<PAGE>
LETTER TO SHAREHOLDERS ACM Managed Income Fund
================================================================================
April 11, 1997
Dear Shareholder:
Since our last report dated August 31, 1996, the U.S. bond market posted modest
gains. After rallying late in 1996, the market reversed direction in December
and gave up some of its earlier gains. Data indicating resurgent strength in the
economy, particularly within the labor market, renewed concerns about inflation
and pushed the bond market lower. Fed Chairman Greenspan's Congressional
testimony warning of "irrational exuberance," and hinting at a preemptive rate
hike, added to weakness in the fixed-income market. Overall, mortgages and
corporates were the best performing sectors of the investment grade market
driven by strong investor demand for yield-oriented securities. High yield
securities continued their strong performance, buoyed by the strong economy and
rising corporate profits.
INVESTMENT RESULTS
For the six months ended February 28, 1997, we are pleased to report that ACM
Managed Income Fund returned 12.20% on a net asset value basis. The current
dividend distribution rate is 9.35% based on the February 28, 1997, market price
of $9.625 per share. Over the 12-month period ended February 28, the Fund
achieved a total return of 14.23% on a net asset value basis. Most of your
Fund's strong performance can be attributed to solid returns in the high yield
sector and identification within that sector of credits likely to outperform. By
contrast, over the past six months, the fixed income market as a whole was up
5.38% and government securities were up 4.89%, as measured by the Lehman
Aggregate Index.
ECONOMIC REVIEW
The U.S. economy finished 1996 on a strong note. After moderating in the third
quarter, the economy picked up speed as the year came to a close, led by a
rebound in consumer spending. The annualized gain in retail sales of merchandise
jumped to 4.8% in the fourth quarter, up from only 0.9% in the third quarter. An
unexpected surge in export growth also added to year-end Gross Domestic Product
(GDP) growth. The production side of the economy showed strength, too.
Industrial production grew at an annualized pace of 6.0% and payroll growth
increased to 217,000 new jobs per month, up from third quarter's average of
171,000 new jobs per month. In all, growth in aggregate output (as measured by
GDP), which dipped to 2.1% in the third quarter, accelerated to 3.8% during the
final three months of 1996.
Recently released data indicate that the economic strength at the end of 1996
carried over into 1997, buoyed by continued strength in the labor markets.
Non-farm payrolls grew by a larger-than-expected 293,000 new jobs in February
and the unemployment rate edged down to 5.3%. Retail sales figures remained
strong during the first two months of 1997 and consumer confidence remains
elevated. Overall, GDP growth is likely to be 3% or more in the first quarter.
Inflation news continues to be generally favorable. After moving slightly higher
at the end of 1996, consumer and producer price gains both retreated in early
1997. Through February 1997, consumer prices were up 3.0% compared to February
1996, while producer prices were up just 2.2% for the same period. Nonetheless,
the Federal Reserve raised interest rates 0.25% on March 25, 1997, in a
preemptive strike against what were viewed as mounting inflationary pressures.
INVESTMENT OUTLOOK
Our outlook for the U.S. economy assumes that while economic growth accelerated
at the end of 1996, it will moderate again towards mid-1997. As this occurs,
potential upward pressures on inflation should dissipate. Until clear signs of a
slowing economy emerge, concerns about inflation will keep U.S.
1
<PAGE>
ACM Managed Income Fund
================================================================================
interest rates near the upper end of their recent range. The Fed remains
vigilant against signs of accelerating inflation and additional rate increases
cannot be ruled out. Given the unclear economic outlook, further near-term
weakness in bond prices and higher bond yields cannot be overlooked. However,
such developments would only facilitate the economic slowing we see later in
1997.
Given our forecasted economic and interest rate environment, we do not
anticipate any dramatic changes in portfolio strategy in the near future. We
continue to have a favorable outlook for the high yield market. The growing
economy will provide solid support for this market sector and the higher coupons
available on high yield securities should continue to attract investors and
offset any price weakness the bond market may experience. We have no major
sector themes driving our security selection. We will continue to review each
security using a fundamental, bottom-up approach.
Thank you for your continued interest in ACM Managed Income Fund. We look
forward to reporting its progress and market activity to you in the coming
months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Wayne D. Lyski
Wayne D. Lyski
Senior Vice President
2
<PAGE>
PORTFOLIO OF INVESTMENTS
February 28, 1997 (unaudited) ACM Managed Income Fund
================================================================================
<TABLE>
<CAPTION>
Principal
Amount
(000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS--57.2%
U.S. TREASURY
SECURITIES--51.3%
U.S. Treasury Bonds
6.25%, 8/15/23 .................................. $ 1,250 $ 1,146,484
6.625%, 2/15/27 ................................. 12,000 11,741,244
8.125%, 8/15/19 ................................. 12,500 14,175,775
12.375%, 5/15/04 ................................ 32,300 43,059,937
14.00%, 11/15/11 ................................ 8,700 13,210,402
U.S. Treasury Notes
6.25%, 7/31/98 .................................. 2,600 2,612,186
6.25%, 10/31/01 ................................. 10,000 9,943,750
6.50%, 10/15/06 ................................. 17,600 17,479,000
U.S. Treasury Strips
Zero coupon, 5/15/09 ........................... 2,880 1,264,651
Zero coupon, 5/15/10 ........................... 19,130 7,812,329
Zero coupon, 2/15/11 ........................... 16,500 6,367,845
Zero coupon, 5/15/14 ........................... 65,100 19,768,722
-----------
Total U.S. Treasury Securities
(cost $150,418,898) ............................. 148,582,325
-----------
MORTGAGE RELATED
SECURITY--5.9%
Government National
Mortgage Association
7.50%, 5/15/26
(cost $16,934,051) .............................. 17,074 17,058,392
-----------
Total U.S. Government and
Agency Obligations
(cost $167,352,949) ............................. 165,640,717
-----------
<CAPTION>
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS--43.4%
BASIC INDUSTRIES--1.8%
B3 MAXXAM Group
Holdings, Inc.
12.00%, 8/01/03 ............................. $ 5,000 $ 5,237,500
-----------
BROADCASTING
& CABLE--15.1%
B3 All American
Communications, Inc.
10.875%, 10/15/01 ........................... 2,500 2,581,250
B2 CCPR Services, Inc.
10.00%, 2/01/07(a) .......................... 3,500 3,508,750
B2 Intermedia Capital
Partners
11.25%, 8/01/06 ............................. 3,000 3,195,000
B3 Nextel Communications, Inc.
9.75%, 08/15/04(b) .......................... 8,500 6,311,250
B1 Olympus Communications L.P
10.625%, 11/15/06(a) ........................ 5,000 5,300,000
B3 Optel, Inc.
13.00%, 2/15/05(a) .......................... 5,000 5,037,500
NR RSL Communications, Ltd.
12.25%, 11/15/06(a) ......................... 5,000 5,250,000
TCI Satellite Entertainment, Inc.
NR 10.875%, 2/15/07(a).......................... 3,000 3,045,000
B3 12.25%, 2/15/07(a)(b) ....................... 6,000 3,345,000
B1 Telemundo Group, Inc.
7.00%, 2/15/06(c) ........................... 6,000 6,045,000
-----------
43,618,750
-----------
</TABLE>
3
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) ACM Managed Income Fund
================================================================================
<TABLE>
<CAPTION>
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS--1.1%
B1 Kaiser Aluminum &
Chemical Corp.
10.875%, 10/15/06(a) .......................... $ 3,000 $ 3,247,500
-----------
CONSUMER PRODUCTS
& SERVICES--4.2%
B3 Renaissance Cosmetics, Inc.
11.75%, 2/15/04(a) ........................... 5,000 5,168,750
B3 Riverwood International Corp.
10.25%, 4/01/06 ............................... 3,000 2,887,500
NR Waterford Gaming L.L.C.
12.75%, 11/15/03(a) ........................... 4,000 4,280,000
-----------
12,336,250
-----------
ENERGY--1.3%
B1 National Energy Group, Inc.
10.75%, 11/01/06(a) ........................... 3,500 3,736,250
-----------
INDUSTRIAL--2.1%
B3 Amtrol Acquisition, Inc.
10.625%, 12/31/06 ............................. 4,250 4,473,125
B3 MVE, Inc.
12.50%, 2/15/02 ............................... 1,500 1,593,750
-----------
6,066,875
-----------
LEISURE &
ENTERTAINMENT--1.5%
B2 Alliance Gaming Corp.,
12.875%, 6/30/03 .............................. 4,000 4,390,000
-----------
OIL & GAS--4.0%
Caa Deep Tech
International, Inc.
12.00%, 12/15/00 .............................. 3,500 3,727,500
B2 TransTexas Gas Corp.
11.50%, 6/15/02 ............................... 7,000 7,787,500
-----------
11,515,000
-----------
PLASTICS--2.0%
B3 Crain Industries, Inc.
13.50%, 8/15/05 ............................... 5,000 5,725,000
-----------
TECHNOLOGY--5.1%
Ba1 Advanced Micro Devices, Inc.
11.00%, 8/01/03 ............................... 5,000 5,637,500
<CAPTION>
Shares or
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Unisys Corp.
B1 12.00% 4/15/03
Series B ..................................... $ 7,000 $ 7,647,500
B1 11.75% 10/15/04 ............................... 1,500 1,638,750
------------
14,923,750
------------
TELECOMMUNICATIONS--2.7%
B2 Goss Graphics System, Inc.
12.00%, 10/15/06 .............................. 3,650 3,905,500
B3 Mcleod, Inc.
10.50%, 3/01/07(a)(b) ......................... 2,000 1,205,000
B2 Orion Network Systems, Inc.
11.25%, 1/15/07 ............................... 2,600 2,678,000
------------
7,788,500
------------
TRANSPORTATION--2.5%
Ba3 Continental Airlines, Inc.
9.50%, 12/15/01 ............................... 3,000 3,127,500
B3 Johnstown America
Industries, Inc.
11.75%, 8/15/05 ............................... 4,000 4,020,000
------------
7,147,500
------------
Total Corporate Obligations
(cost $118,628,217) ............................ 125,732,875
------------
YANKEE OBLIGATIONS--5.4%
B1 FSW International Finance
12.50%, 11/01/06(a) ........................... 4,000 4,240,000
B1 Ivaco, Inc.
11.50%, 09/15/05 .............................. 5,000 5,337,500
B2 Tevecap, S.A
12.625%, 11/26/04(a) .......................... 3,000 3,063,750
Ba3 TV Azteca, S.A
10.50%, 2/15/07(a) ........................... 3,000 3,045,000
------------
Total Yankee Obligations
(cost $15,073,743) ........................... 15,686,250
------------
NON-CONVERTIBLE
PREFERRED STOCK--2.1%
Cablevision Systems Corp.
11.125%, Series M (d) ......................... 42,996 3,977,130
International Cable Television
13.00% (d) .................................... 2,000 2,000,000
------------
Total Non-Convertible
Preferred Stock
(cost $5,891,389) ............................ 5,977,130
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) ACM Managed Income Fund
================================================================================
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS &
OTHER INVESTMENTS--0.1%
Eye Care Centers of America,
Inc., Warrants expiring
10/01/01(e)(f) ........................... 3,000 $ 18,000
Pegasus Media &
Communications, Inc. (f) 9,025 107,172
Terex Corp. Rights(f)(g) ................... 20,000 60,000
------------
Total Common Stocks
& Other Investments
(cost $58,653) ............................. 185,172
------------
<CAPTION>
Principal
Amount
(000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT--2.8%
State Street Bank & Trust Co.
5.00%, 3/03/97
(cost $7,973,000) ........................ $ 7,973 $ 7,973,000
------------
TOTAL INVESTMENTS--111.0%
(cost $314,977,951) ........................ 321,195,144
Other assets
less liabilities--(11.0%) ................ (31,783,053)
------------
NET ASSETS--100.0%..... $289,412,091
============
</TABLE>
- --------------------------------------------------------------------------------
(a) 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 February 28,
1997, the market value of these securities aggregated $53,472,500 or 18.5%
of net assets.
(b) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective.
(c) Stated rate in effect until 2/15/99, 10.50% thereafter until maturity.
(d) PIK Preferred, quarterly stock payments.
(e) Each warrant entitles the holder to purchase .4522 shares of common stock.
The warrants are exercisable from 10/01/98 to 10/01/03.
(f) Non-income producing security.
(g) The rights entitle the subscriber to four shares of common stock for each
right.
Glossary of Terms:
NR -- Not rated.
PIK -- Payment in kind.
See notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1997 (unaudited) ACM Managed Income Fund
===========================================================================================================
<S> <C>
ASSETS
Investments in securities, at value (cost $314,977,951) ................................ $321,195,144
Cash ................................................................................... 3,865,031
Receivable for investment securities sold .............................................. 9,222,022
Interest receivable .................................................................... 5,353,807
Prepaid expenses and other assets ...................................................... 44,039
------------
Total assets ........................................................................... 339,680,043
------------
LIABILITIES
Payable for investment securities purchased ............................................ 49,802,324
Advisory fee payable ................................................................... 157,333
Administrative fee payable ............................................................. 48,410
Accrued expenses and other liabilities ................................................. 259,885
------------
Total liabilities ...................................................................... 50,267,952
------------
NET ASSETS ............................................................................... $289,412,091
============
COMPOSITION OF NET ASSETS
Preferred Stock, $.01 par value per share; 1,900 shares Remarketed Preferred
Stock authorized, 950 shares issued and outstanding at $100,000 per share
liquidation preference ................................................................ $ 95,000,000
Common Stock, $.01 par value per share; 299,998,100 shares
authorized, 21,773,629 shares issued and outstanding .................................. 217,736
Additional paid-in capital ............................................................. 195,654,783
Undistributed net investment income .................................................... 1,150,872
Accumulated net realized loss on investment transactions ............................... (8,828,493)
Net unrealized appreciation of investments ............................................. 6,217,193
------------
$289,412,091
============
NET ASSET VALUE PER SHARE OF COMMON STOCK
($289,412,091 less Remarketed Preferred Stock at liquidation
value of $95,000,000 divided by 21,773,629 shares of Common
Stock outstanding) .................................................................... $8.93
=====
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended February 28, 1997 (unaudited) ACM Managed Income Fund
===============================================================================================================
<S> <C> <C>
INVESTMENT INCOME
Interest .......................................................................... $14,085,018
-----------
EXPENSES
Advisory fee ...................................................................... $926,194
Administrative fee ................................................................ 284,982
Remarketed Preferred Stock-remarketing agent's fees ............................... 119,409
Transfer agency ................................................................... 52,577
Audit & legal ..................................................................... 43,021
Custodian ......................................................................... 21,386
Registration fees ................................................................. 16,838
Taxes ............................................................................. 12,969
Reports and notices to shareholders ............................................... 12,895
Directors' fees ................................................................... 12,500
Miscellaneous ..................................................................... 13,764
--------
Total expenses .................................................................... 1,516,535
-----------
Net investment income ............................................................. 12,568,483
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions ...................................... 6,342,444
Net change in unrealized depreciation of investments .............................. 6,550,399
-----------
Net gain on investments ........................................................... 12,892,843
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .......................................... $25,461,326
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
=====================================================================================================================
Six Months Ended Year Ended
February 28, 1997 August 31,
(unaudited) 1996
----------------- -------------
<S> <C> <C>
INCREASE (DECREASE)IN NET ASSETS FROM OPERATIONS
Net investment income ....................................................... $ 12,568,483 $ 25,683,402
------------ ------------
Net realized gain on investment transactions ................................ 6,342,444 1,247,689
Net change in unrealized appreciation (depreciation) of investments ......... 6,550,399 (527,220)
------------ ------------
Net increase in net assets from operations .................................. 25,461,326 26,403,871
DIVIDENDS TO SHAREHOLDERS
Common Stock:
Dividends from net investment income ........................................ (9,740,324) (17,586,112)
Remarketed Preferred Stock:
Dividend from net investment income ......................................... (3,569,767) (4,308,241)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of Common Stock ......... 2,012,929 4,169,410
------------ ------------
Total increase .............................................................. 14,164,164 8,678,928
NET ASSETS:
Beginning of year ........................................................... 275,247,927 266,568,999
------------ ------------
End of period (including undistributed net investment income of $1,150,872
at February 28, 1997 and $1,892,480 at August 31, 1996) .................... $289,412,091 $275,247,927
============ =============
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1997 (unaudited) ACM Managed Income Fund
================================================================================
NOTE A: Significant Accounting Policies
ACM Managed Income Fund (the "Fund") is registered under the Investment Company
Act of 1940 as a non-diversified, closed-end management investment company. The
following is a summary of significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recently quoted bid and asked prices
provided by the principal market makers. Options are valued at market value or
fair value using methods determined by the Board of Directors. Securities for
which market quotations are not readily available and restricted securities
which are subject to limitations as to their resale are valued in good faith at
fair value using methods determined by the Board of Directors. Readily
marketable fixed-income securities are valued on the basis of prices provided by
a pricing service when such prices are believed by the Adviser to reflect the
fair value of such securities. Securities which mature in 60 days or less are
valued at amortized cost, which approximates market value, unless this method
does not represent fair value.
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
investment company taxable income and net realized gains, if applicable, to
shareholders. 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-dividend
date. Investment transactions are accounted for on the date the investments are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend date
and are determined in accordance with income tax regulations.
- --------------------------------------------------------------------------------
NOTE B: Advisory and Administrative Fees
Under the terms of an Investment Advisory Agreement, the Fund pays Alliance
Capital Management L.P., (the "Adviser") an advisory fee equal to an annualized
rate of .65 of 1% of the average adjusted weekly net assets of the Fund during
the month.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Adviser, the Fund
reimburses AFS for costs relating to servicing phone inquiries for the Fund. The
Fund reimbursed AFS $2,915 during the six months ended February 28, 1997.
Under the terms of an Administrative Agreement, the Fund pays Princeton
Administrators, L.P. (the "Administrator") a monthly fee equal to an annualized
rate of .20 of 1% of the Fund's average adjusted weekly net assets. The
Administrator prepares financial and regulatory reports for the Fund and
provides clerical and other services.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) ACM Managed Income Fund
================================================================================
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding U.S. government
securities, short term investments and options) aggregated $279,041,995 and
$293,633,107, respectively, for the six months ended February 28, 1997. There
were purchases of $149,476,765 and sales of $142,976,823 of U.S. government and
government agency obligations for the six months ended February 28, 1997. At
February 28, 1997, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation of investments was $9,698,466 and gross unrealized
depreciation of investments was $3,481,273, resulting in net unrealized
appreciation of $6,217,193.
For federal income tax purposes, the Fund had a capital loss carryforward at
August 31, 1996 of $9,505,219 of which $6,192,707 will expire in 2003 and
$3,312,512 expires in 2004.
Capital losses incurred after October 31 within the fiscal year are deemed to
arise on the first business day of the Fund's next fiscal year. In accordance
with the Internal Revenue Code, the Fund incurred and will elect to defer
long-term capital losses of approximately $1,090,579 until fiscal 1997.
- --------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized.
Common Stock
There are 21,773,629 shares of common stock outstanding at February 28, 1997.
During the six months ended February 28, 1997 and the year ended August 31,
1996, the Fund issued 220,650 and 479,992 shares, respectively, in connection
with the Fund's dividend reinvestment plan.
Preferred Stock
The Fund has issued and outstanding 950 shares of Remarketed Preferred Stock
each at a liquidation value of $100,000 per share. The dividend rate on the
Remarketed Preferred Stock may change generally every 28 days as set by the
remarketing agent.
9
<PAGE>
FINANCIAL HIGHLIGHTS ACM Managed Income Fund
================================================================================
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Six Months
Ended Year Ended August 31,
February 28, 1997 ---------------------------------------------------------------------
(unaudited) 1996 1995 1994 1993 1992
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 8.36 $ 8.14 $ 7.99 $10.79 $ 9.32 $ 8.39
------ ------ ------ ------ ------- -------
Income From Investment Operations
- ---------------------------------
Net investment income ..................... .58 1.20 1.18 1.16 1.18 1.33
Net realized and unrealized gain
(loss) on investments and option
transactions ............................. .60 .04 .30 (1.07) 1.63 .83
------ ------ ------ ------ ------- -------
Net increase in net asset value
from operations .......................... 1.18 1.24 1.48 .09 2.81 2.16
------ ------ ------ ------ ------- -------
Less: Dividends and Distributions
- ---------------------------------
Distributions to common shareholders:
Dividends from net investment income ..... (.45) (.83) (.83) (1.09) (1.08) (.98)
Distributions from net realized gain on
investment transactions ................. -0- -0- -0- (1.48) (.09) -0-
Distributions in excess of net
investment income ....................... -0- -0- (.09) (.09) -0- -0-
Tax return of capital distribution ....... -0- -0- (.16) (.04) -0- -0-
Distributions to preferred shareholders:
Common Stock equivalent of dividends
paid to Remarketed Preferred
shareholders ............................ (.16) (.19) (.25) (.19) (.17) (.24)
------ ------ ------ ------ ------- -------
Total dividends and distributions ......... (.61) (1.02) (1.33) (2.89) (1.34) (1.22)
------ ------ ------ ------ ------- -------
Tender offer costs ........................ -0- -0- -0- -0- -0- (.01)
------ ------ ------ ------ ------- -------
Net asset value, end of period ............ $ 8.93 $ 8.36 $ 8.14 $ 7.99 $ 10.79 $ 9.32
====== ====== ====== ====== ======= =======
Market value, end of period ............... $9.625 $9.500 $9.375 $8.875 $11.375 $10.250
====== ====== ====== ====== ======= =======
Total Return
- ------------
Total investment return based on: (a)
Market value ............................. 6.42% 11.39% 20.63% .66% 24.82% 36.73%
Net asset value .......................... 12.20% 12.89% 16.34% (4.42%) 30.22% 24.10%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (000's omitted) . $289,412 $275,248 $266,569 $258,018 $301,379 $267,580
Ratio of expenses to average net assets (c) 1.07%(b) 1.09% 1.07% 1.14% 1.05% 1.09%
Ratio of net investment income to
average net assets (c) ................... 8.89%(b) 9.30% 9.69% 8.32% 8.06% 9.54%
Portfolio turnover rate ................... 138% 360% 392% 366% 490% 630%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) 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.
(b) Annualized.
(c) The expense ratio and net investment income ratio do not reflect the effect
of dividend payments to preferred shareholders.
10
<PAGE>
ACM Managed Income Fund
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BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block (1)
David H. Dievler (1)
James R. Greene (1)
Donald J. Robinson (1)
Dr. James M. Hester (1)
Clifford L. Michel (1)
Robert C. White (1)
OFFICERS
Wayne D. Lyski, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Paul J. DeNoon, Vice President
Wayne C. Tappe, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Joseph J. Mantineo, Controller
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
COMMON STOCK:
CUSTODIAN, DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
PREFERRED STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
IBJ Schroder Bank & Trust Co.
1 State Street
New York, NY 10004
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
Seward & Kissel
One Battery Park Plaza
New York, NY 10004
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(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 at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of ACM Managed Income Fund for their information. 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.
11
<PAGE>
ACM Managed Income Fund
Summary of General Information
The Fund
ACM Managed Income Fund is a closed-end investment company whose shares trade on
the New York Stock Exchange. The Fund seeks to provide investors with a high
level of total return by seeking both high current income and capital
appreciation. In seeking this objective the Fund will invest primarily in U.S.
Government securities and corporate fixed income securities. In addition, the
Fund may utilize certain other investment techniques, including options and
futures contracts.
Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers. The Fund's NYSE trading
symbol is "AMF". Weekly comparative net asset value (NAV) and market price
information about the Fund is published each Monday in The Wall Street Journal
and each Sunday in The New York Times and other newspapers in a table called
"Closed-End Bond Funds". Additional information about the Fund is available by
calling 800-221-5672.
Dividend Reinvestment Plan
A Dividend Reinvestment Plan provides automatic
reinvestment of dividends and capital gains distributions in additional Fund
shares. A brochure describing the Plan is available from the Plan Agent, State
Street Bank and Trust Company, by calling 1-800-219-4218.
ACM Managed Income Fund
1345 Avenue of the Americas
New York, New York 10105
Alliance Capital [LOGO]
Investing without the Mystery./(SM)/
/(R)/These registered service marks used under license from the owner, Alliance
Capital Management L.P.
MIFSR
================================================================================
ACM
- --------------------------------------------------------------------------------
MANAGED
- --------------------------------------------------------------------------------
INCOME FUND
- --------------------------------------------------------------------------------
Semi-Annual
Report
February 28, 1997
Alliance/(R)/
Investing without the Mystery./(SM)/
