<PAGE>
This Prospectus is filed pursuant to Rule 497(e).
File Nos. 33-18647 and 811-05398.
<PAGE>
[LOGO OF ALLIANCE CAPITAL APPEARS HERE]
ALLIANCE VARIABLE PRODUCTS
SERIES FUND, INC.
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P.O. BOX 1520, SECAUCUS, NEW JERSEY 07096-1520 TOLL FREE (800) 221-5672
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Alliance Variable Products Series Fund, Inc. (the "Fund") is an open-end se-
ries investment company designed to fund variable annuity contracts and vari-
able life insurance policies to be offered by the separate accounts of certain
life insurance companies. The Fund currently offers an opportunity to choose
among the separately managed pools of assets (the "Portfolios"), described be-
low which have differing investment objectives and policies.
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A DIVERSIFIED SELECTION OF INVESTMENT ALTERNATIVES
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PREMIER GROWTH PORTFOLIO -- seeks growth of capital rather than current in-
come. In pursuing its investment objective, the Premier Growth Portfolio will
employ aggressive investment policies. Since investments will be made based
upon their potential for capital appreciation, current income will be inciden-
tal to the objective of capital growth. The Portfolio is not intended for in-
vestors whose principal objective is assured income or preservation of capi-
tal.
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PURCHASE INFORMATION
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The Fund will offer and sell its shares only to separate accounts of certain
life insurance companies, for the purpose of funding variable annuity con-
tracts and variable life insurance policies. Sales will be made without sales
charge at each Portfolio's per share net asset value. Further information can
be obtained from Alliance Fund Services, Inc. at the address or telephone num-
ber shown above.
An investment in the Fund is not a deposit or obligation of, or guaranteed or
endorsed by, any bank and is not federally insured by the Federal Deposit In-
surance Corporation, the Federal Reserve Board or any other agency.
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ADDITIONAL INFORMATION
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This Prospectus sets forth concisely the information which a prospective in-
vestor should know about the Fund and each of the Portfolios before applying
for certain variable annuity contracts and variable life insurance policies
offered by participating insurance companies. It should be read in conjunction
with the Prospectus of the separate account of the specific insurance product
which accompanies this Prospectus. A "Statement of Additional Information"
dated May 1, 1998, which provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to some investors,
has been filed with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, call or write Alliance Fund Services,
Inc. at the address or telephone number shown above.
(R) :This is a registered mark used under license from the owner, Alliance
Capital Management L.P.
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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 AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS/May 1, 1998
Investors are advised to carefully read this Prospectus and to retain it for
future reference.
<PAGE>
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>
PREMIER
GROWTH
PORTFOLIO*
----------
<S> <C>
ANNUAL PORTFOLIO OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees................................................. 1.00%
Other Expenses.................................................. .08%
----
Total Portfolio Operating Expenses.............................. 1.08%
====
</TABLE>
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*Alliance Capital Management L.P. (the "Adviser") discontinued the expense re-
imbursement effective May 1, 1998.
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (cumulatively through the end of each time period).
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Premier Growth Portfolio........................ $11 $34 $60 $132
</TABLE>
The purpose of the foregoing table is to assist the investor in understand-
ing the various costs and expenses that an investor in the Fund will bear di-
rectly and indirectly. The example should not be considered representative of
future expenses; actual expenses may be greater or less than those shown.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The following information as to net asset value, ratios and certain supple-
mental data for each of the periods shown below has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose unqualified report thereon
(referring to Financial Highlights) appears in the Statement of Additional In-
formation. The following information should be read in conjunction with the fi-
nancial statements and related notes included in the Statement of Additional
Information. Further information about the Fund's performance is contained in
the Fund's annual report, which is available without charge upon request.
<TABLE>
<CAPTION>
PREMIER GROWTH PORTFOLIO
---------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------
1997 1996 1995 1994 1993
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................... $ 15.70 $ 17.80 $ 12.37 $ 12.79 $ 11.38
-------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERA-
TIONS
Net investment income(a)(b).... .04 .08 .09 .03 -0-
Net realized and unrealized
gain (loss) on investments.... 5.27 3.29 5.44 (.41) 1.43
-------- ------- ------- ------- -------
Net increase (decrease) in net
asset value from operations... 5.31 3.37 5.53 (.38) 1.43
-------- ------- ------- ------- -------
LESS: DIVIDENDS AND DISTRIBU-
TIONS
Dividends from net investment
income........................ (.02) (.10) (.03) (.01) (.01)
Distributions from net realized
gains......................... -0- (5.37) (.07) (.03) (.01)
-------- ------- ------- ------- -------
Total dividends and distribu-
tions......................... (.02) (5.47) (.10) (.04) (.02)
-------- ------- ------- ------- -------
Net asset value, end of year... $ 20.99 $ 15.70 $ 17.80 $ 12.37 $ 12.79
======== ======= ======= ======= =======
TOTAL RETURN
Total investment return based
on net asset value(c)......... 33.86% 22.70% 44.85% (2.96)% 12.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's
omitted)...................... $472,326 $96,434 $29,278 $37,669 $13,659
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements................ .95% .95% .95% .95% 1.18%
Expenses, before waivers and
reimbursements................ 1.10% 1.23% 1.19% 1.40% 2.05%
Net investment income(a)....... .21% .52% .55% .42% .22%
Portfolio turnover rate........ 27% 32% 97% 38% 42%
Average commission rate
paid(d)....................... $ .0541 $ .0609 -0- -0- -0-
</TABLE>
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(a) Net of expenses reimbursed or waived by the Adviser.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and re-
demption on the last day of the period. Total investment return calculated
for a period of less than one year is not annualized.
(d) For fiscal years beginning on or after September 1, 1995, a fund is re-
quired to disclose its average commission rate per share for trades on
which commissions are charged.
3
<PAGE>
DESCRIPTION OF THE PORTFOLIOS
INTRODUCTION TO THE FUND
The Fund was established as a corporation in Maryland. The Fund is an open-end
management investment company commonly known as a "mutual fund" whose shares
are offered in separate series each referred to as a "Portfolio." Because the
Fund offers multiple Portfolios, it is known as a "series fund." Each Portfo-
lio is a separate pool of assets constituting, in effect, a separate fund with
its own investment objectives and policies.
A shareholder in a Portfolio will be entitled to his or her pro rata share of
all dividends and distributions arising from that Portfolio's assets and, upon
redeeming shares of that Portfolio, the shareholder will receive the then cur-
rent net asset value of that Portfolio represented by the redeemed shares.
(See "Purchase and Redemption of Shares"). While the Fund has no present in-
tention of doing so, the Fund is empowered to establish, without shareholder
approval, additional portfolios which may have different investment objec-
tives.
The Fund currently has 19 Portfolios one of which, the Premier Growth Portfo-
lio, is offered by this Prospectus.
The Fund is intended to serve as the investment medium for variable annuity
contracts and variable life insurance policies to be offered by the separate
accounts of certain life insurance companies.
It is conceivable that in the future it may be disadvantageous for variable
annuity and variable life insurance separate accounts to invest simultaneously
in the Fund. Currently, however, the Fund does not foresee any disadvantage to
the holders of variable annuity contracts and variable life insurance policies
arising from the fact that the interests of the holders of such contracts and
policies may differ. Nevertheless, the Fund's Directors intend to monitor
events in order to identify any material irreconcilable conflicts which may
possibly arise and to determine what action, if any, should be taken in re-
sponse thereto.
The investment objectives and policies of the Portfolio are set forth below.
There can be, of course, no assurance that the Portfolio will achieve its in-
vestment objectives.
INVESTMENT OBJECTIVES AND POLICIES
GENERAL
The investment objectives and policies of the Portfolio determine the types of
portfolio securities in which the Portfolio invests, and can be expected to
affect the degree of risk to which the Portfolio is subject and the Portfo-
lio's yield or return. The Portfolio's investment objectives cannot be changed
without approval by the holders of a majority of such Portfolio's outstanding
voting securities, as defined in the Investment Company Act of 1940, as
amended (the "Act"). The Fund may change the Portfolio's investment policies
that are not designated "fundamental policies" within the meaning of the Act
upon notice to shareholders of the Portfolio, but without their approval. The
types of portfolio securities in which the Portfolio
4
<PAGE>
may invest are described in greater detail below.
PREMIER GROWTH PORTFOLIO
General. The investment objective of the Premier Growth Portfolio is growth of
capital by pursuing aggressive investment policies. Since investments are made
based upon their potential for capital appreciation, current income is inciden-
tal to the objective of capital growth. Because of the market risks inherent in
any investment, the selection of securities on the basis of their appreciation
possibilities cannot ensure against possible loss in value, and there is, of
course, no assurance that the Portfolio's investment objective will be met. The
Portfolio is therefore not intended for investors whose principal objective is
assured income and conservation of capital.
The Portfolio invests predominantly in the equity securities (common stocks,
securities convertible into common stocks and rights and warrants to subscribe
for or purchase common stocks) of a limited number of large, carefully select-
ed, high-quality U.S. companies that, in the judgment of Alliance Capital Man-
agement L.P. (the "Adviser"), are likely to achieve superior earnings growth.
Normally, about 40 companies are represented in the Portfolio's investment
portfolio, with the 25 most highly regarded of these companies usually consti-
tuting approximately 70% of the Portfolio's net assets. The Portfolio thus dif-
fers from more typical equity mutual funds by investing most of its assets in a
relatively small number of intensively researched companies and is designed for
those seeking to accumulate capital over time with less volatility than
that associated with investment in smaller companies.
The Portfolio, under normal circumstances, invests at least 85% of the value of
its total assets in the equity securities of U.S. companies. The Portfolio de-
fines U.S. companies to be entities (i) that are organized under the laws of
the United States and have their principal office in the United States, and
(ii) the equity securities of which are traded principally in the United States
securities markets.
Within the investment framework described herein, Alfred Harrison, who heads
the Adviser's "Large Cap Growth Group," is ultimately responsible for the in-
vestment decisions for the Portfolio. In managing the Portfolio's assets, the
Adviser's investment strategy emphasizes stock selection and investment in the
securities of a limited number of issuers. As one of the largest multinational
investment firms, the Adviser has access to considerable information concerning
all of the companies followed, an in-depth understanding of the products,
services, markets and competition of these companies and a good knowledge of
the managements of most of the companies in its research universe.
The Adviser's analysts prepare their own earnings estimates and financial mod-
els for each company followed. While each analyst has responsibility for fol-
lowing companies in one or more identified sectors and/or industries, the lat-
eral structure of the Adviser's research organization and constant
communication among the analysts result in decision-making based on the rela-
tive attractiveness of stocks among industry sectors.
5
<PAGE>
The focus during this process is on the early recognition of change on the
premise that value is created through the dynamics of changing company, indus-
try and economic fundamentals. Research emphasis is placed on the identifica-
tion of companies whose substantially above average prospective earnings growth
is not fully reflected in current market valuations.
The Adviser's investment strategy for the Fund emphasizes stock selection and
investment in the securities of a limited number of issuers. The Adviser relies
heavily upon the fundamental analysis and research of its large internal re-
search staff, which generally follows a primary research universe of more than
600 companies that have strong management, superior industry positions, excel-
lent balance sheets and superior earnings growth prospects. An emphasis is
placed on identifying companies whose substantially above average prospective
earnings growth is not fully reflected in current market valuations.
In the managing of the Portfolio's investment portfolio, the Adviser seeks to
utilize market volatility judiciously (assuming no change in company fundamen-
tals) to adjust the Portfolio's positions. The Portfolio strives to capitalize
on apparently unwarranted price fluctuations, both to purchase or increase po-
sitions on weaknesses and to sell or reduce overpriced holdings. Under normal
circumstances, the Portfolio will remain substantially fully invested in equity
securities and will not take significant cash positions for market timing pur-
poses. Rather, during a market decline, while adding to positions in favored
stocks, the Portfolio will tend to become somewhat more aggressive, gradually
reducing somewhat the number of companies represented in the Portfolio's port-
folio. Conversely, in rising markets, while reducing or eliminating fully val-
ued positions, the Portfolio will tend to become somewhat more conservative,
gradually increasing the number of companies represented in the Portfolio's
portfolio. Through this "buying into declines" and "selling into strength," the
Adviser seeks to gain positive returns in good markets while providing some
measure of protection in poor markets.
The Adviser expects the average weighted market capitalization of companies
represented in the Portfolio's portfolio (i.e., the number of a company's
shares outstanding multiplied by the price per share) to normally be in the
range of or exceed the average weighted market capitalization of companies com-
prising the "S&P 500" (Standard & Poor's 500 Composite Stock Price Index, a
widely recognized unmanaged index of market activity) based upon the aggregate
performance of a selected portfolio of publicly traded stocks, including
monthly adjustments to reflect the reinvestment of dividends and distributions.
The Portfolio intends to invest in special situations from time to time. A spe-
cial situation arises when, in the opinion of the Portfolio's management, the
securities of a particular company will, within a reasonably estimable period
of time, be accorded market recognition at an appreciated value solely by rea-
son of a development particularly or uniquely applicable to that company and
regardless of general business conditions or movements of the market as a
whole.
Short Sales. The Premier Growth Portfolio may not sell securities short, except
that it
6
<PAGE>
may make short sales "against the box." A short sale is effected by selling a
security which the Portfolio does not own, or if the Portfolio does own such
security, it is not to be delivered upon consummation of the sale. A short
sale is "against the box" to the extent that the Portfolio contemporaneously
owns or has the right to obtain securities identical to those sold short with-
out payment. Not more than 15% of the value of the Portfolio's net assets will
be in deposits on short sales "against the box."
Puts and Calls. The Premier Growth Portfolio may write call options and may
purchase and sell put and call options written by others, combinations thereof
or similar options. The Portfolio may not write put options. The buyer of an
option, upon payment of a premium obtains, in the case of a put option, the
right to deliver to the writer of the option and, in the case of a call op-
tion, the right to call upon the writer to deliver, a specified number of
shares of a specified stock on or before a fixed date at a predetermined
price.
Writing, purchasing and selling call options are highly specialized activities
and entail greater than ordinary investment risks. When calls written by the
Portfolio are exercised, the Portfolio will be obligated to sell stocks below
the current market price. A call written by the Portfolio will not be sold un-
less the Portfolio at all times during the option period owns either (a) the
optioned securities, or securities convertible into or carrying rights to ac-
quire the optioned securities, or (b) an offsetting call option on the same
securities.
The Premier Growth Portfolio will not sell a call option written or guaranteed
by it if, as a result of such sale, the aggregate of the Portfolio's securi-
ties subject to outstanding call options (valued at the lower of the option
price or market value of such securities) would exceed 15% of the Portfolio's
total assets. The Portfolio will not sell any call option if such sale would
result in more than 10% of the Portfolio's assets being committed to call op-
tions written by the Portfolio, which, at the time of sale by the Portfolio,
have a remaining term of more than 100 days.
As noted, the Portfolio may also purchase and sell put and call options writ-
ten by others, combinations thereof, or similar options, but the aggregate
cost of all outstanding options purchased and held by the Portfolio shall at
no time exceed 10% of the Portfolio's total assets. If an option is not so
sold and is permitted to expire without being exercised, the Portfolio would
suffer a loss in the amount of the premium paid by the Portfolio for the op-
tion.
Options on Market Indices. The Portfolio may purchase and sell exchange-traded
index options. An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery of a se-
curity at a specified price, an option on a securities index gives the holder
the right to receive, upon exercise of the option, an amount of cash if the
closing level of the chosen index is greater than (in the case of a call) or
less than (in the case of a put) the exercise price of the option.
OTHER INVESTMENT POLICIES AND TECHNIQUES
REPURCHASE AGREEMENTS
The Portfolio may enter into agreements pertaining to U.S. Government Securi-
ties.
7
<PAGE>
A repurchase agreement arises when a buyer purchases a security and simultane-
ously agrees to resell it to the vendor at an agreed-upon future date, nor-
mally one day or a few days later. The resale price is greater than the pur-
chase price, reflecting an agreed-upon interest rate. Such agreements permit
the Portfolio to keep all of its assets at work while retaining "overnight"
flexibility in pursuit of investment of a longer-term nature. If a vendor de-
faults on its repurchase obligation, the Portfolio would suffer a loss to the
extent that the proceeds from the sale of the collateral were less than the
repurchase price. If a vendor goes bankrupt, the Portfolio might be delayed
in, or prevented from, selling the collateral for its benefit. The Fund's
Board of Directors has established procedures, which are periodically reviewed
by the Board, pursuant to which the Adviser monitors the creditworthiness of
the vendors with which the Portfolio enters into repurchase agreement transac-
tions.
WRITING COVERED CALL OPTIONS
The Premier Growth Portfolio may write covered call options listed on one or
more national securities exchanges. A call option gives the purchaser of the
option, upon payment of a premium to the writer of the option, the right to
purchase from the writer of the option a specified number of shares of a spec-
ified security on or before a fixed date, at a predetermined price. The Port-
folio is permitted to write call options but may not do so unless it at all
times during the option period owns the optioned securities, or securities
convertible or carrying rights to acquire the optioned securities at no addi-
tional cost. The Portfolio may not write covered call options in excess of 25%
of the Portfolio's assets.
The Portfolio may terminate its obligation to the holder of an option written
by it through a "closing purchase transaction." It may not, however, effect a
closing purchase transaction with respect to such an option after it has been
notified of the exercise of such option. The Portfolio realizes a profit or
loss from a closing purchase transaction if the cost of the transaction is
more or less than the premium received by it from writing the option. Although
the writing of covered call options only on national securities exchanges in-
creases the likelihood of the Portfolio being able to make closing purchase
transactions, there is no assurance that the Portfolio will be able to effect
closing purchase transactions at any particular time or at an acceptable
price. The writing of covered call options could result in increases in the
portfolio turnover of the Portfolio, especially during periods when market
prices of the underlying securities appreciate.
LOANS OF PORTFOLIO SECURITIES
The Premier Growth Portfolio may make secured loans of its portfolio securi-
ties to brokers, dealers and financial institutions provided that cash, U.S.
Government securities, other liquid high-quality debt securities or bank let-
ters of credit equal to at least 100% of the market value of the securities
loaned is deposited and maintained by the borrower with the Portfolio.
The risk in lending portfolio securities, as with other extensions of credit,
consists of the possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a particular
borrower, the Adviser will consider all relevant facts and circumstances, in-
cluding the creditworthiness of the borrower. While
8
<PAGE>
securities are on loan, the borrower will pay the Portfolio any income earned
thereon and the Portfolio may invest any cash collateral in portfolio securi-
ties, thereby earning additional income, or receive an agreed upon amount of
income from a borrower who has delivered equivalent collateral. Each Portfolio
will have the right to regain record ownership of loaned securities to exer-
cise beneficial rights such as voting rights, subscription rights and rights
to dividends, interest or other distributions. Each Portfolio may pay reason-
able finders', administrative and custodial fees in connection with a loan. No
more than 30% of the value of the assets of the Premier Growth Portfolio may
be loaned at any time, nor will the Portfolio lend its portfolio securities to
any officer, director, employee or affiliate of either the Fund or the Advis-
er.
FOREIGN SECURITIES
The Premier Growth Portfolio may invest in listed and unlisted foreign securi-
ties without limitation, although the Portfolio intends to invest at least 85%
of the value of its total assets in the equity securities of American compa-
nies. The Premier Growth Portfolio may convert U.S. Dollars into foreign cur-
rency, but only to effect securities transactions on a foreign securities ex-
change and not to hold such currency as an investment. The Portfolio may enter
into forward foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates.
To the extent that the Portfolio invests in foreign securities, consideration
is given to certain factors comprising both risk and opportunity. The values
of foreign securities investments are affected by changes in currency rates or
exchange control regulations, application of foreign tax laws, including with-
holding taxes, changes in governmental administration or economic, taxation or
monetary policy (in the United States and abroad) or changed circumstances in
dealings between nations. Currency exchange rate movements will increase or
reduce the U.S. Dollar value of the Portfolio's net assets and income attrib-
utable to foreign securities. Costs are incurred in connection with conver-
sions between various currencies held by a Portfolio. In addition, there may
be substantially less publicly available information about foreign issuers
than about domestic issuers, and foreign issuers may not be subject to ac-
counting, auditing and financial reporting standards and requirements compara-
ble to those of domestic issuers. Foreign issuers are subject to accounting,
auditing and financial standards and requirements that differ, in some cases
significantly, from those applicable to U.S. issuers. In particular, the as-
sets and profits appearing on the financial statements of a foreign issuer may
not reflect its financial position or results of operations in the way they
would be reflected had the financial statements been prepared in accordance
with U.S. generally accepted accounting principles. In addition, for an issuer
that keeps accounting records in local currency, inflation accounting rules in
some of the countries in which a Portfolio will invest require, for both tax
and accounting purposes, that certain assets and liabilities be restated on
the issuer's balance sheet in order to express items in terms of currency of
constant purchasing power. Inflation accounting may indirectly generate losses
or profits. Consequently, financial data may be materially affected by re-
statements for inflation and may not accurately reflect the real condition of
those issuers
9
<PAGE>
and securities markets. Securities of some foreign issuers are less liquid and
more volatile than securities of comparable domestic issuers, and foreign bro-
kerage commissions are generally higher than in the United States. Foreign se-
curities markets may also be less liquid, more volatile, and less subject to
governmental supervision than in the United States. Investments in foreign
countries could be affected by other factors not present in the United States,
including expropriation, confiscatory taxation, lack of uniform accounting and
auditing standards and potential difficulties in enforcing contractual obliga-
tions and could be subject to extended settlement periods.
ILLIQUID SECURITIES
Subject to any more restrictive applicable investment policies, the Premier
Growth Portfolio does not maintain more than 15% of its net assets in illiquid
securities. For purposes of the Portfolio's investment objectives and policies
and investment restrictions, illiquid securities include, among others, (a) di-
rect placements or other securities which are subject to legal or contractual
restrictions on resale or for which there is no readily available market (e.g.,
trading in the security is suspended or, in the case of unlisted securities,
market makers do not exist or will not entertain bids or offers), (b) options
purchased by the Portfolio over-the-counter and the cover for options written
by the Portfolio over-the-counter, and (c) repurchase agreements not terminable
within seven days. Securities eligible for resale under Rule 144A under the Se-
curities Act of 1933, as amended, that have legal or contractual restrictions
on resale but have a readily available market are not deemed illiquid for pur-
poses of this limitation. The Adviser monitors the liquidity of such securities
under the supervision of the Board of Directors. See "Certain Fundamental In-
vestment Policies." See the Statement of Additional Information for further
discussion of illiquid securities.
FIXED-INCOME SECURITIES
The value of the shares of the Premier Growth Portfolio that invests in fixed-
income securities will fluctuate with the value of such investments. The value
of the Portfolio's investments will change as the general level of interest
rates fluctuates. During periods of falling interest rates, the values of a
Portfolio's securities generally rise. Conversely, during periods of rising in-
terest rates, the values of a Portfolio's securities generally decline.
In seeking to achieve the Portfolio's investment objective, there will be
times, such as during periods of rising interest rates, when depreciation and
realization of capital losses on securities in the Portfolio's portfolio will
be unavoidable.
SECURITIES RATINGS
The ratings of fixed-income securities by Standard & Poor's Corporation
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Duff & Phelps Credit Rat-
ing Co. ("Duff & Phelps") and Fitch IBCA, Inc. ("Fitch") are a generally ac-
cepted barometer of credit risk. They are, however, subject to certain limita-
tions from an investor's standpoint. The rating of an issuer is heavily
weighted by past developments and does not necessarily reflect probable future
conditions. There is frequently a lag between the time a rating is assigned and
the time it is updated.
10
<PAGE>
In addition, there may be varying degrees of difference in credit risk of se-
curities within each rating category.
DEFENSIVE POSITION
When business or financial conditions warrant, the Premier Growth Portfolio
may assume a temporary defensive position and invest without limit in high
grade fixed income securities or hold their assets in cash equivalents, in-
cluding (i) short-term obligations of the U.S. Government and its agencies or
instrumentalities, (ii) certificates of deposit, bankers' acceptances and in-
terest-bearing savings deposits of banks having total assets of more than $1
billion and which are members of the Federal Deposit Insurance Corporation,
and (iii) commercial paper of prime quality rated A-1 or higher by S&P, D-1 or
higher by Duff & Phelps, F1 or higher by Fitch or Prime-1 by Moody's or, if
not rated, issued by companies which have an outstanding debt issue rated AA
or higher by S&P, Duff & Phelps or Fitch or Aa or higher by Moody's.
PORTFOLIO TURNOVER
The Portfolio turnover rate is set forth under "Financial Highlights." The
portfolio turnover rate is greater than those of most other investment compa-
nies. A high rate of portfolio turnover involves correspondingly greater bro-
kerage and other expenses than a lower rate, which must be borne by the Port-
folio and its shareholders. High portfolio turnover also may result in the re-
alization of substantial net short-term capital gains.
YEAR 2000
Many computer software systems in use today cannot properly process date-re-
lated information from and after January 1, 2000. Should any of the computer
systems employed by the Fund's major service providers fail to process this
type of information properly, that could have a negative impact on the Fund's
operations and the services that are provided to the Fund's shareholders. The
Adviser, as well as Alliance Fund Distributors, Inc., the principal under-
writer of the Fund's shares, and Alliance Fund Services, Inc., the Fund's reg-
istrar, dividend disbursing agent, and transfer agent, have advised the Fund
that they are reviewing all of their computer systems with the goal of modify-
ing or replacing such systems prior to January 1, 2000, to the extent neces-
sary to foreclose any such negative impact. In addition, the Adviser has been
advised by the Fund'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 Fund
and the Adviser have no reason to believe that these goals will not be
achieved. Similarly, the values of certain of the portfolio securities held by
the Fund may be adversely affected by the inability of the securities' issuers
or of third parties to process this type of information properly.
CERTAIN FUNDAMENTAL INVESTMENT POLICIES
The Fund has adopted certain fundamental investment policies applicable to the
Premier Growth Portfolio which may not be changed with respect to the Portfo-
lio without the approval of the shareholders of the Portfolio. Certain of
those fundamental investment policies are set forth below. For a complete
listing of such fundamental investment policies, see the Statement of Addi-
tional Information.
These fundamental investment policies provide that the Portfolio may not: (i)
invest in
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securities of any one issuer (including repurchase agreements with any one en-
tity) other than securities issued or guaranteed by the United States Govern-
ment, if immediately after such purchases more than 5% of the value of its to-
tal assets would be invested in such issuer, except that 25% of the value of
the total assets of the Portfolio may be invested without regard to such 5%
limitation; (ii) acquire more than 10% of any class of the outstanding securi-
ties of any issuer (for this purpose, all preferred stock of an issuer shall
be deemed a single class, and all indebtedness of an issuer shall be deemed a
single class); (iii) invest more than 25% of the value of its total assets at
the time an investment is made in the securities of issuers conducting their
principal business activities in any one industry, except that there is no
such limitation with respect to U.S. Government securities or certificates of
deposit, bankers' acceptances and interest-bearing deposits (for purposes of
this investment restriction, the electric, gas, telephone and water business
shall each be considered as a separate industry); (iv) borrow money, except
that the Portfolio may borrow money only for extraordinary or emergency pur-
poses and then only in amounts not exceeding 15% of its total assets at the
time of borrowing; (v) mortgage, pledge or hypothecate any of its assets, ex-
cept as may be necessary in connection with permissible borrowings described
in paragraph (iv) above (in an aggregate amount not to exceed 15% of total as-
sets of the Portfolio); (vi) invest in illiquid securities if immediately af-
ter such investment more than 10% of the Portfolio's total assets (taken at
market value) would be invested in such securities; or (vii) invest more than
10% of the value of its total assets in repurchase agreements not terminable
within seven days.
In addition, the Fund has adopted an investment policy, which is not desig-
nated a "fundamental policy" within the meaning of the Act, of intending to
have the Portfolio comply at all times with the diversification requirements
prescribed in Section 817(h) of the Internal Revenue Code or any successor
thereto and the applicable Treasury Regulations thereunder. This policy may be
changed upon notice to shareholders of the Fund, but without their approval.
MANAGEMENT OF THE FUND
DIRECTORS
John D. Carifa, Chairman and President, is President and Chief Operating Offi-
cer and a Director of Alliance Capital Management Corporation ("ACMC"), the
sole general partner of the Adviser, with which he has been associated since
prior to 1993.
Ruth Block was formerly an Executive Vice President and the Chief Insurance
Officer of The Equitable Life Assurance Society of the United States since
prior to 1993. She is a Director of Ecolab Incorporated (specialty chemicals)
and Amoco Corporation (oil and gas)
David H. Dievler was formerly a Senior Vice President of ACMC, with which he
had been associated since prior to 1993. He is currently an independent con-
sultant.
John H. Dobkin has been the President of Historic Hudson Valley (historic
preserva-
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tion) since prior to 1993. Previously, he was Director of the National Academy
of Design.
William H. Foulk, Jr. is an investment advisor and an independent consultant.
He was formerly Senior Manager of Barrett Associates, Inc., a registered in-
vestment adviser, with which he had been associated since prior to 1993.
Dr. James M. Hester is President of the Harry Frank Guggenheim Foundation. He
was formerly President of New York Univer-sity, The New York Botanical Garden
and Rector of the United Nations University.
Clifford L. Michel is a partner in the law firm of Cahill Gordon & Reindel,
with which he has been associated since prior to 1993. He is President, Chief
Executive Officer and a Director of Wenonah Development Company (investments)
and a Director of Placer Dome, Inc. (mining).
Donald J. Robinson was formerly a senior partner and a member of the Executive
Committee in the law firm of Orrick, Herrington & Sutcliffe and is currently
Senior Counsel to that firm.
ADVISER
Alliance Capital Management L.P. (the "Adviser"), a Delaware limited partner-
ship with principal offices at 1345 Avenue of the Americas, New York, New York
10105 has been retained under an investment advisory agreement (the "Investment
Advisory Agreement") to provide investment advice and, in general, to conduct
the management and investment program of each of the Fund's Portfolios subject
to the general supervision and control of the Board of Directors of the Fund.
The employee of the Adviser principally responsible for the Premier Growth
Portfolio's investment program since its inception is Alfred Harrison, who is
Vice Chairman of ACMC, with which he has been associated since prior to 1993.
The Adviser is a leading international investment manager supervising client
accounts with assets as of December 31, 1997 totaling more than $218 billion
(of which approximately $85 billion represented the assets of investment compa-
nies). The Adviser's clients are primarily major corporate employee benefit
funds, public employee retirement systems, investment companies, foundations
and endowment funds. The 58 registered investment companies managed by the Ad-
viser comprising 122 separate investment portfolios currently have over three
million shareholder accounts. As of December 31, 1997, the Adviser was retained
as an investment manager for employee benefit plan assets of 31 of the Fortune
100 companies.
ACMC, the sole general partner of, and the owner of a 1% general partnership
interest in, the Adviser, is an indirect wholly-owned subsidiary of The Equita-
ble Life Assurance Society of the United States ("Equitable"), one of the larg-
est life insurance companies in the United States and a wholly owned subsidiary
of the Equitable Companies Incorporated, a holding company which is controlled
by AXA-UAP, a French insurance holding company. Certain information concerning
the ownership and control of Equitable by AXA-UAP is set forth in the Statement
of Additional Information under "Management of the Fund."
The Adviser provides investment advisory services and order placement facili-
ties for
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<PAGE>
each of the Fund's Portfolios and pays all compensation of Directors and offi-
cers of the Fund who are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund, without charge, management supervision and
assistance and office facilities and provide persons satisfactory to the
Fund's Board of Directors to serve as the Fund's officers.
EXPENSES OF THE FUND
In addition to the payments to the Adviser under the Investment Advisory
Agreement described above, the Fund pays certain other costs including (a)
custody, transfer and dividend disbursing expenses, (b) fees of Directors who
are not affiliated with the Adviser, (c) legal and auditing expenses, (d)
clerical, accounting and other office costs, (e) costs of printing the Fund's
prospectuses and shareholder reports, (f) cost of maintaining the Fund's ex-
istence, (g) interest charges, taxes, brokerage fees and commissions, (h)
costs of stationery and supplies, (i) expenses and fees related to registra-
tion and filing with the Commission and with state regulatory authorities, and
(j) cost of certain personnel of the Adviser or its affiliates rendering cler-
ical, accounting and other services to the Fund.
As to the obtaining of clerical and accounting services not required to be
provided to the Fund by the Adviser under the Investment Advisory Agreement,
the Fund may employ its own personnel. For such services, it may also utilize
personnel employed by the Adviser or by its affiliates; in such event, the
services are provided to the Fund at cost and the payments specifically ap-
proved in advance by the Fund's Board of Directors.
PURCHASE AND REDEMPTION OF SHARES
PURCHASE OF SHARES
Shares of the Premier Growth Portfolio of the Fund are offered on a continuous
basis directly by the Fund and by Alliance Fund Distributors, Inc., the Fund's
Principal Underwriter, to the separate accounts of certain life insurance com-
panies without any sales or other charge, at the Portfolio's net asset value,
as described below. The separate accounts of insurance companies place orders
to purchase shares of the Portfolio based on, among other things, the amount
of premium payments to be invested and surrendered and transfer requests to be
effected on that day pursuant to variable annuity contracts and variable life
insurance policies which are funded by shares of the Portfolio. The Fund re-
serves the right to suspend the sale of the
Fund's shares in response to conditions in the securities markets or for other
reasons. Individuals may not place orders directly with the Fund. See the Pro-
spectus of the separate account of the participating insurance company for
more information on the purchase of Portfolio shares.
The public offering price of the Portfolio's shares is its net asset value.
The per share net asset value of the Portfolio is computed in accordance with
the Fund's Articles of Incorporation and By-Laws, at the next close of regular
trading on the New York Stock Exchange (the "Exchange") (currently 4:00 p.m.
Eastern time), following receipt of a purchase or redemption order by the
Fund, on each Fund business day on which such
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<PAGE>
an order is received and trading in the types of securities in which the Fund
invests might materially affect the value of Fund shares. The Fund's per share
net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the total number of its shares then outstanding. A
Fund business day is any weekday exclusive of days on which the Exchange is
closed (most national holidays and Good Friday). For purposes of this computa-
tion, the securities in the Portfolio are valued at its current market value
determined on the basis of market quotations or, if such quotations are not
readily available, such other methods as the Directors believe would accu-
rately reflect fair market value. Portfolio securities may also be valued on
the basis of prices provided by a pricing service when such prices are be-
lieved by the Adviser to reflect the fair market value of such securities.
REDEMPTION OF SHARES
An insurance company separate account may redeem all or any portion of the
shares of the Portfolio in its account at any time at the net asset value per
share of the Portfolio next determined after a redemption request in proper
form is furnished to the Fund or the Principal Underwriter. Any certificates
representing shares being redeemed must be submitted with the redemption re-
quest. Shares redeemed are entitled to earn dividends, if any, up to and in-
cluding the day redemption is effected. There is no redemption charge. Payment
of the redemption price will normally be made within seven days after receipt
of such tender for redemption.
The right of redemption may be suspended or the date of payment may be post-
poned for any period during which the Exchange is closed (other than customary
weekend and holiday closings) or during which the Commission determines that
trading thereon is restricted, or for any period during which an emergency (as
determined by the Commission) exists as a result of which disposal by the Fund
of securities owned by the Portfolio is not reasonably practicable or as a re-
sult of which it is not reasonably practicable for the Fund fairly to deter-
mine the value of the Portfolio's net assets, or for such other periods as the
Commission may by order permit for the protection of security holders of the
Fund. For information regarding how to redeem shares in the Fund please see
your insurance company separate account prospectus.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Premier Growth Portfolio will declare and distribute dividends from net
investment income and will distribute its net capital gains, if any, at least
annually. Such income and capital gains distributions will be made in shares
of the Portfolio.
The Premier Growth Portfolio qualified and intends to continue to qualify to
be taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code (the "Code"). If so qualified, the Portfolio will not be subject
to Federal income or excise taxes on its investment company taxable income and
net capital gains to the extent such investment company taxable income and net
capital gains are distributed to the separate accounts of insurance compa-
15
<PAGE>
nies which hold its shares. Under current tax law, capital gains or dividends
from any Portfolio are not currently taxable when left to accumulate within a
variable annuity (other than an annuity interest owned by a person who is not
a natural person) or variable life insurance contract. Distributions of net
investment income and net short-term capital gain will be treated as ordinary
income and distributions of net long-term capital gain will be treated as
long-term capital gain in the hands of the insurance companies.
Investment income received by the Portfolio from sources within foreign coun-
tries may be subject to foreign income taxes withheld at the source. Provided
that certain Code requirements are met, the Portfolio may "pass through" to
its shareholders credits or deductions for foreign income taxes paid.
Section 817(h) of the Code requires that the investments of a segregated asset
ac-count of an insurance company be "adequately diversified," in accordance
with Treasury Regulations promulgated thereunder, in order for the holders of
the variable annuity contracts or variable life insurance policies underlying
the account to receive the tax-deferred or tax-free treatment generally af-
forded holders of annuities or life insurance policies under the Code. The De-
partment of the Treasury has issued Regulations under section 817(h) which,
among other things, provide the manner in which a segregated asset account
will treat investments in a regulated investment company for purposes of the
applicable diversification requirements. Under the Regulations, if a regulated
investment company satisfies certain conditions, a segregated asset account
owning shares of the regulated investment company will not be treated as a
single investment for these purposes, but rather the account will be treated
as owning its proportionate share of each of the assets of the regulated in-
vestment company. The Premier Growth Portfolio plans to satisfy these condi-
tions at all times so that the shares of the Portfolio owned by a segregated
asset account of a life insurance company will be subject to this treatment
under the Code.
For information concerning federal income tax consequences for the holders of
variable annuity contracts and variable rate insurance policies, such holders
should consult the prospectus used in connection with the issuance of their
particular contracts or policies.
GENERAL INFORMATION
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board of Directors of the Fund, the
Adviser is responsible for the investment decisions and the placing of the or-
ders for portfolio transactions for the Fund. Portfolio transactions for the
Premier Growth Portfolio are normally effected by brokers.
The Fund has no obligation to enter into transactions in portfolio securities
with any broker, dealer, issuer, underwriter or other entity. In placing or-
ders, it is the policy of the Fund to obtain the best price and execution for
its transactions. Consistent with the objective of obtaining best execution,
the Fund may use brokers and dealers who
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<PAGE>
provide research, statistical and other information to the Adviser.
There may be occasions where the transaction cost charged by a broker may be
greater than that which another broker may charge if the Fund determines in
good faith that the amount of such transaction cost is reasonable in relation
to the value of the brokerage and research and statistical services provided by
the executing broker. Consistent with the Conduct Rules of the National Associ-
ation of Securities Dealers, Inc., and subject to seeking best price and execu-
tion, the Fund may consider sales of shares of the Fund as a factor in the se-
lection of brokers and dealers to enter into portfolio transactions with the
Fund.
The Fund may from time to time place orders for the purchase or sale of securi-
ties on an agency basis with Donaldson, Lufkin & Jenrette Securities Corpora-
tion, an affiliate of the Adviser, and with brokers which may have their trans-
actions cleared or settled, or both, by the Pershing Division of Donaldson,
Lufkin and Jenrette Securities Corporation, for which Donaldson, Lufkin and
Jenrette Securities Corporation may receive a portion of the brokerage commis-
sion. In such instances, the placement of orders with such brokers would be
consistent with the Fund's objective of obtaining best execution and would not
be dependent upon the fact that Donaldson, Lufkin & Jenrette Securities Corpo-
ration is an affiliate of the Adviser.
ORGANIZATION
The Fund is a Maryland corporation organized on November 17, 1987. The autho-
rized capital stock of the Fund consists solely of 10,000,000,000 shares of
Common Stock having a par value of $.001 per share, which may, without share-
holder approval, be divided into an unlimited number of series. Such shares are
currently divided into 19 series, one underlying each Portfolio. Shares of each
Portfolio are normally entitled to one vote for all purposes. Generally, shares
of all Portfolios vote as a single series on matters, such as the election of
Directors, that affect all Portfolios in substantially the same manner. Mary-
land law does not require a registered investment company to hold annual meet-
ings of shareholders and it is anticipated that shareholder meetings will be
held only when specifically required by federal or state law. Shareholders have
available certain procedures for the removal of Directors. Shares of each Port-
folio are freely transferable, are entitled to dividends as determined by the
Board of Directors and, in liquidation of the Fund, are entitled to receive the
net assets of that Portfolio. Shareholders have no preference, pre-emptive or
conversion rights. In accordance with current law, it is anticipated that an
insurance company issuing a variable annuity contract or variable life insur-
ance policy that participates in the Fund will request voting instructions from
contract or policyholders and will vote shares in the separate account in ac-
cordance with the voting instructions received.
PRINCIPAL UNDERWRITER
Alliance Fund Distributors, Inc., 1345 Avenue of the Americas, New York, New
York 10105, an indirect wholly-owned subsidiary of the Adviser, is the Princi-
pal Underwriter of shares of the Fund.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
17
<PAGE>
02110, acts as Custodian for the securities and cash of the Fund and as its
dividend disbursing agent, but plays no part in deciding on the purchase or
sale of portfolio securities.
REGISTRAR, DIVIDEND-DISBURSING AGENT AND TRANSFER AGENT
Alliance Fund Services, Inc., an indirect wholly-owned subsidiary of the Ad-
viser, located at 500 Plaza Drive, Secaucus, New Jersey, 07094, acts as the
Fund's registrar, dividend-disbursing agent and transfer agent.
PERFORMANCE INFORMATION
From time to time the Fund advertises its "total return." The Fund's "total
return" is its average annual compounded total return for its most recently
completed one, five, and ten-year periods (or the period since the Fund's in-
ception). The Fund's total return for such a period is computed by finding,
through the use of a formula prescribed by the Commission, the average annual
compounded rate of return over the period that would equate an assumed initial
amount invested to the value of such investment at the end of the period. For
purposes of computing total return, income dividends and capital gains distri-
butions paid on shares of the Fund are assumed to have been reinvested when
paid and the maximum sales charge applicable to purchases of Fund shares is
assumed to have been paid.
The Fund's total return is not fixed and will fluctuate in response to pre-
vailing market conditions or as a function of the type and quality of the se-
curities in the Fund's portfolio and the Fund's expenses. Total return infor-
mation is useful in reviewing the Fund's performance but such information may
not provide a basis for comparison with bank deposits or other investments
which pay a fixed yield for a stated period of time. An investor's principal
invested in the Fund is not fixed and will fluctuate in response to prevailing
market conditions.
Advertisements quoting performance rankings of the Fund as measured by finan-
cial publications or by independent organizations such as Lipper Analytical
Services, Inc. and Morningstar, Inc., and advertisements presenting the his-
torical record of payments of income dividends by the Fund may also from time
to time be sent to investors or placed in newspapers, magazines such as the
Wall Street Journal, The New York Times, Barrons, Investor's Daily, Money Mag-
azine, Changing Times, Business Week and Forbes or other media on behalf of
the Fund.
ADDITIONAL INFORMATION
Any shareholder inquiries may be directed to Alliance Fund Services, Inc. at
the address or telephone number shown on the front cover of this Prospectus.
This Prospectus and the Statement of Additional Information which has been in-
corporated by reference herein, does not contain all the information set forth
in the Registration Statement filed by the Fund with the Commission under the
Securities Act of 1933, as amended. Copies of the Registration Statement may
be obtained at a reasonable charge from the Commission or may be examined,
without charge, at the offices of the Commission in Washington, D.C.
This Prospectus does not constitute an offering in any state in which such of-
fering may not lawfully be made.
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