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: 811-08201
AllianceBernstein Greater China `97 Fund, 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: July 31, 2003
Date of reporting period: January 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] AllianceBernstein(SM)
Investment Research and Management
AllianceBernstein Greater China '97 Fund
Semi-Annual Report--January 31, 2004
Investment Products Offered
================================
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
================================
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that shares, when redeemed, may be worth more or less than their
original cost. You should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. For a free copy of the Fund's
prospectus, which contains this and other information, visit our web site at
www.alliancebernstein.com or call your financial advisor or Alliance at (800)
227-4618. Please read the prospectus carefully before you invest.
You may obtain month-end performance information from our web site at
www.alliancebernstein.com (click on Investors/ Products & Services/ Mutual
Funds).
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.alliancebernstein.com (click on Investors, then the "proxy voting policies
and procedures" link on the left side of the page), or by going to the
Securities and Exchange Commission's web site at www.sec.gov, or by calling
Alliance Capital at (800) 227-4618.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
March 28, 2004
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Greater China '97 Fund (the "Fund") for the semi-annual
reporting period ended January 31, 2004.
Investment Objective and Policies
This open-end fund is a non-diversified management investment company that seeks
long-term capital appreciation by investing at least 80% of its total assets in
equity securities issued by Greater China companies ("Greater China" refers to
the People's Republic of China ("China"), the Hong Kong Special Administrative
Region ("Hong Kong") and the Republic of China ("Taiwan")).
Investment Results
The following table provides the performance results for the Fund for the six-
and 12-month periods ended January 31, 2004, relative to its benchmarks, the
Morgan Stanley Capital International (MSCI) Indices (China, Hong Kong and
Taiwan) and the Lipper China Region Funds Average (the "Lipper Average"). Funds
in the Lipper Average generally have similar investment objectives to the Fund,
although some may have different investment policies and sales and management
fees. We are changing the Fund's benchmark from the three seperate MSCI Indices
to the MSCI Golden Dragon Index because the combined benchmark reflects the
Fund's investment strategy better than the three single-country MCSI Indices.
The MCSI Golden Dragon Index is a composite index consisting of equity
securities of companies based in China, Hong Kong and Taiwan. These are the
countries in which the great majority of the Fund's securities are located.
INVESTMENT RESULTS*
Periods Ended January 31, 2004
===========================
Returns
===========================
6 Months 12 Months
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AllianceBernstein
Greater China
'97 Fund
Class A 41.07% 73.29%
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Class B 40.45% 71.93%
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Class C 40.43% 71.26%
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MSCI Golden
Dragon Index 32.90% 50.54%
- --------------------------------------------------------------------------------
MSCI China
Index 43.64% 77.86%
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MSCI Hong
Kong Index 37.71% 50.71%
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MSCI Taiwan
Index 22.83% 38.25%
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Lipper China
Region Funds
Average 33.57% 63.16%
- --------------------------------------------------------------------------------
* 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 January 31, 2004.
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 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 each period. During the
reporting period, the Advisor waived a portion of its advisory fee or
reimbursed the Fund for a portion of its expenses to the extent necessary to
limit the Fund's expenses to 2.50% for Class A, 3.20% for Class B, 3.20% for
Class C
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 1
and 2.20% for Advisor Class. This waiver extends through the Fund's current
fiscal year and may be extended by the Advisor for additional one-year terms.
Without the waiver, the Fund's expenses would have been higher and its
performance would have been lower than that shown above. Past performance is
no guarantee of future results.
None of the indices reflect fees and expenses associated with the active
management of a mutual fund portfolio. The unmanaged Morgan Stanley Capital
International (MSCI) China Index, the unmanaged MSCI Hong Kong Index and the
unmanaged MSCI Taiwan Index are market capitalization-weighted indices of
companies located in their respective countries, and are respectively
comprised of 46, 34 and 90 companies as of the 12-month period ended January
31, 2004. The unmanaged MSCI Golden Dragon Index is an aggregate of the MSCI
Hong Kong Index, the MSCI China Index and the MSCI Taiwan at 65% Index (the
MSCI Taiwan Index has an inclusion weight at 65% of its market capitalization
in the MSCI Index series). The Lipper China Region Funds Average (Lipper
Average) represents funds that invest in equity securities whose primary
trading markets or operations are concentrated in the China region or in a
single country within this region. For the six- and 12-month periods ended
January 31, 2004, the Lipper Average consisted of 22 funds for both periods.
These funds have generally similar investment objectives to AllianceBernstein
Greater China '97 Fund, although some may have different investment policies
and sales and management fees. Investors cannot invest directly in an index
or average, and its results are not indicative of any specific investment,
including AllianceBernstein Greater China '97 Fund.
Additional investment results appear on pages 5-7.
During the six- and 12-month periods ended January 31, 2004, the Fund
outperformed the MSCI Golden Dragon Index and its peer group of funds, as
represented by the Lipper Average. This was mainly due to the Fund's overweight
positions in cyclicals, capital goods, energy and consumer sectors. We
overweighted the cyclicals, capital goods and energy sectors due to the fixed
asset investment boom in China. The Fund's overweight position in the consumer
sector was a reflection of the pick-up in consumer spending in the Greater China
region from the post-SARS impact. Good stock selection within these sectors was
the most important contributor to performance.
Market Review and Investment Strategy
During the reporting period, the Greater China stock markets staged a strong
rebound. This was especially true during the second half of 2003 as the Greater
China economies continued to benefit from strong export performance and the
domestic sectors picked up as the negative impact of SARS was over. The Chinese
economy's growth was led by strong exports and investment, hence the Fund's
overweighting in cyclicals, energy and capital goods. The RMB, China's currency,
has been the subject of much debate, and China has reaffirmed that it has no
plans to change the currency regime in the short-term. However, China plans to
liberalize the capital account by around 2010, and the country may adopt a more
flexible exchange rate mechanism in the interim period.
- --------------------------------------------------------------------------------
2 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
During the reporting period, we maintained the Fund's overweight positions in
the cyclicals, energy, capital goods and consumer sectors, while selectively
increasing exposure to the finance and property sectors. As previously
mentioned, the cyclicals, energy and capital goods sectors were beneficiaries of
the fixed asset investment boom in China, while the consumer, financial and
property sectors were recovering from a low base following the SARS impact.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 3
PORTFOLIO SUMMARY
January 31, 2004 (unaudited)
INCEPTION DATES
Class A Shares
9/3/97
Class B Shares
9/3/97
Class C Shares
9/3/97
PORTFOLIO STATISTICS
Net Assets ($mil): $58.2
SECTOR BREAKDOWN
21.5% Finance
13.4% Basic Industry
10.8% Capital Goods
9.8% Multi-Industry
9.4% Technology [PIE CHART OMITTED]
9.4% Consumer Manufacturing
7.4% Consumer Services
6.5% Energy
5.0% Consumer Staples
4.2% Transportation
1.8% Health Care
0.8% Utilities
All data as of January 31, 2004. The Fund's sector breakdown is expressed as a
percentage of total investments and may vary over time.
- --------------------------------------------------------------------------------
4 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
INVESTMENT RESULTS
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2004
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 73.29% 65.89%
5 Years 16.28% 15.28%
Since Inception (9/3/97) 3.81% 3.12%
CLASS A SHARE SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (DECEMBER 31, 2003)
- --------------------------------------------------------------------------------
1 Year 73.33%
5 Years 12.37%
Since Inception (9/3/97) 2.68%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. The Fund's investment results are for the periods shown and
are based on the Fund's Class A shares at net asset value (NAV). All fees and
expenses related to the operation of the Fund have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. Fund returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares. Fund returns reflect the reinvestment of dividends and/or capital gains
distributions in additional shares.
SEC returns reflect the 4.25% maximum front-end sales charge for Class A shares.
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that shares, when redeemed, may be worth more or less than their
original cost. You should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. For a free copy of the Fund's
prospectus, which contains this and other information, visit our web site at
www.alliancebernstein.com or call your financial advisor or Alliance at (800)
227-4618. Please read the prospectus carefully before you invest. You may obtain
current month-end performance information from our web site at
www.alliancebernstein.com (click on Investors/Products & Services/Mutual Funds).
A Word About Risk: Since the Fund invests in foreign currency denominated
securities, fluctuations may be magnified by changes in foreign exchange rates.
The Fund will invest substantially all of its assets in Greater China companies
and is subject to greater risk than would a fund with a more diversified
portfolio. Investments in Greater China companies entail risks different from,
and in certain cases, greater than, risks associated with investments in the
U.S. or in other international markets.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 5
INVESTMENT RESULTS
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2004
- --------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 71.93% 67.93%
5 Years 15.35% 15.35%
Since Inception (9/3/97) 3.01% 3.01%
CLASS B SHARE SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (DECEMBER 31, 2003)
- --------------------------------------------------------------------------------
1 Year 75.85%
5 Years 12.47%
Since Inception (9/3/97) 2.60%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. The Fund's investment results are for the periods shown and
are based on the Fund's Class B shares at net asset value (NAV). All fees and
expenses related to the operation of the Fund have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. Fund returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares. Fund returns reflect the reinvestment of dividends and/or capital gains
distributions in additional shares.
SEC returns reflect the applicable contingent deferred sales charge for Class B
shares (4% year 1, 3% year 2, 2% year 3, 1% year 4).
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that shares, when redeemed, may be worth more or less than their
original cost. You should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. For a free copy of the Fund's
prospectus, which contains this and other information, visit our web site at
www.alliancebernstein.com or call your financial advisor or Alliance at (800)
227-4618. Please read the prospectus carefully before you invest. You may obtain
current month-end performance information from our web site at
www.alliancebernstein.com (click on Investors/Products & Services/Mutual Funds).
A Word About Risk: Since the Fund invests in foreign currency denominated
securities, fluctuations may be magnified by changes in foreign exchange rates.
The Fund will invest substantially all of its assets in Greater China companies
and is subject to greater risk than would a fund with a more diversified
portfolio. Investments in Greater China companies entail risks different from,
and in certain cases, greater than, risks associated with investments in the
U.S. or in other international markets.
- --------------------------------------------------------------------------------
6 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
INVESTMENT RESULTS
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2004
Without Sales Charge With Sales Charge
1 Year 71.26% 70.26%
5 Years 15.33% 15.33%
Since Inception (9/3/97) 2.97% 2.97%
CLASS C SHARE SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER-END (DECEMBER 31, 2003)
- --------------------------------------------------------------------------------
1 Year 78.51%
5 Years 12.43%
Since Inception (9/3/97) 2.54%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. The Fund's investment results are for the periods shown and
are based on the Fund's Class C shares at net asset value (NAV). All fees and
expenses related to the operation of the Fund have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. Fund returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares. Fund returns reflect the reinvestment of dividends and/or capital gains
distributions in additional shares.
SEC returns reflect the applicable contingent deferred sales charge for Class C
shares (1% year 1).
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that shares, when redeemed, may be worth more or less than their
original cost. You should consider the investment objectives, risks, charges and
expenses of the Fund carefully before investing. For a free copy of the Fund's
prospectus, which contains this and other information, visit our web site at
www.alliancebernstein.com or call your financial advisor or Alliance at (800)
227-4618. Please read the prospectus carefully before you invest. You may obtain
current month-end performance information from our web site at
www.alliancebernstein.com (click on Investors/Products & Services/Mutual Funds).
A Word About Risk: Since the Fund invests in foreign currency denominated
securities, fluctuations may be magnified by changes in foreign exchange rates.
The Fund will invest substantially all of its assets in Greater China companies
and is subject to greater risk than would a fund with a more diversified
portfolio. Investments in Greater China companies entail risks different from,
and in certain cases, greater than, risks associated with investments in the
U.S. or in other international markets.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 7
TEN LARGEST HOLDINGS
January 31, 2004 (unaudited)
Percent of
Company U.S. $ Value Net Assets
- --------------------------------------------------------------------------------
Anhui Conch Cement Co., Ltd. Cl. H $ 1,700,735 2.9%
- --------------------------------------------------------------------------------
Huaneng Power International, Inc. Cl. H 1,492,787 2.6
- --------------------------------------------------------------------------------
Lianhua Supermarket Holdings Co.,
Ltd. Cl. H 1,279,348 2.2
- --------------------------------------------------------------------------------
Ctrip.com International, Ltd. (ADR) 1,200,600 2.1
- --------------------------------------------------------------------------------
Angang New Steel Co., Ltd. Cl. H 1,189,344 2.0
- --------------------------------------------------------------------------------
Autron Corp., Ltd. 1,166,189 2.0
- --------------------------------------------------------------------------------
GP Batteries International, Ltd. 1,133,713 1.9
- --------------------------------------------------------------------------------
Cheung Kong (Holdings), Ltd. 1,114,768 1.9
- --------------------------------------------------------------------------------
PICC Property & Casualty Co.,
Ltd. Cl. H 1,017,461 1.8
- --------------------------------------------------------------------------------
Denway Motors, Ltd. 994,548 1.7
- --------------------------------------------------------------------------------
$ 12,289,493 21.1%
- --------------------------------------------------------------------------------
8 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
PORTFOLIO OF INVESTMENTS
January 31, 2004 (unaudited)
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
COMMON STOCKS-99.7%
Hong Kong-76.4%
Aluminum Corp. of China, Ltd. Cl. H......... 1,200,000 $ 786,895
Angang New Steel Co., Ltd. Cl. H............ 2,500,000 1,189,344
Anhui Conch Cement Co., Ltd. Cl. H.......... 1,242,000 1,700,735
ASM Pacific Technology, Ltd. ............... 100,000 459,022
AV Concept Holdings, Ltd. .................. 1,435,000 300,750
AviChina Industry & Technology Co.,
Ltd. Cl. H(a)............................. 2,105,000 414,104
BOC Hong Kong (Holdings), Ltd. ............. 404,000 763,597
Brilliance China Automotive Holdings, Ltd. . 1,300,000 689,498
Chen Hsong Holdings, Ltd. .................. 300,000 225,654
Cheung Kong (Holdings), Ltd. ............... 120,000 1,114,768
Chia Hsin Cement Greater China Holding
Corp.(a).................................. 2,000,000 493,738
China Everbright, Ltd. ..................... 750,000 506,275
China Life Insurance Co., Ltd. Cl. H(a)..... 1,300,000 952,761
China Merchants Holdings International
Co., Ltd. ................................ 500,000 703,963
China Mobile (Hong Kong), Ltd. ............. 150,000 493,738
China National Aviation Co., Ltd. .......... 560,000 108,005
China Oilfield Services, Ltd. Cl. H......... 2,500,000 859,863
China Petroleum and Chemical Corp. Cl. H.... 1,300,000 518,168
China Pharmaceutical Group, Ltd. ........... 400,000 138,864
China Resources Enterprise, Ltd. ........... 238,000 312,135
China Resources Logic, Ltd. ................ 5,000,000 758,608
China Shipping Development Co., Ltd. Cl. H.. 1,200,000 840,898
China Southern Airlines Co., Ltd. Cl. H(a).. 300,000 135,007
China Unicom, Ltd. ......................... 350,000 405,020
Citic International Financial Holdings,
Ltd. ..................................... 1,000,333 540,206
CNOOC, Ltd. ................................ 400,000 815,182
COFCO International, Ltd. .................. 750,000 467,701
Ctrip.com International, Ltd. (ADR)(a)...... 41,400 1,200,600
Denway Motors, Ltd. ........................ 850,000 994,548
Esprit Holdings, Ltd. ...................... 100,000 324,016
Far East Consortium International, Ltd. .... 1,200,000 285,442
First Tractor Co., Ltd. Cl. H(a)............ 1,400,000 360,018
Fujian Zijin Mining Industry Co. Ltd.
Cl. H(a) ................................. 700,000 495,024
Group Sense International, Ltd. ............ 2,000,000 254,584
Hang Lung Group, Ltd. ...................... 300,000 478,309
Harbin Brewery Group, Ltd. ................. 1,200,000 501,453
Harbin Power Equipment Co., Ltd. Cl. H...... 1,000,000 266,799
HKR International, Ltd.(a).................. 600,000 244,940
Hong Kong Exchanges & Clearing, Ltd. ....... 200,000 498,881
Hopewell Highway Infrastructure, Ltd.(a).... 137,000 79,268
Hopewell Holdings, Ltd. .................... 220,000 396,019
HSBC Holdings Plc. ......................... 23,200 362,435
Huaneng Power International, Inc. Cl. H..... 900,000 1,492,787
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 9
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
Hutchison Whampoa, Ltd. .................... 25,200 $ 209,800
Industrial and Commercial Bank of China
(Asia), Ltd. ............................. 400,000 622,316
Jiangsu Expressway Co., Ltd. Cl. H.......... 500,000 244,298
Jiangxi Copper Co., Ltd. Cl. H.............. 1,000,000 530,383
Jingwei Textile Machinery Co., Ltd. Cl. H... 700,000 236,262
K Wah International Holdings, Ltd. ......... 3,000,000 648,032
Kingboard Chemical Holdings, Ltd. .......... 300,000 447,450
Kingdee International Software Group Co.,
Ltd. ..................................... 400,000 149,150
Kwang Sung Electronics H.K. Co., Ltd.(a).... 1,000,000 201,867
Li & Fung, Ltd. ............................ 300,000 543,884
Lianhua Supermarket Holdings Co.,
Ltd. Cl. H(a)............................. 1,000,000 1,279,348
Maanshan Iron & Steel Co., Ltd. Cl. H....... 1,400,000 454,522
New World Development Co., Ltd. ............ 500,000 546,455
Next Media, Ltd.(a)......................... 300,000 149,472
Norstar Founders Group, Ltd.(a)............. 1,500,000 549,670
Orient Overseas International, Ltd. ........ 150,000 520,740
Oriental Press Group, Ltd. ................. 1,200,000 466,737
Pacific Century Insurance Holdings, Ltd. ... 1,000,000 417,877
Pan Sino International Holding, Ltd.(a)..... 4,965,000 303,234
PetroChina Co., Ltd. Cl. H.................. 2,000,000 990,048
PICC Property & Casualty Co., Ltd. Cl. H(a). 2,168,000 1,017,461
Ports Design, Ltd.(a)....................... 200,000 366,446
Shougang Concord Century Holdings, Ltd. .... 4,000,000 586,314
Shun Tak Holdings, Ltd. .................... 442,000 184,702
Sino Land Co., Ltd. ........................ 800,000 555,456
Sinopec Shanghai Petrochemical Co.,
Ltd. Cl. H................................ 1,300,000 539,062
Sinopec Yizheng Chemical Fibre Co.,
Ltd. Cl. H................................ 1,500,000 345,231
Sinopec Zhenhai Refining and Chemical Co.,
Ltd. Cl. H................................ 700,000 616,530
Sinotrans, Ltd. Cl. H....................... 500,000 220,189
Swire Pacific, Ltd. Cl. A................... 20,500 141,677
Tai Cheung Holdings, Ltd. .................. 1,200,000 516,882
TCL International Holdings, Ltd. ........... 1,000,000 453,236
Tong Ren Tang Technologies Co., Ltd. Cl. H.. 300,000 567,028
TPV Technology, Ltd. ....................... 500,000 257,155
Tsingtao Brewery Co., Ltd. Cl. H............ 450,000 532,312
Vital Biotech Holdings, Ltd. ............... 3,000,000 312,444
Weiqiao Textile Co., Ltd. Cl. H(a).......... 360,000 536,940
Wheelock and Co., Ltd. ..................... 200,000 288,014
Wing Hang Bank, Ltd. ....................... 52,500 336,841
Wing Lung Bank, Ltd. ....................... 40,000 250,984
Wumart Stores, Inc. Cl. H(a)................ 500,000 523,954
Yanzhou Coal Mining Co., Ltd. Cl. H......... 500,000 446,807
Yue Yuen Industrial (Holdings), Ltd. ....... 50,000 142,400
- --------------------------------------------------------------------------------
10 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
Zhejiang Expressway Co., Ltd. Cl. H......... 200,000 $ 128,578
Zhejiang Glass Co., Ltd. Cl. H.............. 500,000 159,115
------------
44,466,925
------------
Singapore-4.0%
Autron Corp., Ltd. ......................... 5,000,000 1,166,189
GP Batteries International, Ltd. ........... 500,000 1,133,713
------------
2,299,902
------------
Taiwan-19.3%
Asustek Computer, Inc. ..................... 200,000 476,762
AU Optronics Corp. ......................... 450,000 646,327
Basso Industry Corp. ....................... 200,000 443,778
Cathay Financial Holding Co.,
Ltd. (GDR)(a)(b) 4,200 68,586
Cathay Real Estate Development Co., Ltd.(a). 1,200,000 633,283
Chunghwa Telecom Co., Ltd. (ADR)............ 4,100 65,600
Compal Electronics, Inc. ................... 269,500 367,684
EVA Airways Corp. .......................... 1,001,536 510,528
Flexium Interconnect, Inc.(a)............... 300,000 463,268
HannStar Display Corp. (GDR)(a)............. 45,300 364,212
Hon Hai Precision Industry Co., Ltd. ....... 205,360 954,447
Hung Poo Real Estate Development Corp.(a)... 750,000 625,187
Jenn Feng Industrial Co., Ltd. ............. 240,000 492,954
MediaTek, Inc. ............................. 64,550 720,018
Mega Financial Holding Co., Ltd. ........... 1,000,000 653,673
Nan Ya Plastics Corp. ...................... 400,894 570,988
Richtek Technology Corp.(a)................. 25,000 145,427
Taiwan Green Point Enterprises Co.,
Ltd. Co. ................................. 140,000 369,415
Taiwan Semiconductor Manufacturing Co.,
Ltd.(a)..................................... 398,914 789,455
United Microelectronics Corp.(a)............ 954,812 904,709
Wan Hai Lines, Ltd. ........................ 449,240 431,055
Yageo Corp.(a).............................. 1,000,000 521,739
------------
11,219,095
------------
Total Investments-99.7%
(cost $45,494,732)....................... 57,985,922
Other assets less liabilities-0.3%.......... 184,991
------------
Net Assets-100%............................. $ 58,170,913
------------
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(a) Non-income producing security.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At January 31,
2004, the market value of this security amounted to $68,586 or 0.1% of net
assets.
Glossary of terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 11
STATEMENT OF ASSETS & LIABILITIES
January 31, 2004 (unaudited)
Assets
Investments in securities, at value (cost $45,494,732).. $ 57,985,922
Foreign cash, at value (cost $354,950).................. 361,594
Receivable for capital stock sold....................... 1,139,044
Dividends receivable.................................... 3,086
------------
Total assets............................................ 59,489,646
------------
Liabilities
Due to custodian........................................ 480,687
Payable for capital stock redeemed...................... 516,792
Payable for investment securities purchased and
foreign currency transactions......................... 135,257
Advisory fee payable.................................... 60,657
Distribution fee payable................................ 31,270
Accrued expenses........................................ 94,070
------------
Total liabilities....................................... 1,318,733
------------
Net Assets.............................................. $ 58,170,913
------------
Composition of Net Assets
Capital stock, at par................................... $ 4,780
Additional paid-in capital.............................. 48,027,301
Accumulated net investment loss......................... (385,998)
Accumulated net realized loss on investment and
foreign currency transactions......................... (1,973,000)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities........... 12,497,830
------------
$ 58,170,913
------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($27,945,517/2,254,517 shares of capital stock
issued and outstanding)............................... $12.40
Sales charge--4.25% of public offering price............ .55
------
Maximum offering price.................................. $12.95
------
Class B Shares
Net asset value and offering price per share
($15,244,366/1,275,374 shares of capital stock
issued and outstanding)............................... $11.95
------
Class C Shares
Net asset value and offering price per share
($13,312,419/1,117,230 shares of capital stock
issued and outstanding)............................... $11.92
------
Advisor Class Shares
Net asset value, redemption and offering price per share
($1,668,611/132,644 shares of capital stock
issued and outstanding)............................... $12.58
------
See notes to financial statements.
- --------------------------------------------------------------------------------
12 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
STATEMENT OF OPERATIONS
Six Months Ended January 31, 2004 (unaudited)
Investment Income
Dividends (net of foreign taxes withheld
of $5,198)........................... $ 160,022
Interest............................... 8,168 $ 168,190
---------------
Expenses
Advisory fee........................... 166,824
Distribution fee--Class A.............. 22,066
Distribution fee--Class B.............. 47,528
Distribution fee--Class C.............. 42,307
Custodian.............................. 110,615
Administrative......................... 67,500
Audit and legal........................ 45,348
Transfer agency........................ 35,134
Registration........................... 29,194
Printing............................... 21,207
Directors' fees........................ 9,846
Miscellaneous.......................... 4,418
---------------
Total expenses......................... 601,987
Less: expenses waived and reimbursed by
the Adviser and the Transfer Agent
(see Note B)......................... (120,605)
Less: expenses offset arrangement
(see Note B)......................... (6)
---------------
Net expenses........................... 481,376
---------------
Net investment loss.................... (313,186)
---------------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain on:
Investment transactions............. 237,118
Foreign currency transactions....... 43,791
Net change in unrealized appreciation/depreciation of:
Investments......................... 9,719,247
Foreign currency denominated assets
and liabilities................... 6,386
---------------
Net gain on investment and
foreign currency transactions........ 10,006,542
---------------
Net Increase in Net Assets
from Operations...................... $ 9,693,356
---------------
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 13
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
January 31, 2004 July 31,
(unaudited) 2003
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income (loss)........... $ (313,186) $ 9,233
Net realized gain (loss) on investment
and foreign currency transactions.... 280,909 (843,447)
Net change in unrealized
appreciation/depreciation
of investments and foreign
currency denominated assets
and liabilities...................... 9,725,633 2,848,106
--------------- ---------------
Net increase in net assets from
operations........................... 9,693,356 2,013,892
Dividends to shareholders from
Net investment income
Class A............................. (56,673) (23,187)
Class B............................. (14,331) (14,269)
Class C............................. (13,116) (5,705)
Advisor Class....................... (5,465) (2,310)
Capital Stock Transactions
Net increase........................... 34,812,550 4,769,657
--------------- ---------------
Total increase......................... 44,416,321 6,738,078
Net Assets
Beginning of period.................... 13,754,592 7,016,514
--------------- ---------------
End of period (including undistributed
net investment income of $16,773
at July 31, 2003).................... $ 58,170,913 $ 13,754,592
--------------- ---------------
See notes to financial statements.
- --------------------------------------------------------------------------------
14 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
NOTES TO FINANCIAL STATEMENTS
January 31, 2004 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Greater China '97 Fund, Inc. (the "Fund") was organized as a
Maryland corporation on April 30, 1997 and is registered under the Investment
Company Act of 1940 as a non-diversified, open-end management investment
company. The Fund offers Class A, Class B, Class C and Advisor Class shares.
Class A shares are sold with an initial 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 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. 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
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 15
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
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.
- --------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
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. 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 securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees than
Class A and Advisor Class shares. Advisor Class shares have no distribution
fees.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, 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 a
fee at an annual rate of 1% of the Fund's average daily net assets. Such fee is
accrued daily and paid monthly.
The Adviser has agreed for the current fiscal year to waive its fee and bear
certain expenses so that total expenses do not exceed on an annual basis to
2.50%, 3.20%, 3.20%, and 2.20% of average daily net assets, respectively, for
the Class A, Class B, Class C and Advisor Class shares. For the six months ended
January 31, 2004, such reimbursement amounted to $38,853.
Effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee so as to charge the Fund at the reduced annual rate of .75% of the first
$2.5 billion, .65% of the next $2.5 billion and .60% in excess of $5 billion, of
the average daily net assets of the Fund. For the six months ended January 31,
2004, such waiver amounted to $10,882. The amount of the fee waiver may increase
or decrease as a result of a final, definitive agreement with the New York
Attorney
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 17
- --------------------------------------------------------------------------------
General's Office ("NYAG"). For a more complete discussion of the Adviser's
settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Fund may reimburse the Adviser for
certain legal and accounting services provided to the Fund by the Adviser. For
the six months ended January 31, 2004, the Adviser agreed to waive its fees for
such services. Such waiver amounted to $67,500.
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 $21,856 for the six months ended January 31,
2004. During the period, AGIS agreed to waive a portion of its fees for such
services. Such waiver amounted to $3,370.
For the six months ended January 31, 2004, the Fund's expenses were reduced by
$6 under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, 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 retained
front-end sales charges of $6,135 from the sale of Class A shares and received
$14, $6,434 and $9,954 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended January 31, 2004.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 2004, amounted to $110,488, none of which 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 1% of the Fund's average daily net assets
attributable to Class A shares and 1% of the Fund's average daily net assets
attributable to both 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 amounts of $2,127,115 and
$739,193 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
- --------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
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 six months ended January 31, 2004, were as follows:
Purchases Sales
--------------- ---------------
Investment securities (excluding
U.S. government securities).......... $ 40,073,409 $ 4,955,333
U.S. government securities............. -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Gross unrealized appreciation........................... $ 12,930,077
Gross unrealized depreciation........................... (438,887)
--------------
Net unrealized appreciation............................. $ 12,491,190
--------------
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 unrealized appreciation and
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 a counterparty to meet the terms of a contract
and from unanticipated movements in the value of 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.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 19
NOTE E
Capital Stock
There are 12,000,000,000 shares of $.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
=================================== ==================================
Shares Amount
=================================== ==================================
Six Months Ended Six Months Ended
January 31, 2004 Year Ended January 31, 2004 Year Ended
(unaudited) July 31, 2003 (unaudited) July 31, 2003
-----------------------------------------------------------------------
Class A
Shares sold 2,464,096 1,067,796 $ 27,415,411 $ 7,841,000
- --------------------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 3,930 2,677 44,053 18,418
- --------------------------------------------------------------------------------------------------
Shares converted from
Class B 7,726 11,194 88,091 77,423
- --------------------------------------------------------------------------------------------------
Shares redeemed (670,271) (930,890) (7,572,669) (6,739,131)
- --------------------------------------------------------------------------------------------------
Net increase 1,805,481 150,777 $ 19,974,886 $ 1,197,710
==================================================================================================
Class B
Shares sold 1,292,972 2,528,499 $ 13,269,727 $ 17,414,309
- --------------------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 984 1,747 10,661 11,653
- --------------------------------------------------------------------------------------------------
Shares converted to
Class A (8,004) (11,581) (88,091) (77,423)
- --------------------------------------------------------------------------------------------------
Shares redeemed (554,268) (2,422,584) (5,392,086) (16,700,679)
- --------------------------------------------------------------------------------------------------
Net increase 731,684 96,081 $ 7,800,211 $ 647,860
==================================================================================================
Class C
Shares sold 1,370,334 4,401,475 $ 14,228,568 $ 30,883,247
- --------------------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 1,019 747 11,009 4,984
- --------------------------------------------------------------------------------------------------
Shares redeemed (825,074) (4,009,743) (8,315,797) (28,032,481)
- --------------------------------------------------------------------------------------------------
Net increase 546,279 392,479 $ 5,923,780 $ 2,855,750
==================================================================================================
Advisor Class
Shares sold 213,977 76,366 $ 2,384,307 $ 581,179
- --------------------------------------------------------------------------------------------------
Shares issued in
reinvestment
of dividends 217 79 2,468 549
- --------------------------------------------------------------------------------------------------
Shares redeemed (116,067) (67,463) (1,273,102) (513,391)
- --------------------------------------------------------------------------------------------------
Net increase 98,127 8,982 $ 1,113,673 $ 68,337
==================================================================================================
- --------------------------------------------------------------------------------
20 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
NOTE F
Concentration of Risk
Investing in securities of foreign companies involves special risk which include
the possibility of future political and economic developments which could
adversely affect the value of such securities. Moreover, securities of many
foreign companies and their markets may be less liquid and their prices more
volatile than those of comparable United States companies.
The Fund has invested approximately 76% of its net assets in Hong Kong equity
securities. Political, social or economic changes in this market may have a
greater impact on the value of the Fund's portfolio due to this concentration.
NOTE G
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 expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended January 31, 2004.
NOTE H
Distributions to Shareholders
The tax character of distributions to be paid for the fiscal year ending July
31, 2004 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended July 31, 2003 and
July 31, 2002 were as follows:
2003 2002
--------------- ---------------
Distributions paid from:
Ordinary income..................... $ 45,471 $ -0-
--------------- --------------
Total taxable distributions............ 45,471 -0-
----------
Total distributions paid............... $ 45,471 $ -0-
--------------- --------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 21
As of July 31, 2003, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Undistributed ordinary income.......................... $ 85,289
Accumulated capital and other losses................... (2,138,147)(a)
Unrealized appreciation/(depreciation)................. 2,587,919(b)
---------------
Total accumulated earnings/(deficit)................... $ 535,061
===============
(a) On July 31, 2003, the Fund had a net capital loss carryforward for federal
income tax purposes of $1,733,828 of which $138,490 expires in the year
2007, $12,025 expires in the year 2009, $671,116 expires in the year 2010
and $912,197 expires in the year 2011. To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be
distributed. Net capital losses incurred after October 31, and within the
taxable year are deemed to arise on the first business day of the Fund's
next taxable year. For the year ended July 31, 2003, the Fund deferred to
August 1, 2003, post October capital losses of $404,319.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral
of losses on wash sales and the tax mark to market on passive foreign
investment companies.
NOTE I
Legal Proceedings
As has been previously reported in the press, the Staff of the U.S. Securities
and Exchange Commission ("SEC") and the 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.
On December 18, 2003, Alliance Capital 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 market timing
relationships described in the SEC Order. 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;
- --------------------------------------------------------------------------------
22 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
================================================================================
(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.
In anticipation of final, definitive documentation and effective January 1,
2004, the Adviser began waiving a portion of its advisory fee. For a more
complete description of this waiver, please see "Advisory Fee and Other
Transactions with Affiliates" above.
The 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.
In addition, the Independent Directors of the Fund ("the Independent Directors")
have initiated an investigation of the above-mentioned matters with the advice
of an independent economic consultant and independent counsel. The Independent
Directors have formed a special committee to supervise the investigation.
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.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 23
Since October 2, 2003, approximately 40 additional lawsuits making factual
allegations similar to those in the Hindo Complaint were filed against Alliance
Capital and certain other defendants, some of which name the Fund as a
defendant. All of these lawsuits seek an unspecified amount of damages.
As a result of the matters discussed above, 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.
- --------------------------------------------------------------------------------
24 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
================================================================================
Class A
================================================================================
Six Months
Ended
January 31, Year Ended July 31,
2004 ----------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
Net asset value,
beginning of period...................... $ 8.82 $ 7.55 $ 8.45 $ 10.34 $ 8.20 $ 4.84
Income From Investment
Operations
Net investment
income (loss)(a)(b)...................... (.09)(c) .04 .09 (.01) (.04) .02
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............................. 3.71 1.32 (.99) (1.88) 2.18 3.34
Net increase (decrease)
in net asset value from
operations............................... 3.62 1.36 (.90) (1.89) 2.14 3.36
Less: Dividends
Dividends from
net investment income.................... (.04) (.09) -0- -0- -0- -0-
Net asset value,
end of period............................ $12.40 $ 8.82 $ 7.55 $ 8.45 $ 10.34 $ 8.20
Total Return
Total investment return based
on net asset value(d).................... 41.07% 18.35% (10.65)% (18.28)% 26.10% 69.42%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted).......................... $27,946 $3,958 $2,253 $2,039 $2,471 $1,011
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements......................... 2.50%(f) 2.50% 2.50% 2.51%(e) 2.52%(e) 2.52%(e)
Expenses, before waivers/
reimbursements......................... 3.23%(f) 9.24% 10.82% 9.50%(e) 9.92%(e) 19.68%(e)
Net investment
income (loss)(b)....................... (1.61)%(c)(f) .58% 1.18% (.09)% (.42)% .36%
Portfolio turnover rate.................... 16% 102% 63% 64% 158% 94%
See footnote summary on page 28.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 25
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
================================================================================
Class B
================================================================================
Six Months
Ended
January 31, Year Ended July 31,
2004 ----------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
Net asset value,
beginning of period...................... $ 8.52 $ 7.30 $ 8.21 $ 10.13 $ 8.12 $ 4.82
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment
income (loss)(a)(b)...................... (.11)(c) (.01) .03 (.07) (.11) (.01)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............................. 3.56 1.27 (.94) (1.85) 2.12 3.31
----------------------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations............................... 3.45 1.26 (.91) (1.92) 2.01 3.30
----------------------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income.................... (.02) (.04) -0- -0- -0- -0-
----------------------------------------------------------------------------------
Net asset value,
end of period............................ $ 11.95 $ 8.52 $ 7.30 $ 8.21 $ 10.13 $ 8.12
----------------------------------------------------------------------------------
Total Return
Total investment return based
on net asset value(d) ................... 40.45% 17.32% (11.08)% (18.95)% 24.75% 68.46%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted).......................... $15,244 $4,632 $3,266 $3,234 $4,047 $1,902
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements......................... 3.20%(f) 3.20% 3.20% 3.21%(e) 3.22%(e) 3.22%(e)
Expenses, before waivers/
reimbursements......................... 3.94%(f) 9.98% 11.56% 10.28%(e) 10.72%(e) 20.22%(e)
Net investment
income (loss)(b)....................... (2.09)%(c)(f) (.11)% .41% (.81)% (1.13)% (.22)%
Portfolio turnover rate.................... 16% 102% 63% 64% 158% 94%
See footnote summary on page 28.
- --------------------------------------------------------------------------------
26 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
================================================================================
Class C
================================================================================
Six Months
Ended
January 31, Year Ended July 31,
2004 ----------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
Net asset value,
beginning of period...................... $ 8.50 $ 7.30 $ 8.21 $ 10.13 $ 8.11 $ 4.82
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment
income (loss)(a)(b) ..................... (.11)(c) (.01) .04 (.08) (.13) (.03)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............................. 3.55 1.25 (.95) (1.84) 2.15 3.32
----------------------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations............................... 3.44 1.24 (.91) (1.92) 2.02 3.29
----------------------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income.................... (.02) (.04) -0- -0- -0- -0-
----------------------------------------------------------------------------------
Net asset value,
end of period............................ $11.92 $ 8.50 $ 7.30 $ 8.21 $ 10.13 $ 8.11
----------------------------------------------------------------------------------
Total Return
Total investment return based
on net asset value(d).................... 40.43% 17.05% (11.08)% (18.95)% 24.91% 68.26%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted).......................... $13,312 $4,856 $1,302 $877 $1,372 $162
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements......................... 3.20%(f) 3.20% 3.20% 3.21%(e) 3.22%(e) 3.22%(e)
Expenses, before waivers/
reimbursements......................... 3.94%(f) 10.19% 11.28% 10.13%(e) 10.01%(e) 20.41%(e)
Net investment
income (loss)(b)....................... (2.09)%(c)(f) (.15)% .50% (.84)% (1.31)% (.49)%
Portfolio turnover rate.................... 16% 102% 63% 64% 158% 94%
See footnote summary on page 28.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 27
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
================================================================================
Advisor Class
================================================================================
Six Months
Ended
January 31, Year Ended July 31,
2004 ----------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
Net asset value,
beginning of period...................... $ 8.94 $ 7.66 $ 8.53 $ 10.41 $ 8.24 $ 4.85
----------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income (loss)(a)(b) ........ (.08)(c) .08 .10 .06 (.02) .04
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............................. 3.76 1.31 (.97) (1.94) 2.19 3.35
----------------------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations............................... 3.68 1.39 (.87) (1.88) 2.17 3.39
----------------------------------------------------------------------------------
Less: Dividends
Dividends from
net investment income.................... (.04) (.11) -0- -0- -0- -0-
----------------------------------------------------------------------------------
Net asset value, end of period ............ $ 12.58 $ 8.94 $ 7.66 $ 8.53 $10.41 $ 8.24
----------------------------------------------------------------------------------
Total Return
Total investment return based
on net asset value(d).................... 41.24% 18.55% (10.20)% (18.06)% 26.34% 69.90%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted).......................... $1,669 $309 $196 $386 $273 $161
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements......................... .20%(f) 2.20% 2.20% 2.21%(e) 2.22%(e) 2.22%(e)
Expenses, before waivers/
reimbursements......................... 2.93%(f) 8.69% 10.57% 9.35%(e) 9.61%(e) 19.01%(e)
Net investment
income (loss)(b)....................... (1.32)%(c)(f) 1.14% 1.28% .71% (.15)% .58%
Portfolio turnover rate.................... 16% 102% 63% 64% 158% 94%
(a) Based on average shares outstanding.
(b) Net of expenses waived/reimbursed by the Adviser.
(c) Net of expenses waived by the Transfer Agent.
(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 charges or
contingent deferred sales charges are not reflected in the calculation of
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.
(e) 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 July 31,
--------------------------------
2001 2000 1999
--------------------------------
Class A............... 2.50% 2.50% 2.50%
Class B............... 3.20% 3.20% 3.20%
Class C............... 3.20% 3.20% 3.20%
Advisor Class ........ 2.20% 2.20% 2.20%
(f) Annualized.
- --------------------------------------------------------------------------------
28 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
David H. Dievler(1)
Clifford L. Michel(1)
Tak-Lung Tsim
OFFICERS
Marc O. Mayer, President
Matthew W. S. Lee(2), Senior Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Distributor
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. Lee is the person primarily responsible for the day-to-day management of
the Fund's investment portfolio.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 29
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
International Portfolio
Tax-Managed International 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
Global Research Growth 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
International 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,+ 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.
+ 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.
- --------------------------------------------------------------------------------
30 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
NOTES
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 31
NOTES
- --------------------------------------------------------------------------------
32 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
================================================================================
ALLIANCEBERNSTEIN GREATER CHINA '97 FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] AllianceBernstein(SM)
Investment Research and Management
(SM) This service mark used under license from the owner, Alliance Capital
Management L.P.
GCFSR0104
ITEM 2. CODE OF ETHICS.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a Semi-Annual report to shareholders.
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. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On March 17, 2004 the Fund adopted procedures, effective April 1, 2004, by which
shareholders may recommend nominees to the Fund's Board of Directors. Prior
thereto, the Fund's Board of Directors did not accept shareholder
recommendations for nominees to the Fund's Board.
ITEM 10. 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 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
11 (b) (1) Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
11 (b) (2) Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
11 (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 Greater China `97 Fund, Inc.
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: March 31, 2004
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: March 31, 2004
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: March 31, 2004