ALLIANCE HEALTH CARE FUND INC, N-1A/A, 1999-07-09

ALLIANCE HEALTH CARE FUND INC
N-1A/A, 1999-07-09

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As filed with the Securities and Exchange
Commission on July 9, 1999
File Nos.
333-77953
811-09329

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

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

Pre-Effective Amendment No. 1

Post-Effective Amendment No.

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No.

_______________________________

ALLIANCE HEALTH CARE FUND, 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
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

<PAGE>

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)
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.

The Registrant hereby amends this Registrant Statement under
the Securities Act of 1933 on such date or dates as may be
necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in
accordance with the provisions of Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.

<PAGE>

ALLIANCE HEALTH CARE FUND

Alliance Health Care Fund, Inc. is an open-end management
investment company that offers investors the opportunity to seek
capital appreciation through investment in health care and health
sciences industries.

PROSPECTUS AND APPLICATION

July 26, 1999

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

ALLIANCE CAPITAL [LOGO]

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TABLE OF CONTENTS
Page

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

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

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

DESCRIPTION OF THE FUND....................................

Investment Objective, Policies and Risk Considerations.....

Description of Investment Practices........................

Additional Risk Considerations ............................

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

PURCHASE AND SALE OF SHARES................................

How The Fund Values Its Shares.............................

How To Buy Shares..........................................

How To Exchange Shares.....................................

How To Sell Shares.........................................

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

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

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

<PAGE>

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 Health Care Fund, Inc. This Summary describes the Fund's
objective, 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
in this Prospectus. Please be sure to read this additional
information BEFORE you invest.

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.

<PAGE>

OBJECTIVE:

The Fund's investment objective is capital appreciation and,
secondarily, current income.

PRINCIPAL INVESTMENT STRATEGIES:

Under normal circumstances the Fund invests at least 65% of the
value of its total assets in securities issued by companies
principally engaged in the health care and health sciences
industries ("Health Care Industries") (companies principally
engaged in the discovery, development, provision, production or
distribution of products and services that relate to the
diagnosis, treatment and prevention of diseases or other medical
disorders). The Fund expects under normal circumstances to
invest primarily in the equity securities of U.S. companies. The
Fund may invest up to 40% of its total assets in securities of
non-U.S. companies (i.e., foreign securities). The Fund may
invest in both new, smaller or less-seasoned companies as well as
in larger, established companies in the Health Care
Industries.

PRINCIPAL RISKS:

Among the principal risks of investing in the Fund are market
risk and sector risk. Unlike many other equity funds, the Fund
invests in the securities of companies principally engaged in the
Health Care Industries. As a result, certain economic conditions
and market changes that affect those industries may have a more
significant effect, either negative or positive, on the Fund's
net asset value than on the value of a more broadly diversified
fund. For example, the Fund's share price could be affected by
changes in competition, legislation or government regulation,
government funding, product liability and other litigation, the
obsolescence or development of products, or other factors
specific to the health care and health sciences industries. The
Fund's investments in foreign securities have foreign risk and
currency risk. The Fund may invest in small- to mid-
capitalization companies and such investments have capitalization
risk and, accordingly, may be more volatile than investments in
large-cap companies. The Fund may at times use certain types of
investment derivatives such as forwards. The use of these
techniques involves special risks that are discussed in this
Prospectus. The Fund is not a complete investment program and
investors should invest only a portion of their assets in the
Fund.

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

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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%
during the 1st during the
year, decreasing 1st year,
1.0% annually to 0% thereafter
0% after the
4th year*

Exchange Fee None None None

* Class B Shares automatically convert to Class A Shares after
8 years.

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

<TABLE>
<CAPTION> OPERATING EXPENSES
EXAMPLES (B)
- -------------------------------------------------------------- ------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++
<C> <C> <C> <C> <C> <C> <C>

Management fees .95% .95% .95% After 1 Yr. $ $ $ $ $
Rule 12b-1 fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $

Other expenses [ ]% [ ]% [ ]%
----- ----- -----
Total Fund operating
expenses [ ]% [ ]% [ ]%
===== ===== =====
Waiver and/or expense
reimbursement (a) [ ]% [ ]% [ ]%
Net expenses 2.50% 3.20% 3.20%
===== ===== =====
</TABLE>

+ Assumes redemption at the end of period.
++ Assumes no redemption at end of period.
(a) Alliance has agreed to waive its management fees and/or to
bear expenses of the Fund through August 31, 2000 to the
extent necessary to prevent total Fund operating expenses, on
an annualized basis, from exceeding the net expenses
reflected in this table. Thereafter, the fees waived and
expenses borne by Alliance during this period are
reimbursable by the Fund through August 31, 2002, but no
reimbursement payment will be made that would cause the
Fund's total annualized operating expenses to exceed the net
expenses reflected in the table or cause the total of the
payments to exceed the Fund's total initial organizational
and offering expenses.
(b) These examples assume that Alliance's agreement to waive
management fees and/or to bear operating expenses is not
extended beyond its initial period. If this agreement is

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extended and net expenses are therefore reduced, the expenses
for the 3-year period would be lower.

<PAGE>

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.

HEALTH CARE INDUSTRIES include the health care and health
sciences industries. These industries are principally engaged in
the discovery, development, provision, production or distribution
of products and services that relate to the diagnosis, treatment
and prevention of diseases or other medical disorders. Companies
in these fields include, but are not limited to, pharmaceutical
firms; companies that design, manufacture or sell medical
supplies, equipment and support services; companies that operate
hospitals and other health care facilities; and companies engaged
in medical, diagnostic, biochemical, biotechnological or other
health sciences research and development.

NON-U.S. COMPANIES are entities (i) that are organized under the
laws of a country other than the United States and have their
principal office in a country other than the United States, or
(ii) the equity securities of which are traded principally in
securities markets outside the United States.

RULE 144A SECURITIES are securities that may be resold pursuant
to Rule 144A under the Securities Act.

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

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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.

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 INVESTMENT
PRACTICES following this section.

- -- The description of the Fund's risks may include risks
discussed in the RISK/RETURN SUMMARY above. 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.

- -- 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.

<PAGE>

INVESTMENT OBJECTIVE, POLICIES AND RISK CONSIDERATIONS

The Fund's investment objective is capital appreciation and,
secondarily, current income.

HOW THE FUND PURSUES ITS OBJECTIVE
In seeking to achieve its investment objective, under normal
circumstances the Fund invests at least 65% of the value of its
total assets in securities issued by companies principally
engaged in Health Care Industries.

The Fund seeks investments in both new, smaller and less seasoned
companies and well-known, larger and established companies.
Whenever possible, investments in new, smaller or less seasoned
companies will be made with a view to benefiting from the
development and growth of new products and markets in Health Care
Industries. Investments in these companies may offer more reward
but may also entail more risk than is generally true of larger,
established companies.

While the Fund anticipates that a substantial portion of its
portfolio will be invested in the securities of U.S. companies,
the Fund is not limited to investing in such securities. Many
companies in the forefront of world medical technology are
located outside the United States, primarily in Japan and Europe.
Accordingly, the Fund may invest up to 40% of the value of its
net assets in foreign securities, including up to 25% in issuers
located in any one foreign country. However no more than 5% of
the value of the Fund's total net assets may be invested in
securities of issuers located in emerging market countries. All
percentage limitations are applied at the time of investment.

The Fund seeks to take advantage of capital appreciation
opportunities identified by the Fund's investment adviser in
emerging technologies and services in Health Care Industries by
investing in companies which are expected to profit from the
development of new products and services for these industries.
Examples of such emerging technologies and services include:

- -- New methods for administering drugs to a patient, such as
surgical implants and skin patches which enhance the
effectiveness of the drugs and may reduce patient side
effects by delivering the drugs in precise quantities over a
prolonged time period or by evading natural body defense
mechanisms which delay the effect of the drugs;

- -- Developments in medical imaging such as the application of
computer technology to the output of conventional x-ray
systems which allow for cross-sectional images of soft tissue
and organs (CT scanning) and continuous imaging (digital

<PAGE>

radiography) as well as more advanced nuclear medicine,
ultrasound and magnetic resonance imaging (MRI);

- -- Advances in minimally invasive surgical techniques, such as
angioplasty and related technologies for diseased blood
vessels and laser beams for the eye, general and
cardiovascular surgery, which provide greater effectiveness,
lower cost and improved patient safety than more traditional
surgical techniques;

- -- New therapeutic pharmaceutical compounds that control or
alleviate disease, including prescription and
non-prescription drugs and treatment regimes for conditions
not controlled, alleviated or treatable by existing
medications or treatments and chemical or biological
pharmaceuticals for use in diagnostic testing;

- -- Advances in molecular biology such as signal transduction,
cell adhesion and cell to cell communication which have
facilitated a rapid increase in new classes of drugs. These
have included monoclonal antibodies, bio-engineered proteins
and small molecules from novel synthesis and screening
techniques;

- -- Genomics, which allows scientists to better understand the
causes of human diseases, and in some cases has led to the
manufacture of proteins for use as therapeutic drugs;

- -- Gene chips and other equipment that provides for the
screening, diagnosis and treatment of diseases;

- -- The introduction of large scale business efficiencies to the
management of nursing homes, acute and specialty hospitals as
well as free-standing outpatient facilities, surgical centers
and rehabilitation centers;

- -- Adaptations of microprocessors for use by pharmaceutical
manufacturers, hospitals, doctors and others in the Health
Care Industries to increase distribution efficiency;

- -- Health care delivery organizations which combine cost
effectiveness with high quality medical care and help address
the rising cost of health care; and

- -- The sale of prescription drugs and other pharmaceuticals to
consumers via the Internet.

The Fund's portfolio may also include companies that provide
traditional products and services currently in use in Health Care
Industries and that are likely to benefit from any increases in
the general demand for such products and services. The following

<PAGE>

are examples of the products and services that may be offered by
companies in Health Care Industries:

- -- DRUGS OR PHARMACEUTICALS, including both ethical and
proprietary drugs, drug administration products and
pharmaceutical components used in diagnostic testing;

- -- MEDICAL EQUIPMENT AND SUPPLIES, including equipment and
supplies used by health service companies and individual
practitioners, such as electronic equipment used for
diagnosis and treatment, surgical and medical instruments and
other products designed especially for the Health Care
Industries;

- -- HEALTH CARE SERVICES, including the services of clinical
testing laboratories, hospitals, nursing homes, clinics,
centers for convalescence and rehabilitation, and products
and services for home health care; and

- -- MEDICAL RESEARCH, including scientific research to develop
drugs, processes or technologies with possible commercial
application in Health Care Industries.

The Fund also may:

- -- make SECURED LOANS OF SECURITIES of up to 20% of its total
assets;

- -- enter into REPURCHASE AGREEMENTS;

- -- purchase or sell FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS;
and

- -- enter into FORWARD COMMITMENTS for the purchase or sale of
securities.

RISK CONSIDERATIONS
The value of an investment in the Fund changes with the values of
the Fund's investments. Many factors can affect those values.
In the following summary, we describe the principal risks that
may affect the Fund's portfolio as a whole. The Fund could be
subject to additional principal risks because the types of
investments made by the Fund can change over time. This
Prospectus has additional descriptions of investments and risks
that appear in bold type below under DESCRIPTION OF INVESTMENT
PRACTICES or ADDITIONAL RISK CONSIDERATIONS. This section also
includes more information about the Fund, its investments, and
related risks. Among the principal risks of investing in the Fund
are:

<PAGE>

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

- -- SECTOR RISK This is the risk of investments in a particular
industry sector. Market or economic factors affecting the
Health Care Industries sector could have a major effect,
either negative or positive, on the value of the Fund's
investments.

- -- 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 in that country. To
the extent the Fund invests a substantial amount of its
assets in a particular country, your investment has the risk
that market changes or other events affecting that country,
including political instability and unpredictable economic
conditions, may have a particularly significant effect on the
Fund's net asset value.

- -- 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.

- -- CAPITALIZATION RISK This is the risk of investments in small-
to mid-capitalization companies. Investments in small- to
mid-cap companies may be more volatile than large-cap
companies. In addition, the Fund's investments in smaller
capitalization stocks may have additional risks because these
companies often have limited product lines, markets, or
financial resources.

- -- 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

<PAGE>

guarantee that its techniques will produce the intended
result.

DESCRIPTION OF INVESTMENT PRACTICES

This section describes the investment practices of the Fund and
risks associated with these practices. Unless otherwise noted,
the Fund's use of any of these practices was specified in the
previous section.

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

When forward commitment transactions are negotiated, the price is
fixed at the time the commitment is made, but delivery and
payment for the securities take place at a later date. Normally,
the settlement date occurs within two months after the
transaction, but the Fund may negotiate settlements beyond two
months. Securities purchased or sold under a forward commitment
are subject to market fluctuation, and no interest or dividends
accrue to the purchaser prior to the settlement date.

When-issued securities and forward commitments may be sold prior
to the settlement date, but the Fund enters into when-issued and
forward commitments only with the intention of actually receiving
securities or delivering them, as the case may be. If the Fund
chose to dispose of the right to acquire a when-issued security
prior to its acquisition or dispose of its right to deliver or
receive against a forward commitment, it may realize a gain or
incur a loss. Any significant commitment of Fund assets to the
purchase of securities on a "when, as and if issued" basis may
increase the volatility of the Fund's net asset value. No forward
commitments will be entered into if, as a result, the Fund's
aggregate commitments under the transactions would be more than
30% of its total assets. In the event the other party to a
forward commitment transaction were to default, the Fund might
lose the opportunity to invest money at favorable rates or to
dispose of securities at favorable prices.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may
purchase or sell forward foreign currency exchange contracts to
minimize the risk of adverse changes in the relationship between
the U.S. Dollar and other currencies. A forward contract is an
obligation to purchase or sell a specific currency for an agreed
price at a future date, and is individually negotiated and
privately traded.

<PAGE>

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

ILLIQUID SECURITIES. The Fund will limit its investment in
illiquid securities to no more than 10% 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

<PAGE>

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 generally will not be treated as
"illiquid" for purposes of this limit on investments.

The Fund may not be able to readily sell securities for which
there is no ready market. 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 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 Fund may lend not more than half of
the securities representing each holding of the portfolio and
will not permit a loan to remain outstanding for more than 30
days. The value of the securities loaned will not exceed 20% of
the value of the Fund's total net assets at the time a loan is
made. The risk in lending portfolio securities, as with other
extensions of credit, consists of the possible failure of the
borrower to return the loaned securities, the possible inadequacy
of the collateral given reductions in the market value of the
loaned securities, and the possible loss of rights in the
collateral should the borrower fail financially. In determining
whether to lend securities to a particular borrower, Alliance
will consider all relevant facts and circumstances, including the
creditworthiness of the borrower. While securities are on loan,
the borrower will pay the Fund any income 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.

REPURCHASE AGREEMENTS. A repurchase agreement arises when a buyer
purchases a security and simultaneously agrees to resell it to

<PAGE>

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.

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.

The Fund's ability to dispose of its positions in forward
contracts depends on the availability of liquid markets in such
instruments. 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 forward contracts. The lack of a
secondary market may reduce the Fund's ability to obtain the
maximum value from the use of forward contracts. Therefore, no
assurance can be given that the Fund will be able to utilize
these instruments effectively.

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 invest in certain types of short-term, liquid, high-

<PAGE>

grade or high-quality debt securities. These securities may
include U.S. Government securities, qualifying bank deposits,
money market instruments, prime commercial paper and other types
of short-term debt securities, including notes and bonds. Such
securities may also include short-term, foreign-currency
denominated securities of the type mentioned above issued by
foreign governmental entities, companies and supranational
organizations. While the Fund is investing for temporary
defensive purposes, it may not meet its investment objective.

ADDITIONAL RISK CONSIDERATIONS

EFFECTS OF BORROWING. The Fund may, when Alliance believes that
market conditions are appropriate, borrow in order to take full
advantage of available investment opportunities. The Fund may,
although it has no present intention of doing so, 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.

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

<PAGE>

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
number of companies representing a small number of industries.
Consequently, the Fund, whose investment portfolio includes
foreign securities, may experience greater price volatility and
significantly lower liquidity than a portfolio invested solely in
equity securities of U.S. companies. These markets may be subject
to greater influence by adverse events generally affecting the
market, and by large investors trading significant blocks of
securities, than is usual in the United States. Securities
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, and 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

<PAGE>

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
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.

YEAR 2000. Many computer systems and applications in use today
process transactions using two-digit date fields for the year of
the transaction, rather than the full four digits. If these
systems are not modified or replaced, transactions occurring
after 1999 could be processed as year "1900," which could result
in processing inaccuracies and computer system failures at or
after the year 2000. This is commonly known as the Year 2000
problem. The Fund and its major service providers, including
Alliance, utilize a number of computer systems and applications
that have been either developed internally or licensed from
third-party suppliers. In addition, the Fund and its major
service providers, including Alliance, are dependent on third-
party suppliers for certain systems applications and for

<PAGE>

electronic receipt of information critical to their business.
Should any of the computer systems employed by the Fund or its
major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant
negative impact on the Fund's operations and the services that
are provided to the Fund's shareholders. To the extent that the
operations of issuers of securities held by the Fund are impaired
by the Year 2000 problem, the value of the Fund's shares may be
materially affected. In addition, for the Fund's investments in
foreign markets, it is possible that foreign companies and
markets will not be as prepared for Year 2000 as domestic
companies and markets.

The Year 2000 issue is a high priority for the Fund and Alliance.
The Fund has been advised that, during 1997, Alliance began a
formal Year 2000 initiative which established a structured and
coordinated process to deal with the Year 2000 issue. As part of
its initiative, Alliance established a Year 2000 project office
to manage the Year 2000 initiative, focusing on both information
technology and non-information technology systems. Alliance has
also retained the services of a number of consulting firms which
have expertise in advising and assisting with regard to Year 2000
issues. Alliance reports that by June 30, 1998 it had completed
its inventory and assessment of its domestic and international
computer systems and applications, identified mission critical
systems and non-mission critical systems and determined which of
these systems were not Year 2000 compliant. All third-party
suppliers of mission critical computer systems and applications
have been contacted to verify whether their systems and
applications will be Year 2000 compliant and their responses are
being evaluated. Substantially all of those contacted have
responded and approximately 90% have informed Alliance that their
systems and applications are or will be Year 2000 compliant.
Alliance will seek alternative solutions or third-party suppliers
for all suppliers who do not furnish a satisfactory response by
June 30, 1999. The same process is being performed for non-
mission critical systems and is estimated to be completed by June
30, 1999. Alliance had remediated, replaced or retired all of
its non-compliant mission critical systems and applications that
can affect the Fund. After each system has been remediated, it
is tested with 19XX dates to determine if it still performs its
intended business function correctly. Next, each system
undergoes a simulation test using dates occurring after December
31, 1999. Inclusive of the replacement and retirement of some of
its systems, Alliance has completed these testing phases for
approximately 89% of non-mission critical systems. Integrated
systems tests will then be conducted to verify that the systems
will continue to work together. Full integration testing of all
mission critical and non-mission critical systems is estimated to
be completed by June 30, 1999. Testing of interfaces with third-
party suppliers has begun and will continue throughout 1999. The

<PAGE>

same process is being performed for non-mission critical systems
and is estimated to be completed by June 30, 1999. Alliance
reports that it has completed an inventory of its facilities and
related technology applications and has begun to evaluate and
test these systems. Alliance reports that it anticipates that
these systems will be fully operable in the year 2000. Alliance,
with the assistance of a consulting firm, is developing Year 2000
specific contingency plans with emphasis on mission critical
functions. These plans seek to provide alternative methods of
processing in the event of a failure that is outside Alliance's
control. The estimated date for the completion of these plans is
June 30, 1999.

There are many risks associated with Year 2000 issues, including
the risks that the computer systems and applications used by the
Fund and its major service providers, will not operate as
intended and that the systems and applications of third-party
providers to the Fund and its service providers will not be Year
2000 compliant. Likewise there can be no assurance the
compliance schedules outlined above will be met or that the
actual cost incurred will not exceed current cost estimates.
Should the significant computer systems and applications used by
the Fund or its major service providers, or the systems of their
important third-party suppliers, be unable to process date
sensitive information accurately after 1999, the Fund and its
service providers may be unable to conduct their normal business
operations and to provide shareholders with required services.
In addition, the Fund and its service providers may incur
unanticipated expenses, regulatory actions and legal liabilities.
The Fund and Alliance cannot determine which risks, if any, are
most reasonably likely to occur or the effects of any particular
failure to be Year 2000 compliant. Certain statements provided
by Alliance in this section entitled "Year 2000," as such
statements relate to Alliance, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. To the fullest extent permitted by law, the
foregoing Year 2000 discussion is a "Year 2000 Readiness
Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).

MANAGEMENT OF THE FUND

INVESTMENT ADVISER AND FUND MANAGER
The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, New York 10105.
Alliance is a leading international investment adviser managing
client accounts with assets as of March 31, 1999 totaling more
than $301 billion (of which approximately $127 billion
represented assets of investment companies). As of March 31,
1999, Alliance managed retirement assets for many of the largest
public and private employee benefit plans (including 30 of the

<PAGE>

nation's FORTUNE 100 companies), for public employee retirement
funds in 32 out of the 50 states, for investment companies, and
for foundations, endowments, banks and insurance companies
worldwide. The 54 registered investment companies managed by
Alliance, comprising 120 separate investment portfolios,
currently have more than four million shareholder accounts.

The person primarily responsible for the day-to-day management of
the Fund is Norman Fidel. Mr. Fidel is a Senior Vice President of
Alliance Capital Management Corporation with which he has been
associated since prior to 1994.

Under the Advisory Agreement, Alliance receives a fee at an
annualized rate of .95% of the Fund's average daily net assets.
The fee will be accrued daily and paid monthly.

Norman Fidel, the portfolio manager of the Fund, is also the
person who has been primarily responsible for the day-to-day
management of the ACM Fund since 1988. Mr. Fidel manages
approximately $950 million of Health Care Industries assets,
including approximately $330 million of assets in the ACM Fund as
of June 30, 1999.

The ACM Fund is not subject to certain limitations,
diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which the Fund, as a registered
investment company, is subject and which, if applicable to the
ACM Fund, may have adversely affected the performance results of
the ACM Fund.

Set forth below are performance data provided by Alliance
relating to the Class AX shares of the ACM Fund since 1988, when
Mr. Fidel began managing of that fund. Performance data are
shown annually and cumulatively through June 30, 1999.

The performance data are net of all fees imposed by the ACM Fund.
The performance data have not been adjusted to reflect the fees
that will be payable by the Fund, which, at comparable asset
levels, may be lower than the fees imposed on the ACM Fund and
may result in a lower expense ratio and higher returns for the
Fund. Expenses associated with the distribution of Class A, Class
B and Class C shares of the Fund in accordance with the plan

<PAGE>

adopted by the Fund's Board of Directors pursuant to Rule 12b-1
under the 1940 Act also are not reflected in the data below
relating to the ACM Fund. See "Fees and Expenses of the Fund."
The performance data have also not been adjusted for corporate or
individual taxes, if any, payable by the ACM Fund
shareholders.

The following performance data are provided solely to illustrate
Mr. Fidel's performance in managing the ACM Fund. Investors
should not rely on the following performance data of the ACM Fund
as an indication of future performance of the Fund. The composite
investment performance for the periods presented may not be
indicative of future rates of return. Other methods of computing
investment performance may produce different results, and the
results for different periods may vary.

ACM International Health Care Fund

Total Returns

1988 21.82%

1989 46.75%

1990 25.96%

1991 83.07%

1992 -10.46%

1993 -1.38%

1994 13.84%

1995 46.49%

1996 2.18%

1997 23.07%

1998 24.29%

1999* - 6.24%

______________________

* Through June 30, 1999 (unannualized)

Cumulative Total Return of ACM International Health Care Fund
from December 31, 1987 to June 30, 1999: 789.68%

<PAGE>

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 accepted 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.

Minimum investment amounts are:

-- Initial: $250
-- Subsequent: $ 50
-- Automatic Investment Program: $ 25

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 this
regard, 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.

<PAGE>

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
August 24, 1999. The Fund will begin its continuous offering of
shares on August 25, 1999. During the Fund's initial offering
period, Class A shares will be offered to the public at their net
asset value of $10.00 per share plus a sales charge which will
vary with the size of the purchase as shown in the foregoing
table and as described in the Statement of Additional
Information. The maximum offering price of the Class A shares
during the initial offering period is $10.44 per share. During
the initial offering, 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 agent, 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
will be sold to subscribers on the purchase date, which is
expected to occur not later than August 27, 1999.

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 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 NYSE 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, you cannot redeem any
portion of it until the Fund is reasonably satisfied that the
check or electronic funds transfer has been collected (which may
take up to 15 days).

<PAGE>

- -- 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
P.O. Box 1520
Secaucus, N.J. 07906-1520
800-221-5672

- - 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 may 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.

<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

The income dividends and capital gains distribution, 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 net asset
value 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 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 in connection with the reinvestment
of dividends or capital gains distributions. Cash dividends may
be paid in check, or at your election, electronically via the ACH
network. There is no sales or other charge on the reinvestment
of Fund distributions.

If you receive an income dividend or capital gains distribution
in cash you may, within 120 days following the date of its
payment, reinvest the dividend or distribution in additional
shares of 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.

The Fund expects that distributions will consist either of net
income or long-term capital gains. 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 capital gains distributions may be taxable to you as
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. The
final determination of the amount of the Fund's return of capital
distributions for the period will be made after the end of each
calendar year.

<PAGE>

possible, to operate so as to meet the requirements of the Code
to "pass through" to the Fund's shareholders credits for foreign
income taxes paid (or to permit shareholders to claim a deduction
for such foreign taxes), but there can be no assurance that the
Fund will be able to do so. Furthermore, a shareholder's ability
to claim a foreign tax credit or deduction in respect of foreign
taxes paid by the Fund may be subject to certain limitations
imposed by the Code, as a result of which a shareholder may not
be permitted to claim a full credit or deduction for the amount
of such taxes.

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. See the Fund's SAI for
a further explanation of these tax issues.

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

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 with an initial sales
charge as follows.

<PAGE>

INITIAL SALES CHARGE

COMMISSION
TO DEALER/
AGENT AS
AS % OF AS % OF % OF
NET AMOUNT OFFERING OFFERING
AMOUNT PURCHASED INVESTED PRICE 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, 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.

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.

<PAGE>

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 CHARGE OR RULE 12B-1 FEES. The Fund has
adopted a plan under SEC 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:

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.

<PAGE>

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.

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 such financial representative. Such financial
intermediaries may also impose requirements with respect to the
purchase, sale, or exchange of shares that are different from, or
in addition to, those imposed by the Fund, including requirements
as to the minimum initial and subsequent investment amounts.

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

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.

<PAGE>

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
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.

<PAGE>

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, 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:

In Person: at the Commission's Public Reference Room
in Washington, D.C.

By Phone: 1-800-SEC-0330

By Mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

On the Internet: www.sec.gov

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

SEC File Number: 811-09329

<PAGE>

ALLIANCE HEALTH CARE FUND

ADVISOR CLASS PROSPECTUS AND APPLICATION

July 26, 1999

ALLIANCE CAPITAL [LOGO]

<PAGE>

TABLE OF CONTENTS

Page

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

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

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

DESCRIPTION OF THE FUND....................................

Investment Objective, Policies and Risk Considerations.....

Description of Investment Practices........................

Additional Risk Considerations ............................

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

PURCHASE AND SALE OF SHARES................................

How The Fund Values Its Shares.............................

How To Buy Shares..........................................

How To Exchange Shares.....................................

How To Sell Shares.........................................

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

CONVERSION FEATURE.........................................

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

<PAGE>

RISK/RETURN SUMMARY

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.

<PAGE>

OBJECTIVE:

The Fund's investment objective is capital appreciation and,
secondarily, current income.

PRINCIPAL INVESTMENT STRATEGIES:

PRINCIPAL RISKS:

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

<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)

ADVISOR CLASS SHARES
Maximum Front-End or Deferred Sales None
Charge (Load) (as a percentage of
original purchase price or
redemption proceeds, whichever is
lower)

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

The Example is to help you compare the cost of investing in the
Fund with the cost of investing in other funds. It assumes 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. It
also assumes 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.

OPERATING EXPENSES EXAMPLE (b)
- -----------------------------------------------------------------

Management fees .95% After 1 year $
12b-1 fees None After 3 years $
Other expenses [ ]%
-----
Total Fund operating expenses [ ]%
=====
Waiver and/or expense
reimbursement (a) [ ]%
Net expenses 2.20%
=====

(a) Alliance has agreed to waive its management fees and/or to
bear expenses of the Fund through August 31, 2000 to the
extent necessary to prevent total Fund operating expenses, on
an annualized basis, from exceeding the net expenses
reflected in this table. Thereafter, the fees waived and
expenses borne by Alliance during this period are
reimbursable by the Fund through August 31, 2002, but no
reimbursement payment will be made that would cause the
Fund's total annualized operating expenses to exceed the net
expenses reflected in the table or cause the total of the

<PAGE>

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

(b) This example assumes that Alliance's agreement to waive
management fees and/or to bear operating expenses is not
extended beyond its initial period. If this agreement is
extended and net expenses are therefore reduced, the expenses
for the 3-year period would be lower.

<PAGE>

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.

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 under the Securities Act.

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

<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.

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

DESCRIPTION OF THE FUND

Please note:

<PAGE>

INVESTMENT OBJECTIVE, POLICIES AND RISK CONSIDERATIONS

The Fund's investment objective is capital appreciation and,
secondarily, current income.

HOW THE FUND PURSUES ITS OBJECTIVE

In seeking to achieve its investment objective, under normal
circumstances the Fund invests at least 65% of the value of its
total assets in securities issued by companies principally
engaged in Health Care Industries.

<PAGE>

radiography) as well as more advanced nuclear medicine,
ultrasound and magnetic resonance imaging (MRI);

- -- Genomics, which allows scientists to better understand the
causes of human diseases, and in some cases has led to the
manufacture of proteins for use as therapeutic drugs;

- -- Gene chips and other equipment that provides for the
screening, diagnosis and treatment of diseases;

- -- Adaptations of microprocessors for use by pharmaceutical
manufacturers, hospitals, doctors and others in the Health
Care Industries to increase distribution efficiency;

- -- Health care delivery organizations which combine cost
effectiveness with high quality medical care and help address
the rising cost of health care; and

- -- The sale of prescription drugs and pharmaceuticals to
consumers via the Internet.

<PAGE>

are examples of the products and services that may be offered by
companies in Health Care Industries:

DRUGS OR PHARMACEUTICALS, including both ethical and proprietary
drugs, drug administration products and pharmaceutical components
used in diagnostic testing;

- - HEALTH CARE SERVICES, including the services of clinical
testing laboratories, hospitals, nursing homes, clinics,
centers for convalescence and rehabilitation, and products
and services for home health care; and

- -- MEDICAL RESEARCH, including scientific research to develop
drugs, processes or technologies with possible commercial
application in Health Care Industries.

The Fund also may:

- -- make SECURED LOANS OF SECURITIES of up to 20% of its total
assets;

- -- enter into REPURCHASE AGREEMENTS;

- -- purchase or sell FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS;
and

- -- enter into FORWARD COMMITMENTS for the purchase or sale of
securities.

<PAGE>

- -- 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.

<PAGE>

guarantee that its techniques will produce the intended
result.

DESCRIPTION OF INVESTMENT PRACTICES

<PAGE>

price at a future date, and is individually negotiated and
privately traded.

<PAGE>

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.

<PAGE>

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.

<PAGE>

TEMPORARY DEFENSIVE POSITION. For temporary defensive purposes,
the Fund may invest in certain types of short-term, liquid, high-
grade or high-quality debt securities. These securities may
include U.S. Government securities, qualifying bank deposits,
money market instruments, prime commercial paper and other types
of short-term debt securities, including notes and bonds. Such
securities may also include short-term, foreign-currency
denominated securities of the type mentioned above issued by
foreign governmental entities, companies and supranational
organizations. While the Fund is investing for temporary
defensive purposes, it may not meet its investment objective.

ADDITIONAL RISK CONSIDERATIONS

<PAGE>

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.

<PAGE>

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.

<PAGE>

service providers, including Alliance, are dependent on third-
party suppliers for certain systems applications and for
electronic receipt of information critical to their business.
Should any of the computer systems employed by the Fund or its
major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant
negative impact on the Fund's operations and the services that
are provided to the Fund's shareholders. To the extent that the
operations of issuers of securities held by the Fund are impaired
by the Year 2000 problem, the value of the Fund's shares may be
materially affected. In addition, for the Fund's investments in
foreign markets, it is possible that foreign companies and
markets will not be as prepared for Year 2000 as domestic
companies and markets.

<PAGE>

be completed by June 30, 1999. Testing of interfaces with third-
party suppliers has begun and will continue throughout 1999. The
same process is being performed for non-mission critical systems
and is estimated to be completed by June 30, 1999. Alliance
reports that it has completed an inventory of its facilities and
related technology applications and has begun to evaluate and
test these systems. Alliance reports that it anticipates that
these systems will be fully operable in the year 2000. Alliance,
with the assistance of a consulting firm, is developing Year 2000
specific contingency plans with emphasis on mission critical
functions. These plans seek to provide alternative methods of
processing in the event of a failure that is outside Alliance's
control. The estimated date for the completion of these plans is
June 30, 1999.

MANAGEMENT OF THE FUND

INVESTMENT ADVISER AND FUND MANAGER

The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, New York 10105.
Alliance is a leading international investment adviser managing
client accounts with assets as of March 31, 1999 totaling more
than $301 billion (of which approximately $127 billion

<PAGE>

represented assets of investment companies). As of March 31,
1999, Alliance managed retirement assets for many of the largest
public and private employee benefit plans (including 30 of the
nation's FORTUNE 100 companies), for public employee retirement
funds in 32 out of the 50 states, for investment companies, and
for foundations, endowments, banks and insurance companies
worldwide. The 54 registered investment companies managed by
Alliance, comprising 120 separate investment portfolios,
currently have more than four million shareholder accounts.
The person primarily responsible for the day-to-day management of
the Fund is Norman Fidel. Mr. Fidel is a Senior Vice President of
Alliance Capital Management Corporation with which he has been
associated since prior to 1994.

Under the Advisory Agreement, Alliance receives a fee at an
annualized rate of .95% of the Fund's average daily net assets.
The fee will be accrued daily and paid monthly.

PERFORMANCE OF A SIMILARLY MANAGED FUND. Alliance is the
investment adviser of an investment company organized and
operated under the laws of the Grand Duchy of Luxembourg, ACM
International Health Care Fund (the "ACM Fund"), that has
substantially the same investment objective and policies as those
of the Fund. The ACM Fund has been managed in accordance with
substantially the same investment strategies and techniques as
are intended to be employed with respect to the Fund.
Norman Fidel, the portfolio manager of the Fund, is also the
person who has been primarily responsible for the day-to-day
management of the ACM Fund since 1988. Mr. Fidel manages
approximately $950 million of Health Care Industries assets,
including approximately $330 million of assets in the ACM Fund as
of June 30, 1999.

Set forth below are performance data provided by Alliance
relating to the Class AX shares of the ACM Fund since 1998, when
Mr. Fidel began managing of that fund. Performance data are
shown annually and cumulatively through June 30, 1999.

<PAGE>

B and Class C shares of the Fund in accordance with the plan
adopted by the Fund's Board of Directors pursuant to Rule 12b-1
under the 1940 Act also are not reflected in the data below
relating to the ACM Fund. See "Fees and Expenses of the Fund."
The performance data have also not been adjusted for corporate or
individual taxes, if any, payable by the ACM Fund shareholders.

ACM International Health Care Fund

Total Returns
1988 21.82%
1989 46.75%
1990 25.96%
1991 83.07%
1992 -10.46%
1993 -1.38%
1994 13.84%
1995 46.49%
1996 2.18%
1997 23.07%
1998 24.29%
1999* - 6.24%

______________________

* Through June 30, 1999 (unannualized)

Cumulative Total Return of ACM International Health Care Fund
from December 31, 1987 to June 30, 1999: 789.68%

PURCHASE AND SALE OF SHARES

<PAGE>

purchase, sale, or exchange of shares is priced at the next NAV
calculated after your order is accepted by the Fund.

HOW TO BUY SHARES
You may purchase Advisor Class shares through your financial
representative at NAV. Advisor Class shares are not subject to
any initial or contingent sales charges or distribution expenses.
You may purchase and hold Advisor Class shares solely:

- -- through accounts established under a fee-based program,
sponsored and maintained by a registered broker-dealer or
other financial intermediary and approved by the Fund's
principal underwriter, AFD;

- -- through a self-directed defined contribution employee benefit
plan (e.g., a 401(k) plan) that has at least 1,000
participants or $25 million in assets;

- -- by investment advisory clients of, and certain other persons
associated with, Alliance and its affiliates or the Fund; and

- -- through 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 AFD and clients of such
registered investment advisers or financial intermediaries
whose accounts are linked to the master account of such
investment adviser or financial intermediary on the books of
such approved broker or agent.

Generally, a fee-based program must charge an asset-based or
other similar fee and must invest at least $250,000 in Advisor
Class shares to be approved by AFD for investment in Advisor
Class shares. The Fund's Statement of Additional Information has
more detailed information about who may purchase and hold Advisor
Class shares.

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

HOW TO EXCHANGE SHARES
You may exchange your Advisor Class shares for Advisor Class
shares of other Alliance Mutual Funds. Exchanges of Advisor
Class shares are made at the next-determined NAV without any
sales or service charge. 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.

<PAGE>

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 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, you cannot redeem any portion of it
until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up
to 15 days). If you are in doubt about what procedures or
documents are required by your fee-based program or employee
benefit plan to sell your shares, you should contact your
financial representative.

- -- Selling Shares Through Your Financial Representative

Your financial representative 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. Your financial
representative 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
P.O. Box 1520
Secaucus, N.J. 07906-1520
800-221-5672

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.

<PAGE>

- -- If you have selected electronic funds transfer in your
Shareholder Application, the redemption proceeds may 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.

OTHER
If you are a Fund shareholder through an account established
under a fee-based program, your fee-based program may impose
requirements with respect to the purchase, sale, or exchange of
Advisor Class shares of the Fund that are different from those
described in this Prospectus. A transaction, service,
administrative or other similar fee may be charged by your
broker-dealer, agent, financial intermediary or other financial
representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.
Such financial intermediaries may also impose requirements with
respect to the purchase, sale or exchange of shares that are
different from, or in addition to, those imposed by the Fund,
including requirements as to the minimum initial and subsequent
investment amounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

If you receive an income dividend or capital gains distribution
in cash you may, within 120 days following the date of its

<PAGE>

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.

Investment income received by the Fund from sources within
foreign countries may be subject to foreign income taxes withheld
at the source. To the extent that the Fund is liable for foreign
income taxes withheld at the source, the Fund intends, if
possible, to operate so as to meet the requirements of the Code
to "pass through" to the Fund's shareholders credits for foreign
income taxes paid (or to permit shareholders to claim a deduction
for such foreign taxes), but there can be no assurance that the
Fund will be able to do so. Furthermore, a shareholder's ability
to claim a foreign tax credit or deduction in respect of foreign
taxes paid by the Fund may be subject to certain limitations
imposed by the Code, as a result of which a shareholder may not
be permitted to claim a full credit or deduction for the amount
of such taxes.

<PAGE>

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

CONVERSION FEATURE

CONVERSION
As described above, Advisor Class shares may be held solely
through certain fee-based program accounts, employee benefit
plans and registered investment advisory or other financial
intermediary relationships, and by investment advisory clients
of, and certain persons associated with, Alliance and its
affiliates or the Fund. If a holder of Advisor Class shares
(i) ceases to participate in the fee-based program or plan, or to
be associated with an eligible investment advisor or financial
intermediary or (ii) is otherwise no longer eligible to purchase
Advisor Class shares (each a "Conversion Event"), then all
Advisor Class shares held by the shareholder will convert
automatically and without notice, to Class A shares of the Fund
during the calendar month following the month in which the Fund
is informed of the occurrence of the Conversion Event. The
failure of a shareholder or a fee-based program to satisfy the
minimum investment requirements to purchase Advisor Class shares
will not constitute a Conversion Event. The conversion would
occur on the basis of the relative NAV of the two classes and
without the imposition of any sales load, fee or other charge.

DESCRIPTION OF CLASS A SHARES
The Class A shares of the Fund have a distribution fee of .30%
under the Fund's Rule 12b-1 plan that allows the Fund to pay
distribution and service fees for the distribution and sale of
its shares. Because this fee is paid out of the Fund's assets,
Class A shares have a higher expense ratio and may pay lower
dividends and may have a lower NAV than Advisor Class shares.

GENERAL INFORMATION

<PAGE>

days. Shareholders will receive 60 days' written notice to
increase the account value before the account is closed.

<PAGE>

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)

You may request a free copy of the SAI, 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:

In Person: at the Commission's Public Reference Room
in Washington, D.C.

By Phone: 1-800-SEC-0330

By Mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

On the Internet: www.sec.gov

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

SEC File Number: 811-09329

<PAGE>

(LOGO) ALLIANCE HEALTH CARE FUND, INC.

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
July 26, 1999

_________________________________________________________________

This Statement of Additional Information is not a
prospectus but supplements and should be read in conjunction with
the Prospectus dated July 26, 1999 for Alliance Health Care Fund,
Inc. (the "Fund") that offers the Class A, Class B and Class C
shares of the Fund and the Prospectus dated July 26, 1999 that
offers the Advisor Class shares of the Fund (the "Advisor Class
Prospectus" and, together with the Prospectus for the Fund that
offers the Class A, Class B, and Class C shares of the Fund, 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....................................
Financial Statement and Report of Independent
Accountants .........................................
Appendix A: Certain Employee Benefit Plans

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

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DESCRIPTION OF THE FUND
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Alliance Health Care Fund, Inc. (the "Fund") is a
diversified open-end management investment company. The Fund was
incorporated under the laws of the State of Maryland on April 30,
1999. The Fund's investment objective is "fundamental" 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 Fund's principal investment policies, practices and
risks are set forth in the Prospectus. The information set forth
below concerning the Fund's investment practices and policies
supplements the information in the Prospectus. Except as
otherwise noted, the Fund's investment policies described below
are not designated "fundamental policies" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act"),
and may be changed by the Directors of the Fund without
shareholder approval. However, the Fund will not change its
investment policies without contemporaneous written notice to
shareholders.

ADDITIONAL INVESTMENT POLICIES AND PRACTICES

The following information about the Fund's investment
policies and practices supplements the information set forth in
the Prospectus.

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

When forward commitment transactions are negotiated, the
price, which is generally expressed in yield terms, is fixed at
the time the commitment is made, but delivery and payment for the
securities take place at a later date, normally within four
months after the transaction, although delayed settlements beyond
four months may be negotiated. Securities purchased or sold
under a forward commitment are subject to market fluctuation, and

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no interest accrues to the purchaser prior to the settlement
date. At the time the Fund enters into a forward commitment, it
will record the transaction and thereafter reflect the value of
the security purchased or, if a sale, the proceeds to be
received, in determining its net asset value. Any unrealized
appreciation or depreciation reflected in such valuation of a
"when, as and if issued" security would be cancelled in the event
that the required conditions did not occur and the trade was
cancelled.

The use of forward commitments enables the Fund to
protect against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling
bond prices, the Fund might sell securities in its portfolio on a
forward commitment basis to limit its exposure to falling bond
prices. In periods of falling interest rates and rising bond
prices, the Fund might sell a security in its portfolio and
purchase the same or a similar security on a when-issued or
forward commitment basis, thereby obtaining the benefit of
currently higher cash yields. However, if Alliance Capital
Management L.P., the Fund's investment adviser (the "Adviser"),
were to forecast incorrectly the direction of interest rate
movements, the Fund might be required to complete such when-
issued or forward transactions at prices less favorable than
current market values.

The Fund's right to receive or deliver a security under
a forward commitment may be sold prior to the settlement date,
but the Fund will enter into forward commitments only with the
intention of actually receiving or delivering the securities, as
the case may be. To facilitate such transactions, the Fund's
custodian will maintain, in the separate account of the Fund,
liquid assets having value equal to, or greater than, any
commitments to purchase securities on a forward commitment basis.
If the Fund, however, chooses to dispose of the right to receive
or deliver a security subject to a forward commitment prior to
the settlement date of the transaction, it can incur a gain or
loss. In the event the other party to a forward commitment
transaction were to default, the Fund might lose the opportunity
to invest money at favorable rates or to dispose of securities at
favorable prices.

Although the Fund intends to make such purchases for
speculative purposes, purchases of securities on such bases may
involve more risk than other types of purchases. For example, by
committing to purchase securities in the future, the Fund
subjects itself to a risk of loss on such commitments as well as
on its portfolio securities. Also, the Fund may have to sell
assets that have been set aside in order to meet redemptions. In
addition, if the Fund determines it is advisable as a matter of
investment strategy to sell the forward commitment or when-issued

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or delayed delivery securities before delivery, the Fund may
incur a gain or loss because of market fluctuations since the
time the commitment to purchase such securities was made. Any
such gain or loss would be treated as a capital gain or loss and
would be treated for tax purposes as such. When the time comes
to pay for the securities to be purchased under a forward
commitment or on a when-issued or delayed delivery basis, the
Fund will meet its obligations from the then available cash flow
or the sale of securities, or, although it would not normally
expect to do so, from the sale of the forward commitment or when-
issued or delayed delivery securities themselves (which may have
a value greater or less than the Fund's payment obligation).

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund
may purchase or sell forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund
of adverse changes in the relationship between the U.S. Dollar
and foreign currencies. A forward contract is an obligation to
purchase or sell a specific currency for an agreed price at a
future date which is individually negotiated and privately traded
by currency traders and their customers.

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

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To the extent required by applicable law, 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 forward contracts entered into with respect to
position hedges and cross-hedges. If the value of the assets
placed in a separate account declines, additional liquid assets
will be placed in the account on a daily basis so that the value
of the account will equal the amount of the Fund's commitments
with respect to such contracts. As an alternative to maintaining
all or part of the separate account, the Fund may purchase a call
option permitting the Fund to purchase the amount of foreign
currency being hedged by a forward sale contract at a price no
higher than the forward contract price or the Fund may purchase a
put option permitting the Fund to sell the amount of foreign
currency subject to a forward purchase contract at a price as
high or higher than the forward contract price. In addition, the
Fund may use such other methods of "cover" as are permitted by
applicable law.

While these contracts are not presently regulated by the
Commodity Futures Trading Commission (the "CFTC"), the CFTC may
in the future assert authority to regulate forward contracts. In
such event the Fund's ability to utilize forward contracts in the
manner set forth in the Prospectus may be restricted.

The Fund will not speculate in forward currency
contracts. The Fund will only enter forward foreign currency
exchange contracts with counterparties that, in the opinion of
the Adviser, do not present undue credit risk. Generally, such
forward contracts will be for a period of less than three months.

Hedging against a decline in the value of a currency
does not eliminate fluctuations in the prices of portfolio
securities or prevent losses if the prices of securities decline.
These transactions also preclude the opportunity for gain if the
value of the hedge currency should rise. Moreover, it may not be
possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to
sell the currency at a price above the anticipated devaluation
level. Unanticipated changes in currency prices may result in
poorer overall performance for the Fund than if it had not
entered into such contracts. The matching of the increase in
value of a forward contract and the decline in the U.S. Dollar
equivalent value of the foreign currency-denominated asset that
is the subject of the hedge generally will not be precise. In
addition, the Fund may not always be able to enter into foreign
currency forward contracts at attractive prices and this will
limit the Fund's ability to use such contract to hedge or cross-
hedge its assets. Also, with regard to the Fund's use of cross-
hedges, there can be no assurance that historical correlations
between the movement of certain foreign currencies relative to

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the U.S. Dollar will continue. Thus, at any time poor
correlation may exist between movements in the exchange rates of
the foreign currencies underlying the Fund's cross-hedges and the
movements in the exchange rates of the foreign currencies in
which the Fund's assets that are the subject of such cross-hedges
are denominated.

LENDING OF PORTFOLIO SECURITIES. Consistent with
applicable regulatory requirements, the Fund may lend its
portfolio securities provided the loan is continuously secured by
cash, marketable securities issued or guaranteed by the U.S.
Government or its agencies, or a standby letter of credit issued
by qualified banks equal to no less than the market value,
determined daily, of the securities loaned. In lending its
portfolio securities, the Fund will require that interest or
dividends on securities loaned be paid to the Fund. Where voting
or consent rights with respect to loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in
whole or in part as may be appropriate, to permit it to exercise
such voting or consent rights if the exercise of such rights
involves issues having a material effect on the Fund's investment
in the securities loaned. Loans will be made only to firms
deemed by the Adviser to be of good standing and will not be made
unless, in the judgment of the Adviser, the consideration to be
earned from such loans would justify the risk. 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.

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

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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.

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.

Repurchase agreements may exhibit the characteristics of
loans by the Fund. During the term of the repurchase agreement,
the Fund retains the security subject to the repurchase agreement
as collateral securing the seller's repurchase obligation,
continually monitors on a daily basis the market value of the
security subject to the agreement and requires the seller to
deposit with the Fund collateral equal to any amount by which the
market value of the security subject to the repurchase agreement
falls below the resale amount provided under the repurchase
agreement.

ILLIQUID SECURITIES. The Fund will not invest more than
10% of its net assets in illiquid securities. For this purpose,
illiquid securities are securities restricted as to disposition
under Federal securities laws and include, among others,
(a) direct placements or other securities which are subject to
legal or contractual restrictions on resale or for which there is
no readily available market (e.g., trading in the security is
suspended or, in the case of unlisted securities, market makers
do not exist or will not entertain bids or offers), and
(b) repurchase agreements not terminable within seven days.
Securities that have legal or contractual restrictions on resale

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but have a readily available market are not deemed illiquid for
purposes of this limitation.

Historically, illiquid securities have included
securities subject to contractual or legal restrictions on resale
because they have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), securities which are
otherwise not readily marketable and repurchase agreements having
a maturity of longer than seven days. Securities which have not
been registered under the Securities Act are referred to as
private placements or restricted securities and are purchased
directly from the issuer or in the secondary market. Mutual
funds do not typically hold a significant amount of these
restricted or other illiquid securities because of the potential
for delays on resale and uncertainty in valuation. Limitations
on resale may have an adverse effect on the marketability of
portfolio securities and a mutual fund might be unable to dispose
of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty
satisfying redemptions within seven days. A mutual fund might
also have to register such restricted securities in order to
dispose of them resulting in additional expense and delay.
Adverse market conditions could impede such a public offering of
securities.

In recent years, however, a large institutional market
has developed for certain securities that are not registered
under the Securities Act including repurchase agreements,
commercial paper, foreign securities, municipal securities and
corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security
can be readily resold or on an issuer's ability to honor a demand
for repayment. The fact that there are contractual or legal
restrictions on resale to the general public or to certain
institutions may not be indicative of the liquidity of such
investments.

Rule 144A under the Securities Act allows a broader
institutional trading market for securities otherwise subject to
restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of
the Securities Act for resales of certain securities to qualified
institutional buyers. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted
securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at reasonable
prices. Rule 144A has already produced enhanced liquidity for
many restricted securities, and market liquidity for such
securities may continue to expand as a result of this regulation
and the consequent inception of the PORTAL System, which is an

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automated system for the trading, clearance and settlement of
unregistered securities of domestic and foreign issuers sponsored
by the National Association of Securities Dealers, Inc. (the
"NASD").

The Adviser, acting under the supervision of the Board
of Directors, will monitor the liquidity of restricted securities
in the Fund that are eligible for resale pursuant to Rule 144A.
In reaching liquidity decisions, the Adviser will consider, among
others, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers issuing
quotations to purchase or sell the security; (3) the number of
other potential purchasers of the security; (4) the number of
dealers undertaking to make a market in the security; (5) the
nature of the security (including its unregistered nature) and
the nature of the marketplace for the security (e.g., the time
needed to dispose of the security, the method of soliciting
offers and the mechanics of the transfer); and (6) any applicable
Commission interpretation or position with respect to such type
of securities.

The Fund may not be able to readily sell securities for
which there is no ready market. 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.

PORTFOLIO TURNOVER. Because the Fund will actively use
trading to achieve its investment objective and policies, the
Fund may be subject to a greater degree of turnover and, thus, a
higher incidence of short-term capital gains taxable as ordinary
income than might be expected from investment companies which
invest substantially all of their funds on a long-term basis, and
correspondingly larger mark-up charges can be expected to be
borne by the Fund. Management anticipates that the annual
turnover in the Fund may be in excess of 100%. An annual
turnover rate of 100% occurs, for example, when all of the
securities in the Fund are replaced one time in a period of one
year.

The value of the Fund's shares will be influenced by the
factors which generally affect securities, such as the economic
and political outlook, earnings, dividends and the supply and
demand for various classes of securities. There can be, of
course, no assurance that the Fund's investment objective will be
achieved.

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CERTAIN RISK CONSIDERATIONS

RISKS OF INVESTMENTS IN FOREIGN SECURITIES. Foreign
issuers are subject to accounting and financial standards and
requirements that differ, in some cases significantly, from those
applicable to U.S. issuers. In particular, the assets and
profits appearing on the financial statements of a foreign issuer
may not reflect its financial position or results of operations
in the way they would be reflected had the financial statement
been prepared in accordance with U.S. generally accepted
accounting principles. In addition, for an issuer that keeps
accounting records in local currency, inflation accounting rules
in some of the countries in which the Fund will invest require,
for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to
express items in terms of currency of constant purchasing power.
Inflation accounting may indirectly generate losses or profits.
Consequently, financial data may be materially affected by
restatements for inflation and may not accurately reflect the
real condition of those issuers and securities markets.
Substantially less information is publicly available about
certain non-U.S. issuers than is available about U.S. issuers.

Expropriation, confiscatory taxation, nationalization,
political, economic or social instability or other similar
developments, such as military coups, have occurred in the past
in countries in which the Fund will invest and could adversely
affect the Fund's assets should these conditions or events recur.

Foreign investment in certain foreign securities is
restricted or controlled to varying degrees. These restrictions
or controls may at times limit or preclude foreign investment in
certain foreign securities and increase the costs and expenses of
the Fund. Certain countries in which the Fund will invest
require governmental approval prior to investments by foreign
persons, limit the amount of investment by foreign persons in a
particular issuer, limit the investment by foreign persons only
to a specific class of securities of an issuer that may have less
advantageous rights than the classes available for purchase by
domiciliaries of the countries and/or impose additional taxes on
foreign investors.

Certain countries other than those on which the Fund
will focus it investments may require governmental approval for
the repatriation of investment income, capital or the proceeds of
sales of securities by foreign investors. In addition, if a
deterioration occurs in a country's balance of payments, the
country could impose temporary restrictions on foreign capital
remittances.

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Income from certain investments held by the Fund could
be reduced by foreign income taxes, including withholding taxes.
It is impossible to determine the effective rate of foreign tax
in advance. The Fund's net asset value may also be affected by
changes in the rates or methods of taxation applicable to the
Fund or to entities in which the Fund has invested. The Adviser
generally will consider the cost of any taxes in determining
whether to acquire any particular investments, but can provide no
assurance that the tax treatment of investments held by the Fund
will not be subject to change.

For many foreign securities, there are U.S. dollar-
denominated American Depository Receipts (ADRs) which are traded
in the United States on exchanges or over-the-counter, are issued
by domestic banks or trust companies and which market quotations
are readily available. ADRs do not lessen the foreign exchange
risk inherent in investing in the securities of foreign issuers.
However, by investing in ADRs rather than directly in stock of
foreign issuers, the Fund can avoid currency risks which might
occur during the settlement period for either purchases or sales.
The Fund may purchase foreign securities directly, as well as
through ADRs.

SECURITIES RATINGS. The ratings of fixed-income
securities by Moody's Investors Service, Inc. and Standard &
Poor's Ratings Services are a generally accepted barometer of
credit risk. They are, however, subject to certain limitations
from an investor's standpoint. The rating of an issuer is
heavily weighted by past developments and does not necessarily
reflect probable future conditions. There is frequently a lag
between the time a rating is assigned and the time it is updated.
In addition, there may be varying degrees of difference in credit
risk of securities within each rating category.

The Adviser will try to reduce the risk inherent in the
Fund's investment approach through credit analysis,
diversification and attention to current developments and trends
in interest rates and economic conditions. However, there can be
no assurance that losses will not occur. In considering
investments for the Fund, the Adviser will attempt to identify
those high-yielding securities whose financial condition is
adequate to meet future obligations, has improved, or is expected
to improve in the future. The Adviser's analysis focuses on
relative values based on such factors as interest or dividend
coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.

Non-rated securities will also be considered for
investment by the Fund when the Adviser believes that the
financial condition of the issuers of such securities, or the
protection afforded by the terms of the securities themselves,

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limits the risk to the Fund to a degree comparable to that of
rated securities which are consistent with the Fund's objectives
and policies.

1940 ACT RESTRICTIONS. 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 borrowing 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 of the Fund's portfolio would be
300%; while outstanding borrowings representing 25% of the total
assets less liabilities (other than such borrowings), the asset
coverage of the Fund's portfolio 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 and such sales could cause the Fund to incur related
transaction costs and to realize taxable gains.

Under the 1940 Act, the Fund may invest not more than
10% of its total assets in securities of other investment
companies. In addition, under the 1940 Act the Fund may not own
more than 3% of the total outstanding voting stock of any
investment company and not more than 5% of the value of the
Fund's total assets may be invested in the securities of any
investment company.

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 a single issuer, or in securities of
issuers in any single industry (other than Health

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Care Industries, as defined in the Prospectus),
except that these restrictions do not apply to
securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or
other U.S. Government securities ("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. Borrow money or issue senior securities
except to the extent permitted by the 1940 Act;

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 commodity contracts,
including futures contracts (except foreign
currencies, futures on securities, currencies and
securities indices and forward contracts or
contracts for the future acquisition or delivery of
securities and foreign currencies and other similar
contracts and options on the foregoing); and
(c) 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 Securities Act.

Whenever any investment restriction states a maximum
percentage of the Fund's assets which may be invested in any
security or other asset, it is intended that such maximum
percentage limitation be determined immediately after and as a
result of the Fund's acquisition of such securities or other
assets. Accordingly, any later increase or decrease in
percentage beyond the specified limitation resulting from a
change in values or net assets will not be considered a violation
of any such maximum.

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Certain Non-Fundamental Investment Policies

The following investment restrictions are not
fundamental. They may be changed without a vote of the Fund's
shareholders.

The Fund may not:

1. Borrow money except from banks on a temporary basis
in order to meet redemption requests and only if the aggregate of
the amount borrowed would not exceed 10% of the value of its
total net assets (not including the aggregate amount
borrowed);

2. Make short sales of securities or maintain a short
position for the account of the Fund; or

3. Invest in the securities of any single issuer if
immediately after and as a result of such investment more than
10% of the total net assets of the fund would consist of the
securities of such issuer, provided that:

a. the above limit of 10% shall be 25% in respect
of the securities issued or guaranteed by any
Member State of the European Union ("EU") or
any local authority thereof, or public
international bodies of which one or more
Member States of the EU are members or any
other national government; and

b. the above limit of 10% shall be 25% for debt
securities issued by a credit institution
whose registered office is situated in a
Member State of the EU.
________________________________________________________________

MANAGEMENT OF THE FUND
________________________________________________________________

Directors and Officers

The business and affairs of the Fund are managed under
the direction of the Board of Directors. The Directors and
officers of the Fund, their ages and their principal occupations
during the past five years are set forth below. Each such
Director and officer is also a trustee, director or officer 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.

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DIRECTORS

JOHN D. CARIFA,* 54, Chairman of the Board, is the
President, Chief Operating Officer and a Director of ACMC, with
which he has been associated since prior to 1994.

RUTH BLOCK, 68, was formerly an Executive Vice President
and the Chief Insurance Officer of Equitable. She is a Director
of Ecolab Incorporated (specialty chemicals) and Amoco
Corporation (oil and gas). Her address is P.O. Box 4623,
Stamford, Connecticut 06903.

DAVID H. DIEVLER, 69, is an independent consultant. He
was formerly a Senior Vice President of ACMC until December 1994.
His address is P.O. Box 167, Spring Lake, New Jersey 07762.

JOHN H. DOBKIN, 57, has been the President of Historic
Hudson Valley (historic preservation) since prior to 1994.
Previously, he was Director of the National Academy of Design.
His address is 150 White Plains Road, Tarrytown, New York 10591.

WILLIAM H. FOULK, JR., 66, 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 1986. His address is Room
100, 2 Greenwich Plaza, Greenwich, Connecticut 06830.

DR. JAMES M. HESTER, 75, is President of the Harry Frank
Guggenheim Foundation, with which he has been associated since
prior to 1994. He was formerly President of New York University,
the New York Botanical Garden and Rector of the United Nations
University. His address is 25 Cleveland Lane, Princeton, New
Jersey 08540.

CLIFFORD L. MICHEL, 59, is a member of the law firm of
Cahill Gordon & Reindel, with which he has been associated since
prior to 1994. 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, 64, is Senior Counsel to the law
firm of Orrick, Herrington & Sutcliffe and was formerly a senior
partner and a member of the Executive Committee of that firm. He
was also a Trustee of the Museum of the City of New York from
1977 to 1995. His address is 98 Hell's Peak Road, Weston,
Vermont 05161.
____________________

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

<PAGE>

OFFICERS

JOHN D. CARIFA, CHAIRMAN AND PRESIDENT (see biography,
above).

EDMUND P. BERGAN, JR., SECRETARY, 49, 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 1994.

MARK D. GERSTEN, TREASURER AND CHIEF FINANCIAL OFFICER,
48, is a Senior Vice President of AFS, with which he has been
associated since prior to 1994.

DOMENICK PUGLIESE, ASSISTANT SECRETARY, 38, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since May 1995. Prior thereto, he was a Vice
President and Counsel of Concord Financial Holding Corporation
since 1994, Vice President and Associate General Counsel of
Prudential Securities since prior to 1993.

ANDREW L. GANGOLF, ASSISTANT SECRETARY, 45, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since December 1994. Prior thereto, he was Vice
President and Assistant Secretary of Delaware Management Co.,
Inc.

EMILIE D. WRAPP, ASSISTANT SECRETARY, 43, is a Vice
President and Assistant General Counsel of AFD, with which she
has been associated since prior to 1994.

The Fund does not pay any fees to, or reimburse
expenses of, its Directors who are considered "interested
persons" of the Fund. The aggregate compensation to be paid
by the Fund to each of the Directors during the Fund's
fiscal period ending June 30, 2000 (estimating future
payments based upon existing arrangements), and the
aggregate compensation paid to each of the Directors during
calendar year 1998 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 Fund nor any other registered investment
company in the Alliance Fund Complex provides compensation
in the form of pension or retirement benefits to any of its
directors or trustees.

<PAGE>

Total Number Total Number
of Investment of Investment
Total Companies in Portfolios Within
Compensation the Alliance the Alliance
From the Fund Complex, Fund Complex,
Alliance Fund Including the Including the
Complex, Fund, for which Fund, as to which
Aggregate Including the the Director the Director
Name of Compensation Fund, During is a Director is a Director or
Director From the Fund 1998 or Trustee Trustee
___________ _____________ ______________ _____________ _______________

John D. Carifa $-0- $-0 - 50 116
Ruth Block $ $180,762.50 37 79
David H. Dievler $ $216,287.50 43 82
John H. Dobkin $ $185,362.50 41 93
William H. Foulk, Jr.$ $241,002.50 45 111
Dr. James M. Hester $ $172,912.50 37 76
Clifford L. Michel $ $187,762.50 38 92
Donald J. Robinson $ $193,708.50 41 105

As of July 26, 1999, the Directors and officers of the
Fund 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 March 31, 1999 totaling more
than $301 billion (of which approximately $127 billion
represented the assets of investment companies). As of March 31,
1999, the Adviser managed retirement assets for many of the
largest public and private employee benefit plans (including 30
of the nation's FORTUNE 100 companies), for public employee
retirement funds in 32 out of the 50 states, for investment
companies, and for foundations, endowments, banks and insurance
companies worldwide. The 54 registered investment companies
managed by the Adviser, comprising 120 separate investment
portfolios, currently have more than four million shareholder
accounts.

Alliance Capital Management Corporation ("ACMC"), the
sole general partner of, and the owner of a 1% general
partnership interest in, the Adviser, is an indirect wholly-owned
subsidiary of The Equitable Life Assurance Society of the United
States ("Equitable"), one of the largest life insurance companies
in the United States and a wholly-owned subsidiary of The
Equitable Companies Incorporated ("ECI"). ECI is a holding
company controlled by AXA, a French insurance holding company.

<PAGE>

As of March 1, 1999 AXA and certain of its subsidiaries
beneficially owned approximately 58.4% of ECI's outstanding
common stock. ECI is a public company with shares traded on the
New York Stock Exchange.

AXA, a French company, is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations include activities in life
insurance, property and casualty insurance and reinsurance. The
insurance operations are diverse geographically with activities
principally in Western Europe, North America, the Asia/Pacific
area and, to a lesser extent, in Africa and South America. AXA
is also engaged in asset management, investment banking,
securities trading, brokerage, real estate and other financial
services activities principally in the United States, as well as
in Western Europe and the Asia/Pacific area.

For insurance regulatory purposes the shares of capital
stock of ECI beneficially owned by AXA and its subsidiaries have
been deposited into a voting trust which has an initial term of
10 years commencing in 1992. The trustees of the voting trust
(the "Voting Trustees") have agreed to protect the legitimate
economic interests of AXA, but with a view of ensuring that
certain minority shareholders of AXA do not exercise control over
ECI or certain of its insurance subsidiaries. As of March 1,
1999, AXA, ECI, Equitable and certain subsidiaries of Equitable
were the beneficial owners of approximately 56.6% of the issued
and outstanding units representing assignments of beneficial
ownership of limited partnership interests ("Units") in the
Adviser.

Based on information provided by AXA, on March 1, 1999,
approximately 20.7% of the issued ordinary shares (representing
32.7% of the voting power) of AXA were owned directly and
indirectly by Finaxa, a French holding company. As of March 1,
1999, 61.7% of the shares (representing 72.3% of the voting
power) of Finaxa were owned by four French mutual insurance
companies (the "Mutuelles AXA") (one of which, AXA Assurances
I.A.R.D. Mutuelle, owned 35.4% of the shares, representing 41.5%
of the voting power of Finaxa), and 22.7% of the shares of Finaxa
(representing 13.7% of the voting power) were owned by Paribas, a
French bank. Including the ordinary shares owned by Finaxa, on
March 1, 1999, the Mutuelles AXA directly and indirectly owned
approximately 23.9% of the issued ordinary shares (representing
37.6% of the voting power) of AXA. The Voting Trustees may be
deemed to be beneficial owners of all Units beneficially owned by
AXA and its subsidiaries. By virtue of the provisions of the
voting trust agreement, AXA may be deemed to have shared voting
power with respect to the Units. In addition, the Mutuelles AXA,
as a group, and Finaxa may be deemed to be beneficial owners of
all Units beneficially owned by AXA and its subsidiaries. AXA

<PAGE>

and its subsidiaries have the power to dispose or direct the
disposition of all shares of the capital stock of ECI deposited
in the voting trust. The Mutuelles AXA, as a group, and Finaxa
may be deemed to share the power to vote or to direct the vote
and to dispose or to direct the disposition of all the Units
beneficially owned by AXA and its subsidiaries. By reason of
their relationship, AXA, the Voting Trustees, the Mutuelles AXA,
Finaxa, ECI, Equitable, Equitable Holdings, L.L.C., Equitable
Investment Corporation, ACMC and Equitable Capital Management
Corporation may be deemed to share the power to vote or to direct
the vote and to dispose or direct the disposition of all or a
portion of the Units beneficially owned by AXA and its
subsidiaries.

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

The Adviser is, under the Advisory Agreement,
responsible for certain expenses incurred by the Fund, 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 regulatory authorities.)

The Fund 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 Fund by the Adviser, the Fund 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 will be provided to the Fund at cost and the
payments specifically approved by the Fund's Board of
Directors.

For the services rendered by the Adviser under the
Advisory Agreement, the Fund pays the Adviser at an annualized
rate of .95% of the average daily value of the Fund's net assets.
The fee is accrued daily and paid monthly.

The Advisory Agreement became effective on July 13,
1999. The Advisory Agreement was approved by the unanimous vote,

<PAGE>

cast in person, of the Fund's Directors including the Directors
who are not parties to the Advisory Agreement or interested
persons as defined in the Act, of any such party, at a meeting
called for the purpose and held on July 13, 1999.

The Advisory Agreement is terminable without penalty on
60 days' written notice by a vote of a majority of the
outstanding voting securities of the Fund or by a vote of a
majority of the Fund's Directors, 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.

The Advisory Agreement continues in effect until
July 31, 2001, and thereafter for successive twelve-month periods
computed from each August 1, provided that such continuance is
specifically approved at least annually by a vote of a majority
of the Fund's outstanding voting securities or by the Fund'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 such parties as defined by the
1940 Act.

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 the 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. 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 or 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 All-
Asia Investment Fund, Inc., Alliance Balanced Shares, Inc.,
Alliance Bond Fund, Inc., Alliance Capital Reserves, Alliance
Global Dollar Government Fund, Inc., Alliance Global Environment
Fund, Inc., Alliance Global Small Cap Fund, Inc., Alliance Global
Strategic Income Trust, Inc., Alliance Government Reserves,

<PAGE>

Alliance Greater China '97 Fund, Inc., Alliance Growth and Income
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, The Alliance
Fund, Inc., The Alliance Portfolios, and The Hudson River Trust,
all registered open-end investment companies; ACM Government
Income Fund, Inc., ACM Government Securities Fund, Inc., ACM
Government Spectrum Fund, Inc., ACM Government Opportunity 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 Fund has entered into a Distribution Services
Agreement (the "Agreement") with Alliance Fund Distributors,
Inc., the Fund'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 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

<PAGE>

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.

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 of the Fund 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 with respect to the class
involved and, in the case of Class B and Class C shares, 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 with
respect to the class involved and, in the case of Class B and
Class C shares, payments subsequently received through CDSCs, so
long as the Rule 12b-1 Plan is 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 Rule 12b-1 Plan, the Directors of the
Fund determined that there was a reasonable likelihood that the
Rule 12b-1 Plan 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

<PAGE>

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 July 13, 1999. The Agreement will
continue in effect until July 31, 2000 and continue in effect
thereafter so long as its continuance is specifically approved at
least annually by the Directors of the Fund or by 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 Rule 12b-1 Plan 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.

The Glass-Steagall Act and other applicable laws may
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Funds' management, based on the advice of
counsel, these laws do not prohibit such depository institutions
from providing services for investment companies such as the
administrative, accounting and other services referred to in the
Agreement. In the event that a change in these laws prevented a
bank from providing such services, it is expected that other
service arrangements would be made and that shareholders would
not be adversely affected.

Transfer Agency Agreement

Alliance Fund Services, Inc., an indirect wholly-owned
subsidiary of the Adviser, receives a transfer agency fee per
account holder of each of the Class A shares, Class B shares,
Class C shares and Advisor Class 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 and Advisor Class shares, reflecting the additional costs
associated with the Class B and Class C contingent deferred sales
charge.

<PAGE>

_________________________________________________________________

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."

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.

Advisor Class shares of the Fund may be purchased and
held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers
or other financial intermediaries and approved by the Principal
Underwriter, (ii) through self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least
1,000 participants or $25 million in assets, (iii) by the
categories of investors described in clauses (i) through (iv)
under "--Sales at Net Asset Value" (other than officers,
directors and present and full-time employees of selected dealers
or agents, or relatives of such person, or any trust, individual
retirement account or retirement plan account for the benefit of
such relative, none of whom is eligible on the basis solely of
such status to purchase and hold Advisor Class shares), or
(iv) by directors and present or retired full-time employees of
CB Richard Ellis, Inc. Generally, a fee-based program must
charge an asset-based or other similar fee and must invest at
least $250,000 in Advisor Class shares of the Fund in order to be
approved by the Principal Underwriter for investment in Advisor
Class shares.

Investors may purchase shares of the Fund either through
selected broker-dealers, agents, financial intermediaries or
other financial representatives or directly through the Principal

<PAGE>

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 Class A, Class B,
Class C or Advisor Class 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, Class C or
Advisor Class 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 Fund's Articles of
Incorporation and By-Laws as of the next close of regular trading
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, Class C and Advisor Class 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 and Advisor Class 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

<PAGE>

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. 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
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

<PAGE>

fractional shares, although such shares remain in the
shareholder's account on the books of the Fund.

In addition to the discount or commission 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, cash or other incentives
will be conditioned upon the sale of a specified minimum dollar
amount of the shares of the Fund and/or other Alliance Mutual
Funds, as defined below, during a specific period of time. On
some occasions, such cash or other incentives may take the form
of payment for attendance at seminars, meals, sporting events or
theater performances, or payment for travel, lodging and
entertainment incurred in connection with travel taken by persons
associated with a dealer or agent to urban or resort locations
within or outside the United States. Such dealer or agent may
elect to receive cash incentives of equivalent amount in lieu of
such payments.

Class A, Class B, Class C and Advisor Class 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, and Advisor Class shares do not
bear such a fee, (iii) Class B shares and Class C shares bear
higher transfer agency costs than those borne by Class A and
Advisor Class 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 and Advisor Class
shareholders and the Class A and Class B and Advisor Class
shareholders will vote separately by class, and (v) Class B and
Advisor Class shares are each subject to a conversion feature.
Each class has different exchange privileges and certain
different shareholder service options available.

The Directors of the Fund have determined that currently
no conflict of interest exists between or among the Class A,
Class B, Class C and Advisor Class shares. On an ongoing basis,

<PAGE>

the Directors of the Fund, pursuant to their fiduciary duties
under the 1940 Act and state law, will seek to ensure that no
such conflict arises.

Alternative Purchase Arrangements -- Class A, Class B
and Class C Shares**

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
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 A 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
____________________

** Advisor Class shares are sold only to investors described
above in this section "--General."

<PAGE>

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.

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.

<PAGE>

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
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

<PAGE>

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
$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 July 26, 1999.

Net Asset Value per Class A Share at
July 26, 1999 $10.00

Class A Per Share Sales Charge 4.25%
of offering price (4.44% of net asset
value per share) $ .44
-----
Class A Per Share Offering Price to
the Public $10.44
=====

<PAGE>

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
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 Global Dollar Government Fund, Inc.
Alliance Global Environment 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 High Yield Fund, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.

<PAGE>

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 Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, 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

<PAGE>

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.

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 $250,000 within a
period of 13 months in Class A shares (or Class A, Class B,
Class C and/or Advisor Class 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
$20,000 (for a total of $40,000), it will only be necessary to
invest a total of $60,000 during the following 13 months in

<PAGE>

shares of the Fund or any other Alliance Mutual Fund, to qualify
for the 3.25% sales charge on the total amount being invested
(the sales charge applicable to an investment of $100,000).

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 5%
of such amount. 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 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.

<PAGE>

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
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 Fund; 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);

<PAGE>

(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 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;

(vi) persons who establish to the Principal
Underwriter's satisfaction that they are
investing, within such time period as may
be designated by the Principal
Underwriter, proceeds of redemption of
shares of such other registered
investment companies as may be designated
from time to time by the Principal
Underwriter; and

(vii) 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

<PAGE>

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
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

<PAGE>

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
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 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, 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

<PAGE>

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
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

<PAGE>

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.

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.

Conversion of Advisor Class Shares to Class A Shares

Advisor Class shares may be held solely through the fee-
based program accounts, employee benefit plans and registered
investment advisory or other financial intermediary relationships
described above under "Purchase of Shares--General" and by
investment advisory clients of, and by certain other persons
associated with, the Adviser and its affiliates or the Fund. If
(i) a holder of Advisor Class shares ceases to participate in the
fee-based program or plan or, to be associated with the
investment adviser or financial intermediary, in each case that
satisfies the requirements to purchase shares set forth under
"Purchase of Shares--General" or (ii) the holder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Advisor Class Prospectus and this Statement of Additional
Information (each, a "Conversion Event"), then all Advisor Class
shares held by the shareholder will convert automatically and
without notice to the shareholder, other than the notice

<PAGE>

contained in the Advisor Class Prospectus and this Statement of
Additional Information, to Class A shares of the Fund during the
calendar month following the month in which the Fund is informed
of the occurrence of the Conversion Event. The failure of a
shareholder of a fee-based program to satisfy the minimum
investment requirements to purchase Advisor Class shares will not
constitute a Conversion Event. The conversion would occur on the
basis of the relative net asset values of the two classes and
without the imposition of any sales load, fee or other charge.
Class A shares currently bear a .30% distribution services fee
and have a higher expense ratio than Advisor Class shares. As a
result, Class A shares may pay correspondingly lower dividends
and have a lower net asset value than Advisor Class shares.

The conversion of Advisor Class shares to Class A shares
is subject to the continuing availability of an opinion of
counsel to the effect that the conversion of Advisor Class shares
to Class A shares does not constitute a taxable event under
federal income tax law. The conversion of Advisor Class shares
to Class A shares may be suspended if such an opinion is no
longer available at the time such conversion is to occur. In
that event, the Advisor Class shareholder would be required to
redeem his Advisor Class shares, which would constitute a taxable
event under federal income tax law.

_________________________________________________________________

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." If you are an Advisor Class
shareholder through an account established under a fee-based
program your fee-based program may impose requirements with
respect to the purchase, sale or exchange of Advisor Class shares
of the Fund that are different from those described herein. A
transaction fee may be charged by your financial representative
with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial representative.

Redemption

Subject only to the limitations described below, the
Fund'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 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

<PAGE>

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
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,

<PAGE>

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
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

<PAGE>

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. 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
(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

<PAGE>

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--Shareholder Services." The shareholder services set
forth below are applicable to Class A, Class B, Class C and
Advisor Class shares unless otherwise indicated. If you are an
Advisor Class shareholder through an account established under a
fee-based program your fee-based program may impose requirements
with respect to the purchase, sale or exchange of Advisor Class
shares of the Fund that are different from those described
herein. A transaction fee may be charged by your financial
representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial
representative.

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
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).
In addition, (i) present officers and full-time employees of the
Adviser, (ii) present Directors or Trustees of any Alliance

<PAGE>

Mutual Fund and (iii) certain employee benefit plans for
employees of the Adviser, the Principal Underwriter, Alliance
Fund Services, Inc. and their affiliates may exchange Class A
shares of the Fund for Advisor Class shares of the Fund.
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. 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 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.

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

<PAGE>

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
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.

<PAGE>

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-
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.

<PAGE>

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, Class C or Advisor Class Fund account, a
Class A, Class B, Class C or Advisor Class 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,
Class C or Advisor Class 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 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

<PAGE>

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.

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

<PAGE>

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, [ ],
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.

_________________________________________________________________

NET ASSET VALUE
_________________________________________________________________

The per share net asset value is computed in accordance
with the Fund'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

<PAGE>

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 quoted bid prices on such day. If no bid prices are
quoted on such day, then the security is valued at the mean of
the bid and asked prices at the close of the Exchange on such day
as obtained from one or more dealers regularly making a market in
such security. Where a bid and asked price can be obtained from
only one such dealer, such security is valued at the mean of the
bid and asked price obtained from such dealer unless it is
determined that such price does not represent current market
value, in which case the security shall be value in good faith at
fair value by, or pursuant to procedures established by, the
Board of Directors. Securities for which no bid and asked price
quotations are readily available are 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 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.

Readily marketable securities traded only 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 debt securities listed on a
U.S. national securities exchange whose primary market is
believed to be over-the-counter, are valued at the mean of the
bid and asked prices at the close of the Exchange on such day as
obtained from two or more dealers regularly making a market in
such security. Where a bid and asked price can be obtained from
only one such dealer, such security is valued at the mean of the
bid and asked price obtained from such dealer unless it is
determined that such price does not represent current market
value, in which case the security shall be value in good faith at
fair value by, or pursuant to procedures established by, the
Board of Directors.

Open futures contracts 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

<PAGE>

(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
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 these prices do not reflect current
market value, in which case the securities will be valued in good
faith at fair value by, or in accordance with procedures
established by, the Board of Directors.

The Board of Directors may suspend the determination of
the Fund's, net asset value (and the offering and sales 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

<PAGE>

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, Class C shares and Advisor Class 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.

_________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
_________________________________________________________________

Dividends paid by the Fund, if any, with respect to
Class A, Class B, Class C and Advisor Class shares will be
calculated in the same manner at the same time on the same day
and will be in the same amount, except that the higher
distribution services applicable to Class B and C shares, and any
incremental transfer agency costs relating to Class B and Class C
shares, will be borne exclusively by the class to which they
relate.

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
Internal Revenue Code of 1986, as amended (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 or 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; (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

<PAGE>

U.S. Government Securities or securities of other regulated
investment companies).

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
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

<PAGE>

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.

Pursuant to the Taxpayer Relief Act of 1997, two
different tax rates apply to net capital gains--that is, the
excess of net gains from capital assets held for more than one
year over net losses from capital assets held for not more than
one year. One rate (generally 28%) applies to net gains on
capital assets held for more than one year but not more than 18
months ("mid-term gains"), and a second rate (generally 20%)
applies to the balance of such net capital gains ("adjusted net
capital gains"). Distributions of mid-term gains and adjusted
net capital gains will be taxable to shareholders as such,
regardless of how long a shareholder has held shares in the Fund.
Distributions of net capital gains 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

<PAGE>

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. In the case of an individual
shareholder, the applicable tax rate imposed on long-term capital
gain differs depending on whether the shares were held at the
time of the sale or redemption for more than eighteen months, or
for more than one year but not more than eighteen months. If a
shareholder has held shares in the Fund for six months or less
and during that period has received a distribution of net capital
gains, 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.

Foreign Taxes. Income received by the Fund may also be
subject to foreign income taxes, including withholding taxes. The
United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of such taxes
or exemption from taxes on such income. It is impossible 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. If more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of
stocks or securities of foreign corporations, the Fund will be
eligible and intends to file an election with the Internal
Revenue Service to pass through to its shareholders the amount of
foreign taxes paid by the Fund. However, there can be no
assurance that the Fund will be able to do so. Pursuant to this
election a United States shareholder will be required to
(i) include in gross income (in addition to taxable dividends
actually received) his pro rata share of foreign taxes paid by
the Fund, (ii) treat his pro rata share of such foreign taxes as
having been paid by him, and (iii) either deduct such pro rata
share of foreign taxes in computing his taxable income or treat
such foreign taxes as a credit against United States federal
income taxes. Shareholders who are not liable for federal income
taxes, such as retirement plans qualified under section 401 of
the Code, will not be affected by any such pass through of taxes
by the Fund. No deduction for foreign taxes may be claimed by an

<PAGE>

individual United States shareholder who does not itemize
deductions. In addition, certain individual United States
shareholders may be subject to rules which limit or reduce their
ability to fully deduct, or claim a credit for, their pro rata
share of the foreign taxes paid by the Fund. A shareholder's
foreign tax credit with respect to a dividend received from the
Fund will be disallowed unless the shareholder holds shares in
the Fund on the ex-dividend date and for at least 15 other days
during the 30-day period beginning 15 days prior to the ex-
dividend date. Each shareholder will be notified within 60 days
after the close of the Fund's taxable year whether the foreign
taxes paid by the Fund will pass through for that year and, if
so, such notification will designate (i) the shareholder's
portion of the foreign taxes paid to each such country and
(ii) the portion of dividends that represents income derived from
sources within each such country.

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.

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

<PAGE>

are treated as ordinary gain 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.

Futures and Forward Contracts. Certain 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.

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.

Tax Straddles. Any futures contract, forward foreign
currency contract, 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

<PAGE>

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.

Taxation of Foreign Stockholders

The foregoing discussion relates only to United States
federal income tax law as it affects shareholders who are United
States citizens or residents or United States corporations. The
effects of federal income tax law on shareholders who are non-
resident alien individuals or foreign corporations may be
substantially different. Foreign investors should therefore
consult their counsel for further information as to the United
States tax consequences of receipt of income from the Fund.

Other Taxation

The Fund may be subject to other state and local
taxes.

_________________________________________________________________

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

<PAGE>

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
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

<PAGE>

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.

_________________________________________________________________

GENERAL INFORMATION
_________________________________________________________________

Capitalization

The authorized capital stock of the Fund currently
consists of 3,000,000,000 shares of Class A Common Stock,
3,000,000,000 shares of Class B Common Stock, 3,000,000,000
shares of Class C Common Stock and 3,000,000,000 shares of
Advisor Class Common Stock, each having a par value of $.001 per
share. All shares of the Fund, when issued, are fully paid and
non-assessable. The Directors are authorized to reclassify any
unissued shares to any number of additional series and classes

<PAGE>

without shareholder approval. Accordingly, the Directors in the
future, for reasons such as the desire to establish one or more
additional portfolios with different investment objectives,
policies or restrictions, may create additional classes or series
of shares. Any issuance of shares of another class or series
would be governed by the 1940 Act and the law of the State of
Maryland. If shares of another series were issued in connection
with the creation of a second portfolio, each share of either
portfolio would normally be entitled to one vote for all
purposes. Generally, shares of both portfolios would vote as a
single series on matters, such as the election of Directors, that
affected both portfolios 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.
Procedures for calling a shareholders' meeting for the removal of
Directors of the Fund, 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.

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

A shareholder will be entitled to share pro rata with
other holders of the same class of shares all dividends and
distributions arising from the Fund's assets and, upon redeeming
shares, will receive the then current net asset value of the Fund
represented by the redeemed shares less any applicable CDSC. The
Fund 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 in the Fund, each share of the portfolio
or class would normally be entitled to one vote for all purposes.
Generally, shares of each portfolio and class would vote together
as a single class on matters, such as the election of Directors,
that affect each portfolio and class in substantially the same
manner. Class A, B, C and Advisor Class shares have identical
voting, dividend, liquidation and other rights, except that each
class bears its own transfer agency expenses, each of Class A,
Class B and Class C shares of the Fund bears its own distribution
expenses and Class B shares and Advisor Class shares convert to
Class A shares under certain circumstances. Each class of shares
of the Fund votes separately with respect to 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 as determined by the

<PAGE>

Directors and, in liquidation of the Fund, are entitled to
receive the net assets of the Fund.

Custodian

Brown Brothers Harriman & Co. will act as the Fund'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 Fund's Directors, Brown Brothers
Harriman & Co. may enter into sub-custodial agreements for the
holding of the Fund's foreign securities.

Principal Underwriter

Alliance Fund Distributors, Inc., 1345 Avenue of the
Americas, New York, New York 10105, serves as the Fund's
Principal Underwriter, 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. Seward & Kissel LLP has relied upon the
opinion of Venable, Baetjer and Howard, LLP, Baltimore, Maryland,
for matters relating to Maryland law.

Independent Accountants

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

Performance Information

From time to time the Fund advertises its "total
return." Computed separately for each class, the Fund's "total
return" is its average annual compounded total return for its
most recently completed one, five, and ten-year periods (or the
period since the Fund's inception). The Fund's total return for
such a period is computed by finding, through the use of a
formula prescribed by the Commission, the average annual
compounded rate of return over the period that would equate an
assumed initial amount invested to the value of such 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

<PAGE>

and the maximum sales charge applicable to purchases of Fund
shares is assumed to have been paid.

The Fund's total return is computed separately for
Class A, Class B, Class C and Advisor Class shares. The Fund's
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 and its
expenses. 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.

Advertisements quoting performance rankings of the Fund
as measured by financial publications or by independent
organizations such as Lipper Inc. and Morningstar, Inc. and
advertisements presenting the historical 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 Barron's,
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.

<PAGE>

_________________________________________________________________

FINANCIAL STATEMENT AND
REPORT OF INDEPENDENT ACCOUNTANTS
_________________________________________________________________

No financial statements are included in this
Registration Statement since, on the date of filing, the
Registrant, being a newly organized corporation, has no assets or
known liabilities and has sold no shares of common stock. Prior
to the effective date of this Registration Statement, the
required financial statement will be filed by amendment hereto.

<PAGE>

_________________________________________________________________

APPENDIX A:

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

A-1

<PAGE>

by Merrill Lynch as of the date the plan
becomes an Active Plan.

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."

A-2

<PAGE>

PART C

OTHER INFORMATION

ITEM 23. Exhibits

(a) (1) Articles of Incorporation of the Registrant -
Incorporated by reference to Exhibit (a) to the
Registrant's Registration Statement on Form N-1A,
filed with the Securities and Exchange Commission
on May 6, 1999.

(2) Articles of Amendment and Restatement, dated
June 25, 1999 - Filed herewith.

(b) By-Laws of the Registrant - Filed herewith.

(d) Advisory Agreement between the Registrant and Alliance
Capital Management L.P.*.

(e) (1) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc.*

(2) Form of Selected Dealer Agreement between Alliance
Fund Distributors, Inc. and selected dealers
offering shares of Registrant.*

(3) Form of Selected Agent Agreement between Alliance
Fund Distributors, Inc. and selected agents making
available shares of Registrant.*

(f) Not applicable.

(g) Custodian Contract between the Registrant and Brown
Brothers Harriman.*

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

(2) Expense Limitation Agreement between the Registrant
and Alliance Capital Management L.P.*

(i) (1) Opinion and Consent of Seward & Kissel LLP.*

(2) Opinion and Consent of Venable, Baetjer and Howard,
LLP.*

(j) Consent of Independent Accountants.*

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<PAGE>

(k) Not applicable.

(l) Investment representation letter of Alliance Capital
Management L.P.*

(m) Rule 12b-1 Plan.*

(n) Financial Data Schedules.*

(o) Rule 18f-3 Plan.*

Other Exhibits - Powers of Attorney of Mssrs. Carifa,
Dievler, Dobkin, Foulk, Hester, Michel, Robinson and Ms.
Block.*

ITEM 24. Persons Controlled by or under Common Control with
Registrant.

None.

___________________________

* To be filed in a pre-effective amendment

C-2

<PAGE>

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
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 proposed 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

C-3

<PAGE>

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
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 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

C-4

<PAGE>

April 21, 1988 (File No. 801-32361) and amended through
the date hereof, is incorporated by reference.

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. also 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 Global Dollar Government Fund, Inc.
Alliance Global Environment 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 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.
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.

C-5

<PAGE>

POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT

Michael J. Laughlin Director and Chairman

John D. Carifa Director

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

Karen J. Bullot Senior Vice President

John R. Carl Senior Vice President

James S. Comforti Senior Vice President

James L. Cronin Senior Vice President

Daniel J. Dart Senior Vice President

Byron M. Davis Senior Vice President

Mark J. Dunbar Senior Vice President

Donald N. Fritts Senior Vice President

Bradley F. Hanson Senior Vice President

C-6

<PAGE>

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

Kevin A. Rowell Senior Vice President

Raymond S. Sclafani Senior Vice President

Gregory K. Shannahan Senior Vice President

Joseph F. Sumanski Senior Vice President

Peter J. Szabo Senior Vice President

William C. White Senior Vice President

Nicholas K. Willett Senior Vice President

Richard A. Winge Senior Vice President

Gerard J. Friscia Vice President and
Controller

Ricardo Arreola Vice President

Kenneth F. Barkoff Vice President

Charles M. Barrett Vice President

Casimir F. Bolanowski Vice President

Robert F. Brendli Vice President

Christopher L. Butts Vice President

Timothy W. Call Vice President

Jonathan W. Cangalosi Vice President

Kevin T. Cannon Vice President

C-7

<PAGE>

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Russell R. Corby Vice President

John W. Cronin Vice President

Richard W. Dabney Vice President

Stephen J. Demetrovits Vice President

John F. Dolan Vice President

Richard P. Dyson Vice President

John C. Endahl Vice President

John E. English Vice President

Sohaila S. Farsheed Vice President

Shawn C. Gage Vice President

Joseph C. Gallagher Vice President

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

Alex G. Garcia Vice President

Mark D. Gersten Vice President Treasurer and
Chief
Financial
Officer

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. Heyer Vice President

Timothy A. Hill Vice President

C-8

<PAGE>

Brian R. Hoegee Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo 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

Donna M. Lamback Vice President

P. Dean Lampe Vice President

Nicholas J. Lapi Vice President

Henry Michael Lesmeister Vice President

Eric L. Levinson Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Jerry W. Lynn Vice President

Michael F. Mahoney Vice President

Shawn P. McClain Vice President

David L. McGuire Vice President

Jeffrey P. Mellas Vice President

Thomas F. Monnerat Vice President

Timothy S. Mulloy Vice President

Joanna D. Murray Vice President

Michael F. Nash, Jr. Vice President

Nicole Nolan-Koester Vice President

Daniel A. Notto Vice President

C-9

<PAGE>

Peter J. O'Brien Vice President

John C. O'Connell Vice President

John J. O'Connor Vice President

Christopher W. Olson Vice President

Richard J. Olszewski Vice President

Catherine N. Peterson Vice President

James J. Posch Vice President

Domenick Pugliese Vice President and Assistant
Assistant General Secretary
Counsel

Bruce W. Reitz Vice President

Karen C. Satterberg Vice President

John P. Schmidt Vice President

Robert C. Schultz Vice President

Richard J. Sidell Vice President

Clara Sierra Vice President

Teris A. Sinclair Vice President

Scott C. Sipple Vice President

Martine H. Stansbery, Jr. Vice President

Vincent T. Strangio Vice President

Andrew D. Strauss Vice President

Michael J. Tobin Vice President

Joseph T. Tocyloski Vice President

Benjamin H. Travers Vice President

David R. Turnbough Vice President

Martha D. Volcker Vice President

Patrick E. Walsh Vice President

C-10

<PAGE>

Mark E. Westmoreland Vice President

David E. Willis Vice President

Emilie D. Wrapp Vice President and Assistant
Assistant General Secretary
Counsel

Michael W. Alexander Assistant Vice
President

Richard J. Appaluccio Assistant Vice
President

Paul G. Bishop Assistant Vice
President

John M. Capeci Assistant Vice
President

Maria L. Carreras Assistant Vice
President

John P. Chase Assistant Vice
President

Jean A. Coomber Assistant Vice
President

Terri J. Daly Assistant Vice
President

Ralph A. DiMeglio Assistant Vice
President

Faith C. Deutsch Assistant Vice
President

Timothy J. Donegan Assistant Vice
President

Adam E. Engelhardt Assistant Vice
President

Duff C. Ferguson Assistant Vice
President

Michele Grossman Assistant Vice
President

C-11

<PAGE>

Theresa Iosca Assistant Vice
President

Erik A. Jorgensen Assistant Vice
President

Eric G. Kalender Assistant Vice
President

Edward W. Kelly Assistant Vice
President

Victor Kopelakis Assistant Vice
President

Evamarie C. Lombardo Assistant Vice
President

Kristine J. Luisi Assistant Vice
President

Kathryn Austin Masters Assistant Vice
President

Richard F. Meier Assistant Vice
President

Rizwan A. Raja Assistant Vice
President

Carol H. Rappa Assistant Vice
President

Mark V. Spina Assistant Vice
President

Gayle S. Stamer Assistant Vice
President

Eileen Stauber Assistant Vice
President

Margaret M. Tompkins Assistant Vice
President

Marie R. Vogel Assistant Vice
President

C-12

<PAGE>

John Wilkens Assistant Vice
President

Wesley S. Williams Assistant Vice
President

Matthew Witschel Assistant Vice
President

David M. Wolf Assistant Vice
President

Christopher J. Zingaro Assistant Vice
President

Mark R. Manley Assistant Secretary

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 Brown Brothers Harriman &
Co., the Registrant's custodian. 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-13

<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 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 9th day of July, 1999.

Alliance Health Care Fund, Inc.

/s/Edmund P. Bergan, Jr.
________________________
Edmund P. Bergan, Jr.
Chairman

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

Signature Title Date
_____________ __________ ________

(1) Principal Executive Officer:

/s/ Edmund P. Bergan, Jr. Chairman July 9, 1999
______________________
Edmund P. Bergan, Jr.

(2) Principal Financial
and Accounting Officer:

/s/ Mark D. Gersten Treasurer July 9, 1999
_____________________ and Chief
Mark D. Gersten Financial
Officer

(3) Sole Director:

/s/ Edmund P. Bergan, Jr.
_________________________ July 9, 1999
Edmund P. Bergan, Jr.

C-14

<PAGE>

Index To Exhibits

(a)(2) Articles of Amendment and Restatement, dated
June 25, 1999.

(b) By-Laws of the Registrant.

C-15
00250248.AC9

<PAGE>

ARTICLES OF AMENDMENT AND RESTATEMENT

ALLIANCE HEALTH CARE FUND, INC.

Alliance Health Care Fund, Inc., a Maryland corporation
having its principal office in the State of Maryland in Baltimore
(hereinafter called the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:

I. The Corporation desires to amend and restate its
Articles of Incorporation as currently in effect. The provisions
set forth in these Articles of Amendment and Restatement are all
the provisions of the Articles of Incorporation currently in
effect as herein amended. The current address of the principal
office of the Corporation within the State of Maryland, the name
and address of the Corporation's current resident agent, and the
number of directors and the name of the director currently in
office are as set forth herein.

II. The Articles of Incorporation of the Corporation
are amended and as so amended are restated in their entirety by
striking out the title of the document and Articles FIRST through
NINTH and inserting in lieu thereof the following:

AMENDED AND RESTATED ARTICLES OF INCORPORATION
ALLIANCE HEALTH CARE FUND, INC.

FIRST: (1) The name of the incorporator is Michael
Hession.

(2) The incorporator's post office address is one
Battery Park Plaza, New York, New York 10004.

(3) The incorporator is over eighteen years of age.

(4) The incorporator is forming the corporation
named in these Articles of Incorporation under the general
laws of the State of Maryland.--

SECOND: The name of the corporation (hereinafter called the
Corporation) is Alliance Health Care Fund, Inc.

THIRD: (1) The purposes for which the Corporation is formed
are to conduct, operate and carry on the business of an
investment company.

(2) The Corporation may engage in any other
business and shall have all powers conferred upon or
permitted to corporations by the Maryland General Corporation
Law.

<PAGE>

FOURTH: The post office address of the principal office of
the Corporation within the State of Maryland is 300 East
Lombard Street, Baltimore, Maryland 21202 in care of The
Corporation Trust, Incorporated. The resident agent of the
Corporation in the State of Maryland is The Corporation
Trust, Incorporated, 300 East Lombard Street, Baltimore,
Maryland 21202, a Maryland Corporation.

FIFTH: (1) Upon the effective date of these Amended and
Restated Articles of Incorporation, the Corporation is
authorized to issue twelve billion (12,000,000,000) shares,
all of which shall be Common Stock having a par value of one-
tenth of one cent ($.001) per share and an aggregate par
value of twelve million dollars ($12,000,000). Until such
time as the Board of Directors shall provide otherwise in
accordance with paragraph (1)(d) of Article SEVENTH hereof,
three billion (3,000,000,000) of the authorized shares of
Common Stock of the Corporation are designated as Class A
Common Stock, three billion (3,000,000,000) of such shares
are designated as Class B Common Stock, three billion
(3,000,000,000) of such shares are designated as Class C
Common Stock and three billion (3,000,000,000) of such shares
are designated as Advisor Class Common Stock. The
preferences, conversions and other rights, voting powers,
restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption of the classes of
Common Stock are set forth in these Amended and Restated
Articles of Incorporation.

(2) As more fully set forth hereafter, the assets
and liabilities and the income and expenses of each class of
the Corporation's stock shall be determined separately from
those of each other class of the Corporation's stock and,
accordingly, the net asset value, the dividends and
distributions payable to holders, and the amounts
distributable in the event of dissolution of the Corporation
to holders of shares of the Corporation's stock may vary from
class to class.

(3) Except as otherwise provided herein, all
consideration received by the Corporation for the issuance or
sale of shares of a class of stock of the Corporation,
together with all funds derived from any investment and
reinvestment thereof, shall irrevocably belong to that class
for all purposes, subject-only to any automatic conversion of
one class of stock into another, as hereinafter provided for,
and to the rights of creditors, and shall be so recorded upon
the books of account of the Corporation, and are herein
referred to as "assets belonging to" such class.

<PAGE>

(4) The assets belonging to a class shall be
charged with the liabilities of the Corporation in respect of
such class and with such class, share of the general
liabilities of the Corporation, in the latter case in the
proportion that the net asset value of such class bears to
the net asset value of all classes or as otherwise determined
by the Board of Directors in accordance with law. The
determination of the Board of Directors shall be conclusive
as to the allocation of liabilities, including accrued
expenses and reserves, to a class.

(5) The assets attributable to the Class A Common
Stock, the assets attributable to the Class B Common Stock,
the assets attributable to the Class C Common Stock and the
assets attributable to the Advisor Class Common Stock shall
be invested in the same investment portfolio of the
Corporation, and notwithstanding the foregoing provisions of
paragraphs (3) and (4) of this Article FIFTH, the allocation
of investment income and realized and unrealized capital
gains and losses and expenses and liabilities of the
Corporation among the classes of stock of the Corporation
shall be determined by the Board of Directors in a manner
that is consistent with the Investment Company Act of 1940,
the rules and regulations thereunder, and the interpretations
thereof, in each case as from time to time amended, modified
or superseded. The determination of the Board of Directors
shall be conclusive as to the allocation of investment income
and realized and unrealized capital gains and losses,
expenses and liabilities (including accrued expenses and
reserves) and assets to a particular class or classes.

(6) Shares of each class of stock shall be entitled
to such dividends or distributions, in stock or in cash or
both, as may be declared from time to time by the Board of
Directors with respect to such class. Specifically, and
without limiting the generality of the foregoing, the
dividends and distributions of investment income and capital
gains with respect to the Class A Common Stock, Class B
Common Stock, Class C Common Stock and Advisor Class Common
Stock may vary with respect to each such class to reflect
differing allocations of the expenses of the Corporation
among the holders of the classes and any resultant
differences between the net asset values per share of the
classes, to such extent and for such purposes as the Board of
Directors may deem appropriate. The Board of Directors may
provide that dividends shall be payable only with respect to
those shares of stock that have been held of record
continuously by the stockholder for a specified period, not
to exceed 72 hours, prior to the record date of the dividend.

<PAGE>

(7) Except as provided below, on each matter
submitted to a vote of the stockholders, each holder of stock
shall be entitled to one vote for each share standing in his
or her name on the books of the Corporation. Subject to any
applicable requirements of the Investment Company Act of
1940, as from time to time in effect, or rules or orders of
the Securities and Exchange Commission or any successor
thereto, or other applicable law, all holders of shares of
stock shall vote as a single class except with respect to any
matter which affects only one or more (but less than all)
classes of stock, in which case only the holders of shares of
the classes affected shall be entitled to vote. Without
limiting the generality of the foregoing, and subject to any
applicable requirements of the Investment Company Act of
1940, as from time to time in effect, or rules or orders of
the Securities and Exchange Commission or any successor
thereto, or other applicable law, the holders of each of the
Class A Common Stock, Class B Common Stock, Class C Common
Stock and Advisor Class Common Stock shall have,
respectively, with respect to any matter submitted to a vote
of stockholders (i) exclusive voting rights with respect to
any such matter that only affects the class of Common Stock
of which they are holders, including, without limitation, the
provisions of any distribution plan adopted by the
Corporation pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (a "Plan") with respect to the class of
which they are holders and (ii) no voting rights with respect
to the provisions of any Plan that affects one or more of
such other classes of Common Stock, but not the class of
which they are holders, or with respect to any other matter
that does not affect the class of Common Stock of which they
are holders.

(8) In the event of the liquidation or dissolution
of the Corporation, stockholders of each class of the
Corporation's stock shall be entitled to receive, as a class,
out of the assets of the Corporation available for
distribution to stockholders, but other than general assets
not attributable to any particular class of stock, the assets
attributable to the class less the liabilities allocated to
that class; and the assets so distributable to the
stockholders of any class of stock shall be distributed among
such stockholders in proportion to the number of shares of
the class held by them and recorded on the books of the
Corporation. In the event that there are any general assets
not attributable to any particular class of stock, and such
assets are available for distribution, the distribution shall
be made to the holders of all classes in proportion to the
net asset value of the respective classes or as otherwise
determined by the Board of Directors.

<PAGE>

(9) (a) Each holder of stock may require the
Corporation to redeem all or any part of the stock owned by
that holder, upon request to the Corporation or its
designated agent, at the net asset value of the shares of
stock next determined following receipt of the request in a
form approved by the Corporation and accompanied by surrender
of the certificate or certificates for the shares, if any,
less the amount of any applicable redemption charge, deferred
sales charge, redemption fee or other amount imposed by the
Board of Directors (to the extent consistent with applicable
law). The Board of Directors may establish procedures for
redemption of stock.

(b) The proceeds of the redemption of a share
(including a fractional share) of any class of capital stock
of the Corporation shall be reduced by the amount of any
contingent deferred sales charge, redemption fee or other
amount payable on such redemption pursuant to the terms of
issuance of such share.

(c) The term "Minimum Amount" when used herein
shall mean two hundred dollars ($200) unless otherwise fixed
by the Board of Directors from time to time, provided that
the Minimum Amount-may not in any event exceed five million
dollars ($5,000,000). The Board of Directors may establish
differing Minimum Amounts for categories of holders of stock
based on such criteria as the Board of Directors may deem
appropriate.

(ii) If the net asset value of the shares of a
class of stock held by a stockholder shall be less than the
Minimum Amount then in effect with respect to the category of
holders in which the stockholder is included, the Corporation
may redeem all of those shares, upon notice given to the
holder in accordance with paragraph (iii) of this subsection
(c), to the extent that the Corporation may lawfully effect
such redemption under the laws of the State of Maryland.

(iii) The notice referred to in paragraph (ii) of
this subsection (c) shall be in writing personally delivered
or deposited in the mail, at least thirty days (or such other
number of days as may be specified from time to time by the
Board of Directors) prior to such redemption. If mailed, the
notice shall be addressed to the stockholder at his post
office address as shown on the books of the Corporation, and
sent by first class mail, postage prepaid. The price for
shares acquired by the Corporation pursuant to this
subsection (c) shall be an amount equal to the net asset
value of such shares, less the amount of any applicable
redemption charge, deferred sales charge, redemption fee or
other amount payable on such redemptions pursuant to the

<PAGE>

terms of issuance of such shares or imposed by the Board of
Directors (to the extent consistent with applicable law) or
provided for in the charter of the Corporation.

(d) Payment by the Corporation for shares of
stock of the Corporation surrendered to it for redemption
shall be made by the Corporation within seven days of such
surrender out of the funds legally available therefor,
provided that the Corporation may suspend the right of the
stockholders to redeem shares of stock and may postpone the
right of those holders to receive payment for any shares when
permitted or required to do so by applicable statutes or
regulations. Payment of the aggregate price of shares
surrendered for redemption may be made in cash or, at the
option of the Corporation, wholly or partly in such portfolio
securities of the Corporation as the Corporation shall
select.

(10) At such times as may be determined by the
Board of Directors (or with the authorization of the Board of
Directors, by the officers of--the Corporation) in accordance
with the Investment Company Act of 1940, applicable rules and
regulations' thereunder and applicable rules and regulations
of the National Association of Securities Dealers, Inc. and
from time to time reflected in the registration statement of
the Corporation (the "Corporation's Registration Statement"),
shares of a particular class of stock of the Corporation or
certain shares of a particular class of stock of the
Corporation may be automatically converted into shares of
another class of stock of the Corporation based on the
relative net asset values of such classes at the time of
conversion, subject, however, to any conditions of conversion
that may be imposed by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of
the Corporation) and reflected in the Corporation's
Registration Statement. The terms and conditions of such
conversion may vary within and among the classes to the
extent determined by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of
the Corporation) and set forth in the Corporation's
Registration Statement.

(11) For the purpose of allowing the net asset
value per share of a class of the Corporation's stock to
remain constant, the Corporation shall be entitled to declare
and pay and/or credit as dividends daily the net income
(which may include or give effect to realized and unrealized
gains and losses, as determined in accordance with the
Corporation's accounting and portfolio valuation policies) of
the Corporation attributable to the assets attributable to
that class. If the amount so determined for any day is

<PAGE>

negative, the Corporation shall be entitled, without the
payment of monetary compensation but in consideration of the
interest of the Corporation and its stockholders in
maintaining a constant net asset value per share of that
class, to redeem pro rata from all the holders of record of
shares of that class at the time of such redemption (in
proportion to their respective holdings thereof) sufficient
outstanding shares of that class, or fractions thereof, as
shall permit the net asset value per share of that class to
remain constant.

(12) The Corporation may issue shares of stock in
fractional denominations to the same extent as its whole
shares, and shares in fractional denominations shall be
shares of stock having proportionately to the respective
fractions represented thereby all the rights of whole shares,
including, without limitation, the right to vote, the right
to receive dividends and distributions, and the right to
participate upon liquidation of the Corporation, but
excluding any right to receive a stock certificate
representing fractional shares.

(13) No stockholder shall be entitled to any
preemptive right other than as the Board of Directors may
establish.

SIXTH: The initial number of directors of the Corporation
shall be one. The number of directors of the Corporation may
be changed pursuant to the By-Laws of the Corporation. The
name of the person who shall act as director of the
Corporation until the first annual meeting or until his
successor is chosen and qualified is Edmund P. Bergan, Jr.

SEVENTH: The following provisions are inserted for the
purpose of defining, limiting and regulating the powers of
the Corporation and of the Board of Directors and
stockholders.

(1) In addition to its other powers explicitly or
implicitly granted under these Articles of Incorporation, by
law or otherwise, the Board of Directors of the Corporation:

(a) is expressly authorized to make, alter, amend
or repeal the By-Laws of the Corporation;

(b) may from time to time determine whether, to
what extent, at what times and places, and under what
conditions and regulations the accounts and books of the
Corporation, or any of them, shall be open to the inspection
of the stockholders, and no stockholder shall ,have any right
to inspect any account, book or document of the Corporation

<PAGE>

except as conferred by statute or as authorized by the Board
of Directors of the Corporation;

(c) is empowered to authorize, without stockholder
approval, the issuance and sale from time to time of shares
of stock of any class or classes of the Corporation whether
now or hereafter authorized and securities convertible into
shares of stock of the Corporation of any class or classes,
whether now or hereafter authorized, for such consideration
as the Board may deem advisable.

(d) is authorized to classify or to reclassify,
from time to time, any unissued shares of stock of the
Corporation, whether now or hereafter authorized, by setting,
changing or eliminating the preferences, conversion or other
rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms and conditions of or
rights to require redemption of the stock. The provisions of
these Articles of Incorporation (including those in Article
FIFTH hereof) shall apply to each class of stock unless
otherwise provided by the Board of Directors prior to
issuance of any shares of that class; and

(e) is authorized to adopt procedures for
determination of and to maintain constant the net asset value
of shares of any class of the Corporation's stock.

(2) Notwithstanding any provision of the Maryland
General Corporation Law requiring a greater proportion than a
majority of the votes of all classes or of any class of the
Corporation's stock entitled to be cast in order to take or
authorize any action, any such action may be taken or
authorized upon the concurrence of a majority of the
aggregate number of votes entitled to be cast thereon subject
to any applicable requirements of the Investment Company Act
of 1940, as from time to time in effect, or rules or orders
of the Securities and Exchange Commission or any successor
thereto.

(3) The presence in person or by proxy of the
holders of shares entitled to cast one-third of the votes
entitled to be cast (without regard to class) shall
constitute a quorum at any meeting of the stockholders,
except with respect to any matter which, under applicable
statutes or regulatory requirements, requires approval by a
separate vote of one or more classes of stock, in which case
the presence in person or by proxy of the holders of shares
entitled to cast one-third of the votes entitled to be cast
by each class entitled to vote as a class on the matter shall
constitute a quorum.

<PAGE>

(4) Any determination made in good faith by or
pursuant to the direction of the Board of Directors, as to
the amount of the assets, debts, obligations, or liabilities
of the Corporation as to the amount of any reserves or
charges set up and the propriety thereof, as to the time of
or purpose for creating such reserves or charges, as to the
use, alteration or cancellation of any reserves or charges
(whether or not any debt, obligation, or liability for which
such reserves or charges shall have been created shall be
then or thereafter required to be paid or discharged), as to
the value of or the method of valuing any investment owned or
held by the Corporation, as to market value or fair value of
any investment or fair value of any other asset of the
Corporation, as to the allocation of any asset of the
Corporation to a particular class or classes of the
Corporation's stock, as to the charging of any liability of
the Corporation to a particular class or classes of the
Corporation's stock, as to the number of shares of the
Corporation outstanding, as to the estimated expense to the
Corporation in connection with purchases of its shares, as to
the ability to liquidate investments in orderly fashion, or
as to any other matters relating to the issue, sale,
redemption or other acquisition or disposition of investments
or shares of the Corporation, shall be final and conclusive
and shall be binding upon the Corporation and all holders of
its shares, past, present and future, and shares of the
Corporation are issued and sold on the condition and
understanding that any and all such determinations shall be
binding as aforesaid.

EIGHTH: (1) To the full extent that limitations on the
liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of
the Corporation shall have any liability to the Corporation
or its stockholders for money damages. This limitation on
liability.applies to events occurring at the time a person
serves as a director or officer of the Corporation whether or
not that person is a director or officer at the time of any
proceeding in which liability is asserted.

(2) The Corporation shall indemnify and advance
expenses to its currently acting and its former directors to
the full extent that indemnification of directors is
permitted by the Maryland General Corporation Law. The
Corporation shall indemnify and advance expenses to its
officers to the same extent as its directors and may do so to
such further extent as is consistent with law. The Board of
Directors may by By- Law, resolution or agreement make
further provision for indemnification of directors, officers,
employees and agents to the full extent permitted by the
Maryland General Corporation Law.

<PAGE>

(3) No provision of this Article shall be
effective to protect or purport to protect any director or
officer of the Corporation against any liability to the
Corporation or its stockholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.

(4) References to the Maryland and General
Corporation Law in this Article are to that law as from time
to time amended. No amendment to the Charter of the
Corporation shall affect any right of any person under this
Article based on any event, omission or proceeding prior to
the amendment.

NINTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in its Charter in
the manner now or hereafter prescribed by the laws of the
State of Maryland, including any amendment which alters the
contract rights, as expressly set forth in the Charter, of
any outstanding stock, and all rights conferred upon
stockholders herein are granted subject to this reservation.

III. The amendment and restatement of the Articles
of Incorporation of the Corporation as hereinabove set forth
have been duly approved by Edmund P. Bergan, Jr., the sole
member of the Board of Directors of the Corporation. No stock
entitled to be voted on the matter was outstanding or
subscribed for at the time of approval.

IV. Immediately prior to these Articles of
Amendment and Restatement becoming effective, the Corporation
had authority to issue nine billion (9,000,000,000) shares of
Common Stock having a par value of one-tenth of one cent
($.001) per share and an aggregate par value of nine million
dollars ($9,000,000), of which three billion (3,000,000,000)
shares were designated as Class A Common Stock, three billion
(3,000,000,000) shares were designated as Class B Common
Stock and three billion (3,000,000,000) shares were
designated as Class C Common Stock. Upon these Articles of
Amendment and Restatement becoming effective, the Corporation
is authorized to issue twelve billion (12,000,000,000) shares
of Common Stock having a par value of one-tenth of one cent
($.001) per share and an aggregate par value of twelve
million dollars ($12,000,000), of which three billion
(3,000,000,000) shares are designated as Class A Common
Stock, three billion (3,000,000,000) shares are designated as
Class B Common Stock, three billion (3,000,000,000) shares
are designated as Class C Common Stock and three billion
(3,000,000,000) shares are designated as Advisor Class Common

<PAGE>

Stock. The preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the
classes of Common Stock are set forth in these Articles of
Amendment and Restatement.

The undersigned President of the Corporation
acknowledges these Articles of Amendment and Restatement to
be the corporate act of the Corporation and states to the
best of his knowledge, information and belief that the
matters and facts set forth in these Articles of Amendment
and Restatement with respect to the authorization and
approval hereof are true in all material respects and that
this statement is made under the penalties of perjury.

IN WITNESS WHEREOF, Alliance Health Care Fund, Inc.
has caused these Articles of Amendment and Restatement to be
signed and filed in its name and on its behalf by its
President and witnessed by its Secretary on June 25, 1999.

ALLIANCE HEALTH CARE FUND, INC.

/s/ John D. Carifa
By:______________________________
John D. Carifa
President

WITNESS:

/s/ Edmund P. Bergan
______________________________
Edmund P. Bergan
Secretary

11
00250248.AD7

<PAGE>

BY-LAWS

ALLIANCE HEALTH CARE FUND, INC.
________________

ARTICLE I

Offices

Section 1. Principal Office in Maryland. The

Corporation shall have a principal office in the City of

Baltimore, State of Maryland.

Section 2. Other Offices. The Corporation may have

offices also at such other places within and without the State of

Maryland as the Board of Directors may from time to time

determine or as the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

Section 1. Place of Meeting. Meetings of stockholders

shall be held at such place, either within the State of Maryland

or at such other place within the United States, as shall be

fixed from time to time by the Board of Directors.

Section 2. Annual Meetings. Annual meetings of

stockholders shall be held on a date fixed from time to time by

the Board of Directors not less than ninety nor more than one

hundred twenty days following the end of each fiscal year of the

Corporation, for the election of directors and the transaction of

any other business within the powers of the Corporation;

<PAGE>

provided, however, that the Corporation shall not be required to

hold an annual meeting in any year in which the election of

directors is not required to be acted on by stockholders under

the Investment Company Act of 1940.

Section 3. Notice of Annual Meeting. Written or

printed notice of the annual meeting, stating the place, date and

hour thereof, shall be given to each stockholder entitled to vote

thereat and each other stockholder entitled to notice thereof not

less than ten nor more than ninety days before the date of the

meeting.

Section 4. Special Meetings. Special meetings of

stockholders may be called by the chairman, the president or by

the Board of Directors and shall be called by the secretary upon

the written request of holders of shares entitled to cast not

less than a majority of all the votes entitled to be cast at such

meeting. Such request shall state the purpose or purposes of

such meeting and the matters proposed to be acted on thereat. In

the case of such request for a special meeting, upon payment by

such stockholders to the Corporation of the estimated reasonable

cost of preparing and mailing a notice of such meeting, the

secretary shall give the notice of such meeting. The secretary

shall not be required to call a special meeting to consider any

matter which is substantially the same as a matter acted upon at

any special meeting of stockholders held within the preceding

twelve months unless requested to do so by holders of shares

<PAGE>

entitled to cast not less than a majority of all votes entitled

to be cast at such meeting. Notwithstanding the foregoing,

special meetings of stockholders for the purpose of voting upon

the question of removal of any director or directors of the

Corporation shall be called by the secretary upon the written

request of holders of shares entitled to cast not less than ten

percent of all the votes entitled to be cast at such meeting.

Section 5. Notice of Special Meeting. Written or

printed notice of a special meeting of stockholders, stating the

place, date, hour and purpose thereof, shall be given by the

secretary to each stockholder entitled to vote thereat and each

other stockholder entitled to notice thereof not less than ten

nor more than ninety days before the date fixed for the meeting.

Section 6. Business of Special Meetings. Business

transacted at any special meeting of stockholders shall be

limited to the purposes stated in the notice thereof.

Section 7. Quorum. The holders of shares entitled to

cast one-third of the votes entitled to be cast thereat, present

in person or represented by proxy, shall constitute a quorum at

all meetings of the stockholders for the transaction of business,

except with respect to any matter which, under applicable

statutes or regulatory requirements, requires approval by a

separate vote of one or more classes of stock, in which case the

presence in person or by proxy of the holders of one-third of the

<PAGE>

shares of stock of each class required to vote as a class on the

matter shall constitute a quorum.

Section 8. Voting. When a quorum is present at any

meeting, the affirmative vote of a majority of the votes cast,

or, with respect to any matter requiring a class vote, the

affirmative vote of a majority of the votes cast of each class

entitled to vote as a class on the matter, shall decide any

question brought before such meeting (except that directors may

be elected by the affirmative vote of a plurality of the votes

cast), unless the question is one upon which by express provision

of the Investment Company Act of 1940, as from time to time in

effect, or other statutes or rules or orders of the Securities

and Exchange Commission or any successor thereto or of the

Articles of Incorporation a different vote is required, in which

case such express provision shall govern and control the decision

of such question.

Section 9. Proxies. Each stockholder shall at every

meeting of stockholders be entitled to one vote in person or by

proxy for each share of the stock having voting power held by

such stockholder, but no proxy shall be voted after eleven months

from its date, unless otherwise provided in the proxy.

Section 10. Record Date. In order that the Corporation

may determine the stockholders entitled to notice of or to vote

at any meeting of stockholders or any adjournment thereof, to

express consent to corporate action in writing without a meeting,

<PAGE>

or to receive payment of any dividend or other distribution or

allotment of any rights, or entitled to exercise any rights in

respect of any change, conversion or exchange of stock or for the

purpose of any other lawful action, the Board of Directors may

fix, in advance, a record date which shall be not more than

ninety days and, in the case of a meeting of stockholders, not

less than ten days prior to the date on which the particular

action requiring such determination of stockholders is to be

taken. In lieu of fixing a record date, the Board of Directors

may provide that the stock transfer books shall be closed for a

stated period, but not to exceed, in any case, twenty days. If

the stock transfer books are closed for the purpose of

determining stockholders entitled to notice of or to vote at a

meeting of stockholders, such books shall be closed for at least

ten days immediately preceding such meeting. If no record date

is fixed and the stock transfer books are not closed for the

determination of stockholders: (1) The record date for the

determination of stockholders entitled to notice of, or to vote

at, a meeting of stockholders shall be at the close of business

on the day on which notice of the meeting of stockholders is

mailed or the day thirty days before the meeting, whichever is

the closer date to the meeting; and (2) The record date for the

determination of stockholders entitled to receive payment of a

dividend or an allotment of any rights shall be at the close of

business on the day on which the resolution of the Board of

<PAGE>

Directors, declaring the dividend or allotment of rights, is

adopted, provided that the payment or allotment date shall not be

more than sixty days after the date of the adoption of such

resolution.

Section 11. Inspectors of Election. The directors, in

advance of any meeting, may, but need not, appoint one or more

inspectors to act at the meeting or any adjournment thereof. If

an inspector or inspectors are not appointed, the person

presiding at the meeting may, but need not, appoint one or more

inspectors. In case any person who may be appointed as an

inspector fails to appear or act, the vacancy may be filled by

appointment made by the directors in advance of the meeting or at

the meeting by the person presiding thereat. Each inspector, if

any, before entering upon the discharge of his duties, shall take

and sign an oath faithfully to execute the duties of inspector at

such meeting with strict impartiality and according to the best

of his ability. The inspectors, if any, shall determine the

number of shares outstanding and the voting power of each, the

shares represented at the meeting, the existence of a quorum, the

validity and effect of proxies, and shall receive votes, ballots

or consents, hear and determine all challenges and questions

arising in connection with the right to vote, count and tabulate

all votes, ballots or consents, determine the result, and do such

acts as are proper to conduct the election or vote with fairness

to all stockholders. On request of the person presiding at the

<PAGE>

meeting or any stockholder, the inspector or inspectors, if any,

shall make a report in writing of any challenge, question or

matter determined by him or them and execute a certificate of any

fact found by him or them.

Section 12. Informal Action by Stockholders. Except to

the extent prohibited by the Investment Company Act of 1940, as

from time to time in effect, or rules or orders of the Securities

and Exchange Commission or any successor thereto, any action

required or permitted to be taken at any meeting of stockholders

may be taken without a meeting if a consent in writing, setting

forth such action, is signed by all the stockholders entitled to

vote on the subject matter thereof and any other stockholders

entitled to notice of a meeting of stockholders (but not to vote

thereat) have waived in writing any rights which they may have to

dissent from such action, and such consent and waiver are filed

with the records of the Corporation.

Section 13. Adjournment. Any meeting of the

stockholders may be adjourned from time to time, without notice

other than by announcement at the meeting at which the

adjournment was taken. In the absence of a quorum, the

stockholders present in person or by proxy, by majority vote of

those present and without notice other than by announcement at

the meeting, may adjourn the meeting from time to time as

provided for in this Section 13 of Article II. At any adjourned

meeting at which a quorum shall be present, any action may be

<PAGE>

taken that could have been taken at the meeting originally

called. A meeting of the stockholders may not be adjourned

without further notice to a date more than 120 (one hundred and

twenty) days after the original record date determined pursuant

to Section 10 of this Article II.

ARTICLE III

Board of Directors

Section 1. Number of Directors. The number of

directors constituting the entire Board of Directors (which

initially was fixed at one in the Corporation's Articles of

Incorporation) may be increased or decreased from time to time by

the vote of a majority of the entire Board of Directors within

the limits permitted by law but at no time may be more than

twenty, but the tenure of office of a director in office at the

time of any decrease in the number of directors shall not be

affected as a result thereof. The directors shall be elected to

hold offices at the annual meeting of stockholders, except as

provided in Section 2 of this Article, and each director shall

hold office until the next annual meeting of stockholders or

until his successor is elected and qualified. Any director may

resign at any time upon written notice to the Corporation. Any

director may be removed, either with or without cause, at any

meeting of stockholders duly called and at which a quorum is

present by the affirmative vote of the majority of the votes

entitled to be cast thereon, and the vacancy in the Board of

<PAGE>

Directors caused by such removal may be filled by the

stockholders at the time of such removal. Directors need not be

stockholders.

Section 2. Vacancies and Newly-Created Directorships.

Any vacancy occurring in the Board of Directors for any cause

other than by reason of an increase in the number of directors

may be filled by a majority of the remaining members of the Board

of Directors although such majority is less than a quorum. Any

vacancy occurring by reason of an increase in the number of

directors may be filled by a majority of the entire Board of

Directors then in office. A director elected by the Board of

Directors to fill a vacancy shall be elected to hold office until

the next annual meeting of stockholders or until his successor is

elected and qualifies.

Section 3. Powers. The business and affairs of the

Corporation shall be managed by or under the direction of the

Board of Directors which may exercise all such powers of the

Corporation and do all such lawful acts and things as are not by

statute or by the Articles of Incorporation or by these By-Laws

conferred upon or reserved to the stockholders.

Section 4. Meetings. The Board of Directors of the

Corporation or any committee thereof may hold meetings, both

regular and special, either within or without the State of

Maryland. Regular meetings of the Board of Directors may be held

without notice at such time and at such place as shall from time

<PAGE>

to time be determined by the Board of Directors. Special

meetings of the Board of Directors may be called by the chairman,

the president or by two or more directors. Notice of special

meetings of the Board of Directors shall be given by the

secretary to each director at least three days before the meeting

if by mail or at least 24 hours before the meeting if given in

person or by telephone or by telegraph. The notice need not

specify the business to be transacted.

Section 5. Quorum and Voting. During such times when

the Board of Directors shall consist of more than one director, a

quorum for the transaction of business at meetings of the Board

of Directors shall consist of two of the directors in office at

the time but in no event shall a quorum consist of less than one-

third of the entire Board of Directors. The action of a majority

of the directors present at a meeting at which a quorum is

present shall be the action of the Board of Directors. If a

quorum shall not be present at any meeting of the Board of

Directors, the directors present thereat may adjourn the meeting

from time to time, without notice other than announcement at the

meeting, until a quorum shall be present.

Section 6. Committees. The Board of Directors may

appoint from among its members an executive committee and other

committees of the Board of Directors, each committee to be

composed of two or more of the directors of the Corporation. The

Board of Directors may delegate to such committees any of the

<PAGE>

powers of the Board of Directors except those which may not by

law be delegated to a committee. Such committee or committees

shall have the name or names as may be determined from time to

time by resolution adopted by the Board of Directors. Unless the

Board of Directors designates one or more directors as alternate

members of any committee, who may replace an absent or

disqualified member at any meeting of the committee, the members

of any such committee present at any meeting and not disqualified

from voting may, whether or not they constitute a quorum, appoint

another member of the Board of Directors to act at the meeting in

the place of any absent or disqualified member of such committee.

At meetings of any such committee, a majority of the members or

alternate members of such committee shall constitute a quorum for

the transaction of business and the act of a majority of the

members or alternate members present at any meeting at which a

quorum is present shall be the act of the committee.

Section 7. Minutes of Committee Meetings. The

committees shall keep regular minutes of their proceedings.

Section 8. Informal Action by Board of Directors and

Committees. Any action required or permitted to be taken at any

meeting of the Board of Directors or of any committee thereof may

be taken without a meeting if a written consent thereto is signed

by all members of the Board of Directors or of such committee, as

the case may be, and such written consent is filed with the

minutes of proceedings of the Board of Directors or committee,

<PAGE>

provided, however, that such written consent shall not constitute

approval of any matter which pursuant to the Investment Company

Act of 1940 and the rules thereunder requires the approval of

directors by vote cast in person at a meeting.

Section 9. Meetings by Conference Telephone. The

members of the Board of Directors or any committee thereof may

participate in a meeting of the Board of Directors or committee

by means of a conference telephone or similar communications

equipment by means of which all persons participating in the

meeting can hear each other at the same time and such

participation shall constitute presence in person at such

meeting, provided, however, that such participation shall not

constitute presence in person with respect to matters which

pursuant to the Investment Company Act of 1940 and the rules

thereunder require the approval of directors by vote cast in

person at a meeting.

Section 10. Fees and Expenses. The directors may be

paid their expenses of attendance at each meeting of the Board of

Directors and may be paid a fixed sum for attendance at each

meeting of the Board of Directors, a stated salary as director or

such other compensation as the Board of Directors may approve.

No such payment shall preclude any director from serving the

Corporation in any other capacity and receiving compensation

therefor. Members of special or standing committees may be

<PAGE>

allowed like reimbursement and compensation for attending

committee meetings.

ARTICLE IV

Notices

Section 1. General. Notices to directors and

stockholders mailed to them at their post office addresses

appearing on the books of the Corporation shall be deemed to be

given at the time when deposited in the United States mail.

Section 2. Waiver of Notice. Whenever any notice is

required to be given under the provisions of the statutes, of the

Articles of Incorporation or of these By-Laws, a waiver thereof

in writing, signed by the person or persons entitled to said

notice, whether before or after the time stated therein, shall be

deemed the equivalent of notice and such waiver shall be filed

with the records of the meeting. Attendance of a person at a

meeting shall constitute a waiver of notice of such meeting

except when the person attends a meeting for the express purpose

of objecting, at the beginning of the meeting, to the transaction

of any business because the meeting is not lawfully called or

convened.

ARTICLE V

Officers

Section 1. General. The officers of the Corporation

shall be chosen by the Board of Directors at its first meeting

after each annual meeting of stockholders and shall be a chairman

<PAGE>

of the Board of Directors, a president, a secretary and a

treasurer. The Board of Directors may choose also such vice

presidents and additional officers or assistant officers as it

may deem advisable. Any number of offices, except the offices of

president and vice president and chairman and vice president, may

be held by the same person. No officer shall execute,

acknowledge or verify any instrument in more than one capacity if

such instrument is required by law to be executed, acknowledged

or verified by two or more officers.

Section 2. Other Officers and Agents. The Board of

Directors may appoint such other officers and agents as it

desires who shall hold their offices for such terms and shall

exercise such powers and perform such duties as shall be

determined from time to time by the Board of Directors.

Section 3. Tenure of Officers. The officers of the

Corporation shall hold office at the pleasure of the Board of

Directors. Each officer shall hold his office until his

successor is elected and qualifies or until his earlier

resignation or removal. Any officer may resign at any time upon

written notice to the Corporation. Any officer elected or

appointed by the Board of Directors may be removed at any time by

the Board of Directors when, in its judgment, the best interests

of the Corporation will be served thereby. Any vacancy occurring

in any office of the Corporation by death, resignation, removal

or otherwise shall be filled by the Board of Directors.

<PAGE>

Section 4. Chairman of the Board of Directors. The

chairman of the Board of Directors shall preside at all meetings

of the stockholders and of the Board of Directors. He shall be

the chief executive officer and shall have general and active

management of the business of the Corporation and shall see that

all orders and resolutions of the Board of Directors are carried

into effect. He shall be ex officio a member of all committees

designated by the Board of Directors except as otherwise

determined by the Board of Directors. He shall execute bonds,

mortgages and other contracts requiring a seal, under the seal of

the Corporation, except where required or permitted by law to be

otherwise signed and executed and except where the signing and

execution thereof shall be expressly delegated by the Board of

Directors to some other officer or agent of the Corporation.

Section 5. President. The president shall act under

the direction of the chairman and in the absence or disability of

the chairman shall perform the duties and exercise the powers of

the chairman. He shall perform such other duties and have such

other powers as the chairman or the Board of Directors may from

time to time prescribe. He shall execute on behalf of the

Corporation, and may affix the seal or cause the seal to be

affixed to, all instruments requiring such execution except to

the extent that signing and execution thereof shall be expressly

delegated by the Board of Directors to some other officer or

agent of the Corporation.

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Section 6. Vice Presidents. The vice presidents shall

act under the direction of the chairman and in the absence or

disability of the president shall perform the duties and exercise

the powers of the president. They shall perform such other

duties and have such other powers as the chairman or the Board of

Directors may from time to time prescribe. The Board of

Directors may designate one or more executive vice presidents or

may otherwise specify the order of seniority of the vice

presidents and, in that event, the duties and powers of the

president shall descend to the vice presidents in the specified

order of seniority.

Section 7. Secretary. The secretary shall act under

the direction of the chairman. Subject to the direction of the

chairman he shall attend all meetings of the Board of Directors

and all meetings of stockholders and record the proceedings in a

book to be kept for that purpose and shall perform like duties

for the committees designated by the Board of Directors when

required. He shall give, or cause to be given, notice of all

meetings of stockholders and special meetings of the Board of

Directors, and shall perform such other duties as may be

prescribed by the chairman or the Board of Directors. He shall

keep in safe custody the seal of the Corporation and shall affix

the seal or cause it to be affixed to any instrument requiring

it.

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Section 8. Assistant Secretaries. The assistant

secretaries in the order of their seniority, unless otherwise

determined by the chairman or the Board of Directors, shall, in

the absence or disability of the secretary, perform the duties

and exercise the powers of the secretary. They shall perform

such other duties and have such other powers as the chairman or

the Board of Directors may from time to time prescribe.

Section 9. Treasurer. The treasurer shall act under

the direction of the chairman. Subject to the direction of the

chairman he shall have the custody of the corporate funds and

securities and shall keep full and accurate accounts of receipts

and disbursements in books belonging to the Corporation and shall

deposit all moneys and other valuable effects in the name and to

the credit of the Corporation in such depositories as may be

designated by the Board of Directors. He shall disburse the

funds of the Corporation as may be ordered by the chairman or the

Board of Directors, taking proper vouchers for such

disbursements, and shall render to the chairman and the Board of

Directors, at its regular meetings, or when the Board of

Directors so requires, an account of all his transactions as

treasurer and of the financial condition of the Corporation.

Section 10. Assistant Treasurers. The assistant

treasurers in the order of their seniority, unless otherwise

determined by the chairman or the Board of Directors, shall, in

the absence or disability of the treasurer, perform the duties

<PAGE>

and exercise the powers of the treasurer. They shall perform

such other duties and have such other powers as the chairman or

the Board of Directors may from time to time prescribe.

ARTICLE VI

Certificates of Stock

Section 1. General. Every holder of stock of the

Corporation who has made full payment of the consideration for

such stock shall be entitled upon request to have a certificate,

signed by, or in the name of the Corporation by, the chairman,

the president or a vice president and countersigned by the

treasurer or an assistant treasurer or the secretary or an

assistant secretary of the Corporation, certifying the number

and, if additional shares of stock should be authorized, the

class of whole shares of stock owned by him in the Corporation.

Section 2. Fractional Share Interests. The Corporation

may issue fractions of a share of stock. Fractional shares of

stock shall have proportionately to the respective fractions

represented thereby all the rights of whole shares, including the

right to vote, the right to receive dividends and distributions

and the right to participate upon liquidation of the Corporation,

excluding, however, the right to receive a stock certificate

representing such fractional shares.

Section 3. Signatures on Certificates. Any of or all

the signatures on a certificate may be a facsimile. In case any

officer who has signed or whose facsimile signature has been

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placed upon a certificate shall cease to be such officer before

such certificate is issued, it may be issued with the same effect

as if he were such officer at the date of issue. The seal of the

Corporation or a facsimile thereof may, but need not, be affixed

to certificates of stock.

Section 4. Lost, Stolen or Destroyed Certificates. The

Board of Directors may direct a new certificate or certificates

to be issued in place of any certificate or certificates

theretofore issued by the Corporation alleged to have been lost,

stolen or destroyed, upon the making of any affidavit of that

fact by the person claiming the certificate or certificates to be

lost, stolen or destroyed. When authorizing such issue of a new

certificate or certificates, the Board of Directors may, in its

discretion and as a condition precedent to the issuance thereof,

require the owner of such lost, stolen or destroyed certificate

or certificates, or his legal representative, to give the

Corporation a bond in such sum as it may direct as indemnity

against any claim that may be made against the Corporation with

respect to the certificate or certificates alleged to have been

lost, stolen or destroyed.

Section 5. Transfer of Shares. Upon request by the

registered owner of shares, and if a certificate has been issued

to represent such shares upon surrender to the Corporation or a

transfer agent of the Corporation of a certificate for shares of

stock duly endorsed or accompanied by proper evidence of

<PAGE>

succession, assignment or authority to transfer, it shall be the

duty of the Corporation, if it is satisfied that all provisions

of the Articles of Incorporation, of the By-Laws and of the law

regarding the transfer of shares have been duly complied with, to

record the transaction upon its books, issue a new certificate to

the person entitled thereto upon request for such certificate,

and cancel the old certificate, if any.

Section 6. Registered Owners. The Corporation shall be

entitled to recognize the person registered on its books as the

owner of shares to be the exclusive owner for all purposes

including voting and dividends, and the Corporation shall not be

bound to recognize any equitable or other claim to or interest in

such share or shares on the part of any other person, whether or

not it shall have express or other notice thereof, except as

otherwise provided by the laws of Maryland.

ARTICLE VII

Miscellaneous

Section 1. Reserves. There may be set aside out of any

funds of the Corporation available for dividends such sum or sums

as the Board of Directors from time to time, in their absolute

discretion, think proper as a reserve or reserves to meet

contingencies, or for such other purpose as the Board of

Directors shall think conducive to the interest of the

Corporation, and the Board of Directors may modify or abolish any

such reserve.

<PAGE>

Section 2. Dividends. Dividends upon the stock of the

Corporation may, subject to the provisions of the Articles of

Incorporation and of applicable law, be declared by the Board of

Directors at any time. Dividends may be paid in cash, in

property or in shares of the Corporation's stock, subject to the

provisions of the Articles of Incorporation and of applicable

law.

Section 3. Capital Gains Distributions. The amount and

number of capital gains distributions paid to the stockholders

during each fiscal year shall be determined by the Board of

Directors. Each such payment shall be accompanied by a statement

as to the source of such payment, to the extent required by law.

Section 4. Checks. All checks or demands for money and

notes of the Corporation shall be signed by such officer or

officers or such other person or persons as the Board of

Directors may from time to time designate.

Section 5. Fiscal Year. The fiscal year of the

Corporation shall be fixed by resolution of the Board of

Directors.

Section 6. Seal. The corporate seal shall have

inscribed thereon the name of the Corporation, the year of its

organization and the words "Corporate Seal, Maryland." The seal

may be used by causing it or a facsimile thereof to be impressed

or affixed or in another manner reproduced.

<PAGE>

Section 7. Insurance Against Certain Liabilities. The

Corporation shall not bear the cost of insurance that protects or

purports to protect directors and officers of the Corporation

against any liabilities to the Corporation or its security

holders to which any such director or officer would otherwise be

subject by reason of willful misfeasance, bad faith, gross

negligence or reckless disregard of the duties involved in the

conduct of his office.

ARTICLE VIII

Indemnification

Section 1. Indemnification of Directors and Officers.

The Corporation shall indemnify its directors to the full extent

that indemnification of directors is permitted by the Maryland

General Corporation Law. The Corporation shall indemnify its

officers to the same extent as its directors and to such further

extent as is consistent with law. The Corporation shall

indemnify its directors and officers who while serving as

directors or officers also serve at the request of the

Corporation as a director, officer, partner, trustee, employee,

agent or fiduciary of another corporation, partnership, joint

venture, trust, other enterprise or employee benefit plan to the

full extent consistent with law. The indemnification and other

rights provided by this Article shall continue as to a person who

has ceased to be a director or officer and shall inure to the

benefit of the heirs, executors and administrators of such a

<PAGE>

person. This Article shall not protect any such person against

any liability to the Corporation or any stockholder thereof to

which such person would otherwise be subject by reason of willful

misfeasance, bad faith, gross negligence or reckless disregard of

the duties involved in the conduct of his office ("disabling

conduct").

Section 2. Advances. Any current or former director or

officer of the Corporation seeking indemnification within the

scope of this Article shall be entitled to advances from the

Corporation for payment of the reasonable expenses incurred by

him in connection with the matter as to which he is seeking

indemnification in the manner and to the full extent permissible

under the Maryland General Corporation Law. The person seeking

indemnification shall provide to the Corporation a written

affirmation of his good faith belief that the standard of conduct

necessary for indemnification by the Corporation has been met and

a written undertaking to repay any such advance if it should

ultimately be determined that the standard of conduct has not

been met. In addition, at least one of the following additional

conditions shall be met: (a) the person seeking indemnification

shall provide a security in form and amount acceptable to the

Corporation for his undertaking; (b) the Corporation is insured

against losses arising by reason of the advance; or (c) a

majority of a quorum of directors of the Corporation who are

neither "interested persons" as defined in Section 2(a)(19) of

<PAGE>

the Investment Company Act of 1940, as amended, nor parties to

the proceeding ("disinterested non-party directors"), or

independent legal counsel, in a written opinion, shall have

determined, based on a review of facts readily available to the

Corporation at the time the advance is proposed to be made, that

there is reason to believe that the person seeking

indemnification will ultimately be found to be entitled to

indemnification.

Section 3. Procedure. At the request of any person

claiming indemnification under this Article, the Board of

Directors shall determine, or cause to be determined, in a manner

consistent with the Maryland General Corporation Law, whether the

standards required by this Article have been met.

Indemnification shall be made only following: (a) a final

decision on the merits by a court or other body before whom the

proceeding was brought that the person to be indemnified was not

liable by reason of disabling conduct or (b) in the absence of

such a decision, a reasonable determination, based upon a review

of the facts, that the person to be indemnified was not liable by

reason of disabling conduct by (i) the vote of a majority of a

quorum of disinterested non-party directors or (ii) an

independent legal counsel in a written opinion.

Section 4. Indemnification of Employees and Agents.

Employees and agents who are not officers or directors of the

Corporation may be indemnified, and reasonable expenses may be

<PAGE>

advanced to such employees or agents, as may be provided by

action of the Board of Directors or by contract, subject to any

limitations imposed by the Investment Company Act of 1940.

Section 5. Other Rights. The Board of Directors may

make further provision consistent with law for indemnification

and advance of expenses to directors, officers, employees and

agents by resolution, agreement or otherwise. The

indemnification provided by this Article shall not be deemed

exclusive of any other right, with respect to indemnification or

otherwise, to which those seeking indemnification may be entitled

under any insurance or other agreement or resolution of

stockholders or disinterested directors or otherwise. The rights

provided to any person by this Article shall be enforceable

against the Corporation by such person who shall be presumed to

have relied upon it in serving or continuing to serve as a

director, officer, employee, or agent as provided above.

Section 6. Amendments. References in this Article are

to the Maryland General Corporation Law and to the Investment

Company Act of 1940 as from time to time amended. No amendment

of these By-Laws shall affect any right of any person under this

Article based on any event, omission or proceeding prior to the

amendment.

<PAGE>

ARTICLE IX

Amendments

The Board of Directors shall have the power to make,

alter and repeal By-Laws of the Corporation.

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