ALLIANCE PREMIER GROWTH FUND
SEMI-ANNUAL REPORT
MAY 31, 1998
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
July 27, 1998
Dear Shareholder:
We are pleased to provide you with Alliance Premier Growth Fund investment
results and market activity for the periods ended May 31, 1998.
INVESTMENT RESULTS
The semi-annual reporting period for Alliance Premier Growth Fund ended on May
31, 1998. The Fund's performance numbers for the previous six and 12-month
periods are shown in the following table, 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 table, all classes of your Fund's shares
substantially outperformed both indices for the six month and 12-month periods.
This outperformance can be attributed to three factors. First, stock selection
in specific technology industries performed well, including Cisco Systems,
Inc., Dell Computer Corp., Microsoft Corp. and Nokia Corp. Second, strong
exposure to broadline, U.S. retailers benefited from an economically strong
U.S. consumer, specifically Dayton Hudson Corp., Wal-Mart Stores, Inc., Kohl's
Corp., Federated Department Stores, Inc. and Home Depot, Inc. Third, your
Fund's portfolio benefited from companies with accelerating cash flows which
were not jeopardized by the Asian economic crisis, namely, AirTouch
Communications, Inc., Tyco International, Ltd. and other U.S. pharmaceutical
companies.
INVESTMENT RESULTS*
Periods Ended May 31, 1998
TOTAL RETURNS
6 MONTHS 12 MONTHS
--------- ---------
ALLIANCE PREMIER GROWTH FUND
Class A 22.74% 38.40%
Class B 22.33% 37.53%
Class C 22.35% 37.53%
S&P 500 STOCK INDEX 15.07% 30.66%
RUSSELL 1000 GROWTH STOCK INDEX 14.70% 28.77%
* TOTAL RETURNS ARE BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF
MAY 31, 1998. TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO
DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
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. AN INVESTOR CANNOT INVEST
DIRECTLY IN THE INDICES.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
ECONOMIC REVIEW
In explaining our investment philosophy to shareholders, we have always tried
to avoid the economist's dictum of "on the one hand this, on the other that."
However, after the market's continued robust performance, we believe that a
discussion of potential opportunities and problems facing the market is in
order.
It is important to start by restating that the U.S. economy remains robust and
the fundamentals underpinning its performance over the past several years
remain solidly in place. U.S. consumer spending is healthy, corporate
cost-cutting benefits are ongoing, monetary and fiscal policies are
well-balanced and U.S. technological leadership continues. As a result, the
foundation for today's valuations is strong.
1
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
However, possible risks to the market are threefold. First, problems in Asia
may prove to be more contractionary than previously believed and impediments to
stimulating that region may prove more formidable. The Japanese are beginning
to make some of the right moves, but clearly that country, as well as China and
the ASEAN tigers, face a daunting task of structural reform in virtually every
aspect of their financial institutions. This reform ranges from more
transparent accounting to changing a history of cronyism and corruption that
has permeated their governments. Second, there remains nervousness about the
U.S.'s computer readiness for the year 2000 with costs and uncertainties we
cannot accurately forecast. And, finally, there is the possibility of some
upward pressure on wages given the tight U.S. labor market. This may force the
Federal Reserve to raise rates to keep domestic growth within tolerable limits.
Weighing all sides, we are still inclined to believe that equities will move
higher. Strength in Europe and in the United States is more likely to lift, or
at least to stabilize, Asia rather than the opposite; i.e., that Asia will
worsen and drag down two very strong economies. There is room for interest
rates to work downward, particularly when they are compared to lower bond
yields in Europe. And, finally, all this is unfolding in an environment where
investors are taking much more of a "buy and hold" approach to attain the
benefits of the 20% long term capital gain
FUND STRATEGY
Alliance Premier Growth Fund seeks long-term growth by investing in many of the
premier U.S. companies that demonstrate world leadership positions. We are
continuing to stay the course with an optimistic bias, but hold to a barbell
approach of having roughly equal weightings in more aggressive, high growth
technology stocks on one hand, balanced by lower price to earnings (P/E)
multiple financial stocks on the other. As a hedge against the Asian situation
worsening, we have also added a third leg to the portfolio of companies with
strong U.S. domestic exposure and limited Pacific-rim exposure. We expect
market volatility to remain high and do not intend to deviate from our basis
trading strategy of taking profits during bouts of exuberance and capitalizing
on periods of price weakness where we are confident of underlying fundamentals.
We thank you for your continued interest and investment in the Alliance Premier
Growth Fund and look forward to reporting our progress to you as we enter the
next 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
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF MAY 31, 1998.
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 38.40% 32.50%
Five Years 24.52% 23.45%
Since Inception* 23.65% 22.71%
CLASS B SHARES
WITHOUT WITH
Sales Charge Sales Charge
------------ ------------
One Year 37.53% 33.53%
Five Years 23.76% 23.76%
Since Inception* 22.91% 22.91%
CLASS C SHARES
WITHOUT WITH
Sales Charge Sales Charge
------------ ------------
One Year 37.53% 36.53%
Five Years 23.79% 23.79%
Since Inception* 24.70% 24.70%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST
RECENT QUARTER-END (MARCH 31, 1998)
CLASS A CLASS B CLASS C
--------- --------- ---------
1 Year 54.83% 56.57% 59.55%
5 Years 22.88% 23.20% n/a
Since Inception* 23.21% 23.44% 25.42%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares, without (NAV) and with (SEC) 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.
SEC average annual total returns for the periods shown reflect reinvestment of
all distributions and deduction of the maximum 4.25% front-end sales charges
and applicable contingent deferred sales charges.
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.
n/a: not applicable
3
TEN LARGEST HOLDINGS
MAY 31, 1998 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY VALUE PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------
Philip Morris Cos., Inc. $ 172,459,463 5.6%
Nokia Corp. (ADR) 147,226,300 4.8
Dell Computer Corp. 144,079,087 4.7
Cisco Systems, Inc. 141,422,531 4.6
AirTouch Communications, Inc. 133,321,425 4.4
Home Depot, Inc. 121,104,093 4.0
Tyco International, Ltd. 107,244,763 3.5
Walt Disney Co. 98,678,938 3.2
MBNA Corp. 87,845,672 2.9
Citicorp 81,481,900 2.7
$1,234,864,172 40.4%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
_______________________________________________________________________________
SHARES*
PURCHASES BOUGHT HOLDINGS 5/31/98
- -------------------------------------------------------------------------------
AirTouch Communications, Inc. 1,671,300 2,799,400
Bristol-Myers Squibb Co. 636,100 636,100
Cisco Systems, Inc. 1,234,850 1,870,050
Citicorp 287,500 546,400
Dayton Hudson Corp. 1,349,000 1,626,600
H.F. Ahmanson & Co. 782,000 782,000
NationsBank Corp. 618,600 618,600
Northwest Airlines Corp. Cl.A 942,600 1,392,800
Philip Morris Cos., Inc. 2,674,000 4,614,300
Walt Disney Corp. 528,900 872,300
SALES SOLD HOLDINGS 5/31/98
- -------------------------------------------------------------------------------
Allied-Signal, Inc. 289,400 -0-
Compaq Computer Corp. 12,050 1,173,400
First Data Corp. 311,100 -0-
Ford Motor Co. 803,400 -0-
Household International, Inc. 143,100 -0-
Lucent Technologies, Inc. 60,400 127,000
Medtronic, Inc. 121,000 201,500
Merrill Lynch & Co., Inc. 115,800 521,400
Texas Instruments, Inc. 362,000 -0-
WorldCom, Inc. 436,490 -0-
* Adjusted for stock splits and other corporate actions.
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1998 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-96.7%
CONSUMER SERVICES-24.4%
AIRLINES-4.3%
KLM Royal Dutch Air 430,182 $ 16,750,212
Northwest Airlines Corp. Cl.A (a) 1,392,800 62,763,050
UAL Corp. (a) 657,000 52,190,437
-------------
131,703,699
BROADCASTING & CABLE-5.6%
AirTouch Communications, Inc. (a) 2,799,400 133,321,425
Tele-Communications, Inc.
- Liberty Media Group Cl.A (a) 1,117,812 36,887,796
-------------
170,209,221
ENTERTAINMENT & LEISURE-3.8%
Carnival Corp. Cl.A 271,200 18,373,800
Walt Disney Co. 872,300 98,678,938
-------------
117,052,738
RESTAURANTS & LODGING-0.2%
Marriott International, Inc. C1.A 147,800 5,136,050
RETAIL - GENERAL MERCHANDISE-10.5%
Dayton Hudson Corp. 1,626,600 75,433,575
Federated Department Stores, Inc. (a) 539,300 27,942,481
Home Depot, Inc. 1,541,500 121,104,093
Kohl's Corp. (a) 659,500 31,367,469
May Department Stores Co. 363,600 23,384,025
Wal-Mart Stores, Inc. 760,500 41,970,094
-------------
321,201,737
-------------
745,303,445
TECHNOLOGY-23.0%
COMMUNICATION EQUIPMENT-8.6%
EMC Corp. (a) 694,000 28,757,625
Ericsson (L.M.) Telephone Co. Cl.B (ADR) (b) 1,821,980 50,787,692
Lucent Technologies, Inc. 127,000 9,009,063
Nokia Corp. (ADR) (c) 2,267,200 147,226,300
Tellabs, Inc. (a) 372,300 25,583,991
-------------
261,364,671
COMPUTER HARDWARE-5.8%
Compaq Computer Corp. 1,173,400 32,048,488
Dell Computer Corp. (a) 1,748,400 144,079,087
-------------
176,127,575
COMPUTER SOFTWARE-2.1%
Microsoft Corp. (a) 750,500 63,651,781
NETWORKING SOFTWARE-4.6%
Cisco Systems, Inc. (a) 1,870,050 141,422,531
SEMI-CONDUCTOR COMPONENTS-1.9%
Intel Corp. 824,300 58,885,931
-------------
701,452,489
FINANCE-22.9%
BANKING - MONEY CENTER-3.9%
BankAmerica Corp. 458,700 37,928,756
Citicorp 546,400 81,481,900
-------------
119,410,656
BANKING - REGIONAL-3.3%
Banc One Corp. 697,510 38,450,239
Fifth Third Bancorp 289,700 14,267,725
NationsBank Corp. 618,600 46,858,950
-------------
99,576,914
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
BROKERAGE & MONEY MANAGEMENT-4.0%
Merrill Lynch & Co., Inc. 521,400 $ 46,665,300
Morgan Stanley, Dean Witter & Co. 963,035 75,176,920
-------------
121,842,220
INSURANCE-2.1%
American International Group, Inc. 208,225 25,780,858
Progressive Corp. 268,400 37,005,650
-------------
62,786,508
MORTGAGE BANKING-4.3%
Federal Home Loan Mortgage Corp. 792,100 36,040,550
Federal National Mortgage Assn. 621,000 37,182,375
H.F. Ahmanson & Co. 782,000 59,627,500
-------------
132,850,425
MISCELLANEOUS-5.3%
Associates First Capital Corp. Cl.A 586,850 43,903,715
MBNA Corp. 2,772,250 87,845,672
MGIC Investment Corp. 520,500 31,197,469
-------------
162,946,856
-------------
699,413,579
HEALTH CARE-10.3%
DRUGS-7.4%
Bristol-Myers Squibb Co. 636,100 68,380,750
Merck & Co., Inc. 517,500 60,579,844
Pfizer, Inc. 683,900 71,681,268
Schering-Plough Corp. 297,700 24,913,769
-------------
225,555,631
MEDICAL PRODUCTS-0.4%
Medtronic, Inc. 201,500 11,208,437
MEDICAL SERVICES-2.5%
Humana, Inc. (a) 193,500 6,010,594
United Healthcare Corp. 1,129,200 72,268,800
-------------
78,279,394
-------------
315,043,462
CONSUMER STAPLES-6.5%
FOOD-0.2%
Coca-Cola Co. 80,200 6,285,675
HOUSEHOLD PRODUCTS-0.7%
Colgate-Palmolive Co. 241,500 21,010,500
TOBACCO-5.6%
Philip Morris Cos., Inc. 4,614,300 172,459,463
-------------
199,755,638
MULTI INDUSTRY COMPANIES-3.5%
Tyco International, Ltd. 1,936,700 107,244,763
ENERGY-3.1%
OIL SERVICES-3.1%
Baker Hughes, Inc. 251,100 9,039,600
Halliburton Co. 754,500 35,744,438
Schlumberger, Ltd. 624,600 48,757,837
-------------
93,541,875
CAPITAL GOODS-2.4%
ELECTRICAL EQUIPMENT-0.8%
General Electric Co. 274,200 22,861,425
MISCELLANEOUS-1.6%
United Technologies Corp. 519,900 48,870,600
-------------
71,732,025
6
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
UTILITIES-0.6%
TELEPHONE UTILITY-0.6%
MCI Communications Corp. 363,800 $ 19,451,931
Total Common Stocks
(cost $2,460,432,822) 2,952,939,207
SHORT-TERM INVESTMENT-3.2%
COMMERCIAL PAPER-3.2%
General Electric Capital Corp.
5.65%, 6/01/98
(amortized cost $98,799,000) $98,799 98,799,000
TOTAL INVESTMENTS-99.9%
(cost $2,559,231,822) $3,051,738,207
Other assets less liabilities-0.1% 2,866,476
NET ASSETS-100% $3,054,604,683
(a) Non-income producing security.
(b) Country of origin--Sweden.
(c) Country of origin--Finland.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $2,559,231,822) $3,051,738,207
Cash 24,054
Receivable for capital stock sold 44,367,310
Dividends receivable 1,198,164
Prepaid expenses 46,684
Total assets 3,097,374,419
LIABILITIES
Payable for investment securities purchased 36,134,684
Advisory fee payable 2,530,358
Distribution fee payable 1,917,592
Payable for capital stock redeemed 1,790,348
Accrued expenses and other liabilities 396,754
Total liabilities 42,769,736
NET ASSETS $3,054,604,683
COMPOSITION OF NET ASSETS
Capital stock, at par $ 124,363
Additional paid-in capital 2,389,583,689
Net investment loss (9,389,284)
Accumulated net realized gain on investments 181,779,530
Net unrealized appreciation of investments 492,506,385
$3,054,604,683
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share($796,793,660/
31,595,598 shares of capital stock issued and outstanding) $25.22
Sales charge--4.25% of public offering price 1.12
Maximum offering price $26.34
CLASS B SHARES
Net asset value and offering price per share($1,633,921,820/
67,423,754 shares of capital stock issued and outstanding) $24.23
CLASS C SHARES
Net asset value and offering price per share($422,015,765/
17,389,214 shares of capital stock issued and outstanding) $24.27
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($201,873,438/7,953,920 shares of capital stock issued
and outstanding) $25.38
See notes to financial statements.
8
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $223,011) $ 9,442,103
Interest 2,385,880 $ 11,827,983
EXPENSES
Advisory fee 10,806,610
Distribution fee - Class A 974,383
Distribution fee - Class B 6,014,780
Distribution fee - Class C 1,392,529
Transfer agency 1,467,924
Registration 245,035
Custodian 128,121
Printing 114,434
Taxes 67,844
Administrative 61,500
Audit and legal 46,066
Directors' fees 14,000
Miscellaneous 12,256
Total expenses 21,345,482
Less: expense offset arrangement (see Note B) (128,215)
Net expenses 21,217,267
Net investment loss (9,389,284)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 188,199,868
Net change in unrealized appreciation of investments 218,073,753
Net gain on investments 406,273,621
NET INCREASE IN NET ASSETS FROM OPERATIONS $396,884,337
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (9,389,284) $ (9,767,429)
Net realized gain on investment transactions 188,199,868 103,667,327
Net change in unrealized appreciation
of investments 218,073,753 130,879,567
Net increase in net assets from operations 396,884,337 224,779,465
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (25,033,845) (10,426,403)
Class B (58,997,383) (25,045,493)
Class C (12,185,855) (3,698,398)
Advisor Class (3,511,106) (115,497)
CAPITAL STOCK TRANSACTIONS
Net increase 1,294,518,760 638,313,131
Total increase 1,591,674,908 823,806,805
NET ASSETS
Beginning of year 1,462,929,775 639,122,970
End of period $3,054,604,683 $1,462,929,775
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1998 (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 eight years after the end of the calendar month of purchase. Class C
shares are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Advisor Class shares are sold
without 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, except that each class bears different distribution expenses and
has exclusive voting rights with respect to its distribution plan. The
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities in the
financial statements and amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange 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 sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors.
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 any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date the securities are
purchased or sold. The Fund accretes discount and amortizes premiums as
adjustments to interest income. Investment gains and losses are determined on
the identified cost basis.
4. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisory Class shares have no distribution fees.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with 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.
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
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. The fee is accrued daily and
paid monthly.
Pursuant to the advisory agreement, the Fund paid $61,500 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended May 31, 1998.
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 $1,140,092 for the six months ended May 31, 1998.
In addition, for the six months ended May 31, 1998, the Fund's expenses were
reduced by $128,215 under an expense offset arrangement with Alliance Fund
Services. Transfer agency fees reported in the statement of operations exclude
these credits.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
received front-end sales charges of $244,777 from the sale of Class A shares
and $3,770, $733,379 and $60,789 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, 1998.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1998, amounted to $1,781,639, of which $27,000 was paid to Donaldson,
Lufkin & Jenrette Securities Corp., an affiliate of the Adviser.
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 the average daily net assets attributable to Class A
shares and 1% of the average daily net assets attributable to both Class B and
Class C shares. There is no distribution fee on the Advisor Class shares. The
fees are 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
$40,911,362 and $2,936,372 for Class B and Class 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 $1,672,061,876 and $623,595,929,
respectively, for the six months ended May 31, 1998. There were purchases of
$57,833,510 and sales of $1,660,789 of U.S. government and government agency
obligations for the six months ended May 31, 1998.
At May 31, 1998 the cost of investments for federal income tax purposes was
$2,559,825,171. Accordingly, gross unrealized appreciation of investments was
$522,896,110 and gross unrealized depreciation of investments was $30,983,074
resulting in net unrealized appreciation of $491,913,036.
12
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
NOTE E: 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, 1998 NOVEMBER 30, MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ -------------- --------------
CLASS A
Shares sold 21,298,583 10,222,249 $500,620,892 $212,359,400
Shares issued in
reinvestment of
distributions 1,097,397 538,004 22,277,792 8,771,167
Shares converted
from Class B 586,057 1,665,278 13,303,599 33,372,081
Shares redeemed (8,342,816) (5,085,060) (198,471,073) (100,132,948)
Net increase 14,639,221 7,340,471 $337,731,210 $154,369,700
CLASS B
Shares sold 28,447,584 22,054,486 $653,237,521 $438,050,160
Shares issued in
reinvestment of
distributions 2,839,210 1,184,755 55,536,086 18,778,873
Shares converted
to Class A (608,946) (1,719,123) (13,303,599) (33,372,081)
Shares redeemed (3,630,251) (4,213,179) (82,336,478) (80,849,390)
Net increase 27,047,597 17,306,939 $613,133,530 $342,607,562
CLASS C
Shares sold 12,398,232 6,050,953 $286,808,702 $120,803,565
Shares issued in
reinvestment of
distributions 572,653 140,395 11,218,638 2,228,162
Shares redeemed (3,938,811) (1,266,415) (91,101,385) (24,575,722)
Net increase 9,032,074 4,924,933 $206,925,955 $ 98,456,005
ADVISOR CLASS
Shares sold 7,120,481 2,430,024 $176,601,866 $ 45,316,504
Shares issued in
reinvestment of
distributions 164,626 7,030 3,356,728 114,668
Shares redeemed (1,750,409) (124,677) (43,230,529) (2,551,308)
Net increase 5,534,698 2,312,377 $136,728,065 $ 42,879,864
13
FINANCIAL HIGHLIGHTS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1998 ----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
--------------- ------------ ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $22.00 $17.98 $16.09 $11.41 $11.78 $10.79
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.05)(a) (.10)(a) (.04)(a) (.03) (.09) (.05)
Net realized and unrealized gain (loss)
on investment transactions 4.71 5.20 3.20 5.38 (.28) 1.05
Net increase (decrease) in net asset
value from operations 4.66 5.10 3.16 5.35 (.37) 1.00
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- -0- (.01)
Distributions from net realized gains (1.44) (1.08) (1.27) (.67) -0- -0-
Total dividends and distributions (1.44) (1.08) (1.27) (.67) -0- (.01)
Net asset value, end of period $25.22 $22.00 $17.98 $16.09 $11.41 $11.78
TOTAL RETURN
Total investment return based on net
asset value (b) 22.74% 30.46% 21.52% 49.95% (3.14)% 9.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $796,794 $373,099 $172,870 $72,366 $35,146 $40,415
Ratio of expenses to average net assets 1.51%(c)(d) 1.57% 1.65% 1.75% 1.96% 2.18%
Ratio of net investment loss to
average net assets (.40)%(c) (.52)% (.27)% (.28)% (.67)% (.61)%
Portfolio turnover rate 30% 76% 95% 114% 98% 68%
</TABLE>
See footnote summary on page 17.
14
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1998 ----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------------- ------------ ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $21.26 $17.52 $15.81 $11.29 $11.72 $10.79
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.12)(a) (.23)(a) (.14)(a) (.11) (.15) (.10)
Net realized and unrealized gain (loss)
on investment transactions 4.53 5.05 3.12 5.30 (.28) 1.03
Net increase (decrease) in net asset
value from operations 4.41 4.82 2.98 5.19 (.43) .93
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.44) (1.08) (1.27) (.67) -0- -0
Net asset value, end of period $24.23 $21.26 $17.52 $15.81 $11.29 $11.72
TOTAL RETURN
Total investment return based on net
asset value (b) 22.33% 29.62% 20.70% 49.01% (3.67)% 8.64%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $1,633,922 $858,449 $404,137 $238,088 $139,988 $151,600
Ratio of expenses to average net assets 2.20%(c)(d) 2.25% 2.32% 2.43% 2.47% 2.70%
Ratio of net investment loss to
average net assets (1.10)%(c) (1.20)% (.94)% (.95)% (1.19)% (1.14)%
Portfolio turnover rate 30% 76% 95% 114% 98% 68%
</TABLE>
See footnote summary on page 17.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------------------
SIX MONTHS MAY 3,1993(E)
ENDED YEAR ENDED NOVEMBER 30, TO
MAY 31, 1998 ---------------------------------------------------- NOVEMBER 30,
(UNAUDITED) 1997 1996 1995 1994 1993
--------------- ------------ ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $21.29 $17.54 $15.82 $11.30 $11.72 $10.48
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.12)(a) (.24)(a) (.14)(a) (.08) (.09) (.05)
Net realized and unrealized gain (loss)
on investment transactions 4.54 5.07 3.13 5.27 (.33) 1.29
Net increase (decrease) in net asset
value from operations 4.42 4.83 2.99 5.19 (.42) 1.24
LESS:DISTRIBUTIONS
Distributions from net realized gains (1.44) (1.08) (1.27) (.67) -0- -0-
Net asset value, end of period $24.27 $21.29 $17.54 $15.82 $11.30 $11.72
TOTAL RETURN
Total investment return based on net
asset value (b) 22.35% 29.64% 20.76% 48.96% (3.58)% 11.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $422,016 $177,923 $60,194 $20,679 $7,332 $3,899
Ratio of expenses to average net assets 2.19%(c)(d) 2.24% 2.32% 2.42% 2.47% 2.79%(c)
Ratio of net investment loss to
average net assets (1.10)%(c) (1.22)% (.94)% (.97)% (1.16)% (1.35)%(c)
Portfolio turnover rate 30% 76% 95% 114% 98% 68%
</TABLE>
See footnote summary on page 17.
16
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------------------
OCTOBER 2,
SIX MONTHS 1996(E)
ENDED YEAR ENDED TO
MAY 31, 1998 NOV. 30, NOV. 30,
(UNAUDITED) 1997 1996
--------------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $22.10 $17.99 $15.94
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.02) (.06) (.01)
Net realized and unrealized gain
on investment transactions 4.74 5.25 2.06
Net increase in net asset
value from operations 4.72 5.19 2.05
LESS: DISTRIBUTIONS
Distributions from net realized gains (1.44) (1.08) -0-
Net asset value, end of period $25.38 $22.10 $17.99
TOTAL RETURN
Total investment return based on net
asset value (b) 22.92% 30.98% 12.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $201,873 $53,459 $1,922
Ratio of expenses to average net assets 1.19%(c)(d) 1.25% 1.50%(c)
Ratio of net investment loss to
average net assets (.15)%(c) (.28)% (.48)%(c)
Portfolio turnover rate 30% 76% 95%
</TABLE>
(a) Based on average shares oustanding.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(c) Annualized.
(d) Ratio reflects expenses grossed up for expense offset arrangement with the
Transfer Agent. For the six months ended May 31, 1998, the ratios of expenses
to average net assets were 1.51%, 2.19%, 2.18% and 1.18% for Class A, B, C and
Advisor Class shares, respectively.
(e) Commencement of distribution.
17
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 A. CORBET, SENIOR VICE PRESIDENT
THOMAS J. 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.
18
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
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
