ALLIANCE BALANCED SHARES
SEMI-ANNUAL REPORT
JANUARY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
March 3, 1997
Dear Shareholder:
We are pleased to provide you with an update of your Fund's performance and
market activity for the period ended January 31, 1997.
MARKET OVERVIEW
During the six months ended January 31, 1997, the investment environment
reflected, in many respects, a "best of all worlds" environment: moderate
economic growth, low inflation, a relatively stable interest rate environment
and expanding corporate earnings. In this setting, bond prices rose as interest
rates fell modestly and the stock market, especially after the Presidential
election in November, rose steadily. During the six month period ended January
31, 1997, fixed-income returns were good, while equity returns were unusually
strong.
INVESTMENT RESULTS
As the table shows, your Fund's Class A shares achieved a total return of
15.58% on a net asset value basis for the six month period ended January 31,
1997. For comparison, we have shown the performance of three benchmarks. The
S&P 500 Stock Index, as a result of the stock market's strong performance,
generated a 24.13% return, the Lehman Brothers Government/Corporate Bond Index,
posted a 4.75% return and the Salomon Brothers Treasury Index, resulted in a
4.53% return during the same period. In the context of your Fund's mandate, we
have maintained a high equity exposure which ended the period at 60.47%. We
have maintained a significant fixed-income allocation which, while providing
reasonable returns, has lagged the very strong performance of the equity
market. In addition, our equity selection has included a broader array of
companies than only those very large U.S. multinationals which have driven the
S&P 500.
INVESTMENT RESULTS*
Period Ended January 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- ---------
ALLIANCE BALANCED SHARES
Class A 15.58% 10.09%
Class B 15.06% 9.21%
Class C 15.03% 9.19%
S&P 500 STOCK INDEX 24.13% 26.33%
LEHMAN BROTHERS GOVERNMENT/
CORPORATE BOND INDEX 4.75% 2.39%
SOLOMAN BROTHERS TREASURY INDEX 4.53% 2.21%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS
OF JANUARY 31, 1997. THE FUND'S BENCHMARKS ARE UNMANAGED. ADDITIONAL RESULTS
APPEAR ON PAGE 3.
PORTFOLIO POSITIONING
During the six month period ended January 31, 1997, the Fund held little cash
and was fully invested in the equity and fixed-income markets. We continue to
maintain a larger-than-average exposure to energy stocks. A portion of the
Fund's portfolio, 5%, is in closed-end funds concentrating in foreign countries
or regions. This strategy allows us to obtain broadly diversified foreign
exposure without excessive transaction costs.
The very largest public companies in the United States comprise a majority of
the broader market averages such as the S&P 500. Hence, they have a
proportionately large effect on the price performance of these averages. Many
of these companies have performed well fundamentally, the valuations placed on
their earnings have expanded, and their stock prices have increased. While we
are always searching for large companies with good risk/return potential, we
will also seek small- and medium-sized growth companies which represent
attractively priced investment opportunities.
1
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
MARKET OUTLOOK
We expect the U.S. economy to exhibit moderate growth of approximately 2.5% in
the year ahead. Stable inflation and little, if any, change in monetary policy
should lead to positive, but modest, single-digit equity returns over the same
period. While this is the most likely outcome, the greatest chance for a
deviation from that forecast, in our view, is less that the economy rebounds to
above trend line growth and more that the economy grows more slowly than we
currently foresee and that interest rates decline over the next year. Given
this distribution of possible outcomes, we would expect, over time, to increase
the fixed-income component of the portfolio.
As always, we appreciate your investment in Alliance Balanced Shares and look
forward to reporting its progress to you in the coming periods.
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 RETURNS AS OF JANUARY 31, 1997
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 10.09% 5.41%
Five Years 10.05% 9.10%
Ten Years 8.66% 8.19%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 9.21% 5.42%
Five Years 9.20% 9.20%
Since Inception* 9.65% 9.65%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 9.19% 8.24%
Since Inception* 9.58% 9.58%
The average annual total returns reflect reinvestment of dividends and/or
capital gains distributions in additional shares with and without the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 2/4/91, Class B; 5/3/93, Class C.
3
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
1/31/96
CASH: 1.2%
STOCKS: 58.9%
U.S. GOVERNMENTS & MORTGAGES: 26.4%
CORPORATE BONDS: 13.5%
7/31/96
CASH: 3.0%
STOCKS: 56.6%
U.S. GOVERNMENTS & MORTGAGES: 28.4%
CORPORATE BONDS: 12.0%
1/31/97
CASH: 0.58%
STOCKS: 60.47%
U.S. GOVERNMENTS & MORTGAGES: 23.30%
CORPORATE BONDS: 15.65%
4
TEN LARGEST HOLDINGS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Treasury Notes $16,212,568 12.0%
Federal National Mortgage Association 8,505,795 6.3
WMX Technologies, Inc. 3,351,188 2.5
Government National Mortgage Association 2,971,848 2.2
Federal Home Loan Bank, 7.00%, 9/01/11 2,888,630 2.1
MBNA Corp. 2,716,875 2.0
American Express Co. 2,619,750 2.0
Goldman Sachs Group, 7.80%, 7/15/02 2,588,975 1.9
Reliance Industries, Ltd., 10.375%, 6/24/16 2,508,725 1.9
Morgan Stanley Asia Pacific Fund, Inc. 2,502,500 1.9
$46,866,854 34.8%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JANUARY 31, 1997 (UNAUDITED)
_______________________________________________________________________________
SHARES OR PRINCIPAL
PURCHASES BOUGHT HOLDINGS 1/31/97
- -------------------------------------------------------------------------------
American Express Co. 42,000 42,000
Beneficial Corp. 26,000 26,000
Commonwealth of Australia, 7.50%, 9/15/09 AU$ 3,300,000 AU$ 3,300,000
Empresa Nacional de Electricidad, S.A.,
7.875%, 2/01/27 $2,000,000 $2,000,000
First Tennessee Capital I, 8.07%, 1/06/27 $2,100,000 $2,100,000
First Union Capital, 7.935%, 1/15/27 $1,850,000 $1,850,000
Ford Motor Credit Co., 6.125%, 1/09/06 $2,000,000 $2,000,000
Goldman Sachs Group, 7.80%, 7/15/02 $2,500,000 $2,500,000
U.S. Treasury Note, 6.375%, 5/15/99 $2,880,000 $2,880,000
U.S. Treasury Note, 7.00%, 4/15/99 $4,900,000 $4,900,000
SALES SOLD HOLDINGS 1/31/97
- -------------------------------------------------------------------------------
Delta Airlines, Inc. 30,000 -0-
Federal National Mortgage Association,
8.50%, 7/01/25 $2,800,000 -0-
Government National Mortgage Association,
7.50%, 1/15/26 $2,257,544 -0-
Government of Canada, 7.00%, 12/01/06 CA$ 6,250,000 -0-
Olin Corp. 30,450 -0-
Philip Morris Cos., Inc. 22,000 -0-
St. George Bank, Ltd., 7.15%, 10/15/05 $2,000,000 -0-
Time Warner, Inc., 9.125%, 1/15/13 $2,200,000 -0-
U.S. Treasury Note, 5.875%, 8/15/98 $6,525,000 -0-
U.S. Treasury Note, 6.75%, 4/30/00 $5,950,000 -0-
5
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-61.2%
FINANCE-18.8%
BANKING-REGIONAL-0.7%
Wells Fargo & Co. 3,000 $ 914,250
BANKS-0.8%
Chase Manhattan Corp. 12,200 1,128,500
BROKERAGE & MONEY MANAGEMENT-0.3%
Merrill Lynch & Co., Inc. 5,000 421,250
INSURANCE-4.3%
American International Group, Inc. 17,000 2,059,125
ITT Hartford Group, Inc. 8,400 616,350
TIG Holdings, Inc. 30,000 1,038,750
Travelers Group, Inc. 40,000 2,095,000
------------
5,809,225
MUTUAL FUNDS-5.3%
Europe Fund, Inc. 80,000 1,330,000
G.T. Global Eastern Europe Fund 32,309 504,828
Morgan Stanley Asia Pacific Fund, Inc. 260,000 2,502,500
Scudder New Asia Fund, Inc. 80,000 1,070,000
The France Growth Fund, Inc. 160,000 1,700,000
------------
7,107,328
MISCELLANEOUS-7.4%
American Express Co. 42,000 2,619,750
Associates First Capital Corp. Cl.A 23,300 1,132,963
Beneficial Corp. 26,000 1,748,500
MBNA Corp. 78,750 2,716,875
MGIC Investment Corp. 24,500 1,806,875
------------
10,024,963
------------
25,405,516
ENERGY-11.3%
DOMESTIC PRODUCTS-2.9%
Apache Corp. 24,000 921,000
Gulf Canada Resources, Ltd. (a)(b) 15,100 122,688
Louis Dreyfus Natural Gas Corp. (a) 50,800 863,600
Louisiana Land & Exploration Co. 22,100 1,243,125
Murphy Oil Corp. 15,000 755,625
------------
3,906,038
OIL SERVICE-8.0%
Baker Hughes, Inc. 43,000 1,677,000
BJ Services Co. (a) 28,400 1,313,500
Halliburton Co. 25,000 1,809,375
Nabors Industries, Inc. (a) 30,000 555,000
Noble Drilling Corp. (a) 65,000 1,421,875
Parker Drilling Co. (a) 101,200 986,700
Schlumberger Ltd. 13,500 1,500,187
Tatneft (ADR) (a)(c)(d) 2,600 167,570
Transocean Offshore, Inc. 20,400 1,336,200
------------
10,767,407
MISCELLANEOUS-0.4%
Republic Industries, Inc. (a) 14,600 613,200
------------
15,286,645
TECHNOLOGY-10.2%
COMMUNICATION EQUIPMENT-1.1%
Scientific-Atlanta, Inc. 75,000 1,425,000
COMPUTER HARDWARE-2.2%
Ceridian Corp. (a) 44,700 1,687,425
Intergraph Corp. (a) 52,500 423,281
Storage Technology Corp. (a) 17,400 852,600
------------
2,963,306
COMPUTER NETWORKING SOFTWARE-1.1%
3Com Corp. (a) 15,500 1,039,469
Cisco Systems, Inc. (a) 7,000 487,812
------------
1,527,281
COMPUTER PERIPHERALS-1.2%
Seagate Technology, Inc. (a) 31,000 1,596,500
COMPUTER SOFTWARE & SERVICES-1.6%
Informix Corp. (a) 38,000 790,875
Oracle System Corp. (a) 35,000 1,358,437
------------
2,149,312
SEMICONDUCTORS CAPITAL EQUIPMENT-0.3%
Teradyne, Inc. (a) 14,500 447,688
SEMI-CONDUCTORS & RELATED-0.9%
Micron Technology, Inc. 33,000 1,146,750
TELECOMMUNICATION EQUIPMENT-1.7%
Nokia Corp. (ADR) (e) 35,000 2,340,625
6
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
TELECOMMUNICATIONS-0.1%
Frontier Corp. 7,200 $ 157,500
------------
13,753,962
CONSUMER SERVICES-5.3%
APPAREL-0.5%
Nike, Inc. Cl.B 10,800 733,050
BROADCASTING & CABLE-0.8%
Cablevision Systems Corp. Cl.A (a) 33,000 1,035,375
ENTERTAINMENT & LEISURE-1.2%
Time Warner, Inc. 41,500 1,597,750
HOTELS & RESTAURANTS-1.9%
Host Marriott Corp. (a) 77,000 1,309,000
ITT Corp. (a) 20,900 1,193,912
------------
2,502,912
MISCELLANEOUS-0.9%
Equifax, Inc. 40,000 1,260,000
------------
7,129,087
HEALTH CARE-5.2%
BIOTECHNOLOGY-1.4%
Centocor, Inc. (a) 21,800 832,488
Steris Corp. (a) 38,000 1,128,125
------------
1,960,613
DRUGS-3.6%
Pfizer, Inc. 14,000 1,300,250
SmithKline Beecham Plc (ADR) (f) 15,000 1,083,750
Warner-Lambert Co. 30,000 2,415,000
------------
4,799,000
MEDICAL SERVICES-0.2%
Healthsource, Inc. (a) 24,000 318,000
------------
7,077,613
POLLUTION CONTROL-2.5%
WMX Technologies, Inc. 91,500 3,351,188
BASIC INDUSTRIES-1.9%
CHEMICALS-1.9%
Cytec Industries, Inc. (a) 12,250 488,469
Freeport McMoran, Inc. 29,100 840,262
Monsanto Co. 32,000 1,212,000
------------
2,540,731
UTILITY-1.4%
WorldCom, Inc. (a) 75,350 1,897,878
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
CONSUMER MANUFACTURING-1.4%
BUILDING & RELATED-0.8%
American Standard Cos., Inc. (a) 26,200 $ 1,064,375
MISCELLANEOUS-0.6%
First Brands Corp. 30,000 810,000
------------
1,874,375
AEROSPACE & DEFENSE-1.2%
AEROSPACE-1.2%
Boeing Co. 15,000 1,606,875
CONSUMER STAPLES-0.9%
RETAIL-FOOD & DRUGS-0.9%
Revco D.S., Inc. (a) 32,800 1,230,000
TRANSPORTATION-0.7%
RAILROADS-0.7%
Canadian Pacific, Ltd. (b) 33,000 895,125
CAPITAL GOODS-0.4%
ENGINEERING & CONSTRUCTION-0.4%
Martin Marietta Materials, Inc. 20,300 540,488
Total Common Stocks & Other Investments
(cost $68,994,029) 82,589,483
U.S. GOVERNMENT OBLIGATIONS-12.0%
U.S. Treasury Notes
5.75%, 8/15/03 (g) 1,230 1,189,250
6.25%, 10/31/01 1,485 1,483,381
6.375%, 5/15/99 2,880 2,903,386
7.00%, 4/15/99 4,900 5,003,341
7.875%, 4/15/98 5,500 5,633,210
Total U.S. Government Obligations
(cost $16,306,183) 16,212,568
MORTGAGE-RELATED SECURITIES-11.6%
Federal Home Loan Bank
7.00%, 9/01/11 2,883 2,888,630
Federal National Mortgage Association
7.00%, 5/01/26 2,908 2,846,398
6.50%, 6/01/11 5,760 5,659,397
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ------------------------------------------------------------------------
Government National Mortgage Association
7.50%, 11/15/26 1,600 $ 1,603,488
8.00%, 8/15/26 1,338 1,368,360
Somerset Commercial Mortgage
7.209%, 2/15/07 (c) 1,250 1,246,875
Total Mortgage-Related Securities
(cost $15,517,423) 15,613,148
CORPORATE DEBT OBLIGATION-7.5%
BANKING-2.9%
First Tennessee Capital I
8.07%, 1/06/27 2,100 2,076,480
First Union Capital
7.935%, 1/15/27 1,850 1,825,913
------------
3,902,393
FINANCIAL-4.6%
Conseco Financing Trust II
8.70%, 11/15/26 1,650 1,690,045
Ford Motor Credit Co.
6.125%, 1/09/06 2,000 1,876,400
Goldman Sachs Group
7.80%, 7/15/02 (c) 2,500 2,588,975
------------
6,155,420
Total Corporate Debt Obligation
(cost $9,998,881) 10,057,813
YANKEE BONDS-4.3%
Empresa Nacional de Electricidad, S.A.
7.875%, 2/01/27 2,000 2,021,912
RAS Laffan Liquefied Natural Gas
8.294%, 3/15/14 (c) 1,250 1,285,938
Reliance Industries, Ltd.
10.375%, 6/24/16 (c) 2,300 2,508,725
Total Yankee Bonds
(cost $5,564,915) 5,816,575
SOVEREIGN DEBT OBLIGATIONS-4.1%
AUSTRALIA
Commonwealth of Australia
7.50%, 9/15/09 (g) AU$ 3,300 2,494,508
CROATIA
Republic of Croatia FRN
6.50%, 7/31/97 US$ 1,000 985,625
POLAND
Republic of Poland PDI FRN
3.75%, 10/27/14 2,400 2,019,000
Total Sovereign Debt Obligation
(cost $5,411,234) 5,499,133
COMMERCIAL PAPER-0.6%
Prudential Funding Corp.
5.41%, 2/03/97
(amortized cost $784,764) 785 784,764
TOTAL INVESTMENTS-101.3%
(cost $122,577,429) 136,573,484
Other assets less liabilities-(1.3%) (1,741,729)
NET ASSETS-100% $134,831,755
(a) Non-income producing security.
(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 January 31, 1997, the
aggregate market value of these securities amounted to $7,798,083 representing
5.8% of net assets.
(d) Country of origin--Russia.
(e) Country of origin--Finland.
(f) Country of origin--United Kingdom.
(g) Securities with an aggregate market value of $3,683,758, segregated to
collateralize forward exchange currency contracts.
Glossary of Terms:
ADR - American depository receipt
FRN - Floating rate note
PDI - Past due interest
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $122,577,429) $136,573,484
Receivable for investment securities sold 1,935,504
Dividends and interest receivable 669,734
Net unrealized appreciation of forward exchange currency contracts 29,194
Receivable for capital stock sold 19,355
Prepaid expenses 5,543
Total assets 139,232,814
LIABILITIES
Due to Custodian 40,270
Payable for investment securities purchased 3,875,834
Payable for capital stock redeemed 181,151
Advisory fee payable 70,714
Distribution fee payable 44,183
Accrued expenses 188,907
Total liabilities 4,401,059
NET ASSETS $134,831,755
COMPOSITION OF NET ASSETS
Capital stock, at par $ 95,612
Additional paid-in capital 118,363,159
Undistributed net investment income 454,121
Accumulated net realized gain on investments and foreign
currency transactions 1,894,817
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 14,024,046
$134,831,755
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($107,867,895/
7,619,556 shares of capital stock issued and outstanding) $14.16
Sales charge--4.25% of public offering price .63
Maximum offering price $14.79
CLASS B SHARES
Net asset value and offering price per share ($20,760,636/
1,495,671 shares of capital stock issued and outstanding) $13.88
CLASS C SHARES
Net asset value and offering price per share ($6,041,766/
434,594 shares of capital stock issued and outstanding) $13.90
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share($161,458
/11,405 shares of capital stock issued and outstanding) $14.16
See notes to financial statements.
9
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1997 (UNAUDITED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $1,964,335
Dividends (net of foreign taxes withheld of $1,042) 670,276 $ 2,634,611
EXPENSES
Advisory fee 417,196
Distribution fee - Class A 128,622
Distribution fee - Class B 99,179
Distribution fee - Class C 32,014
Transfer agency 105,723
Administrative 70,585
Custodian 57,909
Audit and Legal 41,136
Printing 29,512
Registration 25,608
Directors' fees 15,321
Taxes 3,307
Miscellaneous 6,147
Total expenses 1,032,259
Net investment income 1,602,352
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY
Net realized gain on investment transactions 1,782,720
Net realized gain on foreign currency transactions 67,729
Net change in unrealized depreciation on investments 15,477,858
Net change in unrealized appreciation on foreign
currency denominated assets and liabilities 25,708
Net gain on investments and foreign currency transactions 17,354,015
NET INCREASE IN NET ASSETS FROM OPERATIONS $18,956,367
See notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1997 JULY 31,
(UNAUDITED) 1996
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,602,352 $ 3,133,713
Net realized gain on investments and foreign
currency transactions 1,850,449 19,958,567
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities 15,503,566 (15,276,292)
Net increase in net assets from operations 18,956,367 7,815,988
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,135,130) (3,160,459)
Class B (159,991) (358,703)
Class C (52,933) (123,287)
Advisor Class (979) -0-
Net realized gain on investments
Class A (12,582,512) (11,691,852)
Class B (2,409,113) (1,628,196)
Class C (793,084) (577,846)
Advisor Class (19,832) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 5,972,816 (5,439,472)
Total increase (decrease) 7,775,609 (15,163,827)
NET ASSETS
Beginning of year 127,056,146 142,219,973
End of period (including undistributed net
investment income of $454,121 and $200,802,
respectively) $134,831,755 $127,056,146
See notes to financial statements.
11
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 (UNAUDITED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Balanced Shares (the "Fund") is registered under the Investment
Company Act of 1940, as a diversified, open end management investment company.
On April 15, 1996, the Board of Directors approved the creation of a fourth
class of share, Advisor Class shares. The Fund offers Class A, Class B, Class C
and Advisor Class shares. Class A shares are sold with a front-end sales charge
of up to 4.25% for purchases not exceeding $1,000,000. With respect to
purchases of $1,000,000 or more, Class A shares redeemed within one year of
purchase will be subject to a contingent deferred sales charge of 1%. Class B
shares are currently sold with a contingent deferred sales charge which
declines from 4% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares eight years after
the end of the calendar month of purchase. Class C shares 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. 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 solely to
investors participating in fee-based programs. 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 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 gain 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 investment
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 six months
ended January 31, 1997 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.
12
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
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 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 INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
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.
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.
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 six months ended January 31, 1997, such reimbursement amounted
to $70,585.
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 $79,869 for the six months ended January 31, 1997.
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 $2,202 from the sales of Class A shares and $520,
$22,770 and $367 in contingent deferred sales charges imposed upon redemptions
by shareholders of Class A, Class B and Class C, respectively, for the six
months ended January 31, 1997.
Brokerage commissions paid on securities transactions for the six months ended
January 31, 1997 amounted to $87,259, 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.
13
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. There is no distribution fee on the Advisor
Class 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 $1,368,228 and $412,338, 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 $82,280,697 and $81,116,797,
respectively, for the six months ended January 31, 1997. There were purchases
of $47,027,759 and sales of $52,378,508 of U.S. Government and government
agency obligations for the six months ended January 31, 1997.
At January 31, 1997, the cost of securities for federal income tax purposes was
$122,595,772. Accordingly gross unrealized appreciation of investments was
$18,028,566 and gross unrealized depreciation of investments was $4,050,854
resulting in net unrealized appreciation of $13,977,712 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.
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 assets 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 January 31, 1997, the Fund had an outstanding forward exchange currency
contract to sell foreign currency against the U.S. dollar, as follows:
CONTRACT VALUE ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
---------- ----------- ------------ ------------
FOREIGN CURRENCY SALE CONTRACT
Australian Dollar,
expiring 3/27/97 3,290 $2,538,029 $2,508,835 $29,194
14
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 120,000,000 shares of $.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 30,000,000 authorized shares. Transactions
in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JAN. 31, 1997 JULY 31, JAN. 31, 1997 JULY 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
Class A
Shares sold 113,391 448,058 $ 1,623,602 $ 6,746,741
Shares issued in
reinvestment of
dividends and
distributions 810,492 836,417 11,136,204 12,060,428
Shares converted
from Class B 17,882 6,918 262,041 99,012
Shares redeemed (641,098) (2,066,376) (9,318,108) (30,463,433)
Net increase (decrease) 300,667 (774,983) $ 3,703,739 $(11,557,252)
CLASS B
Shares sold 213,364 430,446 $ 3,031,771 $ 6,327,512
Shares issued in
reinvestment of
dividends and
distributions 155,851 113,453 2,101,524 1,612,145
Shares converted
to Class A (18,200) (6,961) (262,041) (99,012)
Shares redeemed (189,077) (216,587) (2,680,700) (3,180,587)
Net increase 161,938 320,351 $ 2,190,554 $ 4,660,058
CLASS C
Shares sold 65,327 157,902 $ 934,225 $ 2,334,144
Shares issued in
reinvestment of
dividends and
distributions 47,915 37,104 647,029 527,785
Shares redeemed (120,096) (96,534) (1,674,933) (1,404,207)
Net increase (decrease) (6,854) 98,472 $ (93,679) $ 1,457,722
OCT. 2, 1996* OCT. 2, 1996*
TO TO
JAN. 31, 1997 JAN. 31, 1997
(UNAUDITED) (UNAUDITED)
------------- --------------
ADVISOR CLASS
Shares sold 11,895 $ 178,903
Shares issued in
reinvestment of
dividends and
distributions 1,518 20,808
Shares redeemed (2,008) (27,509)
Net increase 11,405 $ 172,202
* Commencement of distribution.
15
FINANCIAL HIGHLIGHTS ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX MONTHS OCTOBER 1,
ENDED 1993
JANUARY 31, YEAR ENDED JULY 31, THROUGH YEAR ENDED SEPTEMBER 30,
1997 ------------------------ JULY 31, ------------------------
(UNAUDITED) 1996 1995 1994(a) 1993 1992
------------ ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.01 $15.08 $13.38 $14.40 $13.20 $12.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income .19(b) .37 .46 .29 .34 .44
Net realized and unrealized gain (loss)
on investments 1.92 .45 1.62 (.74) 1.29 .57
Net increase (decrease) in net asset
value from operations 2.11 .82 2.08 (.45) 1.63 1.01
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.16) (.41) (.36) (.28) (.43) (.45)
Distributions from net realized gains (1.80) (1.48) (.02) (.29) -0- -0-
Total dividends and distributions (1.96) (1.89) (.38) (.57) (.43) (.45)
Net asset value, end of period $14.16 $14.01 $15.08 $13.38 $14.40 $13.20
TOTAL RETURN
Total investment return based on net
asset value (c) 15.58% 5.23% 15.99% (3.21)% 12.52% 8.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $107,868 $102,567 $122,033 $157,637 $172,484 $143,883
Ratio of expenses to average net assets 1.39%(d) 1.38% 1.32% 1.27%(d) 1.35% 1.40%
Ratio of net investment income to
average net assets 2.55%(d) 2.41% 3.12% 2.50%(d) 2.50% 3.26%
Portfolio turnover rate 100% 227% 179% 116% 188% 204%
Average commission rate (e) $.0557 -- -- -- -- --
</TABLE>
See footnote summary on page 19.
16
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS OCTOBER 1,
ENDED 1993
JANUARY 31, YEAR ENDED JULY 31, THROUGH YEAR ENDED SEPTEMBER 30,
1997 ------------------------ JULY 31, ------------------------
(UNAUDITED) 1996 1995 1994(a) 1993 1992
------------ ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.79 $14.88 $13.23 $14.27 $13.13 $12.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income .13(b) .28 .30 .22 .29 .37
Net realized and unrealized gain (loss)
on investments 1.88 .42 1.65 (.75) 1.22 .54
Net increase (decrease) in net asset
value from operations 2.01 .70 1.95 (.53) 1.51 .91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.12) (.31) (.28) (.22) (.37) (.39)
Distribution from net realized gains (1.80) (1.48) (.02) (.29) -0- -0-
Total dividends and distributions (1.92) (1.79) (.30) (.51) (.37) (.39)
Net asset value, end of period $13.88 $13.79 $14.88 $13.23 $14.27 $13.13
TOTAL RETURN
Total investment return based on net
asset value (c) 15.06% 4.45% 15.07% (3.80)% 11.65% 7.32%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $20,761 $18,393 $15,080 $14,347 $12,789 $6,499
Ratio of expenses to average net assets 2.17%(d) 2.16% 2.11% 2.05%(d) 2.13% 2.16%
Ratio of net investment income to
average net assets 1.78%(d) 1.61% 2.30% 1.73%(d) 1.72% 2.46%
Portfolio turnover rate 100% 227% 179% 116% 188% 204%
Average commission rate (e) $.0557 -- -- -- -- --
</TABLE>
See footnote summary on page 19.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------
SIX MONTHS OCTOBER 1, MAY 3,
ENDED 1993 1993(f)
JANUARY 31, YEAR ENDED JULY 31, THROUGH TO
1997 ------------------------ JULY 31, SEPTEMBER 30,
(UNAUDITED) 1996 1995 1994(a) 1993
------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.81 $14.89 $13.24 $14.28 $13.63
INCOME FROM INVESTMENT OPERATIONS
Net investment income .13(b) .26 .30 .24 .11
Net realized and unrealized gain (loss)
on investments 1.88 .45 1.65 (.77) .71
Net increase (decrease) in net asset
value from operations 2.01 .71 1.95 (.53) .82
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.12) (.31) (.28) (.22) (.17)
Distributions from net realized gains (1.80) (1.48) (.02) (.29) -0-
Total dividends and distributions (1.92) (1.79) (.30) (.51) (.17)
Net asset value, end of period $13.90 $13.81 $14.89 $13.24 $14.28
TOTAL RETURN
Total investment return based on net
asset value (c) 15.03% 4.52% 15.06% (3.80)% 6.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $6,042 $6,096 $5,108 $6,254 $1,487
Ratios of expenses to average net assets 2.15%(d) 2.15% 2.09% 2.03%(d) 2.29%(d)
Ratios of net investment income to
average net assets 1.80%(d) 1.63% 2.32% 1.81%(d) 1.47%(d)
Portfolio turnover rate 100% 227% 179% 116% 188%
Average commission rate (e) $.0557 -- -- -- --
</TABLE>
See footnote summary on page 19.
18
ALLIANCE BALANCED SHARES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
------------------
OCTOBER 2, 1996(f)
TO
JANUARY 31, 1997
(UNAUDITED)
------------------
Net asset value, beginning of period $14.79
INCOME FROM INVESTMENT OPERATIONS
Net investment income .16(b)
Net realized and unrealized gain on investments 1.10
Net increase in net asset value from operations 1.26
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.09)
Distributions from net realized gains (1.80)
Total dividends and distributions (1.89)
Net asset value, end of period $14.16
TOTAL RETURN
Total investment return based on net asset value (c) 8.95%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $161
Ratio of expenses to average net assets 1.22%(d)
Ratio of net investment income to average net assets 3.28%(d)
Portfolio turnover rate 100%
Average commission rate (e) $.0557
(a) The Fund changed its fiscal year end from September 30 to July 31.
(b) Based on average shares outstanding.
(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 charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment returns calculated for periods of less than one year
are not annualized.
(d) Annualized.
(e) For fiscal year beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(f) Commencement of distribution.
19
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)
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.
20
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
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance 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
21
ALLIANCE BALANCED SHARES
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
BALSR
