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: 811-08426
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: June 30, 2006
Date of reporting period: December 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein International Growth Fund
Semi-Annual Report
December 31, 2005
SEMI-ANNUAL REPORT
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 publishes
full portfolio holdings for the Fund monthly at www.alliancebernstein.com.
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.
February 23, 2006
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein International Growth Fund (the "Fund") for the semi-annual
reporting period ended December 31, 2005. Prior to May 16, 2005, the Fund was
named AllianceBernstein Worldwide Privatization Fund.
Investment Objective and Policies
This open-end fund seeks long-term capital appreciation. The Fund invests
primarily in an international portfolio of equity securities of companies
located in both developed and emerging countries. The Fund's investments
include companies that are established as a result of privatizations of state
enterprises. The Fund invests, under normal circumstances, in the equity
securities of companies based in at least three countries (and normally
substantially more), none of which may be the United States.
Investment Results
The table on page 4 provides the performance results for the Fund and its
benchmark, the Morgan Stanley Capital International (MSCI) All Country World
(ex-U.S.) Index, along with the MSCI World (ex-U.S.) Index, for the six- and
12-month periods ended December 31, 2005.
For the six-month period ended December 31, 2005, the Fund outperformed its
benchmark principally due to a strong relative overweight position in emerging
markets. Although the Fund's underweight position in Japanese equities
negatively impacted the overall investment result, stock selection in Japan
proved a positive contributor to returns.
Over the 12-month period, the Fund's Class A shares outperformed the benchmark
due to a combination of positive returns from both stock selection and from
asset allocation. Looking first at stock selection, developed market stocks had
an overall constructive impact on the Fund's investment result. Positive
contribution came from the Fund's European holdings being partially offset by a
moderately negative impact from Japanese positions. Emerging market stock
selection was also positive as stocks from both Latin America and Eastern
Europe Middle East and Africa (EMEA) made significant contributions to the
Fund's relative investment return. Looking at asset allocation, the Fund's
relative overweight position in emerging market equities continued to have a
major positive impact on the Fund's relative returns. However, a relative
underweight position in Canadian and Japanese stocks did detract from the
Fund's overall investment results.
Market Review and Investment Strategy
For the year, international equity markets posted impressive performance.
Global economic and corporate-profit growth remained strong while inflation
remained at benign levels despite a steep rise in both energy and commodity
prices. Vigorous expansion in the U.S. economy, combined with continued
strength in Chinese growth, proved the main engines that supported the healthy
global economic outlook. Investors were pleased with
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 1
the prospect of a sustained economic rebound in Japan after a period of erratic
economic growth. Renewed interest in the Japanese equity market resulted in
strong relative performance during the reporting period. The European region
posted relatively slower economic growth and generally witnessed positive,
although relatively subdued, equity market returns.
The emerging markets maintained their leadership relative to the developed
markets. The Latin American and EMEA regions enjoyed particularly strong
relative performance as investors were impressed with their solid macroeconomic
fundamentals and policy; both regions were also beneficiaries of the strength
in commodity prices and general declining interest rate expectations. The
emerging Asian region also boasted strong performance with Korea being a
notably buoyant market following a strong improvement in economic and corporate
earnings trends.
At the sector level, the energy and basic industry sectors performed relatively
strongly given their respective strength in oil and commodity prices. The
capital goods sector also performed well following positive order trends
underpinned by the robust global economy. Sectors that lagged included
utilities, consumer staples, consumer discretionary and health care.
Despite a rising trend in U.S. interest rates, international equity markets
were supported by both global liquidity levels, which remained generally high,
and continued investor appetite for risk. A rise in merger and acquisition
activity also proved a positive catalyst for the equity markets during the
reporting period.
Last May, the Fund was renamed International Growth Fund, and its investable
universe was expanded to include equity securities of companies located in
both developed and emerging countries outside of the privatization universe.
The Fund's overall investment strategy remains intact. During the reporting
period, the Fund continued to emphasize diversification with strong
representation in both developed and emerging markets and in a wide array of
economic sectors.
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (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 Morgan Stanley Capital International (MSCI) World
(ex-U.S.) Index nor the unmanaged MSCI All Country World (ex-U.S.) Index
reflects fees and expenses associated with the active management of a mutual
fund portfolio. The MSCI World (ex-U.S.) Index is a free float-adjusted market
capitalization index that is designed to measure global developed market equity
performance in 22 developed market countries, excluding the U.S. The MSCI All
Country World (ex-U.S.) Index is a free float-adjusted market capitalization
index that is designed to measure equity market performance in 48 global
developed and emerging markets, excluding the U.S. Investors cannot invest
directly in indices, and their results are not indicative of the performance
for any specific investment, including the Fund.
A Word About Risk
Substantially all of the Fund's assets will be invested in foreign securities
which may magnify fluctuations due to changes in foreign exchange rates and the
possibility of substantial volatility due to political and economic
uncertainties in foreign countries. The Fund may invest in securities of
emerging market nations. These investments have additional risks, such as
illiquid or thinly traded markets, company management risk, heightened
political instability and currency volatility. Accounting standards and market
regulations in emerging market nations are not the same as those in the U.S.
While the Fund invests principally in common stocks and other equity
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)
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK -------------------------
PERIODS ENDED DECEMBER 31, 2005 6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein International Growth Fund
Class A 17.21% 19.83%
- -------------------------------------------------------------------------------
Class B 16.80% 18.95%
- -------------------------------------------------------------------------------
Class C 16.88% 19.03%
- -------------------------------------------------------------------------------
Advisor Class 17.41% 20.19%
- -------------------------------------------------------------------------------
Class R** 17.15% 14.15%*
- -------------------------------------------------------------------------------
Class K** 17.28% 14.37%*
- -------------------------------------------------------------------------------
Class I** 17.40% 14.56%*
- -------------------------------------------------------------------------------
MSCI All Country World (ex-U.S.) Index 16.61% 16.62%
- -------------------------------------------------------------------------------
MSCI World (ex-U.S.) Index 15.29% 14.47%
- -------------------------------------------------------------------------------
* Since Inception. (See inception dates below.)
** 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)
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 19.83% 14.70%
5 Year 10.52% 9.56%
10 Year 11.32% 10.84%
Class B Shares
1 Year 18.95% 14.95%
5 Year 9.68% 9.68%
10 Year(a) 10.67% 10.67%
Class C Shares
1 Year 19.03% 18.03%
5 Year 9.72% 9.72%
10 Year 10.51% 10.51%
Advisor Class Shares
1 Year 20.19%
5 Year 10.88%
Since Inception* 10.84%
Class R Shares+
Since Inception* 14.15%
Class K Shares+
Since Inception* 14.37%
Class I Shares+
Since Inception* 14.56%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2005)
- --------------------------------------------------------------
Class A Shares
1 Year 14.70%
5 Year 9.56%
10 Year 10.84%
Class B Shares
1 Year 14.95%
5 Year 9.68%
10 Year(a) 10.67%
Class C Shares
1 Year 18.03%
5 Year 9.72%
10 Year 10.51%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception dates: 10/1/96 for Advisor Class shares; 3/1/05 for Class R, Class
K and Class I shares.
+ Please note that this is a new share class offering for investors purchasing
shares through institutional pension plans. The inception dates for these share
classes are listed above.
See Historical Performance disclosures on page 3.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The 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
July 1, 2005 December 31, 2005 During Period*
------------------------------- ------------------------------- ---------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
----------- ----------------- ----------- ----------------- ----------- -------------
Class A $1,000 $1,000 $1,172.05 $1,017.80 $ 8.05 $ 7.48
- ---------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,167.99 $1,014.01 $12.13 $11.27
- ---------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,168.77 $1,014.17 $11.97 $11.12
- ---------------------------------------------------------------------------------------------------------------
Advisor
Class $1,000 $1,000 $1,174.05 $1,019.26 $ 6.47 $ 6.01
- ---------------------------------------------------------------------------------------------------------------
Class R $1,000 $1,000 $1,171.47 $1,016.89 $ 9.03 $ 8.39
- ---------------------------------------------------------------------------------------------------------------
Class K $1,000 $1,000 $1,172.82 $1,017.85 $ 8.00 $ 7.43
- ---------------------------------------------------------------------------------------------------------------
Class I $1,000 $1,000 $1,173.97 $1,019.51 $ 6.19 $ 5.75
- ---------------------------------------------------------------------------------------------------------------
* Expenses are equal to the classes' annualized expense ratios of 1.47%,
2.22%, 2.19%, 1.18%, 1.65%, 1.46% and 1.13%, respectively, multiplied by the
average account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
** Assumes 5% return before expenses.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
PORTFOLIO SUMMARY
December 31, 2005 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $716.2
SECTOR BREAKDOWN*
25.1% Finance
13.8% Consumer Services
10.3% Utilities
9.9% Energy
8.2% Technology
6.0% Consumer Staples [PIE CHART OMITTED]
5.2% Health Care
4.9% Basic Industry
4.3% Consumer Manufacturing
3.1% Transportation
2.1% Aerospace & Defense
0.8% Capital Goods
6.3% Short-Term
COUNTRY BREAKDOWN*
13.5% Japan
10.2% France
10.0% United Kingdom
5.2% Brazil
3.9% China
3.7% South Korea
3.7% Switzerland
3.7% Spain
3.6% Russia [PIE CHART OMITTED]
3.4% Italy
3.2% Taiwan
3.1% Mexico
3.0% South Africa
2.6% Germany
2.3% Turkey
2.0% Netherlands
16.6% Other
6.3% Short-Term
* All data are as of December 31, 2005. The Fund's sector and country
breakdowns are expressed as a percentage of total investments and may vary over
time. "Other" country weightings represent less than 2.0% weightings in the
following countries: Australia, Austria, Egypt, Finland, Greece, Hong Kong,
Hungary, India, Indonesia, Ireland, Israel, Luxembourg, Malaysia, Norway, Peru,
Poland, Singapore, Thailand and Trinidad & Tobago.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 7
TEN LARGEST HOLDINGS
December 31, 2005 (unaudited)
Percent of
Company U.S. $ Value Net Assets
_______________________________________________________________________________
Kookmin Bank (common stock & ADR) $ 19,910,322 2.8%
- -------------------------------------------------------------------------------
Nomura Holdings, Inc. 16,260,254 2.3
- -------------------------------------------------------------------------------
Mitsubishi Tokyo Financial Group, Inc. 15,456,146 2.2
- -------------------------------------------------------------------------------
BAE Systems Plc. 15,250,003 2.1
- -------------------------------------------------------------------------------
America Movil, SA de CV Series L 13,249,455 1.8
- -------------------------------------------------------------------------------
ING Groep NV 12,788,182 1.8
- -------------------------------------------------------------------------------
East Japan Railway Co. 12,342,437 1.7
- -------------------------------------------------------------------------------
Petroleo Brasileiro, SA (ADR) 12,030,753 1.7
- -------------------------------------------------------------------------------
ENI SpA 10,840,862 1.5
- -------------------------------------------------------------------------------
Banco Bilbao Vizcaya Argentaria, SA 10,784,215 1.5
- -------------------------------------------------------------------------------
$138,912,629 19.4%
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 2005 (unaudited)
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-93.4%
Finance-25.1%
Banking - Money Center-10.0%
Banco Bilbao Vizcaya Argentaria, SA 604,025 $ 10,784,215
Bank Hapoalim, Ltd. 1,440,300 6,643,110
BNP Paribas, SA 118,813 9,598,036
DBS Group Holdings, Ltd. 208,535 2,066,085
ICICI Bank, Ltd. 160,569 2,079,226
ICICI Bank, Ltd. (ADR) 3,300 95,040
Kookmin Bank(a) 131,451 9,907,027
Kookmin Bank (ADR) 133,895 10,003,295
Mitsubishi Tokyo Financial Group, Inc. 1,135 15,456,146
OTP Bank Rt. 159,166 5,203,244
-------------
71,835,424
-------------
Banking - Regional-5.0%
Allied Irish Banks Plc. 311,832 6,692,937
China Construction Bank Cl. H(a) 23,352,000 8,056,412
Deutsche Postbank AG 45,112 2,616,997
DNB NOR ASA 311,444 3,315,714
Grupo Financiero Banorte, SA de CV Series O 735,108 1,522,415
Siam Commercial Bank Public Co., Ltd. 2,407,200 3,051,174
Turkiye Is Bankasi Series C 1,164,264 10,019,222
Turkiye Vakiflar Bankasi T.A.O.(a) 125,500 664,439
-------------
35,939,310
-------------
Brokerage & Money Management-2.3%
Nomura Holdings, Inc. 844,700 16,260,254
-------------
Insurance-4.0%
Cathay Financial Holding Co., Ltd. 977,000 1,766,416
GDR(b) 217,730 3,925,672
ING Groep NV 368,640 12,788,182
Prudential Plc. 578,073 5,475,432
Swiss Re 61,362 4,483,949
-------------
28,439,651
-------------
Real Estate-0.4%
Urbi, Desarollos Urbanos, SA de CV(a) 422,800 2,922,718
-------------
Miscellaneous-3.4%
Aeon Credit Service Co., Ltd. 36,700 3,472,787
FirstRand, Ltd. 2,508,391 7,332,391
Industrial Development Bank of India, Ltd. 1,494,240 3,235,665
Investimentos Itau, SA pfd(a) 3,160,598 10,002,320
-------------
24,043,163
-------------
179,440,520
-------------
Consumer Services-13.7%
Advertising-0.6%
WPP Group Plc. 388,161 4,199,388
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 9
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Airlines-0.4%
B.W.I.A. International Airways, Ltd.(a)(c) 2,727,272 $ 3
Singapore Airlines, Ltd. 341,000 2,535,929
-------------
2,535,932
-------------
Broadcasting & Cable-1.5%
Grupo Televisa, SA (ADR) 52,700 4,242,350
SES Global 385,658 6,756,798
-------------
10,999,148
-------------
Cellular Communications-5.4%
America Movil, SA de CV Series L 452,818 13,249,455
Mobile TeleSystems (ADR) 39,900 1,396,500
NTT DoCoMo, Inc. 2,697 4,107,285
O2 Plc. 2,087,165 7,097,547
Orascom Telecom Holding, SAE (GDR)(b) 35,176 1,881,916
Turkcell Iletisim Hizmetleri, AS 925,513 5,583,437
Vodafone Group Plc. 2,648,204 5,698,939
-------------
39,015,079
-------------
Entertainment & Leisure-2.0%
Greek Organisation of Football Prognostics, SA 271,853 9,373,015
NAMCO BANDAI Holdings, Inc.(a) 320,400 4,683,678
-------------
14,056,693
-------------
Printing & Publishing-0.6%
Naspers, Ltd. Cl. N 263,760 4,677,733
-------------
Resturants & Lodging-1.1%
Accor, SA 140,255 7,712,808
-------------
Retail - General Merchandise-1.6%
Luxottica Group SpA 206,408 5,244,250
Next Plc. 243,000 6,399,950
-------------
11,644,200
-------------
Miscellaneous-0.5%
Capita Group Plc. 476,089 3,414,055
-------------
98,255,036
-------------
Utilities-10.3%
Electric & Gas Utility-3.4%
Centrica Plc. 922,596 4,042,285
CPFL Energia SA (ADR) 80,000 2,788,000
Electric Power Development Co., Ltd. 110,100 3,780,348
Electricite de France(a) 86,267 3,266,165
Gaz de France(a) 50,784 1,484,285
National Grid Plc. 644,611 6,302,306
Red Electrica de Espana 97,227 3,014,205
-------------
24,677,594
-------------
Telephone Utility-5.6%
China Telecom Corp., Ltd. Cl. H 14,448,000 5,297,218
Deutsche Telekom AG(a) 184,879 3,073,620
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Egyptian Co. for Mobile Services 108,169 $ 3,779,200
France Telecom, SA 303,247 7,534,306
KT Freetel Co., Ltd.(a) 108,670 2,629,480
MTN Group, Ltd. 534,097 5,245,098
PT Telekomunikasi Indonesia 5,592,000 3,335,841
Singapore Telecommunications, Ltd. 2,194,000 3,435,659
Telekom Malaysia Berhad 1,249,900 3,159,127
Uralsvyasinform (ADR) 356,200 2,586,012
-------------
40,075,561
-------------
Miscellaneous-1.3%
Veolia Environnement 200,363 9,062,267
-------------
73,815,422
-------------
Energy-9.8%
International-7.7%
BP Plc. 406,430 4,351,792
China Petroleum and Chemical Corp.
(Sinopec) Cl. H 11,302,000 5,631,869
ENI SpA 387,970 10,840,862
Lukoil (ADR) 72,533 4,301,207
Norsk Hydro ASA 75,764 7,795,806
Petroleo Brasileiro, SA (ADR)(a) 186,900 12,030,753
Total, SA 39,550 9,973,524
-------------
54,925,813
-------------
Oil Service-2.1%
Fortum OYJ(a) 198,636 3,724,546
Hindustan Petroleum Corp., Ltd.(a) 375,668 2,741,525
Polski Koncern Naftowy Orlen, SA 195,260 3,772,422
PTT Public Co., Ltd. 953,900 5,254,879
-------------
15,493,372
-------------
70,419,185
-------------
Technology-8.2%
Communication Equipment-0.9%
AO VimpelCom (ADR)(a) 149,400 6,607,962
-------------
Communication Services-0.4%
AFK Sistema (GDR)(b) 125,908 3,034,383
-------------
Computer Services-0.4%
Indra Sistemas, SA 154,582 3,022,660
-------------
Electronic Components-0.6%
LG Philips LCD Co., Ltd. (ADR)(a) 191,900 4,118,174
-------------
Internet Infrastructure-1.2%
Fastweb(a) 178,955 8,177,368
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 11
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Semiconductor Components-1.9%
Advanced Semiconductor Engineering, Inc. 3,506,945 $ 3,203,850
Taiwan Semiconductor Manufacturing
Co., Ltd. 3,438,144 6,550,892
Taiwan Semiconductor Manufacturing
Co., Ltd. (ADR) 341,139 3,380,687
-------------
13,135,429
-------------
Software-1.6%
SAP AG(a) 25,371 4,572,100
TietoEnator OYJ(a) 155,616 5,687,334
TomTom NV(a) 40,154 1,378,958
-------------
11,638,392
-------------
Miscellaneous-1.2%
Hoya Corp. 114,600 4,119,155
Tokyo Electron, Ltd. 72,300 4,541,379
-------------
8,660,534
-------------
58,394,902
-------------
Consumer Staples-6.0%
Beverages-0.8%
Pernod Ricard, SA 34,920 6,100,928
-------------
Food-1.4%
Nestle, SA 32,605 9,737,113
-------------
Retail - Food & Drug-1.0%
Tesco Plc. 1,233,985 7,033,735
-------------
Tobacco-2.3%
Altadis, SA 168,388 7,632,010
Japan Tobacco, Inc. 591 8,641,119
-------------
16,273,129
-------------
Miscellaneous-0.5%
Yue Yuen Industrial (Holdings), Ltd. 1,364,000 3,792,457
-------------
42,937,362
-------------
Health Care-5.2%
Drugs-4.6%
CSL, Ltd. 240,198 7,439,978
Gedeon Richter Rt. 4,919 884,260
Novartis AG 155,694 8,166,148
Roche Holding AG 26,005 3,899,194
Sanofi-Aventis 93,551 8,190,179
Shionogi & Co., Ltd. 334,000 4,695,668
-------------
33,275,427
-------------
Medical Services-0.6%
Corporacion Dermoestetica(a) 160,596 1,688,503
Rhoen-Klinikum AG 67,074 2,562,859
-------------
4,251,362
-------------
37,526,789
-------------
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Basic Industry-4.8%
Mining & Metals-4.8%
AngloGold Ashanti, Ltd. (ADR) 87,762 $ 4,329,299
China Shenhua Energy Co., Ltd. Cl. H(a) 7,718,000 8,500,834
China Steel Corp. 5,307,000 4,034,639
Companhia Vale do Rio Doce (ADR) 101,000 4,155,140
Sponsored ADR 166,700 6,042,875
Mechel Steel Group OAO (ADR) 91,400 2,209,138
MMC Norilsk Nickel (ADR) 41,638 3,695,372
Novolipetsk Steel (GDR) W/I(a)(b) 116,900 1,671,670
-------------
34,638,967
-------------
Consumer Manufacturing-4.3%
Auto & Related-2.0%
Tata Motors, Ltd. 312,485 4,533,222
Toyota Motor Corp. 180,900 9,450,959
-------------
13,984,181
-------------
Building & Related-2.3%
CRH Plc. 220,657 6,482,149
Vinci, SA 119,133 10,261,084
-------------
16,743,233
-------------
30,727,414
-------------
Transportation-3.1%
Railroad-2.0%
All America Latina Logistica (GDR)(b) 46,500 1,986,029
East Japan Railway Co. 1,798 12,342,437
-------------
14,328,466
-------------
Shipping-0.3%
Associated British Ports Holdings Plc. 184,798 1,865,892
-------------
Miscellaneous-0.8%
Fraport AG 109,607 5,827,248
-------------
22,021,606
-------------
Aerospace & Defense-2.1%
Aerospace-2.1%
BAE Systems Plc. 2,319,977 15,250,003
-------------
Capital Goods-0.8%
Electrical Equipment-0.7%
Yamada Denki Co., Ltd. 38,900 4,862,940
-------------
Engineering & Construction-0.1%
Exsa, SA(c) 3,527,099 1,031,768
-------------
5,894,708
-------------
Total Common & Preferred Stocks
(cost $509,680,407) 669,321,914
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 13
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-6.3%
Time Deposit-6.3%
BNP
3.95%, 1/03/06
(cost $45,000,000) $45,000 $ 45,000,000
-------------
Total Investments-99.7%
(cost $554,680,407) 714,321,914
Other assets less liabilities-0.3% 1,885,063
-------------
Net Assets-100% $ 716,206,977
=============
(a) Non-income producing security.
(b) Security is 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 December 31, 2005, the aggregate market value of these securities
amounted to $12,499,670 or 1.7% of net assets.
(c) Illiquid security, valued at fair value (see Note A).
Glossary of terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
W/I - When Issued
See notes to financial statements.
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
STATEMENT OF ASSETS & LIABILITIES
December 31, 2005 (unaudited)
ASSETS
Investments in securities, at value (cost $554,680,407) $ 714,321,914
Cash 449,578
Foreign cash, at value (cost $3,635,231) 3,644,714
Receivable for capital stock sold 9,686,929
Receivable for investment securities sold and foreign
currency contracts 6,848,230
Dividends and interest receivable 859,745
-------------
Total assets 735,811,110
-------------
LIABILITIES
Payable for investment securities purchased 17,096,596
Payable for capital stock redeemed 1,305,470
Advisory fee payable 429,613
Distribution fee payable 250,399
Payable for India Cap Gains tax 77,773
Transfer Agent fee payable 24,908
Accrued expenses 419,374
-------------
Total liabilities 19,604,133
-------------
Net Assets $ 716,206,977
=============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 45,894
Additional paid-in capital 551,862,346
Accumulated net investment loss (110,312)
Accumulated net realized gain on investment and foreign
currency transactions 4,829,849
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 159,579,200
-------------
$ 716,206,977
=============
CALCULATION OF MAXIMUM OFFERING PRICE PER SHARE
Net Asset Value and:
---------------------------
Shares Offering Redemption
Class Net Assets Outstanding Price Price
- -------------------------------------------------------------------------------
A $524,550,195 33,067,609 $16.56* $15.86
- -------------------------------------------------------------------------------
B $ 83,444,047 5,670,643 $14.72 --
- -------------------------------------------------------------------------------
C $ 71,897,768 4,881,522 $14.73 --
- -------------------------------------------------------------------------------
Advisor $ 35,131,585 2,199,283 $15.97 $15.97
- -------------------------------------------------------------------------------
R $ 1,160,720 73,202 $15.86 $15.86
- -------------------------------------------------------------------------------
K $ 11,388 717 $15.88 $15.88
- -------------------------------------------------------------------------------
I $ 11,274 710.227 $15.87 $15.87
- -------------------------------------------------------------------------------
* Represents the maximum offering price per share which includes a sales
charge of 4.25%.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 15
STATEMENT OF OPERATIONS
Six Months Ended December 31, 2005 (unaudited)
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $495,059) $ 4,330,222
Interest 589,655 $ 4,919,877
------------
EXPENSES
Advisory fee 2,007,880
Distribution fee--Class A 597,645
Distribution fee--Class B 373,881
Distribution fee--Class C 222,080
Distribution fee--Class R 1,406
Distribution fee--Class K 14
Transfer agency 461,351
Printing 335,368
Custodian 292,055
Registration 58,671
Audit 42,223
Administrative 42,154
Legal 35,083
Directors' fees 12,415
Miscellaneous 18,296
------------
Total expenses 4,500,522
Less: expense offset arrangement
(see Note B) (8,979)
------------
Net expenses 4,491,543
------------
Net investment income 428,334
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 14,401,543
Foreign currency transactions (566,888)
Net change in unrealized
appreciation/depreciation of:
Investments 68,288,391
Foreign currency denominated assets
and liabilities (28,149)
------------
Net gain on investments 82,094,897
------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 82,523,231
============
See notes to financial statements.
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
December 31, 2005 June 30,
(unaudited) 2005
============== ==============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 428,334 $ 3,313,731
Net realized gain on investments and
foreign currency transactions 13,834,655 26,315,172
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities 68,260,242 35,650,144
-------------- --------------
Net increase in net assets from
operations 82,523,231 65,279,047
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (2,646,195) (710,916)
Class B (59,506) -0-
Class C (41,448) -0-
Advisor Class (204,829) (19,817)
Class R (4,496) -0-
Class K (67) -0-
Class I (91) -0-
Net realized gain on investments and
foreign currency transactions
Class A (3,489,438) -0-
Class B (649,198) -0-
Class C (452,161) -0-
Advisor Class (198,221) -0-
Class R (6,499) -0-
Class K (86) -0-
Class I (85) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 226,359,396 71,848,409
-------------- --------------
Total increase 301,130,307 136,396,723
NET ASSETS
Beginning of period 415,076,670 278,679,947
-------------- --------------
End of period (including accumulated net
investment income (loss) of $(110,312)
and $2,417,986, respectively) $ 716,206,977 $ 415,076,670
============== ==============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 17
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein International Growth Fund, Inc. (the "Fund"), organized as a
Maryland corporation on March 16, 1994, is registered under the Investment
Company Act of 1940 as an 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 an initial sales charge of up to 4.25% for
purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or
more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are 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
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at
their current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
asked prices are quoted on such day, then the security is valued in good faith
at fair value in accordance with the Pricing Policies. Securities listed on
more than one exchange are valued by reference to the principal exchange on
which the securities are traded; securities not listed on an exchange but
traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance
with the NASDAQ Official Closing Price; listed put or call options are valued
at the last sale price. If there has been no sale on that day, such securities
will be valued at the closing bid prices on that day; open futures contracts
and options thereon are valued using the closing settlement price or, in the
absence of such a price, the most recent quoted bid price. If there are no
quotations available for the day of valuations, the last available closing
settlement price is used; securities traded in the over-the-counter market,
("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, the Pricing
Policies provide that the Adviser may establish procedures whereby changes in
market yields or spreads are used to adjust, on a daily basis, a recently
obtained quoted price on a security; and OTC and other derivatives are valued
on the basis of a quoted bid price or spread from a major broker/dealer in such
security.
Securities for which market quotations are not readily available (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. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
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
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 19
rates of exchange prevailing when such securities were acquired or sold. Income
and expenses are translated at rates of exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of 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 provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Fund amortizes premiums and accretes discounts on short-term securities as
adjustments to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except for class
specific expenses which are allocated to the respective class.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with U.S. generally accepted accounting principles. To the extent
these differences are permanent, such amounts are reclassified within the
capital
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
accounts based on their federal tax basis treatment; temporary differences, do
not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .75% of the first $2.5 billion, .65% of
the next $2.5 billion and .60% in excess of $5 billion, of the Fund's average
daily net assets. Prior to September 7, 2004, the Fund paid the Adviser an
advisory fee at an annual rate of 1% of the Fund's average daily net assets.
The fee is accrued daily and paid monthly. Effective May 16, 2005, the Adviser
voluntarily agreed to waive its fees and bear certain expenses to the extent
necessary to limit total operating expenses on an annual basis 1.65%, 2.35%,
2.35%, 1.35%, 1.85%, 1.60% and 1.35% 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 December 31, 2005, there were no fees
waived by the Adviser.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above. 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 $42,154 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended December 31, 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. AGIS may make payments to intermediaries that provide omnibus account
services, sub-accounting services and/or networking services. Such compensation
retained by AGIS amounted to $247,727 for the six months ended December 31,
2005.
For the six months ended December 31, 2005, the Fund's expenses were reduced by
$8,979 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 $45,471 from the sale of Class A shares and received
$12,390, $19,781 and $8,008 in contingent deferred sales charges imposed upon
redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended December 31, 2005.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 21
Brokerage commissions paid on investment transactions for the six months ended
December 31, 2005, amounted to $714,580, none of which was paid to Sanford C.
Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to the 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. 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 incurred expenses in excess of the distribution
costs reimbursed by the Fund in the amounts of $6,504,603, $1,764,537, $1,045
and $0 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 year for Class A shares. The Agreement also provides that
the Adviser may use its own resources to finance the distribution of the Fund's
shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended December 31, 2005, were as follows:
Purchases Sales
============== ==============
Investment securities (excluding
U.S. government securities) $ 303,918,459 $ 107,274,809
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Gross unrealized appreciation $ 167,318,994
Gross unrealized depreciation (7,677,487)
--------------
Net unrealized appreciation $ 159,641,507
==============
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
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 and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gains or losses on foreign
currency transactions. Fluctuations in the value of open forward exchange
currency contracts are recorded for financial reporting purposes as net
unrealized appreciation or depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or liquid assets in a separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges. Risks may arise from
the potential inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
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 Ended
December 31, Year Ended December 31, Year Ended
2005 June 30, 2005 June 30,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class A
Shares sold 12,106,008 8,262,250 $183,527,705 $108,515,211
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 336,352 44,174 5,099,103 553,504
- -------------------------------------------------------------------------------
Shares converted
from Class B 412,527 406,515 6,221,083 5,318,458
- -------------------------------------------------------------------------------
Shares redeemed (2,389,655) (4,315,554) (35,950,025) (54,795,535)
- -------------------------------------------------------------------------------
Net increase 10,465,232 4,397,385 $158,897,866 $ 59,591,638
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 23
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
December 31, Year Ended December 31, Year Ended
2005 June 30, 2005 June 30,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class B
Shares sold 1,410,722 1,594,051 $ 19,752,599 $ 19,216,852
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 42,548 -0- 599,073 -0-
- -------------------------------------------------------------------------------
Shares converted
to Class A (445,456) (438,249) (6,221,083) (5,318,458)
- -------------------------------------------------------------------------------
Shares redeemed (575,233) (1,406,590) (7,981,497) (16,594,744)
- -------------------------------------------------------------------------------
Net increase
(decrease) 432,581 (250,788) $ 6,149,092 $ (2,696,350)
===============================================================================
Class C
Shares sold 2,849,713 1,202,637 $ 40,225,451 $ 14,721,745
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 24,920 -0- 351,158 -0-
- -------------------------------------------------------------------------------
Shares redeemed (347,327) (390,334) (4,756,619) (4,594,446)
- -------------------------------------------------------------------------------
Net increase 2,527,306 812,303 $ 35,819,990 $ 10,127,299
===============================================================================
Advisor Class
Shares sold 1,667,350 425,903 $ 25,573,930 $ 5,657,003
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 11,693 894 178,439 11,262
- -------------------------------------------------------------------------------
Shares redeemed (87,772) (69,852) (1,356,704) (872,643)
- -------------------------------------------------------------------------------
Net increase 1,591,271 356,945 $ 24,395,665 $ 4,795,622
===============================================================================
Six Months Six Months
Ended March 1, Ended March 1,
December 31, 2005(a) December 31, 2005(a)
2005 to June 30, 2005 to June 30,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class R
Shares sold 102,842 717 $ 1,550,113 $ 10,100
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 722 -0- 10,936 -0-
- -------------------------------------------------------------------------------
Shares redeemed (31,079) -0- (464,266) -0-
- -------------------------------------------------------------------------------
Net increase 72,485 717 $ 1,096,783 $ 10,100
===============================================================================
Class K
Shares sold -0- 717 $ -0- $ 10,100
- -------------------------------------------------------------------------------
Shares redeemed -0- -0- -0- -0-
- -------------------------------------------------------------------------------
Net increase -0- 717 $ -0- $ 10,100
===============================================================================
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
December 31, Year Ended December 31, Year Ended
2005 June 30, 2005 June 30,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class I
Shares sold -0- 710 $ -0- $ 10,000
- -------------------------------------------------------------------------------
Shares redeemed -0- -0- -0- -0-
- -------------------------------------------------------------------------------
Net increase -0- 710 $ -0- $ 10,000
===============================================================================
(a) Commencement of distributions
NOTE F
Risks Involved inInvesting in the Fund
Concentration of Risk--Investing in securities of foreign companies 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 and their markets may be less liquid and their prices more volatile
than those of comparable U.S. companies.
The Fund's investments include securities issued by enterprises that are
undergoing, or that have undergone, privatization. Privatization is a process
through which the ownership and control of companies or assets in whole or in
part are transferred from the public sector to the private sector. Through
privatization a government or state divests or transfers all or a portion of
its interest in a state enterprise to some form of private ownership. The Fund
is susceptible to economic factors adversely affecting the economics of these
countries. In certain jurisdictions, the ability of foreign entities, such as
the Fund, to participate in privatizations may be limited by local law, or the
price or terms on which the Fund may be able to participate may be less
advatageous than for local investors. There can be no assurance that proposed
privatizations will be successful or that governments will not re-nationalize
enterprises that have been privatized. Furthermore, large blocks of the stock
of certain of these enterprises may be held by a small group of stockholders,
after the initial equity offerings by those enterprises. The sale of some
portion or all of those blocks could have an adverse effect on the price of the
stock of any such enterprise. In addition, these securities created through
privatization may be less liquid and subject to greater volatility than
securities of more developed countries.
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.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 25
NOTE G
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the facility during the six months ended December 31, 2005.
NOTE H
Distributions to Shareholders
The tax character of distributions to be paid for the fiscal year ending June
30, 2006 will be determined at the end of the current fiscal year. The tax
character of distributions paid for the year ending June 30, 2005 and June 30,
2004 were as follows:
June 30, June 30,
2005 2004
============== ==============
Distributions paid from:
Ordinary income $ 730,733 $ 714,432
-------------- --------------
Total taxable distributions $ 730,733 $ 714,432
-------------- --------------
Total distributions paid $ 730,733 $ 714,432
============== ==============
As of June 30, 2005, the components of accumulated earning/(deficit) on a tax
basis were as follows:
Accumulated capital losses $ (3,737,351)(a)
Undistributed ordinary income 2,743,685
Unrealized appreciation/(depreciation) 90,847,191(b)
--------------
Total accumulated earnings/(deficit) $ 89,853,525(c)
==============
(a) On June 30, 2005, the Fund had a net capital loss carryforward of
$3,737,351 which expires in the year 2011. To the extent future capital gains
are offset by capital loss carryforward, such gains will not be distributed.
Net capital losses incurred after October 31, and within the taxable year are
deemed to arise on the first business day of the Fund's next taxable year. For
the year ended June 30, 2005, the Fund deferred to July 1, 2005, post October
currency losses of $129,133. During the fiscal year, the Fund utilized capital
loss carryforwards of $26,492,896.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable primarily to deferral of post October
currency losses and payable for foreign tax credit.
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
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
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 27
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 purported class action complaint entitled Hindo, et al.
v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. 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 Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market timing" of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants, and others
may be filed. The plaintiffs in such lawsuits have asserted a variety of
theories for recovery including, but not limited to, violations of the
Securities Act, the Exchange Act, the Advisers Act, the Investment Company Act,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
certain state securities laws and common law. All state court acting against
the Adviser either were voluntarily dismissed or removed to federal court. On
February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred
all federal actions, to the United States District Court for the District of
Maryland (the "Mutual Fund MDL"). All of the actions removed to federal court
were also transferred to the Mutual Fund MDL. The plaintiffs in the removed
actions have since moved for remand, and that motion is pending.
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Alliance Holding; and
claims
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
brought under ERISA by participants in the Profit Sharing Plan for Employees of
the Adviser. All four complaints include substantially identical factual
allegations, which appear to be based in large part on the SEC Order and the
NYAG Order. The claims in the mutual fund derivative consolidated amended
complaint are generally based on the theory that all fund advisory agreements,
distribution agreements and 12b-1 plans between the Adviser and the
AllianceBernstein Funds should be invalidated, regardless of whether market
timing occurred in each individual fund, because each was approved by fund
trustees on the basis of materially misleading information with respect to the
level of market timing permitted in funds managed by the Adviser. The claims
asserted in the other three consolidated amended complaints are similar to
those that the respective plaintiffs asserted in their previous federal
lawsuits. All of these lawsuits seek an unspecified amount of damages. The
Alliance defendants have moved to dismiss the complaints, and those motions are
pending.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Holding, and various other defendants not
affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court
of Marshall County, West Virginia by the Attorney General of the State of West
Virginia. The WVAG Complaint makes factual allegations generally similar to
those in the Hindo Complaint. On May 31, 2005, defendants removed the WVAG
Complaint to the United States District Court for the Northern District of West
Virginia. On July 12, 2005, plaintiff moved to remand. On October 19, 2005, the
WVAG Complaint was transferred to the Mutual Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice
of Right to Hearing" addressed to the Adviser and Alliance Holding. The Summary
Order claims that the Adviser and Alliance Holding violated the West Virginia
Uniform Securities Act, and makes factual allegations generally similar to
those in the Commission Order and the NYAGOrder. On January 26, 2006, the
Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition
for Writ of Prohibition and Order Suspending Proceedings in West Virginia state
court seeking to vacate the Summary Order and for other relief. The Adviser
intends to vigorously defend against the allegations in the WVAG Complaint.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 29
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 Holding, Alliance Capital Management Corporation, AXA
Financial, Inc., AllianceBernstein Investment Research & Management, Inc.,
certain current and former directors of the AllianceBernstein Mutual Funds, and
unnamed Doe defendants. The Aucoin Complaint names certain of the
AllianceBernstein mutual funds as nominal defendants. The Aucoin Complaint was
filed in the United States District Court for the Southern District of New York
by an alleged shareholder of an AllianceBernstein mutual fund. The Aucoin
Complaint alleges, among other things, (i) that certain of the defendants
improperly authorized the payment of excessive commissions and other fees from
fund assets to broker-dealers in exchange for preferential marketing services,
(ii) that certain of the defendants misrepresented and omitted from
registration statements and other reports material facts concerning such
payments, and (iii) that certain defendants caused such conduct as control
persons of other defendants. The Aucoin Complaint asserts claims for violation
of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206
and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding
and abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiff's claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. Plaintiffs have moved for leave to
amend their consolidated complaint.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the AllianceBernstein
Mutual Funds' shares or other adverse consequences to the AllianceBernstein
Mutual
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Funds. 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. 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 AllianceBernstein Mutual Funds.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 31
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
2005 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $13.72 $11.15 $8.38 $8.19 $8.76 $13.57
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss)(a) .02 .15(b) .05(b)(c) .02 (.03) .02
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.33 2.46 2.76 .17 (.54) (3.45)
Net increase (decrease) in net
asset value from operations 2.35 2.61 2.81 .19 (.57) (3.43)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.09) (.04) (.04) -0- -0- -0-
Distributions from net realized
gains on investment and
foreign currency
transactions (.12) -0- -0- -0- -0- (1.37)
Distributions in excess of
net realized gains on
investments -0- -0- -0- -0- -0- (.01)
Total dividends and
distributions (.21) (.04) (.04) -0- -0- (1.38)
Net asset value,
end of period $15.86 $13.72 $11.15 $8.38 $8.19 $8.76
TOTAL RETURN
Total investment return based
on net asset value(d) 17.21% 23.44% 33.57% 2.32% (6.51)% (26.81)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $524,550 $310,073 $202,899 $163,406 $183,160 $245,873
Ratio to average net assets of:
Expenses, net of
waivers/reimbursement 1.47%(e) 1.57% 1.89% 2.29% 2.10% 1.81%
Expenses, before
waivers/reimbursement 1.47%(e) 1.61% 2.04% 2.29% 2.10% 1.81%
Net investment income (loss) .37%(e) 1.17%(b) .49%(b)(c) .23% (.40)% .14%
Portfolio turnover rate 21% 47% 50% 29% 43% 42%
See footnote summary on page 38.
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
2005 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $12.72 $10.38 $7.84 $7.72 $8.32 $13.06
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss)(a) (.03) .04(b) (.03)(b)(c) (.04) (.09) (.07)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.16 2.30 2.57 .16 (.51) (3.29)
Net increase (decrease) in net
asset value from operations 2.13 2.34 2.54 .12 (.60) (3.36)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.01) -0- -0- -0- -0- -0-
Distributions from net realized
gains on investment and
foreign currency
transactions (.12) -0- -0- -0- -0- (1.37)
Distributions in excess of
net realized gains on
investments -0- -0- -0- -0- -0- (.01)
Total dividends and
distributions (.13) -0- -0- -0- -0- (1.38)
Net asset value,
end of period $14.72 $12.72 $10.38 $7.84 $7.72 $8.32
TOTAL RETURN
Total investment return based
on net asset value(d) 16.80% 22.54% 32.40% 1.55% (7.21)% (27.37)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $83,444 $66,613 $56,959 $48,183 $65,724 $92,446
Ratio to average net assets of:
Expenses, net of
waivers/reimbursement 2.22%(e) 2.33% 2.67% 3.08% 2.89% 2.56%
Expenses, before
waivers/reimbursement 2.22%(e) 2.37% 2.82% 3.08% 2.89% 2.56%
Net investment income (loss) (.38)%(e) .33%(b) (.30)%(b)(c) (.61)% (1.19)% (.64)%
Portfolio turnover rate 21% 47% 50% 29% 43% 42%
See footnote summary on page 38.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 33
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
----------------------------------------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
2005 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $12.72 $10.38 $7.84 $7.72 $8.32 $13.05
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss)(a) (.03) .06(b) (.02)(b)(c) (.04) (.09) (.06)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.17 2.28 2.56 .16 (.51) (3.29)
Net increase (decrease) in net
asset value from operations 2.14 2.34 2.54 .12 (.60) (3.35)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.01) -0- -0- -0- -0- -0-
Distributions from net realized
gains on investment
and foreign currency
transactions (.12) -0- -0- -0- -0- (1.37)
Distributions in excess of
net realized gains on
investments -0- -0- -0- -0- -0- (.01)
Total dividends and
distributions (.13) -0- -0- -0- -0- (1.38)
Net asset value,
end of period $14.73 $12.72 $10.38 $7.84 $7.72 $8.32
TOTAL RETURN
Total investment return based
on net asset value(d) 16.88% 22.54% 32.40% 1.55% (7.21)% (27.30)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $71,898 $29,957 $16,005 $12,092 $15,541 $23,976
Ratio to average net assets of:
Expenses, net of
waivers/reimbursement 2.19%(e) 2.29% 2.65% 3.06% 2.85% 2.56%
Expenses, before
waivers/reimbursement 2.19%(e) 2.33% 2.80% 3.06% 2.85% 2.56%
Net investment income (loss) (.35)%(e) .55%(b) (.26)%(b)(c) (.57)% (1.18)% (.62)%
Portfolio turnover rate 21% 47% 50% 29% 43% 42%
See footnote summary on page 38.
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
----------------------------------------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
2005 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $13.82 $11.22 $8.44 $8.21 $8.76 $13.53
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss)(a) .04 .22(b) .13(b)(c) .06 (.01) .04
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions 2.35 2.45 2.72 .17 (.54) (3.43)
Net increase (decrease) in net
asset value from operations 2.39 2.67 2.85 .23 (.55) (3.39)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.12) (.07) (.07) -0- -0- -0-
Distributions from net realized
gains on investment and
foreign currency
transactions (.12) -0- -0- -0- -0- (1.37)
Distributions in excess of
net realized gains on
investments -0- -0- -0- -0- -0- (.01)
Total dividends and
distributions (.24) (.07) (.07) -0- -0- (1.38)
Net asset value, end of period $15.97 $13.82 $11.22 $8.44 $8.21 $8.76
TOTAL RETURN
Total investment return based
on net asset value(d) 17.41% 23.86% 33.81% 2.80% (6.28)% (26.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $35,132 $8,404 $2,817 $744 $808 $1,343
Ratio to average net assets of:
Expenses, net of
waivers/reimbursement 1.18%(e) 1.25% 1.54% 1.98% 1.80% 1.50%
Expenses, before
waivers/reimbursement 1.18%(e) 1.29% 1.69% 1.98% 1.80% 1.50%
Net investment income (loss) .63%(e) 1.74%(b) 1.29%(b)(c) .74% (.18)% .38%
Portfolio turnover rate 21% 47% 50% 29% 43% 42%
See footnote summary on page 38.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 35
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R
---------------------------
Six Months
Ended March 1,
December 31, 2005(f)
2005 to June 30,
(unaudited) 2005
------------ ------------
Net asset value, beginning of period $13.72 $14.08
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .01 .12
Net realized and unrealized gain (loss)
on investment and foreign currency
investment transactions 2.33 (.48)
Net increase (decrease) in net asset value
from operations 2.34 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.08) -0-
Distributions from net realized gains on
investment and foreign currency
transactions (.12) -0-
Total dividends and distributions (.20) -0-
Net asset value, end of period $15.86 $13.72
TOTAL RETURN
Total investment return based on net
asset value(d) 17.15% (2.56)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,161 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.65% 1.58%
Expenses, before waivers/reimbursements(e) 1.65% 1.58%
Net investment income(e) .17% 2.59%
Portfolio turnover rate 21% 47%
See footnote summary on page 38.
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class K
---------------------------
Six Months
Ended March 1,
December 31, 2005(f)
2005 to June 30,
(unaudited) 2005
------------ ------------
Net asset value, beginning of period $13.73 $14.08
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .03 .13
Net realized and unrealized gain (loss)
on investment and foreign currency
investment transactions 2.33 (.48)
Net increase (decrease) in net asset value
from operations 2.36 (.35)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.09) -0-
Distributions from net realized gains on
investment and foreign currency
transactions (.12) -0-
Total dividends and distributions (.21) -0-
Net asset value, end of period $15.88 $13.73
TOTAL RETURN
Total investment return based on net
asset value(d) 17.28% (2.49)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.46% 1.32%
Expenses, before waivers/reimbursements(e) 1.46% 1.32%
Net investment income(e) .39% 2.85%
Portfolio turnover rate 21% 47%
See footnote summary on page 38.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 37
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class I
---------------------------
Six Months
Ended March 1,
December 31, 2005(f)
2005 to June 30,
(unaudited) 2005
------------ ------------
Net asset value, beginning of period $13.74 $14.08
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .05 .14
Net realized and unrealized gain (loss)
on investment and foreign currency
investment transactions 2.33 (.48)
Net increase (decrease) in net asset value
from operations 2.38 (.34)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.13) -0-
Distributions from net realized gains on
investment and foreign currency
transactions (.12) -0-
Total dividends and distributions (.25) -0-
Net asset value, end of period $15.87 $13.74
TOTAL RETURN
Total investment return based on net
asset value(d) 17.40% (2.41)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.13% 1.04%
Expenses, before waivers/reimbursements(e) 1.13% 1.04%
Net investment income(e) .72% 3.13%
Portfolio turnover rate 21% 47%
(a) Based on average shares outstanding.
(b) Net of expenses waived/reimbursed by the Adviser.
(c) Net of expenses waived by the Transfer Agent.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return does not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Total investment return for a period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of distributions.
_______________________________________________________________________________
38 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
The Annual Meeting of Stockholders of AllianceBernstein International Growth
Fund (the "Fund") was held on November 15, 2005 and adjourned until December 6,
2005, December 19, 2005, December 21, 2005 and December 22, 2005. At the
November 15, 2005 Meeting, with respect to the first item of business, the
election of Directors, the required number of outstanding shares were voted in
favor of the proposal, and the proposal was approved. At the December 6, 2005
Meeting, the required number of outstanding shares voted in favor of the third
item of business, the amendment, elimination or reclassification as
non-fundamental of certain investment restrictions, and the proposal was
approved. With respect to the second item of business, the amendment and
restatement of the Fund's charter, an insufficient number of required
outstanding shares voted in favor of the proposal and therefore the proposal
was not approved. A description of each proposal and number of shares voted at
the Meetings are as follows (the proposal numbers shown below correspond to the
proposal numbers in the Fund's proxy statement):
1. The election of the Directors, each such Director to serve a term of an
indefinite duration and until his or her successor is duly elected and
qualifies.
Withheld
Voted For Authority
--------------------------------------
Ruth Block 20,834,104 732,346
David H. Dievler 20,822,558 743,891
John H. Dobkin 20,859,244 707,206
Michael J. Downey 20,870,988 695,461
William H. Foulk, Jr. 20,837,891 728,558
D. James Guzy 20,562,942 1,003,508
Marc O. Mayer 20,726,227 840,223
Marshall C. Turner, Jr. 20,878,076 688,373
Voted Broker
Voted For Against Abstained Non-Votes
-------------------------------------------------------
2. The amendment and
restatement of the
Charter. 15,656,875 639,428 640,088 0
3. The amendment, elimination, or reclassification as non-fundamental, of the
fundamental investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
-------------------------------------------------------
3.A. Diversification 14,292,726 816,055 182,127 5,049,062
3.G. Loans 14,245,215 875,853 169,840 5,049,062
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 39
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)
D. James Guzy(1)
Marshall C. Turner, Jr.(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Gaiti Ali, Vice President
Edward D. Baker, III, Vice President
Thomas J. Bardong, Vice President
Stephen Beinhacker, Vice President
Michael Levy, Vice President
Siobhan McManus, Vice President
James K. Pang, Vice President
Paul C. Rissman, Vice President
Robert Scheetz, Vice President
Christopher M. Toub, Vice President
Jean Van De Walle, Vice President
Emilie D. Wrapp, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Custodian
Brown Brothers Harriman & Company
40 Water Street
Boston, MA 02109-3661
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300Madison Avenue
New York, NY 10017
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee, the Independent Directors Committee and the
Governance and Nominating Committee.
(2) The management of, and investment decisions for, the AllianceBernstein
International Growth Fund's portfolio are made by the International Growth Fund
Management Team, comprised of senior members of the Global Emerging Growth
Investment Team and the International Large Cap Growth Investment Team.
_______________________________________________________________________________
40 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
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 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 merged into International Research Growth Fund. On February 1, 2006,
Americas Government Income Trust was renamed Global Government Income Trust and
Quality Bond Portfolio was renamed Intermediate Bond Portfolio.
** 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 INTERNATIONAL GROWTH FUND o 41
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
SUMMARY OF SENIOR OFFICER'S EVALUATION OF
INVESTMENT ADVISORY AGREEMENT*
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P., (the "Adviser") and the
AllianceBernstein International Growth Fund, Inc.**, (the "Fund"), prepared by
Philip L. Kirstein, the Senior Officer, for the independent directors of the
Fund, as required by the Assurance of Discontinuance between the New York State
Attorney General and the Adviser. The Senior Officer's evaluation of the
investment advisory agreement is not meant to diminish the responsibility or
authority of the Boards of Directors to perform their duties pursuant to
Section 15 of the Investment Company Act of 1940 (the "40 Act") and applicable
state law. The purpose of the summary is to provide shareholders with a
synopsis of the independent evaluation of the reasonableness of the advisory
fees which was provided to the independent directors in connection with their
review of the proposed continuance of the investment advisory agreement. The
Senior Officer's evaluation considered the following factors:
1. Management fees charged to institutional and other clients of the Adviser
for like services.
2. Management fees charged by other mutual fund companies for like services.
3. Costs to the Adviser and its affiliates of supplying services pursuant to
the advisory agreement, excluding any intra-corporate profit.
4. Profit margins of the Adviser and its affiliates from providing such
services.
5. Possible economies of scale as the Fund grows larger.
6. Nature and quality of the Adviser's services, including the performance of
the Fund.
FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS, CAPS & RATIOS
The table below describes the Fund's advisory fee pursuant to the Investment
Advisory Agreement. This is the fee schedule the Adviser implemented in January
2004 as a result of the settlement with the New York State Attorney General.
Advisory Fee Based on % of
Average Daily Net Assets
- ------------------------------------------------------------------------------------------------
AllianceBernstein International Growth Fund, Inc. First $2.5 billion .75%
Next $2.5 billion .65%
Excess over $5 billion .60%
* It should be noted that the information in the fee summary was completed on
June 8, 2005 and presented to the Board of Directors and Trustees on June 15,
2005 in accordance with the Assurance of Discontinuance with the New York State
Attorney General. It also should be noted that references in the fee summary
pertaining to performance and expense ratios refer to Class A shares of the
Fund.
** Prior to May 16, 2005, AllianceBernstein International Growth Fund, Inc.
was named AllianceBernstein Worldwide Privatization Fund, Inc.
_______________________________________________________________________________
42 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
The Adviser is reimbursed as specified in the Investment Advisory Agreement for
certain clerical, legal, accounting, administrative and other services provided
to the Fund as indicated below:
Latest
Fiscal Year As % of Average
Amount Daily Net Assets
- ------------------------------------------------------------------------------------------------
AllianceBernstein International Growth Fund, Inc. $112,000.00 .04
The Adviser has agreed to waive that portion of its management fees and/or
reimburse the Fund for that portion of its total operating expenses to the
degree necessary to limit the Fund's expense ratios to the levels set forth
below for that Fund's current fiscal year. That waiver agreement is terminable
by the Adviser at the end of the Fund's fiscal year upon at least 60 days
written notice. It should be noted that as of February 28, 2005, the Fund is
operating below its expense cap. Pro-forma expense ratio is also set forth
below.
Expense Cap
pursuant to
Expense
Limitation Pro-Forma Fiscal
Undertaking* Expense Ratio** Year End
- ------------------------------------------------------------------------------------------------
AllianceBernstein International Advisor-1.35% 1.28% June 30,
Growth Fund, Inc. Class A-1.65% 1.60% 2004
Class B-2.35% 2.37%
Class C-2.35% 2.32%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS OF THE ADVISER
The management fees charged to investment companies which the Adviser manages
and sponsors may be higher than those charged to institutional accounts,
including pension plans and sub-advised investment companies. The fee
differential reflects, among other things, different services provided to such
clients, and different liabilities assumed. Services provided by the Adviser to
the Fund that are not provided to non-investment company clients include
providing office space and personnel to serve as Fund Officers and coordinating
with and monitoring the Fund's third party service providers such as Fund
counsel, auditors, custodians, transfer agents and pricing services. The
accounting, administrative and legal/compliance requirements for the Fund are
more costly than those for institutional assets due to the greater complexities
and time required for investment companies. A portion of the expenses related
to these services are reimbursed by the Fund to the Adviser. Managing the cash
flow of an investment company may be more difficult than for other accounts,
particularly if the Fund is in net redemptions, as the Adviser is forced to
sell securities to meet redemptions.
* The expense caps are effective May 16, 2005.
** This pro-forma expense ratio information shows what would have been each
Fund's expense ratio in the indicated fiscal year had the current fee been in
effect throughout the fiscal year.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 43
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, the Senior Officer believes it is worth noting the
information from the Adviser's ADV regarding the advisory fees charged to
institutional accounts in the same asset class as the Fund. However, with
respect to the Fund the Adviser represented that there is no category set forth
in its Form ADV for institutional products which have a substantially similar
investment style as the Fund.
The Adviser also manages and sponsors retail mutual funds organized in
jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States investors. The Adviser charges the following fee for an
offshore mutual fund with a similar investment style as the Fund:
Asset Class Fee
- -------------------------------------------------------------
Global Growth 1.00%
The Adviser represented that it does not sub-advise any registered investment
companies with a similar investment style as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.
Lipper, Inc., an analytical service that is not affiliated with the Adviser,
compared the fees charged to the Fund with fees charged to other investment
companies for similar services by other investment advisers. Lipper's analysis
included the Fund's ranking with respect to the proposed advisory fees relative
to the Lipper group median at the approximate current asset level for the
Fund.*
Lipper Group
Fee Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein International
Growth Fund, Inc. 0.750 0.925 1/9
Lipper also analyzed the expense ratio of the Fund in comparison to its Lipper
Expense Group** and Lipper Expense Universe***. Lipper describes a Lipper
Expense Group as a representative sample of comparable funds and a Lipper
* A ranking of "1" means that the AllianceBernstein Fund has the lowest
effective fee rate in the Lipper peer group.
** Lipper uses the following criteria in screening funds to be included in
each Fund's expense group: fund type, investment classification/objective, load
type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and
expense components and attributes. An expense group will typically consist of
seven to twenty funds.
*** Except for asset (size) comparability, Lipper uses the same criteria for
selecting an expense group when selecting an expense universe. Unlike an
expense group, an expense universe allows for the same advisor to be
represented by more than just one fund.
_______________________________________________________________________________
44 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
Universe as a broader group, consisting of all funds in the investment
classification/objective with a similar load type as the subject Fund. The
results of that analysis are set forth below:
Lipper Lipper Lipper
Expense Universe Universe Lipper Group
Ratio Median Rank Group Rank Median
- --------------------------------------------------------------------------------------------------------
AllianceBernstein International
Growth Fund, Inc. 1.648 1.656 22/54 4/9 1.677
Based on this analysis, the Fund has a more favorable ranking on an advisory
fee basis than on a total expense ratio basis. This has resulted in a variety
of efforts by the Adviser to lower non-management expenses.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE ADVISORY AGREEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Fund prepared by the Adviser for the
Board of the Directors was reviewed by the Senior Officer. An independent
consultant is working with the Adviser's personnel on a new system to produce
profitability information at the Fund level which will reflect the Adviser's
management reporting approach. It is possible that future Fund profitability
information may differ from previously reviewed information due to changes in
methodologies and allocations. See Section IV for additional discussion.
IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH
SERVICES.
The Adviser's profitability for the Fund decreased during calendar 2004
relative to 2003 primarily as a result of the reduction in the advisory fee
schedule implemented early in 2004.
In addition to the Adviser's direct profits from managing the Fund pursuant to
the investment advisory agreement, certain of the Adviser's affiliates have
business relationships with the Fund and may earn a profit from providing other
services to the Fund. These affiliates provide transfer agency and distribution
related services and receive transfer agent fees, Rule 12b-1 payments,
front-end sales loads, contingent deferred sales charges ("CDSC") and
commissions for providing brokerage services. In addition, the Adviser benefits
from soft dollar arrangements which offset expenses the Adviser would otherwise
incur. Additional information regarding distribution related fees can be found
in the prospectus of the Fund.
Different classes of shares are charged different types of distribution fees.
The Adviser's affiliate, AllianceBernstein Investment Research and Management
Inc.
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 45
("ABIRM"), is the Fund's principal underwriter. ABIRM and the Adviser may make
payments* from their own resources, in addition to sales loads and Rule 12b-1
fees, to firms that sell shares of the Fund. In 2004, ABIRM paid from its own
resources approximately .04% of the average monthly assets of the Fund for
distribution services and educational support. For 2005, it is anticipated that
ABIRM will pay approximately .04% of average monthly assets of the Fund for
such purposes.
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charges from sales of the Fund's shares
in the Fund's most recent fiscal year:
Amount Received
- -------------------------------------------------------------------------------
AllianceBernstein International Growth Fund, Inc. $4,156
ABIRM received the amounts set forth below in Rule 12b-1 fees and CDSC for the
Fund during the Fund's most recent fiscal year. A significant percentage of
such amounts were paid out to third party intermediaries by ABIRM.
12b-1Fee
Received** CDSC Received
- -------------------------------------------------------------------------------
AllianceBernstein International Growth Fund, Inc. $1,278,526 $27,660
Fees and reimbursements for out of pocket expenses charged by Alliance Global
Investor Services, Inc. ("AGIS"), the affiliated transfer agent, are based on
the level of the network account and the class of share held by the account.
AGIS also receives a fee per shareholder sub-account for each account
maintained by an intermediary on an omnibus basis. AGIS' after-tax
profitability decreased in 2004 in comparison to 2003.
AGIS received the following fee from the Fund in the most recent fiscal year:
AGIS Fee
- -------------------------------------------------------------------------------
AllianceBernstein International Growth Fund, Inc. $386,000
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule for the Fund
reflect a sharing of economies of scale to the extent they exist. Based on some
of the professional literature that have considered economies of scale in the
mutual fund industry it is thought that to the extent economies of scale exist,
they may more often exist across a fund family as opposed to a specific fund.
This is because
* The total amount paid to the financial intermediary in connection with the
sale of shares will generally not exceed the sum of (a) .25% of the current
year's Fund sales by that firm and (b) .10% of the average daily net assets
attributable to that firm over the year.
** 12b-1 amounts are gross amounts paid to ABIRM.
_______________________________________________________________________________
46 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
the costs incurred by the Adviser, such as investment research or technology
for trading or compliance systems can be spread across a greater asset base as
the fund family increases in size. It is also possible that as the level of
services required to operate a successful investment company has increased over
time, and advisory firms have made such investments in their business to
provide improved services, there may be a sharing of economies of scale without
a reduction in advisory fees.
An independent consultant made a presentation to the Board of Directors and the
Senior Officer regarding possible economies of scale or scope in the mutual
fund industry. Based on the presentation, it was evident that fund management
companies benefit from economies of scale. However, due to the lack of cost
data which forced the researchers to infer facts about the costs from the
behavior of fund expenses, there was a lack of consensus among researchers as
to whether economies of scale were being passed on to the shareholders. It is
contemplated that additional work will be performed to determine if the
benefits of economies of scale or scope are being passed to shareholders by the
Adviser. In the meantime, it is clear that to the extent the Fund's assets
exceed the initial breakpoint its shareholders benefit from a lower fee rate.
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING PERFORMANCE OF THE
FUND.
With assets under management of $534.4 billion as of March 31, 2005, the
Adviser has the investment experience and resources necessary to effectively
manage the Fund and provide non-investment services (described in Section II)
to the Fund.
The information prepared by Lipper showed the 1, 3, 5 and 10 year performance
ranking of the Fund relative to its Lipper universe:
Performance Year
Rank in Performance Universe for Periods
Ended March 31, 2005
- -------------------------------------------------------------------------------
1 3 5 10
- -------------------------------------------------------------------------------
AllianceBernstein International
Growth Fund, Inc. 5/49 1/42 12/35 1/13
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that
the proposed fee for the Fund is reasonable and within the range of what would
have been negotiated at arms-length in light of all the surrounding
circumstances. This conclusion in respect of the Fund is based on an evaluation
of all of these factors and no single factor was dispositive.
Dated: July 22, 2005
_______________________________________________________________________________
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND o 47
NOTES
_______________________________________________________________________________
48 o ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
WWPSR1205
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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. 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 11. 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 changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
12 (a) (1) Code of Ethics that is subject to the disclosure of Item 2
hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (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 International Growth Fund, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: February 28, 2006
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: February 28, 2006
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: February 28, 2006