ALLIANCE SELECT INVESTOR SERIES FUND INC
485APOS, 2000-11-13
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         As filed with the Securities and Exchange
              Commission on November 13, 2000


                                          File Nos. 333-8818
                                                    811-9176

            SECURITIES AND EXCHANGE COMMISSION

                  Washington, D.C. 20549

                __________________________

                         FORM N-1A
  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                  Pre-Effective Amendment No.              X


                  Post-Effective Amendment No. 10


                          and/or

             REGISTRATION STATEMENT UNDER THE
                INVESTMENT COMPANY ACT 1940


                      Amendment No. 11                     X


              _______________________________

           Alliance Select Investor Series, Inc.
    (Exact Name of Registrant as Specified in Charter)

  1345 Avenue of the Americas, New York, New York  10105
    (Address of Principal Executive Office)  (Zip Code)

    Registrant's Telephone Number, including Area Code:
                      (212) 969-1000

               _____________________________

                   EDMUND P. BERGAN, JR.
             Alliance Capital Management L.P.
                1345 Avenue of the Americas





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                 New York, New York  10105
          (Name and address of agent for service)

               Copies of communications to:
                    Thomas G. MacDonald
                    Seward & Kissel LLP
                  One Battery Park Plaza
                 New York, New York 10004

It is proposed that this filing will become effective (check
appropriate box)


        immediately upon filing pursuant to paragraph (b)
        on (date) pursuant to paragraph (b)
        60 days after filing pursuant to paragraph (a)(1)
        on (date) pursuant to paragraph (a)(1)
     X  75 days after filing pursuant to paragraph (a)(2)
        on (date) pursuant to paragraph (a)(2) of Rule 485.


If appropriate, check the following box:
        This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.


This Post-Effective Amendment No. 10 relates solely to the
Small Cap Growth Portfolio of the Registrant.  No
information contained in the Registrant's Registration
Statement relating solely to the Premier Portfolio, the
Technology Portfolio or the Biotechnology Portfolio of the
Registrant is amended or superseded hereby.






<PAGE>


Alliance Select Investor Series,
Small Cap Growth Portfolio

The Small Cap Growth Portfolio is a portfolio of Alliance Select
Investor Series, Inc., an open-end management investment company
structured as a series fund that offers a selection of investment
alternatives to the sophisticated investor.




    Prospectus and Application

    [____________], 2001



The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
Prospectus.  Any representation to the contrary is a criminal
offense.


                                                AllianceCapital T






Investment Products Offered
> Are Not FDIC Insured
> May Lose Value
> Are Not Bank Guaranteed








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                        TABLE OF CONTENTS
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                                                             Page

RISK/RETURN SUMMARY......................................

FEES AND EXPENSES OF THE FUND............................

GLOSSARY.................................................

DESCRIPTION OF THE FUND..................................
Investment Objective and Principal Policies and Risks....
Description of Additional Investment Practices...........
Additional Risk Considerations...........................

MANAGEMENT OF THE FUND...................................

PURCHASE AND SALE OF SHARES..............................
How The Fund Values Its Shares...........................
How To Buy Shares........................................
Initial Offering.........................................
How To Exchange Shares...................................
How To Sell Shares.......................................

DIVIDENDS, DISTRIBUTIONS AND TAXES.......................

DISTRIBUTION ARRANGEMENTS................................

GENERAL INFORMATION......................................

The Fund's investment adviser is Alliance Capital Management
L.P., a global investment manager providing diversified services
to institutions and individuals through a broad line of
investments including more than 100 mutual funds.

RISK/RETURN SUMMARY

The following is a summary of certain key information about
Alliance Select Investor Series, Small Cap Growth Portfolio.  The
Risk/Return Summary describes the Fund's objectives, principal
investment strategies, principal risks and fees.  This Summary
includes a short discussion of some of the principal risks of
investing in the Fund.

A more detailed description of the Fund, including the risks
associated with investing in the Fund, can be found further back



                                2





<PAGE>


in this Prospectus.  Please be sure to read this additional
information BEFORE you invest.  The Fund may at times use certain
types of leverage, including short selling, and derivatives
strategies.  The use of these techniques involves special risks
that are discussed in this prospectus.

Other important things for you to note:

    --   You may lose money by investing in the Fund.

    --   An investment in the Fund is not a deposit in a bank and
         is not insured or guaranteed by the Federal Deposit
         Insurance Corporation or any other government agency.






































                                3





<PAGE>


SMALL CAP GROWTH PORTFOLIO
-----------------------------------------------------------------

OBJECTIVE:

The Fund's investment objective is long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests primarily in a diversified portfolio of equity
securities of companies with relatively small market
capitalizations.  Under normal circumstances, the Fund will
invest at least 65%, and normally substantially more, of the
value of its total assets in these types of securities.  The
Fund's investment policies, which are aggressive, emphasize
investment in quality companies that are demonstrating improving
fundamentals and favorable earnings momentum.  In selecting
securities for the Fund's portfolio, Alliance looks for
companies, primarily those companies within the Russell 2500(TM)
Growth Index, that have strong, experienced management teams,
strong market positions, and the potential to support above
average earnings growth relative to the companies in the Russell
2500(TM) Growth Index.  Alliance expects that the Fund's emphasis
on particular industries and sectors will generally resemble that
of the Russell 2500(TM) Growth Index.  However, in making
specific investment decisions for the Fund, Alliance will employ
a "bottoms-up" stock selection process, so that at any time the
Fund's emphasis on a particular industry or sector may vary
significantly from that of the Russell 2500(TM) Growth Index.
Companies involved in the technology and health care sectors may
from time to time constitute a significant portion of the Russell
2500(TM) Growth Index, and accordingly the Fund's portfolio may
also invest significantly in these companies.  The Fund invests
in both well-known and established companies and in newer and
less seasoned companies.

In order to take advantage of investment opportunities in both
rising and declining markets, the Fund may engage in substantial
short selling and may use certain other investment practices,
including leverage, options, futures and forward contracts.  In
particular, the Fund expects that from time to time it may
leverage its portfolio by up to 33 1/3% of its total assets for
speculative purposes.  Alliance will look to use this leverage to
increase or decrease the Fund's investments in selected
securities.  The Fund may also invest in non-convertible bonds,
preferred stocks and foreign securities.





                                4





<PAGE>


PRINCIPAL RISKS:

Among the principal risks of investing in the Fund is market
risk, which is the risk of losses from adverse changes in the
stock market.  The Fund's investments in smaller capitalization
companies tend to be more volatile than in investments in
companies with larger capitalizations.  The Fund's investments in
small capitalization stocks may have additional risks because
these companies tend to have limited product lines, markets, or
financial resources.  Depending on the Fund's investments at a
particular time, the Fund may also have industry/sector risk.
Because the Fund may use substantial leverage including bank
borrowings, and short selling and other derivatives strategies
speculatively to enhance returns, it is subject to greater risk
and its net asset value may be more volatile than other funds,
particularly in periods of market declines.  To the extent that
the Fund invests in non-convertible bonds, preferred stocks and
foreign stocks, your investment has interest rate risk, credit
risks, foreign risk, and currency risk.

BAR CHART AND PERFORMANCE TABLE:
-----------------------------------------------------------------

There is no bar chart or performance table for the Fund because
it has not completed a full calendar year of operations.


























                                5





<PAGE>


-----------------------------------------------------------------
                  FEES AND EXPENSES OF THE FUND
-----------------------------------------------------------------

This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.

SHAREHOLDER FEES (fees paid directly from your investment)

                   Class A Shares  Class B Shares  Class C Shares

Maximum Sales
Charge (Load)
Imposed on
Purchases
(as a percentage
of offering price)       4.25%           None           None

Maximum Deferred
Sales Charge (Load)
(as a percentage of
original purchase
price or redemption
proceeds, whichever
is lower)                None            4.0%*          1.0%**

Exchange Fee             None            None           None

*   Class B Shares automatically convert to Class A Shares after
    8 years.  The CDSC decreases over time.  For Class B shares,
    the CDSC decreases 1.00% annually to 0% after the 4th year.

**  For Class C shares, the CDSC is 0% after the first year.


ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
Fund assets)














                                6





<PAGE>


                                        Operating Expenses
                                  ------------------------------
                                  Class A   Class B   Class C

Management fees (a)               [____]%   [____]%   [____]%
Distribution (12b-1) fees         [____]%   [____]%   [____]%
Other expenses                    [____]%   [____]%   [____]%

                                  _______   _______   _______
Total Fund operating expenses (b) [____]%   [____]%   [____]%
                                  =======   =======   =======

EXAMPLES

The Examples are to help you compare the cost of investing in the
Fund with the cost of investing in other funds.  They assume that
you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods.  They
also assume that your investment has a 5% return each year, that
the Fund's operating expenses stay the same and that all
dividends and distributions are reinvested.  Your actual costs
may be higher or lower.

                                    Examples
                -------------------------------------------------

                -------------------------------------------------
                Class A   Class B+  Class B++ Class C+  Class C++
                -------------------------------------------------
After 1 Yr.     $[______] $[______] $[______] $[______] $[______]
After 3 Yrs.    $[______] $[______] $[______] $[______] $[______]


(a)    The basic management fee is [____]% but it may vary from
       [____]% to [_____]% depending on the Fund's performance
       compared to the Russell 2500(TM) Growth Index.

(b)    Alliance has contractually agreed to waive its management
       fees and/or to bear expenses of the Fund through
       [                  ] to the extent necessary to prevent
       total fund operating expenses, on an annualized basis,
       from exceeding [      ]% for Class A shares and [       ]%
       for Classes B & C shares.  The fees waived and expenses
       borne by Alliance during this period may be reimbursed by
       the Fund during the three years after commencement of
       operations.  No reimbursement payment will be made that
       would cause the Fund's total annualized operating expenses
       to exceed these percentages or cause the total of the



                                7





<PAGE>


       payments to exceed the Fund's total initial organizational
       and offering expenses.

+      Assumes redemption at the end of period.

++     Assumes no redemption at end of period.

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

This Prospectus uses the following terms.

TYPES OF SECURITIES

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

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

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

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

Rule 144A securities are securities that may be resold pursuant
to Rule 144A of the Securities Act.

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

Non-U.S. Company is an entity that (i) is organized under the
laws of a foreign country, (ii) has its principal place of
business in a foreign country, and (iii) issues equity or debt
securities that are traded principally in a foreign country.
Securities issued by non-U.S. companies are known as foreign
securities.







                                8





<PAGE>


RATING AGENCIES

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

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

OTHER

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

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

Commission is the Securities and Exchange Commission.

Exchange is the New York Stock Exchange.

Russell 2500(TM) Growth Index is an index measuring the
performance of those Russell 2500 companies with higher price-to-
book ratios and higher forecasted growth values.

Securities Act is the Securities Act of 1933, as amended.

-----------------------------------------------------------------
                     DESCRIPTION OF THE FUND
-----------------------------------------------------------------

This section of the Prospectus provides a more complete
description of the Fund's investment objective, principal
strategies and principal risks.  Of course, there can be no
assurance that the Fund will achieve its investment objective.

Please note:

--   Additional discussion of the Fund's investments, including
the risks of the investments that appear in bold type can be
found in the discussion under Description of Additional
Investment Practices following this section.

--   Additional information about risks of investing in the Fund
can be found in the discussions under Additional Risk
Considerations.

--   Additional descriptions of the Fund's strategies and
investments, as well as other strategies and investments not
described below, may be found in the Fund's Statement of
Additional Information or SAI.





                                9





<PAGE>


--   The Fund's investment objective is "fundamental" and cannot
be changed without a shareholder vote and, except as noted, the
Fund's investment policies are not fundamental and thus can be
changed without a shareholder vote.  Where an investment policy
or restriction has a percentage limitation, such limitation is
applied at the time of investment.  Changes in the market value
of securities in the Fund's portfolio after they were purchased
by the Fund will not cause the Fund to be in violation of the
policy.

INVESTMENT OBJECTIVE AND PRINCIPAL POLICIES AND RISKS

INVESTMENT OBJECTIVE

The Fund's investment objective is long-term growth of capital.

PRINCIPAL POLICIES

In seeking to achieve its objective, the Fund invests primarily
in a diversified portfolio of equity securities of companies with
relatively small market capitalizations.  Generally, the market
capitalization of the companies in the Fund's portfolio will
range from $100 million to $10 billion.  Under normal
circumstances, the Fund will invest at least 65%, and normally
substantially more, of the value of its total assets in these
types of securities.  The Fund's investment policies, which are
aggressive, emphasize investment in quality companies, primarily
those included in the Russell 2500(TM) Growth Index, that are
demonstrating improving fundamentals and favorable earnings
momentum.  Alliance expects that the Fund's emphasis in
particular industries or sectors will generally be within the
range of the Russell 2500(TM) Growth Index.  However, in making
specific investment decisions for the Fund, Alliance employs a
"bottoms-up" stock selection process, so that at any time the
Fund's emphasis on a particular industry or sector may vary
significantly from that of the Russell 2500(TM) Growth Index.  In
recent years, companies that are involved in the technology and
health care sectors have, from time to time, constituted a
significant portion of the Russell 2500(TM) Growth Index.  The
Fund may invest significantly in companies involved in the
technology or health care sectors during times when those
companies make up a larger proportion of the Russell 2500(TM)
Growth Index.  The Fund invests in both well-known and
established companies and in newer and less seasoned companies.
An investment in the Fund is appropriate only for sophisticated
investors who understand and are willing to assume the risks of
the Fund's aggressive investment policies.




                               10





<PAGE>


As one of the largest multi-national investment firms, Alliance
has substantial experience in small-cap investing and currently
manages more than $3.7 billion in small cap investments in both
mutual fund and institutional accounts.  Alliance has built a
team of five specialized small cap investment professionals that
provide on the ground, fundamental and quantitative research on
small-cap investing.  In addition, the small cap team has at its
disposal Alliance's large internal equity research staff to
assist in making investment decisions for the Fund.

In managing the Fund, Alliance's investment strategy emphasizes
"bottom-up" fundamental research.  Alliance thoroughly researches
and analyses each issuer and its potential for growth in
earnings, revenue, cash flow and/or reserves.  In selecting
securities for the Fund's portfolio, Alliance looks for companies
that have strong, experienced management teams, attractive
products with strong market positions, and the potential to
support above average earnings growth relative to the average
company within the Russell 2500(TM) Growth Index.  From time to
time, Alliance expects to employ substantial leverage either
through the form of bank borrowings or through investment
techniques such as short sales and options, speculatively to
increase or decrease its exposure to selected securities up to
33%.

In determining when to sell or short a security, Alliance will
generally look to factors such as deteriorating fundamentals,
decelerating earnings growth, eroding competitive positions, or
other similar factors.  Typically, the growth of a company's
market capitalization above $10 billion, alone, will not cause
Alliance to disposes of the security.

The Fund may also

--   Invest up to 20% of its total assets in convertible
     securities;

--   Write covered put and call options and purchase put and call
     options on U.S. and foreign security exchanges and over the
     counter, including options on market indices, and write
     uncovered options;

--   Invest up to 15% of its net assets in illiquid securities.

--   Invest up to 10% of its total assets in foreign securities;

--   Invest up to 10% of its total assets in rights and warrants;




                               11





<PAGE>


--   Enter into contracts for the purchase and sale of stock
     index futures and purchase and write put and call options on
     such future contracts;

--   Enter into contracts for the purchase and sale for the
     future delivery of contracts based on financial indices,
     including any index of U.S. Government securities of
     securities issued by foreign government entities;

--   Purchase and write put and call options on foreign
     currencies;

--   Enter into currency swaps for hedging purposes;

--   Make secured loans of portfolio securities of up to 30% of
     its total assets; and

--   Enter into repurchase agreements.

PRINCIPAL RISKS

Among the principal risks of investing in the Fund are:

--   Market Risk This is the risk that the value of the Fund's
investments will fluctuate as the stock markets fluctuate and
that prices overall will decline over short or longer-term
periods.

--   Capitalization Risk This is the risk of investments in small
capitalization companies.  Investments in small-cap companies may
be more volatile than investments in large-cap companies.  The
Fund is particularly subject to this risk.  Investments in small-
cap companies tend to be more volatile than investments in large-
cap or mid-cap companies.  The Fund's investments in smaller
capitalization stocks may have additional risks because these
companies often have limited product lines, markets or financial
resources.

--   Industry/Sector Risk This is the risk of investments in a
particular industry/sector.  Market or economic factors affecting
that industry sector or group of related industries could have a
major effect on the value of the Fund's investments.  To the
extent the Fund invests a greater proportion of its assets in the
health care and technology sectors, it is subject to this risk.
In addition, technology stocks, especially those of smaller,
less-seasoned companies, tend to be more volatile than the
overall market.




                               12





<PAGE>


--   Derivative and Leverage Risk The Fund may make substantial
use of derivatives and employ specialized trading techniques such
as short sales, options, futures, forwards, and other leveraging
techniques to increase its exposure to certain selected
securities.  Alliance employs these techniques speculatively to
enhance returns and not merely as hedging tools.  These
techniques are riskier than many investment strategies and will
result in greater volatility for the Fund, particularly in
periods of market declines.

--   Foreign Risk This is the risk of investments in issuers
located in foreign countries.  Investments in foreign securities
may experience more rapid and extreme changes in value than
investments in securities of U.S. companies.  This is because the
securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries.  Additionally, foreign securities issuers
are usually not subject to the same degree of regulation as U.S.
issuers.  Reporting, accounting, and auditing standards of
foreign countries differ, in some cases significantly, from U.S.
standards.  Also, nationalization, expropriation or confiscatory
taxation, currency blockage, or political changes or diplomatic
developments could adversely affect the Fund's investments in a
foreign country.  In the event of nationalization, expropriation,
or other confiscation, the Fund could lose its entire investment.

--   Currency Risk This is the risk that fluctuations in the
exchange rates between the U.S. Dollar and foreign currencies may
negatively affect the value of the Fund's investments.

--   Management Risk The Fund is subject to management risk
because it is an actively managed investment Fund.  Alliance will
apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there is no guarantee that
its techniques will produce the intended result.

Portfolio Turnover.  The Fund is actively managed and, in some
cases in response to market conditions, the Fund's portfolio
turnover may exceed 100%.  A higher rate of portfolio turnover
increases brokerage and other expenses, which must be borne by
the Fund and its shareholders.  High portfolio turnover also may
result in the realization of substantial net short-term capital
gains, which, when distributed, are taxable to shareholders.

Temporary Defensive Position.  For temporary defensive purposes,
the Fund may reduce its position in equity securities and
increase without limit its position in short-term, liquid, high-
grade debt securities, which may include U.S. Government



                               13





<PAGE>


securities, bank deposits, money market instruments, short-term
debt securities, including notes and bonds, or hold its assets in
cash.  While the Fund is investing for temporary defensive
purposes, it may not meet its investment objective.

DESCRIPTION OF ADDITIONAL INVESTMENT PRACTICES

This section describes the investment practices of the Fund and
risks associated with these practices.

Convertible Securities.  Prior to conversion, convertible
securities have the same general characteristics as
nonconvertible debt securities, which generally provide a stable
stream of income with generally higher yields than those of
equity securities of the same or similar issuers.  The price of a
convertible security will normally vary with changes in the price
of the underlying equity security, although the higher yield
tends to make the price of the convertible security less volatile
than that of the underlying equity security.  As with debt
securities, the market values of convertible securities tend to
decrease as interest rates rise and increase as interest rates
fall.  While convertible securities generally offer lower
interest yields than non-convertible debt securities of similar
quality, they offer investors the potential to benefit from
increases in the market prices of the underlying common stocks.
Convertible securities that are rated Baa or lower by Moody's and
BBB or lower by S&P or, if unrated, determined by Alliance to be
of equivalent quality, may share some or all of the risks of non-
convertible debt securities with those ratings.  The Fund may
invest up to 20% of its total assets in convertible securities.

Currency Swaps.  Currency swaps involve the individually
negotiated exchange by the Fund with another party of a series of
payments in specified currencies.  A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency.  Therefore, the entire principal value of a
currency swap is subject to the risk that the swap counterparty
will default on its contractual delivery obligations.  The Fund
will enter into currency swaps for hedging purposes only.  The
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the counterparty is rated in the highest rating category of at
least one nationally recognized rating organization at the time
of entering into the transaction.  If there is a default by the
other party to such a transaction, the Fund will have contractual
remedies under the transaction agreements.




                               14





<PAGE>


Illiquid Securities.  The Fund will limit its investment in
illiquid securities to no more than 15% of its net assets.
Illiquid securities generally include (i) direct placements or
other securities that are subject to legal or contractual
restrictions on resale or for which there is no readily available
market (e.g., when trading in the security is suspended or, in
the case of unlisted securities, when market makers do not exist
or will not entertain bids or offers), including many
individually negotiated currency swaps and any assets used to
cover currency swaps, (ii) over-the-counter options and assets
used to cover over-the-counter options, and (iii) repurchase
agreements not terminable within seven days.

Because of the absence of a trading market for illiquid
securities, the Fund may not be able to realize the price at
which they are carried on the Fund's books upon sale.  Alliance
will monitor the illiquidity of the Fund's investments in such
securities.  Rule 144A securities will not be treated as
"illiquid" for purposes of this limit on investments if they meet
certain liquidity guidelines established by the Fund or the
Adviser.

The Fund may not be able to readily sell securities for which
there is no ready market.  Such securities are unlike securities
that are traded in the open market and can be expected to be sold
immediately if the market is adequate.  The sale price of
illiquid securities may be lower or higher than Alliance's most
recent estimate of their fair value.  Generally, less public
information is available about the issuers of such securities
than about companies whose securities are traded on an exchange.
To the extent that these securities are foreign securities, there
is no law in many of the countries in which the Fund may invest
similar to the Securities Act requiring an issuer to register the
sale of securities with a governmental agency or imposing legal
restrictions on resales of securities, either as to length of
time the securities may be held or manner of resale.  There may,
however, be contractual restrictions on resale of securities.

Loans of Portfolio Securities.  The Fund may make secured loans
of its portfolio securities of up to 30% of its total assets to
entities with which it can enter into repurchase agreements,
provided that cash and/or liquid high grade debt securities equal
to at least 100% of the market value of the securities loaned are
deposited and maintained by the borrower with the Fund.  The risk
in lending portfolio securities, as with other extensions of
credit, consists of the possible loss of rights in the collateral
should the borrower fail financially.  In determining whether to
lend securities to a particular borrower, Alliance will consider



                               15





<PAGE>


all relevant facts and circumstances, including the
creditworthiness of the borrower.  While securities are on loan,
the borrower will pay the Fund any income from the securities.
The Fund may invest any cash collateral in portfolio securities
and earn additional income, or receive an agreed-upon amount of
income from a borrower who has delivered equivalent collateral.
The Fund will have the right to regain record ownership of loaned
securities to exercise beneficial rights such as voting rights,
subscription rights, and rights to dividends, interest or
distributions.  The Fund may pay reasonable finders',
administrative, and custodial fees in connection with a loan.

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

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

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

If an option written by the Fund were exercised, the Fund would
be obligated to purchase (in the case of a put) or sell (in the
case of a call) the underlying security at the exercise price.



                               16





<PAGE>


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

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

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

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

Futures Contracts and Options on Futures Contracts.  A "sale" of
a futures contract means the acquisition of a contractual
obligation to deliver the securities or foreign currency or other
commodity called for by the contract at a specified price on a
specified date.  A "purchase" of a futures contract means the
incurring of an obligation to acquire the securities or foreign



                               17





<PAGE>


currency or other commodity called for by the contract at a
specified price on a specified date.  The purchaser of a futures
contract on an index agrees to take or make delivery of an amount
of cash equal to the difference between a specified dollar
multiple of the value of the index on the expiration date of the
contract ("current contract value") and the price at which the
contract was originally struck.  No physical delivery of the
securities underlying the index is made.

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

The Fund will not enter into any futures contracts or options on
futures contracts if immediately thereafter the market values of
the outstanding futures contracts of the Fund and the currencies
and futures contracts subject to outstanding options written by
the Fund would exceed 100% of its total assets.

Repurchase Agreements.  A repurchase agreement arises when a
buyer purchases a security and simultaneously agrees to resell it
to the vendor at an agreed-upon future date, normally a day or a
few days later.  The resale price is greater than the purchase
price, reflecting an agreed-upon interest rate for the period the
buyer's money is invested in the security.  Such agreements
permit the Fund to keep all of its assets at work while retaining
"overnight" flexibility in pursuit of investments of a longer-
term nature.  If a vendor defaults on its repurchase obligation,
the Fund would suffer a loss to the extent that the proceeds from
the sale of the collateral were less than the repurchase price.
If a vendor goes bankrupt, the Fund might be delayed in, or be
prevented from, selling the collateral for its benefit.  Alliance
monitors the creditworthiness of the vendors with which the Fund
enters into repurchase agreements.

Rights and Warrants.  The Fund will invest in rights or warrants
only if the underlying equity securities themselves are deemed
appropriate by Alliance for inclusion in the Fund's portfolio.
Rights and warrants entitle the holder to buy equity securities
at a specific price for a specific period of time.  Rights are
similar to warrants except that they have a substantially shorter
duration.  Rights and warrants may be considered more speculative
than certain other types of investments in that they do not



                               18





<PAGE>


entitle a holder to dividends or voting rights with respect to
the underlying securities nor do they represent any rights in the
assets of the issuing company.  The value of a right or warrant
does not necessarily change with the value of the underlying
securities, although the value of a right or warrant may decline
because of a decrease in the value of the underlying stock, the
passage of time, or a change in perception as to the potential of
the underlying stock, or any combination of these factors.  If
the market price of the underlying security is below the exercise
price of the warrant on the expiration date, the warrant will
expire worthless.  Moreover, a right or warrant ceases to have
value if it is not exercised prior to the expiration date.  The
Fund may invest up to 10% of its total assets in rights and
warrants.

Short Sales.  The Fund may utilize short selling in order to
attempt both to protect its portfolio against the effects of
potential downtrends in the securities markets and as a means of
enhancing its overall performance.  A short sale is a transaction
in which the Fund sells a security it does not own but has
borrowed in anticipation that the market price of that security
will decline.  The Fund may be required to pay a fee to borrow
the security and to pay over to the lender any payments received
on the security.

If the price of the security sold short increases between the
time of the short sale and the time the Fund replaces the
borrowed security, the Fund will incur a loss; conversely, if the
price declines, the Fund will realize a capital gain.  Although
the Fund's gain is limited by the price at which it sold the
security short, its potential loss is unlimited.  The Fund may
engage in short sales for up to 33% of its total assets.

Stock Index Futures.  The Fund may purchase and sell stock index
futures as a hedge against movements in the equity markets.
There are several risks in connection with the use of stock index
futures by the Fund as a hedging device.  One risk arises because
of the imperfect correlation between movements in the price of a
stock index future and movements in the price of the securities
which are the subject of the hedge.  The price of a stock index
future may move more than or less than the price of the
securities being hedged.  If the price of a stock index future
moves less than the price of the securities which are the subject
of the hedge, the hedge will not be fully effective but, if the
price of the securities being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had
not hedged at all.  If the price of the securities being hedged
has moved in a favorable direction, this advantage will be



                               19





<PAGE>


partially offset by the loss on the index futures contract.  If
the price of the index future moves more than the price of the
stock, the Fund will experience either a loss or gain on the
futures contract which will not be completely offset by movements
in the price of the securities which are subject to the hedge.

To compensate for the imperfect correlation of movements in the
price of securities being hedged and movements in the price of a
stock index future, the Fund may buy or sell stock index futures
contracts in greater dollar amount than the dollar amount of
securities being hedged if the volatility over a particular time
period of the prices of such securities has been greater than the
volatility over such time period of the stock index, or if
otherwise deemed to be appropriate by Alliance.  Conversely, the
Fund may buy or sell fewer stock index futures contracts if the
volatility over a particular time period of the prices of the
securities being hedged is less than the volatility over such
time period of the stock index, or it is otherwise deemed to be
appropriate by Alliance.  It is also possible that, where the
Fund has sold futures to hedge its portfolio against a decline in
the market, the market may advance and the value of securities
held in the Fund may decline.  If this occurred, the Fund would
lose money on the futures and also experience a decline in value
in its portfolio securities.  However, over time the value of a
diversified portfolio should tend to move in the same direction
as the market indices upon which the index futures are based,
although there may be deviations arising from differences between
the composition of the Fund and the stock comprising the index.

Where a stock index futures contract is purchased to hedge
against a possible increase in the price of stock before the Fund
is able to invest its cash (or cash equivalents) in stocks (or
options) in an orderly fashion, it is possible that the market
may decline instead.  If the Fund then concludes not to invest in
stock or options at that time because of concern as to possible
further market decline or for other reasons, the Fund will
realize a loss on the futures contract that is not offset by a
reduction in the price of securities purchased.

In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in stock
index futures and the portion of the portfolio being hedged, the
price of stock index futures may not correlate perfectly with
movement in the stock index due to certain market distortions.
Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting
transactions which could distort the normal relationship between
the index and futures markets.  From the point of view of



                               20





<PAGE>


speculators, the deposit requirements in the futures market are
less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures
market may also cause temporary price distortions.  Due to the
possibility of price distortion in the futures market, and
because of the imperfect correlation between the movements in a
stock index and movements in the price of stock index futures, a
correct forecast of general market trends by the investment
adviser may still not result in a successful hedging transaction
over a short time frame.

Positions in stock index futures may be closed out only on an
exchange or board of trade which provides a secondary market for
such futures.  Although the Fund intends to purchase or sell
futures only on exchanges or boards of trade where there appear
to be active secondary markets, there is no assurance that a
liquid secondary market on any exchange or board of trade will
exist for any particular futures contract or at any particular
time.  In such event, it may not be possible to close a futures
investment position, and in the event of adverse price movements,
the Fund would continue to be required to make daily cash
payments of variation margin.  However, in the event that futures
contracts have been used to hedge portfolio securities, such
securities will not be sold until the futures contract can be
terminated.  In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses
on the futures contract.  As described above, however, there is
no guarantee that the price of the securities will in fact
correlate with the price movements in the futures contract and
thus provide an offset on a futures contract.

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

General.  The successful use of the investment practices
described above draws upon Alliance's special skills and
experience and usually depends on Alliance's ability to forecast
price movements or currency exchange rate movements correctly.
Should prices or exchange rates move unexpectedly, the Fund may
not achieve the anticipated benefits of the transactions or may
realize losses and thus be in a worse position than if such
strategies had not been used.  Unlike many exchange-traded



                               21





<PAGE>


futures contracts and options on futures contracts, there are no
daily price fluctuation limits for certain options on currencies
and forward contracts, and adverse market movements could
therefore continue to an unlimited extent over a period of time.
In addition, the correlation between movements in the prices of
such instruments and movements in the prices of the securities
and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses.

The Fund's ability to dispose of its positions in futures
contracts, options and forward contracts depends on the
availability of liquid markets in such instruments.  Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still
developing, and there is no public market for forward contracts.
It is impossible to predict the amount of trading interest that
may exist in various types of futures contracts, options, and
forward contracts.  If a secondary market does not exist for an
option purchased or written by the Fund, it might not be possible
to effect a closing transaction in the option (i.e., dispose of
the option) with the result that (i) an option purchased by the
Fund would have to be exercised in order for the Fund to realize
any profit and (ii) the Fund may not be able to sell portfolio
securities or currencies covering an option written by the Fund
until the option expires or it delivers the underlying
securities, currency or futures contract upon exercise.
Therefore, no assurance can be given that the Fund will be able
to utilize these instruments effectively.

ADDITIONAL RISK CONSIDERATIONS

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

Effects of Borrowing.  The Fund may, when Alliance believes that
market conditions are appropriate, borrow up to 33% of its total
assets in order to take full advantage of available investment
opportunities.  The Fund may borrow money from a bank in a
privately arranged transaction to increase the money available to
the Fund to invest in securities when the Fund believes that the
return from the securities financed will be greater than the
interest expense paid on the borrowing.  Borrowings may involve
additional risk to the Fund because the interest expense may be
greater than the income from or appreciation of the securities
carried by the borrowings and the value of the securities carried
may decline below the amount borrowed.




                               22





<PAGE>


Any investment gains made with the proceeds obtained from
borrowings in excess of interest paid on the borrowings will
cause the net income per share and the net asset value per share
of the Fund's common stock to be greater than would otherwise be
the case.  On the other hand, if the investment performance of
the additional securities purchased fails to cover their cost
(including any interest paid on the money borrowed) to the Fund,
then the net income per share and net asset value per share of
the Fund's common stock will be less than would otherwise be the
case.  This is the speculative factor known as "leverage".

Borrowings by the Fund result in leveraging of the Fund's shares
of common stock.  Utilization of leverage, which is usually
considered speculative, involves certain risks to the Fund's
shareholders.  These include a higher volatility of the net asset
value of the Fund's shares of common stock and the relatively
greater effect on the net asset value of the shares.  So long as
the Fund is able to realize a net return on its investment
portfolio that is higher than the interest expense paid on
borrowings, the effect of leverage will be to cause the Fund's
shareholders to realize a higher current net investment income
than if the Fund were not leveraged.  On the other hand, interest
rates on U.S. Dollar-denominated and foreign currency-denominated
obligations change from time to time as does their relationship
to each other, depending upon such factors as supply and demand
forces, monetary and tax policies within each country and
investor expectations.  Changes in such factors could cause the
relationship between such rates to change so that rates on U.S.
Dollar-denominated obligations may substantially increase
relative to the foreign currency-denominated obligations in which
the Fund may be invested.  To the extent that the interest
expense on borrowings approaches the net return on the Fund's
investment portfolio, the benefit of leverage to the Fund's
shareholders will be reduced, and if the interest expense on
borrowings were to exceed the net return to shareholders, the
Fund's use of leverage would result in a lower rate of return
than if the Fund were not leveraged.  Similarly, the effect of
leverage in a declining market could be a greater decrease in net
asset value per share than if the Fund were not leveraged.  In an
extreme case, if the Fund's current investment income were not
sufficient to meet the interest expense on borrowings, it could
be necessary for the Fund to liquidate certain of its
investments, thereby reducing the net asset value of the Fund's
shares.

Foreign Securities.  The securities markets of many foreign
countries are relatively small, with the majority of market
capitalization and trading volume concentrated in a limited



                               23





<PAGE>


number of companies representing a small number of industries.
Consequently, the Fund, whose investment portfolio may include
foreign securities in an amount up to 10% of its total assets,
may experience greater price volatility and significantly lower
liquidity than a portfolio invested solely in equity securities
of U.S. companies.  These markets may be subject to greater
influence by adverse events generally affecting the market, and
by large investors trading significant blocks of securities, than
is usual in the United States.  Securities registration, custody
and settlements may in some instances be subject to delays and
legal and administrative uncertainties.

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

The Fund also could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application of other restrictions
on investment.  Investing in local markets may require the Fund
to adopt special procedures that may involve additional costs to
the Fund.  These factors may affect the liquidity of the Fund's
investments in any country and Alliance will monitor the effect
of any such factor or factors on the Fund's investments.
Furthermore, transaction costs including brokerage commissions
for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the United States.
Issuers of securities in foreign jurisdictions are generally not
subject to the same degree of regulation as are U.S. issuers with
respect to such matters as insider trading rules, restrictions on
market manipulation, shareholder proxy requirements, and timely
disclosure of information.  The reporting, accounting, and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards in important respects and less
information may be available to investors in foreign securities
than to investors in U.S. securities.  Substantially less



                               24





<PAGE>


information is publicly available about certain non-U.S. issuers
than is available about U.S. issuers.

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

-----------------------------------------------------------------
                     MANAGEMENT OF THE FUND
-----------------------------------------------------------------

INVESTMENT ADVISER AND FUND MANAGER

The Fund's Adviser is Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105.  Alliance is a
leading international investment adviser supervising client
accounts with assets as of [________], 2000 totaling more than
$[___] billion (of which more than $[___] billion represented the
assets of investment companies).  As of [_____], 2000, Alliance
managed retirement assets for many of the largest public and
private employee benefit plans (including [__] of the nation's
FORTUNE 100 companies), for public employee retirement funds in
[___] states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide.  The [___]
registered investment companies managed by Alliance, comprising
[___] separate portfolios, currently have more than [___] million
shareholder accounts.

Alliance's [small cap] research senior analyst team (the [Small
Cap] Group) will be jointly and primarily responsible for the
day-to-day management of the Fund's portfolio and the Fund's
investments will be managed by the [Small Cap] Group.

Alliance provides investment advisory services and order
placement facilities for the Fund.  For these services, the Fund
pays Alliance a fee at an annualized rate of [____]% of the



                               25





<PAGE>


Fund's average daily net assets (the "Basic Fee") starting on
[_______], 2001.  The Basic Fee is adjusted based on the
investment performance of the Fund's Class A shares in relation
to the performance of the Russell 2500(TM) Growth Index (the
"Index"), as described below.  The fee will be accrued daily and
paid monthly except as described below.

The Russell 2500(TM) universe of securities is compiled by Frank
Russell Company and is segmented into two style indices, the
Russell 2500(TM) Growth Index and the Russell 2500(TM) Value
Index, both based on the capitalization-weighted median book-to-
price ratio of each of the securities.  At each reconstitution,
the Russell 2500(TM) constituents are ranked by their book-to-
price ratio.  Once so ranked, the breakpoint for the two styles
is determined by the median market capitalization of the Russell
2500(TM).  Thus, those securities falling within the top fifty
percent of the cumulative market capitalization (as ranked by
descending book-to-price ratio) become members of the Russell
2500(TM) Value Index and the remaining fifty percent become
members of the Russell 2500(TM) Growth Index.  The Russell
2500(TM) Growth Index is, accordingly, designed to include those
Russell 2500(TM) securities with a greater-than-average growth
orientation.  In contrast with the securities in the Russell
2500(TM) Value Index, companies in the Growth Index tend to
exhibit higher price-to-book and price-earnings ratios, lower
dividend yields and higher forecasted growth values.  The Russell
2500(TM) Growth Index reflects changes in market prices, and
assumes reinvestment of investment income.

For any period prior to [_______], 2001, Alliance will receive a
fee of [____]%, payable monthly, of the Fund's average net assets
without any performance adjustment.  For the period from
[_______], 2001 through [______], 2002 Alliance will receive a
minimum fee, payable monthly, equal to [____]%, annualized, of
the average daily net assets of the Fund.  This fee may be
increased to [____]%, annualized, based on the performance of the
Class A shares in relation to the performance of the Index during
that same period.  The fee will equal [____]% annualized if the
performance of the Class A shares equals the performance of the
Index and will be increased or decreased as described in the
paragraph below.  The maximum increase to [____]%, annualized,
would be payable if the investment performance of the Class A
shares of the Fund exceeded the performance of the Index by eight
or more percentage points for the performance period and the
minimum fee of [____]% will be payable if the performance of the
Index exceeded the performance of the Class A shares by eight or
more percentage points for this period.  Any such increased




                               26





<PAGE>


amount over the minimum fee will not be payable to Alliance prior
to [________] 2002.

Beginning in [_______] 2002 and for each month thereafter, the
Basic Fee will be equal to [____]%, annualized, of the average
daily net assets of the Fund.  The Basic Fee may be increased to
as much as [____]%, annualized, or decreased to as little as
[____]%, annualized, based on the performance of the Class A
shares in relation to the performance of the Index for the
performance period.  The performance period will be from
[_______] 2001 through the current calendar month.  After the
Advisory Agreement has been in effect for 36 full calendar
months, the performance period becomes a rolling 36-month period.
The Basic Fee will be increased (or decreased) at the monthly
rate of 1/12th of [____]% depending on the extent, if any, by
which the investment performance of the Class A shares of the
Fund exceeds by (or is exceeded by) at least one percentage point
(rounded to the higher whole point if exactly one-half) the
performance of the Index for the performance period.  The maximum
increase or decrease in the Basic Fee for any month may not
exceed 1/12th of [____]%.

Therefore, starting with [______] 2002, the maximum monthly fee
is [____]%, annualized, which would be payable if the investment
performance of the Class A shares of the Fund exceeded the
performance of the Index by eight or more percentage points for
the performance period.  The minimum monthly fee is [____]%,
annualized, and would be payable if the performance of the Index
exceeded the investment performance of the Class A shares by
eight or more percentage points for the performance period.

The following table illustrates the full range of permitted
increases or decreases to the Basic Fee.


















                               27





<PAGE>


Percentage Point
Difference* Between
Performance of
Class A Shares and
Russell 2500(TM)             Adjustment to     Annual Fee Rate
Growth Index**             [____]% Basic Fee     as Adjusted
--------------------       -----------------   ---------------

        [+8]                     [____%]            [____%]
        [+7]                     [____%]            [____%]
        [+6]                     [____%]            [____%]
        [+5]                     [____%]            [____%]
        [+4]                     [____%]            [____%]
        [+3]                     [____%]            [____%]
        [+2]                     [____%]            [____%]
        [+1]                     [____%]            [____%]
        [0]                      [____%]            [____%]
        [-1]                     [____%]            [____%]
        [-2]                     [____%]            [____%]
        [-3]                     [____%]            [____%]
        [-4]                     [____%]            [____%]
        [-5]                     [____%]            [____%]
        [-6]                     [____%]            [____%]
        [-7]                     [____%]            [____%]
        [-8]                     [____%]            [____%]

-----------------------------------------------------------------
*   Fractions of a percentage point will be rounded to the nearer
    whole point (to the higher whole point if exactly one-half).
**  Measured over the performance period, which will be a twelve-
    month period from [________], 2001 through [_________], 2002,
    and thereafter the period from [_______], 2001 to the most
    recent month-end until [_________], 2004, at which time the
    performance period will become a rolling 36-month period
    ending with the most recent calendar month.

The Investment performance of the Class A shares during any
performance period will be measured by the percentage difference
between (i) the opening net asset value ("NAV") of a Class A
share and (ii) the sum of (a) the closing NAV of a Class A share,
(b) the value of any dividends and distributions on such share
during the period treated as if reinvested in additional Class A
shares of the Fund and (c) the per Class A share value of any
capital gains taxes paid or payable by the Fund on undistributed
realized long-term capital gains.  The measurement of the
performance of the Class A shares will not include any effects
resulting from the issuance, sale, repurchase or redemption of
shares of the Fund.  The performance of the Index is measured by



                               28





<PAGE>


the percentage change in the Index between the beginning and the
end of the performance period with cash distributions on the
securities that constitute the Index being treated as reinvested
in the Index.

Since the adjustment to the Basic Fee is based on the comparative
performance of the Class A shares against the Index, the
controlling factor is not whether the performance of the Class A
shares is up or down, but whether that performance is up or down
more than or less than that of the Index.  In addition, the
relative performance of the Class A shares against the Index is
measured only for the relevant performance period, and does not
take into account performance over longer or shorter periods of
time.  The Class A shares of the Fund have lower expenses and pay
correspondingly higher dividends than Class B and Class C shares
and thus will have better performance than the Class B and Class
C shares.

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

How The Fund Values Its Shares

The Fund's net asset value or NAV is calculated at 4:00 p.m.,
Eastern time, each day the Exchange is open for business.  To
calculate NAV, the Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets,
is divided by the number of shares outstanding.  The Fund values
its securities at their current market value determined on the
basis of market quotations, or, if such quotations are not
readily available, such other methods as the Fund's directors
believe accurately reflect fair market value.

Your order for purchase, sale, or exchange of shares is priced at
the next NAV calculated after your order is received in proper
form by the Fund.  Your purchase of Fund shares may be subject to
an initial sales charge.  Sales of Fund shares may be subject to
a contingent deferred sales charge or CDSC.  See the Distribution
Arrangements section of this Prospectus for details.

How To Buy Shares

You may purchase the Fund's shares through broker-dealers, banks,
or other financial intermediaries.  You also may purchase shares
directly from the Fund's principal underwriter, Alliance Fund
Distributors, Inc., or AFD.  The minimum initial investment
amount is $10,000, except that the minimum initial investment



                               29





<PAGE>


amount applicable to individual retirement accounts (IRAs) is
$2,000.

If you are an existing Fund shareholder, you may purchase shares
by electronic funds transfer in amounts not exceeding $500,000 if
you have completed the appropriate section of the Shareholder
Application.  Call 800-221-5672 to arrange a transfer from your
bank account.

The Fund is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders
who have not provided the Fund with their certified taxpayer
identification number.  To avoid this, you must provide your
correct Tax Identification Number (Social Security Number for
most investors) on your account application.

The Fund may refuse any order to purchase shares.  In particular,
the Fund reserves the right to restrict purchases of shares
(including through exchanges) when they appear to evidence a
pattern of frequent purchases and sales made in response to
short-term considerations.

[Initial Offering

It is expected that shares of the Fund will be offered during an
initial offering period which is currently scheduled to end on
[________], 2001.  The Fund will begin its continuous offering of
shares on [________], 2001.  During the Fund's initial offering
period, Class A shares will be offered to the public at their
asset value of $10.00 per share plus a sales charge.  The maximum
offering price of the Class A shares during the initial offering
period is $10.44 per share.  During the initial offering and
through [_________], 2001, AFD will reallow to dealers the entire
amount of the initial sales charge on Class A shares.  Class B
and Class C shares will be offered to the public during the
initial offering period at their net asset value of $10.00 per
share.

During the initial offering period, the Fund will not accept
subscriptions for Fund shares other than through authorized
dealers and agents, and any subscription monies sent directly to
the Fund will be promptly returned.  In addition, under
Commission Regulations (e.g., Rule 15c-4 under the Securities
Exchange Act of 1934), authorized dealers and agents will not be
permitted to accept subscription monies from their customers in
advance of the purchase date unless appropriate arrangements are
made for the temporary investment or deposit of such monies.
Shares subscribed for during the Fund's initial offering period



                               30





<PAGE>


will be sold to subscribers on the purchase date, which is
expected to occur not later than [________], 2001.]

How To Exchange Shares

You may exchange your Fund shares for shares of the same Class of
other Alliance Mutual Funds (including AFD Exchange Reserves, a
money market fund managed by Alliance).  Exchanges of shares are
made at the next-determined NAV, without sales or service
charges.  You may request an exchange by mail or telephone.  You
must call by 4:00 p.m., Eastern time, to receive that day's NAV.
The Fund may change, suspend, or terminate the exchange service
on 60 days' written notice.

How To Sell Shares

You may "redeem" your shares (i.e., sell your shares to the Fund)
on any day the Exchange is open, either directly or through your
financial intermediary.  Your sales price will be the next-
determined NAV, less any applicable CDSC, after the Fund receives
your sales request in proper form.  Normally, proceeds will be
sent to you within 7 days.  If you recently purchased your shares
by check or electronic funds transfer, your redemption payment
may be delayed until the Fund is reasonably satisfied that the
check or electronic funds transfer has been collected (which may
take up to 15 days).

--  Selling Shares Through Your Broker

Your broker must receive your sales request by 4:00 p.m., Eastern
time, and submit it to the Fund by 5:00 p.m., Eastern time, for
you to receive that day's NAV, less any applicable CDSC.  Your
broker is responsible for submitting all necessary documentation
to the Fund and may charge you for this service.

--  Selling Shares Directly to the Fund

By Mail:

    --Send a signed letter of instruction or stock power, along
with certificates, to:

                  Alliance Fund Services, Inc.
                          P.O. Box 1520
                    Secaucus, N.J. 07906-1520
                          800-221-5672





                               31





<PAGE>


    --For your protection, a bank, a member firm of a national
stock exchange, or other eligible guarantor institution, must
guarantee signatures.  Stock power forms are available from your
financial intermediary, AFS, and many commercial banks.
Additional documentation is required for the sale of shares by
corporations, intermediaries, fiduciaries, and surviving joint
owners.  If you have any questions about these procedures,
contact AFS.

By Telephone:

    --You may redeem your shares for which no stock certificates
have been issued by telephone request.  Call AFS at 800-221-5672
with instructions on how you wish to receive your sale proceeds.

    --A telephone redemption request must be received by 4:00
p.m., Eastern time, for you to receive that day's NAV, less any
applicable CDSC.

    --If you have selected electronic funds transfer in your
Shareholder Application, the redemption proceeds will be sent
directly to your bank.  Otherwise, the proceeds will be mailed to
you.

    --Redemption requests by electronic funds transfer may not
exceed $100,000 per day and redemption requests by check cannot
exceed $50,000 per day.

    --Telephone redemption is not available for shares held in
nominee or "street name" accounts, retirement plan accounts, or
shares held by a shareholder who has changed his or her address
of record within the previous 30 calendar days.

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

Dividends and Distributions

The income dividend and capital gains distributions, if any,
declared by the Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or in additional
shares of the same class of shares of the Fund.  If paid in
additional shares, the shares will have an aggregate NAV as of
the close of business on the day following the declaration date
of the dividend or distribution equal to the cash amount of the
dividend or distribution.  You may make an election to receive
dividends and distributions in cash or in shares at the time you



                               32





<PAGE>


purchase shares.  Your election can be changed at any time prior
to a record date for a dividend.  There is no sales or other
charge on the reinvestment of dividends or capital gains
distributions.  Cash dividends may be paid in check, or at your
election, electronically via the ACH network.

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

For federal income tax purposes, the Fund's dividend
distributions of net income (or short-term taxable gains) will be
taxable to you as ordinary income.  Any distributions of long-
term capital gains generally will be taxable to you as long-term
capital gains.  The Fund's distributions also may be subject to
certain state and local taxes.

While it is the intention of the Fund to distribute to its
shareholders substantially all of each fiscal year's net income
and net realized capital gains, if any, the amount and time of
any dividend or distribution will depend on the realization by
the Fund of income and capital gains from investments.  There is
no fixed dividend rate and there can be no assurance that the
Fund will pay any dividends or realize any capital gains.

Investment income received by the Fund from sources within
foreign countries may be subject to foreign income taxes withheld
at the source.

Under certain circumstances, if the Fund realizes losses (e.g.,
from fluctuations in currency exchange rates) after paying a
dividend, all or a portion of the dividend may subsequently be
characterized as a return of capital.  Returns of capital are
generally nontaxable, but will reduce a shareholder's basis in
shares of the Fund.  If that basis is reduced to zero (which
could happen if the shareholder does not reinvest distributions
and returns of capital are significant), any further returns of
capital will be taxable as capital gain.

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




                               33





<PAGE>


The sale or exchange of Fund shares is a taxable transaction for
federal income tax purposes.

Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all its distributions
for the year.  Consult your tax adviser about the federal, state,
and local tax consequences in your particular circumstances.

-----------------------------------------------------------------
                    DISTRIBUTION ARRANGEMENTS
-----------------------------------------------------------------

Share Classes.  The Fund offers three classes of shares.

Class A Shares--Initial Sales Charge Alternative

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


                             Initial Sales Charge

                                                   Commission to
                             As % of     As % of   Dealer/Agent
                             Net Amount  Offering  as % of
Amount Purchased             Invested    Price     Offering Price
-----------------------------------------------------------------
Up to $100,000               4.44%       4.25%     4.00%
$100,000 up to $250,000      3.36        3.25      3.00
$250,000 up to $500,000      2.30        2.25      2.00
$500,000 up to $1,000,000    1.78        1.75      1.50

You pay no initial sales charge on purchases of Class A shares in
the amount of $1,000,000 or more, but may pay a 1% CDSC if you
redeem your shares within 1 year.  Alliance may pay the dealer,
or agent a fee of up to 1% of the dollar amount purchased.
Certain purchases of Class A shares may qualify for reduced or
eliminated sales charges under the Fund's Combined Purchase
Privilege, Cumulative Quantity Discount, Statement of Intention,
Privilege for Certain Retirement Plans, Reinstatement Privilege,
and Sales at Net Asset Value Programs.  Consult the Subscription
Application and the Fund's SAI for additional information about
these options.








                               34





<PAGE>


Class B Shares--Deferred Sales Charge Alternative

You can purchase Class B Shares at NAV without an initial sales
charge.  The Fund will thus receive the full amount of your
purchase.  Your investment, however, will be subject to a CDSC if
you redeem shares within 4 years of purchase.  The CDSC varies
depending of the number of years you hold the shares.  The CDSC
amounts are:

         Years Since Purchase          CDSC
         First                         4.0%
         Second                        3.0%
         Third                         2.0%
         Fourth                        1.0%
         Fifth                         None

If you exchange your shares for the Class B shares of another
Alliance Mutual Fund, the CDSC also will apply to those Class B
shares.  The CDSC period begins with the date of your original
purchase, not the date of exchange for the other Class B shares.

The Fund's Class B shares purchased for cash automatically
convert to Class A shares eight years after the end of the month
of your purchase.  If you purchase shares by exchange for the
Class B shares of another Alliance Mutual Fund, the conversion
period runs from the date of your original purchase.

Class C Shares--Asset-Based Sales Charge Alternative

You can purchase shares at NAV without an initial sales charge.
The Fund will thus receive the full amount of your purchase.
Your investment, however, will be subject to a 1% CDSC if you
redeem your shares within 1 year.  If you exchange your shares
for the Class C shares of another Alliance Mutual Fund, the 1%
CDSC also will apply to those Class C shares.  The 1 year period
for the CDSC begins with the date of your original purchase, not
the date of the exchange for the other Class C shares.

Class C shares do not convert to any other Class of shares of the
Fund.

Asset-Based Sales Charges or Rule 12b-1 Fees.  The Fund has
adopted a plan under Commission Rule 12b-1 that allows the Fund
to pay asset-based sales charges or distribution and service fees
for the distribution and sale of its shares.  The amount of these
fees for each Class of the Fund's shares is:





                               35





<PAGE>


         Rule 12b-1 Fee (As A Percentage Of
         Aggregate Average Daily Net Assets)
         -----------------------------------

         Class A                        .30%
         Class B                       1.00%
         Class C                       1.00%

Because these fees are paid out of the Fund's assets on an on-
going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
fees.  Class B and Class C shares are subject to higher
distribution fees than Class A shares (Class B shares are subject
to these higher fees for a period of eight years, after which
they convert to Class A shares).  The higher fees mean a higher
expense ratio, so Class B and Class C shares pay correspondingly
lower dividends and may have a lower net asset value than Class A
shares.

Choosing a Class of Shares.  The decision as to which Class of
shares is more beneficial to you depends on the amount and
intended length of your investment.  If you are making a large
investment, thus qualifying for a reduced sales charge, you might
consider purchasing Class A shares.  If you are making a smaller
investment, you might consider purchasing Class B shares because
100% of your purchase is invested immediately.  If you are unsure
of the length of your investment, you might consider Class C
shares because there is no initial sales charge and no CDSC as
long as the shares are held for one year or more.  Dealers and
agents may receive differing compensation for selling Class A,
Class B, or Class C shares.  There is no size limit on purchases
of Class A shares.  The maximum purchase of Class B shares is
$250,000.  The maximum purchase of Class C shares is $1,000,000.

You should consult your financial agent to assist in choosing a
Class of Fund shares.

Application of the CDSC.  The CDSC is applied to the lesser of
the original cost of shares being redeemed or NAV at the time of
redemption (or, as to Fund shares acquired through an exchange,
the cost of the Alliance Mutual Fund shares originally purchased
for cash).  Shares obtained from dividend or distribution
reinvestment are not subject to the CDSC.  The Fund may waive the
CDSC on redemptions of shares following the death or disability
of a shareholder, to meet the requirements of certain qualified
retirement plans, or under a monthly, bimonthly, or quarterly
systematic withdrawal plan.  See the Fund's SAI for further
information about CDSC waivers.



                               36





<PAGE>



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

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

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

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

Shareholder Services.  AFS offers a variety of shareholder
services.  For more information about these services or your
account, call AFS's toll-free number, 800-221-5672.  Some
services are described in the attached Subscription Application.
You also may request a shareholder's manual explaining all
available services by calling 800-227-4618.

Employee Benefit Plans.  Certain employee benefit plans,
including employer-sponsored tax-qualified 401(k) plans and other
defined contribution retirement plans ("Employee Benefit Plans"),
may establish requirements as to the purchase, sale or exchange
of shares, including maximum and minimum initial investment
requirements, that are different from those described in this
Prospectus.  Employee Benefit Plans also may not offer all
classes of shares of the Fund.  In order to enable participants



                               37





<PAGE>


investing through Employee Benefit Plans to purchase shares of
the Fund, the maximum and minimum investment amounts may be
different for shares purchased through Employee Benefit Plans
from those described in this Prospectus.  In addition, the Class
A, Class B, and Class C CDSC may be waived for investments made
through Employee Benefit Plans.

For more information about the Fund, the following documents are
available upon request:

--  Statement of Additional Information (SAI)

The Fund has an SAI, which contains more detailed information
about the Fund, including its operations and investment policies.
The Fund's SAI is incorporated by reference into (and is legally
part of) this Prospectus.

You may request a free copy of the SAI or make shareholder
inquiries of the Fund, by contacting your broker or other
financial intermediary, or by contacting Alliance:

By Mail:      c/o Alliance Fund Services, Inc.
              P.O. Box 1520
              Secaucus, NJ 07096-1520

By Phone:     For Information: (800) 221-5672
              For Literature: (800) 227-4618

Or you may view or obtain these documents from the Commission:

--   Call the Commission at 1-202-942-8090 for information on the
operation of the Public Reference Room.

--   Reports and other information about the Fund are available
on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov.

--   Copies of the information may be obtained, after paying a
fee, by electronic request at [email protected], or by writing
the Commission's Public Reference Section, Washington, DC 20549-
0102.

You also may find more information about Alliance and the Fund on
the Internet at: www.Alliancecapital.com.


SEC File No.  811-9176




                               38





<PAGE>



(LOGO)                  ALLIANCE SELECT INVESTOR SERIES, INC.
                             -SMALL CAP GROWTH PORTFOLIO
_______________________________________________________________
c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
_______________________________________________________________

               STATEMENT OF ADDITIONAL INFORMATION
                      [            ], 2001
_______________________________________________________________

    This Statement of Additional Information is not a prospectus
but supplements and should be read in conjunction with the
Prospectus, dated [            ], 2001, for the Small Cap Growth
Portfolio (the "Fund") of Alliance Select Investor Series, Inc.
(the "Company") (the "Prospectus").  Copies of the Prospectus may
be obtained by contacting Alliance Fund Services, Inc. at the
address or the "For Literature" telephone number shown above.

                        TABLE OF CONTENTS
                                                          Page

Description of the Fund................................
Management of the Fund.................................
Expenses of the Fund...................................
Purchase of Shares.....................................
Redemption and Repurchase of Shares....................
Shareholder Services...................................
Net Asset Value........................................
Dividends, Distributions and Taxes.....................
Portfolio Transactions.................................
General Information....................................
Appendix A:  Certain Investment Practices..............  A-1
Appendix B:  Certain Employee Benefit Plans............  B-1

(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.
















<PAGE>


____________________________________________________________

                     DESCRIPTION OF THE FUND
____________________________________________________________

         Alliance Select Investor Series, Inc. (the "Company") is
an open-end management investment company whose shares are
offered in separate series referred to herein as "Funds."  Each
Fund is a separate pool of assets constituting, in effect, a
separate fund with its own investment objective and policies.  A
shareholder in a Fund will be entitled to his or her pro-rata
share of all dividends and distributions arising from that Fund's
assets and, upon redeeming shares of that Fund, the shareholder
will receive the then current net asset value of the applicable
class of shares of that Fund.  The Company is empowered to
establish, without shareholder approval, additional Funds which
may have different investment objectives.

         The Company currently has four Funds:  the Small Cap
Growth Portfolio (the "Fund"), which is described in this
Statement of Additional Information, and the Biotechnology
Portfolio, the Technology Portfolio, and the Premier Portfolio,
which are described in separate Statements of Additional
Information, copies of which can be obtained by contacting
Alliance Fund Services, Inc. at the address or the "For
Literature" telephone number shown on the cover of this Statement
of Additional Information.

         The Fund's investment objective is "fundamental" within
the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act") and cannot be changed without a shareholder
vote.  Except as noted, the Fund's investment policies are not
fundamental and thus can be changed without a shareholder vote.
The Fund will not change these policies without notifying its
shareholders.  There is no guarantee that the Fund will achieve
its investment objective.

Investment Policies and Practices

         The following investment policies and practices
supplement those set forth in the Prospectus.

         Short Sales.  The Fund will utilize the market technique
of short selling in order to attempt both to protect the Fund's
investment portfolio against the effects of potential downtrends
in the securities markets and as a means of enhancing the Fund's
overall performance.  The Fund is permitted to engage in short




                                2





<PAGE>


sales of securities with respect to up to 33% of its total
assets, subject to the requirements of the 1940 Act.

         A short sale is a transaction in which the Fund sells a
security it does not own but has borrowed in anticipation that
the market price of that security will decline.  When the Fund
makes a short sale of a security that it does not own, it must
borrow from a broker-dealer the security sold short and deliver
the security to the broker-dealer upon conclusion of the short
sale.  The Fund may be required to pay a fee to borrow particular
securities and is often obligated to pay over any payments
received on such borrowed securities.  The Fund's obligation to
replace the borrowed security may be secured by collateral
deposited with a broker-dealer qualified as a custodian and will
consist of cash or highly liquid securities similar to those
borrowed.  Depending on the arrangements the Fund makes with the
broker-dealer from which it borrowed the security regarding
remittance of any payments received by the Fund on such security,
the Fund may or may not receive any payments (e.g., dividends or
interest) on its collateral deposited with the broker-dealer.  In
addition to depositing collateral with a broker-dealer, the Fund
is currently required under the 1940 Act to establish a
segregated account with its custodian and to maintain therein
liquid assets in an amount that, when added to cash or liquid
high grade debt securities deposited with the broker-dealer, will
at all times equal at least 100% of the current market value of
the security sold short.

         If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces
the borrowed security, the Fund will incur a loss; conversely, if
the price declines, the Fund will realize a short-term capital
gain.  Any gain will be decreased, and any loss increased, by the
transaction costs described above.  Although the Fund's gain is
limited to the price at which it sold the security short, its
potential loss is theoretically unlimited.

         In some cases, the Fund may also make certain short
sales "against the box" which enable it to defer realization of
gain or loss for U.S. federal income tax purposes until the
subsequent closing of the short sale.  In this type of short
sale, at the time of the sale, the Fund owns or has the immediate
and unconditional right to acquire at no additional cost the
identical security.  If the Fund has unrealized gain with respect
to a security and enters into a short sale with respect to such
security which does not satisfy the requirements for deferral,
the Fund will be deemed to have sold the appreciated security at




                                3





<PAGE>


the time of entering into the short sale and thus will then
recognize gain for tax purposes.

         Rights and Warrants.  The Fund may invest up to 10% of
its total assets in rights and warrants which entitle the holder
to buy equity securities at a specific price for a specific
period of time, but will do so only if the equity securities
themselves are deemed appropriate by the Adviser for inclusion in
the Fund's portfolio.  Rights and warrants may be considered more
speculative than certain other types of investments in that they
do not entitle a holder to dividends or voting rights with
respect to the securities which may be purchased nor do they
represent any rights in the assets of the issuing company.  Also,
the value of a right or warrant does not necessarily change with
the value of the underlying securities and a right or warrant
ceases to have value if it is not exercised prior to the
expiration date.

         Convertible Securities.  The Fund may invest up to 20%
of its total assets in the convertible securities of companies
whose common stocks are eligible for purchase by the Fund under
its investment policies.  Convertible securities include bonds,
debentures, corporate notes and preferred stocks that are
convertible at a stated exchange rate into common stock. Prior to
their conversion, convertible securities have the same general
characteristics as non-convertible debt securities which provide
a stable stream of income with generally higher yields than those
of equity securities of the same or similar issuers. As with all
debt securities, the market value of convertible securities tends
to decline as interest rates increase and, conversely, to
increase as interest rates decline.  While convertible securities
generally offer lower interest yields than non-convertible debt
securities of similar quality, they do enable the investor to
benefit from increases in the market price of the underlying
common stock.  When the market price of the common stock
underlying a convertible security increases, the price of the
convertible security increasingly reflects the value of the
underlying common stock and may rise accordingly.  As the market
price of the underlying common stock declines, the convertible
security tends to trade increasingly on a yield basis, and thus
may not depreciate to the same extent as the underlying common
stock.  Convertible securities rank senior to common stocks in an
issuer's capital structure.  They are consequently of higher
quality and entail less risk than the issuer's common stock,
although the extent to which such risk is reduced depends in
large measure upon the degree to which the convertible security
sells above its value as a fixed income security.




                                4





<PAGE>


         Foreign Securities.  Investing in securities of
non-United States companies, which are generally denominated in
foreign currencies, involves certain considerations comprising
both risk and opportunity not typically associated with investing
in United States companies. These considerations include changes
in exchange rates and exchange control regulation, political and
social instability, expropriation, imposition of foreign taxes,
less liquid markets and less available information than are
generally the case in the United States, higher transaction
costs, less government supervision of exchanges and brokers and
issuers, difficulty in enforcing contractual obligations, lack of
uniform accounting and auditing standards and greater price
volatility.  Additional risks may be incurred in investing in
particular countries.

Borrowing by the Fund

         Under the 1940 Act, the Fund is not permitted to borrow
unless immediately after such borrowing there is asset coverage,
as that term is defined and used in the 1940 Act, of at least
300% for all borrowings of the Fund.  In addition, under the 1940
Act, in the event asset coverage falls below 300%, the Fund must
within three days reduce the amount of its borrowings to such an
extent that the asset coverage of its borrowings is at least
300%.  Assuming, for example, outstanding borrowings representing
not more than one-third of the Fund's total assets less
liabilities (other than such borrowings), the asset coverage
would be 300%; while outstanding borrowings representing 25% of
the Fund's total assets less liabilities (other than such
borrowings), the asset coverage would be 400%.  The Fund will
maintain asset coverage of outstanding borrowings of at least
300% and if necessary will, to the extent possible, reduce the
amounts borrowed by making repayments from time to time in order
to do so.  Such repayments could require the Fund to sell
portfolio securities at times considered disadvantageous by the
Adviser.  The Fund may not make any cash distributions to its
shareholders if, after the distribution, there would be less than
300% asset coverage.  This limitation on the Fund's ability to
make distributions could under certain circumstances impair the
Fund's ability to maintain its qualification for taxation as a
regulated investment company.  Without such qualification, the
Fund would be subject to federal income and excise tax and the
amount of distributions to shareholders would be reduced.

         The Fund may also borrow for temporary purposes in an
amount not exceeding 5% of the value of the total assets of the
Fund.  Such borrowings are not subject to the asset coverage
restrictions set forth in the preceding paragraph.



                                5





<PAGE>



         Borrowings by the Fund result in leveraging of the
Fund's shares of common stock.  Utilization of leverage, which is
usually considered speculative, involves certain risks to the
Fund's shareholders.  These include a higher volatility of the
net asset value of the Fund's shares of common stock and the
relatively greater effect on the net asset value of the shares.
So long as the Fund is able to realize a net return on its
investment portfolio that is higher than the interest expense
paid on borrowings, the effect of leverage will be to cause the
Fund's shareholders to realize a higher current net investment
income than if the Fund were not leveraged.  On the other hand,
interest rates on U.S. Dollar-denominated and foreign currency-
denominated obligations change from time to time as does their
relationship to each other, depending upon such factors as supply
and demand forces, monetary and tax policies within each country
and investor expectations.  Changes in such factors could cause
the relationship between such rates to change so that rates on
U.S. Dollar-denominated obligations may substantially increase
relative to the foreign currency-denominated obligations in which
the Fund may be invested.  To the extent that the interest
expense on borrowings approaches the net return on the Fund's
investment portfolio, the benefit of leverage to the Fund's
shareholders will be reduced, and if the interest expense on
borrowings were to exceed the net return to shareholders, the
Fund's use of leverage would result in a lower rate of return
than if the Fund were not leveraged.  Similarly, the effect of
leverage in a declining market could be a greater decrease in net
asset value per share than if the Fund were not leveraged.  In an
extreme case, if the Fund's current investment income were not
sufficient to meet the interest expense on borrowings, it could
be necessary for the Fund to liquidate certain of its
investments, thereby reducing the net asset value of the Fund's
share.

Other Investment Practices

         The Fund may, but is not required to, utilize various
investment strategies. These investment strategies entail risks.
Although the Adviser believes that these investment strategies
may further the Fund's investment objective, no assurance can be
given that they will achieve this result.  The Fund may write
covered put and call options and purchase put and call options on
U.S. and foreign securities exchanges and over-the-counter, enter
into contracts for the purchase and sale for future delivery of
common stocks and purchase and write put and call options on such
futures contracts.  The Fund may enter into contracts for the
purchase and sale for future delivery of contracts based on



                                6





<PAGE>


financial indices, including any index of U.S. Government
Securities or securities issued by foreign government entities,
or write put and call options on foreign currencies, enter into
repurchase agreements and currency swaps and make secured loans
of its portfolio securities.  Each of these investment strategies
is discussed in Appendix A.

         The successful use of the foregoing investment practices
draws upon the Adviser's special skills and experience with
respect to such instruments and usually depends on the Adviser's
ability to forecast price movements or currency exchange rate
movements correctly.  Should prices or exchange rates move in an
unexpected manner, the Fund may not achieve the anticipated
benefits of futures contracts, options or forward contracts or
may realize losses and thus be in a worse position than if such
strategies had not been used.  In addition, the correlation
between movements in the prices of such instruments and movements
in the prices of the securities or currencies hedged or used for
cover will not be perfect and could produce unanticipated losses.

         The Fund's ability to dispose of its position in futures
contracts, options and forward contracts will depend on the
availability of liquid markets in such instruments.  Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still developing
and there is no public market for forward contracts.  It is
impossible to predict the amount of trading interest that may
exist in various types of futures contracts, options and forward
contracts.  Therefore, no assurance can be given that the Fund
will be able to utilize these instruments at all or to utilize
them effectively for the purposes set forth above.

         Portfolio Turnover.  It is the Fund's policy to sell any
security whenever, in the judgment of the Adviser, its
appreciation possibilities have been substantially realized or
the business or market prospects for such security have
deteriorated, irrespective of the length of time that such
security has been held.  The Adviser anticipates that the Fund's
annual rate of portfolio turnover will not exceed 100%.  A 100%
annual turnover rate would occur if all the securities in the
Fund's portfolio were replaced once in a period of one year.  A
high portfolio rate will cause the Fund to realize short-term
capital gains or losses on the sale of securities.








                                7





<PAGE>


Certain Fundamental Investment Policies

         The Fund has adopted the following investment
restrictions, which may not be changed without the approval of
the holders of a majority of the Fund's outstanding voting
securities.  The approval of a majority of the Fund's outstanding
voting securities means the affirmative vote of (i) 67% or more
of the shares represented at a meeting at which more than 50% of
the outstanding shares are present in person or by proxy, or
(ii) more than 50% of the outstanding shares, whichever is less.

         As a matter of fundamental policy, the Fund may not:

              1.   Invest 25% or more of its total assets in
         securities of issuers conducting their principal
         business activities in the same industry, except that
         this restriction does not apply to U.S. Government
         Securities;

              2.   Make loans except through (a) the purchase of
         debt obligations in accordance with its investment
         objective and policies; (b) the lending of portfolio
         securities; or (c) the use of repurchase agreements;

              3.   Issue senior securities (except to the extent
         that securities lending may be considered senior
         securities) or borrow money, except the Fund may, in
         accordance with the provisions of the 1940 Act,
         (i) borrow from a bank in a privately arranged
         transaction if after such borrowing there is asset
         coverage of at least 300% as defined in the 1940 Act and
         (ii) borrow for temporary purposes in an amount not
         exceeding 5% of the value of the total assets of the
         Fund;

              4.   Pledge, hypothecate, mortgage or otherwise
         encumber its assets, except to secure permitted
         borrowings;

              5.   Invest in companies for the purpose of
         exercising control; or

              6.   (a) Purchase or sell real estate, except that
         it may purchase and sell securities of companies which
         deal in real estate or interests therein and securities
         that are secured by real estate, provided such
         securities are securities of the type in which the Fund
         may invest; (b) purchase or sell commodities or



                                8





<PAGE>


         commodity contracts, including futures contracts (except
         foreign currencies, foreign currency options and
         futures, options and futures on securities and
         securities indices and forward contracts or contracts
         for the future acquisition or delivery of securities and
         foreign currencies and related options on futures
         contracts and other similar contracts); (c) invest in
         interests in oil, gas, or other mineral exploration or
         development programs; (d) purchase securities on margin,
         except for such short-term credits as may be necessary
         for the clearance of transactions; and (e) act as an
         underwriter of securities, except that the Fund may
         acquire restricted securities under circumstances in
         which, if such securities were sold, the Fund might be
         deemed to be an underwriter for purposes of the U.S.
         Securities Act of 1933 (the "1933 Act").

_____________________________________________________________

                     MANAGEMENT OF THE FUND
_____________________________________________________________

Directors and Officers

         The Directors and principal officers of the Company,
their ages and their principal occupations during the past five
years are set forth below.  Each of the Directors and officers
are trustees, directors and officers of other registered
investment companies sponsored by the Adviser.  Unless otherwise
specified, the address of each such person is 1345 Avenue of the
Americas, New York, New York 10105.

Directors

         JOHN D. CARIFA,1  55, Chairman of the Board, is the
President, Chief Operating Officer and a Director of Alliance
Capital Management Corporation ("ACMC") with which he has been
associated since prior to 1995.

         RUTH BLOCK, 70, was formerly an Executive Vice President
and the Chief Insurance Officer of The Equitable; Chairman and
Chief Executive Officer of Evlico; a Director of Avon, Tandem
Financial Group and Donaldson, Lufkin & Jenrette Securities
Corporation.  She is currently a Director of Ecolab Incorporated
____________________

1.  An "interested person" of the Fund as defined in the 1940
    Act.



                                9





<PAGE>


(specialty chemicals) and BP Amoco Corporation (oil and gas).
Her address is P.O. Box 4623, Stamford, Connecticut 06903.

         DAVID H. DIEVLER, 71, is an independent consultant.
Until December 1994 he was Senior Vice President of ACMC
responsible for mutual fund administration.  Prior to joining
ACMC in 1984 he was Chief Financial Officer of Eberstadt Asset
Management since 1968.  Prior to that he was a Senior Manager at
Price Waterhouse & Co.  He is a member of American Institute of
Certified Public Accountants since 1953.  His address is P.O.
Box 167, Spring Lake, New Jersey 07762.

         JOHN H. DOBKIN, 58, is a Consultant.  He was formerly a
Senior Advisor from June 1999-June 2000 and President from
December 1989-May 1999 of Historic Hudson Valley (historic
preservation).  Previously, he was Director of the National
Academy of Design. During 1988-92, he was a Director and Chairman
of the Audit Committee of ACMC.  His address is P.O. Box 12,
Annandale, New York 12504.

         WILLIAM H. FOULK, JR., 68, is an Investment Adviser and
an independent consultant.  He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1995.  He was
formerly Deputy Comptroller of the State of New York and, prior
thereto, Chief Investment Officer of the New York Bank for
Savings.  His address is Room 100, 2 Greenwich Plaza, Greenwich,
Connecticut 06830.

         DR. JAMES M. HESTER, 76, is President of the Harry Frank
Guggenheim Foundation with which he has been associated since
prior to 1995.  He was formerly President of New York University
and the New York Botanical Garden, Rector of the United Nations
University and Vice Chairman of the Board of the Federal Reserve
Bank of New York.  His address is 25 Cleveland Lane, Princeton,
New Jersey 08540.

         CLIFFORD L. MICHEL, 61, is a partner in the law firm of
Cahill Gordon & Reindel with which he has been associated since
prior to 1995.  He is President and Chief Executive Officer of
Wenonah Development Company (investments) and a Director of
Placer Dome, Inc. (mining).  His address is St. Bernard's Road,
Gladstone, New Jersey 07934.

         DONALD J. ROBINSON, 66, is Senior Counsel to the law
firm of Orrick, Herrington & Sutcliffe LLP since January 1995.
He was formerly a senior partner and a member of the Executive
Committee of that firm.  He was also a member of the Municipal



                               10





<PAGE>


Securities Rulemaking Board and Trustee of the Museum of the City
of New York.  His address is 98 Hell's Peak Road, Weston, Vermont
05161.

Officers


         JOHN D. CARIFA, Chairman and President, see biography
under "Directors", above.

         KATHLEEN CORBET, Senior Vice President, 40, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1995.

         CHRISTOPHER M. TOUB, Senior Vice President, 41, is an
Executive Vice President of ACMC, with which he has been
associated since prior to 1995.

         PETER ANASTOS, Vice President, 58, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1995.

         THOMAS BARDONG, Vice President, 55, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1995.

         ANDREW J. FRANK, Vice President, 29, is a Vice President
of ACMC, with which he has been associated since prior to 1995.
He joined the Domestic Equity Research group in December 1999.
Prior thereto, he was a research analyst with the Small Mid-Cap
group from 1996 to December 1999.

         GERALD T. MALONE, Vice President, 46, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1995.

         JANET A. WALSH, Vice President, 38, is a Vice President
of ACMC in Semiconductors, Semiconductor Capital Equipment and
Information Technology Services since 1996.  Prior thereto, she
served as Executive Director of The Ellis L. Phillips Foundation,
overseeing the foundation's philanthropic and investment
activities since prior to 1995.

         STEVEN R. WELLER, Vice President, 30, is a Vice
President of ACMC and an industry analyst covering the
telecommunications sector since April 1998.  Prior thereto, he
was an industry analyst responsible for wireline and wireless




                               11





<PAGE>


telecommunications research at Deutsche Morgan Grenfell and
Lehman Brothers since prior to 1995.

         ANTHONY V. XUEREB, Vice President, 33, is a Vice
President of ACMC since February 1998.  Prior thereto, he was a
research analyst at Neuberger & Berman covering the
telecommunications equipment, data networking equipment and
software industries, paper and forest products and he also
managed the Research Fund during 1997.  Previously, he was a
research analyst at Fiduciary Trust International since prior to
1995.

         EDMUND P. BERGAN, JR., Secretary, 50, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services, Inc. ("AFS"), with which
he has been associated since prior to 1995.

         ANDREW L. GANGOLF, Assistant Secretary, 46, is a Senior
Vice President and Assistant General Counsel of AFD, with which
he has been associated since prior to 1995.

         DOMENICK PUGLIESE, Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD,with which he
has been associated since prior to May 1995.

         MARK D. GERSTEN, Treasurer and Chief Financial Officer,
50, is a Senior Vice President of AFS, with which he has been
associated since prior to 1995.

         VINCENT S. NOTO, Controller, 35, is a Vice President of
AFS, with which he has been associated since prior to 1995.

         The Company does not pay any fees to, or reimburse
expenses of, its Directors who are considered "interested
persons" of the Company.  The aggregate compensation to be paid
by the Company to each of the Directors during the Company's
fiscal year ending October 31, 2000 (estimating future payments
based upon existing arrangements), and the aggregate compensation
paid to each of the Directors during calendar year 1999 by all of
the registered investment companies to which the Adviser provides
investment advisory services (collectively, the "Alliance Fund
Complex"), and the total number of registered investment
companies (and separate investment portfolios within those
companies) in the Alliance Fund Complex with respect to which
each of the Directors serves as a director or trustee, are set
forth below.  Neither the Company nor any other registered
investment company in the Alliance Fund Complex provides
compensation in the form of pension or retirement benefits to any



                               12





<PAGE>


of its directors or trustees.  Each of the Directors is a
director or trustee of one or more other registered investment
company in the Alliance Fund Complex.

                                                               Total Number
                                                 Total Number  of Investment
                                                 of Investment Portfolios
                                                 Companies in  Within the
                                                 the Alliance  Alliance
                                   Total         Fund Complex, Fund Complex,
                                   Compensation  Including the Including
                                   From the      Company, as   the Fund, as
                      Aggregate    Alliance Fund to which the  to which the
                      Compensation Complex,      the Director  the Director
Name of               From the     Including     is a Director is a Director
Director              Company*     the Company   or Trustee    or Trustee
_________             ____________ _____________ _____________ _____________

John D. Carifa           $-0-         $-0-             49           108
Ruth Block               $[____]      154,263          38            84
David H. Dievler         $[____]      210,188          44            91
John H. Dobkin           $[____]      206,463          41            88
William H. Foulk, Jr.    $[____]      246,413          45           103
James M. Hester          $[____]      164,138          39            85
Clifford L. Michel       $[____]      183,388          39            87
Donald J. Robinson       $[____]      154,313          41            97
_______________
*  estimated

         As of [_________], 2000, the Directors and officers of
the Company as a group owned less than 1% of the shares of the
Fund.

Adviser

         The Fund's investment adviser, Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York
10105, is a leading international investment adviser managing
client accounts with assets as of [__________], 2000 totaling
more than $[____] billion (of which more than $[____] billion
represented the assets of investment companies).  As of
[_________], the Adviser managed retirement assets for many of
the largest public and private employee benefit plans (including
[__] of the nation's FORTUNE 100 companies), for public employee
retirement funds in [__] states, for investment companies, and
for foundations, endowments, banks and insurance companies
worldwide.  The [__] registered investment companies managed by




                               13





<PAGE>


the Adviser, comprising [___] separate investment portfolios,
currently have approximately [__] million shareholder accounts.

         ACMC is the general partner of Alliance and an indirect
wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"),
a Delaware corporation whose shares are traded on the New York
Stock Exchange ("NYSE").  As of October 2, 2000, AXA Financial
and certain of its subsidiaries were the beneficial owners of
approximately 52% of the outstanding Alliance units.  Alliance
Capital Management Holding L.P. ("Alliance Holding") owned
approximately 30% of the outstanding Alliance units.2   Equity
interests in Alliance Holding are traded on the NYSE in the form
of units.  Approximately 98% of such units are owned by the
public and management or employees of Alliance and approximately
2% are owned by AXA Financial.  As of June 30, 2000, AXA, a
French insurance holding company, owned approximately 60% of the
issued and outstanding shares of common stock of AXA Financial.

         Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Company and pays all compensation of Directors and officers
of the Company who are affiliated persons of the Adviser.  The
Adviser or its affiliates also furnishes the Company, without
charge, management supervision and assistance and office
facilities and provides persons satisfactory to the Company's
Board of Directors to serve as the Company's officers.

         The Adviser is, under the Advisory Agreement,
responsible for certain expenses incurred by the Company,
including, for example, office facilities and certain
administrative services, and any expenses incurred in promoting
the sale of Fund shares (other than the portion of the
promotional expenses borne by the Fund in accordance with an
effective plan pursuant to Rule 12b-1 under the 1940 Act, and the
costs of printing Fund prospectuses and other reports to
shareholders and fees related to registration with the Securities
and Exchange Commission (the "Commission") and with state
____________________

2.  Until October 29, 1999, Alliance Holding served as the
    investment adviser to the Fund.  On that date, Alliance
    Holding reorganized by transferring its business to the
    Adviser.  Prior thereto, the Adviser had no material business
    operations.  One result of the organization was that the
    Advisory Agreement, then between the Fund and Alliance
    Holding, was transferred to the Adviser, and ownership of
    Alliance Fund Distributors, Inc. and Alliance Fund Services,
    Inc., the Fund's principal underwriter and transfer agent,
    respectively, also was transferred to the Adviser.


                               14





<PAGE>


regulatory authorities.)

         The Company has, under the Advisory Agreement, assumed
the obligation for payment of all of its other expenses.  As to
the obtaining of services other than those specifically provided
to the Company by the Adviser, the Company may employ its own
personnel.  For such services, it also may utilize personnel
employed by the Adviser or by other subsidiaries of Equitable. In
such event, the services are provided to the Company at cost and
the payments specifically approved by the Company's Board of
Directors.

         For the services rendered by the Adviser under the
Advisory Agreement, the Company pays the Adviser, with respect to
the Fund, from [________], 2001 to [________], 2002, a minimum
fee at an annual rate of [___]% of the Fund's average daily net
assets, which may be increased at the end of such annual period
to a maximum of [____]% based on the investment performance of
the Portfolio in relation to the performance of the Russell
2500TM Growth Index (the "Index").  Beginning in [________],
2002, the Adviser receives a basic fee of [____]% of the Fund's
average daily net assets (the "Basic Fee").  The Basic Fee is
adjusted upward or downward to a maximum of [_] basis points
based on the investment performance of the Fund in relation to
the performance of the Index.  For any period prior to [_____]
2001, the Adviser receives a flat fee of [____]% of the Fund's
average daily net assets, without any performance adjustment.

         The Advisory Agreement became effective on [_______].
200_ with respect to the Fund having been approved by the
unanimous vote, cast in person, of the Company's Directors,
including the Directors who are not parties to the Advisory
Agreement or interested persons as defined in the 1940 Act of any
such party, at a meeting called for that purpose and held on
[________],200_.

         The Advisory Agreement will remain in effect until
[_________], 200_ and continue in effect thereafter only so long
as its continuance is specifically approved at least annually by
a vote of a majority of the Fund's outstanding voting securities
or by the Company's Board of Directors, including in either case,
approval by a majority of the Directors who are not parties to
the Advisory Agreement or interested persons of any such party as
defined by the 1940 Act.

         The Advisory Agreement is terminable without penalty by
a vote of a majority of the Fund's outstanding voting securities
(as defined in the 1940 Act) or by a vote of a majority of the



                               15





<PAGE>


Company's Directors on 60 days' written notice, or by the Adviser
on 60 days' written notice, and will automatically terminate in
the event of its assignment.  The Advisory Agreement provides
that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or of reckless disregard
of its obligations thereunder, the Adviser shall not be liable
for any action or failure to act in accordance with its duties
thereunder.

         Certain other clients of the Adviser may have investment
objectives and policies similar to those of the Fund.  The
Adviser may, from time to time, make recommendations which result
in the purchase or sale of a particular security by its other
clients simultaneously with the Fund.  If transactions on behalf
of more than one client during the same period increase the
demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price or quantity.
It is the policy of the Adviser to allocate advisory
recommendations and the placing of orders in a manner which is
deemed equitable by the Adviser to the accounts involved,
including the Fund.  When two or more of the clients of the
Adviser (including the Fund) are purchasing or selling the same
security on a given day from the same broker-dealer, such
transactions may be averaged as to price.

         The Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies,
and is investment adviser to AFD Exchange Reserves, Alliance
Disciplined Value Fund, Inc. Alliance All-Asia Investment Fund,
Inc., Alliance Balanced Shares, Inc., Alliance Bond Fund, Inc.,
Alliance Capital Reserves, Alliance Global Dollar Government
Fund, Inc., Alliance Global Small Cap Fund, Inc., Alliance Global
Strategic Income Trust, Inc., Alliance Government Reserves,
Alliance Greater China '97 Fund, Inc., Alliance Growth and Income
Fund, Inc., Alliance Health Care Fund, Inc., Alliance High Yield
Fund, Inc., Alliance Institutional Funds, Inc., Alliance
Institutional Reserves, Inc., Alliance International Fund,
Alliance International Premier Growth Fund, Inc., Alliance
Limited Maturity Government Fund, Inc., Alliance Money Market
Fund, Alliance Mortgage Securities Income Fund, Inc., Alliance
Multi-Market Strategy Trust, Inc., Alliance Municipal Income
Fund, Inc., Alliance Municipal Income Fund II, Alliance Municipal
Trust, Alliance New Europe Fund, Inc., Alliance North American
Government Income Trust, Inc., Alliance Premier Growth Fund,
Inc., Alliance Quasar Fund, Inc., Alliance Real Estate Investment
Fund, Inc., Alliance Technology Fund, Inc., Alliance Utility
Income Fund, Inc., Alliance Variable Products Series Fund, Inc.,
Alliance Worldwide Privatization Fund, Inc., The Alliance Fund,



                               16





<PAGE>


Inc., The Alliance Portfolios and EQ Advisors Trust all
registered open-end investment companies; and to ACM Government
Income Fund, Inc., ACM Government Opportunity Fund, Inc., ACM
Government Securities Fund, Inc., ACM Government Spectrum Fund,
Inc., ACM Managed Dollar Income Fund, Inc., ACM Managed Income
Fund, Inc., ACM Municipal Securities Income Fund, Inc., Alliance
All-Market Advantage Fund, Inc., Alliance World Dollar Government
Fund, Inc., Alliance World Dollar Government Fund II, Inc., The
Austria Fund, Inc., The Korean Investment Fund, Inc., The
Southern Africa Fund, Inc. and The Spain Fund, Inc., all
registered closed-end investment companies.

___________________________________________________________

                      EXPENSES OF THE FUND
___________________________________________________________

Distribution Services Agreement

         The Company has entered into a Distribution Services
Agreement (the "Agreement") with Alliance Fund Distributors,
Inc., the Company's principal underwriter (the "Principal
Underwriter"), to permit the Principal Underwriter to distribute
the Fund's shares and to permit the Fund to pay distribution
services fees to defray expenses associated with distribution of
its Class A shares, Class B shares and Class C shares in
accordance with a plan of distribution, which is included in the
Agreement and which has been duly adopted and approved in
accordance with Rule 12b-1 adopted by the Securities and Exchange
Commission (the "Commission") under the 1940 Act (the "Rule 12b-1
Plan").

         Distribution services fees are accrued daily and paid
monthly and charged as expenses of the Fund as accrued.  The
distribution services fees attributable to the Class B shares and
Class C shares are designed to permit an investor to purchase
such shares through broker-dealers without the assessment of an
initial sales charge and at the same time to permit the Principal
Underwriter to compensate broker-dealers in connection with the
sale of such shares.  In this regard the purpose and function of
the combined contingent deferred sales charge and respective
distribution services fee on the Class B shares and Class C
shares are the same as those of the initial sales charge and
distribution services fee with respect to the Class A shares in
that in each case the sales charge and distribution services fee
provides for the financing of the distribution of the relevant
class of the Fund's shares.




                               17





<PAGE>



         With respect to Class A shares of the Fund, distribution
expenses accrued by AFD in one fiscal year may not be paid from
distribution services fees received from the Fund in subsequent
fiscal years.  AFD's compensation with respect to Class B and
Class C shares under the Rule 12b-1 Plan is directly tied to the
expenses incurred by AFD.  Actual distribution expenses for
Class B and Class C shares for any given year, however, will
probably exceed the distribution services fees payable under the
Rule 12b-1 Plan and payments received from contingent deferred
sales charges ("CDSCs").  The excess will be carried forward by
AFD and reimbursed from distribution services fees payable under
the Rule 12b-1 Plan and payments subsequently received through
CDSCs, so long as the Rule 12b-1 Plan and the Agreement are in
effect.

         The Rule 12b-1 Plan is in compliance with rules of the
National Association of Securities Dealers, Inc. which
effectively limit the annual asset-based sales charges and
service fees that a mutual fund may pay on a class of shares to
 .75% and .25%, respectively, of the average annual net assets
attributable to that class.  The rules also limit the aggregate
of all front-end, deferred and asset-based sales charges imposed
with respect to a class of shares by a mutual fund that also
charges a service fee to 6.25% of cumulative gross sales of
shares of that class, plus interest at the prime rate plus 1% per
annum.

         In approving the Agreement, the Directors of the Company
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders.  The
distribution services fee of a particular class will not be used
to subsidize the provision of distribution services with respect
to any other class.


         The Adviser may from time to time and from its own funds
or such other resources as may be permitted by rules of the
Commission make payments for distribution services to the
Principal Underwriter; the latter may in turn pay part or all of
such compensation to brokers or other persons for their
distribution assistance.

         The Agreement was initially approved by the Directors of
the Fund at a meeting held on [________], 200_.  The Agreement
will continue in effect until [________], 200_ and continue in
effect thereafter so long as its continuance is specifically
approved at least annually by the Directors of the Fund or by



                               18





<PAGE>


vote of the holders of a majority of the outstanding voting
securities (as defined in the 1940 Act) of that class, and, in
either case, by a majority of the Directors of the Fund who are
not parties to the Agreement or interested persons, as defined in
the 1940 Act, of any such party (other than as directors of the
Fund) and who have no direct or indirect financial interest in
the operation of the Rule 12b-1 Plan or any agreement related
thereto.

         In the event that the Agreement is terminated or not
continued with respect to the Class A shares, Class B shares or
Class C shares, (i) no distribution services fees (other than
current amounts accrued but not yet paid) would be owed by the
Fund to the Principal Underwriter with respect to that class and
(ii) the Fund would not be obligated to pay the Principal
Underwriter for any amounts expended under the Agreement not
previously recovered by the Principal Underwriter from
distribution services fees in respect of shares of such class or
through deferred sales charges.

Transfer Agency Agreement

         Alliance Fund Services, Inc., an indirect wholly-owned
subsidiary of the Adviser, located at 500 Plaza Drive, Secaucus,
New Jersey 07094, acts as the Fund's registrar, transfer agent
and dividend-disbursing agent for a fee based upon the number of
account holders of each of the Class A shares, Class B shares and
Class C shares of the Fund, plus reimbursement for out-of-pocket
expenses.  The transfer agency fee with respect to the Class B
shares and Class C shares is higher than the transfer agency fee
with respect to the Class A shares.

Code of Ethics

         The Fund, the Adviser and the Principal Underwriter have
each adopted codes of ethics pursuant to Rule 17j-1 of the 1940
Act.  These codes of ethics permit personnel subject to the codes
to invest in securities, including securities that may be
purchased or held by the Fund.

_______________________________________________________________

                       PURCHASE OF SHARES
_______________________________________________________________

         The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Buy Shares."



                               19





<PAGE>



General

         Shares of the Fund are offered on a continuous basis at
a price equal to their net asset value plus an initial sales
charge at the time of purchase ("Class A shares"), with a
contingent deferred sales charge ("Class B shares"), or without
any initial sales charge and, as long as the shares are held for
one year or more, without any contingent deferred sales charge
("Class C shares").  Shares of the Fund that are offered subject
to a sales charge are offered through (i) investment dealers that
are members of the National Association of Securities Dealers,
Inc. and have entered into selected dealer agreements with the
Principal Underwriter ("selected dealers"), (ii) depository
institutions and other financial intermediaries or their
affiliates, that have entered into selected agent agreements with
the Principal Underwriter ("selected agents") and (iii) the
Principal Underwriter.

         Investors may purchase shares of the Fund either through
selected broker-dealers, agents, financial intermediaries or
other financial representatives or directly through the Principal
Underwriter.  A transaction, service, administrative or other
similar fee may be charged by your broker-dealer, agent,
financial intermediary or other financial representative with
respect to the purchase, sale or exchange of shares made through
such financial representative.  Such financial representative may
also impose requirements with respect to the purchase, sale or
exchange of shares that are different from, or in addition to,
those imposed by the Fund, including requirements as to the
minimum initial and subsequent investment amounts.  Sales
personnel of selected dealers and agents distributing the Fund's
shares may receive differing compensation for selling Class A,
Class B or Class C shares.  The Fund may refuse any order for the
purchase of shares.  The Fund reserves the right to suspend the
sale of its shares to the public in response to conditions in the
securities markets or for other reasons.

         The public offering price of shares of the Fund is their
net asset value, plus, in the case of Class A shares, a sales
charge which will vary depending on the purchase alternative
chosen by the investor, as shown in the table below under "-
-Class A Shares".  On each Fund business day on which a purchase
or redemption order is received by the Fund and trading in the
types of securities in which the Fund invests might materially
affect the value of Fund shares, the per share net asset value is
computed in accordance with the Company's Articles of
Incorporation and By-Laws as of the next close of regular trading



                               20





<PAGE>


on the New York Stock Exchange (the "Exchange") (currently
4:00 p.m. Eastern time) by dividing the value of the Fund's total
assets, less its liabilities, by the total number of its shares
then outstanding.  A Fund business day is any day on which the
Exchange is open for trading.

         The respective per share net asset values of the
Class A, Class B and Class C shares are expected to be
substantially the same.  Under certain circumstances, however,
the per share net asset values of the Class B and Class C shares
may be lower than the per share net asset values of the Class A
shares, as a result of the differential daily expense accruals of
the distribution and transfer agency fees applicable with respect
to those classes of shares.  Even under those circumstances, the
per share net asset values of the three classes eventually will
tend to converge immediately after the payment of dividends,
which will differ by approximately the amount of the expense
accrual differential among the classes.

         The Fund will accept unconditional orders for its shares
to be executed at the public offering price equal to their net
asset value next determined (plus applicable Class A sales
charges), as described below.  Orders received by the Principal
Underwriter prior to the close of regular trading on the Exchange
on each day the Exchange is open for trading are priced at the
net asset value computed as of the close of regular trading on
the Exchange on that day (plus applicable Class A sales charges).
In the case of orders for purchase of shares placed through
selected dealers, agents or financial representatives, as
applicable, the applicable public offering price will be the net
asset value as so determined, but only if the selected dealer,
agent or financial representative receives the order prior to the
close of regular trading on the Exchange and transmits it to the
Principal Underwriter prior to 5:00 p.m. Eastern time.  The
selected dealer, agent or financial representative, as
applicable, is responsible for transmitting such orders by
5:00 p.m. (certain selected dealers, agents or financial
representatives may enter into operating agreements permitting
them to transmit purchase information to the Principal
Underwriter after 5:00 p.m. Eastern time and receive that day's
net asset value).  If the selected dealer, agent or financial
representative fails to do so, the investor's right to that day's
closing price must be settled between the investor and the
selected dealer, agent or financial representative, as
applicable.  If the selected dealer, agent or financial
representative, as applicable, receives the order after the close
of regular trading on the Exchange, the price will be based on




                               21





<PAGE>


the net asset value determined as of the close of regular trading
on the Exchange on the next day it is open for trading.

         Following the initial purchase of Fund shares, a
shareholder may place orders to purchase additional shares by
telephone if the shareholder has completed the appropriate
portion of the Subscription Application or an "Autobuy"
application obtained by calling the "For Literature" telephone
number shown on the cover of this Statement of Additional
Information.  Except with respect to certain omnibus accounts,
telephone purchase orders may not exceed $500,000.  Payment for
shares purchased by telephone can be made only by Electronic
Funds Transfer from a bank account maintained by the shareholder
at a bank that is a member of the National Automated Clearing
House Association ("NACHA").  If a shareholder's telephone
purchase request is received before 3:00 p.m. Eastern time on a
Fund business day, the order to purchase shares is automatically
placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of
the close of business on such following business day.

         Full and fractional shares are credited to a
subscriber's account in the amount of his or her subscription. As
a convenience to the subscriber, and to avoid unnecessary expense
to the Fund, stock certificates representing shares of the Fund
are not issued except upon written request to the Fund by the
shareholder or his or her authorized selected dealer or agent.
This facilitates later redemption and relieves the shareholder of
the responsibility for and inconvenience of lost or stolen
certificates.  No certificates are issued for fractional shares,
although such shares remain in the shareholder's account on the
books of the Fund.

         In addition to the discount or commission amount paid to
dealers or agents, the Principal Underwriter from time to time
pays additional cash or other incentives to dealers or agents, in
connection with the sale of shares of the Fund.  Such additional
amounts may be utilized, in whole or in part to provide
additional compensation to registered representatives who sell
shares of the Fund.    On some occasions, such cash or other
incentives will take the form of payment for attendance at
seminars, meals, sporting events or theater performances, or
payment for travel, lodging and entertainment incurred in
connection with travel taken by persons associated with a dealer
or agent to locations within or outside the United States.  Such
dealer or agent may elect to receive cash incentives of
equivalent amount in lieu of such payments.




                               22





<PAGE>


         Class A, Class B and Class C shares each represent an
interest in the same portfolio of investments of the Fund, have
the same rights and are identical in all respects, except that
(i) Class A shares bear the expense of the initial sales charge
(or contingent deferred sales charge when applicable) and Class B
and Class C shares bear the expense of the deferred sales charge,
(ii) Class B shares and Class C shares each bear the expense of a
higher distribution services fee than that borne by Class A
shares, (iii) Class B shares and Class C shares bear higher
transfer agency costs than those borne by Class A shares,
(iv) each of Class A, Class B and Class C shares has exclusive
voting rights with respect to provisions of the Rule 12b-1 Plan
pursuant to which its distribution services fee is paid and other
matters for which separate class voting is appropriate under
applicable law, provided that, if the Fund submits to a vote of
the Class A shareholders, an amendment to the Rule 12b-1 Plan
that would materially increase the amount to be paid thereunder
with respect to the Class A shares, then such amendment will also
be submitted to the Class B shareholders and the Class A and
Class B shareholders will vote separately by class, and
(v) Class B shares are subject to a conversion feature.  Each
class has different exchange privileges and certain different
shareholder service options available.

         The Directors of the Company have determined that
currently no conflict of interest exists between or among the
Class A, Class B and Class C shares of the Fund.  On an ongoing
basis, the Directors of the Company, pursuant to their fiduciary
duties under the 1940 Act and state law, will seek to ensure that
no such conflict arises.

Alternative Purchase Arrangements

         The alternative purchase arrangements available with
respect to Class A shares, Class B shares and Class C shares
permit an investor to choose the method of purchasing shares that
is most beneficial given the amount of the purchase, the length
of time the investor expects to hold the shares, and other
circumstances.  Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated
distribution services fee and contingent deferred sales charge on
Class B shares prior to conversion, or the accumulated
distribution services fee and contingent deferred sales charge on
Class C shares, would be less than the initial sales charge and
accumulated distribution services fee on Class A shares purchased
at the same time, and to what extent such differential would be
offset by the higher return of Class A shares.  Class A shares
will normally be more beneficial than Class B shares to the



                               23





<PAGE>


investor who qualifies for reduced initial sales charges on
Class A shares, as described below.  In this regard, the
Principal Underwriter will reject any order (except orders from
certain retirement plans and certain employee benefit plans) for
more than $250,000 for Class B shares.  (See Appendix B for
information concerning the eligibility of certain employee
benefit plans to purchase Class B shares at net asset value
without being subject to a contingent deferred sales charge and
the ineligibility of certain such plans to purchase Class A
shares.)  Class C shares will normally not be suitable for the
investor who qualifies to purchase Class A shares at net asset
value.  For this reason, the Principal Underwriter will reject
any order for more than $1,000,000 for Class C shares.

         Class A shares are subject to a lower distribution
services fee and, accordingly, pay correspondingly higher
dividends per share than Class B shares or Class C shares.
However, because initial sales charges are deducted at the time
of purchase, investors purchasing Class A shares would not have
all their funds invested initially and, therefore, would
initially own fewer shares.  Investors not qualifying for reduced
initial sales charges who expect to maintain their investment for
an extended period of time might consider purchasing Class A
shares because the accumulated continuing distribution charges on
Class B shares or Class C shares may exceed the initial sales
charge on Class A shares during the life of the investment.
Again, however, such investors must weigh this consideration
against the fact that, because of such initial sales charges, not
all their funds will be invested initially.

         Other investors might determine, however, that it would
be more advantageous to purchase Class B shares or Class C shares
in order to have all their funds invested initially, although
remaining subject to higher continuing distribution charges and
being subject to a contingent deferred sales charge for a four-
year and one-year period, respectively.  For example, based on
current fees and expenses, an investor subject to the 4.25%
initial sales charge on Class A shares would have to hold his or
her investment approximately seven years for the Class C
distribution services fee to exceed the initial sales charge plus
the accumulated distribution services fee of Class A shares.  In
this example, an investor intending to maintain his or her
investment for a longer period might consider purchasing Class A
shares.  This example does not take into account the time value
of money, which further reduces the impact of the Class C
distribution services fees on the investment, fluctuations in net
asset value or the effect of different performance assumptions.




                               24





<PAGE>


         Those investors who prefer to have all of their funds
invested initially but may not wish to retain Fund shares for the
four-year period during which Class B shares are subject to a
contingent deferred sales charge may find it more advantageous to
purchase Class C shares.

Class A Shares

         The public offering price of Class A shares is the net
asset value plus a sales charge, as set forth below.

                          Sales Charge
                                                 Discount or
                                                 Commission
                                  As % of        to Dealers
                    As % of       the            or Agents
                    Net           Public         As % of
Amount of           Amount        Offering       Offering
Purchase            Invested      Price          Price
________            ________      ________       ____________
Less than
  $100,000 .  .  .  4.44%         4.25%          4.00%
$100,000 but
  less than
  $250,000. .  .  . 3.36          3.25           3.00
$250,000 but
  less than
  $500,000. .  .  . 2.30          2.25           2.00
$500,000 but
  less than
  $1,000,000*. .  . 1.78          1.75           1.50
_____________

*  There is no initial sales charge on transactions of $1,000,000
or more.

         With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a
contingent deferred sales charge equal to 1% of the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption.  Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.  The
contingent deferred sales charge on Class A shares will be waived
on certain redemptions, as described below under "--Class B
Shares."  In determining the contingent deferred sales charge
applicable to a redemption of Class A shares, it will be assumed



                               25





<PAGE>


that the redemption is, first, of any shares that are not subject
to a contingent deferred sales charge (for example, because an
initial sales charge was paid with respect to the shares, or they
have been held beyond the period during which the charge applies
or were acquired upon the reinvestment of dividends or
distributions) and, second, of shares held longest during the
time they are subject to the sales charge.  Proceeds from the
contingent deferred sales charge on Class A shares are paid to
the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sales of Class A shares, such as the payment
of compensation to selected dealers and agents for selling
Class A shares.  With respect to purchases of $1,000,000 or more
made through selected dealers or agents, the Adviser may,
pursuant to the Distribution Services Agreement described above,
pay such dealers or agents from its own resources a fee of up to
1% of the amount invested to compensate such dealers or agents
for their distribution assistance in connection with such
purchases.

         No initial sales charge is imposed on Class A shares
issued (i) pursuant to the automatic reinvestment of income
dividends or capital gains distributions, (ii) in exchange for
Class A shares of other "Alliance Mutual Funds" (as that term is
defined under "Combined Purchase Privilege" below), except that
an initial sales charge will be imposed on Class A shares issued
in exchange for Class A shares of AFD Exchange Reserves ("AFDER")
that were purchased for cash without the payment of an initial
sales charge and without being subject to a contingent deferred
sales charge or (iii) upon the automatic conversion of Class B
shares as described below under "Class B Shares-Conversion
Feature."  The Fund receives the entire net asset value of its
Class A shares sold to investors. The Principal Underwriter's
commission is the sales charge shown above less any applicable
discount or commission "reallowed" to selected dealers and
agents.  The Principal Underwriter will reallow discounts to
selected dealers and agents in the amounts indicated in the table
above.  In this regard, the Principal Underwriter may elect to
reallow the entire sales charge to selected dealers and agents
for all sales with respect to which orders are placed with the
Principal Underwriter.  A selected dealer who receives
reallowance in excess of 90% of such a sales charge may be deemed
to be an "underwriter" under the Securities Act.

         Set forth below is an example of the method of computing
the offering price of the Class A shares.  The example assumes a
purchase of Class A shares of the Fund aggregating less than



                               26





<PAGE>


$100,000 subject to the schedule of sales charges set forth above
at a price based upon the net asset value of Class A shares of
the Fund on [_______], 2000.

              Net Asset Value per Class A Share at    [$_____]
              [________], 2000

              Class A Per Share Sales Charge 4.25%
              of offering price (4.44% of net asset
              value per share)                        [$____]
                                                      ______

              Class A Per Share Offering Price to
              the Public                              [$____]
                                                      ======

         Investors choosing the initial sales charge alternative
may under certain circumstances be entitled to pay (i) no initial
sales charge (but may be subject in most such cases to a
contingent deferred sales charge) or (ii) a reduced initial sales
charge.  The circumstances under which such investors may pay a
reduced initial sales charge are described below.

         Combined Purchase Privilege.  Certain persons may
qualify for the sales charge reductions indicated in the schedule
of such charges above by combining purchases of shares of the
Fund into a single "purchase," if the resulting "purchase" totals
at least $100,000.  The term "purchase" refers to: (i) a single
purchase by an individual, or to concurrent purchases, which in
the aggregate are at least equal to the prescribed amounts, by an
individual, his or her spouse and their children under the age of
21 years purchasing shares of the Fund for his, her or their own
account(s); (ii) a single purchase by a trustee or other
fiduciary purchasing shares for a single trust, estate or single
fiduciary account although more than one beneficiary is involved;
or (iii) a single purchase for the employee benefit plans of a
single employer.  The term "purchase" also includes purchases by
any "company," as the term is defined in the 1940 Act, but does
not include purchases by any such company which has not been in
existence for at least six months or which has no purpose other
than the purchase of shares of the Fund or shares of other
registered investment companies at a discount.  The term
"purchase" does not include purchases by any group of individuals
whose sole organizational nexus is that the participants therein
are credit card holders of a company, policy holders of an
insurance company, customers of either a bank or broker-dealer or
clients of an investment adviser.  A "purchase" may also include




                               27





<PAGE>


shares, purchased at the same time through a single selected
dealer or agent, of any other "Alliance Mutual Fund." Currently,
the Alliance Mutual Funds include:

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
  -Corporate Bond Portfolio
  -Quality Bond Portfolio
  -U.S. Government Portfolio
Alliance Disciplined Value Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Health Care Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
  -California Portfolio
  -Insured California Portfolio
  -Insured National Portfolio
  -National Portfolio
  -New York Portfolio
Alliance Municipal Income Fund II
  -Arizona Portfolio
  -Florida Portfolio
  -Massachusetts Portfolio
  -Michigan Portfolio
  -Minnesota Portfolio
  -New Jersey Portfolio
  -Ohio Portfolio
  -Pennsylvania Portfolio
  -Virginia Portfolio
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
  -Biotechnology Portfolio
  -Premier Portfolio



                               28





<PAGE>


  -Technology Portfolio
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios
  -Alliance Growth Fund
  -Alliance Conservative Investors Fund
  -Alliance Growth Investors Fund
  -Alliance Short-Term U.S. Government Fund

         Prospectuses for the Alliance Mutual Funds may be
obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "For Literature" telephone number
shown on the front cover of this Statement of Additional
Information.

         Cumulative Quantity Discount (Right of Accumulation). An
investor's purchase of additional Class A shares of the Fund may
qualify for a Cumulative Quantity Discount.  The applicable sales
charge will be based on the total of:

              (i)  the investor's current purchase;

              (ii)  the net asset value (at the close of business
on the previous day) of (a) all shares of the Fund held by the
investor and (b) all shares of any other Alliance Mutual Fund
held by the investor; and

              (iii)  the net asset value of all shares described
in paragraph (ii) owned by another shareholder eligible to
combine his or her purchase with that of the investor into a
single "purchase" (see above).

         For example, if an investor owned shares of an Alliance
Mutual Fund worth $200,000 at their then current net asset value
and, subsequently, purchased Class A shares of the Fund worth an
additional $100,000, the sales charge for the $100,000 purchase
would be at the 2.25% rate applicable to a single $300,000
purchase of shares of the Fund, rather than the 3.25% rate.

         To qualify for the Combined Purchase Privilege or to
obtain the Cumulative Quantity Discount on a purchase through a
selected dealer or agent, the investor or selected dealer or
agent must provide the Principal Underwriter with sufficient
information to verify that each purchase qualifies for the
privilege or discount.



                               29





<PAGE>



         Statement of Intention.  Class A investors may also
obtain the reduced sales charges shown in the table above by
means of a written Statement of Intention, which expresses the
investor's intention to invest not less than $100,000 within a
period of 13 months in Class A shares (or Class A, Class B and/or
Class C shares) of the Fund or any other Alliance Mutual Fund.
Class A investors investing pursuant to the Statement of
Intention must invest at least $50,000 with their initial
purchase of shares of the Fund.  Each purchase of shares under a
Statement of Intention will be made at the public offering price
or prices applicable at the time of such purchase to a single
transaction of the dollar amount indicated in the Statement of
Intention.  At the investor's option, a Statement of Intention
may include purchases of shares of the Fund or any other Alliance
Mutual Fund made not more than 90 days prior to the date that the
investor signs the Statement of Intention; however, the 13-month
period during which the Statement of Intention is in effect will
begin on the date of the earliest purchase to be included.

         Investors qualifying for the Combined Purchase Privilege
described above may purchase shares of the Alliance Mutual Funds
under a single Statement of Intention.  For example, if at the
time an investor signs a Statement of Intention to invest at
least $100,000 in Class A shares of the Fund, the investor and
the investor's spouse each purchase shares of the Fund worth
$50,000 (for a total of $100,000), it will only be necessary to
invest a total of $150,000 during the following 13 months in
shares of the Fund or any other Alliance Mutual Fund, to qualify
for the 2.25% sales charge on the total amount being invested
(the sales charge applicable to an investment of $250,000).

         The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated.  The
minimum initial investment under a Statement of Intention is
$50,000.  Shares purchased with the first 5% of such amount will
be held in escrow (while remaining registered in the name of the
investor) to secure payment of the higher sales charge applicable
to the shares actually purchased if the full amount indicated is
not purchased, and such escrowed shares will be involuntarily
redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed shares, whether paid in cash or reinvested
in additional Fund shares, are not subject to escrow.  When the
full amount indicated has been purchased, the escrow will be
released.  To the extent that an investor purchases more than the
dollar amount indicated on the Statement of Intention and
qualifies for a further reduced sales charge, the sales charge
will be adjusted for the entire amount purchased at the end of



                               30





<PAGE>


the 13-month period.  The difference in the sales charge will be
used to purchase additional shares of the Fund subject to the
rate of the sales charge applicable to the actual amount of the
aggregate purchases.

         Investors wishing to enter into a Statement of Intention
in conjunction with their initial investment in Class A shares of
the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus while current
Class A shareholders desiring to do so can obtain a form of
Statement of Intention by contacting Alliance Fund Services, Inc.
at the address or telephone numbers shown on the cover of this
Statement of Additional Information.

         Certain Retirement Plans.  Multiple participant payroll
deduction retirement plans may also purchase shares of the Fund
or any other Alliance Mutual Fund at a reduced sales charge on a
monthly basis during the 13-month period following such a plan's
initial purchase.  The sales charge applicable to such initial
purchase of shares of the Fund will be that normally applicable,
under the schedule of the sales charges set forth in this
Statement of Additional Information, to an investment 13 times
larger than such initial purchase.  The sales charge applicable
to each succeeding monthly purchase will be that normally
applicable, under such schedule, to an investment equal to the
sum of (i) the total purchase previously made during the 13-month
period and (ii) the current month's purchase multiplied by the
number of months (including the current month) remaining in the
13-month period.  Sales charges previously paid during such
period will not be retroactively adjusted on the basis of later
purchases.

         Reinstatement Privilege.  A shareholder who has caused
any or all of his or her Class A or Class B shares of the Fund to
be redeemed or repurchased may reinvest all or any portion of the
redemption or repurchase proceeds in Class A shares of the Fund
at net asset value without any sales charge, provided that
(i) such reinvestment is made within 120 calendar days after the
redemption or repurchase date, and (ii) for Class B shares, a
contingent deferred sales charge has been paid and the Principal
Underwriter has approved, at its discretion, the reinvestment of
such shares.  Shares are sold to a reinvesting shareholder at the
net asset value next determined as described above.  A
reinstatement pursuant to this privilege will not cancel the
redemption or repurchase transaction; therefore, any gain or loss
so realized will be recognized for federal income tax purposes,
except that no loss will be recognized to the extent that the
proceeds are reinvested in shares of the Fund within 30 calendar



                               31





<PAGE>


days after the redemption or repurchase transaction.  Investors
may exercise the reinstatement privilege by written request sent
to the Fund at the address shown on the cover of this Statement
of Additional Information.

         Sales at Net Asset Value.  The Fund may sell its Class A
shares at net asset value (i.e., without an initial sales charge)
and without a contingent deferred sales charge to certain
categories of investors including:

             (i)   investment management clients of the Adviser
                   or its affiliates;

            (ii)   officers and present or former Directors of
                   the Company; present or former directors and
                   trustees of other investment companies managed
                   by the Adviser; present or retired full-time
                   employees of the Adviser, the Principal
                   Underwriter, Alliance Fund Services, Inc. and
                   their affiliates; officers and directors of
                   ACMC, the Principal Underwriter, Alliance Fund
                   Services, Inc. and their affiliates; officers,
                   directors and present full-time employees of
                   selected dealers or agents; or the spouse,
                   sibling, direct ancestor or direct descendant
                   (collectively, "relatives") of any such
                   person; or any trust, individual retirement
                   account or retirement plan account for the
                   benefit of any such person or relative; or the
                   estate of any such person or relative, if such
                   shares are purchased for investment purposes
                   (such shares may not be resold except to the
                   Fund);

           (iii)   the Adviser, the Principal Underwriter,
                   Alliance Fund Services, Inc. and their
                   affiliates; certain employee benefit plans for
                   employees of the Adviser, the Principal
                   Underwriter, Alliance Fund Services, Inc. and
                   their affiliates;

            (iv)   registered investment advisers or other
                   financial intermediaries who charge a
                   management, consulting or other fee for their
                   services and who purchase shares through a
                   broker or agent approved by the Principal
                   Underwriter and clients of such registered
                   investment advisers or financial



                               32





<PAGE>


                   intermediaries whose accounts are linked to
                   the master account of such investment adviser
                   or financial intermediary on the books of such
                   approved broker or agent;

             (v)   persons participating in a fee-based program,
                   sponsored and maintained by a registered
                   broker-dealer or other financial intermediary
                   and approved by the Principal Underwriter,
                   pursuant to which such persons pay an asset-
                   based fee to such broker-dealer or financial
                   intermediary, or its affiliate or agent, for
                   services in the nature of investment advisory
                   or administrative services; and

            (vi)   employer-sponsored qualified pension or
                   profit-sharing plans (including Section 401(k)
                   plans), custodial accounts maintained pursuant
                   to Section 403(b)(7), retirement plans and
                   individual retirement accounts (including
                   individual retirement accounts to which
                   simplified employee pension ("SEP")
                   contributions are made), if such plans or
                   accounts are established or administered under
                   programs sponsored by administrators or other
                   persons that have been approved by the
                   Principal Underwriter.

Class B Shares

         Investors may purchase Class B shares at the public
offering price equal to the net asset value per share of the
Class B shares on the date of purchase without the imposition of
a sales charge at the time of purchase.  The Class B shares are
sold without an initial sales charge so that the Fund will
receive the full amount of the investor's purchase payment.

         Proceeds from the contingent deferred sales charge on
the Class B shares are paid to the Principal Underwriter and are
used by the Principal Underwriter to defray the expenses of the
Principal Underwriter related to providing distribution-related
services to the Fund in connection with the sale of the Class B
shares, such as the payment of compensation to selected dealers
and agents for selling Class B shares.  The combination of the
contingent deferred sales charge and the distribution services
fee enables the Fund to sell the Class B shares without a sales
charge being deducted at the time of purchase.  The higher
distribution services fee incurred by Class B shares will cause



                               33





<PAGE>


such shares to have a higher expense ratio and to pay lower
dividends than those related to Class A shares.

         Contingent Deferred Sales Charge.  Class B shares that
are redeemed within four years of purchase will be subject to a
contingent deferred sales charge at the rates set forth below
charged as a percentage of the dollar amount subject thereto. The
charge will be assessed on an amount equal to the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption.  Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.

         To illustrate, assume that an investor purchased 10,000
Class B shares at $10 per share (at a cost of $100,000) and in
the second year after purchase, the net asset value per share is
$12 and, during such time, the investor has acquired 1,000
additional Class B shares upon dividend reinvestment.  If at such
time the investor makes his or her first redemption of 5,000
Class B shares (proceeds of $60,000), 1,000 Class B shares will
not be subject to the charge because of dividend reinvestment.
With respect to the remaining 4,000 Class B shares, the charge is
applied only to the original cost of $10 per share and not to the
increase in net asset value of $2 per share.  Therefore, $40,000
of the $60,000 redemption proceeds will be charged at a rate of
3.0% (the applicable rate in the second year after purchase, as
set forth below).

         The amount of the contingent deferred sales charge, if
any, will vary depending on the number of years from the time of
payment for the purchase of Class B shares until the time of
redemption of such shares.

                       Contingent Deferred Sales Charge as a
Year Since Purchase    % of Dollar Amount Subject to Charge
____________________   _____________________________________
First                                  4.0%
Second                                 3.0%
Third                                  2.0%
Fourth                                 1.0%
Fifth and thereafter                   None

         In determining the contingent deferred sales charge
applicable to a redemption of Class B shares, it will be assumed
that the redemption is, first, of any shares that were acquired
upon the reinvestment of dividends or distributions and, second,
of shares held longest during the time they are subject to the



                               34





<PAGE>


sales charge.  When shares acquired in an exchange are redeemed,
the applicable contingent deferred sales charge and conversion
schedules will be the schedules that applied at the time of the
purchase of shares of the corresponding class of the Alliance
Mutual Fund originally purchased by the shareholder.

         The contingent deferred sales charge is waived on
redemptions of shares (i) following the death or disability, as
defined in the Internal Revenue Code of 1986, as amended (the
"Code"), of a shareholder, (ii) to the extent that the redemption
represents a minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who
has attained the age of 70-1/2, (iii) that had been purchased by
present or former Directors of the Company, by the relative of
any such person, by any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative, or by the estate of any such person or relative, or
(iv) pursuant to a systematic withdrawal plan (see "Shareholder
Services -- Systematic Withdrawal Plan" below).

         Conversion Feature.  Eight years after the end of the
calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A
shares and will no longer be subject to a higher distribution
services fee.  Such conversion will occur on the basis of the
relative net asset values of the two classes, without the
imposition of any sales load, fee or other charge.  The purpose
of the conversion feature is to reduce the distribution services
fee paid by holders of Class B shares that have been outstanding
long enough for the Principal Underwriter to have been
compensated for distribution expenses incurred in the sale of
such shares.

         For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's account will
be considered to be held in a separate sub-account.  Each time
any Class B shares in the shareholder's account (other than those
in the sub-account) convert to Class A, an equal pro-rata portion
of the Class B shares in the sub-account will also convert to
Class A.

         The conversion of Class B shares to Class A shares is
subject to the continuing availability of an opinion of counsel
to the effect that the conversion of Class B shares to Class A
shares does not constitute a taxable event under federal income
tax law.  The conversion of Class B shares to Class A shares may
be suspended if such an opinion is no longer available at the



                               35





<PAGE>


time such conversion is to occur.  In that event, no further
conversions of Class B shares would occur, and shares might
continue to be subject to the higher distribution services fee
for an indefinite period which may extend beyond the period
ending eight years after the end of the calendar month in which
the shareholder's purchase order was accepted.

Class C Shares

         Investors may purchase Class C shares at the public
offering price equal to the net asset value per share of the
Class C shares on the date of purchase without the imposition of
a sales charge either at the time of purchase or, as long as the
shares are held for one year or more, upon redemption.  Class C
shares are sold without an initial sales charge so that the Fund
will receive the full amount of the investor's purchase payment
and, as long as the shares are held for one year or more, without
a contingent deferred sales charge so that the investor will
receive as proceeds upon redemption the entire net asset value of
his or her Class C shares.  The Class C distribution services fee
enables the Fund to sell Class C shares without either an initial
or contingent deferred sales charge, as long as the shares are
held for one year or more.  Class C shares do not convert to any
other class of shares of the Fund and incur higher distribution
services fees and transfer agency costs than Class A shares, and
will thus have a higher expense ratio and pay correspondingly
lower dividends than Class A shares.

         Class C shares that are redeemed within one year of
purchase will be subject to a contingent deferred sales charge of
1%, charged as a percentage of the dollar amount subject thereto.
The charge will be assessed on an amount equal to the lesser of
the cost of the shares being redeemed or their net asset value at
the time of redemption.  Accordingly, no sales charge will be
imposed on increases in net asset value above the initial
purchase price.  In addition, no charge will be assessed on
shares derived from reinvestment of dividends or capital gains
distributions.  The contingent deferred sales charge on Class C
shares will be waived on certain redemptions, as described above
under "--Class B Shares."  In determining the contingent deferred
sales charge applicable to a redemption of Class C shares, it
will be assumed that the redemption is, first, of any shares that
are not subject to a contingent deferred sales charge (for
example, because the shares have been held beyond the period
during which the charge applies or were acquired upon the
reinvestment of dividends or distributions) and, second, of
shares held longest during the time they are subject to the sales
charge.



                               36





<PAGE>



         Proceeds from the contingent deferred sales charge are
paid to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class C shares, such as the
payment of compensation to selected dealers and agents for
selling Class C shares.  The combination of the contingent
deferred sales charge and the distribution services fee enables
the Fund to sell the Class C shares without a sales charge being
deducted at the time of purchase.  The higher distribution
services fee incurred by Class C shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares.

         The contingent deferred sales charge is waived on
redemptions of shares (i) following the death or disability, as
defined in the Code, of a shareholder, (ii) to the extent that
the redemption represents a minimum required distribution from an
individual retirement account or other retirement plan to a
shareholder who has attained the age of 70 1/2, (iii) that had
been purchased by present or former Directors of the Fund, by the
relative of any such person, by any trust, individual retirement
account or retirement plan account for the benefit of any such
person or relative, or by the estate of any such person or
relative, (iv) pursuant to a systematic withdrawal plan (see
"Shareholder Services - Systematic Withdrawal Plan" below), or
(v) sold through programs offered by financial intermediaries and
approved by AFD where such programs offer only shares which are
not subject to a contingent deferred sales charge and where the
financial intermediary establishes a single omnibus account for
each Fund.

_______________________________________________________________

               REDEMPTION AND REPURCHASE OF SHARES
_______________________________________________________________

         The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares -- How to Sell Shares."

Redemption

         Subject only to the limitations described below, the
Company's Articles of Incorporation require that the Fund redeem
the shares tendered to it, as described below, at a redemption
price equal to their net asset value as next computed following



                               37





<PAGE>


the receipt of shares tendered for redemption in proper form.
Except for any contingent deferred sales charge which may be
applicable to Class A, Class B or Class C shares, there is no
redemption charge.  Payment of the redemption price will be made
within seven days after the Fund's receipt of such tender for
redemption.  If a shareholder is in doubt about what documents
are required by his or her fee-based program or employee benefit
plan, the shareholder should contact his or her financial
representative.

         The right of redemption may not be suspended or the date
of payment upon redemption postponed for more than seven days
after shares are tendered for redemption, except for any period
during which the Exchange is closed (other than customary weekend
and holiday closings) or during which the Commission determines
that trading thereon is restricted, or for any period during
which an emergency (as determined by the Commission) exists as a
result of which disposal by the Fund of securities owned by it is
not reasonably practicable or as a result of which it is not
reasonably practicable for the Fund fairly to determine the value
of its net assets, or for such other periods as the Commission
may by order permit for the protection of security holders of the
Fund.

         Payment of the redemption price will be made in cash.
The value of a shareholder's shares on redemption or repurchase
may be more or less than the cost of such shares to the
shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or
repurchase.  Redemption proceeds on Class A, Class B and Class C
shares will reflect the deduction of the contingent deferred
sales charge, if any.  Payment received by a shareholder upon
redemption or repurchase of his shares, assuming the shares
constitute capital assets in his hands, will result in long-term
or short-term capital gains (or loss) depending upon the
shareholder's holding period and basis in respect of the shares
redeemed.

         To redeem shares of the Fund for which no stock
certificates have been issued, the registered owner or owners
should forward a letter to the Fund containing a request for
redemption.  The signature or signatures on the letter must be
guaranteed by an "eligible guarantor institution" as defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended.

         To redeem shares of the Fund represented by stock
certificates, the investor should forward the appropriate stock



                               38





<PAGE>


certificate or certificates, endorsed in blank or with blank
stock powers attached, to the Fund with the request that the
shares represented thereby, or a specified portion thereof, be
redeemed.  The stock assignment form on the reverse side of each
stock certificate surrendered to the Fund for redemption must be
signed by the registered owner or owners exactly as the
registered name appears on the face of the certificate or,
alternatively, a stock power signed in the same manner may be
attached to the stock certificate or certificates or, where
tender is made by mail, separately mailed to the Fund.  The
signature or signatures on the assignment form must be guaranteed
in the manner described above.

         Telephone Redemption By Electronic Funds Transfer.  Each
Fund shareholder is entitled to request redemption by electronic
funds transfer of shares for which no stock certificates have
been issued by telephone at (800) 221-5672 by a shareholder who
has completed the appropriate portion of the Subscription
Application or, in the case of an existing shareholder, an
"Autosell" application obtained from Alliance Fund Services, Inc.
A telephone redemption request by electronic funds transfer may
not exceed $100,000 (except for certain omnibus accounts), and
must be made by 4:00 p.m. Eastern time on a Fund business day as
defined above.  Proceeds of telephone redemptions will be sent by
electronic funds transfer to a shareholder's designated bank
account at a bank selected by the shareholder that is a member of
the NACHA.

         Telephone Redemption By Check.  Each Fund shareholder is
eligible to request redemption by check of Fund shares for which
no stock certificates have been issued by telephone at
(800) 221-5672 before 4:00 p.m. Eastern time on a Fund business
day in an amount not exceeding $50,000.  Proceeds of such
redemptions are remitted by check to the shareholder's address of
record.  A shareholder otherwise eligible for telephone
redemption by check may cancel the privilege by written
instruction to Alliance Fund Services, Inc., or by checking the
appropriate box on the Subscription Application found in the
Prospectus.

         Telephone Redemptions - General.  During periods of
drastic economic or market developments, such as the market break
of October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break).  If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown



                               39





<PAGE>


on the cover of this Statement of Additional Information.  The
Fund reserves the right to suspend or terminate its telephone
redemption service at any time without notice.  Telephone
redemption is not available with respect to shares (i) for which
certificates have been issued, (ii) held in nominee or "street
name" accounts, (iii) held by a shareholder who has changed his
or her address of record within the preceding 30 calendar days or
(iv) held in any retirement plan account.  Neither the Fund nor
the Adviser, the Principal Underwriter or Alliance Fund Services,
Inc. will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be
genuine.  The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine,
including, among others, recording such telephone instructions
and causing written confirmations of the resulting transactions
to be sent to shareholders.  If the Fund did not employ such
procedures, it could be liable for losses arising from
unauthorized or fraudulent telephone instructions.  Selected
dealers or agents may charge a commission for handling telephone
requests for redemptions.

Repurchase

         The Fund may repurchase shares through the Principal
Underwriter, selected financial intermediaries or selected
dealers or agents.  The repurchase price will be the net asset
value next determined after the Principal Underwriter receives
the request (less the contingent deferred sales charge, if any,
with respect to the Class A, Class B and Class C shares), except
that requests placed through selected dealers or agents before
the close of regular trading on the Exchange on any day will be
executed at the net asset value determined as of such close of
regular trading on that day if received by the Principal
Underwriter prior to its close of business on that day (normally
5:00 p.m. Eastern time).  The financial intermediary or selected
dealer or agent is responsible for transmitting the request to
the Principal Underwriter by 5:00 p.m. Eastern time (certain
selected dealers, agents or financial representatives may enter
into operating agreements permitting them to transmit purchase
information to the Principal Underwriter after 5:00 p.m. Eastern
time and receive that day's net asset value).  If the financial
intermediary or selected dealer or agent fails to do so, the
shareholder's right to receive that day's closing price must be
settled between the shareholder and the dealer or agent.  A
shareholder may offer shares of the Fund to the Principal
Underwriter either directly or through a selected dealer or
agent.  Neither the Fund nor the Principal Underwriter charges a
fee or commission in connection with the repurchase of shares



                               40





<PAGE>


(except for the contingent deferred sales charge, if any, with
respect to Class A, Class B and Class C shares).  Normally, if
shares of the Fund are offered through a financial intermediary
or selected dealer or agent, the repurchase is settled by the
shareholder as an ordinary transaction with or through the
selected dealer or agent, who may charge the shareholder for this
service.  The repurchase of shares of the Fund as described above
is a voluntary service of the Fund and the Fund may suspend or
terminate this practice at any time.

General

         The Fund reserves the right to close out an account that
through redemption has remained below $200 for 90 days.
Shareholders will receive 60 days' written notice to increase the
account value before the account is closed.  No contingent
deferred sales charge will be deducted from the proceeds of this
redemption.  In the case of a redemption or repurchase of shares
of the Fund recently purchased by check, redemption proceeds will
not be made available until the Fund is reasonably assured that
the check has cleared, normally up to 15 calendar days following
the purchase date.

______________________________________________________________

                      SHAREHOLDER SERVICES
_______________________________________________________________

         The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares."  The shareholder services set forth below are applicable
to Class A, Class B and Class C shares unless otherwise
indicated.

Automatic Investment Program

         Investors may purchase shares of the Fund through an
automatic investment program utilizing electronic funds transfer
drawn on the investor's own bank account.  Under such a program,
pre-authorized monthly drafts for a fixed amount (at least
$50,000 for the initial purchase) are used to purchase shares
through the selected dealer or selected agent designated by the
investor at the public offering price next determined after the
Principal Underwriter receives the proceeds from the investor's
bank.  In electronic form, drafts can be made on or about a date
each month selected by the shareholder.  Investors wishing to
establish an automatic investment program in connection with
their initial investment should complete the appropriate portion



                               41





<PAGE>


of the Subscription Application found in the Prospectus.  Current
shareholders should contact Alliance Fund Services, Inc. at the
address or telephone numbers shown on the cover of this Statement
of Additional Information to establish an automatic investment
program.

Exchange Privilege

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

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

         Please read carefully the prospectus of the mutual fund
into which you are exchanging before submitting the request. Call
Alliance Fund Services, Inc. at (800) 221-5672 to exchange
uncertificated shares.  Exchanges of shares as described above in
this section are taxable transactions for federal income tax
purposes.  The exchange service may be changed, suspended, or
terminated on 60 days' written notice.

         All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
Prospectus for the Alliance Mutual Fund whose shares are being
acquired, as applicable.  An exchange is effected through the
redemption of the shares tendered for exchange and the purchase
of shares being acquired at their respective net asset values as
next determined following receipt by the Alliance Mutual Fund
whose shares are being exchanged of (i) proper instructions and
all necessary supporting documents as described in such fund's
Prospectus, or (ii) a telephone request for such exchange in
accordance with the procedures set forth in the following
paragraph.  Exchanges involving the redemption of shares recently



                               42





<PAGE>


purchased by check will be permitted only after the Alliance
Mutual Fund whose shares have been tendered for exchange is
reasonably assured that the check has cleared, normally up to 15
calendar days following the purchase date.  Exchanges of shares
or Alliance Mutual Funds will generally result in the realization
of a capital gain or loss for federal income tax purposes.

         Each Fund shareholder, and the shareholder's selected
dealer, agent or financial representative, as applicable, are
authorized to make telephone requests for exchanges unless
Alliance Fund Services, Inc., receives written instruction to the
contrary from the shareholder, or the shareholder declines the
privilege by checking the appropriate box on the Subscription
Application found in the Prospectus.  Such telephone requests
cannot be accepted with respect to shares then represented by
stock certificates.  Shares acquired pursuant to a telephone
request for exchange will be held under the same account
registration as the shares redeemed through such exchange.

         Eligible shareholders desiring to make an exchange
should telephone Alliance Fund Services, Inc. with their account
number and other details of the exchange, at (800) 221-5672
before 4:00 p.m., Eastern time, on a Fund business day as defined
above.  Telephone requests for exchange received before 4:00 p.m.
Eastern time on a Fund business day will be processed as of the
close of business on that day.  During periods of drastic
economic or market developments, such as the market break of
October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break).  If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information.

         A shareholder may elect to initiate a monthly "Auto
Exchange" whereby a specified dollar amount's worth of his or her
Fund shares (minimum $25) is automatically exchanged for shares
of another Alliance Mutual Fund.  Auto Exchange transactions
normally occur on the 12th day of each month, or the Fund
business day prior thereto.

         None of the Alliance Mutual Funds, the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
exchanges that the Fund reasonably believes to be genuine.  The
Fund will employ reasonable procedures in order to verify that
telephone requests for exchanges are genuine, including, among



                               43





<PAGE>


others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders.  If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions.  Selected dealers, agents or
financial representatives, as applicable, may charge a commission
for handling telephone requests for exchanges.

         The exchange privilege is available only in states where
shares of the Alliance Mutual Fund being acquired may be legally
sold.  Each Alliance Mutual Fund reserves the right, at any time
on 60 days' notice to its shareholders, to reject any order to
acquire its shares through exchange or otherwise to modify,
restrict or terminate the exchange privilege.

Retirement Plans

         The Fund may be a suitable investment vehicle for part
or all of the assets held in various types of retirement plans,
such as those listed below.  The Fund has available forms of such
plans pursuant to which investments can be made in the Fund and
other Alliance Mutual Funds.  Persons desiring information
concerning these plans should contact Alliance Fund Services,
Inc. at the "For Literature" telephone number on the cover of
this Statement of Additional Information, or write to:

              Alliance Fund Services, Inc.
              Retirement Plans
              P.O.  Box 1520
              Secaucus, New Jersey 07096-1520

         Individual Retirement Account ("IRA").  Individuals who
receive compensation, including earnings from self-employment,
are entitled to establish and make contributions to an IRA.
Taxation of the income and gains paid to an IRA by the Fund is
deferred until distribution from the IRA.  An individual's
eligible contribution to an IRA will be deductible if neither the
individual nor his or her spouse is an active participant in an
employer-sponsored retirement plan.  If the individual or his or
her spouse is an active participant in an employer-sponsored
retirement plan, the individual's contributions to an IRA may be
deductible, in whole or in part, depending on the amount of the
adjusted gross income of the individual and his or her spouse.

         Employer-Sponsored Qualified Retirement Plans.  Sole
proprietors, partnerships and corporations may sponsor qualified
money purchase pension and profit-sharing plans, including
Section 401(k) plans ("qualified plans"), under which annual tax-



                               44





<PAGE>


deductible contributions are made within prescribed limits based
on compensation paid to participating individuals.  The minimum
initial investment requirement may be waived with respect to
certain of these qualified plans.

         If the aggregate net asset value of shares of the
Alliance Mutual Funds held by a qualified plan reaches $1 million
on or before December 15 in any year, all Class B or Class C
shares of the Fund held by the plan can be exchanged at the
plan's request without any sales charge, for Class A shares of
the Fund.

         Simplified Employee Pension Plan ("SEP").  Sole
proprietors, partnerships and corporations may sponsor a SEP
under which they make annual tax-deductible contributions to an
IRA established by each eligible employee within prescribed
limits based on employee compensation.

         403(b)(7) Retirement Plan.  Certain tax-exempt
organizations and public educational institutions may sponsor
retirement plans under which an employee may agree that monies
deducted from his or her compensation (minimum $25 per pay
period) may be contributed by the employer to a custodial account
established for the employee under the plan.

         The Alliance Plans Division of Frontier Trust Company, a
subsidiary of Equitable, which serves as custodian or trustee
under the retirement plan prototype forms available from the
Fund, charges certain nominal fees for establishing an account
and for annual maintenance.  A portion of these fees is remitted
to Alliance Fund Services, Inc. as compensation for its services
to the retirement plan accounts maintained with the Fund.

         Distributions from retirement plans are subject to
certain Code requirements in addition to normal redemption
procedures.  For additional information please contact Alliance
Fund Services, Inc.

Dividend Direction Plan

         A shareholder who already maintains, in addition to his
or her Class A, Class B or Class C Fund account, a Class A,
Class B or Class C account with one or more other Alliance Mutual
Funds may direct that income dividends and/or capital gains paid
on the shareholder's Class A, Class B or Class C Fund shares be
automatically reinvested, in any amount, without the payment of
any sales or service charges, in shares of the same class of such
other Alliance Mutual Fund(s).  Further information can be



                               45





<PAGE>


obtained by contacting Alliance Fund Services, Inc. at the
address or the "For Literature" telephone number shown on the
cover of this Statement of Additional Information.  Investors
wishing to establish a dividend direction plan in connection with
their initial investment should complete the appropriate section
of the Subscription Application found in the Prospectus.  Current
shareholders should contact Alliance Fund Services, Inc. to
establish a dividend direction plan.

Systematic Withdrawal Plan

         General.  Any shareholder who owns or purchases shares
of the Fund having a current net asset value of at least $4,000
(for quarterly or less frequent payments), $5,000 (for bi-monthly
payments) or $10,000 (for monthly payments) may establish a
systematic withdrawal plan under which the shareholder will
periodically receive a payment in a stated amount of not less
than $50 on a selected date.  Systematic withdrawal plan
participants must elect to have their dividends and distributions
from the Fund automatically reinvested in additional shares of
the Fund.

         Shares of the Fund owned by a participant in the Fund's
systematic withdrawal plan will be redeemed as necessary to meet
withdrawal payments and such payments will be subject to any
taxes applicable to redemptions and, except as discussed below,
any applicable contingent deferred sales charge.  Shares acquired
with reinvested dividends and distributions will be liquidated
first to provide such withdrawal payments and thereafter other
shares will be liquidated to the extent necessary, and depending
upon the amount withdrawn, the investor's principal may be
depleted.  A systematic withdrawal plan may be terminated at any
time by the shareholder or the Fund.

         Withdrawal payments will not automatically end when a
shareholder's account reaches a certain minimum level.
Therefore, redemptions of shares under the plan may reduce or
even liquidate a shareholder's account and may subject the
shareholder to the Fund's involuntary redemption provisions.  See
"Redemption and Repurchase of Shares--General."  Purchases of
additional shares concurrently with withdrawals are undesirable
because of sales charges when purchases are made.  While an
occasional lump-sum investment may be made by a holder of Class A
shares who is maintaining a systematic withdrawal plan, such
investment should normally be an amount equivalent to three times
the annual withdrawal or $5,000, whichever is less.





                               46





<PAGE>


         Payments under a systematic withdrawal plan may be made
by check or electronically via the Automated Clearing House
("ACH") network.  Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in
shares of the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus, while current
Fund shareholders desiring to do so can obtain an application
form by contacting Alliance Fund Services, Inc. at the address or
the "For Literature" telephone number shown on the cover of this
Statement of Additional Information.

         CDSC Waiver for Class B Shares and Class C Shares.
Under a systematic withdrawal plan, up to 1% monthly, 2%
bi-monthly or 3% quarterly of the value at the time of redemption
of the Class B or Class C shares in a shareholder's account may
be redeemed free of any contingent deferred sales charge.

         With respect to Class B shares, the waiver applies only
with respect to shares acquired after July 1, 1995.  Class B
shares that are not subject to a contingent deferred sales charge
(such as shares acquired with reinvested dividends or
distributions) will be redeemed first and will count toward the
foregoing limitations.  Remaining Class B shares that are held
the longest will be redeemed next.  Redemptions of Class B shares
in excess of the foregoing limitations will be subject to any
otherwise applicable contingent deferred sales charge.

         With respect to Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing
limitations.  Redemptions in excess of those limitations will be
subject to any otherwise applicable contingent deferred sales
charge.

Statements and Reports

         Each shareholder of the Fund receives semi-annual and
annual reports which include a portfolio of investments,
financial statements and, in the case of the annual report, the
report of the Fund's independent accountants,
PricewaterhouseCoopers LLP, as well as a confirmation of each
purchase and redemption.  By contacting his or her broker or
Alliance Fund Services, Inc., a shareholder can arrange for
copies of his or her account statements to be sent to another
person.







                               47





<PAGE>


_______________________________________________________________

                         NET ASSET VALUE
_______________________________________________________________

         The per share net asset value is computed in accordance
with the Company's Articles of Incorporation and By-Laws at the
next close of regular trading on the Exchange (ordinarily
4:00 p.m. Eastern time) following receipt of a purchase or
redemption order by the Fund on each Fund business day on which
such an order is received and on such other days as the Board of
Directors deems appropriate or necessary in order to comply with
Rule 22c-1 under the 1940 Act.  The Fund's per share net asset
value is calculated by dividing the value of the Fund's total
assets, less its liabilities, by the total number of its shares
then outstanding.  A Fund business day is any weekday on which
the Exchange is open for trading.

         In accordance with applicable rules under the 1940 Act,
portfolio securities are valued at current market value or at
fair value as determined in good faith by the Board of Directors.
The Board of Directors has delegated to the Adviser certain of
the Board's duties with respect to the following procedures.
Readily marketable securities listed on the Exchange or on a
foreign securities exchange (other than foreign securities
exchanges whose operations are similar to those of the United
States over-the-counter market) are valued, except as indicted
below, at the last sale price reflected on the consolidated tape
at the close of the Exchange or, in the case of a foreign
securities exchange, at the last quoted sale price, in each case
on the business day as of which such value is being determined.
If there has been no sale on such day, the securities are valued
at the mean of the closing bid and asked prices on such day.  If
no bid or asked prices are quoted on such day, then the security
is valued in good faith at fair value by, or in accordance with
procedures established by, the Board of Directors.  Readily
marketable securities not listed on the Exchange or on a foreign
securities exchange but listed on other United States national
securities exchanges or traded on The Nasdaq Stock Market, Inc.
are valued in like manner.  Portfolio securities traded on the
Exchange and on one or more foreign or other national securities
exchanges, and portfolio securities not traded on the Exchange
but traded on one or more foreign or other national securities
exchanges are valued in accordance with these procedures by
reference to the principal exchange on which the securities are
traded.





                               48





<PAGE>


         Readily marketable securities traded in the over-the-
counter market, securities listed on a foreign securities
exchange whose operations are similar to those of the United
States over-the-counter market, and securities listed on a U.S.
national securities exchange whose primary market is believed to
be over-the-counter (but excluding securities traded on The
Nasdaq Stock Market, Inc.), are valued at the mean of the current
bid and asked prices as reported by Nasdaq or, in the case of
securities not quoted by Nasdaq, the National Quotation Bureau or
another comparable sources.

         Listed put or call options purchased by the Fund are
valued at the last sale price.  If there has been no sale on that
day, such securities will be valued at the closing bid prices on
that day.

         Open futures contracts and options thereon will be
valued using the closing settlement price or, in the absence of
such a price, the most recent quoted bid price, If there are no
quotations available for the day of valuations, the last
available closing settlement price will be used.

         U.S. Government securities and other debt instruments
having 60 days or less remaining until maturity are valued at
amortized cost if their original maturity was 60 days or less, or
by amortizing their fair value as of the 61st day prior to
maturity if their original term to maturity exceeded 60 days
(unless in either case the Board of Directors determines that
this method does not represent fair value).

         Fixed-income securities may be valued on the basis of
prices provided by a pricing service when such prices are
believed to reflect the fair market value of such securities. The
prices provided by pricing service take into account many
factors, including institutional size trading in similar groups
of securities and any developments related to specific
securities.

         All other assets of the Fund are valued in good faith at
fair value by, or in accordance with procedures established by,
the Board of Directors.

         Trading in securities on Far Eastern and European
securities exchanges and over-the-counter markets is normally
completed well before the close of business of each Fund business
day.  In addition, trading in foreign markets may not take place
on all Fund business days.  Furthermore, trading may take place
in various foreign markets on days that are not Fund business



                               49





<PAGE>


days.  The Fund's calculation of the net asset value per share,
therefore, does not always take place contemporaneously with the
most recent determination of the prices of portfolio securities
in these markets.  Events affecting the values of these portfolio
securities that occur between the time their prices are
determined in accordance with the above procedures and the close
of the Exchange will not be reflected in the Fund's calculation
of net asset value unless it is believed that these prices do not
reflect current market value, in which case the securities will
be valued in good faith by, or in accordance with procedures
established by, the Board of Directors at fair value.

         The Board of Directors may suspend the determination of
the Fund's net asset value (and the offering and sale of shares),
subject to the rules of the Commission and other governmental
rules and regulations, at a time when:  (1) the Exchange is
closed, other than customary weekend and holiday closings, (2) an
emergency exists as a result of which it is not reasonably
practicable for the Fund to dispose of securities owned by it or
to determine fairly the value of its net assets, or (3) for the
protection of shareholders, the Commission by order permits a
suspension of the right of redemption or a postponement of the
date of payment on redemption.

         For purposes of determining the Fund's net asset value
per share, all assets and liabilities initially expressed in a
foreign currency will be converted into U.S. dollars at the mean
of the current bid and asked prices of such currency against the
U.S. dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the
basis of a pricing service that takes into account the quotes
provided by a number of such major banks.  If such quotations are
not available as of the close of the Exchange, the rate of
exchange will be determined in good faith by, or under the
direction of, the Board of Directors.

         The assets attributable to the Class A shares, Class B
shares and Class C shares will be invested together in a single
portfolio.  The net asset value of each class will be determined
separately by subtracting the liabilities allocated to that class
from the assets belonging to that class in conformance with the
provisions of a plan adopted by the Fund in accordance with Rule
18f-3 under the 1940 Act.








                               50





<PAGE>


_______________________________________________________________

               DIVIDENDS, DISTRIBUTIONS AND TAXES
_______________________________________________________________

         The following summary only addresses principal United
States federal income tax considerations pertinent to the Fund
and to shareholders of the Fund who are United States citizens or
residents or United States corporations.  The effects of federal
income tax law on shareholders who are nonresident alien
individuals, foreign corporations or other foreign persons may be
substantially different.  The summary is based upon the advice of
counsel for the Fund and upon current law and interpretations
thereof.  No confirmation has been obtained from the relevant tax
authorities.  There is no assurance that the applicable laws and
interpretations will not change.

         In view of the individual nature of tax consequences,
each shareholder is advised to consult the shareholder's own tax
adviser with respect to the specific tax consequences of being a
shareholder of the Fund, including the effect and applicability
of federal, state, local, foreign and other tax laws and the
effects of changes therein.

United States Federal Income Taxation
of Dividends and Distributions

         General.  The Fund intends for each taxable year to
qualify to be taxed as a "regulated investment company" under the
Code.  To so qualify, the Fund must, among other things,
(i) derive at least 90% of its gross income in each taxable year
from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock,
securities or foreign currency, or certain other income
(including, but not limited to, gains from options, futures and
forward contracts) derived with respect to its business of
investing in stock, securities or currency; and (ii) diversify
its holdings so that, at the end of each quarter of its taxable
year, the following two conditions are met: (a) at least 50% of
the value of the Fund's assets is represented by cash, U.S.
Government securities, securities of other regulated investment
companies and other securities with respect to which the Fund's
investment is limited, in respect of any one issuer, to an amount
not greater than 5% of the Fund's assets and 10% of the
outstanding voting securities of such issuer, and (b) not more
than 25% of the value of the Fund's assets is invested in
securities of any one issuer (other than U.S. Government
securities or securities of other regulated investment companies)



                               51





<PAGE>


or of two or more issuers which the Fund controls and which are
determined to be engaged in the same or similar trades or
businesses or related trades or businesses.

         If the Fund qualifies as a regulated investment company
for any taxable year and makes timely distributions to its
shareholders of 90% or more of its investment company taxable
income for that year (calculated without regard to its net
capital gain, i.e., the excess of its net long-term capital gain
over its net short-term capital loss), it will not be subject to
federal income tax on the portion of its taxable income for the
year (including any net capital gain) that it distributes to
shareholders.

         The Fund will also avoid the 4% federal excise tax that
would otherwise apply to certain undistributed income for a given
calendar year if it makes timely distributions to the
shareholders equal to at least the sum of (i) 98% of its ordinary
income for that year; (ii) 98% of its capital gain net income and
foreign currency gains for the twelve-month period ending on
October 31 of that year; and (iii) any ordinary income or capital
gain net income from the preceding calendar year that was not
distributed during that year.  For this purpose, income or gain
retained by the Fund that is subject to corporate income tax will
be considered to have been distributed by the Fund by year-end.
For federal income and excise tax purposes, dividends declared
and payable to shareholders of record as of a date in October,
November or December of a given year but actually paid during the
immediately following January will be treated as if paid by the
Fund on December 31 of that calendar year, and will be taxable to
these shareholders for the year declared, and not for the year in
which the shareholders actually receive the dividend.

         The Fund intends to make timely distributions of the
Fund's taxable income (including any net capital gain) so that
the Fund will not be subject to federal income or excise taxes.
However, exchange control or other regulations on the
repatriation of investment income, capital or the proceeds of
securities sales, if any exist or are enacted in the future, may
limit the Fund's ability to make distributions sufficient in
amount to avoid being subject to one or both of such federal
taxes.

         Dividends and Distributions.  Dividends of the Fund's
net ordinary income and distributions of any net realized short-
term capital gain will be taxable to shareholders as ordinary
income.  In the case of corporate shareholders, such dividends
may be eligible for the dividends-received deduction, except that



                               52





<PAGE>


the amount eligible for the deduction is limited to the amount of
qualifying dividends received by the Fund.  A corporation's
dividends-received deduction will be disallowed unless the
corporation holds shares in the Fund at least 46 days during the
90-day period beginning 45 days before the date on which the
corporation becomes entitled to receive the dividend.  In
determining the holding period of such shares for this purpose,
any period during which the corporation's risk of loss is offset
by means of options, short sales or similar transactions is not
counted.  Furthermore, the dividends-received deduction will be
disallowed to the extent a corporation's investment in shares of
the Fund is financed with indebtedness.

         Distributions of net capital gain will be taxable to
shareholders as long-term capital gain, regardless of how long a
shareholder has held shares in the Fund.  Distributions of net
capital gain are not eligible for the dividends-received
deduction referred to above.

         Any dividend or distribution received by a shareholder
on shares of the Fund will have the effect of reducing the net
asset value of such shares by the amount of such dividend or
distribution.  Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder,
although in effect a return of capital to that particular
shareholder, would be taxable to him as described above.
Dividends are taxable in the manner discussed regardless of
whether they are paid to the shareholder in cash or are
reinvested in additional shares of the Fund.

         After the end of the taxable year, the Fund will notify
shareholders of the federal income tax status of any
distributions made by the Fund to shareholders during such year.
It is the present policy of the Fund to distribute to
shareholders all net investment income and to distribute realized
capital gains, if any, annually.  There is no fixed dividend rate
and there can be no assurance that the Fund will pay any
dividends.  The amount of any dividend or distribution paid on
shares of the Fund must necessarily depend upon the realization
of income and capital gains from the Fund's investments.

         Sales and Redemptions.  Any gain or loss arising from a
sale or redemption of Fund shares generally will be capital gain
or loss except in the case of dealers or certain financial
institutions.  Such gain or loss will be long-term capital gain
or loss if such shareholder has held such shares for more than
one year at the time of the sale or redemption; and otherwise
short-term capital gain or loss.  If a shareholder has held



                               53





<PAGE>


shares in the Fund for six months or less and during that period
has received a distribution of net capital gain, any loss
recognized by the shareholder on the sale of those shares during
the six-month period will be treated as a long-term capital loss
to the extent of the distribution.  In determining the holding
period of such shares for this purpose, any period during which a
shareholder's risk of loss is offset by means of options, short
sales or similar transactions is not counted.

         Any loss realized by a shareholder on a sale or exchange
of shares of the Fund will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30
days before and ending 30 days after the shares are sold or
exchanged.  For this purpose, acquisitions pursuant to the
Dividend Reinvestment Plan would constitute a replacement if made
within the period.  If disallowed, the loss will be reflected in
an upward adjustment to the basis of the shares acquired.

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

         Backup Withholding.  The Fund may be required to
withhold federal income tax at the rate of 31% of all taxable
distributions payable to shareholders who fail to provide the
Fund with their correct taxpayer identification numbers or to
make required certifications, or who have been notified by the
Internal Revenue Service that they are subject to backup
withholding.  Corporate shareholders and certain other
shareholders specified in the Code are exempt from such backup
withholding.  Backup withholding is not an additional tax; any
amounts so withheld may be credited against a shareholder's
federal income tax liability or refunded.

United States Federal Income Taxation of the Fund

         The following discussion relates to certain significant
United States federal income tax consequences to the Fund with
respect to the determination of its "investment company taxable
income" each year.  This discussion assumes that the Fund will be
taxed as a regulated investment company for each of its taxable
years.




                               54





<PAGE>


         Currency Fluctuations-"Section 988" Gains or Losses.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues
interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities
are treated as ordinary income or ordinary loss.  Similarly,
gains or losses from the disposition of foreign currencies, from
the disposition of debt securities denominated in a foreign
currency, or from the disposition of a forward contract
denominated in a foreign currency, which are attributable to
fluctuations in the value of the foreign currency between the
date of acquisition of the asset and the date of disposition also
are treated as ordinary income or loss.  These gains or losses,
referred to under the Code as "section 988" gains or losses,
increase or decrease the amount of the Fund's investment company
taxable income available to be distributed to its shareholders as
ordinary income, rather than increasing or decreasing the amount
of the Fund's net capital gain.  Because section 988 losses
reduce the amount of ordinary dividends the Fund will be allowed
to distribute for a taxable year, such section 988 losses may
result in all or a portion of prior dividend distributions for
such year being recharacterized as a non-taxable return of
capital to shareholders, rather than as an ordinary dividend,
reducing each shareholder's basis in his Fund shares.  If such
distributions exceed such shareholder's basis, such excess will
be treated as a gain from the sale of shares.

         Options, Futures and Forward Contracts.  Certain listed
options, regulated futures contracts, and forward foreign
currency contracts are considered "section 1256 contracts" for
federal income tax purposes.  Section 1256 contracts held by the
Fund at the end of each taxable year will be "marked to market"
and treated for federal income tax purposes as though sold for
fair market value on the last business day of such taxable year.
Gain or loss realized by the Fund on section 1256 contracts other
than forward foreign currency contracts will be considered 60%
long-term and 40% short-term capital gain or loss.  Gain or loss
realized by the Fund on forward foreign currency contracts
generally will be treated as section 988 gain or loss and will
therefore be characterized as ordinary income or loss and will
increase or decrease the amount of the Fund's net investment
income available to be distributed to shareholders as ordinary
income, as described above.  The Fund can elect to exempt its
section 1256 contracts which are part of a "mixed straddle" (as
described below) from the application of section 1256.





                               55





<PAGE>


         The Treasury Department has the authority to issue
regulations that would permit or require the Fund either to
integrate a foreign currency hedging transaction with the
investment that is hedged and treat the two as a single
transaction, or otherwise to treat the hedging transaction in a
manner that is consistent with the hedged investment.  The
regulations issued under this authority generally should not
apply to the type of hedging transactions in which the Fund
intends to engage.

          With respect to equity options or options traded over-
the-counter or on certain foreign exchanges, gain or loss
realized by the Fund upon the lapse or sale of such options held
by the Fund will be either long-term or short-term capital gain
or loss depending upon the Fund's holding period with respect to
such option.  However, gain or loss realized upon the lapse or
closing out of such options that are written by the Fund will be
treated as short-term capital gain or loss.  In general, if the
Fund exercises an option, or an option that the Fund has written
is exercised, gain or loss on the option will not be separately
recognized but the premium received or paid will be included in
the calculation of gain or loss upon disposition of the property
underlying the option.

         Gain or loss realized by the Fund on the lapse or sale
of put and call options on foreign currencies which are traded
over-the-counter or on certain foreign exchanges will be treated
as section 988 gain or loss and will therefore be characterized
as ordinary income or loss and will increase or decrease the
amount of the Fund's net investment income available to be
distributed to shareholders as ordinary income, as described
above.  The amount of such gain or loss shall be determined by
subtracting the amount paid, if any, for or with respect to the
option (including any amount paid by the Fund upon termination of
an option written by the Fund) from the amount received, if any,
for or with respect to the option (including any amount received
by the Fund upon termination of an option held by the Fund).  In
general, if the Fund exercises such an option on a foreign
currency, or such an option that the Fund has written is
exercised, gain or loss on the option will be recognized in the
same manner as if the Fund had sold the option (or paid another
person to assume the Fund's obligation to make delivery under the
option) on the date on which the option is exercised, for the
fair market value of the option.  The foregoing rules will also
apply to other put and call options which have as their
underlying property foreign currency and which are traded over-
the-counter or on certain foreign exchanges to the extent gain or




                               56





<PAGE>


loss with respect to such options is attributable to fluctuations
in foreign currency exchange rates.

         Tax Straddles.  Any option, futures contract, forward
foreign currency contract, currency swap, or other position
entered into or held by the Fund in conjunction with any other
position held by the Fund may constitute a "straddle" for federal
income tax purposes.  A straddle of which at least one, but not
all, the positions are section 1256 contracts may constitute a
"mixed straddle".  In general, straddles are subject to certain
rules that may affect the character and timing of the Fund's
gains and losses with respect to straddle positions by requiring,
among other things, that (i) loss realized on disposition of one
position of a straddle not be recognized to the extent that the
Fund has unrealized gains with respect to the other position in
such straddle; (ii) the Fund's holding period in straddle
positions be suspended while the straddle exists (possibly
resulting in gain being treated as short-term capital gain rather
than long-term capital gain); (iii) losses recognized with
respect to certain straddle positions which are part of a mixed
straddle and which are non-section 1256 positions be treated as
60% long-term and 40% short-term capital loss; (iv) losses
recognized with respect to certain straddle positions which would
otherwise constitute short-term capital losses be treated as
long-term capital losses; and (v) the deduction of interest and
carrying charges attributable to certain straddle positions may
be deferred.  The Treasury Department is authorized to issue
regulations providing for the proper treatment of a mixed
straddle where at least one position is ordinary and at least one
position is capital.  No such regulations have yet been issued.
Various elections are available to the Fund which may mitigate
the effects of the straddle rules, particularly with respect to
mixed straddles.  In general, the straddle rules described above
do not apply to any straddles held by the Fund all of the
offsetting positions of which consist of section 1256 contracts.

Other Taxation

         Income received by the Fund may also be subject to
foreign income taxes, including withholding taxes.  It is not
possible to determine the effective rate of foreign tax in
advance since the amount of the Fund's assets to be invested
within various countries is not known.  The Fund may also be
subject to state and local taxes.  Also, distributions by the
Fund may be subject to additional state, local and foreign taxes
depending on each shareholder's particular circumstances.





                               57





<PAGE>


_______________________________________________________________

                     PORTFOLIO TRANSACTIONS
_______________________________________________________________

         The management of the Fund has the responsibility for
allocating its brokerage orders and may direct orders to any
broker.  It is the Fund's general policy to seek favorable net
prices and prompt reliable execution in connection with the
purchase or sale of all portfolio securities.  In the purchase
and sale of over-the-counter securities, it is the Fund's policy
to use the primary market makers except when a better price can
be obtained by using a broker.  The Board of Directors has
approved, as in the best interests of the Fund and the
shareholders, a policy of considering, among other factors, sales
of the Fund's shares as a factor in the selection of broker-
dealers to execute portfolio transactions, subject to best
execution.  The Adviser is authorized under the Advisory
Agreement to place brokerage business with such brokers and
dealers.  The use of brokers who supply supplemental research and
analysis and other services may result in the payment of higher
commissions than those available from other brokers and dealers
who provide only the execution of portfolio transactions.  In
addition, the supplemental research and analysis and other
services that may be obtained from brokers and dealers through
which brokerage transactions are effected may be useful to the
Adviser in connection with advisory clients other than the Fund.

         Investment decisions for the Fund are made independently
from those for other investment companies and other advisory
accounts managed by the Adviser.  It may happen, on occasion,
that the same security is held in the portfolio of the Fund and
one or more of such other companies or accounts.  Simultaneous
transactions are likely when several funds or accounts are
managed by the same adviser, particularly when a security is
suitable for the investment objectives of more than one of such
companies or accounts.  When two or more companies or accounts
managed by the Adviser are simultaneously engaged in the purchase
or sale of the same security, the transactions are allocated to
the respective companies or accounts both as to amount and price,
in accordance with a method deemed equitable to each company or
account.  In some cases this system may adversely affect the
price paid or received by the Fund or the size of the position
obtainable for the Fund.

         Allocations are made by the officers of the Fund or of
the Adviser.  Purchases and sales of portfolio securities are




                               58





<PAGE>


determined by the Adviser and are placed with broker-dealers by
the order department of the Adviser.

         The extent to which commissions that will be charged by
broker-dealers selected by the Fund may reflect an element of
value for research cannot presently be determined.  To the extent
that research services of value are provided by broker-dealers
with or through whom the Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise
bear.  Research services furnished by broker-dealers could be
useful and of value to the Adviser in servicing its other clients
as well as the Fund; but, on the other hand, certain research
services obtained by the Adviser as a result of the placement of
portfolio brokerage of other clients could be useful and of value
to it in serving the Fund.  Consistent with the Conduct Rules of
the National Association of Securities Dealers, Inc., and subject
to seeking best execution, the Fund may consider sales of shares
of the Fund or other investment companies managed by the Adviser
as a factor in the selection of brokers to execute portfolio
transactions for the Fund.

         The Fund may from time to time place orders for the
purchase or sale of securities (including listed call options)
with Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
an affiliate of the Adviser, and with brokers which may have
their transactions cleared or settled, or both, by the Pershing
Division of DLJ, for which DLJ may receive a portion of the
brokerage commissions.  In such instances, the placement of
orders with such brokers would be consistent with the Fund's
objective of obtaining best execution and would not be dependent
upon the fact that DLJ is an affiliate of the Adviser.

         Some of the Fund's portfolio transactions in equity
securities may occur on foreign stock exchanges.  Transactions on
stock exchanges involve the payment of brokerage commissions. On
many foreign stock exchanges these commissions are fixed.
Securities traded in foreign over-the-counter markets (including
most fixed-income securities) are purchased from and sold to
dealers acting as principal.  Over-the-counter transactions
generally do not involve the payment of a stated commission, but
the price usually includes an undisclosed commission or markup.
The prices of underwritten offerings, however, generally include
a stated underwriter's discount.  The Adviser expects to effect
the bulk of its transactions in securities of companies based in
foreign countries through brokers, dealers or underwriters
located in such countries.  U.S. Government or other U.S.
securities constituting permissible investments will be purchased
and sold through U.S. brokers, dealers or underwriters.



                               59





<PAGE>



_______________________________________________________________

                       GENERAL INFORMATION
_______________________________________________________________

Capitalization

         The Company is a Maryland corporation organized in 1998.
The authorized capital stock of the Fund currently consists of
3,000,000,000 shares of Class A Common Stock of the Fund,
3,000,000,000 shares of Class B Common Stock of the Fund and
3,000,000,000 shares of Class C Common Stock of the Fund, each
having a par value of $.001 per share.  All shares of the Fund,
when issued, are fully paid and non- assessable.  A separate
portfolio of the Company, the Premier Portfolio, is represented
by 9,000,000,000 shares of Common Stock.

         The Directors are authorized to reclassify any unissued
shares to any number of additional series and classes without
shareholder approval.  Any issuance of shares of another class or
series would be governed by the 1940 Act and the law of the State
of Maryland.

         A shareholder in the Fund will be entitled to share pro
rata with other holders of the same class of shares in all
dividends and distributions arising from the Fund's assets and,
upon redeeming shares, will receive the then current net asset
value of the Fund represented by the redeemed shares less any
applicable CDSC.  The Company is empowered to establish, without
shareholder approval, additional portfolios, which may have
different investment objectives and policies than those of the
Fund, and additional classes of shares within the Fund.  If an
additional portfolio or class were established by the Company,
each share of the portfolio or class would normally be entitled
to one vote for all purposes.  Generally, shares of each
portfolio and class would vote as a single series or class on
matters, such as the election of Directors, that affect each
portfolio or class in substantially the same manner.  As to
matters affecting each portfolio differently, such as approval of
the Investment Advisory Contract and changes in investment
policy, shares of each portfolio would vote as a separate series.
Class A, Class B and Class C shares of the Fund have identical
voting, dividend, liquidation and other rights, except that each
class bears its own transfer agency expenses, each of Class A,
Class B and Class C shares bears its own distribution expenses,
and Class B shares convert to Class A shares after eight years.
Each class of shares of the Fund votes separately with respect to



                               60





<PAGE>


the Fund's Rule 12b-1 distribution plan and other matters for
which separate class voting is appropriate under applicable law.
Shares are freely transferable, are entitled to dividends and
distributions as determined by the Directors and, in liquidation
of the Fund, are entitled to receive the net assets of the Fund.
Certain additional matters relating to the Company's organization
are discussed in this Statement of Additional Information.

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

         Procedures for calling a shareholders' meeting for the
removal of Directors of the Company, similar to those set forth
in Section 16(c) of the 1940 Act will be available to
shareholders of the Fund.  The rights of the holders of shares of
a series may not be modified except by the vote of a majority of
the outstanding shares of such series.

Custodian

         The Bank of New York, One Wall Street, New York, NY will
act as the Company's custodian for the assets of the Fund but
plays no part in deciding the purchase or sale of portfolio
securities.  Subject to the supervision of the Company's
Directors, The Bank of New York may enter into sub-custodial
agreements for the holding of the Fund's foreign securities.

Principal Underwriter

         Alliance Fund Distributors, Inc., a wholly-owned
subsidiary of the Adviser, located at 1345 Avenue of the
Americas, New York, New York 10105, is the Principal Underwriter
of shares of the Fund, and as such may solicit orders from the
public to purchase shares of the Fund.  Under the Agreement, the
Fund has agreed to indemnify the Principal Underwriter, in the
absence of its willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations thereunder, against
certain civil liabilities, including liabilities under the
Securities Act.

Counsel

         Legal matters in connection with the issuance of the
common stock offered hereby are passed upon by Seward & Kissel
LLP, New York, New York.




                               61





<PAGE>


Independent Accountants

         PricewaterhouseCoopers LLP, New York, New York, have
been appointed as independent accountants for the Fund.

Performance Information

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

         Total return information is useful in reviewing the
Fund's performance but such information may not provide a basis
for comparison with bank deposits or other investments which pay
a fixed yield for a stated period of time.  An investor's
principal invested in the Fund is not fixed and will fluctuate in
response to prevailing market conditions.

         The Fund's total return is computed separately for each
class of shares.  Total return is not fixed and will fluctuate in
response to prevailing market conditions or as a function of the
type, and quality of the securities in the Fund's portfolio, the
Fund's average portfolio maturity and its expenses.  Quotations
of total return do not include any provision for the effect of
individual income taxes.  An investor's principal invested in the
Fund is not fixed and will fluctuate in response to prevailing
market conditions.  The Fund may advertise the fluctuation of its
net asset value over certain time periods and compare its
performance to that available from other investments, including
money market funds and certificates of deposit, the later of
which, unlike the Fund, are insured and have fixed rates of
return.

         Advertisements quoting performance rankings or ratings
of the Fund as measured by financial publications or by
independent organizations such as Lipper, Inc., and Morningstar,
Inc. (or comparisons between the Fund's performance and those of
various indices) and advertisements presenting the historical



                               62





<PAGE>


record of payments of income dividends by the Fund may also from
time to time be sent to investors or placed in newspapers,
magazines such as Barrons, Business Week, Changing Times, Forbes,
Investor's Daily, Money Magazine, The New York Times and The Wall
Street Journal or other media on behalf of the Fund.

Additional Information

         Any shareholder inquiries may be directed to the
shareholder's broker or to Alliance Fund Services, Inc. at the
address or telephone numbers shown on the front cover of this
Statement of Additional Information.  This Statement of
Additional Information does not contain all the information set
forth in the Registration Statement filed by the Fund with the
Commission under the Securities Act.  Copies of the Registration
Statement may be obtained at a reasonable charge from the
Commission or may be examined, without charge, at the offices of
the Commission in Washington, D.C.

































                               63





<PAGE>


____________________________________________________________

                           APPENDIX A:

                  CERTAIN INVESTMENT PRACTICES
____________________________________________________________

         The information in this Appendix concerns investment
practices in which the Fund is authorized to engage, but in which
the Fund is not required to engage and which may not currently be
permitted under applicable laws or regulations or may otherwise
be unavailable in certain countries.  The Fund's investment
policies and restrictions authorize it to engage in these
practices to the extent such practices become available and
permissible in the future.

Options

         The Fund may write covered put and call options and
purchase put and call options on securities of the types in which
it is permitted to invest that are traded on U.S. and foreign
securities exchanges and over-the-counter, including options on
market indices.  There are no specific limitations on the Fund's
writing and purchasing of options.

         In certain circumstances, the Fund may purchase put
options to hedge against a decline in the value of its portfolio.
By using put options in this way, the Fund will reduce any profit
it might otherwise have realized in the underlying security by
the amount of the premium paid for the put option and by
transaction costs.  In certain circumstances, the Fund may also
purchase call options to hedge against an increase in the price
of securities that the Fund anticipates purchasing in the future.
The premium paid for the call option plus any transaction costs
will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to
the Fund.

         A put option gives the purchaser of such option, upon
payment of a premium, the right to deliver a specified amount of
a security to the writer of the option on or before a fixed date
at a predetermined price.  A call option gives the purchaser of
the option, upon payment of a premium, the right to call upon the
writer to deliver a specified amount of a security on or before a
fixed date at a predetermined price.  A call option written by
the Fund is "covered" if the Fund owns the underlying security
covered by the call or has an absolute and immediate right to



                               A-1





<PAGE>


acquire that security without additional cash consideration (or
for additional cash consideration held in a segregated account by
its custodian) upon conversion or exchange of other securities
held in its portfolio.  A call option is also covered if the Fund
holds a call on the same security and in the same principal
amount as the call written where the exercise price of the call
held (i) is equal to or less than the exercise price of the call
written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in liquid
assets in a segregated account with its custodian.  A put option
written by the Fund is "covered" if the Fund maintains liquid
assets with a value equal to the exercise price in a segregated
account with its custodian, or else holds a put on the same
security and in the same principal amount as the put written
where the exercise price of the put held is equal to or greater
than the exercise price of the put written.  The premium paid by
the purchaser of an option will reflect, among other things, the
relationship of the exercise price to the market price and
volatility of the underlying security, the remaining term of the
option, supply and demand and interest rates.

         A call option is for cross-hedging purposes if the Fund
does not own the underlying security but seeks to provide a hedge
against a decline in value in another security which the Fund
owns or has the right to acquire.  In such circumstances, the
Fund collateralizes its obligation under the option by
maintaining in a segregated account with the Fund's custodian
liquid assets in an amount not less than the market value of the
underlying security, marked to market daily.  The Fund would
write a call option for cross-hedging purposes, instead of
writing a covered call option, when the premium to be received
from the cross-hedge transaction would exceed that which would be
received from writing a covered call option, while at the same
time achieving the desired hedge.

         In purchasing a call option, the Fund would be in a
position to realize a gain if, during the option period, the
price of the underlying security increased by an amount in excess
of the premium paid.  It would realize a loss if the price of the
underlying security declined or remained the same or did not
increase during the period by more than the amount of the
premium.  In purchasing a put option, the Fund would be in a
position to realize a gain if, during the option period, the
price of the underlying security declined by an amount in excess
of the premium paid.  It would realize a loss if the price of the
underlying security increased or remained the same or did not
decrease during that period by more than the amount of the
premium.  If a put or call option purchased by the Fund were



                               A-2





<PAGE>


permitted to expire without being sold or exercised, its premium
would be lost by the Fund.

         If a put option written by the Fund were exercised, the
Fund would be obligated to purchase the underlying security at
the exercise price.  If a call option written by the Fund were
exercised, the Fund would be obligated to sell the underlying
security at the exercise price.  The risk involved in writing a
put option is that there could be a decrease in the market value
of the underlying security caused by rising interest rates or
other factors.  If this occurred, the option could be exercised
and the underlying security would then be sold by the option
holder to the Fund at a higher price than its current market
value.  The risk involved in writing a call option is that there
could be an increase in the market value of the underlying
security caused by declining interest rates or other factors.  If
this occurred, the option could be exercised and the underlying
security would then be sold by the Fund at a lower price than its
current market value.  These risks could be reduced by entering
into a closing transaction prior to the option expiration dates
if a liquid market is available.  The Fund retains the premium
received from writing a put or call option whether or not the
option is exercised.

         The Fund may purchase or write options on securities of
the types in which it is permitted to invest in privately
negotiated (i.e., over-the-counter) transactions.  The Fund will
effect such transactions only with investment dealers and other
financial institutions (such as commercial banks or savings and
loan institutions) deemed creditworthy by the Adviser, and the
Adviser has adopted procedures for monitoring the
creditworthiness of such entities.  Options purchased or written
by the Fund in negotiated transactions are illiquid and it may
not be possible for the Fund to effect a closing transaction at a
time when the Adviser believes it would be advantageous to do so.

         An option on a securities index is similar to an option
on a security except that, rather than the right to take or make
delivery of a security at a specified price, an option on a
securities index gives the holder the right to receive, upon
exercises of the option, an amount of cash if the closing level
of the chosen index is greater than (in the case of a call) or
less than (in the case of a put) the exercise price of the
option.  There are no specific limitations on the Fund's
purchasing and selling of options on securities indices.

         The writer of an option may have no control over when
the underlying securities must be sold, in the case of a call



                               A-3





<PAGE>


option, or purchased, in the case of a put option, since with
regard to certain options, the writer may be assigned an exercise
notice at any time prior to the termination of the obligation.
Whether or not an option expires unexercised, the writer retains
the amount of the premium.  This amount, of course, may, in the
case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period.
If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security.  If a put option
is exercised, the writer must fulfill the obligation to purchase
the underlying security at the exercise price, which will usually
exceed the then market value of the underlying security.

         The writer of a listed option that wishes to terminate
its obligation may effect a "closing purchase transaction." This
is accomplished by buying an option of the same series as the
option previously written.  The effect of the purchase is that
the writer's position will be cancelled by the clearing
corporation.  However, a writer may not effect a closing purchase
transaction after being notified of the exercise of an option.
Likewise, an investor who is the holder of a listed option may
liquidate its position by effecting a "closing sale transaction."
This is accomplished by selling an option of the same series as
the option previously purchased.  There can be no guarantee that
either a closing purchase or a closing sale transaction can be
effected in any particular situation.

         Effecting a closing transaction in the case of a written
call option will permit the Fund to write another call option on
the underlying security with either a different exercise price or
expiration date or both, or in the case of a written put option
will permit the Fund to write another put option to the extent
that the exercise price thereof is secured by deposited cash or
short-term securities.  Also, effecting a closing transaction
will permit the cash or proceeds from the concurrent sale of any
securities subject to the option to be used for other Fund
investments.  If the Fund desires to sell a particular security
from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale
of the security.

         The Fund will realize a profit from a closing
transaction if the price of the transaction is less than the
premium received from writing the option or is more than the
premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is
more than the premium received from writing the option or is less
than the premium paid to purchase the option.  Because increases



                               A-4





<PAGE>


in the market price of a call option will generally reflect
increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option is likely to
be offset in whole or in part by appreciation of the underlying
security owned by the Fund.

         An option position may be closed out only where there
exists a secondary market for an option of the same series.  If a
secondary market does not exist, it might not be possible to
effect closing transactions in particular options with the result
that the Fund would have to exercise the options in order to
realize any profit.  If the Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able
to sell the underlying security until the option expires or it
delivers the underlying security upon exercise.  Reasons for the
absence of a liquid secondary market include the following:
(i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national
securities exchange ("Securities Exchange") on opening
transactions or closing transactions or both, (iii) trading
halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying
securities, (iv) unusual or unforeseen circumstances may
interrupt normal operations on a Securities Exchange, (v) the
facilities of a Securities Exchange or the Options Clearing
Corporation may not at all times be adequate to handle current
trading volume, or (vi) one or more Securities Exchanges could,
for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a
particular class or series of options), in which event the
secondary market on that Securities Exchange (or in that class or
series of options) would cease to exist, although outstanding
options on that Securities Exchange that had been issued by the
Options Clearing Corporation as a result of trades on that
Securities Exchange would continue to be exercisable in
accordance with their terms.

         The Fund may write options in connection with buy-and-
write transactions; that is, the Fund may purchase a security and
then write a call option against that security.  The exercise
price of the call the Fund determines to write will depend upon
the expected price movement of the underlying security.  The
exercise price of a call option may be below ("in-the-money"),
equal to ("at-the-money") or above ("out-of-the- money") the
current value of the underlying security at the time the option
is written.  Buy-and-write transactions using in-the-money call
options may be used when it is expected that the price of the
underlying security will remain flat or decline moderately during



                               A-5





<PAGE>


the option period.  Buy-and-write transactions using at-the-money
call options may be used when it is expected that the price of
the underlying security will remain fixed or advance moderately
during the option period.  Buy-and-write transactions using out-
of-the-money call options may be used when it is expected that
the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to
the exercise price will be greater than the appreciation in the
price of the underlying security alone.  If the call options are
exercised in such transactions, the Fund's maximum gain will be
the premium received by it for writing the option, adjusted
upwards or downwards by the difference between the Fund's
purchase price of the security and the exercise price.  If the
options are not exercised and the price of the underlying
security declines, the amount of such decline will be offset in
part, or entirely, by the premium received.

         The writing of covered put options is similar in terms
of risk/return characteristics to buy-and-write transactions.  If
the market price of the underlying security rises or otherwise is
above the exercise price, the put option will expire worthless
and the Fund's gain will be limited to the premium received.  If
the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the
position or take delivery of the security at the exercise price
and the Fund's return will be the premium received from the put
option minus the amount by which the market price of the security
is below the exercise price.  Out-of-the-money, at-the-money, and
in-the-money put options may be used by the Fund in the same
market environments that call options are used in equivalent buy-
and-write transactions.

Futures Contracts and Options on Futures Contracts

         The Fund may enter into contracts for the purchase or
sale for future delivery of contracts based on financial indices,
including any index of U.S. Government Securities, securities
issued by foreign government entities, or common stocks ("futures
contracts") and may purchase and write put and call options to
buy or sell futures contracts ("options on futures contracts").
A "sale" of a futures contract means the acquisition of a
contractual obligation to deliver the securities or foreign
currencies called for by the contract at a specified price on a
specified date.  A "purchase" of a futures contract means the
incurring of a contractual obligation to acquire the securities
or foreign currencies called for by the contract at a specified
price on a specified date.  The purchaser of a futures contract
on an index agrees to take or make delivery of an amount of cash



                               A-6





<PAGE>


equal to the difference between a specified dollar multiple of
the value of the index on the expiration date of the contract
("current contract value") and the price at which the contract
was originally struck.  No physical delivery of the securities
underlying the index is made.

         Options on futures contracts written or purchased by the
Fund will be traded on U.S. or foreign exchanges or over-the-
counter.  These investment techniques will be used only to hedge
against anticipated future changes in market conditions and
interest or exchange rates which otherwise might either adversely
affect the value of the Fund's portfolio securities or adversely
affect the prices of securities which the Fund intends to
purchase at a later date.  The Fund will not enter into any
futures contracts or options on futures contracts if immediately
thereafter the aggregate of the market value of the outstanding
futures contracts of the Fund and the market value of the
currencies and futures contracts subject to outstanding options
written by the Fund would exceed 100% of the market value of the
total assets of the Fund.

         The purchase of a call option on a futures contract is
similar in some respects to the purchase of a call option on an
individual security.  Depending on the pricing of the option
compared to either the price of the futures contract upon which
it is based or the price of the underlying debt securities, it
may or may not be less risky than ownership of the futures
contract or underlying debt securities.  As with the purchase of
futures contracts, when the Fund is not fully invested it may
purchase a call option on a futures contract to hedge against
adverse market conditions.

         The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
security or foreign currency which is deliverable upon exercise
of the futures contract or securities comprising an index.  If
the futures price at expiration of the option is below the
exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any decline
that may have occurred in the Fund's portfolio holdings.  The
writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or
foreign currency which is deliverable upon exercise of the
futures contract or securities comprising an index.  If the
futures price at expiration of the option is higher than the
exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any
increase in the price of securities which the Fund intends to



                               A-7





<PAGE>


purchase.  If a put or call option the Fund has written is
exercised, the Fund will incur a loss which will be reduced by
the amount of the premium it receives.  Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, the
Fund's losses from existing options on futures may to some extent
be reduced or increased by changes in the value of portfolio
securities.

         The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities.  For example, the Fund may
purchase a put option on a futures contract to hedge the Fund's
portfolio against the risk of rising interest rates.

         The amount of risk the Fund assumes when it purchases an
option on a futures contract is the premium paid for the option
plus related transaction costs.  In addition to the correlation
risks discussed above, the purchase of an option also entails the
risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased.

         U.S. futures contracts have been designed by exchanges
which have been designated "contracts markets" by the Commodity
Futures Trading Commission ("CFTC"), and must be executed through
a futures commission merchant, or brokerage firm, which is a
member of the relevant contract market.  Futures contracts trade
on a number of exchange markets, and, through their clearing
corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange.  The
Fund is not a commodity pool and all transactions in futures
contracts and options on futures contracts engaged in by the Fund
must constitute bona fide hedging or other permissible
transactions in accordance with the rules and regulations
promulgated by the CFTC.

         At the same time a futures contract is purchased or
sold, the Fund must allocate cash or securities as a deposit
payment ("initial deposit").  It is expected that the initial
deposit would be approximately 1-1/2% to 5% of a contract's face
value.  Daily thereafter, the futures contract is valued and the
payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or
increase in the contract's value.

         At the time of delivery of securities pursuant to such a
contract, adjustments are made to recognize differences in value
arising from the delivery of securities with a different price or



                               A-8





<PAGE>


interest rate from that specified in the contract.  In some (but
not many) cases, securities called for by a futures contract may
not have been issued when the contract was written.

         Although futures contracts by their terms call for the
actual delivery or acquisition of securities, in most cases the
contractual obligation is fulfilled before the date of the
contract without having to make or take delivery of the
securities.  The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for
delivery in the same month.  Such a transaction, which is
effected through a member of an exchange, cancels the obligation
to make or take delivery of the securities.  Since all
transactions in the futures market are made, offset or fulfilled
through a clearinghouse associated with the exchange on which the
contracts are traded, the Fund will incur brokerage fees when it
purchases or sells futures contracts.

         The Fund's Custodian will place liquid assets in a
separate account of the Fund having a value equal to the
aggregate amount of the Fund's commitments under futures
contracts.

Stock Index Futures

         The Fund may purchase and sell stock index futures as a
hedge against movements in the equity markets.  There are several
risks in connection with the use of stock index futures by the
Fund as a hedging device.  One risk arises because of the
imperfect correlation between movements in the price of the stock
index futures and movements in the price of the securities which
are the subject of the hedge.  The price of the stock index
futures may move more than or less than the price of the
securities being hedged.  If the price of the stock index futures
moves less than the price of the securities which are the subject
of the hedge, the hedge will not be fully effective but, if the
price of the securities being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had
not hedged at all.  If the price of the securities being hedged
has moved in a favorable direction, this advantage will be
partially offset by the loss on the index future.  If the price
of the future moves more than the price of the stock, the Fund
will experience either a loss or gain on the future which will
not be completely offset by movements in the price of the
securities which are subject to the hedge.  To compensate for the
imperfect correlation of movements in the price of securities
being hedged and movements in the price of the stock index



                               A-9





<PAGE>


futures, the Fund may buy or sell stock index futures contracts
in a greater dollar amount than the dollar amount of securities
being hedged if the volatility over a particular time period of
the prices of such securities has been greater than the
volatility over such time period of the index, or if otherwise
deemed to be appropriate by the Adviser.  Conversely, the Fund
may buy or sell fewer stock index futures contracts if the
volatility over a particular time period of the prices of the
securities being hedged is less than the volatility over such
time period of the stock index, or it is otherwise deemed to be
appropriate by the Adviser.  It is also possible that, where the
Fund has sold futures to hedge its portfolio against a decline in
the market, the market may advance and the value of securities
held in the Fund may decline.  If this occurred, the Fund would
lose money on the futures and also experience a decline in value
in its portfolio securities.  However, over time the value of a
diversified portfolio should tend to move in the same direction
as the market indices upon which the futures are based, although
there may be deviations arising from differences between the
composition of the Fund and the stocks comprising the index.

         Where futures are purchased to hedge against a possible
increase in the price of stock before the Fund is able to invest
its cash (or cash equivalents) in stocks (or options) in an
orderly fashion, it is possible that the market may decline
instead.  If the Fund then concludes not to invest in stock or
options at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss
on the futures contract that is not offset by a reduction in the
price of securities purchased.

         In addition to the possibility that there may be an
imperfect correlation, or no correlation at all, between
movements in the stock index futures and the portion of the
portfolio being hedged, the price of stock index futures may not
correlate perfectly with movement in the stock index due to
certain market distortions.  Rather than meeting additional
margin deposit requirements, investors may close futures
contracts through offsetting transactions which could distort the
normal relationship between the index and futures markets.
Secondly, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin
requirements in the securities market.  Therefore, increased
participation by speculators in the futures market may also cause
temporary price distortions.  Due to the possibility of price
distortion in the futures market, and because of the imperfect
correlation between the movements in the stock index and
movements in the price of stock index futures, a correct forecast



                              A-10





<PAGE>


of general market trends by the investment adviser may still not
result in a successful hedging transaction over a short time
frame.

         Positions in stock index futures may be closed out only
on an exchange or board of trade which provides a secondary
market for such futures.  Although the Fund intends to purchase
or sell futures only on exchanges or boards of trade where there
appear to be active secondary markets, there is no assurance that
a liquid secondary market on any exchange or board of trade will
exist for any particular contract or at any particular time.  In
such event, it may not be possible to close a futures investment
position, and in the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of
variation margin.  However, in the event futures contracts have
been used to hedge portfolio securities, such securities will not
be sold until the futures contract can be terminated.  In such
circumstances, an increase in the price of the securities, if
any, may partially or completely offset losses on the futures
contract.  However, as described above, there is no guarantee
that the price of the securities will in fact correlate with the
price movements in the futures contract and thus provide an
offset on a futures contract.

Options on Foreign Currencies

         The Fund may purchase and write put and call options on
foreign currencies for the purpose of protecting against declines
in the U.S. dollar value of foreign currency-denominated
portfolio securities and against increases in the U.S. dollar
cost of such securities to be acquired.  For example, a decline
in the dollar value of a foreign currency in which portfolio
securities are denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains
constant.  In order to protect against such diminutions in the
value of portfolio securities, the Fund may purchase put options
on the foreign currency.  If the value of the currency does
decline, the Fund will have the right to sell such currency for a
fixed amount in dollars and will thereby offset, in whole or in
part, the adverse effect on its portfolio which otherwise would
have resulted.  As in the case of other kinds of options,
however, the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby
incurring losses.  The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations
in exchange rates although, in the event of rate movements



                              A-11





<PAGE>


adverse to the Fund's position, it may forfeit the entire amount
of the premium plus related transaction costs.  Options on
foreign currencies to be written or purchased by the Fund are
traded on U.S. and foreign exchanges or over-the-counter.

         Conversely, where a rise in the dollar value of a
currency in which securities to be acquired are denominated is
projected, thereby increasing the cost of such securities, the
Fund may purchase call options thereon.  The purchase of such
options could offset, at least partially, the effects of the
adverse movements in exchange rates.  As in the case of other
types of options, however, the benefit to the Fund deriving from
purchases of foreign currency options will be reduced by the
amount of the premium and related transaction costs.  In
addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the Fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.

         The Fund may write options on foreign currencies for the
same types of hedging purposes.  For example, where the Fund
anticipates a decline in the dollar value of foreign currency
denominated securities due to adverse fluctuations in exchange
rates it could, instead of purchasing a put option, write a call
option on the relevant currency.  If the expected decline occurs,
the option will most likely not be exercised, and the diminution
in value of portfolio securities will be offset by the amount of
the premium received.

         Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar cost of securities
to be acquired, the Fund could write a put option on the relevant
currency which, if rates move in the manner projected, will
expire unexercised and allow the Fund to hedge such increased
cost up to the amount of the premium.  As in the case of other
types of options, however, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of
the premium, and only if rates move in the expected direction. If
this does not occur, the option may be exercised and the Fund
would be required to purchase or sell the underlying currency at
a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the Fund
also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements
in exchange rates.





                              A-12





<PAGE>


         The Fund intends to write covered call options on
foreign currencies.  A call option written on a foreign currency
by the Fund is "covered" if the Fund owns the underlying foreign
currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversation or
exchange of other foreign currency held in its portfolio.  A call
option is also covered if the Fund has a call on the same foreign
currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less
than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is
maintained by the Fund in liquid assets in a segregated account
with its custodian.

         The Fund also intends to write call options on foreign
currencies for cross-hedging purposes.  An option that is cross-
hedged is not covered, but is designed to provide a hedge against
a decline in the U.S. dollar value of a security which the Fund
owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the
exchange rate.  In such circumstances, the Fund collateralizes
the option by maintaining in a segregated account with the Fund's
custodian, liquid assets in an amount not less than the value of
the underlying foreign currency in U.S. dollars marked to market
daily.  There is no specific percentage limitation on the Fund's
investment in options on foreign currencies.

Additional Risks of Options on Futures Contracts, Forward
Contracts and Options on Foreign Currencies

         Unlike transactions entered into by the Fund in futures
contracts, options on foreign currencies and forward contracts
are not traded on contract markets regulated by the CFTC or (with
the exception of certain foreign currency options) by the
Commission.  To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign
currency options are also traded on certain national securities
exchanges, such as the Philadelphia Stock Exchange and the
Chicago Board Options Exchange, subject to Commission regulation.
Similarly, options on securities may be traded over-the-counter.
In an over-the-counter trading environment, many of the
protections afforded to exchange participants will not be
available.  Although the purchaser of an option cannot lose more
than the amount of the premium plus related transaction costs,
this entire amount could be lost.  Moreover, the option writer
and a trader of forward contracts could lose amounts



                              A-13





<PAGE>


substantially in excess of their initial investments, due to the
margin and collateral requirements associated with such
positions.

         Options on foreign currencies traded on national
securities exchanges are within the jurisdiction of the
Commission, as are other securities traded on such exchanges.  As
a result, many of the protections provided to traders, on
organized exchanges will be available with respect to such
transactions.  In particular, all foreign currency option
positions entered into on a national securities exchange are
cleared and guaranteed by the Options Clearing Corporation
("OCC"), thereby reducing the risk of counterparty default.
Further, a liquid secondary market in options traded on a
national securities exchange may be more readily available than
in the over-the-counter market, potentially permitting the Fund
to liquidate open positions at a profit prior to exercise or
expiration, or to limit losses in the event of adverse market
movements.

         The purchase and sale of exchange-traded foreign
currency options, however, is subject to the risks of the
availability of a liquid secondary market described above, as
well as the risks regarding adverse market movements, margining
of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects
of other political and economic events.  In addition, exchange-
traded options on foreign currencies involve certain risks not
presented by the over-the-counter market.  For example, exercise
and settlement of such options must be made exclusively through
the OCC, which has established banking relationships in
applicable foreign countries for this purpose.  As a result, the
OCC may, if it determines that foreign governmental restrictions
or taxes would prevent the orderly settlement of foreign currency
option exercise, or would result in undue burdens on the OCC or
its clearing member, impose special procedures on exercise and
settlement, such as technical changes in the mechanics of
delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.

         In addition, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies
may be traded on foreign exchanges.  Such transactions are
subject to the risk of governmental actions affecting trading in
or the prices of foreign currencies or securities.  The value of
such positions also could be adversely affected by (i) other
complex foreign political and economic factors, (ii) lesser
availability than in the United States of data on which to make



                              A-14





<PAGE>


trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during nonbusiness
hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) lesser trading
volume.

Repurchase Agreements

         The Fund may enter into agreements pertaining to U.S.
Government Securities with member banks of the Federal Reserve
System or "primary dealers" (as designated by the Federal Reserve
Bank of New York) in such securities.  There is no percentage
restriction on the Fund's ability to enter into repurchase
agreements.  Currently, the Fund intends to enter into repurchase
agreements only with its custodian and such primary dealers.  A
repurchase agreement arises when a buyer purchases a security and
simultaneously agrees to resell it to the vendor at an agreed-
upon future date, normally one day or a few days later.  The
resale price is greater than the purchase price, reflecting, an
agreed-upon interest rate which is effective for the period of
time the buyer's money is invested in the security and which is
related to the current market rate rather than the coupon rate on
the purchased security.  Such agreements permit the Fund to keep
all of its assets at work while retaining "overnight" flexibility
in pursuit of investments of a longer-term nature.  The Fund
requires continual maintenance by its custodian for its account
in the Federal Reserve/Treasury Book Entry System of collateral
in an amount equal to, or in excess of, the resale price.  In the
event a vendor defaulted on its repurchase obligation, the Fund
might suffer a loss to the extent that the proceeds from the sale
of the collateral were less than the repurchase price.  In the
event of a vendor's bankruptcy, the Fund might be delayed in, or
prevented from, selling the collateral for its benefit.  The
Fund's Board of Directors has established procedures, which are
periodically reviewed by the Board, pursuant to which the Fund's
Adviser monitors the creditworthiness of the dealers with which
the Fund enters into repurchase agreement transactions.

Currency Swaps

         The Fund may enter into currency swaps for hedging
purposes.  Currency swaps involve the exchange by the Fund with
another party of a series of payments in specified currencies.
Since currency swaps are individually negotiated, the Fund
expects to achieve an acceptable degree of correlation between
its portfolio investments and its currency swaps positions.  A
currency swap may involve the delivery at the end of the exchange



                              A-15





<PAGE>


period of a substantial amount of one designated currency in
exchange for the other designated currency.  Therefore the entire
principal value of a currency swap is subject to the risk that
the other party to the swap will default on its contractual
delivery obligations.  The net amount of the excess, if any, of
the Fund's obligations over its entitlements with respect to each
currency swap will be accrued on a daily basis and an amount of
liquid assets having an aggregate net asset value at least equal
to the accrued excess will be maintained in a segregated account
by the Fund's custodian.  The Fund will not enter into any
currency swap unless the credit quality of the unsecured senior
debt or the claims-paying ability of the other party thereto is
rated in the highest rating category of at least one nationally
recognized rating organization at the time of entering into the
transaction.  If there is a default by the other party to such a
transaction, the Fund will have contractual remedies pursuant to
the agreements related to the transactions.

Loans of Portfolio Securities

         The Fund may make secured loans of its portfolio
securities of up to 30% of its total assets to entities with
which it can enter into repurchase agreements, provided that cash
and/or liquid high grade debt securities equal to at least 100%
of the market value of the securities loaned are deposited and
maintained by the borrower with the Fund.  See "Repurchase
Agreements" above.  The risks in lending portfolio securities, as
with other extensions of credit, consist of possible loss of
rights in the collateral should the borrower fail financially.
In determining whether to lend securities to a particular
borrower, the Adviser (subject to review by the Board of
Directors) will consider all relevant facts and circumstances,
including the creditworthiness of the borrower.  While securities
are on loan, the borrower will pay the Fund any income earned
thereon and the Fund may invest any cash collateral in portfolio
securities, thereby earning additional income, or receive an
agreed upon amount of income from a borrower who has delivered
equivalent collateral.  The Fund will have the right to regain
record ownership of loaned securities to exercise beneficial
rights such as voting rights, subscription rights and rights to
dividends, interest or distributions.  The Fund may pay
reasonable finders', administrative and custodial fees in
connection with a loan.  The Fund will not lend portfolio
securities in excess of 30% of the value of its total assets, nor
will the Fund lend its portfolio securities to any officer,
director, employee or affiliate of the Fund or the Adviser.  The
Board of Directors will monitor the Fund's lending of portfolio
securities.



                              A-16





<PAGE>



General

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

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









                              A-17





<PAGE>


Federal Income Taxes-General."

Future Developments

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







































                              A-18





<PAGE>


____________________________________________________________

                           APPENDIX B:

                 CERTAIN EMPLOYEE BENEFIT PLANS
____________________________________________________________

         Employee benefit plans described below which are
intended to be tax-qualified under section 401(a) of the Internal
Revenue Code of 1986, as amended ("Tax Qualified Plans"), for
which Merrill Lynch, Pierce, Fenner & Smith Incorporated or an
affiliate thereof ("Merrill Lynch") is recordkeeper (or with
respect to which recordkeeping services are provided pursuant to
certain arrangements as described in paragraph (ii) below)
("Merrill Lynch Plans") are subject to specific requirements as
to the Fund shares which they may purchase.  Notwithstanding
anything to the contrary contained elsewhere in this Statement of
Additional Information, the following Merrill Lynch Plans are not
eligible to purchase Class A shares and are eligible to purchase
Class B shares of the Fund at net asset value without being
subject to a contingent deferred sales charge:

(i)  Plans for which Merrill Lynch is the recordkeeper on a daily
     valuation basis, if when the plan is established as an
     active plan on Merrill Lynch's recordkeeping system:

    (a)   the plan is one which is not already investing in
          shares of mutual funds or interests in other commingled
          investment vehicles of which Merrill Lynch Asset
          Management, L.P. is investment adviser or manager
          ("MLAM Funds"), and either (A) the aggregate assets of
          the plan are less than $3 million or (B) the total of
          the sum of (x) the employees eligible to participate in
          the plan and (y) those persons, not including any such
          employees, for whom a plan account having a balance
          therein is maintained, is less than 500, each of (A)
          and (B) to be determined by Merrill Lynch in the normal
          course prior to the date the plan is established as an
          active plan on Merrill Lynch's recordkeeping system (an
          "Active Plan"); or

    (b)   the plan is one which is already investing in shares of
          or interests in MLAM Funds and the assets of the plan
          have an aggregate value of less than $5 million, as
          determined by Merrill Lynch as of the date the plan
          becomes an Active Plan.





                               B-1





<PAGE>


          For purposes of applying (a) and (b), there are to be
          aggregated all assets of any Tax-Qualified Plan
          maintained by the sponsor of the Merrill Lynch Plan (or
          any of the sponsor's affiliates) (determined to be such
          by Merrill Lynch) which are being invested in shares of
          or interests in MLAM Funds, Alliance Mutual Funds or
          other mutual funds made available pursuant to an
          agreement between Merrill Lynch and the principal
          underwriter thereof (or one of its affiliates) and
          which are being held in a Merrill Lynch account.

(ii) Plans for which the recordkeeper is not Merrill Lynch, but
     which are recordkept on a daily valuation basis by a
     recordkeeper with which Merrill Lynch has a subcontracting
     or other alliance arrangement for the performance of
     recordkeeping services, if the plan is determined by Merrill
     Lynch to be so eligible and the assets of the plan are less
     than $3 million.

         Class B shares of the Fund held by any of the above-
described Merrill Lynch Plans are to be replaced at Merrill
Lynch's direction through conversion, exchange or otherwise by
Class A shares of the Fund on the earlier of the date that the
value of the plan's aggregate assets first equals or exceeds $5
million or the date on which any Class B share of the Fund held
by the plan would convert to a Class A share of the Fund as
described under "Purchase of Shares" and "Redemption and
Repurchase of Shares."

         Any Tax Qualified Plan, including any Merrill Lynch
Plan, which does not purchase Class B shares of the Fund without
being subject to a contingent deferred sales charge under the
above criteria is eligible to purchase Class B shares subject to
a contingent deferred sales charge as well as other classes of
shares of the Fund as set forth above under "Purchase of Shares"
and "Redemption and Repurchase of Shares."















                               B-2





<PAGE>


                             PART C

                        OTHER INFORMATION

ITEM 23. Exhibits

         (a)  (1)  Articles of Incorporation - Incorporated by
              reference to Exhibit 1 to the Fund's Registration
              Statement on Form N-1A (File Nos. 333-8818 and
              811-9176) filed with the Securities and Exchange
              Commission on May 22, 1998.

              (2)  Articles of Amendment of the Fund's Articles
              of Incorporation dated June 25th, 1998 -
              Incorporated by reference to Exhibit 1(b) to Pre-
              Effective Amendment No. 1 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

              (3)  Articles Supplementary to the Fund's Articles
              of Incorporation dated February 22, 2000 -
              Incorporated by reference to Exhibit (a)(3) to
              Post-Effective Amendment No. 5 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on February 29,
              2000.


              (4)  Articles Supplementary to the Fund's Articles
              of Incorporation dated June 22, 2000 - Incorporated
              by reference to Exhibit (a)(4) to Post-Effective
              Amendment No. 9 of the Fund's Registration
              Statement on Form N-1A (File Nos. 333-8818 and 811-
              9176) filed with the Securities and Exchange
              Commission on July 7, 2000.


         (b)  By-Laws of the Fund - Incorporated by reference to
              Exhibit 2 to Pre-Effective Amendment No. 1 of the
              Fund's Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

         (c)  Not applicable.



                               C-1





<PAGE>




         (d)  Advisory Agreement between the Fund and Alliance
              Capital Management L.P. as amended July 7, 2000 -
              Incorporated by reference to Exhibit (d) to Post-
              Effective Amendment No. 9 of the Fund's
              Registration Statement on Form N-1A (File Nos. 333-
              8818 and 811-9176) filed with the Securities and
              Exchange Commission on July 7, 2000.


         (e)  (1)  Distribution Services Agreement between the
              Fund and Alliance Fund Distributors, Inc. -
              Incorporated by reference to Exhibit 6(a) to Pre-
              Effective Amendment No. 1 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

              (2)  Form of Selected Dealer Agreement between
              Alliance Fund Distributors, Inc. and selected
              dealers offering shares of the Fund - Incorporated
              by reference to Exhibit 6(b) to the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on May 22, 1998.

              (3)  Form of Selected Agent Agreement between
              Alliance Fund Distributors, Inc. and selected
              agents making available shares of the Fund -
              Incorporated by reference to Exhibit 6(c) to the
              Fund's Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on May 22, 1998.

         (f)  Not applicable.

         (g)  Custody Agreement between the Fund and The Bank of
              New York - Incorporated by reference to Exhibit 8
              to Pre-Effective Amendment No. 1 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

         (h)  (1)  Transfer Agency Agreement between the
              Registrant and Alliance Fund Services, Inc. -



                               C-2





<PAGE>


              Incorporated by reference to Exhibit 9(a) to Pre-
              Effective Amendment No. 1 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

              (2)  Expense Limitation Agreement between the Fund
              and Alliance Capital Management, L.P. relating to
              the Premier Portfolio - Incorporated by reference
              to Exhibit 9(b) to Pre-Effective Amendment No. 1 of
              the Fund's Registration Statement on Form N-1A
              (File Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.


              (3)  Expense Limitation Agreement between the Fund
              and Alliance Capital Management, L.P. relating to
              the Biotechnology Portfolio - Incorporated by
              reference to Exhibit (h)(3) to Post-Effective
              Amendment No. 9 of the Fund's Registration
              Statement on Form N-1A (File Nos. 333-8818 and 811-
              9176) filed with the Securities and Exchange
              Commission on July 7, 2000.


         (i)  (1)  Opinion and Consent of Seward & Kissel LLP
              relating to the Premier Portfolio - Incorporated by
              reference to Exhibit (i)(1) to Post-Effective
              Amendment No. 5 of the Fund's Registration
              Statement on Form N-1A (File Nos. 333-8818 and
              811-9176) filed with the Securities and Exchange
              Commission on February 29, 2000.

              (2)  Opinion and Consent of Seward & Kissel LLP
              relating to the Technology Portfolio - Incorporated
              by reference to Exhibit (i) (2) to Post-Effective
              Amendment No. 6 of the Fund's Registration
              Statement on Form N-1A (File Nos. 333-8818 and 811-
              9176) filed with the Securities and Exchange
              Commission on February 29, 2000.


              (3)  Opinion and Consent of Seward & Kissel LLP
              relating to the Biotechnology Portfolio -
              Incorporated by reference to Exhibit (i)(3) to
              Post-Effective Amendment No. 9 of the Fund's



                               C-3





<PAGE>


              Registration Statement on Form N-1A (File Nos. 333-
              8818 and 811-9176) filed with the Securities and
              Exchange Commission on July 7, 2000.


              (4)  Opinion and Consent of Venable, Baetjer and
              Howard, LLP relating to the Premier Portfolio -
              Incorporated by reference to Exhibit 10(b) to Pre-
              Effective Amendment No. 1 of the Fund's
              Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

              (5)  Opinion and Consent of Venable, Baetjer and
              Howard, LLP relating to the Technology Portfolio -
              Incorporated by reference to Exhibit (i) (4) to
              Post-Effective Amendment No. 6 of the Fund's
              Registration Statement on Form N-1A (File Nos. 333-
              8818 and 811-9176) filed with the Securities and
              Exchange Commission on February 29, 2000.


              (6)  Opinion and Consent of Venable, Baetjer and
              Howard, LLP relating to Biotechnology Portfolio -
              Incorporated by reference to Exhibit (i)(6) to
              Post-Effective Amendment No. 9 of the Fund's
              Registration Statement on Form N-1A (File Nos. 333-
              8818 and 811-9176) filed with the Securities and
              Exchange Commission on July 7, 2000.


         (j)  Consent of Independent Accountants - Not
              applicable.

         (k)  Not applicable.

         (l)  Investment representation letter of Alliance
              Capital Management L.P. - Incorporated by reference
              to Exhibit 13 to Pre-Effective Amendment No. 1 of
              the Fund's Registration Statement on Form N-1A
              (File Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.

         (m)  Rule 12b-1 Plan - See Exhibit (e)(1) hereto.

         (n)  Financial Data Schedules - Not applicable.



                               C-4





<PAGE>



         (o)  Rule 18f-3 Plan - Incorporated by reference to
              Exhibit 18 to Pre-Effective Amendment No. 1 of the
              Fund's Registration Statement on Form N-1A (File
              Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on June 29,
              1998.


         (p)  (1)  Code of Ethics relating to Alliance Select
              Investor Series, Inc. - Incorporated by reference
              to Exhibit (p)(1) to Post-Effective Amendment No. 9
              of the Fund's Registration Statement on Form N-1A
              (File Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on July 7, 2000.

              (2)  Code of Ethics relating to Alliance Capital
              Management L.P. - Incorporated by reference to
              Exhibit (p)(2) to Post-Effective Amendment No. 9 of
              the Fund's Registration Statement on Form N-1A
              (File Nos. 333-8818 and 811-9176) filed with the
              Securities and Exchange Commission on July 7, 2000.


         Other Exhibits:

         Powers of Attorney for John D. Carifa, Ruth Block, David
H. Dievler, John H. Dobkin, William H. Foulk, Jr., Dr. James M.
Hester, Clifford L. Michel, Donald J. Robinson - Incorporated by
reference to Other Exhibits to Post-Effective Amendment No. 5 of
the Fund's Registration Statement on Form N-1A (File
Nos. 333-8818 and 811-9176) filed with the Securities and
Exchange Commission on February 29, 2000.

ITEM 24. Persons Controlled by or under Common Control with the
Fund.

         None.

ITEM 25. Indemnification.

         It is the Registrant's policy to indemnify its directors
         and officers, employees and other agents to the maximum
         extent permitted by Section 2-418 of the General
         Corporation Law of the State of Maryland, which is
         incorporated by reference herein, and as set forth in
         Article EIGHTH of Registrant's Articles of
         Incorporation, filed as Exhibit (a) hereto, Article VII



                               C-5





<PAGE>


         and Article VIII of Registrant's By-Laws, filed as
         Exhibit (b) hereto, and Section 10 of the proposed
         Distribution Services Agreement, filed as Exhibit (e)(1)
         hereto.  The Adviser's liability for any loss suffered
         by the Registrant or its shareholders is set forth in
         Section 4 of the Advisory Agreement, filed as
         Exhibit (d) hereto.

         Insofar as indemnification for liabilities arising under
         the Securities Act may be permitted to directors,
         officers and controlling persons of the Registrant
         pursuant to the foregoing provisions, or otherwise, the
         Registrant has been advised that, in the opinion of the
         Securities and Exchange Commission, such indemnification
         is against public policy as expressed in the Securities
         Act and is, therefore, unenforceable.  In the event that
         a claim for indemnification against such liabilities
         (other than the payment by the Registrant of expenses
         incurred or paid by a director, officer or controlling
         person of the Registrant in the successful defense of
         any action, suit or proceeding) is asserted by such
         director, officer or controlling person in connection
         with the securities being registered, the Registrant
         will, unless in the opinion of its counsel the matter
         has been settled by controlling precedent, submit to a
         court of appropriate jurisdiction the question of
         whether such indemnification by it is against public
         policy as expressed in the Securities Act and will be
         governed by the final adjudication of such issue.

         In accordance with Release No. IC-11330 (September 2,
         1980), the Registrant will indemnify its directors,
         officers, investment manager and principal underwriters
         only if (1) a final decision on the merits was issued by
         the court or other body before whom the proceeding was
         brought that the person to be indemnified (the
         "indemnitee") was not liable by reason or willful
         misfeasance, bad faith, gross negligence or reckless
         disregard of the duties involved in the conduct of his
         office ("disabling conduct") or (2) a reasonable
         determination is made, based upon a review of the facts,
         that the indemnitee was not liable by reason of
         disabling conduct, by (a) the vote of a majority of a
         quorum of the directors who are neither "interested
         persons" of the Registrant as defined in section
         2(a)(19) of the Investment Company Act of 1940 nor
         parties to the proceeding ("disinterested, non-party
         directors"), or (b) an independent legal counsel in a



                               C-6





<PAGE>


         written opinion.  The Registrant will advance attorneys
         fees or other expenses incurred by its directors,
         officers, investment adviser or principal underwriters
         in defending a proceeding, upon the undertaking by or on
         behalf of the indemnitee to repay the advance unless it
         is ultimately determined that he is entitled to
         indemnification and, as a condition to the advance,
         (1) the indemnitee shall provide a security for his
         undertaking, (2) the Registrant shall be insured against
         losses arising by reason of any lawful advances, or
         (3) a majority of a quorum of disinterested, non-party
         directors of the Registrant, or an independent legal
         counsel in a written opinion, shall determine, based on
         a review of readily available facts (as opposed to a
         full trial-type inquiry), that there is reason to
         believe that the indemnitee ultimately will be found
         entitled to indemnification.

         The Registrant participates in a joint
         trustees/directors and officers liability insurance
         policy issued by the ICI Mutual Insurance Company.
         Coverage under this policy has been extended to
         directors, trustees and officers of the investment
         companies managed by Alliance Capital Management L.P.
         Under this policy, outside trustees and directors are
         covered up to the limits specified for any claim against
         them for acts committed in their capacities as trustee
         or director.  A pro rata share of the premium for this
         coverage is charged to each investment company and to
         the Adviser.

ITEM 26. Business and Other Connections of Investment Adviser.

         The descriptions of Alliance Capital Management L.P.
         under the captions "Management of the Fund" in the
         Prospectus and in the Statement of Additional
         Information constituting Parts A and B, respectively, of
         this Registration Statement are incorporated by
         reference herein.

         The information as to the directors and executive
         officers of Alliance Capital Management Corporation, the
         general partner of Alliance Capital Management L.P., set
         forth in Alliance Capital Management L.P.'s Form ADV
         filed with the Securities and Exchange Commission on
         April 21, 1988 (File No. 801-32361) and amended through
         the date hereof, is incorporated by reference.




                               C-7





<PAGE>


ITEM 27. Principal Underwriters.

    (a)  Alliance Fund Distributors, Inc., the Registrant's
         Principal Underwriter in connection with the sale of
         shares of the Registrant. Alliance Fund Distributors,
         Inc. acts as Principal Underwriter or Distributor for
         the following investment companies:


         AFD Exchange Reserves
         Alliance All-Asia Investment Fund, Inc.
         Alliance Balanced Shares, Inc.
         Alliance Bond Fund, Inc.
         Alliance Capital Reserves
         Alliance Disciplined Value Fund, Inc.
         Alliance Global Dollar Government Fund, Inc.
         Alliance Global Small Cap Fund, Inc.
         Alliance Global Strategic Income Trust, Inc.
         Alliance Government Reserves
         Alliance Greater China '97 Fund, Inc.
         Alliance Growth and Income Fund, Inc.
         Alliance Health Care Fund, Inc.
         Alliance High Yield Fund, Inc.
         Alliance Institutional Funds, Inc.
         Alliance Institutional Reserves, Inc.
         Alliance International Fund
         Alliance International Premier Growth Fund, Inc.
         Alliance Limited Maturity Government Fund, Inc.
         Alliance Money Market Fund
         Alliance Mortgage Securities Income Fund, Inc.
         Alliance Multi-Market Strategy Trust, Inc.
         Alliance Municipal Income Fund, Inc.
         Alliance Municipal Income Fund II
         Alliance Municipal Trust
         Alliance New Europe Fund, Inc.
         Alliance North American Government Income Trust, Inc.
         Alliance Premier Growth Fund, Inc.
         Alliance Quasar Fund, Inc.
         Alliance Real Estate Investment Fund, Inc.
         Alliance Select Investor Series, Inc.
         Alliance Technology Fund, Inc.
         Alliance Utility Income Fund, Inc.
         Alliance Variable Products Series Fund, Inc.
         Alliance Worldwide Privatization Fund, Inc.







                               C-8





<PAGE>


         The Alliance Fund, Inc.
         The Alliance Portfolios


    (b)  The following are the Directors and Officers of Alliance
         Fund Distributors, Inc., the principal place of business
         of which is 1345 Avenue of the Americas, New York, New
         York, 10105.

                            POSITIONS AND           POSITIONS AND
                            OFFICES WITH            OFFICES WITH
    NAME                    UNDERWRITER             REGISTRANT

Michael J. Laughlin         Director and Chairman


John D. Carifa              Director                Chairman and
                                                    President


Robert L. Errico            Director and President

Geoffrey L. Hyde            Director and Senior
                            Vice President

Dave H. Williams            Director

David Conine                Executive Vice President


Richard K. Saccullo         Executive Vice President


Edmund P. Bergan, Jr.       Senior Vice President,      Secretary
                            General Counsel and
                            Secretary

Richard A. Davies           Senior Vice President
                            and Managing Director

Robert H. Joseph, Jr.       Senior Vice President
                            and Chief Financial Officer

Anne S. Drennan             Senior Vice President
                            and Treasurer

Benji A. Baer               Senior Vice President




                               C-9





<PAGE>



John R. Bonczek             Senior Vice President


Karen J. Bullot             Senior Vice President

John R. Carl                Senior Vice President

James S. Comforti           Senior Vice President

James L. Cronin             Senior Vice President


Byron M. Davis              Senior Vice President

Mark J. Dunbar              Senior Vice President

Donald N. Fritts            Senior Vice President

Andrew L. Gangolf           Senior Vice President   Assistant
                            and Assistant General   Secretary
                            Counsel

Bradley F. Hanson           Senior Vice President

George H. Keith             Senior Vice President

Richard E. Khaleel          Senior Vice President

Stephen R. Laut             Senior Vice President

Susan L. Matteson-King      Senior Vice President

Daniel D. McGinley          Senior Vice President

Antonios G. Poleondakis     Senior Vice President

Robert E. Powers            Senior Vice President

Domenick Pugliese           Senior Vice President   Assistant
                            and Assistant General   Secretary
                            Counsel

Kevin A. Rowell             Senior Vice President

John P. Schmidt             Senior Vice President

Raymond S. Sclafani         Senior Vice President



                              C-10





<PAGE>



Gregory K. Shannahan        Senior Vice President

Scott C. Sipple             Senior Vice President

Joseph F. Sumanski          Senior Vice President

Peter J. Szabo              Senior Vice President

William C. White            Senior Vice President


Richard A. Winge            Senior Vice President

Emilie D. Wrapp             Senior Vice President
                            and Assistant General
                            Counsel

Gerard J. Friscia           Vice President and
                            Controller

Ricardo Arreola             Vice President

Kenneth F. Barkoff          Vice President


Adam J. Barnett             Vice President


Charles M. Barrett          Vice President


Matthew F. Beaudry          Vice President

Leo Benitez                 Vice President


Gregory P. Best             Vice President


Dale E. Boyd                Vice President

Robert F. Brendli           Vice President

Christopher L. Butts        Vice President

Thomas C. Callahan          Vice President




                              C-11





<PAGE>


Kevin T. Cannon             Vice President


John M. Capeci              Vice President

John P. Chase               Vice President


Doris T. Ciliberti          Vice President

William W. Collins, Jr.     Vice President

Leo H. Cook                 Vice President

Russell R. Corby            Vice President

John W. Cronin              Vice President


Robert J. Cruz              Vice President

Richard W. Dabney           Vice President


Daniel J. Deckman           Vice President

Sherry V. Delaney           Vice President


Richard P. Dyson            Vice President

John C. Endahl              Vice President

John E. English             Vice President

Sohaila S. Farsheed         Vice President

Daniel J. Frank             Vice President

Shawn C. Gage               Vice President

Joseph C. Gallagher         Vice President

Michael J. Germain          Vice President

Mark D. Gersten             Vice President          Treasurer and
                                                    Chief




                              C-12





<PAGE>


                                                    Financial
                                                    Officer

Hyman Glasman               Vice President

John Grambone               Vice President

Charles M. Greenberg        Vice President

Alan Halfenger              Vice President

William B. Hanigan          Vice President

Michael S. Hart             Vice President

Scott F. Hyer               Vice President

Timothy A. Hill             Vice President

Brian R. Hoegee             Vice President

George R. Hrabovsky         Vice President


Michael J. Hutten           Vice President

Scott Hutton                Vice President

Oscar J. Isoba              Vice President

Richard D. Keppler          Vice President

Richard D. Kozlowski        Vice President

Daniel W. Krause            Vice President

Donna M. Lamback            Vice President

P. Dean Lampe               Vice President

Henry Michael Lesmeister    Vice President

Eric L. Levinson            Vice President

James M. Liptrot            Vice President

James P. Luisi              Vice President




                              C-13





<PAGE>



Michael F. Mahoney          Vice President


Kathryn Austin Masters      Vice President


Shawn P. McClain            Vice President

David L. McGuire            Vice President

Jeffrey P. Mellas           Vice President

Michael V. Miller           Vice President

Thomas F. Monnerat          Vice President

Timothy S. Mulloy           Vice President

Joanna D. Murray            Vice President

Michael F. Nash, Jr.        Vice President

Timothy H. Nasworthy        Vice President

Nicole Nolan-Koester        Vice President

Daniel A. Notto             Vice President

Peter J. O'Brien            Vice President

John C. O'Connell           Vice President

John J. O'Connor            Vice President

Daniel P. O'Donnell         Vice President

Richard J. Olszewski        Vice President

Jeffrey R. Petersen         Vice President

Catherine N. Peterson       Vice President


James J. Posch              Vice President

Bruce W. Reitz              Vice President




                              C-14





<PAGE>


Jeffrey B. Rood             Vice President

Karen C. Satterberg         Vice President

Robert C. Schultz           Vice President

Richard J. Sidell           Vice President

Clara Sierra                Vice President

Teris A. Sinclair           Vice President

Jeffrey C. Smith            Vice President

David A. Solon              Vice President


Martine H. Stansbery, Jr.   Vice President

Eileen Stauber              Vice President

Michael J. Tobin            Vice President

Joseph T. Tocyloski         Vice President

Benjamin H. Travers         Vice President

David R. Turnbough          Vice President

Andrew B. Vaughey           Vice President

Wayne W. Wagner             Vice President


Mark E. Westmoreland        Vice President

Paul C. Wharf               Vice President

Stephen P. Wood             Vice President


Keith A. Yoho               Vice President


Michael W. Alexander        Assistant Vice
                            President





                              C-15





<PAGE>


Richard J. Appaluccio       Assistant Vice
                            President

Paul G. Bishop              Assistant Vice
                            President

Mark S. Burns               Assistant Vice
                            President



Maria L. Carreras           Assistant Vice
                            President


Judith A. Chin              Assistant Vice
                            President

Jorge Ciprian               Assistant Vice
                            President

William P. Condon           Assistant Vice
                            President

Jean A. Coomber             Assistant Vice
                            President


Dorsey Davidge              Assistant Vice
                            President


Ralph A. DiMeglio           Assistant Vice
                            President

Faith C. Deutsch            Assistant Vice
                            President

Timothy J. Donegan          Assistant Vice
                            President


Joan Eilbott                Assistant Vice
                            President







                              C-16





<PAGE>


Adam E. Engelhardt          Assistant Vice
                            President


Michael J. Eustic           Assistant Vice
                            President


Michele Grossman            Assistant Vice
                            President

Arthur F. Hoyt, Jr.         Assistant Vice
                            President

David A. Hunt               Assistant Vice
                            President

Theresa Iosca               Assistant Vice
                            President

Erik A. Jorgensen           Assistant Vice
                            President

Eric G. Kalender            Assistant Vice
                            President

Elizabeth E. Keefe          Assistant Vice
                            President

Edward W. Kelly             Assistant Vice
                            President

Victor Kopelakis            Assistant Vice
                            President


Jeffrey M. Kusterer         Assistant Vice
                            President


Alexandra C. Landau         Assistant Vice
                            President

Laurel E. Lindner           Assistant Vice
                            President






                              C-17





<PAGE>


Evamarie C. Lombardo        Assistant Vice
                            President


Amanda McNichol             Assistant Vice
                            President


Richard F. Meier            Assistant Vice
                            President

Charles B. Nanick           Assistant Vice
                            President

Alex E. Pady                Assistant Vice
                            President

Raymond E. Parker           Assistant Vice
                            President

Wandra M. Perry-Hartsfield  Assistant Vice
                            President

Rizwan A. Raja              Assistant Vice
                            President

Carol H. Rappa              Assistant Vice
                            President

Brendan J. Reynolds         Assistant Vice
                            President

James A. Rie                Assistant Vice
                            President

Lauryn A. Rivello           Assistant Vice
                            President


Christina Santiago          Assistant Vice
                            President and
                            Counsel


Nancy D. Testa              Assistant Vice
                            President





                              C-18





<PAGE>


Margaret M. Tompkins        Assistant Vice
                            President

Marie R. Vogel              Assistant Vice
                            President

Nina C. Wilkinson           Assistant Vice
                            President

Wesley S. Williams          Assistant Vice
                            President

Matthew Witschel            Assistant Vice
                            President

Mark R. Manley              Assistant Secretary



































                              C-19





<PAGE>



    (c)  Not applicable.

ITEM 28. Location of Accounts and Records.

         The majority of the accounts, books and other documents
         required to be maintained by Section 31(a) of the
         Investment Company Act of 1940 and the rules thereunder
         are maintained as follows:  journals, ledgers,
         securities records and other original records are
         maintained principally at the offices of Alliance Fund
         Services, Inc., 500 Plaza Drive, Secaucus, New Jersey,
         07094 and at the offices of The Bank of New York, the
         Registrant's custodian, One Wall Street, New York, New
         York 10286.  All other records so required to be
         maintained are maintained at the offices of Alliance
         Capital Management L.P., 1345 Avenue of the Americas,
         New York, New York 10105.

ITEM 29. Management Services.

         Not applicable.

ITEM 30. Undertakings.

         The Registrant undertakes to provide assistance to
         shareholders in communications concerning the removal of
         any Director of the Fund in accordance with Section 16
         of the Investment Company Act of 1940.






















                              C-20





<PAGE>


                           SIGNATURES


         Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York
and the State of New York, on the 13th day of November 2000.


                            Alliance Select Investor Series, Inc.

                                       /s/John D. Carifa, Jr.
                                       ________________________
                                       John D. Carifa
                                       Chairman and President


         Pursuant to the requirements of the Securities Act of
1933, as amended, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities
and on the date indicated.

Signature                          Title            Date
_____________                   __________        ________

(1) Principal Executive Officer:

    /s/ John D. Carifa         Chairman and   November 13, 2000
    ______________________      President
    John D. Carifa

(2) Principal Financial
    and Accounting Officer:

    /s/ Mark D. Gersten        Treasurer      November 13, 2000
    _____________________       and Chief
    Mark D. Gersten             Financial
                                Officer











                              C-21





<PAGE>


(3) All of the Directors:

    John D. Carifa             William H. Foulk
    Ruth Block                 Dr. James M. Hester
    David H. Dievler           Clifford L. Michel
    John H. Dobkin             Donald J. Robinson

    /s/ Edmund P. Bergan, Jr.                 November 13, 2000
    _________________________
    Edmund P. Bergan, Jr.
    Attorney-in-Fact








































                              C-22





<PAGE>


                        Index To Exhibits


















































                              C-23
00250073.AY2



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