-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ITYlf/fYm/QFH5Db6GEHBVDVw7H05Fd920k7AxoUwywXTB5R0UYI6v0XCXAZMMa9 7Q0pOlLgLMfjkuCjJ9+e1A== 0000936772-01-500129.txt : 20021127 0000936772-01-500129.hdr.sgml : 20021127 20010809130906 ACCESSION NUMBER: 0000936772-01-500129 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN TRUST CENTRAL INDEX KEY: 0001129870 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-10221 FILM NUMBER: 01701991 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129691000 MAIL ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCEBERNSTEIN VALUE TRUST DATE OF NAME CHANGE: 20001212 N-30D 1 edg6498.txt AB VALUE FUND - -------------------------------------------------------------------------------- LARGE-CAP VALUE - -------------------------------------------------------------------------------- AllianceBernstein Value Fund Semi-Annual Report May 31, 2001 [GRAPHIC OMITTED] Alliance Capital [LOGO](R) The Investment Professional's Choice Investment Products Offered --------------------------- o Are Not FDIC Insured o May Lose Value o Are Not Bank Guaranteed --------------------------- This shareholder report must be preceded or accompanied by the Fund's prospectus for individuals who are not current shareholders of the Fund. ---------------------- LETTER TO SHAREHOLDERS ---------------------- LETTER TO SHAREHOLDERS July 3, 2001 Dear Shareholder: We are pleased to provide the first shareholder report for AllianceBernstein Value Fund (the "Fund"). This report contains performance results and market review for the semi-annual reporting period ended May 31, 2001. Investment Objectives and Policies This open-end Fund invests primarily in a diversified portfolio of equity securities of companies with relatively large market capitalizations that Alliance believes are undervalued. The Fund's policies emphasize investment in companies that are determined by Alliance to be undervalued, using the fundamental value approach of Alliance's Bernstein unit ("Bernstein"). In selecting securities for the Fund's portfolio, Bernstein uses its fundamental research to identify companies whose long-term earnings power and dividend paying capability are not reflected in the current market price of their securities. Investment Results The following table provides performance for the Fund and its benchmark, the Russell 1000 Value Index, for the period since the Fund's inception on March 29, 2001 through May 31, 2001. The Russell 1000 Value Index measures the performance of U.S. large cap value stocks. We are also providing performance for the Standard & Poor's (S&P) 500 Stock Index, a common measure of the broad stock market. INVESTMENT RESULTS* Period Ended May 31, 2001 ------------------ Total Returns ------------------ Since Inception** - ------------------------------------------------------------------------------ AllianceBernstein Value Fund Class A 6.70% - ------------------------------------------------------------------------------ Class B 6.70% - ------------------------------------------------------------------------------ Class C 6.60% - ------------------------------------------------------------------------------ Russell 1000 Value Index 7.26% - ------------------------------------------------------------------------------ S&P 500 Stock Index 8.49% - ------------------------------------------------------------------------------ * The Fund's investment results are cumulative total returns since the Fund's inception on March 29, 2001 and are based on the net asset value (NAV) of each class of shares as of May 31, 2001. 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 Advisor Class shares will vary due to different expenses associated with this class. Returns for the Fund include the reinvestment of any distributions paid during the period. Past performance is no guarantee of future results. The Russell 1000 Value Index is an unmanaged index of securities in the Russell 1000 Stock Index with a greater-than-average value orientation. The Standard & Poor's (S&P) 500 Stock Index is an unmanaged index of 500 U.S. companies and is a common measure of the performance of the overall U.S. stock market. The indices reflect no fees or expenses. An investor cannot invest directly in an index, and its results are not indicative of the performance of any specific investment, including AllianceBernstein Value Fund. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 1 - ---------------------- LETTER TO SHAREHOLDERS - ---------------------- ** The Fund's inception date for all share classes is March 29, 2001. Data for the Russell 1000 Value Index and the S&P 500 Stock Index is from the closest month-end after the Fund's inception date. Additional investment results appear on pages 6-7. The Fund modestly underperformed its benchmark, the Russell 1000 Value Index, since its inception on March 29, 2001. Most of the underperformance occurred in April, when sectors that the Fund has been avoiding or underweighting-- particularly technology, telecommunications and investment banks--posted stronger results than the value stocks emphasized by the Fund's management team. The Fund's shortfall, however, was partially offset by relatively strong performance in May, particularly among the Fund's consumer-oriented financial, commodities, energy and electric utility holdings. When measured against the S&P 500 Stock Index, the Fund's performance pattern was similar: it trailed in April and outperformed in May, but lagged for the two-month period since its inception. This result can be largely attributed to its value orientation during a minor recovery for growth in April. In particular, the Fund has greater exposure to financial services stocks (which underperformed) and less exposure to technology stocks (which outperformed) than the S&P 500 Stock Index. Market Overview The markets today are still working through the fallout from the Internet bubble. In the late 1990's, investors excited about the prospects for the Internet poured huge amounts of capital into anything related to it, almost regardless of their earnings prospects. Technology, telecommunications and Internet stocks thus rose to extraordinary multiples of their earnings and revenues. Many of the major technology companies also benefited from a surge in corporate capital spending--particularly from telecommunications companies. While these companies used cheap and abundant capital to expand capacity to meet growing demand, the flow of capital into basic industries slowed to a trickle. Ultimately, the disproportionate share of capital lavished on technology-related stocks created imbalances that were untenable: technology companies became burdened with too much capacity, just as demand for their products began to slow. Thus, in March 2000, the Internet bubble started to deflate. Since then, technology stocks have posted enormous declines and many so-called "Old Economy" stocks have rallied sharply (despite a small reversal in April). History shows, however, that distortions associated with bubbles can take years to unwind, and that value recoveries can be large and sustained. Thus, the Fund emphasizes many "Old Economy" stocks. The Fund bought a variety of attractive, low-priced stocks, with emphasis on the industrial com- - -------------------------------------------------------------------------------- 2 o ALLIANCEBERNSTEIN VALUE FUND ---------------------- LETTER TO SHAREHOLDERS ---------------------- modities, energy, railroads, insurance, banking, utilities and retailing industries. While diverse in character, most of these industries have shared one common factor in recent years: a shortage of capital. Starved for funds during the Internet boom, they were forced to exercise restraint in capital spending. As a result, these industries added very little new capacity--even in cases where demand was growing. Thus, these companies are benefiting from firmer prices than they have in the past, and their earnings should rebound sharply when economic growth accelerates. Strategic Themes Nowhere are the imbalances created by the Internet bubble more apparent than in the energy sector, particularly in natural gas, where the supply/demand situation is extremely tight. A surge in construction of gas-fired electric power plants, coupled with only marginal growth in natural gas production, has already caused prices to rise dramatically over the past year. Similarly, the Fund emphasizes producers of industrial commodities-- particularly chemicals and paper--which became capacity constrained as a result of unusual producer discipline in capital spending. Rather than build new plants when product prices were rising, most companies grew through acquisition, and many shut down inefficient plants. As a result, supplies are tight, and these companies are positioned to weather the current U.S. economic slowdown better than they did in prior periods of economic weakness. Once economic growth accelerates, their earnings should rebound swiftly. In the finance sector, which accounts for about one-third of the Fund's assets, the Fund emphasizes consumer-oriented banks and savings and loans. These stocks are inexpensive due to concerns that consumer credit losses will skyrocket if a full-blown recession develops. We acknowledge this risk, and have built it into our valuation of these stocks. However, banks' net interest margins (the difference between their short-term borrowing rates and their longer-term lending rates) have improved dramatically, thanks to multiple rate cuts by the Federal Reserve this year. If credit losses were to rise substantially, the wider margins should provide a cushion to earnings. The Fund has avoided high-priced investment banks and brokerages because their earnings are too dependent on capital markets activity. The Fund also emphasizes electric utilities. Many stocks in this industry traded off as news of the crisis in California raised concerns that paying high prices for natural gas or electricity - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 3 - ---------------------- LETTER TO SHAREHOLDERS - ---------------------- could destroy their profits. We have purchased, however, a group of electric companies that either benefit from high prices because they sell electricity to other utilities or are not hurt by them because they have long-term contracts to buy at low prices or because they can pass these costs on to their customers. Another key element of the Fund's strategy is its underweight position in technology and telecommunications stocks. Although share prices for many of these stocks have collapsed since the Internet bubble began to deflate in March 2000, their earnings prospects have also dropped. Our research indicates that it will be some time before the excess capacity built during the Internet bubble is fully absorbed. The firm's analysts, however, are searching these industries for good technology and telecommunications companies whose stock prices have fallen too far relative to their long-term earnings potential. Outlook The setback for value in April is not unusual in value recoveries which tend to be choppy. This current value cycle has further to go, in our view. Even after last year's rally, the value opportunity, as we measure it, remains above average, indicating there is still ample room to deliver premium returns through value-oriented stock selection. - -------------------------------------------------------------------------------- 4 o ALLIANCEBERNSTEIN VALUE FUND ---------------------- LETTER TO SHAREHOLDERS ---------------------- [PHOTO] John D. Carifa [PHOTO] Marilyn Fedak [PHOTO] Steven Pisarkiewicz Portfolio Managers, Ms. Fedak and Mr. Pisarkiewicz, have 45 years of combined investment experience. We thank you for your interest and investment in AllianceBernstein Value Fund. We look forward to reporting to you on the Fund's performance in the future. Sincerely, /s/ John D. Carifa John D. Carifa Chairman and President /s/ Marilyn Fedak Marilyn Fedak Vice President /s/ Steven Pisarkiewicz Steven Pisarkiewicz Vice President - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 5 - ----------------- PORTFOLIO SUMMARY - ----------------- PORTFOLIO SUMMARY May 31, 2001 (unaudited) INCEPTION DATES PORTFOLIO STATISTICS Class A Shares Net Assets ($mil): $97.9 3/29/01 Class B Shares 3/29/01 Class C Shares 3/29/01 SECTOR BREAKDOWN 30.5% Financial 9.6% Energy 9.5% Utilities 9.0% Consumer Cyclicals [PIE CHART OMITTED] 7.0% Consumer Staples 5.9% Consumer Growth 5.9% Industrial Commodities 5.8% Capital Equipment 2.5% Technology 2.0% Services 1.0% Non-Financial 11.3% Short-Term HOLDING TYPE 88.7% Equity [PIE CHART OMITTED] 11.3% Short-Term All data as of May 31, 2001. The Fund's sector breakdown and holding type are expressed as a percentage of total investments and may vary over time. - -------------------------------------------------------------------------------- 6 o ALLIANCEBERNSTEIN VALUE FUND ------------------ INVESTMENT RESULTS ------------------ INVESTMENT RESULTS CUMULATIVE TOTAL RETURNS AS OF MAY 31, 2001 Class A Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge Since Inception* 6.70% 2.20% Class B Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge Since Inception* 6.70% 2.70% Class C Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge Since Inception* 6.60% 5.60% SEC CUMULATIVE TOTAL RETURNS (WITH SALES CHARGES) AS OF THE MOST RECENT QUARTER-END (JUNE 30, 2001) Class A Class B Class C Shares Shares Shares - -------------------------------------------------------------------------------- Since Inception* 1.24% 1.60% 4.60% The Fund's investment results represent cumulative total returns. The returns reflect reinvestment of dividends and/or capital gains distributions in additional shares without and with 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 this class. The Fund can invest in foreign securities which may magnify fluctuations due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. 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 date for all share classes: 3/29/01. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 7 - -------------------- TEN LARGEST HOLDINGS - -------------------- TEN LARGEST HOLDINGS May 31, 2001 (unaudited) Percent of Companies Value Net Assets - ----------------------------------------------------------------------------- Exxon Mobil Corp. $ 3,656,500 3.8% - ----------------------------------------------------------------------------- Citigroup, Inc. 3,146,750 3.2 - ----------------------------------------------------------------------------- Verizon Communications, Inc. 2,506,645 2.6 - ----------------------------------------------------------------------------- SBC Communications, Inc. 2,075,010 2.1 - ----------------------------------------------------------------------------- Philip Morris Companies, Inc. 1,989,567 2.0 - ----------------------------------------------------------------------------- American International Group, Inc. 1,798,200 1.8 - ----------------------------------------------------------------------------- Bank of America Corp. 1,765,650 1.8 - ----------------------------------------------------------------------------- Federal National Mortgage Assn. 1,525,140 1.6 - ----------------------------------------------------------------------------- Wells Fargo & Co. 1,478,312 1.5 - ----------------------------------------------------------------------------- Johnson & Johnson 1,260,350 1.3 - ----------------------------------------------------------------------------- $21,202,124 21.7% MAJOR PORTFOLIO CHANGES March 29, 2001(a) to May 31, 2001 (unaudited) ----------------------------------- Shares ----------------------------------- Purchases Bought Holdings 5/31/01 - ----------------------------------------------------------------------------- American International Group, Inc. 22,200 22,200 - ----------------------------------------------------------------------------- Bank of America Corp. 29,800 29,800 - ----------------------------------------------------------------------------- Citigroup, Inc. 61,400 61,400 - ----------------------------------------------------------------------------- Exxon Mobil Corp. 41,200 41,200 - ----------------------------------------------------------------------------- Federal National Mortgage Assn. 18,500 18,500 - ----------------------------------------------------------------------------- Johnson & Johnson 13,000 13,000 - ----------------------------------------------------------------------------- Philip Morris Cos., Inc. 38,700 38,700 - ----------------------------------------------------------------------------- SBC Communications, Inc. 48,200 48,200 - ----------------------------------------------------------------------------- Verizon Communications, Inc. 45,700 45,700 - ----------------------------------------------------------------------------- Wells Fargo & Co. 31,400 31,400 - ----------------------------------------------------------------------------- (a) Commencement of operations. - -------------------------------------------------------------------------------- 8 o ALLIANCEBERNSTEIN VALUE FUND ------------------------ PORTFOLIO OF INVESTMENTS ------------------------ PORTFOLIO OF INVESTMENTS May 31, 2001 (unaudited) Company Shares Value - ----------------------------------------------------------------------------- COMMON STOCKS-87.1% Financial-30.0% Banks - NYC-4.2% Bank of New York Co., Inc. ................. 2,500 $ 136,525 Citigroup, Inc. ............................ 61,400 3,146,750 J. P. Morgan Chase & Co. ................... 17,100 840,465 --------------- 4,123,740 --------------- Diversified Financial-2.0% Lehman Brothers Holdings, Inc. ............. 6,600 472,626 Merrill Lynch & Co., Inc. .................. 14,800 961,556 Morgan Stanley Dean Witter & Co. ........... 8,700 565,587 --------------- 1,999,769 --------------- Finance - Personal Loans-0.7% American Express Co. ....................... 6,200 261,144 Countrywide Credit Industries, Inc. ........ 11,600 449,268 --------------- 710,412 --------------- Life Insurance-1.9% American General Corp. ..................... 7,000 316,610 John Hancock Financial Services, Inc. ...... 7,100 281,231 Lincoln National Corp. ..................... 4,900 241,276 MetLife, Inc. .............................. 16,600 528,710 Torchmark Corp. ............................ 11,900 451,248 --------------- 1,819,075 --------------- Major Regional Banks-11.2% AmSouth Bancorp. ........................... 28,200 518,598 Bank of America Corp. ...................... 29,800 1,765,650 Bank One Corp. ............................. 24,800 982,080 Charter One Financial, Inc. ................ 16,700 505,175 FleetBoston Financial Corp. ................ 24,100 1,002,319 KeyCorp. ................................... 21,600 513,648 National City Corp. ........................ 24,100 706,130 Regions Financial Corp. .................... 19,100 592,673 SouthTrust Corp. ........................... 22,000 549,340 SunTrust Banks, Inc. ....................... 10,000 614,200 UnionBanCal Corp. .......................... 14,500 465,450 Union Planters Corp. ....................... 12,300 504,300 U.S. Bancorp................................ 7,100 158,330 Wachovia Corp. ............................. 8,600 579,210 Wells Fargo & Co. .......................... 31,400 1,478,312 --------------- 10,935,415 --------------- Multi-Line Insurance-3.0% Aetna, Inc.(a).............................. 20,000 467,000 American International Group, Inc. ......... 22,200 1,798,200 CIGNA Corp. ................................ 6,800 642,396 --------------- 2,907,596 --------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 9 - ------------------------ PORTFOLIO OF INVESTMENTS - ------------------------ Company Shares Value - ----------------------------------------------------------------------------- Property/Casualty Insurance-2.8% Allstate Corp. ............................. 19,000 $ 855,380 Aon Corp. .................................. 9,600 336,000 Chubb Corp. ................................ 7,900 595,265 St. Paul Companies, Inc. ................... 10,000 506,000 XL Capital, Ltd. Cl.A....................... 5,900 469,050 --------------- 2,761,695 --------------- Savings & Loan-4.2% Federal Home Loan Mortgage Corp. ........... 16,500 1,092,300 Federal National Mortgage Assn. ............ 18,500 1,525,140 Golden West Financial Corp. ................ 9,100 580,125 Washington Mutual, Inc. .................... 24,650 878,033 --------------- 4,075,598 --------------- 29,333,300 --------------- Energy-9.5% Oils - Integrated Domestic-3.4% Amerada Hess Corp. ......................... 5,400 462,456 Ashland, Inc. .............................. 10,800 448,416 Kerr-McGee Corp. ........................... 6,300 438,921 Occidental Petroleum Corp. ................. 16,300 488,511 Phillips Petroleum Co. ..................... 9,100 589,134 Sunoco, Inc. ............................... 9,900 386,100 Unocal Corp. ............................... 14,100 544,965 --------------- 3,358,503 --------------- Oils - Integrated International-6.1% Chevron Corp. .............................. 11,400 1,094,970 Conoco, Inc. Cl.A........................... 13,900 429,788 Exxon Mobil Corp. .......................... 41,200 3,656,500 Texaco, Inc. ............................... 10,200 728,280 --------------- 5,909,538 --------------- 9,268,041 --------------- Utilities-9.4% Electric Companies-3.5% Ameren Corp. ............................... 11,200 499,520 American Electric Power Co., Inc. .......... 11,800 592,360 Cinergy Corp. .............................. 6,000 212,100 CMS Energy Corp. ........................... 11,100 329,337 Consolidated Edison, Inc. .................. 13,400 524,610 FirstEnergy Corp. .......................... 14,600 447,490 The Southern Co. ........................... 22,700 534,358 Wisconsin Energy Corp. ..................... 10,500 244,650 --------------- 3,384,425 --------------- - -------------------------------------------------------------------------------- 10 o ALLIANCEBERNSTEIN VALUE FUND ------------------------ PORTFOLIO OF INVESTMENTS ------------------------ Company Shares Value - ----------------------------------------------------------------------------- Telephone-5.9% AT&T Corp. ................................. 30,100 $ 637,217 BellSouth Corp. ............................ 13,700 564,851 SBC Communications, Inc. ................... 48,200 2,075,010 Verizon Communications, Inc. ............... 45,700 2,506,645 --------------- 5,783,723 --------------- 9,168,148 --------------- Consumer Cyclicals-8.8% Apparel Manufacturing-0.9% Sara Lee Corp. ............................. 22,700 427,668 V. F. Corp. ................................ 11,000 454,960 --------------- 882,628 --------------- Autos & Auto Parts-1.7% Ford Motor Co. ............................. 9,700 236,195 General Motors Corp. ....................... 3,300 187,770 Genuine Parts Co. .......................... 12,800 365,696 Johnson Controls, Inc. ..................... 3,200 225,280 Snap-On, Inc. .............................. 11,400 328,320 Visteon Corp. .............................. 20,000 344,400 --------------- 1,687,661 --------------- Home Furnishings-0.4% Leggett & Platt, Inc. ...................... 15,600 341,952 --------------- Hotel/Motel-0.3% Hilton Hotels Corp. ........................ 26,800 332,052 --------------- Household - Appliances/Durables-1.0% Black & Decker Corp. ....................... 13,000 515,450 Whirlpool Corp. ............................ 7,700 484,253 --------------- 999,703 --------------- Retailers-2.8% AutoZone, Inc.(a)........................... 6,000 198,420 Big Lots, Inc.(a)........................... 9,900 128,502 Federated Department Stores, Inc.(a)........ 10,500 470,400 Limited, Inc. .............................. 16,100 262,430 May Department Stores Co. .................. 17,900 585,330 Sears, Roebuck & Co. ....................... 14,500 578,260 TJX Companies, Inc. ........................ 14,500 485,170 --------------- 2,708,512 --------------- Tires & Rubber Goods-0.5% The Goodyear Tire & Rubber Co. ............. 18,400 535,624 --------------- Miscellaneous-1.2% Brunswick Corp. ............................ 10,400 235,040 Fortune Brands, Inc. ....................... 14,000 480,900 Newell Rubbermaid, Inc. .................... 16,200 409,374 --------------- 1,125,314 --------------- 8,613,446 --------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 11 - ------------------------ PORTFOLIO OF INVESTMENTS - ------------------------ Company Shares Value - ----------------------------------------------------------------------------- Consumer Staples-6.8% Beverages - 0.3% Anheuser-Busch Companies, Inc. ............. 800 $ 35,200 PepsiCo, Inc. .............................. 6,100 273,036 --------------- 308,236 --------------- Foods-2.7% ConAgra Foods, Inc. ........................ 27,800 579,630 H.J. Heinz Co. ............................. 11,500 498,065 Hormel Foods Corp. ......................... 12,100 285,439 IBP, Inc. .................................. 22,100 415,480 Kellogg Co. ................................ 16,800 448,896 Tyson Foods, Inc. Cl.A...................... 32,800 417,872 --------------- 2,645,382 --------------- Retail - Food-0.4% SUPERVALU, Inc. ............................ 28,100 437,236 --------------- Soaps & Household Chemicals-0.8% Procter & Gamble Co. ....................... 11,400 732,336 --------------- Sugar Refiners-0.6% Archer-Daniels-Midland Co. ................. 42,400 572,400 --------------- Tobacco-2.0% Philip Morris Companies, Inc. .............. 38,700 1,989,567 --------------- 6,685,157 --------------- Consumer Growth-5.8% Drugs-2.2% Bristol-Myers Squibb Co. ................... 14,700 797,328 Eli Lilly & Co. ............................ 2,300 194,810 Merck & Co., Inc. .......................... 9,700 708,003 Schering-Plough Corp. ...................... 9,900 415,305 --------------- 2,115,446 --------------- Entertainment-0.4% Walt Disney Co. ............................ 13,400 423,708 --------------- Hospital Supplies-2.2% Abbott Laboratories......................... 10,900 566,582 C.R. Bard, Inc. ............................ 5,400 304,830 Johnson & Johnson........................... 13,000 1,260,350 --------------- 2,131,762 --------------- Other Medical-0.3% McKesson HBOC, Inc. ........................ 9,700 335,329 --------------- Publishing-0.5% R. R. Donnelly & Sons Co. .................. 14,700 445,410 --------------- - -------------------------------------------------------------------------------- 12 o ALLIANCEBERNSTEIN VALUE FUND ------------------------ PORTFOLIO OF INVESTMENTS ------------------------ Company Shares Value - ----------------------------------------------------------------------------- Radio - TV Broadcasting-0.2% AT&T Corp.-Liberty Media Group Cl.A(a)...... 8,000 $ 134,800 Comcast Corp. Cl.A(a)....................... 2,100 86,016 --------------- 220,816 --------------- 5,672,471 --------------- Industrial Commodities-5.8% Aluminum-0.3% Alcan, Inc. (Canada)........................ 5,100 228,480 --------------- Chemicals-4.0% Cabot Corp. ................................ 13,200 495,132 Dow Chemical Co. ........................... 24,600 880,926 E. I. du Pont de Nemours & Co. ............. 17,600 816,640 Eastman Chemical Co. ....................... 10,400 525,616 Great Lakes Chemical Corp. ................. 6,200 212,350 Hercules, Inc. ............................. 13,600 181,696 Lubrizol Corp. ............................. 9,100 282,373 PPG Industries, Inc. ....................... 4,300 239,080 Praxair, Inc. .............................. 6,000 301,740 --------------- 3,935,553 --------------- Containers - 0.3% Bemis Co., Inc. ............................ 4,500 171,045 Owens- Illinois, Inc.(a).................... 19,300 136,258 --------------- 307,303 --------------- Paper-1.2% Kimberly-Clark Corp. ....................... 500 30,225 Smurfit-Stone Container Corp.(a)............ 29,000 434,130 Temple-Inland, Inc. ........................ 8,000 424,880 Westvaco Corp. ............................. 12,200 310,368 --------------- 1,199,603 --------------- 5,670,939 --------------- Capital Equipment-5.7% Aerospace & Defense-1.3% Boeing Co. ................................. 4,300 270,427 Goodrich Corp. ............................. 11,300 472,114 Rockwell International Corp. ............... 5,300 249,100 TRW, Inc. .................................. 6,700 290,512 --------------- 1,282,153 --------------- Auto & Truck Parts-1.1% Cummins, Inc. .............................. 8,500 359,975 Dana Corp. ................................. 22,100 475,592 Eaton Corp. ................................ 2,700 211,140 --------------- 1,046,707 --------------- Defense-1.1% Lockheed Martin Corp. ...................... 15,100 578,179 Raytheon Co.(a)............................. 17,900 532,883 --------------- 1,111,062 --------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 13 - ------------------------ PORTFOLIO OF INVESTMENTS - ------------------------ Company Shares Value - ----------------------------------------------------------------------------- Electrical Equipment-1.5% Cooper Industries, Inc. .................... 12,800 $ 486,784 Emerson Electric Co. ....................... 4,900 331,779 General Electric Co. ....................... 2,500 122,500 Hubbell, Inc. Cl.B.......................... 12,000 346,200 Thomas & Betts Corp. ....................... 10,200 213,078 --------------- 1,500,341 --------------- Machinery-0.2% Briggs & Stratton Corp. .................... 4,500 194,715 --------------- Miscellaneous Capital Goods-0.5% Minnesota Mining and Manufacturing Co. ..... 1,300 154,154 Tyco International, Ltd. (Bermuda).......... 5,100 292,995 --------------- 447,149 --------------- 5,582,127 --------------- Technology-2.4% Computers-1.0% Hewlett-Packard Co. ........................ 6,000 175,920 International Business Machines Corp. ...... 2,400 268,320 NCR Corp.(a)................................ 6,500 304,785 Quantum Corp.-DLT & Storage Systems(a)...... 20,000 239,800 --------------- 988,825 --------------- Computer/Instrumentation-0.3% Arrow Electronics, Inc.(a).................. 13,500 339,930 --------------- Miscellaneous Industrial Technology-1.1% Avnet, Inc. ................................ 20,000 492,800 Ingram Micro, Inc. Cl.A(a).................. 21,300 282,225 Tech Data Corp.(a).......................... 10,300 309,206 --------------- 1,084,231 --------------- 2,412,986 --------------- Services-1.9% Railroads-1.9% Burlington Northern Santa Fe Corp. ......... 20,125 625,283 Norfolk Southern Corp. ..................... 26,375 584,734 Union Pacific Corp. ........................ 11,800 678,500 --------------- 1,888,517 --------------- Non-Financial-1.0% Building Materials-0.2% Masco Corp. ................................ 9,500 221,920 --------------- Forest Products-0.2% Louisiana-Pacific Corp. .................... 18,000 211,500 --------------- - -------------------------------------------------------------------------------- 14 o ALLIANCEBERNSTEIN VALUE FUND ------------------------ PORTFOLIO OF INVESTMENTS ------------------------ Shares or Principal Amount Company (000) Value - ----------------------------------------------------------------------------- Miscellaneous Building-0.6% National Service Industries, Inc. .......... 8,000 $ 202,800 The Sherwin-Williams Co. ................... 15,600 332,904 --------------- 535,704 --------------- 969,124 --------------- Total Common Stocks (cost $80,939,516)....................... 85,264,256 --------------- SHORT-TERM INVESTMENT-11.1% Time Deposit-11.1% State Street Euro Dollar 3.50%, 6/01/01 (amortized cost $10,884,000)............. $10,884 10,884,000 --------------- Total Investments-98.2% (cost $91,823,516)....................... 96,148,256 Other assets less liabilities-1.8%.......... 1,733,562 --------------- Net Assets-100%............................. $ 97,881,818 =============== (a) Non-income producing security. See notes to financial statements. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 15 - --------------------------------- STATEMENT OF ASSETS & LIABILITIES - --------------------------------- STATEMENT OF ASSETS & LIABILITIES May 31, 2001 (unaudited) Assets Investments in securities, at value (cost $91,823,516) $ 96,148,256 Cash ................................................ 729 Receivable for shares of beneficial interest sold.... 5,442,364 Dividends and interest receivable.................... 216,314 Deferred offering costs.............................. 107,148 --------------- Total assets......................................... 101,914,811 --------------- Liabilities Payable for investment securities purchased.......... 3,674,971 Advisory fee payable................................. 63,952 Distribution fee payable............................. 51,647 Payable for shares of beneficial interest redeemed... 28,102 Accrued expenses and other liabilities............... 214,321 --------------- Total liabilities.................................... 4,032,993 --------------- Net Assets........................................... $ 97,881,818 =============== Composition of Net Assets Shares of beneficial interest, at par................ $ 92 Additional paid-in capital........................... 93,503,290 Undistributed net investment income.................. 61,854 Accumulated net realized loss on investments......... (8,158) Net unrealized appreciation of investments........... 4,324,740 --------------- $ 97,881,818 =============== Calculation of Maximum Offering Price Class A Shares Net asset value and redemption price per share ($30,912,447 / 2,897,026 shares of beneficial interest issued and outstanding).................. $10.67 Sales charge--4.25% of public offering price......... .47 ------ Maximum offering price............................... $11.14 ====== Class B Shares Net asset value and offering price per share ($44,544,423 / 4,176,412 shares of beneficial interest issued and outstanding).................. $10.67 ====== Class C Shares Net asset value and offering price per share ($19,391,060 / 1,818,540 shares of beneficial interest issued and outstanding).................. $10.66 ====== Advisor Class Shares Net asset value, redemption and offering price per share ($3,033,888 / 283,797 shares of beneficial interest issued and outstanding).................. $10.69 ====== See notes to financial statements. - -------------------------------------------------------------------------------- 16 o ALLIANCEBERNSTEIN VALUE FUND ----------------------- STATEMENT OF OPERATIONS ----------------------- STATEMENT OF OPERATIONS March 29, 2001(a) to May 31, 2001 (unaudited) Investment Income Dividends (net of foreign taxes withheld of $115).................... $ 283,842 Interest................................ 60,008 $ 343,850 --------------- Expenses Advisory fee............................ 84,085 Distribution fee--Class A............... 10,098 Distribution fee--Class B............... 50,432 Distribution fee--Class C............... 24,129 Organization expenses................... 35,150 Custodian............................... 22,428 Amortization of offering expenses....... 22,348 Administrative.......................... 22,000 Transfer agency......................... 11,402 Audit and legal......................... 9,324 Printing................................ 6,930 Directors' fees......................... 3,339 Registration............................ 1,323 Miscellaneous........................... 1,008 --------------- Total expenses.......................... 303,996 Less: expenses waived by Adviser (See Note B)................. (22,000) --------------- Net expenses............................ 281,996 --------------- Net investment income................... 61,854 --------------- Realized and Unrealized Gain (Loss) on Investment Transactions Net realized loss on investment transactions......................... (8,158) Net change in unrealized appreciation/ depreciation of investments.......... 4,324,740 --------------- Net gain on investments................. 4,316,582 --------------- Net Increase in Net Assets from Operations...................... $ 4,378,436 =============== (a) Commencement of operations. See notes to financial statements. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 17 - ---------------------------------- STATEMENT OF CHANGES IN NET ASSETS - ---------------------------------- STATEMENT OF CHANGES IN NET ASSETS March 29, 2001(a) to May 31, 2001 (unaudited) =============== Increase (Decrease) in Net Assets from Operations Net investment income................................ $ 61,854 Net realized loss on investment transactions......... (8,158) Net change in unrealized appreciation/ depreciation of investments..................... 4,324,740 --------------- Net increase in net assets from operations........... 4,378,436 Transactions in Shares of Beneficial Interest Net increase......................................... 93,478,382 --------------- Total increase....................................... 97,856,818 Net Assets Beginning of period.................................. 25,000 --------------- End of period (including undistributed net investment income of $61,854)............... $ 97,881,818 =============== (a) Commencement of operations. See notes to financial statements. - -------------------------------------------------------------------------------- 18 o ALLIANCEBERNSTEIN VALUE FUND ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTES TO FINANCIAL STATEMENTS May 31, 2001 (unaudited) NOTE A Significant Accounting Policies AllianceBernstein Trust (the "Trust"), was organized as a Massachusetts business trust on December 12, 2000 and is registered under the Investment Company Act of 1940 as a diversified, open end management investment company. The Trust operates as a series company currently comprised of four funds (the "Funds"), the Global Value Fund, the International Value Fund, the Small Cap Value Fund and the Value Fund. Each Fund is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the Value Fund. The Fund commenced operations on March 29, 2001. The Value Fund (the "Fund") offers Class A, Class B, Class C and Advisor Class shares. Prior to commencement of operations on March 29, 2001, the Fund had no operations other than the sale to Alliance Capital Management L.P. (the "Adviser") of 2,480 shares of Class A and 10 shares of each of Class B and Class C for the aggregate amount of $24,800 for Class A shares and $100 for each of Class B and Class C shares on February 15, 2001. 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 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 accounting principles generally accepted in the United States, 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) or on The Nasdaq Stock Market, Inc. 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 - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 19 - ----------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- 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 (but excluding securities traded on The Nasdaq Stock Market, Inc.), 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. Fixed income securities may be valued on the basis of prices obtained from a pricing service when such prices are believed to reflect the fair market value of such securities. 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 gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of investments and foreign currency contracts, the holding of foreign currencies, currency gains and losses realized between the trade and settlement dates on foreign security transactions, and the difference between the amounts of dividends, interest and foreign taxes receivable recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation 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 company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. 4. Organization and Offering Expenses Organization expenses of $35,150 were charged to the Fund as incurred prior to commencement of operations. Offering expenses of $129,500 have been deferred and are being amortized on a straight-line basis over a one year period. 5. 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 - -------------------------------------------------------------------------------- 20 o ALLIANCEBERNSTEIN VALUE FUND ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- accretes discounts as adjustments to interest income. Investment gains and losses are determined on the identified cost basis. 6. 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 Advisor Class shares have no distribution fees. 7. 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 accounting principles generally accepted in the United States. 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"), a fee at an annual rate of .75% of the Fund's average daily net assets. Such fee is accrued daily and paid monthly. The Fund and the Adviser have entered into an Expense Limitation Agreement (the "Agreement"), dated January 31, 2001, under which the Adviser has agreed to waive its fees and, if necessary, reimburse expenses for the period from December 12, 2000 (date of organization of the Fund) to March 27, 2002, to the extent necessary to prevent total fund operating expenses from exceeding the annual rate of 2.50% of average daily net assets for Class A shares, 3.20% of average daily net assets for Class B shares and Class C shares and 2.20% for Advisor Class shares, respectively. Under the Agreement, any waivers or reimbursements made by the Adviser during this period are subject to repayment by the Fund in subsequent periods, but no later than March 27, 2004, provided that repayment does not result in the Fund's aggregate expenses in those subsequent periods exceeding the foregoing expense limitations. Further, the aggregate repayment to the Adviser will not exceed the sum of the Fund's organization costs and initial offering expenses. During the period ended May 31, 2001, the Value Fund repaid $35,150 of organization expenses to the Adviser. At May 31, 2001, there were no expenses waived and reimbursed by the Adviser that are subject to repayment. Pursuant to the Advisory agreement, the Adviser provides certain legal and accounting services for the Fund. For the period ended May 31, 2001, the Adviser agreed to waive its fees. Such waiver amounted to $22,000. The Fund compensates Alliance Global Investor Services, Inc., a wholly-owned - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 21 - ----------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- 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 $11,000 for the period ended May 31, 2001. Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund's shares. The Distributor has advised the Fund that it has received front-end sales charges of $11,283 from the sale of Class A shares and $8,567 and $1,640 in contingent deferred sales charges imposed upon redemptions by shareholders of Class B and Class C shares, respectively, for the period ended May 31, 2001. Brokerage commissions paid on investment transactions for the period ended May 31, 2001, amounted to $113,078, of which $65,485 was paid to Sanford C. Bernstein & Co. LLC, 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 distribution and servicing fees to the Distributor at an annual rate of up to .30% of the average daily net assets attributable to Class A shares and 1% of the average daily net assets attributable to Class B and Class C shares. There are no distribution and servicing fees 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 advised the Fund that it has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amount of $943,447 and $110,187 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 $83,036,408 and $449,668, respectively, for the period ended May 31, 2001. There were no purchases or sales of U.S. government or government agency obligations for the period ended May 31, 2001. At May 31, 2001, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation of investments was $4,997,292 and gross unrealized depreciation of investments was $672,552 resulting in net unrealized appreciation of $4,324,740, excluding foreign currency transactions. - -------------------------------------------------------------------------------- 22 o ALLIANCEBERNSTEIN VALUE FUND ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE E Shares of Beneficial Interest There is an unlimited number of $0.00001 par value shares of beneficial interest authorized, divided into four classes, designated Class A, Class B, Class C and Advisor Class shares. Transactions in shares of beneficial interest were as follows: ------------------- ------------------ Shares Amount ------------------- ------------------ March 29, 2001(a) March 29, 2001(a) to May 31, 2001 to May 31, 2001 (unaudited) (unaudited) ------------------------------------------ Class A Shares sold 3,041,102 $ 31,038,030 - ------------------------------------------------------------------------------- Shares redeemed (146,556) (1,499,430) - ------------------------------------------------------------------------------- Net increase 2,894,546 $ 29,538,600 =============================================================================== Class B Shares sold 4,209,764 $ 42,948,255 - ------------------------------------------------------------------------------- Shares redeemed (33,362) (342,890) - ------------------------------------------------------------------------------- Net increase 4,176,402 $ 42,605,365 =============================================================================== Class C Shares sold 1,863,347 $ 18,920,768 - ------------------------------------------------------------------------------- Shares redeemed (44,817) (457,645) - ------------------------------------------------------------------------------- Net increase 1,818,530 $ 18,463,123 =============================================================================== Advisor Class Shares sold 303,488 $ 3,077,699 - ------------------------------------------------------------------------------- Shares redeemed (19,691) (206,405) - ------------------------------------------------------------------------------- Net increase 283,797 $ 2,871,294 =============================================================================== 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 period ended May 31, 2001. (a) Commencement of operations. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 23 - -------------------- FINANCIAL HIGHLIGHTS - -------------------- FINANCIAL HIGHLIGHTS Selected Data For A Share Of Beneficial Interest Outstanding Throughout The Period.
----------- ----------- ---------- ------------- Class A Class B Class C Advisor Class ----------- ----------- ---------- ------------- March 29, March 29, March 29, March 29, 2001(a) to 2001(a) to 2001(a) to 2001(a) to May 31, May 31, May 31, May 31, 2001 2001 2001 2001 (unaudited) (unaudited) (unaudited) (unaudited) ----------------------------------------------------- Net asset value, beginning of period ..................... $10.00 $10.00 $10.00 $10.00 ----------------------------------------------------- Income From Investment Operations Net investment income(b)(c) ..... .02 .01 .01 .03 Net realized and unrealized gain on investment transactions .... .65 .66 .65 .66 ----------------------------------------------------- Net increase in net asset value from operations ............... .67 .67 .66 .69 ----------------------------------------------------- Net asset value, end of period .. $10.67 $10.67 $10.66 $10.69 ===================================================== Total Return Total investment return based on net asset value(d) ............ 6.70% 6.70% 6.60% 6.90% Ratios/Supplemental Data Net assets, end of period (000's omitted) ............... $30,912 $44,544 $19,391 $3,034 Ratio to average net assets of: Expenses, net of waivers(e) ... 2.07% 2.74% 2.84% 1.50% Expenses, before waivers(e) ... 2.27% 2.94% 3.04% 1.70% Net investment income(e) ...... .99% .36% .19% 1.52% Portfolio turnover rate ......... 1% 1% 1% 1%
(a) Commencement of operations. (b) Based on average shares outstanding. (c) Net of expenses waived by the Adviser. (d) 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 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. (e) Annualized. - -------------------------------------------------------------------------------- 24 o ALLIANCEBERNSTEIN VALUE FUND ---------------------------- GLOSSARY OF INVESTMENT TERMS ---------------------------- GLOSSARY OF INVESTMENT TERMS benchmark A standard by which a fund's performance can be measured. A benchmark is usually an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman Brothers Aggregate Bond Index. equity Another term for stock. Federal Reserve Board The seven-member board that oversees Federal Reserve Banks, establishes monetary policy and monitors the country's economic state. index A compilation of securities of similar types of companies that is used to measure the investment performance of securities within that specific market. An index is often used as a benchmark for a mutual fund. An investor cannot invest directly in an index. net asset value The value of a mutual fund's total assets, minus its liabilities, divided by the number of shares outstanding. portfolio The collection of securities that make up a fund's or an investor's investments. share A unit which represents ownership in a mutual fund or stock. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 25 - ---------------- ALLIANCE CAPITAL - ---------------- ALLIANCE CAPITAL The Investment Professional's Choice Alliance Capital is a leading global investment management firm with approximately $433 billion in assets under management. In recognition of our far-reaching investment capabilities, Alliance Capital has been selected by employee benefit plans for 56 of the FORTUNE 100 companies and public retirement funds in 36 states as well as by hundreds of foundations, endowments and foreign institutions. By sharing this institutional money management experience with millions of mutual fund investors as well, Alliance stands out as a "manager of choice" for thousands of investment professionals around the world. At Alliance Capital, we place a premium on investment research. We carefully select securities based on our proprietary research, conducted by 620 investment professionals in 35 cities and 19 countries. Our commitment to this process means that our mutual fund shareholders have their portfolios managed by the same experienced analysts and portfolio managers who manage the pension funds of some of America's largest institutional investors. All information on Alliance Capital is as of 3/31/01. - -------------------------------------------------------------------------------- 26 o ALLIANCEBERNSTEIN VALUE FUND -------------------------------- ALLIANCE CAPITAL AT YOUR SERVICE -------------------------------- ALLIANCE CAPITAL AT YOUR SERVICE At Alliance Capital, shareholder satisfaction is among our top priorities. That is why we provide our shareholders with a wide variety of products and time-saving services. o Low Minimum Investments You can begin investing in Alliance Capital funds with as little as $250 (except for Alliance Select Investor Series Biotechnology Portfolio, Alliance Select Investor Series Premier Portfolio, Alliance Select Investor Series Technology Portfolio, and Alliance Select Investor Series Small Cap Growth Portfolio which generally have a $10,000 minimum initial investment) and may make subsequent investments of $50 or more. o Automatic Reinvestment You may choose to reinvest fund dividend and capital-gains distributions automatically at no charge. o Automatic Investment Program Build your investment account by having money automatically transferred from your bank account on a regular basis. o Dividend Direction Plans You may cross-invest dividends from one fund into the same class of shares in any other fund without incurring a sales charge--a good way to diversify your assets. o Auto Exchange You may choose to automatically exchange money from one Alliance Capital fund to another on a regular basis. This can be a good way to dollar cost average*, helping you to invest with discipline. o Systematic Withdrawals Regular checks for specified amounts can be sent to you or to your brokerage or bank account. o E-Statements Sign up to view your quarterly account statement on-line, rather than wait to receive paper copies in the mail--it's easy, convenient and saves you time and storage space. o A Choice of Purchase Plans Most funds are available in A, B, and C Class shares. Many funds are also available in Advisor Class shares. o Telephone Transaction Purchases, transfers and redemptions can be made by calling (800) 221-5672. Our knowledgeable representatives are available to assist you Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time. o Alliance Answer: 24-Hour Information For your convenience, our computerized audio response system is available to you 24-hours a day by calling (800) 251-0539. Using any touch tone phone, you can hear share prices, get account balances, review details of your last transaction, obtain dividend information, order statements/checkbooks, review fund objectives, and Watchlist information, order additional copies of statements and request additional year-end tax forms (available from February 1 to May 31). o The Alliance Advance A quarterly newsletter discussing investment strategies, economic news and other mutual fund matters. o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here, you can access updated account information, including daily pricing, make additional investments, exchange between Alliance funds and view fund performance. * Dollar cost averaging does not assure a profit nor protect against loss in a declining market. Since this strategy involves continuous investments in securities, regardless of fluctuating prices, investors should consider their financial ability to invest during periods of low price levels. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 27 - ------------------ BOARD OF DIRECTORS - ------------------ BOARD OF DIRECTORS John D. Carifa, Chairman and President Ruth Block David H. Dievler John H. Dobkin William H. Foulk, Jr. Clifford L. Michel Donald J. Robinson OFFICERS Kathleen A. Corbet, Senior Vice President Marilyn G. Fedak, Vice President Steven Pisarkiewicz, Vice President Edmund P. Bergan, Jr., Secretary Mark D. Gersten, Treasurer and 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 Legal Counsel Ropes & Gray One International Place Boston, MA, 02110 Independent Auditors Ernst & Young LLP 787 Seventh Avenue New York, NY 10019 Transfer Agent Alliance Global Investor Services, Inc. P.O. Box 1520 Secaucus, NJ 07096-1520 Toll Free: (800) 221-5672 - -------------------------------------------------------------------------------- 28 o ALLIANCEBERNSTEIN VALUE FUND -------------------------------- ALLIANCE CAPITAL FAMILY OF FUNDS -------------------------------- ALLIANCE CAPITAL FAMILY OF FUNDS Domestic Equity Funds Growth & Income Fund Growth Fund Health Care Fund Premier Growth Fund Quasar Fund Technology Fund The Alliance Fund Global & International Equity Funds All-Asia Investment Fund Global Small Cap Fund Greater China '97 Fund International Fund International Premier Growth Fund New Europe Fund Worldwide Privatization Fund AllianceBernstein Value Funds Disciplined Value Fund Global Value Fund International Value Fund Real Estate Investment Fund Small Cap Value Fund Utility Income Fund Value Fund Select Investor Series Biotechnology Portfolio Premier Portfolio Small Cap Growth Portfolio Technology Portfolio Asset Allocation Funds Balanced Shares Conservative Investors Fund Growth Investors Fund Fixed Income Funds Corporate Bond Portfolio Global Dollar Government Fund Global Strategic Income Trust High Yield Fund Multi-Market Strategy Trust North American Government Income Trust Quality Bond Portfolio U.S. Government Portfolio Municipal Income Funds National Insured National Arizona California Insured California Florida Massachusetts Michigan Minnesota New Jersey New York Ohio Pennsylvania Virginia Closed-End Funds All-Market Advantage Fund The Austria Fund ACM Government Income Fund ACM Government Opportunity Fund The Korean Investment Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund The Southern Africa Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II Alliance also offers AFD Exchange Reserves, which serves as the money market fund exchange vehicle for the Alliance mutual funds. To obtain a prospectus for any Alliance Capital fund, call your investment professional, or call Alliance at (800) 227-4618. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN VALUE FUND o 29 AllianceBernstein Value Fund 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 Alliance Capital [LOGO](R) The Investment Professional's Choice (R) These registered service marks used under license from the owner, Alliance Capital Management L.P. BVFSR501 -----END PRIVACY-ENHANCED MESSAGE-----