This is filed pursuant to Rule 497(e).
File Nos.: 2-79807 and 811-03586
YIELDS
For current recorded yield information on the Fund, call toll-free:
(800):221-9513
The Fund, an open-end investment company with investment objectives of safety,
liquidity and tax-free income consists of the General Portfolio which is
diversified, and the the New York, California, Connecticut, New Jersey,
Virginia, and Florida Portfolios, each of which is non-diversified. Shares of
the New York, California, Connecticut, New Jersey, Virginia, Florida and
Massachusetts Portfolios are offered only to residents of each such respective
state. This prospectus sets forth the information about each Portfolio that a
prospective investor should know before investing. Please retain it for future
reference.
AN INVESTMENT IN THE FUND IS (I) NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT; (II) NOT A DEPOSIT OR OBLIGATION OF OR GUARANTEED OR ENDORSED BY,
ANY BANK; AND (III) NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE. THE PORTFOLIOS OF ALLIANCE MUNICIPAL TRUST, EXCEPT FOR THE
GENERAL PORTFOLIO, MAY INVEST A SIGNIFICANT PORTION OF THEIR ASSETS IN THE
SECURITIES OF A SINGLE ISSUER. ACCORDINGLY, AN INVESTMENT IN EACH SUCH
PORTFOLIO MAY BE RISKIER THAN AN INVESTMENT IN OTHER TYPES OF MONEY MARKET
FUNDS.
A "Statement of Additional Information" dated October 31, 1997, which provides
a further discussion of certain areas in this prospectus and other matters
which may be of interest to some investors, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. A free copy
may be obtained by contacting your Introducing Financial Institution.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE
CONTENTS
- --------
EXPENSE INFORMATION 2
FINANCIAL HIGHLIGHTS 3
INVESTMENT OBJECTIVES AND POLICIES 7
PURCHASE AND REDEMPTION OF SHARES 9
ADDITIONAL INFORMATION 10
RSA 97
ALLIANCE MONEY FUNDS
ALLIANCE MUNICIPAL TRUST
- - GENERAL PORTFOLIO
- - CALIFORNIA PORTFOLIO
- - CONNECTICUT PORTFOLIO
- - FLORIDA PORTFOLIO
- - MASSACHUSETTS PORTFOLIO
- - NEW JERSEY PORTFOLIO
- - NEW YORK PORTFOLIO
- - VIRGINIA PORTFOLIO
PROSPECTUS
OCTOBER 31, 1997
ALLIANCE CAPITAL
EXPENSE INFORMATION
_______________________________________________________________________________
SHAREHOLDER TRANSACTION EXPENSES
The Fund has no sales load on purchases or reinvested dividends, deferred sales
load, redemption fee or exchange fee.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES (as a percentage of
average net assets, after
expense reimbursement) AMT-GEN AMT-NY AMT-CA AMT-CT AMT-NJ AMT-VA AMT-FL AMT-MA
------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees .25 .25 .25 .25 .25 .25 .25 .25
Other Expenses .25 .25 .25 .25 .25 .25 .25 .25
Total Fund Operating Expenses 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period):
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- ------- --------
AMT--General $10 $32 $55 $122
AMT--New York $10 $32 $55 $122
AMT--California $10 $32 $55 $122
AMT--Connecticut $10 $32 $55 $122
AMT--New Jersey $10 $32 $55 $122
AMT--Virginia $10 $32 $55 $122
AMT--Florida $10 $32 $55 $122
AMT--Massachusetts $10 $32
The purpose of the foregoing table is to assist the investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
and indirectly. The expenses listed in the table for AMT-CT, AMT-NJ, AMT-VA and
AMT-FL are net of the contractual reimbursement by the Adviser described in
this prospectus. The expenses of such Portfolios, before expense
reimbursements, would be: AMT-CT: Management Fee-.50%, 12b-1 Fees-.25%, Other
Expenses-.31% and Total Operating Expenses-1.06%; AMT-NJ: Management Fee-.50%,
12b-1 Fees-.25%, Other Expenses-.31% and Total Operating Expenses-1.06%;
AMT-VA: Management Fee-.50%, 12b-1 Fees-.25%, Other Expenses-.34% and Total
Operating Expenses-1.09%; and AMT-FL: Management Fee-.50%, 12b-1 Fees-.25%,
Other Expenses-.34% and Total Operating Expenses-1.09%. For AMT-MA, "Other
Expenses" are based on estimated amounts for the current fiscal year. THE
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES;
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
2
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
_______________________________________________________________________________
The following tables have been audited by McGladrey & Pullen LLP, each of the
Fund's independent auditors, whose unqualified report thereon appears in each
Statement of Additional Information. This information should be read in
conjunction with the financial statements and notes thereto included in each
Fund's Statement of Additional Information.
ALLIANCE MUNICIPAL TRUST
<TABLE>
<CAPTION>
GENERAL PORTFOLIO
--------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
YEAR ENDED JUNE 30, ENDED DECEMBER 31,
-------------------------------------------------------------------------- JUNE 30, ----------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------- ------- ---------- ------- ------- ------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .028 .029 .028 .018 .020 .034 .046 .055 .030 .047 .041
Net realized and
unrealized loss
on investments -0- -0- (.003) -0- -0- -0- -0- -0- -0- -0- -0-
Net increase in net
asset value from
operations .028 .029 .025 .018 .020 .034 .046 .055 .030 .047 .041
ADD: CAPITAL CONTRIBUTIONS
Capital Contributed
by the Adviser -0- -0- .003 -0- -0- -0- -0- -0- -0- -0- -0-
LESS: DIVIDENDS
Dividends from net
investment income (.028) (.029) (.028) (.018) (.020) (.034) (.046) (.055) (.030) (.047) (.041)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (a) 2.81% 2..93% 2.83%(c) 1.81% 2.05% 3.48% 4.71% 5.65% 6.13%(b) 4.81% 4.18%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions) $980 $1,148 $1,189 $1,134 $1,016 $914 $883 $798 $695 $633 $690
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements .94% .95% .94% .92% .92% .92% .89% .83% .84%(b) .83% .80%
Expenses, before
waivers and
reimbursements .94% .95% .95% .94% .94% .95% .95% .93% .94%(b) .93% .90%
Net investment
income (d) 2.76% 2.90% 2.78% 1.80% 2.02% 3.40% 4.57% 5.50% 5.96%(b) 4.69% 4.08%
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Annualized.
(c) The capital contribution by the Adviser had no effect on total return.
(d) Net of expenses reimbursed or waived by the Adviser.
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
----------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
YEAR ENDED JUNE 30, ENDED ENDED
----------------------------------------------------------------------------- JUNE 30, DEC. 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
--------- --------- --------- --------- --------- --------- --------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .027 .028 .028 .018 .019 .034 .042 .051 .027 .041
LESS: DIVIDENDS
Dividends from net
investment income (.027) (.028) (.028) (.018) (.019) (.034) (.042) (.051) (.027) (.041)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (a) 2.77% 2.87% 2.84% 1.77% 1.94% 3.47% 4.32% 5.26% 5.61%(b) 4.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $355,461 $330,984 $177,254 $162,839 $100,529 $100,476 $71,748 $62,536 $41,910 $41,335
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements .85% .85% .85% .84% .80% .80% .80% .80% .85%(b) 1.00%
Expenses, before
waivers and
reimbursements 1.04% 1.03% 1.03% 1.08% 1.06% 1.12% 1.15% 1.18% 1.35%(b) 1.33%
Net investment
income (c) 2.73% 2.82% 2.81% 1.77% 1.91% 3.35% 4.20% 5.13% 5.45%(b) 4.03%
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(b) Annualized.
(c) Net of expenses reimbursed or waived by the Adviser.
3
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
---------------------------------------------------------------------------------------------------------
SIX JUNE 2,
MONTHS 1988(A)
YEAR ENDED JUNE 30, ENDED THROUGH
------------------------------------------------------------------------------- JUNE 30, DEC. 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
--------- --------- --------- --------- --------- --------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .027 .029 .027 .018 .020 .032 .043 .050 .029 .030
LESS: DIVIDENDS
Dividends from net
investment income (.027) (.029) (.027) (.018) (.020) (.032) (.043) (.050) (.029) (.030)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.76% 2.91% 2.78% 1.83% 2.05% 3.26% 4.43% 5.17% 6.02%(c) 5.20%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $357,148 $297,862 $236,479 $219,673 $156,200 $121,317 $111,957 $104,097 $242,124 $103,390
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements .93% .93% .93% .93% .93% .95% 1.00% .99% .92%(c) .89%(c)
Expenses, before
waivers and
reimbursements .96% .94% 1.01% 1.02% 1.02% 1.05% 1.10% 1.09% 1.02%(c) 1.10%(c)
Net investment
income (d) 2.73% 2.86% 2.75% 1.82% 2.01% 3.18% 4.32% 5.03% 5.90%(c) 5.21%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividend and distributions at net asset value during the period, and redemption
on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
<TABLE>
<CAPTION>
CONNECTICUT PORTFOLIO
-------------------------------------------------------------------------
JANUARY 5,
1990(A)
YEAR ENDED JUNE 30, THROUGH
------------------------------------------------------------- JUNE 30,
1997 1996 1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .027 .028 .028 .017 .020 .033 .045 .026
LESS: DIVIDENDS
Dividends front net
investment income (.027) (.028) (.028) (.017) (.020) (.033) (.045) (.026)
Net asset value
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.76% 2.88% 2.78% 1.71% 2.00% 3.35% 4.57% 5.53%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $102,612 $95,812 $75,991 $57,314 $56,224 $54,751 $48,482 $27,945
Ratio to net assets of:
Expenses, net of
waivers and
reimbursements .80% .80% .80% .77% .70% .58% .44% .19%(c)
Expenses, before
waivers and
reimbursements 1.10% 1.15% 1.21% 1.21% 1.16% 1.22% 1.16% 1.10%(c)
Net investment
income (d) 2.72% 2.84% 2.77% 1.69% 1.97% 3.28% 4.39% 5.39%(c)
</TABLE>
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
4
NEW JERSEY PORTFOLIO
-------------------------------------------
FEBRUARY 7,
1994 (A)
YEAR ENDED JUNE 30, THROUGH
----------------------------- JUNE 30,
1997 1996 1995 1994
------- ------- ------- ------------
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .027 .028 .029 .008
LESS: DIVIDENDS
Dividends from net
investment income (.027) (.028) (.029) (.008)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.72% 2.89% 2.93% 2.08%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000's omitted) $123,579 $98,098 $74,133 $36,909
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements .85% .82% .74% .70%(c)
Expenses, before
waivers and
reimbursements 1.12% 1.19% 1.29% 1.93%(c)
Net investment
income (d) 2.68% 2.84% 2.98% 2.07%(c)
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
VIRGINIA PORTFOLIO FLORIDA PORTFOLIO
--------------------------- --------------------
OCTOBER 25, JULY 28,
YEAR ENDED 1994(A) YEAR 1995(A)
JUNE 30, THROUGH ENDED THROUGH
----------------- JUNE 30, JUNE 30, JUNE 30,
1997 1996 1995 1997 1996
------- ------- ------- ------- ----------
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .028 .029 .023 0.30 .030
LESS: DIVIDENDS
Dividends from net
investment income (.028) (.029) (.023) (.030) (.030)
Net asset value.
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment
return based on
net asset value (b) 2.83% 2.97% 3.48%(c) 3.03% 3.32%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end
of period
(000's omitted) $78,775 $89,557 $66,921 $89,149 $91,179
Ratio to average net
assets of:
Expenses, net of
waivers and
reimbursements .80% .78% .44%(c) .65% .58%(c)
Expenses, before
waivers and
reimbursements 1.15% 1.15% 1.30%(c) 1.10% 1.24%(c)
Net investment
income (d) 2.78% 2.91% 3.48%(c) 2.97% 3.12%(c)
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
5
MASSACHUSETTS PORTFOLIO
-----------------------
APRIL 17, 1997(A)
THROUGH
JUNE 30, 1997
-----------------------
Net asset value, beginning of period $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .007
LESS: DIVIDENDS
Dividends from net investment income (.007)
Net asset value, end of period $ 1.00
TOTAL RETURNS
Total investment return based on net asset value (b)(c) 3.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $15,046
Ratio to average net assets of:
Expenses, net of waivers and reimbursements(c) .50%
Expenses, before waivers and reimbursements (c) 2.99%
Net investment income (c)(d) 3.47%
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
(d) Net of expenses reimbursed or waived by the Adviser.
From time to time each Portfolio advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. To calculate the "yield," the amount of dividends
paid on a share during a specified seven-day period is assumed to be paid each
week over a 52-week period and is shown as a percentage of the investment. To
calculate "effective yield," which will be higher than the "yield" because of
compounding, the dividends paid are assumed to be reinvested. Dividends for the
General Portfolio for the seven days ended June 30, 1997, amounted to an
annualized yield of 3.20%, equivalent to an effective yield of 3.25%. Dividends
for the New York Portfolio for the seven days ended June 30, 1997, after
expense reimbursement, amounted to an annualized yield of 3.19%, equivalent to
an effective yield of 3.24%. Absent expense reimbursement, the annualized yield
for this period would have been 3.00%, equivalent to an effective yield of
3.05%. Dividends for the California Portfolio for the seven days ended June 30,
1997, after expense reimbursement, amounted to an annualized yield of 3.08%,
equivalent to an effective yield of 3.13%. Absent expense reimbursement, the
annualized yield for this period would have been 3.05%, equivalent to an
effective yield of 3.10%. Dividends for the Connecticut Portfolio for the seven
days ended June 30, 1997, after expense reimbursement, amounted to an
annualized yield of 3.05%, equivalent to an effective yield of 3.10%. Absent
expense reimbursement, the annualized yield for this period would have been
2.75%, equivalent to an effective yield of 2.80%. Dividends for the New Jersey
Portfolio for the seven days ended June 30, 1997, amounted to an annualized
yield of 3.14%, equivalent to an effective yield of 3.19%. Absent expense
reimbursement, the annualized yield for this period would have been 2.87%,
equivalent to an effective yield of 2.92%. Dividends for the Virginia Portfolio
for the seven days ended June 30, 1997, after expense reimbursement, amounted
to an annualized yield of 3.41%, equivalent to an effective yield of 3.47%.
Absent expense reimbursement, the annualized yield for this period would have
been 3.06%, equivalent to an effective yield of 3.12%. Dividends for the
Florida Portfolio for the seven days ended June 30, 1997, after expense
reimbursement, amounted to an annualized yield of 3.41%, equivalent to an
effective yield of 3.47%. Absent expense reimbursement, the annualized yield
for this period would have been 2.96%, equivalent to an effective yield of
3.02%. Dividends for the Massachusetts Portfolio for the seven days ended June
30, 1997, after expense reimbursement, amounted to an annualized yield of
3.71%, equivalent to an effective yield of 3.78%. Absent expense reimbursement,
the annualized yield for this period would have been 1.22%, equivalent to an
effective yield of 1.29%.
6
INVESTMENT OBJECTIVES AND POLICIES
_______________________________________________________________________________
Alliance Municipal Trust (the "Fund") consists of eight distinct Portfolios,
the General, New York, California, Connecticut, New Jersey, Virginia, Florida
and Massachusetts Portfolios (each a "Portfolio"), each of which issues a
separate class of shares. The investment objectives of each Portfolio are
safety of principal, liquidity and, to the extent consistent with these
objectives, maximum current income that is exempt from income taxation to the
extent described below. As a matter of fundamental policy, each Portfolio,
except for AMT-Florida and AMT-Massachusetts, pursues its objectives by
maintaining a portfolio of high quality money market securities all of which at
the time of investment have remaining maturities of one year (397 days with
respect to AMT-New Jersey and AMT-Virginia) or less, which maturities may
extend to 397 days. AMT-Florida and AMT-Massachusetts pursue their objectives
by investing in high quality municipal securities having remaining maturities
of 397 days or less (which maturities may extend to such greater length of time
as may be permitted from time to time pursuant to Rule 2a-7 under the
Investment Company Act of 1940 (the "1940 Act"), as amended) and, except when
the Portfolio assumes a temporary defensive position, as a matter of
fundamental policy, at least 80% of the Portfolio's total assets will be
invested in municipal securities (as opposed to the taxable investments
described above). While the fundamental policies described above and the other
fundamental investment policies described below may not be changed without
shareholder approval, the Fund may, upon notice to shareholders, but without
such approval, change non-fundamental investment policies or create additional
classes of shares in order to establish portfolios which may have different
investment objectives. There can be no assurance that the Fund's objectives
will be achieved. Normally, substantially all of each Portfolio's income will
be tax exempt as described below (e.g., for 1996, 100% of the income of each
Portfolio was exempt from Federal income taxes; the Massachusetts Portfolio had
not yet been established).
The Fund will comply with Rule 2a-7 of the 1940 Act as amended from time to
time, including the diversification, quality and maturity limitations imposed
by the Rule. The average maturity of the Fund's portfolios cannot exceed 90
days. A more detailed description of Rule 2a-7 is set forth in the Fund's
Statement of Additional Information. To the extent that the Fund's limitations
are more permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.
THE GENERAL PORTFOLIO seeks maximum current income that is exempt from Federal
income taxes by investing principally in a diversified portfolio of high
quality municipal securities. Such income may be subject to state or local
income taxes.
THE NEW YORK PORTFOLIO seeks maximum current income that is exempt from
Federal, New York state and New York City personal income taxes by investing,
as a matter of fundamental policy, not less than 65% of its total assets in a
portfolio of high quality municipal securities issued by New York state or its
political subdivisions.
THE CALIFORNIA PORTFOLIO seeks maximum current income that is exempt from
Federal and California state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of California or its
political subdivisions.
THE CONNECTICUT PORTFOLIO seeks maximum current income that is exempt from
Federal and Connecticut state personal income taxes by investing, as a matter
of fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of Connecticut or its
political subdivisions.
THE NEW JERSEY PORTFOLIO seeks maximum current income that is exempt from
Federal and New Jersey state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of New Jersey or its
political subdivisions. The New Jersey Portfolio will invest not less than 80%
of its net assets in securities the interest on which is exempt from New Jersey
personal income taxes [i.e., New Jersey municipal securities and obligations of
the U.S. Government, its agencies and instrumentalities ("U.S. Government
Securities")]. In addition, during periods when Alliance Capital Management
L.P. (the "Adviser") believes that New Jersey municipal securities that meet
the New Jersey Portfolio's standards are not available, it may invest a portion
of its assets in securities whose interest payments are only federally
tax-exempt.
7
THE VIRGINIA PORTFOLIO seeks maximum current income that is exempt from Federal
and Virginia state personal income taxes by investing, as a matter of
fundamental policy, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the Commonwealth of Virginia or its
political subdivisions.
THE FLORIDA PORTFOLIO seeks maximum current income that is exempt from Federal
income tax and State of Florida intangible tax by investing not less than 65%
of its total assets in a portfolio of high-quality municipal securities issued
by Florida or its political subdivisions.
THE MASSACHUSETTS PORTFOLIO seeks maximum current income that is exempt from
Federal and Massachusetts state personal income taxes by investing at least 65%
of its total assets in high quality municipal securities issued by the
Commonwealth of Massachusetts or its political subdivisions. The Massachusetts
Portfolio may invest in restricted securities that are determined by the
Adviser to be liquid in accordance with procedures adopted by the Trustees,
including securities eligible for resale under Rule 144A under the Securities
Act of 1933 (the "Securities Act"). Restricted securities are securities
subject to contractual or legal restrictions on resale, such as those arising
from an issuer's reliance upon certain exemptions from registration under the
Securities Act.
Each Portfolio of the Fund may invest without limitation in tax-exempt
municipal securities subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt municipal
securities issued after August 7, 1986 which are "specified private activity
bonds," and the proportionate share of any exempt-interest dividends paid by a
regulated investment company which receives interest from such specified
private activity bonds, will be treated as an item of tax preference for
purposes of the AMT imposed on individuals and corporations, though for regular
Federal income tax purposes such interest will remain fully tax-exempt, and (2)
interest on all tax-exempt obligations will be included in "adjusted current
earnings" of corporations for AMT purposes. Such bonds have provided, and may
continue to provide, somewhat higher yields than other comparable municipal
securities. See below, "Daily Dividends, Other Distributions, Taxes."
There can be no assurance that the Portfolios will achieve their investment
objectives. Potential investors in the New York, California, Connecticut, New
Jersey, Virginia, Florida and Massachusetts Portfolios should consider the
greater risk of the concentration of such Portfolios versus the safety that
comes with less concentrated investments and should compare yields available on
portfolios of the relevant state's issues with those of more diversified
portfolios, including other states' issues, before making an investment
decision. The Adviser believes that by maintaining each Portfolio's investments
in liquid, short-term, high quality investments, each Portfolio is largely
insulated from the credit risks that exist on long-term municipal securities of
the relevant state. See the Statement of Additional Information for a more
detailed discussion of the financial condition of New York, California,
Connecticut, New Jersey, Virginia, Florida and Massachusetts.
MUNICIPAL SECURITIES. The municipal securities in which each Portfolio invests
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for short-term capital needs and generally have
maturities of one year or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of various
seasonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are
secured by the issuer's pledge of its faith, credit and taxing power for
payment of principal and interest, and revenue bonds, which are generally paid
from the revenues of a particular facility or a specific excise or other source.
A Portfolio may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. Such
adjustments minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Portfolio to maintain a stable net
asset value. Variable rate securities purchased may include participation
interests in industrial development bonds backed by letters of credit of
Federal Deposit Insurance Corporation member banks having total assets of more
than $1 billion. Each Portfolio will comply with Rule 2a-7 with respect to its
investments in variable rate obligations supported by letters of credit.
Each Portfolios' municipal securities at the time of purchase are rated within
the two highest quality ratings of Moody's Investors Service, Inc. (Aaa and Aa,
MIG 1
8
and MIG 2, or VMIG 1 and VMIG 2) or Standard & Poor's Corporation (AAA and AA
or SP-1 and SP-2), or judged by the Adviser to be of comparable quality.
Securities must also meet credit standards applied by the Adviser.
To further enhance the quality and liquidity of the securities in which the
Portfolios invest, such securities frequently are supported by credit and
liquidity enhancements, such as letters of credit, from third party financial
institutions. The Adviser continuously monitors the credit quality of such
third parties; however, changes in the credit quality of such a financial
institution could cause a Portfolio's investments backed by that institution to
lose value and affect a Portfolio's share price.
A Portfolio also may invest in stand-by commitments, which may involve certain
expenses and risks, but such commitments are not expected to comprise more than
5% of any Portfolio's net assets. A Portfolio may commit up to 15% of its net
assets to the purchase of when-issued securities. The Fund's custodian will
maintain, in a separate account of the respective Portfolio, liquid high-grade
debt securities having value equal to, or greater than, such when-issued
securities. The price of when-issued securities, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for such securities takes place at a later time. Normally
the settlement date occurs from within ten days to one month after the purchase
of the issue. The value of when-issued securities may fluctuate prior to their
settlement, thereby creating an unrealized gain or loss to a Portfolio.
TAXABLE INVESTMENTS. The taxable investments in which each Portfolio may invest
include obligations of the U.S. Government and its agencies, high quality
certificates of deposit and bankers' acceptances, prime commercial paper, and
repurchase agreements.
OTHER INVESTMENT POLICIES. No Portfolio of the Fund will invest more than 10%
of its net assets in illiquid securities (including illiquid restricted
securities with respect to the Massachusetts Portfolio). As to these
securities, a Portfolio is subject to a risk that should the Portfolio desire
to sell them when a ready buyer is not available at a price the Portfolio deems
representative of their value, the value of the Portfolio's net assets could be
adversely affected. Illiquid securities may include securities that are not
readily marketable and, with respect to the Massachusetts Portfolio, securities
subject to legal or contractual restrictions on resale. With respect to the
Massachusetts Portfolio, which may invest in restricted securities, restricted
securities determined by the Adviser to be liquid will not be treated as
"illiquid" for purposes of the restriction on illiquid securities.
The following investment policies are fundamental policies with respect to each
applicable Portfolio except the Massachusetts Portfolio which has adopted the
applicable restrictions as non-fundamental policies. To reduce investment risk,
the General Portfolio may not invest more than 25% of its total assets in
municipal securities whose issuers are located in the same state, and no
Portfolio may invest more than 25% of its total assets in municipal securities
the interest upon which is paid from revenues of similar-type projects; a
Portfolio may not invest more than 5% of its total assets in the securities of
any one issuer except the U.S. Government, although (i) with respect to 25% of
its total assets the General Portfolio may invest up to 10% per issuer, and
(ii) the New York, California, Connecticut, New Jersey, Virginia, Florida and
Massachusetts Portfolios may invest 50% of their respective total assets in as
few as four issuers (but no more than 25% of total assets in any one issuer);
and a Portfolio may not purchase more than 10% of any class of the voting
securities of any one issuer except those of the U.S. Government.
PURCHASE AND REDEMPTION OF SHARES
_______________________________________________________________________________
For more information on the purchase and redemption of the Fund's shares, see
the Fund's Statement of Additional Information.
The Fund offers a variety of shareholder services. For more information about
these services, please call your Introducing Financial Institution.
PURCHASE OF SHARES
BY SWEEP
Your brokerage account will be coded to sweep cash balances into shares of the
Portfolio you have selected. There is a $500 minimum initial investment for
each Portfolio. Free credit balances arising in your brokerage
9
account from check deposits, dividend payments, interest payments and other
credits will be invested in the selected Portfolio on the business day after
posting. Free credit balances arising from the sale of securities will be
invested into the selected Portfolio on the business day following settlement.
Your Introducing Financial Institution will, however, hold back and not invest
in the Portfolio sufficient monies to pay for security purchases which have not
yet settled.
REDEMPTIONS
A. BY CHECKWRITING
Available from your brokerage firm is a checkbook from which you may write
checks made payable to any payee in any amount of $100 or more. The maximum
amount that a check may be written for will depend upon a combination of your
Portfolio shares, other available cash in your brokerage account, and the
available margin loan value of securities in your brokerage account if your
brokerage account is established as a margin account. In order to establish
checkwriting you must complete a signature card which you can obtain from your
Account Executive, Registered Representative or Financial Advisor. There is no
separate charge for the checkwriting service. The checkwriting service enables
you to receive the daily dividends declared on the Portfolio shares to be
redeemed until the day that your check is presented for payment.
B. BY SWEEP
A sufficient number of shares will be redeemed automatically on settlement date
to pay for all securities transactions. A sufficient number of shares will also
be redeemed to satisfy any withdrawals or debits posted to the brokerage
account.
ADDITIONAL INFORMATION
_______________________________________________________________________________
SHARE PRICE. Shares are sold and redeemed on a continuous basis without sales
or redemption charges at their net asset value which is expected to be constant
at $1.00 per share, although this price is not guaranteed. The net asset value
of the Fund's shares is determined each business day at 12:00 Noon and 4:00
p.m. (New York time). The net asset value per share of the Fund is calculated
by taking the sum of the value of the Fund's investments (amortized cost value
is used for this purpose) and any cash or other assets, subtracting
liabilities, and dividing by the total number of shares outstanding. All
expenses, including the fees payable to the Adviser, are accrued daily.
TIMING OF INVESTMENTS AND REDEMPTIONS. The Fund has two transaction times each
business day, 12:00 Noon and 4:00 p.m. (New York time). New investments
represented by Federal funds or bank wire monies received by State Street Bank
at any time during a day prior to 4:00 p.m. are entitled to the full dividend
to be paid to shareholders for that day. Shares do not earn dividends on the
day a redemption is effected regardless of whether the redemption order is
received before or after 12:00 Noon. However, if you wish to have Federal funds
wired the same day as your telephone redemption request, make sure that your
request will be received by the Fund prior to 12:00 Noon.
During drastic economic or market developments, shareholders might have
difficulty in reaching Alliance Fund Services, Inc. by telephone in which event
the shareholder should issue written instructions to Alliance Fund Services,
Inc. at the address shown in this prospectus. The Fund reserves the right to
suspend or terminate their telephone service at any time without notice.
Neither the Fund nor the Adviser, or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests to purchase or sell
shares. The Fund will employ reasonable procedures in order to verify that
telephone requests are genuine and could be liable for losses arising from
unauthorized transactions if it failed to do so. Selected dealers or agents may
charge a commission for handling telephone requests for redemptions.
Redemption proceeds are normally wired or mailed either the same or the next
business day, but in no event later than seven days, unless redemptions have
been suspended or postponed due to the determination of an "emergency" by the
Securities and Exchange Commission or to certain other unusual conditions.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of the Fund is
determined each business day at 4:00 p.m. (New York time) and is paid
immediately thereafter pro rata to shareholders of the Fund of record
10
via automatic investment in additional full and fractional shares of the Fund
in each shareholder's account. As such additional shares are entitled to
dividends on following days, a compounding growth of income occurs.
Net income consists of all accrued interest income on Fund assets less the
Fund's expenses applicable to that dividend period. Realized gains and losses
are reflected in its net asset value and are not included in net income.
Distributions to you out of tax-exempt interest income earned by each Portfolio
of Alliance Municipal Trust are not subject to Federal income tax (other than
the AMT), but, in the case of the General Portfolio, may be subject to state or
local income taxes. Any exempt interest dividends derived from interest on
municipal securities subject to the AMT will be a specific preference item for
purposes of the Federal individual and corporate AMT. Distributions to
residents of New York out of income earned by the New York Portfolio from New
York municipal securities are exempt from New York state and New York City
personal income taxes. Distributions to residents of California out of income
earned by the California Portfolio from California municipal securities are
exempt from California personal income taxes. Distributions to individuals who
are residents of Connecticut out of income earned by the Connecticut Portfolio
from Connecticut municipal securities are exempt from Connecticut personal
income taxes. Distributions to residents of New Jersey out of income earned by
the New Jersey Portfolio from New Jersey municipal securities or U.S.
Government Securities are exempt from New Jersey state personal income taxes.
Distributions from the New Jersey Portfolio are, however, subject to the New
Jersey Corporation Business (Franchise) Tax and the New Jersey Corporation
Income Tax payable by corporate shareholders. Distributions to residents of
Virginia out of income earned by the Virginia Portfolio from Virginia municipal
securities or obligations of the United States or any authority, commission or
instrumentality of the United States are exempt from Virginia individual,
estate, trust, or corporate income tax. Dividends paid by the Florida Portfolio
to individual Florida shareholders will not be subject to Florida income tax,
which is imposed only on corporations. However, Florida currently imposes an
"intangible tax" at the rate of $2.00 per $1,000 taxable value of certain
securities, such as shares of the Portfolio, and other intangible assets owned
by Florida residents. U.S. Government securities and Florida municipal
securities are exempt from this intangible tax. It is anticipated that the
Florida Portfolio shares will qualify for exemption from the Florida intangible
tax. In order to so qualify, the Florida Portfolio must, among other things,
have its entire portfolio invested in U.S. Government securities and Florida
municipal securities on December 31 of any year. Exempt-interest dividends paid
by the Florida Portfolio to corporate shareholders will be subject to Florida
corporate income tax. Distributions to residents of Massachusetts out of
interest earned by the Massachusetts Portfolio from Massachusetts municipal
securities are exempt from Massachusetts state personal income taxes.
Distributions out of taxable interest income, other investment income, and
short-term capital gains are taxable to you as ordinary income and
distributions of long-term capital gains, if any, are taxable as long-term
capital gains irrespective of the length of time you may have held your shares.
Distributions of short and long-term capital gains, if any, are normally made
near year-end. Each year shortly after December 31, the Funds will send you tax
information stating the amount and type of all its distributions for the year
just ended.
THE ADVISER. The Fund retains Alliance Capital Management L.P., 1345 Avenue of
the Americas, New York, NY 10105 under an Advisory Agreement to provide
investment advice and, in general, to supervise its management and investment
program, subject to the general control of the Trustees of the Fund. For the
fiscal year ended June 30, 1997, the General, New York, California,
Connecticut, New Jersey, Virginia and Florida Portfolios, each paid the Adviser
an advisory fee at an annual rate of .50, .41, .50, .30, .33, .25 and .15 of
1%, respectively, of the average daily value of the respective Portfolio's net
assets. For the period ended June 30, 1997, the Adviser waived the advisory fee
for AMT-MA.
The Adviser is a leading international investment manager, supervising client
accounts with assets as of September 30, 1997 totaling more than $217 billion
(of which more than $81 billion represented the assets of investment
companies). The Adviser's clients are primarily major corporate employee
benefit plans, public employee retirement plans, insurance companies, banks,
foundations and endowment funds. The 54 registered investment companies managed
by the Adviser comprising 116 separate investment portfolios currently have
over two million shareholders. As of September 30, 1997, the Adviser was
retained as an investment manager of employee benefit fund assets for 28 of
the Fortune 100 companies.
11
Alliance Capital Management Corporation, the sole general partner of, and the
owner of a 1% general partnership interest in, the Adviser, is an indirect
wholly owned subsidiary of The Equitable Life Assurance Society of the United
States, one of the largest life insurance companies in the United States, which
is a wholly owned subsidiary of The Equitable Companies Incorporated, a holding
company controlled by AXA, a French insurance holding company. Certain
information concerning the ownership and control of Equitable by AXA is set
forth in each Fund's Statement of Additional Information under "Management of
the Fund."
Under a Distribution Services Agreement (the "Agreement"), each Portfolio pays
the Adviser at a maximum annual rate of .25 of 1% of the Fund's aggregate
average daily net assets. For the period ended June 30, 1997, the General, New
York, California, Connecticut, New Jersey, Virginia and Florida Portfolios each
paid the Adviser a distribution services fee at an annual rate of .25, .15,
.22, .15, .15, .15 and .15 of 1%, respectively, of the average daily value of
the net assets of each Portfolio. For the period ended June 30, 1997, the
distribution payment was waived for AMT-MA. Substantially all such monies
(together with significant amounts from the Adviser's own resources) are paid
by the Adviser to broker-dealers and other financial intermediaries for their
distribution assistance and to banks and other depository institutions for
administrative and accounting services provided to the Fund, with any remaining
amounts being used to partially defray other expenses incurred by the Adviser
in distributing the Fund's shares. The Fund believes that the administrative
services provided by depository institutions are permissible activities under
present banking laws and regulations and will take appropriate actions (which
should not adversely affect the Fund or its shareholders) in the future to
maintain such legal conformity should any changes in, or interpretations of,
such laws or regulations occur.
The Adviser will reimburse the Fund to the extent that aggregate operating
expenses of the Fund (including the Adviser's fee and expenses incurred under
the Agreement) exceed 1% of its average daily net assets for any fiscal year.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR. State Street Bank and Trust
Company, P.O. Box 1912, Boston, MA 02105, is the Fund's Custodian. Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, NJ 07096-1520 and Alliance Fund
Distributors, Inc., 1345 Avenue of the Americas, New York, NY 10105, are the
Fund's Transfer Agent and Distributor, respectively. The transfer agent charges
a fee for its services.
FUND ORGANIZATION. The Fund is an open-end management investment company
registered under the 1940 Act. The Fund was reorganized as a Massachusetts
business trust in April 1985, having previously been a Maryland corporation
since its formation in January 1983. The Fund's activities are supervised by
its Trustees. Normally, shares of each series are entitled to one vote per
share, and vote as a single series, on matters that affect each series in
substantially the same manner. Massachusetts law does not require annual
meetings of shareholders and it is anticipated that shareholder meetings will
be held only when required by Federal law. Shareholders have available certain
procedures for the removal of Trustees.
REPORTS. You receive semi-annual and annual reports for the Fund as well as a
monthly summary of your account.
12
