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: 811-06251
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2004
Date of reporting period: October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
Emerging Market Fixed Income
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AllianceBernstein Multi-Market Strategy Trust
Annual Report--October 31, 2004
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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
AllianceBernstein 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.
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, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
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.
December 22, 2004
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Multi-Market Strategy Trust (the "Fund") for the annual
reporting period ended October 31, 2004.
Investment Objective and Policies
This open-end fund seeks the highest level of current income that is available,
consistent with what we consider to be prudent investment risk, from a
portfolio of high-quality debt securities having remaining maturities of not
more than five years. The Fund seeks investment opportunities in foreign, as
well as domestic, securities markets. Normally at least 70% of the Fund's
assets will be invested in debt securities denominated in foreign currencies.
The Fund limits its investments in a single currency other than the U.S. dollar
to 25% of its net assets, except for the euro, in which the Fund may invest up
to 50% of its net assets.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Merrill Lynch 1-5 Year Government Bond Index, for the six- and 12-month periods
ended October 31, 2004. Also included in the table are returns for the Fund's
peer group, as represented by the Lipper Short World Multi-Market Income Funds
Average (the "Lipper Average"). Funds in the Lipper Average have generally
similar investment objectives to the Fund, although some may have different
investment policies and sales and management fees.
For the 12-month reporting period ended October 31, 2004, the Fund's Class A
shares outperformed the Merrill Lynch 1-5 Year Government Bond Index and
exceeded the Lipper Average of similarly managed Funds. The Fund's
outperformance was primarily the result of its overweighting of non-U.S.
government holdings and non-U.S. currency exposure.
U.S. government bonds, as represented within the Merrill Lynch 1-5 Year
Government Bond Index, returned only 1.31% and underperformed most non-U.S.
developed government markets during the 12-month reporting period ended October
31, 2004. Non-U.S. government bonds outperformed the U.S. as they were not as
negatively impacted by the broad-based bond market sell-off in April. Non-U.S.
government bond markets were buoyed by economies which generally lagged the
strength of the U.S. economy. In response, short-term yields in the U.S. rose
during the annual period while yields in other short-term government markets
generally declined.
The Fund also outperformed relative to its benchmark during the 12-month period
under review due to its foreign currency exposure. The U.S. dollar weakened
significantly against most major currencies during this time frame due to a
growing domestic budget deficit and widening trade gap. For the year, the euro
gained 9.42% against the U.S. dollar, Canada gained 8.06% and the U.K gained
7.98%, all significant movements.
Although the Fund's non-U.S. currency exposure contributed positively to
performance for the 12-month reporting period, much of that rally took place
during the first six months of the
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 1
reporting period. During late summer, the euro weakened modestly as European
economies generally slowed. The Fund's exposure to the euro, therefore,
dampened the Fund's six-month performance resulting in a slight
underperformance for the six-month period ended October 31, 2004.
Market Review and Investment Strategy
Bond markets during the six- and 12-month reporting period were marked by
intra-period volatility as changing perceptions of the direction of the U.S.
and global economy effected global bond performance. Global bond markets
rebounded strongly in the first quarter of 2004, as escalating global
geopolitical tensions and concerns regarding the sustainability of the U.S.
economic recovery began to surface. Early in April, however, the U.S. Treasury
market sold off dramatically on a surprisingly strong 308,000 gain in March
payroll employment and less dovish comments from the Federal Reserve. U.S.
Treasury yields moved up sharply across the maturity spectrum as the market
began to price in an eventual interest rate hike. April's positive economic
data, and resulting Treasury sell-off, led other global bond markets into
negative territory for April. Although Canadian and Euro-area bonds sold off in
April, it was to a much lesser degree than U.S. bonds and more of a reaction to
the U.S. than to domestic fundamentals.
By late June, weak economic data and the prospects of slower, more measured
Federal Reserve tightenings bolstered the bond markets back into positive
returns and allowed bond markets to rebound as the U.S. economy hit a mid-year
slowdown. During the period the Euro-area continued to show sluggish growth
relative to the rest of the world. The European Central Bank left rates
unchanged yet again, but signaled that soaring oil prices have made it more
pessimistic about the region's outlook.
During the 12-month reporting period ended October 31, 2004, the Fund
maintained its overweighting of non-U.S government bonds. The Fund's holdings
in U.S. Treasuries were reduced and exposure to European and Canadian
government bonds was increased. The Fund also added a position in short
maturity Japanese government bonds, as yields became more attractive and growth
slowed. The management team believed the expected slower growth in Japan would
hold rates comparatively steady. Lastly, the Fund added to non-U.S. currency
exposure by not fully hedging all of its non-U.S.dollar positions. Currency
exposure outside the U.S. during the annual period included the euro, the
Canadian dollar, Japanese yen, the Australian and New Zealand dollars and the
British pound, all of which strengthened relative to the U.S. dollar.
In Memory
It is with sadness that we announce the passing of Clifford L. Michel, a member
of the Board of Directors of AllianceBernstein Multi-Market Strategy Trust. Mr.
Michel served the interests of the Fund's shareholders for the last 12 years.
His hard work, dedication and contributions to the Fund will be greatly missed.
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2 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages 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.
The investment return and principal value of an investment in the Fund 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 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
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (3%
year 1, 2% year 2, 1% year 3, 0% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Performance assumes reinvestment of distributions
and does not account for taxes.
Benchmark Disclosure
The unmanaged Merrill Lynch 1-5 Year Government Bond Index does not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The Index consists of short-term U.S. Treasury securities maturing
in one to five years and is a standard measure of the performance of a basket
of unmanaged short-term Treasury securities. For both the six- and 12-month
periods ended October 31, 2004, the Lipper Short World Multi-Market Income
Funds Average consisted of 6 funds. These funds have generally similar
investment objectives to AllianceBernstein Multi-Market Strategy Trust,
although some may have different investment policies and sales and management
fees. An investor cannot invest directly in an index or average, and their
results are not indicative of the performance for any specific investment,
including the Fund.
A Word About Risk
The Fund invests a significant amount of its assets in foreign securities which
may magnify fluctuations and can invest a significant portion of its assets in
the securities of a single issuer, which may present greater risk than a more
diversified portfolio. Price fluctuation may be caused by changes in interest
rates or bond credit quality ratings. Changes in interest rates have a greater
effect on bonds with longer maturities than on those with shorter maturities.
While the Fund invests in bonds and fixed-income securities, the Fund 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 Fund's prospectus.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED OCTOBER 31, 2004 6 Months 12 Months
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AllianceBernstein Multi-Market
Strategy Trust
Class A 1.53% 3.11%
Class B 1.17% 2.39%
Class C 1.35% 2.57%
Merrill Lynch 1-5 Year
Government Bond Index 1.82% 2.38%
Lipper Short World Multi-Market
Income Funds Average 1.65% 2.72%
GROWTH OF A $10,000 INVESTMENT IN THE FUND
10/31/94 TO 10/31/04
Merrill Lynch 1-5 Year Government Bond Index: $18,227
Lipper Short World Multi-Market Income Funds Average: $16,541
AllianceBernstein Multi-Market Strategy Trust Class A: $15,064
AllianceBernstein Merrill Lynch Lipper Short World
Multi-Market Strategy 1-5 Year Government Multi-Market Income
Trust Class A Bond Index Funds Average
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10/31/94 9,575 10,000 10,000
10/31/95 8,955 11,037 9,822
10/31/96 10,424 11,674 11,270
10/31/97 11,239 12,471 12,094
10/31/98 12,018 13,559 12,945
10/31/99 12,373 13,829 13,337
10/31/00 12,769 14,696 13,908
10/31/01 13,826 16,468 15,019
10/31/02 14,340 17,428 15,689
10/31/03 14,611 17,803 16,103
10/31/04 15,064 18,227 16,541
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Multi-Market Strategy Trust Class A shares (from 10/31/94 to
10/31/04) as compared to the performance of its benchmark, the Merrill Lynch
1-5 Year Government Bond Index and the Lipper Average. The chart reflects the
deduction of the maximum 4.25% sales charge from the initial $10,000 investment
in the Fund and assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
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4 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
HISTORICAL PERFORMANCE
(continued from previous page)
Historical Performance
AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 2004
NAV Returns SEC Returns
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Class A Shares
1 Year 3.11% -1.23%
5 Years 4.01% 3.11%
10 Years 4.63% 4.17%
SEC Yield* 1.76%
Class B Shares
1 Year 2.39% -0.60%
5 Years 3.21% 3.21%
10 Years(a) 4.12% 4.12%
SEC Yield* 1.08%
Class C Shares
1 Year 2.57% 1.57%
5 Years 3.28% 3.28%
10 Years 3.83% 3.83%
SEC Yield* 1.13%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2004)
Class A Shares
1 Year -2.87%
5 Years 3.00%
10 Years 4.26%
Class B Shares
1 Year -2.32%
5 Years 3.06%
10 Years(a) 4.19%
Class C Shares
1 Year -0.19%
5 Years 3.09%
10 Years 3.90%
* SEC yields are calculated based on SEC guidelines for the 30-day period
ended October 31, 2004.
(a) Assumes conversion of Class B shares into Class A shares after six years.
See Historical Performance disclosures on page 3.
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2004 October 31, 2004 During Period*
- -------------------------------------------------------------------------------
Class A
Actual $1,000 $1,015.27 $7.14
Hypothetical
(5% return
before expenses) $1,000 $1,018.05 $7.15
Class B
Actual $1,000 $1,011.69 $10.97
Hypothetical
(5% return
before expenses) $1,000 $1,014.23 $10.99
Class C
Actual $1,000 $1,013.46 $10.73
Hypothetical
(5% return
before expenses) $1,000 $1,014.48 $10.74
* Expenses are equal to the classes' annualized expense ratios of 1.41%,
2.17% and 2.12%, respectively, multiplied by the average account value over the
period, multiplied by the number of days in the most recent fiscal
half-year/366 (to reflect the one-half year period).
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6 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
PORTFOLIO SUMMARY
October 31, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $207.1
SECURITY TYPE BREAKDOWN*
o 49.4% Sovereign Debt
o 27.2% Corporate Debt
o 22.2% U.S. Government & Government Sponsored Agency Obligations
o 1.2% Short-Term
* All data are as of October 31, 2004. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 7
PORTFOLIO OF INVESTMENTS
October 31, 2004
Principal
Amount
(000) U.S. $ Value
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Australia-6.2%
Debt Obligations-6.2%
Commonwealth Bank of Australia
7.13%, 7/10/06(a) US$ 5,000 $ 5,340,760
European Investment Bank
5.30%, 4/26/05(a) AUD 10,000 7,454,432
Total Australian Securities
(cost $10,679,278) 12,795,192
Belgium-3.4%
Government Obligation-3.4%
Kingdom of Belgium
3.75%, 3/28/09(a)
(cost $6,535,434) EUR 5,340 6,994,086
Canada-6.9%
Debt Obligations-6.9%
Citigroup Finance Canada Corp.
4.30%, 4/25/06(a) CAD 10,000 8,315,294
4.78%, 6/20/05(a) 2,000 1,657,274
GE Capital Canada Funding
5.30%, 7/24/07(a) 5,000 4,268,344
Total Canadian Securities
(cost $11,786,304) 14,240,912
Denmark-1.9%
Government Obligation-1.9%
Kingdom of Denmark
7.00%, 11/15/07(a)
(cost $3,420,972) DKK 20,000 3,845,244
Germany-7.0%
Debt Obligation-4.4%
Kredit Fuer Wiederaufbau
4.50%, 8/03/06(a) EUR 7,000 9,232,315
Government Obligation-2.6%
Bundesobligation
3.50%, 10/09/09(a) 4,100 5,305,113
Total German Securities
(cost $13,036,728) 14,537,428
Ireland-3.4%
Government Obligation-3.4%
Republic of Ireland
4.25%, 10/18/07(a)
(cost $6,594,274) 5,325 7,084,020
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8 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Portfolio of Investments
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Italy-9.5%
Government Obligation-9.5%
Republic of Italy
6.75%, 7/01/07(a)
(cost $17,864,571) EUR 14,000 $ 19,718,413
Japan-4.1%
Government Obligation-4.1%
Government of Japan
0.30%, 3/20/08
(cost $8,323,206) JPY 913,500 8,601,796
Netherlands-4.1%
Government Obligation-4.1%
Government of Netherlands
5.25%, 7/15/08(a)
(cost $7,305,012) EUR 6,150 8,481,527
New Zealand-2.6%
Government Obligation-2.6%
Government of New Zealand
8.00%, 11/15/06(a)
(cost $5,282,340) NZD 7,500 5,315,592
Norway-4.9%
Government Obligation-4.9%
Norwegian Government
5.50%, 5/15/09(a)
(cost $9,258,925) NOK 60,000 10,237,262
Poland-1.5%
Debt Obligation-1.5%
European Investment Bank
17.00%, 3/24/05(a)
(cost $2,446,633) PLN 10,000 3,045,530
Spain-3.8%
Government Obligation-3.8%
Government of Spain
7.35%, 3/31/07(a)
(cost $6,020,601) EUR 5,500 7,786,701
Sweden-9.0%
Government Obligation-9.0%
Government of Sweden
6.50%, 5/05/08(a)
(cost $16,526,370) SEK 120,000 18,661,407
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 9
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
United Kingdom-3.6%
Debt Obligations-3.6%
Halifax Plc.
4.75%, 3/24/09(a) EUR 2,000 $ 2,683,615
UBS London
8.00%, 1/08/07(a) GBP 2,500 4,866,328
Total United Kingdom Securities
(cost $7,439,171) 7,549,943
United States-26.7%
Debt Obligations-4.5%
Citibank, NA
14.50%, 6/16/05(a) PLN 7,000 2,148,983
Citigroup, Inc.
6.75%, 12/01/05(a) US$ 5,000 5,218,345
Suntrust Bank
1.44%, 6/02/09(a) 2,000 1,999,600
9,366,928
U.S. Government and Government
Sponsored Agency Obligations-22.2%
Federal Home Loan Bank
2.75%, 3/14/08(a) 3,500 3,453,072
3.00%, 4/15/09(a) 4,000 3,925,784
Federal Home Loan Mortgage
Corp.
3.50%, 2/15/08(a) EUR 9,500 12,312,683
Federal National Mortgage
Association
1.75%, 3/26/08(a) JPY 1,110,000 10,950,622
3.25%, 2/15/09(a) US$ 5,000 4,956,435
U.S. Treasury Notes
2.25%, 2/15/07(a) 4,500 4,459,922
3.13%, 9/15/08(a) 1,000 1,002,812
3.13%, 10/15/08(a) 4,925 4,935,776
45,997,106
Total United States Securities
(cost $52,404,269) 55,364,034
SHORT-TERM INVESTMENT-1.2%
Repurchase Agreement
State Street Bank & Trust Co.
1.75%, 10/29/04, due 11/1/04
in the amount of $2,500,365
(collateralized by $2,545,000
FHLB, 1.875%, due 2/15/05,
value $2,552,821)
(cost $2,500,000) 2,500 2,500,000
Total Investments-99.8%
(cost $187,424,088) 206,759,087
Other assets less liabilities-0.2% 374,566
Net Assets-100% $ 207,133,653
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10 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination October 31, Appreciation/
(000) Date 2004 (Depreciation)
- -------------------------------------------------------------------------------
Buy Contracts
Euro Dollar,
settling
11/05/04 2,250 $ 2,878,674 $ 2,869,293 $ (9,381)
Polish Zloty,
settling
11/05/04 9,401 2,686,177 2,773,524 87,347
Sale Contracts
Australian Dollar,
settling
11/08/04 7,428 5,371,181 5,543,858 (172,677)
British Pound,
settling
11/19/04 1,294 2,307,142 2,371,394 (64,252)
Canadian Dollar,
settling
11/09/04 16,353 12,971,497 13,397,593 (426,096)
Danish Krona,
settling
11/18/04 22,166 3,687,015 3,802,210 (115,195)
Euro Dollar,
settling
11/05/04-
12/22/04 62,739 79,180,317 79,985,121 (804,804)
Japanese Yen,
settling
11/5/04 2,249,669 20,323,309 21,220,549 (897,240)
New Zealand Dollar,
settling
11/04/04 4,919 3,322,398 3,361,689 (39,291)
Norwegian Kroner
settling
11/18/04 65,139 9,839,722 10,187,776 (348,054)
Polish Zloty,
settling
11/05/04 19,401 5,451,311 5,723,700 (272,389)
Swedish Krona,
settling
12/17/04 137,755 18,959,831 19,406,012 (446,181)
(a) Positions, or a portion thereof, with an aggregate market value of
$195,657,291 have been segregated to collateralize forward exchange currency
contracts.
Glossary:
FHLB - Federal Home Loan Bank
Currency Abbreviations:
AUD - Australian Dollar
CAD - Canadian Dollar
DKK - Danish Krona
EUR - Euro Dollar
GBP - British Pound
JPY - Japanese Yen
NOK - Norwegian Kroner
NZD - New Zealand Dollar
PLN - Polish Zloty
SEK - Swedish Krona
US$ - United States Dollar
See notes to financial statements.
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ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 11
STATEMENT OF ASSETS & LIABILITIES
October 31, 2004
Assets
Investments in securities, at value
(cost $187,424,088) $ 206,759,087
Cash 480,929
Foreign cash, at value
(cost $157,171) 40,595
Interest receivable 4,114,792
Unrealized appreciation of forward
exchange currency contracts 87,347
Receivable for capital stock sold 84,272
Total assets 211,567,022
Liabilities
Unrealized depreciation of forward
exchange currency contracts 3,595,560
Payable for capital stock redeemed 339,238
Advisory fee payable 88,174
Dividends payable 79,097
Distribution fee payable 64,304
Transfer agent fee payable 35,916
Administrative fee payable 7,500
Accrued expenses and other liabilities 223,580
Total liabilities 4,433,369
Net Assets $ 207,133,653
Composition of Net Assets
Capital stock, at par $ 36,451
Additional paid-in capital 220,294,653
Distributions in excess of net investment income (8,348,875)
Accumulated net realized loss on investment and
foreign currency transactions (21,100,698)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 16,252,122
$ 207,133,653
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($188,311,887/33,144,701 shares of capital stock
issued and outstanding) $5.68
Sales charge--4.25% of public offering price .25
Maximum offering price $5.93
Class B Shares
Net asset value and offering price per share
($7,830,728/1,376,252 shares of capital stock
issued and outstanding) $5.69
Class C Shares
Net asset value and offering price per share
($10,991,038/1,929,720 shares of capital stock
issued and outstanding) $5.70
See notes to financial statements.
- -------------------------------------------------------------------------------
12 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
STATEMENT OF OPERATIONS
Year Ended October 31, 2004
Investment Income
Interest (net of foreign taxes withheld
of $143,394) $ 8,669,599
Expenses
Advisory fee $ 1,322,085
Distribution fee--Class A 610,299
Distribution fee--Class B 99,549
Distribution fee--Class C 121,908
Transfer agency 749,504
Custodian 268,709
Audit and legal 132,338
Printing 117,326
Administrative 98,000
Registration 43,509
Directors' fees 23,895
Miscellaneous 12,873
Total expenses 3,599,995
Less: expenses waived and reimbursed
by the Adviser (see Note B) (153,082)
Less: expense offset arrangement
(see Note B) (48)
Net expenses 3,446,865
Net investment income 5,222,734
Realized and Unrealized Gain (Loss)
on Investment and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions 1,626,325
Written options 39,484
Foreign currency transactions (7,435,358)
Net change in unrealized
appreciation/depreciation of:
Investments 10,839,171
Foreign currency denominated assets
and liabilities (3,241,270)
Net gain on investment and foreign
currency transactions 1,828,352
Net Increase in Net Assets
from Operations $ 7,051,086
See notes to financial statements.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 13
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, October 31,
2004 2003
------------ ------------
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 5,222,734 $ 7,739,246
Net realized gain (loss) on investment
and foreign currency transactions (5,769,549) 3,205,577
Net change in unrealized
appreciation/depreciation of investments
and foreign currency denominated
assets and liabilities 7,597,901 (5,700,747)
Net increase in net assets
from operations 7,051,086 5,244,076
Dividends and Distributions to
Shareholders from
Net investment income
Class A (3,245,215) (1,056,498)
Class B (126,386) (53,345)
Class C (154,771) (62,195)
Tax return of capital
Class A (3,707,865) (11,616,504)
Class B (144,404) (586,549)
Class C (176,835) (683,856)
Capital Stock Transactions
Net decrease (44,249,958) (35,017,265)
Total decrease (44,754,348) (43,832,136)
Net Assets
Beginning of period 251,888,001 295,720,137
End of period (including distributions in
excess of net investment income of
($8,348,875) and ($4,452,901),
respectively) $207,133,653 $251,888,001
See notes to financial statements.
- -------------------------------------------------------------------------------
14 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
NOTES TO FINANCIAL STATEMENTS
October 31, 2004
NOTE A
Significant Accounting Policies
AllianceBernstein Multi-Market Strategy Trust, Inc. (the "Fund") was
incorporated in the State of Maryland as a non-diversified, open-end management
investment company. The Fund offers Class A, Class B and Class C shares. Class
A shares are sold with a front-end sales charge of up to 4.25% for purchases
not exceeding $1,000,000. With respect to purchases of $1,000,000 or more,
Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are sold currently with
a contingent deferred sales charge which declines from 3.0% to zero depending
on the period of time the shares are held. Class B shares will automatically
convert to Class A shares six years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. All three classes
of shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that each class bears different distribution
expenses and has exclusive voting rights with respect to its distribution plan.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. 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
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 15
the absence of such a price, the most recent quoted bid price. If there are no
quotations available for the day of valuation, the last available closing
settlement price is used; securities traded in the over-the-counter market,
("OTC") (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, Alliance
Capital Management, L.P. (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 (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions and the difference between the amounts
of dividends, interest and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains and losses from valuing foreign currency denominated
assets and
- -------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation and depreciation of investments and foreign currency
denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provision for federal income or excise taxes is
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date the securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discounts as
adjustments to interest income. Additionally, the Fund amortizes premiums on
debt securities for financial statement reporting purposes only.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with U.S. generally accepted accounting principles. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Until September 6, 2004, under the terms of an investment advisory agreement,
the Fund paid the Adviser an advisory fee at an annual rate of .60% of the
Fund's average daily net assets. Effective September 7, 2004, the terms of the
investment advisory agreement were amended so that the advisory fee was reduced
to an annual rate of .50% of the first $2.5 billion, .45% of the next $2.5
billion and .40% in excess of $5 billion, of the Fund's average daily net
assets. The fee is accrued daily and paid monthly.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 17
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above. Through September 6, 2004, such waiver
amounted to $153,082. For a more complete discussion of the Adviser's
settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Adviser provides certain legal and
accounting services for the Fund. For the year ended October 31, 2004, such
fees amounted to $98,000.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $459,203 for the year ended October 31,
2004.
For the year ended October 31, 2004, the Fund's expenses were reduced by $48
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc. (the "Distributor"),
a wholly-owned subsidiary of the Adviser, serves as the distributor of the
Fund's shares. The Distributor has advised the Fund that it has retained
front-end sales charges of $2,783 from the sale of Class A shares and received
$54, $18,258 and $831 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the year ended October 31, 2004.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to the Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. The fees are accrued daily and
paid monthly. The Agreement provides that the Distributor will use such
payments in their entirety for distribution assistance and promotional
activities. The Distributor has advised the Fund that it has incurred expenses
in excess of the distribution costs reimbursed by the Fund in the amount of
$10,757,373 and $1,910,726 for Class B and C shares, respectively; such costs
may be recovered from the Fund in future periods so long as the agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the Adviser
may use its own resources to finance the distribution of the Fund's shares.
- -------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the year ended October 31, 2004, were as follows:
Purchases Sales
-------------- ------------
Investment securities (excluding U.S.
government securities) $ 100,674,049 $ 136,686,304
U.S. government securities 36,232,049 63,232,871
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency
transactions and written options) are as follows:
Cost $ 191,663,397
Gross unrealized appreciation $ 15,183,104
Gross unrealized depreciation (87,414)
Net unrealized appreciation $ 15,095,690
1. Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to hedge certain firm purchase and sales commitments
denominated in foreign currencies. A forward exchange currency contract is a
commitment to purchase or sell a foreign currency on a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contract and the closing of such contract would be included in net
realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
2. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign cur-
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 19
rencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise
of an option written by the Fund could result in the Fund selling or buying a
security or currency at a price different from the current market value.
Transactions in written options for the year ended October 31, 2004 were as
follows:
Number of Premiums
Contracts Received
------------ ----------
Options outstanding at
October 31, 2003 -0- $ -0-
Options written 355,000,000 56,270
Options terminated in closing
purchase transactions (5,000,000) (36,570)
Options expired (350,000,000) (19,700)
Options outstanding at
October 31, 2004 -0- $ -0-
3. Swap Agreements
The Fund may enter into swaps to hedge its exposure to foreign currency
interest rates and credit risk or for investment purposes. A swap is an
agreement that obligates two parties to exchange a series of cash flows at
specified intervals based upon or calculated by reference to changes in
specified prices or rates for a spec-
- -------------------------------------------------------------------------------
20 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
ified amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interim payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities or currencies.
As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Fund accrues for the interim payments on
swap contracts on a daily basis, with the net amount recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities. Once the interim payments are settled in cash, the net amount is
recorded as realized gain/loss on swaps, in addition to realized gain/loss
recorded upon the termination of swaps contracts on the statements of
operations. Prior to November 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Fund to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Fund receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
if the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 21
Fund coupled with the periodic payments previously received, may be less than
the Maximum Payout Amount it pays to the buyer, resulting in a loss to the Fund.
At October 31, 2004, the Fund had no Sale Contracts outstanding.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. The Fund had no Buy Contracts outstanding as of
October 31, 2004.
NOTE E
Capital Stock
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares.
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2004 2003 2004 2003
------------ ------------ -------------- --------------
Class A
Shares sold 441,175 2,323,078 $ 2,511,210 $ 14,460,733
Shares issued in
reinvestment of
dividends 755,725 1,303,825 4,303,866 6,922,813
Shares converted
from Class B 177,199 240,685 1,009,321 1,179,092
Shares redeemed (7,638,260) (9,476,739) (43,550,088) (55,219,312)
Net decrease (6,264,161) (5,609,151) $(35,725,691) $(32,656,674)
Class B
Shares sold 362,037 1,807,039 $ 2,066,100 $ 10,605,567
Shares issued in
reinvestment of
dividends 35,445 65,535 202,375 388,225
Shares converted
to Class A (176,932) (240,270) (1,009,321) (1,179,092)
Shares redeemed (1,104,668) (1,600,672) (6,317,181) (9,595,642)
Net increase
(decrease) (884,118) 31,632 $ (5,058,027) $ 219,058
- -------------------------------------------------------------------------------
22 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2004 2003 2004 2003
------------ ------------ -------------- --------------
Class C
Shares sold 249,433 1,534,825 $ 1,418,938 $ 8,955,177
Shares issued in
reinvestment of
dividends 43,198 73,948 246,762 433,726
Shares redeemed (897,734) (2,053,800) (5,131,940) (11,968,552)
Net decrease (605,103) (445,027) $(3,466,240) $(2,579,649)
NOTE F
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expense in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 2004.
NOTE G
Risks Involved in Investing in the Fund
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 guarantor 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.
Concentration of Risk--Investing in securities of foreign companies or foreign
governments involves special risks which include changes in foreign exchange
rates and the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies or foreign governments and their markets may be less
liquid and their prices more volatile than those of comparable United States
companies or of the United States Government.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 23
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE H
Distribution to Shareholders
The tax character of distributions paid for the fiscal years ended October 31,
2004 and October 31, 2003 were as follows:
2004 2003
----------- ------------
Distributions paid from:
Ordinary income $ 3,526,372 $ 1,172,038
Total taxable distributions 3,526,372 1,172,038
Tax return of capital 4,029,104 12,886,909
Total distributions paid $ 7,555,476 $ 14,058,947
As of October 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (28,524,185)(a)
Unrealized appreciation/(depreciation) 15,405,831(b)
Total accumulated earnings/(deficit) $ (13,118,354)(c)
(a) On October 31, 2004, the Fund had a net capital loss carryforward of
$21,098,086 of which $572,902 expires in the year 2005, $6,799,602 expires in
the year 2007, $9,788,373 expires in the year 2008, $3,634,196 expires in the
year 2009 and $303,013 expires in the year 2010. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year, the Fund utilized capital loss
carryforwards of $382,175, and $591,099 of capital loss carryforwards expired.
For the year ended October 31, 2004, the cumulative deferred loss on straddles
was $7,426,099.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the realization for
tax purposes of gains/losses on certain derivative instruments, the difference
between book and tax amortization methods for premium and tax deferral of
losses on wash sales.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable primarily to dividends payable.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income, tax return of capital,
expiration of capital loss carryforwards, the tax treatment of bond premium and
the tax treatment of foreign currency gains and losses, resulted in a net
increase in distributions in excess of net investment income, a net decrease in
accumulated realized loss on investment and foreign currency transactions, and
a decrease in additional paid-in capital. This reclassification had no effect
on net assets.
- -------------------------------------------------------------------------------
24 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
NOTE I
Legal Proceedings
As has been previously reported, 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
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 25
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 the Adviser; 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 the Adviser. 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 the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
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.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt
- -------------------------------------------------------------------------------
26 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
of compensation for selling specific mutual funds and the disclosure of such
compensation. The SEC has indicated publicly that, among other things, it is
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 27
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2004 2003 2002(a) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $5.70 $5.89 $5.99 $6.08 $6.29
Income From Investment Operations
Net investment income(b) .14(c) .17 .19 .35 .38
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .03 (.06) .02 .13 (.19)
Net increase in net asset
value from operations .17 .11 .21 .48 .19
Less: Dividends and Distributions
Dividends from net
investment income (.09) (.03) -0- (.32) (.38)
Distributions in excess of
net investment income -0- -0- -0- -0- (.02)
Tax return of capital (.10) (.27) (.31) (.25) -0-
Total dividends and
distributions (.19) (.30) (.31) (.57) (.40)
Net asset value, end of period $5.68 $5.70 $5.89 $5.99 $6.08
Total Return
Total investment return based
on net asset value(d) 3.11% 1.88% 3.74% 8.27% 3.17%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $188,312 $224,504 $264,978 $289,265 $305,610
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.46% 1.49% 1.49% 1.48% 1.52%(e)
Expenses, before waivers/
reimbursements 1.52% 1.49% 1.49% 1.48% 1.52%(e)
Net investment income 2.39%(c) 2.87% 3.22% 5.87% 6.25%
Portfolio turnover rate 62% 113% 115% 79% 82%
See footnote summary on page 31.
- -------------------------------------------------------------------------------
28 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2004 2003 2002(a) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $5.71 $5.90 $6.01 $6.10 $6.32
Income From Investment Operations
Net investment income(b) .09(c) .12 .14 .30 .33
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .04 (.05) .02 .13 (.19)
Net increase in net asset
value from operations .13 .07 .16 .43 .14
Less: Dividends and Distributions
Dividends from net
investment income (.07) (.02) -0- (.29) (.34)
Distributions in excess of
net investment income -0- -0- -0- -0- (.02)
Tax return of capital (.08) (.24) (.27) (.23) -0-
Total dividends and
distributions (.15) (.26) (.27) (.52) (.36)
Net asset value, end of period $5.69 $5.71 $5.90 $6.01 $6.10
Total Return
Total investment return based
on net asset value(d) 2.39% 1.17% 2.84% 7.49% 2.30%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $7,831 $12,904 $13,150 $11,311 $13,052
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.21% 2.23% 2.24% 2.24% 2.28%(e)
Expenses, before waivers/
reimbursements 2.28% 2.23% 2.24% 2.24% 2.28%(e)
Net investment income 1.63%(c) 2.13% 2.44% 5.05% 5.44%
Portfolio turnover rate 62% 113% 115% 79% 82%
See footnote summary on page 31.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 29
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
-----------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2004 2003 2002(a) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $5.71 $5.90 $6.01 $6.10 $6.31
Income From Investment Operations
Net investment income(b) .10(c) .13 .14 .30 .34
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .04 (.06) .02 .13 (.19)
Net increase in net asset
value from operations .14 .07 .16 .43 .15
Less: Dividends and Distributions
Dividends from net
investment income (.07) (.02) -0- (.29) (.34)
Distributions in excess of
net investment income -0- -0- -0- -0- (.02)
Tax return of capital (.08) (.24) (.27) (.23) -0-
Total dividends and
distributions (.15) (.26) (.27) (.52) (.36)
Net asset value, end of period $5.70 $5.71 $5.90 $6.01 $6.10
Total Return
Total investment return based
on net asset value(d) 2.57% 1.17% 2.83% 7.48% 2.46%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $10,991 $14,480 $17,592 $15,208 $16,578
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.17% 2.20% 2.20% 2.19% 2.22%(e)
Expenses, before waivers/
reimbursements 2.24% 2.20% 2.20% 2.19% 2.22%(e)
Net investment income 1.67%(c) 2.15% 2.48% 5.10% 5.52%
Portfolio turnover rate 62% 113% 115% 79% 82%
See footnote summary on page 31.
- -------------------------------------------------------------------------------
30 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
(a) As required, effective November 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year ended
October 31, 2002 was to decrease net investment income per share by $.14,
decrease net realized and unrealized loss on investments per share by $.14 for
Class A, B and C, respectively, and decrease the ratio of net investment income
to average net assets from 5.56% to 3.22% for Class A, from 4.79% to 2.44% for
Class B and from 4.83% to 2.48% for Class C. Per share, ratios and supplemental
data for periods prior to November 1, 2001 have not been restated to reflect
this change in presentation.
(b) Based on average shares outstanding.
(c) Net of waivers/reimbursements by the Adivser.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of the total
investment return. Total return does not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Total investment return calculated for a period of less than one year is not
annualized.
(e) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the periods shown below, the net expense ratios were as
follows:
Year Ended October 31,
2000
----------------------
Class A 1.50%
Class B 2.27%
Class C 2.21%
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
AllianceBernstein Multi-Market Strategy Trust, Inc.
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of AllianceBernstein Multi-Market Strategy Trust,
Inc. (the "Fund") as of October 31, 2004, and the related statements of
operations for the year then ended, the statement of changes in net assets, and
the financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company
AccountingOversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31, 2004, by
correspondence with the custodian and others. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
AllianceBernstein Multi-Market Strategy Trust, Inc. at October 31, 2004, the
results of its operations for the year then ended, the changes in its net
assets, and the financial highlights for each of the indicated periods, in
conformity with U.S. generally accepted accounting principles.
New York, New York
December 15, 2004
- -------------------------------------------------------------------------------
32 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Donald J. Robinson(1)
OFFICERS
Marc O. Mayer, President
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Michael L. Mon, Vice President
Douglas J. Peebles(2), Vice President
Mark R.Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee and the Governance and Nominating Committee.
(2) Mr. Peebles is the person primarily responsible for the day-to-day
management of the Fund's investment portfolio.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 33
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS, DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
William H. Foulk, Jr., # Investment adviser and an 116 None
2 Sound View Drive independent consultant. He
Suite 100 was formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
9/7/32 (1991) registered investment adviser,
Chairman of the Board with which he had been
associated since prior to 1999.
He was formerly Deputy
Comptroller and Chief Investment
Officer of the State of New York
and, prior thereto, Chief
Investment Officer of the
New York Bank for Savings.
Ruth Block, #,** Formerly Executive Vice 96 None
500 SE Mizner Blvd. President and Chief Insurance
Boca Raton, FL 33432 Officer of The Equitable Life
11/7/30 (1992) Assurance Society of the
United States; Chairman and
Chief Executive Officer of Evlico;
Director of Avon, BP (oil and
gas), Ecolab Incorporated
(specialty chemicals), Tandem
Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation; former Governor
at Large National Association
of Securities Dealers, Inc.
David H. Dievler, # Independent consultant. Until 100 None
P.O. Box 167 December 1994 he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
10/23/29 (1991) Management Corporation ("ACMC")
responsible for mutual fund administration.
Prior to joining ACMC
in 1984 he was Chief Financial
Officer of Eberstadt Asset
Management since 1968. Prior to
that he was a Senior Manager at
Price Waterhouse & Co. Member of
American Institute of Certified
Public Accountants since 1953.
- -------------------------------------------------------------------------------
34 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
PORTFOLIOS
IN FUND OTHER
NAME, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS, DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
John H. Dobkin, # Consultant. Formerly President 98 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002.
2/19/42 (1992) Formerly a Senior Advisor from
June 1999-June 2000 and
President of Historic Hudson
Valley (historic preservation) from
December 1989-May 1999
(historic preservation). Previously,
Director of the National Academy
of Design and during 1988-1992,
he was Director and Chairman of
the Audit Committee of ACMC.
Donald J. Robinson, # Senior Counsel to the law firm of 96 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 since prior to 1999. Formerly a
8/24/34 (1996) senior partner and a member
of the Executive Committee of
that firm. Formerly a member
and Chairman of the Municipal
Securities Rulemaking Board
and Trustee of the Museum of
the City of New York.
* There is no stated term of office for the Fund's Directors.
** Ms. Block was an "interested person" as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of 116 American Depositary Shares
of AXA having a value of approximately $2,396. AXA is a controlling person of
ACMC. Ms. Block received shares of the Equitable Companies Incorporated as part
of the demutualization of The Equitable Life Assurance Society of the United
States, which were subsequently converted through a corporate action into 116
American Depositary Shares of AXA.
# Member of the Audit Committee and the Governance and Nominating Committee.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 35
Officers of The Fund
Certain information concerning the Fund's Officers is listed below.
NAME,
ADDRESS* POSITION(S) PRINCIPAL OCCUPATION
AND DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------
Marc O. Mayer, President Executive Vice President of ACMC**
10/2/57 since 2001; prior thereto, Chief
Executive Officer of Sanford C.
Bernstein & Co., LLC and its
predecessor since prior to 1999.
Philip L. Kirstein, Senior Vice President and Senior Vice President, Independent
5/29/45 Independent Compliance Compliance Officer-Mutual Funds of
Officer ACMC** with which he has been
associated since October 2004.
Prior thereto, he was Of Counsel to
Kirkpatrick & Lockhart, LLP from
October 2003 to October 2004, and
General Counsel and First Vice
President of Merrill Lynch Investment
Managers L.P. since prior to 1999 until
March 2003.
Michael L. Mon, Vice President Vice President of ACMC**, with which
3/2/69 he has been associated since prior to
June 1999.
Douglas J. Peebles, Vice President Executive Vice President of ACMC**,
8/10/65 with which he has been associated
since prior to 1999.
Mark R. Manley, Secretary Senior Vice President, Deputy General
10/23/62 Council and Chief Compliance Officer
of ACMC**, with which he has been
associated since prior to 1999.
Mark D. Gersten, Treasurer and Chief Senior Vice President of Alliance Global
10/4/50 Financial Officer Investor Services, Inc. ("AGIS")** and
Vice President of AllianceBernstein
Investment Research and
Management, Inc. ("ABIRM")** with
which he has been associated since
prior to 1999.
Vincent S. Noto, Controller Vice President of AGIS**, with which he
12/14/64 has been associated since prior to
1999.
* The address for each of the Fund's Officers is 1345 Avenue of the
Americas, New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at (800) 227-4618 for a free prospectus or SAI.
- -------------------------------------------------------------------------------
36 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
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
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Fund
Global & International
All-Asia Investment Fund
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
- -------------------------------------------------------------------------------
Value Funds
Domestic
Balanced Shares
Focused Growth & Income 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. You should read the prospectus carefully before you invest.
* Prior to December 15, 2004, these Funds were named as follows: Global
Health Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth
Fund; Global Technology Fund was Technology Fund; and Focused Growth & Income
Fund was Disciplined Value Fund.
** Effective February 1, 2005, Small Cap Value Fund will be renamed
Small/Mid-Cap Value 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 MULTI-MARKET STRATEGY TRUST o 37
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
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.
MMSTAR1004
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its
principal executive officer, principal financial officer and principal
accounting officer. A copy of the registrant's code of ethics is filed
herewith as Exhibit 11(a)(1).
(b) During the period covered by this report, no material amendments were
made to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit
waivers to the provisions of the code of ethics adopted in 2(a) above were
granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent auditor Ernst & Young LLP, for the Fund's last two fiscal years for
professional services rendered for: (i) the audit of the Fund's annual
financial statements included in the Fund's annual report to stockholders; (ii)
assurance and related services that are reasonably related to the performance
of the audit of the Fund's financial statements and are not reported under (i),
which include multi-class distribution testing, advice and education on
accounting and auditing issues, and consent letters; and (iii) tax compliance,
tax advice and tax return preparation.
Audit-Related
Audit Fees Fees Tax Fees
---------- ------------- --------
AllianceBernstein Multi-Market 2003
Strategy Trust Inc. 2004
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into
on or after May 6, 2003, the Fund's Audit Committee policies and procedures
require the pre-approval of all audit and non-audit services provided to the
Fund by the Fund's independent auditors. The Fund's Audit Committee policies
and procedures also require pre-approval of all audit and non-audit services
provided to the Adviser and Service Affiliates to the extent that these
services are directly related to the operations or financial reporting of the
Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees
in the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services
provided to the Fund, the Fund's Adviser and entities that control, are
controlled by or under common control with the Adviser that provide ongoing
services to the Fund, which include conducting an annual internal control
report pursuant to Statement on Auditing Standards No. 70 ("Service
Affiliates"):
Total Amount of
Foregoing Column
Pre-approved by the
All Fees for Audit Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
------------------------ ------------------------
AllianceBernstein Multi-Market 2003 [ ]
Strategy Trust, Inc. ( )
( )
2004 [ ]
( )
( )
(h) The Audit Committee of the Fund has considered whether the
provision of any non-audit services not pre-approved by the Audit Committee
provided by the Fund's independent auditor to the Adviser and Service
Affiliates is compatible with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
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.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
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 (a) (1) Code of ethics that is subject to the disclosure of
Item 2 hereof
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 Multi-Market Strategy Trust, Inc.
By: /s/ Marc O. Mayer
Marc O. Mayer
President
Date: December 31, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
Marc O. Mayer
President
Date: December 31, 2004
By: /s/ Mark D. Gersten
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: December 31, 2004