UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-6251
AllianceBernstein Multi-Market Strategy Trust, Inc.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2003
Date of reporting period: October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] AllianceBernstein(SM)
Investment Research and Management
AllianceBernstein Multi-Market
Strategy Trust
Emerging Market Fixed Income
Annual Report--October 31, 2003
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.
You may obtain a description of the Fund's proxy voting policies and procedures,
without charge, upon request by visiting Alliance Capital's web site at
www.investor.alliancecapital.com or on the Securities and Exchange Commission's
web site at http://www.sec.gov, or by calling Alliance Capital at (800)
227-4618.
AllianceBernstein Investment Research and Management, Inc., the principal
underwriter of the AllianceBernstein mutual funds and an affiliate of Alliance
Capital Management L.P., the manager of the funds, is a member of the NASD.
December 26, 2003
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Multi-Market Strategy Trust (the "Fund") for the annual
reporting period ended October 31, 2003.
Investment Objective and Policies
This open-end fund seeks the highest level of current income that is available,
consistent with what we consider to be prudent investment risk, from a portfolio
of high-quality debt securities having remaining maturities of not more than
five years. The Fund seeks investment opportunities in foreign, as well as
domestic, securities markets. Normally at least 70% of the Fund's assets will be
invested in debt securities denominated in foreign currencies. The Fund limits
its investments in a single currency other than the U.S. dollar to 25% of its
net assets, except for the euro, in which the Fund may invest up to 50% of its
net assets.
Investment Performance
The following table provides the Fund's performance during the six- and 12-month
periods ended October 31, 2003. For comparison, we have included the performance
for the Merrill Lynch 1-5 Year Government Bond Index, a standard measure of the
performance of a basket of unmanaged short-term Treasury securities, and the
Lipper Short World Multi-Market Income Funds Average, which reflects the average
performance of funds with similar investment objectives to the Fund.
INVESTMENT RESULTS*
Periods Ended October 31, 2003
=============================
Returns
=============================
6 Months 12 Months
- --------------------------------------------------------------------------------
AllianceBernstein
Multi-Market
Strategy Trust
Class A -0.03% 1.88%
- --------------------------------------------------------------------------------
Class B -0.38% 1.17%
- --------------------------------------------------------------------------------
Class C -0.55% 1.17%
- --------------------------------------------------------------------------------
Merrill Lynch
1-5 Year
Government
Bond Index 0.51% 2.15%
- --------------------------------------------------------------------------------
Lipper Short
World Multi-
Market Income
Funds Average 1.83% 6.79%
- --------------------------------------------------------------------------------
* The Fund's investment results are for the periods shown and are based on
the net asset value (NAV) of each class of shares as of October 31, 2003.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. 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 include the reinvestment of any distributions
paid during each period. Past performance is no guarantee of future results.
The unmanaged Merrill Lynch 1-5 Year Government Bond Index does not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The Index consists of short-term U.S. Treasury securities maturing
in one to five years. The
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 1
Lipper Short World Multi-Market Income Funds Average (the "Lipper Average")
reflects performance of 8 funds during the six- and 12-month periods ended
October 31, 2003. The funds that comprise the Lipper Average have generally
similar investment objectives to the Fund, although investment policies for
the various funds may differ. An investor cannot invest directly in an index
or an average, and its results are not indicative of any specific investment,
including AllianceBernstein Multi-Market Strategy Trust.
Additional investment results appear on page 5.
During the 12-month period ended October 31, 2003, the Fund underperformed the
Merrill Lynch 1-5 Year Government Bond Index and the Lipper Short World
Multi-Market Income Funds Average (an average of funds with generally similar
investment objectives to the Fund). A significant contributor to the
underperformance relative to the Index for the reporting period was the Fund's
underweighted position in U.S. Treasury securities. The Index, which measures
U.S. government securities only, outperformed the Fund's non-U.S. government
bonds. In addition, the U.S. dollar weakened against most major currencies
during the period and our hedging decisions limited the Fund's gains on currency
exposure.
Offsetting some of the Fund's underperformance was our increased position in
Canadian dollar-denominated debt. We took advantage of further weakening of the
U.S. dollar with advantageous trades versus the Canadian dollar. The Canadian
dollar was one of the best performing currencies in 2003, rising 20% from the
beginning of 2003 from 1.57 C$/US$ to 1.38 C$/US$ by the end of third quarter.
Market Review
During the annual period, we took advantage of a weakening U.S. dollar and
prospects of further weakening with advantageous trades versus the Canadian
dollar and the euro. We reduced the Fund's exposure to the Australian dollar in
response to data suggesting that Australia's domestic economy was weaker than
expected. We increased the Fund's position in euro forward contracts versus the
U.S. dollar hedges to take advantage of their shifting values over the period.
We also introduced Chilean sovereign debt to the portfolio. Late in the period,
we initiated positions in Japanese government and corporate securities.
Furthermore, we increased the Fund's position in Canadian government securities.
The Bank of Canada slashed interest rates by 50 basis points in the third
quarter of 2003, undoing the rate hikes it enacted in the first half of the
year. In addition, the Canadian economy is struggling to accommodate the 20%
appreciation in the Canadian dollar year-to-date. The appreciation has weakened
key pillars that supported the strong economic performance of the preceding two
years: productivity and the price of labor. We further sought to diversify the
Fund's holdings with investments in U.K. government securities.
- --------------------------------------------------------------------------------
2 o AllianceBernstein Multi-Market Strategy Trust
PERFORMANCE UPDATE
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST CLASS A
GROWTH OF A $10,000 INVESTMENT
10/31/93 TO 10/31/03
AllianceBernstein Multi-Market Strategy Trust Class A: $14,210
Merrill Lynch 1-5 Year Government Bond Index: $17,750
Lipper Short World Multi-Market Income Funds Average: $14,614
[TABLE BELOW REPRESENTS MOUNTAIN CHART IN PRINTED REPORT]
AllianceBernstein Merrill Lynch Lipper Short
Multi-Market Strategy 1-5 Year Government World Multi-Market
Trust Class A Bond Index Income Funds Average
- --------------------------------------------------------------------------------
10/31/93 $ 9,572 $10,000 $10,000
10/31/94 $ 9,320 $ 9,970 $ 9,947
10/31/95 $ 8,717 $11,004 $ 9,966
10/31/96 $10,144 $11,639 $10,916
10/31/97 $10,937 $12,434 $11,393
10/31/98 $11,691 $13,518 $12,146
10/31/99 $12,036 $13,788 $12,284
10/31/00 $12,417 $14,653 $12,378
10/31/01 $13,445 $16,419 $13,296
10/31/02 $13,948 $17,377 $13,982
10/31/03 $14,210 $17,750 $14,614
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Multi-Market Strategy Trust Class A shares (from 10/31/93 to
10/31/03) as compared to the performance of the Merrill Lynch 1-5 Year
Government Bond Index, an appropriate broad-based index, and the Lipper Short
World Multi-Market Income Funds Average. Returns do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares. The chart reflects the deduction of the maximum 4.25% sales charge
from the initial $10,000 investment in the Fund and assumes the reinvestment of
dividends and capital gains. Performance for Class B and Class C shares will
vary from the results shown above due to differences in expenses charged to
these classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Merrill Lynch 1-5 Year Government Bond Index does not reflect fees
and expenses associated with the active management of a mutual fund portfolio.
The Index consists of short-term U.S. Treasury securities maturing in one to
five years. The Lipper Short World Multi-Market Income Funds Average reflects
performance of 5 funds (based on the number of funds in the average from
10/31/93 to 10/31/03). The funds have generally similar investment objectives to
AllianceBernstein Multi-Market Strategy Trust, although investment policies for
the various funds may differ. Lipper results include fees and expenses. An
investor cannot invest directly in an index or an average, and its results are
not indicative of any specific investment, including AllianceBernstein
Multi-Market Strategy Trust.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 3
PORTFOLIO SUMMARY
October 31, 2003
INCEPTION DATES
Class A Shares
5/29/91
Class B Shares
5/29/91
Class C Shares
5/3/93
PORTFOLIO STATISTICS
Net Assets ($mil): $251.9
COUNTRY BREAKDOWN
27.7% United States
13.7% Canada
12.9% Italy
8.4% Sweden
8.3% United Kingdom
5.1% Denmark [PIE CHART OMITTED]
5.1% Australia
4.8% Spain
3.4% Germany
3.1% Netherlands
2.6% Belgium
1.8% Japan
1.7% Poland
1.4% Chile
All data as of October 31, 2003. The Fund's country breakdown is expressed as a
percentage of total investments and may vary over time.
- --------------------------------------------------------------------------------
4 o AllianceBernstein Multi-Market Strategy Trust
INVESTMENT RESULTS
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2003
Class A Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 1.88% -2.42%
5 Years 3.98% 3.10%
10 Years 4.03% 3.58%
SEC Yield* 2.04%
Class B Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 1.17% -1.73%
5 Years 3.16% 3.16%
10 Years(a) 3.53% 3.53%
SEC Yield* 1.39%
Class C Shares
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 1.17% 0.20%
5 Years 3.19% 3.19%
10 Years 3.22% 3.22%
SEC Yield* 1.42%
AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (September 30, 2003)
Class A Shares Class B Shares Class C Shares
- --------------------------------------------------------------------------------
1 Year -1.35% -0.66% 1.12%
5 Years 3.39% 3.47% 3.47%
10 Years 3.85% 3.80%(a) 3.49%
The Fund's investment results represent average annual returns. Returns do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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 (3% year 1, 2% year 2,
1% year 3, 0% 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.
The Fund invests a significant amount of its assets in foreign securities which
may magnify fluctuations in the price of individual securities in which the Fund
invests due to changes in foreign exchange rates and the possibility of
substantial volatility due to political and economic uncertainties in foreign
countries. The Fund may invest a significant portion of its assets in the
securities of a single issuer, which may present greater risk than a more
diversified portfolio. Price fluctuations of fixed income securities may be
caused by changes in interest rates or bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities.
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.
* SEC yields are based on SEC guidelines and are calculated on 30 days ended
October 31, 2003.
(a) Assumes conversion of Class B shares into Class A shares after six years.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 5
PORTFOLIO OF INVESTMENTS
October 31, 2003
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
Australia-5.0%
Debt Obligations-5.0%
Commonwealth Bank of Australia
7.13%, 7/10/06(a) ................... US$ 5,000 $ 5,555,525
European Investment Bank
5.30%, 4/26/05(a) ................... AUD 10,000 7,035,035
-----------
Total Australian Securities
(cost $10,796,066) .................. 12,590,560
-----------
Belgium-2.5%
Government Obligation-2.5%
Kingdom of Belgium
7.00%, 5/15/06(a)
(cost $6,227,001) ................... EUR 5,000 6,360,260
-----------
Canada-13.4%
Debt Obligations-5.7%
Associated Capital Corp. of Canada
4.30%, 4/25/06(a) ................... CAD 10,000 7,723,119
4.78%, 6/20/05(a) ................... 3,500 2,721,365
GE Capital Funding
5.30%, 7/24/07(a) ................... 5,000 3,945,707
-----------
14,390,191
-----------
Government Obligations-7.7%
Province of British Columbia
5.25%, 1/09/08(a) .................... 13,900 11,025,627
Province of Ontario
8.25%, 12/01/05(a) ................... 10,000 8,344,851
-----------
19,370,478
-----------
Total Canadian Securities
(cost $30,719,493) ................... 33,760,669
-----------
Chile-1.3%
Government Obligation-1.3%
Banco Central Chile Peso
8.00%, 9/01/07(a)
(cost $2,821,739)..................... CLP 1,935,000 3,370,306
-----------
Denmark-5.0%
Government Obligation-5.0%
Kingdom of Denmark
7.00%, 11/15/07(a)
(cost $12,657,976).................... DKK 71,350 12,585,327
-----------
- --------------------------------------------------------------------------------
6 o AllianceBernstein Multi-Market Strategy Trust
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
Germany-3.3%
Debt Obligation-3.3%
Kredit Fuer Wiederaufbau
4.50%, 8/03/06(a)
(cost $8,083,927)...................... EUR 7,000 $ 8,408,964
-----------
Italy-12.6%
Government Obligation-12.6%
Republic of Italy
6.75%, 7/01/07(a)
(cost $32,471,915)..................... 24,500 31,703,528
-----------
Japan-1.8%
Government Obligation-1.8%
Government of Japan
0.20%, 6/20/08
(cost $4,153,269)...................... JPY 500,000 4,455,989
-----------
Netherlands-3.0%
Government Obligation-3.0%
Government of Netherlands
5.25%, 7/15/08(a)
(cost $7,419,763)...................... EUR 6,150 7,644,656
-----------
Poland-1.7%
Debt Obligations-1.7%
European Investment Bank
17.00%, 3/24/05(a)..................... PLN 10,000 2,808,685
Nordic Investment Bank
15.50%, 1/19/04(a)..................... 5,600 1,411,106
-----------
Total Polish Securities
(cost $4,063,321)...................... 4,219,791
-----------
Spain-4.7%
Government Obligation-4.7%
Government of Spain
7.35%, 3/31/07(a)
(cost $10,273,937)..................... EUR 9,000 11,802,133
-----------
Sweden-8.2%
Government Obligation-8.2%
Government of Sweden
6.50%, 5/05/08(a)
(cost $21,124,815)..................... SEK 148,945 20,742,862
-----------
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 7
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
United Kingdom-8.2%
Debt Obligation-3.4%
Abbey National Treasury
6.50%, 3/05/04(a)...................... GBP 5,000 $ 8,541,555
------------
Government Obligation-4.8%
UK Treasury Note
7.25%, 12/07/07(a)..................... 6,500 11,982,134
------------
Total United Kingdom Securities
(cost $19,487,646)..................... 20,523,689
------------
United States-27.2%
Debt Obligations-4.8%
Citibank, NA
14.50%, 6/16/05(a)..................... PLN 7,000 1,948,921
Citigroup, Inc.
0.80%, 10/30/08(a)..................... JPY 500,000 4,537,205
Citigroup, Inc.
6.75%, 12/01/05(a)..................... US$ 5,000 5,450,905
------------
11,937,031
------------
U.S. Government & Government
Sponsored Agency Obligations-22.4%
Federal Home Loan Bank
2.75%, 3/14/08(a)...................... 4,000 3,908,888
Federal Home Loan Mortgage Corp.
3.50%, 2/15/08(a)...................... EUR 9,500 10,929,598
Federal National Mortgage Association
1.75%, 3/26/08(a)...................... JPY 1,110,000 10,532,963
U.S. Treasury Notes
3.13%, 9/15/08(a)...................... 11,096 11,048,764
3.38%, 1/15/07 (TIPS)(a)............... 6,408 6,989,439
3.63%, 1/15/08 (TIPS)(a)............... 11,724 13,031,655
------------
56,441,307
------------
Total United States Securities
(cost $67,750,376)..................... 68,378,338
------------
Total Investments-97.9%
(cost $238,051,244).................... 246,547,072
Other assets less liabilities-2.1%........ 5,340,929
------------
Net Assets-100%........................... $251,888,001
============
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8 o AllianceBernstein Multi-Market Strategy Trust
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $
Contract Value on U.S. $ Unrealized
Amount Origination Current Appreciation/
(000) Date Value (Depreciation)
- --------------------------------------------------------------------------------
Buy Contract
British Pound,
settling 11/10/03 745 $1,245,500 $1,262,734 $ 17,234
Sale Contracts
Australian Dollar,
settling 12/17/03 6,412 4,391,339 4,516,824 (125,485)
British Pound,
settling 11/10/03 13,273 21,986,734 22,511,906 (525,172)
Canadian Dollar,
settling 11/21/03 44,893 33,806,901 33,988,399 (181,498)
Danish Krona,
settling 11/26/03 80,139 12,355,489 12,503,688 (148,199)
Euro,
settling 11/25/03 64,141 74,895,752 74,352,131 543,621
Japanese Yen,
settling 12/05/03 1,624,411 14,839,177 14,754,564 84,613
Polish Zloty,
settling 12/02/03 26,521 6,641,501 6,556,630 84,871
Swedish Krona,
settling 12/29/03 170,572 22,033,513 21,765,040 268,473
(a) Positions, or portions thereof, with an aggregate market value of
$235,328,921 have been segregated to collateralize forward exchange currency
contracts.
Glossary:
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
AUD - Australian Dollar
CAD - Canadian Dollar
CLP - Chilean Peso
DKK - Danish Krona
EUR - Euros
GBP - Great British Pound
JPY - Japanese Yen
PLN - Polish Zloty
SEK - Swedish Krona
US$ - United States Dollar
See notes to financial statements.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 9
STATEMENT OF ASSETS & LIABILITIES
October 31, 2003
Assets
Investments in securities, at value (cost $238,051,244). $ 246,547,072
Cash.................................................... 710,770
Foreign cash, at value (cost $125,001).................. 134,489
Receivable for investment securities sold............... 6,745,304
Interest receivable..................................... 5,642,718
Unrealized appreciation of forward exchange
currency contracts................................... 998,812
Receivable for capital stock sold....................... 160,066
--------------
Total assets............................................ 260,939,231
--------------
Liabilities
Payable for investment securities purchased............. 6,743,306
Unrealized depreciation of forward exchange
currency contracts................................... 980,354
Payable for capital stock redeemed...................... 478,276
Dividends payable....................................... 253,698
Advisory fee payable.................................... 130,347
Distribution fee payable................................ 81,727
Accrued expenses and other liabilities.................. 383,522
--------------
Total liabilities....................................... 9,051,230
--------------
Net Assets.............................................. $ 251,888,001
==============
Composition of Net Assets
Capital stock, at par................................... $ 44,204
Additional paid-in capital.............................. 269,713,837
Distributions in excess of net investment income........ (4,452,901)
Accumulated net realized loss on investment
and foreign currency transactions.................... (22,071,360)
Net unrealized appreciation of investments
and foreign currency denominated assets and
liabilities.......................................... 8,654,221
--------------
$ 251,888,001
==============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and
redemption price per share
($224,503,991/39,408,862 shares of capital stock
issued and outstanding).............................. $5.70
Sales charge--4.25% of public offering price............ .25
-----
Maximum offering price.................................. $5.95
=====
Class B Shares
Net asset value and offering price per share
($12,904,461/2,260,370 shares of capital stock
issued and outstanding).............................. $5.71
=====
Class C Shares
Net asset value and offering price per share
($14,479,549/2,534,823 shares of capital stock
issued and outstanding).............................. $5.71
=====
See notes to financial statements.
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10 o AllianceBernstein Multi-Market Strategy Trust
STATEMENT OF OPERATIONS
Year Ended October 31, 2003
Investment Income
Interest (net of foreign taxes
withheld of $10,266)................ $ 12,105,250
Expenses
Advisory fee........................... $ 1,663,624
Distribution fee--Class A.............. 738,243
Distribution fee--Class B.............. 143,973
Distribution fee--Class C.............. 167,924
Transfer agency........................ 822,137
Custodian.............................. 331,976
Printing............................... 145,223
Administrative......................... 135,000
Audit and legal........................ 128,602
Registration........................... 46,941
Directors' fees........................ 19,596
Miscellaneous.......................... 23,040
---------------
Total expenses......................... 4,366,279
Less: expense offset arrangement
(see Note B)........................ (275)
---------------
Net expenses........................... 4,366,004
---------------
Net investment income.................. 7,739,246
---------------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions............. 13,591,683
Written options..................... 62,180
Foreign currency transactions....... (10,448,286)
Net change in unrealized
appreciation/depreciation of:
Investments......................... (9,385,179)
Written options..................... (31,036)
Foreign currency denominated assets
and liabilities.................. 3,715,468
---------------
Net loss on investment and foreign
currency transactions............... (2,495,170)
---------------
Net Increase in Net Assets from
Operations.......................... $ 5,244,076
===============
See notes to financial statements.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 11
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, October 31,
2003 2002
--------------- ---------------
Increase (Decrease) in Net Assets from
Operations
Net investment income.................. $ 7,739,246 $ 9,381,424
Net realized gain (loss) on investment
and foreign currency transactions... 3,205,577 (26,010,344)
Net change in unrealized
appreciation/depreciation of
investments and foreign
currency denominated assets
and liabilities..................... (5,700,747) 26,553,488
--------------- ---------------
Net increase in net assets from
operations.......................... 5,244,076 9,924,568
Dividends and Distributions
to Shareholders from
Net investment income
Class A............................. (1,056,498) -0-
Class B............................. (53,345) -0-
Class C............................. (62,195) -0-
Tax return of capital
Class A............................. (11,616,504) (14,557,231)
Class B............................. (586,549) (501,157)
Class C............................. (683,856) (729,217)
Capital Stock Transactions
Net decrease........................... (35,017,265) (14,200,528)
--------------- ---------------
Total decrease......................... (43,832,136) (20,063,565)
Net Assets
Beginning of period.................... 295,720,137 315,783,702
--------------- ---------------
End of period.......................... $ 251,888,001 $ 295,720,137
=============== ===============
See notes to financial statements.
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12 o AllianceBernstein Multi-Market Strategy Trust
NOTES TO FINANCIAL STATEMENTS
October 31, 2003
NOTE A
Significant Accounting Policies
AllianceBernstein Multi-Market Strategy Trust, Inc. (the "Fund"), formerly
Alliance Multi-Market Strategy Trust, Inc., was incorporated in the State of
Maryland as a non-diversified, open-end management investment company. The Fund
offers Class A, Class B and Class C 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 sold with a contingent deferred sales charge which declines
from 3.0% to zero depending on the period of time the shares are held. Class B
shares will automatically convert to Class A shares six years after the end of
the calendar month of purchase. Class C shares are subject to a contingent
deferred sales charge of 1% on redemptions made within the first year after
purchase. All three classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that each
class bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. The 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. Additional information about some of the items
discussed in these Notes to Financial Statements is contained in the Fund's
Statement of Additional Information, which is available upon request. The
following is a summary of significant accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at their
current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value in accordance with the Pricing Policies.
Securities listed on more than one exchange are valued by reference to the
principal exchange on which the securities are traded; securities not listed on
an exchange but traded on The
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 13
Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuations, the last available closing settlement price is used;
securities traded in the over-the-counter market, (but excluding securities
traded on NASDAQ) are valued at the mean of the current bid and asked prices as
reported by the National Quotation Bureau or other comparable sources; U.S.
Government securities and other debt instruments having 60 days or less
remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less, or by amortizing their fair value as of the 61st day prior
to maturity if their original term to maturity exceeded 60 days; fixed-income
securities, including mortgage backed and asset backed securities, may be valued
on the basis of prices provided by a pricing service or at a price obtained from
one or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, the Pricing Policies provide that the Adviser may establish procedures
whereby changes in market yields or spreads are used to adjust, on a daily
basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a major
broker/dealer in such security. Securities for which market quotations are not
readily available are valued at fair value in accordance with the Pricing
Policies.
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 prices 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 foreign fixed income
investments, foreign currency exchange contracts, holding of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
foreign investment transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes 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.
- --------------------------------------------------------------------------------
14 o AllianceBernstein Multi-Market Strategy Trust
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 provision for federal income or excise taxes is
required.
4. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date the securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income. Additionally, the Fund amortizes premiums on
debt securities for financial statement reporting purposes only.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled 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.
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 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 the Adviser
an advisory fee at an annual rate of .60 of 1% of the average daily net assets
of the Fund. Such fee is accrued daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid $135,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 31, 2003.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), 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 $535,391 for the year ended October 31,
2003.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 15
For the year ended October 31, 2003, the Fund's expenses were reduced by $275
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc. (the "Distributor"),
formerly Alliance Fund Distributors, Inc., 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 retained front-end sales charges of $4,109 from the
sale of Class A shares and received $14,978, $32,930 and $4,547 in contingent
deferred sales charges imposed upon redemptions by shareholders of Class A,
Class B and Class C shares, respectively, for the year ended October 31, 2003.
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 1% of the average daily net assets attributable
to the Class A shares and 1% of the average daily net assets attributable to
both Class B and Class C 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 $10,691,801 and $1,714,550 for
Class B and C shares, respectively. Such costs may be recovered from the Fund in
future periods so long as the agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal year for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the year ended October 31, 2003, were as follows:
Purchases Sales
--------------- ---------------
Investment securities (excluding U.S.
government securities).............. $ 228,494,336 $ 319,287,640
U.S. government securities............. 80,164,314 62,160,965
- --------------------------------------------------------------------------------
16 o AllianceBernstein Multi-Market Strategy Trust
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Cost.................................................... $ 240,916,541
===============
Gross unrealized appreciation........................... $ 7,722,454
Gross unrealized depreciation........................... (2,091,923)
---------------
Net unrealized appreciation............................. $ 5,630,531
===============
1. Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss arising
from the difference between the original contract and the closing of such
contract would be included in net realized gain or loss on foreign currency
transactions. Fluctuations in the value of open forward exchange currency
contracts are recorded for financial reporting purposes as net unrealized
appreciation or depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
2. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the
premiums paid.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 17
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the sale
of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise of
an option written by the Fund could result in the Fund selling or buying a
security or currency at a price different from the current market value.
Transactions in written options for the year ended October 31, 2003 were as
follows:
Number of Premium
Contracts Received
--------------- ---------------
Options outstanding at
October 31, 2002....................... 4,500,000 $ 31,036
Options written........................ 384,700,000 62,180
Options expired........................ (389,200,000) (93,216)
--------------- ---------------
Options outstanding at
October 31, 2003....................... -0- $ -0-
=============== ===============
3. Interest Rate Swap Agreements
The Fund may enter into currency and interest rate swap agreements to protect
itself from foreign currency and interest rate fluctuations on the underlying
debt instruments. A swap is an agreement that obligates two parties to exchange
a series of cash flows at specified intervals based upon or calculated by
reference to changes in specified prices or rates for a specified amount of an
underlying asset. The payment flows are usually netted against each other, with
the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by the
failure of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may arise
from unanticipated movements in interest rates or in the value of the foreign
securities or currencies.
- --------------------------------------------------------------------------------
18 o AllianceBernstein Multi-Market Strategy Trust
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as a component of net
change in unrealized appreciation or depreciation of investments. Realized gains
and losses from terminated swap contracts are included in net realized gain or
loss on investment transactions.
NOTE E
Capital Stock
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares. Each
class consists of 3,000,000,000 authorized shares. Transactions in capital stock
were as follows:
=============================================================
Shares Amount
=============================================================
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2003 2002 2003 2002
------------------------------------------------------------
Class A
Shares sold 2,323,078 5,003,164 $ 14,460,733 $ 29,244,522
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 1,303,825 1,369,675 6,922,813 8,026,307
- -------------------------------------------------------------------------------
Shares converted
from Class B 240,685 391,314 1,179,092 2,289,845
- -------------------------------------------------------------------------------
Shares redeemed (9,476,739) (10,001,400) (55,219,312) (58,456,256)
- -------------------------------------------------------------------------------
Net decrease (5,609,151) (3,237,247) $ (32,656,674) $(18,895,582)
===============================================================================
Class B
Shares sold 1,807,039 1,667,677 $ 10,605,567 $ 9,803,708
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 65,535 54,546 388,225 320,505
- -------------------------------------------------------------------------------
Shares converted
to Class A (240,270) (390,278) (1,179,092) (2,289,845)
- -------------------------------------------------------------------------------
Shares redeemed (1,600,672) (984,519) (9,595,642) (5,784,916)
- -------------------------------------------------------------------------------
Net increase 31,632 347,426 $ 219,058 $ 2,049,452
===============================================================================
Class C
Shares sold 1,534,825 1,540,244 $ 8,955,177 $ 9,060,873
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 73,948 77,914 433,726 458,161
- -------------------------------------------------------------------------------
Shares redeemed (2,053,800) (1,167,415) (11,968,552) (6,873,432)
- -------------------------------------------------------------------------------
Net increase
(decrease) (445,027) 450,743 $ (2,579,649) $ 2,645,602
===============================================================================
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 19
NOTE F
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 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 expense in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 2003.
NOTE G
Distribution to Shareholders
The tax character of distributions paid during the fiscal years ended October
31, 2003 and October 31, 2002 were as follows:
2003 2002
-------------- ---------------
Distributions paid from:
Ordinary income.................... $ 1,172,038 $ -0-
-------------- ---------------
Total taxable distributions........... 1,172,038 -0-
Tax return of capital.............. 12,886,909 15,859,902
-------------- ---------------
Total distributions paid.............. $ 14,058,947 $ 15,859,902(a)
============== ===============
As of October 31, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses................... $ (23,323,480)(b)
Unrealized appreciation/(depreciation)................. 5,707,139(c)
---------------
Total accumulated earnings/(deficit)................... $ (17,616,341)
===============
(a) Total distributions paid differ from the Statement of Changes in Net Assets
because for tax purposes dividends are recognized when actually paid.
(b) On October 31, 2003, the Fund had a net capital loss carryforward of
$22,071,360 of which $973,274 expires in the year 2004, $572,902 expires in
the year 2005, $6,799,602 expires in the year 2007, $9,788,373 expires in
the year 2008, $3,634,196 expires in the year 2009 and $303,013 expires in
the year 2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year,
the Fund utilized capital loss carryforwards of $809,575, and $5,293,734 of
capital loss carryforwards expired. For the year ended October 31, 2003, the
cumulative deferred loss on straddles of $1,252,120.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the realization
for tax purposes of gains/losses on certain derivative instruments and the
difference between book and tax amortization methods for premium.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income, tax return of capital, the tax
treatment of bond premium and the tax treatment of foreign currency gains and
losses, resulted in a net decrease in distributions in excess of net investment
income, a
- --------------------------------------------------------------------------------
20 o AllianceBernstein Multi-Market Strategy Trust
decrease in accumulated net realized loss on investments and foreign currency
transactions, and a decrease in additional paid-in capital. This
reclassification had no effect on net assets.
NOTE H
Legal Proceedings
As has been previously reported in the press, the Staff of the U.S. Securities
and Exchange Commission ("SEC") and the Office of the New York Attorney General
("NYAG") have been investigating practices in the mutual fund industry
identified as "market timing" and "late trading" of mutual fund shares. Certain
other regulatory authorities have also been conducting investigations into these
practices within the industry and have requested that Alliance Capital
Management L.P. ("Alliance Capital"), the Fund's Adviser, provide information to
them. Alliance Capital has been cooperating and will continue to cooperate with
all of these authorities. Please see "Subsequent Events" below for a description
of the agreements reached by Alliance Capital and the SEC and NYAG in connection
with the investigations mentioned above.
A special committee of Alliance Capital's Board of Directors, comprised of the
members of Alliance Capital's Audit Committee and the other independent member
of the Board, is continuing to direct and oversee an internal investigation and
a comprehensive review of the facts and circumstances relevant to the SEC's and
the NYAG's investigations.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against Alliance Capital; Alliance Capital Management Holding L.P.; Alliance
Capital Management Corporation; AXA Financial, Inc.; certain of the
AllianceBernstein Mutual Funds, including the Fund; Gerald Malone; Charles
Schaffran (collectively, the "Alliance Capital defendants"); and certain other
defendants not affiliated with Alliance Capital. The Hindo Complaint was filed
in the United States District Court for the Southern District of New York by
alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo
Complaint alleges that certain of the Alliance Capital defendants failed to
disclose that they improperly allowed certain hedge funds and other unidentified
parties to engage in late trading and market timing of AllianceBernstein Fund
securities, violating Sections 11 and 15 of the Securities Act, Sections 10(b)
and 20(a) of the Exchange Act, and Sections 206 and 215 of the Advisers Act.
Plaintiffs seek an unspecified amount of compensatory damages and rescission of
their contracts with Alliance Capital, including recovery of all fees paid to
Alliance Capital pursuant to such contracts.
Since October 2, 2003, more than thirty additional lawsuits making factual
allegations similar to those in the Hindo Complaint were filed against Alliance
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 21
Capital and certain other defendants. All of these lawsuits seek an unspecified
amount of damages.
As a result of the matters more fully discussed in the note entitled "Subsequent
Events" below, investors in the AllianceBernstein Mutual Funds may choose to
redeem their investments. This may require the AllianceBernstein Mutual Funds to
sell investments held by those funds to provide for sufficient liquidity and
could also have an adverse effect on the investment performance of the
AllianceBernstein Mutual Funds.
NOTE I
Subsequent Events
On December 18, 2003, Alliance Capital, the Fund's Adviser, confirmed that it
had reached terms with the SEC and the NYAG for the resolution of regulatory
claims relating to the practice of "market timing" mutual fund shares in some of
the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in
an Order of the Commission ("SEC Order"). The agreement with the NYAG is subject
to final, definitive documentation. Among the key provisions of these agreements
are the following:
(i) Alliance Capital agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for
the adverse effects of market timing attributable to the market
timing relationships described in the SEC Order (i.e.,
relationships Alliance Capital maintained with some investors who
were permitted to engage in market timing trades in some of the
AllianceBernstein Mutual Funds in return for or in connection with
making investments (which were not actively traded) in other
Alliance Capital products, including hedge funds and mutual funds,
for which Alliance Capital receives advisory fees). According to
the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of
losses suffered by the fund due to market timing, and (ii) a
proportionate share of advisory fees paid by such fund during the
period of such market timing;
(ii) Alliance Capital agreed to reduce the advisory fees it receives
from some of the AllianceBernstein long-term, open-end retail
funds, commencing January 1, 2004, for a period of at least five
years. The determination of which funds will have their fees
reduced and to what degree is subject to the terms of the
definitive agreement with the NYAG; and
(iii) Alliance Capital agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates
that Alliance Capital's registered investment company clients,
including the Fund, will introduce governance and compliance
changes.
- --------------------------------------------------------------------------------
22 o AllianceBernstein Multi-Market Strategy Trust
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
===========================================================
Class A
===========================================================
Year Ended October 31,
-----------------------------------------------------------
2003 2002(a) 2001 2000 1999
-----------------------------------------------------------
Net asset value,
beginning of period.................. $ 5.89 $ 5.99 $ 6.08 $ 6.29 $ 6.64
-----------------------------------------------------------
Income From Investment
Operations
Net investment income(b) ............... .17 .19 .35 .38 .42
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions......................... (.06) .02 .13 (.19) (.22)
-----------------------------------------------------------
Net increase in net asset
value from operations................ .11 .21 .48 .19 .20
-----------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income.................... (.03) -0- (.32) (.38) (.42)
Distributions in excess of
net investment income................ -0- -0- -0- (.02) (.02)
Tax return of capital................... (.27) (.31) (.25) -0- (.11)
-----------------------------------------------------------
Total dividends and
distributions........................ (.30) (.31) (.57) (.40) (.55)
-----------------------------------------------------------
Net asset value, end of period ......... $ 5.70 $ 5.89 $ 5.99 $ 6.08 $ 6.29
===========================================================
Total Return
Total investment return based
on net asset value(c)................ 1.88% 3.74% 8.27% 3.17% 2.95%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted)...................... $224,504 $264,978 $289,265 $305,610 $396,867
Ratio to average net assets of:
Expenses.............................. 1.49% 1.49% 1.48% 1.52%(d) 1.44%(d)
Net investment income................. 2.87% 3.22% 5.87% 6.25% 6.23%
Portfolio turnover rate................. 113% 115% 79% 82% 124%
See footnote summary on page 26.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 23
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
===========================================================
Class B
===========================================================
Year Ended October 31,
-----------------------------------------------------------
2003 2002(a) 2001 2000 1999
-----------------------------------------------------------
Net asset value,
beginning of period.................. $ 5.90 $ 6.01 $ 6.10 $ 6.32 $ 6.66
-----------------------------------------------------------
Income From Investment
Operations
Net investment income(b) ............... .12 .14 .30 .33 .36
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions......................... (.05) .02 .13 (.19) (.22)
-----------------------------------------------------------
Net increase in net asset
value from operations................ .07 .16 .43 .14 .14
Less: Dividends and
Distributions
Dividends from net
investment income.................... (.02) -0- (.29) (.34) (.36)
Distributions in excess of
net investment income................ -0- -0- -0- (.02) (.02)
Tax return of capital................... (.24) (.27) (.23) -0- (.10)
-----------------------------------------------------------
Total dividends and
distributions........................ (.26) (.27) (.52) (.36) (.48)
-----------------------------------------------------------
Net asset value, end of period ......... $ 5.71 $ 5.90 $ 6.01 $ 6.10 $ 6.32
===========================================================
Total Return
Total investment return based
on net asset value(c)................ 1.17% 2.84% 7.49% 2.30% 2.13%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted)...................... $12,904 $13,150 $11,311 $13,052 $18,129
Ratio to average net assets of:
Expenses.............................. 2.23% 2.24% 2.24% 2.28%(d) 2.15%(d)
Net investment income................. 2.13% 2.44% 5.05% 5.44% 5.46%
Portfolio turnover rate................. 113% 115% 79% 82% 124%
See footnote summary on page 26.
24 o AllianceBernstein Multi-Market Strategy Trust
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
===========================================================
Class C
===========================================================
Year Ended October 31,
-----------------------------------------------------------
2003 2002(a) 2001 2000 1999
-----------------------------------------------------------
Net asset value,
beginning of period.................. $ 5.90 $ 6.01 $ 6.10 $ 6.31 $ 6.65
-----------------------------------------------------------
Income From Investment
Operations
Net investment income(b) ............... .13 .14 .30 .34 .36
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions......................... (.06) .02 .13 (.19) (.22)
----------------------------------------------------------
Net increase in net asset
value from operations................ .07 .16 .43 .15 .14
Less: Dividends and
Distributions
Dividends from net
investment income.................... (.02) -0- (.29) (.34) (.36)
Distributions in excess of
net investment income................ -0- -0- -0- (.02) (.02)
Tax return of capital................... (.24) (.27) (.23) -0- (.10)
----------------------------------------------------------
Total dividends and
distributions........................ (.26) (.27) (.52) (.36) (.48)
----------------------------------------------------------
Net asset value, end of period........... $ 5.71 $ 5.90 $ 6.01 $ 6.10 $ 6.31
==========================================================
Total Return
Total investment return based
on net asset value(c)................. 1.17% 2.83% 7.48% 2.46% 2.13%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted)....................... $14,480 $17,592 $15,208 $16,578 $19,076
Ratio to average net assets of:
Expenses.............................. 2.20% 2.20% 2.19% 2.22%(d) 2.15%(d)
Net investment income................. 2.15% 2.48% 5.10% 5.52% 5.50%
Portfolio turnover rate................. 113% 115% 79% 82% 124%
See footnote summary on page 26.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 25
(a) As required, effective November 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide, Audits of Investment Companies, and
began amortizing premium on debt securities for financial statement
reporting purposes only. The effect of this change for the year ended
October 31, 2002 was to decrease net investment income per share by $.14,
decrease net realized and unrealized loss on investments per share by $.14
for Class A, B and C, respectively, and decrease the ratio of net investment
income to average net assets from 5.56% to 3.22% for Class A, from 4.79% to
2.44% for Class B and from 4.83% to 2.48% for Class C. Per share, ratios and
supplemental data for periods prior to November 1, 2001 have not been
restated to reflect this change in presentation.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made at
the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of the total
investment return. Total return does not reflect the deduction of taxes that
a shareholder would pay on fund distributions or the redemption of fund
shares. Total investment return calculated for a period of less than one
year is not annualized.
(d) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the periods shown below, the net expense ratios were as
follows:
Year Ended October 31,
2000 1999
--------------------------
Class A.............. 1.50% 1.42%
Class B.............. 2.27% 2.14%
Class C.............. 2.21% 2.14%
- --------------------------------------------------------------------------------
26 o AllianceBernstein Multi-Market Strategy Trust
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
of AllianceBernstein Multi-Market
Strategy Trust, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Multi-Market Strategy Trust, Inc., formerly Alliance
Multi-Market Strategy Trust, Inc., (the "Fund"), including the portfolio of
investments, as of October 31, 2003, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2003, by correspondence with
the custodian and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
AllianceBernstein Multi-Market Strategy Trust, Inc. at October 31, 2003, the
results of its operations for the year then ended, the changes in its net assets
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
December 12, 2003,
except for Note I,
as to which the date is
December 23, 2003
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 27
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Marc O. Mayer, President
Kathleen A. Corbet, Senior Vice President
Michael L. Mon(2), Vice President
Douglas J. Peebles, Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee.
(2) Mr. Mon is the person primarily responsible for the day-to-day management of
the Fund's investment portfolio.
- --------------------------------------------------------------------------------
28 o AllianceBernstein Multi-Market Strategy Trust
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
William H. Foulk, Jr., #, 71 Investment adviser and an 113 None
2 Sound View Drive independent consultant. He
Suite 100 was formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
(12) registered investment adviser,
Chairman of the Board with which he had been associated
since prior to 1998. He was formerly
Deputy Comptroller and Chief Investment
Officer of the State of New York and,
prior thereto, Chief Investment Officer
of the New York Bank for Savings.
Ruth Block, #, 73 Formerly Executive Vice 96 None
500 SE Mizner Blvd. President and Chief Insurance
Boca Raton, FL 33432 Officer of The Equitable Life
(11) Assurance Society of the
United States; Chairman and Chief
Executive Officer of Evlico; Director
of Avon, BP (oil and gas), Ecolab
Incorporated (specialty chemicals),
Tandem Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation; former Governor at
Large National Association of
Securities Dealers, Inc.
David H. Dievler, #, 74 Independent consultant. Until 100 None
P.O. Box 167 December 1994 he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
(12) Management Corporation ("ACMC")
responsible for mutual fund
administration. Prior to
joining ACMC in 1984 he was Chief
Financial Officer of Eberstadt
Asset Management since 1968. Prior
to that he was a Senior Manager at
Price Waterhouse & Co. Member of
American Institute of Certified
Public Accountants since 1953.
- --------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 29
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
John H. Dobkin, #, 61 Consultant. Formerly President 98 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002.
(11) Formerly a Senior Advisor from
June 1999-June 2000 and President of
Historic Hudson Valley (historic
preservation) from December 1989-May 1999
(historic preservation). Previously,
Director of the National Academy of
Design and during 1988-1992, he was
Director and Chairman of the Audit
Committee of ACMC.
Clifford L. Michel, #, 64 Senior Counsel of the law firm 97 Placer Dome,
15 St. Bernard's Road of Cahill Gordon & Reindel since Inc.
Gladstone, NJ 07934 February 2001 and a partner of
(11) that firm for more than twenty-
five years prior thereto. He is
President and Chief Executive
Officer of Wenonah Development
Company (investments) and a Director
of Placer Dome, Inc. (mining).
Donald J. Robinson, #, 69 Senior Counsel to the law firm of 96 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 since prior to 1998. Formerly a
(7) senior partner and a member
of the Executive Committee of that
firm. He was also a member and Chairman
of the Municipal Securities Rulemaking
Board and Trustee of the Museum of the
City of New York.
* There is no stated term of office for the Fund's Directors.
# Member of the Audit Committee and the Nominating Committee.
- --------------------------------------------------------------------------------
30 o AllianceBernstein Multi-Market Strategy Trust
Officers of The Fund
Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS* AND AGE HELD WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer, 46 President Executive Vice President of Alliance
Capital Management Corporation ("ACMC")
since 2001; prior thereto, Chief Executive
Officer of Sanford C. Bernstein & Co., LLC
and its predecessor since prior to 1998.
Kathleen A. Corbet, 43 Senior Vice President Executive Vice President of ACMC**, with
which she has been associated since prior to
1998.
Michael L. Mon, 34 Vice President Vice President of ACMC**, with which he has
been associated since June 1999. Prior thereto
he was a Portfolio Manager at Brundage, Story
and Rose since 1998.
Douglas J. Peebles, 38 Vice President Senior Vice President of ACMC**, with which
he has been associated since prior to 1998.
Mark D. Gersten, 53 Treasurer and Chief Senior Vice President of Alliance Global
Financial Officer Investor Services, Inc. ("AGIS") and Vice
President of AllianceBernstein Investment
Research and Management, Inc. ("ABIRM")**
with which he has been associated since prior
to 1998.
Vincent S. Noto, 39 Controller Vice President of AGIS**, with which he has
been associated since prior to 1998.
- --------------------------------------------------------------------------------
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance
Capital at (800) 227-4618 for a free prospectus or SAI.
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust o 31
ALLIANCEBERNSTEIN FAMILY OF FUNDS
================================================================================
Wealth Strategies Funds
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
================================================================================
Blended Style Series
U.S. Large Cap Portfolio
================================================================================
Growth Funds
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund+
Technology Fund
Global & International
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
================================================================================
Value Funds
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
================================================================================
Taxable Bond Funds
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
================================================================================
Municipal Bond Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
================================================================================
Intermediate Municipal Bond Funds
Intermediate California
Intermediate Diversified
Intermediate New York
================================================================================
Closed-End Funds
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,40# which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current prospectus.
Please read the prospectus carefully before you invest or send money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
+ Quasar Fund changed its name to Small Cap Growth Fund on 11/3/03.
++ An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
- --------------------------------------------------------------------------------
32 o AllianceBernstein Multi-Market Strategy Trust
[LOGO] AllianceBernstein(SM)
Investment Research and Management
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
SM This service mark used under license from the owner, Alliance Capital
Management L.P.
MMSTAR1003
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting officer.
A copy of the registrant's code of ethics is filed herewith as Exhibit 10(a)(1).
(b) During the period covered by this report, no amendments were made to the
provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to
the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
Exhibit No. DESCRIPTION OF EXHIBIT
----------- ----------------------
10 (a) (1) Code of ethics that is subject to the
disclosure of Item 2 hereof
10 (b) (1) Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
10 (b) (2) Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
10 (c) Certification of Principal Executive Officer
and Principal Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Multi-Market Strategy Trust, Inc.
By: /s/ Marc O. Mayer
----------------------
Marc O. Mayer
President
Date: December 30, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: December 30, 2003
By: /s/ Mark D. Gersten
-----------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 30, 2003