UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07391
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2007
Date of reporting period: April 30, 2007
ITEM 1. REPORTS TO STOCKHOLDERS
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SEMI-ANNUAL REPORT
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AllianceBernstein Global Strategic Income Trust
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Semi-Annual Report
April 30, 2007
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[LOGO]
AllianceBernstein
Investments
Investment Products Offered
---------------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------------
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein(R) at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and procedures,
and information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, without charge.
Simply visit AllianceBernstein's web site at www.alliancebernstein.com, or go to
the Securities and Exchange Commission's (the "Commission") web site at
www.sec.gov, or call AllianceBernstein at (800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the 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.
June 25, 2007
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Global Strategic Income Trust (the "Fund") for the semi-annual
reporting period ended April 30, 2007.
Investment Objective and Policies
This open-end Fund's investment objective is to generate current income
consistent with preservation of capital. The Fund invests in a portfolio of
fixed-income securities of U.S. and non-U.S. companies and U.S. government and
non-U.S. government securities and supranational entities, including lower-rated
securities. Under normal circumstances, the Fund invests at least 65% of its net
assets in fixed-income securities of issuers located in at least three
countries, one of which may be the United States. The Fund limits its
investments in the securities of any one foreign government to 25% of its total
assets. The Fund may invest in debt securities with a range of maturities from
short- to long-term. The Fund's investments in U.S. government securities and
other fixed-income securities may include mortgage-related securities, other
asset-backed securities, inflation-protected securities and zero coupon
securities. The Fund may make use of borrowings for investment purposes. The
Fund will maintain at least 65% of its total assets in investment-grade
securities. Its other investments will include below-investment-grade securities
such as corporate high yield fixed-income securities, sovereign debt obligations
and fixed-income securities of issuers located in emerging markets. The Fund may
invest, without limit, in derivatives, such as options, futures, forwards and
swaps.
Investment Results
The table on page 5 shows the Fund's performance compared to its benchmark, the
Lehman Brothers (LB) Global Aggregate Bond Index (U.S. dollar hedged) for the
six- and 12-month periods ended April 30, 2007. Also included in the table are
returns for Fund's peer group, as represented by the Lipper Multi-Sector Income
Funds Average (the "Lipper Average"). Funds in the Lipper Average have generally
similar investment objectives to the Fund, although some may have different
investment policies and sales and management fees. For an additional comparison,
returns for the three-month London Inter-bank Offering Rate (LIBOR), are also
included.
The Fund's Class A shares, unadjusted for sales charges, outperformed both its
benchmark and the Lipper Average for both the six- and 12-month periods ended
April 30, 2007. In January of 2007, proceeds were received and credited to the
Fund resulting from the WorldCom class action settlement. The addition of these
proceeds was a significant contributor to the Fund's outperformance for both the
six- and 12-month reporting periods.
The Fund's exposure to emerging market debt, particularly local currency debt,
also added to the Fund's outperformance for both the six- and 12-month reporting
periods. The Fund's developed-market currency exposure to Australia, New Zealand
and the U.K., as well as exposure to high yield corporates and bank loan
holdings, were also positives for both reporting periods. The Fund's underweight
to government debt in Europe and the
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 1
U.K. also contributed positively, as both regions underperformed.
Market Review and Investment Strategy
Most developed global bond returns hedged in U.S. dollars ("USD") were positive,
albeit tepid, for the six-month reporting period. The tightening trend among
global central banks in developed economies continued throughout this period,
dampening overall Fund returns. During the six-month period, the Euro area, U.K.
and Japan all raised their official rates while the U.S. Federal Reserve (the
"Fed") held rates steady. Both Japan, returning 3.71% and the U.S., returning
2.19% outperformed among the major countries, according to Lehman Brothers. The
U.S. outperformed as short and intermediate U.S. yields fell and the curve
between the two- and 30-year U.S. Treasury yields steepened in anticipation of
the Fed easing rates later this year. Consumer credit concerns in the U.S.
roiled the subprime mortgage sector, though no widespread effect was evident.
European countries returned 0.22% as the European Central Bank ("ECB") continued
to tighten. The U.K. posted the weakest government returns at -2.28%, dampened
by strong economic growth and expectations of further rate hikes.
Subprime mortgage weakness, leveraged buy out ("LBO") concerns and a
deteriorating housing market all weighed on U.S. investment-grade corporate
bonds. Investment-grade corporates posted a relatively modest return of 2.78%.
Within the investment-grade universe, lower-rated BBB credit outperformed the
higher-rated quality tiers during the six-month reporting period. Intermediate
credit returned 1.63% outperforming long credit, which returned 0.24% as longer
maturity securities were adversely impacted by rising long-term rates.
The high yield corporate debt market posted the strongest results within
fixed-income asset classes at 6.88%. High yield continued to be supported by a
low default risk environment, strong investor demand for yield and a decline in
new issuance. According to Lehman Brothers, high yield bank loan debt was also
positive for the period, posting a return of 3.98%. The emerging market debt
class posted a solid return of 5.29%, supported by solid global growth, strong
investor demand and ample financial-market liquidity. Emerging market debt in
local currency terms (unhedged in USD) posted even stronger results at 11.33%,
due to strong local currencies and falling interest rates. Brazil, the Fund's
largest local currency holding, significantly outperformed, posting a strong
return of 22.55%.
During the six-month reporting period, the Fund continued to take less absolute
risk. Flat yield curves and narrow spreads globally signaled that investors were
not being adequately compensated for taking risk. Within the Fund's developed
government debt holdings, The Fund's Global Fixed Income Investment Team and
Global Credit Investment Team (the "Teams") continued to underweight Europe and
the U.K., with a market weight in the U.S. Rising official rates and a
downwardly sloping yield curve made U.K. debt relatively unattractive.
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2 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Robust growth and expectations of further rate increases also led the Teams to
underweight the Euro area. The Fund also continued to hold local Mexican debt as
well as an overweight to South Korea. Currency exposure favored within the Fund
included Australia, New Zealand and the U.K.
The Fund also maintained an allocation to investment-grade corporate bonds as
well as a small position in high yield corporate bonds. Within the Fund's
corporate debt allocation, the Teams maintained a cautious posture given what
they perceived as insufficient compensation for assuming risk at a time of a
flat or inverted U.S. yield curve and narrow spreads. The Fund also had an
allocation to bank loan debt, which offered attractive return potential.
Within the Fund's emerging market allocation, Brazil, Argentina, Peru and Panama
were favored. Like most Latin American countries, Brazil benefited from a
virtuous cycle of robust net exports, capital inflows, and prudent fiscal and
monetary policy. Brazil has shown impressive progress in building dollar
reserves and has made great strides in decreasing its external and sovereign
debt ratios, two of the most critical factors for advancing to investment grade.
Argentina continued to be supported by strong growth (8.6% in the fourth quarter
of 2007), fiscal surplus and robust trade with their economy benefiting from
soft commodity prices. Peru has benefited from strong economic growth and
progress in building dollar reserves and decreasing its external and sovereign
debt ratios. Panama was supported by a strengthening economy and canal-related
fees, services and expansion. Also within the Fund, holdings in Ecuador were
eliminated due to political risk in that country.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 3
Historical Performance
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HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.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
Neither the unmanaged Lehman Brothers (LB) Global Aggregate Bond Index (U.S.
dollar hedged) nor the unmanaged three-month LIBOR reflects fees and expenses
associated with the active management of a mutual fund portfolio. The LB Global
Aggregate Index provides a broad-based measure of the international
investment-grade bond market. The index combines the LB U.S. Aggregate Index
with dollar-denominated versions of the Pan-European Index and the Japanese,
Canadian, Australian and New Zealand components of the Global Treasury Index.
The three-month LIBOR is one of the most widely-used interest rates in the
fixed-income universe. It is often the base for bond issues from corporates and
countries, both fixed- and floating-rate notes. The Three-month LIBOR is also
the key rate for the floating-rate leg of interest rate swaps. Eurodollar
futures, the most traded futures in the world, are based on Three-month LIBOR.
The Lipper Multi-Sector Income Funds Average consisted of 131 funds and 126
funds for the six- and 12-month periods ended April 30, 2007, respectively. An
investor cannot invest directly in an index or average, and their results are
not indicative of the performance for any specific investment, including the
Fund.
A Word About Risk
The Fund can invest in foreign securities, including in emerging markets, which
may magnify fluctuations due to changes in foreign exchange rates and the
possibility of substantial volatility due to political and economic
uncertainties in foreign countries. Price fluctuation in the Fund's securities
may be caused by changes in the general level of interest rates or changes in
bond credit quality ratings. The Fund can invest a portion of its assets in the
securities of a single issuer, a single region, a single foreign country and may
invest up to 35% of its assets in below-investment-grade securities which may
present greater risk. The Fund may use leverage which may increase fluctuation
caused by changes in interest rates or bond credit quality ratings. Please note,
as interest rates rise, existing bond prices fall and can cause the value of an
investment in the Fund to decline. Changes in interest rates have a greater
effect on bonds with longer maturities than on those with shorter maturities.
Similar to direct bond ownership, bond funds have the same interest rate,
inflation and credit risks that are associated with the underlying bonds owned
by the Fund. Fund purchasers should understand that, in contrast to owning
individual bonds, there are ongoing fees and expenses associated with owning
shares of bond funds. The Fund may invest in high yield bonds, otherwise known
as "junk bonds", which involves a greater risk of default and price volatility
than other bonds. Investing in below-investment-grade securities presents
special risks, including credit risk. While the Fund invests principally in
bonds and other fixed-income securities, in order to achieve its investment
objectives, the Fund may at times use certain types of investment derivatives,
such as options, futures, forwards and swaps. These instruments involve risks
different from, and in certain cases, greater than, the risks presented by more
traditional investments. These risks are fully discussed in the Fund's
prospectus.
(Historical Performance continued on next page)
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4 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
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-----------------------
Returns
THE FUND VS. ITS BENCHMARK -----------------------
PERIODS ENDED APRIL 30, 2007 6 Months 12 Months
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AllianceBernstein Global Strategic Income Trust
Class A 7.89% 9.92%
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Class B 7.37% 9.11%
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Class C 7.39% 9.13%
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Advisor Class* 7.94% 10.26%
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Class R* 7.70% 9.70%
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Class K* 7.80% 9.82%
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Class I* 8.03% 10.23%
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Lehman Brothers Global Aggregate Bond Index
(USD Hedged) 1.88% 6.26%
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Lipper Multi-Sector Income Funds Average 4.67% 8.49%
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Three-month LIBOR 2.69% 5.40%
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* 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.
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See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 5
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF APRIL 30, 2007
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NAV Returns SEC Returns SEC Yields**
Class A Shares
1 Year 9.92% 5.27% 2.97%
5 Years 8.39% 7.47%
10 Years 6.38% 5.92%
Class B Shares
1 Year 9.11% 5.11% 2.36%
5 Years 7.61% 7.61%
10 Years 5.95% 5.95%
Class C Shares
1 Year 9.13% 8.13% 2.39%
5 Years 7.62% 7.62%
10 Years 5.64% 5.64%
Advisor Class Shares+
1 Year 10.26% 10.26% 3.40%
5 Years 8.71% 8.71%
Since Inception* 6.08% 6.08%
Class R Shares+
1 Year 9.70% 9.70% 2.90%
Since Inception* 6.57% 6.57%
Class K Shares+
1 Year 9.82% 9.82% 3.12%
Since Inception* 6.84% 6.84%
Class I Shares+
1 Year 10.23% 10.23% 3.53%
Since Inception* 7.21% 7.21%
The Fund's total annual operating expense ratios are 1.78%, 2.50%, 2.49%, 1.49%,
2.03%, 1.80%, and 1.46% for Class A, Class B, Class C, Advisor Class, Class R,
Class K, and Class I, per the prospectus, gross of any fee waivers or expense
reimbursments.
* Inception dates: 12/18/97 for Advisor Class shares; 3/1/05 for Class R,
Class K and Class I shares.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended April 30, 2007.
+ These share classes are offered at net asset value (NAV) to eligible
investors and their SEC returns are the same as the NAV returns. Please
note that these share classes are for investors purchasing shares through
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 dates for these share classes are listed above.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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6 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES) AS OF THE MOST RECENT CALENDAR
QUARTER-END (MARCH 31, 2007)
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SEC Returns
Class A Shares
1 Year 5.19%
5 Years 7.39%
10 Years 6.04%
Class B Shares
1 Year 5.05%
5 Years 7.54%
10 Years 6.07%
Class C Shares
1 Year 8.08%
5 Years 7.55%
10 Years 5.76%
Advisor Class Shares+
1 Year 10.20%
5 Years 8.66%
Since Inception* 6.05%
Class R Shares+
1 Year 9.63%
Since Inception* 6.48%
Class K Shares+
1 Year 9.76%
Since Inception* 6.70%
Class I Shares+
1 Year 10.29%
Since Inception* 7.13%
* Inception dates: 12/18/97 for Advisor Class shares; 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 dates for these share classes are listed above.
See Historical Performance disclosures on page 4.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 7
Fund Expenses
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FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent deferred
sales charges on redemptions and (2) ongoing costs, including management fees;
distribution (12b-1) fees; and other Fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period as indicated below.
Actual Expenses
The table below provides information about actual account values and actual
expenses. You may use the information, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes
The table below also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
annual rate of return of 5% before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions. Therefore,
the hypothetical example is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if these transactional costs were included, your costs would have been
higher.
Beginning Ending
Account Value Account Value Expenses Paid
November 1, 2006 April 30, 2007 During Period*
--------------------- -------------------------- ----------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
------ ------------ ---------- ------------- ------- ------------
Class A $1,000 $1,000 $1,078.94 $1,016.48 $ 8.66 $ 8.40
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Class B $1,000 $1,000 $1,073.68 $1,012.74 $12.49 $12.13
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Class C $1,000 $1,000 $1,073.86 $1,012.89 $12.34 $11.98
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Advisor Class $1,000 $1,000 $1,079.37 $1,017.95 $ 7.11 $ 6.90
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Class R $1,000 $1,000 $1,077.03 $1,015.37 $ 9.78 $ 9.49
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Class K $1,000 $1,000 $1,077.95 $1,016.41 $ 8.71 $ 8.45
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Class I $1,000 $1,000 $1,080.34 $1,018.50 $ 6.55 $ 6.36
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* Expenses are equal to the classes' annualized expense ratios of 1.68%,
2.43%, 2.40%, 1.38%, 1.90%, 1.69% and 1.27%, respectively, multiplied by
the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period).
** Assumes 5% return before expenses.
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8 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio Summary
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PORTFOLIO SUMMARY
April 30, 2007 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mill): $81.8
SECURITY TYPE BREAKDOWN*
44.0% Sovereigns
9.6% Bank Loans
8.9% Fixed Rate 30-Years
8.7% Corporates
7.4% Agency ARMS
5.9% Non-Agency Fixed Rate CMBS [PIE CHART OMITTED]
4.3% Home Equity Loans Floating Rates
2.5% Agency Adjustable Rates
2.0% Inflation-Linked Securities
2.0% Non-Agency Fixed Rates
1.7% Non-Agency ARMS
1.2% Non-Agency Adjustable Rates
1.6% Other
0.2% Short-Term
COUNTRY BREAKDOWN*
48.4% United States
11.5% Japan
7.7% Sweden
5.8% Mexico
4.6% Norway
3.9% United Kingdom [PIE CHART OMITTED]
3.1% Australia
2.9% New Zealand
2.0% Republic of (South) Korea
1.8% Poland
1.8% Brazil
6.3% Other
0.2% Short-Term
* All data are as of April 30, 2007. The Fund's security type and country
breakdowns are expressed as a percentage of total investments and may vary
over time. "Other" Security Type weightings represent less than 1.2%
weightings in the following security types: Other Floating Rates, Home
Equity Loans Fixed Rates, Non-Agency Adjustable Rate CMBS and Municipal
Bonds. "Other" country weightings represent less than 1.8% weightings in
the following countries: Argentina, Canada, Indonesia, Ireland,
Netherlands, Panama, Peru, Russia and Turkey.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 9
Portfolio of Investments
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PORTFOLIO OF INVESTMENTS
April 30, 2007 (unaudited)
Principal
Amount
(000) U.S. $ Value
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SOVEREIGNS-42.9%
Argentina-1.0%
Republic of Argentina
5.475%, 8/03/12(a)(b) ..................... US$ 856 $ 817,914
----------
Australia-3.0%
Government of Australia
Series 1007
10.00%, 10/15/07 .......................... AUD 2,925 2,470,648
----------
Brazil-1.6%
Republic of Brazil
8.25%, 1/20/34 ............................ US$ 331 425,335
12.50%, 1/05/16(a) ........................ 1,559 911,483
----------
1,336,818
----------
Indonesia-0.6%
Indonesia Rupiah Credit Linked Note
12.90%, 6/17/22 ........................... IDR 3,656,000 483,000
----------
Japan-9.3%
Japan Government Five Year Bond
Series 32
0.70%, 9/20/08 ............................ JPY 908,100 7,596,674
----------
Mexico-5.6%
Mexican Bonos
Series MI10
8.00%, 12/19/13 ........................... MXN 34,000 3,150,542
9.50%, 12/18/14 ........................... 14,400 1,449,838
----------
4,600,380
----------
New Zealand-2.8%
New Zealand Government Bond
Series 708
6.00%, 7/15/08 ............................ NZD 3,170 2,312,687
----------
Norway-4.5%
Government of Norway
5.50%, 5/15/09 ............................ NOK 21,736 3,695,840
----------
Panama-0.5%
Republic of Panama
9.625%, 2/08/11 ........................... US$ 375 427,500
----------
Peru-0.7%
Peru Bono Soberano
8.20%, 8/12/26 ............................ PEN 14 5,466
12.25%, 8/10/11 ........................... 600 236,993
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10 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
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Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
Peru Government International Bond
Series 20YR
6.125%, 3/07/17(c) ........................ US$ 310 $ 309,520
-----------
551,979
-----------
Poland-1.8%
Republic of Poland
Series 0511
4.25%, 5/24/11 ............................ PLN 4,203 1,476,015
-----------
Republic of (South) Korea-2.0%
HSBC Bank USA NA
5.00%, 9/10/16(d) ......................... US$ 1,623 1,595,405
-----------
Russia-0.9%
Russian Ministry of Finance
Series VII
3.00%, 5/14/11(a) ......................... 702 684,450
-----------
Sweden-6.5%
Government of Sweden
Series 1043
5.00%, 1/28/09 ............................ SEK 34,970 5,307,571
-----------
Turkey-0.2%
Turkey Government Bond
Zero Coupon, 11/26/08 ..................... TRY 310 171,664
-----------
United Kingdom-1.9%
United Kingdom Gilt
7.25%, 12/07/07 ........................... GBP 753 1,519,853
-----------
Total Sovereigns
(cost $33,708,495) ........................ 35,048,398
-----------
BANK LOANS-9.4%
Best Brands Corp.
8.12%, 12/18/12 ........................... US$ 500 500,000
Blue Pearl USA Ltd.
10.07-10.11%, 9/30/12 ..................... 470 476,898
Dean Foods Company
6.875%, 4/02/14 ........................... 500 500,670
FirstLight Power Resources, Inc.
9.875%, 4/15/13 ........................... 1,000 1,011,250
GPS CCMP Merger Corp.
7.85%, 10/31/13 ........................... 495 494,173
Infrastrux Group, Inc.
3.25-8.57%, 11/03/12 ...................... 498 497,659
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 11
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
IPC Systems, Inc.
7.85%, 9/28/13 ............................ US$ 498 $ 499,988
Level 3 Financing, Inc.
7.61%, 2/13/14 ............................ 500 502,290
MGM Holdings II
8.60%, 3/15/12 ............................ 495 494,767
North Las Vegas
8.10%, 4/20/11 ............................ 79 78,635
12.35%, 4/20/12 ........................... 500 497,500
PGT Industries, Inc.
8.36%, 2/14/12 ............................ 373 374,821
Sorenson Communications, Inc.
7.86%, 4/06/14 ............................ 500 501,250
Talecris Biotherapeutics Holdings Corp.
8.86%, 12/01/13 ........................... 499 502,491
United Subcontractors, Inc.
8.12%, 12/27/12 ........................... 741 733,834
----------
Total Bank Loans
(cost $7,658,599) ......................... 7,666,226
----------
FIXED RATE 30-YEARS-8.7%
Federal National Mortgage
Association-6.4%
Series 2003
5.50%, 6/01/33 ............................ 1,684 1,669,675
Series 2005
5.50%, 2/01/35(a) ......................... 3,649 3,615,792
----------
5,285,467
----------
Federal Home Loan Mortgage
Corp.-2.3%
Series 2007
7.00%, 2/01/37 ............................ 1,811 1,866,846
----------
Total Fixed Rate 30-Years
(cost $7,162,462) ......................... 7,152,313
----------
CORPORATES-8.6%
Canada-0.3%
Abitibi-Consolidated, Inc.
6.00%, 6/20/13(a) ......................... 275 237,875
----------
Ireland-1.0%
Anglo Irish Bank Corp.
4.352%, 6/25/14(b) ........................ EUR 600 823,513
----------
- --------------------------------------------------------------------------------
12 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
Netherlands-1.0%
ING Bank NV
6.00%, 5/30/07 ............................ NLG 300 $ 186,021
Koninklijke Philips Electronics NV
5.75%, 5/16/08 ............................ EUR 470 650,034
----------
836,055
----------
Sweden-1.0%
Skandinaviska Enskilda
3.984%, 10/06/14(b) ....................... 600 820,236
----------
United Kingdom-2.0%
Barclays Bank PLC
Series 3
6.263%, 12/31/49(b) ....................... GBP 500 1,000,009
Rentokil Initial PLC
5.75%, 5/21/07 ............................ EUR 300 409,644
Vodafone Group PLC FRN
4.358%, 1/13/12(b) ........................ 150 205,911
----------
1,615,564
----------
United States-3.3%
Altria Group, Inc.
7.75%, 1/15/27 ............................ US$ 150 179,464
Anz Capital Trust 111
4.549%, 12/15/53(b) ....................... EUR 600 824,112
Aramark Corp.
8.86%, 2/01/15(b)(d) ...................... US$ 200 205,500
Countrywide Home Loans, Inc.
4.293%, 11/24/08(b) ....................... EUR 300 409,897
Ford Motor Credit Co.
4.95%, 1/15/08(a) ......................... US$ 100 98,896
6.625%, 6/16/08 ........................... 115 114,934
Genworth Financial, Inc.
1.60%, 6/20/11(a) ......................... JPY 22,000 183,765
HCA, Inc.
7.58%, 9/15/25(a) ......................... US$ 65 57,117
Ipalco Enterprises, Inc.
8.375%, 11/14/08(a) ....................... 150 154,875
ITT Corp.
7.375%, 11/15/15 .......................... 316 326,163
Liberty Mutual Group, Inc.
7.80%, 3/15/37(d) ......................... 105 105,542
----------
2,660,265
----------
Total Corporates
(cost $6,771,270) ......................... 6,993,508
----------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 13
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
AGENCY ARMS-7.2%
Federal Home Loan Mortgage
Corp.-5.0%
Series 2006
5.85%, 12/01/36(b) ........................ US$ 2,264 $2,279,178
6.189%, 12/01/36(b) ....................... 583 590,696
Series 2007
5.957%, 2/01/37(b) ........................ 600 604,997
6.125%, 3/01/37(b) ........................ 600 606,468
----------
4,081,339
----------
Federal National Mortgage
Association-2.2%
6.052%, 2/01/37(b) ........................ 402 407,529
Series 2005
4.172%, 3/01/35(b) ........................ 648 648,268
Series 2006
5.863%, 11/01/36(b) ....................... 753 760,579
----------
1,816,376
----------
Total Agency ARMS
(cost $5,890,575) ......................... 5,897,715
----------
NON-AGENCY FIXED RATE CMBS-5.8%
Banc of America Commercial Mortgage, Inc.
Series 2006-6, Class A2
5.309%, 10/10/45 .......................... 420 421,592
Bear Stearns Commercial Mortgage
Securities
Series 2002-TOP6, Class A2
6.46%, 10/15/36 ........................... 480 503,323
Citigroup Commercial Mortgage Trust
Series 2004-C1, Class A4
5.529%, 4/15/40(c) ........................ 790 800,257
Commercial Mortgage Pass Through
Certificates
Series 2006-C8, Class A2B
5.248%, 12/10/46 .......................... 580 580,969
JP Morgan Chase Commercial Mortgage
Securities Corp.
Series 2006-CB15, Class A4
5.814%, 6/12/43(c) ........................ 830 854,576
LB-UBS Commercial Mortgage Trust
Series 2006-C4, Class A4
6.097%, 6/15/38(c) ........................ 755 786,703
Merrill Lynch/Countrywide Commercial
Mortgage Trust
Series 2006-1, Class A2
5.439%, 2/12/39(c) ........................ 790 796,217
----------
Total Non-Agency Fixed Rate CMBS
(cost $4,740,449) ......................... 4,743,637
----------
- --------------------------------------------------------------------------------
14 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
HOME EQUITY LOANS FLOATING RATES-4.2%
United States-4.2%
ACE Securities Corp.
Series 2007-HE2, Class M1
5.64%, 12/25/36(b) .............................. US$ 160 $ 159,450
Bear Stearns Asset Backed Securities, Inc.
Series 2007-HE3, Class M1
5.77%, 4/25/37(b) ............................... 175 175,595
BNC Mortgage Loan Trust
Series 2007-1, Class M1
5.56%, 3/25/37(b) ............................... 200 198,952
Credit-Based Asset Servicing and
Securitization LLC
Series 2006-CB8, Class M1
5.57%, 10/25/36(b) .............................. 160 158,995
HFC Home Equity Loan Asset Backed
Certificates
Series 2006-1, Class M1
5.60%, 1/20/36(b) ............................... 293 291,924
Lehman XS Trust
Series 2006-18N, Class M2
5.73%, 12/25/36(b) .............................. 415 412,224
Series 2007-2N, Class M1
5.66%, 2/25/37(b) ............................... 395 392,278
LXS 2007-4n M1
5.77%, 3/25/47 .................................. 400 399,936
Mabs 2006-nc3 M1
Series 2006-NC3, Class M1
5.55%, 10/25/36(b) .............................. 200 198,864
Option One Mortgage Loan Trust
Series 2007-2, Class M1
5.68%, 3/25/37(b) ............................... 135 134,673
Residential Asset Securities Corp.
Series 2007-KS3, Class M1S
5.72%, 4/25/37(b) ............................... 400 400,188
Wells Fargo Home Equity Trust
Series 2004-1, Class 1A
5.62%, 4/25/34(b) ............................... 504 504,698
----------
Total Home Equity Loans Floating Rates
(cost $3,434,700) ............................... 3,427,777
----------
AGENCY ADJUSTABLE RATES-2.4%
Freddie Mac Reference REMIC
Series 2006-R008, Class FK
5.74%, 7/15/23(b) ............................... 1,190 1,195,344
Freddie Mac REMICS
Series 2005-3067, Class FA
5.67%, 11/15/35(b) .............................. 792 794,771
----------
Total Agency Adjustable Rates
(cost $1,985,462) ............................... 1,990,115
----------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 15
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
INFLATION-LINKED SECURITIES-2.1%
Brazil-0.1%
Unibanco Grand Cayman
8.70%, 2/11/10(d) .............................. BRL 250 $ 120,624
----------
Japan-2.0%
Government of Japan CPI Linked Bond
Series 5
0.80%, 9/10/15 ................................. JPY 197,000 1,616,788
----------
Total Inflation-Linked Securities
(cost $1,777,460) .............................. 1,737,412
----------
NON-AGENCY FIXED RATES-1.9%
Countrywide Alternative Loan Trust
Series 2006-J8, Class A2
6.00%, 2/25/37 ................................. US$ 367 368,569
Merrill Lynch Mortgage Investors, Inc.
Series 2005-A9, Class 2A1A
5.159%, 12/25/35 ............................... 366 363,134
Morgan Stanley Mortgage Loan Trust
Series 2006-11, Class 1A2
6.354%, 8/25/36(c) ............................. 200 200,738
Residential Accredit Loans, Inc.
Series 2007-QS1, Class 1A1
6.00%, 1/25/37 ................................. 273 275,200
Wells Fargo Mortgage Backed Securities Trust
Series 2006-AR11, Class A4
5.526%, 8/25/36(c) ............................. 363 361,843
----------
Total Non-Agency Fixed Rates
(cost $1,567,503) .............................. 1,569,484
----------
NON-AGENCY ARMS-1.6%
BAFC 2007-c 1a3
5.763%, 5/20/47 ................................ 405 405,152
Bear Stearns Alt-A Trust
Series 2007-1, Class 21A1
5.75%, 1/25/47 ................................. 384 386,072
JP Morgan Alternative Loan Trust
Series 2006-A4, Class A1
5.95%, 9/25/36 ................................. 529 535,125
----------
Total Non-Agency ARMS
(cost $1,322,625) .............................. 1,326,349
----------
- --------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
NON-AGENCY ADJUSTABLE RATES-1.2%
Countrywide Alternative Loan Trust
Series 2005-62, Class 2A1
6.014%, 12/25/35(b) ............................ US$ 244 $242,853
Series 2007-OA3, Class M1
5.63%, 4/25/47(b) .............................. 120 118,856
Residential Accredit Loans, Inc.
Series 2006-QO7, Class M1
5.734%, 9/25/46(b) ............................. 325 323,580
Washington Mutual, Inc.
Series 2006-AR17, Class B1
5.71%, 12/25/46(b) ............................. 299 299,571
--------
Total Non-Agency Adjustable Rates
(cost $987,514) ................................ 984,860
--------
OTHER FLOATING RATES-0.8%
United States-0.8%
Libertas Preferred Funding Ltd.
Series 2007-3A, Class 2
6.005%, 4/09/47(b)(d) .......................... 280 275,103
Topanga CDO Ltd.
Series 2006-2A, Class A1
5.80%, 12/10/46(b)(d) .......................... 350 348,642
--------
Total Other Floating Rates
(cost $624,957) ................................ 623,745
--------
HOME EQUITY LOANS FIXED RATES-0.5%
United States-0.5%
Home Equity Mortgage Trust
Series 2006-5, Class A1
5.50%, 1/25/37 ................................. 320 319,623
Nationstar Nim 2007-a A
9.97%, 3/25/37(d) .............................. 69 68,737
--------
Total Home Equity Loans Fixed Rates
(cost $388,159) ................................ 388,360
--------
NON-AGENCY ADJUSTABLE RATE CMBS-0.2%
Credit Suisse Mortgage Capital Certificates
Series 2006-TF2A, Class SVD
5.79%, 10/15/21(b)(d)
(cost $190,000) ................................ 190 190,000
--------
MUNICIPAL BONDS-0.1%
United States-0.1%
Alameda Corridor Transportation Authority MBIA
6.60%, 10/01/29
(cost $117,529) ................................ 100 112,607
--------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 17
Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-0.2%
Treasury Bills-0.2%
New Zealand Treasury Bills
Zero Coupon, 6/20/07
(cost $127,065) ................................. NZD 176 $ 129,051
-----------
Total Investments-97.8%
(cost $78,454,824) .............................. 79,981,557
Other assets less liabilities-2.2% ................. 1,800,863
-----------
Net Assets-100.0% .................................. $81,782,420
===========
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at Unrealized
Number of Expiration Original April 30, Appreciation/
Type Contracts Month Value 2007 (Depreciation)
- ------------------------------------------------------------------------------------------
Purchased Contracts
US 5 Yr Note 16,000 June 2007 $1,697,000 $1,693,250 $(3,750)
Sold Contracts
Euro-Bobl Future 24,000 June 2007 3,562,392 3,529,640 32,752
JPN 10 Yr Bond 2,000,000 June 2007 2,246,809 2,248,985 (2,176)
US 10 Yr Treasury Note 16,000 June 2007 1,728,375 1,733,250 (4,875)
US 10 Yr Treasury Note 30,000 June 2007 3,240,938 3,249,844 (8,906)
US Treasury Bond 1,000 June 2007 112,812 111,750 1,062
-------
$17,857
-------
FORWARD CURRENCY EXCHANGE CONTRACTS (see Note D)
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination April 30, Appreciation/
(000) Date 2007 (Depreciation)
- --------------------------------------------------------------------------------
Buy Contracts:
Japanese Yen
settling 5/15/07 24,157 $207,010 $202,540 $(4,470)
Norwegian Kroner
settling 5/14/07 441 73,286 74,184 898
Swiss Franc
settling 5/14/07 300 246,163 248,426 2,263
Swiss Franc
settling 5/14/07 71 58,814 59,121 307
Sale Contracts:
Australian Dollar
settling 5/22/07 156 122,516 129,141 (6,625)
Australian Dollar
settling 5/22/07 118 97,592 98,293 (701)
Canadian Dollar
settling 6/14/07 83 72,929 75,026 (2,097)
- --------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Portfolio of Investments
- --------------------------------------------------------------------------------
U.S. $ U.S. $
Contract Value on Value at Unrealized
Amount Origination April 30, Appreciation/
(000) Date 2007 (Depreciation)
- -----------------------------------------------------------------------------------------
Sale Contracts (continued):
Euro Dollar
settling 5/29/07 1,858 $ 2,485,266 $ 2,537,863 $ (52,597)
Euro Dollar
settling 5/29/07 302 404,232 412,171 (7,939)
Great British Pound
settling 5/17/07 46 89,454 92,526 (3,072)
Great British Pound
settling 5/17/07 67 131,692 133,588 (1,896)
Japanese Yen
settling 5/15/07 1,247,147 10,642,786 10,456,298 186,488
Korean Won
settling 5/07/07 92,490 97,460 99,359 (1,899)
Korean Won
settling 5/07/07 1,161,074 1,240,000 1,247,307 (7,307)
Korean Won
settling 6/25/07 295,061 318,675 317,297 1,378
Mexican Peso
settling 6/28/07 47,155 4,281,422 4,291,883 (10,461)
Mexican Peso
settling 6/28/07 5,844 532,999 531,851 1,148
New Zealand Dollar
settling 6/19/07 119 88,642 88,198 444
Norwegian Kroner
settling 5/14/07 37,757 6,096,637 6,348,546 (251,909)
Polish Zloty
settling 6/13/07 3,998 1,405,295 1,442,711 (37,416)
Swedish Krona
settling 5/23/07 31,857 4,576,027 4,760,462 (184,435)
Swedish Krona
settling 5/23/07 2,045 296,714 305,560 (8,846)
Swiss Franc
settling 5/14/07 2,309 1,889,915 1,914,035 (24,120)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 19
Portfolio of Investments
- --------------------------------------------------------------------------------
(a) Position, or a portion thereof, has been segregated to collateralize
forward currency exchange contracts. The aggregate market value of these
securities amounted to $6,400,847.
(b) Floating Rate Security. Stated interest rate was in effect at April 30,
2007.
(c) Variable rate coupon, rate shown as of April 30, 2007.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in the
transactions exempt from registration, normally to qualified institutional
buyers. At April 30, 2007, the aggregate market value of these securities
amounted to $2,909,553 or 3.6% of net assets.
Currency Abbreviations:
AUD - Australian Dollar
BRL - Brazilian Real
EUR - Euro Dollar
GBP - Great British Pound
JPY - Japanese Yen
MXN - Mexican Peso
NLG - Dutch Guilder
NOK - Norwegian Krone
NZD - New Zealand Dollar
PEN - Peruvian New Sol
PLN - Polish Zloty
SEK - Swedish Krona
TRY - New Turkish Lira
US$ - United States Dollar
Glossary:
CPI - Consumer Price Index
MBIA - Municipal Bond Investors Assurance
See notes to financial statements.
- --------------------------------------------------------------------------------
20 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
April 30, 2007 (unaudited)
Assets
Investments in securities, at value (cost $78,454,824) ....... $ 79,981,557
Cash ......................................................... 1,197,179
Foreign cash, at value (cost $124,212) ....................... 120,104
Receivable for capital stock sold ............................ 1,992,681
Interest receivable .......................................... 1,026,593
Unrealized appreciation of forward currency
exchange contracts ........................................ 192,926
Receivable for variation margin on futures contracts ......... 28,590
------------
Total assets ................................................. 84,539,630
------------
Liabilities
Payable for investment securities purchased .................. 1,031,818
Payable for capital stock redeemed ........................... 750,716
Unrealized depreciation of forward currency
exchange contracts ........................................ 605,790
Dividends payable ............................................ 48,299
Distribution fee payable ..................................... 45,281
Advisory fee payable ......................................... 32,977
Administrative fee payable ................................... 27,361
Transfer Agent fee payable ................................... 5,838
Accrued expenses and other liabilities ....................... 209,130
------------
Total liabilities ............................................ 2,757,210
------------
Net Assets ................................................... $ 81,782,420
============
Composition of Net Assets
Capital stock, at par ........................................ $ 8,939
Additional paid-in capital ................................... 111,204,730
Distributions in excess of net investment income ............. (97,155)
Accumulated net realized loss on investments and
foreign currency transactions ............................. (30,451,703)
Net unrealized appreciation of investments and
foreign currency denominated assets and
liabilities ............................................... 1,117,609
------------
$ 81,782,420
============
Net Asset Value Per Share--21 billion shares of capital stock authorized, $.001
par value
Shares Net Asset
Class Net Assets Outstanding Value
- --------------------------------------------------------------------------------
A $31,403,341 3,432,858 $9.15*
- --------------------------------------------------------------------------------
B $33,462,379 3,657,244 $9.15
- --------------------------------------------------------------------------------
C $12,809,958 1,399,876 $9.15
- --------------------------------------------------------------------------------
Advisor $ 3,894,697 426,027 $9.14
- --------------------------------------------------------------------------------
R $ 23,757 2,602 $9.13
- --------------------------------------------------------------------------------
K $ 177,968 19,498 $9.13
- --------------------------------------------------------------------------------
I $ 10,320 1,130 $9.13
- --------------------------------------------------------------------------------
* The maximum offering price per share for Class A shares was $9.56 which
reflects a sales charge of 4.25%.
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 21
Statement of Operations
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2007 (unaudited)
Investment Income
Interest .............................................. $1,938,069
Expenses
Advisory fee .......................................... 195,408
Distribution fee -- Class A ........................... 40,654
Distribution fee -- Class B ........................... 183,597
Distribution fee -- Class C ........................... 55,270
Distribution fee -- Class R ........................... 53
Distribution fee -- Class K ........................... 191
Transfer agency -- Class A ............................ 19,373
Transfer agency -- Class B ............................ 34,305
Transfer agency -- Class C ............................ 8,816
Transfer agency -- Advisor Class ...................... 2,258
Transfer agency -- Class R ............................ 17
Transfer agency -- Class K ............................ 151
Transfer agency -- Class I ............................ 2
Custodian ............................................. 85,892
Registration fees ..................................... 50,525
Administrative ........................................ 47,928
Audit ................................................. 41,305
Printing .............................................. 24,180
Legal ................................................. 23,358
Directors' fees ....................................... 15,407
Miscellaneous ......................................... 2,993
---------
Total expenses ........................................ 831,683
Less: expense offset arrangement (see Note B) ......... (3,236)
---------
Net expenses .......................................... 828,447
----------
Net investment income ................................. 1,109,622
----------
Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions ............................ 3,958,594
Futures contracts .................................. (50,332)
Swap contracts ..................................... 3,930
Foreign currency transactions ...................... (76,080)
Net change in unrealized
appreciation/depreciation of:
Investments ........................................ 783,037
Futures contracts .................................. 44,971
Swap contracts ..................................... (4,553)
Foreign currency denominated assets and
liabilities ..................................... (7,067)
----------
Net gain on investments and foreign currency
transactions ....................................... 4,652,500
----------
Net Increase in Net Assets from Operations ............ $5,762,122
==========
See notes to financial statements.
- --------------------------------------------------------------------------------
22 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
April 30, 2007 October 31,
(unaudited) 2006
---------------- -------------
Increase (Decrease) in Net Assets from
Operations
Net investment income ....................... $ 1,109,622 $ 3,018,419
Net realized gain on investments and
foreign currency transactions ............ 3,836,112 5,802,862
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities ....... 816,388 (4,353,662)
----------- --------------
Net increase in net assets from operations .. 5,762,122 4,467,619
Dividends and Distributions to
Shareholders from:
Net investment income
Class A .................................. (448,584) (932,443)
Class B .................................. (469,245) (1,577,682)
Class C .................................. (142,725) (361,764)
Advisor Class ............................ (56,316) (87,749)
Class R .................................. (325) (384)
Class K .................................. (2,556) (1,411)
Class I .................................. (186) (410)
Net realized gains on investments and
foreign currency transactions
Class A .................................. -0- (610,401)
Class B .................................. -0- (1,423,101)
Class C .................................. -0- (291,305)
Advisor Class ............................ -0- (40,818)
Class R .................................. -0- (251)
Class K .................................. -0- (250)
Class I .................................. -0- (249)
Capital Stock Transactions
Net decrease ................................ (2,048,744) (16,829,166)
----------- ------------
Total increase (decrease) ................... 2,593,441 (17,689,765)
----------- ------------
Net Assets
Beginning of period ......................... 79,188,979 96,878,744
----------- ------------
End of period (including distributions in
excess of net investment income of
($97,155) and ($86,840), respectively) ... $81,782,420 $ 79,188,979
=========== ============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 23
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
April 30, 2007 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Global Strategic Income Trust, Inc. (the "Fund"), was
incorporated in the State of Maryland on October 25, 1995 as a diversified,
open-end management investment company. The Fund offers Class A, Class B, Class
C, Notes to Financial Statements Advisor Class, Class R, Class K and Class I
shares. Class A shares are sold with a front-end sales charge of up to 4.25% for
purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or
more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 4% to zero depending on the
period of time the shares are held. Class B shares will automatically convert to
Class A shares eight years after the end of the calendar month of purchase.
Class C shares are subject to a contingent deferred sales charge of 1% on
redemptions made within the first year after purchase. Class R and Class K
shares are sold without an initial or contingent deferred sales charge. Advisor
Class and Class I shares are sold without an initial or contingent deferred
sales charge and are not subject to ongoing distribution expenses. All seven
classes of shares have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except that 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
- --------------------------------------------------------------------------------
24 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
has been no sale on that day, such securities will be valued at the closing bid
prices on that day; open futures contracts and options thereon are valued using
the closing settlement price or, in the absence of such a price, the most recent
quoted bid price. If there are no quotations available for the day of valuation,
the last available closing settlement price is used; securities traded in the
over-the-counter market, ("OTC") are valued at the mean of the current bid and
asked Notes to Financial Statements 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 "Adviser") may establish procedures whereby changes
in market yields or spreads are used to adjust, on a daily basis, a recently
obtained quoted price on a security; and OTC and other derivatives are valued on
the basis of a quoted bid price or spread from a major broker/dealer in such
security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not limited
to, information obtained by contacting the issuer, analysts, analysis of the
issuer's financial statements or other available documents. In addition, the
Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward 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,
currency gains or losses realized between the trade and settlement dates on
foreign investment transactions, and the difference between the amounts of
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 25
Notes to Financial Statements
- --------------------------------------------------------------------------------
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net unrealized
currency gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of
unrealized appreciation and depreciation of investments and foreign currency
denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned or
repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund amortizes premiums and
accretes discounts as adjustments to interest income.
5. Class Allocations
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the net assets of such class, except for class specific
expenses which are allocated to the respective class. Realized and unrealized
gains and losses are allocated among various share classes based on their
respective net assets.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
U.S. generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require such
reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .50% of the first $2.5 billion, .45% of the
next $2.5 billion and .40% in excess of $5 billion, of the Fund's average
- --------------------------------------------------------------------------------
26 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
daily net assets. Prior to September 7, 2004, the Fund paid the Adviser an
advisory fee at an annual rate of .75% of the Fund's average daily net assets.
The fee is accrued daily and paid monthly. The Adviser has agreed to waive its
fees and bear certain expenses to the extent necessary to limit total operating
expenses on an annual basis 1.90%, 2.60%, 2.60%, 1.60%, 2.10%, 1.85% and 1.60%
of the daily average net assets for the Class A, Class B, Class C, Advisor
Class, Class R, Class K and Class I shares, respectively. For the six months
ended April 30, 2007, there were no fees waived by the Adviser.
Pursuant to the advisory agreement, the Fund may reimburse the Adviser for
certain legal and accounting services provided to the Fund by the Adviser. For
the six months ended April 30, 2007, such fees amounted to $47,928.
The Fund compensates AllianceBernstein Investor Services, Inc. ("ABIS"), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. ABIS may make payments to intermediaries that provide omnibus account
services, sub-accounting services and/or networking services. The compensation
retained by ABIS amounted to $18,564 for the six months ended April 30, 2007.
For the six months ended April 30, 2007, the Fund's expenses were reduced by
$3,236 under an expense offset arrangement with ABIS.
AllianceBernstein Investments, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, serves as the distributor of the Fund's shares. The
Distributor has advised the Fund that it has retained front-end sales charges of
$4,194 from the sale of Class A shares and received $357, $9,659 and $61 in
contingent deferred sales charges imposed upon redemption by shareholders of
Class A, Class B and Class C shares, respectively, for the six months ended
April 30, 2007.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays distribution and servicing fees to the Distributor at an
annual rate of up to .30% of the average daily net assets attributable to the
Class A shares, 1% of the average daily net assets attributable to the Class B
and Class C shares, .50% of the Fund's average daily net assets attributable to
Class R shares and .25% of the Fund's average daily net assets attributable to
Class K shares. There are no distribution and servicing fees on the Class I and
Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement
provides that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities. The Distributor has incurred
expenses in
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 27
Notes to Financial Statements
- --------------------------------------------------------------------------------
excess of the distribution costs reimbursed by the Fund in the amounts of
$8,633,502, $1,635,472, $3,016 and $11,652 for Class B, Class C, Class R and
Class K shares, respectively. Such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs, incurred by the Distributor, beyond the current fiscal period for Class A
shares. The Agreement also provides that the Adviser may use its own resources
to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended April 30, 2007, were as follows:
Purchases Sales
----------- -----------
Investment securities (excluding
U.S. government securities) ..... $50,695,423 $42,178,327
U.S. government securities ......... 11,111,469 9,464,180
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross unrealized
appreciation and unrealized depreciation (excluding foreign currency contracts
and futures contracts) are as follows:
Gross unrealized appreciation ..................... $1,932,842
Gross unrealized depreciation ..................... (406,109)
----------
Net unrealized appreciation ....................... $1,526,733
==========
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments and the imperfect correlation between movements in the
price of the future contracts and movements in the price of the securities
hedged or used for cover.
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin with the broker, as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in the value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized gains or
losses. Risks may arise from the potential inability of a counterparty to meet
the terms of the contract. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the time it was closed.
- --------------------------------------------------------------------------------
28 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. Forward Currency Exchange Contracts
The Fund may enter into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings, to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
currency exchange contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss arising
from the difference between the original contract and the closing of such
contract would be included in net realized gain or loss on foreign currency
transactions.
Fluctuations in the value of open forward currency exchange contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward currency
exchange contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
3. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the
premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commis-
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 29
Notes to Financial Statements
- --------------------------------------------------------------------------------
sions, is also treated as a realized gain, or if the premium received is less
than the amount paid for the closing purchase transaction, as a realized loss.
If a call option is exercised, the premium received is added to the proceeds
from the sale of the underlying security or currency in determining whether the
Fund has realized a gain or loss. If a put option is exercised, the premium
received reduces the cost basis of the security or currency purchased by the
Fund. In writing an option, the Fund bears the market risk of an unfavorable
change in the price of the security or currency underlying the written option.
Exercise of an option written by the Fund could result in the Fund's selling or
buying a security or currency at a price different from the current market
value. For the six months ended April 30, 2007, the Fund had no transactions in
written options.
4. Swap Agreements
The Fund may enter into swaps to hedge its exposure to foreign currency interest
rates and credit risk or for investment purposes. A swap is an agreement that
obligates two parties to exchange a series of cash flows at specified intervals
based upon or calculated by reference to changes in specified prices or rates
for a specified amount of an underlying asset. The payment flows are usually
netted against each other, with the difference being paid by one party to the
other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by the
failure of a counterparty is generally limited to the net interim payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may arise
from unanticipated movements in interest rates or in the value of the underlying
securities or currencies.
As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Fund accrues for the interim payments on
swap contracts on a daily basis, with the net amount recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities. Once the interim payments are settled in cash, the net amount is
recorded as realized gain/loss on swaps, in addition to realized gain/loss
recorded upon the termination of swaps contracts on the statements of
operations. Prior to November 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
pro-
- --------------------------------------------------------------------------------
30 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
vides upon the occurrence of a credit event, as defined in the swap agreement,
for the Fund to buy/(sell) from/(to) the counterparty at the notional amount
(the "Notional Amount") and receive/(deliver) the principal amount of the
referenced obligation. If a credit event occurs, the maximum payout amount for a
Sale Contract is limited to the Notional Amount of the swap contract ("Maximum
Payout Amount"). During the term of the swap agreement, the Fund receives/(pays)
fixed payments from/(to) the respective counterparty, calculated at the agreed
upon interest rate applied to the Notional Amount. These interim payments are
recorded within unrealized appreciation/depreciation of swap contracts on the
statement of assets and liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is a
buyer and no credit event occurs, it will lose its investment. In addition, if
the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the Fund coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Fund.
At April 30, 2007, the Fund had no Sale Contracts outstanding.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty from which it has purchased
credit protection, which may reduce its obligation to make payments on Sale
Contracts, if a credit event occurs. The Fund had no Buy Contracts outstanding
as of April 30, 2007.
5. Dollar Rolls
The Fund may enter into dollar rolls. Dollar rolls involve sales by the Fund of
securities for delivery in the current month and the Fund's simultaneously
contracting to repurchase substantially similar (same type and coupon)
securities on a specified future date. During the roll period, the Fund forgoes
principal and interest paid on the securities. The Fund is compensated by the
difference between the current sales price and the lower forward price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. Dollar rolls involve the risk
that the market value of the securities the Fund is obligated to repurchase
under the agreement may decline below the repurchase price. Dollar rolls are
speculative techniques and may be considered to be borrowings by the Fund. For
the six months ended April 30, 2007, the Fund earned income of $331 from dollar
roll transactions.
6. Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 31
Notes to Financial Statements
- --------------------------------------------------------------------------------
with the custodian containing liquid assets having at least equal to the
repurchase price.
For the six months ended April 30, 2007, the Fund had no transactions in reverse
repurchase agreements.
NOTE E
Capital Stock
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
shares for each class were as follows:
- --------------------------------------------------------------------------------
------------------------------ -------------------------------
Shares Amount
------------------------------ -------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 2007 October 31, April 30, 2007 October 31,
(unaudited) 2006 (unaudited) 2006
----------------------------------------------------------------
Class A
Shares sold 623,935 696,820 $ 5,619,632 $ 5,993,245
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and distributions 36,601 130,309 327,083 1,122,142
- ------------------------------------------------------------------------------------------------------
Shares converted from Class B 214,886 465,429 1,924,294 4,002,270
- ------------------------------------------------------------------------------------------------------
Shares redeemed (381,508) (1,139,925) (3,399,246) (9,813,690)
- ------------------------------------------------------------------------------------------------------
Net increase 493,914 152,633 $ 4,471,763 $ 1,303,967
======================================================================================================
Class B
Shares sold 109,793 546,877 $ 982,420 $ 4,698,801
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and distributions 33,645 231,207 300,018 1,990,903
- ------------------------------------------------------------------------------------------------------
Shares converted to Class A (214,886) (465,381) (1,924,294) (4,002,270)
- ------------------------------------------------------------------------------------------------------
Shares redeemed (924,679) (2,496,464) (8,244,505) (21,524,182)
- ------------------------------------------------------------------------------------------------------
Net decrease (996,127) (2,183,761) $(8,886,361) $(18,836,748)
======================================================================================================
Class C
Shares sold 289,827 323,484 $ 2,624,823 $ 2,783,250
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends and distributions 8,851 45,395 79,012 390,876
- ------------------------------------------------------------------------------------------------------
Shares redeemed (178,522) (409,063) (1,590,274) (3,520,597)
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) 120,156 (40,184) $ 1,113,561 $ (346,471)
======================================================================================================
32 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
------------------------------ ------------------------------
Shares Amount
------------------------------ ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 2007 October 31, April 30, 2007 October 31,
(unaudited) 2006 (unaudited) 2006
---------------------------------------------------------------
Advisor Class
Shares sold 169,487 134,901 $1,508,685 $1,156,809
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends and distributions 5,880 13,698 52,645 117,797
- ------------------------------------------------------------------------------------------------------
Shares redeemed (38,658) (42,464) (340,358) (364,555)
- ------------------------------------------------------------------------------------------------------
Net increase 136,709 106,135 $1,220,972 $ 910,051
======================================================================================================
Class R
Shares sold 436 1,161 $ 3,931 $ 9,974
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends and distributions 19 3 171 23
- ------------------------------------------------------------------------------------------------------
Shares redeemed (158) -0- (1,398) (3)
- ------------------------------------------------------------------------------------------------------
Net increase 297 1,164 $ 2,704 $ 9,994
======================================================================================================
Class K
Shares sold 7,350 15,110 $ 66,733 $ 129,119
- ------------------------------------------------------------------------------------------------------
Shares issued in reinvestment of
dividends and distributions 267 107 2,380 922
- ------------------------------------------------------------------------------------------------------
Shares redeemed (4,474) -0- (40,496) -0-
- ------------------------------------------------------------------------------------------------------
Net increase 3,143 15,217 $ 28,617 $ 130,041
======================================================================================================
Class I
Shares sold -0- -0- $ -0- $ -0-
- ------------------------------------------------------------------------------------------------------
Shares redeemed -0- -0- -0- -0-
- ------------------------------------------------------------------------------------------------------
Net increase -0- -0- $ -0- $ -0-
======================================================================================================
- --------------------------------------------------------------------------------
NOTE F
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest rates
may cause the value of the Fund's investments to decline. Credit risk is the
risk that the issuer or guarantor of a debt security, or the counterparty to a
derivative contract, will be unable or unwilling to make timely principal and/or
interest payments, or to otherwise honor its obligations. The degree of risk for
a particular security may be reflected in its credit risk rating. Credit risk is
greater for medium quality and lower-rated securities. Lower-rated debt
securities and similar unrated securities
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 33
Notes to Financial Statements
- --------------------------------------------------------------------------------
(commonly known as "junk bonds") have speculative elements or are predominantly
speculative risks.
Concentration of Risk--Investing in securities of foreign companies or foreign
governments involves special risks which include changes in foreign 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 G
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 million revolving credit facility (the "Facility")
intended to provide for short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended April 30, 2007.
NOTE H
Distributions to Shareholders
The tax character of distributions to be paid for the fiscal year ending October
31, 2007 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended October 31, 2006
and October 31, 2005 were as follows:
2006 2005
---------- ----------
Distributions paid from:
Ordinary income ................................... $5,328,218 $4,758,474
---------- ----------
Total taxable distributions .......................... 5,328,218 4,758,474
---------- ----------
Total distributions paid ............................. $5,328,218 $4,758,474
========== ==========
- --------------------------------------------------------------------------------
34 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
As of October 31, 2006, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses ........................ $(34,746,525)(a)
Unrealized appreciation/(depreciation) ...................... 727,682(b)
------------
Total accumulated earnings/(deficit) ........................ $(34,018,843)(c)
============
(a) On October 31, 2006 the Fund had a net capital loss carryforward of
$34,321,565 of which $10,500,394 expires in the year 2009 and $23,821,171
expires in the year 2010. To the extent future capital gains are offset by
capital loss carryforwards, such gains will not be distributed. During the
fiscal year, the Fund utilized capital loss carryforwards of $5,032,947.
For the year ended October 31, 2006, the cumulative deferred loss on
straddles was $424,960.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax
treatment of swap income, the realization for tax purposes of gains/losses
on certain derivative instruments, and the difference between book and tax
amortization methods for premium.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/ (deficit) is attributable primarily to dividends payable.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the 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 on (i) their aliquot share of losses
suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such
market timing;
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 35
Notes to Financial Statements
- --------------------------------------------------------------------------------
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until
December 31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG
Order contemplate that the Adviser's registered investment company
clients, including the Fund, will introduce governance and
compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of the
Adviser's Board, 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.
- --------------------------------------------------------------------------------
36 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
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. 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
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 37
Notes to Financial Statements
- --------------------------------------------------------------------------------
the NYAG Order. On January 25, 2006, the Adviser and Alliance Holding moved to
vacate the Summary Order. In early September 2006, the court denied this motion,
and the Supreme Court of Appeals in West Virginia denied the defendants'
petition for appeal. On September 22, 2006, the Adviser and Alliance Holding
filed an answer and moved to dismiss the Summary Order with Notes to Financial
Statements the West Virginia 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'
- --------------------------------------------------------------------------------
38 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Notes to Financial Statements
- --------------------------------------------------------------------------------
claim under Section 36(b) of the Investment Company Act. On January 11, 2006,
the District Court granted defendants' motion for reconsideration and dismissed
the remaining Section 36(b) claim. On May 31, 2006 the District Court denied
plaintiffs' motion for leave to file an amended complaint. On July 5, 2006,
plaintiffs filed a notice of appeal, which was subsequently withdrawn subject to
plaintiffs' 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 J
Recent Accounting Pronouncements
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.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 39
Financial Highlights
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
-------------------------------------------------------------------------
Class A
-------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2007 --------------------------------------------------------
(unaudited) 2006 2005 2004(a) 2003 2002(b)
--------------------------------------------------------------------------
Net asset value, beginning of period .. $ 8.62 $ 8.70 $ 8.63 $ 8.65 $ 7.75 $ 8.43
--------------------------------------------------------------------------
Income From Investment Operations
Net investment income(c) .............. .14 .34 .39 .48(d) .55 .63
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions .............. .54 .14 .09 .02 .93 (.67)
--------------------------------------------------------------------------
Net increase (decrease) in net
asset value from operations ........ .68 .48 .48 .50 1.48 (.04)
--------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net investment income .. (.15) (.34) (.41) (.52) (.29) (.52)
Distributions from net realized
gains on investment and foreign
currency transactions .............. -0- (.22) -0- -0- -0- -0-
Tax return of capital ................. -0- -0- -0- -0- (.29) (.12)
--------------------------------------------------------------------------
Total dividends and distributions ..... (.15) (.56) (.41) (.52) (.58) (.64)
--------------------------------------------------------------------------
Net asset value, end of period ........ $ 9.15 $ 8.62 $ 8.70 $ 8.63 $ 8.65 $ 7.75
==========================================================================
Total Return
Total investment return based on
net asset value(e) ................. 7.89% 5.61% 5.67% 5.89% 19.57% (.50)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ........................... $31,403 $25,348 $24,250 $29,465 $37,043 $38,631
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements ........... 1.68%(f) 1.78%(g) 1.54% 1.43% 1.60% 1.53%
Expenses, before
waivers/reimbursements ........... 1.68%(f) 1.78%(g) 1.54% 1.60% 1.60% 1.53%
Expenses, before waivers/
reimbursements excluding
interest expense ................. 1.68%(f) 1.72%(g) 1.54% 1.60% 1.60% 1.53%
Net investment income .............. 3.28%(f) 3.93%(g) 4.65% 5.83%(d) 6.50% 7.71%
Portfolio turnover rate ............... 69% 169% 98% 106% 155% 268%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
40 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2007 --------------------------------------------------------------
(unaudited) 2006 2005 2004(a) 2003 2002(b)
----------------------------------------------------------------------------
Net asset value,
beginning of period ................ $ 8.63 $ 8.70 $ 8.63 $ 8.65 $ 7.74 $ 8.42
----------------------------------------------------------------------------
Income From Investment Operations
Net investment income(c) .............. .11 .28 .32 .41(d) .48 .57
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions .............. .52 .14 .10 .02 .95 (.67)
----------------------------------------------------------------------------
Net increase (decrease) in
net asset value from operations .... .63 .42 .42 .43 1.43 (.10)
----------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment
income ............................. (.11) (.27) (.35) (.45) (.27) (.47)
Distributions from net realized
gains on investment and
foreign currency transactions ...... -0- (.22) -0- -0- -0- -0-
Tax return of capital ................. -0- -0- -0- -0- (.25) (.11)
----------------------------------------------------------------------------
Total dividends and distributions ..... (.11) (.49) (.35) (.45) (.52) (.58)
----------------------------------------------------------------------------
Net asset value, end of period ........ $ 9.15 $ 8.63 $ 8.70 $ 8.63 $ 8.65 $ 7.74
============================================================================
Total Return
Total investment return based
on net asset value(e) .............. 7.37% 4.96% 4.92% 5.13% 18.89% (1.23)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ........................... $33,462 $40,136 $59,513 $84,385 $115,414 $117,529
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements .......... 2.43%(f) 2.50%(g) 2.25% 2.15% 2.31% 2.24%
Expenses, before
waivers/reimbursements .......... 2.43%(f) 2.50%(g) 2.25% 2.32% 2.31% 2.24%
Expenses, before waivers/
reimbursements excluding
interest expense ................ 2.43%(f) 2.45%(g) 2.25% 2.32% 2.31% 2.24%
Net investment income .............. 2.53%(f) 3.24%(g) 3.94% 5.12%(d) 5.83% 7.02%
Portfolio turnover rate ............... 69% 169% 98% 106% 155% 268%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 41
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2007 ------------------------------------------------------
(unaudited) 2006 2005 2004(a) 2003 2002(b)
----------------------------------------------------------------------
Net asset value, beginning of period .................... $ 8.63 $ 8.71 $ 8.64 $ 8.65 $ 7.75 $ 8.43
----------------------------------------------------------------------
Income From Investment Operations
Net investment income(c) ................................ .11 .28 .33 .40(d) .50 .57
Net realized and unrealized gain (loss) on investment
and foreign currency transactions .................... .52 .14 .09 .04 .92 (.67)
----------------------------------------------------------------------
Net increase (decrease) in net asset value from
operations ........................................... .63 .42 .42 .44 1.42 (.10)
----------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income .................... (.11) (.28) (.35) (.45) (.28) (.47)
Distributions from net realized gains on investment
and foreign currency transactions .................... -0- (.22) -0- -0- -0- -0-
Tax return of capital ................................... -0- -0- -0- -0- (.24) (.11)
----------------------------------------------------------------------
Total dividends and distributions ....................... (.11) (.50) (.35) (.45) (.52) (.58)
----------------------------------------------------------------------
Net asset value, end of period .......................... $ 9.15 $ 8.63 $ 8.71 $ 8.64 $ 8.65 $ 7.75
======================================================================
Total Return
Total investment return based on net asset value(e) ..... 7.39% 4.86% 4.93% 5.25% 18.74% (1.22)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ............... $12,810 $11,040 $11,492 $14,094 $21,175 $20,113
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .............. 2.40%(f) 2.49%(g) 2.25% 2.14% 2.30% 2.23%
Expenses, before waivers/reimbursements .............. 2.40%(f) 2.49%(g) 2.25% 2.31% 2.30% 2.23%
Expenses, before waivers/ reimbursements excluding
interest expense .................................. 2.40%(f) 2.44%(g) 2.25% 2.31% 2.30% 2.23%
Net investment income ................................ 2.56%(f) 3.22%(g) 3.94% 5.14%(d) 5.81% 7.00%
Portfolio turnover rate ................................. 69% 169% 98% 106% 155% 268%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
42 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------
Advisor Class
----------------------------------------------------------------------
Six Months
Ended
April 30, Year Ended October 31,
2007 ------------------------------------------------------
(unaudited) 2006 2005 2004(a) 2003 2002(b)
----------------------------------------------------------------------
Net asset value, beginning of period .................... $ 8.62 $ 8.70 $ 8.63 $8.65 $ 7.74 $ 8.43
----------------------------------------------------------------------
Income From Investment Operations
Net investment income(c) ................................ .16 .36 .47 .47(d) .57 .65
Net realized and unrealized gain (loss) on investment
and foreign currency transactions .................... .52 .14 .04 .05 .95 (.67)
----------------------------------------------------------------------
Net increase (decrease) in net asset value from
operations ........................................... .68 .50 .51 .52 1.52 (.02)
----------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income .................... (.16) (.36) (.44) (.54) (.34) (.54)
Distributions from net realized gains on investment
and foreign currency transactions .................... -0- (.22) -0- -0- -0- -0-
Tax return of capital ................................... -0- -0- -0- -0- (.27) (.13)
----------------------------------------------------------------------
Total dividends and distributions ....................... (.16) (.58) (.44) (.54) (.61) (.67)
----------------------------------------------------------------------
Net asset value, end of period .......................... $ 9.14 $ 8.62 $ 8.70 $8.63 $ 8.65 $ 7.74
======================================================================
Total Return
Total investment return based on net asset value(e) ..... 7.94% 5.94% 6.01% 6.21% 20.10% (.31)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ............... $3,895 $2,494 $1,594 $ 900 $1,483 $1,358
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .............. 1.38%(f) 1.49%(g) 1.26% 1.13% 1.30% 1.24%
Expenses, before waivers/reimbursements .............. 1.38%(f) 1.49%(g) 1.26% 1.30% 1.30% 1.24%
Expenses, before waivers/ reimbursements excluding
interest expense ................................... 1.38%(f) 1.44%(g) 1.26% 1.30% 1.30% 1.24%
Net investment income ................................ 3.59%(f) 4.17%(g) 4.93% 6.15%(d) 6.84% 8.08%
Portfolio turnover rate ................................. 69% 169% 98% 106% 155% 268%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 43
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------------
Class R
---------------------------------------------------
Six Months
Ended Year March 1,
April 30, Ended 2005(h) to
2007 October 31, October 31,
(unaudited) 2006 2005
---------------------------------------------------
Net asset value, beginning of period ...................................... $8.61 $8.69 $8.85
---------------------------------------------------
Income From Investment Operations
Net investment income(c) .................................................. .13 .31 .25
Net realized and unrealized gain (loss) on investment and
foreign currency investment transactions ............................... .53 .14 (.15)
---------------------------------------------------
Net increase in net asset value from operations ........................... .66 .45 .10
---------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ...................................... (.14) (.31) (.26)
Distributions from net realized gains on investment and foreign
currency transactions .................................................. -0- (.22) -0-
---------------------------------------------------
Total dividends and distributions ......................................... (.14) (.53) (.26)
---------------------------------------------------
Net asset value, end of period ............................................ $9.13 $8.61 $8.69
===================================================
Total Return
Total investment return based on net asset value(e) ....................... 7.70% 5.32% 1.17%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ................................. $ 24 $ 20 $ 10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements ................................ 1.90%(f) 2.03%(g) 1.94%(f)
Expenses, before waivers/reimbursements ................................ 1.90%(f) 2.03%(g) 1.94%(f)
Expenses, before waivers/reimbursements excluding interest expense ..... 1.90%(f) 1.98%(g) 1.94%(f)
Net investment income .................................................. 3.08%(f) 3.64%(g) 4.25%(f)
Portfolio turnover rate ................................................... 69% 169% 98%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
44 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
--------------------------------------------------
Class K
---------------------------------------------------
Six Months
Ended Year March 1,
April 30, Ended 2005(h) to
2007 October 31, October 31,
(unaudited) 2006 2005
---------------------------------------------------
Net asset value, beginning of period ...................................... $8.61 $8.69 $8.85
---------------------------------------------------
Income From Investment Operations
Net investment income(c) .................................................. .14 .29 .27
Net realized and unrealized gain (loss) on investment and
foreign currency investment transactions ............................... .53 .19 (.15)
---------------------------------------------------
Net increase in net asset value from operations ........................... .67 .48 .12
---------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ...................................... (.15) (.34) (.28)
Distributions from net realized gains on investment and
foreign currency transactions .......................................... -0- (.22) -0-
---------------------------------------------------
Total dividends and distributions ......................................... (.15) (.56) (.28)
---------------------------------------------------
Net asset value, end of period ............................................ $9.13 $8.61 $8.69
===================================================
Total Return
Total investment return based on net asset value(e) ....................... 7.80% 5.61% 1.36%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ................................. $ 178 $ 141 $ 10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements ................................ 1.69%(f) 1.80%(g) 1.63%(f)
Expenses, before waivers/reimbursements ................................ 1.69%(f) 1.80%(g) 1.63%(f)
Expenses, before waivers/reimbursements excluding interest expense ..... 1.69%(f) 1.75%(g) 1.63%(f)
Net investment income .................................................. 3.29%(f) 3.63%(g) 4.55%(f)
Portfolio turnover rate ................................................... 69% 169% 98%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 45
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------------
Class I
---------------------------------------------------
Six Months
Ended Year March 1,
April 30, Ended 2005(h) to
2007 October 31, October 31,
(unaudited) 2006 2005
---------------------------------------------------
Net asset value, beginning of period ...................................... $8.61 $8.69 $8.85
---------------------------------------------------
Income From Investment Operations
Net investment income(c) .................................................. .16 .37 .29
Net realized and unrealized gain (loss) on investment and
foreign currency investment transactions ............................... .53 .14 (.15)
---------------------------------------------------
Net increase in net asset value from operations ........................... .69 .51 .14
---------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income ...................................... (.17) (.37) (.30)
Distributions from net realized gains on investment and foreign currency
transactions ........................................................... -0- (.22) -0-
---------------------------------------------------
Total dividends and distributions ......................................... (.17) (.59) (.30)
---------------------------------------------------
Net asset value, end of period ............................................ $9.13 $8.61 $8.69
===================================================
Total Return
Total investment return based on net asset value(e) ....................... 8.03% 5.95% 1.58%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ................................. $ 10 $ 10 $ 10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements ................................ 1.27%(f) 1.46%(g) 1.30%(f)
Expenses, before waivers/reimbursements ................................ 1.27%(f) 1.46%(g) 1.30%(f)
Expenses, before waivers/reimbursements excluding interest expense ..... 1.27%(f) 1.41%(g) 1.30%(f)
Net investment income .................................................. 3.71%(f) 4.25%(g) 4.88%(f)
Portfolio turnover rate ................................................... 69% 169% 98%
See footnote summary on page 47.
- --------------------------------------------------------------------------------
46 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Financial Highlights
- --------------------------------------------------------------------------------
(a) As of November 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. These interim payments are reflected
within net realized and unrealized gain (loss) on swap contracts, however,
prior to November 1, 2003, these interim payments were reflected within
interest income/expense on the statement of operations. The effect of this
change for the year ended October 31, 2004, was to decrease net investment
income per share by $0.001 for Class A, B, C, and Advisor Class and
increase net realized and unrealized gain (loss) on investment
transactions per share by $0.001 for Class A, B, C, and Advisor Class.
Consequently, the ratios of net investment income to average net assets
were decreased by 0.20% for Class A, B, C and Advisor Class, respectively.
(b) As required, effective November 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year
ended October 31, 2002 was to decrease net investment income per share by
$.03, decrease net realized and unrealized loss on investments per share
by $.03 for Class A, B, C and Advisor Class, respectively, and decrease
the ratio of net investment income to average net assets from 8.03% to
7.71% for Class A, from 7.34% to 7.02% for Class B, from 7.32% to 7.00%
for Class C and from 8.40% to 8.08% for Advisor Class. Per share, ratios
and supplemental data for periods prior to November 1, 2001 have not been
restated to reflect this change in presentation.
(c) Based on average shares outstanding.
(d) Net of waivers/reimbursement by the Adviser.
(e) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or
contingent deferred sales charge is not reflected in the calculation of
the total investment return. Total investment return does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares. Total investment return calculated for a
period of less than one year is not annualized.
(f) Annualized.
(g) The ratio includes expenses attributable to costs of proxy solicitation.
(h) Commencement of distributions.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 47
Board of Directors
- --------------------------------------------------------------------------------
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(1)
Earl D. Weiner(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon, Vice President
Gershon Distenfeld, Vice President
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Matthew S. Sheridan, Vice President
Emilie D. Wrapp, Secretary
Joseph J. Mantineo, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Principal Underwriter
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
Custodian
Brown Brothers Harriman & Company
40 Water Street
Boston, MA 02109
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Transfer Agent
AllianceBernstein
Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-free (800) 221-5672
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee, Governance and Nominating Committee and
Independent Directors Committee.
(2) The management of and investment decisions for the Fund's portfolio are
made by the Global Fixed Income Investment Team and the Global Credit
Investment Team. Mr.Douglas J. Peebles, Mr. Paul J. DeNoon, Mr. Gershon
Distenfeld, Mr. Michael L. Mon and Mr. Matthew S. Sheridan are the
investment professionals with the most significant responsibility for the
day-to-day management of the Fund's portfolio.
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48 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
Information Regarding the Review and Approval of the Fund's Advisory Agreement
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser at a
meeting held on October 31-November 2, 2006.
In preparation for the meeting, the directors had requested from the Adviser and
received and evaluated extensive materials, including performance and expense
information for other investment companies with similar investment objectives as
the Fund derived from data compiled by Lipper Inc. ("Lipper"), which is not
affiliated with the Adviser. The directors also reviewed an independent
evaluation from the Fund's Senior Officer (who is also the Fund's Independent
Compliance Officer) of the reasonableness of the advisory fees in the Fund's
Advisory Agreement (as contemplated by the September 2004 Assurance of
Discontinuance between the Adviser and the New York Attorney General) wherein
the Senior Officer concluded that such fees were reasonable. In addition, the
directors received a presentation from the Adviser and had an opportunity to ask
representatives of the Adviser various questions relevant to the proposed
approval. The directors noted that the Senior Officer's evaluation considered
the following factors: management fees charged to institutional and other
clients of the Adviser for like services; management fees charged by other
mutual fund companies for like services; cost to the Adviser and its affiliates
of supplying services pursuant to the Advisory Agreement, excluding any
intra-corporate profit; profit margins of the Adviser and its affiliates from
supplying such services; possible economies of scale as the Fund grows larger;
and nature and quality of the Adviser's services including the performance of
the Fund.
Prior to voting, the directors reviewed the proposed continuance of the Advisory
Agreement with management and with experienced counsel who are independent of
the Adviser and received a memorandum from such counsel discussing the legal
standards for their consideration of the proposed continuance. The directors
also discussed the proposed continuance in three private sessions at which only
the directors, their independent counsel and the Fund's Independent Compliance
Officer were present. In reaching their determinations relating to continuance
of the Advisory Agreement, the directors considered all factors they believed
relevant, including the following:
1. information comparing the performance of the Fund to other
investment companies with similar investment objectives and to an
index;
2. the nature, extent and quality of investment, compliance,
administrative and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of the
Fund and all investment companies in the AllianceBernstein Funds
complex;
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 49
4. the costs borne by, and profitability of, the Adviser and its
affiliates in providing services to the Fund and to all investment
companies in the AllianceBernstein Funds complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the
extent the Fund grows and whether fee levels reflect any economies
of scale for the benefit of investors;
7. the Adviser's policies and practices regarding allocation of
portfolio transactions of the Fund;
8. information about "revenue sharing" arrangements that the Adviser
has entered into in respect of the Fund;
9. portfolio turnover rates for the Fund compared to other investment
companies with similar investment objectives;
10. fall-out benefits that the Adviser and its affiliates receive from
their relationships with the Fund;
11. information about fees charged by the Adviser to other clients with
a substantially similar investment style as the Fund;
12. the Senior Officer's evaluation of the reasonableness of the fee
payable to the Adviser in the Advisory Agreement;
13. the professional experience and qualifications of the Fund's
portfolio management team and other senior personnel of the Adviser;
and
14. the terms of the Advisory Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the registered investment companies advised by
the Adviser, their overall confidence in the Adviser's integrity and competence
they have gained from that experience and the Adviser's responsiveness to
concerns raised by them in the past, including the Adviser's willingness to
consider and implement organizational and operational changes designed to
improve investment results and the services provided to the AllianceBernstein
Funds.
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and different directors may
have attributed different weights to the various factors. The directors
determined that the overall
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50 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
arrangements between the Fund and the Adviser, as provided in the Advisory
Agreement, were fair and reasonable in light of the services performed, expenses
incurred and such other matters as the directors considered relevant in the
exercise of their business judgment.
The material factors and conclusions that formed the basis for the directors
reaching their determinations to approve the continuance of the Advisory
Agreement (including their determinations that the Adviser should continue to be
the investment adviser for the Fund, and that the fees payable to the Adviser
pursuant to the Advisory Agreement are appropriate) were separately discussed by
the directors.
Nature, Extent and Quality of Services Provided by the Adviser
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the oversight of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund, including
making purchases and sales of portfolio securities consistent with the Fund's
investment objective and policies. Under the Advisory Agreement, the Adviser
also provides the Fund with such office space, administrative and other services
(exclusive of, and in addition to, any such services provided by any others
retained by the Fund) and executive and other personnel as are necessary for the
Fund's operations. The Adviser pays all of the compensation of directors of the
Fund who are affiliated persons of the Adviser and of the officers of the Fund.
The directors also considered that the Advisory Agreement provides that the Fund
will reimburse the Adviser for the cost of certain clerical, accounting,
administrative and other services provided at the Fund's request by employees of
the Adviser or its affiliates. Requests for these "at no more than cost"
reimbursements are approved by the directors on a quarterly basis and (to the
extent requested and paid) result in a higher rate of total compensation from
the Fund to the Adviser than the fee rates stated in the Advisory Agreement.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided by advisers of funds had expanded over time as a result of regulatory
and other developments. The directors noted, for example, that the Adviser is
responsible for maintaining and monitoring its own and, to varying degrees, the
Fund's compliance programs, and that these compliance programs have recently
been refined and enhanced. The directors considered the quality of the in-house
investment research capabilities of the Adviser and the other resources it has
dedicated to performing services for the Fund. The quality of administrative and
other services, including the Adviser's role in coordinating the activities of
the Fund's other service providers, also were considered. The directors also
considered the Adviser's response to recent regulatory compliance issues
affecting a number of the investment companies in the AllianceBernstein Funds
complex.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 51
The directors concluded that, overall, they were satisfied with the nature,
extent and quality of services provided to the Fund under the Advisory
Agreement.
Costs of Services Provided and Profitability to the Adviser
The directors reviewed a schedule of the revenues and expenses indicating the
profitability of the Fund to the Adviser for calendar years 2004 and 2005 that
had been prepared with an updated expense allocation methodology arrived at in
consultation with an independent consultant. The directors noted that the
updated expense allocation methodology differed in various respects from the
methodology used in prior years. The directors reviewed the assumptions and
methods of allocation used by the Adviser in preparing fund-specific
profitability data, and noted the Adviser's representation to them that it
believed that the methods of allocation used in preparing the profitability
information were reasonable and appropriate and that the Adviser had previously
discussed with the directors that there is no generally accepted allocation
methodology for information of this type.
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability information,
the directors considered the effect of fall-out benefits on the Adviser's
expenses, as well as the "revenue sharing" arrangements the Adviser has entered
into with certain entities that distribute shares of the Fund. The directors
focused on the profitability of the Adviser's relationship with the Fund before
taxes and distribution expenses. The directors recognized that the Adviser
should generally be entitled to earn a reasonable level of profits for the
services it provides to the Fund and, based on their review, concluded that they
were satisfied that the Adviser's level of profitability from its relationship
with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Adviser benefits from soft dollar arrangements
whereby it receives brokerage and research services from many of the brokers and
dealers that execute purchases and sales of securities on behalf of its clients
on an agency basis. The directors noted that since the Fund does not engage in
brokerage transactions, the Adviser does not receive soft dollar benefits in
respect of portfolio transactions of the Fund.
The directors also considered that the Distributor, which is a wholly-owned
subsidiary of the Adviser, receives 12b-1 fees from the Fund in respect of
classes of shares of the Fund that are subject to the Fund's 12b-1 plan and
retains a portion of such 12b-1 fees, and receives all or a portion of the sales
charges on sales or redemptions of certain classes of shares. The directors also
noted that certain affiliates of the Adviser distribute shares of the Fund and
receive compensation in
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52 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
that connection, and that a subsidiary of the Adviser provides transfer agency
services to the Fund and receives compensation from the Fund for such services.
The directors recognized that the Adviser's profitability would be somewhat
lower if the Adviser's affiliates did not receive the benefits described above.
The directors understood that the Adviser also might derive reputational and
other benefits from its association with the Fund.
Investment Results
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed a report prepared by Lipper showing performance of the Class
A Shares of the Fund as compared to a group of 10 to 6 funds (depending on the
year) in its Lipper category selected by Lipper (the "Performance Group") and as
compared to a universe of 30 to 17 funds (depending on the year) in its Lipper
category selected by Lipper (the "Performance Universe") for periods ended June
30, 2006 over the 1-, 3-, 5- and 10-year periods. The directors also reviewed
information prepared by the Adviser showing performance of the Class A Shares of
the Fund as compared to the Lehman Brothers Global Aggregate Bond Index (USD
hedged) (the "Index") for periods ended June 30, 2006 over the year to date, 1-,
3-, 5- and 10-year and since inception periods (January 1996 inception). The
directors noted that in the Performance Group and Performance Universe
comparisons the Fund was in the 1st quintile in the 1-year period, 4th quintile
in the 3-year period, 5th quintile in the 5-year period and 2nd quintile in the
10-year period. The comparative information showed that the Fund outperformed
the Index in all periods reviewed. Based on their review, the directors
concluded that the Fund's relative performance over time was satisfactory.
Advisory Fees and Other Expenses
The directors considered the advisory fee rate paid by the Fund to the Adviser
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund at a common asset level. The directors
recognized that it is difficult to make comparisons of advisory fees because
there are variations in the services that are included in the fees paid by other
funds.
The directors also considered the fees the Adviser charges other clients with
investment objectives similar to those of the Fund. For this purpose, they
reviewed information in the Adviser's Form ADV and a chart prepared by the
Adviser disclosing the institutional fee schedule for institutional products
managed by it that have a substantially similar investment style as the Fund.
The directors noted that the institutional fee schedule for clients with a
substantially similar investment style as the Fund had breakpoints at much lower
asset levels than those in the fee schedule applicable to the Fund and that the
application of the institutional fee schedule to the level of assets of the Fund
would result in a fee rate that would be significantly lower than that in the
Fund's Advisory
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 53
Agreement. The directors noted that the Adviser may, in some cases, negotiate
fee rates with large institutional clients that are lower than those reviewed by
the directors and that they had previously discussed with the Adviser its
policies in respect of such negotiated arrangements.
The Adviser reviewed with the directors the significant differences in the scope
of services it provides to institutional clients and to the Fund. For example,
the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to provide
required certifications). The Adviser also coordinates the provision of
services to the Fund by non-affiliated service providers and is responsible for
the compensation of the Fund's Independent Compliance Officer and certain
related expenses. The provision of these non-advisory services involves costs
and exposure to liability. The Adviser explained that many of these services
normally are not provided to non-investment company clients and that fees
charged to the Fund reflect the costs and risks of the additional obligations.
The Adviser also noted that since the Fund is constantly issuing and redeeming
its shares, it is more difficult to manage than an institutional account, where
the assets are relatively stable. In light of these facts, the directors did not
place significant weight on these fee comparisons.
The directors also considered the total expense ratio of the Class A shares of
the Fund in comparison to the fees and expenses of funds within two comparison
groups created by Lipper: an Expense Group and an Expense Universe. Lipper
described an Expense Group as a representative sample of comparable funds and an
Expense Universe as a broader group, consisting of all funds in the Fund's
investment classification/ objective with a similar load type as the Fund. The
Class A expense ratio of the Fund was based on the Fund's latest fiscal year
expense ratio. The directors recognized that the expense ratio information for
the Fund potentially reflected on the Adviser's provision of services, as the
Adviser is responsible for coordinating services provided to the Fund by others.
The directors noted that it was likely that the expense ratios of some funds in
the Fund's Lipper category also were lowered by waivers or reimbursements by
those funds' investment advisers, which in some cases were voluntary and perhaps
temporary.
The directors noted that the Fund's at approximate current size contractual
effective fee rate of 50 basis points was materially lower than the Expense
Group median. The directors noted that the latest fiscal year administrative
expense reimbursement by the Fund pursuant to the Advisory Agreement was 8 basis
points and that the Adviser's total compensation from the Fund pursuant to the
Advisory Agreement was slightly lower than the Expense Group median. The
directors also noted that the Fund's total expense ratio, which had been capped
by the Adviser (although the expense ratio was currently materially lower than
the cap), was significantly higher than the Expense Group and Expense Universe
- --------------------------------------------------------------------------------
54 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
medians.The directors noted that the Fund's expense ratio was adversely impacted
by its relatively small size (net assets of less than $85 million as of June 30,
2006) and that the Adviser had recently reviewed with them steps being taken
that are intended to reduce the expenses of the AllianceBernstein Funds. The
directors concluded that the Fund's expense ratio was acceptable.
Economies of Scale
The directors noted that the advisory fee schedule for the Fund contains
breakpoints so that, if assets were to increase over the breakpoint levels, the
fee rates would be reduced on the incremental assets. The directors also
considered a presentation by an independent consultant discussing economies of
scale issues in the mutual fund industry. The directors believe that economies
of scale are realized (if at all) by the Adviser across a variety of products
and services, and not only in respect of a single fund. The directors noted that
there is no uniform methodology for establishing breakpoints that give effect to
fund-specific services provided by the Adviser and to the economies of scale
that the Adviser may realize in its overall mutual fund business or those
components of it which directly or indirectly affect the Fund's operations. The
directors observed that in the mutual fund industry as a whole, as well as among
funds similar to the Fund, there is no uniformity or pattern in the fees and
asset levels at which breakpoints (if any) apply. Depending on the age and size
of a particular fund and its adviser's cost structure, different conclusions can
be drawn as to whether there are economies of scale to be realized at any
particular level of assets, notwithstanding the intuitive conclusion that such
economies exist, or will be realized at some level of total assets. Moreover,
because different advisers have different cost structures and service models, it
is difficult to draw meaningful conclusions from the comparison of a fund's
advisory fee breakpoints with those of comparable funds. The directors also
noted that the advisory agreements for many funds do not have breakpoints at
all. Having taken these factors into account, the directors concluded that the
Fund's breakpoint arrangements would result in a sharing of economies of scale
in the event of a very significant increase in the Fund's net assets.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 55
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 the
AllianceBernstein Global Strategic Income Trust, Inc. (the "Fund").(2) The
evaluation of the Investment Advisory Agreement was 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"). 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. Advisory fees charged to institutional and other clients of the
Adviser for like services;
2. Advisory 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.
FUND ADVISORY FEES, EXPENSE CAPS, REIMBURSEMENTS & RATIOS
The Adviser proposed that the Fund pay the advisory fee set forth in the table
below for receiving the services to be provided pursuant to the Investment
Advisory Agreement. The fee schedule below, implemented in January 2004 in
1 It should be noted that the information in the fee summary was completed
on October 23, 2006 and presented to the Board of Directors on October
31-November 2, 2006.
2 Future references to the Fund do not include "AllianceBernstein."
References in the fee summary pertaining to performance and expense ratios
refer to the Class A shares of the Fund.
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56 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
consideration of the Adviser's settlement with the NYAG in December 2003 is
based on a master schedule that contemplates eight categories of funds with
almost all funds in each category having the same advisory schedule.(3)
Advisory Fee Based Net Assets
on % of Average 09/30/06
Category Daily Net Assets ($MIL) Fund
- --------------------------------------------------------------------------
High Income 50 bp on 1st $2.5 billion $81.4 Global Strategic
45 bp on next $2.5 billion Income Trust, Inc.
40 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. During the Fund's most recently completed fiscal year, the Adviser
received $93,000 (0.08% of the Fund's average daily net assets) for such
services.
The Adviser agreed to waive that portion of its advisory fees and/or reimburse
the Fund for that portion of the Fund's total operating expenses to the degree
necessary to limit the Fund's expense ratios to the amounts set forth below for
the Fund's current fiscal year, although it should be noted that the Fund was
operating below its expense cap for the most recent semi-annual period.
Accordingly, the Fund's expense limitation was of no effect. The waiver is
terminable by the Adviser at the end of the Fund's fiscal year upon at least 60
days written notice. In addition, set forth below are the Fund's gross expense
ratios as of the Fund's most recent semi-annual period:
Expense Cap Pursuant to Gross Fiscal
Expense Limitation Expense Year
Fund Undertaking Ratio(4) End
- --------------------------------------------------------------------------
Global Strategic Income Advisor 1.60% 1.51% October 31
Trust, Inc. Class A 1.90% 1.79%
Class B 2.60% 2.52%
Class C 2.60% 2.51%
Class R 2.10% 2.10%
Class K 1.85% 1.79%
Class I 1.60% 1.46%
I. ADVISORY FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The advisory 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
3 Most of the AllianceBernstein Mutual Funds, which the Adviser manages,
were affected by the Adviser's settlement with the NYAG.
4 Annualized.
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ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 57
Fund that are not provided to non-investment company clients include providing
office space and personnel to serve as Fund Officers, who among other
responsibilities make the certifications required under the Sarbanes-Oxley Act
of 2002, and coordinating with and monitoring the Fund's third party service
providers such as Fund counsel, auditors, custodians, transfer agents and
pricing services. The accounting, administrative, legal and compliance
requirements for the Fund are more costly than those for institutional assets
due to the greater complexities and time required for investment companies,
although as previously noted, a portion of these expenses are reimbursed by the
Fund to the Adviser. Also, retail mutual funds managed by the Adviser are widely
held. Servicing the Fund's investors is more time consuming and labor intensive
compared to institutional clients since the Adviser needs to communicate with a
more extensive network of financial intermediaries and shareholders. In
addition, managing the cash flow of an investment company may be more difficult
than that of a stable pool of assets, such as an institutional account with
little cash movement in either direction, particularly, if a 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.(5) In addition to the AllianceBernstein
Institutional fee schedule, set forth below is what would have been the
effective advisory fee of the Fund had
5 The Adviser has indicated that with respect to institutional accounts with
assets greater than $300 million, it will negotiate a fee schedule,
although it should be noted that there were no such institutional accounts
that are similar in investment style as the Fund, which opened in the last
three years. Discounts that are negotiated vary based upon each client
relationship.
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58 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
the AllianceBernstein Institutional fee schedule been applicable to the Fund
versus the Fund's advisory fees based on September 30, 2006 net assets.
Net Assets AllianceBernstein ("AB") Effective Fund
09/30/06 Institutional ("Inst.") AB Inst. Advisory
Fund ($MIL) Fee Schedule Adv. Fee Fee
- --------------------------------------------------------------------------------
Global Strategic $81.4 Global Plus Fixed Income 0.348% 0.500%
Income Trust, Inc. Schedule
50 bp on 1st $20 million
35 bp on next $20 million
30 bp on next $20 million
25 bp on the balance
Minimum Account Size: $20 m
The adviser also manages the AllianceBernstein Variable Products Series Fund,
Inc. ("AVPS"), which is available through variable annuity and variable life
contracts offered by other financial institutions and offers policyholders the
option to utilize certain AVPS portfolios as the investment option underlying
their insurance contracts. Set forth below is the fee schedule of the AVPS
portfolio that has a somewhat similar investment style as the Fund:(6)
Fund AVPS Portfolio Fee Schedule
- ----------------------------------------------------------------------------------------
Global Strategic Income Trust, Inc. Global Bond Portfolio 0.50% on first $2.5 billion
0.40% on next $2.5 billion
0.35% on the balance
The Adviser also manages and sponsors retail mutual funds, which are organized
in jurisdictions outside the United States, generally Luxembourg and Japan, and
sold to non-United States resident investors. The Adviser charges the following
fee for Global Bond, a Luxembourg fund, which has a somewhat similar investment
style as the Fund:
Fund Fee(7)
- --------------------------------------------------------------------------------
Global Strategic Income / Global Bond
Class A 1.10%
Class I (Institutional) 0.55%
The Alliance Capital Investment Trust Management mutual funds ("ACITM"), which
are offered to investors in Japan, have an "all-in" fee to compensate the
Adviser for investment advisory as well as fund accounting and administrative
6 It should be noted that AVPS was affected by the settlement between the
Adviser and the NYAG.
7 Class A shares of the fund are charged an "all-in" fee, which covers
investment advisory services and distribution related services.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 59
related services. The fee schedules of the ACITM mutual funds that have a
somewhat similar investment style as the Fund are as follows:
Fund ACITM Mutual Fund Fee
- -------------------------------------------------------------------------------------------
Global Strategic Income Trust,Inc. Global Income Fund 0.75%
Global High Income 0.70% on first (Y)30 billion(8)
A / B 0.60% on next (Y)20 billion
0.50% on next (Y)450 billion
0.45% thereafter
Global Bond Fund 0.54%
The Adviser represented that it does not sub-advise any registered investment
company that has a similar investment strategy as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.
Lipper, Inc. ("Lipper"), an analytical service that is not affiliated with the
Adviser, compared the fees charged to the Fund with fees charged to other
investment companies for similar services by other investment advisers. Lipper's
analysis included the Fund's ranking with respect to the proposed advisory fee
relative to the median of the Fund's Lipper Expense Group ("EG")(9) at the
approximate current asset level of the Fund.(10)
Lipper describes an EG as a representative sample of comparable funds. Lipper's
standard methodology for screening funds to be included in an EG entails the
consideration of several fund criteria, including fund type, investment
classification/objective, load type and similar 12b-1/non-12b-1 service fees,
asset (size)
8 The current Japanese Yen - U.S. dollar currency exchange rate is (Y)118.15
per $1. At that currency exchange rate, (Y)30 billion would be equivalent
to approximately $254 million. (Y)20 billion would be equivalent to
approximately $169 million. (Y)450 billion would be equivalent to
approximately $3.808 billion.
9 It should be noted that Lipper does not consider average account size when
constructing EGs. Funds with relatively small average account sizes tend
to have higher transfer agent expense ratio than comparable sized funds
that have relatively large average account sizes. Note that there are
limitations on Lipper expense category data because different funds
categorize expenses differently.
10 The contractual 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.
- --------------------------------------------------------------------------------
60 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
comparability, and expense components and attributes. An EG will typically
consist of seven to twenty funds.
Contractual Lipper
Management Expense Group
Fund Fee(11) Median Rank
- --------------------------------------------------------------------------------
Global Strategic Income Trust, Inc. 0.500 0.590 2/10
Lipper also compared the Fund's most recently completed fiscal year total
expense ratio to the medians of the Fund's EG and Lipper Expense Universe
("EU"). The EU1(2) is a broader group compared to the EG, consisting of all
funds that have the same investment classification/objective and load type as
the subject Fund.
Lipper Lipper
Expense Expense Expense
Ratio Group Universe
Fund (%)(13) Median (%) Rank Median (%) Rank
- -------------------------------------------------------------------------------
Global Strategic Income
Trust, Inc. 1.546 1.183 10/10 1.100 25/25
Based on this analysis, the Fund has a more favorable ranking on a management
fee basis than it does on a total expense ratio basis.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE ADVISORY 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.
11 The contractual management fee does not reflect any expense reimbursements
made by the Fund to the Adviser for certain clerical, legal, accounting,
administrative, and other services. In addition, the contractual
management fee does not reflect any management fee waivers for expense
caps that would effectively reduce the actual contractual management fee.
12 Except for asset (size) comparability, Lipper uses the same criteria for
selecting an EG when selecting an EU. Unlike the EG, the EU allows for the
same adviser to be represented by more than just one fund.
13 Most recently completed fiscal year Class A share total expense ratio.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 61
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 and the consultant. The
Adviser's profitability from providing investment advisory services to the Fund
decreased 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 such benefits 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 provided the affiliates' charges and
services are competitive. These affiliates provide transfer agent and
distribution related services to the Fund and receive transfer agent fees, Rule
12b-1 payments, front-end sales loads and contingent deferred sales charges
("CDSC").
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.(14) During the Fund's most recently completed fiscal year, ABI
received from the Fund $3,061, $933,507 and $82,060 in front-end sales charges,
Rule 12b-1 and CDSC fees, respectively.
Fees and reimbursements for out of pocket expenses charged by AllianceBernstein
Investor Services, Inc. ("ABIS"), the affiliated transfer agent for the Fund,
are charged on a per account basis, based on the level of service provided 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
14 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.
- --------------------------------------------------------------------------------
62 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
omnibus basis. ABIS' after-tax profitability increased in 2005 in comparison to
2004. During the Fund's most recently completed fiscal year, ABIS received
$74,566 in fees from the Fund.(15)
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedules being
proposed reflect a sharing of economies of scale to the extent they exist. 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, retained by the Senior Officer, made a presentation
to the Board of Directors 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, economists, who have written on this subject, had to infer facts
about the costs from the behavior of fund expenses; there was a lack of
consensus among economists as to whether economies of scale were being passed on
to the shareholders. In the meantime, it is clear that to the extent a fund's
assets were to exceed the 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 approximately $659 billion as of September 30,
2006, the Adviser has the investment experience to manage and provide
non-investment services (described in Section I) to the Fund.
15 The fees disclosed are net of any expense offsets with ABIS. An expense
offset is created by the interest earned on the positive cash balance that
occur 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 the transfer agent's account to the Fund's
account. During the Fund's most recently completed fiscal year, the fees
paid by the Fund to ABIS were reduced by $736 under the offset agreement
between the Portfolio and ABIS.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 63
The information below shows the 1, 3, 5, 10 year performance returns and
rankings of the Fund(16) relative to the Fund's Lipper Performance Group ("PG")
and Lipper Performance Universe ("PU")(17) for the periods ended June 30,
2006.(18)
Fund Return PG Median PU Median PG Rank PU Rank
1 year 3.70 1.76 1.91 1/10 3/30
3 year 5.12 5.34 6.02 6/8 20/26
5 year 6.44 7.35 7.87 8/8 23/25
10 year 7.11 6.37 6.44 2/6 6/17
Set forth below are the 1, 3, and 5 year and since inception performance returns
of the Fund (in bold) versus its benchmark:(19)
Periods Ending June 30, 2006
Annualized Performance
- --------------------------------------------------------------------------------
1 3 5 10 Since
Funds Year Year Year Year Inception
- --------------------------------------------------------------------------------
Global Strategic Income Trust, Inc. 3.70 5.12 6.44 7.11 7.50
Lehman Brothers Global Aggregate
Bond Index (USD hedged) -0.07 2.71 4.69 6.41 6.13
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that the
proposed advisory 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: December 1, 2006
16 The performance returns and rankings are for the Class A shares of the
Fund. It should be noted that the performance returns of the Fund that is
shown was provided by the Adviser. Lipper maintains its own database that
includes the Fund's performance returns. However, differences in the
distribution price (ex-date versus payable date) and rounding differences
may cause the Adviser's own performance returns of the Fund to be
different from Lipper. To maintain consistency in this evaluation, the
performance returns of the Fund, as reported by the Adviser, are provided
instead of Lipper.
17 The Fund's PG is identical to the Fund's EG. The Fund's PU is not
identical to the Fund's EU. In addition to outliers, funds with negative
management fees are excluded from EUs but not necessarily from PUs.
18 Note that the current Lipper investment classification/objective dictates
the PG and PU throughout the life of the Fund even if a Fund may have had
a different investment classification/objective at different points in
time.
19 The Adviser provided fund and benchmark performance return information for
periods through June 30, 2006.
- --------------------------------------------------------------------------------
64 o ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
AllianceBernstein Family of Funds
- --------------------------------------------------------------------------------
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*
AllianceBernstein National Municipal Income Fund*
ACM Managed Dollar Income Fund
ACM Managed Income Fund
California Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
- --------------------------------------------------------------------------------
Retirement Strategies Funds
- --------------------------------------------------------------------------------
2000 Retirement Strategy 2015 Retirement Strategy 2030 Retirement Strategy
2005 Retirement Strategy 2020 Retirement Strategy 2035 Retirement Strategy
2010 Retirement Strategy 2025 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 Global High Income Fund was
named Alliance World Dollar Government Fund II and AllianceBernstein
Income Fund was named ACM Income Fund. Prior to March 1, 2007, Global Real
Estate Investment Fund was named Real Estate Investment Fund. Prior to May
18, 2007, AllianceBernstein National Municipal Income Fund was named
National Municipal Income Fund.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing
in the Fund.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST o 65
ALLIANCEBERNSTEIN GLOBAL STRATEGIC INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800)221-5672
[LOGO]
ALLIANCE BERNSTEIN
Investments
GSIT-0152-0407
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Global Strategic Income Trust, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: June 29, 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: June 29, 2007
By: /s/ Joseph J. Mantineo
----------------------
Joseph J. Mantineo
Treasurer and Chief Financial Officer
Date: June 29, 2007