ALLIANCE GROWTH AND INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
December 28, 1998
Dear Shareholder:
This annual report provides you with an update of Alliance Growth & Income
Fund's performance and market activity for the period ended October 31, 1998.
INVESTMENT PERFORMANCE
Due to the financial crises in Japan and the emerging markets, the past 12
months have been characterized by extremes in the performance of various
financial instruments. Among the extremes has been the performance of value
stocks, in which price tends to be low relative to earnings or book value,
versus growth stocks, for which current business expectations foster higher
prices for a given level of earnings. Over the last year, the S&P 500 Stock
Index returned 22%, but if separated into growth and value components, the
growth segment's appreciation of nearly 34% dwarfed the value portion's return
of 13%. As your Fund is managed as a value fund, performance was thus lower
than that of the S&P 500. Your Fund did, however, outperform its peer group
average, the Lipper Growth and Income Funds Average, for both the six- and
12-month periods ended October 31, 1998.
INVESTMENT RESULTS*
Periods Ended October 31, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE GROWTH &
INCOME FUND
Class A -3.87% 14.70%
Class B -4.25% 14.07%
Class C -4.25% 14.07%
S&P 500 STOCK INDEX -0.40% 22.01%
LIPPER GROWTH & INCOME
FUNDS AVERAGE -6.54% 9.88%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIOD AND ARE
BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF OCTOBER 31, 1998.
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. TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER
DUE TO DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. 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 813 FUNDS FOR
THE SIX-MONTH PERIOD AND 726 FUNDS FOR THE 12-MONTH PERIOD ENDED OCTOBER 31,
1998. THESE FUNDS HAVE GENERALLY SIMILAR INVESTMENT OBJECTIVES TO ALLIANCE
GROWTH & 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.
PORTFOLIO STRATEGY
The emerging markets crisis reached a peak in August with the Russian debt
default. The potential for financial turmoil that followed led the Federal
Reserve to lower interest rates three times since September. We hope that this
is the catalyst for value stocks to improve their performance as confidence
returns to the markets and demand for investments broadens out beyond a small
group of large capitalization stocks.
Your Fund has been consistent in its portfolio characteristics of maintaining a
defensive dividend yield and price to earnings ratio, a fully invested posture,
and a 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.
1
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
Thank you for your continued interest and investment in Alliance Growth &
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 & 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
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF OCTOBER 31, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 14.70% 9.97%
Five Years 18.04% 16.99%
Ten Years 15.20% 14.69%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 14.07% 10.12%
Five Years 17.14% 17.14%
Since Inception* 14.55% 14.55%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 14.07% 13.08%
Five Years 17.13% 17.13%
Since Inception* 17.02% 17.02%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT
QUARTER-END (SEPTEMBER 30, 1998)
CLASS A CLASS B CLASS C
------- ------- -------
1 Year -4.53% -4.68% -1.80%
5 Years 14.90% 14.95% 14.93%
10 Years 13.97% 13.22% *15.21%*
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. 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.
3
* For portfolio share classes that are less than 10 years old, performance
results are as of the inception date. Inception dates are: 2/8/91, Class B
shares; 5/3/93, Class C shares.
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
ALLIANCE GROWTH & INCOME FUND
GROWTH OF A $10,000 INVESTMENT
10/31/88 TO 10/31/98
$58,000
$48,000
$38,000
$28,000
$18,000
$8,000
$10,000
S&P 500: $51,737
LIPPER GROWTH & INCOME FUNDS AVERAGE: $39,652
GROWTH &INCOME FUND CLASS A: $39,361
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 10/31/98
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth & Income Fund Class A shares (from 10/31/88 to 10/31/98) 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 Lipper Growth & Income Funds Average reflects performance of 146 funds
(based on the number of funds in the average from 10/31/88 to 10/31/98). These
funds have generally similar investment objectives to Alliance Growth & Income
Fund, although the investment policies of some funds included in the average
may vary.
When comparing Alliance Growth & Income 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 & Income Fund
Standard &Poor's 500 Stock Index
Lipper Growth &Income Funds Average
4
TEN LARGEST HOLDINGS
OCTOBER 31, 1998 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Bristol-Myers Squibb Co. $ 91,545,750 4.6%
Chase Manhattan Corp. 74,481,188 3.8
Campbell Soup Co. 73,171,406 3.7
BankAmerica Corp. 64,904,375 3.3
Citigroup, Inc. 63,887,344 3.2
USX-Marathon Group 60,145,000 3.0
Philip Morris Cos., Inc. 52,518,156 2.7
United Technologies Corp. 51,635,025 2.6
CSC Holdings, Inc. 8.5% Series I
cumulative convertible pfd. 43,583,750 2.2
RJR Nabisco Holdings Corp. 42,669,519 2.2
$618,541,513 31.3%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED OCTOBER 31, 1998
SHARES*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES BOUGHT 10/31/98
- -------------------------------------------------------------------------------
Allied-Signal Inc. 601,000 601,000
Altera Corp. 675,000 740,200
BankAmerica Corp. 1,130,000 1,130,000
Bristol Myers Squibb Co. 321,000 828,000
Campbell Soup Co. 1,004,500 1,372,500
Consolidated Edison, Inc. 497,000 655,300
Honeywell, Inc. 255,000 255,000
Royal Caribbean Cruises Ltd. 7.25% pfd. 227,000 227,000
Tenet Healthcare Corp. 1,216,100 1,216,100
USX-Marathon Group 560,000 1,840,000
HOLDINGS
SALES SOLD 10/31/98
- -------------------------------------------------------------------------------
Cisco Systems, Inc. 271,450 -0-
Eastman Kodak Co. 410,000 -0-
Federal National Mortgage Assn. 535,600 -0-
First Data Corp. 1,281,000 -0-
First Union Corp. 600,000 -0-
Home Depot, Inc. 394,000 -0-
Merck & Co., Inc. 265,800 -0-
Mobil Corp. 420,000 -0-
Schering-Plough Corp. 249,000 -0-
Texaco, Inc. 858,000 -0-
* Adjusted for a stock split.
5
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-91.8%
FINANCE-17.7%
BANKING - MONEY CENTER-3.8%
Chase Manhattan Corp. 1,311,000 $ 74,481,188
BANKING-4.1%
Bank One Corp. 320,000 15,640,000
BankAmerica Corp. 1,130,000 64,904,375
------------
80,544,375
BROKERAGE & MONEY MANAGEMENT-0.5%
Merrill Lynch & Co., Inc. 180,000 10,665,000
INSURANCE-3.8%
Citigroup, Inc. 1,357,500 63,887,344
Travelers Property Casualty Corp. Cl.A 391,900 12,026,431
------------
75,913,775
REAL ESTATE-1.5%
AvalonBay Communities, Inc. 149,957 4,817,368
Crescent Real Estate Equities Co. 168,700 4,228,044
Equity Office Properties Trust 207,700 4,984,800
MeriStar Hospitality Corp. 500,000 9,250,000
Pacific Retail Trust Co. (a) 40,000 441,600
Public Storage, Inc. 205,600 5,486,950
------------
29,208,762
MISCELLANEOUS-4.0%
Associates First Capital Corp. Cl.A 235,000 16,567,500
Household International, Inc. 774,000 28,299,375
MBNA Corp. 765,000 17,451,563
PMI Group, Inc. 352,547 17,781,589
------------
80,100,027
------------
350,913,127
CONSUMER STAPLES-15.4%
BEVERAGES-0.6%
Coca-Cola Enterprises, Inc. 340,000 12,261,250
COSMETICS-3.0%
Avon Products, Inc. 960,000 38,100,000
Gillette Co. 480,000 21,570,000
------------
59,670,000
FOOD-5.8%
Campbell Soup Co. 1,372,500 73,171,406
Coca-Cola Co. 325,000 21,978,125
Tyson Foods, Inc. Cl.A 800,000 18,400,000
------------
113,549,531
HOUSEHOLD PRODUCTS-1.2%
Colgate-Palmolive Co. 265,000 23,419,375
TOBACCO-4.8%
Philip Morris Cos., Inc. 1,027,250 52,518,156
RJR Nabisco Holdings Corp. 1,493,900 42,669,519
------------
95,187,675
------------
304,087,831
CONSUMER SERVICES-12.5%
AIRLINES-1.5%
Delta Air Lines, Inc. 279,000 29,451,938
APPAREL-1.0%
Nautica Enterprises, Inc. (b) 500,000 10,375,000
Tommy Hilfiger Corp. (b) 205,000 9,519,688
------------
19,894,688
6
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
BROADCASTING & CABLE-1.3%
A.H. Belo Corp. Series A 988,700 $ 17,981,981
AirTouch Communications, Inc.(b) 153,700 8,607,200
------------
26,589,181
ENTERTAINMENT & LEISURE-4.5%
CSC Holdings, Inc. 8.5% Series I cumulative
convertible pfd. 595,000 43,583,750
Harley-Davidson, Inc. 500,000 19,375,000
Mirage Resorts, Inc. (b) 320,000 5,420,000
Royal Caribbean Cruises Ltd.7.25% pfd. 227,000 20,075,312
------------
88,454,062
PRINTING & PUBLISHING-0.9%
Donnelley (R.R.) & Sons Co. 420,000 18,112,500
RETAIL - GENERAL MERCHANDISE-2.4%
Dayton Hudson Corp. 924,000 39,154,500
Federated Department Stores, Inc. (b) 234,037 8,995,797
------------
48,150,297
MISCELLANEOUS-0.9%
MediaOne Group, Inc. 320,000 17,240,000
------------
247,892,666
TECHNOLOGY-10.1%
COMMUNICATION EQUIPMENT-0.9%
Northern Telecom, Ltd. 138,300 5,920,969
PairGain Technologies, Inc. (b) 259,300 2,131,122
Tellabs, Inc. (b) 175,000 9,619,531
------------
17,671,622
COMPUTER HARDWARE-1.0%
Compaq Computer Corp. 616,000 19,481,000
COMPUTER SERVICES-0.9%
Electronic Data Systems Corp. 440,300 17,914,706
COMPUTER SOFTWARE-1.0%
Oracle Corp. (a) 690,000 20,398,125
NETWORKING SOFTWARE-1.5%
Ascend Communications, Inc. (b) 440,000 21,216,250
Fore Systems, Inc. (b) 570,000 8,924,063
------------
30,140,313
SEMI-CONDUCTOR COMPONENTS-2.2%
Altera Corp. (b) 740,200 30,787,694
Atmel Corp. (b) 1,084,100 12,636,540
------------
43,424,234
MISCELLANEOUS-2.6%
Sanmina Corp. (b) 317,900 13,073,637
Solectron Corp. (b) 663,000 37,956,750
------------
51,030,387
------------
200,060,387
UTILITIES-8.6%
ELECTRIC & GAS UTILITY-4.8%
CMS Energy Corp. 455,000 20,048,438
Consolidated Edison, Inc. 655,300 32,846,912
FPL Group, Inc. 678,000 42,417,375
------------
95,312,725
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
TELEPHONE UTILITY-3.8%
AT&T Corp. 566,682 $ 35,275,954
MCI WorldCom, Inc. (b) 726,950 40,186,705
------------
75,462,659
------------
170,775,384
HEALTH CARE-8.3%
BIOTECHNOLOGY-0.6%
Centocor, Inc. (b) 251,100 11,166,103
DRUGS-4.6%
Bristol-Myers Squibb Co. 828,000 91,545,750
MEDICAL SERVICES-3.1%
PacifiCare Health Systems, Inc. Cl.B (b) 336,500 26,478,344
Tenet Healthcare Corp. (b) 1,216,100 33,974,794
------------
60,453,138
------------
163,164,991
ENERGY-7.2%
DOMESTIC INTEGRATED-3.0%
USX-Marathon Group 1,840,000 60,145,000
DOMESTIC PRODUCERS-1.6%
Apache Corp. 633,000 17,921,812
Murphy Oil Corp. 242,000 9,997,625
Union Pacific Resources Group, Inc. 209,400 2,722,200
------------
30,641,637
OIL SERVICE-2.1%
BJ Services Co. (b) 193,000 3,944,438
Noble Drilling Corp. (b) 1,435,000 24,664,062
Transocean Offshore, Inc. 330,000 12,189,375
------------
40,797,875
MISCELLANEOUS-0.5%
AES Corp. (b) 253,300 $10,369,469
------------
141,953,981
CAPITAL GOODS-4.4%
MACHINERY-0.6%
Case Corp. 560,000 12,320,000
MISCELLANEOUS-3.8%
Allied-Signal, Inc. 601,000 23,401,437
United Technologies Corp. 542,100 51,635,025
------------
75,036,462
------------
87,356,462
MULTI INDUSTRY COMPANIES-4.0%
Honeywell, Inc. 255,000 20,368,125
Tyco International, Ltd. 680,000 42,117,500
U.S. Industries, Inc. 1,069,200 17,441,325
------------
79,926,950
AEROSPACE & DEFENSE-1.5%
AEROSPACE-1.5%
General Dynamics Corp. 499,000 29,534,563
TRANSPORTATION-1.2%
RAILROADS-1.2%
Canadian Pacific, Ltd. (b) 165,000 3,733,125
Union Pacific Capital Trust
6.25%, 4/01/28 convertible pfd. (d) 444,000 20,424,000
------------
24,157,125
BASIC INDUSTRY-0.9%
CHEMICALS-0.9%
Dow Chemical Co. 180,000 16,852,500
Total Common & Preferred Stocks
(cost $1,642,006,153) 1,816,675,967
8
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
CONVERTIBLE BOND-0.7%
Genzyme Corp.5.25%, 6/01/05
(cost $11,323,508) $ 10,900 $ 13,529,625
COMMERCIAL PAPER-6.4%
American Express Co.
5.07%, 11/09/98 11,000 10,987,607
5.12%, 11/02/98 15,000 14,997,866
5.13%, 11/05/98 14,000 13,992,020
Ford Motor Credit Corp.
4.98%, 11/03/98 10,000 9,997,233
5.08%, 11/06/98 10,000 9,992,944
5.20%, 11/16/98 6,500 6,485,917
Merrill Lynch & Co., Inc.
5.11%, 11/04/98 10,000 9,995,742
Prudential Funding Corp.
5.06%, 11/10/98 $20,000 19,974,700
5.08%, 11/12/98 25,000 24,961,195
5.13%, 11/13/98 6,100 6,089,569
Total Commercial Paper
(amortized cost $127,474,793) 127,474,793
TOTAL INVESTMENTS-98.9%
(cost $1,780,804,454) $1,957,680,385
Other assets less liabilities-1.1% 21,288,022
NET ASSETS-100% $1,978,968,407
(a) Illiquid security, valued at fair market value (see Note A).
(b) Non-income producing security.
(c) Country of origin--Canada.
(d) 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 October 31, 1998, this security
amounted to $20,424,000 or 1.0% of net assets.
Glossary:
pfd. - Preferred Stock
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $1,780,804,454) $ 1,957,680,385
Cash 165,926
Receivable for investment securities sold 23,129,080
Receivable for capital stock sold 7,743,175
Dividends and interest receivable 2,848,934
Total assets 1,991,567,500
LIABILITIES
Payable for investment securities purchased 6,368,868
Payable for capital stock redeemed 3,683,336
Distribution fee payable 923,475
Advisory fee payable 724,349
Accrued expenses and other liabilities 899,065
Total liabilities 12,599,093
NET ASSETS $1,978,968,407
COMPOSITION OF NET ASSETS
Capital stock, at par $5,779,688
Additional paid-in capital 1,592,730,697
Accumulated net investment income 392,954
Accumulated net realized gains on investment transactions 203,204,585
Net unrealized appreciation of investments and other assets 176,860,483
$ 1,978,968,407
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($988,965,430 / 287,422,002 shares of capital stock
issued and outstanding) $3.44
Sales charge--4.25% of public offering price .15
Maximum offering price $3.59
CLASS B SHARES
Net asset value and offering price per share
($787,729,967 / 231,280,733 shares of capital stock
issued and outstanding) $3.41
CLASS C SHARES
Net asset value and offering price per share
($179,486,655 / 52,649,950 shares of capital stock
issued and outstanding) $3.41
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($22,786,355 / 6,616,123 shares of capital stock
issued and outstanding) $3.44
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998 ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $40,011) $ 27,999,542
Interest 3,758,980 $ 31,758,522
EXPENSES
Advisory fee 8,033,332
Distribution fee - Class A 2,047,708
Distribution fee - Class B 6,297,608
Distribution fee - Class C 1,443,727
Transfer agency 2,661,058
Registration 354,385
Printing 342,092
Custodian 251,237
Administrative 124,000
Audit and legal 114,974
Taxes 112,275
Directors' fees 29,000
Miscellaneous 47,547
Total expenses 21,858,943
Less: expense offset arrangement (see Note B) (190,428)
Net expenses 21,668,515
Net investment income 10,090,007
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 208,599,998
Net change in unrealized appreciation of
investments and other assets (20,404,838)
Net gain on investments 188,195,160
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 198,285,167
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,
1998 1997
------------ ------------
INCREASE (DECREASE)IN NET ASSETS
FROM OPERATIONS
Net investment income $ 10,090,007 $ 11,804,363
Net realized gain on
investment transactions 208,599,998 187,140,969
Net change in unrealized appreciation
of investments and other assets (20,404,838) 91,558,026
Net increase in net assets
from operations 198,285,167 290,503,358
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (11,056,910) (10,304,349)
Class B (3,430,012) (3,192,222)
Class C (790,836) (778,427)
Advisor Class (59,998) (26,635)
Net realized gain on investments
Class A (104,156,500) (69,814,848)
Class B (62,542,206) (30,538,252)
Class C (14,674,879) (7,901,806)
Advisor Class (419,910) (45,499)
CAPITAL STOCK TRANSACTIONS
Net increase 624,116,466 335,939,551
Total increase 625,270,382 503,840,871
NET ASSETS
Beginning of year 1,353,698,025 849,857,154
End of year $1,978,968,407 $1,353,698,025
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 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 currently sold with
a contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. 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, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
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 the securities are
purchased or sold. The Fund accretes discounts as adjustments to interest
income. Investment gains and losses are determined on the identified cost basis.
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 Advisor Class shares have no distribution fees.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends 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
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
tax basis treatment; temporary differences do not require such
reclassification. During the current fiscal year, permanent differences,
primarily due to a distribution reclass, resulted in a net increase in
accumulated net investment income and additional paid in capital and a
corresponding decrease in accumulated realized gains on investment
transactions. This reclassification had no effect on net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an advisory agreement, the Fund pays Alliance Capital
Management L.P. (the "Adviser"), an advisory fee at an annual rate of .625% of
the first $200 million, .50% of the next $200 million and .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 $124,000 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, 1998.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $1,804,891 for the year ended October 31, 1998.
In addition, for the year ended October 31, 1998, the Fund's expenses were
reduced by $190,428 under an expense offset arrangement with Alliance Fund
Services. Transfer Agency fees reported in the statement of operations excluse
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 $220,637 from the sale of Class
A shares and $35,339, $790,434 and $48,382 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, 1998.
Brokerage commissions paid on investment transactions for the year ended
October 31, 1998 amounted to $3,594,269, of which $3,115 was paid to Donaldson,
Lufkin & Jenrette Securities Corp., 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 the 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
$21,617,958 and $1,965,039 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 $1,721,995,805 and $1,390,597,540,
respectively, for the year ended October 31, 1998. There were purchases of
$35,103,398 and sales of $35,901,935 of U.S. government and government agency
obligations for the year ended October 31, 1998.
At October 31, 1998, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes. Gross
unrealized
14
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
appreciation of investments was $262,985,752 and gross unrealized depreciation
of investments was $86,109,821 resulting in net unrealized appreciation of
$176,875,931. During the year ended October 31, 1998, the Fund utilized
$1,445,718 of capital loss carryforward.
1. 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.
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 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 was exercised the
underlying security could then be purchased or sold by the Fund at a
disadvantageous price.
For the year ended October 31, 1998, the Fund did not engage in any option
transactions.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
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,
1998 1997 1998 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 98,222,812 43,288,597 $ 334,903,712 $ 142,221,081
Shares issued in
reinvestment of
dividends and
distributions 29,831,349 20,847,869 93,523,259 60,706,640
Shares converted
from Class B 8,647,040 6,451,809 29,353,090 21,180,500
Shares redeemed (75,720,075) (28,296,289) (257,505,502) (90,979,316)
Net increase 60,981,126 42,291,986 $ 200,274,559 $ 133,128,905
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,
1998 1997 1998 1997
------------ ------------ -------------- --------------
CLASS B
Shares sold 121,143,305 66,784,549 $ 410,581,531 $ 213,984,586
Shares issued in
reinvestment of
dividends and
distributions 19,847,882 9,723,395 61,492,874 28,200,000
Shares converted
to Class A (8,725,071) (6,490,215) (29,353,090) (21,180,500)
Shares redeemed (33,250,320) (16,514,449) (109,755,296) (53,237,363)
Net increase 99,015,796 53,503,280 $ 332,966,019 $ 167,766,723
CLASS C
Shares sold 33,804,199 14,640,703 $ 114,565,500 $ 46,769,033
Shares issued in
reinvestment of
dividends and
distributions 4,670,589 2,362,593 14,469,664 6,851,659
Shares redeemed (16,673,562) (6,677,129) (55,675,053) (21,392,727)
Net increase 21,801,226 10,326,167 $ 73,360,111 $ 32,227,965
ADVISOR CLASS
Shares sold 7,117,703 2,631,151 $ 22,635,129 $9,238,958
Shares issued in
reinvestment of
dividends and
distributions 143,377 22,536 450,418 67,922
Shares redeemed (1,567,478) (1,760,224) (5,569,770) (6,490,922)
Net increase 5,693,602 893,463 $ 17,515,777 $ 2,815,958
NOTE F: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility") to
provide short-term financing if necessary, subject to certain restrictions in
connection with abnormal redemption activity. Commitment fees related to the
Facility are paid by the participating funds and are included in the
miscellaneous expense in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 1998.
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,
---------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.48 $3.00 $2.71 $2.35 $2.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03(a) .04(a) .05 .02 .06
Net realized and unrealized gain (loss)
of investment transactions .43 .87 .50 .52 (.08)
Net increase (decrease) in net asset
value from operations .46 .91 .55 .54 (.02)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.04) (.05) (.05) (.06) (.06)
Distributions from net realized gains (.46) (.38) (.21) (.12) (.18)
Total dividends and distributions (.50) (.43) (.26) (.18) (.24)
Net asset value, end of year $3.44 $3.48 $3.00 $2.71 $2.35
TOTAL RETURN
Total investment return based on net
asset value (b) 14.70% 33.28% 21.51% 24.21% (.67)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $988,965 $787,566 $553,151 $458,158 $414,386
Ratio of expenses to average net assets .93%(c) .92%(c) .97% 1.05% 1.03%
Ratio of net investment income to average
net assets .96% 1.39% 1.73% 1.88% 2.36%
Portfolio turnover rate 89% 88% 88% 142% 68%
</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,
---------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.45 $2.99 $2.69 $2.34 $2.60
INCOME FROM INVESTMENT OPERATIONS
Net investment income .01(a) .02(a) .03 .01 .04
Net realized and unrealized gain (loss)
of investment transactions .43 .85 .51 .49 (.08)
Net increase (decrease) in net asset
value from operations .44 .87 .54 .50 (.04)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.02) (.03) (.03) (.03) (.04)
Distributions from net realized gains (.46) (.38) (.21) (.12) (.18)
Total dividends and distributions (.48) (.41) (.24) (.15) (.22)
Net asset value, end of year $3.41 $3.45 $2.99 $2.69 $2.34
TOTAL RETURN
Total investment return based on net
asset value (b) 14.07% 31.83% 21.20% 22.84% (1.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $787,730 $456,399 $235,263 $136,758 $102,546
Ratio of expenses to average net assets 1.72%(c) 1.72%(c) 1.78% 1.86% 1.85%
Ratio of net investment income to average
net assets .17% .56% .91% 1.05% 1.56%
Portfolio turnover rate 89% 88% 88% 142% 68%
</TABLE>
See footnote summary on page 20.
18
ALLIANCE GROWTH AND INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.45 $2.99 $2.70 $2.34 $2.60
INCOME FROM INVESTMENT OPERATIONS
Net investment income .01(a) .02(a) .03 .01 .04
Net realized and unrealized gain (loss)
on investment transactions .43 .85 .50 .50 (.08)
Net increase (decrease) in net
asset value from operations .44 .87 .53 .51 (.04)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.02) (.03) (.03) (.03) (.04)
Distributions from net realized gains (.46) (.38) (.21) (.12) (.18)
Total dividends and distributions (.48) (.41) (.24) (.15) (.22)
Net asset value, end of period $3.41 $3.45 $2.99 $2.70 $2.34
TOTAL RETURN
Total investment return based on net
asset value (b) 14.07% 31.83% 20.72% 23.30% (1.50)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $179,487 $106,526 $61,356 $35,835 $19,395
Ratio of expenses to average net assets 1.72%(c) 1.71%(c) 1.76% 1.84% 1.84%
Ratio of net investment income to average
net assets .18% .58% .93% 1.04% 1.61%
Portfolio turnover rate 89% 88% 88% 142% 68%
</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 OCTOBER 31, 1996(D) TO
----------------------- OCTOBER 31,
1998 1997 1996
---------- ----------- ----------
Net asset value, beginning of period $3.48 $3.00 $2.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income .04(a) .05(a) -0-
Net realized and unrealized gain
on investment transactions .43 .87 .03
Net increase in net asset value from
operations .47 .92 .03
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) (.06) -0-
Distributions from net realized gains (.46) (.38) -0-
Total dividends and distributions (.51) (.44) -0-
Net asset value, end of period $3.44 $3.48 $3.00
TOTAL RETURN
Total investment return based on net
asset value (b) 14.96% 33.61% 1.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $22,786 $3,207 $87
Ratio of expenses to average net assets .76%(c) .71%(c) .37%(e)
Ratio of net investment income to average
net assets 1.14% 1.42% 3.40%(e)
Portfolio turnover rate 89% 88% 88%
(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 charges or contingent deferred
sales charges are 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) Ratios reflects expenses grossed up for expense offset arrangement with
the transfer agent. For the year ended October 31, 1998 and October 31, 1997,
the ratio of expenses to average net assets was .92%, 1.71%, 1.71% and .75% and
.91%, 1.71%, 1.70% and .70% for Class A, B, C and Advisor Class shares,
respectively.
(d) Commencement of distribution.
(e) 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, 1998, 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, 1998 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
December 15, 1998
TAX INFORMATION (UNAUDITED)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that $72,555,170 and $44,313,889 of the capital gain distributions
paid by the fund during the fiscal year October 31, 1998 are subject to the
maximum tax rates of 28% and 20% respectively. Shareholders should not use the
above information to prepare their tax returns. The information necessary to
complete your income tax returns will be included with your Form 1099 DIV which
will be sent to you separately in January 1999.
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 C. RISSMAN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, 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
PRICEWATERHOUSECOOPERS 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 U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
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
