ALLIANCE INTERNATIONAL FUND INC, 485APOS, 1998-11-27

ALLIANCE INTERNATIONAL FUND INC
485APOS, 1998-11-27

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As filed with the Securities and Exchange
Commission on November 27, 1998

File No. 2-70428
811-3130

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. 31 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 26 X

Alliance International Fund
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York l0105
(Address of Principal Executive Office) (Zip Code)

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

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

Copies of communications to:
Thomas G. MacDonald
Seward & Kissel
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)
60 days after filing pursuant to paragraph (a)(1)
X on February 1, 1999 pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)

<PAGE>

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.

Registrant has registered an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant filed a notice pursuant to such
Rule for its fiscal year ended June 30, 1998 on August 31,
1998.

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 404(c))

N-1A Item No. Location in Prospectuses
(Caption)
PART A

Item 1. Front and Back Cover Pages..........Cover Pages

Item 2. Risk/Return Summary:
Investments, Risks, and
Performance.........................Risk/Return
Summary

Item 3. Risk/Return Summary:
Fee Table...........................Risk/Return
Summary

Item 4. Investment Objectives,
Principal Investment Strategies,
And Related Risks...................Other
Information
About the
Fund's
Objectives,
Strategies, and
Risks

Item 5. Management's Discussion of
Fund Performance....................Not Applicable

Item 6. Management, Organization,
And Capital Structure...............Management of
the Fund

Item 7. Shareholder Information.............Purchase and
Sale of Shares

Item 8. Distribution Arrangements...........Distribution
Arrangements

Item 9. Financial Highlights
Information.........................Financial
Highlights

<PAGE>

PART B Location in Statements
Of Additional Information
(Caption)

Item 10. Cover Page and
Table of Contents...................Cover Page

Item 11. Fund History........................Management of
the Fund;
General
Information

Item 12. Description of the Fund And
Its Investments and Risks...........Investment
Objectives and
Policies;
Investment
Restrictions

Item 13. Management of the Fund..............Management of
the Fund

Item 14. Control Persons and Principal
Holders of Securities ..............Management of
the Fund

Item 15. Investment Advisory and Other
Services............................Management of
the Fund

Item 16. Brokerage Allocation and
Other Practices.....................General
Information

Item 17. Capital Stock and Other
Securities..........................Daily
Dividends -
Determination
of Net Asset
Value; General
Information

Item 18. Purchase, Redemption and Pricing
of Shares...........................Purchase and
Redemption of
Shares; Daily
Dividends -
Determination
of Net Asset
Value

<PAGE>

Item 19. Taxation of the Fund................Taxes

Item 20. Underwriters........................General
Information

Item 21. Calculation of Performance Data.....General
Information

Item 22. Financial Statements................Financial
Statements

<PAGE>

THE ALLIANCE STOCK FUNDS

PROSPECTUS

FEBRUARY 1, 1999

DOMESTIC STOCK FUNDS

-ALLIANCE PREMIER GROWTH FUND
-ALLIANCE GROWTH FUND
-ALLIANCE TECHNOLOGY FUND
-ALLIANCE QUASAR FUND
-THE ALLIANCE FUND

TOTAL RETURN FUNDS

-ALLIANCE GROWTH AND INCOME FUND
-ALLIANCE BALANCED SHARES
-ALLIANCE UTILITY INCOME FUND
-ALLIANCE REAL ESTATE INVESTMENT FUND

GLOBAL STOCK FUNDS

-ALLIANCE NEW EUROPE FUND
-ALLIANCE WORLDWIDE PRIVATIZATION FUND
-ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
-ALLIANCE GLOBAL SMALL CAP FUND
-ALLIANCE INTERNATIONAL FUND
-ALLIANCE GREATER CHINA '97 FUND
-ALLIANCE ALL-ASIA INVESTMENT FUND
-ALLIANCE GLOBAL ENVIRONMENT FUND

The Alliance Stock Funds provide a broad selection of
investment alternatives to investors seeking capital
growth or high total return.

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

<PAGE>

TABLE OF CONTENTS

PAGE

RISK/RETURN SUMMARY.....................................
Domestic Stock Funds................................
Total Return Fund...................................
Global Stock Funds..................................
Summary of Principal Risks..........................
Principal Risks by Fund.............................

EXPENSE INFORMATION.....................................

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

DESCRIPTION OF THE FUNDS................................
.....Investment Objectives and Policies.............

Description of Investment Practices.................
Additional Risk Considerations......................

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

PURCHASE AND SALE OF SHARES.............................
How The Fund Values Its Shares......................
How To Buy Shares...................................
How to Exchange Shares..............................
How To Sell Shares..................................
How To Sell Shares..................................

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

DISTRIBUTION ARRANGEMENT................................

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

FINANCIAL HIGHLIGHTS....................................

<PAGE>

RISK/RETURN SUMMARY

The following is a summary of certain key information about the
Alliance Stock Funds. You will find additional information about
each Fund including a detailed description of the risks of an
investment in each Fund after this summary.

The Funds' 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. Since 1971,
Alliance has earned a reputation as a leader in the investment
world with over $[ ] billion in assets under management as of
December 31, 1998. Alliance provides investment management
services to employee benefit plans for __ of the FORTUNE 100
companies.

The Risk/Return Summary describes the Funds' objectives,
principal investment strategies, risks, and fees. More detailed
descriptions of the Funds can be found further back in the
Prospectus. Please be sure to read the more complete
descriptions of the Funds following this summary, including the
risks associated with investing in the Funds, BEFORE you invest.
Each of the Funds also may at times use certain types of
investment derivatives such as options, futures, forwards and
swaps. The use of these techniques includes special risks that
are discussed in this Prospectus.

The Summary includes a table showing the Fund's average annual
returns and a bar chart showing each Fund's annual returns. The
table and bar chart provide an indication of the historical risk
of an investment in each Fund by showing:

-- how the Fund's average annual returns for one, five and
10 years (or life of the Fund) compare to those of a
broad based securities market index; and

-- changes in the Fund's performance from year to year over
10 years or, if shorter, the life of the Fund.

A Fund's past performance, of course, does not necessarily
indicate how it will perform in the future.

Other important things for you to note:

-- You may gain or lose money by investing in the Funds.

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

<PAGE>

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investments in equity
securities of a limited number of large, carefully
selected, high-quality U.S. companies that Alliance
believes are likely to achieve superior earnings growth.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of U.S. companies. In
contrast to most equity funds, the Fund focuses on a
relatively small number of intensively researched
companies. Alliance selects the Fund's investments from
a research universe of more than 600 companies that have
strong management, superior industry positions,
excellent balance sheets, and superior earnings growth
prospects.

Normally, the Fund invests in about 40-50 companies,
with the 25 most highly regarded of these companies
usually constituting approximately 70% of the Fund's net
assets. During market declines, while adding to
positions in favored stocks, the Fund becomes somewhat
more aggressive, gradually reducing the number of
companies represented in its portfolio. Conversely, in
rising markets, while reducing or eliminating fully-
valued positions, the Fund becomes somewhat more
conservative, gradually increasing the number of
companies represented in its portfolio. Through this
approach, Alliance seeks to gain positive returns in
good markets while providing some measure of protection
in poor markets. The Fund also may invest up to 20% of
its net assets in convertible securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index

<PAGE>

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Premier Growth Fund from 1992 through 1998:]

YEAR ANNUAL RETURN

1992* 9.29%
1993 9.98%
1994 -5.80%
1995 46.87%
1996 24.14%
1997 32.67%
1998

* Cumulative return since inception (9/28/92).

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

Best Quarter was: up ____%, ________ quarter, 19__
Worst Quarter was: down ____%, _______quarter, 19__

ALLIANCE GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital. Current income is incidental to the
Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of companies with
favorable earnings outlooks and whose long-term growth
rates are expected to exceed that of the U.S. economy
over time. The Fund emphasizes investments in large-
and mid-cap companies. The Fund also may invest up to
25% of its total assets in lower rated fixed-income
securities and convertible bonds and generally up to 15%
in foreign securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %*
Class B % % %
Class C % % N/A
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Growth Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -0.22%
1991 63.61%
1992 10.67%
1993 28.99%
1994 -1.15%
1995 29.49%
1996 23.20%
1997 27.09%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE TECHNOLOGY FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation. Current income is
incidental to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of companies expected to benefit
from technological advances and improvements (i.e.,
companies that use technology extensively in the
development of new or improved products or processes).

<PAGE>

Within this framework, the Fund may invest in any
company and industry and in any type of security with
potential for capital appreciation. It invests in
well-known, established companies or in new or
unseasoned companies. The Fund also may invest in debt
securities and up to 10% of its total assets in foreign
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Technology Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 5.99%
1990 -3.08%
1991 54.24%
1992 15.60%
1993 21.63%
1994 28.50%
1995 45.80%
1996 19.41%
1997 4.54%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE QUASAR FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation by pursuing aggressive
investment policies. Current income is incidental to
the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of any company and
industry and in any type of security with potential for
capital appreciation. The Fund generally invests in a
widely-diversified portfolio spread among many
industries that offer the possibility of above-average
earnings growth. The Fund invests in well-known and
established companies and in new and unseasoned
companies. When selecting securities, Alliance
considers the economic and political outlook, the values
of specific securities relative to other investments,
trends in the determinants of corporate profits, and
management capabilities and practices. The Fund also
may invest in non-convertible bonds, preferred stocks,
and foreign securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
Russell 2000 Index

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.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Quasar Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 28.20%
1990 -23.44%
1991 34.27%
1992 2.81%
1993 16.16%
1994 -7.27%
1995 47.64%
1996 32.62%
1997 17.24%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital and income primarily through
investments in common stocks.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund normally
invests substantially all of its assets in high-quality
common stocks that the Alliance expects to increase in
value. The Fund may invest in a broad range of
companies, from large to small, but tends to emphasize
attractive opportunities in medium-capitalization or
"mid-cap" companies. While the Fund's diversified and
high-quality investments cannot prevent fluctuations in
market values, they tend to limit investment risk and
contribute to achieving the Fund's objectives. The Fund
also can invest in convertible securities, U.S.
Government securities, and foreign securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of The Alliance Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 23.42%
1990 -4.36%
1991 33.91%
1992 14.70%
1993 14.26%
1994 -2.51%
1995 34.84%
1996 17.54%
1997 36.01%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

TOTAL RETURN FUNDS

The Total Return Funds offer investors both growth of capital and
current income through a range of investment alternatives.

ALLIANCE GROWTH & INCOME FUND

-- OBJECTIVE: The Fund's investment objective is capital
appreciation and income through investments in dividend-
paying common stocks of good quality, although the Fund

<PAGE>

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.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Growth And Income Fund from 1989 through
1998:]

YEAR ANNUAL RETURN

1989 25.56%
1990 -1.70%
1991 27.08%
1992 4.52%
1993 9.96%
1994 -4.20%
1995 37.86%
1996 24.13%
1997 28.86%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE BALANCED SHARES

-- OBJECTIVE: The Fund's investment objective is high
return by investing in a combination of equity and debt
securities.

-- PRINCIPAL INVESTMENT STRATEGIES: The percentage of the
Fund's assets invested in each type of security (equity
and fixed income) will vary, but at least 25% of the
Fund's total assets will be invested in fixed-income
securities. The Fund invests in U.S. Government
Securities, bonds, senior debt securities, preferred,
and common stocks. The Fund's investments in each type
of security depends on current economic conditions and
market outlooks. The Fund also may invest up to 15% of
its assets in foreign equity and fixed income
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index
Lehman Brothers
Government/Corporate
Bond Index
Salomon Brothers 1-Year
Treasury Bond Index

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.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Balanced Shares from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 14.13%
1990 -2.20%
1991 20.47%
1992 6.81%
1993 9.93%
1994 -5.79%
1995 26.64%
1996 9.36%
1997 27.13%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE UTILITY INCOME FUND

-- OBJECTIVE: The Fund's investment objective is current
income and capital appreciation through investments in
equity and fixed-income securities of companies in the
utilities industry.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of utility companies in the
electric, telecommunications, gas, and water utility
industries. The Fund may invest in both U.S. and
foreign utility companies, although the Fund will limit
its investments in issuers in any one foreign country to
no more than 15% of its assets. The Fund may invest up
to 35% of its net assets in lower-rated securities and
up to 30% of its net assets in convertible securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % N/A
Class B % % N/A
Class C % % N/A
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Utility Income Fund from 1993 through 1998:]

YEAR ANNUAL RETURN

1993* 4.42%
1994 -10.94%
1995 22.93%
1996 8.28%
1997 30.65%
1998

* Cumulative return since inception (10/18/93).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE REAL ESTATE INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
principally through investing in companies in equity
securities of companies that are primarily engaged in or
related to the real estate industry.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of real estate investment
trusts or "REITs" and other real estate industry

<PAGE>

companies. The Fund invests in real estate companies
that Alliance believes have strong property fundamentals
and management teams. The Fund seeks to invest in real
estate companies whose underlying portfolios are
diversified geographically and by property type. The
Fund may invest up to 35% of its total assets in
mortgage-backed securities, which are securities that
directly or indirectly represent participations in or
are collateralized by and payable from, mortgage loans
secured by real property.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A %
Class B %
Class C %
S&P 500 Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Real Estate Investment Fund from 1996 through
1998:]

YEAR ANNUAL RETURN

1996* 20.29%
1997 22.98%
1998

* Cumulative return since inception (10/1/96).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors seeking long-term capital
appreciation a range of alternative approaches to investing in
foreign securities.

ALLIANCE NEW EUROPE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investments primarily in
the equity securities of companies based in Europe.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of European companies.
The Fund diversifies its investments among a number of
European countries and normally invests in companies
based in at least three of the countries, although it
may invest 25% or more or its assets in a single
country. The Fund may invest up to 35% of its total
assets in high-quality U.S. dollar or foreign currency
denominated fixed income securities issued by European
governmental entities, multinational companies, or
supranational organizations. At December 31, 1998, the
Fund had approximately 20% its assets invested in
securities of United Kingdom issuers.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

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.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance New Europe Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -11.92%
1991 3.31%
1992 -0.53%
1993 34.56%
1994 4.64%
1995 18.63%
1996 20.58%
1997 16.83%
1998

* Cumulative return since inception (4/2/90).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE WORLDWIDE PRIVATIZATION FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of companies that are
undergoing, or have undergone, privatization, although
normally the Fund will invest significantly more of its
assets in these securities. The Fund also invests in
securities of companies that will benefit from
privatizations. The Fund takes advantage of investment
opportunities, historically inaccessible to U.S.
individual investors, that result from the privatization
of state enterprises in both established and developing
economies. Because privatizations are integral to a
country's economic restructuring, securities sold in
initial public offerings often are attractively priced
to secure the issuer's transition to private sector
ownership. In addition, these enterprises often
dominate their local markets and have the potential for
significant managerial and operational efficiency gains.

The Fund diversifies its investments among a number of
countries and normally invests in issuers based in four,
and usually considerably more, countries. The Fund may

<PAGE>

invest up to 30% of its assets in any one of France,
Germany, Great Britain, Italy, and Japan and may invest
all of its assets in a single world region. The fund
also may invest up to 35% of its total assets in debt
securities and convertible debt securities of privatized
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI EAFE Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Worldwide Privatization Fund from 1994 through
1998:]

YEAR ANNUAL RETURN

1994* -0.20%
1995 4.91%
1996 23.14%
1997 13.18%
1998

* Cumulative return since inception (6/2/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investments in equity
securities of a limited number of carefully selected
non-U.S. companies that are judged likely to achieve
superior earnings growth. Current income is incidental
to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of comparatively large,
high-quality non-U.S. companies. The Fund invests in at
least four, and usually considerably more, countries.
Normally, the Fund invests no more than 15% of its total
assets in any one foreign country, but may invest up to
25% of its total assets in each of Canada, France,
Germany, Italy, Japan, The Netherlands, Switzerland, and
the United Kingdom. In contrast to more typical
international equity funds, the Fund focuses on a
relatively small number of intensively researched
companies. Alliance selects the Fund's investments from
a research universe of approximately 900 companies.

Normally, the Fund invests in about 60 companies, with
the 30 most highly regarded of these companies usually
constituting approximately 70% of the Fund's net assets.
The Fund invests in companies with market values in the
range, or in excess, of the mid-range of the EAFE index
(currently approximately $2.6 billion). Alliance may
take advantage of market volatility to adjust the Fund's
portfolio positions. To the extent consistent with
local market liquidity considerations, the Fund strives
to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on
weakness and to sell or reduce overpriced holdings. The
Fund invests primarily in equity securities and also may
invest in convertible securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

There is no bar chart for the Fund because it has not
completed a full calendar year of operations. The performance
information below is for the first six months of the Fund's
operations.
PERFORMANCE TABLE

6 MONTHS

Class A
Class B
Class C
MSCI World Index

ALLIANCE GLOBAL SMALL CAP FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investment in a global
portfolio of the equity securities of selected companies
with relatively small market capitalizations.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of global companies, both
domestic and foreign with relatively small market
capitalizations. The Fund's investments emphasize
companies with a size that are in the smallest 20% of
the U.S. stock market (or less than approximately $1.5
billion). Although these companies are small by U.S.
standards, they may be among the largest companies in
their own countries. The Fund may invest up to 35% of
its total assets in securities of companies whose market
capitalizations exceed the Fund's size standard. The
Fund invests in at least three countries including the
U.S.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

<PAGE>

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Global Small Cap Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 24.60%
1990 -24.89%
1991 25.29%
1992 -4.89%
1993 20.04%
1994 -4.55%
1995 27.18%
1996 19.37%
1997 8.08%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
through diversified investments in non-U.S. companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of established non-U.S.
countries, companies participating in foreign economies
with prospects for growth, including U.S. companies
having their principal activities and interests outside
the U.S., and foreign government securities. The Fund
diversifies its investments broadly among countries and
normally invests in at least three foreign countries,
although it may invest a substantial portion of its
assets in one or more foreign countries.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance International Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 29.62%
1990 -20.95%
1991 7.72%
1992 -5.86%
1993 27.51%
1994 5.68%
1995 10.10%
1996 7.20%
1997 1.41%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GREATER CHINA '97 FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of at least 80%
of its total assets in equity securities of Greater
China companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in
equity securities of Greater China companies, which are
companies in China, Hong Kong, and Taiwan. Of these

<PAGE>

countries, the Fund expects to invest a significant
portion of its assets, which may be greater than 50%, in
Hong Kong companies and may invest all of its assets in
Hong Kong companies or companies of either of the other
Greater China countries. The Fund may also invest in
convertible securities and equity-linked debt securities
issued or guaranteed by Greater China companies or
Greater China Governments, their agencies, or
instrumentalities. As of December 31, 1998 the Fund
had approximately ___% of its assets invested in
securities of Hong Kong companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A
Class B
Class C
MSCI All Country Asia
Pacific

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Greater China '97 Fund for 1998:]

YEAR ANNUAL RETURN

1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE ALL-ASIA INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

<PAGE>

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of varied types of companies
based in Asia and in the Pacific region. The Fund
invests in equity securities, preferred stocks, and
equity-linked debt securities issues by Asian companies
and may invest more than 50% of its total assets in
equity securities of Japanese issuers. The Fund also
may invest up to 35% of its total assets in debt
securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities,
and may invest up to 25% of its net assets in
convertible securities. At December 31, 1998, the Fund
had approximately ___% of its total assets invested in
securities of Japanese companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI All Country Asia
Pacific Index

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.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance All-Asia Investment Fund from 1994 through
1998:]

YEAR ANNUAL RETURN

1994* 0.10%
1995 10.21%
1996 4.58%
1997 -35.10%
1998

* Cumulative return since inception (11/28/94).

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will, however, fluctuate over

<PAGE>

shorter periods. For example, during the period shown in the bar
chart, the Fund's:

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GLOBAL ENVIRONMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of substantially
all of its assets in equity securities of companies in
the environmental sector.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in environmental companies, which are
companies whose principal business involves the sale of
environmental protection systems or services. The Fund
also invests in companies whose principal business lies
outside the environmental sector but anticipate
environmental regulations or consumer preferences
through the development of new products, services, or
services that would contribute to a cleaner and
healthier environment. The Fund will invest
substantially all of its assets in these two types of
companies. The Fund invests in securities of companies
in at least three, and normally considerably more,
countries. At December 31, 1998, the Fund had
approximately 82% invested in equity securities of U.S.
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % N/A N/A
Class C N/A N/A N/A
S&P 500 Index

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.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Global Environment Fund from 1990 through
1998:]

YEAR ANNUAL RETURN

1990* -5.48%
1991 6.17%
1992 -15.33%
1993 -0.44%
1994 -2.12%
1995 19.30%
1996 31.60%
1997 18.73%
1998

* Cumulative return since inception (6/1/90).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

SUMMARY OF PRINCIPAL RISKS

The value of an investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values.
In this summary, we describe the principal risks that may affect
a Fund's portfolio as a whole. These risks and the Funds subject
to the risks appear in a chart at the end of the section. All
Funds could be subject to additional principal risks because the
types of investments made by each Fund can change over time.
This Prospectus has additional descriptions of investments that
appear in bold type in the discussions under "Additional
Investment Practices" or "Risk Considerations." These sections
also include more information about the Funds, their investments,
and related risks.

-- MARKET RISK This is the risk that the value of a Fund's
investments will fluctuate as the stock or bond markets
fluctuate and that prices overall will decline over
short or longer-term periods. All of the Alliance Stock
Funds are subject to market risk. Market risk also can
apply to a particular industry sector and type of issuer
and includes risks associated with investing substantial
amounts in companies located in specific countries or
geographic regions. Factors affecting that sector,
issuer, or region could have a major effect on the value

<PAGE>

of a Fund's investments. While any Fund is subject to
specific market risk to the extent it invests in a
specific market, Alliance Stock Funds that are
particularly subject to this risk are:

- PARTICULAR INDUSTRIES: Technology Fund, Global
Environment Fund, Utility Income Fund, and Real
Estate Investment.

- TYPES OF ISSUERS: Alliance Fund and Growth Fund
(medium capitalization or mid-cap companies),
Technology Fund (companies using new technology),
Worldwide Privatization Fund (companies converting
to private sector ownership), and Global Small Cap
Fund (smaller, less seasoned companies or small cap
companies).

- COUNTRIES OR GEOGRAPHIC REGIONS: International
Fund, Worldwide Privatization Fund, New Europe
Fund, All-Asia Investment Fund, and Greater China
'97 Fund.

-- INTEREST RATE RISK This is the risk that changes in
interest rates will affect the value of a Fund's
investments in income-producing or fixed-income or debt
securities. Increases in interest rates may cause the
value of a Fund's investments to decline. Interest rate
risk is applicable to Funds that invest in fixed income
securities and is greater for those Alliance Funds that
invest a substantial portion of their assets in fixed-
income or debt securities such as Balanced Shares,
Utility Income Fund, and Growth and Income Fund.

Interest rate risk is greater for those Funds that
invest in lower-rated securities or comparable unrated
securities such as Utility Income Fund. Real Estate
Investment Trust, which invests in mortgage-backed
securities, is more susceptible to changes in interest
rates. Real Estate Investment Trust also has more
exposure to interest rate risk because it invests in
real estate industry companies.

-- CREDIT RISK This is the risk that the issuer of a
security 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
risk is applicable to Funds that invest in fixed-income
securities and is greater for those Alliance Stock Funds
that invest a substantial portion of their assets in
lower-rated securities, such as Utility Income Fund.

<PAGE>

-- FOREIGN RISK This is the risk of investments in issuers
located in foreign countries. All Alliance Stock Funds
with foreign investments are subject to this risk,
including, in particular, International Fund, Worldwide
Privatization Fund, New Europe Fund, All-Asia Investment
Fund, Greater China '97 Fund, Global Small Cap Fund, and
Global Environment Fund. 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
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 Fund's 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 Fund's
investments. Funds with foreign investments are subject
to this risk, including, in particular, International
Fund, Worldwide Privatization Fund, New Europe Fund,
All-Asia Investment Fund, Greater China '97 Fund, Global
Small Cap Fund, and Global Environment Fund.

-- MANAGEMENT RISK Each Alliance Stock 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 Funds, but there is no
guarantee that its techniques will produce the intended
result.

-- FOCUSED PORTFOLIO RISK Funds, such as Premium Growth
and International Premium Growth, that invest in a
limited number of companies may have more risk because
changes in the value of a single security may have a
more significant effect, either negative or positive, on
the Fund's net asset value. Similarly, Greater China
'97 Fund may have more risk because it is "non-
diversified" meaning that it invests its assets in a

<PAGE>

smaller number of companies than many other
international funds.

-- ALLOCATION RISK Balanced Shares has the risk that
allocation of its investments between equity and debt
securities may have a more significant effect on the
Fund's net asset value when one of these asset classes
is performing more poorly than the other.

<PAGE>

PRINCIPAL RISKS BY FUND

The following chart summarizes the Principal Risks of each Fund.
Risks not marked for a particular Fund may, however, still apply
to some extent to that fund at various times.

INTEREST FOCUSED ALLO-
MARKET RATE CREDIT FOREIGN CURRENCY MANAGEMENT PORTFOLIO CATION
FUND RISK RISK RISK RISK RISK RISK RISK RISK

ALLIANCE
FUND X X

ALLIANCE
GROWTH
FUND X X

ALLIANCE
PREMIER
GROWTH
FUND X X X

ALLIANCE
TECHNOLOGY
FUND X X

ALLIANCE
QUASAR
FUND X X

ALLIANCE
INTERNATIONAL
FUND X X X X

ALLIANCE
INTERNATIONAL
PREMIER
GROWTH
FUND X X X X X

ALLIANCE
WORLDWIDE
PRIVATIZATION
FUND X X X X

ALLIANCE
NEW EUROPE
FUND X X X X

<PAGE>

ALLIANCE
ALL-ASIA
INVESTMENT
FUND X X X X

ALLIANCE
GREATER
CHINA
'97 FUND X X X X X

ALLIANCE
GLOBAL
SMALL CAP
FUND X X X X

ALLIANCE
GLOBAL
ENVIRONMENT
FUND X X X X

ALLIANCE
BALANCED
SHARES X X X X X

ALLIANCE
UTILITY
INCOME
FUND X X X X X X

ALLIANCE
GROWTH AND
INCOME
FUND X X X X X X

ALLIANCE
REAL ESTATE
INVESTMENT
FUND X X X

EXPENSE INFORMATION

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

<PAGE>

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)

CLASS A CLASS B CLASS C
SHARES SHARES SHARES

Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% None None

Maximum Deferred Sales Charge None 4.0% during 1.0% during
(Load) (as a percentage of the 1st the 1st
original purchase price year, year, 0%
or redemption proceeds, decreasing thereafter
whichever is lower) 1.0%
annually to
0% after the
4th year*

Exchange Fee None None None

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

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) AND EXAMPLE

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

<TABLE>
<CAPTION>
OPERATING EXPENSES EXAMPLES

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PREMIER GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.00% 1.00% 1.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .33% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

<PAGE>

GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .75% .75% .75% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

TECHNOLOGY CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.11% 1.11% 1.11% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

QUASAR CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.15% 1.15% 1.15% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .21% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

ALLIANCE FUND CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .70% .70% .70% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .19% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

GROWTH AND INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .51% .51% .51% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .21% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

BALANCED SHARES CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .63% .63% .63% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .24% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

<PAGE>

UTILITY INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 0.00% 0.00% 0.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

REAL ESTATE INVESTMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees % % % After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees % % % After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

NEW EUROPE CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.07% 1.07% 1.07% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

WORLDWIDE PRIVATIZATION CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.00% 1.00% 1.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

INTERNATIONAL PREMIER GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees % % % After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees % % % After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GLOBAL SMALL CAP CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

<PAGE>

INTERNATIONAL CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .92% .92% .92% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .17% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GREATER CHINA '97 CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

ALL-ASIA INVESTMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .75% .75% .75% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Administration Fees
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GLOBAL ENVIRONMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

<FN>
+ Assumes redemption at end of period.
++ Assumes no redemption at end of period.
(a) Reflects Alliance's waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating
expenses. The level of waiver or reimbursement may be
changed upon 60 days' notice to the Fund.
(b) Assumes Class B shares convert to Class A after eight years.
</TABLE>

<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.

DEPOSITARY RECEIPTS include American Depositary Receipts
("ADRS"), Global Depositary Receipts ("GDRS") and other types of
depositary receipts.

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 and include floating rate and variable rate
instruments.

FOREIGN GOVERNMENT SECURITIES are securities issued or
guaranteed, as to payment of principal and interest, by
governments, quasi-governmental entities, governmental agencies
or other governmental entities.

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 under the Securities Act.

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

TYPES OF COMPANIES

ASIAN COMPANY is an entity that (i) is organized under the laws
of an Asian country and conducts business in an Asian country,
(ii) derives 50% or more of its total revenues from business in
Asian countries, or (iii) issues equity or debt securities that
are traded principally on a stock exchange in an Asian country.

<PAGE>

ASIAN COUNTRIES are Australia, the Democratic Socialist Republic
of Sri Lanka, the Hong Kong Special Administrative Region of the
People's Republic of China (Hong Kong), the Islamic Republic of
Pakistan, Japan, the Kingdom of Thailand, Malaysia, Negara Brunei
Darussalam (Brunei), New Zealand, the People's Republic of China,
the People's Republic of Kampuchea (Cambodia), the Republic of
China (Taiwan), the Republic of India, the Republic of Indonesia,
the Republic of Korea (South Korea), the Republic of the
Philippines, the Republic of Singapore, the Socialist Republic of
Vietnam and the Union of Myanmar.

BENEFICIARY COMPANIES are Eligible Companies whose principal
businesses lie outside the environmental sector but nevertheless
anticipate environmental regulations or consumer preferences
through the development of new products, processes or services
that are intended to contribute to a cleaner and healthier
environment, such as companies that anticipate the demand for
plastic substitutes, aerosol substitutes, alternative fuels and
processes that generate less hazardous waste.

ELIGIBLE COMPANIES are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.

ENVIRONMENTAL COMPANIES are Eligible Companies that have a
principal business involving the sale of systems or services
intended to foster environmental protection, such as waste
treatment and disposal, remediation, air pollution control and
recycling.

GREATER CHINA COMPANY is an entity that (i) is organized under
the laws of a Greater China country and conducts business in a
Greater China country, (ii) derives 50% or more of its total
revenues from businesses in Greater China countries, or
(iii) issues equity or debt securities that are traded
principally on a stock exchange in a Greater China country. A
company of a particular Greater China country is a company that
meets any of these criteria with respect to that country.

GREATER CHINA COUNTRIES are the People's Republic of China
("China"), the Hong Kong Special Administrative Region of the
People's Republic of China ("Hong Kong") and the Republic of
China ("Taiwan").

NON-U.S. COMPANY is an entity that (i) is organized under the
laws of a foreign country and conducts business in a foreign
country, (ii) derives 50% or more of its total revenues from
business in foreign countries, or (iii) issues equity or debt
securities that are traded principally on a stock exchange in a
foreign country.

<PAGE>

RATING AGENCIES, RATED SECURITIES, AND INDEXES

DUFF & PHELPS is Duff & Phelps Credit Rating Co.

EAFE INDEX is Morgan Stanley Capital International Europe,
Australasia and Far East ("EAFE") Index.

FITCH is Fitch IBCA, Inc.

INVESTMENT GRADE SECURITIES are fixed-income securities rated Baa
and above by Moody's or B and above by S&P, Duff & Phelps or
Fitch, or determined by Alliance to be of equivalent quality.

LOWER-RATED SECURITIES are fixed-income securities rated Ba or
below by Moody's or BB or below by S&P, Duff & Phelps or Fitch,
or determined by Alliance to be of equivalent quality, and are
commonly referred to as "JUNK BONDS."

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

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.

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

S&P 500 INDEX is S&P's 500 Composite Stock Price Index, a widely
recognized unmanaged index of market activity.

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.

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DESCRIPTION OF THE FUNDS
_______________________________________________________________

This section of the Prospectus provides a more complete
description of the principal investment objectives, strategies,
and risks of the Alliance Stock Funds. Of course, there can be
no assurance that any Fund will achieve its investment objective.

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Please note that:

- -- Additional discussion of the Funds' investments, including
the risks of the investments, can be found in the discussion
under DESCRIPTION OF INVESTMENT PRACTICES following this
section.

- -- The description of the principal risks for a Fund may include
risks defined in the SUMMARY OF RISKS above. Additional
information about risks of investing in a Fund can be found
in the discussion under ADDITIONAL RISK CONSIDERATIONS.

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

- -- Except as noted, (i) the Funds' investment objectives are
"fundamental" and cannot be changed without shareholder vote,
and (ii) the Funds' investment policies are not fundamental
and thus can be changed without a shareholder vote.

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
the U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

Premier Growth Fund seeks long-term growth of capital by
investing predominantly in the equity securities of a limited
number of large, carefully selected, high-quality U.S. companies
that are judged likely to achieve superior earnings growth. As a
matter of fundamental policy, the Fund normally invests at least
85% of its total assets in the equity securities of U.S.
companies. A U.S. company is a company that is organized under
United States law, has its principal office in the United States
and issues equity securities that are traded principally in the
United States. Normally, about 40-50 companies will be
represented in the Fund's portfolio, with the 25 most highly
regarded of these companies usually constituting approximately
70% of the Fund's net assets. The Fund is thus atypical from most
equity mutual funds in its focus on a relatively small number of
intensively researched companies. The Fund is designed for those
seeking to accumulate capital over time with less volatility than
that associated with investment in smaller companies.

Alliance's investment strategy for the Fund emphasizes stock
selection and investment in the securities of a limited number of

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issuers. Alliance relies heavily upon the fundamental analysis
and research of its large internal research staff, which
generally follows a primary research universe of more than 600
companies that have strong management, superior industry
positions, excellent balance sheets and superior earnings growth
prospects. An emphasis is placed on identifying companies whose
substantially above average prospective earnings growth is not
fully reflected in current market valuations.

In managing the Fund, Alliance seeks to utilize market volatility
judiciously (assuming no change in company fundamentals),
striving to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on weakness
and to sell or reduce overpriced holdings. The Fund normally
remains nearly fully invested and does not take significant cash
positions for market timing purposes. During market declines,
while adding to positions in favored stocks, the Fund becomes
somewhat more aggressive, gradually reducing the number of
companies represented in its portfolio. Conversely, in rising
markets, while reducing or eliminating fully valued positions,
the Fund becomes somewhat more conservative, gradually increasing
the number of companies represented in its portfolio. Alliance
thus seeks to gain positive returns in good markets while
providing some measure of protection in poor markets.

Alliance expects the average market capitalization of companies
represented in the Fund's portfolio normally to be in the range,
or in excess, of the average market capitalization of companies
included in the S&P 500.

The Fund also may:

- -- invest up to 20% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
it;

- -- invest up to 5% of its net assets in rights or warrants;

- -- invest up to 15% of its total assets in securities of foreign
issuers whose common stocks are eligible for purchase by it;

- -- purchase and sell exchange-traded index options and stock
index futures contracts; and

- -- write covered exchange-traded call options on its securities
of up to 15% of its total assets, and purchase and sell
exchange-traded call and put options on common stocks written
by others of up to, for all options, 10% of its total assets.

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that

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changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GROWTH FUND

Alliance Growth Fund seeks long-term growth of capital. Current
income is only an incidental consideration. The Fund seeks to
achieve its objective by investing primarily in equity securities
of companies with favorable earnings outlooks, which have long-
term growth rates that are expected to exceed that of the U.S.
economy over time. The Fund's investment objective is not
fundamental.

The Fund also may invest up to 25% of its total assets in lower-
rated fixed-income and convertible bonds. The Fund generally
will not invest in securities rated at the time of purchase below
Caa- by Moody's and CCC- by S&P, Duff & Phelps or Fitch or in
securities judged by Alliance to be of comparable investment
quality. However, from time to time, the Fund may invest in
securities rated in the lowest grades (i.e., C by Moody's or D or
equivalent by S&P, Duff & Phelps or Fitch), or securities
Alliance judges to be of comparable investment quality, if there
are prospects for an upgrade or a favorable conversion into
equity securities. If the credit rating of a security held by
the Fund falls below its rating at the time of purchase (or
Alliance determines that the credit quality of the security has
deteriorated), the Fund may continue to hold the security if such
investment is considered appropriate under the circumstances.

The Fund also may:

- -- invest in zero-coupon and payment-in-kind bonds;

- -- invest in foreign securities although not generally in excess
of 15% of its total assets;

- -- buy or sell foreign currencies, options on foreign
currencies, foreign currency futures contracts (and related
options) and deal in forward foreign exchange contracts;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to 25% of its total
assets;

- -- purchase and sell securities on a forward commitment basis;

- -- buy and sell stock index futures contracts and options on
those contracts and on stock indices;

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- -- purchase and sell futures contracts and options on futures
and U.S. Treasury securities;

- -- write covered call and put options; and

- -- purchase and sell put and call options.

ALLIANCE TECHNOLOGY FUND

Alliance Technology Fund emphasizes growth of capital and invests
for capital appreciation. Current income is only an incidental
consideration. The Fund may seek income by writing listed call
options. The Fund invests primarily in securities of companies
expected to benefit from technological advances and improvements
(i.e., companies that use technology extensively in the
development of new or improved products or processes). The Fund
will normally have at least 80% of its assets invested in the
securities of these companies. The Fund normally will have
substantially all its assets invested in equity securities, but
it also invests in debt securities offering an opportunity for
price appreciation. The Fund will invest in listed and unlisted
securities, in U.S. securities and up to 10% of its total assets
in foreign securities.

The Fund's policy is to invest in any company and industry and in
any type of security with potential for capital appreciation. It
invests in well-known and established companies and in new and
unseasoned companies.

The Fund also may:

- -- write covered call options on its securities of up to 15% of
its total assets and purchase exchange-listed call and put
options, including exchange-traded index put options of up
to, for all options, 10% of its total assets;

- -- invest up to 10% of its total assets in warrants; and

- -- make loans of portfolio securities of up to 30% of its total
assets.

Because the Fund invests primarily in technology companies,
factors affecting those types of companies could have a
significant effect on the Fund's net asset value. In addition,
the Fund's investments in technology stocks, especially those of
smaller, less-seasoned companies, tend to be more volatile than
the overall market. The Fund's investments in debt and foreign
securities have credit risk and foreign risk.

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ALLIANCE QUASAR FUND

Alliance Quasar Fund seeks growth of capital by pursuing
aggressive investment policies. The Fund invests for capital
appreciation and only incidentally for current income. Selecting
securities based on the possibility of appreciation cannot
prevent loss in value. Moreover, because the Fund's investment
policies are aggressive, an investment in the Fund is risky and
investors who want assured income or preservation of capital
should not invest in the Fund.

The Fund invests in any company and industry and in any type of
security with potential for capital appreciation. It invests in
well-known and established companies and in new and unseasoned
companies. When selecting securities for the Fund, Alliance
considers the economic and political outlook, the values of
specific securities relative to other investments, trends in the
determinants of corporate profits and management capability and
practices.

The Fund invests principally in equity securities, but it also
invests to a limited degree in non-convertible bonds and
preferred stocks. The Fund invests in listed and unlisted U.S.
and foreign securities. The Fund periodically invests in special
situations, which occur when the securities of a company are
expected to appreciate due to a development particularly or
uniquely applicable to that company regardless of general
business conditions or movements of the market as a whole.

The Fund also may:

- -- make short sales of securities against the box but not more
than 15% of its net assets may be deposited on short sales;
and

- -- write covered call options of up to 15% of its total assets
and purchase and sell put and call options written by others
of up to, for all options, 10% of its total assets.

Investments in smaller companies may have more risk because they
tend to be more volatile than the overall stock market. The
Fund's investments in non-convertible bonds, preferred stocks,
and foreign stocks may have credit risk and foreign risk.

THE ALLIANCE FUND

The Alliance Fund seeks long-term growth of capital and income
primarily through investment in common stocks. The Fund normally
invests substantially all of its assets in common stocks that
Alliance believes will appreciate in value. The Fund also may
invest in other types of securities such as convertible

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securities, investment grade instruments, U.S. Government
securities and high quality, short-term obligations such as
repurchase agreements, bankers' acceptances and domestic
certificates of deposit, and may invest without limit in foreign
securities. The Fund generally does not effect portfolio
transactions in order to realize short-term trading profits or
exercise control.

The Fund also may:

- -- write exchange-traded covered call options on up to 25% of
its total assets;

- -- make secured loans of portfolio securities equal in value up
to 25% of its total assets to brokers, dealers and financial
institutions;

- -- enter into repurchase agreements of up to seven days'
duration with commercial banks, but only if those agreements
together with any restricted securities and any securities
which do not have readily available market quotations do not
exceed 10% of its net assets;

While the diversification and generally high quality of the
Fund's investments cannot prevent fluctuations in market values,
they tend to limit investment risk and contribute to achieving
the Fund's objective.

TOTAL RETURN FUNDS

The Total Return Funds provide a range of investment alternatives
to investors seeking both growth of capital and current income.

ALLIANCE GROWTH AND INCOME FUND

Alliance Growth and Income Fund seeks appreciation through
investments primarily in dividend-paying common stocks of good
quality. The Fund also may invest 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 also purchase and sell financial
forward and futures contracts and options on these securities for
hedging purposes.

<PAGE>

ALLIANCE BALANCED SHARES

Alliance Balanced Shares seeks a high return through a
combination of current income and capital appreciation. Although
the Funds investment objective is not fundamental, the Fund is a
"balanced" fund as a matter of fundamental policy. The Fund
invests in equity securities of high-quality, financially strong,
dividend-paying companies. Normally, the Fund's investments will
consist of about 60% in stocks, but stocks may make up to 75% of
its investments. The Fund will invest at least 25% of its total
assets in investment grade debt securities. These investments
may include short- and long-term debt securities, preferred
stocks, and convertible debt securities and convertible preferred
stocks to the extent that their values are attributable to their
fixed-income characteristics. Other than this restriction, the
percentage of the Fund's assets invested in each type of security
will vary.

The Fund invests in U.S. Government securities, bonds, senior
debt securities, and preferred and common stocks in such
proportions and of such type as Alliance deems best adapted to
the current economic and market outlooks. The Fund may invest up
to 15% of the value of its total assets in foreign equity and
fixed-income securities eligible for purchase by the Fund under
its investment policies described above.

The Fund also may:

- -- enter into contracts for the purchase or sale for future
delivery of foreign currencies;

- -- purchase and write put and call options on foreign currencies
and enter into forward foreign currency exchange contracts
for hedging purposes

- -- subject to market conditions, write covered call options
listed on a domestic exchange to realize income.

As a balanced fund, the Fund has the risk that the allocation of
its investments between equity and debt securities may have a
more significant effect on the Fund's net asset value when one on
these asset classes is performing more poorly than the other.

ALLIANCE UTILITY INCOME FUND

Alliance Utility Income Fund seeks current income and capital
appreciation by investing primarily in equity and fixed-income
securities of companies in the utilities industry. As a
fundamental policy, the Fund normally invests at least 65% of its
total assets in securities of companies in the utilities
industry.

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The utilities industry consists of companies engaged in:

- -- the manufacture, production, generation, provision,
transmission, sale and distribution of gas and electric
energy, and communications equipment and services, including
telephone, telegraph, satellite, microwave, and other
companies providing communication facilities for the public;
or

- -- the provision of other utility or utility-related goods and
services, including, but not limited to, entities engaged in
water provision, cogeneration, waste disposal system
provision, solid waste electric generation, independent power
producers, and non-utility generators.

The Fund seeks to take advantage of the characteristics and
historical performance of securities of utility companies, many
of which pay regular dividends and increase their common stock
dividends over time. The Fund considers a company to be in the
utilities industry if, during the most recent twelve-month
period, at least 50% of the company's gross revenues, on a
consolidated basis, were derived from its utilities activities.

The Fund may invest in securities of both U.S. and foreign
issuers, although the Fund will invest no more than 15% of its
total assets in issuers in any one foreign country. The Fund
invests at least 65% of its total assets in income-producing
securities, but there is otherwise no limit on the allocation of
the Fund's investments between equity securities and fixed-income
securities. The Fund may invest up to 35% of its net assets in
lower-rated securities. The Fund will not retain a security that
is downgraded below B or determined by Alliance to have undergone
similar credit quality deterioration following purchase.

The Fund may invest up to 35% of its total assets in equity and
fixed-income securities of domestic and foreign corporate and
governmental issuers other than utility companies. These
securities include U.S. Government securities and repurchase
agreements for those securities, foreign government securities,
corporate fixed-income securities of domestic issuers, corporate
fixed-income securities of foreign issuers denominated in foreign
currencies or in U.S. dollars (in each case including fixed-
income securities of an issuer in one country denominated in the
currency of another country), qualifying bank deposits and prime
commercial paper.

The Fund also may:

- -- invest up to 30% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

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- -- invest up to 5% of its net assets in rights or warrants;

- -- invest in depositary receipts, securities of supranational
entities denominated in the currency of any country,
securities denominated in European Currency Units and "semi-
governmental securities;"

- -- write covered call and put options, purchase call and put
options on securities of the types in which it is permitted
to invest that are exchange-traded and over-the-counter, and
write uncovered call options for cross-hedging purposes;

- -- purchase and sell exchange-traded options on any securities
index composed of the types of securities in which it may
invest;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including an index of
U.S. Government securities, foreign government securities,
corporate fixed-income securities, or common stock, and may
purchase and write options on futures contracts;

- -- purchase and write call and put options on foreign currencies
traded on U.S. and foreign exchanges or over-the-counter for
hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities of up to 20% of
its total assets.

The Fund's principal risks include its investing primarily in
electric utility companies. Factors affecting that industry
sector can have a significant effect on the Fund's net asset
value. The United States utilities industry has experienced
significant changes in recent years. Electric utility companies

<PAGE>

in general have been favorably affected by lower fuel costs, the
full or near completion of major construction programs and lower
financing costs. In addition, many utility companies have
generated cash flows in excess of current operating expenses and
construction expenditures, permitting some degree of
diversification into unregulated businesses. Regulatory changes,
however, could increase costs or impair the ability of nuclear
and conventionally fueled generating facilities to operate their
facilities and reduce their ability to make dividend payments of
their securities. Rates of return of utility companies generally
are subject to review and limitation by state public utilities
commissions and tend to fluctuate with marginal financing costs.
Rate changes ordinarily lag behind changes in financing costs and
can favorably or unfavorably affect the earnings or dividend pay-
outs of utilities stocks depending upon whether the rates and
costs are declining or rising.

Gas transmission companies, gas distribution companies and
telecommunications companies are also undergoing significant
changes. Declines in the prices of alternative fuels have
adversely affected gas utilities. Oversupply conditions and
competition also have affected gas utilities. Telephone
utilities are still experiencing the effects of the break-up of
American Telephone & Telegraph Company, including increased
competition and rapidly developing technologies with which
traditional telephone companies now compete. Although there can
be no assurance that increased competition and other structural
changes will not adversely affect the profitability of gas and
telephone utilities, or that other negative factors will not
develop in the future, in Alliance's opinion, increased
competition and change may provide better positioned utility
companies with opportunities for enhanced profitability.

Utility companies historically have been subject to the risks of
increases in fuel and other operating costs, high interest costs,
costs associated with compliance with environmental and nuclear
safety regulations, service interruptions, economic slowdowns,
surplus capacity, competition and regulatory changes. There can
also be no assurance that regulatory policies or accounting
standards changes will not negatively affect utility companies'
earnings or dividends. Utility companies are subject to
regulation by various authorities and may be affected by the
imposition of special tariffs and changes in tax laws. To the
extent that rates are established or reviewed by governmental
authorities, utility companies are subject to the risk that such
authorities will not authorize increased rates. Because of the
Fund's policy of concentrating its investments in utility
companies, the Fund is more susceptible than most other mutual
funds to economic, political or regulatory occurrences affecting
the utilities industry.

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Foreign utility companies, like those in the U.S., are generally
subject to regulation, although the regulation may or may not be
comparable to domestic regulations. Foreign utility companies in
certain countries may be more heavily regulated by their
respective governments than utility companies located in the U.S.
As in the U.S., utility companies generally are required to seek
government approval for rate increases. In addition, many
foreign utility companies use fuels that cause more pollution
than those used in the U.S. and may yet be required to invest in
pollution control equipment. Foreign utility regulatory systems
vary from country to country and may evolve in ways different
from regulation in the U.S. The percentage of the Fund's assets
invested in issuers of particular countries will vary.

Increases in interest rates may cause the value of the Fund's
investments to decline and the decrease in value may not be
offset by higher interest rate income. The Fund's investments in
lower-rated securities may be subject to more credit risk than a
fund that invests in higher-rated securities.

ALLIANCE REAL ESTATE INVESTMENT FUND

Alliance Real Estate Investment Fund seeks a total return from
long-term growth of capital and from income principally through
investing in a portfolio of equity securities of issuers that are
primarily engaged in or related to the real estate industry.

The Fund normally invests at least 65% of its total assets in
equity securities of real estate investment trusts, or REITs, and
other real estate industry companies. A "real estate industry
company" is a company that derives at least 50% of its gross
revenues or net profits from the ownership, development,
construction, financing, management or sale of commercial,
industrial or residential real estate or interests in these
properties. The Fund invests in equity securities that include
common stock, shares of beneficial interest of REITs, and
securities with common stock characteristics, such as preferred
stock or convertible securities ("Real Estate Equity
Securities").

The Fund may invest up to 35% of its total assets in
(a) securities that directly or indirectly represent
participations in, or are collateralized by and payable from,
mortgage loans secured by real property ("Mortgage-Backed
Securities"), such as mortgage pass-through certificates, real
estate mortgage investment conduit ("REMIC") certificates and
collateralized mortgage obligations ("CMOs") and (b) short-term
investments. These instruments are described below.

In selected Real Estate Equity Securities, Alliance's analysis
will focus on determining the degree to which the company

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involved can achieve sustainable growth in cash flow and dividend
paying capability. Alliance believes that the primary
determinant of this capability is the economic viability of
property markets in which the company operates and that the
secondary determinant of this capability is the ability of
management to a value through strategic focus and operating
expertise. The Fund will purchase Real Estate Equity Securities
when, in the judgment of Alliance, their market price does not
adequately reflect this potential. In making this determination,
Alliance will take into account fundamental trends in underlying
property markets as determined by proprietary models, site visits
conducted by individuals knowledgeable in local real estate
markets, price-earnings ratios (as defined for real estate
companies), cash flow growth and stability, the relationship
between asset value and market price of the securities, dividend
payment history, and such other factors which Alliance may
determine from time to time to be relevant. Alliance will
attempt to purchase for the Fund Real Estate Equity Securities of
companies whose underlying portfolios are diversified
geographically and by property type.

The Fund may invest without limitation in shares of REITs. REITs
are pooled investment vehicles that invest primarily in income
producing real estate or real estate related loans or interests.
REITs are generally classified as equity REITs, mortgage REITs,
or a combination of equity and mortgage REITs. Equity REITs
invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of
their assets in real estate mortgages and derive income from the
collection of interest payments. Similar to investment companies
such as the Fund, REITs are not taxed on income distributed to
shareholders provided they comply with several requirements of
the Code. The Fund will indirectly bear its proportionate share
of expenses incurred by REITs in which the Fund invests in
addition to the expenses incurred directly by the Fund.

The Fund's investment strategy with respect to Real Estate Equity
Securities is based on the premise that property market
fundamentals are the primary determinant of growth underlying the
performance of Real Estate Equity Securities. Value and
management further distinguishes the most attractive Real Estate
Equity Securities. The Fund's research and investment process is
designed to identify those companies with strong property
fundamentals and strong management teams. This process is
comprised of real estate market research, specific property
inspection, and securities analysis. Alliance believes that this
process will result in a portfolio that will consist of Real
Estate Equity Securities of companies that own assets in the most

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desirable markets across the country, diversified geographically
and by property type.

To implement the Fund's research and investment process, Alliance
has retained the consulting services of CB Richard Ellis, Inc.
("CBRE"), a publicly held company and the largest real estate
services company in the United States. CBRE business includes
real estate brokerage, property and facilities management, and
real estate finance and investment advisory activities. As
consultant to Alliance, CBRE provides access to its proprietary
model, REIT-Score, which analyzes the approximately 18,000
properties owned by these 142 companies. Using proprietary
databases and algorithms, CBRE analyzes local market rent,
expense, and occupancy trends, market specific transaction
pricing, demographic and economic trends, and leading indicators
of real estate supply such as building permits. Over 1,000
asset-type specific geographic markets are analyzed and ranked on
a relative scale by CBRE in compiling its REIT-Score database.
The relative attractiveness of these real estate industry
companies is similarly ranked based on the composite rankings of
the properties they own.

The universe of property-owning real estate industry firms
consists of approximately 142 companies of sufficient size and
quality to merit consideration for investment by the Fund. Once
the universe of real estate industry companies has been distilled
through the market research process, CBRE's local market presence
provides the capability to perform site specific inspections of
key properties. This analysis examines specific location,
condition, and sub-market trends. CBRE's use of locally based
real estate professionals provides Alliance with a window on the
operations of the portfolio companies as information can
immediately be put in the context of local market events. Only
those companies whose specific property portfolios reflect the
promise of their general markets will be considered for initial
and continued investment by the Fund.

Alliance further screens the universe of real estate industry
companies by using rigorous financial models and by engaging in
regular contact with management of targeted companies. Each
management's strategic plan and ability to execute the plan are
determined and analyzed. Alliance makes extensive use of CBRE's
network of industry analysts in order to assess trends in tenant
industries. This information is then used to further interpret
management's strategic plans. Financial ratio analysis is used
to isolate those companies with the ability to make value-added
acquisitions. This information is combined with property market
trends and used to project future earnings potential.

The Fund may invest in short-term investments including:
corporate commercial paper and other short-term commercial

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obligations, in each case rated or issued by companies with
similar securities outstanding that are rated Prime-1, Aa or
better by Moody's or A-1, AA or better by S&P; obligations
(including certificates of deposit, time deposits, demand
deposits and bankers' acceptances) of banks with securities
outstanding that are rated Prime-1, Aa or better by Moody's or
A-1, AA or better by S&P; and obligations issued or guaranteed by
the U.S. Government or its agencies or instrumentalities with
remaining maturities not exceeding 18 months.

The Fund may invest in debt securities rated BBB or higher by S&P
or Baa or higher by Moody's or, if not rated, of equivalent
credit quality as determined by Alliance. The Fund expects that
it will not retain a debt security that is downgraded below BBB
or Baa or, if unrated, determined by Alliance to have undergone
similar credit quality deterioration, subsequent to purchase by
the Fund.

The Fund also may:

- -- invest up to 10% of its net assets in rights or warrants;

- -- invest up to 15% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
the Fund;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to seven days'
duration;

- -- enter into forward commitment transactions as long as the
Fund's aggregate commitments under such transactions are not
more than 30% of the Fund's total assets;

- -- enter into standby commitment agreements; and

- -- make short sales of securities or maintain a short position
but only if at all times when a short position is open not
more than 25% of the Fund's net assets (taken at market
value) is held as collateral for such sales.

Because the Fund invests a substantial portion of its assets in
the real estate market, it has many of the same risks as direct
ownership of real estate. For example, the value of real estate
could decline due to a variety of factors affecting the real
estate market generally, such as overbuilding, increases in
interest rates, or declines in rental rates. In addition, REITs
are dependent on the capability of their managers, may have

<PAGE>

limited diversification, and could be significantly affected by
changes in tax laws.

The fund's investments in mortgage-backed securities have
prepayment risk, which is the risk that mortgage loans will be
repaid when interest rates decline and the Fund will have to
reinvest in securities with lower interest rates. This risk
causes mortgage-backed securities to have significantly greater
price and yield volatility than traditional fixed-income
securities. The Fund's investments in REMICs, CMOs and other
types of mortgage-backed securities may be subject to special
risks which are described under the Additional Risks Section.

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors the opportunity to
participate in the potential for long-term capital appreciation
available from investment in foreign securities.

ALLIANCE NEW EUROPE FUND

Alliance New Europe Fund seeks long-term capital appreciation
through investment primarily in the equity securities of
companies based in Europe. The Fund intends to invest
substantially all of its assets in the equity securities of
European companies and has a fundamental policy of normally
investing at least 65% of its total assets in these securities.
Up to 35% of its total assets may be invested in high quality
U.S. dollar or foreign currency denominated fixed-income
securities issued or guaranteed by European governmental
entities, or by European or multinational companies or
supranational organizations.

Alliance believes that the quickening pace of economic
integration and political change in Europe creates the potential
for many European companies to experience rapid growth. In
addition, the emergence of new market economies in Europe and the
broadening and strengthening of other European economies may
significantly accelerate economic development. The Fund will
invest in companies that Alliance believes possess rapid growth
potential. The Fund will emphasize investments in larger,
established companies, but will also invest in smaller, emerging
companies.

In recent years, economic ties between the former "east bloc"
countries of Eastern Europe and certain other European countries
have been strengthened. Alliance believes that as this
strengthening continues, some Western European financial
institutions and other companies will have special opportunities
to facilitate East-West transactions. The Fund will seek
investment opportunities among such companies and, as such become

<PAGE>

available, within the former "east bloc," although the Fund will
not invest more than 20% of its total assets in these companies,
or more than 10% of its total assets in issuers based in any one
country.

The Fund diversifies its investments among a number of European
countries and, under normal circumstances, will invest in
companies based in at least three of these countries. The Fund,
however, may invest without limit in a single European country.
While the Fund does not intend to concentrate its investments in
a single country, at times 25% or more of its assets may be
invested in companies located in a single country. During such
times, the Fund would be subject to a correspondingly greater
risk of loss due to adverse political or regulatory developments,
or an economic downturn, within that country.

The Fund also may:

- -- invest up to 20% of its total assets in warrants and rights
to purchase equity securities of European companies;

- -- invest in depositary receipts or other securities convertible
into securities of companies based in European countries,
debt securities of supranational entities denominated in the
currency of any European country, debt securities denominated
in European Currency Units of an issuer in a European country
(including supranational issuers) and "semi-governmental
securities";

- -- purchase and sell forward contracts;

- -- write covered call or put options and sell and purchase
exchange-traded put and call options, including exchange-
traded index options;

- -- enter into financial futures contracts, including contracts
for the purchase or sale for future delivery of foreign
currencies and futures contracts based on stock indices, and
purchase and write options on futures contracts;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make secured loans of portfolio securities of up to 30% of
its total assets;

- -- enter into forward commitments for the purchase or sale of
securities; and

- -- enter into standby commitment agreements.

<PAGE>

The Fund's investments in non-U.S. countries and smaller
countries may have more risk because they tend to be more
volatile than the overall stock market. To the extent the Fund
invests a substantial amount of its assets in a particular
European country, your investment has the risk that market
changes or other events affecting that country may have a more
significant effect on the Fund's net asset value. The Fund's
investments in U.S. dollar or foreign currency denominated fixed-
income securities have interest rate and credit risk.

ALLIANCE WORLDWIDE PRIVATIZATION FUND

Alliance Worldwide Privatization Fund seeks long-term capital
appreciation. As a fundamental policy, the Fund invests at least
65% of its total assets in equity securities issued by
enterprises that are undergoing, or have undergone, privatization
(as described below), although normally significantly more of its
assets will be invested in such securities. The balance of its
investments will include securities of companies believed by
Alliance to be beneficiaries of privatizations. The Fund is
designed for investors desiring to take advantage of investment
opportunities, historically inaccessible to U.S. individual
investors, that are created by privatizations of state
enterprises in both established and developing economies. These
companies include those in Western Europe and Scandinavia,
Australia, New Zealand, Latin America, Asia and Eastern and
Central Europe and, to a lesser degree, Canada and the United
States.

The Fund's investments in enterprises undergoing privatization
may comprise three distinct situations. First, the Fund may
invest in the initial offering of publicly traded equity
securities (an "initial equity offering") of a government- or
state-owned or controlled company or enterprise (a "state
enterprise"). Secondly, the Fund may purchase securities of a
current or former state enterprise following its initial equity
offering. Finally, the Fund may make privately negotiated
purchases of stock or other equity interests in a state
enterprise that has not yet conducted an initial equity offering.
Alliance believes that substantial potential for capital
appreciation exists as privatizing enterprises rationalize their
management structures, operations and business strategies in
order to compete efficiently in a market economy, and the Fund
will thus emphasize investments in such enterprises.

The Fund diversifies its investments among a number of countries
and normally invests in issuers based in at least four, and
usually considerably more, countries. The Fund invests up to 15%
of its total assets in issuers in any one foreign country, except
that the Fund may invest up to 30% of its total assets in issuers
in any one of France, Germany, Great Britain, Italy and Japan.

<PAGE>

The Fund may invest all of its assets within a single region of
the world.

Privatization is a process through which the ownership and
control of companies or assets changes in whole or in part from
the public sector to the private sector. Through privatization a
government or state divests or transfers all or a portion of its
interest in a state enterprise to some form of private ownership.
Governments and states with established economies, including
France, Great Britain, Germany and Italy, and those with
developing economies, including Argentina, Mexico, Chile,
Indonesia, Malaysia, Poland and Hungary, are engaged in
privatizations. The Fund will invest in any country believed to
present attractive investment opportunities.

A major premise of the Fund's approach is that the equity
securities of privatized companies offer opportunities for
significant capital appreciation. In particular, because
privatizations are integral to a country's economic
restructuring, securities sold in initial equity offerings often
are priced attractively to secure the issuer's successful
transition to private sector ownership. Additionally, these
enterprises often dominate their local markets and typically have
the potential for significant managerial and operational
efficiency gains.

The Fund may invest up to 35% of its total assets in debt
securities and convertible debt securities of issuers whose
common stocks are eligible for purchase by the Fund. The Fund
invests up to 5% of its net assets in lower-rated securities.
The Fund will not retain a non-convertible security that is
downgraded below C or determined by Alliance to have undergone
similar credit quality deterioration following purchase.

The Fund also may:

- -- invest up to 20% of its total assets in rights or warrants;

- -- write covered call and put options, purchase put and call
options on securities of the types in which it is permitted
to invest and on exchange-traded index options, and write
uncovered options for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, foreign government securities, or
common stock and may purchase and write options on future
contracts;

<PAGE>

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities equal in value of
up to 30% of its total assets to entities with which it can
enter into repurchase agreements.

Investments in non-U.S. companies and smaller companies may have
more risk because they tend to be more volatile than the overall
stock market. The Fund's investments in debt securities and
convertible securities have interest risk and credit risk.

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

Alliance International Premier Growth Fund seeks long term
capital appreciation by investing predominately in the equity
securities of a limited number of carefully selected non-U.S.
companies that are judged likely to achieve superior earnings
growth. As a matter of fundamental policy, the Fund will invest
under normal circumstances at least 85% of its total assets in
equity securities. The Fund makes investments based upon their
potential for capital appreciation. Current income is incidental
to that objective.

In the main, the Fund's investments will be in comparatively
large, high-quality companies. Normally, about 60 companies will
be represented in the Fund's portfolio, and the 30 most highly
regarded of these companies usually will constitute approximately
70% of the Fund's net assets. The Fund thus differs from more
typical international equity mutual funds by focusing on a
relatively small number of intensively researched companies. The
Fund is designed for investors seeking to accumulate capital over
time. Because of market risks inherent in any investment, the
selection of securities on the basis of their appreciation
possibilities cannot ensure against possible loss in value, and

<PAGE>

there is, of course, no assurance that the Fund's investment
objective will be met.

Alliance expects the average weighted market capitalization of
the companies represented in the Fund's portfolio (i.e., the
number of a company's outstanding shares multiplied by the price
per share) normally will be in the range of, or in excess of,
that of the companies comprising the EAFE Index. As of
December 31, 1998, the average weighted market capitalization of
those companies was approximately $__ billion.

Within the investment framework of the Fund, Alliance's Large Cap
Growth Group, headed by Alfred Harrison, Alliance's Vice
Chairman, has responsibility for managing the Fund's portfolio.
As discussed below, in selecting the Fund's portfolio investments
Alliance's Large Cap Growth Group will follow a structured,
disciplined research and investment process that is essentially
similar to that which it employs in managing Premier Growth Fund.

In managing the Fund's assets, Alliance's investment strategy
will emphasize stock selection and investment in the securities
of a limited number of issuers. Alliance depends heavily upon
the fundamental analysis and research of its large global equity
research team situated in numerous locations around the world.
Its global equity analysts follow a research universe of
approximately 900 companies. As one of the largest multinational
investment management firms, Alliance has access to considerable
information concerning the companies in its research universe, an
in-depth understanding of the products, services, markets and
competition of these companies and a good knowledge of their
management. Research emphasis is placed on the identification of
companies whose superior prospective earnings growth is not fully
reflected in current market valuations.

Alliance constantly adds to and deletes from this universe as
fundamentals and valuations change. Alliance's global equity
analysts rate companies in three categories. The performance of
each analyst's ratings is an important determinant of his or her
incentive compensation. The equity securities of "one-rated"
companies are expected to significantly outperform the local
market in local currency terms. All equity securities purchased
for the Fund's portfolio will be selected from the universe of
approximately 100 "one-rated" companies. As noted above,
approximately 70% of the Fund's net assets will usually be
invested in the approximately 30 most highly regarded such
companies. The Fund will not concentrate more than 25% of its
total assets in any one industry. Within this limit, portfolio
emphasis upon particular industries or sectors will be a by-
product of the stock selection process rather than the result of
assigned targets or ranges.

<PAGE>

The Fund's investments will be diversified among at least four,
and usually considerably more, countries. No more than 15% of
the Fund's total assets will be invested in issuers in any one
foreign country, except that the Fund may invest up to 25% of its
total assets in issuers in each of Canada, France, Germany,
Italy, Japan, The Netherlands, Switzerland and the United
Kingdom. Within these limits, geographic distribution of the
Fund's investments among countries or regions will also be a
product of the stock selection process rather than predetermined
allocation. To the extent that the Fund's assets will be
concentrated within one region, the Fund may be subject to any
special risks that may be associated with that region. While the
Fund may engage in currency hedging programs in periods in which
Alliance perceives extreme exchange rate risk, the Fund will not
normally make significant use of currency hedging strategies.

In the management of the Fund's investment portfolio, Alliance
will seek to utilize market volatility judiciously (assuming no
change in company fundamentals) to adjust the Fund's portfolio
positions. To the extent consistent with local market liquidity
considerations, the Fund will strive to capitalize on apparently
unwarranted price fluctuations, both to purchase or increase
positions on weakness and to sell or reduce overpriced holdings.
Under normal circumstances, the Fund will remain substantially
fully invested in equity securities and will not take significant
cash positions for market timing purposes. Rather, through
"buying into declines" and "selling into strength," Alliance
seeks superior relative returns over time.

The Fund also may:

- -- invest up to 20% of its total assets in convertible
securities of issuers whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its total assets in rights or warrants;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

<PAGE>

- -- purchase or sell forward contracts;

- -- enter into standby commitment agreements;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain short positions of
no more than 5% of its net assets as collateral for short
sales; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that
changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GLOBAL SMALL CAP FUND

Alliance Global Small Cap Fund seeks long-term growth of capital
through investment in a global portfolio of the equity securities
of selected companies with relatively small market
capitalization. The Fund's portfolio emphasizes companies with
market capitalizations that would have placed them (when
purchased) in about the smallest 20% by market capitalization of
actively traded U.S. companies, or market capitalizations of up
to about $1.5 billion. Because the Fund applies the U.S. size
standard on a global basis, its foreign investments might rank
above the lowest 20%, and, in fact, might in some countries rank
among the largest, by market capitalization in local markets.
Normally, the Fund invests at least 65% of its assets in equity
securities of these smaller capitalization companies. These
companies are located in at least three countries, one of which
may be the U.S. Up to 35% of the Fund's total assets may be
invested in securities of companies whose market capitalizations
exceed the Fund's size standard. The Fund's portfolio securities
may be listed on an U.S. or foreign exchange or traded
over-the-counter.

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts or other securities
representing securities of companies based in countries other
than the U.S.;

- -- purchase or sell forward foreign currency contracts;

- -- write covered call options on its securities of up to 15% of
its total assets, and purchase exchange-traded call and put
options, including put options on market indices of up to,
for all options, 10% of its total assets; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

One of the Fund's principal risks is its investments in smaller
capitalization companies. Alliance believes that smaller
capitalization companies often have sales and earnings growth
rates exceeding those of larger companies and that these growth
rates tend to cause more rapid share price appreciation.
Investing in smaller capitalization stocks, however, involves
greater risk than is associated with larger, more established
companies. For example, smaller capitalization companies often
have limited product lines, markets, or financial resources.
They may be dependent for management on one or a few key persons
and can be more susceptible to losses and risks of bankruptcy.
Their securities may be thinly traded (and therefore have to be
sold at a discount from current market prices or sold in small
lots over an extended period of time), may be followed by fewer
investment research analysts, and may be subject to wider price
swings. For these reasons, the Fund's investments may have a
greater chance of loss than investments in securities of larger
capitalization companies. In addition, transaction costs in
small capitalization stocks may be higher than in those of larger
capitalization companies.

The Fund's investments in non-U.S. companies and in smaller
companies will be more volatile and may differ substantially from
the overall market.

ALLIANCE INTERNATIONAL FUND

Alliance International Fund seeks a total return on its assets
from long-term growth of capital and from income primarily
through a broad portfolio of marketable securities of established
non-U.S. companies, companies participating in foreign economies
with prospects for growth, including U.S. companies having their

<PAGE>

principal activities and interests outside the U.S., and foreign
government securities. Normally, the Fund will invest more than
80% of its assets in these types of companies.

The Fund expects to invest primarily in common stocks of
established non-U.S. companies that Alliance believes have
potential for capital appreciation or income or both, but the
Fund is not required to invest exclusively in common stocks or
other equity securities. The Fund may invest in any other type
of investment grade security, including convertible securities,
as well as in warrants, or obligations of the U.S. or foreign
governments and their political subdivisions.

The Fund intends to diversify its investments broadly among
countries and normally invests in at least three foreign
countries, although it may invest a substantial portion of its
assets in one or more of such countries. The Fund may invest in
companies, wherever organized, that Alliance judges have their
principal activities and interests outside the U.S. These
companies may be located in developing countries, which involves
exposure to economic structures that are generally less diverse
and mature, and to political systems which can be expected to
have less stability, than those of developed countries. The Fund
currently does not intend to invest more than 10% of its total
assets in companies in, or governments of, developing countries.

The Fund also may:

- -- purchase or sell forward foreign currency exchange contracts;

- -- write covered call or put options, sell and purchase U.S. or
foreign exchange-listed put and call options, including
exchange-traded index options;

- -- enter into financial futures contracts, including contracts
for the purchase or sale for future delivery of foreign
currencies and stock index futures, and purchase and write
put and call options on futures contracts traded on U.S. or
foreign exchanges or over-the-counter;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make loans of portfolio securities equal in value up to 30%
of its total assets; and

- -- enter into repurchase agreements of up to seven days'
duration of up to 10% of the Fund's total assets.

<PAGE>

Investments in non-U.S. countries may have more risk because they
tend to be more volatile than the U.S. stock market. To the
extent that the Fund invests a substantial amount of its assets
in a particular foreign country, an investment in the Fund has
the risk that market changes or other events affecting that
country may have a more significant effect, either negative or
positive, on the Fund's net asset value.

ALLIANCE GREATER CHINA '97 FUND, INC.

Alliance Greater China '97 Fund is a non-diversified investment
company that seeks long-term capital appreciation through
investment of at least 80% of its total assets in equity
securities issued by Greater China companies. The Fund expects
to invest a significant portion, which may be greater than 50%,
of its assets in equity securities of Hong Kong companies and may
invest, from time to time, all of its assets in Hong Kong
companies or companies of either of the other Greater China
countries.

In recent years, China, Hong Kong and Taiwan have each
experienced a high level of real economic growth, although growth
is expected to slow in 1998. This growth has resulted from
advantageous economic conditions, including favorable
demographics, competitive wage rates, and rising per capita
income and consumer demand. Significantly, the growth has also
been fueled by an easing by both China and Taiwan of government
restrictions and an increased receptivity to foreign investment.
This expanded, if not yet complete, openness to foreign
investment extends as well to the securities markets of both
countries. Hong Kong's free-market economy has historically
included securities markets completely open to foreign
investments. All three countries have regulated stock exchanges
upon which shares of an increasing number of Greater China
companies are traded.

With its population estimated at more than 1.2 billion as a
driving force, and notwithstanding its continuing political
rigidity, China's economic growth has been coupled with
significantly reduced government economic intervention and basic
economic structural change. Recent years have seen large
increases in industrial production with a significant decline in
the state sector share of industrial output, and increased
involvement of local governmental units and the private sector in
establishing new business enterprises.

With China's growth has come an increasing direct and indirect
economic involvement of all three Greater China countries. For
some time, Hong Kong, a world financial and trade center in its
own right, with a large stock exchange and offices of many of the
world's multinational companies, has been the gateway to trade

<PAGE>

with and foreign investment in China. With the long-awaited
transfer on July 1, 1997 of the sovereignty of Hong Kong from
Great Britain to China, not only the political but the economic
ties between China and Hong Kong are expected to continue to
intensify, with the continuation of Hong Kong's economic system
as provided for in the law governing its sovereignty.

Notwithstanding the, at times considerable, political tension
between the two countries, it is generally recognized that
substantially increased trade and investment with China has been
generated from Taiwan, in many cases through Hong Kong. Along
with this increased interaction with China, Taiwan is becoming a
regional technological and telecommunication center, while
continuing the process of opening its economy up to foreign
investment. Although geographically limited, Taiwan boasts an
economy among the world's twenty largest and its foreign exchange
reserves are third largest in the world measured in U.S. dollars.
As China's economy continues to expand, it is expected that
Taiwan's economic interaction with China will likewise increase.

Alliance believes that over the long term conditions are
favorable for continuing and expanding economic growth in all
three Greater China countries. It is this potential which the
Fund hopes to take advantage of by investing both in established
and new and emerging companies. Appendix A has additional
Information about the Greater China countries.

In addition to investing in equity securities of Greater China
companies, the Fund may invest up to 20% of its total assets in
(i) debt securities issued or guaranteed by Greater China
companies or by Greater China governments, their agencies or
instrumentalities, and (ii) equity or debt securities issued by
issuers other than Greater China companies. The Fund will invest
only investment grade securities. If the Fund has an investment
in a debt security that is downgraded below investment grade or
is determined by Alliance to have undergone a similar credit
quality deterioration, the Fund will dispose of that security.

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

<PAGE>

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 20% of its net assets in loans and other direct
debt securities;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, securities issued by foreign
government entities, or common stock, and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for u.s. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

All or some of the policies and practices listed above may not be
available to the Fund in the Greater China countries and the Fund
will utilize these policies only to the extent permissible.

The Fund's investments in Greater China companies will be
significantly more volatile and differ from the overall market.
Your investment also has the risk that market changes or other
events affecting the Greater China countries may have a more
significant effect on the Fund's net asset value. In addition

<PAGE>

the Fund is "nondiversified" meaning that it invests its assets
in a smaller number of companies than many other international
funds. As a result, changes in the value of a single security
may have a more significant effect, either negative or positive,
on the Fund's net asset value.

ALLIANCE ALL-ASIA INVESTMENT FUND

Alliance All-Asia Investment Fund's investment objective is long-
term capital appreciation. The Fund will invest at least 65% of
its total assets in equity securities (for the purposes of this
investment policy, rights, warrants and options to purchase
common stocks are not deemed to be equity securities), preferred
stocks and equity-linked debt securities issued by Asian
companies. The Fund may invest up to 35% of its total assets in
debt securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities. The Fund
will invest at least 80% of its total assets in Asian companies
and Asian debt securities but also may invest in securities
issued by non-Asian issuers. The Fund expects to invest, from
time to time, a significant portion, which may be in excess of
50%, of its assets in equity securities of Japanese companies.

In the past decade, Asian countries generally have experienced a
high level of real economic growth due to political and economic
changes, including foreign investment and reduced government
intervention in the economy. Alliance believes that certain
conditions exist in Asian countries that create the potential for
continued rapid economic growth. These conditions include
favorable demographics and competitive wage rates, increasing
levels of foreign direct investment, rising per capita incomes
and consumer demand, a high savings rate, and numerous
privatization programs. Asian countries are also becoming more
industrialized and are increasing their intra-Asian exports while
reducing their dependence on Western export demand. Alliance
believes that these conditions are important to the long-term
economic growth of Asian countries.

As the economies of many Asian countries move through the
"emerging market" stage, thus increasing the supply of goods,
services and capital available to less developed Asian markets
and helping to spur economic growth in those markets, the
potential is created for many Asian companies to experience rapid
growth. In addition, many Asian companies the securities of
which are listed on exchanges in more developed Asian countries
will be participants in the rapid economic growth of the lesser-
developed countries. These companies generally offer the
advantages of more experienced management and more developed
market regulation.

<PAGE>

As their economies have grown, the securities markets in Asian
countries have also expanded. New exchanges have been created
and the number of listed companies, annual trading volume and
overall market capitalization have increased significantly.
Additionally, new markets continue to open to foreign
investments. The Fund also offers investors the opportunity to
access relatively restricted markets. Alliance believes that
investment opportunities in Asian countries will continue to
expand.

The Fund will invest in companies believed to possess rapid
growth potential. Thus, the Fund will invest in smaller,
emerging companies, but will also invest in larger, more
established companies in such growing economic sectors as capital
goods, telecommunications, and consumer services.

With respect to its investments in debt securities, the Fund will
primarily invest in investment grade debt securities but may
invest up to 5% of its net assets in lower-rated securities and
lower-rated loans and other lower-rated direct debt instruments.
The Fund will not retain a security that is downgraded below C or
determined by Alliance to have undergone similar credit quality
deterioration following purchase.

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 25% of its net assets in loans and other direct
debt instruments;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of

<PAGE>

U.S. Government securities, securities issued by foreign
government entities, or common stock and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for u.s. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in Asian and Pacific region countries will
be significantly more volatile and may differ significantly from
the overall market. To the extent the Fund invests a substantial
amount of its assets in Japanese companies, your investment has
the risk that market changes or other events affecting that
country may have a more significant effect on the Fund's net
assets value. The Fund's investments in debt securities have
interest rate and credit risk.

ALLIANCE GLOBAL ENVIRONMENT FUND

Alliance Global Environment Fund is a non-diversified investment
company that seeks long-term capital appreciation through
investment in equity securities of Eligible Companies. For
purposes of the Fund's investment objective and investment
policies, "equity securities" are common stocks (but not
preferred stocks), rights or warrants to subscribe for or
purchase common stocks, and preferred stocks or debt securities
that are convertible into common stocks without the payment of
any further consideration.

The Fund invests in two categories of Eligible Companies --
Environmental Companies and Beneficiary Companies. The Fund may

<PAGE>

invest in a company with a broadly diversified business only a
part of which provides such products, processes, or services,
when Alliance believes that these products, processes or services
will yield a competitive advantage that significantly enhances
the issuer's growth prospects. As a matter of fundamental
policy, the Fund will, under normal circumstances, invest
substantially all of its total assets in equity securities of
Eligible Companies.

A major premise of the Fund's investment approach is that
environmental concerns will be a significant source of future
growth opportunities, and that Environmental Companies will see
an increased demand for their systems and services.
Environmental Companies operate in the areas of pollution
control, clean energy, solid waste management, hazardous waste
treatment and disposal, pulp and paper recycling, waste-to-energy
alternatives, biodegradable cartons, packages, plastics and other
products, remedial projects and emergency cleanup efforts,
manufacture of environmental supplies and equipment, the
achievement of purer air, groundwater, and foods, and the
detection, evaluation and treatment of both existing and
potential environmental problems including, among others, air
pollution and acid rain.

The environmental services industry generally is positively
affected by increasing governmental action intended to foster
environmental protection. As environmental regulations are
developed and enforced, Environmental Companies providing the
means of compliance with such regulations are afforded
substantial opportunities for growth. Beneficiary Companies may
also derive an advantage to the extent that they have anticipated
environmental regulation and are therefore at a competitive
advantage.

In the view of Alliance, increasing public and political
awareness of environmental concerns and resultant environmental
regulations are long-term phenomena that are driven by an
emerging global consensus that environmental protection is a
vital and increasingly immediate priority. Alliance believes
that Eligible Companies based in the United States and other
economically developed countries will have increasing
opportunities for earnings growth resulting not only from an
increased demand for their existing products or services but also
from innovative responses to changing regulations and priorities
and enforcement policies. Such opportunities will arise, in the
opinion of Alliance, not only within developed countries but also
within many economically developing countries, such as those of
Eastern Europe and the Pacific Rim. These countries lag well
behind developed countries in the conservation and efficient use
of natural resources and in their implementation of policies that
protect the environment.

<PAGE>

Alliance believes that global investing offers opportunities for
superior investment returns. The Fund spreads investment risk
among the capital markets of a number of countries and invests in
equity securities of companies based in at least three, and
normally considerably more, such countries. The percentage of
the Fund's assets invested in securities of companies in a
particular country or denominated in a particular currency will
vary in accordance with Alliance's assessment of the appreciation
potential of such securities and the strength of that currency.

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- enter into forward foreign currency transactions for hedging
purposes;

- -- invest in currency futures and options on such futures for
hedging purposes; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in non-U.S. companies and in specific
types of companies that provide environmental services will be
more volatile and may differ substantially from the overall
market. The Fund's investments also have the risk that
government regulations or other action could negatively affect
the business of environmental companies.

DESCRIPTION OF INVESTMENT PRACTICES

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

ASSET-BACKED SECURITIES. Asset-backed securities (unrelated to
first mortgage loans) represent fractional interests in pools of
leases, retail installment loans, revolving credit receivables,
and other payment obligations, both secured and unsecured. These
assets are generally held by a trust and payments of principal
and interest or interest only are passed through monthly or
quarterly to certificate holders and may be guaranteed up to
certain amounts by letters of credit issued by a financial

<PAGE>

institution affiliated or unaffiliated with the trustee or
originator of the trust.

Like mortgages underlying mortgage-backed securities, underlying
automobile sales contracts or credit card receivables are subject
to prepayment, which may reduce the overall return to certificate
holders. Certificate holders may also experience delays in
payment on the certificates if the full amounts due on underlying
sales contracts or receivables are not realized by the trust
because of unanticipated legal or administrative costs of
enforcing the contracts or because of depreciation or damage to
the collateral (usually automobiles) securing certain contracts,
or other factors.

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, Duff & Phelps 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.

CURRENCY SWAPS. Currency swaps involve the individually
negotiated exchange by a Fund with another party of a series of
payments in specified currencies. A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency. Therefore, the entire principal value of a
currency swap is subject to the risk that the other party to the
swap will default on its contractual delivery obligations. A
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the counterparty is rated in the highest rating category of at
least one nationally recognized rating organization at the time
of entering into the transaction. If there is a default by the
counterparty to the transaction, the Fund will have contractual
remedies under the transaction agreements.

<PAGE>

DEPOSITARY RECEIPTS AND SECURITIES OF SUPRANATIONAL ENTITIES.
Depositary receipts may not necessarily be denominated in the
same currency as the underlying securities into which they may be
converted. In addition, the issuers of the stock of unsponsored
depositary receipts are not obligated to disclose material
information in the United States and, therefore, there may not be
a correlation between such information and the market value of
the depositary receipts. ADRs are depositary receipts typically
issued by an U.S. bank or trust company that evidence ownership
of underlying securities issued by a foreign corporation. GDRs
and other types of depositary receipts are typically issued by
foreign banks or trust companies and evidence ownership of
underlying securities issued by either a foreign or an U.S.
company. Generally, depositary receipts in registered form are
designed for use in the U.S. securities markets, and depositary
receipts in bearer form are designed for use in foreign
securities markets. For purposes of determining the country of
issuance, investments in depositary receipts of either type are
deemed to be investments in the underlying securities except with
respect to GROWTH FUND, where investments in ADRs are deemed to
be investments in securities issued by U.S. issuers and those in
GDRs and other types of depositary receipts are deemed to be
investments in the underlying securities.

A supranational entity is an entity designated or supported by
the national government of one or more countries to promote
economic reconstruction or development. Examples of
supranational entities include, among others, the World Bank
(International Bank for Reconstruction and Development) and the
European Investment Bank. A European Currency Unit is a basket
of specified amounts of the currencies of the member states of
the European Economic Community. "Semi-governmental securities"
are securities issued by entities owned by either a national,
state or equivalent government or are obligations of one of such
government jurisdictions that are not backed by its full faith
and credit and general taxing powers.

EQUITY-LINKED DEBT SECURITIES. Equity-linked debt securities are
securities on which the issuer is obligated to pay interest
and/or principal that is linked to the to the performance of a
specified index of equity securities. The interest or principal
payments may be significantly greater or less than payment
obligations for other types of debt securities. Adverse changes
in equity securities indices and other adverse changes in the
securities markets may reduce payments made under, and/or the
principal of, equity-linked debt securities held by a Fund. As
with any debt securities, the values of equity-linked debt
securities will generally vary inversely with changes in interest
rates. A Fund's ability to dispose of equity-linked debt
securities will depend on the availability of liquid markets for

<PAGE>

such securities. Investment in equity-linked debt securities may
be considered to be speculative.

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

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

The use of forward commitments enables a Fund to protect against
anticipated changes in interest rates and prices. For instance,
in periods of rising interest rates and falling bond prices, a
Fund might sell securities in its portfolio on a forward
commitment basis to limit its exposure to falling prices. In
periods of falling interest rates and rising bond prices, a Fund
might sell a security in its portfolio and purchase the same or a
similar security on a when-issued or forward commitment basis to
obtain the benefit of currently higher cash yields. However, if
Alliance were to forecast incorrectly the direction of interest
rate movements, a Fund might be required to complete such when-
issued or forward transactions at prices inferior to the then
current market values. When-issued securities and forward
commitments may be sold prior to the settlement date, but a Fund
enters into when-issued and forward commitments only with the
intention of actually receiving securities or delivering them, as
the case may be. If a Fund chooses to dispose of the right to
acquire a when-issued security prior to its acquisition or
dispose of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. Any significant
commitment of Fund assets to the purchase of securities on a
"when, as and if issued" basis may increase the volatility of the
Fund's net asset value. No forward commitments will be made by
INTERNATIONAL PREMIER GROWTH FUND, WORLDWIDE PRIVATIZATION FUND,
NEW EUROPE FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97
FUND, UTILITY INCOME FUND, or REAL ESTATE INVESTMENT FUND if, as
a result, the Fund's aggregate commitments under the transactions
would be more than 30% of the Fund's total assets. In the event
the other party to a forward commitment transaction were to
default, a Fund might lose the opportunity to invest money at
favorable rates or to dispose of securities at favorable prices.

<PAGE>

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

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

Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value
of the hedged currency should rise. Moreover, it may not be
possible for a Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to
sell the currency at a price above the devaluation level it
anticipates. INTERNATIONAL FUND, NEW EUROPE FUND and GLOBAL
SMALL CAP FUND will not enter into a forward contract with a term
of more than one year or if, as a result, more than 50% of its
total assets would be committed to such contracts. INTERNATIONAL
FUND, NEW EUROPE FUND and GLOBAL SMALL CAP FUND investments in

<PAGE>

forward contracts will be limited to hedging involving either
specific transactions or portfolio positions. GROWTH FUND also
may also purchase and sell foreign currency on a spot basis.

ILLIQUID SECURITIES. None of the Funds will invest more than 15%
of its net assets in illiquid securities and some may invest less
than 15%. THE ALLIANCE FUND and the GROWTH FUND may invest up to
5% of their total assets in illiquid securities. The TECHNOLOGY
FUND, the QUASAR FUND, the NEW EUROPE FUND, and the GLOBAL SMALL
CAP FUND may invest up to 10% of their total assets in illiquid
securities. 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 an
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, a Fund may not be able to realize their full value
upon sale. Alliance will monitor each Fund's investments in
illiquid securities under the supervision of the Directors of the
Fund. To the extent permitted by applicable law, Rule 144A
securities will not be treated as "illiquid" for purposes of the
limit on investments so long as the securities meet liquidity
guidelines established by a Fund's Directors.

A Fund that invests in securities for which there is no ready
market may not be able to readily sell such securities. 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 is no law in many of the countries
in which a Fund may invest similar to the Securities Act
requiring an issuer to register the sale of securities with a
governmental agency or imposing legal restrictions on resales of
securities, either as to length of time the securities may be
held or manner of resale. However, there may be contractual
restrictions on resales of non-publicly traded foreign
securities.

<PAGE>

INTEREST RATE TRANSACTIONS. Each Fund that may enter into
interest rate transactions expects to do so primarily to preserve
a return or spread on a particular investment or portion of its
portfolio or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The
Funds do not intend to use these transactions in a speculative
manner.

Interest rate swaps involve the exchange by a Fund with another
party of their respective commitments to pay or receive interest
(e.g., an exchange of floating rate payments for fixed rate
payments). Interest rate swaps are entered on a net basis (i.e.,
the two payment streams are netted out, with the Fund receiving
or paying, as the case may be, only the net amount of the two
payments). With respect TO ALL-ASIA INVESTMENT FUND, GREATER
CHINA '97 FUND and UTILITY INCOME FUND, the exchange commitments
can involve payments in the same currency or in different
currencies. The purchase of an interest rate cap entitles the
purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payments of interest on a
contractually-based principal amount from the party selling such
interest rate cap. The purchase of an interest rate floor
entitles the purchaser, to the extent that a specified index
falls below a predetermined interest rate, to receive payments of
interest on an agreed principal amount from the party selling the
interest rate floor.

A Fund may enter into interest rate swaps, caps and floors on
either an asset-based or liability-based basis, depending upon
whether it is hedging its assets or liabilities. A Fund will not
enter into an interest rate swap, cap or floor transaction unless
the unsecured senior debt or the claims-paying ability of the
other party is rated in the highest rating category of at least
one nationally recognized rating organization. Alliance will
monitor the creditworthiness of counterparties on an ongoing
basis. The swap market has grown substantially in recent years,
with a large number of banks and investment banking firms acting
both as principals and as agents utilizing standardized swap
documentation. As a result, the swap market has become
relatively liquid. Caps and floors are more recent innovations
for which standardized documentation has not yet been developed
and, accordingly, they are less liquid than swaps.

The use of interest rate transactions is a highly specialized
activity that involves investment techniques and risks different
from those associated with ordinary portfolio securities
transactions. If Alliance were to incorrectly forecast market
values, interest rates and other applicable factors, the
investment performance of a Fund would be adversely affected by
the use of these investment techniques. Moreover, even if
Alliance is correct in its forecasts, there is a risk that the

<PAGE>

transaction position may correlate imperfectly with the price of
the asset or liability being hedged. There is no limit on the
amount of interest rate transactions that may be entered into by
a Fund that is permitted to enter into such transactions. These
transactions do not involve the delivery of securities or other
underlying assets or principal. Accordingly, the risk of loss
with respect to interest rate transactions is limited to the net
amount of interest payments that a Fund is contractually
obligated to make. If the counterparty to an interest rate
transaction defaults, a Fund's risk of loss consists of the net
amount of interest payments that the Fund contractually is
entitled to receive.

LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Loans and other direct
debt instruments are interests in amounts owed by a corporate,
governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans
and loan participations), to suppliers of goods or services
(trade claims or other receivables), or to other creditors.
Direct debt instruments involve the risk of loss in case of
default or insolvency of the borrower and may offer less legal
protection to a Fund in the event of fraud or misrepresentation
than debt securities. In addition, loan participations involve a
risk of insolvency of the lending bank or other financial
intermediary. Direct debt instruments may also include standby
financing commitments that obligate a Fund to supply additional
cash to the borrower on demand. Loans and other direct debt
instruments are generally illiquid and may be transferred only
through individually negotiated private transactions.

Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment
of principal and interest. Direct debt instruments may not be
rated by any nationally recognized rating service. Failure to
receive scheduled interest or principal payments on these types
of investments could adversely affect a Fund's net asset value
and yield. Loans that are fully secured offer a Fund more
protection than unsecured loans in the event of non-payment of
scheduled interest or principal. However, there is no assurance
that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral can be
liquidated. Making loans to borrowers whose creditworthiness is
poor may involve substantial risks and may be highly speculative.

Borrowers that are in bankruptcy or restructuring may never pay
off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of government issuers will also
involve a risk that the governmental entities responsible for the
repayment of the debt may be unable, or unwilling, to pay
interest and repay principal when due.

<PAGE>

Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve
additional risks to a Fund. For example, if a loan is
foreclosed, a Fund could become part owner of any collateral and
would bear the costs and liabilities associated with owning and
disposing of the collateral. Direct debt instruments may also
involve a risk of insolvency of the lending bank or other
intermediary.

A loan is often administered by a bank or other financial
institution that acts as agent for all holders. The agent
administers the terms of the loan, as specified on the loan
agreement. Unless, under the terms of the loan or other
indebtedness, a Fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit
remedies against a borrower. If assets held by the agent for the
benefit of a Fund were determined to be subject to the claims of
the agent's general creditors, the Fund might incur certain costs
and delays in realizing payment on the loan or loan participation
and could suffer a loss of principal or interest.

Direct indebtedness purchased by a Fund may include letters of
credit, revolving credit facilities, or other standby financing
commitments obligating a Fund to pay additional cash on demand.
These commitments may have the effect of requiring a Fund to
increase its investment in a borrower at a time when it would not
otherwise have done so, even if the borrower's condition makes it
unlikely that the amount will ever be repaid.

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. Each Fund will
have the right to regain 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. A Fund may pay reasonable finders',
administrative, and custodial fees in connection with a loan.

MORTGAGE-BACKED SECURITIES AND ASSOCIATED RISKS. Interest and
principal payments (including prepayments) on the mortgages
underlying mortgage-backed securities are passed through to the
holders of the securities. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-

<PAGE>

backed securities are often subject to more rapid prepayment of
principal than their stated maturity would indicate. Prepayments
occur when the mortgagor on a mortgage prepays the remaining
principal before the mortgage's scheduled maturity date. Because
the prepayment characteristics of the underlying mortgages vary,
it is impossible to predict accurately the realized yield or
average life of a particular issue of pass-through certificates.
Prepayments are important because of their effect on the yield
and price of the mortgage-backed securities. During periods of
declining interest rates, prepayments can be expected to
accelerate and a Fund that invests in these securities would be
required to reinvest the proceeds at the lower interest rates
then available. Conversely, during periods of rising interest
rates, a reduction in prepayments may increase the effective
maturity of the securities, subjecting them to a greater risk of
decline in market value in response to rising interest rates. In
addition, prepayments of mortgages underlying securities
purchased at a premium could result in capital losses.

Mortgage-Backed Securities include mortgage pass-through
certificates and multiple-class pass-through securities, such as
REMIC pass-through certificates, CMOs and stripped mortgage-
backed securities ("SMBS"), and other types of Mortgage-Backed
Securities that may be available in the future.

Guaranteed Mortgage Pass-Through Securities. REAL ESTATE
INVESTMENT FUND may invest in guaranteed mortgage pass-through
securities which represent participation interests in pools of
residential mortgage loans and are issued by U.S. governmental or
private lenders and guaranteed by the U.S. Government or one of
its agencies or instrumentalities, including but not limited to
the Government National Mortgage Association ("Ginnie Mae"), the
Federal National Mortgage Association ("Fannie Mae") and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"). Ginnie
Mae certificates are guaranteed by the full faith and credit of
the United States Government for timely payment of principal and
interest on the certificates. Fannie Mae certificates are
guaranteed by Fannie Mae, a federally chartered and privately-
owned corporation, for full and timely payment of principal and
interest on the certificates. Freddie Mac certificates are
guaranteed by Freddie Mac, a corporate instrumentality of the
United States Government, for timely payment of interest and the
ultimate collection of all principal of the related mortgage
loans.

Multiple-Class Pass-Through Securities and Collateralized
Mortgage Obligations. Mortgage-Backed Securities also include
CMOs and REMIC pass-through or participation certificates that
may be issued by, among others, U.S. Government agencies and
instrumentalities as well as private lenders. CMOs and REMIC
certificates are issued in multiple classes and the principal of

<PAGE>

and interest on the mortgage assets may be allocated among the
several classes of CMOs or REMIC certificates in various ways.
Each class of CMOs or REMIC certificates, often referred to as a
"tranche," is issued at a specific adjustable or fixed interest
rate and must be fully retired no later than its final
distribution date. Generally, interest is paid or accrues on all
classes of CMOs or REMIC certificates on a monthly basis. REAL
ESTATE INVESTMENT FUND will not invest in the lowest tranche of
CMOs and REMIC certificates.

Typically, CMOs are collateralized by Ginnie Mae or Freddie Mac
certificates but also may be collateralized by other mortgage
assets such as whole loans or private mortgage pass-through
securities. Debt service on CMOs is provided from payments of
principal and interest on collateral of mortgaged assets and any
reinvestment income thereon.

A REMIC is a CMO that qualifies for special tax treatment under
the Code and invests in certain mortgages primarily secured by
interests in real property and other permitted investments.
Investors may purchase "regular" and "residual" interest shares
of beneficial interest in REMIC trusts, although REAL ESTATE
INVESTMENT FUND does not intend to invest in residual interests.

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 a 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 a 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 a Fund does not
own the underlying security, and is designed to provide a hedge
against a decline in value in another security which the Fund
owns or has the right to acquire. A 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, a Fund would be in a position to realize
a gain if, during the option period, the price of the underlying
security increased (in the case of a call) or decreased (in the

<PAGE>

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 a 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. A 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 a Fund's portfolio turnover rate,
especially during periods when market prices of the underlying
securities appreciate.

TECHNOLOGY FUND and GLOBAL SMALL CAP FUND will not write a call
option if the premium to be received by the Fund would not
produce an annualized return of at least 15% of the then current
market value of the securities subject to the option (without
giving effect to commissions, stock transfer taxes and other
expenses that are deducted from premium receipts.

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

Options on Securities Indices. An option on a securities index
is similar to an option on a security except that, rather than
the right to take or make delivery of a security at a specified
price, an option on a securities index gives the holder the right
to receive, upon exercise of the option, an amount of cash if the
closing level of the chosen index is greater than (in the case of
a call) or less than (in the case of a put) the exercise price of
the option.

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

<PAGE>

contract was originally struck. No physical delivery of the
securities underlying the index is made.

Options on futures contracts written or purchased by a Fund will
be 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.

No Fund will 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 by
the Fund would exceed 50% of its total assets, or in the case of
INTERNATIONAL PREMIER GROWTH FUND 100% of its total assets.
PREMIER GROWTH FUND AND GROWTH AND INCOME 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.
PREMIER GROWTH FUND and GROWTH AND INCOME 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.

Options on Foreign Currencies. As in the case of other kinds of
options, the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and a Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates and incur
losses. The purchase of an option on a foreign currency may
constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to a
Fund's position, it may forfeit the entire amount of the premium
plus related transaction costs. See the Statement of Additional
Information of each Fund that may invest in options on foreign
currencies for further discussion of the use, risks and costs of
options on foreign currencies.

REPURCHASE AGREEMENTS. A repurchase agreement arises when a
buyer purchases a security and simultaneously agrees to resell it
to the vendor at an agreed-upon future date, normally a day or a
few days later. The resale price is greater than the purchase
price, reflecting an agreed-upon interest rate for the period the
buyer's money is invested in the security. Such agreements
permit a Fund to keep all of its assets at work while retaining
"overnight" flexibility in pursuit of investments of a longer-
term nature. If a vendor defaults on its repurchase obligation,
a Fund would suffer a loss to the extent that the proceeds from

<PAGE>

the sale of the collateral were less than the repurchase price.
If a vendor goes bankrupt, a Fund might be delayed in, or
prevented from, selling the collateral for its benefit. Alliance
monitors the creditworthiness of the vendors with which the Fund
enters into repurchase agreements.

RIGHTS AND WARRANTS. A Fund will invest in rights or warrants
only if Alliance deems the underlying equity securities
themselves appropriate for inclusion in the Fund's portfolio.
Rights and warrants entitle the holder to buy equity securities
at a specific price for a specific period of time. Rights are
similar to warrants except that they have a substantially shorter
duration. Rights and warrants may be considered more speculative
than certain other types of investments in that they do not
entitle a holder to dividends or voting rights with respect to
the underlying securities nor do they represent any rights in the
assets of the issuing company. The value of a right or warrant
does not necessarily change with the value of the underlying
security, although the value of a right or warrant may decline
because of a decrease in the value of the underlying security,
the passage of time or a change in perception as to the potential
of the underlying security, or any combination of these factors.
If the market price of the underlying security is below the
exercise price set forth in the warrant on the expiration date,
the warrant will expire worthless. Moreover, a right or warrant
ceases to have value if it is not exercised prior to the
expiration date.

SHORT SALES. A short sale is effected by selling a security that
a Fund does not own, or, if the Fund does own such security, it
is not to be delivered upon consummation of the sale. A short
sale is "against the box" to the extent that a Fund
contemporaneously owns or has the right to obtain securities
identical to those sold short without payment. WORLDWIDE
PRIVATIZATION FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97
Fund and UTILITY INCOME FUND EACH may make short sales of
securities or maintain short positions only for the purpose of
deferring realization of gain or loss for U.S. federal income tax
purposes, provided that at all times when a short position is
open the Fund owns an equal amount of securities of the same
issue as, and equal in amount to, the securities sold short. In
addition, each of those Funds may not make a short sale if as a
result more than 10% of the Fund's net assets would be held as
collateral for short sales, except that ALL-ASIA INVESTMENT FUND,
GREATER CHINA '97 FUND and REAL ESTATE INVESTMENT FUND may not
make a short sale if as a result more than 25% of the Fund's net
assets would be held as collateral for short sales. If the price
of the security sold short increases between the time of the
short sale and the time a Fund replaces the borrowed security,
the Fund will incur a loss; conversely, if the price declines,
the Fund will realize a capital gain.

<PAGE>

STANDBY COMMITMENT AGREEMENTS. Standby commitment agreements
commit a Fund, for a stated period of time, to purchase a stated
amount of a security that may be issued and sold to the Fund at
the option of the issuer. The price and coupon of the security
are fixed at the time of the commitment. At the time of entering
into the agreement the Fund is paid a commitment fee, regardless
of whether the security ultimately is issued, typically equal to
approximately 0.5% of the aggregate purchase price of the
security the Fund has committed to purchase. A Fund will enter
into such agreements only for the purpose of investing in the
security underlying the commitment at a yield and price
considered advantageous to the Fund and unavailable on a firm
commitment basis. Investments in standby commitments will be
limited so that the aggregate purchase price of the securities
subject to the commitments will not exceed 25% with respect to
NEW EUROPE FUND AND REAL ESTATE INVESTMENT FUND, 50% with respect
to INTERNATIONAL PREMIER GROWTH FUND, WORLDWIDE PRIVATIZATION
FUND, ALL-ASIA INVESTMENT FUND and GREATER CHINA '97 FUND and 20%
with respect to UTILITY INCOME FUND, of the Fund's assets at the
time of making the commitment.

There is no guarantee that a security subject to a standby
commitment will be issued and the value of the security, if
issued, on the delivery date may be more or less than its
purchase price. Since the issuance of the security underlying
the commitment is at the option of the issuer, a Fund will bear
the risk of capital loss in the event the value of the security
declines and may not benefit from an appreciation in the value of
the security during the commitment period if the issuer decides
not to issue and sell the security to the Fund.

ZERO-COUPON AND PAYMENT-IN-KIND BONDS. Zero-coupon bonds are
issued at a significant discount from their principal amount in
lieu of paying interest periodically. Payment-in-kind bonds
allow the issuer to make current interest payments on the bonds
in additional bonds. Because zero-coupon bonds and payment-in-
kind bonds do not pay current interest in cash, their value is
generally subject to greater fluctuation in response to changes
in market interest rates than bonds that pay interest in cash
currently. Both zero-coupon and payment-in-kind bonds allow an
issuer to avoid the need to generate cash to meet current
interest payments. These bonds may involve greater credit risks
than bonds paying interest currently. Although these bonds do
not pay current interest in cash, a Fund is nonetheless required
to accrue interest income on such investments and to distribute
such amounts at least annually to shareholders. Thus, a Fund
could be required at times to liquidate other investments in
order to satisfy its dividend requirements.

FUTURE DEVELOPMENTS. A Fund may, following written notice to its
shareholders, take advantage of other investment practices that

<PAGE>

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 interest rates, prices or exchange
rates move unexpectedly, a 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
with respect to 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.

A 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 with respect to an option
purchased or written by a 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,
futures contract or currency upon exercise. Therefore, no
assurance can be given that the Funds will be able to utilize
these instruments effectively for the purposes set forth above.
In addition, a 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 a Fund for U.S. federal income tax
purposes.

<PAGE>

PORTFOLIO TURNOVER. The portfolio turnover rate for each Fund is
included in the FINANCIAL HIGHLIGHTS section. The Funds are
actively managed and, in some cases in response market
conditions, a 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,
each Fund may reduce its position in equity securities and invest
in, without limit, certain types of short-term, liquid, high
grade or high quality (depending on the Fund) 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. For Funds that may invest in foreign
countries, such securities may also include short-term, foreign-
currency denominated securities of the type mentioned above
issued by foreign governmental entities, companies and
supranational organizations.

ADDITIONAL RISK CONSIDERATIONS

Investment in certain of the Funds involves the special
risk considerations described below. These risks may be
heightened when investing in emerging markets.

CURRENCY CONSIDERATIONS. Substantially all of the assets of
INTERNATIONAL FUND, INTERNATIONAL PREMIER GROWTH FUND, NEW EUROPE
FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97 FUND and
WORLDWIDE PRIVATIZATION FUND and a substantial portion of the
assets of GLOBAL SMALL CAP FUND and GLOBAL ENVIRONMENT FUND are
invested in securities denominated in foreign currencies. The
Funds receive a corresponding portion of their revenues in
foreign currencies. Therefore, the dollar equivalent of their
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 a 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 a 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

<PAGE>

expenses in the currency at the time they were incurred. In
light of these risks, a Fund may engage in currency hedging
transactions, as described above, which involve certain special
risks.

FOREIGN INVESTMENT. 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, a Fund whose investment portfolio includes such
securities may experience greater price volatility and
significantly lower liquidity than a portfolio invested solely in
equity securities of U.S. companies. These markets may be
subject to greater influence by adverse events generally
affecting the market, and by large investors trading significant
blocks of securities, than is usual in the United States.
Securities settlements may in some instances be subject to delays
and related administrative uncertainties. These problems are
particularly severe in India, where settlement is through
physical delivery, and, where, currently, a severe shortage of
vault capacity exists among custodial banks, although efforts are
being undertaken to alleviate the shortage. Certain foreign
countries require governmental approval prior to investments by
foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a
specific class of securities which may have less advantageous
terms (including price) than securities of the company available
for purchase by nationals. These restrictions or controls may at
times limit or preclude investment in certain securities and may
increase the costs and expenses of a 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.

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

<PAGE>

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 or the Fund's investments in such
country. In the event of expropriation, nationalization or other
confiscation, a 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.

INTERNATIONAL FUND, ALL-ASIA INVESTMENT FUND and GREATER CHINA
'97 FUND may invest substantial amounts of their assets in United
Kingdom issuers, Japanese issuers, and Greater China issuers,
respectively. Please refer to Appendix A for a discussion of
risks associated with investments in these countries.

INVESTMENT IN PRIVATIZED ENTERPRISES BY WORLDWIDE PRIVATIZATION
FUND. In certain jurisdictions, the ability of foreign entities,
such as the Fund, to participate in privatizations may be limited
by local law, or the price or terms on which the Fund may be able
to participate may be less advantageous than for local investors.
Moreover, there can be no assurance that governments that have
embarked on privatization programs will continue to divest their
ownership of state enterprises, that proposed privatizations will
be successful or that governments will not re-nationalize
enterprises that have been privatized. Furthermore, in the case
of certain of the enterprises in which the Fund may invest, large
blocks of the stock of those enterprises may be held by a small
group of stockholders, even after the initial equity offerings by
those enterprises. The sale of some portion or all of those
blocks could have an adverse effect on the price of the stock of
any such enterprise.

<PAGE>

Most state enterprises or former state enterprises go through an
internal reorganization of management prior to conducting an
initial equity offering in an attempt to better enable these
enterprises to compete in the private sector. However, certain
reorganizations could result in a management team that does not
function as well as the enterprise's prior management and may
have a negative effect on such enterprise. After making an
initial equity offering, enterprises that may have enjoyed
preferential treatment from the respective state or government
that owned or controlled them may no longer receive such
preferential treatment and may become subject to market
competition from which they were previously protected. Some of
these enterprises may not be able to effectively operate in a
competitive market and may suffer losses or experience bankruptcy
due to such competition. In addition, the privatization of an
enterprise by its government may occur over a number of years,
with the government continuing to hold a controlling position in
the enterprise even after the initial equity offering for the
enterprise.

INVESTMENT IN SMALLER, EMERGING COMPANIES. The Funds may invest
in smaller, emerging companies. GLOBAL SMALL CAP FUND and NEW
EUROPE FUND will emphasize investment in, and ALL-ASIA INVESTMENT
FUND, GREATER CHINA '97 FUND and GLOBAL ENVIRONMENT FUND may
emphasize investment in, smaller, emerging companies. Investment
in such companies involves greater risks than is customarily
associated with securities of more established companies.
Companies in the earlier stages of their development often have
products and management personnel which have not been thoroughly
tested by time or the marketplace; their financial resources may
not be as substantial as those of more established companies.
The securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market
movements than securities of larger companies or broad market
indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also
contribute to stock price volatility.

Extreme Governmental Action; Less Protective Laws. In contrast
with investing in the United States, foreign investment may
involve in certain situations greater risk of nationalization,
expropriation, confiscatory taxation, currency blockage or other
extreme governmental action which could adversely impact a Fund's
investments. In the event of certain such actions, a Fund could
lose its entire investment in the country involved. In addition,
laws in various foreign countries, including in certain respects
each of the Greater China countries, governing, among other
subjects, business organization and practices, securities and
securities trading, bankruptcy and insolvency may provide less
protection to investors such as the Fund than provided under
United States laws.

<PAGE>

INVESTMENTS IN ENVIRONMENTAL COMPANIES BY GLOBAL ENVIRONMENT
FUND. Governmental regulations or other action can inhibit an
Environmental Company's performance, and it may take years to
translate environmental legislation into sales and profits.
Environmental Companies generally face competition in fields
often characterized by relatively short product cycles and
competitive pricing policies. Losses may result from large
product development or expansion costs, unprotected marketing or
distribution systems, erratic revenue flows and low profit
margins. Additional risks that Environmental Companies may face
include difficulty in financing the high cost of technological
development, uncertainties due to changing governmental
regulation or rapid technological advances, potential liabilities
associated with hazardous components and operations, and
difficulty in finding experienced employees.

THE REAL ESTATE INDUSTRY. Although REAL ESTATE INVESTMENT FUND
does not invest directly in real estate, it invests primarily in
Real Estate Equity Securities and has a policy of concentration
of its investments in the real estate industry. Therefore, an
investment in the Fund is subject to certain risks associated
with the direct ownership of real estate and with the real estate
industry in general. These risks include, among others: possible
declines in the value of real estate; risks related to general
and local economic conditions; possible lack of availability of
mortgage funds; overbuilding; extended vacancies of properties;
increases in competition, property taxes and operating expenses;
changes in zoning laws; costs resulting from the clean-up of, and
liability to third parties for damages resulting from,
environmental problems; casualty or condemnation losses;
uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in
interest rates. To the extent that assets underlying the Fund's
investments are concentrated geographically, by property type or
in certain other respects, the Fund may be subject to certain of
the foregoing risks to a greater extent.

In addition, if REAL ESTATE INVESTMENT FUND receives rental
income or income from the disposition of real property acquired
as a result of a default on securities the Fund owns, the receipt
of such income may adversely affect the Fund's ability to retain
its tax status as a regulated investment company. Investments by
the Fund in securities of companies providing mortgage servicing
will be subject to the risks associated with refinancings and
their impact on servicing rights.

REITS. Investing in REITs involves certain unique risks in
addition to those risks associated with investing in the real
estate industry in general. Equity REITs may be affected by
changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any

<PAGE>

credit extended. REITs are dependent upon management skills, are
not diversified, are subject to heavy cash flow dependency,
default by borrowers and self-liquidation. REITs are also
subject to the possibilities of failing to qualify for tax-free
pass-through of income under the Code and failing to maintain
their exemptions from registration under the 1940 Act.

REITs (especially mortgage REITs) also are subject to interest
rate risks. When interest rates decline, the value of a REIT's
investment in fixed rate obligations can be expected to rise.
Conversely, when interest rates rise, the value of a REIT's
investment in fixed rate obligations can be expected to decline.
In contrast, as interest rates on adjustable rate mortgage loans
are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in
market interest rates, causing the value of such investments to
fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Investing in REITs involves risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a
limited volume and may be subject to more abrupt or erratic price
movements than larger company securities. Historically, small
capitalization stocks, such as REITs, have been more volatile in
price than the larger capitalization stocks included in the S&P
500.

MORTGAGE-BACKED SECURITIES. Investing in Mortgage-Backed
Securities involves certain unique risks in addition to those
risks associated with investment in the real estate industry in
general. These risks include the failure of a counterparty to
meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. When interest
rates decline, the value of an investment in fixed rate
obligations can be expected to rise. Conversely, when interest
rates rise, the value of an investment in fixed rate obligations
can be expected to decline. In contrast, as interest rates on
adjustable rate mortgage loans are reset periodically, yields on
investments in such loans will gradually align themselves to
reflect changes in market interest rates, causing the value of
such investments to fluctuate less dramatically in response to
interest rate fluctuations than would investments in fixed rate
obligations.

Further, the yield characteristics of Mortgage-Backed Securities,
such as those in which REAL ESTATE INVESTMENT FUND may invest,
differ from those of traditional fixed-income securities. The
major differences typically include more frequent interest and
principal payments (usually monthly), the adjustability of
interest rates, and the possibility that prepayments of principal

<PAGE>

may be made substantially earlier than their final distribution
dates.

Prepayment rates are influenced by changes in current interest
rates and a variety of economic, geographic, social and other
factors, and cannot be predicted with certainty. Both adjustable
rate mortgage loans and fixed rate mortgage loans may be subject
to a greater rate of principal prepayments in a declining
interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Early
payment associated with Mortgage-Backed Securities causes these
securities to experience significantly greater price and yield
volatility than that experienced by traditional fixed-income
securities. Under certain interest rate and prepayment rate
scenarios, the Fund may fail to recoup fully its investment in
Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When the Fund reinvests
amounts representing payments and unscheduled prepayments of
principal, it may receive a rate of interest that is lower than
the rate on existing adjustable rate mortgage pass-through
securities. Thus, Mortgage-Backed Securities, and adjustable
rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. Government securities as a
means of "locking in" interest rates.

U.S. AND FOREIGN TAXES. A Fund's investment in foreign
securities may be subject to taxes withheld at the source on
dividend or interest payments. Foreign taxes paid by a 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.

FIXED-INCOME SECURITIES. The value of each Fund's shares will
fluctuate with the value of its investments. The value of each
Fund's investments in fixed-income securities will change as the
general level of interest rates fluctuates. During periods of
falling interest rates, the values of fixed-income securities
generally rise. Conversely, during periods of rising interest
rates, the values of fixed-income securities generally decline.

Under normal market conditions, the average dollar-weighted
maturity of a Fund's portfolio of debt or other fixed-income
securities is expected to vary between five and 30 years in the
case of ALL-ASIA INVESTMENT FUND, between five and 25 years in
the case of UTILITY INCOME FUND, and between one year or less and
30 years in the case of all other Funds that invest in such
securities. In periods of increasing interest rates, each of the
Funds may, to the extent it holds mortgage-backed securities, be
subject to the risk that the average dollar-weighted maturity of

<PAGE>

the Fund's portfolio of debt or other fixed-income securities may
be extended as a result of lower than anticipated prepayment
rates.

INVESTMENT IN LOWER-RATED FIXED-INCOME SECURITIES. Lower-rated
securities, i.e., those rated Ba and lower by Moody's or BB and
lower by S&P, Duff & Phelps or Fitch, are subject to greater
credit risk or loss of principal and interest than higher-rated
securities. They also are generally considered to be subject to
greater market risk than higher-rated securities. The capacity
of issuers of lower-rated securities to pay interest and repay
principal is more likely to weaken than is that of issuers of
higher-rated securities in times of deteriorating economic
conditions or rising interest rates. In addition, lower-rated
securities may be more susceptible to real or perceived adverse
economic conditions than investment grade securities.

The market for lower-rated securities may be thinner and less
active than that for higher-rated securities, which can adversely
affect the prices at which these securities can be sold. To the
extent that there is no established secondary market for lower-
rated securities, a Fund may experience difficulty in valuing the
securities for the purpose of computing a Fund's net asset value.
In addition, adverse publicity and investor perceptions about
lower-rated securities, whether or not factual, may tend to
impair their market value and liquidity.

Alliance will try to reduce the risk inherent in investment in
lower-rated securities through credit analysis, diversification
and attention to current developments and trends in interest
rates and economic and political conditions. However, there can
be no assurance that losses will not occur. Since the risk of
default is higher for lower-rated securities, Alliance's research
and credit analysis are a correspondingly more important aspect
of its program for managing a Fund's securities than would be the
case if a Fund did not invest in lower-rated securities.

In seeking to achieve a Fund's investment objective, there will
be times, such as during periods of rising interest rates, when
depreciation and realization of capital losses on securities in a
Fund's portfolio will be unavoidable. Moreover, medium- and
lower-rated securities and non-rated securities of comparable
quality may be subject to wider fluctuations in yield and market
values than higher-rated securities under certain market
conditions. Such fluctuations after a security is acquired do
not affect the cash income received from that security but are
reflected in the net asset value of a Fund.

Certain lower-rated may contain call or buy-back features that
permit the issuers thereof to call or repurchase such securities.
Such securities may present risks based on prepayment

<PAGE>

expectations. If an issuer exercises such a provision, a Fund
may have to replace the called security with a lower-yielding
security, resulting in a decreased rate of return to the Fund.

YEAR 2000 AND EURO. Many computer systems and applications in
use today process transactions using two-digit date fields for
the year of the transaction, rather than the full four digits.
If these systems are not modified or replaced, transactions
occurring after 1999 could be processed as year "1900", which
could result in processing inaccuracies and computer system
failures. This is commonly known as the Year 2000 problem. In
addition to the Year 2000 problem, the European Economic and
Monetary Union has established a single currency, the Euro
Currency ("Euro") that will replace the national currency of
certain European countries effective January 1, 1999. Computer
systems and applications must be adapted in order to be able to
process Euro sensitive information accurately beginning in 1999.
Should any of the computer systems employed by the Funds' major
service providers fail to process Year 2000 or Euro related
information properly, that could have a significant negative
impact on the Funds' operations and the services that are
provided to the Funds' shareholders. In addition, to the extent
that the operations of issuers of securities held by the Funds
are impaired by the Year 2000 problem or the Euro, or prices of
securities held by the Funds decline as a result of real or
perceived problems relating to the Year 2000 or the Euro, the
value of the Funds' shares may be materially affected.

With respect to the Year 2000, the Funds have been advised that
Alliance, each Fund's investment adviser, Alliance Fund
Distributors, Inc, ("AFD"), each Fund's principal underwriter,
and Alliance Fund Services, Inc. ("AFS"), each Fund's registrar,
transfer agent and dividend disbursing agent (collectively,
"Alliance") began to address the Year 2000 issue several years
ago in connection with the replacement or upgrading of certain
computer systems and applications. During 1997, Alliance began a
formal Year 2000 initiative, which established a structured and
coordinated process to deal with the Year 2000 issue. Alliance
reports that it has completed its assessment of the Year 2000
issues on its domestic and international computer systems and
applications. Currently, management of Alliance expects that the
required modifications for the majority of its significant
systems and applications that will be in use on January 1, 2000,
will be completed and tested by the end of 1998. Full
integration testing of these systems and testing of interfaces
with third-party suppliers will continue through 1999. At this
time, management of Alliance believes that the costs associated
with resolving this issue will not have a material adverse effect
on its operations or on its ability to provide the level of
services it currently provides to the Funds.

<PAGE>

With respect to the Euro, the Funds have been advised that
Alliance has established a project team to assess changes that
will be required in connection with the introduction of the Euro.
Alliance reports that its project team has assessed all systems,
including those developed or managed internally, as well as those
provided by vendors, in order to determine the modifications that
will be required to process accurately transactions denominated
in Euro after 1998. At this time, management of Alliance expects
that the required modifications for the introduction of the Euro
will be completed and tested before the end of 1998. Management
of Alliance believes that the costs associated with resolving
this issue will not have a material adverse effect on its
operations or on its ability to provide the level of services it
currently provides to the Funds.

The Funds and Alliance have been advised by the Funds' Custodians
that they are also in the process of reviewing their systems with
the same goals. As of the date of this prospectus, the Funds and
Alliance have no reason to believe that the Custodians will be
unable to achieve these goals.

<PAGE>

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Each Fund's Adviser is Alliance Capital Management, L.P.,
1345 Avenue of the Americas, New York, NY 10105. Alliance is a
leading international investment adviser supervising client
accounts with assets as of December 31, 1998 totaling more than
$___ billion (of which approximately $__ billion represented
assets of investment companies). Alliance's clients are
primarily major corporate employee benefit plans, public employee
retirement systems, investment companies, foundations, and
endowment funds. The __ registered investment companies, with
more than ___ separate portfolios, managed by Alliance currently
have over two million shareholders. As of December 31, 1998,
Alliance was retained as investment manager for over [ ] of the
Fortune 100 Companies.

Alliance provides investment advisory services and order
placement facilities for the Funds. For these advisory services,
the Funds paid Alliance as a percentage of net assets:

FEE AS A FISCAL
PERCENTAGE YEAR
FUND OF NET ASSETS * ENDING

Premier Growth
Growth
Technology
Quasar
Alliance Fund
Growth and Income Fund
Balanced Shares
Utility Income Fund
Real Estate Investment
New Europe
Worldwide Privatization
International Premier Growth
Global Small Cap
International
Greater China '97
All-Asia Investment
Global Environment

* Fees are stated net of waivers and/or reimbursements. See the
"Fee Table" at the beginning of the Prospectus for more
information about fee waivers.

In connection with providing advisory services to GREATER CHINA
'97 FUND, Alliance has, at its expense, retained as a consultant
New Alliance, a joint venture company headquartered in Hong Kong,

<PAGE>

which was formed in 1997 by Alliance and Sun Hung Kai Properties
Limited. New Alliance provides Alliance with ongoing, current,
and comprehensive information and analysis of conditions and
developments in Greater China countries.

In connection with investments in real estate securities,
Alliance has, at its expense, retained as a consultant CB Richard
Ellis, Inc. ("CBRE"). CBRE is a publicly held company and the
largest real services company in the United States, comprised of
real estate brokerage, property, and facilities management, and
real estate finance, and investment advisory services.

PORTFOLIO MANAGER

The following table lists the person or persons who are primarily
responsible for the day-to-day management of each Fund's
portfolio, the length of time that each person has been primarily
responsible, and each person's principal occupation during the
past five years.

PRINCIPAL OCCUPATION
DURING THE PAST FIVE
FUND EMPLOYEE; YEAR; TITLE (5) YEARS

Premier Growth Alfred Harrison; since Associated with Alliance
inception--Vice Chairman of
Alliance Capital Management
Corporation (ACMC)

Growth Tyler Smith; since inception-- Associated with Alliance
Senior Vice President of ACMC

Technology Peter Anastos; since 1992-- Associated with Alliance
Senior Vice President of ACMC
Gerald T. Malone; since 1992-
-Senior Vice President of ACMC

Quasar Alden M. Stewart since 1994-- Associated with Alliance
Executive Vice President of
ACMC*
Randall E. Haase since 1994-- Associated with Alliance
Senior Vice President of ACMC

Alliance Fund Alden M. Stewart; since 1997-- (see above)
(see above)

Randall E. Haase; since 1997- (see above)
(see above)

Growth & Income Paul Rissman; since 1994-- Associated with Alliance
Senior Vice President of ACMC

<PAGE>

Balanced Shares Paul Rissman since 1997--(see (see above)
above)

Utility Income Paul Rissman since 1996--(see (see above)
above)

Real Estate
Investment Daniel G. Pine; since 1996-- Associated with Alliance
Senior Vice President of ACMC since 1996; prior
thereto; Senior Vice
President of Desai
Capital Management

David Kruth; since 1997--Vice Associated with Alliance
President of ACMC since 1997; prior
thereto; Senior Vice
President of Yarmouth
Group

New Europe Steven Beinhacker; since 1997-- Associated with Alliance
Vice President of ACMC

Worldwide
Privatization Mark H. Breedon; since inception Associated with Alliance
Senior Vice President of
ACMC and Director and
Vice President of
Alliance Capital
Limited **

International
Premier Growth Alfred Harrison; since 1998-- (see above)
(see above)
Thomas Kamp since 1998--Senior Associated with Alliance
Vice President of ACMC

Global Small Cap Alden M. Stewart; since 1994-- (see above)
(see above)
Randall E. Haase; since 1994-- (see above)
(see above)
Ronald L. Simcoe; since 1993-- Associated with Alliance
Vice President of ACMC

International Bruce W. Calvert; since 1998-- Associated with Alliance
Vice Chairman and Chief
Investment Officer of ACMC

Greater China '97 Matthew W.S. Lee; since 1997-- Associated with Alliance
Vice President of ACMC since 1997; prior
thereto; associated with
National Mutual Funds

<PAGE>

Management (Asia) and
James Capel and Co.
since prior to 1994

All-Asia
Investment Hiroshi Motoki; since 1998-- Associated with Alliance
Senior Vice President of ACMC since 1994; prior
and director of Japanese/Asian thereto; associated with
Equity research Ford Motor Company

Global Environment Linda Bolton Weiser; since Associated with Alliance
1998-- Vice President of ACMC

* The sole general partner of Alliance.
** An indirect wholly-owned subsidiary of Alliance.

PERFORMANCE OF SIMILARLY MANAGED PORTFOLIOS. In addition to
managing the assets of PREMIER GROWTH FUND, Mr. Harrison has
ultimate responsibility for the management of discretionary tax-
exempt accounts of institutional clients managed as described
below without significant client-imposed restrictions
("Historical Portfolios"). These accounts have substantially the
same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and
techniques as those for PREMIER GROWTH FUND, except for the
ability of PREMIER GROWTH FUND to use futures and options as
hedging tools and to invest in warrants. The Historical
Portfolios also are not subject to certain limitations,
diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which PREMIER GROWTH FUND, as a
registered investment company, is subject and which, if
applicable to the Historical Portfolios, may have adversely
affected the performance results of the Historical Portfolios.
See "Investment Objective and Policies."

Set forth below is performance data provided by Alliance relating
to the Historical Portfolios for each of the nineteen full
calendar years during which Mr. Harrison has managed the
Historical Portfolios as an employee of Alliance and cumulatively
through September 30, 1998. As of September 30, 1998, the assets
in the Historical Portfolios totaled approximately $12.3 billion
and the average size of an institutional account in the
Historical Portfolio was $412 million. Each Historical Portfolio
has a nearly identical composition of investment holdings and
related percentage weightings.

<PAGE>

GROWTH FUND, which are higher than the fees imposed on the
Historical Portfolio and will result in a higher expense ratio
and lower returns for PREMIER GROWTH FUND. Expenses associated
with the distribution of Class A, Class B and Class C shares of
PREMIER GROWTH FUND in accordance with the plan adopted by
PREMIER GROWTH FUND's Board of Directors pursuant to Rule 12b-1
under the 1940 Act ("distribution fees") are also excluded. See
"Expense Information." The performance data has also not been
adjusted for corporate or individual taxes, if any, payable by
the account owners.

Alliance has calculated the investment performance of the
Historical Portfolios on a trade-date basis. Dividends have been
accrued at the end of the month and cash flows weighted daily.
Composite investment performance for all portfolios has been
determined on an asset weighted basis. New accounts are included
in the composite investment performance computations at the
beginning of the quarter following the initial contribution. The
total returns set forth below are calculated using a method that
links the monthly return amounts for the disclosed periods,
resulting in a time-weighted rate of return.

As reflected below, the Historical Portfolios have over time
performed favorably when compared with the performance of
recognized performance indices. The S&P 500 Index is a widely
recognized, unmanaged index of market activity based upon the
aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The S&P 500
Index reflects the total return of securities comprising the
Index, including changes in market prices as well as accrued
investment income, which is presumed to be reinvested. The
Russell 1000 universe of securities is compiled by Frank Russell
Company and is segmented into two style indices, based on the
capitalization-weighted median book-to-price ratio of each of the
securities. At each reconstitution, the Russell 1000
constituents are ranked by their book-to-price ratio. Once so
ranked, the breakpoint for the two styles is determined by the
median market capitalization of the Russell 1000. Thus, those
securities falling within the top fifty percent of the cumulative
market capitalization (as ranked by descending book-to-price)
become members of the Russell Price-Driven Indices. The Russell
1000 Growth Index is, accordingly, designed to include those
Russell 1000 securities with a greater-than-average growth
orientation. In contrast with the securities in the Russell
Price-Driven Indices, companies in the Growth Index tend to
exhibit higher price-to-book and price-earnings ratios, lower
dividend yield and higher forecasted growth values.

To the extent PREMIER GROWTH FUND does not invest in U.S. common
stocks or utilizes investment techniques such as futures or

<PAGE>

options, the S&P 500 Index and Russell 1000 Growth Index may not
be substantially comparable to PREMIER GROWTH FUND. The S&P 500
Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time
period shown. The S&P 500 Index and Russell 1000 Growth Index do
not reflect the deduction of any fees. If PREMIER GROWTH FUND
were to purchase a portfolio of securities substantially
identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, PREMIER GROWTH FUND's performance
relative to the index would be reduced by PREMIER GROWTH FUND's
expenses, including brokerage commissions, advisory fees,
distribution fees, custodial fees, transfer agency costs and
other administrative expenses, as well as by the impact on
PREMIER GROWTH FUND's shareholders of sales charges and income
taxes.

The Lipper Growth Fund Index is prepared by Lipper Analytical
Services, Inc. and represents a composite index of the investment
performance for the 30 largest growth mutual funds. The
composite investment performance of the Lipper Growth Fund Index
reflects investment management and administrative fees and other
operating expenses paid by these mutual funds and reinvested
income dividends and capital gain distributions, but excludes the
impact of any income taxes and sales charges.

The following performance data is provided solely to illustrate
Mr. Harrison's performance in managing the Historical Portfolios
and the PREMIER GROWTH FUND as measured against certain broad
based market indices and against the composite performance of
other open-end growth mutual funds. Investors should not rely on
the following performance data of the Historical Portfolios as an
indication of future performance of PREMIER GROWTH FUND. The
composite investment performance for the periods presented may
not be indicative of future rates of return. Other methods of
computing investment performance may produce different results,
and the results for different periods may vary.

SCHEDULE OF COMPOSITE INVESTMENT PERFORMANCE--
HISTORICAL PORTFOLIOS*

RUSSELL LIPPER
PREMIER HISTORICAL S&P 500 100 GROWTH
GROWTH PORTFOLIOS INDEX GROWTH INDEX FUND INDEX
FUND TOTAL RETURN** TOTAL RETURN TOTAL RETURN TOTAL RETURN

Year ended December:
1998
1997*** 27.05% 34.64% 33.36% 30.49% 25.30%
1996*** 18.84 22.06 22.96 23.12 17.48
1995*** 40.66 39.83 37.58 37.19 32.65
1994 (9.78) (4.82) (1.32) (1.57)

100

<PAGE>

1993 5.35 10.54 10.08 11.98
1992 --- 12.18 7.62 7.63
1991 --- 38.91 30.47 35.20
1990 --- (1.57) (3.10) (0.26) (5.00)
1989 --- 38.80 31.69 35.92 28.60
1988 --- 10.88 16.61 11.27 15.80
1987 -- 8.49 5.25 5.31 1.00
1986 --- 27.40 18.67 15.36 15.90
1985 --- 37.41 31.73 32.85 30.30
1984 --- (3.31) 6.27 (.95) (2.80)
1983 --- 20.80 22.56 15.98 22.30
1982 --- 28.02 21.55 20.46 20.20
1981 --- (1.09) (4.92) (11.31) (8.40)
1980 --- 50.73 32.50 39.57 37.30
1979 --- 30.76 18.61 23.91 27.40
Cumulative total
return for
the period
January 1, 1979 to
December 31, 1998

--- %

* Total return is a measure of investment performance that is
based upon the change in value of an investment from the
beginning to the end of a specified period and assumes
reinvestment of all dividends and other distributions. The
basis of preparation of this data is described in the
preceding discussion. Total returns for PREMIER GROWTH FUND
are for Class A shares, with imposition of the maximum
4.25% sales charge.

** Assumes imposition of the maximum advisory fee charged by
Alliance for any Historical Portfolio for the period
involved.

*** During this period, the Historical Portfolios differed from
PREMIER GROWTH FUND in that PREMIER GROWTH FUND invested a
portion of its net assets in warrants on equity securities
in which the Historical Portfolios were unable, by their
investment restrictions, to purchase. In lieu of warrants,
the Historical Portfolios acquired the common stock upon
which the warrants were based.

The average annual total returns presented below are based upon
the cumulative total return as of December 31, 1998 and, for more
than one year, assume a steady compounded rate of return and are
not year-by-year results, which fluctuated over the periods as
shown.

101

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS

PREMIER RUSSELL LIPPER
GROWTH HISTORICAL S&P 1000 GROWTH
FUND PORTFOLIOS INDEX GROWTH INDEX FUND INDEX
One year % % % % %
Three years
Five years
Ten years
Since January 1,
1979 ---

+ Since inception on 9/28/92

The Funds' Statements of Additional Information has more detailed
information about Alliance and other Fund service providers.

PURCHASE AND SALE OF SHARES

HOW THE FUND VALUES ITS SHARES

The Funds' net asset value or NAV is calculated at 4 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 Funds' value their 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 Funds' directors believe accurately
reflect fair market value.

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

HOW TO BUY SHARES

You may purchase a Funds' shares through broker-dealers, banks,
or other financial intermediaries. You also may purchase shares
directly from the Funds' principal underwriter, Alliance Fund
Distributors, Inc., or AFD.

102

<PAGE>

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.

A 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.

A Fund may refuse any order to purchase shares. In this regard,
the Funds' reserve 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 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 Funds 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 a Fund)
on any day the NYSE is open, either directly or through your
financial intermediary. Your sales price will be the next-
determined NAV, less any applicable CDSC, after the Fund receives
your sales request in proper form. Normally, proceeds will be
sent to you within 7 days. If you recently purchased your shares
by check or electronic funds transfer, you cannot redeem any
portion of it until the Fund is reasonably satisfied that the
check or electronic funds transfer has been collected (which may
take up to 15 days).

103

<PAGE>

-- Selling Shares Through Your Broker

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

-- Selling Shares Directly to the Fund

BY MAIL:

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

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

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

BY TELEPHONE:

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

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

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

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

104

<PAGE>

-- 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

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

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

The Funds expect that distributions will consist either of net
income or long-term capital gains. For federal income tax
purposes, the Fund's dividend distributions of net income (or
short-term taxable gains) will be taxable to you as ordinary
income. Any capital gains distributions may be taxable to you as
capital gains. A Fund's distributions also may be subject to
certain state and local taxes.

105

<PAGE>

distributions paid to REAL ESTATE INVESTMENT FUND and
subsequently distributed to shareholders may be a nontaxable
return of capital. The final determination of the amount of a
Fund's return of capital distributions for the period will be
made after the end of each calendar year.

Investment income received by a Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the
source. To the extent that any Fund is liable for foreign income
taxes withheld at the source, each 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 any Fund
will be able to do so. Furthermore, a shareholder's ability to
claim a foreign tax credit or deduction in respect of foreign
taxes paid by a Fund may be subject to certain limitations
imposed by the Code, as a result of which a shareholder may not
be permitted to claim a full credit or deduction for the amount
of such taxes.

Under certain circumstances, if a 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 a 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 a Fund deducts a distribution from
its net asset value, you will pay the full price for the shares
and then receive a portion of the price back as a taxable
distribution.

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

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

DISTRIBUTION ARRANGEMENT

Share Classes. The Fund offers three classes of shares.

106

<PAGE>

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
As % of Net As % of as % of
Amount 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, 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 a 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 a 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. A Fund will thus receive the full amount of your
purchase. Your investment, however, will be subject to a CDSC if
you redeem shares within 4 years of purchase. The CDSC varies
depending of the number of years you hold the shares. The CDSC
amounts are:

YEARS SINCE PURCHASE CDSC
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth None

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

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

RULE 12B-1 FEE (AS A PERCENT OF
AGGREGATE AVERAGE DAILY NET ASSETS)

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

* The fee under the Rule 12b-1 Plan for the Class A shares of
GROWTH FUND and PREMIER GROWTH FIND is .50% of the aggregate
average daily net assets. The Directors of GROWTH FUND
currently limit the payments to .30%. The Directors of
PREMIER GROWTH FUND limit payments for Class A shares
purchased after November 1993 to .30% of net assets.

Because these fees are paid out of the Fund's assets on an on-
going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
fees. Class B and Class C shares are subject to higher
distribution fees than Class A shares (Class B shares are subject
to these higher fees for a period of eight years, after which
they convert to Class A shares). The higher fees mean a higher
expense ratio, so Class B and Class C shares pay correspondingly
lower dividends and may have a lower net asset value than Class A
shares.

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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 or further
information about CDSC waivers.

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

In addition to the discount or commission paid to dealers or
agents, AFD from time to time pays additional cash or other
incentives to dealers or agents for the sale of shares of the
Funds. Such additional amounts may be utilized, in whole or in
part, in some cases together with other revenues of such dealers
or agents, to provide additional compensation to registered
representatives who sell shares of the Funds. On some occasions,
such cash or other incentives will be conditioned upon the sale
of a specified minimum dollar amount of the shares of a Fund
and/or other Alliance Mutual Funds during a specific period of
time. Such incentives may take the form of payment for

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attendance at seminars, meals, sporting events or theater
performances, or payment for travel, lodging and entertainment
incurred in connection with travel by persons associated with a
dealer or agent to urban or resort locations within or outside
the United States. Such dealer or agent may elect to receive
cash incentives of equivalent amount in lieu of such payments.

GENERAL INFORMATION

Under unusual circumstances, a Fund may suspend redemptions or
postpone payment for up to seven days or longer, as permitted by
federal securities law. The Funds reserve 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.

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

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

Employee Benefit Plans. Certain employee benefit plans,
including employer-sponsored tax-qualified 401(k) plans and other
defined contribution retirement plans ("Employee Benefit Plans"),
may establish requirements as to the purchase, sale or exchange
of shares, including maximum and minimum initial investment
requirements, that are different from those described in this
Prospectus. Employee Benefit Plans also may not offer all
classes of shares of the Funds. In order to enable participants
investing through Employee Benefit Plans to purchase shares of
the Funds, 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.

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FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand
a Fund's financial performance for the period of the Fund's
operations. Certain information reflects financial information
for a single Fund share. The total return in the table
represents the rate that an investor would have earned (or lost)
on an investment in the Fund (assuming investment of all
dividends and distributions). The information has been audited
by ______________, the Fund's independent auditors, whose report,
along with Fund's financial statements, appears in the Statement
of Additional Information, which is available upon request.

CLASS A
YEAR ENDED
_______________________________________

1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

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<PAGE>

CLASS B
YEAR ENDED
_________________________________________
1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

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<PAGE>

CLASS C
YEAR ENDED
_________________________________________
1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

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<PAGE>

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

- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS

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

- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)

Each Fund has an SAI, which contains more detailed information
about the Fund, including its operations and investment policies.
The Funds' SAIs are 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, by contacting your broker or other financial
intermediary, or by contacting Alliance:

BY MAIL: c/o Alliance Fund Services, Inc.
P.B. 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 SEC:

IN PERSON: at the SEC's Public Reference Room in
Washington, D.C.

BY PHONE: 1-800-SEC-0330

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

ON THE INTERNET: www.sec.gov

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

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<PAGE>

APPENDIX A

The following is additional information about the United Kingdom,
Japan and Greater China countries.

Investment in United Kingdom Issuers. Investment in securities
of United Kingdom issuers involves certain considerations not
present with investment in securities of U.S. issuers. As with
any investment not denominated in the U.S. dollar, the U.S.
dollar value of the Fund's investment denominated in the British
pound sterling will fluctuate with pound sterling-dollar exchange
rate movements. Between 1972, when the pound sterling was
allowed to float against other currencies, and the end of 1992,
the pound sterling generally depreciated against most major
currencies, including the U.S. dollar. Between September and
December 1992, after the United Kingdom's exit from the Exchange
Rate Mechanism of the European Monetary System, the value of the
pound sterling fell by almost 20% against the U.S. dollar. The
pound sterling has since recovered due to interest rate cuts
throughout Europe and an upturn in the economy of the United
Kingdom. The average exchange rate of the U.S. dollar to the
pound sterling was 1.50 in 1993 and 1.64 in 1997. On October 13,
1998 the U.S. dollar-pound sterling exchange rate was 1.71.

The United Kingdom's largest stock exchange is the London Stock
Exchange, which is the third largest exchange in the world. As
measured by the FT-SE 100 index, the performance of the 100
largest companies in the United Kingdom reached 5,135.5 at the
end of 1997, up approximately 25% from the end of 1996. On
October 5, 1998 the FT-SE 100 index closed at 4648.7, the lowest
close in the 12-month period prior to that date, after reaching a
high of 6179.0 on July 20, 1998. The FT-SE 100 index closed at
4990.1 on October 14, 1998.

In January 1999, the Economic and Monetary Union ("EMU") is
scheduled to take effect. The EMU will establish a common
currency for European countries that meet the eligibility
criteria and choose to participate. Although the United Kingdom
meets the eligibility criteria, the government has not taken any
action to join the EMU.

From 1979 until 1997 the Conservative Party controlled
Parliament. In the May 1, 1997 general elections, however, the
Labour Party, led by Tony Blair, won a majority in Parliament,
holding 418 of 658 seats in the House of Commons. Mr. Blair, who
was appointed Prime Minister, has launched a number of reform
initiatives, including an overhaul of the monetary policy
framework intended to protect monetary policy from political
forces by vesting responsibility for setting interest rates in a
new Monetary Policy Committee headed by the Governor of the Bank
of England, as opposed to the Treasury. Prime Minister Blair has

A-1

<PAGE>

also undertaken a comprehensive restructuring of the regulation
of the financial services industry. For further information
regarding the United Kingdom, see the Statement of Additional
Information of New Europe Fund.

Investment in Japanese Issuers. Investment in securities of
Japanese issuers involves certain considerations not present with
investment in securities of U.S. issuers. As with any investment
not denominated in the U.S. dollar, the U.S. dollar value of each
Fund's investments denominated in the Japanese yen will fluctuate
with yen-dollar exchange rate movements. Between 1985 and 1995,
the Japanese yen generally appreciated against the U.S. dollar,
but has since fallen from its post-World War II high (in 1995)
against the U.S. dollar.

Japan's largest stock exchange is the Tokyo Stock Exchange, the
First Section of which is reserved for larger, established
companies. As measured by the TOPIX, a capitalization-weighted
composite index of all common stocks listed in the First Section,
the performance of the First Section reached a peak in 1989.
Thereafter, the TOPIX declined approximately 50% through the end
of 1997. On October 13, 1998 the TOPIX closed at 998.98, down
approximately 15% from the end of 1997. Certain valuation
measures, such as price-to-book value and price-to-cash flow
ratios, indicate that the Japanese stock market is near its
lowest level in the last twenty years relative to other world
markets.

In recent years, Japan has consistently recorded large current
account trade surpluses with the U.S. that have caused
difficulties in the relations between the two countries. On
October 1, 1994, the U.S. and Japan reached an agreement that may
lead to more open Japanese markets with respect to trade in
certain goods and services. In June 1995, the two countries
agreed in principle to increase Japanese imports of American
automobiles and automotive parts. Nevertheless it is expected
that the continuing friction between the U.S. and Japan with
respect to trade issues will continue for the foreseeable future.

Each Fund's investments in Japanese issuers will be subject to
uncertainty resulting from the instability of recent Japanese
ruling coalitions. From 1955 to 1993, Japan's government was
controlled by a single political party. Between August 1993 and
October 1996 Japan was ruled by a series of four coalition
governments. As the result of a general election on October 20,
1996, however, Japan returned to a single-party government led by
Ryutaro Hashimoto, a member of the Liberal Democratic Party
("LDP"). While the LDP does not control a majority of the seats
in the parliament, it is only three seats short of the 251 seats
required to attain a majority in the House of Representatives
(down from a 12-seat shortfall just after the October 1996

A-2

<PAGE>

election). The popularity of the LDP declined, however, due to
the dissatisfaction with Mr. Hashimoto's leadership. In the July
1998 House of Councillors election, the LDP's representation fell
to 103 seats from 120 seats. As a result of the LDP's defeat,
Mr. Hashimoto resigned as prime minister and leader of the LDP.
Mr. Hashimoto was replaced by Keizo Obuchi. For the past several
years, Japan's banking industry has been weakened by a
significant amount of problem loans. Japan's banks also have
significant exposure to the current financial turmoil in other
Asian markets. Following the insolvency of one of Japan's
largest banks in November 1997, the government proposed several
plans designed to strengthen the weakened banking sector. In
October 1998, the Japanese parliament approved several new laws
that will make $508 billion in public funds available to increase
the capital of Japanese banks, to guarantee depositors' accounts
and to nationalize the weakest banks. It is unclear whether
these new laws will achieve their intended effect. For further
information regarding Japan, see the Statements of Additional
Information of ALL-ASIA INVESTMENT FUND and INTERNATIONAL FUND.

Investment in Greater China Issuers. China, in particular, but
Hong Kong and Taiwan, as well, in significant measure because of
their existing and increasing economic, and now in the case of
Hong Kong, direct political ties with China, may be subject to a
greater degree of economic, political and social instability than
is the case in the United States.

China's economy is very much in transition. While the government
still controls production and pricing in major economic sectors,
significant steps have been taken toward capitalism and China's
economy has become increasingly market oriented. China's strong
economic growth and ability to attract significant foreign
investment in recent years stem from the economic liberalization
initiated by Deng Xiaoping who assumed power in the late 1970s.
The economic growth, however, has not been smooth and has been
marked by extremes in many respects of inordinate growth, which
has not been tightly controlled, followed by rigid measures of
austerity.

The rapidity and erratic nature of the growth have resulted in
inefficiencies and dislocations, including at times high rates of
inflation.

China's economic development has occurred notwithstanding the
continuation of the power of China's Communist Party and China's
authoritarian government control, not only of centrally planned
economic decisions, but of many aspects of the social structure.
While a significant portion of China's population has benefited
from China's economic growth, the conditions of many leave much
room for improvement. Notwithstanding restrictions on freedom of
expression and the absence of a free press, and notwithstanding

A-3

<PAGE>

the extreme manner in which past unrest has been dealt with, the
1989 Tianamen Square uprising being a recent reminder, the
potential for renewed popular unrest associated with demands for
improved social, political and economic conditions cannot be
dismissed.

Following the death of Deng Xiaoping in February 1997, Jian Zemin
became the leader of China's Communist Party. The transfer of
political power has progressed smoothly and Jiang's popularity
and credibility have gradually increased. Jiang continues to
consolidate his power, but as of yet does not appear to have the
same degree of control as did Deng Xiaoping. Jiang has continued
the market-oriented policies of Deng. Currently, China's major
economic challenge centers on reforming or eliminating
inefficient state-owned enterprises without creating an
unacceptable level of unemployment. Recent capitalistic policies
have in many respects effectively outdated the Communist Party
and the governmental structure, but both remain entrenched. The
Communist Party still controls access to governmental positions
and closely monitors governmental action. Essentially there
exists an inefficient set of parallel bureaucracies and attendant
opportunities for corruption.

In addition to the economic impact of China's internal political
uncertainties, the potential effect of China's actions, not only
on China Itself, but on Hong Kong and Taiwan as well, could also
be significant.

China is heavily dependent on foreign trade, particularly with
Japan, the United States, South Korea and Germany. Political
developments adverse to its trading partners, as well as
political and social repression, could cause the United States
and others to alter their trading policy towards China. For
example, in the United States, the continued extension of most
favored nation trading status to China which is reviewed
regularly and was reviewed in 1998 is an issue of significant
controversy. Loss of that status would clearly hurt China's
economy by reducing its exports. With much of China's trading
activity being funneled through Hong Kong and with trade through
Taiwan becoming increasingly significant, any sizable reduction
in demand for goods from China would have negative implications
for both countries. China is believed to be the largest investor
in Hong Kong and its markets and an economic downturn in China
would be expected to reverberate through Hong Kong's markets as
well.

Although China has committed by treaty to preserve Hong Kong's
autonomy and its economic, political and social freedoms for
fifty years from the July 1, 1997 transfer of sovereignty from
Great Britain to China. Hong Kong is headed by a chief
executive, appointed by the central government of China, whose

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<PAGE>

power is checked by both the government of China and a
Legislative Council. Although Hong Kong voters voted
overwhelmingly for pro-democracy candidates in the recent
election, it remains possible that China could exert its
authority so as to alter the economic structure, political
structure or existing social policy of Hong Kong. Investor and
business confidence in Hong Kong can be significantly affected by
such developments, which in turn can affect markets and business
performance. In this connection, it is noted that a substantial
portion of the companies listed on the Hong Kong Stock Exchange
are involved in real estate-related activities.

The securities markets of China and to a lesser extent Taiwan,
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, GREATER
CHINA '97 Fund 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 U.S. Securities
settlements may in some instances be subject to delays and
related administrative uncertainties.

Foreign investment in the securities markets of China and Taiwan
is restricted or controlled to varying degrees. These
restrictions or controls, which apply to the Greater CHINA '97
FUND may at times limit or preclude investment in certain
securities and may increase the cost and expenses of the Fund.
China and Taiwan require governmental approval prior to
investments by foreign persons or limit investment by foreign
persons to only a specified percentage of an issuer's outstanding
securities or a specific class of securities which may have less
advantageous terms (including price) than securities of the
company available for purchase by nationals. In addition, the
repatriation of investment income, capital or the proceeds of
sales of securities from China and Taiwan is controlled under
regulations, including in some cases the need for certain advance
government notification or authority, and if a deterioration
occurs in a country's balance of payments, the country could
impose restrictions on foreign capital remittances.

GREATER CHINA '97 FUND could be adversely affected by delays in,
or a refusal to grant, any required governmental approval for
repatriation, as well as by the application to it of other
restrictions on investment. The liquidity of the Fund's
investments in any country in which any of these factors exists
could be affected by any such factor or factors on the Fund's
investments. The limited liquidity in certain Greater China
markets is a factor to be taken into account in the Fund's

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<PAGE>

valuation of portfolio securities in this category and may affect
the Fund's ability to dispose of securities in order to meet
redemption requests at the price and time it wishes to do so. It
is also anticipated that transaction costs, including brokerage
commissions for transactions both on and off the securities
exchanges in Greater China countries, will be higher than in the
U.S.

Issuers of securities in Greater China countries are generally
not subject to the same degree of regulation as are U.S. issuers
with respect to such matters as timely disclosure of information,
insider trading rules, restrictions on market manipulation and
shareholder proxy requirements. Reporting, accounting and
auditing standards of Greater China countries may differ, in some
cases significantly, from U.S. standards in important respects,
and less information may be available to investors in securities
of Greater China country issuers than to investors in securities
of U.S. issuers.

Investment in Greater China companies which are in the initial
stages of their development involves greater risk than is
customarily associated with securities of more established
companies. The securities of such companies may have relatively
limited marketability and may be subject to more abrupt or
erratic market movements than securities of established companies
or broad market indices.

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<PAGE>

THE ALLIANCE STOCK FUNDS

ADVISOR CLASS

PROSPECTUS

FEBRUARY 1, 1999

DOMESTIC STOCK FUNDS

-ALLIANCE PREMIER GROWTH FUND
-ALLIANCE GROWTH FUND
-ALLIANCE TECHNOLOGY FUND
-ALLIANCE QUASAR FUND
-THE ALLIANCE FUND

TOTAL RETURN FUNDS

-ALLIANCE GROWTH AND INCOME FUND
-ALLIANCE BALANCED SHARES
-ALLIANCE UTILITY INCOME FUND
-ALLIANCE REAL ESTATE INVESTMENT FUND

GLOBAL STOCK FUNDS

The Alliance Stock Funds provide a broad selection of
investment alternatives to investors seeking capital
growth or high total return.

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

<PAGE>

TABLE OF CONTENTS

PAGE

EXPENSE INFORMATION.....................................

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

DESCRIPTION OF THE FUNDS................................
.....Investment Objectives and Policies.............

Description of Investment Practices.................
Additional Risk Considerations......................

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

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

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

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

FINANCIAL HIGHLIGHTS....................................

<PAGE>

RISK/RETURN SUMMARY

-- how the Fund's average annual returns for one, five and
10 years (or life of the Fund) compare to those of a
broad based securities market index; and

-- changes in the Fund's performance from year to year over
10 years or, if shorter, the life of the Fund.

A Fund's past performance, of course, does not necessarily
indicate how it will perform in the future.

Other important things for you to note:

-- You may gain or lose money by investing in the Funds.

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

<PAGE>

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index

<PAGE>

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Premier Growth Fund from 1992 through 1998:]

YEAR ANNUAL RETURN

1992* 9.29%
1993 9.98%
1994 -5.80%
1995 46.87%
1996 24.14%
1997 32.67%
1998

* Cumulative return since inception (9/28/92).

Best Quarter was: up ____%, ________ quarter, 19__
Worst Quarter was: down ____%, _______quarter, 19__

ALLIANCE GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital. Current income is incidental to the
Fund's objective.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %*
Class B % % %
Class C % % N/A
S&P 500 Index

<PAGE>

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Growth Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -0.22%
1991 63.61%
1992 10.67%
1993 28.99%
1994 -1.15%
1995 29.49%
1996 23.20%
1997 27.09%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE TECHNOLOGY FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation. Current income is
incidental to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of companies expected to benefit
from technological advances and improvements (I.E.,
companies that use technology extensively in the
development of new or improved products or processes).
Within this framework, the Fund may invest in any
company and industry and in any type of security with
potential for capital appreciation. It invests in
well-known, established companies or in new or
unseasoned companies. The Fund also may invest in debt
securities and up to 10% of its total assets in foreign
securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Technology Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 5.99%
1990 -3.08%
1991 54.24%
1992 15.60%
1993 21.63%
1994 28.50%
1995 45.80%
1996 19.41%
1997 4.54%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE QUASAR FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation by pursuing aggressive
investment policies. Current income is incidental to
the Fund's objective.

<PAGE>

established companies and in new and unseasoned
companies. When selecting securities, Alliance
considers the economic and political outlook, the values
of specific securities relative to other investments,
trends in the determinants of corporate profits, and
management capabilities and practices. The Fund also
may invest in non-convertible bonds, preferred stocks,
and foreign securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
Russell 2000 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Quasar Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 28.20%
1990 -23.44%
1991 34.27%
1992 2.81%
1993 16.16%
1994 -7.27%
1995 47.64%
1996 32.62%
1997 17.24%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital and income primarily through
investments in common stocks.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of The
Alliance Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 23.42%
1990 -4.36%
1991 33.91%
1992 14.70%
1993 14.26%
1994 -2.51%
1995 34.84%
1996 17.54%
1997 36.01%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

TOTAL RETURN FUNDS

The Total Return Funds offer investors both growth of capital and
current income through a range of investment alternatives.

ALLIANCE GROWTH & INCOME FUND

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

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Growth And Income Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 25.56%
1990 -1.70%
1991 27.08%
1992 4.52%
1993 9.96%
1994 -4.20%
1995 37.86%
1996 24.13%
1997 28.86%
1998

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will, however, fluctuate over

<PAGE>

shorter periods. For example, during the period shown in the bar
chart, the Fund's:

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE BALANCED SHARES

-- OBJECTIVE: The Fund's investment objective is high
return by investing in a combination of equity and debt
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index
Lehman Brothers
Government/Corporate
Bond Index
Salomon Brothers 1-Year
Treasury Bond Index

Bar Chart

<PAGE>

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Balanced Shares from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 14.13%
1990 -2.20%
1991 20.47%
1992 6.81%
1993 9.93%
1994 -5.79%
1995 26.64%
1996 9.36%
1997 27.13%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE UTILITY INCOME FUND

-- OBJECTIVE: The Fund's investment objective is current
income and capital appreciation through investments in
equity and fixed-income securities of companies in the
utilities industry.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % N/A
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Utility Income Fund from 1993 through 1998:]

YEAR ANNUAL RETURN

1993* 4.42%
1994 -10.94%
1995 22.93%
1996 8.28%
1997 30.65%
1998

* Cumulative return since inception (10/18/93).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE REAL ESTATE INVESTMENT FUND

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of real estate investment
trusts or "REITs" and other real estate industry
companies. The Fund invests in real estate companies
that Alliance believes have strong property fundamentals
and management teams. The Fund seeks to invest in real
estate companies whose underlying portfolios are

<PAGE>

diversified geographically and by property type. The
Fund may invest up to 35% of its total assets in
mortgage-backed securities, which are securities that
directly or indirectly represent participations in or
are collateralized by and payable from, mortgage loans
secured by real property.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A %
Class B %
Class C %
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Real Estate Investment Fund from 1996 through 1998:]

YEAR ANNUAL RETURN

1996* 20.29%
1997 22.98%
1998

* Cumulative return since inception (10/1/96).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors seeking long-term capital
appreciation a range of alternative approaches to investing in
foreign securities.

ALLIANCE NEW EUROPE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investments primarily in
the equity securities of companies based in Europe.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
New Europe Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -11.92%
1991 3.31%
1992 -0.53%
1993 34.56%
1994 4.64%
1995 18.63%
1996 20.58%
1997 16.83%
1998

* Cumulative return since inception (4/2/90).

Best Quarter was: up ___%, ______quarter, 19__

<PAGE>

Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE WORLDWIDE PRIVATIZATION FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

The Fund diversifies its investments among a number of
countries and normally invests in issuers based in four,
and usually considerably more, countries. The Fund may
invest up to 30% of its assets in any one of France,
Germany, Great Britain, Italy, and Japan and may invest
all of its assets in a single world region. The fund
also may invest up to 35% of its total assets in debt
securities and convertible debt securities of privatized
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI EAFE Index

Bar Chart

<PAGE>

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Worldwide Privatization Fund from 1994 through 1998:]

YEAR ANNUAL RETURN

1994* -0.20%
1995 4.91%
1996 23.14%
1997 13.18%
1998

* Cumulative return since inception (6/2/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

<PAGE>

portfolio positions. To the extent consistent with
local market liquidity considerations, the Fund strives
to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on
weakness and to sell or reduce overpriced holdings. The
Fund invests primarily in equity securities and also may
invest in convertible securities.

PERFORMANCE INFORMATION AND BAR CHART

There is no bar chart for the Fund because it has not
completed a full calendar year of operations. The performance
information below is for the first six months of the Fund's
operations.

PERFORMANCE TABLE

6 MONTHS

Class A
Class B
Class C
MSCI World Index

ALLIANCE GLOBAL SMALL CAP FUND

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Global Small Cap Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 24.60%
1990 -24.89%
1991 25.29%
1992 -4.89%
1993 20.04%
1994 -4.55%
1995 27.18%
1996 19.37%
1997 8.08%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
through diversified investments in non-U.S. companies.

<PAGE>

although it may invest a substantial portion of its
assets in one or more foreign countries.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
International Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 29.62%
1990 -20.95%
1991 7.72%
1992 -5.86%
1993 27.51%
1994 5.68%
1995 10.10%
1996 7.20%
1997 1.41%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GREATER CHINA '97 FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of at least 80%
of its total assets in equity securities of Greater
China companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in
equity securities of Greater China companies, which are
companies in China, Hong Kong, and Taiwan. Of these
countries, the Fund expects to invest a significant

<PAGE>

portion of its assets, which may be greater than 50%, in
Hong Kong companies and may invest all of its assets in
Hong Kong companies or companies of either of the other
Greater China countries. The Fund may also invest in
convertible securities and equity-linked debt securities
issued or guaranteed by Greater China companies or
Greater China Governments, their agencies, or
instrumentalities. As of December 31, 1998 the Fund
had approximately ___% of its assets invested in
securities of Hong Kong companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A
Class B
Class C
MSCI All Country Asia
Pacific

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Greater China '97 Fund for 1998:]

YEAR ANNUAL RETURN

1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE ALL-ASIA INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

<PAGE>

and may invest more than 50% of its total assets in
equity securities of Japanese issuers. The Fund also
may invest up to 35% of its total assets in debt
securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities,
and may invest up to 25% of its net assets in
convertible securities. At December 31, 1998, the Fund
had approximately ___% of its total assets invested in
securities of Japanese companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI All Country Asia
Pacific Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
All-Asia Investment Fund from 1994 through 1998:]

YEAR ANNUAL RETURN

1994* 0.10%
1995 10.21%
1996 4.58%
1997 -35.10%
1998

* Cumulative return since inception (11/28/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GLOBAL ENVIRONMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of substantially

<PAGE>

all of its assets in equity securities of companies in
the environmental sector.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % N/A N/A
Class C N/A N/A N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Global Environment Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -5.48%
1991 6.17%
1992 -15.33%
1993 -0.44%
1994 -2.12%
1995 19.30%
1996 31.60%
1997 18.73%
1998

* Cumulative return since inception (6/1/90).

<PAGE>

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

SUMMARY OF PRINCIPAL RISKS

- PARTICULAR INDUSTRIES: Technology Fund, Global
Environment Fund, Utility Income Fund, and Real
Estate Investment.

- TYPES OF ISSUERS: Alliance Fund and Growth Fund
(medium capitalization or mid-cap companies),
technology Fund (companies using new technology),
Worldwide Privatization Fund (companies converting
to private sector ownership), and Global Small Cap
Fund (smaller, less seasoned companies or small cap
companies).

<PAGE>

- COUNTRIES OR GEOGRAPHIC REGIONS: International
Fund, Worldwide Privatization Fund, New Europe
Fund, All-Asia Investment Fund, and Greater China
'97 Fund.

<PAGE>

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 Fund's investments
in a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose
its entire investment.

<PAGE>

PRINCIPAL RISKS BY FUND

The following chart summarizes the Principal Risks of each Fund.
Risks not marked for a particular Fund may, however, still apply
to some extent to that fund at various times.

INTEREST FOCUSED ALLO-
MARKET RATE CREDIT FOREIGN CURRENCY MANAGEMENT PORTFOLIO CATION
FUND RISK RISK RISK RISK RISK RISK RISK RISK

ALLIANCE
FUND X X

ALLIANCE
GROWTH
FUND X X

ALLIANCE
PREMIER
GROWTH
FUND X X X

ALLIANCE
TECHNOLOGY
FUND X X

ALLIANCE
QUASAR
FUND X X

ALLIANCE
INTERNATIONAL
FUND X X X X

ALLIANCE
INTERNATIONAL
PREMIER
GROWTH
FUND X X X X X

ALLIANCE
WORLDWIDE
PRIVATIZATION
FUND X X X X

ALLIANCE
NEW EUROPE
FUND X X X X

<PAGE>

ALLIANCE
ALL-ASIA
INVESTMENT
FUND X X X X

ALLIANCE
GREATER
CHINA
'97 FUND X X X X X

ALLIANCE
GLOBAL
SMALL CAP
FUND X X X X

ALLIANCE
GLOBAL
ENVIRONMENT
FUND X X X X

ALLIANCE
BALANCED
SHARES X X X X X

ALLIANCE
UTILITY
INCOME
FUND X X X X X X

ALLIANCE
GROWTH AND
INCOME
FUND X X X X X X

ALLIANCE
REAL ESTATE
INVESTMENT
FUND X X X

EXPENSE INFORMATION

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

<PAGE>

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)

ADVISOR
CLASS
SHARES

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

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) AND EXAMPLE

OPERATING EXPENSES EXAMPLES

PREMIER GROWTH Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

GROWTH Advisor Class Advisor Class

Management Fees .74% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

TECHNOLOGY Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $

<PAGE>

Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

QUASAR Advisor Class Advisor Class

Management Fees 1.16% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

ALLIANCE FUND Advisor Class Advisor Class

Management Fees .68% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

GROWTH AND INCOME Advisor Class Advisor Class

Management Fees .49% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

BALANCED SHARES Advisor Class Advisor Class

Management Fees .63% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

UTILITY INCOME Advisor Class Advisor Class

Management Fees 0% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

<PAGE>

REAL ESTATE
INVESTMENT Advisor Class Advisor Class

Management Fees .90% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

NEW EUROPE Advisor Class Advisor Class

Management Fees 1.02% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

WORLDWIDE
PRIVATIZATION Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

INTERNATIONAL PREMIER
GROWTH Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GLOBAL SMALL CAP Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

<PAGE>

INTERNATIONAL Advisor Class Advisor Class

Management Fees .85% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GREATER CHINA '97 Advisor Class Advisor Class

ALL-ASIA INVESTMENT Advisor Class Advisor Class

Management Fees .65% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Administration Fees
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GLOBAL ENVIRONMENT Advisor Class Advisor Class

Management Fees 1.10% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

+ Reflects Alliance's waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating
expenses. The level of waiver or reimbursement may be
changed upon 60 days' notice to the Fund.

<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.

DEPOSITARY RECEIPTS include American Depositary Receipts
("ADRS"), Global Depositary Receipts ("GDRS") and other types of
depositary receipts.

FIXED-INCOME SECURITIES are debt securities and dividend-paying
preferred stocks and include floating rate and variable rate
instruments.

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

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

TYPES OF COMPANIES

<PAGE>

ELIGIBLE COMPANIES are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.

GREATER CHINA COUNTRIES are the People's Republic of China
("China"), the Hong Kong Special Administrative Region of the
People's Republic of China ("Hong Kong") and the Republic of
China ("Taiwan").

<PAGE>

RATING AGENCIES, RATED SECURITIES, AND INDEXES

DUFF & PHELPS is Duff & Phelps Credit Rating Co.

EAFE INDEX is Morgan Stanley Capital International Europe,
Australasia and Far East ("EAFE") Index.

FITCH is Fitch IBCA, Inc.

INVESTMENT GRADE SECURITIES are fixed-income securities rated Baa
and above by Moody's or B and above by S&P, Duff & Phelps or
Fitch, or determined by Alliance to be of equivalent quality.

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

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

S&P 500 INDEX is S&P's 500 Composite Stock Price Index, a widely
recognized unmanaged index of market activity.

OTHER

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

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

COMMISSION is the Securities and Exchange Commission.

EXCHANGE is the New York Stock Exchange.

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

_______________________________________________________________

DESCRIPTION OF THE FUNDS
_______________________________________________________________

<PAGE>

Please note that:

- -- Additional discussion of the Funds' investments, including
the risks of the investments, can be found in the discussion
under DESCRIPTION OF INVESTMENT PRACTICES following this
section.

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

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
the U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

Alliance's investment strategy for the Fund emphasizes stock
selection and investment in the securities of a limited number of

<PAGE>

The Fund also may:

- -- invest up to 20% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
it;

- -- invest up to 5% of its net assets in rights or warrants;

- -- invest up to 15% of its total assets in securities of foreign
issuers whose common stocks are eligible for purchase by it;

- -- purchase and sell exchange-traded index options and stock
index futures contracts; and

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that

<PAGE>

changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GROWTH FUND

The Fund also may:

- -- invest in zero-coupon and payment-in-kind bonds;

- -- invest in foreign securities although not generally in excess
of 15% of its total assets;

- -- buy or sell foreign currencies, options on foreign
currencies, foreign currency futures contracts (and related
options) and deal in forward foreign exchange contracts;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to 25% of its total
assets;

- -- purchase and sell securities on a forward commitment basis;

- -- buy and sell stock index futures contracts and options on
those contracts and on stock indices;

<PAGE>

- -- purchase and sell futures contracts and options on futures
and U.S. Treasury securities;

- -- write covered call and put options; and

- -- purchase and sell put and call options.

ALLIANCE TECHNOLOGY FUND

The Fund also may:

- -- invest up to 10% of its total assets in warrants; and

- -- make loans of portfolio securities of up to 30% of its total
assets.

<PAGE>

ALLIANCE QUASAR FUND

The Fund also may:

- -- make short sales of securities against the box but not more
than 15% of its net assets may be deposited on short sales;
and

- -- write covered call options of up to 15% of its total assets
and purchase and sell put and call options written by others
of up to, for all options, 10% of its total assets.

THE ALLIANCE FUND

<PAGE>

The Fund also may:

- -- write exchange-traded covered call options on up to 25% of
its total assets;

- -- make secured loans of portfolio securities equal in value up
to 25% of its total assets to brokers, dealers and financial
institutions;

TOTAL RETURN FUNDS

The Total Return Funds provide a range of investment alternatives
to investors seeking both growth of capital and current income.

ALLIANCE GROWTH AND INCOME FUND

<PAGE>

ALLIANCE BALANCED SHARES

The Fund also may:

- -- enter into contracts for the purchase or sale for future
delivery of foreign currencies;

- -- purchase and write put and call options on foreign currencies
and enter into forward foreign currency exchange contracts
for hedging purposes

- -- subject to market conditions, write covered call options
listed on a domestic exchange to realize income.

ALLIANCE UTILITY INCOME FUND

<PAGE>

The utilities industry consists of companies engaged in:

The Fund also may:

- -- invest up to 30% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

<PAGE>

- -- invest up to 5% of its net assets in rights or warrants;

- -- purchase and sell exchange-traded options on any securities
index composed of the types of securities in which it may
invest;

- -- purchase and write call and put options on foreign currencies
traded on U.S. and foreign exchanges or over-the-counter for
hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities of up to 20% of
its total assets.

<PAGE>

ALLIANCE REAL ESTATE INVESTMENT FUND

In selected Real Estate Equity Securities, Alliance's analysis
will focus on determining the degree to which the company

<PAGE>

desirable markets across the country, diversified geographically
and by property type.

The Fund may invest in short-term investments including:
corporate commercial paper and other short-term commercial

<PAGE>

The Fund also may:

- -- invest up to 10% of its net assets in rights or warrants;

- -- invest up to 15% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
the Fund;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to seven days'
duration;

- -- enter into forward commitment transactions as long as the
Fund's aggregate commitments under such transactions are not
more than 30% of the Fund's total assets;

- -- enter into standby commitment agreements; and

<PAGE>

limited diversification, and could be significantly affected by
changes in tax laws.

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors the opportunity to
participate in the potential for long-term capital appreciation
available from investment in foreign securities.

ALLIANCE NEW EUROPE FUND

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants and rights
to purchase equity securities of European companies;

- -- purchase and sell forward contracts;

- -- write covered call or put options and sell and purchase
exchange-traded put and call options, including exchange-
traded index options;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make secured loans of portfolio securities of up to 30% of
its total assets;

- -- enter into forward commitments for the purchase or sale of
securities; and

- -- enter into standby commitment agreements.

<PAGE>

ALLIANCE WORLDWIDE PRIVATIZATION FUND

<PAGE>

The Fund may invest all of its assets within a single region of
the world.

The Fund also may:

- -- invest up to 20% of its total assets in rights or warrants;

<PAGE>

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities equal in value of
up to 30% of its total assets to entities with which it can
enter into repurchase agreements.

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

<PAGE>

there is, of course, no assurance that the Fund's investment
objective will be met.

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in convertible
securities of issuers whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its total assets in rights or warrants;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

<PAGE>

- -- purchase or sell forward contracts;

- -- enter into standby commitment agreements;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain short positions of
no more than 5% of its net assets as collateral for short
sales; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

ALLIANCE GLOBAL SMALL CAP FUND

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts or other securities
representing securities of companies based in countries other
than the U.S.;

- -- purchase or sell forward foreign currency contracts;

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in non-U.S. companies and in smaller
companies will be more volatile and may differ substantially from
the overall market.

ALLIANCE INTERNATIONAL FUND

<PAGE>

principal activities and interests outside the U.S., and foreign
government securities. Normally, the Fund will invest more than
80% of its assets in these types of companies.

The Fund also may:

- -- purchase or sell forward foreign currency exchange contracts;

- -- write covered call or put options, sell and purchase U.S. or
foreign exchange-listed put and call options, including
exchange-traded index options;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make loans of portfolio securities equal in value up to 30%
of its total assets; and

- -- enter into repurchase agreements of up to seven days'
duration of up to 10% of the Fund's total assets.

<PAGE>

ALLIANCE GREATER CHINA '97 FUND, INC.

<PAGE>

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

<PAGE>

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 20% of its net assets in loans and other direct
debt securities;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, securities issued by foreign
government entities, or common stock, and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

All or some of the policies and practices listed above may not be
available to the Fund in the Greater China countries and the Fund
will utilize these policies only to the extent permissible.

<PAGE>

ALLIANCE ALL-ASIA INVESTMENT FUND

<PAGE>

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 25% of its net assets in loans and other direct
debt instruments;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of

<PAGE>

U.S. Government securities, securities issued by foreign
government entities, or common stock and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

ALLIANCE GLOBAL ENVIRONMENT FUND

The Fund invests in two categories of Eligible Companies --
Environmental Companies and Beneficiary Companies. The Fund may

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- enter into forward foreign currency transactions for hedging
purposes;

- -- invest in currency futures and options on such futures for
hedging purposes; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

DESCRIPTION OF INVESTMENT PRACTICES

<PAGE>

institution affiliated or unaffiliated with the trustee or
originator of the trust.

<PAGE>

such securities. Investment in equity-linked debt securities may
be considered to be speculative.

<PAGE>

forward contracts will be limited to hedging involving either
specific transactions or portfolio positions. GROWTH FUND also
may also purchase and sell foreign currency on a spot basis.

<PAGE>

In purchasing an option, a Fund would be in a position to realize
a gain if, during the option period, the price of the underlying
security increased (in the case of a call) or decreased (in the

<PAGE>

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.

Options purchased or written by a 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>

contract was originally struck. No physical delivery of the
securities underlying the index is made.

<PAGE>

FUTURE DEVELOPMENTS. A Fund may, following written notice to its
shareholders, take advantage of other investment practices that

<PAGE>

ADDITIONAL RISK CONSIDERATIONS

Investment in certain of the Funds involves the special
risk considerations described below. These risks may be
heightened when investing in emerging markets.

<PAGE>

expenses in the currency at the time they were incurred. In
light of these risks, a Fund may engage in currency hedging
transactions, as described above, which involve certain special
risks.

<PAGE>

may be made substantially earlier than their final distribution
dates.

<PAGE>

the Fund's portfolio of debt or other fixed-income securities may
be extended as a result of lower than anticipated prepayment
rates.

Certain lower-rated may contain call or buy-back features that
permit the issuers thereof to call or repurchase such securities.
Such securities may present risks based on prepayment

<PAGE>

expectations. If an issuer exercises such a provision, a Fund
may have to replace the called security with a lower-yielding
security, resulting in a decreased rate of return to the Fund.

<PAGE>

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Each Fund's Adviser is Alliance Capital Management, L.P., 1345
Avenue of the Americas, New York, NY 10105. Alliance is a
leading international investment adviser supervising client
accounts with assets as of December 31, 1998 totaling more than
$___ billion (of which approximately $__ billion represented
assets of investment companies). Alliance's clients are
primarily major corporate employee benefit plans, public employee
retirement systems, investment companies, foundations, and
endowment funds. The __ registered investment companies, with
more than ___ separate portfolios, managed by Alliance currently
have over two million shareholders. As of December 31, 1998,
Alliance was retained as investment manager for over [ ] of the
Fortune 100 Companies.

Alliance provides investment advisory services and order
placement facilities for the Funds. For these advisory services,
the Funds paid Alliance as a percentage of net assets:

FEE AS A PERCENTAGE FISCAL YEAR
FUND OF NET ASSETS* ENDING

* Fees are stated net of waivers and/or reimbursements. See
the "Fee Table" at the beginning of the Prospectus for more
information about fee waivers.

In connection with providing advisory services to GREATER CHINA
'97 FUND, Alliance has, at its expense, retained as a consultant
New Alliance, a joint venture company headquartered in Hong Kong,
which was formed in 1997 by Alliance and Sun Hung Kai Properties

<PAGE>

Limited. New Alliance provides Alliance with ongoing, current,
and comprehensive information and analysis of conditions and
developments in Greater China countries.

PORTFOLIO MANAGER

EMPLOYEE; PRINCIPAL OCCUPATION
YEAR; DURING THE PAST
FUND TITLE (5) YEARS

Premier Growth Alfred Harrison; since Associated with Alliance
inception-Vice Chairman of
Alliance Capital Management
Corporation (ACMC)

Growth Tyler Smith; since inception- Associated with Alliance
Senior Vice President of ACMC

Technology Peter Anastos; since 1992- Associated with Alliance
Senior Vice President of ACMC
Gerald T. Malone; since 1992-
Senior Vice President of ACMC

Quasar Alden M. Stewart since 1994- Associated with Alliance
Executive Vice President of
ACMC*
Randall E. Haase since 1994- Associated with Alliance
Senior Vice President of ACMC

Alliance Fund Alden M. Stewart; since 1997- (see above)
(see above)
Randall E. Haase; since 1997- (see above)
(see above)

Growth & Income Paul Rissman; since 1994- Associated with Alliance
Senior Vice President of ACMC

Balanced Shares Paul Rissman since 1997- (see above)

<PAGE>

(see above)

Utility Income Paul Rissman since 1996- (see above)
(see above)

Real Estate Daniel G. Pine, since 1996- Associated with Alliance
Investment Senior Vice President of since 1996; prior thereto;
ACMC Senior Vice President of
Desai Capital Management
David Kruth; since 1997- Associated with Alliance
Vice President of ACMC since 1997; prior thereto;
Senior Vice President of
Yarmouth Group

New Europe Steven Beinhacker; since Associated with Alliance
1997-Vice President of ACMC

Worldwide Mark H. Breedon; since Associated with Alliance
Privatization inception Senior Vice
President of ACMC and Director
and Vice President of Alliance
Capital Limited**

International Alfred Harrison; since 1998- (see above)
Premier Growth (see above)
Thomas Kamp since 1998- Associated with Alliance
Senior Vice President of ACMC

Global Small Cap Alden M. Stewart; since 1994- (see above)
(see above)
Randall E. Haase; since 1994- (see above)
(see above)
Ronald L. Simcoe; since 1993- Associated with Alliance
Vice President of ACMC

International Bruce W. Calvert; since 1998- Associated with Alliance
Vice Chairman and Chief
Investment Officer of ACMC

Greater China '97 Matthew W.S. Lee; since 1997- Associated with Alliance
Vice President of ACMC since 1997; prior thereto;
associated with National
Mutual Funds Management
(Asia) and James Capel and
Co. since prior to 1994

All-Asia Investment Hiroshi Motoki; since 1998- Associated with Alliance
Senior Vice President of since 1994; prior thereto;
ACMC and director of associated with Ford Motor
Japanese/Asian Equity Company
research

<PAGE>

Global Environment Linda Bolton Weiser; since Associated with Alliance
1998- Vice President of ACMC

* The sole general partner of Alliance.
** An indirect wholly-owned subsidiary of Alliance.

PERFORMANCE OF SIMILARLY MANAGED PORTFOLIOS. In addition to
managing the assets of PREMIER GROWTH FUND, Mr. Harrison has
ultimate responsibility for the management of discretionary tax-
exempt accounts of institutional clients managed as described
below without significant client-imposed restrictions
("Historical Portfolios"). These accounts have substantially the
same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and
techniques as those for PREMIER GROWTH FUND, except for the
ability of PREMIER GROWTH FUND to use futures and options as
hedging tools and to invest in warrants. The Historical
Portfolios are also not subject to certain limitations,
diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which PREMIER GROWTH FUND, as a
registered investment company, is subject and which, if
applicable to the Historical Portfolios, may have adversely
affected the performance results of the Historical Portfolios.
See "Investment Objective and Policies."

Set forth below is performance data provided by Alliance relating
to the Historical Portfolios for each of the nineteen full
calendar years during which Mr. Harrison has managed the
Historical Portfolios as an employee of Alliance and cumulatively
through September 30, 1998. As of September 30, 1998, the assets
in the Historical Portfolios totaled approximately $[ ] billion
and the average size of an institutional account in the
Historical Portfolio was $[ ] million. Each Historical
Portfolio has a nearly identical composition of investment
holdings and related percentage weightings.

The performance data is net of all fees (including brokerage
commissions) charged to those accounts. The performance data is
computed in accordance with standards formulated by the
Association of Investment Management and Research and has not
been adjusted to reflect any fees that will be payable by PREMIER
GROWTH FUND, which are higher than the fees imposed on the
Historical Portfolio and will result in a higher expense ratio
and lower returns for PREMIER GROWTH FUND. Expenses associated
with the distribution of Class A, Class B and Class C shares of
PREMIER GROWTH FUND in accordance with the plan adopted by
PREMIER GROWTH FUND's Board of Directors pursuant to Rule 12b-1
under the 1940 Act ("distribution fees") are also excluded. See
"Expense Information." The performance data has also not been
adjusted for corporate or individual taxes, if any, payable by
the account owners.

<PAGE>

As reflected below, the Historical Portfolios have over time
performed favorably when compared with the performance of
recognized performance indices. The S&P 500 Index is a widely
recognized, unmanaged index of market activity based upon the
aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The S&P 500
Index reflects the total return of securities comprising the
Index, including changes in market prices as well as accrued
investment income, which is presumed to be reinvested. The
Russell 1000 universe of securities is compiled by Frank Russell
Company and is segmented into two style indices, based on the
capitalization-weighted median book-to-price ratio of each of the
securities. At each reconstitution, the Russell 1000 constituents
are ranked by their book-to-price ratio. Once so ranked, the
breakpoint for the two styles is determined by the median market
capitalization of the Russell 1000. Thus, those securities
falling within the top fifty percent of the cumulative market
capitalization (as ranked by descending book-to-price) become
members of the Russell Price-Driven Indices. The Russell 1000
Growth Index is, accordingly, designed to include those Russell
1000 securities with a greater-than-average growth orientation.
In contrast with the securities in the Russell Price-Driven
Indices, companies in the Growth Index tend to exhibit higher
price-to-book and price-earnings ratios, lower dividend yield and
higher forecasted growth values.

To the extent PREMIER GROWTH FUND does not invest in U.S. common
stocks or utilizes investment techniques such as futures or
options, the S&P 500 Index and Russell 1000 Growth Index may not
be substantially comparable to PREMIER GROWTH FUND. The S&P 500
Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time
period shown. The S&P 500 Index and Russell 1000 Growth Index do
not reflect the deduction of any fees. If PREMIER GROWTH FUND
were to purchase a portfolio of securities substantially
identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, PREMIER GROWTH FUND's performance
relative to the index would be reduced by PREMIER GROWTH FUND's
expenses, including brokerage commissions, advisory fees,

<PAGE>

distribution fees, custodial fees, transfer agency costs and
other administrative expenses, as well as by the impact on
PREMIER GROWTH FUND's shareholders of sales charges and income
taxes.

<PAGE>

SCHEDULE OF COMPOSITE INVESTMENT PERFORMANCE-
HISTORICAL PORTFOLIOS*

RUSSELL LIPPER
1000 GROWTH
HISTORICAL S&P 500 GROWTH FUND
PREMIER PORTFOLIOS INDEX INDEX INDEX
GROWTH TOTAL TOTAL TOTAL TOTAL
FUND RETURN** RETURN RETURN RETURN

Year ended December:
1998
1997*** 27.05% 34.64% 33.36% 30.49% 25.30%
1996*** 18.84 22.06 22.96 23.12 17.48
1995*** 40.66 39.83 37.58 37.19 32.65
1994 (9.78) (4.82) (1.32) (1.57)
1993 5.35 10.54 10.08 11.98
1992 --- 12.18 7.62 7.63
1991 --- 38.91 30.47 35.20
1990 --- (1.57) (3.10) (0.26) (5.00)
1989 --- 38.80 31.69 35.92 28.60
1988 --- 10.88 16.61 11.27 15.80
1987 -- 8.49 5.25 5.31 1.00
1986 --- 27.40 18.67 15.36 15.90
1985 --- 37.41 31.73 32.85 30.30
1984 --- (3.31) 6.27 (.95) (2.80)
1983 --- 20.80 22.56 15.98 22.30
1982 --- 28.02 21.55 20.46 20.20
1981 --- (1.09) (4.92) (11.31) (8.40)
1980 --- 50.73 32.50 39.57 37.30
1979 --- 30.76 18.61 23.91 27.40

Cumulative total
return for
the period
January 1, 1979 to
December 31, 1998 --- %

** Assumes imposition of the maximum advisory fee charged by
Alliance for any Historical Portfolio for the period
involved.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS

RUSSELL LIPPER
PREMIER S&P 1000 GROWTH
GROWTH HISTORICAL 500 GROWTH FUND
FUND PORTFOLIOS INDEX INDEX INDEX
% % % % %

One year
Three years
Five years
Ten years
Since January 1,
1979

__________________________

* Since inception on 9/28/92

The Funds' Statements of Additional Information has more detailed
information about Alliance and other Fund service providers.

PURCHASE AND SALE OF SHARES

HOW THE FUND VALUES ITS SHARES

The Funds' net asset value or NAV is calculated at 4 p.m. Eastern
time each day the Exchange is open for business. To calculate
NAV, a 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 Funds' value their 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 Funds' directors believe accurately
reflect fair market value.

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

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:

100

<PAGE>

-- 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 Funds; 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.

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

HOW TO EXCHANGE SHARES

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

101

<PAGE>

HOW TO SELL SHARES

You may "redeem" your shares (i.e., sell your shares to a Fund)
on any day the NYSE is open, either directly or through your
financial intermediary. Your sales price will be the next-
determined NAV after the Fund receives your sales request in
proper form. Normally, proceeds will be sent to you within 7
days. If you recently purchased your shares by check or
electronic funds transfer, you cannot redeem any portion of it
until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up
to 15 days). If you are in doubt about what procedures or
documents are required by your fee-based program or employee
benefit plan to sell your shares, you should contact your
financial representative.

-- Selling Shares Through Your Financial Representative

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

-- Selling Shares Directly to the Fund

BY MAIL:

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

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

-- 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.

102

<PAGE>

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 may be
sent directly to your bank. Otherwise, the proceeds
will be mailed to you.

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

OTHER

If you are a Fund shareholder through an account established
under a fee-based program, your fee-based program may impose
requirements with respect to the purchase, sale, or exchange of
Advisor Class shares of a 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 a Fund,
including requirements as to the minimum initial and subsequent
investment amounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

103

<PAGE>

to a record date for a dividend. There is no sales or other
charge in connection with the reinvestment of dividends or
capital gains distributions. Cash dividends may be paid in
check, or at your election, electronically via the ACH network.
There is no sales or other charge on the reinvestment of Fund
distributions.

While it is the intention of each 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 a Fund
will pay any dividends or realize any capital gains. Since REITs
pay distributions based on cash flow, without regard to
depreciation and amortization, it is likely that a portion of the
distributions paid to REAL ESTATE INVESTMENT FUND and
subsequently distributed to shareholders may be a nontaxable
return of capital. The final determination of the amount of a
Fund's return of capital distributions for the period will be
made after the end of each calendar year.

104

<PAGE>

be permitted to claim a full credit or deduction for the amount
of such taxes.

If you buy shares just before a 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.

105

<PAGE>

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 Funds. If a holder of Advisor Class shares
(i) ceases to participate in the fee-based program or plan, or to
be associated with an eligible investment advisor or financial
intermediary or (ii) is otherwise no longer eligible to purchase
Advisor Class shares (each a "Conversion Event"), then all
Advisor Class shares held by the shareholder will convert
automatically and without notice, to Class A shares of the same
Fund during the calendar month following the month in which the
Fund is informed of the occurrence of the Conversion Event. The
failure of a shareholder or a fee-based program to satisfy the
minimum investment requirements to purchase Advisor Class shares
will not constitute a Conversion Event. The conversion would
occur on the basis of the relative NAV of the two classes and
without the imposition of any sales load, fee or other charge.

DESCRIPTION OF CLASS A SHARES

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

GENERAL INFORMATION

106

<PAGE>

telephone requests. The telephone service may be suspended or
terminated at any time without notice.

107

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand
the Fund's financial performance for the period of the Fund's
operations. Certain information reflects financial information
for a single Fund share. The total return in the table
represents the rate that an investor would have earned (or lost)
on an investment in the Fund (assuming investment of all
dividends and distributions). The information has been audited
by ______________, the Fund's independent auditors, whose report,
along with Fund's financial statements, appears in the Statement
of Additional Information, which is available upon request.

YEAR ENDED
_______________________________________

1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

108

<PAGE>

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

- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS

- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)

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

BY MAIL: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, N.J. 07096-1520

BY PHONE: For Information: (800) 221-5672
For Literature: (800) 227-4618

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

IN PERSON: at the SEC's Public Reference Room in
Washington, D.C.

BY PHONE: 1-800-SEC-0330

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

ON THE INTERNET: www.sec.gov

You also may find more information about Alliance and the Funds
on the internet at www.Alliancecapital.com

109

<PAGE>

APPENDIX A

The following is additional information about the United Kingdom,
Japan and Greater China countries.

INVESTMENT IN UNITED KINGDOM ISSUERS. Investment in securities
of United Kingdom issuers involves certain considerations not
present with investment in securities of U.S. issuers. As with
any investment not denominated in the U.S. dollar, the U.S.
dollar value of the Fund's investment denominated in the British
pound sterling will fluctuate with pound sterling-dollar exchange
rate movements. Between 1972, when the pound sterling was
allowed to float against other currencies, and the end of 1992,
the pound sterling generally depreciated against most major
currencies, including the U.S. dollar. Between September and
December 1992, after the United Kingdom's exit from the Exchange
Rate Mechanism of the European Monetary System, the value of the
pound sterling fell by almost 20% against the U.S. dollar. The
pound sterling has since recovered due to interest rate cuts
throughout Europe and an upturn in the economy of the United
Kingdom. The average exchange rate of the U.S. dollar to the
pound sterling was 1.50 in 1993 and 1.64 in 1997. On October 13,
1998 the U.S. dollar-pound sterling exchange rate was 1.71.

A-1

<PAGE>

of England, as opposed to the Treasury. Prime Minister Blair has
also undertaken a comprehensive restructuring of the regulation
of the financial services industry. For further information
regarding the United Kingdom, see the Statement of Additional
Information of New Europe Fund.

INVESTMENT IN JAPANESE ISSUERS. Investment in securities of
Japanese issuers involves certain considerations not present with
investment in securities of U.S. issuers. As with any investment
not denominated in the U.S. dollar, the U.S. dollar value of each
Fund's investments denominated in the Japanese yen will fluctuate
with yen-dollar exchange rate movements. Between 1985 and 1995,
the Japanese yen generally appreciated against the U.S. dollar,
but has since fallen from its post-World War II high (in 1995)
against the U.S. dollar. Japan's largest stock exchange is the
Tokyo Stock Exchange, the First Section of which is reserved for
larger, established companies. As measured by the TOPIX, a
capitalization-weighted composite index of all common stocks
listed in the First Section, the performance of the First Section
reached a peak in 1989. Thereafter, the TOPIX declined
approximately 50% through the end of 1997. On October 13, 1998
the TOPIX closed at 998.98, down approximately 15% from the end
of 1997. Certain valuation measures, such as price-to-book value
and price-to-cash flow ratios, indicate that the Japanese stock
market is near its lowest level in the last twenty years relative
to other world markets.

A-2

<PAGE>

the dissatisfaction with Mr. Hashimoto's leadership. In the July
1998 House of Councillors election, the LDP's representation fell
to 103 seats from 120 seats. As a result of the LDP's defeat,
Mr. Hashimoto resigned as prime minister and leader of the LDP.
Mr. Hashimoto was replaced by Keizo Obuchi. For the past several
years, Japan's banking industry has been weakened by a
significant amount of problem loans. Japan's banks also have
significant exposure to the current financial turmoil in other
Asian markets. Following the insolvency of one of Japan's
largest banks in November 1997, the government proposed several
plans designed to strengthen the weakened banking sector. In
October 1998, the Japanese parliament approved several new laws
that will make $508 billion in public funds available to increase
the capital of Japanese banks, to guarantee depositors' accounts
and to nationalize the weakest banks. It is unclear whether
these new laws will achieve their intended effect. For further
information regarding Japan, see the Statements of Additional
Information of ALL-ASIA INVESTMENT FUND and INTERNATIONAL FUND.

INVESTMENT IN GREATER CHINA ISSUERS. China, in particular, but
Hong Kong and Taiwan, as well, in significant measure because of
their existing and increasing economic, and now in the case of
Hong Kong, direct political ties with China, may be subject to a
greater degree of economic, political and social instability than
is the case in the United States.

The rapidity and erratic nature of the growth have resulted in
inefficiencies and dislocations, including at times high rates of
inflation.

A-3

<PAGE>

1989 Tianamen Square uprising being a recent reminder, the
potential for renewed popular unrest associated with demands for
improved social, political and economic conditions cannot be
dismissed.

A-4

<PAGE>

Legislative Council. Although Hong Kong voters voted
overwhelmingly for pro-democracy candidates in the recent
election, it remains possible that China could exert its
authority so as to alter the economic structure, political
structure or existing social policy of Hong Kong. Investor and
business confidence in Hong Kong can be significantly affected by
such developments, which in turn can affect markets and business
performance. In this connection, it is noted that a substantial
portion of the companies listed on the Hong Kong Stock Exchange
are involved in real estate-related activities. The securities
markets of China and to a lesser extent Taiwan, 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, GREATER CHINA '97
Fund 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 U.S. Securities settlements may
in some instances be subject to delays and related administrative
uncertainties.

A-5

<PAGE>

redemption requests at the price and time it wishes to do so. It
is also anticipated that transaction costs, including brokerage
commissions for transactions both on and off the securities
exchanges in Greater China countries, will be higher than in the
U.S.

A-6

<PAGE>

(LOGO)
ALLIANCE INTERNATIONAL FUND
_______________________________________________________________
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, 1999
_______________________________________________________________

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

Table Of Contents
Page

Description of the Fund...............................
Management of the Fund................................
Expenses of the Fund..................................
Purchase of Shares....................................
Redemption and Repurchase of Shares...................
Shareholder Services..................................
Net Asset Value.......................................
Dividends, Distributions and Taxes....................
Brokerage and Portfolio Transactions..................
General Information...................................
Report of Independent Auditors
and Financial Statements............................
Appendix A: Futures Contracts and Options on
Futures Contracts and Foreign Currencies............ A-1
Appendix B: Additional Information About Japan........ B-1
Appendix C: Certain Employee Benefit Plans ........... C-1

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

<PAGE>

_______________________________________________________________

DESCRIPTION OF THE FUND
_______________________________________________________________

Investment Objective And Policies

Alliance International Fund (the "Fund") is diversified,
open-end investment company. The fundamental investment
objective of the Fund is to seek to obtain a total return on its
assets from long-term growth of capital and from income
principally through a broad portfolio of marketable securities of
established non-United States companies (e.g., incorporated
outside the United States), companies participating in foreign
economies with prospects for growth, and foreign government
securities. The management of the Fund considers it consistent
with this objective to acquire securities of companies
incorporated in the United States and having their principal
activities and interests outside of the United States. The Fund
intends to be invested primarily in such issuers and under normal
circumstances more than 80% of its assets will be so invested.
The foregoing investment objective is a fundamental policy of the
Fund and cannot be changed without shareholder approval.

In seeking its objective, the Fund expects to invest its
assets primarily in common stocks of established non-United
States companies which in the opinion of Alliance Capital
Management L.P. (the "Adviser") have potential for growth of
capital or income or both. However, there is no requirement that
the Fund invest exclusively in common stocks or other equity
securities, and, if deemed advisable, the Fund may invest in any
other type of investment grade security including, but not
limited to, convertible securities, preferred stocks, bonds,
notes and other debt securities of foreign issuers (Euro-dollar
securities), as well as in warrants, or obligations of the United
States or foreign governments and their political subdivisions.

Investments may be made for capital appreciation or for
income or any combination of both for the purpose of achieving a
higher overall return than might otherwise be obtained solely
from investing for growth of capital or for income. There is no
limitation on the percent or amount of the Fund's assets which
may be invested for growth or income, and therefore, at any point
in time, the investment emphasis may be placed solely or
primarily on growth of capital or solely or primarily on income.
There can be no assurance, of course, that the Fund will achieve
its objective.

In determining whether the Fund will be invested for
capital appreciation or for income or any combination of both,
the Adviser regularly analyzes a broad range of international

<PAGE>

equity and fixed-income markets in order to assess the degree of
risk and level of return that can be expected from each market.
Based upon the current assessment of the Adviser, the Fund
expects that its objective will, over the long term, be met
principally through investing in the equity securities of
established non-United States companies which, in the opinion of
the Adviser, have potential for growth of capital. However, the
Fund can be expected during certain periods to place substantial
emphasis on income through investment in foreign debt securities
when it appears that the total return from such securities will
equal or exceed the return on equity securities.

When management believes that the total return on debt
securities will equal or exceed the return on common stocks, the
Fund may, in seeking its objective of total return, substantially
increase its holdings in such debt securities. The Fund may
establish and maintain temporary cash balances for defensive
purposes or to enable it to take advantage of buying
opportunities.

The Adviser believes a portfolio of investments solely
in issuers located in the United States or in any other single
country ties the performance of such a portfolio to the economic
and market swings of one country, and that diversification by
country, as well as by industry, can alleviate the impact of
downturns in any one country. The Fund intends to diversify
investments broadly among countries and normally to have
represented in the portfolio business activities of not less than
three different countries, excluding the United States. The Fund
may invest all or a substantial portion of its assets in one or
more of such countries. At June 30, 1998, approximately 15% of
the Fund's assets were invested in securities of Japanese
issuers. For a description of Japan, see Appendix B. The Fund
may purchase securities of companies, wherever organized, which,
in the judgment of the Adviser, have their principal activities
and interests outside the United States determined on the basis
of such factors as location of the company's assets, or
personnel, or sales and earnings.

It is the present intention of the Adviser to invest in
companies based in (or governments of or within) the Far East
(Japan, the Special Administrative Region of China ("Hong Kong"),
Singapore and Malaysia), Western Europe (United Kingdom, Germany,
The Netherlands, France, Switzerland), Australia, Canada, and
such other areas and countries as the Adviser may determine from
time to time. However, investments may be made from time to time
in companies in, or governments of, developing countries as well
as developed countries. Although there is no universally
accepted definition, a developing country is generally considered
to be a country which is in the initial stages of its
industrialization cycle with a low per capita gross national

<PAGE>

product. Historical experience indicates that the markets of
developing countries have been more volatile than the markets of
the more mature economies of developed countries; however, such
markets often have provided higher rates of return to investors.
Shareholders should be aware that investing in the equity and
fixed-income markets of developing countries involves exposure to
economic structures that are generally less diverse and mature,
and to political systems which can be expected to have less
stability than those of developed countries. Management at
present does not intend to invest more than 10% of the Fund's
total assets in companies in, or governments of, developing
countries.

The Adviser, in determining the composition of the
Fund's portfolio, will initially seek the appropriate
distribution of investments among various countries and
geographic regions. Accordingly, the Adviser will consider the
following factors in making investment decisions on this basis:
prospects for relative economic growth between foreign countries;
expected levels of inflation; government policies influencing
business conditions; the outlook for currency relationships; and
the range of individual investment opportunities available to the
international portfolio investor.

The Adviser will, in analyzing individual companies for
the investment, look for one or more of the following
characteristics: an above average earnings growth per share;
high return on invested capital; healthy balance sheet; sound
financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product
development and marketing; efficient service; pricing
flexibility; strength of management; and general operating
characteristics which will enable the companies to compete
successfully in their marketplace. While current dividend income
is not a prerequisite in the selection of portfolio companies,
the companies in which the Fund invests normally will have a
record of paying dividends for at least one year, and will
generally be expected to increase the amounts of such dividends
in future years as earnings increase.

Foreign securities such as those purchased by the Fund
may be subject to foreign government taxes which could reduce the
yield on such securities, although a shareholder otherwise
subject to U.S. federal income taxes may, subject to certain
limitations, be entitled to claim a credit or deduction for U.S.
federal income tax purposes for his or her proportionate share of
such foreign taxes paid by the Fund.

Under exceptional economic or market conditions abroad,
the Fund may temporarily invest for defensive purposes all or a
major portion of its assets in U.S. government obligations or

<PAGE>

debt obligations of companies incorporated in and having their
principal activities in the United States. The Fund may also
from time to time invest its temporary cash balances in United
States, as well as foreign, short-term, high-grade money market
instruments, including, but not limited to, government
obligations, certificates of deposit, bankers' acceptances,
commercial paper, short-term corporate debt securities and
repurchase agreements.

The following investment policies and restrictions
supplement, and should be read in conjunction with, the
information set forth in the Fund's Prospectus under the heading
"Investment Objectives and Policies." While the Fund's
investment objective of total return for long-term growth of
capital and from income cannot be changed without shareholder
approval, the Fund's investment policies are not fundamental and
may be changed by the Trustees of the Fund without shareholder
approval. However, shareholders will be notified prior to a
material change in such policies.

Derivative Investment Products

The Fund may use various derivative investment products
to reduce certain risks to the Fund of exposure to local market
and currency movements. These products include forward foreign
currency exchange contracts, futures contracts, including stock
index futures, and options thereon, put and call options and
combinations thereof. The Adviser will use such products as
market conditions warrant. The Fund's ability to use these
products may be limited by market conditions, regulatory limits
and tax considerations and there can be no assurance that any of
these products would succeed in reducing the risk to the Fund of
exposure to local market and currency movements. See "Investment
Policies and Restrictions" in the Statement of Additional
Information. New financial products and risk management
techniques continue to be developed and the Fund may use these
new investments and techniques to the extent consistent with its
investment objective and policies.

Forward Foreign Currency Exchange Contracts. The Fund
may purchase or sell forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund
from adverse changes in the relationship between the U.S. Dollar
and other currencies. A forward contract is an obligation to
purchase or sell a specific currency for an agreed price at a
future date which is individually negotiated and privately traded
by currency traders and their customers. The Fund's dealings in
forward contracts will be limited to hedging involving either
specific transactions or portfolio positions. Transaction
hedging is the purchase or sale of forward contracts with respect
to specific receivables or payables of the Fund accruing in

<PAGE>

connection with the purchase and sale of its portfolio securities
or the payment of dividends and distributions by the Fund.
Position hedging is the sale of forward contracts with respect to
portfolio security positions denominated or quoted in such
foreign currency. The Fund will not speculate in forward
contracts and, therefore, the Adviser believes that the Fund will
not be subject to the risks frequently associated with the
speculative use of such transactions. The Fund may not position
hedge with respect to the currency of a particular country to an
extent greater than the aggregate market value (at the time of
making such sale) of the securities held in its portfolio
denominated or quoted in that particular foreign currency. If
the Fund enters into a position hedging transaction, its
custodian bank will to the extent required by applicable law,
place liquid assets in a separate account of the Fund in an
amount equal to the value of the Fund's total assets committed to
the consummation of such forward contract. If the value of the
assets placed in the separate account declines, additional liquid
assets will be placed in the account so that the value of the
account will equal the amount of the Fund's commitment with
respect to such contracts. In addition, the Fund may use other
such methods of "cover" as are permitted by applicable law.
Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value
of the hedge currency should rise. Moreover, it may not be
possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to
sell the currency at a price above the devaluation level it
anticipates. The Fund will not enter into a forward contract
with a term of more than one year or if, as a result thereof,
more than 50% of the Fund's total assets would be committed to
such contracts.

While these contracts are not presently regulated by the
Commodity Futures Trading Commission ("CFTC"), the CFTC may in
the future assert authority to regulate forward contracts. In
such event the Fund's ability to utilize forward contracts in the
manner set forth in the Prospectus may be restricted. Forward
contracts will reduce the potential gain from a positive change
in the relationship between the U.S. Dollar and foreign
currencies. Unanticipated changes in currency prices may result
in poorer overall performance for the Fund if it had not entered
into such contracts. The use of foreign currency forward
contracts will not eliminate fluctuations in the underlying U.S.
Dollar equivalent value of the prices of or rates of return on
the Fund's foreign currency-denominated portfolio securities and
the use of such techniques will subject the Fund to certain
risks.

<PAGE>

The matching of the increase in value of a forward
contract and the decline in the U.S. Dollar equivalent value of
the foreign currency-denominated asset that is the subject of the
hedge generally will not be precise. In addition, the Fund may
not always be able to enter into foreign currency forward
contracts at attractive prices and this will limit the Fund's
ability to use such contracts to hedge or cross-hedge its assets.
Also, with regard to the Fund's use of cross-hedges, there can be
no assurance that historical correlations between the movement of
certain foreign currencies relative to the U.S. Dollar will
continue. Thus, at any time poor correlation may exist between
movements in the exchange rates of the foreign currencies
underlying the Fund's cross-hedges and the movements in the
exchange rates of the foreign currencies in which the Fund's
assets that are the subject of such cross-hedges are denominated.

Options. The Fund may write, sell and purchase put and
call options listed on one or more U.S. or foreign securities
exchanges, including options on market indices. A call option
gives the purchaser of the option, for paying the writer a
premium, the right to call upon the writer to deliver a specified
number of shares of a specified stock on or before a fixed date,
at a predetermined price. A put option gives the buyer of the
option, for paying the writer a premium, the right to deliver a
specified number of shares of a stock to the writer of the option
on or before a fixed date, at a predetermined price.

Writing, purchasing and selling put and call options are
highly specialized activities and entail greater than ordinary
investment risks. When puts written by the Fund are exercised,
the Fund will be obligated to purchase stocks above their then
current market price. The Fund will not write a put option
unless at all times during the option period the Fund has
(a) sold short the optioned securities, or securities convertible
into or carrying rights to acquire the optioned securities, or
(b) purchased an offsetting put on the same securities. When
calls written by the Fund are exercised, the Fund will be
obligated to sell stocks below their then current market price.
The Fund will not write a call option unless the Fund at all
times during the option period owns either (a) the optioned
securities, or securities convertible into or carrying rights to
acquire the optioned securities, or (b) an offsetting call option
on the same securities.

The Fund may purchase or write options on securities of
the types in which it is permitted to invest in privately
negotiated (i.e., over-the-counter) transactions. The Fund will
effect such transactions only with investment dealers and other
financial institutions (such as commercial banks or savings and
loan institutions) deemed creditworthy by the Adviser, and the

<PAGE>

Adviser has adopted procedures for monitoring the
creditworthiness of such entities.

Option On Market Indices. An option on a securities
index is similar to an option on a security except that, rather
than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder
the right to receive, upon exercise of the option, an amount of
cash if the closing level of the chosen index is greater than (in
the case of a call) or less than (in the case of a put) the
exercise price of the option.

Financial Futures Contracts, Including Stock Index
Futures, And Options On Futures Contracts. The Fund may enter
into financial futures contracts, including contracts for the
purchase or sale for future delivery of foreign currencies and
futures contracts based on stock indices and may purchase and
write put and call options to buy or sell futures contracts
("options on futures contracts"). A sale of a futures contract
entails the acquisition of a contractual obligation to deliver
the foreign currency or other commodity called for by the
contract at a specified price on a specified date. A purchase of
a futures contract entails the incurring of a contractual
obligation to acquire the commodity called for by the contract at
a specified price on a specified date. The Fund's Custodian will
place liquid assets in a separate account of the Fund having a
value equal to the aggregate amount of the Fund's commitments in
futures contracts. 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 and the
price at which the contract was originally struck. No physical
delivery of the securities underlying the index is made. In
connection with its purchase of stock index futures contracts the
Fund will deposit in a segregated account with the Fund's
Custodian an amount of liquid assets equal to the market value of
the futures contracts less any amounts maintained in a margin
account with the Fund's broker. Options on futures contracts to
be written or purchased by the Fund will be traded on U.S. or
foreign exchanges or over-the-counter.

With respect to futures contracts and options on futures
contracts that are purchased for purposes other than for "bona
fide hedging purposes" (as defined in Commodity Futures Trading
Commission Regulations promulgated under the Commodity Exchange
Act), the aggregate initial margin and premiums required to be
paid by the Fund to establish such positions will not exceed on
all outstanding futures contracts of the Fund and premiums paid
on outstanding options on futures contracts 5% of the liquidation
value of the total assets of the Fund, after taking into account

<PAGE>

unrealized profits and unrealized losses on any such contracts
the Fund has entered into.

For additional information on the use, risks and costs
of futures contracts and options on futures contracts and foreign
currencies, see Appendix A.

Options On Foreign Currencies. The Fund may write, sell
and purchase put and call options on foreign currencies traded on
securities exchanges or boards of trade (foreign and domestic) or
over-the-counter. As in the case of other kinds of options, the
writing of an option on a foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and the
Fund could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on a foreign currency may constitute an
effective hedge against fluctuations in exchange rates although,
in the event of rate movements adverse to the Fund's position, it
may forfeit the entire amount of the premium plus related
transaction costs. There is no specific percentage limitation on
the Fund's investments in options on foreign currencies. See the
Fund's Statement of Additional Information for further discussion
of the use, risks and costs of options on foreign currencies.

General. The successful use of the foregoing derivative
investment products draws upon the Adviser's special skills and
substantial experience with respect to such products and depends
on the Adviser's ability to forecast currency exchange rate
movements correctly. Should exchange rates move in an unexpected
manner, the Fund may not necessarily achieve the anticipated
benefits of futures contracts, options or forward contracts or
may realize losses and thus be in a worse position than if such
products had not been used. Unlike many exchange-traded futures
contracts and options on futures contracts, there are no daily
price fluctuation limits with respect to options on currencies
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
such instruments and movements in the price 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 positions in
futures contracts, options and forward contracts will depend on
the availability of liquid markets in such instruments. Markets
in options and futures with respect to a number of securities and
currencies are relatively new and still developing. 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 with respect to
an over-the-counter option purchased or written by the Fund, it

<PAGE>

might not be possible to effect a closing transactions 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 futures contract or currency upon
exercise. Therefore, no assurance can be given that the Fund
will be able to utilize these instruments effectively for the
purposes set forth above. Furthermore, the Fund's ability to
engage in options and futures transactions may be limited by tax
considerations. See "Dividends, Distributions and Taxes--U.S.
Federal Income Taxes."

Other Investment Practices

Lending Of Portfolio Securities. Although it has no
present intention of doing so, the Fund may seek to increase
income by lending portfolio securities. Under present regulatory
policies, such loans may be made to member firms of the New York
Stock Exchange, Inc. (the "Exchange") and are required to be
secured continuously by collateral consisting of cash, U.S.
Government Securities or bank letters of credit in an amount at
least equal to the market value of the securities loaned. The
value of the securities loaned will not exceed 30% of the value
of the Fund's total assets.

The Fund may seek to increase income by lending
portfolio securities. The Fund will have the right to call a
loan to obtain the securities loaned or equivalent securities at
any time on five days' notice or such shorter period as may be
necessary to vote the securities. During the existence of a loan
the Fund will receive the income earned on investment of the
collateral. The Fund will not, however, have the right to vote
any securities having voting rights during the existence of the
loan, but the Fund will call the loan in anticipation of an
important vote to be taken among holders of the securities or the
giving or withholding of their consent on a material matter
affecting the investment. As with other extensions of credit
there are risks of delay in recovery or even loss of rights in
the collateral should the borrower of the securities fail
financially. However, the loans would be made only to firms
deemed by management of the Fund to be in good standing, and
when, in the judgment of management, the amount which may be
earned currently from securities loans of this type justifies the
attendant risk.

Repurchase Agreements. The Fund may enter into
repurchase agreements, which are instruments through which an
investor (e.g., the Fund) purchases a security (the "underlying
security") from a bank or well-established securities dealer,

<PAGE>

with an agreement by the seller to repurchase the security at the
same price, plus interest at a specified rate. The underlying
securities are limited to those which would otherwise qualify for
investment by the Fund. Repurchase agreements usually have a
short duration, often less than one week. The Fund will not
enter into a repurchase agreement of a duration of more than
seven business days if, as a result, more than 10% of the value
of the Fund's total assets would be so invested.

Warrants. The Fund may invest in warrants which entitle
the holder to buy equity securities at a specific price for a
specific period of time. Warrants may be considered more
speculative than certain other types of investments in that they
do not entitle a holder to dividends or voting rights with
respect to the securities which may be purchased nor do they
represent any rights in the assets of the issuing company. Also,
the value of the warrant does not necessarily change with the
value of the underlying securities and a warrant ceases to have
value if it is not exercised prior to the expiration date.

It is expected that the Fund's investments will
ordinarily be traded on exchanges located in the respective
countries in which the various issuers of such securities are
principally based and in some case on other exchanges. As much
as 25% of the value of the Fund's total assets may be invested in
the securities of issuers having their principal business
activities in the same industry.

In connection with the qualification or registration of
the Fund's shares for sale under the securities laws of certain
states, the Fund has agreed 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
10% of the value of the Fund's assets at the time of purchase.

Portfolio Turnover. Generally, the Fund does not trade
in securities for short-term profits but, when circumstances
warrant, securities may be sold without regard to the length of
time held. Although the Fund cannot accurately predict its
annual portfolio turnover rate, management does not expect it to
exceed 100%. A 100% annual turnover rate would occur, for
example, if all the securities in the Fund's portfolio were
replaced in a period of one year. A 100% turnover rate is
greater than that of most other investment companies, including
those which emphasize capital appreciation as a basic policy, and
may result in correspondingly greater brokerage commissions being
paid by the Fund.

<PAGE>

Special Risk Considerations

Investors should understand and consider carefully the
substantial risks involved in securities of foreign companies and
governments of foreign nations, some of which are referred to
below, and which are in addition to the usual risks inherent in
domestic investments. Investing in securities of non-United
States companies which are generally denominated in foreign
currencies, and utilization of derivative investment products
denominated in, or the value of which is dependent upon movements
in the relative value of, a foreign currency, involve certain
considerations comprising both risk and opportunity not typically
associated with investing in United States companies. These
considerations include changes in exchange rates and exchange
control regulations, political and social instability,
expropriation, imposition of foreign taxes, less liquid markets
and less available information than are generally the case in the
United States, higher transaction costs, less government
supervision of exchanges, brokers and issuers, difficulty in
enforcing contractual obligations, lack of uniform accounting and
auditing standards and greater price volatility.

There is generally less publicly available information
about foreign companies comparable to reports and ratings that
are published about companies in the United States. Foreign
companies are also generally not subject to uniform accounting
and auditing and financial reporting standards, practices and
requirements comparable to those applicable to United States
companies.

It is contemplated that foreign securities will be
purchased in over-the-counter markets or on stock exchanges
located in the countries in which the respective principal
offices of the issuers of the various securities are located, if
that is the best available market. Foreign securities markets
are generally not as developed or efficient as those in the
United States. While growing in volume, they usually have
substantially less volume than the Exchange, and securities of
some foreign companies are less liquid and more volatile than
securities of comparable United States companies. Similarly,
volume and liquidity in most foreign bond markets is less than in
the United States and, at times, volatility of price can be
greater than in the United States. Fixed commissions on foreign
stock exchanges are generally higher than negotiated commissions
on United States exchanges, although the Fund will endeavor to
achieve the most favorable net results on its portfolio
transactions. There is generally less government supervision and
regulation of stock exchanges, brokers and listed companies than
in the United States.

<PAGE>

With respect to certain foreign countries, there is the
possibility of adverse changes in investment or exchange control
regulations and interest rates, expropriation or confiscatory
taxation, limitations on the removal of funds or other assets of
the Fund, political or social instability, or diplomatic
developments which could affect United States investments in
those countries. Moreover, individual foreign economies may
differ favorably or unfavorably from the United States' economy
in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.

The dividends and interest payable on certain of the
Fund's foreign portfolio securities may be subject to foreign
withholding taxes, thus reducing the net amount of income
available for distribution to the Fund's shareholders. A
shareholder otherwise subject to United States Federal income
taxes may, subject to certain limitations, be entitled to claim a
credit or deduction for U.S. Federal income tax purposes for his
or her proportionate share of such foreign taxes paid by the
Fund. See "U.S. Federal Income Taxes."

Although the Fund values its assets daily in terms of
U.S. dollars, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. It will
do so from time to time, and investors should be aware of the
costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit
based on the difference (commonly known as the "spread") between
the price at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency
to the Fund at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the dealer.

Investors should understand that the expense ratio of
the Fund can be expected to be higher than investment companies
investing in domestic securities since, among other things, the
cost of maintaining the custody of foreign securities is higher
and the purchase and sale of portfolio securities may be subject
to higher transaction charges, such as stamp duties and turnover
taxes.

Investors should further understand that all investments
have a risk factor. There can be no guarantee against loss
resulting from an investment in the Fund, and there can be no
assurance that the Fund's investment objective will be attained.
The Fund is designed for individual and institutional investors
who wish to diversify beyond the United States in an actively
researched and managed portfolio. The Fund may not be suitable
for all investors and is intended for long-term investors who can

<PAGE>

accept the risks entailed in seeking long-term growth of capital
through investment in foreign securities as described above.

Fundamental Investment Policies

In addition to the investment objective and policies
described above, the Fund has adopted certain fundamental
investment policies which may not be changed without shareholder
approval, which means the vote of (1) 67% or more of the shares
represented at a meeting at which more than 50% of the
outstanding shares are represented or (2) more than 50% of the
outstanding shares, whichever is less. Whenever any investment
restriction states a maximum percentage of the Fund's assets
which may be invested in any security or other asset, it is
intended that such maximum percentage limitation be determined
immediately after and as a result of the Fund's acquisition of
such securities or other assets. Accordingly, any later increase
or decrease in percentage beyond the specified limitation
resulting from a change in values or net assets will not be
considered a violation.

Briefly, the policies provide that the Fund may not:

(i) invest more than 5% of the value of its total
assets in securities of a single issuer
(including repurchase agreements with any one
entity), except securities issued or guaranteed
by the United States Government, its agencies or
instrumentalities ("U.S. Government Securities")
or the government of any foreign country, its
agencies or instrumentalities ("Foreign
Government Securities"); provided, however, that
the Fund may not, with respect to 75% of the
value of its total assets, invest more than 5%
of the value of its total assets in securities
of any one foreign government issuer;

(ii) own more than 10% of the outstanding securities
of any class of any issuer (for this purpose,
all preferred stocks of an issuer shall be
deemed a single class, and all indebtedness of
an issuer shall be deemed a single class),
except U.S. Government Securities;

(iii) invest more than 25% of the value of its total
assets in securities of issuers having their
principal business activities in the same
industry; provided, that this limitation does
not apply to U.S. Government Securities or
Foreign Government Securities;

<PAGE>

(iv) invest more than 5% of the value of its total
assets in the securities of any issuer that has
a record of less than three years of continuous
operation (including the operation of any
predecessor or unconditional guarantor), except
U.S. Government Securities or Foreign Government
Securities;

(v) invest more than 5% of the value of its total
assets in securities with legal or contractual
restrictions on resale ("restricted
securities"), other than repurchase agreements,
or more than 10% of the value of its total
assets in securities that are not readily
marketable (including restricted securities and
repurchase agreements not terminable within
seven business days);

(vi) borrow money, except as a temporary measure for
extraordinary or emergency purposes, and then
only from banks in amounts not exceeding 5% of
its total assets valued at market;

(vii) own, in contravention of the applicable laws or
regulations of Germany, any securities of
another investment company;

(viii) unless the securities are acquired pursuant to a
plan of reorganization or an offer of exchange,
own any securities of an open-end investment
company or more than 3% of the total outstanding
voting stock of any closed-end investment
company or more than 10% of such value in
closed-end investment companies in general;

(ix) purchase or sell real property (including
limited partnership interests although it may
purchase readily marketable interests in real
estate investment trusts or readily marketable
securities of companies which invest in real
estate);

(x) purchase or sell commodity contracts; provided,
however, that this policy does not prevent the
Fund from entering into (a) forward foreign
currency exchange contracts, (b) financial
futures contracts, including contracts for the
purchase or sale for future delivery of foreign
currencies and futures contracts based on stock
indices, (c) options or financial futures

<PAGE>

contracts, or (d) other, similar contracts or
transactions;

(xi) purchase participations or other direct
interests in oil, gas, or other mineral leases
exploration or development programs;

(xii) purchase securities on margin, except for use of
the short-term credit necessary for clearance of
purchases of portfolio securities;

(xiii) effect short sales of securities;

(xiv) make loans, except for use of the short-term
credit necessary for clearance of purchases of
portfolio securities, except that it may
purchase debt securities, enter into repurchase
agreements and lend its portfolio securities, as
described in the Fund's Prospectus;

(xv) mortgage, pledge, hypothecate, or in any other
manner transfer as security for indebtedness any
security owned by the Fund, except as may be
necessary in connection with permissible
borrowings, and in the aggregate amount not to
exceed 10% of the Fund's total assets valued at
market at the time of such mortgaging, pledging
or hypothecating;

(xvi) act as an underwriter of securities, except
insofar as it might be deemed to be such for
purposes of the Securities Act of 1933, as
amended (the "Securities Act"), with respect to
the disposition of certain portfolio securities
acquired within the limitations of (v) above;

(xvii) purchase or retain the securities of any issuer
if, to the knowledge of the Fund's management,
those officers and Trustees of the Fund, and of
its adviser, who each owns beneficially more
than one-half of 1% of the outstanding security
of such issuer, together own beneficially more
than 5% of the securities of such issuer;

(xviii) invest in companies for the purpose of
exercising management or control; or

(xix) issue senior securities except as permitted by
the Investment Company Act of 1940, as amended
(the "1940 Act").

<PAGE>

_______________________________________________________________

MANAGEMENT OF THE FUND
_______________________________________________________________

Adviser

Alliance Capital Management L.P., 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 investment
manager supervising client accounts with assets as of December
31, 1998, totaling more than $___ billion (of which more than
$___ billion represented the assets of investment companies).
The Adviser's clients are primarily major corporate employee
benefit funds, public employee retirement systems, investment
companies, foundations and endowment funds. The [ ] registered
investment companies managed by the Adviser, comprising [ ]
separate investment portfolios, currently have more than 3.5
million shareholders. As of December 31, 1998, the Adviser and
its subsidiaries employed approximately 2,000 employees who
operate out of domestic offices and the offices of subsidiaries
in Bahrain, Bangalore, Cairo, Chennai, Hong Kong, Istanbul,
Johannesburg, London, Luxembourg, Madrid, Moscow, Mumbai, New
Delhi, Paris, Pune, Sao Paolo, Seoul, Singapore, Sydney, Tokyo,
Toronto, Vienna and Warsaw. As of December 31, 1998, the Adviser
was retained as an investment manager for employee benefit plan
assets of [ ] of the FORTUNE 100 companies.

Alliance Capital Management Corporation ("ACMC"), the
sole general partner of, and the owner of a 1% general
partnership interest in the Adviser, is an indirect wholly-owned
subsidiary of the Equitable Life Assurance Society of the United
States ("Equitable"), one of the largest life insurance companies
in the United States and a wholly-owned subsidiary of the
Equitable Companies Incorporated ("ECI"). ECI is a holding
company controlled by AXA-UAP ("AXA") a French insurance holding
company which at March 1, 1998, beneficially owned approximately
59% of the outstanding voting shares of ECI. As of June 30,
1998, ACMC, Inc. and Equitable Capital Management Corporation,
each a wholly-owned direct or indirect subsidiary of Equitable,
together with Equitable, owned in the aggregate approximately 57%
of the issued and outstanding units representing assignments of
beneficial ownership of limited partnership interests in the
Adviser.

<PAGE>

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

Based on information provided by AXA, as of March 31,
1998, more than 30% of the voting power of AXA was controlled
directly and indirectly by FINAXA, a French holding company. As
of March 31, 1998 approximately 74% of the voting power of FINAXA
was controlled directly and indirectly by four French mutual
insurance companies (the "Mutuelles AXA"), one of which, AXA
Assurances I.A.R.D. Mutuelle, itself controlled directly and
indirectly more than 42% of the voting power of FINAXA. Acting
as a group, the Mutuelles AXA control AXA and FINAXA.

The Advisory Agreement became effective on July 22,
1992, having been approved by the unanimous vote, cast in person,
of the Fund's Trustees (including the Trustees 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 September 12, 1991. At a meeting
held on June 8, 1992, a majority of the outstanding voting
securities of the Fund approved the Advisory Agreement.

The Advisory Agreement remains in effect for successive
twelve-month periods (computed from July 1) if approved annually
(a) by the Trustees of the Fund or by the holders of a majority
of the outstanding voting securities of the Fund and (b) by a
majority of the Trustees who are not parties to the agreement, or
"interested persons", as defined in the 1940 Act, of any such
party, at a meeting called for the purpose of voting on such
matter. Most recently, continuance of the Advisory Agreement was
approved for the period ending June 30, 1999 by the Trustees of
the Fund, including a majority who are not "interested persons",
as defined in the 1940 Act, at their Regular Meeting held on
June 11, 1998.

The Advisory Agreement is terminable 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 Trustees on 60 days' written notice, or by a vote of the
Adviser, on 60 days' written notice, and automatically terminate
in the event of assignment. The Advisory Agreement provides that
in the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of its obligations thereunder,

<PAGE>

the Adviser shall not be liable for any action or failure to act
in accordance with its duties thereunder.

Under the Advisory Agreement, the Adviser furnishes
investment advice and recommendations to the Fund and provides
office space in New York, order placement facilities and persons
satisfactory to the Fund's Board of Trustees to act as officers
of the Fund. Such officers, as well as certain Trustees of the
Fund, may be employees of the Adviser or directors, officers or
employees of its affiliates.

For the services rendered by the Adviser under the
Advisory Agreement, the Fund pays the Adviser a quarterly fee at
the maximum vote of one fourth of 1% of the value of the Fund's
aggregate net assets up to $500 million and three sixteenth of 1%
of the value of such assets above $500 million. The Adviser has
agreed to unilaterally waive for a minimum of two years ending
June 30, 1999 that portion of its advisory fee on the first $500
million of net assets in excess of the annualized rate of .85 of
1% (i.e., a waiver of .15 of 1% annualized). For the fiscal
years of the Fund ended in 1996, 1997 and 1998, the advisory fees
payable under the advisory agreement were $2,627,200, $2,891,923
and $2,718,678, respectively. Of such amounts $407,802 was
waived by the Adviser for its fiscal year ended in June 30, 1998.

The Fund has, under the Advisory Agreement, assumed the
obligation for payment of all its other expenses. As to the
obtaining of services other than those specifically provided to
the Fund by the Adviser, the Fund may employ its own personnel.
For such services, it also may utilize personnel employed by the
Adviser or by other subsidiaries of Equitable. In such event,
the services will be provided to the Fund at cost and the
payments therefor must be specifically approved by the Fund's
Trustees. The Fund paid to the Adviser a total of $127,000 in
respect of such services during the fiscal year ended June 30,
1998.

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

<PAGE>

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 The Alliance Fund, Inc., AFD
Exchange Reserves, Alliance All-Asia Investment Fund, Inc.,
Alliance Balanced Shares, Inc., Alliance Bond Fund, Inc.,
Alliance Capital Reserves, Alliance Global Dollar Government
Fund, Inc., Alliance Global Environment Fund, Inc., Alliance
Global Small Cap Fund, Inc., Alliance Global Strategic Income
Trust, Inc., Alliance Government Reserves, Alliance Greater China
'97 Fund, Inc., Alliance Growth and Income Fund, Inc., Alliance
High Yield Fund, Inc., Alliance Institutional Funds, Inc.,
Alliance Institutional Reserves, Inc., Alliance International
Fund, Alliance International Premier Growth Fund, Inc., Alliance
Limited Maturity Government Fund, Inc., Alliance Money Market
Fund, Alliance Mortgage Securities Income Fund, Inc., Alliance
Multi-Market Strategy Trust, Inc., Alliance Municipal Income
Fund, Inc., Alliance Municipal Income Fund II, Alliance Municipal
Trust, Alliance New Europe Fund, Inc., Alliance North American
Government Income Trust, Inc., Alliance Premier Growth Fund,
Inc., Alliance Quasar Fund, Inc., Alliance Real Estate Investment
Fund, Inc., Alliance Regent/Sector Opportunity 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 Portfolios, and The Hudson River 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 Dollar Income Fund, Inc., ACM
Managed Income Fund, Inc., ACM Municipal Securities Income Fund,
Inc., Alliance All-Market Advantage Fund, Inc., Alliance World
Dollar Government Fund, Inc., Alliance World Dollar Government
Fund II, Inc., The Austria Fund, Inc., The Korean Investment
Fund, Inc., The Southern Africa Fund, Inc. and The Spain Fund,
Inc., all registered closed-end investment companies.

Trustees And Officers

The Trustees and principal officers of the Fund, their
ages and their principal occupations during the past five years
are set forth below. Each such Trustee and officer is also a
trustee, director or officer of other registered investment
companies sponsored by the Adviser. Unless otherwise specified,
the address of each such person is 1345 Avenue of the Americas,
New York, New York 10105.

<PAGE>

Trustees

John D. Carifa,* 53, Chairman of the Board, is the
President, Chief Operating Officer and a Director of ACMC, with
which he has been associated since prior to 1993.

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

John H. Dobkin, 56, has been the President of Historic
Hudson Valley (historic preservation) since prior to 1993.
Previously, he was Director of the National Academy of Design.
His address is 150 White Plains Road, Tarrytown, New York 10591.

W.H. Henderson, 71, joined the Royal Dutch/Shell Group
in 1948 and served in Singapore, Japan, South Africa, Hong Kong
and London. The greater part of his service was in Japan and
between 1969 and 1972 he was Managing Director and Chief
Executive Officer of the Shell Company of Hong Kong Limited.
Mr. Henderson retired from the Royal Dutch/Shell Group in 1974 in
order to establish his own oil and gas consultancy business.
Mr. Henderson is currently a Director of a number of investment
companies. His address is Quarrey House, Charlton Horethorne,
Sherborne, Dorset, DT9 4NY, England.

Stig Host, 72, is the Chairman and Chief Executive
Officer of International Energy Corp. (oil and gas exploration),
with which he has been associated since prior to 1993. He is
also Chairman and Director of Kriti Exploration, Inc. (oil and
gas exploration and production), Managing Director of Kriti Oil
and Minerals, N.V., Chairman of Kriti Properties and Development
Corporation (real estate), Chairman of International Marine
Sales, Inc. (marine fuels), and a Director of Florida Fuels, Inc.
(marine fuels) and President of Alexander Host Foundation. He is
a Trustee of the Winthrop Focus Funds. His address is 103 Oneida
Drive, Greenwich, Connecticut 06530.

Alan Stoga, 47, has been President of Zemi Investments,
L.P., since 1995, President of Zemi Communications, L.L.C. and
its predecessor company since 1996, and a Managing Director of
Kissinger Associates, Inc. until 1995. He has continued as a
member of the Board of Directors of Kissinger Associates. His
address is Kissinger Associates, Inc., 350 Park Avenue, New York,
New York 10022.

____________________

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

<PAGE>

Officers

John D. Carifa, Chairman and President, see biography
above.

Bruce W. Calvert, Senior Vice President, 51, is Vice
Chairman of the Board and Chief Investment Officer of ACMC, with
which he has been associated since prior to 1993.

Kathleen A. Corbet, Senior Vice President, 38, is an
Executive Vice President of ACMC, with which she has been
associated since July 1993. Prior thereto she headed Equitable
Capital Management Corporation's Fixed Income Management
Department since prior to 1993.

Edward Baker, Vice President, 47, is a Vice President of
ACMC, with which he has been associated since prior to 1993.

Thomas J. Bardong, Vice President, 53, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1993.

Mark H. Breedon, Vice President, 45, has been a Vice
President of ACMC since prior to 1993 and a Director and Senior
Vice President of Alliance Capital Limited ("ACL") since prior to
1993.

Russell Brody, Vice President, 31, is a Vice President
and Head Trader of the London desk of ACL, with which he has been
associated since July 1997. Prior thereto, he was Head of
European Equity Dealing with Lombard Odier et Cie, London office,
since prior to 1993.

Edmund P. Bergan, Jr., Secretary, 48, is 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 1993.

Andrew L. Gangolf, Assistant Secretary, 44, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since December 1994. Prior thereto he was a Vice
President and Assistant Secretary of Delaware Management Company,
Inc. since prior to 1993.

Domenick Pugliese, Assistant Secretary, 37, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since May 1995. Previously, he was a Vice
President and Counsel of Concord Financial Holding Corporation
since 1994, Vice President and Associate General Counsel of
Prudential Securities since prior to 1993.

<PAGE>

Emilie D. Wrapp, Assistant Secretary, 42, is a Vice
President and Assistant General Counsel of AFD, with which she
has been associated since prior to 1993.

Mark D. Gersten, Treasurer and Chief Financial Officer,
48, is a Senior Vice President of AFS, with which he has been
associated since prior to 1993.

Vincent S. Noto, Controller, 33, is a Vice President of
Alliance Fund Services, Inc., with which he has been associated
since prior to 1993.

The aggregate compensation paid by the Fund to each of
the Trustees during its fiscal year ended June 30, 1998, the
aggregate compensation paid to each of the Trustees during
calendar year 1998 by all of the funds 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 Trustees serves as a trustee or director, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
pension or retirement benefits to any of its trustees or
directors. Some of the Trustees is a trustee or director of one
or more other registered investment companies in the Alliance
Fund Complex.

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

John D. Carifa $ - 0 - $ - 0 - 53 118
David H. Dievler $4,908 $_______ 46 83
John H. Dobkin $4,863 $_______ 43 80
W.H. Henderson $4,851 $_______ 4 4
Stig Host $4,851 $_______ 4 4
Alan Stoga $2,663 $_______ 4 4

<PAGE>

As of [ ], 1999, the Trustees and officers of
the Fund as a group owned less than 1% of the shares of the
Fund.

_______________________________________________________________

EXPENSES OF THE FUND
_______________________________________________________________

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

In approving the Agreement, the Trustees of the Fund
determined that there was a reasonable likelihood that the
Agreement 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.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class A shares, in amounts aggregating
$251,400 which constituted approximately 0.21% of the average
daily net assets attributable to Class A shares during the
period, and the Adviser made payments from its own resources as
described above aggregating $860,373. Of the $1,111,773 paid by
the Fund and the Adviser with respect to the Class A shares under
the Agreement, $94,514 was spent on advertising, $14,020 on the
printing and mailing of prospectuses for persons other than
current shareholders, $515,636 for compensation to broker-dealers
and other financial intermediaries (including, $188,535 to the
Fund's Principal Underwriters), $145,597 for compensation to
sales personnel, $342,006 was spent on printing of sales
literature, travel, entertainment, due diligence and other
promotional expenses, and $_____ was spent on interest on Class A
shares financing.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class B shares, in amounts aggregating
$729,494, which constituted approximately 1.00% of the average
daily net assets attributable to Class B shares during the
period, and the Adviser made payments from its own resources as

<PAGE>

described above aggregating $90,546. Of the $820,040 paid by the
Fund and the Adviser with respect to the Class B shares under the
Agreement, $19,591 was spent on advertising, $4,267 on the
printing and mailing of prospectuses for persons other than
current shareholders, $640,499 for compensation to broker-dealers
and other financial intermediaries (including, $47,298 to the
Fund's Principal Underwriters), $12,070 for compensation to sales
personnel, $66,894 was spent on printing of sales literature,
travel, entertainment, due diligence and other promotional
expenses, and $76,719 was spent on interest on Class B shares
financing.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class C shares, in amounts aggregating
$211,941, which constituted approximately 1.0% of the 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 $39,898. Of the $251,839 paid by the
Fund and the Adviser with respect to the Class C shares under the
Agreement, $6,123 was spent on advertising, $1,542 on the
printing and mailing of prospectuses for persons other than
current shareholders, $196,670 for compensation to broker-dealers
and other financial intermediaries (including, $15,550 to the
Fund's Principal Underwriters), $3,113 for compensation to sales
personnel, $22,647 was spent on printing of sales literature,
travel, entertainment, due diligence and other promotional
expenses, and $22,127 was spent on interest on Class C shares
financing.

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 charge and
distribution services fee on the Class B shares and Class C
shares are the same as those of the initial sales charge and
distribution services fee with respect to the Class A shares and
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.

The Agreement will continue in effect for
successive twelve-month periods (computed from each July 1),
provided, however, that such continuance is specifically approved
at least annually by the Trustees of the Fund or by vote of the
holders of a majority of the outstanding voting securities (as

<PAGE>

defined in the 1940 Act) of that class, and, in either case, by a
majority of the Trustees 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 trustees 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. Most recently
the Trustees approved the continuance of the Agreement until
June 30, 1999 by a vote, cast in person, of the Trustees,
including a majority of the Trustees who are not "interested
persons", as defined in the 1940 Act, at their meeting held on
June 11, 1998.

The Adviser may from time to time and from its own funds
or such other resources as may be permitted by rules of the
Securities and Exchange Commission (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.

Unreimbursed distribution expenses incurred as of the
end of the Fund's most recently completed fiscal period, and
carried over for reimbursement in future years in respect of the
Class B and Class C shares for the Fund were, as of that time, as
follows: Class B - ($2,638,659)(3.70% as % of Net Assets of
Class); Class C - ($838,475)(4.10% as % of Net Assets of
Class).

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.

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

<PAGE>

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 shares and Advisor Class shares, reflecting the
additional costs associated with the Class B and Class C
contingent deferred sales charges. For the fiscal year ended
June 30, 1998, the Fund paid AFS $512,895 for transfer agency
services.

_______________________________________________________________

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 the

<PAGE>

categories of investors 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,
(iv) by directors and present or retired full-time employees of
CB Richard Ellis, Inc. Generally, a fee-based program must
charge an asset-based or other similar fee and must invest at
least $250,000 in Advisor Class shares of the Fund in order to be
approved by AFD 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 Agreement and Declaration
of Trust 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 value 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, cash or other incentives
will be conditioned upon the sale of a specified minimum dollar
amount of the shares of the Fund and/or other Alliance Mutual
Funds, as defined below, during a specific period of time. On
some occasions, such cash or other incentives may take the form
of payment for attendance at seminars, meals, sporting events or
theater performances, or payment for travel, lodging and
entertainment incurred in connection with travel taken by persons
associated with a dealer or agent to urban or resort locations
within or outside the United States. Such dealer or agent may
elect to receive cash incentives of equivalent amount in lieu of
such payments.

Class A, Class B, Class C and Advisor Class shares each
represent an interest in the same portfolio of investments of the
Fund, have the same rights and are identical in all respects,
except that (i) Class A shares bear the expense of the initial
sales charge (or contingent deferred sales charge, when
applicable) and Class B and Class C shares bear the expense of
the deferred sales charge, (ii) Class B shares and Class C shares
each bear the expense of a higher distribution services fee than

<PAGE>

that borne by Class A shares, and Advisor Class shares do not
bear such a fee, (iii) Class B and Class C shares bear higher
transfer agency costs than those borne by Class A and Advisor
Class shares, (iv) each of Class A, Class B and Class C shares
has exclusive voting rights with respect to provisions of the
Rule 12b-1 Plan pursuant to which its distribution services fee
is paid and other matters for which separate class voting is
appropriate under applicable law, provided that, if the Fund
submits to a vote of the Class A shareholders, an amendment to
the Rule 12b-1 Plan that would materially increase the amount to
be paid thereunder with respect to the Class A shares, then such
amendment will also be submitted to the Class B and Advisor Class
shareholders and the Class A shareholders, Class B shareholders
and the Advisor Class shareholders will vote separately by class,
and (v) Class B and Advisor Class shares are subject to a
conversion feature. Each class has different exchange privileges
and certain different shareholder service options available.

The Trustees 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 Trustees 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 Shares**

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 charges on Class B shares prior to
conversion, or the accumulated distribution services fee and
contingent deferred sales charges 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
____________________

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

<PAGE>

shares. (See Appendix C for information concerning the
eligibility of certain employee benefit plans to purchase Class B
shares at net asset value without being subject to a contingent
deferred sales charge and the ineligibility of certain such plans
to purchase Class A shares.) Class C shares will normally not be
suitable for the investor who qualifies to purchase Class A
shares at net asset value. For this reason, the Principal
Underwriter will reject any order for more than $1,000,000 for
Class C shares.

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

<PAGE>

During the Fund's fiscal years ended on June 30, 1998,
1997 and 1996, the aggregate amount of underwriting commission
payable with respect to shares of the Fund were, $185,706,
$161,918 and $318,980, respectively. Of that amount, the
Principal Underwriter received the amounts of $-0-, $12,581 and
$11,734, respectively, 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 1998, 1997 and 1996, the Principal Underwriter received
contingent deferred sales charges of $2,606, $139 and $-0-,
respectively, on Class A Shares, $153,795, $157,738 and $105,187,
respectively, on Class B shares, and $6,763, $2,605 and $-0-,
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

<PAGE>

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

No initial sales charge is imposed on Class A shares
issued (i) pursuant to the automatic reinvestment of income
dividends or capital gains distributions, or (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

<PAGE>

charge may be deemed to be an "underwriter" under the Securities
Act.

Set forth below is an example of the method of computing
the offering price of the Class A shares. The example assumes a
purchase of Class A shares of the Fund aggregating less than
$100,000 subject to the schedule of sales charges set forth above
at a price based upon the net asset value of Class A shares of
the Fund at June 30, 1998.

Net Asset Value per Class A Share at
June 30, 1998 $18.55

Class A Per Share Sales Charge
- 4.25% of offering price (4.44% of
net asset value per share) .82

Class A Per Share Offering Price to
the public $19.37
======

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

<PAGE>

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
-U.S. Government Portfolio
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
Alliance Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio
-Virginia Portfolio
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.

<PAGE>

The Alliance Portfolios
-Alliance Growth Fund
-Alliance Conservative Investors Fund
-Alliance Growth Investors Fund
-Alliance Short-Term U.S. Government Fund

Prospectuses for the Alliance Mutual Funds may be
obtained without charge by contacting AFS 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

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

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

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

Statement Of Intention. Class A investors may also
obtain the reduced sales charges shown in the table above by
means of a written Statement of Intention, which expresses the
investor's intention to invest not less than $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

<PAGE>

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 a 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
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 AFS at the address or
telephone numbers shown on the cover of this Statement of
Additional Information.

<PAGE>

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

Sales at Net Asset Value. The Fund may sell its Class A
shares at net asset value (i.e., without an initial sales charge)
and without a contingent deferred sales charge to certain
categories of investors including:

(i) investment management clients of the Adviser or
its affiliates;

(ii) officers and present or former Trustees 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, AFS

<PAGE>

and their affiliates; officers and directors of
ACMC, the Principal Underwriter, AFS and their
affiliates; officers, directors and present and
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, Principal Underwriter, AFS and their
affiliates; certain employee benefit plans for
employees of the Adviser, the Principal
Underwriter, AFS 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 who were shareholders of the Fund before
the commencement of sales of shares of the Fund
subject to a sales charge;

(vi) 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 persons pay an asset-based fee to such
broker-dealer or other financial intermediary, or
its affiliates or agents, for services in the
nature of investment advisory or administrative
services;

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

<PAGE>

(viii) employer-sponsored qualified pensions 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
Class B 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

<PAGE>

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 charge because of dividend
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
Before on or After
Year 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 Trustees 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

<PAGE>

relative, or by the estate of any such person or relative, or
(iv) pursuant to a systematic withdrawal plan (see "Shareholder
Services--Systematic Withdrawal Plan" below).

Conversion Feature. Eight years after the end of the
calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A
shares and will no longer be subject to a higher distribution
services fee. Such conversion will occur on the basis of the
relative net asset values of the two classes, without the
imposition of any sales load, fee or other charge. The purpose
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

<PAGE>

his or her Class C shares. The Class C distribution services fee
enables the Fund to sell Class C shares without either an initial
or contingent deferred sales charge, as long as the shares are
held for one year or more. Class C shares do not convert to any
other class of shares of the Fund and incur higher distribution
services fees and transfer agency costs than Class A shares and
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 the Advisor Class shares.

Conversion of Advisor Class Shares to Class A Shares

Advisor Class shares may be held solely through the fee-
based program accounts, employee benefit plans and registered
investment advisory or other financial intermediary relationships

<PAGE>

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 a
fee-based program or plan, or to be associated with the
investment adviser or financial intermediary in each case, that
satisfies the requirements to purchase shares set forth under
"Purchase of Shares--General" or (ii) the holder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Advisor Class Prospectus and this Statement of Additional
Information (each, a "Conversion Event"), then all Advisor Class
shares held by the shareholder will convert automatically and
without notice to the shareholder, other than the notice
contained in the Advisor Class Prospectus and this Statement of
Additional Information, to Class A shares of the Fund during the
calendar month following the month in which the Fund is informed
of the occurrence of the Conversion Event. The failure of a
shareholder 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
and have a higher expense ratio than Advisor Class shares. As a
result, Class A shares may pay correspondingly lower dividends
and have a lower net asset value than Advisor Class shares.

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

_______________________________________________________________

REDEMPTION AND REPURCHASE OF SHARES
_______________________________________________________________

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

<PAGE>

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 Agreement and Declaration of Trust 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
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 or her shares, assuming the
shares constitute capital assets in his or her 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 share
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

<PAGE>

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 share
certificates, the investor should forward the appropriate share
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
share 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 share 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
fund transfer of shares for which no share 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 AFS. 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 share certificates have been issued by telephone at
(800) 221-5672 before 4:00 p.m. Eastern time on a Fund business
day in an amount not exceeding $50,000. Proceeds of such
redemptions are remitted by check to the shareholder's address of
record. A shareholder otherwise eligible for telephone
redemption by check may cancel the privilege by written
instruction to AFS, 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 AFS 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

<PAGE>

AFS 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 by check 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 AFS 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
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 day's closing price must be
settled between the shareholder and the dealer or agent. A
shareholder may offer shares of the Fund to the Principal
Underwriter either directly or through a selected dealer or
agent. Neither the Fund nor the Principal Underwriter charges a
fee or commission in connection with the repurchase of shares
(except for the contingent deferred sales charge, if any, with
respect to Class A, Class B and Class C shares). Normally, if
shares of the Fund are offered through a financial intermediary

<PAGE>

or selected dealer or agent, the repurchase is settled by the
shareholder as an ordinary transaction with or through the
selected dealer or agent, who may charge the shareholder for this
service. The repurchase of shares of the Fund as described above
is a voluntary service of the Fund and the Fund may suspend or
terminate this practice at any time.

General

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

_______________________________________________________________

SHAREHOLDER SERVICES
_______________________________________________________________

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

Automatic Investment Program

Investors may purchase shares of the Fund through an
automatic investment program utilizing electronic funds transfer
drawn on the investor's own bank account. Under such a program,
pre-authorized monthly drafts for a fixed amount (at least $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

<PAGE>

should complete the appropriate portion of the Subscription
Application found in the Prospectus. Current shareholders should
contact AFS 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, AFS 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 AFS 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 purposes of determining the CDSC, if any, upon redemption
and, in the case of Class B shares, for the purpose of conversion
to Class A shares. After an exchange, your Class B shares will
automatically convert to Class A shares in accordance with the
conversion schedule applicable to the Class B shares of the
Alliance Mutual Fund you originally purchased for cash ("original
shares"). When redemption occurs, the CDSC applicable to the
original shares is applied.

Please read carefully the prospectus of the mutual fund
into which you are exchanging before submitting the request.
Call AFS 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

<PAGE>

(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 AFS,
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 share
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 AFS 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
exchanges 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 AFS
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 AFS at the address shown on the cover of
this Statement of Additional Information.

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

None of the Alliance Mutual Funds, the Adviser, the
Principal Underwriter or AFS 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

<PAGE>

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
representative, 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 AFS at the "For Literature"
telephone number on the cover of this Statement of Additional
Information, or write to:

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

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

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

<PAGE>

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

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

403(b)(7) Retirement Plan. Certain tax-exempt
organizations and public educational institutions may sponsor
retirements 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 AFS as compensation for its services to the retirement plan
accounts maintained with the Fund.

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

Dividend Direction Plan

A shareholder who already maintains, in addition to his
or her Class A, Class B, Class C or Advisor Class Fund account, a
Class A, Class B, Class C or Advisor Class account with one or
more other Alliance Mutual Funds may direct that income dividends
and/or capital gains paid on the shareholder's Class A, Class B,
Class C or Advisor Class Fund shares be automatically reinvested,
in any amount, without the payment of any sales or service
charges, in shares of the same class of such other Alliance
Mutual Fund(s). Further information can be obtained by
contacting AFS 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 AFS to
establish a dividend direction plan.

<PAGE>

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.

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 AFS at the address or the "For Literature"
telephone number shown on the cover of this Statement of
Additional Information.

CDSC Waiver for Class B Shares and Class C shares. Under
a systematic withdrawal plan, up to 1% monthly, 2% bi-monthly or

<PAGE>

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
report of the Fund's independent auditors, Ernst & Young LLP, as
well as a confirmation of each purchase and redemption. By
contacting his or her broker or AFS, 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 Agreement and Declaration of Trust 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 order is received and on such other days as the Trustees
deem 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

<PAGE>

fair value as determined in good faith by the Trustees. The
Trustees have delegated to the Adviser certain of their 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 sales 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 Trustees. 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 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 source.

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

<PAGE>

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 Trustees determine 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 services 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 Trustees.

Trading in securities on Far Eastern securities
exchanges and over-the-counter markets is normally completed well
before the close of business of each Fund business day. In
addition, trading in foreign markets may not take place on all
Fund business days. Furthermore, trading may take place in
various foreign markets on days that are not Fund business days.
The Fund's calculation of the net asset value per share
therefore, does not always take place contemporaneously with the
most recent determination of the prices of portfolio securities
in these markets. Events affecting the values of these portfolio
securities that occur between the time their prices are
determined in accordance with the above procedures and the close
of the Exchange will not be reflected in the Fund's calculation
of net asset value unless 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 Trustees at fair value.

The Trustees 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 payment on the
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

<PAGE>

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 Trustees.

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

_______________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
_______________________________________________________________

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

Foreign Income Taxes. Investment income received by the
Fund from sources within foreign countries may be subject to
foreign income 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.

U.S. Federal Income Taxes. The Fund intends for each
taxable year to qualify to be taxed as a "regulated investment
company" under the Code. To the extent that the Fund distributes
all of its taxable income and net capital gain to its
shareholders, qualification relieves the Fund of federal income
and excise taxes. Investors should consult their own counsel for
a complete understanding of the requirements the Fund must meet
to qualify for such treatment. The following discussion relates
solely to U.S. federal income taxes on dividends and
distributions by the Fund and assumes that the Fund qualifies as
a regulated investment company. Investors should consult their

<PAGE>

own counsel for further details, including their entitlement to
foreign tax credits that might be "passed through" to them under
the rules described below, and the application of state and local
tax laws to his or her particular situation.

Income dividends and distributions of any realized
short-term capital gains are included in the income of U.S.
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.
The investment objective of the Fund is such that only a small
portion, if any, of the Fund's distributions is expected to
qualify for the dividends-received deduction for corporations.

Under current Federal tax law, the amount of an income
dividend or capital gains distribution declared by the Fund
during October, November or December of a year to shareholders of
record as of a specified date during such a month that is paid
during January of the following year is includable in the prior
year's taxable income of shareholders that are calendar year
taxpayers.

There is no fixed dividend rate and there can be no
assurance that the Fund will pay any dividends or realize any
gains. It is the Fund's intention to distribute to its
shareholders each fiscal year substantially all of such year's
net income and net realized capital gains, if any. The amount and
time of any such distribution must necessarily depend upon the
realization by the Fund of income and capital gains from
investments. Shareholders will be advised annually as to the tax
status of dividends and capital gains distributions.

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
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.

Foreign Tax Credits. Income received by the Fund from
sources within various foreign countries may be subject to
foreign income tax. If more than 50% of the value of the Fund's
total assets at the close of its taxable year consists of the
stock or securities of foreign corporations, the Fund may elect
to "pass through" to the Fund's stockholders the amount of
foreign income taxes paid by the Fund. Pursuant to such
election, a stockholder would be required: (i) to include in
gross income his pro-rata share of foreign taxes paid by the

<PAGE>

Fund; (ii) treat his pro-rata share of such foreign taxes as
having been paid by him; and (iii) either to deduct his pro-rata
share of foreign taxes in computing his taxable income, or to use
it as a foreign tax credit against Federal income taxes (but not
both). No deduction for foreign taxes could be claimed by a
shareholder who does not itemize deductions. In addition,
certain shareholders may be subject to rules which limit their
ability to fully deduct, or claim a credit for, their pro rata
share of the foreign taxes paid by the Fund. A shareholder's
foreign tax credit with respect to a dividend received from the
Fund will be disallowed unless the shareholder holds shares in
the Fund on the ex-dividend date and for at least 15 other days
during the 30-day period beginning 15 days prior to the ex-
dividend date.

The Fund has met for each fiscal year to date, and
intends to meet for each future fiscal year, the requirements of
the Code to "pass through" to its shareholders foreign income
taxes paid, but there can be no assurance that the Fund will be
able to do so. Each shareholder will be notified within 60 days
after the close of each taxable year of the Fund whether the
foreign taxes paid by the Fund will "pass through" for that year,
and, if so, the amount of each shareholder's pro-rata share (by
country) of (i) the foreign taxes paid, and (ii) the Fund's gross
income from foreign sources. Of course, shareholders who are not
liable for federal income taxes, such as retirement plans
qualified under Section 401 of the Code, will not be affected by
any such "pass through" of foreign tax credits.

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

Taxation of Foreign Stockholders. The foregoing
discussion relates only to U.S. Federal income tax law as it
affects shareholders who are U.S. residents or U.S. corporations.
The effects of federal income tax law on shareholders who are
non-resident aliens or foreign corporations may be substantially
different. Foreign investors should consult their counsel for
further information as to the U.S. tax consequences of receipt of
income from the Fund.

<PAGE>

Currency Fluctuations - "Section 988" Gains or Losses.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues
interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities
are treated as ordinary income or ordinary loss. Similarly,
gains or losses from the disposition of foreign currencies, from
the disposition of debt securities denominated in a foreign
currency, from the disposition of over-the-counter options with
respect to foreign currency, or from the disposition of a forward
contract denominated in a foreign currency (and from regulated
futures contracts and certain non-equity options if the Fund so
elects) which are attributable to fluctuations in the value of
the foreign currency between the date of acquisition of the asset
and the date of disposition also are treated as ordinary gain or
loss. These gains or losses, referred to under the Code as
"section 988" gains or losses, increase or decrease the amount of
the Fund's investment company taxable income available to be
distributed to its shareholders as ordinary income, rather than
increasing or decreasing the amount of the Fund's net capital
gain. Because section 988 losses reduce the amount of ordinary
dividends the Fund will be allowed to distribute for a taxable
year, such section 988 losses may result in all or a portion of
prior dividend distributions for such year being recharacterized
as a non-taxable return of capital to shareholders, rather than
as an ordinary dividend, reducing each shareholder's basis in his
Fund shares. To the extent that such distributions exceed such
shareholder's basis, each will be treated as a gain from the sale
of shares.

Options, Futures Contracts, and Forward Foreign Currency
Contracts. Certain listed options, forward foreign currency
contracts and regulated futures contracts are considered "section
1256 contracts" for Federal income tax purposes. Section 1256
contracts held by the Fund at the end of each taxable year will
be "marked to market" and treated for Federal income tax purposes
as though sold for fair market value on the last business day of
such taxable year. Gain or loss realized by the Fund on forward
foreign currency contracts will be treated as section 988 gain or
loss, as described above. In general, gain or loss realized by
the Fund on other types of section 1256 contracts 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. These results could vary if the
Fund makes one or more elections available under sections 988 and
1256.

The Treasury Department has the authority to issue
regulations that would permit or require the Fund either to

<PAGE>

integrate a foreign currency hedging transaction with the
investment that is hedged and treat the two as a single
transaction, or otherwise to treat the hedging transaction in a
manner that is consistent with the hedged investment. Regulations
under this authority generally should not apply to the type of
hedging transactions in which the Fund intends to engage.

Gain or loss realized by the Fund upon the lapse or sale
of put and call equity 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 if 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.

Gain or loss realized by the Fund on the lapse or sale
of put and call options on foreign currencies which are traded
over-the-counter or on certain foreign exchanges will be treated
as section 988 gain or loss and will therefore be characterized
as ordinary income or loss and will increase or decrease the
amount of the Fund's net investment income available to be
distributed to shareholders as ordinary income, as described
above. The amount of such gain or loss shall be determined by
subtracting the amount paid, if any, for or with respect to the
option (including any amount paid by the Fund upon termination of
an option written by the Fund) from the amount received, if any,
for or with respect to the option (including any amount received
by the Fund upon termination of an option held by the Fund). In
general, if the Fund exercises such an option on a foreign
currency, or if such an option that the Fund has written is
exercised, gain or loss on the option will be recognized in the
same manner as if the Fund had sold the option (or paid another
person to assume the Fund's obligation to make delivery under the
option) on the date on which the option is exercised, for the
fair market value of the option.

Tax Straddles. Any option, futures contract, or other
position entered into or held by the Fund in conjunction with any
other position held by the Fund may constitute a "straddle" for
federal income tax purposes. A straddle of which at least one,
but not all, the positions are section 1256 contracts may
constitute a "mixed straddle". In general, straddles are subject
to certain rules that may affect 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

<PAGE>

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. Various elections are available to
the Fund which may mitigate the effects of the straddle rules,
particularly with respect to mixed straddles.

_______________________________________________________________

BROKERAGE AND PORTFOLIO TRANSACTIONS
_______________________________________________________________

Transactions on stock exchanges involve the payment of
brokerage commissions. In transactions on stock exchanges in the
United States, these commissions are negotiated, whereas on
foreign stock exchanges these commissions are generally fixed. In
the case of securities traded in the foreign and domestic over-
the-counter markets, there is generally no stated commission, but
the price usually includes an undisclosed commission or markup.
In underwritten offerings, the price includes a disclosed fixed
commission or discount.

Investment information provided to the Adviser is of the
type described in Section 28(e) of the Securities Exchange Act of
1934, as amended, and is designed to augment the Adviser's own
internal research and investment strategy capabilities. Research
services furnished by broker-dealers 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. There may be occasions where
the transaction cost charged by a broker-dealer may be greater
than that which another broker-dealer may charge if the Fund
determines in good faith that the amount of such transaction cost
is reasonable in relationship to the value of the brokerage and
research services provided by the executing broker-dealer.

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

<PAGE>

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 is permitted to place brokerage orders with
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), a
U.S. registered broker-dealer and 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 in 1998, 1997 and 1996,
the Fund incurred brokerage commissions amounting in the
aggregate to $1,675,091, $2,289,060 and $887,354, respectively.
During the fiscal years ended in 1998, 1997 and 1996, brokerage
commissions amounting in the aggregate to $0, $0 and $0,
respectively, were paid to DLJ and brokerage commissions
amounting in the aggregate to $0, $0, and $0, respectively, were
paid to brokers utilizing the Pershing Division of DLJ. During
the fiscal year ended in June 30, 1998, the brokerage commissions
paid to DLJ constituted 0% of the Fund's aggregate brokerage
commissions and the brokerage commissions paid to brokers
utilizing the Pershing Division of DLJ constituted 0% of the
Fund's aggregate brokerage commissions. During the fiscal year
ended in June 30, 1998, of the Fund's aggregate dollar amount of
brokerage transactions involving the payment of commissions, 0%
were effected through DLJ and 0% were effected through brokers
utilizing the Pershing Division of DLJ. During the fiscal year
ended June 30, 1998, transactions in portfolio securities of the
Fund aggregating $686,020,488 with associated brokerage
commissions of approximately $694,393 were allocated to persons
or firms supplying research services to the Fund or the Adviser.

<PAGE>

_______________________________________________________________

GENERAL INFORMATION
_______________________________________________________________

Capitalization. The Fund was organized as a Maryland
Corporation in 1980. In November 1985 the Fund was reorganized
under the laws of Massachusetts as a Massachusetts business
trust. The Fund has an unlimited number of authorized Class A,
Class B, Class C and Advisor Class shares of beneficial interest,
par value $.01 per share. All shares of the Fund, when issued,
are fully paid and nonassessable. The Trustees are authorized to
reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees 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 would be governed by the 1940 Act and the
law of the Commonwealth of Massachusetts. If shares of another
class 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 for the election of
Trustees and on any other matter 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 separate classes.

The Fund's shares have non-cumulative voting rights,
which means that the holders of more than 50% of the shares
voting for election of Trustees can elect 100% of the directors
if they choose to do so, and in such event the holders of the
remaining less than 50% of the shares voting for such election of
Trustees will not be able to elect any persons or persons as
Trustees.

Procedures for calling a shareholders meeting for the
removal of Trustees of the Fund, similar to those set forth in
Section 16(c) of the 1940 Act, are available to shareholders of
the Fund. Meetings of shareholders may be called by 10% of the
Fund's outstanding shareholders. The rights of the holders of
shares of a series may not be modified except by 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 Trustees.

<PAGE>

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 Trustees,
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.

As of the close of business on _________, 1999, there
were [ ] Class A shares, [ ] Class B shares, [
] Class C shares and [ ] Advisor Class shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund, the following persons owned of record or beneficially
5% or more of the outstanding shares of the Fund as of
[ ], 1999:

No. of % of
Name and Address Shares Class

Principal Underwriter. Alliance Fund Distributors, Inc.
an indirect wholly-owned subsidiary of Alliance, located at 1345
Avenue of the Americas, New York, New York 10105, is the
principal underwriter of 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 offered hereby are passed upon by Seward & Kissel,

<PAGE>

New York, New York. Seward & Kissel has relied upon the opinion
of Sullivan & Worcester, Boston, Massachusetts, for matters
relating to Massachusetts law.

Independent Auditors. Ernst & Young LLP, New York, New
York, have been appointed as independent auditors for the Fund.

Custodian. Brown Brothers & Harriman Co. ("Brown
Brothers"), 40 Water Street, Boston, Massachusetts 02109, will
act as the Fund's custodian for the assets of the Fund, but plays
no part in deciding the purchase or sale of portfolio securities.
Subject to the supervision of the Fund's Trustees, Brown Brothers
may enter into sub-custodial agreements for the holding of the
Fund's foreign securities.

Performance Information

From time to time, the Fund advertises its "total
return," which is computed separately for Class A, Class B,
Class C and Advisor Class shares. Such advertisements disclose a
Fund's average annual compounded total return for the periods
prescribed by the Commission. The Fund's total return for each
such 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 the investment at the end of the
period. For purposes of computing total return, income dividends
and capital gains distributions paid on shares of the Fund are
assumed to have been reinvested when paid and the maximum sales
charges applicable to purchases and redemptions of the Fund's
shares are assumed to have been paid.

The Fund's average annual compounded total return for
the one-, five- and ten-year periods ended June 30, 1998 (or
since inception through that date, as noted) were as follows:

Year Ended 5 Years Ended 10 Years Ended
6/30/98 6/30/98 6/30/98

Class A 6.79% 10.05% 8.47%
Class B 5.92% 9.13% 6.56%*
Class C 5.85% 9.13% 8.57%*
Advisor Class 6.98% 10.64%* N/A

*Inception Dates: Class B - September 17, 1990
Class C - May 3, 1993
Advisor Class - October 1, 1996

The Fund's total return is computed separately for
Class A, Class B, Class C and Advisor Class shares. The Fund's
total return is not fixed and will fluctuate in response to

<PAGE>

prevailing market conditions or as a function of the type and
quality of the securities in the Fund's portfolio and the Fund's
expenses. Total return information is useful in reviewing the
Fund's performance, but such information may not provide a basis
for comparison with bank deposits or other investments which pay
a fixed yield for a stated period of time. An investor's
principal invested in the Fund is not fixed and will fluctuate in
response to prevailing market conditions.

Advertisements quoting performance rankings or ratings
of the Fund as measured by financial publications or by
independent organizations such as Lipper Analytical Services,
Inc., and Morningstar, Inc. and advertisements presenting the
historical record of payments of income dividends by the Fund
may also from time to time be sent to investors or placed in
newspapers and magazines such as The New York Times, The Wall
Street Journal, Barrons, Investor's Daily, Money Magazine,
Changing Times, Business Week and Forbes or other media on behalf
of the Fund. The Fund has been ranked by Lipper in the category
known as "international" funds.

Additional Information. Any shareholder inquiries may
be directed to the shareholder's broker or to Alliance Fund
Services, Inc. at the address or telephone numbers shown on the
front cover of this Statement of Additional Information. This
Statement of Additional Information does not contain all the
information set forth in the Registration Statement filed by the
Fund with the Commission. Copies of the Registration Statement
may be obtained at a reasonable charge from the Commission or may
be examined, without charge, at the offices of the Commission in
Washington, D.C.

_______________________________________________________________

REPORT OF INDEPENDENT AUDITORS AND FINANCIAL
STATEMENTS
_______________________________________________________________

<PAGE>

_______________________________________________________________

APPENDIX A: Futures Contracts and Options on
Futures Contracts and Foreign
Currencies
_______________________________________________________________

Futures Contracts

The Fund may enter into financial futures contracts,
including contracts for the purchase or sale for future delivery
of foreign currencies and futures contracts based on stock
indices. U.S. futures contracts have been designed by exchanges
which have been designated "contracts markets" by the Commodity
Futures Trading Commission ("CFTC"), and must be executed through
a futures commission merchant, or brokerage firm, which is a
member of the relevant contract market. Futures contracts trade
on a number of exchange markets, and, through their clearing
corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange.

At the same time a futures contract is purchased or
sold, the Fund must allocate cash or securities as a deposit
payment ("initial deposit"). It is expected that the initial
deposit would be approximately 1/2%-5% of a contract's face
value. Daily thereafter, the futures contract is valued and the
payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or
increase in the contract's value.

At the time of delivery of securities pursuant to such a
contract, adjustments are made to recognize differences in value
arising from the delivery of securities with a different interest
rate from that specified in the contract. In some (but not many)
cases, securities called for by a futures contract may not have
been issued when the contract was written.

Although futures contracts by their terms call for the
actual delivery or acquisition of securities, in most cases the
contractual obligation is fulfilled before the date of the
contract without having to make or take delivery of the
securities. The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for
delivery in the same month. Such a transaction, which is
effected through a member of an exchange, cancels the obligation
to make or take delivery of the securities. Since all
transactions in the futures market are made, offset or fulfilled
through a clearinghouse associated with the exchange on which the
contracts are traded, the Fund will incur brokerage fees when it
purchases or sells futures contracts.

A-1

<PAGE>

The ordinary spreads between prices in the cash and
futures markets, due to differences in the nature of those
markets, are subject to distortions. First, all participants in
the futures market are subject to initial deposit and variation
margin requirements. Rather than meeting additional variation
margin requirements, investors may close futures contracts
through offsetting transactions which could distort the normal
relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering
into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced, thus
producing distortion. Third, from the point of view of
speculators, the margin deposit requirements in the futures
market are less onerous than margin requirements in the
securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price
distortions. Due to the possibility of distortion, a correct
forecast of general interest rate trends by the Adviser may still
not result in a successful transaction.

In addition, futures contracts entail risks. Although
the Fund believes that use of such contracts will benefit the
Fund, if the Adviser's investment judgment is incorrect about the
general direction of a stock market index for example, the Fund's
overall performance would be poorer than if it had not entered
into any such contract. For example, if the Fund has hedged
against the possibility of a bear market in equities in a
particular country that would adversely affect the price of
equities held in its portfolio and there is a bull market
instead, the Fund will lose part or all of the benefit of the
increased value of the equities that it has hedged because it
will have offsetting losses in its futures positions. In
addition, in such situations, if the Fund has insufficient cash,
it may have to sell equities from its portfolio to meet daily
variation margin requirements. Such sales may be, but will not
necessarily be, at increased prices which reflect the rising
market. The Fund may have to sell securities at a time when it
may be disadvantageous to do so.

Options On Futures Contracts

The Fund intends to purchase and write options on
futures contracts. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call
option on an individual security. Depending on the pricing of
the option compared to either the price of the futures contract
upon which it is based or the price of the underlying securities,
it may or may not be less risky than ownership of the futures
contract or underlying securities.

A-2

<PAGE>

The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
security or foreign currency which is deliverable upon exercise
of the futures contract. If the futures price at expiration of
the option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's
portfolio holdings. The writing of a put option on a futures
contract constitutes a partial hedge against increasing prices of
the security or foreign currency which is deliverable upon
exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the
Fund will retain the full amount of the option premium which
provides a partial hedge against any increase in the price of
securities which the Fund intends to purchase. If a put or call
option the Fund has written is exercised, the Fund will incur a
loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes
in the value of its portfolio securities and changes in the value
of its futures positions, the Fund's losses from existing options
on futures may to some extent be reduced or increased by changes
in the value of portfolio securities.

The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities. For example, the Fund may
purchase a put option on a futures contract to hedge the Fund's
portfolio against the risk of a general market decline.

The amount of risk the Fund assumes when it purchases an
option on a futures contract is the premium paid for the option
plus related transaction costs. In addition to the correlation
risks discussed above, the purchase of an option also entails the
risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased.

Options On Foreign Currencies

The Fund may purchase and write options on foreign
currencies in a manner similar to that in which futures contracts
on foreign currencies, or forward contracts, will be utilized.
For example, a decline in the dollar value of a foreign currency
in which portfolio securities are denominated will reduce the
dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against
such diminutions in the value of portfolio securities, the Fund
may purchase put options on the foreign currency. If the value
of the currency does decline, the Fund will have the right to
sell such currency for a fixed amount in dollars and will thereby
offset, in whole or in part, the adverse effect on its portfolio
which otherwise would have resulted.

A-3

<PAGE>

Conversely, where a rise in the dollar value of a
currency in which securities to be acquired are denominated is
projected, thereby increasing the cost of such securities, the
Fund may purchase call options thereon. The purchase of such
options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Fund deriving from
purchases of foreign currency options will be reduced by the
amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the Fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.

The Fund may also write options on foreign currencies
for the same purposes. For example, where the Fund anticipates a
decline in the dollar value of foreign currency denominated
securities due to adverse fluctuations in exchange rates it
could, instead of purchasing a put option, write a call option on
the relevant currency. If the expected decline occurs, the
option will most likely not be exercised, and the diminution in
value of portfolio securities will be offset by the amount of the
premium received.

Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar cost of securities
to be acquired, the Fund could write a put option on the relevant
currency which, if rates move in the manner projected, will
expire unexercised and allow the Fund to hedge such increased
cost up to the amount of the premium. As in the case of other
types of options, however, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of
the premium, and only if rates move in the expected direction. If
this does not occur, the option may be exercised and the Fund
would be required to purchase or sell the underlying currency at
a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the Fund
also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements
in exchange rates.

The Fund intends to write covered call options on
foreign currencies. A call option written on a foreign currency
by the Fund is "covered" if the Fund owns the underlying foreign
currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a
segregated account by its Custodian) upon conversion or exchange
of other foreign currency held in its portfolio. A call option
is also covered if the Fund has a call on the same foreign

A-4

<PAGE>

currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less
than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. Government Securities or
other appropriate liquid securities in a segregated account with
its Custodian.

The Fund also intends to write call options on foreign
currencies that are not covered for cross-hedging purposes. A
call option on a foreign currency is for cross- hedging purposes
if it is not covered, but is designed to provide a hedge against
a decline in the U.S. dollar value of a security which the Fund
owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the
exchange rate. In such circumstances, the Fund collateralizes
the option by maintaining in a segregated account with the Fund's
Custodian, cash or U.S. government securities or other
appropriate liquid securities in an amount not less than the
value of the underlying foreign currency in U.S. dollars marked
to market daily.

Additional Risks Of Options On Futures Contracts, Forward
Contracts and Options on Foreign Currencies

Unlike transactions entered into by the Fund in futures
contracts, options on foreign currencies and forward contracts
are not traded on contract markets regulated by the CFTC or (with
the exception of certain foreign currency options) by the
Commission. To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign
currency options are also traded on certain national securities
exchanges, such as the Philadelphia Stock Exchange and the
Chicago Board Options Exchange, subject to regulation by the
Commission. Similarly, options on currencies may be traded over-
the-counter. In an over-the-counter trading environment, many of
the protections afforded to exchange participants will not be
available. For example, there are no daily price fluctuation
limits, and adverse market movements could therefore continue to
an unlimited extent over a period of time. Although the
purchaser of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could
be lost. Moreover, the option writer and a trader of forward
contracts could lose amounts substantially in excess of their
initial investments, due to the margin and collateral
requirements associated with such positions.

Options on foreign currencies traded on national
securities exchanges are within the jurisdiction of the
Commission, as are other securities traded on such exchanges. As
a result, many of the protections provided to traders on

A-5

<PAGE>

organized exchanges will be available with respect to such
transactions. In particular, all foreign currency option
positions entered into on a national securities exchange are
cleared and guaranteed by the Options Clearing Corporation
("OCC"), thereby reducing the risk of counterparty default.
Further, a liquid secondary market in options traded on a
national securities exchange may be more readily available than
in the over-the-counter market, potentially permitting the Fund
to liquidate open positions at a profit prior to exercise or
expiration, or to limit losses in the event of adverse market
movements.

The purchase and sale of exchange-traded foreign
currency options, however, is subject to the risks of the
availability of a liquid secondary market described above, as
well as the risks regarding adverse market movements, margining
of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects
of other political and economic events. In addition, exchange-
traded options on foreign currencies involve certain risks not
presented by the over-the-counter market. For example, exercise
and settlement of such options must be made exclusively through
the OCC, which has established banking relationships in
applicable foreign countries for this purpose. As a result, the
OCC may, if it determines that foreign governmental restrictions
or taxes would prevent the orderly settlement of foreign currency
option exercises, or would result in undue burdens on the OCC or
its clearing member, impose special procedures on exercise and
settlement, such as technical changes in the mechanics of
delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.

In addition, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies
may be traded on foreign exchanges. Such transactions are
subject to the risk of governmental actions affecting trading in
or the prices of foreign currencies or securities. The value of
such positions also could be adversely affected by (i) other
complex foreign political and economic factors, (ii) lesser
availability than in the United States of data, on which to make
trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during nonbusiness
hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) lesser trading
volume.

A-6

<PAGE>

_____________________________________________________________

APPENDIX B: ADDITIONAL INFORMATION ABOUT JAPAN
_____________________________________________________________

The information in this section is based on material
obtained by the Fund from various Japanese governmental and other
sources believed to be accurate but has not been independently
verified by the Fund or the Adviser. It is not intended to be a
complete description of Japan, its economy or the consequences of
investing in Japanese securities.

Japan, located in eastern Asia, consists of four main
islands: Hokkaido, Honshu, Kyushu and Shikoku, and many small
islands. Its population is approximately 126 million.

GOVERNMENT

The government of Japan is a representative democracy
whose principal executive is the Prime Minister. Japan's
legislature (known as the Diet) consists of two houses, the House
of Representatives (the lower house) and the House of Councillors
(the upper house).

POLITICS

From 1955 to 1993, Japan's government was controlled by
the Liberal Democratic Party (the "LDP"), the major conservative
party. In August 1993, after a main faction left the LDP over
the issue of political reform, a non-LDP coalition government was
formed consisting of centrist and leftist parties and was headed
by Prime Minister Morihiro Hosokawa. In April 1994, Mr. Hosokawa
resigned due to allegations of personal financial irregularities.
The coalition members thereafter agreed to choose as prime
minister the foreign minister, Tsutomu Hata. As a result of the
formation of a center-right voting bloc, however, the Japan
Socialist Party (the "JSP"), a leftist party, withdrew from the
coalition. Consequently, Mr. Hata's government was a minority
coalition, the first since 1955, and was therefore unstable. In
June 1994, Mr. Hata and his coalition were replaced by a new
coalition made up of the JSP (since renamed the "Social
Democratic Party (the "SDP")), the LDP and the small New Party
Sakigake (the "Sakigake"). This coalition, which surprised many
because of the historic rivalries between the LDP and the SDP,
was led by Tomiichi Murayama, the first Socialist prime minister
in 47 years. Mr. Murayama stepped down in January 1996 and was
succeeded as Prime Minister by Liberal Democrat Ryutaro
Hashimoto. By September 1996, when Prime Minister Hashimoto
called for a general election on October 20, 1996, the stability
of the SDP-LDP-Sakigake coalition had become threatened. Both
the SDP and the Sakigake had lost more than half their seats in

B-1

<PAGE>

the lower house of the Diet when a faction of the Sakigake split
off to form the Democratic Party of Japan. Their strength was
further diminished as a result of the October 20, 1996 general
election. Although the LDP was 12 seats short of winning a
majority in the election, it has been able to reduce the margin
to three seats and to achieve enough support from its two former
coalition parties, the SDP and the Sakigake, as well as
independents and other conservatives, to return Japan to a
single-party government for the first time since 1993. Mr.
Hashimoto was reappointed as Prime Minister on November 7, 1996.
The opposition is dominated by the New Frontier Party, which was
established in December 1994 by various opposition groups and
parties.

ECONOMY

The Japanese economy maintained an average annual growth
rate of 2.1% in real GDP terms from 1990 through 1994, compared
with 2.4% for the United States during the same period. In 1995
and 1996, Japan's real GDP growth was 1.4% and 3.6%,
respectively. A growth rate of approximately 2.0% has been
forecast for 1997; however, in September 1997 the government
announced that GDP shrank by 2.9% in the second quarter, the
largest quarterly drop in 25 years, causing the forecast to drop
to 1.1%. Inflation has remained low, 1.3% in 1993, 0.7% in 1994,
- -0.1% in 1995 and 0.1% in 1996. It is estimated that inflation
in 1997 will be about 1%. As a result of the growing economy and
low inflation, private consumer demand has grown strongly but
will be affected by higher consumer taxes that went into effect
in 1997. Unemployment is still at its highest level in forty
years and is not expected to fall appreciably in the foreseeable
future. In addition, employment has been shifting from the
manufacturing sector to the service sector, a trend that was
expected to continue in 1997.

Japan's post World War II reliance on heavy industries
has shifted to higher technology products assembly and, most
recently, to automobile, electrical and electronic production.
Japan's success in exporting its products has generated sizable
trade surpluses. Japan is in a difficult phase in its relations
with its trading partners that is partly due to the concentration
of Japanese exports in products such as automobiles, machine
tools and semiconductors and the large trade surpluses ensuing
therefrom, recent large and visible Japanese real estate
investments in the United States and an overall trade imbalance
as indicated by Japan's balance of payments. Although it is
probable that the recent improvement of the United States economy
and an increased competitiveness and success in manufacturing,
such as with the U.S. automobile industry, has had a negative
effect on Japan's growth, Japan's overall trade surplus for 1994
was the largest in its history, amounting to almost $145 billion.

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Exports totaled $386 billion, up 9.3% from 1993, and imports were
$242 billion, up 13.6% from 1993. The current account surplus in
1994 was $130 billion, down 1.5% from from a record high in 1993.
In 1995, Japan's overall trade surplus amounted to $132 billion.
Exports totaled $429 billion, up 10.0% from 1994, and imports
were $297 billion, up 22.8% from 1994. In 1995, the current
account surplus decreased 14.6% to $111 billion. In 1996,
Japan's overall trade surplus amounted to $83 billion, exports
totaled $400 billion, down 6.8% from 1995, and imports totaled
$317 billion, up 6.7% from 1995. During the first nine months of
1997, the trade surplus, which had been declining since its 1994
high, reversed course and increased approximately 37% from the
same period in 1996. This upward trend of the trade surplus is
expected to continue in the near future. Japan remains the
largest creditor nation and a significant donor of foreign aid.

On October 1, 1994, the U.S. and Japan reached an
agreement that may lead to more open Japanese markets with
respect to insurance, glass and medical and telecommunications
equipment. In June 1995, the two countries agreed in principal
to increase Japanese imports of American automobiles and
automotive parts. The final wording of the agreement is
ambiguous, and therefore it is likely that this issue will
continue to be a source of tension between the two countries.
Other current sources of tension between the two countries, are
disputes in connection with trade in semiconductors and
photographic supplies, deregulation of the Japanese insurance
market, a dispute over aviation rights and access to Japanese
ports. It is expected that the friction between the United
States and Japan with respect to trade issues will continue for
the foreseeable future.

In response to pressures caused by the slumping Japanese
economy, the fragile financial markets and the appreciating Yen,
the Japanese government, in April and June 1995, announced
emergency economic packages that focused on higher and
accelerated public works spending and increased aid for post-
earthquake reconstruction in the Kobe area. These measures
helped to increase public investment and lead to faster GDP
growth, but failed to produce fundamental changes.

In addition to the government's emergency economic
packages announced in 1995, the Bank of Japan attempted to assist
the financial markets by lowering its official discount rate to a
record low in 1995. However, large amounts of bad debt have
prevented banks from expanding their loan portfolios despite low
discount rates. Japanese banks have suffered several years of
declining profits and many banks have required public funds to
avert insolvency. In June 1995, the Finance Ministry announced
an expansion of deposit insurance and restrictions on rescuing
insolvent banks. In June 1996, six bills designed to address the

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large amount of bad debt in the banking system were passed by the
Diet. By March 1997, the Finance Ministry estimated that the
extent of non-performing debt at all financial institutions had
declined 19.8% from its estimate a year earlier. Nevertheless,
the financial system's fragility is expected to continue for the
foreseeable future.

In November 1996, Prime Minister Hashimoto announced a
set of initiatives to deregulate the financial sector by the year
2001. Known as "Tokyo's Big Bang," the proposed reforms include
changes in tax laws to favor investors, the lowering of barriers
between banking, securities and insurance, abolition of foreign
exchange restrictions and other measures designed to revive
Tokyo's status in the international capital markets and to
stimulate the economy. In June 1997, the government announced a
detailed blueprint for implementing the Big Bang. Legislation to
implement certain reforms has already been approved. These
include a liberalization of foreign exchange restrictions and a
repeal of the ban on holding companies.

A growing budget deficit and the threat of a budget
crisis have resulted in a tightening of fiscal policy. In March
1997, Prime Minister Hashimoto announced the first detailed plan
for fiscal reform. The plan calls for the lowering of the budget
deficit to below 3% of GDP by Fiscal Year 2003/2004. In June
1997, specific proposals for spending cuts were approved by the
cabinet and a Fiscal Reform Law, incorporating the proposals into
binding targets, will be presented to the Diet late in 1997.
Measures to control and reduce the budget deficit mitigate
against the government utilizing a direct fiscal stimulus package
to stimulate the economy. Instead, the emphasis will remain on
monetary policy to stimulate the economy.

Between 1985 and 1995, the Japanese Yen generally
appreciated against the U.S. Dollar. Between 1990 and 1994 the
Yen's real effective exchange rate appreciated by approximately
36%. On April 19, 1995, the Japanese Yen reached an all time
high of 79.75 against the U.S. Dollar. Since its peak of April
19, 1995, the Yen has generally decreased in value against the
U.S. Dollar. On April 30, 1997, the exchange rate reached a low
of 127.03 Yen per U.S. Dollar, the lowest the exchange rate had
been in almost five years. On September 30, 1997, the exchange
rate was 120.50 Yen per U.S. Dollar.

JAPANESE STOCK EXCHANGES. Currently, there are eight
stock exchanges in Japan. The Tokyo Stock Exchange (the "TSE"),
the Osaka Securities Exchange and the Nagoya Stock Exchange are
the largest, together accounting for approximately 98.9% of the
share trading volume and for about 98.8% of the overall trading
value of all shares traded on Japanese stock exchanges during the
year ended December 31, 1996. The other stock exchanges are

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located in Kyoto, Hiroshima, Fukuoka, Niigata and Sapporo. The
chart below presents annual share trading volume (in millions of
shares) and overall year-end market value (in billions of yen)
information with respect to each of the three major Japanese
stock exchanges for the years 1989 through 1996. Trading volume
and the value of foreign stocks are not included.

All Exchanges TOKYO OSAKA NAGOYA
VOLUME VALUE VOLUME VALUE VOLUME VALUE VOLUME VALUE
________ ______ _____ _____ ______ _____ ______ _____

1989 256,296 386,395 222,599 332,617 25,096 41,679 7,263 10,395
1990 145,837 231,837 123,099 186,667 17,187 35,813 4,323 7,301
1991 107,844 134,160 93,606 110,897 10,998 18,723 2,479 3,586
1992 82,563 80,456 66,408 60,110 12,069 15,575 3,300 3,876
1993 101,173 106,123 86,935 86,889 10,440 14,635 2,780 3,459
1994 105,937 114,622 84,514 87,356 14,904 19,349 4,720 5,780
1995 120,149 115,840 92,034 83,564 21,094 24,719 5,060 5,462
1996 126,496 136,170 101,170 101,893 20,783 27,280 4,104 5,391

Source: The Tokyo Stock Exchange 1994, 1995, 1996 and 1997 Fact
Books.

THE TOKYO STOCK EXCHANGE

OVERVIEW OF THE TOKYO STOCK EXCHANGE. The TSE is the
largest of the Japanese stock exchanges and as such is widely
regarded as the principal securities exchange for all of Japan.
In 1996, the TSE accounted for 74.8% of the market value and
79.2% of the share trading volume on all Japanese stock
exchanges. A foreign stock section on the TSE, consisting of
shares of non-Japanese companies, listed 67 non-Japanese
companies at the end of 1996. The market for stock of Japanese
issuers on the TSE is divided into a First Section and a Second
Section. The First Section is generally for larger, established
companies (in existence for five years or more) that meet listing
criteria relating to the size and business condition of the
issuing company, the liquidity of its securities and other
factors pertinent to investor protection. The TSE's Second
Section is for smaller companies and newly listed issuers.

SECTOR ANALYSIS OF THE FIRST AND SECOND SECTIONS. The
TSE's domestic stocks include a broad cross-section of companies
involved in many different areas of the Japanese economy. At the
end of 1996, the three largest industry sectors, based on market
value, listed on the first section of the TSE were banking, with
100 companies representing 20.0% of all domestic stocks listed on
the TSE; electric appliances, with 129 companies representing
12.5% of all domestic stocks so listed; and transportation
equipment with 60 companies representing 9.6% of all domestic

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stocks so listed. No other industry sector represented more than
5% of TSE listed domestic stocks.

MARKET GROWTH OF THE TSE. The First and Second Sections
of the TSE grew in terms of both average daily trading value and
aggregate year-end market value from 1982, when they were l28,320
million yen and 98,090 billion yen, respectively, through the end
of 1989, when they were 1,335,810 million yen and 611,152 billion
yen, respectively. Following the peak in 1989, both average
daily trading value and aggregate year-end market value declined
through 1992 when they were 243,362 million yen and 289,483
billion yen, respectively. In 1993 and 1994, both average daily
trading value and aggregate year-end market value increased and
were 353,208 and 353,666 million yen, respectively, and 324,357
and 358,392 billion yen, respectively. In 1995, average daily
trading value decreased to 335,598 million yen and aggregate
year-end market value increased to 365,716 billion yen. In 1996,
average daily trading volume increased to 412,521 million yen and
aggregate year-end market value decreased to 347,578 billion yen.

MARKET PERFORMANCE OF THE FIRST SECTION. As measured by
the TOPIX, a capitalization-weighted composite index of all
common stocks listed in the First Section, the performance of the
First Section reached a peak of 2,884.80 on December 18, 1989.
Thereafter, the TOPIX declined approximately 45% through
December 29, 1995. On December 30, 1996 the TOPIX closed at
1,470.94, down approximately 7% from the end of 1995. On
September 30, 1997, the TOPIX closed at 1,388.32, down
approximately 6% from the end of 1996. The price/earnings ratios
of First Section companies are on average high in comparison with
other major stock markets.

JAPANESE FOREIGN EXCHANGE CONTROLS

Under Japan's Foreign Exchange and Foreign Trade Control
Law and cabinet orders and ministerial ordinances thereunder (the
"Foreign Exchange Controls"), prior notification to the Minister
of Finance of Japan (the "Minister of Finance") of the
acquisition of shares in a Japanese company from a resident of
Japan (including a corporation) by a non-resident of Japan
(including a corporation) is required unless the acquisition is
made from or through a securities company designated by the
Minister of Finance or if the yen equivalent of the aggregate
purchase price of shares is not more than 100 million Yen. Even
in these situations, if a foreign investor intends to acquire
shares of a Japanese corporation listed on a Japanese stock
exchange or traded on a Japanese over-the-counter market
(regardless of the person from or through whom the foreign
investor acquires such shares) and as a result of the acquisition
the foreign investor would directly or indirectly hold 10% or
more of the total outstanding shares of that corporation, the

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foreign investor must file a report within 15 days from the day
of such acquisition with the Minister of Finance and any other
minister with proper jurisdiction. In instances where the
acquisition concerns national security or meets certain other
conditions specified in the Foreign Exchange Controls, the
foreign investor must file a prior notification with respect to
the proposed acquisition with the Minister of Finance and any
other minister with proper jurisdiction. The ministers may make
a recommendation to modify or prohibit the proposed acquisition
if they consider that the acquisition would impair the safety and
maintenance of public order in Japan or harmfully influence the
smooth operation of the Japanese economy. If the foreign
investor does not accept the recommendation, the ministers may
issue an order modifying or prohibiting the acquisition. In
certain limited and exceptional circumstances, the Foreign
Exchange Controls give the Minister of Finance the power to
require prior approval for any acquisition of shares in a
Japanese company by a non-resident of Japan.

In general, the acquisition of shares by non-resident
shareholders by way of stock splits, as well as the acquisition
of shares of a Japanese company listed on a Japanese stock
exchange by non-residents upon exercise of warrants or conversion
of convertible bonds, are not subject to any of the foregoing
notification or reporting requirements. Under the Foreign
Exchange Controls, dividends paid on share, held by non-residents
of Japan and the proceeds of any sales of shares within Japan
may, in general, be converted into any foreign currency and
remitted abroad.

Certain provisions of the Foreign Exchange Controls are
scheduled to be repealed or liberalized beginning in April 1998,
pursuant to legislation that was approved in May 1997 as part of
the plan to implement the Big Bang.

REGULATION OF THE JAPANESE EQUITIES MARKETS

The principal securities law in Japan is the Securities
and Exchange Law ("SEL") which provides overall regulation for
the issuance of securities in public offerings and private
placements and for secondary market trading. The SEL was amended
in 1988 in order to liberalize the securities market; to regulate
the securities futures, index, and option trade; to add
disclosure regulations; and to reinforce the prevention of
insider trading. Insider trading provisions are applicable to
debt and equity securities listed on a Japanese stock exchange
and to unlisted debt and equity securities issued by a Japanese
corporation that has securities listed on a Japanese stock
exchange or registered with the Securities Dealers Association
(the "SDA"). In addition, each of the eight stock exchanges in
Japan has its own constitution, regulations governing the sale

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and purchase of securities and standing rules for exchange
contracts for the purchase and sale of securities on the
exchange, as well as detained rules and regulations covering a
variety of matters, including rules and standards for listing and
delisting of securities.

The loss compensation incidents involving preferential
treatment of certain customers by certain Japanese securities
companies, which came to light in 1991, provided the impetus for
amendments to the SEL, which took effect in 1992, as well as two
reform bills passed by the Diet in 1992. The amended SEL now
prohibits securities companies from the operation of
discretionary accounts, loss compensation or provision of
artificial gains in securities transactions, directly or
indirectly, to their customers and making offers or agreements
with respect thereto. Despite these amendments, there have been
certain incidents involving loss compensation. To ensure that
securities are traded at their fair value, the SDA and the TSE
have promulgated certain rules, effective in 1992, which, among
other things, explicitly prohibit any transaction undertaken with
the intent to provide loss compensation of illegal gains
regardless of whether the transaction otherwise technically
complies with the rules. The reform bill passed by the Diet,
which took effect in 1992 and 1993, provides for the
establishment of a new Japanese securities regulator and for a
variety of reforms designed to revitalize the Japanese financial
and capital markets by permitting banks and securities companies
to compete in each other's field of business, subject to various
regulations and restrictions.

Further reforms in the regulation of the securities
markets are anticipated over the next several years as the Big
Bang is implemented.

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____________________________________________________________

APPENDIX C:

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

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

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

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

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

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

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PART C
OTHER INFORMATION

ITEM 23. Exhibits

(a) (1) First Amended and Restated Agreement and
Declaration of Trust of Registrant dated
December 13, 1990 - Incorporated by reference to
Exhibit 1 to Post-Effective Amendment No. 29 of
Registrant's Registration Statement on Form N-1A
(File Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 31,
1997.

(2) Certificate of Amendment of Agreement and
Declaration of Trust of Registrant dated April 27,
1993 - Incorporated by reference to Exhibit 1(b)
to Post-Effective Amendment No. 30 of Registrant's
Registration Statement on Form N-1A (File
Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 30,
1998.

(3) Certificate of Amendment of Agreement and
Declaration of Trust of Registrant dated
September 30, 1996 - Incorporated by reference to
Exhibit 1(c) to Post-Effective Amendment No. 30 of
Registrant's Registration Statement on Form N-1A
(File Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 30,
1998.

(b) By-Laws of Registrant - Incorporated by reference to
Exhibit 2 to Post-Effective Amendment No. 29 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-70428 and 811-3130) filed with the Securities
and Exchange Commission on October 31, 1997.

(d) Investment Advisory Agreement between the Registrant
and Alliance Capital Management L.P. - Incorporated by
reference to Exhibit 5 to Post-Effective Amendment
No. 29 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 31, 1997.

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

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Effective Amendment No. 30 of Registrant's
Registration Statement on Form N-1A (File
Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 30,
1998.

(2) Amendment to Distribution Services Agreement
between Registrant and Alliance Fund Distributors,
Inc. dated June 20, 1996 - Incorporated by
reference to Exhibit 6 to Post-Effective Amendment
No. 24 of Registrant's Registration Statement on
Form N-1A (File Nos. 2-70428 and 811-3130) filed
with the Securities and Exchange Commission on
October 1, 1996.

(3) Selected Dealer Agreement between Alliance Fund
Distributors, Inc. and selected dealers offering
shares of Registrant - Incorporated by reference
to Exhibit 6(b) to Post-Effective Amendment No. 29
of Registrant's Registration Statement on Form
N-1A (File Nos. 2-70428 and 811-3130) 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(c) to Post-Effective
Amendment No. 29 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-70428 and
811-3130) filed with the Securities and Exchange
Commission on October 31, 1997.

(f) Not applicable.

(g) Custodian Contract between the Registrant and Brown
Brothers Harriman & Co. - Incorporated by reference to
Exhibit 8 to Post-Effective Amendment No. 30 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-70428 and 811-3130) filed with the Securities
and Exchange Commission on October 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. 30 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on October 30, 1998.

(i) Opinion and Consent of Seward & Kissel - Incorporated
by reference to Exhibit 10 to Post-Effective Amendment

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No. 23 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-70428 and 811-3130) filed with the
Securities and Exchange Commission on August 28, 1995.

(j) Not applicable.

(k) Not applicable.

(l) Not applicable.

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

(n) Not applicable.

(o) Rule 18f-3 Plan - Incorporated by reference to
Exhibit 18 to Post-Effective Amendment No. 26 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-70428 and 811-3130) filed with the Securities
and Exchange Commission on April 23, 1996.

Other Exhibits:

Powers of Attorney for John D. Carifa, David H. Dievler,
John H. Dobkin, W. H. Henderson, Stig Host and Alan Stoga -
Incorporated by reference to Other Exhibits to Post-Effective
Amendment No. 30 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-70428 and 811-3130) filed with the Securities
and Exchange Commission on October 30, 1998.

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

None.

ITEM 25. Indemnification.

It is the Registrant's policy to indemnify its trustees
and officers, employees and other agents as set forth
in Article VIII and Article III of Registrant's
Agreement and Declaration of Trust, filed as
Exhibit (a) in response to Item 23 and Section 6 of the
Distribution Agreement filed as Exhibit (e)(1) in
response to Item 23, all as set forth below. The
liability of the Registrant's trustees and officers is
dealt with in Article VIII of Registrant's First
Amended and Restated Agreement and Declaration of
Trust, as set forth below. The Adviser's liability for
loss suffered by the Registrant or its shareholders is
set forth in Section 4 of the Advisory Agreement filed
as Exhibit (d) in response to Item 23, as set forth
below.

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Article VIII of Registrant's First Amended and Restated
Agreement and Declaration of Trust reads as follows:

SECTION 8.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice. The Trustees and officers of the
Trust, in incurring any debts, liabilities or
obligations, or in limiting or omitting any other
actions for or in connection with the Trust, are or
shall be deemed to be acting as Trustees or officers of
the Trust and not in their own capacities. No
Shareholder shall be subject to any personal liability
whatsoever in tort, contract or otherwise to any other
Person or Persons in connection with the assets or the
affairs of the Trust or of any Portfolio, and subject
to Section 8.4 hereof, no Trustee, officer, employee or
agent of the Trust shall be subject to any personal
liability whatsoever in tort, contract, or otherwise,
to any other Person or Persons in connection with the
assets or affairs of the Trust or of any Portfolio,
save only that arising from his own willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office or the discharge of his functions. The Trust
(or if the matter relates only to a particular
Portfolio, that Portfolio) shall be solely liable for
any and all debts, claims, demands, judgments, decrees,
liabilities or obligations of any and every kind,
against or with respect to the Trust or such Portfolio
in tort, contract or otherwise in connection with the
assets or the affairs of the Trust or such Portfolio,
and all Persons dealing with the Trust or any Portfolio
shall be deemed to have agreed that resort shall be had
solely to the Trust Property of the Trust or the
Portfolio Assets of such Portfolio, as the case may be,
for the payment or performance thereof.

The Trustees shall use their best efforts to ensure
that every note, bond, contract, instrument,
certificate or undertaking made or issued by the
Trustees or by any officers or officer shall give
notice that this Declaration of Trust is on file with
the Secretary of The Commonwealth of Massachusetts and
shall recite to the effect that the same was executed
or made by or on behalf of the Trust or by them as
Trustees or Trustee or as officers or officer, and not
individually, and that the obligations of such
instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the
assets and property of the Trust, or the particular
Portfolio in question, as the case may be, but the

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omission thereof shall not operate to bind any Trustees
or Trustee or officers or officer or Shareholders or
Shareholder individually, or to subject the Portfolio
Assets of any Portfolio to the obligations of any other
Portfolio.

SECTION 8.2 Trustees' Good Faith Action; Expert
Advice; No Bond or Surety. The exercise by the
Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. Subject to
Section 8.4 hereof, a Trustee shall be liable for his
own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or
mistakes of fact or law. Subject to the foregoing,
(i) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, Adviser, Administrator,
Distributor or Principal Underwriter, Custodian or
Transfer Agent, Dividend Disbursing Agent, Shareholder
Servicing Agent or Accounting Agent of the Trust, nor
shall any Trustee be responsible for the act or
omission of any other Trustee; (ii) the Trustees may
take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with
such advice or for failing to follow such advice; and
(iii) in discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written
reports made to the Trustees by any officer appointed
by them, any independent public accountant, and (with
respect to the subject matter of the contract involved)
any officer, partner or responsible employee of a
Contracting Party appointed by the Trustees pursuant to
Section 5.2 hereof. The Trustees as such shall not be
required to give any bond or surety or any other
security for the performance of their duties.

SECTION 8.3 Indemnification of Shareholders. If any
Shareholder (or former Shareholder) of the Trust shall
be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because
of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request
by the Shareholder) shall assume the defense against
such charge and satisfy any judgment thereon, and the
Shareholder or former Shareholder (or the heirs,

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<PAGE>

executors, administrators or other legal
representatives thereof, or in the case of a
corporation or other entity, its corporate or other
general successor) shall be entitled (but solely out of
the assets of the Portfolio of which such Shareholder
or former Shareholder is or was the holder of Shares)
to be held harmless from and indemnified against all
loss and expense arising from such liability.

SECTION 8.4 Indemnification of Trustees, Officers, etc.
Subject to the limitations set forth hereinafter in
this Section 8.4, the Trust shall indemnify (from the
assets of the Portfolio or Portfolios to which the
conduct in question relates) each of its Trustees and
officers (including Persons who serve at the Trust's
request as directors, officers or trustees of another
organization in which the Trust has any interest as a
shareholder, creditor or otherwise [hereinafter,
together with such Person's heirs, executors,
administrators or personal representative, referred to
as a "Covered Person"]) against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines
and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered
Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or
legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or
with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer,
director or trustee, except with respect to any matter
as to which it has been determined that such Covered
Person (i) did not act in good faith in the reasonable
belief that such Covered Person's action was in or not
opposed to the best interests of the Trust or (ii) had
acted with willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved
in the conduct of such Covered Person's office (either
and both of the conduct described in (i) and (ii) being
referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on
the merits by a court or other body before whom the
proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling
Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or

C-6

<PAGE>

(iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by
reason of Disabling Conduct by (a) a vote of a majority
of a quorum of Trustees who are neither "interested
persons" of the Trust as defined in Section 2(a)(19) of
the 1940 Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so
incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from
time to time by the Portfolio or Portfolios to which
the conduct in question related in advance of the final
disposition of any such action, suit or proceeding;
provided, that the Covered Person shall have undertaken
to repay the amounts so paid to such Portfolio or
Portfolios if it is ultimately determined that
indemnification of such expenses is not authorized
under this Article VIII and (i) the Covered Person
shall have provided security for such undertaking,
(ii) the Trust shall be insured against losses arising
by reason of any lawful advances, or (iii) a majority
of a quorum of the disinterested Trustees, or an
independent legal counsel in a written opinion, shall
have determined, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the Covered Person
ultimately will be found entitled to indemnification.

SECTION 8.5 Compromise Payment. As to any matter
disposed of by a compromise payment by any such Covered
Person referred to in Section 8.4 hereof, pursuant to a
consent decree or otherwise, no such indemnification
either for said payment or for any other expenses shall
be provided unless such indemnification shall be
approved (i) by a majority of a quorum of the
disinterested Trustees or (ii) by an independent legal
counsel in a written opinion. Approval by the Trustees
pursuant to clause (i) or by independent legal counsel
pursuant to clause (ii) shall not prevent the recovery
from any Covered Person of any amount paid to such
Covered Person in accordance with either of such
clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the
reasonable belief that such Covered Persons action was
in or not opposed to the best interests of the Trust or
to have been liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved
in the conduct of such Covered Persons office.

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<PAGE>

SECTION 8.6 Indemnification Not Exclusive, etc. The
right of indemnification provided by this Article VIII
shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used
in this Article VIII, a "disinterested" Person is one
against whom none of the actions, suits or other
proceedings in question, and no other action, suit or
other proceeding on the same or similar grounds is then
or has been pending or threatened. Nothing contained
in this Article VIII shall affect any rights to
indemnification to which personnel of the Trust, other
than Trustees and officers, and other Persons may be
entitled by contract or otherwise under law, nor the
power of the Trust to purchase and maintain liability
insurance on behalf of any such Person.

SECTION 8.7 Liability of Third Persons Dealing with
Trustees. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of
any transaction made or to be made by the Trustees or
to see to the application of any payments made or
property transferred to the Trust or upon its order.

Article III of Registrant's First Amended and Restated
Agreement and Declaration of Trust reads, in pertinent
part, as follows:

"Without limiting the foregoing and to the extent
not inconsistent with the 1940 Act or other
applicable law, the Trustees shall have power and
authority:

(s) Indemnification. In addition to the
mandatory indemnification provided for in
Article VIII hereof and to the extent
permitted by law, to indemnify or enter into
agreements with respect to indemnification
with any Person with whom this Trust has
dealings, including, without limitation, any
independent contractor, to such extent as the
Trustees shall determine."

The Advisory Agreement between Registrant and Alliance
Capital Management L.P. provides that Alliance Capital
Management L.P. will not be liable under such agreement
for any mistake of judgment or in any event whatsoever
except for lack of good faith and that nothing therein
shall 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 willful misfeasance,

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<PAGE>

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
or Prospectus and Statement of Additional Information
or arising out of, or based upon any alleged omission
to state a material fact required to be stated in or
necessary to make the statements in either thereof any
one of the foregoing not misleading, provided that
nothing therein shall be so construed as to protect
Alliance Fund Distributors, Inc. against any liability
to 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 thereunder, or by reason of reckless disregard
of its obligations and duties thereunder.

The foregoing summaries are qualified by the entire
text of Registrant's First Amended and Restated
Agreement and Declaration of Trust, the Advisory
Agreement between Registrant and Alliance Capital
Management L.P. and the 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 trustees, officers and controlling
persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection
with the securities being registered, the Registrant

C-9

<PAGE>

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 trustees,
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 of 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 trustees 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
trustees"), or (b) an independent legal counsel in a
written opinion. The Registrant will advance attorneys
fees or other expenses incurred by its trustees,
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 trustees of the Registrant, or
an independent legal counsel in a written opinion,
shall determine, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.

The Registrant participates in a joint
trustees/directors and officers liability insurance
policy issued by the ICI Mutual Insurance Company.
Coverage under this policy has been extended to
directors, trustees and officers of the investment
companies managed by Alliance Capital Management L.P.
Under this policy, outside trustees and directors are
covered up to the limits specified for any claim

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<PAGE>

against them for acts committed in their capacities as
trustee or director. A pro rata share of the premium
for this coverage is charged to each investment company
and to the Adviser.

ITEM 26. Business and Other Connections of Adviser.

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

The information as to the directors and executive
officers of Alliance Capital Management Corporation,
the general partner of Alliance Capital Management
L.P., set forth in Alliance Capital Management L.P.'s
Form ADV filed with the Securities and Exchange
Commission on 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, also acts as Principal
Underwriter or Distributor for the following investment
companies:

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Institutional Funds, Inc.
Alliance Institutional Reserves, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.

C-11

<PAGE>

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

Robert L. Errico Director and President

Geoffrey L. Hyde Director and Senior
Vice President

Dave H. Williams Director

David Conine Executive Vice President

Richard K. Saccullo Executive Vice President

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

Richard A. Davies Senior Vice President
Managing Director

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<PAGE>

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

Anne S. Drennan Senior Vice President
& Treasurer

Karen J. Bullot Senior Vice President

James S. Comforti Senior Vice President

James L. Cronin Senior Vice President

Daniel J. Dart Senior Vice President

Byron M. Davis Senior Vice President

Mark J. Dunbar Senior Vice President

Donald N. Fritts Senior Vice President

Bradley F. Hanson Senior Vice President

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

Ryne A. Nishimi Senior Vice President

Antonios G. Poleondakis Senior Vice President

Robert E. Powers Senior Vice President

Raymond S. Sclafani Senior Vice President

Gregory K. Shannahan Senior Vice President

Joseph F. Sumanski Senior Vice President

Peter J. Szabo Senior Vice President

Nicholas K. Willett Senior Vice President

Richard A. Winge Senior Vice President

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<PAGE>

Gerard J. Friscia Vice President &
Controller

Jamie A. Atkinson Vice President

Benji A. Baer Vice President

Kenneth F. Barkoff Vice President

Casimir F. Bolanowski Vice President

Michael E. Brannan Vice President

Timothy W. Call Vice President

Kevin T. Cannon Vice President

John R. Carl Vice President

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Richard W. Dabney Vice President

Stephen J. Demetrovits Vice President

John F. Dolan Vice President

John C. Endahl Vice President

Sohaila S. Farsheed Vice President

Shawn C. Gage Vice President

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

Mark D. Gersten Vice President Treasurer
and Chief
Financial
Officer

Joseph W. Gibson Vice President

John Grambone Vice President

George C. Grant Vice President

Charles M. Greenberg Vice President

C-14

<PAGE>

Alan Halfenger Vice President

William B. Hanigan Vice President

Scott F. Heyer Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo Vice President

Scott Hutton Vice President

Richard D. Keppler Vice President

Gwenn M. Kessler Vice President

Donna M. Lamback Vice President

Henry Michael Lesmeister Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Jerry W. Lynn Vice President

Christopher J. MacDonald Vice President

Michael F. Mahoney Vice President

Shawn P. McClain Vice President

Jeffrey P. Mellas Vice President

Thomas F. Monnerat Vice President

Christopher W. Moore Vice President

Timothy S. Mulloy Vice President

Joanna D. Murray Vice President

Nicole Nolan-Koester Vice President

John C. O'Connell Vice President

John J. O'Connor Vice President

James J. Posch Vice President

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<PAGE>

Domenick Pugliese Vice President and Assistant
Assistant General Secretary
Counsel

Bruce W. Reitz Vice President

Karen C. Satterberg Vice President

John P. Schmidt Vice President

Robert C. Schultz Vice President

Richard J. Sidell Vice President

Teris A. Sinclair Vice President

Scott C. Sipple Vice President

Elizabeth Smith Vice President

Martine H. Stansbery, Jr. Vice President

Andrew D. Strauss Vice President

Michael J. Tobin Vice President

Joseph T. Tocyloski Vice President

Thomas J. Vaughn Vice President

Martha D. Volcker Vice President

Patrick E. Walsh Vice President

Mark E. Westmoreland Vice President

William C. White Vice President

David E. Willis Vice President

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

Patrick Look Assistant Vice
President &
Assistant Treasurer

Michael W. Alexander Assistant Vice President

Richard J. Appaluccio Assistant Vice President

C-16

<PAGE>

Charles M. Barrett Assistant Vice President

Robert F. Brendli Assistant Vice President

Maria L. Carreras Assistant Vice President

John P. Chase Assistant Vice President

Russell R. Corby Assistant Vice President

Jean A. Cronin Assistant Vice President

John W. Cronin Assistant Vice President

Terri J. Daly Assistant Vice President

Ralph A. DiMeglio Assistant Vice President

Faith C. Deutsch Assistant Vice President

John E. English Assistant Vice President

Duff C. Ferguson Assistant Vice President

James J. Hill Assistant Vice President

Theresa Iosca Assistant Vice President

Erik A. Jorgensen Assistant Vice President

Eric G. Kalender Assistant Vice President

Edward W. Kelly Assistant Vice President

Michael Laino Assistant Vice President

Nicholas J. Lapi Assistant Vice President

Kristine J. Luisi Assistant Vice President

Kathryn Austin Masters Assistant Vice President

Richard F. Meier Assistant Vice President

Mary K. Moore Assistant Vice President

Richard J. Olszewski Assistant Vice President

Catherine N. Peterson Assistant Vice President

Rizwan A. Raja Assistant Vice President

C-17

<PAGE>

Carol H. Rappa Assistant Vice President

Clara Sierra Assistant Vice President

Gayle S. Stamer Assistant Vice President

Eileen Stauber Assistant Vice President

Vincent T. Strangio Assistant Vice President

Marie R. Vogel Assistant Vice President

Wesley S. Williams Assistant Vice President

Matthew Witschel Assistant Vice President

Christopher J. Zingaro Assistant Vice President

Mark R. Manley Assistant Secretary

ITEM 28. Location of Accounts and Records.

The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder
are maintained as follows: journals, ledgers,
securities records and other original records are
maintained principally at the offices of Alliance Fund
Services, Inc., 500 Plaza Drive, Secaucus, New Jersey
07094 and at the offices of Brown Brothers Harriman &
Company, the Registrant's Custodian, 40 Water Street,
Boston, Massachusetts 02109. 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.

(c) 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.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment to 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 24th day of November, 1998.

ALLIANCE INTERNATIONAL FUND

By /s/ John D. Carifa
____________________________
John D. Carifa
Chairman

Pursuant to the requirements of the Securities Act of
1933, as amended, this Amendment to the 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 November 24, 1998
_________________
John D. Carifa

(2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer November 24, 1998
__________________ and Chief
Mark D. Gersten Financial
Officer

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<PAGE>

(3) All of the Trustees

John D. Carifa
David H. Dievler
John H. Dobkin
William H. Henderson
Stig Host
Alan J. Stoga

By /s/ Edmund P. Bergan, Jr. Secretary November 24, 1998

________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.

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Index to Exhibits

Page

None.

C-21
00250086.AV2