") at October 31, 1997, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at October 31, 1997 by correspondence with the custodian and brokers
and the application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
New York, New York
December 12, 1997
21
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)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL RISSMAN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
DANIEL V. PARKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
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.
22
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 High Yield Fund
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 Environment 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 Greater China '97 Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
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
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
23
ALLIANCE GROWTH AND INCOME 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.
GTHAR
