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: 811-03131
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
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: July 31, 2006
Date of reporting period: July 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
AllianceBernstein Global Technology Fund
Annual Report
July 31, 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 publishes
full portfolio holdings for the Fund monthly at www.alliancebernstein.com.
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.
September 19, 2006
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Global Technology Fund (the "Fund") for the annual reporting
period ended July 31, 2006.
Investment Objective and Policies
This open-end fund's investment objective is long-term growth of capital. Under
normal circumstances, the Fund invests at least 80% of its net assets in
securities of companies that are involved in the production, creation or
marketing of technology products and services or that use technology
extensively in the development of new or improved products or processes. The
Fund invests in well-known, established companies as well as new, smaller or
less-seasoned companies. The Fund invests in a global portfolio of securities
of U.S. and non-U.S. companies selected for their capital appreciation
potential.
The Fund may invest in any company and industry and in any type of security
with potential for capital appreciation. The Fund may invest in foreign
securities, foreign government securities and securities issued by U.S.
companies as AllianceBernstein considers most advantageous. In addition, the
Fund may invest without limit in securities of issuers in any one foreign
country and in emerging market countries.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Morgan Stanley Capital International (MSCI) World Information Technology Index,
for the six- and 12-month periods ended July 31, 2006. Also included is the
performance of the MSCI World Index, and the Lipper Science and Technology
Index (the "Lipper Index"), a performance index of the largest qualifying funds
that have a science and technology investment objective.
Technology stocks underperformed the broader stock markets significantly during
the six- and 12-month periods ended July 31, 2006. The Fund also underperformed
its technology benchmark during these time frames. The year was a challenging
one for the Fund's bottom-up stock-selection-driven process, as negative
returns were primarily driven by weak stock selection during both periods.
During the six-month period ended July 31, 2006, the Fund underperformed its
benchmark, the MSCI World Information Technology Index (MWIT), by a substantial
measure, as did the peer group, represented here by the Lipper Index.
Exceptionally weak stock selection among semiconductor, communication equipment
and software holdings hurt Fund performance, even though the Fund was
underweight in both sectors. Stock selection among computer services,
Internet-related and cellular holdings contributed positively to relative
performance, but were not enough to offset the negative returns. Currency also
negatively impacted performance in the six-month period, although this was a
by-product of stock selection and portfolio construction.
For the 12-month period ended July 31, 2006, the Fund also underperformed the
MWIT benchmark. Poor stock selection among software, communication equipment
and hardware/
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 1
storage holdings drove most of the negative performance results, more than
offsetting the positive impact of holdings in the Internet and cellular
services segments. Currency was also a negative contributor for the year.
Market Review and Investment Strategy
In the year ended July 31, 2006, technology stocks, as measured by the MWIT,
followed seasonal trading patterns, rising sharply at the end of the calendar
year and into the first quarter, and then trading off during the summer months.
The fourth quarter rally effect has been the rule for nine of the past 12
years. Given the macroeconomic concerns that weighed on the broader market
through much of the year, the typically more-defensive electronic equipment,
component and computer services groups saw particular strength. However, that
was more than offset by weakness in semiconductors, contract manufacturers,
software and communication equipment.
During the six-month period ended July 31, 2006, the Fund's holdings in
computer services, electronic equipment and telecommunication service providers
were increased. Meanwhile, positions in semiconductor components and capital
equipment were reduced. At the end of the period, the Fund retained its
greatest overweight in the Internet-related and telecommunications groups when
compared to the MWIT, and its greatest underweight in the semiconductor,
hardware/storage and software groups.
The Fund's portfolio manager continues to seek investments in companies whose
prospective earnings growth, as determined by AllianceBernstein's internal
research analysis, is not fully reflected in current market valuation. Within
that framework, the Fund continues to be diversified across multiple industries
within the technology sector and to take a global perspective on the technology
market.
2 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our
website 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.
All fees and expenses related to the operation of the Fund have been deducted.
NAV returns do not reflect sales charges; if sales charges were reflected, the
Fund's quoted performance would be lower. SEC returns reflect the applicable
sales charges for each share class: a 4.25% maximum front-end sales charge for
Class A shares; the applicable contingent deferred sales charge for Class B
shares (4% year 1, 3% year 2, 2% year 3, 1% year 4) and a 1% 1 year contingent
deferred sales charge for Class C shares. Returns for the different share
classes will vary due to different expenses associated with each class.
Performance assumes reinvestment of distributions and does not account for
taxes.
Benchmark Disclosure
Neither the unmanaged Morgan Stanley Capital International (MSCI) World
Information Technology Index (MWIT) nor the MSCI World Index reflects fees and
expenses associated with the active management of a mutual fund portfolio. The
MSCI World Information Technology Index is a capitalization-weighted index that
monitors the performance of technology stocks from around the world. The MSCI
World Index is a free float-adjusted market capitalization index that is
designed to measure global developed market equity performance. The unmanaged
Lipper Science and Technology Fund Index is an equally-weighted performance
index, adjusted for capital gains distributions and income dividends, of the
largest qualifying funds that have a science and technology investment
objective. (According to Lipper, this investment objective includes those funds
that invest at least 65% of their equity portfolios in science and technology
stocks.) These funds have generally similar investment objectives to the Fund,
although some may have different investment policies and sales and management
fees. An investor cannot invest directly in an index, and its results are not
indicative of the performance of any specific investment, including the Fund.
The MSCI World Information Technology Index and the MSCI World Index values are
calculated using net returns. In calculating net returns, the dividend is
reinvested after deduction of withholding tax, applying the rate to
non-resident individuals who do not benefit from double taxation treaties.
A Word About Risk
The Fund concentrates its investments in technology-related stocks and may
therefore be subject to greater risks and volatility than a fund with a more
diversified portfolio. Technology stocks, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall stock
market. The Fund can invest in foreign securities. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse issuer,
political, regulatory, market or economic developments. In addition, because
the Fund will invest in foreign currency-denominated securities, fluctuations
in the value of the Fund's investments may be magnified by changes in foreign
exchange rates. While the Fund invests principally in common stocks and other
equity securities, in order to achieve its investment objectives, the Fund may
at times use certain types of investment derivatives, such as options, futures,
forwards and swaps. These instruments involve risks different from, and in
certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the Fund's prospectus.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK -------------------------
PERIODS ENDED JULY 31, 2006 6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein Global Technology Fund
Class A -13.68% -3.40%
Class B -14.00% -4.13%
Class C -13.99% -4.09%
Advisor Class* -13.56% -3.11%
Class R* -13.70% -3.37%
Class K* -13.56% -3.09%
Class I* -13.43% -2.78%
MSCI World Information Technology Index -10.81% -1.44%
MSCI World Index 2.16% 13.69%
Lipper Science & Technology Index -12.94% -3.09%
* Please note that these share classes are for investors purchasing shares
through institutional pension plans and investment advisory clients of, and
certain other persons associated with, the Adviser and its affiliates or the
Funds.
GROWTH OF A $10,000 INVESTMENT IN THE FUND
7/31/96 TO 7/31/06
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
MSCI World Index: $20,398
AllianceBernstein Global Technology Fund Class A: $15,616
MSCI World Information Technology Index: $18,786
AllianceBernstein Global MSCI World
Technology Fund Information MSCI World
Class A Technology Index Index
- -------------------------------------------------------------------------------
7/31/96 $ 9,575 $10,000 $10,000
7/31/97 $14,124 $17,466 $13,260
7/31/98 $15,931 $20,505 $14,811
7/31/99 $22,821 $33,226 $17,109
7/31/00 $36,992 $47,304 $18,710
7/31/01 $20,497 $21,736 $15,142
7/31/02 $11,849 $13,092 $11,914
7/31/03 $13,556 $15,878 $12,960
7/31/04 $14,041 $17,382 $15,238
7/31/05 $16,161 $19,059 $17,941
7/31/06 $15,612 $18,786 $20,398
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Global Technology Fund Class A shares (from 7/31/96 to
7/31/06) as compared to the performance of the Fund's benchmark, the MSCI World
Information Technology Index, along with the MSCI World Index. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains distributions.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JULY 31, 2006
NAV Returns SEC Returns
- -------------------------------------------------------------------------------
Class A Shares
1 Year -3.40% -7.50%
5 Years -5.30% -6.12%
10 Years 5.01% 4.56%
Class B Shares
1 Year -4.13% -7.97%
5 Years -6.03% -6.03%
10 Years(a) 4.39% 4.39%
Class C Shares
1 Year -4.09% -5.05%
5 Years -5.99% -5.99%
10 Years 4.25% 4.25%
Advisor Class Shares+
1 Year -3.11% -3.11%
5 Years -5.02% -5.02%
Since Inception* 3.78% 3.78%
Class R Shares+
1 Year -3.37% -3.37%
Since Inception* 0.25% 0.25%
Class K Shares+
1 Year -3.09% -3.09%
Since Inception* 0.99% 0.99%
Class I Shares+
1 Year -2.78% -2.78%
Since Inception* 1.29% 1.29%
(a) Assumes conversion of Class B shares into Class A shares after eight
years.
* Inception Dates: 10/1/96 for Advisor Class shares; 11/3/03 for Class R
shares; 3/1/05 for Class K and Class I shares.
+ 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 and investment advisory clients of, and certain
other persons associated with, the Adviser and its affiliates or the Funds. The
inception dates for these share classes are listed above.
See Historical Performance disclosures on page 3.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND 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 (JUNE 30, 2006)
SEC Returns
- -------------------------------------------------------------------------------
Class A Shares
1 Year 0.05%
5 Years -6.72%
10 Years 4.15%
Class B Shares
1 Year -0.33%
5 Years -6.63%
10 Years(a) 3.99%
Class C Shares
1 Year 2.73%
5 Years -6.60%
10 Years 3.85%
Advisor Class Shares+
1 Year 4.78%
5 Years -5.63%
Since Inception* 4.26%
Class R Shares+
1 Year 4.50%
Since Inception* 1.88%
Class K Shares+
1 Year 4.86%
Since Inception* 4.34%
Class I Shares+
1 Year 5.17%
Since Inception* 4.64%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception Dates: 10/1/96 for Advisor Class shares; 11/3/03 for Class R
shares; 3/1/05 for Class K and Class I shares.
+ Please note that these share classes are for investors purchasing shares
through institutional pension plans and investment advisory clients of, and
certain other persons associated with, the Adviser and its affiliates or the
Funds.
See Historical Performance disclosures on page 3.
6 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
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
February 1, 2006 July 31, 2006 During Period*
- ---------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
- ---------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $863.20 $1,017.90 $6.42 $6.95
Class B $1,000 $1,000 $860.00 $1,014.08 $9.96 $10.79
Class C $1,000 $1,000 $860.15 $1,014.28 $9.78 $10.59
Advisor
Class $1,000 $1,000 $864.43 $1,019.39 $5.04 $5.46
Class R $1,000 $1,000 $862.99 $1,017.26 $7.02 $7.60
Class K $1,000 $1,000 $864.42 $1,018.89 $5.50 $5.96
Class I $1,000 $1,000 $865.72 $1,020.23 $4.26 $4.61
* Expenses are equal to the classes' annualized expense ratios of 1.39%,
2.16%, 2.12% , 1.09%, 1.52%, 1.19% and 0.92%, respectively, multiplied by the
average account value over the period, multiplied by 181/365 (to reflect the
one-half year period).
** Assumes 5% return before expenses.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 7
PORTFOLIO SUMMARY
July 31, 2006
PORTFOLIO STATISTICS
Net Assets ($mil): $1,664.9
SECTOR BREAKDOWN*
Technology
[ ] 18.1% Communication Equipment
[ ] 16.9% Software
[ ] 10.9% Computer Hardware/Storage
[ ] 8.5% Computer Services
[ ] 8.0% Internet Media
[ ] 6.9% Semi-Conductor Components
[ ] 6.4% Miscellaneous
[ ] 4.0% Computer Peripherals [PIE CHART OMITTED.]
[ ] 2.5% Internet Infrastructure
[ ] 1.8% Semi-Conductor Capital Equipment
[ ] 1.5% Electronic Components
[ ] 0.8% Contract Manufacturing
[ ] 0.7% Communication Services
[ ] 0.5% Internet Services
Consumer Services
[ ] 4.8% Cellular Communications
[ ] 1.3% Broadcasting & Cable
[ ] 1.0% Advertising
Utilities
[ ] 1.3% Telephone Utility
Capital Goods
[ ] 0.9% Miscellaneous
Consumer Manufacturing
[ ] 0.8% Appliances
[ ] 2.4% Short-Term
* All data are as of July 31, 2006. The Fund's sector breakdown is expressed
as a percentage of total investments (excluding security lending collateral)
and may vary over time.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser. These sector classifications
are broadly defined. The "Portfolio of Investments" section of the report
reflects more specific industry information and is consistent with the
investment restrictions discussed in the Fund's prospectus.
8 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
PORTFOLIO SUMMARY
July 31, 2006
COUNTRY BREAKDOWN*
[ ] 62.2% United States
[ ] 9.4% Japan
[ ] 4.1% Mexico
[ ] 3.6% France
[ ] 2.8% South Korea
[ ] 2.6% Taiwan
[ ] 2.6% Germany [PIE CHART OMITTED.]
[ ] 1.9% India
[ ] 1.6% Finland
[ ] 1.2% Cayman Islands
[ ] 1.2% Netherlands
[ ] 1.1% Channel Islands
[ ] 0.9% Italy
[ ] 2.4% Other
[ ] 2.4% Short-Term
TEN LARGEST HOLDINGS**
July 31, 2006
Percent of
Company U.S. $ Value Net Assets
- -------------------------------------------------------------------------------
Google, Inc. Cl A. $103,724,780 6.2%
Cisco Systems, Inc. 82,465,215 5.0
Apple Computer, Inc. 77,161,784 4.6
Canon, Inc. 70,913,535 4.3
Microsoft Corp. 69,228,027 4.2
America Movil S.A. de C.V. (ADR) 68,633,196 4.1
Motorola, Inc. 67,217,108 4.1
QUALCOMM, Inc. 67,089,202 4.0
Cap Gemini, SA 48,805,495 2.9
Oracle Corp. 45,059,700 2.7
$700,298,042 42.1%
* All data are as of July 31, 2006. The Fund's country breakdown is expressed
as a percentage of total investments (excluding security lending collateral)
and may vary over time. "Other" country weightings represent less than 2%
weightings in Bahamas, Netherlands Antilles and Russia.
** Long-term investments.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 9
PORTFOLIO OF INVESTMENTS
July 31, 2006
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER
INVESTMENTS-97.3%
Technology-87.2%
Communication Equipment-18.0%
Alcatel, SA(a)* 1,039,076 $11,699,724
Ciena Corp.(a)* 2,985,800 10,838,454
Cisco Systems, Inc.(a)* 4,619,900 82,465,215
Finisar Corp.(a)* 2,165,900 6,064,520
JDS Uniphase Corp.(a)* 6,363,200 13,553,616
Juniper Networks, Inc.(a)* 1,104,300 14,852,835
Motorola, Inc. 2,953,300 67,217,108
Nokia Oyj 1,335,689 26,517,068
QUALCOMM, Inc. 1,902,700 67,089,202
------------
300,297,742
Communication Services-0.8%
NeuStar, Inc. Class A(a)* 407,900 12,587,794
Computer Hardware/Storage-10.8%
Apple Computer, Inc.(a) 1,135,400 77,161,784
International Business Machines Corp.* 435,700 33,727,537
NEC Corp. 3,773,000 20,757,334
Seagate Technology(a)* 582,300 13,509,360
Sun Microsystems, Inc.(a)* 8,138,600 35,402,910
------------
180,558,925
Computer Peripherals-4.0%
Foxconn Technology Co., Ltd. 2,596,000 18,734,539
High Tech Computer Corp. 597,600 13,280,163
Network Appliance, Inc.(a)* 1,139,600 33,834,724
------------
65,849,426
Computer Services-8.4%
Alliance Data Systems Corp.(a)* 304,500 15,626,940
Cap Gemini, SA 908,106 48,805,495
Cognizant Technology Solutions Corp. Class A(a)* 362,900 23,766,321
Fiserv, Inc.(a) 481,870 21,038,444
Infosys Technologies, Ltd. (ADR)* 602,200 24,744,398
WNS Holdings, Ltd. (ADR)(a) 265,500 6,664,050
------------
140,645,648
Contract Manufacturing-0.8%
HON HAI Precision Industry Co., Ltd.
Citigroup Global Markets warrants,
expiring 1/17/07(a)(b) 2,286,028 13,541,744
Electronic Components-1.5%
AU Optronics, Credit Suisse First Boston
warrants, expiring 3/05/09(a) 8,991,000 12,902,085
Largan Precision Co., Ltd. 546,000 11,501,556
------------
24,403,641
10 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Internet Infrastructure-2.5%
Akamai Technologies, Inc.(a)* 668,700 $26,500,581
Fastweb(a)* 372,713 14,428,232
------------
40,928,813
Internet Media-8.0%
Google, Inc. Class A(a)* 268,300 103,724,780
Yahoo!, Inc.(a)* 1,062,600 28,838,964
------------
132,563,744
Internet Services-0.5%
Ctrip.com International, Ltd. (ADR)* 138,600 7,015,239
Gmarket, Inc. (ADR)(a)* 119,100 1,730,523
------------
8,745,762
Semiconductor Capital Equipment-1.8%
Applied Materials, Inc. 691,500 10,884,210
ASML Holding N.V.(a) 996,060 19,718,107
------------
30,602,317
Semiconductor Components-6.9%
Advanced Micro Devices, Inc.(a)* 554,500 10,751,755
Broadcom Corp. Class A(a)* 728,250 17,470,717
Hynix Semiconductor, Inc.(a) 708,920 24,106,557
Hynix Semiconductor, Inc. (GDR)(a)(b) 68,200 2,301,750
Intersil Corp. Class A* 987,400 23,213,774
PMC-Sierra, Inc.(a)* 921,300 4,707,843
Samsung Electronics Co., Ltd. 19,905 12,664,693
Samsung Electronics Co., Ltd. (GDR)(b) 18,645 5,933,771
Taiwan Semiconductor Manufacturing Co., Ltd.,
Merrill Lynch International & Co. warrants,
expiring 11/08/10(a) 7,717,245 12,910,951
------------
114,061,811
Software-16.8%
Adobe Systems, Inc.(a)* 1,068,400 30,460,084
Amdocs, Ltd.(a) 507,900 18,426,612
BEA Systems, Inc.(a)* 2,312,200 27,145,228
Citrix Systems, Inc.(a)* 631,500 20,062,755
Microsoft Corp. 2,880,900 69,228,027
Omniture, Inc.(a)* 544,500 3,925,845
Oracle Corp.(a) 3,010,000 45,059,700
Red Hat, Inc.(a)* 539,100 12,765,888
Salesforce.com, Inc.(a)* 368,600 9,473,020
SAP AG (ADR)* 952,600 43,467,138
------------
280,014,297
Miscellaneous-6.4%
Canon, Inc. 1,485,300 70,913,535
Hoya Corp. 1,027,200 35,928,928
------------
106,842,463
------------
1,451,644,127
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 11
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
Consumer Services-7.1%
Advertising-1.0%
aQuantive, Inc.(a)* 787,200 $16,137,600
Broadcasting & Cable-1.3%
News Corp. Class A 1,123,800 21,621,912
Cellular Communications-4.8%
America Movil S.A. de C.V. (ADR)* 1,918,200 68,633,196
OAO Vimpel-Communications (ADR)(a)* 231,300 11,148,660
------------
79,781,856
------------
117,541,368
Utilities-1.3%
Telephone Utility-1.3%
AT&T, Inc.* 727,300 21,811,727
Capital Goods-0.9%
Miscellaneous-0.9%
Nitto Denko Corp. 204,300 14,844,072
Consumer Manufacturing-0.8%
Appliances-0.8%
Sony Corp. 298,900 13,514,042
Total Common Stocks & Other Investments
(cost $1,509,393,115) 1,619,355,336
SHORT-TERM INVESTMENT-2.4%
Time Deposit-2.4%
State Street Euro Dollar
4.60%, 8/01/06
(cost $40,599,000) $ 40,599 40,599,000
Total Investments Before Security Lending
Collateral-99.7%
(cost $1,549,992,115) 1,659,954,336
12 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
INVESTMENT OF CASH COLLATERAL FOR
SECURITIES LOANED-28.9%
Short-Term Investments
Goldman Sachs 5.41%-5.42%,
9/01/06-10/18/06 $ 75,000 $75,204,542
Morgan Stanley 5.38%, 10/17/06-11/28/06 75,000 75,236,445
Sigma Finance, Inc. 5.26%, 3/22/07 40,000 40,058,444
------------
190,499,431
------------
UBS Private Money Market Fund, LLC, 290,324,335 290,324,335
Total Investment of Cash Collateral for
Securities Loaned
(cost $480,823,766) 480,823,766
Total Investments-128.6%
(cost $2,030,815,881) 2,140,778,102
Other assets less liabilities-(28.6)% (475,916,626)
Net Assets-100% $1,664,861,476
* Represents entire or partial securities out on loan. See Note E for
securities lending information.
(a) Non-income producing security.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At July 31, 2006, the aggregate market value of these securities
amounted to $21,777,265 or 1.3% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See notes to financial statements.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 13
STATEMENT OF ASSETS & LIABILITIES
July 31, 2006
Assets
Investments in securities, at value
(cost $2,030,815,881--including investment of cash
collateral for securities loaned of $480,823,766) $2,140,778,102(a)
Cash 298
Foreign cash, at value (cost $9,396,860) 9,317,530
Receivable for investment securities sold 21,191,256
Receivable for capital stock sold 5,155,025
Dividends and interest receivable 1,387,267
Receivable for securities lending collateral 833,097
Total assets 2,178,662,575
Liabilities
Payable for collateral on securities loaned 481,656,863
Payable for investment securities purchased 13,762,715
Payable for capital stock redeemed 11,621,479
Advisory fee payable 3,121,600
Transfer Agent fee payable 1,174,930
Distribution fee payable 216,773
Administrative fee payable 46,677
Accrued expenses 2,200,062
Total liabilities 513,801,099
Net Assets $1,664,861,476
Composition of Net Assets
Capital stock, at par $320,060
Additional paid-in capital 4,056,763,275
Accumulated net investment loss (1,138,586)
Accumulated net realized loss on investment and
foreign currency transactions (2,500,971,386)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 109,888,113
$1,664,861,476
Net Asset Value Per Share--21 billion shares of capital stock authorized,
$.01 par value
Shares Net Asset
Class Net Assets Outstanding Value
- -------------------------------------------------------------------------------
A $880,238,995 16,109,028 $54.64*
B $549,277,052 11,221,090 $48.95
C $188,275,313 3,840,518 $49.02
Advisor $46,296,839 821,262 $56.37
R $480,784 8,815 $54.54
K $10,213 185.87 $54.95
I $282,280 5,116 $55.18
* The maximum offering price per share for Class A shares was $57.07 which
reflects a sales charge of 4.25%.
(a) Includes securities on loan with a value of $457,297,684 (see Note E).
See notes to financial statements.
14 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
STATEMENT OF OPERATIONS
Year Ended July 31, 2006
Investment Income
Dividends (net of foreign taxes withheld
of $774,103) $13,001,275
Interest 1,618,099 $14,619,374
Expenses
Advisory fee 14,998,782
Distribution fee--Class A 3,105,443
Distribution fee--Class B 7,323,565
Distribution fee--Class C 2,376,156
Distribution fee--Class R 1,307
Distribution fee--Class K 28
Transfer agency--Class A 4,833,070
Transfer agency--Class B 3,942,728
Transfer agency--Class C 1,171,079
Transfer agency--Advisor Class 246,804
Transfer agency--Class R 680
Transfer agency--Class K 23
Transfer agency--Class I 112
Printing 2,431,218
Custodian 665,093
Legal 140,694
Administrative 139,996
Registration 106,789
Directors' fees 62,134
Audit 55,994
Miscellaneous 94,229
Total expenses 41,695,924
Less: expense offset arrangement
(see Note B) (221,356)
Net expenses 41,474,568
Net investment loss (26,855,194)
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions 265,487,346
Foreign currency transactions (1,323,064)
Net change in unrealized
appreciation/depreciation of:
Investments (280,855,202)
Foreign currency denominated
assets and liabilities 283,760
Net loss on investment and
foreign currency transactions (16,407,160)
Net Decrease in Net Assets
from Operations $(43,262,354)
See notes to financial statements.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 15
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
July 31, 2006 July 31, 2005
-------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss $(26,855,194) $(25,420,506)
Net realized gain on investment and
foreign currency transactions 264,164,282 316,348,623
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (280,571,442) 47,086,958
Net increase (decrease) in net assets
from operations (43,262,354) 338,015,075
Capital Stock Transactions
Net decrease (555,332,698) (681,181,415)
Total decrease (598,595,052) (343,166,340)
Net Assets
Beginning of period 2,263,456,528 2,606,622,868
End of period, (including accumulated
net investment loss of ($1,138,586)
and ($1,619,944), respectively) $1,664,861,476 $2,263,456,528
See notes to financial statements.
16 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 2006
NOTE A
Significant Accounting Policies
AllianceBernstein Global Technology Fund, Inc. (the "Fund"), organized as a
Maryland corporation on December 24, 1980, is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Fund offers Class A, Class B, Class C, Advisor Class, Class R, Class K and
Class I shares. Class A shares are sold with a front-end sales charge of up to
4.25% for purchases not exceeding $1,000,000. With respect to purchases of
$1,000,000 or more, Class A shares redeemed within one year of purchase may be
subject to a contingent deferred sales charge of 1%. Class B shares are
currently sold with a contingent deferred sales charge which declines from 4%
to zero depending on the period of time the shares are held. Class B shares
will automatically convert to Class A shares eight years after the end of the
calendar month of purchase. Class C shares are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
Class R and Class K shares are sold without an initial or contingent deferred
sales charge. Advisor Class and Class I shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. All seven classes of shares have identical voting, dividend,
liquidation and other rights, except that the classes bear different
distribution and transfer agency expenses. Each class 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 (other than securities listed on The NASDAQ Stock Market,
Inc. ("NASDAQ")) 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 ref-
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 17
erence to the principal exchange on which the securities are traded; securities
listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing
Price; listed put or call options are valued at the last sale price. If there
has been no sale on that day, such securities will be valued at the closing bid
prices on that day; open futures contracts and options thereon are valued using
the closing settlement price or, in the absence of such a price, the most
recent quoted bid price. If there are no quotations available for the day of
valuation, the last available closing settlement price is used; securities
traded in the over-the-counter market, ("OTC") 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. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward currency exchange 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
18 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date, or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade 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 outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except for class
specific expenses which are allocated to the respective class. 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, if any, are recorded on the
ex-dividend date. Income dividends and capital gain 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
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 19
accounts based on their federal tax basis treatment; temporary differences do
not require such reclassification.
NOTE B
Advisory Fee and Other Transactions With Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser
a quarterly advisory fee equal to the following percentages of the value of the
Fund's aggregate net assets at the close of business on the last business day
of the previous quarter: .25 of .75% of the first $2.5 billion, .25 of .65% of
the next $2.5 billion, and .25 of .60% of the net assets in excess of $5
billion. Prior to September 7, 2004, the Fund paid the Adviser a quarterly
advisory fee equal to the following percentages of the value of the Fund's
aggregate net assets at the close of business on the last business day of the
previous quarter: .25 of 1.00% of the first $10 billion, .25 of .975% of the
next $2.5 billion, .25 of .95% of the next $2.5 billion, .25 of .925% of the
next $2.5 billion, .25 of .90% of the next $2.5 billion, .25 of .875% of the
next $2.5 billion and .25 of .85% of the net assets in excess of $22.5 billion.
Pursuant to the advisory agreement, the Fund paid $139,996 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended July 31, 2006.
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. ABIS may make payments to intermediaries that provide omnibus account
services, sub-accounting services and/or networking services. Such compensation
retained by ABIS amounted to $5,265,704 for the year ended July 31, 2006.
For the year ended July 31, 2006 the Fund's expenses were reduced by $221,356
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 $21,587 from the sales of Class A
shares and received $25,651, $396,992 and $20,110 in contingent deferred sales
charges imposed upon redemptions by shareholders of Class A, Class B and Class
C shares, respectively, for the year ended July 31, 2006.
Brokerage commissions paid on investment transactions for the year ended July
31, 2006 amounted to $5,901,509, of which $99,904 and $0, respectively, was
20 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares, 1% of the Fund's 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 Advisor Class and 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 $71,437,602, $7,354,007, $4,291
and $106 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 year ended July 31, 2006, were as follows:
Purchases Sales
Investment securities (excluding
U.S. government securities) $2,127,915,962 $2,705,905,027
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency
transactions) are as follows:
Cost $2,051,438,863
Gross unrealized appreciation $178,310,771
Gross unrealized depreciation (88,971,532)
Net unrealized appreciation $89,339,239
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 21
NOTE E
Securities Lending
The Fund has entered into a securities lending agreement with AG Edwards &
Sons, Inc. (the "Lending Agent"). Under the terms of the agreement, the Lending
Agent, on behalf of the Fund, administers the lending of portfolio securities
to certain broker-dealers. In return, the Fund receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Fund also continues to receive dividends
or interest on the securities loaned. Unrealized gain or loss on the value of
the securities loaned that may occur during the term of the loan will be
reflected in the accounts of the Fund. All loans are continuously secured by
collateral exceeding the value of the securities loaned. All collateral
consists of either cash or U.S. government securities. The Lending Agent may
invest the cash collateral received in accordance with the investment
restrictions of the Fund in one or more of the following investments: U.S.
government or U.S. government agency obligations, bank obligations, corporate
debt obligations, asset-backed securities, investment funds, structured
products, repurchase agreements and an eligible money market fund. The Lending
Agent will indemnify the Fund for any loss resulting from a borrower's failure
to return a loaned security when due. As of July 31, 2006, the Fund had loaned
securities with a value of $457,297,684 and received cash collateral which was
invested in short-term securities valued at $481,656,863 as included in the
accompanying portfolio of investments. For the year ended July 31, 2006, the
Fund earned fee income of $615,280 which is included in interest income in the
accompanying statement of operations.
NOTE F
Capital Stock
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
shares for each class were as follows:
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2006 2005 2006 2005
------------ ------------ -------------- --------------
Class A
Shares sold 1,688,625 2,456,834 $100,343,437 $130,037,929
Shares converted
from Class B 1,351,794 1,682,744 79,836,061 89,617,305
Shares redeemed (5,799,101) (7,906,183) (343,536,796) (419,749,339)
Net decrease (2,758,682) (3,766,605) $(163,357,298) $(200,094,105)
Class B
Shares sold 376,243 660,395 $20,154,142 $31,510,524
Shares converted
to Class A (1,502,909) (1,857,510) (79,836,061) (89,617,305)
Shares redeemed (4,184,481) (6,892,521) (222,222,773) (330,712,326)
Net decrease (5,311,147) (8,089,636) $(281,904,692) $(388,819,107)
22 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Shares Amount
--------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2006 2005 2006 2005
------------ ------------ -------------- --------------
Class C
Shares sold 195,628 295,876 $10,485,058 $14,147,220
Shares redeemed (1,473,140) (2,178,477) (78,470,264) (104,653,626)
Net decrease (1,277,512) (1,882,601) $(67,985,206) $(90,506,406)
Advisor Class
Shares sold 123,015 246,857 $7,667,572 $13,650,297
Shares redeemed (858,679) (285,553) (50,517,893) (15,474,015)
Net decrease (735,664) (38,696) $(42,850,321) $(1,823,718)
Class R
Shares sold 8,078 1,152 $492,279 $57,709
Shares redeemed (578) (314) (34,194) (15,860)
Net increase 7,500 838 $458,085 $41,849
March 1, March 1,
2005(a) to 2005(a) to
July 31, 2005 July 31, 2005
------------ --------------
Class K
Shares sold -0- 186 $-0- $10,072
Net increase -0- 186 $-0- $10,072
Class I
Shares sold 5,550 185 $342,950 $10,000
Shares redeemed (619) -0- (36,216) -0-
Net increase 4,931 185 $306,734 $10,000
(a)Commencement of distribution.
NOTE G
Risks Involved in Investing in the Fund
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 the 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.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 23
NOTE H
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended July 31, 2006.
NOTE I
Components of Accumulated Earnings (Deficit)
As of July 31, 2006, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Accumulated capital and other losses $(2,481,486,990)(a)
Unrealized appreciation/(depreciation) 89,265,131
Total accumulated earnings/(deficit) $(2,392,221,859)(b)
(a) On July 31, 2006, the Fund had a net capital loss carryforward for
federal income tax purposes of $2,480,348,404, of which $698,729,016 expires in
the year 2009, $1,330,398,762 expires in the year 2010, and $451,220,626
expires in the year 2011. During the fiscal year, the Fund utilized capital
loss carryforwards of $245,412,082. To the extent future capital gains are
offset by capital loss carryforwards, such gains will not be distributed. Net
capital loss incurred after October 31, and within the taxable year are deemed
to arise on the first business day of the Funds' next taxable year. For the
year ended July 31, 2006, the Fund deferred to August 1, 2006, post-October
currency losses of $1,138,586.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales.
During the current fiscal year, permanent differences primarily due to a net
investment loss, and the tax treatment of foreign currency gains and losses,
resulted in a net decrease in accumulated net investment loss and a
corresponding decrease in both accumulated net realized loss on investment and
foreign currency transactions and in additional paid in capital. This
reclassification had no effect on net assests.
NOTE J
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the Office of New York Attorney General ("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.
24 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
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.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 25
On October 2, 2003, a purported class action complaint entitled Hindo, et al.
v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market timing" of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, 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.
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 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. The derivative claims brought on behalf of Alliance Holding remain
pending.
26 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
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 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,
(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),
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 27
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. On July 5,
2006, plaintiffs filed a notice of appeal.
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 K
Recent Accounting Pronouncement
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Fund's tax returns to determine whether the tax
posi-
28 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
tions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006 and is to
be applied to all open tax years as of the effective date. At this time,
management is evaluating the implications of FIN 48 and its impact in the
financial statements has not yet been determined.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 29
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
------------------------------------------------------------------------------------------
December 1, Year Ended
Year Ended July 31, 2002 to November 30,
------------------------------------------- July 31, -----------------------
2006 2005 2004 2003(a) 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $56.56 $49.14 $47.44 $43.48 $67.05 $95.32
Income From Investment
Operations
Net investment loss(b) (.56) (.34)(c) (.72)(c)(d) (.54) (.87) (.82)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (1.36) 7.76 2.42 4.50 (22.70) (21.17)
Net increase (decrease)
in net asset value
from operations (1.92) 7.42 1.70 3.96 (23.57) (21.99)
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (5.86)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.42)
Total distributions -0- -0- -0- -0- -0- (6.28)
Net asset value,
end of period $54.64 $56.56 $49.14 $47.44 $43.48 $67.05
Total Return
Total investment return
based on net
asset value(e) (3.40)% 15.10% 3.58% 9.11% (35.15)% (24.90)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $880,239 $1,067,072 $1,112,174 $1,186,488 $1,096,744 $1,926,473
Ratio to average net
assets of:
Expenses, net of waivers/
reimbursements 1.67%(f)(g) 1.66% 1.65% 2.24%(h) 1.85% 1.58%
Expenses, before waivers/
reimbursements 1.67%(f)(g) 1.68% 1.81% 2.24%(h) 1.85% 1.58%
Net investment loss (.95)%(f) (.65)%(c) (1.36)%(c)(d) (1.95)%(h) (1.64)% (1.08)%
Portfolio turnover rate 106% 80% 80% 127% 117% 55%
See footnote summary on page 36.
30 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
------------------------------------------------------------------------------------------
December 1, Year Ended
Year Ended July 31, 2002 to November 30,
------------------------------------------- July 31, -----------------------
2006 2005 2004 2003(a) 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $51.06 $44.71 $43.49 $40.06 $62.27 $89.59
Income From Investment
Operations
Net investment loss(b) (.92) (.68)(c) (1.03)(c)(d) (.69) (1.16) (1.28)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (1.19) 7.03 2.25 4.12 (21.05) (19.76)
Net increase (decrease) in
net asset value from
operations (2.11) 6.35 1.22 3.43 (22.21) (21.04)
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (5.86)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.42)
Total distributions -0- -0- -0- -0- -0- (6.28)
Net asset value,
end of period $48.95 $51.06 $44.71 $43.49 $40.06 $62.27
Total Return
Total investment return
based on net
asset value(e) (4.13)% 14.20% 2.81% 8.56% (35.67)% (25.46)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $549,277 $844,111 $1,100,840 $1,453,453 $1,539,144 $3,092,947
Ratio to average net
assets of:
Expenses, net of waivers/
reimbursements 2.46%(f)(g) 2.43% 2.42% 3.02%(h) 2.58% 2.31%
Expenses, before waivers/
reimbursements 2.46%(f)(g) 2.46% 2.58% 3.02%(h) 2.58% 2.31%
Net investment loss (1.74)%(f) (1.42)%(c) (2.13)%(c)(d) (2.73)%(h) (2.37)% (1.80)%
Portfolio turnover rate 106% 80% 80% 127% 117% 55%
See footnote summary on page 36.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 31
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
------------------------------------------------------------------------------------------
December 1, Year Ended
Year Ended July 31, 2002 to November 30,
------------------------------------------- July 31, -----------------------
2006 2005 2004 2003(a) 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $51.11 $44.73 $43.50 $40.07 $62.25 $89.55
Income From Investment
Operations
Net investment loss(b) (.90) (.66)(c) (1.02)(c)(d) (.68) (1.15) (1.28)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (1.19) 7.04 2.25 4.11 (21.03) (19.74)
Net increase (decrease) in
net asset value from
operations (2.09) 6.38 1.23 3.43 (22.18) (21.02)
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (5.86)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.42)
Total distributions -0- -0- -0- -0- -0- (6.28)
Net asset value,
end of period $49.02 $51.11 $44.73 $43.50 $40.07 $62.25
Total Return
Total investment return
based on net
asset value(e) (4.09)% 14.26% 2.83% 8.56% (35.63)% (25.45)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $188,275 $261,596 $313,166 $396,472 $410,649 $835,406
Ratio to average net
assets of:
Expenses, net of waivers/
reimbursements 2.40%(f)(g) 2.39% 2.39% 3.01%(h) 2.55% 2.30%
Expenses, before waivers/
reimbursements 2.40%(f)(g) 2.41% 2.55% 3.01%(h) 2.55% 2.30%
Net investment loss (1.68)%(f) (1.37)%(c) (2.10)%(c)(d) (2.72)%(h) (2.34)% (1.80)%
Portfolio turnover rate 106% 80% 80% 127% 117% 55%
See footnote summary on page 36.
32 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
------------------------------------------------------------------------------------------
December 1, Year Ended
Year Ended July 31, 2002 to November 30,
------------------------------------------- July 31, -----------------------
2006 2005 2004 2003(a) 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $58.18 $50.40 $48.50 $44.36 $68.21 $96.60
Income From Investment
Operations
Net investment loss(b) (.36) (.20)(c) (.58)(c)(d) (.46) (.72) (.60)
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions (1.45) 7.98 2.48 4.60 (23.13) (21.51)
Net increase (decrease) in
net asset value from
operations (1.81) 7.78 1.90 4.14 (23.85) (22.11)
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (5.89)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.39)
Total distributions -0- -0- -0- -0- -0- (6.28)
Net asset value,
end of period $56.37 $58.18 $50.40 $48.50 $44.36 $68.21
Total Return
Total investment return
based on net
asset value(e) (3.11)% 15.44% 3.92% 9.33% (34.96)% (24.68)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $46,297 $90,583 $80,420 $93,511 $83,018 $231,167
Ratio to average net
assets of:
Expenses, net of waivers/
reimbursements 1.36%(f)(g) 1.35% 1.35% 1.94%(h) 1.49% 1.27%
Expenses, before waivers/
reimbursements 1.36%(f)(g) 1.38% 1.51% 1.94%(h) 1.49% 1.27%
Net investment loss (.62)%(f) (.36)%(c) (1.06)%(c)(d) (1.65)%(h) (1.29)% (.78)%
Portfolio turnover rate 106% 80% 80% 127% 117% 55%
See footnote summary on page 36.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 33
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R
----------------------------------------
November 3,
2003(i)
Year Ended July 31, to
------------------------- July 31,
2006 2005 2004
----------------------------------------
Net asset value, beginning of period $56.44 $49.08 $54.17
Income From Investment Operations
Net investment loss(b) (.42) (.38)(c) (.77)(c)(d)
Net realized and unrealized gain (loss) on investment and foreign
currency transactions (1.48) 7.74 (4.32)
Net increase (decrease) in net asset value from operations (1.90) 7.36 (5.09)
Net asset value, end of period $54.54 $56.44 $49.08
Total Return
Total investment return based on net asset value(e) (3.37)% 15.00% (9.40)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $481 $74 $23
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.59%(f)(g) 1.71% 1.73%(h)
Expenses, before waivers/reimbursements 1.59%(f)(g) 1.74% 1.97%(h)
Net investment loss (.73)%(f) (.70)%(c) (1.42)%(c)(d)(h)
Portfolio turnover rate 106% 80% 80%
See footnote summary on page 36.
34 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class K
--------------------------
March 1,
Year 2005(i)
Ended to
July 31, July 31,
2006 2005
--------------------------
Net asset value, beginning of period $56.70 $54.19
Income From Investment Operations
Net investment loss(b) (.36) (.03)
Net realized and unrealized gain (loss) on investment and foreign currency
transactions (1.39) 2.54
Net increase (decrease) in net asset value from operations (1.75) 2.51
Net asset value, end of period $54.95 $56.70
Total Return
Total investment return based on net asset value(e) (3.09)% 4.63%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $10 $11
Ratio to average net assets of:
Expenses 1.37%(f)(g) 1.05%(h)
Net investment loss (.61)%(f) (.15)%(h)
Portfolio turnover rate 106% 80%
See footnote summary on page 36.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 35
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class I
--------------------------
March 1,
Year 2005(i)
Ended to
July 31, July 31,
2006 2005
--------------------------
Net asset value, beginning of period $56.76 $54.19
Income From Investment Operations
Net investment income (loss)(b) -0-(j) .02
Net realized and unrealized gain (loss) on investment and foreign currency
transactions (1.58)+ 2.55
Net increase (decrease) in net asset value from operations (1.58) 2.57
Net asset value, end of period $55.18 $56.76
Total Return
Total investment return based
on net asset value(e) (2.78)% 4.75%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $282 $10
Ratio to average net assets of:
Expenses .94%(f)(g) .81%(h)
Net investment income (loss) (.01)%(f) .10%(h)
Portfolio turnover rate 106% 80%
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of fees and expenses waived/reimbursed by the Adviser.
(d) Net of fees and expenses waived/reimbursed by the Transfer Agent.
(e) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of 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.
(f) The ratio includes expenses attributable to estimated costs of proxy
solicitation.
(g) Ratios reflect expenses grossed up for expense offset arrangement with the
Transfer Agent. For the period shown below, the net expense ratios were as
follows:
Year Ended
July 31, 2006
-------------
Class A 1.66%
Class B 2.45%
Class C 2.39%
Advisor Class 1.35%
Class R 1.58%
Class K 1.36%
Class I .93%
(h) Annualized.
(i) Commencement of distributions.
(j) Amount is less than $.005.
+ Due to the timing of sales and repurchases of capital shares, the net
realized and unrealized gain (loss) per share is not in accord with the
portfolio's change in net realized and unrealized gain (loss) on investment
transactions for the period.
36 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
AllianceBernstein Global Technology Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Global Technology Fund, Inc. (the "Fund"), including the
portfolio of investments, as of July 31, 2006, and the related statement of
operations for the period then ended, the statement of changes in net assets
for each of the two years in the period then ended and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 2006, by correspondence with
the custodian and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
AllianceBernstein Global Technology Fund, Inc. at July 31, 2006, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the periods indicated therein, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
New York, New York
September 8, 2006
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 37
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)
Nancy P. Jacklin(1)
Marshall C. Turner, Jr.(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Janet A. Walsh(2), Senior Vice President
Thomas J. Bardong, Vice President
Emilie D. Wrapp, Secretary
Joseph J. Mantineo, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Custodian
State Street Bank & Trust Company
One Lincoln Street
Boston, MA 02111
Distributor
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
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, Governance and Nominating Committee and
Independent Directors Committee.
(2) Ms. Walsh is the person primarily responsible for the day-to-day
management of and investment decisions for the Fund.
38 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS AND PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------
INTERESTED DIRECTOR
Marc O. Mayer, + Exective Vice President of 111 SCB Partners,
1345 Avenue of the AllianceBernstein L.P. Inc. and
Americas ("AllianceBernstein") since 2001 SCB Inc.
New York, NY 10105 and Executive Managing Director
10/2/1957 of AllianceBernstein Investments,
(2003) Inc. ("ABI") since 2003; prior
thereto he was head of
AllianceBernstein Institutional
Investments, a unit of
AllianceBernstein from 2001-2003.
Prior thereto, Chief Executive
Officer of Sanford C. Bernstein
& Co., LLC (institutional research
and brokerage arm of Bernstein
& Co., LLC) ("SCB & Co.") and its
predecessor since 2001.
DISINTERESTED DIRECTORS
William H. Foulk, Jr., #, ## Investment Adviser and an 113 None
P.O. Box 5060 Independent Consultant. He
Greenwich, CT 06831 was formerly Senior Manager
(Chairman of the Board) of Barrett Associates, Inc., a
9/7/1932 registered investment adviser,
(1992) with which he had been
associated since prior to 2001.
Formerly Deputy Comptroller
and Chief Investment Officer
of the State of New York and,
prior thereto, Chief Investment
Officer of the New York Bank
for Savings.
Ruth Block, # Formerly: Executive Vice President 100 None
500 S.E. Mizner Blvd. and Chief Insurance Officer of The
Boca Raton, FL 33432 Equitable Life Assurance Society
11/7/1930 of the United States; Chairman and
(2005) Chief Executive Officer of Evlico
(insurance); Director of Avon, BP
(oil and gas) Ecolab Incorporated
(specialty chemicals), Tandem
Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation; Governor at Large,
National Association of Securities
Dealers, Inc.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 39
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS AND PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
David H. Dievler, # Independent Consultant. Until 112 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of AllianceBernstein
10/23/1929 Corporation ("AB Corp.") responsible
(1990) for mutual fund administration. Prior
to joining AB Corp. in 1984, he was
Chief Financial Officer of Eberstadt
Asset Management since 1968.
Prior to that, he was a Senior
Manager at Price Waterhouse
& Co. Member of American
Institute of Certified Public
Accountants since 1953.
John H. Dobkin, # Consultant. Formerly President 111 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002,
2/19/1942 Senior Advisor from June 1999-
(2005) June 2000 and President of Historic
Hudson Valley (historic preservation)
from December 1989-May 1999.
Previously, Director of the National
Academy of Design and during
1988-1992, Director and Chairman
of the Audit Committee of AB Corp.
Michael J. Downey, # Consultant since January 2004. 111 Asia
c/o AllianceBernstein L.P. Formerly managing partner Pacific
Attn: Philip L. Kirstein of Lexington Capital, LLC Fund,
1345 Avenue of the (investment advisory firm) from Inc.
Americas December 1997 until December and
New York, NY 10105 2003. Prior thereto, Chairman The
1/26/1944 and CEO of Prudential Mutual Merger
(2005) Fund Management from 1987 Fund
to 1993.
D. James Guzy, # Chairman of the Board of PLX 111 Intel Corporation
P.O. Box 128 Technology (semi-conductors) (semi-conductors),
Glenbrook, NV 89413 and of SRC Computers, Inc. Cirrus Logic
3/7/1936 with which he has been Corporation
(1982) associated since prior to 2001. (semi-conductors),
He is also President of the and the Davis
Arbor Company (private family Selected
investments). Advisors Group
of Mutual
Funds
40 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS AND PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Nancy P. Jacklin, # Formerly U.S. Executive 111 None
4046 Chancery Court, NW Director of the International
Washington, DC 20007 Monetary Fund (December
5/22/1948 2002-May 2006; partner
(2006) Clifford Chance (1992-2002);
Senior Counsel, International
Banking and Finance, and
Associate General Counsel,
Citicorp (1985-1992); Assistant
General Counsel (International)
Federal Reserve Board of
Governors (1982-1985);
and Attorney Advisor, U.S.
Department of the Treasury
(1973-1982). Member of the
Bar of the District of Columbia
and of New York; member of the
Council on Foreign Relations.
Marshall C. Turner, Jr, # Principal of Turner Venture 111 The George
220 Montgomery Street Associates since prior to 2001. Lucas
Penthouse 10 From 2003 until May 31, 2006, Educational
San Francisco, he was CEO of Toppan Photomasks, Foundation,
CA 94104 Inc., Austin, Texas (semi-conductor and
10/10/1941 manufacturing services). National
(1992) Datacast,
Inc.
* There is no stated term of office for the Fund's Directors.
# Member of the Audit Committee, Governance and Nominating Committee and
Independent Directors Committee.
## Member of the Fair Value Pricing Committee.
+ Mr. Mayer is an "Interested Director" as defined in the Investment Company
Act of 1940, due to his position as Executive Vice President of
AllianceBernstein.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 41
Officers of The Fund
Certain information concerning the Fund's Officers is listed below.
NAME,
ADDRESS* AND POSITION(S) PRINCIPAL OCCUPATION
DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS
- -------------------------------------------------------------------------------
Marc O. Mayer President and Chief See biography above.
10/2/1957 Executive Officer
Philip L. Kirstein Senior Vice President Senior Vice President and
5/29/1945 and Independent Independent Compliance Officer of
Compliance Officer the AllianceBernstein Funds with which
he has been associated since October
2004. Prior thereto, he was Of Counsel
to Kirkpatrick & Lockhart, LLP from
October 2003 to October 2004, and
General Counsel of Merrill Lynch
Investment Managers, L.P. since prior
to 2001 until March 2003.
Janet A. Walsh Senior Vice President Senior Vice President of
2/2/1962 AllianceBernstein**, with which she
has been associated since prior to 2001.
Thomas J. Bardong Vice President Senior Vice President of
4/28/1945 AllianceBernstein**, with which he has
been associated since prior to 2001.
Emilie D. Wrapp Secretary Senior Vice President, Assistant
11/13/1955 General Counsel and Assistant
Secretary of ABI**, with which she has
been associated since prior to 2001.
Joseph J. Mantineo Treasurer and Chief Senior Vice President of
3/28/1959 Financial Officer AllianceBernstein Investor Services,
Inc. ("ABIS")**, with which he has been
associated since prior to 2001.
Vincent S. Noto Controller Vice President of ABIS**, with which
12/14/1964 he has been associated since prior to 2001.
* The address for each of the Fund's officers, unless otherwise indicated,
is 1345 Avenue of the Americas, New York, NY 10105.
** AllianceBernstein, ABI, ABIS and SCB & Co. are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and officers and is available without
charge upon request. Contact your financial representative or AllianceBernstein
at 800-227-4618 for a free prospectus or SAI.
42 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
Information Regarding the Review and Approval of the Fund's Advisory Agreement
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser at a
meeting held on June 14, 2006.
In preparation for the meeting, the directors had requested from the Adviser
and received and evaluated extensive materials, including performance and
expense information for other investment companies with similar investment
objectives as the Fund derived from data compiled by Lipper Inc. ("Lipper"),
which is not affiliated with the Adviser. The directors also reviewed an
independent evaluation from the Fund's Senior Officer (who is also the Fund's
Independent Compliance Officer) of the reasonableness of the advisory fees in
the Fund's Advisory Agreement (as contemplated by the September 2004 Assurance
of Discontinuance between the Adviser and the New York Attorney General)
wherein the Senior Officer concluded that such fees were reasonable. In
addition, the directors received a presentation from the Adviser and had an
opportunity to ask representatives of the Adviser various questions relevant to
the proposed approval. The directors noted that the Senior Officer's evaluation
considered the following factors: management fees charged to institutional and
other clients of the Adviser for like services; management fees charged by
other mutual fund companies for like services; cost to the Adviser and its
affiliates of supplying services pursuant to the Advisory Agreement, excluding
any intra-corporate profit; profit margins of the Adviser and its affiliates
from supplying such services; possible economies of scale as the Fund grows
larger; and nature and quality of the Adviser's services including the
performance of the Fund.
Prior to voting, the directors reviewed the proposed continuance of the
Advisory Agreement with management and with experienced counsel who are
independent of the Adviser and received a memorandum from such counsel
discussing the legal standards for their consideration of the proposed
continuance. The directors also discussed the proposed continuance in two
private sessions at which only the directors, their independent counsel and the
Fund's Independent Compliance Officer were present. In reaching their
determinations relating to continuance of the Advisory Agreement, the directors
considered all factors they believed relevant, including the following:
1. information comparing the performance of the Fund to other investment
companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance,
administrative and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of the
Fund and all investment companies in the AllianceBernstein Funds complex;
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 43
4. the costs borne by, and profitability of, the Adviser and its
affiliates in providing services to the Fund and all investment companies in
the AllianceBernstein Funds complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the
extent the Fund grows and whether fee levels reflect any economies of scale for
the benefit of investors;
7. the Adviser's policies and practices regarding allocation of
portfolio transactions of the Fund, including the extent to which the Adviser
benefits from soft dollar arrangements;
8. information about "revenue sharing" arrangements that the Adviser has
entered into in respect of the Fund;
9. portfolio turnover rates for the Fund compared to other investment
companies with similar investment objectives;
10. fall-out benefits that the Adviser and its affiliates receive from
their relationships with the Fund;
11. the Adviser's representation that there are no institutional products
managed by the Adviser which have a substantially similar investment style as
the Fund;
12. the Senior Officer's evaluation of the reasonableness of the fee
payable to the Adviser in the Advisory Agreement;
13. the professional experience and qualifications of the Fund's
portfolio management team and other senior personnel of the Adviser; and
14. the terms of the Advisory Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the registered investment companies advised by
the Adviser, their overall confidence in the Adviser's integrity and competence
they have gained from that experience and the Adviser's responsiveness to
concerns raised by them in the past, including the Adviser's willingness to
consider and implement organizational and operational changes designed to
improve investment results and the services provided to the AllianceBernstein
Funds.
44 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and different directors may
have attributed different weights to the various factors.
The directors determined that the overall arrangements between the Fund and the
Adviser, as provided in the Advisory Agreement, were fair and reasonable in
light of the services performed, expenses incurred and such other matters as
the directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the directors
reaching their determinations to approve the continuance of the Advisory
Agreement (including their determinations that the Adviser should continue to
be the investment adviser for the Fund, and that the fees payable to the
Adviser pursuant to the Advisory Agreement are appropriate) were separately
discussed by the directors.
Nature, Extent and Quality of Services Provided by the Adviser
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the control of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund,
including making purchases and sales of portfolio securities consistent with
the Fund's investment objective and policies. Under the Advisory Agreement, the
Adviser also provides the Fund with such office space, administrative and other
services (exclusive of, and in addition to, any such services provided by any
others retained by the Fund) and executive and other personnel as are necessary
for the Fund's operations. The Adviser pays all of the compensation of
directors of the Fund who are affiliated persons of the Adviser and of the
officers of the Fund.
The directors also considered that the Advisory Agreement provides that the
Fund will reimburse the Adviser for the cost of certain clerical, accounting,
administrative and other services provided at the Fund's request by employees
of the Adviser or its affiliates. Requests for these "at no more than cost"
reimbursements are approved by the directors on a quarterly basis and (to the
extent requested and paid) result in a higher rate of total compensation from
the Fund to the Adviser than the fee rates stated in the Fund's Advisory
Agreement.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided by advisers of funds had expanded over time as a result of regulatory
and other developments. The directors noted, for example, that the Adviser is
responsible for maintaining and monitoring its own and, to varying degrees, the
Fund's compliance programs, and that these compliance programs have recently
been refined and enhanced in light of new regulatory requirements. The
directors considered the quality of the in-house investment research
capabilities of the Adviser and the other resources it has dedicated to
performing services for the
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 45
Fund. The quality of administrative and other services, including the Adviser's
role in coordinating the activities of the Fund's other service providers, also
were considered. The directors also considered the Adviser's response to recent
regulatory compliance issues affecting the Fund and a number of the other
investment companies in the AllianceBernstein Funds complex. The directors
concluded that, overall, they were satisfied with the nature, extent and
quality of services provided to the Fund under the Advisory Agreement.
Costs of Services Provided and Profitability to the Adviser
The directors reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of the Fund to the Adviser for calendar years 2004
and 2005 that had been prepared with an updated expense allocation methodology.
The directors noted that the updated methodology differed in various respects
from the methodology used in prior years. The directors reviewed the
assumptions and methods of allocation used by the Adviser in preparing
fund-specific profitability data, and noted the Adviser's representation to
them that it believed that the methods of allocation used in preparing the
profitability information were reasonable and appropriate and that the Adviser
had previously discussed with the directors that there is no generally accepted
allocation methodology for information of this type.
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the directors considered the effect of fall-out benefits on the
Adviser's expenses, as well as the "revenue sharing" arrangements the Adviser
has entered into with certain entities that distribute shares of the Fund. The
directors focused on the profitability of the Adviser's relationship with the
Fund before taxes and distribution expenses. The directors recognized that the
Adviser should generally be entitled to earn a reasonable level of profits for
the services it provides to the Fund and, based on their review, concluded that
they were satisfied that the Adviser's level of profitability from its
relationship with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Adviser benefits from soft dollar
arrangements whereby it receives brokerage and research services from many of
the brokers and dealers that execute purchases and sales of securities on
behalf of its clients on an agency basis. They noted that the Adviser makes
presentations to the directors regarding its trading practices and brokerage
allocation policies, including its policies with respect to soft dollar
arrangements, from time to time and had made a special presentation to the
directors in May 2006 on this subject. The directors noted that the Adviser has
represented to them that all of its soft dollar arrange-
46 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
ments are consistent with applicable legal requirements including the
achievement of best execution.
The directors also considered that the Distributor, which is a wholly-owned
subsidiary of the Adviser, receives 12b-1 fees from the Fund in respect of
classes of shares of the Fund that are subject to the Fund's 12b-1 plan and
retains a portion of such 12b-1 fees, and receives all or a portion of the
sales charges on sales or redemptions of certain classes of shares. The
directors also noted that certain affiliates of the Adviser distribute shares
of the Fund and receive compensation in that connection, that a subsidiary of
the Adviser provides transfer agency services to the Fund and receives
compensation from the Fund for such services, and that brokers who are
affiliated with the Adviser are permitted to execute brokerage transactions for
the Fund subject to satisfaction of certain requirements and receive brokerage
commissions from the Fund and liquidity rebates from electronic communication
networks ("ECNs") in connection with certain of such transactions. The
directors noted that the Adviser had made a recent presentation to the
directors detailing liquidity rebates that Sanford C. Bernstein & Co. LLC
receives in respect of transactions effected through ECNs.
The directors recognized that the Adviser's profitability would be somewhat
lower if it did not receive research for soft dollars or if the Adviser's
affiliates did not receive the other benefits described above. The directors
understood that the Adviser also might derive reputational and other benefits
from its association with the Fund.
Investment Results
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed information from a report prepared by Lipper showing
performance of the Class A Shares of the Fund as compared to a group of 7 to 4
funds (depending on the year) in its Lipper category selected by Lipper (the
"Performance Group") and as compared to a universe of 59 to 7 funds (depending
on the year) in its Lipper category selected by Lipper (the "Performance
Universe") for periods ended December 31, 2005 over the 1-, 3-, 5- and 10-year
periods. The directors also reviewed information prepared by the Adviser
showing performance of the Class A Shares of the Fund as compared to the Morgan
Stanley Capital International World Information Technology Index (Net) (the
"Index") for periods ended December 31, 2005 over the 1-, 3- and 5-year
periods. The directors noted that in the Performance Group comparison the Fund
was in the 3rd quintile in the 1-year period, 5th quintile in the 3-year
period, 4th quintile in the 5 year period and 4 out of 4 in the 10-year period,
and in the Performance Universe comparison the Fund was in the 3rd quintile in
the 1- and 5-year periods, 4th quintile in the 3-year period and 5th quintile
in the 10-year period. The comparative information showed that the Fund
outperformed the Index in the 1-year period and underperformed the Index in the
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 47
3- and 5-year periods. Comparative information was not available for the
10-year and since inception periods (March 1982 inception). Based on their
review, the directors concluded that the Fund's relative performance over time
was satisfactory.
Advisory Fees and Other Expenses
The directors considered the advisory fee rate paid by the Fund to the Adviser
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund at a common asset level. The directors
recognized that it is difficult to make comparisons of advisory fees because
there are variations in the services that are included in the fees paid by
other funds.
The directors reviewed information in the Adviser's Form ADV and noted that it
charged institutional clients lower fees for advising comparably sized accounts
using strategies that differ from those of the Fund but which involve
investments in securities of the same type that the Fund invests in (i.e.,
equity securities). They had previously received an oral presentation from the
Adviser that supplemented such information.
The Adviser reviewed with the directors the significant differences in the
scope of services it provides to institutional clients and to the Fund. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Fund by non-affiliated service providers and is responsible for
the compensation of the Fund's Independent Compliance Officer and certain
related expenses. The provision of these non-advisory services involves costs
and exposure to liability. The Adviser explained that many of these services
normally are not provided to non-investment company clients, and that fees
charged to the Fund reflect the costs and risks of the additional obligations.
The Adviser also noted that since the Fund is constantly issuing and redeeming
its shares, it is more difficult to manage than an institutional account, where
the assets are relatively stable. In light of these facts, the directors did
not place significant weight on these fee comparisons.
The directors also considered the total expense ratio of the Class A shares of
the Fund in comparison to the fees and expenses of funds within two comparison
groups created by Lipper: an Expense Group and an Expense Universe. Lipper
described an Expense Group as a representative sample of comparable funds and
an Expense Universe as a broader group, consisting of all funds in the
investment classification/objective with a similar load type as the Fund. The
Class A expense ratio of the Fund was based on the Fund's latest fiscal year
expense ratio. The directors recognized that the expense ratio information for
the Fund potentially reflected on the Adviser's provision of services, as the
Adviser is responsible for coordinating services provided to the Fund by
others. The directors noted that it was likely that the expense ratios of some
funds in the Fund's Lipper category
48 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
also were lowered by waivers or reimbursements by those funds' investment
advisers, which in some cases were voluntary and perhaps temporary.
The directors noted that the Fund's at approximate current size contractual
effective fee rate of 75 basis points was the same as the Expense Group median
and that the latest fiscal year administrative expense reimbursement by the
Fund pursuant to the Advisory Agreement was 0.5 basis points. The directors
noted that the Adviser advises a portfolio of another AllianceBernstein fund
with a substantially similar investment style as the Fund for the same fee rate
schedule as the Fund except that the Fund's fee rate is a quarterly fee based
on net asset value at the end of each quarter and the portfolio's fee rate is a
monthly fee based on average daily net assets. The directors noted that the
Fund's total expense ratio was materially higher than the Expense Group median
and slightly lower than the Expense Universe median. The directors also noted
that the Adviser had recently reviewed with them steps being taken that are
intended to reduce expenses of the AllianceBernstein Funds. The directors
concluded that the Fund's expense ratio was acceptable.
Economies of Scale
The directors noted that the advisory fee schedule for the Fund contains
breakpoints so that, if assets were to increase over the breakpoint levels, the
fee rates would be reduced on the incremental assets. The directors also
considered a presentation by an independent consultant discussing economies of
scale issues in the mutual fund industry. The directors believe that economies
of scale are realized (if at all) by the Adviser across a variety of products
and services, and not only in respect of a single fund. The directors noted
that there is no uniform methodology for establishing breakpoints that give
effect to fund-specific services provided by the Adviser and to the economies
of scale that the Adviser may realize in its overall mutual fund business or
those components of it which directly or indirectly affect the Fund's
operations. The directors observed that in the mutual fund industry as a whole,
as well as among funds similar to the Fund, there is no uniformity or pattern
in the fees and asset levels at which breakpoints (if any) apply. Depending on
the age and size of a particular fund and its adviser's cost structure,
different conclusions can be drawn as to whether there are economies of scale
to be realized at any particular level of assets, notwithstanding the intuitive
conclusion that such economies exist, or will be realized at some level of
total assets. Moreover, because different advisers have different cost
structures and service models, it is difficult to draw meaningful conclusions
from the comparison of a fund's advisory fee breakpoints with those of
comparable funds. The directors also noted that the advisory agreements for
many funds do not have breakpoints at all. Having taken these factors into
account, the directors concluded that the Fund's breakpoint arrangements would
result in a sharing of economies of scale in the event of a very significant
increase in the Fund's net assets.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 49
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 AllianceBernstein L.P. (the "Adviser") and AllianceBernstein
Global Technology Fund, Inc. (the "Fund"), prepared by Philip L. Kirstein, the
Senior Officer of the Fund for the Directors of the Fund, as required by an
August 2004 agreement between the Adviser and the New York State Attorney
General (the "NYAG").(2) The Senior Officer's evaluation of the Investment
Advisory Agreement is not meant to diminish the responsibility or authority of
the Board of Directors of the Fund 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 proposed to
be paid by the Fund which was provided to the Directors in connection with
their review of the proposed approval of the 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; and
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 June 2, 2006 and presented to the Board of Directors on June 14, 2006 in
accordance with the Assurance of Discontinuance between the NYAG 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.
(2) Future references to the Fund do not include "AllianceBernstein."
50 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS & RATIOS
The Adviser proposed that the Fund pay the advisory fee set forth in the table
below for receiving the services to be provided pursuant to the Investment
Advisory Agreement. The fee schedule below, implemented in January 2004 in
connection with the Adviser's settlement with the NYAG in December 2003, is
based on a master schedule that contemplates eight categories of funds with
almost all funds in each category having the same advisory fee schedule.(3)
Net Assets
02/28/06
Category (million) Advisory Fee(4) Fund
- ----------------------------------------------------------------------------------------
Growth $2,090.4 75 bp on 1st $2.5 billion Global Technology Fund, Inc.
65 bp on next $2.5 billion
60 bp on the balance
The Adviser is reimbursed as specified in the Investment Advisory Agreement for
certain clerical, legal, accounting, administrative and other services provided
to the Fund. Indicated below is the reimbursement amount, which the Adviser
received from the Fund in the Fund's most recently completed fiscal year,
expressed in dollars and as a percentage of average daily net assets:
As a % of Average
Fund Amount Daily Net Assets
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. $118,326 0.005%
Set forth below are the Fund's total expense ratios, calculated from the
beginning of the Fund's current fiscal year through the Fund's semi-annual
period:
Fund Total Expense Ratio(5) Fiscal Year End
- -------------------------------------------------------------------------------
Global Technology Fund, Class A 1.83% July 31
Inc. Class B 2.60% (ratios as of
Class C 2.56% January 31, 2006)
Class R 1.79%
Class K 1.46%
Class I 1.17%
Adv. Class 1.53%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The management fees charged to investment companies which the Adviser manages
and sponsors are normally higher than those charged to similar sized
institutional accounts, including pension plans and sub-advised investment com-
(3) Most of the AllianceBernstein Mutual Funds, which the Adviser manages,
were affected by the Adviser's settlement with the NYAG.
(4) The advisory fee is based on the percent of the Fund's net assets at
quarter end and is paid on a quarterly basis.
(5) Annualized.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 51
panies. The fee differential reflects, among other things, different services
provided to such clients, and different liabilities assumed. Services provided
by the Adviser to the Fund that are not provided to non-investment company
clients include providing office space and personnel to serve as Fund Officers,
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. Also, retail mutual funds managed by
the Adviser are widely held. Servicing the Fund's investors is more time
consuming and labor intensive compared to institutional clients since the
Adviser needs to communicate with a more extensive network of financial
intermediaries and shareholders. 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 a substantially similar
investment style as the Fund. It should be noted that the Adviser has indicated
that with respect to institutional accounts with assets greater than $300
million, it will negotiate a fee schedule. Discounts that are negotiated vary
based upon each client relationship. However, with respect to the Fund, the
Adviser represented that there is no institutional product that has a
substantially similar investment style as the Fund.
The AllianceBernstein Variable Products Series Fund, Inc. ("AVPS"), which is
managed by the Adviser and is available through variable annuity and variable
life contracts offered by other financial institutions, offers investors the
option to
52 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
invest in a portfolio that has a substantially similar investment style as the
Fund. The following table shows the fee schedule of such AVPS portfolio:
Fund AVPS Portfolio Fee Schedule
- ------------------------------------------------------------------------------------------------
Global Technology Fund, Inc. Global Technology Portfolio(6) 0.75% on first $2.5 billion
0.65% on next $2.5 billion
0.60% on the balance
The Adviser also manages and sponsors retail mutual funds, which are organized
in jurisdictions outside the United States, generally Luxembourg and Japan, and
sold to non-United States resident investors. The Adviser charges the following
"all-in" fee(7) for the Luxembourg fund that has a similar investment strategy
as the Fund:
Fund Fee
- -------------------------------------------------------------------------------
International Technology 2.00%
The Adviser represented that it does not sub-advise any registered investment
company with a substantially similar investment style as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.
Lipper, Inc. ("Lipper"), an analytical service that is not affiliated with the
Adviser, compared the fees charged to the Fund with fees charged to other
investment companies for similar services by other investment advisers.
Lipper's analysis included the Fund's ranking with respect to the proposed
management fee relative to the Lipper group median at the approximate current
asset level of the Fund.(8)
Effective Lipper
Management Group
Fund Fee(9) Median Rank
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. 0.750 0.750 4/7
(6) The advisory fee of AVPS Global Technology Portfolio is paid on a monthly
basis and is based on the portfolio's average daily net assets, in contrast to
the Fund, whose fee is based on its net assets at the end of each quarter and
is paid to the Adviser quarterly. The breakpoints in the fee schedules are the
same for the AVPS portfolio and the Fund.
(7) The "all-in" fee shown is for the class A shares of International
Technology. This includes a fee for investment advisory services and a separate
fee for distribution related services.
(8) The 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 Fund has the lowest effective fee rate in the Lipper peer
group.
(9) The effective management fee rate for the Fund does not reflect the
aforementioned payments made by the Fund to the Adviser for certain clerical,
legal, accounting, administrative, and other services.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 53
Lipper also analyzed the total expense ratio of the Fund in comparison to its
Lipper Expense Group(10) and Lipper Expense Universe.(11) Lipper describes a
Lipper Expense Group as a representative sample of comparable funds and a
Lipper Expense Universe as a broader group, consisting of all funds in the same
investment classification/objections with a similar load type as the subject
Fund. The result of that analysis is set forth below:
Expense Lipper Lipper Lipper Lipper
Ratio Group Group Universe Universe
Fund (%)(12) Median (%) Rank Median (%) Rank
- -------------------------------------------------------------------------------
Global Technology 1.660 1.401 7/7 1.697 22/48
Fund, Inc.
Based on this analysis, the Fund has a more favorable ranking on a management
fee basis than it does on a total expense ratio basis.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
A consultant was retained by the Senior Officer to work with the Adviser's
personnel to align the Adviser's two profitability reporting systems. The
alignment, which now has been completed, allows the Adviser's management and
the Directors to receive consistent presentations of the financial results and
profitability although the two profitability reporting systems operate
independently. See Section IV for additional discussion.
IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH
SERVICES.
The profitability information for the Fund prepared by the Adviser for the
Board of Directors was reviewed by the Senior Officer. The Adviser's
profitability from providing investment advisory services to the Fund increased
during calendar year 2005 relative to 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
should be factored into the evaluation of the total relationship between the
Fund and the
(10) Lipper uses the following criteria in screening funds to be included in
the 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. A Lipper Expense Group will typically
consist of seven to twenty funds.
(11) Except for asset (size) comparability, Lipper uses the same criteria for
selecting a Lipper Expense Group when selecting a Lipper Expense Universe.
Unlike the Lipper Expense Group, the Lipper Expense Universe allows for the
same adviser to be represented by more than just one fund.
(12) The total expense ratio shown is for the Fund's Class A shares..
54 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
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, distribution, and brokerage related services
to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end
sales loads, contingent deferred sales charges ("CDSC") and commissions for
providing brokerage services. In addition, the Adviser benefits from soft
dollar arrangements which offset expenses the Adviser would otherwise incur.
Additional information regarding distribution related fees can be found in the
prospectus of the Fund.
AllianceBernstein Investments, Inc. ("ABI"), an affiliate of the Adviser, is
the Fund's principal underwriter. ABI and the Adviser have disclosed in the
Fund's prospectus that they may make revenue sharing payments 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 2005, ABI paid approximately
0.042% of the average monthly assets of the AllianceBernstein Mutual Funds or
approximately $18.0 million for distribution services and educational support
(revenue sharing payments). For 2006, it is anticipated, ABI will pay
approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $17.5 million.(13)
After payments to third party intermediaries, ABI retained the following
amounts for Class A front-end load sales charges from sales of the Fund's Class
A shares during the Fund's most recently completed fiscal year.
Fund Amount Received
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. $24,207
ABI received the amounts set forth below in Rule 12b-1 fees and CDSC for the
Fund during the Fund's most recent fiscal year:
Fund 12b-1 Fee Received CDSC Received
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. $16,047,372 $814,835
Fees and reimbursements for out of pocket expenses charged by AllianceBernstein
Investor Services, Inc. ("ABIS"), the affiliated transfer agent, are based on
the level of the network account and the class of share held by the account.
ABIS also receives a fee per shareholder sub-account for each account
maintained by an intermediary on an omnibus basis. ABIS' after-tax
profitability decreased in 2005
(13) ABI currently inserts the "Advance" in quarterly account statements and
pays the incremental costs associated with the mailing. The incremental cost is
less than what an "independent mailing" would cost.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 55
in comparison to 2004. ABIS received the following fee from the Fund in the
most recent fiscal year:
Fund ABIS Fee(14)
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. $6,878,700
The Fund effected brokerage transactions through the Adviser's affiliate,
Sanford C. Bernstein & Co. LLC ("SCB & Co.") and/or its U.K. affiliate, Sanford
C. Bernstein Limited ("SCB Ltd."), collectively "SCB," and paid commissions for
such transactions during the Fund's most recently completed fiscal year. The
Adviser represented that SCB's profitability from business conducted with the
Fund is comparable to the profitability of SCB's dealings with other similar
third party clients. In the ordinary course of business, SCB receives and pays
liquidity rebates from electronic communications networks ("ECNs") derived from
trading for its clients, including the Fund. These credits and charges are not
being passed on to any SCB client. The Adviser also receives certain soft
dollar benefits from brokers that execute agency trades for the Fund and other
clients. These soft dollar benefits reduce the Adviser's cost of doing business
and increase its profitability.
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,
(14) The fee disclosed is net of any waivers or any other expense offset
arrangement with ABIS. An expense offset is created by the interest earned on
the positive cash balance that occurs within the transfer agent account as
there is a one day lag with regards to money movement from the shareholder's
account to the transfer agent's account and then from the transfer agent's
account to the Fund's account.
56 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
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 a fund's assets exceeds its
initial breakpoint its shareholders benefit from a lower fee rate.
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF
THE FUND.
With assets under management of $635 billion as of April 30, 2006, the Adviser
has the investment experience to manage and provide non-investment services
(described in Section I) to the Fund.
The information below, which was prepared by Lipper, shows the 1, 3, 5 and 10
year performance ranking of the Fund(15) relative to its Lipper Performance
Group(16) and Lipper Performance Universe(17) for the periods ended December
31, 2005:
Global Technology Fund, Inc. Group Universe
1 year 4/7 33/59
3 year 6/7 43/54
5 year 4/6 23/46
10 year 4/4 6/7
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Fund (in bold)(18) versus its benchmark:(19)
Periods Ending December 31, 2005
Annualized Performance (%)
- -------------------------------------------------------------------------------
1 3 5 10 Since
Fund Year Year Year Year Inception
- -------------------------------------------------------------------------------
Global Technology Fund, Inc. 4.97 15.99 -7.98 5.69 14.36
MSCI World IT Index (Net) 4.81 16.78 -7.19 N/A N/A
(15) The performance rankings are for the Class A shares of the Fund.
(16) The Lipper Performance Group is identical to the Lipper Expense Group.
(17) For the Lipper Performance Universe, Lipper included the Fund and all of
the funds of the same Lipper Classification/Objective and load type, regardless
of asset size.
(18) The performance returns shown are for the Class A shares of the Fund.
(19) The Adviser provided Fund and benchmark performance return information
for periods through December 31, 2005 in order to maintain consistency with
Lipper's performance rankings in the analysis.
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND o 57
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that
the proposed fee for the Fund is reasonable and within the range of what would
have been negotiated at arms-length in light of all the surrounding
circumstances. This conclusion in respect of the Fund is based on an evaluation
of all of these factors and no single factor was dispositive.
Dated: July 17, 2006
58 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
ALLIANCEBERNSTEIN FAMILY OF FUNDS
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund
Small Cap Growth Portfolio
Global & International
Global Health Care Fund
Global Research Growth Fund
Global Technology Fund
Greater China '97 Fund
International Growth Fund
International Research Growth Fund
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Global Government Income Trust*
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
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.
* 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 GLOBAL TECHNOLOGY FUND o 59
NOTES
60 o ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND
1345 Avenue of the Americas
New York, NY 10105
Toll-free 1 (800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
GT-0151-0706
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting
officer. A copy of the registrant's code of ethics is filed herewith as
Exhibit 12(a)(1).
(b) During the period covered by this report, no material amendments were
made to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers
to the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent registered public accounting firm Ernst & Young LLP, for the Fund's
last two fiscal years for professional services rendered for: (i) the audit of
the Fund's annual financial statements included in the Fund's annual report to
stockholders; (ii) assurance and related services that are reasonably related
to the performance of the audit of the Fund's financial statements and are not
reported under (i), which include advice and education related to accounting
and auditing issues and quarterly press release review (for those Funds which
issue press releases), and preferred stock maintenance testing (for those Funds
that issue preferred stock); and (iii) tax compliance, tax advice and tax
return preparation.
Audit-Related
Audit Fees Fees Tax Fees
- -------------------------------------------------------------------------------
2005 $51,000 $5,882 $ 15,016
2006 $42,500 $5,420 $ 16,406
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by
the Fund's independent registered public accounting firm. The Fund's Audit
Committee policies and procedures also require pre-approval of all audit and
non-audit services provided to the Adviser and Service Affiliates to the extent
that these services are directly related to the operations or financial
reporting of the Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided to
the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the
Fund, which include preparing an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column Pre-
approved by the Audit
All Fees for Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
- -------------------------------------------------------------------------------
2005 $ 1,101,754 [ $188,601 ]
( $173,585 )
( $ 15,016 )
2006 $ 483,040 [ $170,696 ]
( $154,290 )
( $ 16,406 )
(h) The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent registered public accounting firm to the Adviser and Service
Affiliates is compatible with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------------------------
12 (a) (1) Code of Ethics that is subject to the disclosure of Item 2
hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Global Technology Fund, Inc.
By: /s/ Marc O. Mayer
Marc O. Mayer
President
Date: September 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: September 28, 2006
By: /s/ Joseph J. Mantineo
Joseph J. Mantineo
Treasurer and Chief Financial Officer
Date: September 28, 2006