ASSET ALLOCATION
================================================================================
[GRAPHIC OMITTED]
Alliance Balanced
Shares
Semi-Annual Report
January 31, 2000 (unaudited)
Alliance Capital [LOGO]
The Investment Professional's Choice
<PAGE>
Investment Products Offered
-------------------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
-------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS
================================================================================
LETTER TO SHAREHOLDERS
March 17, 2000
Dear Shareholder:
We are pleased to report to you on the performance, investment strategy, and
outlook for Alliance Balanced Shares (the "Fund") for the annual reporting
period ended January 31, 2000.
Investment Results
During the six- and 12-month periods ended January 31, 2000, the Fund returned
- -1.87% and 1.56%, respectively. The Fund's returns were below those of its
benchmark composite, a blend of 60% Standard & Poor's ("S&P") 500 Stock Index,
25% Lehman Brothers Government/Corporate Bond Index and 15% Salomon Brothers
1-Year Treasury Bond Index (the "Composite"). The Composite returned 3.71% over
the six-month period and 6.10% over the 12-month period. The Fund's
underperformance versus the Composite was largely the result of the Fund's
relative underweighting in technology issues and a bias toward low valuation in
its investments. As our stock selection discipline is a valuation-based
approach, it has led us to avoid those large-cap growth stocks that forecast
rapid growth rates accompanied by high price-to-earnings ratios. Thus, our
underweighting of such large growth stocks attributed to our lower relative
performance.
INVESTMENT RESULTS*
Periods Ended January 31, 2000
--------------------------
Total Returns
--------------------------
6 Months 12 Months
- ----------------------------------------------
Alliance Balanced
Shares
Class A -1.87% 1.56%
- ----------------------------------------------
Class B -2.26% 0.80%
- ----------------------------------------------
Class C -2.18% 0.87%
- ----------------------------------------------
S&P 500
Stock Index 5.58% 10.34%
- ----------------------------------------------
Lehman Brothers
Government/
Corporate
Bond Index 0.38% -2.87%
- ----------------------------------------------
Salomon Brothers
1-Year Treasury
Bond Index 1.76% 4.11%
- ----------------------------------------------
Composite 3.71% 6.10%
- ----------------------------------------------
* The Fund's investment results represent total returns and are based on the
net asset value as of January 31, 2000. All fees and expenses related to
the operation of the Fund have been deducted, but no adjustment has been
made for sales charges that may apply when shares are purchased or
redeemed. Returns for the Fund include the reinvestment of any
distributions paid during the period. Total returns for Advisor Class
shares will differ due to different expenses associated with that class.
Past performance is no guarantee of future results.
The S&P 500 Stock Index is an unmanaged index of 500 U.S. companies, and
is a common measure of the performance of the overall U.S. stock market.
The Lehman Brothers Government/ Corporate Bond Index is a broad measure of
the performance of intermediate (one- to 10-year) government and corporate
fixed-rate
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ALLIANCE BALANCED SHARES o 1
<PAGE>
LETTER TO SHAREHOLDERS
================================================================================
debt issues. The Salomon Brothers 1-Year Treasury Bond Index represents
performance of U.S. Treasury bills with one-year maturities. The Composite
represents a blended index, as indicated in the preceding text. All
comparative indices are unmanaged and reflect no fees or expenses. An
investor cannot invest directly in an index.
Additional investment results appear on pages 4-8.
Market Review
1999 was the second year in a row of extreme outperformance of richly valued
growth stocks to the detriment of value stocks, whose prices are lower relative
to their earnings and book values. While the S&P 500 Stock Index appreciated
21.0% for the year, the growth half of the market, as represented by the S&P 500
Barra Growth Index, increased 28.0%. Meanwhile, the value half of the market, as
represented by the S&P 500 Barra Value Index, increased only 12.7%. Within the
growth category, the only significant sector to lead the market was technology,
with the CS First Boston Technology Index rising 134.7% for the year and the
Pacific Stock Exchange High Technology Index up 116.4%. In addition, technology
accounted for two-thirds of the gain in the S&P 500 Stock Index.
These performance trends were exemplified within the indices in the second half
of 1999. Within a 7.7% gain in the S&P 500 Stock Index, the growth portion
appreciated 15.3% while the value portion was down 1.1%. Additionally, the CS
First Boston Technology Index rose 74.8% and the Pacific Stock Exchange High
Technology Index gained 62.0%. In our view, it is apparent that the major
explanatory variable in the performance of any portfolio was the degree of
weighting in the technology sector.
Investment Outlook
Looking forward, we suspect that the recent increase in market volatility will
continue in 2000 and we question the sustainability of technology stock
outperformance. We continue to maintain a well-diversified Fund and rely on our
in-house research staff to drive investment ideas on a stock-by-stock basis.
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2 o ALLIANCE BALANCED SHARES
<PAGE>
LETTER TO SHAREHOLDERS
================================================================================
[PHOTO OMITTED]
John D. Carifa
[PHOTO OMITTED]
Paul Rissman
Portfolio Manager, Paul Rissman, is a Senior Vice President with over 11 years
of investment experience.
Thank you for your continued interest in Alliance Balanced Shares. We look
forward to reporting to you on your Fund's investment results and portfolio
strategy in the coming periods.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Paul Rissman
Paul Rissman
Senior Vice President
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 3
<PAGE>
PERFORMANCE UPDATE
================================================================================
PERFORMANCE UPDATE
ALLIANCE BALANCED SHARES
GROWTH OF A $10,000 INVESTMENT
1/31/90 TO 1/31/00
[MOUNTAIN GRAPH OMITTED]
Composite: $40,451
Lipper Balanced Funds Average: $31,496
Alliance Balanced Shares Class A: $27,938
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Balanced Shares Class A shares (from 1/31/90 to 1/31/00) as compared to
the performance of an appropriate broad-based composite. The chart reflects the
deduction of the maximum 4.25% sales charge from the initial $10,000 investment
in the Fund and assumes the reinvestment of dividends and capital gains.
Performance for Class B, Class C and Advisor Class shares will vary from the
results shown above due to differences in expenses charged to these classes.
Past performance is not indicative of future results, and is not representative
of future gain or loss in capital value or dividend income.
The Fund's composite benchmark is comprised of 60% S&P 500 StockIndex, 25%
Lehman Brothers Government/Corporate Bond Index and 15% Salomon Brothers 1-Year
Treasury Index.
The unmanaged Standard & Poor's 500 Stock Index includes 500 U.S. stocks and is
a common measure of the performance of the overall U.S. stock market.
The unmanaged 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 Index represents performance of Treasury
bills with 1-year maturities. Of course, Treasury bills are guaranteed as to
principal and interest if held to maturity whereas the net asset value of the
Fund will fluctuate.
The Lipper Balanced Funds Average reflects performance of 62 funds (based on the
number of funds in the average from 1/31/90 to 1/31/00). These funds have
generally similar investment objectives to Alliance Balanced Shares, although
the investment policies of some funds included in the average may differ.
When comparing Alliance Balanced Shares to the composite and average shown
above, you should note that no charges or expenses are reflected in the
performance of the composite. Lipper results include fees and expenses. An
investor cannot invest directly in an index and its results are not indicative
of any specific investment, including Alliance Balanced Shares.
- --------------------------------------------------------------------------------
4 o ALLIANCE BALANCED SHARES
<PAGE>
PERFORMANCE UPDATE
================================================================================
PERFORMANCE UPDATE
ALLIANCE BALANCED SHARES - CLASS A SHARES
HISTORY OF RETURNS
YEARLY PERIODS ENDED JANUARY 31
[BAR CHART OMITTED]
Past performance is no guarantee of future results. The Fund's investment
results represent total returns and are based on the net asset value of Class
A shares. All fees and expenses related to the operation of the Fund have been
deducted, but no adjustment has been made for sales charges that may apply when
shares are purchased or redeemed. Returns for the Fund include the reinvestment
of any distributions paid during the period. Total returns for Class B, Class C
and Advisor Class shares will differ due to different expenses associated with
those classes. The S&P 500 Stock Index is an unmanaged index of 500 U.S.
companies, and is a common measure of the performance of the overall U.S. stock
market. The Lehman Brothers Government/Corporate Bond Index is a broad measure
of the performance of intermediate (one- to 10-year) government and corporate
fixed-rate debt issues. The Salomon Brothers 1-Year Treasury Bond Index
represents performance of U.S. Treasury bills with one-year maturities. The
Composite represents a blended index, 60% S&P 500, 25% Lehman Brothers
Government/Corporate Bond Index and 15% Salomon Brothers 1-Year Treasury Bond
Index. All comparative indices are unmanaged and reflect no fees or expenses.
An investor cannot invest directly in an index and its results are not
indicative of any specific investment, including Alliance Balanced Shares.
* Composite: 60% S&P 500 / 25% LB Govt/Corp Bond Index / 15% SB 1-Yr Treasury.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 5
<PAGE>
PORTFOLIO SUMMARY
================================================================================
PORTFOLIO SUMMARY
INCEPTION DATE
(Class A Shares)
6/8/32
PORTFOLIO STATISTICS
Assets ($mil):$408.2
Median Market Capitalization ($mil):$17,391.0
[PIE CHART OMITTED]
SECURITY TYPE BREAKDOWN
|_| 55.77% Common Stock
|_| 24.99% Treasury Securities
|_| 10.13% Corporate Bonds
|_| 6.88% Short-Term Investments
|_| 1.81% Yankee Bonds
|_| 0.24% Preferred Stock
|_| 0.18% Sovereign Debt
All data as of January 31, 2000. The security type breakdown is expressed as a
percentage of total investments and may vary over time.
- --------------------------------------------------------------------------------
6 o ALLIANCE BALANCED SHARES
<PAGE>
INVESTMENT OBJECTIVE & POLICIES
and INVESTMENT RESULTS
================================================================================
INVESTMENT OBJECTIVE & POLICIES
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
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF JANUARY 31, 2000
Class A Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
One Year 1.56% -2.78%
Five Years 15.40% 14.41%
Ten Years 11.30% 10.82%
Class B Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
One Year 0.80% -2.99%
Five Years 14.50% 14.50%
Since Inception*(a) 10.65% 10.65%
Class C Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
One Year 0.87% -0.08%
Five Years 14.54% 14.54%
Since Inception* 10.85% 10.85%
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 7
<PAGE>
INVESTMENT RESULTS
================================================================================
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END
(DECEMBER 31, 1999)
Class A Class B Class C
- --------------------------------------------------------------------------------
1 Year 0.45% 0.26% 3.18%
5 Years 15.41% 15.51% 15.55%
10 Years 10.31% 11.06%* 11.42%*
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Since Inception: 2/4/91, Class B; 5/3/93, Class C.
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
- --------------------------------------------------------------------------------
8 o ALLIANCE BALANCED SHARES
<PAGE>
TEN LARGEST HOLDINGS
================================================================================
TEN LARGEST HOLDINGS
January 31, 2000 (unaudited)
Percent Of
Company Value Net Assets
- --------------------------------------------------------------------------------
U.S. Treasury Notes $ 76,559,641 18.8%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 25,257,508 6.2
- --------------------------------------------------------------------------------
Tyco International, Ltd. 11,499,750 2.8
- --------------------------------------------------------------------------------
United Technologies Corp. 9,084,075 2.2
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. 9,061,125 2.2
- --------------------------------------------------------------------------------
Bank of America Corp. 8,718,486 2.1
- --------------------------------------------------------------------------------
Chase Manhattan Corp. 8,295,898 2.0
- --------------------------------------------------------------------------------
Kroger Co. 8,235,750 2.0
- --------------------------------------------------------------------------------
Citigroup, Inc. 8,062,904 2.0
- --------------------------------------------------------------------------------
Household International, Inc. 8,026,425 2.0
- --------------------------------------------------------------------------------
$172,801,562 42.3%
MAJOR PORTFOLIO CHANGES
Six Months Ended January 31, 2000 (unaudited)
--------------------------------------
Shares Or Principal
--------------------------------------
Purchases Bought Holdings 1/31/00
- --------------------------------------------------------------------------------
Abbott Laboratories 93,000 93,000
- --------------------------------------------------------------------------------
Associates First Capital Corp. Cl.A 188,000 222,800
- --------------------------------------------------------------------------------
Kroger Co. 341,000 474,000
- --------------------------------------------------------------------------------
Motorola, Inc. 41,000 41,000
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. 396,000 438,000
- --------------------------------------------------------------------------------
Tyco International, Ltd. 192,600 269,000
- --------------------------------------------------------------------------------
United Technologies Corp. 111,000 171,600
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 6.125%, 8/15/29 $3,660,000 $3,660,000
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 8.125%, 8/15/19 $2,930,000 $7,830,000
- --------------------------------------------------------------------------------
U.S. Treasury Note, 7.25%, 5/15/04 $4,300,000 $8,000,000
- --------------------------------------------------------------------------------
Sales Sold Holdings 1/31/00
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 33,000 66,200
- --------------------------------------------------------------------------------
Columbia HCA/Healthcare Corp. 96,800 -0-
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 31,680 -0-
- --------------------------------------------------------------------------------
Noble Drilling Corp. 96,000 190,700
- --------------------------------------------------------------------------------
Nokia Corp. (ADR) 17,000 21,000
- --------------------------------------------------------------------------------
Oracle Corp. 49,950 -0-
- --------------------------------------------------------------------------------
Philip Morris Cos., Inc. 90,000 69,500
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.25%, 11/15/28 $2,365,000 -0-
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.25%, 2/15/29 $3,010,000 $2,100,000
- --------------------------------------------------------------------------------
Wells Fargo & Co. 53,000 -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 9
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
PORTFOLIO OF INVESTMENTS
January 31, 2000 (unaudited)
Company Shares Value
- --------------------------------------------------------------------------------
Common Stocks & Other Investments-55.9%
Finance-11.3%
Banking - Money Center-3.8%
Chase Manhattan Corp. ........................ 91,400 $ 7,351,988
Citigroup, Inc. .............................. 140,377 8,062,904
-------------
15,414,892
-------------
Banking - Regional-2.4%
Bank of America Corp. ........................ 154,225 7,470,273
Bank One Corp. ............................... 73,100 2,179,294
-------------
9,649,567
-------------
Insurance-0.5%
PMI Group, Inc. .............................. 24,000 990,000
Travelers Property Casualty Corp. Cl.A ....... 34,800 1,261,500
-------------
2,251,500
-------------
Miscellaneous-4.6%
Associates First Capital Corp. Cl.A .......... 222,800 4,456,000
Household International, Inc. ................ 227,700 8,026,425
MBNA Corp. ................................... 197,187 4,978,972
The CIT Group, Inc. Cl.A ..................... 61,900 1,183,837
-------------
18,645,234
-------------
45,961,193
-------------
Technology-10.2%
Communication Equipment-2.3%
Motorola, Inc. ............................... 41,000 5,606,750
Nokia Corp. (ADR) (Finland) .................. 21,000 3,843,000
-------------
9,449,750
-------------
Computer Hardware-0.3%
Compaq Computer Corp. ........................ 40,300 1,103,213
-------------
Computer Services-3.4%
Computer Sciences Corp.(a) ................... 62,700 5,760,563
Electronic Data Systems Corp. ................ 42,000 2,840,250
First Data Corp. ............................. 112,100 5,499,906
-------------
14,100,719
-------------
Contract Manufacturing-2.2%
Sanmina Corp.(a) ............................. 49,600 5,271,550
Solectron Corp.(a) ........................... 53,600 3,892,700
-------------
9,164,250
-------------
Networking Software-0.4%
3Com Corp.(a) ................................ 30,000 1,521,562
-------------
Semi-Conductor Components-1.6%
Altera Corp.(a) .............................. 55,000 3,614,531
Atmel Corp.(a) ............................... 93,600 2,904,525
-------------
6,519,056
-------------
41,858,550
-------------
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10 o ALLIANCE BALANCED SHARES
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Company Shares Value
- --------------------------------------------------------------------------------
Consumer Staples-7.3%
Beverages-2.7%
Coca-Cola Enterprises, Inc. .................. 74,400 $ 1,878,600
Pepsi Bottling Group, Inc. ................... 438,000 9,061,125
-------------
10,939,725
-------------
Cosmetics-0.6%
Avon Products, Inc. .......................... 71,800 2,284,138
-------------
Food-1.4%
General Mills, Inc. .......................... 26,400 823,350
Heinz (H.J.) Co. ............................. 21,400 795,813
Nabisco Group Holding Corp. .................. 97,000 836,625
Tyson Foods, Inc. Cl.A ....................... 229,900 3,146,756
-------------
5,602,544
-------------
Household Products-0.3%
Viad Corp. ................................... 48,000 1,263,000
-------------
Retail - Food & Drug-2.0%
Kroger Co.(a) ................................ 474,000 8,235,750
-------------
Tobacco-0.3%
Philip Morris Cos., Inc. ..................... 69,500 1,455,156
-------------
29,780,313
-------------
Health Care-5.9%
Drugs-2.7%
Bristol-Myers Squibb Co. ..................... 66,200 4,369,200
Schering-Plough Corp. ........................ 93,000 4,092,000
Warner-Lambert Co. ........................... 26,800 2,544,325
-------------
11,005,525
-------------
Medical Products-0.7%
Abbott Laboratories .......................... 93,000 3,034,125
-------------
Medical Services-2.5%
Health Management Associates, Inc. Cl.A(a) ... 145,800 2,032,087
Pacificare Health Systems(a) ................. 25,300 1,069,716
Tenet Healthcare Corp.(a) .................... 305,000 6,938,750
-------------
10,040,553
-------------
24,080,203
-------------
Energy-5.3%
Domestic Integrated-2.3%
Kerr-McGee Corp. ............................. 53,900 2,984,713
USX-Marathon Group ........................... 246,200 6,324,262
-------------
9,308,975
-------------
Domestic Producers-0.2%
Murphy Oil Corp. ............................. 15,000 860,625
-------------
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 11
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Company Shares Value
- --------------------------------------------------------------------------------
International-1.1%
Total Fina, SA (ADR) (France) ................ 74,000 $ 4,606,500
-------------
Oil Service-1.4%
Noble Drilling Corp.(a) ...................... 190,700 5,589,894
-------------
Miscellaneous-0.3%
AES Corp.(a) ................................. 15,700 1,257,962
-------------
21,623,956
-------------
Consumer Services-4.5%
Airlines-0.7%
Continental Airlines, Inc. Cl.B(a) ........... 67,500 2,134,687
UAL Corp.(a) ................................. 12,000 685,500
-------------
2,820,187
-------------
Broadcasting & Cable-1.0%
A.H. Belo Corp. Series A ..................... 73,100 1,160,462
CSC Holdings, Inc. Pfd. ...................... 9,013 977,911
MediaOne Group, Inc.(a) ...................... 25,300 2,011,350
Optel, Inc. warrants, expiring 12/30/04(a)(b) 1,000 10
-------------
4,149,733
-------------
Entertainment & Leisure-1.2%
Carnival Corp. ............................... 52,700 2,374,794
Royal Caribbean Cruises, Ltd. ................ 48,000 2,373,000
-------------
4,747,794
-------------
Printing & Publishing-0.8%
American Banknote Corp. warrants,
expiring 12/01/02,(a)(b) ................... 1,000 1,000
Gannett Co., Inc. ............................ 47,200 3,280,400
-------------
3,281,400
-------------
Retail - General Merchandise-0.8%
Saks, Inc.(a) ................................ 243,600 3,379,950
-------------
18,379,064
-------------
Multi-Industry Companies-3.7%
Honeywell International, Inc.(a) ............. 51,750 2,484,000
Tyco International, Ltd. ..................... 269,000 11,499,750
U.S. Industries, Inc. ........................ 72,300 935,381
-------------
14,919,131
-------------
Utilities-2.9%
Electric & Gas Utility-1.7%
CMS Energy Corp. ............................. 47,300 1,419,000
Consolidated Edison, Inc. .................... 52,200 1,706,288
FPL Group, Inc. .............................. 23,900 1,008,281
GPU, Inc. .................................... 47,000 1,363,000
Pinnacle West Capital Corp. .................. 50,000 1,543,750
-------------
7,040,319
-------------
- --------------------------------------------------------------------------------
12 o ALLIANCE BALANCED SHARES
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Shares or
Principal
Amount
Company (000) Value
- --------------------------------------------------------------------------------
Telephone Utility-1.2%
AT&T Corp. ................................... 59,845 $ 3,156,824
MCI WorldCom, Inc.(a) ........................ 37,125 1,704,269
-------------
4,861,093
-------------
Miscellaneous-0.0%
Viatel, Inc.(a) .............................. 4,090 150,947
-------------
12,052,359
-------------
Capital Goods-2.2%
Miscellaneous-2.2%
United Technologies Corp. .................... 171,600 9,084,075
-------------
Basic Industry-1.6%
Chemicals-1.6%
Dow Chemical Co. ............................. 11,000 1,281,500
Eastman Chemical Co. ......................... 22,400 893,200
Lyondell Chemical Co. ........................ 242,000 2,616,625
Solutia, Inc. ................................ 117,000 1,608,750
-------------
6,400,075
-------------
Transportation-0.6%
Railroad-0.6%
Burlington Northern Santa Fe Corp. ........... 106,000 2,550,625
-------------
Consumer Manufacturing-0.4%
Building & Related-0.4%
Masco Corp. .................................. 78,000 1,555,125
-------------
Total Common Stocks & Other Investments
(cost $207,320,775) ........................ 228,244,669
-------------
Debt Obligations-37.0%
U.S. Government Obligations-24.9%
U.S. Treasury Bonds
5.25%, 2/15/29 ............................. $ 2,100 1,749,237
6.125%, 11/15/27 ........................... 6,765 6,366,474
6.125%, 8/15/29 ............................ 3,660 3,483,844
6.25%, 8/15/23 ............................. 3,500 3,340,295
8.125%, 8/15/19 ............................ 7,830 9,017,968
9.875%, 11/15/15 ........................... 1,000 1,299,690
U.S. Treasury Notes
4.75%, 11/15/08 ............................ 2,000 1,740,000
5.50%, 5/15/09 ............................. 2,000 1,833,440
5.625%, 2/28/01 ............................ 1,250 1,239,650
5.625%, 5/15/08 ............................ 200 186,062
6.00%, 8/15/09 ............................. 1,350 1,286,712
6.25%, 4/30/01 ............................. 17,000 16,944,240
6.375%, 3/31/01 ............................ 3,000 2,995,320
6.50%, 8/31/01 ............................. 18,700 18,670,828
6.50%, 5/31/02 ............................. 12,060 12,014,775
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 13
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Principal
Amount
Company (000) Value
- --------------------------------------------------------------------------------
6.50%, 8/15/05 ............................. $ 1,000 $ 988,280
6.625%, 5/15/07 ............................ 25 24,809
6.875%, 5/15/06 ............................ 8,825 8,874,596
7.00%, 7/15/06 ............................. 575 581,739
7.25%, 5/15/04 ............................. 8,000 8,148,720
7.50%, 2/15/05 ............................. 1,000 1,030,470
-------------
101,817,149
-------------
Corporate Debt Obligations-10.3%
Air Transportation-0.2%
Delta Air Lines, Inc. 8.30%, 12/15/29(b) ..... 800 766,549
-------------
Automotive-0.3%
Federal Mogul Corp. 7.75%, 7/01/06 ........... 1,500 1,366,276
-------------
Banking-1.1%
Bank of America Corp. 8.07%, 12/31/26(b) ..... 1,300 1,248,213
Bank United Corp. 8.875%, 5/01/07 ............ 1,350 1,236,377
Chase Manhattan Corp. 7.00%, 11/15/09 ........ 1,000 943,910
Citicorp 6.375%, 11/15/08 .................... 500 457,313
Providian National Bank 6.65%, 2/01/04 ....... 500 469,310
-------------
4,355,123
-------------
Broadcasting/Media-0.2%
Westinghouse Electric Corp. 8.625%, 8/01/12 .. 1,000 1,032,672
-------------
Cable-0.3%
CSC Holdings, Inc. 7.875%, 12/15/07 ......... 1,100 1,086,250
-------------
Chemicals-0.7%
ICI North America, Inc. 8.875%, 11/15/06 ..... 850 881,461
Lyondell Chemical Co. 9.875%, 5/01/07 ........ 1,350 1,341,563
Rohm & Haas Co. 7.40%, 7/15/09 ............... 850 834,286
-------------
3,057,310
-------------
Communications-1.1%
MCI WorldCom, Inc. 6.95%, 8/15/28 ............ 1,350 1,201,782
News America Holdings, Inc. 9.50%, 7/15/24 ... 1,250 1,386,144
Nextel Communications, Inc. 9.375%,
11/15/09(b) ................................ 400 386,500
Qwest Communications International, Inc. 7.25%,
11/01/08(b) ................................ 1,465 1,393,581
-------------
4,368,007
-------------
Conglomerate/Miscellaneous-0.3%
First Union Capital II 7.95%, 11/15/29 ....... 1,350 1,302,749
-------------
Energy-0.4%
Conoco, Inc. 5.90%, 4/15/04 .................. 850 802,003
Union Pacific Resources Group, Inc. 7.30%,
4/15/09 .................................... 850 811,447
-------------
1,613,450
-------------
- --------------------------------------------------------------------------------
14 o ALLIANCE BALANCED SHARES
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Principal
Amount
Company (000) Value
- --------------------------------------------------------------------------------
Financial-0.6%
Goldman Sachs Group, Inc. 6.65%, 5/15/09 ..... $ 800 $ 732,997
Household Finance Corp. 6.50%, 11/15/08 ...... 1,000 911,096
Merrill Lynch & Co., Inc. 6.00%, 2/17/09 ..... 1,000 881,910
-------------
2,526,003
-------------
Industrial-0.7%
Delphi Automotive Systems Corp. 7.125%,
5/01/29 .................................... 900 792,982
Nuevo Grupo Iusacell SA de CV 14.25%,
12/01/06 ................................... 850 894,625
Yosemite Security Trust I 8.25%, 11/15/04(b) . 1,300 1,279,104
-------------
2,966,711
-------------
Insurance-1.0%
Arkwright CSN Trust 9.625%, 8/15/26(b) ....... 1,000 1,007,508
Frank Russell & Co. 5.625%, 1/15/09(b) ....... 1,000 860,771
Prudential Insurance Co. 8.30%, 7/01/25(b) ... 2,000 2,050,004
-------------
3,918,283
-------------
Non-Air Transportation-0.8%
Burlington Northern Santa Fe Corp. 6.75%,
3/15/29 .................................... 850 731,014
ERAC USA Finance Co. 6.625%, 5/15/06(b) ...... 900 835,659
Stagecoach Holdings PLC 8.625%, 11/15/09 ..... 850 848,864
Union Pacific Corp. 6.625%, 2/01/08 ......... 1,100 1,014,748
-------------
3,430,285
-------------
Paper/Packaging-0.4%
Kappa Beheer BV 10.625%, 7/15/09
(Netherlands)(b)(c) ........................ 400 410,896
Temple-Inland, Inc. 6.75%, 3/01/09 ........... 1,250 1,132,702
-------------
1,543,598
-------------
Petroleum Products-0.3%
Apache Finance PTY, Ltd. 6.50%, 12/15/07 ..... 1,250 1,141,997
-------------
Publishing-0.3%
Knight Ridder, Inc. 6.875%, 3/15/29 ......... 1,250 1,083,814
-------------
Public Utilities - Electric & Gas-0.9%
AES Corp. 9.50%, 6/01/09 ..................... 850 843,625
Arizona Public Service Co. 5.875%, 2/15/04 ... 1,250 1,165,463
Niagara Mohawk Power Co. 7.75%, 10/01/08 ..... 1,000 987,974
PSEG Energy Holdings, Inc. 10.00%,
10/01/09(b) ................................ 850 857,953
-------------
3,855,015
-------------
Retail-0.4%
K Mart Funding Corp. 9.44%, 7/01/18 ......... 850 790,897
Kohl's Corp. 7.25%, 6/01/29(b) ............... 850 768,324
-------------
1,559,221
-------------
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 15
<PAGE>
PORTFOLIO OF INVESTMENTS
================================================================================
Principal
Amount
Company (000) Value
- --------------------------------------------------------------------------------
Sovereign-0.2%
Federal Republic of Brazil 12.75%, 1/15/20 ... $ 750 $ 714,187
-------------
Technology-0.1%
Exodus Communications, Inc. 10.75%,
12/15/09(b) ................................ 300 308,250
-------------
41,995,750
-------------
Yankee Bonds-1.8%
Abbey National PLC 6.70%, 6/13/08 ............ 1,440 1,299,498
Corporacion Andina De Fomento 7.75%,
3/01/04 .................................... 400 396,538
Deutsche Capital Bank 7.872%, 12/29/49(b) .... 900 871,803
Empresa Electrica Del Norte, SA 7.75%,
3/15/06(b) ................................. 1,685 674,000
Metronet Communications Corp. 1.00%,
6/15/08 .................................... 850 671,500
Philippine Long Distance Telephone Co. 10.50%,
4/15/09 .................................... 850 866,242
Province of Quebec 7.00%, 1/30/07 ............ 1,000 963,680
7.50%, 9/15/29 ............................. 400 384,776
Telewest Communications PLC 1.00%,
10/01/07 ................................... 850 802,187
TPSA Finance BV 7.75%, 12/10/08(b) ........... 500 469,049
-------------
7,399,273
-------------
Total Debt Obligations
(cost $160,773,109) ........................ 151,212,172
-------------
Short-Term Investment-6.9%
Time Deposit-6.9%
State Street Euro Dollar
5.00%, 2/01/00
(amortized cost $28,053,000) ............... 28,053 28,053,000
-------------
Total Investments-99.8%
(cost $396,146,884) ........................ 407,509,841
Other assets less liabilities-0.2% ........... 687,128
-------------
Net Assets-100% .............................. $ 408,196,969
=============
(a) Non-income producing security.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to certain qualified buyers. At January 31, 2000,
the aggregate market value of these securities amounted to $14,189,174
representing 3.5% of net assets.
(c) Securities, or portion thereof, with an aggregate market value of $410,896
have been segregated to collateralize forward exchange currency contracts.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
- --------------------------------------------------------------------------------
16 o ALLIANCE BALANCED SHARES
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
STATEMENT OF ASSETS & LIABILITIES
January 31, 2000 (unaudited)
<TABLE>
<S> <C>
Assets
Investments in securities, at value (cost $396,146,884) ........................ $ 407,509,841
Cash, at value (cost $21,529) .................................................. 20,149
Dividends and interest receivable .............................................. 3,135,133
Receivable for investment securities sold ...................................... 2,490,307
Receivable for capital stock sold .............................................. 901,069
Unrealized appreciation of forward exchange
currency contracts ........................................................... 13,488
---------------
Total assets ................................................................... 414,069,987
---------------
Liabilities
Payable for investment securities purchased .................................... 4,808,474
Payable for capital stock redeemed ............................................. 320,527
Distribution fee payable ....................................................... 221,303
Advisory fee payable ........................................................... 196,101
Unclaimed dividends ............................................................ 90,989
Accrued expenses ............................................................... 235,624
---------------
Total liabilities .............................................................. 5,873,018
---------------
Net Assets ..................................................................... $ 408,196,969
===============
Composition Of Net Assets
Capital stock, at par .......................................................... $ 286,722
Additional paid-in capital ..................................................... 390,617,681
Undistributed net investment income ............................................ 193,606
Accumulated net realized gain on investments and
foreign currency transactions ................................................ 5,730,757
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities .......................... 11,368,203
---------------
$ 408,196,969
===============
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($195,150,349 / 13,459,159 shares of capital stock
issued and outstanding) ...................................................... $14.50
Sales charge--4.25% of public offering price ................................... .64
------
Maximum offering price ......................................................... $15.14
======
Class B Shares
Net asset value and offering price per share
($145,003,181 / 10,369,791 shares of capital stock
issued and outstanding) ...................................................... $13.98
======
Class C Shares
Net asset value and offering price per share
($65,343,708 / 4,657,128 shares of capital stock
issued and outstanding) ...................................................... $14.03
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($2,699,731 / 186,121 shares of capital stock
issued and outstanding) ...................................................... $14.51
======
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 17
<PAGE>
STATEMENT OF OPERATIONS
================================================================================
STATEMENT OF OPERATIONS
Six Months Ended January 31, 2000 (unaudited)
Investment Income
Interest .................................. $ 5,970,486
Dividends (net of foreign taxes
withheld of $800) ....................... 1,465,222 $ 7,435,708
------------
Expenses
Advisory fee .............................. 1,143,435
Distribution fee - Class A ................ 253,783
Distribution fee - Class B ................ 720,833
Distribution fee - Class C ................ 328,154
Transfer agency ........................... 334,433
Custodian ................................. 64,753
Administrative ............................ 65,000
Printing .................................. 45,035
Registration .............................. 42,634
Audit and legal ........................... 38,164
Directors' fees ........................... 8,076
Miscellaneous ............................. 8,903
------------
Total expenses ............................ 3,053,203
Less: expense offset arrangement
(see Note B) ............................ (18,424)
------------
Net expenses .............................. 3,034,779
------------
Net investment income ..................... 4,400,929
------------
Realized And Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions
Net realized gain on investment
transactions ............................ 6,643,752
Net realized gain on foreign currency
transactions ............................ 21,979
Net change in unrealized
appreciation/depreciation of:
Investments ............................. (18,860,005)
Foreign currency denominated assets
and liabilities ....................... 19,690
------------
Net loss on investments and foreign
currency transactions ................... (12,174,584)
------------
Net Decrease In Net Assets
From Operations ......................... $ (7,773,655)
============
See notes to financial statements.
- --------------------------------------------------------------------------------
18 o ALLIANCE BALANCED SHARES
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
STATEMENT OF CHANGES
IN NET ASSETS
Six Months Ended Year Ended
January 31, 2000 July 31,
(unaudited) 1999
------------- -------------
Increase (Decrease) In Net Assets
from Operations
Net investment income ...................... $ 4,400,929 $ 5,706,156
Net realized gain on investments and
foreign currency transactions ............ 6,665,731 19,573,989
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities ....... (18,840,315) 5,014,569
------------- -------------
Net increase (decrease) in net assets
from operations .......................... (7,773,655) 30,294,714
Dividends and Distributions to
Shareholders from:
Net investment income
Class A .................................. (2,435,385) (3,352,299)
Class B .................................. (1,400,906) (1,515,215)
Class C .................................. (634,392) (803,428)
Advisor Class ............................ (35,605) (55,237)
Net realized gain on investments
Class A .................................. (8,408,044) (12,911,989)
Class B .................................. (6,361,863) (6,058,584)
Class C .................................. (2,911,398) (1,928,529)
Advisor Class ............................ (109,815) (212,403)
Capital Stock Transactions
Net increase ............................... 45,787,203 204,737,959
------------- -------------
Total increase ............................. 15,716,140 208,194,989
Net Assets
Beginning of year .......................... 392,480,829 184,285,840
------------- -------------
End of period (including undistributed
net investment income of $193,606 and
$298,965, respectively) .................. $ 408,196,969 $ 392,480,829
============= =============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTES TO FINANCIAL STATEMENTS
January 31, 2000 (unaudited)
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. The Fund
offers Class A, Class B, Class C and Advisor Class shares. Class A shares are
sold with a front-end sales charge of up to 4.25% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase may be subject to a contingent deferred
sales charge of 1%. Class B shares are currently sold with a contingent deferred
sales charge which declines from 4% to zero depending on the period of time the
shares are held. Class B shares will automatically convert to Class A shares
eight years after the end of the calendar month of purchase. Class C shares are
subject to a contingent deferred sales charge of 1% on redemptions made within
the first year after purchase. Advisor Class shares are sold without an initial
or contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered to investors participating in
fee-based programs and to certain retirement plan accounts. All four classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on the
Nasdaq Stock Market, Inc. are generally valued at the last reported sale price
or if no sale occurred, at the mean of the closing bid and asked prices on that
day. Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to the U.S. over-the-counter market, and securities listed on a national
securities exchange whose primary market is believed to be over-the-counter (but
excluding securities traded on The Nasdaq Stock Market, Inc.), are valued at the
mean of the current bid and asked prices. Fixed income securities which mature
in 60 days or less are valued at amortized cost, unless this method does not
represent fair value. Securities for which current market quotations are not
readily available are valued at their fair value as determined in good faith by,
or in accordance with procedures adopted by, the Board of Directors. Fixed
income securities may be valued on the basis of prices obtained from a pricing
service when such prices are believed to reflect the fair market value of such
securities.
- --------------------------------------------------------------------------------
20 o ALLIANCE BALANCED SHARES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked price of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at rates of exchange
prevailing when accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, and foreign exchange
currency contracts and currency gains and losses realized between the trade and
settlement dates on security transactions, and the difference between the
amounts of foreign currency denominated dividends and interest recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
The Fund does not isolate the effect of fluctuations in foreign currency
exchange rates when determining the gain or loss upon the sale of equity
securities. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at year end exchange rates are reflected as a
component of net unrealized appreciation of investments and foreign currency de
nominated assets and liabilities.
3. 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.
4. 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 trade date securities
are purchased or sold. The Fund accretes discounts and amortizes premiums as
adjustments to interest income. Investment gains and losses are determined on
the identified cost basis.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees than
Class A shares and the Advisor Class shares have no distribution fees.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with generally accepted accounting principles. To the extent these
differences are permanent, such amounts are reclassified within the capital
accounts based on their federal tax basis treatment; temporary differences, do
not require such reclassification.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE B
Advisory Fee and Other Transactions With Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser"), an advisory fee at an annual rate of
.625 of 1% of the first $200 million, .50 of 1% of the next $200 million and .45
of 1% 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 paid $65,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended January 31, 2000.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $243,515 for the six months ended January 31, 2000.
For the six months ended January 31, 2000, the Fund's expenses were reduced by
$18,424 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $17,144
from the sales of Class A shares and $179, $144,557 and $9,242 in contingent
deferred sales charges imposed upon redemptions by shareholders of Class A,
Class B and Class C shares, respectively, for the six months ended January 31,
2000.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 2000, amounted to $202,256, 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 and of which $11,197 was
paid to DLJ directly.
Accrued expenses includes $23,951 owed to a Director and a former Director under
the Director's deferred compensation plan.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30 of 1% 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 and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities. The
Distributor has advised the Fund that it has incurred expenses in excess of the
distribution costs reim-
- --------------------------------------------------------------------------------
22 o ALLIANCE BALANCED SHARES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
bursed by the Fund in the amount of $6,396,254 and $894,152, for Class B and
Class C shares, respectively; such costs may be recovered from the Fund in
future periods as long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution costs
incurred by the Distributor beyond the current fiscal year for Class A shares.
The Agreement also provides that the Adviser may use its own resources to
finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $93,384,928 and $64,830,542,
respectively, for the six months ended January 31, 2000. There were purchases of
$35,132,665 and sales of $17,610,935 of U.S. government and government agency
obligations for the six months ended January 31, 2000.
At January 31, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes. Gross
unrealized appreciation of investments was $48,245,926 and gross unrealized
depreciation of investments was $36,882,969 resulting in net unrealized
appreciation of $11,362,957 excluding foreign currency transactions.
In connection with the acquisition of Alliance Income Builder Fund (see Note F),
the Fund acquired a capital loss carryforward of $233,465. The Fund utilized
$52,106 of that capital loss carryforward during the year ended July 31, 1999.
At July 31, 1999 the Fund had a remaining capital loss carryforward of $181,359
expiring July 31, 2006 which may be used to offset future gains subject to
certain limitations.
1. 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 foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A forward 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 gain or
loss 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 other 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 unantici-
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
pated 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, 2000, the Fund had an outstanding forward exchange currency
contract, to sell foreign currency against the U.S. dollar, as follows:
US $
Contract Value on US $
Amount Origination Current Unrealized
(000) Date Value Appreciation
----- ---- ----- ------------
Forward Exchange
Currency Sale
Contract
Euro,
settling 3/15/00 400 $405,140 $391,652 $13,488
2. Option Transactions
For hedging and investment 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 received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium received is added to the proceeds from the sale of the
underlying security or currency in determining whether the Fund has realized a
gain or loss. If a put option is exercised, the premium received reduces the
cost basis of the security or currency purchased by the Fund. The risk involved
in writing an option is that, if the option was exercised the underlying
security could then be purchased or sold by the Fund at a disadvantageous price.
For the six months ended January 31, 2000, the Fund did not engage in any option
transactions.
- --------------------------------------------------------------------------------
24 o ALLIANCE BALANCED SHARES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE E
Capital Stock
There are 12,000,000,000 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 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Shares Amount
---------------------------- -------------------------------
Six Months Ended Six Months Ended
January 31, Year Ended January 31, Year Ended
2000 July 31, 2000 July 31,
(unaudited) 1999 (unaudited) 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 1,950,996 2,825,403 $ 29,152,213 $ 43,311,421
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Income
Builder Fund -0- 200,888 -0- 2,918,932
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Strategic
Balanced Fund -0- 1,915,535 -0- 29,102,502
- -----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 651,913 894,028 9,428,707 13,148,824
- -----------------------------------------------------------------------------------
Shares converted
from Class B 120,056 198,695 2,278,521 3,063,821
- -----------------------------------------------------------------------------------
Shares redeemed (1,419,499) (1,618,986) (21,376,869) (24,811,731)
- -----------------------------------------------------------------------------------
Net increase 1,303,466 4,415,563 $ 19,482,572 $ 66,733,769
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
Shares Amount
---------------------------- -------------------------------
Six Months Ended Six Months Ended
January 31, Year Ended January 31, Year Ended
2000 July 31, 2000 July 31,
(unaudited) 1999 (unaudited) 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B
Shares sold 2,364,857 4,838,812 $ 34,577,616 $ 71,823,741
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Income
Builder Fund -0- 654,701 -0- 9,211,701
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Strategic
Balanced Fund -0- 1,560,740 -0- 22,957,076
- -----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 519,622 434,625 7,250,631 6,202,323
- -----------------------------------------------------------------------------------
Shares converted
to Class A (156,467) (205,216) (2,278,521) (3,063,821)
- -----------------------------------------------------------------------------------
Shares redeemed (1,385,211) (1,327,350) (20,100,623) (19,586,581)
- -----------------------------------------------------------------------------------
Net increase 1,342,801 5,956,312 $ 19,449,103 $ 87,544,439
===================================================================================
Class C
Shares sold 975,385 1,253,402 $ 14,187,864 $ 18,314,705
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Income
Builder Fund -0- 2,591,244 -0- 36,542,673
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Strategic
Balanced Fund -0- 322,665 -0- 4,758,655
- -----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 225,523 146,312 3,157,624 2,101,413
- -----------------------------------------------------------------------------------
Shares redeemed (736,425) (818,076) (10,761,078) (11,825,765)
- -----------------------------------------------------------------------------------
Net increase 464,483 3,495,547 $ 6,584,410 $ 49,891,681
===================================================================================
</TABLE>
- --------------------------------------------------------------------------------
26 o ALLIANCE BALANCED SHARES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
Shares Amount
---------------------------- -------------------------------
Six Months Ended Six Months Ended
January 31, Year Ended January 31, Year Ended
2000 July 31, 2000 July 31,
(unaudited) 1999 (unaudited) 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Advisor Class
Shares sold 38,232 42,519 $ 582,494 $ 650,647
- -----------------------------------------------------------------------------------
Shares issued in
connection with
acquisition of
Alliance Income
Builder Fund -0- 5,223 -0- 75,890
- -----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 10,004 18,020 144,906 264,964
- -----------------------------------------------------------------------------------
Shares redeemed (30,118) (27,910) (456,282) (423,431)
- -----------------------------------------------------------------------------------
Net increase 18,118 37,852 $ 271,118 $ 568,070
===================================================================================
</TABLE>
NOTE F
Acquisition of Alliance Income Builder Fund
On November 13, 1998 the Fund acquired all of the net assets of Alliance Income
Builder Fund pursuant to a plan of reorganization approved by Alliance Income
Builder Fund shareholders on November 2, 1998. The acquisition was accomplished
by a tax-free exchange of 3,452,056 shares of the Fund for 4,944,621 shares of
Alliance Income Builder Fund on November 13, 1998. The aggregate net assets of
the Fund and Alliance Income Builder Fund immediately before the acquisition
were $191,606,941 and $48,749,196, respectively (including unrealized
appreciation in Alliance Income Builder Fund of $1,438,262). Immediately after
the acquisition the combined net assets of the Fund amounted to $240,356,137.
NOTE G
Acquisition of Alliance Strategic Balanced Fund
On February 1, 1999 the Fund acquired all of the net assets of Alliance
Strategic Balanced Fund pursuant to a plan of reorganization approved by
Alliance Strategic Balanced Fund shareholders on December 18, 1998. The
acquisition was accomplished by a tax-free exchange of 3,798,940 shares of the
Fund for 3,232,951 shares of Alliance Strategic Balanced Fund on February 1,
1999. The aggregate net assets of the Fund and Alliance Strategic Balanced Fund
immediately before the acquisition were $281,968,797 and $56,818,233,
respectively (including unrealized appreciation in Alliance Strategic Balanced
Fund of $8,492,533). Immediately after the acquisition the combined net assets
of the Fund amounted to $338,787,033.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE H
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
the miscellaneous expenses in the statement of operations. The Fund did not
utilize the Facility during the six months ended January 31, 2000.
- --------------------------------------------------------------------------------
28 o ALLIANCE BALANCED SHARES
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------------
Six
Months
Ended
January 31, Year Ended July 31,
2000 -----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............. $ 15.63 $ 15.97 $ 16.17 $ 14.01 $ 15.08 $ 13.38
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........... .19 (a) .36 (a) .33 (a) .31(a) .37 .46
Net realized and unrealized
gain (loss) on investment
transactions .................. (.49) 1.29 1.86 3.97 .45 1.62
----------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations .................... (.30) 1.65 2.19 4.28 .82 2.08
----------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............. (.19) (.34) (.32) (.32) (.41) (.36)
Distributions from net
realized gains ................ (.64) (1.65) (2.07) (1.80) (1.48) (.02)
----------------------------------------------------------------------------------
Total dividends and
distributions ................. (.83) (1.99) (2.39) (2.12) (1.89) (.38)
----------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 14.50 $ 15.63 $ 15.97 $ 16.17 $ 14.01 $ 15.08
==================================================================================
Total Return
Total investment return
based on net asset value(b) ... (1.87)% 11.44% 14.99% 33.46% 5.23% 15.99%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............... $ 195,150 $ 189,953 $ 123,623 $ 115,500 $ 102,567 $ 122,033
Ratio of expenses to
average net assets ............ 1.12%(c)(d) 1.22%(c) 1.30%(c) 1.47%(c) 1.38% 1.32 %
Ratio of net investment
income to average
net assets .................... 2.54%(d) 2.31% 2.07% 2.11% 2.41% 3.12%
Portfolio turnover rate ......... 22% 105% 145% 207% 227% 179%
</TABLE>
See footnote summary on page 32.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 29
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------------------
Six
Months
Ended
January 31, Year Ended July 31,
2000 -----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............. $ 15.11 $ 15.54 $ 15.83 $ 13.79 $ 14.88 $ 13.23
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........... .13(a) .23(a) .21(a) .19(a) .28 .30
Net realized and unrealized
gain (loss) on investment
transactions .................. (.48) 1.25 1.81 3.89 .42 1.65
----------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations .................... (.35) 1.48 2.02 4.08 .70 1.95
----------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............. (.14) (.26) (.24) (.24) (.31) (.28)
Distributions from net
realized gains ................ (.64) (1.65) (2.07) (1.80) (1.48) (.02)
----------------------------------------------------------------------------------
Total dividends and
distributions ................. (.78) (1.91) (2.31) (2.04) (1.79) (.30)
----------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 13.98 $ 15.11 $ 15.54 $ 15.83 $ 13.79 $ 14.88
==================================================================================
Total Return
Total investment return
based on net asset value(b) ... (2.26)% 10.56% 14.13% 32.34% 4.45% 15.07%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............... $ 145,003 $ 136,384 $ 47,728 $ 24,192 $ 18,393 $ 15,080
Ratio of expenses to
average net assets ............ 1.86%(c)(d) 1.97%(c) 2.06%(c) 2.25%(c) 2.16% 2.11%
Ratio of net investment
income to average
net assets .................... 1.80%(d) 1.56% 1.34% 1.32% 1.61% 2.30%
Portfolio turnover rate ......... 22% 105% 145% 207% 227% 179%
</TABLE>
See footnote summary on page 32.
- --------------------------------------------------------------------------------
30 o ALLIANCE BALANCED SHARES
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------------------
Six
Months
Ended
January 31, Year Ended July 31,
2000 -----------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ............. $ 15.15 $ 15.57 $ 15.86 $ 13.81 $ 14.89 $ 13.24
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........... .13(a) .24(a) .21(a) .20(a) .26 .30
Net realized and unrealized
gain (loss) on investment
transactions .................. (.47) 1.25 1.81 3.89 .45 1.65
----------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations .................... (.34) 1.49 2.02 4.09 .71 1.95
----------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............. (.14) (.26) (.24) (.24) (.31) (.28)
Distributions from net
realized gains ................ (.64) (1.65) (2.07) (1.80) (1.48) (.02)
----------------------------------------------------------------------------------
Total dividends and
distributions ................. (.78) (1.91) (2.31) (2.04) (1.79) (.30)
----------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 14.03 $ 15.15 $ 15.57 $ 15.86 $ 13.81 $ 14.89
==================================================================================
Total Return
Total investment return
based on net asset value(b) ... (2.18)% 10.60% 14.09% 32.37% 4.52% 15.06%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............... $ 65,344 $ 63,517 $ 10,855 $ 5,510 $ 6,096 $ 5,108
Ratio of expenses to
average net assets ............ 1.86%(c)(d) 1.96%(c) 2.05%(c) 2.23%(c) 2.15% 2.09%
Ratio of net investment
income to average
net assets .................... 1.80%(d) 1.57% 1.36% 1.37% 1.63% 2.32%
Portfolio turnover rate ......... 22% 105% 145% 207% 227% 179%
</TABLE>
See footnote summary on page 32.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 31
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
ADVISOR CLASS
-----------------------------------------------------
Six
Months Oct. 2,
Ended 1996(e)
January 31, Year Ended July 31, to
2000 ------------------ July 31,
(unaudited)(d) 1999 1998 1997
-----------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................... $ 15.64 $ 15.98 $ 16.17 $ 14.79
-------------------------------------------------
Income From Investment Operations
Net investment income(a) ............................... .21 .39 .37 .23
Net realized and unrealized gain (loss) on investment
transactions ......................................... (.49) 1.29 1.87 3.22
-------------------------------------------------
Net increase (decrease) in net asset value
from operations ...................................... (.28) 1.68 2.24 3.45
-------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ................... (.21) (.37) (.36) (.27)
Distributions from net realized gains .................. (.64) (1.65) (2.07) (1.80)
-------------------------------------------------
Total dividends and distributions ...................... (.85) (2.02) (2.43) (2.07)
-------------------------------------------------
Net asset value, end of period ......................... $ 14.51 $ 15.64 $ 15.98 $ 16.17
=================================================
Total Return
Total investment return based
on net asset value(b) ................................ (1.75)% 11.71% 15.32% 25.96%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) .............. $ 2,700 $ 2,627 $ 2,079 $ 1,565
Ratio of expenses to average net assets(c) ............. .86%(d) .97% 1.06% 1.30%(d)
Ratio of net investment income to average net assets ... 2.79%(d) 2.56% 2.33% 2.15%(d)
Portfolio turnover rate ................................ 22% 105% 145% 207%
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period
of less than one year is not annualized.
(c) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the periods shown below, the net expense ratios were
as follows:
Six
Months
Ended Period
January 31, Year Ended July 31, Ended
2000 ------------------ July 31,
(unaudited)(d) 1999 1998 1997
----------------------------------------------------
Class A.......... 1.10% 1.21% 1.29% 1.46%
Class B.......... 1.85% 1.96% 2.05% 2.24%
Class C.......... 1.84% 1.94% 2.04% 2.22%
Advisor Class.... .84% .96% 1.05% 1.29%(d)
(d) Annualized.
(e) Commencement of distribution.
- --------------------------------------------------------------------------------
32 o ALLIANCE BALANCED SHARES
<PAGE>
GLOSSARY OF INVESTMENT TERMS
================================================================================
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
bond
Bonds are issued by governments or corporations when they need to raise cash.
Bonds are sold, or issued, to investors and have a maturity date, which is the
date the issuer is obligated to repay the investor for the principal, or face
amount, of the Bond. Bonds also pay interest until maturity. Bonds are also
called fixed-income securities.
debt securities
A type of security that denotes a loan that must be repaid to the lender in the
future.
diversification
A technique of allocating assets among many types of investments.
equity security
Another term for stock.
fixed-income security
A security that pays a pre-set rate of interest or dividends.
fixed rate
The interest rate does not change during the entire term of the loan.
government bond
A bond that is issued by the U.S. government or its agencies.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
maturity
The date that an obligation becomes due for payment.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
portfolio
The collection of securities that make up a fund's or an investor's investments.
sector
Refers to a distinct part of the market, for example, the technology sector.
share
A unit which represents ownership in a mutual fund or stock.
Treasuries
Negotiable U.S. government debt obligations, backed by the full faith and credit
of the U.S. government. Treasuries are issued either as bills, notes or bonds
depending on the maturity. Treasuries are exempt from state and local taxes.
Treasury bond
A debt security issued by the U.S. Treasury with a maturity of 10 years or more.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 33
<PAGE>
ALLIANCE CAPITAL
================================================================================
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $368
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 31 of the FORTUNE 100 companies and public retirement funds in 31
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 277
investment professionals in 21 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 12/31/99.
- --------------------------------------------------------------------------------
34 o ALLIANCE BALANCED SHARES
<PAGE>
ALLIANCE CAPITAL AT YOUR SERVICE
================================================================================
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio and Alliance
Select Investor Series Technology Portfolio, which generally have a
$10,000 minimum initial investment) and may make subsequent investments of
$50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 35
<PAGE>
BOARD OF DIRECTORS
================================================================================
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Bruce W. Calvert, Executive Vice President
Kathleen A. Corbet, Senior Vice President
Paul C. Rissman, Senior Vice President
Thomas J. Bardong, Vice President
Corinne Molof Hill, 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 LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
(1) Member of the Audit Committee.
- --------------------------------------------------------------------------------
36 o ALLIANCE BALANCED SHARES
<PAGE>
ALLIANCE CAPITAL FAMILY OF FUNDS
================================================================================
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Limited Maturity Government Fund
Mortgage Securities Income Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
- --------------------------------------------------------------------------------
ALLIANCE BALANCED SHARES o 37
<PAGE>
Alliance Balanced Shares -------------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
-------------------
Alliance Capital [LOGO]
The Investmet Professionals Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
BALSR0100
