UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06251
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2006
Date of reporting period: April 30, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
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AllianceBernstein Multi-Market Strategy Trust
Semi-Annual Report
April 30, 2006
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
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(R) 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 Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the funds, and is a member of the NASD.
AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner, AllianceBernstein L.P.
June 26, 2006
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Multi-Market Strategy Trust (the "Fund") for the semi-annual
reporting period ended April 30, 2006.
Investment Objective and Policies
Previously, this open-end fund sought the highest level of current income that
is available, consistent with what AllianceBernstein considers to be prudent
investment risk, from a portfolio of high-quality debt securities having
remaining maturities of not more than five years. Effective April 1, 2006, the
Fund's investment objective is to generate current income consistent with
preservation of capital. The Fund invests, under normal circumstances, in
high-quality debt securities having remaining maturities of not more than five
years. The Fund invests in a portfolio of debt securities denominated in the
U.S. dollar and selected foreign currencies. The Fund normally expects to
maintain at least 70% of its assets in debt securities denominated in
currencies of foreign countries whose currencies are considered stable by
AllianceBernstein. The Fund limits its investments in a single currency other
than the U.S. dollar to 25% of its net assets, except for the euro, in which
the Fund may invest up to 50% of its net assets.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Merrill Lynch (ML) 1-5 Year Government Bond Index, for the six- and 12-month
periods ended April 30, 2006. Also included in the table are returns for the
Fund's peer group, as represented by the Lipper Global Income Funds Average
(the "Lipper Average"). Funds in the Lipper Average have generally similar
investment objectives to the Fund, although some may have different investment
policies and sales and management fees.
The Fund underperformed its benchmark, the ML 1-5 Year Government Bond Index,
for both the six- and 12-month periods ended April 30, 2006. The primary
detractor from performance was the Fund's currency exposure to both the Mexican
peso and the New Zealand dollar. The Mexican peso depreciated 2.48% against the
U.S. dollar during the six-month period and 0.12% during the 12-month period.
The New Zealand dollar lost 8.81% during the six-month period and 12.71% during
the 12-month period. During the current reporting period, the Fund held
approximately 1% currency exposure to New Zealand and 4% currency exposure to
Mexico.
Market Review and Investment Strategy
The investment-grade fixed-income markets posted weak returns during the
semi-annual period, reflecting higher global interest rates. Global yields rose
as the U.S. Federal Reserve (the "Fed") and the European Central Bank (ECB)
raised their official interest rates. The Fed hiked rates another 100 basis
points in quarter-point increments to end the period at 4.75%. The U.S.
Treasury yield curve remained relatively flat, with yields in the 1-5 year
maturity range rising approximately 47 basis points to yield near 4.9%.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 1
Stronger economic data in the euro area also led the ECB to raise its official
rates from 2% to 2.5% in two quarter-point increments. European yields, as
represented by German 1-5 year maturities, rose approximately 75 basis points
during the reporting period to yield near 3.5%.
With inflation holding on target and growth gaining some traction in the U.K.,
the Bank of England left official rates unchanged at 4.5% for the eighth
consecutive quarter. Nevertheless, UK short-term yields climbed approximately
30 basis points. Australia's short-term government bond yields also rose 27
basis points despite the Reserve Bank of Australia holding its cash rate steady
at 5.5% since March 2005. Rates climbed in Canada, as well, with short-term
rates rising approximately 50 basis points.
In March, the Bank of Japan removed its five-year policy of quantitative
easing, in which it placed trillions in excess yen into the banking system to
spur growth and end deflation. This policy was mandated after near-zero rates
failed to provide monetary stimulus.
Most short-term developed global government bond markets posted modest positive
returns with little variation in returns among the various market sectors. The
U.S. Treasury market, as measured by the Merrill Lynch 1-5 Year Treasury Index,
posted a return of 1.16%, significantly outperforming longer maturity
Treasuries. Hedged global Treasuries, ex-U.S., with 1-5 year maturities posted
similar returns of 1.19%. Hedged European government bonds in the 1-5 year
maturity range underperformed the U.S., posting only 0.78%, while Japanese
governments outperformed, posting 1.59%, according to Merrill Lynch. Short-term
corporate bonds also posted modest positive returns with U.S. and European
corporates in the 1-5 year maturity range returning 1.19% and 0.64%,
respectively.
As previously announced, at a meeting of the Board of Directors of the Fund on
May 4, 2006, the Board approved the liquidation and dissolution of the Fund.
The Fund has suspended sales of its shares to new investors pending the
completion of the liquidation and the payment of liquidating distributions to
its shareholders. The Fund expects to make the liquidating distributions on or
shortly after August 4, 2006.
2 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein Investments at (800) 227-4618. You should read the prospectus
carefully before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (3%
year 1, 2% year 2, 1% year 3, 0% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Performance assumes reinvestment of distributions
and does not account for taxes.
Benchmark Disclosure
The unmanaged Merrill Lynch 1-5 Year Government Bond Index does not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The Index consists of short-term U.S. Treasury securities maturing
in one to five years and is a standard measure of the performance of a basket
of unmanaged short-term Treasury securities. For both the six- and 12-month
periods ended April 30, 2006, the Lipper Global Income Funds Average consisted
of 107 and 104 funds, respectively. These funds have generally similar
investment objectives to AllianceBernstein Multi-Market Strategy Trust,
although some may have different investment policies and sales and management
fees. An investor cannot invest directly in an index or average, and their
results are not indicative of the performance for any specific investment,
including the Fund.
A Word About Risk
The Fund invests a part of its assets in foreign securities which may magnify
asset value 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 can invest a significant portion
of its assets in the securities of a single issuer, which may present greater
risk than a more diversified portfolio. Price fluctuation may be caused by
changes in interest rates or bond credit quality ratings. Please note, as
interest rates rise, existing bond prices fall and can cause the value of an
investment in the Fund to decline. Changes in interest rates have a greater
effect on bonds with longer maturities than on those with shorter maturities.
While the Fund invests in bonds and fixed-income securities, the Fund may at
times use certain types of investment derivatives, such as options, futures,
forwards and swaps. These instruments involve risks different from, and in
certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the Fund's prospectus.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 3
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK -----------------------------
PERIODS ENDED APRIL 30, 2006 6 Months 12 Months
- -----------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust
Class A 0.74% 0.61%
Class B 0.38% -0.13%
Class C 0.20% -0.12%
Class R* 0.54% 0.53%
Class K* 0.69% 0.85%
Class I* 0.85% 1.19%
Merrill Lynch 1-5 Year Government Bond Index 1.16% 1.51%
Lipper Global Income Funds Average 2.10% 0.10%
* Please note that these share classes are for investors purchasing shares
through institutional pension plans.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 0.61% -3.60%
5 Years 2.99% 2.11%
10 Years 4.75% 4.30%
SEC Yield** 2.01%
Class B Shares
1 Year -0.13% -2.90%
5 Years 2.22% 2.22%
10 Years(a) 4.27% 4.27%
SEC Yield** 1.37%
Class C Shares
1 Year -0.12% -1.04%
5 Years 2.19% 2.19%
10 Years 3.96% 3.96%
SEC Yield** 1.40%
Class R Shares+
1 Year 0.53% 0.53%
Since Inception* 1.06% 1.06%
SEC Yield** 2.03%
Class K Shares+
1 Year 0.85% 0.85%
Since Inception* 1.37% 1.37%
SEC Yield** 2.31%
Class I Shares+
1 Year 1.19% 1.19%
Since Inception* 1.70% 1.70%
SEC Yield** 2.67%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* Inception Date: 3/1/05 for Class R, Class K and Class I shares.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2006.
+ These share classes are offered at net asset value (NAV) to eligible
investors and their SEC returns are the same as the NAV returns. Please note
that these share classes are 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.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 5
HISTORICAL PERFORMANCE
(continued from previous page)
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
SEC Returns
Class A Shares
1 Year -3.50%
5 Years 2.01%
10 Years 4.46%
Class B Shares
1 Year -2.77%
5 Years 2.11%
10 Years(a) 4.41%
Class C Shares
1 Year -1.07%
5 Years 2.08%
10 Years 4.12%
Class R Shares+
1 Year 0.69%
Since Inception* 0.64%
Class K Shares+
1 Year 1.18%
Since Inception* 0.95%
Class I Shares+
1 Year 1.52%
Since Inception* 1.28%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* Inception Date: 3/1/05 for Class R, Class K and Class I shares.
+ Please note that these share classes are 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.
6 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The table below provides information about actual account values and actual
expenses. You may use the information, together with the amount you invested,
to estimate the expenses that you paid over the period. Simply divide your
account value by $1,000 (for example, an $8,600 account value divided by $1,000
= 8.6), then multiply the result by the number under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
Hypothetical Example for Comparison Purposes
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
annual rate of return of 5% before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds by comparing this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the hypothetical example is useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs
would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
November 1, 2005 April 30, 2006 During Period*
------------------------------- ------------------------------- ---------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
----------- ----------------- ----------- ----------------- ----------- -------------
Class A $1,000 $1,000 $1,007.42 $1,016.56 $ 8.26 $ 8.30
Class B $1,000 $1,000 $1,003.76 $1,012.94 $11.87 $11.93
Class C $1,000 $1,000 $1,002.03 $1,013.04 $11.76 $11.83
Class R $1,000 $1,000 $1,005.37 $1,016.41 $ 8.40 $ 8.45
Class K $1,000 $1,000 $1,006.88 $1,017.90 $ 6.92 $ 6.95
Class I $1,000 $1,000 $1,008.51 $1,019.54 $ 5.28 $ 5.31
* Expenses are equal to the classes' annualized expense ratios of 1.66%,
2.39%, 2.37%, 1.69%, 1.39% and 1.06%, respectively, multiplied by the average
account value over the period, multiplied by 181/365 ( to reflect the one-half
year period ).
** Assumes 5% return before expenses.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 7
PORTFOLIO SUMMARY
April 30, 2006 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $143.6
SECURITY TYPE BREAKDOWN*
[ ] 43.1% Sovereign Debt Obligations [PIE CHART OMITTED]
[ ] 32.2% Corporate Debt Obligations
[ ] 23.5% U.S. Government & Government
Sponsored Agency Obligations
[ ] 1.2% Short-Term
* All data are as of April 30, 2006. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
8 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
PORTFOLIO OF INVESTMENTS
April 30, 2006 (unaudited)
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Belgium-2.6%
Government Obligation-2.6%
Kingdom of Belgium
3.75%, 3/28/09(a)
(cost $3,590,838) EUR 2,940 $ 3,733,143
Canada-7.4%
Corporate Debt Obligations-7.4%
Bank of Nova Scotia
3.93%, 2/18/10(a) CAD 5,000 4,366,128
GE Capital Canada Funding Co.
5.30%, 7/24/07(a) 5,000 4,523,635
Wells Fargo Financial Canada Corp.
3.60%, 6/28/10(a) 2,000 1,718,546
Total Canadian Securities
(cost $9,131,737) 10,608,309
Denmark-4.6%
Government Obligation-4.6%
Kingdom of Denmark
6.00%, 11/15/09(a)
(cost $6,513,863) DKK 36,700 6,681,760
France-7.6%
Corporate Debt Obligation-3.2%
Dexia Credit Local
4.75%, 4/25/09(a) EUR 3,500 4,551,548
Government Obligation-4.4%
Government of France
3.00%, 7/25/09 (TIPS)(a) 4,804 6,368,079
Total French Securities
(cost $11,489,810) 10,919,627
Germany-6.7%
Corporate Debt Obligation-3.1%
Kreditanstalt fuer Wiederaufbau
4.50%, 8/03/06(a) 3,500 4,429,315
Government Obligation-3.6%
Bundesobligation
3.50%, 10/09/09(a) 4,100 5,154,683
Total German Securities
(cost $8,943,726) 9,583,998
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 9
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Ireland-4.4%
Government Obligation-4.4%
Republic of Ireland
3.25%, 4/18/09
(cost $6,154,342) EUR 5,000 $ 6,256,180
Japan-9.2%
Government Obligations-9.2%
Government of Japan
0.80%, 12/20/10(a) JPY 789,550 6,780,589
1.40%, 3/21/11 739,100 6,505,943
Total Japanese Securities
(cost $13,227,841) 13,286,532
Mexico-3.8%
Government Obligations-3.8%
Mexican Cetes
Zero coupon, 5/11/06(a) MXN 25,000 2,253,897
Zero coupon, 7/06/06(a) 36,812 3,282,887
Total Mexican Securities
(cost $5,666,907) 5,536,784
New Zealand-3.1%
Government Obligation-3.1%
Government of New Zealand
7.00%, 7/15/09
(cost $4,561,301) NZD 6,700 4,406,275
Norway-4.2%
Government Obligation-4.2%
Kingdom of Norway
5.50%, 5/15/09(a)
(cost $5,297,570) NOK 35,094 5,992,990
United Kingdom-8.2%
Corporate Debt Obligations-8.2%
Halifax, Plc.
4.75%, 3/24/09(a) EUR 2,000 2,590,837
HBOS Treasury Services, Plc.
4.88%, 12/21/07(a) GBP 2,500 4,552,579
UBS London
8.00%, 1/08/07(a) 2,500 4,644,846
Total United Kingdom Securities
(cost $12,061,739) 11,788,262
10 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
United States-29.9%
Corporate Debt Obligations-8.1%
Citigroup, Inc.
4.25%, 7/29/09(a) US$ 5,000 $ 4,835,880
JPMorgan Chase & Co.
3.80%, 10/02/09(a) 5,000 4,744,880
Suntrust Bank
4.54%, 6/02/09(a)(b) 2,000 2,003,000
-------------
11,583,760
U.S. Government and Government
Sponsored Agency Obligations-21.8%
Federal Home Loan Bank
3.00%, 4/15/09(a) 4,000 3,765,808
3.75%, 8/18/09(a) 4,500 4,313,754
Federal Home Loan Mortgage Corp.
3.50%, 2/15/08(a) EUR 9,500 11,985,547
Federal National Mortgage Association
1.75%, 3/26/08(a) JPY 730,000 6,542,516
3.25%, 2/15/09(a) US$ 5,000 4,754,615
-------------
31,362,240
Total United States Securities
(cost $42,901,886) 42,946,000
SHORT-TERM INVESTMENT-1.1%
Repurchase Agreement-1.1%
Deutsche Bank
4.73%, 4/28/06, due 5/01/06 in
the amount of $1,600,631
(collateralized by $1,660,000
FHLMC, 2.85%, 4/06/07; value
$1,628,625) (cost $1,600,000) 1,600 1,600,000
Total Investments-92.8%
(cost $131,141,560) 133,339,860
Other assets less liabilities-7.2% 10,296,961
Net Assets-100% $ 143,636,821
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 11
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination April 30, Appreciation/
(000) Date 2006 (Depreciation)
- -------------------------------------------------------------------------------
Buy Contracts:
Australian Dollar,
settling 5/12/06 1,803 $ 1,330,266 $ 1,369,343 $ 39,077
Japanese Yen,
settling 5/31/06 174,492 1,483,300 1,538,811 55,511
Swedish Krona,
settling 6/26/06 14,481 1,928,919 1,976,908 47,989
Sale Contracts:
British Pound,
settling 6/16/06 4,401 7,874,315 8,030,775 (156,460)
Canadian Dollar,
settling 5/10/06 13,915 12,146,385 12,448,326 (301,941)
Danish Krona,
settling 5/30/06 41,795 6,758,611 7,080,831 (322,220)
Euro Dollar,
settling
5/18/06-6/19/06 37,523 45,438,661 47,418,626 (1,979,965)
Japanese Yen,
settling 5/31/06 2,030,808 17,364,844 17,909,310 (544,466)
New Zealand Dollar,
settling 5/12/06 4,500 2,859,414 2,871,752 (12,338)
Norwegian Kroner,
settling 5/31/06 39,554 6,316,561 6,429,521 (112,960)
(a) Positions, or a portion thereof, with an aggregate market value of
$114,571,462 have been segregated to collateralize forward exchange currency
contracts.
(b) Coupon rate adjusts on a predetermined schedule to a rate based on a
specific Index. Stated interest rate was in effect at April 30, 2006.
Glossary of Terms:
FHLMC - Federal Home Loan Mortgage Corporation
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
CAD - Canadian Dollar
DKK - Danish Krona
EUR - Euro Dollar
GBP - Great British Pound
JPY - Japanese Yen
MXN - Mexican Peso
NOK - Norwegian Kroner
NZD - New Zealand Dollar
US$ - United States Dollar
See notes to financial statements.
12 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
STATEMENT OF ASSETS & LIABILITIES
April 30, 2006 (unaudited)
Assets
Investments in securities, at value (cost $131,141,560) $ 133,339,860
Cash 452,972
Foreign cash, at value (cost $4,616,216) 4,946,578
Receivable for investment securities sold and foreign
currency contracts 7,293,770
Interest receivable 1,834,972
Unrealized appreciation of forward exchange currency
contracts 142,577
Receivable for capital stock sold 49,890
Total assets 148,060,619
Liabilities
Unrealized depreciation of forward exchange currency
contracts 3,430,350
Dividends payable 314,792
Payable for capital stock redeemed 272,508
Transfer Agent fee payable 64,163
Advisory fee payable 59,385
Distribution fee payable 42,383
Accrued expenses and other liabilities 240,217
Total liabilities 4,423,798
Net Assets $ 143,636,821
Composition of Net Assets
Capital stock, at par $ 27,170
Additional paid-in capital 167,278,903
Undistributed net investment income 7,065,816
Accumulated net realized loss on investments
and foreign currency transactions (30,173,899)
Net unrealized depreciation of investments
and foreign currency denominated assets and liabilities (561,169)
$ 143,636,821
Net Asset Value Per Share-18 billion shares of capital stock authorized, $0.001
par value
Shares Net Asset
Class Net Assets Outstanding Value
- ------------------------------------------------------------------------
A $ 132,033,276 24,979,972 $5.29*
B $ 4,050,199 764,891 $5.30
C $ 7,525,360 1,420,165 $5.30
R $ 9,374 1,772 $5.29
K $ 9,329 1,763 $5.29
I $ 9,283 1,754 $5.29
* The maximum offering price per share for Class A shares was $5.52 which
reflects a sales charge of 4.25%.
See notes to financial statements.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 13
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2006 (unaudited)
Investment Income
Interest (net of foreign taxes withheld
of $1,485) $ 2,679,308
Expenses
Advisory fee $ 380,140
Distribution fee--Class A 208,940
Distribution fee--Class B 23,784
Distribution fee--Class C 39,887
Distribution fee--Class R 24
Distribution fee--Class K 12
Transfer agency--Class A 274,867
Transfer agency--Class B 10,219
Transfer agency--Class C 16,243
Transfer agency--Class R 12
Transfer agency--Class K 9
Transfer agency--Class I 6
Custodian 89,527
Registration 59,825
Legal 54,632
Administrative 48,000
Printing 42,015
Audit 39,848
Directors' fees 15,412
Miscellaneous 7,685
Total expenses 1,311,087
Less: expense offset arrangement
(see Note B) (5,980)
Net expenses 1,305,107
Net investment income 1,374,201
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions
Net realized gain on:
Investment transactions 29,339
Foreign currency transactions 2,850,088
Net change in unrealized
appreciation/depreciation of:
Investments 221,559
Foreign currency denominated assets
and liabilities (3,606,286)
Net loss on investments and foreign
currency transactions (505,300)
Net Increase in Net Assets from
Operations $ 868,901
See notes to financial statements.
14 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
April 30, 2006 October 31,
(unaudited) 2005
-------------- --------------
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 1,374,201 $ 3,430,608
Net realized gain on investments and
foreign currency transactions 2,879,427 13,008,868
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (3,384,727) (13,428,564)
Net increase in net assets from
operations 868,901 3,010,912
Dividends and Distributions to
Shareholders from
Net investment income
Class A (1,289,911) (3,193,233)
Class B (26,319) (75,467)
Class C (45,997) (114,019)
Class R (86) (123)
Class K (100) (143)
Class I (116) (164)
Net realized gain on investment and
foreign currency transactions
Class A (9,312,726) -0-
Class B (331,416) -0-
Class C (532,792) -0-
Class R (638) -0-
Class K (635) -0-
Class I (631) -0-
Capital Stock Transactions
Net decrease (11,794,772) (40,657,357)
Total decrease (22,467,238) (41,029,594)
Net Assets
Beginning of period 166,104,059 207,133,653
End of period (including undistributed net
investment income of $7,065,816 and
$7,054,144, respectively) $ 143,636,821 $ 166,104,059
See notes to financial statements.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 15
NOTES TO FINANCIAL STATEMENTS
April 30, 2006 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Multi-Market Strategy Trust, Inc. (the "Fund") was
incorporated in the State of Maryland as a non-diversified, open-end management
investment company. The Fund offers Class A, Class B, Class C, Class R, Class K
and Class I shares. Class A shares are sold with a front-end sales charge of up
to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of
$1,000,000 or more, Class A shares redeemed within one year of purchase may be
subject to a contingent deferred sales charge of 1%. Class B shares are sold
currently with a contingent deferred sales charge which declines from 3.0% to
zero depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are subject to a contingent deferred sales
charge of 1% on redemptions made within the first year after purchase. Class R
and Class K shares are sold without an initial or contingent deferred sales
charge. Class I shares are sold without an initial or contingent deferred sales
charge and are not subject to ongoing distribution expenses. All six classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The financial statements have
been prepared in conformity with U.S. generally accepted accounting principles,
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. Additional information about some of the
items discussed in these Notes to Financial Statements is contained in the
Fund's Statement of Additional Information, which is available upon request.
The following is a summary of significant accounting policies followed by the
Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ")
16 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
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 valuation, the last
available closing settlement price is used; securities traded in the
over-the-counter market, ("OTC") (but excluding securities traded on NASDAQ)
are valued at the mean of the current bid and asked prices as reported by the
National Quotation Bureau or other comparable sources; U.S. Government
securities and other debt instruments having 60 days or less remaining until
maturity are valued at amortized cost if their original maturity was 60 days or
less; or by amortizing their fair value as of the 61st day prior to maturity if
their original term to maturity exceeded 60 days; fixed-income securities,
including mortgage backed and asset backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one
or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, AllianceBernstein L.P. (prior to February 24, 2006 known as Alliance
Capital Management L.P.) (the "Adviser") may establish procedures whereby
changes in market yields or spreads are used to adjust, on a daily basis, a
recently obtained quoted price on a security; and OTC and other derivatives are
valued on the basis of a quoted bid price or spread from a major broker/dealer
in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 17
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 net unrealized appreciation and depreciation of investments and
foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no 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
Interest income is accrued daily. Investment transactions are accounted for on
the date the securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund amortizes premiums and
accretes discounts as adjustments to interest income.
5. Class Allocations
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the net assets of such class, except for class specific
expenses which are allocated to the respective class. Realized and unrealized
gains and losses are allocated among the various share classes based on their
relative net assets.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with U.S. generally accepted accounting principles. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
18 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
7. Repurchase Agreements
The Fund's custodian or designated subcustodian will take control of securities
as collateral under repurchase agreements and determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements. If the seller defaults and the value of collateral
declines, or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of collateral by the Fund may be delayed or
limited.
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 .50% of the first $2.5 billion, .45% of
the next $2.5 billion and .40% in excess of $5 billion, of the Fund's average
daily net assets. Prior to September 7, 2004, the Fund paid the Adviser an
advisory fee at an annual rate of .60% of the Fund's average daily net assets.
The fee is accrued daily and paid monthly.
Pursuant to the advisory agreement, the Adviser provides certain legal and
accounting services provided to the Fund by the Adviser. For the six months
ended April 30, 2006, such fees amounted to $48,000.
The Fund compensates AllianceBernstein Investor Services, Inc. (prior to
February 24, 2006 known as Alliance Global Investor Services, Inc.) ("ABIS"), 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. ABISmay make payments to intermediaries that provide omnibus account
services, sub-accounting services and/or networking services. Such compensation
retained by ABIS amounted to $164,687 for the six months ended April 30, 2006.
For the six months ended April 30, 2006, the Fund's expenses were reduced by
$5,980 under an expense offset arrangement with ABIS.
AllianceBernstein Investments, Inc. (prior to February 24, 2006 known as
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 $462 from the sale of Class A shares
and received $2, $1,805 and $457 in contingent deferred sales charges imposed
upon redemptions by shareholders of Class A, Class B and Class C shares,
respectively, for the six months ended April 30, 2006.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 19
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to the Class A shares, 1% of the average daily net assets
attributable to both Class B and Class C shares, .50% of the Fund's average
daily net assets attributable to Class R shares and .25% of the Fund's average
daily net assets attributable to Class K shares. There are no distribution and
servicing fees on the Class I 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 $10,863,976, $2,024,205, $1,009 and
$1,038 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 April 30, 2006, were as follows:
Purchases Sales
-------------- --------------
Investment securities (excluding
U.S. government securities) $ 46,808,250 $ 70,968,056
U.S. government securities -0- 5,766,647
At April 30, 2006, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation and unrealized depreciation
(excluding foreign currency contracts) are as follows:
Gross unrealized appreciation $ 4,392,073
Gross unrealized depreciation (2,193,773)
Net unrealized appreciation $ 2,198,300
1. Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to hedge certain firm purchase and sales commitments
20 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
denominated in foreign currencies. A forward exchange currency contract is a
commitment to purchase or sell a foreign currency on a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contract and the closing of such contract would be included in net
realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
2. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 21
of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise
of an option written by the Fund could result in the Fund's selling or buying a
security or currency at a price different from the current market value. For
the six months ended April 30, 2006, the Fund had no transactions in written
options.
3. Swap Agreements
The Fund may enter into swaps to hedge its exposure to foreign currency
interest rates and credit risk or for investment purposes. A swap is an
agreement that obligates two parties to exchange a series of cash flows at
specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interim payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities or currencies.
As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Fund accrues for the interim payments on
swap contracts on a daily basis, with the net amount recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities. Once the interim payments are settled in cash, the net amount is
recorded as realized gain/loss on swaps, in addition to realized gain/loss
recorded upon the termination of swaps contracts on the statements of
operations. Prior to November 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Fund to buy/(sell) from/(to) the counterparty at the
notional amount
22 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
(the "Notional Amount") and receive/(deliver) the principal amount of the
referenced obligation. If a credit event occurs, the maximum payout amount for
a Sale Contract is limited to the Notional Amount of the swap contract
("Maximum Payout Amount"). During the term of the swap agreement, the Fund
receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
if the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the Fund coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Fund.
At April 30, 2006, the Fund had no Sale Contracts outstanding.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. The Fund had no Buy Contracts outstanding as of April
30, 2006.
NOTE E
Capital Stock
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
shares for each class were as follows:
Shares Amount
-------------------------- ------------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
2006 October 31, 2006 October 31,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class A
Shares sold 304,186 454,864 $ 1,197,297 $ 2,595,274
Shares issued in
reinvestment of
dividends and
distributions 1,346,029 350,831 7,959,517 2,001,872
Shares converted
from Class B 50,442 92,613 267,761 528,301
Shares redeemed (3,534,073) (7,229,621) (19,472,409) (41,246,376)
Net decrease (1,833,416) (6,331,313) $ (10,047,834) $ (36,120,929)
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 23
Shares Amount
-------------------------- ------------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended April 30, Year Ended
2006 October 31, 2006 October 31,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class B
Shares sold 40,160 156,247 $ 214,600 $ 892,989
Shares issued in
reinvestment of
dividends and
distributions 54,956 10,242 291,727 58,542
Shares converted
to Class A (49,468) (92,451) (267,761) (528,301)
Shares redeemed (242,250) (488,797) (1,295,598) (2,794,515)
Net decrease (196,602) (414,759) $ (1,057,032) $ (2,371,285)
Class C
Shares sold 35,396 114,618 $ 187,710 $ 654,383
Shares issued in
reinvestment of
dividends and
distributions 85,330 15,077 453,828 86,224
Shares redeemed (246,267) (513,709) (1,331,444) (2,935,900)
Net decrease (125,541) (384,014) $ (689,906) $ (2,195,293)
Six Months Six Months
Ended March 1, Ended March 1,
April 30, 2005(a) to April 30, 2005(a) to
2006 October 31, 2006 October 31,
(unaudited) 2005 (unaudited) 2005
------------ ------------ -------------- --------------
Class R
Shares sold -0- 1,772 $ -0- $ 10,100
Shares issued in
reinvestment of
dividends and
distributions 1 -0- 3 -0-
Shares redeemed (1) -0- (3) -0-
Net increase -0- 1,772 $ -0- $ 10,100
Class K
Shares sold -0- 1,763 $ -0- $ 10,050
Shares redeemed -0- -0- -0- -0-
Net increase -0- 1,763 $ -0- $ 10,050
Class I
Shares sold -0- 1,754 $ -0- $ 10,000
Shares redeemed -0- -0- -0- -0-
Net increase -0- 1,754 $ -0- $ 10,000
(a) Commencement of distribution.
24 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
NOTE F
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 expense in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 2006.
NOTE G
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies or foreign
governments involves special risks which include changes in foreign exchange
rates and the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies or foreign governments and their markets may be less
liquid and their prices more volatile than those of comparable U.S. companies
or of the U.S. Government.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE H
Distribution to Shareholders
The tax character of distributions to be paid for the fiscal year ending
October 31, 2006 will be determined at the end of the current fiscal year. The
tax char-
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 25
acter of distributions paid for the fiscal years ended October 31, 2005 and
October 31, 2004 were as follows:
2005 2004
-------------- --------------
Distributions paid from:
Ordinary income $ 3,383,149 $ 3,526,372
Total taxable distributions 3,383,149 3,526,372
Tax return of capital -0- 4,029,104
Total distributions paid $ 3,383,149 $ 7,555,476
As of October 31, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 10,076,048
Accumulated capital and other losses (23,655,569)(a)
Unrealized appreciation/(depreciation) 686,824(b)
Total accumulated earnings/(deficit) $ (12,892,697)(c)
(a) On October 31, 2005, the Fund had a net capital loss carryforward of
$22,874,488 of which $6,799,602 expires in the year 2007, $9,788,373 expires in
the year 2008, $3,634,196 expires in the year 2009, $303,013 expires in the
year 2010 and $2,349,304 expires in the year 2013. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year, $572,902 of capital loss carryforwards
expired. For the year ended October 31, 2005, the cumulative deferred loss on
straddles was $781,081.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the realization for
tax purposes of gains/losses on certain derivative instruments and the
difference between book and tax amortization methods for premium.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable primarily to dividends payable.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized
26 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
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
the Adviser's Board, directed and oversaw 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"),
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 27
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, 43 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. 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 actions against the Adviser either were
voluntarily dismissed or removed to federal court. On February 20, 2004, the
Judicial Panel on Multidistrict Litigation transferred all actions to the
United States District Court for the District of Maryland (the "Mutual Fund
MDL").
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 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.
On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual
fund shareholder claims, mutual fund derivative claims, and ERISA claims
entered into a confidential memorandum of understanding ("MOU") containing
their
28 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
agreement to settle these claims. The agreement will be documented by a
stipulation of settlement and will be submitted for court approval at a later
date.
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 Commissioner") (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 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 Commissioner 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. On April 12,
2006, respondents' petition was denied. On May 4, 2006, respondents appealed
the court's determination.
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 alleged shareholders 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,
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 29
(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
plaintiffs' 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. On May 31, 2006 the District Court
denied plaintiffs' motion for leave to file an amended 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 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.
NOTE J
Subsequent Event
On May 4, 2006, the Board of Directors of the Fund approved the liquidation and
dissolution of the Fund. As of June 5, 2006, the Fund has suspended all sales
of its shares pending the completion of the liquidation and the payment of
liquid-
30 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
dating distributions to its shareholders. The Fund expects to make the
liquidating distributions on or shortly after August 4, 2006.
In connection with the liquidation, the Board approved the immediate suspension
of the Fund's distribution and / or service (Rule 12b-1) fees. The Board also
approved the waiver of contingent deferred sales charges ("CDSCs") upon
redemptions of the Fund's shares on or after May 5, 2006. This CDSC waiver also
applies to redemptions of shares of other Alliance Bernstein Mutual Funds that
are acquired through exchange of the Fund's shares on or after May 5, 2006.
Shareholders may redeem shares of the Fund, and may exchange shares of the Fund
for shares of the same class of other AllianceBernstein Mutual Funds, until
August 4, 2006. Shareholders should be aware that the Fund is no longer
pursuing its stated investment objective or engaging in any business activities
except for the purposes of winding up its businesses and affairs, preserving
the value of its assets, paying its liabilities, and distributing its remaining
assets to shareholders.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 31
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002(a) 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $5.66 $5.68 $5.70 $5.89 $5.99 $6.08
Income From Investment
Operations
Net investment income(b) .05 .11 .14(c) .17 .19 .35
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (.01) (.02) .03 (.06) .02 .13
Net increase in net asset value
from operations .04 .09 .17 .11 .21 .48
Less: Dividends and
Distributions
Dividends from
net investment income (.05) (.11) (.09) (.03) -0- (.32)
Distributions from net realized
gain on investment and
foreign currency transactions (.36) -0- -0- -0- -0- -0-
Tax return of capital -0- -0- (.10) (.27) (.31) (.25)
Total dividends and distributions (.41) (.11) (.19) (.30) (.31) (.57)
Net asset value, end of period $5.29 $5.66 $5.68 $5.70 $5.89 $5.99
Total Return
Total investment return based
on net asset value(d) .74% 1.53% 3.11% 1.88% 3.74% 8.27%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $132,033 $151,845 $188,312 $224,504 $264,978 $289,265
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.66%(e) 1.55% 1.46% 1.49% 1.49% 1.48%
Expenses, before waivers/
reimbursements 1.66%(e) 1.55% 1.52% 1.49% 1.49% 1.48%
Net investment income 1.87%(e) 1.90% 2.39%(c) 2.87% 3.22% 5.87%
Portfolio turnover rate 34% 46% 62% 113% 115% 79%
See footnote summary on page 37.
32 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002(a) 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $5.67 $5.69 $5.71 $5.90 $6.01 $6.10
Income From Investment
Operations
Net investment income(b) .03 .07 .09(c) .12 .14 .30
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (.01) (.03) .04 (.05) .02 .13
Net increase in net asset value
from operations .02 .04 .13 .07 .16 .43
Less: Dividends and
Distributions
Dividends from
net investment income (.03) (.06) (.07) (.02) -0- (.29)
Distributions from net realized
gain on investment and
foreign currency transactions (.36) -0- -0- -0- -0- -0-
Tax return of capital -0- -0- (.08) (.24) (.27) (.23)
Total dividends and distributions (.39) (.06) (.15) (.26) (.27) (.52)
Net asset value, end of period $5.30 $5.67 $5.69 $5.71 $5.90 $6.01
Total Return
Total investment return based
on net asset value(d) .38% .78% 2.39% 1.17% 2.84% 7.49%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $4,050 $5,454 $7,831 $12,904 $13,150 $11,311
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.39%(e) 2.28% 2.21% 2.23% 2.24% 2.24%
Expenses, before waivers/
reimbursements 2.39%(e) 2.28% 2.28% 2.23% 2.24% 2.24%
Net investment income 1.13%(e) 1.16% 1.63%(c) 2.13% 2.44% 5.05%
Portfolio turnover rate 34% 46% 62% 113% 115% 79%
See footnote summary on page 37.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 33
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
----------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004 2003 2002(a) 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $5.68 $5.70 $5.71 $5.90 $6.01 $6.10
Income From Investment
Operations
Net investment income(b) .03 .07 .10(c) .13 .14 .30
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (.02) (.02) .04 (.06) .02 .13
Net increase in net asset value
from operations .01 .05 .14 .07 .16 .43
Less: Dividends and
Distributions
Dividends from
net investment income (.03) (.07) (.07) (.02) -0- (.29)
Distributions from net realized
gain on investment and
foreign currency transactions (.36) -0- -0- -0- -0- -0-
Tax return of capital -0- -0- (.08) (.24) (.27) (.23)
Total dividends and distributions (.39) (.07) (.15) (.26) (.27) (.52)
Net asset value, end of period $5.30 $5.68 $5.70 $5.71 $5.90 $6.01
Total Return
Total investment return based
on net asset value(d) .20% .81% 2.57% 1.17% 2.83% 7.48%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $7,526 $8,775 $10,991 $14,480 $17,592 $15,208
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.37%(e) 2.26% 2.17% 2.20% 2.20% 2.19%
Expenses, before waivers/
reimbursements 2.37%(e) 2.26% 2.24% 2.20% 2.20% 2.19%
Net investment income 1.16%(e) 1.18% 1.67%(c) 2.15% 2.48% 5.10%
Portfolio turnover rate 34% 46% 62% 113% 115% 79%
See footnote summary on page 37.
34 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R
-------------------------
Six Months
Ended March 1,
April 30, 2005(f) to
2006 October 31,
(unaudited) 2005
----------- -----------
Net asset value, beginning of period $5.67 $5.70
Income From Investment Operations
Net investment income(b) .05 .07
Net realized and unrealized loss on investment and
foreign currency transactions (.02) (.03)
Net increase in net asset value from operations .03 .04
Less: Dividends and Distributions
Dividends from net investment income (.05) (.07)
Distributions from net realized gain on investment
and foreign currency transactions (.36) -0-
Total dividends and distributions (.41) (.07)
Net asset value, end of period $5.29 $5.67
Total Return
Total investment return based on net asset value(d) .54% .69%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $10 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.69% 1.70%
Expenses, before waivers/reimbursements(e) 1.69% 1.70%
Net investment income(e) 1.83% 1.79%
Portfolio turnover rate 34% 46%
See footnote summary on page 37.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 35
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class K
-------------------------
Six Months
Ended March 1,
April 30, 2005(f) to
2006 October 31,
(unaudited) 2005
----------- -----------
Net asset value, beginning of period $5.67 $5.70
Income From Investment Operations
Net investment income(b) .06 .08
Net realized and unrealized loss on investment and
foreign currency transactions (.02) (.03)
Net increase in net asset value from operations .04 .05
Less: Dividends and Distributions
Dividends from net investment income (.06) (.08)
Distributions from net realized gain on investment
and foreign currency transactions (.36) -0-
Total dividends and distributions (.42) (.08)
Net asset value, end of period $5.29 $5.67
Total Return
Total investment return based on net asset value(d) .69% .90%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $9 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.39% 1.39%
Expenses, before waivers/reimbursements(e) 1.39% 1.39%
Net investment income(e) 2.14% 2.11%
Portfolio turnover rate 34% 46%
See footnote summary on page 37.
36 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class I
-------------------------
Six Months
Ended March 1,
April 30, 2005(f) to
2006 October 31,
(unaudited) 2005
----------- -----------
Net asset value, beginning of period $5.67 $5.70
Income From Investment Operations
Net investment income(b) .07 .09
Net realized and unrealized loss on investment and
foreign currency transactions (.02) (.03)
Net increase in net asset value from operations .05 .06
Less: Dividends and Distributions
Dividends from net investment income (.07) (.09)
Distributions from net realized gain on investment
and foreign currency transactions (.36) -0-
Total dividends and distributions (.43) (.09)
Net asset value, end of period $5.29 $5.67
Total Return
Total investment return based on net asset value(d) .85% 1.12%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $9 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements(e) 1.06% 1.05%
Expenses, before waivers/reimbursements(e) 1.06% 1.05%
Net investment income(e) 2.46% 2.43%
Portfolio turnover rate 34% 46%
(a) As required, effective November 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year ended
October 31, 2002 was to decrease net investment income per share by $.14,
decrease net realized and unrealized loss on investments per share by $.14 for
Class A, B and C, respectively, and decrease the ratio of net investment income
to average net assets from 5.56% to 3.22% for Class A, from 4.79% to 2.44% for
Class B and from 4.83% to 2.48% for Class C. Per share, ratios and supplemental
data for periods prior to November 1, 2001 have not been restated to reflect
this change in presentation.
(b) Based on average shares outstanding.
(c) Net of waivers/reimbursements by the Adivser.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of the total
investment return. Total return does not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Total investment return calculated for a period of less than one year is not
annualized.
(e) Annualized.
(f) Commencement of distribution.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 37
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of AllianceBernstein Multi-Market Strategy Trust (the "Fund")
was held on November 15, 2005 and adjourned until December 6, 2005 and December
19, 2005. At the November 15, 2005 Meeting, with respect to the first item of
business, the election of Directors, the third item of business, the amendment,
elimination, or reclassification as non-fundamental of the fundamental
investment restrictions, and the fourth item of business, the reclassification
of the Fund's fundamental investment objective as non-fundamental with changes
to the Fund's investment objective, the required number of outstanding shares
were voted in favor of each proposal, and each proposal was approved. At the
December 19, 2005 Meeting, with respect to the second item of business, the
approval to amend and restate the Charter of the Fund, the required number of
outstanding shares were voted in favor of the proposal, and the proposal was
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 18,344,046 870,327
David H. Dievler 18,341,896 872,477
John H. Dobkin 18,351,034 863,339
Michael J. Downey 18,345,670 868,703
William H. Foulk, Jr. 18,340,886 873,488
D. James Guzy 18,142,080 1,072,293
Marc O. Mayer 18,315,434 898,939
Marshall C. Turner, Jr. 18,349,842 864,531
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
2. The amendment and
restatement of the Fund's
charter, which repealed in
its entirety all currently
existing charter provisions
and substituted in lieu
thereof new provisions set
forth in the Form of Articles
of Amendment and
Restatement attached to
the Fund's Proxy Statement
as Appendix D. 15,528,914 626,268 1,049,976 0
38 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
3. The amendment, elimination, or reclassification as non-fundamental,
of the fundamental investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities
and Borrowing Money 13,524,498 780,449 596,324 4,313,103
3.D. Concentration of
Investments 13,651,551 686,080 563,640 4,313,103
3.E. Real Estate and Companies
that Deal in Real Estate 13,618,807 729,215 553,249 4,313,103
3.F. Commodity Contracts
and Futures Contracts 13,559,661 772,717 568,892 4,313,103
3.G. Loans 13,531,210 802,090 567,071 4,313,103
3.H. Joint Securities Trading
Accounts 13,610,028 726,534 564,708 4,313,103
3.I. Exercising Control 13,636,062 695,939 569,268 4,313,103
3.J. Other Investment
Companies 13,594,299 719,274 587,697 4,313,103
3.K. Oil, Gas and Other Types
of Minerals or Mineral
Leases 13,689,688 697,586 513,997 4,313,103
3.L. Purchases of Securities
on Margin 13,484,472 851,797 565,001 4,313,103
3.M. Short Sales 13,496,689 815,701 588,880 4,313,103
3.N. Pledging, Hypothecating,
Mortgaging, or Otherwise
Encumbering Assets 13,438,549 892,778 569,943 4,313,103
3.P. Warrants 13,537,361 770,184 593,726 4,313,103
4.a Approval of the
reclassification of the
Fund's fundamental
investment objective
as non-fundamental with
changes to the Fund's
investment objective. 13,219,353 829,021 852,896 4,313,103
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST 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
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Emilie D. Wrapp, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee, the Governance and Nominating Committee and
Independent Directors Committee.
(2) The management of and investment decisions for the Fund's portfolio are
made by the Global Fixed Income Investment Team. Messrs. Mon and Peebles are
the investment professionals with the most significant responsibility for the
day-to-day management of the Fund's portfolio.
40 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund
Small Cap Growth 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
- --------------------------------------------
Global Government Income Trust*
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Intermediate Bond Portfolio*
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National Michigan
Insured National Minnesota
Arizona New Jersey
California New York
Insured California Ohio
Florida Pennsylvania
Massachusetts 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
- --------------------------------------------
Retirement Strategies Funds
- --------------------------------------------
2000 Retirement Strategy
2005 Retirement Strategy
2010 Retirement Strategy
2015 Retirement Strategy
2020 Retirement Strategy
2025 Retirement Strategy
2030 Retirement Strategy
2035 Retirement Strategy
2040 Retirement Strategy
2045 Retirement Strategy
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 website at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. You should read the prospectus carefully before you invest.
* On July 8, 2005, New Europe Fund merged into International Research Growth
Fund. Prior to February 1, 2006, Global Government Income Trust was named
Americas Government Income Trust and Intermediate Bond Portfolio was named
Quality 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 MULTI-MARKET STRATEGY TRUST 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(1)
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P. (the "Adviser") and
AllianceBernstein Multi-Market Strategy Trust, 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 Board of Directors to perform its 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 supplying 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.
(1) It should be noted that the information in the fee summary was completed
on September 2, 2005 and presented to the Board of Directors on September 14,
2005 in accordance with the Assurance of Discontinuance between the New York
State Attorney General and the Adviser. 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.
42 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS & 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.(2)
Advisory Fee Based on % of
Fund Average Daily Net Assets
- ----------------------------------------------------------------------------
AllianceBernstein Multi-Market First $2.5 billion 0.50%
Strategy Trust, Inc. Next $2.5 billion 0.45%
Excess of $5 billion 0.40%
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:
As a % of
Fund Amount average daily net assets
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market $98,000 0.04
Strategy Trust, Inc.
The table below shows the Fund's expense ratio calculated from the beginning of
the Fund's current fiscal year through May 31, 2005.
Fund Expense Ratio(3),(4),(5),(6) Fiscal Year End
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market Class A 1.47% October 31
Strategy Trust, Inc. Class B 2.20%
Class C 2.18%
Class R 1.57%
Class K 1.28%
Class I 1.03%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The management fees charged to investment companies which the Adviser manages
and sponsors is normally higher than those charged to similar sized
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
(2) The advisory fee schedule implemented in January 2004 contemplates eight
categories of the AllianceBernstein Mutual Funds with all AllianceBernstein
Funds in each category having the same advisory fee schedule.
(3) This is the expense ratio calculated from the beginning of the Fund's
current fiscal year through May 31, 2005.
(4) The expense ratios assume that the new Class R, K and I fee schedule had
been in place since the beginning of the Fund's fiscal year.
(5) For Class K and Class I shares the expense ratios do not reflect the
administrative services fee for third party record keeping services of 0.15%
and 0.10% respectively.
(6) For Class R shares the expense ratios do not reflect the administrative
services fee for third party record keeping services of 0.20%.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 43
the Fund that are not provided to non-investment company clients include
providing office space and personnel to serve as Fund Officers, who among other
responsibilities make the certifications required under the Sarbanes-Oxley Act
of 2002, 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, legal and compliance
requirements for the Fund are more costly than those for institutional assets
due to the greater complexities and time required for investment companies,
although as previously noted, a portion of these expenses are reimbursed by the
Fund to the Adviser. In addition, managing the cash flow of an investment
company may be more difficult than that of a stable pool of assets, such as an
institutional account with little cash movement in either direction,
particularly, if the Fund is in net redemption and the Adviser is frequently
forced to sell securities to raise cash for redemptions. However, managing a
fund with positive cash flow may be easier at times than managing a stable pool
of assets. Finally, in recent years, investment advisers have been sued by
institutional clients and have suffered reputational damage both by the
attendant publicity and outcomes other than complete victories. Accordingly,
the legal and reputational risks associated with institutional accounts are
greater than previously thought, although still not equal to those related to
the mutual fund industry.
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, it is worth considering information regarding the
advisory fees charged to institutional accounts with substantially similar
investment styles as the Fund. However, with respect to the Fund the Adviser
represented that there are no institutional products which have a substantially
similar investment style as the Fund.
The Adviser also manages and sponsors retail mutual funds which are organized
in jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States resident investors. The Adviser charges the following fee for
an offshore mutual fund that invests in fixed income securities:
Asset Class Fee(7)
- ---------------------------------------------
Fixed Income 0.65%
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
(7) The fee charged to the fund includes a 0.10% fee for administrative
services.
44 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
for similar services by other investment advisers. Lipper's analysis included
the Fund's ranking with respect to the effective management fees relative to
the Lipper group median at the approximate current asset level of the Fund.(8)
Effective Lipper
Fund Management Fee(9) Group Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market 0.500 0.440 2/2
Strategy Trust, Inc.
Lipper also analyzed the expense ratio of the Fund in comparison to its Lipper
Expense Group(10). Lipper describes a Lipper Expense Group as a representative
sample of comparable funds, consisting of all funds in the investment
classification/objective with a similar load type as the subject Fund. The
Lipper Expense Universe is a broader collection of. The results of that
analysis are set forth below:
Lipper Lipper
Expense Group Group
Fund Ratio(11) Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market 1.453 1.018 2/2
Strategy Trust, Inc.
Based on this analysis the Fund's effective management fee and total expense
ratio are higher than the respective Lipper Expense Group medians although it
should be noted that the Lipper Expense Group consisted of only two funds.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Fund prepared by the Adviser for the
Board of 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 re-
(8) It should be noted that "effective management fee" is calculated by Lipper
using the Fund's contractual management fee rate at a hypothetical asset level.
The hypothetical asset level is based on the combined net assets of all classes
of the Fund, rounded up to the next $25 million. Lipper's total expense ratio
information is based on the most recent annual report except as otherwise
noted. A ranking of "1" means that the AllianceBernstein Fund has the lowest
effective fee rate in the Lipper peer group.
(9) It should be noted that the "effective management fee" rate for the Fund
does not reflect the payments by the Fund to the Adviser for certain clerical,
legal, accounting, administrative and other services. The dollar amount and
basis point impact of such payments on the Fund is discussed in Section I.
(10) 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.
(11) Most recent fiscal year end Class A share expense ratio.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 45
porting 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 from providing investment advisory services to 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, certain of
the Adviser's affiliates have business relationships with the Fund and may earn
a profit from providing other services to the Fund. The courts have referred to
this type of business opportunity as "fall-out benefits" to the Adviser and and
indicated that they should be factored into the evaluation of the total
relationship between the Funds and the Adviser. Neither case law nor common
business practice precludes the Adviser's affiliates from earning a reasonable
profit on this type of relationship. These affiliates provide transfer agent
and distribution services to the Fund and receive transfer agent fees, Rule
12b-1 payments, front-end sales loads and contingent deferred sales charges
("CDSC"). Additional information regarding distribution related fees can be
found in the prospectus of the Fund.
The Adviser's affiliate, AllianceBernstein Investment Research and Management,
Inc. ("ABIRM"), is the Fund's principal underwriter. ABIRM and the Adviser have
disclosed in the Fund's prospectus that they may make payments(12) from their
own resources, in addition to resources derived from sales loads and Rule 12b-1
fees, to firms that sell shares of the Fund. In 2004, ABIRM paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds for
distribution services and educational support. For 2005, it is anticipated,
ABIRM will pay approximately 0.04% of the average monthly assets of each of the
Fund for such purposes.
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charge from sales of the Fund's shares
in the Fund's most recent fiscal year.
Fund Amount Received
- -------------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust, Inc. $2,783
(12) The total amount paid to the financial intermediary in connection with
the sale of shares will generally not exceed the sum of (a) 0.25% of the
current year's Fund sales by that firm and (b) 0.10% of the average daily net
assets attributable to that firm over the year.
46 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
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.
Fund 12b-1 Fees Received CDSC Received
- ------------------------------------------------------------------------------
AllianceBernstein Multi-Market $831,756 $19,143
Strategy Trust, Inc.
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:
Fund AGIS Fee
- -----------------------------------------------------------------------------
AllianceBernstein Multi-Market Strategy Trust, Inc. $459,203
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule in the
Investment Advisory Agreement reflect a sharing of economies of scale to the
extent the breakpoints are reached. Based on some of the professional
literature that has 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
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 lack of cost data,
researchers had 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.
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST o 47
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF
THE FUND.
With assets under management of $516 billion as of June 30, 2005, the Adviser
has the investment experience to manage 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(13) relative to its Lipper group for the periods ended May
31, 2005:
AllianceBernstein Multi-
Market Strategy Trust, Inc.(14) Group
1 year 1/2
3 year 2/2
5 year 2/2
10 year 1/1
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Fund (in bold)(15) versus its benchmarks(16).
Periods Ending May 31, 2005
Annualized Performance
- -------------------------------------------------------------------------------
1 3 5 10 Since
Funds Year Year Year Year Inception
- -------------------------------------------------------------------------------
AllianceBernstein
Multi-Market Strategy
Trust, Inc. 3.63 3.42 4.04 6.04 3.92
Merrill Lynch 1-5 Yr.
Gov't Bond Index 2.32 3.20 5.32 5.50 5.99
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: October 12, 2005
(13) The performance rankings are for the Class A shares of the Fund.
(14) Lipper was unable to provide a universe suitable to the Fund.
(15) The Fund's performance returns are for the Class A shares of the Fund.
48 o ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
ALLIANCEBERNSTEIN MULTI-MARKET STRATEGY TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
MMST-0152-0406
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 (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 Multi-Market Strategy Trust, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: June 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: June 28, 2006
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 28, 2006