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: 811-07391
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME 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, 2005
Date of reporting period: April 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
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SEMI-ANNUAL REPORT
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[LOGO] AllianceBernstein (R)
Investment Research and Management
AllianceBernstein Global Strategic Income Trust
Multi-Sector Fixed Income
April 30, 2005
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The Fund expects to hold a meeting of shareholders on or about November 15,
2005, at which the election of directors will be considered. For information
with respect to submitting a candidate for director for consideration by the
Governance and Nominating Committee of the Fund's Board of Directors, please
see the Nominating Procedures in the Fund's Statement of Additional Information.
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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.
June 22, 2005
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Global Strategic Income Trust (the "Fund") for the
semi-annual reporting period ended April 30, 2005.
Investment Objective and Policies
This open-end fund seeks primarily a high level of current income and
secondarily capital appreciation. The Fund invests primarily in a portfolio of
fixed-income securities of U.S. and non-U.S. companies and U.S. government and
foreign government securities and supranational entities, including
non-investment grade securities. The Fund will maintain at least 65% of its
total assets in investment grade securities and may maintain not more than 35%
of its total assets in lower-rated securities.
Investment Results
The table on page 5 shows the Fund's performance compared to its benchmark, the
Lehman Brothers (LB) Global Aggregate Index (U.S. dollar hedged) for the six-
and 12-month periods ended April 30, 2005. Also included in the table are
returns for the Fund's peer group, as represented by the Lipper Multi-Sector
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 both the six- and 12-month periods ended April 30, 2005, the Fund's Class A
shares outperformed both its benchmark and the Lipper Average, an average of
similarly managed funds. Contributing positively to the Fund's performance
during the semi-annual reporting period was its allocation to emerging market
debt, as this debt class outperformed the Fund's broader index during this time
frame. In addition, the Fund's country allocation within its emerging debt
holdings, particularly a position in Russia, contributed significantly to the
outperformance. Also adding to performance was the Fund's government country
selection. The Fund's underweight to U.S. Treasuries benefited performance as
U.S. government holdings significantly underperformed non-U.S. government
holdings. Conversely, the Fund's European government bond allocation
contributed positively to performance.
Dampening the Fund's performance was its allocation to high yield corporates
which underperformed the Fund's investment-grade only benchmark. Industry
selection and security selection within high yield, however, contributed
positively to performance. The Fund's overweighting of the bank/finance and
property and casualty insurance sectors helped performance, as did an
underweighting of the automotive sector.
Market Review and Investment Strategy
During the semi-annual reporting period, the U.S. fixed income markets
generally posted meager returns, resulting primarily from mixed economic data
and changing investor perceptions throughout the period. U.S. Treasuries
returned 0.96% for the reporting period, while U.S. investment-grade corporates
returned 0.49% and U.S. high
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 1
yield corporates returned only 0.08%. The Federal Reserve continued to raise
interest rates in increments of 25 basis points, taking the benchmark rate from
1.75% to 2.75%.
Unlike the second half of 2004, when the mood in the U.S. market had been
uncharacteristically sanguine in the context of rising interest rates, market
sentiment soured late in the first quarter of 2005 and bond prices fell,
especially in the intermediate part of the curve. U.S. markets were rattled
primarily by two concerns: the fear that official rate hikes could become more
aggressive and the fallout from General Motors' profit warning and potential
ratings downgrade to below investment grade. In April, however, the U.S. fixed
income markets reversed course once again and posted strong returns for the
month, as the pace of U.S. economic growth appeared to slow. This allowed U.S.
fixed income sectors to move back into positive territory, albeit by a
relatively small margin. As anticipated, Moody's downgraded General Motors to
Baa3 and GMAC to Baa2.
Global securities outpaced the U.S. as generally slower growth outside of the
U.S. made it less likely that global central banks would raise interest rates,
thus dampening bond performance in those countries. Global Treasuries,
excluding the U.S., posted a stronger 3.91% on a hedged basis, according to
Lehman Brothers. Global corporate returns also outpaced U.S. corporates with
Europe posting a return of 3.84%, Canada 2.87% and the U.K. 2.85%, all hedged
into U.S. dollars (USD), according to Lehman Brothers.
The emerging market debt class posted a return of 3.51% for the semi-annual
reporting period, as represented by the JP Morgan Emerging Markets Bond Index
Global. The positive gains were a result of low international interest rates,
ample global liquidity, high commodity export prices and improved fundamentals
in the emerging countries. Many emerging debt countries markedly improved their
external debt dynamics and pre-funded their debt obligations through 2006.
Through February 2005, the emerging market debt class posted nine consecutive
months of positive returns. Similar to other fixed-income markets, however, the
emerging markets sold off in March prior to recovering in April.
The Fund continued to maintain allocations to its core emerging market
countries (Brazil, Colombia, Russia, South Africa and the Ukraine), however
individual country weightings were adjusted during the period. The Fund held a
significant position in Russia during the period based on strong fiscal
performance and prospects of a ratings upgrade to investment grade. Russia was
upgraded in January by Standard & Poor's to investment-grade status. The Fund
maintained its overweight position in Russia despite political uncertainty and
concerns over the pace of much needed structural reforms. Russia's fiscal
policies remained sound, however, and its ability to service its debt certain.
The Fund also maintained its position in the
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2 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Ukraine during the period due to strong economic growth and prospects for
rating upgrades despite dramatic political change. Industrial production grew
rapidly, supported by metal prices, a main Ukrainian export.
Within high yield, the Fund's Global and High Yield Investment Team (the
"team") overweighted those industries that, in the team's analysis, had
favorable fundamental outlooks and attractive valuations, such as manufacturing
and cable. In general, the team preferred the industrial-oriented sectors to
the consumer-oriented sectors. Corporations had healthy cash balances to
deploy, while the consumer began to feel increased pressure due to high energy
prices. The Fund was underweight in industries with uncertain or poor credit
trends, such as automotive suppliers and utilities. Within the Fund's
investment-grade corporate holdings, the team overweighted the insurance
sector, favoring BBB-rated specialty insurance companies. The team also
overweighted the banking industry, utilities, home construction, media/cable
and wireless telecom. Investment-grade corporate industries underweighted
during the period included automotive, aerospace/defense and transportation.
Additionally, within the Fund's government allocation, the team continued to
underweight U.S. Treasuries and continued to hold a more significant allocation
to European government bonds.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 3
Historical Performance
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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.alliancbernstein.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 (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class, Class R, Class K and
Class I shares will vary due to different expenses associated with these
classes. Performance assumes reinvestment of distributions and does not account
for taxes.
Benchmark Disclosure
Neither the unmanaged Lehman Brothers (LB) Global Aggregate Index (USD Hedged)
nor the LB U.S. Aggregate Index reflects fees and expenses associated with the
active management of a mutual fund portfolio. The LB Global Aggregate Index
provides a broad-based measure of the international investment-grade bond
market. The index combines the LB U.S. Aggregate Index with dollar-denominated
versions of the Pan-European Index and the Japanese, Canadian, Australian and
New Zealand components of the Global Treasury Index. For the six- and 12-month
periods ended April 30, 2005, the Lipper Multi-Sector Income Funds Average
consisted of 111 and 110 funds, respectively. These funds have generally
similar investment objectives to AllianceBernstein Global Strategic Income
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 and
emerging markets which could result in substantial volatility due to political
and economic uncertainty. The Fund can invest a portion of its assets in the
securities of a single issuer, a single region, a single foreign country and
35% of its assets in non-investment grade securities which may present greater
risk. In an effort to increase yield, the Fund can use leverage which may
increase fluctuation caused by changes in interest rates or bond credit quality
ratings. Please note, as interest rates rise, existing bond prices fall and can
cause the value of an investment in the Fund to decline. While the Fund invests
principally in bonds and other fixed income securities, in order to achieve its
investment objectives, 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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4 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK --------------------------
PERIODS ENDED APRIL 30, 2005 6 Months 12 Months
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AllianceBernstein Global Strategic Income Trust
Class A 3.01% 7.03%
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Class B 2.66% 6.27%
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Class C 2.54% 6.28%
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Advisor Class 3.18% 7.37%
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Class R** -1.22%*
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Class K** -1.19%*
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Class I** -1.15%*
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Lehman Brothers Global Aggregate
Index (USD Hedged) 2.67% 6.15%
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Lipper Multi-Sector Income Funds Average 1.83% 7.87%
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* Since Inception. The Class R, Class K and Class I share inception date is
3/1/05.
** Please note that this is a new share class offering for investors
purchasing shares through institutional pension plans. The inception date for
Class R, Class K and Class I shares is 3/1/05.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 5
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 7.03% 2.49%
5 Years 4.93% 4.02%
Since Inception* 7.80% 7.30%
SEC Yield** 3.17%
Class B Shares
1 Year 6.27% 2.27%
5 Years 4.20% 4.20%
Since Inception* 7.29% 7.29%
SEC Yield** 2.57%
Class C Shares
1 Year 6.28% 5.28%
5 Years 4.18% 4.18%
Since Inception* 7.03% 7.03%
SEC Yield** 2.58%
Advisor Class Shares
1 Year 7.37%
5 Years 5.24%
Since Inception* 5.46%
SEC Yield** 3.61%
Class R Shares +
Since Inception* -1.22%
SEC Yield** 3.28%
Class K Shares +
Since Inception* -1.19%
SEC Yield** 3.54%
Class I Shares +
Since Inception* -1.15%
SEC Yield** 3.81%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year -0.40%
5 Years 3.55%
Since Inception* 7.31%
Class B Shares
1 Year -0.67%
5 Years 3.74%
Since Inception* 7.30%
Class C Shares
1 Year 2.28%
5 Years 3.73%
Since Inception* 7.04%
* Inception dates: 1/9/96 for Class A shares; 3/21/96 for Class B and Class C
shares; 12/18/97 for Advisor Class shares; 3/1/05 for Class R, Class K and
Class I shares.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2005.
+ Please note that this is a new share class offering for investors purchasing
shares through institutional pension plans. The inception date for Class R,
Class K and Class I shares is 3/1/05.
See Historical Performance disclosures on page 4.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Fund Expenses
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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 table below provides information about actual account values and actual
expenses. You may use the information, 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 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 table below also 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 hypothetical example 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
November 1, 2004 April 30, 2005 During Period*
--------------------------- --------------------------- ---------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
------------ ------------ ------------ ------------ ------------ ------------
Class A $1,000 $1,000 $1,030.12 $1,017.60 $ 7.30 $ 7.25
- --------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,026.56 $1,014.03 $10.90 $10.84
- --------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,025.40 $1,014.08 $10.85 $10.79
- --------------------------------------------------------------------------------------------------------
Advisor
Class $1,000 $1,000 $1,031.75 $1,019.04 $ 5.84 $ 5.81
- --------------------------------------------------------------------------------------------------------
Class R + $1,000 $1,000 $ 987.76 $1,005.41 $ 2.79 $ 2.82
- --------------------------------------------------------------------------------------------------------
Class K + $1,000 $1,000 $ 988.15 $1,005.88 $ 2.32 $ 2.34
- --------------------------------------------------------------------------------------------------------
Class I + $1,000 $1,000 $ 988.49 $1,006.35 $ 1.88 $ 1.90
- --------------------------------------------------------------------------------------------------------
* Expenses are equal to the classes' annualized expense ratios of 1.45%,
2.17%, 2.16%, 1.16%, 1.71%, 1.42% and 1.15%, respectively, multiplied by the
average account value over the period, multiplied by the number of days in the
period/365.
** Assumes 5% return before expenses.
+ The account value and expenses for Class R, Class K and Class I shares are
based on the period from March 1, 2005 (commencement of distribution) through
April 30, 2005.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 7
Portfolio Summary
- -------------------------------------------------------------------------------
PORTFOLIO SUMMARY
April 30, 2005 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $111.4
SECURITY TYPE BREAKDOWN*
41.4% Sovereign Debt Obligations
22.3% Corporate Debt Obligations
17.0% U.S. Government & Government
Sponsored Agency Obligations [PIE CHART OMITTED]
10.0% Bank Loans
4.3% Supranationals
5.0% Short-Term
* All data are as of April 30, 2005. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
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PORTFOLIO OF INVESTMENTS
April 30, 2005 (unaudited)
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Argentina-0.8%
Government Obligations-0.8%
Republic of Argentina
3.01%, 8/03/12(a)(b) US$ 890 $ 743,595
11.75%, 6/15/15 125 37,950
12.00%, 6/19/31 27 8,038
12.25%, 6/19/18 239 72,422
15.50%, 12/19/08(c) 165 49,962
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Total Argentinian Securities
(cost $783,944) 911,967
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Australia-0.3%
Corporate Debt Obligations-0.3%
Commonwealth Bank of Australia
4.65%, 6/15/18(d) 150 143,329
SPI Electricity & Gas Australia Holdings
Pty, Ltd.
6.15%, 11/15/13(d) 160 173,423
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Total Australian Securities
(cost $321,646) 316,752
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Bermuda-0.2%
Corporate Debt Obligation-0.2%
Central European Media Enterprises, Ltd.
8.25%, 5/15/12(d)
(cost $170,518) EUR 132 170,518
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Brazil-2.5%
Corporate Debt Obligation-0.4%
PF Export Receivables Master Trust
6.44%, 6/01/15(d) US$ 414 420,895
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Government Obligations-2.1%
Federal Republic of Brazil
10.50%, 7/14/14(b) 105 117,863
12.00%, 4/15/10(b) 1,800 2,135,700
12.75%, 1/15/20(b) 65 83,200
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2,336,763
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Total Brazilian Securities
(cost $1,889,417) 2,757,658
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_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 9
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Canada-2.2%
Corporate Debt Obligations-1.0%
Abitibi-Consolidated, Inc.
6.00%, 6/20/13(b) US$ 1,275 $ 1,045,500
West Fraser Timber Co., Ltd.
5.20%, 10/15/14(d) 56 55,574
-------------
1,101,074
-------------
Government Obligations-1.2%
Government of Canada
5.00%, 6/01/14(b) CAD 1,105 935,439
5.75%, 6/01/33(b) 495 466,019
-------------
1,401,458
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Total Canadian Securities
(cost $2,728,494) 2,502,532
-------------
Cayman Islands-0.3%
Preferred Stock-0.3%
Ace, Ltd. Series C
7.80%, 5/30/08(b)
(cost $325,000) 13,000 342,940
-------------
Colombia-1.0%
Government Obligation-1.0%
Republic of Colombia
11.75%, 2/25/20(b)
(cost $924,035) US$ 950 1,154,250
-------------
Denmark-0.3%
Corporate Debt Obligation-0.3%
Danske Bank A/S
5.88%, 3/26/15(a)(b)
(cost $242,806) EUR 240 354,875
-------------
Ecuador-0.2%
Government Obligation-0.2%
Republic of Ecuador
8.00%, 8/15/30(c)(d)
(cost $307,685) US$ 322 260,820
-------------
El Salvador-0.2%
Government Obligation-0.2%
Republic of El Salvador
7.75%, 1/24/23(d)
(cost $249,130) 250 274,375
-------------
Finland-4.4%
Government Obligation-4.4%
Republic of Finland
5.38%, 7/04/13
(cost $4,823,480) EUR 3,270 4,863,082
-------------
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
France-9.9%
Corporate Debt Obligations-0.4%
Legrand Holding SA
10.50%, 2/15/13(b) US$ 305 $ 343,125
Ray Aquisition SCA
9.38%, 3/16/15(d) EUR 103 123,076
-------------
466,201
-------------
Government Obligations-9.5%
Government of France
4.00%, 10/25/13(b) 3,400 4,617,506
6.50%, 4/25/11 O.A.T.(b) 2,890 4,452,355
3.00%, 7/25/09 TIPS(b) 1,017 1,443,338
-------------
10,513,199
-------------
Total French Securities
(cost $10,198,775) 10,979,400
-------------
Germany-3.1%
Corporate Debt Obligations-0.3%
Kronos International, Inc.
8.88%, 6/30/09(b) EUR 250 342,327
-------------
Government Obligation-2.8%
Deutsche Bundesrepublik
4.00%, 7/04/09(b) 2,311 3,139,683
-------------
Total German Securities
(cost $3,334,030) 3,482,010
-------------
Greece-0.1%
Corporate Debt Obligation-0.1%
Antenna TV, SA
7.25%, 2/15/15(d)
(cost $61,750) 48 59,216
-------------
Ireland-4.4%
Government Obligation-4.4%
Republic of Ireland
5.00%, 4/18/13
(cost $4,924,764) 3,390 4,926,186
-------------
Italy-0.5%
Corporate Debt Obligation-0.5%
Banca Popolare di Bergamo Capital Trust
8.36%, 2/15/11(b)
(cost $307,405) 325 513,080
-------------
Japan-1.0%
Corporate Debt Obligations-1.0%
Mizuho Financial Group Cayman, Ltd
5.79%, 4/15/14(d) US$ 100 103,452
8.38%, 4/27/09 920 1,001,788
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 11
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Total Japanese Securities
(cost $1,076,275) $ 1,105,240
-------------
Kazakhstan-1.2%
Corporate Debt Obligation-1.2%
Kazkommerts International BV
8.50%, 4/16/13(d)
(cost $1,272,556) US$ 1,300 1,340,625
-------------
Luxembourg-0.5%
Corporate Debt Obligations-0.5%
Arcelor Finance SCA
4.63%, 11/07/14 EUR 368 485,728
NOMA Luxembourg SA
9.75%, 7/15/11(d) 94 129,929
-------------
Total Luxembourg Securities
(cost $597,862) 615,657
-------------
Mexico-7.1%
Corporate Debt Obligation-0.4%
Innova S. de R.L.
9.38%, 9/19/13(b) US$ 405 444,487
-------------
Government Obligations-6.7%
Mexican Bonos
8.00%, 12/07/23(b) MXN 10,697 734,014
9.00%, 12/20/12(b) 12,884 1,072,951
United Mexican States
7.50%, 1/14/12(b) US$ 250 277,500
8.00%, 9/24/22(b) 3,206 3,718,960
8.13%, 12/30/19(b) 925 1,083,638
11.38%, 9/15/16(b) 406 586,670
-------------
7,473,733
-------------
Total Mexican Securities
(cost $7,738,916) 7,918,220
-------------
Netherlands-1.8%
Common Stock-0.1%
Versatel Telecom International NV(b)(e) 32,931 74,871
-------------
Government Obligation-1.7%
Kingdom of the Netherlands
3.75%, 7/15/14 EUR 1,453 1,933,931
-------------
Total Dutch Securities
(cost $1,958,460) 2,008,802
-------------
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Norway-0.9%
Government Obligation-0.9%
Kingdom of Norway
5.50%, 5/15/09(b)
(cost $963,437) NOK 5,648 $ 978,249
-------------
Peru-0.1%
Government Obligation-0.1%
Republic of Peru
8.38%, 5/03/16(b)
(cost $113,453) US$ 113 120,910
-------------
Romania-0.5%
Corporate Debt Obligation-0.5%
MobiFon Holdings BV
12.50%, 7/31/10(b)
(cost $491,762) 500 607,500
-------------
Russia-7.3%
Corporate Debt Obligation-0.3%
Aries Vermoegensverwaltungs GmbH
9.60%, 10/25/14(d) 250 317,600
-------------
Government Obligations-7.0%
Russian Federation
5.00%, 3/31/30(c)(d) 450 477,675
5.00%, 3/31/30(c)(d) 4,960 5,265,040
Russian Ministry of Finance
3.00%, 5/14/08(b) 2,195 2,041,350
-------------
7,784,065
-------------
Total Russian Securities
(cost $5,012,824) 8,101,665
-------------
South Africa-5.9%
Corporate Debt Obligations-5.9%
Development Bank of Southern Africa
Zero Coupon, 12/31/27(b) ZAR 50,000 1,197,777
European Bank for Reconstruction
& Development
Zero Coupon, 12/31/29(b) 50,000 1,288,331
International Bank for Reconstruction
& Development
Zero Coupon, 2/17/26(b) 50,000 1,643,136
Zero Coupon, 12/29/28(d) 250,000 2,399,671
-------------
Total South African Securities
(cost $5,327,711) 6,528,915
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 13
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Spain-2.7%
Government Obligation-2.7%
Kingdom of Spain
5.40%, 7/30/11
(cost $3,005,288) EUR 2,065 $ 3,029,375
-------------
Turkey-0.1%
Government Obligations-0.1%
Republic of Turkey
11.50%, 1/23/12(b) US$ 28 33,992
11.88%, 1/15/30(b) 21 27,510
-------------
Total Turkish Securities
(cost $65,077) 61,502
-------------
Ukraine-0.1%
Government Obligations-0.1%
Government of Ukraine
6.88%, 3/04/11(d) 100 104,250
11.00%, 3/15/07(d) 19 20,068
-------------
Total Ukrainian Securities
(cost $119,550) 124,318
-------------
United Kingdom-4.2%
Corporate Debt Obligations-4.1%
Allied Domecq Financial Services Plc.
6.63%, 4/18/11 GBP 72 138,771
British Telecommunications Plc.
8.38%, 12/15/10(b) US$ 75 87,988
HSBC Capital Funding LP
4.61%, 6/27/13(d) 370 354,443
O2 Plc.
6.38%, 1/25/07(b) EUR 410 561,618
Rexam Plc.
6.63%, 3/27/07(b) 410 564,693
Royal & Sun Alliance Insurance
Group Plc.
8.95%, 10/15/29(b) US$ 205 259,495
Royal Bank of Scotland Group Plc.
7.65%, 9/30/31(b) 1,875 2,325,604
Yorkshire Power Finance
7.25%, 8/04/28(b) GBP 145 318,221
-------------
4,610,833
-------------
Preferred Stock-0.1%
Royal Bank of Scotland Group Plc.
6.40%, 9/30/09(b) 4,700 121,025
-------------
Total United Kingdom Securities
(cost $3,907,576) 4,731,858
-------------
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
United States-41.9%
Corporate Debt Obligations-11.3%
AK Steel Corp.
7.88%, 2/15/09(b) US$ 250 $ 229,375
Alabama Power Capital Trust V
5.50%, 10/01/42 50 51,311
Amerada Hess Corp.
7.13%, 3/15/33(b) 450 506,141
Amkor Technology, Inc.
7.75%, 5/15/13(b) 150 117,562
Broder Brothers Co.
11.25%, 10/15/10(b) 595 633,675
Calpine Corp.
8.50%, 7/15/10(d) 335 232,825
Charter Communication Holdings LLC
11.75%, 5/15/11(b)(f) 585 372,937
Continental Airlines, Inc.
6.70%, 6/15/21(b) 87 82,715
7.03%, 6/15/11(b) 423 347,719
Cox Communications, Inc. Class A
5.50%, 10/01/15 115 114,544
Crum & Forster Holdings Corp.
10.38%, 6/15/13(b) 240 260,400
Dex Media East LLC
12.13%, 11/15/12(b) 134 157,617
Dex Media West LLC Series B
9.88%, 8/15/13(b) 244 270,840
DPL Capital Trust II
8.13%, 9/01/31 98 113,275
Ford Motor Co.
6.38%, 2/01/29(b) 38 28,251
7.45%, 7/16/31(b) 250 205,435
Ford Motor Credit Co.
4.95%, 1/15/08(b) 100 94,101
General Motors Acceptance Corp.
6.13%, 1/22/08(b) 300 289,092
6.15%, 4/05/07 150 147,114
7.00%, 2/01/12(b) 207 180,115
General Motors Corp.
7.75%, 3/15/36(b)(f) 121 30,476
8.38%, 7/15/33(b) 283 215,414
Genworth Financial, Inc.
1.60%, 6/20/11(b) JPY 22,000 213,514
Hawaiian Telecom Communications, Inc.
9.75%, 5/01/13(d) US$ 150 149,062
12.50%, 5/01/15(d) 150 148,500
HCA, Inc.
7.58%, 9/15/25(b) 65 65,876
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 15
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
HLI Operating Co., Inc.
10.50%, 6/15/10(b) US$ 130 $ 120,900
Huntsman International LLC
10.13%, 7/01/09(b) 153 158,738
IBM Corp.
4.75%, 11/29/12(b) 700 704,780
Insight Communications Co., Inc.
12.25%, 2/15/11(b)(f) 350 344,750
Insight Midwest LP/Insight Capital, Inc.
9.75%, 10/01/09(b) 500 522,500
IPALCO Enterprises, Inc.
8.38%, 11/14/08(b) 150 161,250
Iridium LLC/Capital Corp. Series B
14.00%, 7/15/05(b)(g) 2,000 325,000
JP Morgan Chase & Co.
5.75%, 1/02/13(b) 900 951,302
Liberty Mutual Group
5.75%, 3/15/14(d) 138 137,799
National Waterworks, Inc. Series B
10.50%, 12/01/12(b) 200 225,500
Nextel Partners, Inc.
12.50%, 11/15/09(b) 341 373,395
Paxson Communications Corp.
12.25%, 1/15/09(b)(f) 265 246,450
Pliant Corp.
13.00%, 6/01/10(b) 395 296,250
Qwest Services Corp.
13.50%, 12/15/10(d) 150 168,750
Rite Aid Corp.
11.25%, 7/01/08(b) 200 211,000
Riviera Holdings Corp.
11.00%, 6/15/10(b) 240 264,000
Safeway, Inc.
6.50%, 3/01/11 23 24,440
SBC Communications, Inc.
6.15%, 9/15/34 150 155,640
Six Flags, Inc.
9.75%, 4/15/13(b) 250 218,750
Sprint Capital Corp.
8.38%, 3/15/12(b) 119 140,920
Telcordia Technologies, Inc.
10.00%, 3/15/13(d) 140 135,100
Time Warner Entertainment Co. LP
8.38%, 3/15/23(b) 175 220,178
Universal City Development Partners
11.75%, 4/01/10(b) 255 288,788
Valero Energy Corp.
6.88%, 4/15/12 120 131,925
WDAC Subsidiary Corp.
8.50%, 12/01/14(d) EUR 71 80,712
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
William Lyon Homes, Inc.
10.75%, 4/01/13(b) US$ 250 $ 263,750
Williams Scotsman, Inc.
9.88%, 6/01/07(b) 500 491,250
-------------
12,621,703
-------------
Bank Loans-11.1%
Alderwoods Group, Inc.
4.54-5.30%, 9/17/09 429 435,335
Allegheny Energy Supply Co. LLC
5.62-5.95%, 2/28/11 357 359,630
American Achievement Corp.
5.23-7.25%, 3/31/11 450 456,379
Brenntag Group
5.88%, 2/28/12 1,000 1,012,292
Dex Media West LLC
4.62-5.05%, 3/09/10 824 834,804
Graham Packaging Co. LP
5.50-5.69%, 9/15/11 499 504,806
Keystone Automotive Operations, Inc.
4.71-5.03%, 10/30/09 415 417,639
LandSource Communities Development LLC
5.50%, 7/31/10 500 505,625
MGM Holdings II, Inc.
5.38%, 3/15/12 1,000 1,000,313
MultiPlan, Inc.
5.85%, 3/31/09 403 404,288
Owens-Illinois Group, Inc.
5.73%, 4/08/08 131 133,836
PanAmSat Corp.
5.31%, 7/01/11 496 499,393
PGT Industries, Inc.
5.93%, 2/28/10 462 467,269
Prestige Brands, Inc.
5.38-7.00%, 4/05/11 495 500,981
Rainbow National Services LLC
5.69%, 3/31/12 500 506,250
Regal Cinemas Corp.
4.84%, 10/19/10 480 486,391
Simmons Co.
5.44-7.25%, 12/19/11 970 983,171
Stewart Enterprises
4.47-4.75%, 11/01/11 975 985,713
Venetian Casino Resort LLC
0.75%, 6/15/11 85 85,684
4.81%, 6/15/11 415 416,706
VWR International, Inc.
5.65%, 4/05/11 458 464,150
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 17
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Western Wireless Corp.
5.87-6.19%, 5/30/11 US$ 439 $ 440,998
WMG Acquisitions Corp.
4.38-4.90%, 3/22/11 495 498,465
-------------
12,400,118
-------------
U.S. Government and Government
Sponsored Agency Obligations-18.9%
Federal National Mortgage Association
15 YR TBA
5.50%, 5/01/20 3,300 3,376,313
Federal National Mortgage Association
30 YR TBA
6.00%, 5/01/34 7,500 7,699,215
6.50%, 5/01/35 3,300 3,430,970
U.S. Treasury Bonds
5.38%, 2/15/31(b) 2,362 2,667,768
U.S. Treasury Notes
2.25%, 2/15/07(b)(h) 1,910 1,865,233
4.00%, 2/15/15(b) 524 515,505
4.25%, 8/15/14(b) 1,065 1,069,493
4.25%, 11/15/14(b) 241 241,791
4.75%, 5/15/14(b) 100 104,242
4.88%, 2/15/12(b) 58 60,934
-------------
21,031,464
-------------
Preferred Stocks-0.6%
Ford Motor Co. Capital Trust II
6.50%, 1/15/32(b) 7,885 307,121
Paxson Communications Corp.
14.25%, 11/15/06(b) 37 273,800
XL Capital, Ltd. Class A
6.50%, 5/15/07(b) 2,325 53,359
-------------
634,280
-------------
Total United States Securities
(cost $47,178,754) 46,687,565
-------------
SHORT-TERM INVESTMENT-5.6%
Repurchase Agreement-5.6%
Deutsche Bank
2.88%, dated 4/29/05,
due 5/02/05 in the amount
of $6,201,488 (cost $6,200,000;
collateralized by $6,330,000
FHLB, 2.86%, due 5/12/05,
value $6,325,033) 6,200 6,200,000
-------------
Total Investments-111.3%
(cost $116,622,380) 124,030,062
Other assets less liabilities-(11.3%) (12,638,647)
-------------
Net Assets-100% $ 111,391,415
=============
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- -------------------------------------------------------------------------------
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination April 30, Appreciation/
(000) Date 2005 (Depreciation)
- --------------------------------------------------------------------------------------------------
Buy Contracts:
Japanese Yen,
settling 6/06/05 167,822 $ 1,572,835 $ 1,608,283 $ 35,448
Mexican Peso,
settling 5/02/05 26,570 2,381,559 2,397,299 15,740
South African Rand,
settling 5/13/05 1,788 285,000 294,115 9,115
Sale Contracts:
British Pound,
settling 5/13/05 318 610,639 607,296 3,343
Canadian Dollar,
settling 6/07/05 2,012 1,643,892 1,601,072 42,820
Euro,
settling 5/20/05-6/15/05 24,980 33,123,833 32,293,874 829,959
Japanese Yen,
settling 6/06/05 116,646 1,116,700 1,117,853 (1,153)
Mexican Peso,
settling 5/02/05-6/02/05 47,821 4,283,382 4,303,156 (19,774)
Norwegian Kroner,
settling 6/01/05 6,550 1,046,394 1,044,015 2,379
South African Rand,
settling 5/13/05 38,564 6,254,382 6,342,051 (87,669)
Swedish Krona,
settling 5/18/05 3,697 515,952 519,764 (3,812)
FINANCIAL FUTURES CONTRACTS SOLD (see Note D)
Number Expiration Original U.S. $ Value at Unrealized
Type Contracts Month Value April 30, 2005 Depreciation
- --------------------------------------------------------------------------------------------------
U.S. Treasury 315 June 2005 $34,556,486 $35,097,891 $(541,405)
Note 10 yr
Futures
INTEREST RATE SWAP TRANSACTIONS (see Note D)
Rate Type
--------------------------
Notional Payments Payments Unrealized
Swap Amount Termination made by received by Appreciation/
Counterparty (000) Date the Fund the Fund (Depreciation)
- --------------------------------------------------------------------------------------------------
Deutsche Banc MXN 46,500 1/12/07 5.10%* 10.35% $ (1,758)
Deutsche Banc MXN 46,500 1/12/07 9.90% 5.10%* 31,566
* Variable rates are based on the Interbank equilibrium interest rate for
Mexican Pesos.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 19
Portfolio of Investments
- -------------------------------------------------------------------------------
(a) Coupon rate adjusts on a predetermined schedule to a rate based on a
specific Index. Stated interest rate was in effect at April 30, 2005.
(b) Positions, or a portion thereof, with an aggregate market value of
$60,391,237 have been segregated to collateralize forward exchange currency
contracts.
(c) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate was in effect at April 30, 2005.
(d) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At April 30, 2005, these securities amounted to $13,246,727 or 11.9% of
net assets.
(e) Non-income producing security.
(f) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective until
final maturity.
(g) Security is in default and is non-income producing.
(h) Position, or portion thereof, with an aggregate market value of $791,015
has been segregated to collateralize margin requirements for the open futures
contracts.
Glossary of Terms:
FHLB - Federal Home Loan Bank
TBA - (To Be Assigned) Securities are purchased on a forward commitment with an
appropriate principal amount (generally +/-1.0%) and no definite maturity date.
The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
CAD - Canadian Dollar
EUR - Euros
GBP - Great British Pound
JPY - Japanese Yen
MXN - Mexican Peso
NOK - Norwegian Kroner
US$ - United States Dollar
ZAR - South African Rand
See notes to financial statements.
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
April 30, 2005 (unaudited)
ASSETS
Investments in securities, at value (cost $116,622,380) $ 124,030,062
Cash 372,621
Foreign cash, at value (cost $43,031) 205,411
Receivable for investment securities sold and foreign
currency contracts 5,463,630
Dividends & interest receivable 1,510,770
Unrealized appreciation of forward exchange
currency contracts 938,804
Receivable for capital stock sold 509,648
Receivable for variation margin on futures contracts 78,749
Unrealized appreciation on interest rate swap contracts 31,566
--------------
Total assets 133,141,261
--------------
LIABILITIES
Payable for investment securities purchased 20,515,420
Payable for capital stock redeemed 694,574
Dividends payable 148,607
Unrealized depreciation of forward exchange
currency contracts 112,408
Distribution fee payable 79,095
Advisory fee payable 47,855
Transfer Agent fee payable 7,931
Unrealized depreciation on swap contracts 1,758
Accrued expenses and other liabilities 142,198
--------------
Total liabilities 21,749,846
--------------
Net Assets $ 111,391,415
==============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 12,832
Additional paid-in capital 145,690,869
Distributions in excess of net investment income (3,159,313)
Accumulated net realized loss on investment
and foreign currency transactions (39,010,729)
Net unrealized appreciation of investments
and foreign currency denominated assets and liabilities 7,857,756
--------------
$ 111,391,415
==============
Calculation of Maximum Offering Price Per Share
Net Asset Value and:
----------------------------- Maximum
Shares Offering Redemption Offering
Class Net Assets Outstanding Price Price Price *
- --------------------------------------------------------------------------------------------------
A $ 25,760,078 2,967,710 -- $8.68 $9.07
B $ 71,075,340 8,187,391 $8.68 -- --
C $ 12,790,102 1,472,886 $8.68 -- --
Advisor $ 1,736,332 200,131 $8.68 $8.68 --
R $ 9,895 1,141 $8.67 $8.67 --
K $ 9,869 1,138 $8.67 $8.67 --
I $ 9,799 1,130 $8.67 $8.67 --
* The maximum offering price per share for Class A shares includes a sales
charge of 4.25%.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 21
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2005 (unaudited)
INVESTMENT INCOME
Interest (net of foreign taxes withheld
of $15,134) $ 3,522,806
Income from dollar rolls 164,276
Dividends (net of foreign taxes withheld
of $188) 32,086 $ 3,719,168
------------
EXPENSES
Advisory fee 302,713
Distribution fee -- Class A 40,753
Distribution fee -- Class B 395,152
Distribution fee -- Class C 67,286
Distribution fee -- Class R 9
Distribution fee -- Class K 4
Custodian 100,410
Transfer agency 94,102
Administration 45,000
Registration 40,981
Audit 37,368
Printing 36,914
Legal 29,495
Directors' fees 11,813
Miscellaneous 4,203
------------
Total expenses 1,206,203
Less: expenses offset arrangement
(see Note B) (257)
------------
Net expenses 1,205,946
------------
Net investment income 2,513,222
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain on:
Investment transactions 2,563,104
Futures contracts 251,565
Swap contracts 9,213
Written options 890
Foreign currency transactions 1,253,103
Net change in unrealized
appreciation/depreciation of:
Investments (4,482,599)
Futures contracts (58,700)
Swap contracts (37,461)
Foreign currency denominated
assets and liabilities 1,488,282
------------
Net gain on investment and foreign
currency transactions 987,397
------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 3,500,619
============
See notes to financial statements.
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
April 30, 2005 October 31,
(unaudited) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 2,513,222 $ 7,956,745
Net realized gain on investment and
foreign currency transactions 4,077,875 1,532,742
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (3,090,478) (1,797,946)
-------------- --------------
Net increase in net assets from
operations 3,500,619 7,691,541
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (656,712) (1,989,480)
Class B (1,636,439) (5,169,553)
Class C (278,823) (906,665)
Advisor Class (36,003) (72,007)
Class R (80) -0-
Class K (84) -0-
Class I (87) -0-
CAPITAL STOCK TRANSACTIONS
Net decrease (18,344,949) (45,824,945)
-------------- --------------
Total decrease (17,452,558) (46,271,109)
NET ASSETS
Beginning of period 128,843,973 175,115,082
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(3,159,313) and $(3,064,307),
respectively) $ 111,391,415 $ 128,843,973
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 23
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2005 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Global Strategic Income Trust, Inc. (the "Fund"), was
incorporated in the State of Maryland on October 25, 1995 as a non-diversified,
open-end management investment company. The Fund offers Class A, Class B, Class
C, Advisor Class, Class R, Class K and Class I shares. Class A shares are sold
with a front-end sales charge of up to 4.25% for purchases not exceeding
$1,000,000. With respect to purchases of $1,000,000 or more, Class A shares
redeemed within one year of purchase may be subject to a contingent deferred
sales charge of 1%. Class B shares are currently sold with a contingent
deferred sales charge which declines from 4% to zero depending on the period of
time the shares are held. Class B shares will automatically convert to Class A
shares eight years after the end of the calendar month of purchase. Class C
shares are subject to a contingent deferred sales charge of 1% on redemptions
made within the first year after purchase. Class R and Class K shares are sold
without an initial or contingent deferred sales charge. Advisor Class and Class
I shares are sold without an initial or contingent deferred sales charge and
are not subject to ongoing distribution expenses. All seven 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
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
call options are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day;
open futures contracts and options thereon are valued using the closing
settlement price or, in the absence of such a price, the most recent quoted bid
price. If there are no quotations available for the day of 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 and foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 25
Notes to Financial Statements
- -------------------------------------------------------------------------------
foreign investment transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains and losses from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a
component of net unrealized appreciation 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. 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, Advisor Class, Class R, Class K and Class I shares. Advisor Class
and Class I shares have no distribution fees.
5. 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 amortizes premiums and
accretes discounts as adjustments to interest income.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
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 .75% of the
Fund's average daily net assets. Effective September 7, 2004, the terms of the
investment
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
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. The Adviser has agreed to waive its fees
and bear certain expenses to the extent necessary to limit total operating
expenses on an annual basis 1.90%, 2.60%, 2.60%, 1.60%, 2.10%, 1.85% and 1.60%
of the daily average net assets for the Class A, Class B, Class C, Advisor
Class, Class R, Class K and Class I shares, respectively. For the six months
ended April 30, 2005, there were no fees waived by the Adviser.
Effective January 1, 2004, through September 6, 2004, in contemplation of the
final agreement with Office of the 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 as discussed above. For a more complete discussion of
the Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the Advisory Agreement, the Fund paid $45,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended April 30, 2005.
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 $38,637 for the six months ended April 30,
2005.
For the six months ended April 30, 2005, the Fund's expenses were reduced by
$257 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 $1,600 from the sale of Class A shares
and received $588, $53,078 and $1,467 in contingent deferred sales charges
imposed upon redemption by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended April 30, 2005.
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 average daily net assets attributable to
the Class A shares, 1% of the average daily net assets attributable to both
Class B and Class C shares, .50% of the Fund's average daily net assets
attributable to Class R shares and .25% of the Fund's average daily net assets
attributable to Class K shares.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 27
Notes to Financial Statements
- -------------------------------------------------------------------------------
There are no distribution and servicing fees on the Class I and Advisor Class
shares. The fees are accrued daily and paid monthly. The Agreement provides
that the Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has advised the Fund
that it has incurred expenses in excess of the distribution costs reimbursed by
the Fund in the amounts of $8,947,486, $1,411,105, $13, and $9 for Class B,
Class C, Class R and Class K 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 period for Class A shares. The Agreement also provides that the
Adviser may use its own resources to finance the distribution of the Fund's
shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended April 30, 2005, were as follows:
Purchases Sales
============== ==============
Investment securities (excluding
U.S. government securities) $ 82,896,708 $ 104,049,188
U.S. government securities 8,985,362 10,319,927
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation (excluding foreign currency
contracts and swap contracts) are as follows:
Gross unrealized appreciation $ 9,487,169
Gross unrealized depreciation (2,079,487)
--------------
Net unrealized appreciation $ 7,407,682
==============
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments and the imperfect correlation between movements in the
price of the future contracts and movements in the price of the securities
hedged or used for cover.
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known
as variation margin and are
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
recorded by the Fund as unrealized gains or losses. Risks may arise from the
potential inability of a counterparty to meet the terms of the contract. When
the contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
time it was closed.
2. 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 is included in net
realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of 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.
3. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 29
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
4. 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 specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net 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.
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 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 April 30, 2005, 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
April 30, 2005.
5. Dollar Rolls
The Fund may enter into dollar rolls. Dollar rolls involve sales by the Fund of
securities for delivery in the current month and the Fund's simultaneously
contracting to repurchase substantially similar (same type and coupon)
securities on a specified future date. During the roll period, the Fund forgoes
principal and interest paid on the securities. The Fund is compensated by the
difference between the current sales price and the lower forward price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. Dollar rolls involve the risk
that the market value of the securities the Fund is obligated to repurchase
under the agreement may decline below the repurchase price. Dollar rolls are
speculative techniques and may be considered to be borrowings by the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 31
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTE E
Capital Stock
There are 21,000,000,000 shares of $0.001 par value capital stock authorized,
divided into seven classes, designated Class A, Class B, Class C, Advisor
Class, Class R, Class K and Class I shares. Each class consists of
3,000,000,000 authorized shares. Transactions in capital stock were as follows:
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
April 30, 2005 October 31, April 30, 2005 October 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 300,743 393,391 $ 2,612,742 $ 3,409,621
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 50,290 165,212 441,185 1,427,219
- -------------------------------------------------------------------------------
Shares converted
from Class B 131,141 302,546 1,146,387 2,599,487
- -------------------------------------------------------------------------------
Shares redeemed (924,244) (1,733,499) (8,098,073) (14,953,806)
- -------------------------------------------------------------------------------
Net decrease (442,070) (872,350) $ (3,897,759) $ (7,517,479)
===============================================================================
Class B
Shares sold 244,953 660,862 $ 2,109,884 $ 5,754,392
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 111,678 382,569 979,934 3,307,819
- -------------------------------------------------------------------------------
Shares converted
to Class A (131,130) (302,466) (1,146,387) (2,599,487)
- -------------------------------------------------------------------------------
Shares redeemed (1,814,124) (4,305,485) (15,870,840) (37,142,352)
- -------------------------------------------------------------------------------
Net decrease (1,588,623) (3,564,520) $(13,927,409) $(30,679,628)
===============================================================================
Class C
Shares sold 74,960 204,616 $ 657,089 $ 1,783,908
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 17,714 58,582 155,450 507,491
- -------------------------------------------------------------------------------
Shares redeemed (251,511) (1,078,222) (2,207,635) (9,339,977)
- -------------------------------------------------------------------------------
Net decrease (158,837) (815,024) $ (1,395,096) $ (7,048,578)
===============================================================================
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
April 30, 2005 October 31, April 30, 2005 October 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Advisor Class
Shares sold 123,479 1,846 $ 1,084,493 $ 16,225
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 3,340 6,760 29,278 58,346
- -------------------------------------------------------------------------------
Shares redeemed (30,951) (75,772) (268,628) (653,831)
- -------------------------------------------------------------------------------
Net increase
(decrease) 95,868 (67,166) $ 845,143 $ (579,260)
===============================================================================
March 1, 2005(a) March 1, 2005(a)
to to
April, 30, 2005 April, 30, 2005
(unaudited) (unaudited)
------------ --------------
Class R
Shares sold 1,141 $ 10,100
- --------------------------------------------------------------
Shares redeemed -0- -0-
- --------------------------------------------------------------
Net increase 1,141 $ 10,100
==============================================================
Class K
Shares sold 1,138 $ 10,072
- --------------------------------------------------------------
Shares redeemed -0- -0-
- --------------------------------------------------------------
Net increase 1,138 $ 10,072
==============================================================
Class I
Shares sold 1,130 $ 10,000
- --------------------------------------------------------------
Shares redeemed -0- -0-
- --------------------------------------------------------------
Net increase 1,130 $ 10,000
==============================================================
(a) Commencement of distributions
NOTE F
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
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 33
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
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 G
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide for short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 2005.
NOTE H
Distributions to Shareholders
The tax character of distributions to be paid for the year ended October 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended October 31, 2004
and October 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 8,137,705 $ 6,599,292
-------------- --------------
Total taxable distributions 8,137,705 6,599,292
Tax return of capital -0- 5,226,955
-------------- --------------
Total distributions paid $ 8,137,705 $ 11,826,247
============== ==============
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
As of October 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (46,940,781)(a)
Unrealized appreciation/(depreciation) 11,905,763(b)
--------------
Total accumulated earnings/(deficit) $ (35,035,018)(c)
==============
(a) On October 31, 2004 the Fund had a net capital loss carryforward of
$43,545,562 of which $19,724,391 expires in the year 2009 and $23,821,171
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 $4,529,180. For
the year ended October 31, 2004, the cumulative deferred loss on straddles was
$3,395,219.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and tax
amortization methods for premium.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/ (deficit) is attributable primarily to dividends payable.
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;
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 35
Notes to Financial Statements
- -------------------------------------------------------------------------------
(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 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.
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
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 issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquires described above.
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
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 37
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
_______________________________________________________________________________
38 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
April 30, 2005 ---------------------------------------------------------------
(unaudited) 2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.63 $8.65 $7.75 $8.43 $9.53 $9.91
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .20 .48(d) .55 .63 .78 .83
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .06 .02 .93 (.67) (.90) (.22)
Net increase (decrease) in
net asset value from
operations .26 .50 1.48 (.04) (.12) .61
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.21) (.52) (.29) (.52) (.71) (.83)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.16)
Tax return of capital -0- -0- (.29) (.12) (.27) -0-
Total dividends and distributions (.21) (.52) (.58) (.64) (.98) (.99)
Net asset value, end of
period $8.68 $8.63 $8.65 $7.75 $8.43 $9.53
TOTAL RETURN
Total investment return based
on net asset value(e) 3.01% 5.89% 19.57% (.50)% (1.50)% 6.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $25,760 $29,465 $37,043 $38,631 $57,667 $52,561
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.45%(f) 1.43% 1.60% 1.53% 1.45% 1.54%
Expenses, before
waivers/reimbursements 1.45%(f) 1.60% 1.60% 1.53% 1.45% 1.54%
Net investment income 4.69%(f) 5.83%(d) 6.50% 7.71% 8.60% 8.32%
Portfolio turnover rate 71% 106% 155% 268% 304% 321%
See footnote summary on page 44.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 39
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
April 30, 2005 ---------------------------------------------------------------
(unaudited) 2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.63 $8.65 $7.74 $8.42 $9.52 $9.90
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .17 .41(d) .48 .57 .71 .76
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .06 .02 .95 (.67) (.90) (.23)
Net increase (decrease) in
net asset value from
operations .23 .43 1.43 (.10) (.19) .53
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.18) (.45) (.27) (.47) (.65) (.76)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.15)
Tax return of capital -0- -0- (.25) (.11) (.26) -0-
Total dividends and
distributions (.18) (.45) (.52) (.58) (.91) (.91)
Net asset value, end of period $8.68 $8.63 $8.65 $7.74 $8.42 $9.52
TOTAL RETURN
Total investment return based
on net asset value(e) 2.66% 5.13% 18.89% (1.23)% (2.24)% 5.38%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $71,075 $84,385 $115,414 $117,529 $156,948 $118,356
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.17%(f) 2.15% 2.31% 2.24% 2.16% 2.27%
Expenses, before
waivers/reimbursements 2.17%(f) 2.32% 2.31% 2.24% 2.16% 2.27%
Net investment income 3.98%(f) 5.12%(d) 5.83% 7.02% 7.85% 7.66%
Portfolio turnover rate 71% 106% 155% 268% 304% 321%
See footnote summary on page 44.
_______________________________________________________________________________
40 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
April 30, 2005 ---------------------------------------------------------------
(unaudited) 2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.64 $8.65 $7.75 $8.43 $9.52 $9.90
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .17 .40(d) .50 .57 .72 .77
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .05 .04 .92 (.67) (.90) (.24)
Net increase (decrease) in
net asset value from
operations .22 .44 1.42 (.10) (.18) .53
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.18) (.45) (.28) (.47) (.65) (.76)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.15)
Tax return of capital -0- -0- (.24) (.11) (.26) -0-
Total dividends and
distributions (.18) (.45) (.52) (.58) (.91) (.91)
Net asset value, end of
period $8.68 $8.64 $8.65 $7.75 $8.43 $9.52
TOTAL RETURN
Total investment return based
on net asset value(e) 2.54% 5.25% 18.74% (1.22)% (2.13)% 5.38%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $12,790 $14,094 $21,175 $20,113 $33,035 $32,345
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.16%(f) 2.14% 2.30% 2.23% 2.15% 2.25%
Expenses, before
waivers/reimbursements 2.16%(f) 2.31% 2.30% 2.23% 2.15% 2.25%
Net investment income 3.98%(f) 5.14%(d) 5.81% 7.00% 7.90% 7.68%
Portfolio turnover rate 71% 106% 155% 268% 304% 321%
See footnote summary on page 44.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 41
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
April 30, 2005 ---------------------------------------------------------------
(unaudited) 2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning
of period $8.63 $8.65 $7.74 $8.43 $9.53 $9.92
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) .21 .47(d) .57 .65 .80 .88
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .06 .05 .95 (.67) (.89) (.25)
Net increase (decrease) in
net asset value from
operations .27 .52 1.52 (.02) (.09) .63
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.22) (.54) (.34) (.54) (.73) (.86)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.16)
Tax return capital -0- -0- (.27) (.13) (.28) -0-
Total dividends and
distributions (.22) (.54) (.61) (.67) (1.01) (1.02)
Net asset value, end of
period $8.68 $8.63 $8.65 $7.74 $8.43 $9.53
TOTAL RETURN
Total investment return based
on net asset value(e) 3.18% 6.21% 20.10% (.31)% (1.19)% 6.33%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,736 $900 $1,483 $1,358 $1,350 $2,658
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.16%(f) 1.13% 1.30% 1.24% 1.13% 1.23%
Expenses, before
waivers/reimbursements 1.16%(f) 1.30% 1.30% 1.24% 1.13% 1.23%
Net investment income 4.96%(f) 6.15%(d) 6.84% 8.08% 8.81% 8.71%
Portfolio turnover rate 71%(f) 106% 155% 268% 304% 321%
See footnote summary on page 44.
_______________________________________________________________________________
42 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- -------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R Class K Class I
----------- ----------- -----------
March 1, March 1, March 1,
2005(g) 2005(g) 2005(g)
to April, 30, to April, 30, to April, 30,
2005 2005 2005
(unaudited) (unaudited) (unaudited)
----------- ----------- -----------
Net asset value, beginning of period $8.85 $8.85 $8.85
INCOME FROM INVESTMENT OPERATIONS
Net investment income(c) .06 .07 .07
Net realized and unrealized loss on
investment and foreign currency
investment transactions (.18) (.19) (.18)
Net decrease in net asset value
from operations (.12) (.12) (.11)
LESS: DIVIDENDS
Dividends from net investment income (.06) (.06) (.07)
Net asset value, end of period $8.67 $8.67 $8.67
TOTAL RETURN
Total investment return based on net
asset value(e) (1.22)% (1.19)% (1.15)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $10 $10 $10
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements(f) 1.71% 1.42% 1.15%
Expenses, before
waivers/reimbursements(f) 1.71% 1.42% 1.15%
Net investment income(f) 4.26% 4.55% 4.80%
Portfolio turnover rate 71% 71% 71%
See footnote summary on page 44.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 43
Financial Highlights
- -------------------------------------------------------------------------------
(a) 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. These interim payments are reflected within
net realized and unrealized gain (loss) on swap contracts, however, prior to
November 1, 2003, these interim payments were reflected within interest
income/expense on the statement of operations. The effect of this change for
the year ended October 31, 2004, was to decrease net investment income per
share by $0.001 for Class A, B, C, and Advisor Class and increase net realized
and unrealized gain (loss) on investment transactions per share by $0.001 for
Class A, B, C, and Advisor Class. Consequently, the ratios of net investment
income to average net assets were decreased by 0.20% for Class A, B, C and
Advisor Class, respectively.
(b) 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 $.03,
decrease net realized and unrealized loss on investments per share by $.03 for
Class A, B, C and Advisor Class, respectively, and decrease the ratio of net
investment income to average net assets from 8.03% to 7.71% for Class A, from
7.34% to 7.02% for Class B, from 7.32% to 7.00% for Class C and from 8.40% to
8.08% for Advisor Class. Per share, ratios and supplemental data for periods
prior to November 1, 2001 have not been restated to reflect this change in
presentation.
(c) Based on average shares outstanding.
(d) Net of waivers/reimbursement by the Adviser.
(e) 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 investment 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.
(f) Annualized.
(g) Commencement of distributions.
_______________________________________________________________________________
44 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Board of Directors
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon, Vice President
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Michael Snyder, 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 & Company
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, Governance and Nominating Committee and
Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Fund's
portfolio are made by the Global and High Yield Investment Team, comprised of
senior Global and High Yield Team members.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 45
Information Regarding the Review and Approval of the Fund's Advisory Agreement
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser at a
meeting held on December14-16, 2004.
In preparation for the meeting, the directors had requested from the Adviser
and evaluated extensive materials, including performance and expense
information for other investment companies with similar investment objectives
derived from data compiled by Lipper Inc. ("Lipper"). Prior to voting, the
directors reviewed the proposed continuance of the Advisory Agreement with
management and with experienced counsel who are independent of the Adviser and
received a memorandum from such counsel discussing the legal standards for
their consideration of the proposed continuance. The directors also discussed
the proposed continuance in three private sessions at which only the directors,
their independent counsel and the Fund's Independent Compliance Officer were
present. In reaching their determinations relating to continuance of the
Advisory Agreement, the directors considered all factors they believed
relevant, including the following:
1. information comparing the performance of the Fund to other investment
companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance, administrative
and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of the Fund
and all investment companies in the AllianceBernstein Fund complex;
4. the costs borne by, and profitability of, the Adviser and its affiliates in
providing services to the Fund and to all investment companies in the
AllianceBernstein Fund complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized as the Fund grows
and whether fee levels reflect any economies of scale for the benefit of
investors;
7. the Adviser's policies and practices regarding allocation of portfolio
transactions of the Fund, including the extent to which the Adviser benefits
from soft dollar arrangements;
_______________________________________________________________________________
46 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
8. information about "revenue sharing" arrangements that the Adviser has
entered into in respect of the Fund;
9. portfolio turnover rates of the Fund;
10. fall-out benefits which the Adviser and its affiliates receive from their
relationships with the Fund;
11. information about fees charged by the Adviser to other clients with
similar investment objectives;
12. the professional experience and qualifications of the Fund's portfolio
management team and other senior personnel of the Adviser; and
13. the terms of the Advisory Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the funds advised by the Adviser, their
overall confidence in the Adviser's integrity and competence they have gained
from that experience and the Adviser's responsiveness to concerns raised by
them in the past, including the Adviser's willingness to consider and implement
organizational and operational changes designed to improve investment results
and the services provided to the AllianceBernstein Funds.
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and each director attributed
different weights to the various factors.
The directors determined that the overall arrangements between the Fund and the
Adviser, as provided in the Advisory Agreement, were fair and reasonable in
light of the services performed, expenses incurred and such other matters as
the directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the directors'
reaching their determinations to approve the continuance of the Advisory
Agreement (including their determinations that the Adviser should continue to
be the investment adviser for the Fund, and that the fees payable to the
Adviser pursuant to the Advisory Agreement are appropriate) were separately
discussed by the directors.
Nature, extent and quality of services provided by the Adviser
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the control of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund,
including making
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 47
purchases and sales of portfolio securities consistent with the Fund's
investment objective and policies. The Adviser also provides the Fund with such
office space, administrative and other services (exclusive of, and in addition
to, any such services provided by any others retained by the Fund) and
executive and other personnel as are necessary for the Fund's operations. The
Adviser pays all of the compensation of directors of the Fund who are
affiliated persons of the Adviser and of the officers of the Fund.
The directors also considered that the Advisory Agreement for the Fund provides
that the Fund will reimburse the Adviser for the cost of certain clerical,
accounting, administrative and other services provided at the Fund's request by
employees of the Adviser or its affiliates. These "at no more than cost"
reimbursements are approved by the directors on a quarterly basis and result in
a higher rate of total compensation from the Fund to the Adviser than the
stated fee rates in the Fund's Advisory Agreement.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided had expanded over time as a result of regulatory and other
developments. The directors noted that, for example, the Adviser is responsible
for maintaining and monitoring its own and, to varying degrees, the Fund's
compliance programs, and these compliance programs have recently been refined
and enhanced in light of new regulatory requirements. The directors considered
the quality of the investment research capabilities of the Adviser and the
other resources it has dedicated to performing services for the Fund. The
quality of administrative and other services, including the Adviser's role in
coordinating the activities of the Fund's other service providers, also were
considered. The directors also considered the Adviser's response to recent
regulatory compliance issues affecting many of the investment companies in the
AllianceBernstein Fund complex. The directors concluded that, overall, they
were satisfied with the nature, extent and quality of services provided to the
Fund under the Advisory Agreement.
Costs of Services Provided and Profitability to the Adviser
The directors reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of the Fund to the Adviser for calendar years 2002
and 2003. The directors also reviewed a pro forma schedule of the revenues and
expenses for calendar 2003 indicating the profitability of the Fund giving
effect to the Adviser's waiver of a portion of its advisory fees for the Fund
effective January1, 2004. The directors reviewed the assumptions and methods of
allocation used by the Adviser in preparing fund-specific profitability data,
and noted the Adviser's representation to them that it believed that the
methods of allocation used in preparing the profitability information were
reasonable and appropriate and that the Adviser had previously discussed with
the directors that there is no generally accepted allocation methodology for
information of this type.
_______________________________________________________________________________
48 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the directors considered the effect of fall-out benefits on the
Adviser's expenses, as well as the "revenue sharing" arrangements the Adviser
has entered into with certain entities that distribute shares of the Fund. The
directors focused on the profitability of the Adviser's relationship with the
Fund before taxes and distribution expenses. The directors recognized that the
Adviser should generally be entitled to earn a reasonable level of profits for
the services it provides to the Fund and, based on their review, concluded that
they were satisfied that the Adviser's level of profitability from its
relationship with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Adviser benefits from soft dollar
arrangements whereby it receives brokerage and research services from many of
the brokers and dealers that execute purchases and sales of securities on
behalf of its clients, including the Fund. While the Fund does not normally
engage in brokerage transactions, the Adviser may benefit from soft dollar
arrangements when the Fund purchases securities in fixed price underwritings.
They noted that the Adviser makes presentations to the directors regarding its
trading practices and brokerage allocation policies, including its policies
with respect to soft dollar arrangements, from time to time and had made a
special presentation to the directors earlier in 2004 on this subject. The
directors noted that the Adviser has represented to them that all of its soft
dollar arrangements are consistent with applicable legal requirements including
the achievement of best execution. At the special presentation, the directors
received and reviewed information concerning the Adviser's soft dollar
arrangements, which included a description of the Adviser's policies and
procedures with respect to allocating portfolio transactions for brokerage and
research services, data on the dollar amount of commissions allocated for
third-party research and brokerage services and for proprietary research and
brokerage services, and a list of firms providing third-party research and
brokerage to the Adviser.
The directors also considered that the Distributor, which is a wholly-owned
subsidiary of the Adviser: receives 12b-1 fees from the Fund in respect of
classes of shares of the Fund that are subject to the Fund's 12b-1 plan;
retains a portion of the 12b-1 fees from the Fund; and receives all or a
portion of the sales charges on sales or redemptions of certain classes of
shares. The directors also noted that certain affiliates of the Adviser
distribute shares of the Fund and receive compensation in that connection and
that a subsidiary of the Adviser provides transfer agency services to the Fund
and receives compensation from the Fund for such services.
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 49
The directors recognized that the Adviser's profitability would be somewhat
lower if it did not receive research for soft dollars or if the Adviser's
affiliates did not receive the other benefits described above. The directors
believe that the Adviser derives reputational and other benefits from its
association with the Fund.
Investment Results
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed information showing performance of the Fund compared to
other funds in the Lipper Multi-Sector Income Average as of October31, 2004
over the year to date ("YTD"), 1-, 3- and 5-year and since-inception periods
(inception January 1996) and compared to the Lehman Brothers Global Aggregate
Bond Index. The directors noted that the Fund's recent investment performance
was poor compared to the Lipper median although its performance for the
since-inception period had been in the first quartile. Based on their review
and their discussion of the reasons for the Fund's recent underperformance with
the Adviser, the directors retained confidence in the Adviser's ability to
continue to advise the Fund and concluded that the Fund's investment
performance was understandable. The directors informed the Adviser that they
planned to closely monitor the Fund's performance.
Advisory Fees and Other Expenses
The directors considered the advisory fee rate paid by the Fund to the Adviser
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund. The directors recognized that it is
difficult to make comparisons of advisory fees because there are variations in
the services that are included in the fees paid by other funds.
The directors were informed by the Adviser that it did not offer its
institutional clients the investment strategy used by the Fund. The directors
reviewed the Adviser's fee schedule for providing other fixed income strategies
to institutional clients and noted that such schedule had much lower
breakpoints than the fee schedule in the Fund's Advisory Agreement. The
directors also noted that the application of such fee schedule to the level of
assets of the Fund would result in a fee rate that would be significantly lower
than that in the Fund's Advisory Agreement. The directors noted that the
Adviser may, in some cases, negotiate lower fee rates than those reviewed by
the directors.
The Adviser reviewed with the directors the significant differences in the
scope of services it provides to institutional clients and to the Fund. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Fund by
_______________________________________________________________________________
50 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
nonaffiliated service providers and is responsible for the compensation of the
Fund's Independent Compliance Officer. The provision of these non-advisory
services involves costs and exposure to liability. The Adviser explained that
these services normally are not provided to non-investment company clients or
to investment company clients when the Adviser acts in a pure sub-advisory
capacity, and that fees charged to the Fund reflect the costs and risks of the
additional obligations. The Adviser also noted that since the Fund is
constantly issuing and redeeming its shares, it is more difficult to manage
than an institutional account, where the assets are relatively stable. In light
of these facts, the directors did not place significant weight on these fee
comparisons.
The directors also considered the total expense ratio of the Fund in comparison
to the fees and expenses of funds within the relevant Lipper category. The
expense ratio of the Fund was based on the Fund's latest fiscal year expense
ratio, adjusted for the new lower advisory fees implemented in January 2004.
The directors recognized that the expense ratio information for the Fund
potentially reflected on the Adviser's provision of services, as the Adviser is
responsible for coordinating services provided to the Fund by others. The
directors noted that the expense ratios of some funds in the Fund's Lipper
category also were lowered by waivers or reimbursements by those funds'
investment advisers, which in some cases were voluntary and perhaps temporary.
The information reviewed by the directors showed that the Fund's at current
size contractual effective fee rate of 50basis points was below both the Lipper
average and the Lipper median. The directors noted that the latest fiscal year
administrative expense reimbursement by the Fund pursuant to the Advisory
Agreement was sevenbasis points. The directors also noted that the Fund's
expense ratio was somewhat above the Lipper median. The directors noted that
the Fund's assets were less than $140 million and that its expense ratio would
be favorably impacted should assets increase, and concluded that the Fund's
expense ratio was acceptable.
Economies of Scale
The directors noted that the advisory fee schedule for the Fund contains
breakpoints so that if assets were to increase over the breakpoint levels, the
fee rates would be reduced on the incremental assets. The directors recognized
that there is no direct relationship between the economies of scale realized by
funds and any realized by the Adviser as assets increase, largely because
economies of scale are realized (if at all) by the Adviser across a variety of
products and services, and not only in respect of a single fund. The directors
do not believe there is a uniform methodology for establishing breakpoints that
give effect to fund-specific services provided by the Adviser and to the
economies of scale that the Adviser may realize in its overall mutual fund
business or those components of it which directly or indirectly affect the
Fund's operations. The directors observed that in the mutual fund industry as a
whole, as well as among funds similar to the Fund,
_______________________________________________________________________________
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 51
there is no uniformity or pattern in the fees and asset levels at which
breakpoints (if any) apply. Depending on the age and size of a particular fund
and its adviser's cost structure, different conclusions can be drawn as to
whether there are economies of scale to be realized at any particular level of
assets, notwithstanding the intuitive conclusion that such economies exist, or
will be realized at some level of total assets. Moreover, because different
advisers have different cost structures and service models, it is difficult to
draw meaningful conclusions from the comparison of a fund's advisory fee
breakpoints with those of comparable funds. The directors also noted that the
advisory agreements for many competitor funds do not have breakpoints at all.
Having taken these factors into account, the directors concluded that the
Fund's breakpoint arrangements established a reasonable basis for realizing
economies of scale.
_______________________________________________________________________________
52 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Portfolio
Global & International
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Growth Fund*
International Research Growth Fund*
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-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. Prior to February 1, 2005, Small/Mid-Cap Value Fund
was named Small Cap Value Fund. Prior to May 16, 2005, International Growth
Fund was named Worldwide Privatization Fund and International Research Growth
Fund was named International Premier Growth Fund. On June 24, 2005, All-Asia
Investment Fund merged into International Research Growth Fund. On July 8,
2005, New Europe Fund will merge into International Research Growth 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 GLOBAL STRATEGIC INCOME TRUST o 53
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] AllianceBernstein (R)
Investment Research and Management
GSIFSR0405
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
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
over financial reporting during the second fiscal quarter of the period that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
11 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Global Strategic Income Trust, Inc.
By: /s/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: June 29, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: June 29, 2005
By: /s/ Mark D. Gersten
---------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 29, 2005