<PAGE>
This is filed pursuant to Rule 497(e).
File Nos. 2-63315 and 811-02889.
------- ---------
<PAGE>
- --------------------------------------------------------------------------------
YIELDS
For current recorded yield information on the Funds, call toll free:
(800) 221-9513
- --------------------------------------------------------------------------------
The Funds are open-end management investment com-panies 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 Money 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 the 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,O for each Fund dated October 30,
1998, 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 Securi- ties and Exchange Commission and is incorporated herein by
reference. A free copy may be obtained by contacting your Investment Executive.
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......................................... 11
PURCHASE AND REDEMPTION OF SHARES.......................................... 18
ADDITIONAL INFORMATION..................................................... 19
- --------------------------------------------------------------------------------
MONEY MARKET SERVICES
Alliance Capital Reserves
Alliance Money Reserves
Alliance Government Reserves
Alliance Treasury Reserves
Alliance Municipal Trust
- General Portfolio
- California Portfolio
- Connecticut Portfolio
- Florida Portfolio
- Massachusetts Portfolio
- New Jersey Portfolio
- New York Portfolio
-Virginia Portfolio
Prospectus
October 30, 1998
Member: New York Stock Exchange . SIPC
DAVENPORT & COMPANY LLC
- ---------- Established 1863 ----------
Post Office Box 85678
Richmond, Virginia 23285-5678
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Funds have no sales load on purchases or reinvested dividends, deferred
sales load, redemption fee or exchange fee.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES (as a percentage
of average net assets,
after expense ACR AMR AGR ATR AMT-GEN AMT-NY AMT-CA AMT-CT AMT-NJ AMT-VA AMT-FL AMT-MA
reimbursement) ---- ---- ---- ---- ------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees......... .46% .48% .46% .49% .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees.............. .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25
Other Expenses.......... .29 .27 .29 .26 .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% 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):
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
ACR............................................. $10 $32 $55 $122
AMR............................................. $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 $55 $122
</TABLE>
The purpose of the foregoing table is to assist the investor in understand-
ing the various costs and expenses that an investor in the Fund will bear di-
rectly and indirectly. The expenses listed in the table for AMR, AGR, ATR,
AMT-NY, AMT-CT, AMT-NJ, AMT-VA, AMT-FL and AMT-MA 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--.48%, 12b-1 Fees--.25%, Other Expenses--.29% and Total Operating Ex-
penses--1.02%; AGR: Management Fees--.47%, 12b-1 Fees--.25%, Other Expenses--
.29% and Total Operating Expenses--1.01%; ATR: Management Fees--.50%, 12b-1
Fees--.25%, Other Expenses--.26% and Total Operating Expenses--1.01%; AMT-NY:
Management Fees--.50%, 12b-1 Fees--.25%, Other Expenses--.26% and Total Oper-
ating Expenses--1.01%; 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--.32% and Total Operating Expenses--
1.07%; AMT-VA: Management Fee--.50%, 12b-1 Fees--.25%, Other Expenses--.28%
and Total Operating Expenses--1.03%; AMT-FL: Management Fee--.50%, 12b-1
Fees--.25%, Other Expenses--.31% and Total Operating Expenses--1.06%; and AMT-
MA: Management Fees--.50%, 12b-1 Fees--.25%, Other Expenses--.62% and Total
Operating Expenses--1.37%. The example should not be considered a representa-
tion of past or future expenses; actual expenses may be greater or less than
those shown.
2
<PAGE>
FINANCIAL HIGHLIGHTS . FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
(AUDITED)
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.
<TABLE>
<CAPTION>
ALLIANCE CAPITAL YEAR ENDED JUNE 30,
RESERVES ---------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <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.. .0471 .0452 .0471 .0447 .0255 .0266 .0438 .0662 .0782 .0788
Net realized gain on
investments........... -0- -0- -0- -0- -0- .0003 .0013 -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from
operations............ .0471 .0452 .0471 .0447 .0255 .0269 .0451 .0662 .0782 .0788
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income..... (.0471) (.0452) (.0471) (.0447) (.0255) (.0266) (.0438) (.0662) (.0782) (.0788)
Distributions from net
realized gains........ -0- -0- -0- -0- -0- (.0003) (.0013) -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions......... (.0471) (.0452) (.0471) (.0447) (.0255) (.0269) (.0451) (.0662) (.0782) (.0788)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
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 RETURN
Total investment return
based on net asset
value(a).............. 4.83% 4.63% 4.82% 4.57% 2.58% 2.73% 4.61% 6.84% 8.14% 8.20%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of year
(in millions)......... $ 8,015 $ 5,733 $ 4,804 $ 3,024 $ 2,417 $ 2,112 $ 1,947 $ 1,937 $ 1,891 $ 1,536
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements....... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .97% .88% .95%
Expenses, before
waivers and
reimbursements....... 1.00% 1.00% 1.00% 1.03% 1.03% 1.00% 1.00% .97% .98% 1.05%
Net investment
income(b)............ 4.71% 4.53% 4.69% 4.51% 2.57% 2.65% 4.37% 6.62% 7.82% 7.87%
</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.
<TABLE>
<CAPTION>
FEBRUARY 16,
1989(A)
YEAR ENDED JUNE 30, THROUGH
ALLIANCE MONEY RESERVES ---------------------------------------------------------------------- JUNE 30,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------ ------ ------ ------------
<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(b).............. .047 .045 .047 .045 .025 .027 .044 .066 .079 .033
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS: DIVIDENDS
Dividends from net
investment income...... (.047) (.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 $ 1.00
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN
Total investment return
based on net asset
value(c).............. 4.83% 4.64% 4.81% 4.50% 2.57% 2.71% 4.47% 6.87% 8.26% 9.18%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions)... $1,166 $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% 1.00% .97% .88% .99%(d)
Expenses, before
waivers and
reimbursements........ 1.02% 1.06% 1.00% 1.04% 1.09% 1.04% 1.04% 1.03% .99% 1.09%(d)
Net investment
income(b)............. 4.72% 4.55% 4.80% 4.53% 2.55% 2.67% 4.33% 6.56% 7.92% 9.16%(d)
</TABLE>
- -------
(a)Commencement of operations.
(b)Net of expenses reimbursed or waived by the Adviser.
(c) 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.
(d)Annualized.
3
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE GOVERNMENT YEAR ENDED JUNE 30,
RESERVES -----------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of year............ $ 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(b)............... .0463(b) .0443 .0461(b) .0439(b) .0244(b) .0256(b) .0421 .0640 .0765
Net realized gain on in-
vestments............... -0- -0- -0- -0- -0- .0001 -0- -0- .0001
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase in net
assets from operations.. .0463 .0443 .0461 .0439 .0244 .0257 .0421 .0640 .0766
------- ------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS AND DIS-
TRIBUTIONS
Dividends from net in-
vestment income......... (.0463) (.0443) (.0461) (.0439) (.0244) (.0256) (.0421) (.0640) (.0765)
Distributions from net
realized gains.......... -0- -0- -0- -0- -0- (.0001) -0- -0- (.0001)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total dividends and dis-
tributions.............. (.0463) (.0443) (.0461) (.0439) (.0244) (.0257) (.0421) (.0640) (.0766)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 4.74% 4.53% 4.72% 4.48% 2.48% 2.60% 4.30% 6.61% 7.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 4,909 $ 3,762 $ 3,205 $ 2,514 $ 2,061 $ 1,783 $ 1,572 $ 1,070 $ 584
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% .95% .89% .88%
Expenses, before waivers
and reimbursements..... 1.01% 1.00% 1.01% 1.05% 1.04% 1.02% .97% .93% .98%
Net investment
income(b).............. 4.63%(b) 4.44% 4.60%(b) 4.42%(b) 2.46%(b) 2.55%(b) 4.17% 6.28% 7.65%
<CAPTION>
ALLIANCE GOVERNMENT
RESERVES
1989
--------
<S> <C>
Net asset value, begin-
ning of year............ $ 1.00
--------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(b)............... .0774
Net realized gain on in-
vestments............... -0-
--------
Net increase in net
assets from operations.. .0774
--------
LESS: DIVIDENDS AND DIS-
TRIBUTIONS
Dividends from net in-
vestment income......... (.0774)
Distributions from net
realized gains.......... -0-
--------
Total dividends and dis-
tributions.............. (.0774)
--------
Net asset value, end of
year.................... $ 1.00
========
TOTAL RETURN
Total investment return
based on net asset
value(a)................ 8.04%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)........... $ 522
Ratio to average net as-
sets of:
Expenses, net of waivers
and reimbursements..... .88%
Expenses, before waivers
and reimbursements..... .98%
Net investment
income(b).............. 7.86%
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE TREASURY YEAR ENDED JUNE 30, SEPTEMBER 1, 1993(A)
RESERVES -------------------------------------- THROUGH
1998 1997 1996 1995 JUNE 30, 1994
-------- -------- -------- -------- --------------------
<S> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(b).............. .0453 .0443 .0466 .0460 .0260
-------- -------- -------- -------- -------
LESS: DIVIDENDS
Dividends from net in-
vestment income........ (.0453) (.0443) (.0466) (.0460) (.0260)
-------- -------- -------- -------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
TOTAL RETURN
Total investment return
based on net asset
value(c)............... 4.63% 4.53% 4.77% 4.71% 3.18%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in thousands)......... $740,056 $704,084 $700,558 $493,702 $80,720
Ratio to average net as-
sets of:
Expenses, net of waiv-
ers and reimburse-
ments................. .95% .85% .81% .69% .28%(d)
Expenses, before waiv-
ers and reimburse-
ments................. 1.01% 1.00% 1.05% 1.05% 1.28%(d)
Net investment
income(b)............. 4.53% 4.43% 4.64% 4.86% 3.24%(d)
</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.
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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.
(d) Annualized.
4
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE MUNICIPAL GENERAL PORTFOLIO
TRUST ----------------------------------------------------------------------------------------------------------
SIX MONTHS
YEAR ENDED JUNE 30, ENDED YEAR ENDED
------------------------------------------------------------------------------- JUNE 30, DECEMBER 31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------ ------ ------ ---------- ------------
<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 .028 .029 .028(d) .018(d) .020(d) .034 .046 .055 .030 .047
Net realized and
unrealized loss on
investments........ -0- -0- -0- (.003) -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value from
operations......... .028 .028 .029 .025 .018 .020 .034 .046 .055 .030 .047
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
ADD: CAPITAL
CONTRIBUTIONS
Capital Contributed
by the Adviser..... -0- -0- -0- .003 -0- -0- -0- -0- -0- -0- -0-
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS: DIVIDENDS
Dividends from net
investment income.. (.028) (.028) (.029) (.028) (.018) (.020) (.034) (.046) (.055) (.030) (.047)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
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 RETURN
Total investment
return based on net
asset value(a)..... 2.85% 2.81% 2.93% 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b) 4.81%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in
millions).......... $1,196 $ 980 $1,148 $1,189 $1,134 $1,016 $ 914 $ 883 $ 798 $ 695 $ 633
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements.... .98% .94% .95% .94% .92% .92% .92% .89% .83% .84%(b) .83%
Expenses, before
waivers and
reimbursements.... .98% .94% .95% .95% .94% .94% .95% .95% .93% .94%(b) .93%
Net investment
income(d)......... 2.81% 2.76% 2.90% 2.78%(d) 1.80%(d) 2.02%(d) 3.40% 4.57% 5.50% 5.96%(b) 4.69%
</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.
5
<PAGE>
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
----------------------------------------------------------------------------------------------------
SIX MONTHS
YEAR ENDED JUNE 30, ENDED
-------------------------------------------------------------------------------------- JUNE 30,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- ------- ------- ----------
<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(a)....... .027 .027 .028 .028 .018 .019 .034 .042 .051 .027
-------- -------- -------- -------- -------- -------- -------- ------- ------- -------
LESS: DIVIDENDS
Dividends from
net investment
income.......... (.027) (.027) (.028) (.028) (.018) (.019) (.034) (.042) (.051) (.027)
-------- -------- -------- -------- -------- -------- -------- ------- ------- -------
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 RETURN
Total investment
return based on
net asset
value(b)........ 2.74% 2.77% 2.87% 2.84% 1.77% 1.94% 3.47% 4.32% 5.26% 5.61%(c)
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period
(000's omitted).. $520,562 $355,461 $330,984 $177,254 $162,839 $100,529 $100,476 $71,748 $62,536 $41,910
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. .93% .85% .85% .85% .84% .80% .80% .80% .80% .85%(c)
Expenses, before
waivers and
reimbursements.. 1.01% 1.04% 1.03% 1.03% 1.08% 1.06% 1.12% 1.15% 1.18% 1.35%(c)
Net investment
income(a)...... 2.69% 2.73% 2.82% 2.81% 1.77% 1.91% 3.35% 4.20% 5.13% 5.45%(c)
<CAPTION>
YEAR ENDED
DECEMBER 31,
1988
------------
<S> <C>
Net asset value,
beginning of
period.......... $ 1.00
------------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income(a)....... .041
------------
LESS: DIVIDENDS
Dividends from
net investment
income.......... (.041)
------------
Net asset value,
end of period... $ 1.00
============
TOTAL RETURN
Total investment
return based on
net asset
value(b)........ 4.14%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period
(000's omitted).. $41,335
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. 1.00%
Expenses, before
waivers and
reimbursements.. 1.33%
Net investment
income(a)...... 4.03%
</TABLE>
- -------
(a) Net of expenses reimbursed or waived by the Adviser.
(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 re-
demption on the last day of the period.
(c) Annualized.
6
<PAGE>
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
-------------------------------------------------------------------------------------------------------
SIX MONTHS
YEAR ENDED JUNE 30, ENDED
---------------------------------------------------------------------------------------- JUNE 30,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----------
<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(b)....... .027 .027 .029 .027 .018 .020 .032 .043 .050 .029
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
LESS: DIVIDENDS
Dividends from
net investment
income.......... (.027) (.027) (.029) (.027) (.018) (.020) (.032) (.043) (.050) (.029)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
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 RETURN
Total investment
return based on
net asset
value(c)........ 2.74% 2.76% 2.91% 2.78% 1.83% 2.05% 3.26% 4.43% 5.17% 6.02%(d)
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period (000's
omitted)........ $422,464 $357,148 $297,862 $236,479 $219,673 $156,200 $121,317 $111,957 $104,097 $242,124
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. .96% .93% .93% .93% .93% .93% .95% 1.00% .99% .92%(d)
Expenses, before
waivers and
reimbursements.. .97% .96% .94% 1.01% 1.02% 1.02% 1.05% 1.10% 1.09% 1.02%(d)
Net investment
income(b)...... 2.71% 2.73% 2.86% 2.75% 1.82% 2.01% 3.18% 4.32% 5.03% 5.90%(d)
<CAPTION>
JUNE 2,
1988(A)
THROUGH
DECEMBER 31,
1988
--------------
<S> <C>
Net asset value,
beginning
of period....... $ 1.00
--------------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income(b)....... .030
--------------
LESS: DIVIDENDS
Dividends from
net investment
income.......... (.030)
--------------
Net asset value,
end of period... $ 1.00
==============
TOTAL RETURN
Total investment
return based on
net asset
value(c)........ 5.20%(d)
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period (000's
omitted)........ $103,390
Ratio to average
net assets of:
Expenses, net of
waivers and
reimbursements.. .89%(d)
Expenses, before
waivers and
reimbursements.. 1.10%(d)
Net investment
income(b)...... 5.21%(d)
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
7
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT PORTFOLIO
------------------------------------------------------------------------------------
JANUARY 5,
1990(A)
YEAR ENDED JUNE 30, THROUGH
------------------------------------------------------------------------ JUNE 30,
1998 1997 1996 1995 1994 1993 1992 1991 1990
-------- -------- ------- ------- ------- ------- ------- ------- ----------
<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(b).............. .027 .027 .028 .028 .017 .020 .033 .045 .026
-------- -------- ------- ------- ------- ------- ------- ------- -------
LESS: DIVIDENDS
Dividends from net
investment income...... (.027) (.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 $ 1.00
======== ======== ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN
Total investment return
based on net asset
value(c)............... 2.75% 2.76% 2.88% 2.78% 1.71% 2.00% 3.35% 4.57% 5.53%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's
omitted)............... $124,107 $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........ .93% .80% .80% .80% .77% .70% .58% .44% .19%(d)
Expenses, before
waivers and
reimbursements........ 1.06% 1.10% 1.15% 1.21% 1.21% 1.16% 1.22% 1.16% 1.10%(d)
Net investment
income(b)............. 2.69% 2.72% 2.84% 2.77% 1.69% 1.97% 3.28% 4.39% 5.39%(d)
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
---------------------------------------------------------
YEAR ENDED JUNE 30, FEBRUARY 7, 1994(A)
------------------------------------ THROUGH
1998 1997 1996 1995 JUNE 30, 1994
-------- -------- ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income(b).............. .026 .027 .028 .029 .008
-------- -------- ------- ------- -------
LESS: DIVIDENDS
Dividends from net in-
vestment income........ (.026) (.027) (.028) (.029) (.008)
-------- -------- ------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= ======= =======
TOTAL RETURN
Total investment return
based on net asset
value(c)............... 2.67% 2.72% 2.89% 2.93% 2.08%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (000's omitted)... $151,617 $123,579 $98,098 $74,133 $36,909
Ratio to average net as-
sets of:
Expenses, net of waiv-
ers and reimburse-
ments................. .94% .85% .82% .74% .70%(d)
Expenses, before waiv-
ers and reimburse-
ments................. 1.07% 1.12% 1.19% 1.29% 1.93%(d)
Net investment
income(b)............. 2.63% 2.68% 2.84% 2.98% 2.07%(d)
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
8
<PAGE>
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
----------------------------------------------
YEAR ENDED JUNE 30, OCTOBER 25 1994(A)
-------------------------- THROUGH
1998 1997 1996 JUNE 30, 1995
-------- ------- ------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- -------
INCOME FROM INVESTMENT OPERA-
TIONS
Net investment income(b)....... .029 .028 .029 .023
-------- ------- ------- -------
LESS: DIVIDENDS
Dividends from net investment
income........................ (.029) (.028) (.029) (.023)
-------- ------- ------- -------
Net asset value, end of peri-
od............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= =======
TOTAL RETURN
Total investment return based
on net asset value(c)......... 2.90% 2.83% 2.97% 3.48%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted)............... $123,822 $78,775 $89,557 $66,921
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements............... .93% .80% .78% .44%(d)
Expenses, before waivers and
reimbursements............... 1.03% 1.15% 1.15% 1.30%(d)
Net investment income(b)...... 2.86% 2.78% 2.91% 3.48%(d)
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
-----------------------------------
YEAR ENDED
JUNE 30, JULY 28, 1995(A)
----------------- THROUGH
1998 1997 JUNE 30, 1996
-------- ------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period...... $ 1.00 $ 1.00 $ 1.00
-------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b).................. .028 .030 .030
-------- ------- -------
LESS: DIVIDENDS
Dividends from net investment income...... (.028) (.030) (.030)
-------- ------- -------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00
======== ======= =======
TOTAL RETURN
Total investment return based on net asset
value(c)................................. 2.87% 3.03% 3.32%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omit-
ted)..................................... $113,095 $89,149 $91,179
Ratio to average net assets of:
Expenses, net of waivers and reimburse-
ments................................... .93% .65% .58%(d)
Expenses, before waivers and reimburse-
ments................................... 1.06% 1.10% 1.24%(d)
Net investment income(b)................. 2.82% 2.97% 3.12%(d)
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
9
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
----------------------------
YEAR ENDED APRIL 17, 1997(A)
JUNE 30, THROUGH
1998 JUNE 30, 1997
---------- -----------------
<S> <C> <C>
Net asset value, beginning of period............. $ 1.00 $ 1.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income(b)......................... .028 .007
------- -------
LESS: DIVIDENDS
Dividends from net investment income............. (.028) (.007)
------- -------
Net asset value, end of period................... $ 1.00 $ 1.00
======= =======
TOTAL RETURN
Total investment return based on net asset
value(c)(d)..................................... 2.83% 3.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)........ $27,832 $15,046
Ratio to average net assets of:
Expenses, net of waivers and reimbursements(d).. .85% .50%
Expenses, before waivers and reimbursements(d).. 1.37% 2.99%
Net investment income(b)(d)..................... 2.80% 3.47%
</TABLE>
- -------
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 re-
demption on the last day of the period.
(d) Annualized.
---------------
From time to time the 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. Further informa-
tion about each Fund's performance is contained in the annual report to share-
holders and Statement of Additional Information which may be obtained without
charge by contacting Alliance Fund Services, Inc. at the address shown in this
prospectus.
10
<PAGE>
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 invest-
ment objectives of each of the other Funds are in the following order of pri-
ority--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 invest-
ing 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 ("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 pol-
icies 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 or-
der 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 limita-
tions are more permissive than Rule 2a-7, each Fund will comply with the more
restrictive provisions of the Rule.
ALLIANCE CAPITAL RESERVES
The money market securities in which the Fund 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 or denominated in U.S. dollars and issued by U.S. branches of for-
eign 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
the Fund 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 fully as that term is defined in
Rule 2a-7 under the 1940 Act. These agreements are entered into with "primary
dealers" (as designated by the Federal Reserve Bank of New York) in U.S. Gov-
ernment securities or State Street Bank and Trust Company, the Fund's Custodi-
an, and would create a loss to the Fund if, in the event of a dealer default,
the proceeds from the sale of the collateral were less than the repurchase
price. The Fund may also invest in the types of instruments described in (2)
above issued or maintained at foreign branches of U.S. banks described in such
clause and prime quality dollar-denominated commercial paper issued by foreign
companies meeting the criteria specified in (3) above. The money market secu-
rities in which the Fund invests may have variable or floating rates of inter-
est ("variable rate obligations") as permitted by Rule 2a-7. Variable rate ob-
ligations 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 obliga-
11
<PAGE>
tion is tied. Some variable rate obligations allow the holder to demand pay-
ment of principal and accrued interest at any time, or at specified intervals.
The Fund follows Rule 2a-7 with respect to the diversification, quality, and
maturity of variable rate obligations.
To the extent the Fund purchases money market instruments issued by foreign
entities, consideration will be given due to the domestic marketability of
such instruments, and possible interruptions of, or restrictions on, the flow
of international currency transactions.
The Fund may purchase restricted securities that are determined by the Ad-
viser to be liquid in accordance with procedures adopted by the Trustees of
the Fund, 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 Securi-
ties 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.
The Fund may also invest up to 10% of the value of its net assets in securi-
ties as to which a liquid trading market does not exist, provided such invest-
ments are consistent with the Fund's investment objectives. Such securities
may include securities that are not readily marketable, such as certain secu-
rities 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 illiquid se-
curities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems representa-
tive of their value, the value of the Fund's net assets could be adversely af-
fected.
The Fund may invest in asset-backed securities that meet its existing diver-
sification, quality and maturity criteria. Asset-backed securities are securi-
ties 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 bene-
ficial interest in a special purpose trust, limited partnership interest, or
commercial paper or other debt securities issued by a special purpose corpora-
tion. Although the securities may have some form of credit or liquidity en-
hancement, payments on the securities depend predominately upon collection of
the loans and receivables held by the issuer. It is the Fund's current inten-
tion 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, the Fund
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 cer-
tificates of deposit, bankers' acceptances and interest bearing savings depos-
its; (2) invest more than 5% of its assets in 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. Govern-
ment); (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 the Fund's assets would be subject to repurchase agreements not terminable
within seven days.
As a matter of operating policy, the Fund may invest no more than 5% of its
total assets in the securities of any one issuer (as determined pursuant to
Rule 2a-7), except that the Fund may invest up to 25% of its total assets in
the first tier securities (as defined in Rule 2a-7) of a single issuer for a
period of up to three business days. Fundamental policy number (2) would give
the Fund 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 MONEY RESERVES
The money market securities in which the Fund invests include: (1) marketable
obligations of, or guaran-
12
<PAGE>
teed by, the United States Government, its agencies or instrumentalities (col-
lectively, 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 Corpora-
tion ("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 rates AAA, AA or A by Standard &
Poor's, or Aaa, Aa or A by Moody's] and participation interests in loans ex-
tended by banks to such companies; and (4) repurchase agreements that are col-
lateralized fully as that term is defined in Rule 2a-7 ("Rule 2a-7") under the
1940 Act. Repurchase agreements may be entered into only with those banks (in-
cluding State Street Bank and Trust Company, the Fund'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 the Fund if, in the event of a
vendor default, the process from the sale of the collateral were less than the
repurchase price. The money market securities in which the Fund invests may
have variable or floating rates of interest ("variable rate obligations") as
permitted by Rule 2a-7. 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 ob-
ligation is tied. Some variable rate obligations allow the holder to demand
payment of principal and accrued interest at any time, or at specified inter-
vals. The Fund follows Rule 2a-7 with respect to the diversification, quality
and maturity of variable rate obligations.
To the extent the Fund 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.
The Fund may purchase restricted securities that are determined by the Ad-
viser to be liquid in accordance with procedures adopted by the Trustees of
the Fund, 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 Securi-
ties 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.
The Fund may also invest up to 10% of the value of its net assets in securi-
ties as to which a liquid trading market does not exist, provided such invest-
ments are consistent with the Fund's investment objectives. Such securities
may include securities that are not readily marketable, such as certain secu-
rities 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 illiquid se-
curities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems representa-
tive of their value, the value of the Fund's net assets could be adversely af-
fected.
The Fund may invest in asset-backed securities that meet its existing diver-
sification, quality and maturity criteria. Asset-backed securities are securi-
ties 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 bene-
ficial interest in a special purpose trust, limited partnership interest, or
commercial paper or other debt securities issued by a special purpose corpora-
tion. Although the securities may have some form of credit or liquidity en-
hancement, payments on the securities depend predominately upon collection of
the loans and receivables held by the issuer. It is the Fund's current inten-
tion 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, the Fund
may not: (1) invest more than 25% of its assets in the securities of issuers
conducting their principal business activities in any one industry
13
<PAGE>
although there is no such limitation with respect to U.S. Government securi-
ties or certificates of deposit, bankers' 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 re-
quests; (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 the Fund's assets would be subject to repurchase agreements
not terminable within seven days.
As a matter of operating policy, the Fund may invest no more than 5% of its
total assets in the securities of any one issuer (as determined pursuant to
Rule 2a-7), except that the Fund may invest up to 25% of its total assets in
the first tier securities (as defined in Rule 2a-7) of a single issuer for a
period of up to three business days. Fundamental policy number (2) would give
the Fund 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 the Fund invests are: (1) marketable obligations of,
or guaranteed by, the United States Government, its agencies or instrumentali-
ties (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
fully as that term is defined in Rule 2a-7 under the 1940 Act. These agree-
ments 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, the Fund's Custodian, and would create a loss to the Fund
if, in the event of a dealer default, the proceeds from the sale of the col-
lateral were less than the repurchase price. The Fund 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 the Fund. The money market securities in which the
Fund may invest may have variable or floating rates of interest ("variable
rate obligations") as permitted by Rule 2a-7. 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 and accrued interest at any time, or at
specified intervals. The Fund follows Rule 2a-7 with respect to the diversifi-
cation, quality and maturity of variable rate obligations.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the Fund
may not: (1) borrow money except from banks on a temporary basis or via enter-
ing 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 re-
demption requests, if they should occur; such borrowings may not be used to
purchase investments and the Fund 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 the Fund invests are: (1) issues of the U. S. Trea-
sury, such as bills, certificates of indebtedness, notes and bonds; and (2)
repurchase agreements that are collateralized fully as that term is defined in
Rule 2a-7 under the 1940 Act. These agreements are entered into with "primary
dealers" (as des-
14
<PAGE>
ignated by the Federal Reserve Bank of New York) in U.S. Government securities
or State Street Bank and Trust Company, the Fund's Custodian. For each repur-
chase agreement, the Fund requires continual maintenance of the market value
of the underlying collateral in amounts equal to, or in excess of, the agree-
ment amount. In the event of a dealer default, the Fund might suffer a loss to
the extent that the proceeds from the sale of the collateral were less than
the repurchase price. The Fund 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 the Fund. The
money market securities in which the Fund may invest may have variable or
floating rates of interest ("variable rate obligations") as permitted by Rule
2a-7. Variable rate obligations have interest rates which are adjusted either
at predesignated periodic intervals or whenever there is a change in the mar-
ket 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
and accrued interest at any time, or at specified intervals. The Fund follows
Rule 2a-7 with respect to the diversification, quality and maturity of vari-
able rate obligations.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the Fund
may not: (1) borrow money except from banks on a temporary basis or via enter-
ing 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 re-
demption requests, if they should occur; such borrowings may not be used to
purchase investments and the Fund 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, liquid-
ity and, to the extent consistent with these objectives, maximum current in-
come that is exempt from income taxation to the extent described below. Except
when a Portfolio assumes a temporary defensive position, at least 80% of each
Portfolio's total assets will be invested in such 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 1997, 100%
of the income of each Portfolio was exempt from Federal income taxes). The
Fund may in the future establish additional portfolios which may have differ-
ent investment objectives.
The General Portfolio seeks maximum current income that is exempt from Fed-
eral income taxes by investing principally in a diversified portfolio of high
quality municipal securities. Such income may be subject to state or local in-
come taxes.
The New York Portfolio seeks maximum current income that is exempt from Fed-
eral, 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 po-
litical 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
15
<PAGE>
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 se-
curities 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 Fed-
eral 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 Fed-
eral 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 Ad-
viser to be liquid in accordance with procedures adopted by the Trustees, in-
cluding securities eligible for resale under Rule 144A under the Securities
Act of 1933 (the "Securities Act"). Restricted securities are securities sub-
ject 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 munic-
ipal 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 pri-
vate 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) inter-
est on all tax-exempt obligations will be included in "adjusted current earn-
ings" of corporations for AMT purposes. Such bonds have provided, and may con-
tinue 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 deci-
sion. The Adviser believes that by maintaining each Portfolio's investments in
liquid, short-term, high quality investments, each Portfolio is largely insu-
lated from the credit risks that exist on long-term municipal securities of
the relevant state. See the Statement of Additional Information for a more de-
tailed discussion of the financial condition of New York, California, Connect-
icut, 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
16
<PAGE>
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, ac-
cordingly, 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 bil-
lion. Each Portfolio will comply with Rule 2a-7 with respect to its invest-
ments in variable rate obligations supported by letters of credit.
All of the Fund's 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 Corpora-
tion (AAA and AA or SP-1 and SP-2), or judged by the Adviser to be of compara-
ble quality. Securities must also meet credit standards applied by the Advis-
er.
To further enhance the quality and liquidity of the securities in which the
Portfolios invest, such securities frequently are supported by credit and li-
quidity 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 in-
stitution 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 cer-
tain 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 custo-
dian will maintain, in a separate account of the respective Portfolio, liquid
assets 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 set-
tlement 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 the Fund 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 il-
liquid 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 con-
tractual 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
17
<PAGE>
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 pur-
chase more than 10% of any class of the voting securities of any one issuer
except those of the U.S. Government.
As a matter of operating policy, the General Portfolio may invest no more
than 5% of its assets in the securities of any one issuer (as determined pur-
suant to Rule 2a-7), except that the Portfolio may invest up to 25% of its as-
sets in the first tier securities (as defined in Rule 2a-7 and described in
the Statement of Additional Information) of a single issuer for a period of up
to three business days. Each remaining Portfolio may, with respect to 75% of
its assets, invest no more than 5% of its assets in the securities of any one
issuer; the remaining 25% of each such Portfolio's assets may be invested in
securities of one or more issuers provided that they are first tier securi-
ties. Fundamental policy number (i) with respect to the General Portfolio and
number (ii) with respect to all other Portfolios would give the Portfolios the
investment latitude described therein only in the event Rule 2a-7 is further
amended in the future.
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
Instruct your Investment Executive to use ACR, AMR, AGR, ATR, AMT-General,
AMT-NY, AMT-CA, AMT-CT, AMT-NJ, AMT-VA, AMT-FL or AMT-MA in conjunction with
your brokerage account.
SUBSEQUENT INVESTMENTS
A. BY SWEEP
Davenport & Company LLC ("Davenport") offers an automatic "sweep" for the
Funds in the operation of brokerage accounts for its customers. If you qualify
for the sweep arrangement, Davenport will, on a daily basis, sweep into your
account all available credit balances.
B. BY CHECK THROUGH DAVENPORT
Mail or deliver your check made payable to Davenport & Company LLC to your
Investment Executive who will deposit it into the Fund. Please indicate your
account number on the check.
C. BY CONTACTING YOUR INVESTMENT EXECUTIVE
Available credit balances from proceeds of your securities sales or from any
other source can be moved into your Fund account by contacting your Investment
Executive each time that you know there is a cash balance.
REDEMPTIONS
A. BY SWEEP
If you qualify for the "sweep", Davenport will automatically transfer from
your Fund account sufficient cash to cover any debit balance that may occur in
your cash account for any reason.
B. 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 ac-
crued dividends) in your account. You must first complete a Signature Card
which you can obtain from your Investment Executive. The checkwriting service
enables you to receive the daily dividend on the shares to be redeemed until
the day that your check is presented for payment.
C. BY CONTACTING YOUR INVESTMENT EXECUTIVE
Instruct your Investment Executive to make a withdrawal from your Fund ac-
count to purchase securities or to issue a Davenport check.
18
<PAGE>
Redemption proceeds are normally mailed by Davenport on settlement date, but
in no event later than the next business day, unless redemptions have been
suspended or postponed due to the determination of an "emergency" by the Secu-
rities and Exchange Commission or due to certain other unusual conditions.
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 con-
stant 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. (Eastern time). The net asset value per share of a Fund is calcu-
lated 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 ex-
penses, 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. (Eastern 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 re-
ceived 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, you might have difficulty in
reaching Alliance Fund Services, Inc. by telephone in which event you should
issue written instructions to Alliance Fund Services, Inc. at the address
shown in this prospectus. Alliance Fund Services, Inc. is not responsible for
the authenticity of telephone requests to purchase or sell shares. Alliance
Fund Services, Inc. will employ reasonable procedures to verify that telephone
requests are genuine and could be liable for losses arising from unauthorized
transactions if it failed to do so. Dealers or agents may charge a commission
for handling telephone requests. The telephone service may be suspended or
terminated at anytime without notice.
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. (Eastern time) and is paid immedi-
ately 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 Portfo-
lio 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 inter-
est 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. Distribu-
19
<PAGE>
tions 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 Jer-
sey 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 per-
sonal 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 au-
thority, 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 intan-
gible assets owned by Florida residents. U.S. Government securities and Flor-
ida municipal securities are exempt from this intangible tax. It is antici-
pated 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 se-
curities 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 Mas-
sachusetts 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 nor-
mally made near year-end. Each year shortly after December 31, the Fund will
send you tax information stating the amount and type of all its distributions
for the year 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 in-
vestment program, subject to the general control of the Trustees of each Fund.
For the fiscal year ended June 30, 1998, ACR, AMR, AGR, ATR, AMT-General, AMT-
NY, AMT-CA, AMT-CT, AMT-NJ, AMT-VA, AMT-FL and AMT-MA, each paid the Adviser
an advisory fee (net of reimbursement for AMR, AGR, ATR, AMT-NY, AMT-CT, AMT-
NJ, AMT-VA, AMT-FL and AMT-MA) at an annual rate of .46, .48, .46, .49, .50,
.47, .50, .41, .41, .44, .40 and .08 of 1%, respectively, of the average daily
value of the respective Portfolio's net assets.
The Adviser is a leading international investment manager supervising client
accounts with assets as of June 30, 1998 of more than $262 billion (of which
more than $107 billion represented the assets of investment companies). The
Adviser's clients are primarily major corporate employee benefit funds, public
employee retirement systems, investment companies, foundations and endowment
funds. The 58 registered investment companies managed by the Adviser compris-
ing 123 separate investment portfolios currently have more than 3.5 million
shareholders. As of June 30, 1998, the Adviser was retained as an investment
manager for employee benefit plan assets for 32 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,
20
<PAGE>
1998, the ACR, AMR, AGR, ATR, AMT-General, AMT-NY, AMT-CA, AMT-CT, AMT-NJ,
AMT-VA, AMT-FL and AMT-MA each paid the Adviser a distribution services fee at
an annual rate of .25, .25, .25, .20, .25, .21, .24, .21, .21, .21, .22 and
.14 of 1%, respectively, of the average daily value of the net assets of each
Portfolio. 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 par-
tially defray other expenses incurred by the Adviser in distributing the
Fund's 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 Fund or its shareholders) in the future to maintain such legal con-
formity 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 Compa-
ny, P.O. Box 1912, Boston, MA 02105, is the Fund's Custodian. Alliance Fund
Services, Inc., P.O. Box 1520, Secaucus NJ 07096-1520, and Alliance Fund Dis-
tributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Fund's Transfer Agent and Distributor, respectively. The transfer agent
charges a fee for its services.
YEAR 2000. Many computer systems and applications in use today process trans-
actions using two digit date fields for the year of the transaction, rather
than the full four digits. If these systems are not modified or replaced,
transactions occurring after 1999 could be processed as year "1900," which
could result in processing inaccuracies and computer system failures. This is
commonly known as the Year 2000 problem. Should any of the computer systems
employed by the Fund's major service providers fail to process Year 2000 in-
formation properly, that could have a significant negative impact on the
Funds' operations and the services that are provided to the Funds' sharehold-
ers.
With respect to the Year 2000, the Funds have been advised that the Adviser,
Distributor and Transfer Agent (collectively, "Alliance") began to address the
Year 2000 issue several years ago in connection with the replacement or up-
grading of certain computer systems and applications. During 1997, Alliance
began a formal Year 2000 initiative, which established a structured and coor-
dinated process to deal with the Year 2000 issue. Alliance reports that it has
completed its assessment of the Year 2000 issues on its domestic and interna-
tional computer systems and applications. Currently, management of Alliance
expects that the required modifications for the majority of its significant
systems and applications that will be in use on January 1, 2000, will be com-
pleted and tested by the end of 1998. Full integration testing of these sys-
tems and testing of interfaces with third-party suppliers will continue
through 1999. At this time, management of Alliance believes that the costs as-
sociated with resolving this issue will not have a material adverse effect on
its operations or on its ability to provide the level of services it currently
provides to the Funds.
The Funds and Alliance have been advised by the Funds' Custodian that it is
also in the process of reviewing its systems with the same goals. As of the
date of this prospectus, the Funds and Alliance have no reason to believe that
the Custodian will be unable to achieve these goals.
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
April 1984, having previously been a Maryland corporation since formation in
December 1978. ACR and AMR are series of Alliance Capital Reserves, a diversi-
fied 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
21
<PAGE>
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-diversi-
fied 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 Mary-
land 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. Share-
holders 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 theo-
retically 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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