This is filed pursuant to Rule 497(e).
File Nos.: 002-61564 and 811-02835
YIELDS
For current recorded yield information on the Funds, call toll-free:
(800):221-9513
The Funds are open-end management investment companies with investment
objectives of safety, liquidity and maximum current income (in the case of the
New York, California, Connecticut, New Jersey, Virginia, Florida and
Massachusetts Portfolios of Alliance Municipal Trust, exempt from Federal and
state income taxes of the respective states) to the extent consistent with the
first two objectives. Alliance Money Reserves and Alliance Treasury Reserves
are diversified. The New York, California, Connecticut, New Jersey, Virginia,
Florida and Massachusetts Portfolios of Alliance Municipal Trust are
non-diversified, and are offered only to residents of each such respective
state. This prospectus sets forth the information about each Fund that a
prospective investor should know before investing. Please retain it for future
reference.
AN INVESTMENT IN A FUND IS (I) NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT; (II) NOT A DEPOSIT OR OBLIGATION OF OR GUARANTEED OR ENDORSED BY,
ANY BANK; AND (III) NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO
ASSURANCE THAT A FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE. THE PORTFOLIOS OF ALLIANCE MUNICIPAL TRUST MAY INVEST A
SIGNIFICANT PORTION OF THEIR ASSETS IN THE SECURITIES OF A SINGLE ISSUER.
ACCORDINGLY, AN INVESTMENT IN SUCH PORTFOLIOS MAY BE RISKIER THAN AN INVESTMENT
IN OTHER TYPES OF MONEY MARKET FUNDS.
A "Statement of Additional Information" for each Fund dated October 31, 1997,
which provides a further discussion of certain areas in this prospectus and
other matters which may be of interest to some investors, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
A free copy may be obtained by contacting your broker.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE
CONTENTS
EXPENSE INFORMATION 2
FINANCIAL HIGHLIGHTS 3
INVESTMENT OBJECTIVES AND POLICIES 7
PURCHASE AND REDEMPTION OF SHARES 10
ADDITIONAL INFORMATION 11
DISCOVER BROKERAGE DIRECT
A MORGAN STANLEY DEAN WITTER COMPANY
FEATURING...
ALLIANCE MONEY RESERVES
ALLIANCE TREASURY RESERVES
ALLIANCE MUNICIPAL TRUST
- - CALIFORNIA PORTFOLIO
- - CONNECTICUT PORTFOLIO
- - FLORIDA PORTFOLIO
- - MASSACHUSETTS PORTFOLIO
- - NEW JERSEY PORTFOLIO
- - NEW YORK PORTFOLIO
- - VIRGINIA PORTFOLIO
PROSPECTUS
OCTOBER 31, 1997
333 MARKET STREET, 25TH FLOOR
SAN FRANCISCO, CA94105
WWW.DISCOVERBROKERAGE.COM
MEMBER NASD/SIPC
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Funds have no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets, after expense reimbursement)
<TABLE>
<CAPTION>
AMR ATR AMT-NY AMT-CA AMT-CT AMT-NJ AMT-VA AMT-FL AMT-MA
------- ------- ------- -------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees .48% .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees .25 .25 .25 .25 .25 .25 .25 .25 .25
Other Expenses .27 .25 .25 .25 .25 .25 .25 .25 .25
Total Fund
Operating Expenses 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period):
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
AMR $10 $32 $55 $122
ATR $10 $32 $55 $122
AMT--New York $10 $32 $55 $122
AMT--California $10 $32 $55 $122
AMT--Connecticut $10 $32 $55 $122
AMT--New Jersey $10 $32 $55 $122
AMT--Virginia $10 $32 $55 $122
AMT--Florida $10 $32 $55 $122
AMT--Massachusetts $10 $32
The purpose of the foregoing table is to assist the investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
and indirectly. The expenses listed in the table for AMR, AMT-CT, AMT-NJ,
AMT-VA and AMT-FL are net of the contractual reimbursement by the Adviser
described in this prospectus. The expenses of such Portfolios, before expense
reimbursements, would be: AMR:Management Fees-.50%, 12b-1 Fees-.25%, Other
Expenses-.27% and Total Operating Expenses-1.02%. AMT-CT: Management Fee-.50%,
12b-1 Fees-.25%, Other Expenses-.31% and Total Operating Expenses-1.06%;
AMT-NJ: Management Fee-.50%, 12b-1 Fees-.25%, Other Expenses-.31 % and Total
Operating Expenses-1.06%; AMT-VA: Management Fee-.50%, 12b-1 Fees-.25%, Other
Expenses-.34% and Total Operating Expenses-1.09%; and AMT-FL: Management
Fee-.50%, 12b-1 Fees-.25%, Other Expenses-.34% and Total Operating
Expenses-1.09%. For AMT-MA, "Other Expenses" are based on estimated amounts for
the current fiscal year. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
2
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following tables have been audited by McGladrey & Pullen LLP, each of the
Fund's independent auditors, whose unqualified report thereon appears in each
Statement of Additional Information. This information should be read in
conjunction with the financial statements and notes thereto included in each
Fund's Statement of Additional Information.
ALLIANCE MONEY RESERVES
<TABLE>
<CAPTION>
FEBRUARY 16,
1989(A)
YEAR ENDED JUNE 30, THROUGH
-------------------------------------------------------------- JUNE 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .045 .047 .045 .025 .027 .044 .066 .079 .033
LESS:DIVIDENDS
Dividends from net
investment income (.045) (.047) (.045) (.025) (.027) (.044) (.066) (.079) (.033)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on:
net asset value(b) 4.64% 4.81% 4.50% 2.57% 2.71% 4.47% 6.87% 8.26% 9.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions) $1,011 $755 $2,510 $1,795 $1,626 $1,412 $1,262 $993 $563
Ratio to average
net assets of:
Expenses, net of waivers
and reimbursements 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .97% .89% .99%(c)
Expenses, before waivers
and reimbursements 1.06% 1.00% 1.04% 1.09% 1.04% 1.04% 1.03% .99% 1.09%(c)
Net investment income (d) 4.55% 4.80% 4.53% 2.55% 2.67% 4.33% 6.56% 7.92% 9.16%(c)
</TABLE>
ALLIANCE TREASURY RESERVES
<TABLE>
<CAPTION>
SEPTEMBER 1,
YEAR YEAR YEAR 1993(A)
ENDED ENDED ENDED THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1995 1994
--------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .0443 .0466 .0460 .0260
LESS: DIVIDENDS
Dividends from net
investment income (.0443) (.0466) (.0460) (.0260)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on:
net asset value(b) 4.53% 4.77% 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
year (in thousands) $704,084 $700,558 $493,702 $80,720
Ratio to average
net assets of:
Expenses, net of waivers
and reimbursements .85% .81% .69% .28%(c)
Expenses, before waivers
and reimbursements 1.00% 1.05% 1.05% 1.28%(c)
Net investment income(d) 4.43% 4.64% 4.86% 3.24%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
3
ALLIANCE MUNICIPAL TRUST
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
-------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
YEAR ENDED JUNE 30 ENDED ENDED
----------------------------------------------------------------------------- JUNE 30, DEC. 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .027 .028 .028 .018 .019 .034 .042 .051 .027 .041
LESS: DIVIDENDS
Dividends from net
investment income (.027) (.028) (.028) (.018) (.019) (.034) (.042) (.051) (.027) (.041)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (a) 2.77% 2.87% 2.84% 1.77% 1.94% 3.47% 4.32% 5.26% 5.61%(b) 4.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $355,461 $330,984 $177,254 $162,839 $100,529 $100,476 $71,748 $62,536 $41,910 $41,335
Ratio to average
net assets of:
Expenses, net of waivers
and reimbursements .85% .85% .85% .84% .80% .80% .80% .80% .85%(b) 1.00%
Expenses, before waivers
and reimbursements 1.04% 1.03% 1.03% 1.08% 1.06% 1.12% 1.15% 1.18% 1.35%(b) 1.33%
Net investment income (c) 2.73% 2.82% 2.81% 1.77% 1.91% 3.35% 4.20% 5.13% 5.45%(b) 4.03%
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Annualized.
(c) Net of expenses reimbursed or waived by the Adviser.
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
-------------------------------------------------------------------------------------------------
SIX JUNE 2,
MONTHS 1988(A)
YEAR ENDED JUNE 30, ENDED THROUGH
----------------------------------------------------------------------------- JUNE 30, DEC. 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .027 .029 .027 .018 .020 .032 .043 .050 .029 .030
LESS: DIVIDENDS
Dividends from net
investment income (.027) (.029) (.027) (.018) (.020) (.032) (.043) (.050) (.029) (.030)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.76% 2.91% 2.78% 1.83% 2.05% 3.26% 4.43% 5.17% 6.02%(c) 5.20%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $357,148 $297,862 $236,479 $219,673 $156,200 $121,317 $111,957 $104,097 $242,124 $103,390
Ratio to average
net assets of:
Expenses, net of waivers
and reimbursements .93% .93% .93% .93% .93% .95% 1.00% .99% .92%(c) .89%(c)
Expenses, before waivers
and reimbursements .96% .94% 1.01% 1.02% 1.02% 1.05% 1.10% 1.09% 1.02%(c) 1.10%(c)
Net investment income (d) 2.73% 2.86% 2.75% 1.82% 2.01% 3.18% 4.32% 5.03% 5.90%(c) 5.21%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividend and distributions at net asset value during the period, and redemption
on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
4
<TABLE>
<CAPTION>
CONNECTICUT PORTFOLIO
-------------------------------------------------------------------------------
JANUARY 5,
1990(A)
YEAR ENDED JUNE 30, THROUGH
-------------------------------------------------------------------- JUNE 30,
1997 1996 1995 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .027 .028 .028 .017 .020 .033 .045 .026
LESS: DIVIDENDS
Dividends from
net investment income (.027) (.028) (.028) (.017) (.020) (.033) (.045) (.026)
Net asset value
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.76% 2.88% 2.78% 1.71% 2.00% 3.35% 4.57% 5.53%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $102,612 $95,812 $75,991 $57,314 $56,224 $54,751 $48,482 $27,945
Ratio to net assets of:
Expenses, net of waivers
and reimbursements .80% .80% .80% .77% .70% .58% .44% .19%(c)
Expenses, before waivers
and reimbursements 1.10% 1.15% 1.21% 1.21% 1.16% 1.22% 1.16% 1.10%(c)
Net investment income (d) 2.72% 2.84% 2.77% 1.69% 1.97% 3.28% 4.39% 5.39%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
----------------------------------------------------
FEBRUARY 7,
1994 (A)
YEAR ENDED JUNE 30, THROUGH
------------------------------------- JUNE 30,
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .027 .028 .029 .008
LESS: DIVIDENDS
Dividends from
net investment income (.027) (.028) (.029) (.008)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.72% 2.89% 2.93% 2.08%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $123,579 $98,098 $74,133 $36,909
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements .85% .82% .74% .70%(c)
Expenses, before waivers
and reimbursements 1.12% 1.19% 1.29% 1.93%(c)
Net investment income (d) 2.68% 2.84% 2.98% 2.07%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
5
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO FLORIDA PORTFOLIO
------------------------------------- --------------------------
OCTOBER 25, JULY 28,
YEAR ENDED 1994(A) YEAR 1995(A)
JUNE 30, THROUGH ENDED THROUGH
------------------------ JUNE 30, JUNE 30, JUNE 30,
1997 1996 1995 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .028 .029 .023 0.30 .030
LESS: DIVIDENDS
Dividends from
net investment income (.028) (.029) (.023) (.030) (.030)
Net asset value.
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.83% 2.97% 3.48%(c) 3.03% 3.32%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $78,775 $89,557 $66,921 $89,149 $91,179
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements .80% .78% .44%(c) .65% .58%(c)
Expenses, before waivers
and reimbursements 1.15% 1.15% 1.30%(c) 1.10% 1.24%(c)
Net investment income (d) 2.78% 2.91% 3.48%(c) 2.97% 3.12%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
MASSACHUSETTS PORTFOLIO
-----------------------
APRIL 17, 1997(A)
THROUGH
JUNE 30, 1997
-----------------------
Net asset value, beginning of period $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .007
LESS: DIVIDENDS
Dividends from net investment income (.007)
Net asset value, end of period $ 1.00
TOTAL RETURNS
Total investment return based on
net asset value (b)(c) 3.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $15,046
Ratio to average net assets of:
Expenses, net of waivers and reimbursements(c) .50%
Expenses, before waivers and reimbursements (c) 2.99%
Net investment income (c)(d) 3.47%
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
From time to time each Fund advertises its "yield" and "effective yield." Both
yield figures are based on historical earnings and are not intended to indicate
future performance. To calculate the "yield," the amount of dividends paid on a
share during a specified seven-day period is assumed to be paid each week over
a 52-week period and is shown as a percentage of the investment. To calculate
"effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. For AMR dividends
for the seven days ended June 30, 1997, after expense reimbursement, amounted
to an annualized yield of 4.72%, equivalent to an effective yield of 4.83%.
Absent such reimbursement, the annualized yield for such period would have been
4.66%, equivalent to an effective yield of 4.77%. For ATR dividends for
6
the seven days ended June 30, 1997, after expense reimbursement, amounted to an
annualized yield of 4.60%, equivalent to an effective yield of 4.69%. Absent
such reimbursement, the annualized yield for such period would have been 4.45%,
equivalent to an effective yield of 4.54%. Dividends for the New York Portfolio
for the seven days ended June 30, 1997, after expense reimbursement, amounted
to an annualized yield of 3.19%, equivalent to an effective yield of 3.24%.
Absent expense reimbursement, the annualized yield for this period would have
been 3.00%, equivalent to an effective yield of 3.05%. Dividends for the
California Portfolio for the seven days ended June 30, 1997, after expense
reimbursement, amounted to an annualized yield of 3.08%, equivalent to an
effective yield of 3.13%. Absent expense reimbursement, the annualized yield
for this period would have been 3.05%, equivalent to an effective yield of
3.00%. Dividends for the Connecticut Portfolio for the seven days ended June
30, 1997, after expense reimbursement, amounted to an annualized yield of
3.05%, equivalent to an effective yield of 3.10%. Absent expense reimbursement,
the annualized yield for this period would have been 2.75%, equivalent to an
effective yield of 2.80%. Dividends for the New Jersey Portfolio for the seven
days ended June 30, 1997, after expense reimbursement, amounted to an
annualized yield of 3.14%, equivalent to an effective yield of 3.19%. Absent
expense reimbursement, the annualized yield for this period would have been
2.87%, equivalent to an effective yield of 2.92%. Dividends for the Virginia
Portfolio for the seven days ended June 30, 1997, after expense reimbursement,
amounted to an annualized yield of 3.41%, equivalent to an effective yield of
3.47%. Absent expense reimbursement, the annualized yield for this period would
have been 3.06%, equivalent to an effective yield of 3.12%. Dividends for the
Florida Portfolio for the seven days ended June 30, 1997, after expense
reimbursement, amounted to an annualized yield of 3.41%, equivalent to an
effective yield of 3.47%. Absent expense reimbursement, the annualized yield
for this period would have been 2.96%, equivalent to an effective yield of
3.02%. Dividends for the Massachusetts Portfolio for the seven days ended June
30, 1997, after expense reimbursement, amounted to an annualized yield of
3.71%, equivalent to an effective yield of 3.78%. Absent expense reimbursement,
the annualized yield for this period would have been 1.22%, equivalent to an
effective yield of 1.29%.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of Alliance Money Reserves is maximum current income
to the extent consistent with safety of principal and liquidity. The investment
objectives of each of the other Funds are-in the following order of
priority-safety of principal, excellent liquidity and, to the extent consistent
with the first two objectives, maximum current income that is, in the case of
each Portfolio of Alliance Municipal Trust, exempt from income taxation to the
extent described below. As a matter of fundamental policy, each Fund, except
for AMT-Florida and AMT-Massachusetts, pursues its objectives by maintaining a
portfolio of high quality money market securities all of which at the time of
investment have remaining maturities of one year (397 days with respect to ATR,
AMT-New Jersey and AMT-Virginia) or less, which maturities may extend to 397
days. AMT-Florida and AMT-Massachusetts pursue their objectives by investing in
high quality municipal securities having remaining maturities of 397 days or
less (which maturities may extend to such greater length of time as may be
permitted from time to time pursuant to Rule 2a-7 under the Investment Company
Act of 1940 (the "1940 Act"), as amended). While the fundamental policies
described above and the other fundamental investment policies described below
may not be changed without shareholder approval, each Fund may, upon notice to
shareholders, but without such approval, change non-fundamental investment
policies or create additional classes of shares in order to establish
portfolios which may have different investment objectives. There can be no
assurance that any Fund's objectives will be achieved.
The Funds will comply with Rule 2a-7 of the 1940 Act as amended from time to
time, including the diversification, quality and maturity limitations imposed
by the Rule. The average maturity of each Fund's portfolio cannot exceed 90
days. A more detailed description of Rule 2a-7 is set forth in each Fund's
Statement of Additional Information. To the extent that each Fund's limitations
are more permissive than Rule 2a-7, each Fund will comply with the more
restrictive provisions of the Rule.
7
ALLIANCE MONEY RESERVES
The money market securities in which Alliance Money Reserves ("AMR") invests
include:(1)marketable obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities (collectively, the "U.S.
Government"); (2) certificates of deposit and bankers' acceptances issued or
guaranteed by, or time deposits maintained at, banks or savings and loan
associations (including foreign branches of U.S. banks or U.S. or foreign
branches of foreign banks) having total assets of more than $500 million; (3)
commercial paper, including variable amount master demand notes, of high
quality [i.e., rated A-1 or A-2 by Standard &Poor's Corporation ("Standard &
Poor's"), Prime-1 or Prime-2 by Moody's Investors Service, Inc. ("Moody's"),
Fitch-1 or Fitch-2 by Fitch Investors Service, Inc., or Duff 1 or Duff 2 by
Duff &Phelps Inc. or, if not rated, issued by U.S. or foreign companies having
outstanding debt securities rated AAA, AA or A by Standard &Poor's, or Aaa, Aa
or A by Moody's] and participation interests in loans extended by banks to such
companies; and (4) repurchase agreements that are collateralized in full each
day by liquid securities of the types listed above. Repurchase agreements may
be entered into only with those banks (including State Street Bank and Trust
Company, AMR's Custodian) or broker-dealers ("vendors") that are eligible under
the procedures adopted by the Trustees for evaluating and monitoring the
creditworthiness of such vendors. A repurchase agreement would create a loss to
AMR if, in the event of a vendor default, the proceeds from the sale of the
collateral were less than the repurchase price. The money market securities in
which AMR invests may have variable or floating rates of interest ("variable
rate obligations") as permitted by Rule 2a-7 under the 1940 Act. Variable rate
obligations have interest rates which are adjusted either at predesignated
periodic intervals or whenever there is a change in the market rate to which
the interest rate of the variable rate obligation is tied. Some variable rate
obligations allow the holder to demand payment of principal at any time, or at
specified intervals. AMR follows Rule 2a-7 with respect to the diversification,
quality and maturity of variable rate obligations.
To the extend AMR purchases money market instruments issued by foreign
entities, consideration will be given to the domestic marketability of such
instruments, and possible interruptions of, or restrictions on, the flow of
international currency transactions.
AMR may purchase restricted securities that are determined by the Adviser to be
liquid in accordance with procedures adopted by the Trustees of AMR, including
securities eligible for resale under Rule 144A under the Securities Act of 1933
(the "Securities Act") and commercial paper issued in reliance upon the
exemption from registration in Section 4(2)of the Securities Act. Restricted
securities are securities subject to contractual or legal restrictions on
resale, such as those arising from an issuer's reliance upon certain exemptions
from registration under the Securities Act.
AMR may also invest up to 10% of the value of its net assets in securities as
to which a liquid trading market does not exist, provided such investments are
consistent with AMR's investment objectives. Such securities may include
securities that are not readily marketable, such as certain securities that are
subject to legal or contractual restrictions on resale (other than those
restricted securities determined to be liquid as described above) and
repurchase agreements not terminable within seven days. As to these securities,
AMR is subject to a risk that should AMR desire to sell them when a ready buyer
is not available at a price AMR deems representative of their value, the value
of AMR's net assets could be adversely affected.
AMR may invest in asset-backed securities that meet its existing
diversification, quality and maturity criteria. Asset-backed securities are
securities issued by special purpose entities whose primary assets consist of a
pool of loans or accounts receivable. The securities may be in the form of a
beneficial interest in a special purpose trust, limited partnership interest,
or commercial paper or other debt securities issued by a special purpose
corporation. Although the securities may have some form of credit or liquidity
enhancement, payments on the securities depend predominately upon collection of
the loans and receivables held by the issuer. It is AMR's current intention to
limit its investment in such securities to not more than 5% of its net assets.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, AMR may
not:(1) invest more than 25% of its assets in the securities of issuers
conducting their principal business activities in any one industry although
there is no such limitation with respect to U.S. Government securities or
certificates of deposit, bankers'
8
acceptances and interest bearing savings deposits; (2)invest more than 5% of
its assets in the securities of any one issuer (except the U.S. Government)
although with respect to 25% of its total assets it may invest without regard
to such limitation; (3)invest more than 5% of its assets in the securities of
any issuer (except the U.S. Government)having less than three years of
continuous operation or purchase more than 10% of any class of the outstanding
securities of any issuer (except the U.S. Government); (4) borrow money except
from banks on a temporary basis or via entering into reverse repurchase
agreements in aggregate amounts not exceeding 15% of its assets and to
facilitate the orderly maturation and sale of portfolio securities during any
periods of abnormally heavy redemption requests; (5)mortgage, pledge or
hypothecate its assets except to secure such borrowings; or (6) enter into
repurchase agreements, if as a result thereof, more than 10% of AMR's assets
would be subject to repurchase agreements not terminable within seven days.
As a matter of operating policy, fundamental policy number (2) would give AMR
the ability to invest, with respect to 25% of its assets, more than 5% of its
assets in any one issuer only in the event Rule 2a-7 is amended in the future.
ALLIANCE TREASURY RESERVES
The securities in which Alliance Treasury Reserves ("ATR") invests are: (1)
issues of the U. S. Treasury, such as bills, certificates of indebtedness,
notes and bonds; and (2) repurchase agreements that are collateralized in full
each day by the types of securities listed above. These agreements are entered
into with "primary dealers" (as designated by the Federal Reserve Bank of New
York) in U.S. Government securities or State Street Bank and Trust Company,
ATR's Custodian. For each repurchase agreement, ATR requires continual
maintenance of the market value of the underlying collateral in amounts equal
to, or in excess of, the agreement amount. In the event of a dealer default,
ATR might suffer a loss to the extent that the proceeds from the sale of the
collateral were less than the repurchase price. ATR may commit up to 15% of its
net assets to the purchase of when-issued U.S. Treasury securities. Delivery
and payment for when-issued securities takes place after the transaction date.
The payment amount and the interest rate that will be received on the
securities are fixed on the transaction date. The value of such securities may
fluctuate prior to their settlement, thereby creating an unrealized gain or
loss to ATR. The money market securities in which ATR may invest may have
variable or floating rates of interest ("variable rate obligations") as
permitted by Rule 2a-7 under 1940 Act. Variable rate obligations have interest
rates which are adjusted either at predesignated periodic intervals or whenever
there is a change in the market rate to which the interest rate of the variable
rate obligation is tied. Some variable rate obligations allow the holder to
demand payment of principal at any time, or at specified intervals. ATR follows
Rule 2a-7 with respect to the diversification, quality and maturity of variable
rate obligations.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, ATR may not:
(1) borrow money except from banks on a temporary basis or via entering into
reverse repurchase agreements in aggregate amounts not exceeding 10% of its
assets and to be used exclusively to facilitate the orderly maturation and sale
of portfolio securities during any periods of abnormally heavy redemption
requests, if they should occur; such borrowings may not be used to purchase
investments and ATR will not purchase any investment while any such borrowings
exist; (2) pledge, hypothecate or in any manner transfer, as security for
indebtedness, its assets except to secure such borrowings; or (3) enter into
repurchase agreements, if as a result thereof, more than 10% of its assets
would be subject to repurchase agreements not terminable within seven days.
ALLIANCE MUNICIPAL TRUST
The investment objectives of each Portfolio are safety of principal, liquidity
and, to the extent consistent with these objectives, maximum current income
that is exempt from income taxation to the extent described below. Except when
a Portfolio assumes a temporary defensive position, as a matter of fundamental
policy, at least 80% of each Portfolio's total assets will be invested in
municipal securities (as opposed to the taxable investments described below).
Normally, substantially all of each Portfolio's income will be tax-exempt as
described below (e.g., for 1996, 100% of the income of each Portfolio was
exempt from Federal income taxes; the Massachusetts Portfolio had not yet been
established).
9
THE NEW YORK PORTFOLIO seeks maximum current income that is exempt from
Federal, New York state and New York City personal income taxes by investing,
as a matter of fundamental policy, not less than 65% of its total assets in a
portfolio of high quality municipal securities issued by New York state or its
political subdivisions.
THE CALIFORNIA PORTFOLIO seeks maximum current income that is exempt from
Federal and California state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of California or its
political subdivisions.
THE CONNECTICUT PORTFOLIO seeks maximum current income that is exempt from
Federal and Connecticut state personal income taxes by investing, as a matter
of fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of Connecticut or its
political subdivisions.
THE NEW JERSEY PORTFOLIO seeks maximum current income that is exempt from
Federal and New Jersey state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of New Jersey or its
political subdivisions. The New Jersey Portfolio will invest not less than 80%
of its net assets in securities the interest on which is exempt from New Jersey
personal income taxes [i.e. New Jersey municipal securities and obligations of
the U.S. Government, its agencies and instrumentalities ("U.S. Government
Securities")]. In addition, during periods when Alliance Capital Management
L.P. (the "Adviser") believes that New Jersey municipal securities that meet
the New Jersey Portfolio's standards are not available, it may invest a portion
of its assets in securities whose interest payments are only federally
tax-exempt.
THE VIRGINIA PORTFOLIO seeks maximum current income that is exempt from Federal
and Virginia state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the Commonwealth of Virginia or its
political subdivisions.
THE FLORIDA PORTFOLIO seeks maximum current income that is exempt from Federal
income tax and State of Florida intangible tax by investing not less than 65%
of its total assets in a portfolio of high-quality municipal securities issued
by Florida or its political subdivisions.
THE MASSACHUSETTS PORTFOLIO seeks maximum current income that is exempt from
Federal and Massachusetts state personal income taxes by investing at least 65%
of its total assets in high quality municipal securities issued by the
Commonwealth of Massachusetts or its political subdivisions. The Massachusetts
Portfolio may invest in restricted securities that are determined by the
Adviser to be liquid in accordance with procedures adopted by the Trustees,
including securities eligible for resale under Rule 144A under the Securities
Act of 1933 (the "Securities Act"). Restricted securities are securities
subject to contractual or legal restrictions on resale, such as those arising
from an issuer's reliance upon certain exemptions from registration under the
Securities Act.
Each Portfolio of the Fund may invest without limitation in tax-exempt
municipal securities subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt municipal
securities issued after August 7, 1986 which are "specified private activity
bonds," and the proportionate share of any exempt-interest dividends paid by a
regulated investment company which receives interest from such specified
private activity bonds, will be treated as an item of tax preference for
purposes of the AMT imposed on individuals and corporations, though for regular
Federal income tax purposes such interest will remain fully tax-exempt, and (2)
interest on all tax-exempt obligations will be included in "adjusted current
earnings" of corporations for AMT purposes. Such bonds have provided, and may
continue to provide, somewhat higher yields than other comparable municipal
securities. See below, "Daily Dividends, Other Distributions, Taxes."
There can be no assurance that the Portfolios will achieve their investment
objectives. Potential investors in the New York, California, Connecticut, New
Jersey, Virginia, Florida and Massachusetts Portfolios should consider the
greater risk of the concentration of such Portfolios versus the safety that
comes with less concentrated investments and should compare yields available on
portfolios of the relevant state's issues with those of more diversified
portfolios, including other states' issues, before making an investment
decision. The Adviser believes that by maintaining each Portfolio's investments
in
10
liquid, short-term, high quality investments, each Portfolio is largely
insulated from the credit risks that exist on long-term municipal securities of
the relevant state. See the Statement of Additional Information for a more
detailed discussion of the financial condition of New York, California,
Connecticut, New Jersey, Virginia, Florida and Massachusetts.
MUNICIPAL SECURITIES. The municipal securities in which each Portfolio invests
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for short-term capital needs and generally have
maturities of one year or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of various
seasonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are
secured by the issuer's pledge of its faith, credit and taxing power for
payment of principal and interest, and revenue bonds, which are generally paid
from the revenues of a particular facility or a specific excise or other source.
A Portfolio may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. Such
adjustments minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Portfolio to maintain a stable net
asset value. Variable rate securities purchased may include participation
interests in industrial development bonds backed by letters of credit of
Federal Deposit Insurance Corporation member banks having total assets of more
than $1 billion. Each Portfolio will comply with Rule 2a-7 with respect to its
investments in variable rate obligations supported by letters of credit.
Each Portfolios' municipal securities at the time of purchase are rated within
the two highest quality ratings of Moody's Investors Service, Inc. (Aaa and Aa,
MIG 1 and MIG 2, or VMIG 1 and VMIG 2) or Standard & Poor's Corporation (AAA
and AA or SP-1 and SP-2), or judged by the Adviser to be of comparable quality.
Securities must also meet credit standards applied by the Adviser.
To further enhance the quality and liquidity of the securities in which the
Portfolios invest, such securities frequently are supported by credit and
liquidity enhancements, such as letters of credit, from third party financial
institutions. The Adviser continuously monitors the credit quality of such
third parties; however, changes in the credit quality of such a financial
institution could cause a Portfolio's investments backed by that institution to
lose value and affect a Portfolio's share price.
A Portfolio also may invest in stand-by commitments, which may involve certain
expenses and risks, but such commitments are not expected to comprise more than
5% of any Portfolio's net assets. A Portfolio may commit up to 15% of its net
assets to the purchase of when-issued securities. The Fund's custodian will
maintain, in a separate account of the respective Portfolio, liquid high-grade
debt securities having value equal to, or greater than, such when-issued
securities. The price of when-issued securities, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for such securities takes place at a later time. Normally
the settlement date occurs from within ten days to one month after the purchase
of the issue. The value of when-issued securities may fluctuate prior to their
settlement, thereby creating an unrealized gain or loss to a Portfolio.
TAXABLE INVESTMENTS. The taxable investments in which each Portfolio may invest
include obligations of the U.S. Government and its agencies, high quality
certificates of deposit and bankers' acceptances, prime commercial paper, and
repurchase agreements.
OTHER INVESTMENT POLICIES. No Portfolio of the Fund will invest more than 10%
of its net assets in illiquid securities (including illiquid restricted
securities with respect to the Massachusetts Portfolio). As to these
securities, a Portfolio is subject to a risk that should the Portfolio desire
to sell them when a ready buyer is not available at a price the Portfolio deems
representative of their value, the value of the Portfolio's net assets could be
adversely affected. Illiquid securities may include securities that are not
readily marketable and, with respect to the Massachusetts Portfolio, securities
subject to legal or contractual restrictions on resale. With respect to the
Massachusetts Portfolio, which may invest in restricted securities, restricted
securities determined by the Adviser to be liquid will not be treated as
"illiquid" for purposes of the restriction on illiquid securities.
The following investment policies are fundamental policies with respect to each
applicable Portfolio except
11
the Massachusetts Portfolio which has adopted the applicable restrictions as
non-fundamental policies. To reduce investment risk, no Portfolio may invest
more than 25% of its total assets in municipal securities the interest upon
which is paid from revenues of similar-type projects; a Portfolio may not
invest more than 5% of its total assets in the securities of any one issuer
except the U.S. Government, although the New York, California, Connecticut, New
Jersey, Virginia, Florida and Massachusetts Portfolios may invest 50% of their
respective total assets in as few as four issuers (but no more than 25% of
total assets in any one issuer); and a Portfolio may not purchase more than 10%
of any class of the voting securities of any one issuer except those of the
U.S. Government.
PURCHASE AND REDEMPTION OF SHARES
For more information on the purchase and redemption of each Fund's shares, see
such Fund's Statement of Additional Information.
PURCHASE OF SHARES
OPENING ACCOUNTS
Contact Discover Brokerage Direct to open a Fund account. Balances will appear
on your monthly brokerage statement.
SUBSEQUENT INVESTMENTS
A. BY CHECK THROUGH DISCOVER BROKERAGE DIRECT
Mail or deliver your check, payable to "Discover Brokerage Direct" which will
deposit into the Fund(s). Please designate the appropriate Fund(s) and indicate
your brokerage account number on the check or draft.
B. BY SWEEP
Discover Brokerage Direct has available an automatic "sweep" for customers in
AMR, ATR, AMT-CA, AMT-CT, AMT-FL, AMT-MA, AMT-NJ, AMT-NY and AMT-VA. If you
request the sweep arrangement, all cash balances of $1.00 or more are moved
into one of the Portfolios on a daily basis. Sales proceeds from trades will be
swept into the designated Portfolio on settlement date.
REDEMPTIONS
A. BY CONTACTING DISCOVER BROKERAGE DIRECT
Instruct Discover Brokerage Direct to order a withdrawal from your Fund account
and issue a check payable to you.
B. BY SWEEP
Discover Brokerage Direct's automatic "sweep" moves money from your money
market account automatically to cover securities purchases in your brokerage
account.
C. BY CHECKWRITING
With this service, you may write checks made payable to any payee. Checks
cannot be written for more than the principal balance (not including any
accrued dividends) in your Fund account. First you must fill out the Signature
Card which you can obtain from Discover Brokerage Direct. The checkwriting
service enables you to receive the daily dividends declared on the shares to be
redeemed until the day that your check is presented for payment.
ADDITIONAL INFORMATION
SHARE PRICE. Shares are sold and redeemed on a continuous basis without sales
or redemption charges at their net asset value which is expected to be constant
at $1.00 per share, although this price is not guaranteed. The net asset value
of each Fund's shares is determined each business day at 12:00 Noon and 4:00
p.m. (New York time). The net asset value per share of a Fund is calculated by
taking the sum of the value of that Fund's investments (amortized cost value is
used for this purpose) and any cash or other assets, subtracting liabilities,
and dividing by the total number of shares outstanding. All expenses, including
the fees payable to the Adviser, are accrued daily.
TIMING OF INVESTMENTS AND REDEMPTIONS. The Funds have two transaction times
each business day, 12:00 Noon and 4:00 p.m. (New York time). New investments
represented by Federal funds or bank wire monies received by State Street Bank
at any time during a day prior to 4:00 p.m. are entitled to the full dividend
to be paid to shareholders for that day. Shares do not earn dividends on the
day a redemption is effected regardless of whether the redemption order is
received before or after
12
12:00 Noon. However, if you wish to have Federal funds wired the same day as
your telephone redemption request, make sure that your request will be received
by the Fund prior to 12:00 Noon.
During drastic economic or market developments, shareholders might have
difficulty in reaching Alliance Fund Services, Inc. by telephone in which event
the shareholder should issue written instructions to Alliance Fund Services,
Inc. at the address shown in this prospectus. The Funds reserve the right to
suspend or terminate their telephone service at any time without notice.
Neither the Funds nor the Adviser, or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests to purchase or sell
shares. The Funds will employ reasonable procedures in order to verify that
telephone requests are genuine and could be liable for losses arising from
unauthorized transactions if it failed to do so. Selected dealers or agents may
charge a commission for handling telephone requests for redemptions.
Redemption proceeds are normally wired or mailed either the same or the next
business day, but in no event later than seven days, unless redemptions have
been suspended or postponed due to the determination of an "emergency" by the
Securities and Exchange Commission or to certain other unusual conditions.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of each Fund is
determined each business day at 4:00 p.m. (New York time) and is paid
immediately thereafter pro rata to shareholders of that Fund of record via
automatic investment in additional full and fractional shares of that Fund in
each shareholder's account. As such additional shares are entitled to dividends
on following days, a compounding growth of income occurs.
Net income consists of all accrued interest income on Fund assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
are reflected in its net asset value and are not included in net income.
Distributions to you out of tax-exempt interest income earned by each Portfolio
of Alliance Municipal Trust are not subject to Federal income tax (other than
the AMT). Any exempt interest dividends derived from interest on municipal
securities subject to the AMT will be a specific preference item for purposes
of the Federal individual and corporate AMT. Distributions to residents of New
York out of income earned by the New York Portfolio from New York municipal
securities are exempt from New York state and New York City personal income
taxes. Distributions to residents of California out of income earned by the
California Portfolio from California municipal securities are exempt from
California personal income taxes. Distributions to individuals who are
residents of Connecticut out of income earned by the Connecticut Portfolio from
Connecticut municipal securities are exempt from Connecticut personal income
taxes. Distributions to residents of New Jersey out of income earned by the New
Jersey Portfolio from New Jersey municipal securities or U.S. Government
Securities are exempt from New Jersey state personal income taxes.
Distributions from the New Jersey Portfolio are, however, subject to the New
Jersey Corporation Business (Franchise) Tax and the New Jersey Corporation
Income Tax payable by corporate shareholders. Distributions to residents of
Virginia out of income earned by the Virginia Portfolio from Virginia municipal
securities or obligations of the United States or any authority, commission or
instrumentality of the United States are exempt from Virginia individual,
estate, trust, or corporate income tax. Dividends paid by the Florida Portfolio
to individual Florida shareholders will not be subject to Florida income tax,
which is imposed only on corporations. However, Florida currently imposes an
"intangible tax" at the rate of $2.00 per $1,000 taxable value of certain
securities, such as shares of the Portfolio, and other intangible assets owned
by Florida residents. U.S. Government securities and Florida municipal
securities are exempt from this intangible tax. It is anticipated that the
Florida Portfolio shares will qualify for exemption from the Florida intangible
tax. In order to so qualify, the Florida Portfolio must, among other things,
have its entire portfolio invested in U.S. Government securities and Florida
municipal securities on December 31 of any year. Exempt-interest dividends paid
by the Florida Portfolio to corporate shareholders will be subject to Florida
corporate income tax. Distributions to residents of Massachusetts out of
interest earned by the Massachusetts Portfolio from Massachusetts municipal
securities are exempt from Massachusetts state personal income taxes.
Distributions out of taxable interest income, other investment income, and
short-term capital gains are taxable to you as ordinary income and
distributions of long-term capital gains, if any, are taxable as long-term
capital gains irrespective of the length of time you may have held your shares.
Distributions of short and long-
13
term capital gains, if any, are normally made near year-end. Each year shortly
after December 31, the Funds will send you tax information stating the amount
and type of all its distributions for the year just ended.
THE ADVISER. Each Fund retains Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, NY 10105 under separate Advisory Agreements to
provide investment advice and, in general, to supervise its management and
investment program, subject to the general control of the Trustees of each
Fund. For the fiscal year ended June 30, 1997, AMR, ATR, AMT-NY, AMT-CA,
AMT-CT, AMT-NJ, AMT-VA and AMT-FL, each paid the Adviser an advisory fee at an
annual rate of .44, .49, .41, .50, .30, .33, .25 and .15 of 1%, respectively,
of the average daily value of the respective Portfolio's net assets. For the
period ended June 30, 1997, the Adviser waived the advisory fee for AMT-MA.
The Adviser is a leading international investment manager, supervising client
accounts with assets as of September 30, 1997 totaling more than $217 billion
(of which more than $81 billion represented the assets of investment
companies). The Adviser's clients are primarily major corporate employee
benefit plans, public employee retirement plans, insurance companies, banks,
foundations and endowment funds. The 54 registered investment companies managed
by the Adviser comprising 116 separate investment portfolios currently have
over two million shareholders. As of September 30, 1997, the Adviser was
retained as an investment manager of employee benefit fund assets for 28 of the
Fortune 100 companies.
Alliance Capital Management Corporation, 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, one of the largest life insurance companies in the United States, which
is a wholly owned subsidiary of The Equitable Companies Incorporated, a holding
company controlled by AXA, a French insurance holding company. Certain
information concerning the ownership and control of Equitable by AXA is set
forth in each Fund's Statement of Additional Information under "Management of
the Fund."
Under a Distribution Services Agreement (the "Agreement"), each Fund pays the
Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate average
daily net assets. For the period ended June 30, 1997, AMR, ATR, AMT-NY, AMT-CA,
AMT-CT, AMT-NJ, AMT-VA and AMT-FL each paid the Adviser a distribution services
fee at an annual rate of .25, .11, .15, .22, .15, .15, .15 and .15 of 1%,
respectively, of the average daily value of the net assets of each Portfolio.
For the period ended June 30, 1997, the distribution payment was waived for
AMT-MA. Substantially all such monies (together with significant amounts from
the Adviser's own resources) are paid by the Adviser to broker-dealers and
other financial intermediaries for their distribution assistance and to banks
and other depository institutions for administrative and accounting services
provided to the Funds, with any remaining amounts being used to partially
defray other expenses incurred by the Adviser in distributing the Funds'
shares. The Funds believe that the administrative services provided by
depository institutions are permissible activities under present banking laws
and regulations and will take appropriate actions (which should not adversely
affect the Funds or their shareholders) in the future to maintain such legal
conformity should any changes in, or interpretations of, such laws or
regulations occur.
The Adviser will reimburse each Fund to the extent that aggregate operating
expenses of that Fund (including the Adviser's fee and expenses incurred under
the Agreement) exceed 1% of its average daily net assets for any fiscal year.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust
Company, P.O. Box 1912, Boston, MA 02105, is the Funds' Custodian. Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, NJ 07096-1520 and Alliance Fund
Distributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Funds' Transfer Agent and Distributor, respectively. The transfer agent charges
a fee for its services.
FUND ORGANIZATION. Alliance Capital Reserves (not offered by this
prospectus)and AMR are series of Alliance Capital Reserves, a diversified
open-end management investment company registered under the 1940 Act. The Fund
was reorganized as a Massachusetts business trust in October 1984, having
previously been a Maryland corporation since its formation in April 1978.
Alliance Government Reserves (not offered by this prospectus) and ATR are
series of Alliance Government Reserves which is a diversified open-end
management investment company registered under the 1940 Act. The
14
Fund was reorganized as a Massachusetts business trust in October 1984, having
previously been a Maryland corporation since its formation in December 1978.
AMT-NY, AMT-CA, AMT-CT, AMT-NJ, AMT-VA, AMT-FL and AMT-MA are non-diversified
series of Alliance Municipal Trust, which is also an open-end management
investment company registered under the 1940 Act consisting of such series and
one other series not offered by this prospectus. The Fund was reorganized as a
Massachusetts business trust in April 1985, having previously been a Maryland
corporation since its formation in January 1983. Each Fund's activities are
supervised by its Trustees. Normally, shares of each series of Alliance
Municipal Trust and Alliance Government Reserves are entitled to one vote per
share, and vote as a single series, on matters that affect each series in
substantially the same manner. Massachusetts law does not require annual
meetings of shareholders and it is anticipated that shareholder meetings will
be held only when required by Federal law. Shareholders have available certain
procedures for the removal of Trustees.
REPORTS. You receive semi-annual and annual reports for your Fund as well as a
monthly summary of your account.
Since this prospectus sets forth information about all the Funds, it is
theoretically possible that a Fund might be liable for any materially
inaccurate or incomplete disclosure in this prospectus concerning another Fund.
Based on the advice of counsel, however, the Funds believe that the potential
liability of each Fund with respect to the disclosure in this prospectus
extends only to the disclosure relating to that Fund.
15
