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: 811-00204
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
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, 2007
Date of reporting period: January 31, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
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SEMI-ANNUAL REPORT
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AllianceBernstein Mid-Cap Growth Fund
Semi-Annual Report
January 31, 2007
[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 AllianceBernstein 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.
March 21, 2007
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Mid-Cap Growth Fund (the "Fund") for the semi-annual
reporting period ended January 31, 2007.
Investment Objective and Policies
The Fund's investment objective is long-term growth of capital. The Fund
normally invests substantially all of its assets in equity securities that the
Adviser believes offer the possibility of above-average long-term growth rates.
Under normal circumstances, the Fund invests at least 80% of its net assets in
common stocks of mid-capitalization companies. For these purposes,
"mid-capitalization companies" are those that, at the time of investment, have
market capitalizations within the range of market capitalizations of companies
constituting the Russell Midcap Growth Index. The capitalization range of
companies in the Russell Midcap Growth Index will change with the markets, and
the Fund typically invests in common stocks with market capitalizations of
between $1 billion and $15 billion at time of purchase. The Adviser looks for
companies whose prospective earnings growth is not fully reflected in current
market valuations. Normally, the Fund invests in securities of a smaller number
of companies, usually about 40-70 companies.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Russell Midcap Growth Index, for the six- and 12-month periods ended January
31, 2007.
During the six-month period ended January 31, 2007, the Fund slightly
outperformed its benchmark. The Fund's outperformance relative to the benchmark
was attributable to both stock and sector selection. In terms of sector
selection, the Fund's significant underweight in the energy sector made the
largest contribution to its outperformance. An underweight in the consumer
staples sector also contributed positively to performance. The largest negative
contributor to relative performance on a sector-level basis came from the
Fund's underweight positions in the materials and processing and consumer
discretionary sectors.
During the 12-month period ended January 31, 2007, the Fund significantly
underperformed its benchmark. The Fund's relative underperformance was due
primarily to negative stock selection within the consumer discretionary and
health care sectors. On a sector-selection basis, the Fund's significant
overweight in the technology sector was the largest detractor from relative
performance. An underweight in the materials and processing sector also
detracted from performance. The most notable positive contribution was
attributable to the Fund's significant underweight position in the energy
sector, followed by the impact of a modest overweight position in utilities.
Market Review and Investment Strategy
During the six-month period ended January 31, 2007, the equity markets rose
steadily in the United States. Concurrently, oil prices fell from a peak of $77
per barrel to roughly $50 per barrel in mid-January 2007. During
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 1
this time, other measures of inflation, such as the Consumer Price Index (CPI),
also declined from higher levels seen earlier in the year. The bond market
rallied as well, sending the 10-year U.S. Treasury yield back below 4.50% by
December 2006.
The 12-month period ended January 31, 2007 was a volatile period in which the
markets overcame a sharp correction mid-year to finish with strong returns. The
U.S. Federal Reserve (the "Fed") finally ceased its interest-rate hike cycle
with a suspension in August, after what was roughly a two-year pattern of 25
basis-point hikes. The equity markets climbed steadily from July 2006 through
January 2007, with materials stocks leading the migration higher. The
underlying commodities themselves, however, did not exhibit the same price
performance. The price of oil reached its peak in early August at $77 per
barrel, but had fallen to roughly $50 per barrel by January 2007. As the year
progressed, economic activity in the United States moderated with the continued
softening of the housing market. Corporate profit growth remained in the
double-digits when measured on a year-over-year basis.
In terms of investment strategy for the six-month period ended January 31,
2007, the Fund's exposure to financials was trimmed to a weight more aligned
with that of the benchmark. Many of the Fund's stocks in this sector had
appreciated significantly, and the U.S. Mid Cap Growth Team (the "team") deemed
the risk/reward tradeoff less favorable. Another notable change was the
increase in consumer discretionary names that benefit from moderating energy
prices. The team maintained the Fund's overweight position in the technology
sector. This sector thrived, as video content began to proliferate on the
Internet and a strong demand for products that upgrade existing internet
infrastructure continued. The Fund's underweight position in the energy sector
also remained intact, as there continued to be signs of ample supply for crude
oil and as indicators of energy demand remained muted.
Over the 12-month period ended January 31, 2007, the team maintained the Fund's
overweight position in the technology sector for the reasons discussed earlier.
The Fund also remained underweight in the energy sector, as the supply/demand
imbalance persisted. The Fund's exposure to the consumer discretionary sector
decreased modestly over the 12-month period, as the impact of higher energy
prices continued to pressure discretionary spending.
The Fund's holdings are classified throughout this report according to
AllianceBernstein's sector classification scheme (for a visual representation
of the Fund's sector breakdown, please see the pie chart on page 8). For
readers specifically interested in the Russell sector classification of this
Fund, the sector breakdown according to Russell's classification scheme is as
follows: technology 34.33%, consumer discretionary 20.04%, health care 14.33%,
financial services 12.98%, producer durables 8.78%, utilities 6.48%, auto &
transportation 2.45% and cash 0.61%. Discussions above regarding overweight or
underweight positions in a specific sector refer to Russell's sector
classifications.
2 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our
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); 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
The unmanaged Russell Midcap Growth Index does not reflect fees and expenses
associated with the active management of a mutual fund portfolio. The Index
measures the performance of those Russell mid-cap companies with higher
price-to-book ratios and higher forecasted growth values. The stocks are also
members of the Russell 1000 Growth Index. An investor cannot invest directly in
an index, and its results are not indicative of the performance for any
specific investment, including the Fund.
A Word About Risk
The Fund concentrates its investments in a limited number of issues and an
investment in the Fund is therefore subject to greater risk and volatility than
investments in a more diversified portfolio. 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, fluctuations in the value of investments in foreign
currency denominated securities may be magnified by changes in foreign exchange
rates. Please note, mid-cap stocks may have limited marketability and may be
subject to more abrupt or erratic market movements than large-cap stocks.
Growth investing does not guarantee a profit of eliminate risk. The stocks of
these companies can have relatively high valuations. Because of these high
valuations, an investment in a growth stock can be more risky than an
investment in a company with more modest growth expectations. If a growth stock
company should fail to meet these high earnings expectations, the price of
these stocks can be severely negatively affected. 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 MID-CAP GROWTH FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK ----------------------------
PERIODS ENDED JANUARY 31, 2007 6 Months 12 Months
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AllianceBernstein Mid-Cap Growth Fund
Class A 17.06% -6.49%
Class B 16.37% -7.26%
Class C 16.62% -7.10%
Advisor Class* 17.06% -6.23%
Class R* 16.76% -6.79%
Class K* 16.88% -6.63%
Class I* 17.16% -6.17%
Russell Midcap Growth Index 15.98% 8.20%
* Please note that these share classes are for investors purchasing shares
through accounts established under certain fee-based programs sponsored and
maintained by certain broker-dealers and financial intermediaries,
institutional pension plans and/or investment advisory clients of, and certain
other persons associated with, the Adviser and its affiliates or the Funds.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2007
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year -6.49% -10.45%
5 Years 9.46% 8.52%
10 Years 5.28% 4.82%
Class B Shares
1 Year -7.26% -10.58%
5 Years 8.47% 8.47%
10 Years(a) 4.57% 4.57%
Class C Shares
1 Year -7.10% -7.93%
5 Years 8.53% 8.53%
10 Years 4.37% 4.37%
Advisor Class Shares+
1 Year -6.23% -6.23%
5 Years 9.65% 9.65%
10 Years 5.51% 5.51%
Class R Shares+
1 Year -6.79% -6.79%
Since Inception* 8.74% 8.74%
Class K Shares+
1 Year -6.63% -6.63%
Since Inception* 8.99% 8.99%
Class I Shares+
1 Year -6.17% -6.17%
Since Inception* 9.43% 9.43%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception date: 3/1/05 for Class R, 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 their NAV returns. Please note
that these share classes are for investors purchasing shares through accounts
established under certain fee-based programs sponsored and maintained by
certain broker-dealers and financial intermediaries, institutional pension
plans and/or investment advisory clients of, and certain other persons
associated with, the Adviser and its affiliates or the Funds. The inception
date for Class R shares, Class K shares and Class I shares is listed above.
See Historical Performance disclosures on page 3.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MID-CAP GROWTH 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 (DECEMBER 31, 2006)
- --------------------------------------------------------------
SEC Returns
Class A Shares
1 Year -2.91%
5 Years 6.62%
10 Years 5.35%
Class B Shares
1 Year -3.10%
5 Years 6.61%
10 Years(a) 5.07%
Class C Shares
1 Year -0.22%
5 Years 6.66%
10 Years 4.88%
Advisor Class Shares+
1 Year 1.65%
5 Years 7.82%
10 Years 6.03%
Class R Shares+
1 Year 1.22%
Since Inception* 8.36%
Class K Shares+
1 Year 1.38%
Since Inception* 8.63%
Class I Shares+
1 Year 1.85%
Since Inception* 8.99%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception Date: 3/1/05 for Class R, Class K and Class I Shares.
+ Please note that these share classes are for investors purchasing shares
through accounts established under certain fee-based programs sponsored and
maintained by certain broker-dealers and financial intermediaries,
institutional pension plans and/or investment advisory clients of, and certain
other persons associated with, the Adviser and its affiliates or the Funds. The
inception date for Class R shares, Class K shares and Class I shares is listed
above.
See Historical Performance disclosures on page 3.
6 o ALLIANCEBERNSTEIN MID-CAP GROWTH 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
August 1, 2006 January 31, 2007 During Period*
------------------------------ ------------------------------- ---------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
----------- ---------------- ----------- ----------------- ----------- -------------
Class A $1,000 $1,000 $1,170.60 $1,019.11 $ 6.62 $ 6.16
Class B $1,000 $1,000 $1,163.71 $1,014.97 $11.07 $10.31
Class C $1,000 $1,000 $1,166.21 $1,015.12 $10.92 $10.16
Advisor
Class $1,000 $1,000 $1,170.55 $1,020.27 $ 5.36 $ 4.99
Class R $1,000 $1,000 $1,167.61 $1,017.85 $ 7.98 $ 7.43
Class K $1,000 $1,000 $1,168.81 $1,018.90 $ 6.83 $ 6.36
Class I $1,000 $1,000 $1,171.64 $1,021.02 $ 4.54 $ 4.23
* Expenses are equal to the classes' annualized expense ratios of 1.21%,
2.03%, 2.00%, 0.98%, 1.46%, 1.25% and 0.83%, respectively, multiplied by the
average account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
** Assumes 5% return before expenses.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 7
PORTFOLIO SUMMARY
January 31, 2007 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $793.3
SECTOR BREAKDOWN*
[ ] 46.8% Technology [PIE CHART OMITTED]
[ ] 22.2% Consumer Services
[ ] 14.4% Health Care
[ ] 13.0% Finance
[ ] 1.9% Utilities
[ ] 0.9% Consumer Staples
[ ] 0.4% Transportation
[ ] 0.4% Short-Term
TEN LARGEST HOLDINGS**
January 31, 2007 (unaudited)
Percent of
Company U.S. $ Value Net Assets
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JDS Uniphase Corp. $ 34,922,925 4.4%
Juniper Networks, Inc. 32,223,448 4.1
Level 3 Communications, Inc. 30,925,943 3.9
Advanced Micro Devices, Inc. 30,902,702 3.9
XM Satellite Radio Holdings, Inc.-Class A 29,130,742 3.7
KLA-Tencor Corp. 28,630,396 3.6
Red Hat, Inc. 23,826,041 3.0
Nasdaq Stock Market, Inc. 23,490,253 3.0
Shanda Interactive
Entertainment Ltd. (ADR) 23,374,533 2.9
Broadcom Corp.-Class A 23,246,570 2.9
$ 280,673,553 35.4%
* All data are as of January 31, 2007. The Fund's sector breakdown is
expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
The Fund's sector breakdown is classified in the above pie chart and throughout
this report according to AllianceBernstein's sector classification scheme. For
readers specifically interested in the Russell sector classification of this
Fund, the sector breakdown according to Russell's classification scheme is as
follows: technology 34.33%, consumer discretionary 20.04%, health care 14.33%,
financial services 12.98%, producer durables 8.78%, utilities 6.48%, auto &
transportation 2.45% and cash 0.61%.
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.
** Long-term investments
8 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS
January 31, 2007 (unaudited)
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.7%
Technology-46.9%
Communication Equipment-8.5%
JDS Uniphase Corp. (a) 1,964,169 $ 34,922,925
Juniper Networks, Inc. (a)(b) 1,778,336 32,223,448
-------------
67,146,373
Communication Services-6.1%
Level 3 Communications, Inc. (a) 4,980,023 30,925,943
NeuStar, Inc.-Class A (a)(b) 568,551 17,562,540
-------------
48,488,483
Computer Hardware/Storage-1.2%
Sun Microsystems, Inc. (a)(b) 1,434,970 9,528,201
Computer Peripherals-1.3%
Network Appliance, Inc. (a) 269,545 10,134,892
Miscellaneous-0.6%
Trimble Navigation Ltd. (a) 80,820 4,572,796
Semiconductor Capital Equipment-9.4%
FormFactor, Inc. (a) 409,502 16,646,256
KLA-Tencor Corp. 581,564 28,630,396
Lam Research Corp. (a) 470,393 21,548,703
Varian Semiconductor Equipment (a) 195,950 8,063,343
-------------
74,888,698
Semiconductor Components-12.9%
Advanced Micro Devices, Inc. (a)(b) 1,987,312 30,902,702
Broadcom Corp.-Class A (a) 728,276 23,246,570
International Rectifier Corp. (a) 265,000 11,058,450
Netlogic Microsystems, Inc. (a)(b) 734,680 17,544,158
Silicon Laboratories, Inc. (a) 619,292 19,885,466
-------------
102,637,346
Software-6.9%
NAVTEQ Corp. (a) 572,375 20,307,865
Red Hat, Inc. (a)(b) 1,048,220 23,826,041
Salesforce.com, Inc. (a) 236,650 10,372,369
-------------
54,506,275
-------------
371,903,064
Consumer Services-22.2%
Advertising-1.0%
Audible, Inc. (a)(b) 1,139,503 8,147,446
Airlines-2.0%
Continental Airlines, Inc.-Class B (a)(b) 388,145 16,104,136
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 9
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Apparel-1.8%
Under Armour, Inc.-Class A (a)(b) 140,350 $ 7,129,780
Urban Outfitters, Inc. (a)(b) 303,670 7,409,548
-------------
14,539,328
Broadcasting & Cable-3.7%
XM Satellite Radio Holdings, Inc.-Class A (a)(b) 2,050,017 29,130,742
Entertainment & Leisure-0.3%
Gaylord Entertainment Co. (a) 35,900 1,983,834
Gaming-2.1%
Melco PBL Entertainment Macau Ltd. (ADR) (a) 387,094 7,486,398
Wynn Resorts Ltd. (b) 82,700 9,240,898
-------------
16,727,296
Miscellaneous-7.3%
Apollo Group, Inc.-Class A (a) 414,998 18,010,913
Monster Worldwide, Inc. (a) 331,200 16,364,592
Shanda Interactive Entertainment Ltd.
(ADR) (a)(b) 1,043,972 23,374,533
-------------
57,750,038
Printing & Publishing-1.0%
VistaPrint, Ltd. (a) 192,045 8,275,219
Restaurants & Lodging-1.3%
Chipotle Mexican Grill, Inc.-Class A (a)(b) 178,315 10,595,477
Retail-General Merchandise-1.7%
Coldwater Creek, Inc. (a)(b) 708,150 13,206,998
-------------
176,460,514
Health Care-14.4%
Biotechnology-7.2%
Affymetrix, Inc. (a)(b) 854,724 21,333,911
Applera Corp.-Celera Group (a) 945,026 14,988,112
Compugen Ltd. (a) 1,658,850 4,993,138
Myriad Genetics, Inc. (a)(b) 99,700 3,563,278
Qiagen Nv (a)(b) 152,800 2,638,856
Vertex Pharmaceuticals, Inc. (a) 269,585 9,529,830
-------------
57,047,125
Medical Products-4.7%
Cerus Corp. (a)(b) 1,906,866 11,059,823
Given Imaging Ltd. (a)(b) 1,019,093 21,441,717
Kinetic Concepts, Inc. (a) 97,350 4,788,646
-------------
37,290,186
Medical Services-2.5%
Cepheid, Inc. (a)(b) 2,386,481 19,736,198
-------------
114,073,509
10 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Finance-13.0%
Brokerage & Money Management-3.8%
International Securities Exchange Holdings,
Inc.-Class A 381,102 $ 15,789,056
TD Ameritrade Holding Corp. (a)(b) 793,996 14,045,789
-------------
29,834,845
Financial Services-2.6%
Move, Inc. (a) 3,276,158 20,705,319
Miscellaneous-6.6%
Chicago Mercantile Exchange Holdings,
Inc.-Class A 31,316 17,640,303
Nasdaq Stock Market, Inc. (a)(b) 689,268 23,490,253
NYSE Group, Inc. (a)(b) 117,005 11,698,160
-------------
52,828,716
-------------
103,368,880
Utilities-1.9%
Electric & Gas Utility-1.9%
The AES Corp. (a) 150,600 3,130,974
Itron, Inc. (a)(b) 202,090 11,648,468
-------------
14,779,442
Consumer Staples-0.9%
Miscellaneous-0.9%
Panera Bread Co.-Class A (a)(b) 124,390 7,334,034
Transportation-0.4%
Air Freight-0.4%
UTI Worldwide, Inc. 111,850 3,400,240
Total Common Stocks
(cost $661,259,309) 791,319,683
SHORT-TERM INVESTMENTS-0.4%
Investment Companies-0.4%
AllianceBernstein Fixed-Income Shares, Inc.
- Government STIF Portfolio (c)
(cost $2,954,988) 2,954,988 2,954,988
Total Investments Before Security Lending
Collateral-100.1%
(cost $664,214,297) 794,274,671
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 11
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED-24.9%
Short-Terms-24.9%
UBS Private Money Market Fund, LLC
(cost $197,786,916) 197,786,916 $ 197,786,916
Total Investments-125.0%
(cost $862,001,213) 992,061,587
Other assets less liabilities-(25.0)% (198,685,433)
Net Assets-100.0% $ 793,376,154
(a) Non-income producing security.
(b) Represents entire or partial securities out on loan. See Note E for
securities lending information.
(c) Investment in affiliated money market mutual fund.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
12 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
STATEMENT OF ASSETS & LIABILITIES
January 31, 2007 (unaudited)
Assets
Investments in securities, at value
Unaffiliated issuers (cost $859,046,225--including
investment of cash collateral for securities loaned of
$197,786,916) $ 989,106,599(a)
Affiliated issuers (cost $ 2,954,988) 2,954,988
Receivable for investment securities sold 7,111,091
Receivable for capital stock sold 1,254,949
Dividends and interest receivable 5,506
Total assets 1,000,433,133
Liabilities
Payable for collateral on securities loaned 197,786,916
Payable for investment securities purchased 5,269,611
Payable for capital stock redeemed 2,897,768
Advisory fee payable 484,590
Distribution fee payable 187,177
Transfer Agent fee payable 103,263
Administrative fee payable 25,220
Accrued expenses 302,434
Total liabilities 207,056,979
Net Assets $ 793,376,154
Composition of Net Assets
Capital stock, at par $ 1,351,008
Additional paid-in capital 727,832,542
Accumulated net investment loss (3,506,443)
Accumulated net realized loss on investment transactions (62,361,327)
Net unrealized appreciation of investments 130,060,374
$ 793,376,154
Net Asset Value Per Share--21 billion shares of capital stock authorized, $.01
par value
Shares Net Asset
Class Net Assets Outstanding Value
- ------------------------------------------------------------------------
A $ 635,460,177 106,313,770 $ 5.98*
B $ 44,394,173 9,130,624 $ 4.86
C $ 24,839,714 5,114,987 $ 4.86
Advisor $ 73,996,822 12,093,119 $ 6.12
R $ 3,642,533 612,973 $ 5.94
K $ 413,384 69,197 $ 5.97
I $ 10,629,351 1,766,125 $ 6.02
* The maximum offering price per share for Class A shares was $6.25 which
reflects a sales charge of 4.25%.
(a) Includes securities on loan with a value of $187,050,693 (see Note E).
See notes to financial statements.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 13
STATEMENT OF OPERATIONS
Six Months Ended January 31, 2007 (unaudited)
Investment Income
Securities lending income $ 903,000
Dividends 600,376
Interest
Unaffiliated issuers 54,416
Affiliated issuers 9,974 $ 1,567,766
Expenses
Management fee 2,874,951
Distribution fee--Class A 737,305
Distribution fee--Class B 244,756
Distribution fee--Class C 133,681
Distribution fee--Class R 6,489
Distribution fee--Class K 474
Transfer agency--Class A 613,517
Transfer agency--Class B 60,636
Transfer agency--Class C 28,214
Transfer agency--Advisor Class 73,448
Transfer agency--Class R 2,169
Transfer agency--Class K 397
Transfer agency--Class I 2,206
Custodian 116,172
Printing 69,670
Registration 47,674
Administrative 42,500
Legal 35,957
Audit 23,545
Directors' fees 17,821
Miscellaneous 7,373
Total expenses 5,138,955
Less: expense offset arrangement
(see Note B) (64,746)
Net expenses 5,074,209
Net investment loss (3,506,443)
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized loss on investment
transactions (25,612,473)
Net change in unrealized
appreciation/depreciation
of investments 153,986,275
Net gain on investment transactions 128,373,802
Net Increase in Net Assets
from Operations $ 124,867,359
See notes to financial statements.
14 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
January 31, 2007 July 31,
(unaudited) 2006
-------------- --------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss $ (3,506,443) $ (6,180,460)
Net realized gain (loss) on investment
transactions (25,612,473) 119,539,281
Net change in unrealized
appreciation/depreciation
of investments 153,986,275 (159,939,097)
Net increase (decrease) in net assets
from operations 124,867,359 (46,580,276)
Distributions to Shareholders from
Net realized gain on investment
transactions
Class A (59,777,160) (58,655,957)
Class B (5,342,530) (6,996,484)
Class C (2,901,436) (2,585,689)
Advisor Class (7,088,682) (6,024,760)
Class R (224,759) (1,092)
Class K (36,956) (982)
Class I (944,478) (928,477)
Capital Stock Transactions
Net increase (decrease) (8,266,755) 58,391,000
Total increase (decrease) 40,284,603 (63,382,717)
Net Assets
Beginning of period 753,091,551 816,474,268
End of period (including accumulated
net investment loss of ($3,506,443)
and $0, respectively) $ 793,376,154 $ 753,091,551
See notes to financial statements.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 15
NOTES TO FINANCIAL STATEMENTS
January 31, 2007 (unaudited)
NOTE A
Significant Accounting Policies
The AllianceBernstein Mid-Cap Growth Fund, Inc. (the "Fund") 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 Cshares 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. 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 reference 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
16 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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. (the
"Manager") 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 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,
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 17
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 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 respective net assets.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
exdividend date. Income dividends and capital gains distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with U.S. generally accepted accounting principles. To
the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences do not require such reclassification.
18 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
NOTE B
Management Fee and Other Transactions With Affiliates
Under the terms of the management agreement, the Fund pays the Manager a fee at
an annual rate of .75% on the first $500 million of average daily net assets,
..65% on the next $500 million of average daily net assets and .55% on average
daily net assets in excess of $1 billion. Such fee is accrued daily and paid
monthly.
Pursuant to the management agreement, the Fund paid $42,500 to the Manager
representing the cost of certain legal and accounting services provided to the
Fund by the Manager for the six months ended January 31, 2007.
The Fund compensates AllianceBernstein Investor Services, Inc. ("ABIS"), a
wholly-owned subsidiary of the Manager, 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 $468,795 for the six months ended January 31, 2007.
For the six months ended January 31, 2007, the Fund's expenses were reduced by
$64,746 under an expense offset arrangement with ABIS.
AllianceBernstein Investments, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Manager, serves as the distributor of the Fund's shares. The
Distributor has advised the Fund that it has retained front-end sales charges
of $4,276 from the sale of Class A shares and received $31,155, $27,253 and
$7,577 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class A, Class B and Class C shares, respectively, for the six
months ended January 31, 2007.
The Fund may invest in the AllianceBernstein Fixed-Income Shares, Inc.--Prime
STIF Portfolio and the AllianceBernstein Fixed-Income Shares, Inc.--Government
STIF Portfolio (collectively, the "STIF Portfolios"), open-end management
investment companies managed by the Adviser. The STIF Portfolios are offered as
cash management options to mutual funds, trusts, and other accounts managed by
the Adviser, and are not available for direct purchase by members of the
public. The STIF Portfolios pay no investment management fees.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 2007 amounted to $1,285,986 of which $0 and $0, respectively, was
paid to Sanford C. Bernstein &Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Manager.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 19
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares, 1% of the average daily net assets attributable
to both Class B and Class C shares, .50% of the Fund's average daily net assets
attributable to Class R shares and .25% of the Fund's average daily net assets
attributable to Class K shares. There are no distribution and servicing fees on
the Advisor Class and Class I shares. The fees are accrued daily and paid
monthly. Payments under the Class A plan are currently limited to .23% of
average daily net assets attributable to Class A shares. Prior to April 1,
2006, payments under the Class A plan were limited to .22% of average daily
net assets attributable to Class A shares. 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 amount of
$6,375,095, $2,292,937, $52,235 and $3,932, 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 Manager may use its own resources
to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended January 31, 2007, were as follows:
Purchases Sales
-------------- --------------
Investment securities (excluding
U.S. government securities) $ 360,111,165 $ 448,225,250
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting puposes. Accordingly, gross unrealized
appreciation and unrealized depreciation are as follows:
Gross unrealized appreciation $ 164,014,389
Gross unrealized depreciation (33,954,015)
Net unrealized appreciation $ 130,060,374
20 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
NOTE E
Securities Lending
The Fund has entered into a securities lending agreement with UBS Securities
LLC (the"LendingAgent"). 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 an eligible money market vehicle in
accordance with the investment restrictions of the 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 January 31, 2007, the Fund had loaned
securities with a value of $187,050,693 and received cash collateral which was
invested in a money market fund valued at $197,786,916 as included in the
accompanying portfolio of investments. For the six months ended January 31,
2007, the Fund earned fee income of $903,000 which is included 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
-------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Year
January 31, Ended January 31, Ended
2007 July 31, 2007 July 31,
(unaudited) 2006 (unaudited) 2006
------------ ------------ -------------- --------------
Class A
Shares sold 5,199,148 16,542,333 $ 31,178,255 $ 110,410,836
Shares issued in
reinvestment of
distributions 8,445,449 7,517,460 51,263,876 49,314,539
Shares converted
from Class B 536,900 1,300,777 3,223,804 8,525,958
Shares redeemed (13,889,530) (20,640,025) (83,428,662) (134,106,218)
Net increase 291,967 4,720,545 $ 2,237,273 $ 34,145,115
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 21
Shares Amount
-------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Year
January 31, Ended January 31, Ended
2007 July 31, 2007 July 31,
(unaudited) 2006 (unaudited) 2006
------------ ------------ -------------- --------------
Class B
Shares sold 396,293 1,880,472 $ 1,977,034 $ 10,649,559
Shares issued in
reinvestment of
distributions 979,948 1,160,609 4,840,941 6,371,746
Shares converted
from Class A (652,554) (1,316,495) (3,223,804) (8,525,958)
Shares redeemed (2,315,826) (3,754,226) (11,433,588) (19,259,532)
Net decrease (1,592,139) (2,029,640) $ (7,839,417) $ (10,764,185)
Class C
Shares sold 380,410 3,085,785 $ 1,875,052 $ 17,467,907
Shares issued in
reinvestment of
distributions 496,979 403,673 2,455,078 2,216,164
Shares redeemed (1,490,996) (2,142,850) (7,418,218) (11,693,574)
Net increase
(decrease) (613,607) 1,346,608 $ (3,088,088) $ 7,990,497
Advisor Class
Shares sold 659,109 3,525,633 $ 3,976,898 $ 24,177,409
Shares issued in
reinvestment of
distributions 1,117,552 888,634 6,939,997 5,936,074
Shares redeemed (2,075,377) (2,466,192) (12,726,545) (16,516,591)
Net increase
(decrease) (298,716) 1,948,075 $ (1,809,650) $ 13,596,892
Class R
Shares sold 343,955 380,005 $ 2,040,087 $ 2,403,231
Shares issued in
reinvestment of
distributions 37,256 17 224,655 107
Shares redeemed (122,213) (27,714) (719,310) (176,565)
Net increase 258,998 352,308 $ 1,545,432 $ 2,226,773
Class K
Shares sold 11,478 51,774 $ 68,862 $344,194
Shares issued in
reinvestment of
distributions 5,939 -0- 35,990 -0-
Shares redeemed (1,388) (259) (8,429) (1,532)
Net increase 16,029 51,515 $ 96,423 $ 342,662
22 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Shares Amount
-------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Year
January 31, Ended January 31, Ended
2007 July 31, 2007 July 31,
(unaudited) 2006 (unaudited) 2006
------------ ------------ -------------- --------------
Class I
Shares sold 79,473 1,682,173 $ 466,723 $ 10,881,939
Shares issued in
reinvestment of
distributions 154,832 141,171 944,478 927,495
Shares redeemed (133,635) (159,542) (819,929) (956,188)
Net increase 100,670 1,663,802 $ 591,272 $ 10,853,246
NOTE G
Risks Involved in Investing in the Fund
Foreign Securities Risk--Investing in securities of foreign companies or
foreign governments involves special risks which include changes in foreign
currency exchange rates and the possibility of future political and economic
developments which could adversely affect the value of such securities.
Moreover, securities of many foreign companies or foreign governments and their
markets may be less liquid and their prices more volatile than those of
comparable U.S. companies or of the U.S. government.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE H
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended January 31, 2007.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 23
NOTE I
Distributions to Shareholders
The tax character of distributions to be paid for the year ending July 31, 2007
will be determined at the end of the current fiscal year. The tax character of
distributions paid during the fiscal year ended July 31, 2006 were as follows:
2006
-------------
Distributions paid from:
Long-term capital gain $ 75,193,441
Total taxable distributions 75,193,441
Total distributions paid $ 75,193,441
As of July 31, 2006, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Undistributed ordinary income $ 48,582,960
Undistributed long term capital gain 27,189,255
Unrealized appreciation/(depreciation) (60,130,969)(a)
Total accumulated earnings/(deficit) $ 15,641,246
(a) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
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.
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
24 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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;
however, it is not expected that the fund will have its fee reduced; 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.
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 conducted an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel.
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
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 25
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.
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
26 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
the NYAG Order. On January 26, 2006, the Adviser, Alliance Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. The court denied the writ and in September
2006 the Supreme Court of Appeals declined the defendants' petition for appeal.
On September 22, 2006, Alliance and Alliance Holding filed an answer and motion
to dismiss the Summary Order with the Securities Commissioner.
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), 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,
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 27
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. On October 4, 2006 the appeal was
withdrawn by stipulation, with plaintiffs reserving the right to reinstate it
at a later date.
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 a fund's tax returns to determine whether the tax
positions 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 in the current period. 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. On December 22, 2006, the Securities and
Exchange Commission notified the industry that the implementation of FIN 48 by
registered investment companies could be delayed until the last business day of
the first required financial statement reporting period for fiscal years
beginning after December 15, 2006. At this time, management is evaluating the
implications of FIN 48 and its impact on the financial statements has not yet
been determined.
On September 20, 2006, the FASB released Statement of Financial Accounting
Standards No. 157 "Fair Value Measurements" ("FAS 157"). FAS 157 establishes an
authoritative definition of fair value, sets out a framework for measuring fair
value, and requires additional disclosures about fair-value measurements. The
application of FAS 157 is required for fiscal years beginning after November
15, 2007 and interim periods within those fiscal years. At this time,
management is evaluating the implications of FAS 157 and its impact on the
financial statements has not yet been determined.
28 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
-------------------------------------------------------------------------------------------------------
Six Months
Ended December 1, Year Ended
January 31, Year Ended July 31, 2002 to November 30,
2007 ------------------------------------- July 31, --------------
(unaudited) 2006 2005 2004 2003(a) 2002 2001
------------- ------------- -------------- ------------- ------------- ------------- -------------
Net asset value,
beginning of period $5.60 $6.45 $5.38 $4.46 $3.70 $4.79 $5.83
Income From
Investment
Operations
Net investment loss(b) (.02) (.04) (.05) (.06)(c) (.03) (.04) (.04)
Net realized and
unrealized gain (loss)
on investment
transactions .98 (.22) 1.12 .98 .79 (1.05) (.71)
Net increase (decrease) in
net asset value from
operations .96 (.26) 1.07 .92 .76 (1.09) (.75)
Less: Distributions
Distributions from
net realized gain
on investment
transactions (.58) (.59) -0- -0- -0- -0- (.29)
Net asset value,
end of period $5.98 $5.60 $6.45 $5.38 $4.46 $3.70 $4.79
Total Return
Total investment return
based on net asset
value(d) 17.06% (5.32)% 19.89% 20.63% 20.54% (22.76)% (13.64)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $635,460 $593,870 $653,612 $610,854 $540,843 $469,570 $686,445
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 1.22%(e)(f) 1.23%(g) 1.25% 1.25% 1.45%(e) 1.34% 1.22%
Expenses,
before waivers/
reimbursements 1.22%(e)(f) 1.23%(g) 1.25% 1.26% 1.45%(e) 1.34% 1.22%
Net investment loss (.82)%(e) (.64)%(g) (.88)% (1.06)%(c) (1.11)%(e) (1.03)% (.69)%
Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226%
See footnote summary on page 35.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 29
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
--------------------------------------------------------------------------------------------------------
Six Months
Ended December 1, Year Ended
January 31, Year Ended July 31, 2002 to November 30,
2007 ------------------------------------- July 31, ---------------------
(unaudited) 2006 2005 2004 2003(a) 2002 2001
------------- ------------- -------------- ------------- ------------- ------------- -------------
Net asset value,
beginning of period $4.67 $5.51 $4.63 $3.87 $3.23 $4.22 $5.21
Income From
Investment
Operations
Net investment loss(b) (.04) (.08) (.09) (.09)(c) (.03) (.07) (.07)
Net realized and
unrealized gain (loss)
on investment
transactions .81 (.17) .97 .85 .67 (.92) (.63)
Net increase (decrease) in
net asset value from
operations .77 (.25) .88 .76 .64 (.99) (.70)
Less: Distributions
Distributions from
net realized gain
on investment
transactions (.58) (.59) -0- -0- -0- -0- (.29)
Net asset value,
end of period $4.86 $4.67 $5.51 $4.63 $3.87 $3.23 $4.22
Total Return
Total investment return
based on net asset
value(d) 16.37% (6.08)% 19.01% 19.64% 19.81% (23.46)% (14.34)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $44,394 $50,045 $70,236 $74,567 $53,461 $41,096 $61,816
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 2.05%(e)(f) 2.05%(g) 2.07% 2.09% 2.32%(e) 2.20% 2.08%
Expenses,
before waivers/
reimbursements 2.05%(e)(f) 2.05%(g) 2.07% 2.10% 2.32%(e) 2.20% 2.08%
Net investment loss (1.65)%(e) (1.46)%(g) (1.71)% (1.90)%(c) (1.98)%(e) (1.89)% (1.54)%
Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226%
See footnote summary on page 35.
30 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
--------------------------------------------------------------------------------------------------------
Six Months
Ended December 1, Year Ended
January 31, Year Ended July 31, 2002 to November 30,
2007 ------------------------------------------- July 31, --------------------------
(unaudited) 2006 2005 2004 2003(a) 2002 2001
------------- ------------- -------------- ------------- ------------- ------------- -------------
Net asset value,
beginning of period $4.66 $5.50 $4.62 $3.87 $3.22 $4.21 $5.20
Income From
Investment
Operations
Net investment loss(b) (.04) (.08) (.08) (.09)(c) (.03) (.06) (.07)
Net realized and
unrealized gain (loss)
on investment
transactions .82 (.17) .96 .84 .68 (.93) (.63)
Net increase (decrease) in
net asset value from
operations .78 (.25) .88 .75 .65 (.99) (.70)
Less: Distributions
Distributions from
net realized gain
on investment
transactions (.58) (.59) -0- -0- -0- -0- (.29)
Net asset value,
end of period $4.86 $4.66 $5.50 $4.62 $3.87 $3.22 $4.21
Total Return
Total investment return
based on net asset
value(d) 16.62% (6.11)% 19.05% 19.38% 20.19% (23.52)% (14.37)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $24,840 $26,701 $24,098 $26,017 $14,415 $10,860 $15,391
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 2.01%(e)(f) 2.01%(g) 2.05% 2.06% 2.27%(e) 2.16% 2.04%
Expenses,
before waivers/
reimbursements 2.01%(e)(f) 2.01%(g) 2.05% 2.07% 2.27%(e) 2.16% 2.04%
Net investment loss (1.61)%(e) (1.44)%(g) (1.68)% (1.87)%(c) (1.94)%(e) (1.85)% (1.51)%
Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226%
See footnote summary on page 35.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 31
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
-------------------------------------------------------------------------------------------------------
Six Months
Ended December 1, Year Ended
January 31, Year Ended July 31, 2002 to November 30,
2007 --------------------------------------------- July 31, --------------------------
(unaudited) 2006 2005 2004 2003(a) 2002 2001
------------- ------------- -------------- ------------- ------------- ------------ -------------
Net asset value,
beginning of period $5.72 $6.56 $5.45 $4.52 $3.74 $4.83 $5.86
Income From
Investment
Operations
Net investment loss(b) (.02) (.03) (.04) (.05)(c) -0-(h) (.03) (.03)
Net realized and
unrealized gain (loss)
on investment
transactions 1.00 (.22) 1.15 .98 .78 (1.06) (.71)
Net increase (decrease) in
net asset value from
operations .98 (.25) 1.11 .93 .78 (1.09) (.74)
Less: Distributions
Distributions from
net realized gain
on investment
transactions (.58) (.59) -0- -0- -0- -0- (.29)
Net asset value,
end of period $6.12 $5.72 $6.56 $5.45 $4.52 $3.74 $4.83
Total Return
Total investment return
based on net asset
value(d) 17.06% (5.05)% 20.37% 20.58% 20.86% (22.57)% (13.39)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $73,997 $70,832 $68,495 $44,440 $21,251 $13,092 $131,032
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements .99%(e)(f) 1.00%(g) 1.04% 1.04% 1.23%(e) 1.08% 1.08%
Expenses,
before waivers/
reimbursements .99%(e)(f) 1.00%(g) 1.04% 1.05% 1.23%(e) 1.08% 1.08%
Net investment loss (.59)%(e) (.42)%(g) (.64)% (.85)%(c) (.89)%(e) (.81)% (.64)%
Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226%
See footnote summary on page 35.
32 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R
-------------------------------------
Six Months
Ended Year March 1,
January 31, Ended 2005(i) to
2007 July 31, July 31,
(unaudited) 2006 2005
----------- ----------- -----------
Net asset value, beginning of period $5.58 $6.45 $6.05
Income From Investment Operations
Net investment loss(b) (.03) (.06) (.02)
Net realized and unrealized gain (loss)
on investment transactions .97 (.22) .42
Net increase (decrease) in net asset
value from operations .94 (.28) .40
Less: Distributions
Distributions from net realized gain
on investment transactions (.58) (.59) -0-
Net asset value, end of period $5.94 $5.58 $6.45
Total Return
Total investment return based on net
asset value(d) 16.76% (5.64)% 6.61%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $3,643 $1,974 $11
Ratio to average net assets of:
Expenses 1.47%(e)(f) 1.54%(g) 1.42%(e)
Net investment loss (1.07)%(e) (1.08)%(g) (.86)%(e)
Portfolio turnover rate 45% 135% 88%
See footnote summary on page 35.
AllianceBernstein Mid-Cap GROWTH FUND o 33
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class K
------------------------------------
Six Months
Ended Year March 1,
January 31, Ended 2005(i) to
2007 July 31, July 31,
(unaudited) 2006 2005
----------- ----------- -----------
Net asset value, beginning of period $5.60 $6.45 $6.05
Income From Investment Operations
Net investment loss(b) (.03) (.05) (.01)
Net realized and unrealized gain (loss)
on investment transactions .98 (.21) .41
Net increase (decrease) in net asset
value from operations .95 (.26) .40
Less: Distributions
Distributions from net realized gain
on investment transactions (.58) (.59) -0-
Net asset value, end of period $5.97 $5.60 $6.45
Total Return
Total investment return based on net
asset value(d) 16.88% (5.32)% 6.61%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $413 $298 $11
Ratio to average net assets of:
Expenses 1.26%(e)(f) 1.25%(g) 1.14%(e)
Net investment loss (.85)%(e) (.86)%(g) (.58)%(e)
Portfolio turnover rate 45% 135% 88%
See footnote summary on page 35.
34 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class I
-------------------------------------
Six Months
Ended Year March 1,
January 31, Ended 2005(i) to
2007 July 31, July 31,
(unaudited) 2006 2005
----------- ------------ -----------
Net asset value, beginning of period $5.63 $6.46 $6.05
Income From Investment Operations
Net investment loss(b) (.01) (.02) (.01)
Net realized and unrealized gain (loss)
on investment transactions .98 (.22) .42
Net increase (decrease) in net asset
value from operations .97 (.24) .41
Less: Distributions
Distributions from net realized gain
on investment transactions (.58) (.59) -0-
Net asset value, end of period $6.02 $5.63 $6.46
Total Return
Total investment return based on net
asset value(d) 17.16% (4.97)% 6.78%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $10,629 $9,372 $11
Ratio to average net assets of:
Expenses .84%(e)(f) .87%(g) .92%(e)
Net investment loss (.44)%(e) (.25)%(g) (.35)%(e)
Portfolio turnover rate 45% 135% 88%
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of expenses waived/reimbursed by the Adviser and the Transfer Agent.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales 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.
(e) Annualized.
(f) 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:
Six Months Ended
January 31, 2007
(unaudited)
-----------------
Class A 1.21%
Class B 2.03%
Class C 2.00%
Advisor Class .98%
Class R 1.46%
Class K 1.25%
Class I .83%
(g) The ratio includes expenses attributable to costs of proxy solicitation.
(h) Amount is less than $(.005).
(i) Commencement of distributions.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 35
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President and Chief Executive Officer
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)
Earl D. Weiner(1)
OFFICERS
Marc O. Mayer, President
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
John H. Fogarty(2), Vice President
Amy P. Raskin(2), Vice President
Benjamin Ruegsegger(2), Vice President
Catherine Wood(2), Vice President
Thomas Zottner, 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
Principal Underwriter
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
KPMG LLP
345 Park Avenue
New York, NY 10154
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee, the Governance and Nominating Committee and
the Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Fund's
portfolio are made by the Adviser's U.S. Mid Cap Growth Team. Mses. Wood and
Raskin and Messrs. Fogarty, Ruegsegger and Zottner are the investment
professionals with the most significant responsibility for the day-to-day
management of the Fund's portfolio.
36 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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
Mid-Cap Growth 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."
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 37
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:(3)
Net Assets
02/28/06 Advisory Fee Based on % of
Fund (million) Average Daily Net Assets
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. $923.6 75 bp on 1st $500 million
65 bp on next $500 million
55 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
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. $83,335 0.01%
Set forth below are the Fund's total expense ratios, calculated from the
beginning of the Fund's fiscal year through the Fund's semi-annual period:
Fund Total Expense Ratio(4) Fiscal Year End
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. Class A 1.29% July 31
Class B 2.10% (ratios as of
Class C 2.08% January 31, 2006)
Class R 1.63%
Class K 1.30%
Class I 0.91%
Adv. Class 1.07%
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
companies. The fee differential reflects, among other things, different
services provided to such clients, and different liabilities assumed. Services
provided by the Adviser to the Fund that are not provided to non-investment
company clients include providing office space and personnel to serve as Fund
Officers, who
(3) The Fund's fee schedule was not amended in connection with the Adviser's
settlement with the NYAG in December 2003 since the Fund's fee schedule already
had lower breakpoints than the NYAG related fee schedule for AllianceBernstein
Mutual Funds with a "Growth" category.
(4) Annualized.
38 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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
is 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 $300
million, it will negotiate a fee schedule. Discounts that are negotiated vary
based upon each client relationship. In addition to the AllianceBernstein
Institutional fee schedule, set forth below is what would have been the
effective advisory fee of the Fund had the AllianceBernstein Institutional fee
schedule been applicable to the Fund versus the Fund's advisory fee:
Net Assets AllianceBernstein ("AB") Effective Fund
02/28/06 Institutional ("Inst.") AB Inst. Advisory
Fund ($MIL) Fee Schedule Adv. Fee Fee(5)
- -------------------------------------------------------------------------------
Mid-Cap Growth $923.6 Mid-Cap Growth 0.522% 0.750%
Fund, Inc. 90 bp on 1st $25 million
70 bp on next $25 million
60 bp on next $50 million
50 bp on the balance
Minimum Account Size: $10 m
(5) Fund advisory fee information was provided by Lipper. See Section II for
additional discussion.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 39
The Adviser provides sub-advisory investment services to certain other
investment companies managed by other fund families. The Adviser charges the
following fee for the sub-advised fund that has a similar investment style as
the Fund:
Fund Sub-advised Fund Fee Schedule
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. Client # 1 0.75% on first $10 million
0.625% on next $10 million
0.50% on next $20 million
0.375% on next $20 million
0.25% thereafter
It is fair to note that the services the Adviser provides pursuant to
sub-advisory agreements are generally confined to the services related to the
investment process; in other words, they are not as comprehensive as the
services provided to the Fund by the Adviser.
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.(6)
Effective Lipper
Management Group
Fund Fee(7) Median Rank
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. 0.707 0.790 7/15
Lipper also analyzed the total expense ratio of the Fund in comparison to its
Lipper Expense Group(8) and Lipper Expense Universe.(9) Lipper describes a
Lipper
(6) 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.
(7) 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.
(8) 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.
(9) 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.
40 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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/objective with a similar load type as the subject
Fund. The result of that analysis is set forth below:
Lipper Lipper Lipper Lipper
Expense Group Group Universe Universe
Fund Ratio(%)(10) Median(%) Rank Median(%) Rank
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. 1.251 1.297 6/15 1.398 21/93
Based on this analysis, the Fund has a more favorable ranking on a total
expense ratio basis than it does on a management fee 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
indicated that they should be factored into the evaluation of the total
relationship between the Fund and the Adviser. Neither case law nor common
business practice precludes the Adviser's affiliates from earning a reasonable
profit on this type of relationship. These affiliates provide transfer agent,
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.
(10) The total expense ratio shown is for the Fund's Class A shares.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 41
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.(11)
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
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. $13,103
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 Fees Received CDSC Received
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. $2,369,036 $106,942
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 increased in 2005 in comparison to 2004. ABIS received the
following fee from the Fund in the most recent fiscal year:
Fund ABIS Fee(12)
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. $1,140,662
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
(11) 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.
(12) 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.
42 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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,
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.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 43
The information below, prepared by Lipper, shows the 1, 3, 5 and 10 year
performance ranking of the Fund(13) relative to its Lipper Performance
Group(14) and Lipper Performance Universe(15) for the periods ended December
31, 2005:
Mid-Cap Growth Fund, Inc. Group Universe
- -------------------------------------------------------------
1 year 12/15 83/116
3 year 1/14 1/101
5 year 2/12 19/81
10 year 5/8 25/39
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Fund (in bold)(16) versus its benchmark:(17)
Periods Ending December 31, 2005
Annualized Performance
- -------------------------------------------------------------------------------
1 3 5 10 Since
Fund Year Year Year Year Inception
- -------------------------------------------------------------------------------
Mid-Cap Growth Fund, Inc. 6.71 28.29 3.08 7.38 10.69
Russell Mid-Cap Growth Index 12.10 22.70 1.38 9.27 N/A
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
(13) The performance rankings are for the Class A shares of the Fund.
(14) The Lipper Performance Group is identical to the Lipper Expense Group.
(15) 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.
(16) The performance returns shown are for the Class A shares of the Fund.
(17) 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.
44 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
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
Small/Mid-Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Real Estate Investment Fund*
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
AllianceBernstein Global High Income Fund*
AllianceBernstein Income 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
- --------------------------------------------
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.
You should consider the investment objectives, risks, charges and expenses of
any AllianceBernstein fund/portfolio carefully before investing. For free
copies of our prospectuses, which contain this and other information, visit us
online at www.alliancebernstein.com or contact your financial advisor. Please
read the prospectus carefully before investing.
* Prior to January 26, 2007, AllianceBernstein Income Fund was named ACM
Income Fund and AllianceBernstein Global High Income Fund was named Alliance
World Dollar Government Fund II. Prior to March 1, 2007, Global Real Estate
Investment Fund was named Real Estate Investment Fund.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 45
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
MCG-0152-0107
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Mid-Cap Growth Fund, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: March 30, 2007
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: March 30, 2007
By: /s/ Joseph J. Mantineo
----------------------
Joseph J. Mantineo
Treasurer and Chief Financial Officer
Date: March 30, 2007