<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 2-94996
Prospectus Supplement Dated May 1, 1998 to:
THE HUDSON RIVER TRUST
PROSPECTUS DATED MAY 1, 1997
1. The date of this Prospectus is May 1, 1998. A Statement of Additional
Information relating to Class IB shares ("SAI") dated May 1, 1998 has been
filed with the Securities and Exchange Commission ("SEC"). This SAI is
incorporated by reference into this prospectus and is available at no charge by
writing the Trust at the above address. California residents may obtain the SAI
at no charge by calling 1-800-999-3527.
2. The section entitled "Financial Highlights" is replaced with the following:
FINANCIAL HIGHLIGHTS
The financial information in the table below has been audited by Price
Waterhouse LLP, the Trust's independent accountants. The December 31, 1997
audited financial statements of the Trust and the "Report of Independent
Accountants" appear in the SAI. The Trust's annual report, which contains
additional performance information, is available without charge upon request.
FINANCIAL HIGHLIGHTS
PER SHARE INCOME AND CAPITAL CHANGES
(FOR A CLASS IB SHARE OUTSTANDING THROUGHOUT THE PERIOD)(c)
<TABLE>
<CAPTION>
ALLIANCE
MONEY MARKET
-------------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ----------------
<S> <C> <C>
Net asset value, beginning of period(a) ........ $ 10.16 $ 10.16
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.52 0.11
Net realized and unrealized gain on
investments .................................. -- 0.01
-------- --------
Total from investment operations .............. 0.52 0.12
-------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... ( 0.51) ( 0.02)
Dividends in excess of net investment
income ....................................... -- ( 0.10)
Distributions from realized gains ............. ( 0.00) --
Distributions in excess of realized gains ..... -- --
-------- ---------
Total dividends and distributions ............. ( 0.51) ( 0.12)
-------- ---------
Net asset value, end of period ................. $ 10.17 $ 10.16
======== =========
Total return(d) ................................ 5.16% 1.29%
======== =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $123,675 $ 3,184
Ratio of expenses to average net assets ........ 0.63% 0.67%(b)
Ratio of net investment income to average
net assets .................................... 5.02% 4.94%(b)
Portfolio turnover rate ........................ -- --
Average commission rate paid ................... -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
GOVERNMENT ALLIANCE GROWTH AND
SECURITIES HIGH YIELD INCOME
---------------- ------------------------------- ----------------
MAY 1, 1997 OCTOBER 2, MAY 1, 1997
TO YEAR ENDED 1996 TO TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1996 1997
---------------- -------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period(a) ........ $ 9.27 $ 10.01 $ 10.25 $ 13.42
--------- ------- --------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.32 1.05 0.19 0.05
Net realized and unrealized gain on
investments .................................. 0.22 0.71 0.15 2.91
--------- ------- --------- -------
Total from investment operations .............. 0.54 1.76 0.34 2.96
--------- ------- --------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.38) (0.95) (0.03) (0.09)
Dividends in excess of net investment
income ....................................... -- -- (0.25) --
Distributions from realized gains ............. -- (0.43) (0.01) (0.93)
Distributions in excess of realized gains ..... -- -- (0.29) --
--------- ------- --------- ---------
Total dividends and distributions ............. (0.38) ( 1.38) (0.58) (1.02)
--------- ------- --------- ---------
Net asset value, end of period ................. $ 9.43 $ 10.39 $ 10.01 $ 15.36
========= ======= ========= =========
Total return(d) ................................ 5.83% 18.19% 3.32% 22.41%
========= ======= ========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $ 5,052 $66,338 $ 685 $32,697
Ratio of expenses to average net assets ........ 0.81%(b) 0.88% 0.82%(b) 0.83%(b)
Ratio of net investment income to average
net assets .................................... 5.15%(b) 9.76% 8.71%(b) 0.43%(b)
Portfolio turnover rate ........................ 285% 390% 485% 79%
Average commission rate paid ................... -- -- -- $0.0586
</TABLE>
- ----------
Footnotes appear on page 3.
- --------------------------------------------------------------------------------
HRT103 (5/98) V.10 Copyright 1998 The Hudson River Trust. All rights reserved.
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE
EQUITY ALLIANCE
INDEX COMMON STOCK
---------------- -------------------------------
MAY 1, 1997 OCTOBER 2,
TO YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1996
---------------- -------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period(a) ........ $ 16.35 $ 18.22 $ 17.90
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.14 0.10 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ................................. 3.48 5.11 1.52
------- ------- -------
Total from investment operations .............. 3.62 5.21 1.54
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.17) (0.08) (0.00)
Dividends in excess of net investment
income ....................................... -- -- (0.03)
Distributions from realized gains ............. (0.07) (1.77) (0.16)
Distributions in excess of realized gains ..... -- -- (1.03)
Tax return of capital distributions ........... -- -- --
------- ------- -------
Total dividends and distributions ............. (0.24) (1.85) (1.22)
------- ------- -------
Net asset value, end of period ................. $ 19.73 $ 21.58 $ 18.22
======= ======= =======
Total return(d) ................................ 22.28% 29.07% 8.49%
======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $ 110 $228,780 $ 1,244
Ratio of expenses to average net assets ........ 0.62%(b) 0.64% 0.63%(b)
Ratio of net investment income to average
net assets .................................... 1.10%(b) 0.46% 0.61%(b)
Portfolio turnover rate ........................ 3% 52% 55%
Average commission rate paid ................... $0.0309 $0.0579 $0.0565
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
GLOBAL INTERNATIONAL
------------------------------- ----------------
OCTOBER 2, MAY 1, 1997
YEAR ENDED 1996 TO TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997
-------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period(a) ........ $ 16.91 $ 16.57 $ 11.39
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.12 0.02 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ................................. 1.76 0.81 (0.31)
------- ------- ---------
Total from investment operations .............. 1.88 0.83 (0.29)
------- ------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.33) -- (0.28)
Dividends in excess of net investment
income ....................................... -- (0.11) --
Distributions from realized gains ............. (1.19) (0.10) (0.56)
Distributions in excess of realized gains ..... -- (0.28) --
Tax return of capital distributions ........... -- (0.00) --
--------- --------- ---------
Total dividends and distributions ............. (1.52) (0.49) (0.84)
--------- --------- ---------
Net asset value, end of period ................. $ 17.27 $ 16.91 $ 10.26
========= ========= =========
Total return(d) ................................ 11.38% 4.98% (2.54)%
========= ========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $21,520 $ 290 $ 3,286
Ratio of expenses to average net assets ........ 0.97% 0.86%(b) 1.38%(b)
Ratio of net investment income to average
net assets .................................... 0.67% 0.48%(b) 0.20%(b)
Portfolio turnover rate ........................ 57% 59% 59%
Average commission rate paid ................... $0.0412 $0.0418 $0.0294
</TABLE>
- --------------
Footnotes appear on page 3.
- -----------------------------------------------------------------------------
The Hudson River Trust 2
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE
AGGRESSIVE STOCK
---------------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ------------------
<S> <C> <C>
Net asset value, beginning of period(a) ........ $ 35.83 $ 37.28
-------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................. (0.11) (0.01)
Net realized and unrealized gain on
investments and foreign currency
transactions ................................. 3.77 0.85
-------- ---------
Total from investment operations .............. 3.66 0.84
-------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.03) --
Dividends in excess of net investment
income ....................................... -- (0.02)
Distributions from realized gains ............. (3.33) (0.23)
Distributions in excess of realized gains ..... -- (2.04)
-------- ---------
Total dividends and distributions ............. (3.36) (2.29)
-------- ---------
Net asset value, end of period ................. $ 36.13 $ 35.83
======== =========
Total return(d) ................................ 10.66% 2.32%
======== =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $ 73,486 $ 613
Ratio of expenses to average net assets ........ 0.81% 0.73%(b)
Ratio of net investment income (loss) to
average net assets ............................ (0.28)% (0.10)%(b)
Portfolio turnover rate ........................ 123% 108%
Average commission rate paid ................... $ 0.0571 $ 0.0263
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
SMALL CAP CONSERVATIVE ALLIANCE
GROWTH INVESTORS GROWTH INVESTORS
------------------ ---------------- -------------------------------
MAY 1, 1997 MAY 1, 1997 OCTOBER 2,
TO TO YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1997 1996
------------------ ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period(a) ........ $ 10.00 $ 11.29 $ 17.19 $ 16.78
-------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................. (0.01) 0.31 0.36 0.07
Net realized and unrealized gain on
investments and foreign currency
transactions ................................. 2.65 1.01 2.43 0.71
-------- ------- ------- -------
Total from investment operations .............. 2.64 1.32 2.79 0.78
-------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......... (0.00) (0.36) (0.43) (0.02)
Dividends in excess of net investment
income ....................................... -- -- -- (0.09)
Distributions from realized gains ............. (0.30) (0.37) (1.03) (0.02)
Distributions in excess of realized gains ..... -- -- -- (0.24)
-------- ------- ------- -------
Total dividends and distributions ............. (0.30) (0.73) (1.46) (0.37)
-------- ------- ------- -------
Net asset value, end of period ................. $ 12.34 $ 11.88 $ 18.52 $ 17.19
======== ======= ======= =======
Total return(d) ................................ 26.57% 11.84% 16.58% 4.64%
======== ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .............. $ 46,324 $ 5,694 $35,730 $ 472
Ratio of expenses to average net assets ........ 1.15%(b) 0.80%(b) 0.82% 0.84%(b)
Ratio of net investment income (loss) to
average net assets ............................ (0.12)%(b) 3.82%(b) 1.88% 1.69%(b)
Portfolio turnover rate ........................ 96% 206% 121% 190%
Average commission rate paid ................... $ 0.0488 $0.0413 $0.0460 $0.0495
</TABLE>
- ----------
(a) Date as of which funds were first allocated to the Portfolios are as
follows:
Alliance Money Market, Alliance High Yield, Alliance Common Stock,
Alliance Global, Alliance Aggressive Stock and Alliance Growth Investors
Portfolios--October 2, 1996.
Alliance Intermediate Government Securities, Alliance Growth and Income,
Alliance Equity Index, Alliance International, Alliance Small Cap Growth
and Alliance Conservative Investors Portfolios--May 1, 1997.
(b) Annualized.
(c) Net investment income and capital changes per share are based upon
monthly average shares outstanding.
(d) Total 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. Total return calculated for a period of less
than one year is not annualized.
- --------------------------------------------------------------------------------
3 The Hudson River Trust
<PAGE>
3. The section entitled "The Trust" is revised by replacing the fourth
paragraph thereof with the following:
The Trust's shares are sold only to separate accounts of insurance companies in
connection with variable life insurance contracts and variable annuity
certificates and contracts (collectively, the "Contracts") issued by The
Equitable Life Assurance Society of the United States ("Equitable") and certain
insurance companies unaffiliated with Equitable. Equitable was the record owner
of approximately 99.7% and 100% of the Trust's Class IA and Class IB shares,
respectively, as of March 31, 1998, and consequently may be deemed to control
the Trust.
4. The section entitled "Investment Objectives and Policies--Alliance
Conservative Investors Portfolio--Investment Policies" is revised by
replacing the second paragraph thereof with the following:
The Portfolio will at all times hold at least 40% of its assets in investment
grade fixed income securities, each having a duration, as determined by
Alliance, that is less than that of a 10-year Treasury bond (the "Fixed Income
Core"). Duration is a measure that relates the price volatility of a bond to
changes in interest rates. The duration of a bond is the weighted average term
to maturity, expressed in years, of the present value of all future cash flows,
including coupon payments and principal repayments. Thus, by definition,
duration is always less than or equal to full maturity. In some cases,
Alliance's calculation of duration will be based on certain assumptions
(including assumptions regarding prepayment rates, in the case of
mortgage-backed or asset-backed securities, and foreign and domestic interest
rates). As of December 31, 1997, the duration of a 10-year Treasury bond was
considered by Alliance to be 7.3 years.
5. The section entitled "Investment Objectives and Policies--Alliance Growth
Investors Portfolio--Investment Policies" is revised by replacing the first
paragraph thereof with the following:
The Alliance Growth Investors Portfolio attempts to achieve its investment
objective by allocating varying portions of its assets to a number of asset
classes. Equity investments will include both exchange-traded and
over-the-counter common stocks and equity-type securities, which may include
preferred stock and convertible securities, and may include securities issued
by intermediate- and small-sized companies that, in the opinion of Alliance,
have favorable growth prospects. More risk is associated with investment in
intermediate and small-sized companies because they are often dependent on
limited product lines, financial resources or management groups. They may be
more vulnerable to competition from larger companies with greater resources and
to economic conditions affecting their market sector. Intermediate- and
small-sized companies may be new, without long business or management
histories, and perceived by the market as unproven. Their securities may be
held primarily by insiders or institutional investors, and may trade
infrequently or in limited volume. The prices of these stocks often fluctuate
more than those of larger, more established companies. Fixed income investments
will include investment grade fixed income securities (including cash and money
market instruments) as well as securities that have a high current yield and
that are either rated in the lower categories by nationally recognized
statistical rating organizations ("NRSROs") (i.e., Baa or lower by Moody's
Investors Service, Inc. ("Moody's") or BBB or lower by Standard & Poor's
("S&P")) or are unrated. For a discussion of the risks associated with
investment in these higher yielding securities, see "Investment
Techniques--Fixed Income Securities"; and "Investment Techniques--Risk Factors
of Lower Rated Fixed Income Securities," below. For the fiscal year ended
December 31, 1997, approximately 19% of the Portfolio was invested in fixed
income securities. No more than 30% of the Portfolio's assets will be invested
in securities of non-U.S. issuers. See "Investment Techniques--Foreign
Securities and Currencies," below.
6. The section entitled "Investment Objectives and Policies--Alliance Common
Stock Portfolio--Investment Policies" is revised by replacing the third
paragraph thereof with the following:
If, in light of economic conditions and the general level of common stock
prices, it appears that the Portfolio's investment objective will not be met by
using all its assets to buy equities, the Alliance Common Stock Portfolio may
also use part of its assets to make nonequity investments. These could include
buying securities such as nonparticipating and nonconvertible preferred stocks
and certain fixed income securities. Fixed income securities will include
investment grade bonds and debentures and money market instruments, as well as
securities that have a high current yield because they are either rated in the
lower categories by NRSROs (i.e., Baa or lower by Moody's or BBB or lower by
S&P) or are unrated. For a discussion of the risks associated with investment
in these higher yielding securities, see "Investment
- --------------------------------------------------------------------------------
The Hudson River Trust 4
<PAGE>
Techniques--Fixed Income Securities" and "Investment Techniques--Risk Factors
of Lower Rated Fixed Income Securities," below. For the fiscal year ended
December 31, 1997, less than 1% of the average assets of the Portfolio were
invested in higher yielding securities.
7. The section entitled "Investment Objectives and Policies--Alliance Small Cap
Growth Portfolio--Investment Policies" is revised by replacing the first
paragraph thereof with the following:
The Alliance Small Cap Growth Portfolio pursues its objective by investing
primarily in U.S. common stocks and other equity-type securities issued by
smaller companies with favorable growth prospects. The Alliance Small Cap
Growth Portfolio may also invest a portion of its assets in securities of
companies in cyclical industries, companies whose securities are temporarily
undervalued, companies in special situations and less widely known companies.
8. The section entitled "Investment Objectives and Policies--Alliance
Intermediate Government Securities Portfolio--Investment Policies" is
revised by replacing the fifth paragraph thereof with the following:
The Portfolio buys and sells securities with a view to maximizing current
return without, in the view of Alliance, undue risk to principal. Potential
capital gains resulting from possible changes in interest rates will not be a
major consideration. The Portfolio may take full advantage of a wide range of
maturities of U.S. Government Securities and may adjust the dollar-weighted
average maturity of its portfolio from time to time, depending on Alliance's
assessment of relative yields on securities of different maturities and the
expected effect of future changes in interest rates on the market value of the
securities held by the Portfolio. However, at all times, each instrument held
by the Portfolio will have either a final maturity of not more than ten years
or a duration, as determined by Alliance, not exceeding that of a 10-year
Treasury note. Duration is a measure that relates the price volatility of a
security to changes in interest rates. The duration of a security is the
weighted average term to maturity, expressed in years, of the present value of
all future cash flows, including coupon payments and principal repayments.
Thus, by definition, duration is always less than or equal to full maturity. In
some cases, Alliance's calculation of duration will be based on certain
assumptions (including assumptions regarding prepayment rates, in the mortgage-
backed or asset-backed securities, and foreign and domestic interest rates). As
of December 31, 1997, the duration of a 10-year Treasury bond was considered by
Alliance to be 7.3 years. The Portfolio may also invest a substantial portion
of its assets in money market instruments. See "Investment Techniques--Certain
Money Market Instruments," below.
9. The section entitled "Investment Objectives and Policies--Alliance High
Yield Portfolio--Investment Policies" is revised by replacing the third
paragraph thereof with the following:
For the fiscal year ended December 31, 1997, the approximate percentages of the
Portfolio's average assets invested in securities of each rating category,
determined on a dollar weighted basis, were as follows: 10% in securities rated
AAA or its equivalent, 6.8% in securities rated BB or its equivalent, 69.2% in
securities rated B or its equivalent and 4% in securities rated CCC or its
equivalent. Of these securities, 90% were rated by an NRSRO and 10% were
unrated. All of the unrated securities were considered by the investment
adviser to be of comparable quality to the Portfolio's investments rated by an
NRSRO.
10. The section entitled "Investment Techniques--Options" is revised by
replacing the third paragraph thereof with the following:
Options purchased or written by the Portfolios may be traded on the national
securities exchanges or negotiated with a dealer. Options traded in the
over-the-counter market may not be as actively traded as those on an exchange,
so it may be more difficult to value such options. In addition, such options
are subject to the risk that the counterparty may fail to meet its obligations
to the Fund, and it may be difficult to enter into closing transactions with
respect to such options. Such options, and the securities used as "cover" for
such options, may be considered illiquid securities.
11. The section entitled "Investment Techniques--Options" is revised by
replacing the fifth paragraph thereof with the following:
The Portfolios, except the Alliance Money Market, Alliance Intermediate
Government Securities and Alliance Equity Index Portfolios, may purchase put
and call options and write covered put and call
- --------------------------------------------------------------------------------
5 The Hudson River Trust
<PAGE>
options on foreign currencies for the purpose of protecting against declines in
the dollar value of portfolio securities and against increases in the dollar
cost of securities to be acquired. Such investment strategies will be used as a
hedge and not for speculation. As in the case of other types of options,
however, the writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received, and the Portfolio
could be required to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on foreign
currency may constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the Portfolio's
position, it may forfeit the entire amount of the premium plus related
transaction costs. Options on foreign currencies may be traded on the national
securities exchanges or in the over-the-counter market. As described above,
options traded in the over-the-counter market may not be as actively traded as
those on an exchange, so it may be more difficult to value such options. In
addition, such options are subject to the risk that the counterparty may fail
to meet its obligations to the Fund, and it may be difficult to enter into
closing transactions with respect to options traded over-the-counter.
12. The section entitled "Investment Techniques--Foreign Securities and
Currencies" is revised by replacing the first paragraph thereof with the
following:
All of the Portfolios, except the Alliance Intermediate Government Securities
and Alliance Equity Index Portfolios, may invest in foreign securities. For
these purposes, "foreign securities" are securities of foreign issuers that are
not traded in U.S. markets. Each of the Portfolios, except the Alliance
Intermediate Government Securities Portfolio, may invest in American depositary
receipts and securities of foreign issuers that are traded in U.S. markets.
These securities may involve certain of the risks described below for foreign
securities.
13. The section entitled "Management of the Trust--The Portfolio Managers" is
replaced with the following:
THE PORTFOLIO MANAGERS
THE ASSET ALLOCATION SERIES
- ---------------------------
ALLIANCE CONSERVATIVE INVESTORS AND ALLIANCE GROWTH INVESTORS PORTFOLIOS
Robert G. Heisterberg has been the person principally responsible for the
Alliance Conservative Investors and Alliance Growth Investors Portfolios'
investment programs since February 12, 1996. Mr. Heisterberg, a Senior Vice
President of Alliance and Global Economic Policy Analysis, has been associated
with Alliance since 1977.
THE EQUITY SERIES
- -----------------
ALLIANCE GROWTH AND INCOME PORTFOLIO
Paul Rissman and W. Theodore Kuck have been the persons principally responsible
for the Alliance Growth and Income Portfolio's investment program, Mr. Rissman
since 1996 and Mr. Kuck since the Portfolio's inception. Mr. Rissman, a Senior
Vice President of Alliance, has been associated with Alliance since 1989. Mr.
Kuck, a Vice President of Alliance, has been associated with Alliance since
1971.*
ALLIANCE EQUITY INDEX PORTFOLIO
Judith A. DeVivo has been the person principally responsible for the Alliance
Equity Index Portfolio's investment program since its inception. Ms. DeVivo, a
Vice President of Alliance, has been associated with Alliance since 1970.
ALLIANCE COMMON STOCK PORTFOLIO
Tyler J. Smith has been the person principally responsible for the Alliance
Common Stock Portfolio's investment program since 1977. Mr. Smith, a Senior
Vice President of Alliance, has been associated with Alliance since 1970.*
- --------------------------------------------------------------------------------
The Hudson River Trust 6
<PAGE>
ALLIANCE GLOBAL AND ALLIANCE INTERNATIONAL PORTFOLIOS
Bruce Calvert and Ronald L. Simcoe have been the persons principally
responsible for the Alliance Global Portfolio's investment program, Mr. Calvert
since 1998 and Mr. Simcoe since 1988; and the Alliance International
Portfolio's investment program, Mr. Calvert since 1998 and Mr. Simcoe since its
inception. Mr. Calvert, the Vice Chairman and Chief Investment Officer of
Alliance, has been associated with Alliance since 1973. Mr. Simcoe, a Vice
President of Alliance, has been associated with Alliance since 1978.*
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
Alden M. Stewart and Randall E. Haase have been the persons principally
responsible for the Alliance Aggressive Stock Portfolio's investment program
since 1993. Mr. Stewart, an Executive Vice President of Alliance, has been
associated with Alliance since 1970.* Mr. Haase, a Senior Vice President of
Alliance, has been associated with Alliance since 1988.*
ALLIANCE SMALL CAP GROWTH PORTFOLIO
Michael F. Gaffney has been the person principally responsible for the Alliance
Small Cap Growth Portfolio's investment program since its inception. Mr.
Gaffney, a Senior Vice President of Alliance, has been associated with Alliance
since 1987.*
THE FIXED INCOME SERIES
- -----------------------
ALLIANCE MONEY MARKET PORTFOLIO
Raymond J. Papera has been the person principally responsible for the Alliance
Money Market Portfolio's investment program since 1990. Mr. Papera, a Senior
Vice President of Alliance, has been associated with Alliance since 1990.*
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
Patricia J. Young and Jeffrey S. Phlegar have been the persons principally
responsible for the Alliance Intermediate Government Securities Portfolio's
investment program, Ms. Young since 1995 and Mr. Phlegar since 1997. Ms. Young,
a Senior Vice President of Alliance, has been associated with Alliance since
1992. Mr. Phlegar, a Senior Vice President of Alliance, has been associated
with Alliance since 1988.
ALLIANCE HIGH YIELD PORTFOLIO
Wayne C. Tappe has been the person principally responsible for the Alliance
High Yield Portfolio's investment program since 1995. Mr. Tappe, a Senior Vice
President of Alliance, has been associated with Alliance since 1987.*
- ----------------
* Prior to July 22, 1993, with Equitable Capital Management Corporation
("Equitable Capital"). On that date Alliance acquired the business and
substantially all of the assets of Equitable Capital and became the
investment adviser to the Trust.
14. The section entitled "Management of the Trust--The Trust's Expenses" is
replaced with the following:
THE TRUST'S EXPENSES
The Trust pays all of its operating expenses not specifically assumed by
Alliance. The expenses borne by the Trust include or could include taxes;
brokerage commissions; interest charges; securities lending fees; fees and
expenses of the registration or qualification of a Portfolio's securities under
federal or state securities laws; fees of the Portfolio's custodian, transfer
agent, independent accountants and legal counsel; all expenses of shareholders'
and trustees' meetings; all expenses of the preparation, typesetting, printing
and mailing to existing shareholders of prospectuses, prospectus supplements,
statements of
- --------------------------------------------------------------------------------
7 The Hudson River Trust
<PAGE>
additional information, proxy statements, and annual and semi-annual reports;
any proxy solicitor's fees and expenses; costs of fidelity bonds and Trustees'
liability insurance premiums as well as extraordinary expenses such as
indemnification payments or damages awarded in litigation or settlements made;
any membership fees of the Investment Company Institute and similar
organizations; costs of maintaining the Trust's corporate existence and the
compensation of Trustees who are not directors, officers, or employees of
Alliance or its affiliates. The following table, reflecting the Trust's
estimated expenses, is based on information for Class IB shares for the year
ended December 31, 1997 and has been restated to reflect (i) the fees that
would have been paid to Alliance if the present advisory agreement had been in
effect as of January 1, 1997 and (ii) estimated accounting expenses for the
year ended December 31, 1997.
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE GROWTH ALLIANCE ALLIANCE ALLIANCE
CONSERVATIVE GROWTH AND EQUITY COMMON SMALL CAP
INVESTORS INVESTORS INCOME INDEX STOCK GROWTH
TYPE OF EXPENSE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fees ......... 0.48% 0.52% 0.55% 0.32% 0.37% 0.90%
12b-1 Fees ....................... 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses ................... 0.07% 0.05% 0.04% 0.04% 0.03% 0.05%
---- ---- ---- ---- ---- ----
Total Expenses ................... 0.80% 0.82% 0.84% 0.61% 0.65% 1.20%
==== ==== ==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE INTERMEDIATE ALLIANCE
ALLIANCE AGGRESSIVE MONEY GOVERNMENT HIGH ALLIANCE
GLOBAL STOCK MARKET SECURITIES YIELD INTERNATIONAL
TYPE OF EXPENSE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees .................. 0.65% 0.54% 0.35% 0.50% 0.60% 0.90%
12b-1 Fees ............. 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses ......... 0.08% 0.03% 0.04% 0.06% 0.04% 0.18%
---- ---- ---- ---- ---- ----
Total Expenses ......... 0.98% 0.82% 0.64% 0.81% 0.89% 1.33%
==== ==== ==== ==== ==== ====
</TABLE>
Actual investment advisory fees, other expenses and total expenses for the
period ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE GROWTH ALLIANCE ALLIANCE ALLIANCE
CONSERVATIVE GROWTH AND EQUITY COMMON SMALL CAP
INVESTORS INVESTORS INCOME INDEX STOCK GROWTH
TYPE OF EXPENSE PORTFOLIO* PORTFOLIO PORTFOLIO* PORTFOLIO* PORTFOLIO PORTFOLIO*
- --------------- ---------- --------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees .................. 0.48% 0.52% 0.55% 0.33% 0.36% 0.90%
12b-1 Fees ............. 0.25% 0.25% 0.25% 0.25% 0.25% 0.20%
Other Expenses ......... 0.07% 0.05% 0.03% 0.04% 0.03% 0.05%
---- ---- ---- ---- ---- ----
Total Expenses ......... 0.80% 0.82% 0.83% 0.62% 0.64% 1.15%
==== ==== ==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE INTERMEDIATE ALLIANCE
ALLIANCE AGGRESSIVE MONEY GOVERNMENT HIGH ALLIANCE
GLOBAL STOCK MARKET SECURITIES YIELD INTERNATIONAL
TYPE OF EXPENSE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO* PORTFOLIO PORTFOLIO*
- --------------- --------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory
Fees .................. 0.63% 0.53% 0.35% 0.50% 0.60% 0.90%
12b-1 Fees ............. 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses ......... 0.09% 0.03% 0.03% 0.06% 0.03% 0.23%
---- ---- ---- ---- ---- ----
Total Expenses ......... 0.97% 0.81% 0.63% 0.81% 0.88% 1.38%
==== ==== ==== ==== ==== ====
</TABLE>
* Annualized expenses for the period May 1, 1997 to December 31, 1997.
- --------------------------------------------------------------------------------
The Hudson River Trust 8
<PAGE>
15. The following section is added after the section entitled "Management of
the Trust--Transactions with Affiliates":
YEAR 2000
Many computer software systems in use today cannot properly process
date-related information relating to periods from and after January 1, 2000.
Should any of the computer systems employed by the Trust's major service
providers fail to process this type of information properly, that could have a
negative impact on the Trust's operations and services that are provided to the
Trust's shareholders. Alliance has advised the Trust that it is reviewing all
of its computer systems with the goal of modifying or replacing such systems
prior to January 1, 2000, to the extent necessary to foreclose any such
negative impact. In addition, Alliance has been advised by the Trust's
custodian that it is also in the process of reviewing its systems with the same
goal. As of the date of this prospectus, the Trust and Alliance have no reason
to believe that these goals will not be achieved. Similarly, the values of
certain of the portfolio securities held by the Trust may be adversely affected
by the inability of the securities' issuers or of third parties to process this
type of information properly.
16. The section entitled "Description of Trust's Shares--Purchase and
Redemption" is revised by replacing the fourth paragraph thereof with the
following:
The Distribution Plan provides that the Trust, on behalf of each Portfolio, may
pay annually up to 0.50% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily intended
to result in the sale of Class IB shares. However, under the distribution
agreement payments to the Distributor for activities pursuant to the
Distribution Plan are limited to payments at an annual rate equal to 0.25% of
average daily net assets of a Portfolio, other than the Alliance Small Cap
Growth Portfolio, attributable to its Class IB shares. With respect to the
Alliance Small Cap Growth Portfolio, the Distributor will receive an annual fee
not to exceed the lesser of (a) 0.25% of the average daily net assets of the
Portfolio attributable to Class IB shares and (b) an amount that, when added to
certain other expenses of the Class IB shares, would result in the ratio of
expenses to average daily net assets attributable to Class IB shares equalling
1.20%. Under the terms of the Distribution Plan and the distribution agreement,
each Portfolio is authorized to make payments monthly to the Distributor which
may be used to pay or reimburse entities providing distribution and shareholder
servicing with respect to the Class IB shares for such entities' fees or
expenses incurred or paid in that regard.
17. The section entitled "Appendix B--Performance Information" is revised by
replacing the third paragraph thereof with the following:
The performance results presented below are based on Portfolio percent changes
in net asset values with dividends and capital gains reinvested. Similarly, the
market indexes have been adjusted, where necessary, to reflect the benefit of
reinvestment of income, dividends and capital gains. Cumulative rates of return
reflect performance over a stated period of time. Annualized rates of return
represent the rate of growth that would have produced the corresponding
cumulative return had performance been constant over the entire period.
Performance results shown for periods prior to the commencement of operations
with respect to Class IB shares represent the performance of Class IA shares,
restated to reflect the distribution fees payable by Class IB shares.
- --------------------------------------------------------------------------------
9 The Hudson River Trust
<PAGE>
18. The section entitled "Appendix B--Performance Information" is revised by
replacing the fifth paragraph thereof with the following:
Each Portfolio's performance may also be compared to the performance of other
mutual funds by Morningstar, Inc. which ranks mutual funds on the basis of
historical risk and total return. Morningstar rankings are calculated using the
mutual fund's average annual return for certain periods and a risk factor that
reflects the mutual fund's performance relative to three-month Treasury bill
monthly returns. Morningstar's rankings range from five stars (highest) to one
star (lowest) and represent Morningstar's assessment of the historical risk
level and total return of a mutual fund as a weighted average for 3-, 5- and
10-year periods. If the fund scores in the top 10% of its class it receives 5
stars; if it falls in the next 22.5% it receives 4 stars; a place in the middle
35% earns it 3 stars; those in the next 22.5% receive 2 stars; and the bottom
10% get 1 star.
19. The section entitled "Appendix B--Performance Information" is revised by
replacing the thirteenth paragraph thereof with the following:
The Russell 2000 Index consists of the smallest 2,000 securities in the Russell
3000 Index. (The Russell 3000 Index represents approximately 98% of the
investable U.S. equity market.) The Russell 2000 Index, widely regarded in the
industry as the premier measure of small capitalization stocks, represents
approximately 11% of the Russell 3000 Index total market capitalization. The
Russell 2000 Growth Index ("Russell 2000 Growth") consists of that half of the
2,000 smallest of the 3,000 largest capitalization U.S. companies that has
higher price-to-book ratios and higher forecasted growth.
20. The section entitled "Appendix B--Performance Information" is revised by
replacing the eighteenth paragraph thereof with the following:
The dates as of which funds were first allocated to the Portfolios are as
follows: the Alliance Common Stock Portfolio on June 16, 1975; the Alliance
Money Market Portfolio on July 13, 1981; the Alliance Aggressive Stock
Portfolio on January 27, 1986; the Alliance High Yield Portfolio on January 2,
1987; the Alliance Global Portfolio on August 27, 1987; the Alliance
Conservative Investors and Alliance Growth Investors Portfolios on October 2,
1989; the Alliance Intermediate Government Securities Portfolio on April 1,
1991; the Alliance Growth and Income Portfolio on October 1, 1993; the Alliance
Equity Index Portfolio on March 1, 1994; the Alliance International Portfolio
on April 3, 1995; and the Alliance Small Cap Growth Portfolio on May 1, 1997.
In the "Since Inception" columns of Table I and Table II below, the performance
of each Portfolio and its comparative indices is measured from the date funds
were first allocated to the Portfolios, except as follows: for the Alliance
Common Stock Portfolio and its comparative indices, from January 13, 1976, the
date on which the unit value was established and Contract owner contributions
were first accepted by the Alliance Common Stock Portfolio's separate account
predecessor; for the Lipper Money Market Funds Average, from June 1, 1981; for
the Lipper Small Company Growth Funds Average, from January 1, 1986; and for
the Lipper Global Funds Average, from August 28, 1987.
- --------------------------------------------------------------------------------
The Hudson River Trust 10
<PAGE>
21. The section entitled "Appendix B--Performance Information" is revised by
replacing Tables I, II and III thereunder with the following:
TABLE I
ANNUALIZED RATES OF RETURN
PERIODS ENDING DECEMBER 31, 1997
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
PORTFOLIO/Benchmarks ------ ------- ------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
THE ASSET ALLOCATION SERIES
ALLIANCE CONSERVATIVE INVESTORS ................ 12.97% 12.52% 8.53% -- -- -- 9.25%
Lipper Flexible Portfolio Average .............. 18.69 19.44 13.14 -- -- -- 12.15
70% Lehman Treasury/30% S&P 500 ................ 16.71 17.18 11.87 -- -- -- 11.39
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS ...................... 16.58 18.22 12.92 -- -- -- 15.45
Lipper Flexible Portfolio Average .............. 18.69 19.44 13.14 -- -- -- 12.15
70% S&P 500/30% Lehman Gov't Corp. ............. 26.28 25.64 17.02 -- -- -- 14.48
- -----------------------------------------------------------------------------------------------------------------------------
THE EQUITY SERIES
ALLIANCE GROWTH AND INCOME ..................... 26.61 23.40 -- -- -- -- 15.64
Lipper Growth & Income Funds Average ........... 27.14 26.49 -- -- -- -- 18.48
75% S&P 500/25% Value Line Convertible ......... 29.54 28.62 -- -- -- -- 20.14
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX .......................... 32.26 30.07 -- -- -- -- 23.13
Lipper S&P 500 Index Funds Average ............. 32.60 30.49 -- -- -- -- 23.31
S&P 500 ........................................ 33.36 31.15 -- -- -- -- 23.84
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK .......................... 29.07 28.39 20.81 17.74% 17.00% 17.30% 15.58
Lipper Growth Equity Mutual Funds
Average ....................................... 25.30 25.11 16.47 15.93 14.37 15.73 15.50
S&P 500 ........................................ 33.36 31.15 20.27 18.05 17.52 16.66 15.44
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL ................................ 11.38 14.74 15.89 13.49 -- -- 11.49
Lipper Global Mutual Funds Average ............. 13.04 15.20 13.76 11.50 -- -- 9.10
MSCI World ..................................... 15.76 16.62 15.34 10.57 -- -- 8.22
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL ......................... (3.23) -- -- -- -- -- 6.12
Lipper International Mutual Funds Average ...... 5.44 -- -- -- -- -- 9.87
MSCI EAFE ...................................... 1.78 -- -- -- -- -- 6.15
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK ...................... 10.66 21.04 14.66 18.74 -- -- 19.17
Lipper Small Company Growth Funds
Average ....................................... 19.63 22.51 15.24 16.50 -- -- 14.06
50% S&P 400/50% Russell 2000 ................... 27.31 24.88 17.11 17.74 -- -- 15.12
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH ...................... -- -- -- -- -- -- 26.57*
Lipper Small Company Growth Funds
Average ....................................... -- -- -- -- -- -- 29.36
Russell 2000 ................................... -- -- -- -- -- -- 27.66
- -----------------------------------------------------------------------------------------------------------------------------
THE FIXED INCOME SERIES
ALLIANCE MONEY MARKET .......................... 5.16 5.24 4.44 5.52 6.34 -- 6.92
Lipper Money Market Mutual Funds
Average ....................................... 4.90 5.05 4.31 5.40 6.18 -- 6.89
3 Month T-Bill ................................. 5.23 5.41 4.71 5.61 6.33 -- 6.87
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES 7.01 7.80 5.68 -- -- -- 6.74
Lipper Intermediate Government Funds
Average ....................................... 8.08 8.68 6.00 -- -- -- 7.19
Lehman Intermediate Government Bond ............ 7.72 8.65 6.39 -- -- -- 7.47
- -----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD ............................ 18.19 20.15 15.63 12.54 -- -- 11.78
Lipper High Current Yield Mutual
Funds Average ................................. 12.96 14.17 11.36 10.66 -- -- 9.78
ML Master ...................................... 12.83 14.54 11.72 12.09 -- -- 11.39
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Unannualized
- --------------------------------------------------------------------------------
11 The Hudson River Trust
<PAGE>
TABLE II
CUMULATIVE RATES OF RETURN
PERIODS ENDING DECEMBER 31, 1997
<TABLE>
<CAPTION>
SINCE
PORTFOLIO/Benchmarks 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
- -------------------- ------ ------- ------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
THE ASSET ALLOCATION SERIES
ALLIANCE CONSERVATIVE INVESTORS ........ 12.97% 42.47% 50.60% -- -- -- 107.51%
Lipper Flexible Portfolio Average ...... 18.69 71.00 86.52 -- -- -- 160.04
70% Lehman Treasury/30% S&P 500 ........ 16.71 60.91 75.18 -- -- -- 143.55
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS .............. 16.58 65.20 83.56 -- -- -- 227.07
Lipper Flexible Portfolio Average. ..... 18.69 71.00 86.52 -- -- -- 160.04
70% S&P 500/30% Lehman Gov't Corp. ..... 26.28 98.32 119.42 -- -- -- 205.24
- ----------------------------------------------------------------------------------------------------------------------------------
THE EQUITY SERIES
ALLIANCE GROWTH AND INCOME ............. 26.61 87.89 -- -- -- -- 85.41
Lipper Growth & Income Funds
Average ............................... 27.14 102.81 -- -- -- -- 106.17
75% S&P 500/25% Value Line
Convertible ........................... 29.54 112.80 -- -- -- -- 118.17
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX .................. 32.26 120.07 -- -- -- -- 121.90
Lipper S&P 500 Index Funds Average ..... 32.60 122.21 -- -- -- -- 123.31
S&P 500 ................................ 33.36 125.60 -- -- -- -- 127.24
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK .................. 29.07 111.63 157.35 411.86% 953.20% 2331.80% 2302.90
Lipper Growth Equity Mutual Funds
Average ............................... 25.30 97.08 117.56 356.18 710.84 2037.84 2757.78
S&P 500 ................................ 33.36 125.60 151.62 425.67 1026.40 2080.13 2248.74
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL ........................ 11.38 51.04 109.06 254.37 -- -- 206.46
Lipper Global Mutual Funds Average ..... 13.04 53.69 92.92 205.52 -- -- 151.76
MSCI World ............................. 15.76 58.59 104.13 173.01 -- -- 126.45
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL ................. (3.23) -- -- -- -- -- 17.74
Lipper International Mutual Funds
Average ............................... 5.44 -- -- -- -- -- 30.12
MSCI EAFE .............................. 1.78 -- -- -- -- -- 17.83
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK .............. 10.66 77.31 98.19 457.07 -- -- 630.91
Lipper Small Company Growth
Funds Average ......................... 19.63 84.83 105.11 371.28 -- -- 398.38
50% S&P 400/50% Russell 2000 ........... 27.31 94.76 120.25 412.08 -- -- 436.52
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH FUND ......... -- -- -- -- -- -- 26.57
Lipper Small Company Growth
Funds Average ......................... -- -- -- -- -- -- 29.36
Russell 2000 ........................... -- -- -- -- -- -- 27.66
- ----------------------------------------------------------------------------------------------------------------------------------
THE FIXED INCOME SERIES
ALLIANCE MONEY MARKET .................. 5.16 16.57 24.25 71.18 151.32 -- 201.04
Lipper Money Market Mutual
Funds Average ......................... 4.90 15.94 23.52 69.20 146.11 -- 200.21
3 Month T-Bill ......................... 5.23 17.13 25.87 72.64 150.97 -- 199.34
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES ............................ 7.01 25.28 31.83 -- -- -- 55.30
Lipper Intermediate Government Funds
Average ............................... 8.08 28.40 33.93 -- -- -- 59.98
Lehman Intermediate Government Bond 7.72 28.25 36.31 -- -- -- 62.74
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD .................... 18.19 73.46 106.72 225.98 -- -- 240.42
Lipper High Current Yield Bond
Funds Average ......................... 12.96 48.92 71.52 177.35 -- -- 181.23
ML Master .............................. 12.83 50.26 74.04 213.08 -- -- 227.68
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
The Hudson River Trust 12
<PAGE>
TABLE III
ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
YEAR ENDING COMMON MONEY AGGRESSIVE HIGH ALLIANCE CONSERV.
DECEMBER 31 STOCK MARKET STOCK YIELD GLOBAL INVESTORS
- ----------- ----- ------ ----- ----- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1976 ......... 9.16%*
1977 ......... -9.48
1978 ......... 7.98
1979 ......... 29.57
1980 ......... 49.82
1981 ......... -6.10 6.23%*
1982 ......... 17.31 12.76
1983 ......... 25.84 8.69
1984 ......... -2.20 10.61
1985 ......... 33.17 7.93
1986 ......... 17.09 6.36 35.63%*
1987 ......... 7.22 6.38 7.05 4.43%* -13.52%*
1988 ......... 22.19 7.07 .89 9.50 10.64
1989 ......... 25.34 8.93 43.24 4.88 26.49 2.84%*
1990 ......... -8.36 7.97 7.91 -1.36 -6.32 6.16
1991 ......... 37.64 5.93 86.62 24.22 30.24 19.58
1992 ......... 2.96 3.28 -3.42 12.06 -.73 5.54
1993 ......... 24.58 2.73 16.52 22.90 31.85 10.52
1994 ......... -2.39 3.76 -4.07 -3.03 4.98 -4.35
1995 ......... 32.20 5.49 31.39 19.67 18.57 20.15
1996 ......... 24.03 5.08 21.95 22.64 14.37 4.96
1997 ......... 29.07 5.16 10.66 18.19 11.38 12.97
- ------------------------------------------------------------------------------------------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE ALLIANCE GROWTH ALLIANCE SMALL
YEAR ENDING GROWTH INTERMEDIATE AND EQUITY ALLIANCE CAP
DECEMBER 31 INVESTORS GOVT. SECURITIES INCOME INDEX INTERNATIONAL GROWTH
- ----------- --------- ---------------- ------ ----- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
1976 .........
1977 .........
1978 .........
1979 .........
1980 .........
1981 .........
1982 .........
1983 .........
1984 .........
1985 .........
1986 .........
1987 .........
1988 .........
1989 ......... 3.74%*
1990 ......... 10.36
1991 ......... 48.66 11.82%*
1992 ......... 4.69 5.35
1993 ......... 15.01 10.33 -.50%*
1994 ......... -3.39 -4.62 -.82 .83%*
1995 ......... 26.12 13.08 23.83 36.23 11.04%*
1996 ......... 12.36 3.53 19.84 22.14 9.57
1997 ......... 16.58 7.01 26.61 32.26 -3.23 26.57%*
- -----------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Unannualized from the inception date described in the Prospectus through the
end of the calendar year indicated.
- --------------------------------------------------------------------------------
13 The Hudson River Trust
<PAGE>
22. The section entitled "Appendix B--Performance Invormation--Performance of
Portfolios Managed Similarly to the Alliance Small Cap Growth Portfolio"
is revised by replacing the second paragraph thereof with the following:
Set forth below is performance data provided by Alliance relating to the
Historical Portfolios for each of the fifteen full calendar years during which
Alliance has managed the Historical Portfolios. As of December 31, 1997, the
assets in the Historical Portfolios totaled approximately $988.4 million and
the average size of a Historical Portfolio was $54.9 million. Each Historical
Portfolio has a nearly identical composition of individual investment holdings
and related percentage weightings.
23. The section entitled "Appendix B--Performance Information--Schedule of
Composite Investment Performance -- Historical Portfolios for the Fifteen
Years Ended December 31, 1997*" is replaced with the following:
SCHEDULE OF COMPOSITE INVESTMENT PERFORMANCE--HISTORICAL PORTFOLIOS
FOR THE FIFTEEN YEARS ENDED DECEMBER 31, 1997*
<TABLE>
<CAPTION>
RUSSELL LIPPER SMALL CO.
HISTORICAL RUSSELL 2000 GROWTH GROWTH
PORTFOLIOS 2000 INDEX INDEX FUND INDEX
TOTAL RETURN TOTAL RESEARCH TOTAL RETURN TOTAL RETURN
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Year ended:
December 31, 1997 ......... 17.58% 22.37% 12.94% 15.05%
December 31, 1996 ......... 36.91% 16.50% 11.26% 14.37%
December 31, 1995 ......... 54.59% 28.45% 31.04% 31.62%
December 31, 1994 ......... -3.47% -1.82% -2.43% -0.48%
December 31, 1993 ......... 14.35% 18.88% 13.36% 16.93%
December 31, 1992 ......... 4.85% 18.41% 7.77% 11.18%
December 31, 1991 ......... 40.96% 46.04% 51.19% 48.53%
December 31, 1990 ......... -23.46% -19.48% -17.41% -13.78%
December 31, 1989 ......... 25.81% 16.26% 20.17% 21.06%
December 31, 1988 ......... 25.63% 25.02% 20.37% 20.34%
December 31, 1987 ......... -7.66% -8.80% -10.48% -5.48%
December 31, 1986 ......... 15.30% 5.68% 3.58% 6.04%
December 31, 1985 ......... 42.57% 31.05% 30.97% 27.27%
December 31, 1984 ......... -11.73% -7.30% -15.83% -9.18%
December 31, 1983 ......... 32.53% 29.13% 20.13% 29.80%
</TABLE>
- ----------
* 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.
The average annual total returns presented below are based upon the cumulative
total return as of December 31, 1997, assume a steady compounded rate of return
and are not year-by-year results, which fluctuated over the periods as shown.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
---------------------------------------------------------------
RUSSELL LIPPER SMALL CO.
HISTORICAL RUSSELL 2000 GROWTH GROWTH
PORTFOLIOS 2000 INDEX INDEX FUND INDEX
------------ ------------ ------------- -----------------
<S> <C> <C> <C> <C>
Three years ................... 35.51% 22.34% 18.09% 20.09%
Five years .................... 22.40% 16.41% 18.74% 15.05%
Ten years ..................... 17.25% 15.77% 13.49% 15.38%
Since January 1, 1983 ......... 15.53% 13.34% 10.30% 13.04%
</TABLE>
- --------------------------------------------------------------------------------
The Hudson River Trust 14
