ALLIANCE REAL ESTATE INVESTMENT FUND INC, 497, 1998-02-06

ALLIANCE REAL ESTATE INVESTMENT FUND INC
497, 1998-02-06

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<PAGE>

This is filed pursuant to Rule 497(e).
File Nos. 333-08153 and 811-07707.

<PAGE>

THE ALLIANCE
- --------------------------------------------------------------------------------
STOCK FUNDS
- --------------------------------------------------------------------------------

c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618

Prospectus and Application

February 2, 1998

Domestic Stock Funds Global Stock Funds

- -The Alliance Fund -Alliance International Fund
- -Alliance Growth Fund -Alliance Worldwide Privatization Fund
- -Alliance Premier Growth Fund -Alliance New Europe Fund
- -Alliance Technology Fund -Alliance All-Asia Investment Fund
- -Alliance Quasar Fund -Alliance Global Small Cap Fund
-Alliance Global Environment Fund

Total Return Funds

-Alliance Strategic Balanced Fund
-Alliance Balanced Shares
-Alliance Income Builder Fund
-Alliance Utility Income Fund
-Alliance Growth and Income Fund
-Alliance Real Estate Investment Fund

<TABLE>
<CAPTION>
Table of Contents Page
<S> <C>
The Funds at a Glance ..................................................... 2
Expense Information ....................................................... 4
Financial Highlights ...................................................... 7
Glossary .................................................................. 19
Description of the Funds .................................................. 20
Investment Objectives and Policies ..................................... 20
Additional Investment Practices ........................................ 31
Certain Fundamental Investment Policies ................................ 38
Risk Considerations .................................................... 41
Purchase and Sale of Shares ............................................... 46
Management of the Funds ................................................... 49
Dividends, Distributions and Taxes ........................................ 53
General Information ....................................................... 55
</TABLE>

Adviser
Alliance Capital Management L.P.
1345 Avenue Of The Americas
New York, New York 10105

The Alliance Stock Funds provide a broad selection of investment alternatives to
investors seeking capital growth or high total return. The Domestic Stock Funds
invest mainly in the United States equity markets and the Global Stock Funds
diversify their investments among equity markets around the world, while the
Total Return Funds invest in both equity and fixed-income securities.

Each fund or portfolio (each a "Fund") is, or is a series of, an open-end
management investment company. This Prospectus sets forth concisely the
information which a prospective investor should know about each Fund before
investing. A "Statement of Additional Information" for each Fund which provides
further information regarding certain matters discussed in this Prospectus and
other matters which may be of interest to some investors has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. For
a free copy, call or write Alliance Fund Services, Inc. at the indicated address
or call the "For Literature" telephone number shown above.

Each Fund offers three classes of shares through this Prospectus. These shares
may be purchased, at the investor's choice, at a price equal to their net asset
value (i) plus an initial sales charge imposed at the time of purchase (the
"Class A shares"), (ii) with a contingent deferred sales charge imposed on most
redemptions made within four years of purchase (the "Class B shares"), or (iii)
without any initial or contingent deferred sales charge, as long as the shares
are held for one year or more (the "Class C shares"). See "Purchase and Sale of
Shares."

An investment in these securities is not a deposit or obligation of, or
guaranteed or endorsed by, any bank and is not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency.

Investors are advised to read this Prospectus carefully and to retain it for
future reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

[LOGO]Alliance(R)
Investing without the Mystery.(SM)

(R)/SM These are registered marks used under licenses from the owner, Alliance
Capital Management L.P.
<PAGE>

The Funds At A Glance

The following summary is qualified in its entirety by the more detailed
information contained in this Prospectus.

The Funds' Investment Adviser Is . . .

Alliance Capital Management L.P. ("Alliance"), a global investment manager
providing diversified services to institutions and individuals through a broad
line of investments including more than 100 mutual funds. Since 1971, Alliance
has earned a reputation as a leader in the investment world with over $217
billion in assets under management as of September 30, 1997. Alliance provides
investment management services to employee benefit plans for 28 of the FORTUNE
100 companies.

Domestic Stock Funds

Alliance Fund

Seeks . . . Long-term growth of capital and income primarily through investment
in common stocks.

Invests Principally in . . . A diversified portfolio of equity securities that,
in the judgment of Alliance, have the potential to achieve capital appreciation.

Growth Fund

Seeks . . . Long-term growth of capital by investing primarily in common stocks
and other equity securities.

Invests Principally in . . . A diversified portfolio of equity securities of
companies with a favorable outlook for earnings and whose rate of growth is
expected to exceed that of the United States economy over time.

Premier Growth Fund

Seeks . . . Long-term growth of capital by investing in the equity securities of
a limited number of large, carefully selected, high-quality American companies
from a relatively small universe of intensively researched companies.

Invests Principally in . . . A diversified portfolio of equity securities that,
in the judgment of Alliance, are likely to achieve superior earnings growth.
Normally, approximately 40 companies will be represented in the Fund's
investment portfolio. The Fund's investments in 25 of these companies most
highly regarded at any point in time by Alliance will usually constitute
approximately 70% of the Fund's net assets.

Technology Fund

Seeks . . . Growth of capital through investment in companies expected to
benefit from advances in technology.

Invests Principally in . . . A diversified portfolio of securities of companies
which use technology extensively in the development of new or improved products
or processes.

Quasar Fund

Seeks . . . Growth of capital by pursuing aggressive investment policies.

Invests Principally in . . . A diversified portfolio of equity securities of any
company and industry and in any type of security which is believed to offer
possibilities for capital appreciation.

Global Stock Funds

International Fund

Seeks . . . A total return on its assets from long-term growth of capital and
from income.

Invests Principally in . . . A diversified portfolio of marketable securities of
established non-United States companies, companies participating in foreign
economies with prospects for growth, and foreign government securities.

Worldwide Privatization Fund

Seeks . . . Long-term capital appreciation.

Invests Principally in . . . A non-diversified portfolio of equity securities
issued by enterprises that are undergoing, or have undergone, privatization. The
balance of the Fund's investment portfolio will include securities of companies
that are believed by Alliance to be beneficiaries of the privatization process.

New Europe Fund

Seeks . . . Long-term capital appreciation through investment primarily in the
equity securities of companies based in Europe.

Invests Principally in . . . A non-diversified portfolio of equity securities of
European companies.

All-Asia Investment Fund

Seeks . . . Long-term capital appreciation.

Invests Principally in . . . A non-diversified portfolio of equity securities of
Asian/Pacific companies.

Global Small Cap Fund

Seeks . . . Long-term growth of capital.

Invests Principally in . . . A diversified global portfolio of the equity
securities of small capitalization companies.

Global Environment Fund

Seeks . . . Long-term capital appreciation.

Invests Principally in . . . A non-diversified portfolio of equity securities of
companies expected to benefit from advances or improvements in products,
processes or services intended to foster the protection of the environment.

Total Return Funds

Strategic Balanced Fund

Seeks . . . A high long-term total return by investing in a combination of
equity and debt securities.

2
<PAGE>

Invests Principally in . . . A diversified portfolio of dividend-paying common
stocks and fixed-income securities, and also in equity-type securities such as
warrants, preferred stocks and convertible debt instruments.

Balanced Shares

Seeks . . . A high return through a combination of current income and capital
appreciation.

Invests Principally in . . . A diversified portfolio of equity and fixed-income
securities such as common and preferred stocks, U.S. Government and agency
obligations, bonds and senior debt securities.

Income Builder Fund

Seeks . . . Both an attractive level of current income and long-term growth of
income and capital.

Invests Principally in . . . A non-diversified portfolio of fixed-income
securities and dividend-paying common stocks. Alliance currently expects to
continue to maintain approximately 60% of the Fund's net assets in fixed-income
securities and 40% in equity securities.

Utility Income Fund

Seeks . . . Current income and capital appreciation through investment in the
utilities industry.

Invests Principally in . . . A diversified portfolio of equity securities, such
as common stocks, securities convertible into common stocks and rights and
warrants to subscribe for purchase of common stocks, and in fixed-income
securities such as bonds and preferred stocks.

Growth and Income Fund

Seeks . . . Income and appreciation through investment in dividend-paying common
stocks of quality companies.

Invests Principally in . . . A diversified portfolio of dividend-paying common
stocks of good quality, and, under certain market conditions, other types of
securities, including bonds, convertible bonds and preferred stocks.

Real Estate Investment Fund

Seeks . . . Total return on its assets from long-term growth of capital and from
income.

Invests Principally in . . . A diversified portfolio of equity securities of
issuers that are primarily engaged in or related to the real estate industry.

Distributions . . .

Balanced Shares, Income Builder Fund, Utility Income Fund, Growth and Income
Fund and Real Estate Investment Fund intend to make distributions quarterly to
shareholders. These distributions may include ordinary income and capital gain
(each of which is taxable) and a return of capital (which is generally
non-taxable). See "Dividends, Distributions and Taxes."

A Word About Risk . . .

The price of the shares of the Alliance Stock Funds will fluctuate as the daily
prices of the individual securities in which they invest fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost. With
respect to those Funds permitted to invest in foreign currency denominated
securities, these fluctuations may be magnified by changes in foreign exchange
rates. Investment in the Global Stock Funds involves risks not associated with
funds that invest primarily in securities of U.S. issuers. While the Funds
invest principally in common stocks and other equity securities, in order to
achieve their investment objectives the Funds may at times use certain types of
investment derivatives such as options, futures, forwards and swaps. These
involve risks different from, and, in certain cases, greater than, the risks
presented by more traditional investments. An investment in the Real Estate
Investment Fund is subject to certain risks associated with the direct ownership
of real estate in general, including possible declines in the value of real
estate, general and local economic conditions, environmental problems and
changes in interest rates. These risks are fully discussed in this Prospectus.

Getting Started . . .

Shares of the Funds are available through your financial representative and most
banks, insurance companies and brokerage firms nationwide. Shares can be
purchased for a minimum initial investment of $250, and subsequent investments
can be made for as little as $50. For detailed information about purchasing and
selling shares, see "Purchase and Sale of Shares." In addition, the Funds offer
several time and money saving services to investors. Be sure to ask your
financial representative about:

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AUTOMATIC REINVESTMENT
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AUTOMATIC INVESTMENT PROGRAM
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RETIREMENT PLANS
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SHAREHOLDER COMMUNICATIONS
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DIVIDEND DIRECTION PLANS
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AUTO EXCHANGE
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SYSTEMATIC WITHDRAWALS
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A CHOICE OF PURCHASE PLANS
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TELEPHONE TRANSACTIONS
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24-HOUR INFORMATION
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[LOGO]Alliance(R)
Investing without the Mystery.(SM)

(R)/SM These are registered marks used under licenses from the owner, Alliance
Capital Management L.P.

3
<PAGE>

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EXPENSE INFORMATION
- --------------------------------------------------------------------------------

Shareholder Transaction Expenses are one of several factors to consider when you
invest in a Fund. The following table summarizes your maximum transaction costs
from investing in a Fund and annual expenses for each class of shares of each
Fund. For each Fund, the "Examples" to the right of the table below show the
cumulative expenses attributable to a hypothetical $1,000 investment in each
class for the periods specified.

<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
-------------- -------------- --------------
<S> <C> <C> <C>
Maximum sales charge imposed on purchases (as a percentage of
offering price) ................................................. 4.25%(a) None None

Sales charge imposed on dividend reinvestments .................. None None None

Deferred sales charge (as a
percentage of original purchase
price or redemption proceeds,
whichever is lower) ............................................. None(a) 4.0% 1.0%
during the during the
first year, first year,
decreasing 1.0% 0% thereafter
annually to 0%
after the
fourth year (b)

Exchange fee .................................................... None None None
</TABLE>

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(a) Reduced for larger purchases. Purchases of $1,000,000 or more are not
subject to an initial sales charge but may be subject to a 1% deferred
sales charge on redemptions within one year of purchase. See "Purchase and
Sale of Shares--How to Buy Shares" -page 46.

(b) Class B shares of each Fund other than Premier Growth Fund automatically
convert to Class A shares after eight years and the Class B shares of
Premier Growth Fund convert to Class A shares after six years. See
"Purchase and Sale of Shares--How to Buy Shares" -page 46.

<TABLE>
<CAPTION>
Operating Expenses Examples
- --------------------------------------------------------- -------------------------------------------------------------
Alliance Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .68% .68% .68% After 1 year $ 53 $ 59 $ 19 $ 29 $ 19
12b-1 fees .20% 1.00% 1.00% After 3 years $ 74 $ 78 $ 58 $ 58 $ 58
Other expenses (a) .15% .17% .15% After 5 years $ 97 $100 $100 $ 99 $ 99
---- ---- ---- After 10 years $163 $195(b) $195(b) $215 $215
Total fund
operating expenses 1.03% 1.85% 1.83%
==== ==== ====

<CAPTION>
Growth Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .74% .74% .74% After 1 year $ 55 $ 60 $ 20 $ 30 $ 20
12b-1 fees .30% 1.00% 1.00% After 3 years $ 81 $ 82 $ 62 $ 62 $ 62
Other expenses (a) .22% .22% .23% After 5 years $109 $106 $106 $106 $106
---- ---- ---- After 10 years $188 $210(b) $210(b) $230 $230
Total fund
operating expenses 1.26% 1.96% 1.97%
==== ==== ====

<CAPTION>
Premier Growth Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.00% 1.00% 1.00% After 1 year $ 58 $ 63 $ 23 $ 33 $ 23
12b-1 fees .33% 1.00% 1.00% After 3 years $ 90 $ 90 $ 70 $ 70 $ 70
Other expenses (a) .24% .25% .24% After 5 years $124 $120 $120 $120 $120
---- ---- ---- After 10 years $221 $241(b) $241(b) $257 $257
Total fund
operating expenses 1.57% 2.25% 2.24%
==== ==== ====

<CAPTION>
Technology Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees (g) 1.04% 1.04% 1.04% After 1 year $ 59 $ 64 $ 24 $ 34 $ 24
12b-1 fees .30% 1.00% 1.00% After 3 years $ 93 $ 94 $ 74 $ 74 $ 74
Other expenses (a) .33% .34% .34% After 5 years $129 $127 $127 $127 $127
---- ---- ---- After 10 years $232 $254(b) $254(b) $272 $272
Total fund
operating expenses 1.67% 2.38% 2.38%
==== ==== ====
</TABLE>

- --------------------------------------------------------------------------------
Please refer to the footnotes on page 6.

4
<PAGE>

<TABLE>
<CAPTION>
Operating Expenses Examples
- --------------------------------------------------------- -------------------------------------------------------------
Quasar Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees (g) 1.16% 1.16% 1.16% After 1 year $ 59 $ 65 $ 25 $ 35 $ 25
12b-1 fees .22% 1.00% 1.00% After 3 years $ 93 $ 98 $ 78 $ 78 $ 78
Other expenses (a) .29% .35% .34% After 5 years $129 $134 $134 $133 $133
---- ---- ---- After 10 years $232 $264(b) $264(b) $284 $284
Total fund
operating expenses 1.67% 2.51% 2.50%
==== ==== ====

<CAPTION>
International Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees
(after waiver) (c) .85% .85% .85% After 1 year $ 58 $ 65 $ 25 $ 35 $ 25
12b-1 fees .17% 1.00% 1.00% After 3 years $ 90 $ 96 $ 76 $ 75 $ 75
Other expenses (a) .56% .58% .57% After 5 years $125 $130 $130 $129 $129
---- ---- ---- After 10 years $222 $256(b) $256(b) $276 $276
Total fund
operating expenses (d) 1.58% 2.43% 2.42%
==== ==== ====

<CAPTION>
Worldwide Privatization Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.00% 1.00% 1.00% After 1 year $ 59 $ 65 $ 25 $ 35 $ 25
12b-1 fees .30% 1.00% 1.00% After 3 years $ 94 $ 96 $ 76 $ 75 $ 75
Other expenses (a) .42% .43% .42% After 5 years $132 $130 $130 $129 $129
---- ---- ---- After 10 years $237 $259(b) $259(b) $276 $276
Total fund
operating expenses 1.72% 2.43% 2.42%
==== ==== ====

<CAPTION>
New Europe Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.06% 1.06% 1.06% After 1 year $ 62 $ 68 $ 28 $ 38 $ 28
12b-1 fees .30% 1.00% 1.00% After 3 years $104 $105 $ 85 $ 85 $ 85
Other expenses (a) .69% .69% .68% After 5 years $148 $145 $145 $145 $145
---- ---- ---- After 10 years $270 $291(b) $291(b) $307 $307
Total fund
operating expenses 2.05% 2.75% 2.74%
==== ==== ====

<CAPTION>
All-Asia Investment Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees After 1 year $ 63 $ 68 $ 28 $ 38 $ 28
(after waiver) (c) .65% .65% .65% After 3 years $104 $106 $ 86 $ 86 $ 86
12b-1 fees .30% 1.00% 1.00% After 5 years $149 $146 $146 $146 $146
Other expenses After 10 years $271 $293(b) $293(b) $310 $310
Administration fees
(after waiver) (f) .00% .00% .00%
Other operating
expenses (a) 1.11% 1.12% 1.12%
---- ---- ----
Total fund
operating expenses (d) 2.06% 2.77% 2.77%
==== ==== ====

<CAPTION>
Global Small Cap Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.00% 1.00% 1.00% After 1 year $ 66 $ 71 $ 31 $ 41 $ 31
12b-1 fees .30% 1.00% 1.00% After 3 years $114 $116 $ 96 $ 96 $ 96
Other expenses (a) 1.11% 1.11% 1.10% After 5 years $166 $163 $163 $163 $163
---- ---- ---- After 10 years $305 $326(b) $326(b) $341 $341
Total fund
operating expenses 2.41% 3.11% 3.10%
==== ==== ====

<CAPTION>
Global Environment Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.10% 1.10% 1.10% After 1 year $ 69 $ 74 $ 34 $ 44 $ 34
12b-1 fees .30% 1.00% 1.00% After 3 years $122 $123 $103 $104 $104
Other expenses (a) 1.29% 1.26% 1.29% After 5 years $179 $175 $175 $176 $176
---- ---- ---- After 10 years $332 $350(b) $350(b) $368 $368
Total fund
operating expenses 2.69% 3.36% 3.39%
==== ==== ====
</TABLE>

- --------------------------------------------------------------------------------
Please refer to the footnotes on page 6.

5
<PAGE>

<TABLE>
<CAPTION>
Operating Expenses Examples
- --------------------------------------------------------- -------------------------------------------------------------
Strategic Balanced Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees
(after waiver) (c) .09% .09% .09% After 1 year $ 56 $ 62 $ 22 $ 32 $ 22
12b-1 fees .30% 1.00% 1.00% After 3 years $ 85 $ 86 $ 66 $ 66 $ 66
Other expenses (a) 1.02% 1.03% 1.03% After 5 years $116 $114 $114 $114 $114
---- ---- ---- After 10 years $204 $227(b) $227(b) $245 $245
Total fund
operating expenses (d) 1.41% 2.12% 2.12%
==== ==== ====

<CAPTION>
Balanced Shares Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .63% .63% .63% After 1 year $ 57 $ 63 $ 23 $ 33 $ 23
12b-1 fees .24% 1.00% 1.00% After 3 years $ 87 $ 90 $ 70 $ 70 $ 70
Other expenses (a) .60% .62% .60% After 5 years $119 $120 $120 $119 $119
---- ---- ---- After 10 years $211 $239(b) $239(b) $256 $256
Total fund
operating expenses 1.47% 2.25% 2.23%
==== ==== ====

<CAPTION>
Income Builder Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .75% .75% .75% After 1 year $ 63 $ 68 $ 28 $ 38 $ 28
12b-1 fees .30% 1.00% 1.00% After 3 years $105 $107 $ 87 $ 87 $ 87
Other expenses (a) 1.04% 1.05% 1.05% After 5 years $150 $148 $148 $148 $148
---- ---- ---- After 10 years $274 $296(b) $296(b) $313 $313
Total fund
operating expenses 2.09% 2.80% 2.80%
==== ==== ====

<CAPTION>
Utility Income Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 0.00% 0.00% 0.00% After 1 year $ 57 $ 62 $ 22 $ 32 $ 22
(after waiver) (c) After 3 years $ 88 $ 89 $ 69 $ 69 $ 69
12b-1 fees .30% 1.00% 1.00% After 5 years $121 $118 $118 $118 $118
Other expenses (a) 1.20% 1.20% 1.20% After 10 years $214 $236(b) $236(b) $253 $253
---- ---- ----
Total fund
operating expenses (e) 1.50% 2.20% 2.20%
==== ==== ====

<CAPTION>
Growth and Income Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .49% .49% .49% After 1 year $ 51 $ 57 $ 17 $ 27 $ 17
12b-1 fees .22% 1.00% 1.00% After 3 years $ 71 $ 74 $ 54 $ 54 $ 54
Other expenses (a) .21% .23% .22% After 5 years $ 91 $ 93 $ 93 $ 93 $ 93
---- ---- ---- After 10 years $151 $182(b) $182(b) $202 $202
Total fund
operating expenses .92% 1.72% 1.71%
==== ==== ====

<CAPTION>
Real Estate Investment Fund Class A Class B Class C Class A Class B+ Class B++ Class C+ Class C++
------- ------- ------- ---------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .90% .90% .90% After 1 year $ 60 $ 65 $ 25 $ 35 $ 25
12b-1 fees .30% 1.00% 1.00% After 3 years $ 96 $ 96 $ 76 $ 76 $ 76
Other expenses (a) .57% .54% .53% After 5 years $134 $130 $130 $130 $130
---- ---- ---- After 10 years $242 $261(b) $261(b) $277 $277
Total fund
operating expenses 1.77% 2.44% 2.43%
==== ==== ====
</TABLE>

- --------------------------------------------------------------------------------
+ Assumes redemption at end of period.
++ Assumes no redemption at end of period.
(a) These expenses include a transfer agency fee payable to Alliance Fund
Services, Inc., an affiliate of Alliance. The expenses shown do not reflect
the application of credits that reduce Fund expenses.
(b) Assumes Class B shares converted to Class A shares after eight years, or
six years with respect to Premier Growth Fund.
(c) Net of voluntary fee waiver. In the absence of such waiver, management fees
would be .75% for Strategic Balanced Fund and Utility Income Fund, 1.00%
for All-Asia Investment Fund and 1.01% for International Fund.
International Fund's fee, absent the voluntary fee waiver, is calculated
based on average daily net assets. Maximum contractual rate, based on
quarter-end net assets, is 1.00%.

(d) Net of voluntary fee waivers and expense reimbursements. Absent such
waivers and reimbursements, total fund operating expenses for Strategic
Balanced Fund would have been 2.06%, 2.76% and 2.76%, respectively, for
Class A, Class B and Class C shares, total fund operating expenses for
All-Asia Investment Fund would have been 2.56%, 3.27% and 3.27%,
respectively, for Class A, Class B and Class C shares annualized and total
fund operating expenses for International Fund would have been 1.74%, 2.59%
and 2.58%, respectively, for Class A, Class B and Class C annualized.
(e) Net of expense reimbursements. Absent expense reimbursements, total fund
operating expenses for Utility Income Fund would be 3.55%, 4.28%, 4.28%,
respectively, for Class A, Class B and Class C shares.
(f) Net of voluntary fee waiver. Absent such fee waiver, administration fees
would have been .15% for the Fund's Class A, Class B and Class C shares.
Reflects the fees payable by All-Asia Investment Fund to Alliance pursuant
to an adminstration agreement.
(g) Calculated based on average daily net assets. Maximum contractual rate,
based on quarter-end net assets, is 1.00% for Quasar Fund and Technology
Fund.

6
<PAGE>

service fee not exceeding .25% of the aggregate average daily net assets of the
Fund attributable to the class and an asset-based sales charge equal to the
remaining portion of the Rule 12b-1 fee. "Management fees" for International
Fund and All-Asia Investment Fund and "Administration fees" for All-Asia
Investment Fund have been restated to reflect current voluntary fee waivers.
"Other Expenses" for Global Environment Fund are based on estimated amounts for
its current fiscal year. The Examples set forth above assume reinvestment of all
dividends and distributions and utilize a 5% annual rate of return as mandated
by Commission regulations. The Examples should not be considered representative
of past or future expenses; actual expenses may be greater or less than those
shown.

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The tables on the following pages present, for each Fund, per share income and
capital changes for a share outstanding throughout each period indicated. Except
as otherwise indicated, the information in the tables for Alliance Fund, Growth
Fund, Premier Growth Fund, Strategic Balanced Fund, Balanced Shares, Utility
Income Fund, Worldwide Privatization Fund and Growth and Income Fund has been
audited by Price Waterhouse LLP, the independent accountants for each Fund, and
for All-Asia Investment Fund, Technology Fund, Quasar Fund, International Fund,
New Europe Fund, Global Small Cap Fund, Global Environment Fund, Real Estate
Investment Fund and Income Builder Fund by Ernst & Young LLP, the independent
auditors for each Fund. A report of Price Waterhouse LLP or Ernst & Young LLP,
as the case may be, on the information with respect to each Fund, appears in the
Fund's Statement of Additional Information. The following information for each
Fund should be read in conjunction with the financial statements and related
notes which are included in the Fund's Statement of Additional Information.

Further information about a Fund's performance is contained in the Fund's annual
report to shareholders, which may be obtained without charge by contacting
Alliance Fund Services, Inc. at the address or the "For Literature" telephone
number shown on the cover of this Prospectus.

7
<PAGE>

<TABLE>
<CAPTION>
Net Net Net
Asset Realized and Increase
Value Unrealized (Decrease) In Dividends From Distributions
Beginning Of Net Investment Gain (Loss) On Net Asset Value Net Investment From Net
Fiscal Year or Period Period Income (Loss) Investments From Operations Income Realized Gains
------------------- ------------ -------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Fund
Class A
Year ended 11/30/97 ............ $7.71 $(.02)(b) $2.09 $2.07 $(.02) $(1.06)
Year ended 11/30/96 ............ 7.72 .02 1.06 1.08 (.02) (1.07)
Year ended 11/30/95 ............ 6.63 .02 2.08 2.10 (.01) (1.00)
1/1/94 to 11/30/94** ........... 6.85 .01 (.23) (.22) 0.00 0.00
Year ended 12/31/93 ............ 6.68 .02 .93 .95 (.02) (.76)
Year ended 12/31/92 ............ 6.29 .05 .87 .92 (.05) (.48)
Year ended 12/31/91 ............ 5.22 .07 1.70 1.77 (.07) (.63)
Year ended 12/31/90 ............ 6.87 .09 (.32) (.23) (.18) (1.24)
Year ended 12/31/89 ............ 5.60 .12 1.19 1.31 (.04) 0.00
Year ended 12/31/88 ............ 5.15 .08 .80 .88 (.08) (.35)
Class B
Year ended 11/30/97 ............ $7.40 $(.08)(b) $1.99 $1.91 $0.00 $(1.06)
Year ended 11/30/96 ............ 7.49 (.01) .99 .98 0.00 (1.07)
Year ended 11/30/95 ............ 6.50 (.03) 2.02 1.99 0.00 (1.00)
1/1/94 to 11/30/94** ........... 6.76 (.03) (.23) (.26) 0.00 0.00
Year ended 12/31/93 ............ 6.64 (.03) .91 .88 0.00 (.76)
Year ended 12/31/92 ............ 6.27 (.01)(b) .87 .86 (.01) (.48)
3/4/91++ to 12/31/91 ........... 6.14 .01(b) .79 .80 (.04) (.63)
Class C
Year ended 11/30/97 ............ $7.41 $(.08)(b) $1.99 $1.91 $0.00 $(1.06)
Year ended 11/30/96 ............ 7.50 (.02) 1.00 .98 0.00 (1.07)
Year ended 11/30/95 ............ 6.50 (.03) 2.03 2.00 0.00 (1.00)
1/1/94 to 11/30/94** ........... 6.77 (.03) (.24) (.27) 0.00 0.00
5/3/93++ to 12/31/93 ........... 6.67 (.02) .88 .86 0.00 (.76)
Growth Fund (i)
Class A
Year ended 10/31/97 ............ $34.91 $(.10)(b) $10.17 $10.07 $0.00 $(1.03)
Year ended 10/31/96 ............ 29.48 .05 6.20 6.25 (.19) (.63)
Year ended 10/31/95 ............ 25.08 .12 4.80 4.92 (.11) (.41)
5/1/94 to 10/31/94** ........... 23.89 .09 1.10 1.19 0.00 0.00
Year ended 4/30/94 ............. 22.67 (.01)(c) 3.55 3.54 0.00 (2.32)
Year ended 4/30/93 ............. 20.31 .05(c) 3.68 3.73 (.14) (1.23)
Year ended 4/30/92 ............. 17.94 .29(c) 3.95 4.24 (.26) (1.61)
9/4/90++ to 4/30/91 ............ 13.61 .17(c) 4.22 4.39 (.06) 0.00
Class B
Year ended 10/31/97 ............ $29.21 $(.31)(b) $8.44 $8.13 $0.00 $(1.03)
Year ended 10/31/96 ............ 24.78 (.12) 5.18 5.06 0.00 (.63)
Year ended 10/31/95 ............ 21.21 (.02) 4.01 3.99 (.01) (.41)
5/1/94 to 10/31/94** ........... 20.27 .01 .93 .94 0.00 0.00
Year ended 4/30/94 ............. 19.68 (.07)(c) 2.98 2.91 0.00 (2.32)
Year ended 4/30/93 ............. 18.16 (.06)(c) 3.23 3.17 (.03) (1.62)
Year ended 4/30/92 ............. 16.88 .17(c) 3.67 3.84 (.21) (2.35)
Year ended 4/30/91 ............. 14.38 .08(c) 3.22 3.30 (.09) (.71)
Year ended 4/30/90 ............. 14.13 .01(b)(c) 1.26 1.27 0.00 (1.02)
Year ended 4/30/89 ............. 12.76 (.01)(c) 2.44 2.43 0.00 (1.06)
10/23/87+ to 4/30/88 ........... 10.00 (.02)(c) 2.78 2.76 0.00 0.00
Class C
Year ended 10/31/97 ............ $29.22 $(.31)(b) $8.45 $8.14 $0.00 $(1.03)
Year ended 10/31/96 ............ 24.79 (.12) 5.18 5.06 0.00 (.63)
Year ended 10/31/95 ............ 21.22 (.03) 4.02 3.99 (.01) (.41)
5/1/94 to 10/31/94** ........... 20.28 .01 .93 .94 0.00 0.00
8/2/93++ to 4/30/94 ............ 21.47 (.02)(c) 1.15 1.13 0.00 (2.32)
Premier Growth Fund
Class A
Year ended 11/30/97 ............ $17.98 $(.10)(b) $5.20 $5.10 $0.00 $(1.08)
Year ended 11/30/96 ............ 16.09 (.04)(b) 3.20 3.16 0.00 (1.27)
Year ended 11/30/95 ............ 11.41 (.03) 5.38 5.35 0.00 (.67)
Year ended 11/30/94 ............ 11.78 (.09) (.28) (.37) 0.00 0.00
Year ended 11/30/93 ............ 10.79 (.05) 1.05 1.00 (.01) 0.00
9/28/92+ to 11/30/92 ........... 10.00 .01 .78 .79 0.00 0.00
Class B
Year ended 11/30/97 ............ $17.52 $(.23)(b) $5.05 $4.82 $0.00 $(1.08)
Year ended 11/30/96 ............ 15.81 (.14)(b) 3.12 2.98 0.00 (1.27)
Year ended 11/30/95 ............ 11.29 (.11) 5.30 5.19 0.00 (.67)
Year ended 11/30/94 ............ 11.72 (.15) (.28) (.43) 0.00 0.00
Year ended 11/30/93 ............ 10.79 (.10) 1.03 .93 0.00 0.00
9/28/92+ to 11/30/92 ........... 10.00 0.00 .79 .79 0.00 0.00
Class C
Year ended 11/30/97 ............ $17.54 $(.24)(b) $5.07 $4.83 $0.00 $(1.08)
Year ended 11/30/96 ............ 15.82 (.14)(b) 3.13 2.99 0.00 (1.27)
Year ended 11/30/95 ............ 11.30 (.08) 5.27 5.19 0.00 (.67)
Year ended 11/30/94 ............ 11.72 (.09) (.33) (.42) 0.00 0.00
5/3/93++ to 11/30/93 ........... 10.48 (.05) 1.29 1.24 0.00 0.00
</TABLE>
- --------------------------------------------------------------------------------
Please refer to the footnotes on page 18.

8
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets
Total Net Asset Investment At End Of
Dividends Value Return Based Period
And End Of on Net Asset (000's
Fiscal Year or Period Distributions Period Value (a) omitted)
------------------- -------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Alliance Fund
Class A
Year ended 11/30/97 ............ $(1.08) $8.70 31.82% $1,201,435
Year ended 11/30/96 ............ (1.09) 7.71 16.49 999,067
Year ended 11/30/95 ............ (1.01) 7.72 37.87 945,309
1/1/94 to 11/30/94** ........... 0.00 6.63 (3.21) 760,679
Year ended 12/31/93 ............ (.78) 6.85 14.26 831,814
Year ended 12/31/92 ............ (.53) 6.68 14.70 794,733
Year ended 12/31/91 ............ (.70) 6.29 33.91 748,226
Year ended 12/31/90 ............ (1.42) 5.22 (4.36) 620,374
Year ended 12/31/89 ............ (.04) 6.87 23.42 837,429
Year ended 12/31/88 ............ (.43) 5.60 17.10 760,619
Class B
Year ended 11/30/97 ............ $(1.06) $8.25 30.74% $ 70,461
Year ended 11/30/96 ............ (1.07) 7.40 15.47 44,450
Year ended 11/30/95 ............ (1.00) 7.49 36.61 31,738
1/1/94 to 11/30/94** ........... 0.00 6.50 (3.85) 18,138
Year ended 12/31/93 ............ (.76) 6.76 13.28 12,402
Year ended 12/31/92 ............ (.49) 6.64 13.75 3,825
3/4/91++ to 12/31/91 ........... (.67) 6.27 13.10 852
Class C
Year ended 11/30/97 ............ $(1.06) $8.26 30.72% $ 18,871
Year ended 11/30/96 ............ (1.07) 7.41 15.48 13,899
Year ended 11/30/95 ............ (1.00) 7.50 36.79 10,078
1/1/94 to 11/30/94** ........... 0.00 6.50 (3.99) 6,230
5/3/93++ to 12/31/93 ........... (.76) 6.77 13.95 4,006
Growth Fund (i)
Class A
Year ended 10/31/97 ............ $(1.03) $43.95 29.54% $ 783,110
Year ended 10/31/96 ............ (.82) 34.91 21.65 499,459
Year ended 10/31/95 ............ (.52) 29.48 20.18 285,161
5/1/94 to 10/31/94** ........... 0.00 25.08 4.98 167,800
Year ended 4/30/94 ............. (2.32) 23.89 15.66 102,406
Year ended 4/30/93 ............. (1.37) 22.67 18.89 13,889
Year ended 4/30/92 ............. (1.87) 20.31 23.61 8,228
9/4/90++ to 4/30/91 ............ (.06) 17.94 32.40 713
Class B
Year ended 10/31/97 ............ $(1.03) $36.31 28.64% $3,578,806
Year ended 10/31/96 ............ (.63) 29.21 20.82 2,498,097
Year ended 10/31/95 ............ (.42) 24.78 19.33 1,052,020
5/1/94 to 10/31/94** ........... 0.00 21.21 4.64 751,521
Year ended 4/30/94 ............. (2.32) 20.27 14.79 394,227
Year ended 4/30/93 ............. (1.65) 19.68 18.16 56,704
Year ended 4/30/92 ............. (2.56) 18.16 22.75 37,845
Year ended 4/30/91 ............. (.80) 16.88 24.72 22,710
Year ended 4/30/90 ............. (1.02) 14.38 8.81 15,800
Year ended 4/30/89 ............. (1.06) 14.13 20.31 7,672
10/23/87+ to 4/30/88 ........... 0.00 12.76 27.60 1,938
Class C
Year ended 10/31/97 ............ $(1.03) $36.33 28.66% $ 599,449
Year ended 10/31/96 ............ (.63) 29.22 20.81 403,478
Year ended 10/31/95 ............ (.42) 24.79 19.32 226,662
5/1/94 to 10/31/94** ........... 0.00 21.22 4.64 114,455
8/2/93++ to 4/30/94 ............ (2.32) 20.28 5.27 64,030
Premier Growth Fund
Class A
Year ended 11/30/97 ............ $(1.08) $22.00 30.46% $ 373,099
Year ended 11/30/96 ............ (1.27) 17.98 21.52 172,870
Year ended 11/30/95 ............ (.67) 16.09 49.95 72,366
Year ended 11/30/94 ............ 0.00 11.41 (3.14) 35,146
Year ended 11/30/93 ............ (.01) 11.78 9.26 40,415
9/28/92+ to 11/30/92 ........... 0.00 10.79 7.90 4,893
Class B
Year ended 11/30/97 ............ $(1.08) $21.26 29.62% $ 858,449
Year ended 11/30/96 ............ (1.27) 17.52 20.70 404,137
Year ended 11/30/95 ............ (.67) 15.81 49.01 238,088
Year ended 11/30/94 ............ 0.00 11.29 (3.67) 139,988
Year ended 11/30/93 ............ 0.00 11.72 8.64 151,600
9/28/92+ to 11/30/92 ........... 0.00 10.79 7.90 19,941
Class C
Year ended 11/30/97 ............ $(1.08) $21.29 29.64% $ 177,923
Year ended 11/30/96 ............ (1.27) 17.54 20.76 60,194
Year ended 11/30/95 ............ (.67) 15.82 48.96 20,679
Year ended 11/30/94 ............ 0.00 11.30 (3.58) 7,332
5/3/93++ to 11/30/93 ........... 0.00 11.72 11.83 3,899
<CAPTION>

Ratio Of Net
Ratio Of Investment
Expenses Income (Loss) Average
To Average To Average Portfolio Commission
Fiscal Year or Period Net Assets Net Assets Turnover Rate Rate (k)
------------------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Alliance Fund
Class A
Year ended 11/30/97 ........... 1.03% (.29)% 158% $0.0571
Year ended 11/30/96 ........... 1.04 .30 80 0.0646
Year ended 11/30/95 ........... 1.08 .31 81 --
1/1/94 to 11/30/94** .......... 1.05* .21* 63 --
Year ended 12/31/93 ........... 1.01 .27 66 --
Year ended 12/31/92 ........... .81 .79 58 --
Year ended 12/31/91 ........... .83 1.03 74 --
Year ended 12/31/90 ........... .81 1.56 71 --
Year ended 12/31/89 ........... .75 1.79 81 --
Year ended 12/31/88 ........... .82 1.38 65 --
Class B
Year ended 11/30/97 ........... 1.85% (1.12)% 158% $0.0571
Year ended 11/30/96 ........... 1.87 (.53) 80 0.0646
Year ended 11/30/95 ........... 1.90 (.53) 81 --
1/1/94 to 11/30/94** .......... 1.89* (.60)* 63 --
Year ended 12/31/93 ........... 1.90 (.64) 66 --
Year ended 12/31/92 ........... 1.64 (.04) 58 --
3/4/91++ to 12/31/91 .......... 1.64* .10* 74 --
Class C
Year ended 11/30/97 ........... 1.83% (1.10)% 158% $0.0571
Year ended 11/30/96 ........... 1.86 (.51) 80 0.0646
Year ended 11/30/95 ........... 1.89 (.51) 81 --
1/1/94 to 11/30/94** .......... 1.87* (.59)* 63 --
5/3/93++ to 12/31/93 .......... 1.94* (.74)* 66 --
Growth Fund (i)
Class A
Year ended 10/31/97 ........... 1.26%(l) (.25)% 48% $0.0562
Year ended 10/31/96 ........... 1.30 .15 46 0.0584
Year ended 10/31/95 ........... 1.35 .56 61 --
5/1/94 to 10/31/94** .......... 1.35* .86* 24 --
Year ended 4/30/94 ............ 1.40(f) .32 87 --
Year ended 4/30/93 ............ 1.40(f) .20 124 --
Year ended 4/30/92 ............ 1.40 1.44 137 --
9/4/90++ to 4/30/91 ........... 1.40* 1.99* 130 --
Class B
Year ended 10/31/97 ........... 1.96%(l) (.94)% 48% $0.0562
Year ended 10/31/96 ........... 1.99 (.54) 46 0.0584
Year ended 10/31/95 ........... 2.05 (.15) 61 --
5/1/94 to 10/31/94** .......... 2.05* .16* 24 --
Year ended 4/30/94 ............ 2.10(f) (.36) 87 --
Year ended 4/30/93 ............ 2.15(f) (.53) 124 --
Year ended 4/30/92 ............ 2.15 .78 137 --
Year ended 4/30/91 ............ 2.10 .56 130 --
Year ended 4/30/90 ............ 2.00 .07 165 --
Year ended 4/30/89 ............ 2.00 (.03) 139 --
10/23/87+ to 4/30/88 .......... 2.00* (.40)* 52 --
Class C
Year ended 10/31/97 ........... 1.97%(l) (.95)% 48% $0.0562
Year ended 10/31/96 ........... 2.00 (.55) 46 0.0584
Year ended 10/31/95 ........... 2.05 (.15) 61 --
5/1/94 to 10/31/94** .......... 2.05* .16* 24 --
8/2/93++ to 4/30/94 ........... 2.10*(f) (.31)* 87 --
Premier Growth Fund
Class A
Year ended 11/30/97 ........... 1.57% (.52)% 76% $0.0594
Year ended 11/30/96 ........... 1.65 (.27) 95 0.0651
Year ended 11/30/95 ........... 1.75 (.28) 114 --
Year ended 11/30/94 ........... 1.96 (.67) 98 --
Year ended 11/30/93 ........... 2.18 (.61) 68 --
9/28/92+ to 11/30/92 .......... 2.17* .91* 0 --
Class B
Year ended 11/30/97 ........... 2.25% (1.20)% 76% $0.0594
Year ended 11/30/96 ........... 2.32 (.94) 95 0.0651
Year ended 11/30/95 ........... 2.43 (.95) 114 --
Year ended 11/30/94 ........... 2.47 (1.19) 98 --
Year ended 11/30/93 ........... 2.70 (1.14) 68 --
9/28/92+ to 11/30/92 .......... 2.68* .35* 0 --
Class C
Year ended 11/30/97 ........... 2.24% (1.22)% 76% $0.0594
Year ended 11/30/96 ........... 2.32 (.94) 95 0.0651
Year ended 11/30/95 ........... 2.42 (.97) 114 --
Year ended 11/30/94 ........... 2.47 (1.16) 98 --
5/3/93++ to 11/30/93 .......... 2.79* (1.35)* 68 --
</TABLE>

- --------------------------------------------------------------------------------

9
<PAGE>

Class B
Year ended 11/30/97 ............ $49.76 $(.88)(b) $4.12 $3.24 $0.00 $(.42)
Year ended 11/30/96 ............ 45.76 (.70)(b) 7.08 6.38 0.00 (2.38)
Year ended 11/30/95 ............ 31.61 (.60)(b) 17.92 17.32 0.00 (3.17)
1/1/94 to 11/30/94** ........... 25.98 (.23) 5.86 5.63 0.00 0.00
5/3/93++ to 12/31/93 ........... 27.44 (.12) 6.84 6.72 0.00 (8.18)

Class C
Year ended 11/30/97 ............ $49.76 $(.88)(b) $4.11 $3.23 $0.00 $(.42)
Year ended 11/30/96 ............ 45.77 (.70)(b) 7.07 6.37 0.00 (2.38)
Year ended 11/30/95 ............ 31.61 (.58)(b) 17.91 17.33 0.00 (3.17)
1/1/94 to 11/30/94** ........... 25.98 (.24) 5.87 5.63 0.00 0.00
5/3/93++ to 12/31/93 ........... 27.44 (.13) 6.85 6.72 0.00 (8.18)

Quasar Fund
Class A
Year ended 9/30/97 ............. $27.92 $(.24)(b) $6.80 $6.56 $0.00 $(4.11)
Year ended 9/30/96 ............. 24.16 (.25) 8.82 8.57 0.00 (4.81)
Year ended 9/30/95 ............. 22.65 (.22)(b) 5.59 5.37 0.00 (3.86)
Year ended 9/30/94 ............. 24.43 (.60) (.36) (.96) 0.00 (.82)
Year ended 9/30/93 ............. 19.34 (.41) 6.38 5.97 0.00 (.88)
Year ended 9/30/92 ............. 21.27 (.24) (1.53) (1.77) 0.00 (.16)
Year ended 9/30/91 ............. 15.67 (.05) 5.71 5.66 (.06) 0.00
Year ended 9/30/90 ............. 24.84 .03(b) (7.18) (7.15) 0.00 (2.02)
Year ended 9/30/89 ............. 17.60 .02(b) 7.40 7.42 0.00 (.18)
Year ended 9/30/88 ............. 24.47 (.08)(c) (2.08) (2.16) 0.00 (4.71)

Class B
Year ended 9/30/97 ............. $26.13 $(.42)(b) $(6.23) $5.81 $0.00 $(4.11)
Year ended 9/30/96 ............. 23.03 (.20) 8.11 7.91 0.00 (4.81)
Year ended 9/30/95 ............. 21.92 (.37)(b) 5.34 4.97 0.00 (3.86)
Year ended 9/30/94 ............. 23.88 (.53) (.61) (1.14) 0.00 (.82)
Year ended 9/30/93 ............. 19.07 (.18) 5.87 5.69 0.00 (.88)
Year ended 9/30/92 ............. 21.14 (.39) (1.52) (1.91) 0.00 (.16)
Year ended 9/30/91 ............. 15.66 (.13) 5.67 5.54 (.06) 0.00
9/17/90++ to 9/30/90 ........... 17.17 (.01) (1.50) (1.51) 0.00 0.00

Class C
Year ended 9/30/97 ............. $26.14 $(.42)(b) $6.24 $5.82 $0.00 $(4.11)
Year ended 9/30/96 ............. 23.05 (.20) 8.10 7.90 0.00 (4.81)
Year ended 9/30/95 ............. 21.92 (.37)(b) 5.36 4.99 0.00 (3.86)
Year ended 9/30/94 ............. 23.88 (.36) (.78) (1.14) 0.00 (.82)
5/3/93++ to 9/30/93 ............ 20.33 (.10) 3.65 3.55 0.00 0.00

International Fund
Class A
Year ended 6/30/97 ............. $18.32 $.06(b) $1.51 $1.57 $(.12) $(1.08)
Year ended 6/30/96 ............. 16.81 .05(b) 2.51 2.56 0.00 (1.05)
Year ended 6/30/95 ............. 18.38 .04 .01 .05 0.00 (1.62)
Year ended 6/30/94 ............. 16.01 (.09) 3.02 2.93 0.00 (.56)
Year ended 6/30/93 ............. 14.98 (.01) 1.17 1.16 (.04) (.09)
Year ended 6/30/92 ............. 14.00 .01(b) 1.04 1.05 (.07) 0.00
Year ended 6/30/91 ............. 17.99 .05 (3.54) (3.49) (.03) (.47)
Year ended 6/30/90 ............. 17.24 .03 2.87 2.90 (.04) (2.11)
Year ended 6/30/89 ............. 16.09 .05 3.73 3.78 (.13) (2.50)
Year ended 6/30/88 ............. 23.70 .17 (1.22) (1.05) (.21) (6.35)

Class B
Year ended 6/30/97 ............. $17.45 $(.09)(b) $1.43 $1.34 $0.00 $(1.08)
Year ended 6/30/96 ............. 16.19 (.07)(b) 2.38 2.31 0.00 (1.05)
Year ended 6/30/95 ............. 17.90 (.01) (.08) (.09) 0.00 (1.62)
Year ended 6/30/94 ............. 15.74 (.19)(b) 2.91 2.72 0.00 (.56)
Year ended 6/30/93 ............. 14.81 (.12) 1.14 1.02 0.00 (.09)
Year ended 6/30/92 ............. 13.93 (.11)(b) 1.02 .91 (.03) 0.00
9/17/90++ to 6/30/91 ........... 15.52 .03 (1.12) (1.09) (.03) (.47)

Class C
Year ended 6/30/97 ............. $17.46 $(.09)(b) $1.44 $1.35 $0.00 $(1.08)
Year ended 6/30/96 ............. 16.20 (.07)(b) 2.38 2.31 0.00 (1.05)
Year ended 6/30/95 ............. 17.91 (.14) .05 (.09) 0.00 (1.62)
Year ended 6/30/94 ............. 15.74 (.11) 2.84 2.73 0.00 (.56)
5/3/93++ to 6/30/93 ............ 15.93 0.00 (.19) (.19) 0.00 0.00
</TABLE>
- --------------------------------------------------------------------------------
Please refer to the footnotes on page 18.

10
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets
Total Net Asset Investment At End Of
Dividends Value Return Based Period
And End Of on Net Asset (000's
Fiscal Year or Period Distributions Period Value (a) omitted)
------------------- -------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Technology Fund
Class A
Year ended 11/30/97 ............ $(.42) $54.44 7.32% $ 624,716
Year ended 11/30/96 ............ (2.38) 51.15 16.05 594,861
Year ended 11/30/95 ............ (3.17) 46.64 61.93 398,262
1/1/94 to 11/30/94** ........... 0.00 31.98 22.43 202,929
Year ended 12/31/93 ............ (8.18) 26.12 21.63 173,732
Year ended 12/31/92 ............ (2.27) 28.20 15.50 173,566
Year ended 12/31/91 ............ (3.61) 26.38 54.24 191,693
Year ended 12/31/90 ............ (1.54) 19.44 (3.08) 131,843
Year ended 12/31/89 ............ 0.00 21.57 6.00 141,730
Year ended 12/31/88 ............ 0.00 20.35 0.64 169,856
Class B
Year ended 11/30/97 ............ $(.42) $52.58 6.57% $1,053,436
Year ended 11/30/96 ............ (2.38) 49.76 15.20 660,921
Year ended 11/30/95 ............ (3.17) 45.76 60.95 277,111
1/1/94 to 11/30/94** ........... 0.00 31.61 21.67 18,397
5/3/93++ to 12/31/93 ........... (8.18) 25.98 24.49 1,645
Class C
Year ended 11/30/97 ............ $(.42) $52.57 6.55% $ 184,194
Year ended 11/30/96 ............ (2.38) 49.76 15.17 108,488
Year ended 11/30/95 ............ (3.17) 45.77 60.98 43,161
1/1/94 to 11/30/94** ........... 0.00 31.61 21.67 7,470
5/3/93++ to 12/31/93 ........... (8.18) 25.98 24.49 1,096
Quasar Fund
Class A
Year ended 9/30/97 ............. $(4.11) $30.37 27.81% $ 402,081
Year ended 9/30/96 ............. (4.81) 27.92 42.42 229,798
Year ended 9/30/95 ............. (3.86) 24.16 30.73 146,663
Year ended 9/30/94 ............. (.82) 22.65 (4.05) 155,470
Year ended 9/30/93 ............. (.88) 24.43 31.58 228,874
Year ended 9/30/92 ............. (.16) 19.34 (8.34) 252,140
Year ended 9/30/91 ............. (.06) 21.27 36.28 333,806
Year ended 9/30/90 ............. (2.02) 15.67 (30.81) 251,102
Year ended 9/30/89 ............. (.18) 24.84 42.68 263,099
Year ended 9/30/88 ............. (4.71) 17.60 (8.61) 90,713
Class B
Year ended 9/30/97 ............. $(4.11) $27.83 26.70% $ 503,037
Year ended 9/30/96 ............. (4.81) 26.13 41.48 112,490
Year ended 9/30/95 ............. (3.86) 23.03 29.78 16,604
Year ended 9/30/94 ............. (.82) 21.92 (4.92) 13,901
Year ended 9/30/93 ............. (.88) 23.88 30.53 16,779
Year ended 9/30/92 ............. (.16) 19.07 (9.05) 9,454
Year ended 9/30/91 ............. (.06) 21.14 35.54 7,346
9/17/90++ to 9/30/90 ........... 0.00 15.66 (8.79) 71
Class C
Year ended 9/30/97 ............. $(4.11) $27.85 26.74% $ 145,494
Year ended 9/30/96 ............. (4.81) 26.14 41.46 28,541
Year ended 9/30/95 ............. (3.86) 23.05 29.87 1,611
Year ended 9/30/94 ............. (.82) 21.92 (4.92) 1,220
5/3/93++ to 9/30/93 ............ 0.00 23.88 17.46 118
International Fund
Class A
Year ended 6/30/97 ............. $(1.20) $18.69 9.30% $ 190,173
Year ended 6/30/96 ............. (1.05) 18.32 15.83 196,261
Year ended 6/30/95 ............. (1.62) 16.81 .59 165,584
Year ended 6/30/94 ............. (.56) 18.38 18.68 201,916
Year ended 6/30/93 ............. (.13) 16.01 7.86 161,048
Year ended 6/30/92 ............. (.07) 14.98 7.52 179,807
Year ended 6/30/91 ............. (.50) 14.00 (19.34) 214,442
Year ended 6/30/90 ............. (2.15) 17.99 16.98 265,999
Year ended 6/30/89 ............. (2.63) 17.24 27.65 166,003
Year ended 6/30/88 ............. (6.56) 16.09 (4.20) 132,319
Class B
Year ended 6/30/97 ............. $(1.08) $17.71 8.37% $ 77,725
Year ended 6/30/96 ............. (1.05) 17.45 14.87 72,470
Year ended 6/30/95 ............. (1.62) 16.19 (.22) 48,998
Year ended 6/30/94 ............. (.56) 17.90 17.65 29,943
Year ended 6/30/93 ............. (.09) 15.74 6.98 6,363
Year ended 6/30/92 ............. (.03) 14.81 6.54 5,585
9/17/90++ to 6/30/91 ........... (.50) 13.93 (6.97) 3,515
Class C
Year ended 6/30/97 ............. $(1.08) $17.73 8.42% $ 23,268
Year ended 6/30/96 ............. (1.05) 17.46 14.85 26,965
Year ended 6/30/95 ............. (1.62) 16.20 (.22) 19,395
Year ended 6/30/94 ............. (.56) 17.91 17.72 13,503
5/3/93++ to 6/30/93 ............ 0.00 15.74 (1.19) 229

<CAPTION>
Ratio Of Net
Ratio Of Investment
Expenses Income (Loss) Average
To Average To Average Portfolio Commission
Fiscal Year or Period Net Assets Net Assets Turnover Rate Rate (k)
------------------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Technology Fund
Class A
Year ended 11/30/97 ............ 1.67%(l) (.97)% 51% $0.0564
Year ended 11/30/96 ............ 1.74 (.87) 30 0.0612
Year ended 11/30/95 ............ 1.75 (.77) 55 --
1/1/94 to 11/30/94** ........... 1.66* (1.22)* 55 --
Year ended 12/31/93 ............ 1.73 (1.32) 64 --
Year ended 12/31/92 ............ 1.61 (.90) 73 --
Year ended 12/31/91 ............ 1.71 (.20) 134 --
Year ended 12/31/90 ............ 1.77 (.18) 147 --
Year ended 12/31/89 ............ 1.66 .02 139 --
Year ended 12/31/88 ............ 1.42 (.16) 139 --
Class B
Year ended 11/30/97 ............ 2.38%(l) (1.70)% 51% $0.0564
Year ended 11/30/96 ............ 2.44 (1.61) 30 0.0612
Year ended 11/30/95 ............ 2.48 (1.47) 55 --
1/1/94 to 11/30/94** ........... 2.43* (1.95)* 55 --
5/3/93++ to 12/31/93 ........... 2.57* (2.30)* 64 --
Class C
Year ended 11/30/97 ............ 2.38%(l) (1.70)% 51% $0.0564
Year ended 11/30/96 ............ 2.44 (1.60) 30 0.0612
Year ended 11/30/95 ............ 2.48 (1.47) 55 --
1/1/94 to 11/30/94** ........... 2.41* (1.94)* 55 --
5/3/93++ to 12/31/93 ........... 2.52* (2.25)* 64 --
Quasar Fund
Class A
Year ended 9/30/97 ............. 1.67% (.91)% 135% $0.0536
Year ended 9/30/96 ............. 1.79 (1.11) 168 0.0596
Year ended 9/30/95 ............. 1.83 (1.06) 160 --
Year ended 9/30/94 ............. 1.67 (1.15) 110 --
Year ended 9/30/93 ............. 1.65 (1.00) 102 --
Year ended 9/30/92 ............. 1.62 (.89) 128 --
Year ended 9/30/91 ............. 1.64 (.22) 118 --
Year ended 9/30/90 ............. 1.66 .16 90 --
Year ended 9/30/89 ............. 1.73 .10 90 --
Year ended 9/30/88 ............. 1.28 (.40) 58 --
Class B
Year ended 9/30/97 ............. 2.51% (1.73)% 135% $0.0536
Year ended 9/30/96 ............. 2.62 (1.96) 168 0.0596
Year ended 9/30/95 ............. 2.65 (1.88) 160 --
Year ended 9/30/94 ............. 2.50 (1.98) 110 --
Year ended 9/30/93 ............. 2.46 (1.81) 102 --
Year ended 9/30/92 ............. 2.42 (1.67) 128 --
Year ended 9/30/91 ............. 2.41 (1.28) 118 --
9/17/90++ to 9/30/90 ........... 2.09* (.26)* 90 --
Class C
Year ended 9/30/97 ............. 2.50% (1.72)% 135% $0.0536
Year ended 9/30/96 ............. 2.61 (1.94) 168 0.0596
Year ended 9/30/95 ............. 2.64* (1.76)* 160 --
Year ended 9/30/94 ............. 2.48 (1.96) 110 --
5/3/93++ to 9/30/93 ............ 2.49* (1.90)* 102 --
International Fund
Class A
Year ended 6/30/97 ............. 1.74%(l) .31% 94% $0.0363
Year ended 6/30/96 ............. 1.72 .31 78 --
Year ended 6/30/95 ............. 1.73 .26 119 --
Year ended 6/30/94 ............. 1.90 (.50) 97 --
Year ended 6/30/93 ............. 1.88 (.14) 94 --
Year ended 6/30/92 ............. 1.82 .07 72 --
Year ended 6/30/91 ............. 1.73 .37 71 --
Year ended 6/30/90 ............. 1.45 .33 37 --
Year ended 6/30/89 ............. 1.41 .39 87 --
Year ended 6/30/88 ............. 1.41 .84 55 --
Class B
Year ended 6/30/97 ............. 2.59%(l) (.51)% 94% $0.0363
Year ended 6/30/96 ............. 2.55 (.46) 78 --
Year ended 6/30/95 ............. 2.57 (.62) 119 --
Year ended 6/30/94 ............. 2.78 (1.15) 97 --
Year ended 6/30/93 ............. 2.70 (.96) 94 --
Year ended 6/30/92 ............. 2.68 (.70) 72 --
9/17/90++ to 6/30/91 ........... 3.39* .84* 71 --
Class C
Year ended 6/30/97 ............. 2.58%(l) (.51)% 94% $0.0363
Year ended 6/30/96 ............. 2.53 (.47) 78 --
Year ended 6/30/95 ............. 2.54 (.88) 119 --
Year ended 6/30/94 ............. 2.78 (1.12) 97 --
5/3/93++ to 6/30/93 ............ 2.57* .08* 94 --
</TABLE>

- --------------------------------------------------------------------------------

11
<PAGE>

<TABLE>
<CAPTION>
Net Net Net
Asset Realized and Increase
Value Unrealized (Decrease) In Dividends From
Beginning Of Net Investment Gain (Loss) On Net Asset Value Net Investment
Fiscal Year or Period Period Income (Loss) Investments From Operations Income
------------------- ------------ -------------- -------------- --------------- --------------

<S> <C> <C> <C> <C> <C>
Worldwide Privatization Fund
Class A
Year ended 6/30/97........ $12.13 $ .15(b) $2.55 $2.70 $ (.15)
Year ended 6/30/96........ 10.18 .10(b) 1.85 1.95 0.00
Year ended 6/30/95........ 9.75 .06 .37 .43 0.00
6/2/94+ to 6/30/94........ 10.00 .01 (.26) (.25) 0.00
Class B
Year ended 6/30/97........ $11.96 $ .08(b) $2.50 $2.58 $ (.08)
Year ended 6/30/96........ 10.10 (.02) 1.88 1.86 0.00
Year ended 6/30/95........ 9.74 .02 .34 .36 0.00
6/2/94+ to 6/30/94........ 10.00 .00 (.26) (.26) 0.00
Class C
Year ended 6/30/97........ $11.96 $ .12(b) $2.46 $2.58 $ (.08)
Year ended 6/30/96........ 10.10 .03 1.83 1.86 0.00
2/8/95++ to 6/30/95....... 9.53 .05 .52 .57 0.00
New Europe Fund
Class A
Year ended 7/31/97........ $15.84 $ .07(b) $4.20 $4.27 $ (.15)
Year ended 7/31/96........ 15.11 .18 1.02 1.20 0.00
Year ended 7/31/95........ 12.66 .04 2.50 2.54 (.09)
Period ended 7/31/94**.... 12.53 .09 .04 .13 0.00
Year ended 2/28/94........ 9.37 .02(b) 3.14 3.16 0.00
Year ended 2/28/93........ 9.81 .04 (.33) (.29) (.15)
Year ended 2/29/92........ 9.76 .02(b) .05 .07 (.02)
4/2/90+ to 2/28/91........ 11.11(e) .26 (.91) (.65) (.26)
Class B
Year ended 7/31/97........ $15.31 $(.04)(b) $4.02 $3.98 $0.00
Year ended 7/31/96........ 14.71 .08 .99 1.07 0.00
Year ended 7/31/95........ 12.41 (.05) 2.44 2.39 (.09)
Period ended 7/31/94**.... 12.32 .07 .02 .09 0.00
Year ended 2/28/94........ 9.28 (.05)(b) 3.09 3.04 0.00
Year ended 2/28/93........ 9.74 (.02) (.33) (.35) (.11)
3/5/91++ to 2/29/92....... 9.84 (.04)(b) (.04) (.08) (.02)
Class C
Year ended 7/31/97........ $15.33 $(.04)(b) $4.02 $3.98 $0.00
Year ended 7/31/96........ 14.72 .08 1.00 1.08 0.00
Year ended 7/31/95........ 12.42 (.07) 2.46 2.39 (.09)
Period ended 7/31/94**.... 12.33 .06 .03 .09 0.00
5/3/93++ to 2/28/94....... 10.21 (.04)(b) 2.16 2.12 0.00
All-Asia Investment Fund
Class A
Year ended 10/31/97....... $11.04 $(.21)(b)(c) $(2.95) $(3.16) $0.00
Year ended 10/31/96....... 10.45 (.21)(b)(c) .88 .67 0.00
11/28/94+ to 10/31/95..... 10.00 (.19)(c) .64 .45 0.00
Class B
Year ended 10/31/97....... $10.90 $(.28)(b)(c) $(2.89) $(3.17) $0.00
Year ended 10/31/96....... 10.41 (.28)(b)(c) .85 .57 0.00
11/28/94+ to 10/31/95..... 10.00 (.25)(c) .66 .41 0.00
Class C
Year ended 10/31/97....... $10.91 $(.27)(b)(c) $(2.90) $(3.17) $0.00
Year ended 10/31/96....... 10.41 (.28)(b)(c) .86 .58 0.00
11/28/94+ to 10/31/95..... 10.00 (.35)(c) .76 .41 0.00
Global Small Cap Fund
Class A
Year ended 7/31/97........ $11.61 $(.15)(b) $2.97 $2.82 $0.00
Year ended 7/31/96........ 10.38 (.14)(b) 1.90 1.76 0.00
Year ended 7/31/95........ 11.08 (.09) 1.50 1.41 0.00
Period ended 7/31/94**.... 11.24 (.15)(b) (.01) (.16) 0.00
Year ended 9/30/93........ 9.33 (.15) 2.49 2.34 0.00
Year ended 9/30/92........ 10.55 (.16) (1.03) (1.19) 0.00
Year ended 9/30/91........ 8.26 (.06) 2.35 2.29 0.00
Year ended 9/30/90........ 15.54 (.05)(b) (4.12) (4.17) 0.00
Year ended 9/30/89........ 11.41 (.03) 4.25 4.22 0.00
Year ended 9/30/88........ 15.07 (.05) (1.83) (1.88) 0.00
Class B
Year ended 7/31/97........ $11.03 $(.21)(b) $2.77 $2.56 $0.00
Year ended 7/31/96........ 9.95 (.20)(b) 1.81 1.61 0.00
Year ended 7/31/95........ 10.78 (.12) 1.40 1.28 0.00
Period ended 7/31/94**.... 11.00 (.17)(b) (.05) (.22) 0.00
Year ended 9/30/93........ 9.20 (.15) 2.38 2.23 0.00
Year ended 9/30/92........ 10.49 (.20) (1.06) (1.26) 0.00
Year ended 9/30/91........ 8.26 (.07) 2.30 2.23 0.00
9/17/90++ to 9/30/90...... 9.12 (.01) (.85) (.86) 0.00
Class C
Year ended 7/31/97........ $11.05 $(.22)(b) $2.78 $2.56 $0.00
Year ended 7/31/96........ 9.96 (.20)(b) 1.82 1.62 0.00
Year ended 7/31/95........ 10.79 (.17) 1.45 1.28 0.00
Period ended 7/31/94**.... 11.00 (.17)(b) (.04) (.21) 0.00
5/3/93++ to 9/30/93....... 9.86 (.05) 1.19 1.14 0.00

Distributions
In Excess Of Distributions
Net Investment From Net
Fiscal Year or Period Income Realized Gains
------------------- -------------- --------------
<S> <C> <C>
Worldwide Privatization Fund
Class A
Year ended 6/30/97........ $0.00 $(1.42)
Year ended 6/30/96........ 0.00 0.00
Year ended 6/30/95........ 0.00 0.00
6/2/94+ to 6/30/94........ 0.00 0.00
Class B
Year ended 6/30/97........ $0.00 $(1.42)
Year ended 6/30/96........ 0.00 0.00
Year ended 6/30/95........ 0.00 0.00
6/2/94+ to 6/30/94........ 0.00 0.00
Class C
Year ended 6/30/97........ $0.00 $(1.42
Year ended 6/30/96........ 0.00 0.00
2/8/95++ to 6/30/95....... 0.00 0.00
New Europe Fund
Class A
Year ended 7/31/97........ $ (.03) $ (1.32)
Year ended 7/31/96........ 0.00 (.47)
Year ended 7/31/95........ 0.00 0.00
Period ended 7/31/94**.... 0.00 0.00
Year ended 2/28/94........ 0.00 0.00
Year ended 2/28/93........ 0.00 0.00
Year ended 2/29/92........ 0.00 0.00
4/2/90+ to 2/28/91........ 0.00 (.44)
Class B
Year ended 7/31/97........ $ (.10) $(1.32)
Year ended 7/31/96........ 0.00 (.47)
Year ended 7/31/95........ 0.00 0.00
Period ended 7/31/94**.... 0.00 0.00
Year ended 2/28/94........ 0.00 0.00
Year ended 2/28/93........ 0.00 0.00
3/5/91++ to 2/29/92....... 0.00 0.00
Class C
Year ended 7/31/97........ $ (.10) $(1.32)
Year ended 7/31/96........ 0.00 (.47)
Year ended 7/31/95........ 0.00 0.00
Period ended 7/31/94**.... 0.00 0.00
5/3/93++ to 2/28/94....... 0.00 0.00
All-Asia Investment Fund
Class A
Year ended 10/31/97....... $0.00 $ (.34)
Year ended 10/31/96....... 0.00 (.08)
11/28/94+ to 10/31/95..... 0.00 0.00
Class B
Year ended 10/31/97....... $0.00 $ (.34)
Year ended 10/31/96....... 0.00 (.08)
11/28/94+ to 10/31/95..... 0.00 0.00
Class C
Year ended 10/31/97....... $0.00 $ (.34)
Year ended 10/31/96....... 0.00 (.08)
11/28/94+ to 10/31/95..... 0.00 0.00
Global Small Cap Fund
Class A
Year ended 7/31/97........ $0.00 $ (1.56)
Year ended 7/31/96........ 0.00 (.53)
Year ended 7/31/95........ 0.00 (2.11)(j)
Period ended 7/31/94**.... 0.00 0.00
Year ended 9/30/93........ 0.00 (.43)
Year ended 9/30/92........ 0.00 (.03)
Year ended 9/30/91........ 0.00 0.00
Year ended 9/30/90........ 0.00 (3.11)
Year ended 9/30/89........ 0.00 (.09)
Year ended 9/30/88........ 0.00 (1.78)
Class B
Year ended 7/31/97........ $0.00 $ (1.56)
Year ended 7/31/96........ 0.00 (.53)
Year ended 7/31/95........ 0.00 (2.11)(j)
Period ended 7/31/94**.... 0.00 0.00
Year ended 9/30/93........ 0.00 (.43)
Year ended 9/30/92........ 0.00 (.03)
Year ended 9/30/91........ 0.00 0.00
9/17/90++ to 9/30/90...... 0.00 0.00
Class C
Year ended 7/31/97........ $0.00 $ (1.56)
Year ended 7/31/96........ 0.00 (.53)
Year ended 7/31/95........ 0.00 (2.11)(j)
Period ended 7/31/94**.... 0.00 0.00
5/3/93++ to 9/30/93....... 0.00 0.00
</TABLE>
- --------------------------------------------------------------------------------
Please refer to footnotes on page 18.

12
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets
Total Net Asset Investment At End Of
Dividends Value Return Based Period
And End Of on Net Asset (000's
Fiscal Year or Period Distributions Period Value (a) omitted)
--------------------- ------------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Worldwide Privatization Fund
Class A
Year ended 6/30/97........ $(1.57) $13.26 25.16% $561,793
Year ended 6/30/96........ 0.00 12.13 19.16 672,732
Year ended 6/30/95........ 0.00 10.18 4.41 13,535
6/2/94+ to 6/30/94........ 0.00 9.75 (2.50) 4,990
Class B
Year ended 6/30/97........ $(1.50) $13.04 24.34% $121,173
Year ended 6/30/96........ 0.00 11.96 18.42 83,050
Year ended 6/30/95........ 0.00 10.10 3.70 79,359
6/2/94+ to 6/30/94........ 0.00 9.74 (2.60) 22,859
Class C
Year ended 6/30/97........ $(1.50) $13.04 24.33% $ 12,929
Year ended 6/30/96........ 0.00 11.96 18.42 2,383
2/8/95++ to 6/30/95....... 0.00 10.10 5.98 338
New Europe Fund
Class A
Year ended 7/31/97........ $(1.50) $18.61 28.78% $ 78,578
Year ended 7/31/96........ (.47) 15.84 8.20 74,026
Year ended 7/31/95........ (.09) 15.11 20.22 86,112
Period ended 7/31/94**.... 0.00 12.66 1.04 86,739
Year ended 2/28/94........ 0.00 12.53 33.73 90,372
Year ended 2/28/93........ (.15) 9.37 (2.82) 79,285
Year ended 2/29/92........ (.02) 9.81 .74 108,510
4/2/90+ to 2/28/91........ (.70) 9.76 (5.63) 188,016
Class B
Year ended 7/31/97........ $(1.42) $17.87 27.76% $ 66,032
Year ended 7/31/96........ (.47) 15.31 7.53 42,662
Year ended 7/31/95........ (.09) 14.71 19.42 34,527
Period ended 7/31/94**.... 0.00 12.41 .73 31,404
Year ended 2/28/94........ 0.00 12.32 32.76 20,729
Year ended 2/28/93........ (.11) 9.28 (3.49) 1,732
3/5/91++ to 2/29/92....... (.02) 9.74 .03 1,423
Class C
Year ended 7/31/97........ $(1.42) $17.89 27.73% $ 16,907
Year ended 7/31/96........ (.47) 15.33 7.59 10,141
Year ended 7/31/95........ (.09) 14.72 19.40 7,802
Period ended 7/31/94**.... 0.00 12.42 .73 11,875
5/3/93++ to 2/28/94....... 0.00 12.33 20.77 10,886
All-Asia Investment Fund
Class A
Year ended 10/31/97....... $ (.34) $ 7.54 (29.61)% $ 5,916
Year ended 10/31/96....... (.08) 11.04 6.43 12,284
11/28/94+ to 10/31/95..... 0.00 10.45 4.50 2,870
Class B
Year ended 10/31/97....... $ (.34) $ 7.39 (30.09)% $ 11,439
Year ended 10/31/96....... (.08) 10.90 5.49 23,784
11/28/94+ to 10/31/95..... 0.00 10.41 4.10 5,170
Class C
Year ended 10/31/97....... $ (.34) $ 7.40 (30.06)% $ 1,859
Year ended 10/31/96....... (.08) 10.91 5.59 4,228
11/28/94+ to 10/31/95..... 0.00 10.41 4.10 597
Global Small Cap Fund
Class A
Year ended 7/31/97........ $(1.56) $12.87 26.47% $ 85,217
Year ended 7/31/96........ (.53) 11.61 17.46 68,623
Year ended 7/31/95........ (2.11) 10.38 16.62 60,057
Period ended 7/31/94**.... 0.00 11.08 (1.42) 61,372
Year ended 9/30/93........ (.43) 11.24 25.83 65,713
Year ended 9/30/92........ (.03) 9.33 (11.30) 58,491
Year ended 9/30/91........ 0.00 10.55 27.72 84,370
Year ended 9/30/90........ (3.11) 8.26 (31.90) 68,316
Year ended 9/30/89........ (.09) 15.54 37.34 113,583
Year ended 9/30/88........ (1.78) 11.41 (8.11) 90,071
Class B
Year ended 7/31/97........ $(1.56) $12.03 25.42% $ 31,946
Year ended 7/31/96........ (.53) 11.03 16.69 14,247
Year ended 7/31/95........ (2.11) 9.95 15.77 5,164
Period ended 7/31/94**.... 0.00 10.78 (2.00) 3,889
Year ended 9/30/93........ (.43) 11.00 24.97 1,150
Year ended 9/30/92........ (.03) 9.20 (12.03) 819
Year ended 9/30/91........ 0.00 10.49 27.00 121
9/17/90++ to 9/30/90...... 0.00 8.26 (9.43) 183
Class C
Year ended 7/31/97........ $(1.56) $12.05 25.37% $ 8,718
Year ended 7/31/96........ (.53) 11.05 16.77 4,119
Year ended 7/31/95........ (2.11) 9.96 15.75 1,407
Period ended 7/31/94**.... 0.00 10.79 (1.91) 1,330
5/3/93++ to 9/30/93....... 0.00 11.00 11.56 261

<CAPTION>
Ratio Of Net
Ratio Of Investment
Expenses Income (Loss) Average
To Average To Average Portfolio Commission
Fiscal Year or Period Net Assets Net Assets Turnover Rate Rate (k)
--------------------- ---------- ---------- ------------- --------
<S> <C> <C> <C> <C>
Worldwide Privatization Fund
Class A
Year ended 6/30/97........ 1.72% 1.27% 48% $0.0132
Year ended 6/30/96........ 1.87 .95 28 --
Year ended 6/30/95........ 2.56 .66 36 --
6/2/94+ to 6/30/94........ 2.75* 1.03* 0 --
Class B
Year ended 6/30/97........ 2.43% .66% 48% $0.0132
Year ended 6/30/96........ 2.83 (.20) 28 --
Year ended 6/30/95........ 3.27 .01 36 --
6/2/94+ to 6/30/94........ 3.45* .33* 0 --
Class C
Year ended 6/30/97........ 2.42% 1.06% 48% $0.0132
Year ended 6/30/96........ 2.57 .63 28 --
2/8/95++ to 6/30/95....... 3.27* 2.65* 36 --
New Europe Fund
Class A
Year ended 7/31/97........ 2.05%(l) .40% 89% $0.0569
Year ended 7/31/96........ 2.14 1.10 69 --
Year ended 7/31/95........ 2.09 .37 74 --
Period ended 7/31/94**.... 2.06* 1.85* 35 --
Year ended 2/28/94........ 2.30 .17 94 --
Year ended 2/28/93........ 2.25 .47 125 --
Year ended 2/29/92........ 2.24 .16 34 --
4/2/90+ to 2/28/91........ 1.52* 2.71* 48 --
Class B
Year ended 7/31/97........ 2.75%(l) (.23)% 89% $0.0569
Year ended 7/31/96........ 2.86 .59 69 --
Year ended 7/31/95........ 2.79 (.33) 74 --
Period ended 7/31/94**.... 2.76* 1.15* 35 --
Year ended 2/28/94........ 3.02 (.52) 94 --
Year ended 2/28/93........ 3.00 (.50) 125 --
3/5/91++ to 2/29/92....... 3.02* (.71)* 34 --
Class C
Year ended 7/31/97........ 2.74%(l) (.23)% 89% $0.0569
Year ended 7/31/96........ 2.87 .58 69 --
Year ended 7/31/95........ 2.78 (.33) 74 --
Period ended 7/31/94**.... 2.76* 1.15* 35 --
5/3/93++ to 2/28/94....... 3.00* (.52)* 94 --
All-Asia Investment Fund
Class A
Year ended 10/31/97....... 3.45%(f) (1.97)% 70% $0.0248
Year ended 10/31/96....... 3.37*(f) (1.75) 66 0.0280
11/28/94+ to 10/31/95..... 4.42*(f) (1.87)* 90 --
Class B
Year ended 10/31/97....... 4.15%(f) (2.67)% 70% $0.0248
Year ended 10/31/96....... 4.07(f) (2.44) 66 0.0280
11/28/94+ to 10/31/95..... 5.20*(f) (2.64)* 90 --
Class C
Year ended 10/31/97....... 4.15%(f) (2.66)% 70% $0.0248
Year ended 10/31/96....... 4.07(f) (2.42) 66 0.0280
11/28/94+ to 10/31/95..... 5.84*(f) (3.41) 90 --
Global Small Cap Fund
Class A
Year ended 7/31/97........ 2.41%(l) (1.25)% 129% $0.0364
Year ended 7/31/96........ 2.51 (1.22) 139 --
Year ended 7/31/95........ 2.54(f) (1.17) 128 --
Period ended 7/31/94**.... 2.42* (1.26)* 78 --
Year ended 9/30/93........ 2.53 (1.13) 97 --
Year ended 9/30/92........ 2.34 (.85) 108 --
Year ended 9/30/91........ 2.29 (.55) 104 --
Year ended 9/30/90........ 1.73 (.46) 89 --
Year ended 9/30/89........ 1.56 (.17) 106 --
Year ended 9/30/88........ 1.54 (.50) 74 --
Class B
Year ended 7/31/97........ 3.11%(l) (1.92)% 129% $0.0364
Year ended 7/31/96........ 3.21 (1.88) 139 --
Year ended 7/31/95........ 3.20(f) (1.92) 128 --
Period ended 7/31/94**.... 3.15* (1.93)* 78 --
Year ended 9/30/93........ 3.26 (1.85) 97 --
Year ended 9/30/92........ 3.11 (1.31) 108 --
Year ended 9/30/91........ 2.98 (1.39) 104 --
9/17/90++ to 9/30/90...... 2.61* (1.30)* 89 --
Class C
Year ended 7/31/97........ 3.10%(l) (1.93)% 129% $0.0364
Year ended 7/31/96........ 3.19 (1.85) 139 --
Year ended 7/31/95........ 3.25 (f) (2.10) 128 --
Period ended 7/31/94**.... 3.13* (1.92)* 78 --
5/3/93++ to 9/30/93....... 3.75* (2.51)* 97 --
</TABLE>

- --------------------------------------------------------------------------------

13
<PAGE>

<TABLE>
<CAPTION>
Net Net Net
Asset Realized and Increase
Value Unrealized (Decrease) In Dividends From Distributions
Beginning Of Net Investment Gain (Loss) On Net Asset Value Net Investment From Net
Fiscal Year or Period Period Income (Loss) Investments From Operations Income Realized Gains
------------------- ------------ -------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Global Environment Fund (n)
Class A
Year ended 10/31/97 ............ $16.48 $(.23)(b) $3.65 $3.42 $0.00 $(1.13)
Year ended 10/31/96 ............ 12.37 (.13) 4.26 4.13 (.02) 0.00
Year ended 10/31/95 ............ 11.74 .03 .60 .63 0.00 0.00
Year ended 10/31/94 ............ 10.97 0.00 .77 .77 0.00 0.00
Year ended 10/31/93 ............ 10.78 .01 .18 .19 0.00 0.00
Year ended 10/31/92 ............ 13.12 .01 (2.17) (2.16) (.10) (.08)
Year ended 10/31/91 ............ 12.46 .13 .87 1.00 (.25) (.09)
6/1/90+ to 10/31/90 ............ 13.83 .20 (1.57) (1.37) 0.00 0.00
Class B
10/3/97++ to 10/31/97 .......... 19.92 $(.20)(b) $(.96) $(1.16) $0.00 $0.00
Strategic Balanced Fund (i)
Class A
Year ended 7/31/97 ............. $18.48 $.47(b)(c) $3.56 $4.03 $(.39) $(2.33)
Year ended 7/31/96 ............. 17.98 .35 (b)(c) 1.08 1.43 (.32) (.61)
Year ended 7/31/95 ............. 16.26 .34(c) 1.64 1.98 (.22) (.04)
Period ended 7/31/94** ......... 16.46 .07(c) (.27) (.20) 0.00 0.00
Year ended 4/30/94 ............. 16.97 .16(c) .74 .90 (.24) (1.17)
Year ended 4/30/93 ............. 17.06 .39(c) .59 .98 (.42) (.65)
Year ended 4/30/92 ............. 14.48 .27(c) 2.80 3.07 (.17) (.32)
9/4/90++ to 4/30/91 ............ 12.51 .34(c) 1.66 2.00 (.03) 0.00
Class B
Year ended 7/31/97 ............. $15.89 $.28(b)(c) $3.02 $3.30 $(.27) $(2.33)
Year ended 7/31/96 ............. 15.56 .16(b)(c) .98 1.14 (.20) (.61)
Year ended 7/31/95 ............. 14.10 .22(c) 1.40 1.62 (.12) (.04)
Period ended 7/31/94** ......... 14.30 .03(c) (.23) (.20) 0.00 0.00
Year ended 4/30/94 ............. 14.92 .06(c) .63 .69 (.14) (1.17)
Year ended 4/30/93 ............. 15.51 .23(c) .53 .76 (.25) (1.10)
Year ended 4/30/92 ............. 13.96 .22(c) 2.70 2.92 (.29) (1.08)
Year ended 4/30/91 ............. 12.40 .43(c) 1.60 2.03 (.47) 0.00
Year ended 4/30/90 ............. 11.97 .50(b)(c) .60 1.10 (.25) (.42)
Year ended 4/30/89 ............. 11.45 .48(c) 1.11 1.59 (.30) (.77)
10/23/87+ to 4/30/88 ........... 10.00 .13(c) 1.38 1.51 (.06) 0.00
Class C
Year ended 7/31/97 ............. $15.89 $.28(b)(c) $3.02 $3.30 $(.27) $(2.33)
Year ended 7/31/96 ............. 15.57 .14(b)(c) .99 1.13 (.20) (.61)
Year ended 7/31/95 ............. 14.11 .16(c) 1.46 1.62 (.12) (.04)
Period ended 7/31/94** ......... 14.31 .03(c) (.23) (.20) 0.00 0.00
8/2/93++ to 4/30/94 ............ 15.64 .15(c) (.17) (.02) (.14) (1.17)
Balanced Shares
Class A
Year ended 7/31/97 ............. $14.01 $.31(b) $3.97 $4.28 $(.32) $(1.80)
Year ended 7/31/96 ............. 15.08 .37 .45 .82 (.41) (1.48)
Year ended 7/31/95 ............. 13.38 .46 1.62 2.08 (.36) (.02)
Period ended 7/31/94** ......... 14.40 .29 (.74) (.45) (.28) (.29)
Year ended 9/30/93 ............. 13.20 .34 1.29 1.63 (.43) 0.00
Year ended 9/30/92 ............. 12.64 .44 .57 1.01 (.45) 0.00
Year ended 9/30/91 ............. 10.41 .46 2.17 2.63 (.40) 0.00
Year ended 9/30/90 ............. 14.13 .45 (2.14) (1.69) (.40) (1.63)
Year ended 9/30/89 ............. 12.53 .42 2.18 2.60 (.46) (.54)
Year ended 9/30/88 ............. 16.33 .46 (1.07) (.61) (.44) (2.75)
Class B
Year ended 7/31/97 ............. $13.79 $.19(b) $3.89 $4.08 $(.24) $(1.80)
Year ended 7/31/96 ............. 14.88 .28 .42 .70 (.31) (1.48)
Year ended 7/31/95 ............. 13.23 .30 1.65 1.95 (.28) (.02)
Period ended 7/31/94** ......... 14.27 .22 (.75) (.53) (.22) (.29)
Year ended 9/30/93 ............. 13.13 .29 1.22 1.51 (.37) 0.00
Year ended 9/30/92 ............. 12.61 .37 .54 .91 (.39) 0.00
2/4/91++ to 9/30/91 ............ 11.84 .25 .80 1.05 (.28) 0.00
Class C
Year ended 7/31/97 ............. $13.81 $.20(b) $3.89 $4.09 $(.24) $(1.80)
Year ended 7/31/96 ............. 14.89 .26 .45 .71 (.31) (1.48)
Year ended 7/31/95 ............. 13.24 .30 1.65 1.95 (.28) (.02)
Period ended 7/31/94** ......... 14.28 .24 (.77) (.53) (.22) (.29)
5/3/93++ to 9/30/93 ............ 13.63 .11 .71 .82 (.17) 0.00
Income Builder Fund (h)
Class A
Year ended 10/31/97 ............ $11.57 $.50(b) $1.62 $2.12 $(.51) $(.61)
Year ended 10/31/96 ............ 10.70 .56(b) .98 1.54 (.55) (.12)
Year ended 10/31/95 ............ 9.69 .93(b) .59 1.52 (.51) 0.00
3/25/94++ to 10/31/94 .......... 10.00 .96 (1.02) (.06) (.05)(g) (.20)
Class B
Year ended 10/31/97 ............ $11.55 $.42(b) $1.61 $2.03 $(.44) $(.61)
Year ended 10/31/96 ............ 10.70 .47(b) .98 1.45 (.48) (.12)
Year ended 10/31/95 ............ 9.68 .63(b) .83 1.46 (.44) 0.00
3/25/94++ to 10/31/94 .......... 10.00 .88 (.98) (.10) (.06)(g) (.16)
</TABLE>

- --------------------------------------------------------------------------------

14
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets
Total Net Asset Investment At End Of
Dividends Value Return Based Period
And End Of on Net Asset (000's
Fiscal Year or Period Distributions Period Value (a) omitted)
------------------- -------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Global Environment Fund (h)
Class A
Year ended 10/31/97 ............ $(1.13) $18.77 23.51% $ 52,378
Year ended 10/31/96 ............ (.02) 16.48 33.48 100,271
Year ended 10/31/95 ............ 0.00 12.37 5.37 85,416
Year ended 10/31/94 ............ 0.00 11.74 7.02 81,102
Year ended 10/31/93 ............ 0.00 10.97 1.76 75,805
Year ended 10/31/92 ............ (.18) 10.78 (16.59) 74,442
Year ended 10/31/91 ............ (.34) 13.12 8.66 90,612
6/1/90+ to 10/31/90 ............ 0.00 12.46 (10.68) 86,041
Class B
10/3/97++ to 10/31/97 .......... $0.00 $18.76 (5.82)% $ 235
Strategic Balanced Fund (i)
Class A
Year ended 7/31/97 ............. $(2.72) $19.79 23.90% $ 20,312
Year ended 7/31/96 ............. (.93) 18.48 8.05 18,329
Year ended 7/31/95 ............. (.26) 17.98 12.40 10,952
Period ended 7/31/94** ......... 0.00 16.26 (1.22) 9,640
Year ended 4/30/94 ............. (1.41) 16.46 5.06 9,822
Year ended 4/30/93 ............. (1.07) 16.97 5.85 8,637
Year ended 4/30/92 ............. (.49) 17.06 20.96 6,843
9/4/90++ to 4/30/91 ............ (.03) 14.48 16.00 443
Class B
Year ended 7/31/97 ............. $(2.60) $16.59 23.01% $ 28,037
Year ended 7/31/96 ............. (.81) 15.89 7.41 28,492
Year ended 7/31/95 ............. (.16) 15.56 11.63 37,301
Period ended 7/31/94** ......... 0.00 14.10 (1.40) 43,578
Year ended 4/30/94 ............. (1.31) 14.30 4.29 43,616
Year ended 4/30/93 ............. (1.35) 14.92 4.96 36,155
Year ended 4/30/92 ............. (1.37) 15.51 20.14 31,842
Year ended 4/30/91 ............. (.47) 13.96 16.73 22,552
Year ended 4/30/90 ............. (.67) 12.40 8.85 19,523
Year ended 4/30/89 ............. (1.07) 11.97 14.66 5,128
10/23/87+ to 4/30/88 ........... (.06) 11.45 15.10 2,344
Class C
Year ended 7/31/97 ............. $(2.60) $16.59 23.01% $ 3,045
Year ended 7/31/96 ............. (.81) 15.89 7.34 3,157
Year ended 7/31/95 ............. (.16) 15.57 11.62 4,113
Period ended 7/31/94** ......... 0.00 14.11 (1.40) 4,317
8/2/93++ to 4/30/94 ............ (1.31) 14.31 .45 4,289
Balanced Shares
Class A
Year ended 7/31/97 ............. $(2.12) $16.17 33.46% $ 115,500
Year ended 7/31/96 ............. (1.89) 14.01 5.23 102,567
Year ended 7/31/95 ............. (.38) 15.08 15.99 122,033
Period ended 7/31/94** ......... (.57) 13.38 (3.21) 157,637
Year ended 9/30/93 ............. (.43) 14.40 12.52 172,484
Year ended 9/30/92 ............. (.45) 13.20 8.14 143,883
Year ended 9/30/91 ............. (.40) 12.64 25.52 154,230
Year ended 9/30/90 ............. (2.03) 10.41 (13.12) 140,913
Year ended 9/30/89 ............. (1.00) 14.13 22.27 159,290
Year ended 9/30/88 ............. (3.19) 12.53 (1.10) 111,515
Class B
Year ended 7/31/97 ............. $(2.04) $15.83 32.34% $ 24,192
Year ended 7/31/96 ............. (1.79) 13.79 4.45 18,393
Year ended 7/31/95 ............. (.30) 14.88 15.07 15,080
Period ended 7/31/94** ......... (.51) 13.23 (3.80) 14,347
Year ended 9/30/93 ............. (.37) 14.27 11.65 12,789
Year ended 9/30/92 ............. (.39) 13.13 7.32 6,499
2/4/91++ to 9/30/91 ............ (.28) 12.61 8.96 1,830
Class C
Year ended 7/31/97 ............. $(2.04) $15.86 32.37% $ 5,510
Year ended 7/31/96 ............. (1.79) 13.81 4.52 6,096
Year ended 7/31/95 ............. (.30) 14.89 15.06 5,108
Period ended 7/31/94** ......... (.51) 13.24 (3.80) 6,254
5/3/93++ to 9/30/93 ............ (.17) 14.28 6.01 1,487
Income Builder Fund (h)
Class A
Year ended 10/31/97 ............ $(1.12) $12.57 19.36% $ 2,367
Year ended 10/31/96 ............ (.67) 11.57 14.82 2,056
Year ended 10/31/95 ............ (.51) 10.70 16.22 1,398
3/25/94++ to 10/31/94 .......... (.25) 9.69 (.54) 600
Class B
Year ended 10/31/97 ............ $(1.05) $12.53 18.53% $ 8,713
Year ended 10/31/96 ............ (.60) 11.55 13.92 5,775
Year ended 10/31/95 ............ (.44) 10.70 15.55 3,769
3/25/94++ to 10/31/94 .......... (.22) 9.68 (.99) 1,998

<CAPTION>
Ratio Of Net
Ratio Of Investment
Expenses Income (Loss) Average
To Average To Average Portfolio Commission
Fiscal Year or Period Net Assets Net Assets Turnover Rate Rate (k)
------------------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Global Environment Fund (h)
Class A
Year ended 10/31/97 ............ 2.39% (1.35)% 145% $0.0506
Year ended 10/31/96 ............ 1.60 (.85) 268 0.0313
Year ended 10/31/95 ............ 1.57 .21 109 --
Year ended 10/31/94 ............ 1.67 (.04) 42 --
Year ended 10/31/93 ............ 1.62 .15 25 --
Year ended 10/31/92 ............ 1.63 .10 41 --
Year ended 10/31/91 ............ 1.49 .95 32 --
6/1/90+ to 10/31/90 ............ 1.72* 3.95* 4 --
Class B
10/3/97++ to 10/31/97 .......... 20.84% (1.03)% 145% $0.0506
Strategic Balanced Fund (i)
Class A
Year ended 7/31/97 ............. 1.41%(f)(l) 2.50%(c) 170% $0.0395
Year ended 7/31/96 ............. 1.40(f) 1.78 173 --
Year ended 7/31/95 ............. 1.40(f) 2.07 172 --
Period ended 7/31/94** ......... 1.40(f) 1.63* 21 --
Year ended 4/30/94 ............. 1.40*(f) 1.67 139 --
Year ended 4/30/93 ............. 1.40(f) 2.29 98 --
Year ended 4/30/92 ............. 1.40 1.92 103 --
9/4/90++ to 4/30/91 ............ 1.40* 3.54* 137 --
Class B
Year ended 7/31/97 ............. 2.12%(f)(l) 1.78% 170% $0.0395
Year ended 7/31/96 ............. 2.10(f) .99 173 --
Year ended 7/31/95 ............. 2.10(f) 1.38 172 --
Period ended 7/31/94** ......... 2.10*(f) .92* 21 --
Year ended 4/30/94 ............. 2.10(f) .93 139 --
Year ended 4/30/93 ............. 2.15(f) 1.55 98 --
Year ended 4/30/92 ............. 2.15 1.34 103 --
Year ended 4/30/91 ............. 2.10 3.23 137 --
Year ended 4/30/90 ............. 2.00 3.85 120 --
Year ended 4/30/89 ............. 2.00 4.31 103 --
10/23/87+ to 4/30/88 ........... 2.00* 2.44* 72 --
Class C
Year ended 7/31/97 ............. 2.12%(f)(l) 1.78% 170% $0.0395
Year ended 7/31/96 ............. 2.10(f) .99 173 --
Year ended 7/31/95 ............. 2.10(f) 1.38 172 --
Period ended 7/31/94** ......... 2.10*(f) .93* 21 --
8/2/93++ to 4/30/94 ............ 2.10*(f) .69* 139 --
Balanced Shares
Class A
Year ended 7/31/97 ............. 1.47%(l) 2.11% 207% $0.0552
Year ended 7/31/96 ............. 1.38 2.41 227 --
Year ended 7/31/95 ............. 1.32 3.12 179 --
Period ended 7/31/94** ......... 1.27* 2.50* 116 --
Year ended 9/30/93 ............. 1.35 2.50 188 --
Year ended 9/30/92 ............. 1.40 3.26 204 --
Year ended 9/30/91 ............. 1.44 3.75 70 --
Year ended 9/30/90 ............. 1.36 4.01 169 --
Year ended 9/30/89 ............. 1.42 3.29 132 --
Year ended 9/30/88 ............. 1.42 3.74 190 --
Class B
Year ended 7/31/97 ............. 2.25%(l) 1.32% 207% $0.0552
Year ended 7/31/96 ............. 2.16 1.61 227 --
Year ended 7/31/95 ............. 2.11 2.30 179 --
Period ended 7/31/94** ......... 2.05* 1.73* 116 --
Year ended 9/30/93 ............. 2.13 1.72 188 --
Year ended 9/30/92 ............. 2.16 2.46 204 --
2/4/91++ to 9/30/91 ............ 2.13* 3.19* 70 --
Class C
Year ended 7/31/97 ............. 2.23%(l) 1.37% 207% $0.0552
Year ended 7/31/96 ............. 2.15 1.63 227 --
Year ended 7/31/95 ............. 2.09 2.32 179 --
Period ended 7/31/94** ......... 2.03* 1.81* 116 --
5/3/93++ to 9/30/93 ............ 2.29* 1.47* 188 --
Income Builder Fund (h)
Class A
Year ended 10/31/97 ............ 2.09% 4.18% 159% $0.0513
Year ended 10/31/96 ............ 2.20 4.92 108 0.0600
Year ended 10/31/95 ............ 2.38 5.44 92 --
3/25/94++ to 10/31/94 .......... 2.52* 6.11* 126 --
Class B
Year ended 10/31/97 ............ 2.80% 3.48% 159% $0.0513
Year ended 10/31/96 ............ 2.92 4.19 108 0.0600
Year ended 10/31/95 ............ 3.09 4.73 92 --
3/25/94++ to 10/31/94 .......... 3.09* 5.07* 126 --
</TABLE>

- --------------------------------------------------------------------------------

15
<PAGE>

<S> <C> <C> <C> <C> <C>
Income Builder Fund (continued)
Class C
Year ended 10/31/97 ............ $11.52 $.42(b) $1.60 $2.02 $(.44)
Year ended 10/31/96 ............ 10.67 .46(b) .99 1.45 (.48)
Year ended 10/31/95 ............ 9.66 .40(b) 1.05 1.45 (.44)
Year ended 10/31/94 ............ 10.47 .50 (.85) (.35) (.11)(g)
Year ended 10/31/93 ............ 9.80 .52 .51 1.03 (.36)
Year ended 10/31/92 ............ 10.00 .55 (.28) .27 (.47)
10/25/91+ to 10/31/91 .......... 10.00 .01 0.00 .01 (.01)
Utility Income Fund
Class A
Year ended 11/30/97 ............ $10.59 $.32(b)(c) $2.04 $2.36 $(.34)
Year ended 11/30/96 ............ 10.22 .18(b)(c) .65 .83 (.46)
Year ended 11/30/95 ............ 8.97 .27(c) 1.43 1 .70 (.45)
Year ended 11/30/94 ............ 9.92 .42(c) (.89) (.47) (.48)
10/18/93+ to 11/30/93 .......... 10.00 .02(c) (.10) (.08) 0.00
Class B
Year ended 11/30/97 ............ $10.57 $.25(b)(c) $2.04 $2.29 $(.27)
Year ended 11/30/96 ............ 10.20 .10(b)(c) .67 .77 (.40)
Year ended 11/30/95 ............ 8.96 .18(c) 1.45 1.63 (.39)
Year ended 11/30/94 ............ 9.91 .37(c) (.91) (.54) (.41)
10/18/93+ 11/30/93 ............. 10.00 .01(c) (.10) (.09) 0.00
Class C
Year ended 11/30/97 ............ $10.59 $.25(b)(c) $2.03 $2.28 $(.27)
Year ended 11/30/96 ............ 10.22 .11(b)(c) .66 .77 (.40)
Year ended 11/30/95 ............ 8.97 .18(c) 1.46 1.64 (.39)
Year ended 11/30/94 ............ 9.92 .39(c) (.93) (.54) (.41)
10/27/93+ to 11/30/93 .......... 10.00 .01(c) (.09) (.08) 0.00
Growth and Income Fund
Class A
Year ended 10/31/97 ............ $3.00 $.04(b) $ .87 $ .91 $(.05)
Year ended 10/31/96 ............ 2.71 .05 .50 .55 (.05)
Year ended 10/31/95 ............ 2.35 .02 .52 .54 (.06)
Year ended 10/31/94 ............ 2.61 .06 (.08) (.02) (.06)
Year ended 10/31/93 ............ 2.48 .06 .29 .35 (.06)
Year ended 10/31/92 ............ 2.52 .06 .11 .17 (.06)
Year ended 10/31/91 ............ 2.28 .07 .56 .63 (.09)
Year ended 10/31/90 ............ 3.02 .09 (.30) (.21) (.10)
Year ended 10/31/89 ............ 3.05 .10 .43 .53 (.08)
Year ended 10/31/88 ............ 3.48 .10 .33 .43 (.08)
Class B
Year ended 10/31/97 ............ $2.99 $.02(b) $ .85 $ .87 $(.03)
Year ended 10/31/96 ............ 2.69 .03 .51 .54 (.03)
Year ended 10/31/95 ............ 2.34 .01 .49 .50 (.03)
Year ended 10/31/94 ............ 2.60 .04 (.08) (.04) (.04)
Year ended 10/31/93 ............ 2.47 .05 .28 .33 (.04)
Year ended 10/31/92 ............ 2.52 .04 .11 .15 (.05)
2/8/91++ to 10/31/91 ........... 2.40 .04 .12 .16 (.04)
Class C
Year ended 10/31/97 ............ $2.99 $.02(b) $ .85 $ .87 $(.03)
Year ended 10/31/96 ............ 2.70 .03 .50 .53 (.03)
Year ended 10/31/95 ............ 2.34 .01 .50 .51 (.03)
Year ended 10/31/94 ............ 2.60 .04 (.08) (.04) (.04)
5/3/93 ++ to 10/31/93 .......... 2.43 .02 .17 .19 (.02)
Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ............ $10.00 $.30(b) $2.88 $3.18 $(.38)(m)
Class B
10/1/96+ to 8/31/97 ............ $10.00 $.23(b) $2.89 $3.12 $(.33)(m)
Class C
10/1/96+ to 8/31/97 ............ $10.00 $.23(b) $2.89 $3.12 $(.33)(m)

Distributions
From Net
Fiscal Year or Period Realized Gains
------------------- --------------
<S> <C>
Income Builder Fund (continued)
Class C
Year ended 10/31/97 ............ $(.61)
Year ended 10/31/96 ............ (.12)
Year ended 10/31/95 ............ 0.00
Year ended 10/31/94 ............ (.35)
Year ended 10/31/93 ............ 0.00
Year ended 10/31/92 ............ 0.00
10/25/91+ to 10/31/91 .......... 0.00
Utility Income Fund
Class A
Year ended 11/30/97 ............ $(.13)
Year ended 11/30/96 ............ 0.00
Year ended 11/30/95 ............ 0.00
Year ended 11/30/94 ............ 0.00
10/18/93+ to 11/30/93 .......... 0.00
Class B
Year ended 11/30/97 ............ $(.13)
Year ended 11/30/96 ............ 0.00
Year ended 11/30/95 ............ 0.00
Year ended 11/30/94 ............ 0.00
10/18/93+ 11/30/93 ............. 0.00
Class C
Year ended 11/30/97 ............ $(.13)
Year ended 11/30/96 ............ 0.00
Year ended 11/30/95 ............ 0.00
Year ended 11/30/94 ............ 0.00
10/27/93+ to 11/30/93 .......... 0.00
Growth and Income Fund
Class A
Year ended 10/31/97 ............ $(.38)
Year ended 10/31/96 ............ (.21)
Year ended 10/31/95 ............ (.12)
Year ended 10/31/94 ............ (.18)
Year ended 10/31/93 ............ (.16)
Year ended 10/31/92 ............ (.15)
Year ended 10/31/91 ............ (.30)
Year ended 10/31/90 ............ (.43)
Year ended 10/31/89 ............ (.48)
Year ended 10/31/88 ............ (.78)
Class B
Year ended 10/31/97 ............ $(.38)
Year ended 10/31/96 ............ (.21)
Year ended 10/31/95 ............ (.12)
Year ended 10/31/94 ............ (.18)
Year ended 10/31/93 ............ (.16)
Year ended 10/31/92 ............ (.15)
2/8/91++ to 10/31/91 ........... 0.00
Class C
Year ended 10/31/97 ............ $(.38)
Year ended 10/31/96 ............ (.21)
Year ended 10/31/95 ............ (.12)
Year ended 10/31/94 ............ (.18)
5/3/93 ++ to 10/31/93 .......... 0.00
Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ............ $0.00
Class B
10/1/96+ to 8/31/97 ............ $0.00
Class C
10/1/96+ to 8/31/97 ............ $0.00
</TABLE>
- --------------------------------------------------------------------------------
Please refer to the footnotes on page 18.

16
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets
Total Net Asset Investment At End Of
Dividends Value Return Based Period
And End Of on Net Asset (000's
Fiscal Year or Period Distributions Period Value (a) omitted)
------------------- -------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Income Builder Fund (continued)
Class C
Year ended 10/31/97 ............ $(1.05) $12.49 18.50% $ 45,765
Year ended 10/31/96 ............ (.60) 11.52 13.96 44,441
Year ended 10/31/95 ............ (.44) 10.67 15.47 49,107
Year ended 10/31/94 ............ (.46) 9.66 (3.44) 64,027
Year ended 10/31/93 ............ (.36) 10.47 10.65 106,034
Year ended 10/31/92 ............ (.47) 9.80 2.70 152,617
10/25/91+ to 10/31/91 .......... (.01) 10.00 .11 41,813
Utility Income Fund
Class A
Year ended 11/30/97 ............ $(.47) $12.48 23.10% $ 4,117
Year ended 11/30/96 ............ (.46) 10.59 8.47 3,294
Year ended 11/30/95 ............ (.45) 10.22 19.58 2,748
Year ended 11/30/94 ............ (.48) 8.97 (4.86) 1,068
10/18/93+ to 11/30/93 .......... 0.00 9.92 (.80) 229
Class B
Year ended 11/30/97 ............ $(.40) $12.46 22.35% $ 14,782
Year ended 11/30/96 ............ (.40) 10.57 7.82 13,561
Year ended 11/30/95 ............ (.39) 10.20 18.66 10,988
Year ended 11/30/94 ............ (.41) 8.96 (5.59) 2,353
10/18/93+ 11/30/93 ............. 0.00 9.91 (.90) 244
Class C
Year ended 11/30/97 ............ $(.40) $12.47 22.21% $ 3,413
Year ended 11/30/96 ............ (.40) 10.59 7.81 3,376
Year ended 11/30/95 ............ (.39) 10.22 18.76 3,500
Year ended 11/30/94 ............ (.41) 8.97 (5.58) 2,651
10/27/93+ to 11/30/93 .......... 0.00 9.92 (.80) 18
Growth and Income Fund
Class A
Year ended 10/31/97 ............ $(.43) $3.48 33.28% $ 787,566
Year ended 10/31/96 ............ (.26) 3.00 21.51 553,151
Year ended 10/31/95 ............ (.18) 2.71 24.21 458,158
Year ended 10/31/94 ............ (.24) 2.35 (.67) 414,386
Year ended 10/31/93 ............ (.22) 2.61 14.98 459,372
Year ended 10/31/92 ............ (.21) 2.48 7.23 417,018
Year ended 10/31/91 ............ (.39) 2.52 31.03 409,597
Year ended 10/31/90 ............ (.53) 2.28 (8.55) 314,670
Year ended 10/31/89 ............ (.56) 3.02 21.59 377,168
Year ended 10/31/88 ............ (.86) 3.05 16.45 350,510
Class B
Year ended 10/31/97 ............ $(.41) $3.45 31.83% $ 456,399
Year ended 10/31/96 ............ (.24) 2.99 21.20 235,263
Year ended 10/31/95 ............ (.15) 2.69 22.84 136,758
Year ended 10/31/94 ............ (.22) 2.34 (1.50) 102,546
Year ended 10/31/93 ............ (.20) 2.60 14.22 76,633
Year ended 10/31/92 ............ (.20) 2.47 6.22 29,656
2/8/91++ to 10/31/91 ........... (.04) 2.52 6.83 10,221
Class C
Year ended 10/31/97 ............ $(.41) $3.45 31.83% $ 106,526
Year ended 10/31/96 ............ (.24) 2.99 20.72 61,356
Year ended 10/31/95 ............ (.15) 2.70 23.30 35,835
Year ended 10/31/94 ............ (.22) 2.34 (1.50) 19,395
5/3/93 ++ to 10/31/93 .......... (.02) 2.60 7.85 7,774
Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ............ $(.38) $12.80 32.24% $ 37,638
Class B
10/1/96+ to 8/31/97 ............ $(.33) $12.79 31.49% $ 186,802
Class C
10/1/96+ to 8/31/97 ............ $(.33) $12.79 31.49% $ 42,719

<CAPTION>
Ratio Of Net
Ratio Of Investment
Expenses Income (Loss) Average
To Average To Average Portfolio Commission
Fiscal Year or Period Net Assets Net Assets Turnover Rate Rate (k)
------------------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Income Builder Fund (continued)
Class C
Year ended 10/31/97 ............ 2.80% 3.49% 159% $0.0513
Year ended 10/31/96 ............ 2.93 4.13 108 0.0600
Year ended 10/31/95 ............ 3.02 4.81 92 --
Year ended 10/31/94 ............ 2.67 3.82 126 --
Year ended 10/31/93 ............ 2.32 6.85 101 --
Year ended 10/31/92 ............ 2.33 5.47 108 --
10/25/91+ to 10/31/91 .......... 0.00* .94* 0 --
Utility Income Fund
Class A
Year ended 11/30/97 ............ 1.50%(f) 2.89% 37% $0.0442
Year ended 11/30/96 ............ 1.50(f) 1.67 98 0.0536
Year ended 11/30/95 ............ 1.50(f) 2.48 162 --
Year ended 11/30/94 ............ 1.50(f) 4.13 30 --
10/18/93+ to 11/30/93 .......... 1.50*(f) 2.35* 11 --
Class B
Year ended 11/30/97 ............ 2.20%(f) 2.27% 37% $0.0442
Year ended 11/30/96 ............ 2.20(f) .95 98 0.0536
Year ended 11/30/95 ............ 2.20(f) 1.60 162 --
Year ended 11/30/94 ............ 2.20(f) 3.53 30 --
10/18/93+ 11/30/93 ............. 2.20*(f) 2.84* 11 --
Class C
Year ended 11/30/97 ............ 2.20%(f) 2.27% 37% $0.0442
Year ended 11/30/96 ............ 2.20(f) .94 98 0.0536
Year ended 11/30/95 ............ 2.20(f) 1.88 162 --
Year ended 11/30/94 ............ 2.20(f) 3.60 30 --
10/27/93+ to 11/30/93 .......... 2.20*(f) 3.08* 11 --
Growth and Income Fund
Class A
Year ended 10/31/97 ............ .92%(l) 1.39%* 88% $0.0589
Year ended 10/31/96 ............ .97 1.73 88 0.0625
Year ended 10/31/95 ............ 1.05 1.88 142 --
Year ended 10/31/94 ............ 1.03 2.36 68 --
Year ended 10/31/93 ............ 1.07 2.38 91 --
Year ended 10/31/92 ............ 1.09 2.63 104 --
Year ended 10/31/91 ............ 1.14 2.74 84 --
Year ended 10/31/90 ............ 1.09 3.40 76 --
Year ended 10/31/89 ............ 1.08 3.49 79 --
Year ended 10/31/88 ............ 1.09 3.09 66 --
Class B
Year ended 10/31/97 ............ 1.72%(l) .56% 88% $0.0589
Year ended 10/31/96 ............ 1.78 .91 88 0.0625
Year ended 10/31/95 ............ 1.86 1.05 142 --
Year ended 10/31/94 ............ 1.85 1.56 68 --
Year ended 10/31/93 ............ 1.90 1.58 91 --
Year ended 10/31/92 ............ 1.90 1.69 104 --
2/8/91++ to 10/31/91 ........... 1.99* 1.67* 84 --
Class C
Year ended 10/31/97 ............ 1.71%(l) .58% 88% $0.0589
Year ended 10/31/96 ............ 1.76 .93 88 0.0625
Year ended 10/31/95 ............ 1.84 1.04 142 --
Year ended 10/31/94 ............ 1.84 1.61 68 --
5/3/93 ++ to 10/31/93 .......... 1.96* 1.45* 91 --
Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ............ 1.77%*(l) 2.73%* 20% $0.0518
Class B
10/1/96+ to 8/31/97 ............ 2.44%*(l) 2.08%* 20% $0.0518
Class C
10/1/96+ to 8/31/97 ............ 2.43%*(l) 2.06%* 20% $0.0518
</TABLE>

- --------------------------------------------------------------------------------

17
<PAGE>

- ----------

+ Commencement of operations.
++ Commencement of distribution.
* Annualized.
** Reflects a change in fiscal year end.
(a) 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 the net asset value during the period, and a
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment returns calculated for periods of
less than one year are not annualized.
(b) Based on average shares outstanding.
(c) Net of fee waiver and expense reimbursement.
(d) Adjusted for a 200% stock dividend paid to shareholders of record on
January 15, 1988.
(e) Net of offering costs of ($.05).
(f) Net of expenses assumed and/or waived/reimbursed. If the following Funds
had borne all expenses in their most recent five fiscal years, their
expense ratios, without giving effect to the expense offset arrangement
described in (l) below, would have been as follows:

<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
All-Asia Investment Fund
<S> <C> <C> <C> <C> <C>
Class A -- -- 10.57%# 3.61% 3.57%
Class B -- -- 11.32%# 4.33% 4.27%
Class C -- -- 11.38%# 4.30% 4.27%
Growth Fund
Class A 1.84% 1.46% -- -- --
Class B 2.52% 2.13% -- -- --
Class C -- 2.13%# --
Global Small Cap Fund
Class A -- -- 2.61% -- --
Class B -- -- 3.27% -- --
Class C -- -- 3.31% -- --

Strategic Balanced Fund
Class A 1.85% 1.70%1 1.81% 1.76% 2.06%
1.94%#2
Class B 2.56% 2.42%1 2.49% 2.47% 2.76%
2.64%#2
Class C -- 2.07%#1 2.50% 2.48% 2.76%
2.64%#2
Utility Income Fund
Class A 145.63%# 13.72% 4.86%# 3.38% 3.55%
Class B 133.62%# 14.42% 5.34%# 4.08% 4.28%
Class C 148.03%# 14.42% 5.99%# 4.07% 4.28%
</TABLE>

- ----------
# annualized
1. For the period ended April 30, 1994
2. For the period ended July 31, 1994
For the expense ratios of the Funds in years prior to fiscal year 1993, assuming
the Funds had borne all expenses, please see the Financial Statements in each
Fund's Statement of Additional Information.

(g) "Dividends from Net Investment Income" includes a return of capital. Income
Builder Fund had a return of capital with respect to Class A shares, for
the period ended October 31, 1994, of $(.01); with respect to Class B
shares, $(.01); and with respect to Class C shares, for the year ended
October 31, 1994, $(.02).
(h) On March 25, 1994, all existing shares of Income Builder Fund, previously
known as Alliance Multi-Market Income and Growth Trust, were converted into
Class C shares.
(i) Prior to July 22, 1993, Equitable Capital Management Corporation
("Equitable Capital") served as the investment adviser to the predecessor
to The Alliance Portfolios, of which Growth Fund and Strategic Balanced
Fund are series. On July 22, 1993, Alliance acquired the business and
substantially all assets of Equitable Capital and became investment adviser
to the Funds.
(j) "Distributions from Net Realized Gains" includes a return of capital of
$(.12).
(k) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
(l) Amounts do not reflect the impact of expense offset arrangements with the
transfer agent. Taking into account such expense offset arrangements, the
ratio of expenses to average net assets, assumng the assumption and/or
waiver/reimbursement of expenses described in (f) above, would have been as
follows:

<TABLE>
<CAPTION>
Balanced Shares 1997 International Fund 1997 Strategic Balanced 1997
<S> <C> <C> <C> <C> <C>
Class A 1.46% Class A 1.73% Class A 1.40%
Class B 2.24% Class B 2.58% Class B 2.10%
Class C 2.22% Class C 2.56% Class C 2.10%

Real Estate 1997 Global Small Cap Fund 1997 New Europe 1997
Class A 1.77% Class A 2.38% Class A 2.04%
Class B 2.43% Class B 3.08% Class B 2.74%
Class C 2.42% Class C 3.08% Class C 2.73%

Growth Fund 1997 Technology 1997 Growth and Income 1997
Class A 1.25% Class A 1.66% Class A .91%
Class B 1.95% Class B 2.36% Class B 1.71%
Class C 1.95% Class C 2.37% Class C 1.70%

(m) Distributions from net investment income include a tax return of capital of
$.08, $.09 and $.08 for Class A, B and C shares, respectively.

(n) Global Environment Fund operated as a closed-end investment company
through October 3, 1997, when it converted to an open-end investment
company and all shares of its common stock then outstanding were
reclassified as Class A shares.

</TABLE>

18
<PAGE>

- --------------------------------------------------------------------------------
GLOSSARY
- --------------------------------------------------------------------------------

The following terms are frequently used in this Prospectus.

Equity securities, except as noted otherwise, are (i) common stocks, partnership
interests, business trust shares and other equity or ownership interests in
business enterprises, and (ii) securities convertible into, and rights and
warrants to subscribe for the purchase of, such stocks, shares and
interests.

Debt securities are bonds, debentures, notes, bills, repurchase agreements,
loans, other direct debt instruments and other fixed, floating and variable rate
debt obligations, but do not include convertible securities.

Fixed-income securities are debt securities and dividend-paying preferred stocks
and include floating rate and variable rate instruments.

Convertible securities are fixed-income securities that are convertible into
common stock.

U.S. Government securities are securities issued or guaranteed by the United
States Government, its agencies or instrumentalities.

Foreign government securities are securities issued or guaranteed, as to payment
of principal and interest, by governments, quasi-governmental entities,
governmental agencies or other governmental entities.

Asian company is an entity that (i) is organized under the laws of an Asian
country and conducts business in an Asian country, (ii) derives 50% or more of
its total revenues from business in Asian countries, or (iii) issues equity or
debt securities that are traded principally on a stock exchange in an Asian
country.

Asian countries are Australia, the Democratic Socialist Republic of Sri Lanka,
the Hong Kong Special Administrative Region of the People's Republic of China
(Hong Kong), the Islamic Republic of Pakistan, Japan, the Kingdom of Thailand,
Malaysia, Negara Brunei Darussalam (Brunei), New Zealand, the People's Republic
of China, the People's Republic of Kampuchea (Cambodia), the Republic of China
(Taiwan), the Republic of India, the Republic of Indonesia, the Republic of
Korea (South Korea), the Republic of the Philippines, the Republic of Singapore,
the Socialist Republic of Vietnam and the Union of Myanmar.

Eligible Companies are companies expected to benefit from advances or
improvements in products, processes or services intended to foster the
protection of the environment.

Environmental Companies are Eligible Companies that have a principal business
involving the sale of systems or services intended to foster environmental
protection, such as waste treatment and disposal, remediation, air pollution
control and recycling.

Beneficiary Companies are Eligible Companies whose principal businesses lie
outside the environmental sector but nevertheless anticipate environmental
regulations or consumer preferences through the development of new products,
processes or services that are intended to contribute to a cleaner and healthier
environment, such as companies that anticipate the demand for plastic
substitutes, aerosol substitutes, alternative fuels and processes that generate
less hazardous waste.

Moody's is Moody's Investors Service, Inc.

S&P is Standard & Poor's Ratings Services.

Duff & Phelps is Duff & Phelps Credit Rating Co.

Fitch is Fitch IBCA, Inc

Investment grade securities are fixed-income securities rated Baa and above by
Moody's or BBB and above by S&P, Duff & Phelps or Fitch, or determined by
Alliance to be of equivalent quality.

Lower-rated securities are fixed-income securities rated Ba or below by Moody's
or BB or below by S&P, Duff & Phelps or Fitch, or determined by Alliance to be
of equivalent quality, and are commonly referred to as "junk bonds."

Prime commercial paper is commercial paper rated Prime 1 by Moody's or A-1 or
higher by S&P or, if not rated, issued by companies that have an outstanding
debt issue rated Aa or higher by Moody's or AA or higher by S&P.

Qualifying bank deposits are certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of banks having total assets of more than $1
billion and which are members of the Federal Deposit Insurance Corporation.

Rule 144A securities are securities that may be resold pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act").

Depositary receipts include American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and other types of depositary receipts.

Commission is the Securities and Exchange Commission.

1940 Act is the Investment Company Act of 1940, as amended.

Code is the Internal Revenue Code of 1986, as amended.

Exchange is the New York Stock Exchange.

19
<PAGE>

- --------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- --------------------------------------------------------------------------------

Except as noted, (i) the Funds' investment objectives are "fundamental" and
cannot be changed without shareholder vote, and (ii) the Funds' investment
policies are not fundamental and thus can be changed without a shareholder vote.
No Fund will change a non-fundamental objective or policy without notifying its
shareholders. There is no guarantee that any Fund will achieve its investment
objective.

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds have been designed to offer investors seeking capital
appreciation a range of alternative approaches to investing in the U.S. equity
markets.

The Alliance Fund

The Alliance Fund, Inc. ("Alliance Fund") is a diversified investment company
that seeks long-term growth of capital and income primarily through investment
in common stocks. The Fund normally invests substantially all of its assets in
common stocks that Alliance believes will appreciate in value, but it may invest
in other types of securities such as convertible securities, high grade
instruments, U.S. Government securities and high quality, short-term obligations
such as repurchase agreements, bankers' acceptances and domestic certificates of
deposit, and may invest without limit in foreign securities. While the
diversification and generally high quality of the Fund's investments cannot
prevent fluctuations in market values, they tend to limit investment risk and
contribute to achieving the Fund's objective. The Fund generally does not effect
portfolio transactions in order to realize short-term trading profits or
exercise control.

The Fund may also: (i) make secured loans of its portfolio securities equal in
value up to 25% of its total assets to brokers, dealers and financial
institutions; (ii) enter into repurchase agreements of up to one week in
duration with commercial banks, but only if those agreements together with any
restricted securities and any securities which do not have readily available
market quotations do not exceed 10% of its net assets; and (iii) write
exchange-traded covered call options with respect to up to 25% of its total
assets. For additional information on the use, risks and costs of these policies
and practices see "Additional Investment Practices."

Alliance Growth Fund

Alliance Growth Fund ("Growth Fund") is a diversified investment company that
seeks long-term growth of capital. Current income is only an incidental
consideration. The Fund seeks to achieve its objective by investing primarily in
equity securities of companies with favorable earnings outlooks and whose
long-term growth rates are expected to exceed that of the U.S. economy over
time. The Fund's investment objective is not fundamental.

The Fund may also invest up to 25% of its total assets in lower-rated
fixed-income and convertible bonds. See "Risk Considerations--Securities
Ratings" and "--Investment in Lower-Rated Fixed-Income Securities." The Fund
generally will not invest in securities rated at the time of purchase below Caa-
by Moody's and CCC- by S&P, Duff & Phelps or Fitch or in securities judged by
Alliance to be of comparable investment quality. However, from time to time, the
Fund may invest in securities rated in the lowest grades (i.e., C by Moody's or
D or equivalent by S&P, Duff & Phelps or Fitch), or securities Alliance judges
to be of comparable investment quality, if there are prospects for an upgrade or
a favorable conversion into equity securities. If the credit rating of a
security held by the Fund falls below its rating at the time of purchase (or
Alliance determines that the quality of such security has so deteriorated), the
Fund may continue to hold the security if such investment is considered
appropriate under the circumstances.

The Fund may also: (i) invest in "zero-coupon" bonds and "payment-in-kind"
bonds; (ii) invest in foreign securities, although the Fund will not generally
invest more than 15% of its total assets in foreign securities; (iii) invest in
securities that are not publicly traded, including Rule 144A securities; (iv)
buy or sell foreign currencies, options on foreign currencies, foreign currency
futures contracts (and related options) and deal in forward foreign exchange
contracts; (v) lend portfolio securities amounting to not more than 25% of its
total assets; (vi) enter into repurchase agreements of up to 25% of its total
assets and purchase and sell securities on a forward commitment basis; (vii) buy
and sell stock index futures contracts and buy and sell options on those
contracts and on stock indices; (viii) purchase and sell futures contracts,
options thereon and options with respect to U.S. Treasury securities; (ix) write
covered call and put options on securities it owns or in which it may invest;
and (x) purchase and sell put and call options. For additional information on
the use, risks and costs of these policies and practices see "Additional
Investment Practices."

Alliance Premier Growth Fund

Alliance Premier Growth Fund, Inc. ("Premier Growth Fund") is a diversified
investment company that seeks long-term growth of capital by investing
predominantly in the equity securities of a limited number of large, carefully
selected, high-quality U.S. companies that are judged likely to achieve superior
earnings growth. Normally, about 40 companies will be represented in the Fund's
portfolio, with the 25 most highly regarded of these companies usually
constituting approximately 70% of the Fund's net assets. The Fund is thus
atypical from most equity mutual funds in its focus on a relatively small number
of intensively researched companies and is designed for those seeking to
accumulate capital over time with less volatility than that associated with
investment in smaller companies.

As a matter of fundamental policy, the Fund normally invests at least 85% of its
total assets in the equity securities of U.S. companies. These are companies (i)
organized under U.S. law that have their principal office in the U.S., and (ii)
the equity securities of which are traded principally in the U.S.

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Alliance's investment strategy for the Fund emphasizes stock selection and
investment in the securities of a limited number of issuers. Alliance relies
heavily upon the fundamental analysis and research of its large internal
research staff, which generally follows a primary research universe of more than
600 companies that have strong management, superior industry positions,
excellent balance sheets and superior earnings growth prospects. An emphasis is
placed on identifying companies whose substantially above average prospective
earnings growth is not fully reflected in current market valuations.

In managing the Fund, Alliance seeks to utilize market volatility judiciously
(assuming no change in company fundamentals), striving to capitalize on
apparently unwarranted price fluctuations, both to purchase or increase
positions on weakness and to sell or reduce overpriced holdings. The Fund
normally remains nearly fully invested and does not take significant cash
positions for market timing purposes. During market declines, while adding to
positions in favored stocks, the Fund becomes somewhat more aggressive,
gradually reducing the number of companies represented in its portfolio.
Conversely, in rising markets, while reducing or eliminating fully valued
positions, the Fund becomes somewhat more conservative, gradually increasing the
number of companies represented in its portfolio. Alliance thus seeks to gain
positive returns in good markets while providing some measure of protection in
poor markets.

Alliance expects the average market capitalization of companies represented in
the Fund's portfolio normally to be in the range, or in excess, of the average
market capitalization of companies comprising the "S&P 500" (the Standard &
Poor's 500 Composite Stock Price Index, a widely recognized unmanaged index of
market activity).

The Fund may also: (i) invest up to 20% of its net assets in convertible
securities of companies whose common stocks are eligible for purchase by it;
(ii) invest up to 5% of its net assets in rights or warrants; (iii) invest up to
15% of its total assets in securities of foreign issuers whose common stocks are
eligible for purchase by it; (iv) purchase and sell exchange-traded index
options and stock index futures contracts; and (v) write covered exchange-traded
call options on common stocks, unless as a result, the amount of its securities
subject to call options would exceed 15% of its total assets, and purchase and
sell exchange-traded call and put options on common stocks written by others,
but the total cost of all options held by the Fund (including exchange-traded
index options) may not exceed 10% of its total assets. For additional
information on the use, risks and costs of these policies and practices see
"Additional Investment Practices." The Fund will not write put options.

Alliance Technology Fund

Alliance Technology Fund, Inc. ("Technology Fund") is a diversified investment
company that emphasizes growth of capital and invests for capital appreciation,
and only incidentally for current income. The Fund may seek income by writing
listed call options. The Fund invests primarily in securities of companies
expected to benefit from technological advances and improvements (i.e.,
companies that use technology extensively in the development of new or improved
products or processes). The Fund will normally have at least 80% of its assets
invested in the securities of these companies. The Fund normally will have
substantially all its assets invested in equity securities, but it also invests
in debt securities offering an opportunity for price appreciation. The Fund will
invest in listed and unlisted securities and U.S. and foreign securities, but it
will not purchase a foreign security if as a result 10% or more of the Fund's
total assets would be invested in foreign securities.

The Fund's policy is to invest in any company and industry and in any type of
security with potential for capital appreciation. It invests in well-known and
established companies and in new and unseasoned companies.

The Fund may also: (i) write and purchase exchange-listed call options and
purchase listed put options, including exchange-traded index put options; (ii)
invest up to 10% of its total assets in warrants; (iii) invest in restricted
securities and in other assets having no ready market if as a result no more
than 10% of the Fund's net assets are invested in such securities and assets;
(iv) lend portfolio securities equal in value to not more than 30% of the Fund's
total assets; and (v) invest up to 10% of its total assets in foreign
securities. For additional information on the use, risks and costs of the
policies and practices see "Additional Investment Practices."

Alliance Quasar Fund

Alliance Quasar Fund, Inc. ("Quasar Fund") is a diversified investment company
that seeks growth of capital by pursuing aggressive investment policies. It
invests for capital appreciation and only incidentally for current income. The
selection of securities based on the possibility of appreciation cannot prevent
loss in value. Moreover, because the Fund's investment policies are aggressive,
an investment in the Fund is risky and investors who want assured income or
preservation of capital should not invest in the Fund.

The Fund invests in any company and industry and in any type of security with
potential for capital appreciation. It invests in well-known and established
companies and in new and unseasoned companies. When selecting securities,
Alliance considers the economic and political outlook, the values of specific
securities relative to other investments, trends in the determinants of
corporate profits and management capability and practices.

The Fund invests principally in equity securities, but it also invests to a
limited degree in non-convertible bonds and preferred stocks. The Fund invests
in listed and unlisted U.S. and foreign securities. The Fund periodically
invests in special situations, which occur when the securities of a company are
expected to appreciate due to a development particularly or uniquely applicable
to that company and regardless of general business conditions or movements of
the market as a whole.

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The Fund may also: (i) invest in restricted securities and in other assets
having no ready market, but not more than 10% of its total assets may be
invested in such securities or assets; (ii) make short sales of securities
"against the box," but not more than 15% of its net assets may be deposited on
short sales; and (iii) write call options and purchase and sell put and call
options written by others. For additional information on the use, risks and
costs of these policies and practices see "Additional Investment Practices."

GLOBAL STOCK FUNDS

The Global Stock Funds have been designed to enable investors to participate in
the potential for long-term capital appreciation available from investment in
foreign securities.

Alliance International Fund

Alliance International Fund ("International Fund") is a diversified investment
company that seeks a total return on its assets from long-term growth of capital
and from income primarily through a broad portfolio of marketable securities of
established non-U.S. companies, companies participating in foreign economies
with prospects for growth, including U.S. companies having their principal
activities and interests outside the U.S. and foreign government securities.
Normally, more than 80% of the Fund's assets will be invested in such issuers.

The Fund expects to invest primarily in common stocks of established non-U.S.
companies that Alliance believes have potential for capital appreciation or
income or both, but the Fund is not required to invest exclusively in common
stocks or other equity securities, and it may invest in any other type of
investment grade security, including convertible securities, as well as in
warrants, or obligations of the U.S. or foreign governments and their political
subdivisions.

The Fund intends to diversify its investments broadly among countries and
normally invests in at least three foreign countries, although it may invest a
substantial portion of its assets in one or more of such countries. In this
regard, at December 31, 1997, approximately 20% of the Fund's assets were
invested in securities of Japanese issuers. The Fund may invest in companies,
wherever organized, that Alliance judges have their principal activities and
interests outside the U.S. These companies may be located in developing
countries, which involves exposure to economic structures that are generally
less diverse and mature, and to political systems which can be expected to have
less stability, than those of developed countries. The Fund currently does not
intend to invest more than 10% of its total assets in companies in, or
governments of, developing countries.

The Fund may also: (i) purchase or sell forward foreign currency exchange
contracts; (ii) write, sell and purchase U.S. or foreign exchange-listed put and
call options, including exchange-traded index options; (iii) enter into
financial futures contracts, including contracts for the purchase or sale for
future delivery of foreign currencies and stock index futures, and purchase and
write put and call options on futures contracts traded on U.S. or foreign
exchanges or over-the-counter; (iv) purchase and write put options on foreign
currencies traded on securities exchanges or boards of trade or
over-the-counter; (v) lend portfolio securities equal in value to not more than
30% of its total assets; and (vi) enter into repurchase agreements of up to
seven days' duration, provided that not more than 10% of the Fund's total assets
would be so invested. For additional information on the use, risks and costs of
these policies and practices see "Additional Investment Practices."

Alliance Worldwide Privatization Fund

Alliance Worldwide Privatization Fund, Inc. ("Worldwide Privatization Fund") is
a non-diversified investment company that seeks long-term capital appreciation.
As a fundamental policy, the Fund invests at least 65% of its total assets in
equity securities issued by enterprises that are undergoing, or have undergone,
privatization (as described below), although normally significantly more of its
assets will be invested in such securities. The balance of its investments will
include securities of companies believed by Alliance to be beneficiaries of
privatizations. The Fund is designed for investors desiring to take advantage of
investment opportunities, historically inaccessible to U.S. individual
investors, that are created by privatizations of state enterprises in both
established and developing economies, including those in Western Europe and
Scandinavia, Australia, New Zealand, Latin America, Asia and Eastern and Central
Europe and, to a lesser degree, Canada and the United States.

The Fund's investments in enterprises undergoing privatization may comprise
three distinct situations. First, the Fund may invest in the initial offering of
publicly traded equity securities (an "initial equity offering") of a
government-or state-owned or controlled company or enterprise (a "state
enterprise"). Secondly, the Fund may purchase securities of a current or former
state enterprise following its initial equity offering. Finally, the Fund may
make privately negotiated purchases of stock or other equity interests in a
state enterprise that has not yet conducted an initial equity offering. Alliance
believes that substantial potential for capital appreciation exists as
privatizing enterprises rationalize their management structures, operations and
business strategies in order to compete efficiently in a market economy, and the
Fund will thus emphasize investments in such enterprises.

The Fund diversifies its investments among a number of countries and normally
invests in issuers based in at least four, and usually considerably more,
countries. No more than 15% of the Fund's total assets, however, will be
invested in issuers in any one foreign country, except that the Fund may invest
up to 30% of its total assets in issuers in any one of France, Germany, Great
Britain, Italy and Japan. The Fund may invest all of its assets within a single
region of the world. To the extent that the Fund's assets are invested within
any one region, the Fund may be subject to any special risks that may be
associated with that region.

Privatization is a process through which the ownership and control of companies
or assets changes in whole or in part from the public sector to the private
sector. Through

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privatization a government or state divests or transfers all or a portion of its
interest in a state enterprise to some form of private ownership. Governments
and states with established economies, including France, Great Britain, Germany
and Italy, and those with developing economies, including Argentina, Mexico,
Chile, Indonesia, Malaysia, Poland and Hungary, are engaged in privatizations.
The Fund will invest in any country believed to present attractive investment
opportunities.

A major premise of the Fund's approach is that the equity securities of
privatized companies offer opportunities for significant capital appreciation.
In particular, because privatizations are integral to a country's economic
restructuring, securities sold in initial equity offerings often are priced
attractively so as to secure the issuer's successful transition to private
sector ownership. Additionally, these enterprises often dominate their local
markets and typically have the potential for significant managerial and
operational efficiency gains.

Although the Fund anticipates that it will not concentrate its investments in
any industry, it is permitted to invest more than 25% of its total assets in
issuers whose primary business activity is that of national commercial banking.
Prior to so concentrating, however, the Fund's Directors must determine that its
ability to achieve its investment objective would be adversely affected if it
were not permitted to concentrate. The staff of the Commission is of the view
that registered investment companies may not, absent shareholder approval,
change between concentration and non-concentration in a single industry. The
Fund disagrees with the staff's position but has undertaken that it will not
concentrate in the securities of national commercial banks until, if ever, the
issue is resolved. If the Fund were to invest more than 25% of its total assets
in national commercial banks, the Fund's performance could be significantly
influenced by events or conditions affecting this industry, which is subject to,
among other things, increases in interest rates and deteriorations in general
economic conditions, and the Fund's investments may be subject to greater risk
and market fluctuation than if its portfolio represented a broader range of
investments.

The Fund may invest up to 35% of its total assets in debt securities and
convertible debt securities of issuers whose common stocks are eligible for
purchase by the Fund. The Fund may maintain not more than 5% of its net assets
in lower-rated securities. See "Risk Considerations--Securities Ratings" and
"--Investment in Lower-Rated Fixed-Income Securities." The Fund will not retain
a non-convertible security that is downgraded below C or determined by Alliance
to have undergone similar credit quality deterioration following purchase.

The Fund may also: (i) invest up to 20% of its total assets in rights or
warrants; (ii) write covered put and call options and purchase put and call
options on securities of the types in which it is permitted to invest and on
exchange-traded index options; (iii) enter into contracts for the purchase or
sale for future delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of U.S. Government
securities, foreign government securities, or common stock and may purchase and
write options on future contracts; (iv) purchase and write put and call options
on foreign currencies for hedging purposes; (v) purchase or sell forward
contracts; (vi) enter in forward commitments for the purchase or sale of
securities; (vii) enter into standby commitment agreements; (viii) enter into
currency swaps for hedging purposes; (ix) enter into repurchase agreements
pertaining to U.S. Government securities with member banks of the Federal
Reserve System or primary dealers in such securities; (x) make short sales of
securities or maintain a short position; and (xi) make secured loans of its
portfolio securities not in excess of 30% of its total assets to entities with
which it can enter into repurchase agreements. For additional information on the
use, risks and costs of these policies and practices see "Additional Investment
Practices."

Alliance New Europe Fund

Alliance New Europe Fund, Inc. ("New Europe Fund") is a non-diversified
investment company that seeks long-term capital appreciation through investment
primarily in the equity securities of companies based in Europe. The Fund
intends to invest substantially all of its assets in the equity securities of
European companies and has a fundamental policy of normally investing at least
65% of its total assets in such securities. Up to 35% of its total assets may be
invested in high quality U.S. dollar or foreign currency denominated
fixed-income securities issued or guaranteed by European governmental entities,
or by European or multinational companies or supranational organizations.

Alliance believes that the quickening pace of economic integration and political
change in Europe creates the potential for many European companies to experience
rapid growth and that the emergence of new market economies in Europe and the
broadening and strengthening of other European economies may significantly
accelerate economic development. The Fund will invest in companies that Alliance
believes possess rapid growth potential. Thus, the Fund will emphasize
investments in larger, established companies, but will also invest in smaller,
emerging companies.

In recent years, economic ties between the former "east bloc" countries of
Eastern Europe and certain other European countries have been strengthened.
Alliance believes that as this strengthening continues, some Western European
financial institutions and other companies will have special opportunities to
facilitate East-West transactions. The Fund will seek investment opportunities
among such companies and, as such become available, within the former "east
bloc," although the Fund will not invest more than 20% of its total assets in
issuers based therein, or more than 10% of its total assets in issuers based in
any one such country.

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<PAGE>

without limit in a single European country. While the Fund does not intend to
concentrate its investments in a single country, at times 25% or more of its
assets may be invested in issuers located in a single country. During such
times, the Fund would be subject to a correspondingly greater risk of loss due
to adverse political or regulatory developments, or an economic downturn, within
that country. In this regard, at December 31, 1997, approximately 24% of the
Fund's assets were invested in securities of issuers in the United Kingdom.

The Fund may also: (i) invest up to 10% of its total assets in securities for
which there is no ready market; (ii) invest up to 20% of its total assets in
warrants and rights to purchase equity securities of European companies; (iii)
invest in depositary receipts or other securities convertible into securities of
companies based in European countries, debt securities of supranational entities
denominated in the currency of any European country, debt securities denominated
in European Currency Units of an issuer in a European country (including
supranational issuers) and "semi-governmental securities"; (iv) purchase and
sell forward contracts; (v) write, sell and purchase exchange-traded put and
call options, including exchange-traded index options; (vi) enter into financial
futures contracts, including contracts for the purchase or sale for future
delivery of foreign currencies and futures contracts based on stock indices, and
purchase and write options on futures contracts; (vii) purchase and write put
options on foreign currencies traded on securities exchanges or boards of trade
or over-the-counter; (viii) make secured loans of portfolio securities not in
excess of 30% of its total assets to brokers, dealers and financial
institutions; (ix) enter into forward commitments for the purchase or sale of
securities; and (x) enter into standby commitment agreements. For additional
information on the use, risks and costs of these policies and practices see
"Additional Investment Practices."

Alliance All-Asia Investment Fund

Alliance All-Asia Investment Fund, Inc. ("All-Asia Investment Fund") is a
non-diversified investment company whose investment objective is to seek
long-term capital appreciation. In seeking to achieve its investment objective,
the Fund will invest at least 65% of its total assets in equity securities (for
the purposes of this investment policy, rights, warrants and options to purchase
common stocks are not deemed to be equity securities), preferred stocks and
equity-linked debt securities issued by Asian companies. The Fund may invest up
to 35% of its total assets in debt securities issued or guaranteed by Asian
companies or by Asian governments, their agencies or instrumentalities. The Fund
may also invest in securities issued by non-Asian issuers, provided that the
Fund will invest at least 80% of its total assets in securities issued by Asian
companies and the Asian debt securities referred to above. The Fund expects to
invest, from time to time, a significant portion, but less than 50%, of its
assets in equity securities of Japanese companies.

In the past decade, Asian countries generally have experienced a high level of
real economic growth due to political and economic changes, including foreign
investment and reduced government intervention in the economy. Alliance believes
that certain conditions exist in Asian countries which create the potential for
continued rapid economic growth. These conditions include favorable demographics
and competitive wage rates, increasing levels of foreign direct investment,
rising per capita incomes and consumer demand, a high savings rate and numerous
privatization programs. Asian countries are also becoming more industrialized
and are increasing their intra-Asian exports while reducing their dependence on
Western export demand. Alliance believes that these conditions are important to
the long-term economic growth of Asian countries.

As the economies of many Asian countries move through the "emerging market"
stage, thus increasing the supply of goods, services and capital available to
less developed Asian markets and helping to spur economic growth in those
markets, the potential is created for many Asian companies to experience rapid
growth. In addition, many Asian companies the securities of which are listed on
exchanges in more developed Asian countries will be participants in the rapid
economic growth of the lesser developed countries. These companies generally
offer the advantages of more experienced management and more developed market
regulation.

As their economies have grown, the securities markets in Asian countries have
also expanded. New exchanges have been created and the number of listed
companies, annual trading volume and overall market capitalization have
increased significantly. Additionally, new markets continue to open to foreign
investments. For example, South Korea and India have recently relaxed investment
restrictions and Vietnamese direct investments have recently become available to
U.S. investors. The Fund also offers investors the opportunity to access
relatively restricted markets. Alliance believes that investment opportunities
in Asian countries will continue to expand.

The Fund will invest in companies believed to possess rapid growth potential.
Thus, the Fund will invest in smaller, emerging companies, but will also invest
in larger, more established companies in such growing economic sectors as
capital goods, telecommunications and consumer services.

The Fund will invest in investment grade debt securities, except that the Fund
may maintain not more than 5% of its net assets in lower-rated securities and
lower-rated loans and other lower-rated direct debt instruments. See "Risk
Considerations--Securities Ratings," "--Investment in Lower-Rated Fixed-Income
Securities" and Appendix C in the Fund's Statement of Additional Information for
a description of such ratings. The Fund will not retain a security that is
downgraded below C or determined by Alliance to have undergone similar credit
quality deterioration following purchase.

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<PAGE>

the currency of any country, securities of multinational companies and
"semi-governmental securities;" (iv) invest up to 25% of its net assets in
equity-linked debt securities with the objective of realizing capital
appreciation; (v) invest up to 25% of its net assets in loans and other direct
debt instruments; (vi) write covered put and call options on securities of the
types in which it is permitted to invest and on exchange-traded index options;
(vii) enter into contracts for the purchase or sale for future delivery of
fixed-income securities or foreign currencies, or contracts based on financial
indices, including any index of U.S. Government securities, securities issued by
foreign government entities, or common stock and may purchase and write options
on future contracts; (viii) purchase and write put and call options on foreign
currencies for hedging purposes; (ix) purchase or sell forward contracts; (x)
enter into interest rate swaps and purchase or sell interest rate caps and
floors; (xi) enter into forward commitments for the purchase or sale of
securities; (xii) enter into standby commitment agreements; (xiii) enter into
currency swaps for hedging purposes; (xiv) enter into repurchase agreements
pertaining to U.S. Government securities with member banks of the Federal
Reserve System or primary dealers in such securities; (xv) make short sales of
securities or maintain a short position, in each case only if "against the box;"
and (xvi) make secured loans of its portfolio securities not in excess of 30% of
its total assets to entities with which it can enter into repurchase agreements.
For additional information on the use, risks and costs of these policies and
practices see "Additional Investment Practices."

Alliance Global Small Cap Fund

Alliance Global Small Cap Fund, Inc. ("Global Small Cap Fund") is a diversified
investment company that seeks long-term growth of capital through investment in
a global portfolio of the equity securities of selected companies with
relatively small market capitalization. The Fund's portfolio emphasizes
companies with market capitalizations that would have placed them (when
purchased) in about the smallest 20% by market capitalization of actively traded
U.S. companies, or market capitalizations of up to about $1.5 billion. Because
the Fund applies the U.S. size standard on a global basis, its foreign
investments might rank above the lowest 20%, and, in fact, might in some
countries rank among the largest, by market capitalization in local markets.
Normally, the Fund invests at least 65% of its assets in equity securities of
these smaller capitalization issuers, and these issuers are located in at least
three countries, one of which may be the U.S. Up to 35% of the Fund's total
assets may be invested in securities of companies whose market capitalizations
exceed the Fund's size standard. The Fund's portfolio securities may be listed
on a U.S. or foreign exchange or traded over-the-counter.

Alliance believes that smaller capitalization issuers often have sales and
earnings growth rates exceeding those of larger companies, and that these growth
rates tend to cause more rapid share price appreciation. Investing in smaller
capitalization stocks, however, involves greater risk than is associated with
larger, more established companies. For example, smaller capitalization
companies often have limited product lines, markets, or financial resources.
They may be dependent for management on one or a few key persons, and can be
more susceptible to losses and risks of bankruptcy. Their securities may be
thinly traded (and therefore have to be sold at a discount from current market
prices or sold in small lots over an extended period of time), may be followed
by fewer investment research analysts and may be subject to wider price swings
and thus may create a greater chance of loss than when investing in securities
of larger capitalization companies. Transaction costs in small capitalization
stocks may be higher than in those of larger capitalization companies.

The Fund may also: (i) invest up to 10% of its total assets in securities for
which there is no ready market; (ii) invest up to 20% of its total assets in
warrants to purchase equity securities; (iii) invest in depositary receipts or
other securities representing securities of companies based in countries other
than the U.S.; (iv) purchase or sell forward foreign currency contracts; (v)
write and purchase exchange-traded call options and purchase exchange-traded put
options, including put options on market indices; and (vi) make secured loans of
portfolio securities not in excess of 30% of its total assets to brokers,
dealers and financial institutions. For additional information on the use, risks
and costs of these policies and practices see "Additional Investment Practices."

Alliance Global Environment Fund

Alliance Global Environment Fund, Inc. ("Global Environment Fund") is a
non-diversified investment company that seeks long-term capital appreciation
through investment in equity securities of Eligible Companies. For purposes of
the Fund's investment objective and investment policies, "equity securities" are
common stocks (but not preferred stocks), rights or warrants to subscribe for or
purchase common stocks, and preferred stocks or debt securities that are
convertible into common stocks without the payment of any further consideration.
Until October 3, 1997, the Fund operated as a closed-end investment company, and
its common stock (which then comprised a single class) was listed on the
Exchange.

The Fund invests in two categories of Eligible Companies--"Environmental
Companies" and "Beneficiary Companies." Environmental Companies are those that
have a principal business involving the sale of systems or services intended to
foster environmental protection, such as waste treatment and disposal,
remediation, air pollution control and recyclying. Under normal circumstances,
the Fund invests at least 65% of its total assets in equity securities of
Environmental Companies. Beneficiary Companies are those whose principal
businesses lie outside the environmental sector but nevertheless anticipate
environmental regulations or consumer preferences through the development of new
products, processes or services that are intended to contribute to a cleaner and
healthier environment. Examples of such companies could be companies that
anticipate the demand for plastic substitutes, aerosol substitutes, alternative
fuels and processes that generate less hazardous waste. In this regard,

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<PAGE>

the Fund may invest in an issuer with a broadly diversified business only a part
of which provides such products, processes or services, when Alliance believes
that these products, processes or services will yield a competitive advantage
that significantly enhances the issuer's growth prospects. As a matter of
fundamental policy, the Fund will, under normal circumstances, invest
substantially all of its total assets in equity securities of Eligible
Companies.

A major premise of the Fund's investment approach is that environmental concerns
will be a significant source of future growth opportunities, and that
Environmental Companies will see an increased demand for their systems and
services. Environmental Companies operate in the areas of pollution control,
clean energy, solid waste management, hazardous waste treatment and disposal,
pulp and paper recycling, waste-to-energy alternatives, biodegradable cartons,
packages, plastics and other products, remedial projects and emergency cleanup
efforts, manufacture of environmental supplies and equipment, the achievement of
purer air, groundwater and foods and the detection, evaluation and treatment of
both existing and potential environmental problems including, among others, air
pollution and acid rain.

The environmental services industry is generally positively affected by
increasing governmental action intended to foster environmental protection. As
environmental regulations are developed and enforced, Environmental Companies
providing the means of compliance with such regulations are afforded substantial
opportunities for growth. Beneficiary Companies may also derive an advantage to
the extent that they have anticipated environmental regulation and are therefore
at a competitive advantage.

In the view of Alliance, increasing public and political awareness of
environmental concerns and resultant environmental regulations are long-term
phenomena that are driven by an emerging global consensus that environmental
protection is a vital and increasingly immediate priority. Alliance believes
that Eligible Companies based in the United States and other economically
developed countries will have increasing opportunities for earnings growth
resulting not only from an increased demand for their existing products or
services but also from innovative responses to changing regulations and
priorities and enforcement policies. Such opportunities will arise, in the
opinion of Alliance, not only within developed countries but also within many
economically developing countries, such as those of Eastern Europe and the
Pacific Rim. These countries lag well behind developed countries in the
conservation and efficient use of natural resources and in their implementation
of policies which protect the environment.

Alliance believes that global investing offers opportunities for superior
investment returns. The Fund spreads investment risk among the capital markets
of a number of countries and invests in equity securities of companies based in
at least three, and normally considerably more, such countries. The percentage
of the Fund's assets invested in securities of companies in a particular country
or denominated in a particular currency will vary in accordance with Alliance's
assessment of the appreciation potential of such securities and the strength of
that currency. As of December 31, 1997, approximately 86% of the Fund's net
assets were invested in equity securities of U.S. companies.

The Fund may also: (i) invest up to 20% of its total assets in warrants to
purchase equity securities to the extent consistent with its investment
objective: (ii) invest in depositary receipts; (iii) purchase and write put and
call options on foreign currencies for hedging purposes; (iv) enter into forward
foreign currency transactions for hedging purposes; (v) invest in currency
futures and options on such futures for hedging purposes; and (vi) make secured
loans of its portfolio securities not in excess of 30% of its total assets. For
additional information on the use, risks and costs of these policies and
practices see "Additional Investment Practices."

TOTAL RETURN FUNDS

The Total Return Funds have been designed to provide a range of investment
alternatives to investors seeking both growth of capital and current income.

Alliance Strategic Balanced Fund

Alliance Strategic Balanced Fund ("Strategic Balanced Fund") is a diversified
investment company that seeks a high long-term total return by investing in a
combination of equity and debt securities. The portion of the Fund's assets
invested in each type of security varies in accordance with economic conditions,
the general level of common stock prices, interest rates and other relevant
considerations, including the risks associated with each investment medium. The
Fund's investment objective is not fundamental.

The Fund's equity securities will generally consist of dividend-paying common
stocks and other equity securities of companies with favorable earnings outlooks
and long-term growth rates that Alliance expects will exceed that of the U.S.
economy. The Fund's debt securities may include U.S. Government securities and
securities issued by private corporations. The Fund may also invest in
mortgage-backed securities, adjustable rate securities, asset-backed securities
and so-called "zero-coupon" bonds and "payment-in-kind" bonds.

As a fundamental policy, the Fund will invest at least 25% of its total assets
in fixed-income securities, which for this purpose include debt securities,
preferred stocks and that portion of the value of convertible securities that is
attributable to the fixed-income characteristics of those securities.

The Fund's debt securities will generally be of investment grade. See "Risk
Considerations--Securities Ratings" and "Investment in Lower-Rated Fixed-Income
Securities." In the event that the rating of any debt securities held by the
Fund falls below investment grade, the Fund will not be obligated to dispose of
such obligations and may continue to hold them if considered appropriate under
the circumstances.

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The Fund may also: (i) invest in foreign securities, although the Fund will not
generally invest more than 15% of its total assets in foreign securities; (ii)
invest, without regard to this 15% limit, in Eurodollar CDs, which are
dollar-denominated certificates of deposit issued by foreign branches of U.S.
banks that are not insured by any agency or instrumentality of the U.S.
Government; (iii) write covered call and put options on securities it owns or in
which it may invest; (iv) buy and sell put and call options and buy and sell
combinations of put and call options on the same underlying securities; (v) lend
portfolio securities amounting to not more than 25% of its total assets; (vi)
enter into repurchase agreements on up to 25% of its total assets; (vii)
purchase and sell securities on a forward commitment basis; (viii) buy or sell
foreign currencies, options on foreign currencies, foreign currency futures
contracts (and related options) and deal in forward foreign exchange contracts;
(ix) buy and sell stock index futures contracts and buy and sell options on
those contracts and on stock indices; (x) purchase and sell futures contracts,
options thereon and options with respect to U.S. Treasury securities; and (xi)
invest in securities that are not publicly traded, including Rule 144A
securities. For additional information on the use, risks and costs of these
policies and practices see "Additional Investment Practices."

Alliance Balanced Shares

Alliance Balanced Shares, Inc. ("Balanced Shares") is a diversified investment
company that seeks a high return through a combination of current income and
capital appreciation. Although the Fund's investment objective is not
fundamental, the Fund is a "balanced fund" as a matter of fundamental policy.
The Fund will not purchase a security if as a result less than 25% of its total
assets will be in fixed-income senior securities (including short- and long-term
debt securities, preferred stocks, and convertible debt securities and
convertible preferred stocks to the extent that their values are attributable to
their fixed-income characteristics). Subject to these restrictions, the
percentage of the Fund's assets invested in each type of security will vary. The
Fund's assets are invested in U.S. Government securities, bonds, senior debt
securities and preferred and common stocks in such proportions and of such type
as are deemed best adapted to the current economic and market outlooks. The Fund
may invest up to 15% of the value of its total assets in foreign equity and
fixed-income securities eligible for purchase by the Fund under its investment
policies described above. See "Risk Considerations--Foreign Investment."

The Fund may also: (i) enter into contracts for the purchase or sale for future
delivery of foreign currencies; and (ii) purchase and write put and call options
on foreign currencies and enter into forward foreign currency exchange contracts
for hedging purposes. Subject to market conditions, the Fund may also seek to
realize income by writing covered call options listed on a domestic exchange.
For additional information on the use, risks and costs of these policies and
practices see "Additional Investment Practices."

Alliance Income Builder Fund

Alliance Income Builder Fund, Inc. ("Income Builder Fund") is a non-diversified
investment company that seeks an attractive level of current income and
long-term growth of income and capital by investing principally in fixed-income
securities and dividend-paying common stocks. Its investments in equity
securities emphasize common stocks of companies with a historical or projected
pattern of paying rising dividends. Normally, at least 65% of the Fund's total
assets are invested in income-producing securities. The Fund may vary the
percentage of assets invested in any one type of security based upon Alliance's
evaluation as to the appropriate portfolio structure for achieving the Fund's
investment objective, although Alliance currently maintains approximately 60% of
the Fund's net assets in fixed-income securities and 40% in equity securities.

The Fund may invest in fixed-income securities of domestic and foreign issuers,
including U.S. Government securities and repurchase agreements pertaining
thereto, corporate fixed-income securities of U.S. issuers, qualifying bank
deposits and prime commercial paper.

The Fund may maintain up to 35% of its net assets in lower-rated securities. See
"Risk Considerations--Securities Ratings" and "--Investment in Lower-Rated
Fixed-Income Securities." The Fund will not retain a non-convertible security
that is downgraded below CCC or determined by Alliance to have undergone similar
credit quality deterioration following purchase.

Foreign securities in which the Fund invests may include fixed-income securities
of foreign corporate and governmental issuers, denominated in U.S. Dollars, and
equity securities of foreign corporate issuers, denominated in foreign
currencies or in U.S. Dollars. The Fund will not invest more than 10% of its net
assets in equity securities of foreign issuers nor more than 15% of its total
assets in issuers of any one foreign country. See "Risk Considerations--Foreign
Investment."

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<PAGE>

(x) enter into repurchase agreements pertaining to U.S. Government securities
with member banks of the Federal Reserve System or primary dealers in such
securities; (xi) make short sales of securities or maintain a short position as
described below under "Additional Investment Policies and Practices--Short
Sales;" and (xii) make secured loans of its portfolio securities not in excess
of 20% of its total assets to brokers, dealers and financial institutions. For
additional information on the use, risks and costs of these policies and
practices see "Additional Investment Practices."

Alliance Utility Income Fund

Alliance Utility Income Fund, Inc. ("Utility Income Fund") is a diversified
investment company that seeks current income and capital appreciation by
investing primarily in equity and fixed-income securities of companies in the
utilities industry. The Fund may invest in securities of both U.S. and foreign
issuers, although no more than 15% of the Fund's total assets will be invested
in issuers in any one foreign country. The utilities industry consists of
companies engaged in (i) the manufacture, production, generation, provision,
transmission, sale and distribution of gas and electric energy, and
communications equipment and services, including telephone, telegraph,
satellite, microwave and other companies providing communication facilities for
the public, or (ii) the provision of other utility or utility-related goods and
services, including, but not limited to, entities engaged in water provision,
cogeneration, waste disposal system provision, solid waste electric generation,
independent power producers and non-utility generators. The Fund is designed to
take advantage of the characteristics and historical performance of securities
of utility companies, many of which pay regular dividends and increase their
common stock dividends over time. As a fundamental policy, the Fund normally
invests at least 65% of its total assets in securities of companies in the
utilities industry. The Fund considers a company to be in the utilities industry
if, during the most recent twelve-month period, at least 50% of the company's
gross revenues, on a consolidated basis, were derived from its utilities
activities.

At least 65% of the Fund's total assets are invested in income-producing
securities, but there is otherwise no limit on the allocation of the Fund's
investments between equity securities and fixed-income securities. The Fund may
maintain up to 35% of its net assets in lower-rated securities. See "Risk
Considerations--Securities Ratings" and "--Investment in Lower-Rated
Fixed-Income Securities." The Fund will not retain a security that is downgraded
below B or determined by Alliance to have undergone similar credit quality
deterioration following purchase.

The United States utilities industry has experienced significant changes in
recent years. Electric utility companies in general have been favorably affected
by lower fuel costs, the full or near completion of major construction programs
and lower financing costs. In addition, many utility companies have generated
cash flows in excess of current operating expenses and construction
expenditures, permitting some degree of diversification into unregulated
businesses. Regulatory changes with respect to nuclear and conventionally fueled
generating facilities, however, could increase costs or impair the ability of
such electric utilities to operate such facilities, thus reducing their ability
to service dividend payments with respect to the securities they issue.
Furthermore, rates of return of utility companies generally are subject to
review and limitation by state public utilities commissions and tend to
fluctuate with marginal financing costs. Rate changes, however, ordinarily lag
behind the changes in financing costs, and thus can favorably or unfavorably
affect the earnings or dividend pay-outs on utilities stocks depending upon
whether such rates and costs are declining or rising.

Gas transmission companies, gas distribution companies and telecommunications
companies are also undergoing significant changes. Gas utilities have been
adversely affected by declines in the prices of alternative fuels, and have also
been affected by oversupply conditions and competition. Telephone utilities are
still experiencing the effects of the break-up of American Telephone & Telegraph
Company, including increased competition and rapidly developing technologies
with which traditional telephone companies now compete. Although there can be no
assurance that increased competition and other structural changes will not
adversely affect the profitability of such utilities, or that other negative
factors will not develop in the future, in Alliance's opinion, increased
competition and change may provide better positioned utility companies with
opportunities for enhanced profitability.

Utility companies historically have been subject to the risks of increases in
fuel and other operating costs, high interest costs, costs associated with
compliance with environmental and nuclear safety regulations, service
interruptions, economic slowdowns, surplus capacity, competition and regulatory
changes. There can also be no assurance that regulatory policies or accounting
standards changes will not negatively affect utility companies' earnings or
dividends. Utility companies are subject to regulation by various authorities
and may be affected by the imposition of special tariffs and changes in tax
laws. To the extent that rates are established or reviewed by governmental
authorities, utility companies are subject to the risk that such authorities
will not authorize increased rates. Because of the Fund's policy of
concentrating its investments in utility companies, the Fund is more susceptible
than most other mutual funds to economic, political or regulatory occurrences
affecting the utilities industry.

Foreign utility companies, like those in the U.S., are generally subject to
regulation, although such regulations may or may not be comparable to domestic
regulations. Foreign utility companies in certain countries may be more heavily
regulated by their respective governments than utility companies located in the
U.S. and, as in the U.S., generally are required to seek government approval for
rate increases. In addition, because many foreign utility companies use fuels
that cause more pollution than those used in the U.S., such utilities may yet be
required to invest in pollution control equipment. Foreign utility regulatory
systems vary from country to country and may

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evolve in ways different from regulation in the U.S. The percentage of the
Fund's assets invested in issuers of particular countries will vary. See "Risk
Considerations--Foreign Investment."

The Fund may invest up to 35% of its total assets in equity and fixed-income
securities of domestic and foreign corporate and governmental issuers other than
utility companies, including U.S. Government securities and repurchase
agreements pertaining thereto, foreign government securities, corporate
fixed-income securities of domestic issuers, corporate fixed-income securities
of foreign issuers denominated in foreign currencies or in U.S. dollars (in each
case including fixed-income securities of an issuer in one country denominated
in the currency of another country), qualifying bank deposits and prime
commercial paper.

The Fund may also: (i) invest up to 30% of its net assets in the convertible
securities of companies whose common stocks are eligible for purchase by the
Fund; (ii) invest up to 5% of its net assets in rights or warrants; (iii) invest
in depositary receipts, securities of supranational entities denominated in the
currency of any country, securities denominated in European Currency Units and
"semi-governmental securities;" (iv) write covered put and call options and
purchase put and call options on securities of the types in which it is
permitted to invest that are exchange-traded and over-the-counter; (v) purchase
and sell exchange-traded options on any securities index composed of the types
of securities in which it may invest; (vi) enter into contracts for the purchase
or sale for future delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including an index of U.S. Government
securities, foreign government securities, corporate fixed-income securities, or
common stock, and may purchase and write options on futures contracts; (vii)
purchase and write put and call options on foreign currencies traded on U.S. and
foreign exchanges or over-the-counter for hedging purposes; (viii) purchase or
sell forward contracts; (ix) enter into interest rate swaps and purchase or sell
interest rate caps and floors; (x) enter in forward commitments for the purchase
or sale of securities; (xi) enter into standby commitment agreements; (xii)
enter into repurchase agreements pertaining to U.S. Government securities with
member banks of the Federal Reserve System or primary dealers in such
securities; (xiii) make short sales of securities or maintain a short position
as described below under "Additional Investment Practices--Short Sales;" and
(xiv) make secured loans of its portfolio securities not in excess of 20% of its
total assets to brokers, dealers and financial institutions. For additional
information on the use, risk and costs of these policies and practices, see
"Additional Investment Practices."

Alliance Growth and Income Fund

Alliance Growth and Income Fund, Inc. ("Growth and Income Fund") is a
diversified investment company that seeks appreciation through investments
primarily in dividend-paying common stocks of good quality, although it is
permitted to invest in fixed-income securities and convertible securities.

The Fund may also try to realize income by writing covered call options listed
on domestic securities exchanges. The Fund also invests in foreign securities.
Since the purchase of foreign securities entails certain political and economic
risks, the Fund has restricted its investments in securities in this category to
issues of high quality. The Fund may also purchase and sell financial forward
and futures contracts and options thereon for hedging purposes. For additional
information on the use, risk and costs of these policies and practices, see
"Additional Investment Practices."

Alliance Real Estate Investment Fund

Alliance Real Estate Investment Fund, Inc. ("Real Estate Investment Fund") is a
diversified investment company that seeks a total return on its assets from
long-term growth of capital and from income principally through investing in a
portfolio of equity securities of issuers that are primarily engaged in or
related to the real estate industry.

Under normal circumstances, at least 65% of the Fund's total assets will be
invested in equity securities of real estate investment trusts ("REITs") and
other real estate industry companies. A "real estate industry company" is a
company that derives at least 50% of its gross revenues or net profits from the
ownership, development, construction, financing, management or sale of
commercial, industrial or residential real estate or interests therein. The
equity securities in which the Fund will invest for this purpose consist of
common stock, shares of beneficial interest of REITs and securities with common
stock characteristics, such as preferred stock or convertible securities ("Real
Estate Equity Securities").

The Fund may invest up to 35% of its total assets in (a) securities that
directly or indirectly represent participations in, or are collateralized by and
payable from, mortgage loans secured by real property ("Mortgage-Backed
Securities"), such as mortgage pass-through certificates, real estate mortgage
investment conduit ("REMIC") certificates and collateralized mortgage
obligations ("CMOs") and (b) short-term investments. These instruments are
described below. The risks associated with the Fund's transactions in REMICs,
CMOs and other types of mortgage-backed securities, which are considered to be
derivative securities, may include some or all of the following: market risk,
leverage and volatility risk, correlation risk, credit risk and liquidity and
valuation risk. See "Risk Considerations" for a description of these and other
risks.

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<PAGE>

determination, Alliance will take into account fundamental trends in underlying
property markets as determined by proprietary models, site visits conducted by
individuals knowledgeable in local real estate markets, price-earnings ratios
(as defined for real estate companies), cash flow growth and stability, the
relationship between asset value and market price of the securities, dividend
payment history, and such other factors which Alliance may determine from time
to time to be relevant. Alliance will attempt to purchase for the Fund Real
Estate Equity Securities of companies whose underlying portfolios are
diversified geographically and by property type.

The Fund may invest without limitation in shares of REITs. REITs are pooled
investment vehicles which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally classified as equity
REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity
REITs invest the majority of their assets directly in real property and derive
income primarily from the collection of rents. Equity REITs can also realize
capital gains by selling properties that have appreciated in value. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. Similar to investment companies
such as the Fund, REITs are not taxed on income distributed to shareholders
provided they comply with several requirements of the Code. The Fund will
indirectly bear its proportionate share of expenses incurred by REITs in which
the Fund invests in addition to the expenses incurred directly by the Fund.

Investment Process for Real Estate Equity Securities. The Fund's investment
strategy with respect to Real Estate Equity Securities is based on the premise
that property market fundamentals are the primary determinant of growth
underlying the performance of Real Estate Equity Securities. Value added
management further distinguishes the most attractive Real Estate Equity
Securities. The Fund's research and investment process is designed to identify
those companies with strong property fundamentals and strong management teams.
This process is comprised of real estate market research, specific property
inspection and securities analysis. Alliance believes that this process will
result in a portfolio that will consist of Real Estate Equity Securities of
companies that own assets in the most desirable markets across the country,
diversified geographically and by property type.

In implementing the Fund's research and investment process, Alliance will avail
itself of the consulting services of CB Commercial Real Estate Group, Inc.
("CBC"), a publicly held company and the largest real estate services company in
the United States, comprised of real estate brokerage, property and facilities
management, and real estate finance and investment advisory activities (CBC in
August of 1997 acquired Koll Management Services ("Koll"), which previously
provided these consulting services to Alliance). In 1996, CBC (and Koll, on a
combined basis) completed 25,000 sale and lease transactions, managed over 4,100
client properties, created over $3.5 billion in mortgage originations, and
completed over 2,600 appraisal and consulting assignments. In addition, they
advised and managed for institutions over $4 billion in real estate investments.
As consultant to Alliance, CBC provides access to its proprietary model, REIT o
Score, that analyzes the approximately 12,000 properties owned by these 130
companies. Using proprietary databases and algorithms, CBC analyzes local market
rent, expense, and occupancy trends, market specific transaction pricing,
demographic and economic trends, and leading indicators of real estate supply
such as building permits. Over 650 asset-type specific geographic markets are
analyzed and ranked on a relative scale by CBC in compiling its REIT o Score
database. The relative attractiveness of these real estate industry companies is
similarly ranked based on the composite rankings of the properties they own. See
"Management of the Funds--Consultant to Adviser" for more information about CBC.

The universe of property-owning real estate industry firms consists of
approximately 130 companies of sufficient size and quality to merit
consideration for investment by the Fund. Once the universe of real estate
industry companies has been distilled through the market research process, CBC's
local market presence provides the capability to perform site specific
inspections of key properties. This analysis examines specific location,
condition, and sub-market trends. CBC's use of locally based real estate
professionals provides Alliance with a window on the operations of the portfolio
companies as information can immediately be put in the context of local market
events. Only those companies whose specific property portfolios reflect the
promise of their general markets will be considered for initial and continued
investment by the Fund.

Alliance further screens the universe of real estate industry companies by using
rigorous financial models and by engaging in regular contact with management of
targeted companies. Each management's strategic plan and ability to execute the
plan are determined and analyzed. Alliance will make extensive use of CBC's
network of industry analysts in order to assess trends in tenant industries.
This information is then used to further interpret management's strategic plans.
Financial ratio analysis is used to isolate those companies with the ability to
make value-added acquisitions. This information is combined with property market
trends and used to project future earnings potential.

The short-term investments in which Real Estate Investment Fund may invest are:
corporate commercial paper and other short-term commercial obligations, in each
case rated or issued by companies with similar securities outstanding that are
rated Prime-1, Aa or better by Moody's or A-1, AA or better by S&P; obligations
(including certificates of deposit, time deposits, demand deposits and bankers'
acceptances) of banks with securities outstanding that are rated Prime-1, Aa or
better by Moody's or A-1, AA or better by S&P; and obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities with
remaining maturities not exceeding 18 months.

The Fund may invest in debt securities rated BBB or higher by S&P or Baa or
higher by Moody's or, if not so rated, of

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equivalent credit quality as determined by Alliance. The Fund expects that it
will not retain a debt security which is downgraded below BBB or Baa or, if
unrated, determined by Alliance to have undergone similar credit quality
deterioration, subsequent to purchase by the Fund.

The Fund may also engage in the following investment practices to the extent
indicated: (i) invest up to 10% of its net assets in rights or warrants; (ii)
invest up to 15% of its net assets in the convertible securities of companies
whose common stocks are eligible for purchase by the Fund; (iii) lend portfolio
securities equal in value to not more than 25% of total assets; (iv) enter into
repurchase agreements of up to seven days' duration; (v) enter into forward
commitment transactions as long as the Fund's aggregate commitments under such
transactions are not more than 30% of the Fund's total assets; (vi) enter into
standby commitment agreements; (vii) make short sales of securities or maintain
a short position but only if at all times when a short position is open not more
than 25% of the Fund's net assets (taken at market value) is held as collateral
for such sales; and (viii) invest in illiquid securities unless, as a result,
more than 15% of its net assets would be so invested.

ADDITIONAL INVESTMENT PRACTICES

Some or all of the Funds may engage in the following investment practices to the
extent described above.

Convertible Securities. Prior to conversion, convertible securities have the
same general characteristics as non-convertible debt securities, which generally
provide a stable stream of income with yields that are generally higher than
those of equity securities of the same or similar issuers. The price of a
convertible security will normally vary with changes in the price of the
underlying stock, although the higher yield tends to make the convertible
security less volatile than the underlying common stock. As with debt
securities, the market value of convertible securities tends to decrease as
interest rates rise and increase as interest rates decline. While convertible
securities generally offer lower interest or dividend yields than
non-convertible debt securities of similar quality, they offer investors the
potential to benefit from increases in the market price of the underlying common
stock. Convertible debt securities that are rated Baa or lower by Moody's or BBB
or lower by S&P, Duff & Phelps or Fitch and comparable unrated securities as
determined by Alliance may share some or all of the risks of non-convertible
debt securities with those ratings. For a description of these risks, see "Risk
Considerations--Securities Ratings" and "--Investment in Lower-Rated
Fixed-Income Securities."

Rights and Warrants. A Fund will invest in rights or warrants only if the
underlying equity securities themselves are deemed appropriate by Alliance for
inclusion in the Fund's portfolio. Rights and warrants entitle the holder to buy
equity securities at a specific price for a specific period of time. Rights are
similar to warrants except that they have a substantially shorter duration.
Rights and warrants may be considered more speculative than certain other types
of investments in that they do not entitle a holder to dividends or voting
rights with respect to the underlying securities nor do they represent any
rights in the assets of the issuing company. The value of a right or warrant
does not necessarily change with the value of the underlying security, although
the value of a right or warrant may decline because of a decrease in the value
of the underlying security, the passage of time or a change in perception as to
the potential of the underlying security, or any combination thereof. If the
market price of the underlying security is below the exercise price set forth in
the warrant on the expiration date, the warrant will expire worthless. Moreover,
a right or warrant ceases to have value if it is not exercised prior to the
expiration date.

Depositary Receipts and Securities of Supranational Entities. Depositary
receipts may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. In addition, the issuers
of the stock of unsponsored depositary receipts are not obligated to disclose
material information in the United States and, therefore, there may not be a
correlation between such information and the market value of the depositary
receipts. ADRs are depositary receipts typically issued by a U.S. bank or trust
company that evidence ownership of underlying securities issued by a foreign
corporation. GDRs and other types of depositary receipts are typically issued by
foreign banks or trust companies and evidence ownership of underlying securities
issued by either a foreign or a U.S. company. Generally, depositary receipts in
registered form are designed for use in the U.S. securities markets, and
depositary receipts in bearer form are designed for use in foreign securities
markets. For purposes of determining the country of issuance, investments in
depositary receipts of either type are deemed to be investments in the
underlying securities except with respect to Growth Fund, Strategic Balanced
Fund and Income Builder Fund, where investments in ADRs are deemed to be
investments in securities issued by U.S. issuers and those in GDRs and other
types of depositary receipts are deemed to be investments in the underlying
securities.

A supranational entity is an entity designated or supported by the national
government of one or more countries to promote economic reconstruction or
development. Examples of supranational entities include, among others, the World
Bank (International Bank for Reconstruction and Development) and the European
Investment Bank. A European Currency Unit is a basket of specified amounts of
the currencies of the member states of the European Economic Community.
"Semi-governmental securities" are securities issued by entities owned by either
a national, state or equivalent government or are obligations of one of such
government jurisdictions which are not backed by its full faith and credit and
general taxing powers.

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prepayments of principal on the underlying securities, mortgage-backed
securities are often subject to more rapid prepayment of principal than their
stated maturity would indicate. Prepayments occur when the mortgagor on a
mortgage prepays the remaining principal before the mortgage's scheduled
maturity date. Because the prepayment characteristics of the underlying
mortgages vary, it is impossible to predict accurately the realized yield or
average life of a particular issue of pass-through certificates. Prepayments are
important because of their effect on the yield and price of the mortgage-backed
securities. During periods of declining interest rates, prepayments can be
expected to accelerate and a Fund investing in such securities would be required
to reinvest the proceeds at the lower interest rates then available. Conversely,
during periods of rising interest rates, a reduction in prepayments may increase
the effective maturity of the securities, subjecting them to a greater risk of
decline in market value in response to rising interest rates. In addition,
prepayments of mortgages underlying securities purchased at a premium could
result in capital losses.

Adjustable Rate Securities. Adjustable rate securities have interest rates that
are reset at periodic intervals, usually by reference to some interest rate
index or market interest rate. Some adjustable rate securities are backed by
pools of mortgage loans. Although the rate-adjustment feature may reduce sharp
changes in the value of adjustable rate securities, these securities can change
in value based on changes in market interest rates or the issuer's
creditworthiness. Changes in the interest rate on adjustable rate securities may
lag behind changes in prevailing market interest rates. Also, some adjustable
rate securities (or the underlying mortgages) are subject to caps or floors that
limit the maximum change in interest rate.

Asset-Backed Securities. Asset-backed securities (unrelated to first mortgage
loans) represent fractional interests in pools of leases, retail installment
loans, revolving credit receivables and other payment obligations, both secured
and unsecured. These assets are generally held by a trust and payments of
principal and interest or interest only are passed through monthly or quarterly
to certificate holders and may be guaranteed up to certain amounts by letters of
credit issued by a financial institution affiliated or unaffiliated with the
trustee or originator of the trust.

Like mortgages underlying mortgage-backed securities, underlying automobile
sales contracts or credit card receivables are subject to prepayment, which may
reduce the overall return to certificate holders. Certificate holders may also
experience delays in payment on the certificates if the full amounts due on
underlying sales contracts or receivables are not realized by the trust because
of unanticipated legal or administrative costs of enforcing the contracts or
because of depreciation or damage to the collateral (usually automobiles)
securing certain contracts, or other factors.

Zero-Coupon and Payment-in-Kind Bonds. Zero-coupon bonds are issued at a
significant discount from their principal amount in lieu of paying interest
periodically. Payment-in-kind bonds allow the issuer to make current interest
payments on the bonds in additional bonds. Because zero-coupon bonds and
payment-in-kind bonds do not pay current interest in cash, their value is
generally subject to greater fluctuation in response to changes in market
interest rates than bonds that pay interest in cash currently. Both zero-coupon
and payment-in-kind bonds allow an issuer to avoid the need to generate cash to
meet current interest payments. Accordingly, such bonds may involve greater
credit risks than bonds paying interest currently. Even though such bonds do not
pay current interest in cash, a Fund is nonetheless required to accrue interest
income on such investments and to distribute such amounts at least annually to
shareholders. Thus, a Fund could be required at times to liquidate other
investments in order to satisfy its dividend requirements.

Equity-Linked Debt Securities. Equity-linked debt securities are securities with
respect to which the amount of interest and/or principal that the issuer thereof
is obligated to pay is linked to the performance of a specified index of equity
securities. Such amount may be significantly greater or less than payment
obligations in respect of other types of debt securities. Adverse changes in
equity securities indices and other adverse changes in the securities markets
may reduce payments made under, and/or the principal of, equity-linked debt
securities held by the Fund. Furthermore, as with any debt securities, the
values of equity-linked debt securities will generally vary inversely with
changes in interest rates. The Fund's ability to dispose of equity-linked debt
securities will depend on the availability of liquid markets for such
securities. Investment in equity-linked debt securities may be considered to be
speculative. As with other securities, the Fund could lose its entire investment
in equity-linked debt securities.

Loans and Other Direct Debt Instruments. Loans and other direct debt instruments
are interests in amounts owed by a corporate, governmental or other borrower to
another party. They may represent amounts owed to lenders or lending syndicates
(loans and loan participations), to suppliers of goods or services (trade claims
or other receivables), or to other creditors. Direct debt instruments involve
the risk of loss in case of default or insolvency of the borrower and may offer
less legal protection to the Fund in the event of fraud or misrepresentation
than debt securities. In addition, loan participations involve a risk of
insolvency of the lending bank or other financial intermediary. Direct debt
instruments may also include standby financing commitments that obligate the
Fund to supply additional cash to the borrower on demand. Loans and other direct
debt instruments are generally illiquid and may be transferred only through
individually negotiated private transactions.

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Fund more protection than unsecured loans in the event of non-payment of
scheduled interest or principal. However, there is no assurance that the
liquidation of collateral from a secured loan would satisfy the borrower's
obligation, or that the collateral can be liquidated. Indebtedness of borrowers
whose creditworthiness is poor may involve substantial risks, and may be highly
speculative.

Borrowers that are in bankruptcy or restructuring may never pay off their
indebtedness, or may pay only a small fraction of the amount owed. Direct
indebtedness of Asian countries will also involve a risk that the governmental
entities responsible for the repayment of the debt may be unable, or unwilling,
to pay interest and repay principal when due.

Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to the Fund. For
example, if a loan is foreclosed, the Fund could become part owner of any
collateral, and would bear the costs and liabilities associated with owning and
disposing of the collateral. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary.

A loan is often administered by a bank or other financial institution that acts
as agent for all holders. The agent administers the terms of the loan, as
specified on the loan agreement. Unless, under the terms of the loan or other
indebtedness, the Fund has direct recourse against the borrower, it may have to
rely on the agent to apply appropriate credit remedies against a borrower. If
assets held by the agent for the benefit of the Fund were determined to be
subject to the claims of the agent's general creditors, the Fund might incur
certain costs and delays in realizing payment on the loan or loan participation
and could suffer a loss of principal or interest.

Direct indebtedness purchased by the Fund may include letters of credit,
revolving credit facilities, or other standby financing commitments obligating
the Fund to pay additional cash on demand. These commitments may have the effect
of requiring the Fund to increase its investment in a borrower at a time when it
would not otherwise have done so, even if the borrower's condition makes it
unlikely that the amount will ever be repaid.

Mortgage-Backed Securities and Associated Risks. Mortgage-Backed Securities
include mortgage pass-through certificates and multiple-class pass-through
securities, such as REMIC pass-through certificates, CMOs and stripped
mortgage-backed securities ("SMBS"), and other types of Mortgage-Backed
Securities that may be available in the future.

Guaranteed Mortgage Pass-Through Securities. Real Estate Investment Fund may
invest in guaranteed mortgage pass-through securities which represent
participation interests in pools of residential mortgage loans and are issued by
U.S. governmental or private lenders and guaranteed by the U.S. Government or
one of its agencies or instrumentalities, including but not limited to the
Government National Mortgage Association ("Ginnie Mae"), the Federal National
Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"). Ginnie Mae certificates are guaranteed by the full
faith and credit of the United States Government for timely payment of principal
and interest on the certificates. Fannie Mae certificates are guaranteed by
Fannie Mae, a federally chartered and privately-owned corporation for full and
timely payment of principal and interest on the certificates. Freddie Mac
certificates are guaranteed by Freddie Mac, a corporate instrumentality of the
United States Government, for timely payment of interest and the ultimate
collection of all principal of the related mortgage loans.

Multiple-Class Pass-Through Securities and Collateralized Mortgage Obligations.
Mortgage-Backed Securities also include CMOs and REMIC pass-through or
participation certificates, which may be issued by, among others, U.S.
Government agencies and instrumentalities as well as private lenders. CMOs and
REMIC certificates are issued in multiple classes and the principal of and
interest on the mortgage assets may be allocated among the several classes of
CMOs or REMIC certificates in various ways. Each class of CMOs or REMIC
certificates, often referred to as a "tranche," is issued at a specific
adjustable or fixed interest rate and must be fully retired no later than its
final distribution date. Generally, interest is paid or accrues on all classes
of CMOs or REMIC certificates on a monthly basis. Real Estate Investment Fund
will not invest in the lowest tranche of CMOs and REMIC certificates.

Typically, CMOs are collateralized by Ginnie Mae or Freddie Mac certificates but
also may be collateralized by other mortgage assets such as whole loans or
private mortgage pass-through securities. Debt service on CMOs is provided from
payments of principal and interest on collateral of mortgaged assets and any
reinvestment income thereon.

A REMIC is a CMO that qualifies for special tax treatment under the Code and
invests in certain mortgages primarily secured by interests in real property and
other permitted investments. Investors may purchase "regular" and "residual"
interest shares of beneficial interest in REMIC trusts although the Fund does
not intend to invest in residual interests.

Risks. Investing in Mortgage-Backed Securities involves certain unique risks in
addition to those generally associated with investing in the real estate
industry in general. These unique risks include the failure of a counterparty to
meet its commitments, adverse interest rate changes and the effects of
prepayments on mortgage cash flows. See "Risk Considerations--Mortgage-Backed
Securities" for a more complete description of the characteristics of
Mortgage-Backed Securities and associated risks.

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of unlisted securities, when market makers do not exist or will not entertain
bids or offers), including many individually negotiated currency swaps and any
assets used to cover currency swaps and most privately negotiated investments in
state enterprises that have not yet conducted an initial equity offering, (ii)
over-the-counter options and assets used to cover over-the-counter options, and
(iii) repurchase agreements not terminable within seven days.

Because of the absence of a trading market for illiquid securities, a Fund may
not be able to realize their full value upon sale. With respect to each Fund
that may invest in such securities, Alliance will monitor their illiquidity
under the supervision of the Directors of the Fund. To the extent permitted by
applicable law, Rule 144A securities will not be treated as "illiquid" for
purposes of the foregoing restriction so long as such securities meet liquidity
guidelines established by a Fund's Directors. Investment in non-publicly traded
securities by each of Growth Fund and Strategic Balanced Fund is restricted to
5% of its total assets (not including for these purposes Rule 144A securities,
to the extent permitted by applicable law) and is also subject to the 15%
restriction on investment in illiquid securities described above.

A Fund that invests in securities for which there is no ready market may
therefore not be able to readily sell such securities. To the extent that these
securities are foreign securities, there is no law in many of the countries in
which a Fund may invest similar to the Securities Act requiring an issuer to
register the sale of securities with a governmental agency or imposing legal
restrictions on resales of securities, either as to length of time the
securities may be held or manner of resale. However, there may be contractual
restrictions on resales of securities.

Options. An option gives the purchaser of the option, upon payment of a premium,
the right to deliver to (in the case of a put) or receive from (in the case of a
call) the writer a specified amount of a security on or before a fixed date at a
predetermined price. A call option written by a Fund is "covered" if the Fund
owns the underlying security, has an absolute and immediate right to acquire
that security upon conversion or exchange of another security it holds, or holds
a call option on the underlying security with an exercise price equal to or less
than that of the call option it has written. A put option written by a Fund is
covered if the Fund holds a put option on the underlying securities with an
exercise price equal to or greater than that of the put option it has written.

A call option is for cross-hedging purposes if a Fund does not own the
underlying security, and is designed to provide a hedge against a decline in
value in another security which the Fund owns or has the right to acquire.
Worldwide Privatization Fund, All-Asia Investment Fund, Income Builder Fund and
Utility Income Fund each may write call options for cross-hedging purposes. A
Fund would write a call option for cross-hedging purposes, instead of writing a
covered call option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a covered
call option, while at the same time achieving the desired hedge.

In purchasing an option, a Fund would be in a position to realize a gain if,
during the option period, the price of the underlying security increased (in the
case of a call) or decreased (in the case of a put) by an amount in excess of
the premium paid; otherwise the Fund would experience a loss equal to the
premium paid for the option.

If an option written by a Fund were exercised, the Fund would be obligated to
purchase (in the case of a put) or sell (in the case of a call) the underlying
security at the exercise price. The risk involved in writing an option is that,
if the option were exercised, the underlying security would then be purchased or
sold by the Fund at a disadvantageous price. These risks could be reduced by
entering into a closing transaction (i.e., by disposing of the option prior to
its exercise). A Fund retains the premium received from writing a put or call
option whether or not the option is exercised. The writing of covered call
options could result in increases in a Fund's portfolio turnover rate,
especially during periods when market prices of the underlying securities
appreciate.

Technology Fund, Quasar Fund, International Fund, New Europe Fund and Global
Small Cap Fund will not write uncovered call options. Technology Fund and Global
Small Cap Fund will not write a call option if the premium to be received by the
Fund in doing so would not produce an annualized return of at least 15% of the
then current market value of the securities subject to the option (without
giving effect to commissions, stock transfer taxes and other expenses that are
deducted from premium receipts). Technology Fund, Quasar Fund and Global Small
Cap Fund will not write a call option if, as a result, the aggregate of the
Fund's portfolio securities subject to outstanding call options (valued at the
lower of the option price or market value of such securities) would exceed 15%
of the Fund's total assets or more than 10% of the Fund's assets would be
committed to call options that at the time of sale have a remaining term of more
than 100 days. The aggregate cost of all outstanding options purchased and held
by each of Premier Growth Fund, Technology Fund, Quasar Fund and Global Small
Cap Fund will at no time exceed 10% of the Fund's total assets. Neither
International Fund nor New Europe Fund will write uncovered put options.

A Fund that purchases or writes options on securities in privately negotiated
(i.e., over-the-counter) transactions will effect such transactions only with
investment dealers and other financial institutions (such as commercial banks or
savings and loan institutions) deemed creditworthy by Alliance, and Alliance has
adopted procedures for monitoring the creditworthiness of such entities. Options
purchased or written by a Fund in negotiated transactions are illiquid and it
may not be possible for the Fund to effect a closing transaction at an
advantageous time. See "Illiquid Securities."

Options on Securities Indices. An option on a securities index is similar to an
option on a security except that, rather than

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the right to take or make delivery of a security at a specified price, an option
on a securities index gives the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the chosen index is
greater than (in the case of a call) or less than (in the case of a put) the
exercise price of the option.

Futures Contracts and Options on Futures Contracts. A "sale" of a futures
contract means the acquisition of a contractual obligation to deliver the
securities or foreign currencies or other commodity called for by the contract
at a specified price on a specified date. A "purchase" of a futures contract
means the incurring of an obligation to acquire the securities, foreign
currencies or other commodity called for by the contract at a specified price on
a specified date. The purchaser of a futures contract on an index agrees to take
or make delivery of an amount of cash equal to the difference between a
specified dollar multiple of the value of the index on the expiration date of
the contract ("current contract value") and the price at which the contract was
originally struck. No physical delivery of the securities underlying the index
is made.

Options on futures contracts written or purchased by a Fund will be traded on
U.S. or foreign exchanges or over-the-counter. These investment techniques will
be used only to hedge against anticipated future changes in market conditions
and interest or exchange rates which otherwise might either adversely affect the
value of the Fund's portfolio securities or adversely affect the prices of
securities which the Fund intends to purchase at a later date.

No Fund will enter into any futures contracts or options on futures contracts if
immediately thereafter the market values of the outstanding futures contracts of
the Fund and the currencies and futures contracts subject to outstanding options
written by the Fund would exceed 50% of its total assets, and Income Builder
Fund will also not do so if immediately thereafter the aggregate of initial
margin deposits on all the outstanding futures contracts of the Fund and
premiums paid on outstanding options on futures contracts would exceed 5% of the
market value of the total assets of the Fund. Premier Growth Fund and Growth and
Income Fund may not purchase or sell a stock index future if immediately
thereafter more than 30% of its total assets would be hedged by stock index
futures. Premier Growth Fund and Growth and Income Fund may not purchase or sell
a stock index future if, immediately thereafter, the sum of the amount of margin
deposits on the Fund's existing futures positions would exceed 5% of the market
value of the Fund's total assets.

Options on Foreign Currencies. As in the case of other kinds of options, the
writing of an option on a foreign currency constitutes only a partial hedge, up
to the amount of the premium received, and a Fund could be required to purchase
or sell foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on a foreign currency may constitute an
effective hedge against fluctuations in exchange rates although, in the event of
rate movements adverse to a Fund's position, it may forfeit the entire amount of
the premium plus related transaction costs. See the Statement of Additional
Information of each Fund that may invest in options on foreign currencies for
further discussion of the use, risks and costs of options on foreign currencies.

Forward Foreign Currency Exchange Contracts. A Fund purchases or sells forward
contracts to minimize the risk to it from adverse changes in the relationship
between the U.S. dollar and other currencies. A forward contract is an
obligation to purchase or sell a specific currency for an agreed price at a
future date, and is individually negotiated and privately traded.

A Fund may enter into a forward contract, for example, when it enters into a
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. dollar price of the security
("transaction hedge"). A Fund will not engage in transaction hedges with respect
to the currency of a particular country to an extent greater than the aggregate
amount of the Fund's transactions in that currency. When a Fund believes that a
foreign currency may suffer a substantial decline against the U.S. dollar, it
may enter into a forward sale contract to sell an amount of that foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund believes that
the U.S. dollar may suffer a substantial decline against a foreign currency, it
may enter into a forward purchase contract to buy that foreign currency for a
fixed dollar amount ("position hedge"). A Fund will not position hedge with
respect to a particular currency to an extent greater than the aggregate market
value (at the time of making such sale) of the securities held in its portfolio
denominated or quoted in that currency. Instead of entering into a position
hedge, a Fund may, in the alternative, enter into a forward contract to sell a
different foreign currency for a fixed U.S. dollar amount where the Fund
believes that the U.S. dollar value of the currency to be sold pursuant to the
forward contract will fall whenever there is a decline in the U.S. dollar value
of the currency in which portfolio securities of the Fund are denominated
("cross-hedge"). Unanticipated changes in currency prices may result in poorer
overall performance for the Fund than if it had not entered into such forward
contracts.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for a Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. International Fund, New
Europe Fund and Global Small Cap Fund will not enter into a forward contract
with a term of more than one year or if, as a result, more than 50% of its total
assets would be committed to such contracts. The dealings of International Fund,
New Europe Fund and Global Small Cap Fund in forward contracts will be limited
to hedging involving either specific transactions or portfolio positions.

Growth Fund and Strategic Balanced Fund may also purchase and sell foreign
currency on a spot basis.

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Forward Commitments. Forward commitments for the purchase or sale of securities
may include purchases on a "when-issued" basis or purchases or sales on a
"delayed delivery" basis. In some cases, a forward commitment may be conditioned
upon the occurrence of a subsequent event, such as approval and consummation of
a merger, corporate reorganization or debt restructuring (i.e., a "when, as and
if issued" trade).

When forward commitment transactions are negotiated, the price is fixed at the
time the commitment is made, but delivery and payment for the securities take
place at a later date. Normally, the settlement date occurs within two months
after the transaction, but settlements beyond two months may be negotiated.
Securities purchased or sold under a forward commitment are subject to market
fluctuation, and no interest or dividends accrue to the purchaser prior to the
settlement date. At the time a Fund intends to enter into a forward commitment,
it records the transaction and thereafter reflects the value of the security
purchased or, if a sale, the proceeds to be received, in determining its net
asset value. Any unrealized appreciation or depreciation reflected in such
valuation of a "when, as and if issued" security would be canceled in the event
that the required conditions did not occur and the trade was canceled.

The use of forward commitments enables a Fund to protect against anticipated
changes in interest rates and prices. For instance, in periods of rising
interest rates and falling bond prices, a Fund might sell securities in its
portfolio on a forward commitment basis to limit its exposure to falling prices.
In periods of falling interest rates and rising bond prices, a Fund might sell a
security in its portfolio and purchase the same or a similar security on a
when-issued or forward commitment basis, thereby obtaining the benefit of
currently higher cash yields. However, if Alliance were to forecast incorrectly
the direction of interest rate movements, a Fund might be required to complete
such when-issued or forward transactions at prices inferior to the then current
market values. When-issued securities and forward commitments may be sold prior
to the settlement date, but a Fund enters into when-issued and forward
commitments only with the intention of actually receiving securities or
delivering them, as the case may be. If a Fund chooses to dispose of the right
to acquire a when-issued security prior to its acquisition or dispose of its
right to deliver or receive against a forward commitment, it may incur a gain or
loss. Any significant commitment of Fund assets to the purchase of securities on
a "when, as and if issued" basis may increase the volatility of the Fund's net
asset value. No forward commitments will be made by New Europe Fund, All-Asia
Investment Fund, Worldwide Privatization Fund, Income Builder Fund, Real Estate
Investment Fund or Utility Income Fund if, as a result, the Fund's aggregate
commitments under such transactions would be more than 30% of the Fund's total
assets. In the event the other party to a forward commitment transaction were to
default, a Fund might lose the opportunity to invest money at favorable rates or
to dispose of securities at favorable prices.

Standby Commitment Agreements. Standby commitment agreements commit a Fund, for
a stated period of time, to purchase a stated amount of a security that may be
issued and sold to the Fund at the option of the issuer. The price and coupon of
the security are fixed at the time of the commitment. At the time of entering
into the agreement the Fund is paid a commitment fee, regardless of whether the
security ultimately is issued, typically equal to approximately 0.5% of the
aggregate purchase price of the security the Fund has committed to purchase. A
Fund will enter into such agreements only for the purpose of investing in the
security underlying the commitment at a yield and price considered advantageous
to the Fund and unavailable on a firm commitment basis. No Fund, other than
Income Builder Fund, will enter into a standby commitment with a remaining term
in excess of 45 days. Investments in standby commitments will be limited so that
the aggregate purchase price of the securities subject to the commitments will
not exceed 25% with respect to New Europe Fund and Real Estate Investment Fund,
50% with respect to Worldwide Privatization Fund and All-Asia Investment Fund,
and 20% with respect to Utility Income Fund, of the Fund's assets taken at the
time of making the commitment.

There is no guarantee that a security subject to a standby commitment will be
issued and the value of the security, if issued, on the delivery date may be
more or less than its purchase price. Since the issuance of the security
underlying the commitment is at the option of the issuer, a Fund will bear the
risk of capital loss in the event the value of the security declines and may not
benefit from an appreciation in the value of the security during the commitment
period if the issuer decides not to issue and sell the security to the Fund.

Currency Swaps. Currency swaps involve the individually negotiated exchange by a
Fund with another party of a series of payments in specified currencies. A
currency swap may involve the delivery at the end of the exchange period of a
substantial amount of one designated currency in exchange for the other
designated currency. Therefore the entire principal value of a currency swap is
subject to the risk that the other party to the swap will default on its
contractual delivery obligations. The net amount of the excess, if any, of a
Fund's obligations over its entitlements with respect to each currency swap will
be accrued on a daily basis. A Fund will not enter into any currency swap unless
the credit quality of the unsecured senior debt or the claims-paying ability of
the other party thereto is rated in the highest rating category of at least one
nationally recognized rating organization at the time of entering into the
transaction. If there is a default by the other party to such a transaction,
such Fund will have contractual remedies pursuant to the agreements related to
the transactions.

Interest Rate Transactions. Each Fund that may enter into interest rate
transactions expects to do so primarily to preserve a return or spread on a
particular investment or portion of its portfolio or to protect against any
increase in the price of securities the Fund anticipates purchasing at a later

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date. The Funds do not intend to use these transactions in a speculative manner.

Interest rate swaps involve the exchange by a Fund with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed rate payments). Interest rate swaps are entered on a net
basis (i.e., the two payment streams are netted out, with the Fund receiving or
paying, as the case may be, only the net amount of the two payments). With
respect to All-Asia Investment Fund and Utility Income Fund, the exchange
commitments can involve payments in the same currency or in different
currencies. The purchase of an interest rate cap entitles the purchaser, to the
extent that a specified index exceeds a predetermined interest rate, to receive
payments of interest on a contractually-based principal amount from the party
selling such interest rate cap. The purchase of an interest rate floor entitles
the purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on an agreed principal amount
from the party selling the interest rate floor.

A Fund may enter into interest rate swaps, caps and floors on either an
asset-based or liability-based basis, depending upon whether it is hedging its
assets or liabilities. The net amount of the excess, if any, of a Fund's
obligations over its entitlements with respect to each interest rate swap, cap
and floor is accrued daily. A Fund will not enter into an interest rate swap,
cap or floor transaction unless the unsecured senior debt or the claims-paying
ability of the other party thereto is then rated in the highest rating category
of at least one nationally recognized rating organization. Alliance will monitor
the creditworthiness of counterparties on an ongoing basis. The swap market has
grown substantially in recent years, with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid.
Caps and floors are more recent innovations for which standardized documentation
has not yet been developed and, accordingly, they are less liquid than swaps.

The use of interest rate transactions is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. If Alliance were to incorrectly
forecast market values, interest rates and other applicable factors, the
investment performance of a Fund would be adversely affected by the use of these
investment techniques. Moreover, even if Alliance is correct in its forecasts,
there is a risk that the transaction position may correlate imperfectly with the
price of the asset or liability being hedged. There is no limit on the amount of
interest rate transactions that may be entered into by a Fund that is permitted
to enter into such transactions. These transactions do not involve the delivery
of securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to interest rate transactions is limited to the net amount of
interest payments that a Fund is contractually obligated to make. If the other
party to an interest rate transaction defaults, a Fund's risk of loss consists
of the net amount of interest payments that the Fund contractually is entitled
to receive.

Repurchase Agreements. A repurchase agreement arises when a buyer purchases a
security and simultaneously agrees to resell it to the vendor at an agreed-upon
future date, normally a day or a few days later. The resale price is greater
than the purchase price, reflecting an agreed-upon interest rate for the period
the buyer's money is invested in the security. Such agreements permit a Fund to
keep all of its assets at work while retaining "overnight" flexibility in
pursuit of investments of a longer-term nature. If a vendor defaults on its
repurchase obligation, a Fund would suffer a loss to the extent that the
proceeds from the sale of the collateral were less than the repurchase price. If
a vendor goes bankrupt, a Fund might be delayed in, or prevented from, selling
the collateral for its benefit. Alliance monitors the creditworthiness of the
vendors with which the Fund enters into repurchase agreements. There is no
percentage restriction on a Fund's ability to enter into repurchase agreements,
other than as indicated under "Investment Objectives and Policies."

Short Sales. A short sale is effected by selling a security that a Fund does not
own, or if the Fund does own such security, it is not to be delivered upon
consummation of the sale. A short sale is "against the box" to the extent that a
Fund contemporaneously owns or has the right to obtain securities identical to
those sold short without payment. Worldwide Privatization Fund, All-Asia
Investment Fund, Income Builder Fund and Utility Income Fund each may make short
sales of securities or maintain short positions only for the purpose of
deferring realization of gain or loss for U.S. federal income tax purposes,
provided that at all times when a short position is open the Fund owns an equal
amount of securities of the same issue as, and equal in amount to, the
securities sold short. In addition, each of those Funds may not make a short
sale if as a result more than 10% of the Fund's net assets would be held as
collateral for short sales, except that All-Asia Investment Fund and Real Estate
Investment Fund may not make a short sale if as a result more than 25% of the
Fund's net assets would be held as collateral for short sales. If the price of
the security sold short increases between the time of the short sale and the
time a Fund replaces the borrowed security, the Fund will incur a loss;
conversely, if the price declines, the Fund will realize a capital gain. See
"Certain Fundamental Investment Policies." Certain special federal income tax
considerations may apply to short sales entered into by a Fund. See "Dividends,
Distributions and Taxes" in the relevant Fund's Statement of Additional
Information.

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income, or receive an agreed upon amount of income from a borrower who has
delivered equivalent collateral. Each Fund will have the right to regain record
ownership of loaned securities or equivalent securities in order to exercise
ownership rights such as voting rights, subscription rights and rights to
dividends, interest or distributions. A Fund may pay reasonable finders',
administrative and custodial fees in connection with a loan. A Fund will not
lend its portfolio securities to any officer, director, employee or affiliate of
the Fund or Alliance.

General. The successful use of the foregoing investment practices draws upon
Alliance's special skills and experience with respect to such instruments and
usually depends on Alliance's ability to forecast price movements, interest
rates or currency exchange rate movements correctly. Should interest rates,
prices or exchange rates move unexpectedly, a Fund may not achieve the
anticipated benefits of the transactions or may realize losses and thus be in a
worse position than if such strategies had not been used. Unlike many
exchange-traded futures contracts and options on futures contracts, there are no
daily price fluctuation limits with respect to certain options and forward
contracts, and adverse market movements could therefore continue to an unlimited
extent over a period of time. In addition, the correlation between movements in
the prices of futures contracts, options and forward contracts and movements in
the prices of the securities and currencies hedged or used for cover will not be
perfect and could produce unanticipated losses.

A Fund's ability to dispose of its position in futures contracts, options and
forward contracts depends on the availability of liquid markets in such
instruments. Markets in options and futures with respect to a number of types of
securities and currencies are relatively new and still developing, and there is
no public market for forward contracts. It is impossible to predict the amount
of trading interest that may exist in various types of futures contracts,
options and forward contracts. If a secondary market does not exist with respect
to an option purchased or written by a Fund, it might not be possible to effect
a closing transaction in the option (i.e., dispose of the option), with the
result that (i) an option purchased by the Fund would have to be exercised in
order for the Fund to realize any profit and (ii) the Fund may not be able to
sell currencies or portfolio securities covering an option written by the Fund
until the option expires or it delivers the underlying security, futures
contract or currency upon exercise. Therefore, no assurance can be given that
the Funds will be able to utilize these instruments effectively for the purposes
set forth above. Furthermore, a Fund's ability to engage in options and futures
transactions may be limited by tax considerations. See "Dividends, Distributions
and Taxes" in the Statement of Additional Information of each Fund that invests
in options and futures.

Future Developments. A Fund may, following written notice to its shareholders,
take advantage of other investment practices that are not currently contemplated
for use by the Fund or are not available but may yet be developed, to the extent
such investment practices are consistent with the Fund's investment objective
and legally permissible for the Fund. Such investment practices, if they arise,
may involve risks that exceed those involved in the activities described above.

Defensive Position. For temporary defensive purposes, each Fund may invest in
certain types of short-term, liquid, high grade or high quality (depending on
the Fund) debt securities. These securities may include U.S. Government
securities, qualifying bank deposits, money market instruments, prime commercial
paper and other types of short-term debt securities including notes and bonds.
For Funds that may invest in foreign countries, such securities may also include
short-term, foreign-currency denominated securities of the type mentioned above
issued by foreign governmental entities, companies and supranational
organizations. For a complete description of the types of securities each Fund
may invest in while in a temporary defensive position, please see such Fund's
Statement of Additional Information.

Portfolio Turnover. Portfolio turnover rates are set forth under "Financial
Highlights." These portfolio turnover rates are greater than those of most other
investment companies, including those which emphasize capital appreciation as a
basic policy. A high rate of portfolio turnover involves correspondingly greater
brokerage and other expenses than a lower rate, which must be borne by the Fund
and its shareholders. High portfolio turnover also may result in the realization
of substantial net short-term capital gains. See "Dividends, Distributions and
Taxes" in each Fund's Statement of Additional Information.

CERTAIN FUNDAMENTAL INVESTMENT POLICIES

Each Fund has adopted certain fundamental investment policies listed below,
which may not be changed without the approval of its shareholders. Additional
investment restrictions with respect to a Fund are set forth in its Statement of
Additional Information.

Alliance Fund may not: (i) invest more than 5% of its total assets in the
securities of any one issuer (other than the U.S. Government); (ii) acquire more
than 10% of the voting or other securities of any one issuer; or (iii) buy
securities of any company that (including its predecessors) has not been in
business at least three continuous years. Pursuant to investment policies which
are not fundamental, the Fund does not invest (i) in puts or calls (except as
discussed above); (ii) in straddles, spreads, or any combination thereof; (iii)
in oil, gas or other mineral exploration or development programs; or (iv) more
than 5% of its gross assets in securities the disposition of which would be
subject to restrictions under the federal securities laws.

Growth Fund and Strategic Balanced Fund each may not: (i) invest more than 5% of
its total assets in the securities of any one issuer (other than U.S. Government
securities and repurchase agreements relating thereto), although up to 25% of
each Fund's total assets may be invested without regard to this restriction; or
(ii) invest 25% or more of its total assets in the securities of any one
industry.

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Premier Growth Fund may not: (i) purchase more than 10% of the outstanding
voting securities of any one issuer; (ii) invest 25% or more of the value of its
total assets in the same industry; (iii) borrow money or issue senior securities
except for temporary or emergency purposes in an amount not exceeding 5% of the
value of its total assets at the time the borrowing is made; (iv) pledge,
mortgage, hypothecate or otherwise encumber any of its assets except in
connection with the writing of(0) call options and except to secure permitted
borrowings; or (v) invest in the securities of any issuer that has a record of
less than three years of continuous operation (including the operation of any
predecessor) if as a result more than 10% of the value of the total assets of
the Fund would be invested in the securities of such issuer or issuers.

Technology Fund may not: (i) with respect to 75% of its total assets, have such
assets represented by other than:(a) cash and cash items, (b) U.S. Government
securities, or (c) securities of any one issuer (other than the U.S. Government
and its agencies or instrumentalities) not greater in value than 5% of the
Fund's total assets, and not more than 10% of the outstanding voting securities
of such issuer; (ii) purchase the securities of any one issuer, other than the
U.S. Government and its agencies or instrumentalities, if as a result (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 25%
of its total assets, or (b) the Fund owns more than 25% of the outstanding
securities of any one class of securities of such issuer; (iii) concentrate its
investments in any one industry, but the Fund has reserved the right to invest
up to 25% of its total assets in a particular industry; and (iv) invest in the
securities of any issuer which has a record of less than three years of
continuous operation (including the operation of any predecessor) if such
purchase would cause 10% or more of its total assets to be invested in the
securities of such issuers.

Quasar Fund may not: (i) purchase the securities of any one issuer, other than
the U.S. Government or any of its agencies or instrumentalities, if as a result
more than 5% of its total assets would be invested in such issuer or the Fund
would own more than 10% of the outstanding voting securities of such issuer,
except that up to 25% of its total assets may be invested without regard to
these 5% and 10% limitations; (ii) invest more than 25% of its total assets in
any particular industry; (iii) borrow money except for temporary or emergency
purposes in an amount not exceeding 5% of its total assets at the time the
borrowing is made; or (iv) invest more than 10% of its assets in restricted
securities.

International Fund may not: (i) invest more than 5% of the value of its total
assets in securities of a single issuer (including repurchase agreements with
any one entity), except U.S. Government securities or foreign government
securities; provided, however, that the Fund may not, with respect to 75% of its
total assets, invest more than 5% of its total assets in securities of any one
foreign government issuer; (ii) own more than 10% of the outstanding securities
of any class of any issuer (for this purpose, all preferred stocks of an issuer
shall be deemed a single class, and all indebtedness of an issuer shall be
deemed a single class), except U.S. Government securities; (iii) invest more
than 25% of the value of its total assets in securities of issuers having their
principal business activities in the same industry; provided, that this
limitation does not apply to U.S. Government securities or foreign government
securities; (iv) invest more than 5% of the value of its total assets in the
securities of any issuer that has a record of less than three years of
continuous operation (including the operation of any predecessor or
unconditional guarantor), except U.S. Government securities or foreign
government securities; (v) invest more than 5% of the value of its total assets
in securities with legal or contractual restrictions on resale, other than
repurchase agreements, or more than 10% of the value of its total assets in
securities that are not readily marketable (including restricted securities and
repurchase agreements not terminable within seven business days); and (vi)
borrow money, except as a temporary measure for extraordinary or emergency
purposes, and then only from banks in amounts not exceeding 5% of its total
assets.

Worldwide Privatization Fund may not: (i) invest 25% or more of its total assets
in securities of issuers conducting their principal business activities in the
same industry, except that this restriction does not apply to (a) U.S.
Government securities, or (b) the purchase of securities of issuers whose
primary business activity is in the national commercial banking industry, so
long as the Fund's Directors determine, on the basis of factors such as
liquidity, availability of investments and anticipated returns, that the Fund's
ability to achieve its investment objective would be adversely affected if the
Fund were not permitted to invest more than 25% of its total assets in those
securities, and so long as the Fund notifies its shareholders of any decision by
the Directors to permit or cease to permit the Fund to invest more than 25% of
its total assets in those securities, such notice to include a discussion of any
increased investment risks to which the Fund may be subjected as a result of the
Directors' determination; (ii) borrow money except from banks for temporary or
emergency purposes, including the meeting of redemption requests that might
require the untimely disposition of securities; borrowing in the aggregate may
not exceed 15%, and borrowing for purposes other than meeting redemptions may
not exceed 5%, of the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made; outstanding borrowings in excess of 5% of the value of the Fund's total
assets will be repaid before any investments are made; or (iii) pledge,
hypothecate, mortgage or otherwise encumber its assets, except to secure
permitted borrowings. The exception contained in clause (i)(b) above is subject
to the operating policy regarding concentration described in this Prospectus.

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any issuer pursuant to the exercise of rights distributed to the Fund by the
issuer, except that no such purchase may be made if as a result the Fund will
fail to meet the diversification requirements of the Code and any such
acquisition in excess of the foregoing 15% or 25% limits will be sold by the
Fund as soon as reasonably practicable (this restriction does not apply to U.S.
Government securities, but will apply to foreign government securities unless
the Commission permits their exclusion); (iii) borrow money except from banks
for temporary or emergency purposes, including the meeting of redemption
requests that might require the untimely disposition of securities; borrowing in
the aggregate may not exceed 15%, and borrowing for purposes other than meeting
redemptions may not exceed 5%, of the Fund's total assets (including the amount
borrowed) less liabilities (not including the amount borrowed) at the time the
borrowing is made; outstanding borrowings in excess of 5% of the Fund's total
assets will be repaid before any subsequent investments are made; or (iv)
purchase a security (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange) if, as a result, the Fund would own any
securities of an open-end investment company or more than 3% of the total
outstanding voting stock of any closed-end investment company, or more than 5%
of the value of the Fund's total assets would be invested in securities of any
closed-end investment company, or more than 10% of such value in closed-end
investment companies in general.

All-Asia Investment Fund may not: (i) invest 25% or more of its total assets in
securities of issuers conducting their principal business activities in the same
industry; (ii) borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests that might require the
untimely disposition of securities; borrowing in the aggregate may not exceed
15%, and borrowing for purposes other than meeting redemptions may not exceed
5%, of the Fund's total assets (including the amount borrowed) less liabilities
(not including the amount borrowed) at the time the borrowing is made;
outstanding borrowings in excess of 5% of the value of the Fund's total assets
will be repaid before any investments are made; or (iii) pledge, hypothecate,
mortgage or otherwise encumber its assets, except to secure permitted
borrowings.

Global Small Cap Fund may not: (i) purchase the securities of any one issuer,
other than the U.S. Government or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of its total assets
would be invested in such issuer or the Fund would own more than 10% of the
outstanding voting securities of such issuer, except that up to 25% of the
Fund's total assets may be invested without regard to these 5% and 10%
limitations; (ii) invest 25% or more of its total assets in the same industry;
this restriction does not apply to U.S. Government securities, but will apply to
foreign government securities unless the Commission permits their exclusion;
(iii) borrow money except from banks for emergency or temporary purposes in an
amount not exceeding 5% of the total assets of the Fund; or (iv) make short
sales of securities or maintain a short position, unless at all times when a
short position is open it owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, securities of the same issue as, and equal in amount to, the
securities sold short and unless not more than 5% of the Fund's net assets is
held as collateral for such sales at any one time.

Global Environment Fund may not: (i) purchase more than 10% of the outstanding
voting securities of any one issuer; (ii) invest more than 15% of the value of
its total assets in the securities of any one issuer or 25% or more of the value
of its total assets in the same industry, except that the Fund will invest more
than 25% of its total assets in Environmental Companies, provided that this
restriction does not apply to U.S. Government securities, but will apply to
foreign government obligations unless the Commission permits their exclusion;
(iii) borrow money or issue senior securities, except that the Fund may borrow
(a) from a bank if immediately after such borrowing there is asset coverage of
at least 300% as defined in the 1940 Act and (b) for temporary purposes in an
amount not exceeding 5% of the value of the total assets of the Fund; (iv)
pledge, hypothecate, mortgage or otherwise encumber its assets, except (a) to
secure permitted borrowings and (b) in connection with initial and variation
margin deposits relating to futures contracts; (v) purchase a security (unless
the security is acquired pursuant to a plan of reorganization or an offer of
exchange) if, as result, the Fund would own any securities of an open-end
investment company or more than 3% of the total outstanding voting stock of any
closed-end investment company, or more than 5% of the value of the Fund's total
assets would be invested in securities of any closed-end investment company or
more than 10% of such value in closed-end investment companies in the aggregate;
(vi) make short sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of such securities
or securities convertible into or exchangeable for, without payment of any
further consideration, securities of the same issue as, and equal in amount to,
the securities sold short ("short sales against the box"), and unless not more
than 5% of the Fund's net assets (taken at market value) is held as collateral
for such sales at any one time; or (vii) buy or write (i.e., sell) put or call
options, except (a) the Fund may buy foreign currency options or write covered
foreign currency options and options on foreign currency futures and (b) the
Fund may purchase warrants.

Balanced Shares may not: (i) invest more than 5% of its total assets in the
securities of any one issuer, except U.S. Government securities; or (ii) own
more than 10% of the outstanding voting securities of any one issuer.

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meeting redemptions may not exceed 5%, of the Fund's total assets (including the
amount borrowed) less liabilities (not including the amount borrowed) at the
time borrowing is made; securities will not be purchased while borrowings in
excess of 5% of the Fund's total assets are outstanding; or (iii) pledge,
hypothecate, mortgage or otherwise encumber its assets, except to secure
permitted borrowings.

Utility Income Fund may not: (i) invest more than 5% of its total assets in the
securities of any one issuer except the U.S. Government, although with respect
to 25% of its total assets it may invest in any number of issuers; (ii) invest
25% or more of its total assets in the securities of issuers conducting their
principal business activities in any one industry, other than the utilities
industry, except that this restriction does not apply to U.S. Government
securities; (iii) purchase more than 10% of any class of the voting securities
of any one issuer; (iv) borrow money except from banks for temporary or
emergency purposes, including the meeting of redemption requests that might
require the untimely disposition of securities; borrowing in the aggregate may
not exceed 15%, and borrowing for purposes other than meeting redemptions may
not exceed 5%, of the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made; outstanding borrowings in excess of 5% of the Fund's total assets will be
repaid before any subsequent investments are made; or (v) purchase a security
if, as a result (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange), the Fund would own any securities of an
open-end investment company or more than 3% of the total outstanding voting
stock of any closed-end investment company or more than 5% of the value of the
Fund's net assets would be invested in securities of any one or more closed-end
investment companies.

Growth and Income Fund may not (i) invest more than 5% of its net assets in the
security of any one issuer, except U.S. Government obligations or (ii) own more
than 10% of the outstanding voting securities of any issuer.

Real Estate Investment Fund may not: (i) with respect to 75% of its total
assets, have such assets represented by other than: (a) cash and cash items, (b)
U.S. Government securities, or (c) securities of any one issuer (other than the
U.S. Government and its agencies or instrumentalities) not greater in value than
5% of the Fund's total assets, and not more than 10% of the outstanding voting
securities of such issuer; (ii) purchase the securities of any one issuer, other
than the U.S. Government and its agencies or instrumentalities, if as a result
(a) the value of the holdings of the Fund in the securities of such issuer
exceeds 25% of its total assets, or (b) the Fund owns more than 25% of the
outstanding securities of any one class of securities of such issuer; (iii)
invest 25% or more of its total assets in the securities of issuers conducting
their principal business activities in any one industry, other than the real
estate industry in which the Fund will invest at least 25% or more of its total
assets, except that this restriction does not apply to U.S. Government
securities; (iv) purchase or sell real estate, except that it may purchase and
sell securities of companies which deal in real estate or interests therein,
including Real Estate Equity Securities; or (v) borrow money except for
temporary or emergency purposes or to meet redemption requests, in an amount not
exceeding 5% of the value of its total assets at the time the borrowing is made.

RISK CONSIDERATIONS

Investment in certain of the Funds involves the special risk considerations
described below. These risks may be heightened when investing in emerging
markets.

Investment in Privatized Enterprises by Worldwide Privatization Fund. In certain
jurisdictions, the ability of foreign entities, such as the Fund, to participate
in privatizations may be limited by local law, or the price or terms on which
the Fund may be able to participate may be less advantageous than for local
investors. Moreover, there can be no assurance that governments that have
embarked on privatization programs will continue to divest their ownership of
state enterprises, that proposed privatizations will be successful or that
governments will not re-nationalize enterprises that have been privatized.
Furthermore, in the case of certain of the enterprises in which the Fund may
invest, large blocks of the stock of those enterprises may be held by a small
group of stockholders, even after the initial equity offerings by those
enterprises. The sale of some portion or all of those blocks could have an
adverse effect on the price of the stock of any such enterprise.

Most state enterprises or former state enterprises go through an internal
reorganization of management prior to conducting an initial equity offering in
an attempt to better enable these enterprises to compete in the private sector.
However, certain reorganizations could result in a management team that does not
function as well as the enterprise's prior management and may have a negative
effect on such enterprise. After making an initial equity offering, enterprises
that may have enjoyed preferential treatment from the respective state or
government that owned or controlled them may no longer receive such preferential
treatment and may become subject to market competition from which they were
previously protected. Some of these enterprises may not be able to effectively
operate in a competitive market and may suffer losses or experience bankruptcy
due to such competition. In addition, the privatization of an enterprise by its
government may occur over a number of years, with the government continuing to
hold a controlling position in the enterprise even after the initial equity
offering for the enterprise.

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income falls relative to the U.S. dollar between receipt of the income and the
making of Fund distributions, the Fund may be required to liquidate securities
in order to make distributions if it has insufficient cash in U.S. dollars to
meet distribution requirements that the Fund must satisfy to qualify as a
regulated investment company for federal income tax purposes. Similarly, if an
exchange rate declines between the time a Fund incurs expenses in U.S. dollars
and the time cash expenses are paid, the amount of the currency required to be
converted into U.S. dollars in order to pay expenses in U.S. dollars could be
greater than the equivalent amount of such expenses in the currency at the time
they were incurred. In light of these risks, a Fund may engage in certain
currency hedging transactions, which themselves involve certain special risks.
See "Additional Investment Practices" above.

Foreign Investment. The securities markets of many foreign countries are
relatively small, with the majority of market capitalization and trading volume
concentrated in a limited number of companies representing a small number of
industries. Consequently, a Fund whose investment portfolio includes such
securities may experience greater price volatility and significantly lower
liquidity than a portfolio invested solely in equity securities of U.S.
companies. These markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading significant
blocks of securities, than is usual in the United States. Securities settlements
may in some instances be subject to delays and related administrative
uncertainties. These problems are particularly severe in India, where settlement
is through physical delivery, and, where, currently, a severe shortage of vault
capacity exists among custodial banks, although efforts are being undertaken to
alleviate the shortage. Certain foreign countries require governmental approval
prior to investments by foreign persons or limit investment by foreign persons
to only a specified percentage of an issuer's outstanding securities or a
specific class of securities which may have less advantageous terms (including
price) than securities of the company available for purchase by nationals. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the costs and expenses of a Fund. In addition, the
repatriation of investment income, capital or the proceeds of sales of
securities from certain countries is controlled under regulations, including in
some cases the need for certain advance government notification or authority,
and if a deterioration occurs in a country's balance of payments, the country
could impose temporary restrictions on foreign capital remittances.

A Fund could also be adversely affected by delays in, or a refusal to grant, any
required governmental approval for repatriation, as well as by the application
to it of other restrictions on investment. Investing in local markets may
require a Fund to adopt special procedures, which may involve additional costs
to a Fund. The liquidity of a Fund's investments in any country in which any of
these factors exists could be affected and Alliance will monitor the effect of
any such factor or factors on a Fund's investments. Furthermore, transaction
costs including brokerage commissions for transactions both on and off the
securities exchanges in many foreign countries are generally higher than in the
United States.

Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
insider trading rules, restrictions on market manipulation, shareholder proxy
requirements and timely disclosure of information. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases significantly,
from U.S. standards in important respects and less information may be available
to investors in foreign securities than to investors in U.S. securities.
Substantially less information is publicly available about certain non-U.S.
issuers than is available about U.S. issuers.

The economies of individual foreign countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product or gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage, political changes,
government regulation, political or social instability or diplomatic
developments could affect adversely the economy of a foreign country or the
Fund's investments in such country. In the event of expropriation,
nationalization or other confiscation, a Fund could lose its entire investment
in the country involved. In addition, laws in foreign countries governing
business organizations, bankruptcy and insolvency may provide less protection to
security holders such as the Fund than that provided by U.S. laws.

Investment in United Kingdom Issuers. Investment in securities of United Kingdom
issuers involves certain considerations not present with investment in
securities of U.S. issuers. As with any investment not denominated in the U.S.
dollar, the U.S. dollar value of the Fund's investment denominated in the
British pound sterling will fluctuate with pound sterling--dollar exchange rate
movements. Between 1972, when the pound sterling was allowed to float against
other currencies, and the end of 1992, the pound sterling generally depreciated
against most major currencies, including the U.S. dollar. Between September and
December 1992, after the United Kingdom's exit from the Exchange Rate Mechanism
of the European Monetary System, the value of the pound sterling fell by almost
20% against the U.S. dollar. The pound sterling continued to fall in early 1993,
but recovered due to interest rate cuts throughout Europe and an upturn in the
economy of the United Kingdom. The average exchange rate of the U.S. dollar to
the pound sterling was 1.50 in 1993 and 1.56 in 1996. On December 31, 1997 the
U.S. dollar-pound sterling exchange rate was 1.65.

The United Kingdom's largest stock exchange is the London Stock Exchange, which
is the third largest exchange in the world. As measured by the FT-SE 100 index,
the performance of the 100 largest companies in the United Kingdom reached
4118.5 at the end of 1996, up approximately 12% from the end

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of 1995. On December 31, 1997 the FT-SE 100 index closed at 5,135.5, up
approximately 25% from the end of 1996.

The public sector borrowing requirement ("PSBR"), a mandated measure of the
amount required to balance the budget, has been, over the last two fiscal years,
higher than forecast. The general government fiscal deficit has been in excess
of the eligibility limit prescribed by the European Union for countries that
intend to participate in the Economic and Monetary Union ("EMU"), which is
scheduled to take effect in January 1999. The government, however, expects that
the deficit will be below that limit in the 1997-98 and 1998-99 fiscal years.
Although the government has not yet made a formal announcement with respect to
the United Kingdom's participation in the EMU, remarks of the Chancellor of the
Exchequer made in mid-October 1997 suggest that the United Kingdom will not
participate in the EMU beginning in January 1999 but may do so thereafter.

From 1979 until 1997 the Conversative Party controlled Parliament. In the May 1,
1997 general elections, however, the Labour Party, led by Tony Blair, won a
majority in Parliament, holding 418 of 658 seats in the House of Commons. Mr.
Blair, who was appointed Prime Minister, has launched a number of reform
initiatives, including an overhaul of the monetary policy framework intended to
protect monetary policy from political forces by vesting responsibility for
setting interest rates in a new Monetary Policy Committee headed by the Governor
of the Bank of England, as opposed to the Treasury. Prime Minister Blair has
also undertaken a comprehensive restructuring of the regulation of the financial
services industry. For further information regarding the United Kingdom, see the
Statement of Additional Information of New Europe Fund.

Investment in Japanese Issuers. Investment in securities of Japanese issuers
involves certain considerations not present with investment in securities of
U.S. issuers. As with any investment not denominated in the U.S. dollar, the
U.S. dollar value of each Fund's investments denominated in the Japanese yen
will fluctuate with yen-dollar exchange rate movements. Between 1985 and 1995,
the Japanese yen generally appreciated against the U.S. dollar, but has since
fallen from its post-World War II high (in 1995) against the U.S. dollar.

Japan's largest stock exchange is the Tokyo Stock Exchange, the First Section of
which is reserved for larger, established companies. As measured by the TOPIX, a
capitalization-weighted composite index of all common stocks listed in the First
Section, the performance of the First Section reached a peak in 1989.
Thereafter, the TOPIX declined approximately 50% through the end of 1993. In
1994, the TOPIX closed at 1,559.09, up approximately 8% from the end of 1993; in
1995, the TOPIX closed at 1,577.70, up approximately 1% from the end of 1994;
and in 1996, the TOPIX closed at 1,470.94, down approximately 7% from the end of
1995. In 1997, the TOPIX closed at 1,175.03, down 20.12% from the end of 1996.
Certain valuation measures, such as price-to-book value and price-to-cash flow
ratios, indicate that the Japanese stock market is near its lowest level in the
last twenty years relative to other world markets.

In recent years, Japan has consistently recorded large current account trade
surpluses with the U.S. that have caused difficulties in the relations between
the two countries. On October 1, 1994, the U.S. and Japan reached an agreement
that may lead to more open Japanese markets with respect to trade in certain
goods and services. In June 1995, the two countries agreed in principle to
increase Japanese imports of American automobiles and automotive parts.
Nevertheless it is expected that the continuing friction between the U.S. and
Japan with respect to trade issues will continue for the foreseeable future.

Each Fund's investments in Japanese issuers will be subject to uncertainty
resulting from the instability of recent Japanese ruling coalitions. From 1955
to 1993, Japan's government was controlled by a single political party. Between
August 1993 and October 1996 Japan was ruled by a series of four coalition
governments. As the result of a general election on October 20, 1996, however,
Japan has returned to a single-party government led by Prime Minister Ryutaro
Hashimoto. While Mr. Hashimoto's party does not control a majority of the seats
in the parliament, it is only three seats short of the 251 seats required to
attain a majority in the House of Representatives (down from a 12-seat shortfall
just after the October 1996 election). For the past several years, Japan's
banking industry has been weakened by a significant amount of problem loans.
Japan's banks also have significant exposure to the current financial turmoil in
other Asian markets. On December 17, 1997 the Japanese government proposed to
strengthen Japan's banks by means of an infusion of public funds and other
measures. It is unclear whether these proposals, which are under consideration
by Japan's parliament, would, if implemented, achieve their intended effect. For
further information regarding Japan, see the Statements of Additional
Information of All-Asia Investment Fund and International Fund.

Investment in Smaller, Emerging Companies. The Funds may invest in smaller,
emerging companies. Global Small Cap Fund and New Europe Fund will emphasize
investment in, and All-Asia Investment Fund and Global Environment Fund may
emphasize investment in, smaller, emerging companies. Investment in such
companies involves greater risks than is customarily associated with securities
of more established companies. Companies in the earlier stages of their
development often have products and management personnel which have not been
thoroughly tested by time or the marketplace; their financial resources may not
be as substantial as those of more established companies. The securities of
smaller companies may have relatively limited marketability and may be subject
to more abrupt or erratic market movements than securities of larger companies
or broad market indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also contribute to
stock price volatility.

43
<PAGE>

often characterized by relatively short product cycles and competitive pricing
policies. Losses may result from large product development or expansion costs,
unprotected marketing or distribution systems, erratic revenue flows and low
profit margins. Additional risks that Environmental Companies may face include
difficulty in financing the high cost of technological development,
uncertainties due to changing governmental regulation or rapid technological
advances, potential liabilities associated with hazardous components and
operations, and difficulty in finding experienced employees.

The Real Estate Industry. Although Real Estate Investment Fund does not invest
directly in real estate, it does invest primarily in Real Estate Equity
Securities and does have a policy of concentration of its investments in the
real estate industry. Therefore, an investment in the Fund is subject to certain
risks associated with the direct ownership of real estate and with the real
estate industry in general. These risks include, among others: possible declines
in the value of real estate; risks related to general and local economic
conditions; possible lack of availability of mortgage funds; overbuilding;
extended vacancies of properties; increases in competition, property taxes and
operating expenses; changes in zoning laws; costs resulting from the clean-up
of, and liability to third parties for damages resulting from, environmental
problems; casualty or condemnation losses; uninsured damages from floods,
earthquakes or other natural disasters; limitations on and variations in rents;
and changes in interest rates. To the extent that assets underlying the Fund's
investments are concentrated geographically, by property type or in certain
other respects, the Fund may be subject to certain of the foregoing risks to a
greater extent.

In addition, if Real Estate Investment Fund receives rental income or income
from the disposition of real property acquired as a result of a default on
securities the Fund owns, the receipt of such income may adversely affect the
Fund's ability to retain its tax status as a regulated investment company. See
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
Investments by the Fund in securities of companies providing mortgage servicing
will be subject to the risks associated with refinancings and their impact on
servicing rights.

REITs. Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, are
subject to heavy cash flow dependency, default by borrowers and
self-liquidation. REITs are also subject to the possibilities of failing to
qualify for tax free pass-through of income under the Code and failing to
maintain their exemptions from registration under the 1940 Act.

REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Investing in REITs involves risks similar to those associated with investing in
small capitalization companies. REITs may have limited financial resources, may
trade less frequently and in a limited volume and may be subject to more abrupt
or erratic price movements than larger company securities. Historically, small
capitalization stocks, such as REITs, have been more volatile in price than the
larger capitalization stocks included in the S&P Index of 500 Common Stocks.

Mortgage-Backed Securities. As discussed above, investing in Mortgage-Backed
Securities involves certain unique risks in addition to those risks associated
with investment in the real estate industry in general. These risks include the
failure of a counterparty to meet its commitments, adverse interest rate changes
and the effects of prepayments on mortgage cash flows. When interest rates
decline, the value of an investment in fixed rate obligations can be expected to
rise. Conversely, when interest rates rise, the value of an investment in fixed
rate obligations can be expected to decline. In contrast, as interest rates on
adjustable rate mortgage loans are reset periodically, yields on investments in
such loans will gradually align themselves to reflect changes in market interest
rates, causing the value of such investments to fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed rate
obligations.

Further, the yield characteristics of Mortgage-Backed Securities, such as those
in which Real Estate Investment Fund may invest, differ from those of
traditional fixed-income securities. The major differences typically include
more frequent interest and principal payments (usually monthly), the
adjustability of interest rates, and the possibility that prepayments of
principal may be made substantially earlier than their final distribution dates.

Prepayment rates are influenced by changes in current interest rates and a
variety of economic, geographic, social and other factors, and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Early payment associated
with Mortgage-Backed Securities causes these securities to experience
significantly greater price and yield volatility than that experienced by
traditional fixed-income securities. Under certain interest rate and prepayment
rate scenarios, the Fund may fail to recoup fully its investment in
Mortgage-Backed Securities notwithstanding any direct or indirect governmental
or agency guarantee. When the Fund reinvests amounts representing payments and
unscheduled prepayments of principal, it may receive a rate of interest that is
lower than the rate on existing adjustable rate mortgage pass-through
securities.

44
<PAGE>

Thus, Mortgage-Backed Securities, and adjustable rate mortgage pass-through
securities in particular, may be less effective than other types of U.S.
Government securities as a means of "locking in" interest rates.

U.S. and Foreign Taxes. A Fund's investment in foreign securities may be subject
to taxes withheld at the source on dividend or interest payments. Foreign taxes
paid by a Fund may be creditable or deductible by U.S. shareholders for U.S.
income tax purposes. No assurance can be given that applicable tax laws and
interpretations will not change in the future. Moreover, non-U.S. investors may
not be able to credit or deduct such foreign taxes. Investors should review
carefully the information discussed under the heading "Dividends, Distributions
and Taxes" and should discuss with their tax advisers the specific tax
consequences of investing in a Fund.

Fixed-Income Securities. The value of each Fund's shares will fluctuate with the
value of its investments. The value of each Fund's investments in fixed-income
securities will change as the general level of interest rates fluctuates. During
periods of falling interest rates, the values of fixed-income securities
generally rise. Conversely, during periods of rising interest rates, the values
of fixed-income securities generally decline.

Under normal market conditions, the average dollar-weighted maturity of a Fund's
portfolio of debt or other fixed-income securities is expected to vary between
five and 30 years in the case of All-Asia Investment Fund, between eight and 15
years in the case of Income Builder Fund, between five and 25 years in the case
of Utility Income Fund and between one year or less and 30 years in the case of
all other Funds that invest in such securities. In periods of increasing
interest rates, each of the Funds may, to the extent it holds mortgage-backed
securities, be subject to the risk that the average dollar-weighted maturity of
the Fund's portfolio of debt or other fixed- income securities may be extended
as a result of lower than anticipated prepayment rates. See "Additional
Investment Practices--Mortgage-Backed Securities."

Securities Ratings. The ratings of securities by S&P, Moody's, Duff & Phelps and
Fitch are a generally accepted barometer of credit risk. They are, however,
subject to certain limitations from an investor's standpoint. The rating of an
issuer is heavily weighted by past developments and does not necessarily reflect
probable future conditions. There is frequently a lag between the time a rating
is assigned and the time it is updated. In addition, there may be varying
degrees of difference in credit risk of securities within each rating category.

Securities rated Aaa by Moody's and AAA by S&P, Duff & Phelps and Fitch are
considered to be of the highest quality; capacity to pay interest and repay
principal is extremely strong. Securities rated Aa by Moody's and AA by S&P,
Duff & Phelps and Fitch are considered to be high quality; capacity to repay
principal is considered very strong, although elements may exist that make risks
appear somewhat larger than exist with securities rated Aaa or AAA. Securities
rated A are considered by Moody's to possess adequate factors giving security to
principal and interest. S&P, Duff & Phelps and Fitch consider such securities to
have a strong capacity to pay interest and repay principal. Such securities are
more susceptible to adverse changes in economic conditions and circumstances
than higher-rated securities.

Securities rated Baa by Moody's and BBB by S&P, Duff & Phelps and Fitch are
considered to have an adequate capacity to pay interest and repay principal.
Such securities are considered to have speculative characteristics and share
some of the same characteristics as lower-rated securities. Sustained periods of
deteriorating economic conditions or of rising interest rates are more likely to
lead to a weakening in the issuer's capacity to pay interest and repay principal
than in the case of higher-rated securities. Securities rated Ba by Moody's and
BB by S&P, Duff & Phelps and Fitch are considered to have speculative
characteristics with respect to capacity to pay interest and repay principal
over time; their future cannot be considered as well-assured. Securities rated B
by Moody's, S&P, Duff & Phelps and Fitch are considered to have highly
speculative characteristics with respect to capacity to pay interest and repay
principal. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Securities rated Caa by Moody's and CCC by S&P, Duff & Phelps and Fitch are of
poor standing and there is a present danger with respect to payment of principal
or interest. Securities rated Ca by Moody's and CC by S&P and Fitch are
minimally protected, and default in payment of principal or interest is
probable. Securities rated C by Moody's, S&P and Fitch are in imminent default
in payment of principal or interest and have extremely poor prospects of ever
attaining any real investment standing. Securities rated D by S&P and Fitch are
in default. The issuer of securities rated DD by Duff & Phelps is under an order
of liquidation.

Investment in Lower-Rated Fixed-Income Securities. Lower-rated securities, i.e.,
those rated Ba and lower by Moody's or BB and lower by S&P, Duff & Phelps or
Fitch, are subject to greater risk of loss of principal and interest than
higher-rated securities. They are also generally considered to be subject to
greater market risk than higher-rated securities, and the capacity of issuers of
lower-rated securities to pay interest and repay principal is more likely to
weaken than is that of issuers of higher-rated securities in times of
deteriorating economic conditions or rising interest rates. In addition,
lower-rated securities may be more susceptible to real or perceived adverse
economic conditions than investment grade securities.

The market for lower-rated securities may be thinner and less active than that
for higher-rated securities, which can adversely affect the prices at which
these securities can be sold. To the extent that there is no established
secondary market for lower-rated securities, a Fund may experience difficulty in
valuing such securities and, in turn, the Fund's assets. In addition, adverse
publicity and investor perceptions about lower-rated securities, whether or not
factual, may tend to impair their market value and liquidity.

Alliance will try to reduce the risk inherent in investment in lower-rated
securities through credit analysis, diversification and attention to current
developments and trends in interest

45
<PAGE>

rates and economic and political conditions. However, there can be no assurance
that losses will not occur. Since the risk of default is higher for lower-rated
securities, Alliance's research and credit analysis are a correspondingly more
important aspect of its program for managing a Fund's securities than would be
the case if a Fund did not invest in lower-rated securities.

In seeking to achieve a Fund's investment objective, there will be times, such
as during periods of rising interest rates, when depreciation and realization of
capital losses on securities in a Fund's portfolio will be unavoidable.
Moreover, medium- and lower-rated securities and non-rated securities of
comparable quality may be subject to wider fluctuations in yield and market
values than higher-rated securities under certain market conditions. Such
fluctuations after a security is acquired do not affect the cash income received
from that security but are reflected in the net asset value of a Fund. See the
Statement of Additional Information for each Fund that invests in lower-rated
securities for a description of the bond ratings of Moody's, S&P, Duff & Phelps
and Fitch.

Certain lower-rated securities in which Growth Fund, Income Builder Fund,
Strategic Balanced and Utility Income Fund may invest may contain call or
buy-back features that permit the issuers thereof to call or repurchase such
securities. Such securities may present risks based on prepayment expectations.
If an issuer exercises such a provision, a Fund may have to replace the called
security with a lower yielding security, resulting in a decreased rate of return
to the Fund.

Non-Diversified Status. Each of Worldwide Privatization Fund, New Europe Fund,
All-Asia Investment Fund, Global Environment Fund, and Income Builder Fund is a
"non-diversified" investment company, which means the Fund is not limited in the
proportion of its assets that may be invested in the securities of a single
issuer. However, each Fund intends to conduct its operations so as to qualify to
be taxed as a "regulated investment company" for purposes of the Code, which
will relieve the Fund of any liability for federal income tax to the extent its
earnings are distributed to shareholders. See "Dividends, Distributions and
Taxes" in each Fund's Statement of Additional Information. To so qualify, among
other requirements, the Fund will limit its investments so that, at the close of
each quarter of the taxable year, (i) not more than 25% of the Fund's total
assets will be invested in the securities of a single issuer, and (ii) with
respect to 50% of its total assets, not more than 5% of its total assets will be
invested in the securities of a single issuer and the Fund will not own more
than 10% of the outstanding voting securities of a single issuer. A Fund's
investments in U.S. Government securities and other regulated investment
companies are not subject to these limitations. Because each of Worldwide
Privatization Fund, New Europe Fund, All-Asia Investment Fund and Income Builder
Fund is a non-diversified investment company, it may invest in a smaller number
of individual issuers than a diversified investment company, and an investment
in such Fund may, under certain circumstances, present greater risk to an
investor than an investment in a diversified investment company.

Foreign government securities are not treated like U.S. Government securities
for purposes of the diversification tests described in the preceding paragraph,
but instead are subject to these tests in the same manner as the securities of
non-governmental issuers.

Year 2000. Many computer software systems in use today cannot properly process
date-related information from and after January 1, 2000. Should any of the
computer systems employed by the Funds' major service providers fail to process
this type of information properly, that could have a negative impact on the
Funds' operations and the services that are provided to the Funds' shareholders.
Alliance, each Fund's investment adviser, Alliance Fund Distributors, Inc.
("AFD"), each Fund's principal underwriter, and Alliance Fund Services, Inc.
("AFS"), each Fund's registrar, transfer agent and dividend disbursing agent,
have advised the Funds that they are reviewing all of their computer systems
with the goal of modifying or replacing such systems prior to January 1, 2000 to
the extent necessary to foreclose any such negative impact. In addition,
Alliance has been advised by each Fund's custodian that they is also in the
process of reviewing its systems with the same goal. As of the date of this
Prospectus, the Funds and Alliance have no reason to believe that these goals
will not be achieved.

- --------------------------------------------------------------------------------
PURCHASE AND SALE
- --------------------------------------------------------------------------------
OF SHARES
- --------------------------------------------------------------------------------

HOW TO BUY SHARES

You can purchase shares of any of the Funds at a price based on the next
calculation of their net asset value after receipt of a proper purchase order
either through broker-dealers, banks or other financial intermediaries, or
directly through AFD. The minimum initial investment in each Fund is $250. The
minimum for subsequent investments in each Fund is $50. Investments of $25 or
more are allowed under the automatic investment program of each Fund. Share
certificates are issued only upon request. See the Subscription Application and
Statements of Additional Information for more information.

Existing shareholders may make subsequent purchases by electronic funds transfer
if they have completed the appropriate section of the Subscription Application
or the Shareholder Options form obtained from AFS. Telephone purchase orders can
be made by calling 800-221-5672 and may not exceed $500,000.

Each Fund offers three classes of shares through this prospectus, Class A, Class
B and Class C. The Funds may refuse any order to purchase shares. In this
regard, the Funds reserve the right to restrict purchases of shares (including
through exchanges) when they appear to evidence a pattern of frequent purchases
and sales made in response to short-term considerations.

46
<PAGE>

Class A Shares--Initial Sales Charge Alternative

You can purchase Class A shares at net asset value plus an initial sales charge,
as follows:

<TABLE>
<CAPTION>
Initial Sales Charge

as % of Commission to
Net Amount as % of Dealer/Agent as %
Amount Purchased Invested Offering Price of Offering Price
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.44% 4.25% 4.00%
- --------------------------------------------------------------------------------------
$100,000 to
less than $250,000 3.36 3.25 3.00
- --------------------------------------------------------------------------------------
$250,000 to
less than $500,000 2.30 2.25 2.00
- --------------------------------------------------------------------------------------
$500,000 to
less than $1,000,000 1.78 1.75 1.50
- --------------------------------------------------------------------------------------
</TABLE>

On purchases of $1,000,000 or more, you pay no initial sales charge but may pay
a contingent deferred sales charge ("CDSC") equal to 1% of the lesser of net
asset value at the time of redemption or original cost if you redeem within one
year; Alliance may pay the dealer or agent a fee of up to 1% of the dollar
amount purchased. Certain purchases of Class A shares may qualify for reduced or
eliminated sales charges in accordance with a Fund's Combined Purchase
Privilege, Cumulative Quantity Discount, Statement of Intention, Privilege for
Certain Retirement Plans, Reinstatement Privilege and Sales at Net Asset Value
programs. Consult the Subscription Application and Statements of Additional
Information.

Class B Shares--Deferred Sales Charge Alternative

You can purchase Class B shares at net asset value without an initial sales
charge. A Fund will thus receive the full amount of your purchase. However, you
may pay a CDSC if you redeem shares within four years after purchase. The amount
of the CDSC (expressed as a percentage of the lesser of the current net asset
value or original cost) will vary according to the number of years from the
purchase of Class B shares until the redemption of those shares.

The amount of the CDSC for Class B shares for each Fund is as set forth below.
Class B shares of a Fund purchased prior to the date of this Prospectus may be
subject to a different CDSC schedule, which was disclosed in the Fund's
prospectus in use at the time of purchase and is set forth in the Fund's current
Statement of Additional Information.

<TABLE>
<CAPTION>
Year Since Purchase CDSC
--------------------------------------------
<S> <C>
First ................................ 4.0%
Second ............................... 3.0%
Third ................................ 2.0%
Fourth ............................... 1.0%
Fifth ................................ None
</TABLE>

Class B shares are subject to higher distribution fees than Class A shares for a
period (after which they convert to Class A shares) of eight years, or six years
with respect to Premier Growth Fund. The higher fees mean a higher expense
ratio, so Class B shares pay correspondingly lower dividends and may have a
lower net asset value than Class A shares.

Class C Shares--Asset-Based Sales Charge Alternative

You can purchase Class C shares at net asset value without any initial sales
charge. A Fund will thus receive the full amount of your purchase, and, if you
hold your shares for one year or more, you will receive the entire net asset
value of your shares upon redemption. Class C shares incur higher distribution
fees than Class A shares and do not convert to any other class of shares of the
Fund. The higher fees mean a higher expense ratio, so Class C shares pay
correspondingly lower dividends and may have a lower net asset value than Class
A shares.

Class C shares redeemed within one year of purchase will be subject to a CDSC
equal to 1% of the lesser of their original cost or net asset value at the time
of redemption.

Application of the CDSC

Shares obtained from dividend or distribution reinvestment are not subject to
the CDSC. The CDSC is deducted from the amount of the redemption and is paid to
AFD. The CDSC will be waived on redemptions of shares following the death or
disability of a shareholder, to meet the requirements of certain qualified
retirement plans or pursuant to a monthly, bimonthly or quarterly systematic
withdrawal plan. See the Statements of Additional Information.

How the Funds Value Their Shares

The net asset value of each Class of shares of a Fund is calculated by dividing
the value of the Fund's net assets allocable to that Class by the outstanding
shares of that Class. Shares are valued each day the Exchange is open as of the
close of regular trading (currently 4:00 p.m. Eastern time). The securities in a
Fund are valued at their current market value determined on the basis of market
quotations or, if such quotations are not readily available, such other methods
as the Fund's Directors believe accurately reflects fair market value.

Employee Benefit Plans

Certain employee benefit plans, including employer-sponsored tax-qualified
401(k) plans and other defined contribution retirement plans ("Employee Benefit
Plans"), may establish requirements as to the purchase, sale or exchange of
shares, including maximum and minimum initial investment requirements, that are
different from those described in this Prospectus. Employee Benefit Plans may
also not offer all classes of shares of the Funds. In order to enable
participants investing through Employee Benefit Plans to purchase shares of the
Funds, the maximum and minimum investment amounts may be different for shares
purchased through Employee Benefit Plans from those described in this
Prospectus. In addition, the Class A, Class B and Class C CDSC may be waived for
investments made through Employee Benefit Plans.

General

The decision as to which class of shares is more beneficial to you depends on
the amount and intended length of your investment. If you are making a large
investment, thus qualifying for a reduced sales charge, you might consider Class
A shares. If you are making a smaller investment, you might consider Class B
shares because 100% of your purchase is invested immediately. If you are unsure
of the length of your investment, you might consider Class C shares because
there is no initial sales charge and no CDSC as long as the shares are held for
one year or more. Consult your

47
<PAGE>

financial agent. Dealers and agents may receive differing compensation for
selling Class A, Class B or Class C shares. There is no size limit on purchases
of Class A shares. The maximum purchase of Class B shares is $250,000. The
maximum purchase of Class C shares is $1,000,000.

Each Fund offers a fourth class of shares, Advisor Class shares, by means of
separate prospectus. Advisor Class shares may be purchased and held solely by
(i) accounts established under a fee-based program sponsored and maintained by a
registered broker-dealer or other financial intermediary and approved by AFD,
(ii) a self-directed defined contribution employee benefit plan (e.g., a 401(k)
plan) that has at least 1,000 participants or $25 million in assets and (iii)
certain other categories of investors described in the prospectus for the
Advisor Class, including investment advisory clients of, and certain other
persons associated with, Alliance and its affiliates or the Funds. Advisor Class
shares are offered without any initial sales charge or CDSC and without an
ongoing distribution fee and are expected, therefore, to have different
performance than Class A, Class B or Class C shares. You can obtain more
information about Advisor Class shares by contacting AFS at 800-221-5672 or by
contacting your financial representative.

A transaction, service, administrative or other similar fee may be charged by
your broker-dealer, agent, financial intermediary or other financial
representative with respect to the purchase, sale or exchange of Class A, Class
B or Class C shares made through such financial representative. Such financial
intermediaries may also impose requirements with respect to the purchase, sale
or exchange of shares that are different from, or in addition to, those imposed
by a Fund, including requirements as to the minimum initial and subsequent
investment amounts.

In addition to the discount or commission paid to dealers or agents, AFD from
time to time pays additional cash or other incentives to dealers or agents,
including EQ Financial Consultants, Inc., an affiliate of AFD, in connection
with the sale of shares of the Funds. Such additional amounts may be utilized,
in whole or in part, in some cases together with other revenues of such dealers
or agents, to provide additional compensation to registered representatives who
sell shares of the Funds. On some occasions, such cash or other incentives will
be conditioned upon the sale of a specified minimum dollar amount of the shares
of a Fund and/or other Alliance Mutual Funds during a specific period of time.
Such incentives may take the form of payment for attendance at seminars, meals,
sporting events or theater performances, or payment for travel, lodging and
entertainment incurred in connection with travel by persons associated with a
dealer or agent and their immediate family members to urban or resort locations
within or outside the United States. Such dealer or agent may elect to receive
cash incentives of equivalent amount in lieu of such payments.

HOW TO SELL SHARES

You may "redeem"(i.e., sell your shares in a Fund to the Fund) on any day the
Exchange is open, either directly or through your financial intermediary. The
price you will receive is the net asset value (less any applicable CDSC) next
calculated after the Fund receives your request in proper form. Proceeds
generally will be sent to you within seven days. However, for shares recently
purchased by check or electronic funds transfer, a Fund will not send proceeds
until it is reasonably satisfied that the check or electronic funds transfer has
been collected (which may take up to 15 days).

Selling Shares Through Your Broker

Your broker must receive your request before 4:00 p.m. Eastern time, and your
broker must transmit your request to the Fund by 5:00 p.m. Eastern time, for you
to receive that day's net asset value (less any applicable CDSC). Your broker is
responsible for furnishing all necessary documentation to a Fund and may charge
you for this service.

Selling Shares Directly To A Fund

Send a signed letter of instruction or stock power form to AFS along with
certificates, if any, that represent the shares you want to sell. For your
protection, signatures must be guaranteed by a bank, a member firm of a national
stock exchange or other eligible guarantor institution. Stock power forms are
available from your financial intermediary, AFS, and many commercial banks.
Additional documentation is required for the sale of shares by corporations,
intermediaries, fiduciaries and surviving joint owners. For details contact:

Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
800-221-5672

Alternatively, a request for redemption of shares for which no stock
certificates have been issued can also be made by telephone to 800-221-5672.
Telephone redemption requests must be made by 4:00 p.m. Eastern time on a Fund
business day in order to receive that day's net asset value, and, for
redemptions made before March 1, 1998, may be made only once in any 30-day
period (except for certain omnibus accounts). A shareholder who has completed
the appropriate section of the Subscription Application, or the Shareholder
Options form obtained from AFS, can elect to have the proceeds of his or her
redemption sent to his or her bank via an electronic funds transfer. Proceeds of
telephone redemptions also may be sent by check to a shareholder's address of
record. Redemption requests by electronic funds transfer may not exceed $100,000
and redemption requests by check may not exceed $50,000 per day. Telephone
redemption is not available for shares held in nominee or "street name" accounts
or retirement plan accounts or shares held by a shareholder who has changed his
or her address of record within the previous 30 calendar days.

General

48
<PAGE>

has remained below $200 for 90 days. Shareholders will receive 60 days' written
notice to increase the account value before the account is closed.

During drastic economic or market developments, you might have difficulty
reaching AFS by telephone, in which event you should issue written instructions
to AFS. AFS is not responsible for the authenticity of telephonic requests to
purchase, sell or exchange shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine, and could be liable for losses
resulting from unauthorized transactions if it fails to do so. Dealers and
agents may charge a commission for handling telephonic requests. The telephone
service may be suspended or terminated at any time without notice.

SHAREHOLDER SERVICES

AFS offers a variety of shareholder services. For more information about these
services or your account, call AFS's toll-free number, 800-221-5672. Some
services are described in the attached Subscription Application. A shareholder's
manual explaining all available services will be provided upon request. To
request a shareholder manual, call 800-227-4618.

HOW TO EXCHANGE SHARES

You may exchange your shares of any Fund for shares of the same class of other
Alliance Mutual Funds (including AFD Exchange Reserves, a money market fund
managed by Alliance). Exchanges of shares are made at the net asset values next
determined, without sales or service charges. Exchanges may be made by telephone
or written request. Telephone exchange requests must be received by AFS by 4:00
p.m. Eastern time on a Fund business day in order to receive that day's net
asset value.

Shares will continue to age without regard to exchanges for purposes of
determining the CDSC, if any, upon redemption and, in the case of Class B
shares, for the purposes of conversion to Class A shares. After an exchange,
your Class B shares will automatically convert to Class A shares in accordance
with the conversion schedule applicable to the Class B shares of the Alliance
Mutual Fund you originally purchased for cash ("original shares"). When
redemption occurs, the CDSC applicable to the original shares is applied.

Please read carefully the Prospectus of the mutual fund into which you are
exchanging before submitting the request. Call AFS at 800-221-5672 to exchange
uncertificated shares. An exchange is a taxable capital transaction for federal
tax purposes. The exchange service may be changed, suspended, or terminated on
60 days' written notice.

- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------

ADVISER

Alliance, which is a Delaware limited partnership with principal offices at 1345
Avenue of the Americas, New York, New York 10105, has been retained under an
advisory agreement (the "Advisory Agreement") to provide investment advice and,
in general, to conduct the management and investment program of each Fund,
subject to the general supervision and control of the Directors of the Fund.

The following table lists the person or persons who are primarily responsible
for the day-to-day management of each Fund's portfolio, the length of time that
each person has been primarily responsible, and each person's principal
occupation during the past five years.

Principal occupation
during the past
Fund Employee; year; title five years
- -------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Fund Alden M. Stewart since 1997-- Associated with
Executive Vice President of Alliance since
Alliance Capital Management 1993; prior
Corporation (ACMC*) thereto,
associated with
Equitable Capital
Management
Corporation
("Equitable
Capital")**

Randall E. Haase since 1997-- Associated with
Senior Vice President of ACMC Alliance since July
1993; prior
thereto,
associated with
Equitable Capital

Growth Fund Tyler Smith since inception-- Associated with
Senior Vice President of ACMC Alliance since
July 1993; prior
thereto,
associated with
Equitable Capital

Premier Growth
Fund Alfred Harrison since inception-- Associated with
Vice Chairman of ACMC Alliance

Technology Fund Peter Anastos since 1992-- Associated with
Senior Vice President of ACMC Alliance

Gerald T. Malone since 1992-- Associated with
Senior Vice President of ACMC Alliance since
1992; prior
thereto
associated with
College
Retirement
Equities Fund

Quasar Fund Alden M. Stewart since 1994-- (see above)
(see above)

Randall E. Haase since 1994-- (see above)
(see above)

International Fund A. Rama Krishna since 1993-- Associated with
Senior Vice President of ACMC Alliance since
and director of Asian Equity 1993; prior
research thereto,
Chief Investment
Strategist and
Director--Equity
Research for CS
First Boston

Worldwide
Privatization Fund Mark H. Breedon since inception-- Associated with
Senior Vice President of ACMC Alliance
and Director and Vice President
of Alliance Capital Limited ***

New Europe Fund Steven Beinhacker since 1997-- Associated with
Vice President of ACMC Alliance

All-Asia Investment A. Rama Krishna since inception-- (see above)
Fund (see above)
</TABLE>

49
<PAGE>

<TABLE>
<CAPTION>
Principal occupation
during the past
Fund Employee; year; title five years
- -------------------------------------------------------------------------------------
<S> <C> <C>

Global Small Cap Alden M. Stewart since 1994-- (see above)
Fund (see above)

Randall E. Haase since 1994-- (see above)
(see above)

Ronald L. Simcoe since 1993-- Associated with
Vice President of ACMC Alliance since
1993; prior
thereto,
associated with
Equitable Capital

Global Environment Jeremy R. Kramer since 1995-- Associated with
Fund Vice President of ACMC Alliance since
1993; prior
thereto, securities
analyst with
Neuberger &
Berman

Strategic Balanced Nicholas D.P. Carn Associated with
Fund since 1997-- Alliance since
Vice President of ACMC 1997; prior
thereto, Chief
Investment
Officer and
Portfolio Manager
at Draycott
Partners

Balanced Shares Paul Rissman since 1997-- Associated with
Senior Vice President of ACMC Alliance

Income Builder Fund Andrew M. Aran since 1994-- Associated with
Senior Vice President of ACMC Alliance

Thomas M. Perkins since 1991-- Associated with
Senior Vice President of ACMC Alliance

Vita Marie Pike since 1997 Associated with
Vice President of ACMC Alliance

Corinne Molof Hill since 1997 Associated with
Vice Presidient of ACMC Alliance

Utility Income Fund Paul Rissman since 1996-- Associated with
(See above) Alliance

Growth & Income Paul Rissman since 1994-- Associated with
Fund (see above) Alliance

Real Estate Daniel G. Pine since 1996-- Associated with
Investment Fund Senior Vice President of ACMC Alliance since
1996; prior
thereto, Senior
Vice President of
Desai Capital
Management

David Kruth since 1997-- Associated with
Vice President of ACMC Alliance since
1997; prior
thereto Senior
Vice President of
the Yarmouth
Group
- -------------------------------------------------------------------------------------
</TABLE>
* The sole general partner of Alliance.
** Equitable Capital was, prior to Alliance's acquisition of it, a management
firm under common control with Alliance.
*** An indirect wholly-owned subsidiary of Alliance.

Alliance is a leading international investment manager supervising client
accounts with assets as of September 30, 1997 totaling more than $217 billion
(of which approximately $81 billion represented the assets of investment
companies). Alliance's clients are primarily major corporate employee benefit
funds, public employee retirement systems, investment companies, foundations and
endowment funds. The 56 registered investment companies managed by Alliance
comprising 118 separate investment portfolios currently have over two million
shareholders. As of September 30, 1997, Alliance was an investment manager of
employee benefit plan assets for 28 of the Fortune 100 companies.

ACMC, the sole general partner of, and the owner of a 1% general partnership
interest in, Alliance, is an indirect wholly-owned subsidiary of The Equitable
Life Assurance Society of the United States ("Equitable"), one of the largest
life insurance companies in the United States, which is a wholly-owned
subsidiary of The Equitable Companies Incorporated, a holding company controlled
by AXA-UAP, a French insurance holding company. Certain information concerning
the ownership and control of Equitable by AXA-UAP is set forth in each Fund's
Statement of Additional Information under "Management of the Funds."

Performance of Similarly Managed Portfolios. In addition to managing the assets
of Premier Growth Fund, Mr. Harrison has ultimate responsibility for the
management of discretionary tax-exempt accounts of institutional clients managed
as described below without significant client-imposed restrictions ("Historical
Portfolios"). These accounts have substantially the same investment objectives
and policies and are managed in accordance with essentially the same investment
strategies and techniques as those for Premier Growth Fund, except for the
ability of Premier Growth Fund to use futures and options as hedging tools and
to invest in warrants. The Historical Portfolios are also not subject to certain
limitations, diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which Premier Growth Fund, as a registered
investment company, is subject and which, if applicable to the Historical
Portfolios, may have adversely affected the performance results of the
Historical Portfolios. See "Investment Objective and Policies."

Set forth below is performance data provided by Alliance relating to the
Historical Portfolios for each of the nineteen full calendar years during which
Mr. Harrison has managed the Historical Portfolios as an employee of Alliance
and cumulatively through December 31, 1997. As of December 31, 1997, the assets
in the Historical Portfolios totaled approximately $11.6 billion and the average
size of an institutional account in the Historical Portfolio was $341 million.
Each Historical Portfolio has a nearly identical composition of investment
holdings and related percentage weightings.

50
<PAGE>

Premier Growth Fund in accordance with the plan adopted by Premier Growth Fund's
Board of Directors pursuant to Rule 12b-1 under the 1940 Act ("distribution
fees") are also excluded. See "Expense Information." The performance data has
also not been adjusted for corporate or individual taxes, if any, payable by the
account owners.

Alliance has calculated the investment performance of the Historical Portfolios
on a trade-date basis. Dividends have been accrued at the end of the month and
cash flows weighted daily. Composite investment performance for all portfolios
has been determined on an asset weighted basis. New accounts are included in the
composite investment performance computations at the beginning of the quarter
following the initial contribution. The total returns set forth below are
calculated using a method that links the monthly return amounts for the
disclosed periods, resulting in a time-weighted rate of return.

As reflected below, the Historical Portfolios have over time performed favorably
when compared with the performance of recognized performance indices. The S&P
500 Index is a widely recognized, unmanaged index of market activity based upon
the aggregate performance of a selected portfolio of publicly traded common
stocks, including monthly adjustments to reflect the reinvestment of dividends
and other distributions. The S&P 500 Index reflects the total return of
securities comprising the Index, including changes in market prices as well as
accrued investment income, which is presumed to be reinvested. The Russell 1000
universe of securities is compiled by Frank Russell Company and is segmented
into two style indices, based on the capitalization-weighted median
book-to-price ratio of each of the securities. At each reconstitution, the
Russell 1000 constituents are ranked by their book-to-price ratio. Once so
ranked, the breakpoint for the two styles is determined by the median market
capitalization of the Russell 1000. Thus, those securities falling within the
top fifty percent of the cumulative market capitalization (as ranked by
descending book-to-price) become members of the Russell Price-Driven Indices.
The Russell 1000 Growth Index is, accordingly, designed to include those Russell
1000 securities with a greater-than-average growth orientation. In contrast with
the securities in the Russell Price-Driven Indices, companies in the Growth
Index tend to exhibit higher price-to-book and price-earnings ratios, lower
dividend yield and higher forecasted growth values.

To the extent Premier Growth Fund does not invest in U.S. common stocks or
utilizes investment techniques such as futures or options, the S&P 500 Index and
Russell 1000 Growth Index may not be substantially comparable to Premier Growth
Fund. The S&P 500 Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time period shown.
The S&P 500 Index and Russell 1000 Growth Index do not reflect the deduction of
any fees. If Premier Growth Fund were to purchase a portfolio of securities
substantially identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, Premier Growth Fund's performance relative to the
index would be reduced by Premier Growth Fund's expenses, including brokerage
commissions, advisory fees, distribution fees, custodial fees, transfer agency
costs and other administrative expenses, as well as by the impact on Premier
Growth Fund's shareholders of sales charges and income taxes.

The Lipper Growth Fund Index is prepared by Lipper Analytical Services, Inc. and
represents a composite index of the investment performance for the 30 largest
growth mutual funds. The composite investment performance of the Lipper Growth
Fund Index reflects investment management and administrative fees and other
operating expenses paid by these mutual funds and reinvested income dividends
and capital gain distributions, but excludes the impact of any income taxes and
sales charges.

The following performance data is provided solely to illustrate Mr. Harrison's
performance in managing the Historical Portfolios and the Premier Growth Fund as
measured against certain broad based market indices and against the composite
performance of other open-end growth mutual funds. Investors should not rely on
the following performance data of the Historical Portfolios as an indication of
future performance of Premier Growth Fund. The composite investment performance
for the periods presented may not be indicative of future rates of return. Other
methods of computing investment performance may produce different results, and
the results for different periods may vary.

Schedule of Composite Investment PerformanceHistorical Portfolios*

Year ended December:
1997*** 27.05% 34.90% 33.36% 30.49% 25.30%
1996*** 18.84 22.22 22.96 23.12 17.48
1995*** 40.66 40.12 37.58 37.19 32.65
1994 (9.78) (4.83) 1.32 2.66 (1.57)
1993 5.35 10.62 10.08 2.90 11.98
1992 -- 12.27 7.62 5.00 7.63
1991 -- 39.19 30.47 41.16 35.20
1990 -- (1.57) (3.10) (0.26) (5.00)
1989 -- 39.08 31.69 35.92 28.60
1988 -- 10.96 16.61 11.27 15.80
1987 -- 8.57 5.25 5.31 1.00
1986 -- 27.60 18.67 15.36 15.90
1985 -- 37.68 31.73 32.85 30.30
1984 -- (3.33) 6.27 (.95) (2.80)
1983 -- 20.95 22.56 15.98 22.30
1982 -- 28.23 21.55 20.46 20.20
1981 -- (1.10) (4.92) (11.31) (8.40)
1980 -- 51.10 32.50 39.57 37.30
1979 -- 30.99 18.61 23.91 27.40
Cumulative total
return for the
period
January 1,
1979 to
December 31,
1997 -- 3,689% 1,946% 1,683% 1,753%
- ----------------------------------------------------------------------------------------------

</TABLE>

* Total return is a measure of investment performance that is based upon the
change in value of an investment from the beginning to the end of a
specified period and assumes reinvestment of all dividends and other
distributions. The basis of preparation of this data is described in the
preceding discussion. Total returns for Premier Growth Fund are for Class A
shares, with imposition of the maximum 4.25% sales charge.

51
<PAGE>

** Assumes imposition of the maximum advisory fee charged by Alliance for any
Historical Portfolio for the period involved, although not the impact of
the payment of that fee on a quarterly rather than an annual basis and the
compounding effect thereof over the periods for which return information is
provided in the table on page 50, which would correspondingly reduce the
returns presented.

*** During this period, the Historical Portfolios differed from Premier Growth
Fund in that Premier Growth Fund invested a portion of its net assets in
warrants on equity securities in which the Historical Portfolios were
unable, by their investment restrictions, to purchase. In lieu of warrants,
the Historical Portfolios acquired the common stock upon which the warrants
were based.

The average annual total returns presented below are based upon the cumulative
total return as of December 31, 1997 and, for more than one year, assume a
steady compounded rate of return and are not year-by-year results, which
fluctuated over the periods as shown.

<TABLE>
<CAPTION>
Average Annual Total Returns
-----------------------------------------------------------------------
Premier Russell Lipper
Growth Historical S&P 500 1000 Growth
Fund Portfolios** Index Growth Index Fund Index
---- ---------- ----- ------------ ----------
<S> <C> <C> <C> <C> <C>
One year ................ 27.05% 34.90% 33.36% 30.49% 25.30%
Three years ............. 32.32 32.20 31.15 30.14 25.11
Five years .............. 19.14 19.46 20.27 18.41 16.47
Ten years ............... 20.13+ 19.17 18.05 17.94 15.93
Since January 1,
1979 .................. -- 20.08 17.22 16.37 15.86
- ----------------------------------------------------------------------------------------------------
</TABLE>
+ Since inception on 9/28/92

ADMINISTRATOR TO ALL-ASIA INVESTMENT FUND

Alliance has been retained by All-Asia Investment Fund under an administration
agreement (the "Administration Agreement") to perform administrative services
necessary for the operation of the Fund. For a description of such services, see
the Statement of Additional Information of the Fund.

CONSULTANT TO ALLIANCE WITH RESPECT TO INVESTMENT IN REAL ESTATE SECURITIES

Alliance, with respect to investment in real estate securities, has retained as
a consultant CB Commercial Real Estate Group, Inc. ("CBC"), a publicly held
company and the largest real estate services company in the United States,
comprised of real estate brokerage, property and facilities management, and real
estate finance and investment advisory activities (CBC in August of 1997
acquired Koll, which previously provided these consulting services to Alliance).
In 1996, CBC (and Koll, on a combined basis) completed 25,000 sale and lease
transactions, managed over 4,100 client properties, created over $3.5 billion in
mortgage originations, and completed over 2,600 appraisal and consulting
assignments. In addition, they advised and managed for institutions over $4
billion in real estate investments. CBC will make available to Alliance the CBC
National Real Estate Index, which gathers, analyzes and publishes targeted
research data for the 65 largest U.S. markets, based on a variety of
public-sector and private-sector sources as well as CBC's proprietary database
of approximately 60,000 property transactions representing over $400 billion of
investment property. This information provides a substantial component of the
research and data used to create the REIToScore model. As a consultant, CBC
provides to Alliance, at Alliance's expense, such in-depth information regarding
the real estate market, the factors influencing regional valuations and analysts
of recent transactions in office, retail, industrial and multi-family properties
as Alliance shall from time to time request. CBC will not furnish advice or make
recommendations regarding the purchase or sale of securities by the Fund nor
will it be responsible for making investment decisions involving Fund assets.

CBC is one of the three largest fee-based property management firms in the
United States, the largest commercial real estate lease brokerage firm in the
country, the largest investment property brokerage firm in the country, as well
as one of the largest publishers of real estate research, with approximately
6,000 employees nationwide. CBC will provide Alliance with exclusive access to
its REIToScore model which ranks approximately 130 REITS based on the relative
attractiveness of the property markets in which they own real estate. This model
scores the approximately 12,000 individual properties owned by these companies.
REIToScore is in turn based on CBC's National Real Estate Index which gathers,
analyzes and publishes targeted research for the 65 largest U.S. real estate
markets based on a variety of public- and private-sector sources as well as
CBC's proprietary database of 60,000 commercial property transactions
representing over $400 billion of investment property and over 3,000 tracked
properties which report rent and expense data quarterly. CBC has previously
provided access to its REIToScore model results primarily to the institutional
market through subscriptions. The model is no longer provided to any research
publications and the Fund is currently the only mutual fund available to retail
investors that has access to CBC's REIT o Score model.

DISTRIBUTION SERVICES AGREEMENTS

Rule 12b-1 adopted by the Commission under the 1940 Act permits an investment
company to pay expenses associated with the distribution of its shares in
accordance with a duly adopted plan. Each Fund has adopted one or more "Rule
12b-1 plans" (for each Fund, a "Plan") and has entered into a Distribution
Services Agreement (the "Agreement") with AFD. Pursuant to its Plan, a Fund pays
to AFD a Rule 12b-1 distribution services fee, which may not exceed an annual
rate of .30% (.50% with respect to Growth Fund, Premier Growth Fund and
Strategic Balanced Fund) of the Fund's aggregate average daily net assets
attributable to the Class A shares, 1.00% of the Fund's aggregate average daily
net assets attributable to the Class B shares and 1.00% of the Fund's aggregate
average daily net assets attributable to the Class C shares, for distribution
expenses. The Directors of Growth Fund and Strategic Balanced Fund currently
limit payments with respect to Class A shares under the Plan to .30% of each
Fund's aggregate average daily net assets attributable to Class A shares. The
Directors of Premier Growth Fund currently limit payments under the Plan with
respect to sales of Class A shares made after November 1993 to .30% of the
Fund's aggregate average daily net assets. The Plans provide that a portion of
the distribution services fee in an amount not to exceed .25% of the

52
<PAGE>

aggregate average daily net assets of each Fund attributable to each of the
Class A, Class B and Class C shares constitutes a service fee used for personal
service and/or the maintenance of shareholder accounts.

The Plans provide that AFD will use the distribution services fee received from
a Fund in its entirety for payments (i) to compensate broker-dealers or other
persons for providing distribution assistance, (ii) to otherwise promote the
sale of shares of the Fund, and (iii) to compensate broker-dealers, depository
institutions and other financial intermediaries for providing administrative,
accounting and other services with respect to the Fund's shareholders. In this
regard, some payments under the Plans are used to compensate financial
intermediaries with trail or maintenance commissions in an amount equal to .25%,
annualized, with respect to Class A shares and Class B shares, and 1.00%,
annualized, with respect to Class C shares, of the assets maintained in a Fund
by their customers. Distribution services fees received from the Funds, except
Growth Fund and Strategic Balanced Fund, with respect to Class A shares will not
be used to pay any interest expenses, carrying charges or other financing costs
or allocation of overhead of AFD. Distribution services fees received from the
Funds, with respect to Class B and Class C shares, may be used for these
purposes. The Plans also provide that Alliance may use its own resources to
finance the distribution of each Fund's shares.

The Funds are not obligated under the Plans to pay any distribution services fee
in excess of the amounts set forth above. Except as noted below for Growth Fund
and Strategic Balanced Fund, with respect to Class A shares of each Fund,
distribution expenses accrued by AFD in one fiscal year may not be paid from
distribution services fees received from the Fund in subsequent fiscal years.
Except as noted below for Growth Fund and Strategic Balanced Fund, AFD's
compensation with respect to Class B and Class C shares under the Plans of the
other Funds is directly tied to its expenses incurred. Actual distribution
expenses for such Class B and Class C shares for any given year, however, will
probably exceed the distribution services fees payable under the applicable Plan
with respect to the class involved and, in the case of Class B and Class C
shares, payments received from CDSCs. The excess will be carried forward by AFD
and reimbursed from distribution services fees payable under the Plan with
respect to the class involved and, in the case of Class B and Class C shares,
payments subsequently received through CDSCs, so long as the Plan and the
Agreement are in effect. Since AFD's compensation under the Plans of Growth Fund
and Strategic Balanced Fund is not directly tied to the expenses incurred by
AFD, the amount of compensation received by it under the applicable Plan during
any year may be more or less than its actual expenses.

Unreimbursed distribution expenses incurred as of the end of each Fund's most
recently completed fiscal period, and carried over for reimbursement in future
years in respect of the Class B and Class C shares for all Funds were, as of
that time, as follows:

<TABLE>
<CAPTION>
Amount of Unreimbursed Distribution Expenses
(as % of Net Assets of Class)
---------------------------------------------------------------------
Class B Class C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Fund ...................................... $ 3,782,063 (5.37%) $ 1,025,156 (5.43%)
Premier Growth Fund ................................ $20,874,319 (2.43%) $ 1,413,557 (0.79%)
Technology Fund .................................... $32,259,341 (3.06%) $ 1,464,569 (0.80%)
Quasar Fund ........................................ $15,242,262 (3.03% $ 1,262,697 (0.90%)
International Fund ................................. $ 2,566,420 (3.30%) $ 807,347 (3.47%)
Worldwide Privatization Fund ....................... $ 5,013,479 (4.14%) $ 251,109 (1.94%)
New Europe Fund .................................... $ 2,535,456 (3.84%) $ 541,239 (3.20%)
All-Asia Investment Fund ........................... $ 1,690,408 (14.78%) $ 162,319 (8.73%)
Global Small Cap Fund .............................. $ 2,055,687 (6.43%) $ 586,919 (6.73%)
Balanced Shares .................................... $ 1,533,382 (6.34%) $ 463,860 (8.42%)
Income Builder Fund ................................ $ 1,096,845 (12.59%) $ 1,904,160 (4.16%)
Utility Income Fund ................................ $ 1,400,456 (9.47%) $ 456,135 (13.37%)
Growth and Income Fund ............................. $11,066,118 (2.42%) $ 1,326,535 (1.25%)
Real Estate Investment Fund ........................ $ 6,726,437 (3.60%) $ 366,120 (0.86%)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Plans are in compliance with rules of the National Association of Securities
Dealers, Inc. which effectively limit the annual asset-based sales charges and
service fees that a mutual fund may pay on a class of shares to .75% and .25%,
respectively, of the average annual net assets attributable to that class. The
rules also limit the aggregate of all front-end, deferred and asset-based sales
charges imposed with respect to a class of shares by a mutual fund that also
charges a service fee to 6.25% of cumulative gross sales of shares of that
class, plus interest at the prime rate plus 1% per annum.

The Glass-Steagall Act and other applicable laws may limit the ability of a bank
or other depository institution to become an underwriter or distributor of
securities. However, in the opinion of the Funds' management, based on the
advice of counsel, these laws do not prohibit such depository institutions from
providing services for investment companies such as the administrative,
accounting and other services referred to in the Agreements. In the event that a
change in these laws prevented a bank from providing such services, it is
expected that other services arrangements would be made and that shareholders
would not be adversely affected. The State of Texas requires that shares of a
Fund may be sold in that state only by dealers or other financial institutions
that are registered there as broker-dealers.

- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS
- --------------------------------------------------------------------------------
AND TAXES
- --------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

If you receive an income dividend or capital gains distribution in cash you may,
within 120 days following the date of its payment, reinvest the dividend or
distribution in additional shares of that Fund without charge by returning to
Alliance, with appropriate instructions, the check representing such dividend or
distribution. Thereafter, unless you otherwise specify, you will be deemed to
have elected to reinvest all subsequent dividends and distributions in shares of
that Fund.

53
<PAGE>

Each income dividend and capital gains distribution, if any, declared by a Fund
on its outstanding shares will, at the election of each shareholder, be paid in
cash or in additional shares of the same class of shares of that Fund having an
aggregate net asset value as of the close of business on the day following the
declaration date of such dividend or distribution equal to the cash amount of
such income dividend or distribution. Election to receive dividends and
distributions in cash or shares is made at the time shares are initially
purchased and may be changed at any time prior to the record date for a
particular dividend or distribution. Cash dividends can be paid by check or, if
the shareholder so elects, electronically via the ACH network. There is no sales
or other charge in connection with the reinvestment of dividends and capital
gains distributions. Dividends paid by a Fund, if any, with respect to Class A,
Class B and Class C shares will be calculated in the same manner at the same
time on the same day and will be in the same amount, except that the higher
distribution services fees applicable to Class B and C shares, and any
incremental transfer agency costs relating to Class B and Class C shares, will
be borne exclusively by the class to which they relate.

While it is the intention of each Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized capital
gains, if any, the amount and time of any such dividend or distribution must
necessarily depend upon the realization by such Fund of income and capital gains
from investments. There is no fixed dividend rate, and there can be no assurance
that a Fund will pay any dividends or realize any capital gains. Since REITs pay
distributions based on cash flow, without regard to depreciation and
amortization, it is likely that a portion of the distributions paid to Real
Estate Investment Fund and subsequently distributed to shareholders may be a
nontaxable return of capital. The final determination of the amount of a Fund's
return of capital distributions for the period will be made after the end of
each calendar year.

If you buy shares just before a Fund deducts a distribution from its net asset
value, you will pay the full price for the shares and then receive a portion of
the price back as a taxable distribution.

FOREIGN INCOME TAXES

Investment income received by a Fund from sources within foreign countries may
be subject to foreign income taxes withheld at the source. To the extent that
any Fund is liable for foreign income taxes withheld at the source, each Fund
intends, if possible, to operate so as to meet the requirements of the Code to
"pass through" to the Fund's shareholders credits for foreign income taxes paid
(or to permit shareholders to claim a deduction for such foreign taxes), but
there can be no assurance that any Fund will be able to do so.

U.S. FEDERAL INCOME TAXES

Each Fund intends to qualify to be taxed as a "regulated investment company"
under the Code. To the extent that a Fund distributes its taxable income and net
capital gain to its shareholders, qualification as a regulated investment
company relieves that Fund of federal income taxes on that part of its taxable
income, including net capital gains, which it pays out to its shareholders.
Dividends out of net ordinary income and distributions of net short-term capital
gains are taxable to the recipient shareholders as ordinary income. In the case
of corporate shareholders, such dividends may be eligible for the
dividends-received deduction, except that the amount eligible for the deduction
is limited to the amount of qualifying dividends received by the Fund.
Distributions received from a REIT generally do not constitute qualifying
dividends. A corporation's dividends-received deduction generally will be
disallowed unless the corporation holds shares in the Fund at least 46 days
during the 90-day period beginning 45 days before the date on which the
corporation becomes entitled to receive the dividend. Furthermore, the
dividends-received deduction will be disallowed to the extent a corporation's
investment in shares of a Fund is financed with indebtedness.

Under the current federal tax law, the amount of an income dividend or capital
gains distribution declared by a Fund during October, November or December of a
year to shareholders of record as of a specified date in such a month that is
paid during January of the following year is includable in the prior year's
taxable income of shareholders that are calendar year taxpayers.

Any dividend or distribution received by a shareholder on shares of a Fund will
have the effect of reducing the net asset value of such shares by the amount of
such dividend or distribution. Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder, although in effect a
return of capital to that particular shareholder, would be taxable to him or her
as described above. If a shareholder held shares six months or less and during
that period received a distribution of net capital gains, any loss realized on
the sale of such shares during such six-month period would be a long-term
capital loss to the extent of such distribution.

A dividend or capital gains distribution with respect to shares of a Fund held
by a tax-deferred or qualified plan, such as an individual retirement account,
403(b)(7) retirement plan or corporate pension or profit-sharing plan, generally
will not be taxable to the plan. Distributions from such plans will be taxable
to individual participants under applicable tax rules without regard to the
character of the income earned by the qualified plan.

54
<PAGE>

A Fund will be required to withhold 31% of any payments made to a shareholder if
the shareholder has not provided a certified taxpayer identification number to
the Fund, or the Secretary of the Treasury notifies a Fund that a shareholder
has not reported all interest and dividend income required to be shown on the
shareholder's Federal income tax return.

Under certain circumstances, if a Fund realizes losses (e.g., from fluctuations
in currency exchange rates) after paying a dividend, all or a portion of the
dividend may subsequently be characterized as a return of capital. Returns of
capital are generally nontaxable, but will reduce a shareholder's basis in
shares of a Fund. If that basis is reduced to zero (which could happen if the
shareholder does not reinvest distributions and returns of capital are
significant) any further returns of capital will be taxable as capital gain. See
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
Shareholders will be advised annually as to the federal tax status of dividends
and capital gains and return of capital distributions made by a Fund for the
preceding year. Shareholders are urged to consult their tax advisers regarding
their own tax situation. Distributions by a Fund may be subject to state and
local taxes.

- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------

PORTFOLIO TRANSACTIONS

Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, a Fund may
consider sales of its shares as a factor in the selection of dealers to enter
into portfolio transactions with the Fund.

ORGANIZATION

Each of the following Funds is a Maryland corporation organized in the year
indicated: The Alliance Fund, Inc. (1938), Alliance Balanced Shares, Inc.
(1932), Alliance Premier Growth Fund, Inc. (1992), Alliance Technology Fund,
Inc. (1980), Alliance Quasar Fund, Inc. (1968), Alliance Worldwide Privatization
Fund, Inc. (1994), Alliance New Europe Fund, Inc. (1990), Alliance All-Asia
Investment Fund, Inc. (1994), Alliance Global Small Cap Fund, Inc. (1966),
Alliance Global Environment Fund, Inc. (1990), Alliance Income Builder Fund,
Inc. (1991), Alliance Utility Income Fund, Inc. (1993), Alliance Growth and
Income Fund, Inc. (1932), and Alliance Real Estate Investment Fund, Inc. (1996).
Each of the following Funds is either a Massachusetts business trust or a series
of a Massachusetts business trust organized in the year indicated: Alliance
Growth Fund and Alliance Strategic Balanced Fund (each a series of The Alliance
Portfolios) (1987), and Alliance International Fund (1980). Prior to August 2,
1993, The Alliance Portfolios was known as The Equitable Funds, Growth Fund was
known as The Equitable Growth Fund and Strategic Balanced Fund was known as The
Equitable Balanced Fund. Prior to March 22, 1994, Income Builder Fund was known
as Alliance Multi-Market Income and Growth Trust, Inc.

It is anticipated that annual shareholder meetings will not be held; shareholder
meetings will be held only when required by federal or state law. Shareholders
have available certain procedures for the removal of Directors.

A shareholder in a Fund will be entitled to share pro rata with other holders of
the same class of shares all dividends and distributions arising from the Fund's
assets and, upon redeeming shares, will receive the then current net asset value
of the Fund represented by the redeemed shares less any applicable CDSC. The
Funds are empowered to establish, without shareholder approval, additional
portfolios, which may have different investment objectives, and additional
classes of shares. If an additional portfolio or class were established in a
Fund, each share of the portfolio or class would normally be entitled to one
vote for all purposes. Generally, shares of each portfolio and class would vote
together as a single class on matters, such as the election of Directors, that
affect each portfolio and class in substantially the same manner. Class A, B, C
and Advisor Class shares have identical voting, dividend, liquidation and other
rights, except that each class bears its own transfer agency expenses, each of
Class A, Class B and Class C shares bears its own distribution expenses and
Class B shares and Advisor Class shares convert to Class A shares under certain
circumstances. Each class of shares votes separately with respect to a Fund's
Rule 12b-1 distribution plan and other matters for which separate class voting
is appropriate under applicable law. Shares are freely transferable, are
entitled to dividends as determined by the Directors and, in liquidation of a
Fund, are entitled to receive the net assets of the Fund. Since this Prospectus
sets forth information about all the Funds, it is theoretically possible that a
Fund might be liable for any materially inaccurate or incomplete disclosure in
this Prospectus concerning another Fund. Based on the advice of counsel,
however, the Funds believe that the potential liability of each Fund with
respect to the disclosure in this Prospectus extends only to the disclosure
relating to that Fund. Certain additional matters relating to a Fund's
organization are discussed in its Statement of Additional Information.

REGISTRAR, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

AFS, an indirect wholly-owned subsidiary of Alliance, located at 500 Plaza
Drive, Secaucus, New Jersey 07094, acts as each Fund's registrar, transfer agent
and dividend-disbursing agent for a fee based upon the number of shareholder
accounts maintained for the Funds. The transfer agency fee with respect to the
Class B shares will be higher than the transfer agency fee with respect to the
Class A shares or Class C shares.

PRINCIPAL UNDERWRITER

AFD, an indirect wholly-owned subsidiary of Alliance, located at 1345 Avenue of
the Americas, New York, New York 10105, is the principal underwriter of shares
of the Funds.

PERFORMANCE INFORMATION

From time to time, the Funds advertise their "total return," which is computed
separately for Class A, Class B and Class C shares. Such advertisements disclose
a Fund's average annual

55
<PAGE>

compounded total return for the periods prescribed by the Commission. A Fund's
total return for each such period is computed by finding, through the use of a
formula prescribed by the Commission, the average annual compounded rate of
return over the period that would equate an assumed initial amount invested to
the value of the investment at the end of the period. For purposes of computing
total return, income dividends and capital gains distributions paid on shares of
a Fund are assumed to have been reinvested when paid and the maximum sales
charges applicable to purchases and redemptions of a Fund's shares are assumed
to have been paid.

Balanced Shares, Growth and Income Fund, Income Builder Fund, Real Estate
Investment Fund and Utility Income Fund may also advertise their "yield," which
is also computed separately for Class A, Class B and Class C shares. A Fund's
yield for any 30-day (or one-month) period is computed by dividing the net
investment income per share earned during such period by the maximum public
offering price per share on the last day of the period, and then annualizing
such 30-day (or one-month) yield in accordance with a formula prescribed by the
Commission which provides for compounding on a semi-annual basis.

Real Estate Investment Fund, Balanced Shares, Income Builder Fund, Utility
Income Fund and Growth and Income Fund may also state in sales literature an
"actual distribution rate" for each class which is computed in the same manner
as yield except that actual income dividends declared per share during the
period in question are substituted for net investment income per share. The
actual distribution rate is computed separately for Class A, Class B and Class C
shares.

A Fund's advertisements may quote performance rankings or ratings of a Fund by
financial publications or independent organizations such as Lipper Analytical
Services, Inc. and Morningstar, Inc. or compare a Fund's performance to various
indices.

ADDITIONAL INFORMATION

This Prospectus and the Statements of Additional Information, which have been
incorporated by reference herein, do not contain all the information set forth
in the Registration Statements filed by the Funds with the Commission under the
Securities Act. Copies of the Registration Statements may be obtained at a
reasonable charge from the Commission or may be examined, without charge, at the
offices of the Commission in Washington, D.C.

This prospectus does not constitute an offering in any state in which such
offering may not lawfully be made.

This prospectus is intended to constitute an offer by each Fund only of the
securities of which it is the issuer and is not intended to constitute an offer
by any Fund of the securities of any other Fund whose securities are also
offered by this prospectus. No Fund intends to make any representation as to the
accuracy or completeness of the disclosure in this prospectus relating to any
other Fund. See "General Information--Organization."

56
<PAGE>

================================================================================
ALLIANCE STOCK FUNDS
SUBSCRIPTION APPLICATION
================================================================================

The Alliance Fund
Growth Fund
Premier Growth Fund
Technology Fund
Quasar Fund
International Fund
Worldwide Privatization Fund
New Europe Fund
All-Asia Investment Fund
Global Small Cap Fund
Global Environment Fund
Strategic Balanced Fund
Balanced Shares
Income Builder Fund
Real Estate Investment Fund
Utility Income Fund
Growth & Income Fund

To Open Your New Alliance Account...

Please complete the application and mail
it to:

Alliance Fund Services, Inc.
P.o. Box 1520
Secaucus, New Jersey 07096-1520

For certified or overnight deliveries, send to:

Alliance Fund Services, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094

Section 1 Your Account Registration (Required)

Complete one of the available choices. To ensure proper tax reporting to the
IRS:

-- Individuals, Joint Tenants, Transfer on Death and Gift/Transfer to a
Minor:

o Indicate your name(s) exactly as it appears on your social
security card.

-- Transfer on Death:

o Ensure that your state participates

-- Trust/Other:

o Indicate the name of the entity exactly as it appeared on the
notice you received from the IRS when your Employer
Identification number was assigned.

Section 2 Your Address (Required) Complete in full.

-- Non-Resident Alien:

o Indicate your permanent country of residence.

Section 3 Your Initial Investment (Required)

For each Fund in which you are investing: (1) Write the three digit Fund number
in the column titled 'Indicate three digit Fund number located below'. (2) Write
the dollar amount of your initial purchase in the column titled 'Indicate dollar
amount'.

(If you are eligible for a reduced sales charge, you must also complete Section
4F). (3) Check off a distribution
<PAGE>

option for your dividends. (4) Check off a distribution option for your capital
gains. All distributions (dividends and capital gains) will be reinvested into
your fund account unless you direct otherwise. If you want distributions sent
directly to your bank account, then you must complete Section 4D and attach a
preprinted, voided check for that account. If you want your distributions sent
to a third party you must complete Section 4E.

Section 4 Your Shareholder Options (Complete only those options you want)

A. Automatic Investment Plans (AIP) - You can make periodic investments into
any of your Alliance Funds in one of three ways. First, by a periodic
withdrawal ($25 minimum) directly from your bank account and invested into an
Alliance Fund. Second, you can direct your distributions (dividends and capital
gains) from one Alliance Fund into another Fund. Or third, you can
automatically exchange monthly ($25 minimum) shares of one Alliance Fund for
shares of another Fund. To elect one of these options, complete the appropriate
portion of Section 4A & 4D. If more than one dividend direction or monthly
exchange is desired, please call our Literature Center to obtain a Shareholder
Account Services Options Form for completion.

B. Telephone Transactions via EFT - Complete this option if you would like to
be able to transact via telephone between your fund account and your bank
account.

C. Systematic Withdrawal Plans (SWP) - Complete this option if you wish to
periodically redeem dollars from one of your fund accounts. Payments can be
made via Electronic Funds Transfer (EFT) to your bank account or by check.

D. Bank Information - If you have elected any options that involve transactions
between your bank account and your fund account or have elected cash
distribution options and would like the payments sent to your bank account,
please tape a preprinted, voided check of the account you wish to use to this
section of the application.

E. Third Party Payment Details - If you have chosen cash distributions and/or a
Systematic Withdrawal Plan and would like the payments sent to a person and/or
address other than those provided in section 1 or 2, complete this option.
Medallion Signature Guarantee is required if your account is not maintained by
a broker dealer.

F. Reduced Charges (Class A Only) - Complete if you would like to link fund
accounts that have combined balances that might exceed $100,000 so that future
purchases will receive discounts. Complete if you intend to purchase over
$100,000 within 13 months.

Section 5 Shareholder Authorization (Required)
All owners must sign. If it is a custodial, corporate, or trust account, the
custodian, an authorized officer, or the trustee respectively must sign.

If We Can Assist You In Any Way, Please Do Not Hesitate To Call Us At: (800)
221-5672.

================================================================================
For Literature Call: (800) 227-4618
================================================================================
<PAGE>

The Alliance Stock Funds Subscription Application

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
1. YOUR ACCOUNT REGISTRATION (Please Print in Capital Letters and Mark Check Boxes Where Applicable)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>

|_| Individual Account { |_| Male |_| Female } --or-- Joint Account --or--

|_| Transfer On Death { |_| Male |_| Female } --or-- Gift/Transfer to a Minor

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Owner or Custodian (First Name) (MI) (Last Name)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
(First Name) Joint Owner*, Transfer On Death Beneficiary or Minor's Name (MI) (Last Name)

|_|_|_|-|_|_|-|_|_|_|_| If Uniform Gift/Transfer
Social Security Number of Owner or Minor (required to open account) to Minor Account:
|_| |_| Minor's State of Residence

If Joint Tenants Account: *The Account will be registered
"Joint Tenants with right of Survivorship" unless you indicate
otherwise below:

|_| In Common |_| By Entirety |_| Community Property

|_| Trust --or-- |_| Corporation --or-- |_| Other_____________________________

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trustee if applicable (First Name) (MI) (Last Name)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trust or Corporation or Other Entity

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trust or Corporation or Other Entity continued

|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|
Trust Dated (MM,DD,YYYY) Tax ID Number (required to open account)

|_| Employer ID Number --or-- |_| Social Security
Number

- --------------------------------------------------------------------------------------------------------------------------
2. YOUR ADDRESS
- --------------------------------------------------------------------------------------------------------------------------

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Street Number Street Name

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|
City State Zip code

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_| - |_|_|_| - |_|_|_|_|
If Non-U.S., Specify Country Daytime Phone Number

|_| U.S. Citizen |_| Resident Alien |_| Non-Resident Alien
</TABLE>

Alliance Capital[LOGO](R)

1
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
3. Your Initial Investment The minimum investment is $250 per fund.
The maximum investment in Class B is $250,000; Class C is $1,000,000.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
I hereby subscribe for shares of the following Alliance Stock Fund(s) and elect distribution options as indicated.

Dividend and Capital Gain Distribution Options:

R Reinvest distributions into my fund account.
- ------------------------------------------ -
Broker/Dealer Use Only: Wire Confirm # C Send my distributions in cash to the address I have provided in
|_|_|_|_|_|_|_|_| - Section 2. (Complete Section 4D for direct deposit to your bank
- ------------------------------------------ account. Complete Section 4E for payment to a third party)

D Direct my distributions to another Alliance Fund. Complete the
- appropriate portion of Section 4A to direct your distributions
(dividends and capital gains) to another Alliance Fund (the $250
minimum investment requirement applies to Funds into which
distributions are directed).

- ------------- ============== ======================== =============================
Indicate three Distributions Options
digit Fund "Check One"
number located Indicate Dollar Amount =============================
below Dividends Captital Gains
Make all ============== ======================== =============================
checks
payable to: |_|_|_| $ R C D R C D
Alliance
Funds |_|_|_| $ R C D R C D

- ------------- |_|_|_| $ R C D R C D

|_|_|_| $ R C D R C D

==========================
Total Investment $
==========================

- --------------------------------------------------------------------------------------------------------------------------
Alliance Stock Fund Names and Numbers
- --------------------------------------------------------------------------------------------------------------------------
============= ============== =================
Contingent
Initial Sales Deferred Sales Asset-Based Sales
Charge Charge Charge
A B C
============= ============== =================

Domestic The Alliance Fund 044 043 344
Growth Fund 031 001 331
Premier Growth Fund 078 079 378
Technology Fund 082 282 382
Quasar Fund 026 029 326

Global International Fund 040 041 340
Worldwide Privatization Fund 112 212 312
New Europe Fund 062 058 362
All-Asia Investment Fund 118 218 318
Global Small Cap Fund 045 048 345
Global Environment Fund 181 281 381

Total Return Balanced Shares 096 075 396
Strategic Balanced Fund 032 002 332
Income Builder Fund 111 211 311
Real Estate Investment Fund 110 210 310
Utility Income Fund 009 209 309
Growth & Income Fund 094 074 394
</TABLE>

2
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
4. Your Shareholder Options
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Automatic Investment Plans (AIP)

|_| Withdraw From My Bank Account Via EFT*

I authorize Alliance to draw on my bank account for investment in my fund account(s) as indicated below
(Complete Section 4D also for the bank account you wish to use).

1- |_|_|_| |_|_|_|_| |_|_| , |_|_|_| .00 |_|
Fund Number Beginning Date (MM,DD) Amount ($25 minimum) Frequency
Frequency:
2- |_|_|_| |_|_|_|_| |_|_| , |_|_|_| .00 |_| M = monthly
Fund Number Beginning Date (MM,DD) Amount ($25 minimum) Frequency Q = quarterly
A = Annually
3- |_|_|_| |_|_|_|_| |_|_| , |_|_|_| .00 |_|
Fund Number Beginning Date (MM,DD) Amount ($25 minimum) Frequency

*Electronic Funds Transfer. Your bank must be a member of the National Automated Clearing House Association (NACHA)

|_| Direct My Distributions
As indicated in Section 3, I would like my dividends and/or capital gains directed to the same class of shares of
another Alliance Fund.

FROM: |_|_|_| |_|_|_|_|_|_|_|_|_|_| - |_|
Fund Number Account Number (if existing)

TO : |_|_|_| |_|_|_|_|_|_|_|_|_|_| - |_|
Fund Number Account Number (if existing)

|_| Exchange My Shares Monthly
I authorize Alliance to transact monthly exchanges, within the same class of shares, between my fund accounts as
listed below.

FROM: |_|_|_| |_|_|_|_|_|_|_|_|_|_| - |_|
Fund Number Account Number (if existing)

|_|_| , |_|_|_| .00 |_|_|
Amount ($25 minimum) Day of Exchange**

TO : |_|_|_| |_|_|_|_|_|_|_|_|_|_| - |_|
Fund Number Account Number (if existing)

**Shares exchanged will be redeemed at the net asset value on the "Day of Exchange" (If the "Day of Exchange" is not a
fund business day, the exchange transaction will be processed on the next fund business day). The exchange privilege is not
available if stock certificates have been issued.

B. Purchases and Redemptions Via EFT

You can call our toll-free number 1-800-221-5672 and instruct Alliance Fund Services, Inc. in a recorded conversation
to purchase, redeem or exchange shares for your account. Purchase and redemption requests will be processed via
electronic funds transfer (EFT) to and from your bank account.

Instructions: o Review the information in the Prospectus about telephone transaction services.

o If you select the telephone purchase or redemption privilege, you must write "VOID" across the face of
a check from the bank account you wish to use and attach it to Section 4D of this application.

|_| Purchases and Redemptions via EFT

I hereby authorize Alliance Fund Services, Inc. to effect the purchase and/or redemption of Fund shares for my account
according to my telephone instructions or telephone instructions from my Broker/Agent, and to withdraw money or credit
money for such shares via EFT from the bank account I have selected.

- --------------------------------------------------------------------------------------------------------------------------
For shares recently purchased by check or electronic funds transfer, redemption proceeds will not be made available
until the Fund is reasonably assured that the check or electronic fund transfer has been collected, normally 15
calendar days after the purchase date.
- --------------------------------------------------------------------------------------------------------------------------

</TABLE>

3
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
4. Your Shareholder Options (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
C. Systematic Withdrawal Plans (SWP)

In order to establish a SWP, you must reinvest all dividends and capital gains.

|_| I authorize Alliance to transact periodic redemptions from my fund account and send the proceeds to me as indicated
below.

Please send my SWP proceeds to:

|_| My Address of Record (via check) |_| My checking account-via EFT (complete section 4D)
Your bank must be a member of the National
Automated Clearing House Association (NACHA) in
|_| The Payee and address specified in section 4E (via check) order for you to receive SWP proceeds directly
(Medallion Signature Guarantee required) into your bank account. Otherwise payment will be
made by check

D. Bank Information This bank account information will be used for:

|_| Distributions (Section 3) |_| Telephone Transactions (Section 4B)

|_| Automatic Investments (Section 4A) |_| Withdrawals (Section 4C)

- ---------------------------------------------------------------------------------------------------------------------------
Please Tape a Pre-printed Voided Check Here*
- ---------------------------------------------------------------------------------------------------------------------------

* The above services
cannot be established
[GRAPHIC OF BLANK CHECK WITH THE WORD VOID PRINTED ON IT.] without a pre-printed
voided check.
For EFT transactions,
the Fund requires
signatures of bank
account owners exactly
as they appear on bank
records. If the
registration at the
bank differs from that
on the Alliance mutual
fund, all parties must
sign in Section 5.

|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|
Your Bank's ABA Routing Number Your Bank Account Number

|_| Checking Account |_| Savings Account
</TABLE>

4
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
4. YOUR SHAREHOLDER OPTIONS(CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
E. THIRD PARTY PAYMENT DETAILS Your signautre(s) in Section 5 must be Medallion Signature Guaranteed if your account is
not maintained by a dealer/broker. This third party payee information will be used for:

|_| Distributions (section 3) |_| Systematic Withdrawals (section 4C)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_||_|_|_|_|
Name (First Name) (MI) (Last Name)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Street Number Street Name

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|
City State Zip code

F. REDUCED CHARGES (CLASS A ONLY) If you, your spouse or minor children own shares in other Alliance Funds, you may be eligible
for a reduced sales charge. Please complete the Right of Accumulation section or the Statement of Intent section.

A. RIGHT OF ACCUMULATION
Please link the tax identification numbers or account numbers listed below for Right of Accumulation privilieges, so
that this and future purchases will receive any discount for which they are eligible.

|_________________________________| |_________________________________| |_________________________________|
Tax ID or Account Number Tax ID or Account Number Tax ID or Account Number

B. STATEMENT OF INTENT
I want to reduce my sales charge by agreeing to invest the following amount over a 13-month period.

|_| $100,000 |_| $250,000 |_| $500,000 |_| $1,000,000

If the full amount indicated is not purchased within 13 months, I understand that an additional sales charge must be
paid from my account.

- --------------------------------------------------------------------------------------------------------------------------
DEALER/AGENT AUTHORIZATION -- For selected Dealers or Agents ONLY.
- --------------------------------------------------------------------------------------------------------------------------

We hereby authorize Alliance Fund Services, Inc. to act as our agent in connection with transactions under this
authorization form; and we guarantee the signature(s) set forth in Section 5, as well as the legal capacity of
the shareholder.

|_____________________________________________________________| |_______________________________________________________|
Dealer/Agent Firm Authorized Signature

|________________________________________________________| |__| |_______________________________________________________|
Representative First Name MI Last Name

|_____________________________________________________________| |_______________________________________________________|
Dealer/Agent Firm Number Representative Number

|_____________________________________________________________| |_______________________________________________________|
Branch Number Branch Telephone Number

|_____________________________________________________________| |_______________________________________________________|
Branch Office Address

|_____________________________________________________________| |_||_| |_______________________________________________|
City State Zip Code
</TABLE>

5
<PAGE>

- --------------------------------------------------------------------------------
5. SHAREHOLDER AUTHORIZATION -- This section MUST be completed
- --------------------------------------------------------------------------------

Telephone Exchanges and Redemptions by Check

Unless I have checked one or both boxes below, these privileges will
automatically apply, and by signing this application, I hereby authorize
Alliance Fund Services, Inc. to act on my telephone instructions, or on
telephone instructions from any person representing himself to be an
authorized employee of an investment dealer or agent requesting a
redemption or exchange on my behalf. (NOTE: Telephone exchanges may only be
processed between accounts that have identical registrations.) Telephone
redemption checks will only be mailed to the name and address of record;
and the address must not have changed within the last 30 days. The maximum
telephone redemption amount is $50,000. This service can be enacted once
every 30 days.

|_| I do not elect the telephone exchange service.

|_| I do not elect the telephone redemption by check service.

By selecting any of the above telephone privileges, I agree that neither
the Fund nor Alliance, Alliance Fund Distributors, Inc., Alliance Fund
Services, Inc. or other Fund Agent will be liable for any loss, injury,
damage or expense as a result of acting upon telephone instructions
purporting to be on my behalf, that the Fund reasonably believes to be
genuine, and that neither the Fund nor any such party will be responsible
for the authenticity of such telephone instructions. I understand that any
or all of these privileges may be discontinued by me or the Fund at any
time. I understand and agree that the Fund reserves the right to refuse any
telephone instructions and that my investment dealer or agent reserves the
right to refuse to issue any telephone instructions I may request.

For non-residents only: Under penalties of perjury, I certify that to the
best of my knowledge and belief, I qualify as a foreign person as indicated
in Section 2.

I am of legal age and capacity and have received and read the Prospectus
and agree to its terms.

I CERTIFY UNDER PENALTY OF PERJURY THAT THE NUMBER SHOWN IN SECTION 1 OF
THIS FORM IS MY CORRECT TAX IDENTIFICATION NUMBER OR I AM WAITING FOR A
NUMBER TO BE ISSUED TO ME AND THAT I HAVE NOT BEEN NOTIFIED THAT THIS
ACCOUNT IS SUBJECT TO BACKUP WITHHOLDING.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION
OF THIS DOCUMENT OTHER THAN THE CERTIFICATE REQUIRED TO AVOID BACKUP
WITHHOLDING.

|__________________________________________________| |_______________________|
Signature Date

- ----------------------------------------------
Medallion Signautre Guarantee required if
completing Section 4E and your mutual fund is
not maintained by a broker dealer

Alliance Capital [LOGO]

<PAGE>

This is filed pursuant to Rule 497(e).
File Nos. 333-08153 and 811-07707.

<PAGE>

THE ALLIANCE
- --------------------------------------------------------------------------------
STOCK FUNDS
- --------------------------------------------------------------------------------

c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618

Prospectus and Application
Advisor Class

February 2, 1998

Domestic Stock Funds Global Stock Funds

Total Return Funds

-Alliance Strategic Balanced Fund
-Alliance Balanced Shares
-Alliance Income Builder Fund
-Alliance Utility Income Fund
-Alliance Growth and Income Fund
-Alliance Real Estate Investment Fund

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Table of Contents Page
<S> <C>

The Funds at a Glance ..................................................... 2
Expense Information ....................................................... 4
Financial Highlights ...................................................... 7
Glossary .................................................................. 10
Description of the Funds .................................................. 11
Investment Objectives and Policies ..................................... 11
Additional Investment Practices ........................................ 22
Certain Fundamental Investment Policies ................................ 29
Risk Considerations .................................................... 32
Purchase and Sale of Shares ............................................... 37
Management of the Funds ................................................... 39
Dividends, Distributions and Taxes ........................................ 42
Conversion Feature ........................................................ 44
General Information ....................................................... 54
</TABLE>
- --------------------------------------------------------------------------------

Adviser
Alliance Capital Management L.P.
1345 Avenue Of The Americas
New York, New York 10105

This Prospectus offers the Advisor Class shares of each Fund which may be
purchased at net asset value without any initial or contingent deferred sales
charges and without ongoing distribution expenses. Advisor Class shares are
offered solely to (i) investors participating in fee-based programs meeting
certain standards established by Alliance Fund Distributors, Inc., each Fund's
principal underwriter, (ii) participants in self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that meet certain minimum standards
and (iii) certain other categories of investors described in the Prospectus,
including investment advisory clients of, and certain other persons associated
with, Alliance Capital Management L.P. and its affiliates or the Funds. See
"Purchase and Sale of Shares."

Investors are advised to read this Prospectus carefully and to retain it for
future reference.

[LOGO] Alliance (R)
Investing without the Mystery.(SM)

(R)/SM These are registered marks used under licenses from the owner, Alliance
Capital Management L.P.
<PAGE>

The Funds At A Glance

The following summary is qualified in its entirety by the more detailed
information contained in this Prospectus.

The Funds' Investment Adviser Is . . .

Domestic Stock Funds

Alliance Fund

Seeks . . . Long-term growth of capital and income primarily through investment
in common stocks.

Invests Principally in . . . A diversified portfolio of equity securities that,
in the judgment of Alliance, have the potential to achieve capital appreciation.

Growth Fund

Seeks . . . Long-term growth of capital by investing primarily in common stocks
and other equity securities.

Premier Growth Fund

Technology Fund

Seeks . . . Growth of capital through investment in companies expected to
benefit from advances in technology.

Invests Principally in . . . A diversified portfolio of securities of companies
which use technology extensively in the development of new or improved products
or processes.

Quasar Fund

Seeks . . . Growth of capital by pursuing aggressive investment policies.

Invests Principally in . . . A diversified portfolio of equity securities of any
company and industry and in any type of security which is believed to offer
possibilities for capital appreciation.

Global Stock Funds

International Fund

Seeks . . . A total return on its assets from long-term growth of capital and
from income.

Worldwide Privatization Fund

Seeks . . . Long-term capital appreciation.

New Europe Fund

Seeks . . . Long-term capital appreciation through investment primarily in the
equity securities of companies based in Europe.

Invests Principally in . . . A non-diversified portfolio of equity securities of
European companies.

All-Asia Investment Fund

Seeks . . . Long-term capital appreciation.

Invests Principally in . . . A non-diversified portfolio of equity securities of
Asian/Pacific companies.

Global Small Cap Fund

Seeks . . . Long-term growth of capital.

Invests Principally in . . . A diversified global portfolio of the equity
securities of small capitalization companies.

Global Environment Fund

Seeks . . . Long-term capital appreciation.

Total Return Funds

Strategic Balanced Fund

Seeks . . . A high long-term total return by investing in a combination of
equity and debt securities.

2
<PAGE>

Balanced Shares

Seeks . . . A high return through a combination of current income and capital
appreciation.

Income Builder Fund

Seeks . . . Both an attractive level of current income and long-term growth of
income and capital.

Utility Income Fund

Seeks . . . Current income and capital appreciation through investment in the
utilities industry.

Growth and Income Fund

Seeks . . . Income and appreciation through investment in dividend-paying common
stocks of quality companies.

Real Estate Investment Fund

Seeks . . . Total return on its assets from long-term growth of capital and from
income.

Invests Principally in . . . A diversified portfolio of equity securities of
issuers that are primarily engaged in or related to the real estate industry.

Distributions . . .

Balanced Shares, Income Builder Fund, Utility Income Fund, Growth and Income
Fund and Real Estate Investment Fund intend to make distributions quarterly to
shareholders. These distributions may include ordinary income and capital gain
(each of which is taxable) and a return of capital (which is generally
nontaxable). See "Dividends, Distributions and Taxes."

A Word About Risk . . .

The price of the shares of the Alliance Stock Funds will fluctuate as the daily
prices of the individual securities in which they invest fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost. With
respect to those Funds permitted to invest in foreign currency denominated
securities, these fluctuations may be magnified by changes in foreign exchange
rates. Investment in the Global Stock Funds involves risks not associated with
funds that invest primarily in securities of U.S. issuers. While the Funds
invest principally in common stocks and other equity securities, in order to
achieve their investment objectives the Funds may at times use certain types of
investment derivatives, such as options, futures, forwards and swaps. These
involve risks different from, and, in certain cases, greater than, the risks
presented by more traditional investments. An investment in the Real Estate
Investment Fund is subject to certain risks associated with the direct ownership
of real estate in general, including possible declines in the value of real
estate, general and local economic conditions, environmental problems and
changes in interest rates. These risks are fully discussed in this Prospectus.

Getting Started . . .

Shares of the Funds are available through your financial representative. Each
Fund offers multiple classes of shares, of which only the Advisor Class is
offered by this Prospectus. Advisor Class shares may be purchased at net asset
value without any initial or contingent deferred sales charges and are not
subject to ongoing distribution expenses. Advisor Class shares may be purchased
and held solely (i) through accounts established under a fee-based program,
sponsored and maintained by a registered broker-dealer or other financial
intermediary and approved by Alliance Fund Distributors, Inc. ("AFD"), each
Fund's principal underwriter, (ii) through a self-directed defined contribution
employee benefit plan (e.g., a 401(k) plan) that has at least 1,000 participants
or $25 million in assets, (iii) by investment advisory clients of, and certain
other persons associated with, Alliance and its affiliates or the Funds, and
(iv) through registered investment advisers or other financial intermediaries
who charge a management, consulting or other fee for their service and who
purchase shares through a broker or agent approved by AFD and clients of such
registered investment advisers or financial intermediaries whose accounts are
linked to the master account of such investment adviser or financial
intermediary on the books of such approved broker or agent. A shareholder's
Advisor Class shares will automatically convert to Class A shares of the same
Fund under certain circumstances. See "Conversion FeatureConversion to Class A
Shares." Generally, a fee-based program must charge an asset-based or other
similar fee and must invest at least $250,000 in Advisor Class shares of each
Fund in which the program invests in order to be approved by AFD for investment
in Advisor Class shares. For more detailed information about who may purchase
and hold Advisor Class shares see the Statement of Additional Information.
Fee-based and other programs through which Advisor Class shares may be purchased
may impose different requirements with respect to investment in Advisor Class
shares than described above. For detailed information about purchasing and
selling shares, see "Purchase and Sale of Shares."

[LOGO] Alliance (R)
Investing without the Mystery.(SM)

(R)/SM These are registered marks used under licenses from the owner, Alliance
Capital Management L.P.

3
<PAGE>

- --------------------------------------------------------------------------------
EXPENSE INFORMATION
- --------------------------------------------------------------------------------

Shareholder Transaction Expenses are one of several factors to consider when you
invest in a Fund. The following table summarizes your maximum transaction costs
from investing in the Advisor Class shares of each Fund and estimated annual
expenses for Advisor Class shares of each Fund. For each Fund, the "Examples" to
the right of the table below show the cumulative expenses attributable to a
hypothetical $1,000 investment in Advisor Class shares for the periods
specified.

<TABLE>
<CAPTION>
Advisor Class Shares
--------------------
<S> <C>
Maximum sales charge imposed on purchases ........... None
Sales charge imposed on dividend reinvestments ...... None
Deferred sales charge ............................... None
Exchange fee ........................................ None
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Operating Expenses Examples
----------------------------------------- ------------------------------------------
Alliance Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .68% After 1 year $ 8
12b-1 fees None After 3 years $ 26
Other expenses (a) .15% After 5 years $ 46
---- After 10 years $103
Total fund
operating expenses (b) .83%
====

<CAPTION>
Growth Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .74% After 1 year $ 10
12b-1 fees None After 3 years $ 31
Other expenses (a) .24% After 5 years $ 54
---- After 10 years $120
Total fund
operating expenses (b) .98%
====

<CAPTION>
Premier Growth Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 13
12b-1 fees None After 3 years $ 40
Other expenses (a) .25% After 5 years $ 69
---- After 10 years $151
Total fund
operating expenses (b) 1.25%
====

<CAPTION>
Technology Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees (g) 1.04% After 1 year $ 14
12b-1 fees None After 3 years $ 44
Other expenses (a) .35% After 5 years $ 76
---- After 10 years $167
Total fund
operating expenses (b) 1.39%
====

<CAPTION>
Quasar Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees (g) 1.16% After 1 year $ 16
12b-1 fees None After 3 years $ 50
Other expenses (a) .42% After 5 years $ 86
---- After 10 years $188
Total fund
operating expenses (b) 1.58%
====
<CAPTION>
International Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .85% After 1 year $ 16
12b-1 fees None After 3 years $ 48
Other expenses (a) .68% After 5 years $ 83
---- After 10 years $182
Total fund
operating expenses (b) (e) 1.53%
====
</TABLE>
- --------------------------------------------------------------------------------
Please refer to the footnotes and the discussion following these tables on page
6.

4
<PAGE>

<TABLE>
<CAPTION>
Operating Expenses Examples
------------------------------------------- ------------------------------------------
Worldwide Privatization Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 20
12b-1 fees None After 3 years $ 62
Other expenses (a) .96% After 5 years $106
---- After 10 years $229
Total fund
operating expenses (b) 1.96%
====

<CAPTION>
New Europe Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees 1.06% After 1 year $ 17
12b-1 fees None After 3 years $ 54
Other expenses (a) .65% After 5 years $ 93
---- After 10 years $202
Total fund
operating expenses (b) 1.71%
====

<CAPTION>
All-Asia Investment Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .65% After 1 year $ 18
12b-1 fees None After 3 years $ 56
Other expenses After 5 years $ 96
Administration fees After 10 years $209
(after waiver) (d) .00%
Other operating expenses (a) 1.13%
----
Total fund
operating expenses (b) (e) 1.78%
====

<CAPTION>
Global Small Cap Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 21
12b-1 fees None After 3 years $ 64
Other expenses (a) 1.05% After 5 years $110
---- After 10 years $238
Total fund
operating expenses (b) 2.05%
====

<CAPTION>
Global Environment Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees 1.10% After 1 year $ 24
12b-1 fees None After 3 years $ 75
Other expenses (a) 1.29% After 5 years $128
---- After 10 year $273
Total fund
operating expenses (b) 2.39%
====

<CAPTION>
Strategic Balanced Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .09% After 1 year $ 11
12b-1 fees None After 3 years $ 35
Other expenses (a) 1.01% After 5 years $ 61
---- After 10 years $134
Total fund
operating expenses (b) (e) 1.10%
====

<CAPTION>
Balanced Shares Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .63% After 1 year $ 13
12b-1 fees None After 3 years $ 41
Other expenses (a) .67% After 5 years $ 71
---- After 10 years $157
Total fund
operating expenses (b) 1.30%
====

<CAPTION>
Income Builder Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .75% After 1 year $ 17
12b-1 fees None After 3 years $ 52
Other expenses (a) .93% After 5 years $ 89
After 10 years $188
Total fund
operating expenses (b) 1.68%
====
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
Operating Expenses Examples
------------------------------------------- ------------------------------------------
Utility Income Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .00% After 1 year $ 12
12b-1 fees None After 3 years $ 38
Other expenses (a) 1.20% After 5 years $ 66
---- After 10 years $145
Total fund
operating expenses (b) (f) 1.20%
====

<CAPTION>
Growth and Income Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .49% After 1 year $ 7
12b-1 fees None After 3 years $ 23
Other expenses (a) .22% After 5 years $ 40
---- After 10 years $ 88
Total fund
operating expenses (b) .71%
====

<CAPTION>
Real Estate Investment Fund Advisor Class Advisor Class
------------- -------------
<S> <C> <C> <C>
Management fees .90% After 1 year $ 15
12b-1 fees None After 3 years $ 46
Other expenses (a) .55% After 5 years $ 79
---- After 10 years $174

Total fund
operating expenses (b) 1.45%
====
</TABLE>

- --------------------------------------------------------------------------------
(a) These expenses include a transfer agency fee payable to Alliance Fund
Services, Inc., an affiliate of Alliance. The expenses shown do not include
the application of credits that reduce Fund expenses.
(b) The expense information does not reflect any charges or expenses imposed by
your financial representative or your employee benefit plan.
(c) Net of voluntary fee waiver. In the absence of such waiver, management fees
would be 1.00% for All-Asia Investment Fund and .75% for Strategic Balanced
Fund and Utility Income Fund and 1.01% for International Fund.
International Fund's fee, absent the voluntary fee waiver, is calculated
based on average daily net assets. Maximum contractual rate, based on
quarter-end net assets, is 1.00%.

(d) Net of voluntary fee waiver. Absent such fee waiver, administration fees
would have been .15%. Reflects the fees payable by All-Asia Investment Fund
to Alliance pursuant to an administration agreement.
(e) Net of voluntary fee waivers and expense reimbursements. Absent such
waivers and reimbursements, total fund operating expenses for Strategic
Balanced Fund would have been 2.35%, total fund operating expenses for
All-Asia Investment Fund would have been 2.28% annualized and total fund
operating expenses for International Fund would have been 1.69%,
annualized.
(f) Net of expense reimbursements. Absent expense reimbursements, total fund
operating expenses for Utility Income Fund would be 3.29%.
(g) Calculated based on average daily net assets. Maximum contractual rate,
based on quarter-end net assets, is 1.00% for Quasar Fund and Technology
Fund.

The purpose of the foregoing table is to assist the investor in understanding
the various costs and expenses that an investor in a Fund will bear directly or
indirectly. For International Fund, Worldwide Privatization Fund, New Europe
Fund, Global Environment Fund, Global Small Cap Fund, Strategic Balanced Fund,
Balanced Shares and Real Estate Investment Fund, "Other Expenses" are based on
estimated amounts for those Funds' current fiscal year. "Management fees" for
International Fund and All-Asia Investment Fund and "Administration fees" for
All-Asia Investment Fund have been restated to reflect current voluntary fee
waivers. "Other Expenses" for Global Environment Fund are based on estimated
amounts for its current fiscal year. The Examples set forth above assume
reinvestment of all dividends and distributions and utilize a 5% annual rate of
return as mandated by Commission regulations. The Examples should not be
considered representative of future expenses; actual expenses may be greater or
less than those shown.

6
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The tables on the following pages present per share income and capital changes
for an Advisor Class share outstanding throughout each period indicated. Except
as otherwise indicated, information for Alliance Fund, Growth Fund, Premier
Growth Fund, Strategic Balanced Fund, Balanced Shares, Utility Income Fund,
Worldwide Privatization Fund and Growth and Income Fund has been audited by
Price Waterhouse LLP, the independent accountants for each such Fund, and for
All-Asia Investment Fund, Technology Fund, Quasar Fund, International Fund, New
Europe Fund, Global Small Cap Fund, Real Estate Investment Fund and Income
Builder Fund by Ernst & Young LLP, the independent auditors for each such Fund.
A report of Price Waterhouse LLP or Ernst & Young LLP, as the case may be, on
the information with respect to each Fund, appears in the Fund's Statement of
Additional Information. The following information for each Fund should be read
in conjunction with the financial statements and related notes which are
included in the Fund's Statement of Additional Information.

7
<PAGE>

<TABLE>
<CAPTION>
Net Net Net
Asset Realized and Increase Distributions
Value Unrealized (Decrease) In Dividends From In Excess Of
Beginning Of Net Investment Gain (Loss) On Net Asset Value Net Investment Net Investment
Fiscal Year or Period Period Income (Loss) Investments From Operations Income Income
--------------------- ------------ -------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Fund
Advisor Class
Year ended 11/30/97 $ 7.71 $ (.02)(b) $ 2.10 $ 2.08 $ (.04) $ 0.00

10/2/96+ to 11/30/96 6.99 0.00 .72 .72 0.00 0.00

Growth Fund
Advisor Class
Year ended 10/31/97 $ 34.91 $ (.05)(b) $ 10.25 $ 10.20 $ 0.00 $ 0.00

10/2/96+ to 10/31/96 34.14 0.00(b) .77 .77 0.00 0.00

Premier Growth Fund
Advisor Class
Year ended 11/30/97 $ 17.99 $ (.06)(b) $ 5.25 $ 5.19 $ 0.00 $ 0.00

10/2/96+ to 11/30/96 15.94 (.01)(b) 2.06 2.05 0.00 0.00

Technology Fund
Advisor Class
Year ended 11/30/97 $ 51.17 $ (.45)(b) $ 4.33 $ 3.88 $ 0.00 $ 0.00

10/2/96+ to 11/30/96 47.32 (.05)(b) 3.90 3.85 0.00 0.00

Quasar Fund
Advisor Class
10/2/96+ to 9/30/97 $ 27.82 $ (.17)(b) $ 6.88 $ 6.71 $ 0.00 $ 0.00

International Fund
Advisor Class
10/2/96+ to 6/30/97 $ 17.96 $ .16(b) $ 1.78 $ 1.94 $ (.15) $ 0.00

Worldwide Privatization Fund
Advisor Class
10/2/96+ to 6/30/97 $ 12.14 $ .18(b) $ 2.52 $ 2.70 $ (.19) $ 0.00

New Europe Fund
Advisor Class
10/2/96+ to 7/31/97 $ 16.25 $ .11(b) $ 3.76 $ 3.87 $ (.09) $ (.14)

All-Asia Investment Fund
Advisor Class
Year ended 10/31/97 $ 11.04 $ (.15)(b)(c) $ (2.99) $ (3.14) $ 0.00 $ 0.00

10/2/96+ to 10/31/96 11.65 0.00(c) (.61) (.61) 0.00 0.00

Global Small Cap Fund
Advisor Class
10/2/96+ to 7/31/97 $ 12.56 $ (.08)(b) $ 1.97 $ 1.89 $ 0.00 $ 0.00

Strategic Balanced Fund
Advisor Class
10/2/96+ to 7/31/97 $ 19.49 $ .42(b)(c) $ (.12) $ .30 $ 0.00 $ 0.00

Balanced Shares
Advisor Class
10/2/96+ to 7/31/97 $ 14.79 $ .23 $ 3.22 $ 3.45 $ (.27) $ 0.00

Income Builder Fund
Advisor Class
10/2/96+ to 10/31/97 $ 11.57 $ .61(b) $ 1.53 $ 2.14 $ (.54) $ 0.00

Utility Income Fund
Advisor Class
Year ended 11/30/97 $ 10.59 $ .36(b)(c) $ 2.04 $ 2.40 $ (.37) $ 0.00

10/2/96+ to 11/30/96 9.95 .03(b)(c) .61 .64 0.00 0.00

Growth and Income Fund
Advisor Class
Year ended 10/31/97 $ 3.00 $ .05(b) $ .87 $ .92 $ (0.06) $ 0.00

10/2/96+ to 10/31/96 2.97 0.00 .03 .03 0.00 0.00

Real Estate Investment Fund
Advisor Class
10/1/96+ to 8/31/97 $ 10.00 $ .35(b) $ 2.88 $ 3.23 $ (.41)(f) $ 0.00

</TABLE>

- --------------------------------------------------------------------------------

+ Commencement of distribution.
* Annualized.

(a) 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 the net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total investment return calculated for a period of
less than one year are not annualized.

(b) Based on average shares outstanding.

(d) Net of expenses assumed and/or waived/reimbursed. If the following Funds
had borne all expenses in their most recent fiscal year, their expense
ratios, without giving effect to the expense offset arrangements described
in (e) below, would have been as follows:

<TABLE>
<CAPTION>
1996 1997 1997
<S> <C> <C> <C> <C>
All-Asia Investment Fund Strategic Balanced
Advisor Class 5.54%# 3.43 Advisor Class 2.35%#
Utility Income Fund
Advisor Class 3.48%# 3.29
Real Estate Investment Fund
Advisor Class -- 1.47%#
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets Ratio Of Net
Total Net Asset Investment At End Of Ratio Of Investment
Distributions Dividends Value Return Based Period Expenses Income (Loss) Average
From Net And End Of on Net Asset (000's To Average To Average Portfolio Commission
Realized Gains Distributions Period Value (a) omitted) Net Assets Net Assets Turnover Rate Rate
- -------------- ------------- --------- ------------ ---------- ---------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

$ (1.06) $ (1.10) $ 8.69 32.00% $ 10,275 .83% (.21)% 158% $0.0571

0.00 0.00 7.71 10.30 1,083 .89* 0.38* 80 0.0646

$ (1.03) $ (1.03) $ 44.08 29.92% $101,205 .98%(e) (.12)% 48% $0.0562

0.00 0.00 34.91 2.26 946 1.26* 0.50* 46 0.0584

$ (1.08) $ (1.08) $ 22.10 30.98% $ 53,459 1.25% (.28)% 76% $0.0594

0.00 0.00 17.99 12.86 1,922 1.50* (.48)* 95 0.0651

$ (.42) $ (.42) $ 54.63 7.65% $167,120 1.39%(e) (.81)% 51% $0.0564

0.00 0.00 51.17 8.14 566 1.75* (1.21)* 30 0.0612

$ (4.11) $ (4.11) $ 30.42 28.47% $ 62,455 1.58% (.74)% 135% $0.0536

$ (1.08) $ (1.23) $ 18.67 11.57% $ 8,697 1.69%* 1.47%* 94% $0.0363

$ (1.42) $ (1.61) $ 13.23 25.24% $ 374 1.96%* 2.97%* 48% $0.0132

$ (1.32) $ (1.55) $ 18.57 25.76% $ 4,130 1.71%* .77%* 89% $0.0569

$ (.34) $ (.34) $ 7.56 (29.42)% $ 1,338 3.21%(d) (1.51)% 70% $0.0248

0.00 0.00 11.04 (5.24) 27 3.07*(d) 1.63* 66 0.0280

$ (1.56) $ (1.56) $ 12.89 17.08% $ 333 2.05%*(e) (.84)%* 129% $0.0364

$ 0.00 $ 0.00 $ 19.79 1.54% $ 50 1.10%(d)(e)* 3.40%* 170% $0.0395

$ (1.80) $ (2.07) $ 16.17 25.96% $ 1,565 1.30%*(e) 2.15%* 207% $0.0552

$ (.61) $ (1.15) $ 12.56 19.62% $ 80 1.68% 4.55% 159% $0.0513

$ (.13) $ (.50) $ 12.49 23.57% $ 42 1.20% 3.29% 37% $0.0442

0.00 0.00 10.59 6.33 33 1.20*(d) 4.02* 98 0.0536

$ (.38) $ (.44) $ 3.48 33.61% $ 3,207 .71%(e) 1.42% 88% $ .0589

0.00 0.00 3.00 1.01 87 0.37* 3.40* 88 0.0625

$ 0.00 $ (.41) $ 12.82 32.72% $ 2,313 1.45%*(d)(e) 3.07%* 20% $0.0518

</TABLE>

- --------------------------------------------------------------------------------

(e) Amounts do not affect the impact of expense offset arrangements with the
transfer agent. Taking into account such expense offsets arrangements the
rate of expense to average net assets assuming the assumption and/or waived
reimbursement of expenses described in note (d) above would have been as
follows:

<TABLE>
<CAPTION>
1997 1997 1997
---- ---- ----
<S> <C> <C> <C> <C> <C>
International Fund New Europe Fund Growth and Income Fund
Advisor Class 1.69%# Advisor Class 1.71%# Advisor Class .70%
Global Small Cap Fund Balanced Shares Fund Growth Fund
Advisor Class 2.04%# Advisor Class 1.29%# Advisor Class .96%
Strategic Balanced Fund Real Estate Fund Technology Fund
Advisor Class 1.10%# Advisor Class 1.44%# Advisor Class 1.38%
-------------
# annualized
</TABLE>

(f) Distributions from net investment income include a tax return of capital of
$.03.

9
<PAGE>

- --------------------------------------------------------------------------------
GLOSSARY
- --------------------------------------------------------------------------------

The following terms are frequently used in this Prospectus.

Fixed-income securities are debt securities and dividend-paying preferred stocks
and include floating rate and variable rate instruments.

Convertible securities are fixed-income securities that are convertible into
common stock.

U.S. Government securities are securities issued or guaranteed by the United
States Government, its agencies or instrumentalities.

Eligible Companies are companies expected to benefit from advances or
improvements in products, processes or services intended to foster the
protection of the environment.

Moody's is Moody's Investors Service, Inc.

S&P is Standard & Poor's Ratings Services.

Duff & Phelps is Duff & Phelps Credit Rating Co.

Fitch is Fitch IBCA, Inc.

Investment grade securities are fixed-income securities rated Baa and above by
Moody's or BBB and above by S&P, Duff & Phelps or Fitch, or determined by
Alliance to be of equivalent quality.

Rule 144A securities are securities that may be resold pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act").

Depositary receipts include American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and other types of depositary receipts.

Commission is the Securities and Exchange Commission.

1940 Act is the Investment Company Act of 1940, as amended.

Code is the Internal Revenue Code of 1986, as amended.

Exchange is the New York Stock Exchange.

10
<PAGE>

- --------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds have been designed to offer investors seeking capital
appreciation a range of alternative approaches to investing in the U.S. equity
markets.

The Alliance Fund

Alliance Growth Fund

The Fund may also invest up to 25% of its total assets in lower-rated
fixed-income and convertible securities. See "Risk ConsiderationsSecurities
Ratings" and "--Investment in Lower-Rated Fixed-Income Securities." The Fund
generally will not invest in securities rated at the time of purchase below Caa-
by Moody's and CCC- by S&P, Duff & Phelps or Fitch or in securities judged by
Alliance to be of comparable investment quality. However, from time to time, the
Fund may invest in securities rated in the lowest grades (i.e., C by Moody's or
D or equivalent by S&P, Duff & Phelps or Fitch), or securities Alliance judges
to be of comparable investment quality, if there are prospects for an upgrade or
a favorable conversion into equity securities. If the credit rating of a
security held by the Fund falls below its rating at the time of purchase (or
Alliance determines that the quality of such security has so deteriorated), the
Fund may continue to hold the security if such investment is considered
appropriate under the circumstances.

Alliance Premier Growth Fund

11
<PAGE>

securities of which are traded principally in the U.S. Alliance's investment
strategy for the Fund emphasizes stock selection and investment in the
securities of a limited number of issuers. Alliance relies heavily upon the
fundamental analysis and research of its large internal research staff, which
generally follows a primary research universe of more than 600 companies that
have strong management, superior industry positions, excellent balance sheets
and superior earnings growth prospects. An emphasis is placed on identifying
companies whose substantially above average prospective earnings growth is not
fully reflected in current market valuations.

Alliance Technology Fund

Alliance Quasar Fund

The Fund may also: (i) invest in restricted securities and in other assets
having no ready market, but not more than 10%

12
<PAGE>

of its total assets may be invested in such securities or assets; (ii) make
short sales of securities "against the box," but not more than 15% of its net
assets may be deposited on short sales; and (iii) write call options and
purchase and sell put and call options written by others. For additional
information on the use, risks and costs of these policies and practices see
"Additional Investment Practices."

GLOBAL STOCK FUNDS

The Global Stock Funds have been designed to enable investors to participate in
the potential for long-term capital appreciation available from investment in
foreign securities.

Alliance International Fund

Alliance Worldwide Privatization Fund

The Fund's investments in enterprises undergoing privatization may comprise
three distinct situations. First, the Fund may invest in the initial offering of
publicly traded equity securities (an "initial equity offering") of a
government- or state-owned or controlled company or enterprise (a "state
enterprise"). Secondly, the Fund may purchase securities of a current or former
state enterprise following its initial equity offering. Finally, the Fund may
make privately negotiated purchases of stock or other equity interests in a
state enterprise that has not yet conducted an initial equity offering. Alliance
believes that substantial potential for capital appreciation exists as
privatizing enterprises rationalize their management structures, operations and
business strategies in order to compete efficiently in a market economy, and the
Fund will thus emphasize investments in such enterprises.

Privatization is a process through which the ownership and control of companies
or assets changes in whole or in part from the public sector to the private
sector. Through

13
<PAGE>

Alliance New Europe Fund

The Fund diversifies its investments among a number of European countries and,
under normal circumstances, will invest in companies based in at least three
such countries. Subject to the foregoing and to the limitation on investment in
any one former "east bloc" country, the Fund may invest without limit in a
single European country. While the Fund does not intend to concentrate its
investments in a single country, at times 25% or more of its assets may be
invested in issuers located in a single country. During such times, the Fund
would

14
<PAGE>

be subject to a correspondingly greater risk of loss due to adverse political or
regulatory developments, or an economic downturn, within that country. In this
regard, at December 31, 1997, approximately 24% of the Fund's assets were
invested in securities of issuers in the United Kingdom.

Alliance All-Asia Investment Fund

The Fund may also: (i) invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for purchase by the
Fund; (ii) invest up to 20% of its net assets in rights or warrants; (iii)
invest in depositary receipts, instruments of supranational entities denominated
in the currency of any country, securities of multinational companies and
"semi-governmental securities;" (iv) invest up to 25% of its net assets in
equity-linked debt securities with the objective of realizing capital
appreciation; (v) invest up to 25% of its net assets in loans and other direct
debt instruments; (vi) write

15
<PAGE>

covered put and call options on securities of the types in which it is permitted
to invest and on exchange-traded index options; (vii) enter into contracts for
the purchase or sale for future delivery of fixed-income securities or foreign
currencies, or contracts based on financial indices, including any index of U.S.
Government securities, securities issued by foreign government entities, or
common stock and may purchase and write options on future contracts; (viii)
purchase and write put and call options on foreign currencies for hedging
purposes; (ix) purchase or sell forward contracts; (x) enter into interest rate
swaps and purchase or sell interest rate caps and floors; (xi) enter into
forward commitments for the purchase or sale of securities; (xii) enter into
standby commitment agreements; (xiii) enter into currency swaps for hedging
purposes; (xiv) enter into repurchase agreements pertaining to U.S. Government
securities with member banks of the Federal Reserve System or primary dealers in
such securities; (xv) make short sales of securities or maintain a short
position, in each case only if "against the box;" and (xvi) make secured loans
of its portfolio securities not in excess of 30% of its total assets to entities
with which it can enter into repurchase agreements. For additional information
on the use, risks and costs of these policies and practices see "Additional
Investment Practices."

Alliance Global Small Cap Fund

Alliance Global Environment Fund

The Fund invests in two categories of Eligible Companies--"Environmental
Companies" and "Beneficiary Companies." Environmental Companies are those that
have a principal business involving the sale of systems or services intended to
foster environmental protection, such as waste treatment and disposal,
remediation, air pollution control and recycling. Under normal circumstances,
the Fund invests at least 65% of its total assets in equity securities of
Environmental Companies. Beneficiary Companies are those whose principal
businesses lie outside the environmental sector but nevertheless anticipate
environmental regulations or consumer preferences through the development of new
products, processes or services that are intended to contribute to a cleaner and
healthier environment. Examples of such companies could be companies that
anticipate the demand for plastic substitutes, aerosol substitutes, alternative
fuels and processes that generate less hazardous waste. In this regard, the Fund
may invest in an issuer with a broadly diversified business only a part of which
provides such products, processes or services, when Alliance believes that these
products, processes or services will yield a competitive advantage that
significantly enhances the issuer's growth prospects. As a matter of fundamental
policy, the Fund will, under normal circumstances,

16
<PAGE>

invest substantially all of its total assets in equity securities of Eligible
Companies.

The Fund may also: (i) invest up to 20% of its total assets in warrants to
purchase equity securities to the extent consistent with its investment
objective; (ii) invest in depositary receipts; (iii) purchase and write put and
call options on foreign currencies for hedging purposes; (iv) enter into forward
foreign currency transactions for hedging purposes; (v) invest in currency
futures and options on such futures for hedging purposes; and (vi) make secured
loans of its portfolio securities not in excess of 30% of its total assets. For
additional information on the use, risks and costs of these policies and
practices see "Additional Investment Practices."

TOTAL RETURN FUNDS

The Total Return Funds have been designed to provide a range of investment
alternatives to investors seeking both growth of capital and current income.

Alliance Strategic Balanced Fund

17
<PAGE>

call options on the same underlying securities; (v) lend portfolio securities
amounting to not more than 25% of its total assets; (vi) enter into repurchase
agreements on up to 25% of its total assets; (vii) purchase and sell securities
on a forward commitment basis; (viii) buy or sell foreign currencies, options on
foreign currencies, foreign currency futures contracts (and related options) and
deal in forward foreign exchange contracts; (ix) buy and sell stock index
futures contracts and buy and sell options on those contracts and on stock
indices; (x) purchase and sell futures contracts, options thereon and options
with respect to U.S. Treasury securities; and (xi) invest in securities that are
not publicly traded, including Rule 144A securities. For additional information
on the use, risks and costs of these policies and practices see "Additional
Investment Practices."

Alliance Balanced Shares

Alliance Income Builder Fund

The Fund may also: (i) invest up to 5% of its net assets in rights or warrants;
(ii) invest in depositary receipts and U.S. Dollar denominated securities issued
by supranational entities; (iii) write covered put and call options and purchase
put and call options on securities of the types in which it is permitted to
invest that are exchange-traded; (iv) purchase and sell exchange-traded options
on any securities index composed of the types of securities in which it may
invest; (v) enter into contracts for the purchase or sale for future delivery of
fixed-income securities or foreign currencies, or contracts based on financial
indices, including any index of U.S. Government securities, foreign government
securities, corporate fixed income securities, or common stock, and purchase and
write options on future contracts; (vi) purchase and write put and call options
on foreign currencies and enter into forward contracts for hedging purposes;
(vii) enter into interest rate swaps and purchase or sell interest rate caps and
floors; (viii) enter into forward commitments for the purchase or sale of
securities; (ix) enter into standby commitment agreements; (x) enter into
repurchase agreements pertaining to U.S. Government securities with member banks
of the Federal Reserve System or primary dealers in such securities; (xi) make
short sales of securities or maintain a short position as described below under
"Additional Investment Policies and PracticesShort Sales;" and (xii) make
secured loans of its portfolio securities not in excess of 20% of its total
assets to brokers, dealers and financial institutions. For additional
information on the use, risks and costs of these policies and practices see
"Additional Investment Practices."

Alliance Utility Income Fund

Alliance Utility Income Fund, Inc. ("Utility Income Fund") is a diversified
investment company that seeks current income and

18
<PAGE>

capital appreciation by investing primarily in equity and fixed-income
securities of companies in the utilities industry. The Fund may invest in
securities of both U.S. and foreign issuers, although no more than 15% of the
Fund's total assets will be invested in issuers in any one foreign country. The
utilities industry consists of companies engaged in (i) the manufacture,
production, generation, provision, transmission, sale and distribution of gas
and electric energy, and communications equipment and services, including
telephone, telegraph, satellite, microwave and other companies providing
communication facilities for the public, or (ii) the provision of other utility
or utility-related goods and services, including, but not limited to, entities
engaged in water provision, cogeneration, waste disposal system provision, solid
waste electric generation, independent power producers and non-utility
generators. The Fund is designed to take advantage of the characteristics and
historical performance of securities of utility companies, many of which pay
regular dividends and increase their common stock dividends over time. As a
fundamental policy, the Fund normally invests at least 65% of its total assets
in securities of companies in the utilities industry. The Fund considers a
company to be in the utilities industry if, during the most recent twelve-month
period, at least 50% of the company's gross revenues, on a consolidated basis,
were derived from its utilities activities.

19
<PAGE>

Alliance Growth and Income Fund

The Fund may also try to realize income by writing covered call options listed
on domestic securities exchanges. The Fund also invests in foreign securities.
Since the purchase of foreign securities entails certain political and economic
risks, the Fund has restricted its investments in securities in this category to
issues of high quality. The Fund may also purchase and sell financial forward
and futures contracts and options thereon for hedging purposes. For additional
information on the use, rights and costs of these policies and practices, see
"Additional Investment Practices."

Alliance Real Estate Investment Fund

As to any investment in Real Estate Equity Securities, Alliance's analysis will
focus on determining the degree to which the company involved can achieve
sustainable growth in cash flow and dividend paying capability. Alliance
believes that the primary determinant of this capability is the economic
viability of property markets in which the company operates and that the
secondary determinant of this capability is the ability of management to add
value through strategic focus and operating expertise. The Fund will purchase
Real Estate Equity Securities when, in the judgment of Alliance, their market
price does not adequately reflect this potential. In making this determination,
Alliance will take into account fundamental trends in underlying property
markets as determined by proprietary models, site visits conducted by
individuals knowledgeable in local real estate markets, price-earnings ratios
(as defined for real estate companies), cash flow growth and stability, the
relationship between asset value and market price of the securities, dividend
payment history, and such other factors which Alliance may determine from time
to time to be relevant. Alliance will attempt to purchase for the Fund Real
Estate Equity Securities of companies whose underlying portfolios are
diversified geographically and by property type.

20
<PAGE>

in real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in real
estate mortgages and derive income from the collection of interest payments.
Similar to investment companies such as the Fund, REITs are not taxed on income
distributed to shareholders provided they comply with several requirements of
the Code. The Fund will indirectly bear its proportionate share of expenses
incurred by REITs in which the Fund invests in addition to the expenses incurred
directly by the Fund.

In implementing the Fund's research and investment process, Alliance will avail
itself of the consulting services of CB Commercial Real Estate Group, Inc.
("CBC"), a publicly held company and the largest real estate services company in
the United States, comprised of real estate brokerage, property and facilities
management, and real estate finance and investment advisory activities (CBC in
August of 1997 acquired Koll Management Services ("Koll"), which previously
provided these consulting services to Alliance). In 1996, CBC (and Koll, on a
combined basis) completed 25,000 sale and lease transactions, managed over 4,100
client properties, created over $3.5 billion in mortgage originations, and
completed over 2,600 appraisal and consulting assignments. In addition, they
advised and managed for institutions over $4 billion in real estate investments.
As consultant to Alliance, CBC provides access to its proprietary model,
REIToScore, that analyzes the approximately 12,000 properties owned by these 130
companies. Using proprietary databases and algorithms, CBC analyzes local market
rent, expense, and occupancy trends, market specific transaction pricing,
demographic and economic trends, and leading indicators of real estate supply
such as building permits. Over 650 asset-type specific geographic markets are
analyzed and ranked on a relative scale by CBC in compiling its REIToScore
database. The relative attractiveness of these real estate industry companies is
similarly ranked based on the composite rankings of the properties they own. See
"Management of the Funds--Consultant to Advisor" for more information about CBC.

The Fund may invest in debt securities rated BBB or higher by S&P or Baa or
higher by Moody's or, if not so rated, of equivalent credit quality as
determined by Alliance. The Fund expects that it will not retain a debt security
which is downgraded below BBB or Baa or, if unrated, determined by Alliance to
have undergone similar credit quality deterioration, subsequent to purchase by
the Fund.

The Fund may also engage in the following investment practices to the extent
indicated: (i) invest up to 10% of its net assets in rights or warrants; (ii)
invest up to 15% of its net assets in the convertible securities of companies
whose common stocks are eligible for purchase by the Fund; (iii) lend portfolio
securities equal in value to not more than 25% of total assets; (iv) enter into
repurchase agreements of up to seven days' duration; (v) enter into forward
commitments transactions as long as the Fund's aggregate commitments under such
transactions are not more than 30% of the Fund's total assets; (vi) enter into
standby commitment agreements; (vii) make short sales of securities or maintain
a short position but only if at all times when a short position is open not more

21
<PAGE>

than 25% of the Fund's net assets (taken at market value) is held as collateral
for such sales; and (viii) invest in illiquid securities unless, as a result,
more than 15% of its net assets would be so invested.

ADDITIONAL INVESTMENT PRACTICES

Some or all of the Funds may engage in the following investment practices to the
extent described above.

Rights and Warrants. A Fund will invest in rights or warrants only if the
underlying equity securities themselves are deemed appropriate by Alliance for
inclusion in the Fund's portfolio.

Rights and warrants entitle the holder to buy equity securities at a specific
price for a specific period of time. Rights are similar to warrants except that
they have a substantially shorter duration. Rights and warrants may be
considered more speculative than certain other types of investments in that they
do not entitle a holder to dividends or voting rights with respect to the
underlying securities nor do they represent any rights in the assets of the
issuing company. The value of a right or warrant does not necessarily change
with the value of the underlying security, although the value of a right or
warrant may decline because of a decrease in the value of the underlying
security, the passage of time or a change in perception as to the potential of
the underlying security, or any combination thereof. If the market price of the
underlying security is below the exercise price set forth in the warrant on the
expiration date, the warrant will expire worthless. Moreover, a right or warrant
ceases to have value if it is not exercised prior to the expiration date.

Mortgage-Backed Securities. Interest and principal payments (including
prepayments) on the mortgages underlying mortgage-backed securities are passed
through to the holders of the securities. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-backed
securities are often subject to more rapid prepayment of principal than their
stated maturity would indicate. Prepayments occur when the mortgagor on a
mortgage prepays the remaining principal before the mortgage's scheduled
maturity date. Because the prepayment characteristics of the underlying
mortgages vary, it is impossible to predict accurately the realized yield or
average life of a particular issue of pass-through certificates. Prepayments are
important because of their effect on the yield and price of the mortgage-backed
securities. During periods of declining interest rates, prepayments can be
expected to accelerate and a Fund investing in such securities would be required
to reinvest the proceeds at the lower interest rates then available. Conversely,
during periods of rising interest rates, a reduction in prepayments may increase
the effective maturity of the securities, subjecting them to a greater risk of
decline in market value in response to rising interest rates. In addition,
prepayments of mortgages underlying securities purchased at a premium could
result in capital losses.

Adjustable Rate Securities. Adjustable rate securities have interest rates that
are reset at periodic intervals, usually by

22
<PAGE>

reference to some interest rate index or market interest rate. Some adjustable
rate securities are backed by pools of mortgage loans. Although the
rate-adjustment feature may reduce sharp changes in the value of adjustable rate
securities, these securities can change in value based on changes in market
interest rates or the issuer's creditworthiness. Changes in the interest rate on
adjustable rate securities may lag behind changes in prevailing market interest
rates. Also, some adjustable rate securities (or the underlying mortgages) are
subject to caps or floors that limit the maximum change in interest rate.

Purchasers of loans and other forms of direct indebtedness depend primarily upon
the creditworthiness of the borrower for payment of principal and interest.
Direct debt instruments may not be rated by any nationally recognized rating
service. If the Fund does not receive scheduled interest or principal payments
on such indebtedness, the Fund's share price and yield could be adversely
affected. Loans that are fully secured offer the Fund more protection than
unsecured loans in the event of non-payment of scheduled interest or principal.
However, there is no assurance that the liquidation of collateral from a secured
loan would satisfy the borrower's obligation, or that the collateral can be
liquidated. Indebtedness of borrowers whose creditworthiness is poor may involve
substantial risks, and may be highly speculative.

A loan is often administered by a bank or other financial institution that acts
as agent for all holders. The agent

23
<PAGE>

administers the terms of the loan, as specified on the loan agreement. Unless,
under the terms of the loan or other indebtedness, the Fund has direct recourse
against the borrower, it may have to rely on the agent to apply appropriate
credit remedies against a borrower. If assets held by the agent for the benefit
of the Fund were determined to be subject to the claims of the agent's general
creditors, the Fund might incur certain costs and delays in realizing payment on
the loan or loan participation and could suffer a loss of principal or interest.

Illiquid Securities. Subject to any more restrictive applicable fundamental
investment policy, none of the Funds will maintain more than 15% of its net
assets in illiquid securities. Illiquid securities generally include (i) direct
placements or other securities that are subject to legal or contractual
restrictions on resale or for which there is no readily available market (e.g.,
when trading in the security is suspended or, in the case of unlisted
securities, when market makers do not exist or will not entertain bids or
offers), including many individually negotiated currency swaps and any assets
used to cover currency swaps and most privately negotiated investments in state
enterprises that have not yet conducted an initial equity offering, (ii)
over-the-counter options and assets used to cover over-the-counter options, and
(iii) repurchase agreements not terminable within seven days.

24
<PAGE>

agency or imposing legal restrictions on resales of securities, either as to
length of time the securities may be held or manner of resale. However, there
may be contractual restrictions on resales of securities.

Options on Securities Indices. An option on a securities index is similar to an
option on a security except that, rather than the right to take or make delivery
of a security at a specified price, an option on a securities index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing level of the chosen index is greater than (in the case of a call) or
less than (in the case of a put) the exercise price of the option.

No Fund will enter into any futures contracts or options on futures contracts if
immediately thereafter the market values of

25
<PAGE>

the outstanding futures contracts of the Fund and the currencies and futures
contracts subject to outstanding options written by the Fund would exceed 50% of
its total assets, and Income Builder Fund will also not do so if immediately
thereafter the aggregate of initial margin deposits on all the outstanding
futures contracts of the Fund and premiums paid on outstanding options on
futures contracts would exceed 5% of the market value of the total assets of the
Fund. Premier Growth Fund and Growth and Income Fund may not purchase or sell a
stock index future if immediately thereafter more than 30% of its total assets
would be hedged by stock index futures. Premier Growth Fund and Growth and
Income Fund may not purchase or sell a stock index future if, immediately
thereafter, the sum of the amount of margin deposits on the Fund's existing
futures positions would exceed 5% of the market value of the Fund's total
assets.

26
<PAGE>

a similar security on a when-issued or forward commitment basis, thereby
obtaining the benefit of currently higher cash yields. However, if Alliance were
to forecast incorrectly the direction of interest rate movements, a Fund might
be required to complete such when-issued or forward transactions at prices
inferior to the then current market values. When-issued securities and forward
commitments may be sold prior to the settlement date, but a Fund enters into
when-issued and forward commitments only with the intention of actually
receiving securities or delivering them, as the case may be. If a Fund chooses
to dispose of the right to acquire a when-issued security prior to its
acquisition or dispose of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. Any significant commitment of Fund
assets to the purchase of securities on a "when, as and if issued" basis may
increase the volatility of the Fund's net asset value. No forward commitments
will be made by New Europe Fund, All-Asia Investment Fund, Worldwide
Privatization Fund, Income Builder Fund, Utility Income Fund or Real Estate
Investment Fund if, as a result, the Fund's aggregate commitments under such
transactions would be more than 30% of the Fund's total assets. In the event the
other party to a forward commitment transaction were to default, a Fund might
lose the opportunity to invest money at favorable rates or to dispose of
securities at favorable prices.

27
<PAGE>

both as principals and as agents utilizing standardized swap documentation. As a
result, the swap market has become relatively liquid. Caps and floors are more
recent innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps.

Loans of Portfolio Securities. The risk in lending portfolio securities, as with
other extensions of credit, consists of the possible loss of rights in the
collateral should the borrower fail financially. In determining whether to lend
securities to a particular borrower, Alliance will consider all relevant facts
and circumstances, including the creditworthiness of the borrower. While
securities are on loan, the borrower will pay the Fund any income earned thereon
and the Fund may invest any cash collateral in portfolio securities, thereby
earning additional income, or receive an agreed upon amount of income from a
borrower who has delivered equivalent collateral. Each Fund will have the right
to regain record ownership of loaned securities or equivalent securities in
order to exercise ownership rights such as voting rights, subscription rights
and rights to dividends, interest or distributions. A Fund may pay reasonable
finders', administrative and custodial fees in connection with a loan. A Fund
will not lend its portfolio securities to any officer, director, employee or
affiliate of the Fund or Alliance.

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<PAGE>

no public market for forward contracts. It is impossible to predict the amount
of trading interest that may exist in various types of futures contracts,
options and forward contracts. If a secondary market does not exist with respect
to an option purchased or written by a Fund, it might not be possible to effect
a closing transaction in the option (i.e., dispose of the option), with the
result that (i) an option purchased by the Fund would have to be exercised in
order for the Fund to realize any profit and (ii) the Fund may not be able to
sell currencies or portfolio securities covering an option written by the Fund
until the option expires or it delivers the underlying security, futures
contract or currency upon exercise. Therefore, no assurance can be given that
the Funds will be able to utilize these instruments effectively for the purposes
set forth above. Furthermore, a Fund's ability to engage in options and futures
transactions may be limited by tax considerations. See "Dividends, Distributions
and Taxes" in the Statement of Additional Information of each Fund that invests
in options and futures.

Portfolio Turnover. Portfolio turnover rates for the existing classes of shares
of the Fund are set forth in the tables that begin on page 8. These portfolio
turnover rates are greater than those of most other investment companies,
including those which emphasize capital appreciation as a basic policy. A high
rate of portfolio turnover involves correspondingly greater brokerage and other
expenses than a lower rate, which must be borne by the Fund and its
shareholders. High portfolio turnover also may result in the realization of
substantial net short-term capital gains. See "Dividends, Distributions and
Taxes" in each Fund's Statement of Additional Information.

CERTAIN FUNDAMENTAL INVESTMENT POLICIES

Premier Growth Fund may not: (i) purchase more than 10% of the outstanding
voting securities of any one issuer; (ii) invest 25% or more of the value of its
total assets in the same industry; (iii) borrow money or issue senior securities
except for temporary or emergency purposes in an amount not exceeding 5% of the
value of its total assets at the time the borrowing is made; (iv) pledge,
mortgage, hypothecate or otherwise encumber any of its assets except in
connection with the writing of call options and except to secure permitted
borrowings; or (v) invest in the securities of any issuer that has a record of
less than three years of continuous operation (including the operation of any
predecessor) if as a result more than 10% of the value of the total assets of
the Fund would be invested in the securities of such issuer or issuers.

Technology Fund may not: (i) with respect to 75% of its total assets, have such
assets represented by other than: (a) cash and cash items, (b) U.S. Government
securities, or (c) securities of any one issuer (other than the U.S. Government
and its agencies or instrumentalities) not greater in value than 5% of the
Fund's total assets, and not more than 10% of the outstanding voting securities
of such issuer; (ii) purchase the securities of any one issuer, other than the
U.S. Government and its agencies or instrumentalities, if as a result (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 25%
of its total assets, or (b) the Fund owns more than 25% of the outstanding
securities of any one class of securities of such issuer; (iii) concentrate its
investments in any one industry, but the Fund has reserved the right to invest
up to 25% of its total assets in a particular industry; and (iv) invest in the
securities of any issuer which has a record of less than three years of
continuous operation (including the operation of any predecessor) if such
purchase

29
<PAGE>

would cause 10% or more of its total assets to be invested in the securities of
such issuers.

New Europe Fund may not: (i) purchase more than 10% of the outstanding voting
securities of any one issuer; (ii) invest more than 15% of its total assets in
the securities of any one issuer or 25% or more of its total assets in the same
industry, provided, however, that the foregoing restriction shall not be deemed
to prohibit the Fund from purchasing the securities of any issuer pursuant to
the exercise of rights distributed to the Fund by the issuer, except that no
such purchase may be made if as a result the Fund will fail to meet the
diversification requirements of the Code and any such acquisition in excess of
the foregoing 15% or 25% limits will be sold by the Fund as soon as reasonably
practicable (this restriction does not apply to U.S. Government securities, but
will apply to foreign government securities unless the Commission permits their
exclusion); (iii) borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests that might require the
untimely disposition of securities; borrowing in the aggregate may not exceed
15%, and borrowing for purposes other than meeting redemptions may not exceed
5%, of the Fund's total assets (including the amount borrowed) less liabilities
(not including the amount borrowed) at the time the borrowing is made;
outstanding borrowings in excess of 5% of the Fund's total assets will be repaid
before any subsequent investments are made; or (iv) purchase a security (unless
the security is acquired pursuant to a plan of reorganization or an offer of
exchange) if, as a result, the Fund would own any securities of an open-end
investment company or more than 3% of the total outstanding voting stock of any
closed-end investment company, or more than 5% of the value of the Fund's total
assets would be invested in securities of any closed-end investment company, or
more than 10% of such value in closed-end investment companies in general.

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<PAGE>

exceed 15%, and borrowing for purposes other than meeting redemptions may not
exceed 5%, of the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made; outstanding borrowings in excess of 5% of the value of the Fund's total
assets will be repaid before any investments are made; or (iii) pledge,
hypothecate, mortgage or otherwise encumber its assets, except to secure
permitted borrowings.

Global Environment Fund may not: (i) purchase more than 10% of the outstanding
voting securities of any one issuer; (ii) invest more than 15% of the value of
its total assets in the securities of any one issuer or 25% or more of the value
of its total assets in the same industry, except that the Fund will invest more
than 25% of its total assets in Environmental Companies, provided that this
restriction does not apply to U.S. Government securities, but will apply to
foreign government obligations unless the Commission permits their exclusion;
(iii) borrow money or issue senior securities, except that the Fund may borrow
(a) from a bank if immediately after such borrowing there is asset coverage of
at least 300% as defined in the 1940 Act and (b) for temporary purposes in an
amount not exceeding 5% of the value of the total assets of the Fund; (iv)
pledge, hypothecate, mortgage or otherwise encumber its assets, except (a) to
secure permitted borrowings and (b) in connection with initial and variation
margin deposits relating to futures contracts; (v) purchase a security (unless
the security is acquired pursuant to a plan of reorganization or an offer of
exchange) if, as a result, the Fund would own any securities of an open-end
investment company or more than 3% of the total outstanding voting stock of any
closed-end investment company, or more than 5% of the value of the Fund's total
assets would be invested in securities of any closed-end investment company or
more than 10% of such value in closed-end investment companies in the aggregate;
(vi) make short sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of such securities
or securities convertible into or exchangeable for, without payment of any
further consideration, securities of the same issue as, and equal in amount to,
the securities sold short ("short sales against the box"), and unless not more
than 5% of the Fund's net assets (taken at market value) is held as collateral
for such sales at any onetime; or (vii) buy or write (i.e., sell) put or call
options, except (a) the Fund may buy foreign currency options or write covered
foreign currency options and options on foreign currency futures and (b) the
Fund may purchase warrants.

Income Builder Fund may not: (i) invest 25% or more of its total assets in
securities of companies engaged principally in any one industry, except that
this restriction does not apply to U.S. Government securities; (ii) borrow money
except from banks for temporary or emergency purposes, including the meeting of
redemption requests that might require the untimely disposition of securities;
borrowing in the aggregate may not exceed 15%, and borrowing for purposes other
than meeting redemptions may not exceed 5%, of the Fund's total assets
(including the amount borrowed) less liabilities (not including the amount
borrowed) at the time borrowing is made; securities will not be purchased while
borrowings in excess of 5% of the Fund's total assets are outstanding; or (iii)
pledge, hypothecate, mortgage or otherwise encumber its assets, except to secure
permitted borrowings.

31
<PAGE>

Real Estate Investment Fund may not: (i) with respect to 75% of its total
assets, have such assets represented by other than: (a) cash and cash items, (b)
U.S. Government securities, or (c) securities of any one issuer (other than the
U.S. Government and its agencies or instrumentalities) not greater in value than
5% of the Fund's total assets, and not more than 10% of the outstanding voting
securities of such issuer; (ii) purchase the securities of any one issuer, other
than the U.S. Government and its agencies or instrumentalities, if as a result
(a) the value of the holdings of the Fund in the securities of such issuer
exceeds 25% of its total assets, or (b) the Fund owns more than 25% of the
outstanding securities of any one class of securities of such issuer; (iii)
invest 25% or more of its total assets in the securities of issuers conducting
their principal business activities in any one industry, other than the real
estate industry in which the Fund will invest at least 25% or more of its total
assets, except that this restriction does not apply to U.S. Government
securities; (iv) purchase or sell real estate, except that it may purchase and
sell securities of companies which deal in real estate or interests therein,
including Real Estate Equity securities; or (v) borrow money except for
temporary or emergency purposes or to meet redemption requests, in an amount not
exceeding 5% of the value of its total assets at the time the borrowing is made.

RISK CONSIDERATIONS

Investment in certain of the Funds involves the special risk considerations
described below. These risks may be heightened when investing in emerging
markets.

Currency Considerations. Substantially all of the assets of International Fund,
New Europe Fund, All-Asia Investment Fund, and Worldwide Privatization Fund and
a substantial portion of the assets of Global Small Cap Fund and Global
Environment Fund will be invested in securities denominated in foreign
currencies, and a corresponding portion of these Funds' revenues will be
received in such currencies. Therefore, the dollar equivalent of their net
assets, distributions and income will be adversely affected by reductions in the
value of certain foreign currencies relative to the U.S. dollar. If the value of
the foreign currencies in which a Fund receives its income falls relative to the
U.S. dollar between receipt of the income and the making of Fund distributions,
the Fund may be required to liquidate securities in order to make distributions
if it has insufficient cash in U.S. dollars to meet distribution requirements
that the Fund must satisfy to qualify as a regulated investment company for
federal income tax purposes. Similarly, if an exchange rate declines between the
time a Fund incurs expenses in U.S. dollars and the time cash expenses are paid,
the amount of the currency required to be converted into U.S. dollars in order
to pay expenses in U.S. dollars could be greater than the equivalent amount of
such expenses in the currency at the time they were incurred. In light of these
risks, a Fund may engage in certain currency hedging transactions, which
themselves involve certain special risks. See "Additional Investment Practices"
above.

32
<PAGE>

of an issuer's outstanding securities or a specific class of securities which
may have less advantageous terms (including price) than securities of the
company available for purchase by nationals. These restrictions or controls may
at times limit or preclude investment in certain securities and may increase the
costs and expenses of a Fund. In addition, the repatriation of investment
income, capital or the proceeds of sales of securities from certain countries is
controlled under regulations, including in some cases the need for certain
advance government notification or authority, and if a deterioration occurs in a
country's balance of payments, the country could impose temporary restrictions
on foreign capital remittances.

The public sector borrowing requirement, a mandated measure of the amount
required to balance the budget, has been, over the last two fiscal years, higher
than forecast. The general government fiscal deficit has been in excess of the
eligibility limit prescribed by the European Union for countries that intend to
participate in the Economic and Monetary Union ("EMU"), which is scheduled to
take effect in January 1999. The government, however, expects that the deficit
will be below that limit in the 1997-98 and 1998-99 fiscal years. Although the
government has not yet made a formal announcement with respect to the United
Kingdom's participation in the EMU, remarks of the Chancellor of the Exchequer
made in mid-October 1997 suggest that the United Kingdom will not participate in
the EMU beginning in January 1999 but may do so thereafter.

From 1979 until 1997 the Conservative Party controlled Parliament. In the May 1,
1997 general elections, however, the Labour Party, led by Tony Blair, won a
majority in Parliament, holding 418 of 658 seats in the House of Commons. Mr.
Blair, who was appointed Prime Minister, has launched a number of reform
initiatives, including an overhaul of the monetary policy framework intended to
protect monetary policy from political forces by vesting responsibility for
setting interest rates in a new Monetary Policy Committee headed by the Governor
of the Bank of England, as opposed to the Treasury. Prime Minister Blair has
also undertaken a comprehensive restructuring of the regulation of the financial
services industry. For further information regarding the United Kingdom, see the
Statement of Additional Information of New Europe Fund.

33
<PAGE>

appreciated against the U.S. dollar, but has since fallen from its post-World
War II high (in 1995) against the U.S. dollar.

For the past several years, Japan's banking industry has been weakened by a
significant amount of problem loans. Japan's banks also have significant
exposure to the current financial turmoil in other Asian markets. On December
17, 1997 the Japanese government proposed to strengthen Japan's banks by means
of an infusion of public funds and other measures. It is unclear whether these
proposals, which are under consideration by Japan's parliament, would, if
implemented, achieve their intended effect. For further information regarding
Japan, see the Statements of Additional Information for All-Asia Investment Fund
and International Fund.

Investment in such companies involves greater risks than is customarily
associated with securities of more established companies. Companies in the
earlier stages of their development often have products and management personnel
which have not been thoroughly tested by time or the marketplace; their
financial resources may not be as substantial as those of more established
companies. The securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market movements than
securities of larger companies or broad market indices. The revenue flow of such
companies may be erratic and their results of operations may fluctuate widely
and may also contribute to stock price volatility.

Investing in Environmental Companies by Global Environment Fund. Governmental
regulations or other action can inhibit an Environmental Company's performance,
and it may take years to translate environmental legislation into sales and
profits. Environmental Companies generally face competition in fields often
characterized by relatively short product cycles and competitive pricing
policies. Losses may result from large product development or expansion costs,
unprotected marketing or distribution systems, erratic revenue flows and low
profit margins. Additional risks that Environmental Companies may face include
difficulty in financing the high cost of technological development,
uncertainties due to changing governmental regulation or rapid technological
advances, potential liabilities associated with hazardous components and
operations, and difficult in finding experienced employees.

Therefore, an investment in the Fund is subject to certain risks associated with
the direct ownership of real estate and with the real estate industry in
general. These risks include, among others: possible declines in the value of
real estate; risks related to general and local economic conditions; possible
lack of availability of mortgage funds; overbuilding; extended vacancies of
properties; increases in competition, property taxes and operating expenses;
changes in zoning laws; costs resulting from the clean-up of, and liability to
third parties for damages resulting from, environmental problems; casualty or
condemnation losses; uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in interest
rates. To the extent that assets underlying the Fund's investments are
concentrated geographically, by property type or in certain other respects, the
Fund may be subject to certain of the foregoing risks to a greater extent.

34
<PAGE>

in securities of companies providing mortgage servicing will be subject to the
risks associated with refinancings and their impact on servicing rights.

Under normal market conditions, the average dollar-weighted maturity of a Fund's
portfolio of debt or other fixed-income securities is expected to vary between
five and 30 years in the case of All-Asia Investment Fund, between eight and 15
years in the case of Income Builder Fund, between five and 25 years in the case
of Utility Income Fund and between one year or less and 30 years in the case of
all other Funds that invest in such securities. In periods of increasing
interest rates, each of the Funds may, to the extent it holds mortgage-backed
securities, be subject to the risk that the average dollar-weighted maturity of
the Fund's portfolio of debt or other fixed-income securities may be extended as
a result of lower than anticipated prepayment rates. See "Additional Investment
Practices--Mortgage-Backed Securities."

Securities Ratings. The ratings of securities by S&P, Moody's, Duff & Phelps and
Fitch are a generally accepted barometer of

35
<PAGE>

credit risk. They are, however, subject to certain limitations from an
investor's standpoint. The rating of an issuer is heavily weighted by past
developments and does not necessarily reflect probable future conditions. There
is frequently a lag between the time a rating is assigned and the time it is
updated. In addition, there may be varying degrees of difference in credit risk
of securities within each rating category.

Alliance will try to reduce the risk inherent in investment in lower-rated
securities through credit analysis, diversification and attention to current
developments and trends in interest rates and economic and political conditions.
However, there can be no assurance that losses will not occur. Since the risk of
default is higher for lower-rated securities, Alliance's research and credit
analysis are a correspondingly more important aspect of its program for managing
a Fund's securities than would be the case if a Fund did not invest in
lower-rated securities.

Certain lower-rated securities in which Growth Fund, Income Builder Fund,
Strategic Balanced Fund and Utility Income Fund may invest may contain call or
buy-back features that permit the issuers thereof to call or repurchase such
securities. Such securities may present risks based on prepayment expectations.
If an issuer exercises such a provision, a Fund may have to replace the called
security with a lower yielding security, resulting in a decreased rate of return
to the Fund.

Non-Diversified Status. Each of Worldwide Privatization Fund, New Europe Fund,
All-Asia Investment Fund, Global Environmental Fund and Income Builder Fund is a
"non-diversified" investment company, which means the Fund is not limited in the
proportion of its assets that may be invested in the securities of a single
issuer. However, each Fund intends to conduct its operations so as to qualify to
be taxed as a "regulated investment company" for purposes of the Code, which
will relieve the Fund of any liability for federal income tax to the extent its
earnings are distributed to shareholders. See "Dividends, Distributions and
Taxes" in each Fund's Statement

36
<PAGE>

of Additional Information. To so qualify, among other requirements, the Fund
will limit its investments so that, at the close of each quarter of the taxable
year, (i) not more than 25% of the Fund's total assets will be invested in the
securities of a single issuer, and (ii) with respect to 50% of its total assets,
not more than 5% of its total assets will be invested in the securities of a
single issuer and the Fund will not own more than 10% of the outstanding voting
securities of a single issuer. A Fund's investments in U.S. Government
securities and other regulated investment companies are not subject to these
limitations. Because each of Worldwide Privatization Fund, New Europe Fund,
All-Asia Investment Fund and Income Builder Fund is a non-diversified investment
company, it may invest in a smaller number of individual issuers than a
diversified investment company, and an investment in such Fund may, under
certain circumstances, present greater risk to an investor than an investment in
a diversified investment company.

Year 2000. Many computer software systems in use today cannot properly process
date-related information from and after January 1, 2000. Should any of the
computer systems employed by the Fund's major service providers fail to process
this type of information properly, that could have a negative impact on the
Fund's operations and the services that are provided to the Fund's shareholders.
Alliance, each Fund's investment adviser, Alliance Fund Distributors, Inc.
("AFD"), each Fund's principal underwriter, and Alliance Fund Services, Inc.
("AFS"), each Fund's registrar, transfer agent and dividend disbursing agent,
have advised the Funds that they are reviewing all of their computer systems
with the goal of modifying or replacing such systems prior to January 1, 2000 to
the extent necessary to foreclose any such negative impact. In addition,
Alliance has been advised by each Fund's custodian that they are also in the
process of reviewing their systems with the same goal. As of the date of this
Prospectus, the Funds and Alliance have no reason to believe that these goals
will not be achieved.

HOW TO BUY SHARES

Each Fund offers multiple classes of shares, of which only the Advisor Class is
offered by this Prospectus. Advisor Class shares of each Fund may be purchased
through your financial representative at net asset value without any initial or
contingent deferred sales charges and are not subject to ongoing distribution
expenses. Advisor Class shares may be purchased and held solely (i) through
accounts established under a fee-based program, sponsored and maintained by a
registered broker-dealer or other financial intermediary and approved by AFD,
(ii) through a self-directed defined contribution employee benefit plan (e.g., a
401(k) plan) that has at least 1,000 participants or $25 million in assets,
(iii) by investment advisory clients of, and certain other persons associated
with, Alliance and its affiliates or the Funds, and (iv) through registered
investment advisers or other financial intermediaries who charge a management,
consulting or other fee for their service and who purchase shares through a
broker or agent approved by AFD and clients of such registered investment
advisers or financial intermediaries whose accounts are linked to the master
account of such investment adviser or financial intermediary on the books of
such approved broker or agent. For more detailed information about who may
purchase and hold Advisor Class shares see the Statements of Additional
Information. A shareholder's Advisor Class shares will automatically convert to
Class A shares of the same Fund under certain circumstances. For a more detailed
description of the conversion feature and Class A shares, see "Conversion
Feature."

Generally, a fee-based program must charge an asset-based or other similar fee
and must invest at least $250,000 in Advisor Class shares of each Fund in which
the program invests in order to be approved by AFD for investment in Advisor
Class shares. Share certificates are issued only upon request. See the
Subscription Application and the Statements of Additional Information for more
information.

The Funds may refuse any order to purchase Advisor Class shares. In this regard,
the Funds reserve the right to restrict purchases of Advisor Class shares
(including through exchanges) when there appears to be evidence of a pattern of
frequent purchases and sales made in response to short-term considerations.

How the Funds Value Their Shares

The net asset value of Advisor Class shares of a Fund is calculated by dividing
the value of the Fund's net assets allocable to the Advisor Class by the
outstanding shares of the Advisor Class. Shares are valued each day the Exchange
is open as of the close of regular trading (currently 4:00 p.m. Eastern time).
The securities in a Fund are valued at their current market value determined on
the basis of market quotations or, if such quotations are not readily available,
such other methods as the Fund's Directors believe accurately reflects fair
market value.

HOW TO SELL SHARES

You may "redeem" (i.e., sell your shares in a Fund to the Fund) on any day the
Exchange is open, either directly or through your financial representative. The
price you will receive is the net asset value next calculated after the Fund
receives your request in proper form. Proceeds generally will be sent to you
within seven days. However, for shares recently purchased by check or electronic
funds transfer, a Fund will not send proceeds until it is reasonably satisfied
that the check or electronic funds transfer has been collected (which may take
up to 15 days). If you are in doubt about what documents are required by your
fee-based program or employee benefit plan, you should contact your financial
representative.

37
<PAGE>

Selling Shares Through Your Financial Representative

Your financial representative must receive your request before 4:00 p.m. Eastern
time, and your financial representative must transmit your request to the Fund
by 5:00 p.m. Eastern time, for you to receive that day's net asset value. Your
financial representative is responsible for furnishing all necessary
documentation to a Fund and may charge you for this service.

Selling Shares Directly To A Fund

Send a signed letter of instruction or stock power form to AFS along with
certificates, if any, that represent the shares you want to sell. For your
protection, signatures must be guaranteed by a bank, a member firm of a national
stock exchange or other eligible guarantor institution. Stock power forms are
available from your financial representative, AFS, and many commercial banks.
Additional documentation is required for the sale of shares by corporations,
intermediaries, fiduciaries and surviving joint owners. For details contact:

Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
800-221-5672

Alternatively, a request for redemption of shares for which no stock
certificates have been issued can also be made by telephone to 800-221-5672.
Telephone redemption requests must be made by 4 p.m. Eastern time on a Fund
business day in order to receive that day's net asset value, and, for
redemptions made before March 1, 1998 may be made only once in any 30-day period
(except for certain omnibus accounts). A shareholder who has completed the
appropriate section of the Subscription Application, or the Shareholder Options
form obtained from AFS, can elect to have the proceeds of his or her redemption
sent to his or her bank via an electronic funds transfer. Proceeds of telephone
redemptions also may be sent by check to a shareholder's address of record.
Except for certain omnibus accounts, redemption requests by electronic funds
transfer may not exceed $100,000 and redemption requests by check may not exceed
$50,000 per day. Telephone redemption is not available for shares held in
nominee or "street name" accounts or retirement plan accounts or shares held by
a shareholder who has changed his or her address of record within the previous
30 calendar days.

General

The sale of shares is a taxable transaction for federal tax purposes. Under
unusual circumstances, a Fund may suspend redemptions or postpone payment for up
to seven days or longer, as permitted by federal securities law. The Funds
reserve the right to close an account that through redemption has remained below
$200 for 90 days. Shareholders will receive 60 days' written notice to increase
the account value before the account is closed.

During drastic economic or market developments, you might have difficulty
reaching AFS by telephone, in which event you should issue written instructions
to AFS. AFS is not responsible for the authenticity of telephonic requests to
purchase, sell or exchange shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine, and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephonic requests. The telephone
service may be suspended or terminated at any time without notice.

SHAREHOLDER SERVICES

AFS offers a variety of shareholder services. For more information about these
services or your account, call AFS's toll-free number, 800-221-5672.

HOW TO EXCHANGE SHARES

You may exchange your Advisor Class shares of any Fund for Advisor Classshares
of other Alliance Mutual Funds (including AFD Exchange Reserves, a money market
fund managed by Alliance). Exchanges of shares are made at the net asset value
next determined and without sales or service charges. Exchanges may be made by
telephone or written request. Telephone exchange requests must be received by
AFS by 4:00 p.m. Eastern time on a Fund business day in order to receive that
day's net asset value.

Please read carefully the prospectus of the mutual fund into which you are
exchanging before submitting the request. Call AFS at 800-221-5672 to exchange
uncertificated shares. An exchange is a taxable capital transaction for federal
tax purposes. The exchange service may be changed, suspended, or terminated on
60 days' written notice.

GENERAL

If you are a Fund shareholder through an account established under a fee-based
program, your fee-based program may impose requirements with respect to the
purchase, sale or exchange of Advisor Class shares of a Fund that are different
from those described in this Prospectus. A transaction, service, administrative
or other similar fee may be charged by your broker-dealer, agent, financial
intermediary or other financial representative with respect to the purchase,
sale or exchange of Advisor Class shares made through such financial
representative. Such financial intermediaries may also impose requirements with
respect to the purchase, sale or exchange of shares that are different from, or
in addition to, those imposed by a Fund, including requirements as to the
minimum initial and subsequent investment amounts.

Each Fund offers three classes of shares other than the Advisor Class, which are
Class A, Class B and Class C. All classes of shares of a Fund have a common
investment objective and investment portfolio. Class A shares are offered with
an initial sales charge and pay a distribution services fee. Class B shares have
a contingent deferred sales charge (a "CDSC") and also pay a distribution
services fee. Class C shares have no initial sales charge or CDSC as long as
they are not redeemed within one year of purchase, but pay a distribution
services fee. Because

38
<PAGE>

Advisor Class shares have no initial sales charge or CDSC and pay no
distribution services fee, Advisor Class shares are expected to have different
performance from Class A, Class B or Class C shares. You can obtain more
information about Class A, Class B and Class C shares, which are not offered by
this Prospectus, by contacting AFS by telephone at 800-221-5672 or by contacting
your financial representative.

- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------

ADVISER

<TABLE>
<CAPTION>
Principal occupation
during the past
Fund Employee; year; title five years
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Fund Alden M. Stewart since 1997-- Associated with
Executive Vice President of Alliance since
Alliance Capital Management 1993; prior
Corporation ("ACMC")* thereto,
associated with
Equitable Capital
Management
Corporation
("Equitable
Capital")**

Randall E. Haase since 1997-- Associated with
Senior Vice President of ACMC Alliance since July
1993; prior
thereto,
associated with
Equitable Capital

Growth Fund Tyler Smith since inception-- Associated with
Senior Vice President of ACMC Alliance since
July 1993; prior
thereto,
associated with
Equitable Capital

Premier Growth Fund Alfred Harrison since inception-- Associated with
Vice Chairman of ACMC Alliance

Technology Fund Peter Anastos since 1992-- Associated with
Senior Vice President of ACMC Alliance

Gerald T. Malone since 1992-- Associated with
Senior Vice President of ACMC Alliance since
1992; prior
thereto
associated with
College
Retirement
Equities Fund

Quasar Fund Alden M. Stewart since 1994-- (see above)
(see above)

Randall E. Haase since 1994-- (see above)
(see above)

International Fund A. Rama Krishna since 1993-- Associated with
Senior Vice President of ACMC Alliance since
and director of Asian Equity 1993, prior
research thereto,
Chief Investment
Strategist and
Director--Equity
Research for CS
First Boston

Worldwide Privatization Mark H. Breedon since inception-- Associated with
Fund Senior Vice President of ACMC Alliance
and Director and Vice President
of Alliance Capital Limited ***

New Europe Fund Steven Beinhacker since 1997-- Associated with
Vice President of ACMC Alliance

All-Asia Investment A. Rama Krishna since inception-- (see above)
Fund (see above)

Global Small Cap Alden M. Stewart since 1994-- (see above)
Fund (see above)

Randall E. Haase since 1994-- (see above)
(see above)

Ronald L. Simcoe since 1993-- Associated with
Vice President of ACMC Alliance since
1993; prior
thereto,
associated with
Equitable Capital

Global Environment Jeremy R. Kramer since 1995-- Associated with
Fund Vice President of ACMC Alliance since
1993; prior
thereto, securities
analyst with
Neuberger &
Berman

Strategic Balanced Nicholas D.P. Carn since 1997-- Associated with
Fund Vice President of ACMC Alliance since
1997; prior
thereto, Chief
Investment
Officer and
Portfolio Manager
at Draycott
Partners

Balanced Shares Paul Rissman since 1997-- Associated with
Senior Vice President of ACMC Alliance

Income Builder Fund Andrew M. Aran since 1994-- Associated with
Senior Vice President of ACMC Alliance

Thomas M. Perkins since 1991-- Associated with
Senior Vice President of ACMC Alliance

Vita Marie Pike since 1997-- Associated with
Vice President of ACMC Alliance

Corinne Molof Hill since 1997-- Associated with
Vice President of ACMC Alliance

Utility Income Fund Paul Rissman since 1996-- Associated with
(see above) Alliance

Growth & Income Paul Rissman since 1994-- Associated with
Fund (see above) Alliance
</TABLE>

39
<PAGE>

<TABLE>
<CAPTION>
Principal occupation
during the past
Fund Employee; year; title five years
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate Daniel G. Pine since 1996 Associated with
Investment Fund Senior Vice President Alliance since
of ACMC 1996; prior
thereto, Senior
Vice President of
Desai Capital
Management

David Kruth since 1997-- Associated with
Vice President of ACMC Alliance since
1997; prior
thereto Senior
Vice President of
the Yarmouth
Group
</TABLE>

- --------------------------------------------------------------------------------
* The sole general partner of Alliance.
** Equitable Capital was, prior to Alliance's acquisition of it, a management
firm under common control with Alliance.
*** An indirect wholly-owned subsidiary of Alliance.

The performance data is net of all fees (including brokerage commissions)
charged to those accounts. The performance data is computed in accordance with
standards formulated by the Association of Investment Management and Research
and has not been adjusted to reflect any fees that will be payable by Premier
Growth Fund, which are higher than the fees imposed on the Historical Portfolio
and will result in a higher expense ratio and lower returns for Premier Growth
Fund. Expenses associated with the distribution of Class A, Class B and Class C
shares of Premier Growth Fund in accordance with the plan adopted by Premier
Growth Fund's Board of Directors pursuant to Rule 12b-1 under the 1940 Act
("distribution fees") are also excluded. See "Expense Information." The
performance data has also not been adjusted for corporate or individual taxes,
if any, payable by the account owners.

Alliance has calculated the investment performance of the Historical Portfolios
on a trade-date basis. Dividends have been accrued at the end of the month and
cash flows weighted daily. Composite investment performance for all portfolios
has been determined on an asset-weighted basis. New accounts are included in the
composite investment performance computations at the beginning of the quarter
following the initial contribution. The total returns set forth below are
calculated using a method that links the monthly return amounts for the
disclosed periods, resulting in a time-weighted rate of return.

40
<PAGE>

compiled by Frank Russell Company and is segmented into two style indices, based
on the capitalization-weighted median book-to-price ratio of each of the
securities. At each reconstitution, the Russell 1000 constituents are ranked by
their book-to-price ratio. Once so ranked, the breakpoint for the two styles is
determined by the median market capitalization of the Russell 1000. Thus, those
securities falling within the top fifty percent of the cumulative market
capitalization (as ranked by descending book-to-price) become members of the
Russell Price-Driven Indices. The Russell 1000 Growth Index is, accordingly,
designed to include those Russell 1000 securities with a greater-than-average
growth orientation. In contrast with the securities in the Russell Price-Driven
Indices, companies in the Growth Index tend to exhibit higher price-to-book and
price-earnings ratios, lower dividend yield and higher forecasted growth values.

To the extent Premier Growth Fund does not invest in U.S. common stocks or
utilizes investment techniques such as futures or options, the S&P 500 Index and
Russell 1000 Growth Index may not be substantially comparable to Premier Growth
Fund. The S&P 500 Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time period shown.
The S&P 500 Index and Russell 1000 Growth Index do not reflect the deduction of
any fees. If Premier Growth Fund were to purchase a portfolio of securities
substantially identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, Premier Growth Fund's performance relative to the
index would be reduced by Premier Growth Fund's expenses, including brokerage
commissions, advisory fees, distribution fees, custodial fees, transfer agency
costs and other administrative expenses as well as by the impact on Premier
Growth Fund's shareholders of sales charges and income taxes.

Schedule of Composite Investment Performance--Historical Portfolios*

<TABLE>
<CAPTION>
Russell Lipper
Premier Historical S&P 500 1000 Growth
Growth Portfolios Index Growth Index Fund Index
Fund Total Return** Total Return Total Return Total Return
------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Year ended:
1997*** .......... 27.05% 34.90% 33.36% 30.49% 25.30%
1996*** .......... 18.84 22.22 22.96 23.12 17.48
1995*** .......... 40.66 40.12 37.58 37.19 32.65
1994 ............. (9.78) (4.83) 1.32 2.66 (1.57)
1993 ............. 5.35 10.62 10.08 2.90 11.98
1992 ............. -- 12.27 7.62 5.00 7.63
1991 ............. -- 39.19 30.47 41.16 35.20
1990 ............. -- (1.57) (3.10) (0.26) (5.00)
1989 ............. -- 39.08 31.69 35.92 28.60
1988 ............. -- 10.96 16.61 11.27 15.80
1987 ............. -- 8.57 5.25 5.31 1.00
1986 ............. -- 27.60 18.67 15.36 15.90
1985 ............. -- 37.68 31.73 32.85 30.30
1984 ............. -- (3.33) 6.27 (.95) (2.80)
1983 ............. -- 20.95 22.56 15.98 22.30
1982 ............. -- 28.23 21.55 20.46 20.20
1981 ............. -- (1.10) (4.92) (11.31) (8.40)
1980 ............. -- 51.10 32.50 39.57 37.30
1979 ............. -- 30.99 18.61 23.91 27.40
Cumulative total
return for
the period
January 1,
1979 to
December 31,
1997 ............. -- 3,689% 1,946% 1,683% 1,753%
</TABLE>

- --------------------------------------------------------------------------------

* Total return is a measure of investment performance that is based upon the
change in value of an investment from the beginning to the end of a
specified period and assumes reinvestment of all dividends and other
distributions. The basis of preparation of this data is described in the
preceding discussion. Total returns for Premier Growth Fund are for Class A
Shares with imposition of the maximum 4.25% sales charge.

The average annual total returns presented below are based upon the cumulative
total return as of December 31, 1997, and for more than one year assume a steady
compounded rate of return and are not year-by-year results, which fluctuated
over the periods as shown.

<TABLE>
<CAPTION>
Average Annual Total Returns
-------------------------------------------------------------------------------------
Premier Russell Lipper
Growth Historical S&P 500 1000 Growth
Fund Portfolios** Index Growth Index Fund Index
------- ---------- ------- ------------ ----------
<S> <C> <C> <C> <C> <C>
One year ............................ 27.05% 34.90% 33.36% 30.49% 25.30%
Three years ......................... 32.32 32.20 31.15 30.14 25.11
Five years .......................... 19.14 19.46 20.27 18.41 16.47
Ten years+ .......................... 20.13 19.17 18.05 17.94 15.93
Since January 1,
1979 .............................. -- 20.08 17.22 16.37 15.86
</TABLE>

- --------------------------------------------------------------------------------

+ Since inception on 9/28/92

41
<PAGE>

ADMINISTRATOR TO ALL-ASIA INVESTMENT FUND

CONSULTANT TO ALLIANCE WITH RESPECT TO INVESTMENT
IN REAL ESTATE SECURITIES

CBC is one of the three largest fee-based property management firms in the
United States, the largest commercial real estate lease brokerage firm in the
country, the largest investment property brokerage firm in the country, as well
as one of the largest publishers of real estate research, with approximately
6,000 employees nationwide. CBC will provide Alliance with exclusive access to
its REIToScore model which ranks approximately 130 REITs based on the relative
attractiveness of the property markets in which they own real estate. This model
scores the approximately 12,000 individual properties owned by these companies.
REIToScore is in turn based on CBC's National Real Estate Index which gathers,
analyzes and publishes targeted research for the 65 largest U.S. real estate
markets based on a variety of public- and private-sector sources as well as
CBC's proprietary database of 60,000 commercial property transactions
representing over $400 billion of investment property and over 3,000 tracked
properties which report rent and expense data quarterly. CBC has previously
provided access to its REIToScore model results primarily to the institutional
market through subscriptions. The model is no longer provided to any research
publications and the Fund is currently the only mutual fund available to retail
investors that has access to CBC's REIToScore model.

DISTRIBUTION SERVICES AGREEMENTS

Each Fund has entered into a Distribution Services Agreement with AFD with
respect to the Advisor Class shares. The Glass-Steagall Act and other applicable
laws may limit the ability of a bank or other depository institution to become
an underwriter or distributor of securities. However, in the opinion of the
Funds' management, based on the advice of counsel, these laws do not prohibit
such depository institutions from providing services for investment companies
such as the administrative, accounting and other services referred to in the
Agreements. In the event that a change in these laws prevented a bank from
providing such services, it is expected that other service arrangements would be
made and that shareholders would not be adversely affected. The State of Texas
requires that shares of a Fund may be sold in that state only by dealers or
other financial institutions that are registered there as broker-dealers.

DIVIDENDS AND DISTRIBUTIONS

While it is the intention of each Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized

42
<PAGE>

capital gains, if any, the amount and time of any such dividend or distribution
must necessarily depend upon the realization by such Fund of income and capital
gains from investments. There is no fixed dividend rate, and there can be no
assurance that a Fund will pay any dividends or realize any capital gains. Since
REITs pay distributions based on cash flow, without regard to depreciation and
amortization, it is likely that a portion of the distributions paid to Real
Estate Investment Fund and subsequently distributed to shareholders may be a
nontaxable return of capital. The final determination of the amount of a Fund's
return of capital distributions for the period will be made after the end of
each calendar year.

FOREIGN INCOME TAXES

U.S. FEDERAL INCOME TAXES

Each Fund intends to qualify to be taxed as a "regulated investment company"
under the Code. To the extent that a Fund distributes its taxable income and net
capital gain to its shareholders, qualification as a regulated investment
company relieves that Fund of federal income taxes on that part of its taxable
income including net capital gains which it pays out to its shareholders.
Dividends out of net ordinary income and distributions of net short-term capital
gains are taxable to the recipient shareholders as ordinary income. In the case
of corporate shareholders, such dividends may be eligible for the
dividends-received deduction, except that the amount eligible for the deduction
is limited to the amount of qualifying dividends received by the Fund. Dividends
received from REITs generally do not constitute qualifying dividends. A
corporation's dividends-received deduction generally will be disallowed unless
the corporation holds shares in the Fund at least 46 days during the 90 day
period beginning 45 days before the date on which the corporation becomes
entitled to receive the dividend. Furthermore, the dividends-received deduction
will be disallowed to the extent a corporation's investment in shares of a Fund
is financed with indebtedness.

Any dividend or distribution received by a shareholder on shares of a Fund will
have the effect of reducing the net asset value of such shares by the amount of
such dividend or distribution. Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder although in effect a
return of capital to that particular shareholder, would be taxable to him or her
as described above. If a shareholder held shares six months or less and during
that period received a distribution of net capital gains, any loss realized on
the sale of such shares during such six-month period would be a long-term
capital loss to the extent of such distribution.

A dividend or capital gains distribution with respect to shares of a Fund held
by a tax-deferred or qualified plan, generally such as an individual retirement
account, 403(b)(7) retirement plan or corporate pension or profit-sharing plan,
will not be taxable to the plan. Distributions from such plans will be taxable
to individual participants under applicable tax rules without regard to the
character of the income earned by the qualified plan.

Under certain circumstances, if a Fund realizes losses (e.g., from fluctuations
in currency exchange rates) after paying a dividend, all or a portion of the
dividend may subsequently be characterized as a return of capital. Returns of
capital are generally nontaxable, but will reduce a shareholder's basis in
shares of a Fund. If that basis is reduced to zero (which could happen if the
shareholder does not reinvest distributions and returns of capital are
significant) any further returns of capital will be taxable as capital gain. See
"Dividends, Distributions and Taxes" in the Statements of Additional
Information. Shareholders will be advised annually as to the tax status of
dividends and capital gains and return of capital distributions. Shareholders
are urged to consult their tax advisors regarding their own tax situation.
Distributions by a Fund may be subject to state and local taxes.

43
<PAGE>

- --------------------------------------------------------------------------------
CONVERSION FEATURE
- --------------------------------------------------------------------------------

CONVERSION TO CLASS A SHARES

Advisor Class shares may be held solely through the fee-based program accounts,
employee benefit plans and registered investment advisory or other financial
intermediary relationships described above under "Purchase and Sale of SharesHow
to Buy Shares," and by investment advisory clients of, and certain other persons
associated with, Alliance and its affiliates or the Funds. If (i) a holder of
Advisor Class shares ceases to participate in the fee-based program or plan, or
to be associated with an investment advisor or financial intermediary, in each
case that satisfies the requirements to purchase shares set forth under
"Purchase and Sale of Shares--How to Buy Shares" or (ii) the holder is otherwise
no longer eligible to purchase Advisor Class shares as described in this
Prospectus (each, a "Conversion Event"), then all Advisor Class shares held by
the shareholder will convert automatically and without notice to the
shareholder, other than the notice contained in this Prospectus, to Class A
shares of the Fund during the calendar month following the month in which the
Fund is informed of the occurrence of the Conversion Event. The failure of a
shareholder or a fee-based program to satisfy the minimum investment
requirements to purchase Advisor Class shares will not constitute a Conversion
Event. The conversion would occur on the basis of the relative net asset values
of the two classes and without the imposition of any sales load, fee or other
charge.

DESCRIPTION OF CLASS A SHARES

The following sets forth maximum transaction costs, annual expenses, per share
income and capital charges for Class A shares of each of the Funds. Class A
shares are subject to a distribution fee that may not exceed an annual rate of
.30%. The higher fees mean a higher expense ratio, so Class A shares pay
correspondingly lower dividends and may have a lower net asset value than
Advisor Class shares.

Shareholder Transaction Expenses are one of several factors to consider when you
invest in a Fund. The following table summarizes your maximum transaction costs
from investing in Class A shares of a Fund and annual expenses for Class A
shares of each Fund. For each Fund, the "Examples" to the right of the table
below show the cumulative expenses attributable to a hypothetical $1,000
investment for the periods specified.

<TABLE>
<CAPTION>
Class A Shares
--------------
<S> <C>
Maximum sales charge imposed on purchases (as a percentage of
offering price) (a) ..................................................... None (sales
charge waived)

Sales charge imposed on dividend reinvestments .......................... None

Deferred sales charge (as a percentage of original purchase price or
redemption proceeds, whichever is lower) ................................ None

Exchange fee ............................................................ None
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Operating Expenses Examples(a)
- --------------------------------------- ----------------------------
Alliance Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .68% After 1 year $ 11
12b-1 fees .20% After 3 years $ 33
Other expenses (b) .15% After 5 years $ 57
---- After 10 years $126
Total fund
operating expenses 1.03%
====

<CAPTION>
Growth Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .74% After 1 year $ 13
12b-1 fees .30% After 3 years $ 40
Other expenses (b) .22% After 5 years $ 69
---- After 10 years $152
Total fund
operating expenses 1.26%
====
</TABLE>

- --------------------------------------------------------------------------------

Please refer to the footnotes on page 46.

44
<PAGE>

Operating Expenses Examples(a)
- ----------------------------------------- ----------------------------
Premier Growth Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 16
12b-1 fees .33% After 3 years $ 50
Other expenses (b) .24% After 5 years $ 86
---- After 10 years $187
Total fund
operating expenses 1.57%
====

<CAPTION>
Technology Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees (g) 1.04% After 1 year $ 17
12b-1 fees .30% After 3 years $ 53
Other expenses (b) .33% After 5 years $ 91
---- After 10 years $198
Total fund
operating expenses 1.67%
====

<CAPTION>
Quasar Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees (g) 1.16% After 1 year $ 17
12b-1 fees .22% After 3 years $ 53
Other expenses (b) .29% After 5 years $ 91
---- After 10 years $198
Total fund
operating expenses 1.67%
====

<CAPTION>
International Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .85% After 1 year $ 16
12b-1 fees .17% After 3 years $ 50
Other expenses (b) .56% After 5 years $ 86
---- After 10 years $188
Total fund
operating expenses (d) 1.58%
====

<CAPTION>
Worldwide Privatization Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 17
12b-1 fees .30% After 3 years $ 54
Other expenses (b) .42% After 5 years $ 93
---- After 10 years $203
Total fund
operating expenses 1.72%
====

<CAPTION>
New Europe Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees 1.06% After 1 year $ 21
12b-1 fees .30% After 3 years $ 64
Other expenses (b) .69% After 5 years $110
---- After 10 years $238
Total fund
operating expenses 2.05%
====

<CAPTION>
All-Asia Investment Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees After 1 year $ 21
(after waiver) (c) .65% After 3 years $ 65
12b-1 fees .30% After 5 years $111
Other expenses After 10 years $239
Administration fees
(after waiver) (d) 0.00%
Other operating expenses(b) 1.11%
----
Total fund
operating expenses (e) 2.06%
====

<CAPTION>
Global Small Cap Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees 1.00% After 1 year $ 24
12b-1 fees .30% After 3 years $ 75
Other expenses (b) 1.11% After 5 years $129
---- After 10 years $275
Total fund
operating expenses 2.41%
====
</TABLE>

- --------------------------------------------------------------------------------

Please refer to the footnotes on page 46.

45
<PAGE>

<TABLE>
<CAPTION>
Operating Expenses Examples(a)
- --------------------------------------- ----------------------------
Global Environment Fund Class A Class A
------- -------
<S> <C> <C> <C>
bb bb
Management fees 1.10% After 1 year $ 27
12b-1 fees .30% After 3 years $ 84
Other expenses (b) 1.29% After 5 years $142
---- After 10 years $302
Total fund
operating expenses 2.69%
====

<CAPTION>
Strategic Balanced Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees
(after waiver) (c) .09% After 1 year $ 14
12b-1 fees .30% After 3 years $ 44
Other expenses (b) 1.01% After 5 years $ 77
---- After 10 years $168
Total fund
operating expenses (e) 1.40%
====

<CAPTION>
Balanced Shares Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .63% After 1 year $ 15
12b-1 fees .24% After 3 years $ 46
Other expenses (b) .60% After 5 years $ 80
---- After 10 years $176
Total fund
operating expenses 1.47%
====

<CAPTION>
Income Builder Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .75% After 1 year $ 21
12b-1 fees .30% After 3 years $ 65
Other expenses (b) 1.04% After 5 years $112
---- After 10 years $242
Total fund
operating expenses 2.09%
====

<CAPTION>
Utility Income Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees
(after waiver) (c) 0.00% After 1 year $ 15
12b-1 fees .30% After 3 years $ 47
Other expenses (b) 1.20% After 5 years $ 82
---- After 10 years $179
Total fund
operating expenses (f) 1.50%
====

<CAPTION>
Growth and Income Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .49% After 1 year $ 9
12b-1 fees .22% After 3 years $ 29
Other expenses (b) .21% After 5 years $ 51
---- After 10 years $113
Total fund
operating expenses .92%
====

<CAPTION>
Real Estate Investment Fund Class A Class A
------- -------
<S> <C> <C> <C>
Management fees .90% After 1 year $ 18
12b-1 fees .30% After 3 years $ 56
Other expenses (b) .57% After 5 years $ 96
---- After 10 years $208
Total fund
operating expenses 1.77%
====
</TABLE>

- --------------------------------------------------------------------------------

(a) Advisor Class shares convert to Class A shares at net asset value and
without the imposition of any sales charge and accordingly the maximum
sales charge of 4.25% on most purchases of Class A shares for cash does not
apply.
(b) These expenses include a transfer agency fee payable to Alliance Fund
Services, Inc., an affiliate of Alliance.
(c) Net of voluntary fee waiver. In the absence of such waiver, management fees
would be .75% for Strategic Balanced Fund and Utility Income Fund and 1.00%
for All-Asia Investment Fund and 1.01% for International Fund.
International Fund's fee, absent the voluntary fee waiver, is calculated
based on average daily net assets. Maximum contractual rate, based on
quarter-end net assets, is 1.00%.
(d) Net voluntary fee waiver. Absent such fee waiver, administration fees would
have been .15% for the Fund's Class A shares. Reflects the fees payable by
All-Asia Investment Fund to Alliance pursuant to an administration
agreement.

(e) Net of voluntary fee waivers and expense reimbursements. Absent such
waivers and reimbursements, total fund operating expenses for Strategic
Balanced Fund would have been 2.08 for Class A shares. Total fund operating
expenses for All-Asia Investment Fund would have been 2.56% for Class A
shares annualized and total fund operating expenses for International Fund
would have been 1.74%, for Class A, annualized.
(f) Net of expense reimbursements. Absent expense reimbursements, total fund
operating expenses for Utility Income Fund would be 3.55% for Class A
shares.
(g) Calculated based on average daily net assets. Maximum contractual rate,
based on quarter-end net assets, is 1.00% for Quasar Fund and Technology
Fund.

46
<PAGE>

The purpose of the foregoing table is to assist the investor in understanding
the various costs and expenses that an investor in a Fund will bear directly or
indirectly. Long-term shareholders of Class A shares of a Fund may pay aggregate
sales charges totaling more than the economic equivalent of the maximum initial
sales charges permitted by the Conduct Rules of the National Association of
Securities Dealers, Inc. The Rule 12b-1 fee for Class A comprises a service fee
not exceeding .25% of the aggregate average daily net assets of the Fund
attributable to Class A and an asset-based sales charge equal to the remaining
portion of the Rule 12b-1 fee. "Management fees" for International Fund and
All-Asia Investment Fund and "Administration fees" for All-Asia Investment Fund
have been restated to reflect current voluntary fee waivers. "Other Expenses"
are based on estimated amounts for the Global Environment Fund's current fiscal
year. The Examples set forth above assume reinvestment of all dividends and
distributions and utilize a 5% annual rate of return as mandated by Commission
regulations.

The Examples should not be considered representative of past or future expenses;
actual expenses may be greater or less than those shown.

Financial Highlights. The tables on the following pages present, for each Fund,
per share income and capital changes for a Class A share outstanding throughout
each period indicated. Except as indicated below, the information in the tables
for Alliance Fund, Growth Fund, Premier Growth Fund, Strategic Balanced Fund,
Balanced Shares, Utility Income Fund, Worldwide Privatization Fund and Growth
and Income Fund has been audited by Price Waterhouse LLP, the independent
accountants for each Fund, and for All-Asia Investment Fund, Technology Fund,
Quasar Fund, International Fund, New Europe Fund, Global Small Cap Fund, Global
Environment Fund, Real Estate Investment Fund and Income Builder Fund by Ernst &
Young LLP, the independent auditors for each Fund. A report of Price Waterhouse
LLP or Ernst & Young LLP, as the case may be, on the information with respect to
each Fund, appears in the Fund's Statement of Additional Information. The
following information for each Fund should be read in conjunction with the
financial statements and related notes which are included in the Fund's
Statement of Additional Information.

Further information about a Fund's performance is contained in the Fund's annual
report to shareholders, which may be obtained without charge by contacting AFS
at the address or the "For Literature" telephone number shown on the cover of
this Prospectus.

47
<PAGE>

Growth Fund (i)
Class A
Year ended 10/31/97 ..... $ 34.91 $ (.10)(b) $ 10.17 $ 10.07 $ 0.00 $ (1.03)
Year ended 10/31/96 ..... 29.48 .05 6.20 6.25 (.19) (.63)
Year ended 10/31/95 ..... 25.08 .12 4.80 4.92 (.11) (.41)
5/1/94 to 10/31/94** .... 23.89 .09 1.10 1.19 0.00 0.00
Year ended 4/30/94 ...... 22.67 (.01)(c) 3.55 3.54 0.00 (2.32)
Year ended 4/30/93 ...... 20.31 .05(c) 3.68 3.73 (.14) (1.23)
Year ended 4/30/92 ...... 17.94 .29(c) 3.95 4.24 (.26) (1.61)
9/4/90++ to 4/30/91 ..... 13.61 .17(c) 4.22 4.39 (.06) 0.00

Premier Growth Fund
Class A
Year ended 11/30/97 ..... $ 17.98 $ (.10)(b) $ 5.20 $ 5.10 $ 0.00 $ (1.08)
Year ended 11/30/96 ..... 16.09 (.04)(b) 3.20 3.16 0.00 (1.27)
Year ended 11/30/95 ..... 11.41 (.03) 5.38 5.35 0.00 (.67)
Year ended 11/30/94 ..... 11.78 (.09) (.28) (.37) 0.00 0.00
Year ended 11/30/93 ..... 10.79 (.05) 1.05 1.00 (.01) 0.00
9/28/92+ to 11/30/92 .... 10.00 .01 .78 .79 0.00 0.00

Technology Fund
Class A
Year ended 11/30/97 ..... $ 51.15 $ (.51)(b) $ 4.22 $ 3.71 $ 0.00 $ (.42)
Year ended 11/30/96 ..... 46.64 .39 (b) 7.28 6.89 0.00 (2.38)
Year ended 11/30/95 ..... 31.98 (.30)(b) 18.13 17.83 0.00 (3.17)
1/1/94 to 11/30/94** .... 26.12 (.32) 6.18 5.86 0.00 0.00
Year ended 12/31/93 ..... 28.20 (.29) 6.39 6.10 0.00 (8.18)
Year ended 12/31/92 ..... 26.38 (.22)(b) 4.31 4.09 0.00 (2.27)
Year ended 12/31/91 ..... 19.44 (.02) 10.57 10.55 0.00 (3.61)
Year ended 12/31/90 ..... 21.57 (.03) (.56) (.59) 0.00 (1.54)
Year ended 12/31/89 ..... 20.35 0.00 1.22 1.22 0.00 0.00
Year ended 12/31/88 ..... 20.22 (.03) .16 .13 0.00 0.00

Quasar Fund
Class A
Year ended 9/30/97 ...... $ 27.92 $ (.24)(b) $ 6.80 $ 6.56 $ 0.00 $ (4.11)
Year ended 9/30/96 ...... 24.16 (.25) 8.82 8.57 0.00 (4.81)
Year ended 9/30/95 ...... 22.65 (.22)(b) 5.59 5.37 0.00 (3.86)
Year ended 9/30/94 ...... 24.43 (.60) (.36) (.96) 0.00 (.82)
Year ended 9/30/93 ...... 19.34 (.41) 6.38 5.97 0.00 (.88)
Year ended 9/30/92 ...... 21.27 (.24) (1.53) (1.77) 0.00 (.16)
Year ended 9/30/91 ...... 15.67 (.05) 5.71 5.66 (.06) 0.00
Year ended 9/30/90 ...... 24.84 .03(b) (7.18) (7.15) 0.00 (2.02)
Year ended 9/30/89 ...... 17.60 .02(b) 7.40 7.42 0.00 (.18)
Year ended 9/30/88 ...... 24.47 (.08) (2.08) (2.16) 0.00 (4.71)

International Fund
Class A
Year ended 6/30/97 ...... $ 18.32 $ .06(b) $ 1.51 $ 1.57 $ (.12) $ (1.08)
Year ended 6/30/96 ...... 16.81 .05(b) 2.51 2.56 0.00 (1.05)
Year ended 6/30/95 ...... 18.38 .04 .01 .05 0.00 (1.62)
Year ended 6/30/94 ...... 16.01 (.09) 3.02 2.93 0.00 (.56)
Year ended 6/30/93 ...... 14.98 (.01) 1.17 1.16 (.04) (.09)
Year ended 6/30/92 ...... 14.00 .01(b) 1.04 1.05 (.07) 0.00
Year ended 6/30/91 ...... 17.99 .05 (3.54) (3.49) (.03) (.47)
Year ended 6/30/90 ...... 17.24 .03 2.87 2.90 (.04) (2.11)
Year ended 6/30/89 ...... 16.09 .05 3.73 3.78 (.13) (2.50)
Year ended 6/30/88 ...... 23.70 .17 (1.22) (1.05) (.21) (6.35)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to footnotes on page 52.

48
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets Ratio of Net
Total Net Asset Investment At End Of Ratio Of Investment
Dividends Value Return Based Period Expenses Income (Loss) Average
And End Of on Net Asset (000's To Average To Average Portfolio Commission
Fiscal Year or Period Distributions Period Value (a) omitted) Net Assets Net Assets Turnover Rate Rate(k)
--------------------- ------------- --------- ----------- ----------- ----------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Fund
Class A
Year ended 11/30/97...... $ (1.08) $ 8.70 31.82% $ 1,201,435 1.03% (.29)% 158% $ 0.0571
Year ended 11/30/96...... (1.09) 7.71 16.49 999,067 1.04 .30 80 0.0646
Year ended 11/30/95...... (1.01) 7.72 37.87 945,309 1.08 .31 81 --
1/1/94 to 11/30/94**..... 0.00 6.63 (3.21) 760,679 1.05* .21* 63 --
Year ended 12/31/93...... (.78) 6.85 14.26 831,814 1.01 .27 66 --
Year ended 12/31/92...... (.53) 6.68 14.70 794,733 .81 .79 58 --
Year ended 12/31/91...... (.70) 6.29 33.91 748,226 .83 1.03 74 --
Year ended 12/31/90...... (1.42) 5.22 (4.36) 620,374 .81 1.56 71 --
Year ended 12/31/89...... (.04) 6.87 23.42 837,429 .75 1.79 81 --
Year ended 12/31/88...... (.43) 5.60 17.10 760,619 .82 1.38 65 --

Growth Fund (i)
Class A
Year ended 10/31/97...... $ (1.03) $ 43.95 29.54% $ 783,110 1.26%(l) (.25)% 48% $ 0.0562
Year ended 10/31/96...... (.82) 34.91 21.65 499,459 1.30 .15 46 0.0584
Year ended 10/31/95...... (.52) 29.48 20.18 285,161 1.35 .56 61 --
5/1/94 to 10/31/94**..... 0.00 25.08 4.98 167,800 1.35* .86* 24 --
Year ended 4/30/94....... (2.32) 23.89 15.66 102,406 1.40 (f) .32 87 --
Year ended 4/30/93....... (1.37) 22.67 18.89 13,889 1.40 (f) .20 124 --
Year ended 4/30/92....... (1.87) 20.31 23.61 8,228 1.40 1.44 137 --
9/4/90++ to 4/30/91...... (.06) 17.94 32.40 713 1.40* 1.99* 130 --

Premier Growth Fund
Class A
Year ended 11/30/97...... $ (1.08) $ 22.00 30.46% $ 373,099 1.57% (.52)% 76% $ 0.0594
Year ended 11/30/96...... (1.27) 17.98 21.52 172,870 1.65 (.27) 95 0.0651
Year ended 11/30/95...... (.67) 16.09 49.95 72,366 1.75 (.28) 114 --
Year ended 11/30/94...... 0.00 11.41 (3.14) 35,146 1.96 (.67) 98 --
Year ended 11/30/93...... (.01) 11.78 9.26 40,415 2.18 (.61) 68 --
9/28/92+ to 11/30/92..... 0.00 10.79 7.90 4,893 2.17* .91* 0 --

Technology Fund
Class A
Year ended 11/30/97...... $ (.42) $ 54.44 7.32% $ 624,716 1.67%(l) (.97)% 51% $ 0.0564
Year ended 11/30/96...... (2.38) 51.15 16.05 594,861 1.74 (.87) 30 0.0612
Year ended 11/30/95...... (3.17) 46.64 61.93 398,262 1.75 (.77) 55 --
1/1/94 to 11/30/94**..... 0.00 31.98 22.43 202,929 1.66* (1.22)* 55 --
Year ended 12/31/93...... (8.18) 26.12 21.63 173,732 1.73 (1.32) 64 --
Year ended 12/31/92...... (2.27) 28.20 15.50 173,566 1.61 (.90) 73 --
Year ended 12/31/91...... (3.61) 26.38 54.24 191,693 1.71 (.20) 134 --
Year ended 12/31/90...... (1.54) 19.44 (3.08) 131,843 1.77 (.18) 147 --
Year ended 12/31/89...... 0.00 21.57 6.00 141,730 1.66 .02 139 --
Year ended 12/31/88...... 0.00 20.35 0.64 169,856 1.42 (.16) 139 --

Quasar Fund
Class A
Year ended 9/30/97....... $ (4.11) $ 30.37 27.81% $ 402,081 1.67% (.91)% 135% $ 0.0536
Year ended 9/30/96....... (4.81) 27.92 42.42 229,798 1.79 (1.11) 168 0.0596
Year ended 9/30/95....... (3.86) 24.16 30.73 146,663 1.83 (1.06) 160 --
Year ended 9/30/94....... (.82) 22.65 (4.05) 155,470 1.67 (1.15) 110 --
Year ended 9/30/93....... (.88) 24.43 31.58 228,874 1.65 (1.00) 102 --
Year ended 9/30/92....... (.16) 19.34 (8.34) 252,140 1.62 (.89) 128 --
Year ended 9/30/91....... (.06) 21.27 36.28 333,806 1.64 (.22) 118 --
Year ended 9/30/90....... (2.02) 15.67 (30.81) 251,102 1.66 .16 90 --
Year ended 9/30/89....... (.18) 24.84 42.68 263,099 1.73 .10 90 --
Year ended 9/30/88....... (4.71) 17.60 (8.61) 90,713 1.28 (.40) 58 --

International Fund
Class A
Year ended 6/30/97....... $ (1.20) $ 18.69 9.30% $ 190,173 1.74% .31% 94% $ 0.0363
Year ended 6/30/96....... (1.05) 18.32 15.83 196,261 1.72 .31 78 --
Year ended 6/30/95....... (1.62) 16.81 .59 165,584 1.73 .26 119 --
Year ended 6/30/94....... (.56) 18.38 18.68 201,916 1.90 (.50) 97 --
Year ended 6/30/93....... (.13) 16.01 7.86 161,048 1.88 (.14) 94 --
Year ended 6/30/92....... (.07) 14.98 7.52 179,807 1.82 .07 72 --
Year ended 6/30/91....... (.50) 14.00 (19.34) 214,442 1.73 .37 71 --
Year ended 6/30/90....... (2.15) 17.99 16.98 265,999 1.45 .33 37 --
Year ended 6/30/89....... (2.63) 17.24 27.65 166,003 1.41 .39 87 --
Year ended 6/30/88....... (6.56) 16.09 (4.20) 132,319 1.41 .84 55 --
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

49
<PAGE>

<TABLE>
<CAPTION>
Net Net Net Distributions
Asset Realized and Increase In Excess
Value Unrealized (Decrease) In Dividends From Of Net Distributions
Beginning Of Net Investment Gain(Loss)On Net Asset Value Net Investment Investment From Net
Fiscal Year or Period Period Income (Loss) Investments From Operations Income Income Realized Gains
--------------------- ------------- -------------- ------------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Worldwide Privatization Fund
Class A
Year ended 6/30/97 ...... $ 12.13 $ .15(b) $ 2.55 $ 2.70 $ (.15) $ 0.00 $ (1.42)
Year ended 6/30/96 ...... 10.18 .10(b) 1.85 1.95 0.00 0.00 0.00
Year ended 6/30/95 ...... 9.75 .06 .37 .43 0.00 0.00 0.00
6/2/94+ to 6/30/94 ...... 10.00 .01 (.26) (.25) 0.00 0.00 0.00

New Europe Fund
Class A
Year ended 7/31/97 ...... $ 15.84 $ .07(b) $ 4.20 $ 4.27 $ (.15) $ (.03) $ (1.32)
Year ended 7/31/96 ...... 15.11 .18 1.02 1.20 0.00 0.00 (.47)
Year ended 7/31/95 ...... 12.66 .04 2.50 2.54 (.09) 0.00 0.00
Period ended 7/31/94** .. 12.53 .09 .04 .13 0.00 0.00 0.00
Year ended 2/28/94 ...... 9.37 .02(b) 3.14 3.16 0.00 0.00 0.00
Year ended 2/28/93 ...... 9.81 .04 (.33) (.29) (.15) 0.00 0.00
Year ended 2/29/92 ...... 9.76 .02(b) .05 .07 (.02) 0.00 0.00
4/2/90+ to 2/28/91 ...... 11.11(e) .26 (.91) (.65) (.26) 0.00 (.44)

All-Asia Investment Fund
Class A
Year ended 10/31/97 ..... $ 11.04 $ (.21)(b)(c) $ (2.95) $ (3.16) $ 0.00 $ 0.00 $ (.34)
Year ended 10/31/96 ..... 10.45 (.21)(b)(c) .88 .67 0.00 0.00 (.08)
11/28/94+ to 10/31/95 ... 10.00 (.19)(c) .64 .45 0.00 0.00 0.00

Global Small Cap Fund
Class A
Year ended 7/31/97 ...... $ 11.61 $ (.15)(b) $ 2.97 $ 2.82 $ 0.00 $ 0.00 $ (1.56)
Year ended 7/31/96 ...... 10.38 (.14)(b) 1.90 1.76 0.00 0.00 (.53)
Year ended 7/31/95 ...... 11.08 (.09) 1.50 1.41 0.00 0.00 (2.11)(j)

Period ended 7/31/94** .. 11.24 (.15)(b) (.01) (.16) 0.00 0.00 0.00
Year ended 9/30/93 ...... 9.33 (.15) 2.49 2.34 0.00 0.00 (.43)
Year ended 9/30/92 ...... 10.55 (.16) (1.03) (1.19) 0.00 0.00 (.03)
Year ended 9/30/91 ...... 8.26 (.06) 2.35 2.29 0.00 0.00 0.00
Year ended 9/30/90 ...... 15.54 (.05)(b) (4.12) (4.17) 0.00 0.00 (3.11)
Year ended 9/30/89 ...... 11.41 (.03) 4.25 4.22 0.00 0.00 (.09)
Year ended 9/30/88 ...... 15.07 (.05) (1.83) (1.88) 0.00 0.00 (1.78)

Global Environment Fund (n)
Class A
Year ended 10/31/97 ..... $ 16.48 $ (.23)(b) $ 3.65 $ 3.42 $ 0.00 $ 0.00 $ (1.13)
Year ended 10/31/96 ..... 12.37 (.13) 4.26 4.13 (.02) 0.00 0.00
Year ended 10/31/95 ..... 11.74 .03 .60 .63 0.00 0.00 0.00
Year ended 10/31/94 ..... 10.97 0.00 .77 .77 0.00 0.00 0.00
Year ended 10/31/93 ..... 10.78 .01 .18 .19 0.00 0.00 0.00
Year ended 10/31/92 ..... 13.12 .01 (2.17) (2.16) (.10) 0.00 (.08)
Year ended 10/31/91 ..... 12.46 .13 .87 1.00 (.25) 0.00 (.09)
1/1/90+ to 10/31/90 ..... 13.83 .20 (1.57) (1.37) 0.00 0.00 0.00

Strategic Balanced Fund (i)
Class A
Year ended 7/31/97 ...... $ 18.48 $ .47(b)(c) $ 3.56 $ 4.03 $ (.39) $ 0.00 $ (2.33)
Year ended 7/31/96 ...... 17.98 .35(b)(c) 1.08 1.43 (.32) 0.00 (.61)
Year ended 7/31/95 ...... 16.26 .34(c) 1.64 1.98 (.22) 0.00 (.04)
Period ended 7/31/94** .. 16.46 .07(c) (.27) (.20) 0.00 0.00 0.00
Year ended 4/30/94 ...... 16.97 .16(c) .74 .90 (.24) 0.00 (1.17)
Year ended 4/30/93 ...... 17.06 .39(c) .59 .98 (.42) 0.00 (.65)
Year ended 4/30/92 ...... 14.48 .27(c) 2.80 3.07 (.17) 0.00 (.32)
9/4/90++ to 4/30/91 ..... 12.51 .34(c) 1.66 2.00 (.03) 0.00 0.00

Balanced Shares
Class A
Year ended 7/31/97 ...... $ 14.01 $ .31(b) $ 3.97 $ 4.28 $ (.32) $ 0.00 $ (.18)
Year ended 7/31/96 ...... 15.08 .37 .45 .82 (.41) 0.00 (1.48)
Year ended 7/31/95 ...... 13.38 .46 1.62 2.08 (.36) 0.00 (.02)
Period ended 7/31/94** .. 14.40 .29 (.74) (.45) (.28) 0.00 (.29)
Year ended 9/30/93 ...... 13.20 .34 1.29 1.63 (.43) 0.00 0.00
Year ended 9/30/92 ...... 12.64 .44 .57 1.01 (.45) 0.00 0.00
Year ended 9/30/91 ...... 10.41 .46 2.17 2.63 (.40) 0.00 0.00
Year ended 9/30/90 ...... 14.13 .45 (2.14) (1.69) (.40) 0.00 (1.63)
Year ended 9/30/89 ...... 12.53 .42 2.18 2.60 (.46) 0.00 (.54)
Year ended 9/30/88 ...... 16.33 .46 (1.07) (.61) (.44) 0.00 (2.75)

Income Builder Fund (h)
Class A
Year ended 10/31/97 ..... $ 11.57 $ .50(b) $ 1.62 $ 2.12 $ (.51) $ 0.00 $ (.61)
Year ended 10/31/96 ..... 10.70 .56(b) .98 1.54 (.55) 0.00 (.12)
Year ended 10/31/95 ..... 9.69 .93(b) .59 1.52 (.51) 0.00 0.00
3/25/94++ to 10/31/94 ... 10.00 .96 (1.02) (.06) (.05)(g) 0.00 (.20)
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

Please refer to the footnotes on page 52.

50
<PAGE>

New Europe Fund
Class A
Year ended 7/31/97 ...... $ (1.50) $ 18.61 28.78% $ 78,578 2.05%(l) .40% 89% $0.0569
Year ended 7/31/96 ...... (.47) 15.84 8.20 74,026 2.14 1.10 69 --
Year ended 7/31/95 ...... (.09) 15.11 20.22 86,112 2.09 .37 74 --
Period ended 7/31/94** .. 0.00 12.66 1.04 86,739 2.06* 1.85* 35 --
Year ended 2/28/94 ...... 0.00 12.53 33.73 90,372 2.30 .17 94 --
Year ended 2/28/93 ...... (.15) 9.37 (2.82) 79,285 2.25 .47 125 --
Year ended 2/29/92 ...... (.02) 9.81 .74 108,510 2.24 .16 34 --
4/2/90+ to 2/28/91 ...... (.70) 9.76 (5.63) 188,016 1.52* 2.71* 48 --

All-Asia Investment Fund
Class A
Year ended 10/31/97 ..... $ (.34) $ 7.54 (29.61)% $ 5,916 3.45%(f) (1.97)% 70% $0.0248
Year ended 10/31/96 ..... (.08) 11.04 6.43 12,284 3.37(f) (1.75) 66 0.0280
11/28/94+ to 10/31/95 ... 0.00 10.45 4.50 2,870 4.42(f)* (1.87)* 90 --

Global Small Cap Fund
Class A
Year ended 7/31/97 ...... $ (1.56) $ 12.87 26.47% $ 85,217 2.41%(l) (1.25)% 129% $0.0364
Year ended 7/31/96 ...... (.53) 11.61 17.46 68,623 2.51 (1.22) 139 --
Year ended 7/31/95 ...... (2.11) 10.38 16.62 60,057 2.54(f) (1.17) 128 --
Period ended 7/31/94** .. 0.00 11.08 (1.42) 61,372 2.42* (1.26)* 78 --
Year ended 9/30/93 ...... (.43) 11.24 25.83 65,713 2.53 (1.13) 97 --
Year ended 9/30/92 ...... (.03) 9.33 (11.30) 58,491 2.34 (.85) 108 --
Year ended 9/30/91 ...... 0.00 10.55 27.72 84,370 2.29 (.55) 104 --
Year ended 9/30/90 ...... (3.11) 8.26 (31.90) 68,316 1.73 (.46) 89 --
Year ended 9/30/89 ...... (.09) 15.54 37.34 113,583 1.56 (.17) 106 --
Year ended 9/30/88 ...... (1.78) 11.41 (8.11) 90,071 1.54 (.50) 74 --

Global Environment Fund (n)
Class A
Year ended 10/31/97 ..... $ (1.13) $ 18.77 23.51% $ 52,378 2.39% (1.35)% 145% $0.0506
Year ended 10/31/96 ..... (.02) 16.48 33.48 100,271 1.60 (.85) 268 0.0313
Year ended 10/31/95 ..... 0.00 12.37 5.37 85,416 1.57 .21 109 --
Year ended 10/31/94 ..... 0.00 11.74 7.02 81,102 1.67 (.04) 42 --
Year ended 10/31/93 ..... 0.00 10.97 1.76 75,805 1.62 .15 25 --
Year ended 10/31/92 ..... (.18) 10.78 (16.59) 74,442 1.63 .10 41 --
Year ended 10/31/91 ..... (.34) 13.12 8.66 90,612 1.49 .95 32 --
1/1/90+ to 10/31/90 ..... 0.00 12.46 (10.68) 86,041 1.72* 3.95* 4 --

Strategic Balanced Fund (i)
Class A
Year ended 7/31/97 ...... $ (2.72) $ 19.79 23.90% $ 20,312 1.41%(f)(l) 2.50% 170% $0.0395
Year ended 7/31/96 ...... (.93) 18.48 8.05 18,329 1.40(f) 1.78 173 --
Year ended 7/31/95 ...... (.26) 17.98 12.40 10,952 1.40(f) 2.07 172 --
Period ended 7/31/94** .. 0.00 16.26 (1.22) 9,640 1.40*(f) 1.63* 21 --
Year ended 4/30/94 ...... (1.41) 16.46 5.06 9,822 1.40(f) 1.67 139 --
Year ended 4/30/93 ...... (1.07) 16.97 5.85 8,637 1.40(f) 2.29 98 --
Year ended 4/30/92 ...... (.49) 17.06 20.96 6,843 1.40 1.92 103 --
9/4/90++ to 4/30/91 ..... (.03) 14.48 16.00 443 1.40* 3.54* 137 --

Balanced Shares
Class A
Year ended 7/31/97 ...... $ (2.12) $ 16.17 33.46% $ 115,500 1.47%(m) 2.11% 207% $0.0552
Year ended 7/31/96 ...... (1.89) 14.01 5.23 102,567 1.38 2.41 227 --
Year ended 7/31/95 ...... (.38) 15.08 15.99 122,033 1.32 3.12 179 --
Period ended 7/31/94** .. (.57) 13.38 (3.21) 157,637 1.27* 2.50* 116 --
Year ended 9/30/93 ...... (.43) 14.40 12.52 172,484 1.35 2.50 188 --
Year ended 9/30/92 ...... (.45) 13.20 8.14 143,883 1.40 3.26 204 --
Year ended 9/30/91 ...... (.40) 12.64 25.52 154,230 1.44 3.75 70 --
Year ended 9/30/90 ...... (2.03) 10.41 (13.12) 140,913 1.36 4.01 169 --
Year ended 9/30/89 ...... (1.00) 14.13 22.27 159,290 1.42 3.29 132 --
Year ended 9/30/88 ...... (3.19) 12.53 (1.10) 111,515 1.42 3.74 190 --

Income Builder Fund (h)
Class A
Year ended 10/31/97 ..... $ (1.12) $ 12.57 19.36% $ 2,367 2.09% 4.18% 159% $0.0513
Year ended 10/31/96 ..... (.67) 11.57 14.82 2,056 2.20 4.92 108 0.0600
Year ended 10/31/95 ..... (.51) 10.70 16.22 1,398 2.38 5.44 92 --
3/25/94++ to 10/31/94 ... (.25) 9.69 (.54) 600 2.52* 6.11* 126 --
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

51
<PAGE>

<TABLE>
<CAPTION>
Net Net Net Distributions
Asset Realized and Increase In Excess
Value Unrealized (Decrease) In Dividends From Of Net Distributions
Beginning Of Net Investment Gain(Loss)On Net Asset Value Net Investment Investment From Net
Fiscal Year or Period Period Income (Loss) Investments From Operations Income Income Realized Gains
--------------------- ------------- -------------- ------------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Utility Income Fund
Class A
Year ended 11/30/97 ..... $ 10.59 $ .32(b)(c) $ 2.04 $ 2.36 $ (.34) $ 0.00 $ (.13)
Year ended 11/30/96 ..... 10.22 .18(b)(c) .65 .83 (.46) 0.00 0.00
Year ended 11/30/95 ..... 8.97 .27(c) 1.43 1.70 (.45) 0.00 0.00
Year ended 11/30/94 ..... 9.92 .42(c) (.89) (.47) (.48) 0.00 0.00
10/18/93+ to 11/30/93 ... 10.00 .02(c) (.10) (.08) 0.00 0.00 0.00

Growth and Income Fund
Class A
Year ended 10/31/97 ..... $ 3.00 $ .04(b) $ .87 $ .91 $ (.05) $ 0.00 $ (.38)
Year ended 10/31/96 ..... 2.71 .05 .50 .55 (.05) 0.00 (.21)
Year ended 10/31/95 ..... 2.35 .02 .52 .54 (.06) 0.00 (.12)
Year ended 10/31/94 ..... 2.61 .06 (.08) (.02) (.06) 0.00 (.18)
Year ended 10/31/93 ..... 2.48 .06 .29 .35 (.06) 0.00 (.16)
Year ended 10/31/92 ..... 2.52 .06 .11 .17 (.06) 0.00 (.15)
Year ended 10/31/91 ..... 2.28 .07 .56 .63 (.09) 0.00 (.30)
Year ended 10/31/90 ..... 3.02 .09 (.30) (.21) (.10) 0.00 (.43)
Year ended 10/31/89 ..... 3.05 .10 .43 .53 (.08) 0.00 (.48)
Year ended 10/31/88 ..... 3.48 .10 .33 .43 (.08) 0.00 (.78)

Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ..... $ 10.00 $ .30(b) $ 2.88 $ 3.18 $ (.38)(m) $ 0.00 $ 0.00
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>
+ Commencement of operations.
++ Commencement of distribution.
* Annualized.
** Reflects a change in fiscal year end.
(a) 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 the net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment returns. Total investment returns calculated for a period
of less than one year is not annualized.
(b) Based on average shares outstanding.
(c) Net of fee waivers and expense reimbursements.
(d) Adjusted for a 200% stock dividend paid to shareholders of record on
January 15, 1988.
(e) Net of offering costs of ($.05).

(f) Net of expenses assumed and/or waived/reimbursed. If the following Funds
had borne all expenses in their most recent five fiscal years, their
expense ratios, without giving effect to the expense offset arrangement
described in (l) below, would have been as follows:

<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
All-Asia Investment Fund
Class A -- -- 10.57%# 3.61% 3.57%
Growth Fund
Class A 1.84% 1.46% -- --
Global Small Cap Fund
Class A -- -- 2.61% --
Strategic Balanced Fund
Class A 1.85% 1.70%1 1.81% 1.76% 2.06%
1.94%#2
Utility Income Fund
Class A 145.63%# 13.72% 4.86%# 3.38% 3.55%
</TABLE>
- ------------
# annualized
1. For the period ended April 30, 1994
2. For the period ended July 31, 1994
For the expense ratios of the Funds in years prior to fiscal year 1993,
assuming the Funds had borne all expenses, please see the Financial
Statements in each Fund's Statement of Additional Information.
(g) "Dividends from Net Investment Income" includes a return of capital. Income
Builder Fund had a return of capital with respect to Class A shares, for
the period ended October 31, 1994, of $(.01).
(h) On March 25, 1994, all existing shares of Income Builder Fund, previously
known as Alliance Multi-Market Income and Growth Trust, were converted into
Class C shares.
(i) Prior to July 22, 1993, Equitable Capital Management Corporation
("Equitable Capital") served as the investment adviser to the predecessor
to The Alliance Portfolios, of which Growth Fund and Strategic Balanced
Fund are series. On July 22, 1993, Alliance acquired the business and
substantially all assets of Equitable Capital and became investment adviser
to the Funds.
(j) "Distributions from Net Realized Gains" includes a return of capital.
Global Small Cap Fund had a return of capital with respect to Class A
shares, for the year ended July 31, 1995, of $(.12).
(k) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are changed.

(l) Amounts do not reflect the impact of expense offset arrangements with the
transfer agent. Taking into account such expense offset arrangements, the
ratios of expenses to average net assets, assuming the assumption and/or
waiver/reimbursement of expenses described in (f) above, would have been as
follows:

<TABLE>
<CAPTION>
1997 1997
---- ----
<S> <C> <C> <C>
International Fund Growth Fund
Class A 1.73% Class A 1.25%
Global Small Cap Fund Technology Fund
Class A 2.38% Class A 1.66%
Strategic Balanced Fund
Class A 1.40%
New Europe Fund
Class A 2.04%
Balanced Shares
Class A 1.46%
Growth and Income
Class A .91%
</TABLE>

(m) Distributions from net investment income include a tax return of capital of
$0.08.
(n) The Global Environment Fund operated as a closed-end investment company
through October 3, 1997 when it converted to an open-end investment company
and all shares of its common stock then outstanding were reclassified as
Class A shares.

52
<PAGE>

<TABLE>
<CAPTION>
Total Net Assets Ratio of Net
Total Net Asset Investment At End Of Ratio Of Investment
Dividends Value Return Based Period Expenses Income (Loss) Average
And End Of on Net Asset (000's To Average To Average Portfolio Commission
Fiscal Year or Period Distributions Period Value(a) omitted) Net Assets Net Assets Turnover Rate Rate(k)
--------------------- ------------- --------- ------------ ---------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Utility Income Fund
Class A
Year ended 11/30/97 ..... $ (.47) $ 12.48 23.10% $ 4,117 1.50%(f) 2.89% 37% $ 0.0442
Year ended 11/30/96 ..... (.46) 10.59 8.47 3,294 1.50 (f) 1.67 98 0.0536
Year ended 11/30/95 ..... (.45) 10.22 19.58 2,748 1.50 (f) 2.48 162 --
Year ended 11/30/94 ..... (.48) 8.97 (4.86) 1,068 1.50 (f) 4.13 30 --
10/18/93+ to 11/30/93 ... 0.00 9.92 (.80) 229 1.50*(f) 2.35* 11 --

Growth and Income Fund
Class A
Year ended 10/31/97 ..... $ (.43) $ 3.48 33.28% $ 787,566 .92%(l) 1.39% 88% $ 0.0589
Year ended 10/31/96 ..... (.26) 3.00 21.51 553,151 .97 1.73 88 0.0625
Year ended 10/31/95 ..... (.18) 2.71 24.21 458,158 1.05 1.88 142 --
Year ended 10/31/94 ..... (.24) 2.35 (.67) 414,386 1.03 2.36 68 --
Year ended 10/31/93 ..... (.22) 2.61 14.98 459,372 1.07 2.38 91 --
Year ended 10/31/92 ..... (.21) 2.48 7.23 417,018 1.09 2.63 104 --
Year ended 10/31/91 ..... (.39) 2.52 31.03 409,597 1.14 2.74 84 --
Year ended 10/31/90 ..... (.53) 2.28 (8.55) 314,670 1.09 3.40 76 --
Year ended 10/31/89 ..... (.56) 3.02 21.59 377,168 1.08 3.49 79 --
Year ended 10/31/88 ..... (.86) 3.05 16.45 350,510 1.09 3.09 66 --

Real Estate Investment Fund
Class A
10/1/96+ to 8/31/97 ..... $ (.38) $ 12.80 32.24% $ 37,638 1.77%(l) 2.73%* 20% $ 0.0518
</TABLE>

53
<PAGE>

- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------

PORTFOLIO TRANSACTIONS

ORGANIZATION

Each of the following Funds is a Maryland corporation organized in the year
indicated: The Alliance Fund, Inc. (1938), Alliance Balanced Shares, Inc.
(1932), Alliance Premier Growth Fund, Inc. (1992), Alliance Technology Fund,
Inc. (1980), Alliance Quasar Fund, Inc. (1968), Alliance Worldwide Privatization
Fund, Inc. (1994), Alliance New Europe Fund, Inc. (1990), Alliance All-Asia
Investment Fund, Inc. (1994), Alliance Global Small Cap Fund, Inc. (1966),
Alliance Global Environment Fund, Inc. (1990), Alliance Income Builder Fund,
Inc. (1991), Alliance Utility Income Fund, Inc. (1993), Alliance Growth and
Income Fund, Inc. (1932) and Real Estate Investment Fund, Inc. (1996). Each of
the following Funds is either a Massachusetts business trust or a series of a
Massachusetts business trust organized in the year indicated: Alliance Growth
Fund and Alliance Strategic Balanced Fund (each a series of The Alliance
Portfolios) (1987), and Alliance International Fund (1980). Prior to August 2,
1993, The Alliance Portfolios was known as The Equitable Funds, Growth Fund was
known as The Equitable Growth Fund and Strategic Balanced Fund was known as The
Equitable Balanced Fund. Prior to March 22, 1994, Income Builder Fund was known
as Alliance Multi-Market Income and Growth Trust, Inc.

A shareholder in a Fund will be entitled to share pro rata with other holders of
the same class of shares all dividends and distributions arising from the Fund's
assets and, upon redeeming shares, will receive the then current net asset value
of the Fund represented by the redeemed shares. The Funds are empowered to
establish, without shareholder approval, additional portfolios, which may have
different investment objectives, and additional classes of shares. If an
additional portfolio or class were established in a Fund, each share of the
portfolio or class would normally be entitled to one vote for all purposes.
Generally, shares of each portfolio and class would vote together as a single
class on matters, such as the election of Directors, that affect each portfolio
and class in substantially the same manner. Advisor Class, Class A, Class B and
Class C shares have identical voting, dividend, liquidation and other rights,
except that each class bears its own transfer agency expenses, each of Class A,
Class B and Class C shares bears its own distribution expenses and Class B and
Advisor Class shares convert to Class A shares under certain circumstances. Each
class of shares votes separately with respect to matters for which separate
class voting is appropriate under applicable law. Shares are freely
transferable, are entitled to dividends as determined by the Directors and, in
liquidation of a Fund, are entitled to receive the net assets of the Fund. Since
this Prospectus sets forth information about all the Funds, it is theoretically
possible that a Fund might be liable for any materially inaccurate or incomplete
disclosure in this Prospectus concerning another Fund. Based on the advice of
counsel, however, the Funds believe that the potential liability of each Fund
with respect to the disclosure in this Prospectus extends only to the disclosure
relating to that Fund. Certain additional matters relating to a Fund's
organization are discussed in its Statement of Additional Information.

REGISTRAR, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

PRINCIPAL UNDERWRITER

AFD, an indirect wholly-owned subsidiary of Alliance, located at 1345 Avenue of
the Americas, New York, New York 10105, is the principal underwriter of shares
of the Funds.

PERFORMANCE INFORMATION

From time to time, the Funds advertise their "total return," which is computed
separately for each class of shares, including Advisor Class shares. Such
advertisements disclose a Fund's average annual compounded total return for the
periods prescribed by the Commission. A Fund's total return for each such period
is computed by finding, through the use of a formula prescribed by the
Commission, the average annual compounded rate of return over the period that
would equate an assumed initial amount invested to the value of the investment
at the end of the period. For purposes of computing total return, income
dividends and capital gains distributions paid on shares of a Fund are assumed
to have been reinvested when paid and the maximum sales charges applicable to
purchases and redemptions of a Fund's shares are assumed to have been paid.

Balanced Shares, Growth and Income Fund, Income Builder Fund, Real Estate
Investment Fund and Utility Income Fund may also advertise their "yield," which
is also computed separately for each class of shares, including Advisor Class
shares. A Fund's yield for any 30-day (or one-month) period is computed by
dividing the net investment income per share earned during such period by the
maximum public offering price per share on the last day of the period, and then
annualizing such 30-day (or one-month) yield in accordance with a formula
prescribed by the Commission which provides for compounding on a semi-annual
basis.

54
<PAGE>

Balanced Shares, Income Builder Fund, Utility Income Fund, Real Estate
Investment Fund and Growth and Income Fund may also state in sales literature an
"actual distribution rate" for each class which is computed in the same manner
as yield except that actual income dividends declared per share during the
period in question are substituted for net investment income per share. The
actual distribution rate is computed separately for each class of shares,
including Advisor Class shares.

ADDITIONAL INFORMATION

This prospectus does not constitute an offering in any state in which such
offering may not lawfully be made.

55
<PAGE>

================================================================================
Alliance Stock Funds
Subscription Application
- - Advisor Class
================================================================================

The Alliance Fund
Growth Fund
Premier Growth Fund
Technology Fund
Quasar Fund
International Fund
Worldwide Privatization Fund
New Europe Fund
All-Asia Investment Fund
Global Small Cap Fund

Global Environment Fund
Strategic Balanced Fund
Balanced Shares
Income Builder Fund
Real Estate Investment Fund
Utility Income Fund
Growth & Income Fund

To Open Your New Alliance Account...

Please complete the application and mail
it to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

For certified or overnight deliveries, send to:

Alliance Fund Services, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094

Section 1 Your Account Registration (Required)

Complete one of the available choices. To ensure proper tax reporting to the
IRS:

-- Individuals, Joint Tenants, Transfer on Death and Gift/Transfer to a
Minor:

o Indicate your name(s) exactly as it appears on your social
security card.

-- Transfer on Death:

o Ensure that your state participates

-- Trust/Other:

o Indicate the name of the entity exactly as it appeared on the
notice you received from the IRS when your Employer
Identification number was assigned.

Section 2 Your Address (Required) Complete in full.

-- Non-Resident Alien:

o Indicate your permanent country of residence.

Section 3 Your Initial Investment (Required)

For each Fund in which you are investing: (1) Write the three digit Fund number
in the column titled 'Indicate three digit Fund number located below'.
(2) Write the dollar amount of your initial purchase in the column titled
'Indicate Dollar Amount'.
(3) Check off a distribution
<PAGE>

Section 4 Your Shareholder Options (Complete only those options you want)

A. Automatic Investment Plans (AIP) - You can make periodic investments into any
of your Alliance Funds in one of three ways. First, by a periodic withdrawal
($25 minimum) directly from your bank account and invested into an Alliance
Fund. Second, you can direct your distributions (dividends and capital gains)
from one Alliance Fund into another Fund. Or third, you can automatically
exchange monthly ($25 minimum) shares of one Alliance Fund for shares of another
Fund. To elect one of these options, complete the appropriate portion of Section
4A & 4D. If more than one dividend direction or monthly exchange is desired,
please call our Literature Center to obtain a Shareholder Account Services
Options Form for completion.

B. Telephone Transactions via EFT - Complete this option if you would like to be
able to transact via telephone between your fund account and your bank account.

C. Systematic Withdrawal Plans (SWP) - Complete this option if you wish to
periodically redeem dollars from one of your fund accounts. Payments can be made
via Electronic Funds Transfer (EFT) to your bank account or by check.

Section 5 Shareholder Authorization (Required)
All owners must sign. If it is a custodial, corporate, or trust account, the
custodian, an authorized officer, or the trustee respectively must sign.

If We Can Assist You In Any Way, Please Do Not Hesitate To Call Us At:
(800)221-5672.

The Alliance Stock Funds Subscription Application - Advisor Class

|_| Individual Account { |_| Male |_| Female } --or-- Joint Account --or--

|_| Transfer On Death { |_| Male |_| Female } --or-- Gift/Transfer to a Minor

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Owner or Custodian (First Name) (MI) (Last Name)

|_|_|_|-|_|_|-|_|_|_|_| If Uniform Gift/Transfer
Social Security Number of Owner or Minor (required to open account) to Minor Account:
|_| |_| Minor's State of Residence

If Joint Tenants Account: *The Account will be registered
"Joint Tenants with right of Survivorship" unless you indicate
otherwise below:

|_| In Common |_| By Entirety |_| Community Property

|_| Trust --or-- |_| Corporation --or-- |_| Other_____________________________

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trustee if applicable (First Name) (MI) (Last Name)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trust or Corporation or Other Entity

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trust or Corporation or Other Entity continued

|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|
Trust Dated (MM,DD,YYYY) Tax ID Number (required to open account)

|_| Employer ID Number --or-- |_| Social Security
Number

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Street Number Street Name

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_| |_|_|_|_|_|
City State Zip code

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| |_|_|_| - |_|_|_| - |_|_|_|_|
If Non-U.S., Specify Country Daytime Phone Number

|_| U.S. Citizen |_| Resident Alien |_| Non-Resident Alien
</TABLE>

Alliance Capital[LOGO](R)

1
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
3. Your Initial Investment
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
I hereby subscribe for shares of the following Alliance Stock Fund(s) and elect distribution options as indicated.

Dividend and Capital Gain Distribution Options:

D Direct my distributions to another Alliance Fund. Complete the
- appropriate portion of Section 4A to direct your distributions
(dividends and capital gains) to another Alliance Fund.

- ------------- |_|_|_| $ R C D R C D

|_|_|_| $ R C D R C D

==========================
Total Investment $
==========================

=======
Advisor
Class
=======

Domestic The Alliance Fund 444
Growth Fund 431
Premier Growth Fund 478
Technology Fund 482
Quasar Fund 426

Global International Fund 440
Worldwide Privatization Fund 412
New Europe Fund 462
All-Asia Investment Fund 418
Global Small Cap Fund 445
Global Environment Fund 481

Total Return Strategic Balanced Fund 432
Balanced Shares 496
Income Builder Fund 411
Real Estate Investment Fund 410
Utility Income Fund 409
Growth & Income Fund 494
</TABLE>