ALLIANCE GROWTH FUND
ANNUAL REPORT
OCTOBER 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE GROWTH FUND
_______________________________________________________________________________
November 29, 1996
Dear Shareholder:
We are pleased to provide you with an update of The Alliance Growth Fund's
performance and investment activity during the fiscal year ended October 31,
1996. In the table below, your Fund's performance is compared with that of the
overall U.S. stock market, represented by the S&P 500 Stock Index, and with the
Russell 1000 Index, which tracks 1,000 large-cap U.S. stocks.
TOTAL RETURNS FOR
PERIODS ENDED OCTOBER 31, 1996
6 MONTHS 12 MONTHS
------------ -------------
ALLIANCE GROWTH FUND
Class A 8.21% 21.65%
Class B 7.83 20.82
Class C 7.82 20.81
S&P 500 STOCK INDEX 9.03 24.02
RUSSELL 1000 INDEX 8.20 22.92
THE S&P AND RUSSELL INDICES ARE UNMANAGED.
The Fund's total returns are based on the net asset values of each class of
shares as of October 31. Additional investment results appear on page 3. A
chart showing the performance of a hypothetical $10,000 initial investment in
Alliance Growth Fund Class B shares from inception through the end of October
1996 is included on page 4.
INVESTMENT ENVIRONMENT
The fiscal year began with significant upward momentum in the stock market.
Corporate profits were growing moderately and, with little inflationary
pressure in evidence, interest rates were declining. By the time of our last
report to you, April 30, the market was up about 13%.
As the Federal Reserve became concerned that accelerating growth rates might
spark inflation, interest rates were raised in July. The stock market reacted
swiftly, with the S&P 500 falling 10% and the Nasdaq giving up even more ground.
As additional economic data became available, it became apparent that the
economy was not gaining strength but weakening. Thus began the current
environment of slow growth, with no recession in sight, accompanied by little
inflation and falling interest rates. This has proved to be a very favorable
climate for equity markets, which have recovered from their summer tailspin and
have moved on to reach new heights.
AREAS OF OPPORTUNITY
Throughout the fiscal year, your fund has maintained significant holdings in
the technology and financial services sectors. At the same time, the portfolio
is significantly underweighted in industrial commodities and capital goods.
While technology stocks were adversely affected during the summer correction,
they have since recovered. We believe computing and communications are still in
the early stages of what will prove to be significant and far-reaching change.
The transition from analog to digital technology is moving beyond just
computers and is rapidly changing the entire communications infrastructure. Our
large holdings in Cisco Systems, 3 Com, Intel and MFS Communications reflect
our strong enthusiasm for the future of the technology sector.
The financial services sector has been a strong performer in recent months,
benefiting from falling interest rates. However, our interest in this sector is
based on more than just the expectation of lower interest rates. Financial
services represent a large and varied sector of the economy with favorable
long-term growth prospects. Our holdings in this industry are well diversified
and include banks, brokerage firms, and insurance and credit card companies.
CURRENT OUTLOOK
The current backdrop of falling interest rates and restrained economic growth
is favorable for equities. However, stock market returns have been running well
above long-term averages for the last two years and it is only common sense to
suggest that this cannot last
1
ALLIANCE GROWTH FUND
_______________________________________________________________________________
indefinitely. We do not yet see the kinds of economic or financial strains that
would provoke a bear market, but we believe returns will be more moderate in
the year ahead. Having said that, we see no reason to think that long-term
investment in the stock market will not bring its traditional rewards.
As always, we appreciate your continued interest and investment in the Alliance
Growth Fund.
Sincerely,
John D. Carifa
Chairman and President
Tyler J. Smith
Portfolio Manager
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 GROWTH FUND
_______________________________________________________________________________
Alliance Growth Fund seeks long-term growth of capital. The Fund invests
principally in a diversified portfolio of equity securities of companies with a
favorable outlook for earnings and whose rate of growth is expected to exceed
that of the United States economy over time.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURN AS OF OCTOBER 31, 1996
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +21.65% +16.49%
. Five Years +18.23% +17.20%
. Since Inception* +22.29% +21.44%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +20.82% +16.82%
. Five Years +17.41% +17.41%
. Since Inception*(a) +20.29% +20.29%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
. One Year +20.81% +19.81%
. Since Inception* +15.29% +15.29%
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 front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and Class C (1% year 1). 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.
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
3
ALLIANCE GROWTH FUND
_______________________________________________________________________________
ALLIANCE GROWTH FUND
GROWTH OF A $10,000 INVESTMENT:
10/31/87 TO 10/31/96
$54,575
$49,575
$44,575
$39,575
$34,575
$29,575
$24,575
$19,575
$14,575
$9,575
10/31/87 10/31/96
GROWTH FUND CLASS B: $52,353
RUSSELL 1000
S&P 500
This chart illustrates the total value of a hypothetical $10,000 investment in
Class B shares. A contingent deferred sales charge (CDSC) is not reflected in
this illustration since the hypothetical investment exists for a period beyond
which a CDSC would be applicable. Performance for Class A and C shares will
vary from the results shown above due to differences in expenses charged to
those classes. Results should not be considered representative of future gains
or losses.
Both the S&P 500 Stock Index and the Russell 1000 Index are unmanaged. The S&P
500 tracks 500 companies and is a common measure of the overall U.S. stock
market. The Russell 1000 measures the performance of the 1,000 largest U.S.
stocks as measured by price-to-book ratios.
Growth Fund
S&P 500
Russell 1000
4
TEN LARGEST HOLDINGS*
OCTOBER 31, 1996 ALLIANCE GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Cisco Systems, Inc. $ 187,617,000 5.5%
3Com Corp. (common stocks and bonds) 182,621,137 5.4
Intel Corp. 173,594,300 5.1
MFS Communications Co., Inc. (common and pfd. stock) 143,591,500 4.2
Travelers Group, Inc. 122,580,587 3.6
American International Group, Inc. 102,580,019 3.0
Loews Corp. 92,457,375 2.7
Ceridian Corp. 79,107,213 2.3
Merck & Co., Inc. 64,132,950 1.9
Philip Morris Cos., Inc. 62,336,625 1.9
$1,210,618,706 35.6%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED OCTOBER 31, 1996
_______________________________________________________________________________
SHARES
--------------------------------
PURCHASES BOUGHT HOLDINGS 10/31/96
- ------------------------------------------------------------------------
3Com Corp. 1,312,700 2,620,300
AutoZone, Inc. 2,136,400 2,136,400
Canadian Pacific, Ltd. 1,380,000 1,380,000
Ceridian Corp. 1,594,100 1,594,100
CUC International, Inc. 2,347,400 2,347,400
Intel Corp. 1,249,000 1,625,600
Merck & Co., Inc. 426,200 865,200
MFS Communications Co., Inc. 2,416,000 2,416,000
NationsBank Corp. 417,000 417,000
TCI Group Series A 1,974,000 4,939,500
SALES SOLD HOLDINGS 10/31/96
- ------------------------------------------------------------------------
Bay Networks, Inc. 1,303,700 446,850
Donnelley (R.R.) & Sons Co. 879,200 -0-
Eastman Kodak Co. 365,000 130,700
Great Lakes Chemical Corp. 371,000 -0-
ITT Industries, Inc. 848,000 -0-
Mannesmann AG (ADR) 123,000 82,000
Motorola, Inc. 746,800 -0-
Oracle Systems Corp. 1,600,000 1,088,250
Philip Morris Cos., Inc. 435,900 673,000
Texas Instruments, Inc. 559,500 671,700
* Adjusted for market value of call options written.
5
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS AND OTHER
INVESTMENTS-96.2%
TECHNOLOGY-40.3%
COMPUTER HARDWARE-3.4%
Ceridian Corp. (a) 1,594,100 $ 79,107,213
COMPAQ Computer Corp. (a) (b) 400,000 27,850,000
Dell Computer Corp. (a) (b) 100,000 8,137,500
------------
115,094,713
COMPUTER PERIPHERALS-0.6%
Seagate Technology, Inc. (a) 293,000 19,557,750
COMPUTER SOFTWARE & SERVICES-6.4%
Electronic Data Systems Corp. 1,038,000 46,710,000
Informix Corp. (a) (b) 555,000 12,314,063
Microsoft Corp. (a) 239,000 32,802,750
Oracle Systems Corp. (a) (b) 1,088,250 46,046,578
Sterling Commerce, Inc. (a) 1,626,044 45,732,487
Sterling Software, Inc. (a) 1,021,000 33,182,500
------------
216,788,378
ELECTRONICS-14.4%
3Com Corp. (a) (b) 2,620,300 177,197,787
Bay Networks, Inc. (a) (b) 446,850 9,048,713
Cabletron Systems, Inc. (a) (b) 218,900 13,653,888
Cisco Systems, Inc. (a) (b) 3,068,000 189,832,500
EMC Corp. (a) (b) 1,862,300 48,885,375
General Instrument Corp. (a) 1,021,300 20,553,662
Texas Instruments, Inc. (b) 671,700 32,325,562
------------
491,497,487
OFFICE EQUIPMENT & SERVICES-1.0%
Xerox Corp. 711,300 32,986,538
PRINTING, PUBLISHING & BROADCASTING-0.2%
Cox Communications, Inc. Cl.A (a) 341,300 6,314,050
SEMI-CONDUCTORS & RELATED-7.1%
Altera Corp. (a) (b) 529,500 32,829,000
Intel Corp. (b) 1,625,600 178,612,800
National Semiconductor Corp. (a) (b) 1,605,300 30,902,025
------------
242,343,825
TELECOMMUNICATIONS-7.2%
AirTouch Communications, Inc. (a) 1,356,700 35,443,787
DSC Communications Corp. (a) (b) 1,027,400 14,255,175
Loral Space & Communications (a) 820,000 13,017,500
MFS Communications Co., Inc. (a) (b) 2,416,000 121,102,000
MFS Communications Co., Inc. pfd. 8.00% 318,000 27,586,500
Millicom International Cellular,
S.A. (a) (c) 312,800 12,433,800
Rogers Cantel Mobile Communications,
Inc. Cl.B (a) 139,000 3,249,125
Teleport Communications Group, Inc. Cl.A (a) 20,000 490,000
U.S. West, Inc. (a) 455,000 7,109,375
United States Cellular Corp. (a) 365,500 10,736,563
------------
245,423,825
-------------
1,370,006,566
CREDIT SENSITIVE-24.5%
BANKS-4.0%
Chase Manhattan Corp. 497,952 42,699,384
Corestates Financial Corp. 110,000 5,348,750
First Chicago NBD Corp. 415,000 21,165,000
First Chicago NBD Corp., pfd. 5.50% 90,000 1,462,500
First Union Corp. 345,000 25,098,750
NationsBank Corp. 417,000 39,302,250
------------
135,076,634
FINANCIAL SERVICES-2.0%
Dean Witter, Discover & Co. 301,700 17,762,588
Federal National Mortgage Assn. 723,200 28,295,200
Mercury Finance Co. 1,933,500 22,235,250
------------
68,293,038
6
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
INSURANCE-12.9%
20th Century Industries, Inc. (a) 1,098,300 $ 17,572,800
Acceptance Insurance Cos., Inc. (a) 637,300 12,905,325
Allstate Corp. 649,410 36,448,136
American International Group, Inc. 944,350 102,580,019
ITT Hartford Group, Inc. 693,000 43,659,000
PennCorp. Financial Group, Inc. 474,500 16,429,562
PMI Group, Inc. 512,800 29,293,700
Progressive Corp. (Ohio) 708,000 48,675,000
PXRE Corp. 8 198
TIG Holdings, Inc. 316,500 9,138,938
Travelers Group, Inc. 2,259,550 122,580,587
------------
439,283,265
REAL ESTATE-5.0%
Bradley Real Estate, Inc. 207,982 3,457,701
CBL & Associates Properties, Inc. 229,000 5,410,125
Essex Property Trust 146,900 3,801,038
First Industrial Realty Trust, Inc. 147,000 3,803,625
Highwoods Properties, Inc. 459,200 13,202,000
JP Realty, Inc. 755,300 17,183,075
Koger Equity, Inc. (a) 1,762,571 27,540,172
Macerich Co. 1,051,400 23,130,800
Manufactured Home Communities, Inc. 160,000 3,120,000
Oasis Residential, Inc., 40,700 976,800
Prentiss Properties Trust (a) 222,500 4,589,063
Simon DeBartolo Group, Inc. 276,500 7,292,687
Spieker Properties, Inc. 426,200 13,105,650
Storage USA, Inc. 383,700 13,333,575
Summit Properties, Inc. 771,700 15,144,612
Sun Communities, Inc. 520,000 14,885,000
------------
169,975,923
UTILITY/TELEPHONE-0.3%
Telephone and Data Systems, Inc. 317,600 11,116,000
MISCELLANEOUS-0.3%
MBNA Corp. 270,700 10,218,925
------------
833,963,785
CONSUMER NONCYCLICALS-13.1%
BEVERAGES-0.6%
Coca-Cola Femsa, S.A. (ADR) (d) 434,700 10,269,787
PepsiCo, Inc. 294,000 8,709,750
------------
18,979,537
COMMERCIAL SERVICES-2.2%
ADT Ltd. (a) 835,000 16,491,250
CUC International, Inc. (a) (b) 2,347,400 57,511,300
------------
74,002,550
DRUGS-4.6%
Abbott Laboratories 500,000 25,312,500
Amgen, Inc. * 81,000 4,966,313
Astra AB, Series A (e) 380,000 17,452,134
Boston Scientific Corp. (a) 35,000 1,903,125
Gensia, Inc. pfd. (a) (f) 68,500 976,125
Merck & Co., Inc. 865,200 64,132,950
Pfizer, Inc. 437,000 36,161,750
Schering-Plough Corp. 100,000 6,400,000
------------
157,304,897
ENTERTAINMENT & LEISURE-0.1%
Walt Disney Co. 74,000 4,874,750
HOSPITAL SUPPLIES & SERVICES-1.1%
Baxter International, Inc. 17,000 707,625
Healthsource, Inc. (a) 273,000 3,344,250
Medtronic, Inc. 476,900 30,700,438
Quest Medical, Inc. (a) 265,225 1,690,809
------------
36,443,122
TOBACCO-4.5%
Loews Corp. 1,119,000 92,457,375
Philip Morris Cos., Inc. 673,000 62,336,625
------------
154,794,000
------------
446,398,856
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
CONSUMER CYCLICALS-8.0%
AUTO & RELATED-1.6%
AutoZone, Inc. (a) 2,136,400 $ 54,745,250
PHOTO & OPTICAL-0.3%
Eastman Kodak Co. 130,700 10,423,325
RESTAURANTS & LODGING-1.2%
American General Hospitality Corp. 501,000 9,957,375
ITT Corp. (a) 723,800 30,399,600
------------
40,356,975
RETAILING-GENERAL-4.7%
CompUSA, Inc. (a) (b) 150,000 6,937,500
Home Depot, Inc. 508,000 27,813,000
Lowes Cos., Inc. 1,012,500 40,879,688
Sears Roebuck & Co. 1,123,500 54,349,312
Wal-Mart Stores, Inc. 1,130,000 30,086,250
------------
160,065,750
RETAILING-TOYS-0.2%
Hasbro, Inc. 185,000 7,191,875
------------
272,783,175
BUSINESS SERVICES-5.3%
PRINTING, PUBLISHING & BROADCASTING-3.0%
Comcast Corp. Cl.A (SPL) K 546,500 8,060,875
TCI Group Series A (a) 4,939,500 61,435,032
Tele-Communications, Inc.-Liberty Media
Group Cl.A (a) 621,375 16,000,406
Time Warner, Inc. 117,400 4,373,150
Westinghouse Electric Corp. 830,000 14,213,750
------------
104,083,213
RAILROADS-2.2%
Canadian Pacific, Ltd. (c) 1,380,000 34,845,000
Union Pacific Corp. 701,866 39,392,229
------------
74,237,229
TRANSPORTATION & SHIPPING-0.1%
Pittston Brinks Group 92,000 2,622,000
------------
180,942,442
ENERGY-2.3%
OIL & GAS SERVICES-2.3%
Gulf Canada Resources, Ltd. (a) 8,834,100 60,734,437
Union Pacific Resources Group, Inc. 598,677 16,463,618
------------
77,198,055
CAPITAL GOODS-1.6%
ENVIRONMENTAL CONTROL-0.5%
WMX Technologies, Inc. 467,000 16,053,125
MACHINERY-1.1%
Applied Materials, Inc. (a) (b) 225,000 5,948,437
Mannesmann AG (ADR) (g) 82,000 31,863,544
------------
37,811,981
------------
53,865,106
BASIC MATERIALS-1.1%
CHEMICALS-1.1%
Freeport McMoran, Inc. 1 32
Monsanto Co. 772,500 30,610,312
W.R. Grace & Co. (a) 112,000 5,936,000
------------
36,546,344
ENGINEERING & CONSTRUCTION-0.0%
Cornell Corrections, Inc. (a) 16,300 171,150
------------
36,717,494
DIVERSIFIED-0.0%
Hanson Plc warrants,
expiring 9/30/97 (a) (h) 1,724,137 7,015
ADR
B warrants, expiring
9/30/97 (a) (h) 216,504 6,766
------------
13,781
Total Common and Preferred Stocks
(cost $2,638,015,355) 3,271,889,260
8
ALLIANCE GROWTH FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
LONG-TERM DEBT SECURITIES-1.3%
ELECTRONICS-1.3%
3Com Corp. 10.25%, 11/01/01 (f) $ 8,500 $ 17,658,750
Altera Corp.5.75%, 6/15/02 (f) 16,640 23,004,800
Cypress Semiconductor Corp.
3.15%, 3/15/01 (f) 2,500 2,281,250
Total Long-Term Debt Securities
(cost $35,049,944) 42,944,800
SHORT-TERM DEBT SECURITIES-4.3%
Federal Home Loan Bank
5.16%, 11/04/96 12,000 11,994,840
5.16%, 11/14/96 10,000 9,981,367
5.17%, 11/21/96 8,900 8,874,437
5.18%, 11/20/96 29,215 29,135,129
Federal Home Loan Mortgage Corp.
5.16%, 11/19/96 20,000 19,948,400
5.18%, 12/11/96 20,000 19,887,146
5.19%, 11/14/96 2,474 2,469,363
5.20%, 11/04/96 24,700 24,689,297
Federal National Mortgage Assn.
5.15%, 11/05/96 10,000 9,994,278
Student Loan Marketing Assn.
5.53%, 11/01/96 9,100 9,100,000
Total Short-Term Debt Securities
(amortized cost $146,074,257) 146,074,257
TOTAL INVESTMENTS-101.8%
(cost $2,819,139,556) 3,460,908,317
COMPANY CONTRACTS(i) VALUE
- -------------------------------------------------------------------------
OUTSTANDING CALL OPTIONS WRITTEN-(1.3%)
3Com Corp.
expiring Dec 1996
@ $56.50 2,000 $ (2,496,000)
@ $57.13 1,000 (1,220,000)
@ $61.25 1,000 (899,100)
@ $64.25 1,500 (1,087,500)
@ $64.63 1,000 (650,000)
expiring Jan 1997
@ $60.25 1,500 (1,494,000)
@ $62.50 1,000 (894,800)
@ $62.75 1,000 (915,600)
@ $63.38 1,000 (774,800)
@ $64.00 500 (423,100)
@ $65.59 1,000 (690,000)
@ $65.88 1,000 (690,500)
Altera Corp.
expiring Nov 1996
@ $42.38 1,000 (1,967,000)
@ $44.38 2,000 (3,518,000)
expiring Dec 1996
@ $44.13 1,000 (1,830,000)
@ $51.25 1,000 (1,236,000)
Applied Materials, Inc.
expiring Nov 1996
@ $24.88 1,000 (175,000)
expiring Dec 1996
@ $23.38 250 (94,500)
@ $24.50 1,000 (278,900)
Bay Networks, Inc.
expiring Dec 1996
@ $28.13 1,000 (45,000)
@ $29.38 1,500 (91,500)
expiring Jan 1997
@ $26.56 1,000 (68,000)
@ $26.63 1,000 (73,000)
Cabletron Systems, Inc.
expiring Jan 1997
@ $63.88 500 (249,000)
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS(i) VALUE
- -------------------------------------------------------------------------
Cisco Systems, Inc.
expiring Nov 1996
@ $57.50 1,000 $ (498,000)
@ $57.88 1,000 (488,000)
expiring Dec 1996
@ $64.00 1,000 (386,000)
expiring Jan 1997
@ $63.38 1,000 (481,000)
@ $65.25 1,000 (362,500)
COMPAQ Computer Corp.
expiring Dec 1996
@ $64.50 500 (374,500)
expiring Jan 1997
@ $67.63 1,000 (583,000)
@ $72.88 500 (194,000)
@ $73.00 500 (245,500)
@ $74.00 500 (172,500)
CompUSA, Inc.
expiring Feb 1997
@ $46.25 1,500 (789,000)
CUC International, Inc.
expiring Dec 1996
@ $25.83 1,500 (136,500)
@ $26.50 1,500 (99,000)
expiring Jan 1997
@ $23.17 1,500 (156,000)
@ $27.17 2,250 (128,250)
Dell Computer Corp.
expiring Dec 1996
@ $80.50 500 (366,500)
expiring Jan 1997
@ $78.50 500 (432,500)
DSC Communications Corp.
expiring Nov 1996
@ $29.88 1,000 -0-
@ $32.75 1,000 -0-
expiring Dec 1996
@ $27.88 500 (500)
@ $28.50 1,000 (15,000)
EMC Corp.
expiring Jan 1997
@ $26.50 500 (97,500)
Informix Corp.
expiring Nov 1996
@ $25.63 1,000 (10,600)
expiring Dec 1996
@ $24.38 1,000 (91,000)
@ $28.75 500 (18,500)
@ $30.88 500 (10,500)
expiring Jan 1997
@ $20.75 1,550 (527,000)
@ $27.00 1,000 (92,000)
Intel Corp.
expiring Dec 1996
@ $96.75 1,000 (1,537,000)
@ $98.88 1,000 (1,355,000)
expiring Jan 1997
@ $104.75 1,000 (992,000)
@ $109.75 1,000 (797,000)
@ $112.38 500 (337,500)
MFS Communications Co., Inc.
expiring Jan 1997
@ $45.13 1,000 (659,000)
@ $45.13 1,500 (1,032,000)
@ $45.38 1,000 (635,000)
@ $47.50 1,000 (539,000)
@ $49.95 2,000 (820,000)
@ $50.38 1,000 (389,000)
@ $51.63 1,000 (335,000)
@ $51.88 1,500 (487,500)
expiring Feb 1997
@ $50.50 500 (200,500)
National Semiconductor Corp.
expiring Dec 1996
@ $20.00 1,000 (110,000)
expiring Jan 1997
@ $18.88 1,000 (197,000)
@ $19.25 1,500 (246,600)
@ $19.38 1,000 (155,300)
Oracle Systems Corp.
expiring Nov 1996
@ $38.88 2,250 (774,675)
@ $39.63 1,000 (277,000)
@ $40.13 2,250 (616,500)
@ $41.38 1,500 (268,500)
@ $41.75 750 (125,250)
@ $41.75 1,500 (229,500)
10
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS(i) VALUE
- -------------------------------------------------------------------------
expiring Dec 1996
@ $43.00 500 $ (125,000)
@ $43.88 1,000 (207,000)
Texas Instruments, Inc.
expiring Nov 1996
@ $47.50 1,000 (145,000)
expiring Dec 1996
@ $46.25 1,000 (326,000)
@ $50.50 1,000 (172,600)
@ $54.88 500 (44,000)
expiring Jan 1997
@ $49.00 1,000 (321,000)
@ $50.50 500 (135,000)
Total Outstanding Call Options Written
(premiums received $36,773,825) (43,208,075)
VALUE
- -------------------------------------------------------------------------
TOTAL INVESTMENTS NET OF OUTSTANDING CALL
OPTIONS WRITTEN -100.5%
(cost $2,782,365,731) $3,417,700,242
Other assets less liabilities-(0.5%) (15,720,533)
NET ASSETS-100% $3,401,979,709
(a) Non-income producing security.
(b) Security on which options are written (shares subject to call have an
aggregate market value of $422,679,689).
(c) Canadian holding.
(d) Country of origin--Mexico.
(e) Country of origin--Sweden.
(f) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31, 1996,
these securities amounted to $43,920,925 or 1.29% of net assets.
(g) Country of origin--Germany.
(h) Country of origin--United Kingdom.
(i) One contract relates to 100 shares.
Glossary:
ADR - American Depository Receipt
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 ALLIANCE GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $2,819,139,556) $3,460,908,317
Cash, at value (cost $5,602,224) 5,607,172
Receivable for investment securities sold 24,767,092
Receivable for shares of beneficial interest sold 14,886,494
Dividends and interest receivable 2,573,828
Total assets 3,508,742,903
LIABILITIES
Payable for investment securities purchased 51,220,674
Outstanding call options written, at value
(premiums received $36,773,825) 43,208,075
Payable for shares of beneficial interest redeemed 6,623,319
Distribution fee payable 2,550,349
Advisory fee payable 2,131,695
Accrued expenses 1,029,082
Total liabilities 106,763,194
NET ASSETS $3,401,979,709
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 1,137
Additional paid-in capital 2,660,909,394
Distributions in excess of net investment income (86,910)
Accumulated net realized gain on investments 105,856,434
Net unrealized appreciation of investments, options and
foreign currency denominated assets and liabilities 635,299,654
$3,401,979,709
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($499,458,683/
14,307,587 shares of beneficial interest issued and outstanding) $34.91
Sales charge--4.25% of public offering price 1.55
Maximum offering price $36.46
CLASS B SHARES
Net asset value and offering price per share ($2,498,096,479/
85,524,622 shares of beneficial interest issued and outstanding) $29.21
CLASS C SHARES
Net asset value and offering price per share ($403,478,072/
13,806,506 shares of beneficial interest issued and outstanding) $29.22
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share ($946,475
/27,111 shares of beneficial interest issued and outstanding) $34.91
See notes to financial statements.
12
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996 ALLIANCE GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld
of $189,385) $34,211,776
Interest 4,943,685
$ 39,155,461
EXPENSES
Advisory fee 20,263,705
Distribution fee - Class A 1,164,975
Distribution fee - Class B 20,009,061
Distribution fee - Class C 3,125,766
Transfer agency 4,893,030
Printing 717,273
Registration 455,770
Custodian 345,588
Audit and legal 126,808
Trustees' fees 25,895
Miscellaneous 41,422
Total expenses 51,169,293
Net investment loss (12,013,832)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities transactions 94,500,944
Net realized gain on options transactions 29,090,337
Net realized gain on foreign currency transactions 2,640,456
Net change in unrealized appreciation of securities 403,025,659
Net change in unrealized depreciation of options (4,262,167)
Net change in unrealized appreciation of foreign
currency denominated assets and liabilities (2,635,623)
Net gain on investments 522,359,606
NET INCREASE IN NET ASSETS FROM OPERATIONS $510,345,774
See notes to financial statements.
13
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
-------------- ---------------
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $(12,013,832) $(653,141)
Net realized gain on investments, options,
and foreign currency transactions 126,231,737 48,585,427
Net change in unrealized appreciation
(depreciation) of investments, options,
and foreign currency denominated assets
and liabilities 396,127,869 228,506,420
Net increase in net assets from operations 510,345,774 276,438,706
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (1,878,354) (773,224)
Class B -0- (380,866)
Class C -0- (57,618)
Net realized gain on investments
Class A (6,274,504) (2,882,018)
Class B (39,764,242) (15,615,519)
Class C (6,015,295) (2,362,349)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase 931,724,109 725,770,828
Total increase 1,388,137,488 980,137,940
NET ASSETS
Beginning of year 2,013,842,221 1,033,704,281
End of year $3,401,979,709 $2,013,842,221
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 ALLIANCE GROWTH FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Growth 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 investment company. On April 15, 1996 the Board of
Directors approved the creation of a fourth class of shares, Advisor Class
shares. The Fund offers Class A, Class B, Class C and Advisor Class shares.
Class A shares are sold with a front-end sales charge of up to 4.25%. Class B
shares are sold with a contingent deferred sales charge which declines from
4.00% 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 B
shares purchased on or after August 2, 1993 and held for a period ending eight
years after the end of the calendar month of purchase will convert to Class A
shares. Class C shares purchased on or after July 1, 1996 are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. Advisor Class shares are sold without any initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered solely to investors participating
in fee-based programs. All four classes of shares have identical voting,
dividend, liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on national securities exchanges are valued at the
last sales price or, if no sale occurred, at the mean of the bid and asked
price at the regular close of such 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. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date. Purchases and sales of
portfolio securities are translated at the rates of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when earned or accrued.
Net realized gain on foreign currency transactions represents net foreign
exchange gains and losses from holdings of forward foreign currency contracts,
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 denomintaed assets and liabilities at period end
exchange rates are reflected as a component of unrealized appreciation of
investments and foreign currency denominated assets and liabilities.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. 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.
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
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 outstanding class of shares, based on the proportionate interest
in the Fund represented by the shares on such Class, except that the Fund's
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.
7. RECLASSIFICATION OF NET ASSETS
At October 31, 1996 the Fund reclassed certain components of net assets. The
reclassification resulted in a net decrease to accumulated net realized gains
on investments and foreign currency transactions of $15,050,589 and a net
increase to distribution in excess of net investment income and additional paid
in capital of $14,672,758 and $377,831, respectively.
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 a fee is accrued daily and
paid monthly. The Adviser has agreed, under terms of the advisory agreement, to
reimburse the Fund to the extent that its aggregate expenses (exclusive of
interest, taxes, brokerage, distribution fees, and extraordinary expenses)
exceed the limits prescribed by any state in which the Fund's shares are
qualified for sale.
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 $3,386,317 for the year ended October 31, 1996.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received net
front-end sales charges of $231,038 from the sale of Class A shares and
$2,399,952 and $1,829 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class B and Class C shares, respectively, for
the year ended October 31, 1996.
Brokerage commissions paid on securities transactions for the year ended
October 31, 1996 amounted to $3,395,225, of which $2,500 was paid to Donaldson,
Lufkin & Jenrette Securities Corp. ("DLJ"), an affiliate of the Adviser.
Accrued expenses includes an amount owed to two of the trustees, under a
deferred compensation plan, of $82,339.
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 1% of the Fund's average daily net assets attributable to
the Class A shares and 1% of the average daily net assets attributable to both
Class B and Class C shares. There is no distribution fee on the Advisor Class
shares. The Trustees currently limit payments under the Class A plan to .30 of
1% of the Fund's 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 expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $63,986,412 and $2,280,463 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 accor-
16
ALLIANCE GROWTH FUND
_______________________________________________________________________________
dance 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 $2,076,666,485 and $1,227,220,200,
respectively, for the year ended October 31, 1996. There were purchases of
$19,257,580 and sales of $4,989,333 of U.S. Government and government agency
obligations for the year ended October 31, 1996.
1. OPTION TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on U.S. and foreign government securities and foreign currencies that
are traded on U.S. and foreign securities exchanges and over-the-counter
markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of the premium and a change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund
bears the market risk of an unfavorable change in the price of the security or
currency underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling or buying a security or currency at a
price different from the current market value.
Transactions in options written for the year ended October 31, 1996 were as
follows:
NUMBER OF
CONTRACTS PREMIUMS
--------- -------------
Options outstanding at beginning of year 44,650 $ 18,649,332
Options written 327,500 136,261,617
Options terminated in closing purchase transactions (144,625) (62,746,457)
Options expired (78,700) (31,841,652)
Options exercised (61,025) (23,549,015)
Options outstanding at October 31, 1996 87,800 $ 36,773,825
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
2. FOREIGN EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward exchange currency contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the original contract and the
closing of such contract is included in net realized gain or loss from foreign
currency transactions. Fluctuations in the value of forward exchange currency
contracts are recorded for financial reporting purposes as unrealized gains or
losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or securities in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from
the potential inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
At October 31, 1996, the Fund had no outstanding forward exchange currency
contracts.
At October 31, 1996, the cost of securities for federal income tax purposes was
$2,830,789,210. Accordingly gross unrealized appreciation of investments was
$782,831,015 and gross unrealized depreciation of investments was $152,711,908
resulting in net unrealized appreciation of $630,119,107.
NOTE E: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $0.00001 par value shares of beneficial
interest authorized divided into four classes, designated Class A, Class B,
Class C and Advisor Class shares. Transactions in shares of beneficial interest
were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 8,865,553 5,137,889 $280,673,093 $138,168,292
Shares issued in
reinvestment of
dividends and
distributions 238,657 136,788 7,133,447 3,174,842
Shares converted
from Class B 1,013,764 -0- 32,613,812 -0-
Shares redeemed (5,484,207) (2,291,772) (173,773,360) (62,614,033)
Net increase 4,633,767 2,982,905 $146,646,992 $ 78,729,101
CLASS B
Shares sold 33,339,591 31,470,527 $887,177,634 $706,760,789
Shares issued in
reinvestment of
dividends and
distributions 1,182,878 631,579 29,773,038 12,397,903
Shares converted
to Class A (1,208,740) -0- (32,613,812) -0-
Shares redeemed (8,398,216) (6,927,995) (224,298,136) (156,819,474)
Net increase 24,915,513 25,174,111 $660,038,724 $562,339,218
18
ALLIANCE GROWTH FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
CLASS C
Shares sold 6,734,641 5,581,389 $179,622,559 $125,759,340
Shares issued in
reinvestment of
dividends and
distributions 125,326 61,296 3,155,709 1,203,861
Shares redeemed (2,196,703) (1,894,060) (58,679,911) (42,260,692)
Net increase 4,663,264 3,748,625 $124,098,357 $ 84,702,509
OCT. 2,1996* OCT. 2,1996*
TO TO
OCT. 31,1996 OCT. 31,1996
------------ ------------
ADVISOR CLASS
Shares sold 27,111 $ 940,036
Shares issued in
reinvestment of
dividends and
distributions -0- -0-
Shares redeemed -0- -0-
Net increase 27,111 $ 940,036
* Commencement of distribution.
19
FINANCIAL HIGHLIGHTS ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
MAY 1,1994
YEAR ENDED OCTOBER 31, TO YEAR ENDED APRIL 30,
------------------------ OCTOBER 31, --------------------------------------
1996 1995 1994(a) 1994 1993(B) 1992
----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $29.48 $25.08 $23.89 $22.67 $20.31 $17.94
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .05 .12 .09 (.01)(d) .05(d) .29(d)
Net realized and unrealized gain on
investments 6.20 4.80 1.10 3.55 3.68 3.95
Net increase in net asset value from
operations 6.25 4.92 1.19 3.54 3.73 4.24
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.19) (.11) -0- -0- (.14) (.26)
Distributions from net realized gains (.63) (.41) -0- (2.32) (1.23) (1.61)
Total dividends and distributions (.82) (.52) -0- (2.32) (1.37) (1.87)
Net asset value, end of period $34.91 $29.48 $25.08 $23.89 $22.67 $20.31
TOTAL RETURN
Total investment return based on net
asset value (f) 21.65% 20.18% 4.98% 15.66% 18.89% 23.61%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $499,459 $285,161 $167,800 $102,406 $13,889 $8,228
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.30% 1.35% 1.35%(g) 1.40% 1.40% 1.40%
Expenses, before waivers/reimbursements 1.30% 1.35% 1.35%(g) 1.46% 1.84% 1.94%
Net investment income .15% .56% .86%(g) .32% .20% 1.44%
Portfolio turnover rate 46% 61% 24% 87% 124% 137%
Average commission rate (h) $.0584 -- -- -- -- --
</TABLE>
See footnote summary on page 23.
20
ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
MAY 1,1994
YEAR ENDED OCTOBER 31, TO YEAR ENDED APRIL 30,
-------------------------- OCTOBER 31, ----------------------------------------
1996 1995 1994(a) 1994 1993(B) 1992
------------ ------------ ------------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.78 $21.21 $20.27 $19.68 $18.16 $16.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.12) (.02) .01 (.07)(d)(e) (.06)(d) .17(d)
Net realized and unrealized gain on
investments 5.18 4.01 .93 2.98 3.23 3.67
Net increase in net asset value from
operations 5.06 3.99 .94 2.91 3.17 3.84
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.01) -0- -0- (.03) (.21)
Distributions from net realized gains (.63) (.41) -0- (2.32) (1.62) (2.35)
Total dividends and distributions (.63) (.42) -0- (2.32) (1.65) (2.56)
Net asset value, end of period $29.21 $24.78 $21.21 $20.27 $19.68 $18.16
TOTAL RETURN
Total investment return based on net
asset value (e)(f) 20.82% 19.33% 4.64% 14.79% 18.16% 22.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,498,097 $1,502,020 $751,521 $394,227 $56,704 $37,845
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.99% 2.05% 2.05%(g) 2.10% 2.15% 2.15%
Expenses, before waivers/reimbursements 1.99% 2.05% 2.05%(g) 2.13% 2.52% 2.65%
Net investment income (loss) (.54)% (.15)% .16%(g) (.36)% (.53)% .78%
Portfolio turnover rate 46% 61% 24% 87% 124% 137%
Average commission rate (h) $.0584 -- -- -- -- --
</TABLE>
See footnote summary on page 23.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------
MAY 1,1994 AUGUST 2,
YEAR ENDED OCTOBER 31, TO 1993(C)
------------------------ OCTOBER 31, TO APRIL 30,
1996 1995 1994(A) 1994
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $24.79 $21.22 $20.28 $21.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.12) (.03) .01 (.02)(d)
Net realized and unrealized gain on
investments 5.18 4.02 .93 1.15
Net increase in net asset value from
operations 5.06 3.99 .94 1.13
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.01) -0- -0-
Distributions from net realized gains (.63) (.41) -0- (2.32)
Total dividends and distributions (.63) (.42) -0- (2.32)
Net asset value, end of period $29.22 $24.79 $21.22 $20.28
TOTAL RETURN
Total investment return based on net
asset value (e)(f) 20.81% 19.32% 4.64% 5.27%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $403,478 $226,662 $114,455 $64,030
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.00% 2.05% 2.05%(g) 2.10%(g)
Expenses, before waivers/reimbursements 2.00% 2.05% 2.05%(g) 2.13%(g)
Net investment income (loss) (.55)% (.15)% .16%(g) (.31)%(g)
Portfolio turnover rate 46% 61% 24% 87%
Average commission rate (h) $.0584 -- -- --
</TABLE>
See footnote summary on page 23.
22
ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIOD
ADVISOR CLASS
OCTOBER 2,
1996(C)
TO
OCTOBER 31,
1996
--------------
Net asset value, beginning of period $34.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income -0-
Net realized and unrealized gain on investments .77
Net increase in net asset value from operations .77
Net asset value, end of period $34.91
TOTAL RETURN
Total investment return based on net asset value (e)(f) 2.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $946
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.26%(g)
Expenses, before waivers/reimbursements 1.26%(g)
Net investment income .50%(g)
Portfolio turnover rate 46%
Average commission rate (h) $.0584
(a) The Fund changed its fiscal year end from April 30 to October 31.
(b) 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.
(c) Commencement of distribution.
(d) Net of fee waived and expenses reimbursed by the Adviser.
(e) Per share data based upon average monthly shares outstanding.
(f) 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.
(g) Annualized.
(h) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
23
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE GROWTH FUND
_______________________________________________________________________________
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF ALLIANCE GROWTH 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 Growth Fund (one of the
portfolios of The Alliance Portfolios, hereafter referred to as the "Fund") at
October 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 management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 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
December 13, 1996
24
ALLIANCE GROWTH FUND
_______________________________________________________________________________
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
BARBARA J. KRUMSIEK, VICE PRESIDENT-MARKETING
WAYNE D. LYSKI, VICE PRESIDENT
EDMUND P. BERGAN, JR., CLERK
VINCENT S. NOTO, CONTROLLER & CHIEF ACCOUNTING OFFICER
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
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.
25
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
26
ALLIANCE GROWTH FUND, INC.
1345 Avenue of the Americas
New York, NY10105
(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.
GFAR
