<PAGE>
LETTER TO SHAREHOLDERS ACM Managed Income Fund
================================================================================
April 27, 1998
Dear Shareholder:
We are pleased to provide you with an update on the performance and investment
activity of ACM Managed Income Fund for the semi-annual period ended February
28, 1998.
Since our last report dated August 31, 1997, the U.S. bond market posted solid
returns. Continued low inflation, together with a favorable U.S. budget deficit,
fueled a rally in U.S. Treasuries. In October, financial market turmoil in
Southeast Asia created a ripple effect that spread to other global bond markets
and caused a spike in volatility. As a result, a flight to quality by investors
helped drive U.S. rates lower and temporarily halted the strong performance of
the U.S. high yield sector.
INVESTMENT RESULTS
Over the past six months, ACM Managed Income Fund returned 12.32% on a net asset
value (NAV) basis compared to 5.72% for the Lehman Brothers Aggregate Bond
Index. Over the past 12 months, the Fund achieved a total return of 20.51% at
NAV compared to 10.37% for the benchmark. The Fund's high yield and treasury
holdings performed well during the period under review. Alliance's strong credit
research continues to benefit your Fund, with superior returns generated from
our corporate bond holdings.
================================================================================
INVESTMENT RESULTS*
Periods Ended February 28, 1998
<TABLE>
<CAPTION>
Total Returns
6 Months 12 Months
-------- ---------
<S> <C> <C>
ACM Managed
Income Fund 12.32% 20.51%
Lehman Brothers
Aggregate Bond Index 5.72% 10.37%
</TABLE>
* The Fund's investment results are cumulative total returns for the period and
are based on the net asset value as of February 28, 1998. 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 Lehman Brothers Aggregate Bond Index is composed of the Mortgage Backed and
Asset Backed Securities Indices and the Government/Corporate Bond Index and
includes Treasury issues, agency issues, corporate bond issues and mortgage
backed securities. Returns for the Fund and its comparative index include the
reinvestment of any distributions paid during the period. The index is unmanaged
and reflects no fees or expenses. An investor cannot invest directly in the
index.
================================================================================
ECONOMIC REVIEW
The U.S. economy continued to be fundamentally strong and grew at a solid pace
over the past six months. Total growth, as measured by the Gross Domestic
Product (GDP), accelerated to 3.7% in the fourth quarter, following the third
quarter's 3.1% pace. Overall, GDP growth for 1997 was 3.8%, the strongest growth
recorded since 1988. Continued strength in the labor market fueled economic
growth and pushed the unemployment rate to 4.6% in February, the lowest level in
24 years. To date, the Federal Reserve has made no change in monetary policy
Inflation news continues to be favorable with wage pressures remarkably absent
in such a tight labor market. Through February 1998, consumer prices
1
<PAGE>
ACM Managed Income Fund
================================================================================
increased a modest 1.4% from one year ago, while producer prices were down 1.7%
during the same period.
INVESTMENT OUTLOOK
Our outlook for the U.S. economy remains optimistic. We expect domestic growth
to slow from its 1997 pace to a more sustainable 2.5% rate in 1998. The economic
slowing in Asia will further temper U.S. growth during the year as exports to
that region curtail. Meanwhile, the recent decline in interest rates should
offset the anticipated economic slowdown and provide stimulus to the economy to
ensure domestic demand and continued growth. Inflation will remain subdued due
to the slowing economy, and the strength of the dollar will ensure that imports
remain cheap. The Federal Reserve is unlikely to change monetary policy for
several reasons: the likelihood of slowing growth, the desire to keep global
liquidity at high levels, and the still questionable global economic impact from
the Asian crisis.
We continue to have a favorable outlook for the high yield market. The
combination of moderate growth and low inflation provide an ideal environment
for this portfolio. Investor demand for higher yields should remain strong.
However, as the economy begins to slow, security selection within the high yield
sector will take on added importance. 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>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
February 28, 1998 (unaudited) ACM Managed Income Fund
================================================================================
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT
OBLIGATIONS-59.8%
U.S. TREASURY BONDS-28.4%
6.25%, 8/15/23............................ $ 1,250 $ 1,292,189
6.375%, 8/15/27........................... 8,000 8,480,008
6.625%, 2/15/27........................... 12,000 13,072,512
8.125%, 8/15/19........................... 6,600 8,278,882
12.375%, 5/15/04.......................... 32,300 43,514,172
14.00%, 11/15/11.......................... 8,700 13,536,661
-----------
88,174,424
-----------
U.S. TREASURY NOTES-17.5%
6.25%, 7/31/98............................ 2,600 2,609,753
6.25%, 10/31/01........................... 10,000 10,215,630
6.25%, 2/15/07............................ 17,800 18,478,643
7.00%, 7/15/06............................ 21,400 23,198,948
-----------
54,502,974
-----------
U.S. TREASURY STRIPS-13.9%
Zero coupon, 5/15/09...................... 2,880 1,499,604
Zero coupon, 5/15/10...................... 19,130 9,352,829
Zero coupon, 2/15/11...................... 16,500 7,698,685
Zero coupon, 5/15/14...................... 65,100 24,742,362
-----------
43,293,480
-----------
Total U.S. Government Obligations
(cost $182,179,226)....................... 185,970,878
-----------
CORPORATE
OBLIGATIONS-42.2%
BASIC INDUSTRIES-1.8%
B3 MAXXAM Group
Holdings, Inc.,
12.00%, 8/01/03........................ 5,000 5,475,000
-----------
BROADCASTING
& CABLE-5.2%
Caa American Telecasting,
Inc.,
14.50%, 8/15/05(a)..................... 5,000 1,275,000
B3 LIN Holdings Corp.,
10.00%, 3/01/08(a)(b).................. 5,000 3,112,500
B3 Optel, Inc., Series B,
13.00%, 2/15/05(c)..................... 5,000 5,475,000
B1 Telemundo Group, Inc.,
7.00%, 2/15/06(d)...................... 6,000 6,420,000
-----------
16,282,500
-----------
COMMUNICATIONS-0.5%
NR Focal Communications
Corp.,
12.125%, 2/15/08(a)(b)................. $3,000 $ 1,635,000
-----------
CONSUMER PRODUCTS
& SERVICES-9.3%
B3 Eagle-Picher Ind.,
9.375%, 3/01/08(b)..................... 2,400 2,430,000
B1 Hvide Marine, Inc.,
8.375%, 2/15/08(b)..................... 3,000 2,955,000
B1 International Logistics,
Ltd.,
9.75%, 10/15/07(b)..................... 5,000 5,050,000
B3 Riverwood International
Corp.,
10.625%, 8/01/07....................... 5,000 5,293,750
Caa Riverwood International
Corp.,
10.875%, 4/01/08....................... 4,000 4,020,000
NR Waterford Gaming L.L.C.,
12.75%, 11/15/03....................... 3,784 4,181,320
B3 Zeta Consumer Products,
11.25%, 11/30/07(b).................... 5,000 5,100,000
-----------
29,030,070
-----------
ENERGY-2.9%
B3 Transamerican
Energy, Inc.,
11.50%, 6/15/02........................ 9,000 9,112,500
-----------
FOOD-4.2%
NR Di Giorgio Corp.,
10.00%, 6/15/07........................ 4,000 3,995,000
B3 Iowa Select Farms,
10.75%, 12/01/05(b).................... 4,000 3,940,000
Caa Specialty Foods Corp.,
11.125%, 10/01/02...................... 5,000 5,125,000
-----------
13,060,000
-----------
INDUSTRIAL-3.8%
B2 Anchor Glass Corp.,
11.25%, 4/01/05 (b).................... 2,500 2,762,500
B3 Belden & Blake
Energy Corp.,
9.875%, 6/15/07........................ 4,000 4,020,000
NR GST Equipment Funding
13.25%, 5/01/07........................ 3,000 3,532,500
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (continued) ACM Managed Income Fund
================================================================================
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
B3 MVE, Inc.,
12.50%, 2/15/02....................... $1,500 $ 1,522,500
-----------
11,837,500
-----------
LEISURE &
ENTERTAINMENT-2.8%
B1 Fox Kids Worldwide,
Inc.,
9.25%, 11/01/07(b).................... 4,500 4,466,250
B1 Trump Atlantic City,
11.25%, 5/01/06....................... 4,000 4,140,000
-----------
8,606,250
-----------
METALS/MINERALS-1.6%
B3 Acme Metals, Inc.,
10.875%, 12/15/07(b).................. 5,000 5,075,000
-----------
OIL & GAS-1.2%
Caa DeepTech
International, Inc.,
12.00%, 12/15/00...................... 3,500 3,736,250
-----------
PLASTICS-1.9%
NR Foamex LP,
13.50%, 8/15/05....................... 5,000 5,775,000
-----------
SUPERMARKETS-1.0%
B3 The Pantry, Inc.,
10.25%, 10/15/07...................... 3,000 3,112,500
-----------
TELECOMMUNICATIONS-6.0%
B3 Iridium L.L.C.
Capital Corp.,
14.00%, 7/15/05....................... 5,000 5,712,500
B2 Orion Network
Systems, Inc.,
11.25%, 1/15/07....................... 4,950 5,766,750
NR Telegroup, Inc.,
10.50%, 11/01/04(a)(b)................ 5,000 4,125,000
B3 United International
Holdings,
10.75%, 2/15/08(a)(b)................. 5,000 3,056,250
-----------
18,660,500
-----------
Total Corporate Obligations
(cost $125,450,996)...................... 131,398,070
-----------
<CAPTION>
Shares or
Moody's Principal
Investor Amount
Ratings (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
YANKEE OBLIGATIONS-6.8%
B1 Centaur Mining &
Exploration,
11.00%, 12/01/07(b)................... $ 3,000 $ 3,052,500
B1 Central European Media
Entertainment, Class A,
9.375%, 8/15/04......... ............. . 3,000 3,000,000
Ba1 Glencore Nickel
Property Ltd.,
9.00%, 12/01/14(b).................... 5,000 4,925,000
Caa Ionica PLC,
15.00%, 5/01/07(a).................... 7,500 2,962,500
B3 Panoceanic Bulk
Carriers,
12.00%, 12/15/07(b)................... 4,200 4,011,000
NR Trench Electric &
Trench, Inc.,
10.25%, 12/15/07(b)................... 3,000 3,105,000
-----------
Total Yankee Obligations
(cost $21,791,868)....................... 21,056,000
-----------
NON-CONVERTIBLE
PREFERRED STOCKS-1.4%
Caa Eagle-Picher Holdings,
11.75%(a)(b).......................... 200 1,145,000
Caa Nextel Communications,
Inc.,
11.125%(b)(e)......................... 3,000 3,082,500
-----------
Total Non-Convertible
Preferred Stocks
(cost $4,127,540)........................ 4,227,500
-----------
COMMON STOCKS &
OTHER INVESTMENTS-0.1%
Eye Care Centers of
America, Inc.,
Warrants, expiring
10/01/03(f)(g)........................ 3,000 13,500
Microcell
Telecommunications,
Inc., Warrants, expiring
6/01/06(g)(h)......................... 12,000 183,480
Orion Network Systems,
Inc., Warrants, expiring
1/15/07(g)(i)......................... 4,950 61,875
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (continued) ACM Managed Income Fund
================================================================================
Shares or
Principal
Amount
(000) Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Pegasus Media &
Communications,
Inc.(g)............................ 9,025 $190,089
------------
Total Common Stocks
& Other Investments
(cost $235,653)....................... 448,944
------------
TIME DEPOSIT--2.2%
State Street Bank & Trust Co.,
5.25%, 3/02/98
(cost $6,734,000).................. $6,734 6,734,000
------------
TOTAL INVESTMENTS--112.5%
(cost $340,519,283)................... $349,835,392
Other assets
less liabilties - (12.5%)............. (38,749,469)
------------
NET ASSETS--100.0%...................... $311,085,923
============
</TABLE>
- --------------------------------------------------------------------------------
(a) 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.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1998, the market value of these securities aggregated $63,028,500 or 20.3%
of net assets.
(c) Consists of $5,000,000 senior notes and 5,000 shares of common stock.
(d) Stated rate in effect until 2/15/99, thereafter, 10.50% until maturity.
(e) PIK Preferred, quarterly stock payments.
(f) Each warrant entitles the holder to purchase .4522 shares of Common Stock.
The warrants are exercisable from 10/01/98 to 10/01/03.
(g) Non-income producing security.
(h) Each warrant entitles the holder to purchase 3.072 shares of Common Stock.
The warrants are exercisable from 6/13/96 to 6/01/06.
(i) Each warrant entitles the holder to purchase .8463 shares of Common Stock.
The warrants are exercisable from 1/28/97 to 1/15/07.
Glossary:
NR - Not Rated.
PIK - Payment in Kind.
See notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998 (unaudited) ACM Managed Income Fund
=============================================================================================
<S> <C>
ASSETS
Investments in securities, at value (cost $340,519,283) .................... $349,835,392
Cash ....................................................................... 316
Receivable for investment securities sold .................................. 9,741,575
Interest receivable ........................................................ 5,104,726
Prepaid expenses ........................................................... 30,115
------------
Total assets ............................................................... 364,712,124
------------
LIABILITIES
Payable for investment securities purchased ................................ 53,190,204
Advisory fee payable ....................................................... 168,682
Administrative fee payable ................................................. 51,902
Accrued expenses and other liabilities ..................................... 215,413
------------
Total liabilities .......................................................... 53,626,201
------------
NET ASSETS ................................................................... $311,085,923
============
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, 22,218,360 shares issued and outstanding ...................... 222,184
Additional paid-in capital ................................................. 199,888,058
Undistributed net investment income ........................................ 2,709,834
Accumulated net realized gain on investment transactions ................... 3,949,738
Net unrealized appreciation of investments ................................. 9,316,109
------------
$311,085,923
============
NET ASSET VALUE PER SHARE OF COMMON STOCK
($311,085,923 less Remarketed Preferred Stock at liquidation
value of $95,000,000 divided by 22,218,360 shares of Common
Stock outstanding) ........................................................ $ 9.73
============
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended February 28, 1998 (unaudited) ACM Managed Income Fund
===========================================================================================================
<S> <C> <C>
INVESTMENT INCOME
Interest .................................................... $15,274,701
EXPENSES
Advisory fees ............................................... $ 992,471
Administrative fee .......................................... 305,375
Remarketed Preferred Stock-remarketing agent's fees ......... 122,202
Audit & legal ............................................... 34,216
Reports and notices to shareholders ......................... 28,563
Transfer agency ............................................. 23,705
Directors' fees and expenses ................................ 18,712
Custodian ................................................... 18,445
Registration fees ........................................... 17,927
Taxes ....................................................... 11,059
Miscellaneous ............................................... 9,703
-----------
Total expenses .............................................. 1,582,378
-----------
Net investment income ....................................... 13,692,323
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions ................ 8,867,860
Net change in unrealized appreciation of investments ........ 4,372,162
-----------
Net gain on investments ..................................... 13,240,022
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .................... $26,932,345
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
==========================================================================================================
Six Months Ended Year Ended
February 28, 1998 August 31,
(unaudited) 1997
----------------- -----------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income ............................................... $ 13,692,323 $ 26,388,799
Net realized gain on investment transactions ........................ 8,867,860 10,751,417
Net change in unrealized appreciation of investments ................ 4,372,162 5,277,153
------------ ------------
Net increase in net assets from operations .......................... 26,932,345 42,417,369
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Common Stock:
Dividends from net investment income ................................ (10,818,935) (19,578,018)
Remarketed Preferred Stock:
Dividends from net investment income ................................ (2,502,186) (6,400,824)
Realized Capital Gains:
Distributions from net realized gain on investments ................. (462,407) -0-
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of Common Stock . 2,262,658 3,987,994
------------ ------------
Total increase ...................................................... 15,411,475 20,426,521
NET ASSETS
Beginning of year ................................................... 295,674,448 275,247,927
------------ ------------
End of period (including undistributed net investment income of
$2,709,834 and $2,338,632, respectively) ........................... $311,085,923 $295,674,448
============ ============
- ----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1998 (unaudited) ACM Managed Income Fund
================================================================================
NOTE A: Significant Accounting Policies
ACM Managed Income Fund, Inc., (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 or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are generally
valued at the last reported sale price or, if 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, and securities listed on a
foreign securities market whose operations are similar to the United States
over-the-counter market and securities listed on a national securities exchange
whose primary market is believed to be over-the-counter are valued at the mean
of the 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 determined 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 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.
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 substantially 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.
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.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) ACM Managed Income Fund
================================================================================
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 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 Adviser, the Fund reimburses AFS for
costs relating to servicing phone inquiries for the Fund. The Fund reimbursed
AFS $1,400 during the period ended February 28, 1998.
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 certain financial and regulatory reports for the Fund and
provides clerical and other services.
- --------------------------------------------------------------------------------
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding U.S. government
securities, short term investments and options) aggregated $162,892,265 and
$162,219,523 respectively, for the six months ended February 28, 1998. There
were purchases of $118,765,601 and sales of $117,333,737 of U.S. government and
government agency obligations for the six months ended February 28, 1998. At
February 28, 1998, 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 $13,011,445 and gross unrealized
depreciation of investments was $3,695,336, resulting in net unrealized
appreciation of $9,316,109.
For federal income tax purposes, the Fund had a capital loss carryforward at
August 31, 1997 of $1,012,778 which will expire in 2004.
- --------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized.
Common Stock
There are 22,218,360 shares of common stock outstanding at February 28, 1998.
During the six months ended February 28, 1998 and for the year ended August 31,
1997, the Fund issued 232,285 and 433,096 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. The dividend rate on the on the Remarketed Preferred Stock is
5.57% and is effective through March 4, 1998.
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, 1998 --------------------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993
----------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $ 9.13 $ 8.36 $ 8.14 $ 7.99 $ 10.79 $ 9.32
--------- --------- --------- --------- --------- ---------
Income From Investment Operations
Net investment income ..................... .61 1.20 1.20 1.18 1.16 1.18
Net realized and unrealized gain
(loss) on investments and option
transactions ............................. .61 .76 .04 .30 (1.07) 1.63
--------- --------- --------- --------- --------- ---------
Net increase in net asset value
from operations .......................... 1.22 1.96 1.24 1.48 .09 2.81
--------- --------- --------- --------- --------- ---------
Less: Dividends and Distributions
Distributions to common shareholders:
Dividends from net investment income ..... (.49) (.90) (.83) (.83) (1.09) (1.08)
Distributions from net realized gains .... (.02) -0- -0- -0- (1.48) (.09)
Distributions in excess of net
investment income ....................... -0- -0- -0- (.09) (.09) -0-
Tax return of capital distribution ....... -0- -0- -0- (.16) (.04) -0-
Distributions to preferred shareholders:
Common Stock equivalent of dividends
paid to Remarketed Preferred
shareholders ............................ (.11) (.29) (.19) (.25) (.19) (.17)
--------- --------- --------- --------- --------- ---------
Total dividends and distributions ......... (.62) (1.19) (1.02) (1.33) (2.89) (1.34)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period ............ $ 9.73 $ 9.13 $ 8.36 $ 8.14 $ 7.99 $ 10.79
========= ========= ========= ========= ========= =========
Market value, end of period ............... $ 10.375 $ 10.000 $ 9.500 $ 9.375 $ 8.875 $ 11.375
========= ========= ========= ========= ========= =========
Total Return
Total investment return based on: (a)
Market value ............................. 9.34% 16.03% 11.39% 20.63% .66% 24.82%
Net asset value .......................... 12.32% 20.38% 12.89% 16.34% (4.42%) 30.22%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) . $ 311,086 $ 295,674 $ 275,248 $ 266,569 $ 258,018 $ 301,379
Ratio of expenses to average net assets (b) 1.04%(c) 1.05% 1.09% 1.07% 1.14% 1.05%
Ratio of net investment income to
average net assets (b) ................... 8.97%(c) 9.21% 9.30% 9.69% 8.32% 8.06%
Portfolio turnover rate ................... 84% 253% 360% 392% 366% 490%
- ------------------------------------------------------------------------------------------------------------------------------------
</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) The expense ratio and net investment income ratio do not reflect the effect
of dividend payments to preferred shareholders.
(c) Annualized.
10
<PAGE>
ACM Managed Income Fund
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BOARD OF DIRECTORS
John D. Carifa, Chairman and President William H. Foulk, Jr. (1)
Ruth Block (1) Donald J. Robinson (1)
David H. Dievler (1) Dr. James M. Hester (1)
John H. Dobkin (1) Clifford L. Michel (1)
Robert C. White (1)
OFFICERS
Wayne D. Lyski, Senior Vice President Edmund P. Bergan, Jr., Secretary
Kathleen A. Corbet, Senior Vice President Mark D. Gersten, Treasurer & Chief
Paul J. DeNoon, Vice President Financial Officer
Wayne C. Tappe, Vice President Juan J. Rodriguez, Controller
Christian G. Wilson, Vice President
ADMINISTRATOR PREFERRED STOCK:
Princeton Administrators, L.P. DIVIDEND PAYING AGENT,
P.O. Box 9095 TRANSFER AGENT AND REGISTRAR
Princeton, NJ 08543-9095 IBJ Schroder Bank & Trust Co.
1 State Street
New York, NY 10004
COMMON STOCK: INDEPENDENT AUDITORS
CUSTODIAN, DIVIDEND PAYING AGENT, Ernst & Young LLP
TRANSFER AGENT AND REGISTRAR 787 Seventh Avenue
State Street Bank and Trust Company New York, NY 10019
225 Franklin Street
Boston, MA 02110
LEGAL COUNSEL
Seward &Kissel
One Battery Park Plaza
New York, NY 10004
- --------------------------------------------------------------------------------
(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".
Dividend Reinvestment Plan
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains distribution in additional Fund shares.
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 1-800-219-4218.
ACM Managed Income Fund
1345 Avenue of the Americas
New York, New York 10105
Alliance Capital [LOGO](R)
(R)These registered service marks used under license from the owner, Alliance
Capital Management L.P.
MIFSR
================================================================================
ACM
--------------------------
MANAGED
--------------------------
INCOME FUND
--------------------------
Semi-Annual
February 28, 1998
Alliance(R)
================================================================================
