<PAGE>
LETTER TO SHAREHOLDERS ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
April 7, 1995
Dear Shareholder:
Last year was one of the worst on record for investors in fixed income markets.
Beginning in February of 1994, strong anti-inflationary posturing by the
Federal Reserve led to higher interest rates, which put downward pressure on
bond prices. Since our last report, yields on two-year and 30-year Treasurys
continued their ascent, peaking in December and November, respectively.
Beginning in January of this year, however, the markets rebounded sharply,
staging an impressive rally across nearly all domestic fixed income sectors.
While general measures of bond prices have advanced in 1995, these gains have
not been enough to offset earlier price declines.
INVESTMENT RESULTS
The table below compares your Fund's investment results over the six-month
reporting period with the overall government bond market, represented by the
Lehman Brothers Government Bond Index (composed of the Treasury Bond and Agency
Bond Indexes, the 1-3 Year Government Index and the 20+ Year Treasury Index),
and with a narrower benchmark, represented by the Lehman Brothers 1-3 Year
Government Bond Index (U.S. Government agency and Treasury securities with
maturities of one to three years). These are unmanaged benchmark comparisons
for your Fund.
Six Months Ended Feb. 28,1995
Total Return Ending NAV
---------------- ----------
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
Class A +1.86% $9.62
Class B +1.47% $9.73
Class C +1.47% $9.72
Lehman Brothers
Government Bond
Index +2.95%
Lehman Brothers 1-3 Year
Government Bond
Index +2.51%
The Fund's total returns are based on the net asset values as of February 28,
1995. Additional investment results, including returns from inception, appear
on page 3.
A SOFT LANDING FOR THE ECONOMY?
By increasing short-term interest rates, the Federal Reserve is attempting to
slow gross domestic product (GDP) growth to 2.5% or lower, which should provide
the foundation for continued favorable inflation performance. Indeed, while the
U.S. economy continued its impressive expansion in the second half of 1994,
initial signs of a slowdown have begun to appear. Recently released U.S.
economic data have shown smaller than expected rises in retail sales and
manufacturing output with continued weakness in the automobile and housing
sectors. However, the U.S. economy remains fundamentally strong and despite
recent signs of moderation, the economy should continue to expand in 1995,
albeit at a slower pace. Supporting U.S. economic growth will likely be
continued high levels of consumer (excluding automobiles and housing) and
business spending. Real gains in personal income, strong corporate earnings and
easier access to credit are expected to keep aggregate U.S. consumption at
solid levels in the months ahead.
While an increase in overall price levels is expected this year, the inflation
outlook appears generally favorable. Broad price indices such as the Consumer
Price Index (CPI) and Producer Price Index (PPI) have shown few signs of
acceleration and labor costs remain under control. However, with the U.S.
economy believed to be at or near full capacity utilization, concern regarding
inflation is still warranted. Commodity prices and core intermediate goods in
the PPI have risen sharply over the past 12 months and recent economic data
indicate an increase in service sector prices. If the economy slows, the upward
pressure on prices should ease somewhat due to less demand for resources. If
the economy re-accelerates in the second half of 1995, then concern over
inflation would likely lead to additional interest rate increases by the
Federal Reserve.
1
<PAGE>
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
BOND MARKET OVERVIEW
We have revised our investment outlook to reflect the growing evidence that
higher interest rates have begun to slow the U.S. economy, reducing the
likelihood of significant short-term interest rate increases by the Federal
Reserve. We believe the economic expansion should continue throughout 1995 with
GDP moderating to 2.5% for the year. While inflation momentum may be building,
it is our view that prices will not spiral ahead dramatically. We expect CPI
inflation to crest around 3.5% in the second half of 1995. If inflation or
inflationary expectations exceed 3.5%, we expect the Federal Reserve to raise
the Federal Funds rate an additional one-half percent, to 6.50%, by midsummer.
We appreciate your investment in Alliance Short-Term U.S. Government Fund and
look forward to reporting its progress to you in the coming period.
Sincerely,
John D. Carifa
Chairman and President
Paul J. DeNoon
Portfolio Manager
2
<PAGE>
INVESTMENT RESULTS ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
AVERAGE ANNUAL TOTAL RETURN AS OF FEBRUARY 28, 1995
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
.One Year -0.28% -4.53%
.Since Inception* +3.88 +2.31
SEC Yield 5.32%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
.One Year -1.00% -3.86%
.Since Inception* +3.14 +2.81
SEC Yield 4.75%
CLASS C SHARES
.One Year -1.10%
.Since Inception* +0.10
SEC Yield 4.75%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares with and without the effect of the
4.25% maximum sales charge (Class A) or applicable contingent deferred sales
charge for Class B (3% year 1, 2% year 2, 1% year 3, 0% year 4); Class C shares
are not subject to front-end or contingent deferred sales charges. Past
performance does not guarantee future results. Investment return and principal
value will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost. Yields are for the 30 days ended
February 28, 1995.
*Inception: 5/2/92, Class A and Class B; 8/2/93, Class C.
3
<PAGE>
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1995 (UNAUDITED) ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
PRINCIPAL
AMOUNT
(000) VALUE
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS-91.6%
U.S. TREASURY NOTES-89.2%
7.875%, 7/15/96-2/15/96 $11,550 $11,730,171
-----------
FEDERAL AGENCY-2.4%
Federal Home Loan Bank
15.00%, 9/01/95 300 312,936
-----------
Total U.S. Government and
Agency Obligation
(cost $12,138,259) 12,043,107
-----------
ASSET BACKED SECURITIES-6.9%
Navistar Financial Corp.
Owners Trust *
Series 1994-B Cl. A
6.40%, 1/15/20 411 406,944
Standard Credit Card
Master Trust *
Series 1992-2 Cl.A (S)
5.875%, 7/07/95 $500 $ 498,750
-----------
Total Asset Backed Securities
(cost $911,829) 905,694
-----------
TOTAL INVESTMENTS-98.5%
(cost $13,050,088) 12,948,801
Other assets less liabilities-1.5% 193,683
-----------
NET ASSETS-100% $13,142,484
-----------
* Asset-backed pay-through securities.
See notes to financial statements.
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1995 (UNAUDITED) ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
ASSETS
Investments in securities, at value (cost $13,050,088) $ 12,948,801
Cash 36,375
Interest receivable 132,871
Receivable due from adviser 100,018
Deferred organization expense 21,259
Receivable for shares of beneficial interest sold 9,553
Prepaid expenses and other assets 22,573
Total assets 13,271,450
-----------
LIABILITIES
Dividend payable 37,699
Payable for shares of beneficial interest redeemed 15,770
Distribution fee payable 8,823
Accrued expenses 66,674
Total liabilities 128,966
NET ASSETS $13,142,484
-----------
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 14
Additional paid-in capital 13,921,561
Distributions in excess of net investment income (35,286)
Accumulated net realized loss (642,518)
Net unrealized depreciation of investments (101,287)
$ 13,142,484
------------
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($2,525,439 / 262,494
shares of beneficial interest issued and outstanding) $9.62
Sales charge-4.25% of public offering price .43
Maximum offering price $10.05
-------
CLASS B SHARES
Net asset value and offering price per share ($5,558,408 / 571,554
shares of beneficial interest issued and outstanding) $9.73
------
CLASS C SHARES
Net asset value, redemption and offering price per share ($5,058,637
/ 520,697 shares of beneficial interest issued and outstanding) $9.72
------
See notes to financial statements.
5
<PAGE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1995 (UNAUDITED)
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
INVESTMENT INCOME
Interest $415,843
EXPENSES
Advisory fee $ 38,173
Distribution fee-Class A 3,690
Distribution fee-Class B 28,608
Distribution fee-Class C 28,499
Audit and legal 41,484
Transfer agency 26,526
Registration 25,281
Trustees' fees 13,058
Printing 12,766
Custodian 7,689
Amortization of organization expenses 5,459
Miscellaneous 6,075
Total expenses 237,308
Less: expenses waived and reimbursed
by adviser (See Note B) (100,018)
----------
Net expenses 137,290
Net investment income 278,553
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investments (23,888)
Net change in unrealized depreciation of investments (53,275)
Net loss on investments (77,163)
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 201,390
----------
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 1,1994 YEAR ENDED
FEB. 28, 1995 THROUGH APRIL 30,
(UNAUDITED) AUGUST 31,1994* 1994
---------------- ------------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 278,553 $ 182,068 $ 398,559
Net realized loss on investments (23,888) (509,561) (29,976)
Net change in unrealized appreciation
(depreciation) of investments (53,275) 366,675 (52,535)
Net increase (decrease) in net assets
from operations 201,390 39,182 (193,952)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (59,294) (23,466) (186,963)
Class B (114,724) (58,127) (92,418)
Class C (115,437) (67,817) (113,051)
Distribution in excess of net investment income
Class A -0- (3,831) (15,558)
Class B -0- (9,485) (7,691)
Class C -0- (11,068) (9,409)
Return of capital
Class A -0- (6,485) (39,984)
Class B -0- (16,063) (19,765)
Class C -0- (18,742) (24,177)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) (2,450,615) (2,093,364) 11,280,320
Total increase (decrease) (2,538,680) (2,269,266) 10,577,352
NET ASSETS
Beginning of period 15,681,164 17,950,430 7,373,078
End of period $13,142,484 $15,681,164 $17,950,430
----------- ----------- -----------
* The Fund changed its fiscal year end from April 30 to August 31.
See notes to financial statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1995 (UNAUDITED) ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Short-Term U.S. Government Fund (the "Fund"), a series of The Alliance
Portfolios (the "Trust") is registered under the Investment Company Act of
1940, as a diversified, open-end management investment company. Prior to August
2, 1993, the Trust was known as The Equitable Funds, and the Fund was known as
The Equitable Short-Term U.S. Government Fund. Prior to August 2, 1993, the
Fund offered two classes of shares, Class A and Class B. On August 2, 1993, the
Board of Trustees approved the creation of a third class of shares, Class C
shares. The Fund offers Class A, Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 4.25%. Class B shares are sold with
a contingent deferred sales charge which declines from 3.0% to zero depending
on the period of time the shares are held. Shares purchased before August 2,
1993 and redeemed within six years of purchase are subject to different rates
than shares purchased after that date. Class C shares are sold without an
initial or contingent deferred sales charge. All three classes of shares have
identical voting, dividend, liquidation and other rights with respect to its
distribution plan. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last reported sales price on such exchange. Listed securities not traded and
securities traded in the over-the-counter market, including listed debt
securities whose primary market is believed to be over-the-counter, are valued
at the mean of the closing bid and asked price as obtained from a recognized
pricing service and brokers. Securities for which bid and asked price
quotations are not readily available are valued in good faith at fair value
using methods determined by the Board of Trustees. Securities which mature in
60 days or less are valued at amortized cost, which approximates market value.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $50,000 have been deferred and are being
amortized on a straight-line basis through May, 1997.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
6. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such Class, except that the Fund's Class
B and Class C shares bear higher distribution fees and, in the case of Class B
shares, higher transfer agent fees. Expenses of the Trust are charged to each
Fund in proportion to net assets.
7. CHANGES IN ACCOUNTING FOR DISTRIBUTION TO SHAREHOLDERS
Effective November 1, 1993, the Fund adopted Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributiions determined in accordance with income tax regulations.
8. CHANGE OF YEAR END
The Fund changed its fiscal year end from April 30 to August 31. Accordingly,
the statements of operations, changes in net assets and financial highlights
reflect the period from May 1, 1994 to August 31, 1994.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Prior to July 22, 1993, Equitable Capital Management Corporation (Equitable
Capital) served as the investment adviser to the Trust. On July 22, 1993,
Alliance Capital Management, L.P. (Alliance) acquired the business and
substantially all of the assets of Equitable Capital and became the investment
adviser to the Trust. Under the terms of an investment advisory agreement, the
Fund pays Alliance an advisory fee at an annual rate of .55 of 1% of the Fund's
average daily net assets. Under the old agreement the fee charged was the same.
Such fee is accrued daily and paid monthly. The Investment Adviser has agreed,
under the terms of the investment advisory agreement, to voluntarily waive its
fees and bear certain expenses so that total expenses do not exceed on an
annual basis 1.40%, 2.10% and 2.10% of the daily average net assets for the
Class A, Class B and Class C shares, respectively. For the six months ended
February 28, 1995, such reimbursement amounted to $100,018. Prior to August 2,
1993, the annual rate for Class A and Class B shares were 1.00% and 1.75%,
respectively. In addition to these voluntary arrangements, the Investment
Adviser will reduce its compensation, to the extent that expenses of the Fund
for any fiscal year (not including any distribution expenses paid by the Fund)
exceed the lowest applicable expense limitation prescribed by any state in
which the Fund's shares are qualified for sale. The Adviser believes that the
most restrictive expense ratio limitation imposed by any state in which the
Fund has qualified its shares for sale is 2.5% of the first $30 million of the
Fund's average daily net assets, 2% of the next $70 million of its average
daily net assets and 1.5% of its average daily net assets in excess of $100
million. The Fund has a Services Agreement with Alliance Fund Services, Inc. (a
wholly-owned subsidiary of the Adviser) to provide personnel and facilities to
perform transfer agency services for the Fund. Compensation under this
agreement amounted to $18,000 for the six months ended February 28, 1995.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $615 from the sale of Class A shares and $26,676 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B shares for the six months ended February 28, 1995. Trustees' fees and
expenses payable include amounts owed to one of the Trustees under a deferred
compensation plan.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .50% of the Fund's average daily net assets attributable to Class
A shares and 1% of the average daily net assets attributable to both Class B
and Class C shares. The Fund paid a distribution fee to the distributor at an
annual rate of .30% of the Fund's average daily net assets attributable to
Class A shares. Prior to August 2, 1993, Equico Securities served as
distributor to the Fund. The Trustees currently limit payments under the Class
A plan to .30% of the Fund's aggregate average daily net assets attributable to
Class A shares. The Agreement provides that the Distributor will use such
payments in their entirety for distribution assistance and promotional
activities. The Distributor has incurred since inception expenses in excess of
the distribution costs reimbursed by the Fund in the amount of $205,335 and
$420,418 for Class B and C shares, respectively; such costs may be recovered
from the Fund in future periods. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs, incurred by the
Distributor, beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of the Fund's shares.
8
<PAGE>
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $1,220,063 and $3,349,728, respectively, for the six months ended
February 28, 1995. At February 28, 1995 the cost of securities for federal
income tax purposes was the same as the cost for financial reporting purposes.
Accordingly net unrealized depreciation of investments was $101,287.
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $0.00001 par value shares of beneficial
interest authorized divided into three classes, designated Class A, Class B and
Class C shares. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
-------------------------------------- -------------------------------------
SIX MONTHS SIX MONTHS
ENDED MAY 1,1994 ENDED MAY 1,1994
FEB. 28, THROUGH YEAR ENDED FEB. 28, THROUGH YEAR ENDED
1995 AUG. 31, APRIL 30, 1995 AUG. 31, APRIL 30,
(UNAUDITED) 1994* 1994 (UNAUDITED) 1994* 1994
----------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
hares sold 271,559 63,865 305,285 $2,606,566 $ 621,582 $3,088,288
Shares issued in reinvestment
of dividends and distributions 3,664 2,640 18,496 35,052 24,637 188,107
Shares redeemed (247,709) (36,470) (713,916) (2,374,900) (353,354) (7,238,334)
increase (decrease) 27,514 30,035 (390,135) $ 266,718 $292,865 $(3,961,939)
--------- -------- -------- ----------- --------- -----------
CLASS B
Shares sold 250,868 191,442 1,038,373 $2,420,447 $1,879,078 $10,509,198
Shares issued in reinvestment
of dividends and distributions 6,539 4,974 6,998 63,290 48,786 71,232
Shares redeemed (328,149) (281,109) (443,714) (3,175,896) (2,763,343) (4,491,840)
Net increase (decrease) (70,742) (84,693) 601,657 $(692,159) $ (835,479) $ 6,088,590
-------- -------- -------- ---------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------------------ ------------------------------------
SIX MONTHS SIX MONTHS
ENDED MAY 1,1994 AUG. 2, ENDED MAY 1,1994 AUG. 2,
FEB. 28, THROUGH 1993** FEB. 28, THROUGH 1993**
1995 AUG. 31, TO APRIL 30, 1995 AUG.31, TO APR. 30,
(UNAUDITED) 1994* 1994 (UNAUDITED) 1994* 1994
---------- --------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS C
Shares sold 127,822 236,907 1,504,955 $1,231,562 $ 2,323,716 $15,510,590
Shares issued in reinvestment
of dividends and distributions 6,640 5,079 6,182 64,241 49,793 62,755
Shares redeemed (343,243) (400,146) (623,499) (3,320,976) (3,924,259) (6,419,676)
Net increase (decrease) (208,781) (158,160) 887,638 $(2,025,173) $(1,550,750) $ 9,153,669
--------- --------- -------- ------------ ----------- -----------
</TABLE>
NOTE F: FEDERAL INCOME TAX STATUS
At August 31, 1994, the Fund had net capital loss carryforward of $109,069 of
which $72,933 expires in the fiscal year ending 2001 and $36,136 in the fiscal
year ending 2002 to the extent provided by the regulations. To the extent that
this loss carryforward is used to offset future capital gains, it is probable
that the gains as offset will not be distributed to the shareholders. Capital
losses incurred after October 31, within the Funds fiscal year are deemed to
arise on the first business day of the following fiscal year. The Fund incurred
and elected to defer post October losses of $509,561.
* The Fund changed its fiscal year end from April 30 to August 31.
** Commencement of distribution.
9
<PAGE>
FINANCIAL HIGHLIGHTS ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
CLASS A
--------------------------------------------
SIX MONTHS MAY 1,1994 YEAR MAY 4,1992(A)
ENDED THROUGH ENDED TO
FEB. 28,1995 AUGUST 31, APR. 30, APR. 30,
(UNAUDITED) 1994* 1994 1993
----------- --------- -------- ----------
Net asset value, beginning of period $ 9.67 $ 9.77 $10.22 $10.00
INCOME FROM INVESTMENT OPERATIONS
et investment income .34** .14** .35** .46**
Net realized and unrealized gain (loss) (.04) (.09) (.29) .34
Net increase in net asset value
rom operations .30 .05 .06 .80
LESS: DISTRIBUTIONS
Dividends from net investment income (.35) (.12) (.42) (.46)
Dividends in excess of net investment
income -0- -0- (.01) -0-
Return of capital -0- (.03) (.08) -0-
Distributions from net realized gains -0- -0- -0- (.12)
Total dividends and distributions (.35) (.15) (.51) (.58)
Net asset value, end of period $ 9.62 $ 9.67 $ 9.77 $10.22
------ ------ ------ ------
TOTAL RETURN
Total investment return based on net
asset value (b) 1.86% .53% .52% 8.20%
------ ----- ----- -----
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's
omitted) $2,525 $2,272 $2,003 $6,081
Ratio to average net assets of:
Expenses, net waivers/
reimbursements 1.40%(c) 1.40%(c) 1.27% 1.00%(c)
Expenses, before waivers/
reimbursements 2.89%(c) 2.95%(c) 2.17% 2.20%(c)
Net investment income 4.65%(c) 3.98%(c) 4.41% 4.38%(c)
Portfolio turnover rate 9% 144% 55% 294%
See footnotes on page 11.
10
<PAGE>
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED MAY 1,1994 MAY 4, ENDED MAY 1,1994 AUGUST 2,
FEBRUARY 28, THROUGH YEAR ENDED 1992(A) FEB. 28, THROUGH 1993(D)
1995 AUGUST 31, APRIL 30, TO APRIL 30, 1995 AUG. 31, TO APRIL 30,
(UNAUDITED) 1994* 1994 1993 (UNAUDITED) 1994* 1994
------------- -------- ---------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.78 $ 9.88 $10.31 $10.00 $ 9.77 $ 9.87 $10.34
INCOME FROM INVESTMENT OPERATIONS
et investment income .31** .10** .40** .38** .30** .10** .26**
Net realized and unrealized gain (loss) (.04) (.07) (.39) .33 (.03) (.07) (.42)
Net increase (decrease) in net asset
value from operations .27 .03 .01 .71 .27 .03 (.16)
LESS: DISTRIBUTIONS
Dividends from net investment
income (.32) (.11) (.35) (.38) (.32) (.11) (.25)
Dividends in excess of net investment
income -0- -0- (.01) -0- -0- -0- (.01)
Return of capital -0- (.02) (.08) -0- -0- (.02) (.05)
Distributions from net realized gains -0- -0- -0- (.02) -0- -0- -0-
Total dividends and distributions (.32) (.13) (.44) (.40) (.32) (.13) (.31)
Net asset value, end of period $ 9.73 $ 9.78 $ 9.88 $10.31 $ 9.72 $ 9.77 $ 9.87
------- ------- ------- ------- ------- ------- -------
TOTAL RETURN
Total investment return based on net
asset value (b) 1.47% .28% .03% 7.22% 1.47% .28% (1.56)%
----- ---- ---- ----- ----- ----- -------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)
omitted) $5,558 $6,281 $7,184 $1,292 $5,059 $7,128 $8,763
Ratios of average net assets of:
Expenses, net of waivers/
reimbursements 2.10%(c) 2.10%(c) 2.05% 1.75%(c) 2.10%(c) 2.10%(c) 2.10%(c)
Expenses, before waivers/
reimbursements 3.55%(c) 3.60%(c) 3.21% 4.81%(c) 3.52%(c) 3.64%(c) 3.10%(c)
Net investment income 3.89%(c) 3.22%(c) 3.12% 3.36%(c) 3.86%(c) 3.26%(c) 2.60%(c)
Portfolio turnover rate 9% 144% 55% 294% 9% 144% 55%
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
** Net of fee waived and expenses reimbursed by Adviser.
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) Commencement of distribution.
Prior to July 22, 1993, Equitable Capital Management Corporation (Equitable
Capital) served as the investment adviser to the Trust. On July 22, 1993,
Alliance Capital Management L.P. acquired the business and substantially all of
the assets of Equitable Capital and became the investment adviser of the Trust.
11
<PAGE>
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
BOARD OF TRUSTEES
John D. Carifa, Chairman and President
Alberta B. Arthurs (1)
Ruth Block (1)
Richard W. Couper (1)
Brenton W. Harries (1)
Donald J. Robinson (1)
OFFICERS
Bruce W. Calvert, Vice President
Kathleen A. Corbet, Vice President
Franklin Kennedy III, Vice President
Barbara J. Krumsiek, Vice President
Edmund P. Bergan, Jr., Clerk
Mark D. Gersten, Treasurer & Chief Financial Officer
Patrick J. Farrell, Controller & Chief Accounting Officer
CUSTODIAN
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
TRANSFER AGENT
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
PRINCIPAL UNDERWRITER
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110-2624
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036-2798
12
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13
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14
<PAGE>
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15
<PAGE>
ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital
Funds without the Mystery
THIS REPORT IS DISTRIBUTED SOLELY TO SHAREHOLDERS OF THE FUND
AND IS NOT TO BE USED AS SALES LITERATURE.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
STMUSGSR
BULK RATE
U.S. POSTAGE
PAID
New York, NY
Permit No. 7131
ALLIANCE
SHORT-TERM
U.S. GOVERNMENT FUND
SEMI-ANNUAL
REPORT
FEBRUARY 28, 1995
Alliance Capital
Funds without the Mystery
