ALLIANCE PREMIER GROWTH FUND
SEMI-ANNUAL REPORT
MAY 31, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
June 24, 1997
Dear Shareholder:
We are pleased to provide you with Alliance Premier Growth Fund investment
results and market activity for the period ended May 31, 1997.
INVESTMENT RESULTS
The semi-annual reporting period for Alliance Premier Growth Fund ended on May
31, 1997. The Fund's performance numbers for the previous six and twelve month
periods are shown together with index performance for the Fund's benchmarks,
the S&P 500 Stock Index and the Russell 1000 Growth Stock Index. As you can see
from the following table, your Fund's Class A shares outperformed both indices
for both the six and twelve month periods.
INVESTMENT RESULTS*
Period Ended May 31, 1997
TOTAL RETURN
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE PREMIER GROWTH FUND
Class A 15.70% 29.61%
Class B 15.29% 28.74%
Class C 15.33% 28.76%
S&P 500 STOCK INDEX 13.18% 29.44%
RUSSELL 1000 GROWTH STOCK INDEX 12.70% 26.46%
* TOTAL RETURNS ARE BASED ON NET ASSET VALUE OF EACH CLASS OF SHARES AS OF MAY
31, 1997. TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT
EXPENSES ASSOCIATED WITH THAT CLASS. THE UNMANAGED S&P 500 STOCK INDEX INCLUDES
500 U.S. STOCKS AND IS A COMMON MEASURE OF THE PERFORMANCE OF THE OVERALL U.S.
STOCK MARKET. THE UNMANAGED RUSSELL 1000 GROWTH STOCK INDEX REPRESENTS THE
PERFORMANCE OF 1000 OF THE LARGEST U.S. COMPANIES BY MARKET CAPITALIZATION.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
ECONOMIC REVIEW
We have been consistently bullish over the last several years based on our
belief that the broad economic framework provided an excellent backdrop for
equity investing. The economy has found a steady balance with moderate growth
and moderate inflation. At the same time, U.S. corporate earnings, based on
worldwide technology leadership and the benefits of several years of cost
cutting, have advanced and balance sheets are in excellent shape to promote
further growth. As we look around the world, we also see that many U.S.
companies are in a preeminent position to capitalize on global demand growth
with large companies such as Coca-Cola, Intel, Merck, etc. deriving between
40-60% or more of their profits from overseas. This has led to an improved
return on equity for the large U.S. growth companies from a historic range of
13-14% to the current level of about 20%.
Having said this, we recognize that equity prices have risen to new heights.
Based on price earnings multiples experienced in the post World War II period,
at 20x earnings, the market leaves little room for error. Judging by the same
historic yardsticks, equities are probably 10% or more overvalued versus the
bond equivalent. Even so, we are not inclined to move into the bearish camp.
Rather, we would prefer to be thought of as cautious bulls. The fundamentals
are clearly better today than they have been at any time over the last 50
years. The Cold War is over, and there is tremendous world momentum towards
democratic/capitalist policies. This represents a great opportunity for
well-run companies and enables governments to engineer middle of the road
monetary, fiscal and political solutions.
FUND STRATEGY
Alliance Premier Growth Fund seeks long term growth by investing in many of the
premier U.S. companies that have world leadership positions and are structured
to participate in this good environment.
In seeking to achieve our goal, we have tried to keep our portfolio-weighted
price earnings multiple reasonable by balancing our exposure to high technology
on the one hand with an equal exposure to lower valued stocks in the financial
area on the other.
Thus far in 1997, we have benefited from the general rising market and have
suffered very few individual stock reverses. It is our expectation, however,
that the market will become increasingly volatile in the months ahead and it
will be incumbent on us to continue to take profits during bouts of euphoria
and utilize periods of temporary
1
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
weakness to capitalize on attractive price opportunities. Although it is over a
half year since Alan Greenspan spoke about "irrational exuberance," we think it
was a healthy warning and should not be forgotten by those of us managing
money. We should remember there is always a difference between soundly based
stock appreciation and that which is more speculative in nature.
We thank you for your continued interest and investment in the Alliance Premier
Growth Fund and look forward to reporting our progress to you for the full year.
Sincerely,
John D. Carifa
Chairman and President
Alfred Harrison
Executive Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
Alliance Premier Growth Fund is an open-end, diversified investment company
that seeks long-term growth of capital by investing in the common stocks of a
limited number of large, carefully selected, high-quality U.S. companies that
are judged likely to achieve superior earnings growth. Normally, about 40
companies will be represented in the portfolio, with the 25 most highly
regarded of these usually constituting 70% of the Fund's net assets.
INVESTMENT RESULTS
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURNS AS OF MAY 31, 1997.
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 29.61% 24.12%
Since Inception* 20.70% 19.59%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 28.74% 24.74%
Since Inception* 19.98% 19.98%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 28.76% 27.76%
Since Inception* 21.76% 21.76%
Average annual total returns reflect reinvestment of dividends and/or capital
gain distributions in additional shares, with and without the effect of the
4.25% maximum front-end sales charge for Class A shares or applicable
contingent deferred sales charge for Class B shares (4% year 1, 3% year 2, 2%
year 3, 1% year 4); and for Class C shares (1% year 1). Returns for Class A
shares do not reflect the imposition of the 1 year 1% contingent deferred sales
charge for accounts over $1,000,000. Total return for Advisor Class shares will
differ due to different expenses associated with that class.
Past performance does not guarantee future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 9/28/92, Class A and Class B; 5/3/93, Class C.
3
TEN LARGEST HOLDINGS
MAY 31, 1997 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Intel Corp. warrants, expiring 3/14/98 $ 59,805,000 6.7%
Philip Morris Cos., Inc. 58,317,600 6.5
MBNA Corp. 46,920,262 5.3
UAL Corp. 44,233,800 5.0
Microsoft Corp. 39,332,800 4.4
Cisco Systems, Inc. 32,736,800 3.7
AirTouch Communications, Inc. 31,877,850 3.6
Home Depot, Inc. 29,446,200 3.3
Merrill Lynch & Co., Inc. 29,277,200 3.3
Morgan Stanley Group, Inc. 28,073,250 3.1
$400,020,762 44.9%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
_______________________________________________________________________________
SHARES
PURCHASES BOUGHT HOLDINGS 5/31/97
- -------------------------------------------------------------------------------
Gillette Co. 118,700 118,700
Home Depot, Inc. 293,700 467,400
MBNA Corp. 788,400 1,385,100
Merck & Co., Inc. 141,900 301,200
Morgan Stanley Group, Inc. 202,200 415,900
Nike, Inc. 254,800 254,800
Nokia Corp. (ADR) 362,300 362,300
Seagate Technology, Inc. 367,200 367,200
Tyco International, Ltd. 185,400 185,400
UAL Corp. 205,700 567,100
SALES SOLD HOLDINGS 5/31/97
- -------------------------------------------------------------------------------
Amgen, Inc. 152,800 69,500
Boeing Co. 77,400 -0-
Campbell Soup Co. 109,400 -0-
Chrysler Corp. 625,000 -0-
General Motors Corp. 184,500 -0-
Hewlett-Packard Co. 142,100 -0-
Intel Corp. 83,200 -0-
Norwest Corp. 221,200 -0-
PepsiCo, Inc. 177,900 -0-
Wal-Mart Stores, Inc. 205,900 83,100
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-97.1%
CONSUMER PRODUCTS & SERVICES-43.0%
AIRLINES-7.7%
KLM Royal Dutch Air 184,782 $ 5,427,971
Northwest Airlines Corp. Cl.A (a) 450,200 18,627,025
UAL Corp. (a) 567,100 44,233,800
------------
68,288,796
APPAREL & TEXTILE-1.6%
Nike, Inc. 254,800 14,523,600
BIOTECHNOLOGY-0.5%
Amgen, Inc. (a) 69,500 4,647,813
BROADCASTING & CABLE-4.4%
AirTouch Communications, Inc. (a) 1,143,600 31,877,850
Cox Communications, Inc. Cl.A (a) 125,100 2,736,563
Tele-Communications - Liberty Media Group
Series A (a) 215,375 4,697,867
------------
39,312,280
COSMETICS-1.2%
Gillette Co. 118,700 10,549,462
DRUGS, HOSPITAL SUPPLIES &
MEDICAL SERVICES-11.5%
Columbia/HCA Healthcare Corp. 363,450 13,311,356
Johnson & Johnson 77,000 4,610,375
Medtronic, Inc. 126,300 9,346,200
Merck & Co., Inc. 301,200 27,070,350
Oxford Health Plans, Inc. (a) 65,800 4,638,900
Pfizer, Inc. 266,400 27,405,900
United Healthcare Corp. 282,800 15,978,200
------------
102,361,281
ENTERTAINMENT & LEISURE-1.0%
Walt Disney Co. 114,400 9,366,500
FOOD, BEVERAGES & TOBACCO-7.6%
Coca-Cola Co. 132,200 9,022,650
Philip Morris Cos., Inc. 1,325,400 58,317,600
------------
67,340,250
RESTAURANTS & LODGING-0.5%
Marriot International, Inc. 74,800 4,319,700
RETAILING-7.0%
Home Depot, Inc. 467,400 29,446,200
Kohl's Corp. (a) 185,200 9,977,650
Sears, Roebuck & Co. 412,400 20,259,150
Wal-Mart Stores, Inc. 83,100 2,472,225
------------
62,155,225
------------
382,864,907
TECHNOLOGY-29.9%
COMMUNICATIONS EQUIPMENT-6.9%
Ascend Communications, Inc. (a) 125,000 6,968,750
Ericsson (L.M.) Telephone Co.
Cl.B (ADR) (b) 288,690 10,284,581
Lucent Technologies, Inc. 46,500 2,958,562
Nokia Corp. (ADR) (c) 362,300 23,911,800
WorldCom, Inc. (a) 574,190 17,010,379
------------
61,134,072
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMPUTER HARDWARE-5.5%
COMPAQ Computer Corp. (a) 241,800 $ 26,174,850
Dell Computer Corp. (a) 201,300 22,646,250
------------
48,821,100
COMPUTER PERIPHERALS-1.7%
Seagate Technology, Inc. (a) 367,200 14,917,500
COMPUTER SOFTWARE & SERVICES-5.4%
First Data Corp. 222,400 8,896,000
Microsoft Corp. (a) 317,200 39,332,800
------------
48,228,800
NETWORK SOFTWARE-3.7%
Cisco Systems, Inc. (a) 483,200 32,736,800
SEMI-CONDUCTORS & RELATED-6.7%
Intel Corp. warrants,
expiring 3/14/98 (a) 540,000 59,805,000
------------
265,643,272
FINANCIAL SERVICES-20.4%
BANKING & CREDIT-9.1%
Citicorp 125,200 14,319,750
Household International, Inc. 182,300 17,910,975
MBNA Corp. 1,385,100 46,920,262
United States Bancorp 27,700 1,700,088
------------
80,851,075
BROKERAGE & MONEY MANAGEMENT-6.4%
Merrill Lynch & Co., Inc. 276,200 29,277,200
Morgan Stanley Group, Inc. 415,900 28,073,250
------------
57,350,450
INSURANCE-2.4%
American International Group, Inc. 79,350 10,742,006
MGIC Investment Corp. 74,600 6,639,400
Progressive Corp. 44,900 3,552,713
------------
20,934,119
MORTGAGE BANKING-2.5%
Federal Home Loan Mortgage Corp. 315,000 10,395,000
Federal National Mortgage Assn. 273,100 11,913,987
------------
22,308,987
------------
181,444,631
BASIC INDUSTRIES-2.0%
OIL & GAS-2.0%
Baker Hughes, Inc. 108,700 4,076,250
British Petroleum Co. Plc (d) 48,000 6,954,000
Schlumberger, Ltd. 57,300 6,825,863
------------
17,856,113
DIVERSIFIED-1.3%
Tyco International, Ltd. 185,400 11,772,900
CAPITAL GOODS-0.5%
ELECTRICAL EQUIPMENT-0.5%
General Electric Co. 75,000 4,528,125
Total Common Stocks (cost $652,962,359) 864,109,948
6
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-2.7%
COMMERCIAL PAPER-2.7%
General Electric Capital Corp. 5.65%,
6/02/97 (amortized cost $24,326,182) $24,330 $ 24,326,182
TOTAL INVESTMENTS-99.8%
(cost $677,288,541) $888,436,130
Other assets less liabilities-0.2% 2,101,327
NET ASSETS-100% $890,537,457
(a) Non-income producing security.
(b) Country of origin--Sweden.
(c) Country of origin--Finland.
(d) Country of origin--United Kingdom.
Glossary:
ADR - American depository receipt
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $677,288,541) $888,436,130
Cash 365
Receivable for capital stock sold 6,192,871
Dividends receivable 243,000
Deferred organization expenses 16,500
Prepaid expenses 23,478
Total assets 894,912,344
LIABILITIES
Payable for investment securities purchased 1,810,323
Payable for capital stock redeemed 1,110,202
Advisory fee payable 714,145
Distribution fee payable 571,025
Accrued expenses and other liabilities 169,192
Total liabilities 4,374,887
NET ASSETS $890,537,457
COMPOSITION OF NET ASSETS
Capital stock, at par $ 46,676
Additional paid-in capital 637,210,497
Accumulated net investment loss (3,098,586)
Accumulated net realized gain on investments 45,231,281
Net unrealized appreciation of investments 211,147,589
$890,537,457
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share ($215,463,644/
11,045,062 shares of capital stock issued and outstanding) $19.51
Sales charge--4.25% of public offering price .87
Maximum offering price $20.38
CLASS B SHARES
Net asset value and offering price per share ($550,297,122/
29,097,399 shares of capital stock issued and outstanding) $18.91
CLASS C SHARES
Net asset value and offering price per share ($91,551,362/
4,834,077 shares of capital stock issued and outstanding) $18.94
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($33,225,329 / 1,699,377 shares of capital stock issued
and outstanding) $19.55
See notes to financial statements.
8
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $64,669) $3,753,443
Interest 584,382 $ 4,337,825
EXPENSES
Advisory fee 3,609,151
Distribution fee - Class A 304,777
Distribution fee - Class B 2,258,238
Distribution fee - Class C 350,625
Transfer agency 496,763
Registration 90,125
Custodian 79,155
Administrative 67,500
Printing 49,873
Audit and legal 47,885
Amortization of organization expenses 31,690
Directors' fees 14,000
Taxes 12,827
Miscellaneous 23,802
Total expenses 7,436,411
Net investment loss (3,098,586)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 45,823,328
Net change in unrealized appreciation of investments 67,594,524
Net gain on investments 113,417,852
NET INCREASE IN NET ASSETS FROM OPERATIONS $110,319,266
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996
--------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (3,098,586) $ (3,627,229)
Net realized gain on investment transactions 45,823,328 41,215,867
Net change in unrealized appreciation
of investments 67,594,524 83,009,880
Net increase in net assets from operations 110,319,266 120,598,518
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (10,426,404) (5,922,043)
Class B (25,045,493) (19,710,627)
Class C (3,698,397) (1,909,603)
Advisor Class (115,497) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 180,381,012 214,933,808
Total increase 251,414,487 307,990,053
NET ASSETS
Beginning of year 639,122,970 331,132,917
End of period $890,537,457 $639,122,970
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Premier Growth Fund, Inc. (the "Fund"), organized as a Maryland
corporation on July 9, 1992, is registered under the Investment Company Act of
1940 as a diversified, open-end management investment company. The Fund offers
Class A, Class B, Class C and Advisor Class shares. Class A shares are sold
with a front-end sales charge of up to 4.25% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase will be subject to a contingent deferred
sales charge of 1%. Class B shares are currently sold with a contingent
deferred sales charge which declines from 4% to zero depending on the period of
time the shares are held. Class B shares will automatically convert to Class A
shares six years after the end of the calendar month of purchase. Class C
shares purchased on or after July 1, 1996, are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
Advisor Class shares are sold without an initial or contingent deferred sales
charge and are not subject to ongoing distribution expenses. Advisor Class
shares are offered to investors participating in fee-based programs and to
certain retirement plan accounts. All four classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. The following is
a summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Securities traded on national securities exchanges are valued at the last
reported sales price, or, if no sale occurred, at the mean of the bid and asked
price at the close of such exchange. Over-the-counter securities not traded on
national securities exchanges are valued at the closing bid price. Debt
securities are valued at the mean of the bid and asked price except that debt
securities maturing within 60 days are valued at amortized cost which
approximates market value. Securities for which current market quotations are
not readily available (including investments which are subject to limitations
as to their sale) are valued at their fair value as determined in good faith by
the Board of Directors.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $316,110 have been deferred and are
being amortized on a straight-line basis through September, 1997.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Investment transactions are accounted for on the trade date and dividend income
is recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. The Fund accretes discount on debt securities owned. Investment gains
and losses are determined on the identified cost basis.
4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
For federal income tax purposes, the Fund's distributions of income and capital
gains are subject to recharacterization, which may include a tax return of
capital, at the end of the year to reflect the final investment results for
that year.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P., (the "Adviser") an advisory fee at an annual rate of
1% of the average daily net assets of the Fund. Such fee is accrued daily and
paid monthly.
Pursuant to the advisory agreement, the Fund paid $67,500 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
the Adviser for the six months ended May 31, 1997. The Fund compensates
Alliance Fund Services, Inc. (a wholly-owned subsidiary of the Adviser) under a
Transfer Agency Agreement for providing personnel and facilities to perform
transfer agency services for the Fund. Such compensation amounted to $342,097
for the six months ended May 31, 1997.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $64,376 from the sale of Class A shares and $228,
$297,940 and $14,996 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended May 31, 1997.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1997, amounted to $657,119, none of which was paid to brokers utilizing
the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser nor to DLJ directly.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .50 of 1% of the average daily net assets attributable to the
Class A shares and 1% of the average daily net assets attributable to the Class
B and Class C shares. There is no distribution fee on the Advisor Class shares.
Such fee is accrued daily and paid monthly. The Agreement provides that the
Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has incurred expenses in
excess of the distribution costs reimbursed by the Fund in the amount of
$12,185,741 and $834,524, for Class B and C shares, respectively; such costs
may be recovered from the Fund in future periods so long as the Agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs, incurred by the Distributor, beyond the
current fiscal year for Class A shares. The Agreement also provides that the
Adviser may use its own resources to finance the distribution of the Fund's
shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $475,937,922 and $335,355,859,
respectively, for the six months ended May 31, 1997. There were no purchases or
sales of U.S. government or government agency obligations for the six months
ended May 31, 1997.
At May 31, 1997 the cost of investments for federal income tax purposes was
$678,850,573. Accordingly, gross unrealized appreciation of investments was
$213,758,159 and gross unrealized depreciation of investments was $4,172,602
resulting in net unrealized appreciation of $209,585,557.
NOTE E:ACQUISITION OF ALLIANCE COUNTERPOINT FUND
On March 22, 1996, the Fund acquired all of the assets and certain liabilities
of Alliance Counterpoint Fund ("Counterpoint") pursuant to a plan of
acquisition approved by the shareholders of the Fund on February 29, 1996. The
acquisition was accomplished by a tax-free exchange of 2,527,242 shares of the
Fund for 2,310,177 shares of Counterpoint on March 22, 1996. The aggregate net
assets of the Fund and Counterpoint immediately before the acquisition were
$417,543,018 and $38,613,769 respectively. Of Counterpoint's total net assets
of $38,613,769, $16,595,716 was related to unrealized appreciation of
investment transactions. Immediately after the acquisition, the combined net
assets of the Fund amounted to $456,156,787.
12
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 12,000,000,000 shares of $0.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each Class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 2,718,134 4,320,321 $ 48,130,061 $ 66,548,324
Shares issued in
reinvestment of
distributions 537,727 382,395 8,765,027 5,537,079
Shares issued in
connection with
the acquisition
of Alliance
Counterpoint Fund -0- 2,358,660 -0- 19,714,212
Shares converted
from Class B 809,192 775,326 14,715,173 12,236,562
Shares redeemed (2,635,897) (2,718,348) (46,120,802) (41,968,817)
Net increase 1,429,156 5,118,354 $ 25,489,459 $ 62,067,360
CLASS B
Shares sold 7,450,450 11,059,187 $128,957,352 $166,656,584
Shares issued in
reinvestment of
distributions 1,184,616 1,010,144 18,776,095 14,344,050
Shares issued in
connection with
the acquisition
of Alliance
Counterpoint Fund -0- 122,630 -0- 1,653,071
Shares converted
to Class A (834,026) (793,985) (14,715,173) (12,236,562)
Shares redeemed (1,772,859) (3,389,077) (29,952,352) (51,382,097)
Net increase 6,028,181 8,008,899 $103,065,922 $119,035,046
CLASS C
Shares sold 1,813,455 2,912,986 $ 31,415,894 $ 43,855,129
Shares issued in
reinvestment of
distributions 140,379 73,916 2,227,821 1,050,350
Shares issued in
connection with
the acquisition
of Alliance
Counterpoint Fund -0- 45,952 -0- 650,770
Shares redeemed (551,964) (907,459) (9,497,115) (13,527,197)
Net increase 1,401,870 2,125,395 $ 24,146,600 $ 32,029,052
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS OCT. 2, SIX MONTHS OCT. 2,
ENDED 1996(A) ENDED 1996(A)
MAY 31, 1997 TO NOV. 30, MAY 31, 1997 TO NOV. 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
ADVISOR CLASS
Shares sold 1,624,225 106,845 $ 28,240,807 $ 1,802,350
Shares issued in
reinvestment of
distributions 7,030 -0- 114,668 -0-
Shares redeemed (38,723) -0- (676,444) -0-
Net increase 1,592,532 106,845 $ 27,679,031 $ 1,802,350
(a) Commencement of distribution.
14
FINANCIAL HIGHLIGHTS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS SEPTEMBER 28,
ENDED 1992(A)
MAY 31, YEAR ENDED NOVEMBER 30, TO
1997 --------------------------------------------------- NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.98 $16.09 $11.41 $11.78 $10.79 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.03)(b) (.04)(b) (.03) (.09) (.05) .01
Net realized and unrealized gain (loss)
on investments 2.64 3.20 5.38 (.28) 1.05 .78
Net increase (decrease) in net asset
value from operations 2.61 3.16 5.35 (.37) 1.00 .79
LESS: DIVIDEND AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.01) -0-
Distributions from net realized gains (1.08) (1.27) (.67) -0- -0- -0-
Total dividends and distributions (1.08) (1.27) (.67) -0- (.01) -0-
Net asset value, end of period $19.51 $17.98 $16.09 $11.41 $11.78 $10.79
TOTAL RETURN
Total investment return based on
net asset value (c) 15.70% 21.52% 49.95% (3.14)% 9.26% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $215,464 $172,870 $72,366 $35,146 $40,415 $4,893
Ratio of expenses to average net assets 1.57%(d) 1.65% 1.75% 1.96% 2.18% 2.17%(d)(e)
Ratio of net investment income (loss)
to average net assets (.36)%(d) (.27)% (.28)% (.67)% (.61)% .91%(d)(e)
Portfolio turnover rate 47% 95% 114% 98% 68% -0-%
Average commission rate (f) $.0598 $.0651 -- -- -- --
</TABLE>
See footnote summary on page 18.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
SIX MONTHS SEPTEMBER 28,
ENDED 1992(A)
MAY 31, YEAR ENDED NOVEMBER 30, TO
1997 --------------------------------------------------- NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ------------ ----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.52 $15.81 $11.29 $11.72 $10.79 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.09)(b) (.14)(b) (.11) (.15) (.10) -0-
Net realized and unrealized gain
(loss) on investments 2.56 3.12 5.30 (.28) 1.03 .79
Net increase (decrease) in net asset
value from operations 2.47 2.98 5.19 (.43) .93 .79
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.08) (1.27) (.67) -0- -0- -0-
Net asset value, end of period $18.91 $17.52 $15.81 $11.29 $11.72 $10.79
TOTAL RETURN
Total investment return based on net
asset value (c) 15.29% 20.70% 49.01% (3.67)% 8.64% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $550,297 $404,137 $238,088 $139,988 $151,600 $19,941
Ratio of expenses to average net assets 2.26%(d) 2.32% 2.43% 2.47% 2.70% 2.68%(d)(e)
Ratio of net investment income (loss)
to average net assets (1.05)%(d) (.94)% (.95)% (1.19)% (1.14)% .35%(d)(e)
Portfolio turnover rate 47% 95% 114% 98% 68% -0-%
Average commission rate (f) $.0598 $.0651 -- -- -- --
</TABLE>
See footnote summary on page 18.
16
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------
SIX MONTHS MAY 3,
ENDED 1993(G)
MAY 31, YEAR ENDED NOVEMBER 30, TO
1997 ------------------------------------- NOV. 30,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.54 $15.82 $11.30 $11.72 $10.48
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.09)(b) (.14)(b) (.08) (.09) (.05)
Net realized and unrealized gain
(loss) on investments 2.57 3.13 5.27 (.33) 1.29
Net increase (decrease) in net asset
value from operations 2.48 2.99 5.19 (.42) 1.24
LESS:DISTRIBUTIONS
Distributions from net realized gains (1.08) (1.27) (.67) -0- -0-
Net asset value, end of period $18.94 $17.54 $15.82 $11.30 $11.72
TOTAL RETURN
Total investment return based on
net asset value (c) 15.33% 20.76% 48.96% (3.58)% 11.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $91,551 $60,194 $20,679 $7,332 $3,899
Ratio of expenses to average net assets 2.25%(d) 2.32% 2.42% 2.47% 2.79%(d)
Ratio of net investment loss to
average net assets (1.05)%(d) (.94)% (.97)% (1.16)% (1.35)%(d)
Portfolio turnover rate 47% 95% 114% 98% 68%
Average commission rate (f) $.0598 $.0651 -- -- --
</TABLE>
See footnote summary on page 18.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
ADVISOR CLASS
-------------------------------
SIX MONTHS OCTOBER 2,
ENDED 1996(G)
MAY 31, TO
1997 NOVEMBER 30,
(UNAUDITED) 1996
------------- -------------
Net asset value, beginning of period $17.99 $15.94
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (.02) (.01)
Net realized and unrealized
gain on investments 2.66 2.06
Net increase in net asset
value from operations 2.64 2.05
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.08) -0-
Net asset value, end of period $19.55 $17.99
TOTAL RETURN
Total investment return based
on net asset value (c) 15.87% 12.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $33,225 $1,922
Ratio of expenses to average net assets (d) 1.28% 1.50%
Ratio of net investment loss to
average net assets (d) (.30)% (.48)%
Portfolio turnover rate 47% 95%
Average commission rate $.0598 $.0651
(a) Commencement of operations.
(b) Based on average shares oustanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(d) Annualized.
(e) If the Fund had borne all expenses, the expense ratios would have been
3.33% and 3.78% for Class A and Class B shares, respectively. The net
investment loss ratios would have been (.25)% and (.75)%, for Class A and Class
B, respectively.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
(g) Commencement of distribution.
18
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
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)
OFFICERS
ALFRED HARRISON, EXECUTIVE VICE PRESIDENT
KATHLEEN CORBET, SENIOR VICE PRESIDENT
THOMAS BARDONG, VICE PRESIDENT
DANIEL V. PANKER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
The financial information included therein is taken from the records of
the Fund without audit by independent accountants who do not express an opinion
thereon.
19
ALLIANCE PREMIER GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
APGSR
