ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
SEMI-ANNUAL REPORT
DECEMBER 31, 1995
LETTER TO SHAREHOLDERS ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
February 12, 1996
Dear Shareholder:
The U.S. bond market continued its impressive, broad-based rally over the past
six months. Despite stronger economic growth, the rally strengthened, as
restrained inflationary pressures and a more accommodative monetary policy
buoyed investor confidence. Corporate and government securities outperformed
mortgages, with all sectors providing strong positive returns. Across all major
sectors of the U.S. fixed income market, longer-duration securities
outperformed shorter-duration securities as interest rates for all maturities
declined. Outside the U.S., emerging market and other foreign debt prices rose
sharply as positive developments in Latin America and Central Europe encouraged
foreign investors.
INVESTMENT RESULTS
The following table shows the Corporate Bond Portfolio's investment results
over the six- and twelve-month periods ended December 31, 1995. Also shown for
comparison are the total returns for the overall U.S. bond market, represented
by the unmanaged Lehman Brothers (LB) Aggregate Bond Index, and for the average
of its Lipper universe of 82 BBB-rated corporate debt funds. These funds have
generally similar investment objectives to your Fund though some funds included
in the average may have somewhat different investment policies.
Total Returns Through December 31, 1995
Six Months Twelve Months
---------- -------------
ALLIANCE CORPORATE BOND PORTFOLIO
Class A +12.27% +27.98%
Class B +11.90% +27.19%
Class C +11.81% +27.19%
LB AGGREGATE BOND INDEX +7.41% +21.87%
LIPPER BBB-RATED CORP.
DEBT FUNDS AVG. +14.48% +20.07%
Total returns are based on the net asset values of each class of shares as of
December 31; additional investment results appear on page 3.
ECONOMIC REVIEW
While the U.S. economy slowed in the first half of 1995, growth reaccelerated
in the third quarter due to larger than expected increases in residential
housing, government spending and business inventories. Fourth quarter economic
growth appears to have been less robust, however. Retail sales remained weak
despite significant discounting during the holiday season. Gains in real
disposable income have slowed and personal debt levels continue to escalate.
Growth also remains sluggish in the manufacturing sector. The National
Association of Purchasing Management (NAPM) Index was steady at 46.0% in
December but has remained below 50% for five consecutive months. (A reading
below 50% signals a slowdown in manufacturing output.)
Inflation data remain very favorable to the bond market. Broad price indices
such as the Consumer Price Index and Producer Price Index have risen very
modestly and labor costs remain under control. The benign inflation outlook and
the chance of a significant federal government deficit reduction package may
allow the Federal Reserve to further cut interest rates in the months ahead.
INVESTMENT OUTLOOK
It is our view that U.S. economic growth will remain modest in the period
ahead. Our forecast calls for a fixed base year GDP growth rate of 2.0% in the
first six months of the year ('fixed based year' refers to the government's
traditional GDP measure versus the new 'chain-weighted' measure). With few
inflationary pressures on the horizon, we expect the Federal Reserve to cut
interest rates further to stimulate consumer expenditures and investment. If
our forecast proves correct, the result should be further gains in U.S. bond
prices. While yield spreads for corporate bonds have narrowed relative to
Treasuries, we expect selected corporate securities to continue to perform
well. Even in an environment of slower economic growth, demand for the bonds of
corporations that have improved their balance sheets and enacted cost
containment measures should remain strong.
1
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
Outside the U.S., our long-term outlook for foreign debt remains positive. In
emerging markets, we believe risk premiums are still too high and will narrow
in many countries where economic prospects are improving.
Thank you for your continued interest and investment in Alliance Corporate Bond
Portfolio. As always we look forward to reporting its progress to you in coming
periods.
Sincerely,
John D. Carifa
Chairman and President
Wayne D. Lyski
Senior Vice President
2
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
Alliance Bond Fund Corporate Bond Portfolio seeks primarily to maximize income
over the long term consistent with providing reasonable safety in the value of
each shareholder's investment; secondarily, the Fund will seek capital
appreciation. It invests primarily in a diversified portfolio of corporate
bonds issued by domestic and foreign issuers that give promise of relatively
attractive yields.
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
-----------------------------
. One Year +27.98% +22.52%
. Five Years +14.39% +13.40%
. Ten Years +11.54% +11.06%
SEC Yield 8.23%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
-----------------------------
. One Year +27.19% +24.19%
. Since Inception* +12.87% +12.60%
SEC Yield 7.89%
CLASS C SHARES
. One Year +27.19%
. Since Inception* +9.68%
SEC Yield 7.90%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares-with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (3% year 1, 2% year 2, 1% year 3, 0% year 4);
Class C shares are not subject to front-end or contingent deferred sales
charges. 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. Yields are for the 30 days
ended December 31, 1995.
* Inception: 1/8/93, Class B; 5/3/93, Class C.
3
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS-74.6%
FINANCIAL-19.8%
BB+ CCP Insurance, Inc.
10.50%, 12/15/04 $29,000 $ 31,247,500
BB+ Firstbank Puerto Rico
7.625%, 12/15/05 20,000 19,775,000
B- Home Holdings, Inc.
8.625%, 12/15/03 33,165 25,868,700
A- Nationsbank Corp.
7.25%, 10/15/25 20,000 20,812,060
BBB RHG Finance Co.
8.875%, 10/01/05 25,000 26,125,000
------------
123,828,260
INSURANCE-16.1%
BBB- Farmers Insurance Exchange
8.625%, 5/01/24 (b) 30,050 30,573,892
BBB Life Insurance Co. New York
11.24%, 8/15/24 (b) 20,000 16,452,000
A1 National Life Vermont
8.25%, 3/01/24 (b) 18,000 17,924,400
NR Prudential Insurance Co. America
8.30%, 7/01/25 (b) 33,000 35,619,936
------------
100,570,228
YANKEES-10.8%
NR Consorcio Grupo Dina
10.50%, 11/18/97 10,000 7,650,000
NR Grupo Mexicano de Desarrollo
8.25%, 2/17/01 25,200 10,710,000
BBB Mc Cuernavaca Trust
9.25%, 7/25/01 (b) 27,566 18,744,579
BBB- Transgas De Occidente S.A.
9.79%, 11/01/10 (b) 30,000 30,450,000
------------
67,554,579
MEDIA-9.1%
BBB- Tele-Communications, Inc.
10.125%, 4/15/22 23,000 28,714,879
BBB- Time Warner Entertainment
9.15%, 2/01/23 25,000 28,351,000
------------
57,065,879
UTILITIES-6.1%
BB+ Beaver Valley Power Station II
Funding Corp.
8.68%, 6/01/17 25,000 24,474,250
B+ Niagara Mohawk Power Corp.
8.77%, 1/01/18 14,500 13,669,150
------------
38,143,400
INDUSTRIAL-5.9%
BB- Federated Department Stores Inc.
8.125%, 10/15/02 10,000 10,100,000
BBB- RJR Nabisco, Inc.
7.625%, 9/15/03 27,555 26,726,862
------------
36,826,862
GENERAL INDUSTRIAL-4.5%
BBB- Parker & Parsley Petroleum Co.
8.25%, 8/15/07 26,250 28,291,620
TELEPHONE-2.3%
BB Telewest Plc
9.625%, 10/01/06 5,500 5,616,875
Senior Discount Debenture
Zero coupon, 10/01/07 14,000 8,487,500
------------
14,104,375
Total Corporate Debt Obligations
(cost $467,671,849) 466,385,203
SOVEREIGN DEBT OBLIGATIONS-16.6%
ARGENTINA-5.9%
NR Argentina Bocon Pre 2 FRB
5.9375%, 4/01/01 24,693 19,459,385
NR Repackaged Argentina Domestic
Security Trust
14.75%, 9/01/02 (b) 18,000 17,370,000
------------
36,829,385
BULGARIA-5.2%
NR Bulgaria National Republic FRB
6.75%, 7/28/11 70,000 32,418,750
CANADA-5.5%
A+ Quebec Province Canada
7.50%, 7/15/23 33,000 34,755,897
4
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ------------------------------------------------------------------------
Total Sovereign Debt Obligations
(cost $100,682,712) $104,004,032
U.S. GOVERNMENT/AGENCY OBLIGATIONS-16.2%
U.S. TREASURY SECURITIES-11.5%
AAA U.S. Treasury Bond
6.875%, 8/15/25 $ 12,000 13,533,720
AAA U.S. Treasury Notes
7.25%, 8/15/04 22,000 24,464,660
AAA U.S. Treasury Strip
Zero coupon, 5/15/09 73,600 33,610,912
------------
71,609,292
FEDERAL NATIONAL MORTGAGE ASSOCIATION-2.6%
AAA Federal National Mortgage Assn.
Zero coupon, 10/09/19 75,800 16,356,124
TENNESSEE VALLEY AUTHORITY-2.1%
AAA Tennessee Valley Authority
Zero coupon, 11/01/25 100,000 13,300,000
Total U.S. Government/Agency
Obligations
(cost $99,250,758) 101,265,416
SHORT TERM INVESTMENTS-0.4%
A1+/P1 COMMERCIAL PAPER-0.4%
General Electric Credit Corp.
5.55%, 1/02/96
(amortized cost $2,366,635) 2,367 2,366,635
TOTAL INVESTMENTS-107.8%
(cost $669,971,954) 674,021,286
Other assets less liabilities-(7.8%) (48,914,761)
NET ASSETS-100% $625,106,525
(a) Unaudited.
(b) Securities exempt from Registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At December 31, 1995, the
aggregate market value of these securities amounted to $167,134,807,
representing 26.7% of net assets.
Glossary of Terms:
FRB - Floating Rate Bond.
NR - Not rated.
See notes to financial statements.
5
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $669,971,954) $674,021,286
Cash 5,687
Receivable for investment securities sold 16,741,120
Interest receivable 14,712,819
Receivable for capital stock sold 1,392,290
Other assets 29,416
Total assets 706,902,618
LIABILITIES
Payable for investment securities purchased 77,165,621
Dividends payable 3,262,669
Distribution fee payable 364,775
Advisory fee payable 310,107
Payable for capital stock redeemed 288,850
Accrued expenses 404,071
Total liabilities 81,796,093
NET ASSETS $625,106,525
COMPOSITION OF NET ASSETS
Capital stock, at par $ 44,973
Additional paid-in capital 608,189,702
Undistributed net investment income 4,527,437
Accumulated net realized gain on investments, options and
other assets 8,295,081
Net unrealized appreciation of investments 4,049,332
$625,106,525
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($261,067,458/
18,780,632 shares of capital stock issued and outstanding) $13.90
Sales charge-4.25% of public offering price .62
Maximum offering price $14.52
CLASS B SHARES
Net asset value and offering price per share($299,375,820/
21,541,700 shares of capital stock issued and outstanding) $13.90
CLASS C SHARES
Net asset value, redemption and offering price per share($64,663,247
/4,650,835 shares of capital stock issued and outstanding) $13.90
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
INVESTMENT INCOME
Interest $29,578,560
Dividends 1,659,569
$31,238,129
EXPENSES
Advisory fee 1,730,851
Distribution fee - Class A 364,778
Distribution fee - Class B 1,334,918
Distribution fee - Class C 282,443
Transfer agency 497,497
Custodian 69,489
Administrative 69,247
Audit and legal 56,908
Printing 54,455
Registration 50,751
Taxes 21,155
Directors' fees 5,398
Miscellaneous 10,175
Total expenses 4,548,065
Net investment income 26,690,064
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions 13,363,290
Net realized gain on option transactions 282,000
Net change in unrealized appreciation (depreciation) of:
Investments 25,425,787
Options (419,664)
Net gain on investments 38,651,413
NET INCREASE IN NET ASSETS FROM OPERATIONS $65,341,477
See notes to financial statements.
7
STATEMENT OF CHANGES
IN NET ASSETS ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
SIX MONTHS ENDED
DECEMBER 31,1995 YEAR ENDED
(UNAUDITED) JUNE 30,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 26,690,064 $ 44,706,035
Net realized gain (loss) on investments and
options transactions 13,645,290 (7,853,164)
Net change in unrealized appreciation of
investments and options 25,006,123 22,302,973
Net increase in net assets from operations 65,341,477 59,155,844
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (10,381,302) (20,387,693)
Class B (10,506,332) (17,840,438)
Class C (2,220,489) (4,314,460)
CAPITAL STOCK TRANSACTIONS
Net increase 59,701,817 52,386,982
Total increase 101,935,171 69,000,235
NET ASSETS
Beginning of period 523,171,354 454,171,119
End of period $625,106,525 $523,171,354
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 (UNAUDITED) ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Bond Fund, Inc. (the 'Fund') is registered under the Investment
Company Act of 1940 as a diversified open-end management investment company.
The Fund, which is a Maryland corporation operates as a series company
currently comprised of two portfolios: the Corporate Bond Portfolio and the
U.S. Government Portfolio. Each series is considered to be a separate entity
for financial reporting and tax purposes. The financial statements and notes
include the operations of the Corporate Bond Portfolio (the 'Portfolio') only.
The Portfolio offers three classes of shares; Class A, Class B and Class C
shares. Class A shares are sold with a front-end sales charge of up to 4.25%.
Class B shares are sold with a contingent deferred sales charge which declines
from 3% to zero depending on the period of time the shares are held. Class B
shares will automatically convert to Class A shares six years after the end of
the calendar month of purchase. Class C shares are sold without an initial or
contingent deferred sales charge. All three classes of shares have identical
voting, dividend, liquidation and other rights, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. The following is a summary of the significant accounting
policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange are valued at the
last reported sales price on such exchange. Listed securities not traded and
securities traded in the over-the-counter market, including listed debt
securities whose primary market is believed to be over-the-counter, are valued
at the mean of the closing bid and asked price as obtained from a recognized
pricing service and brokers. Securities for which bid and asked price
quotations are not readily available or restricted securities are valued in
good faith at fair value using methods determined by the Board of Directors. In
determining fair value, consideration is given to cost, operating and other
financial data.
Securities which mature in 60 days or less are valued at amortized cost, which
approximates market value.
2. TAXES
It is the Portfolio'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 or net realized gains, if applicable, to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Dividend income is recorded on ex-dividend
date. Security transactions are accounted for on the date the securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Portfolio accretes original issue discount as adjustments to
interest income.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Portfolio pays
Alliance Capital Management L.P., (the 'Adviser'), an advisory fee at a annual
rate of .625 of 1% of the first $500 million and .50 of 1% in excess of $500
million of the Portfolio's average daily net assets. Such fee is accrued daily
and paid monthly. The Adviser has agreed to reimburse the Portfolio pursuant to
the securities laws of certain states to the extent its aggregate annual
expenses (exclusive of interest, taxes, brokerage, distribution fees and
extraordinary expenses) exceed 2.5% of the first $30 million of its average
daily net assets, 2% of the next $70 million of its average daily net assets
and 1.5% of its average daily net assets in excess of $100 million. No such
reimbursement was required for the six months ended December 31, 1995.
Pursuant to the advisory agreement, the Portfolio paid $69,247 to the Adviser
representing the cost of certain legal and accounting services provided to the
Portfolio by the Adviser for the six months ended December 31, 1995.
The Portfolio compensates Alliance Fund Services, Inc. (a wholly-owned
subsidiary of the Adviser) under a Transfer Agency Agreement for providing
personnel and
9
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
facilities to perform transfer agency services for the Portfolio. Such
compensation amounted to $339,158 for the six months ended December 31, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Portfolio's shares. The Distributor received
front-end sales charges of $71,422 from the sale of Class A shares and $502,310
in contingent deferred sales charges imposed upon redemptions by shareholders
of Class B shares for the six months ended December 31, 1995.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Portfolio has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Portfolio pays a distribution fee to the Distributor at an
annual rate of up to .30 of 1% of the Portfolio's average daily net assets
attributable to Class A shares and 1% of the Portfolio's average daily net
assets attributable to the Class B and Class C shares. Such fee is 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 Portfolio in the amount of $5,718,361 and $723,921, for
Class B and Class C shares, respectively; such costs may be recovered from the
Portfolio 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
Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $1,305,338,867 and $1,213,809,535, respectively, for the six months
ended December 31, 1995. At December 31, 1995, the cost of securities for
federal income tax purposes was $669,971,954. Accordingly, gross unrealized
appreciation of investments was $23,061,004 and gross unrealized depreciation
of investments was $19,011,672, resulting in net unrealized appreciation of
$4,049,332. At June 30, 1995, the Portfolio had a capital loss carryforward for
federal income tax purposes of approximately $131,606,190 of which $8,836,071
expires in 1996; $93,188,575 in 1997; $14,295,126 in 1998; $258,361 in 2000 and
$15,028,057 in 2003.
NOTEE: DERIVATIVES
1. OPTIONS 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 and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in
10
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
determining whether the Fund has realized a gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security or currency
purchased by the Fund. In writing an option, the Fund bears the market risk of
an unfavorable change in the price of the security or currency underlying the
written option. Exercise of an option written by the Fund could result in the
Fund selling or buying a security or currency at a price different from the
current market value.
Transactions in options written for the six months ended December 31, 1995 were
as follows:
NUMBER OF
CONTRACTS PREMIUMS
--------- ------------
Options outstanding at beginning of year 1 $ 2,354,400
Options written -0- -0-
Options terminated in closing purchase transactions (1) (2,354,400)
Options expired -0- -0-
Options outstanding at December 31, 1995 -0- $ -0-
NOTE F: CAPITAL STOCK
There are 350,000,000 shares of $.001 par value capital stock authorized for
the Portfolio, of which 250,000,000 shares are designated as Class A and
50,000,000 each for Class B and Class C shares. Transactions in capital stock
were as follows:
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DEC. 31,1995 JUNE 30, DEC. 31,1995 JUNE 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------ ----------- ------------- -------------
CLASS A
Shares sold 2,147,865 4,080,977 $ 28,604,767 $ 50,484,798
Shares issued in
reinvestment of
dividends 430,635 793,256 5,705,418 9,725,083
Shares redeemed (1,657,963) (4,535,928) (22,002,516) (55,998,676)
Net increase 920,537 338,305 $ 12,307,669 $ 4,211,205
CLASS B
Shares sold 4,342,652 8,208,751 $ 57,770,276 $100,252,498
Shares issued in
reinvestment of
dividends 347,848 613,407 4,608,943 7,530,010
Shares redeemed (1,832,870) (4,864,645) (24,378,456) (58,632,382)
Net increase 2,857,630 3,957,513 $ 38,000,763 $ 49,150,126
CLASS C
Shares sold 1,285,599 2,047,757 $ 17,139,632 $ 25,280,601
Shares issued in
reinvestment of
dividends 71,536 168,260 948,615 2,081,504
Shares redeemed (654,253) (2,335,384) (8,694,862) (28,336,454)
Net increase (decrease) 702,882 (119,367) $ 9,393,385 $ (974,349)
11
FINANCIAL HIGHLIGHTS ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1995 ------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------ --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.92 $12.51 $14.15 $12.01 $11.21 $11.39
INCOME FROM INVESTMENT OPERATIONS
Net investment income .65 1.19 1.11 1.25 1.06 1.11
Net realized and unrealized gain (loss)
on investments .90 .36 (1.36) 2.13 .82 (.06)
Net increase (decrease) in net asset
value from operations 1.55 1.55 (.25) 3.38 1.88 1.05
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.57) (1.14) (1.11) (1.24) (1.08) (1.23)
Dividends in excess of net investment
income -0- -0- (.03) -0- -0- -0-
Distributions from net realized gains -0- -0- (.25) -0- -0- -0-
Total dividends and distributions (.57) (1.14) (1.39) (1.24) (1.08) (1.23)
Net asset value, end of period $13.90 $12.92 $12.51 $14.15 $12.01 $11.21
TOTAL RETURN
Total investment return based on net
asset value (c) 12.27% 13.26% (2.58)% 29.62% 17.43% 9.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $261,067 $230,750 $219,182 $216,171 $60,356 $62,268
Ratio of expenses to average net assets 1.20%(a) 1.24% 1.30% 1.39% 1.48% 1.44%
Ratio of net investment income to
average net assets 9.81%(a) 9.70% 7.76% 9.29% 8.98% 9.84%
Portfolio turnover rate 199% 387% 372% 579% 610% 357%
</TABLE>
See footnote summary on page 14.
12
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------
SIX MONTHS JANUARY 8,
ENDED 1993(B)
DECEMBER 31, YEAR ENDED JUNE 30, TO
1995 -------------------- JUNE 30,
(UNAUDITED) 1995 1994 1993
------------ --------- ---------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.92 $12.50 $14.15 $12.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income .60 1.11 1.02 .49
Net realized and unrealized gain (loss)
on investments .91 .36 (1.37) 1.69
Net increase (decrease) in net asset
value from operations 1.51 1.47 (.35) 2.18
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.53) (1.05) (1.04) (.50)
Dividends in excess of net investment
income -0- -0- (.01) -0-
Distribution from net realized gains -0- -0- (.25) -0-
Total dividends and distributions (.53) (1.05) (1.30) (.50)
Net asset value, end of period $13.90 $12.92 $12.50 $14.15
TOTAL RETURN
Total investment return based on net
asset value (c) 11.90% 12.54% (3.27)% 17.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $299,376 $241,393 $184,129 $55,508
Ratio of expenses to average net assets 1.91%(a) 1.99% 2.00% 2.10%(a)
Ratio of net investment income to
average net assets 9.13%(a) 9.07% 7.03% 7.18%(a)
Portfolio turnover rate 199% 387% 372% 579%
</TABLE>
See footnote summary on page 14.
13
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------
SIX MONTHS MAY 3,
ENDED 1993(B)
DECEMBER 31, YEAR ENDED JUNE 30, TO
1995 -------------------- JUNE 30,
(UNAUDITED) 1995 1994 1993
------------ --------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.93 $12.50 $14.15 $13.63
INCOME FROM INVESTMENT OPERATIONS
Net investment income .60 1.10 1.02 .16
Net realized and unrealized gain (loss)
on investments .90 .38 (1.37) .53
Net increase (decrease) in net asset
value from operations 1.50 1.48 (.35) .69
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.53) (1.05) (1.05) (.17)
Dividends in excess of net investment
income -0- -0- -0- -0-
Distribution from net realized gains -0- -0- (.25) -0-
Total dividends and distributions (.53) (1.05) (1.30) (.17)
Net asset value, end of period $13.90 $12.93 $12.50 $14.15
TOTAL RETURN
Total investment return based on net
asset value (c) 11.81% 12.62% (3.27)% 5.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $64,663 $51,028 50,860 $5,115
Ratio of expenses to average net assets 1.90%(a) 1.84% 1.99% 2.05%(a)
Ratio of net investment income to
average net assets 9.12%(a) 8.95% 6.98% 5.51%(a)
Portfolio turnover rate 199% 387% 372% 579%
</TABLE>
(a) Annualized.
(b) Commencement of distribution.
(c) 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 charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period less than one year is
not annualized.
14
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JAMES R. GREENE (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
EUGENE F. O'NEIL (1)
ROBERT C. WHITE (1)
OFFICERS
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL J. DENOON, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, 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 AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee.
15
ALLIANCE BOND FUND CORPORATE BOND PORTFOLIO
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
CBPSR
