ALLIANCE STRATEGIC BALANCED FUND
ANNUAL REPORT
JULY 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
September 27, 1996
Dear Shareholder:
Despite an environment that was characterized by increased market volatility in
most capital markets, the Alliance Strategic Balanced Fund recorded investment
results that approximated the return of its benchmark during the second half of
its fiscal year, ended July 31, 1996. Since the fund invests in stocks and
bonds, its benchmark is the combined (50/50) performance of the Standard &
Poor's 500 stock index, a common measure of stock market activity, and the
Lehman Brothers (LB) Government/Corporate Bond Index, which represents the
broad U.S. bond market. For the period, the S&P 500 registered a small positive
gain, while the LB Gov't/Corp. Bond Index posted a slightly negative return.
For the full twelve-month period, the Portfolio underperformed its benchmark
because of disappointing performance of its equity component and the sharp
sell-off in the fixed income market.
TOTAL RETURN
PERIODS ENDED JULY 31, 1996
SIX MONTHS TWELVE MONTHS
---------- -------------
ALLIANCE STRATEGIC BALANCED FUND
Class A -.21% +8.05%
Class B -.56% +7.41%
Class C -.56% +7.34%
S&P 500 +1.77% +16.55%
LB GOV'T/CORP. BOND INDEX -2.26% +5.31%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
JULY 31; ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
MARKET OVERVIEW
The performance of the NASDAQ Industrials, the large over-the-counter stock
market, typified the market volatility. The NASDAQ gained 15.5% in April and
May, only to give it all back in June and July. Another example was the
decoupling of the stock and bond markets. The bond market posted four
consecutive monthly losses, while stocks produced sequential monthly gains.
The financial markets were whipsawed by the ebb and flow of economic data. At
times, the economy appeared to be growing too fast, which caused inflationary
concerns among investors. (In a mature economic recovery, higher inflation
leads to higher interest rates, which often puts pressure on stock and bond
prices.) At other times, the economy seemed to be growing moderately, which
dampened those concerns, stabilized interest rates and bolstered the financial
markets.
We believe the burst of economic activity that unnerved the capital markets is
largely unsustainable. The main reason is that much of this strength reflected
temporary developments. Many Americans received and spent their tax refunds,
and the government dispensed more money than usual, not uncommon during an
election year. Moreover, we expect the high levels of consumer debt will dampen
spending patterns for the remainder of 1996.
We recognize that the macro-economic factors that support the valuation
framework for the stock market have been favorable for some time, and are
beginning to change. It is clear that earnings momentum is slowing as the
economy slows. The market is also subject to the vagaries of mutual fund cash
flows because of the high level of new issue activity. It is also an election
year, and as the balloting date moves closer, polling resultsdepending upon
what they reflectcould affect capital markets should they suggest future
legislative and fiscal policy changes.
MARKET OUTLOOK
Looking ahead, we expect the rate of growth of the U.S. economy to moderate to
the 2-2 1/2% range. And as a consequence, investors fears about accelerating
inflation should remain subdued. This combination of a slower rate of earnings
growth and a stable set of valuation factors is expected to produce modest
positive equity returns over the next six to 12 months. At current levels of
stock valuation, the spread between expected equity and fixed income returns
has narrowed.
1
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
Given these factors, we have increased the fixed-income portion of the
portfolio closer to the 50% equity/50% fixed income benchmark. Within the
equity portfolio, we have raised the portfolio's exposure to international
securities owing to their attractive valuation levels and the potential for a
cyclical recovery in business conditions and profits overseas.
Sincerely,
John D. Carifa
Chairman and 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 STRATEGIC BALANCED FUND
_______________________________________________________________________________
Alliance Strategic Balanced Fund seeks a high long-term total return by
investing in a combination of equity and debt securities. It invests
principally in a diversified portfolio of dividend-paying common stocks and
fixed-income securities, and also in equity-type securities such as warrants,
preferred stocks and convertible debt instruments.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF JULY 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 8.05% 3.45%
. Five Years 8.60% 7.66%
. Since Inception* 11.56% 10.74%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 7.41% 3.40%
. Five Years 7.84% 7.84%
. Since Inception* 11.63%** 11.63%**
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year 7.34% 6.34%
. Since Inception* 5.56% 5.56%
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shareswith and without the effect of the
4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
Class C shares purchased prior to July 1, 1996 are not subject to front-end or
contingent deferred sales charges. Class C shares purchased on or after July 1,
1996 are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Past performance does not guarantee
future results. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
* Inception: 9/4/90, Class A; 10/23/87, Class B; 8/2/93, Class C.
** Reflects conversion to Class A shares.
3
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
ALLIANCE STRATEGIC BALANCED FUND
GROWTH OF A $10,000 INVESTMENT:
9/4/90-7/31/96
$25,000
$23,000
$21,000
$19,000
$17,000
$15,000
$13,000
$11,000
$9,000
9/4/90 7/31/96
S&P 500
STRATEGIC BALANCED FUND
CLASS A: $18,271
LB GOV'T/CORP.
BOND INDEX
This chart illustrates the total value of an assumed investment in Alliance
Strategic Balanced Fund Class A after deducting the maximum 4.25% sales charge,
and with dividends and capital gains reinvested. Performance for Class B and
Class C shares will vary from the results shown above due to differences in
expenses charged to those classes. Past performance is not indicative of future
results, and is not representative of future gain or loss in capital value or
dividend income.
The unmanaged Standard and Poor's 500-stock index includes 500 U.S. stocks and
is a common measure of the performance of the overall U.S. stock market.
The unmanaged Lehman Brothers Government/Corporate Bond Index represents a
combination of the Government Bond Index and the Corporate Bond Index.
Strategic Balanced Fund
S&P 500
LB Gov't/Corp. Bond Index
4
TEN LARGEST HOLDINGS
JULY 31, 1996 ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Treasury Notes $10,951,224 21.9%
Federal National Mortgage Association 4,067,099 8.1
Federal Home Loan Mortgage Corp., 7.00%, 07/01/11 1,009,625 2.0
Government National Mortgage Association,
7.50%, 01/15/26 799,747 1.6
Auburn Hills Trust, 12.00%, 05/01/20 794,315 1.6
John Hancock Mutual Life Insurance Co.,
7.375%, 02/15/24 740,384 1.5
Northrup Grumman Corp., 7.75%, 03/01/16 735,703 1.5
Time Warner, Inc., 8.375%, 03/15/23 725,393 1.5
Ford Motor Credit Co., 6.125%, 01/09/06 681,113 1.4
Philip Morris Cos., Inc. 517,894 1.0
$21,022,497 42.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED JULY 31, 1996
_______________________________________________________________________________
SHARES OR PRINCIPAL
-------------------------
HOLDINGS
PURCHASES BOUGHT 7/31/96
- -------------------------------------------------------------------------------
Auburn Hills Trust, 12.00%, 05/01/20 $550,000 $550,000
Federal Home Loan Mortgage Corp., 7.00%, 07/01/11 $1,025,000 $1,025,000
Federal National Mortgage Association,
7.00%, 05/01/26 $1,015,496 $1,015,496
Federal National Mortgage Association,
8.50%, 12/01/25 $1,089,000 $1,089,000
Government National Mortgage Association,
7.50%, 01/15/26 $813,992 $813,992
John Hancock Mutual Life Insurance Co.,
7.375%, 02/15/24 $800,000 $800,000
Northrup Grumman Corp., 7.75%, 03/01/16 $750,000 $750,000
U.S. Treasury Note, 5.75%, 08/15/03 $2,420,000 $2,420,000
U.S. Treasury Note, 6.125%, 05/15/98 $4,305,000 $6,305,000
U.S. Treasury Note, 6.50%, 08/15/05 $1,350,000 $1,450,000
HOLDINGS
SALES SOLD 7/31/96
- -------------------------------------------------------------------------------
Ceridian Corp. 35,000 6,400
Federal National Mortgage Association,
6.00%, 12/01/09 $1,340,281 -0-
Hercules, Inc. 27,500 -0-
ITT Corp. 18,505 3,895
MCI Communications Corp. 45,100 -0-
Monsanto Co. 8,800 3,500
Philip Morris Cos., Inc. 17,050 4,950
Transatlantic Holdings, Inc. 18,000 -0-
U.S. Treasury Note, 7.75%, 01/31/00 $2,300,000 $900,000
Warner-Lambert Co. 18,500 -0-
5
PORTFOLIO OF INVESTMENTS
JULY 31, 1996 ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-53.3%
UNITED STATES INVESTMENTS-40.1%
TECHNOLOGY-8.5%
COMMUNICATIONS EQUIPMENT-1.1%
DSC Communications Corp. * 7,300 $ 219,000
Intelcom Group, Inc. * 1,700 32,725
Motorola, Inc. 2,500 135,000
Scientific-Atlanta, Inc. 10,000 133,750
TCSI Corp. 200 5,000
Winstar Communications, Inc. 800 15,000
------------
540,475
COMPUTER HARDWARE-1.3%
BMC Industries, Inc. 2,200 60,225
Ceridian Corp. * 6,400 278,400
COMPAQ Computer Corp. * 1,350 73,913
Digital Equipment Corp. * 2,500 88,437
Hewlett-Packard Co. 3,000 132,000
Optical Data Systems, Inc. * 1,700 34,000
------------
666,975
COMPUTER NETWORKING SOFTWARE-1.7%
3Com Corp. * 7,700 303,187
Bay Networks, Inc. * 5,450 125,350
cisco Systems, Inc. * 8,000 414,000
------------
842,537
COMPUTER PERIPHERALS-0.3%
Exabyte Corp. * 1,600 19,200
Seagate Technology, Inc. * 2,500 120,938
------------
140,138
COMPUTER SOFTWARE &SERVICES-2.8%
Advanced Tissue Sciences, Inc. * 1,800 23,850
Applix, Inc. * 1,100 25,163
Electronic Data Systems Corp. 3,250 171,844
First Data Corp. 2,500 194,062
Hyperion Software Corp. * 1,200 14,250
Informix Corp. * 13,000 283,562
Oracle Systems Corp. * 7,550 295,394
Softkey International, Inc. * 1,500 27,750
Sterling Software, Inc. * 4,300 295,625
Systemsoft Corp. 1,000 18,125
Universal Outdoor Holdings, Inc. 1,200 25,200
------------
1,374,825
SEMI-CONDUCTORS & RELATED-0.6%
Altera Corp. * 3,500 143,500
Intel Corp. 2,000 150,250
VLSI Technology, Inc. * 2,000 24,500
------------
318,250
UTILITY-TELEPHONE-0.5%
AT & T Corp. 3,600 187,650
MFS Communications, Inc. * 1,100 34,650
Teleport Communications Group * 2,800 43,400
------------
265,700
MISCELLANEOUS-0.2%
Harman International Industries, Inc. 1,000 44,875
Xircom, Inc. * 2,700 34,425
------------
79,300
------------
4,228,200
CONSUMER SERVICES-6.9%
ADVERTISING-0.1%
Clear Channel Communications, Inc. * 300 23,888
Ha Lo Industries, Inc. * 2,100 47,250
------------
71,138
AIRLINES-0.3%
America West Airlines, Inc. * 1,800 28,800
Mesa Airlines, Inc. * 3,100 27,900
6
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
Northwest Airlines Corp. Cl.A * 2,800 $ 102,900
------------
159,600
APPAREL-0.4%
Designer Holdings, Ltd. * 1,600 29,400
Oakley, Inc. * 600 20,325
Reebok International, Ltd. 3,700 129,500
Warnaco Group, Inc. 1,400 33,075
------------
212,300
BROADCASTING & CABLE-1.2%
Cablevision Systems Corp. * 5,600 221,900
CommNet Cellular, Inc. * 1,100 28,119
EZ Communications, Inc. * 900 29,250
Infinity Broadcasting Corp. Cl.A* 1,050 28,875
Millicom International Cellular, S.A. * 700 27,125
Mobilemedia Corp. * 3,400 28,050
TCI Group, Series A * 7,800 111,150
Valuevision International, Inc. * 3,600 20,250
Viacom, Inc. Cl.B* 2,680 93,800
------------
588,519
ENTERTAINMENT & LEISURE-0.8%
Cyrk International, Inc. * 9,900 136,125
Heritage Media Corp. * 700 27,737
Lodgenet Entertainment Corp. * 2,500 30,469
Walt Disney Co. 3,944 219,385
------------
413,716
PRINTING & PUBLISHING-0.3%
New York Times Co. 4,200 122,325
RESTAURANTS & LODGING-1.1%
Doubletree Corp. * 800 26,200
Host Marriott Corp. * 8,100 106,312
Interstate Hotels Co. * 1,200 27,300
ITT Corp. * 3,895 221,041
La Quinta Inns, Inc. 5,750 104,938
Red Lion Hotels, Inc. * 1,600 37,000
------------
522,791
RETAILING-GENERAL-1.8%
AutoZone, Inc. * 8,700 251,212
CompUSA, Inc. * 5,650 223,175
Consolidated Stores Corp. * 900 29,700
Federated Department Stores, Inc. * 3,500 105,875
Fingerhut Cos., Inc. 10,300 145,487
Nine West Group, Inc. * 1,300 62,888
Payless Cashways, Inc. * 25,500 98,813
------------
917,150
TOYS-0.2%
Hasbro, Inc. 2,500 89,687
MISCELLANEOUS-0.7%
Brightpoint, Inc. * 1,300 30,875
Equifax, Inc. 10,000 251,250
Equity Corp. * 1,200 34,050
Oxford Resources Corp. * 1,000 23,750
------------
339,925
------------
3,437,151
FINANCE-5.7%
BANKING-MONEY CENTERS-0.1%
RAC Financial Group, Inc. 1,200 31,200
BANKING-REGIONAL-0.8%
First Union Corp. 4,000 254,000
Wells Fargo & Co. 550 128,081
------------
382,081
BROKERAGE & MONEY MANAGEMENT-0.4%
Merrill Lynch & Co., Inc. 3,000 181,125
INSURANCE-2.0%
General Reinsurance Corp. 900 132,075
Life Re Corp. 7,000 193,375
NAC Re Corp. 900 31,050
Penncorp Financial Group, Inc. 1,200 33,600
7
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
TIG Holdings, Inc. 10,000 $ 277,500
Travelers Group, Inc. 7,200 304,200
Twentieth Century Industries, Inc. * 1,600 24,000
------------
995,800
MORTGAGE BANKING-0.5%
Federal National Mortgage Assn. 8,000 254,000
REAL ESTATE-0.1%
JP Realty, Inc. 1,200 25,350
Macerich Co. 1,200 25,050
Summit Properties, Inc. 1,400 25,550
------------
75,950
MISCELLANEOUS-1.8%
Associates First Capital Corp. 3,300 126,638
Dean Witter, Discover & Co. 4,500 228,937
MBNA Corp. 9,000 250,875
MGIC Investment Corp. 2,000 120,000
PMI Group, Inc. 3,000 142,500
Union Acceptance Corp. * 2,600 37,700
------------
906,650
------------
2,826,806
HEALTH CARE-4.0%
BIOTECHNOLOGY-1.2%
Amgen, Inc. * 3,000 163,875
Biogen, Inc. * 2,450 149,756
Geltex Pharmaceuticals, Inc. * 1,400 17,150
Liposome Co., Inc. * 1,600 19,300
Medimmune, Inc. * 1,700 23,375
Steris Corp. * 8,168 236,872
------------
610,328
DRUGS-1.1%
Merck & Co., Inc. 4,000 257,000
Pfizer, Inc. 3,600 251,550
Rotech Medical Corp. * 1,800 31,500
------------
540,050
HOSPITAL SUPPLIES & SERVICES-0.6%
Baxter International, Inc. 3,000 124,875
Buckeye Cellulose Corp. * 900 20,700
Medtronic, Inc. 2,700 127,913
Respironics, Inc. * 1,400 28,350
------------
301,838
MEDICAL SERVICES-1.1%
Columbia/HCA Healthcare Corp. 5,000 256,250
Coventry Corp. * 3,500 43,750
Ornda Healthcorp * 3,200 73,600
Oxford Health Plans, Inc. * 3,300 113,850
Riscorp, Inc. * 1,800 19,350
Value Health, Inc. * 1,750 27,125
------------
533,925
MISCELLANEOUS-0.0%
Compdent Corp. * 600 22,500
------------
2,008,641
ENERGY-3.2%
OIL & GAS-3.2%
BJ Services Co. * 3,700 122,563
Diamond Shamrock, Inc. 1,000 27,750
Exxon Corp. 5,700 468,825
Global Marine, Inc. * 2,800 37,450
Louis Dreyfus Natural Gas Corp. * 12,200 170,800
Louisiana Land & Exploration Co. 2,700 145,800
Mobil Corp. 2,900 320,087
Rowan Cos., Inc. * 2,600 37,375
Schlumberger, Ltd. 3,100 248,000
Sonat Offshore Drilling, Inc. 700 34,300
------------
1,612,950
CAPITAL GOODS-3.1%
ELECTRICAL EQUIPMENT-0.6%
General Electric Co. 3,700 304,788
8
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
ENGINEERING & CONSTRUCTION-0.4%
United Dominion Industries, Ltd. 10,000 $ 208,750
MACHINERY-1.0%
Allied-Signal, Inc. 4,600 270,250
Applied Graphics Technologies * 1,900 26,600
Comverse Technology, Inc. * 2,100 64,837
Crompton & Knowles Corp. 2,200 33,000
Deere & Co. 1,400 50,050
Pentair, Inc. 1,200 32,400
------------
477,137
POLLUTION CONTROL-1.1%
United States Filter Corp. * 800 17,300
United Waste Systems, Inc. * 900 23,287
USA Waste Services, Inc. * 9,900 247,500
WMX Technologies, Inc. 9,000 266,625
------------
554,712
------------
1,545,387
CONSUMER STAPLES-2.6%
COSMETICS-0.4%
Gillette Co. 3,040 193,420
FOOD-0.3%
Nabisco Holdings Corp. 3,875 130,781
HOUSEHOLD PRODUCTS-0.5%
Colgate-Palmolive Co. 2,950 231,575
RETAIL -FOOD & DRUGS-0.3%
Revco D.S., Inc. * 7,500 170,625
TOBACCO-1.0%
Philip Morris Cos., Inc. 4,950 517,894
MISCELLANEOUS-0.1%
ADT, Ltd. * 2,700 50,963
Mohawk Industries, Inc. 1,600 28,400
------------
79,363
------------
1,323,658
BASIC INDUSTRIES-2.6%
CHEMICALS-1.7%
Cytec Industries, Inc. * 4,500 135,000
Freeport McMoran, Inc. 8,000 287,000
Monsanto Co. 3,500 109,375
Olin Corp. 3,550 300,862
Polymer Group, Inc. * 2,000 25,500
------------
857,737
CONTAINERS-0.3%
Crown Cork & Seal, Inc. 3,000 133,500
PAPER& FOREST PRODUCTS-0.1%
Louisiana-Pacific Corp. 2,300 46,863
METALS & MINING-0.5%
Aluminum Co. of America 2,500 145,000
Century Aluminum Co. 2,500 36,563
Gibraltor Steel Corp. * 1,900 37,525
Kaiser Aluminum Corp. * 2,300 25,300
UCAR International, Inc. * 600 20,925
------------
265,313
------------
1,303,413
CONSUMER MANUFACTURING-1.6%
APPLIANCES-0.5%
Black & Decker Corp. 6,400 235,200
AUTO & RELATED-0.3%
Goodyear Tire & Rubber Co. 2,750 121,687
Team Rental Group, Inc. * 900 17,775
------------
139,462
BUILDING & RELATED-0.0%
Hughes Supply, Inc. 900 29,363
TEXTILE PRODUCTS-0.1%
Tommy Hilfiger Corp. * 800 40,600
MISCELLANEOUS-0.7%
First Brands Corp. 10,400 248,300
Thrifty Payless Holdings, Inc. * 3,400 47,600
U.S. Industries, Inc. * 3,000 67,500
------------
363,400
------------
808,025
9
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
TRANSPORTATION-1.3%
RAILROADS-1.0%
Burlington Northern Santa Fe 3,000 $ 236,625
Genesee & Wyoming, Inc. * 1,400 31,500
Hub Group, Inc. * 1,300 25,025
Union Pacific Corp. 2,900 198,650
------------
491,800
MISCELLANEOUS-0.3%
Xtra Corp. 4,300 181,675
------------
673,475
SCIENCE & TECHNOLOGY-0.3%
AEROSPACE & DEFENSE-0.3%
Boeing Co. 800 70,800
United Technologies Corp. 600 67,575
------------
138,375
MULTI INDUSTRY COMPANIES-0.3%
Petco Animal Supplies, Inc. * 1,200 26,700
Whitman Corp. 4,400 98,450
------------
125,150
Total United States Investments
(cost $20,595,573) 20,031,231
FOREIGN INVESTMENTS-13.2%
AUSTRALIA-0.2%
National Australia Bank, Ltd. 9,000 81,723
Banks
CANADA-0.4%
Canadian Pacific, Ltd. 3,000 65,250
Railroads
Loewen Group, Inc. 1,600 42,900
Miscellaneous
Magna International, Inc. 1,560 69,420
Auto & Related
------------
177,570
FINLAND-0.4%
Nokia Corp. (ADR) 6,200 218,550
Telecommunications
FRANCE-1.5%
Bouygues 1,500 161,232
Engineering & Construction
Business Objects, S.A. (ADR) * 1,000 19,250
Computer Software & Services
Eaux (cie Generale) 1,900 195,480
Diversified
Lafarge Coppee 500 29,995
Engineering & Construction
Television Francaise 1,500 177,145
Broadcasting
Total, S.A. Cl.B 2,351 168,941
Utility/Electric
------------
752,043
GERMANY-1.0%
Bayer AG 5,300 178,203
Chemicals
Deutsche Bank AG 4,300 217,804
Banks
Hornbach Holding AG 1,000 68,605
Engineering & Construction
Lufthansa AG 200 28,596
Airlines
------------
493,208
HONG KONG-0.4%
Asia Satellite Telephone * 4,000 11,793
Utility/Telephone
Hong Kong and China Gas Co., Ltd. 36,000 57,026
Utility/Electric
warrants, expiring 9/30/97 * 3,000 667
Utility/Electric
10
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
Hutchison Whampoa, Ltd. 9,000 $ 53,768
Multi-Industry
Swire Pacific 7,000 59,968
Multi-Industry
------------
183,222
INDONESIA-0.0%
Ramayana Lestari * 3,000 4,497
Retailing-General
IRELAND-0.1%
Saville Systems Plc (ADR) * 1,600 41,400
Technology
ITALY-0.1%
Industrie Natuzzi S.p.A. (ADR) 600 27,150
Household Products
Istituto Nazionale delle Assicurazioni 20,000 28,683
Insurance
Magneti Marelli 14,800 20,447
Auto & Related
------------
76,280
JAPAN-4.9%
Canon, Inc. 8,000 151,375
Technology-Misc.
Ezaki Glico Co. 5,000 51,988
Food & Beverages
Fuji Bank, Ltd. 9,000 177,041
Banks
Fuji Photo Film Co. (ORD) 6,000 179,289
Leisure Related
Hitachi, Ltd. 16,000 145,829
Electrical Equipment
Honda Motor Co. 8,000 193,340
Auto & Related
Ito-Yokado Co., Ltd. 3,000 173,388
Retailing-General
Kirin Brewery Co., Ltd. 14,000 166,549
Food & Beverages
Matsushita Electric Works 3,000 31,193
Building & Related
Matsushita Electrical Industrial Co., Ltd. 7,000 121,961
Electrical Equipment
Nippon Express Co., Ltd. 3,000 28,383
Trucking & Shipping
Nomura Securities Co., Ltd. 8,000 140,134
Brokerage & Money Management
Sakura Bank, Ltd. 17,000 164,020
Banks
Seven Eleven Japan 3,000 190,249
Retailing-General
Taisho Pharmaceutical Co. 4,000 86,179
Drugs
Tokia Marine & Fire Co. 14,000 174,418
Insurance
Tokyo Electric Power 6,000 152,311
Utility/Electric
Toyota Corp. 6,000 145,567
Auto & Related
------------
2,473,214
MALAYSIA-0.3%
Berjaya Sports 21,000 70,679
Diversified
Resorts World Bhd 15,000 71,520
Leisure Related
------------
142,199
NETHERLANDS-0.8%
AKZO Nobel N.V. 1,500 168,412
Chemicals
Internationale Nederlanden Groep N.V. * 8,005 245,644
Insurance
------------
414,056
NEW ZEALAND-0.2%
Telecom Corp. of New Zealand, Ltd. 18,000 82,665
Telecommunications
SINGAPORE-0.2%
Overseas Chinese Bank 4,400 49,197
Banks
11
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
Singapore Press Holdings, Ltd. 2,000 $ 34,817
Printing & Publishing
------------
84,014
SOUTH KOREA-0.2%
Korea Mobile Telecommunications Corp. (ADR) * 6,000 100,500
Utility/Telephone
SPAIN-0.0%
Uralita, S.A. 3,000 24,848
Engineering & Construction
SWITZERLAND-0.7%
Ciba Geigy AG 20 23,737
Chemicals
Nestle, S.A. 200 228,347
Food & Beverages
Sandoz AG 100 111,584
Drugs
------------
363,668
UNITED KINGDOM-1.8%
BAT Industries Plc 13,000 101,913
Tobacco
British Telecommunications Plc 22,000 124,218
Utility/Telephone
BTR Plc 30,000 113,859
Multi-Industry Companies
Cadbury Schweppes Plc 12,000 94,727
Food & Beverages
Glaxo Wellcome 4,000 55,654
Drugs
Grand Metropolitan Plc 21,000 141,927
Food & Beverages
Reuters Holdings 5,600 58,665
Printing, Publishing & Broadcasting
Sears Plc 40,000 60,041
Retailing-General
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
Smithkline Beecham 5,800 $ 61,573
Drugs
Tesco 13,700 62,331
Machinery
Unichem 10,000 39,975
Medical Products
------------
914,883
Total Foreign Investments
(cost $6,541,590) 6,628,540
Total Common Stocks & Other Investments
(cost $27,137,163) 26,659,771
LONG TERM DEBT SECURITIES-42.6%
FINANCIAL-2.8%
Ford Motor Credit Co.
6.125%, 1/09/06 750 681,113
John Hancock Mutual Life Insurance Co.
7.375%, 2/15/24 (a) 800 740,384
------------
1,421,497
INDUSTRIAL-4.5%
Auburn Hills Trust
12.00%, 5/01/20 550 794,315
Northrop Grumman Corp.
7.75%, 3/01/16 750 735,703
Time Warner, Inc.
8.375%, 3/15/23 750 725,393
------------
2,255,411
YANKEE BONDS-0.7%
St. George Bank, Ltd.
7.15%, 10/15/05 (a) 350 337,418
U.S. GOVERNMENT & AGENCIES-34.6%
Federal Home Loan Mortgage Corp. (TBA)
7.00%, 9/01/11 1,025 1,009,625
12
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
Federal National Mortgage Association
6.00%, 4/01/11 $ 397 $ 374,479
6.50%, 5/01/11 659 636,000
6.50%, 6/01/11 740 713,868
7.00%, 5/01/26 1,015 974,237
8.50%, 12/01/25 1,089 1,114,515
Government National Mortgage Association
7.50%, 1/15/26 814 799,747
U.S. Treasury Bonds
6.00%, 2/15/26 545 478,832
7.625%, 2/15/25 200 214,124
U.S. Treasury Notes
5.75%, 8/15/03 2,420 2,294,087
6.125%, 5/15/98 6,305 6,299,073
6.50%, 8/15/05 1,450 1,423,045
7.75%, 1/31/00 900 935,019
17,266,651
Total Long Term Debt Securities
(cost $21,479,130) 21,280,977
SHORT-TERM DEBT SECURITIES-4.4%
Federal Home Loan Bank
5.62%, 8/01/96
(amortized cost $2,200,000) 2,200 2,200,000
TOTAL INVESTMENTS-100.3%
(cost $50,816,293) 50,140,748
Other assets less liabilities-(0.3%) (162,675)
NET ASSETS-100% $49,978,073
* Non-income producing security.
(a) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to certain qualified institutional buyers. At July 31,
1996, these securities amounted to $1,077,802 representing 2.2% of net assets.
Glossary:
ADR - American Depository Receipt
ORD - Ordinary
TBA - To be announced
See notes to financial statements.
13
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1996 ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $50,816,293) $50,140,748
Cash, at value (cost $97,975) 98,555
Receivable for investment securities sold 1,372,369
Receivable for shares of beneficial interest sold 454,144
Interest and dividends receivable 377,319
Total assets 52,443,135
LIABILITIES
Payable for investment securities purchased 1,814,821
Payable for shares of beneficial interest redeemed 477,028
Distribution fee payable 32,032
Advisory fee payable 3,885
Accrued expenses 137,296
Total liabilities 2,465,062
NET ASSETS $49,978,073
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 30
Additional paid-in capital 43,709,645
Undistributed net investment income 395,373
Accumulated net realized gain on investments and foreign
currency transactions 6,564,036
Net unrealized depreciation on investments and foreign
currency denominated assets and liabilities (691,011)
$49,978,073
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($18,328,799/
991,749 shares of beneficial interest issued and outstanding) $18.48
Sales charge-4.25% of public offering price .82
Maximum offering price $19.30
CLASS B SHARES
Net asset value and offering price per share ($28,492,319/
1,792,816 shares of beneficial interest issued and outstanding) $15.89
CLASS C SHARES
Net asset value and offering price per share ($3,156,955/
198,672 shares of beneficial interest issued and outstanding) $15.89
See notes to financial statements.
14
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1996 ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $1,132,905
Dividends(net of foreign taxes withheld of $15,350) 513,975 $1,646,880
EXPENSES
Advisory fee 396,099
Distribution fee - Class A 46,138
Distribution fee - Class B 337,604
Distribution fee - Class C 36,733
Custodian 104,948
Transfer agency 97,885
Audit and legal 68,617
Registration 39,143
Printing 29,450
Trustees' fees 25,249
Amortization of organization expenses 951
Miscellaneous 12,844
Total expenses 1,195,661
Less: expenses waived and assumed by adviser
(see Note B) (194,243)
Net expenses 1,001,418
Net investment income 645,462
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on security transactions 7,958,720
Net realized loss on foreign currency transactions (4,384)
Net change in unrealized appreciation of investments (4,546,829)
Net change in unrealized appreciation on foreign
currency denominated assets and liabilities (4,609)
Net gain on investments and foreign currency transactions 3,402,898
NET INCREASE IN NET ASSETS FROM OPERATIONS $4,048,360
See notes to financial statements.
15
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
1996 1995
------------ -----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 645,462 $ 803,136
Net realized gain on investments and foreign
currency transactions 7,954,336 1,585,794
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities (4,551,438) 3,225,074
Net increase in net assets from operations 4,048,360 5,614,004
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (251,709) (128,387)
Class B (425,006) (351,616)
Class C (52,350) (36,666)
Net realized gain on investments
Class A (479,820) (20,950)
Class B (1,296,269) (105,192)
Class C (159,666) (10,969)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net decrease (3,771,397) (10,129,045)
Total decrease (2,387,857) (5,168,821)
NET ASSETS
Beginning of year 52,365,930 57,534,751
End of year (including undistributed net
investment income of $398,806 and $482,409,
respectively) $49,978,073 $52,365,930
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996 ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Strategic Balanced Fund (the "Fund"), formerly Alliance Balanced Fund,
a series of The Alliance Portfolios (the "Trust"), is registered under the
Investment Company Act of 1940, as a diversified, open-end investment company.
The Funds offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.25%. Class B shares are sold with a
contingent deferred sales charge which declines from 4% to zero depending on
the period of time the shares are held. 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 purchased on or after July 1,
1996 are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. All three classes of shares have
identical voting, dividend, liquidation and other rights, except that each
class bears different distribution expenses and has exclusive votings rights
with respect to its distribution plan. The following is a summary of
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last sales price or, if no sale occurred, at the mean of the bid and asked
price at the regular close of that exchange. Securities traded on the
over-the-counter market are valued at the mean of the closing bid and asked
price. Securities for which current market quotations are not readily available
(including investments which are subject to limitations as to their sale) are
valued at their fair value as determined in good faith by the Board of
Trustees. The Board of Trustees has further determined that the value of
certain portfolio debt securities, other than temporary investments in short
term securities, be determined by reference to valuations obtained from a
pricing service. Restricted securities are valued at fair value as determined
by the Board of Trustees. Securities which mature in 60 days or less are valued
at amortized cost, which approximates market value. The ability of issuers of
debt securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry or region.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $30,000 have been deferred and were
amortized on a straight line basis through September, 1995.
3. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions for the Fund, represents net
foreign exchange gains and losses from holdings of foreign currencies, currency
gains or losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends and foreign
taxes recorded on the Fund's books and the U.S. dollar equivalent amounts
actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities at July 31, 1996
are reflected as a component of unrealized depreciation on investments and
foreign currency denominated assets and liabilities.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts and amortizes premiums as adjustments
to interest income.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
17
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
7. 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 shares of such class, except that the Funds'
Class B and Class C shares bear higher distribution and transfer agent fees.
Expenses attributable to the Fund are charged to the Fund. Expenses of the
Trust are charged to the Fund in proportion to net assets.
8. RECLASSIFICATION OF NET ASSETS
To reflect reclassifications arising from permanent book/tax differences for
the year ended July 31, 1996, $3,433 was reclassified from accumulated net
investment income and $951 was reclassified from additional paid in capital to
accumulated net realized gain on investments and foreign currency transactions.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P., (the "Adviser"), an advisory fee at an annual rate of
.75% of the Fund's average daily net assets. 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
average net assets, respectively, for the Class A, Class B and Class C shares.
Prior to August 2, 1993, the annual expense cap for Class B Shares was 2.15%.
For the year ended July 31, 1996, such reimbursement amounted to $194,243. 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 Fund 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., (the
"Distributor"), 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 $56,589 for the year ended July 31, 1996.
Alliance Fund Distributors, Inc. a wholly owned subsidiary of the Adviser, (the
"Distributor"), serves as the Distributor of the Fund's shares. The Distributor
received front-end sales charges of $1,204 from the sale of Class A shares and
$37,022 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class B shares for the year ended July 31, 1996.
Brokerage commissions paid on securities transactions for the year ended July
31, 1996 amounted to $173,237, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser.
Accrued expenses includes amounts owed to two of the Trustees under a deferred
compensation plan of $50,847.
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 Trustees currently limit payments under the Class A
plan to .30% of the Fund's average daily net assets attributable to Class A
shares. For the year ended July 31, 1996 the Fund paid a distribution fee to
the Distributor of .25% of the Funds' average daily net assets attributed 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 expenses in excess of the distribution
costs reimbursed by the Fund
18
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
in the amount of $957,033 and $290,100 for Class B and C shares, respectively;
such costs may be recovered from the Fund 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 the
Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $60,265,914 and $74,094,709,
respectively, for the year ended July 31, 1996. There were purchases of
$27,871,075 and sales of $21,017,882 of U.S. Government and government agency
obligations for the year ended July 31, 1996. At July 31, 1996, the cost of
securities for federal income tax purposes was $50,838,466. Accordingly, gross
unrealized appreciation of investments was $1,193,098 and gross unrealized
depreciation of investments was $1,890,816 resulting in net unrealized
depreciation of $697,718 excluding foreign currency.
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:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, JULY 31, JULY 31, JULY 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
CLASS A
Shares sold 107,270 215,830 $ 1,979,138 $ 3,566,155
Shares issued in
reinvestment of
dividends and
distributions 37,530 8,938 680,784 138,715
Shares converted
from Class B 488,896 -0- 9,126,460 -0-
Shares redeemed (251,216) (208,409) (4,690,077) (3,417,256)
Net increase 382,480 16,359 $ 7,096,305 $ 287,614
CLASS B
Shares sold 328,916 323,750 $ 5,260,317 $ 4,608,223
Shares issued in
reinvestment of
dividends and
distributions 98,905 30,603 1,547,870 412,834
Shares converted to
Class A (566,688) -0- (9,126,460) -0-
Shares redeemed (466,102) (1,047,251) (7,499,239) (14,853,928)
Net decrease (604,969) (692,898) $(9,817,512) $(9,832,871)
CLASS C
Shares sold 59,772 88,024 $ 956,171 $ 1,241,321
Shares issued in
reinvestment of
dividends and
distributions 11,410 3,015 178,564 40,701
Shares redeemed (136,703) (132,830) (2,184,925) (1,865,810)
Net decrease (65,521) (41,791) $(1,050,190) $ (583,788)
19
FINANCIAL HIGHLIGHTS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------
MAY 1,1994
YEAR ENDED JULY 31, TO YEAR ENDED APRIL 30,
------------------------ JULY 31, ------------------------------------
1996 1995 1994(C) 1994 1993 1992
----------- ----------- ------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.98 $16.26 $16.46 $16.97 $17.06 $14.48
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .35(d) .34 .07 .16 .39 .27
Net realized and unrealized gain (loss)
on investments 1.08 1.64 (.27) .74 .59 2.80
Net increase (decrease) in net asset
value from operations 1.43 1.98 (.20) .90 .98 3.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.32) (.22) -0- (.24) (.42) (.17)
Distributions from net realized gains (.61) (.04) -0- (1.17) (.65) (.32)
Total dividends and distributions (.93) (.26) -0- (1.41) (1.07) (.49)
Net asset value, end of period $18.48 $17.98 $16.26 $16.46 $16.97 $17.06
TOTAL RETURN
Total investment return based on net
asset value (b) 8.05% 12.40% (1.22)% 5.06% 5.85% 20.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,329 $10,952 $9,640 $9,822 $8,637 $6,843
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.40% 1.40% 1.40%(f) 1.40% 1.40% 1.40%
Expenses, before waivers/reimbursements 1.76% 1.81% 1.94%(f) 1.70% 1.85% 2.05%
Net investment income 1.78% 2.07% 1.63%(f) 1.67% 2.29% 1.92%
Portfolio turnover rate 173% 172% 21% 139% 98% 103%
</TABLE>
See footnote summary on page 21.
20
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------
MAY 1,1994
YEAR ENDED JULY 31, TO YEAR ENDED APRIL 30,
------------------------ JULY 31, ------------------------------------
1996 1995 1994(C) 1994 1993 1992
----------- ----------- ------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.56 $14.10 $14.30 $14.92 $15.51 $13.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .16(d) .22 .03 .06 .23 .22
Net realized and unrealized gain (loss)
on investments .98 1.40 (.23) .63 .53 2.70
Net increase (decrease) in net asset
value from operations 1.14 1.62 (.20) .69 .76 2.92
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.20) (.12) -0- (.14) (.25) (.29)
Distributions from net realized gains (.61) (.04) -0- (1.17) (1.10) (1.08)
Total dividends and distributions (.81) (.16) -0- (1.31) (1.35) (1.37)
Net asset value, end of period $15.89 $15.56 $14.10 $14.30 $14.92 $15.51
TOTAL RETURN
Total investment return based on net
asset value (b) 7.41% 11.63% (1.40)% 4.29% 4.96% 20.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $28,492 $37,301 $43,578 $43,616 $36,155 $31,842
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.10% 2.10% 2.10%(f) 2.10% 2.15% 2.15%
Expenses, before waivers/reimbursements 2.47% 2.49% 2.64%(f) 2.42% 2.56% 2.70%
Net investment income .99% 1.38% .92%(f) .93% 1.55% 1.34%
Portfolio turnover rate 173% 172% 21% 139% 98% 103%
</TABLE>
See footnote summary on page 21.
21
ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MAY 1,1994 AUGUST 2,
YEAR ENDED JULY 31, TO 1993(E)
----------------------- JULY 31, TO
1996 1995 1994(C) APRIL 30,1994
----------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $15.57 $14.11 $14.31 $15.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .14(d) .16 .03 .15
Net realized and unrealized gain (loss)
on investments .99 1.46 (.23) (.17)
Net increase (decrease) in net asset
value from operations 1.13 1.62 (.20) (.02)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.20) (.12) -0- (.14)
Distributions from net realized gains (.61) (.04) -0- (1.17)
Total dividends and distributions (.81) (.16) -0- (1.31)
Net asset value, end of period $15.89 $15.57 $14.11 $14.31
TOTAL RETURN
Total investment return based on
net asset value (b) 7.34% 11.62% (1.40)% .45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $3,157 $4,113 $4,317 $4,289
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.10% 2.10% 2.10%(f) 2.10%(f)
Expenses, before waivers/reimbursements 2.48% 2.50% 2.64%(f) 2.07%(f)
Net investment income .99% 1.38% .93%(f) .69%(f)
Portfolio turnover rate 173% 172% 21% 139%
</TABLE>
(a) Net of fees waived and expenses reimbursed by the Adviser.
(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) The Fund changed its fiscal year end from April 30 to July 31.
(d) Based on average shares outstanding.
(e) Commencement of distribution.
(f) Annualized.
Prior to July 22, 1993, Equitable Capital Management Corporation
(Equitable Capital) served as 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 investment adviser for the
Trust.
22
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE STRATEGIC BALANCED FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE STRATEGIC BALANCED FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Strategic Balanced Fund
(one of the portfolios of The Alliance Portfolios, hereafter referred to as the
"Fund") at July 31, 1996, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by mangement, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at July
31, 1996 by correspondence with the custodian and brokers and the application
of alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
September 18, 1996
23
ALLIANCE STRATEGIC BALANCED 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 CALVERT, VICE PRESIDENT
KATHLEEN A. CORBET, VICE PRESIDENT
WAYNE D. LYSKI, VICE PRESIDENT
BARBARA J. KRUMSIEK, VICE PRESIDENT - MARKETING
EDMUND P. BERGAN, JR., CLERK
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, 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
ROPES & GRAY
One International Place
Boston, MA 02110-2624
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
24
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
25
ALLIANCE STRATEGIC BALANCED FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
ASBAR
