Disclaimer: This is filed pursuant to Rule 497(e).
File Nos.: 2-63315 and 811-02889
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
Alliance Municipal Trust-General, exempt from Federal income taxes and, in the
case of the New York, California, Connecticut, New Jersey, Virginia, Florida
and Massachusetts Portfolios, exempt from Federal and state income taxes of the
respective states) to the extent consistent with the first two objectives.
Alliance Capital Reserves, Alliance Government Reserves, Alliance Treasury
Reserves and the General Portfolio of Alliance Municipal Trust 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, EXCEPT FOR THE
GENERAL PORTFOLIO, 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 8
PURCHASE AND REDEMPTION OF SHARES 13
ADDITIONAL INFORMATION 14
PRO 10/97 15368R1
DLJDIRECT
ASSETMASTER SM
PROSPECTUS
OCTOBER 31, 1997
ALLIANCE CAPITAL RESERVES
ALLIANCE GOVERNMENT RESERVES
ALLIANCE TREASURY RESERVES
ALLIANCE MUNICIPAL TRUST:
GENERAL PORTFOLIO
NEW YORK PORTFOLIO
NEW JERSEY PORTFOLIO
CALIFORNIA PORTFOLIO
CONNECTICUT PORTFOLIO
VIRGINIA PORTFOLIO
FLORIDA PORTFOLIO
MASSACHUSETTS PORTFOLIO
DLJDIRECT INC.
ONE PERSHING PLAZA
JERSEY CITY, NEW JERSEY 07399
MEMBER SIPC. MEMBER NASD.
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>
ACR AGR ATR AMT-GEN AMT-NY AMT-CA AMT-CT AMT-NJ AMT-VA AMT-FL AMT-MA
------- ------- ------- ------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees .46% .48% .50% .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25
Other Expenses .29 .27 .25 .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% 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
-------- -------- ------- --------
ACR $10 $32 $55 $122
AGR $10 $32 $55 $122
ATR $10 $32 $55 $122
AMT--General $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 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: 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 CAPITAL RESERVES
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------------------------------------------
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 year $ 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 .0452 .0471 .0447 .0255 .0266 .0438 .0662 .0782 .0788 0.0625
Net realized gain on investments -0- -0- -0- -0- .0003 .0013 -0- -0- -0- -0-
Net increase in net assets
from operations .0452 .0471 .0447 .0255 .0269 .0451 .0662 .0782 .0788 0.0625
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income (.0452) (.0471) (.0447) (.0255) (.0266) (.0438) (.0662) (.0782) (.0788) (0.0625)
Distributions from net realized
gains -0- -0- -0- -0- (.0003) (.0013) -0- -0- -0- -0-
Total dividends and distributions (.0452) (.0471) (.0447) (.0255) (.0269) (.0451) (.0662) (.0782) (.0788) (0.0625)
Net asset value, end of year $ 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) 4.63% 4.82% 4.57% 2.58% 2.73% 4.61% 6.84% 8.14% 8.20% 6.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions) $5,733 $4,804 $3,024 $2,417 $2,112 $1,947 $1,937 $1,891 $1,536 $1,392
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% .88% .95% .95%
Expenses, before waivers and
reimbursements 1.00% 1.00% 1.03% 1.03% 1.00% 1.00% .97% .98% 1.05% 1.05%
Net investment income(b) 4.53% 4.69% 4.51% 2.57% 2.65% 4.37% 6.62% 7.82% 7.87% 6.26%
</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) Net of expenses reimbursed or waived by the Adviser.
ALLIANCE GOVERNMENT RESERVES
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------------------------------------------
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 .0443 .0461 .0439 .0244 .0256 .0421 .0640 .0765 .0774 0.0612
Net realized gain on investments -0- -0- -0- -0- .0001 -0- -0- .0001 -0- -0-
Net increase in net assets from
operations (.0443) .0461 .0439 .0244 .0257 .0421 .0640 .0766 .0774 0.0612
LESS: DISTRIBUTIONS
Dividends from net investment
income (.0443) (.0461) (.0439) (.0244) (.0256) (.0421) (.0640) (.0765) (.0774) (0.0612)
Distributions from net realized
gains -0- -0- -0- -0- (.0001) -0- -0- (.0001) -0- -0-
Total dividends and distributions (.0443) (.0461) (.0439) (.0244) (.0257) (.0421) (.0640) (.0766) (.0774) (0.0612)
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) 4.53% 4.72% 4.48% 2.48% 2.60% 4.30% 6.61% 7.96% 8.04% 6.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions) $3,762 $3,205 $2,514 $2,061 $1,783 $1,572 $1,070 $584 $522 $315
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00% 1.00% 1.00% .95% .89% .88% .88% .80%
Expenses, before waivers and
reimbursements 1.00% 1.01% 1.05% 1.04% 1.02% .97% .93% .98% .98% .90%
Net investment income(b) 4.44% 4.60% 4.42% 2.46% 2.55% 4.17% 6.28% 7.65% 7.86% 6.13%
</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) Net of expenses reimbursed or waived by the Adviser.
3
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.
ALLIANCE MUNICIPAL TRUST
<TABLE>
<CAPTION>
GENERAL PORTFOLIO
----------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
YEAR ENDED JUNE 30, ENDED DECEMBER 31,
----------------------------------------------------------------------- JUNE 30, ------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------ ------- ---------- ------- ------- ------- ------- ------- ---------- ------- -------
<S> <C> <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 $1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .028 .029 .028 .018 .020 .034 .046 .055 .030 .047 .041
Net realized and unrealized
loss on investments -0- -0- (.003) -0- -0- -0- -0- -0- -0- -0- -0-
Net increase in net asset
value from operations .028 .029 .025 .018 .020 .034 .046 .055 .030 .047 .041
ADD: CAPITAL CONTRIBUTIONS
Capital Contributed by
the Adviser -0- -0- .003 -0- -0- -0- -0- -0- -0- -0- -0-
LESS: DIVIDENDS
Dividends from net
investment income (.028) (.029) (.028) (.018) (.020) (.034) (.046) (.055) (.030) (.047) (.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 $1.00
TOTAL RETURNS
Total investment return based
on net asset value(a) 2.81% 2.93% 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b) 4.81% 4.18%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $980 $1,148 $1,189 $1,134 $1,016 $914 $883 $798 $695 $633 $690
Ratio to average net
assets of:
Expenses, net of waivers
and reimbursements .94% .95% .94% .92% .92% .92% .89% .83% .84%(b) .83% .80%
Expenses, before waivers
and reimbursements .94% .95% .95% .94% .94% .95% .95% .93% .94%(b) .93% .90%
Net investment income (d) 2.76% 2.90% 2.78% 1.80% 2.02% 3.40% 4.57% 5.50% 5.96%(b) 4.69% 4.08%
</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) The capital contribution by the Adviser had no effect on total return.
(d) Net of expenses reimbursed or waived by the Adviser.
4
<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 or 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.
5
<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 front 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.
6
<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 ACR dividends
for the seven days ended June 30, 1997 amounted to an annualized yield of
4.72%, equivalent to an effective yield of 4.83%. For AGR dividends for the
seven days ended June 30, 1997 amounted to an annualized yield of 4.62%,
equivalent to an effective yield of 4.73%. For ATR dividends for the
7
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 General Portfolio
for the seven days ended June 30, 1997, after expense reimbursement, amounted
to an annualized yield of 3.20%, equivalent to an effective yield of 3.25%.
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. 10%. 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 objectives of each of the 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.
8
ALLIANCE CAPITAL RESERVES
The money market securities in which Alliance Capital Reserves ("ACR") 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, bankers' acceptances and
interest-bearing savings deposits issued or guaranteed by banks or savings and
loan associations having total assets of more than $1 billion and which are
members of the Federal Deposit Insurance Corporation and certificates of
deposit and bankers' acceptances denominated in U.S. dollars and issued by U.S.
branches of foreign banks having total assets of at least $1 billion that are
believed by the Adviser to be of quality equivalent to that of other such
instruments in which ACR may invest; (3) commercial paper, including variable
amount master demand notes, of prime quality [i.e., rated A-1+ or A-1 by
Standard & Poor's Corporation ("Standard & Poor's") or Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, issued by companies
having outstanding debt securities rated AAA or AA by Standard & Poor's, or Aaa
or Aa 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. 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, ACR's Custodian, and would create a loss to ACR if, in the event of a
dealer default, the proceeds from the sale of the collateral were less than the
repurchase price. ACR may also invest in certificates of deposit issued by, and
time deposits maintained at, foreign branches of domestic banks described in
(2) above and prime quality dollar-denominated commercial paper issued by
foreign companies meeting the criteria specified in (3) above. The money market
securities in which ACR 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
anytime, or at specified intervals. ACR follows Rule 2a-7 with respect to the
diversification, quality, and maturity of variable rate obligations.
ACR may purchase restricted securities that are determined by the Adviser to be
liquid in accordance with procedures adopted by the Trustees of ACR, 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.
ACR 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 ACR'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,
ACR is subject to a risk that should ACR desire to sell them when a ready buyer
is not available at a price ACR deems representative of their value, the value
of ACR's net assets could be adversely affected.
ACR 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 ACR'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, ACR 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' acceptances and interest bearing savings deposits; (2) invest
more than 5% of its assets in securities of any one issuer
9
(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
ACR'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 ACR
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 GOVERNMENT RESERVES
The securities in which Alliance Government Reserves ("AGR") invests are: (1)
marketable obligations of, or guaranteed by, the United States Government, its
agencies or instrumentalities (collectively, the "U.S. Government"), including
issues of the United States Treasury, such as bills, certificates of
indebtedness, notes and bonds, and issues of agencies and instrumentalities
established under the authority of an act of Congress; 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, AGR's Custodian, and would
create a loss to AGR if, in the event of a dealer default, the proceeds from
the sale of the collateral were less than the repurchase price. AGR may commit
up to 15% of its net assets to the purchase of when-issued U.S. Government
securities, whose value may fluctuate prior to their settlement, thereby
creating an unrealized gain or loss to AGR. The money market securities in
which AGR may invest 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. AGR 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, AGR 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 AGR 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 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
10
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).
THE GENERAL PORTFOLIO seeks maximum current income that is exempt from Federal
income taxes by investing principally in a diversified portfolio of high
quality municipal securities. Such income may be subject to state or local
income taxes.
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.
11
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 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
12
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 the Massachusetts Portfolio which has adopted the
applicable restrictions as non-fundamental policies. To reduce investment risk,
the General Portfolio may not invest more than 25% of its total assets in
municipal securities whose issuers are located in the same state, and 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 (i) with respect to 25% of
its total assets the General Portfolio may invest up to 10% per issuer, and
(ii) 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.
The Funds offer a variety of shareholder services. For more information about
these services, please call your broker.
PURCHASE OF SHARES
Account holders of the AssetMasterSM Account offered by DLJDIRECT Inc.
("DLJDIRECT") are eligible to invest in shares of the Funds. The Funds are
intended to provide a means for the investment of free credit cash balances
arising in AssetMasterSM Accounts.
Your brokerage account will be coded to sweep cash balances into shares of the
Fund you have selected. There is a $500 minimum initial investment for all
Funds. Free credit balances arising in your brokerage account from check
deposits, dividend payments, interest payments and other credits will be
invested in the selected Fund on the business day after posting. Free credit
balances arising from the sale of securities will be invested into the selected
Fund on the business day following settlement. We will, however, hold back and
not invest in the Fund sufficient monies to pay for security purchases which
have not yet settled.
13
REDEMPTIONS
The Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation
("Pershing") has instituted an automatic redemption for participants invested
in the Funds. Pershing will redeem a sufficient number of shares on settlement
date to pay for all securities transactions. If you intend to send funds to
settle securities transactions, DLJDIRECT must receive these funds on the
business day before the settlement date to prevent an automatic redemption.
Shares may also be redeemed to meet any debits in the AssetMaster Account
arising from MasterCard and checking transactions and will be paid from your
account on the day transactions are posted.
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 12:00 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), but, in the case of the General Portfolio, may be subject to state or
local income taxes. 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
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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-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, ACR, AGR, ATR, AMT-General,
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 .47, .48, .49, .50, .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, ACR, AGR, ATR,
AMT-General, 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, .25, .11, .25,
.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
15
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. AGR and ATR are series of Alliance Government Reserves
which is 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 December 1978. ACR and Alliance Money Reserves (not offered by this
prospectus) 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.
AMT-General is a diversified, and 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. 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, Alliance Government Reserves and
Alliance Capital 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.
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