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: 811-08702
Alliance All-Market Advantage 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: September 30, 2004
Date of reporting period: March 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
Alliance All-Market Advantage Fund
Closed End
Semi-Annual Report--March 31, 2004
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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.
May 25, 2004
Semi-Annual Report
This report provides management's discussion of fund performance for Alliance
All-Market Advantage Fund (the "Fund"), a closed-end fund that trades under the
New York Stock Exchange symbol "AMO", for the semi-annual reporting period
ended March 31, 2004.
Investment Objectives and Policies
This closed-end fund seeks long-term growth of capital through all market
conditions. Consistent with the investment style of Alliance's Large Cap Growth
Group, the Fund will invest in a core portfolio of equity securities (common
stocks, securities convertible into common stocks and rights and warrants to
subscribe for or purchase common stocks) of large, intensively researched,
high-quality companies that, in Alliance's judgment, are likely to achieve
superior earnings growth. The core portfolio typically consists of the 25
companies that are the most highly regarded at any point in time. The balance
of the Fund's portfolio may be invested in equity securities of other U.S. and
non-U.S. companies that we believe have exceptional growth potential. The Fund
makes substantial use of specialized trading techniques, such as short selling,
options, futures and leverage in an effort to enhance returns. The use of these
techniques entails special risks.
Investment Results
The following table provides performance data for the Fund and its benchmark,
the Russell 1000 Growth Index, as well as the Standard & Poor's (S&P) 500 Stock
Index for the six- and 12-month periods ended March 31, 2004.
INVESTMENT RESULTS*
Periods Ended March 31, 2004
Returns
6 Months 12 Months
-----------------------------------
Alliance All-Market
Advantage Fund (NAV) 10.52% 27.00%
S&P 500 Stock Index 14.07% 35.10%
Russell 1000 Growth Index 11.28% 32.18%
* The Fund's investment results are for the periods shown and are based on the
net asset value (NAV) as of March 31, 2004. Performance assumes reinvestment of
distributions and does not account for taxes. All fees and expenses related to
the operation of the Fund have been deducted. Past performance is no guarantee
of future results.
The Indices do not reflect fees and expenses associated with the active
management of a mutual fund portfolio. The unmanaged Russell 1000 Growth Index
contains those securities in the Russell 1000 Index with a greater-than-average
growth orientation. The unmanaged Russell 1000 Index is comprised of 1000 of
the largest capitalized companies that are traded in the United States. The
unmanaged Standard & Poor's (S&P) 500 Stock Index is comprised of 500 U.S.
companies and is a common measure of the performance of the overall U.S. stock
market. Investors cannot invest directly in an index, and its results are not
indicative of any specific investment, including Alliance All-Market Advantage
Fund.
Alliance All-Market Advantage Fund o 1
For the six-month period ended March 31, 2004, the Fund underperformed its
benchmark, the Russell 1000 Growth Index. The Fund underperformed the benchmark
due to its overweight positions in technology, consumer discretionary and
utilities, and its underweight position in consumer staples. The Fund received
positive contribution from its overweight positions in financials and in the
health care management service sector.
For the 12-month period ended March 31, 2004, the Fund also underperformed its
benchmark. Underperformance was mainly due to the Fund's overweight positions
in the consumer discretionary sector and in utilities, and its underweight
position in consumer staples. Offsetting some of this underperformance was
strong stock picking in technology and the Fund's overweight position in
financials. Another contributing factor to the Fund's underperformance during
the period was that the market favored small capitalization stocks in sharp
contrast to the Fund's large capitalization mandate.
Market Review and Investment Strategy
The U.S. equity markets continued to benefit from an improving global gross
domestic product. In the U.S., the economy is benefiting from low inflation,
low interest rates, a weak U.S. dollar, strong productivity and a stimulative
fiscal and monetary policy. This has led to strong corporate profitability,
strong corporate cash flow, improving capital expenditures and now an improving
job market. Globally, improving economic trends in Asia are also helping. The
risks to this improving economic picture continue to be geopolitical tensions,
inflation (oil) and consumer spending (jobs).
Our strategy during the period was twofold. First, opportunistically add to
growth names tied to emerging yet clearly discernable trends (broadband,
investment banking), and second, continue to own reliable growth names not
dependent on economic factors (health care). During the past 12 months, we
increased the Fund's exposure to technology, as we believe many of the names
will benefit from the improving capital expenditure budgets from corporations.
We continued to focus on companies that offer unique product positioning and
appear capable of generating strong revenue growth, as well as those management
teams that judiciously use their capital to fortify shareholder value.
2 o Alliance All-Market Advantage Fund
PORTFOLIO SUMMARY
March 31, 2004 (unaudited)
INCEPTION DATE
11/4/94
PORTFOLIO STATISTICS
Net Assets ($mil): $52.6
SECTOR BREAKDOWN
43.9% Technology
18.3% Finance
17.0% Healthcare
12.0% Consumer Services
3.4% Capital Goods
1.6% Consumer Staples
0.6% Energy
3.2% Short-Term
All data as of March 31, 2004. The Fund's sector breakdown is expressed as a
percentage of total investments and may vary over time.
Alliance All-Market Advantage Fund o 3
TEN LARGEST HOLDINGS
March 31, 2004 (unaudited)
Percent of
Company U.S. $ Value Net Assets
- -------------------------------------------------------------------------------
Intel Corp. $ 2,034,560 3.9%
Yahoo!, Inc. 2,016,485 3.8
MBNA Corp. 1,950,678 3.7
eBay, Inc. 1,876,763 3.6
Microsoft Corp. 1,772,870 3.4
General Electric Co.(a) 1,756,018 3.3
Marvell Technology Group Ltd. (Bermuda) 1,675,860 3.2
Viacom, Inc. Cl. B 1,664,112 3.1
JP Morgan Chase & Co. 1,464,055 2.8
Anthem, Inc. 1,377,728 2.6
$17,589,129 33.4%
(a) Adjusted for market value of call options purchased.
4 o Alliance All-Market Advantage Fund
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-87.6%
Technology-44.6%
Communication Equipment-6.8%
Cisco Systems, Inc.(a) 27,200 $ 639,744
Corning, Inc.(a) 97,500 1,090,050
Juniper Networks, Inc.(a) 32,200 837,522
Nokia Corp. (ADR) (Finland) 22,600 458,328
QUALCOMM, Inc. 8,400 557,928
------------
3,583,572
Computer Hardware/Storage-3.3%
Dell, Inc.(a) 17,500 588,350
EMC Corp.(a) 82,800 1,126,908
------------
1,715,258
Computer Services-1.0%
Agilent Technologies, Inc.(a) 17,100 540,873
Computer Software-9.1%
Electronic Arts, Inc.(a) 17,140 924,874
Microsoft Corp.(b) 71,000 1,772,870
Oracle Corp.(a) 22,000 264,220
SAP AG (ADR) (Germany) 13,000 511,030
Symantec Corp.(a) 23,800 1,101,940
VERITAS Software Corp.(a) 8,500 228,735
------------
4,803,669
Internet Infrastructure-3.6%
eBay, Inc.(a) 27,070 1,876,763
Internet Media-3.8%
Yahoo!, Inc.(a) 41,500 2,016,485
Semiconductor Capital Equipment-2.4%
Applied Materials, Inc.(a) 57,900 1,237,902
Semiconductor Components-14.6%
Broadcom Corp. Cl.A(a) 34,400 1,347,448
Intel Corp.(b) 74,800 2,034,560
Marvell Technology Group Ltd. (Bermuda)(a) 37,200 1,675,860
NVIDIA Corp.(a) 11,700 309,933
Silicon Laboratories, Inc.(a) 10,400 549,952
Taiwan Semiconductor Manufacturing Co. Ltd.
(ADR) (Taiwan)(a) 99,048 1,034,061
Texas Instruments, Inc. 26,000 759,720
------------
7,711,534
------------
23,486,056
Alliance All-Market Advantage Fund o 5
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Finance-16.5%
Banking - Money Centers-2.8%
JP Morgan Chase & Co. 34,900 $ 1,464,055
Brokerage & Money Management-7.6%
Franklin Resources, Inc. 9,900 551,232
Lehman Brothers Holdings, Inc. 12,700 1,052,449
Merrill Lynch & Co., Inc. 22,500 1,340,100
Morgan Stanley 18,200 1,042,860
------------
3,986,641
Insurance-2.4%
The Progressive Corp. 14,500 1,270,200
Miscellaneous-3.7%
MBNA Corp. 70,600 1,950,678
------------
8,671,574
Healthcare-14.3%
Biotechnology-0.5%
Gilead Sciences, Inc.(a) 4,300 239,811
Drugs-2.6%
Forest Laboratories, Inc.(a) 15,400 1,102,948
Teva Pharmaceutical Industries Ltd.
(ADR) (Israel) 4,300 272,663
------------
1,375,611
Medical Products-6.8%
Alcon, Inc. (Switzerland) 13,000 822,900
Boston Scientific Corp.(a) 26,400 1,118,832
St. Jude Medical, Inc.(a) 15,000 1,081,500
Zimmer Holdings, Inc.(a) 7,900 582,862
------------
3,606,094
Medical Services-4.4%
Anthem, Inc.(a)(b) 15,200 1,377,728
Caremark Rx, Inc.(a) 28,900 960,925
------------
2,338,653
------------
7,560,169
Consumer Services-10.2%
Broadcasting & Cable-5.8%
News Corp. Ltd. pfd (ADR) (Australia) 16,800 532,728
The E.W. Scripps Co. Cl. A(b) 5,500 556,105
Time Warner, Inc.(a) 16,500 278,190
Viacom, Inc. Cl.B 42,441 1,664,112
------------
3,031,135
Entertainment & Leisure-0.5%
Carnival Corp. (Panama) 6,200 278,442
6 o Alliance All-Market Advantage Fund
Shares or
Company Contracts(c) U.S. $ Value
- -------------------------------------------------------------------------------
Retail - General Merchandise-3.9%
Bed Bath & Beyond, Inc.(a) 20,100 $ 839,376
Lowe's Cos., Inc. 5,000 280,650
Target Corp. 20,800 936,832
------------
2,056,858
------------
5,366,435
Capital Goods-1.4%
Miscellaneous-1.4%
General Electric Co. 23,400 714,168
Energy-0.6%
Oil Service-0.6%
Baker Hughes, Inc. 9,000 328,320
Total Common Stocks & Other Investments
(cost $38,992,513) 46,126,722
CALL OPTIONS PURCHASED(a)-15.0%
American International Group, Inc.
expiring May '04 @ $45 308 814,660
Amgen, Inc.
expiring Jul '04 @ $42.50 310 497,550
Avon Products, Inc.
expiring Apr '04 @ $55 167 347,360
Cisco Systems, Inc.
expiring Apr '04 @ $17.50 480 290,400
Citigroup, Inc.
expiring Jun '04 @ $37.50 501 713,925
Dell, Inc.
expiring May '04 @ $20 340 460,700
General Electric Co.
expiring Jun '04 @ $15 670 1,041,850
Lowe's Cos., Inc.
expiring Apr '04@ $40 377 606,970
Motorola, Inc.
expiring Apr '04 @ $12 478 267,680
Pfizer, Inc.
expiring Jan '05 @ $25 675 695,250
Procter & Gamble Co.
expiring Jul '04 @ $70 150 523,500
Tyco International Ltd.
expiring Apr '04 @ $20 202 173,720
UnitedHealth Group, Inc.
expiring Jun '04 @ $35 250 737,500
Wal-Mart Stores, Inc.
expiring Jun '04 @ $40 378 746,550
Total Call Options Purchased
(cost $7,489,797) 7,917,615
Alliance All-Market Advantage Fund o 7
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-3.4%
Time Deposit-3.4%
Bank of New York
0.50%, 4/01/04
(cost $1,783,000) $ 1,783 $ 1,783,000
Total Investments-106.0%
(cost $48,265,310) 55,827,337
Other assets less liabilities-(6.0)% (3,182,301)
Net Assets-100% $52,645,036
FINANCIAL FUTURES CONTRACTS SOLD (see Note C)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Month Value 2004 Appreciation
- ------ ------------ ------------- ------------ ----------- ----------------
S&P 500 June
Index 30 2004 $8,509,350 $8,436,750 $72,600
(a) Non-income producing security.
(b) Position, or portion thereof, with an aggregate market value of
$2,350,246, has been segregated to collateralize open futures contracts.
(c) One contract relates to 100 shares unless otherwise indicated.
Glossary:
ADR-American Depositary Receipt
See notes to financial statements.
8 o Alliance All-Market Advantage Fund
STATEMENT OF ASSETS & LIABILITIES
March 31, 2004 (unaudited)
Assets
Investments in securities, at value (cost $48,265,310) $55,827,337
Cash 716
Receivable for investment securities sold 4,047,653
Dividends receivable 21,445
Total assets 59,897,151
Liabilities
Payable for investment securities purchased 5,596,974
Dividend payable 1,317,272
Administrative fee payable 61,585
Advisory fee payable 56,421
Payable for variation margin on futures contracts 24,000
Accrued expenses 195,863
Total liabilities 7,252,115
Net Assets $52,645,036
Composition of Net Assets
Capital stock, at par $ 36,490
Additional paid-in capital 69,244,057
Accumulated net investment loss (375,425)
Accumulated net realized loss on investment transactions (23,894,713)
Net unrealized appreciation of investments 7,634,627
$52,645,036
Net Asset Value Per Share
(based on 3,648,952 shares outstanding) $14.43
See notes to financial statements.
Alliance All-Market Advantage Fund o 9
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2004 (unaudited)
Investment Income
Dividends (net of foreign taxes
withheld of $1,418) $ 110,357
Interest 5,426 $ 115,783
Expenses
Advisory fee 237,252
Custodian 65,466
Administrative 61,585
Audit 25,768
Shareholder servicing 26,671
Directors' fees 20,453
Printing 19,857
Registration 12,030
Transfer agency 8,996
Legal 7,811
Miscellaneous 5,319
Total expenses 491,208
Net investment loss (375,425)
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 5,619,234
Written options (93,207)
Futures contracts (295,804)
Net change in unrealized
appreciation/depreciation of:
Investments 410,505
Futures contracts (2,950)
Written options (4,534)
Net gain on investment transactions 5,633,244
Net Increase in Net Assets from
Operations $ 5,257,819
See notes to financial statements.
10 o Alliance All-Market Advantage Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
March 31, Year Ended
2004 September 30,
(unaudited) 2003
----------- -------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss $ (375,425) $(791,648)
Net realized gain (loss) on investment
transactions 5,230,223 (318,374)
Net change in unrealized
appreciation/depreciation
of investments 403,021 6,036,068
Net increase in net assets
from operations 5,257,819 4,926,046
Distributions to Shareholders from
Net realized gain on investments (2,562,586) -0-
Tax return of capital -0- (4,808,587)
Common Stock Transactions
Reinvestment of dividends
resulting in
issuance of common stock 152,347 145,611
Total increase 2,847,580 263,070
Net Assets
Beginning of period 49,797,456 49,534,386
End of period (including accumulated
net investment loss of ($375,425)
and $0, respectively) $52,645,036 $49,797,456
See notes to financial statements.
Alliance All-Market Advantage Fund o 11
NOTES TO FINANCIAL STATEMENTS
March 31, 2004 (unaudited)
NOTE A
Significant Accounting Policies
Alliance All-Market Advantage Fund, Inc. (the "Fund") was incorporated under
the laws of the state of Maryland on August 16, 1994 and is registered under
the Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. The financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
require management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. Security Valuation
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 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
12 o Alliance All-Market Advantage Fund
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.The Fund fair values a
security that it holds when a significant event (e.g., an earthquake or a major
terrorist attack) occurs after the time that the latest market quotation was
established, and, as a result, such market quotation cannot be said to
represent the current market value of the security as of the time the Fund
prices its shares. Fair valuing securities is imprecise, and there is no
assurance that the Fund could dispose of the security at the price used for
determining the Fund's net asset value.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Dividend income (or expense on securities sold short) is recorded on the
ex-dividend date. Investment transactions are accounted for on the date
securities are purchased or sold. Investment gains and losses are determined on
the identified cost basis.
4. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income 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.
The Fund distributes to its shareholders an amount equal to 2.5% of the Fund's
total net assets at the beginning of each of the first three quarters of the
calendar year. With respect to the fourth quarter, an amount equal to at least
2.5% of the total net assets is distributed to shareholders. If these
distributions exceed the Fund's aggregate net investment income and net
realized capital gains with respect to a given year, the difference will
generally constitute a return of capital to shareholders.
Alliance All-Market Advantage Fund o 13
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an Investment Advisory Agreement, the Fund pays the Adviser
a monthly fee at an annualized rate of 1.25% of the Fund's average weekly net
assets (the "Basic Fee") and an adjustment to the Basic Fee of plus or minus
..55% based upon the investment performance of the Fund in relation to the
investment record of the Russell 1000 Growth Index. Prior to August 1, 2001,
the monthly Basic Fee was determined at an annualized rate of 1.50% of the
Fund's average weekly net assets and an adjustment to the Basic Fee of plus or
minus .30%. Under the terms of the Investment Advisory Agreement, the
performance period for calculation of adjustments to the Basic Fee is a rolling
36-month period ending with the most recent calendar month. During the six
months ended March 31, 2004, the fee as adjusted, amounted to .89% of the
Fund's average net assets.
The Fund paid Alliance Capital Management L.P. (the "Administrator") $61,585
for the six months ended March 31, 2004 pursuant to the Administration
Agreement. Prior to August 1, 2001, the Administrator was paid a monthly fee at
an annual rate of .25 of 1% of the Fund's weekly average net assets. Commencing
August 1, 2001 the monthly administration fee has been eliminated and the
Administrator is now reimbursed at cost for the provision of administrative
services under the Administration Agreement.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global
Investor Services, Inc. (AGIS), a wholly-owned subsidiary of the Adviser, the
Fund reimburses AGIS for costs relating to servicing phone inquiries on behalf
of the Fund. There was no reimbursement paid by the Fund during the six months
ended March 31, 2004.
Under the terms of a Shareholder Servicing Agreement, the Fund pays its
Shareholder Servicing Agent, UBS PaineWebber Inc. a quarterly fee equal to the
annualized rate of .10 of 1% of the Fund's average weekly net assets.
Brokerage commissions paid on investment transactions for the six months ended
March 31, 2004 amounted to $311,532, of which $2,115 was paid to Sanford C.
Bernstein & Co. LLC, an affiliate of the Adviser.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended March 31, 2004, were as follows:
Purchases Sales
--------- -----
Investment securities (excluding
U.S. government securities) $ 78,842,352 $ 71,319,967
U.S. government securities -0- -0-
14 o Alliance All-Market Advantage Fund
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 futures) are as
follows:
Gross unrealized appreciation $8,250,994
Gross unrealized depreciation (688,967)
Net unrealized appreciation $7,562,027
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments and the imperfect correlation between movements in the
price of the futures contracts and movements in the price of the securities
hedged or used for cover.
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is affected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the time it was closed.
2. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. securities that are traded on U.S. 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.
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 commis-
Alliance All-Market Advantage Fund o 15
sions, 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 written call option is exercised, the premium received is added to the
proceeds from the sale of the underlying security in determining whether the
Fund has realized a gain or loss. If a written put option is exercised, the
premium received reduces the cost basis of the security purchased by the Fund.
In writing an option, the Fund bears the market risk of an unfavorable change
in the price of the security underlying the written option. Exercise of an
option written by the Fund could result in the Fund selling or buying a
security at a price different from the current market value.
Transactions in written options for the six months ended March 31, 2004 were as
follows:
Number of Premiums
Contracts Received
--------- ----------
Options outstanding at
September 30, 2003 88 $ 30,774
Options written 487 431,427
Options exercised (156) (34,084)
Options terminated in closing purchase
transactions (369) (417,066)
Options expired (50) (11,051)
Options outstanding at
March 31, 2004 -0- $ -0-
3. Securities Sold Short
The Fund may sell securities short. A short sale is a transaction in which the
Fund sells securities it does not own, but has borrowed, in anticipation of a
decline in the market price of the securities. The Fund is obligated to replace
the borrowed securities at their market price at the time of replacement. The
Fund's obligation to replace the securities borrowed in connection with a short
sale will be fully secured by collateral deposited with the broker. In
addition, the Fund will consider the short sale to be a borrowing by the Fund
that is subject to the asset coverage requirements of the 1940 Act. Short sales
by the Fund involve certain risks and special considerations. Possible losses
from short sales differ from losses that could be incurred from a purchase of a
security because losses from short sales may be unlimited, whereas losses from
purchases can not exceed the total amount invested.
NOTE D
Capital Stock
There are 300,000,000 shares of $.01 par value common stock authorized, of
which 3,648,952 shares were outstanding at March 31, 2004. During the six
months ended March 31, 2004 and the year ended September 30, 2003, the Fund
issued 10,427 shares and 10,703 shares respectively, in connection with the
Fund's dividend reinvestment plan.
16 o Alliance All-Market Advantage Fund
NOTE E
Distributions to Shareholders
The tax character of distributions to be paid for the year ending September 30,
2004 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended September 30,
2003, and September 30, 2002 were as follows:
2003 2002
------------ -------------
Distributions paid from:
Ordinary income $ -0- $ -0-
Net long-term capital gains -0- -0-
Total taxable distributions -0- -0-
Tax return of capital 4,808,587 7,068,183
Total distributions paid $ 4,808,587 $ 7,068,183
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (24,041,400)(a)
Unrealized appreciation/(depreciation) 5,950,496(b)
Total accumulated earnings/(deficit) $ (18,090,904)
(a) On September 30, 2003, the Fund had a net capital loss carryforward of
$23,012,301 of which $11,541,945 expires in the year 2010 and $11,470,356
expires in 2011. 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 September 30, 2003, the Fund deferred to
October 1, 2003, post October capital losses of $1,029,099. Future realized
gains offset by the loss carryforwards are not required to be distributed to
shareholders. However, under the Fund's distribution policy, such gains may be
distributed to shareholders in the year the gains are realized. Any such gains
distributed may be taxable to shareholders.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and losses on options.
NOTE F
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. The shares of the Fund are not redeemable by the
Fund, but are traded on an exchange at prices established by the market.
Accordingly, the Fund and its shareholders are not subject to the market timing
and late trading practices that are the subject of the investigations mentioned
above or the law-
Alliance All-Market Advantage Fund o 17
suits described below. Please see below for a description of the agreements
reached by Alliance Capital and the SEC and NYAG in connection with the
investigations mentioned above.
In addition, numerous lawsuits have been filed against Alliance Capital and
certain other defendants in which plaintiffs make claims purportedly based on
or related to the same practices that are the subject of the SEC and NYAG
investigations referred to above. Some of these lawsuits name the Fund as a
party. Management of the Fund's Adviser believes that these private lawsuits
are not likely to have a material adverse effect on the results of operations
or financial condition of the Fund.
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;
(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; 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.
The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
shareholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the agreements mentioned above.
18 o Alliance All-Market Advantage Fund
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Six Months
Ended
March 31, Year Ended September 30,
2004 ------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
--------------------------------------------------------------------------
Net asset value,
beginning of period $13.69 $13.65 $19.68 $42.58 $42.13 $32.52
Income From Investment
Operations
Net investment loss (.10)(a) (.22)(a) (.26)(a) (.42)(a) (.90) (.84)(a)
Net realized and unrealized
gain (loss) on investment
transactions 1.54 1.58 (3.82) (15.36) 8.79 17.26
Net increase (decrease) in net
asset value from operations 1.44 1.36 (4.08) (15.78) 7.89 16.42
Less: Distributions
Distributions from net realized
gain on investments (.70) ? 0? ? 0? (3.52) (7.44) (4.26)
Tax return of capital ? 0? (1.32) (1.95) (1.51) ? 0? ? 0?
Distribution in excess of net
realized gain on investments ? 0? ? 0? ? 0? (2.09) ? 0? ? 0?
Total distributions (.70) (1.32) (1.95) (7.12) (7.44) (4.26)
Capital Share Transactions
Dilutive effect of rights offering ? 0? ? 0? ? 0? ? 0? ? 0? (2.41)
Offering costs charged to
additional paid-in capital ? 0? ? 0? ? 0? ? 0? ? 0? (.14)
Total capital share transactions ? 0? ? 0? ? 0? ? 0? ? 0? (2.55)
Net asset value, end of period $14.43 $13.69 $13.65 $19.68 $42.58 $42.13
Market value, end of period $15.75 $14.30 $13.45 $19.90 $41.063 $38.688
Premium/(Discount) 9.15% 4.46% (1.47)% 1.12% (3.56)% (8.17)%
Total Return
Total investment return
based on:(b)
Market value 15.25% 16.93% (24.59)% (38.96)% 26.32% 15.45%
Net asset value 10.52% 10.42% (22.64)% (41.76)% 20.17% 42.20%
Ratios/Supplemental Data
Net assets, end of period
(000?s omitted) $52,645 $49,797 $49,534 $71,180 $152,115 $150,519
Ratio to average net assets of:
Expenses 1.85%(c) 2.28% 2.06% 2.45% 2.24% 2.39%
Expenses, excluding interest
expense 1.85%(c) 2.28% 2.06% 2.45% 2.23%(d) 2.39%(d)
Net investment loss (1.41)%(c) (1.58)% (1.38)% (1.47)% (1.91)% (1.97)%
Portfolio turnover rate 171% 294% 215% 311% 157% 110%
See footnote summary on page 20.
Alliance All-Market Advantage Fund o 19
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund?s dividend reinvestment plan. Generally, total investment return based on
net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or a decrease in
the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on the net
asset value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return calculated for a period of less than one
year is not annualized.
(c) Annualized.
(d) Net of interest expense on short sales as follows: (see Note C)
Year Ended September 30,
---------------------------------
2000 1999
---------------------------------
.004% .003%
20 o Alliance All-Market Advantage Fund
ADDITIONAL INFORMATION
(unaudited)
Supplemental Proxy Information
The Annual meeting of Stockholders of the Alliance All-Market Advantage Fund,
Inc. was held on March 25, 2004.
A description of each proposal and number of shares voted at the meeting are as
follows:
Abstain/
Authority
Voted for Withheld
- -------------------------------------------------------------------------------
1. To elect Class One directors:
(term expires in 2007)
David H. Dievler 3,445,304 125,972
Clifford L. Michel 3,450,425 120,851
Donald J. Robinson 3,445,453 125,823
2. To elect a Class Three director:
(term expires in 2006) Marc O. Mayer 3,453,475 117,801
Alliance All-Market Advantage Fund o 21
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Thomas J. Bardong, Vice President
Thomas Kamp, Vice President
John A. Koltes, Vice President
Daniel Nordby, Vice President
Michael J. Reilly(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Administrator
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
Dividend Paying Agent, Transfer Agent and Registrar
The Bank of New York
101 Barclay Street
New York, NY 10286
Independent Auditors
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036-2798
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
(1) Member of the Audit Committee.
(2) Mr. Reilly is the person primarily responsible for the day-to-day
management of the Fund?s investment portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of Alliance All-Market Advantage Fund for their information. The
financial information included herein is taken from the records of the Fund.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report.
22 o Alliance All-Market Advantage Fund
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 Funds
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 Research Growth 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
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.
Alliance All-Market Advantage Fund o 23
SUMMARY OF GENERAL INFORMATION
Shareholder Information
Daily market prices for the Fund?s shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
?AllncAll?. The Fund also distributes its daily net asset value to various
financial publications or independent organizations such as Lipper Analytical
Services, Inc., Morningstar, Inc. and Bloomberg. Daily market prices for the
Fund?s shares are published in the New York Stock Exchange Composite
Transaction section of newspapers each day. The Fund?s NYSE trading symbol is
?AMO?. Weekly comparative net asset value (NAV) and market price information
about the Fund is published each Monday in The Wall Street Journal, each Sunday
in The New York Times and each Saturday in Barron?s, as well as other
newspapers in a table called ?Closed-End Funds.?
Dividend Reinvestment Plan
All shareholders whose shares are registered in their own names will have all
distributions reinvested automatically in additional shares, unless a
shareholder elects to receive cash.
Shareholders whose shares are held in the name of a broker or nominee will
automatically have distributions reinvested by the broker or nominee in
additional shares under the Plan, unless the automatic reinvestment service is
not provided by the particular broker or nominee or the Shareholder elects to
receive distributions in cash.
The Plan provides you with a convenient way to reinvest your dividends and
capital gains in additional shares of the Fund, thereby enabling you to
compound your returns from the Fund.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call The Bank of
New York at (800) 432-8224.
24 o Alliance All-Market Advantage Fund
ALLIANCE ALL-MARKET ADVANTAGE 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.
AMASR0304
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 when filing a Semi-Annual report to shareholders.
ITEM 6. SCHEDULE OF INVESTMENTS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule
14A in its proxy statement filed with the Commission on February 23, 2004.
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): Alliance All-Market Advantage Fund, Inc.
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 7, 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: June 7, 2004
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 7, 2004