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Filed Pursuant to Rule 497(c)
Registration File No.: 333-17217
EQ ADVISORS TRUST(SM)
PROSPECTUS DATED MAY 1, 2000
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This Prospectus describes six (6) Portfolios offered by EQ Advisors Trust and
the Class IA shares offered by the Trust on behalf of each Portfolio that you
can choose as investment alternatives. Each Portfolio has its own investment
objective and strategies that are designed to meet different investment goals.
This Prospectus contains information you should know before investing. Please
read this Prospectus carefully before investing and keep it for future
reference.
DOMESTIC PORTFOLIOS FIXED INCOME PORTFOLIOS
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EQ/Aggressive Stock* Alliance High Yield
Alliance Common Stock Alliance Money Market
INTERNATIONAL STOCK PORTFOLIO BALANCED/HYBRID PORTFOLIO
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Alliance Global EQ/Balanced*
* Effective May 1, 2000, the name of the Alliance Aggressive Stock
Portfolio was changed to the "EQ/Aggressive Stock Portfolio" and the
Alliance Balanced Portfolio was changed to the "EQ/Balanced Portfolio."
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YOU SHOULD BE AWARE THAT THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED OF THE INVESTMENT MERIT OF THESE PORTFOLIOS OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Version 17
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OVERVIEW
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EQ ADVISORS TRUST
This Prospectus tells you about six (6) current Portfolios of EQ Advisors
Trust ("Trust") and the Class IA shares offered by the Trust on behalf of each
Portfolio. The Trust is an open-end management investment company. Each
Portfolio is a separate series of the Trust with its own investment objective,
investment strategies and risks, which are described in this Prospectus. Each
of the current Portfolios of the Trust are diversified for purposes of the
Investment Company Act of 1940, as amended ("1940 Act").
The Trust's shares are currently sold only to insurance company separate
accounts in connection with variable life insurance contracts and variable
annuity certificates and contracts (the "Contract" or collectively, the
"Contracts") issued by The Equitable Life Assurance Society of the United
States ("Equitable") and Equitable of Colorado, Inc. ("EOC") as well as
insurance companies that are not affiliated with Equitable or EOC
("non-affiliated insurance companies") and to The Equitable Investment Plan
for Employees, Managers and Agents ("Equitable Plan"). The Prospectus is
designed to help you make informed decisions about the Portfolios that are
available under your Contract or under the Equitable Plan. You will find
information about your Contract and how it works in the accompanying
prospectus for the Contracts if you are a Contractholder or participant under
a Contract.
Equitable currently serves as the Manager of the Trust. In such capacity,
Equitable currently has overall responsibility for the general management and
administration of the Trust.
Information about the Advisers for each Portfolio is contained in the
description concerning that Portfolio in the section entitled "About the
Investment Portfolios." The Manager has the ultimate responsibility to oversee
each of the Advisers and to recommend their hiring, termination and
replacement. Subject to approval by the Board of Trustees, the Manager has
been granted relief by the Securities and Exchange Commission ("SEC")
("Multi-Manager Order") that enables the Manager without obtaining shareholder
approval to: (i) select new or additional Advisers for each of the Trust's
Portfolios; (ii) enter into new investment advisory agreements and materially
modify existing investment advisory agreements; and (iii) terminate and
replace the Advisers.
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TABLE OF CONTENTS
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1
SUMMARY INFORMATION CONCERNING EQ
ADVISORS TRUST 4
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2
ABOUT THE INVESTMENT PORTFOLIOS 6
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DOMESTIC PORTFOLIOS 8
EQ/Aggressive Stock 8
Alliance Common Stock 12
INTERNATIONAL STOCK PORTFOLIO 15
Alliance Global 15
FIXED INCOME PORTFOLIOS 18
Alliance High Yield 18
Alliance Money Market 22
BALANCED/HYBRID PORTFOLIO 25
EQ/Balanced 25
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3
MORE INFORMATION ON PRINCIPAL RISKS 30
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4
MANAGEMENT OF THE TRUST 35
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The Trust 35
The Manager 35
The Advisers 37
The Administrator 37
The Transfer Agent 38
Brokerage Practices 38
Brokerage Transactions with Affiliates 38
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5
FUND DISTRIBUTION ARRANGEMENTS 39
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6
PURCHASE AND REDEMPTION 40
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7
HOW ASSETS ARE VALUED 41
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8
TAX INFORMATION 42
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9
FINANCIAL HIGHLIGHTS 43
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1
SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST
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The following chart highlights the six (6) Portfolios described in this
Prospectus that you can choose as investment alternatives under your Contracts
offered by Equitable or EOC. The chart and accompanying information identify
each Portfolio's investment objective(s), principal investment strategies, and
principal risks. "More Information on Principal Risks", which more fully
describes each of the principal risks, is provided beginning on page 30.
EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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EQ/AGGRESSIVE STOCK Seeks to achieve long-term growth of capital
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ALLIANCE COMMON STOCK Seeks to achieve long-term growth of capital and
increased income
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EQ ADVISORS TRUST INTERNATIONAL STOCK PORTFOLIO
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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ALLIANCE GLOBAL Seeks long-term growth of capital
EQ ADVISORS TRUST FIXED INCOME PORTFOLIOS
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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ALLIANCE HIGH YIELD Seeks to achieve a high return by maximizing current
income and, to the extent consistent with that
objective, capital appreciation
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ALLIANCE MONEY MARKET Seeks to obtain a high level of current income,
preserve its assets and maintain liquidity
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EQ ADVISORS TRUST BALANCED/HYBRID PORTFOLIO
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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EQ/BALANCED Seeks to achieve a high return through both
appreciation of capital and current income
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<TABLE>
<CAPTION>
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
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<S> <C>
Stocks and other equity securities of small and General investment, small-cap and mid-cap company,
medium-sized companies (including securities of growth investing, leveraging, derivatives, liquidity,
companies in cyclical industries, companies whose securities lending, and foreign securities risks
securities are temporarily undervalued, companies in
special situations (e.g., change in management, new
products or changes in customer demand) and less widely
known companies)
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Stocks and other equity securities (including preferred General investment, foreign securities, leveraging,
stocks or convertible debt) and fixed income securities derivatives, convertible securities, small-cap and mid-cap
(including junk bonds), foreign securities, derivatives, company, junk bond, securities lending, and fixed income
and securities lending risks
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</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
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<S> <C>
Equity securities of U.S. and established foreign companies General investment, foreign securities, liquidity, derivatives,
(including shares of other mutual funds investing in foreign securities lending, and fixed income risks
securities), debt securities, derivatives, and securities
lending
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</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
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<S> <C>
High yield debt securities rated BB/Ba or below or unrated General investment, fixed income, leveraging, loan
securities of comparable quality ("junk bonds"), common participation and assignment, derivatives, liquidity, junk
stocks and other equity securities, foreign securities, bond, foreign securities, small-cap and mid-cap company,
derivatives, and securities lending and securities lending risks
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High quality U.S. dollar-denominated money market General investment, money market, leveraging, foreign
instruments (including foreign securities) and securities securities, and securities lending risks
lending
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</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
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<S> <C>
Debt and equity securities, money market instruments, General investment, asset allocation, fixed income,
foreign securities, derivatives, and securities lending derivatives, leveraging, liquidity, securities lending,
portfolio turnover, and foreign securities risks
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</TABLE>
--------------------- EQ ADVISOR TRUST
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ABOUT THE INVESTMENT PORTFOLIOS
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This section of the Prospectus provides a more complete description of the
principal investment objectives, strategies, and risks of each of the
Portfolios. Of course, there can be no assurance that any Portfolio will
achieve its investment objective.
Please note that:
o A fuller description of each of the principal risks is included in the
section "More Information on Principal Risks," which follows the
description of each Portfolio in this section of the Prospectus.
o Additional information concerning each Portfolio's strategies, investments,
and risks can also be found in the Trust's Statement of Additional
Information.
GENERAL INVESTMENT RISKS
Each of the Portfolios is subject to the following risks:
ASSET CLASS RISK: The returns from the types of securities in which a
Portfolio invests may underperform returns from the various general securities
markets or different asset classes.
MARKET RISK: You could lose money over short periods due to fluctuation in a
Portfolio's share price in reaction to stock or bond market movements, and
over longer periods during extended market downturns.
SECURITY SELECTION RISK: There is the possibility that the specific securities
selected by a Portfolio's Adviser will underperform other funds in the same
asset class or benchmarks that are representative of the general performance
of the asset class.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
THE BENCHMARKS
The performance of each of the Trust's Portfolios as shown on the following
pages compares each Portfolio's performance to that of a broad-based
securities market index, an index of funds with similar investment objectives
and/or a blended index. Each of the Portfolios' annualized rates of return are
net of: (i) its investment management fees; and (ii) its other expenses. These
rates are not representative of the actual return you would receive under your
Contract.
Broad-based securities indices are unmanaged and are not subject to fees and
expenses typically associated with managed investment company portfolios.
Broad-based securities indices are also not subject to contract and
insurance-related expenses and charges. Investments cannot be made directly in
a broad-based securities index. Comparisons with these benchmarks, therefore,
are of limited use. They are included because they are widely known and may
help you to understand the universe of securities from which each Portfolio is
likely to select its holdings.
THE CREDIT SUISSE FIRST BOSTON GLOBAL HIGH YIELD INDEX ("CSFB Index") has been
maintained since January 1986 and has several modules representing different
sectors of the high yield market, including a cash paying module, a
pay-in-kind module, and a default module. The CSFB Index is priced weekly and
can be sorted by industry, rating, seniority, liquidity, country of issue,
price, yield and spread.
THE MERRILL LYNCH HIGH YIELD MASTER INDEX ("ML Master") represents an
unmanaged group of securities widely regarded by investors as representative
of the high yield bond market.
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX ("MSCI World") is an
arithmetic, market value-weighted average of the performance of over 1,300
securities listed on the stock exchanges of twenty foreign countries and the
United States.
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THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") is an
unmanaged weighted index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the larger capitalization portion of the United States stock
market. The S&P 500 returns reflect the reinvestment of dividends, if any, but
do not reflect fees, brokerage commissions or other expenses of investing.
THE STANDARD & POOR'S MIDCAP 400 INDEX ("S&P 400 MidCap") is an unmanaged
weighted index of 400 domestic stocks chosen for market size (median market
capitalization of about $610 million), liquidity, and industry group
representation. The S&P 400 returns reflect the reinvestment of dividends, if
any, but do not reflect fees, brokerage commissions or other expenses of
investing.
THE LIPPER AVERAGES are contained in Lipper's survey of the performance of
funds underlying a large universe of variable life and annuity contracts,
where performance averages are based on net asset values which reflect the
deduction of investment management fees and direct operating expenses, and,
for funds with Rule 12b-1 plans, asset-based sales charges. This survey is
published by Lipper Analytical Services, Inc., a firm recognized for its
reporting of performance of actively managed funds. Performance data shown for
the portfolios does not reflect the deduction of any insurance-related
expenses (which are assumed at the contract level).
"Blended" performance numbers (e.g., 50% S&P 400/50% Russell 2000 or 60% S&P
500/40% Lehman Gov't/Corp) assume a static mix of the two indices. We believe
that these indices reflect more closely the market sectors in which certain
Portfolios invest.
50% S&P 400 MIDCAP INDEX/50% RUSSELL 2000 INDEX - is made up of 50% of the S&P
400 Index, which is an unmanaged weighted index of 400 domestic stocks chosen
for market size (median market capitalization of about $610 million),
liquidity and industry group representation; and 50% of the Russell 2000
Index, which is an unmanaged index which tracks the performance of 2,000
publicly-traded U.S. stocks.
50% S&P 500 INDEX/50% LEHMAN GOV'T/CORP. INDEX - is made up of 50% of the
S&P 500 Index, which is an unmanaged weighted index containing common stocks
of 500 industrial, transportation, utility and financial companies, regarded
as generally representative of the larger capitalization portion of the
United States stock market, and 50% of the Lehman Government/Corporate Index,
which represents an unmanaged group of securities widely regarded by investors
as representative of the bond market.
--------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS
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EQ/AGGRESSIVE STOCK PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks and other equity securities
of small and medium-sized companies that, in the opinion of the Adviser, have
favorable appreciation prospects. The Portfolio may also invest in securities
of companies in cyclical industries, companies whose securities are
temporarily undervalued, companies in special situations (e.g., change in
management, new products or changes in customer demand) companies stocks whose
growth prospects are not recognized by the market and less widely known
companies.
The Portfolio may also invest up to 25% of its total assets in foreign
securities and may also make use of various other investment strategies,
(e.g., investments in debt securities, making secured loans of its portfolio
securities). The Portfolio may also use derivatives, including: writing
covered call options and purchasing call and put options on individual equity
securities, securities indexes and foreign currencies. The Portfolio may also
purchase and sell stock index and foreign currency futures contracts and
options thereon.
When market or financial conditions warrant, or it appears that the
Portfolio's investment objective will not be achieved primarily through
investments in common stocks, the Portfolio may invest in other equity-type
securities (such as preferred stocks and convertible debt instruments) and
options for hedging purposes. The Portfolio may also make temporary
investments in corporate fixed income securities, which will generally be
investment grade, or invest part of its assets in cash or cash equivalents,
including high-quality money market instruments for liquidity or defensive
purposes. Such investments could result in the Portfolio not achieving its
investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
MULTIPLE-ADVISER RISK: The EQ/Aggressive Stock Portfolio employs multiple
Advisers. Each of the Advisers independently chooses and maintains a portfolio
of common stocks for the Portfolio and each is responsible for investing a
specific allocated portion of the Portfolio's assets. Because each Adviser will
be managing its allocated portion of the Portfolio independently from the other
Advisers, the same security may be held in two different portions of the
Portfolio, or may be acquired for one portion of the Portfolio at a time when
the Adviser of another portion deems it appropriate to dispose of the security
from that other portion. Similarly, under some market conditions, one Adviser
may believe that temporary, defensive investments in short-term instruments or
cash are appropriate when the other Adviser or Advisers believe continued
exposure to the equity markets is appropriate for their portions of the
Portfolio. Because each Adviser directs the trading for its own portion of the
Portfolio, and does not aggregate its transactions with those of the other
Advisers, the Portfolio may incur higher brokerage costs than would be the case
if a single Adviser were managing the entire Portfolio.
GROWTH INVESTING RISK: Certain of the Advisers for this Portfolio may use a
growth oriented approach to stock selection. The price of growth stocks may be
more sensitive to changes in current or expected earnings than the prices of
other stocks. The price of growth stocks is also subject to the risk that the
stock price of one or more companies will fall or will fail to appreciate as
anticipated by the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because:
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the securities of such companies are less well-known, held primarily by
insiders or institutional investors and may trade less frequently and in lower
volume; such companies are more likely to experience greater or more
unexpected changes in their earnings and growth prospects; such companies have
limited financial resources or may depend on a few key employees; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index; (ii) the returns of a "blended" index of two
broad-based indices; and (iii) the returns of an index of funds with similar
investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Aggressive Stock
Portfolio) managed by Alliance using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Aggressive Stock Portfolio) whose inception date is January 27,
1986. The assets of the predecessor were transferred to the Portfolio on
October 18, 1999. Following that transfer, the performance shown (for the
period October 19, 1999 through December 31, 1999) is that of the Portfolio.
For these purposes, the performance results of the Portfolio and its
predecessor registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
--------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS (CONTINUED)
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CALENDAR YEAR ANNUAL TOTAL RETURN
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[GRAPHIC OMITTED]
Year Percentage
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1990 8.2%
1991 86.9%
1992 (3.2)%
1993 16.8%
1994 (3.8)%
1995 31.6%
1996 22.2%
1997 10.9%
1998 0.3%
1999 18.84
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Best quarter (% and time period) Worst quarter (% and time period)
40.10% (1991 1st Quarter) (27.19)% (1998 3rd Quarter)
AVERAGE ANNUAL TOTAL RETURNS
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ONE YEAR FIVE YEARS TEN YEARS
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EQ/Aggressive Stock Portfolio
- Class IA Shares 18.84% 16.29% 16.68%
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50% S&P 400 MidCap
Index/50% Russell
2000*,** 18.09% 19.92% 15.41%
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S&P 400 MidCap Index* 14.72% 23.05% 17.32%
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Lipper MidCap Growth Funds
Average* 46.25% 22.54% 16.19%
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* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in which
the Portfolio invests.
WHO MANAGES THE PORTFOLIO
In accordance with the Multi-Manager Order, the Manager may, among other
things, select new or additional Advisers for the Portfolio and may allocate
and re-allocate the Portfolio's assets among Advisers. Currently, Alliance
Capital Management, L.P. and Massachusetts Financial Services Company have
been selected by the Manager to serve as Advisers for this Portfolio. It is
anticipated that additional Advisers may be added in the future.
The Manager initially allocated the assets of the Portfolio and will allocate
all daily cash inflows (share purchases) and outflows (redemptions and expense
items) among the Advisers, subject to the oversight of the Board. The Manager
intends, on a periodic basis, to review the asset allocation in the Portfolio.
The Manager does not intend, but reserves the right, subject to the oversight
of the Board, to reallocate assets from one Adviser to another when it would
be in the best interest of the Portfolio and its shareholders to do so. In
some instances, the effect of the reallocation will be to shift assets from a
better performing Adviser to other Adviser(s).
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance was the exclusive Adviser to the Portfolio
and its predecessor registered investment company since the predecessor
commenced operations. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable. Alliance manages investment companies,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations.
ALDEN M. STEWART and RANDALL E. HAASE have been the persons principally
responsible for the day-to-day management of the Portfolio and its
predecessor since 1993. Mr. Stewart, an Executive Vice President of
Alliance, has been associated with Alliance since 1970. Mr. Haase, a Senior
Vice President of Alliance, has been associated with Alliance since 1988.
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS was added as an Adviser to the Portfolio as of May 1, 2000. MFS
is America's oldest mutual fund organization. MFS and its predecessor
organizations have a history of money management dating from 1924 and the
founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
The Portfolio Managers are TONI Y. SHIMURA, a Senior Vice President of MFS,
who has been employed by MFS
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as a portfolio manager since 1995 and JOHN W. BALLEN, Chief Investment
Officer and President of MFS, who provides general oversight in the
management of the Portfolio.
-------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS (CONTINUED)
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ALLIANCE COMMON STOCK PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital and increase
income.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks and other equity-type
securities (such as preferred stocks or convertible debt) that the Adviser
believes will share in the growth of the nation's economy over a long period.
Most of the time, the Portfolio will invest primarily in common stocks that
are listed on national securities exchanges. Smaller amounts will be invested
in stocks that are traded over-the-counter and in other equity-type
securities. Current income is an incidental consideration. The Portfolio
generally will not invest more than 20% of its total assets in foreign
securities.
The Portfolio may also make use of various other investment strategies,
including making secured loans of up to 50% of its total assets. The Portfolio
may also use derivatives, including: writing covered call and put options,
buying call and put options on individual common stocks and other equity-type
securities, securities indexes, and foreign currencies. The Portfolio may also
purchase and sell stock index and foreign currency futures contracts and
options thereon.
When market or financial conditions warrant or it appears that the Portfolio's
investment objective will not be achieved by purchasing equity securities, the
Portfolio may invest a portion of its assets in debt securities, including
nonparticipating and nonconvertible preferred stocks, investment grade debt
securities and junk bonds, e.g., rated BB or lower by Standard & Poor's
("S&P") or Ba or lower by Moody's Investor Service, Inc. ("Moody's"). The
Portfolio also may make temporary investments in high-quality U.S.
dollar-denominated money market instruments. Such investment strategies could
result in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
CONVERTIBLE SECURITIES RISK: Convertible securities generally enable the
Portfolio to benefit from increases in the market price of the underlying
common stock and provide higher yields than the underlying common stocks, but
generally offer lower yields than nonconvertible securities of similar
quality. The value of convertible securities fluctuates both in relation to
changes in interest rates and changes in the value of the underlying common
stock.
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SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known, held primarily by insiders
or institutional investors and may trade less frequently and in lower volume;
such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; such companies have limited
financial resources or may depend on a few key employees; and the products or
technologies of such companies may be at a relatively early stage of
development or not fully tested.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment-grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
if it invested in higher-rated obligations because BBB-rated securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
JUNK BOND RISK: The Portfolio may invest a portion of its assets in "junk
bonds" or lower-rated securities rated BB or lower by S&P or an equivalent
rating by any other NRSRO or unrated securities of similar quality. Junk bonds
have speculative elements or are predominantly speculative credit risks,
therefore, credit risk is particularly significant for this Portfolio. This
Portfolio may also be subject to greater credit risk because it may invest in
debt securities issued in connection with corporate restructurings by highly
leveraged issuers or in debt securities not current in the payment of interest
or principal, or in default.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index and (ii) the returns of an index of funds with
similar investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Common Stock
Portfolio) managed by the Adviser using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Common Stock Portfolio) whose inception date is June 16, 1975.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
--------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ---------
14
- --------------------------------------------------------------------------------
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
CALENDAR YEAR ANNUAL TOTAL RETURN
---------------------------------
[GRAPHIC OMITTED]
Year Percentage
---------------------------------
1990 (8.1)%
1991 37.9%
1992 3.2%
1993 24.8%
1994 (2.1)%
1995 32.5%
1996 24.3%
1997 29.4%
1998 29.4%
1999 25.91
----------------------------------
Best quarter (% and time period) Worst quarter (% and time period)
28.42% (1998 4th Quarter) (20.22)% (1990 3rd Quarter)
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------
Alliance Common Stock Portfolio
- Class IA Shares 25.19% 28.11% 18.61%
- --------------------------------------------------------------------------
S&P 500 Index* 21.03% 28.56% 18.21%
- --------------------------------------------------------------------------
Lipper Growth Equity Mutual
Funds Average* 31.48% 26.45% 17.79%
- --------------------------------------------------------------------------
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment compay since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
TYLER J. SMITH has been responsible for the day-to-day management of the
Portfolio and its predecessor since 1977. Mr. Smith, a Senior Vice President
of Alliance, has been associated with Alliance since 1970.
<PAGE>
INTERNATIONAL STOCK PORTFOLIO
- ---------
15
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a diversified mix of equity securities of
U.S. and established foreign companies. The Adviser believes the equity
securities of these established non-U.S. companies have prospects for growth.
The Portfolio intends to make investments in several countries and to have
represented in the Portfolio business activities in not less than three
different countries (including the United States).
These non-U.S. companies may have operations in the United States, in their
country of incorporation or in other countries.
The Portfolio may invest in any type of security including, but not limited
to, common and preferred stock, as well as shares of mutual funds that invest
in foreign securities, bonds and other evidences of indebtedness, and other
securities of issuers wherever organized and governments and their political
subdivisions. Although no particular proportion of stocks, bonds or other
securities is required to be maintained, the Portfolio intends under normal
conditions to invest in equity securities.
The Portfolio may also make use of various other investment strategies,
including making secured loans of up to 50% of its total assets. The Portfolio
may also use derivatives including: writing covered call and put options,
purchasing call and put options on individual equity securities, securities
indexes, and foreign currencies. The Portfolio may also purchase and sell
stock index, foreign currency and interest rate futures contracts and options
on such contracts, as well as forward foreign currency exchange contracts.
When market or financial conditions warrant, the Portfolio may at times invest
substantially all of its assets in securities issued by U.S. companies or in
cash or cash equivalents, including money market instruments issued by foreign
entities for temporary or defensive purposes. Such investment strategies could
result in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
FOREIGN SECURITIES RISK: Investing in foreign securities involves risks not
associated with investing in U.S. securities that can adversely affect the
Portfolio's performance. Foreign markets, particularly emerging markets, may
be less liquid, more volatile and subject to less government supervision than
domestic markets. There may be difficulties enforcing contractual obligations,
and it may take more time for trades to clear and settle. In addition, foreign
investments can be adversely affected by: unfavorable currency exchange rates
(relative to the U.S. dollar for securities denominated in a foreign
currencies); inadequate or inaccurate information about foreign companies;
higher transaction, brokerage and custody costs; expropriation or
nationalization; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions. Other specific risks of investing in foreign securities include:
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging markets countries and/or their securities markets, such as less
diverse and less mature economic structures, less stable political
systems, more restrictive foreign investment policies, smaller-sized
securities markets and low trading volumes. Such risks can make
investments illiquid and more volatile than investments in developed
countries and such securities may be subject to abrupt and severe price
declines.
EURO RISK: The Portfolio may invest in securities issued by European
issuers. On January 1, 1999, 11 of the 15 member states of the European
Monetary Union ("EMU") introduced the "Euro" as a common currency.
------------------ EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIO (CONTINUED)
- ---------
16
- --------------------------------------------------------------------------------
During a three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is
expected to become the sole currency of the participating states. The
introduction of the Euro will result in the redenomination of European
debt and equity securities over a period of time, which may result in
various legal and accounting differences and/or tax treatments that
otherwise would not likely occur. During this period, the creation and
implementation of suitable clearing and settlement systems and other
operational problems may cause market disruptions that could adversely
affect investments quoted in the Euro.
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements as are U.S. companies, which
could adversely affect their value.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment-grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
if it invested in higher-rated obligations because BBB-rated securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index and (ii) the returns of an index of funds with
similar investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Global Portfolio)
managed by the Adviser using the same investment objectives and strategy as
the Portfolio. For these purposes, the Portfolio is considered to be the
successor entity to the predecessor registered investment company
(HRT/Alliance Global Portfolio) whose inception date is August 27, 1987. The
assets of the
<PAGE>
- ----------
17
- --------------------------------------------------------------------------------
predecessor were transferred to the Portfolio on October 18, 1999. Following
that transfer, the performance shown (for the period October 19, 1999 through
December 31, 1999) is that of the Portfolio. For these purposes, the
performance results of the Portfolio and its predecessor registered investment
company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results.
CALENDAR YEAR ANNUAL TOTAL RETURN
[GRAPHIC OMITTED]
Year Percentage
---------------------------------
1990 (6.1%
1991 30.5%
1992 (0.5)%
1993 32.1%
1994 5.2%
1995 18.8%
1996 14.6%
1997 11.7%
1998 21.8%
1999 38.53
----------------------------------
Best quarter (% and time period) Worst quarter (% and time period)
26.59% (1998 4th Quarter) (16.99)% (1998 3rd Quarter)
AVERAGE ANNUAL TOTAL RETURNS
- ---------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- ---------------------------------------------------------------
Alliance Global
Portfolio -
Class IA Shares 38.53% 20.74% 15.84%
- ---------------------------------------------------------------
Lipper Global
Mutual Funds
Average* 44.18% 19.42% 11.73%
- ---------------------------------------------------------------
MSCI World
Index* 24.93% 19.76% 11.42%
- ---------------------------------------------------------------
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
SANDRA L. YEAGER has been responsible for the day-to-day management of the
Portfolio's and its predecessor's investment program since 1998. Ms. Yeager, a
Senior Vice President of Alliance, has been associated with Alliance since
1990.
--------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS
- ---------
18
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve a high return by maximizing current
income and, to the extent consistent with that objective, capital
appreciation.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a diversified mix of high yield, fixed
income securities (so-called "junk bonds"), which generally involve greater
volatility of price and risk of principal and income than high quality fixed
income securities. Junk bonds generally have a higher current yield but are
rated either in the lower categories by NRSROs (i.e., rated Baa or lower by
Moody's or BBB or lower by S&P) or are unrated securities of comparable
quality.
The Portfolio will attempt to maximize current income by taking advantage of
market developments, yield disparities and variations in the creditworthiness
of issuers. Substantially all of the Portfolio's investments will be income
producing.
The Portfolio may also make use of various other investment strategies,
including investments in common stocks and other equity-type securities (such
as convertible debt securities) and secured loans of its portfolio securities
without limitation in order to enhance its current return and to reduce
fluctuations in net asset value. The Portfolio may also use derivatives,
including: writing covered call and put options; purchasing call and put
options on individual fixed income securities, securities indexes and foreign
currencies; and purchasing and selling stock index, interest rate and foreign
currency futures contracts and options thereon. The Portfolio may also invest
in participations and assignments of loans originally made by institutional
lenders or lending syndicates.
The Portfolio will not invest more than 10% of its total assets in:
(i) fixed income securities which are rated lower than B3 or B- or their
equivalents by one NRSRO or if unrated are of equivalent quality as determined
by the Adviser; and
(ii) money market instruments of any entity which has an outstanding issue of
unsecured debt that is rated lower than B3 or B- or their equivalents by an
NRSRO or if unrated is of equivalent quality as determined by the Adviser;
however, this restriction will not apply to:
o fixed income securities which the Adviser believes have similar
characteristics to securities which are rated B3 or higher by Moody's or
B- or higher by S&P, or
o money market instruments of any entity that has an unsecured issue of
outstanding debt which the Adviser believes has similar characteristics to
securities which are so rated.
In the event that any securities held by the Portfolio fall below those
ratings, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if the Adviser believes that such
investments are considered appropriate under the circumstances.
The Portfolio may also invest in fixed income securities that are providing
high current yields because of risks other than credit, such as prepayment
risks, in the case of mortgage-backed securities, or currency risks, in the
case of non-U.S. dollar denominated foreign securities.
When market or financial conditions warrant, the Portfolio may also make
temporary investments in high-quality U.S. dollar-denominated money market
instruments. Such investment strategies could result in the Portfolio not
achieving its investment objective.
THE PRINCIPAL RISKS
JUNK BOND RISK: The Portfolio invests primarily in "junk bonds" or lower-rated
securities rated BBB or lower by S&P or an equivalent rating by any other
NRSRO or unrated securities of similar quality. Junk bonds have speculative
elements or are predominantly speculative credit risks, therefore, credit risk
is particularly significant for this Portfolio. Although junk bonds generally
have higher yields than debt securities with higher credit ratings, they are
high-risk investments that may not pay interest or return principal as
scheduled. Junk bonds generally are also less liquid and experience more price
volatility than higher rated fixed income securities. This Portfolio may also
be subject to
<PAGE>
- ----------
19
- --------------------------------------------------------------------------------
greater credit risk because it may invest in debt securities issued in
connection with corporate restructurings by highly leveraged issuers or in
debt securities not current in the payment of interest or principal, or in
default.
FIXED INCOME RISK: This Portfolio invests primarily in fixed income
securities, therefore, the Portfolio's performance will be affected by changes
in interest rates, credit risks of the issuer, the duration and maturity of
the Portfolio's fixed income holdings, and adverse market and economic
conditions. Other risks that relate to the Portfolio's investment in fixed
income securities include:
INTEREST RATE RISK: When interest rates rise, the value (i.e., share
price and total return) of the Portfolio's fixed income securities,
particularly those with longer durations or maturities, will go down.
When interest rates fall, the reverse is true.
MORTGAGE-BACKED SECURITIES RISK: Rising interest rates may cause the
duration of mortgage-backed securities to increase, making them even
more susceptible to interest rate changes. Falling interest rates may
cause the value and yield of mortgage-backed securities to fall. Falling
interest rates also may encourage borrowers to pay off their mortgages
sooner than anticipated (pre-payment). The Portfolio would need to
reinvest the pre-paid funds at the newer, lower interest rates.
LOAN PARTICIPATION AND ASSIGNMENT RISK: In addition to the risks associated
with fixed income investments generally, the Portfolio's investments in loan
participations and assignments are subject to the risk that the financial
institution acting as agent for all interests in a loan, might fail
financially. It is also possible that, under emerging legal theories of lender
liability, the Portfolio could be held liable as a co-lender.
SMALL CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known; held primarily by insiders
or institutional investors and may trade less frequently and in lower volume;
such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; such companies have limited
financial resources or may depend on a few key employees; and the products or
technologies of such companies may be at a relatively early stage of
development or not fully tested.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
---------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
20
- --------------------------------------------------------------------------------
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities without restriction. The risk in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delay in receiving additional collateral, or in the recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index and (ii) the returns of an index of funds with
similar investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance High Yield Portfolio)
managed by the Adviser using the same investment objectives and strategy as
the Portfolio. For these purposes, the Portfolio is considered to be the
successor entity to the predecessor registered investment company
(HRT/Alliance High Yield Portfolio) whose inception date is January 2, 1987.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
CALENDAR YEAR ANNUAL TOTAL RETURN
---------------------------------
[GRAPHIC OMITTED]
Year Percentage
---------------------------------
1990 (1.1)%
1991 24.5%
1992 12.3%
1993 23.2%
1994 (2.8)%
1995 19.9%
1996 23.0%
1997 18.5%
1998 (5.2)%
1999 (3.35)%
----------------------------------
Best quarter (% and time period) Worst quarter (% and time period)
8.00% (1997 2nd Quarter) (10.97)% (1998 3rd Quarter)
AVERAGE ANNUAL TOTAL RETURNS
- ---------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- ---------------------------------------------------------------------------
Alliance High Yield Portfolio
- Class IA Shares (3.35)% 9.86% 10.23%
- ---------------------------------------------------------------------------
CSFB Index*, ** 3.28% 9.07% 11.06%
- ---------------------------------------------------------------------------
ML Master* 1.57% 9.61% 10.79%
- ---------------------------------------------------------------------------
Lipper High Current Yield Bond
Funds Average* 3.83% 9.48% 10.15%
- ----------------------------------------------------------------------------
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in which
the Portfolio invests.
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities,
<PAGE>
- ----------
21
- --------------------------------------------------------------------------------
qualified and non-tax qualified corporate funds, public and private pension
and profit-sharing plans, foundations and tax-exempt organizations.
NELSON JANTZEN has been responsible for the day-to-day management of the
Portfolio since January 2000. Mr. Jantzen is a Senior Vice President and
Portfolio Manager in the Global High Yield Group and is responsible for the
management of domestic high yield securities. Mr. Jantzen joined Alliance in
1993.
------------------------ EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS
- ----------
22
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to obtain a high level of current income, preserve
its assets and maintain liquidity.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a diversified portfolio of high-quality
U.S. dollar-denominated money market instruments. The Portfolio will maintain
a dollar-weighted average portfolio maturity of 90 days or less.
The instruments in which the Portfolio invests include:
o marketable obligations of, or guaranteed as to the timely payment of
principal and interest by, the U.S. Government, its agencies or
instrumentalities ("U.S. Government Securities");
o certificates of deposit, bankers' acceptances, bank notes, time deposits and
interest bearing savings deposits issued or guaranteed by:
(a) domestic banks (including their foreign branches) or savings and
loan associations having total assets of more than $1 billion and
which are FDIC members in the case of banks, or insured by the FDIC,
in the case of savings and loan associations; or
(b) foreign banks (either by their foreign or U.S. branches) having
total assets of at least $5 billion and having an issue of either (i)
commercial paper rated at least A-1 by S&P or Prime-1 by Moody's or
(ii) long term debt rated at least AA by S&P or Aa by Moody's;
o commercial paper (rated at least A-1 by S&P or Prime-1 by Moody's or, if not
rated, issued by domestic or foreign companies having outstanding debt
securities rated at least AA by S&P or Aa by Moody's) and participation
interests in loans extended by banks to such companies;
o mortgage-backed and asset-backed securities that have remaining maturities
of less than one year;
o corporate debt obligations with remaining maturities of less than one year,
rated at least AA by S&P or Aa by Moody's, as well as corporate debt
obligations rated at least A by S&P or Moody's, provided the corporation
also has outstanding an issue of commercial paper rated at least A-1 by
S&P or Prime-1 by Moody's;
o floating rate or master demand notes; and
o repurchase agreements covering U.S. Government securities.
If the Adviser believes a security held by the Portfolio is no longer deemed
to present minimal credit risk, the Portfolio will dispose of the security as
soon as practicable unless the Board of Trustees determines that such action
would not be in the best interest of the Portfolio.
Purchases of securities that are unrated must be ratified by the Board of
Trustees. Because the market value of debt obligations fluctuates as an
inverse function of changing interest rates, the Portfolio seeks to minimize
the effect of such fluctuations by investing only in instruments with a
remaining maturity of 397 calendar days or less at the time of investment,
except for obligations of the U.S. Government, which may have a remaining
maturity of 762 calendar days or less. Time deposits with maturities greater
than seven days are considered to be illiquid securities.
The Portfolio may make use of various other investment strategies, including
investing up to 20% of its total assets in U.S. dollar-denominated money
market instruments of foreign issuers and making secured loans of up to 50% of
its total portfolio securities.
THE PRINCIPAL RISKS
MONEY MARKET RISK: While money market funds are designed to be relatively low
risk investments, they are not entirely free of risk. Despite the short
maturities and high credit quality of the Portfolio's investments, increases
in interest rates and deteriorations in the credit quality of the instruments
the Portfolio has purchased may reduce the Portfolio's net asset value. In
addition, the Portfolio is still subject to the risk that the value of an
investment may be eroded over time by inflation. An investment in the
Portfolio is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
<PAGE>
- ----------
23
- --------------------------------------------------------------------------------
Although the Portfolio seeks to preserve the value of your investment, it is
possible to lose money by investing in the Portfolio.
ASSET-BACKED SECURITIES RISK: The Portfolio's investments in asset-backed
securities represent interests in pools of consumer loans such as credit card
receivables, automobile loans and leases, leases on equipment such as
computers, and other financial instruments and are subject to certain
additional risks. Rising interest rates tend to extend the duration of
asset-backed securities, making them more sensitive to changes in interest
rates. As a result, in a period of rising interest rates, the Portfolio may
exhibit additional volatility. When interest rates are declining, there are
usually more prepayments of loans which will shorten the life of these
securities. Prepayments also vary based on among other factors, general
economic conditions and other demographic conditions. The reinvestment of cash
received from prepayments will, therefore, usually be at a lower interest rate
than the original investment, lowering the Portfolio's yield.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risks will tend to be compounded.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: inadequate or inaccurate information about foreign
companies; higher transaction, brokerage and custody costs; expropriation or
nationalization; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns on three-month U.S. Treasury bills and (ii) the returns of an index of
funds with similar investment objectives. Past performance is not an
indication of future performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Money Market
Portfolio) managed by the Adviser using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Money Market Portfolio) whose inception date is July 13, 1981.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
------------------------ EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
24
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CALENDAR YEAR ANNUAL TOTAL RETURN
---------------------------------
[GRAPHIC OMITTED]
Year Percentage
---------------------------------
1990 8.2%
1991 6.2%
1992 3.6%
1993 3.0%
1994 4.0%
1995 5.7%
1996 5.3%
1997 5.4%
1998 5.3%
1999 4.96
----------------------------------
Best quarter (% and time period) Worst quarter (% and time period)
2.08% (1990 4th Quarter) .46% (2000 1st Quarter)
The Portfolio's 7-day yield for the quarter ended December 31, 1999 was
5.30%.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------
Alliance Money Market Portfolio
- Class IA Shares 4.96% 5.36% 5.16%
- --------------------------------------------------------------------------
3-Month Treasury Bill 4.74% 5.20% 5.06%
- --------------------------------------------------------------------------
Lipper Money Market Mutual
Fund Average* 4.75% 5.13% 4.87%
- --------------------------------------------------------------------------
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
RAYMOND J. PAPERA has been responsible for the day-to-day management of the
Portfolio and its predecessor since 1990. Mr. Papera, a Senior Vice President
of Alliance, has been associated with Alliance since 1990.
<PAGE>
BALANCED/HYBRID PORTFOLIO
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25
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EQ/BALANCED PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve a high return through both appreciation
of capital and current income.
THE INVESTMENT STRATEGY
The Portfolio invests varying portions of its assets primarily in
publicly-traded equity and debt securities and money market instruments
depending on economic conditions, the general level of common stock prices,
interest rates and other relevant considerations, including the risks
associated with each investment medium.
The Portfolio attempts to achieve long-term growth of capital by investing in
common stock and other equity-type instruments. It will try to achieve a
competitive level of current income and capital appreciation through
investments in publicly traded debt securities and a high level of current
income through investments primarily in high-quality U.S. dollar denominated
money market instruments.
The Portfolio's investments in common stocks will primarily consist of common
stocks that are listed on national securities exchanges. Smaller amounts will
be invested in stocks that are traded over-the-counter and in other
equity-type securities. The Portfolio may also invest up to 20% of its total
assets in securities of issuers domiciled outside the United States and not
included in the S&P 500 (i.e., foreign securities).
The Portfolio at all times will hold at least 25% of its total assets in fixed
income securities (including, for these purposes, that portion of the value of
securities convertible into common stock which is attributable to the fixed
income characteristics of those securities, as well as money market
instruments). The Portfolio's equity securities will always comprise at least
25%, but never more than 75%, of the Portfolio's total assets. Consequently,
the Portfolio will have a minimum or "core holdings" of at least 25% fixed
income securities and 25% equity securities. Over time, holdings are expected
to average approximately 50% in fixed income securities and approximately 50%
in equity securities. Asset mixes will periodically be rebalanced by the
Manager to maintain the expected asset mix.
The Portfolio may also invest up to 20% of its total assets in foreign
securities (which may include American depositary receipts and other
depositary arrangements) and may also make use of various other investment
strategies, including using up to 50% of its total portfolio assets for
securities lending purposes. The Portfolio may also use derivatives,
including: writing covered call and put options, purchasing call and put
options on all the types of securities in which it may invest, as well as
securities indexes and foreign currencies. The Portfolio may also purchase and
sell stock index, interest rate and foreign currency futures contracts and
options thereon.
The debt securities will consist principally of bonds, notes, debentures and
equipment trust certificates, as well as debt securities with equity features
such as conversion or exchange rights or warrants for the acquisition of stock
or participations based on revenues, rates or profits. These debt securities
will principally be investment grade securities rated at least Baa by Moody's
or BBB by S&P, or will be U.S. Government Securities. If such Baa or BBB debt
securities held by the Portfolio fall below those ratings, the Portfolio will
not be obligated to dispose of them and may continue to hold them if an
Adviser considers them appropriate investments under the circumstances. In
addition, the Portfolio may at times hold some of its assets in cash.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
MULTIPLE-ADVISER RISK: The EQ/Balanced Portfolio employs multiple Advisers.
Each of the Advisers independently chooses and maintains a portfolio of common
stocks for the Portfolio and each is responsible for investing a specific
allocated portion of the Portfolio's assets. Because each Adviser will be
managing its allocated portion of the Portfolio independently from the other
------------------------ EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIO (CONTINUED)
- ----------
26
- --------------------------------------------------------------------------------
Advisers, the same security may be held in two different portions of the
Portfolio, or may be acquired for one portion of the Portfolio at a time when
the Adviser of another portion deems it appropriate to dispose of the security
from that other portion. Similarly, under some market conditions, one Adviser
may believe that temporary, defensive investments in short-term instruments or
cash are appropriate when the other Adviser or Advisers believe continued
exposure to the equity markets is appropriate for their portions of the
Portfolio. Because each Adviser directs the trading for its own portion of the
Portfolio, and does not aggregate its transactions with those of the other
Advisers, the Portfolio may incur higher brokerage costs than would be the
case if a single Adviser were managing the entire Portfolio.
ASSET ALLOCATION RISK: In addition to the risks associated with the securities
in which the Portfolio invests, the Portfolio is subject to the risk that the
actual allocation of the Portfolio's assets between debt and equity securities
may adversely affect the Portfolio's value between the Manager's periodic
rebalancing.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
FIXED INCOME RISK: This Portfolio invests at least 25% of its total assets in
fixed income securities, therefore, the Portfolio's performance will be
affected by changes in interest rates, credit risks of the issuer, the
duration and maturity of the Portfolio's fixed income holdings, and adverse
market and economic conditions. Other risks that relate to the Portfolio's
investment in fixed income securities include:
INTEREST RATE RISK: When interest rates rise, the value (i.e., share
price and total return) of the Portfolio's fixed income securities,
particularly those with longer durations or maturities, will go down.
When interest rates fall, the reverse is true.
INVESTMENT GRADE SECURITIES RISK: The Portfolio could lose money if the
issuer or guarantor of a debt security or counterparty to a Portfolio's
transaction is unable or unwilling to make timely principal and/or
interest payments, or to honor its financial obligations. Investment
grade securities which are rated BBB by S&P or an equivalent rating by
any other NRSRO, are somewhat riskier than higher rated obligations
because they are regarded as having only an adequate capacity to pay
principal and interest, are considered to lack outstanding investment
characteristics, and may be speculative.
<PAGE>
- ----------
27
- --------------------------------------------------------------------------------
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate was over 100% per year.
Higher portfolio turnover (e.g., over 100% per year) will cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index; (ii) the returns of a "blended" index of
equity and fixed income securities; and (iii) the returns of an index of funds
with similar investment objectives. Past performance is not an indication of
future performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Balanced Portfolio)
managed by the Adviser using the same investment objectives and strategy as
the Portfolio. For these purposes, the Portfolio is considered to be the
successor entity to the predecessor registered investment company
(HRT/Alliance Balanced Portfolio) whose inception date is January 27, 1986.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results.
CALENDAR YEAR ANNUAL TOTAL RETURN
---------------------------------
[GRAPHIC OMITTED]
Year Percentage
---------------------------------
1990 0.3%
1991 41.3%
1992 (2.8)%
1993 12.3%
1994 (8.0)%
1995 19.8%
1996 11.7%
1997 15.1%
1998 18.1%
1999 17.79
----------------------------------
Best quarter (% and time period) Worst quarter (% and time period)
15.13% (1991 4th Quarter) (8.29)% (1990 3rd Quarter)
AVERAGE ANNUAL TOTAL RETURNS
- ------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- ------------------------------------------------------------------------
EQ/Balanced Portfolio - Class
IA Shares 17.79% 16.44% 11.77%
- ------------------------------------------------------------------------
50% S&P 500 Index/50%
Lehman Gov't/Corp.*, ** 9.07% 17.93% 13.04%
- ------------------------------------------------------------------------
S&P 500 Index* 21.03% 28.56% 18.21%
- ------------------------------------------------------------------------
Lipper Flex. Port. Average* 12.07% 17.11% 12.94%
- ------------------------------------------------------------------------
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in which
the Portfolio invests.
WHO MANAGES THE PORTFOLIO
In accordance with the Multi-Manager Order, the Manager may, among other
things, select new or additional Advisers for the Portfolio and may allocate
and re-allocate the Portfolio's assets among Advisers. Currently, Alliance
Capital Management, L.P., Capital Guardian Trust Company, Prudential
Investments Fund Management LLC and Jennison
----------------------- EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIO (CONTINUED)
- ----------
28
- --------------------------------------------------------------------------------
Associates LLC have been selected by the Manager to serve as Advisers for this
Portfolio. It is anticipated that additional Advisers may be added in the
future.
The Manager initially allocated the assets of the Portfolio and will allocate
all daily cash inflows (share purchases) and outflows (redemptions and expense
items) among the Advisers, subject to the oversight of the Board. The Manager
intends, on a periodic basis, to review the asset allocation in the Portfolio.
The Manager does not intend, but reserves the right, subject to the oversight
of the Board, to reallocate assets from one Adviser to another when it would
be in the best interest of the Portfolio and its shareholders to do so. In
some instances, the effect of the reallocation will be to shift assets from a
better performing Adviser to other Adviser(s).
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance was the exclusive Adviser to the Portfolio
and its predecessor registered investment company since the predecessor
commenced operations. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable. Alliance manages investment companies,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations.
The portfolio manager responsible for that portion of the Portfolio's total
assets that will be advised by Alliance as an Adviser is as follows:
ROBERT G. HEISTERBERG has been responsible for the day-to-day management
of the Portfolio and its predecessor since February 12, 1996. Mr.
Heisterberg, a Senior Vice President of Alliance and Global Economic
Policy Analysis, has been associated with Alliance since 1977.
CAPITAL GUARDIAN TRUST COMPANY: ("Capital Guardian"), 333 South Hope Street,
Los Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of
Capital Group International, Inc., which itself is a wholly owned subsidiary
of The Capital Group Companies, Inc. Capital Guardian has been providing
investment management services since 1968 and manages approximately $123
billion as of December 31, 1999.
Capital Guardian uses a multiple portfolio manager system under which the
assets of the Portfolio for which Capital Guardian serves as Adviser are
divided into several segments. Each segment is individually managed with the
portfolio manager free to decide on company and industry selections as well as
valuation and transaction assessment. An additional portion of the Portfolio's
total assets allocated to Capital Guardian as Adviser is managed by a group of
investment research analysts.
The individual portfolio managers of each segment of the Portfolio's total
assets that will be advised by Capital Guardian as an Adviser, other than that
managed by the group of research analysts, are as follows:
DONNALISA P. BARNUM. Donnalisa Barnum is a Senior Vice President and a
portfolio manager for Capital Guardian. She joined the Capital Guardian
organization in 1986.
MICHAEL R. ERICKSON. Michael Erickson is a Senior Vice President and
portfolio manager for Capital Guardian and a Senior Vice President and
Director for Capital International Limited. He joined the Capital
Guardian organization in 1987.
DAVID I. FISHER. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
THEODORE R. SAMUELS. Theodore Samuels is a Senior Vice President and a
Director for Capital Guardian, as well as a Director of Capital
International Research, Inc. He joined the Capital Guardian organization
in 1981.
EUGENE P. STEIN. Eugene Stein is Executive Vice President, a Director, a
portfolio manager, and
<PAGE>
- ----------
29
- --------------------------------------------------------------------------------
Chairman of the Investment Committee for Capital Guardian. He joined the
Capital Guardian organization in 1972.
TERRY BERKEMEIER. Terry Berkemeier is a Vice President of Capital
International Research, Inc. with U.S. equity portfolio management
responsibility in Capital Guardian Trust Company and research
responsibilities for the global metals and mining industries. He joined
the Capital Guardian organization in 1992.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC ("PIFM"), Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102 was added as an Adviser to the
Portfolio as of May 1, 2000. PIFM and its predecessors have served as manager
or administrator to investment companies since 1987. As of October 31, 1999,
PIFM served as either the manager or administrator to various investment
companies, with aggregate assets of approximately $72 billion.
JENNISON ASSOCIATES LLC ("Jennison"), 466 Lexington Avenue, New York, New York
10017 was added as an Adviser to the Portfolio as of May 1, 2000. PIFM
supervises Jennison. Jennison has served as an investment adviser to
investment companies since 1990 and manages approximately $48.4 billion in
assets as of September 30, 1999.
The individual portfolio managers for that portion of the Portfolio's
total assets that will be advised by PIFM as an Adviser and Jennison are
as follows:
MICHAEL A. DEBALSO. Michael A. DeBalso is a Director, Executive Vice
President, Director of Equity Research and Equity Portfolio Manager of
Jennison. Mr. DeBalso joined Jennison in 1972.
KATHLEEN A. MCCARRAGHER. Ms. McCarragher is a Director, Executive Vice
President, Domestic Growth Equity Investment Strategist and Equity
Portfolio Manager of Jennison. Ms. McCarragher joined Jennison in 1998.
From 1992-1998, she was a Managing Director and Director of Large Cap
Growth Equities at Weiss, Peck & Greer.
PIFM and Jennison are wholly-owned subsidiaries of The Prudential Insurance
Company of America.
------------------------ EQ Advisors Trust
<PAGE>
3
MORE INFORMATION ON PRINCIPAL RISKS
- ------------
30
- --------------------------------------------------------------------------------
Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you and the more you can lose. Like other
investment companies, the value of each Portfolio's shares may be affected by
the Portfolio's investment objective(s), principal investment strategies and
particular risk factors. Consequently, each Portfolio may be subject to
different principal risks. Some of the principal risks of investing in the
Portfolios are discussed below. However, other factors may also affect each
Portfolio's net asset value.
There is no guarantee that a Portfolio will achieve its investment
objective(s) or that it will not lose principal value.
GENERAL INVESTMENT RISKS: Each Portfolio is subject to the following risks:
ASSET CLASS RISK: There is the possibility that the returns from the types of
securities in which a Portfolio invests will underperform returns from the
various general securities markets or different asset classes. Different types
of securities tend to go through cycles of outperformance and underperformance
in comparison to the general securities markets.
MARKET RISK: Each Portfolio's share price moves up and down over the short
term in reaction to stock or bond market movements. This means that you could
lose money over short periods, and perhaps over longer periods during extended
market downturns.
SECURITY SELECTION RISK: The Adviser(s) for each Portfolio rely on the
insights of different specialists in making investment decisions based on the
Portfolio's particular investment objective(s) and investment strategies.
There is the possibility that the specific securities held by a Portfolio will
underperform other funds in the same asset class or benchmarks that are
representative of the general performance of the asset class because of the
Adviser's choice of portfolio securities.
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio may also be subject to the
following risks:
CONVERTIBLE SECURITIES RISK: Convertible securities may include both
convertible debt and convertible preferred stock. Such securities may be
converted into shares of the underlying common stock at either a stated price
or stated rate. Therefore, convertible securities enable you to benefit from
increases in the market price of the underlying common stock. Convertible
securities provide higher yields than the underlying common stocks, but
generally offer lower yields than nonconvertible securities of similar
quality. The value of convertible securities fluctuates in relation to changes
in interest rates and, in addition, fluctuates in relation to the underlying
common stock. Subsequent to purchase by a Portfolio, convertible securities
may cease to be rated or a rating may be reduced below the minimum required
for purchase by that Portfolio. Each Adviser will consider such event in its
determination of whether a Portfolio should continue to hold the securities.
DERIVATIVES RISK: Derivatives are financial contracts whose value depends on,
or is derived from the value of an underlying asset, reference rate or index.
Derivatives include stock options, securities index options, currency options,
forward currency exchange contracts, futures contracts, swaps and options on
futures contracts. Certain Portfolios can use derivatives involving the U.S.
Government and foreign government securities and currencies. Investments in
derivatives can significantly increase your exposure to market risk, or credit
risk of the counterparty. Derivatives also involve the risk of mispricing or
improper valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FIXED INCOME RISK: To the extent that any of the Portfolios invest a
substantial amount of its assets in fixed income securities, a Portfolio may
be subject to the following risks:
<PAGE>
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31
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ASSET-BACKED SECURITIES RISK: The Portfolio's investments in
asset-backed securities represent interests in pools of consumer loans
such as credit card receivables, automobile loans and leases, leases on
equipment such as computers, and other financial instruments and are
subject to certain additional risks. Rising interest rates tend to
extend the duration of asset-backed securities, making them more
sensitive to changes in interest rates. As a result, in a period of
rising interest rates, the Portfolio may exhibit additional volatility.
When interest rates are declining, there are usually more prepayments of
loans which will shorten the life of these securities. Prepayments also
vary based on among other factors, general economic conditions and other
demographic conditions. The reinvestment of cash received from
prepayments will, therefore, usually be at a lower interest rate than
the original investment, lowering the Portfolio's yield.
CREDIT RISK: Credit risk is the risk that the issuer or guarantor of a
debt security or counterparty to a Portfolio's transactions will be
unable or unwilling to make timely principal and/or interest payments,
or otherwise will be unable or unwilling to honor its financial
obligations. Each of the Portfolios may be subject to credit risk to the
extent that it invests in debt securities or engages in transactions,
such as securities loans or repurchase agreements, which involve a
promise by a third party to honor an obligation to the Portfolio.
Credit risk is particularly significant for the Alliance High Yield
Portfolio that invests a material portion of its assets in "JUNK BONDS"
or lower-rated securities (i.e., rated BB or lower by S&P or an
equivalent rating by any other NRSRO or unrated securities of similar
quality). These debt securities and similar unrated securities have
speculative elements or are predominantly speculative credit risks. The
Alliance High Yield Portfolio may also be subject to greater credit risk
because it may invest in debt securities issued in connection with
corporate restructurings by highly leveraged issuers or in debt
securities not current in the payment of interest or principal, or in
default.
INTEREST RATE RISK: The price of a bond or a fixed income security is
dependent upon interest rates. Therefore, the share price and total
return of a Portfolio investing a significant portion of its assets in
bonds or fixed income securities will vary in response to changes in
interest rates. A rise in interest rates causes the value of a bond to
decrease, and vice versa. There is the possibility that the value of a
Portfolio's investment in bonds or fixed income securities may fall
because bonds or fixed income securities generally fall in value when
interest rates rise. The longer the term of a bond or fixed income
instrument, the more sensitive it will be to fluctuations in value from
interest rate changes. Changes in interest rates may have a significant
effect on Portfolios holding a significant portion of their assets in
fixed income securities with long term maturities.
INVESTMENT GRADE SECURITIES RISK: Debt securities are rated by national
bond ratings agencies. Securities rated BBB by S&P or Baa by Moody's are
considered investment grade securities, but are somewhat riskier than
higher rated obligations because they are regarded as having only an
adequate capacity to pay principal and interest, and are considered to
lack outstanding investment characteristics.
JUNK BONDS OR LOWER RATED SECURITIES RISK: Bonds rated below investment
grade by S&P and Moody's are speculative in nature, may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than higher rated fixed income securities. They are usually
issued by companies without long track records of sales and earnings, or
by those companies with questionable credit strength. These bonds are
considered "below
---------------------- EQ Advisors Trust
<PAGE>
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32
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investment grade." The retail secondary market for these "junk bonds"
may be less liquid than that of higher rated securities and adverse
conditions could make it difficult at times to sell certain securities
or could result in lower prices than those used in calculating the
Portfolio's net asset value.
FOREIGN SECURITIES RISK: A Portfolio's investments in foreign securities,
including depositary receipts, involve risks not associated with investing in
U.S. securities and can affect a Portfolio's performance. Foreign markets,
particularly emerging markets, may be less liquid, more volatile and subject
to less government supervision than domestic markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
trades to clear and settle. The specific risks of investing in foreign
securities, among others, include:
CURRENCY RISK: The risk that changes in currency exchange rates will
negatively affect securities denominated in, and/or receiving revenues
in, foreign currencies. Adverse changes in currency exchange rates
(relative to the U.S. dollar) may erode or reverse any potential gains
from a Portfolio's investment in securities denominated in a foreign
currency or may widen existing losses.
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging market countries and/or their securities markets. Generally,
economic structures in these countries are less diverse and mature than
those in developed countries, and their political systems are less
stable. Investments in emerging markets countries may be affected by
national policies that restrict foreign investment in certain issuers or
industries. The small size of their securities markets and low trading
volumes can make investments illiquid and more volatile than investments
in developed countries and such securities may be subject to abrupt and
severe price declines. As a result, a Portfolio investing in emerging
market countries may be required to establish special custody or other
arrangements before investing.
EURO RISK: Certain of the Portfolios may invest in securities issued by
European issuers. On January 1, 1999, 11 of the 15 member states of the
European Monetary Union ("EMU") introduced the "Euro" as a common
currency. During a three-year transitional period, the Euro will coexist
with each participating state's currency and, on July 1, 2002, the Euro
is expected to become the sole currency of the participating states. The
introduction of the Euro will result in the redenomination of European
debt and equity securities over a period of time, which may result in
various legal and accounting differences and/or tax treatments that
otherwise would not likely occur. During this period, the creation and
implementation of suitable clearing and settlement systems and other
operational problems may cause market disruptions that could adversely
affect investments quoted in the Euro.
POLITICAL/ECONOMIC RISK: Changes in economic and tax policies,
government instability, war or other political or economic actions or
factors may have an adverse effect on a Portfolio's foreign investments.
REGULATORY RISK: Less information may be available about foreign
companies. In general, foreign companies are not subject to uniform
accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies.
TRANSACTION COSTS RISK: The costs of buying and selling foreign
securities, including tax, brokerage and custody costs, generally are
higher than those involving domestic transactions.
GROWTH INVESTING RISK: Growth investing generally focuses on companies that,
due to their strong earnings and revenue potential, offer above-average
prospects for capital
<PAGE>
- ----------
33
- --------------------------------------------------------------------------------
growth, with less emphasis on dividend income. Earnings predictability and
confidence in earnings forecasts are an important part of the selection
process. As a result, the price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks.
Advisers using this approach generally seek out companies experiencing some or
all of the following: high sales growth, high unit growth, high or improving
returns on assets and equity, and a strong balance sheet. Such Advisers also
prefer companies with a competitive advantage such as unique management,
marketing or research and development. Growth investing is also subject to the
risk that the stock price of one or more companies will fall or will fail to
appreciate as anticipated by the Advisers, regardless of movements in the
securities market.
LEVERAGING RISK: When a Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in that Portfolio will be more volatile
and all other risks will tend to be compounded. All of the Portfolios may take
on leveraging risk by investing in collateral from securities loans and by
borrowing money to meet redemption requests.
LIQUIDITY RISK: Certain securities held by a Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like. A
Portfolio may have to hold these securities longer than it would like and may
forego other investment opportunities. There is the possibility that a
Portfolio may lose money or be prevented from earning capital gains if it can
not sell a security at the time and price that is most beneficial to the
Portfolio. Portfolios that invest in privately-placed securities, high-yield
bonds, mortgage-backed securities or foreign or emerging market securities,
which have all experienced periods of illiquidity, are subject to liquidity
risks. A particular Portfolio may be more susceptible to some of these risks
than others, as noted in the description of each Portfolio.
MONEY MARKET RISK: Although a money market fund is designed to be a relatively
low risk investment, it is not entirely free of risk. Despite the short
maturities and high credit quality of the Alliance Money Market Portfolio's
investments, increases in interest rates and deteriorations in the credit
quality of the instruments the Portfolio has purchased may reduce the
Portfolio's yield. In addition, the Portfolio is still subject to the risk
that the value of an investment may be eroded over time by inflation.
MULTIPLE-ADVISER RISK: The EQ/Aggressive Stock and EQ/Balanced Portolios
employ multiple Advisers. Each of the Advisers independently chooses and
maintains a portfolio of common stocks for the Portfolio and each is
responsible for investing a specific allocated portion of the Portfolio's
assets. Because each Adviser will be managing its allocated portion of the
Portfolio independently from the other Advisers, the same security may be held
in two different portions of the Portfolio, or may be acquired for one portion
of the Portfolio at a time when the Adviser of another portion deems it
appropriate to dispose of the security from that other portion. Similarly,
under some market conditions, one Adviser may believe that temporary,
defensive investments in short-term instruments or cash are appropriate when
the other Adviser or Advisers believe continued exposure to the equity markets
is appropriate for their portions of the Portfolio. Because each Adviser
directs the trading for its own portion of the Portfolio, and does not
aggregate its transactions with those of the other Advisers, the Portfolio may
incur higher brokerage costs than would be the case if a single Adviser were
managing the entire Portfolio.
PORTFOLIO TURNOVER RISK: Consistent with their investment policies, the
Portfolios also will purchase and sell securities without regard to the effect
on portfolio turnover. Higher portfolio turnover (e.g., over 100% per year)
will cause a Portfolio to incur additional transaction costs that could be
passed through to shareholders.
SECURITIES LENDING RISK: For purposes of realizing additional income, each
Portfolio may lend securities to broker-dealers approved by the Board of
Trustees. In
--------------------- EQ Advisors Trust
<PAGE>
- ----------
34
- --------------------------------------------------------------------------------
addition, the Alliance High Yield Portfolio may make secured loans of its
portfolio securities without restriction. Any such loan of portfolio
securities will be continuously secured by collateral at least equal to the
value of the security loaned. Such collateral will be in the form of cash,
marketable securities issued or guaranteed by the U.S. Government or its
agencies, or a standby letter of credit issued by qualified banks. The risks
in lending portfolio securities, as with other extensions of secured credit,
consist of possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. Loans will only be made to firms deemed by the
Adviser to be of good standing and will not be made unless, in the judgment of
the Adviser, the consideration to be earned from such loans would justify the
risk.
SMALL-CAP AND MID-CAP COMPANY RISK: A Portfolio's investments in small-cap and
mid-cap companies may involve greater risks than investments in larger, more
established issuers. Smaller companies may have narrower product lines, more
limited financial resources and more limited trading markets for their stock,
as compared with larger companies. Their securities may be less well-known and
trade less frequently and in more limited volume than the securities of
larger, more established companies. In addition, small-cap and mid-cap
companies are typically subject to greater changes in earnings and business
prospects than larger companies. Consequently, the prices of small company
stocks tend to rise and fall in value more frequently than the stocks of
larger companies. Although investing in small-cap and mid-cap companies offers
potential for above-average returns, the companies may not succeed and the
value of their stock could decline significantly.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
<PAGE>
4
MANAGEMENT OF THE TRUST
- -----------
35
- --------------------------------------------------------------------------------
This section gives you information on the Trust, the Manager and the Advisers
for the Portfolios. More detailed information concerning each of the Advisers
and portfolio managers is included in the description for each Portfolio in
the section "About The Investment Portfolios."
THE TRUST
The Trust is organized as a Delaware business trust and is registered with the
Securities and Exchange Commission ("SEC") as an open-end management
investment company. The Trust issues shares of beneficial interest that are
currently divided among forty-one (41) Portfolios, each of which has
authorized Class IA and Class IB shares. Each Portfolio has its own
objectives, investment strategies and risks, which have been previously
described in this prospectus.
THE MANAGER
The Equitable Life Assurance Society of the United States ("Equitable"), 1290
Avenue of the Americas, New York, New York 10104, currently serves as the
Manager of the Trust. EQ Financial Consultants, Inc. ("EQFC") previously
served as the Manager of the Trust, until September 17, 1999 when the Trust's
Investment Management Agreement was transferred to Equitable. Equitable is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a wholly-owned subsidiary of AXA Financial, Inc. ("AXA
Financial"), a subsidiary of AXA, a French insurance holding company.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management of the Trust. In the
exercise of that responsibility and under the Multi-Manager Order, the
Manager, without obtaining shareholder approval but subject to the review and
approval by the Board of Trustees, may: (i) select new or additional Advisers
for the Portfolios; (ii) enter into new investment advisory agreements and
materially modify existing investment advisory agreements; and (iii) terminate
and replace the Advisers. The Manager also monitors each Adviser's investment
program and results, reviews brokerage matters, and carries out the directives
of the Board of Trustees. The Manager also supervises the provision of
services by third parties such as the Trust's custodian.
The contractual management fee rates payable by the Trust are at the following
annual percentages of the value of each Portfolio's average daily net assets:
<PAGE>
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36
- --------------------------------------------------------------------------------
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT
DEBT PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield 0.600% 0.575% 0.550% 0.530% 0.520%
- ------------------------------------------------------------------------------------------------
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
- ------------------------------------------------------------------------------------------------
</TABLE>
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.650% 0.600% 0.575% 0.550% 0.525%
- ------------------------------------------------------------------------------------------------
EQ/Balanced 0.600% 0.550% 0.525% 0.500% 0.475%
- ------------------------------------------------------------------------------------------------
Alliance Common Stock 0.550% 0.500% 0.475% 0.450% 0.425%
- ------------------------------------------------------------------------------------------------
Alliance Global 0.750% 0.700% 0.675% 0.650% 0.625%
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ----------
37
- --------------------------------------------------------------------------------
The table below shows the annual rate of the management fees (as a percentage
of each Portfolio's average daily net assets) that the Manager (or the
predecessor Manager for certain of the Portfolios) received in 1999 for
managing each of the Portfolios and the rate of the management fees waived by
the Manager (or the predecessor Manager for certain of the Portfolios) in 1999
in accordance with the provisions of the Expense Limitation Agreement, as
defined directly below, between the Manager and the Trust with respect to
certain of the Portfolios.
MANAGEMENT FEES PAID BY THE PORTFOLIOS IN 1999
ANNUAL RATE OF
RATE FEES
PORTFOLIOS RECEIVED WAIVED
- -----------------------------------------------------
EQ/Aggressive Stock 0.54% 0.00%
EQ/Balanced 0.41% 0.00%
Alliance Common Stock 0.36% 0.00%
Alliance Global 0.63% 0.00%
Alliance High Yield 0.60% 0.00%
Alliance Money Market 0.34% 0.00%
- -----------------------------------------------------
THE ADVISERS
Each Portfolio has one or more Advisers that furnish an investment program for
the Portfolio (or portion thereof for which the entity serves as Adviser)
pursuant to an investment advisory agreement with the Manager. Each Adviser
makes investment decisions on behalf of the Portfolio (or portion thereof for
which the entity serves as Adviser), places all orders for the purchase and
sale of investments for the Portfolio's account with brokers or dealers
selected by such Adviser or the Manager and may perform certain limited
related administrative functions in connection therewith.
The Manager has received an exemptive order, the Multi-Manager Order, from the
SEC that permits the Manager, subject to board approval and without the
approval of shareholders to: (a) employ a new Adviser or additional Advisers
for any Portfolio; (b) enter into new investment advisory agreements and
materially modify existing investment advisory agreements; and (c) terminate
and replace the Advisers without obtaining approval of the relevant Portfolio'
s shareholders. However, the Manager may not enter into an investment advisory
agreement with an "affiliated person" of the Manager (as that term is defined
in Section 2(a)(3) of the 1940 Act) ("Affiliated Adviser"), such as Alliance,
unless the investment advisory agreement with the Affiliated Adviser,
including compensation, is approved by the affected Portfolio's shareholders,
including, in instances in which the investment advisory agreement pertains to
a newly formed Portfolio, the Portfolio's initial shareholder. In such
circumstances, shareholders would receive notice of such action, including the
information concerning the Adviser that normally is provided in an information
statement under Schedule 14C of the Securities Exchange Act of 1934 ("1934
Act").
The Manager pays each Adviser a fee based on the Portfolio's average daily net
assets. No Portfolio is responsible for the fees paid to each of the Advisers.
THE ADMINISTRATOR
Pursuant to an agreement, Equitable currently serves as the Administrator to
the Trust. As Administrator, Equitable provides the Trust with necessary
administrative, fund accounting and compliance services, and makes available
the office space, equipment, personnel and facilities required to provide such
services to the Trust.
Equitable may carry out its responsibilities either directly or through
sub-contracting with third party service providers. For these services, the
Trust pays Equitable $30,000 for each Portfolio, and a monthly fee at the
annual rate of 0.04 of 1% of the first $3 billion of total Trust assets, 0.03
of 1% of the next $3 billion of the total Trust assets; 0.025 of 1% of the
next $4 billion of the total Trust assets; and 0.0225% of 1% of the total
Trust assets in excess of $10 billion.
------------------------- EQ Advisors Trust
<PAGE>
- ----------
38
- --------------------------------------------------------------------------------
THE TRANSFER AGENT
Equitable serves as the transfer agent and dividend disbursing agent of the
Trust and receives no compensation for serving in such capacity.
BROKERAGE PRACTICES
In selecting brokers and dealers, in accordance with Section 28(e) of the 1934
Act, the Manager and each Adviser may consider research and brokerage services
received by the Manager, the Advisers, the Trust or any Portfolio. Subject to
seeking the most favorable net price and execution available, the Manager and
each Adviser may also consider sales of shares of the Trust as a factor in the
selection of brokers and dealers. Finally, at the discretion of the Board, the
Trust may direct the Manager to cause Advisers to effect securities
transactions through broker-dealers in a manner that would help to generate
resources to (i) pay the cost of certain expenses which the Trust is required
to pay or for which the Trust is required to arrange payment or (ii) finance
activities that are primarily intended to result in the sale of Trust shares.
BROKERAGE TRANSACTIONS WITH AFFILIATES
To the extent permitted by law, the Trust may engage in securities and other
transactions with entities that may be affiliated with the Manager or the
Advisers. The 1940 Act generally prohibits the Trust from engaging in
principal securities transactions with an affiliate of the Manager or the
Advisers unless pursuant to an exemptive order from the SEC. For these
purposes, however, the Trust has considered this issue and believes, based
upon advice of counsel, that a broker-dealer affiliate of an Adviser to one
Portfolio should not be treated as an affiliate of an Adviser to another
Portfolio for which such Adviser does not provide investment advice in whole
or in part. The Trust has adopted procedures that are reasonably designed to
provide that any commission it pays to affiliates of the Manager or Advisers
does not exceed the usual and customary broker's commission. The Trust has
also adopted procedures permitting it to purchase securities, under certain
restrictions prescribed by a rule under the 1940 Act, in a public offering in
which an affiliate of the Manager or Advisers is an underwriter.
<PAGE>
5
FUND DISTRIBUTION ARRANGEMENTS
- ----------
39
- --------------------------------------------------------------------------------
The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. AXA Advisors, LLC ("AXA Advisors") serves as one
of the distributors for the Class IA shares of the Trust offered by this
Prospectus as well as one of the distributors for the Class IB shares.
Equitable Distributors, Inc. ("EDI") serves as the other distributor for the
Class IA shares of the Trust as well as the Class IB shares. Both classes of
shares are offered and redeemed at their net asset value without any sales
load. AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors and
EDI are registered as broker-dealers under the 1934 Act and are members of the
National Association of Securities Dealers, Inc.
The Trust has adopted a Distribution Plan under Rule 12b-1 under the 1940 Act
for the Trust's Class IB shares. Under the Class IB Distribution Plan the
Class IB shares of the Trust pay each of the distributors an annual fee to
compensate them for promoting, selling and servicing shares of the Portfolios.
The annual fees equal 0.25% of each Portfolio's average daily net assets. Over
time, the fees will increase your cost of investing and may cost you more than
other types of charges.
<PAGE>
6
PURCHASE AND REDEMPTION
- -----------
40
- --------------------------------------------------------------------------------
The price at which a purchase or redemption is effected is based on the next
calculation of net asset value after an order is placed by an insurance
company or qualified retirement plan investing in or redeeming from the Trust.
Net asset value per share is calculated for purchases and redemption of shares
of each Portfolio by dividing the value of total Portfolio assets, less
liabilities (including Trust expenses and class related expenses, which are
accrued daily), by the total number of outstanding shares of that Portfolio.
The net asset value per share of each Portfolio is determined each business
day at 4:00 p.m. Eastern time. Net asset value per share is not calculated on
days on which the New York Stock Exchange ("NYSE") is closed for trading.
Portfolios that invest a significant portion of their assets in foreign
securities may experience changes in their net asset value on days when a
shareholder may not purchase or redeem shares of that Portfolio because
foreign securities (other than depositary receipts) are valued at the close of
business in the applicable foreign country.
All shares are purchased and redeemed in accordance with the Trust's Amended
and Restated Declaration of Trust and By-Laws. Sales and redemptions of shares
of the same class by the same shareholder on the same day will be netted for
each Portfolio. All redemption requests will be processed and payment with
respect thereto will normally be made within seven days after tenders.
The Trust may suspend redemption, if permitted by the 1940 Act, for any period
during which the New York Stock Exchange is closed or during which trading is
restricted by the SEC or the SEC declares that an emergency exists. Redemption
may also be suspended during other periods permitted by the SEC for the
protection of the Trust's shareholders. If the Board of Trustees determines
that it would be detrimental to the best interest of the Trust's remaining
shareholders to make payment in cash, the Trust may pay redemption proceeds in
whole or in part by a distribution-in-kind of readily marketable securities.
You should note that the Trust is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of each of the
Trust's Portfolios. Market timing strategies are disruptive to the Trust's
Portfolios. If we determine that your transfer patterns among the Trust's
Portfolios reflect a market timing strategy, we reserve the right to take
action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
<PAGE>
7
HOW ASSETS ARE VALUED
- ----------
41
- --------------------------------------------------------------------------------
Values are determined according to accepted practices and all laws and
regulations that apply. The assets of each Portfolio are generally valued as
follows:
o Stocks and debt securities which mature in more than 60 days are valued on
the basis of market quotations.
o Foreign securities not traded directly, including depositary receipts, in
the United States are valued at representative quoted prices in the
currency in the country of origin. Foreign currency is converted into
United States dollar equivalents at current exchange rates. Because
foreign markets may be open at different times than the NYSE, the value of
a Portfolio's shares may change on days when shareholders are not able to
buy or sell them. If events materially affecting the values of the
Portfolios' foreign investments occur between the close of foreign markets
and the close of regular trading on the NYSE, these investments may be
valued at their fair value.
o Short-term debt securities in the Portfolios, other than the Alliance Money
Market Portfolio, which mature in 60 days or less are valued at amortized
cost, which approximates market value. Securities held in the Alliance
Money Market Portfolio are valued at prices based on equivalent yields or
yield spreads.
o Other securities and assets for which market quotations are not readily
available or for which valuation cannot be provided are valued in good
faith by the Valuation Committee of the Board of Trustees of the Trust
using its best judgment.
<PAGE>
8
TAX INFORMATION
- -----------
42
- --------------------------------------------------------------------------------
Each Portfolio of the Trust is a separate regulated investment company for
federal income tax purposes. Regulated investment companies are usually not
taxed at the entity (Portfolio) level. They pass through their income and
gains to their shareholders by paying dividends. Their shareholders include
this income on their respective tax returns. A Portfolio will be treated as a
regulated investment company if it meets specified federal income tax rules,
including types of investments, limits on investments, calculation of income,
and dividend payment requirements. Although the Trust intends that it and each
Portfolio will be operated to have no federal tax liability, if they have any
federal tax liability, that could hurt the investment performance of the
Portfolio in question. Also, any Portfolio investing in foreign securities or
holding foreign currencies could be subject to foreign taxes which could
reduce the investment performance of the Portfolio.
It is important for each Portfolio to maintain its federal income tax
regulated investment company status because the shareholders of the Portfolio
that are insurance company separate accounts will then be able to use a
favorable federal income tax investment diversification testing rule in
determining whether the Contracts indirectly funded by the Portfolio meet tax
qualification rules for variable insurance contracts. If a Portfolio fails to
meet specified investment diversification requirements, owners of non-pension
plan Contracts funded through the Trust could be taxed immediately on the
accumulated investment earnings under their Contracts and could lose any
benefit of tax deferral. Equitable, in its capacity as Administrator therefore
carefully monitors compliance with all of the regulated investment company
rules and variable insurance contract investment diversification rules.
<PAGE>
9
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance for the Trust's Class IA and Class IB shares since May 1, 1997.
With respect to the Portfolios that are advised by Alliance, financial
information in the table below is for the past five (5) years (or, if shorter,
the period of the Portfolio's operations). The information for the Class IA and
Class IB shares have been derived from the financial statements of the Trust,
which have been audited by PricewaterhouseCoopers LLP, independent public
accountants. PricewaterhouseCoopers LLP's report on the Trust's financial
statements as of December 31, 1999 appears in the Trust's Annual Report. The
information should be read in conjunction with the financial statements
contained in the Trust's Annual Report which are incorporated by reference into
the Trust's Statement of Additional Information (SAI) and available upon
request.
- --------
43
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK PORTFOLIO (FKA ALLIANCE AGGRESSIVE STOCK PORTFOLIO)(c)(d):
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $34.15 $36.22 $35.85 $35.68 $30.63
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... 0.12 0.09 0.04 0.09 0.10
Net realized and unrealized gain
(loss) on investments ................. 6.22 (0.28) 3.71 7.52 9.54
------ ------ ------ ------ ------
Total from investment operations........ 6.34 (0.19) 3.75 7.61 9.64
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.12) (0.16) (0.05) (0.09) (0.10)
Dividends in excess of net
investment income ..................... - - - - -
Distributions from realized gains ...... (2.36) (1.72) (3.33) (7.33) (4.49)
Distributions in excess of realized
gains ................................. - - - (0.02) -
Tax return of capital distributions .... - - - - -
------ ------ ------ ------ ------
Total dividends and distributions ...... (2.48) (1.88) (3.38) (7.44) (4.59)
------ ------ ------ ------ ------
Net asset value, end of period ........... $38.01 $34.15 $36.22 $35.85 $35.68
====== ====== ====== ====== ======
Total return ............................. 18.84% 0.29% 10.94% 22.20% 31.63%
======= ======== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $4,368,877 $4,346,907 $4,589,771 $3,865,256 $2,700,515
Ratio of expenses to average net
assets ................................. 0.56% 0.56% 0.54% 0.48% 0.49%
Ratio of net investment income (loss)
to average net assets .................. 0.33% 0.24% 0.11% 0.24% 0.28%
Portfolio turnover rate .................. 87% 105% 123% 108% 127%
<CAPTION>
CLASS IB
--------------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
------------------------------------- DECEMBER 31,
1999 1998 1997 1996
------------ ------------ ----------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..... $34.01 $36.13 $35.83 $37.28
------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... 0.03 0.01 (0.11) (0.01)
Net realized and unrealized gain
(loss) on investments ................. 6.20 (0.29) 3.77 0.85
------ ------ ------ ------
Total from investment operations........ 6.23 (0.28) 3.66 0.84
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.05) (0.12) (0.03) -
Dividends in excess of net
investment income ..................... - - - (0.02)
Distributions from realized gains ...... (2.36) (1.72) (3.33) (0.23)
Distributions in excess of realized
gains ................................. - - - (2.04)
Tax return of capital distributions .... - - - -
------ ------- ------ ------
Total dividends and distributions ...... (2.41) (1.84) (3.36) (2.29)
------ ------- ------ ------
Net asset value, end of period ........... $37.83 $34.01 $36.13 $35.83
====== ====== ====== ======
Total return ............................. 18.55% 0.05% 10.66% 2.32%(b)
====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $233,265 $153,782 $73,486 $613
Ratio of expenses to average net
assets ................................. 0.81% 0.82% 0.81% 0.73%(a)
Ratio of net investment income (loss)
to average net assets .................. 0.07% 0.02% (0.28)% (0.10)%(a)
Portfolio turnover rate .................. 87% 105% 123% 108%
</TABLE>
<PAGE>
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44
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EQ/BALANCED PORTFOLIO (FKA ALLIANCE BALANCED PORTFOLIO)(c)(d):
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $18.51 $17.58 $16.64 $16.76 $14.87
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ................... 0.52 0.56 0.58 0.53 0.54
Net realized and unrealized gain on
investments and foreign currency
transactions ........................... 2.69 2.54 1.86 1.31 2.36
------ ------ ------ ------ ------
Total from investment operations ........ 3.21 3.10 2.44 1.84 2.90
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................. (0.56) (0.50) (0.59) (0.53) (0.54)
Dividends in excess of net
investment income ...................... - - - - -
Distributions from realized gains ....... (1.98) (1.67) (0.91) (1.40) (0.47)
Distributions in excess of realized
gains .................................. - - - (0.03) -
Tax return of capital distributions ..... - - - - -
------ ------- ------- ------- -------
Total dividends and distributions ....... (2.54) (2.17) (1.50) ( 1.96) (1.01)
------ ------- ------- ------- -------
Net asset value, end of period ............ $19.18 $18.51 $17.58 $16.64 $16.76
====== ======= ======= ======= =======
Total return .............................. 17.79% 18.11% 15.06% 11.68% 19.75%
====== ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ......... $2,126,313 $1,936,429 $1,724,089 $1,637,856 $1,523,142
Ratio of expenses to average net
assets .................................. 0.44% 0.45% 0.45% 0.41% 0.40%
Ratio of net investment income to
average net assets ...................... 2.68% 3.00% 3.30% 3.15% 3.33%
Portfolio turnover rate ................... 107% 95% 146% 177% 186%
<CAPTION>
CLASS IB
-------------------------------------
JULY 8, 1998*
YEAR ENDED TO
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------ ------------------
<S> <C> <C>
Net asset value, beginning of period ...... $18.51 $19.48
------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ................... 0.47 0.24
Net realized and unrealized gain on
investments and foreign currency
transactions ........................... 2.69 0.66
------ ------
Total from investment operations ........ 3.16 0.90
------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................. (0.54) (0.20)
Dividends in excess of net
investment income ...................... - -
Distributions from realized gains ....... (1.98) (1.67)
Distributions in excess of realized
gains .................................. - -
Tax return of capital distributions ..... - -
------ ------
Total dividends and distributions ....... (2.52) (1.87)
------ ------
Net asset value, end of period ............ $19.15 $18.51
====== ======
Total return .............................. 17.50% 4.92%(b)
====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ......... $10,701 $10
Ratio of expenses to average net
assets .................................. 0.69% 0.70%(a)
Ratio of net investment income to
average net assets ...................... 2.43% 2.65%(a)
Portfolio turnover rate ................... 107% 95%
</TABLE>
<PAGE>
- -----
45
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK PORTFOLIO(c)(d):
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------------ ------------------ ---------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $24.35 $21.61 $18.23 $16.48 $13.36
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ........... 0.17 0.18 0.14 0.15 0.20
Net realized and unrealized
gain on investments and
foreign currency
transactions ................... 5.84 5.99 5.12 3.73 4.12
------ ------ ------ ------ ------
Total from investment
operations ..................... 6.01 6.17 5.26 3.88 4.32
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income .............. (0.16) (0.15) (0.11) (0.15) (0.20)
Dividends in excess of net
investment income .............. - - - - (0.02)
Distributions from realized
gains .......................... (4.03) (3.28) (1.77) (1.76) (0.95)
Distributions in excess of
realized gains ................. - - - (0.22) (0.03)
Tax return of capital
distributions .................. - - - - -
------- ------- ------ ------ ------
Total dividends and
distributions .................. (4.19) (3.43) (1.88) (2.13) (1.20)
------- ------- ------ ------ ------
Net asset value, end of period..... $26.17 $24.35 $21.61 $18.23 $16.48
======= ======= ====== ====== ======
Total return ...................... 25.19% 29.39% 29.40% 24.28% 32.45%
======= ======= ====== ====== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ......................... $14,951,495 $12,061,977 $9,331,994 $6,625,390 $4,879,677
Ratio of expenses to average
net assets ...................... 0.38% 0.39% 0.39% 0.38% 0.38%
Ratio of net investment
income to average net
assets .......................... 0.65% 0.75% 0.69% 0.85% 1.27%
Portfolio turnover rate ........... 57% 46% 52% 55% 61%
<CAPTION>
CLASS IB
---------------------------------------------------------
OCTOBER 2,*
1996 TO
YEAR ENDED DECEMBER 31, DECEMBER
---------------------------------------- 31,
1999 1998 1997 1996
-------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $24.30 $21.58 $18.22 $17.90
------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ........... 0.10 0.10 0.10 0.02
Net realized and unrealized
gain on investments and
foreign currency
transactions ................... 5.82 6.00 5.11 1.52
------ ------ ------ ------
Total from investment
operations ..................... 5.92 6.10 5.21 1.54
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income .............. (0.14) (0.10) (0.08) -
Dividends in excess of net
investment income .............. - - - (0.03)
Distributions from realized
gains .......................... (4.03) (3.28) (1.77) (0.16)
Distributions in excess of
realized gains ................. - - - (1.03)
Tax return of capital
distributions .................. - - - -
------ ------ ------ ------
Total dividends and
distributions .................. (4.17) (3.38) (1.85) (1.22)
------ ------ ------ ------
Net asset value, end of period..... $26.05 $24.30 $21.58 $18.22
====== ====== ====== ======
Total return ...................... 24.88% 29.06% 29.07% 8.49%(b)
====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ......................... 1,642,066 $834,144 $228,780 $ 1,244
Ratio of expenses to average
net assets ...................... 0.63% 0.64% 0.64% 0.63%(a)
Ratio of net investment
income to average net
assets .......................... 0.39% 0.44% 0.46% 0.61%(a)
Portfolio turnover rate ........... 57% 46% 52% 55%
</TABLE>
----------------------- EQ Advisors Trust
<PAGE>
- -----
46
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL PORTFOLIO(c)(d):
<TABLE>
<CAPTION>
CLASS IA
----------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $19.46 $17.29 $16.92 $15.74 $ 13.87
------ ------ ------ ------ -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ........... 0.10 0.14 0.17 0.21 0.26
Net realized and unrealized
gain on investments and
foreign currency
transactions ................... 7.25 3.56 1.75 2.05 2.32
------ ------ ------ ------ -------
Total from investment
operations ..................... 7.35 3.70 1.92 2.26 2.58
------ ------ ------ ------ -------
LESS DISTRIBUTIONS:
Dividends from net
investment income .............. (0.02) (0.22) (0.36) (0.21) ( 0.25)
Dividends in excess of net
investment income .............. - - - (0.08) -
Distributions from realized
gains .......................... (1.63) (1.31) (1.19) (0.79) ( 0.42)
Distributions in excess of
realized gains ................. - - - - ( 0.03)
Tax return of capital
distributions .................. - - - - ( 0.01)
------ ------ ------ ------ --------
Total dividends and
distributions .................. (1.65) (1.53) ( 1.55) (1.08) ( 0.71)
------- ------ ------ ------ --------
Net asset value, end of period..... $25.16 $19.46 $17.29 $16.92 $ 15.74
======= ====== ====== ====== ========
Total return ...................... 38.53% 21.80% 11.66% 14.60% 18.81%
======= ====== ======= ====== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ......................... $1,869,185 $1,360,220 $1,203,867 $997,041 $686,140
Ratio of expenses to average
net assets ...................... 0.70% 0.71% 0.69% 0.60% 0.61%
Ratio of net investment
income to average net
assets .......................... 0.45% 0.72% 0.97% 1.28% 1.76%
Portfolio turnover rate ........... 93% 105% 57% 59% 67%
<CAPTION>
CLASS IB
-----------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
------------------------------------ DECEMBER 31,
1999 1998 1997 1996
------------ ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $ 19.41 $ 17.27 $ 16.91 $ 16.57
------- ------- ------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ........... 0.03 0.08 0.12 0.02
Net realized and unrealized
gain on investments and
foreign currency
transactions ................... 7.24 3.56 1.76 0.81
------- ------- ------- ---------
Total from investment
operations ..................... 7.27 3.64 1.88 0.83
------- ------- ------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income .............. - (0.19) (0.33) -
Dividends in excess of net
investment income .............. - - - (0.11)
Distributions from realized
gains .......................... (1.63) (1.31) (1.19) (0.10)
Distributions in excess of
realized gains ................. - - - (0.28)
Tax return of capital
distributions .................. - - - -
-------- ------- ------- ---------
Total dividends and
distributions .................. (1.63) (1.50) (1.52) (0.49)
-------- ------- ------- ---------
Net asset value, end of period..... $ 25.05 $19.41 $17.27 $ 16.91
======== ======= ======= =========
Total return ...................... 38.17% 21.50% 11.38% 4.98%(b)
======== ======= ======= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ......................... $121,052 $47,982 $21,520 $ 290
Ratio of expenses to average
net assets ...................... 0.95% 0.96% 0.97% 0.86%(a)
Ratio of net investment
income to average net
assets .......................... 0.16% 0.41% 0.67% 0.48%(a)
Portfolio turnover rate ........... 93% 105% 57% 59%
</TABLE>
<PAGE>
- -----
47
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD PORTFOLIO(C)(D):
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $ 8.71 $ 10.41 $ 10.02 $ 9.64 $ 8.91
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ............. 0.90 1.07 1.04 1.02 0.98
Net realized and unrealized
gain (loss) on investments. ...... (1.19) (1.56) 0.75 1.07 0.73
------- ------- ------- ------- -------
Total from investment
operations ....................... (0.29) (0.49) 1.79 2.09 1.71
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income ........................... (0.96) (1.03) (0.97) (0.98) (0.94)
Dividends in excess of net
investment income ................ - - - (0.03) (0.04)
Distributions from realized
gains ............................ (0.01) (0.18) (0.43) (0.70) -
Distributions in excess of
realized gains ................... - - - - -
Return of capital distributions ... (0.02) - - - -
------- ------- -------- -------- --------
Total dividends and
distributions .................... (0.99) (1.21) (1.40) (1.71) (0.98)
------- ------- -------- -------- --------
Net asset value, end of period ...... $ 7.43 $ 8.71 $ 10.41 $ 10.02 $ 9.64
======= ======= ======== ======== ========
Total return ........................ (3.35)% (5.15)% 18.48% 22.89% 19.92%
======= ======= ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ... $336,292 $405,308 $355,473 $199,360 $118,129
Ratio of expenses to average net
assets ............................ 0.63% 0.63% 0.62% 0.59% 0.60%
Ratio of net investment income to
average net assets ................ 10.53% 10.67% 9.82% 9.93% 10.34%
Portfolio turnover rate ............. 178% 181% 390% 485% 350%
<CAPTION>
CLASS IB
-------------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
-------------------------------------- DECEMBER 31,
1999 1998 1997 1996
------------ ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $ 8.69 $ 10.39 $ 10.01 $ 10.25
------- ------- ------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ............. 0.87 1.04 1.05 0.19
Net realized and unrealized
gain (loss) on investments. ...... (1.18) (1.56) 0.71 0.15
------- ------- ------- ---------
Total from investment
operations ....................... (0.31) (0.52) 1.76 0.34
------- ------- ------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income ........................... (0.95) (1.00) (0.95) (0.03)
Dividends in excess of net
investment income ................ - - - (0.25)
Distributions from realized
gains ............................ (0.01) (0.18) (0.43) (0.01)
Distributions in excess of
realized gains ................... - - - (0.29)
Return of capital distributions ... (0.02) - - -
------- ------- ------- ---------
Total dividends and
distributions .................... (0.98) (1.18) (1.38) (0.58)
------- ------- ------- ---------
Net asset value, end of period ...... $ 7.40 $ 8.69 $ 10.39 $ 10.01
======= ======= ======= =========
Total return ........................ (3.58)% (5.38)% 18.19% 3.32%(b)
======= ======= ======= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ... $230,290 $207,042 $66,338 $ 685
Ratio of expenses to average net
assets ............................ 0.88% 0.88% 0.88% 0.82%(a)
Ratio of net investment income to
average net assets ................ 10.25% 10.60% 9.76% 8.71%(a)
Portfolio turnover rate ............. 178% 181% 390% 485%
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
48
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET PORTFOLIO(c)(d):
<TABLE>
<CAPTION>
CLASS IA
----------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .............................. $ 10.22 $ 10.18 $ 10.17 $ 10.16 $ 10.14
---------- --------- --------- ---------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ............... 0.51 0.53 0.54 0.54 0.57
Net realized and unrealized
gain (loss) on investments ......... - - - (0.01) -
----------- ---------- ---------- ----------- ----------
Total from investment
operations ......................... 0.51 0.53 0.54 0.53 0.57
----------- ---------- ---------- ----------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment
income ............................. (0.45) (0.49) (0.53) (0.52) (0.55)
Dividends in excess of net
investment income .................. - - - - -
Dividends from realized gains ....... - - - - -
----------- ---------- ---------- ----------- ----------
Total dividends and
distributions ...................... (0.45) (0.49) (0.53) (0.52) (0.55)
----------- ---------- ---------- ----------- ----------
Net asset value, end of period ........ $ 10.28 $ 10.22 $ 10.18 $ 10.17 $ 10.16
=========== ========== ========== =========== ==========
Total return .......................... 4.96% 5.34% 5.42% 5.33% 5.74%
=========== ========== ========== =========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ..... $883,988 $723,311 $449,960 $463,422 $386,691
Ratio of expenses to average net
assets .............................. 0.37% 0.37% 0.39% 0.43% 0.44%
Ratio of net investment income to
average net assets .................. 4.91% 5.13% 5.28% 5.17% 5.53%
<CAPTION>
CLASS IB
-----------------------------------------------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996* TO
------------------------------------------------ DECEMBER 31,
1999 1998 1997 1996
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period .............................. $ 10.21 $ 10.17 $ 10.16 $ 10.16
---------- ----------- ---------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ............... 0.49 0.49 0.52 0.11
Net realized and unrealized
gain (loss) on investments ......... (0.01) 0.02 - 0.01
----------- ----------- ----------- ---------
Total from investment
operations ......................... 0.48 0.51 0.52 0.12
----------- ----------- ----------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income ............................. (0.44) (0.47) (0.51) (0.02)
Dividends in excess of net
investment income .................. - - - (0.10)
Dividends from realized gains ....... - - - -
----------- ------------ ----------- ---------
Total dividends and
distributions ...................... (0.44) (0.47) (0.51) (0.12)
----------- ------------ ----------- ---------
Net asset value, end of period ........ $ 10.25 $ 10.21 $ 10.17 $ 10.16
=========== ============ =========== =========
Total return .......................... 4.71% 5.08% 5.16% 1.29%(b)
=========== ============ =========== =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ..... $ 559,713 $ 386,718 $ 123,675 $ 3,184
Ratio of expenses to average net
assets .............................. 0.62% 0.62% 0.63% 0.67%(a)
Ratio of net investment income to
average net assets .................. 4.68% 4.82% 5.02% 4.94%(a)
</TABLE>
- ----------
* Commencement of Operations
** Commenced operations on January 1, 1998.
+ The amount shown for a share outstanding throughout the period does not
accord with the aggregate net gains on investments for that period
because of the timing of sales and repurchases of the Portfolio shares in
relation to fluctuating market value of the investments in the Portfolio.
(a) Annualized
(b) Total return is not annualized.
(c) On October 18, 1999, this Portfolio received, through a substitution
transaction, the assets and liabilities of the Hudson River Trust
Portfolio that followed the same investment objectives as this
Portfolio. The information for each of the preceding periods is that
of the predecessor Hudson River Trust Portfolio. Information for the
year ended December 31, 1999 includes the results of operations of
the predecessor Hudson River Trust Portfolio from January 1, 1999
through October 17, 1999.
(d) Net investment income and capital changes per share are based on
monthly average shares outstanding.
<PAGE>
- -------------
49
- --------------------------------------------------------------------------------
If you wish to know more, you will find additional information about the Trust
and its Portfolios in the following documents, which are available, free of
charge by calling our toll-free number at 1-800-528-0204:
ANNUAL AND SEMI-ANNUAL REPORTS
The Annual and Semi-Annual Reports include more information about the Trust's
performance and are available upon request free of charge. The Annual Reports
usually includes performance information, a discussion of market conditions and
the investment strategies that affected the Portfolios' performance during the
last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI, dated May 1, 2000, is incorporated into this Prospectus by reference
and is available upon request free of charge by calling our toll free number at
1-800-528-0204.
You may visit the SEC's website at www.sec.gov to view the SAI and other
information about the Trust. You can also review and copy information about the
Trust, including the SAI, at the SEC's Public Reference Room in Washington, D.C.
or by electronic request at [email protected] or by writing the SEC's Public
Reference Section, Washington, D.C. 20549-0102. You may have to pay a
duplicating fee. To find out more about the Public Reference Room, call the SEC
at 1-202-942-8090.
Investment Company Act File Number: 811-07953
