--------------------------------------------------------------------------------
LARGE CAP VALUE
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Alliance Growth &
Income Fund
Semi-Annual Report
April 30, 2000
AllianceCapital[LOGO](R)
The Investment Professional's Choice
<PAGE>
Investment Products Offered
-------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
-------------------------
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
LETTER TO SHAREHOLDERS
April 4, 2000
Dear Shareholder:
This report provides you with an update of the performance and market activity
of Alliance Growth & Income Fund (the "Fund") for the semi-annual reporting
period ended April 30, 2000.
Investment Objective and Policies
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 may also invest in other types of securities, including
bonds, convertible bonds, and preferred stocks.
Investment Results
The following table provides performance data for the Fund and its benchmarks as
represented by the Standard & Poor's ("S&P") 500 Stock Index, and the Russell
1000 Value Index as well as the Lipper Multi-Cap Value Funds Average for the
six- and 12-month periods ended April 30, 2000.
INVESTMENT RESULTS*
Periods Ended April 30, 2000
--------------------------------------------------------------------------------
---------------------
Total Returns
---------------------
6 Months 12 Months
-------------------------------------
Alliance Growth
& Income Fund
Class A 6.76% 4.50%
-------------------------------------
Class B 6.20% 3.59%
-------------------------------------
Class C 6.18% 3.58%
-------------------------------------
Russell 1000
Value Index -0.99% -3.88%
-------------------------------------
S&P 500 Stock
Index 7.18% 10.12%
-------------------------------------
Lipper Multi-Cap
Value Funds
Average 3.86% -0.32%
-------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* The Fund's investment results are total returns for the periods shown and
are based on the net asset value of each class of shares as of April 30,
2000. All fees and expenses related to the operation of the Fund have been
deducted, but no adjustment has been made for sales charges that may apply
when shares are purchased or redeemed. Returns for the Fund include the
reinvestment of any distributions paid during each period. Past
performance is no guarantee of future results.
The unmanaged Russell 1000 Value Index contains those securities in the
Russell 1000 Stock Index with a less-than-average growth orientation. The
unmanaged Russell 1000 Stock Index is comprised of 1000 of the largest
capitalized companies that are traded in the United States. 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
Multi-Cap Value Funds Average reflects the performance of 502 funds for
the six-month period and 486 funds for the 12-month period ended April 30,
2000. 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 an
index or average and its results are not indicative of the performance for
any specific investment including Alliance Growth & Income Fund.
Additional investment results appear on pages 4 - 7.
--------------------------------------------------------------------------------
The Fund outperformed its unmanaged benchmark, the Russell 1000 Value Index,
over the past six- and 12-month periods ended April 30, 2000 as
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
well as its peer group of funds, represented by the Lipper Multi-Cap Value Funds
Average. The outperformance was due largely to our investment emphasis upon
undervalued companies that are nevertheless, exposed to secular growth dynamics.
This emphasis has led us in the direction of health care stocks in the
pharmaceutical and hospital industries, for example, which have provided good
returns over the past six months. We have also overweighted investments in the
consumer staples area, such as supermarket and beverage companies, which have
also experienced superior near-term results. Finally, we have maintained
positions in energy which have benefited from favorable supply-demand
conditions.
The Fund underperformed the S&P 500 Stock Index during both the six- and
12-month periods under review due to the Index's overweighting in technology
stocks relative to the Fund. As the technology stocks that now constitute nearly
one-third of the broader S&P 500 Stock Index peaked in performance in early
March 2000, the Fund's six-month results are now more in line with that
benchmark.
Investment Discussion & Outlook
While the domination of growth stocks that began over five years ago has
persisted, the past two months have seen an incipient rally in the value area.
We have been waiting for the stock market to broaden into value equities for
quite some time and believe that macroeconomic conditions continue to favor such
an occurrence. There are two primary reasons why we believe this is true. First,
the global economy has reaccelerated in 1999 and is forecast to continue growing
in 2000. When growth is slow, as it was in 1998, investors bid up the premium
that growth stocks command due to these stocks' scarcity value. But when
economic growth returns, the number of attractive investments broadens, and
economically cyclical stocks become desired investments. Second, the
disinflationary trend in the domestic economy has begun to reverse and mild
inflationary circumstances have returned. Disinflation helps growth stocks
because their future results, which make up a large portion of their valuation,
are discounted at smaller increments. This process is expected to reverse with
any impending pick up of inflation. We anticipate that value stocks will find
favor once again as global growth persists.
Market Review
The recent rebound in stock prices and fall in interest rates during the period
under review are based on the hope that the Federal Reserve (the "Fed") has done
enough to achieve a soft landing. Indeed, a pause in the Fed's tightening
program is possible and perhaps even prudent. But these asset price movements
are actually self-defeating, since they will stimulate spending and cause the
economy to reaccelerate later this year. Eventually, the Fed will need to
tighten further -- we estimate by as much as 100 basis points by year-end. Asset
prices will subsequently retreat, borrowing costs will rise, consumer confidence
will finally fall from its lofty perch, and with a little luck the U.S. economy
will make a soft landing during 2001.
--------------------------------------------------------------------------------
2 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
--------------------------------------------------------------------------------
[PHOTO OMITTED]
John D.
Carifa
[PHOTO OMITTED]
Paul C.
Rissman
[PHOTO OMITTED]
Frank
Caruso
Portfolio Managers, Paul Rissman and Frank Caruso, have over 25 years combined
investment experience.
--------------------------------------------------------------------------------
Thank you for your continued interest and investment in Alliance Growth & Income
Fund. We look forward to reporting to you on market activity and the Fund's
investment results in the future.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Paul C. Rissman
Paul C. Rissman
Senior Vice President
/s/ Frank Caruso
Frank Caruso
Vice President
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 3
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH & INCOME FUND
GROWTH OF A $10,000 INVESTMENT
4/30/90 TO 4/30/00
[The following table was depicted as a mountain chart in the printed material.]
<PLOT POINTS NEEDED>
S&P 500 Stock Index: $55,814
Russell 1000 Value Index: $45,342
Alliance Growth & Income Fund Class A: $42,596
Lipper Multi-Cap Value Funds Average: $37,214
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth & Income Fund Class A shares (from 4/30/90 to 4/30/00) as
compared to the performance of appropriate broad-based indices and the Lipper
Multi-Cap Value Funds Average. 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 and
Class C shares will vary from the results shown above due to differences in
expenses charged to these 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 Russell 1000 Value Index contains those securities in the Russell
1000 Stock Index with a less-than-average growth orientation. The unmanaged
Russell 1000 Stock Index is comprised of 1000 of the largest capitalized
companies that are traded in the United States.
The Lipper Multi-Cap Value Funds Average reflects performance of 87 funds (based
on the number of funds in the average from 4/30/90 to 4/30/00). 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 indices and average shown
above, you should note that no charges or expenses are reflected in the
performance of the indices. Lipper results include fees and expenses. An
investor cannot invest directly in an index or average and its results are not
indicative of any specific investment, including Alliance Growth & Income Fund.
--------------------------------------------------------------------------------
4 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH & INCOME FUND
HISTORY OF RETURNS
YEARLY PERIODS ENDED 4/30
[BAR CHART OMITTED]
Alliance Growth & Income Fund - Yearly Periods Ended 4/30
--------------------------------------------------------------------------------
Alliance Growth & Russell 1000
Income Fund Value Index
--------------------------------------------------------------------------------
4/30/91 16.35% 12.20%
4/30/92 10.97% 15.35%
4/30/93 7.96% 16.82%
4/30/94 4.55% 7.32%
4/30/95 9.74% 12.56%
4/30/96 33.24% 29.90%
4/30/97 20.28% 22.56%
4/30/98 40.37% 42.18%
4/30/99 18.32% 14.09%
4/30/00 4.50% -3.88%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on the net
asset value. All fees and expenses related to the operation of the Fund have
been deducted. Returns for the Fund include the reinvestment of any
distributions paid during the period.
The unmanaged Russell 1000 Value Index contains those securities in the Russell
1000 Stock Index with a less-than-average growth orientation. The unmanaged
Russell 1000 Stock Index is comprised of 1000 of the largest capitalized
companies that are traded in the United States. An investor cannot invest
directly in an index and its results are not indicative of the performance for
any specific investment, including Alliance Growth & Income Fund.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 5
<PAGE>
-----------------
PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
April 30, 2000 (unaudited)
INCEPTION DATE PORTFOLIO STATISTICS
(Class A shares) Assets ($mil): $4447.6
7/1/32 Median Market Capitalization ($mil): $21,602
SECTOR BREAKDOWN
19.34% Finance
14.40% Technology
10.35% Energy
10.01% Consumer Staples
9.72% Utilities
8.72% Health Care [PIE CHART OMITTED]
8.07% Multi-Industry Companies
5.42% Consumer Services
4.36% Capital Goods
3.72% Basic Industry
1.72% Consumer Manufacturing
0.89% Transportation
3.28% Short-Term
HOLDING TYPE
96.72% Equity [PIE CHART OMITTED]
3.28% Short-Term Securities
All data as of April 30, 2000. The Fund's sector breakdown and holdings may vary
over time. These breakdowns are expressed as a percentage of total investments.
--------------------------------------------------------------------------------
6 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------
INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF APRIL 30, 2000
Class A Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 4.50% 0.03%
5 Years 22.70% 21.68%
10 Years 16.10% 15.59%
Class B Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 3.59% -0.33%
5 Years 21.75% 21.75%
Since Inception*(a) 15.12% 15.12%
Class C Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 3.58% 2.60%
5 Years 21.74% 21.74%
Since Inception* 17.10% 17.10%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 2000)
Class A Class B Class C
--------------------------------------------------------------------------------
1 Year 4.75% 4.25% 7.53%
5 Years 21.83% 21.92% 21.97%
10 Years 15.11% N/A N/A
Since Inception* 11.04% 15.03%(a) 17.06%
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.
* Inception Date: 7/1/32, Class A; 2/8/91, Class B; 5/3/93, Class C.
n/a: not applicable
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 7
<PAGE>
--------------------
TEN LARGEST HOLDINGS
--------------------
TEN LARGEST HOLDINGS
April 30, 2000 (unaudited)
Percent of
Company Value Net Assets
--------------------------------------------------------------------------------
United Technologies Corp. $ 193,539,938 4.4%
--------------------------------------------------------------------------------
Honeywell International, Inc. 179,991,000 4.0
--------------------------------------------------------------------------------
First Data Corp. 158,721,250 3.6
--------------------------------------------------------------------------------
Bank of America Corp. 156,065,000 3.5
--------------------------------------------------------------------------------
Tyco International, Ltd. 152,742,188 3.4
--------------------------------------------------------------------------------
Kroger Co. 151,692,750 3.4
--------------------------------------------------------------------------------
Tenet Healthcare Corp. 150,962,550 3.4
--------------------------------------------------------------------------------
Household International, Inc. 150,300,000 3.4
--------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. 134,550,000 3.0
--------------------------------------------------------------------------------
Schering-Plough Corp. 130,007,812 2.9
--------------------------------------------------------------------------------
$1,558,572,488 35.0%
MAJOR PORTFOLIO CHANGES
Six Months Ended April 30, 2000 (unaudited)
----------------------------------
Shares*
----------------------------------
Purchases Bought Holdings 4/30/00
--------------------------------------------------------------------------------
AFLAC, Inc. 970,000 970,000
--------------------------------------------------------------------------------
Associates First Capital Corp. Cl.A 3,841,900 4,416,900
--------------------------------------------------------------------------------
Chase Manhattan Corp. 790,000 1,601,000
--------------------------------------------------------------------------------
Dynegy, Inc. 1,100,000 1,100,000
--------------------------------------------------------------------------------
First Data Corp. 1,010,000 3,260,000
--------------------------------------------------------------------------------
Honeywell International, Inc. 3,113,125 3,214,125
--------------------------------------------------------------------------------
Kroger Co. 4,471,000 8,172,000
--------------------------------------------------------------------------------
Masco Corp. 2,130,000 3,400,000
--------------------------------------------------------------------------------
Schering-Plough Corp. 1,413,000 3,225,000
--------------------------------------------------------------------------------
United Technologies Corp. 2,364,000 3,112,200
--------------------------------------------------------------------------------
Sales Sold Holdings 4/30/00
--------------------------------------------------------------------------------
Atmel Corp. 148,900 555,200
--------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 913,000 -0-
--------------------------------------------------------------------------------
Colgate-Palmolive Co. 1,100,000 -0-
--------------------------------------------------------------------------------
Columbia HCA/Healthcare Corp. 1,500,000 -0-
--------------------------------------------------------------------------------
Consolidated Edison, Inc. 1,490,300 -0-
--------------------------------------------------------------------------------
Health Management Associates, Inc. Cl.A 4,079,500 -0-
--------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 440,000 -0-
--------------------------------------------------------------------------------
Noble Drilling Corp. 1,785,000 1,184,400
--------------------------------------------------------------------------------
Oracle Corp. 510,000 -0-
--------------------------------------------------------------------------------
Wells Fargo Co. 911,000 -0-
--------------------------------------------------------------------------------
* Adjusted for a spin off and a stock split.
--------------------------------------------------------------------------------
8 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
April 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Company Shares Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Common & Preferred Stocks - 96.4%
Finance - 19.3%
Banking - Money Centers - 4.5%
Chase Manhattan Corp. .............................. 1,601,000 $ 115,372,063
Citigroup, Inc. .................................... 1,454,250 86,436,984
--------------
201,809,047
--------------
Banking - Regional - 4.5%
Bank of America Corp. .............................. 3,185,000 156,065,000
Fleetboston Financial Corp. ........................ 1,200,000 42,525,000
--------------
198,590,000
--------------
Insurance - 2.5%
Ace, Ltd............................................ 1,150,000 27,528,125
AFLAC, Inc. ........................................ 970,000 47,348,125
PMI Group, Inc. .................................... 528,820 25,614,719
The Hartford Financial Services Group, Inc. ........ 220,000 11,481,250
--------------
111,972,219
--------------
Real Estate - 1.5%
AvalonBay Communities, Inc. ........................ 299,957 11,735,818
Crescent Real Estate Equities, Inc. ................ 168,700 2,888,987
Equity Office Properties Trust...................... 907,700 24,678,094
MeriStar Hospitality Corp. ......................... 600,000 11,850,000
ProLogis Trust...................................... 400,000 7,875,000
Public Storage, Inc. ............................... 205,600 4,600,300
Regency Realty Corp. ............................... 19,200 424,800
--------------
64,052,999
--------------
Miscellaneous - 6.3%
Associates First Capital Corp. Cl.A................. 4,416,900 97,999,969
Household International, Inc. ...................... 3,600,000 150,300,000
MBNA Corp. ......................................... 765,000 20,320,312
The CIT Group, Inc. Cl.A............................ 747,390 12,658,918
--------------
281,279,199
--------------
857,703,464
--------------
Technology - 14.4%
Communication Equipment - 2.2%
Morgan Stanley Group, Inc. Reset PERQS,
7.0% due 5/22/00(a).............................. 19,600 41,835,632
Motorola, Inc. ..................................... 480,000 57,150,000
--------------
98,985,632
--------------
Computer Hardware - 1.8%
Compaq Computer Corp. .............................. 1,365,600 39,943,800
Gateway, Inc.(b).................................... 736,000 40,664,000
--------------
80,607,800
--------------
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 9
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
<TABLE>
<CAPTION>
Company Shares Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Computer Services - 5.8%
Computer Sciences Corp.(b).......................... 758,000 $ 61,824,375
Electronic Data Systems Corp. ...................... 550,300 37,833,125
First Data Corp. ................................... 3,260,000 158,721,250
--------------
258,378,750
--------------
Contract Manufacturing - 2.8%
Sanmina Corp.(b).................................... 1,293,800 77,708,862
Solectron Corp.(b).................................. 940,400 44,022,475
--------------
121,731,337
--------------
Semi-Conductor Components - 1.8%
Altera Corp.(b)..................................... 430,400 44,008,400
Atmel Corp.(b)...................................... 555,200 27,170,100
Fairchild Semiconductor Int'l. Cl. A(b)............. 164,000 7,790,000
--------------
78,968,500
--------------
638,672,019
--------------
Energy - 10.3%
Domestic Integrated - 2.9%
Kerr-McGee Corp. ................................... 999,000 51,698,250
USX-Marathon Group.................................. 3,370,000 78,563,125
--------------
130,261,375
--------------
Domestic Producers - 1.6%
Murphy Oil Corp. ................................... 306,500 18,083,500
Shell Transport & Trading Co.
(ADR) (United Kingdom)........................... 1,100,000 53,075,000
--------------
71,158,500
--------------
International - 3.1%
BP Amoco PLC (ADR) (United Kingdom)................. 939,720 47,925,720
Repsol SA (ADR) (Spain)............................. 2,196,800 45,309,000
Total, SA (ADR) (France)............................ 600,000 45,375,000
--------------
138,609,720
--------------
Oil Service - 1.1%
Noble Drilling Corp.(b)............................. 1,184,400 47,301,975
--------------
Miscellaneous - 1.6%
Dynegy, Inc. ....................................... 1,100,000 71,981,250
--------------
459,312,820
--------------
Consumer Staples - 10.0%
Beverages - 3.0%
Pepsi Bottling Group, Inc. ......................... 6,240,000 134,550,000
--------------
Cosmetics - 1.4%
Avon Products, Inc. ................................ 1,530,000 63,495,000
--------------
</TABLE>
--------------------------------------------------------------------------------
10 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
<TABLE>
<CAPTION>
Company Shares Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Food - 1.1%
General Mills, Inc. ................................ 336,000 $ 12,222,000
Heinz (H.J.) Co. ................................... 270,000 9,180,000
Nabisco Group Holdings Corp. ....................... 1,933,900 24,898,962
--------------
46,300,962
--------------
Retail - Food & Drug - 3.4%
Kroger Co.(b)....................................... 8,172,000 151,692,750
--------------
Tobacco - 1.1%
Philip Morris Cos., Inc. ........................... 2,197,250 48,064,844
--------------
444,103,556
--------------
Utilities - 9.7%
Electric & Gas Utility - 2.7%
CMS Energy Corp. ................................... 620,000 11,780,000
Duke Power Energy Corp. ............................ 630,000 36,225,000
FPL Group, Inc. .................................... 918,000 41,482,125
GPU, Inc. .......................................... 530,000 14,873,125
Pinnacle West Capital Corp. ........................ 415,000 14,576,875
--------------
118,937,125
--------------
Telephone Utility - 6.4%
AT&T Corp. ......................................... 956,923 44,676,343
BellSouth Corp. .................................... 1,560,000 75,952,500
MCI WorldCom, Inc.(b)............................... 727,925 33,075,092
MediaOne Group, Inc.(b)............................. 897,600 67,881,000
Sprint Corp.(Fon Group)............................. 355,000 21,832,500
U S West, Inc. ..................................... 565,000 40,220,937
--------------
283,638,372
--------------
Miscellaneous - 0.6%
AES Corp.(b)........................................ 316,300 28,447,231
--------------
431,022,728
--------------
Health Care - 8.7%
Drugs - 4.0%
Schering-Plough Corp. .............................. 3,225,000 130,007,812
Warner-Lambert Co. ................................. 440,000 50,077,500
--------------
180,085,312
--------------
Medical Products - 1.3%
Abbott Laboratories................................. 1,450,000 55,734,375
--------------
Medical Services - 3.4%
Tenet Healthcare Corp. ............................. 5,920,100 150,962,550
--------------
386,782,237
--------------
Multi-Industry Companies - 8.0%
Honeywell International, Inc. ...................... 3,214,125 179,991,000
Tyco International, Ltd. ........................... 3,325,000 152,742,188
U.S. Industries, Inc. .............................. 2,069,200 25,218,375
--------------
357,951,563
--------------
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 11
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
<TABLE>
<CAPTION>
Company Shares Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Services - 5.4%
Airlines - 1.3%
Continental Airlines, Inc. Cl.B(b).................. 415,000 $ 16,600,000
Delta Air Lines, Inc. .............................. 558,000 29,434,500
UAL Corp.(b)........................................ 190,000 10,996,250
--------------
57,030,750
--------------
Broadcasting & Cable - 0.4%
A.H. Belo Corp. Series A............................ 988,700 16,498,931
--------------
Entertainment & Leisure - 0.6%
Carnival Corp. ..................................... 479,300 11,922,588
Royal Caribbean Cruises, Ltd. 7.25%
preferred stock Series A......................... 729,200 15,176,475
--------------
27,099,063
--------------
Printing & Publishing - 1.3%
Gannett Co., Inc. .................................. 893,000 57,040,375
--------------
Retail - General Merchandise - 1.8%
Saks, Inc.(b)....................................... 2,650,300 30,312,806
The Limited, Inc. .................................. 1,161,600 52,489,800
--------------
82,802,606
--------------
240,471,725
--------------
Capital Goods - 4.3%
Miscellaneous - 4.3%
United Technologies Corp. .......................... 3,112,200 193,539,938
--------------
Basic Industry - 3.7%
Chemicals - 3.3%
Dow Chemical Co. ................................... 180,000 20,340,000
Eastman Chemical Co. ............................... 350,000 18,309,375
Lyondell Chemical Co. .............................. 4,540,000 83,422,500
Solutia, Inc. ...................................... 1,780,000 24,252,500
--------------
146,324,375
--------------
Paper & Forest Products - 0.4%
Georgia-Pacific Group............................... 503,000 18,485,250
--------------
164,809,625
--------------
Consumer Manufacturing - 1.7%
Building & Related - 1.7%
Masco Corp. ........................................ 3,400,000 76,287,500
--------------
Transportation - 0.9%
Railroad - 0.9%
Burlington Northern Santa Fe Corp. ................. 870,000 20,988,750
Union Pacific Capital Trust 6.25%, 4/01/28,
Convertible preferred stock.,(b)(c).............. 444,000 18,648,000
--------------
39,636,750
--------------
Total Common & Preferred Stocks
(cost $3,904,498,756)............................ 4,290,293,925
--------------
</TABLE>
--------------------------------------------------------------------------------
12 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
<TABLE>
<CAPTION>
Principal
Amount
Company (000) Value
--------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Investments - 3.3%
Commercial Paper - 0.6%
Prudential Funding Corp.
5.80%, 5/01/00................................... $ 25,000 $ 25,000,000
--------------
Time Deposit - 2.7%
State Street Euro Dollar
5.50%, 5/01/00................................... 120,545 120,545,000
--------------
Total Short-Term Investments
(amortized cost $145,545,000).................... 145,545,000
--------------
Total Investments - 99.7%
(cost $4,050,043,756)............................ 4,435,838,925
Other assets less liabilities-0.3%.................. 11,755,887
--------------
Net Assets - 100%................................... $4,447,594,812
==============
</TABLE>
(a) Reset performance equity-linked redemption quarterly pay security. Based
on Nokia 7.00%, 5/22/00 convertible bond.
(b) Non-income producing security.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
2000, this security amounted to $18,648,000 or 0.4% of net assets.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 13
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
April 30, 2000 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments in securities, at value (cost $4,050,043,756) .............. $4,435,838,925
Cash ................................................................... 842
Receivable for capital stock sold ...................................... 15,898,569
Dividends and interest receivable ...................................... 4,963,563
--------------
Total assets ........................................................... 4,456,701,899
--------------
Liabilities
Payable for investment securities purchased ............................ 2,899,478
Payable for capital stock redeemed ..................................... 2,655,926
Advisory fee payable ................................................... 1,666,356
Distribution fee payable ............................................... 603,717
Accrued expenses and other liabilities ................................. 1,281,610
--------------
Total liabilities ...................................................... 9,107,087
--------------
Net Assets ............................................................. $4,447,594,812
==============
Composition of Net Assets
Capital stock, at par .................................................. $ 11,997,747
Additional paid-in capital ............................................. 3,843,353,604
Distribution in excess of net investment income ........................ (4,697,921)
Accumulated net realized gain on investments and
foreign currency transactions ....................................... 211,146,213
Net unrealized appreciation of investments ............................. 385,795,169
--------------
$4,447,594,812
==============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($1,685,201,804 / 451,001,385 shares of capital stock
issued and outstanding) ............................................. $3.74
Sales charge -- 4.25% of public offering price ......................... .17
-----
Maximum offering price ................................................. $3.91
=====
Class B Shares
Net asset value and offering price per share
($2,079,386,730 / 563,996,048 shares of capital stock
issued and outstanding) ............................................. $3.69
=====
Class C Shares
Net asset value and offering price per share
($617,713,389 / 167,337,903 shares of capital stock
issued and outstanding) ............................................. $3.69
=====
Advisor Class Shares
Net asset value, redemption and offering price per share
($65,292,889 / 17,439,338 shares of capital stock
issued and outstanding) ............................................. $3.74
=====
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
14 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (unaudited)
Investment Income
Dividends (net of foreign taxes
withheld of $157,470) ............. $ 33,277,537
Interest ............................. 4,500,076
------------
$ 37,777,613
Expenses
Advisory fee ......................... 9,397,087
Distribution fee - Class A ........... 1,995,051
Distribution fee - Class B ........... 9,586,129
Distribution fee - Class C ........... 2,786,094
Transfer agency ...................... 3,427,959
Registration ......................... 231,665
Printing ............................. 216,833
Custodian ............................ 160,494
Administrative ....................... 59,000
Audit and legal ...................... 57,790
Directors' fees ...................... 19,000
Miscellaneous ........................ 95,854
------------
Total expenses ....................... 28,032,956
------------
Net investment income ................ 9,744,657
------------
Realized and Unrealized Gain (Loss) on
Investment Transactions
Net realized gain on investments and
foreign currency transactions ..... 217,905,744
Net change in unrealized
appreciation/depreciation of
investments and other assets ...... 30,784,384
------------
Net gain on investments .............. 248,690,128
------------
Net Increase in Net Assets
from Operations ................... $258,434,785
============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 15
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 2000 October 31,
(unaudited) 1999
---------------- ---------------
<S> <C> <C>
Increase in Net Assets
from Operations
Net investment income ......................... $ 9,744,657 $ 12,924,582
Net realized gain on investments and
foreign currency transactions .............. 217,905,744 192,308,395
Net change in unrealized
appreciation/depreciation of
investments and other assets ............... 30,784,384 178,150,302
--------------- ---------------
Net increase in net assets from operations .... 258,434,785 383,383,279
Dividends and Distributions to
Shareholders from:
Net investment income
Class A .................................... (8,567,522) (10,978,013)
Class B .................................... (4,311,409) (1,193,038)
Class C .................................... (1,245,469) (340,026)
Advisor Class .............................. (318,178) (413,505)
Distribution in excess of net investment income
Class A .................................... -0- (2,635,795)
Class B .................................... -0- (4,325,312)
Class C .................................... -0- (1,051,612)
Advisor Class .............................. -0- (68,102)
Net realized gain on investments
Class A .................................... (71,182,289) (101,835,187)
Class B .................................... (89,586,705) (83,069,507)
Class C .................................... (25,544,119) (18,905,921)
Advisor Class .............................. (1,994,262) (2,466,651)
Capital Stock Transactions
Net increase .................................. 488,066,782 1,768,774,181
--------------- ---------------
Total increase ................................ 543,751,614 1,924,874,791
Net Assets
Beginning of year ............................. 3,903,843,198 1,978,968,407
--------------- ---------------
End of period ................................. $ 4,447,594,812 $ 3,903,843,198
=============== ===============
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
16 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2000 (unaudited)
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 may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 4% to zero depending on the
period of time the shares are held. Class B shares will automatically convert to
Class A shares eight years after the end of the calendar month of purchase.
Class C shares are subject to a contingent deferred sales charge of 1% on
redemptions made within the first year after purchase. 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, on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on the
Nasdaq Stock Market, Inc. are generally valued at the last reported sales price
or if no sale occurred, at the mean of the closing bid and asked prices on that
day. Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to the U.S. over-the-counter market, and securities listed on a national
securities exchange whose primary market is believed to be over-the-counter (but
excluding securities traded on the Nasdaq Stock Market, Inc.), are valued at the
mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of prices
obtained from a pricing service when such prices are believed to reflect the
fair market value of such securities.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 17
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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 tax basis treatment; temporary differences do
not require such reclassification.
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 $59,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended April 30, 2000.
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 $2,265,129 for the six months ended April 30, 2000.
For the six months ended April 30, 2000, the Fund's expenses were reduced by
$161,152 under an expense offset arrangement with Alliance Fund Services, Inc.
--------------------------------------------------------------------------------
18 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $467,504
from the sale of Class A shares and $42,824, $2,710,547 and $233,719 contingent
deferred sales charges imposed upon redemptions by shareholders of Class A,
Class B and Class C shares, respectively, for the six months ended April 30,
2000.
Brokerage commissions paid on investment transactions for the six months ended
April 30, 2000 amounted to $3,929,918, of which $801,254 was paid to Donaldson,
Lufkin & Jenrette ("DLJ"), and none was paid to brokers utilizing the services
of the Pershing Division of 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 distribution and servicing fees 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 are no distribution and servicing fees 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 advised
the Fund that it has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $63,660,157 and $5,084,258 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 $1,487,870,438 and $1,112,144,528,
respectively, for the six months ended April 30, 2000. There were no purchases
and sales of U.S. government and government agency obligations for the six
months ended April 30, 2000.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 19
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
At April 30, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $635,165,969 and
gross unrealized depreciation of investments was $249,370,800 resulting in net
unrealized appreciation of $385,795,169.
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 six months ended April 30, 2000, 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 con-
--------------------------------------------------------------------------------
20 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
sists of 3,000,000,000 authorized shares. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
---------------------------------- -----------------------------------
Shares Amount
---------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 2000 October 31, April 30, 2000 October 31,
(unaudited) 1999 (unaudited) 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 210,868,439 266,731,095 $ 750,628,452 $ 985,863,971
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 20,183,130 29,166,983 69,196,877 95,788,917
---------------------------------------------------------------------------------------------
Shares converted
from Class B 5,982,844 8,428,713 21,371,497 30,944,166
---------------------------------------------------------------------------------------------
Shares redeemed (192,404,009) (185,377,812) (681,981,891) (679,918,852)
---------------------------------------------------------------------------------------------
Net increase 44,630,404 118,948,979 $ 159,214,935 $ 432,678,202
=============================================================================================
Class B
Shares sold 128,499,198 315,902,586 $ 452,180,243 $ 1,159,077,903
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 25,757,292 25,381,823 87,041,412 82,271,405
---------------------------------------------------------------------------------------------
Shares converted
to Class A (6,056,244) (8,521,989) (21,371,497) (30,944,166)
---------------------------------------------------------------------------------------------
Shares redeemed (88,118,357) (60,128,994) (304,772,053) (216,203,721)
---------------------------------------------------------------------------------------------
Net increase 60,081,889 272,633,426 $ 213,078,105 $ 994,201,421
=============================================================================================
Class C
Shares sold 64,993,262 118,343,783 $ 228,818,708 $ 434,581,429
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 7,390,420 5,905,999 25,048,246 19,162,910
---------------------------------------------------------------------------------------------
Shares redeemed (46,660,801) (35,284,710) (162,012,528) (127,778,856)
---------------------------------------------------------------------------------------------
Net increase 25,722,881 88,965,072 $ 91,854,426 $ 325,965,483
=============================================================================================
Advisor Class
Shares sold 9,499,440 8,361,148 $ 33,833,253 $ 31,420,736
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 615,355 880,164 2,109,353 2,915,175
---------------------------------------------------------------------------------------------
Shares redeemed (3,394,534) (5,138,358) (12,023,290) (18,406,836)
---------------------------------------------------------------------------------------------
Net increase 6,720,261 4,102,954 $ 23,919,316 $ 15,929,075
=============================================================================================
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 21
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE F
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expense in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 2000.
--------------------------------------------------------------------------------
22 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Class A
-----------------------------------------------------------------------------------
Six
Months
Ended
April 30, Year Ended October 31,
2000 -----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ........... $3.70 $3.44 $3.48 $3.00 $2.71 $2.35
-----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ......... .02(a) .03(a) .03(a) .04(a) .05 .02
Net realized and unrealized
gain on investment
transactions ................ .21 .62 .43 .87 .50 .52
-----------------------------------------------------------------------------------
Net increase in net asset
value from operations ....... .23 .65 .46 .91 .55 .54
-----------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ........... (.02) (.03) (.04) (.05) (.05) (.06)
Distributions in excess of net
investment income ........... -0- (.01) -0- -0- -0- -0-
Distributions from net realized
gains ....................... (.17) (.35) (.46) (.38) (.21) (.12)
-----------------------------------------------------------------------------------
Total dividends and
distributions ............... (.19) (.39) (.50) (.43) (.26) (.18)
-----------------------------------------------------------------------------------
Net asset value, end of period $3.74 $3.70 $3.44 $3.48 $3.00 $2.71
===================================================================================
Total Return
Total investment return based
on net asset value(b) ....... 6.76% 20.48% 14.70% 33.28% 21.51% 24.21%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............. $1,685,202 $1,503,874 $988,965 $787,566 $553,151 $458,158
Ratio of expenses to average
net assets .................. .91%(c) .93% .93%(d) .92%(d) .97% 1.05%
Ratio of net investment
income to average
net assets .................. .94%(c) .87% .96% 1.39% 1.73% 1.88%
Portfolio turnover rate ....... 28% 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 26.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 23
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------
Six
Months
Ended
April 30, Year Ended October 31,
2000 -------------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ........... $3.66 $3.41 $3.45 $2.99 $2.69 $2.34
------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ......... -0-(a) -0-(a) .01(a) .02(a) .03 .01
Net realized and unrealized
gain on investment
transactions ................ .21 .62 .43 .85 .51 .49
------------------------------------------------------------------------------------------
Net increase in net asset
value from operations ....... .21 .62 .44 .87 .54 .50
------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ........... (.01) -0- (.02) (.03) (.03) (.03)
Distributions in excess of net
investment income ........... -0- (.02) -0- -0- -0- -0-
Distributions from net realized
gains ....................... (.17) (.35) (.46) (.38) (.21) (.12)
------------------------------------------------------------------------------------------
Total dividends and
distributions ............... (.18) (.37) (.48) (.41) (.24) (.15)
------------------------------------------------------------------------------------------
Net asset value, end of period $3.69 $3.66 $3.41 $3.45 $2.99 $2.69
==========================================================================================
Total Return
Total investment return based
on net asset value(b) ....... 6.20% 19.56% 14.07% 31.83% 21.20% 22.84%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............. $2,079,387 $1,842,045 $787,730 $456,399 $235,263 $136,758
Ratio of expenses to average
net assets .................. 1.68%(c) 1.70% 1.72%(d) 1.72%(d) 1.78% 1.86%
Ratio of net investment
income to average
net assets .................. .17%(c) .09% .17% .56% .91% 1.05%
Portfolio turnover rate ....... 28% 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 26.
--------------------------------------------------------------------------------
24 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------------------
Six
Months
Ended
April 30, Year Ended October 31,
2000 ---------------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ........... $3.66 $3.41 $3.45 $2.99 $2.70 $2.34
---------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ......... -0-(a) -0-(a) .01(a) .02(a) .03 .01
Net realized and unrealized
gain on investment
transactions ................ .21 .62 .43 .85 .50 .50
---------------------------------------------------------------------------------------
Net increase in net asset
value from operations ....... .21 .62 .44 .87 .53 .51
---------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ........... (.01) -0- (.02) (.03) (.03) (.03)
Distributions in excess of net
investment income ........... -0- (.02) -0- -0- -0- -0-
Distributions from net realized
gains ....................... (.17) (.35) (.46) (.38) (.21) (.12)
---------------------------------------------------------------------------------------
Total dividends and
distributions ............... (.18) (.37) (.48) (.41) (.24) (.15)
---------------------------------------------------------------------------------------
Net asset value, end of period $3.69 $3.66 $3.41 $3.45 $2.99 $2.70
=======================================================================================
Total Return
Total investment return based
on net asset value(b) ....... 6.18% 19.56% 14.07% 31.83% 20.72% 23.30%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............. $617,713 $518,185 $179,487 $106,526 $61,356 $35,835
Ratio of expenses to average
net assets .................. 1.67%(c) 1.69% 1.72%(d) 1.71%(d) 1.76% 1.84%
Ratio of net investment
income to average
net assets .................. .19%(c) .11% .18% .58% .93% 1.04%
Portfolio turnover rate ....... 28% 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 26.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 25
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Advisor Class
-------------------------------------------------------------------------------------
Six
Months
Ended October 2,
April 30, Year Ended October 31, 1996(e) to
2000 -------------------------------------------- October 31,
(unaudited) 1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $3.71 $3.44 $3.48 $3.00 $2.97
-------------------------------------------------------------------------------------
Income From Investment Operations
Net investment income ................... .02(a) .04(a) .04(a) .05(a) -0-
Net realized and unrealized gain on
investment transactions ............... .20 .63 .43 .87 .03
-------------------------------------------------------------------------------------
Net increase in net asset value from
operations ............................ .22 .67 .47 .92 .03
-------------------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income .... (.02) (.04) (.05) (.06) -0-
Distributions in excess of net
investment income ..................... -0- (.01) -0- -0- -0-
Distributions from net realized gains ... (.17) (.35) (.46) (.38) -0-
-------------------------------------------------------------------------------------
Total dividends and distributions ....... (.19) (.40) (.51) (.44) -0-
-------------------------------------------------------------------------------------
Net asset value, end of period .......... $3.74 $3.71 $3.44 $3.48 $3.00
=====================================================================================
Total Return
Total investment return based on net
asset value(b) ........................ 6.59% 21.03% 14.96% 33.61% 1.01%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $65,293 $39,739 $22,786 $3,207 $87
Ratio of expenses to average net assets . .66%(c) .68% .76%(d) .71%(d) .37%(c)
Ratio of net investment income to
average net assets .................... 1.19%(c) 1.12% 1.14% 1.42% 3.40%(c)
Portfolio turnover rate ................. 28% 48% 89% 88% 88%
</TABLE>
(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 distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period
of less than one year is not annualized.
(c) Annualized.
(d) Ratios reflect expenses grossed up for expense offset arrangement with the
transfer agent. For the periods shown below, the net expense ratios were
as follows:
Year Ended October 31,
----------------------
1998 1997
----------------------
Class A............... .92% .91%
Class B............... 1.71% 1.71%
Class C............... 1.71% 1.70%
Advisor Class......... .75% .70%
(e) Commencement of distribution.
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26 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
equity
Another term for stock.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
basis point (bp)
One basis point equals 0.01%.
share
A unit which represents ownership in a mutual fund or stock.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes monetary
policy and monitors the country's economic state.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 27
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $394
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 28 of the FORTUNE 100 companies and public retirement funds in 33
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 276
investment professionals in 22 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 3/31/00.
--------------------------------------------------------------------------------
28 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio and Alliance
Select Investor Series Technology Portfolio, which generally have a
$10,000 minimum initial investment) and may make subsequent investments of
$50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 29
<PAGE>
------------------
BOARD OF DIRECTORS
------------------
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Kathleen A. Corbet, Senior Vice President
Paul C. Rissman, Senior Vice President
Thomas J. Bardong, Vice President
Frank Caruso, Vice President
Joel Swanson, 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 LLP
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 10036-2798
(1) Member of the Audit Committee.
--------------------------------------------------------------------------------
30 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Limited Maturity Government Fund
Mortgage Securities Income Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 31
<PAGE>
NOTES
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32 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
Alliance Growth and Income Fund ---------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
---------------
AllianceCapital[LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
GTHSR400
