--------------------------------------------------------------------------------
LARGE AND MID CAP GROWTH
--------------------------------------------------------------------------------
Alliance Growth
Fund
Annual Report
October 31, 2000
[GRAPHIC OMITTED]
Alliance Capital [LOGO](R)
The Investment Professional's Choice
<PAGE>
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
<PAGE>
----------------------
Letter to Shareholders
----------------------
LETTER TO SHAREHOLDERS
December 27, 2000
Dear Shareholder:
This report discusses the investment results and market activity for Alliance
Growth Fund (the "Fund") for the annual reporting period ended October 31, 2000.
Investment Objective and Policies
This open-end fund seeks long-term growth of capital. The Fund invests
principally in a diversified portfolio of equity securities of companies with a
favorable outlook for earnings and whose rate of growth is expected to exceed
that of the United States economy over time.
Investment Results
The following table provides the Fund's performance over the six- and 12-month
periods ended October 31, 2000. For comparison, we have shown returns for the
unmanaged Standard & Poor's (S&P) 500 Stock Index and the Russell 1000 Stock
Index.
INVESTMENT RESULTS*
Periods Ended October 31, 2000
---------------------------------
Total Returns
---------------------------------
6 Months 12 Months
--------------------------------------------------------------------------------
Alliance Growth
Fund
Class A -5.65% 5.96%
--------------------------------------------------------------------------------
Class B -6.00% 5.18%
--------------------------------------------------------------------------------
Class C -5.99% 5.20%
--------------------------------------------------------------------------------
S&P 500
Stock Index-1.03%6.08%
--------------------------------------------------------------------------------
Russell 1000
Stock Index -0.60% 9.06%
--------------------------------------------------------------------------------
* The Fund's investment results are total returns for the periods shown and
are based on the net asset value (NAV) of each class of shares as of
October 31, 2000. All fees and expenses related to the operation of the
Fund have been deducted, but no adjustment has been made for sales charges
that may apply when shares are purchased or redeemed. Returns for Advisor
Class shares will vary due to different expenses associated with that
class. Returns for the Fund include the reinvestment of any distributions
paid during the period. Past performance is no guarantee of future
results.
The unmanaged S&P 500 Stock Index is comprised of 500 U.S. companies and
is a common measure of the performance of the overall U.S. stock market.
The unmanaged Russell 1000 Stock Index is comprised of 1000 of the largest
capitalized companies that are traded in the United States. The indices
reflect no fees or expenses. An investor cannot invest directly in an
index, and its results are not indicative of any specific investment,
including Alliance Growth Fund.
Additional investment results appear on pages 4-7.
The Fund's value dropped by several percent more than the S&P 500 Stock Index
during the six-month period ended October 31, 2000. This underperformance was
clearly attributable to the Fund's large holdings in telecommunications and, to
a lesserdegree, technology stocks. Financial services, the other area of primary
emphasis, only partially offset the underperformance with above average per-
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
formance. Telecommunications and technology stocks provided much better
results earlier in the year. As a result, the trailing 12-month performance was
better than the six-month result and approximately equal to that of the S&P 500
Stock Index.
Performance Review
The October quarter was a trying one for the Fund and the stock market. As the
quarter progressed, there were increasing signs that the economy was slowing
down. Earlier in the year, this might have been treated as good news because it
would have eased concern that the Federal Reserve (the "Fed") would continue to
raise interest rates. Now investor focus has switched to concern that earnings
in the coming months may be disappointingly weak. The Fed is indeed unlikely to
raise interest rates in this environment. However, with oil prices and
employment costs rising, it seems unlikely that they will ease policy in the
near future. After moving up near the highs for the year in August, the market
fell heavily in September and October, reaching a low point for the year in
mid-October.
The decline in telecommunications stocks, which had begun in June when the
Justice Department blocked the acquisition of Sprint by Worldcom, intensified in
the recent quarter as both of these companies reported disappointing revenue and
earnings gains. In October, technology stocks moved broadly lower as investors
began to be concerned that "boom" conditions might be coming to an end. We have
reduced exposure to telephone stocks, but not without first suffering adverse
effects on the Fund's performance. We also are less heavily exposed to
technology stocks. On the other hand, financial stocks, the Fund's other area of
strong emphasis, performed well during the quarter.
Investment Outlook
It now seems apparent that the pace of economic growth is slowing. We are
hopeful that the economy will achieve a "soft landing"--slowing but not lapsing
into recession. This may prove to be overly optimistic, but it seems to us that
many stocks, particularly in the technology and telecommunications universe, are
already discounting a worse outcome than we think is likely to occur. We think
it is still too early to become much more aggressive, particularly with respect
to those technology stocks at very high multiples of earnings. Nevertheless, at
times like this in the past, it has always been wise to look past the short-term
difficulties and focus on building positions in stocks that will participate
strongly when the market recovers. We do not think this time will be any
different.
Portfolio Manager Update
After a long and successful career managing several institutional and mutual
funds at Alliance Capital, Tyler Smith has decided to reduce his workload and
transition his mutual fund to new managers.
Rather than seek new management outside the firm, Alliance decided to transition
the Fund to two established multi-cap growth managers. As a result, the Alliance
Growth Fund will be managed by Alan Levi and Jane Mack
--------------------------------------------------------------------------------
2 o ALLIANCE GROWTH FUND
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
Gould who have over 66 years of combined investment experience. They have both
been managing the Alliance multi-cap growth institutional product since 1971 and
are therefore very familiar with the growth style of investing.
Tyler will continue to manage several institutional products. Since Tyler will
remain an active portfolio manager, Alan and Jane will be able to benefit from
his investing insight and wisdom. Alan and Jane will focus their efforts on
managing the Fund to its growth style.
Thank you for your continued interest in Alliance Growth Fund. We look forward
to reporting to you on the Fund's market activity and investment performance in
the ensuing periods.
[PHOTO OMMITTED] John D.
Carifa
[PHOTO OMMITTED] Tyler J.
Smith
Portfolio Manager, Tyler J. Smith, has over 37 years of investment experience.
Sincerely,
/s/ John D Carifa
John D. Carifa
Chairman and President
/s/ Tyler J. Smith
Tyler J. Smith
Vice President
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 3
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH FUND
GROWTH OF A $10,000 INVESTMENT
10/31/90 TO 10/31/00
[THE FOLLOWING TABLE WAS DEPICTED AS A MOUNTAIN CHART IN THE WRITTEN MATERIAL]
Alliance Growth Fund Class A: $77,968
Russell 1000 Stock Index: $60,944
S&P500 Stock Index: $58,993
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth Fund Class A shares (from 10/31/90 to 10/31/00) as compared to
the performance of appropriate broad-based indices. The chart assumes the
reinvestment of dividends and capital gains. Performance for Class B, Class C
and Advisor Class shares will vary from the results shown above due to
differences in expenses charged to these classes. Past performance is not
indicative of future results, and is not representative of future gain or loss
in capital value or dividend income.
The unmanaged Standard &Poor's 500 Stock Index is comprised of 500 U.S. stocks
and is a common measure of the performance of the overall U.S. stock market. The
unmanaged Russell 1000Stock Index is comprised of 1000 of the largest
capitalized companies that are traded in the United States.
When comparing Alliance Growth Fund to the indices shown above, you should note
that no charges or expenses are reflected in the performance of the indices. An
investor cannot invest directly in an index, and its results are not indicative
of any specific investment, including Alliance Growth Fund.
--------------------------------------------------------------------------------
4 o ALLIANCE GROWTH FUND
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH FUND
HISTORY OF RETURNS
YEARLY PERIODS ENDED 10/31
[BAR CHART OMMITTED]
Alliance Growth Fund--Yearly Periods Ended 10/31
--------------------------------------------------------------------------------
Alliance Growth Fund Russell 1000 Stock Index
--------------------------------------------------------------------------------
10/31/91 74.23% 36.59%
10/31/92 11.29% 10.76%
10/31/93 38.20% 15.76%
10/31/94 2.73% 3.10%
10/31/95 20.18% 27.00%
10/31/96 21.65% 22.92%
10/31/97 29.54% 31.84%
10/31/98 14.56% 19.71%
10/31/99 28.69% 25.58%
10/31/00 5.96% 9.06%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on the Fund's
net asset value (NAV). All fees and expenses related to the operation of the
Fund have been deducted, but no adjustment has been made for sales charges that
may apply when shares are purchased or redeemed. Returns for the Fund include
the reinvestment of any distributions paid during the period.
The unmanaged Russell 1000 Stock Index is comprised of 1000 of the largest
capitalized companies that are traded in the United States. An investor cannot
invest directly in an index, and its results are not indicative of any specific
investment, including Alliance Growth Fund.
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 5
<PAGE>
-----------------
PORTFOLIO SUMMARY
-----------------
October 31, 2000
INCEPTION DATES
Class A Shares
9/4/90
Class B Shares
10/23/87
Class C Shares
8/2/93
PORTFOLIO STATISTICS
Net Assets ($mil): $7,697
Median Market Capitalization ($mil):$33,073
SECTOR BREAKDOWN
o 36.98% Technology
o 25.05% Credit Sensitive
o 8.88% Business Services
o 8.58% Consumer Non-Cyclicals
o 3.88% Consumer Cyclicals [PIE CHART OMITTED]
o 2.29% Energy
o 2.29% Utilities
o 2.20% Diversified
o 2.09% Capital Goods
o 0.25% Communication Equipment
o 7.51% Short-Term
COUNTRY BREAKDOWN
o 78.57% United States
o 11.69% United Kingdom
o 1.15% Australia
o 0.80% Luxembourg [PIE CHART OMITTED]
o 0.24% Canada
o 0.04% Bermuda
o 7.51% Short-Term
All data as of October 31, 2000. The Fund's sector and country breakdowns are
expressed as a percentage of total investments and may vary over time.
--------------------------------------------------------------------------------
6 o ALLIANCE GROWTH FUND
<PAGE>
------------------
INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS AS OF OCTOBER 31, 2000
Class A Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 5.96% 1.45%
5 Years 19.74% 18.71%
10 Years 23.33% 22.80%
Class B Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 5.18% 1.62%
5 Years 18.90% 18.90%
10 Years 16.82% 16.82%
Class C Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 5.20% 4.31%
5 Years 18.91% 18.91%
Since Inception*17.02% 17.02%
SEC AVERAGE ANNUAL TOTAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (SEPTEMBER 30, 2000)
Class A Class B Class C
Shares Shares Shares
--------------------------------------------------------------------------------
1 Year 9.49% 9.71% 12.59%
5 Years 18.27% 18.46% 18.46%
10 Years 22.20% 17.04% n/a
Since Inception* 20.86% 20.15% 17.40%
The Fund's investment results represent average annual total returns. The
returns reflect reinvestment of dividends and/or capital gains distributions in
additional shares without and with the effect of the 4.25% maximum front-end
sales charge for Class A or applicable contingent deferred sales charge for
Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4); and for Class C shares (1%
year 1). Returns for Class A shares do not reflect the imposition of the 1 year
1% contingent deferred sales charge for accounts over $1,000,000. Total return
for Advisor Class shares will differ due to different expenses associated with
that class.
The Fund can invest in foreign securities, which may magnify these fluctuations
due to changes in foreign exchange rates and the possibility of substantial
volatility due to political and economic uncertainties in foreign countries.
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.
n/a: not applicable.
* Inception date: 9/4/90, Class A; 10/23/87, Class B; 8/2/93, Class C.
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 7
<PAGE>
--------------------
TEN LARGEST HOLDINGS
--------------------
TEN LARGEST HOLDINGS
October 31, 2000
Percent of
Company Value(a) Net Assets
--------------------------------------------------------------------------------
Vodafone AirTouch Group Plc (ADR) $ 723,663,180 9.4%
--------------------------------------------------------------------------------
American International Group, Inc. 359,338,952 4.7
--------------------------------------------------------------------------------
Associates First Capital Corp. Cl.A 295,912,238 3.8
--------------------------------------------------------------------------------
AT&T Corp.-Liberty Media Group Cl.A 294,656,256 3.8
--------------------------------------------------------------------------------
MBNA Corp. 249,244,382 3.2
--------------------------------------------------------------------------------
Qwest Communications International, Inc. 246,805,880 3.2
--------------------------------------------------------------------------------
Sanmina Corp. 227,961,988 3.0
--------------------------------------------------------------------------------
Nextel Communications, Inc. Cl.A
(common stocks and bond) 226,620,203 2.9
--------------------------------------------------------------------------------
SCI Systems, Inc. 218,874,270 2.9
--------------------------------------------------------------------------------
Citigroup, Inc. 190,056,239 2.5
--------------------------------------------------------------------------------
$3,033,133,588 39.4%
MAJOR PORTFOLIO CHANGES
Six Months Ended October 31, 2000
-------------------------------
Shares(b)
-------------------------------
Purchases Bought Holdings 10/31/00
--------------------------------------------------------------------------------
AT&T Corp.-Liberty Media Group Cl.A 9,755,346 16,369,792
--------------------------------------------------------------------------------
AT&T Wireless Group 1,302,500 7,336,300
--------------------------------------------------------------------------------
General Motors Corp. Class H 2,906,000 3,141,000
--------------------------------------------------------------------------------
Kroger Co. 1,751,000 4,481,000
--------------------------------------------------------------------------------
Micron Technology, Inc. 1,990,000 2,500,000
--------------------------------------------------------------------------------
Millicom International Cellular, SA 974,100 2,026,500
--------------------------------------------------------------------------------
NTL, Inc. 755,700 3,301,856
--------------------------------------------------------------------------------
Nextel Communications, Inc.Cl.A 3,821,816 5,938,616
--------------------------------------------------------------------------------
UnitedGlobalCom, Inc. Cl.A 1,689,300 1,728,300
--------------------------------------------------------------------------------
Viacom, Inc. Cl.B 1,508,544 1,508,544
--------------------------------------------------------------------------------
Sales Sold Holdings 10/31/00
--------------------------------------------------------------------------------
Bank of America Corp. 1,716,100 2,839,100
--------------------------------------------------------------------------------
BellSouth Corp. 850,000 -0-
--------------------------------------------------------------------------------
Boston Scientific Corp. 2,176,000 3,077,125
--------------------------------------------------------------------------------
Citigroup, Inc. 410,068 3,639,630
--------------------------------------------------------------------------------
Honeywell International, Inc. 1,072,500 810,812
--------------------------------------------------------------------------------
Intel Corp. 100,000 1,350,000
--------------------------------------------------------------------------------
McKesson HBOC, Inc. 4,154,000 -0-
--------------------------------------------------------------------------------
MediaOne Group, Inc. 1,832,000 -0-
--------------------------------------------------------------------------------
MGM Grand, Inc. 1,510,000 -0-
--------------------------------------------------------------------------------
Providian Financial Corp. 746,500 637,500
--------------------------------------------------------------------------------
(a) Adjusted for market value of call options written.
(b) Adjusted for spin-offs and stock splits.
--------------------------------------------------------------------------------
8 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
October 31, 2000
Company Shares Value
--------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-93.6%
Technology-37.5%
Electronics-10.4%
Altera Corp.(a) .............................. 139,036 $ 5,691,786
Applied Materials, Inc.(a)(b) ................ 775,000 41,171,875
Cisco Systems, Inc.(a)(b) .................... 150,000 8,081,250
Flextronics International, Ltd.(b) ........... 2,102,000 79,876,000
Intel Corp.(b) ............................... 1,350,000 60,750,000
Micron Technology, Inc.(a)(b) ................ 2,500,000 86,875,000
Sanmina Corp.(a) ............................. 1,994,200 227,961,988
SCI Systems, Inc.(a)(b) ...................... 5,126,400 220,435,200
Solectron Corp.(a)(b) ........................ 1,181,400 51,981,600
XO Communications, Inc. Cl.A ................. 145,000 4,891,484
pfd. Series ............................... 65,000 10,115,625
--------------
797,831,808
--------------
Office Equipment-3.2%
Ceridian Corp.(a) ............................ 5,332,100 133,302,500
Compaq Computer Corp. ........................ 150,000 4,561,500
International Business Machines Corp.(b) ..... 1,122,800 110,595,800
--------------
248,459,800
--------------
Office Equipment & Services-0.7%
Computer Associates International, Inc. ...... 1,635,933 52,145,364
First Data Corp.(b) .......................... 100,000 5,012,500
--------------
57,157,864
--------------
Telecommunications-23.2%
AT&T Wireless Group(a)(b) .................... 7,336,300 182,948,981
Colt Telecom Group Plc
(ADR) (United Kingdom)(a) ................. 97,300 12,709,813
Energis Plc (United Kingdom)(a) .............. 359,000 3,070,651
FLAG Telecom Holdings, Ltd. (Bermuda)(a) ..... 250,000 2,906,250
Global Telesystems Group, Inc.(a) ............ 5,098,972 13,703,487
Intermedia Communications, Inc.(a) ........... 12,238 270,766
pfd. Series D ............................. 414,600 11,764,275
Millicom International Cellular, SA
(Luxembourg)(a) ........................... 2,026,500 62,314,875
Nextel Communications, Inc. Cl.A(a)(b) ....... 5,938,616 228,265,553
NTL, Inc. .................................... 3,301,856 145,075,298
Qwest Communications International, Inc.(a)(b) 5,262,298 255,879,240
Vodafone AirTouch Group Plc
(ADR) (United Kingdom) .................... 173,932,540 723,663,180
VoiceStream Wireless Corp.(a) ................ 365,100 48,010,650
Western Wireless Corp. Cl.A(b) ............... 255,800 12,150,500
WorldCom, Inc.(a)(b) ......................... 3,373,817 80,128,154
--------------
1,782,861,673
--------------
2,886,311,145
--------------
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 9
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares Value
--------------------------------------------------------------------------------
Credit Sensitive-25.4%
Banks-6.3%
Bank of America Corp. ........................ 2,839,100 $ 136,454,244
Bank One Corp.(b) ............................ 650,000 23,725,000
Chase Manhattan Corp. ........................ 3,027,306 137,742,423
Citigroup, Inc.(b) ........................... 3,639,630 191,535,529
--------------
489,457,196
--------------
Financial Services-11.1%
Associates First Capital Corp. Cl.A .......... 7,970,700 295,912,238
Household International, Inc.(b) ............. 1,180,500 59,393,906
John Hancock Financial Services, Inc.(a)(b) . 1,598,100 50,539,913
MBNA Corp.(b) ................................ 6,639,437 249,393,852
Providian Financial Corp.(b) ................. 637,500 66,300,000
The CIT Group, Inc. Cl.A ..................... 7,481,378 130,456,529
--------------
851,996,438
--------------
Insurance-7.0%
AFLAC, Inc.(b) ............................... 778,100 56,849,931
American International Group, Inc. ........... 3,666,724 359,338,952
Metlife, Inc.(a)(b) .......................... 1,300,000 35,912,500
PMI Group, Inc.(b) ........................... 1,211,550 89,503,256
--------------
541,604,639
--------------
Real Estate-1.0%
JP Realty, Inc. .............................. 755,300 12,084,800
Koger Equity, Inc. ........................... 1,762,571 28,090,975
Macerich Co. ................................. 1,016,400 19,946,850
Summit Properties, Inc. ...................... 526,700 12,640,800
--------------
72,763,425
--------------
1,955,821,698
--------------
Business Services-9.0%
Printing, Publishing & Broadcasting-9.0%
Adelphia Communications Corp.(a) ............. 1,867,700 61,984,294
AT&T Corp.-Liberty Media Group Cl.A(a) ....... 16,369,792 294,656,256
Cablevision Systems Corp. Cl.A(a) ............ 1,190,000 88,655,000
Comcast Corp. Cl.A(a) ........................ 1,713,000 69,804,750
News Corp., Ltd. (ADR) (Australia)(b) ........ 2,078,700 89,384,100
Viacom, Inc. Cl.B(a) ......................... 1,508,544 85,798,440
--------------
690,282,840
--------------
Consumer Noncyclicals-8.8%
Drugs-3.6%
Bristol-Myers Squibb Co. ..................... 1,896,000 115,537,500
Merck & Co., Inc. ............................ 1,052,400 94,650,225
Pharmacia Corp. .............................. 96,600 5,313,000
Schering-Plough Corp. ........................ 1,173,000 60,629,437
SICOR, Inc.(c) ............................... 68,500 2,640,538
--------------
278,770,700
--------------
--------------------------------------------------------------------------------
10 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares Value
--------------------------------------------------------------------------------
Hospital Supplies & Services-2.8%
Boston Scientific Corp.(a)(b) ................ 3,077,125 $ 49,041,680
Guidant Corp.(a)(b) .......................... 300,000 15,881,250
IMS Health, Inc.(b) .......................... 5,567,000 131,520,375
Medtronic, Inc. .............................. 290,600 15,783,212
SYNAVANT, Inc.(a) ............................ 54,385 248,132
--------------
212,474,649
--------------
Media & Cable-0.7%
UnitedGlobalCom, Inc. Cl.A(a) ................ 1,728,300 54,981,544
--------------
Retail-Food-1.3%
Kroger Co.(a)(b) ............................. 4,481,000 101,102,563
--------------
Soaps and Toiletries-0.4%
Colgate-Palmolive Co.(b) ..................... 550,000 32,318,000
--------------
679,647,456
--------------
Consumer Cyclicals-3.9%
Airlines-0.3%
Continental Airlines, Inc. Cl.B(a) ........... 400,200 21,010,500
--------------
Leisure Related-1.2%
Carnival Corp. Cl.A(b) ....................... 355,000 8,808,438
Cendant Corp.(b) ............................. 7,021,004 84,252,048
--------------
93,060,486
--------------
Retail-General-2.4%
Home Depot, Inc. ............................. 1,707,500 73,422,500
RadioShack Corp.(b) .......................... 1,150,000 68,568,750
The Limited, Inc.(b) ......................... 1,776,450 44,855,362
--------------
186,846,612
--------------
300,917,598
--------------
Utility-2.3%
Telephone-2.3%
AT&T Corp.(b) ................................ 2,441,965 56,623,063
Cable & Wireless Plc (United Kingdom) ........ 2,725,000 38,549,907
Sprint Corp.(Fon Group)(b) ................... 3,304,600 84,267,300
--------------
179,440,270
--------------
Energy-2.3%
Oil-International-1.9%
BP Amoco Plc (ADR) (United Kingdom) .......... 15,064,408 127,758,203
Gulf Canada Resources, Ltd. (Canada) ......... 4,382,800 18,626,900
--------------
146,385,103
--------------
Oil Supplies & Construction-0.4%
Santa Fe International Corp.(b) .............. 850,000 31,025,000
--------------
177,410,103
--------------
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 11
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Shares or
Principal
Amount
Company (000) Value
--------------------------------------------------------------------------------
Diversified-2.3%
Miscellaneous-2.3%
Honeywell International, Inc.(b) ........... 810,812 $ 43,631,821
Tyco International Ltd.(b) ................. 2,280,224 129,260,198
--------------
172,892,019
--------------
Capital Goods-2.1%
Aerospace-2.1%
General Motors Corp. Cl. H(a)(b) ........... 3,141,000 101,768,400
Loral Space & Communications, Ltd.(a)(b) ... 8,978,000 51,062,375
pfd. Series(c) .......................... 500,000 9,446,500
--------------
162,277,275
--------------
Total Common & Preferred Stocks
(cost $5,858,014,720) ................... 7,205,000,404
--------------
CONVERTIBLE BONDS-0.2%
Communication Equipment-0.2%
Global Telesystems Group, Inc.
5.75%, 7/01/10 .......................... $ 38,525 8,523,656
Nextel Communications, Inc. Cl.A
4.75%, 7/01/07(c) ....................... 3,500 5,827,500
NTL, Inc.
7.00%, 12/15/08 ......................... 3,755 4,698,444
--------------
Total Convertible Bonds
(cost $39,831,699) ...................... 19,049,600
--------------
SHORT-TERM INVESTMENTS-7.6%
U.S. Government Agency-7.6%
Federal Home Loan Bank
6.45%, 11/01/00 ......................... 125,755 125,755,000
Federal Home Loan Mortgage Corp.
6.40%, 11/01/00 ......................... 195,000 195,000,000
Student Loan Marketing Assn
6.45%, 11/01/00 ......................... 187,006 187,006,000
U.S. Treasury Bill
6.365%, 12/21/00 ........................ 75,000 74,336,979
--------------
Total Short-Term Investments
(amortized cost $582,097,979) ........... 582,097,979
--------------
Total Investments-101.4%
(cost $6,479,944,398) ................... 7,806,147,983
--------------
--------------------------------------------------------------------------------
12 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Contracts(d) Value
--------------------------------------------------------------------------------
Outstanding Call Options Written-(0.7%)(a)
AFLAC, Inc.
expiring December 2000
@ $66.19 ............................ (1,000) $ (879,180)
@ $66.50 ............................ (2,000) (1,706,320)
Applied Materials, Inc.
expiring November 2000
@ $75.43 ............................ (1,000) (29,410)
@ $80.00 ............................ (2,500) (15,000)
expiring December 2000
@ $65.73 ............................ (1,000) (187,270)
AT&T Corp.
expiring November 2000
@ $25.88 ............................ (1,500) (51,000)
@ $29.94 ............................ (1,000) (6,250)
@ $30.32 ............................ (1,000) (9,000)
@ $30.88 ............................ (500) (7,500)
@ $32.15 ............................ (1,000) (9,000)
expiring December 2000
@ $23.06 ............................ (2,500) (640,000)
AT&T Wireless Group
expiring November 2000
@ $24.31 ............................ (2,000) (351,140)
@ $24.50 ............................ (2,000) (318,780)
@ $24.50 ............................ (1,500) (229,500)
Bank One Corp.
expiring November 2000
@ $35.38 ............................ (1,000) (157,830)
@ $37.00 ............................ (500) (24,665)
expiring December 2000
@ $33.75 ............................ (1,000) (431,620)
@ $36.75 ............................ (500) (79,860)
@ $37.00 ............................ (1,000) (147,720)
Boston Scientific Corp.
expiring November 2000
@ $17.75 ............................ (1,000) (3,000)
@ $18.25 ............................ (2,000) (36,240)
@ $18.25 ............................ (1,500) (8,805)
Carnival Corp.
expiring December 2000
@ $24.38 ............................ (2,000) (340,100)
Cendant Corp.
expiring November 2000
@ $10.75 ............................ (1,000) (204,240)
@ $12.13 ............................ (1,500) (98,385)
@ $12.56 ............................ (2,000) (51,800)
@ $12.75 ............................ (2,000) (89,900)
@ $12.75 ............................ (1,500) (5,775)
@ $12.88 ............................ (1,000) (12,500)
@ $13.00 ............................ (2,000) (92,580)
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 13
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
@ $13.00 ................................ (2,000) $ (64,880)
@ $13.00 ................................ (2,000) (31,260)
@ $13.00 ................................ (1,000) (29,940)
@ $13.00 ................................ (1,000) (6,250)
@ $13.06 ................................ (1,000) (4,770)
@ $13.06 ................................ (1,000) (2,040)
expiring December 2000
@ $10.38 ................................ (2,500) (514,000)
@ $10.75 ................................ (1,500) (265,845)
@ $10.75 ................................ (1,500) (256,500)
@ $10.88 ................................ (1,300) (219,700)
Cisco Systems, Inc.
expiring December 2000
@ $46.25 ................................ (1,500) (1,677,000)
Citigroup, Inc.
expiring December 2000
@ $48.76 ................................ (1,000) (556,720)
@ $49.75 ................................ (1,000) (518,930)
@ $50.94 ................................ (1,000) (403,640)
Colgate-Palmolive Co.
expiring November 2000
@ $44.88 ................................ (1,500) (2,118,600)
@ $47.30 ................................ (3,000) (3,510,000)
First Data Corp.
expiring November 2000
@ $46.75 ................................ (1,000) (348,250)
Flextronics International, Ltd.
expiring November 2000
@ $42.38 ................................ (2,000) (369,580)
General Motors Corp. Class H
expiring November 2000
@ $33.13 ................................ (1,000) (81,820)
@ $34.25 ................................ (1,000) (100,790)
@ $34.75 ................................ (1,000) (45,620)
@ $35.00 ................................ (1,000) (110,570)
@ $35.25 ................................ (1,000) (87,120)
@ $35.50 ................................ (1,500) (100,680)
@ $35.68 ................................ (1,000) (117,790)
expiring December 2000
@ $35.00 ................................ (1,000) (95,950)
@ $35.50 ................................ (1,000) (122,280)
@ $36.52 ................................ (1,500) (253,485)
@ $37.00 ................................ (1,000) (106,850)
@ $37.10 ................................ (1,000) (139,170)
@ $37.20 ................................ (1,000) (153,550)
Guidant Corp.
expiring December 2000
@ $67.25 ................................ (1,500) (33,975)
--------------------------------------------------------------------------------
14 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
Honeywell International, Inc.
expiring December 2000
@ $51.75 .................................. (1,500) $ (658,380)
@ $52.25 .................................. (1,000) (373,990)
Household International, Inc.
expiring November 2000
@ $50.13 .................................. (1,000) (241,000)
IMS Health, Inc.
expiring December 2000
@ $20.00 .................................. (2,000) (770,640)
@ $20.73 .................................. (2,000) (665,880)
@ $20.75 .................................. (2,000) (663,280)
@ $22.00 .................................. (2,000) (507,480)
Intel Corp.
expiring November 2000
@ $56.31 .................................. (1,000) (36,850)
@ $60.19 .................................. (1,000) (4,480)
@ $60.63 .................................. (1,000) (4,370)
@ $62.00 .................................. (1,000) 0
@ $66.50 .................................. (1,000) (10)
expiring December 2000
@ $43.60 .................................. (1,000) (473,000)
@ $43.88 .................................. (2,500) (995,000)
@ $44.50 .................................. (1,500) (465,900)
International Business Machines Corp.
expiring November 2000
@ $123.50 ................................. (1,500) (13,665)
@ $133.15 ................................. (1,500) (2,220)
John Hancock Financial Services, Inc.
expiring November 2000
@ $24.88 .................................. (1,000) (678,160)
@ $25.00 .................................. (1,500) (1,000,560)
@ $27.24 .................................. (2,000) (930,000)
@ $27.35 .................................. (1,000) (423,310)
Kroger Co.
expiring November 2000
@ $21.88 .................................. (2,000) (138,000)
@ $22.01 .................................. (2,500) (358,300)
@ $22.25 .................................. (2,000) (172,260)
@ $22.25 .................................. (1,000) (67,940)
@ $22.25 .................................. (1,000) (53,450)
@ $22.63 .................................. (2,000) (226,960)
@ $22.63 .................................. (1,000) (72,380)
@ $22.63 .................................. (1,000) (72,380)
@ $23.25 .................................. (2,000) (90,020)
@ $23.50 .................................. (2,000) (114,360)
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 15
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
expiring December 2000
@ $21.38 .................................. (2,000) $ (349,900)
@ $22.06 .................................. (2,000) (279,140)
@ $22.13 .................................. (2,000) (233,120)
@ $22.25 .................................. (1,000) (131,410)
Loral Space & Communications, Ltd.
expiring December 2000
@ $5.81 ................................... (2,000) (154,000)
MBNA Corp.
expiring December 2000
@ $39.13 .................................. (1,000) (149,470)
Metlife, Inc.
expiring November 2000
@ $23.63 .................................. (1,500) (601,290)
@ $24.38 .................................. (1,500) (488,865)
@ $24.88 .................................. (1,000) (283,940)
expiring December 2000
@ $26.28 .................................. (2,000) (537,840)
@ $27.13 .................................. (500) (100,175)
Micron Technology, Inc.
expiring November 2000
@ $51.00 .................................. (2,000) (90,000)
@ $58.63 .................................. (1,000) (4,310)
@ $64.67 .................................. (1,000) (15,000)
@ $65.94 .................................. (1,000) (530)
@ $70.00 .................................. (1,000) (12,530)
@ $87.75 .................................. (1,000) (9,000)
expiring December 2000
@ $35.13 .................................. (1,000) (416,010)
@ $42.25 .................................. (1,000) (199,640)
@ $45.88 .................................. (2,500) (229,125)
News Corp., Ltd. (ADR) (Australia)
expiring November 2000
@ $51.60 .................................. (1,000) (23,180)
@ $52.22 .................................. (1,000) 0
@ $54.13 .................................. (2,000) (36,960)
@ $56.64 .................................. (2,000) (12,000)
Nextel Communications, Inc. Cl.A
expiring November 2000
@ $46.00 .................................. (1,000) (160,090)
@ $47.44 .................................. (1,000) (54,340)
@ $47.69 .................................. (1,000) 0
@ $50.00 .................................. (2,000) (4,000)
@ $51.75 .................................. (750) (24,840)
@ $51.75 .................................. (250) (8,280)
@ $52.50 .................................. (2,000) (800)
@ $52.50 .................................. (2,000) (420)
@ $52.70 .................................. (2,000) (8,480)
@ $52.85 .................................. (1,000) (590)
@ $53.41 .................................. (2,000) (13,600)
--------------------------------------------------------------------------------
16 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
expiring December 2000
@ $39.13 .................................. (1,000) $ (442,000)
@ $41.88 .................................. (1,000) (317,960)
@ $42.56 .................................. (1,000) (313,530)
@ $43.00 .................................. (1,000) (296,420)
PMI Group, Inc. ..............................
expiring November 2000
@ $68.50 .................................. (600) (372,876)
@ $68.50 .................................. (400) (248,584)
Providian Financial Corp.
expiring November 2000
@ $117.38 ................................. (2,000) (324,280)
expiring December 2000
@ $105.88 ................................. (875) (701,978)
@ $106.00 ................................. (1,500) (1,423,095)
@ $119.00 ................................. (1,000) (346,060)
@ $129.68 ................................. (1,000) (198,000)
Qwest Communications International, Inc.
expiring November 2000
@ $46.38 .................................. (1,000) (410,410)
@ $46.63 .................................. (1,000) (466,020)
@ $48.25 .................................. (800) (227,976)
@ $48.25 .................................. (700) (199,479)
@ $48.38 .................................. (800) (177,840)
@ $50.50 .................................. (1,000) (19,580)
@ $51.38 .................................. (1,000) (77,000)
@ $51.50 .................................. (500) (55,300)
@ $51.75 .................................. (1,500) (74,280)
expiring December 2000
@ $43.50 .................................. (1,000) (676,000)
@ $45.63 .................................. (1,500) (787,635)
@ $45.75 .................................. (1,000) (602,820)
@ $46.88 .................................. (1,000) (436,090)
@ $47.00 .................................. (2,000) (992,220)
@ $48.00 .................................. (1,500) (629,880)
@ $48.13 .................................. (1,000) (321,790)
@ $48.14 .................................. (1,500) (538,185)
@ $48.15 .................................. (1,500) (593,130)
@ $48.50 .................................. (650) (230,815)
@ $49.60 .................................. (1,500) (536,445)
@ $49.63 .................................. (1,500) (532,500)
@ $49.66 .................................. (1,500) (487,965)
RadioShack Corp.
expiring November 2000
@ $63.88 .................................. (1,000) (234,510)
@ $64.50 .................................. (750) (92,100)
Santa Fe International Corp.
expiring December 2000
@ $40.00 .................................. (2,000) (198,600)
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 17
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
SCI Systems, Inc. ........................
expiring November 2000
@ $37.75 .............................. (1,000) $ (652,330)
expiring December 2000
@ $36.13 .............................. (1,000) (908,280)
Solectron Corp. ..........................
expiring November 2000
@ $48.00 .............................. (1,000) (110,060)
@ $48.00 .............................. (1,000) (110,060)
Sprint Corp.(Fon Group)
expiring November 2000
@ $27.13 .............................. (2,000) (179,740)
@ $27.63 .............................. (1,500) (148,500)
@ $29.38 .............................. (1,000) (20,800)
expiring December 2000
@ $24.63 .............................. (1,000) (294,750)
@ $24.88 .............................. (1,000) (278,000)
@ $26.50 .............................. (1,000) (174,630)
@ $26.63 .............................. (1,500) (204,390)
@ $26.65 .............................. (1,000) (232,830)
@ $26.88 .............................. (1,000) (174,670)
@ $28.38 .............................. (1,500) (150,015)
@ $29.13 .............................. (1,500) (130,470)
The Limited, Inc. ........................
expiring November 2000
@ $22.69 .............................. (2,000) (580,000)
@ $23.67 .............................. (1,500) (418,725)
@ $23.67 .............................. (500) (139,575)
expiring December 2000
@ $23.19 .............................. (1,000) (287,540)
@ $24.31 .............................. (1,000) (229,530)
Tyco International Ltd. ..................
expiring November 2000
@ $51.63 .............................. (1,600) (1,013,792)
@ $51.63 .............................. (400) (253,448)
@ $52.88 .............................. (1,000) (553,070)
@ $58.44 .............................. (2,500) (343,925)
Western Wireless Corp. Cl.A
expiring November 2000
@ $51.75 .............................. (170) (11,293)
--------------------------------------------------------------------------------
18 o ALLIANCE GROWTH FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Contracts(d) Value
--------------------------------------------------------------------------------
WorldCom, Inc. ...........................
expiring November 2000
@ $27.63 .............................. (1,500) $ (109,440)
@ $28.89 .............................. (1,000) (63,920)
@ $29.50 .............................. (1,000) (23,500)
@ $30.00 .............................. (1,000) (38,390)
expiring December 2000
@ $23.38 .............................. (1,000) (286,820)
@ $25.88 .............................. (1,000) (111,610)
@ $26.63 .............................. (1,500) (251,385)
@ $28.38 .............................. (1,000) (98,980)
@ $29.88 .............................. (1,000) (15,850)
@ $29.98 .............................. (2,000) (168,040)
----------------
Total Outstanding Call Options Written
(premiums received $92,182,045) ....... (56,930,736)
----------------
Total Investments Net of Outstanding
Call Options Written-100.7%
(cost $6,387,762,353) ................. 7,749,217,247
Other assets less liabilities-(0.7%) ..... (52,452,858)
----------------
Net Assets-100% .......................... $ 7,696,764,389
================
(a) Non-income producing security.
(b) Security on which options are written (shares subject to call have an
aggregate market value of $3,329,060,388).
(c) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
2000, these securities amounted to $17,914,538 or 0.23% of net assets.
(d) One contract relates to 100 shares.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 19
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
October 31, 2000
Assets
Investments in securities, at value (cost $6,479,944,398) .. $ 7,806,147,983
Receivable for investment securities sold .................. 146,902,389
Receivable for shares of beneficial interest sold .......... 38,020,512
Dividends and interest receivable .......................... 3,644,969
----------------
Total assets ............................................... 7,994,715,853
----------------
Liabilities
Outstanding call options written, at value
(premiums received $92,182,045) ......................... 56,930,736
Due to custodian ........................................... 2,453,532
Payable for investment securities purchased ................ 190,060,124
Payable for shares of beneficial interest redeemed ......... 40,330,900
Advisory fee payable ....................................... 4,251,310
Distribution fee payable ................................... 1,357,700
Accrued expenses ........................................... 2,567,162
----------------
Total liabilities .......................................... 297,951,464
----------------
Net Assets ................................................. $ 7,696,764,389
================
Composition Of Net Assets
Shares of beneficial interest, at par ...................... $ 1,843
Additional paid-in capital ................................. 5,369,045,595
Accumulated net investment loss ............................ (23,760)
Accumulated net realized gain on investment transactions ... 966,285,611
Net unrealized appreciation of investments,
options and foreign currency denominated
assets and liabilities .................................. 1,361,455,100
----------------
$ 7,696,764,389
================
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and
redemption price per share
($1,656,688,817 / 31,602,216 shares of beneficial
interest issued and outstanding) ........................ $52.42
Sales charge--4.25% of public offering price ............... 2.33
------
Maximum offering price ..................................... $54.75
------
Class B Shares
Net asset value and offering price per share
($5,042,755,323 / 127,700,578 shares of beneficial
interest issued and outstanding) ........................ $39.49
------
Class C Shares
Net asset value and offering price per share
($959,042,738 / 24,266,846 shares of beneficial
interest issued and outstanding) ........................ $39.52
------
Advisor Class Shares
Net asset value, redemption and offering price per share
($38,277,511 / 719,960 shares of beneficial interest
issued and outstanding) ................................. $53.17
------
See notes to financial statements
--------------------------------------------------------------------------------
20 o ALLIANCE GROWTH FUND
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Year Ended October 31, 2000
Investment Income
Dividends (net of foreign taxes
withheld of $592,272) .................. $ 54,981,230
Interest .................................. 14,675,465 $ 69,656,695
-------------
Expenses
Advisory fee .............................. 55,469,380
Distribution fee - Class A ................ 4,895,675
Distribution fee - Class B ................ 55,257,684
Distribution fee - Class C ................ 10,136,207
Transfer agency ........................... 12,396,414
Custodian ................................. 1,092,155
Printing .................................. 523,119
Registration .............................. 281,350
Audit and legal ........................... 243,410
Trustees' fees ............................ 34,647
Miscellaneous ............................. 282,733
-------------
Total expenses ............................ 140,612,774
-------------
Net investment loss ....................... (70,956,079)
-------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions
Net realized gain on investment
transactions ........................... 895,431,972
Net realized gain on written option
transactions ........................... 192,985,164
Net realized loss on foreign currency
transactions ........................... (258,097)
Net change in unrealized appreciation/
depreciation of:
Investments ............................ (653,737,183)
Written options ........................ 75,402,138
Foreign currency denominated assets
and liabilities ...................... 124,036
-------------
Net gain on investments and foreign
currency transactions .................. 509,948,030
-------------
Net Increase in Net Assets
from Operations ........................ $ 438,991,951
=============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH FUND o 21
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Year Ended Year Ended
October 31, October 31,
2000 1999
----------- -----------
Increase (Decrease) in Net Assets
from Operations
Net investment loss ...................... $ (70,956,079) $ (62,346,346)
Net realized gain on investments, options
and foreign currency transactions ..... 1,088,159,039 1,277,437,169
Net change in unrealized
appreciation/depreciation of
investments, options, and
foreign currency denominated
assets and liabilities ................ (578,211,009) 496,585,304
--------------- ---------------
Net increase in net assets from operations 438,991,951 1,711,676,127
Distributions to Shareholders from:
Net realized gain on investments
Class A ............................... (190,225,942) (78,504,438)
Class B ............................... (878,876,396) (410,079,547)
Class C ............................... (154,838,516) (69,316,205)
Advisor Class ......................... (18,003,861) (13,813,033)
Transactions in Shares of
Beneficial Interest
Net increase ............................. 726,399,194 501,072,018
--------------- ---------------
Total increase (decrease) ................ (76,553,570) 1,641,034,922
Net Assets
Beginning of period ...................... 7,773,317,959 6,132,283,037
--------------- ---------------
End of period ............................ $ 7,696,764,389 $ 7,773,317,959
=============== ===============
See notes to financial statements.
--------------------------------------------------------------------------------
22 o ALLIANCE GROWTH FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE A
Significant Accounting Policies
Alliance Growth Fund (the "Fund"), a series of The Alliance Portfolios (the
"Trust"), is registered under the Investment Company Act of 1940 as a
diversified, open-end investment company. The Fund offers Class A, Class B,
Class C and Advisor Class shares. Class A shares are sold with a front-end sales
charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to
purchases of $1,000,000 or more, Class A shares redeemed within one year of
purchase may be subject to a contingent deferred sales charge of 1%. Class B
shares are currently sold with a contingent deferred sales charge which declines
from 4% to zero depending on the period of time the shares are held. Shares
purchased before August 2, 1993 and redeemed within six years of purchase are
subject to different rates than shares purchased after that date. Class B shares
purchased on or after August 2, 1993 and held for a period ending eight years
after the end of the calendar month of purchase will convert to Class A shares.
Class C shares are subject to a contingent deferred sales charge of 1% on
redemptions made within the first year after purchase. Advisor Class shares are
sold without any initial or contingent deferred sales charge and are not subject
to ongoing distribution expenses. Advisor Class shares are offered to investors
participating in fee-based programs and to certain retirement plan accounts. All
four classes of shares have identical voting, dividend, liquidation and other
rights, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. The financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange, on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on the
Nasdaq Stock Market, Inc. are generally valued at the last reported sale price
or if no sale occurred, at the mean of the closing bid and asked prices on that
day. Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to the U.S. over-the-counter market, and securities listed on a national
securities exchange whose primary market is believed to be over-the-counter (but
excluding securities traded on the Nasdaq Stock Market, Inc.), 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
--------------------------------------------------------------------------------
Alliance Growth Fund o 23
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
value as determined in good faith by, or in accordance with procedures adopted
by, the Board of Trustees. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities. Listed put and call options purchased
by the Fund are valued at the last sale price. If there has been no sale on that
day, such securities will be valued at the closing bid prices on that day.
Over-the-counter written options are valued using prices provided by brokers.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked price of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at rates of exchange
prevailing when accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, currency gains and
losses realized between the trade and settlement dates on security transactions
and the difference between the amounts of dividends and interest recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
The Fund does not isolate the effect of fluctuations in foreign currency
exchange rates when determining the gain or loss upon the sale of equity
securities. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected as
a component of net unrealized appreciation (depreciation) of investments,
options and foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. The Fund accretes discounts and amortizes premiums as
adjustments to interest income. Investment gains and losses are determined on
the identified cost basis.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees than
Class A shares and the Advisor Class shares have no distribution fees. Expenses
attributable to
--------------------------------------------------------------------------------
24 o Alliance Growth Fund
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
the Fund are charged to the Fund. Expenses of the Trust are charged to the Fund
in proportion to net assets.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with accounting principles generally accepted in the United States.
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. During the current
fiscal year, permanent differences, primarily due to a net operating loss,
resulted in a net decrease in accumulated net investment loss and a
corresponding decrease in accumulated net realized gain on investment
transactions. This reclassification had no effect on net assets.
NOTE B
Advisory Fee and Other Transactions With Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee equal to the annualized
rate of .75% of the Fund's average daily net assets up to $3 billion, .70% of
the next $1 billion of the Fund's average daily net assets, .65% of the next $1
billion of the Fund's average daily net assets, and .60% of the Fund's average
daily net assets over $5 billion. Such fee is accrued daily and paid monthly.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $8,358,810 for the year ended October 31, 2000.
For the year ended October 31, 2000, the Fund's expenses were reduced by
$529,999 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges of $594,576
from the sales of Class A shares and $82,572, $4,413,318, and $135,349 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares, respectively, for the year ended October
31, 2000.
Brokerage commissions paid on investment transactions for the year ended October
31, 2000 amounted to $7,740,810, none of which was paid to brokers utilizing the
services of the Pershing Division of Donaldson Lufkin & Jenrette Securities
Corp. ("DLJ"), an affiliate of the Adviser, and of which $504,798 was paid to
DLJ directly.
Accrued expenses includes $43,528 owed to a trustee and a former trustee under
the Trust's deferred compensation plan.
--------------------------------------------------------------------------------
Alliance Growth Fund o 25
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .50% of the Fund's average daily net assets attributable
to Class A shares and 1% of the average daily net assets attributable to both
Class B and Class C shares. There are no distribution and servicing fees on the
Advisor Class shares. The fees are accrued daily and paid monthly. The Trustees
currently limit payments under the Class A plan to .30% of the Fund's average
daily net assets attributable to Class A shares.
The Fund is not obligated under the Agreement to pay any distribution services
fee in excess of the amounts set forth above. The purpose of the payments to the
Distributor under the Agreement is to compensate the Distributor for its
distribution services with respect to the sale of the Fund's shares. Since the
Distributor's compensation is not directly tied to its expenses, the amount of
compensation received by it under the Agreement during any year may be more or
less than its actual expenses. For this reason, the Agreement is characterized
by the staff of the Commission as being of the "compensation" variety.
In the event that the Agreement is terminated or not continued, no distribution
services fees (other than current amounts accrued but not yet paid) would be
owed by the Fund to the Distributor with respect to the relevant class.
The Agreement also provides that the Adviser may use its own resources to
finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $4,757,955,178 and $5,401,488,496,
respectively, for the year ended October 31, 2000. There were no purchases and
sales in U.S. government and government agency obligations for the year ended
October 31, 2000.
At October 31, 2000, the cost of investments for federal income tax purposes was
$6,544,992,787. Accordingly, gross unrealized appreciation of investments was
$1,970,327,456 and gross unrealized depreciation of investments was $709,172,260
resulting in net unrealized appreciation of $1,261,155,196 excluding foreign
currency transactions and written options.
1. Option Transactions
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign securities and foreign currencies that are
traded on U.S. and foreign securities exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised.
--------------------------------------------------------------------------------
26 o Alliance Growth Fund
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Additionally, the Fund bears the risk of loss of the premium and change in
market value should the counterparty not perform under the contract. Put and
call options purchased are accounted for in the same manner as portfolio
securities. The cost of securities acquired through the exercise of call options
is increased by premiums paid. The proceeds from securities sold through the
exercise of put options are decreased by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the sale
of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. The
risk involved in writing an option is that, if the option was exercised the
underlying security could then be purchased or sold by the Fund at a
disadvantageous price.
Transactions in options written for the year ended October 31, 2000 were as
follows:
Number of
Contracts Premiums
========== =============
Options outstanding at beginning of year ........ 267,350 $ 103,671,026
Options written ................................. 1,752,366 704,433,402
Options terminated in closing
purchase transactions ........................ (348,910) (148,418,098)
Options expired ................................. (828,616) (318,991,858)
Options exercised ............................... (578,145) (248,512,427)
---------- -------------
Options outstanding at October 31, 2000 ........ 264,045 $ 92,182,045
========== =============
2. Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on foreign portfolio
holdings and to hedge certain firm purchase and sale commitments denominated in
foreign currencies. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contracts and the closing of such contracts is included in net realized gain or
loss on foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
--------------------------------------------------------------------------------
Alliance Growth Fund o 27
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the terms
of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At October 31, 2000, the Fund had no outstanding forward exchange currency
contracts.
NOTE E
Shares of Beneficial Interest
There is an unlimited number of $0.00001 par value shares of beneficial interest
authorized, divided into four classes, designated Class A, Class B, Class C and
Advisor Class shares. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
---------------------------- ----------------------------------
Shares Amount
---------------------------- ----------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2000 1999 2000 1999
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 71,735,957 25,063,582 $ 3,936,222,805 $ 1,335,434,326
---------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 3,237,714 1,502,656 173,962,506 71,692,245
---------------------------------------------------------------------------------------
Shares converted
from Class B 3,508,771 1,792,159 193,945,261 95,928,375
---------------------------------------------------------------------------------------
Shares redeemed (72,481,512) (24,127,633) (3,982,488,327) (1,288,874,014)
---------------------------------------------------------------------------------------
Net increase 6,000,930 4,230,764 $ 321,642,245 $ 214,180,932
=======================================================================================
Class B
Shares sold 14,727,815 18,279,927 $ 617,723,990 $ 768,132,374
---------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 19,876,457 10,048,522 809,766,778 380,336,149
---------------------------------------------------------------------------------------
Shares converted
to Class A (4,635,590) (2,264,146) (193,945,261) (95,928,375)
---------------------------------------------------------------------------------------
Shares redeemed (20,865,296) (18,356,515) (872,404,258) (773,148,238)
---------------------------------------------------------------------------------------
Net increase 9,103,386 7,707,788 $ 361,141,249 $ 279,391,910
=======================================================================================
Class C
Shares sold 18,231,876 11,295,511 $ 764,645,298 $ 477,555,736
---------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 3,526,794 1,709,056 143,787,252 64,721,989
---------------------------------------------------------------------------------------
Shares redeemed (18,280,386) (11,044,849) (766,160,441) (467,642,946)
---------------------------------------------------------------------------------------
Net increase 3,478,284 1,959,718 $ 142,272,109 $ 74,634,779
=======================================================================================
</TABLE>
--------------------------------------------------------------------------------
28 o Alliance Growth Fund
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
---------------------------- ----------------------------------
Shares Amount
---------------------------- ----------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2000 1999 2000 1999
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Advisor Class
Shares sold 260,609 1,043,525 $ 14,492,167 $ 55,591,771
---------------------------------------------------------------------------------------
Shares issued in
reinvestment of
distributions 310,054 268,515 16,851,438 12,902,137
---------------------------------------------------------------------------------------
Shares redeemed (2,360,012) (2,484,144) (130,000,014) (135,629,511)
---------------------------------------------------------------------------------------
Net increase
(decrease) (1,789,349) (1,172,104) $ (98,656,409) $ (67,135,603)
=======================================================================================
</TABLE>
NOTE F
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 2000.
--------------------------------------------------------------------------------
Alliance Growth Fund o 29
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........... $ 56.32 $ 47.17 $ 43.95 $ 34.91 $ 29.48
------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income
(loss) ........................ (.17)(a) (.15)(a) (.05)(a) (.10)(a) .05
Net realized and unrealized
gain on investments,
options and foreign
currency transactions ......... 3.71 13.01 6.18 10.17 6.20
------------------------------------------------------------------------------------
Net increase in net asset
value from operations ......... 3.54 12.86 6.13 10.07 6.25
------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............. -0- -0- -0- -0- (.19)
Distributions from net
realized gains ................ (7.44) (3.71) (2.91) (1.03) (.63)
------------------------------------------------------------------------------------
Total dividends and
distributions ................. (7.44) (3.71) (2.91) (1.03) (.82)
------------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 52.42 $ 56.32 $ 47.17 $ 43.95 $ 34.91
====================================================================================
Total Return
Total investment return based
on net asset value(b) ......... 5.96% 28.69% 14.56% 29.54% 21.65%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............... $1,656,689 $1,441,962 $1,008,093 $ 783,110 $ 499,459
Ratios to average net
assets of:
Expenses....................... 1.14% 1.18% 1.22%(c) 1.26%(c) 1.30%
Net investment income (loss) .. (.30)% (.28)% (.11)% (.25)% .15%
Portfolio turnover rate ......... 58% 62% 61% 48% 46%
</TABLE>
See footnote summary on page 33.
--------------------------------------------------------------------------------
30 o ALLIANCE GROWTH FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........... $ 44.40 $ 38.15 $ 36.31 $ 29.21 $ 24.78
------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss ............. (.43)(a) (.42)(a) (.31)(a) (.31)(a) (.12)
Net realized and unrealized
gain on investments,
options and foreign
currency transactions ......... 2.96 10.38 5.06 8.44 5.18
------------------------------------------------------------------------------------
Net increase in net asset
value from operations ......... 2.53 9.96 4.75 8.13 5.06
------------------------------------------------------------------------------------
Less: Distributions
Distributions from net
realized gains ................ (7.44) (3.71) (2.91) (1.03) (.63)
------------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 39.49 $ 44.40 $ 38.15 $ 36.31 $ 29.21
====================================================================================
Total Return
Total investment return based
on net asset value(b) ........ 5.18% 27.79% 13.78% 28.64% 20.82%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............... $5,042,755 $5,265,153 $4,230,756 $3,578,806 $2,498,097
Ratios to average net
assets of:
Expenses ...................... 1.86% 1.90% 1.94%(c) 1.96%(c) 1.99%
Net investment loss ........... (1.02)% (1.00)% (.83)% (.94)% (.54)%
Portfolio turnover rate ......... 58% 62% 61% 48% 46%
</TABLE>
See footnote summary on page 33.
--------------------------------------------------------------------------------
o ALLIANCE GROWTH FUND o 31
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........... $ 44.42 $ 38.17 $ 36.33 $ 29.22 $ 24.79
------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss ............. (.43)(a) (.42)(a) (.31)(a) (.31)(a) (.12)
Net realized and unrealized
gain on investments,
options and foreign
currency transactions ......... 2.97 10.38 5.06 8.45 5.18
------------------------------------------------------------------------------------
Net increase in net asset
value from operations ......... 2.54 9.96 4.75 8.14 5.06
------------------------------------------------------------------------------------
Less: Distributions
Distributions from net
realized gains ................ (7.44) (3.71) (2.91) (1.03) (.63)
------------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 39.52 $ 44.42 $ 38.17 $ 36.33 $ 29.22
====================================================================================
Total Return
Total investment return based
on net asset value(b) ........ 5.20% 27.78% 13.76% 28.66% 20.81%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............... $ 959,043 $ 923,483 $ 718,688 $ 599,449 $ 403,478
Ratios to average net
assets of:
Expenses ...................... 1.85% 1.90% 1.93%(c) 1.97%(c) 2.00%
Net investment loss ........... (1.02)% (1.00)% (.83)% (.95)% (.55)%
Portfolio turnover rate ......... 58% 62% 61% 48% 46%
</TABLE>
See footnote summary on page 33.
--------------------------------------------------------------------------------
32 o ALLIANCE GROWTH FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Advisor Class
------------------------------------------------------------------------------------
October 2,
Year Ended October 31, 1996(d) to
----------------------------------------------------------------- October 31,
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........... $ 56.88 $ 47.47 $ 44.08 $ 34.91 $ 34.14
------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income
(loss) ........................ (.02)(a) .02(a) .08(a) (.05)(a) -0-
Net realized and unrealized
gain on investments,
options and foreign
currency transactions ......... 3.75 13.10 6.22 10.25 .77
------------------------------------------------------------------------------------
Net increase in net asset
value from operations ......... 3.73 13.12 6.30 10.20 .77
------------------------------------------------------------------------------------
Less: Distributions
Distributions from net
realized gains ................ (7.44) (3.71) (2.91) (1.03) -0-
------------------------------------------------------------------------------------
Net asset value,
end of period ................. $ 53.17 $ 56.88 $ 47.47 $ 44.08 $ 34.91
====================================================================================
Total Return
Total investment return based
on net asset value(b) ........ 6.27% 29.08% 14.92% 29.92% 2.26%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............... $ 38,278 $ 142,720 $ 174,745 $ 101,205 $ 946
Ratios to average net
assets of:
Expenses ...................... .83% .88% .93%(c) .98%(c) 1.26%(e)
Net investment income (loss) .. .03% .03% .17% (.12)% .50%(e)
Portfolio turnover rate ......... 58% 62% 61% 48% 46%
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period
of less than one year is not annualized.
(c) Ratios reflect expenses grossed up for expense offset arrangement with the
transfer agent. For the years ended October 31, 1998 and 1997 the ratios
of expenses to average net assets were 1.21% and 1.25% for Class A shares,
1.93% and 1.95% for Class B shares, 1.92% and 1.95% for Class C shares and
.92% and .96% for Advisor Class shares, respectively.
(d) Commencement of distribution.
(e) Annualized.
--------------------------------------------------------------------------------
Alliance Growth Fund o 33
<PAGE>
---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
REPORT OF INDEPENDENT
ACCOUNTANTS
To the Trustees and Shareholders of Alliance Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Growth Fund (one of the
portfolios of The Alliance Portfolios, hereafter referred to as the "Fund") at
October 31, 2000, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2000 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 8, 2000
TAX INFORMATION
(unaudited)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $929,204,845 of capital gain distributions
during the fiscal year ended October 31, 2000, which are subject to a maximum
tax rate of 20%.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 2001.
--------------------------------------------------------------------------------
34 o ALLIANCE GROWTH FUND
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
capital
Cash or goods that are used to generate income. Also, the net worth of a
business (the amount by which its assets exceed its liabilities).
common stock
A type of security that represents ownership in a public company.
earnings
Revenues minus cost of sales, operating expenses, and taxes, over a given period
of time. Earnings are often the most important determinant of a company's stock
price.
equity security
Another term for stock.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
portfolio
The collection of securities that make up a fund's or an investor's investments.
sector
A group of securities that are similar with respect to maturity, type, rating,
industry and/or coupon. Refers to a distinct part of the economy, for example,
the technology sector.
--------------------------------------------------------------------------------
Alliance Growth Fund o 35
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with nearly $474
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 38 of the FORTUNE 100 companies and public retirement funds in 35
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 585
investment professionals in 28 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 10/2/00.
--------------------------------------------------------------------------------
36 o ALLIANCE GROWTH FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio, Alliance
Select Investor Series Technology Portfolio, and Alliance Select Investor
Series Biotechnology Portfolio which generally have a $10,000 minimum
initial investment) and may make subsequent investments of $50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
Alliance Growth Fund o 37
<PAGE>
--------
TRUSTEES
--------
TRUSTEES
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
Brenton W. Harries(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Bruce Calvert, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Wayne D. Lyski, Senior Vice President
Tyler J. Smith, Vice President
Edmund P. Bergan, Jr., Clerk
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller & Chief Accounting Officer
Custodian
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
Principal Underwriter
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Ropes & Gray
One International Place
Boston, MA 02110-2624
Transfer Agent
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free (800)-221-5672
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
--------------------------------------------------------------------------------
38 o ALLIANCE GROWTH FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Closed-End Funds
All-Market Advantage Fund
The Austria Fund
ACM Government Income Fund
ACM Government Opportunity Fund
The Korean Investment Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
The Southern Africa Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
Alliance Growth Fund o 39
<PAGE>
NOTES
--------------------------------------------------------------------------------
40 o ALLIANCE GROWTH FUND
<PAGE>
Alliance Growth Fund
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital [LOGO] (R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
GROWTHAR1000
