<PAGE>
ACM Government
Spectrum Fund
Semi-Annual Report
June 30, 2000
[LOGO OF ALLIANCE CAPITAL]
The Investment Professional's Choice
<PAGE>
Investment Products Offered
---------------------------
. Are Not FDIC Insured
. May Lose Value
. Are Not Bank Guaranteed
---------------------------
<PAGE>
LETTER TO SHAREHOLDERS
August 11, 2000
Dear Shareholder:
This report contains performance, investment strategy and outlook for ACM Gov-
ernment Spectrum Fund (the "Fund") for the semi-annual reporting period ended
June 30, 2000.
Investment Objectives and Policies
This closed-end Fund is designed to provide high current income consistent with
the preservation of capital. The Fund invests principally in U.S. government
obligations. The Fund may also invest up to 35% of its assets in securities of
foreign governments. Additionally, the Fund may utilize other investment in-
struments, including options and futures.
Investment Results
The following table shows how the Fund performed over the past six- and 12-
month periods ended June 30, 2000. For comparison, we have included the Lehman
Brothers Aggregate Bond Index, a standard measure of the performance of a bas-
ket of unmanaged debt securities.
During the six-month period ended June 30, 2000, the Fund outperformed its
benchmark, the Lehman Brothers Aggregate Bond Index. Our opportunistic alloca-
tion to below-investment-grade emerging markets contributed positively to the
Fund's performance. In addition, our Treasury duration structure and Treasury
security selection enhanced performance.
Investment Strategy
Over the past six-month period ended June 30, 2000, we increased our U.S. Trea-
sury holdings to benefit from the
INVESTMENT RESULTS*
Periods Ended June 30, 2000
<TABLE>
<CAPTION>
Total Returns
6 Months 12 Months
------------------------------------
<S> <C> <C>
ACM Government
Spectrum Fund 5.26% 9.79%
------------------------------------
Lehman Brothers
Aggregate Bond
Index 3.99% 4.56%
------------------------------------
</TABLE>
* The Fund's investment results are total returns for the periods shown and
are based on the net asset value of the Fund as of June 30, 2000. All fees
and expenses related to the operation of the Fund have been deducted.
Returns for the Fund include the reinvestment of any distributions paid
during the period. Past performance is no guarantee of future results.
The unmanaged Lehman Brothers Aggregate Bond Index is composed of the Lehman
Brothers Mortgage-Backed and Lehman Brothers Asset-Backed Securities Indices
and the Lehman Brothers Government/Corporate Bond Index. It includes
Treasury, agency and corporate bond issues, as well as mortgage-backed
securities. The Index is unmanaged and does not reflect fees and expenses.
An investor cannot invest directly in an index, and its results are not
indicative of the performance of any particular investment, including ACM
Government Spectrum Fund.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.1
<PAGE>
LETTER TO SHAREHOLDERS
Treasury buy-back program. In the emerging market sector, we increased our po-
sitions in Mexico and Russia, anticipating relative outperformance based on
that sector's improving credit profile. We trimmed our Brazil and Philippine
positions in light of fundamental disappointment surrounding the fiscal defi-
cit. We have also increased our exposure to Turkey, as it was upgraded to a B+
rating.
Market Review
The global macroeconomic outlook continued to improve during the first six
months of 2000. The U.S. economy remained strong, growing 4.8% in the first
quarter and 5.2% during the second quarter. Inflation and unemployment re-
mained low. However, the rise in commodity prices--led by oil--along with low
unemployment, has put upward pressure on U.S. inflation. Strong U.S. economic
activity prompted the Federal Reserve to increase short-term interest rates
from 5.50% to 6.50% during the period.
The U.S. bond market, as represented by the Lehman Brothers Aggregate Bond In-
dex, posted a return of 3.99% during the six-month period. Among the tradi-
tional sectors of the U.S. bond market, the U.S. government sector recorded
the strongest performance at 5.0%, as a result of the Treasury buy-back pro-
gram. Faced with a growing budget surplus,
the Treasury began a long-term project to reduce the supply of outstanding
government debt. The yield curve inverted during the period as investors fo-
cused on tighter monetary policy as well as the Treasury buy-back program.
Two-year Treasury yields rose from 6.24% to 6.36%, while 30-year Treasury
yields fell from 6.48% to 5.90%.
In spite of strong mortgage fundamentals, the performance of the mortgage-
backed sector was dampened by events in Washington, DC. From a fundamental
perspective, mortgage securities benefited from a strong underlying housing
sector. However, relative performance
was dampened by the Treasury buy-back program, which affected all non-Treasury
sectors negatively.
The emerging market debt sector returned 8.10% during the period. Most of the
strong performance occurred in the first quarter when emerging market debt re-
acted positively to improving global economic fundamentals. Russia posted the
best performance for the period, 49.78%, helped by high oil prices, a new
President and economic reforms. Mexico posted the second best performance,
7.88%, boosted by an upgrade to investment-grade quality. The upgrade re-
flected Mexico's lower foreign currency debt underpinned by a well-integrated
export sector. Colombia and the Philippines were the worst performers for the
period, returning -8.97% and-8.15%, respectively.
Outlook
Our near-term outlook for financial markets assumes that U.S. growth will mod-
erate but not enough to resolve the inflationary imbalances (labor market and
trade deficit) in the economy. There remains a risk of further tightening be-
fore year-end. We expect technical sup-
ply considerations to play an increasing role in shaping the U.S. Treasury
yield curve. In the period immediately ahead,
we expect the curve to remain inverted
-------------------------------------------------------------------------------
2.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
LETTER TO SHAREHOLDERS
reflecting the likelihood of further tightening by the Federal Reserve. Some
further inversion and an overall rise in absolute yields is our most likely
scenario, with the two-year note yield heading back toward between 6.75% and
7.00% and the 10-year note yield moving back above 6.25% over the longer term.
Despite the inevitable variation across countries, we believe that most emerg-
ing-market governments remain committed to necessary economic and financial
reforms. The economic news coming out of Russia continues to be positive, and
it appears that the London Club debt exchange will be concluded by early fall.
In Mexico, we expect President-elect Fox to implement market friendly policies
along with a proposal for a prudent budget in 2001. We believe that a credit
upgrade is likely later this year. Going forward, we believe this asset class
will continue to produce attractive returns, albeit with considerable volatil-
ity, over the medium-term.
Notice to Shareholders
On July 20, 2000, the Board of Directors of the Fund approved the acquisition
by ACM Government Income Fund of the assets of ACM Government Securities Fund,
ACM Government Spectrum Fund and ACM Government Opportunity Fund.
The proposed acquisitions, which are not contingent on each other, are subject
to stockholder approval, and concurrent special stockholder meetings to con-
sider the acquisitions have been scheduled for November 14, 2000. You should
be receiving a proxy statement concerning the proposed acquisitions shortly.
Those acquisitions that receive stockholder approval are expected to be com-
pleted during the fourth quarter of this year. The Fund's Board of Directors
believes that consolidation of these very similar funds is in the stockhold-
ers' best interests. It is expected that, under current conditions, the acqui-
sitions will be fully protective of ACM Government Income's earning power and
distribution rate.
Under each proposed acquisition, stockholders of the Fund whose assets are ac-
quired will receive shares of ACM Government Income equivalent in aggregate
net asset value to the shares they hold immediately prior to the acquisition.
Stockholders participating in a fund's dividend reinvestment plan will receive
full and fractional ACM Government Income shares. Other stockholders will re-
ceive cash in lieu of fractional shares.
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ACM GOVERNMENT SPECTRUM FUND.3
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO]
John D. Carifa
[PHOTO]
Wayne D. Lyski
Portfolio Manager, Wayne D. Lyski, has over 26 years of investment experience.
Thank you for your continued interest and investment in ACM Government Spectrum
Fund. We look forward to reporting its progress to you in the coming months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman
/s/ Wayne D. Lyski
Wayne D. Lyski
President
--------------------------------------------------------------------------------
4.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
PERFORMANCE UPDATE
PERFORMANCE UPDATE
ACM GOVERNMENT SPECTRUM FUND (NAV)
HISTORY OF RETURNS
YEARLY PERIODS ENDED 6/30
[GRAPH]
<TABLE>
<CAPTION>
ACM Government Spectrum Fund (NAV) -- Yearly Periods Ended 6/30
-------------------------------------------------------------------------------------------
ACM Government Lehman Brothers
Spectrum Fund (NAV) Aggregate Bond Index
-------------------------------------------------------------------------------------------
<S> <C> <C>
6/30/91 11.36% 10.70%
6/30/92 13.89% 14.04%
6/30/93 20.66% 11.78%
6/30/94 -10.38% -1.30%
6/30/95 8.16% 12.55%
6/30/96 7.63% 5.02%
6/30/97 11.11% 8.15%
6/30/98 10.72% 10.54%
6/30/99 1.56% 3.15%
6/30/00 9.79% 4.56%
</TABLE>
Past performance is no guarantee of future results. The Fund's investment re-
sults represent total returns and are based on the net asset value (NAV). All
fees and expenses related to the operation of the Fund have been deducted. Re-
turns for the Fund include the reinvestment of any distributions paid during
the period.
The unmanaged Lehman Brothers (LB) Aggregate Bond Index is composed of the LB
Mortgage-Backed Securities Index, the LB Asset-Backed Securities Index and the
LB Government/Corporate Bond Index. It includes Treasury, agency and corporate
bond issues, as well as mortgage-backed securities. An investor cannot invest
directly in an index, and its results are not indicative of any specific in-
vestment, including ACM Government Spectrum Fund.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.5
<PAGE>
PERFORMANCE UPDATE
PERFORMANCE UPDATE
ACM GOVERNMENT SPECTRUM FUND (NAV)
GROWTH OF A $10,000 INVESTMENT
6/30/90 TO 6/30/00
[GRAPH]
ACM Gov Spectrum Fund (NAV) Lehman Brothers Aggregate Bond Index
6/30/90 10,000 10,000
6/30/91 11,136 11,070
6/30/92 12,683 12,624
6/30/93 15,304 14,112
6/30/94 13,715 13,928
6/30/95 14,829 15,676
6/30/96 15,960 16,462
6/30/97 17,734 17,804
6/30/98 19,635 19,681
6/30/99 19,941 20,300
6/30/2000 21,912 21,227
This chart illustrates the total value of an assumed $10,000 investment in ACM
Government Spectrum Fund (NAV) (from 6/30/90 to 6/30/00) as compared to the
performance of an appropriate index. The chart assumes the reinvestment of div-
idends and capital gains. Past performance is not indicative of future results,
and is not representative of future gain or loss in capital value or dividend
income.
The unmanaged Lehman Brothers (LB) Aggregate Bond Index is composed of the
LB Mortgage-Backed Securities Index, the LB Asset-Backed Securities Index and
the LB Government/Corporate Bond Index. It includes Treasury, agency and
corporate bond issues, as well as mortgage-backed securities.
When comparing ACM Government Spectrum Fund to the index shown above, you
should note that no charges or expenses are reflected in the performance of the
index. An investor cannot invest directly in an index and its results are not
indicative of any specific investment, including ACM Government Spectrum Fund.
--------------------------------------------------------------------------------
6.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
PORTFOLIO SUMMARY
June 30, 2000
PORTFOLIO SUMMARY
INCEPTION DATE PORTFOLIO STATISTICS
(Class A shares) Net Assets ($ mil): $231.7
5/27/88
[GRAPH]
SECURITY TYPE
[_] 63.0% Treasury
[_] 28.5% Sovereign
[_] 5.2% FNMA
[_] 2.0% GNMA
[_] 1.3% Brady Bonds
[GRAPH]
COUNTRY BREAKDOWN
[_] 70.2% United States
[_] 6.7% Mexico
[_] 4.6% Brazil
[_] 3.8% Turkey
[_] 2.5% Phillippines
[_] 2.5% South Africa
[_] 2.3% Panama
[_] 1.7% Russia
[_] 1.5% Argentina
[_] 1.5% Qatar
[_] 1.4% Poland
[_] 1.3% Bulgaria
All data as of June 30, 2000. The Fund's security type and country breakdowns
may vary over time. These breakdowns are expressed as a percentage of total in-
vestments.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.7
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 2000 (unaudited)
PORTFOLIO OF
INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
<S> <C> <C>
------------------------------------------------------------------------------
U.S. Government and Agency Obligations - 89.4%
U.S. Treasury Bonds - 46.2%
6.25%, 5/15/30...................................... $ 3,500 $ 3,672,270
8.125%, 8/15/19..................................... 11,265 13,618,371
8.875%, 2/15/19..................................... 1,170 1,505,825
10.75%, 8/15/05..................................... 9,600 11,443,488
12.375%, 5/15/04.................................... 6,500 7,816,250
12.75%, 11/15/10.................................... 7,825 10,009,896
13.25%, 5/15/14..................................... 3,150 4,595,566
13.75%, 8/15/04(a).................................. 15,730 19,888,540
14.00%, 11/15/11(a)................................. 24,800 34,441,000
------------
106,991,206
------------
U.S. Treasury Notes - 25.3%
4.50%, 9/30/00(a)................................... 7,000 6,970,460
5.875%, 11/30/01(a)................................. 14,000 13,886,180
6.50%, 2/15/10...................................... 4,600 4,757,412
6.875%, 5/15/06..................................... 9,600 9,880,512
7.50%, 11/15/01..................................... 14,875 15,063,317
7.875%, 11/15/04.................................... 7,650 8,100,662
------------
58,658,543
------------
Mortgage Related Securities - 9.1%
Federal National Mortgage Association
7.50%, 11/01/29..................................... 11,208 11,046,452
8.00%, 6/01/28...................................... 4,290 4,328,038
------------
15,374,490
------------
Government National Mortgage Association
6.50%, 2/15/29...................................... 6,086 5,775,988
------------
21,150,478
------------
U.S. Treasury Strips - 8.8%
Zero coupon, 5/15/15................................ 51,000 20,397,960
------------
Total U.S. Government and Agency Obligations
(cost $214,710,912)................................. 207,198,187
------------
Sovereign Debt Obligations - 38.0%
Other Sovereign Debt Obligations - 36.3%
Argentina - 1.9%
Republic of Argentina
12.00%, 2/01/20..................................... 4,725 4,400,392
------------
Brazil - 5.9%
Republic of Brazil Discount Bonds FRN
7.375%, 4/15/24..................................... 3,500 2,752,050
Global Bonds
12.25%, 3/06/30..................................... 3,750 3,431,250
14.50%, 10/15/09.................................... 7,000 7,464,100
------------
13,647,400
------------
</TABLE>
--------------------------------------------------------------------------------
8.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
<S> <C> <C>
------------------------------------------------------------------------------
Mexico - 8.5%
Mexican Treasury Bill
21.86%, 9/07/00(b)................................ MXN 25,968 $ 2,554,637
United Mexican States
6.25%, 12/31/19(c)................................ $ 3,750 3,103,125
7.80%, 12/31/19 FRN(c)............................ 4,000 3,920,000
10.375%, 2/17/09(c)............................... 9,650 10,229,000
------------
19,806,762
------------
Panama - 2.9%
Republic of Panama
9.375%, 4/01/29................................... 7,000 6,702,500
------------
Philippines - 3.2%
Republic of Philippines
9.875%, 1/15/19................................... 3,750 3,061,125
10.625%, 3/16/25.................................. 5,000 4,287,500
------------
7,348,625
------------
Poland - 1.8%
Government of Poland
10.00%, 6/12/04................................... PLN 22,000 4,223,774
------------
Qatar - 1.9%
State of Qatar
9.75%, 6/15/30(d)................................. $ 4,500 4,426,650
------------
Russia - 2.2%
Ministry of Finance
3.00%, 5/14/03.................................... 7,700 3,349,500
Russian Federation WI
2.25%, 3/31/30(d)................................. 4,475 1,683,719
------------
5,033,219
------------
South Africa - 3.1%
Development Bank of South Africa
Zero coupon, 12/31/27............................. ZAR 250,000 810,612
European Bank for Reconstruction and Development
Zero coupon, 4/07/27.............................. 116,605 541,350
International Bank for Reconstruction and
Development
Zero coupon, 12/31/25............................. 300,000 1,516,139
Zero coupon, 2/17/26.............................. 250,000 1,241,710
Zero coupon, 7/14/27.............................. 237,275 1,110,664
Republic of South Africa
13.00%, 8/31/10................................... 14,500 2,000,295
------------
7,220,770
------------
</TABLE>
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.9
<PAGE>
PORTFOLIO OF
INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
<S> <C> <C>
------------------------------------------------------------------------------
Turkey - 4.9%
Turkey Treasury Bills
Zero Coupon, 8/23/00........................... TRL 27,250,000 $ 3,882,328
Republic of Turkey
11.75%, 6/15/10................................ $ 1,500 1,537,500
11.875%, 1/15/30............................... 3,000 3,198,750
Turkey Government Bond
72.00%, 10/03/01............................... TRL 13,600,000 2,669,736
------------
11,288,314
------------
Total Other Sovereign Debt Obligations
(cost $90,916,674)............................. 84,098,406
------------
Non-Collateralized Brady Bonds - 1.7%
Bulgaria
Republic of Bulgaria IAB FRN
7.0625%, 7/28/11............................... $ 4,950 3,904,560
------------
Total Sovereign Debt Obligations
(cost $94,832,818)............................. 88,002,966
------------
Total Investments - 127.4%
(cost $309,543,730)............................ 295,201,153
Other assets less liabilities - (27.4)%......... (63,466,671)
------------
Net Assets - 100.0%............................. $231,734,482
------------
</TABLE>
(a) Securities, or portion thereof, loaned at June 30, 2000, with an aggregate
market value of $64,301,600 and cash collateral received from the
counterparties of Lehman Brothers and Merrill Lynch in the amount of
$65,040,000.
(b) Interest rate represents annualized yield to maturity at purchase date.
(c) Security trades with value recovery rights expiring June 30, 2003.
(d) Security 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 June 30, 2000,
these securities amounted to $6,110,369 or 2.6% of net assets.
Glossary of Terms:
FRN - Floating Rate Note
IAB - Interest Arrears Bond
WI - When Issued
See notes to financial statements.
--------------------------------------------------------------------------------
10.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
Assets
Investments in securities, at value (cost $309,543,730)......... $295,201,153
Cash............................................................ 2,464,944
Interest receivable............................................. 5,844,112
Prepaid expenses................................................ 21,350
------------
Total assets.................................................... 303,531,559
------------
Liabilities
Payable for investment securities purchased..................... 6,257,221
Deposit for securities loaned................................... 65,040,000
Advisory fee payable............................................ 216,610
Interest payable on securities lending.......................... 116,627
Administrative fee payable...................................... 41,241
Accrued expenses................................................ 125,378
------------
Total liabilities............................................... 71,797,077
------------
Net Assets...................................................... $231,734,482
------------
Composition of Net Assets
Capital stock, at par........................................... $ 352,355
Additional paid-in capital...................................... 314,385,042
Undistributed net investment income............................. 1,906,468
Accumulated net realized loss on investments and foreign
currency transactions.......................................... (70,566,643)
Net unrealized depreciation of investments and foreign
currency transactions.......................................... (14,342,740)
------------
$231,734,482
------------
Net Asset Value Per Share
(based on 35,235,527 shares outstanding)....................... $6.58
------
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (unaudited)
STATEMENT OF
OPERATIONS
<TABLE>
<S> <C> <C>
Investment Income
Interest............................................... $15,189,511
Expenses
Advisory fee........................................... $1,150,142
Administrative fee..................................... 221,621
Custodian.............................................. 57,990
Reports and notices to shareholders.................... 44,540
Transfer agency........................................ 40,140
Audit and legal........................................ 37,132
Directors' fees........................................ 17,840
Registration Fee....................................... 11,023
Miscellaneous.......................................... 7,552
----------
Total expenses before interest......................... 1,587,980
Interest expense....................................... 1,461,003
----------
Total expenses......................................... 3,048,983
-----------
Net investment income.................................. 12,140,528
-----------
Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized loss on investment transactions........... (5,064,909)
Net realized loss on foreign currency transactions..... (382,459)
Net change in unrealized appreciation/depreciation of:
Investments........................................... 3,061,252
Foreign currency transactions......................... 3,085
-----------
Net loss on investments and foreign currency
transactions.......................................... (2,383,031)
-----------
Net Increase in Net Assets from Operations............. $ 9,757,497
-----------
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
12.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31,
(unaudited) 1999
---------------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income............................. $ 12,140,528 $ 21,949,553
Net realized loss on investments and foreign
currency transactions............................ (5,447,368) (7,076,079)
Net change in unrealized appreciation/depreciation
of investments and foreign currency
transactions..................................... 3,064,337 (12,453,703)
------------ ------------
Net increase in net assets from operations........ 9,757,497 2,419,771
Dividends to Shareholders
Dividends from net investment income.............. (10,886,109) (20,179,639)
Capital Stock Transactions
Net decrease...................................... (10,671,250) - 0 -
------------ ------------
Total decrease (11,799,862) (17,759,868)
............................................
Net Assets
Beginning of year................................. 243,534,344 261,294,212
------------ ------------
End of period (including undistributed net
investment income of $1,906,468 and
$652,049, respectively).......................... $231,734,482 $243,534,344
------------ ------------
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)
NOTES TO FINANCIAL STATEMENTS
NOTE A Significant Accounting Policies
ACM Government Spectrum Fund, Inc. (the "Fund") is registered under the In-
vestment Company Act of 1940 as a non-diversified, closed-end management in-
vestment company. The financial statements have been prepared in conformity
with accounting principles generally accepted in the United States which re-
quire management to make certain estimates and assumptions that affect the re-
ported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are gener-
ally valued at the last reported sale price or, if there was no sale on such
day, the last bid price quoted on such day. If no bid prices are quoted, then
the security is valued at the mean of the bid and asked prices as obtained on
that day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, securities listed on a for-
eign securities exchange whose operations are similar to the United States
over-the-counter market and securities listed on a national securities ex-
change whose primary market is believed to be over-the-counter are valued at
the mean of the closing bid and asked price provided by two or more dealers
regularly making a market in such securities. U.S. government securities and
other debt securities which mature in 60 days or less are valued at amortized
cost unless this method does not represent fair value. Securities for which
market quotations are not readily available are valued at fair value as deter-
mined in good faith by, or in accordance with procedures approved by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. Listed put and call options pur-
chased by the Fund are valued at the last sale price. If there is no sale on
that day, such securities are valued at the closing bid prices on that day.
2. 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 in-
vestment company taxable income and net realized gains, if any, to sharehold-
ers. Therefore, no provisions for federal income or excise taxes are required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-divi-
dend date. Investment transactions are accounted for on the date securities
are purchased or sold. Investment gains and losses are determined on the iden-
tified cost basis. The Fund accretes discounts as adjustments to interest in-
come.
-------------------------------------------------------------------------------
14.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. 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 prices 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 the rates of
exchange prevailing when accrued. Net realized gain or loss on foreign cur-
rency transactions represents foreign exchange gains and losses from sales and
maturities of foreign securities, holdings of foreign currencies, options on
foreign currencies, closed forward exchange currency contracts, exchange gains
and losses realized between the trade and settlement dates on foreign security
transactions, and the difference between the amounts of interest and foreign
withholding taxes recorded on the Fund's books and the U.S. dollar equivalent
of the amounts actually received or paid. Net foreign currency gains and
losses from valuing foreign currency denominated assets and liabilities at pe-
riod end exchange rates are reflected as a component of net unrealized depre-
ciation of investments and foreign currency transactions.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require
such reclassification.
NOTE B Advisory, Administrative Fees 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 in an amount equal
to the sum of 1/12th of .30% of the Fund's average weekly net assets up to
$250 million, 1/12th of .25% of the Fund's average weekly net assets in excess
of $250 million, and 5.25% of the daily gross income (i.e., income other than
gains from the sale of securities and foreign currency transactions or gains
realized from options and futures contracts) accrued by the Fund during the
month. However, such monthly advisory fee shall not exceed in the aggregate
1/12th of 1% of the Fund's average weekly net assets during the month (approx-
imately 1% on an annual basis).
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc ("AFS"), an affiliate of the Adviser, the Fund reimburses AFS
for costs relating to servicing phone inquires on behalf of the Fund. During
the six months ended June 30, 2000, the Fund reimbursed AFS $1,695.
Under the terms of an Administrative Agreement, the Fund pays its Administra-
tor, Mitchell Hutchins Asset Man-
-------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
agement Inc., a monthly fee equal to the annualized rate of .20 of 1% of the
Fund's average weekly net assets up to $100 million, .18 of 1% of the Fund's
next $200 million of average weekly net assets, and .16 of 1% of the Fund's av-
erage weekly net assets in excess of $300 million. The Administrator prepares
financial and regulatory reports for the Fund and provides other clerical serv-
ices.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $71,595,499 and $61,709,757, respec-
tively, for the six months ended June 30, 2000. There were purchases of
$88,703,344 and sales of $61,307,873 of U.S. government and government agency
obligations during the six months ended June 30, 2000.
At June 30, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes. According-
ly, gross unrealized appreciation of investments was $4,633,605, and gross
unrealized depreciation was $18,976,182, resulting in net unrealized deprecia-
tion of $14,342,577 (excluding foreign currency transactions).
At December 31, 1999, the Fund had a capital loss carryforward of $59,837,363
of which $22,208,518 expires in the year 2002, $32,047,923 expires in the year
2003, $2,680,733 expires in the year 2004, $79,155 expires in the year 2005 and
$2,821,034 expires in the year 2007.
1. Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio hold-
ings, to hedge certain firm purchase and sale commitments denominated in for-
eign currencies and for investment purposes. A forward exchange currency con-
tract 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 be-
tween the original contract and the closing of such contract is included in net
realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are re-
flected for financial reporting purposes as a component of net unrealized de-
preciation of investments and foreign currency transactions.
The Fund's custodian places and maintains 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 foreign
currencies relative to the U.S. dollar.
At June 30, 2000, the Fund had no outstanding forward exchange currency con-
tracts.
--------------------------------------------------------------------------------
16.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. Option Transactions
For hedging purposes, the Fund purchases and writes (sells) put and call op-
tions on U.S. and foreign government securities and foreign currencies that
are traded on U.S. and foreign securities exchanges and over-the-counter mar-
kets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not per-
form 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 the premiums paid. The
proceeds from securities sold through the exercise of put options are de-
creased 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 written options which expire unexer-
cised are recorded by the Fund on the expiration date as a realized gain from
options written. The difference between the premium received and the amount
paid on effecting a closing purchase transaction, including brokerage commis-
sions, is also treated as a realized gain, or if the premium is less than the
amount paid for the closing purchase transaction, as a realized loss. If a
call option is exercised, the premium is added to the proceeds from the sale
of the underlying security or currency in determining whether the Fund has a
realized gain or loss. If a put option is exercised, the premium reduces the
cost basis of the security or currency purchased by the Fund. In writing an
option, the Fund bears the market risk of an unfavorable change in the price
of the security or currency underlying the option written. Exercise of an op-
tion written by the Fund could result in the Fund selling or buying a security
or currency at a price different from the current market value.
For the six months ended June 30, 2000, the Fund did not have any written op-
tion transactions.
3. Swap Agreements
The Fund enters into swaps on sovereign debt obligations to protect itself
from interest rate fluctuations on the underlying debt instruments and for
investment purposes. A swap is an agreement that obligates two parties to
exchange a series of cash flows at specified intervals based upon or
calculated by reference to changes in specified prices or rates for a
specified amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a
-------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
swap contract in evaluating potential credit risk. Additionally, risks may
arise from unanticipated movements in interest rates or in the value of the
underlying securities.
The Fund records a net receivable or payable on a daily basis for the net in-
terest income or expense expected to be received or paid during the interest
period. Net interest received or paid on these contracts is recorded as inter-
est income (or as an offset to interest income). Fluctuations in the value of
swap contracts are recorded for financial statement purposes as net change in
unrealized appreciation/depreciation of investments.
At June 30, 2000, the Fund did not have any swap contracts outstanding.
NOTE D
Capital Stock
There are 300,000,000 shares of $0.01 par value common stock authorized, of
which 35,235,527 shares were outstanding at June 30, 2000. On January 26, 2000
the Fund initiated a share repurchase program. For the six months ended June
30, 2000, 1,792,500 shares were repurchased at a cost of $10,671,250 repre-
senting 4.8% of the 37,028,027 shares outstanding at January 26, 2000. This
includes $107,550 in commissions paid to PaineWebber Group, Inc. The average
discount of market price to net asset value of shares repurchased over the pe-
riod January 26, 2000 to June 30, 2000 was 10.9%.
NOTE E
Security Lending
The Fund may make secured loans of portfolio securities to brokers, dealers
and financial institutions, provided that cash, liquid high-grade debt securi-
ties or bank letters of credit equal to at least 100% of the market value of
the securities loaned is deposited and maintained by the borrower with the
Fund.
For the period ended June 30, 2000, the maximum amount of security lending
agreements outstanding was $70,772,295, the average amount outstanding was ap-
proximately $51,523,422 and the daily weighted average interest rate was
5.59%.
The risks in lending portfolio securities, as with other extensions of credit,
consist of possible loss of rights in the collateral should the borrower fail
financially. In determining whether to lend securities to a particular borrow-
er, the Adviser will consider all relevant facts and circumstances, including
the creditworthiness of the borrower. While securities are on loan, the bor-
rower will pay the Fund any income earned thereon and the Fund may invest any
cash collateral in portfolio securities, thereby earning additional income, or
receive an agreed upon amount of income from a borrower who has delivered
equivalent collateral. When such securities are borrowed against cash, the
Fund agrees to pay the borrower of such securities a "rebate rate" for the use
of the cash the borrower has pledged as collateral. The rebate rate is the
spread between the interest rate received and interest rate paid in the repur-
chase agreement market by the securities borrower.
As of June 30, 2000, the Fund had entered into the following security lending
agreement:
-------------------------------------------------------------------------------
18.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Amount Counterparty Interest Rate Maturity
------ ------------ ------------- -------------
<C> <S> <C> <C>
$10,520,000 Merrill Lynch 6.55% July 7, 2000
7,026,250 Merrill Lynch 6.40% July 13, 2000
15,293,750 Lehman Brothers 6.42% July 14, 2000
32,200,000 Lehman Brothers 6.375% July 21, 2000
</TABLE>
NOTE F Concentration of Risk
Investing in securities of foreign governments involves special risks which in-
clude changes in foreign exchange rates and the possibility of future adverse
political and economic developments which could adversely affect the value of
such securities. Moreover, securities of many foreign governments and their
markets may be less liquid and their prices more volatile than those of the
United States Government.
NOTE G Subsequent Event
On July 20, 2000, the Fund's Directors approved the acquisition of the Fund's
assets by the ACM Government Income Fund. The proposed transfer is subject to
stockholder approval at a special stockholder meeting scheduled for November 9,
2000. A proxy statement relating to this meeting will be mailed to all stock-
holders of record in the upcoming weeks. If the acquisition receives stock-
holder approval, the acquisition is expected to be completed during the fourth
quarter of this year.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.19
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended June
30, 2000 ----------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $6.58 $7.06 $7.23 $7.16 $7.47 $6.89
-------------------------------------------------------------------
Income From Investment
Operations
Net investment income.... .34(a) .59 .50 .51 .57 .70(a)
Net realized and
unrealized gain (loss)
on investments, options
written and foreign
currency transactions... (.07) (.53) (.12) .17 (.19) .66
-------------------------------------------------------------------
Net increase in net asset
value from operations... .27 .06 .38 .68 .38 1.36
-------------------------------------------------------------------
Realized gain due to
repurchase program .03 -0- -0- -0- -0- -0-
-------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income....... (.30) (.54) (.50) (.52) (.57) (.70)
Distributions in excess
of net investment
income.................. -0- -0- (.05) (.09) (.12) (.01)
Tax return of capital
distribution............ -0- -0- -0- -0- -0- (.07)
-------------------------------------------------------------------
Total dividends and
distributions.......... (.30) (.54) (.55) (.61) (.69) (.78)
-------------------------------------------------------------------
-------------------------------------------------------------------
Net asset value, end of
period.................. $6.58 $6.58 $7.06 $7.23 $7.16 $7.47
-------------------------------------------------------------------
Market value, end of
period.................. $5.813 $5.438 $6.188 $6.625 $6.375 $6.625
-------------------------------------------------------------------
Total Investment Return
Total investment return
based on:(b)............
Market value............. 12.48% (3.56)% 1.55% 13.79% 6.55% 4.32%
Net asset value.......... 5.26% 2.24 % 6.16% 10.57% 6.13% 21.64%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted)......... $231,734 $243,534 $261,294 $267,865 $265,248 $276,638
Ratio of expenses to
average net assets...... 2.59%(c) 1.20 % 1.06% 1.15% 1.17% 1.31%
Ratio of expenses to
average net assets
excluding interest
expense(d).............. 1.35%(c) 0.00 % 0.00% 0.00% 0.00% 0.00%
Ratio of net investment
income to average net
assets.................. 10.32%(c) 8.88 % 7.00% 7.30% 8.10% 10.07%
Portfolio turnover rate.. 44% 186 % 191% 350% 453% 377%
</TABLE>
See footnote summary on page 21.
--------------------------------------------------------------------------------
20.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
FINANCIAL HIGHLIGHTS
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for purposes of this calculation, to be reinvested at prices obtained under
the Fund's Dividend Reinvestment Plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based
on market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods. Total investment return for a period
of less than one year is not annualized.
(c) Annualized.
(d) Net of interest expense of 1.24% on borrowings (see Note E).
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.21
<PAGE>
ADDITIONAL INFORMATION
ADDITIONAL
INFORMATION
Supplemental Proxy Information
The Annual Meeting of Shareholders of the ACM Government Spectrum Fund was held
on Tuesday, March 28, 2000. The description of each proposal and number of
shares voted at the meeting are as follows:
<TABLE>
<CAPTION>
Voted
Abstain/
Voted Authority
For Withheld
--------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
1. To elect directors: Class Three Directors
(terms expire in 2003)
Ruth Block 33,369,385 691,344
John D. Carifa 33,365,437 695,292
Robert C. White 33,336,798 723,931
<CAPTION>
Voted
Abstain/
Voted Voted Authority
For Against Withheld
--------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
2. To ratify the selection of Ernst & Young
LLP as the Fund's independent auditors for
the fiscal year ending December 31, 2000: 33,586,629 205,795 268,305
</TABLE>
--------------------------------------------------------------------------------
22.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
ALLIANCE CAPITAL
GLOSSARY OF INVESTMENT TERMS
GLOSSARY OF INVESTMENT TERMS
asset-backed securities (ABS)
Bonds or notes backed by loan paper or accounts receivable originated by banks,
credit card companies or other providers of credit and often enhanced by a bank
letter of credit or by insurance coverage provided by an institution other than
the issuer.
basis point (bp)
One basis point equals 0.01%.
benchmark
A standard by which a fund's performance can be measured. A benchmark is usu-
ally an unmanaged index, such as the Standard & Poor's 500 Stock Index or the
Lehman Brothers Aggregate Bond Index.
commercial mortgage-backed securities (CMBS)
Similar to mortgage-backed securities in that they are securities or certifi-
cates backed by mortgages, except that investors receive payments out of the
interest and principal of commercially-owned real estate, rather than residen-
tial real estate.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes mone-
tary policy and monitors the country's economic state.
government bond
A bond that is issued by the U.S. government or its agencies.
index
A compilation of securities of similar types of companies that is used to meas-
ure 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.
investment-grade bond
A bond that is rated BBB or higher by a credit agency.
mortgage-backed securities (MBS)
Securities or certificates backed by mortgages. Typically issued by institu-
tions such as the Federal National Mortgage Association (FNMA), Government Na-
tional Mortgage Association (GNMA) and the Federal Home Loan Mortgage Corpora-
tion (FHLMC). Investors receive payments out of the interest and principal of
the underlying mortgages.
treasuries
Negotiable U.S. government debt obligations, backed by the full faith and
credit of the U.S. government. Treasuries are issued either as bills, notes or
bonds depending on the maturity. Treasuries are exempt from state and local
taxes.
yield
The rate of return on an asset, usually referring to dividend or interest pay-
ments, expressed as a percentage of current market price.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.23
<PAGE>
ALLIANCE CAPITAL
The Investment Professional's Choice
ALLIANCE CAPITAL
Alliance Capital is a leading global investment manage ment firm with nearly
$388 billion in assets under management. In recognition of our far-reaching in-
vestment capabilities, Alliance Capital has been selected by employee benefit
plans for 29 of the FORTUNE 100 companies and public retirement funds in 33
states as well as by hundreds of foundations, endowments and foreign institu-
tions. 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 282 in-
vestment professionals in 22 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios man-
aged by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
--------------------------------------------------------------------------------
24.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
BOARD OF DIRECTORS
BOARD OF DIRECTORS
John D. Carifa, Chairman
Ruth Block(/1/)
David H. Dievler(/1/)
John H. Dobkin(/1/)
William H. Foulk, Jr.(/1/)
Dr. James M. Hester(/1/)
Clifford L. Michel(/1/)
Donald J. Robinson(/1/)
Robert C. White(/1/)
OFFICERS
Wayne D. Lyski, President
Kathleen A. Corbet, Senior Vice President
Paul J. DeNoon, Vice President
Michael Mon, Vice President
Christian G. Wilson, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Juan J. Rodriguez, Controller
<TABLE>
<S> <C>
Administrator Independent Auditors
Mitchell Hutchins Ernst & Young LLP
Asset Management Inc. 787 Seventh Avenue
51 West 52nd Street New York, NY 10019
New York, NY 10019
Custodian, Dividend Paying Legal Counsel
Agent, Transfer Agent and Seward & Kissel LLP
Registrar One Battery Park Plaza
State Street Bank New York, NY 10004
and Trust Company
225 Franklin Street
Boston, MA 02110
</TABLE>
(1) Member of the Audit Committee.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase from time to time at market
prices shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of ACM Government Spectrum Fund for their information. This fi-
nancial information included herein is taken from the records of the Fund.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.25
<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 Privalization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
ACM Government Spectrum Fund
ACM Government Opportunity Fund
ACM Managed Income Fund
The Southern Africa Fund
The Austria Fund
Alliance World Dollar Government Fund
ACM Managed Dollar Income Fund
The Korean Investment Fund
Alliance World Dollar Government Fund II
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
The Spain Fund
ACM Municipal Securities Income Fund
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Securities Fund
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) 227-4818.
--------------------------------------------------------------------------------
26.ACM GOVERNMENT SPECTRUM FUND
<PAGE>
SUMMARY OF GENERAL INFORMATION
SUMMARY OF GENERAL INFORMATION
ACM Government Spectrum Fund
Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 426-5523. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper Inc., Morningstar, Inc. and Bloomberg. Daily market prices for
the Fund's shares are published in the New York Stock Exchange Composite Trans-
action Section of newspapers under the designation "ACMSP". The Fund's NYSE
trading symbol is "SI". Weekly comparative net asset value (NAV) and market
price information about the Fund is published each Monday in The Wall Street
Journal, each Sunday in The New York Times and each Saturday in Barron's and
other newspapers in a table called "Closed-End Bond Funds."
Dividend Reinvestment Plan
A Dividend Reinvestment Plan is available to shareholders in the Fund, which
provides automatic reinvestment of dividends and capital gain distributions in
additional Fund shares. The Plan also allows you to make optional cash invest-
ments in Fund shares through the Plan Agent. If you wish to participate in the
Plan and your shares are held in your name, simply complete and mail the en-
rollment form in the brochure. If your shares are held in the name of your bro-
kerage firm, bank or other nominee, you should ask them whether or how you can
participate in the Plan.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call State Street
Bank and Trust Company at (800) 219-4218.
--------------------------------------------------------------------------------
ACM GOVERNMENT SPECTRUM FUND.27
<PAGE>
PMT UPDATE
This page intentionally blank
--------------------------------------------------------------------------------
28. ACM GOVERNMENT SPECTRUM FUND
<PAGE>
ACM Government Spectrum Fund
1345 Avenue of the Americas
New York, New York 10105
[LOGO OF ALLIANCE]
(R) These registered
service Marks used
under license from the
owner, Alliance Capital
Management L.P.
SPCSR600
