ALLIANCE PREMIER GROWTH FUND
SEMI-ANNUAL REPORT
MAY 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
July 29, 1999
Dear Shareholder:
We are pleased to provide you with this report on the Alliance Premier Growth
Fund (the "Fund"). This report contains investment results and market activity
for the semi-annual period ended May 31, 1999.
INVESTMENT RESULTS
The following table provides the Fund's performance results for the six- and
12-month periods ended May 31, 1999. For comparison, we have also provided the
returns for the Standard & Poor's 500 Stock Index (the "S&P 500"), a common
measure of the broad stock market, and your Fund's benchmark, the Russell 1000
Growth Stock Index, which measures the performance of large-cap U.S. stocks.
Over the six- and 12-month periods under review, your Fund posted excellent
returns, outperforming the Russell 1000 Growth Stock Index and significantly
outperforming the S&P 500. The Fund's performance was due to strong
appreciation in selected technology stocks, high-growth retailers, and
telecommunication suppliers and service companies. Many of these positions
reflect companies that were purchased in greater concentration in the portfolio
during periods of price weakness in the early fall of 1998.
INVESTMENT RESULTS*
Period ended May 31, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE PREMIER GROWTH FUND
Class A 16.44% 27.07%
Class B 16.10% 26.27%
Class C 16.12% 26.22%
S&P 500 STOCK INDEX 12.60% 21.03%
RUSSELL 1000 GROWTH STOCK INDEX 12.53% 26.22%
* TOTAL RETURNS FOR THE FUND ARE BASED ON THE NET ASSET VALUE OF EACH CLASS
OF SHARES AS OF MAY 31, 1999. ALL FEES AND EXPENSES RELATED TO THE OPERATION OF
THE FUND HAVE BEEN DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES
THAT MAY APPLY WHEN SHARES ARE PURCHASED OR REDEEMED. RETURNS FOR THE FUND AND
ITS COMPARATIVE BENCHMARKS INCLUDE THE REINVESTMENT OF ANY DISTRIBUTIONS PAID
DURING THE PERIOD. 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 our view, there have been two themes in the U.S. equity market over the past
nine months. Throughout November and December of 1998 and continuing through
the first quarter of 1999, growth stocks continued to perform extremely well.
Beginning in April and May of 1999, the market began to broaden out and embrace
more cyclical industries such as basic commodities, chemicals and papers. As a
result, growth stocks came under price pressure as many investors believed that
world economic growth would accelerate and translate into strong earnings gains
for these more economically sensitive companies.
Accordingly (and despite no change in their underlying fundamentals), the share
prices of many blue-chip growth companies declined from April to May of 1999 by
as much as 25% or more. Experience dictates that cyclical stocks do best when
they can actually demonstrate rapid growth in earnings based on overall world
economic expansion. In our judgment, evidence of such resurgent world economic
growth is mixed and inconclusive. There are signs of lingering softness in
Europe, and Asia, while improving, does not exhibit robust strength.
In our view, it is therefore unclear that the cyclical stocks enjoy the
economic backdrop that would justify their strong increase in price. Our bias
remains that domestic growth will moderate somewhat in the second half of 1999,
favoring large, blue-chip growth companies that can be trusted to deliver on
consistent earnings progressions. In our judgement, these companies would
include pharmaceuticals, high-growth retailers, media and cable
1
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
companies, and technology companies--many of which are now at more attractive
price levels than at any previous time this year.
Many of the top companies in your Fund's portfolio exhibit expected growth
rates of 20% or more per year. The visibility of this growth is high and the
managements of these companies continue to express confidence in these levels
of on-going growth expectations. The U.S. consumer also remains optimistic and
confident. Inflation remains virtually non-existent, and any moderate Federal
Reserve action would likely be viewed by both the bond and equity markets as
responsible. We believe that the position of the United States in relation to
the rest of the world has never been stronger, and that holds equally for the
country's premier growth companies. All that has changed is that the prices of
these companies are now more attractive.
REVIEW OF INVESTMENT STRATEGY
Alliance Premier Growth Fund seeks long term growth by investing in many of
what we believe to be the premier U.S. companies that demonstrate world
leadership positions in their sector. We are continuing to stay the course with
an optimistic bias, but remain extremely price conscious when looking at one
stock against another. Portfolio positions are adjusted as relative price
changes. We expect market volatility to continue, even increase, and as such
will hold to our strategy of taking profits during periods of market euphoria,
while adding to core holdings during periods of price weakness. We believe that
this strategy adds a layer of value above and beyond our key requirement of
good stock selection based on rigorous fundamental research.
We thank you for your continued interest and investment in the Alliance Premier
Growth Fund and look forward to reporting our progress to you in the coming
periods.
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, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 27.07% 21.67%
Five Years 29.31% 28.19%
Since Inception* 24.16% 23.36%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 26.27% 22.27%
Five Years 28.49% 28.49%
Since Inception* 23.40% 23.40%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 26.22% 25.22%
Five Years 28.49% 28.49%
Since Inception* 25.00% 25.00%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 1999)
CLASS A CLASS B CLASS C
------- ------- -------
1 Year 29.84% 30.72% 33.72%
5 Years 29.88% 30.17% 30.17%
Since Inception* 25.04% 25.11% 26.99%
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 or applicable contingent
deferred sales charge for Class B (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 return 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, 1999 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Nokia Corp. (ADR) $ 585,714,500 5.3%
Tyco International, Ltd. 510,128,190 4.6
Dell Computer Corp. 472,003,819 4.3
Cisco Systems, Inc. 460,298,825 4.1
MCI WorldCom, Inc. 451,508,037 4.1
Morgan Stanley, Dean Witter & Co. 450,368,878 4.0
Pfizer, Inc. 434,313,000 3.9
EMC Corp. 370,206,500 3.3
Intel Corp. 368,938,719 3.3
Federal Home Loan Mortgage Corp. 365,351,137 3.3
$4,468,831,605 40.2%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
SHARES*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES BOUGHT 5/31/99
- -------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 3,553,500 6,265,400
Gap, Inc. 4,953,300 4,953,300
Intel Corp. 5,484,400 6,824,300
Lowe's Cos., Inc. 4,814,400 4,814,400
MCI WorldCom, Inc. 3,389,000 5,227,300
McKesson HBOC, Inc. 5,113,199 5,113,199
MediaOne Group, Inc. 4,771,300 4,771,300
Morgan Stanley, Dean Witter & Co. 4,015,500 4,667,035
Pfizer, Inc. 2,010,500 4,059,000
Warner-Lambert Co. 3,171,900 4,057,400
HOLDINGS
SALES SOLD 5/31/99
- -------------------------------------------------------------------------------
AirTouch Communications, Inc. 1,032,600 3,439,300
Colgate-Palmolive Co. 579,000 -0-
General Electric Co. 695,900 -0-
May Department Stores Co. 800,800 -0-
Northwest Airlines Corp. Cl.A 825,900 1,331,500
Philip Morris Cos., Inc. 1,995,100 -0-
Progressive Corp. 220,000 -0-
UAL Corp. 305,500 1,017,600
U.S. Bancorp 2,015,800 -0-
Washington Mutual, Inc. 1,428,852 -0-
* Adjusted for a spin-off.
4
PORTFOLIO OF INVESTMENTS
MAY 31, 1999 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-99.0%
TECHNOLOGY-27.9%
COMMUNICATION EQUIPMENT-9.4%
EMC Corp. (a) 3,716,000 $ 370,206,500
Lucent Technologies, Inc. 1,522,900 86,614,937
Nokia Corp. (ADR) (Finland) 8,249,500 585,714,500
--------------
1,042,535,937
COMPUTER HARDWARE-6.5%
Dell Computer Corp. (a) 13,706,100 472,003,819
International Business Machines Corp. 2,200,800 255,980,550
--------------
727,984,369
COMPUTER SOFTWARE-1.8%
Microsoft Corp. (a) 2,442,400 197,071,150
NETWORKING SOFTWARE-5.3%
Ascend Communications, Inc. (a) 1,447,700 134,183,694
Cisco Systems, Inc. (a) 4,222,925 460,298,825
--------------
594,482,519
SEMI-CONDUCTOR CAPITAL EQUIPMENT-0.8%
Applied Materials, Inc. (a) 1,564,400 85,944,225
SEMI-CONDUCTOR COMPONENTS-4.1%
Intel Corp. 6,824,300 368,938,719
Micron Technology, Inc. (a) 2,252,600 85,458,012
--------------
454,396,731
--------------
3,102,414,931
CONSUMER SERVICES-26.5%
ADVERTISING-0.7%
Clear Channel Communications, Inc. (a) 1,125,900 74,379,769
AIRLINES-3.2%
Continental Airlines, Inc. C1.B (a) 2,415,300 94,800,525
Delta Airlines, Inc. 1,250,000 71,718,750
KLM Royal Dutch Air 2,866,112 83,117,248
Northwest Airlines Corp. Cl.A (a) 1,331,500 44,272,375
UAL Corp. (a) 1,017,600 68,433,600
--------------
362,342,498
BROADCASTING & CABLE-8.2%
AirTouch Communications, Inc. (a) 3,439,300 345,649,650
AT&T Corp. - Liberty Media Group C1.A (a) 2,242,412 148,980,247
Chancellor Media Corp. Cl.A (a) 1,248,600 63,444,488
MediaOne Group, Inc. 4,771,300 352,479,787
--------------
910,554,172
RESTAURANTS & LODGING-0.5%
Starbucks Corp. (a) 1,587,600 58,542,750
RETAIL - GENERAL MERCHANDISE-13.9%
Costco Cos., Inc. (a) 2,009,700 145,703,250
Dayton Hudson Corp. 2,112,000 133,056,000
Gap, Inc. 4,953,300 309,890,831
Home Depot, Inc. 6,169,600 350,896,000
Kohl's Corp. (a) 2,001,400 136,470,463
Lowe's Cos., Inc. 4,814,400 250,047,900
Wal-Mart Stores, Inc. 5,081,000 216,577,625
--------------
1,542,642,069
--------------
2,948,461,258
FINANCE-18.0%
BANKING - MONEY CENTER-0.8%
Chase Manhattan Corp. 1,292,400 93,699,000
BANKING - REGIONAL-1.3%
Bank One Corp. 345,700 19,553,656
BankAmerica Corp. (a) 1,111,502 71,900,286
Fifth Third Bancorp 730,700 49,824,606
--------------
141,278,548
BROKERAGE & MONEY MANAGEMENT-5.6%
Goldman Sachs Group, Inc. (a) 350,700 23,825,681
Merrill Lynch & Co., Inc. 1,730,700 145,378,800
Morgan Stanley, Dean Witter & Co. 4,667,035 450,368,878
--------------
619,573,359
INSURANCE-2.4%
American International Group, Inc. 726,937 83,097,986
Citigroup, Inc. 2,761,100 182,922,875
--------------
266,020,861
5
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
MORTGAGE BANKING-3.3%
Federal Home Loan Mortgage Corp. 6,265,400 $ 365,351,137
MISCELLANEOUS-4.6%
Associates First Capital Corp. Cl.A 2,954,900 121,150,900
MBNA Corp. 11,168,550 308,531,194
Newcourt Credit Group, Inc. (Canada) 5,478,300 89,022,375
--------------
518,704,469
--------------
2,004,627,374
HEALTH CARE-13.0%
DRUGS-10.4%
Bristol-Myers Squibb Co. 3,291,800 225,899,775
Pfizer, Inc. 4,059,000 434,313,000
Schering-Plough Corp. 5,528,200 249,114,513
Warner-Lambert Co. 4,057,400 251,558,800
--------------
1,160,886,088
MEDICAL SERVICES-2.6%
IMS Health, Inc. 4,373,500 107,697,437
McKesson HBOC, Inc. 5,113,199 174,168,341
--------------
281,865,778
--------------
1,442,751,866
MULTI INDUSTRY COMPANIES-4.6%
Tyco International, Ltd. 5,838,377 510,128,190
UTILITIES-4.1%
TELEPHONE UTILITY-4.1%
MCI WorldCom, Inc. (a) 5,227,300 451,508,037
CONSUMER STAPLES-2.4%
RETAIL - FOOD & DRUG-2.4%
Kroger Co. (a) 2,282,700 133,680,619
Safeway, Inc. (a) 2,983,900 138,751,350
--------------
272,431,969
CAPITAL GOODS-1.4%
POLLUTION CONTROL-0.6%
Waste Management, Inc. 1,333,500 70,508,812
MISCELLANEOUS-0.8%
United Technologies Corp. 1,426,400 88,525,950
--------------
159,034,762
CONSUMER MANUFACTURING-0.9%
AUTO & RELATED-0.9%
Ford Motor Co. 1,820,400 103,876,575
TRANSPORTATION-0.2%
AIR FREIGHT-0.2%
FDX Corp. (a) 442,200 24,348,638
Total Common Stocks
(cost $9,748,983,702) 11,019,583,600
SHORT-TERM INVESTMENTS-0.4%
COMMERCIAL PAPER-0.4%
General Electric Capital Corp.
4.93%, 6/01/99 $42,019 42,019,000
TIME DEPOSIT-0.0%
State Street Cayman Islands
4.50%, 6/01/99 3,741 3,741,000
Total Short-Term Investments
(amortized cost $45,760,000) 45,760,000
TOTAL INVESTMENTS-99.4%
(cost $9,794,743,702) 11,065,343,600
Other assets less liabilities-0.6% 62,087,997
NET ASSETS-100% $11,127,431,597
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
6
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $9,794,743,702) $ 11,065,343,600
Cash 967
Receivable for investment securities sold 124,842,340
Receivable for capital stock sold 90,608,679
Dividends and interest receivable 4,895,020
Prepaid expenses 198,345
Total assets 11,285,888,951
LIABILITIES
Payable for investment securities purchased 135,158,386
Advisory fee payable 9,088,020
Distribution fee payable 7,462,093
Payable for capital stock redeemed 5,924,048
Accrued expenses and other liabilities 824,807
Total liabilities 158,457,354
NET ASSETS $ 11,127,431,597
COMPOSITION OF NET ASSETS
Capital stock, at par $ 367,064
Additional paid-in capital 9,437,803,692
Net investment loss (54,505,410)
Accumulated net realized gain on investments 473,167,183
Net unrealized appreciation of investments 1,270,599,068
$ 11,127,431,597
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($2,900,592,755 / 92,586,505 shares of capital stock
issued and outstanding) $31.33
Sales charge--4.25% of public offering price 1.39
Maximum offering price $32.72
CLASS B SHARES
Net asset value and offering price per share
($5,737,435,085 / 192,043,619 shares of capital stock
issued and outstanding) $29.88
CLASS C SHARES
Net asset value and offering price per share
($2,061,862,207 / 68,919,852 shares of capital stock
issued and outstanding) $29.92
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($427,541,550 / 13,509,766 shares of capital stock
issued and outstanding) $31.65
See notes to financial statements.
7
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $606,257) $22,713,084
Interest 6,894,277 $ 29,607,361
EXPENSES
Advisory fee 42,395,573
Distribution fee - Class A 3,803,114
Distribution fee - Class B 22,591,002
Distribution fee - Class C 7,704,827
Transfer agency 6,637,426
Registration 377,704
Printing 352,598
Taxes 266,355
Custodian 235,862
Administrative 62,000
Audit and legal 53,522
Directors' fees 14,500
Miscellaneous 54,180
Total expenses 84,548,663
Less: expense offset arrangement
(see Note B) (435,892)
Net expenses 84,112,771
Net investment loss (54,505,410)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 480,140,947
Net change in unrealized appreciation of
investments 320,852,633
Net gain on investments 800,993,580
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 746,488,170
See notes to financial statements.
8
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1999 NOVEMBER 30,
(UNAUDITED) 1998
--------------- --------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (54,505,410) $ (32,453,991)
Net realized gain on
investment transactions 480,140,947 130,077,346
Net change in unrealized appreciation
of investments 320,852,633 675,313,803
Net increase in net assets
from operations 746,488,170 772,937,158
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
Class A (32,516,709) (25,682,703)
Class B (67,526,095) (60,400,293)
Class C (20,765,712) (12,552,691)
Advisor Class (5,998,556) (3,662,777)
CAPITAL STOCK TRANSACTIONS
Net increase 5,156,345,989 3,217,836,041
Total increase 5,776,027,087 3,888,474,735
NET ASSETS
Beginning of year 5,351,404,510 1,462,929,775
End of period $11,127,431,597 $5,351,404,510
See notes to financial statements.
9
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999 (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 may 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 purchased before July 11, 1998 will
convert to Class A shares six years after the end of the calendar month of
purchase. Class B shares purchased on or after July 11, 1998 will 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. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities, currency gains and
losses realized between the trade and settlement dates on security transactions
and the difference between the amounts of dividends and interest recorded on
the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. The Fund does not isolate the effect of fluctuations in foreign currency
exchange rates when determining the gain or loss upon the sale of equity
securities. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates would be
reflected as a component of net unrealized appreciation of investments, and
foreign currency denominated assets and liabilities.
3. 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
10
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
company taxable income and net realized gains, if any, to shareholders.
Therefore, no provisions for federal income or excise taxes are required.
4. 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.
5. 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.
6. 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.
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 equal to the annualized
rate of 1.00% of the Fund's average daily net assets up to $5 billion, .95% of
the next $2.5 billion of the Fund's average daily net assets, .90% of the next
$2.5 billion of the Fund's average daily net assets, and .85% of the Fund's
average daily net assets over $10 billion. Prior to November 1, 1998 the
effective advisory fee was 1% of average daily net assets of the Fund. Such fee
is accrued daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid $62,000 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, 1999.
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 $5,046,040 for the six months ended May 31, 1999.
In addition, for the six months ended May 31, 1999, the Fund's expenses were
reduced by $435,892 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 $1,741,064 from the sale of Class A shares
and $75,944, $3,590,227 and $401,915 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, 1999.
Brokerage commissions paid on investment transactions for the six months ended
May 31, 1999, amounted to $9,572,354, none of which 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
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
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 $163,747,130 and $13,454,167 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 $8,199,677,804 and $3,228,360,069,
respectively, for the six months ended May 31, 1999. There were purchases of
$206,614,897 and no sales of U.S. government and government agency obligations
for the six months ended May 31, 1999.
At May 31, 1999 the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes. Gross
unrealized appreciation of investments was $1,669,529,868 and gross unrealized
depreciation of investments was $408,660,923 resulting in net unrealized
appreciation of $1,260,868,945.
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, 1999 NOV. 30, MAY 31, 1999 NOV. 30,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 67,616,119 56,476,036 $2,166,059,074 $1,405,838,706
Shares issued in
reinvestment of
distributions 1,093,809 1,121,642 30,223,734 22,887,704
Shares converted
from Class B 3,544,007 1,419,064 113,993,121 34,681,201
Shares redeemed (31,248,417) (24,392,132) (999,594,383) (606,086,880)
Net increase 41,005,518 34,624,610 $1,310,681,546 $ 857,320,731
CLASS B
Shares sold 96,126,308 74,810,864 $2,940,322,105 $1,807,421,381
Shares issued in
reinvestment of
distributions 2,407,797 2,894,527 63,615,178 56,870,690
Shares converted
to Class A (3,711,856) (1,478,067) (113,993,121) (34,681,201)
Shares redeemed (9,104,314) (10,277,797) (277,590,589) (241,201,004)
Net increase 85,717,935 65,949,527 $2,612,353,573 $1,588,409,866
12
ALLIANCE PREMIER GROWTH FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1999 NOV. 30, MAY 31, 1999 NOV. 30,
(UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ -------------- --------------
CLASS C
Shares sold 45,637,154 40,451,101 $1,396,919,239 $ 981,761,319
Shares issued in
reinvestment of
distributions 741,321 593,076 19,615,543 11,712,445
Shares redeemed (10,160,849) (16,699,091) (306,200,353) (402,173,143)
Net increase 36,217,626 24,345,086 $1,110,334,429 $ 591,300,621
ADVISOR CLASS
Shares sold 5,729,043 11,134,237 $ 189,047,101 $ 275,248,745
Shares issued in
reinvestment of
distributions 208,442 170,458 5,807,195 3,504,261
Shares redeemed (2,229,801) (3,921,835) (71,877,855) (97,948,183)
Net increase 3,707,684 7,382,860 $ 122,976,441 $ 180,804,823
NOTE F: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended May 31, 1999.
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, 1999 --------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $27.50 $22.00 $17.98 $16.09 $11.41 $11.78
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.13)(a) (.15)(a) (.10)(a) (.04)(a) (.03) (.09)
Net realized and unrealized gain (loss)
on investment transactions 4.57 7.11 5.20 3.20 5.38 (.28)
Net increase (decrease) in net asset
value from operations 4.44 6.96 5.10 3.16 5.35 (.37)
LESS: DISTRIBUTIONS
Distributions from net realized gains (.61) (1.46) (1.08) (1.27) (.67) -0-
Net asset value, end of period $31.33 $27.50 $22.00 $17.98 $16.09 $11.41
TOTAL RETURN
Total investment return based on net
asset value (b) 16.44% 33.94% 30.46% 21.52% 49.95% (3.14)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,900,593 $1,418,262 $373,099 $172,870 $72,366 $35,146
Ratio of expenses to average net assets 1.48%(c)(d) 1.59%(d) 1.57% 1.65% 1.75% 1.96%
Ratio of net investment loss to average
net assets (.79)%(c) (.59)% (.52)% (.27)% (.28)% (.67)%
Portfolio turnover rate 39% 82% 76% 95% 114% 98%
</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, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $26.33 $21.26 $17.52 $15.81 $11.29 $11.72
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.22)(a) (.30)(a) (.23)(a) (.14)(a) (.11) (.15)
Net realized and unrealized gain (loss)
on investment transactions 4.38 6.83 5.05 3.12 5.30 (.28)
Net increase (decrease) in net asset
value from operations 4.16 6.53 4.82 2.98 5.19 (.43)
LESS: DISTRIBUTIONS
Distributions from net realized gains (.61) (1.46) (1.08) (1.27) (.67) -0-
Net asset value, end of period $29.88 $26.33 $21.26 $17.52 $15.81 $11.29
TOTAL RETURN
Total investment return based on net
asset value (b) 16.10% 33.04% 29.62% 20.70% 49.01% (3.67)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $5,737,435 $2,799,288 $858,449 $404,137 $238,088 $139,988
Ratio of expenses to average net assets 2.16%(c)(d) 2.28%(d) 2.25% 2.32% 2.43% 2.47%
Ratio of net investment loss to average
net assets (1.47)%(c) (1.27)% (1.20)% (.94)% (.95)% (1.19)%
Portfolio turnover rate 39% 82% 76% 95% 114% 98%
</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
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1999 --------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $26.36 $21.29 $17.54 $15.82 $11.30 $11.72
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (.22)(a) (.31)(a) (.24)(a) (.14)(a) (.08) (.09)
Net realized and unrealized gain (loss)
on investment transactions 4.39 6.84 5.07 3.13 5.27 (.33)
Net increase (decrease) in net asset
value from operations 4.17 6.53 4.83 2.99 5.19 (.42)
LESS:DISTRIBUTIONS
Distributions from net realized gains (.61) (1.46) (1.08) (1.27) (.67) -0-
Net asset value, end of period $29.92 $26.36 $21.29 $17.54 $15.82 $11.30
TOTAL RETURN
Total investment return based on net
asset value (b) 16.12% 32.99% 29.64% 20.76% 48.96% (3.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,061,862 $862,193 $177,923 $60,194 $20,679 $7,332
Ratio of expenses to average net assets 2.16%(c)(d) 2.28%(d) 2.24% 2.32% 2.42% 2.47%
Ratio of net investment loss to average
net assets (1.47)%(c) (1.30)% (1.22)% (.94)% (.97)% (1.16)%
Portfolio turnover rate 39% 82% 76% 95% 114% 98%
</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
----------------------------------------------------
OCT. 2,
SIX MONTHS 1996(E)
ENDED YEAR ENDED NOVEMBER 30, TO
MAY 31, 1999 ------------------------ NOV. 30,
(UNAUDITED) 1998 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $27.71 $22.10 $17.99 $15.94
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.07) (.07) (.06) (.01)
Net realized and unrealized gain
on investment transactions 4.62 7.14 5.25 2.06
Net increase in net asset
value from operations 4.55 7.07 5.19 2.05
LESS: DISTRIBUTIONS
Distributions from net realized gains (.61) (1.46) (1.08) -0-
Net asset value, end of period $31.65 $27.71 $22.10 $17.99
TOTAL RETURN
Total investment return based on net
asset value (b) 16.72% 34.31% 30.98% 12.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $427,542 $271,661 $53,459 $1,922
Ratio of expenses to average net assets 1.15%(c)(d) 1.26%(d) 1.25% 1.50%(c)
Ratio of net investment loss to average
net assets (.46)%(c) (.28)% (.28)% (.48)%(c)
Portfolio turnover rate 39% 82% 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, 1999 and the year ended
November 30, 1998, the ratios of expenses to average net assets were 1.47% and
1.58% for Class A shares, 2.15% and 2.27% for Class B shares, 2.15% and 2.27%
for Class C shares and 1.14% and 1.25% for 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 NORDBY, 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
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036-2798
LEGAL COUNSEL
SEWARD & KISSEL LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
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 U.S. Government Fund
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
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors 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
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
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
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
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
General Municipal Portfolio
Government 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 599
