ALLIANCE BALANCED SHARES
ANNUAL REPORT
JULY 31, 1996
ALLIANCE
INVESTING WITHOUT THE MYSTERY.
LETTER TO SHAREHOLDERS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
September 27, 1996
Dear Shareholder:
For the year ended July 31, 1996, the stock market recorded solid investment
gains, while the bond market's performance paled in comparison. The following
table shows how your Fund performed during the year ended July 31, 1996. For
comparison, we have shown the investment results of the Standard & Poor's 500,
a common measure of U.S. stock market performance; the Lehman Brothers (LB)
Government/Corporate Bond Index, which represents the broad U.S. bond market;
and the Salomon Brothers (SB) 1-Year Treasury Index.
TOTAL RETURN
PERIODS ENDED JULY 31, 1996
SIX MONTHS TWELVE MONTHS
---------- -------------
ALLIANCE BALANCED SHARES
Class A -4.75% +5.23%
Class B -5.09% +4.45%
Class C -5.08% +4.52%
S&P 500 +1.77% +16.55%
L/B GOV'T/CORP. BOND INDEX -2.26% +5.31%
SB TREASURY INDEX -2.22% +5.07%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
JULY 31; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3. THE FUND'S BENCHMARKS
ARE UNMANAGED.
MARKET OVERVIEW
During the second half of 1995, the stock market posted strong gains, thanks to
good corporate earnings and a generally favorable economic environment. Bonds
also received a boost due to a decline in intermediate- and long-term interest
rates (when interest rates rise, bond prices typically fall). In the first half
of 1996, the financial markets experienced above average market volatility due
to uncertainty about the direction of the economy. At times, the economy
appeared to be growing too fast, which caused inflation concerns (in a mature
economic recovery, higher inflation leads to higher interest rates, which often
puts pressure on stock and bond prices). At other times, the economy seemed to
be growing moderately, which dampened those concerns, stabilized interest rates
and supported positive returns from the financial markets.
PORTFOLIO POSITIONING
For most of the period, the Fund was overweighted in corporate bonds. Late in
an economic cycle, such as the one we are now in, corporations do not issue as
many bonds because their profits help to finance expansion. Thus, the supply of
bonds diminishes, which helps bolster their prices. We also invested a small
portion of our assets in international bonds, whose yields were slightly higher.
With no significant valuation differences between sectors, we remained very
well diversified across many industry groups in the equity portion of the Fund.
Two specific sector exposures are worth mentioning. We increased our weighting
in energy stocks because we see opportunities for profit margins to expand for
companies in this group. Most oil producers base their activity on a five-year
forecast that oil will sell for $18 a barrel. Our research suggests that the
supply-demand factors affecting oil prices will raise prices above that level
at some point during the period. We have also maintained a small portion of the
portfolio in closed-end mutual funds that invest in individual foreign
countries. These funds were purchased at a discount to their net asset value
and offer good upside potential. Growth companies selling at reasonable prices
are relatively rare; many attractively priced investment opportunities occur
among small- and medium-sized companies.
MARKET OUTLOOK
Looking ahead, we expect the rate of growth of the U.S. economy to moderate to
the 2-2 1/2% range. As a consequence, investors' fears about accelerating
inflation should remain subdued. This combination of a slower rate of earnings
growth and a stable set of valuation factors is expected to produce modest
positive equity returns over the next 6 to 12 months. At current levels of
stock valuation, the spread between expected equity and fixed income returns
has narrowed.
We believe the burst of economic activity that unnerved the capital markets in
the middle of this year is largely unsustainable. The main reason is that much
of this strength reflected temporary developments. Many Americans received and
spent their tax refunds, and the
1
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
government dispensed more money than usual, not uncommon during an election
year. Moreover, we expect the high levels of consumer debt will dampen spending
patterns for the remainder of 1996.
As always, we appreciate your investment in Alliance Balanced Shares and look
forward to reporting its progress to you in the coming period.
Sincerely,
John D. Carifa
Chairman and President
Kevin J. O'Brien
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE BALANCED SHARES
_______________________________________________________________________________
Alliance Balanced Shares seeks a high return through a combination of current
income and capital appreciation. It invests principally in a diversified
portfolio of equity and fixed income securities such as common and preferred
stocks, U.S. Government and agency obligations, bonds and senior debt
securities.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JULY 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +5.23% +.75%
. Five Years +7.97% +7.05%
. Ten Years +8.02% +7.55%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +4.45% +.74%
. Five Years +7.16% +7.16%
. Since Inception* +7.79% +7.79%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +4.52% +3.59%
. Since Inception* +6.46% +6.46%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares with and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
Class C shares purchased prior to July 1, 1996 are not subject to front-end or
contingent deferred sales charges. Class C shares purchased on or after July 1,
1996 are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Past performance does not guarantee
future results. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
* Inception: 2/4/91, Class B; 5/3/93, Class C.
3
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
ALLIANCE BALANCED SHARES
GROWTH OF A $10,000 INVESTMENT:
7/31/86 TO 7/31/96
$39,000
$34,000$29,000
$24,000
$19,000
$14,000
$9,000
7/31/86
7/31/96
This chart illustrates the total value of an assumed investment in Alliance
Balanced Shares Class A after deducting the maximum 4.25% sales charge, and
with dividends and capital gains reinvested. Performance for Class B and Class
C shares will vary from the results shown above due to differences in expenses
charged to those classes. Past performance is not indicative of future results,
and is not representative of future gain or loss in capital value or dividend
income.
The unmanaged Standard and 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 Lehman Brothers Government/Corporate Bond Index represents a
combination of the Government Bond Index and the Corporate Bond Index.
The Salomon Brothers 1-Year Treasury Benchmark represents performance of
Treasury bills with 1-year maturities.
When comparing Alliance Balanced Shares to the indices shown above, you should
note that the Fund's performance reflects the maximum sales charge of 4.25%
while no such charges are reflected in the performance of the indices.
Balanced Shares
S&P 500
LB Gov't/Corp. Index
SB 1-Year Treasury
4
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
ALLIANCE BALANCED SHARES...
SEEKING TO PROVIDE CURRENT INCOME FOR TODAY AND
GROWTH OF CAPITAL FOR THE FUTURE
Alliance Balanced Shares is a conservative investment that seeks to provide a
competitive total return.
For some investors, the Fund may be considered a comprehensive investment
vehicle. It strives to achieve higher returns and lower volatility than a
benchmark portfolio comprised of 60% stocks, 25% government and corporate
bonds, and 15% Treasury bills.
We do not focus on short-term performance, nor do we strive to outperform other
balanced funds, many of which are much more aggressively structured.
As the charts illustrate, Alliance Balanced Shares' asset allocation shifts
with changing market conditions. The changes, however, should be neither
dramatic nor frequent, and should not involve significant risk relative to the
benchmark noted above.
Stocks will now typically comprise about 60% of the portfolio. At times,
however, stocks may range from 50% to 70% of the portfolio.
Within the equity portion of the portfolio, we seek to outperform the stock
market without taking undue risk. Stock selection emphasizes investments with
attractive expected return-but always within the context of a diversified
portfolio. Further, a preponderance of the portfolio will always be invested in
high-quality, financially strong, dividend-paying companies.
The balance of the portfolio is comprised of U.S. Government and government
agency securities mixed with high-quality asset-backed and corporate bonds. Our
primary objectives in the fixed-income portfolio are to generate a high, steady
income stream and to provide stability for the net asset value.
We believe that this investment policy will serve the Fund's investors very
well over time.
SIX-MONTH SNAPSHOTS: THE COMPOSITION OF YOUR FUND'S PORTFOLIO
7/31/95 1/31/96 7/31/96
STOCKS: 58.7%
U.S. GOVERNMENTS & MORTGAGES: 25.0%
CORPORATE BONDS: 9.8%
CASH: 6.5%
STOCKS: 58.9%
U.S.GOVERNMENTS & MORTGAGES: 26.4%
CORPORATE BONDS: 13.5%
CASH: 1.2%
STOCKS: 56.6%
U.S. GOVERNMENTS & MORTGAGES: 28.4%
CORPORATE BONDS: 12.0%
CASH: 3.0%
5
TEN LARGEST HOLDINGS
JULY 31, 1996 ALLIANCE BALANCED SHARES
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Treasury Notes $18,838,877 14.8%
Federal National Mortgage Association 11,483,138 9.1
Government of Canada, 7.00%, 12/01/06 4,339,490 3.4
Federal Home Loan Mortgage Corp., 7.00%, 1/01/99 2,955,000 2.3
WMX Technologies, Inc. 2,710,687 2.1
Morgan Stanley Asia Pacific Fund, Inc. 2,697,500 2.1
Olin Corp. 2,580,638 2.0
Reliance Industries, Ltd., 10.375%, 6/24/16 2,484,023 2.0
Monsanto Co. 2,343,750 1.9
Philip Morris Cos., Inc. 2,301,750 1.8
$52,734,853 41.5%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JULY 31, 1996
_______________________________________________________________________________
SHARES OR PRINCIPAL
------------------------------
HOLDINGS
PURCHASES BOUGHT 7/31/96
- -------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 7.00%, 1/01/99 $3,000,000 $3,000,000
Federal National Mortgage Association,
6.50%, 6/01/11 $5,977,225 $5,977,225
Federal National Mortgage Association,
7.00%, 5/01/26 $2,972,185 $2,972,185
Federal National Mortgage Association,
8.50%, 7/01/25 $2,800,000 $2,800,000
Government of Canada, 7.00%, 12/01/06 CA$ 6,250,000 CA$ 6,250,000
Olin Corp. 30,450 30,450
Reliance Industries, Ltd., 10.375%, 6/24/16 $2,300,000 $2,300,000
U.S. Treasury Note, 5.875%, 8/15/98 $6,525,000 $6,525,000
U.S. Treasury Note, 6.75%, 4/30/00 $5,950,000 $5,950,000
WMX Technologies, Inc. 91,500 91,500
HOLDINGS
SALES SOLD 7/31/96
- -------------------------------------------------------------------------------
AT & T Corp. 40,000 -0-
Columbia HCA Healthcare Corp. 40,000 -0-
Federal National Mortgage Association,
6.00%, 4/01/09 $5,345,306 -0-
Gillette Co. 45,000 -0-
Kingdom of Denmark, 8.00%, 3/15/06 DKK 13,300,000 -0-
Kingdom of Spain, 12.25%, 3/25/00 ESP 285,000,000 -0-
PepsiCo, Inc. 41,000 -0-
U.S. Treasury Note, 5.625%, 6/30/97 $12,750,000 -0-
U.S. Treasury Note, 5.75%, 8/15/03 $3,800,000 $750,000
U.S. Treasury Note, 7.125%, 9/30/99 $4,650,000 -0-
6
PORTFOLIO OF INVESTMENTS
JULY 31, 1996 ALLIANCE BALANCED SHARES
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-56.6%
FINANCE-12.2%
INSURANCE-3.4%
American International Group, Inc. 17,000 $1,600,125
TIG Holdings, Inc. 53,000 1,470,750
Travelers Group, Inc. 30,000 1,267,500
------------
4,338,375
MUTUAL FUNDS-5.4%
Europe Fund, Inc. 80,000 1,080,000
G.T. Global Eastern Europe Fund 32,309 411,940
Morgan Stanley Asia Pacific Fund, Inc. 260,000 2,697,500
Scudder New Asia Fund, Inc. 80,000 1,070,000
The France Growth Fund, Inc. 160,000 1,580,000
------------
6,839,440
MISCELLANEOUS-3.4%
Associates First Capital Corp. 20,800 798,200
MBNA Corp. 52,500 1,463,437
MGIC Investment Corp. 34,500 2,070,000
------------
4,331,637
------------
15,509,452
SCIENCE & TECHNOLOGY-11.5%
AEROSPACE & DEFENSE-1.4%
Boeing Co. 15,000 1,327,500
General Motors Corp. 7,500 427,500
------------
1,755,000
COMPUTER HARDWARE-2.4%
Ceridian Corp. * 42,200 1,835,700
Digital Equipment Corp. * 20,000 707,500
Intergraph Corp. * 52,500 547,969
------------
3,091,169
COMPUTER NETWORKING SOFTWARE-1.7%
3Com Corp. * 22,500 887,344
Bay Networks, Inc. * 34,500 793,500
cisco Systems, Inc. * 9,000 465,750
------------
2,146,594
COMPUTER PERIPHERALS-0.9%
Seagate Technology, Inc. * 23,000 1,112,625
COMPUTER SOFTWARE & SERVICES-3.5%
Electronic Data Systems Corp. New * 22,000 1,163,250
Oracle System Corp. * 35,000 1,367,187
Softkey International, Inc. * 32,650 608,106
Sterling Software, Inc. * 20,000 1,375,000
------------
4,513,543
TELECOMMUNICATION EQUIPMENT-1.6%
Nokia Corp. (ADR) (a) 20,000 705,000
Scientific-Atlanta, Inc. 95,000 1,270,625
------------
1,975,625
------------
14,594,556
CONSUMER SERVICES-10.0%
AIRLINES-1.6%
Delta Airlines, Inc. 30,000 2,096,250
BROADCASTING & CABLE-2.4%
Cablevision Systems Corp. CI.A* 33,000 1,307,625
TCI Group Series A * 45,000 644,062
Tele-Communications-Liberty Media Group
Series A * 50,000 1,103,125
------------
3,054,812
HOTELS & RESTAURANTS-2.4%
Host Marriott Corp. * 77,000 1,010,625
ITT Corp. * 35,000 1,986,250
------------
2,996,875
HOUSEHOLD PRODUCTS-0.6%
First Brands Corp. 30,000 716,250
RETAILING-1.5%
Federated Department Stores, Inc. * 30,000 907,500
Thrifty Payless Holdings, Inc. Cl. B * 74,000 1,036,000
------------
1,943,500
7
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
TOYS-0.7%
Hasbro, Inc. 25,000 $ 896,875
MISCELLANEOUS-0.8%
Equifax, Inc. 40,000 1,005,000
------------
12,709,562
BASIC INDUSTRIES-8.0%
CHEMICALS-7.6%
Cytec Industries, Inc. * 30,000 900,000
Freeport McMoran, Inc. 48,000 1,722,000
Hercules, Inc. 24,000 1,203,000
IMC Global 24,000 948,000
Monsanto Co. 75,000 2,343,750
Olin Corp. 30,450 2,580,638
------------
9,697,388
PAPER & FOREST PRODUCTS-0.4%
Louisiana-Pacific Corp. 25,000 509,375
------------
10,206,763
HEALTH CARE-5.5%
BIOTECHNOLOGY-1.3%
Centocor, Inc. * 21,800 546,363
Steris Corp. * 38,000 1,104,375
------------
1,650,738
DRUGS-3.1%
Pfizer, Inc. 24,000 1,677,000
Warner-Lambert Co. 40,000 2,180,000
------------
3,857,000
MEDICAL SERVICES-1.1%
Aetna, Inc. 12,000 697,500
Healthsource, Inc. * 24,000 264,000
Value Health, Inc. * 30,000 465,000
------------
1,426,500
------------
6,934,238
CONSUMER STAPLES-3.3%
RETAIL-FOOD & DRUGS-0.8%
Revco D.S., Inc. * 47,000 1,069,250
TOBACCO-2.5%
Loews Corp. 10,000 806,250
Philip Morris Cos., Inc. 22,000 2,301,750
------------
3,108,000
------------
4,177,250
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
ENERGY-2.9%
OIL & GAS SERVICES-2.9%
BJ Services Co. * 30,000 $ 993,750
Louis Dreyfus Natural Gas Corp. * 33,300 466,200
Parker Drilling Co. 77,000 442,750
Schlumberger Ltd. 20,000 1,600,000
United Meridian Corp. * 6,200 203,825
------------
3,706,525
CAPITAL GOODS-2.5%
ENGINEERING & CONSTRUCTION-0.4%
Martin Marietta Materials, Inc. 20,300 459,288
ENVIRONMENTAL CONTROL-2.1%
WMX Technologies, Inc. 91,500 2,710,687
------------
3,169,975
CONSUMER MANUFACTURING-0.7%
BUILDING & RELATED-0.7%
American Standard Cos., Inc. * 26,200 841,675
TRANSPORTATION-0.0%
RAILROADS-0.0%
Canadian Pacific, Ltd. (b) 3,000 65,250
Total Common Stocks & Other Investments
(cost $72,956,784) 71,915,246
CORPORATE BONDS-12.0%
YANKEE BONDS-3.5%
Reliance Industries, Ltd.
10.375%, 6/24/16 (c) 2,300 2,484,023
St. George Bank, Ltd.
7.15%, 10/15/05 (c) 2,000 1,928,100
------------
4,412,123
FINANCIAL-1.8%
Farmers Insurance Exchange
8.625%, 5/01/24 400 379,956
Prudential Insurance Co.
8.30%, 7/01/25 (c) 2,000 1,971,730
------------
2,351,686
INDUSTRIAL-1.8%
Time Warner, Inc.
9.125%, 1/15/13 2,200 2,290,244
8
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ------------------------------------------------------------------------
OTHER-4.9%
Government of Canada
7.00%, 12/01/06 (d) CA$ 6,250 $ 4,339,490
Republic of Poland PDI
3.75%, 10/27/14 US$ 2,400 1,854,000
6,193,490
Total Corporate Bonds
(cost $15,406,452) 15,247,543
MORTGAGE-RELATED SECURITIES-13.1%
Federal Home Loan Mortgage Corp. (GOLD)
7.00%, 1/01/99 3,000 2,955,000
Federal National Mortgage Association
6.50%, 6/01/11 5,977 5,766,109
7.00%, 5/01/26 2,972 2,851,425
8.50%, 7/01/25 2,800 2,865,604
Government National Mortgage Association
7.50%, 1/15/26 2,258 2,218,038
Total Mortgage-Related Securities
(cost $16,786,343) 16,656,176
U.S. GOVERNMENT OBLIGATIONS-15.3%
U.S. Treasury Bond
7.625%, 2/15/25 500 535,310
U.S. Treasury Notes
5.75%, 8/15/03 750 710,978
5.875%, 8/15/98 6,525 6,480,108
6.75%, 4/30/00 (d) 5,950 5,997,421
7.875%, 4/15/98 (d) 5,500 5,650,370
Total U.S. Government Obligations
(cost $19,525,376) 19,374,187
COMMERCIAL PAPER-2.7%
Prudential Funding Corp.
5.52%, 8/01/96
(amortized cost $3,440,000) 3,440 3,440,000
TOTAL INVESTMENTS-99.7%
(cost $128,114,955) 126,633,152
Other assets less liabilities-0.3% 422,994
NET ASSETS-100% $127,056,146
* Non-income producing security.
(a) Country of origin-Finland.
(b) Country of origin-Canada.
(c) 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 certain qualified buyers. At July 31, 1996, the
aggregate market value of these securities amounted to $6,763,809 representing
5.3% of net assets.
(d) Securities with an aggregate market value of $15,987,281, segregated to
collateralize forward exchange currency contracts.
Glossary:
ADR - American Depository Receipt
PDI - Past Due Interest
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1996 ALLIANCE BALANCED SHARES
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $128,114,955) $126,633,152
Cash 1,408
Receivable for investment securities and foreign currency sold 14,539,605
Dividends and interest receivable 754,511
Receivable for capital stock sold 58,054
Net unrealized appreciation of forward exchange currency
contracts 1,002
Total assets 141,987,732
LIABILITIES
Payable for investment securities and foreign currency
purchased 14,394,190
Payable for capital stock redeemed 210,216
Advisory fee payable 68,540
Distribution fee payable 42,264
Accrued expenses 216,376
Total liabilities 14,931,586
NET ASSETS $127,056,146
COMPOSITION OF NET ASSETS
Capital stock, at par $ 90,941
Additional paid-in capital 112,395,014
Undistributed net investment income 200,802
Accumulated net realized gain on investments and foreign
currency transactions 15,848,909
Net unrealized depreciation of investments and foreign
currency denominated assets and liabilities (1,479,520)
$127,056,146
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($102,566,745/
7,318,889 shares of capital stock issued and outstanding) $14.01
Sales charge-4.25% of public offering price .62
Maximum offering price $14.63
CLASS B SHARES
Net asset value and offering price per share ($18,393,227/
1,333,733 shares of capital stock issued and outstanding) $13.79
CLASS C SHARES
Net asset value and offering price per share ($6,096,174/
441,448 shares of capital stock issued and outstanding) $13.81
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1996 ALLIANCE BALANCED SHARES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $4,287,638
Dividends (net of foreign taxes withheld of $1,680) 979,466 $ 5,267,104
EXPENSES
Advisory fee 879,738
Distribution fee - Class A 280,739
Distribution fee - Class B 177,192
Distribution fee - Class C 60,640
Transfer agency 245,449
Administrative 141,638
Custodian 106,308
Audit and legal 85,712
Printing 58,345
Registration 50,218
Directors' fees 24,000
Miscellaneous 23,412
Total expenses 2,133,391
Net investment income 3,133,713
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on security transactions 19,977,401
Net realized loss on foreign currency transactions (18,834)
Net change in unrealized appreciation on securities (15,278,575)
Net change in unrealized appreciation on foreign currency
denominated assets and liabilities 2,283
Net gain on investments and foreign currency transactions 4,682,275
NET INCREASE IN NET ASSETS FROM OPERATIONS $7,815,988
See notes to financial statements.
11
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 3,133,713 $ 5,049,968
Net realized gain on investments and foreign
currency transactions 19,958,567 9,974,984
Net change in unrealized appreciation of ]
investments and foreign currency
denominated assets and liabilities (15,276,292) 9,246,257
Net increase in net assets from operations 7,815,988 24,271,209
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (3,160,459) (4,018,825)
Class B (358,703) (288,412)
Class C (123,287) (105,151)
Net realized gain on investments
Class A (11,691,852) (264,146)
Class B (1,628,196) (24,685)
Class C (577,846) (8,478)
CAPITAL STOCK TRANSACTIONS
Net decrease (5,439,472) (55,580,660)
Total decrease (15,163,827) (36,019,148)
NET ASSETS
Beginning of year 142,219,973 178,239,121
End of year (including undistributed net
investment income of $200,802 and
$1,022,661, respectively) $127,056,146 $142,219,973
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996 ALLIANCE BALANCED SHARES
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Balanced Shares, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as a diversified, open end management investment company.
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares eight years after the end of the calendar month of
purchase. Class C shares purchased on or after July 1, 1996 are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. 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 significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last sales price or, if no sale occurred, at the mean of the bid and asked
price at the regular close of the New York Stock Exchange. Securities traded on
the over the counter market are valued at the mean of the closing bid and asked
price. Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at their fair value as determined in good faith by the Board of
Directors. The Board of Directors has further determined that the value of
certain portfolio debt securities, other than temporary investments in short
term securities, be determined by reference to valuations obtained from a
pricing service. Securities which mature in 60 days or less are valued at
amortized cost, which approximates market value. The ability of issuers of debt
securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry or region.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents net foreign
exchange gains and losses from holdings of foreign currencies, currency gains
or losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities for the year ended
July 31, 1996 are reflected as a component of unrealized depreciation on
investments and foreign currency denominated assets and liabilities.
3. OPTION TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on U.S. securities that are traded on U.S. 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
13
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund
bears the market risk of an unfavorable change in the price of the security or
currency underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling or buying a security or currency at a
price different from the current market value.
4. 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.
5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
7. RECLASSIFICATION OF NET ASSETS
To reflect reclassifications arising from permanent book/tax differences for
the year ended July 31, 1996, $313,123 was reclassified from accumulated net
investment income to accumulated net realized gain on investments and foreign
currency transactions.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays its Adviser,
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%
of the excess over $400 million of the average daily net assets of the Fund.
Such fee is accrued daily and paid monthly. The Adviser has agreed, under the
terms of the investment advisory agreement, to reimburse the Fund to the extent
that its aggregate expenses (exclusive of interest, taxes, brokerage,
distribution fees and extraordinary expenses) exceed the limits prescribed by
any state in which the Fund's shares are qualified for sale. The Adviser
believes that the most restrictive expense ratio limitation imposed by any
state is 2.5% of the first $30 million of its average daily net assets, 2% of
the next $70 million of its average daily net assets and 1.5% of its average
daily net assets in excess of $100 million. No reimbursement was required for
the year ended July 31, 1996.
Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for the
cost of certain legal and accounting services provided to the Fund by the
Adviser. For the year ended July 31, 1996, such reimbursement amounted to
$141,638.
The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) in accordance with a Services Agreement for providing personnel
and facilities to perform transfer agency services for the Fund. Such
compensation amounted to $158,526 for the year ended July 31, 1996.
Alliance Fund Distributors, Inc. (a wholly owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received front
end sales charges of $7,573 from the sale of Class A shares and $43,572 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the year ended July 31, 1996.
Brokerage commissions paid on securities transactions for the year ended July
31, 1996 amounted to $278,290, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.
14
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30% of the Fund's average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to both
Class B shares and Class C shares. The Agreement provides that the Distributor
will use such payments in their entirety for distribution assistance and
promotional activities. The Distributor has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $1,233,618 and
$349,587, for Class B and C shares, respectively; such costs may be recovered
from the Fund in future periods. 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 $167,003,681 and $181,385,806,
respectively, for the year ended July 31, 1996. There were purchases of
$132,619,282 and sales of $131,313,314 of U.S. Government and government agency
obligations for the year ended July 31, 1996.
FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A foreign exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contracts is included in net realized gains
or losses on foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or liquid high debt securities in a separate account of the Fund having a value
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
At July 31, 1996, the Fund had outstanding forward exchange currency contracts,
both to purchase and sell foreign currencies against the U.S. dollar, as
follows:
<TABLE>
<CAPTION>
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Australian Dollar, expiring 8/16/96 3,838 $3,023,507 $2,966,094 $(57,413)
Swedish Krona, expiring 8/08/96 13,551 2,071,122 2,049,207 (21,915)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollar, expiring 8/16/96 3,838 3,039,434 2,966,094 73,340
Canadian Dollar, expiring 8/12/96 6,092 4,450,429 4,432,272 18,157
Swedish Krona, expiring 8/08/96 13,551 2,038,040 2,049,207 (11,167)
---------
$ 1,002
</TABLE>
15
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
At July 31, 1996, the cost of securities for federal income tax purposes was
$128,468,258. Accordingly gross unrealized appreciation of investments was
$6,053,683 and gross unrealized depreciation of investments was $7,888,789
resulting in net unrealized depreciation of $1,835,106 excluding foreign
currency.
Currency losses incurred after October 31 within the Fund's fiscal year are
deemed to arise on the first business day of the following fiscal year. The
Fund incurred and elected to defer post October currency losses of $4,384.
NOTE E: CAPITAL STOCK
There are 180,000,000 shares of $.01 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 60,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, JULY 31, JULY 31, JULY 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
CLASS A
Shares sold 448,058 833,994 $ 6,746,741 $ 11,355,969
Shares issued in
reinvestment of
dividends and
distributions 836,417 258,708 12,060,428 3,476,710
Shares converted
from Class B 6,918 -0- 99,012 -0-
Shares redeemed (2,066,376) (4,776,892) (30,463,433) (67,754,957)
Net decrease (774,983) (3,684,190) $(11,557,252) $(52,922,278)
CLASS B
Shares sold 430,446 253,480 $ 6,327,512 $ 3,417,128
Shares issued in
reinvestment of
dividends and
distributions 113,453 19,426 1,612,145 257,488
Shares converted to
Class A (6,961) -0- (99,012) -0-
Shares redeemed (216,587) (343,847) (3,180,587) (4,616,970)
Net increase(decrease) 320,351 (70,941) $ 4,660,058 $ (942,354)
CLASS C
Shares sold 157,902 100,113 $ 2,334,144 $ 1,340,570
Shares issued in
reinvestment of
dividends and
distributions 37,104 5,947 527,785 78,834
Shares redeemed (96,534) (235,619) (1,404,207) (3,135,432)
Net increase(decrease) 98,472 (129,559) $ 1,457,722 $ (1,716,028)
16
FINANCIAL HIGHLIGHTS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------
OCTOBER 1,1993
YEAR ENDED JULY 31, THROUGH YEAR ENDED SEPTEMBER 30,
------------------------ JULY 31, ------------------------------------
1996 1995 1994(C) 1993 1992 1991
----------- ----------- ------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.08 $13.38 $14.40 $13.20 $12.64 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income .37 .46 .29 .34 .44 .46
Net realized and unrealized gain (loss)
on investments .45 1.62 (.74) 1.29 .57 2.17
Net increase (decrease) in net asset
value from operations .82 2.08 (.45) 1.63 1.01 2.63
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.41) (.36) (.28) (.43) (.45) (.40)
Distributions from net realized gains (1.48) (.02) (.29) -0- -0- -0-
Total dividends and distributions (1.89) (.38) (.57) (.43) (.45) (.40)
Net asset value, end of period $14.01 $15.08 $13.38 $14.40 $13.20 $12.64
TOTAL RETURN
Total investment return based on net
asset value (a) 5.23% 15.99% (3.21)% 12.52% 8.14% 25.52%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000'S OMITTED) $102,567 $122,033 $157,637 $172,484 $143,883 $154,230
Ratio of expenses to average net assets 1.38% 1.32% 1.27%(b) 1.35% 1.40% 1.44%
Ratio of net investment income to
average net assets 2.41% 3.12% 2.50%(b) 2.50% 3.26% 3.75%
Portfolio turnover rate 227% 179% 116% 188% 204% 70%
</TABLE>
See footnote summary on page 18.
17
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
OCTOBER 1,1993
YEAR ENDED JULY 31, THROUGH YEAR ENDED SEPTEMBER 30,
------------------------ JULY 31, --------------------------------------
1996 1995 1994(C) 1993 1992 1991(D)
----------- ----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.88 $13.23 $14.27 $13.13 $12.61 $11.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income .28 .30 .22 .29 .37 .25
Net realized and unrealized gain (loss)
on investments .42 1.65 (.75) 1.22 .54 .80
Net increase (decrease) in net asset
value from operations .70 1.95 (.53) 1.51 .91 1.05
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.31) (.28) (.22) (.37) (.39) (.28)
Distribution from net realized gains (1.48) (.02) (.29) -0- -0- -0-
Total dividends and distributions (1.79) (.30) (.51) (.37) (.39) (.28)
Net asset value, end of period $13.79 $14.88 $13.23 $14.27 $13.13 $12.61
TOTAL RETURN
Total investment return based on net
asset value (a) 4.45% 15.07% (3.80)% 11.65% 7.32% 8.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,393 $15,080 $14,347 $12,789 $6,499 $1,830
Ratio of expenses to average net assets 2.16% 2.11% 2.05%(b) 2.13% 2.16% 2.13%(b)
Ratio of net investment income to
average net assets 1.61% 2.30% 1.73%(b) 1.72% 2.46% 3.19%(b)
Portfolio turnover rate 227% 179% 116% 188% 204% 70%
</TABLE>
See footnote summary on page 18.
18
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MAY 3,
OCT. 1,1993 1993(E)
YEAR ENDED JULY 31, THROUGH TO
------------------------ JULY 31, SEP. 30,
1996 1995 1994(C) 1993
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.89 $13.24 $14.28 $13.63
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26 .30 .24 .11
Net realized and unrealized gain (loss)
on investments .45 1.65 (.77) .71
Net increase (decrease) in net asset
value from operations .71 1.95 (.53) .82
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.31) (.28) (.22) (.17)
Distributions from net realized gains (1.48) (.02) (.29) -0-
Total dividends and distributions (1.79) (.30) (.51) (.17)
Net asset value, end of period $13.81 $14.89 $13.24 $14.28
TOTAL RETURN
Total investment return based on net
asset value (a) 4.52% 15.06% (3.80)% 6.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $6,096 $5,108 $6,254 $1,487
Ratios of expenses to average net assets 2.15% 2.09% 2.03%(b) 2.29%(b)
Ratios of net investment income to
average net assets 1.63% 2.32% 1.81%(b) 1.47%(b)
Portfolio turnover rate 227% 179% 116% .188%
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and 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.
(b) Annualized.
(c) The Fund changed its fiscal year end from September 30 to July 31.
(d) For the period February 4, 1991 (commencement of distribution) to
September 30, 1991.
(e) Commencement of distribution.
19
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE BALANCED SHARES, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Balanced Shares, Inc. at
July 31, 1996, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the periods presented, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at July 31, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
September 18, 1996
20
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
ROBERT C. WHITE (1)
DONALD J. ROBINSON (1)
OFFICERS
BRUCE W. CALVERT, EXECUTIVE VICE PRESIDENT
KEVIN J. O'BRIEN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
MATTHEW D. BLOOM, VICE PRESIDENT
DANIEL V. PANKER, 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
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
21
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
22
ALLIANCE BALANCED SHARES
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
BALAR
