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: 811-02383
AllianceBernstein Bond 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: October 31, 2004
Date of reporting period: April 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
- -------------------------------------------------------------------------------
Investment Grade Fixed Income
- -------------------------------------------------------------------------------
[LOGO] AllianceBernstein(SM)
Investment Research and Management
AllianceBernstein Bond Fund Quality Bond Portfolio
Semi-Annual Report -- April 30, 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 your 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 performance information current to the most recent month-end by
visiting 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.
June 15, 2004
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Bond Fund Quality Bond Portfolio (the "Portfolio") for the
semi-annual reporting period ended April 30, 2004.
Investment Objective and Policies
This open-end fund seeks high current income consistent with preservation of
capital by investing in investment-grade fixed-income securities. Under normal
circumstances, at least 80% of the Portfolio's net assets will be invested in
bonds and other debt securities. The Portfolio invests in readily marketable
securities that do not involve undue risk of capital.
Investment Results
The following table shows the performance of the Portfolio and its benchmark,
the Lehman Brothers U.S. Aggregate Index (the "LB Index"), which is a standard
measure of the performance of a basket of unmanaged debt securities, for the
six- and 12-month periods ended April 30, 2004.
INVESTMENT RESULTS*
Periods Ended April 30, 2004
---------------------------------
Returns
---------------------------------
6 Months 12 Months
-------------- --------------
AllianceBernstein
Bond Fund Quality
Bond Portfolio
Class A 1.17% 1.28%
- ------------------------------------------------------------
Class B 0.82% 0.57%
- ------------------------------------------------------------
Class C 0.82% 0.57%
- ------------------------------------------------------------
Lehman Brothers
U.S. Aggregate Index 1.25% 1.82%
- ------------------------------------------------------------
* The Portfolio's investment results are for the periods shown and are based
on the net asset value (NAV) of each class of shares as of April 30, 2004.
Performance assumes reinvestment of distributions and does not account for
taxes. All fees and expenses related to the operation of the Portfolio 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 and Class R
shares will vary due to different expenses associated with these classes.
During the reporting period, the Advisor waived a portion of its advisory fee
or reimbursed the Portfolio for a portion of its expenses to the extent
necessary to limit the Portfolio's expenses to 0.98% for Class A, 1.68% for
Class B, 1.68% for Class C, 1.18% for Class R and 0.68% for Advisor Class. This
waiver extends through the Portfolio's current fiscal year and may be extended
by the Advisor for additional one-year terms. Without the waiver, the
Portfolio'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.
The unmanaged Lehman Brothers U.S. Aggregate Index (the "LB Index") does not
reflect fees and expenses associated with the active management of a mutual
fund portfolio. The Index covers the U.S. investment-grade fixed-rate bond
market, including government and credit securities, agency mortgage
pass-through securities, asset-backed securities and commercial mortgage-backed
securities. An investor cannot invest directly in an index, and its results are
not indicative of the performance for any specific investment, including
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 1
AllianceBernstein Bond Fund Quality Bond Portfolio.
Additional investment results appear on pages 4-6.
For both the six- and 12-month periods ended April 30, 2004, the Portfolio
underperformed its benchmark, the LB Index. For the semi-annual reporting
period, the Portfolio's yield curve positioning was the primary detractor from
relative performance versus the benchmark. The yield curve slope flattened from
historically steep levels, thus dampening performance as the Portfolio's yield
curve exposure was set for steepening.
The Portfolio's overweighted position in investment-grade corporates,
particularly our focus on BBB-rated securities, contributed positively to
performance. The Portfolio's underweighted position in U.S. government
securities, in addition to mortgage coupon selection, also proved to be
advantageous.
Market Review and Investment Strategy
Bond market returns were mixed for the latter part of 2003, but rallied in the
first quarter of 2004. Heightened geopolitical risk and strong foreign demand
for U.S. securities led to falling interest rates and solid bond market returns
for the six-month period ended April 30, 2004. As represented by the LB Index,
the best performing sectors were investment-grade corporates at 1.59%,
asset-backed securities at 1.54% and mortgage-backed securities at 1.39%.
Within the investment-grade corporate sector, BBB-rated securities
outperformed, returning 2.23% as compared to AAA-rated at 0.89%, AA-rated at
1.01% and A-rated at 1.23%. U.S. Treasuries and Agencies were the
worst-performing sectors, returning 0.85% and 1.00%, respectively.
Within the investment-grade corporate sector, the Portfolio held overweighted
positions in crossover and lower-rated BBB issuers that we believed were
undervalued and would benefit most from an improving economy. We also
overweighted the Portfolio's holdings in the automotive and cable/media sectors
based on value. As spread dispersion among industries narrowed during the
reporting period, our strategy turned toward specific issuer selection and to
diversification of holdings across industry sectors.
We continued to remain underweighted in U.S. government bonds due to
accelerating economic growth. We took advantage of attractive valuations to add
exposure to the 15-year sector late in the period as rising rates drove spreads
wider in the mortgage sector. Finally, in anticipation of possible tightening
of monetary policy over the course of the next few months, we have begun to
modestly barbell the Portfolio's duration structure. Generally, a barbell
portfolio consists primarily of very short-term bonds and very long-term bonds,
with few intermediate-term bonds.
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Portfolio Summary
- -------------------------------------------------------------------------------
PORTFOLIO SUMMARY
April 30, 2004 (unaudited)
INCEPTION DATES
Class A Shares
7/1/99
Class B Shares
7/1/99
Class C Shares
7/1/99
PORTFOLIO STATISTICS
Net Assets ($mil): $444.0
SECURITY TYPE BREAKDOWN*
22.0% Corporate Debt Obligations
18.6% Federal National Mortgage Association
18.4% Treasury
5.4% Federal Home Loan Mortgage Corporation [PIE CHART OMITTED]
4.4% Government National Mortgage Association
2.1% Commerical Mortgage Backed Securities
0.8% Sovereign Debt Securities
0.2% Collateralized Mortgage Obligations
28.1% Short-Term
* The Portfolio's security type breakdown is expressed as a percentage of
total investments (excluding security lending collateral) and may vary over
time.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 3
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 1.28% -3.05%
Since Inception* 6.25% 5.31%
SEC Yield** 3.25%
CLASS A SHARE SEC AVERAGE ANNUAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 2004)
- -------------------------------------------------------------------------------
SEC Returns
1 Year 0.47%
Since Inception* 5.96%
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. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your 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 Portfolio carefully before investing. For a free
copy of the Portfolio'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.
A Word About Risk: The Portfolio normally invests all of its assets in
securities that are rated at least BBB by Standard & Poor's or, if unrated, are
of comparable quality. The Portfolio may also invest in convertible debt
securities, preferred stock and dividend-paying stocks, U.S. government
obligations and foreign fixed-income securities. The Portfolio may also invest
a portion of its assets in foreign securities, which may magnify fluctuations.
Price fluctuations may also be caused by changes in interest rates or bond
credit quality ratings. These changes have a greater effect on bonds with
longer maturities than on those with shorter maturities. While the Portfolio
invests principally in bonds and other fixed-income securities, the Portfolio
may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from,
and in certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the prospectus.
* Inception Date: 7/1/99.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2004.
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 0.57% -2.30%
Since Inception* 5.50% 5.50%
SEC Yield** 2.69%
CLASS B SHARE SEC AVERAGE ANNUAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 2004)
- -------------------------------------------------------------------------------
SEC Returns
1 Year 1.20%
Since Inception* 6.16%
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. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your 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 Portfolio carefully before investing. For a free
copy of the Portfolio'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.
A Word About Risk: The Portfolio normally invests all of its assets in
securities that are rated at least BBB by Standard & Poor's or, if unrated, are
of comparable quality. The Portfolio may also invest in convertible debt
securities, preferred stock and dividend-paying stocks, U.S. government
obligations and foreign fixed-income securities. The Portfolio may also invest
a portion of its assets in foreign securities, which may magnify fluctuations.
Price fluctuations may also be caused by changes in interest rates or bond
credit quality ratings. These changes have a greater effect on bonds with
longer maturities than on those with shorter maturities. While the Portfolio
invests principally in bonds and other fixed-income securities, the Portfolio
may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from,
and in certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the prospectus.
* Inception Date: 7/1/99.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2004.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 5
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 0.57% -0.38%
Since Inception* 5.47% 5.47%
SEC Yield** 2.70%
CLASS C SHARE SEC AVERAGE ANNUAL RETURNS
AS OF THE MOST RECENT QUARTER-END (MARCH 31, 2004)
- -------------------------------------------------------------------------------
SEC Returns
1 Year 3.19%
Since Inception* 6.13%
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. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your 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 Portfolio carefully before investing. For a free
copy of the Portfolio'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.
A Word About Risk: The Portfolio normally invests all of its assets in
securities that are rated at least BBB by Standard & Poor's or, if unrated, are
of comparable quality. The Portfolio may also invest in convertible debt
securities, preferred stock and dividend-paying stocks, U.S. government
obligations and foreign fixed-income securities. The Portfolio may also invest
a portion of its assets in foreign securities, which may magnify fluctuations.
Price fluctuations may also be caused by changes in interest rates or bond
credit quality ratings. These changes have a greater effect on bonds with
longer maturities than on those with shorter maturities. While the Portfolio
invests principally in bonds and other fixed-income securities, the Portfolio
may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from,
and in certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the prospectus.
* Inception Date: 7/1/99.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2004.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Portfolio of Investments
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
April 30, 2004 (unaudited)
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
MORTGAGE BACKED SECURITIES-37.2%
Federal National Mortgage Association-24.4%
2.50%, 6/15/06 $ 2,925 $ 2,919,363
4.125%, 4/15/14 1,810 1,687,083
4.50%, TBA 23,520 22,821,491
5.00%, TBA 40,185 39,377,078
5.00%, 4/25/14 3,645 3,741,811
5.50%, TBA 15,275 15,665,304
5.50%, 8/01/33-9/01/33 849 847,941
6.50%, TBA 4,175 4,345,916
6.50%, 1/01/28-10/01/33 14,752 15,368,281
7.50%, 10/01/29-5/01/32 1,397 1,494,851
-------------
108,269,119
-------------
Federal Home Loan Mortgage Corp.-7.1%
5.50%, TBA 24,665 24,634,169
6.00%, TBA 6,510 6,660,544
-------------
31,294,713
-------------
Government National Mortgage
Association-5.7%
5.00%, TBA 3,905 3,795,172
5.50%, TBA 10,675 10,678,330
6.00%, 12/15/33 4,045 4,151,211
6.50%, TBA 6,395 6,680,780
-------------
25,305,493
-------------
Total Mortgage Backed Securities
(cost $166,570,059) 164,869,325
-------------
U.S. TREASURY SECURITIES-24.0%
U.S. Treasury Notes-18.7%
1.625%, 2/28/06 * 42,245 41,809,370
2.00%, 8/31/05 35,370 35,450,148
2.625%, 3/15/09 5 4,787
3.125%, 4/15/09 * 2,890 2,827,348
4.00%, 2/15/14 2,960 2,844,376
-------------
82,936,029
-------------
U.S. Treasury Bonds-5.3%
5.375%, 2/15/31 950 962,766
7.875%, 2/15/21 * 2,830 3,676,128
8.75%, 5/15/17 * 3,930 5,374,585
10.75%, 8/15/05 * 10,900 12,131,787
11.25%, 2/15/15 * 1,000 1,559,805
-------------
23,705,071
-------------
Total U.S. Treasury Securities
(cost $107,769,408) 106,641,100
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 7
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS-28.7%
Aerospace & Defense-0.1%
Boeing Capital Corp.
4.75%, 8/25/08 $ 365 $ 374,681
-------------
Automotive-2.5%
DaimlerChrysler NA Holdings
4.75%, 1/15/08 190 192,912
Ford Motor Co.
7.45%, 7/16/31 * 1,485 1,451,797
Ford Motor Credit Co.
7.00%, 10/01/13 * 1,750 1,802,841
7.375%, 10/28/09-2/01/11 3,400 3,647,469
General Motors Acceptance Corp.
6.875%, 9/15/11 1,960 2,060,205
8.00%, 11/01/31 390 412,795
General Motors Corp.
8.375%, 7/15/33 1,510 1,637,772
-------------
11,205,791
-------------
Banking-4.4%
Bank of America Corp.
6.25%, 4/15/12 305 332,157
Barclays Bank Plc pfd. (United Kingdom)
8.55%, 6/15/11 (a) 905 1,095,521
Capital One Bank
6.50%, 6/13/13 630 658,228
CBA Capital Trust I pfd.
5.805%, 6/30/15 (a) 1,185 1,190,690
Citigroup, Inc.
7.25%, 10/01/10 745 852,000
GreenPoint Financial Corp.
3.20%, 6/06/08 1,115 1,076,296
ING Capital Funding Trust III pfd.
8.439%, 12/31/10 960 1,143,060
J.P. Morgan Chase & Co.
6.75%, 2/01/11 1,470 1,644,407
M&T Bank Corp.
3.85%, 4/01/13 525 514,928
MBNA America Bank
6.50%, 6/20/06 985 1,056,092
Mizuho Financial Group (Cayman Islands)
5.79%, 4/15/14 (a) 1,875 1,862,764
8.375%, 12/29/49 965 1,017,940
RBS Capital Trust I pfd.
4.709%, 7/01/13 * 2,850 2,694,054
U.S. Bank NA
6.375%, 8/01/11 40 44,019
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
UFJ Finance Aruba AEC (Aruba)
6.75%, 7/15/13 $ 890 $ 941,376
Unicredito Italiano Capital Trust pfd.
9.20%, 7/15/13 (a) 1,510 1,846,008
US Bank NA
2.85%, 11/15/06 1,320 1,328,346
-------------
19,297,886
-------------
Broadcasting/Media-1.3%
AOL Time Warner, Inc.
7.70%, 5/01/32 1,145 1,269,034
Liberty Media Corp.
5.70%, 5/15/13 * 1,100 1,101,822
News America, Inc.
6.55%, 3/15/33 * 1,070 1,090,185
Time Warner Entertainment Co. LP
8.375%, 3/15/23 * 1,990 2,346,783
-------------
5,807,824
-------------
Building/Real Estate-0.7%
Eop Operating LP
4.75%, 3/15/14 1,210 1,130,683
ERP Operating LP
5.20%, 4/01/13 470 467,628
Vornado Realty LP
4.75%, 12/01/10 790 777,187
Vornado Realty Trust
5.625%, 6/15/07 835 892,096
-------------
3,267,594
-------------
Cable-1.3%
AT&T Broadband Corp.
9.455%, 11/15/22 655 853,487
Comcast Cable Communications, Inc.
6.20%, 11/15/08 * 2,955 3,177,565
Comcast Corp.
7.05%, 3/15/33 465 490,726
Lenfest Communications, Inc.
8.375%, 11/01/05 1,005 1,088,989
-------------
5,610,767
-------------
Communications-2.6%
British Telecommunications Plc (United Kingdom)
8.875%, 12/15/30 1,735 2,201,274
Koninklijke (Royal) KPN NV (Netherlands)
8.00%, 10/01/10 555 650,005
Sprint Capital Corp.
7.625%, 1/30/11 1,090 1,230,814
8.75%, 3/15/32 2,045 2,449,902
Telecom Italia Capital (Italy)
6.375%, 11/15/33 (a) 2,235 2,199,325
Verizon Global Funding Corp.
7.375%, 9/01/12 * 2,485 2,846,836
-------------
11,578,156
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 9
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Communications - Mobile-0.9%
America Movil SA de CV
5.50%, 3/01/14 (a) $ 510 $ 478,480
AT&T Wireless Services, Inc.
8.75%, 3/01/31 1,210 1,480,417
Telus Corp. (Canada)
7.50%, 6/01/07 990 1,094,747
Verizon Wireless Capital LLC
5.375%, 12/15/06 1,045 1,103,373
-------------
4,157,017
-------------
Conglomerate/Miscellaneous-0.5%
Hutchison Whampoa International, Ltd
(Cayman Islands)
7.45%, 11/24/33 (a) 2,195 2,119,112
-------------
Consumer Manufacturing-0.1%
Fortune Brands, Inc.
2.875%, 12/01/06 510 509,113
-------------
Energy-0.9%
Amerada Hess Corp.
7.875%, 10/01/29 850 923,217
Conoco Funding Co.
5.45%, 10/15/06 695 739,663
Conoco, Inc.
6.95%, 4/15/29 855 943,380
Valero Energy Corp.
7.50%, 4/15/32 1,150 1,296,433
-------------
3,902,693
-------------
Financial-3.6%
American General Finance Corp.
3.00%, 11/15/06 980 975,778
4.50%, 11/15/07 650 670,031
Capital One Financial Corp.
6.25%, 11/15/13 365 373,949
CIT Group, Inc.
4.125%, 2/21/06 1,635 1,677,083
5.50%, 11/30/07 510 539,308
Countrywide Home Loans, Inc.
4.00%, 3/22/11 1,135 1,072,822
4.25%, 12/19/07 1,090 1,108,827
Credit Suisse First Boston
5.50%, 8/15/13 780 789,227
General Electric Capital Corp.
6.75%, 3/15/32 2,310 2,495,073
Goldman Sachs Capital Trust I
6.345%, 2/15/34 920 882,229
Household Finance Corp.
6.50%, 11/15/08 1,505 1,654,562
7.00%, 5/15/12 595 667,666
John Deere Capital Corp.
4.50%, 8/22/07 690 712,609
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
MBNA Corp.
4.625%, 9/15/08 $ 915 $ 924,309
Royal & Sun Alliance Insurance Group plc
(United Kingdom)
8.95%, 10/15/29 795 880,707
The Goldman Sachs Group, Inc.
4.75%, 7/15/13 685 652,819
-------------
16,076,999
-------------
Food/Beverages-1.1%
Diageo Finance BV (Netherlands)
3.00%, 12/15/06 800 799,377
Kraft Foods, Inc.
5.25%, 10/01/13 1,050 1,042,646
Pepsi Bottling Group, Inc.
7.00%, 3/01/29 1,950 2,182,165
Tyson Foods, Inc.
8.25%, 10/01/11 590 687,508
-------------
4,711,696
-------------
Health Care-0.9%
Bristol-Myers Squibb Co.
4.75%, 10/01/06 515 536,908
HCA, Inc.
6.75%, 7/15/13 525 540,680
7.125%, 6/01/06 855 909,556
Health Net, Inc.
8.375%, 4/15/11 520 614,682
Humana, Inc.
6.30%, 8/01/18 635 647,198
UnitedHealth Group, Inc.
3.30%, 1/30/08 830 820,696
-------------
4,069,720
-------------
Industrial-0.4%
General Electric Co.
5.00%, 2/01/13 1,810 1,802,769
-------------
Insurance-1.4%
Anthem, Inc.
6.80%, 8/01/12 585 652,390
Assurant, Inc.
5.625%, 2/15/14 (a) 660 662,745
Mangrove Bay Pass-Through Trust pfd.
6.102%, 7/15/33 (a) 1,010 1,006,427
MetLife, Inc.
5.00%, 11/24/13 740 730,077
Safeco Capital Trust I
8.072%, 7/15/37 1,180 1,307,921
Zurich Capital Trust I
8.376%, 6/01/37 (a) 1,715 1,925,928
-------------
6,285,488
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 11
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Paper/Packaging-0.7%
International Paper Co.
5.30%, 4/01/15 $ 900 $ 868,530
Weyerhaeuser Co.
7.375%, 3/15/32 2,010 2,208,839
-------------
3,077,369
-------------
Petroleum Products-0.2%
Amerada Hess Corp.
7.125%, 3/15/33 835 837,955
-------------
Public Utilities-Electric & Gas-2.9%
Carolina Power & Light Co.
6.50%, 7/15/12 1,005 1,098,466
CenterPoint Energy Resources Corp.
6.50%, 2/01/08 825 879,405
Cincinnati Gas & Electric Co.
5.70%, 9/15/12 385 398,524
Dominion Resources, Inc.
5.00%, 3/15/13 690 671,854
Duke Energy Corp.
3.75%, 3/05/08 860 856,352
FirstEnergy Corp.
7.375%, 11/15/31 2,715 2,860,103
KeySpan Corp.
7.25%, 11/15/05 1,430 1,534,110
MidAmerican Energy Holdings Co.
5.875%, 10/01/12 395 408,977
Nisource Finance Corp.
7.875%, 11/15/10 590 687,711
Pacific Gas & Electric Co.
6.05%, 3/01/34 1,105 1,048,487
Public Service Company of Colorado
7.875%, 10/01/12 450 538,265
Xcel Energy, Inc.
7.00%, 12/01/10 650 729,335
Yorkshire Power Finance Ltd
6.496%, 2/25/08 880 914,958
-------------
12,626,547
-------------
Public Utilities - Telephone-0.5%
Sprint Capital Corp.
8.375%, 3/15/12 505 593,570
Telefonos de Mexico SA de CV (Mexico)
4.50%, 11/19/08 (a) 880 866,218
8.25%, 1/26/06 805 872,459
-------------
2,332,247
-------------
Savings and Loan-1.0%
Great Western Financial Trust II
8.206%, 2/01/27 2,090 2,321,415
Washington Mutual Finance Corp.
6.875%, 5/15/11 1,945 2,224,201
-------------
4,545,616
-------------
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Services-0.2%
Waste Management, Inc.
6.875%, 5/15/09 $ 960 $ 1,063,636
-------------
Supermarket/Drug-0.5%
Albertsons, Inc.
7.45%, 8/01/29 1,965 2,134,108
-------------
Total Corporate Debt Obligations
(cost $125,488,789) 127,394,784
-------------
COMMERCIAL MORTGAGE BACKED
SECURITIES-2.7%
Banc America Commercial Mortgage, Inc.
Series 2004-2, Class A2
3.52%, 10/10/38 1,660 1,610,051
Series 2004-1, Class A2
4.037%, 11/10/39 1,495 1,461,093
Greenwich Capital Commercial Funding Corp.
Series 2004-GG1, Class A7
5.317%, 6/10/36 1,490 1,501,175
GS Mortgage Securities Corp. II
Series 2003-C1, Class A2A
3.59%, 1/10/40 2,070 2,053,884
JP Morgan Chase Commercial Mortgage Security
Series 2004-C1, Class A2
4.302%, 1/15/38 1,700 1,649,578
LB UBS Commercial Mortgage Trust
Series 2003-C5, Class A2
3.478%, 7/15/27 2,070 2,029,863
Morgan Stanley Capital I
Series 2004-T13, Class A2
3.94%, 9/13/45 1,900 1,848,320
-------------
Total Commercial Mortgage Backed Securities
(cost $12,414,621) 12,153,964
-------------
SOVEREIGN DEBT SECURITIES-1.1%
United Mexican States
4.625%, 10/08/08 2,540 2,540,000
7.50%, 1/14/12 2,075 2,266,938
-------------
Total Sovereign Debt Securities
(cost $4,741,165) 4,806,938
-------------
COLLATERALIZED MORTGAGE
OBLIGATIONS-0.3%
Countrywide Home Loans
Series 2003-49, Class A1
1.6418%, 12/19/33
(cost $1,090,214) 1,091 1,090,876
-------------
SHORT-TERM INVESTMENTS-36.7%
U.S. Treasury Bill-25.7%
zero coupon, 6/24/04 * 114,320 114,168,081
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 13
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Time Deposit-11.0%
State Street Euro Dollar
0.50%, 5/3/04 $ 48,734 $ 48,734,000
-------------
Total Short-Term Investments
(cost $162,902,082) 162,902,081
-------------
Total Investments Before Security Lending
Collateral-130.7%
(cost $582,603,272) 579,859,068
-------------
INVESTMENT OF CASH COLLATERAL FOR
SECURITIES LOANED**-37.5%
Short-Term Investment
Bank of America
1.22%, 7/15/04 5,990 6,285,144
CMSERA
1.04%, 5/7/04 30,000 29,980,933
Federal Home Loan Bank
1.27%-1.35%, 4/26/05-4/29/05 17,500 17,500,000
Goldman Sachs & Co.
1.11%, 10/20/04 25,000 25,000,000
Gotham Funding
1.06%, 5/3/04-5/19/04 72,385 72,344,322
Sigma Finance
1.219%, 12/03/04 5,000 5,000,000
Shares
==============
UBS Private Money Market Fund, LLC
1.10% 10,513,332 10,513,332
-------------
Total Investment of Cash Collateral
for Securities Loaned
(cost $166,623,731) 166,623,731
-------------
Total Investments-168.2%
(cost $747,600,069) 746,482,799
Other assets less liabilities-(68.2%) (302,583,285)
-------------
Net Assets-100% $ 443,899,514
=============
* Represents entire or partial securities out on loan.
** See Note E for security lending information.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30, 2004,
the aggregate market value of these securities amounted to $15,253,219 or 3.4%
of net assets.
Glossary:
TBA-(To Be Assigned)-Securities are purchased on a forward commitment with an
appropriate principal amount (generally +/-1.0%) and no definite maturity date.
The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
See notes to financial statements.
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
April 30, 2004 (unaudited)
ASSETS
Investments in securities, at value
(cost $747,600,069--including investment of cash
collateral for securities loaned of $166,623,731) $ 746,482,799(a)
Cash 5,538
Receivable for investment securities sold 12,165,888
Interest receivable 3,278,854
Receivable for capital stock sold 22,707
-------------
Total assets 761,955,786
-------------
LIABILITIES
Payable for collateral on securities loaned 166,623,731
Payable for investment securities purchased 150,125,057
Dividends payable 553,633
Payable for capital stock redeemed 196,620
Distribution fee payable 104,385
Advisory fee payable 103,944
Accrued expenses 348,902
-------------
Total liabilities 318,056,272
-------------
Net Assets $ 443,899,514
=============
COMPOSITION OF NET ASSETS
Capital stock, at par $43,235
Additional paid-in capital 449,459,622
Distributions in excess of net investment income (2,971,351)
Accumulated net realized loss on investment transactions (1,514,722)
Net unrealized depreciation of investments (1,117,270)
-------------
$ 443,899,514
=============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share
($59,217,158 / 5,765,157 shares of capital stock
issued and outstanding) $10.27
Sales charge--4.25% of public offering price .46
------
Maximum offering price $10.73
======
Class B Shares
Net asset value and offering price per share
($77,966,342 / 7,597,443 shares of capital stock
issued and outstanding) $10.26
======
Class C Shares
Net asset value and offering price per share
($21,406,805 / 2,089,627 shares of capital stock
issued and outstanding) $10.24
======
Class R Shares
Net asset value and offering price per share
($15,578 / 1,517 shares of capital stock
issued and outstanding) $10.27
======
Advisor Class Shares
Net asset value, redemption and offering price per share
($285,293,631 / 27,781,643 shares of capital stock
issued and outstanding) $10.27
======
(a) Includes securities on loan with a value of $162,214,076 (see Note E).
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 15
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (unaudited)
INVESTMENT INCOME
Interest $ 9,345,319
EXPENSES
Advisory fee $ 1,240,111
Distribution fee--Class A 94,979
Distribution fee--Class B 435,107
Distribution fee--Class C 117,001
Distribution fee--Class R 26
Transfer agency 697,214
Custodian 109,053
Administrative 60,000
Audit and legal 52,133
Printing 49,920
Registration fees 42,643
Directors' fees and expenses 10,000
Miscellaneous 6,733
------------
Total expenses 2,914,920
Less: expenses waived and reimbursed
by the Adviser (see Note B) (734,515)
Less: expense offset arrangement
(see Note B) (64)
------------
Net expenses 2,180,341
------------
Net investment income 7,164,978
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain on
investment transactions 3,134,978
Net change in unrealized
appreciation/depreciation
of investments (4,737,847)
------------
Net loss on investment
transactions (1,602,869)
------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 5,562,109
============
See notes to financial statements.
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended July 1, 2003
April 30, to Year Ended
2004 October 31, June 30,
(unaduited) 2003* 2003
============ ============ ============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 7,164,978 $ 3,911,867 $ 11,975,914
Net realized gain (loss) on
investment transactions 3,134,978 (3,807,440) 14,959,621
Net change in unrealized
appreciation/depreciation
of investments (4,737,847) (6,091,822) 8,812,869
------------ ------------ ------------
Net increase (decrease) in net
assets from operations 5,562,109 (5,987,395) 35,748,404
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (1,152,254) (896,295) (2,559,355)
Class B (1,274,335) (1,015,450) (2,981,723)
Class C (343,128) (239,505) (803,086)
Class R (177) -0- -0-
Advisor Class (5,470,177) (3,303,792) (8,978,394)
Net realized gain on investment
transactions
Class A (1,348,611) -0- -0-
Class B (1,909,068) -0- -0-
Class C (511,130) -0- -0-
Class R (214) -0- -0-
Advisor Class (5,670,270) -0- -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 7,002,216 (1,912,603) 145,535,331
------------ ------------ ------------
Total increase (decrease) (5,115,039) (13,355,040) 165,961,177
NET ASSETS
Beginning of period 449,014,553 462,369,593 296,408,416
------------ ------------ ------------
End of period (including
distributions in excess
of net investment income of
($2,971,351), ($1,896,258)
and ($1,298,018),
respectively) $443,899,514 $449,014,553 $462,369,593
============ ============ ============
* The Portfolio changed its fiscal year end from June 30 to October 31.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 17
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2004 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund, which is a Maryland corporation, operates as a series
company currently comprised of three portfolios: the Corporate Bond Portfolio,
the Quality Bond Portfolio and the U.S. Government Portfolio. Each series is
considered to be a separate entity for financial reporting and tax purposes.
This report relates only to the Quality Bond Portfolio. The Quality Bond
Portfolio (the "Portfolio") offers Class A, Class B, Class C, Class R and
Advisor Class shares. Class A shares are sold with a front-end sales charge of
up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases
of $1,000,000 or more, Class A shares redeemed within one year of purchase may
be subject to a contingent deferred sales charge of 1%. Class B shares are
currently sold with a contingent deferred sales charge which declines from 3%
to zero depending on the period of time the shares are held. Class B shares
will automatically convert to Class A shares six years after the end of the
calendar month of purchase. Class C shares are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
Class R shares are sold without an initial or contingent deferred sales charge
and are offered to certain group retirement plans. 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 five 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 Portfolio.
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:
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 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 the 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
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 19
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
3. Taxes
It is the policy of the Portfolio 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
Interest income is accrued daily. Investment transactions are accounted for on
the trade date securities are purchased or sold. Investment gains and losses
are determined on the identified cost basis. The Portfolio accretes discounts
as adjustments to interest income. Additionally, the Portfolio amortizes
premiums on debt securities for financial statement reporting purposes only.
5. Income and Expenses
All income earned and expenses incurred by the Portfolio are borne on a pro
rata basis by each settled class of shares, based on proportionate interest in
the Portfolio represented by the net assets of such class, except that the
Portfolio's Class B and Class C shares bear higher distribution and transfer
agent fees than Class A, Class R 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.
7. Change of Fiscal Year End
The Portfolio changed its fiscal year end from June 30 to October 31.
Accordingly, the statement of changes in net assets and financial highlights
include the period from July 1, 2003 to October 31, 2003.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Portfolio pays the
Adviser an advisory fee at an annual rate of .55 of 1% of the Portfolio's
average
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
daily net assets. The fee is accrued daily and paid monthly. The Adviser has
agreed to waive its fees and bear certain expenses to the extent necessary to
limit total operating expenses on an annual basis to .98%, 1.68%, 1.68%, 1.18%
and .68% of the average daily net assets of Class A, Class B, Class C, Class R
and Advisor Class shares, respectively. For the six months ended April 30,
2004, such waiver amounted to $523,484.
Effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee so as to charge the Portfolio at the reduced annual rate of .45% of the
first $2.5 billion, .40% of the next $2.5 billion, and .35% in excess of $5
billion, of the average daily net assets of the Fund. Through April 30, 2004,
such waiver amounted to $151,031. The amount of the fee waiver may increase or
decrease as a result of a final, definitive agreement with the New York
Attorney 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 Portfolio may reimburse the Adviser for
certain legal and accounting services provided to the Portfolio by the Adviser.
For the six months ended April 30, 2004, the Advisor voluntarily agreed to
waive its fees for services. Such waiver amounted to $60,000.
The Portfolio 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
Portfolio. Such compensation amounted to $514,735 for the six months ended
April 30, 2004.
For the six months ended April 30, 2004, the Portfolio's expenses were reduced
by $64 under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., a wholly-owned
subsidiary of the Adviser, serves as the distributor of the Portfolio's shares.
The Distributor has advised the Portfolio that it has retained front-end sales
charges of $1,924 from the sale of Class A shares and received $3,032, $100,271
and $2,043, 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 April 30, 2004.
NOTE C
Distribution Services Agreement
The Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Portfolio pays distribution and servicing fees to the
Distributor at an annual rate of up to .30 of 1% of the Portfolio's average
daily net assets attributable to Class A shares, .50 of 1% of the Portfolio's
average daily net assets
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 21
Notes to Financial Statements
- -------------------------------------------------------------------------------
attributable to Class R shares, and 1% of the 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 Portfolio that it has incurred expenses in excess
of the distribution costs reimbursed by the Portfolio in the amount of $682,716
and $369,605 for Class B and Class C shares, respectively. Such costs may be
recovered from the Portfolio in future periods so long as the Agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the Adviser
may use its own resources to finance the distribution of the Portfolio's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the period ended April 30, 2004, were as follows:
Purchases Sales
============== ==============
Investment securities (excluding
U.S. government securities) $ 60,129,378 $ 106,642,473
U.S. government securities 1,180,534,074 1,143,283,051
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 are as follows:
Gross unrealized appreciation $ 4,644,113
Gross unrealized depreciation (5,761,383)
--------------
Net unrealized depreciation $ (1,117,270)
==============
Forward Exchange Currency Contracts
The Portfolio 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 sale commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation and
depreciation by the Portfolio.
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio'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 a
foreign currency relative to the U.S. dollar. The face or contract amount, in
U.S. dollars, reflects the total exposure the Portfolio has in that particular
currency contract.
NOTE E
Securities Lending
The Portfolio has entered into a securities lending agreement with AG Edwards
&Sons, Inc. (the "Lending Agent"). Under the terms of the agreement, the
Lending Agent, on behalf of the Portfolio, administers the lending of portfolio
securities to certain broker-dealers. In return, the Portfolio receives fee
income from the lending transactions or it retains a portion of interest on the
investment of any cash received as collateral. The Portfolio also continues to
receive dividends or interest on the securities loaned. Unrealized gain or loss
on the value of the securities loaned that may occur during the term of the
loan will be reflected in the accounts of the Portfolio. All loans are
continuously secured by collateral exceeding the value of the securities
loaned. All collateral consists of either cash or U.S. government securities.
The Lending Agent may invest the cash collateral received in accordance with
the investment restrictions of the Portfolio in one or more of the following
investments: U.S. government or U.S. government agency obligations, bank
obligations, corporate debt obligations, asset-backed securities, investment
funds, structured products, repurchase agreements and an eligible money market
fund. The Lending Agent will indemnify the Portfolio for any loss resulting
from a borrower's failure to return a loaned security when due.
As of April 30, 2004, the Portfolio had loaned securities with a value of
$162,214,076 and received cash collateral which was invested in short-term
securities valued at $166,623,731 as included in the accompanying portfolio of
investments. For the period ended April 30, 2004, the Portfolio earned fee
income of $29,774 which is included in the accompanying statement of operations.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 23
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTE F
Capital Stock
There are 15,000,000,000 shares of $.001 par value capital stock authorized,
divided into five classes, designated Class A, Class B, Class C, Class R and
Advisor Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
-------------------------------------------------
Shares
-------------------------------------------------
Six Months Ended July 1, 2003 to Year Ended
April 30, 2004 October 31, June 30,
(unaudited) 2003(a) 2003
-------------------------------------------------
Class A
Shares sold 633,868 1,188,424 7,320,478
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 208,825 69,498 188,816
- -------------------------------------------------------------------------------
Shares converted from Class B 148,902 72,114 183,885
- -------------------------------------------------------------------------------
Shares redeemed (1,688,217) (1,944,017) (4,991,928)
- -------------------------------------------------------------------------------
Net increase (decrease) (696,622) (613,981) 2,701,251
===============================================================================
Class B
Shares sold 643,081 900,731 10,491,815
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 220,153 65,907 187,182
- -------------------------------------------------------------------------------
Shares converted to Class A (149,036) (73,115) (183,857)
- -------------------------------------------------------------------------------
Shares redeemed (2,222,592) (2,261,947) (4,937,099)
- -------------------------------------------------------------------------------
Net increase (decrease) (1,508,394) (1,368,424) 5,558,041
===============================================================================
Class C
Shares sold 187,420 748,714 3,020,966
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 38,112 12,921 40,953
- -------------------------------------------------------------------------------
Shares redeemed (607,503) (740,569) (2,189,012)
- -------------------------------------------------------------------------------
Net increase (decrease) (381,971) 21,066 872,907
===============================================================================
Advisor Class
Shares sold 2,699,773 1,716,510 6,206,900
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 1,057,904 305,930 854,656
- -------------------------------------------------------------------------------
Shares redeemed (494,068) (257,118) (2,365,708)
- -------------------------------------------------------------------------------
Net increase 3,263,609 1,765,322 4,695,848
===============================================================================
November 3,
2003(b) to
April 30, 2004
(unaudited)
-----------------
Class R
Shares sold 1,517
- -------------------------------------------------
Net increase 1,517
=================================================
(a) The portfolio changed its fiscal year end from June 30 to October 31.
(b) Commencemnet of distributions.
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
-------------------------------------------------
Amount
-------------------------------------------------
Six Months Ended July 1, 2003 to Year Ended
April 30, 2004 October 31, June 30,
(unaudited) 2003(a) 2003
-------------------------------------------------
Class A
Shares sold $ 6,662,623 $ 12,601,915 $ 77,100,650
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 2,182,757 733,739 1,997,352
- -------------------------------------------------------------------------------
Shares converted from Class B 1,558,949 771,300 1,956,325
- -------------------------------------------------------------------------------
Shares redeemed (17,756,080) (20,507,158) (52,684,749)
- -------------------------------------------------------------------------------
Net increase (decrease) $ (7,351,751) $ (6,400,204) $ 28,369,578
===============================================================================
Class B
Shares sold $ 6,746,348 $ 9,506,335 $110,463,465
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 2,297,246 695,223 1,979,554
- -------------------------------------------------------------------------------
Shares converted to Class A (1,558,949) (771,300) (1,956,325)
- -------------------------------------------------------------------------------
Shares redeemed (23,349,469) (23,810,699) (52,323,161)
- -------------------------------------------------------------------------------
Net increase (decrease) $(15,864,824) $(14,380,441) $ 58,163,533
===============================================================================
Class C
Shares sold $ 1,968,336 $ 7,877,594 $ 31,610,879
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 396,940 136,077 431,766
- -------------------------------------------------------------------------------
Shares redeemed (6,375,860) (7,783,898) (22,969,541)
- -------------------------------------------------------------------------------
Net increase (decrease) $ (4,010,584) $ 229,773 $ 9,073,104
===============================================================================
Advisor Class
Shares sold $ 28,344,146 $ 18,114,331 $ 65,432,463
- -------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and
distributions 11,058,072 3,228,730 9,029,421
- -------------------------------------------------------------------------------
Shares redeemed (5,188,709) (2,704,792) (24,532,768)
- -------------------------------------------------------------------------------
Net increase $ 34,213,509 $ 18,638,269 $ 49,929,116
===============================================================================
November 3,
2003(b) to
April 30, 2004
(unaudited)
-----------------
Class R
Shares sold $ 15,866
- -------------------------------------------------
Net increase $ 15,866
=================================================
(a) The portfolio changed its fiscal year end from June 30 to October 31.
(b) Commencemnet of distributions.
NOTE G
Risks Involved in Investing in the Portfolio
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guar-
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 25
Notes to Financial Statements
- -------------------------------------------------------------------------------
antor of a debt security, or the counterparty to a derivative contract, will be
unable or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations. The degree of risk for a particular security
may be reflected in its credit risk rating. Credit risk is greater for medium
quality and lower-rated securities. Lower-rated debt securities and similar
unrated securities (commonly known as "junk bonds") have speculative elements
or are predominantly speculative risks.
In the ordinary course of business, the Portfolio enters into contracts that
contain a variety of indemnifications. The Portfolio's maximum exposure under
these arrangements is unknown. However, the Portfolio has not had prior claims
or losses pursuant to these indemnification provisions and expects the risk of
loss thereunder to be remote.
NOTE H
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 million revolving credit facility (the
"Facility") intended to provide short-term financing if necessary, 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 Portfolio did not utilize the
Facility during the six months ended April 30, 2004.
NOTE I
Distributions to Shareholders
The tax character of distributions to be paid for the year ending October 31,
2004 will be determined at the end of the current fiscal year. Based on the
operations of the Portfolio as of the semi-annual date, and its distribution
policy, the Portfolio may have a non-taxable distribution at year end. At this
time, the amount of this non-taxable distribution is not estimable. The tax
character of distributions paid during the period ended October 31, 2003, and
the fiscal years ended June 30, 2003 and June 30, 2002 were as follows:
July 1, 2003 to Year Ended Year Ended
October 31, June 30, June 30,
2003* 2003 2002
============ ============ ============
Distributions paid from:
Ordinary income $ 5,455,042 $ 15,322,558 $ 9,824,526
Net long-term
capital gains -0- -0- 53,837
------------ ------------ ------------
Total taxable
distributions 5,455,042 15,322,558 9,878,363
------------ ------------ ------------
Total distributions paid $ 5,455,042 $ 15,322,558 $ 9,878,363(a)
============ ============ ============
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
As of October 31, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 6,468,174
Undistributed long-term capital gains 2,678,430
Accumulated capital and other losses (4,240,862)(b)
Unrealized appreciation/(depreciation) 2,085,834(c)
------------
Total accumulated earnings/(deficit) $ 6,991,576
============
(a) Total distributions paid differ from Statement of Changes in Net Assets
because for tax purposes dividends are recognized when actually paid.
(b) On October 31, 2003, the Fund had a net capital loss carryforward for
federal income tax purposes of $4,240,862 all of which expires in the year
2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed.
(c) 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 difference between book and tax amortization
methods for premium and market discount.
* The Portfolio changed its fiscal year end from June to October 31.
NOTE J
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;
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 27
Notes to Financial Statements
- -------------------------------------------------------------------------------
(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.
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Notes to Financial Statements
- -------------------------------------------------------------------------------
Since October 2, 2003, numerous 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.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 29
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
Six Months
Ended July 1, July 1,
April 30, 2003 to Year Ended June 30, 1999(c) to
2004 October 31, ------------------------------------- June 30,
(unaudited) 2003(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.56 $10.82 $10.25 $10.22 $9.85 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d)(e) .17 .12 .33 .46 .55 .60
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions (.04) (.25) .66 .17 .42 (.21)
Net increase (decrease) in net
asset value from operations .13 (.13) .99 .63 .97 .39
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from
net investment income (.19) (.13) (.42) (.46) (.55) (.54)
Distributions in excess of
net investment income -0- -0- -0- (.10) (.04) -0-
Distributions from net realized
gain on investment
transactions (.23) -0- -0- (.01) (.01) -0-
Distributions in excess of net
realized gain on investment
transactions -0- -0- -0- (.03) -0- -0-
Total dividends and distributions (.42) (.13) (.42) (.60) (.60) (.54)
Net asset value, end of period $10.27 $10.56 $10.82 $10.25 $10.22 $9.85
TOTAL RETURN
Total investment return based on
net asset value(f) 1.17% (1.20)% 9.87% 6.23% 10.09% 4.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $59,217 $68,213 $76,565 $44,852 $20,068 $5,071
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .98%(g) .98%(g) .98% .98% .98% .98%(g)
Expenses, before waivers/
reimbursements 1.30%(g) 1.33%(g) 1.32% 1.48% 2.85% 13.10%(g)
Net investment income(e) 3.16%(g) 2.60%(g) 3.08% 4.39% 5.49% 5.96%(g)
Portfolio turnover rate 289% 199% 867% 573% 385% 215%
See footnote summary on page 35.
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
Six Months
Ended July 1, July 1,
April 30, 2003 to Year Ended June 30, 1999(c) to
2004 October 31, ------------------------------------- June 30,
(unaudited) 2003(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.55 $10.81 $10.24 $10.21 $9.84 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d)(e) .13 .09 .26 .38 .47 .50
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions (.04) (.25) .66 .16 .43 (.18)
Net increase (decrease) in net
asset value from operations .09 (.16) .92 .54 .90 .32
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.15) (.10) (.35) (.38) (.47) (.48)
Distributions in excess of net
investment income -0- -0- -0- (.09) (.05) -0-
Distributions from net realized
gain on investment
transactions (.23) -0- -0- (.01) (.01) -0-
Distributions in excess of net
realized gain on investment
transactions -0- -0- -0- (.03) -0- -0-
Total dividends and distributions (.38) (.10) (.35) (.51) (.53) (.48)
Net asset value, end of period $10.26 $10.55 $10.81 $10.24 $10.21 $9.84
TOTAL RETURN
Total investment return based on
net asset value(f) .82% (1.44)% 9.12% 5.52% 9.34% 3.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $77,966 $96,033 $113,233 $50,354 $13,960 $1,007
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.68%(g) 1.68%(g) 1.68% 1.68% 1.68% 1.68%(g)
Expenses, before waivers/
reimbursements 2.03%(g) 2.06%(g) 2.05% 2.19% 3.36% 11.29%(g)
Net investment income(e) 2.55%(g) 2.01%(g) 2.41% 3.70% 4.82% 5.32%(g)
Portfolio turnover rate 289% 199% 867% 573% 385% 215%
See footnote summary on page 35.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 31
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
----------------------------------------------------------------------------
Six Months
Ended July 1, July 1,
April 30, 2003 to Year Ended June 30, 1999(c) to
2004 October 31, ------------------------------------- June 30,
(unaudited) 2003(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.53 $10.79 $10.23 $10.19 $9.83 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d)(e) .13 .09 .26 .38 .48 .51
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions (.04) (.25) .65 .17 .41 (.20)
Net increase (decrease) in net
asset value from operations .09 (.16) .91 .55 .89 .31
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.15) (.10) (.35) (.38) (.48) (.48)
Distributions in excess of net
investment income -0- -0- -0- (.09) (.04) -0-
Distributions from net realized
gain on investment
transactions (.23) -0- -0- (.01) (.01) -0-
Distributions in excess of net
realized gain on investment
transactions -0- -0- -0- (.03) -0- -0-
Total dividends and distributions (.38) (.10) (.35) (.51) (.53) (.48)
Net asset value, end of period $10.24 $10.53 $10.79 $10.23 $10.19 $9.83
TOTAL RETURN
Total investment return based on
net asset value(f) .82% (1.44)% 9.03% 5.63% 9.25% 3.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $21,407 $26,021 $26,445 $16,131 $4,315 $514
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.68%(g) 1.68%(g) 1.68% 1.68% 1.68% 1.68%(g)
Expenses, before waivers/
reimbursements 2.02%(g) 2.06%(g) 2.03% 2.19% 3.42% 11.75%(g)
Net investment income(e) 2.56%(g) 2.03%(g) 2.41% 3.71% 4.88% 5.35%(g)
Portfolio turnover rate 289% 199% 867% 573% 385% 215%
See footnote summary on page 35.
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout The Period
--------------
Class R
--------------
November 3,
2003(h) to
April 30
2004
(unaudited)
--------------
Net asset value, beginning of period $10.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income(d)(e) .15
Net realized and unrealized gain on investment
transactions -0-
Net increase in net asset value from operations .15
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.18)
Distributions from net realized gain on investment
transactions (.23)
Total dividends and distributions (.41)
Net asset value, end of period $10.27
TOTAL RETURN
Total investment return based based on net asset value(f) 1.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $16
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.18%(g)
Expenses, before waivers/reimbursements 1.49%(g)
Net investment income 2.91%(e)(g)
Portfolio turnover rate 289%
See footnote summary on page 35.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 33
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
---------------------------------------------------------------
Six Months
Ended July 1, July 1,
April, 30 2003 to Year Ended June 30, 1999(c) to
2004 October 31, ------------------------ June 30,
(unaudited) 2003(a) 2003 2002(b) 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.55 $10.82 $10.25 $10.22 $9.97
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d)(e) .18 .13 .36 .48 .42
Net realized and unrealized
gain (loss) on investment and
foreign currency transactions (.02) (.26) .66 .18 .30
Net increase (decrease) in net
asset value from operations .16 (.13) 1.02 .66 .72
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.21) (.14) (.45) (.48) (.42)
Distributions in excess of net
investment income -0- -0- -0- (.11) (.04)
Distributions from net realized
gain on investment
transactions (.23) -0- -0- (.01) (.01)
Distributions in excess of net
realized gain on investment
transactions -0- -0- -0- (.03) -0-
Total dividends and distributions (.44) (.14) (.45) (.63) (.47)
Net asset value, end of period $10.27 $10.55 $10.82 $10.25 $10.22
TOTAL RETURN
Total investment return based on
net asset value(f) 1.42% (1.19)% 10.20% 6.57% 7.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $285,294 $258,747 $246,127 $185,071 $27,420
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .68%(g) .68%(g) .68% .68% .68%(g)
Expenses, before waivers/
reimbursements 1.00%(g) 1.03%(g) 1.20% 1.20% 2.29%(g)
Net investment income(e) 3.43%(g) 2.87%(g) 3.39% 4.69% 5.89%(g)
Portfolio turnover rate 289% 199% 867% 573% 385%
See footnote summary on page 35.
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
Financial Highlights
- -------------------------------------------------------------------------------
(a) The Portfolio changed its fiscal year end from June 30 to October 31.
(b) As required, effective July 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year ended
June 30, 2002 was to decrease net investment income per share by $.05, increase
net realized and unrealized gain on investments per share by $.05 for Class A,
B and C, respectively, and by $.06 for the Advisor Class, and decrease the
ratio of net investment income to average net assets from 4.93% to 4.39% for
Class A, from 4.24% to 3.70% for Class B, from 4.25% to 3.71% for Class C and
from 5.24% to 4.69% for Advisor Class. Per share, ratios and supplemental data
for periods prior to July 1, 2001 have not been restated to reflect this change
in presentation.
(c) Commencement of operations.
(d) Based on average shares outstanding.
(e) Net of fees waived and expenses reimbursed by the Adviser.
(f) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return does not reflect the deduction of taxes that a
shareholder would pay on Portfolio distributions or the redemption of Portfolio
shares. Total investment return calculated for a period of less than one year
is not annualized.
(g) Annualized.
(h) Commencement of distribution.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 35
Board of Directors
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Paul J. DeNoon, Vice President
Matthew D.W. Bloom(2), Vice President
Jeffrey S. Phlegar, Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Custodian
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 756003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
(2) Mr. Bloom is the person primarily responsible for the day-to-day
management of the Portfolio's investment portfolio.
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
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.
_______________________________________________________________________________
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO o 37
ALLIANCEBERNSTEIN BOND FUND QUALITY BOND PORTFOLIO
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.
QBPSR0404
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. 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 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 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 Bond Fund, Inc.
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 30, 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 30, 2004
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 30, 2004