ALLIANCE GROWTH & INCOME FUND INC, 485APOS, 2000-11-29

ALLIANCE GROWTH & INCOME FUND INC
485APOS, 2000-11-29

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As filed with the Securities and Exchange
Commission on November 29, 2000

File No. 2-11023
811-126

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 97 X

and/or

REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 36 X

________________________________
ALLIANCE GROWTH AND INCOME FUND, INC.
(Exact name of Registrant as Specified in Charter)

Alliance Capital Management L.P.
1345 Avenue of the Americas, New York, New York, 10105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, Including Area Code:(800) 221-5672
________________________________

EDMUND P. BERGAN, JR., ESQ.
1345 Avenue of the Americas
New York, New York, 10105
(Name and address of agent for service)

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

It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)

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60 days after filing pursuant to paragraph (a)(1)
X on February 1, 2001 pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

_____ This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

<PAGE>

Alliance Growth and Income Fund
Prospectus and Application

February 1, 2001

Alliance Growth and Income Fund, Inc. is an open-end management
investment company that offers investors the opportunity to seek
appreciation through investment primarily in dividend-paying
common stocks of good quality, although the Fund also may invest
in fixed-income and convertible securities.

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

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

<PAGE>

TABLE OF CONTENTS

PAGE

RISK/RETURN SUMMARY.................................
FEES AND EXPENSES OF THE FUND.......................
GLOSSARY............................................
DESCRIPTION OF THE FUND.............................
Investment Objective and Principal Policies
and Risks...........................................
Description of Additional Investment Practices......
Additional Risk Considerations......................
MANAGEMENT OF THE FUND..............................
PURCHASE AND SALE OF SHARES.........................
How The Fund Values Its Shares......................
How To Buy Shares...................................
How To Exchange Shares..............................
How To Sell Shares..................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..................
DISTRIBUTION ARRANGEMENTS...........................
GENERAL INFORMATION.................................

<PAGE>

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

RISK/RETURN SUMMARY

The following is a summary of certain key information about
Alliance Growth and Income Fund. This Summary describes the
Fund's objective, principal investment strategies, principal
risks and fees.

A more detailed description of the Fund, including the risks
associated with investing in the Fund, can be found further back
in this Prospectus. Please be sure to read this additional
information BEFORE you invest. The Fund may at times use certain
types of investment derivatives such as options, futures, and
forwards. The use of these techniques involves special risks
that are discussed in this Prospectus.

Objective:

The Fund's investment objective is appreciation through
investments primarily in dividend-paying common stocks of good
quality, although the Fund also may invest in fixed-income and
convertible securities.

Principal Investment Strategies:

The Fund invests primarily in dividend-paying common stocks of
large, well established, "blue-chip" companies. The Fund also
may invest in fixed-income and convertible securities and in
securities of foreign issuers.

Principal Risks:

Among the principal risks of investing in the Fund is market
risk, interest rate risk and credit risk. The Fund's investments
in foreign securities have foreign risk and currency risk.

Other important things for you to note:

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

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

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Performance Table and Bar Chart

The table and bar chart provide an indication of the historical
risk of an investment in the Fund by showing how the Fund's
average annual returns for one, five, and 10 years compare to
those of a broad based securities market index and by showing
changes in the Fund's performance from year to year over 10
years. The Fund's past performance, of course, does not
necessarily indicate how it will perform in the future. As with
all investments, you may lose money by investing in the Fund.

Performance Table

1 Year 5 Years 10 Years
---------- ---------- ----------
Class A [____]% [____]% [____]%
Class B [____]% [____]% [____]%
Class C [____]% [____]% [____]%
Russell 1000 Value Index [____]% [____]% [____]%

Index returns and average annual total returns are for the
periods ended December 31, 2000. Average annual total returns
reflect imposition of the maximum front-end or contingent
deferred sales charges as well as conversion of Class B shares to
Class A shares after the applicable period.

Performance information for periods prior to the inception of
Class B shares (2/8/91) and Class C shares (5/3/93) is the
performance of the Fund's Class A shares adjusted to reflect the
higher expense ratio of Class B and Class C shares. The average
annual total returns for Class B and Class C shares since their
actual inception dates were [____]% and [_____]%, respectively.
Index returns for the comparable periods (which date from month-
end following applicable Class inception date) were [____]% and
[____]%, respectively.

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown. Through
[_______], the year to date unannualized return for the Class A
shares was [____]%.

27.08 4.52 9.96 -4.20 37.86 24.13 28.86 21.23 10.78 [___]
-----------------------------------------------------------------------------
91 92 93 94 95 96 97 98 99 00
Calendar Year End

<PAGE>

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will fluctuate over long and
short periods. For example, during the period shown in the bar
chart, the Fund's:

[Best Quarter was up 23.25%, 4th quarter, 1998; and
Worst Quarter was down -13.82%, 3rd quarter, 1998.]

<PAGE>

FEES AND EXPENSES OF THE FUND

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

Shareholder Fees (fees paid directly from your investment)

Class A Shares Class B Shares Class C Shares
-------------- -------------- --------------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% None None

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

Exchange Fee None None None

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

** For Class C shares, the CDSC is 0% after the 1st year.

Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)

Class A Class B Class C
-------------- -------------- --------------
Management fees [____]% [____]% [____]%
Distribution (12b-1) fees [____]% [____]% [____]%
Other expenses [____]% [____]% [____]%
------- ------ -------
Total fund operating expenses [____]% [____]% [____]%
======= ======= =======

Examples

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

<PAGE>

Class A Class B+ Class B++ Class C+ Class C++
------- ------- --------- -------- ---------

After 1 year $[ ] $[ ] $[ ] $[ ] $[ ]
After 3 years $[ ] $[ ] $[ ] $[ ] $[ ]
After 5 years $[ ] $[ ] $[ ] $[ ] $[ ]
After 10 years $[ ] $[ ](a) $[ ](a) $[ ] $[ ]

+ Assumes redemption at the end of period.
++ Assumes no redemption at end of period.
(a) Assumes Class B shares convert to Class A shares after eight years.

<PAGE>

GLOSSARY

This Prospectus uses the following terms.

Types of Securities

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

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

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

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

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

Qualifying bank deposits are certificates of deposit, bankers'
acceptances and interest-bearing savings deposits of banks that
have total assets of more than $1 billion and are members of the
Federal Deposit Insurance Corporation.

Prime commercial paper is commercial paper rated Prime 1
by Moody's or A-1 or higher by S&P or, if not rated, issued by
companies that have an outstanding debt issue rated Aa or higher
by Moody's or AA or higher by S&P.

Rule 144A securities are securities that may be resold under Rule
144A of the Securities Act of 1933.

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

Rating Agencies

Fitch is Fitch, the international rating agency formed through
the merger of Fitch IBCA, Inc. and Duff & Phelps Credit Rating
Co.

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

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

Other

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

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

Commission is the Securities and Exchange Commission.

Exchange is the New York Stock Exchange.

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

<PAGE>

DESCRIPTION OF THE FUND

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

Please note that:

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

-- The description of the Fund's principal risks may
include risks discussed in the Risk/Return Summary
above. Additional information about risks of investing
in the Fund can be found in the discussion under
Additional Risk Considerations.

-- Additional descriptions of the Fund's strategies,
investments and risks can be found in the Fund's
Statement of Additional Information or SAI.

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

Investment Objective and Principal Policies and Risks
Investment Objective and Principal Policies
The Fund seeks appreciation through investments primarily in
dividend-paying common stocks of good quality. The Fund also may
invest in fixed-income securities and convertible securities.

The Fund also may try to realize income by writing covered call
options listed on domestic securities exchanges. The Fund also
invests in foreign securities. Since the purchase of foreign
securities entails certain political and economic risks, the Fund
restricts its investments in these securities to issues of high
quality. The Fund also may purchase and sell financial forward
and futures contracts and options on these securities for hedging
purposes.

<PAGE>

Risk Considerations
The value of an investment in the Fund changes with the values of
the Fund's investments. Many factors can affect those values.
In the following summary, we describe the principal risks that
may affect the Fund's portfolio as a whole. The Fund could be
subject to additional principal risks because the types of
investments made by the Fund can change over time. This
Prospectus has additional descriptions of investments that appear
in bold type in the discussions under Description of Additional
Investment Practices or Additional Risk Considerations. Those
sections also include more information about the Fund, its
investments, and related risks. Among the principal risks of
investing in the Fund are:

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

-- Interest Rate Risk This is the risk that changes in
interest rates will affect the value of the Fund's
investments in income-producing, fixed-income (i.e.,
debt) securities. Increases in interest rates may cause
the value of the Fund's investments to decline and this
decrease in value may not be offset by the higher
interest rate income. Interest rate risk is
particularly applicable to a Fund that invests in fixed-
income securities and is greater for a Fund that invests
a substantial portion of its assets in fixed-income
securities.

-- Credit Risk This is the risk that the issuer of a
security or the other party to an over-the-counter
transaction will be unable or unwilling to make timely
payments of interest or principal, or to otherwise honor
its obligations. The degree of risk for a particular
security may be reflected in its credit rating. Credit
is applicable to a Fund that invests in fixed-income
securities.

-- Foreign Risk This is the risk of investments in issuers
located in foreign countries. All Fund's with foreign
securities are subject to this risk. Fund's investing
in foreign securities may experience more rapid and
extreme changes in value than Fund's with investments
solely in securities of U.S. companies. This is because
the securities markets of many foreign countries are
relatively small, with a limited number of companies
representing a small number of industries.
Additionally, foreign securities issuers are usually not
subject to the same degree of regulation as U.S.

<PAGE>

issuers. Reporting, accounting, and auditing standards
of foreign countries differ, in some cases
significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation,
currency blockage, or political changes or diplomatic
developments could adversely affect a Funds' investments
in a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose
its entire investment.

-- Currency Risk This is the risk that fluctuations in the
exchange rates between the U.S. Dollar and foreign
currencies may negatively affect the value of a Funds'
investments. Funds with foreign securities are subject
to this risk.

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

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

Temporary Defensive Position. For temporary defensive purposes,
the Fund may reduce its position in equity securities and invest,
without limit, in certain types of short-term, liquid, high grade
or high quality debt securities. These securities may include
U.S. Government securities, qualifying bank deposits, money
market instruments, prime commercial paper and other types of
short-term debt securities including notes and bonds. Such
securities also may include short-term, foreign-currency
denominated securities of the type mentioned above issued by
foreign governmental entities, companies, and supranational
organizations. While the Fund invests for temporary defensive
purposes, it may not meet its investment objective.

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

<PAGE>

Convertible Securities. Prior to conversion, convertible
securities have the same general characteristics as non-
convertible debt securities, which generally provide a stable
stream of income with yields that are generally higher than those
of equity securities of the same or similar issuers. The price
of a convertible security will normally vary with changes in the
price of the underlying equity security, although the higher
yield tends to make the convertible security less volatile than
the underlying equity security. As with debt securities, the
market value of convertible securities tends to decrease as
interest rates rise and increase as interest rates decline.
While convertible securities generally offer lower interest or
dividend yields than non-convertible debt securities of similar
quality, they offer investors the potential to benefit from
increases in the market price of the underlying common stock.
Convertible debt securities that are rated Baa or lower by
Moody's or BBB or lower by S&P or Fitch and comparable unrated
securities as determined by Alliance may share some or all of the
risks of non-convertible debt securities with those ratings.

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

Because of the absence of a trading market for illiquid
securities, the Fund may not be able to realize its full value
upon sale. Alliance will monitor the liquidity of the Fund's
investments in illiquid securities. Rule 144A securities
generally will not be treated as "illiquid" for purposes of this
limit on investments.

The Fund may not be able to readily sell securities for which
there is no ready market. Such securities are unlike securities
that are traded in the open market and can be expected to be sold
immediately if the market is adequate. The sale price of
illiquid securities may be lower or higher than Alliance's most
recent estimate of their fair value. Generally, less public
information is available about the issuers of such securities
than about companies whose securities are traded on an exchange.
To the extent that these securities are foreign securities, there

<PAGE>

is no law in many of the countries in which the Fund may invest
similar to the Securities Act requiring an issuer to register the
sale of securities with a governmental agency or imposing legal
restrictions on resales of securities, either as to the length of
time the securities may be held or the manner of resale.
However, there may be contractual restrictions on resales of non-
publicly traded foreign securities.

Loans of Portfolio Securities. The risk in lending portfolio
securities, as with other extensions of credit, consists of the
possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, Alliance will consider all relevant facts
and circumstances including the creditworthiness of the borrower.
While securities are on loan, the borrower will pay the Fund any
income from the securities. The Fund may invest any cash
collateral in portfolio securities and earn additional income or
receive an agreed-upon amount of income from a borrower who has
delivered equivalent collateral. The Fund will have the right to
retain record ownership of loaned securities or equivalent
securities in order to exercise ownership rights such as voting
rights, subscription rights and rights to dividends, interest,
or distributions. The Fund may pay reasonable finders',
administrative, and custodial fees in connection with a loan.

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

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

In purchasing an option, the Fund would be in a position to
realize a gain if, during the option period, the price of the

<PAGE>

underlying security increased (in the case of a call) or
decreased (in the case of a put) by an amount in excess of the
premium paid; otherwise the Fund would experience a loss equal to
the premium paid for the option.

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

Options purchased or written by the Fund in negotiated
transactions are illiquid and it may not be possible for the Fund
to effect a closing transaction at an advantageous time.

Futures Contracts and Options on Futures Contracts. A "sale" of
a futures contract means the acquisition of a contractual
obligation to deliver the securities or foreign currencies or
other commodity called for by the contract at a specified price
on a specified date. A "purchase" of a futures contract means
the incurring of an obligation to acquire the securities, foreign
currencies or other commodity called for by the contract at a
specified price on a specified date. The purchaser of a futures
contract on an index agrees to take or make delivery of an amount
of cash equal to the difference between a specified dollar
multiple of the value of the index on the expiration date of the
contract ("current contract value") and the price at which the
contract was originally struck. No physical delivery of the
securities underlying the index is made.

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

The Fund will not enter into any futures contracts or options on
futures contracts if immediately thereafter the market values of
the outstanding futures contracts of the Fund and the currencies
and futures contracts subject to outstanding options written

<PAGE>

by the Fund would exceed 50% of its total assets. The Fund
may not purchase or sell a stock index future if immediately
thereafter more than 30% of its total assets would be hedged by
stock index futures. The Fund may not purchase or sell a stock
index future if, immediately thereafter, the sum of the amount of
margin deposits on the Fund's existing futures positions would
exceed 5% of the market value of the Fund's total assets.

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

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

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

<PAGE>

futures contract or currency upon exercise. Therefore, no
assurance can be given that the Fund will be able to utilize
these instruments effectively. In addition, the Fund's ability
to engage in options and futures transactions may be limited by
tax considerations and the use of certain hedging techniques may
adversely impact the characterization of income to the Fund for
U.S. federal income tax purposes.

Additional Risk Considerations
Investment in the Fund involves the special risk considerations
described below.

Currency Considerations. The Fund may receive a portion of its
revenues in foreign currencies. Therefore, the dollar equivalent
of its net assets, distributions, and income will be adversely
affected by reductions in the value of certain foreign currencies
relative to the U.S. Dollar. If the value of the foreign
currencies in which the Fund receives its income falls relative
to the U.S. Dollar between receipt of the income and the making
of Fund distributions, the Fund may be required to liquidate
securities in order to make distributions if it has insufficient
cash in U.S. Dollars to meet distribution requirements that the
Fund must satisfy to qualify as a regulated investment company
for federal income tax purposes. Similarly, if an exchange rate
declines between the time the Fund incurs expenses in U.S.
Dollars and the time cash expenses are paid, the amount of the
currency required to be converted into U.S. Dollars in order to
pay expenses in U.S. Dollars could be greater than the equivalent
amount of such expenses in the currency at the time they
were incurred. In light of these risks, the Fund may engage
in currency hedging transactions, as described above, which
involve certain special risks.

Foreign Securities. The securities markets of many foreign
countries are relatively small, with the majority of market
capitalization and trading volume concentrated in a limited
number of companies representing a small number of industries.
Consequently, the Fund's portfolio may experience greater price
volatility and significantly lower liquidity than a portfolio
invested solely in equity securities of U.S. companies. These
markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading
significant blocks of securities, than is usual in the United
States. Securities settlements may in some instances be subject
to delays and related administrative uncertainties.

Certain foreign countries require governmental approval prior to
investments by foreign persons or limit investment by foreign
persons to only a specified percentage of an issuer's outstanding
securities or a specific class of securities that may have less
advantageous terms (including price) than securities of the

<PAGE>

company available for purchase by nationals. These restrictions
or controls may at times limit or preclude investment in certain
securities and may increase the costs and expenses of the Fund.
In addition, the repatriation of investment income, capital, or
the proceeds of sales of securities from certain countries is
controlled under regulations, including in some cases the need
for certain advance government notification or authority. If a
deterioration occurs in a country's balance of payments, the
country could impose temporary restrictions on foreign capital
remittances.

The Fund also could be adversely affected by delays in, or
a refusal to grant, any required governmental approval for
repatriation, as well as by the application of other restrictions
on investment. Investing in local markets may require the Fund
to adopt special procedures that may involve additional costs
to the Fund. These factors may affect the liquidity of the
Fund's investments in any country and Alliance will monitor the
effect of any such factor or factors on the Fund's investments.
Furthermore, transaction costs including brokerage commissions
for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the United States.

Issuers of securities in foreign jurisdictions are generally
not subject to the same degree of regulation as are U.S.
issuers with respect to such matters as insider trading rules,
restrictions on market manipulation, shareholder proxy
requirements, and timely disclosure of information. The
reporting, accounting and auditing standards of foreign countries
may differ, in some cases significantly, from U.S. standards in
important respects and less information may be available to
investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S.
issuers.

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

<PAGE>

U.S. and Foreign Taxes. The Fund's investment in foreign
securities may be subject to taxes withheld at the source on
dividend or interest payments. Foreign taxes paid by the Fund
may be creditable or deductible by U.S. shareholders for U.S.
income tax purposes. No assurance can be given that applicable
tax laws and interpretations will not change in the future.
Moreover, non-U.S. investors may not be able to credit or deduct
such foreign taxes.

MANAGEMENT OF THE FUND

Investment Adviser and Fund Manager
The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, NY 10105. Alliance
is a leading international investment adviser managing client
accounts with assets as of [_____________], 2001 totaling more
than $[___] billion (of which more than $[___] billion
represented assets of investment companies). As of
[_____________], 2001, Alliance managed retirement assets for
many of the largest public and private employee benefit plans
(including [__] of the nation's FORTUNE 100 companies), for
public employee retirement funds in [__] states, for investment
companies, and for foundations, endowments, banks and insurance
companies worldwide. The [__] registered investment companies
managed by Alliance, comprising [___] separate investment
portfolios, currently have more than [___] million shareholder
accounts.

Since 1994, the person primarily responsible for the day-to-day
management of the Fund is Paul Rissman, Senior Vice President of
Alliance Capital Management Corporation. Mr. Rissman has been
associated with Alliance since prior to 1995 in a substantially
similar capacity as his current position.

Alliance provides investment advisory services and order
placement facilities for the Fund. For these advisory services,
the Fund pays Alliance a fee of .625 of 1% of the first $5
billion, .60 of 1% of the excess over $5 billion up to $7.5
billion, .575 of 1% of the excess over $7.5 billion up to $10
billion and .55 of 1% of the excess over $10 billion of the
average daily value of the Fund's net assets. The fee will be
accrued daily and paid monthly.

PURCHASE AND SALES OF SHARES

How the Fund Values Its Shares
The Fund's net asset value or NAV is calculated at 4:00 p.m.,
Eastern time, each day the Exchange is open for business.
To calculate NAV, the Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets,
is divided by the number of shares outstanding. The Fund values

<PAGE>

its securities at their current market value determined on the
basis of market quotations, or, if such quotations are not
readily available, such other methods as the Fund's directors
believe accurately reflect fair market value.

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

How to Buy Shares
You may purchase the Fund's shares through broker-dealers, banks,
or other financial intermediaries. You also may purchase shares
directly from the Fund's principal underwriter, Alliance Fund
Distributors, Inc., or AFD.

Minimum investment amounts are:

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

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

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

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

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

<PAGE>

The Fund may change, suspend, or terminate the exchange service
on 60 days' written notice.

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

-- Selling Shares Through Your Broker

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

-- Selling Shares Directly to the Fund

By Mail:

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

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

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

By Telephone:

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

<PAGE>

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

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

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

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

DIVIDENDS, DISTRIBUTIONS AND TAXES

The income dividends and capital gains distributions, if any,
declared by the Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or in additional
shares of the same class of shares of the Fund. If paid in
additional shares, the shares will have an aggregate net asset
value as of the close of business on the day following the
declaration date of the dividend or distribution equal to the
cash amount of the dividend or distribution. You may make
an election to receive dividends and distributions in cash or in
shares at the time you purchase shares. Your election can be
changed at any time prior to a record date for a dividend. There
is no sales or other charge in connection with the reinvestment
of dividends or capital gains distributions. Cash dividends may
be paid in check, or at your election, electronically via the ACH
network. There is no sales or other charge on the reinvestment
of Fund dividends and distributions.

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

For federal income tax purposes, the Fund's dividend
distributions of net income (or short-term taxable gains) will be
taxable to you as ordinary income. Any distributions of long-
term capital gains generally will be taxable to you as long-term

<PAGE>

capital gains. The Fund's distributions also may be subject to
certain state and local taxes.

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

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

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

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

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

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

<PAGE>

DISTRIBUTION ARRANGEMENTS

Share Classes. The Fund offers three classes of shares.

Class A Shares--Initial Sales Charge Alternative
You can purchase Class A shares at NAV with an initial sales
charge as follows:

INITIAL SALES CHARGE

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

Up to $100,000 4.44% 4.25% 4.00%
$100,000 up to
$250,000 3.36 3.25 3.00
$250,000 up to
$500,000 2.30 2.25 2.00
$500,000 up to
$1,000,000 1.78 1.75 1.50

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

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

<PAGE>

amounts are:

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

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

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

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

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

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

Rule 12b-1 Fee (as a Percentage of
Aggregate Average Daily Net Assets)

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

Because these fees are paid out of the Fund's assets on an
on-going basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of
sales fees. Class B and Class C shares are subject to higher
distribution fees than Class A shares (Class B shares are subject

<PAGE>

to these higher fees for a period of eight years, after which
they convert to Class A shares). The higher fees mean a higher
expense ratio, so Class B and Class C shares pay correspondingly
lower dividends and may have a lower net asset value than Class A
shares.

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

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

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

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

GENERAL INFORMATION

Under unusual circumstances, the Fund may suspend redemptions or
postpone payment for up to seven days or longer, as permitted by
federal securities law. The Fund reserves the right to close an

<PAGE>

account that through redemption has remained below $200 for 90
days. Shareholders will receive 60 days' written notice to
increase the account value before the account is closed.

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

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

Employee Benefit Plans. Certain employee benefit plans,
including employer-sponsored tax-qualified 401(k) plans and other
defined contribution retirement plans ("Employee Benefit Plans"),
may establish requirements as to the purchase, sale or exchange
of shares, including maximum and minimum initial investment
requirements, that are different from those described in this
Prospectus. Employee Benefit Plans also may not offer all of the
Fund's classes of shares. In order to enable participants
investing through Employee Benefit Plans to purchase shares of
the Fund, the maximum and minimum investment amounts may be
different for shares purchased through Employee Benefit Plans
from those described in this Prospectus. In addition, the Class
A, Class B, and Class C CDSC may be waived for investments made
through Employee Benefit Plans.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single share of the
Fund. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions).
Except as otherwise indicated, this information has been audited
by PricewaterhouseCoopers LLP, the independent accountants for
the Fund, whose report, along with the Fund's financial
statements, are included in the Fund's annual report, which is
available upon request.

<PAGE>

<TABLE>
INCOME FROM INVESTMENT OPERATIONS LESS DIVIDENDS AND DISTRIBUTIONS
<CAPTION>

NET GAINS
OR LOSSES ON DISTRIBUTIONS
NET SECURITIES DIVIDENDS IN EXCESS DISTRIBUTIONS
FISCAL YEAR NET ASSET VALUE, INVESTMENT (BOTH TOTAL FROM FROM NET OF NET FROM
OR BEGINNING OF INCOME REALIZED AND INVESTMENT INVESTMENT INVESTMENT CAPITAL
PERIOD PERIOD (LOSS) UNREALIZED) OPERATIONS INCOME INCOME GAINS

<S> <C> <C> <C> <C> <C> <C> <C>
Class A
Year Ended
10/31/00 $[.___] $[.___] $[.___] $[.___] $[.___] $[.____] $[.____]
Year Ended
10/31/99 3.44 .03(b) .62 .65 (.03) (.01) (.35)
Year Ended
10/31/98 3.48 .03(b) .43 .46 (.04) (.01) (.46)
Year Ended
10/31/97 3.00 .04(b) .87 .91 (.05) 0.00 (.38)
Year Ended
10/31/96 2.71 .05 .50 .55 (.05) 0.00 (.21)
Class B
Year Ended
10/31/00 $[.____] $[.___] $[.___] $[.___] $[.___] $[.____] $[.____]
Year Ended
10/31/99 3.41 .00(b) .62 .62 0.00 (.02) (.35)
Year Ended
10/31/98 3.45 .01(b) .43 .44 (.02) 0.00 (.46)
Year Ended
10/31/97 2.99 .02(b) .85 .87 (.03) 0.00 (.38)
Year Ended
10/31/96 2.69 .03 .51 .54 (.03) 0.00 (.21)
Class C
Year Ended
10/31/00 $[.____] $[.___] $[.___] $[.___] $[.___] $[.____] $[.____]
Year Ended
10/31/99 3.41 .00(b) .62 .62 0.00 (.02) (.35)
Year Ended
10/31/98 3.45 .01(b) .43 .44 (.02) 0.00 (.46)
Year Ended
10/31/97 2.99 .02(b) .85 .87 (.03) 0.00 (.38)
Year Ended
10/31/96 2.70 .03 .50 .53 (.03) 0.00 (.21)
</TABLE>

<PAGE>

LESS DISTRIBUTIONS RATIOS/SUPPLEMENTAL DATA

RATIO OF
RATIO OF NET
NET NET EXPENSES INCOME
ASSET ASSETS, END TO (LOSS) TO
TOTAL VALUE, TOTAL OF PERIOD AVERAGE AVERAGE PORTFOLIO
DIVIDENDS AND END OF RETURN (000'S NET NET TURNOVER
DISTRIBUTIONS PERIOD (A) OMITTED) ASSETS ASSETS RATE

$[.____] $[.____] [.__]% $[________] [.___]%* [.___]%* [__]%
(.39) 3.70 20.48 1,503,874 .93 .87 48
(.50) 3.44 14.70 988,965 .93(c) .96 89
(.43) 3.48 33.28 787,566 .92(c) 1.39 88
(.26) 3.00 21.51 553,151 .97 1.73 88
$[.____] $[.____] [.__]% $[________] [.____]%* [.___]%* [__]%
(.37) 3.66 19.56 1,842,045 1.70 .09 48
(.48) 3.41 14.07 787,730 1.72(c) .17 89
(.41) 3.45 31.83 456,399 1.72(c) .56 88
(.24) 2.99 21.20 235,263 1.78 .91 88
$[.____] $[.____] [.__]% $[________] [.____]%* [.___]%* [__]%
(.37) 3.66 19.56 518,185 1.69 .11 48
(.48) 3.41 14.07 179,487 1.72(c) .18 89
(.41) 3.45 31.83 106,526 1.76 .58 88
(.24) 2.99 20.72 61,356 1.76 .93 88

* Annualized.

(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 the
net asset value during the period, and a redemption on the last
day of the period. Initial sales charges or contingent deferred
sales charges are not reflected in the calculation of total
investment return. Total investment returns calculated for
periods of less than one year are not annualized.
(b) Based on average shares outstanding.
(c) Amounts do not reflect the impact of expense offset
arrangements with the transfer agent. Taking into account such
expense offset arrangements, the ratio of expenses to average net
assets, assuming the assumption and/or waiver/reimbursement of
expenses, would have been as follows:

1997 1998 1999 2000
Class A .91% .92% -- --
Class B 1.71% 1.71% -- --
Class C 1.70% 1.71% -- --

For more information about the Fund, the following documents are

<PAGE>

available upon request:

-- Annual/Semi-Annual Reports to Shareholders

The Fund's annual and semi-annual reports to shareholders contain
additional information on the Fund's investments. In the annual
report, you will find a discussion of the market conditions and
investment strategies that significantly affected the Fund's
performance during its last fiscal year.

-- Statement of Additional Information (SAI)

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

You may request a free copy of the current annual/semi-annual
report or the SAI, or make inquiries concerning the Fund, by
contacting your broker or other financial intermediary, or by
contacting Alliance:

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

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

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

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

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

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

On the Internet: www.sec.gov

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

SEC File Number: 811-00126

<PAGE>

Alliance Growth and Income Fund
Advisor Class Prospectus and Application

February 1, 2001

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

<PAGE>

TABLE OF CONTENTS

PAGE

RISK/RETURN SUMMARY..............................
FEES AND EXPENSES OF THE FUND....................
GLOSSARY.........................................
DESCRIPTION OF THE FUND..........................
Investment Objective and Principal Policies and
Risks..........................................
Description of Additional Investment Practices...
Additional Risk Considerations...................
MANAGEMENT OF THE FUND...........................
PURCHASE AND SALE OF SHARES......................
How The Fund Values Its Shares...................
How To Buy Shares................................
How To Exchange Shares...........................
How To Sell Shares...............................
CONVERSION FEATURE...............................
DISTRIBUTION ARRANGEMENTS........................
GENERAL INFORMATION..............................
FINANCIAL HIGHLIGHTS.............................

<PAGE>

RISK/RETURN SUMMARY

The following is a summary of certain key information about
Alliance Growth and Income Fund. This Summary describes the
Funds objective, principal investment strategies, principal risks
and fees.

Objective:

Principal Investment Strategies:

Principal Risks:

Among the principal risks of investing in the Fund is market
risk, interest rate risk and credit risk. The Fund's investments
in foreign securities have foreign risk and currency risk.

Other important things for you to note:

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

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

Performance Table and Bar Chart

<PAGE>

The table and bar chart provide an indication of the historical
risk of an investment in the Fund by showing how the Fund's
average annual returns for one, five, and 10 years (or over the
life of the Fund if the Fund is less than 10 years old) compare
to those of a broad based securities market index and by showing
changes in the Fund's performance from year to year over 10 years
(or over the life of the Fund if the Fund is less than 10 years
old). The Fund's past performance, of course, does not
necessarily indicate how it will perform in the future. As with
all investments, you may lose money by investing in the Fund.

Performance Table

1 Year Since Inception

Advisor Class [____]% [____]%
Russell 1000 Value Index [____]% [____]%

Index returns and average annual total returns are for the
periods ended December 31, 2000. Advisor Class shares inception
date is 10/1/96. Since inception index return is from 10/31/96.

Bar Chart

The following chart shows the annual returns for the Advisor
Class shares since inception. Through [_______], the year to
date unannualized return for the Advisor Class shares was
[____]%.

n/a n/a n/a n/a n/a n/a 29.57 21.48 11.33 [___]
91 92 93 94 95 96 97 98 99 00

Calendar Year End

[Best Quarter was up 23.28%, 4th quarter, 1998; and
Worst Quarter was down 13.76%, 3rd quarter, 1998.]

<PAGE>

FEES AND EXPENSES OF THE FUND

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

Shareholder Fees (fees paid directly from your investment)

ADVISOR CLASS SHARES

Maximum Front-end or Deferred Sales
Charge (Load) (as a percentage of
original purchase price or
redemption proceeds, which is lower) None

Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)

Management fees [____]%
Distribution (12b-1) fees [____]%
Other expenses [____]%
-------
Total fund operating expenses [____]%
=======

Examples

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

After 1 year $[ ]
After 3 years $[ ]
After 5 years $[ ]
After 10 years $[ ]

<PAGE>

GLOSSARY

This Prospectus uses the following terms.

Types of Securities

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

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

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

Qualifying bank deposits are certificates of deposit, bankers
acceptances and interest-bearing savings deposits of banks that
have total assets of more than $1 billion and are members of the
Federal Deposit Insurance Corporation.

Rule 144A securities are securities that may be resold under Rule
144A of the Securities Act of 1933.

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

Rating Agencies

Fitch is Fitch, the international rating agency formed through
the merger of Fitch IBCA, Inc. and Duff & Phelps Credit Rating
Co.

<PAGE>

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

S&P is Standard & Poor's Ratings Services.
Other

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

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

Commission is the Securities and Exchange Commission.

Exchange is the New York Stock Exchange.

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

<PAGE>

DESCRIPTION OF THE FUND

Please note that:

-- Additional descriptions of the Fund's strategies,
investments and risks can be found in the Fund's
Statement of Additional Information or SAI.

Investment Objective and Principal Policies and Risks
Investment Objective and Principal Policies

The Fund seeks appreciation through investments primarily in
dividend-paying common stocks of good quality. The Fund also may
invest in fixed-income securities and convertible securities.

<PAGE>

Risk Considerations

The value of an investment in the Fund changes with the values of
the Fund's investments. Many factors can affect those values.
In the following summary, we describe the principal risks that
may affect the Fund's portfolio as a whole. The Fund could be
subject to additional principal risks because the types of
investments made by the Fund can change over time. This
Prospectus has additional descriptions of investments that appear
in bold type in the discussions under Description of Additional
Investment Practices or Additional Risk Considerations. Those
sections also include more information about the Fund, its
investments, and related risks. Among the principal risks of
investing in the Fund are:

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

-- Foreign Risk This is the risk of investments in issuers
located in foreign countries. All Funds with foreign
securities are subject to this risk. Funds investing in
foreign securities may experience more rapid and extreme
changes in value than Funds with investments solely in
securities of U.S. companies. This is because the
securities markets of many foreign countries are
relatively small, with a limited number of companies
representing a small number of industries.
Additionally, foreign securities issuers are usually not

<PAGE>

subject to the same degree of regulation as U.S.
issuers. Reporting, accounting, and auditing standards
of foreign countries differ, in some cases
significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation,
currency blockage, or political changes or diplomatic
developments could adversely affect a Funds investments
in a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose
its entire investment.

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

Description Of Additional Investment Practices
This section describes the Fund's investment practices and
associated risks. Unless otherwise noted, the Funds use of any
of these practices was specified in the previous section.

<PAGE>

Loans of Portfolio Securities. The risk in lending portfolio
securities, as with other extensions of credit, consists of the
possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, Alliance will consider all relevant facts
and circumstances including the creditworthiness of the borrower.
While securities are on loan, the borrower will pay the Fund any
income from the securities. The Fund may invest any cash
collateral in portfolio securities and earn additional income or
receive an agreed-upon amount of income from a borrower who has
delivered equivalent collateral. The Fund will have the right to
retain record ownership of loaned securities or equivalent
securities in order to exercise ownership rights such as voting
rights, subscription rights and rights to dividends, interest,
or distributions. The Fund may pay reasonable finders,
administrative, and custodial fees in connection with a loan.

In purchasing an option, the Fund would be in a position to
realize a gain if, during the option period, the price of the

<PAGE>

Options purchased or written by the Fund in negotiated
transactions are illiquid and it may not be possible for the Fund
to effect a closing transaction at an advantageous time.

<PAGE>

by the Fund would exceed 50% of its total assets. The Fund
may not purchase or sell a stock index future if immediately
thereafter more than 30% of its total assets would be hedged by
stock index futures. The Fund may not purchase or sell a stock
index future if, immediately thereafter, the sum of the amount of
margin deposits on the Funds existing futures positions would
exceed 5% of the market value of the Fund's total assets.

<PAGE>

futures contract or currency upon exercise. Therefore, no
assurance can be given that the Fund will be able to utilize
these instruments effectively. In addition, the Funds ability to
engage in options and futures transactions may be limited by tax
considerations and the use of certain hedging techniques may
adversely impact the characterization of income to the Fund for
U.S. federal income tax purposes.

Additional Risk Considerations
Investment in the Fund involves the special risk considerations
described below.

<PAGE>

MANAGEMENT OF THE FUND

PURCHASE AND SALE OF SHARES

How the Fund Values Its Shares
The Fund's net asset value or NAV is calculated at 4:00 p.m.,
Eastern time, each day the Exchange is open for business. To
calculate NAV, the Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets,
is divided by the number of shares outstanding. The Fund values

<PAGE>

Your order for a purchase, sale, or exchange of shares is priced
at the next NAV calculated after your order is received in proper
form by the Fund.

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

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

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

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

-- through registered investment advisers or other
financial intermediaries who charge a management,
consulting or other fee for their services and who
purchase shares through a broker or agent approved by
AFD and clients of such registered investment advisers
or financial intermediaries whose accounts are linked to
the master account of such investment adviser or
financial intermediary on the books of such approved
broker or agent.

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

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

<PAGE>

How to Exchange Shares
You may exchange your Advisor Class shares for shares of other
Alliance Mutual Funds. Exchanges of Advisor Class shares are
made at the next determined NAV, without sales or service
charges. You may request an exchange by mail or telephone. You
must call by 4:00 p.m., Eastern time, to receive that day's NAV.
The Fund may change, suspend, or terminate the exchange service
on 60 days' written notice.

How to Sell Shares
You may "redeem" your shares (i.e., sell your shares to the Fund)
on any day the Exchange is open, either directly or through your
financial intermediary. Your sales price will be the next-
determined NAV after the Fund receives your sales request in
proper form. Normally, proceeds will be sent to you within 7
days. If you recently purchased your shares by check or
electronic funds transfer, your redemption payment may be delayed
until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up
to 15 days). If you are in doubt about what procedures or
documents are required by your fee-based program or employee
benefit plan to sell your shares, you should contact your
financial representative.

-- Selling Shares Through Your Financial Representative

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

-- Selling Shares Directly to the Fund

By Mail:

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

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

<PAGE>

If you have any questions about these procedures,
contact AFS.

By Telephone:

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

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

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

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

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

DIVIDENDS, DISTRIBUTIONS AND TAXES

<PAGE>

additional shares, the shares will have an aggregate net asset
value as of the close of business on the day following the
declaration date of the dividend or distribution equal to the
cash amount of the dividend or distribution. You may make an
election to receive dividends and distributions in cash or in
shares at the time you purchase shares. Your election can be
changed at any time prior to a record date for a dividend. There
is no sales or other charge in connection with the reinvestment
of dividends or capital gains distributions. Cash dividends may
be paid in check, or at your election, electronically via the ACH
network. There is no sales or other charge on the reinvestment
of Fund dividends and distributions.

<PAGE>

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

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

CONVERSION FEATURE

Conversion
As described above, Advisor Class shares may be held solely
through certain fee-based program accounts, employee benefit
plans and registered investment advisory or other financial
intermediary relationships, and by investment advisory clients
of, and certain persons associated with, Alliance and its
affiliates or the Fund. If a holder of Advisor Class shares (i)
ceases to participate in the fee-based program or plan, or to be
associated with an eligible investment advisor or financial
intermediary or (ii) is otherwise no longer eligible to purchase
Advisor Class shares (each a "Conversion Event"), then all
Advisor Class shares held by the shareholder will convert
automatically to Class A shares of the Fund. The Fund will
provide the shareholder with at least 30 days advance notice of
such conversion. The failure of a shareholder or a fee-based
program to satisfy the minimum investment requirements to
purchase Advisor Class shares will not constitute a Conversion
Event. The conversion would occur on the basis of the relative
NAV of the two classes and without the imposition of any sales
load, fee or other charge.

Description of Class A Shares
The Class A shares of the Fund have a distribution free of .30%
under the Funds Rule 12b-1 plan that allows the Fund to pay
distribution and service fees for the distribution and sale of
its shares. Because this fee is paid out the Fund's assets,

<PAGE>

Class A shares have a higher expense ratio and may pay lower
dividends and may have a lower NAV than Advisor Class shares.

GENERAL INFORMATION

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

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

FINANCIAL HIGHLIGHTS

<PAGE>

investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions).
Except as otherwise indicated, this information has been audited
by PricewaterhouseCoopers LLP, the independent accountants for
the Fund, whose report, along with the Fund's financial
statements, are included in the Fund's annual report, which is
available upon request.

<PAGE>

<TABLE>
INCOME FROM INVESTMENT OPERATIONS LESS DIVIDENDS AND DISTRIBUTIONS

<CAPTION>
NET GAINS
OR LOSSES ON DISTRIBUTIONS
NET ASSET NET SECURITIES DIVIDENDS IN EXCESS OF DISTRIBUTIONS
FISCAL YEAR VALUE, INVESTMENT (BOTH TOTAL FROM FROM NET NET FROM
OR BEGINNING INCOME REALIZED AND INVESTMENT INVESTMENT INVESTMENT CAPITAL
PERIOD OF PERIOD (LOSS) UNREALIZED) OPERATIONS INCOME INCOME GAINS

<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 10/31/00. $[___] $[___] $[___] $[___] $[___] $[___] $[___]
Year Ended 10/31/99. 3.44 .04(b) .63 .67 (.04) (.01) (.35)
Year Ended 10/31/98. 3.48 .04(b) .43 .47 (.05) 0.00 (.46)
Year Ended 10/31/97. 3.00 .05(b) .87 .92 (0.06) 0.00 (.38)
10/2/96+ to 10/31/96. 2.97 0.00 .03 .03 0.00 0.00 0.00
</TABLE>

<PAGE>

LESS DISTRIBUTIONS RATIOS/SUPPLEMENTAL DATA

$[____] $[___] [___]% $[____] [___]%* [___]%* [__]%
(.40) 3.71 21.03 39,739 .68 1.12 48
(.51) 3.44 14.96 22,786 .76(c) 1.14 89
(.44) 3.48 33.61 3,207 .71(c) 1.42 88
0.00 3.00 1.01 87 .37* 3.40* 88

+ Commencement of distribution.
* Annualized.
(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 the net asset value during the
period, and a redemption on the last day of the period. Initial sales
charges or contingent deferred sales charges are not reflected in the
calculation of total investment return. Total investment returns
calculated for periods of less than one year are not annualized.
(b) Based on average shares outstanding.
(c) Amounts do not reflect the impact of expense offset arrangements with
the transfer agent. Taking into account such expense offset
arrangements, the ratio of expenses to average net assets, assuming the
assumption and/or waiver/reimbursement of expenses, would have been as
follows:

1997 1998 1999 2000
.70% .75% -- --

<PAGE>

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

-- Annual/Semi-Annual Reports to Shareholders

-- Statement of Additional Information (SAI)

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

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

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

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

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

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

On the Internet: www.sec.gov

You also may find more information about Alliance and the Fund on
the Internet at: www.Alliancecapital.com.
SEC File Number: 811-00126

<PAGE>

(LOGO) ALLIANCE GROWTH AND INCOME FUND, INC.
________________________________________________________________

c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION
February 1, 2001

________________________________________________________________

This Statement of Additional Information is not a prospectus
but supplements and should be read in conjunction with the
current Prospectus, dated February 1, 2001, for Alliance Growth
and Income Fund, Inc. (the "Fund") that offers Class A, Class B
and Class C shares of the Fund and the current Prospectus, dated
February 1, 2001, for the Fund that offers the Advisor Class
shares of the Fund (the "Advisor Class Prospectus" and, together
with the Prospectus for the Fund that offers the Class A, Class B
and Class C shares, the "Prospectus"). Copies of such
Prospectuses may be obtained by contacting Alliance Fund
Services, Inc. at the address or the "For Literature" telephone
number shown above.

TABLE OF CONTENTS

PAGE

DESCRIPTION OF THE FUND...................................
MANAGEMENT OF THE FUND....................................
EXPENSES OF THE FUND......................................
PURCHASE OF SHARES........................................
REDEMPTION AND REPURCHASE OF SHARES.......................
SHAREHOLDER SERVICES......................................
NET ASSET VALUE...........................................
DIVIDENDS, DISTRIBUTIONS AND TAXES........................
PORTFOLIO TRANSACTIONS....................................
GENERAL INFORMATION.......................................
REPORT OF INDEPENDENT ACCOUNTANTS AND
FINANCIAL STATEMENTS....................................
APPENDIX A: CERTAIN EMPLOYEE BENEFIT PLANS................ A-1

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

<PAGE>

________________________________________________________________

DESCRIPTION OF THE FUND
________________________________________________________________

Alliance Growth and Income Fund, Inc. (the "Fund) is a
diversified, open-end investment company. Except as otherwise
indicated, the investment policies of the Fund are not
"fundamental policies" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), and may,
therefore, be changed by the Board of Directors without a
shareholder vote. However, the Fund will not change its
investment policies without contemporaneous written notice to its
shareholders. There can be, of course, no assurance that the Fund
will achieve its investment objective.

Investment Objectives

It is the policy of the Fund to seek to balance the
objectives of reasonable current income and reasonable
opportunity for appreciation through investments primarily in
dividend-paying common stocks of good quality. Its portfolio is
presently so constituted, although it may invest whenever the
economic outlook is unfavorable for common stock investments in
other types of securities, such as bonds, convertible bonds,
preferred stocks, convertible preferred stocks, etc. The Fund
cannot deviate from this objective and policy without shareholder
approval.

How the Fund Pursues its Objective

Purchases and sales of portfolio securities are made at
such times and in such amounts as deemed advisable in light of
market, economic and other conditions, irrespective of the volume
of portfolio turnover. The Fund engages primarily in holding
securities for investment and not for trading purposes.

Investment in Covered Call Options. Subject to market
conditions, the Fund may try to realize income by writing covered
call option contracts provided that the option is listed on a
domestic securities exchange and that no option will be written
if, as a result, more than 25% of the Fund's assets are subject
to call options. A covered call option is an option on a
security which the Fund owns or can acquire by converting a
convertible security it owns. The purchaser of the option
acquires the right to buy the security from the Fund at a fixed
exercise price at any time prior to the expiration of the option,
regardless of the market price of the security at that time. A
security on which an option has been written will be held in
escrow by the Fund's custodian until the option expires, is
exercised, or a closing purchase transaction is made.

<PAGE>

The Fund thus forgoes the opportunity to profit from an
increase in the market price in the underlying security above the
exercise price, in return for the premium it receives from the
purchaser of the option. The Fund's management believes that
such premiums will increase the Fund's income without subjecting
it to substantial risks.

The Fund will purchase call options only to close out a
position in an option written by it. In order to close out a
position, the Fund will make a "closing purchase transaction" if
such is available. In such a transaction, the Fund will purchase
a call option on the same security with the same exercise price
and expiration date as the call option which it has previously
written. When a security is sold from the Fund's portfolio
against which a call option has been written, the Fund will
effect a closing purchase transaction so as to close out any
existing call option on that security. The Fund will realize a
profit or loss from a closing purchase transaction if the amount
paid to purchase a call option is less or more than the amount
received as a premium from the writing thereof. A closing
purchase transaction cannot be made if trading in the option has
been suspended.

The premium received by the Fund upon writing a call
option will increase the Fund's assets, and a corresponding
liability will be recorded and subsequently adjusted from day to
day to the current value of the option written. For example, if
the current value of the option exceeds the premium received, the
excess would be an unrealized loss and, conversely, if the
premium exceeds the current value, such excess would be an
unrealized gain. The current value of the option will be the
last sales price on the principal exchange on which the option is
traded or, in the absence of any transactions, the mean between
the closing bid and asked price.

Except as stated above, the Fund may not purchase or
sell puts or calls or combinations thereof.

Foreign Securities. The Fund may invest in foreign
securities but, although not a fundamental policy, will not make
any such investments unless such securities are listed on a
national securities exchange. The purchase of foreign securities
entails certain political and economic risks, and accordingly,
the Fund has restricted its investments in securities in this
category to issues of high quality. Payment of interest and
principal upon these obligations may also be affected by
governmental action in the country of domicile (generally
referred to as "sovereign risk"). Examples of governmental
actions would be the imposition of currency controls, interest
limitations, seizure of assets, or the declaration of a
moratorium. In addition, evidences of ownership of portfolio

<PAGE>

securities may be held outside of the U.S., and the Fund may be
subject to the risks associated with the holding of such property
overseas.

There can be no assurance that the Fund will achieve its
investment objectives since market risks are inherent in all
securities to varying degrees, although Alliance Capital
Management L.P., the Fund's Adviser (the "Adviser" or
"Alliance"), will try to limit these risks.

Lending of Portfolio Securities. The Fund may seek to
increase income by lending portfolio securities. Under present
regulatory policies, such loans are required to be secured
continuously by collateral consisting of liquid assets maintained
in an amount at least equal to the market value of the securities
loaned. The Fund has the right to call such a loan and obtain
the securities loaned or equivalent securities at any time on
five days' notice. During the existence of a loan, the Fund will
receive the income earned on investment of the collateral. The
aggregate value of the securities loaned by the Fund may not
exceed 33 1/3% of the value of the Fund's total assets (including
collateral for any stock loaned).

Portfolio Turnover. The Adviser anticipates that the
Fund's annual rate of portfolio turnover will not be in excess of
100% in future years. A 100% turnover rate would occur, for
example, if all the securities in the Fund's portfolio were
replaced once in a period of one year. A portfolio turnover rate
approximating 100% involves correspondingly greater brokerage
commission expenses than would a lower rate, which must be borne
by the Fund and its shareholders.

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

Securities rated Aaa by Moody's and AAA by S&P and Fitch
are considered to be of the highest quality; capacity to pay
interest and repay principal is extremely strong. Securities
rated Aa by Moody's and AA by S&P and Fitch are considered to be
high quality; capacity to repay principal is considered very
strong, although elements may exist that make risks appear
somewhat larger than exist with securities rated Aaa or AAA.
Securities rated A are considered by Moody's to possess adequate
factors giving security to principal and interest. S&P and Fitch

<PAGE>

consider such securities to have a strong capacity to pay
interest and repay principal. Such securities are more
susceptible to adverse changes in economic conditions and
circumstances than higher-rated securities.

Securities rated Baa by Moody's and BBB by S&P and Fitch
are considered to have an adequate capacity to pay interest and
repay principal. Such securities are considered to have
speculative characteristics and share some of the same
characteristics as lower-rated securities. Sustained periods of
deteriorating economic conditions or of rising interest rates are
more likely to lead to a weakening in the issuer's capacity to
pay interest and repay principal than in the case of higher-rated
securities. Securities rated Ba by Moody's and BB by S&P and
Fitch are considered to have speculative characteristics with
respect to capacity to pay interest and repay principal over
time; their future cannot be considered as well-assured.
Securities rated B by Moody's, S&P and Fitch are considered to
have highly speculative characteristics with respect to capacity
to pay interest and repay principal. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

Securities rated Caa by Moody's and CCC by S&P and Fitch
are of poor standing and there is a present danger with respect
to payment of principal or interest. Securities rated Ca by
Moody's and CC by S&P and Fitch are minimally protected, and
default in payment of principal or interest is probable.
Securities rated C by Moody's, S&P and Fitch are in imminent
default in payment of principal or interest and have extremely
poor prospects of ever attaining any real investment standing.
The issuer of securities rated DDD, DD and D by S&P and Fitch are
in default. The issuer of securities rated DD or D by Fitch is
generally undergoing a formal liquidation process.

Certain Fundamental Investment Policies

The following investment policies of the Fund may not be
changed without affirmative shareholder action:

The Fund may not:

(1) with respect to 75% of its total assets,
purchase the securities of any issuer (other than the United
States Government) if upon such purchase more than 5% of the
Fund's total assets would consist of the securities of such
issuer or the Fund would own more than 10% of the outstanding
voting securities of such issuer;

(2) purchase the securities of any other investment
company except in a regular transaction in the open market;

<PAGE>

(3) purchase the securities of any issuer the
business of which has been in continuous operation for less than
three years;

(4) retain investments in the securities of any
issuer if directors or officers of the Fund or certain other
"interested persons" own more than 5% of such securities;

(5) issue any securities senior to the capital
stock offered hereby; or

(6) purchase any securities on margin, borrow money
or sell securities short, except that the Fund may borrow in an
amount up to 10% of its total assets to meet redemption requests
and for the clearance of purchases and sales of portfolio
securities (this borrowing provision is not for investment
leverage but solely to facilitate management of the portfolio to
enable the Fund to meet redemption requests where the liquidation
of portfolio securities is deemed to be disadvantageous or
inconvenient and to obtain such short-term credits as may be
necessary for the clearance of purchases and sales of portfolio
securities; all borrowings at any time outstanding will be repaid
before any additional investments are made; the Fund will not
mortgage, pledge or hypothecate any assets in connection with any
such borrowing in excess of 15% of the Fund's total assets). The
Fund does not invest in other companies for the purpose of
exercising control of management.

The Fund may not make loans to other persons, except
that the Fund may lend its portfolio securities in accordance
with applicable law. The acquisition of investment securities or
other investment instruments shall not be deemed to be the making
of a loan.

It is the Fund's policy not to concentrate its
investments in any one industry by investment of more than 25% of
the value of its total assets in such industry, underwrite
securities issued by other persons, purchase any securities as to
which it might be deemed a statutory underwriter under the
Securities Act of 1933, as amended (the "Securities Act"),
purchase or sell commodities or commodity contracts (except
financial forward and futures contracts and options on such
contracts) or engage in the business of purchasing and selling
real estate.

In addition, the Fund has undertaken with the securities
administrators of certain states where the Fund's shares are sold
not to invest any part of its total assets in interests in oil,
gas, or other mineral exploration or development programs, that
it will not maintain more than 15% of its average net assets in
illiquid securities (excluding Rule 144A securities), that it

<PAGE>

will not purchase or sell real property (including limited
partnership interests, but excluding readily marketable interests
in real estate investment trusts or readily marketable securities
of companies which invest in real estate), that it will not
invest in warrants (other than warrants acquired by the Fund as a
part of a unit or attached to securities at the time of
purchase), if as a result such warrants valued at the lower of
cost or market, would exceed 5% of the value of the Fund's assets
at the time of purchase provided that not more than 2% of the
Fund's net assets at the time of purchase may be invested in
warrants not listed on the New York Stock Exchange (the
"Exchange") or the American Stock Exchange and that it will
invest only in investment grade fixed income securities.

________________________________________________________________

MANAGEMENT OF THE FUND
________________________________________________________________

Adviser

Alliance Capital Management L.P. (the "Adviser" or
"Alliance"), a Delaware limited partnership with principal
offices at 1345 Avenue of the Americas, New York, New York 10105,
has been retained under an investment advisory agreement (the
"Advisory Agreement") to provide investment advice and, in
general, to conduct the management and investment program of the
Fund under the supervision of the Fund's Board of Directors (see
"Management of the Fund" in the Prospectus).

The Adviser is a leading international adviser managing
client accounts with assets as of [_____] [__], 2001 totaling
more than $[___] billion (of which more than $[___] billion
represented assets of investment companies). As of[_____] [__],
2001, the Adviser managed retirement assets for many of the
largest public and private employee benefit plans (including [__]
of the nation's FORTUNE 100 companies), for public employee
retirement funds in [__] states, for investment companies, and
for foundations, endowments, banks and insurance companies
worldwide. The [__] registered investment companies managed by
the Adviser, comprising [___] separate investment portfolios,
currently have approximately [___] million shareholder accounts.

Alliance Capital Management Corporation ("ACMC") is the
general partner of Alliance and an indirect wholly-owned
subsidiary of AXA Financial, Inc. ("AXA Financial"), a Delaware
corporation whose shares are traded on the New York Stock
Exchange ("NYSE"). As of October 2, 2000, AXA Financial and
certain of its subsidiaries were the beneficial owners of
approximately 52% of the outstanding Alliance units. Alliance
Capital Management Holding L.P. ("Alliance Holding") owned

<PAGE>

approximately 30% of the outstanding Alliance units.1 Equity
interests in Alliance Holding are traded on the NYSE in the form
of units. Approximately 98% of such units are owned by the
public and management or employees of Alliance and approximately
2% are owned by AXA Financial. As of June 30, 2000, AXA, a
French insurance holding company, owned approximately 60% of the
issued and outstanding shares of common stock of AXA Financial.

Under the Advisory Agreement, the Adviser furnishes
advice and recommendations with respect to the Fund's portfolio
of securities and investments and provides persons satisfactory
to the Board of Directors to act as officers and employees of the
Fund. Such officers and employees, as well as certain Directors
of the Fund may be employees of the Adviser or its affiliates.

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

The Fund has, under the Advisory Agreement, assumed the
obligation for payment of all of its other expenses. As to the
obtaining of services other than those specifically provided to
the Fund by the Adviser, the Fund may employ its own personnel.
For such services, it also may utilize personnel employed by the
Adviser or other subsidiaries of Equitable and, in such event,
the services will be provided to the Fund at cost and the
payments therefore must be specifically approved by the Fund's
Directors. The Fund paid to the Adviser a total of $130,000 in
respect of such services during the fiscal year of the Fund ended
in 1999.

____________________

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

<PAGE>

Currently, for the services rendered by the Adviser
under the Advisory Agreement, the Fund pays the Adviser at the
annual rate of .625 of 1% of the first $5 billion, .60 of 1% of
the excess over $5 billion up to $7.5 billion, .575 of 1% of the
excess over $7.5 billion up to $10 billion and .55 of 1% of the
excess over $10 billion of the average daily value of the Fund's
net assets. The fee is accrued daily and paid monthly. Prior to
____________, 2000, for the services rendered by the Adviser
under the Advisory Agreement, the Fund paid the Adviser at the
annual rate of .625 of 1% of the first $200 million, .50% of the
excess over $200 million up to $400 million and .45 of 1% of the
excess over $400 million of the average daily value of the Fund's
net assets. For the fiscal years of the Fund ended in 2000, 1999
and 1998, the Adviser received from the Fund advisory fees of
$[_________], $13,402,371 and $8,033,332, respectively.

The Advisory Agreement became effective on July 22,
1992. The Advisory Agreement was approved by the unanimous vote,
cast in person, of the Fund's Directors (including the Directors
who are not parties to the Advisory Agreement or interested
persons, as defined in the 1940 Act, of any such party) at a
meeting called for the purpose and held on October 14, 1991. At
a meeting held on June 11, 1992, a majority of the outstanding
voting securities of the Fund approved the Advisory Agreement.
At a meeting of the Board of Directors held on July 19-20, 2000,
an amendment to the Advisory Agreement to increase the advisory
fee payable by the Fund to the Adviser and revise the advisory
fee breakpoint schedule (the "Amendment") was considered and
approved by the unanimous vote, cast in person, of the Fund's
Directors (including the Directors who are not parties to the
Advisory Agreement or interested persons, as defined by the 1940
Act, of any such party). On November 2, 2000, the Directors
recommended the Amendment to the Fund's stockholders, who, by a
majority of the outstanding voting securities of the Fund,
approved the Amendment.

The Advisory Agreement will remain in effect for
successive twelve-month periods (computed from each November 1)
provided that such continuance is specifically approved at least
annually by the Fund's Directors or by majority vote of the
holders of the outstanding voting securities of the Fund and in
either case by a majority of the Directors who are not parties to
the Advisory Agreement, or interested persons, as defined in the
1940 Act, of any such party, at a meeting in person called for
the purpose of voting on such matter. The Advisory Agreement was
approved for another annual term by the Directors of the Fund
including a majority of the Directors who are not "interested
persons" as defined in the 1940 Act, at their Regular Meeting
held on July 19-20, 2000.

<PAGE>

The Advisory Agreement may be terminated without penalty
on 60 days' written notice by a vote of a majority of the Fund's
outstanding voting securities or by a vote of a majority of the
Fund's Directors, or by the Adviser on 60 days' written notice,
and will automatically terminate in the event of its assignment.
The Advisory Agreement provides that the Adviser shall not be
liable under the Advisory Agreement for any mistake of judgment
or in any event whatsoever, except for lack of good faith,
provided that the Adviser shall be liable to the Fund and
security holders by reason of willful misfeasance, bad faith or
gross negligence, or of reckless disregard of its obligations and
duties under the Advisory Agreement.

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

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

<PAGE>

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

Directors and Officers

The business and affairs of the Fund are managed under
the direction of the Board of Directors. The Directors and
principal officers of the Fund, their ages and their principal
occupations during the past five years are set forth below. Each
such Director and officer is also a trustee, director or officer
of other registered investment companies sponsored by the
Adviser. Unless otherwise specified, the address of each of the
following persons is 1345 Avenue of the Americas, New York, New
York 10105.

Directors

JOHN D. CARIFA,2 55, Chairman of the Board, is the
President, Chief Operating Officer and a Director of ACMC, with
which he has been associated since prior to 1995.

RUTH BLOCK, 69, was formerly an Executive Vice President
and the Chief Insurance Officer of The Equitable; Chairman and
Chief Executive Officer of Evlico; a Director of Avon, Tandem
Financial Group and Donaldson, Lufkin & Jenrette Securities
Corporation. She is currently a Director of Ecolab Incorporated
(specialty chemicals) and BP Amoco Corporation (oil and gas).
Her address is P.O. Box 4623, Stamford, Connecticut 06903.

DAVID H. DIEVLER, 71, is an independent consultant.
Until December 1994 he was Senior Vice President of ACMC
responsible for mutual fund administration. Prior to joining
ACMC in 1984 he was Chief Financial Officer of Eberstadt Asset
Management since 1968. Prior to that he was a Senior Manager at
Price Waterhouse & Co. Member of American Institute of Certified

____________________

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

<PAGE>

Public Accountants since 1953. His address is P.O. Box 167,
Spring Lake, New Jersey 07762.

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

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

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

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

DONALD J. ROBINSON, 66, is Senior Counsel to the law
firm of Orrick, Herrington & Sutcliffe LLP since January 1995.
He was formerly a senior partner and a member of the Executive
Committee of that firm. He was also a member of the Municipal
Securities Rulemaking Board and Trustee of the Museum of the City
of New York. His address is 98 Hell's Peak Road, Weston, Vermont
05161.

Officers

JOHN D. CARIFA, Chairman and President, see biography
above.

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

<PAGE>

PAUL C. RISSMAN, Senior Vice President, 43, is an
Executive Vice President of ACMC, with which he has been
associated since prior to 1995.

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

FRANK V. CARUSO, Vice President, 43, is a Senior Vice
President of Shields/ACMC, with which he has been associated
since prior to 1995.

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

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

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

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

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

The aggregate compensation paid by the Fund to each of
the Directors during its fiscal year ended October 31, 2000, the
aggregate compensation paid to each of the Directors during
calendar year 2000 by all of the registered investment companies
to which the Adviser provides investment advisory services
(collectively, the "Alliance Fund Complex") and the total number
of registered investment companies (and separate investment
portfolios within those companies) in the Alliance Fund Complex
with respect to which each of the Directors serves as a director
or trustee, are set forth below. Neither the Fund nor any other
registered investment company in the Alliance Fund Complex
provides compensation in the form of pension or retirement
benefits to any of its directors or trustees. Each of the
Directors is a director or trustee of one or more other
registered investment companies in the Alliance Fund Complex.

<PAGE>

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

JOHN D. CARIFA $-0- $ -0- [49] [107]
RUTH BLOCK $[___] $[___] [38] [ 83]
DAVID H. DIEVLER $[___] $[___] [44] [ 90]
JOHN H. DOBKIN $[___] $[___] [41] [ 87]
WILLIAM H. FOULK, JR. $[___] $[___] [45] [102]
DR. JAMES M. HESTER $[___] $[___] [39] [ 84]
CLIFFORD L. MICHEL $[___] $[___] [39] [ 86]
DONALD J. ROBINSON $[___] $[___] [41] [ 96]

As of [____________], 2001, the Directors and officers of the
Fund as a group owned less than 1% of the shares of any other
class of shares of the Fund.

________________________________________________________________

EXPENSES OF THE FUND
________________________________________________________________

Distribution Services Agreement

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

During the Fund's fiscal year ended October 31, 2000,
the Fund paid distribution services fees for expenditures under
the Agreement, with respect to Class A shares, in amounts
aggregating $[________] which constituted .25%, annualized, of
the Fund's aggregate average daily net assets attributable to

<PAGE>

Class A shares during the period, and the Adviser made payments
from its own resources as described above aggregating
$[________]. Of the $[________] paid by the Fund and the
Adviser under the Rule 12b-1 Plan with respect to the Class A
shares, $[________] was spent on advertising, $[________] on the
printing and mailing of prospectuses for persons other than
current shareholders, $[________] for compensation to broker-
dealers and other financial intermediaries (including,
$[________] to the Fund's Principal Underwriter), $[________] for
compensation to sales personnel, $[________] was spent on
printing of sales literature, travel, entertainment, due
diligence and other promotional expenses.

During the Fund's fiscal year ended October 31, 2000,
the Fund paid distribution services fees for expenditures under
the Agreement, with respect to Class B shares, in amounts
aggregating $[________], which constituted 1.00%, annualized, of
the Fund's aggregate average daily net assets attributable to
Class B shares during the period, and the Adviser made payments
from its own resources as described above aggregating
$[________]. Of the $[________] paid by the Fund and the Adviser
under the Rule 12b-1 Plan with respect to the Class B shares,
$[________] was spent on advertising, $[________] on the printing
and mailing of prospectuses for persons other than current
shareholders, $[________] for compensation to broker-dealers and
other financial intermediaries (including, $[________] to the
Fund's Principal Underwriter), $[________] for compensation to
sales personnel, $[________] was spent on printing of sales
literature, travel, entertainment, due diligence and other
promotional expenses, and $[________] was spent on interest on
Class B shares financing.

During the Fund's fiscal year ended October 31, 2000,
the Fund paid distribution services fees for expenditures under
the Agreement, with respect to Class C shares, in amounts
aggregating $[________], which constituted 1.00%, annualized, of
the Fund's aggregate average daily net assets attributable to
Class C shares during the period, and the Adviser made payments
from its own resources as described above aggregating
$[________]. Of the $[________] paid by the Fund and the Adviser
under the Rule 12b-1 Plan with respect to the Class C shares,
$[________] was spent on advertising, $[________] on the printing
and mailing of prospectuses for persons other than current
shareholders, $[________] for compensation to broker-dealers and
other financial intermediaries (including, $[________] to the
Fund's Principal Underwriter), $[________] for compensation to
sales personnel, $[________] was spent on printing of sales
literature, travel, entertainment, due diligence and other
promotional expenses, and $[________] was spent on interest on
Class C shares financing.

<PAGE>

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

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

Unreimbursed distribution expenses incurred as of the
end of the Fund's most recently completed fiscal year, and
carried over for reimbursement in future years in respect of the
Class B and Class C shares for the Fund were, respectively,
$[________] (3.00% of the net assets of Class B) and $[________]
(.86% of the net assets of Class C).

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

<PAGE>

In approving the Rule 12b-1 Plan, the Directors of the
Fund determined that there was a reasonable likelihood that the
Rule 12b-1 Plan would benefit the Fund and its shareholders. The
distribution services fee of a particular class will not be used
to subsidize the provision of distribution services with respect
to any other class.

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

The Agreement will continue in effect for successive
twelve-month periods (computed from each November 1), provided,
however, that such continuance is specifically approved at least
annually by the Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities (as defined in
the 1940 Act) of that class, and, in either case, by a majority
of the Directors of the Fund who are not parties to the Agreement
or interested persons, as defined in the 1940 Act, of any such
party (other than as directors of the Fund) and who have no
direct or indirect financial interest in the operation of the
Rule 12b-1 Plan or any agreement related thereto. The Agreement
was approved for another annual term by a vote, cast in person,
of the Directors, including a majority of the Directors who are
not "interested persons," as defined in the 1940 Act, at their
meeting held on July 19-20, 2000.

In the event that the Rule 12b-1 Plan is terminated or
not continued with respect to the Class A shares, Class B shares
or Class C shares, (i) no distribution services fees (other than
current amounts accrued but not yet paid) would be owed by the
Fund to the Principal Underwriter with respect to that class, and
(ii) the Fund would not be obligated to pay the Principal
Underwriter for any amounts expended under the Agreement not
previously recovered by the Principal Underwriter from
distribution services fees in respect of shares of such class or
through deferred sales charges.

Transfer Agency Agreement

AFS, an indirect wholly-owned subsidiary of the Adviser
located at 500 Plaza Drive, Secaucus, New Jersey 07094, receives
a transfer agency fee per account holder of each of the Class A
shares, Class B shares, Class C shares and Advisor Class shares
of the Fund, plus reimbursement for out-of-pocket expenses. The
transfer agency fee with respect to the Class B and Class C
shares is higher than the transfer agency fee with respect to the
Class A and Advisor Class shares, reflecting the additional costs

<PAGE>

associated with the Class B and Class C contingent deferred sales
charges. For the fiscal year ended October 31, 2000, the Fund
paid AFS $[________] pursuant to the Transfer Agency
Agreement.

Code of Ethics

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

________________________________________________________________

PURCHASE OF SHARES
________________________________________________________________

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

General

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

Advisor Class shares of the Fund may be purchased and
held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers
or other financial intermediaries and approved by the Principal
Underwriter, (ii) through self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least
1,000 participants or $25 million in assets, (iii) by "qualified
state tuition programs" (within the meaning of Section 529 of the
Code) approved by AFD, (iv) by the categories of investors

<PAGE>

described in clauses (i) through (iv) below under "--Sales at Net
Asset Value" (other than officers, directors and present and
full-time employees of selected dealers or agents, or relatives
of such person, or any trust, individual retirement account or
retirement plan account for the benefit of such relative, none of
whom is eligible on the basis solely of such status to purchase
and hold Advisor Class shares), or (v) by directors and present
or retired full-time employees of CB Richard Ellis, Inc.
Generally, a fee-based program must charge an asset-based or
other similar fee and must invest at least $250,000 in Advisor
Class shares of the Fund in order to be approved by the Principal
Underwriter for investment in Advisor Class shares.

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

The Fund may refuse any order for the purchase of
shares. The Fund reserves the right to suspend the sale of its
shares to the public in response to conditions in the securities
markets or for other reasons.

The public offering price of shares of the Fund is their
net asset value, plus, in the case of Class A shares, a sales
charge which will vary depending on the purchase alternative
chosen by the investor, as shown in the table below under
"Class A Shares." On each Fund business day on which a purchase
or redemption order is received by the Fund and trading in the
types of securities in which the Fund invests might materially
affect the value of Fund shares, the per share net asset value is
computed in accordance with the Fund's Articles of Incorporation
and By-Laws as of the next close of regular trading on the
Exchange (currently 4:00 p.m. Eastern time) by dividing the value
of the Fund's total assets, less its liabilities, by the total
number of its shares then outstanding. A Fund business day is
any day on which the Exchange is open for trading.

<PAGE>

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

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

Following the initial purchase of Fund shares, a
shareholder may place orders to purchase additional shares by
telephone if the shareholder has completed the appropriate
portion of the Subscription Application or an "Autobuy"
application obtained by calling the "For Literature" telephone
number shown on the cover of this Statement of Additional

<PAGE>

Information. Except with respect to certain omnibus accounts,
telephone purchase orders may not exceed $500,000. Payment for
shares purchased by telephone can be made only by electronic
funds transfer from a bank account maintained by the shareholder
at a bank that is a member of the National Automated Clearing
House Association ("NACHA"). If a shareholder's telephone
purchase request is received before 3:00 p.m. Eastern time on a
Fund business day, the order to purchase shares is automatically
placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of
the close of business on such following business day.

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

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

Class A, Class B, Class C and Advisor Class shares each
represent an interest in the same portfolio of investments of the
Fund, have the same rights and are identical in all respects,
except that (i) Class A shares bear the expense of the initial
sales charge (or contingent deferred sales charge, when
applicable) and Class B and Class C shares bear the expense of
the contingent deferred sales charge, (ii) Class B shares and
Class C shares each bear the expense of a higher distribution
services fee than that borne by Class A shares, and Advisor Class
shares do not bear such a fee, (iii) Class B shares and Class C
shares bear higher transfer agency costs than those borne by
Class A shares and Advisor Class shares, (iv) each of Class A,

<PAGE>

Class B and Class C has exclusive voting rights with respect to
provisions of the Rule 12b-1 Plan pursuant to which its
distribution services fee is paid and other matters for which
separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would
materially increase the amount to be paid thereunder with respect
to the Class A shares, then such amendment will also be submitted
to the Class B shareholders and Advisor Class shareholders and
the Class A, Class B and Advisor Class shareholders will vote
separately by class, and (v) Class B shares and Advisor Class
shares are subject to a conversion feature. Each class has
different exchange privileges and certain different shareholder
service options available.

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

Alternative Retail Purchase Arrangements -- Class A, Class B and
Class C Shares3

The alternative purchase arrangements available with
respect to Class A, Class B and Class C shares permit an investor
to choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the investor
expects to hold the shares, and other circumstances. Investors
should consider whether, during the anticipated life of their
investment in the Fund, the accumulated distribution services fee
and contingent deferred sales charge on Class B shares prior to
conversion, or the accumulated distribution services fee and
contingent deferred sales charge on Class C shares, would be less
than the initial sales charge and accumulated distribution
services fee on Class A shares purchased at the same time, and to
what extent such differential would be offset by the higher
return of Class A shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for
reduced initial sales charges on Class A shares, as described
below. In this regard, the Principal Underwriter will reject any
order (except orders from certain retirement plans and certain
employee benefit plans) for more than $250,000 for Class B
shares. (See Appendix A for information concerning the
eligibility of certain employee benefit plans to purchase Class B
shares at net asset value without being subject to a contingent
____________________

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

<PAGE>

deferred sales charge and the ineligibility of certain such plans
to purchase Class A shares.) Class C shares will normally not be
suitable for the investor who qualifies to purchase Class A
shares at net asset value. For this reason, the Principal
Underwriter will reject any order for more than $1,000,000 for
Class C shares.

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

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

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

During the Fund's fiscal years ended in 2000, 1999 and
1998, the aggregate amounts of underwriting commission payable
with respect to shares of the Fund were $[________], $12,819,129
and $5,137,865, respectively. Of that amount, the Principal

<PAGE>

Underwriter received the amounts of, respectively, $[________],
$887,635 and $220,637, representing that portion of the sales
charges paid on shares of the Fund sold during the year which was
not reallowed to selected dealers (and was, accordingly, retained
by the Principal Underwriter). During the Fund's fiscal years
ended in 2000, 1999 and 1998, the Principal Underwriter received
contingent deferred sales charges of $[________], $44,509 and
$35,339, respectively, on Class A shares, $[________], $2,030,158
and $790,434, respectively, on Class B shares, and $[________],
$93,970 and $48,382, respectively, on Class C shares.

Class A Shares

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

Sales Charge

Discount Or
Commission
As % of To Dealers
As % of the Public Or Agents
Amount of Net Amount Offering As % of
Purchase Invested Price Offering
Price
_________ __________ __________ ____________

Less than $100,000 4.44% 4.25% 4.00%
$100,000 but less than
$250,000 3.36 3.25 3.00
$250,000 but less than
$500,000 2.30 2.25 2.00
$500,000 but less than
$1,000,000* 1.78 1.75 1.50

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

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

<PAGE>

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

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

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

<PAGE>

charge. The circumstances under which such investors may pay a
reduced initial sales charge are described below.

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

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
-Corporate Bond Portfolio
-Quality Bond Portfolio
-U.S. Government Portfolio
Alliance Disciplined Value Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Health Care Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.

<PAGE>

Alliance Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
Alliance Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio
-Virginia Portfolio
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
-Biotechnology Portfolio
-Premier Portfolio
-Technology Portfolio
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios
-Alliance Growth Fund
-Alliance Conservative Investors Fund
-Alliance Growth Investors Fund

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

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

(i) the investor's current purchase;

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

<PAGE>

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

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

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

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

Investors qualifying for the Combined Purchase Privilege
described above may purchase shares of the Alliance Mutual Funds
under a single Statement of Intention. For example, if at the
time an investor signs a Statement of Intention to invest at
least $100,000 in Class A shares of the Fund, the investor and
the investor's spouse each purchase shares of the Fund worth
$20,000 (for a total of $40,000), it will only be necessary to
invest a total of $60,000 during the following 13 months in
shares of the Fund or any other Alliance Mutual Fund, to qualify
for the 3.25% sales charge on the total amount being invested
(the sales charge applicable to an investment of $100,000).

The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated. The

<PAGE>

minimum initial investment under a Statement of Intention is 5%
of such amount. Shares purchased with the first 5% of such
amount will be held in escrow (while remaining registered in the
name of the investor) to secure payment of the higher sales
charge applicable to the shares actually purchased if the full
amount indicated is not purchased, and such escrowed shares will
be involuntarily redeemed to pay the additional sales charge, if
necessary. Dividends on escrowed shares, whether paid in cash or
reinvested in additional Fund shares, are not subject to escrow.
When the full amount indicated has been purchased, the escrow
will be released. To the extent that an investor purchases more
than the dollar amount indicated on the Statement of Intention
and qualifies for a further reduced sales charge, the sales
charge will be adjusted for the entire amount purchased at the
end of the 13-month period. The difference in the sales charge
will be used to purchase additional shares of the Fund subject to
the rate of the sales charge applicable to the actual amount of
the aggregate purchases.

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

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

Reinstatement Privilege. A shareholder who has caused
any or all of his or her Class A or Class B shares of the Fund to
be redeemed or repurchased may reinvest all or any portion of the
redemption or repurchase proceeds in Class A shares of the Fund
at net asset value without any sales charge, provided that
(i) such reinvestment is made within 120 calendar days after the

<PAGE>

redemption or repurchase date, and (ii) for Class B shares, a
contingent deferred sales charge has been paid and the Principal
Underwriter has approved, at its discretion, the reinvestment of
such shares. Shares are sold to a reinvesting shareholder at the
net asset value next determined as described above. A
reinstatement pursuant to this privilege will not cancel the
redemption or repurchase transaction; therefore, any gain or loss
so realized will be recognized for federal income tax purposes
except that no loss will be recognized to the extent that the
proceeds are reinvested in shares of the Fund within 30 calendar
days after the redemption or repurchase transactions. Investors
may exercise the reinstatement privilege by written request sent
to the Fund at the address shown on the cover of this Statement
of Additional Information.

Sales at Net Asset Value. The Fund may sell its Class A
shares at net asset value, (i.e., without an initial sales
charge) and without a contingent deferred sales charge to certain
categories of investors including: (i) investment management
clients of the Adviser or its affiliates; (ii) officers and
present or former Directors of the Fund; present or former
directors and trustees of other investment companies managed by
the Adviser; present or retired full-time employees of the
Adviser, the Principal Underwriter, Alliance Fund Services, Inc.
and their affiliates; officers and directors of ACMC, the
Principal Underwriter, Alliance Fund Services, Inc. and their
affiliates; officers, directors and present full-time employees
of selected dealers or agents; or the spouse, sibling, direct
ancestor or direct descendant (collectively "relatives") of any
such person; or any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative; or the estate of any such person or relative, if such
shares are purchased for investment purposes (such shares may not
be resold except to the Fund); (iii) the Adviser, the Principal
Underwriter, Alliance Fund Services, Inc. and their affiliates;
and certain employee benefit plans for employees of the Adviser,
the Principal Underwriter, Alliance Fund Services, Inc. and their
affiliates; (iv) registered investment advisers or other
financial intermediaries who charge a management, consulting or
other fee for their services and who purchase shares through a
broker or agent approved by the Principal Underwriter and clients
of such registered investment advisers or financial
intermediaries whose accounts are linked to the master account of
such investment adviser or financial intermediary on the books of
such approved broker or agent; (v) persons participating in a
fee-based program, sponsored and maintained by a registered
broker-dealer or other financial intermediary and approved by the
Principal Underwriter, pursuant to which such persons pay an
asset-based fee to such broker-dealer or financial intermediary,
or its affiliates or agents, for services in the nature of
investment advisory or administrative services; and

<PAGE>

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

Class B Shares

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

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

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

To illustrate, assume that on or after November 19, 1993
an investor purchased 100 Class B shares at $10 per share (at a
cost of $1,000) and in the second year after purchase, the net
asset value per share is $12 and, during such time, the investor
has acquired 10 additional Class B shares upon dividend
reinvestment. If at such time the investor makes his or her first
redemption of 50 Class B shares (proceeds of $600), 10 Class B
shares will not be subject to the charge because of dividend

<PAGE>

reinvestment. With respect to the remaining 40 Class B shares,
the charge is applied only to the original cost of $10 per share
and not to the increase in net asset value of $2 per share.
Therefore, $400 of the $600 redemption proceeds will be charged
at a rate of 3.0% (the applicable rate in the second year after
purchase, as set forth below).

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

Contingent Deferred Sales Charge as a %
of Dollar Amount Subject to Charge

Shares Purchased Shares Purchased
Years before on or after
Since Purchase November 19, 1993 November 19, 1993

First 5.5% 4.0%
Second 4.5% 3.0%
Third 3.5% 2.0%
Fourth 2.5% 1.0%
Fifth 1.5% None
Sixth 0.5% None
Seventh and thereafter None None

In determining the contingent deferred sales charge
applicable to a redemption of Class B shares, it will be assumed
that the redemption is, first, of any shares that were acquired
upon the reinvestment of dividends or distributions and, second,
of shares held longest during the time they are subject to the
sales charge. When shares acquired in an exchange are redeemed,
the applicable contingent deferred sales charge and conversion
schedules will be the schedules that applied at the time of the
purchase of shares of the corresponding class of the Alliance
Mutual Fund originally purchased by the shareholder.

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

<PAGE>

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

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

The conversion of Class B shares to Class A shares is
subject to the continuing availability of an opinion of counsel
to the effect that the conversion of Class B shares to Class A
shares does not constitute a taxable event under federal income
tax law. The conversion of Class B shares to Class A shares may
be suspended if such an opinion is no longer available at the
time such conversion is to occur. In that event, no further
conversions of Class B shares would occur, and shares might
continue to be subject to the higher distribution services fee
for an indefinite period which may extend beyond the period
ending eight years after the end of the calendar month in which
the shareholder's purchase order was accepted.

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

<PAGE>

Class A shares and Advisor Class shares, and will thus have a
higher expense ratio and pay correspondingly lower dividends than
Class A shares and Advisor Class shares.

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

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

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

<PAGE>

(v) sold through programs offered by financial intermediaries and
approved by AFD where such programs offer only shares which are
not subject to a contingent deferred sales charge and where the
financial intermediary establishes a single omnibus account for
each Fund.

Conversion of Advisor Class Shares to Class A Shares

Advisor Class shares may be held solely through the fee-
based program accounts, employee benefit plans, qualified state
tuition programs and registered investment advisory or other
financial intermediary relationships described above under
"Purchase of Shares-- General", and by investment advisory
clients of, and by certain other persons associated with, the
Adviser and its affiliates or the Fund. If (i) a holder of
Advisor Class shares ceases to participate in the fee-based
program or plan, or to be associated with the investment adviser
or financial intermediary, in each case, that satisfies the
requirements to purchase shares set forth under "Purchase of
Shares--General" or (ii) the holder is otherwise no longer
eligible to purchase Advisor Class shares as described in the
Advisor Class Prospectus and this Statement of Additional
Information (each, a "Conversion Event"), then all Advisor Class
shares held by the shareholder will convert automatically to
Class A shares of the Fund during the calendar month following
the month in which the Fund is informed of the occurrence of the
Conversion Event. The Fund will provide the Shareholder with at
least 30 days' notice of the conversion. The failure of a
shareholder or a fee-based program to satisfy the minimum
investment requirements to purchase Advisor Class shares will not
constitute a Conversion Event. The conversion would occur on the
basis of the relative net asset values of the two classes and
without the imposition of any sales load, fee or other charge.
Class A shares currently bear a .30% distribution services fee.
Advisor Class shares do not have any distribution services fee.
As a result, Class A shares have a higher expense ratio and may
pay correspondingly lower dividends and have a lower net asset
value than Advisor Class shares.

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

<PAGE>

________________________________________________________________

REDEMPTION AND REPURCHASE OF SHARES
________________________________________________________________

The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Sell Shares." If you are an Advisor Class
shareholder through an account established under a fee-based
program your fee-based program may impose requirements with
respect to the purchase, sale or exchange of Advisor Class shares
of the Fund that are different from those described herein. A
transaction fee may be charged by your financial representative
with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial representative.

Redemption

Subject only to the limitations described below, the
Fund's Articles of Incorporation require that the Fund redeem the
shares tendered to it, as described below, at a redemption price
equal to their net asset value as next computed following the
receipt of shares tendered for redemption in proper form. Except
for any contingent deferred sales charge which may be applicable
to Class A, Class B or Class C shares, there is no redemption
charge. Payment of the redemption price will be made within
seven days after the Fund's receipt of such tender for
redemption. If a shareholder is in doubt about what documents
are required by his or her fee-based program or employee benefit
plan, the shareholder should contact his or her financial
representative.

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

Payment of the redemption price will be made in cash.
The value of a shareholder's shares on redemption or repurchase
may be more or less than the cost of such shares to the
shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or

<PAGE>

repurchase. Redemption proceeds on Class A, Class B and Class C
shares will reflect the deduction of the contingent deferred
sales charge, if any. Payment received by a shareholder upon
redemption or repurchase of his shares, assuming the shares
constitute capital assets in his hands, will result in long-term
or short-term capital gains (or loss) depending upon the
shareholder's holding period and basis in respect of the shares
redeemed.

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

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

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

Telephone Redemption By Check. Each Fund shareholder is
eligible to request redemption by check of Fund shares for which
no stock certificates have been issued by telephone at (800) 221-
5672 before 4:00 p.m. Eastern time on a Fund business day in an

<PAGE>

amount not exceeding $50,000. Proceeds of such redemptions are
remitted by check to the shareholder's address of record. A
shareholder otherwise eligible for telephone redemption by check
may cancel the privilege by written instruction to Alliance Fund
Services, Inc., or by checking the appropriate box on the
Subscription Application found in the Prospectus.

Telephone Redemptions - General. During periods of
drastic economic or market developments, such as the market break
of October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information. The
Fund reserves the right to suspend or terminate its telephone
redemption service at any time without notice. Telephone
redemption is not available with respect to shares (i) for which
certificates have been issued, (ii) held in nominee or "street
name" accounts, (iii) held by a shareholder who has changed his
or her address of record within the preceding 30 calendar days or
(iv) held in any retirement plan account. Neither the Fund nor
the Adviser, the Principal Underwriter or Alliance Fund Services,
Inc. will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be
genuine. The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine,
including, among others, recording such telephone instructions
and causing written confirmations of the resulting transactions
to be sent to shareholders. If the Fund did not employ such
procedures, it could be liable for losses arising from
unauthorized or fraudulent telephone instructions. Selected
dealers or agents may charge a commission for handling telephone
requests for redemptions.

Repurchase

The Fund may repurchase shares through the Principal
Underwriter, selected financial intermediaries or selected
dealers or agents. The repurchase price will be the net asset
value next determined after the Principal Underwriter receives
the request (less the contingent deferred sales charge, if any,
with respect to the Class A, Class B and Class C shares), except
that requests placed through selected dealers or agents before
the close of regular trading on the Exchange on any day will be
executed at the net asset value determined as of such close of
regular trading on that day if received by the Principal
Underwriter prior to its close of business on that day (normally
5:00 p.m. Eastern time). The financial intermediary or selected
dealer or agent is responsible for transmitting the request to

<PAGE>

the Principal Underwriter by 5:00 p.m. Eastern time (certain
selected dealers, agents or financial representatives may enter
into operating agreements permitting them to transmit purchase
information to the Principal Underwriter after 5:00 p.m. Eastern
time and receive that day's net asset value). If the financial
intermediary or selected dealer or agent fails to do so, the
shareholder's right to receive that days' closing price must be
settled between the shareholder and the dealer or agent. A
shareholder may offer shares of the Fund to the Principal
Underwriter either directly or through a selected dealer or
agent. Neither the Fund nor the Principal Underwriter charges a
fee or commission in connection with the repurchase of shares
(except for the contingent deferred sales charge, if any, with
respect to Class A, Class B and Class C shares). Normally, if
shares of the Fund are offered through a financial intermediary
selected dealer or agent, the repurchase is settled by the
shareholder as an ordinary transaction with or through the
selected dealer or agent, who may charge the shareholder for this
service. The repurchase of shares of the Fund as described above
is a voluntary service of the Fund and the Fund may suspend or
terminate this practice at any time.

General

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

________________________________________________________________

SHAREHOLDER SERVICES
________________________________________________________________

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

<PAGE>

representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.

Automatic Investment Program

Investors may purchase shares of the Fund through an
automatic investment program utilizing electronic funds transfer
drawn on the investor's own bank account. Under such a program,
pre-authorized monthly drafts for a fixed amount (at least $25)
are used to purchase shares through the selected dealer or
selected agent designated by the investor at the public offering
price next determined after the Principal Underwriter receives
the proceeds from the investor's bank. In electronic form,
drafts can be made on or about a date each month selected by the
shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment
should complete the appropriate portion of the Subscription
Application found in the Prospectus. Current shareholders should
contact Alliance Fund Services, Inc. at the address or telephone
numbers shown on the cover of this Statement of Additional
Information to establish an automatic investment program.

Exchange Privilege

You may exchange your investment in the Fund for shares
of the same class of other Alliance Mutual Funds (including AFD
Exchange Reserves, a money market fund managed by the Adviser).
In addition, (i) present officers and full-time employees of the
Adviser, (ii) present Directors or Trustees of any Alliance
Mutual Fund and (iii) certain employee benefit plans for
employees of the Adviser, the Principal Underwriter, Alliance
Fund Services, Inc. and their affiliates may, on a tax-free
basis, exchange Class A shares of the Fund for Advisor Class
shares of the Fund. Exchanges of shares are made at the net
asset value next determined and without sales or service charges.
Exchanges may be made by telephone or written request. Telephone
exchange requests must be received by Alliance Fund Services,
Inc. by 4:00 p.m. Eastern time on a Fund business day in order to
receive that day's net asset value.

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

<PAGE>

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

All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
prospectus for the Alliance Mutual Fund whose shares are being
acquired. An exchange is effected through the redemption of the
shares tendered for exchange and the purchase of shares being
acquired at their respective net asset values as next determined
following receipt by the Alliance Mutual Fund whose shares are
being exchanged of (i) proper instructions and all necessary
supporting documents as described in such fund's prospectus or
(ii) a telephone request for such exchange in accordance with the
procedures set forth in the following paragraph. Exchanges
involving the redemption of shares recently purchased by check
will be permitted only after the Alliance Mutual Fund whose
shares have been tendered for exchange is reasonably assured that
the check has cleared, normally up to 15 calendar days following
the purchase date. Exchanges of shares of Alliance Mutual Funds
will generally result in the realization of a capital gain or
loss for federal income tax purposes.

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

Eligible shareholders desiring to make an exchange
should telephone Alliance Fund Services, Inc. with their account
number and other details of the exchange, at (800) 221-5672
before 4:00 p.m., Eastern time, on a Fund business day as defined
above. Telephone requests for exchange received before 4:00 p.m.
Eastern time on a Fund business day will be processed as of the
close of business on that day. During periods of drastic
economic or market developments, such as the market break of
October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone

<PAGE>

(although no such difficulty was apparent at any time in
connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information.

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

None of the Alliance Mutual Funds, the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
exchanges that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that
telephone requests for exchanges are genuine, including, among
others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Selected dealers, agents or
financial representatives, as applicable, may charge a commission
for handling telephone requests for exchanges.

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

Retirement Plans

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

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

<PAGE>

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

Employer-Sponsored Qualified Retirement Plans. Sole
proprietors, partnerships and corporations may sponsor qualified
money purchase pension and profit-sharing plans, including
Section 401(k) plans ("qualified plans"), under which annual tax-
deductible contributions are made within prescribed limits based
on compensation paid to participating individuals. The minimum
initial investment requirement may be waived with respect to
certain of these qualified plans.

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

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

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

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

<PAGE>

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

Dividend Direction Plan

A shareholder who already maintains, in addition to his
or her Class A, Class B, Class C or Advisor Class Fund account, a
Class A, Class B, Class C or Advisor Class account with one or
more other Alliance Mutual Funds may direct that income dividends
and/or capital gains paid on the shareholder's Class A, Class B,
Class C or Advisor Class Fund shares be automatically reinvested,
in any amount, without the payment of any sales or service
charges, in shares of the same class of such other Alliance
Mutual Fund(s). Further information can be obtained by
contacting Alliance Fund Services, Inc. at the address or the
"For Literature" telephone number shown on the cover of this
Statement of Additional Information. Investors wishing to
establish a dividend direction plan in connection with their
initial investment should complete the appropriate section of the
Subscription Application found in the Prospectus. Current
shareholders should contact Alliance Fund Services, Inc. to
establish a dividend direction plan.

Systematic Withdrawal Plan

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

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

<PAGE>

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

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

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

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

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

Statements and Reports

Each shareholder of the Fund receives semi-annual and
annual reports which include a portfolio of investments,
financial statements and, in the case of the annual report, the

<PAGE>

report of the Fund's independent accountants,
PricewaterhouseCoopers LLP, as well as a confirmation of each
purchase and redemption. By contacting his or her broker or
Alliance Fund Services, Inc., a shareholder can arrange for
copies of his or her account statements to be sent to another
person.

________________________________________________________________

NET ASSET VALUE
________________________________________________________________

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

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

<PAGE>

reference to the principal exchange on which the securities are
traded.

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

<PAGE>

________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________

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

The Fund intends for each taxable year to qualify to be
taxed as a regulated investment company under the Code.
Qualification as a regulated investment company under the Code
requires, among other things, that (a) at least 90% of the Fund's
annual gross income, without offset for losses from the sale or
other disposition of securities, be derived from interest,
payments with respect to securities loans, dividends and gains
from the sale or other disposition of securities or options
thereon and certain other qualifying income; and (b) the Fund
diversify its holdings so that, at the end of each quarter of the
taxable year, (i) at least 50% of the market value of the Fund's
assets is represented by cash, government securities and other
securities limited in respect of any one issuer to an amount not
greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of
the value of its assets is invested in the securities of any one
issuer (other than government securities).

In addition, in order to qualify to be taxed as a
regulated investment company, the Fund must distribute to its
shareholders as ordinary dividends at least 90% of its investment
company taxable income earned in each year. The Fund intends to
declare and distribute dividends in the amounts and at the times
necessary to meet this requirement. The Fund also intends to
declare and distribute dividends in the amounts and at the times
necessary to avoid the application of the 4% federal excise tax
imposed on certain undistributed income of regulated investment
companies. For federal income and excise tax purposes, dividends
declared and payable to shareholders of record as of a date in
October, November or December but actually paid during the
following January will be treated as having been distributed by
the Fund, and will be taxable to these shareholders, in the year
declared, and not in the subsequent calendar year in which the
shareholders actually receive the dividend.

Dividends of the Fund's net ordinary income and
distributions of any net realized short-term capital gain are

<PAGE>

taxable to shareholders as ordinary income. Distributions of net
capital gain (i.e., the excess of net long-term capital gain over
net short-term capital loss) are taxable as long-term capital
gain, regardless of how long a shareholder has held shares in the
Fund.

In the case of corporate shareholders, a portion of the
Fund's dividends may be eligible for the dividends-received
deduction. The amount eligible for the deduction is limited to
the amount of qualifying dividends received by the Fund. A
corporation's dividends-received deduction generally will be
disallowed unless the corporation holds shares in the Fund at
least 46 days during the 90-day period beginning 45 days before
the date on which the corporation becomes entitled to receive the
dividend. Furthermore, the dividends-received deduction will be
disallowed to the extent a corporation's investment in shares of
the Fund is financed with indebtedness.

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

After the end of the calendar year, the Fund will notify
shareholders of the federal income tax status of any
distributions made by the Fund to shareholders during such year.

Any gain or loss arising from a sale or redemption of
Fund shares generally will be capital gain or loss except in the
case of a dealer or a financial institution, and will be long-
term capital gain or loss if the shareholder has held such shares
for more than one year at the time of the sale or redemption;
otherwise it will be short-term capital gain or loss. If a
shareholder has held shares in the Fund for six months or less
and during that period has received a distribution of net capital
gain, any loss recognized by the shareholder on the sale of those
shares during the six-month period will be treated as a long-term
capital loss to the extent of the distribution. In determining
the holding period of such shares for this purpose, any period
during which a shareholder's risk of loss is offset by means of
options, short sales or similar transactions is not counted.

A dividend or capital gains distribution with respect to
shares of the Fund held by a tax-deferred or qualified plan, such
as an individual retirement account, 403(b)(7) retirement plan or

<PAGE>

corporate pension or profit-sharing plan, generally will not be
taxable to the plan. Distributions from such plans will be
taxable to individual participants under applicable tax rules
without regard to the character of the income earned by the
qualified plan.

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

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

Certain listed options are considered "section 1256
contracts" for federal income tax purposes. Section 1256
contracts held by the Fund at the end of each taxable year will
be "marked to market" and treated for federal income tax purposes
as though sold for fair market value on the last business day of
such taxable year. Gain or loss realized by the Fund on section
1256 contracts generally will be considered 60% long-term and 40%
short-term capital gain or loss. The Fund can elect to exempt
its section 1256 contracts which are part of a "mixed straddle"
(as described below) from the application of section 1256.

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

<PAGE>

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

Income received by the Fund also may be subject to
state, local and foreign income taxes, including taxes withheld
at the source. The United States has entered into tax treaties
with many foreign countries which entitle the Fund to a reduced
rate of such taxes or exemption from taxes on such income. It is
impossible to determine the effective rate of foreign tax in
advance since the amount of the Fund's assets to be invested
within various countries is not known.

It is the present policy of the Fund to distribute to
shareholders all net investment income quarterly and to
distribute net realized capital gains, if any, annually. The
amount of any such distributions must necessarily depend upon the
realization by the Fund of income and capital gains from
investments.

<PAGE>

________________________________________________________________

PORTFOLIO TRANSACTIONS
________________________________________________________________

Subject to the general supervision of the Board of
Directors of the Fund, the Adviser is responsible for the
investment decisions and the placing of orders for portfolio
transactions for the Fund. The Adviser determines the broker to
be used in each specific transaction with the objective of
negotiating a combination of the most favorable commission and
the best price obtainable on each transaction (generally defined
as best execution). When consistent with the objective of
obtaining best execution, brokerage may be directed to persons or
firms supplying investment information to the Adviser. There may
be occasions where the transaction cost charged by a broker may
be greater than that which another broker may charge if the Fund
determines in good faith that the amount of such transaction cost
is reasonable in relation to the value of the brokerage, research
and statistical services provided by the executing broker.

Neither the Fund nor the Adviser has entered into
agreements or understandings with any brokers regarding the
placement of securities transactions because of research services
they provide. To the extent that such persons or firms supply
investment information to the Adviser for use in rendering
investment advice to the Fund, such information may be supplied
at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the
Fund. While it is impossible to place an actual dollar value on
such investment information, its receipt by the Adviser probably
does not reduce the overall expenses of the Adviser to any
material extent.

The investment information provided to the Adviser is of
the type described in Section 28(e)(3) of the Securities Exchange
Act of 1934 and is designed to augment the Adviser's own internal
research and investment strategy capabilities. Research services
furnished by brokers through which the Fund effects securities
transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its
client accounts.

The Fund may deal in some instances in securities which
are not listed on a national stock exchange but are traded in the
over-the-counter market. The Fund may also purchase listed
securities through the third market, i.e., from a dealer which is
not a member of the exchange on which a security is listed.
Where transactions are executed in the over-the-counter market or
third market, the Fund will seek to deal with the primary market
makers; but when necessary in order to obtain the best price and

<PAGE>

execution, it will utilize the services of others. In all cases,
the Fund will attempt to negotiate best execution.

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

The Fund may from time to time place orders for the
purchase or sale of securities (including listed call options)
with Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
an affiliate of the Adviser, and with brokers which may have
their transactions cleared or settled, or both, by the Pershing
Division of DLJ. In such instances, the placement of orders with
such brokers would be consistent with the Fund's objective of
obtaining best execution and would not be dependent upon the fact
that DLJ is an affiliate of the Adviser. With respect to orders
placed with DLJ for execution on a national securities exchange,
commissions received must conform to Section 17(e)(2)(A) of the
1940 Act and Rule 17e-1 thereunder, which permit an affiliated
person of a registered investment company (such as the Fund), or
any affiliated person of such person, to receive a brokerage
commission from such registered investment company provided that
such commission is reasonable and fair compared to the
commissions received by other brokers in connection with
comparable transactions involving similar securities during a
comparable period of time.

During the fiscal years ended October 31, 2000, 1999 and
1998, the Fund incurred brokerage commissions amounting in the
aggregate to $[________], $5,724,116 and $3,594,269. During the
fiscal years ended October 31, 2000, 1999 and 1998, brokerage
commissions amounting in the aggregate to $[________], $288,596
and $3,115, respectively, were paid to DLJ and brokerage
commissions amounting in the aggregate to $[________], $0 and
$3,500, respectively, were paid to brokers utilizing the Pershing
Division of DLJ. During the fiscal year ended October 31, 2000,
the brokerage commissions paid to DLJ constituted [___]% of the

<PAGE>

Fund's aggregate brokerage commissions and the brokerage
commissions paid to brokers utilizing the Pershing Division of
DLJ constituted [___]% of the Fund's aggregate brokerage
commissions. During the fiscal year ended October 31, 2000, of
the Fund's aggregate dollar amount of brokerage transactions
involving the payment of commissions, [___]% were effected
through DLJ and [___]% were effected through brokers utilizing
the Pershing Division of DLJ. During the fiscal year ended
October 31, 2000, transactions in portfolio securities of the
Fund aggregating $[________] with associated brokerage
commissions of approximately $[________] were allocated to
persons or firms supplying research services to the Fund or the
Adviser.

________________________________________________________________

GENERAL INFORMATION
________________________________________________________________

Capitalization

The Fund was organized as a corporation in Maryland in
1932 under the name "Dividend Shares, Inc." The authorized
capital stock of the Fund consists of 3,000,000,000 shares of
Class A common stock, 3,000,000,000 shares of Class B common
stock, 3,000,000,000 shares of Class C common stock and
3,000,000,000 shares of Advisor Class common stock, each having
$.01 par value.

All shares of the Fund, when issued, are fully paid and
non-assessable. The Directors are authorized to reclassify and
issue any unissued shares to any number of additional series and
classes without shareholder approval. Accordingly, the Directors
in the future, for reasons such as the desire to establish one or
more additional portfolios with different investment objectives,
policies or restrictions, may create additional classes or series
of shares. Any issuance of shares of another class or series
would be governed by the 1940 Act and the law of the State of
Maryland. If shares of another series were issued in connection
with the creation of a second portfolio, each share of either
portfolio would normally be entitled to one vote for all
purposes. Generally, shares of both portfolios would vote as a
single series on matters, such as the election of Directors, that
affected both portfolios in substantially the same manner. As to
matters affecting each portfolio differently, such as approval of
the Advisory Agreement and changes in investment policy, shares
of each portfolio would vote as a separate series. Procedures for
calling a shareholders' meeting for the removal of Directors of
the Fund, similar to those set forth in Section 16(c) of the 1940
Act will be available to shareholders of the Fund. The rights of

<PAGE>

the holders of shares of a series may not be modified except by
the vote of a majority of the outstanding shares of such series.

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

A shareholder will be entitled to share pro rata with
other holders of the same class of shares all dividends and
distributions arising from the Fund's assets and, upon redeeming
shares, will receive the then current net asset value of the Fund
represented by the redeemed shares less any applicable CDSC. The
Fund is empowered to establish, without shareholder approval,
additional portfolios, which may have different investment
objectives and policies than those of the Fund, and additional
classes of shares within the Fund. If an additional portfolio or
class were established in the Fund, each share of the portfolio
or class would normally be entitled to one vote for all purposes.
Generally, shares of each portfolio and class would vote together
as a single class on matters, such as the election of Directors,
that affect each portfolio and class in substantially the same
manner. Class A, B, C and Advisor Class shares have identical
voting, dividend, liquidation and other rights, except that each
class bears its own transfer agency expenses, each of Class A,
Class B and Class C shares of the Fund bears its own distribution
expenses and Class B shares and Advisor Class shares convert to
Class A shares under certain circumstances. Each class of shares
of the Fund votes separately with respect to the Fund's Rule 12b-
1 distribution plan and other matters for which separate class
voting is appropriate under applicable law. Shares are freely
transferable, are entitled to dividends as determined by the
Directors and, in liquidation of the Fund, are entitled to
receive the net assets of the Fund.

At [__________], 2001 there were [________] shares of
common stock of the Fund outstanding including [________] Class A
shares, [________] Class B shares, [________] Class C shares and
[________] Advisor Class shares. To the knowledge of the Fund,
the following persons owned of record or beneficially, 5% or more
of a class of the outstanding shares of the Fund as of
[__________], 2001:

<PAGE>

No. of % of
Shares % of % of % of Advisor
Name and Address of Class Class A Class B Class C Class

MLPF&S
For the Sole Benefit
of Its Customers [________] [____]%
4800 Deer Lake Dr. East [________] [____]%
2nd Floor [________] [____]%
Jacksonville, FL [________] [____]%
32246-6484

Salomon Smith Barney Inc.
333 West 34th Street
3rd Floor
New York, NY 10001-2483 [________] [____]%

Custodian

State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, acts as custodian for the
assets of the Fund but plays no part in deciding the purchase or
sale of portfolio securities. Subject to the supervision of the
Fund's Directors, State Street Bank and Trust Company may enter
into sub-custodial agreements for the holding of the Fund's
foreign securities.

Principal Underwriter

Alliance Fund Distributors, Inc., 1345 Avenue of the
Americas, New York, New York 10105, serves as the Fund's
Principal Underwriter, and as such may solicit orders from the
public to purchase shares of the Fund. Under the Distribution
Services Agreement, the Fund has agreed to indemnify the
Principal Underwriter, in the absence of its willful misfeasance,
bad faith, gross negligence or reckless disregard of its
obligations thereunder, against certain civil liabilities,
including liabilities under the Securities Act.

Counsel

Legal matters in connection with the issuance of the
shares of Common Stock offered hereby are passed upon by Seward &
Kissel LLP, New York, New York. Seward & Kissel LLP has relied
upon the opinion of Venable, Baetjer and Howard, LLP, Baltimore,
Maryland, for matters relating to Maryland law.

<PAGE>

Independent Accountants

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

Performance Information

From time to time, the Fund advertises its "yield,"
"actual distribution rate" and "total return." Computed
separately for each class, the Fund's yield for any 30-day (or
one month) period is computed by dividing the net investment
income per share earned during such period by the maximum public
offering price per share on the last day of the period, and then
annualizing such 30-day (or one month) yield in accordance with a
formula prescribed by the Commission which provides for
compounding on a semi-annual basis. The Fund's "actual
distribution rate," which may be advertised in items of sales
literature, is computed in the same manner as yield except that
actual income dividends declared per share during the period in
question is substituted for net investment income per share.
Computed separately for each class, the Fund's "total return" is
its average annual compounded total return for recent one-, five-
and ten-year periods. The Fund's actual distribution rate is
computed separately for Class A, Class B and Class C shares. The
Fund's total return for such a period is computed by finding,
through the use of a formula prescribed by the Commission, the
average annual compounded rate of return over the period that
would equate an assumed initial amount invested to the value of
such investment at the end of the period. For purposes of
computing total return, income dividends and capital gains
distributions paid on shares of the Fund are assumed to have been
reinvested when received and the maximum sales charge applicable
to purchases of Fund shares is assumed to have been paid.

The Fund calculates average annual total return
information in the Performance Table in the Risk/Return Summary
according to the Commission formula as described above. In
accordance with Commission guidelines, total return information
is presented for each class for the same time periods, i.e., the
1, 5 and 10 years (or over the life of the Fund, if the Fund is
less than 10 years old) ending on the last day of the most recent
calendar year. Since different classes may have first been sold
on different dates ("Actual Inception Dates"), in some cases this
can result in return information being presented for a class for
periods prior to its Actual Inception Date. Where return
information is presented for periods prior to the Actual
Inception Date of a Class (a "Younger Class"), such information
is calculated by using the historical performance of the class
with the earliest Actual Inception Date (the "Oldest Class").
For this purpose, the Fund calculates the difference in total
annual fund operating expenses (as a percentage of average net

<PAGE>

assets) between the Younger Class and the Oldest Class, divides
the difference by 12, and subtracts the result from the monthly
performance at net asset value (including reinvestment of all
dividends and distributions) of the Oldest Class for each month
prior to the Younger Class's Actual Inception Date for which
performance information is to be shown. The resulting "pro
forma" monthly performance information is used to calculate the
Younger Class's average annual returns for these periods. Any
conversion feature applicable to the Younger Class is assumed to
occur in accordance with the Actual Inception Date for that
class, not its hypothetical inception date.

The average annual total return based on net asset value
for each class of shares for the one-, five- and ten-year periods
ended October 31, 2001 (or since inception through that date, as
noted) was as follows:

Year Ended 5 Years Ended 10 Years Ended
10/31/01 10/31/01 10/31/01

Class A [____]% [____]% [____]%
Class B [____]% [____]% [____]%*
Class C [____]% [____]% [____]%*
Advisor Class [____]% [____]%* N/A

* Inception dates: Class B shares - February 8, 1991
Class C shares - May 3, 1993
Advisor Class shares - October 2, 1996

Advertisements quoting performance rankings of the Fund
as measured by financial publications or independent
organizations such as Lipper, Inc. and Morningstar, Inc. and
advertisements presenting the historical performance of the Fund
may also from time to time be sent to investors or placed in
newspapers and magazines such as Barrons, Business Week, Changing
Times, Forbes, Investor's Daily, Money Magazine, The New York
Times and The Wall Street Journal or other media on behalf of the
Fund.

Additional Information

Any shareholder inquiries may be directed to the
shareholder's broker or other financial adviser or to Alliance
Fund Services, Inc. at the address or telephone number shown on
the front cover of this Statement of Additional Information.
This Statement of Additional Information does not contain all the
information set forth in the Registration Statement filed by the
Fund with the Commission. Copies of the Registration Statement
may be obtained at a reasonable charge from the Commission or may

<PAGE>

be examined, without charge, at the offices of the Commission in
Washington, D.C.

<PAGE>

________________________________________________________________

REPORT OF INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
________________________________________________________________

The financial statements and the report of PricewaterhouseCoopers
LLP of Alliance Growth and Income Fund, Inc. are incorporated
herein by reference to its annual report filing made with the SEC
pursuant to Section 30(b) of the 1940 Act and Rule 30b-2
thereunder. The annual report is dated October 31, 2000 and was
filed on [________], 2001. It is available without charge upon
request by calling Alliance Fund Services, Inc. at (800) 227-
4618.

<PAGE>

________________________________________________________________

APPENDIX A:

CERTAIN EMPLOYEE BENEFIT PLANS
________________________________________________________________

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

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

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

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

For purposes of applying (a) and (b), there are to
be aggregated all assets of any Tax-Qualified Plan

A-1

<PAGE>

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

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

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

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

A-2

<PAGE>

PART C
OTHER INFORMATION

Item 23. Exhibits

(a) (1) Articles of Restatement of Articles of
Incorporation dated March 28, 1991and filed
April 1, 1991 - Incorporated by reference to
Exhibit 1 to Post-Effective Amendment No. 89
of Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 31, 1997.

(2) Articles Supplementary to Articles of
Incorporation of Registrant dated April 30,
1991 and filed May 2, 1991 - Incorporated by
reference to Exhibit 1(b) to Post-Effective
Amendment No. 91 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and
Exchange Commission on October 30, 1998.

(3) Certificate of Correction of Articles of
Incorporation of Registrant dated April 20,
1993 and filed April 22, 1993 - Incorporated
by reference to Exhibit 1(c) to
Post-Effective Amendment No. 91 of
Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 30, 1998.

(4) Articles Supplementary to Articles of
Incorporation dated April 29, 1993 and filed
April 30, 1993 - Incorporated by reference to
Exhibit 1 to Post-Effective Amendment No. 89
of Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 31, 1997.

(5) Articles of Amendment to Articles of
Incorporation of Registrant dated April 29,
1993 and filed April 30, 1993 - Incorporated
by reference to Exhibit 1(e) to
Post-Effective Amendment No. 91 of
Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 30, 1998.

C-1

<PAGE>

(6) Articles Supplementary to Articles of
Incorporation of Registrant dated
September 30, 1996 and filed October 1, 1996
- Incorporated by reference to Exhibit 1(f)
to Post-Effective Amendment No. 91 of
Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 30, 1998.

(7) Articles of Amendment to Articles of
Incorporation of Registrant dated
September 9, 1997 and filed September 10,
1997 - Incorporated by reference to
Exhibit 1(g) to Post-Effective Amendment No.
91 of Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 30, 1998.

(8) Articles Supplementary to Articles of
Incorporation of Registrant dated May 21,
1998 and filed July 6, 1998 - Incorporated by
reference to Exhibit 1(h) to Post-Effective
Amendment No. 91 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and
Exchange Commission on October 30, 1998.

(b) Amended and Restated By-Laws dated July 18, 1989 -
Incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 90 of Registrant's
Registration Statement on Form N-1A (File
Nos. 2-11023 and 811-00126) filed with the
Securities and Exchange Commission on January 30,
1998.

(d) Investment Advisory Agreement between the
Registrant and Alliance Capital Management L.P -
Incorporated by reference to Exhibit 5 to
Post-Effective Amendment No. 90 of Registrant's
Registration Statement on Form N-1A (File
Nos. 2-11023 and 811-00126) filed with the
Securities and Exchange Commission on January 30,
1998.

(e) (1) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors,
Inc. - Incorporated by reference to Exhibit 6

C-2

<PAGE>

to Post-Effective Amendment No. 90 of
Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on January 30, 1998.

(2) Amendment to the Distribution Services
Agreement between the Registrant and Alliance
Fund Distributors, Inc. - Incorporated by
reference to Exhibit 6 to Post-Effective
Amendment No. 89 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and
Exchange Commission on October 31, 1997.

(3) Selected Dealer Agreement between Alliance
Fund Distributors, Inc. and selected dealers
offering shares of Registrant - Incorporated
by reference to Exhibit 6 to Post-Effective
Amendment No. 89 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and
Exchange Commission on October 31, 1997.

(4) Selected Agent Agreement between Alliance
Fund Distributors, Inc. and selected agents
making available shares of Registrant -
Incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 89 of
Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126)
filed with the Securities and Exchange
Commission on October 31, 1997.

(f) Not applicable.

(g) Custodian Contract between the Registrant and
State Street Bank and Trust Company - Incorporated
by reference to Exhibit 8 to Post-Effective
Amendment No. 90 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and Exchange
Commission on January 30, 1998.

(h) Transfer Agency Agreement between the Registrant
and Alliance Fund Services, Inc. - Incorporated by
reference to Exhibit 9 to Post-Effective Amendment
No. 90 of Registrant's Registration Statement on
Form N-1A (File Nos. 2-11023 and 811-00126) filed
with the Securities and Exchange Commission on
January 30, 1998.

C-3

<PAGE>

(i) Opinion of Seward & Kissel LLP - Not applicable.

(j) Consent of Independent Auditors - Not applicable.

(k) Not applicable.

(l) Not applicable.

(m) Rule 12b-1 Plan - See Exhibit (e)(2) hereto.

(n) Amended and Restated Plan Pursuant to Rule 18f-3
Plan - Incorporated by reference to Exhibit 18 to
Post-Effective Amendment No. 88 of Registrant's
Registration Statement on Form N-1A (File
Nos. 2-11023 and 811-00126) filed with the
Securities and Exchange Commission on February 3,
1997.

(o) (1) Code of Ethics for the Fund, incorporated by
reference to Exhibit (p)(1) to Post-Effective
Amendment No. 74 of the Registration
Statement on Form N-1A of Alliance Bond Fund,
Inc. (File Nos. 2-48227 and 811-2383), filed
with the Securities and Exchange Commission
on October 6, 2000, which is substantially
identical in all material respects except as
to the party which is the Registrant.

(2) Code of Ethics for the Alliance Capital
Management L.P. and Alliance Fund
Distributors, Inc. incorporated by reference
to Exhibit (p)(2) to Post-Effective Amendment
No. 74 of the Registration Statement on Form
N-1A of Alliance Bond Fund, Inc. (File Nos.
2-48227 and 811-2383), filed with the
Securities and Exchange Commission on
October 6, 2000.

Other Exhibits:

Powers of Attorney for Ruth Block, John D. Carifa,
David H. Dievler, John H. Dobkin, William D.
Foulk, Jr., Dr. James M. Hester, Clifford L.
Michel and Donald J. Robinson - Incorporated by
reference to Other Exhibits to Post-Effective
Amendment No. 94 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-11023 and
811-00126) filed with the Securities and Exchange
Commission on October 29, 1999.

C-4

<PAGE>

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

None.

Item 25. Indemnification

It is the Registrant's policy to indemnify its
directors and officers, employees and other agents to
the maximum extent permitted by Section 2-418 of the
General Corporation Law of the State of Maryland and as
set forth in Article SEVENTH of Registrant's Articles
of Restatement of Articles of Incorporation, filed as
Exhibit (a), Section 11 of the Registrant's Amended
By-laws filed as Exhibit (b) and Section 10 of the
Distribution Services Agreement filed as
Exhibit (e)(2), all as set forth below. The liability
of the Registrant's directors and officers is dealt
with in Article SEVENTH of Registrant's Articles of
Restatement of Articles of Incorporation, and Section
11 of the Registrant's Amended By-laws, as set forth
below. The Adviser's liability for any loss suffered
by the Registrant or its shareholders is set forth in
Section 4 of the Investment Advisory Agreement filed as
Exhibit (d) in response to Item 23, as set forth below.

Section 2-418 of the Maryland General Corporation Law
reads as follows:

"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS.--(a) In this section the
following words have the meaning indicated.

(1) "Director" means any person who is or
was a director of a corporation and any person
who, while a director of a corporation, is or was
serving at the request of the corporation as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, other
enterprise, or employee benefit plan.

(2) "Corporation" includes any domestic or
foreign predecessor entity of a corporation in a
merger, consolidation, or other transaction in
which the predecessor's existence ceased upon
consummation of the transaction.

(3) "Expenses" include attorney's fees.

(4) "Official capacity" means the following:

C-5

<PAGE>

(i) When used with respect to a
director, the office of director in the
corporation; and

(ii) When used with respect to a
person other than a director as contemplated in
subsection (j), the elective or appointive office
in the corporation held by the officer, or the
employment or agency relationship undertaken by
the employee or agent in behalf of the
corporation.

(iii) "Official capacity" does not
include service for any other foreign or domestic
corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.

(5) "Party" includes a person who was, is,
or is threatened to be made a named defendant or
respondent in a proceeding.

(6) "Proceeding" means any threatened,
pending or completed action, suit or proceeding,
whether civil, criminal, administrative, or
investigative.

(b)(1) A corporation may indemnify any
director made a party to any proceeding by reason
of service in that capacity unless it is
established that:

(i) The act or omission of the
director was material to the matter giving rise to
the proceeding; and

1. Was committed in bad faith; or

2. Was the result of active and deliberate
dishonesty; or

(ii) The director actually received an
improper personal benefit in money, property, or
services; or

(iii) In the case of any criminal
proceeding, the director had reasonable cause to
believe that the act or omission was unlawful.

(2) (i) Indemnification may be against
judgments, penalties, fines, settlements, and

C-6

<PAGE>

reasonable expenses actually incurred by the
director in connection with the proceeding.

(ii) However, if the proceeding was
one by or in the right of the corporation,
indemnification may not be made in respect of any
proceeding in which the director shall have been
adjudged to be liable to the corporation.

(3) (i) The termination of any proceeding
by judgment, order or settlement does not create a
presumption that the director did not meet the
requisite standard of conduct set forth in this
subsection.

(ii) The termination of any proceeding
by conviction, or a plea of nolo contendere or its
equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable
presumption that the director did not meet that
standard of conduct.

(c) A director may not be indemnified under
subsection (b) of this section in respect of any
proceeding charging improper personal benefit to
the director, whether or not involving action in
the director's official capacity, in which the
director was adjudged to be liable on the basis
that personal benefit was improperly received.

(d) Unless limited by the charter:

(1) A director who has been successful, on
the merits or otherwise, in the defense of any
proceeding referred to in subsection (b) of this
section shall be indemnified against reasonable
expenses incurred by the director in connection
with the proceeding.

(2) A court of appropriate jurisdiction upon
application of a director and such notice as the
court shall require, may order indemnification in
the following circumstances:

(i) If it determines a director is
entitled to reimbursement under paragraph (1) of
this subsection, the court shall order
indemnification, in which case the director shall
be entitled to recover the expenses of securing
such reimbursement; or

C-7

<PAGE>

(ii) If it determines that the
director is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not the director has met
the standards of conduct set forth in subsection
(b) of this section or has been adjudged liable
under the circumstances described in subsection
(c) of this section, the court may order such
indemnification as the court shall deem proper.
However, indemnification with respect to any
proceeding by or in the right of the corporation
or in which liability shall have been adjudged in
the circumstances described in subsection (c)
shall be limited to expenses.

(3) A court of appropriate jurisdiction may
be the same court in which the proceeding
involving the director's liability took place.

(e)(1) Indemnification under subsection (b)
of this section may not be made by the corporation
unless authorized for a specific proceeding after
a determination has been made that indemnification
of the director is permissible in the
circumstances because the director has met the
standard of conduct set forth in subsection (b) of
this section.

(2) Such determination shall be made:

(i) By the board of directors by a
majority vote of a quorum consisting of directors
not, at the time, parties to the proceeding, or,
if such a quorum cannot be obtained, then by a
majority vote of a committee of the board
consisting solely of two or more directors not, at
the time, parties to such proceeding and who were
duly designated to act in the matter by a majority
vote of the full board in which the designated
directors who are parties may participate;

(ii) By special legal counsel selected
by the board or a committee of the board by vote
as set forth in subparagraph (1) of this
paragraph, or, if the requisite quorum of the full
board cannot be obtained therefor and the
committee cannot be established, by a majority
vote of the full board in which director who are
parties may participate; or

(iii) By the stockholders.

C-8

<PAGE>

(3) Authorization of indemnification and
determination as to reasonableness of expenses
shall be made in the same manner as the
determination that indemnification is permissible.
However, if the determination that indemnification
is permissible is made by special legal counsel,
authorization of indemnification and determination
as to reasonableness of expenses shall be made in
the manner specified in subparagraph (ii) of
paragraph (2) of this subsection for selection of
such counsel.

(4) Shares held by directors who are parties
to the proceeding may not be voted on the subject
matter under this subsection.

(f)(1) Reasonable expenses incurred by a
director who is a party to a proceeding may be
paid or reimbursed by the corporation in advance
of the final disposition of the proceeding, upon
receipt by the corporation of:

(i) A written affirmation by the
director of the director's good faith belief that
the standard of conduct necessary for
indemnification by the corporation as authorized
in this section has been met; and

(ii) A written undertaking by or on
behalf of the director to repay the amount if it
shall ultimately be determined that the standard
of conduct has not been met.

(2) The undertaking required by subparagraph
(ii) of paragraph (1) of this subsection shall be
an unlimited general obligation of the director
but need not be secured and may be accepted
without reference to financial ability to make the
repayment.

(3) Payments under this subsection shall be
made as provided by the charter, bylaws, or
contract or as specified in subsection (e) of this
section.

(g) The indemnification and advancement of
expenses provided or authorized by this section
may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a
director may be entitled under the charter, the
bylaws, a resolution of stockholders or directors,

C-9

<PAGE>

an agreement or otherwise, both as to action in an
official capacity and as to action in another
capacity while holding such office.

(h) This section does not limit the
corporation's power to pay or reimburse expenses
incurred by a director in connection with an
appearance as a witness in a proceeding at a time
when the director has not been made a named
defendant or respondent in the proceeding.

(i) For purposes of this section:

(1) The corporation shall be deemed to have
requested a director to serve an employee benefit
plan where the performance of the director's
duties to the corporation also imposes duties on,
or otherwise involves services by, the director to
the plan or participants or beneficiaries of the
plan:

(2) Excise taxes assessed on a director with
respect to an employee benefit plan pursuant to
applicable law shall be deemed fines; and

(3) Action taken or omitted by the director
with respect to an employee benefit plan in the
performance of the director's duties for a purpose
reasonably believed by the director to be in the
interest of the participants and beneficiaries of
the plan shall be deemed to be for a purpose which
is not opposed to the best interests of the
corporation.

(j) Unless limited by the charter:

(1) An officer of the corporation shall be
indemnified as and to the extent provided in
subsection (d) of this section for a director and
shall be entitled, to the same extent as a
director, to seek indemnification pursuant to the
provisions of subsection (d);

(2) A corporation may indemnify and advance
expenses to an officer, employee, or agent of the
corporation to the same extent that it may
indemnify directors under this section; and

(3) A corporation, in addition, may
indemnify and advance expenses to an officer,
employee, or agent who is not a director to such

C-10

<PAGE>

further extent, consistent with law, as may be
provided by its charter, bylaws, general or
specific action of its board of directors or
contract.

(k)(1) A corporation may purchase and
maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of
the corporation, or who, while a director,
officer, employee, or agent of the corporation, is
or was serving at the request, of the corporation
as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust,
other enterprise, or employee benefit plan against
any liability asserted against and incurred by
such person in any such capacity or arising out
of such person's position, whether or not the
corporation would have the power to indemnify
against liability under the provisions of this
section.

(2) A corporation may provide similar
protection, including a trust fund, letter of
credit, or surety bond, not inconsistent with this
section.

(3) The insurance or similar protection may
be provided by a subsidiary or an affiliate of the
corporation.

(l) Any indemnification of, or advance of
expenses to, a director in accordance with this
section, if arising out of a proceeding by or in
the right of the corporation, shall be reported in
writing to the stockholders with the notice of the
next stockholders' meeting or prior to the
meeting."

Article SEVENTH of the Registrant's Articles of Restatement of
Articles of Incorporation reads as follows:

"(8)(d) Nothing herein contained shall
protect or purport to protect any director or
officer of the Corporation against any liability
to the Corporation or its stockholders to which he
would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the
conduct of his office.

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<PAGE>

"(11) A director or officer of the
Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for
breach of fiduciary duty as a director or officer,
except to the extent such exemption from liability
or limitation thereof is not permitted by law
(including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter
be amended. No amendment, modification or repeal
of this Article SEVENTH shall adversely affect any
right or protection of a director or officer that
exists at the time of such amendment, modification
or repeal."

The Investment Advisory Agreement between Registrant and Alliance
Capital Management L.P. provides that Alliance Capital Management
L.P. will not be liable under such agreements for any mistake of
judgment or in any event whatsoever except for lack of good faith
and that nothing therein will be deemed to protect, or purport to
protect, Alliance Capital Management L.P. against any liability
to Registrant or its security holders to which it would otherwise
be subject by reason of wilful misfeasance, bad faith or gross
negligence in the performance of its duties thereunder, or by
reason of reckless disregard of its obligations and duties
thereunder.

The Distribution Services Agreement between the Registrant
and Alliance Fund Distributors, Inc. provides that the Registrant
will indemnify, defend and hold Alliance Fund Distributors, Inc.,
and any person who controls it within the meaning of Section 15
of the Investment Company Act of 1940, free and harmless from and
against any and all claims, demands, liabilities and expenses
which Alliance Fund Distributors, Inc. or any controlling person
may incur arising out of or based upon any alleged untrue
statement of a material fact contained in Registrant's
Registration Statement, Prospectus or Statement of Additional
Information or arising out of, or based upon any alleged omission
to state a material fact required to be stated in any one of the
foregoing or necessary to make the statements in any one of the
foregoing not misleading provided that in no event will anything
therein contained by so construed as to protect Alliance Fund
Distributors, Inc. against any liability to the Registrant or its
security holders to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of
its obligations and duties thereunder.

The foregoing summaries are qualified by the entire text of
Registrant's Articles of Restatement of Articles of
Incorporation, the Investment Advisory Agreement between
Registrant and Alliance Capital Management L.P. and the

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Distribution Services Agreement between Registrant and Alliance
Fund Distributors, Inc.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the ("Securities Act") may be permitted
to directors, officer and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

In accordance with Release No. IC-11330 (September 2, 1980), the
Registrant will indemnify its directors, officers, investment
adviser and principal underwriters only if (1) a final decision
on the merits was issued by the court or other body before whom
the proceeding was brought that the person to be indemnified (the
"indemnitee") was not liable by reason or willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct") or
(2) a reasonable determination is made, based upon a review of
the facts, that the indemnitee was not liable by reason of
disabling conduct, by (a) the vote of a majority of a quorum of
the directors who are neither "interested persons" of the
Registrant as defined in section 2(a)(19) of the Investment
Company Act of 1940 nor parties to the proceeding
("disinterested, non-party directors"), or (b) an independent
legal counsel in a written opinion. The Registrant will advance
attorneys fees or other expenses incurred by its directors,
officers, investment adviser or principal underwriters in
defending a proceeding, upon the undertaking by or on behalf of
the indemnitee to repay the advance unless it is ultimately
determined that he is entitled to indemnification and, as a
condition to the advance, (1) the indemnitee shall provide a
security for his undertaking, (2) the Registrant shall be insured
against losses arising by reason of any lawful advances, or (3) a
majority of a quorum of disinterested, non-party directors of the
Registrant, or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to

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believe that the indemnitee ultimately will be found entitled to
indemnification.

Section 11 of the Registrant's Amended By-laws reads as follows:

"Section 11. Indemnification of Directors and Officers. The
Corporation shall indemnify to the fullest extent permitted
by law (including the Investment Company Act of 1940) as
currently in effect or as the same may hereafter be amended,
any person made or threatened to be made a party to any
action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that
such person or such person's testator or intestate is or was
a director or officer of the Corporation or serves or served
at the request of the Corporation any other enterprise as a
director or officer. To the fullest extent permitted by law
(including the Investment Company Act of 1940) as currently
in effect or as the same may hereafter go amended, expenses
incurred by any such person in defending any such action,
suit or proceeding shall be paid or reimbursed by the
Corporation promptly upon receipt by it of any undertaking of
such person to repay such expenses if it shall ultimately be
determined that such person is not entitled to be indemnified
by the Corporation. The rights provided to any person by
this Section 11, shall be enforceable against the Corporation
by such person who shall be presumed to have relied upon it
in serving or continuing to serve as a director or officer as
provided above. No amendment of this Section 11 shall impair
the rights of any person arising at any time with respect to
events occurring prior to such amendment. For purposes of
this Section 11, the term "Corporation" shall include any
predecessor of the Corporation and any constituent
corporation (including any constituent of a constituent)
absorbed by the Corporation in a consolidation or merger; the
term "other enterprise" shall include any corporation,
partnership, joint venture, trust or employee benefit plan;
service "at the request of the Corporation" shall include
service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or
officer with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a
person with respect to an employee benefit plan shall be
deemed to be indemnifiable expenses; and action by a person
with respect to any employee benefit plan which such person
reasonably believes to be in the interest of the participants
and beneficiaries of such plan shall be deemed to be action
not opposed to the best interests of the Corporation."

The Registrant participates in a joint directors and officers
liability insurance policy issued by the ICI Mutual Insurance
Company. Coverage under this policy has been extended to

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directors, trustees and officers of the investment companies
managed by Alliance Capital Management L.P. Under this
policy, outside trustees and directors are covered up to the
limits specified for any claim against them for acts
committed in their capacities as trustee or director. A pro
rata share of the premium for this coverage is charged to
each investment company and to the Adviser.

Item 26. Business and Other Connections of Investment Adviser.

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

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

Item 27. Principal Underwriters

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

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Disciplined Value Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Health Care Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Institutional Funds, Inc.
Alliance Institutional Reserves, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.

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Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income
Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios

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

POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT

Michael J. Laughlin Director and Chairman

John D. Carifa Director President,
Director/Trustee

Robert L. Errico Director and President

Geoffrey L. Hyde Director and Senior Vice
President

Dave H. Williams Director

David Conine Executive Vice President

Richard K. Saccullo Executive Vice President

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

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Richard A. Davies Senior Vice President
Managing Director

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

Anne S. Drennan Senior Vice President &
Treasurer

Benji A. Baer Senior Vice President

John R. Bonczek Senior Vice President

Karen J. Bullot Senior Vice President

John R. Carl Senior Vice President

James S. Comforti Senior Vice President

James L. Cronin Senior Vice President

Byron M. Davis Senior Vice President

Mark J. Dunbar Senior Vice President

Donald N. Fritts Senior Vice President

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

Bradley F. Hanson Senior Vice President

George H. Keith Senior Vice President

Richard E. Khaleel Senior Vice President

Stephen R. Laut Senior Vice President

Susan L. Matteson-King Senior Vice President

Daniel D. McGinley Senior Vice President

Antonios G. Poleondakis Senior Vice President

Robert E. Powers Senior Vice President

Domenick Pugliese Senior Vice President Assistant
and Assistant General Secretary/
Counsel Assistant Clerk

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<PAGE>

Kevin A. Rowell Senior Vice President

John P. Schmidt Senior Vice President

Raymond S. Sclafani Senior Vice President

Gregory K. Shannahan Senior Vice President

Scott C. Sipple Senior Vice President

Joseph F. Sumanski Senior Vice President

Peter J. Szabo Senior Vice President

William C. White Senior Vice President

Richard A. Winge Senior Vice President

Emilie D. Wrapp Senior Vice President and
Assistant General Counsel

Gerard J. Friscia Vice President &
Controller

Ricardo Arreola Vice President

Kenneth F. Barkoff Vice President

Adam J. Barnett Vice President

Charles M. Barrett Vice President

Matthew F. Beaudry Vice President

Leo Benitez Vice President

Gregory P. Best Vice President

Dale E. Boyd Vice President

Robert F. Brendli Vice President

Christopher L. Butts Vice President

Thomas C. Callahan Vice President

Kevin T. Cannon Vice President

John M. Capeci Vice President

John P. Chase Vice President

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<PAGE>

Doris T. Ciliberti Vice President

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Russell R. Corby Vice President

John W. Cronin Vice President

Robert J. Cruz Vice President

Richard W. Dabney Vice President

Daniel J. Deckman Vice President

Sherry V. Delaney Vice President

Richard P. Dyson Vice President

John C. Endahl Vice President

John E. English Vice President

Sohaila S. Farsheed Vice President

Daniel J. Frank Vice President

Shawn C. Gage Vice President

Joseph C. Gallagher Vice President

Michael J. Germain Vice President

Mark D. Gersten Vice President Treasurer and
Chief Financial
Officer

Hyman Glasman Vice President

John Grambone Vice President

Charles M. Greenberg Vice President

Alan Halfenger Vice President

William B. Hanigan Vice President

Michael S. Hart Vice President

Scott F. Heyer Vice President

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<PAGE>

Timothy A. Hill Vice President

Brian R. Hoegee Vice President

George R. Hrabovsky Vice President

Michael J. Hutten Vice President

Scott Hutton Vice President

Oscar J. Isoba Vice President

Richard D. Keppler Vice President

Richard D. Kozlowski Vice President

Daniel W. Krause Vice President

Donna M. Lamback Vice President

P. Dean Lampe Vice President

Henry Michael Lesmeister Vice President

Eric L. Levinson Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Michael F. Mahoney Vice President

Kathryn Austin Masters Vice President

Shawn P. McClain Vice President

David L. McGuire Vice President

Jeffrey P. Mellas Vice President

Michael V. Miller Vice President

Thomas F. Monnerat Vice President

Timothy S. Mulloy Vice President

Joanna D. Murray Vice President

Michael F. Nash, Jr. Vice President

Timothy H. Nasworthy Vice President

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<PAGE>

Nicole Nolan-Koester Vice President

Daniel A. Notto Vice President

Peter J. O'Brien Vice President

John C. O'Connell Vice President

John J. O'Connor Vice President

Daniel P. O'Donnell Vice President

Richard J. Olszewski Vice President

Catherine N. Peterson Vice President

Jeffrey R. Petersen Vice President

James J. Posch Vice President

Bruce W. Reitz Vice President

Jeffrey B. Rood Vice President

Karen C. Satterberg Vice President

Robert C. Schultz Vice President

Richard J. Sidell Vice President

Clara Sierra Vice President

Teris A. Sinclair Vice President

Jeffrey C. Smith Vice President

David A. Solon Vice President

Martine H. Stansbery, Jr. Vice President

Eileen Stauber Vice President

Michael J. Tobin Vice President

Joseph T. Tocyloski Vice President

Benjamin H. Travers Vice President

David R. Turnbough Vice President

Andrew B. Vaughey Vice President

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<PAGE>

Wayne W. Wagner Vice President

Mark E. Westmoreland Vice President

Paul C. Wharf Vice President

Stephen P. Wood Vice President

Keith A. Yoho Vice President

Michael W. Alexander Assistant Vice President

Richard J. Appaluccio Assistant Vice President

Paul G. Bishop Assistant Vice President

Mark S. Burns Assistant Vice President

Maria L. Carreras Assistant Vice President

Judith A. Chin Assistant Vice President

Jorge Ciprian Assistant Vice President

William P. Condon Assistant Vice President

Jean A. Coomber Assistant Vice President

Dorsey Davidge Assistant Vice President

Ralph A. DiMeglio Assistant Vice President

Faith C. Deutsch Assistant Vice President

Timothy J. Donegan Assistant Vice President

Joan Eilbott Assistant Vice President

Adam E. Engelhardt Assistant Vice President

Michael J. Eustic Assistant Vice President

Michele Grossman Assistant Vice President

Arthur F. Hoyt, Jr. Assistant Vice President

David A. Hunt Assistant Vice President

Theresa Iosca Assistant Vice President

Erik A. Jorgensen Assistant Vice President

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<PAGE>

Eric G. Kalender Assistant Vice President

Elizabeth E. Keefe Assistant Vice President

Edward W. Kelly Assistant Vice President

Victor Kopelakis Assistant Vice President

Jeffrey M. Kusterer Assistant Vice President

Alexandra C. Landau Assistant Vice President

Laurel E. Lindner Assistant Vice President

Evamarie C. Lombardo Assistant Vice President

Amanda C. McNichol Assistant Vice President

Richard F. Meier Assistant Vice President

Charles B. Nanick Assistant Vice President

Alex E. Pady Assistant Vice President

Raymond E. Parker Assistant Vice President

Wandra M. Perry-Hartsfield Assistant Vice President

Rizwan A. Raja Assistant Vice President

Carol H. Rappa Assistant Vice President

Brendan J. Reynolds Assistant Vice President

James A. Rie Assistant Vice President

Lauryn A. Rivello Assistant Vice President

Christina Santiago Assistant Vice Assistant Vice
President and Counsel President and
and Counsel Counsel

Nancy D. Testa Assistant Vice President

Margaret M. Tompkins Assistant Vice President

Marie R. Vogel Assistant Vice President

Nina C. Wilkinson Assistant Vice President

Wesley S. Williams Assistant Vice President

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Matthew Witschel Assistant Vice President

Mark R. Manley Assistant Secretary

Item 28. Location of Accounts and Records.

The accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of
1940 and the Rules thereunder are maintained as follows:
journals, ledgers, securities records and other original
records are maintained principally at the offices of Alliance
Fund Services, Inc., 500 Plaza Drive, Secaucus, N.J. 07094,
and at the offices of State Street Bank and Trust Company,
the Registrant's Custodian, 225 Franklin Street, Boston,
Massachusetts 02110. All other records so required to be
maintained are maintained at the offices of Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New
York 10105.

Item 29. Management Services.

Not applicable.

Item 30. Undertakings.

The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
report to Shareholders, upon request and without charge.

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

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SIGNATURES

Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant has
duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and the State of New York, on
the 29th day of November, 2000.

ALLIANCE GROWTH AND INCOME FUND, INC.

By /s/ John D. Carifa
_________________________________
John D. Carifa
Chairman and President

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

SIGNATURE TITLE DATE

(1) Principal Executive
Officer

/s/John D. Carifa Chairman
__________________________ and President November 29, 2000
John D. Carifa

(2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer
__________________________ November 29, 2000
Mark D. Gersten

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(3) All of the Directors

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

By /s/ Edmund P. Bergan, Jr.
________________________ November 29, 2000
(Attorney-in-fact)
Edmund P. Bergan, Jr.

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Index to Exhibits

Exhibit No. Description of Exhibits Page

C-27
00250050.AZ2