ALLIANCE GROWTH FUND
SEMI-ANNUAL REPORT
APRIL 30, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GROWTH FUND
_______________________________________________________________________________
June 28, 1999
Dear Shareholder:
We are pleased to provide you with the market commentary and investment results
for the Alliance Growth Fund (the "Fund") for the semi-annual reporting period
ended April 30, 1999. The following table provides performance data for the
Fund and its two benchmarks, the Standard & Poor's 500 Stock Index (the "S&P
500") and the Russell 1000 Index, for the six- and 12-month periods ended April
30, 1999. The S&P 500 is a measure of the broad U.S. stock market, while the
Russell 1000 Index tracks U.S. large cap stock performance.
INVESTMENT RESULTS
The Fund outperformed both of its benchmark indices over the six-month period
ended April 30, 1999. The Fund's outperformance was largely due to its strong
stock selection in the financial services, technology, and telecommunications
sectors. However, over the 12-month period ended April 30, 1999, the Fund
underperformed both of its indexes. This underperformance was due to what we
perceived to be a strong preference in the marketplace towards large cap
stocks. The Fund--with its concentration in a smaller average cap size--did not
match the performance of these large cap stocks and thus underperformed
slightly.
INVESTMENT RESULTS*
Periods Ended April 30, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE GROWTH FUND
Class A 23.84% 20.28%
Class B 23.39% 19.41%
Class C 23.41% 19.43%
S&P 500 STOCK INDEX 22.31% 21.83%
RUSSELL 1000 INDEX 22.53% 20.31%
* THE FUND'S INVESTMENT RESULTS REPRESENT TOTAL RETURNS AND ARE BASED ON THE
NET ASSET VALUE AS OF APRIL 30, 1999. 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 IS AN UNMANAGED INDEX OF 500 U.S. COMPANIES. THE RUSSELL 1000
INDEX CONSISTS OF 1000 OF THE LARGEST STOCKS REPRESENTING APPROXIMATELY 87% OF
THE U.S. EQUITY MARKET. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
INVESTMENT ENVIRONMENT
The six-month period ended April 30, 1999 began just after the October 1998
bottoming of the stock market, and was a good period for both the market and
the Fund. The Fund's Class A shares gained 23.84% compared to a gain of 22.31%
for the S&P 500 Stock Index during this period.
Our assessment that the market decline from July to October of last year was an
overreaction to the Asian economic crisis rather than the beginning of a period
of recession or deflation has proven essentially correct. While most Asian
economies did fall into deep recession, the U.S. economy remained quite sound
and the U.S. stock market recovered fully, reaching new all-time highs in the
first four months of 1999.
PERFORMANCE REVIEW
As of late, the Fund has emphasized investments in the financial services and
technology sectors. These two areas of the market fell sharply in last year's
market decline. We took advantage of this weakness primarily by increasing our
exposure to telecommunications. The worldwide telecommunications industry is in
the midst of a dramatic change, driven largely by the rapid growth in data
communications and the replacement of old analog technologies by new digital
ones. The internet and the cellular telephone are the most obvious new business
opportunities, but the entire telephone industry has also been caught up by
this tidal wave of technological change. With deregulation now the norm both
here in the U.S. as well as in Europe, we have entered a period of rapid
business growth because of both technological and regulatory change. We have
attempted to capitalize on this opportunity by owning both technology providers
and the telephone companies themselves in the U.S. and
1
ALLIANCE GROWTH FUND
_______________________________________________________________________________
Europe. We have generally avoided internet stocks, which we consider to be
speculatively overvalued. This sector emphasis has served us well, contributing
to the Fund's outperformance versus the S&P 500 over the six-month period under
review.
INVESTMENT OUTLOOK
The performance of the U. S. economy has surprised all but the most optimistic
of forecasters. There have been almost no signs of weakness related to the
recent financial troubles in Asia. Growth has been robust, corporate profits
have been good, and inflation and interest rates have remained low. In
response, the stock market has fared exceptionally well with valuations
reaching record highs. We believe that the outlook remains positive for the
economy. For the stock market, however, our question is whether further gains
of any consequence are likely given the already high level of valuation. In our
view, it is possible that non-inflationary growth will continue, but we also
have concerns that further strength in the economy will inevitably be
accompanied by the return of inflationary pressures. If the latter turns out to
be true, we anticipate that interest rates would undoubtedly rise, in turn
putting downward pressure on stock market valuations.
We are cautiously optimistic about the outlook for the months ahead, but doubt
that recent rates of gain in the stock market can be sustained. Indeed, we
believe that it may be more realistic to anticipate periods of correction such
as we experienced last fall. We do not sense, however, that there is any
immediate possibility of recession or extreme inflation that could bring about
a bear market. Longer term, we are quite optimistic about the outlook for the
U.S. economy and for the stock market. We continue to believe that equities are
appropriate for the long-term investor.
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
performance in the coming periods.
Sincerely,
John D. Carifa
Chairman and President
Tyler J. Smith
Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE 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, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 20.28% 15.15%
Five Years 23.05% 21.98%
Since Inception* 23.82% 23.20%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.41% 15.41%
Five Years 22.19% 22.19%
Ten Years (a) 20.10% 20.10%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.43% 18.43%
Five Years 22.20% 22.20%
Since Inception* 20.15% 20.15%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END (MARCH 31,
1999)
CLASS A CLASS B CLASS C
------------ ------------ ------------
1 Year 10.12% 10.18% 13.19%
5 Years 21.04% 21.24% 21.24%
10 Years N/A 20.18% N/A
Since Inception* 22.89% 21.30% 19.66%
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.
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.
N/A: not applicable
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
3
TEN LARGEST HOLDINGS*
APRIL 30, 1999 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
International Business Machines Corp. $ 390,005,575 5.2%
AT&T Corp. Liberty Media Group Cl.A 366,143,533 4.9
MCI Worldcom, Inc. 314,708,723 4.2
Citigroup, Inc. 303,994,875 4.0
American International Group, Inc. 273,580,873 3.6
Mannesmann AG 250,961,951 3.3
BankAmerica Corp. 232,272,000 3.1
MBNA Corp. 228,021,005 3.0
Global Telesystems Group, Inc. 219,955,662 2.9
Atlantic Richfield Co. 203,111,963 2.7
$2,782,756,160 36.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)
_______________________________________________________________________________
SHARES*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES BOUGHT 4/30/99
- -------------------------------------------------------------------------------
Atlantic Richfield Co. 2,419,800 2,419,800
Bank America Corp. 2,490,000 3,226,000
Ingram Micro, Inc. Cl.A 2,111,000 2,428,500
Intel Corp. 2,150,000 2,750,000
International Business Machines Corp. 415,000 1,898,000
Loral Space & Communications 4,383,300 9,498,300
MediaOne Group, Inc. 1,232,000 1,632,000
McKesson HBOC, Inc. 3,229,000 3,229,000
Newcourt Credit Group, Inc. 3,069,300 5,415,600
Sprint Corp. 1,067,100 1,067,100
HOLDINGS
SALES SOLD 4/30/99
- -------------------------------------------------------------------------------
Cisco Systems, Inc. 3,025,000 236,000
Halliburton Co. 2,147,800 -0-
Lucent Technologies, Inc. 688,000 212,000
Mannesmann AG 357,000 1,493,000
MCI WorldCom, Inc. 4,900,000 3,835,878
Solectron Corp. 525,000 950,000
Tandy Corp. 710,700 860,200
Telecomunicacoes Brasileiras, SA (ADR) 984,000 200,000
Texas Instruments, Inc. 2,375,000 100,000
Viacom, Inc. 1,598,000 474,000
* Adjusted for market value of call options written, stock splits and a
spin-off.
4
PORTFOLIO OF INVESTMENTS
APRIL 30, 1999 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-97.7%
TECHNOLOGY-35.3%
COMPUTER HARDWARE-5.5%
Compaq Computer
Corp. (a)(b) 855,000 $ 19,077,187
International Business
Machines Corp. (a)(b) 1,898,000 397,037,875
------------
416,115,062
COMPUTER SOFTWARE & SERVICES-6.2%
Ceridian Corp. (a)(b) 4,419,600 161,867,850
First Data Corp. 150,000 6,365,625
Ingram Micro, Inc.
Cl.A (a)(b) 2,428,500 61,926,750
Sterling Commerce, Inc. (a) 4,471,544 140,015,221
Sterling Software, Inc. (a) 4,551,000 94,148,813
------------
464,324,259
ELECTRONICS-2.1%
Koninklijke Philips
Electronics NV
(Netherlands) 457,000 39,016,375
Motorola, Inc. (a)(b) 150,000 12,018,750
SCI Systems, Inc. (a)(b) 2,597,800 98,878,762
Texas Instruments,
Inc. (a)(b) 100,000 10,212,500
------------
160,126,387
NETWORKING PRODUCTS-0.5%
Networks Associates,
Inc. (a)(b) 3,023,400 40,060,050
NETWORKING SOFTWARE-0.7%
Cisco Systems, Inc. (a)(b) 236,000 26,918,750
Equant NV (a)(b) 300,000 26,775,000
------------
53,693,750
SEMI-CONDUCTOR COMPONENTS-2.6%
Altera Corp. (a) 314,759 22,741,338
Intel Corp. (a)(b) 2,750,000 168,265,625
------------
191,006,963
TELECOMMUNICATIONS-15.4%
Colt Telecom Group Plc
(ADR) (a)
(United Kingdom) 905,000 69,119,375
Global Telesystems Group,
Inc. (a)(b) 2,551,286 168,703,787
Globalstar
Telecommunications,
Ltd. (a) 100,000 2,012,500
Intermedia Communications
of Florida, Inc. 21,814 702,138
Intermedia Communications,
Inc. pfd. Series D (a) 464,600 20,035,875
Loral Space &
Communications (a)(b) 9,498,300 185,216,850
Lucent Technologies,
Inc. (a)(b) 212,000 12,746,500
MCI WorldCom, Inc. (a)(b) 3,835,878 315,261,223
Millicom International
Cellular, SA (a)
(Luxembourg) 1,130,800 39,012,600
Nextel Communications, Inc.
Cl.A (a)(b) 4,163,600 170,447,375
Nextel Strypes Trust 360,000 12,375,000
Nextlink Communications,
Inc. 80,000 6,960,000
Nokia Corp. (ADR)
(Finland) 269,600 20,000,950
Pacific Gateway Exchange,
Inc. 289,400 11,576,000
Sprint Corp. (a)(b) 1,067,100 109,444,444
Telecomunicacoes Brasileiras,
SA (ADR) (a)(b) (Brazil) 200,000 18,253,125
------------
1,161,867,742
MISCELLANEOUS-2.3%
Sanmina Corp. (a)(b) 1,944,800 128,843,000
Solectron Corp. (a)(b) 950,000 46,075,000
------------
174,918,000
------------
2,662,112,213
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
FINANCIAL SERVICES-26.8%
BANKING & CREDIT-9.3%
American Express Co. 268,000 $ 35,024,250
Automatic Common Exchange
Security Trust II 319,900 4,718,525
Chase Manhattan Corp. 1,756,604 145,358,981
First Union Corp. 963,000 53,326,125
MBNA Corp. 8,089,437 228,021,005
Morgan Stanley, Dean
Witter & Co. 325,400 32,275,613
Newcourt Credit Group, Inc.
(Canada) 5,415,600 152,990,700
Providian Financial Corp. 132,000 17,036,250
The CIT Group, Inc. 409,928 13,322,660
Wells Fargo Co. 400,000 17,275,000
------------
699,349,109
BANKING - MONEY CENTER-3.7%
Bank Tokyo-Mitsubishi, Ltd. 2,972,500 43,472,812
BankAmerica Corp. 3,226,000 232,272,000
------------
275,744,812
BANKING - REGIONAL-0.3%
Bank One Corp. 440,800 26,007,200
INSURANCE-5.4%
20th Century Industries, Inc. 336,200 5,988,563
Acceptance Insurance
Co. (a) 86,800 1,220,625
Ace Ltd. (Bermuda) 100,000 3,025,000
American Bankers Insurance
Group, Inc. 1,135,000 59,516,563
American International Group,
Inc. 2,329,587 273,580,873
PMI Group, Inc. 400,500 22,352,906
Progressive Corp. 283,200 40,639,200
Unum Corp. 22,000 1,201,750
------------
407,525,480
REAL ESTATE-1.8%
Entertainment Properties
Trust 239,400 4,398,975
JP Realty, Inc. 755,300 15,153,206
Koger Equity, Inc. 1,762,571 25,887,762
Macerich Co. 1,051,400 26,876,412
Simon Property Group, Inc. 216,500 6,210,844
Spieker Properties, Inc. 522,200 20,496,350
Storage USA, Inc. 310,400 9,971,600
Summit Properties, Inc. 716,700 13,079,775
Sun Communities, Inc. 425,000 14,875,000
------------
136,949,924
MISCELLANEOUS-6.3%
Associates First Capital Corp.
C1.A 2,257,000 100,013,312
Citigroup, Inc. 4,039,799 303,994,875
Household International,
Inc. 1,365,500 68,701,719
------------
472,709,906
------------
2,018,286,431
CONSUMER CYCLICALS-5.9%
AIRLINES-1.7%
AMR Corp. (a) 270,000 18,849,375
Delta Air Lines, Inc. 1,208,500 76,664,219
UAL Corp. (a) 442,900 35,764,175
------------
131,277,769
AUTO & RELATED-0.2%
AutoNation, Inc. (a) 1,071,500 15,335,844
RETAILING GENERAL-4.0%
Home Depot, Inc. (a)(b) 2,315,000 138,755,312
Office Depot, Inc. (a) 270,000 5,940,000
Tandy Corp. (a)(b) 860,200 62,310,737
The Limited, Inc. (a)(b) 1,506,425 65,906,094
Wal-Mart Stores, Inc. 598,000 27,508,000
------------
300,420,143
------------
447,033,756
CONSUMER NONCYCLICALS-5.7%
DRUGS-2.0%
Gensia, Inc. pfd. (a)(c)
(Canada) 68,500 1,601,256
Merck & Co., Inc. 1,552,400 109,056,100
Schering-Plough Corp. 737,000 35,606,313
------------
146,263,669
6
ALLIANCE GROWTH FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
HOSPITAL SUPPLIES & SERVICES-1.7%
McKesson HBOC,
Inc. (a)(b) 3,229,000 $ 113,015,000
Medtronic, Inc. (a)(b) 212,800 15,308,300
------------
128,323,300
TOBACCO-2.0%
Loews Corp. 1,068,000 78,164,250
Philip Morris Cos., Inc. 2,090,400 73,294,650
------------
151,458,900
------------
426,045,869
UTILITY-5.6%
TELEPHONE-5.6%
AT & T Corp. (a)(b) 989,827 49,986,263
AT & T Corp. Liberty Media
Group CI.A (a) 5,834,473 372,676,963
------------
422,663,226
BUSINESS SERVICES-5.2%
PRINTING, PUBLISHING & BROADCASTING-5.2%
CBS Corp. (a)(b) 2,881,700 131,297,457
Comcast Corp. Cl.A 481,500 31,628,531
MediaOne Group, Inc. (a)(b) 1,632,000 133,110,000
News Corp., Ltd. (ADR)
(Australia) 1,593,400 51,984,675
Time Warner, Inc. (a)(b) 386,000 27,020,000
Viacom, Inc. Cl.B (a) 474,000 19,374,750
------------
394,415,413
ENERGY-3.7%
OIL & GAS SERVICES-3.7%
Atlantic Richfield Co. 2,419,800 203,111,963
Gulf Canada Resources, Ltd.
(Canada) 12,720,900 50,883,600
Royal Dutch Petroleum Co.
(Netherlands) 350,000 20,540,625
Total, SA (ADR) (France) 100,000 6,800,000
------------
281,336,188
CAPITAL GOODS-3.3%
MACHINERY-3.3%
Mannesmann AG (d) 1,493,000 196,519,795
(ADR) (Germany) 413,000 54,442,156
------------
250,961,951
CONSUMER SERVICES-2.1%
BUSINESS SERVICES-1.8%
Cendant Corp. (a)(b) 7,020,750 126,373,500
Convergys Corp. (a) 190,000 3,538,750
Policy Management Systems
Corp. (a) 79,200 2,489,850
------------
132,402,100
ENTERTAINMENT & LEISURE-0.3%
Carnival Corp. Cl.A 480,800 19,833,000
Starwood Hotels & Resorts 125,879 4,618,186
------------
24,451,186
------------
156,853,286
HEALTH CARE-1.8%
DRUGS-1.8%
Bristol-Myers Squibb Co. 2,114,000 134,371,125
MULTI INDUSTRY COMPANIES-1.8%
Tyco International,
Ltd. (a)(b) 1,644,112 133,584,100
CONSUMER BASICS-0.5%
BEVERAGES-0.3%
Pepsi Bottling Group,
Inc. (a) 927,700 19,539,681
HOUSEHOLD PRODUCTS-0.2%
Gillette Co. 330,000 17,221,875
------------
36,761,556
Total Common & Preferred
Stocks
(cost $5,251,669,064) 7,364,425,114
LONG-TERM DEBT SECURITIES-0.7%
COMMUNICATION EQUIPMENT-0.7%
Global Telesystems Group, Inc.
5.75%, 7/01/10
(cost $28,134,215) $ 38,525 51,430,875
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
CONTRACTS (E)
OR PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
SHORT-TERM DEBT SECURITIES-3.1%
SHORT-TERM SECURITIES-3.1%
Federal Home Loan Bank
5.29%, 5/19/99 $ 15,940 $ 15,902,063
Federal Home Loan Mortgage
Corp.
4.74%, 5/17/99 25,000 24,947,333
4.75%, 6/22/99 10,000 9,931,389
4.75%, 6/30/99 50,000 49,604,167
Federal National Mortgage
Assoc.
5.20%, 5/24/99 14,800 14,755,039
5.21%, 5/24/99 25,000 24,924,291
5.21%, 6/17/99 15,785 15,687,111
Student Loan Marketing
4.80%, 5/03/99 75,800 75,779,787
------------
231,531,180
Total Short-Term Debt
Securities
(amortized cost
$231,531,180) 231,531,180
TOTAL INVESTMENTS-101.5%
(cost $5,511,334,459) 7,647,387,169
OUTSTANDING CALL OPTIONS WRITTEN-(1.5%)
AT&T Corp., Liberty Media
Group Cl. A
expiring May 1999
@ $52.70 (1,000) (1,123,000)
@ $53.13 (1,040) (1,093,040)
@ $54.74 (2,000) (1,828,000)
@ $57.50 (1,000) (670,890)
@ $72.00 (2,000) (56,000)
expiring June 1999
@ $58.35 (2,500) (1,762,500)
CBS Corp.
expiring May 1999
@ $36.13 (1,500) (1,443,000)
@ $37.88 (1,000) (778,000)
@ $40.50 (2,000) (1,062,000)
@ $43.88 (1,000) (275,000)
expiring June 1999
@ $39.75 (1,000) (678,000)
@ $44.38 (1,000) (363,000)
@ $44.50 (1,500) (544,500)
@ $45.27 (1,500) (423,000)
Cendant Corp.
expiring April 1999
@ $16.50 (2,500) (422,475)
expiring May 1999
@ $15.81 (2,500) (647,325)
@ $16.00 (1,000) (252,790)
Ceridian Corp.
expiring May 1999
@ $37.00 (2,000) (206,000)
@ $37.00 (1,000) (117,000)
Cisco Systems, Inc.
expiring June 1999
@ $111.00 (1,000) (784,000)
@ $119.00 (1,000) (489,180)
Compaq Computer Corp.
expiring June 1999
@ $22.75 (1,000) (163,210)
Equant NV
expiring May 1999
@ $77.50 (1,000) (1,178,000)
@ $78.00 (1,000) (1,136,000)
@ $78.00 (1,000) (1,149,000)
Global Telesystems Group,Inc.
expiring May 1999
@ $74.05 (1,000) (179,000)
Home Depot, Inc.
expiring May 1999
@ $64.50 (1,000) (51,556)
Ingram Micro, Inc.
expiring May 1999
@ $18.38 (1,500) (1,134,000)
@ $18.38 (1,000) (769,000)
expiring June 1999
@ $18.25 (1,500) (1,173,435)
@ $19.00 (800) (549,600)
@ $20.63 (650) (380,250)
@ $20.75 (850) (489,600)
@ $24.00 (1,000) (376,000)
@ $28.76 (700) (168,000)
8
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (E) VALUE
- -------------------------------------------------------------------------
Intel Corp.
expiring May 1999
@ $58.00 (1,000) $ (472,000)
@ $59.25 (2,000) (554,806)
@ $60.38 (3,000) (708,300)
@ $60.63 (1,000) (252,640)
@ $65.50 (2,000) (129,620)
@ $116.25 (2,000) (718,610)
@ $117.00 (2,000) (587,760)
expiring June 1999
@ $56.00 (1,000) (669,860)
@ $60.72 (3,000) (1,210,470)
@ $63.75 (2,000) (507,340)
International Business
Machines Corp.
expiring May 1999
@ $168.00 (1,000) (4,069,280)
@ $179.50 (1,000) (2,963,020)
Limited, Inc.
expiring May 1999
@ $36.13 (1,000) (780,000)
@ $38.38 (1,500) (832,215)
@ $39.13 (1,500) (759,000)
@ $40.50 (1,000) (395,000)
@ $42.42 (1,000) (276,000)
Loral Space &
Communications
expiring May 1999
@ $15.38 (1,000) (426,000)
@ $16.75 (1,000) (300,000)
@ $16.93 (1,000) (279,000)
@ $17.92 (1,500) (297,630)
@ $18.00 (1,000) (163,000)
@ $18.25 (1,500) (244,989)
@ $18.38 (1,500) (225,000)
@ $18.63 (2,000) (252,000)
@ $18.75 (1,500) (196,500)
expiring June 1999
@ $15.13 (1,000) (470,000)
@ $15.69 (2,500) (1,057,100)
@ $15.73 (2,000) (796,800)
@ $16.00 (2,500) (960,475)
@ $16.63 (1,500) (523,950)
@ $17.63 (2,000) (566,000)
@ $17.50 (2,500) (747,500)
Lucent Technologies, Inc.
expiring May 1999
@ $61.00 (2,000) (228,400)
MCI WorldCom, Inc.
expiring April 1999
@ $88.63 (1,000) -0-
expiring May 1999
@ $83.00 (1,000) (407,000)
@ $85.50 (1,500) (145,500)
McKesson HBOC, Inc.
expiring May 1999
@ $66.38 (2,000) (214)
@ $67.81 (2,000) -0-
@ $67.88 (800) (2,400)
@ $67.88 (200) (600)
expiring June 1999
@ $62.13 (1,000) (20,000)
@ $63.50 (1,000) (3,000)
@ $64.81 (1,000) (17,000)
@ $66.63 (1,000) -0-
@ $67.87 (500) (1,500)
@ $67.88 (500) (1,500)
MediaOne Group, Inc.
expiring May 1999
@ $57.63 (1,000) (2,396,070)
@ $58.00 (1,000) (2,370,000)
@ $61.31 (1,000) (2,032,392)
@ $61.61 (1,000) (2,005,000)
@ $61.63 (1,000) (2,002,000)
@ $64.48 (320) (554,880)
@ $66.81 (1,000) (1,511,000)
@ $67.00 (1,000) (1,530,000)
expiring June 1999
@ $66.50 (1,000) (1,604,000)
@ $67.13 (2,000) (3,102,000)
@ $68.50 (1,000) (1,357,000)
@ $79.19 (1,000) (647,000)
9
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (E) VALUE
- -------------------------------------------------------------------------
Medtronic, Inc.
expiring May 1999
@ $71.26 (2,000) $ (682,000)
Motorola, Inc.
expiring June 1999
@ $76.25 (1,500) (960,585)
Networks Associates, Inc.
expiring June 1999
@ $13.85 (2,500) (450,000)
Nextel Communications, Inc.
expiring May 1999
@ $30.63 (1,000) (1,030,881)
@ $31.81 (1,000) (913,381)
@ $32.00 (1,000) (901,110)
@ $32.24 (1,000) (881,850)
@ $32.25 (500) (461,985)
@ $33.50 (1,000) (772,000)
@ $36.75 (1,000) (513,000)
@ $37.94 (1,000) (435,000)
@ $38.38 (1,000) (427,000)
@ $39.63 (2,000) (674,000)
expiring June 1999
@ $37.88 (2,000) (1,044,340)
@ $38.38 (1,000) (471,000)
@ $38.85 (1,000) (528,870)
@ $38.88 (3,000) (1,358,850)
@ $39.88 (2,000) (764,000)
Sanmina Corp.
expiring May 1999
@ $61.63 (2,500) (1,253,100)
@ $65.12 (1,000) (524,440)
expiring June 1999
@ $58.38 (2,000) (2,156,000)
@ $64.13 (2,000) (1,606,000)
@ $65.12 (1,000) (632,060)
SCI Systems, Inc.
expiring May 1999
@ $37.42 (1,000) (240,820)
Solectron Corp.
expiring May 1999
@ $50.61 (2,000) (388,000)
expiring June 1999
@ $49.25 (2,000) (754,000)
@ $49.88 (2,000) (718,000)
Sprint Corp.
expiring June 1999
@ $97.63 (1,500) (1,241,370)
@ $98.00 (1,500) (1,297,500)
@ $98.50 (1,000) (811,900)
@ $98.63 (700) (599,900)
@ $99.25 (1,500) (1,160,295)
@ $101.88 (1,500) (1,029,000)
Tandy Corp.
expiring June 1999
@ $60.38 (1,000) (1,324,000)
@ $65.50 (3,000) (2,571,150)
@ $66.69 (1,500) (1,171,500)
Tele-Communications, Inc.
expiring May 1999
@ $26.50 (2,500) (1,682,350)
Telecomunicacoes Brasileiras
expiring June 1999
@ $84.50 (1,000) (1,145,000)
Telecomunicacoes
Brasileiras, SA
expiring June 1999
@ $81.50 (1,000) (1,180,980)
Texas Instruments, Inc.
expiring May 1999
@ $112.25 (1,000) (83,260)
10
ALLIANCE GROWTH FUND
_______________________________________________________________________________
COMPANY CONTRACTS (E) VALUE
- -------------------------------------------------------------------------
Time Warner, Inc.
expiring May 1999
@ $70.44 (1,000) $ (280,420)
expiring June 1999
@ $73.00 (1,000) (258,610)
Tyco International, Ltd.
expiring May 1999
@ $77.00 (1,000) (608,920)
expiring June 1999
@ $77.75 (1,000) (569,000)
Total Outstanding Call
Options Written
(premiums received
$69,306,960) (107,803,099)
TOTAL INVESTMENTS NET OF OUTSTANDING
CALL OPTIONS WRITTEN-100.0%
(cost $5,442,027,499) 7,539,584,070
Other assets less
liabilities-0.0% (3,581,470)
NET ASSETS-100% $ 7,536,002,600
(a) Non-income producing security.
(b) Security on which options are written (shares subject to call have an
aggregate market value of $3,174,697,166).
(c) 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, 1999,
these securities amounted to $1,601,256 or 0.02% of net assets.
(d) German holding.
(e) One contract relates to 100 shares.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
11
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $5,511,334,459) $ 7,647,387,169
Cash 462,884
Receivable for investment securities sold 17,859,259
Receivable for shares of beneficial interest sold 9,905,848
Dividends and interest receivable 5,435,658
Total assets 7,681,050,818
LIABILITIES
Outstanding call options written, at value (premiums
received $69,306,960) 107,803,099
Payable for investment securities purchased 23,445,888
Payable for shares of beneficial interest redeemed 6,232,616
Advisory fee payable 4,187,609
Distribution fee payable 896,734
Accrued expenses 2,482,272
Total liabilities 145,048,218
NET ASSETS $ 7,536,002,600
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 1,684
Additional paid-in capital 4,681,632,965
Accumulated net investment loss (28,504,404)
Accumulated net realized gain on investment transactions 785,414,771
Net unrealized appreciation of investments, options and
foreign currency denominated assets and liabilities 2,097,457,584
$ 7,536,002,600
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($1,284,500,499/23,700,135 shares of beneficial
interest issued and outstanding) $54.20
Sales charge--4.25% of public offering price 2.41
Maximum offering price $56.61
CLASS B SHARES
Net asset value and offering price per share
($5,158,812,708/120,330,045 shares of beneficial
interest issued and outstanding) $42.87
CLASS C SHARES
Net asset value and offering price per share
($880,100,027/20,516,774 shares of beneficial
interest issued and outstanding) $42.90
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($212,589,366/3,890,477 shares of beneficial
interest issued and outstanding) $54.64
See notes to financial statements.
12
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $261,784) $ 24,723,193
Interest 7,775,020 $ 32,498,213
EXPENSES
Advisory fee 23,894,706
Distribution fee - Class A 1,745,366
Distribution fee - Class B 23,978,569
Distribution fee - Class C 4,072,687
Transfer agency 5,729,505
Printing 957,538
Custodian 297,557
Audit and legal 103,558
Registration 58,818
Trustees' fees 12,500
Miscellaneous 95,046
Total expenses 60,945,850
Less: expense offset arrangement
(see Note B) -0-
Net expenses 60,945,850
Net investment loss (28,447,637)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain on investment
transactions 792,404,063
Net realized gain on written options
transactions 16,897,505
Net realized loss on foreign currency
transactions (34,251)
Net change in unrealized appreciation
(depreciation) of:
Investments 689,256,641
Written options (34,848,635)
Foreign currency denominated assets
and liabilities (31,227)
Net gain on investments and foreign
currency transactions 1,463,644,096
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,435,196,459
See notes to financial statements.
13
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss $ (28,447,637) $ (39,676,467)
Net realized gain on investments,
options and foreign currency
transactions 809,267,317 601,623,658
Net change in unrealized appreciation
(depreciation) of investments,
options, and foreign currency
denominated assets and liabilities 654,376,779 138,250,143
Net increase in net assets from
operations 1,435,196,459 700,197,334
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (78,504,438) (52,161,970)
Class B (410,079,550) (288,101,646)
Class C (69,316,205) (48,125,286)
Advisor Class (13,813,033) (7,005,557)
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Net increase 540,236,330 764,910,528
Total increase 1,403,719,563 1,069,713,403
NET ASSETS
Beginning of year 6,132,283,037 5,062,569,634
End of period $ 7,536,002,600 $ 6,132,283,037
See notes to financial statements.
14
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (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 may 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 prices 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 prices. 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 Trustees. 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.
Over-the-counter written options are valued using prices provided by brokers.
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 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 dividends and 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
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
rates are reflected as a component of net unrealized appreciation of
investments, options 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 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 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.
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 $3,808,836 for the six months ended April 30, 1999.
For the six months ended April 30, 1999, the Fund's expenses were reduced by
$283,183 under an expense offset arrangement with Alliance Fund Sevices.
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 $114,803 from the sales of
Class A shares and $4,410, $1,863,291, and $84,905 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, 1999.
Brokerage commissions paid on investment transactions for the six months ended
April 30, 1999 amounted to $3,302,828, of which $650 was paid to Donaldson
Lufkin & Jenrette Securities Corp., directly and $3,400 was paid to the
Pershing Division of Donaldson Lufkin & Jenrette Securities Corp., affiliates
of the Adviser.
Accrued expenses includes $151,819 owed to a trustee and a former trustee under
the Trust's deferred compensation plan.
16
ALLIANCE GROWTH FUND
_______________________________________________________________________________
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 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 $2,417,738,189 and $2,383,685,562,
respectively, for the six months ended April 30, 1999. There were no purchases
and sales in U.S. government and government agency obligations for the six
months ended April 30, 1999.
At April 30, 1999, the cost of investments for federal income tax purposes was
$5,536,564,188. Gross unrealized appreciation of investments was $2,467,716,892
and gross unrealized depreciation of investments was $395,390,050 resulting in
net unrealized appreciation of $2,072,326,842.
1. OPTION TRANSACTIONS
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign 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.
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH FUND
_______________________________________________________________________________
Transactions in options written for the six months ended April 30, 1999 were as
follows:
NUMBER OF
CONTRACTS PREMIUMS
---------- --------------
Options outstanding at beginning of year 69,221 $ 28,740,532
Options written 672,700 258,388,777
Options terminated in closing purchase
transactions (104,770) (49,118,042)
Options expired (119,211) (39,616,970)
Options exercised (328,380) (129,087,337)
Options outstanding at April 30, 1999 189,560 $ 69,306,960
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, 1999, the Fund had no outstanding forward exchange currency
contracts.
18
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, 1999 OCTOBER 31, APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 9,055,845 14,313,089 $ 464,346,209 $ 659,034,500
Shares issued in
reinvestment of
distributions 1,502,621 1,103,597 71,690,496 47,609,915
Shares converted
from Class B 89,682 1,525,332 4,673,793 70,157,128
Shares redeemed (8,318,535) (13,387,711) (428,496,879) (615,070,017)
Net increase 2,329,613 3,554,307 $ 112,213,619 $ 161,731,526
CLASS B
Shares sold 9,894,647 20,547,117 $ 404,989,137 $ 776,085,446
Shares issued in
reinvestment of
distributions 10,048,047 7,651,345 380,318,020 268,634,078
Shares converted
to Class A (112,856) (1,871,621) (4,673,793) (70,157,128)
Shares redeemed (10,389,197) (13,986,411) (426,201,324) (518,571,785)
Net increase 9,440,641 12,340,430 $ 354,432,040 $ 455,990,611
CLASS C
Shares sold 4,165,657 4,951,688 $ 170,431,050 $ 187,545,992
Shares issued in
reinvestment of
distributions 1,708,994 1,279,996 64,719,610 44,966,581
Shares redeemed (4,186,721) (3,903,263) (171,439,810) (145,672,105)
Net increase 1,687,930 2,328,421 $ 63,710,850 $ 86,840,468
ADVISOR CLASS
Shares sold 736,586 2,358,835 $ 38,589,376 $ 106,555,081
Shares issued in
reinvestment of
distributions 268,515 149,933 12,902,137 6,490,605
Shares redeemed (796,037) (1,123,061) (41,611,692) (52,697,763)
Net increase 209,064 1,385,707 $ 9,879,821 $ 60,347,923
NOTEF: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 1999.
19
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 OCTOBER 31, TO YEAR ENDED
1999 ---------------------------------------------- OCTOBER 31, APRIL 30,
(UNAUDITED) 1998 1997 1996 1995 1994(A) 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $47.17 $43.95 $34.91 $29.48 $25.08 $23.89 $22.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.06)(b) (.05)(b) (.10)(b) .05 .12 .09 (.01)(c)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 10.80 6.18 10.17 6.20 4.80 1.10 3.55
Net increase in net asset value from
operations 10.74 6.13 10.07 6.25 4.92 1.19 3.54
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- -0- (.19) (.11) -0- -0-
Distributions from net realized gains (3.71) (2.91) (1.03) (.63) (.41) -0- (2.32)
Total dividends and distributions (3.71) (2.91) (1.03) (.82) (.52) -0- (2.32)
Net asset value, end of period $54.20 $47.17 $43.95 $34.91 $29.48 $25.08 $23.89
TOTAL RETURN
Total investment return based on net
asset value (d) 23.84% 14.56% 29.54% 21.65% 20.18% 4.98% 15.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,284,500 $1,008,093 $783,110 $499,459 $285,161 $167,800 $102,406
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.18%(e)(f) 1.22%(e) 1.26%(e) 1.30% 1.35% 1.35%(f) 1.40%
Expenses, before waivers/
reimbursements 1.18%(e)(f) 1.22%(e) 1.26%(e) 1.30% 1.35% 1.35%(f) 1.46%
Net investment income (loss) (.24)%(f) (.11)% (.25)% .15% .56% .86%(f) .32%
Portfolio turnover rate 35% 61% 48% 46% 61% 24% 87%
</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
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 1, 1994
APRIL 30, YEAR ENDED OCTOBER 31, TO YEAR ENDED
1999 ---------------------------------------------- OCTOBER 31, APRIL 30,
(UNAUDITED) 1998 1997 1996 1995 1994(A) 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $38.15 $36.31 $29.21 $24.78 $21.21 $20.27 $19.68
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.20)(b) (.31)(b) (.31)(b) (.12) (.02) .01 (.07)(b)(c)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 8.63 5.06 8.44 5.18 4.01 .93 2.98
Net increase in net asset value from
operations 8.43 4.75 8.13 5.06 3.99 .94 2.91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains (3.71) (2.91) (1.03) (.63) (.41) -0- (2.32)
Total dividends and distributions (3.71) (2.91) (1.03) (.63) (.42) -0- (2.32)
Net asset value, end of period $42.87 $38.15 $36.31 $29.21 $24.78 $21.21 $20.27
TOTAL RETURN
Total investment return based on net
asset value (d) 23.39% 13.78% 28.64% 20.82% 19.33% 4.64% 14.79%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $5,158,813 $4,230,756 $3,578,806 $2,498,097 $1,502,020 $751,521 $394,227
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.90%(e)(f) 1.94%(e) 1.96%(e) 1.99% 2.05% 2.05%(f) 2.10%
Expenses, before waivers/
reimbursements 1.90%(e)(f) 1.94%(e) 1.96%(e) 1.99% 2.05% 2.05%(f) 2.13%
Net investment income (loss) (.97)%(f) (.83)% (.94)% (.54)% (.15)% .16%(f) (.36)%
Portfolio turnover rate 35% 61% 48% 46% 61% 24% 87%
</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
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED MAY 1, 1994 AUGUST 2,
APRIL 30, YEAR ENDED OCTOBER 31, TO 1993(G) TO
1999 ---------------------------------------------- OCTOBER 31, APRIL 30,
(UNAUDITED) 1998 1997 1996 1995 1994(A) 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $38.17 $36.33 $29.22 $24.79 $21.22 $20.28 $21.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.20)(b) (.31)(b) (.31)(b) (.12) (.03) .01 (.02)(c)
Net realized and unrealized gain on
investments, options and foreign
currency transactions 8.64 5.06 8.45 5.18 4.02 .93 1.15
Net increase in net asset value from
operations 8.44 4.75 8.14 5.06 3.99 .94 1.13
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income -0- -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains (3.71) (2.91) (1.03) (.63) (.41) -0- (2.32)
Total dividends and distributions (3.71) (2.91) (1.03) (.63) (.42) -0- (2.32)
Net asset value, end of period $42.90 $38.17 $36.33 $29.22 $24.79 $21.22 $20.28
TOTAL RETURN
Total investment return based on net
asset value (d) 23.41% 13.76% 28.66% 20.81% 19.32% 4.64% 5.27%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $880,100 $718,688 $599,449 $403,478 $226,662 $114,455 $64,030
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements 1.89%(e)(f) 1.93%(e) 1.97%(e) 2.00% 2.05% 2.05%(f) 2.10%(f)
Expenses, before waivers/
reimbursements 1.89%(e)(f) 1.93%(e) 1.97%(e) 2.00% 2.05% 2.05%(f) 2.13%(f)
Net investment income (loss) (.96)%(f) (.83)% (.95)% (.55)% (.15)% .16%(f) (.31)%(f)
Portfolio turnover rate 35% 61% 48% 46% 61% 24% 87%
</TABLE>
See footnote summary on page 23.
22
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 OCTOBER 31, 1996(G) TO
1999 ------------------------ OCTOBER 31,
(UNAUDITED) 1998 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $47.47 $44.08 $34.91 $34.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .01(b) .08(b) (.05)(b) -0-
Net realized and unrealized gain on
investments, options and foreign
currency transactions 10.87 6.22 10.25 .77
Net increase in net asset value from
operations 10.88 6.30 10.20 .77
LESS: DISTRIBUTIONS
Distributions from net realized gains (3.71) (2.91) (1.03) -0-
Net asset value, end of period $54.64 $47.47 $44.08 $34.91
TOTAL RETURN
Total investment return based on net
asset value (d) 24.00% 14.92% 29.92% 2.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $212,589 $174,745 $101,205 $946
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements .88%(e)(f) .93%(e) .98%(e) 1.26%(f)
Expenses, before waivers/
reimbursements .88%(e)(f) .93%(e) .98%(e) 1.26%(f)
Net investment income (loss) .06%(f) .17% (.12)% .50%(f)
Portfolio turnover rate 35% 61% 48% 46%
</TABLE>
(a) The Fund changed its fiscal year end from April 30 to October 31.
(b) Based on average shares outstanding.
(c) Net of fees waived and expenses reimbursed by the Adviser.
(d) 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.
(e) Ratio reflects expenses grossed up for expense offset arrangement with the
transfer agent. For the six months ended April 30, 1999 and the years ended
October 31, 1998, and 1997 the ratios of expenses net of waiver/reimbursements
and before waiver/reimbursements were 1.21% and 1.25% for Class A shares, 1.93%
and 1.95% for Class B shares, 1.92% and 1.95% for Class C shares and .92% and
.96% for Advisor Class shares, respectively.
(f) Annualized.
(g) Commencement of distribution.
23
ALLIANCE GROWTH FUND
_______________________________________________________________________________
TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
WILLIAM H. FOULK, JR. (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
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
24
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance 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 U.S. Government Fund
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
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors 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
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
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
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
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
General Municipal Portfolio
Government Portfolio
25
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
