ALLIANCE GROWTH
- --------------------------------------------------------------------------------
INVESTORS FUND
- --------------------------------------------------------------------------------
and
- --------------------------------------------------------------------------------
ALLIANCE
- --------------------------------------------------------------------------------
CONSERVATIVE
- --------------------------------------------------------------------------------
INVESTORS FUND
- --------------------------------------------------------------------------------
Semi-Annual
Report
October 31, 1998
Alliance Capital [LOGO](R)
<PAGE>
Alliance Growth Investors and
LETTER TO SHAREHOLDERS Conservative Investors Funds
================================================================================
December 24, 1998
Dear Shareholder:
This semi-annual shareholder report reviews investment results and market
activity for Alliance Growth Investors and Conservative Investors funds for the
periods ended October 31, 1998.
ECONOMIC AND MARKET ENVIRONMENT
The world economy continues to be marked by extreme variations in local
conditions. Japan has continued to slide into its worst recession since World
War II, whereas the United States has continued a robust expansion in spite of
falling exports and rising imports. Smaller Asian economies have arrested the
speed of their decline, but they remain mired in steep recessions. European
conditions remain uneven, with booming economies in Spain and Ireland and
lackluster growth in the major economies. Germany, in particular, has been hit
hard by falling exports.
Financial markets have been extraordinarily volatile with world stock markets
plunging during the summer and subsequently recording a spectacular recovery. In
many cases, the stock market declines were as great as those experienced in the
1987 crash. Bond markets were no less volatile with corporate bond yields rising
even as the yield on government securities fell. At one point the so-called
"spread" (the difference between government and corporate bond yields) was wider
than it was before the recession of the early 1990s.
The reaction of the Federal Reserve, faced with the consequences of Russia's
default, Brazil's difficulties and the US and overseas financial markets'
strains after the collapse of the hedge fund Long Term Capital Management, was
to cut interest rates three times. This proved to be successful in restoring
confidence in the US stock market while a large package for Brazil helped to
boost international confidence.
There is a strong temptation to dismiss these events as a summer storm, but this
would probably be a mistake. The moves by the Fed and other authorities have
been effective so far, but only at the expense of continuing credit inflation in
the United States and increasing international imbalances. Much work remains to
be done in restructuring the Japanese economy and encouraging consumer demand to
grow in Europe. We are hopeful that the time bought by the authorities will be
used wisely.
World economic growth will likely slow further next year despite continuing
robust consumption in the United States. With the savings ratio now negative
(consumers in aggregate spending more than they earn), however, this is not
sustainable in the longer term. Commodity prices continue to fall, benefiting
consumers in the rich world, but putting more pressure on heavily indebted
primary producers. The overall result is a harder environment for international
companies over the next few years than we have seen.
INVESTMENT RESULTS
Over the six- and 12-month periods ended October 31, 1998, Alliance Growth
Investors Fund Class A shares gained 0.53% and 13.72% at net asset value
("NAV"), respectively. Alliance Conservative Investors Fund Class A shares
returned 2.71% at NAV for the six-month period, and 10.56% for the 12-month
period also ending October 31, 1998.
Both Funds lagged their composite benchmarks for both the six- and 12-month
periods. The accounts underperformed the benchmarks due to the corporate bonds
that we held, which provided a smaller positive return than the government bonds
represented in the Lehman Brother's Index.
GROWTH INVESTORS FUND
Investment returns for the Alliance Growth Investors Fund for the six- and
12-month periods ending October 31, 1998 are outlined in the following table.
For comparison purposes, we also included performance for the broad U.S. stock
market, as represented by the Standard & Poor's 500 Stock Index (the "S&P 500"),
and for the Fund's benchmark--a 70%/30% composite of the S&P 500 and the Lehman
Brothers ("LB") Aggregate Bond Index, respectively.
1
<PAGE>
Alliance Growth Investors and
Conservative Investors Funds
================================================================================
INVESTMENT RESULTS*
Periods Ended October 31, 1998
Total Returns
6 Months 12 Months
------------- -------------
Alliance Growth
Investors Fund
Class A 0.53% 13.72%
Class B 0.20% 12.91%
Class C 0.13% 12.82%
S&P 500 -0.40% 22.01%
70/30 Composite:
S&P 500 /
LB Aggregate Bond
Index 1.39% 18.21%
* The Fund's investment results are total returns for the periods and are
based on the net asset value of each class of shares as of October 31,
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. Past performance is no guarantee of
future results.
The S&P 500 is an unmanaged index of 500 U.S. companies. The 70%/30%
Composite is a blend of both the S&P 500 and the Lehman Brothers
Government/Corporate Bond Index with a 70% and 30% weighting,
respectively. An investor cannot invest directly in an index.
CONSERVATIVE INVESTORS FUND
Investment returns for the Alliance Conservative Investors Fund for the six- and
12-month periods ending October 31, 1998 are outlined in the following table.
For comparison purposes, we also included performance for the broad U.S. bond
market, as represented by the Lehman Brothers ("LB") Aggregate Bond Index, and
for the Fund's benchmark--a 70%/30% composite of the LB Aggregate Bond Index and
the Standard & Poor's 500 Stock Index (the "S&P 500"), respectively.
INVESTMENT RESULTS*
Periods Ended October 31, 1998
Total Returns
6 Months 12 Months
------------- -------------
Alliance Conservative
Investors Fund
Class A 2.71% 10.56%
Class B 2.33% 9.79%
Class C 2.42% 9.79%
LB Aggregate Bond
Index 5.55% 9.34%
70/30 Composite:
LB Aggregate Bond
Index/S&P 500 3.77% 13.14%
* The Fund's investment results are total returns for the periods and are
based on the net asset value of each class of shares as of October 31,
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. Past performance is no guarantee of
future results.
The LB Aggregate Bond Index is composed of the LB Mortgage-Backed
Securities Index, the LB Asset-Backed Securities Index and the LB
Government/Corporate Bond Index. The 70%/30% Composite is a blend of both
the LB Government/Corporate Bond Index and the S&P 500 with a 70% and 30%
weighting, respectively. An investor cannot invest directly in an index.
We appreciate your investment in Alliance's asset allocation Funds and look
forward to reporting their progress to you in the future.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Nicholas D. Carn
Nicholas D. Carn
Vice President
2
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES Alliance Growth Investors Fund
================================================================================
Alliance Growth Investors Fund seeks to provide highest total return with
reasonable risk through investment in a mix of equity and fixed income
securities. Normally the Fund will hold approximately 70% of its total assets in
equity securities.
INVESTMENT RESULTS
================================================================================
NAV and SEC Average Annual Total Returns as of October 31, 1998
- --------------------------------------------------------------------------------
CLASS A SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 13.72% 8.88%
Five Years 11.78% 10.82%
Since Inception* 12.76% 12.02%
- --------------------------------------------------------------------------------
CLASS B SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 12.91% 8.91%
Five Years 11.02% 11.02%
Since Inception* 11.97% 11.97%
- --------------------------------------------------------------------------------
CLASS C SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 12.82% 11.82%
Five Years 11.02% 11.02%
Since Inception* 11.07% 11.07%
SEC Average Annual Total Returns
as of the most recent quarter-end (September 30, 1998)
Class A Class B Class C
-------- --------- ---------
1 Year -1.73% -1.74% 0.96%
5 Years 9.13% 9.34% 9.33%
Since Inception* 10.88% 10.84% 9.69%
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.
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: 5/4/92 Classes A & B; 8/2/93 Class C..
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
3
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES Alliance Conservative Investors Fund
================================================================================
Alliance Conservative Investors Fund seeks to provide high total return without
undue risk to principal through investment in a mix of equity and fixed income
securities. Normally the Fund will hold approximately 70% of its total assets in
fixed income securities.
INVESTMENT RESULTS
================================================================================
NAV and SEC Average Annual Total Returns as of October 31, 1998
- --------------------------------------------------------------------------------
CLASS A SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 10.56% 5.88%
Five Years 7.88% 6.94%
Since Inception* 8.86% 8.14%
- --------------------------------------------------------------------------------
CLASS B SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 9.79% 5.81%
Five Years 7.12% 7.12%
Since Inception* 8.09% 8.09%
- --------------------------------------------------------------------------------
CLASS C SHARES
- --------------------------------------------------------------------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 9.79% 8.80%
Five Years 7.14% 7.14%
Since Inception* 7.32% 7.32%
SEC Average Annual Total Returns
as of the most recent quarter-end (September 30, 1998)
Class A Class B Class C
-------- --------- ---------
1 Year 3.03% 2.99% 5.90%
5 Years 6.45% 6.65% 6.67%
Since Inception* 7.83% 7.80% 6.94%
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.
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: 5/4/92 Classes A & B; 8/2/93 Class C.
4
<PAGE>
TEN LARGEST HOLDINGS
October 31, 1998 (unaudited) Alliance Growth Investors Fund
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
COMPANY VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Notes $11,453,885 10.2%
- --------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 3,316,875 2.9
- --------------------------------------------------------------------------------------------------------
Nokia AB OY Corp. Series A 3,276,300 2.9
- --------------------------------------------------------------------------------------------------------
Home Depot, Inc. 3,045,000 2.7
- --------------------------------------------------------------------------------------------------------
Harley-Davidson, Inc. 2,906,250 2.6
- --------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. - Liberty Media Group Cl.A 2,664,375 2.4
- --------------------------------------------------------------------------------------------------------
Microsoft Corp. 2,646,875 2.3
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds 2,630,283 2.3
- --------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 2,556,250 2.3
- --------------------------------------------------------------------------------------------------------
Dayton Hudson Corp. 2,542,500 2.2
- --------------------------------------------------------------------------------------------------------
$37,038,593 32.8%
- --------------------------------------------------------------------------------------------------------
</TABLE>
MAJOR PORTFOLIO CHANGES
Six Months Ended October 31, 1998 (unaudited)
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SHARES* OR PRINCIPAL
- --------------------------------------------------------------------------------------------------------
PURCHASES BOUGHT HOLDINGS 10/31/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Astra AB Series A 50,000 50,000
- --------------------------------------------------------------------------------------------------------
Computer Sciences Corp. 20,000 20,000
- --------------------------------------------------------------------------------------------------------
Dell Computer Corp. 20,000 20,000
- --------------------------------------------------------------------------------------------------------
Microsoft Corp. 25,000 25,000
- --------------------------------------------------------------------------------------------------------
Pfizer, Inc. 12,000 12,000
- --------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 20,000 20,000
- --------------------------------------------------------------------------------------------------------
Tyco International, Ltd. 26,000 40,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.00%, 8/15/00 $1,140,000 $2,990,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.50%, 5/31/02 $1,255,000 $3,080,000
- --------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 20,000 20,000
- --------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SALES SOLD HOLDINGS 10/31/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Avon Products, Inc. 20,000 -0-
- --------------------------------------------------------------------------------------------------------
Bank One Corp. 20,000 -0-
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Association, 7.50%, 6/15/27 $1,707,000 -0-
- --------------------------------------------------------------------------------------------------------
ING Groep NV 20,000 -0-
- --------------------------------------------------------------------------------------------------------
MCI WorldCom, Inc. 20,000 40,000
- --------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 25,000 -0-
- --------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 22,500 -0-
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.375%, 5/15/99 $1,015,000 -0-
- --------------------------------------------------------------------------------------------------------
United Technologies Corp. 12,000 -0-
- --------------------------------------------------------------------------------------------------------
Walt Disney Co. 20,000 -0-
- --------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Adjusted for a Stock Split.
5
<PAGE>
INDUSTRY DIVERSIFICATION
October 31, 1998 (unaudited) Alliance Growth Investors Fund
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Manufacturing $ 360,268 0.3
- --------------------------------------------------------------------------------------------------------
Consumer Services 16,185,150 14.3
- --------------------------------------------------------------------------------------------------------
Consumer Staples 11,143,197 9.9
- --------------------------------------------------------------------------------------------------------
Energy 3,791,985 3.3
- --------------------------------------------------------------------------------------------------------
Finance 14,421,693 12.8
- --------------------------------------------------------------------------------------------------------
Healthcare 12,605,232 11.2
- --------------------------------------------------------------------------------------------------------
Multi Industry 3,116,702 2.8
- --------------------------------------------------------------------------------------------------------
Technology 13,315,050 11.8
- --------------------------------------------------------------------------------------------------------
Utilities 4,167,377 3.7
- --------------------------------------------------------------------------------------------------------
U.S. Government & Agencies 19,181,424 17.0
- --------------------------------------------------------------------------------------------------------
Corporate Debt Obligations 1,524,556 1.3
- --------------------------------------------------------------------------------------------------------
Yankee Bonds 538,345 0.5
- --------------------------------------------------------------------------------------------------------
Total Investments* 100,350,979 88.9
- --------------------------------------------------------------------------------------------------------
Cash and receivables, net of liabilities 12,481,223 11.1
- --------------------------------------------------------------------------------------------------------
Net Assets $112,832,202 100.0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Excludes short-term obligations.
6
<PAGE>
TEN LARGEST HOLDINGS
October 31, 1998 (unaudited) Alliance Conservative Investors Fund
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
COMPANY VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Notes $13,262,265 28.8%
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Association Bonds 4,441,100 9.6
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds 2,597,867 5.6
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Association Bonds 2,020,603 4.4
- --------------------------------------------------------------------------------------------------------
Enterprise Rent A Car USA Finance Co., 6.95%, 3/01/04 1,024,814 2.2
- --------------------------------------------------------------------------------------------------------
St. George Bank, Ltd., 7.15%, 10/15/05 1,021,550 2.2
- --------------------------------------------------------------------------------------------------------
Long Island Savings Bank, 7.00%, 6/13/02 1,011,500 2.2
- --------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises, Ltd., 7.50%, 10/15/27 945,851 2.1
- --------------------------------------------------------------------------------------------------------
Time Warner, Inc., 9.125%, 1/15/13 845,089 1.8
- --------------------------------------------------------------------------------------------------------
Nokia AB OY Corp. Series A 728,067 1.6
- --------------------------------------------------------------------------------------------------------
$27,898,706 60.5%
- --------------------------------------------------------------------------------------------------------
</TABLE>
MAJOR PORTFOLIO CHANGES
Six Months Ended October 31, 1998 (unaudited)
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SHARES* OR PRINCIPAL
- --------------------------------------------------------------------------------------------------------
PURCHASES BOUGHT HOLDINGS 10/31/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Association, 6.50%, 10/01/28 $663,000 $663,000
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 7.00%, 12/01/27 $331,000 $331,000
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Association, 6.50%, 3/15/28 $350,000 $350,000
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Association, 6.50%, 7/15/28 $298,000 $298,000
- --------------------------------------------------------------------------------------------------------
Microsoft Corp. 3,000 3,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bond, 5.25%, 11/15/28 $640,000 $640,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 4.25%, 11/15/03 $550,000 $550,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5.625%, 5/15/08 $1,915,000 $1,915,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5.75%, 8/15/03 $550,000 $550,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.875%, 5/15/06 $1,170,000 $2,925,000
- --------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SALES SOLD HOLDINGS 10/31/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Avon Products, Inc. 4,000 -0-
- --------------------------------------------------------------------------------------------------------
Comcast Cable Communications, 8.375%, 5/01/07 $1,100,000 -0-
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 6.50%, 6/01/11 $301,000 $3,061,000
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 7.00%, 5/01/26 $1,104,000 $322,000
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Association, 7.50%, 6/15/27 $1,610,000 -0-
- --------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 4,000 -0-
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bond, 6.125%, 11/15/27 $815,000 $1,745,000
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.50%, 5/31/02 $1,075,000 $790,000
- --------------------------------------------------------------------------------------------------------
United Technologies Corp. 4,000 -0-
- --------------------------------------------------------------------------------------------------------
Walt Disney Co. 3,000 -0-
- --------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Adjusted for a Stock split.
7
<PAGE>
INDUSTRY DIVERSIFICATION
October 31, 1998 (unaudited) Alliance Conservative Investors Fund
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Manufacturing $ 90,067 0.2
- --------------------------------------------------------------------------------------------------------
Consumer Services 2,554,254 5.5
- --------------------------------------------------------------------------------------------------------
Consumer Staples 1,818,869 3.9
- --------------------------------------------------------------------------------------------------------
Energy 611,885 1.3
- --------------------------------------------------------------------------------------------------------
Finance 2,461,940 5.4
- --------------------------------------------------------------------------------------------------------
Healthcare 2,333,920 5.1
- --------------------------------------------------------------------------------------------------------
Multi Industry 555,229 1.2
- --------------------------------------------------------------------------------------------------------
Technology 2,376,934 5.2
- --------------------------------------------------------------------------------------------------------
Utilities 754,053 1.6
- --------------------------------------------------------------------------------------------------------
U.S. Government & Agencies 22,321,835 48.4
- --------------------------------------------------------------------------------------------------------
Corporate Debt Obligations 2,881,403 6.3
- --------------------------------------------------------------------------------------------------------
Yankee Bonds 1,967,401 4.3
- --------------------------------------------------------------------------------------------------------
Total Investments* 40,727,790 88.4
- --------------------------------------------------------------------------------------------------------
Cash and receivables, net of liabilities 5,362,975 11.6
- --------------------------------------------------------------------------------------------------------
Net Assets $46,090,765 100.0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Excludes short-term obligations.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998 (unaudited) Alliance Growth Investors Fund
================================================================================
Company Shares U.S. $ Value
- ----------------------------------------------------------------------
COMMON & PREFERRED
STOCKS-70.1%
UNITED STATES
INVESTMENTS-54.4%
CONSUMER SERVICES-13.5%
BROADCASTING &
CABLE-4.7%
Cox Communications, Inc.
Cl.A (a)........................ 25,000 $ 1,371,875
Scripps E.W. Co. Cl.A............... 30,000 1,327,500
Tele-Communications, Inc. -
Liberty Media Group Cl.A (a) ... 70,000 2,664,375
------------
5,363,750
------------
ENTERTAINMENT & LEISURE-2.6%
Harley-Davidson, Inc. .............. 75,000 2,906,250
------------
RETAIL - GENERAL MERCHANDISE-6.2%
Dayton Hudson Corp. ................ 60,000 2,542,500
Home Depot, Inc. ................... 70,000 3,045,000
Wal-Mart Stores, Inc. .............. 20,000 1,380,000
------------
6,967,500
------------
15,237,500
------------
FINANCE-10.8%
BANKING - MONEY
CENTER-4.1%
BankAmerica Corp. .................. 40,000 2,297,500
Chase Manhattan Corp. .............. 40,000 2,272,500
------------
4,570,000
------------
BROKERAGE & MONEY
MANAGEMENT-2.5%
Merrill Lynch & Co., Inc. .......... 15,000 888,750
Morgan Stanley, Dean
Witter and Co. ................. 30,000 1,942,500
------------
2,831,250
------------
INSURANCE-1.9%
American International
Group, Inc. .................... 25,000 2,131,250
------------
MISCELLANEOUS-2.3%
Associates First Capital
Corp. Cl.A ..................... 12,000 846,000
MBNA Corp. ......................... 60,000 1,368,750
Newcourt Credit Group, Inc. ........ 12,000 394,500
------------
2,609,250
------------
12,141,750
------------
TECHNOLOGY-8.6%
COMPUTER
HARDWARE-2.3%
Compaq Computer Corp. .............. 40,000 1,265,000
Dell Computer Corp. (a)............. 20,000 1,310,000
------------
2,575,000
------------
COMPUTER
SERVICES-0.9%
Computer Sciences Corp. (a)......... 20,000 1,055,000
------------
COMPUTER
SOFTWARE-2.3%
Microsoft Corp. (a)................. 25,000 2,646,875
------------
NETWORKING
SOFTWARE-1.7%
Cisco Systems, Inc. (a)............. 30,000 1,890,000
------------
SEMI-CONDUCTOR
COMPONENTS-0.7%
Altera Corp. (a).................... 18,000 749,250
------------
MISCELLANEOUS-0.7%
Sanmina Corp. (a)................... 20,000 820,000
------------
9,736,125
------------
9
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) Alliance Growth Investors Fund
================================================================================
Company Shares U.S. $ Value
- ----------------------------------------------------------------------
HEALTH CARE-7.8%
BIOTECHNOLOGY-0.5%
Centocor, Inc. (a).................. 12,000 $ 534,000
------------
DRUGS-6.2%
Algos Pharmaceutical
Corp. (a)....................... 12,000 307,500
Bristol-Myers Squibb Co. ........... 30,000 3,316,875
Pfizer, Inc. ....................... 12,000 1,287,750
Schering-Plough Corp. .............. 20,000 2,057,500
------------
6,969,625
------------
MEDICAL PRODUCTS-1.1%
Medtronic, Inc. .................... 20,000 1,300,000
------------
8,803,625
------------
CONSUMER STAPLES-6.6%
COSMETICS-2.3%
Gillette Co. ....................... 30,000 1,348,125
The Estee Lauder Co., Inc. Cl.A..... 20,000 1,311,250
------------
2,659,375
------------
RETAIL - FOOD &
DRUG-2.0%
Kroger Co. (a)...................... 40,000 2,220,000
------------
TOBACCO-2.3%
Philip Morris Cos., Inc. ........... 50,000 2,556,250
------------
7,435,625
------------
ENERGY-2.6%
OIL SERVICE-2.6%
Halliburton Co. .................... 40,000 1,437,500
Noble Drilling Corp. (a)............ 90,000 1,546,875
------------
2,984,375
------------
MULTI INDUSTRY
COMPANIES-2.5%
Tyco International, Ltd. ........... 40,000 2,477,500
U.S. Industries, Inc. .............. 25,000 407,813
------------
2,885,313
------------
UTILITIES-2.0%
TELEPHONE UTILITY-2.0%
MCI WorldCom, Inc. (a).............. 40,000 2,210,000
------------
Total United States
Investments
(cost $51,035,032).............. 61,434,313
------------
FOREIGN
INVESTMENTS-15.7%
BRAZIL-0.4%
Telecomunicacoes
Brasileiras, SA
(ADR) (a)....................... 6,000 455,625
------------
CANADA-0.2%
Newcourt Credit Group, Inc. ........ 8,000 263,124
------------
FINLAND-3.2%
Nokia AB OY Corp.
Series A ....................... 36,000 3,276,300
Orion-Yhtymae OY Cl.B............... 15,000 360,262
------------
3,636,562
------------
FRANCE-3.1%
Carrefour, SA ...................... 1,500 995,698
Sanofi, SA ......................... 6,000 939,542
SEITA ............................. 12,000 712,756
Total, SA Cl.B...................... 7,000 807,610
------------
3,455,606
------------
GERMANY-0.6%
ProSieben Media AG pfd. ............ 12,000 615,756
------------
10
<PAGE>
Alliance Growth Investors Fund
================================================================================
Company Shares U.S. $ Value
- ----------------------------------------------------------------------
JAPAN-0.8%
Canon, Inc. ........................ 16,000 $ 302,625
Honda Motor Co. .................... 12,000 360,268
NTT Mobile Communications .......... 8 288,900
------------
951,793
------------
NETHERLANDS-0.9%
Akzo Nobel NV ...................... 25,000 971,393
------------
SPAIN-1.6%
Banco Bilbao Vizcaya, SA ........... 30,000 404,657
Tabacalera, SA Series A............. 30,000 724,124
Telefonica de Espana ............... 15,000 677,268
------------
1,806,049
------------
SWEDEN-0.7%
Astra AB Series A................... 50,000 810,274
------------
SWITZERLAND-2.9%
Nestle, SA ......................... 600 1,274,994
Novartis AG ........................ 400 720,136
Zurich Allied AG ................... 2,000 1,214,491
------------
3,209,621
------------
UNITED KINGDOM-1.3%
Royal Bank of Scotland
Group .......................... 30,000 397,671
Tomkins Plc ........................ 50,000 231,389
United News Media Plc .............. 30,000 331,894
Vodafone Group Plc ................. 40,000 535,584
------------
1,496,538
------------
Total Foreign Investments
(cost $15,314,396).............. 17,672,341
------------
Total Common &
Preferred Stocks
(cost $66,349,428).............. 79,106,654
------------
Principal
Amount
Company (000) U.S. $ Value
- ----------------------------------------------------------------------
DEBT OBLIGATIONS-18.9%
U.S. GOVERNMENT &
AGENCY OBLIGATIONS-17.0%
Federal Home Loan Bank
7.00%, 9/01/11 ................. $ 746 $ 761,958
Federal National Mortgage
Association
6.50%, 1/01/11 ................. 76 77,595
6.50%, 5/01/11 ................. 1,496 1,517,570
6.50%, 10/01/28 ................ 472 476,039
7.00%, 5/01/26 ................. 214 219,020
7.00%, 12/01/27 ................ 241 246,682
Government National
Mortgage Association
6.50%, 3/15/28 ................. 370 373,976
6.50%, 7/15/28 ................. 328 331,359
7.00%, 2/15/28 ................. 1,068 1,093,057
U.S. Treasury Bonds
5.25%, 11/15/28 ................ 650 644,111
6.125%, 11/15/27 ............... 1,765 1,986,172
U.S. Treasury Notes
4.25%, 11/15/03 ................ 485 483,558
5.625%, 5/15/08 ................ 635 684,511
5.75%, 8/15/03 ................. 450 476,928
6.00%, 8/15/00 ................. 2,990 3,075,484
6.50%, 8/31/01 ................. 2,175 2,296,321
6.50%, 5/31/02 ................. 3,080 3,292,243
6.875%, 5/15/06 ................ 1,000 1,144,840
------------
19,181,424
------------
CORPORATE DEBT
OBLIGATIONS-1.4%
INDUSTRIAL-1.4%
Beckman Coulter
7.45%, 3/04/08 ................. 385 377,837
Coltec Industries, Inc.
7.50%, 4/15/08 (b).............. 420 392,175
Time Warner, Inc.
9.125%, 1/15/13 ................ 625 754,544
------------
1,524,556
------------
11
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) Alliance Growth Investors Fund
================================================================================
Principal
Amount
Company (000) U.S. $ Value
- ----------------------------------------------------------------------
YANKEE BOND-0.5%
Fuji LLC pfd.
9.87%, 12/31/49 (b)............. $ 400 $ 234,345
Iridium Operating LLC
Series D
10.875%, 7/15/05 ............... 400 304,000
------------
538,345
------------
Total Debt Obligations
(cost $21,078,144).............. 21,244,325
------------
SHORT-TERM
INVESTMENTS-11.2%
Federal Home Loan
Mortgage Corp.
4.79%, 11/10/98 ................ 3,000 2,996,408
4.79%, 12/21/98 ................ 4,700 4,668,732
4.80%, 11/16/98 ................ 3,600 3,592,800
Student Loan Marketing
Association
5.42%, 11/02/98 ................ 1,400 1,399,789
------------
Total Short-Term
Investments
(amortized cost
$12,657,729).................... 12,657,729
------------
TOTAL INVESTMENTS-100.2%
(cost $100,085,301)............. 113,008,708
Other assets less
liabilities-(0.2%).............. (176,506)
------------
NET ASSETS-100%..................... $112,832,202
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998, these securities amounted to $626,520 or 0.6% of net assets.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
12
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998 (unaudited) Alliance Conservative Investors Fund
================================================================================
Company Shares U.S. $ Value
- ----------------------------------------------------------------------
COMMON & PREFERRED
STOCKS-29.4%
UNITED STATES
INVESTMENTS-22.0%
CONSUMER SERVICES-5.2%
BROADCASTING &
CABLE-1.9%
Cox Communications, Inc. Cl.A (a)... 5,000 $ 274,375
Scripps E.W. Co. Cl.A .............. 6,000 265,500
Tele-Communications, Inc. -
Liberty Media Group
Cl.A (a) ....................... 9,000 342,562
------------
882,437
------------
ENTERTAINMENT &
LEISURE-1.0%
Harley-Davidson, Inc. .............. 12,000 465,000
------------
RETAIL - GENERAL
MERCHANDISE-2.3%
Dayton Hudson Corp. ................ 9,000 381,375
Home Depot, Inc. ................... 9,000 391,500
Wal-Mart Stores, Inc. .............. 4,000 276,000
------------
1,048,875
------------
2,396,312
------------
FINANCE-4.4%
BANKING - MONEY
CENTER-1.7%
BankAmerica Corp. .................. 9,000 516,937
Chase Manhattan Corp. .............. 5,000 284,063
------------
801,000
------------
BROKERAGE & MONEY
MANAGEMENT-0.8%
Merrill Lynch & Co., Inc. .......... 1,500 88,875
Morgan Stanley, Dean
Witter and Co. ................. 4,000 259,000
------------
347,875
------------
INSURANCE-0.7%
American International
Group, Inc. .................... 3,750 319,688
------------
MISCELLANEOUS-1.2%
Associates First Capital
Corp. Cl.A ..................... 3,000 211,500
MBNA Corp. ......................... 11,999 273,727
Newcourt Credit Group, Inc. ........ 2,000 65,750
------------
550,977
------------
2,019,540
------------
HEALTH CARE-3.7%
BIOTECHNOLOGY-0.2%
Centocor, Inc. (a).................. 2,000 89,000
------------
DRUGS-2.9%
Algos Pharmaceutical
Corp. (a)....................... 2,000 51,250
Bristol-Myers Squibb Co. ........... 6,000 663,375
Pfizer, Inc. ....................... 3,000 321,937
Schering-Plough Corp. .............. 3,000 308,625
------------
1,345,187
------------
MEDICAL PRODUCTS-0.6%
Medtronic, Inc. .................... 4,000 260,000
------------
1,694,187
------------
TECHNOLOGY-3.5%
COMPUTER
HARDWARE-1.0%
Compaq Computer Corp. .............. 8,000 253,000
Dell Computer Corp. (a)............. 3,000 196,500
------------
449,500
------------
COMPUTER
SERVICES-0.5%
Computer Sciences
Corp. (a)....................... 4,000 211,000
------------
COMPUTER
SOFTWARE-0.7%
Microsoft Corp. (a)................. 3,000 317,625
------------
NETWORKING
SOFTWARE-0.6%
Cisco Systems, Inc. (a)............. 4,500 283,500
------------
13
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) Alliance Conservative Investors Fund
================================================================================
Company Shares U.S. $ Value
- ----------------------------------------------------------------------
SEMI-CONDUCTOR
COMPONENTS-0.4%
Altera Corp. (a).................... 4,000 $ 166,500
------------
MISCELLANEOUS-0.3%
Sanmina Corp. (a)................... 4,000 164,000
------------
1,592,125
------------
CONSUMER STAPLES-2.5%
COSMETICS-0.9%
Gillette Co. ....................... 5,000 224,687
The Estee Lauder Co., Inc.
Cl.A............................ 3,000 196,688
------------
421,375
------------
RETAIL - FOOD &
DRUG-0.8%
Kroger Co. (a)...................... 7,000 388,500
------------
TOBACCO-0.8%
Philip Morris Cos., Inc. ........... 7,000 357,875
------------
1,167,750
------------
MULTI INDUSTRY
COMPANIES-1.0%
Tyco International, Ltd. ........... 6,000 371,625
U.S. Industries, Inc. .............. 7,000 114,187
------------
485,812
------------
ENERGY-1.0%
OIL SERVICE-1.0%
Halliburton Co. .................... 6,000 215,625
Noble Drilling Corp. (a)............ 15,000 257,813
------------
473,438
------------
UTILITIES-0.7%
TELEPHONE UTILITY-0.7%
MCI WorldCom, Inc. (a).............. 6,000 331,500
------------
Total United States
Investments
(cost $8,169,990)............... 10,160,664
------------
FOREIGN
INVESTMENTS-7.4%
BRAZIL-0.2%
Telecomunicacoes
Brasileiras, SA
(ADR) (a)....................... 1,300 98,719
------------
CANADA-0.2%
Newcourt Credit Group, Inc. ........ 2,000 65,781
------------
FINLAND-1.7% Nokia AB OY Corp.
Series A ....................... 8,000 728,067
Orion-Yhtymae OY Cl.B............... 3,000 72,052
------------
800,119
------------
FRANCE-1.3%
Carrefour, SA ...................... 300 199,140
Sanofi, SA ......................... 1,000 156,590
SEITA ............................. 2,000 118,793
Total, SA Cl.B...................... 1,200 138,447
------------
612,970
------------
GERMANY-0.2%
ProSieben Media AG pfd. ............ 2,000 102,626
------------
JAPAN-0.4%
Canon, Inc. ........................ 3,000 56,742
Honda Motor Co. .................... 3,000 90,067
NTT Mobile
Communications ................. 1 36,112
------------
182,921
------------
NETHERLANDS-0.3%
Akzo Nobel NV ...................... 4,000 155,423
------------
SPAIN-0.8%
Banco Bilbao Vizcaya, SA ........... 5,000 67,443
Tabacalera, SA Series A............. 5,000 120,687
Telefonica de Espana ............... 4,000 180,605
------------
368,735
------------
SWEDEN-0.3%
Astra AB Series A................... 8,000 129,644
------------
14
<PAGE>
Alliance Conservative Investors Fund
================================================================================
Shares or
Principal
Amount
Company (000) U.S. $ Value
- ----------------------------------------------------------------------
SWITZERLAND-1.3%
Nestle, SA ......................... 100 $ 212,499
Novartis AG ........................ 70 126,024
Zurich Allied AG (a)................ 400 242,898
------------
581,421
------------
UNITED KINGDOM-0.7%
Royal Bank of Scotland
Group .......................... 5,000 66,278
Tomkins Plc ........................ 15,000 69,417
United News Media Plc .............. 5,000 55,316
Vodafone Group Plc ................. 8,000 107,117
------------
298,128
------------
Total Foreign Investments
(cost $2,848,912)............... 3,396,487
------------
Total Common &
Preferred Stocks
(cost $11,018,902).............. 13,557,151
------------
DEBT OBLIGATIONS-59.0%
U.S. GOVERNMENT &
AGENCY OBLIGATIONS-48.4%
Federal National Mortgage
Association
6.50%, 6/01/11 ................. $3,061 3,106,426
6.50%, 10/01/28 ................ 663 668,480
7.00%, 5/01/26 ................. 322 328,531
7.00%, 12/01/27 ................ 331 337,663
Government National
Mortgage Association
6.50%, 3/15/28 ................. 350 354,031
6.50%, 7/15/28 ................. 298 301,236
7.00%, 7/15/27 ................. 369 377,420
7.00%, 2/15/28 ................. 965 987,916
U.S. Treasury Bonds
5.25%, 11/15/28 ................ 640 634,201
6.125%, 11/15/27 ............... 1,745 1,963,666
Principal
Amount
Company (000) U.S. $ Value
- ----------------------------------------------------------------------
U.S. Treasury Notes
4.125%, 11/15/03 ............... $ 550 $ 548,365
5.625%, 5/15/08 ................ 1,915 2,064,313
5.75%, 8/15/03 ................. 550 582,912
6.00%, 8/15/00 ................. 350 360,006
6.25%, 4/30/01 ................. 925 966,190
6.375%, 5/15/99 ................ 2,700 2,726,163
6.50%, 8/31/01 ................. 1,725 1,821,220
6.50%, 5/31/02 ................. 790 844,439
6.875%, 5/15/06 ................ 2,925 3,348,657
------------
22,321,835
------------
CORPORATE DEBT
OBLIGATIONS-6.3%
BANKING-2.2%
Long Island Savings Bank
7.00%, 6/13/02 ................. 1,000 1,011,500
------------
INDUSTRIAL-1.9%
Time Warner, Inc.
9.125%, 1/15/13 ................ 700 845,089
------------
TRANSPORTATION-2.2%
Enterprise Rent A Car USA
Finance Co.
6.95%, 3/01/04 (b).............. 1,000 1,024,814
------------
2,881,403
------------
YANKEE BONDS-4.3%
Royal Caribbean
Cruises, Ltd.
7.50%, 10/15/27 ................ 1,050 945,851
St. George Bank, Ltd.
7.15%, 10/15/05 (b)............. 1,000 1,021,550
------------
1,967,401
------------
Total Debt Obligations
(cost $26,587,856).............. 27,170,639
------------
15
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) Alliance Conservative Investors Fund
================================================================================
Principal
Amount
Company (000) U.S. $ Value
- ----------------------------------------------------------------------
SHORT-TERM
INVESTMENTS-13.0%
Student Loan Marketing
Association
5.42%, 11/02/98
(amortized cost
$5,999,097)..................... $6,000 $ 5,999,097
------------
TOTAL INVESTMENTS -101.4%
(cost $43,605,855).............. $46,726,887
Other assets less
liabilities-(1.4%).............. (636,122)
------------
NET ASSETS-100%..................... $46,090,765
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998, these securities amounted to $2,046,364 or 4.4% of net assets.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
16
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES Alliance Growth Investors and
October 31, 1998 (unaudited) Conservative Investors Funds
================================================================================
<TABLE>
<CAPTION>
Growth Conservative
Investors Fund Investors Fund
-------------- --------------
<S> <C> <C>
ASSETS
Investments in securities, at value (cost $100,085,301 and $43,605,855,
respectively) ................................................................. $113,008,708 $ 46,726,887
Cash ............................................................................ 168,693 38,447
Receivable for investment securities and foreign currency sold .................. 1,791,987 289,335
Interest and dividends receivable ............................................... 382,575 444,419
Foreign taxes receivable ........................................................ 34,217 5,664
Receivable for shares of beneficial interest sold ............................... 18,484 196,968
------------ ------------
Total assets .................................................................... 115,404,664 47,701,720
------------ ------------
LIABILITIES
Payable for investment securities and foreign currency purchased ................ 2,269,429 1,313,180
Distribution fee payable ........................................................ 69,992 30,244
Advisory fee payable ............................................................ 67,438 15,931
Payable for shares of beneficial interest redeemed .............................. 3,263 110,327
Accrued expenses ................................................................ 162,340 141,273
------------ ------------
Total liabilities ............................................................... 2,572,462 1,610,955
------------ ------------
NET ASSETS ......................................................................... $112,832,202 $ 46,090,765
============ ============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par ........................................... $ 74 $ 37
Additional paid-in capital ...................................................... 88,218,979 40,028,946
Undistributed net investment income ............................................. 573,357 378,109
Accumulated net realized gain on investments and foreign currency transactions .. 11,137,127 2,565,185
Net unrealized appreciation of investments and foreign currency denominated
assets and liabilities ........................................................ 12,902,665 3,118,488
------------ ------------
$112,832,202 $ 46,090,765
============ ============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share ($35,695,634 /2,352,706 and
$13,761,451 / 1,132,521 shares of beneficial interest issued and
outstanding, respectively) .................................................... $15.17 $12.15
Sales charge--4.25% of public offering price .................................... .67 .54
------ ------
Maximum offering price .......................................................... $15.84 $12.69
====== ======
Class B Shares
Net asset value and offering price per share ($68,849,736 /4,545,974 and
$27,477,630 / 2,220,438 shares of beneficial interest issued and
outstanding, respectively) .................................................... $15.15 $12.37
====== ======
Class C Shares
Net asset value and offering price per share ($8,286,832 / 546,964 and
$4,851,684 / 392,054 shares of beneficial interest issued and
outstanding, respectively) .................................................... $15.15 $12.38
====== ======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
17
<PAGE>
STATEMENTS OF OPERATIONS Alliance Growth Investors and
Six Months Ended October 31, 1998 (unaudited) Conservative Investors Funds
================================================================================
<TABLE>
<CAPTION>
Growth Conservative
Investors Fund Investors Fund
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................. $ 1,164,221 $ 994,048
Dividends (net of foreign tax withheld of $22,354 and $4,152,
respectively)...................................................... 414,707 74,994
-------------- --------------
Total income......................................................... 1,578,928 1,069,042
-------------- --------------
EXPENSES
Advisory fee......................................................... 423,895 168,514
Distribution fee - Class A........................................... 51,988 19,282
Distribution fee - Class B........................................... 349,890 138,265
Distribution fee - Class C........................................... 42,008 22,148
Transfer agency...................................................... 119,848 48,042
Custodian............................................................ 70,745 74,862
Printing............................................................. 27,100 11,592
Audit and legal...................................................... 22,768 21,248
Registration......................................................... 15,701 14,554
Trustees' fees....................................................... 12,900 12,900
Miscellaneous........................................................ 22,219 5,991
-------------- --------------
Total expenses....................................................... 1,159,062 537,398
Less: expenses waived and assumed by adviser (See Note B)............ -0- (105,608)
Less: expense offset arrangement (See Note B)........................ (8,119) (2,950)
-------------- --------------
Net expenses......................................................... 1,150,943 428,840
-------------- --------------
Net investment income................................................ 427,985 640,202
-------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions......................... 6,250,348 1,557,591
Net realized loss on foreign currency transactions................... (41,251) (11,700)
Net change in unrealized appreciation (depreciation) of:
Investments........................................................ (6,459,653) (1,090,708)
Foreign currency denominated assets and liabilities................ 3,089 336
-------------- --------------
Net gain (loss) on investments and foreign currency transactions..... (247,467) 455,519
-------------- --------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 180,518 $ 1,095,721
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
18
<PAGE>
Alliance Growth Investors and
STATEMENT OF CHANGES IN NET ASSETS Conservative Investors Funds
================================================================================
<TABLE>
<CAPTION>
Growth Investors Fund Conservative Investors Fund
----------------------------------- -----------------------------------
Six Months Ended Six Months Ended
October 31, 1998 Year Ended October 31, 1998 Year Ended
(unaudited) April 30, 1998 (unaudited) April 30, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income.......... $ 427,985 $ 316,926 $ 640,202 $ 1,246,838
Net realized gain on investments,
futures contracts and foreign
currency transactions........ 6,209,097 14,237,544 1,545,891 3,344,528
Net change in unrealized
appreciation (depreciation) of
investments and foreign
currency denominated assets
and liabilities.............. (6,456,564) 10,644,067 (1,090,372) 2,461,319
-------------- -------------- -------------- --------------
Net increase in net assets from
operations................... 180,518 25,198,537 1,095,721 7,052,685
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A...................... -0- (316,225) (149,638) (410,778)
Class B...................... -0- (90,880) (228,161) (759,381)
Class C...................... -0- (9,212) (36,374) (109,342)
Net realized gain on investments
Class A...................... -0- (2,631,810) -0- (787,612)
Class B...................... -0- (6,052,618) -0- (1,864,487)
Class C...................... -0- (613,482) -0- (269,390)
TRANSACTIONS IN SHARES
OF BENEFICIAL INTEREST
Net increase (decrease)........ (1,524,104) 3,496,273 1,101,214 (2,590,456)
-------------- -------------- -------------- --------------
Total increase (decrease)...... (1,343,586) 18,980,583 1,782,762 261,239
NET ASSETS
Beginning of year.............. 114,175,788 95,195,205 44,308,003 44,046,764
-------------- -------------- -------------- --------------
End of period (including
undistributed net investment
income of $573,357, $145,372,
$378,109 and $152,080,
respectively)................ $ 112,832,202 $ 114,175,788 $ 46,090,765 $ 44,308,003
============== ============== ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS Alliance Growth Investors and
October 31, 1998 (unaudited) Conservative Investors Funds
================================================================================
NOTE A: Significant Accounting Policies
Alliance Growth Investors Fund and Conservative Investors Fund (the "Funds"),
two series of The Alliance Portfolios (the "Trust"), are registered under the
Investment Company Act of 1940 as diversified, open-end investment companies.
The Funds offer Class A, Class B and Class C 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. All
three 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 Funds.
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 sales 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.
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 and foreign exchange
currency contracts, 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 Funds' books and the U.S. dollar equivalent amounts
actually received or paid. The Funds do 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.
3. Taxes
It is each Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment
20
<PAGE>
Alliance Growth Investors and
Conservative Investors Funds
================================================================================
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 Funds accrete discounts and amortize 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 Funds are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in each Fund represented by the net assets of such class, except that each
Fund's Class B and Class C shares bear higher distribution and in the case of
Class B higher transfer agent fees than Class A shares. Expenses of the Trust
are charged to each 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 Funds pay Alliance
Capital Management L.P. (the "Adviser"), an advisory fee at an annual rate of
.75% of each Fund's average daily net assets. Such fee is accrued daily and paid
monthly. The Adviser has agreed to voluntarily waive its fees and bear certain
expenses so that total expenses do not exceed on an annual basis 1.40%, 2.10%
and 2.10% of average net assets, respectively, for the Class A, Class B and
Class C shares of the Conservative Investors Fund. For the six months ended
October 31, 1998, such reimbursement amounted to $105,608 for the Conservative
Investors Fund.
The Funds compensate 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 Funds. Such compensation
amounted to $86,138 and $33,444 for the Growth Investors Fund and Conservative
Investors Fund, respectively, for the six months ended October 31, 1998.
In addition, for the six months ended October 31, 1998, the Funds' expenses were
reduced by $8,119 and $2,950 for the Growth Investors Fund and the Conservative
Investors Fund, respectively, under expense offset arrangements with Alliance
Fund Services. Transfer Agency fees reported in the Statements of Operations
exclude these credits.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of each Fund's shares. The Distributor
received front-end sales charges of $4,499 from the sales of Class A shares and
$28,336 and $1,247 in contingent deferred sales charges imposed upon redemptions
by shareholders of Class B and Class C shares, respectively, for the six months
ended October 31, 1998 for the Growth Investors Fund. The Distributor also
received front-end sales charges of $2,559 from the sales of Class A shares and
$16,964 and $1,837 in contingent deferred sales charges imposed upon redemptions
by shareholders of Class B and Class C shares, respectively, for the six months
ended October 31, 1998 for the Conservative Investors Fund.
Brokerage commissions paid on investment transactions for the six months ended
October 31, 1998 amounted to $96,745 and $18,982 for the Growth Investors and
Conservative Investors Funds, respectively, none of which was paid to Donaldson,
Lufkin & Jenrette Securities Corp., an affiliate of the Adviser.
Accrued expenses includes amounts owed to two of the Trustees under a deferred
compensation plan of $47,559 and $16,590 for the Growth Investors and
Conservative Investors Funds, respectively.
21
<PAGE>
Alliance Growth Investors and
NOTES TO FINANCIAL STATEMENTS (continued) Conservative Investors Funds
================================================================================
NOTE C: Distribution Plans
The Funds have adopted a Plan for each class of shares of the Funds pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (each a "Plan" and
collectively the "Plans"). Under the Plans, the Funds pay a distribution fee to
the Distributor at an annual rate of up to .50% of each Fund's average daily net
assets attributable to the Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. The fees are accrued daily and
paid monthly. The Trustees currently limit payments under the Class A plan to
.30% of each Fund's average daily net assets attributable to Class A shares. The
Plans provide that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities.
In addition for the year ended April 30, 1998, the Funds' expenses were reduced
by $8,119 and $2,950 for the Growth Investors and the Conservative Investors
Fund, respectively, under expense offset arrangements with Alliance Fund
Services. Transfer Agency fees reported in the Statement of Operations exclude
these credits.
The Funds are not obligated under the Plans to pay any distribution services fee
in excess of the amounts set forth above. The purpose of the payments to the
Distributor under the Plans is to compensate the Distributor for its
distribution services with respect to the sale of each Fund's shares. Since the
Distributor's compensation is not directly tied to its expenses, the amount of
compensation received by it under the Plan during any year may be more or less
than its actual expenses. For this reason, the Plans are characterized by the
staff of the Commission as being of the "compensation" variety.
In the event that a Plan is terminated or not continued, no distribution
services fees (other than current amounts accrued but not yet paid) would be
owed by the Funds to the Distributor with respect to the relevant class.
The Plans also provide that the Adviser may use its own resources to finance the
distribution of each Fund's shares.
- --------------------------------------------------------------------------------
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the Growth Investors Fund aggregated
$30,598,434 and $38,043,177, respectively, for the six months ended October 31,
1998. There were purchases of $13,163,967 and sales of $9,977,097 of U.S.
government and government agency securities for the six months ended October 31,
1998. At October 31, 1998, the cost of investments for federal income tax
purposes for the Growth Investors Fund was substantially the same as the cost
for financial reporting purposes. Accordingly, gross unrealized appreciation of
investments was $15,195,915 and gross unrealized depreciation of investments was
$2,272,508 resulting in net unrealized appreciation of $12,923,407 excluding
foreign currency transactions.
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the Conservative Investors Fund aggregated
$5,165,914 and $8,683,177, respectively, for the six months ended October 31,
1998. There were purchases of $14,673,070 and sales of $12,525,866, of U.S.
government and government agency obligations for the six months ended October
31, 1998. At October 31, 1998, the cost of investments for federal income tax
purposes for the Conservative Investors Fund was substantially the same as the
cost for financial reporting purposes. Accordingly, gross unrealized
appreciation of investments was $3,442,497 and gross unrealized depreciation of
investments was $321,465 resulting in net unrealized appreciation of $3,121,032
excluding foreign currency transactions.
The Alliance Growth Investors and Conservative Investors Funds incurred and
elected to defer post October currency losses of $116,818 and $26,532,
respectively, for the year ended April 30, 1998. To the extent that any post
October loss is used to offset future capital gains, it is probable that these
gains will not be distributed to shareholders.
1. Forward Exchange Currency Contracts
The Growth Investors and Conservative Investors Funds enter into forward
exchange currency contracts in order to hedge exposure to changes in foreign
currency exchange rates on foreign portfolio holdings. A forward exchange
currency contract is a commitment to purchase
22
<PAGE>
Alliance Growth Investors and
Conservative Investors Funds
================================================================================
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 contracts is included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of forward exchange currency contracts held are
recorded for financial reporting purposes as unrealized gains or losses by the
Funds.
The Funds' custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Funds having a value equal
to the aggregate amount of the Funds' 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. The face or contract amount, in U.S.
dollars, reflects the total exposure the Funds have in that particular currency
contract.
At October 31, 1998, there were no outstanding forward exchange currency
contracts for the Growth Investors Fund and the Conservative Investors Fund.
2. Financial Futures Contracts
The Funds may buy or sell financial futures contracts for the purpose of hedging
their portfolios against adverse affects of anticipated movements in the market.
The Funds bear the market risk that arises from changes in the value of these
financial instruments. The Fund's activities in domestic futures contracts are
conducted through regulated exchanges which do not result in counterparty credit
risk.
At the time the Funds enter into a futures contract, each Fund deposits and
maintains with their custodian as collateral an initial margin as required by
the exchange on which the transaction is effected. Pursuant to the contract, the
Funds agree to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in the value of the contract.
Such receipts or payments are known as variation margin and are recorded by the
Funds as unrealized gains or losses. When the contract is closed, the Funds
record a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the time it was closed. At October 31,
1998, the Funds had no outstanding futures contracts.
- --------------------------------------------------------------------------------
NOTE E: Shares of Beneficial Interest
There is an unlimited number of $0.00001 par value shares of beneficial interest
authorized, divided into three classes, designated Class A, Class B and Class C
shares for both Funds. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Alliance Growth Investors Fund
----------------------------------- -----------------------------------
SHARES AMOUNT
----------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
October 31, 1998 April 30, October 31, 1998 April 30,
(unaudited) 1998 (unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Class A
Shares sold....................... 197,772 224,299 $ 2,962,220 $ 3,232,642
Shares issued in reinvestment of
dividends and distributions.... 7 216,972 100 2,877,051
Shares converted from Class B..... 157,629 117,685 2,353,767 1,696,586
Shares redeemed................... (204,566) (449,023) (3,009,411) (6,467,086)
-------------- -------------- -------------- --------------
Net increase ..................... 150,842 109,933 $ 2,306,676 $ 1,339,193
============== ============== ============== ==============
</TABLE>
23
<PAGE>
Alliance Growth Investors and
NOTES TO FINANCIAL STATEMENTS (continued) Conservative Investors Funds
================================================================================
<TABLE>
<CAPTION>
Alliance Growth Investors Fund
----------------------------------- -----------------------------------
SHARES AMOUNT
----------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
October 31, 1998 April 30, October 31, 1998 April 30,
(unaudited) 1998 (unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Class B
Shares sold....................... 323,902 658,517 $ 4,833,608 $ 9,583,213
Shares issued in reinvestment of
dividends and distributions.... 10 453,712 155 6,043,860
Shares converted to Class A....... (157,635) (117,679) (2,353,767) (1,696,586)
Shares redeemed................... (423,888) (897,932) (6,294,205) (12,997,170)
-------------- -------------- -------------- --------------
Net increase (decrease)........... (257,611) 96,618 $ (3,814,209) $ 933,317
============== ============== ============== ==============
Class C
Shares sold....................... 95,818 192,391 $ 1,436,800 $ 2,775,334
Shares issued in reinvestment of
dividends and distributions.... 22 46,021 299 613,462
Shares redeemed................... (99,975) (147,143) (1,453,670) (2,165,033)
-------------- -------------- -------------- --------------
Net increase (decrease)........... (4,135) 91,269 $ (16,571) $ 1,223,763
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Alliance Conservative Investors Fund
----------------------------------- -----------------------------------
SHARES AMOUNT
----------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
October 31, 1998 April 30, October 31, 1998 April 30,
(unaudited) 1998 (unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Class A
Shares sold....................... 120,536 89,645 $ 1,437,057 $ 1,062,839
Shares issued in reinvestment of
dividends and distributions.... 12,245 99,918 144,943 1,132,237
Shares converted from Class B..... 179,664 63,018 2,166,437 754,998
Shares redeemed................... (158,906) (322,476) (1,893,473) (3,841,307)
-------------- -------------- -------------- --------------
Net increase (decrease)........... 153,539 (69,895) $ 1,854,964 $ (891,233)
============== ============== ============== ==============
Class B
Shares sold....................... 336,981 460,037 $ 4,112,935 $ 5,586,632
Shares issued in reinvestment of
dividends and distributions.... 17,306 214,784 209,244 2,476,221
Shares converted to Class A....... (182,060) (62,011) (2,166,437) (754,998)
Shares redeemed................... (284,037) (721,523) (3,528,009) (8,753,508)
-------------- -------------- -------------- --------------
Net decrease...................... (111,810) (108,713) $ (1,372,267) $ (1,445,653)
============== ============== ============== ==============
Class C
Shares sold....................... 101,723 82,073 $ 1,243,126 $ 988,763
Shares issued in reinvestment of
dividends and distributions.... 2,877 31,107 34,764 358,640
Shares redeemed................... (53,924) (132,931) (659,373) (1,600,973)
-------------- -------------- -------------- --------------
Net increase (decrease)........... 50,676 (19,751) $ 618,517 $ (253,570)
============== ============== ============== ==============
</TABLE>
24
<PAGE>
FINANCIAL HIGHLIGHTS Alliance Growth Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1998 --------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year......... $15.09 $13.12 $14.08 $12.08 $11.61 $11.35
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income...................... .10(a) .12(a) .16(a)(b) .10(b) .25(b) .12(b)
Net realized and unrealized gain (loss)
on investment transactions.............. (.02) 3.34 .76 2.75 .38 .39
------ ------ ------ ------ ----- ------
Net increase in net asset
value from operations................... .08 3.46 .92 2.85 .63 .51
------ ------ ------ ------ ----- ------
Less: Dividends and Distributions
Dividends from net investment income ...... -0- (.16) (.19) (.26) (.15) (.11)
Distributions from net realized gains ..... -0- (1.33) (1.69) (.59) (.01) (.14)
------ ------ ------ ------ ----- ------
Total dividends and distributions.......... -0- (1.49) (1.88) (.85) (.16) (.25)
------ ------ ------ ------ ----- ------
Net asset value, end of period............. $15.17 $15.09 $13.12 $14.08 $12.08 $11.61
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... .53% 27.96% 6.69% 23.87% 5.57% 4.46%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $35,696 $33,222 $27,453 $30,608 $22,189 $16,759
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 1.54%(d)(e) 1.60%(d) 1.56%(d) 1.40% 1.40% 1.40%
Expenses, before waivers/
reimbursements........................ 1.54%(e) 1.60% 1.73% 1.65% 1.97% 2.33%
Net investment income................... 1.26%(e) .81% 1.14% 2.02% 2.32% 1.67%
Portfolio turnover rate.................... 46% 137% 133% 209% 134% 96%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 30.
25
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Growth Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1998 --------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $15.12 $13.11 $14.08 $12.09 $11.65 $11.41
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income...................... .04(a) .01(a) .06(a)(b) .06(b) .17(b) .07(b)
Net realized and unrealized gain (loss)
on investment transactions.............. (.01) 3.35 .77 2.70 .38 .37
------ ------ ------ ------ ------ ------
Net increase in net asset
value from operations................... .03 3.36 .83 2.76 .55 .44
------ ------ ------ ------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income ...... -0- (.02) (.11) (.18) (.10) (.06)
Distributions from net realized gains ..... -0- (1.33) (1.69) (.59) (.01) (.14)
------ ------ ------ ------ ------ ------
Total dividends and distributions.......... -0- (1.35) (1.80) (.77) (.11) (.20)
------ ------ ------ ------ ------ ------
Net asset value, end of period............. $15.15 $15.12 $13.11 $14.08 $12.09 $11.65
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... .20% 27.04% 5.98% 23.06% 4.83% 3.84%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $68,850 $72,618 $61,709 $59,978 $43,328 $30,871
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 2.27%(d)(e) 2.31%(d) 2.27%(d) 2.10% 2.10% 2.11%
Expenses, before waivers/
reimbursements........................ 2.27%(e) 2.31% 2.44% 2.35% 2.67% 3.00%
Net investment income................... .53%(e) .10% .42% 1.15% 1.62% .95%
Portfolio turnover rate.................... 46% 137% 133% 209% 134% 96%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 30.
26
<PAGE>
Alliance Growth Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
Six Months
Ended August 2,
October 31, Year Ended April 30, (1993)(f)
1998 -------------------------------------------------- to April 30,
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $15.13 $13.12 $14.09 $12.10 $11.65 $11.88
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income...................... .04(a) .02(a) .06(a)(b) .06(b) .18(b) .08(b)
Net realized and unrealized gain (loss)
on investment transactions.............. (.02) 3.34 .77 2.70 .38 (.11)
------ ------ ------ ------ ----- ------
Net increase (decrease) in net asset
value from operations................... .02 3.36 .83 2.76 .56 (.03)
------ ------ ------ ------ ----- ------
Less: Dividends and Distributions
Dividends from net investment income ...... -0- (.02) (.11) (.18) (.10) (.06)
Distributions from net realized gains ..... -0- (1.33) (1.69) (.59) (.01) (.14)
------ ------ ------ ------ ----- ------
Total dividends and distributions.......... -0- (1.35) (1.80) (.77) (.11) (.20)
------ ------ ------ ------ ----- ------
Net asset value, end of period............. $15.15 $15.13 $13.12 $14.09 $12.10 $11.65
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... .13% 27.02% 5.97% 23.04% 4.91% (.26)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $8,287 $8,336 $6,033 $5,915 $4,247 $3,280
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 2.27%(d)(e) 2.30%(d) 2.28%(d) 2.10% 2.10% 2.10%(e)
Expenses, before waivers/
reimbursements........................ 2.27%(e) 2.30% 2.43% 2.36% 2.66% 3.02%(e)
Net investment income................... .54%(e) .11% .42% 1.15% 1.62% 1.04%(e)
Portfolio turnover rate.................... 46% 137% 133% 209% 134% 96%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 30.
27
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Conservative Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1998 --------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $11.97 $11.31 $11.14 $10.38 $10.37 $10.79
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (b).................. .20(a) .39(a) .41(a) .51 .48 .31
Net realized and unrealized gain (loss)
on investment transactions.............. .12 1.54 .46 .80 (.02) (.26)
------ ------ ------ ------ ----- ------
Net increase in net asset
value from operations................... .32 1.93 .87 1.31 .46 .05
------ ------ ------ ------ ----- ------
Less: Dividends and Distributions
Dividends from net investment income ...... (.14) (.43) (.45) (.55) (.45) (.29)
Distributions from net realized gains ..... -0- (.84) (.25) -0- -0- (.18)
------ ------ ------ ------ ------ ------
Total dividends and distributions.......... (.14) (1.27) (.70) (.55) (.45) (.47)
------ ------ ------ ------ ------ ------
Net asset value, end of period............. $12.15 $11.97 $11.31 $11.14 $10.38 $10.37
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... 2.71% 17.87% 7.90% 12.69% 4.65% .35%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $13,761 $11,715 $11,860 $14,161 $16,105 $15,595
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 1.41%(d)(e) 1.41%(d) 1.40%(d) 1.40% 1.40% 1.40%
Expenses, before waivers/
reimbursements........................ 1.86%(e) 1.91% 1.90% 1.73% 1.83% 2.03%
Net investment income (b)............... 3.35%(e) 3.33% 3.66% 4.43% 4.66% 3.43%
Portfolio turnover rate.................... 50% 138% 174% 267% 248% 133%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 30.
28
<PAGE>
Alliance Conservative Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1998 --------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $12.19 $11.49 $11.31 $10.51 $10.47 $10.88
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (b).................. .19(a) .32(a) .34(a) .43 .46 .24
Net realized and unrealized gain (loss)
on investment transactions.............. .09 1.55 .46 .82 (.02) (.26)
------ ------ ------ ------ ----- ------
Net increase (decrease) in net asset
value from operations................... .28 1.87 .80 1.25 .44 (.02)
------ ------ ------ ------ ----- ------
Less: Dividends and Distributions
Dividends from net investment income ...... (.10) (.33) (.37) (.45) (.40) (.21)
Distributions from net realized gains ..... -0- (.84) (.25) -0- -0- (.18)
------ ------ ------ ------ ----- ------
Total dividends and distributions.......... (.10) (1.17) (.62) (.45) (.40) (.39)
------ ------ ------ ------ ----- ------
Net asset value, end of period............. $12.37 $12.19 $11.49 $11.31 $10.51 $10.47
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... 2.33% 17.04% 7.10% 11.95% 3.91% (.31)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $27,478 $28,432 $28,037 $31,979 $30,542 $29,697
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 2.11%(d)(e) 2.11%(d) 2.10%(d) 2.10% 2.10% 2.11%
Expenses, before waivers/
reimbursements........................ 2.59%(e) 2.61% 2.61% 2.44% 2.52% 2.73%
Net investment income (b)............... 2.65%(e) 2.63% 2.96% 3.72% 3.96% 2.72%
Portfolio turnover rate.................... 50% 138% 174% 267% 248% 133%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 30.
29
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Conservative Investors Fund
================================================================================
Selected Data For a Share of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
Six Months
Ended August 2,
October 31, Year Ended April 30, (1993)(f)
1998 -------------------------------------------------- to April 30,
(unaudited) 1998 1997 1996 1995 1994
-------------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $12.19 $11.49 $11.31 $10.52 $10.47 $11.12
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net investment income (b).................. .19(a) .32(a) .34(a) .41 .46 .18
Net realized and unrealized gain (loss)
on investment transactions.............. .10 1.55 .46 .83 (.01) (.50)
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset
value from operations................... .29 1.87 .80 1.24 .45 (.32)
------ ------ ------ ------ ------ ------
Less: Dividends and Distributions
Dividends from net investment income ...... (.10) (.33) (.37) (.45) (.40) (.15)
Distributions from net realized gains ..... -0- (.84) (.25) -0- -0- (.18)
------ ------ ------ ------ ------ ------
Total dividends and distributions.......... (.10) (1.17) (.62) (.45) (.40) (.33)
------ ------ ------ ------ ------ ------
Net asset value, end of period............. $12.38 $12.19 $11.49 $11.31 $10.52 $10.47
====== ====== ====== ====== ====== ======
Total Return
Total investment return based on net
asset value (c)......................... 2.42% 17.04% 7.10% 11.84% 4.01% (2.98)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted).. $4,852 $4,162 $4,150 $5,326 $4,419 $4,375
Ratios to average net assets of:
Expenses, net of waivers/
reimbursements........................ 2.11%(d)(e) 2.11%(d) 2.10%(d) 2.10% 2.10% 2.10%(e)
Expenses, before waivers/
reimbursements........................ 2.58%(e) 2.61% 2.60% 2.45% 2.52% 2.69%(e)
Net investment income (b)............... 2.65%(e) 2.63% 2.96% 3.71% 3.97% 2.94%(e)
Portfolio turnover rate.................... 50% 138% 174% 267% 248% 133%
</TABLE>
- --------------------------------------------------------------------------------
(a) Based on average shares outstanding.
(b) Net of fees waived and expenses reimbursed by Adviser.
(c) 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.
(d) Ratios reflect expenses grossed up for expense offset arrangement with the
transfer agent.
<TABLE>
<CAPTION>
Alliance Growth Investors Alliance Conservative Investors
------------------------------------- ------------------------------------
Year Ended April 30, Year Ended April 30,
Six Months Ended ------------------- Six Months Ended -------------------
October 31, 1998 1998 1997 October 31, 1998 1998 1997
---------------- -------- -------- ---------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Class A............. 1.53% 1.59% 1.55% 1.40% 1.40% 1.40%
Class B............. 2.26% 2.29% 2.26% 2.10% 2.10% 2.10%
Class C............. 2.26% 2.29% 2.26% 2.10% 2.10% 2.10%
</TABLE>
(e) Annualized.
(f) Commencement of distribution.
30
<PAGE>
Alliance Growth Investors and
Conservative Investors Funds
================================================================================
BOARD OF TRUSTEES
John D. Carifa, Chairman and President
Ruth Block (1)
Richard W. Couper (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
Nicholas D. P. Carn, 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 02110-02624
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, New York 10036-2798
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
The financial information included herein is taken from the records of the
Fund without audit by independent accountants who do not express an
opinion thereon.
31
<PAGE>
ALLIANCE GROWTH INVESTORS FUND
ALLIANCE CONSERVATIVE INVESTORS FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital [LOGO](R)
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.
GICISR
