ALLIANCE GROWTH FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GROWTH FUND
_______________________________________________________________________________
June 26, 1998
Dear Shareholder:
We are pleased to report the performance of the Alliance Growth Fund for the
semi-annual reporting period ended April 30, 1998. The following table also
provides performance data for the S&P 500 Stock Index (S&P 500), a measure of
the broad U.S. stock market, and for the Russell 1000 Index, which tracks U.S.
large-cap stocks, for the six and 12-month periods ended April 30, 1998.
INVESTMENT RESULTS*
Periods Ended April 30, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE GROWTH FUND
Class A 17.96% 44.90%
Class B 17.56% 43.87%
Class C 17.55% 43.89%
S&P 500 STOCK INDEX 22.50% 41.06%
RUSSELL 1000 GROWTH STOCK INDEX 21.93% 42.15%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
NET ASSET VALUE AS OF APRIL 30, 1998. ALL FEES AND EXPENSES RELATED TO THE
OPERATION OF THE FUND HAVE BEEN DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR
SALES CHARGES THAT MAY APPLY WHEN SHARES ARE PURCHASED OR REDEEMED. RETURNS FOR
THE FUND INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID DURING THE PERIOD.
TOTAL RETURNS FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT EXPENSES
ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX OF 500 U.S. COMPANIES. THE
RUSSELL 1000 GROWTH STOCK INDEX CONSISTS OF 1000 OF THE LARGEST STOCKS
REPRESENTING APPROXIMATELY 87% OF THE U.S. EQUITY MARKET.
INVESTMENT ENVIRONMENT
The Alliance Growth Fund's 1997 fiscal year ended October 31, 1997, just days
after the sharp sell-off, and equally rapid rebound of the S&P 500, which
resulted from the collapse of a number of Asian currencies and securities
markets. After slightly outpacing the overall market as represented by the S&P
500 and the Dow Jones Industrial Average (DJIA) during the decline, your
Fund lagged well behind in the initial stage of recovery during the month of
November, as the rally was mostly concentrated in very large capitalization
stocks. Since the initial month of recovery, however, your Fund has generally
performed well relative to both the S&P 500 and the DJIA, as the market rally
broadened out, affording an environment which is more favorable to our style of
investing. The Fund emphasizes investment in large and mid-cap stocks, but
underweights the very largest companies which are most heavily represented in
the popular indexes. For the six months ended April 30, 1998, your Fund trailed
several percentage points behind the S&P 500 as the result of its
underweighting in the very largest capitalization stocks. However, for the
12-month period ended April 30, 1998, your Fund outperformed the S&P 500 by a
similar amount, also due to your Fund's underweight position the very largest
companies.
The chaos in the Asian markets and economies has not had any lasting negative
effect on the U. S. market, thus far. Paradoxically, it may have even had a
favorable impact in that it removed, for at least a few months, any likelihood
that the Federal Reserve would raise interest rates. Economic overheating and
resultant higher interest rates were factors that investors had feared most,
but with the sudden weakness in Asia, a weaker economy seemed more likely. As
the first quarter of 1998 unfolded, it offered an unusually favorable climate
for equities. Corporate earnings continued to grow, unemployment moved to the
lowest level in years and, at the same time, inflation and interest rates moved
lower. The news can't get much better than this for equities. What can we do
for an encore?
CURRENT OUTLOOK
It is possible that the months ahead will continue to provide a balmy climate
for equities. The U.S. is, relative to Asia and Europe, still primarily a
domestic economy. Therefore, the impact of bank failures or corporate
insolvencies in Asia should fall much more heavily on the Japanese and European
institutions, rather than on American institutions.
One risk, however, to this favorable climate for equities may be that this is
as good as it can get. Perhaps we have seen the maximum benefit of lower
commodity prices and Federal Reserve forbearance. Perhaps the economy will
finally slow and corporate profits will weaken. If
1
ALLIANCE GROWTH FUND
_______________________________________________________________________________
not, perhaps the Federal Reserve will decide that it is time to cool things
down. At the risk of appearing to repeat the same cautions with a foolish
degree of consistency, we once again note that stock market returns have been
far above long term norms for an unusually long period of time. We would not be
surprised to see the market become less of a one-way street in the months
ahead. That said, we do not believe that there is great short-term risk in the
market. Any market weakness may once again provide a buying opportunity. Our
greater concern is that a continuation of favorable conditions may lead to
speculative over-optimism with an inevitably painful result. A more moderate
result is, of course, possible, and perhaps even likely. Although we expect
more modest returns than those achieved in recent years, we view the longer
term outlook for both the U. S. economy and the U.S. stock market to be quite
favorable.
AREAS OF OPPORTUNITY
We are not inclined to change the areas of emphasis in your Fund that have
predominated for several years now. Financial services and technology still
look most promising and, we continue to underweight the commodity cyclical
areas of the economy. The pace of consolidation in financial services has
quickened, led by huge combinations such as Travelers Group, Inc. and Citicorp.
We expect this trend to continue.
In the technology sector, we have continued to move away from personal computer
oriented chip and box companies, and toward those more oriented toward
networking and telecommunications. There are clearly revolutionary changes
going on in the communications sector as digital technologies replace
traditional analog ones. Digital communications traffic is growing at an
accelerating rate. Changing technology and regulation are creating new winners
and losers. This is arguably the world's largest industry and also its fastest
growing. We think that companies such as WorldCom, Inc., a major
telecommunications company, and Cisco Systems, Inc., a leading provider of
software and hardware for the building of computer networks, will continue to
lead the way for some time to come.
Thank you for your continued interest in the Alliance Growth Fund. We look
forward to reporting to you on market activity and your Fund's investment
results in the coming periods.
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
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF APRIL 30, 1998
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 44.90% 38.73%
Five Years 22.09% 21.03%
Since Inception* 24.26% 23.56%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 43.87% 39.87%
Five Years 21.23% 21.23%
Ten Years** 20.02% 20.02%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 43.89% 42.89%
Since Inception* 20.30% 20.30%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 1998)
CLASS A CLASS B CLASS C
------- ------- -------
1 Year 44.52% 45.88% 48.86%
5 Years 21.07% 21.30% n/a
10 Years n/a 20.32% n/a
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
SEC average annual total returns for the periods shown reflect reinvestment of
all distributions and deduction of the maximum 4.25% front-end sales charges
and applicable contingent deferred sales charges.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/4/90 Class A; 8/23/87 Class B; 8/2/93 Class C.
** Assumes conversion of Class B shares into Class A shares after eight years.
n/a: not applicable.
3
TEN LARGEST HOLDINGS*
APRIL 30, 1998 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
WorldCom, Inc. (common & preferred) $ 355,334,177 5.7%
Cisco Systems, Inc. 315,427,460 5.1
Travelers Group, Inc. 241,641,245 3.9
American International Group, Inc. 226,251,320 3.6
Texas Instruments, Inc. 211,262,938 3.4
Cendant Corp. 164,414,500 2.7
MBNA Corp. 155,986,497 2.5
TCI Ventures Group Series A 146,024,117 2.4
Philip Morris Cos., Inc. 145,174,102 2.3
Chase Manhattan Corp. 138,417,286 2.2
$ 2,099,933,642 33.8%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
_______________________________________________________________________________
SHARES
--------------------------
HOLDINGS
PURCHASES BOUGHT 4/30/98
- ------------------------------------------------------------------------------
American International Group, Inc. 303,200 1,719,725
Bristol-Myers Squibb Co. 1,181,000 1,181,000
Mannesmann AG 127,500 127,500
NationsBank Corp. 1,105,000 1,652,000
Networks Associates, Inc. 750,000 750,000
Nokia Corp. (ADR) 884,800 884,800
Philip Morris Cos., Inc. 1,099,400 3,923,400
TCI Ventures Group Series A 6,498,435 8,951,670
Telecomunicacoes Brasilieras, SA (ADR) 439,400 439,400
Texas Instruments, Inc. 3,735,000 3,735,000
HOLDINGS
SALES SOLD 4/30/98
- ------------------------------------------------------------------------------
ADC Telecommunications, Inc. 665,000 885,000
American Express Co. 1,270,200 600,000
AutoZone, Inc. 1,474,900 472,300
Cendant Corp. 3,300,000 6,614,800
Chrysler Corp. 825,000 111,000
Intel Corp 1,170,000 100,000
MBNA Corp. 1,030,000 4,613,225
Medtronic, Inc. 742,000 587,800
Pfizer, Inc. 550,000 -0-
Teleport Communications Group, Inc. Cl.A 765,000 933,400
* Adjusted for market value of call options written
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ---------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-98.9%
TECHNOLOGY-31.2%
BUSINESS SERVICES-0.7%
Reuters Group Plc (ADR) 657,080 $ 42,586,997
COMMUNICATION EQUIPMENT-0.1%
Ericsson (L.M.) Telephone Co. (ADR) Cl.B 100,000 5,143,750
COMPUTER HARDWARE-0.7%
Compaq Computer Corp. (a)(b) 450,000 12,628,125
International Business Machines Corp. 250,000 28,968,750
-------------
41,596,875
COMPUTER SOFTWARE & SERVICES-5.1%
Ceridian Corp. (a) 2,209,800 124,991,813
First Data Corp. 410,000 13,888,750
Oracle Corp. (a) 200,000 5,175,000
Sterling Commerce, Inc. (a)(b) 2,029,044 86,361,185
Sterling Software, Inc. (a) 3,332,000 88,089,750
-------------
318,506,498
ELECTRONICS-5.8%
3Com Corp. (a)(b) 2,453,700 84,039,225
Applied Magnetics Corp. (a) 100 1,031
EMC Corp. (a) 443,000 20,433,375
SCI Systems, Inc. (a)(b) 400,000 16,475,000
Texas Instruments, Inc. (a)(b) 3,735,000 239,273,438
-------------
360,222,069
NETWORKING PRODUCTS-0.8%
Networks Associates, Inc. (a)(b) 750,000 51,375,000
NETWORKING SOFTWARE-5.3%
Cisco Systems, Inc. (a)(b) 4,474,000 327,720,500
OFFICE EQUIPMENT & SERVICES-0.2%
Xerox Corp. 112,400 12,757,400
SEMI-CONDUCTOR COMPONENTS-0.4%
Intel Corp. (a)(b) 100,000 8,081,250
National Semiconductor Corp. (a)(b) 750,000 16,500,000
-------------
24,581,250
TELECOMMUNICATIONS-11.6%
ADC Telecommunications, Inc.(a) 885,000 26,494,688
Colt Telecom Group Plc (ADR)(a)(c) 587,700 50,615,662
DSC Communications Corp. (a)(b) 3,252,400 58,543,200
Loral Space & Communications (a)(b) 520,000 16,282,500
Millicom International
Cellular, SA (a)(d) 512,800 20,063,300
Nextel Communications, Inc. Cl.A (a)(b) 625,600 17,946,900
Nokia Corp. (ADR) (a)(b) 884,800 59,171,000
Teleport Communications Group,
Inc. Cl.A (a) 933,400 50,286,925
Tellabs, Inc. (a)(b) 765,000 54,219,375
United States Cellular Corp. (a) 363,500 11,904,625
WorldCom, Inc.,
Common (a)(b) 7,137,591 305,355,065
8% cv. pfd. 343,000 50,828,312
-------------
721,711,552
MISCELLANEOUS-0.5%
Solectron Corp. (a)(b) 700,000 31,018,750
-------------
1,937,220,641
FINANCIAL SERVICES-26.3%
BANKING & CREDIT-9.9%
American Express Co. 600,000 61,200,000
Automatic Common Exchange
Security Trust II 337,900 8,785,400
Chase Manhattan Corp. 998,952 138,417,286
First Union Corp. 1,273,000 76,857,375
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ---------------------------------------------------------------------------
MBNA Corp. (a)(b) 4,613,225 $ 156,272,997
Morgan Stanley, Dean Witter,
Discover and Co. 603,400 47,593,175
NationsBank Corp. 1,652,000 125,139,000
-------------
614,265,233
BANKING - MONEY CENTER-0.5%
Citicorp 200,000 30,100,000
BANKING - REGIONAL-0.5%
Fleet Financial Group, Inc. 107,200 9,259,400
Newcourt Credit Group, Inc. 486,300 23,889,488
-------------
33,148,888
INSURANCE-10.3%
20th Century Industries, Inc. 1,063,300 30,304,050
Acceptance Insurance Co. (a) 601,800 13,728,563
American International Group, Inc. 1,719,725 226,251,320
PennCorp Financial Group, Inc. 514,900 13,387,400
PMI Group, Inc. 520,600 42,298,750
Progressive Corp. 358,200 48,513,712
The Hartford Financial Services Group,
Inc. 201,600 22,327,200
Travelers Group, Inc. (b) 3,969,099 242,859,245
-------------
639,670,240
MORTGAGE BANKING-0.1%
Federal National Mortgage Assn. 106,200 6,358,725
REAL ESTATE-4.8%
American General Hospitality Corp. 254,600 6,380,913
Arden Realty Group, Inc. 1,294,700 36,332,519
Boston Properties, Inc. 327,200 10,818,050
CBL & Associates Properties, Inc. 44,000 1,080,750
Entertainment Properties Trust 550,100 10,830,094
Highwoods Properties, Inc. 224,200 7,622,800
JP Realty, Inc. 755,300 18,268,819
Koger Equity, Inc. 1,762,571 37,785,116
Macerich Co. 1,051,400 29,504,912
Prentiss Properties Trust 662,500 16,810,937
Simon DeBartolo Group, Inc. 216,500 7,130,969
Spieker Properties, Inc. 777,200 30,796,550
Starwood Hotels & Resorts 680,879 34,171,615
Storage USA, Inc. 383,700 14,532,637
Summit Properties, Inc. 716,700 14,647,556
Sun Communities, Inc. 520,000 18,200,000
-------------
294,914,237
MISCELLANEOUS-0.2%
Household International, Inc. 102,500 13,472,344
-------------
1,631,929,667
CONSUMER NONCYCLICALS-10.3%
DIVERSIFIED-1.2%
Republic Industries, Inc. (a)(b) 2,722,000 75,705,625
DRUGS-4.2%
Abbott Laboratories 238,300 17,425,688
Astra AB, Series A (e) 545,000 11,192,844
Boston Scientific Corp. (a)(b) 783,400 56,649,612
Gensia, Inc. pfd. (a)(f)(g) 68,500 1,729,625
Merck & Co., Inc. 1,126,200 135,707,100
Schering-Plough Corp. 436,000 34,934,500
-------------
257,639,369
HOSPITAL SUPPLIES & SERVICES-0.7%
Medtronic, Inc. (b) 587,800 30,932,975
Quest Medical, Inc. (a) 265,225 2,552,791
United Healthcare Corp. 125,000 8,781,250
-------------
42,267,016
TOBACCO-4.2%
Loews Corp. 1,150,000 115,071,875
Philip Morris Cos., Inc. (b) 3,923,400 146,391,862
-------------
261,463,737
-------------
637,075,747
6
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- ---------------------------------------------------------------------------
BUSINESS SERVICES-8.0%
PRINTING, PUBLISHING & BROADCASTING-7.3%
CBS Corp. (a)(b) 550,000 $ 19,593,750
Comcast Corp. Cl.A 516,500 18,497,156
Cox Communications, Inc. Cl.A (a) 231,300 10,321,763
News Corp., Ltd. (ADR) 400,000 10,925,000
TCI Group Series A (a) 1,477,865 47,661,146
TCI Ventures Group Series A (a) 8,951,670 146,024,117
Tele-Communications, Inc. -
Liberty Media Group Cl.A (a)(b) 2,414,693 80,137,624
Viacom, Inc. Cl.B (a) 2,106,000 122,148,000
-------------
455,308,556
RAILROADS-0.7%
Canadian Pacific, Ltd. (f) 1,220,000 35,913,750
Union Pacific Corp. 72,866 3,989,413
-------------
39,903,163
-------------
495,211,719
ENERGY-6.3%
DOMESTIC PRODUCERS-0.0%
Apache Corp. 34,000 1,202,750
OIL & GAS SERVICES-6.3%
Baker Hughes, Inc. (b) 376,000 15,228,000
BJ Services Co. (a)(b) 1,105,800 41,467,500
Dresser Industries, Inc. (a)(b) 1,117,400 59,082,525
Gulf Canada Resources, Ltd. (a)(f) 16,045,900 85,243,844
Halliburton Co. (b) 1,560,800 85,844,000
Nabors Industries, Inc. (a) 464,700 11,704,631
Rowan Cos., Inc. (a) 83,000 2,443,313
Santa Fe International Corp. 269,600 10,564,950
Schlumberger, Ltd. 300,000 24,862,500
Transocean Offshore, Inc. 700,000 39,112,500
Union Pacific Resources Group, Inc. 623,477 14,885,513
-------------
390,439,276
-------------
391,642,026
CONSUMER CYCLICALS-4.8%
AIRLINES-1.6%
AMR Corp. (a) 100,000 15,237,500
Delta Air Lines, Inc. 437,200 50,824,500
Northwest Airlines Corp. Cl.A (a) 208,300 10,935,750
UAL Corp. (a) 177,400 15,467,063
USAIR Group, Inc. (a) 100,000 7,112,500
-------------
99,577,313
AUTO & RELATED-0.3%
AutoZone, Inc. (a)(b) 472,300 14,257,556
Chrysler Corp. 111,000 4,460,813
-------------
18,718,369
RETAILING - GENERAL-2.9%
Home Depot, Inc. 1,257,500 87,553,437
The Limited, Inc. (b) 1,735,900 58,261,144
Wal-Mart Stores, Inc. 670,000 33,876,875
-------------
179,691,456
-------------
297,987,138
UTILITY-3.0%
TELEPHONE-3.0%
AT&T Corp. 300,000 18,018,750
MCI Communications Corp. 2,029,700 102,119,281
Telecomunicacoes Brasilieras,
SA (ADR) (a)(b) 439,400 53,524,413
Telephone and Data Systems, Inc. 312,600 14,848,500
-------------
188,510,944
CONSUMER SERVICES-3.0%
BUSINESS SERVICES-2.7%
Cendant Corp. (a)(b) 6,614,800 165,370,000
ENTERTAINMENT & LEISURE-0.3%
Carnival Corp. Cl.A 18,900 1,314,731
Royal Caribbean Cruises, Ltd. 276,400 18,898,850
-------------
20,213,581
-------------
185,583,581
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ---------------------------------------------------------------------------
CAPITAL GOODS-2.9%
ENVIRONMENTAL CONTROL-0.1%
WMX Technologies, Inc. 207,000 $ 6,934,500
MACHINERY-2.6%
Mannesmann AG 127,500 101,172,996
Mannesmann AG (ADR) (h) 77,000 61,102,341
-------------
162,275,337
MISCELLANEOUS-0.2%
Allied-Signal, Inc. 200,000 8,762,500
-------------
177,972,337
HEALTH CARE-2.0%
DRUGS-2.0%
Bristol-Myers Squibb Co. 1,181,000 125,038,375
MULTI INDUSTRY COMPANIES-1.0%
Tyco International, Ltd. 1,154,112 62,899,104
BASIC INDUSTRY-0.1%
CHEMICALS-0.1%
Monsanto Co. 132,500 7,005,938
Total Common & Preferred Stocks
(cost $4,336,657,775) 6,138,077,217
LONG-TERM DEBT SECURITIES-0.5%
ELECTRONICS-0.4%
Altera Corp. conv.
5.75%, 6/15/02 (g) $15,540 24,825,150
HEALTHCARE-0.1%
Centocor, Inc.
4.75%, 2/15/05 (g) 7,960 7,999,800
Total Long-Term Debt Securities
(cost $27,419,670) 32,824,950
CONTRACTS (I)
OR PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- ---------------------------------------------------------------------------
SHORT-TERM DEBT SECURITIES-2.2%
Federal Agricultural Mortgage Corp.
5.45%, 5/20/98 $13,087 $ 13,049,564
Federal Farm Credit Bank
5.39%, 6/02/98 15,000 14,996,661
Federal Home Loan Mortgage Corp.
5.39%, 5/14/98 10,000 9,980,464
5.45%, 5/01/98 10,500 10,500,000
Federal National Mortgage Assn.
5.45%, 5/18/98 20,000 19,948,811
5.57%, 5/06/98 33,400 33,374,811
5.61%, 6/17/98 36,000 35,745,730
Total Short-Term Debt Securities
(cost $137,596,041) 137,596,041
TOTAL INVESTMENTS-101.6%
(cost $4,501,673,486) 6,308,498,208
OUTSTANDING CALL OPTIONS WRITTEN-(1.5%)
3Com Corp.
expiring April 1998
@ $35.75 (1,000) (6,000)
expiring May 1998
@ $34.94 (1,500) (169,500)
@ $36.31 (1,500) (150,000)
expiring June 1998
@ $32.00 (1,000) (379,000)
@ $32.31 (2,000) (692,000)
@ $33.06 (1,000) (277,000)
@ $33.50 (1,500) (447,000)
@ $34.19 (1,000) (203,140)
@ $35.25 (1,500) (180,855)
@ $35.36 (750) (135,750)
@ $35.72 (750) (125,250)
@ $35.75 (1,000) (182,580)
expiring July 1998
@ $32.75 (1,000) (340,000)
@ $33.33 (1,500) (446,115)
8
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (I) VALUE
- ---------------------------------------------------------------------------
AutoZone, Inc.
expiring May 1998
@ $34.63 (1,000) $ (15,000)
expiring June 1998
@ $30.63 (1,000) (126,000)
@ $31.25 (1,500) (142,500)
Baker Hughes, Inc.
expiring May 1998
@ $40.75 (1,000) (180,000)
@ $42.75 (1,500) (154,500)
expiring June 1998
@ $40.75 (1,000) (287,000)
BJ Services Co.
expiring May 1998
@ $35.25 (1,400) (331,800)
expiring June 1998
@ $36.88 (750) (219,750)
Boston Scientific Corp.
expiring May 1998
@ $68.00 (1,000) (515,000)
@ $69.38 (1,000) (465,000)
expiring June 1998
@ $67.84 (1,140) (726,180)
@ $67.88 (360) (228,240)
CBS Corp.
expiring June 1998
@ $35.38 (2,000) (418,000)
Cendant Corp.
expiring May 1998
@ $23.38 (1,500) (358,500)
@ $37.63 (1,500) -0-
@ $39.56 (1,500) (10,500)
@ $41.13 (1,000) -0-
@ $41.13 (1,500) (9,000)
expiring June 1998
@ $23.38 (1,500) (493,500)
@ $36.63 (1,500) (72,000)
@ $36.63 (1,000) (12,000)
Cisco Systems, Inc.
expiring May 1998
@ $62.75 (1,000) (1,071,410)
@ $63.63 (1,000) (1,005,000)
@ $63.75 (2,500) (2,425,000)
@ $64.25 (1,000) (965,900)
@ $67.31 (1,500) (1,083,000)
expiring June 1998
@ $66.63 (2,000) (1,649,980)
@ $67.75 (1,000) (774,000)
@ $68.00 (1,000) (680,250)
@ $69.44 (1,500) (892,500)
@ $70.06 (2,000) (1,256,000)
@ $71.25 (1,000) (490,000)
Compaq Computer Corp.
expiring May 1998
@ $25.81 (2,500) (653,750)
Dresser Industries, Inc.
expiring May 1998
@ $44.00 (2,000) (1,826,000)
expiring June 1998
@ $50.63 (1,000) (454,000)
DSC Communications Corp.
expiring May 1998
@ $17.06 (2,000) (304,000)
@ $17.25 (1,500) (205,200)
@ $18.13 (2,000) (67,380)
expiring June 1998
@ $17.44 (2,000) (282,000)
@ $17.56 (2,000) (296,000)
@ $17.69 (2,000) (350,000)
@ $18.38 (1,000) (103,000)
Halliburton Co.
expiring May 1998
@ $49.38 (1,500) (879,000)
expiring June 1998
@ $50.63 (1,500) (801,000)
@ $52.21 (1,000) (427,000)
Intel Corp.
expiring May 1998
@ $77.88 (1,000) (471,000)
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (I) VALUE
- ---------------------------------------------------------------------------
Loral Space & Communications
expiring May 1998
@ $28.50 (1,000) $ (301,240)
expiring June 1998
@ $31.88 (1,000) (178,000)
MBNA Corp.
expiring May 1998
@ $33.88 (1,500) (121,500)
@ $35.75 (1,000) (45,000)
expiring June 1998
@ $37.63 (2,000) (120,000)
Medtronic, Inc.
expiring May 1998
@ $52.13 (2,000) (308,000)
National Semiconductor Corp.
expiring May 1998
@ $19.88 (2,000) (528,000)
Networks Associates, Inc.
expiring May 1998
@ $65.00 (1,000) (549,000)
expiring June 1998
@ $63.50 (2,000) (1,554,000)
@ $64.50 (1,500) (949,500)
@ $70.38 (1,500) (624,000)
@ $70.63 (1,500) (576,000)
Nextel Communications, Inc.
expiring May 1998
@ $28.44 (300) (23,100)
@ $28.75 (700) (40,600)
Nokia Corp.
expiring May 1998
@ $99.13 (3,000) (5,221,410)
@ $107.50 (3,000) (3,990,000)
expiring June 1998
@ $64.00 (1,000) (632,000)
Philip Morris Cos., Inc.
expiring May 1998
@ $42.13 (1,000) (9,000)
@ $43.13 (1,000) (4,450)
@ $43.25 (1,000) (9,610)
@ $43.75 (1,500) (7,500)
expiring June 1998
@ $37.38 (1,000) (188,000)
@ $39.50 (1,500) (142,500)
@ $39.88 (2,000) (174,000)
@ $39.94 (2,500) (204,200)
@ $39.94 (2,000) (134,000)
@ $40.06 (1,500) (133,500)
@ $44.13 (1,000) (5,000)
expiring July 1998
@ $37.19 (1,000) (206,000)
Republic Industries, Inc.
expiring May 1998
@ $23.94 (2,000) (777,980)
@ $27.50 (1,000) (123,000)
expiring June 1998
@ $25.75 (2,000) (562,000)
@ $26.50 (2,000) (528,200)
@ $28.38 (1,000) (162,000)
SCI Systems, Inc.
expiring May 1998
@ $37.00 (2,000) (964,000)
expiring June 1998
@ $41.75 (2,000) (576,400)
Solectron Corp.
expiring May 1998
@ $38.63 (1,500) (924,000)
@ $39.25 (2,000) (1,094,000)
expiring June 1998
@ $43.25 (1,500) (550,500)
Sterling Commerce, Inc.
expiring May 1998
@ $43.38 (1,500) (136,500)
@ $45.25 (1,000) (45,000)
@ $46.50 (3,000) (3,000)
expiring June 1998
@ $41.00 (1,000) (326,000)
10
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (I) VALUE
- ----------------------------------------------------------------------------
Tele-Communications, Inc. -
Liberty Media Group
expiring May 1998
@ $16.25 (2,000) $ (198,000)
@ $16.25 (2,000) (68,000)
@ $16.38 (2,500) (150,000)
@ $16.44 (2,000) (182,000)
@ $16.50 (2,000) (156,000)
@ $16.63 (2,000) (116,000)
@ $17.00 (2,000) (88,000)
@ $17.25 (4,000) (52,000)
@ $29.13 (1,500) (474,000)
@ $30.75 (2,000) (390,000)
@ $32.00 (1,000) (128,550)
expiring June 1998
@ $16.38 (1,000) (90,000)
@ $16.75 (2,000) (138,000)
@ $16.75 (1,000) (72,000)
@ $16.88 (3,000) (246,000)
@ $17.13 (2,000) (144,000)
@ $17.13 (1,500) (103,500)
@ $17.25 (2,000) (144,000)
@ $17.63 (1,500) (55,500)
@ $17.63 (1,500) (85,500)
@ $17.88 (2,000) (96,000)
@ $31.25 (1,500) (330,000)
@ $31.31 (1,500) (276,945)
@ $31.69 (1,000) (211,560)
expiring July 1998
@ $17.13 (1,500) (87,000)
Telecomunicacoes Brasileiras, SA
expiring May 1998
@ $126.00 (1,000) (58,000)
expiring June 1998
@ $117.44 (1,000) (1,001,000)
@ $128.63 (1,000) (409,000)
Tellabs, Inc.
expiring May 1998
@ $59.13 (1,500) (1,779,405)
@ $64.44 (1,000) (728,000)
@ $65.63 (1,500) (999,000)
expiring June 1998
@ $67.66 (1,500) (981,000)
@ $69.50 (1,000) (680,000)
@ $71.50 (1,000) (438,630)
Texas Instruments, Inc.
expiring May 1998
@ $52.50 (2,000) (2,332,000)
@ $52.88 (1,000) (1,131,000)
@ $53.38 (2,500) (2,780,000)
@ $53.63 (2,000) (2,202,000)
@ $53.75 (2,000) (2,122,000)
@ $54.75 (2,000) (1,930,000)
@ $55.00 (1,000) (987,000)
@ $56.00 (2,000) (1,784,000)
expiring June 1998
@ $52.25 (2,000) (2,514,000)
@ $53.88 (2,000) (2,202,000)
@ $55.63 (2,000) (1,910,000)
@ $55.75 (1,500) (1,384,500)
@ $56.25 (2,000) (1,912,000)
@ $56.94 (2,000) (1,764,000)
@ $62.63 (2,000) (1,056,000)
The Limited, Inc.
expiring May 1998
@ $28.63 (1,500) (762,000)
expiring June 1998
@ $30.88 (2,000) (668,000)
@ $31.13 (2,000) (584,000)
Travelers Group, Inc.
expiring May 1998
@ $60.63 (1,500) (307,500)
@ $62.88 (1,000) (150,000)
expiring June 1998
@ $60.38 (1,000) (395,000)
@ $65.38 (2,500) (322,500)
@ $69.16 (1,000) (43,000)
11
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (I) VALUE
- ----------------------------------------------------------------------------
WorldCom, Inc.
expiring May 1998
@ $41.75 (2,000) $ (364,000)
@ $42.94 (1,000) (123,000)
@ $43.94 (2,000) (152,000)
expiring June 1998
@ $44.75 (2,000) (210,200)
Total Outstanding Call
Options Written
(premiums received
69,219,160) (94,911,010)
VALUE
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS NET
OF OUTSTANDING CALL
OPTIONS WRITTEN -100.1%
(cost $4,432,454,326) $ 6,213,587,198
Other assets less liabilities-(0.1%) (6,234,655)
NET ASSETS-100% $ 6,207,352,543
(a) Non-income producing security.
(b) Security on which options are written (shares subject to call have an
aggregate market value of $2,686,569,341).
(c) Country of origin--United Kingdom.
(d) Country of origin--Luxembourg.
(e) Swedish holding.
(f) Country of origin--Canada.
(g) 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 April 30, 1998,
these securities amounted to $34,554,575 or 0.6% of net assets.
(h) Country of origin--Sweden.
(i) One contract relates to 100 shares.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $4,501,673,486) $ 6,308,498,208
Cash 1,569,860
Receivable for shares of beneficial interest sold 11,575,407
Dividends and interest receivable 5,940,370
Total assets 6,327,583,845
LIABILITIES
Outstanding call options written, at value
(premiums received $69,219,160) 94,911,010
Payable for investment securities purchased 16,484,757
Advisory fee payable 3,566,733
Payable for shares of beneficial interest redeemed 3,323,433
Distribution fee payable 579,245
Accrued expenses 1,366,124
Total liabilities 120,231,302
NET ASSETS $ 6,207,352,543
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 1,521
Additional paid-in capital 4,007,328,591
Net investment loss (11,760,790)
Accumulated net realized gain on investment transactions 430,732,778
Net unrealized appreciation of investments, options and
foreign currency denominated assets and liabilities 1,781,050,443
$ 6,207,352,543
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($982,831,459 /
20,237,065 shares of beneficial interest issued and outstanding) $48.57
Sales charge--4.25% of public offering price 2.16
Maximum offering price $50.73
CLASS B SHARES
Net asset value and offering price per share ($4,352,300,592 /
110,405,449 shares of beneficial interest issued and outstanding) $39.42
CLASS C SHARES
Net asset value and offering price per share ($730,631,094 /
18,526,365 shares of beneficial interest issued and outstanding) $39.44
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($141,589,398 / 2,901,905 shares of beneficial interest issued and
outstanding) $48.79
See notes to financial statements.
13
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of
$355,591) $ 29,843,303
Interest 6,561,439 $ 36,404,742
EXPENSES
Advisory fee 19,548,755
Distribution fee - Class A 1,307,378
Distribution fee - Class B 19,421,252
Distribution fee - Class C 3,248,886
Transfer agency 3,597,257
Printing 439,795
Custodian 231,841
Registration 230,773
Audit and legal 93,907
Trustees' fees 16,848
Miscellaneous 28,840
Total expenses 48,165,532
Net investment loss (11,760,790)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 379,327,202
Net realized gain on written options
transactions 65,871,720
Net realized loss on foreign currency
transactions (299,066)
Net change in unrealized appreciation
(depreciation) of:
Investments 542,161,639
Written options (65,928,857)
Foreign currency denominated assets
and liabilities (13,001)
Net gain on investments and foreign
currency transactions 921,119,637
NET INCREASE IN NET ASSETS FROM OPERATIONS $909,358,847
See notes to financial statements.
14
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (11,760,790) $ (35,548,097)
Net realized gain on investments,
options and foreign currency
transactions 444,899,856 431,215,641
Net change in unrealized appreciation
(depreciation) of investments,
options, and foreign currency
denominated assets and liabilities 476,219,781 669,531,008
Net increase in net assets from
operations 909,358,847 1,065,198,552
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (52,161,970) (14,927,840)
Class B (288,125,446) (89,311,288)
Class C (48,125,286) (14,500,115)
Advisor Class (7,005,557) (20,469)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase 630,842,321 714,151,085
Total increase 1,144,782,909 1,660,589,925
NET ASSETS
Beginning of year 5,062,569,634 3,401,979,709
End of period $ 6,207,352,543 $5,062,569,634
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) 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. The Fund offers Class A, Class B,
Class C and Advisor Class shares. Class A shares are sold with a front-end
sales charge of up to 4.25% for purchases not exceeding $1,000,000. With
respect to purchases of $1,000,000 or more, Class A shares redeemed within one
year of purchase will be subject to a contingent deferred sales charge of 1%.
Class B shares are currently sold with a contingent deferred sales charge which
declines from 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 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 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 to investors participating in fee-based programs and to certain
retirement plan accounts. All four classes of shares have identical voting,
dividend, liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The financial statements have been prepared in conformity
with generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the reported amounts of assets
and liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sale price or if no sale occurred, at the
mean of the closing bid and asked price on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked price. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities. Listed put and call options purchased
by the Fund are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when earned or accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, currency gains and
losses realized between the trade and settlement dates on security transactions
and the difference between the amounts of interest recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. The Fund does
not isolate the effect of fluctuations in foreign currency exchange rates when
determining the gain or loss upon the sale of equity securities. Net currency
gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation of investments and foreign currency denominated assets
and liabilities.
16
ALLIANCE GROWTH FUND
_______________________________________________________________________________
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. The Fund accretes discounts and amortizes premiums as
adjustments to interest income. Investment gains and losses are determined on
the identified cost basis.
5. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisor Class shares have no distribution fee.
Expenses attributable to the Fund are charged to the Fund. Expenses of the
Trust are charged to the Fund in proportion to net assets.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences, do not require
such reclassification.
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 equal to the annualized
rate of .75% of the Fund's average daily net assets up to $3 billion, .70% of
the next $1 billion of the Fund's average daily net assets, .65% of the next $1
billion of the Fund's average daily net assets, and .60% of the Fund's average
daily net assets over $5 billion. Such fee is accrued daily and paid monthly.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $2,484,060 for the six months ended April 30, 1998.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, serves as the Distributor of the Fund's shares. The
Distributor received front-end sales charges of $110,692 from the sales of
Class A shares and $4,678, $1,776,856, and $56,341 in contingent deferred sales
charges imposed upon redemptions by shareholders of Class A, Class B and Class
C shares, respectively, for the six months ended April 30, 1998.
Brokerage commissions paid on investment transactions for the six months ended
April 30, 1998 amounted to $2,072,747, of which $5,000 was paid to Donaldson,
Lufkin & Jenrette Securities Corp., an affiliate of the Adviser.
Accrued expenses includes $137,324 owed to two of the trustees under the
Trust's deferred compensation plan.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays 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. There is no distribution fee on the Advisor Class shares.
The fees are accrued daily and paid
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
monthly. 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.
The Fund is not obligated under the Agreement to pay any distribution services
fee in excess of the amounts set forth above. The purpose of the payments to
the Distributor under the Agreement is to compensate the Distributor for its
distribution services with respect to the sale of the Fund's shares. Since the
Distributor's compensation is not directly tied to its expenses, the amount of
compensation received by it under the Agreement during any year may be more or
less than its actual expenses. For this reason, the Agreement is characterized
by the staff of the Commission as being of the "compensation" variety.
In the event that the Agreement is terminated or not continued, no distribution
services fees (other than current amounts accrued but not yet paid) would be
owed by the Fund to the Distributor with respect to the relevant class.
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 $1,915,367,820 and $1,449,707,727,
respectively, for the six months ended April 30, 1998. Purchases and sales
amounted to zero and $8,932,812, respectively of U.S. government and government
agency obligations for the six months ended April 30, 1998.
At April 30, 1998, the cost of investments for federal income tax purposes was
$4,515,484,764. Accordingly, gross unrealized appreciation of investments was
$1,878,596,515 and gross unrealized depreciation of investments was $85,583,071
resulting in net unrealized appreciation of $1,793,013,444.
1. OPTION TRANSACTIONS
For hedging and investment 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 change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium received and the amount paid
on effecting a closing purchase transaction, including brokerage commissions,
is also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. The
risk involved in writing an option is that, if the option was exercised the
underlying security could then be purchased or sold by the Fund at a
disadvantageous price.
18
ALLIANCE GROWTH FUND
_______________________________________________________________________________
Transactions in options written for the six months ended April 30, 1998 were as
follows:
NUMBER OF
CONTRACTS PREMIUMS
----------- -----------
Options outstanding at beginning of year 264,700 $ 88,568,875
Options written 658,572 177,579,998
Options terminated in closing purchase transactions (231,470) (71,837,460)
Options expired (204,760) (58,178,485)
Options exercised (235,392) (66,913,768)
-------- ------------
Options outstanding at April 30, 1998 251,650 $ 69,219,160
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contract is included in net realized gain or
loss on foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value equal
to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At April 30, 1998, the Fund had no outstanding forward exchange currency
contracts.
19
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
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
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ -------------- --------------
CLASS A
Shares sold 8,304,832 8,132,661 $377,360,796 $318,891,520
Shares issued
in reinvestment of
distributions 1,103,467 358,984 47,603,829 12,705,352
Shares converted
from Class B 811,942 1,372,219 36,763,274 54,520,447
Shares redeemed (7,799,391) (6,355,236) (355,916,241) (250,784,867)
Net increase 2,420,850 3,508,628 $105,811,658 $135,332,452
CLASS B
Shares sold 10,638,017 23,967,815 $393,705,732 $771,661,032
Shares issued
in reinvestment of
distributions 7,650,992 2,307,390 268,621,380 67,883,610
Shares converted
to Class A (990,645) (1,655,781) (36,763,274) (54,520,447)
Shares redeemed (5,441,889) (11,595,072) (200,713,464) (376,839,188)
Net increase 11,856,475 13,024,352 $424,850,374 $408,185,007
CLASS C
Shares sold 2,321,177 5,404,558 $86,118,815 $173,407,183
Shares issued
in reinvestment of
distributions 1,279,597 278,004 44,952,507 8,181,650
Shares redeemed (1,574,832) (2,988,645) (58,165,865) (97,513,487)
Net increase 2,025,942 2,693,917 $72,905,457 $84,075,346
ADVISOR CLASS
Shares sold 984,667 2,521,405 $44,862,844 $96,902,785
Shares issued
in reinvestment of
distributions 149,933 570 6,490,605 20,184
Shares redeemed (528,401) (253,380) (24,078,617) (10,364,689)
Net increase 606,199 2,268,595 27,274,832 86,558,280
20
FINANCIAL HIGHLIGHTS ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 1, 1994
APRIL 30, YEAR ENDED OCT. 31, TO YEAR ENDED APRIL 30,
1998 ---------------------------- OCT.31, -------------------------
(UNAUDITED) 1997 1996 1995 1994(A) 1994(B) 1993(B)
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $43.95 $34.91 $29.48 $25.08 $23.89 $22.67 $20.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .06(c) (.10)(c) .05 .12 .09 (.01)(d) .05(d)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 7.47 10.17 6.20 4.80 1.10 3.55 3.68
Net increase in net asset
value from operations 7.53 10.07 6.25 4.92 1.19 3.54 3.73
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- (.19) (.11) -0- -0- (.14)
Distributions from net realized
gains (2.91) (1.03) (.63) (.41) -0- (2.32) (1.23)
Total dividends and distributions (2.91) (1.03) (.82) (.52) -0- (2.32) (1.37)
Net asset value, end of period $48.57 $43.95 $34.91 $29.48 $25.08 $23.89 $22.67
TOTAL RETURN
Total investment return based on
net asset value (e) 17.96% 29.54% 21.65% 20.18% 4.98% 15.66% 18.89%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $982,831 $783,110 $499,459 $285,161 $167,800 $102,406 $13,889
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.17%(f) 1.26%(g) 1.30% 1.35% 1.35%(f) 1.40% 1.40%
Expenses, before waivers/
reimbursements 1.17%(f) 1.26%(g) 1.30% 1.35% 1.35%(f) 1.46% 1.84%
Net investment income (loss) .24%(f) (.25)% .15% .56% .86%(f) .32% .20%
Portfolio turnover rate 27% 48% 46% 61% 24% 87% 124%
</TABLE>
See footnote summary on page 24.
21
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 1, 1994
APRIL 30, YEAR ENDED OCT. 31, TO YEAR ENDED APRIL 30,
1998 ---------------------------- OCT.31, -------------------------
(UNAUDITED) 1997 1996 1995 1994(A) 1994(B) 1993(B)
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $36.31 $29.21 $24.78 $21.21 $20.27 $19.68 $18.16
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.09)(c) (.31)(c) (.12) (.02) .01 (.07)(c)(d) (.06)(d)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 6.11 8.44 5.18 4.01 .93 2.98 3.23
Net increase in net asset
value from operations 6.02 8.13 5.06 3.99 .94 2.91 3.17
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- -0- (.01) -0- -0- (.03)
Distributions from net realized
gains (2.91) (1.03) (.63) (.41) -0- (2.32) (1.62)
Total dividends and distributions (2.91) (1.03) (.63) (.42) -0- (2.32) (1.65)
Net asset value, end of period $39.42 $36.31 $29.21 $24.78 $21.21 $20.27 $19.68
TOTAL RETURN
Total investment return based on
net asset value (e) 17.56% 28.64% 20.82% 19.33% 4.64% 14.79% 18.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $4,352,301 $3,578,806 $2,498,097 $1,502,020 $751,521 $394,227 $56,704
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.88%(f) 1.96%(g) 1.99% 2.05% 2.05%(f) 2.10% 2.15%
Expenses, before waivers/
reimbursements 1.88%(f) 1.96%(g) 1.99% 2.05% 2.05%(f) 2.13% 2.52%
Net investment income (loss) (.47)%(f) (.94)% (.54)% (.15)% .16%(f) (.36)% (.53)%
Portfolio turnover rate 27% 48% 46% 61% 24% 87% 124%
</TABLE>
See footnote summary on page 24.
22
ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 1, 1994 AUGUST 2,
APRIL 30, YEAR ENDED OCTOBER 31, TO 1993(H) TO
1998 ---------------------------------- OCTOBER 31, APRIL 30,
(UNAUDITED) 1997 1996 1995 1994(A) 1994
----------- ----------- ----------- -------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $36.33 $29.22 $24.79 $21.22 $20.28 $21.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.09)(c) (.31)(c) (.12) (.03) .01 (.02)(d)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 6.11 8.45 5.18 4.02 .93 1.15
Net increase in net asset value from
operations 6.02 8.14 5.06 3.99 .94 1.13
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- -0- (.01) -0- -0-
Distributions from net realized
gains (2.91) (1.03) (.63) (.41) -0- (2.32)
Total dividends and distributions (2.91) (1.03) (.63) (.42) -0- (2.32)
Net asset value, end of period $39.44 $36.33 $29.22 $24.79 $21.22 $20.28
TOTAL RETURN
Total investment return based on
net asset value (e) 17.55% 28.66% 20.81% 19.32% 4.64% 5.27%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $730,631 $599,449 $403,478 $226,662 $114,455 $64,030
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.88%(f) 1.97%(g) 2.00% 2.05% 2.05%(f) 2.10%(f)
Expenses, before waivers/
reimbursements 1.88%(f) 1.97%(g) 2.00% 2.05% 2.05%(f) 2.13%(f)
Net investment income (loss) (.47)%(f) (.95)% (.55)% (.15)% .16%(f) (.31)%(f)
Portfolio turnover rate 27% 48% 46% 61% 24% 87%
</TABLE>
See footnote summary on page 24.
23
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------------------
SIX MONTHS
ENDED OCTOBER 2,
APRIL 30, YEAR ENDED 1996(H) TO
1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996
------------ ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period $44.08 $34.91 $34.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .12(c) (.05)(c) -0-
Net realized and unrealized gain on
investments, options and foreign
currency transactions 7.50 10.25 .77
Net increase in net asset value from
operations 7.62 10.20 .77
LESS: DISTRIBUTIONS
Distributions from net realized gains (2.91) (1.03) -0-
Net asset value, end of period $48.79 $44.08 $34.91
TOTAL RETURN
Total investment return based on net
asset value (e) 18.12% 29.92% 2.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $141,589 $101,205 $946
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements .87%(f) .98%(g) 1.26%(f)
Expenses, before waivers/
reimbursements .87%(f) .98%(g) 1.26%(f)
Net investment income (loss) .55%(f) (.12)% .50%(f)
Portfolio turnover rate 27% 48% 46%
</TABLE>
(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) Based on average shares outstanding.
(d) Net of fees waived and expenses reimbursed by the Adviser.
(e) 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.
(f) Annualized.
(g) Ratio reflects expenses grossed up for expense offset arrangement with the
transfer agent. For the year ended October 31, 1997, the ratios of expenses net
of waiver/reimbursements and before waiver/reimbursements were 1.25%, 1.95%,
1.95% and .96% for Class A, B, C and Advisor Class shares, respectively.
(h) Commencement of distribution.
24
ALLIANCE GROWTH FUND
_______________________________________________________________________________
TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
RICHARD W. COUPER (1)
BRENTON W. HARRIES (1)
DONALD J. ROBINSON (1)
OFFICERS
BRUCE CALVERT, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
TYLER J. SMITH, VICE PRESIDENT
EDMUND P. BERGAN, JR., CLERK
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER & CHIEF ACCOUNTING 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 High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
26
ALLIANCE GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
GFSR
