-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RVzJ8/IWEQdbQpCRhOkCRabvMU8T8QRMfm1zOAYW8SVY/fAah5yaBM4i6FkomnYi cih5pyu9Ond3HN85jEBKKA== 0001193125-09-046850.txt : 20090306 0001193125-09-046850.hdr.sgml : 20090306 20090306092651 ACCESSION NUMBER: 0001193125-09-046850 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090306 DATE AS OF CHANGE: 20090306 EFFECTIVENESS DATE: 20090306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND INC CENTRAL INDEX KEY: 0000920701 IRS NUMBER: 000000000 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08426 FILM NUMBER: 09660690 BUSINESS ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129691000 MAIL ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCEBERNSTEIN WORLDWIDE PRIVATIZATION FUND INC DATE OF NAME CHANGE: 20030319 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCE WORLDWIDE PRIVATIZATION FUND INC DATE OF NAME CHANGE: 19940322 0000920701 S000010094 ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND INC C000027972 Class A AWPAX C000027973 Class B AWPBX C000027974 Class C AWPCX C000027975 Advisor Class AWPYX C000027976 Class R AWPRX C000027977 Class K AWPKX C000027978 Class I AWPIX N-CSRS 1 dncsrs.htm ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND AllianceBernstein International Growth Fund

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM N-CSR

 


 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-08426

 


 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND, INC.

(Exact name of registrant as specified in charter)

 


 

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

 


 

Joseph J. Mantineo

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: June 30, 2009

 

Date of reporting period: December 31, 2008

 



ITEM 1.   REPORTS TO STOCKHOLDERS.

 

2


SEMI-ANNUAL REPORT

 

 

AllianceBernstein International Growth Fund

 

 

LOGO

 

December 31, 2008

 

Semi-Annual Report


 

 

Investment Products Offered

   

Are Not FDIC Insured

   

May Lose Value

   

Are Not Bank Guaranteed

The investment return and principal value of an investment in the Fund will fluctuate as the prices of the individual securities in which it invests fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund’s prospectus, which contains this and other information, visit our web site at www.alliancebernstein.com or call your financial advisor or AllianceBernstein® at (800) 227-4618. Please read the prospectus carefully before you invest.

You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AllianceBernstein’s web site at www.alliancebernstein.com, or go to the Securities and Exchange Commission’s (the “Commission”) web site at www.sec.gov, or call AllianceBernstein at (800) 227-4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s web site at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. AllianceBernstein publishes full portfolio holdings for the Fund monthly at www.alliancebernstein.com.

AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P., the manager of the AllianceBernstein funds, and is a member of FINRA.

AllianceBernstein® and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P.


February 24, 2009

 

Semi-Annual Report

This report provides management’s discussion of fund performance for AllianceBernstein International Growth Fund (the “Fund”) for the semi-annual reporting period ended December 31, 2008. On May 8, 2008, the Boards of Directors (the “Boards”) of the Fund and AllianceBernstein International Research Growth Fund (“International Research Growth”) approved a proposal for the Fund to acquire International Research Growth. In connection with the acquisition, on July 25, 2008, all of International Research Growth’s assets and liabilities were transferred to the Fund, and stockholders of International Research Growth received shares of the Fund in exchange for their shares of the corresponding class of International Research Growth. The acquisition did not require approval of the Fund’s stockholders or International Research Growth’s stockholders. As a result of the acquisition, International Research Growth’s stockholders are expected to benefit from lower expenses while enjoying the uninterrupted service of the same investment research and substantially the same portfolio management team and the same core strategy. The acquisition did not impact the Fund’s overall expenses.

Investment Objective and Policies

This open-end Fund’s investment objective is long-term growth of capital. The Fund invests primarily in an international portfolio of equity securities of companies within various market sectors selected by

AllianceBernstein L.P. (the “Adviser”) for their growth potential. Research-driven stock selection is expected to be the primary driver of returns relative to the Fund’s benchmark, the Morgan Stanley Capital International (MSCI) All Country (AC) World (ex-US) Index (net and gross), and other decisions, such as country allocation, are generally the result of the stock selection process. Examples of the types of market sectors in which the Fund may invest include, but are not limited to, telecommunications, information technology, health care, financial services, infrastructure, energy and natural resources, and consumer growth. Within each sector, senior sector analyst-managers apply a research driven, bottom-up stock selection process using the Adviser’s proprietary research to identify attractive companies.

The Adviser relies heavily upon the fundamental and quantitative analysis of its large internal research staff. The Adviser looks for companies whose prospective earnings growth is not fully reflected in current market valuations.

The Adviser places research emphasis on identifying companies whose prospective earnings growth potential appears likely to outpace market expectations. In consultation with the senior sector analysts, the Adviser’s International Growth Portfolio Oversight Group (the “Group”) is responsible for the construction of the portfolio. The senior sector analysts and the Group allocate the Fund’s investments among the selected market sectors based on the fundamental

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     1


 

company research conducted by the Adviser’s large internal research staff, assessing the current and forecasted investment opportunities and conditions, as well as diversification and risk considerations. Given the emphasis on bottom-up stock selection, the senior sector analysts and the Group may vary the percentage allocation to each sector and may, on occasion, change the market sectors in which the Fund invests as companies’ potential for growth within a sector matures and new trends for growth emerge.

The Fund invests, under normal circumstances, in the equity securities of companies located in at least three countries (and normally substantially more) other than the United States. The Fund invests in securities of companies in both developed and emerging market countries. Geographic distribution of the Fund’s investments among countries or regions also will be a product of the stock selection process rather than a pre-determined allocation. The Fund may also invest in synthetic foreign equity securities. The Adviser expects that normally the Fund’s portfolio will tend to emphasize investments in larger capitalization companies, although the Fund may invest in smaller or medium capitalization companies. The Fund normally invests in approximately 100-130 companies.

Investment Results

The table on page 7 provides the performance results for the Fund and its benchmarks. Also included are returns for the MSCI World (ex-US) Index

(net) for the six-and 12-month periods ended December 31, 2008.

The Fund’s Class A shares without sales charges underperformed the benchmarks for both the six- and 12-month periods ended December 31, 2008. This underperformance was due almost entirely to stock selection. Sector positioning, a by-product of stock selection, added to overall performance. For the six-month period under review, an overweight and stock selection within materials were the largest detractors. The Fund’s overweight in health care and consumer staples sectors, which performed relatively well, helped performance.

For the 12-month period ended December 31, 2008, the Fund’s performance was offset by an underweight in utilities versus the benchmarks, which performed well, and an overweight in materials, which performed poorly. The Fund was underweight in financials versus the benchmarks, and, as financials performed poorly, this added to overall performance. It was also overweight versus the benchmarks in the more defensive health care and consumer staples sectors, which performed relatively well, and this helped performance.

For both periods, from a country perspective, being overweight in the United Kingdom and Switzerland helped, as these markets did relatively better, but being overweight in Russia and Greece detracted, as these markets fared less well. Stock selection in the United Kingdom, Switzerland and Australia was poor, and this dominated overall performance.

 

2     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

Market Review and Investment Strategy

Equity markets plummeted in 2008. Financial markets experienced negative returns as it became clear that the turmoil created by a collapsing US housing market would spread and impact financial stocks first, and the global economy second.

The first six months of the annual period ended December 31, 2008, were dominated by concerns about financial market contagion. As the extent of the credit woes became more apparent, and as the environment deteriorated, investors began to shun risky assets in favor of safety, certainty and security. The wholesale flight to safety intensified during the fourth quarter of 2008, as evidence mounted that the global economy was entering a severe downturn. The yield on Treasury bills also fell, and remained near zero, showing that investors were willing to forego a return on their investment in exchange for security. Government bond yields also hit near record lows. Yield spreads on investment-grade corporate bonds shot to peaks not seen since the Great Depression, and the MSCI World (ex-US) Index (net) extended its losses to -43.56% for 2008—in US dollars—the worst annual return since its inception in 1970.

The Group expected the global economy to slow in 2008, but underestimated the severity and the speed of the economic decline and the further financial turmoil this generated. The Group has significantly cut its forecasts for global growth and expects the

Euro area, Japan and UK economies to contract in 2009. It also expects financial markets to remain volatile for some time.

Equities are selling at dramatic discounts to historic norms. In November 2008, the MSCI AC World Index (which includes both developed and developing markets) fell back to its level of March 1997, although the world today produces more than twice as much economic output and corporate earnings as it did then. Therefore, valuations appear far more attractive now.

A key component driving down valuations—aside from fears of an economic depression—is forced selling by leveraged investors such as hedge funds and banks. Many are de-leveraging to reduce risk, meet margin calls or fund redemptions. And it is not just leveraged investors who are being forced to liquidate positions into a market flooded with sell orders. US mutual funds suffered net outflows of $126 billion in October alone.

In short, economies and financial markets are stuck in a vicious cycle. Fears of an economic depression are accelerating the de-leveraging in financial markets. As a result, credit is tightening, and consumers, corporations and municipal governments are spending less, which slows the economy down further.

The Group believes that the policy response to mitigate the downturn being experienced is both unprecedented and extraordinary and

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     3


 

will eventually work. There has been aggressive global monetary easing, led by the US Federal Reserve. Fiscal stimulus plans in most major and minor economies are in the process of being implemented. Governments have guaranteed both bank deposits and liabilities and have demonstrated that they will do all that is necessary to restore confidence in the financial system. In addition, oil prices have collapsed from their peak of $145 a barrel on July 10 to just under $50 a barrel at the end of December 2008, translating into billions (in USD) saved in annualized global spending.

In sum, while investors face the most challenging environment in decades, the building blocks of an eventual recovery may be falling into place. As tempting as it may be for investors to stay on the sidelines until a recovery is clearly underway, history suggests that would be a mistake. The Fund has been adjusted, so as to increase exposure to stable growth companies that have strong balance sheets and reliable revenue streams that can help them weather the current crisis. The Group has balanced this with exposure to companies that it believes are likely to be early beneficiaries of a recovery.

 

Although the market upheaval has been painful to equity investors generally and to the Fund in particular, the Group believes that the Fund is positioned to do well in the rebound the Group expects. While a year like 2008 creates powerful temptations to react to real and perceived emergencies by tossing aside time-tested investment strategies and principles, the Group firmly believes that staying true to its research and discipline is never more critical than in a crisis; it is for this reason that the Group has adhered to its process and constructed a portfolio that it believes will benefit from the recovery, when it comes.

The Fund’s overall investment strategy, with a focus on research-driven stock selection, remains intact. During the period under review, the Group continued to place emphasis on companies it believes will exhibit future growth rates that exceed the market’s expectations. The Fund remained well-diversified with strong representation in both developed and emerging markets, and in a wide array of economic sectors.

 

4     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


(Historical Performance continued on next page)

 

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 different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.

Benchmark Disclosure

Neither the unmanaged Morgan Stanley Capital International (MSCI) World (ex-US) Index (net) nor the unmanaged MSCI All Country (AC) World (ex-US) Index (net and gross) reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI AC World (ex-US) Index (net and gross) is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets, excluding the US. The MSCI World (ex-US) Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance in 23 developed market countries, excluding the US. An investor cannot invest directly in an index, and its results are not indicative of the performance for any specific investment, including the Fund.

The MSCI World (ex-US) Index values are calculated using net returns. The MSCI AC World (ex-US) Index values are calculated using net and gross returns. Net returns approximate the minimum possible dividend reinvestment—the dividend reinvested after deduction of withholding tax, applying the rate to non-resident individuals who do not benefit from double taxation treaties. For values calculated using gross returns, the index series approximates the maximum possible dividend reinvestment. The amount reinvested is the dividend distributed to individuals resident in the country of the company, but does not include tax credits.

A Word About Risk

Substantially all of the Fund’s assets will be invested in foreign securities which may magnify fluctuations due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. The Fund may invest in securities of emerging market nations. These investments have additional risks, such as those presented by illiquid or thinly traded markets, company management risk, heightened political instability and currency volatility.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     5

 

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

Accounting standards and market regulations in emerging market nations are not the same as those in the US. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. If a growth stock company should fail to meet these high earnings expectations, the price of these stocks can be severely negatively affected. The Fund can invest in small-cap and mid-cap companies. Investments in mid-cap companies may be more volatile than investments in large-cap companies. Investments in small-cap companies tend to be more volatile than investments in large-cap or mid-cap companies. A fund’s investments in smaller-capitalization stocks may have additional risks because these companies often have limited product lines, markets or financial resources. While the Fund invests principally in common stocks and other equity securities, in order to achieve its investment objectives, the Fund may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. These risks are fully discussed in the Fund’s prospectus.

 

 

 

(Historical Performance continued on next page)

 

6     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

   
THE FUND VS. ITS BENCHMARKS
PERIODS ENDED DECEMBER 31, 2008
  Returns    
  6 Months      12 Months     

AllianceBernstein International Growth Fund

        

Class A

  -45.25%      -49.39%  
 

Class B*

  -45.48%      -49.79%  
 

Class C

  -45.52%      -49.82%  
 

Advisor Class

  -45.22%      -49.29%  
 

Class R

  -45.35%      -49.54%  
 

Class K

  -45.29%      -49.44%  
 

Class I

  -45.15%      -49.20%  
 

MSCI All Country (AC) World (ex-US) Index (net)

  -39.36%      -45.53%  
 

MSCI All Country (AC) World (ex-US) Index (gross)

  -39.26%      -45.24%  
 

MSCI World (ex-US) Index (net)

  -37.45%      -43.56%  
 

*    Effective January 31, 2009, Class B Shares will no longer be available for purchase to new investors. Please see Note L for additional information.

 

†    Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds.

        

 

See Historical Performance and Benchmark Disclosures on pages 5-6.

(Historical Performance continued on next page)

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     7

 

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2008  
     NAV Returns        SEC Returns  
       
Class A Shares        

1 Year

   -49.39 %      -51.54 %

5 Years

   1.93 %      1.05 %

10 Years

   3.62 %      3.17 %
       
Class B Shares        

1 Year

   -49.79 %      -51.77 %

5 Years

   1.17 %      1.17 %

10 Years(a)

   2.99 %      2.99 %
       
Class C Shares        

1 Year

   -49.82 %      -50.31 %

5 Years

   1.18 %      1.18 %

10 Years

   2.85 %      2.85 %
       
Advisor Class Shares        

1 Year

   -49.29 %      -49.29 %

5 Years

   2.22 %      2.22 %

10 Years

   3.93 %      3.93 %
       
Class R Shares        

1 Year

   -49.54 %      -49.54 %

Since Inception*

   -4.48 %      -4.48 %
       
Class K Shares        

1 Year

   -49.44 %      -49.44 %

Since Inception*

   -4.24 %      -4.24 %
       
Class I Shares        

1 Year

   -49.20 %      -49.20 %

Since Inception*

   -3.88 %      -3.88 %

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratios as 1.23%, 1.97%, 1.94%, 0.93%, 1.49%, 1.26% and 0.84% for Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares, respectively. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

 

(a) Assumes conversion of Class B shares into Class A shares after eight years.

 

* Inception date is 3/1/05 for Class R, Class K and Class I shares.

 

These share classes are offered at net asset value (NAV) to eligible investors and their SEC returns are the same as 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 Class R, Class K, and Class I are listed above.

See Historical Performance disclosures on pages 5-6.

(Historical Performance continued on next page)

 

8     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Historical Performance


HISTORICAL PERFORMANCE

(continued from previous page)

 

SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES) AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2008)   
            SEC Returns  
       
Class A Shares        

1 Year

        -51.54 %

5 Years

        1.05 %

10 Years

        3.17 %
       
Class B Shares        

1 Year

        -51.77 %

5 Years

        1.17 %

10 Years(a)

        2.99 %
       
Class C Shares        

1 Year

        -50.31 %

5 Years

        1.18 %

10 Years

        2.85 %
       
Advisor Class Shares        

1 Year

        -49.29 %

5 Years

        2.22 %

10 Years

        3.93 %
       
Class R Shares        

1 Year

        -49.54 %

Since Inception*

        -4.48 %
       
Class K Shares        

1 Year

        -49.44 %

Since Inception*

        -4.24 %
       
Class I Shares        

1 Year

        -49.20 %

Since Inception*

        -3.88 %

 

(a) Assumes conversion of Class B shares into Class A shares after eight years.

 

* Inception date is 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 Class R, Class K, and Class I are listed above.

See Historical Performance disclosures on pages 5-6.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     9

 

Historical Performance


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.

This 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
Account Value
July 1, 2008
   Ending
Account Value
December 31, 2008
   Expenses Paid
During Period*
     Actual    Hypothetical    Actual    Hypothetical**    Actual    Hypothetical
Class A    $ 1,000    $ 1,000    $ 547.50    $ 1,018.55    $ 5.15    $ 6.72
Class B    $ 1,000    $ 1,000    $ 545.15    $ 1,014.72    $ 8.10    $ 10.56
Class C    $   1,000    $   1,000    $   544.79    $   1,014.92    $   7.94    $   10.36
Advisor
Class
   $ 1,000    $ 1,000    $ 547.85    $ 1,020.01    $ 4.02    $ 5.24
Class R    $ 1,000    $ 1,000    $ 546.47    $ 1,017.29    $ 6.12    $ 7.98
Class K    $ 1,000    $ 1,000    $ 547.06    $ 1,018.55    $ 5.15    $ 6.72
Class I    $ 1,000    $ 1,000    $ 548.54    $ 1,020.72    $ 3.47    $ 4.53
* Expenses are equal to the classes’ annualized expense ratios of 1.32%, 2.08%, 2.04%, 1.03%, 1.57%, 1.32% and 0.89%, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

 

** Assumes 5% return before expenses.

 

10     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Fund Expenses


PORTFOLIO SUMMARY

December 31, 2008 (unaudited)

 

PORTFOLIO STATISTICS

Net Assets ($mil): $1,776.6

LOGO

LOGO

 

* All data are as of December 31, 2008. The Fund’s sector and country breakdowns are expressed as a percentage of total investments and may vary over time. “Other” country weightings represent less than 1.4% weightings in the following countries: Canada, Ireland, Netherlands, Norway, Poland, Russia, Singapore, Sweden, Taiwan, Thailand and the United States.

Please note: The sector classifications presented herein are based on the Global Industry Classification Standard (GICS) which was developed by Morgan Stanley Capital International and Standard and Poor’s. The components are divided into sector, industry group, and industry sub-indices as classified by the GICS for each of the market capitalization indices in the Broad Market. These sector classifications are broadly defined. The “Portfolio of Investments” section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund’s prospectus.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     11

 

Portfolio Summary


TEN LARGEST HOLDINGS

December 31, 2008 (unaudited)

 

Company   U.S. $ Value      Percent of
Net Assets
 

Banco Santander Central Hispano SA

  $ 47,905,811      2.7 %

Tesco PLC

    46,757,918      2.6  

Industrial & Commercial Bank of China Ltd. – Class H

    45,774,458      2.6  

BP PLC

    42,211,738      2.4  

British American Tobacco PLC

    35,893,017      2.0  

Roche Holding AG

    35,279,415      2.0  

Novartis AG

    34,742,659      1.9  

Vodafone Group PLC

    33,494,336      1.9  

BG Group PLC

    32,119,272      1.8  

Reckitt Benckiser PLC

    31,566,671      1.8  
  $   385,745,295      21.7 %

 

12     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Ten Largest Holdings


 

PORTFOLIO OF INVESTMENTS

December 31, 2008 (unaudited)

 

Company    Shares   U.S. $ Value
 
    

COMMON STOCKS – 96.4%

    

Financials – 19.8%

    

Capital Markets – 5.7%

    

3i Group PLC(a)

   1,892,422   $ 7,410,996

Credit Suisse Group AG(a)

   249,191     6,983,482

Gottex Fund Management Holdings Ltd.(a)

   635,636     1,628,819

ICAP PLC(a)

   2,584,155     10,908,323

Julius Baer Holding AG(a)

   313,365     12,145,202

Macquarie Group Ltd.(a)

   650,562     13,203,385

Man Group PLC(a)

   6,979,791     24,011,210

Partners Group Holding AG(a)

   357,534     25,589,706
        
       101,881,123
        

Commercial Banks – 12.1%

    

Banco Santander Central Hispano SA(a)

   4,958,830     47,905,811

Industrial & Commercial Bank of China Ltd. – Class H

   86,218,000     45,774,458

Investimentos Itau SA

   8,178,322     28,091,063

National Bank of Greece SA(a)

   516,416     9,590,181

Powszechna Kasa Oszczednosci Bank Polski SA

   1,526,065     18,428,510

Siam Commercial Bank PCL

   12,525,200     17,646,199

Standard Chartered PLC(a)

   2,087,137     26,706,953

United Overseas Bank Ltd.

   2,243,000     20,270,057
        
       214,413,232
        

Diversified Financial Services – 1.1%

    

Deutsche Boerse AG(a)

   129,548     9,252,902

IG Group Holdings PLC(a)

   2,715,182     10,191,137
        
       19,444,039
        

Insurance – 0.9%

    

Prudential PLC(a)

   2,709,951     16,449,891
        
       352,188,285
        

Health Care – 11.8%

    

Biotechnology – 0.7%

    

CSL Ltd./Australia(a)

   496,328     11,704,349
        

Health Care Equipment & Supplies – 0.3%

    

Alcon, Inc.

   65,900     5,877,621
        

Health Care Providers & Services – 1.0%

    

Fresenius Medical Care AG(a)

   372,168     17,198,598
        

Pharmaceuticals – 9.8%

    

AstraZeneca PLC(a)

   567,179     23,203,471

Bayer AG(a)

   246,744     14,327,868

GlaxoSmithKline PLC(a)

   824,659     15,336,784

Novartis AG(a)

   693,723     34,742,659

Roche Holding AG(a)

   227,878     35,279,415

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     13

 

Portfolio of Investments


 

Company        
    
Shares
  U.S. $ Value
 
    

Sanofi-Aventis SA(a)

   361,863   $ 23,145,948

Teva Pharmaceutical Industries Ltd. (Sponsored) (ADR)

   662,895     28,219,440
        
       174,255,585
        
       209,036,153
        

Consumer Staples – 11.1%

    

Beverages – 1.1%

    

Fomento Economico Mexicano SAB de CV Series B (Sponsored) (ADR)

   304,115     9,162,985

Pernod-Ricard SA(a)

   156,466     11,623,550
        
       20,786,535
        

Food & Staples Retailing – 3.4%

    

Seven & I Holdings Co. Ltd.(a)

   387,800     13,329,303

Tesco PLC(a)

   8,979,896     46,757,918
        
       60,087,221
        

Food Products – 2.3%

    

Nestle SA(a)

   654,996     25,936,636

Unilever NV(a)

   635,924     15,413,541
        
       41,350,177
        

Household Products – 1.8%

    

Reckitt Benckiser PLC(a)

   842,431     31,566,671
        

Tobacco – 2.5%

    

British American Tobacco PLC(a)

   1,375,906     35,893,017

Japan Tobacco, Inc.(a)

   2,414     7,995,993
        
       43,889,010
        
       197,679,614
        

Energy – 9.8%

    

Energy Equipment & Services – 1.3%

    

Schlumberger Ltd.

   340,400     14,409,132

WorleyParsons Ltd.(a)

   852,651     8,506,009
        
       22,915,141
        

Oil, Gas & Consumable Fuels – 8.5%

    

BG Group PLC(a)

   2,320,504     32,119,272

BP PLC(a)

   5,468,250     42,211,738

Oil Search Ltd.(a)

   5,029,259     16,468,506

Sasol Ltd.

   781,871     23,778,037

StatoilHydro ASA(a)

   296,358     4,956,527

Total SA(a)

   570,300     31,354,671
        
       150,888,751
        
       173,803,892
        

Telecommunication Services – 9.4%

    

Diversified Telecommunication Services – 4.6%

    

China Unicom Hong Kong Ltd.

   5,212,000     6,337,898

Deutsche Telekom AG – Class W(a)

   959,891     14,485,923

Global Village Telecom Holding SA(b)

   627,000     6,821,179

 

14     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Portfolio of Investments


 

Company        
    
Shares
  U.S. $ Value
 
    

Iliad SA(a)

   200,569   $ 17,412,903

Telefonica SA(a)

   1,342,815     30,309,713

Vimpel-Communications (Sponsored) (ADR)

   840,600     6,018,696
        
       81,386,312
        

Wireless Telecommunication
Services – 4.8%

    

America Movil SAB de CV Series L (ADR)

   472,207     14,633,695

MTN Group Ltd.

   899,205     10,601,758

NTT Docomo, Inc.(a)

   13,753     27,070,249

Vodafone Group PLC(a)

   16,357,503     33,494,336
        
       85,800,038
        
       167,186,350
        

Industrials – 8.1%

    

Aerospace & Defense – 1.4%

    

BAE Systems PLC(a)

   4,440,801     24,167,600
        

Commercial Services & Supplies – 0.9%

    

Capita Group PLC(a)

   1,540,797     16,527,989
        

Industrial Conglomerates – 2.5%

    

Siemens AG(a)

   357,485     26,698,393

Smiths Group PLC(a)

   1,326,276     17,042,502
        
       43,740,895
        

Machinery – 1.6%

    

Atlas Copco AB – Class A(a)

   1,816,520     15,982,629

Komatsu Ltd.(a)

   964,400     12,302,382
        
       28,285,011
        

Road & Rail – 0.8%

    

Central Japan Railway Co.(a)

   1,751     15,185,815
        

Trading Companies & Distributors – 0.9%

    

Mitsui & Co. Ltd.(a)

   1,571,000     16,150,459
        
       144,057,769
        

Consumer Discretionary – 7.7%

    

Auto Components – 1.4%

    

Compagnie Generale des Etablissements Michelin – Class B(a)

   294,288     15,548,329

Denso Corp.(a)

   533,400     9,038,124
        
       24,586,453
        

Automobiles – 1.9%

    

Bayerische Motoren Werke AG(a)

   475,006     14,828,153

Honda Motor Co. Ltd.(a)

   873,500     18,604,405
        
       33,432,558
        

Hotels, Restaurants & Leisure – 1.8%

    

Carnival PLC(a)

   837,156     18,487,740

OPAP, SA(a)

   500,278     14,397,172
        
       32,884,912
        

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     15

 

Portfolio of Investments


 

Company        
    
Shares
  U.S. $ Value
 
    

Media – 2.6%

    

Eutelsat Communications(a)

   1,223,363   $ 28,894,483

SES SA (FDR)(a)

   893,525     17,316,956
        
       46,211,439
        
       137,115,362
        

Information Technology – 7.5%

    

Communications Equipment – 0.3%

    

Alcatel-Lucent(a)(b)

   2,418,877     5,235,867
        

Electronic Equipment, Instruments & Components – 1.4%

    

Hoya Corp.(a)

   473,000     8,261,507

Keyence Corp.(a)

   83,400     17,139,698
        
       25,401,205
        

IT Services – 1.5%

    

Cap Gemini SA(a)

   560,638     21,678,201

Obic Co. Ltd.(a)

   33,060     5,398,973
        
       27,077,174
        

Office Electronics – 0.8%

    

Ricoh Co. Ltd.(a)

   1,086,000     13,918,961
        

Semiconductors & Semiconductor Equipment – 0.8%

    

Advanced Semiconductor Engineering, Inc.

   16,193,960     5,855,840

Tokyo Electron Ltd.(a)

   206,000     7,251,943
        
       13,107,783
        

Software – 2.7%

    

Nintendo Co. Ltd.(a)

   16,100     6,152,642

SAP AG(a)

   396,346     14,072,989

Shanda Interactive Entertainment Ltd.
(Sponsored) (ADR)(b)

   871,600     28,204,976
        
       48,430,607
        
       133,171,597
        

Materials – 6.8%

    

Chemicals – 2.3%

    

Incitec Pivot Ltd.(a)

   12,732,020     22,317,074

Syngenta AG(a)

   99,762     19,380,316
        
       41,697,390
        

Construction Materials – 0.8%

    

CRH PLC(a)

   527,955     13,574,209
        

Metals & Mining – 3.7%

    

Anglo American PLC(a)

   986,278     23,016,894

Cia Vale do Rio Doce – Class B
(Sponsored) (ADR)

   1,790,640     19,070,316

Equinox Minerals Ltd.(a)(b)

   7,621,613     8,396,431

Rio Tinto PLC(a)

   646,992     14,380,438
        
       64,864,079
        
       120,135,678
        

 

16     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Portfolio of Investments


 

Company        
    
Shares
  U.S. $ Value
 
    

Utilities – 4.4%

    

Electric Utilities – 1.7%

    

E.ON AG(a)

     749,626   $ 29,743,863
        

Independent Power Producers & Energy Traders – 0.5%

    

China Resources Power Holdings Co.

     4,604,000     8,951,727
        

Multi-Utilities – 2.2%

    

GDF Suez(a)

     469,624     23,310,800

National Grid PLC(a)

     1,684,578     16,646,178
        
       39,956,978
        
       78,652,568
        

Total Common Stocks
(cost $2,389,974,638)

       1,713,027,268
        

WARRANTS – 0.4%

    

Financials – 0.4%

    

Commercial Banks – 0.4%

    

Merill-CW10 Sberbank-CLS, expiring 2/23/10(a)
(cost $40,773,164)

     9,756     7,190,562
        
     Principal
Amount
(000)
   
        

SHORT-TERM INVESTMENTS — 0.4%

    

Time Deposit – 0.4%

    

Royal Bank of Canada GC
0.01%, 1/01/09
(cost $6,000,000)

   $ 6,000     6,000,000
        

Total Investments – 97.2%
(cost $2,436,747,802)

       1,726,217,830

Other assets less liabilities – 2.8%

       50,362,113
        

Net Assets – 100.0%

     $ 1,776,579,943
        

FORWARD CURRENCY EXCHANGE CONTRACTS (see Note D)

 

     Contract
Amount
(000)
  U.S. $
Value on
Origination
Date
  U.S. $
Value at
December 31,
2008
  Unrealized
Appreciation/
(Depreciation)
 

Buy Contracts:

       

Australian Dollar settling 1/15/09

  34,373   $ 22,782,424   $ 23,935,302   $        1,152,878  

Australian Dollar settling 1/15/09

  47,794     31,282,128     33,280,884     1,998,756  

Australian Dollar settling 1/15/09

  46,045     30,919,218     32,062,985     1,143,767  

Australian Dollar settling 1/15/09

  54,778     36,180,869     38,144,124     1,963,255  

British Pound settling 1/15/09

  49,384     80,594,688     70,976,585     (9,618,103 )

Canadian Dollar settling 1/15/09

  124,326     117,351,784     100,680,115     (16,671,669 )

Canadian Dollar settling 1/15/09

  12,925     10,592,439     10,466,761     (125,678 )

Euro Dollar settling 1/15/09

  271,871         381,774,851         377,714,281     (4,060,570 )

Euro Dollar settling 1/15/09

  17,011     21,972,088     23,633,626     1,661,538  

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     17

 

Portfolio of Investments


 

     Contract
Amount
(000)
  U.S. $
Value on
Origination
Date
  U.S. $
Value at
December 31,
2008
  Unrealized
Appreciation/
(Depreciation)
 

Euro Dollar settling 1/15/09

  9,299   $ 12,091,769   $ 12,919,234   $ 827,465  

Euro Dollar settling 3/16/09

  32,691     44,538,218     45,330,920     792,702  

Euro Dollar settling 3/16/09

  19,227     26,811,090     26,661,088     (150,002 )

Japanese Yen settling 1/15/09

  14,748,326     150,064,367     162,733,849     12,669,482  

Japanese Yen settling 1/15/09

  1,230,265     12,213,491     13,574,812     1,361,321  

Japanese Yen settling 1/15/09

  4,590,798     46,555,096     50,655,120     4,100,024  

Japanese Yen settling 1/15/09

  2,506,177     26,996,036     27,653,296     657,260  

New Zealand Dollar settling 1/15/09

  58,411     34,573,471     34,080,571     (492,900 )

New Zealand Dollar settling 1/15/09

  49,577     28,787,381     28,926,272     138,891  

New Zealand Dollar settling 1/15/09

  34,665     18,724,300     20,225,694            1,501,394  

Norwegian Kroner settling 1/15/09

  559,003     94,094,784     79,770,740     (14,324,044 )

Norwegian Kroner settling 1/15/09

  191,123     27,178,266     27,273,598     95,332  

Swedish Krona settling 1/15/09

  918,201     132,306,573     116,093,608     (16,212,965 )

Swedish Krona settling 1/15/09

  117,924     14,215,538     14,909,832     694,294  

Swiss Franc settling 1/15/09

  33,082     29,579,757     31,084,903     1,505,146  

Swiss Franc settling 1/15/09

  12,502     11,114,865     11,747,278     632,413  

Swiss Franc settling 1/15/09

  27,515     24,427,379     25,853,972     1,426,593  

Swiss Franc settling 1/15/09

  114,332     98,591,816     107,429,996     8,838,180  

Sale Contracts:

       

Australian Dollar settling 1/15/09

  128,212     100,723,347     89,279,172     11,444,175  

British Pound settling 1/15/09

  210,553         372,741,976         302,614,873     70,127,103  

British Pound settling 1/15/09

  22,712     38,518,870     32,642,560     5,876,310  

British Pound settling 1/15/09

  15,843     23,798,404     22,770,169     1,028,235  

British Pound settling 1/15/09

  20,987     31,175,349     30,163,324     1,012,025  

British Pound settling 1/15/09

  20,606     30,540,771     29,615,736     925,035  

British Pound settling 3/16/09

  19,448     28,670,241     27,918,803     751,438  

Canadian Dollar settling 1/15/09

  124,326     105,067,185     100,680,115     4,387,070  

Canadian Dollar settling 1/15/09

  12,925     10,922,843     10,466,761     456,082  

Euro Dollar settling 1/15/09

  22,527     30,891,951     31,297,084     (405,133 )

Euro Dollar settling 1/15/09

  8,127     11,107,659     11,290,959     (183,300 )

Euro Dollar settling 1/15/09

  76,465     102,990,709     106,233,922     (3,243,213 )

Euro Dollar settling 1/15/09

  104,702     134,483,437     145,463,991     (10,980,554 )

Euro Dollar settling 1/15/09

  39,892     51,396,853     55,422,528     (4,025,675 )

Euro Dollar settling 1/15/09

  20,158     25,599,047     28,005,798     (2,406,751 )

Euro Dollar settling 1/15/09

  17,011     21,861,686     23,633,626     (1,771,940 )

Japanese Yen settling 1/15/09

  1,699,575     17,452,661     18,753,205     (1,300,544 )

Norwegian Kroner settling 1/15/09

  56,301     9,164,469     8,034,254     1,130,215  

Norwegian Kroner settling 1/15/09

  122,731     18,251,591     17,513,936     737,655  

Swedish Krona settling 1/15/09

  113,072     15,933,264     14,296,365     1,636,899  

Swedish Krona settling 1/15/09

  340,231     47,711,541     43,017,427     4,694,114  

Swedish Krona settling 1/15/09

  582,822     72,441,194     73,689,648     (1,248,454 )

Swiss Franc settling 1/15/09

  278,765     250,208,683     261,936,491     (11,727,808 )

Swiss Franc settling 3/16/09

  17,735     14,802,604     16,675,599     (1,872,995 )

 

(a) Position, or a portion thereof, has been segregated to collateralize forward currency exchange contracts. The aggregate market value of these securities amounted to $1,394,873,681.

 

(b) Non-income producing security.

 

Glossary:

ADR – American Depositary Receipt

FDR – Fiduciary Depositary Receipt

See notes to financial statements.

 

18     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Portfolio of Investments


STATEMENT OF ASSETS & LIABILITIES

December 31, 2008 (unaudited)

 

Assets   

Investments in securities, at value (cost $2,436,747,802)

   $ 1,726,217,830  

Cash

     93,845  

Foreign currencies, at value (cost $8,806,806)

     8,830,174  

Unrealized appreciation of forward currency exchange contracts

     147,367,050  

Receivable for capital stock sold

     8,409,046  

Receivable for investment securities sold and foreign currency contracts

     3,685,648  

Dividends and interest receivable

     4,730,455  
        

Total assets

     1,899,334,048  
        
Liabilities   

Unrealized depreciation of forward currency exchange contracts

     100,822,301  

Payable for capital stock redeemed

     16,369,185  

Payable for investment securities purchased and foreign currency contracts

     2,893,809  

Advisory fee payable

     1,159,106  

Distribution fee payable

     546,618  

Administrative fee payable

     32,672  

Transfer Agent fee payable

     3,779  

Accrued expenses

     926,635  
        

Total liabilities

     122,754,105  
        

Net Assets

   $ 1,776,579,943  
        
Composition of Net Assets   

Capital stock, at par

   $ 174,690  

Additional paid-in capital

     3,179,440,869  

Distributions in excess of net investment income

     (5,926,172 )

Accumulated net realized loss on investment
and foreign currency transactions

     (733,217,729 )

Net unrealized depreciation of investments
and foreign currency denominated assets and liabilities

     (663,891,715 )
        
   $     1,776,579,943  
        

Net Asset Value Per Share—21 billion shares of capital stock authorized, $.001 par value

 

Class   Net Asset      Shares
Outstanding
     Net Asset
Value
 
A   $   1,098,389,416      106,371,872      $   10.33 *
   
B   $ 63,483,943      6,742,562      $ 9.42  
   
C   $ 253,498,544      26,868,420      $ 9.43  
   
Advisor   $ 296,546,515      28,425,548      $ 10.43  
   
R   $ 38,715,630      3,772,867      $ 10.26  
   
K   $ 9,181,947      891,245      $ 10.30  
   
I   $ 16,763,948      1,617,062      $ 10.37  
   

 

* The maximum offering price per share for Class A shares was $10.79 which reflects a sales charge of 4.25%.

See notes to financial statements.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     19

 

Statement of Assets & Liabilities


STATEMENT OF OPERATIONS

Six Months Ended December 31, 2008 (unaudited)

 

Investment Income     

Dividends (net of foreign taxes withheld of $2,150,624)

   $     26,167,500    

Interest

     298,578     $ 26,466,078  
          
Expenses     

Advisory fee (see Note B)

     9,539,669    

Distribution fee—Class A

     2,332,761    

Distribution fee—Class B

     466,116    

Distribution fee—Class C

     1,925,326    

Distribution fee—Class R

     120,293    

Distribution fee—Class K

     14,347    

Transfer agency—Class A

     1,209,367    

Transfer agency—Class B

     100,232    

Transfer agency—Class C

     335,167    

Transfer agency—Advisor Class

     340,590    

Transfer agency—Class R

     47,646    

Transfer agency—Class K

     11,477    

Transfer agency—Class I

     2,167    

Custodian

     1,064,542    

Printing

     135,628    

Registration

     128,423    

Administrative

     60,711    

Audit

     33,214    

Legal

     27,612    

Directors’ fees

     23,201    

Miscellaneous

     38,294    
          

Total expenses

     17,956,783    

Less: expense offset arrangement (see Note B)

     (15,210 )  
          

Total expenses

       17,941,573  
          

Net investment income

       8,524,505  
          
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions     

Net realized loss on:

    

Investment transactions

       (721,424,121 )

Foreign currency transactions

       (6,355,824 )
          

Net change in unrealized appreciation/depreciation of:

    

Investments

       (963,535,585 )

Foreign currency denominated assets and liabilities

       46,068,667  
          

Net loss on investments and foreign currency transactions

           (1,645,246,863)  
          

Net Decrease in Net Assets from Operations

     $ (1,636,722,358 )
          

See notes to financial statements.

 

20     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Statement of Operations


STATEMENT OF CHANGES IN NET ASSETS

 

     Six Months Ended
December 31, 2008
(unaudited)
    Year Ended
June 30,
2008
 
Increase (Decrease) in Net Assets from Operations     

Net investment income

   $ 8,524,505     $ 39,043,930  

Net realized gain (loss) on investments and foreign currency transactions

     (727,779,945 )     47,413,307  

Net change in unrealized appreciation/ depreciation of investments and foreign currency denominated assets and liabilities

     (917,466,918 )     (175,972,569 )

Contributions from Adviser (see Note B)

     – 0     78,968  
                

Net decrease in net assets from operations

     (1,636,722,358 )     (89,436,364 )
Dividends and Distributions
to Shareholders from
    

Net investment income

    

Class A

     (31,031,193 )     (15,438,794 )

Class B

     (1,246,157 )     (361,602 )

Class C

     (5,865,485 )     (1,378,416 )

Advisor Class

     (8,973,727 )     (4,263,259 )

Class R

     (868,294 )     (327,559 )

Class K

     (218,825 )     (89,448 )

Class I

     (469,533 )     (303,000 )

Net realized gain on investment and foreign currency transactions

    

Class A

     (2,224,458 )     (111,480,268 )

Class B

     (130,488 )     (8,636,651 )

Class C

     (614,186 )     (32,922,894 )

Advisor Class

     (566,166 )     (23,533,185 )

Class R

     (68,640 )     (2,805,711 )

Class K

     (15,686 )     (590,931 )

Class I

     (28,456 )     (1,581,201 )
Capital Stock Transactions     

Net increase

     28,461,717       1,142,070,183  

Total increase (decrease)

     (1,660,581,935 )     848,920,900  
Net Assets     

Beginning of period

     3,437,161,878       2,588,240,978  
                

End of period (including distributions in excess of net investment income and undistributed net investment income of ($5,926,172) and $34,222,537, respectively).

   $     1,776,579,943     $     3,437,161,878  
                

See notes to financial statements.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     21

 

Statement of Changes in Net Assets


NOTES TO FINANCIAL STATEMENTS

December 31, 2008 (unaudited)

 

NOTE A

Significant Accounting Policies

AllianceBernstein International Growth Fund, Inc. (the “Fund”), organized as a Maryland corporation on March 16, 1994, is registered under the Investment Company Act of 1940 as an open-end management investment company. The Fund offers Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares. Class A shares are sold with 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 ask 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

 

22     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; securities traded in the over-the-counter market (“OTC”) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less; or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, AllianceBernstein L.P. (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. Investments in money market funds are valued at their net asset value each day.

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 (see Note A.2).

2. Fair Value Measurements

The Fund adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective December 1, 2007. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     23

 

Notes to Financial Statements


 

based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

   

Level 1—quoted prices in active markets for identical investments

   

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

   

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2008:

 

Level

   Investments in
Securities
     Other
Financial
Instruments*
 

Level 1

   $ 174,905,534      $ – 0  –

Level 2

     1,526,475,535          46,544,749  

Level 3

     24,836,761        – 0  –
                 

Total

   $     1,726,217,830      $ 46,544,749  
                 

 

* Other financial instruments are derivative instruments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

 

The earlier close of the foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available. Accordingly, a significant portion of the Fund’s investments are categorized as Level 2 investments.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     Investments in
Securities
 

Balance as of 6/30/08

   $ 63,106,913  

Accrued discounts/premiums

     6,922,403  

Realized gain (loss)

     (7,417,076 )

Change in unrealized appreciation/depreciation

     (33,670,020 )

Net purchases (sales)

     (4,105,459 )

Net transfers in and/or out of Level 3

     – 0  –
        

Balance as of 12/31/08

   $ 24,836,761  
        

Net change in unrealized appreciation/depreciation from investments
held as of 12/31/08

   $ (33,670,020 )*

 

* The unrealized depreciation is included net change in unrealized appreciation/depreciation of investments in the accompanying statement of operations.

3. 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

 

24     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

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 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.

4. 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.

In accordance with FASB Interpretation No. 48, “Accounting for Uncertainties in Income Taxes” (“FIN 48”), management has analyzed the Fund’s tax positions taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.

6. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on their respective net assets.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     25

 

Notes to Financial Statements


 

7. Dividends and Distributions

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. generally accepted accounting principles. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .75% of the first $2.5 billion, .65% of the next $2.5 billion and .60% in excess of $5 billion, of the Fund’s average daily net assets. The fee is accrued daily and paid monthly. Effective May 16, 2005, the Adviser voluntarily agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses on an annual basis to 1.65%, 2.35%, 2.35%, 1.35%, 1.85%, 1.60% and 1.35% of the daily average net assets for the Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares, respectively. For the six months ended December 31, 2008, there were no fees waived by the Adviser.

For the years ended June 30, 2008 and June 30, 2007, the Adviser reimbursed the Fund $78,968 and $5,492, respectively, for trading losses incurred due to trade entry errors.

Pursuant to the investment advisory agreement, the Fund paid $60,711 to the Adviser representing the cost of certain legal and accounting services provided to the Fund by the Adviser for the six months ended December 31, 2008.

The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the fund 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 $909,016 for the six months ended December 31, 2008.

For the six months ended December 31, 2008, the expenses of Class A, Class B, Class C and Advisor Class shares were reduced by $15,210 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 $16,848 from the sale of Class A shares and received $16,264, $94,204 and $98,488 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the six months ended December 31, 2008.

 

26     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

Brokerage commissions paid on investment transactions for the six months ended December 31, 2008, amounted to $2,906,083, none of which was paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund’s average daily net assets attributable to Class A shares, 1% of the average daily net assets attributable to the Class B and Class C shares, .50% of the Fund’s average daily net assets attributable to Class R shares and .25% of the Fund’s average daily net assets attributable to Class K shares. There are no distribution and servicing fees on the Class I and Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. The Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $10,427,783, $5,219,641, $371,419 and $84,976 for Class B, Class C, Class R and Class K shares, respectively. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund’s shares.

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the six months ended December 31, 2008, were as follows:

 

     Purchases     Sales  

Investment securities (excluding U.S. government securities)

   $     1,257,323,988     $     1,474,457,379  

U.S. government securities

     – 0  –     – 0  –

The cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation (excluding foreign currency transactions) are as follows:

 

Gross unrealized appreciation

   $ 74,009,177  

Gross unrealized depreciation

     (784,539,149 )
        

Net unrealized depreciation

   $     (710,529,972 )
        

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     27

 

Notes to Financial Statements


 

1. 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 or to hedge certain firm purchase and sales commitments denominated in foreign currencies and for non-hedging purposes as a means of making direct investments in foreign currencies, as described below under “Currency Transactions”. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contract and the closing of such contract would be included in net realized 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/or depreciation by the Fund.

The Fund’s custodian will place and maintain cash not available for investment or other liquid assets in a separate account of the Fund having a value at least equal to the aggregate amount of the Fund’s commitments under forward currency exchange contracts entered into with respect to position hedges. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The face or contract amount, in U.S. dollars reflects the total exposure the Fund has in that particular currency contract.

2. Currency Transactions

The Fund may invest in non-U.S. Dollar securities on a currency hedged or unhedged basis. The Fund may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and options. The Fund may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Fund and do not present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Fund may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).

 

28     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

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
December 31, 2008

(unaudited)

    Year Ended
June 30, 2008
       

Six Months Ended
December 31, 2008

(unaudited)

    Year Ended
June 30, 2008
     
        
Class A             

Shares sold

   32,924,578     49,815,862       $ 471,646,472     $ 1,015,136,410    
     

Shares issued in reinvestment of dividends and distributions

   1,638,946     5,583,422         29,617,127       116,972,683    
     

Shares converted from Class B

   792,811     1,123,314         11,057,800       22,706,877    
     

Shares redeemed

   (39,934,398 )   (23,784,543 )       (520,586,833 )     (475,736,602 )  
     

Net increase (decrease)

   (4,578,063 )   32,738,055       $ (8,265,434 )   $ 679,079,368    
     
            
Class B             

Shares sold

   2,355,474     1,599,463       $ 29,897,236     $ 29,885,623    
     

Shares issued in reinvestment of dividends and distributions

   140,267     435,421         1,257,609       8,355,732    
     

Shares converted to Class A

   (867,922 )   (1,227,647 )       (11,057,800 )     (22,706,877 )  
     

Shares redeemed

   (1,423,162 )   (1,406,720 )       (16,491,238 )     (25,879,624 )  
     

Net increase (decrease)

   204,657     (599,483 )     $ 3,605,807     $ (10,345,146 )  
     
            
Class C             

Shares sold

   4,351,171     11,088,470       $ 70,006,240     $ 208,247,749    
     

Shares issued in reinvestment of dividends and distributions

   869,120     1,682,373         5,930,506       32,335,203    
     

Shares redeemed

   (9,299,907 )   (4,996,747 )       (105,362,973 )     (91,005,237 )  
     

Net increase (decrease)

   (4,079,616 )   7,774,096       $ (29,426,227 )   $ 149,577,715    
     
            
Advisor Class             

Shares sold

   14,575,237     18,201,116       $ 217,431,789     $ 371,154,033    
     

Shares issued in reinvestment of dividends and distributions

   796,035     1,156,308         7,366,377       24,432,797    
     

Shares redeemed

   (15,006,017 )   (6,469,578 )       (173,356,891 )     (130,846,183 )  
     

Net increase

   365,255     12,887,846       $ 51,441,275     $ 264,740,647    
     

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     29

 

Notes to Financial Statements


 

            
     Shares         Amount      
    

Six Months Ended
December 31, 2008

(unaudited)

    Year Ended
June 30, 2008
       

Six Months Ended
December 31, 2008

(unaudited)

    Year Ended
June 30, 2008
     
                                  
Class R             

Shares sold

   994,200     2,747,539       $ 12,961,487     $ 55,596,514    
     

Shares issued in reinvestment of dividends and distributions

   64,549     150,256         1,196,517       3,132,834    
     

Shares redeemed

   (694,864 )   (917,147 )       (8,928,162 )     (18,225,056 )  
     

Net increase

   363,885     1,980,648       $ 5,229,842     $ 40,504,292    
     
            
Class K             

Shares sold

   274,522     530,152       $ 3,887,186     $ 10,574,792    
     

Shares issued in reinvestment of dividends and distributions

   13,006     32,554         234,509       680,374    
     

Shares redeemed

   (185,354 )   (165,981 )       (2,394,859 )     (3,267,256 )  
     

Net increase

   102,174     396,725       $ 1,726,836     $ 7,987,910    
     
            
Class I             

Shares sold

   244,794     537,513       $ 4,535,316     $ 11,168,062    
     

Shares issued in reinvestment of dividends and distributions

   27,214     84,759         492,849       1,779,091    
     

Shares redeemed

   (79,760 )   (125,804 )       (878,547 )     (2,421,756 )  
     

Net increase

   192,248     496,468       $ 4,149,618     $ 10,525,397    
     

NOTE F

Risks Involved in Investing in the Fund

Foreign Securities Risk—Investing in securities of foreign companies or foreign governments involves special risks which include changes in foreign currency exchange rates and the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies or of the U.S. government.

Currency Risk—This is the risk that changes in foreign currency exchange rates may negatively affect the value of the Fund’s investments or reduce the returns of the Fund. For example, the value of the Fund’s investments in foreign currency-denominated securities or currencies may decrease if the U.S. Dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the U.S. Dollar). Currency markets are generally not as regulated as securities markets. Independent of the Fund’s investments in securities denominated in foreign currencies, the Fund’s positions in

 

30     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

various foreign currencies may cause the Fund to experience investment losses due to the changes in exchange rates and interest rates.

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 short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the facility during the six months ended December 31, 2008.

NOTE H

Acquisition of AllianceBernstein International Research Growth Fund, Inc. by AllianceBernstein International Growth Fund, Inc. (the “Fund”)

On July 25, 2008, the Fund acquired all of the assets and all of the liabilities of AllianceBernstein International Research Growth Fund, Inc. (“IRG”), pursuant to a plan of reorganization approved on May 8, 2008, by the Boards of Directors of IRG and the Fund. On July 25, 2008, the acquisition was accomplished by a tax-free exchange of 18,002,956 shares of the Fund for 21,703,099 shares of IRG. The aggregate net assets of the Fund and IRG immediately before the acquisition were $3,193,887,109 and $310,313,691 (including $20,279,606 of net unrealized appreciation of investments and foreign currency denominated assets and liabilities), respectively. Immediately after the acquisition, the combined net assets of the Fund amounted to $3,504,200,800.

NOTE I

Distributions to Shareholders

The tax character of distributions paid for the year ending June 30, 2009 will be determined at the end of the current fiscal year. The tax character of distributions paid for the year ending June 30, 2008 and June 30, 2007 were as follows:

 

     June 30,
2008
   June 30,
2007

Distributions paid from:

     

Ordinary income

   $ 94,519,187    $ 16,540,193

Long-term capital gain

     109,193,732      60,373,288
             

Total taxable distributions

     203,712,919      76,913,481
             

Total distributions paid

   $     203,712,919    $     76,913,481
             

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     31

 

Notes to Financial Statements


 

As of June 30, 2008, the components of accumulated earning/(deficit) on a tax basis were as follows:

 

Undistributed ordinary income

   $ 48,582,537  

Undistributed long-term capital gains

     3,691,678  

Accumulated capital and other losses

     (435,588 )(a)

Unrealized appreciation/(depreciation)

     234,169,409  
        

Total accumulated earnings/(deficit)

   $     286,008,036 (b)
        

 

(a) Net capital loss incurred after October 31, and within the taxable year are deemed to arise on the first business day of the Funds next taxable year. For the year ended June 30, 2008, the Fund deferred to July 1, 2008, post October capital losses of $435,588.

 

(b) The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales and to Passive Foreign Investment Company (“PFIC”) mark-to-market gain recognition.

NOTE J

Legal Proceedings

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 (“AllianceBernstein defendants”), and certain other unaffiliated defendants, 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 AllianceBernstein 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.

Following 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 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 Order of the SEC dated December 18, 2003 as amended and restated January 15, 2004 (“SEC Order”) and the New York State Attorney General Assurance of Discontinuance dated September 1, 2004 (“NYAG Order”).

 

32     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Notes to Financial Statements


 

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 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 settlement amount ($30 million), which the Adviser previously accrued and disclosed, has been disbursed. The derivative claims brought on behalf of Alliance Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.

It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the AllianceBernstein Mutual Funds’ shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. However, the Adviser believes that these matters are not likely to have a material adverse effect on its ability to perform advisory services relating to the AllianceBernstein Mutual Funds.

NOTE K

Recent Accounting Pronouncement

On March 19, 2008, the FASB released Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and believes the adoption of FAS 161 will have no material impact on the Fund’s financial statements.

NOTE L

Subsequent Event

Effective January 31, 2009, sales of Class B shares of the Fund to new investors were suspended. Class B shares will only be issued (i) upon the exchange of Class B shares from another AllianceBernstein Fund, (ii) for purposes of dividend reinvestment, (iii) through the Fund’s Automatic Investment Program (the “Program”) for accounts that established the Program prior to January 31, 2009, and (iv) for purchases of additional shares by Class B shareholders as of January 31, 2009. The ability to establish a new Automatic Investment Program for accounts containing Class B shares was suspended as of January 31, 2009.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     33

 

Notes to Financial Statements


 

FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class A  
   

Six Months
Ended
December 31,
2008

(unaudited)

    Year Ended June 30,  
      2008     2007     2006     2005     2004  
     
           

Net asset value, beginning of period

  $  19.18     $  20.85     $  16.93     $  13.72     $  11.15     $  8.38  
     

Income From Investment Operations

           

Net investment income(a)

  .05     .27     .23     .20     .15 (b)   .05 (b)(c)

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (8.60 )   (.53 )   4.56     3.22     2.46     2.76  

Contributions from Adviser

  – 0   – 0 (d)   – 0 (d)   – 0   – 0   – 0
     

Net increase (decrease) in net asset value from operations

  (8.55 )   (.26 )   4.79     3.42     2.61     2.81  
     

Less: Dividends
and Distributions

           

Dividends from net investment income

  (0.28 )   (.17 )   (.15 )   (.09 )   (.04 )   (.04 )

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0   – 0
     

Total dividends and distributions

  (.30 )   (1.41 )   (.87 )   (.21 )   (.04 )   (.04 )
     

Net asset value, end of period

  $  10.33     $  19.18     $  20.85     $  16.93     $  13.72     $  11.15  
     

Total Return

           

Total investment return based on net asset value(e)

  (45.25 )%   (1.80 )%   29.16  %   25.11  %   23.44  %   33.57  %

Ratios/Supplemental Data

           

Net assets, end of period (000’s omitted)

  $1,098,389     $2,128,533     $1,630,491     $952,036     $310,073     $202,899  

Ratio to average net assets of:

           

Expenses, net of waivers/reimbursements

  1.32  %(f)   1.23  %   1.27  %   1.43  %(g)   1.57  %   1.89  %

Expenses, before waivers/reimbursements

  1.32  %(f)   1.23  %   1.27  %   1.43  %(g)   1.61  %   2.04  %

Net investment income

  .75  %(f)   1.35  %   1.21  %   1.26  %(g)   1.17  %(b)   .49  %(b)(c)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %   50  %

See footnote summary on page 41.

 

34     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class B  
   

Six Months
Ended
December 31,
2008

(unaudited)

    Year Ended June 30,  
      2008     2007     2006     2005     2004  
           
     

Net asset value, beginning of period

  $  17.50     $  19.15     $  15.65     $  12.72     $  10.38     $  7.84  
     

Income From Investment Operations

           

Net investment
income (loss)(a)

  – 0   .09     .06     .05     .04 (b)   (.03 )(b)(c)

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (7.87 )   (.45 )   4.22     3.01     2.30     2.57  

Contributions from Adviser

  – 0   – 0 (d)   – 0 (d)   – 0   – 0   – 0
     

Net increase (decrease) in net asset value from operations

  (7.87 )   (.36 )   4.28     3.06     2.34     2.54  
     

Less: Dividends
and Distributions

           

Dividends from net investment income

  (.19 )   (.05 )   (.06 )   (.01 )   – 0   – 0

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0   – 0
     

Total dividends and distributions

  (.21 )   (1.29 )   (.78 )   (.13 )   – 0   – 0
     

Net asset value, end of period

  $  9.42     $  17.50     $  19.15     $  15.65     $  12.72     $  10.38  
     

Total Return

           

Total investment return based on net asset value(e)

  (45.48 )%   (2.45 )%   28.18  %   24.18  %   22.54  %   32.40  %

Ratios/Supplemental Data

           

Net assets, end of period (000’s omitted)

  $63,484     $114,406     $136,704     $109,706     $66,613     $56,959  

Ratio to average net assets of:

           

Expenses, net of waivers/reimbursements

  2.08  %(f)   1.97  %   2.00  %   2.18  %(g)   2.33  %   2.67  %

Expenses, before waivers/reimbursements

  2.08  %(f)   1.97  %   2.01  %   2.18  %(g)   2.37  %   2.82  %

Net investment income (loss)

  .01  %(f)   .48  %   0.37  %   .33  %(g)   0.33  %(b)   (.30 )%(b)(c)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %   50   %

See footnote summary on page 41.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     35

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class C  
   

Six Months
Ended
December 31,
2008

(unaudited)

    Year Ended June 30,  
      2008     2007     2006     2005     2004  
     
           

Net asset value, beginning of period

  $  17.53     $  19.18     $  15.67     $  12.72     $  10.38     $  7.84  
     

Income From Investment Operations

           

Net investment income (loss)(a)

  – 0  –   .12     .10     .13     .06 (b)   (.02 )(b)(c)

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (7.89 )   (.48 )   4.19     2.95     2.28     2.56  

Contributions from Adviser

  – 0  –   – 0  –(d)   – 0  –(d)   – 0  –   – 0  –   – 0  –
     

Net increase (decrease) in net asset value from operations

  (7.89 )   (.36 )   4.29     3.08     2.34     2.54  
     

Less: Dividends
and Distributions

           

Dividends from net investment income

  (.19 )   (.05 )   (.06 )   (.01 )   – 0  –   – 0  –

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0  –   – 0  –
     

Total dividends and distributions

  (.21 )   (1.29 )   (.78 )   (.13 )   – 0  –   – 0  –
     

Net asset value, end of period

  $  9.43     $  17.53     $  19.18     $  15.67     $  12.72     $  10.38  
     

Total Return

           

Total investment return based on net asset value(e)

  (45.52 )%   (2.45 )%   28.21  %   24.34  %   22.54  %   32.40  %

Ratios/Supplemental
Data

           

Net assets, end of period (000’s omitted)

  $253,498     $542,520     $444,496     $210,147     $29,957     $16,005  

Ratio to average net assets of:

           

Expenses, net of waivers/reimbursements

  2.04  %(f)   1.94  %   1.98  %   2.13  %(g)   2.29  %   2.65  %

Expenses, before waivers/reimbursements

  2.04  %(f)   1.94  %   1.98  %   2.13  %(g)   2.33  %   2.80  %

Net investment income (loss)

  .03  %(f)   .62  %   .55  %   .85  %(g)   .55  %(b)   (.26 )%(b)(c)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %   50  %

See footnote summary on page 41.

 

36     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Advisor Class  
   

Six Months
Ended
December 31,
2008

(unaudited)

    Year Ended June 30,  
      2008     2007     2006     2005     2004  
     
           

Net asset value, beginning of period

  $  19.39     $  21.05     $  17.08     $  13.82     $  11.22     $  8.44  
     

Income From Investment Operations

           

Net investment income(a)

  .07     .35     .31     .29     .22 (b)   .13 (b)(c)

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (8.69 )   (.54 )   4.57     3.21     2.45     2.72  

Contributions from Adviser

  – 0  –   – 0  –(d)   – 0  –(d)   – 0  –   – 0  –   – 0  –
     

Net increase (decrease) in net asset value from operations

  (8.62 )   (.19 )   4.88     3.50     2.67     2.85  
     

Less: Dividends
and Distributions

           

Dividends from net investment income

  (.32 )   (.23 )   (.19 )   (.12 )   (.07 )   (.07 )

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0  –   – 0  –
     

Total dividends and distributions

  (.34 )   (1.47 )   (.91 )   (.24 )   (.07 )   (.07 )
     

Net asset value, end of period

  $  10.43     $  19.39     $  21.05     $  17.08     $  13.82     $  11.22  
     

Total Return

           

Total investment return based on net asset value(e)

  (45.22 )%   (1.49 )%   29.51  %   25.57  %   23.86  %   33.81  %

Ratios/Supplemental Data

           

Net assets, end of period
(000’s omitted)

  $296,547     $544,154     $319,322     $108,237     $8,404     $2,817  

Ratio to average net assets of:

           

Expenses, net of waivers/reimbursements

  1.03  %(f)   .93  %   .97  %   1.13  %(g)   1.25  %   1.54  %

Expenses, before waivers/ reimbursements

  1.03  %(f)   .93  %   .97  %   1.13  %(g)   1.29  %   1.69  %

Net investment income

  1.08  %(f)   1.74  %   1.62  %   1.81  %(g)   1.74  %(b)   1.29  %(b)(c)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %   50  %

See footnote summary on page 41.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     37

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class R  
    Six Months
Ended
December 31,
2008
(unaudited)
    Year Ended June 30,     March 1,
2005(h) to
June 30,
2005
 
      2008     2007     2006    
     
         

Net asset value, beginning of period

  $  19.06     $  20.75     $  16.90     $  13.72     $  14.08  
     

Income From Investment Operations

         

Net investment income(a)

  .03     .25     .20     .29     .12  

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (8.56 )   (.55 )   4.52     3.09     (.48 )

Contributions from Adviser

  – 0  –   – 0  –(d)   – 0  –(d)   – 0  –   – 0  –
     

Net increase (decrease) in net asset value from operations

  (8.53 )   (.30 )   4.72     3.38     (.36 )
     

Less: Dividends and Distributions

         

Dividends from net investment income

  (.25 )   (.15 )   (.15 )   (.08 )   – 0  –

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0  –
     

Total dividends and distributions

  (.27 )   (1.39 )   (.87 )   (.20 )   – 0  –
     

Net asset value, end of period

  $  10.26     $  19.06     $  20.75     $  16.90     $  13.72  
     

Total Return

         

Total investment return based on net asset value(e)

  (45.35 )%   (2.03 )%   28.80  %   24.83  %   (2.56 )%

Ratios/Supplemental
Data

         

Net assets, end of period (000’s omitted)

  $38,716     $64,985     $29,638     $6,969     $10  

Ratio to average net
assets of:

         

Expenses, net of
waivers/ reimbursements

  1.57  %(f)   1.49  %   1.56  %   1.67  %(g)   1.58  %(f)

Expenses, before
waivers/ reimbursements

  1.57  %(f)   1.49  %   1.56  %   1.67  %(g)   1.58  %(f)

Net investment income

  .51  %(f)   1.24  %   1.02  %   1.76  %(g)   2.59  %(f)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %

See footnote summary on page 41.

 

38     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class K  
   

Six Months
Ended
December 31,
2008

(unaudited)

    Year Ended June 30,    

March 1,
2005(h) to
June 30,

2005

 
      2008     2007     2006    
     
         

Net asset value, beginning of period

  $  19.14     $  20.82     $  16.95     $  13.73     $  14.08  
     

Income From Investment Operations

         

Net investment income(a)

  .05     .29     .31     .34     .13  

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (8.59 )   (.54 )   4.47     3.09     (.48 )

Contributions from Adviser

  – 0  –   – 0  –(d)   – 0  –(d)   – 0  –   – 0  –
     

Net increase (decrease) in net asset value from operations

  (8.54 )   (.25 )   4.78     3.43     (.35 )
     

Less: Dividends and Distributions

         

Dividends from net investment income

  (.28 )   (.19 )   (.19 )   (.09 )   – 0  –

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0  –
     

Total dividends and distributions

  (.30 )   (1.43 )   (.91 )   (.21 )   – 0  –
     

Net asset value, end of period

  $  10.30     $  19.14     $  20.82     $  16.95     $  13.73  
     

Total Return

         

Total investment return based on net asset value(e)

  (45.29 )%   (1.78 )%   29.13  %   25.18  %   (2.49 )%

Ratios/Supplemental
Data

         

Net assets, end of period (000’s omitted)

  $9,182     $15,104     $8,169     $760     $10  

Ratio to average net
assets of:

         

Expenses, net of
waivers/
reimbursements

  1.32  %(f)   1.26  %   1.26  %   1.41  %(g)   1.32  %(f)

Expenses, before
waivers/
reimbursements

  1.32  %(f)   1.26  %   1.26  %   1.41  %(g)   1.32  %(f)

Net investment income

  .78  %(f)   1.45  %   1.60  %   2.05  %(g)   2.85  %(f)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %

See footnote summary on page 41.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     39

 

Financial Highlights


 

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

    Class I  
    Six Months
Ended
December 31,
2008
(unaudited)
    Year Ended June 30,    

March 1,
2005(h) to
June 30,

2005

 
      2008     2007     2006    
     
         

Net asset value, beginning of period

  $  19.27     $  20.92     $  16.98     $  13.74     $  14.08  
     

Income From Investment Operations

         

Net investment income(a)

  .08     .35     .32     .48     .14  

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (8.63 )   (.52 )   4.54     3.01     (.48 )

Contributions from Adviser

  – 0   – 0 (d)   – 0 (d)   – 0   – 0
     

Net increase (decrease) in net asset value from operations

  (8.55 )   (.17 )   4.86     3.49     (.34 )
     

Less: Dividends and Distributions

         

Dividends from net investment income

  (.33 )   (.24 )   (.20 )   (.13 )   – 0

Distributions from net realized gains on investment and foreign currency transactions

  (.02 )   (1.24 )   (.72 )   (.12 )   – 0
     

Total dividends and distributions

  (.35 )   (1.48 )   (.92 )   (.25 )   – 0
     

Net asset value, end of period

  $  10.37     $  19.27     $  20.92     $  16.98     $  13.74  
     

Total Return

         

Total investment return based on net asset value(e)

  (45.15 )%   (1.39 )%   29.59  %   25.61  %   (2.41 )%

Ratios/Supplemental
Data

         

Net assets, end of period (000’s omitted)

  $16,764     $27,460     $19,421     $2,497     $10  

Ratio to average net assets of:

         

Expenses, net of waivers/ reimbursements

  .89  %(f)   .84  %   .90  %   1.09  %(g)   1.04  %(f)

Expenses, before waivers/ reimbursements

  .89  %(f)   .84  %   .90  %   1.09  %(g)   1.04  %(f)

Net investment income

  1.20  %(f)   1.70  %   1.70  %   2.81  %(g)   3.13  %(f)

Portfolio turnover rate

  49  %   90  %   68  %   59  %   47  %

See footnote summary on page 41.

 

40     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Financial Highlights


 

(a) Based on average shares outstanding.

 

(b) Net of expenses waived/reimbursed by the Adviser.

 

(c) Net of expenses waived by the Transfer Agent.

 

(d) Amount is less than $0.005.

 

(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 total investment return. Total investment return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return for a period of less than one year is not annualized.

 

(f) Annualized.

 

(g) The ratio includes expenses attributable to costs of proxy solicitation.

 

(h) Commencement of distributions.

 

 

See notes to financial statements.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     41

 

Financial Highlights


 

BOARD OF DIRECTORS

 

William H. Foulk, Jr.,(1) Chairman    Garry L. Moody(1)
John H. Dobkin(1)    Nancy P. Jacklin(1)
Michael J. Downey(1)   

Marshall C. Turner, Jr.(1)

D. James Guzy(1)

  

Earl D. Weiner(1)

OFFICERS

Robert M. Keith,

President and Chief Executive Officer

Philip L. Kirstein,

Senior Vice President and Independent
Compliance Officer

Hiromitsu Agata, Vice President

Isabel Buccellati, Vice President

Gregory D. Eckersley(2), Vice President

William A. Johnston, Vice President

Ian Kirwan, Vice President

Michael J. Levy(2), Vice President

Siobhan F. McManus, Vice President

Michele Patri, Vice President

  

David G. Robinson, Vice President

Robert W. Scheetz(2), Vice President

Lisa A. Shalett, Vice President

Stephen Tong, Vice President

Christopher M. Toub(2), Vice President

Emilie D. Wrapp, Secretary

Joseph J. Mantineo, Treasurer & Chief Financial Officer

Phyllis J. Clarke, Controller

 

Custodian and Accounting Agent

Brown Brothers Harriman &

Company

40 Water Street

Boston, MA 02109-3661

 

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

 

Transfer Agent

AllianceBernstein Investor Services, Inc.

P.O. Box 786003

San Antonio, TX 78278-6003

Toll-Free (800) 221-5672

  

Independent Registered Public Accounting Firm

KPMG LLP

345 Park Avenue

New York, NY 10154

 

Legal Counsel

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

 

(1) Member of the Audit Committee, the Independent Directors Committee and the Governance and Nominating Committee. Mr. Foulk is the sole member of the Fair Value Pricing Committee.

 

(2) The management of, and investment decisions for, the AllianceBernstein International Growth Fund’s portfolio are made by the International Growth Portfolio Oversight Group, comprised of senior members of the Global Emerging Markets Growth Investment Team and the International Large Cap Growth Investment Team. Messrs. Eckersley, Levy, Scheetz and Toub are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

 

42     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

 

Board of Directors


 

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT1

The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and AllianceBernstein International Growth Fund, 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 a September 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 consideration of the Adviser’s settlement with the NYAG in December 2003, is

 

1 It should be noted that the information in the fee summary was completed on April 23, 2008 and presented to the Board of Directors on May 6-8, 2008.

 

2 Future references to the Fund do not include “AllianceBernstein.” In addition, on May 8, 2008, the Board approved the Adviser’s proposal to merge International Growth Fund (the surviving Fund), with AllianceBernstein International Research Growth Fund, Inc., scheduled to be completed later in 2008. References in the fee summary pertaining to performance and expense ratio rankings refer to the Class A shares of the Fund.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     43


 

based on a master schedule that contemplates eight categories of funds with almost all funds in each category having the same advisory fee schedule.3

 

Category  

Advisory Fee Based on % of

Average Daily Net Assets

 

Net Assets

02/29/08

($MIL)

  Fund
International  

75 bp on 1st $2.5 billion

65 bp on next $2.5 billion

60 bp on the balance

  $ 3,232.5   International Growth Fund, Inc.

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 $118,004 (0.01% of the Fund’s average daily net assets) for such services.

The Adviser has agreed to waive that portion of its management fees and/or reimburse the Fund for that portion of its total operating expenses to the degree necessary to limit the Fund’s expense ratios to the amounts set forth below for the Fund’s fiscal year. The waiver is terminable by the Adviser at the end of the Fund’s fiscal year upon at least 60 days written notice prior to the termination date of the undertaking. It should be noted that the Fund was operating below its expense caps during its most recent semi-annual period; accordingly, the expense limitation undertaking of the Fund was of no effect. In addition, set forth below are the gross expense ratios of the Fund for the most recent semi-annual period:

 

Fund   Expense Cap
Pursuant to
Expense
Limitation
Undertaking
   

Gross
Expense
Ratio4

(12/31/07)

    Fiscal
Year End
International Growth Fund, Inc.5   Advisor

Class A

Class B

Class C

Class R

Class K

Class I

  1.35

1.65

2.35

2.35

1.85

1.60

1.35

%

%

%

%

%

%

%

  0.90

1.20

1.94

1.91

1.48

1.25

0.85

%

%

%

%

%

%

%

  June 30

 

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

 

3 Most of the AllianceBernstein Mutual Funds, which the Adviser manages, were affected by the Adviser’s settlement with the NYAG.

 

4 Annualized.

 

5 The stated caps were made effective on May 16, 2005.

 

44     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Fund that are not provided to non-investment company clients and sub-advised investment companies 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. The Adviser also believes that it incurs substantial entrepreneurial risk when offering a new mutual fund since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be competitive and assets are acquired one account at a time. In addition, managing the cash flow of an investment company may be more difficult than managing 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 and legal and reputational risks are greater, it is worth considering information regarding the advisory fees charged to institutional accounts with a similar investment style as the Fund.6 In addition to the AllianceBernstein Institutional fee schedule, set forth below is what would have been the effective advisory fee of the Fund had the AllianceBernstein

 

6 The Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are negotiated vary based upon each client relationship.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     45


 

Institutional fee schedule been applicable to the Fund versus the Fund’s advisory fee based on February 29, 2008 net assets:

 

Fund  

Net Assets

02/29/08

($MIL)

 

AllianceBernstein (“AB”)
Institutional (“Inst.”)

Fee Schedule

  Effective
AB Inst.
Adv. Fee
 

Fund

Advisory
Fee

International Growth Fund, Inc.7   $3,232.5  

International Large Cap Growth

80 bp on 1st $25 million

60 bp on next $25 million

50 bp on next $50 million

40 bp on the balance

Minimum account size: $25m

  0.406%   0.727%

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 substantially similar investment style as the Fund.8 Also shown is what would have been the effective advisory fee of the Fund had the AVPS fee schedule been applicable to the Fund:

 

Fund   AVPS
Portfolio
  Fee Schedule  

Effective
AVPS

Adv. Fee

  Fund
Advisory
Fee
International Growth Fund, Inc.   International Growth Portfolio  

0.75% on first $2.5 billion

0.65% on next $2.5 billion

0.60% on the balance

  0.727%   0.727%

The Adviser represented that it does not sub-advise any registered investment company with a substantially similar investment style as the Fund.

 

II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.

Lipper, Inc. (“Lipper”), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services offered by other investment advisers. Lipper’s analysis included the Fund’s ranking with respect to the proposed

 

7 Fees shown are for the International Large Cap Growth Strategy, which is similar but more concentrated than the Fund’s strategy.

 

8 It should be noted that the AVPS portfolio was also affected by the settlement between the Adviser and the NYAG. As a result, the Fund has the same breakpoints in its advisory fee schedule as the AVPS portfolio.

 

46     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

management 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) comparability, expense components and attributes. An EG will typically consist of seven to twenty funds.

The Fund’s original EG had an insufficient number of peers in the view of the Senior Officer and the Adviser. Consequently, at the request of the Adviser and the Senior Officer, Lipper expanded the Fund’s EG to include peers that have similar but not the same Lipper investment classification/objective.

 

Fund   Contractual
Management
Fee (%)11
 

Lipper Exp.

Group

Median (%)

  Rank
International Growth Fund, Inc.12   0.725   0.851   3/11

However, because Lipper had expanded the EG of the Fund, under Lipper’s standard guidelines, the Lipper Expense Universe (“EU”) was also expanded to include the universe of those peers that had a similar but not the same Lipper investment classification/objective.13 A “normal” EU will include funds that have the same investment classification/objective as the subject Fund.14

 

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” would mean that the Fund had the lowest effective fee rate in the Lipper peer group.

 

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 would not reflect any advisory fee waivers or expense reimbursements made by the Adviser to the Fund for expense caps that would effectively reduce the actual management fee.

 

12 The Fund’s EG includes the Fund, eight other International Multi-Cap Growth Funds (“IMLG”) and two other International Large-Cap Growth Funds (“ILCG”).

 

13 It should be noted that the expansion of the Fund’s EU was not requested by the Adviser or the Senior Officer. They requested that only the EG be expanded.

 

14 Except for asset (size) comparability, Lipper uses the same criteria for selecting an EG peer when selecting an EU peer. Unlike the EG, the EU allows for the same adviser to be represented by more than just one fund.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     47


 

Fund  

Expense

Ratio (%)15

 

Lipper Exp.

Group

Median (%)

 

Lipper

Group

Rank

 

Lipper Exp.

Universe

Median (%)

 

Lipper
Universe

Rank

International Growth Fund, Inc.16   1.271   1.435   2/11   1.497   6/45

Based on this analysis, the Fund has a more favorable ranking on a total expense ratio basis than it does on a management fee basis.

 

III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE ADVISORY FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.

The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s profitability in connection with investment advisory services provided to the Fund. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and allocations utilized by both profitability systems. See Section IV for additional discussion.

 

IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.

The Fund’s profitability information, 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 increased during calendar year 2007, relative to 2006.

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, distribution and brokerage related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent deferred sales charges (“CDSC”) and brokerage commissions. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur.

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

 

15 The total expense ratios shown are for the Fund’s most recent fiscal year end Class A shares.

 

16 The Fund’s EU includes the Fund, EG and all other IMLG and ILCG funds, excluding outliers.

 

48     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

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 2007, ABI paid approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $24 million for distribution services and educational support (revenue sharing payments). For 2008, it is anticipated, ABI will pay approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $28 million.17 During the Fund’s most recently completed fiscal year, ABI received from the Fund $0, $8,019,209 and $202,725 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 omnibus basis. During the Fund’s most recently completed fiscal year, ABIS received $958,794 in fees from the Fund.18

The Fund may effect brokerage transactions through the Adviser’s affiliate, Sanford C. Bernstein & Co., LLC (“SCB & Co.”) and/or its U.K. affiliate, Sanford C. Bernstein Limited (“SCB Ltd.”), collectively “SCB,” and pay commissions for such transactions. The Adviser represented that SCB’s profitability from any future business conducted with the Fund would be comparable to the profitability of SCB’s dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks (“ECNs”) derived from trading for its clients. These credits and charges are not being passed onto any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for its clients. These soft dollar benefits reduce the Adviser’s cost of doing business and increase its profitability.

 

V. POSSIBLE ECONOMIES OF SCALE

The Adviser has indicated that economies of scale are being shared with shareholders through fee structures,19 subsidies and enhancement to services. Based

 

17 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.

 

18 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 occurs within the transfer agent account as there is a one day lag with regards to money movement from the shareholder’s account to the transfer agent’s account and then 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 $40,910 under the offset agreement between the Fund and ABIS.

 

19 Fee structures include fee reductions, pricing at scale and breakpoints in advisory fee schedules.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     49


 

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 make such investments in their business to provide services, there may be a sharing of economies of scale without a reduction in advisory fees.

An independent consultant, retained by the Senior Officer, provided the Board of Directors an update of the Deli20 study on advisory fees and various fund characteristics. The independent consultant first reiterated the results of his previous two dimensional comparison analysis (fund size and family size) with the Board of Directors. In this regard, it was noted that the advisory fees of the AllianceBernstein Mutual Funds were generally within the 25th-75th percentile range of their comparable peers.21 The independent consultant then discussed the results of the regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained by various factors, but substantially by fund AUM, family AUM, index fund indicator and investment style. The independent consultant observed that the actual advisory fees of the AllianceBernstein Mutual Funds were generally lower than the fees predicted by the study’s regression model.

The independent consultant also compared the advisory fees of the AllianceBernstein Mutual Funds to similar funds managed by 19 other large asset managers, regardless of the fund size and each Adviser’s proportion of mutual fund assets to non-mutual fund assets. The independent consultant observed that the advisory fees of certain AllianceBernstein Mutual Funds were higher than the medians of these select groups of funds.

 

VI. NATURE AND QUALITY OF THE ADVISER’S SERVICES, INCLUDING THE PERFORMANCE OF THE FUND

With assets under management of approximately $746 billion as of February 29, 2008, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Fund.

 

20 The Deli study was originally published in 2002 based on 1997 data.

 

21 The two dimensional analysis also showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.

 

50     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

The information prepared by Lipper shows the 1, 3, 5, and 10 year performance rankings of the Fund22 relative to its Lipper Performance Group (“PG”) and Lipper Performance Universe (“PU”)23 for the periods ended January 31, 2008.24

 

     Fund
Return (%)
  PG
Median (%)
  PU
Median (%)
  PG Rank   PU Rank

1 year

  4.47   4.13   3.13   4/9   18/41

3 year

  17.08   16.83   15.17   3/9   6/30

5 year

  23.93   22.11   20.73   1/8   1/27

10 year

  10.67   7.76   7.87   1/6   2/15

Set forth below are the 1, 3, 5, 10 year and since inception performance returns of the Fund (in bold)25 versus its benchmark.26 Fund and benchmark volatility and reward-to-variability ratio (“Sharpe Ratio”) information is also shown.27

 

     Periods Ending January 31, 2008
Annualized Performance
     1
Year
(%)
  3
Year
(%)
  5
Year
(%)
  10
Year
(%)
  Since
Inception
(%)
  Annualized   Risk
Period
(Year)
            Volatility
(%)
  Sharpe
(%)
 
International Growth Fund, Inc.   4.47   17.08   23.93   10.67   10.81   13.24   1.44   5
MSCI All Country World ex US
Index (Net)26
  4.97   16.56   22.39   N/A   N/A   12.10   1.46   5
MSCI World ex US Index (Net)26   1.68   14.51   20.77   7.52   7.30   N/A   N/A   5
Inception Date: June 2, 1994          

 

22 The performance rankings are for the Class A shares of the Fund. It should be noted that the performance returns of the Fund shown were provided by the Adviser. Lipper maintains its own database that includes the Fund’s performance returns. Rounding differences may cause the Adviser’s Fund returns to be one or two basis points different from Lipper’s own Fund returns. To maintain consistency, the performance returns of the Fund, as reported by the Adviser, are provided instead of Lipper.

 

23 The Fund’s PG and PU are not identical to the Fund’s EG and EU as the criteria for including or excluding a fund in a PG/PU is different from that of an EG/EU.

 

24 Note that the current Lipper investment classification/objective dictates the PG and PU throughout the life of the fund even if a fund had a different investment classification/objective at a different point in time.

 

25 The performance returns and risk measures shown in the table are for the Class A shares of the Fund.

 

26 The Adviser provided Fund and benchmark performance return information for periods through January 31, 2008. It should be noted that the “since inception” performance returns of the Fund’s benchmark goes back only through the nearest month-end after inception date. In contrast, the Fund’s since inception return goes back to the Fund’s actual inception date.

 

27 Fund and benchmark volatility and Sharpe Ratio information was obtained through Lipper LANA, a database maintained by Lipper. Volatility is a statistical measure of the tendency of a market price or yield to vary over time. A Sharpe Ratio is a risk adjusted measure of return that divides a fund’s return in excess of the riskless return by the fund’s standard deviation. A fund with a greater volatility would be seen as more risky than a fund with equivalent performance but lower volatility; for that reason, a greater return would be demanded for the more risky fund. A fund with a higher Sharpe Ratio would be viewed as better performing than a fund with a lower Sharpe Ratio.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     51


 

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 arm’s-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: June 5, 2008

 

 

52     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

ALLIANCEBERNSTEIN FAMILY OF FUNDS

 

Wealth Strategies Funds

Balanced Wealth Strategy

Wealth Appreciation Strategy

Wealth Preservation Strategy

Tax-Managed Balanced Wealth Strategy

Tax-Managed Wealth Appreciation Strategy

Tax-Managed Wealth Preservation Strategy

Blended Style Funds

U.S. Large Cap Portfolio

International Portfolio

Tax-Managed International Portfolio

Growth Funds

Domestic

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

Small/Mid Cap Growth Fund*

Global & International

Global Growth Fund*

Global Thematic Growth Fund*

Greater China ‘97 Fund

International 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

Diversified Yield Fund

Global Bond Fund

High Income Fund

Intermediate Bond Portfolio

Short Duration Portfolio

Municipal Bond Funds

 

National
National II*
Arizona
California
Florida
Massachusetts
Michigan

  

Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia

Intermediate Municipal Bond Funds

Intermediate California

Intermediate Diversified

Intermediate New York

Closed-End Funds

AllianceBernstein Global High Income Fund

AllianceBernstein Income Fund

AllianceBernstein National Municipal Income Fund

ACM Managed Dollar Income Fund

Alliance California Municipal Income Fund

Alliance New York Municipal Income Fund

The Spain Fund


Retirement Strategies Funds

 

2000 Retirement Strategy

 

2020 Retirement Strategy

 

2040 Retirement Strategy

2005 Retirement Strategy

 

2025 Retirement Strategy

 

2045 Retirement Strategy

2010 Retirement Strategy

 

2030 Retirement Strategy

 

2050 Retirement Strategy

2015 Retirement Strategy

 

2035 Retirement Strategy

 

2055 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 November 3, 2008, Small/Mid Cap Growth Fund was named Mid-Cap Growth Fund, Global Growth Fund was named Global Research Growth Fund, and Global Thematic Growth Fund was named Global Technology Fund. Prior to December 1, 2008, National II was named Insured National.

 

** An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     53

 

AllianceBernstein Family of Funds


NOTES

 

54     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


NOTES

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     55


NOTES

 

56     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


NOTES

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     57


NOTES

 

58     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


NOTES

 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND     59


NOTES

 

60     ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND


 

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND

1345 Avenue of the Americas

New York, NY 10105

800.221.5672

LOGO

 

 

IG-0152-1208   LOGO


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.

 

3


ITEM 11.   CONTROLS AND PROCEDURES.

 

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

 

(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 12.   EXHIBITS.

 

The following exhibits are attached to this Form N-CSR:

 

EXHIBIT NO.


    

DESCRIPTION OF EXHIBIT


12(b)(1)      Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12(b)(2)      Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12(c)      Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

4


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

(Registrant): ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND, INC.
By: /s/   Robert M. Keith

              Robert M. Keith

              President

 

Date:  February 27, 2009

 

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/   Robert M. Keith

              Robert M. Keith

              President

 

Date:  February 27, 2009

 

By: /s/   Joseph J. Mantineo

              Joseph J. Mantineo

              Treasurer and Chief Financial Officer

 

Date:  February 27, 2009

 

00250.0073 #462870v4

 

5

EX-99.CERT 2 dex99cert.htm CERTIFICATIONS PURSUANT TO SECTION 302 Certifications Pursuant to Section 302

Exhibit 12(b)(1)

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Robert M. Keith, President of AllianceBernstein International Growth Fund, Inc., certify that:

 

1. I have reviewed this report on Form N-CSR of AllianceBernstein International Growth Fund, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

  a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation ; and

 

  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 27, 2009

 

        /s/  Robert M. Keith        
   

          Robert M. Keith

          President

 

2


Exhibit 12(b)(2)

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

 

I, Joseph J. Mantineo, Treasurer and Chief Financial Officer of AllianceBernstein International Growth Fund, Inc., certify that:

 

1. I have reviewed this report on Form N-CSR of AllianceBernstein International Growth Fund, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

  a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation ; and

 

  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information ; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 27, 2009

 

        /s/  Joseph J. Mantineo        
   

          Joseph J. Mantineo

          Treasurer and Chief Financial Officer

 

00250.0073 #410771v2

EX-99.906 CERT 3 dex99906cert.htm CERTIFICATIONS PURSUANT TO SECTION 906 Certifications Pursuant to Section 906

EXHIBIT 12(c)

 

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT

 

Pursuant to 18 U.S.C. 1350, each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of AllianceBernstein International Growth Fund, Inc. (the “Registrant”), hereby certifies that the Registrant’s report on Form N-CSR for the period ended December 31, 2008 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: February 27, 2009

 

By:       /s/  Robert M. Keith        
   

          Robert M. Keith

          President

 

By:       /s/  Joseph J. Mantineo        
   

          Joseph J. Mantineo

          Treasurer and Chief Financial Officer

 

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document.

 

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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