ALLIANCE MUNICIPAL INCOME FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
June 26, 1998
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund's semi-annual reporting period ended April 30,
1998.
ALLIANCE MUNICIPAL INCOME FUND - CLASS A SHARES
Periods Ended April 30, 1998
<TABLE>
<CAPTION>
6 MONTHS 12 MONTHS SINCE INCEPTION
-------------------------- -------------------------- --------------------------
FUND PORTFOLIO LIPPER FUND PORTFOLIO LIPPER FUND PORTFOLIO LIPPER
PORTFOLIO TOTAL RETURNS* RANKINGS** TOTAL RETURNS* RANKINGS** TOTAL RETURNS* RANKINGS**
- ------------------ -------------- ---------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
National 2.47% 111/246 10.18% 25/237 8.15% 4/63
California 3.11% 4/105 11.26% 7/101 8.11% 1/30
New York 3.00% 8/97 11.15% 1/93 7.35% 4/22
Insured National 3.21% 2/52 11.35% 1/51 7.81% 1/15
Insured California 2.84% 3/26 10.47% 1/26 7.89% 2/2
</TABLE>
MORNINGSTAR RATINGS***
3 YEAR 5 YEAR 10 YEAR
PORTFOLIO 1547 FUNDS 809 FUNDS 346 FUNDS OVERALL
- ------------------ ---------- --------- --------- -------
National 4 stars 3 stars 4 stars 4 stars
California 4 stars 3 stars 4 stars 4 stars
New York 4 stars 3 stars 4 stars 4 stars
Insured National 3 stars 2 stars 3 stars 3 stars
Insured California 2 stars 1 star 2 stars 2 stars
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIODS AND ARE
BASED ON THE NET ASSET VALUE OF CLASS A SHARES AS OF APRIL 30, 1998. 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. TOTAL RETURNS FOR CLASS B AND CLASS C SHARES WILL DIFFER
DUE TO DIFFERENT EXPENSES CHARGED TO THOSE CLASSES. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. ADDITIONAL PERFORMANCE INFORMATION CAN BE FOUND ON
PAGES 3, 4 AND 5.
** SINCE INCEPTION LIPPER RANKINGS ARE BASED ON THE CLOSEST MONTH-END TO EACH
PORTFOLIO'S INCEPTION DATE. FUNDS IN THE LIPPER AVERAGES GENERALLY HAVE SIMILAR
INVESTMENT OBJECTIVES, ALTHOUGH SOME MAY HAVE DIFFERENT INVESTMENT POLICIES.
THE FUND'S LIPPER RANKING IS LISTED ALONG WITH THE TOTAL NUMBER OF FUNDS IN THE
LIPPER CATEGORY. LIPPER RANKINGS FOR THE 5 AND 10 YEAR PERIODS ENDED 4/30/98
ARE: 9/122 AND 11/71 FOR THE NATIONAL PORTFOLIO, 5/55 AND 3/30 FOR THE
CALIFORNIA PORTFOLIO, 5/50 AND 4/27 FOR THE NEW YORK PORTFOLIO, 2/26 AND 1/17
FOR THE INSURED NATIONAL PORTFOLIO, AND 2/12 AND 3/7 FOR THE INSURED CALIFORNIA
PORTFOLIO. CLASS A SHARE FUND PORTFOLIO INCEPTION DATES ARE: 12/29/86 FOR
NATIONAL, CALIFORNIA, NEW YORK AND INSURED NATIONAL AND 11/21/85 FOR INSURED
CALIFORNIA. AN INVESTOR CANNOT INVEST DIRECTLY IN AN AVERAGE.
*** MORNINGSTAR PROPRIETARY RATINGS REFLECT HISTORICAL RISK-ADJUSTED
PERFORMANCE AS OF APRIL 30, 1998. THESE RATINGS MAY CHANGE MONTHLY AND ARE
CALCULATED FROM EACH PORTFOLIO'S 3-YEAR AVERAGE ANNUAL RETURNS IN EXCESS OF
90-DAY TREASURY BILL RETURNS WITH APPROPRIATE FEE ADJUSTMENTS AND A RISK FACTOR
THAT REFLECTS PORTFOLIO PERFORMANCE BELOW 90-DAY TREASURY BILL RETURNS. IF THE
PORTFOLIO SCORES IN THE TOP 10% OF ITS CLASS IT RECEIVES 5 STARS; IF IT FALLS
IN THE NEXT 22.5% IT RECEIVES 4 STARS; A PLACE IN THE MIDDLE 35% EARNS IT 3
STARS; THOSE IN THE NEXT 22.5% RECEIVE 2 STARS; AND THE BOTTOM 10% GET 1 STAR.
THE FUND'S MORNINGSTAR RATINGS ARE LISTED ALONG WITH THE TOTAL NUMBER OF FUNDS
IN EACH STATE'S MUNI SINGLE STATE LONG CATEGORY AND MUNI NATIONAL LONG
CATEGORY. EACH PORTFOLIO'S SEC AVERAGE ANNUAL TOTAL RETURNS CAN BE FOUND ON
PAGE 5.
MARKET OVERVIEW
After a very strong fourth quarter of 1997, municipal bonds slightly
underperformed U.S. Treasuries in the first quarter of 1998. However, the
tax-exempt market performed well on an absolute basis, with prices generally
higher across all sectors. Our view is that this relative underperformance was
due to heavy new issuance by municipalities refinancing older, higher-
1
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
coupon debt, and by the reduced supply of U.S. Treasury debt caused by the
lower Federal deficit. A "flight to quality" by international investors into
U.S. Treasuries, resulting from the Asian financial crisis, also fueled the
outperformance of that market. In addition, the Asian crisis lowered investor
expectations for growth and inflation in the domestic economy, another positive
for the U.S. bond markets. The net result for the municipal market was a
range-bound, quiet market focused on new issues. Continuing positive investment
flows into tax-exempt mutual funds, combined with stronger than usual insurance
company demand, absorbed much of the new issuance without affecting prices.
A consistent trend through the first quarter was improving credit quality for
state and local debt issuers. With local economies benefiting from the recent
protracted period of economic expansion, municipalities are experiencing record
surpluses. In many cases, surpluses have greatly exceeded budget projections.
For example, New York City recently announced a record $2 billion surplus,
compared to recent years of projected deficits. Highlighting this trend was
Standard and Poor's upgrading of nine issues for every downgrade during the
first quarter. There is a possibility that local governments will use these
surpluses to pay down older, high cost debt, reducing overall supply in the
market. However, in the past, surpluses have tended to be used for new
projects, not debt reduction.
INVESTMENT STRATEGY
Due to the recent lack of volatility in the market and record low yields for
long term municipal bonds, there has been relatively little trading activity in
the Fund's portfolios since the beginning of the year. Our style of management
is contrarian in outlook, seeking value during periods of market turmoil. Since
1994, the Alliance Municipal Income Fund's portfolios have had a significantly
longer duration than their peer group. As a result, these funds dramatically
outperformed most of their peers in the declining interest rate environment of
the last several years. More recently, because of gains in bond prices, we have
taken a slightly more defensive posture by investing in securities with a
shorter average duration. By positioning the funds for market moves in either
direction, we stand prepared to benefit if price volatility once again returns
to the tax-exempt market.
MARKET OUTLOOK
Market volatility is likely to increase during the second half of the Fund's
fiscal year. With the continuing strength of the U.S. economy, and the
relatively modest impact of the turmoil in Asia on corporate earnings, we could
begin to see weaker bond prices and an opportunity to once again reposition the
portfolios. We firmly believe that the environment for long term municipal bond
investors should be positive. It is clear that the Federal Reserve is committed
to curbing inflationary pressures. We view any backup in interest rates as an
excellent opportunity to lock in attractive yields and to improve long term
call protection. Looking ahead, we believe that interest rates will trend lower
over the long term and that municipal credit quality will continue to improve.
Overall, we believe that the investing environment will continue to be
excellent for municipal bond investors.
We appreciate your investment in Alliance Municipal Income Fund and look
forward to reporting future investment results.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
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 MUNICIPAL INCOME FUND
_______________________________________________________________________________
The five portfolios of Alliance Municipal Income Fund, by investing principally
in high-yielding, predominantly medium quality municipal securities, seek to
provide their shareholders with the highest level of income exempt from Federal
and state tax that is available without assuming undue risk. These securities
generally offer current yields above those of higher quality municipal
obligations.
HOW YOUR PORTFOLIO PERFORMED OVER THE PAST SIX MONTHS
Total returns for the Portfolios' Class A shares for the periods ended April
30, 1998 are shown below. We have also shown, for comparison, returns for the
overall municipal bond market, represented by the unmanaged state specific
Lipper Municipal Debt Funds Average. Current yields and returns for Class B and
Class C shares are on the next page.
INVESTMENT RESULTS*
MUNICIPAL INCOME FUND - CLASS A SHARES COMPARED TO LIPPER MUNICIPAL DEBT FUNDS
AVERAGE
Periods Ended April 30, 1998
PORTFOLIO LIPPER AVERAGE PORTFOLIO LIPPER AVERAGE
TOTAL RETURNS TOTAL RETURNS TOTAL RETURNS TOTAL RETURNS
6 MONTHS 6 MONTHS 12 MONTHS 12 MONTHS
------------- -------------- ------------- --------------
National 2.47% 2.45% 10.18% 9.02%
California 3.11% 2.35% 11.26% 9.16%
New York 3.00% 2.33% 11.15% 8.72%
Insured National 3.21% 2.22% 11.35% 8.46%
Insured California 2.84% 2.32% 10.47% 8.77%
* TOTAL RETURNS FOR THE FUND'S PORTFOLIOS ARE BASED ON THE NET ASSET VALUE
OF CLASS A SHARES AS OF APRIL 30, 1998. 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. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE STATE SPECIFIC LIPPER
MUNICIPAL DEBT FUNDS AVERAGES HAVE GENERALLY SIMILAR INVESTMENT OBJECTIVES TO
YOUR FUND'S PORTFOLIOS, ALTHOUGH SOME MAY HAVE DIFFERENT INVESTMENT POLICIES.
3
INVESTMENT RESULTS
AS OF APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS
---------------------------------------------- TAXABLE
WITHOUT SALES CHARGE WITH SALES CHARGE EQUIVALENT
-------------------- -------------------- 30-DAY YIELD IN 36%
SINCE SINCE SEC TAX BRACKET*
1 YEAR INCEPTION 1 YEAR INCEPTION YIELD* (AT NAV)
------ --------- ------ --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
NATIONAL PORTFOLIO
Class A 10.18% 8.15% 5.53% 7.73% 4.55% 8.28%
Class B 9.48 6.44 6.48 6.44 4.03 7.28
Class C 9.49 5.91 8.49 5.91 4.04 7.30
CALIFORNIA PORTFOLIO
Class A 11.26 8.11 6.50 7.69 5.01 9.08
Class B 10.49 6.69 7.49 6.69 4.52 7.89
Class C 10.49 6.22 9.49 6.22 4.52 7.89
NEW YORK PORTFOLIO
Class A 11.15 7.35 6.39 6.93 5.02 9.06
Class B 10.36 6.23 7.36 6.23 4.52 7.80
Class C 10.36 5.67 9.36 5.67 4.54 7.80
INSURED NATIONAL PORTFOLIO
Class A 11.35 7.81 6.64 7.39 4.13 7.00
Class B 10.54 6.56 7.54 6.56 3.61 6.00
Class C 10.54 6.02 9.54 6.02 3.62 6.00
INSURED CALIFORNIA PORTFOLIO
Class A 10.47 7.89 5.77 7.52 4.23 7.91
Class B 9.67 6.02 6.67 6.02 3.71 6.65
Class C 9.67 5.47 8.67 5.47 3.72 6.65
</TABLE>
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 (3% year 1, 2% year 2, 1% year 3, 0% 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.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Yields are for the 30-day period ended 4/30/98.
4
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (MARCH 31,
1998)
1 YEAR 5 YEARS 10 YEARS
-------- -------- --------
NATIONAL PORTFOLIO
Class A 6.53% 6.02% 8.32%
Class B 7.53% 6.21% n/a
Class C 9.65% n/a n/a
CALIFORNIA PORTFOLIO
Class A 7.89% 6.26% 8.24%
Class B 8.85% 6.41% n/a
Class C 10.85% n/a n/a
NEW YORK PORTFOLIO
Class A 8.24% 5.83% 8.23%
Class B 9.20% 5.98% n/a
Class C 11.20% n/a n/a
INSURED NATIONAL PORTFOLIO
Class A 7.81% 6.08% 8.18%
Class B 8.77% 6.27% n/a
Class C 10.77% n/a n/a
INSURED CALIFORNIA PORTFOLIO
Class A 7.32% 5.55% 7.79%
Class B 8.24% 5.67% n/a
Class C 10.24% n/a n/a
SEC average annual total returns for the periods shown reflect reinvestment of
all distributions and deduction of the maximum 4.25% front-end sales charges
and applicable contingent deferred sales charges.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
n/a: not applicable.
5
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-101.2%
LONG TERM MUNICIPAL BONDS-76.5%
ARIZONA-4.1%
NR Goodyear
Assess Dist #1 (Palm Valley)
Ser 96C
7.25%, 7/01/16 $ 4,245 $ 4,475,249
AA+ Maricopa Cnty
Util Rev (Citizen's Util)
Ser 95 AMT
6.20%, 5/01/30 7,090 7,593,106
AA- Mohave Cnty IDR
(Cargill/No Star Steel Proj)
Ser 95A AMT
6.70%, 3/01/20 6,645 7,399,340
AA+ Mohave Cnty IDR
(Citizen's Util)
Ser 93B AMT
5.80%, 11/15/28 2,000 2,064,720
AAA Phoenix Arpt Rev
(Sky Hbr/Gdyear/Dr Vly)
MBIA Ser 94D AMT
6.30%, 7/01/10 370 404,773
NR Prescott Comm Fac Dist
(Hassayampa)
Ser 96
7.75%, 7/01/21 2,035 2,116,726
NR Scottsdale GO
(McDowell Ranch)
Ser 97
6.50%, 7/15/22 2,000 2,020,000
------------
26,073,914
CALIFORNIA-5.4%
AA- California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93A AMT
5.875%, 6/01/23 12,145 12,472,551
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/18 17,325 16,684,321
AAA No Calif Trans Agy
Elec Rev
(Calif-Oregon Trans)
MBIA Ser 93A
6.814%, 4/29/24 (a) 5,000 5,143,000
------------
34,299,872
COLORADO-5.8%
Aaa* Arapahoe Cnty
(E-470 Public Highway
Auth)
Pre-refunded
7.00%, 8/31/05 11,830 13,912,671
BBB Denver City & Cnty
(Arpt System Rev)
Ser 92C
6.75%, 11/15/22 9,500 10,309,974
BB+ Denver City & Cnty
Arpt Auth
(United Airlines)
Ser 92A AMT
6.875%, 10/01/32 11,775 12,753,974
------------
36,976,619
FLORIDA-11.6%
NR Collier Cnty Comm
Fac Dist (Fiddler's Creek)
Ser 96
7.50%, 5/01/18 6,155 6,530,024
NR Collier Cnty Comm
Fac Dist (Heritage Greens)
Ser 96
8.25%, 5/01/18 3,090 3,261,093
NR Collier Cnty IDR
(Southern St Util)
Ser 96 AMT
6.50%, 10/01/25 12,605 13,518,736
AAA Dade Cnty Arpt Rev
(Miami Int'l)
MBIA Ser 95B AMT
6.00%, 10/01/24 6,455 6,899,298
AAA Escambia Cnty HFA
SFMR (Multi County)
GNMA Ser 95B AMT
6.25%, 4/01/28 7,710 8,112,308
AAA Jacksonville Wtr & Swr
(United Waterworks)
AMBAC Ser 95 AMT
6.35%, 8/01/25 1,500 1,651,230
NR Northern Palm Beach Cnty
Imp Dist #9A (ABACOA)
Ser 96A
7.20%, 8/01/16 2,690 2,933,795
7.30%, 8/01/27 15,600 17,007,432
AA- Orlando Util Comm
(Wtr & Elec)
Ser 93B
6.931%, 10/06/17 (a) 4,550 4,741,236
6
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
A+ Palm Beach Cnty Hlth Fac
(Lourdes-McKeen
Residence) Ser 96
6.625%, 12/01/26 $ 420 $ 459,925
NR St. John's Cnty Comm Dev
(Julington Creek Plantation)
Ser 97
6.70%, 5/01/07 3,090 3,205,968
7.125%, 5/01/19 1,340 1,407,281
Baa2* Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ)
Ser 96A
6.125%, 10/15/26 3,290 3,459,600
------------
73,187,926
GEORGIA-5.1%
AAA Atlanta Arpt Fac Rev
MBIA AMT
Zero coupon, 1/01/10 60,535 32,126,530
INDIANA-6.8%
BB+ Indianapolis Arpt Auth
(United Airlines)
Ser 95A AMT
6.50%, 11/15/31 39,670 42,793,616
MARYLAND-0.2%
NR Maryland Ind Dev Fin Auth
Eco Dev
(Med Waste Assoc)
Ser 89 AMT
8.75%, 11/15/10 1,405 1,461,186
MASSACHUSETTS-5.2%
AAA Massachusetts HFA
MFHR (Harbor Point Dev)
AMBAC Ser 96A AMT
6.40%, 12/01/15 540 581,499
A3* Massachusetts Ind Fin Auth
Ed Fac (Brooks School)
Ser 93
5.95%, 7/01/23 220 226,294
AAA Massachusetts Ind Fin Auth
MFHR (Heights Crossing)
FHA Ser 95 AMT
6.15%, 2/01/35 4,985 5,195,716
AAA Massachusetts Port Auth
(Boston Fuel Corp)
MBIA Ser 97 AMT
6.00%, 7/01/36 18,965 19,794,339
AAA Massachusetts Port Auth
(USAir Proj)
MBIA Ser 96A AMT
5.875%, 9/01/23 5,490 5,702,573
AA+ Massachusetts Wtr Poll
(So Essex Proj)
Ser 94A
6.375%, 2/01/15 1,025 1,114,729
A1* New England Higher Ed
Student Loan Rev
Ser 93H AMT
6.90%, 11/01/09 385 432,551
------------
33,047,701
MICHIGAN-3.4%
AAA Detroit GO
FGIC Ser 93
Pre-refunded
6.35%, 4/01/03 755 817,529
AAA Detroit Swr Sys Rev
FGIC Ser 93A
7.263%, 7/01/23 (a) 2,750 2,901,333
AAA Kent Cnty Arpt Rev
(Kent Cnty Int'l)
Ser 95 AMT
6.10%, 1/01/25 3,965 4,168,523
AAA Michigan HDA
MFHR (Rental Hsg Rev)
AMBAC Ser 97A AMT
6.10%, 10/01/33 8,400 8,794,632
AA+ Michigan HDA
SFMR (Mortgage Rev)
Ser 96B AMT
6.20%, 6/01/27 2,020 2,120,152
A Michigan Strategic Fund
PCR (General Motors Corp)
Ser 95
6.20%, 9/01/20 2,490 2,686,660
------------
21,488,829
MINNESOTA-2.0%
A Bass Brook PCR
(Minnesota Pwr & Light)
Ser 92
6.00%, 7/01/22 1,080 1,119,744
AAA Duluth GO
Arpt Lease Rev
Ser 95C AMT
6.25%, 8/01/14 3,885 4,157,066
7
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
AA+ Minnesota HFA
SFMR (Home Mortgage)
Ser 93-C2 AMT
6.15%, 7/01/23 $ 2,300 $ 2,384,479
AA+ Minnesota HFA
SFMR (Home Mortgage)
Ser 96F AMT
6.30%, 1/01/28 4,435 4,690,811
AA+ Minnesota HFA
SFMR (Home Mortgage)
Ser 96G AMT
6.25%, 7/01/26 545 574,419
------------
12,926,519
NEVADA-0.2%
AAA Clark Cnty PFC
(Las Vegas/Macarran Int'l Arpt)
MBIA Ser 95A AMT
6.25%, 7/01/01 1,000 1,052,670
NEW HAMPSHIRE-0.8%
BB- New Hampshire Fin Auth
PCR (Pub Svc Co)
Ser 93E AMT
6.00%, 5/01/21 5,000 5,050,000
NEW JERSEY-1.6%
AAA New Jersey Eco Dev Auth
PCR (Pub Svc Elec & Gas)
MBIA Ser 94A AMT
6.40%, 5/01/32 1,140 1,219,675
A+ New Jersey Eco Dev Auth
Swr Rev (Anheuser-Busch)
Ser 95 AMT
5.85%, 12/01/30 5,100 5,362,956
AAA New Jersey Eco Dev Auth
Wtr Fac (Hackensack Wtr Co)
MBIA Ser 94B AMT
5.90%, 3/01/24 750 775,050
AAA New Jersey Eco Dev Auth
Wtr Fac (NJ American Wtr Co)
FGIC AMT
6.875%, 11/01/34 1,300 1,453,283
AA- New Jersey Hwy Auth
(Garden State Pkwy)
6.25%, 1/01/14 1,250 1,327,562
------------
10,138,526
NEW YORK-2.8%
AAA Niagara Frontier Trans
Arpt Rev (Gtr Buffalo Int'l)
AMBAC Ser 94A AMT
6.25%, 4/01/24 1,550 1,651,199
AAA NYS Energy Res &
Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 87A AMT
6.15%, 7/01/26 370 395,315
AAA NYS Energy Res &
Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 88A AMT
5.95%, 12/01/27 6,700 6,909,442
AA- Port Auth of NY & NJ
Cons Rev (95th Ser)
AMT
6.125%, 7/15/29 8,135 8,623,019
------------
17,578,975
OHIO-7.4%
AAA Cleveland Arpt Rev
(Cleveland Int'l)
FGIC Ser 94A AMT
6.25%, 1/01/20 10,000 10,698,200
AAA Columbus Arpt Rev
(Port Columbus Int'l)
MBIA Ser 94A AMT
6.25%, 1/01/24 4,000 4,277,240
AAA Cuyahoga Cnty Hosp Rev
(Meridia Hlth Sys)
Ser 95
Pre-refunded
6.25%, 8/15/05 2,600 2,917,096
BBB Dayton Spec Fac
(Emery Air Freight)
Ser 96D AMT
6.20%, 10/01/09 5,680 6,158,597
BBB+ Ohio Air Quality Dev Auth
PCR (Columbus So Pwr)
Ser 85B
6.25%, 12/01/20 2,380 2,511,804
AA- Ohio Air Quality Dev Auth
PCR (Dayton Pwr & Light)
Ser 92B
6.40%, 8/15/27 2,000 2,158,120
AAA Ohio Air Quality Dev Auth
PCR (JMG Funding/Ohio
Pwr Co)
AMBAC Ser 94B AMT
6.375%, 4/01/29 7,850 8,441,733
AAA Ohio HFA
SFMR (Residental Mtg)
GNMA Ser 97 AMT
6.15%, 3/01/29 1,045 1,100,678
8
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
A Ohio Wtr Dev Auth Solid
Waste
(North Star/BHP)
AMT
6.45%, 9/01/20 $ 5,245 $ 5,674,775
Aa3* Toledo-Lucas Cnty Port
Auth (Cargill Inc Proj)
5.90%, 12/01/15 3,000 3,142,680
------------
47,080,923
PENNSYLVANIA-2.4%
AAA Pennsylvania Higher Ed
Student Loan Rev
AMBAC Ser 88D AMT
6.05%, 1/01/19 7,380 7,674,241
AAA Philadelphia Aprt Sys Rev
AMBAC Ser 95A AMT
6.10%, 6/15/25 6,485 6,874,878
AA Potter Cnty Hosp Rev
(Charles Cole Mem)
Ser 96 Asset Gty
6.05%, 8/01/24 725 762,787
------------
15,311,906
RHODE ISLAND-1.2%
AA+ Rhode Island Hsg &
Mtg Fin Corp
SFMR (Home Ownership)
Ser 92-7A AMT
6.75%, 10/01/25 7,100 7,539,987
SOUTH DAKOTA-0.2%
AA+ South Dakota HDA
SFMR (Home Ownership)
Ser 93-II AMT
6.15%, 5/01/26 1,275 1,313,594
TENNESSEE-0.2%
BBB Memphis Shelby Cnty
Spec Fac (Federal Express)
Ser 93 AMT
6.20%, 7/01/14 1,000 1,057,810
TEXAS-3.3%
BBB- Alliance Arpt Auth
Fac Imp (American Airlines)
Ser 90 AMT
7.50%, 12/01/29 11,690 12,654,425
BB- Houston Arpt Rev
(Continental Airlines)
Ser 97B AMT
6.125%, 7/15/27 8,000 8,315,280
------------
20,969,705
VIRGINIA-3.9%
A Alexandria Redev & Hsg
MFHR (Buckingham Village)
Ser 96A AMT
6.15%, 1/01/29 130 136,054
A+ Giles Cnty IDR
(Hoechst-Celanese Corp)
Ser 96 AMT
6.45%, 5/01/26 3,120 3,433,092
AAA Harrisonburg Redev &
Hsg Auth
MFHR (Greens of Salem
Run) FSA Ser 97 AMT
6.30%, 4/01/29 3,545 3,805,132
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail)
Ser 94
7.125%, 8/01/21 2,000 2,309,700
A- Henrico Cnty Swr Rev
(Browning-Ferris)
Ser 97A AMT
5.875%, 3/01/17 2,115 2,215,251
A+ Henry Cnty Hosp Rev
(Martinsville &
Henry Mem Hsp) Ser 97
6.00%, 1/01/27 650 684,872
A- Isle of Wight Cnty
Solid Waste (Union Camp
Corp)
Ser 94 AMT
6.55%, 4/01/24 3,360 3,684,341
A+ James Cnty Swr Rev
(Anheuser-Busch Proj)
Ser 97 AMT
6.00%, 4/01/32 3,535 3,706,907
Aaa* Prince William Cnty
Hosp Rev (Potomac Hosp
Grp) Ser 95
6.75%, 10/01/15 2,250 2,598,075
NR Staunton Ed Fac
(Mary Baldwin
College) Ser 96
6.75%, 11/01/21 780 863,117
AA Virginia Beach
Hosp Rev
(Sentara Bayside)
6.30%, 11/01/21 390 412,608
9
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
AA+ Virginia HDA
SFMR (Commonwealth
Mtg) Ser 96B AMT
6.375%, 1/01/26 $ 120 $ 125,416
AA Virginia Res Auth Swr Rev
(Hopewell Fac)
Ser 95A AMT
6.00%, 10/01/25 625 653,738
------------
24,628,303
WASHINGTON-0.6%
A- Pilchuck Dev Pub Corp
Spec Fac (BF Goodrich)
Ser 93 AMT
6.00%, 8/01/23 3,585 3,684,018
WISCONSIN-2.3%
AAA Wisconsin GO
MBIA Ser 96B AMT
6.20%, 11/01/26 13,930 14,826,953
TOTAL LONG TERM MUNICIPAL BONDS
(cost $464,243,276) 484,616,082
SHORT TERM MUNICIPAL NOTES-24.7%
CALIFORNIA-6.4%
A-2 Contra Costa Cnty
MFHR (Park Regency Apts)
Ser 92A AMT VRDN
4.95%, 8/01/32 (b) 25,700 25,700,000
A-1 Long Beach Res Rec Rev
(Southeast Fac Auth
Lease Rev)
Ser 95A VRDN
4.85%, 12/01/18 (b) 15,000 15,000,000
------------
40,700,000
DISTRICT OF COLUMBIA-1.6%
VMIG-1* District of Columbia
Ed Fac (George Washington Univ)
Ser 85A VRDN
4.70%, 3/01/06 (b) 10,300 10,300,000
HAWAII-4.6%
VMIG-1* Hawaii HFA
MFHR (Rental Hsg)
Ser 90B VRDN
4.70%, 7/01/25 (b) 28,900 28,900,000
ILLINOIS-0.9%
A-1 Illinois Dev Fin Auth
PCR (Illinois Power
Co Proj)
Ser 87C AMT VRDN
4.70%, 3/01/17 (b) 4,000 4,000,000
A-2 Illinois IDR
(MTI Corp Proj)
Ser 89 VRDN
4.60%, 1/01/09 (b) 2,000 2,000,000
------------
6,000,000
INDIANA-1.6%
A-1 Gibson Cnty
PCR (Toyota Mtr Mfg Proj)
Ser 97 AMT VRDN
4.65%, 10/01/27 (b) 5,000 5,000,000
A-1 Gibson Cnty
PCR (Toyota Mtr Mfg Proj)
Ser 98 AMT VRDN
4.65%, 1/01/28 (b) 5,000 5,000,000
------------
10,000,000
KANSAS-2.2%
A-2 Wichita Cnty Hlth Fac Rev
(CSJ Health Sys)
Ser 85 VRDN
4.70%, 10/01/08 (b) 7,400 7,400,000
4.70%, 10/01/11 (b) 6,800 6,800,000
------------
14,200,000
NEVADA-2.5%
A-2 Nevada HFA
MFHR (Park Vista Apts)
Ser 91 VRDN
5.10%, 10/01/10 (b) 15,600 15,600,000
NEW JERSEY-0.6%
A-2 New Jersey Eco Dev Auth
IDR
(Epitaxx Inc Proj)
Ser 91 AMT VRDN
5.025%, 8/01/16 (b) 900 900,000
A-2 Newark Hlth Fac Rev
(Urban Renewal Corp)
GNMA Ser 95A VRDN
4.90%, 6/01/30 (b) 2,930 2,930,000
------------
3,830,000
10
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
NORTH DAKOTA-1.6%
MIG-1* North Dakota HFA
SFMR (Residential Mtg)
Ser 98C AMT
3.90%, 6/01/99 $ 10,000 $ 10,000,000
OHIO-0.4%
A-2 Ohio HFA
MFHR (Pine Crossing)
GNMA Ser 97A AMT VRDN
5.15%, 9/01/36 (b) 2,265 2,265,000
OREGON-1.5%
P-1* Oregon Eco Dev Auth IDR
(Georgia-Pacific Corp)
Ser 95A AMT VRDN
4.45%, 12/01/25 (b) 2,800 2,800,000
A-1* Oregon Eco Dev Auth IDR
(Jae Oregon Inc Proj)
Ser 89 AMT VRDN
4.475%, 3/01/99 (b) 5,500 5,500,000
A-1* Oregon Eco Dev Auth IDR
(Kyotaru Oregon Proj)
Ser 89 AMT VRDN
4.475%, 12/01/99 (b) 1,400 1,400,000
------------
9,700,000
VIRGINIA-0.2%
A-1 Peninsula Port Auth IDR
(Kinyo Inc Proj)
Ser 88 AMT VRDN
4.75%, 5/01/08 (b) 1,000 1,000,000
WASHINGTON-0.6%
A-1 Port of Port Angeles IDR
(Daishowa America Proj)
Ser 92B AMT VRDN
4.95%, 8/01/07 (b) 1,700 1,700,000
4.95%, 12/01/07 (b) 1,900 1,900,000
------------
3,600,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $156,095,000) 156,095,000
TOTAL INVESTMENTS-101.2%
(cost $620,338,276) 640,711,082
Other assets less liabilities-(1.2%) (7,826,683)
NET ASSETS-100% $ 632,884,399
See footnote summary on page 22.
See Glossary of Terms on page 22.
See notes to financial statements.
11
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-97.2%
LONG TERM MUNICIPAL BONDS-68.0%
ALASKA-16.9%
AAA Alaska Hsg Fin Corp
MFHR (Mtg Rev)
MBIA Ser 96A
6.00%, 12/01/15 $ 1,400 $ 1,473,416
6.05%, 12/01/17 2,000 2,112,600
AAA Alaska Hsg Fin Corp
SFMR (Mtg Rev)
MBIA Ser 97A
6.00%, 6/01/27 25,000 26,194,000
6.10%, 12/01/37 10,000 10,517,500
------------
40,297,516
ARIZONA-1.8%
AAA Glendale
Ed Fac (Midwestern Univ)
CONNIE LEE Ser 96A
6.00%, 5/15/26 35 37,138
AAA Maricopa Cnty GO
Kyrene Elem Sch Imp #28
FGIC Ser 95B
6.00%, 7/01/14 475 503,733
AAA Tempe
MFHR (Quadrangles)
FHA Ser 93
6.25%, 6/01/26 3,660 3,862,654
------------
4,403,525
CALIFORNIA-13.7%
AAA Mojave Wtr Agy
Imp Dist M (Morongo Basin
Pipeline)
FGIC Ser 96
5.80%, 9/01/22 5,000 5,257,250
AAA No Calif Trans Agy Elec Rev
(Calif-Oregon Trans)
MBIA Ser 93A
6.814%, 4/29/24 (a) 6,600 6,788,760
AAA Orange Cnty
(Saddleback Valley Sch Dist)
FSA Ser 95A
5.65%, 9/01/17 2,000 2,056,720
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 43,025 12,334,407
AAA So Tahoe Joint Pwr Fin Auth
Ser 95A CAP MAC
5.75%, 10/01/25 4,500 4,661,685
AAA Univ of California Regents
Hosp Rev (UCLA Med Ctr)
MBIA Ser 94
5.50%, 12/01/20 1,685 1,709,904
------------
32,808,726
COLORADO-2.8%
AAA Denver City & Cnty
(Arpt System Rev)
MBIA Ser 95A
5.70%, 11/15/25 6,375 6,602,269
ILLINOIS-2.1%
AAA Metro Pier & Expo Auth
(McCormick Place Expo)
FGIC Ser 93A
Zero coupon, 6/15/19 15,850 5,072,792
MASSACHUSETTS-6.4%
AAA Chelsea GO
AMBAC Ser 94
Pre-refunded
6.00%, 6/15/04 1,965 2,156,312
AAA Massachusetts HFA
MFHR (Residential Dev)
AMBAC Ser 93A
6.15%, 10/01/15 3,500 3,692,710
AAA Massachusetts HFA
MFHR (Residential Dev)
FNMA Coll Sec 8 Ser 92F
6.25%, 11/15/12 5,000 5,389,850
AAA Massachusetts Muni
Wholesale Elec
(Pwr Supply Sys)
MBIA Ser 92A
6.00%, 7/01/18 3,920 4,083,033
------------
15,321,905
MICHIGAN-9.0%
AAA Detroit Swr Sys Rev
FGIC Ser 93A
7.263%, 7/01/23 (a) 6,990 7,374,660
AAA Grand Rapids Swr Sys Rev
MBIA Ser 92
6.00%, 1/01/22 1,500 1,566,975
AAA Kalamazoo Hosp Fin Auth
Hosp Rev (Borgess Med Ctr)
FGIC Ser 94A
6.408%, 6/01/11 (a) 6,460 6,585,776
12
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
AAA Michigan Strategic Fund
PCR (Detroit Edison Co)
MBIA Ser 95AA
6.40%, 9/01/25 $ 4,000 $ 4,379,680
AAA Three Rivers GO
Sch Dist MBIA Ser 96
Pre-refunded
6.00%, 5/01/06 1,400 1,544,452
------------
21,451,543
MINNESOTA-4.7%
Aaa* Eagan
MFHR (Woodridge Apts)
GNMA Ser 97A
5.95%, 2/01/32 1,285 1,353,683
Aaa* Little Canada
MFHR (Cedars Lakeside
Apt)
GNMA Ser 97A
5.95%, 2/01/32 1,530 1,611,779
AAA Minneapolis
(Spec Sch Dist #1)
MBIA Ser 96A
5.90%, 2/01/17 3,885 4,071,208
AAA Minnesota HFA
MFHR (Rental Hsg)
MBIA Ser 95D
6.00%, 2/01/22 4,030 4,221,989
------------
11,258,659
NEBRASKA-1.5%
AAA Nebraska Inv Fin Auth
Hosp Rev
(Bishop Clarkson Mem)
MBIA Ser 91
9.365%, 12/08/16 (a) 3,000 3,515,430
NEW YORK-2.7%
Aaa* Glen Cove IDR
(The Regency at Glen Cove)
Ser 92B ETM
Zero coupon, 10/15/19 20,500 6,566,150
PENNSYLVANIA-0.9%
AAA Pennsylvania Conv Ctr
MBIA Ser 94A
6.75%, 9/01/19 2,025 2,280,980
VIRGINIA-4.5%
AAA Harrisonburg Redev &
Hsg Auth
MFHR (Battery Heights
Assoc) GNMA Ser 96A
6.25%, 4/20/36 4,545 4,857,469
AAA Loudoun Cnty Hosp Rev
(Loudoun Hosp Ctr)
FSA Ser 95
5.80%, 6/01/20 2,500 2,612,800
AAA Newport News
Hlth Fac (Mennowood)
GNMA Ser 96A
6.25%, 8/01/36 2,005 2,150,483
AAA Richmond Met Auth
(Expressway Rev)
FGIC Ser 92B
6.25%, 7/15/22 1,000 1,070,010
------------
10,690,762
WEST VIRGINIA-1.0%
AAA West Virginia Pkwys
Eco Dev
(Parkway Rev)
FGIC Ser 93
7.423%, 5/16/19 (a) 2,100 2,291,919
TOTAL LONG TERM MUNICIPAL BONDS
(cost $151,802,733) 162,562,176
SHORT TERM MUNICIPAL NOTES-29.2%
CALIFORNIA-3.0%
A-2 Simi Valley Hsg Auth
MFHR (Lincoln Wood Ranch)
Ser 90 VRDN
4.50%, 6/01/10 (b) 7,200 7,200,000
FLORIDA-3.5%
A-2 Florida HFA
MFHR (Huntington Proj)
VRDN
4.50%, 12/01/08 (b) 3,300 3,300,000
VMIG-1* Jacksonville Hosp Rev
(Univ Med Ctr Proj)
Ser 89 VRDN
4.95%, 2/01/19 (b) 4,900 4,900,000
------------
8,200,000
13
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
HAWAII-2.6%
VMIG-1* Hawaii HFA
MFHR (Kamakee Vista)
Ser 90A VRDN
4.70%, 7/01/25 (b) $ 6,200 $ 6,200,000
IOWA-1.6%
A-1 Iowa Fin Auth Rev
Hlth Fac (Burlington Med Ctr)
FSA Ser 97 VRDN
4.20%, 6/01/27 (b) 3,900 3,900,000
KANSAS-3.3%
A-2 Wichita
Hlth Fac (CSJ Hlth Sys)
Ser 85 VRDN
4.70%, 10/01/08 (b) 7,900 7,900,000
NORTH CAROLINA-4.6%
A-1+ North Carolina Med Care
Hosp Rev
(Pooled Equip Proj)
MBIA Ser 85 VRDN
4.30%, 12/01/25 (b) 11,000 11,000,000
PENNSYLVANIA-2.9%
A-1+ Emmaus GO
FSA Ser 96 VRDN
4.10%, 12/01/28 (b) 7,000 7,000,000
TENNESSEE-2.3%
P-1* Hamilton Cnty IDR
(Komatsu Amer Mftg Co)
Ser 85 VRDN
4.70%, 11/01/05 (b) 5,400 5,400,000
WASHINGTON-1.3%
A-2 Port of Vancouver IDR
(United Grain Corp of
Oregon)
Ser 84B VRDN
4.60%, 12/01/09 (b) 3,100 3,100,000
WISCONSIN-4.1%
A-1+ Wisconsin Hlth & Ed
Hlth Fac (Felician Services)
AMBAC Ser 97A VRDN
4.125%, 1/01/20 (b) 9,800 9,800,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $69,700,000) 69,700,000
TOTAL INVESTMENTS-97.2%
(cost $221,502,733) 232,262,176
Other assets less liabilities-2.8% 6,585,752
NET ASSETS-100% $ 238,847,928
See footnote summary on page 22.
See Glossary of Terms on page 22.
See notes to financial statements.
14
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
NEW YORK MUNICIPAL BONDS-98.8%
LONG TERM MUNICIPAL BONDS-91.9%
A- Essex County IDR
(Int'l Paper)
Ser 95A AMT
5.80%, 12/01/19 $ 7,000 $ 7,238,490
Aaa* Glen Cove IDR
(The Regency at Glen Cove)
Ser 92B ETM
Zero coupon, 10/15/19 14,510 4,647,553
AAA Islip Res Rec Agy
AMBAC Ser 94B AMT
6.125%, 7/01/12 2,020 2,149,644
AAA New York City GO
MBIA Ser 93D
Pre-refunded
6.00%, 5/15/03 4,050 4,388,175
6.00%, 5/15/11 950 1,015,550
BBB+ New York City GO
Ser 93A
Pre-refunded
6.25%, 8/01/02 1,975 2,139,360
6.25%, 8/01/18 4,025 4,308,239
BBB+ New York City GO
Ser 93D
8.158%, 8/29/14 (a) 10,000 10,885,700
BBB+ New York City GO
Ser 96J
6.00%, 2/15/24 13,580 14,128,496
BBB+ New York City GO
Ser 97A
6.25%, 8/01/17 16,750 18,102,730
BBB- New York City IDR
(American Airlines)
Ser 94 AMT
6.90%, 8/01/24 12,000 13,336,320
AAA New York City IDR
(Japan Airlines)
FSA Ser 91 AMT
6.00%, 11/01/15 4,400 4,705,096
A New York City IDR
(Terminal One LP)
Ser 94 AMT
6.125%, 1/01/24 36,500 38,138,120
AAA Niagara Frontier Trans
Arpt Rev
(Gtr Buffalo Int'l)
AMBAC Ser 94A AMT
6.25%, 4/01/24 14,575 15,526,602
AAA NYS Energy Res &
Dev Auth
(Brooklyn Union Gas)
MBIA AMT
7.386%, 7/08/26 (a) 6,000 6,120,060
AAA NYS Energy Res &
Dev Auth
(Brooklyn Union Gas)
MBIA Ser 89B AMT
6.75%, 2/01/24 7,500 8,154,975
A+ NYS Energy Res &
Dev Auth
(Consolidated Edison)
Ser 94A AMT
7.125%, 12/01/29 22,000 25,296,040
AAA NYS Energy Res &
Dev Auth
(Rochester Gas & Elec)
MBIA AMT
6.50%, 5/15/32 6,460 6,942,304
AAA NYS Energy Res &
Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 87A AMT
6.15%, 7/01/26 14,630 15,630,984
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum)
Ser 93A AMT
5.70%, 9/01/28 6,950 6,998,928
AAA NYS Envir Fac Corp
Wtr Fac (Spring Valley Wtr)
AMBAC Ser 94A AMT
6.30%, 8/01/24 11,800 12,602,636
AAA NYS HFA
MFHR (Erie/Monroe
Cnty Proj)
AMBAC Ser 89B AMT
7.55%, 11/01/29 9,315 9,703,063
Aa* NYS HFA
MFHR (Westchester/
Onondaga/Rockland Proj)
Ser 92F AMT
6.70%, 8/15/25 6,000 6,388,200
Aa2* NYS Mtg Agy
SFMR
Ser 42 AMT
6.65%, 4/01/26 4,500 4,826,610
Aa2* NYS Mtg Agy
SFMR Ser 46 AMT
6.65%, 10/01/25 19,760 21,262,155
15
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
AAA Onondaga Cnty
PCR (Bristol-Myers Squibb)
AMT
5.75%, 3/01/24 $ 4,000 $ 4,292,480
AAA Port Auth of NY & NJ
(JFK Int'l Proj)
MBIA Ser 97-6 AMT
5.75%, 12/01/22 9,905 10,260,391
AA- Port Auth of NY & NJ
Cons Rev (95th Ser)
AMT
6.125%, 7/15/29 4,035 4,277,060
AAA Port Auth of NY & NJ
Cons Rev (96th Ser)
FGIC AMT
6.60%, 10/01/23 10,000 10,968,800
AAA Troy Hsg Dev Corp
MFHR (Ninth St #2)
FHA Ser 90B
8.10%, 2/01/24 3,495 3,924,256
AAA Troy Hsg Dev Corp
MFHR (TUR Proj)
FHA Ser 90C
8.10%, 2/01/24 3,720 4,176,890
TOTAL LONG TERM MUNICIPAL BONDS
(cost $279,702,796) 302,535,907
SHORT TERM MUNICIPAL NOTES-6.9%
VMIG-1* Islip IDR
(Radiation Dynamics)
Ser 88A AMT VRDN
4.725%, 1/01/09 (b) 6,000 6,000,000
A-2 New York City Cultural
Res Trust
(The Jewish Museum)
Ser 92 VRDN
4.70%, 12/01/21 (b) 310 310,000
A-1 New York City Hsg
Dev Corp
MFHR (Frederick Douglas)
Ser 97A AMT VRDN
4.25%, 12/01/29 (b) 600 600,000
A-1 New York City Hsg
Dev Corp
MFHR (Lenox Ave)
Ser 97A AMT VRDN
4.25%, 12/01/29 (b) 700 700,000
VMIG-1* New York City Hsg
Dev Corp
MFHR (Queenswood Apts)
Ser 89A VRDN
4.00%, 2/01/17 (b) 4,960 4,960,000
A-1 New York City Hsg
Dev Corp
MFHR (West 115 St)
Ser 97A AMT VRDN
4.25%, 12/01/29 (b) 600 600,000
VMIG-1* NYS HFA
MFHR (Saxony)
Ser 97A AMT VRDN
4.10%, 11/01/30 (b) 4,700 4,700,000
NR Westchester Cnty IDR
(Hitachi America)
Ser 83 VRDN
4.50%, 7/01/98 (b) 4,700 4,700,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $22,570,000) 22,570,000
TOTAL INVESTMENTS-98.8%
(cost $302,272,796) 325,105,907
Other assets less liabilities-1.2% 3,982,950
NET ASSETS-100% $ 329,088,857
See footnote summary on page 22.
See Glossary of Terms on page 22.
See notes to financial statements.
16
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED)
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.4%
LONG TERM MUNICIPAL BONDS-90.8%
NR California Comm Dev Auth
(San Diego Space & Science)
Ser 96
7.50%, 12/01/16 $ 3,500 $ 3,820,215
A+ California GO
(Veterans Hsg)
Ser 95 AMT
6.40%, 2/01/20 24,750 25,289,550
AAA California HFA
MFHR (Home Mtg Rev)
MBIA Ser 91A AMT
7.20%, 2/01/26 3,450 3,667,661
AAA California HFA
MFHR (Home Mtg Rev)
MBIA Ser 91C AMT
7.00%, 8/01/23 1,475 1,568,633
A+ California HFA
MFHR (Multi-Unit
Rental Hsg)
Ser 92A AMT
6.50%, 2/01/14 4,865 5,140,943
AA- California HFA
SFMR (Home Mtg Rev)
AMBAC Ser 91G AMT
7.05%, 8/01/27 5,120 5,332,326
AAA California HFA
SFMR (Home Mtg Rev)
AMBAC Ser 96H AMT
6.20%, 2/01/27 8,000 8,484,560
AA- California HFA
SFMR (Home Mtg Rev)
Ser 94E AMT
6.70%, 8/01/25 9,365 10,064,659
AAA California HFA
SFMR (Home Mtg Rev)
AMBAC Ser 95A-2 AMT
6.45%, 8/01/25 13,400 14,263,898
A- California Poll Ctl Fin Auth
(Keller Canyon/
Browning-Ferris Ind)
Asset Gty
Ser 92 AMT
6.875%, 11/01/27 5,000 5,493,150
AA- California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93A AMT
5.875%, 6/01/23 33,200 34,095,404
AA- California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93B AMT
5.85%, 12/01/23 56,000 57,511,440
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec)
Ser 93A-C AMT
5.85%, 6/01/21 32,335 33,371,013
A+ California Poll Ctl Fin Auth
PCR (So Calif Edison)
Ser 92B AMT
6.40%, 12/01/24 36,030 38,504,541
A+ Chula Vista
PCR (San Diego Gas & Elec)
Ser 92A AMT
6.40%, 12/01/27 28,240 30,613,572
Aaa* Contra Costa Cnty
MFHR (Byron Park Proj)
GNMA Ser 93A AMT
6.40%, 1/20/31 11,860 12,693,639
NR Encinitas Comm Fac Dist #1
(Encinitas Ranch)
Ser 95A
7.375%, 9/01/26 23,000 24,333,540
NR Encinitas Rec Rev
(Encinitas Ranch Golf
Course)
Ser 96A
7.75%, 9/01/26 10,760 11,393,118
NR Fairfield Assess Dist
(No Cordelia Imp Dist)
Ser 93
7.375%, 9/02/18 2,380 2,455,113
NR Fontana Comm Fac Dist #3
(Hunters Ridge)
Ser 90A
8.70%, 10/01/15 8,000 8,383,920
AAA Fresno Comm
Fac Dist #3 (Palm Bluffs)
Ser 98
4.75%, 9/01/05 8,000 8,003,280
AAA Los Angeles Cnty Arpt Rev
(Ontario Int'l Arpt)
FGIC Ser 96A AMT
6.00%, 5/15/22 12,780 13,499,514
17
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
NR Los Angeles Cnty Comm
Fac Dist #3 (Valencia/
Newhall Area) Ser 95A
7.125%, 9/01/20 $ 5,500 $ 5,779,950
NR Los Angeles Cnty Comm
Fac Dist #4 (Calabasas
Area) Ser 92A
7.65%, 9/01/17 7,500 7,867,350
NR Los Angeles Cnty Comm
Fac Dist #92-1 (Castaic
Union SD/Northlake Proj)
Ser 92
9.00%, 10/01/19 7,160 7,562,750
BB Los Angeles Comm Redev
MFHR (Grand Ctrl Proj)
Ser 93A AMT
5.85%, 12/01/26 4,030 3,974,708
AAA Los Angeles Harbor Rev
MBIA Ser 96B AMT
6.20%, 8/01/25 10,000 10,720,800
AA Los Angeles Harbor Rev
Ser 95B AMT
6.625%, 8/01/25 24,000 26,004,000
A- No Calif Pwr Agy
Elec Rev (Hydroelec
Proj #1) Ser 85
7.15%, 7/01/24 3,555 3,641,600
NR Novato Comm
Fac Dist #94-1
(Hamilton Field) Ser 95
7.375%, 9/01/25 10,370 10,778,889
AAA Orange Cnty Arpt Rev
(John Wayne Int'l)
MBIA Ser 93 AMT
5.50%, 7/01/18 4,500 4,549,995
NR Orange Cnty Comm
Fac Dist # 92-1: (Las Flores/
Capistrano USD) Ser 97
7.10%, 9/01/21 3,200 3,393,952
BBB- Orange Cnty Sr Lien
Foothill/Eastern Corridor
Agy Ser 95A
Zero coupon, 1/01/15 18,500 7,433,300
Zero coupon, 1/01/25 15,000 3,441,300
Zero coupon, 1/01/27 10,000 2,054,200
Zero coupon, 1/01/28 10,000 1,943,900
AAA** Orange Cnty Sr Lien
San Joaquin Hills Transp
Corridor
Ser 93 ETM
Zero coupon, 1/01/17 16,000 6,196,480
Zero coupon, 1/01/19 20,000 6,898,600
Zero coupon, 1/01/20 20,000 6,524,600
Zero coupon, 1/01/21 20,000 6,195,600
Zero coupon, 1/01/23 35,000 9,660,000
Zero coupon, 1/01/25 18,100 4,500,203
Pre-refunded
7.00%, 1/01/03 13,400 15,100,192
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 10,000 2,866,800
AAA Palm Springs Fin Auth
Arpt Rev
(Palm Springs Regional Arpt)
MBIA Ser 92 AMT
6.00%, 1/01/22 6,860 7,138,928
A- Port of Oakland
(Mitsui OSK Lines)
Ser 92A AMT
6.80%, 1/01/19 3,700 3,933,803
AAA Port of Oakland
MBIA Ser 92E AMT
6.40%, 11/01/22 23,370 25,231,654
6.50%, 11/01/16 8,000 8,686,160
NR Riverside Cnty Assess
Dist #161
(Winchester Prop)
Ser 94C
10.00%, 9/02/14 6,825 7,388,336
NR Riverside Comm
Fac Dist #90-1
(Highlander Proj) Ser 91A
8.50%, 9/01/15 2,000 2,088,760
AAA Sacramento Cnty
Arpt Sys Rev
FGIC Ser 92A AMT
6.00%, 7/01/20 11,750 12,231,397
AAA Sacramento Cnty
Arpt Sys Rev
MBIA Ser 96A AMT
5.90%, 7/01/24 5,050 5,301,339
18
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
NR Sacramento Comm
Fac Dist # 97-01
(No Natomas Proj)
Ser 97A
6.70%, 9/01/17 $ 6,805 $ 6,903,400
6.75%, 9/01/27 9,370 9,512,331
NR San Bernardino Cnty
MFHR (Casa Del Rio Apts)
Ser 98A AMT
4.375%, 4/01/31 5,330 5,341,619
AAA San Bernardino Cnty
Solid Waste
(Inland Empire) FSA
Ser 96B AMT
6.00%, 8/01/16 2,500 2,644,775
NR San Diego Comm
Fac Dist #1
(Miramar Ranch North)
Ser 95B
7.10%, 9/01/20 7,000 7,496,440
AAA San Francisco City & Cnty
Int'l Arpt
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24 5,000 5,481,250
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24 11,000 12,032,460
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 96-II AMT
6.25%, 5/01/26 7,000 7,491,890
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 10A AMT
5.70%, 5/01/26 9,385 9,629,198
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93 II-3 AMT
6.10%, 5/01/13 5,390 5,755,334
6.20%, 5/01/20 14,500 15,446,705
AAA San Jose Arpt Rev
(San Jose Arpt)
FGIC Ser 93 AMT
5.70%, 3/01/18 8,825 9,120,990
AAA So Calif HFA
SFMR GNMA/FNMA
Ser 91B AMT
6.90%, 10/01/24 1,620 1,716,374
AAA So Calif HFA
SFMR GNMA/FNMA
Ser 92A AMT
6.75%, 9/01/22 1,370 1,452,871
BBB+ Westminster Redev Agy
MFHR (Rose Garden Apt)
Ser 93A AMT
6.75%, 8/01/24 4,300 4,520,934
AAA Yolo Cnty Hsg Auth
MFHR (Waggener Ranch
Apts)
FHA Ser 91 AMT
7.00%, 10/01/33 9,000 9,759,600
TOTAL LONG TERM MUNICIPAL BONDS
(cost $641,398,745) 701,379,406
SHORT TERM MUNICIPAL NOTES-7.6%
A-2 Assoc Bay Area Gov't IDR
(Reliance Tech Service Inc)
Ser 95A AMT VRDN
4.75%, 10/01/19 (b) 5,305 5,305,000
VMIG-1* California Poll Ctl
Fin Auth
PCR (Taormina Inds Inc)
Ser 96A AMT VRDN
4.50%, 8/01/16 (b) 7,500 7,500,000
A-2 Contra Costa Cnty
MFHR (Park Regency
Ptnrs)
Ser 92A AMT VRDN
4.95%, 8/01/32 (b) 17,600 17,600,000
A-1 Long Beach Res Rec Rev
(Southeast Fac Auth
Lease Rev)
Ser 95A VRDN
4.85%, 12/01/18 (b) 10,100 10,100,000
A-1 Long Beach Res Rec Rev
(Southeast Fac Auth
Lease Rev)
Ser 95B VRDN
4.95%, 12/01/18 (b) 3,300 3,300,000
19
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
VMIG-1* Los Angeles Cnty HFA
MFHR (Sand Canyon
Villas Proj)
Ser 89A AMT VRDN
4.70%, 11/01/09 (b) $ 7,800 $ 7,800,000
A-2 Ontario Redev Agy
MFHR (Vineyard Village
Proj)
Ser 97A AMT VRDN
5.00%, 9/01/27 (b) 1,400 1,400,000
A-2 Simi Valley HFA
MFHR (Lincoln Wood
Ranch)
Ser 90 VRDN
4.50%, 6/01/10 (b) 6,000 6,000,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $59,005,000) 59,005,000
TOTAL INVESTMENTS-98.4%
(cost $700,403,745) 760,384,406
Other assets less liabilities-1.6% 12,096,070
NET ASSETS-100% $ 772,480,476
See footnote summary on page 22.
See Glossary of Terms on page 22.
See notes to financial statements.
20
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-97.2%
LONG TERM MUNICIPAL BONDS-82.4%
AAA Alhambra COP
Assess Dist #91-1 (Police Fac)
AMBAC Ser 92
6.75%, 9/01/23 $ 5,000 $ 5,403,550
AAA Brea Pub Fin Auth
Tax Alloc Redev Proj B
MBIA Ser 91A
7.00%, 8/01/15 1,470 1,606,798
AAA California HFA
MFHR (Home Mtg Rev)
AMBAC Ser 95A
6.25%, 2/01/37 5,000 5,314,200
AAA Coronado Comm Dev Proj
Tax Alloc
FSA Ser 96
6.00%, 9/01/26 8,700 9,314,394
AAA Fontana Pub Fin Auth
Tax Alloc (No Fontana)
MBIA Ser 93A
5.625%, 9/01/24 8,805 9,018,609
AAA Glendale Hlth Fac Rev
(Glendale Mem Hosp)
CONNIE LEE Ser 95A
5.60%, 11/15/25 2,000 2,022,020
AAA La Mirada Redev Agy
Tax Alloc (Commercial Redev)
FSA Ser 95B
5.90%, 8/15/24 5,000 5,250,800
Aa* Lancaster Redev Agy FHA
MFHR (High Valley Apts)
Ser 96A
6.00%, 6/01/27 4,170 4,344,348
AAA Los Angeles Cnty
Metro Trans Auth
MBIA Ser 93A
5.625%, 7/01/18 3,000 3,082,350
AAA Los Angeles Cnty
Comm Redev
Tax Alloc (Bunker Hill Proj)
FSA Ser 93H
5.60%, 12/01/28 9,000 9,160,560
AAA Los Angeles Cnty
Trans Comm
FGIC Ser 91B
6.50%, 7/01/15 5,000 5,368,450
AAA Madera Cnty COP
Hosp Rev (Valley Children's Hosp)
MBIA Ser 95
6.125%, 3/15/23 4,000 4,451,280
AAA Mojave Wtr Agy Imp Dist M
(Morongo Basin Pipeline)
FGIC Ser 96
5.80%, 9/01/22 5,000 5,257,250
AAA No Calif Trans Agy
Elec Rev
(Calif-Oregon Trans)
MBIA Ser 93A
6.814%, 4/29/24 (a) 7,650 7,868,790
AAA Orange Cnty COP
(Loma Ridge Data Ctr Proj)
AMBAC
6.00%, 6/01/19 1,000 1,078,860
AAA Orange Cnty Recovery
MBIA Ser 96A
6.00%, 7/01/26 3,000 3,209,250
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 17,475 5,009,733
AAA Rancho Wtr Dist Fin Auth
AMBAC Ser 91
Pre-refunded
9.174%, 9/11/01 (a) 3,000 3,508,290
AAA Redding COP
Elec Sys Rev
MBIA Ser 92A
8.60%, 7/01/22 (a) 2,000 2,615,600
AAA Sacramento Cnty Arpt
Sys Rev
MBIA Ser 96B
5.75%, 7/01/26 3,260 3,397,213
AAA Sacramento Muni Util Dist
Elec Rev
MBIA Ser 93E
5.75%, 5/15/22 5,000 5,186,850
AAA San Bernardino Cnty Redev
(Ontario Proj #1)
MBIA Ser 93
5.80%, 8/01/23 10,000 10,406,100
AAA San Bernardino Redev Agy
Tax Alloc (Joint Pwr Fin)
FSA Ser 95A
5.75%, 10/01/25 5,000 5,198,450
AAA San Dimas Redev Agy
(Creative Growth)
FSA Ser 91A
6.75%, 9/01/16 1,000 1,080,710
21
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------------
AAA San Francisco City &
Cnty Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14 $ 5,000 $ 5,351,500
AAA Shasta Lake
Elec Sys Rev
FSA Ser 96-2
6.00%, 4/01/16 2,895 3,087,981
TOTAL LONG TERM MUNICIPAL BONDS
(cost $117,834,161) 126,593,936
SHORT TERM MUNICIPAL NOTES-14.8%
A-1 California Comm Hlth Fac
(Sutter Hlth)
AMBAC Ser 95 VRDN
4.20%, 7/01/15 (b) 1,600 1,600,000
A-1+ California Hlth Fac
(Catholic Hlthcare)
MBIA Ser 95D VRDN
4.25%, 7/01/18 (b) 3,000 3,000,000
A-1 Long Beach Res Rec Rev
(Southeast Fac Auth
Lease Rev)
Ser 95A VRDN
4.85%, 12/01/18 (b) 4,800 4,800,000
VMIG-1* Los Angeles Cnty Comm
Redev Agy
MFHR (Skyline at
Southpark)
Ser 85 VRDN
4.65%, 12/01/05 (b) 2,950 2,950,000
A-2 San Bernardino Cnty
MFHR (Alta Park Apts)
Ser 89A VRDN
4.50%, 5/01/06 (b) 5,145 5,145,000
A-2 Simi Valley Hsg Auth
MFHR (Lincoln Wood
Ranch)
Ser 90 VRDN
4.50%, 6/01/10 (b) 3,300 3,300,000
A-1+ Westminster Redev Agy
Tax Alloc (Westminster
Comm Redev Proj #1)
AMBAC Ser 97 VRDN
3.95%, 8/01/27 (b) 2,000 2,000,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $22,795,000) 22,795,000
TOTAL INVESTMENTS-97.2%
(cost $140,629,161) 149,388,936
Other assets less liabilities-2.8% 4,264,264
NET ASSETS-100% $ 153,653,200
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax - (subject to)
CAP MAC Capital Markets Assurance Corporation
CONNIE LEE Connie Lee Insurance Company
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Incorporated
GNMA Government National Mortgage Association
GO Government Obligation
HDA Housing Development Authority
HFA Housing Finance Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
PFC Passenger Facilities Charge
SFMR Single Family Mortgage Revenue
22
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
---------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value
(cost: National-$620,338,276; Ins.
National-$221,502,733;
New York-$302,272,796;
California-$700,403,745;
Ins. California-$140,629,161) $640,711,082 $232,262,176 $325,105,907 $760,384,406 $149,388,936
Cash 354,189 -0- -0- 167,390 -0-
Interest receivable 8,664,066 2,623,449 4,813,972 12,761,612 1,985,589
Receivable for investment
securities sold 1,479,449 4,401,483 -0- 5,615,385 2,800,000
Receivable for capital
stock sold 875,823 200,982 273,896 3,921,338 123,197
Prepaid expenses 45,546 13,167 15,903 35,655 7,099
Total assets 652,130,155 239,501,257 330,209,678 782,885,786 154,304,821
LIABILITIES
Due to custodian -0- 6,001 114,870 -0- 87,834
Unclaimed dividends 78,007 -0- -0- 90,989 90,989
Payable for investment
securities purchased 17,269,527 -0- -0- 8,001,056 -0-
Dividends payable 875,867 285,552 442,860 1,066,999 187,126
Payable for capital
stock redeemed 501,782 93,227 259,675 559,568 65,895
Distribution fee payable 315,798 96,078 161,704 352,070 63,492
Advisory fee payable 103,575 98,046 40,885 189,806 69,901
Accrued expenses 101,200 74,425 100,827 144,822 86,384
Total liabilities 19,245,756 653,329 1,120,821 10,405,310 651,621
NET ASSETS $632,884,399 $238,847,928 $329,088,857 $772,480,476 $153,653,200
COMPOSITION OF NET ASSETS
Capital stock, at par $ 57,951 $ 23,067 $ 32,475 $ 69,638 $ 11,033
Additional paid-in capital 611,554,590 226,137,768 310,386,949 724,181,221 145,437,663
Distributions in excess of net
investment income (1,175,497) (1,130,560) (779,404) (698,822) (221,624)
Accumulated net realized gain (loss)
on investment transactions 2,074,549 3,058,210 (3,384,274) (11,052,222) (333,647)
Net unrealized appreciation
of investments 20,372,806 10,759,443 22,833,111 59,980,661 8,759,775
$632,884,399 $238,847,928 $329,088,857 $772,480,476 $153,653,200
CLASS A SHARES
Net assets $354,717,199 $174,112,705 $191,497,485 $489,043,723 $109,745,272
Shares of capital stock outstanding 32,475,446 16,812,721 18,897,727 44,085,269 7,880,731
CLASS B SHARES
Net assets $184,889,181 $ 45,749,772 $102,354,885 $179,756,743 $ 29,996,404
Shares of capital stock outstanding 16,932,656 4,419,818 10,100,492 16,205,535 2,153,689
CLASS C SHARES
Net assets $ 93,278,019 $ 18,985,451 $ 35,236,487 $103,680,010 $ 13,911,524
Shares of capital stock outstanding 8,543,124 1,834,046 3,477,074 9,346,702 998,847
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price
per share $10.92 $10.36 $10.13 $11.09 $13.93
Sales charge--4.25% of public
offering price .48 .46 .45 .49 .62
Maximum offering price $11.40 $10.82 $10.58 $11.58 $14.55
CLASS B SHARES
Net asset value and offering price
per share $10.92 $10.35 $10.13 $11.09 $13.93
CLASS C SHARES
Net asset value and offering price
per share $10.92 $10.35 $10.13 $11.09 $13.93
</TABLE>
23
See notes to financial statements.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 17,700,565 $ 6,276,686 $ 9,322,337 $ 21,861,671 $ 4,236,696
EXPENSES
Advisory fee 1,930,223 717,525 1,013,843 2,344,314 411,642
Distribution fee - Class A 508,905 260,416 282,442 719,904 160,421
Distribution fee - Class B 937,226 224,858 499,359 868,058 145,235
Distribution fee - Class C 454,781 94,193 181,315 483,166 68,468
Transfer agency 222,188 72,295 103,952 206,726 33,099
Custodian 68,910 50,748 39,044 72,635 44,863
Administrative 47,750 47,750 47,750 47,750 47,750
Registration 35,939 27,064 2,717 4,395 2,232
Audit and legal 30,746 17,627 36,235 35,251 8,653
Printing 28,198 6,619 17,672 42,056 7,211
Taxes 13,177 5,602 7,347 16,470 4,328
Directors' fees 3,667 3,667 3,667 3,667 3,667
Miscellaneous 957 1,735 750 5,153 2,552
Total expenses 4,282,667 1,530,099 2,236,093 4,849,545 940,121
Less advisory fee waived
(see note B) (1,312,552) (123,973) (770,521) (1,219,043) -0-
Net expenses 2,970,115 1,406,126 1,465,572 3,630,502 940,121
Net investment income 14,730,450 4,870,560 7,856,765 18,231,169 3,296,575
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investment
transactions 5,810,377 3,187,668 188,313 1,542,996 -0-
Net change in unrealized appreciation
of investments (6,158,602) (938,601) 1,032,765 2,097,106 674,081
Net gain (loss) on investments (348,225) 2,249,067 1,221,078 3,640,102 674,081
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 14,382,225 $ 7,119,627 $ 9,077,843 $ 21,871,271 $ 3,970,656
</TABLE>
See notes to financial statements.
24
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
NATIONAL INSURED NATIONAL
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS
Net investment income $ 14,730,450 $ 31,030,710 $ 4,870,560 $ 10,880,671
Net realized gain on
investment transactions 5,810,377 14,826,601 3,187,668 4,944,358
Net change in unrealized
appreciation of
investments (6,158,602) 9,340,351 (938,601) 3,352,744
Net increase in net assets
from operations 14,382,225 55,197,662 7,119,627 19,177,773
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (8,946,710) (17,434,356) (4,294,283) (8,055,946)
Class B (4,345,555) (9,363,672) (969,021) (1,989,680)
Class C (2,117,071) (4,232,682) (406,452) (835,045)
Distributions in excess
of net investment
income
Class A -0- (108,116) -0- (357,318)
Class B -0- (167,843) -0- (141,497)
Class C -0- (83,616) -0- (54,455)
Net realized gain
on investments
Class A -0- -0- (3,321,194) (2,137,301)
Class B -0- -0- (878,060) (675,181)
Class C -0- -0- (370,918) (283,681)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 24,049,145 (50,361,494) 6,737,239 (4,760,384)
Total increase (decrease) 23,022,034 (26,554,117) 3,616,938 (112,715)
NET ASSETS
Beginning of year 609,862,365 636,416,482 235,230,990 235,343,705
End of period $632,884,399 $609,862,365 $238,847,928 $235,230,990
</TABLE>
See notes to financial statements.
25
STATEMENTS OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
----------------- -----------------
INCREASE IN NET
ASSETS FROM OPERATIONS
Net investment income $ 7,856,765 $ 15,977,835
Net realized gain on
investment transactions 188,313 ,174,320
Net change in unrealized
appreciation of investments 1,032,765 9,967,051
Net increase in net assets
from operations 9,077,843 30,119,206
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (5,047,010) (9,716,748)
Class B (2,326,334) (4,491,417)
Class C (843,705) (1,769,670)
Distributions in excess of net
investment income
Class A -0- (212,191)
Class B -0- (93,630)
Class C -0- (39,023)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 11,473,501 (8,015,166)
Total increase 12,334,295 5,781,361
NET ASSETS
Beginning of year 316,754,562 310,973,201
End of period $ 329,088,857 $ 316,754,562
See notes to financial statements.
26
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
CALIFORNIA INSURED CALIFORNIA
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment income $ 18,231,169 $ 36,702,496 $ 3,296,575 $ 6,928,892
Net realized gain on
investment transactions 1,542,996 5,003,142 -0- 1,740,386
Net change in unrealized
appreciation of
investments 2,097,106 24,720,704 674,081 3,440,458
Net increase in net assets
from operations 21,871,271 66,426,342 3,970,656 12,109,736
DIVIDENDS TO SHAREHOLDERS
FROM:
Net investment income
Class A (12,612,712) (24,763,762) (2,706,981) (5,193,881)
Class B (3,961,577) (7,675,192) (630,499) (1,166,553)
Class C (2,203,483) (4,263,542) (297,087) (567,563)
Distributions in excess
of net investment
income
Class A -0- (117,642) -0- (38,493)
Class B -0- (23,966) -0- (254)
Class C -0- (10,658) -0- -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 41,528,615 (17,969,648) 8,257,886 (1,148,149)
Total increase 44,622,114 11,601,932 8,593,975 3,994,843
NET ASSETS
Beginning of year 727,858,362 716,256,430 145,059,225 141,064,382
End of period (including
undistributed net
investment income
of $116,368 for the
Insured California
Portfolio at
October 31, 1997) $772,480,476 $727,858,362 $153,653,200 $145,059,225
</TABLE>
See notes to financial statements.
27
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund, which is a Maryland corporation, operates as a series
company currently comprised of five portfolios: National Portfolio, Insured
National Portfolio, New York Portfolio, California Portfolio and Insured
California Portfolio (the "Portfolios"). Each series is considered to be a
separate entity for financial reporting and tax purposes. Each Portfolio offers
three classes of shares: Class A, Class B and Class C Shares. Class A shares
are sold with a front-end sales charge of up to 4.25% 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 3% to zero depending on
the period of time the shares are held. Class B shares will automatically
convert to Class A shares six years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. All three classes
of shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The 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 are generally
valued at the last reported sale price or if there was no sale on such day, the
last bid price quoted on such day. If no bid prices are quoted, then the
security is valued at the mean of the bid and asked prices as obtained on that
day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market are valued at the mean of the
closing bid and asked prices provided by two or more dealers regularly making a
market in such securities. U.S. government securities and other debt securities
which mature in 60 days or less are valued at amortized cost unless this method
does not represent fair value. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by, or
in accordance with procedures approved by, the Board of Directors. Fixed income
securities may be valued on the basis of prices provided by a pricing service
when such prices are believed to reflect the fair market value of such
securities.
2. TAXES
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. The Fund amortizes premiums and
accretes original issue discounts and market discounts as adjustments to
interest income. Investment gains and losses are determined on the identified
cost basis.
The New York, Insured California and California Portfolios follow an investment
policy of investing primarily in municipal obligations of one state. Economic
changes affecting the state and certain of its public bodies and municipalities
may affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Portfolios.
4. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
28
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences, do not require
such reclassification.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the National, New York and
California Portfolios pay Alliance Capital Management L.P. (the "Adviser") an
advisory fee at an annual rate of up to .625 of 1% of each Portfolio's average
daily net assets. For the Insured National Portfolio, the Agreement provides
for a fee at an annual rate of up to .625 of 1% of the first $200 million, .50
of 1% of the next $200 million and .45 of 1% in excess of $400 million of its
average daily net assets. For the Insured California Portfolio, the Agreement
provides for a fee at an annual rate of up to .55 of 1% of the first $200
million, .50 of 1% of the next $200 million and .45 of 1% in excess of $400
million of its average daily net assets. Such fees are accrued daily and paid
monthly.
For the six months ended April 30, 1998, the Adviser voluntarily agreed to
waive part of its advisory fee for the National, Insured National, New York and
California Portfolios. The aggregate amounts of such fee waivers were: National
Portfolio, $1,312,552; Insured National Portfolio, $123,973; New York
Portfolio, $770,521; and California Portfolio, $1,219,043. Pursuant to the
advisory agreement, the Fund paid $238,750 to the Adviser representing the cost
of certain legal and accounting services provided to each Portfolio by the
Adviser.
Each Portfolio 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 each
Portfolio. Such compensation amounted to: National Portfolio, $183,363; Insured
National Portfolio, $48,256; New York Portfolio, $88,167; California Portfolio,
$141,784 and Insured California Portfolio, $22,908 for the six months ended
April 30, 1998.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The amount of
front-end sales charges received by the Distributor from sales of the
respective Portfolio's Class A shares for the six months ended April 30, 1998
were: National Portfolio, $43,665; Insured National Portfolio, $9,736; New York
Portfolio, $14,583; and California Portfolio, $36,318. The amount of contingent
deferred sales charge imposed upon redemptions by shareholders of Class A
shares were National Portfolio, $334; New York, $8,894; and Insured California,
$21,363. Insured National Portfolio and California Portfolio had no contingent
deferred sales charges. The amount of contingent deferred sales charges imposed
upon redemptions by shareholders of Class B shares were: National Portfolio,
$67,185; Insured National Portfolio, $18,601; New York Portfolio, $54,180;
California Portfolio, $52,239; and Insured California Portfolio, $7,562. The
amount of contingent deferred sales charges imposed upon redemptions by
shareholders of Class C shares were:National Portfolio, $11,407; Insured
National Portfolio, $2,395; New York Portfolio, $8,863; California Portfolio,
$19,700; and Insured California, $1,538.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays a distribution fee to the Distributor at an
annual rate of up to .30 of 1% of each Portfolio's average daily net assets
attributable to the Class A shares and 1% of each Portfolio's average daily net
assets attributable to both Class B and Class C 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 incurred expenses in excess of the distribution
costs reimbursed by each Portfolio as follows:
29
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
PORTFOLIO CLASS B CLASS C
- ---------- ----------- -----------
National $3,192,334 $2,798,526
Insured National 1,798,429 924,844
New York 3,278,847 1,317,391
California 4,667,862 2,566,851
Insured California 1,579,797 636,122
Such costs may be recovered from each Portfolio in future periods so long as
the Agreement is in effect. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs incurred by the
Distributor beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of each Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the six months ended April 30, 1998 were as
follows:
PORTFOLIO PURCHASES SALES
- --------- ------------ -------------
National $101,565,731 $145,918,528
Insured National 10,202,704 44,918,489
New York 12,432,675 13,034,832
California 45,251,085 41,163,296
Insured California -0- 5,000,000
There were no purchases or sales of U.S. government and government agency
obligations for the six months ended April 30, 1998.
At April 30, 1998, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows:
GROSS UNREALIZED NET
----------------------------- UNREALIZED
TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
------------ ------------ -------------- ------------
National $620,370,668 $21,981,008 $(1,640,594) $20,340,414
Insured National 221,502,733 10,759,443 -0- 10,759,443
New York 302,293,895 25,025,024 (2,213,012) 22,812,012
California 700,403,745 60,247,785 (267,124) 59,980,661
Insured California 140,629,161 8,759,775 -0- 8,759,775
NOTE E: TAXES
For Federal income tax purposes at October 31, 1997, the Fund had capital loss
carryforwards for the following Portfolios: $3,702,936 expiring in 2003 for the
National Portfolio; $3,551,488 expiring in 2003 for the New York Portfolio;
$10,543,156 expiring in 2003 and $2,052,062 expiring in 2004 for the California
Portfolio; and $333,647 expiring in 2002 for the Insured California Portfolio.
30
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 3,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 200,000,000 authorized shares. Transactions in capital
stock were as follows:
NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 4,177,227 3,200,221 $ 46,045,070 $ 34,152,888
Shares issued in
reinvestment of
dividends and
distributions 475,883 965,819 5,242,640 10,298,158
Shares converted
from Class B 496,442 966,203 5,425,249 10,317,831
Shares redeemed (2,810,094) (5,936,090) (30,921,299) (63,228,325)
Net increase
(decrease) 2,339,458 (803,847) $ 25,791,660 $ (8,459,448)
CLASS B
Shares sold 1,439,783 2,028,317 $ 15,859,744 $ 21,665,451
Shares issued in
reinvestment of
dividends and
distributions 271,711 595,412 2,992,239 6,345,911
Shares converted
to Class A (496,442) (966,312) (5,425,249) (10,317,831)
Shares redeemed (1,706,212) (4,683,031) (18,825,989) (49,816,107)
Net decrease (491,160) (3,025,614) $ (5,399,255) $(32,122,576)
CLASS C
Shares sold 929,155 1,388,588 $ 10,235,612 $ 14,824,288
Shares issued in
reinvestment of
dividends and
distributions 200,184 388,719 2,202,238 4,147,274
Shares redeemed (797,561) (2,709,926) (8,781,110) (28,751,032)
Net increase
(decrease) 331,778 (932,619) $ 3,656,740 $ (9,779,470)
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 738,220 1,963,755 $ 7,685,841 $ 20,121,552
Shares issued
in reinvestment
of dividends and
distributions 477,092 606,956 4,956,609 6,193,387
Shares converted
from Class B 54,965 72,137 575,232 741,691
Shares redeemed (716,855) (1,983,414) (7,487,195) (20,244,010)
Net increase 553,422 659,434 $ 5,730,487 $ 6,812,620
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS B
Shares sold 381,600 445,318 $ 3,984,111 $ 4,550,886
Shares issued in
reinvestment of
dividends and
distributions 133,540 189,204 1,386,595 1,928,668
Shares converted
to Class A (54,965) (72,158) (575,232) (741,691)
Shares redeemed (380,066) (1,295,176) (3,973,889) (13,217,186)
Net increase
(decrease) 80,109 (732,812) $ 821,585 $ (7,479,323)
CLASS C
Shares sold 79,619 607,973 $ 832,164 $ 6,236,279
Shares issued in
reinvestment of
dividends and
distributions 80,432 100,042 835,566 1,023,363
Shares redeemed (141,954) (1,106,023) (1,482,563) (11,353,323)
Net increase
(decrease) 18,097 (398,008) $ 185,167 $ (4,093,681)
NEW YORK PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 1,828,501 1,656,405 $ 18,618,783 $ 16,287,832
Shares issued in
reinvestment of
dividends and
distributions 307,059 622,430 3,137,296 6,108,602
Shares converted
from Class B 34,994 68,401 394,315 672,992
Shares redeemed (1,261,624) (2,933,918) (12,886,005) (28,752,201)
Net increase
(decrease) 908,930 (586,682) $ 9,264,389 $ (5,682,775)
CLASS B
Shares sold 1,370,361 1,571,739 $ 13,996,727 $ 15,455,527
Shares issued in
reinvestment of
dividends and
distributions 171,805 335,027 1,754,308 3,289,276
Shares converted
to Class A (34,994) (68,401) (394,315) (672,992)
Shares redeemed (920,309) (2,361,128) (9,362,577) (23,120,896)
Net increase
(decrease) 586,863 (522,763) $ 5,994,143 $ (5,049,085)
32
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS C
Shares sold 533,988 1,428,234 $ 5,458,149 $ 14,035,181
Shares issued in
reinvestment of
dividends and
distributions 96,146 199,225 980,350 1,958,524
Shares redeemed (1,002,354) (1,355,750) (10,223,530) (13,277,011)
Net increase
(decrease) (372,220) 271,709 $ (3,785,031) $ 2,716,694
CALIFORNIA PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 3,681,286 3,738,289 $ 41,044,417 $ 40,219,966
Shares issued in
reinvestment of
dividends and
distributions 585,305 1,166,476 6,537,355 12,506,829
Shares converted
from Class B 40,164 142,469 499,577 1,524,654
Shares redeemed (2,825,766) (5,919,965) (31,564,040) (63,313,282)
Net increase
(decrease) 1,480,989 (872,731) $ 16,517,309 $ (9,061,833)
CLASS B
Shares sold 1,945,094 2,222,122 $ 22,442,150 $ 23,864,126
Shares issued
in reinvestment of
dividends and
distributions 306,021 443,701 2,696,822 4,759,751
Shares converted
to Class A (40,164) (142,456) (499,577) (1,524,654)
Shares redeemed (1,099,566) (2,999,262) (12,236,868) (32,131,158)
Net increase
(decrease) 1,111,385 (475,895) $ 12,402,527 $ (5,031,935)
CLASS C
Shares sold 1,714,258 1,575,361 $ 19,157,162 $ 16,866,778
Shares issued in
reinvestment of
dividends and
distributions 207,349 377,469 2,312,518 4,052,166
Shares redeemed (792,672) (2,319,763) (8,860,901) (24,794,824)
Net increase
(decrease) 1,128,935 (366,933) $ 12,608,779 $ (3,875,880)
33
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED CALIFORNIA PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 865,292 579,093 $ 12,160,335 $ 7,766,679
Shares issued
in reinvestment of
dividends and
distributions 98,453 194,618 1,382,380 2,638,958
shares converted
from Class B 5 12,441 72 170,252
Shares redeemed (547,181) (903,548) (7,669,007) (12,186,021)
Net increase
(decrease) 416,569 (117,396) $ 5,873,780 $ (1,610,132)
CLASS B
Shares sold 208,655 362,181 $ 2,922,406 $ 4,900,540
Shares issued
in reinvestment of
dividends and
distributions 28,947 62,833 406,217 852,376
Shares converted
to Class A (5) (12,440) (72) (170,252)
Shares redeemed (98,625) (391,053) (1,381,047) (5,261,290)
Net increase 138,972 21,521 $ 1,947,504 $ 321,374
CLASS C
Shares sold 109,763 145,518 $ 1,539,825 $ 1,971,410
Shares issued in
reinvestment of
dividends 20,612 35,557 289,103 482,604
Shares redeemed (99,113) (171,093) (1,392,326) (2,313,405)
Net increase 31,262 9,982 $ 436,602 $ 140,609
34
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.94 $10.51 $10.45 $ 9.41 $11.05 $10.19
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .28(b) .57(b) .58 .58 .57 .61
Net realized and unrealized gain (loss)
on investment transactions (.01) .44 .06 1.04 (1.37) .88
Net increase (decrease) in net asset
value from operations .27 1.01 .64 1.62 (.80) 1.49
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.58) (.58) (.57) (.62)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) -0-
Distributions from net realized gains -0- -0- -0- -0- (.24) (.01)
Total dividends and distributions (.29) (.58) (.58) (.58) (.84) (.63)
Net asset value, end of period $10.92 $10.94 $10.51 $10.45 $ 9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value (c) 2.47% 9.88% 6.32% 17.73% (7.65)% 14.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $354,717 $329,540 $325,288 $338,311 $338,814 $386,484
Ratios to average net assets of:
Expenses, net of fee waivers .64%(d) .69% .69% .71% .62% .65%
Expenses, before fee waivers 1.08%(d) 1.11% 1.10% 1.09% 1.09% 1.08%
Net investment income, net of fee waivers 5.04%(d) 5.40% 5.55% 5.84% 5.61% 5.69%
Portfolio turnover rate 20% 72% 137% 118% 110% 233%
</TABLE>
See footnote summary on page 49.
35
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.94 $10.51 $10.45 $ 9.41 $11.05 $10.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24(b) .50(b) .51 .51 .50 .44
Net realized and unrealized gain (loss)
on investment transactions (.01) .44 .06 1.04 (1.38) .63
Net increase (decrease) in net asset
value from operations .23 .94 .57 1.55 (.88) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.50) (.51) (.51) (.50) (.45)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- -0- -0- (.24) -0-
Total dividends and distributions (.25) (.51) (.51) (.51) (.76) (.45)
Net asset value, end of period $10.92 $10.94 $10.51 $10.45 $ 9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value (c) 2.15% 9.16% 5.61% 16.91% (8.34)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $184,889 $190,530 $214,994 $252,357 $250,391 $216,489
Ratios to average net assets of:
Expenses, net of fee waivers 1.35%(d) 1.40% 1.40% 1.42% 1.32% 1.36%(d)
Expenses, before fee waivers 1.76%(d) 1.79% 1.81% 1.80% 1.80% 1.78%(d)
Net investment income, net of fee waivers 4.34%(d) 4.69% 4.85% 5.13% 4.91% 4.59%(d)
Portfolio turnover rate 20% 72% 137% 118% 110% 233%
</TABLE>
See footnote summary on page 49.
36
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.94 $10.51 $10.45 $ 9.41 $11.05 $10.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24(b) .50(b) .51 .51 .50 .26
Net realized and unrealized gain (loss)
on investment transactions (.01) .44 .06 1.04 (1.38) .36
Net increase (decrease) in net asset
value from operations .23 .94 .57 1.55 (.88) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.50) (.51) (.51) (.50) (.27)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- -0- -0- (.24) -0-
Total dividends and distributions (.25) (.51) (.51) (.51) (.76) (.27)
Net asset value, end of period $10.92 $10.94 $10.51 $10.45 $9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value (c) 2.15% 9.18% 5.62% 16.93% (8.33)% 5.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $93,278 $89,792 $96,134 $108,068 $133,249 $150,953
Ratios to average net assets of:
Expenses, net of fee waivers 1.33%(d) 1.39% 1.39% 1.41% 1.31% 1.36%(d)
Expenses, before fee waivers 1.77%(d) 1.81% 1.80% 1.78% 1.79% 1.78%(d)
Net investment income, net of fee waivers 4.35%(d) 4.70% 4.85% 5.16% 4.89% 4.17%(d)
Portfolio turnover rate 20% 72% 137% 118% 110% 233%
</TABLE>
See footnote summary on page 49.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.49 $10.28 $10.07 $ 8.96 $10.76 $ 9.87
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .22(b) .50(b) .51 .51 .53 .56
Net realized and unrealized gain (loss)
on investment transactions .11 .37 .22 1.13 (1.40) .96
Net increase (decrease) in net asset
value from operations .33 .87 .73 1.64 (.87) 1.52
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.26) (.50) (.52) (.51) (.53) (.57)
Distributions in excess of net
investment income -0- (.02) -0- (.02) (.01) -0-
Distributions from net realized gains (.20) (.14) -0- -0- (.39) (.06)
Total dividends and distributions (.46) (.66) (.52) (.53) (.93) (.63)
Net asset value, end of period $10.36 $10.49 $10.28 $10.07 $8.96 $10.76
TOTAL RETURN
Total investment return based on net
asset value (c) 3.21% 8.77% 7.43% 18.72% (8.69)% 15.82%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $174,113 $170,631 $160,425 $165,548 $153,656 $185,876
Ratios to average net assets of:
Expenses, net of fee waivers .99%(d) 1.02% 1.02% 1.01% .66% .73%
Expenses, before fee waivers 1.10%(d) 1.15% 1.12% 1.12% 1.11% 1.11%
Net investment income, net of fee waivers 4.30%(d) 4.85% 5.04% 5.37% 5.40% 5.40%
Portfolio turnover rate 6% 98% 157% 171% 149% 165%
</TABLE>
See footnote summary on page 49.
38
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.49 $10.28 $10.07 $ 8.96 $10.76 $10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .18(b) .42(b) .44 .45 .46 .40
Net realized and unrealized gain (loss)
on investment transactions .11 .38 .22 1.12 (1.40) .66
Net increase (decrease) in net asset
value from operations .29 .80 .66 1.57 (.94) 1.06
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.42) (.45) (.45) (.46) (.40)
Distributions in excess of net
investment income -0- (.03) -0- (.01) (.01) -0-
Distributions from net realized gains (.20) (.14) -0- -0- (.39) -0-
Total dividends and distributions (.43) (.59) (.45) (.46) (.86) (.40)
Net asset value, end of period $10.35 $10.49 $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total investment return based on net
asset value (c) 2.79% 8.07% 6.74% 17.91% (9.38)% 10.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $45,750 $45,542 $52,156 $58,990 $51,439 $42,954
Ratios to average net assets of:
Expenses, net of fee waivers 1.72%(d) 1.75% 1.73% 1.72% 1.37% 1.45%(d)
Expenses, before fee waivers 1.82%(d) 1.86% 1.83% 1.83% 1.82% 1.83%(d)
Net investment income, net of fee waivers 3.57%(d) 4.12% 4.32% 4.65% 4.71% 4.31%(d)
Portfolio turnover rate 6% 98% 157% 171% 149% 165%
</TABLE>
See footnote summary on page 49.
39
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.49 $10.28 $10.07 $ 8.96 $10.76 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .19(b) .42(b) .44 .45 .46 .24
Net realized and unrealized gain (loss)
on investment transactions .10 .38 .22 1.12 (1.40) .35
Net increase (decrease) in net asset
value from operations .29 .80 .66 1.57 (.94) .59
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.42) (.45) (.45) (.46) (.24)
Distributions in excess of net
investment income -0- (.03) -0- (.01) (.01) -0-
Distributions from net realized gains (.20) (.14) -0- -0- (.39) -0-
Total dividends and distributions (.43) (.59) (.45) (.46) (.86) (.24)
Net asset value, end of period $10.35 $10.49 $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total investment return based on net
asset value (c) 2.79% 8.07% 6.74% 17.91% (9.38)% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,985 $19,057 $22,763 $22,265 $24,112 $28,862
Ratios to average net assets of:
Expenses, net of fee waivers 1.69%(d) 1.72% 1.72% 1.71% 1.36% 1.45%(d)
Expenses, before fee waivers 1.80%(d) 1.84% 1.82% 1.82% 1.81% 1.83%(d)
Net investment income, net of fee waivers 3.60%(d) 4.15% 4.34% 4.69% 4.68% 3.98%(d)
Portfolio turnover rate 6% 98% 157% 171% 149% 165%
</TABLE>
See footnote summary on page 49.
40
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17 $ 9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .26(b) .53(b) .55 .55 .55 .57
Net realized and unrealized gain (loss)
on investment transactions .04 .46 .04 .90 (1.40) .79
Net increase (decrease) in net asset
value from operations .30 .99 .59 1.45 (.85) 1.36
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.54) (.55) (.55) (.55) (.58)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- (.04) (.14)
Total dividends and distributions (.27) (.55) (.55) (.55) (.60) (.72)
Net asset value, end of period $10.13 $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value (c) 3.00% 10.52% 6.30% 17.10% (8.76)% 14.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $191,497 $181,745 $179,452 $183,987 $182,170 $214,259
Ratios to average net assets of:
Expenses, net of fee waivers .61%(d) .65% .64% .75% .66% .68%
Expenses, before fee waivers 1.08%(d) 1.12% 1.11% 1.12% 1.11% 1.13%
Net investment income, net of fee waivers 5.14%(d) 5.45% 5.66% 5.93% 5.75% 5.76%
Portfolio turnover rate 4% 34% 64% 69% 69% 63%
</TABLE>
See footnote summary on page 49.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17 $ 9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .23(b) .46(b) .48 .48 .48 .41
Net realized and unrealized gain (loss)
on investment transactions .04 .46 .04 .90 (1.41) .56
Net increase (decrease) in net asset
value from operations .27 .92 .52 1.38 (.93) .97
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.48) (.47) (.41)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- (.04) -0-
Total dividends and distributions (.24) (.48) (.48) (.48) (.52) (.41)
Net asset value, end of period $10.13 $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value (c) 2.65% 9.72% 5.52% 16.19% (9.44)% 10.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $102,355 $96,119 $96,959 $94,400 $81,941 $58,504
Ratios to average net assets of:
Expenses, net of fee waivers 1.31%(d) 1.35% 1.35% 1.45% 1.36% 1.39%(d)
Expenses, before fee waivers 1.79%(d) 1.84% 1.82% 1.83% 1.82% 1.84%(d)
Net investment income, net of fee waivers 4.44%(d) 4.75% 4.95% 5.21% 5.05% 4.70%(d)
Portfolio turnover rate 4% 34% 64% 69% 69% 63%
</TABLE>
See footnote summary on page 49.
42
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17 $ 9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .23(b) .46(b) .48 .48 .48 .24
Net realized and unrealized gain (loss)
on investment transactions .04 .46 .04 .90 (1.41) .29
Net increase (decrease) in net asset
value from operations .27 .92 .52 1.38 (.93) .53
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.48) (.47) (.25)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- (.04) -0-
Total dividends and distributions (.24) (.48) (.48) (.48) (.52) (.25)
Net asset value, end of period $10.13 $10.10 $ 9.66 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value (c) 2.65% 9.72% 5.52% 16.19% (9.44)% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $35,236 $38,890 $34,562 $32,259 $34,646 $38,245
Ratios to average net assets of:
Expenses, net of fee waivers 1.31%(d) 1.35% 1.34% 1.44% 1.36% 1.38%(d)
Expenses, before fee waivers 1.76%(d) 1.82% 1.81% 1.82% 1.81% 1.84%(d)
Net investment income, net of fee waivers 4.44%(d) 4.75% 4.95% 5.24% 5.03% 4.42%(d)
Portfolio turnover rate 4% 34% 64% 69% 69% 63%
</TABLE>
See footnote summary on page 49.
43
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.04 $10.59 $10.45 $ 9.43 $10.90 $10.06
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .28(b) .58(b) .58 .59 .59 .61
Net realized and unrealized gain (loss)
on investment transactions .06 .45 .14 1.02 (1.41) .85
Net increase (decrease) in net asset
value from operations .34 1.03 .72 1.61 (.82) 1.46
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.58) (.59) (.59) (.61)
Distributions from net realized gains -0- -0- -0- -0- (.06) (.01)
Total dividends and distributions (.29) (.58) (.58) (.59) (.65) (.62)
Net asset value, end of period $11.09 $11.04 $10.59 $10.45 $ 9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value (c) 3.11% 10.07% 7.15% 17.55% (7.73)% 14.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $489,044 $470,444 $460,444 $478,535 $470,308 $531,293
Ratios to average net assets of:
Expenses, net of fee waivers .71%(d) .78% .77% .74% .64% .74%
Expenses, before fee waivers 1.04%(d) 1.05% 1.05% 1.04% 1.05% 1.06%
Net investment income, net of fee waivers 5.12%(d) 5.43% 5.57% 5.90% 5.78% 5.74%
Portfolio turnover rate 6% 20% 49% 39% 45% 83%
</TABLE>
See footnote summary on page 49.
44
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.04 $10.59 $10.45 $ 9.43 $10.90 $10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24(b) .51(b) .51 .51 .52 .44
Net realized and unrealized gain (loss)
on investment transactions .06 .45 .14 1.02 (1.41) .63
Net increase (decrease) in net asset
value from operations .30 .96 .65 1.53 (.89) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.51) (.52) (.44)
Distributions from net realized gains -0- -0- -0- -0- (.06) -0-
Total dividends and distributions (.25) (.51) (.51) (.51) (.58) (.44)
Net asset value, end of period $11.09 $11.04 $10.59 $10.45 $ 9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value (c) 2.76% 9.29% 6.37% 16.64% (8.43)% 10.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $179,757 $166,672 $164,895 $166,759 $160,879 $126,688
Ratios to average net assets of:
Expenses, net of fee waivers 1.42%(d) 1.48% 1.47% 1.45% 1.35% 1.44%(d)
Expenses, before fee waivers 1.75%(d) 1.76% 1.75% 1.75% 1.75% 1.78%(d)
Net investment income, net of fee waivers 4.41%(d) 4.72% 4.87% 5.19% 5.07% 4.66%(d)
Portfolio turnover rate 6% 20% 49% 39% 45% 83%
</TABLE>
See footnote summary on page 49.
45
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.04 $10.59 $10.45 $ 9.43 $10.90 $10.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24(b) .51(b) .51 .51 .52 .26
Net realized and unrealized gain (loss)
on investment transactions .06 .45 .14 1.02 (1.41) .36
Net increase (decrease) in net asset
value from operations .30 .96 .65 1.53 (.89) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.51) (.52) (.26)
Distributions from net realized gains -0- -0- -0- -0- (.06) -0-
Total dividends and distributions (.25) (.51) (.51) (.51) (.58) (.26)
Net asset value, end of period $11.09 $11.04 $10.59 $10.45 $ 9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value (c) 2.76% 9.29% 6.38% 16.64% (8.43)% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $103,680 $90,742 $90,917 $87,793 $103,622 $117,379
Ratios to average net assets of:
Expenses, net of fee waivers 1.41%(d) 1.48% 1.47% 1.44% 1.34% 1.44%(d)
Expenses, before fee waivers 1.74%(d) 1.74% 1.75% 1.74% 1.75% 1.78%(d)
Net investment income, net of fee waivers 4.41%(d) 4.73% 4.87% 5.22% 5.06% 4.42%(d)
Portfolio turnover rate 6% 20% 49% 39% 45% 83%
</TABLE>
See footnote summary on page 49.
46
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $13.89 $13.39 $13.32 $11.79 $14.25 $12.99
INCOME FROM INVESTMENT OPERATIONS
Net investment income .32(b) .69(b) .69 .68(a) .69(a) .70(a)
Net realized and unrealized gain (loss)
on investment transactions .08 .50 .06 1.54 (1.99) 1.30
Net increase (decrease) in net asset
value from operations .40 1.19 .75 2.22 (1.30) 2.00
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.36) (.68) (.68) (.68) (.69) (.71)
Distributions in excess of net
investment income -0- (.01) -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- -0- (.47) (.03)
Total dividends and distributions (.36) (.69) (.68) (.69) (1.16) (.74)
Net asset value, end of period $13.93 $13.89 $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value (c) 2.84% 9.18% 5.79% 19.29% (9.73)% 15.64%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $109,745 $103,647 $101,542 $103,940 $94,857 $120,734
Ratios to average net assets of:
Expenses, net of fee waivers 1.06%(d) 1.11% 1.08% 1.04% .82% .94%
Expenses, before fee waivers 1.06%(d) 1.11% 1.08% 1.09% 1.08% 1.08%
Net investment income, net of fee waivers 4.60%(d) 5.09% 5.19% 5.34% 5.29% 5.06%
Portfolio turnover rate 0% 35% 118% 103% 100% 186%
</TABLE>
See footnote summary on page 49.
47
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.89 $13.39 $13.32 $11.79 $14.25 $13.37
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27(b) .59(b) .60 .58(a) .60(a) .49(a)
Net realized and unrealized gain (loss)
on investment transactions .08 .50 .05 1.54 (2.00) .89
Net increase (decrease) in net asset
value from operations .35 1.09 .65 2.12 (1.40) 1.38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.31) (.59) (.58) (.58) (.59) (.50)
Distributions in excess of net
investment income -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- -0- (.47) -0-
Total dividends and distributions (.31) (.59) (.58) (.59) (1.06) (.50)
Net asset value, end of period $13.93 $13.89 $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value (c) 2.47% 8.37% 4.99% 18.35% (10.43)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $29,996 $27,976 $26,696 $27,816 $24,591 $21,234
Ratios to average net assets of:
Expenses, net of fee waivers 1.76%(d) 1.81% 1.79% 1.74% 1.53% 1.65%(d)
Expenses, before fee waivers 1.76%(d) 1.81% 1.79% 1.80% 1.78% 1.79%(d)
Net investment income, net of fee waivers 3.91%(d) 4.39% 4.49% 4.61% 4.60% 3.85%(d)
Portfolio turnover rate 0% 35% 118% 103% 100% 186%
</TABLE>
See footnote summary on page 49.
48
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, 1998 -------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.89 $13.39 $13.32 $11.79 $14.25 $13.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27(b) .59(b) .60 .58(a) .60(a) .29(a)
Net realized and unrealized gain (loss)
on investment transactions .08 .50 .05 1.54 (2.00) .48
Net increase (decrease) in net asset
value from operations .35 1.09 .65 2.12 (1.40) .77
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.31) (.59) (.58) (.58) (.59) (.30)
Distributions in excess of net
investment income -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- -0- (.47) -0-
Total dividends and distributions (.31) (.59) (.58) (.59) (1.06) (.30)
Net asset value, end of period $13.93 $13.89 $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value (c) 2.47% 8.37% 4.99% 18.35% (10.43)% 5.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $13,912 $13,436 $12,826 $14,323 $12,472 $15,971
Ratios to average net assets of:
Expenses, net of fee waivers 1.76%(d) 1.81% 1.78% 1.74% 1.52% 1.65%(d)
Expenses, before fee waivers 1.76%(d) 1.81% 1.78% 1.79% 1.77% 1.79%(d)
Net investment income, net of fee waivers 3.91%(d) 4.39% 4.49% 4.64% 4.59% 3.74%(d)
Portfolio turnover rate 0% 35% 118% 103% 100% 186%
</TABLE>
(a) Net of fees voluntarily waived by the Adviser.
(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 charge 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.
(d) Annualized
(e) Commencement of distribution.
49
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
SUSAN P. KEENAN, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
DAVID M. DOWDEN, VICE PRESIDENT
TERRANCE HULTS, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
(1) Member of the Audit Committee.
50
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 High Yield Fund
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 Environment 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 Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage 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
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
51
ALLIANCE MUNICIPAL INCOME FUND
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.
MUNISR
