ALLIANCE MORTGAGE STRATEGY TRUST INC, 485APOS, 1995-12-29

ALLIANCE MORTGAGE STRATEGY TRUST INC
485APOS, 1995-12-29

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As filed with the Securities and Exchange
Commission on December 29, 1995

File Nos. 33-47031
8ll-06627

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 10

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940

Amendment No. 11

Alliance Mortgage Strategy Trust, Inc.
(Exact Name of Registrant as Specified in Charter)

1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number,
including Area Code: (212) 969-1000

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

It is proposed that this filing will become effective
(check appropriate box)

_____ immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)

<PAGE>

_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
X on February 29, 1996 pursuant to paragraph (a)(2) of
_____ Rule 485.
If appropriate, check the following box:
_____ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

Registrant has registered an indefinite number of shares of
Common Stock pursuant to Rule 24f-2 under the Investment Company
Act of 1940. Registrant filed a notice pursuant to such Rule for
its fiscal year ended November 30, 1994 on January 24, 1995.

<PAGE>

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

N-1A ITEM NO. LOCATION IN PROSPECTUS (CAPTION)

PART A

Item 1. Cover Page Cover Page

Item 2. Synopsis The Fund At a Glance

Item 3. Condensed Financial Information Financial Highlights

Item 4. General Description of Registrant Description of the
Fund; General
Information

Item 5. Management of the Fund Management of the
Fund; General
Information

Item 6. Capital Stock and Other
Securities Dividends,
Distributions and
Taxes; General
Information

Item 7. Purchase of Securities Being
Offered Purchase and Sale of
Shares; General
Information

Item 8. Redemption or Repurchase Purchase and Sale of
Shares; General
Information

Item 9. Pending Legal Proceedings Not Applicable

PART B Location in Statement
of Additional
Information

Item 10. Cover Page Cover Page

Item 11. Table of Contents Cover Page

<PAGE>

Item 12. General Information and History Description of the
Fund; General
Information

Item 13. Investment Objectives and
Policies Investment Objective,
Policies and
Restrictions

Item 14. Management of the Registrant Management of the
Fund

Item 15. Control Persons and Principal
Holders of Securities Management of the
Fund; General
Information

Item 16. Investment Advisory and
Other Services Management of the
Fund

Item 17. Brokerage Allocation and
Other Practices General Information

Item 18. Capital Stock and Other
Securities General Information

Item 19. Purchase, Redemption and Pricing
of Securities Being Offered Redemption and
Repurchase of Shares;
Net Asset Value

Item 20. Tax Status Investment Objective,
Policies and
Restrictions;
Dividends,
Distributions and
Taxes

Item 21. Underwriters General Information

Item 22. Calculation of Performance Data General Information

Item 23. Financial Statements Financial Statements;
Report of Independent
Auditors

<PAGE>

________________________________________________________________

THE ALLIANCE BOND FUNDS
________________________________________________________________

P.O. BOX 1520, SECAUCUS, NEW JERSEY 07096-1520
TOLL FREE (800) 221-5672
FOR LITERATURE: TOLL FREE (800) 227-4618

PROSPECTUS AND APPLICATION

[ ], 1996

U.S. GOVERNMENT FUNDS GLOBAL BOND FUNDS
- -ALLIANCE SHORT-TERM U.S. -ALLIANCE NORTH AMERICAN
GOVERNMENT FUND GOVERNMENT INCOME TRUST
- -U.S. GOVERNMENT -ALLIANCE GLOBAL DOLLAR
PORTFOLIO GOVERNMENT FUND

- -ALLIANCE LIMITED MATURITY
GOVERNMENT FUND CORPORATE BOND FUND
-CORPORATE BOND PORTFOLIO
MORTGAGE FUND

- -ALLIANCE MORTGAGE SECURITIES
INCOME FUND

MULTI-MARKET FUNDS
- -ALLIANCE WORLD INCOME TRUST
- -ALLIANCE SHORT-TERM
MULTI-MARKET TRUST
- -ALLIANCE MULTI-MARKET
STRATEGY TRUST

TABLE OF CONTENTS PAGE
- -------------------------------------------------------
The Funds at a Glance
Expense Information
Financial Highlights
Glossary
Description of the Funds
Investment Objectives and Policies
Additional Investment Practices
Certain Fundamental Investment Policies
Risk Considerations
Purchase and Sale of Shares
Management of the Funds

<PAGE>

Dividends, Distributions and Taxes
General Information.
Appendix A: Bond Ratings A-1
Appendix B: General Information About Canada,
Mexico and Argentina B-1

Adviser
Alliance Capital Management L.P.
1345 Avenue Of The Americas
New York, New York 10105

<PAGE>

The Alliance Bond Funds provide a broad selection of
investment alternatives to investors seeking high current income.
The U.S. Government Funds invest mainly in U.S. Government
securities and the Mortgage Fund invests in mortgage-related
securities, while the Multi-Market Funds diversify their
investments among debt markets around the world and the Global
Bond Funds invest primarily in foreign government securities. The
Corporate Bond Fund invests primarily in corporate debt
securities.

Each fund or portfolio (each a "Fund") is, or is a series of,
an open-end management investment company. This Prospectus sets
forth concisely the information which a prospective investor
should know about each Fund before investing. A "Statement of
Additional Information" for each Fund that provides further
information regarding certain matters discussed in this
Prospectus and other matters that 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 indicated
address or "Literature" telephone number.

Each Fund offers three classes of shares that may be
purchased at the investor's choice at a price equal to their net
asset value (i) plus an initial sales charge imposed at the time
of purchase (the "Class A shares"), (ii) with a contingent
deferred sales charge imposed on most redemptions made within
three years of purchase (the "Class B shares"), or (iii) without
any initial or contingent deferred sales charge (the "Class C
shares"), except that Alliance World Income Trust offers only one
class of shares which may be purchased at a price equal to its
net asset value without any initial or contingent deferred sales
charge. See "Purchase and Sale of Shares."
AN INVESTMENT IN THESE SECURITIES IS NOT A DEPOSIT OR OBLIGATION
OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND IS NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.

INVESTORS ARE ADVISED TO READ THIS PROSPECTUS CAREFULLY AND
TO RETAIN IT FOR FUTURE REFERENCE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

ALLIANCE MUTUAL FUNDS WITHOUT THE MYSTERY

R/SM These are registered marks used under licenses from the
owner, Alliance Capital Management L.P.

<PAGE>

THE FUNDS AT A GLANCE

The following summary is qualified in its entirety by the
more detailed information contained in this Prospectus.

THE FUNDS' INVESTMENT ADVISER IS . . . Alliance Capital
Management L.P. ("Alliance"), a global investment manager
providing diversified services to institutions and individuals
through a broad line of investments including 104 mutual funds.
Since 1971, Alliance has earned a reputation as a leader in the
investment world with over $140 billion in assets under
management as of September 30, 1995. Alliance provides investment
management services to 29 of the FORTUNE 100 companies.

U.S. GOVERNMENT FUNDS

SHORT-TERM U.S. GOVERNMENT FUND SEEKS . . . High current
income consistent with preservation of capital.

INVESTS PRIMARILY IN . . . A diversified portfolio of U.S.
Government securities.

U.S. GOVERNMENT PORTFOLIO SEEKS . . . As high a level of
current income as is consistent with safety of principal.

INVESTS SOLELY IN . . . A diversified portfolio of U.S.
Government securities backed by the full faith and credit of the
United States.

LIMITED MATURITY GOVERNMENT FUND SEEKS . . . The highest
level of current income, consistent with low volatility of net
asset value.

INVESTS PRIMARILY IN . . . U.S. Government Securities,
including mortgage related securities, and repurchase agreements
relating to U.S. Government securities.

MORTGAGE FUND

MORTGAGE SECURITIES INCOME FUND SEEKS . . . A high level of
current income consistent with prudent investment risk.

INVESTS PRIMARILY IN . . . A diversified portfolio of
mortgage-related securities.

<PAGE>

MULTI-MARKET FUNDS

WORLD INCOME TRUST SEEKS . . . The highest level of current
income that is available from a portfolio of high-quality debt
securities having remaining maturities of not more than one year.

INVESTS PRIMARILY IN . . . A non-diversified portfolio of
debt securities denominated in the U.S. Dollar and selected
foreign currencies. The Fund maintains at least 35% of its net
assets in U.S. Dollar-denominated securities.

SHORT-TERM MULTI-MARKET TRUST SEEKS . . . The highest level
of current income through investment in a portfolio of high-
quality debt securities having remaining maturities of not more
than three years.

INVESTS PRIMARILY IN . . . A non-diversified portfolio of
debt securities denominated in the U.S. Dollar and selected
foreign currencies. While the Fund normally will maintain a
substantial portion of its assets in debt securities denominated
in foreign currencies, the Fund will invest at least 25% of its
net assets in U.S. Dollar-denominated securities.

MULTI-MARKET STRATEGY TRUST SEEKS . . . The highest level of
current income that is available from a portfolio of high-quality
debt securities having remaining maturities of not more than five
years.

INVESTS PRIMARILY IN . . . A non-diversified portfolio of
debt securities denominated in the U.S. Dollar and selected
foreign currencies. The Fund expects to maintain at least 70% of
its assets in debt securities denominated in foreign currencies,
but not more than 25% of the Fund's total assets may be invested
in debt securities denominated in a single currency other than
the U.S. Dollar.

GLOBAL BOND FUNDS

NORTH AMERICAN GOVERNMENT INCOME TRUST SEEKS . . . The
highest level of current income that is available from a
portfolio of investment grade debt securities issued or
guaranteed by the governments of the United States, Canada and
Mexico.

INVESTS PRIMARILY IN . . . A non-diversified portfolio of
government securities denominated in the U.S. Dollar, the
Canadian Dollar and the Mexican Peso, and expects to maintain at

<PAGE>

least 25% of its assets in securities denominated in the U.S.
Dollar. In addition, the Fund may invest up to 25% of its total
assets in debt securities issued by governmental entities in
Argentina.

GLOBAL DOLLAR GOVERNMENT FUND SEEKS . . . Primarily a high
level of current income and, secondarily, capital appreciation.

INVESTS PRIMARILY IN . . . A non-diversified portfolio of
sovereign debt obligations and in U.S. and non-U.S. corporate
fixed-income securities. Substantially all of the Fund's assets
are invested in lower-rated securities.

CORPORATE BOND FUND

CORPORATE BOND PORTFOLIO SEEKS . . . Primarily to maximize
income over the long term consistent with providing reasonable
safety in the value of each shareholder's investment;
secondarily, the Fund will attempt to increase its capital
through appreciation of its investments in order to preserve and,
if possible, increase the purchasing power of each shareholder's
investment.

INVESTS PRIMARILY IN . . . A diversified portfolio of
corporate bonds issued by domestic and foreign issuers that give
promise of relatively attractive yields.

A WORD ABOUT RISK . . . The prices of the shares of the
Alliance Bond Funds will fluctuate as the daily prices of the
individual bonds in which they invest fluctuate, so that your
shares, when redeemed, may be worth more or less than their
original cost. Price fluctuations may be caused by changes in the
general level of interest rates or changes in bond credit quality
ratings. Changes in interest rates have a greater effect on bonds
with longer maturities than those with shorter maturities. The
prices of non-U.S. Dollar denominated bonds also fluctuate with
changes in foreign exchange rates. Investment in the Global Bond
Funds, the Multi-Market Funds and any other Fund that may invest
a significant amount of its assets in non-U.S. securities
involves risks not associated with Funds that invest primarily in
securities of U.S. issuers. While the Funds invest principally in
bonds and fixed-income securities, in order to achieve their
investment objectives, the Funds may at times use certain types
of derivative instruments, such as options, futures, forwards and
swaps. These instruments involve risks different from, and, in
certain cases, greater than, the risks presented by more
traditional investments. These risks are fully discussed in this

<PAGE>

Prospectus. See "Description of the Funds-Additional Investment
Practices" and "-Risk Considerations."

GETTING STARTED . . . Shares of the Funds are available
through your financial representative and most banks, insurance
companies and brokerage firms nationwide. Shares of each Fund
(except WORLD INCOME) can be purchased for a minimum initial
investment of $250, and subsequent investments can be made for as
little as $50. For detailed information about purchasing and
selling shares, see "Purchase and Sale of Shares." In addition,
the Funds offer several time and money saving services to
investors. Be sure to ask your financial representative about:

AUTOMATIC REINVESTMENT
AUTOMATIC INVESTMENT PROGRAM
RETIREMENT PLANS
SHAREHOLDER COMMUNICATIONS
DIVIDEND DIRECTION PLANS
AUTO EXCHANGE SYSTEMATIC WITHDRAWALS
CHECK-WRITING
A CHOICE OF PURCHASE PLANS
TELEPHONE TRANSACTIONS
24 HOUR INFORMATION

ALLIANCE
MUTUAL FUNDS WITHOUT THE MYSTERY

R/SM These are registered marks used under licenses from the
owner, Alliance Capital Management L.P.

<PAGE>

________________________________________________________________

EXPENSE INFORMATION
________________________________________________________________

SHAREHOLDER TRANSACTION EXPENSES are one of several factors
to consider when you invest in a Fund. The following tables
summarize your maximum transaction costs from investing in a
Fund, other than WORLD INCOME, and annual operating expenses for
each class of shares of each Fund. WORLD INCOME, which has only
one class of shares, has no sales charge on purchases or
reinvested dividends, deferred sales charge, redemption fee or
exchange fee. For each Fund, the "Examples" below show the
cumulative expenses attributable to a hypothetical $1,000
investment, assuming a 5% annual return, in each class for the
periods specified.

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C> <C>
Maximum sales charge imposed
on purchases (as a percentage
of offering price) 4.25%(a) None None
Sales charge imposed on dividend
reinvestments None None None
Deferred sales charge(as a
percentage of original purchase
price or redemption proceeds,
whichever is lower) None 3.0% None
during the
first year,
decreasing 1.0%
annually to 0%
after the
third year (b)
Exchange fee None None None
_______________________________________________________________________________

(A) REDUCED FOR LARGER PURCHASES. PURCHASES OF $1,000,000 OR MORE ARE NOT SUBJECT TO AN
INITIAL SALES CHARGE BUT MAY BE SUBJECT TO A 1% DEFERRED SALES CHARGE ON REDEMPTIONS WITHIN
ONE YEAR OF PURCHASE. SEE "PURCHASE AND SALE OF SHARES-HOW TO BUY SHARES" -PAGE [ ]. (B)
CLASS B SHARES OF EACH FUND AUTOMATICALLY CONVERT TO CLASS A SHARES AFTER SIX YEARS. SEE
"PURCHASE AND SALE OF SHARES-HOW TO BUY SHARES" -PAGE [ ].

</TABLE>
<TABLE>

<PAGE>

<CAPTION>
ANNUAL OPERATING EXPENSES
EXAMPLES

- -------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM U.S. GOVERNMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees(b)(after
waiver) None None None After 1 year $ 56 $ 51 $ 21 $ 21
12b-1 fees .30% 1.00% 1.00% After 3 years $ 85 $ 76 $ 66 $ 66
Other expenses(a)(b)(after After 5 years $116 $113 $113 $113
reimbursement) 1.10% 1.10% 1.10% After 10 years $203 $209 $209 $243
Total fund operating
expenses(b) 1.40% 2.10% 2.10%

U.S. GOVERNMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees .53% .53% .53% After 1 year $ 52 $ 47 $ 17 $ 17
12b-1 fees .30% 1.00% 1.00% After 3 years $ 73 $ 64 $ 54 $ 54
Other expenses(a) .18% .19% .18% After 5 years $ 96 $ 93 $ 93 $ 93
Total fund operating After 10 years $161 $167 $167 $202
expenses 1.01% 1.72% 1.71%

LIMITED MATURITY GOVERNMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees .65% .65% .65% After 1 year $ 61 $ 57 $ 27 $ 27
12b-1 fees .30% 1.00% 1.00% After 3 years $101 $ 93 $ 83 $ 83
Other expenses After 5 years $143 $141 $141 $142
Interest expense .65% .66% .69% After 10 years $259 $266 $266 $301
Other operating expenses(a) .34% .35% .34%
Total other expenses .99% 1.01% 1.03%
Total fund operating expenses(h) 1.94% 2.66% 2.68%

MORTGAGE SECURITIES INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees .51% .51% .51% After 1 year $ 57 $ 52 $ 22 $ 22
12b-1 fees .30% 1.00% 1.00% After 3 years $ 87 $ 78 $ 68 $ 68
Other expenses After 5 years $119 $117 $117 $116
Interest expense .43% .43% .43% After 10 years $211 $217 $217 $250
Other operating expenses(a) .23% .24% .23%
Total other expenses .66% .67% .66%
Total fund operating expenses(i) 1.47% 2.18% 2.17%

</TABLE>

PLEASE REFER TO THE FOOTNOTES ON PAGE 5.

<PAGE>

ANNUAL OPERATING EXPENSES EXAMPLES

- -------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WORLD INCOME
Management fees(c)(after waiver) .49% After 1 year $19
12b-1 fees(c)(after waiver) .68% After 3 years $60
Other expenses(a) .73% After 5 years $103
Total fund operating expenses(c) 1.90% After 10 years $222

SHORT-TERM MULTI-MARKET CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees .55% .55% .55% After 1 year $ 55 $ 50 $ 20 $ 20
12b-1 fees .30% 1.00% 1.00% After 3 years $ 82 $ 73 $ 63 $ 62
Other expenses(a) .44% .45% .43% After 5 years $110 $108 $108 $107
Total fund operating expenses 1.29% 2.00% 1.98% After 10 years $192 $198 $198 $231

MULTI-MARKET STRATEGY CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees .60% .60% .60% After 1 year $ 58 $ 53 $ 23 $ 23
12b-1 fees .30% 1.00% 1.00% After 3 years $ 91 $ 82 $ 72 $ 72
Other expenses After 5 years $125 $123 $123 $123
Interest expense .07% .07% .07% After 10 years $223 $230 $230 $264
Other operating expenses(a) .62% .63% .63%
Total other expenses .69% .70% .70%
Total fund operating expenses(d) 1.59% 2.30% 2.30%

NORTH AMERICAN GOVERNMENT INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees(e) .65% .65% .65% After 1 year $ 69 $ 64 $ 34 $ 34
12b-1 fees .30% 1.00% 1.00% After 3 years $123 $114 $104 $104
Other expenses After 5 years $179 $177 $177 $177
Interest expense 1.16% 1.15% 1.15% After 10 years $333 $338 $338 $368
Other operating expenses(a) .59% .60% .60%
Total other expenses 1.75% 1.75% 1.75%
Total fund operating expenses(f) 2.70% 3.40% 3.40%

GLOBAL DOLLAR GOVERNMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees(g) .75% .75% .75% After 1 year $ 61 $ 57 $ 27 $ 27
12b-1 fees .30% 1.00% 1.00% After 3 years $101 $ 92 $ 82 $ 82
Other expenses(a) After 5 years $142 $140 $140 $140
.88% .89% .88 After 10 years $258 $264 $264 $296
Total fund operating expenses 1.93% 2.64% 2.63%

<PAGE>

CORPORATE BOND CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C
------- ------- ------- ------- -------- --------- -------
Management fees(h) .63% .63% .63% After 1 year $ 55 $ 50 $ 20 $ 20
12b-1 fees .30% 1.00% 1.00% After 3 years $ 80 $ 72 $ 62 $ 61
Other expenses(a) .32% .36% .32% After 5 years $108 $107 $107 $105
Total fund operating expenses 1.25% 1.99% 1.95% After 10 years $187 $195 $195 $227
</TABLE>

_______________
+ ASSUMES REDEMPTION AT END OF PERIOD AND, WITH RESPECT TO SHARES HELD TEN
YEARS, CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SIX YEARS.
++ ASSUMES NO REDEMPTION AT END OF PERIOD AND, WITH RESPECT TO SHARES HELD
TEN YEARS, CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SIX YEARS.
(A) THESE EXPENSES INCLUDE A TRANSFER AGENCY FEE PAYABLE TO ALLIANCE FUND
SERVICES, INC., AN AFFILIATE OF ALLIANCE, BASED ON A FIXED DOLLAR AMOUNT
CHARGED TO THE FUND FOR EACH SHAREHOLDER'S ACCOUNT. NET OF VOLUNTARY
(B) FEE WAIVERS AND EXPENSE REIMBURSEMENTS. ABSENT SUCH WAIVERS AND
REIMBURSEMENTS, MANAGEMENT FEES WOULD HAVE BEEN .55%, OTHER EXPENSES WOULD
HAVE BEEN 2.86% FOR CLASS A, 2.78% FOR CLASS B AND 2.68% FOR CLASS C AND
TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN 3.71% FOR CLASS A, 4.33% FOR
CLASS B AND 4.23% FOR CLASS C.
(C) NET OF VOLUNTARY FEE WAIVERS. ABSENT SUCH WAIVERS, ANNUALIZED MANAGEMENT
FEES WOULD HAVE BEEN .65%, ANNUALIZED RULE 12B-1 FEES WOULD HAVE BEEN .90%
AND ANNUALIZED TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN 2.28%.
(D) EXCLUDING INTEREST EXPENSE, TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN
FOR CLASS A, 1.52%, FOR CLASS B, 2.23% AND FOR CLASS C, 2.23%.
(E) REPRESENTS .65 OF 1% OF THE AVERAGE DAILY VALUE OF THE FUND'S ADJUSTED
TOTAL NET ASSETS.
(F) EXCLUDING INTEREST EXPENSE, TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN
FOR CLASS A, 1.54%, FOR CLASS B, 2.25% AND FOR CLASS C, 2.25%.
(G) EXCLUDING INTEREST EXPENSE, TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN
FOR CLASS A, 1.29%, FOR CLASS B, 2.00%, FOR CLASS C, 1.99%.
(H) EXCLUDING INTEREST EXPENSE, TOTAL FUND OPERATING EXPENSES WOULD HAVE BEEN
FOR CLASS A, 1.04%, FOR CLASS B, 1.75%, FOR CLASS C, 1.74%.

<PAGE>

The purpose of the tables on pages 4 and 5 is to assist the
investor in understanding the various costs and expenses that an
investor in a Fund will bear directly or indirectly. Long-term
shareholders of a Fund may pay aggregate sales charges totaling
more than the economic equivalent of the maximum initial sales
charges permitted by the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. See "Management of the
Funds-Distribution Services Agreements." The Rule 12b-1 fee for
each class comprises a service fee not exceeding .25% of the
aggregate average daily net assets of the Fund attributable to
the class and an asset-based sales charge equal to the remaining
portion of the Rule 12b-1 fee. With respect to each of MULTI-
MARKET STRATEGY and NORTH AMERICAN GOVERNMENT INCOME, "interest
expense" represents interest paid by the Fund on borrowings for
the purpose of making additional portfolio investments. Such
borrowings are intended to enable each of those Funds to produce
higher net yields to shareholders than the Funds could pay
without such borrowings. See "Risk Considerations-Effects of
Borrowing." Excluding interest expense, total fund operating
expenses of each of MULTI-MARKET STRATEGY and NORTH AMERICAN
GOVERNMENT INCOME would be lower (see notes (e) and (g) above)
and the cumulative expenses shown in the Examples above with
respect to those Funds would be lower. The management fee rate of
GLOBAL DOLLAR GOVERNMENT is higher than that paid by most other
investment companies, but Alliance believes the fee is comparable
to those paid by investment companies of similar investment
orientation. The expense ratios for Class B and Class C shares of
MULTI-MARKET STRATEGY and NORTH AMERICAN GOVERNMENT INCOME are
higher than the expense ratios of most other mutual funds, but
are comparable to the expense ratios of mutual funds whose shares
are similarly priced. The Examples set forth above assume
reinvestment of all dividends and distributions and utilize a 5%
annual rate of return as mandated by Commission regulations. THE
EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIVE OF PAST OR
FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN.

________________________________________________________________

FINANCIAL HIGHLIGHTS
________________________________________________________________

The tables on the following pages present, for each Fund, per
share income and capital changes for a share outstanding
throughout each period indicated. The information in the tables
for SHORT-TERM U.S. GOVERNMENT has been audited by Price
Waterhouse LLP, the independent accountants for the Fund, and for
U.S. GOVERNMENT, LIMITED MATURITY GOVERNMENT, MORTGAGE SECURITIES

<PAGE>

INCOME, WORLD INCOME, SHORT-TERM MULTI-MARKET, MULTI-MARKET
STRATEGY, NORTH AMERICAN GOVERNMENT INCOME, GLOBAL DOLLAR
GOVERNMENT and CORPORATE BOND has been audited by Ernst & Young
LLP, the independent auditors for each Fund. A report of Price
Waterhouse LLP or Ernst & Young LLP, as the case may be, on the
information with respect to each Fund appears in the Fund's
Statement of Additional Information. The following information
for each Fund should be read in conjunction with the financial
statements and related notes which are included in the Fund's
Statement of Additional Information.

Further information about a Fund's performance is contained
in the Fund's annual report to shareholders, which may be
obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "Literature" telephone number shown on
the cover of this Prospectus.

<PAGE>

SHORT-TERM U.S. GOVERNMENT
CLASS A
Year Ended 8/31/95 $9.67 $.42 $.05 $.47 $(.41) $0.00
Period Ended 8/31/94** 9.77 .14 (.09) .05 (.12) 0.00
Year Ended 4/30/94 10.22 .35 (.29) .06 (.42) 0.00
5/4/92+ to 4/30/93 10.00 .46 .34 .80 (.46) (.12)

CLASS B
Year Ended 8/31/95 $9.78 $.36 $.04 $.40 $(.34) $0.00
Period Ended 8/31/94** 9.88 .10 (.07) .03 (.11) 0.00
Year Ended 4/30/94 10.31 .40 (.39) .01 (.35) 0.00
5/4/92+ to 4/30/93 10.00 .38 .33 .71 (.38) (.02)

CLASS C
Year Ended 8/31/95 $9.77 $.34 $.06 $.40 $(.34) $0.00
Period Ended 8/31/94** 9.87 .10 (.07) .03 (.11) 0.00
8/2/93++ to 4/30/94 10.34 .26 (.42) (.16) (.25) 0.00

U.S. GOVERNMENT
CLASS A
Year Ended 6/30/95 $7.84 $.64 $.13) $.77 $(.65) $0.00
Year Ended 6/30/94 8.64 .65 (.80) (.15) (.65) 0.00
Year Ended 6/30/93 8.34 .69 .29 .98 (.68) 0.00
Year Ended 6/30/92 8.01 .70 .35 1.05 (.72) 0.00
Year Ended 6/30/91 8.14 .81 (.11) .70 (.83) 0.00
Year Ended 6/30/90 8.49 .86 (.38) .48 (.83) 0.00
Year Ended 6/30/89 8.51 .89 (.03) .86 (.88) 0.00
Year Ended 6/30/88 8.90 .93 (.39) .54 (.93) 0.00
Year Ended 6/30/87 9.24 .98 (.34) .64 (.98) 0.00
12/1/85+ to 6/30/86 9.45 .63 (.21) .42 (.63) 0.00

CLASS B
Year Ended 6/30/95 $7.84 $.58 $.13 $.71 $(.59) $0.00
Year Ended 6/30/94 8.64 .59 (.80) (.21) (.59) 0.00
Year Ended 6/30/93 8.34 .62 .30 .92 (.62) 0.00
9/30/91++ to 6/30/92 8.25 .49 .09 .58 (.49) 0.00

<PAGE>

CLASS C
Year Ended 6/30/95 $7.83 $.58 $.14 $.72 $(.59) $0.00
Year Ended 6/30/94 8.64 .59 (.81) (.22) (.59) 0.00
4/30/93++ to 6/30/93 8.56 .10 .08 .18 (.10) 0.00

LIMITED MATURITY GOVERNMENT
CLASS A
Six Months Ended 5/31/95
(unaudited) $9.51 $.28 $(.03) $.25 $(.27) $(.00)
Year Ended 11/30/94 9.94 .42 (.32) .10 (.48) (.01)
Year Ended 11/30/93 9.84 .57 .11 .68 (.58) 0.00
6/1/92+ to 11/30/92 10.00 .35 (.17) .18 (.34) 0.00

CLASS B
Six Months Ended 5/31/95
(unaudited) $9.52 $.24 $(.03) $(.21) $(.23) $0.00
Year Ended 11/30/94 9.94 .39 (.35) .04 (.42) (.01)
Year Ended 11/30/93 9.84 .49 .12 .61 (.51) 0.00
6/1/92+ to 11/30/92 10.00 .31 (.17) .14 (.30) 0.00

CLASS C
Six Months Ended 5/31/95
(unaudited) $9.52 $.25 $(.04) $.21 $(.23) $0.00
Year Ended 11/30/94 9.94 .37 (.33) .04 (.42) (.01)
5/3/93++ to 11/30/93 9.98 .27 (.03) .24 (.28) 0.00

MORTGAGE SECURITIES INCOME
CLASS A
Six Months Ended 6/30/95
(unaudited) $8.13 $.28 $.49 $.77 $(.30) $0.00
Year Ended 12/31/94 9.29 .57 (1.13) (.56) (.58) 0.00
Year Ended 12/31/93 9.08 .67 .23 .90 (.67) 0.00
Year Ended 12/31/92 9.21 .77 (.09) .68 (.81) 0.00
Year Ended 12/31/91 8.79 .88 .41 1.29 (.87) 0.00
Year Ended 12/31/90 8.76 .87 .03 .90 (.87) 0.00
Year Ended 12/31/89 8.81 .97 (.05) .92 (.97) 0.00
Year Ended 12/31/88 9.03 .99 (.23) .76 (.98) 0.00
Year Ended 12/31/87 9.74 1.00 (.68) .32 (1.00) (.03)
Year Ended 12/31/86 9.97 1.06 (.02) 1.04 (1.06) (.21)
Year Ended 12/31/85 9.54 1.22 .43 1.65 (1.22) 0.00

CLASS B
Six Months Ended 6/30/95
(unaudited) $8.13 $.28 $.46 $.74 $(.26) $0.00
Year Ended 12/31/94 9.29 .51 (1.14) (.63) (.51) 0.00
Year Ended 12/31/93 9.08 .61 .22 .83 (.60) 0.00
1/30/92++ to 12/31/92 9.16 .68 (.08) .60 (.68) 0.00

<PAGE>

CLASS C
Six Months Ended 6/30/95
(unaudited) $8.13 $.29 $.45 $.74 $(.26) $0.00
Year Ended 12/31/94 9.29 .51 (1.14) (.63) (.51) 0.00
5/3/93++ to 12/31/93 9.30 .40 0.00 .40 (.40) 0.00

WORLD INCOME
Six Months Ended 4/30/95
(unaudited) $1.88 $.06 $(.22) $(.16) $(.05) $0.00
Year Ended 10/31/94 1.90 .18 (.12) .06 (.05) 0.00
Year Ended 10/31/93 1.91 .22 (.16) .06 (.07) 0.00
Year Ended 10/31/92 1.98 .19 (.17) .02 (.09) 0.00
12/3/90+ to 10/31/91 2.00 .14 (.03) .11 (.13) 0.00

</TABLE>

PLEASE REFER TO THE FOOTNOTES ON PAGE 12.

<PAGE>

<TABLE>
<CAPTION>
TOTAL RATIO OF NET
DISTRIBUTIONS INVESTMENT NET ASSETS INVESTMENT
IN EXCESS TOTAL RETURN AT END OF RATIO INCOME
OF NET RETURN DIVIDENDS NET ASSET BASED ON PERIOD OF EXPENSES (LOSS) PORTFOLIO
INVESTMENT OF AND VALUE END NET ASSET (000'S TO AVERAGE TO AVERAGE TURNOVER
INCOME CAPITAL DISTRIBUTIONS OF PERIOD VALUE (B) OMITTED) NET ASSETS NET ASSETS RATE
- -------------- -------- ------------- --------- ---------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(.03) $0.00 $(.44) $ 9.70 5.14% $ 2,997 1.40%(d) 4.56% 15%
(.03)(a) 0.00 (.15)(c) 9.67 .53 2,272 1.40(d) 3.98 144
(.09)(a) 0.00 (.51)(c) 9.77 .52 2,003 1.27(d) 4.41 55
0.00 0.00 (.58)(c) 10.22 8.20 6,081 1.00*(d) 4.38* 294

$(.03) $0.00 $(.37) $ 9.81 4.32% $ 6,380 2.10%(d) 3.80% 15%
(.02)(a) 0.00 (.13)(c) 9.78 .28 6,281 2.10(d) 3.22 144
(.09)(a) 0.00 (.44)(c) 9.88 .03 7,184 2.05(d) 3.12 55
0.00 0.00 (.40)(c) 10.31 7.22 1,292 1.75*(d) 3.36* 294

$(.03) $0.00 $(.37) $ 9.80 4.33% $ 5,180 2.10%(d) 3.80% 15%
(.02)(a) 0.00 (.13)(c) 9.77 .28 7,128 2.10(d) 3.26 144
(.06)(a) 0.00 (.31)(c) 9.87 (1.56) 8,763 2.10*(d) 2.60* 55

$0.00 $0.00 $(.65) $ 7.96 10.37% $ 463,660 1.01% 8.27% 190%
0.00 0.00 (.65) 7.84 (1.93) 482,595 1.02 7.76 188
0.00 0.00 (.68) 8.64 12.23 527,968 1.10 8.04 386
0.00 0.00 (.72) 8.34 13.52 492,448 1.12 8.43 418
0.00 0.00 (.83) 8.01 8.97 491,910 1.07 10.02 402
0.00 0.00 (.83) 8.14 5.99 510,675 1.09 10.35 455
0.00 0.00 (.88) 8.49 10.87 532,525 1.11 10.70 148
0.00 0.00 (.93) 8.51 6.41 529,909 1.14 10.70 149
0.00 0.00 (.98) 8.90 7.00 496,600 1.07(d) 10.36 255
0.00 0.00 (.63) 9.24 4.53 128,870 1.01*(d) 9.30* 193

$0.00 $0.00 $(.59) $ 7.96 9.52% $ 774,097 1.72% 7.57% 190%
0.00 0.00 (.59) 7.84 (2.63) 756,282 1.72 7.04 188
0.00 .00 (.62) 8.64 11.45 552,471 1.81 7.25 386
0.00 .00 (.49) 8.34 6.95 32,227 1.80* 7.40* 418

$0.00 $0.00 $(.59) $ 7.96 9.67% $ 181,948 1.71% 7.59% 190%
0.00 0.00 (.59) 7.83 (2.75) 231,859 1.70 6.97 188
0.00 .00 (.10) 8.64 2.12 67,757 1.80* 6.00* 386

<PAGE>

$0.00 $0.00 $(.27) $ 9.49 2.64% $ 34,094 1.94%*(e) 5.53%* 197%
0.00 (.04) (.53) 9.51 1.03 43,173 1.34(e) 4.78 375
0.00 0.00 (.58) 9.94 7.02 59,215 1.54(e) 5.66 499
0.00 0.00 (.34) 9.84 1.84 24,186 1.44*(d)(e) 6.58*(d) 101

$0.00 $0.00 $(.23) $ 9.50 2.28% $ 109,749 2.66%*(e) 4.83%* 197%
0.00 (.03) (.46) 9.52 .42 136,458 2.08(e) 4.12 375
0.00 0.00 (.51) 9.94 6.27 168,157 2.26(e) 4.98 499
0.00 0.00 (.30) 9.84 1.50 149,188 2.13*(d)(e) 6.01*(d) 101

$0.00 $0.00 $(.23) $ 9.50 2.28% $92,940 2.68%*(e) 4.84%* 197%
0.00 (.03) (.46) 9.52 .42 141,838 2.04(e) 4.10 375
0.00 0.00 (.28) 9.94 2.40 228,703 1.58*(e) 3.70* 499

$0.00 $0.00 $(.30) $ 8.60 9.54% $ 535,191 1.47%* 6.86%* 158%
0.00 (.02) (.60) 8.13 (6.14) 553,889 1.29 6.77 438
(.02) 0.00 (.69) 9.29 10.14 848,069 1.00 7.20 622
0.00 0.00 (.81) 9.08 7.73 789,898 1.18 8.56 555
0.00 0.00 (.87) 9.21 15.44 544,171 1.16 9.92 439
0.00 0.00 (.87) 8.79 11.01 495,353 1.12 10.09 393
0.00 0.00 (.97) 8.76 10.98 556,077 1.13 11.03 328
0.00 0.00 (.98) 8.81 8.64 619,572 1.11 10.80 239
0.00 0.00 (1.03) 9.03 3.49 682,650 1.15 10.79 211
0.00 0.00 (1.27) 9.74 11.18 756,730 1.00 10.86 190
0.00 0.00 (1.22) 9.97 18.35 609,566 .87 12.30 164

$0.00 $0.00 $(.26) $ 8.61 9.26% $ 850,246 2.18%* 6.15%* 158%
0.00 (.02) (.53) 8.13 (6.84) 921,418 2.00 6.05 438
(.02) 0.00 (.62) 9.29 9.38 1,454,303 1.70 6.47 622
0.00 0.00 (.68) 9.08 7.81 1,153,957 1.67* 5.92* 555

$0.00 $0.00 $(.26) $ 8.61 9.26% $ 51,991 2.17%* 6.16%* 158%
0.00 (.02) (.53) 8.13 (6.84) 58,338 1.97 6.06 438
(.01) 0.00 (.41) 9.29 4.34 91,724 1.67* 5.92* 622

$0.00 $0.00 $(.05) $ 1.67 (8.60)% $ 66,180 1.90%(d) 6.39%(d) N/A
0.00 (.03) (.08) 1.88 3.27 103,310 1.70(d) 3.96(d) N/A
0.00 0.00 (.07) 1.90 3.51 149,623 1.54 (d) 5.14(d) N/A
0.00 0.00 (.09) 1.91 1.26 318,716 1.59(d) 7.21(d) N/A
0.00 0.00 (.13) 1.98 6.08 1,059,222 1.85*(d) 7.29*(d) N/A

<PAGE>

</TABLE>

PLEASE REFER TO THE FOOTNOTES ON PAGE 12.

<PAGE>

<TABLE>
<CAPTION>
NET NET
NET REALIZED AND INCREASE
ASSET NET UNREALIZED (DECREASE) DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT GAIN IN NET ASSET FROM NET FROM NET
BEGINNING INCOME (LOSS) ON VALUE FROM INVESTMENT REALIZED
FISCAL YEAR OR PERIOD OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS
- --------------------- --------- ---------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM MULTI-MARKET
CLASS A
Six Months Ended 4/30/95
(unaudited) $8.71 $.27 $(1.18) $(.91) $(.36) $0.00
Year Ended 10/31/94 9.25 .93 (.86) .07 0.00 0.00
Year Ended 10/31/93 9.25 .92 (.32) .60 (.60) 0.00
Year Ended 10/31/92 9.94 .91 (.86) .05 (.72) (.02)
Year Ended 10/31/91 9.89 .97 .06 1.03 (.97) (.01)
Year Ended 10/31/90 9.69 1.09 .19 1.28 (1.08) 0.00
5/5/89+ to 10/31/89 9.70 .53 (.01) .52 (.53) 0.00

CLASS B
Six Months Ended 4/30/95
(unaudited) $8.71 $.25 $(1.18) $(.93) $(.33) $0.00
Year Ended 10/31/94 9.25 .94 (.93) .01 0.00 0.00
Year Ended 10/31/93 9.25 .87 (.34) .53 (.53) 0.00
Year Ended 10/31/92 9.94 .84 (.86) (.02) (.65) (.02)
Year Ended 10/31/91 9.89 .89 .07 .96 (.90) (.01)
2/5/90++ to 10/31/90 9.77 .74 .12 .86 (.74) 0.00

CLASS C
Six Months Ended 4/30/95
(unaudited) $8.71 $.23 $(1.16) $(.93) $(.33) $0.00
Year Ended 10/31/94 9.25 .58 (.57) .01 0.00 0.00
5/3/93++ to 10/31/93 9.18 .28 .05 .33 (.26) 0.00

MULTI-MARKET STRATEGY
CLASS A
Six Months Ended 4/30/95
(unaudited) $8.04 $.27 $(1.22) $(.95) $(.33) $0.00
Year Ended 10/31/94 8.94 .85 (1.08) (.23) (.09) 0.00
Year Ended 10/31/93 8.85 1.02 (.26) .76 (.67) 0.00
Year Ended 10/31/92 9.91 1.00 (1.23) (.23) (.81) (.02)
5/29/91+ to 10/28/91 10.00 .42 (.09) .33 (.42) 0.00

CLASS B
Six Months Ended 4/30/95
(unaudited) $8.04 $.24 $(1.21) $(.97) $(.30) $0.00

<PAGE>

Year Ended 10/31/94 8.94 .88 (1.18) (.30) (.08) 0.00
Year Ended 10/31/93 8.85 .92 (.22) .70 (.61) 0.00
Year Ended 10/31/92 9.91 1.04 (1.34) (.30) (.74) (.02)
5/29/91+ to 10/28/91 10.00 .39 (.09) .30 (.39) 0.00

CLASS C
Six Months Ended 4/30/95
(unaudited) $8.04 $.25 $(1.23) $(.98) $(.30) $0.00
Year Ended 10/31/94 8.94 .46 (.75) (.29) (.09) 0.00
5/3/93++ to 10/31/93 8.76 .32 .16 .48 (.30) 0.00

NORTH AMERICAN GOVERNMENT INCOME
CLASS A
Six Months Ended 5/31/95
(unaudited) $ 8.13 $ .54 $(1.21) $(.67) $(.48) $0.00
Year Ended 11/30/94 10.35 1.02 (2.12) (1.10) (.91) 0.00
Year Ended 11/30/93 9.70 1.09 .66 1.75 (1.09) (.01)
3/27/92+ to 11/30/92 10.00 .69 (.31) .38 (.68) 0.00

CLASS B
Six Months Ended 5/31/95
(unaudited) $ 8.13 $ .51 $(1.21) $(.70) $(.45) $0.00
Year Ended 11/30/94 10.35 .96 (2.13) (1.17) (.84) 0.00
Year Ended 11/30/93 9.70 1.01 .67 1.68 (1.02) (.01)
3/27/92+ to 11/30/92 10.00 .64 (.31) .33 (.63) 0.00

CLASS C
Six Months Ended 5/31/95
(unaudited) $ 8.13 $ .51 $(1.21) $(.70) $(.45) $0.00
Year Ended 11/30/94 10.34 .96 (2.12) (1.16) (.84) 0.00
5/3/93++ to 11/30/93 10.04 .58 .30 .88 (.58) 0.00

GLOBAL DOLLAR GOVERNMENT
CLASS A
Year Ended 8/31/95 $ 9.14 $ .86 $(1.10) $(.24) $(.88) $0.00
2/25/94+ to 8/31/94 10.00 .45 (.86) (.41) (.45) 0.00

CLASS B
Year Ended 8/31/95 $ 9.14 $ .80 $(1.11) $(.31) $(.81) $0.00
2/25/94+ to 8/31/94 10.00 .42 (.86) (.44) (.42) 0.00

CLASS C
Year Ended 8/31/95 $ 9.14 $ .79 $(1.10) $(.31) $(.81) $0.00
2/25/94+ to 8/31/94 10.00 .42 (.86) (.44) (.42) 0.00

CORPORATE BOND
CLASS A
Year Ended 6/30/95 $12.51 $1.19 $ .36 $1.55 $(1.14) $0.00

<PAGE>

Year Ended 6/30/94 14.15 1.11 (1.36) (.25) (1.11) (.25)
Year Ended 6/30/93 12.01 1.25 2.13 3.38 (1.24) 0.00
Year Ended 6/30/92 11.21 1.06 .82 1.88 (1.08) 0.00
Year Ended 6/30/91 11.39 1.11 (.06) 1.05 (1.23) 0.00
Year Ended 6/30/90 12.15 1.24 (.86) .38 (1.14) 0.00
Year Ended 6/30/89 11.82 1.12 .32 1.44 (1.11) 0.00
Year Ended 6/30/88 12.24 1.10 (.38) .72 (1.14) 0.00
Nine Months Ended 6/30/87 12.25 .86 (.06) .80 (.81) 0.00
Year Ended 9/30/86 11.52 1.20 .73 1.93 (1.20) 0.00
Year Ended 9/30/85 10.50 1.24 1.04 2.28 (1.26) 0.00

CLASS B
Year Ended 6/30/95 $12.50 $1.11 $ .36 $1.47 $(1.05) $0.00
Year Ended 6/30/94 14.15 1.02 (1.37) (.35) (1.04) (.25)
1/8/93++ to 6/30/93 12.47 .49 1.69 2.18 (.50) 0.00

CLASS C
Year Ended 6/30/95 $12.50 $1.10 $ .38 $1.48 $(1.05) $0.00
Year Ended 6/30/94 14.15 1.02 (1.37) (.35) (1.05) (.25)
5/30/93++ to 6/30/93 13.63 .16 .53 .69 (.17) 0.00
</TABLE>

PLEASE REFER TO THE FOOTNOTES ON PAGE 12.

<PAGE>

<TABLE>
<CAPTION>
TOTAL RATIO OF NET
DISTRIBUTIONS INVESTMENT NET ASSETS INVESTMENT
IN EXCESS TOTAL RETURN AT END OF RATIO INCOME
OF NET RETURN DIVIDENDS NET ASSET BASED ON PERIOD OF EXPENSES (LOSS) PORTFOLIO
INVESTMENT OF AND VALUE END NET ASSET (000'S TO AVERAGE TO AVERAGE TURNOVER
INCOME CAPITAL DISTRIBUTIONS OF PERIOD VALUE (B) OMITTED) NET ASSETS NET ASSETS RATE
- -------------- -------- ------------- ---------- ---------- ------------ ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $0.00 $(.36) $ 7.44 (10.52)% $ 377,025 1.29%* 7.32%* 119%
0.00 (.61) (.61) 8.71 .84 593,677 1.13 7.28 109
0.00 0.00 (.60) 9.25 6.67 953,571 1.16 8.26 182
0.00 0.00 (.74) 9.25 .49 1,596,903 1.10 9.00 133
0.00 0.00 (.98) 9.94 10.91 2,199,393 1.09 9.64 146
0.00 0.00 (1.08) 9.89 13.86 1,346,035 1.18 10.81 152
0.00 0.00 (.53) 9.69 5.57 210,294 1.14* 10.83* 10

$0.00 $0.00 $(.33) $ 7.45 (10.76)% $633,287 2.00%* 6.62%* 119%
0.00 (.55) (.55) 8.71 .12 1,003,633 1.85 6.58 109
0.00 0.00 (.53) 9.25 5.91 1,742,703 1.87 7.57 182
0.00 0.00 (.67) 9.25 (.24) 2,966,071 1.81 8.28 133
0.00 0.00 (.91) 9.94 10.11 3,754,003 1.81 8.87 146
0.00 0.00 (.74) 9.89 9.07 1,950,330 1.86* 9.90* 152

$0.00 $0.00 $(.33) $ 7.45 (10.76)% $4,168 1.98%* 6.59%* 119%
0.00 (.55) (.55) 8.71 .12 8,136 1.83 6.50 109
0.00 0.00 (.26) 9.25 3.66 5,538 1.82* 7.19* 182

$0.00 $0.00 $(.33) $ 6.76 (11.83)% $ 33,998 1.59%*(f) 7.80%* 156%
0.00 (.58) (.67) 8.04 (2.64) 52,385 1.41(f) 7.17 605
0.00 0.00 (.67) 8.94 9.01 82,977 1.94(f) 9.17(g) 200
0.00 0.00 (.83) 8.85 (2.80) 141,526 2.53(f) 10.58(g) 239
0.00 0.00 (.42) 9.91 3.68 143,594 2.81*(f) 10.17*(g) 121

$0.00 $0.00 $(.30) $ 6.77 (12.09)% $ 141,783 2.30%*(f) 7.10%* 156%
0.00 (.52) (.60) 8.04 (3.35) 233,896 2.11(f) 6.44 605
0.00 0.00 (.61) 8.94 8.25 431,186 2.64(f) 8.46(g) 200
0.00 0.00 (.76) 8.85 (3.51) 701,465 3.24(f) 9.83(g) 239
0.00 0.00 (.39) 9.91 3.36 662,981 3.53*(f) 9.40*(g) 121

$0.00 $0.00 $(.30) $ 6.76 (12.22)% $856 2.30%*(f) 7.15%* 156%
0.00 (.52) (.61) 8.04 (3.34) 1,252 2.08(f) 6.10% 605%

<PAGE>

0.00 0.00 (.30) 8.94 5.54 718 2.44*(f) 7.17*(g) 200

$0.00 $0.00 $(.48) $ 6.98 (7.18)% $ 236,421 2.70%*(f) 17.21%* 60%
0.00 (.21) (1.12) 8.13 (11.32) 303,538 1.70(f) 11.22 131
0.00 0.00 (1.10) 10.35 18.99 268,233 1.61(f) 10.77 254
0.00 0.00 (.68) 9.70 3.49 61,702 2.45*(d)(f) 10.93*(d) 86

$0.00 $0.00 $(.45) $ 6.98 (7.81)% $1,157,639 3.40%*(f) 16.44%* 60%
0.00 (.21) (1.05) 8.13 (11.89) 1,639,602 2.41(f) 10.53 131
0.00 0.00 (1.03) 10.35 18.15 1,313,591 2.31(f) 10.01 254
0.00 0.00 (.63) 9.70 3.30 216,317 3.13*(d)(f) 10.16*(d) 86

$0.00 $0.00 $(.45) $ 6.98 (7.69)% $ 232,577 3.40%*(f) 16.44%* 60%
0.00 (.21) (1.05) 8.13 (11.89) 369,714 2.39(f) 10.46 131
0.00 0.00 (.58) 10.34 9.00 310,230 2.21*(f) 9.74* 254

$0.00 $0.00 $(.88) $ 8.02 (1.48)% $ 12,020 1.93% 11.25% 301%
0.00 0.00 (.45) 9.14 (3.77) 10,995 .75*(d) 9.82* 100

$0.00 $0.00 $(.81) $ 8.02 (2.40)% $ 62,406 2.64%* 10.52% 301%
0.00 0.00 (.42) 9.14 (4.17) 47,030 1.45*(d) 9.11* 100

$0.00 $0.00 $(.81) $ 8.02 (2.36)% $ 9,330 2.63%* 10.46% 301%
0.00 0.00 (.42) 9.14 (4.16) 10,404 1.45*(d) 9.05* 100

$0.00 $0.00 $(1.14) $12.92 13.26% $ 230,750 1.24% 9.70% 387%
(.03) 0.00 (1.39) 12.51 (2.58) 219,182 1.30 7.76 372
0.00 0.00 (1.24) 14.15 29.62 216,171 1.39 9.29 579
0.00 0.00 (1.08) 12.01 17.43 60,356 1.48 8.98 610
0.00 0.00 (1.23) 11.21 9.71 62,268 1.44 9.84 357
0.00 0.00 (1.14) 11.39 3.27 68,049 1.51 10.70 480
0.00 0.00 (1.11) 12.15 12.99 52,381 1.84 9.53 104
0.00 0.00 (1.14) 11.82 6.24 37,587 1.81 9.24 98
0.00 0.00 (.81) 12.24 7.32 41,072 1.27 9.17 95
0.00 0.00 (1.20) 12.25 17.19 45,178 1.08 9.80 240
0.00 0.00 (1.26) 11.52 22.66 40,631 1.15 11.00 142
0.00 0.00 (1.26) 10.50 6.44 36,435 1.18 11.88 10

$0.00 $0.00 $(1.05) $12.92 12.54% $ 241,393 1.99% 9.07% 387%
(.01) 0.00 (1.30) 12.50 (3.27) 184,129 2.00 7.03 372

<PAGE>

0.00 0.00 (50) 14.15 17.75 55,508 2.10* 7.18* 579

$0.00 $0.00 $(1.05) $12.93 12.62% $ 51,028 1.84% 8.95% 387%
0.00 0.00 (1.30) 12.50 (3.27) 50,860 1.99 6.98 372
0.00 0.00 (.17) 14.15 5.08 5,115 2.05* 5.51* 579
</TABLE>

PLEASE REFER TO THE FOOTNOTES ON PAGE 12.

<PAGE>

___________________

+ PRIOR TO JULY 22, 1993, EQUITABLE CAPITAL MANAGEMENT CORPORATION
("EQUITABLE") SERVED AS THE INVESTMENT ADVISER TO THE ALLIANCE PORTFOLIOS
(THE "TRUST"), OF WHICH SHORT-TERM U.S. GOVERNMENT IS A SERIES. ON JULY
22, 1993, ALLIANCE ACQUIRED THE BUSINESS AND SUBSTANTIALLY ALL OF THE
ASSETS OF EQUITABLE AND BECAME INVESTMENT ADVISER OF THE TRUST.
+ COMMENCEMENT OF OPERATIONS.
++ COMMENCEMENT OF DISTRIBUTION.
* ANNUALIZED.
** REFLECTS NEWLY ADOPTED FISCAL YEAR END.
(A) INCLUDES WITH RESPECT TO SHORT-TERM U.S. GOVERNMENT A RETURN OF CAPITAL
FOR THE YEAR ENDED APRIL 30, 1994 OF $(0.08) FOR CLASS A, $(0.08) FOR
CLASS B AND $(0.05) FOR CLASS C AND FOR THE PERIOD ENDED AUGUST 31, 1994
OF $(0.03) FOR CLASS A AND $(0.02) FOR CLASS B AND CLASS C.
(B) TOTAL INVESTMENT RETURN IS CALCULATED ASSUMING AN INITIAL INVESTMENT MADE
AT THE NET ASSET VALUE AT THE BEGINNING OF THE PERIOD, REINVESTMENT OF ALL
DIVIDENDS AND DISTRIBUTIONS AT THE NET ASSET VALUE DURING THE PERIOD, AND
A REDEMPTION ON THE LAST DAY OF THE PERIOD. INITIAL SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE IS NOT REFLECTED IN THE CALCULATION OF
TOTAL INVESTMENT RETURN. TOTAL INVESTMENT RETURNS CALCULATED FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(C) "TOTAL DIVIDENDS AND DISTRIBUTIONS" INCLUDES DIVIDENDS IN EXCESS OF NET
INVESTMENT INCOME AND RETURN OF CAPITAL. SHORT-TERM U.S. GOVERNMENT HAD
DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME WITH RESPECT TO CLASS A
SHARES, FOR THE YEAR ENDED APRIL 30, 1994, OF $(.01); WITH RESPECT TO
CLASS B SHARES, $(.01); AND WITH RESPECT TO CLASS C SHARES, $(.01).

(D) NET OF EXPENSES ASSUMED AND/OR WAIVED/REIMBURSED. IF SHORT-TERM U.S.
GOVERNMENT HAD BORNE ALL EXPENSES, THE EXPENSE RATIOS WOULD HAVE BEEN WITH
RESPECT TO CLASS A SHARES, 2.20% (ANNUALIZED) FOR 1993, 2.17% FOR THE YEAR
ENDED APRIL 30, 1994, 2.95% (ANNUALIZED) FOR THE PERIOD ENDED AUGUST 31,
1994, 3.71% FOR THE YEAR ENDED AUGUST 31, 1995; WITH RESPECT TO CLASS B
SHARES, 4.81% (ANNUALIZED) FOR 1993, 3.21% FOR THE YEAR ENDED APRIL 30,
1994, 3.60% (ANNUALIZED) FOR THE PERIOD ENDED AUGUST 31, 1994, 4.33% FOR
THE YEAR ENDED AUGUST 31, 1995; AND WITH RESPECT TO CLASS C SHARES, 3.10%
(ANNUALIZED) FOR THE YEAR ENDED APRIL 30, 1994, 3.64% (ANNUALIZED) FOR THE
PERIOD ENDED AUGUST 31, 1994, 4.23% FOR THE YEAR ENDED AUGUST 31, 1995. IF
U.S. GOVERNMENT HAD BORNE ALL EXPENSES, THE EXPENSE RATIOS WOULD HAVE BEEN
1.22% FOR 1986 AND 1.09% FOR 1987. IF LIMITED MATURITY GOVERNMENT HAD
BORNE ALL EXPENSES, THE EXPENSE RATIOS WOULD HAVE BEEN WITH RESPECT TO
CLASS A SHARES, 1.55% (ANNUALIZED) FOR 1992; AND WITH RESPECT TO CLASS B
SHARES, 2.28% (ANNUALIZED) FOR 1992. THE RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS WOULD HAVE BEEN WITH RESPECT TO CLASS A SHARES, 6.47%
(ANNUALIZED) FOR 1992; AND WITH RESPECT TO CLASS B SHARES, 5.86%
(ANNUALIZED) FOR 1992. IF WORLD INCOME HAD BORNE ALL EXPENSES, THE EXPENSE
RATIOS WOULD HAVE BEEN 1.87% FOR 1992, 1.92% FOR 1993, 2.08% FOR 1994, AND
3.36% (ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL 30, 1995. IF NORTH

<PAGE>

AMERICAN GOVERNMENT INCOME HAD BORNE ALL EXPENSES, THE EXPENSE RATIOS
WOULD HAVE BEEN WITH RESPECT TO CLASS A SHARES, 2.49% (ANNUALIZED) FOR
1992; AND WITH RESPECT TO CLASS B SHARES, 3.16% (ANNUALIZED) FOR 1992. IF
GLOBAL DOLLAR GOVERNMENT HAD BORNE ALL EXPENSES FOR THE PERIOD FEBRUARY
25, 1994 TO AUGUST 31, 1994, THE EXPENSE RATIOS WOULD HAVE BEEN WITH
RESPECT TO CLASS A SHARES, 1.91% (ANNUALIZED); WITH RESPECT TO CLASS B
SHARES, 2.63% (ANNUALIZED); AND WITH RESPECT TO CLASS C SHARES, 2.59%
(ANNUALIZED).
(E) INCLUDES INTEREST EXPENSES. IF LIMITED MATURITY GOVERNMENT HAD NOT BORNE
INTEREST EXPENSES, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE
BEEN WITH RESPECT TO CLASS A SHARES, 1.42% (ANNUALIZED) FOR 1992, 1.33%
FOR 1993, 1.20% FOR 1994, AND 1.29% (ANNUALIZED) FOR THE SIX MONTHS ENDED
APRIL 30, 1995; WITH RESPECT TO CLASS B SHARES, 2.10% (ANNUALIZED) FOR
1992, 2.07% FOR 1993, 1.91% FOR 1994, AND 2.00% (ANNUALIZED) FOR THE SIX
MONTHS ENDED APRIL 30, 1995; AND WITH RESPECT TO CLASS C SHARES, 1.74%
(ANNUALIZED) FOR 1993 AND 1.89% FOR 1994, 1.99% (ANNUALIZED) FOR THE SIX
MONTHS ENDED APRIL 30, 1995.
(F) INCLUDES INTEREST EXPENSES. IF MULTI-MARKET STRATEGY HAD NOT BORNE
INTEREST EXPENSES OR LOAN FEES, THE RATIO OF EXPENSES TO AVERAGE NET
ASSETS WOULD HAVE BEEN WITH RESPECT TO CLASS A SHARES, 1.33% (ANNUALIZED)
FOR 1991, 1.33% FOR 1992, 1.40% FOR 1993 AND 1.30% FOR 1994, 1.52%
(ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL 30, 1995; WITH RESPECT TO
CLASS B SHARES, 2.05% (ANNUALIZED) FOR 1991, 2.05% FOR 1992, 2.11% FOR
1993 AND 2.01% FOR 1994, 2.23% (ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL
30, 1995; AND WITH RESPECT TO CLASS C SHARES, 2.11% (ANNUALIZED) FOR 1993
AND 1.99% FOR 1994, 2.23% (ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL 30,
1995. IF NORTH AMERICAN GOVERNMENT INCOME HAD NOT BORNE INTEREST EXPENSES,
THE RATIO OF EXPENSES (NET OF INTEREST EXPENSES) TO AVERAGE NET ASSETS
WOULD HAVE BEEN WITH RESPECT TO CLASS A SHARES, 1.66% (ANNUALIZED) FOR
1992, 1.33% FOR 1993 AND 1.37% FOR 1994, 1.54% (ANNUALIZED) FOR THE SIX
MONTHS ENDED APRIL 30, 1995; WITH RESPECT TO CLASS B SHARES, 2.35%
(ANNUALIZED) FOR 1992, 2.04% FOR 1993 AND 2.07% FOR 1994, 2.25%
(ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL 30, 1995; AND WITH RESPECT TO
CLASS C SHARES, 2.04% (ANNUALIZED) FOR 1993 AND 2.06% FOR 1994, 2.25%
(ANNUALIZED) FOR THE SIX MONTHS ENDED APRIL 30, 1995.
(G) INCLUDES LOAN FEES. IF MULTI-MARKET STRATEGY HAD NOT INCURRED LOAN FEES,
THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS WOULD HAVE BEEN
WITH RESPECT TO CLASS A SHARES, 11.65% (ANNUALIZED) FOR 1991, 11.78% FOR
1992 AND 9.73% FOR 1993; WITH RESPECT TO CLASS B SHARES, 10.88%
(ANNUALIZED) FOR 1991, 11.02% FOR 1992 AND 8.99% FOR 1993; AND WITH
RESPECT TO CLASS C SHARES, 7.50% (ANNUALIZED) FOR 1993.

<PAGE>

________________________________________________________________

GLOSSARY
________________________________________________________________

The following terms are frequently used in this Prospectus.
Many of these terms are explained in greater detail under
"Description of the Funds-Additional Investment Practices" and in
Appendix A.

BONDS are fixed, floating and variable rate debt obligations.

DEBT SECURITIES are bonds, debentures, notes, bills and
repurchase agreements.

FIXED-INCOME SECURITIES are debt securities, convertible
securities and preferred stocks and include floating rate and
variable rate instruments. Fixed-income securities may be rated
(or if unrated, for purposes of the Funds' investment policies
may be determined by Alliance to be of equivalent quality to
those rated) TRIPLE-A (Aaa or AAA), HIGH QUALITY (Aa or AA or
above), HIGH GRADE (A or above) or INVESTMENT GRADE (Baa or BBB
or above) by, as the case may be, Moody's, S&P, Duff & Phelps or
Fitch, or may be lower-rated securities, as defined below. In the
case of "split-rated" fixed-income securities (i.e., securities
assigned non-equivalent credit quality ratings, such as Baa by
Moody's but BB by S&P, or, to take another example, Ba by Moody's
and BB by S&P but B by Fitch), a Fund will use the rating deemed
by Alliance to be the most appropriate under the circumstances.

LOWER-RATED SECURITIES are fixed-income securities rated Ba
and BB or below, or determined by Alliance to be of equivalent
quality and are commonly referred to as "junk bonds."

EQUITY SECURITIES are common and preferred stocks, securities
convertible into common and preferred stocks and rights and
warrants to subscribe for the purchase of common and preferred
stocks.

CONVERTIBLE SECURITIES are bonds, debentures, corporate notes
and preferred stocks that are convertible into common and
preferred stock.

U.S. GOVERNMENT SECURITIES are securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities. These securities include securities backed by
the full faith and credit of the United States, those supported
by the right of the issuer to borrow from the U.S. Treasury and

<PAGE>

those backed only by the credit of the issuing agency itself. The
first category includes U.S. TREASURY SECURITIES (which are U.S.
Treasury bills, notes and bonds) and certificates issued by GNMA
(see below). U.S. Government securities not backed by the full
faith and credit of the United States include certificates issued
by FNMA and FHLMC (see below).

MORTGAGE-RELATED SECURITIES are pools of mortgage loans that
are assembled for sale to investors (such as mutual funds) by
various governmental, government-related and private
organizations. These securities include:

ARMS, which are adjustable-rate mortgage securities, SMRS,
which are stripped mortgage-related securities, CMOS, which are
collateralized mortgage obligations, GNMA CERTIFICATES, which are
securities issued by the Government National Mortgage
Association, FNMA CERTIFICATES, which are securities issued by
the Federal National Mortgage Association, and FHLMC
CERTIFICATES, which are securities issued by the Federal Home
Loan Mortgage Corporation.

INTEREST-ONLY or IO securities are debt securities that
receive only the interest payments on an underlying debt that has
been structured to have two classes, one of which is the IO class
and another of which is the PRINCIPAL-ONLY or PO class, which
class receives only the principal payments on the underlying debt
obligation. POs are similar to, and are sometimes referred to as,
ZERO COUPON SECURITIES, which are debt securities issued without
interest coupons.

FOREIGN GOVERNMENT SECURITIES are securities issued or
guaranteed, as to payment of principal and interest, by a foreign
government or any of its political subdivisions, authorities,
agencies or instrumentalities.

SOVEREIGN DEBT OBLIGATIONS are foreign government debt
securities, loan participations between foreign governments and
financial institutions and interests in entities organized and
operated for the purpose of restructuring the investment
characteristics of foreign government securities.

WORLD BANK is the commonly used name for the International
Bank for Reconstruction and Development.

LIBOR is the London Interbank Offered Rate.

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

<PAGE>

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

DUFF & PHELPS is Duff & Phelps Credit Rating Co.

FITCH is Fitch Investors Service, Inc.

PRIME COMMERCIAL PAPER is commercial paper rated Prime-1 or
higher by Moody's, A-1 or higher by S&P, Fitch-1 by Fitch or Duff
1 by Duff & Phelps. HIGHER QUALITY COMMERCIAL PAPER is
commercial paper rated Prime-2 by Moody's, A-2 by S&P, Fitch-2 by
Fitch or Duff 2 by Duff & Phelps.

QUALIFYING BANK DEPOSITS are certificates of deposit,
bankers' acceptances and interest-bearing savings deposits of
banks having total assets of more than $1 billion and which are
members of the Federal Deposit Insurance Corporation.

RULE 144A SECURITIES are securities that may be resold
pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "SECURITIES ACT").

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

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

COMMISSION is the Securities and Exchange Commission.

________________________________________________________________

DESCRIPTION OF THE FUNDS
________________________________________________________________

Except as noted, (i) the Funds' investment objectives are
"fundamental" and cannot be changed without a shareholder vote,
and (ii) the Funds' investment policies are not fundamental and
thus can be changed without a shareholder vote. No Fund will
change a non-fundamental objective or policy without notifying
its shareholders. There is no guarantee that any Fund will
achieve its investment objective.

INVESTMENT OBJECTIVES AND POLICIES
U.S. GOVERNMENT FUNDS
The U.S. Government Funds are diversified investment companies
that have been designed to offer investors high current income
consistent with preservation of capital by investing primarily in
U.S. Government securities.

<PAGE>

ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND

Alliance Short-Term U.S. Government Fund ("Short-Term U.S.
Government") seeks high current income consistent with
preservation of capital by investing primarily in a portfolio of
U.S. Government securities. Under normal circumstances, the Fund
maintains an average dollar-weighted portfolio maturity of not
more than three years and invests at least 65% of its total
assets in U.S. Government securities and repurchase agreements
and forward commitments relating to U.S. Government securities.
The Fund's investment objective is not fundamental.

In addition to investing in U.S. Government securities, the
Fund may invest a portion of its assets in securities of non-
governmental issuers. Although these investments will be of high
quality at the time of purchase, they generally involve higher
levels of credit risk than do U.S. Government securities, as well
as the risk (present with all fixed-income securities) of
fluctuations in value as interest rates change. The Fund will not
be obligated to dispose of any security whose credit quality
falls below high quality.

The Fund may also (i) invest in certain SMRS, (ii) invest in
variable, floating and inverse floating rate instruments, (iii)
make short sales "against the box," (iv) enter into various
hedging transactions, such as interest rate swaps, caps and
floors, (v) enter into reverse repurchase agreements, (vi)
purchase and sell futures contracts for hedging purposes, (vii)
purchase and sell call and put options on futures contracts or on
securities, for hedging purposes or to earn additional income,
(viii) make secured loans of portfolio securities, (ix) enter
into repurchase agreements, and (x) purchase securities for
future delivery. The Fund may not invest more than 5% of its
total assets in securities the disposition of which is restricted
under Federal securities laws (excluding, to the extent permitted
by applicable law, Rule 144A securities). For additional
information on the use, risks and costs of these practices, see
"Additional Investment Practices."

U.S. GOVERNMENT PORTFOLIO

U.S. Government Portfolio ("U.S. Government") seeks as high a
level of current income as is consistent with safety of
principal. As a matter of fundamental policy, the Fund pursues
its objective by investing solely in U.S. Government securities
that are backed by the full faith and credit of the U.S.
Government. These include U.S. Treasury securities, including
zero coupon Treasury securities, and GNMA certificates, including

<PAGE>

certain SMRS and variable and floating rate instruments. The
average weighted maturity of the Fund's portfolio of U.S.
Government securities is expected to vary between one year or
less and 30 years. For additional information on the use, risks
and cost of these practices, see "Additional Investment
Practices." The Fund's investment objective is not fundamental.

Counsel to the Fund has advised the Fund that, in their view,
shares of the Fund are a legal investment for, among other
investors, (i) savings and loan associations and commercial banks
chartered under the laws of the United States, (ii) savings and
loan associations chartered under the laws of Arizona, Arkansas,
California, Colorado, Delaware, Florida, Illinois, Indiana,
Kansas, Louisiana, Maine, Mississippi, Nebraska, Nevada, New
Hampshire, New Jersey, New Mexico, North Carolina, Ohio,
Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah and
Washington, (iii) credit unions chartered under the laws of
California, Florida*, Kentucky, Maine, Maryland*, Minnesota,
Nevada, New York, Ohio*, Pennsylvania*, Rhode Island, Tennessee,
Utah and West Virginia, and (iv) commercial banks chartered under
the laws of Alabama, Alaska, Arizona, California, Colorado,
Delaware, Florida, Hawaii*, Illinois, Indiana, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Carolina*, North Dakota, Ohio, Oklahoma,
Pennsylvania, Rhode Island, Tennessee, Texas, Vermont,
Washington, West Virginia and Wyoming. Institutions in the
asterisked(*) states should obtain prior state regulatory
approval before investing in shares of the Fund. In addition, the
Fund believes that it is currently a legal investment for savings
and loan associations, credit unions and commercial banks
chartered under the laws of certain other states.

ALLIANCE LIMITED MATURITY GOVERNMENT FUND

Alliance Limited Maturity Government Fund, Inc. ("Limited
Maturity Government") seeks the highest level of current income,
consistent with low volatility of net asset value. As a matter
of fundamental policy, the Fund normally has at least 65% of the
value of its total assets invested in U.S. Government securities,
including mortgage-related securities, and repurchase agreements
relating to U.S. Government securities. For a description of
these securities, see "Additional Investment Practices".

<PAGE>

on securities of different maturities and the expected effect of
future changes in interest rates on the market value of the
Fund's portfolio. At all times, however, each security held by
the Fund has either a final maturity of not more than 10 years or
a duration 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 debt
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.

The Fund believes that because of the nature of its assets,
it is not exposed to any material risk of loss as a result of
default on its portfolio securities. The Fund is, however,
exposed to the risk that the prices of such securities will
fluctuate, in some cases significantly, as interest rates change.

The Fund may invest up to 35% of its total assets in (i) high
quality asset-backed securities, including mortgage-related
securities that are not U.S. Government securities, (ii) Treasury
securities issued by private corporate issuers,
(iii) certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of domestic and foreign banks
having total assets of more than $1 billion, (iv) higher quality
commercial paper or, if not rated, issued by companies that have
outstanding high quality debt issues and (v) high quality debt
securities of corporate issuers.

The Fund may also (i) enter into futures contracts and
purchase and write options on futures contracts, (ii) enter into
forward commitments for the purchase or sale of securities, (iii)
enter into interest rate swaps, caps and floors, (iv) invest in
Eurodollar instruments, (v) purchase and write put and call
options on foreign currencies, (vi) invest in variable, floating
and inverse floating rate instruments, (vii) enter into
repurchase agreements pertaining to the types of securities in
which it invests, (viii) use reverse repurchase agreements and
dollar rolls and (ix) make secured loans of its portfolio
securities. For additional information on the use, risks and
costs of these investment practices, See "Additional Investment
Practices"

<PAGE>

MORTGAGE FUND

ALLIANCE MORTGAGE SECURITIES INCOME FUND

Alliance Mortgage Securities Income Fund, Inc. ("Mortgage
Securities Income") is a diversified investment company that
seeks a high level of current income to the extent consistent
with prudent investment risk. The Fund invests primarily in a
diversified portfolio of mortgage-related securities, including
CMOs, and, as a matter of fundamental policy, maintains at least
65% of its total assets in mortgage-related securities.

The Fund expects that governmental, government-related or
private entities may create mortgage loan pools offering pass-
through investments in addition to those described in this
Prospectus. The mortgages underlying these securities may be
instruments whose principal or interest payments may vary or
whose terms to maturity may differ from customary long-term
fixed-rate mortgages. As new types of mortgage-related securities
are developed and offered to investors, the Fund will consider
making investments in such new types of securities. The Fund may
invest up to 20% of its total assets in lower-rated mortgage-
related securities. See "Risk Considerations-Securities Ratings"
and "-Investment in Lower-Rated Fixed-Income Securities." The
average weighted maturity of the Fund's portfolio of fixed-income
securities is expected to vary between two and ten years.

The Fund may invest up to 35% of the value of its total
assets in (i) U.S. Government securities, (ii) qualifying bank
deposits, (iii) prime commercial paper or, if not rated, issued
by companies which have an outstanding high quality debt issue,
(iv) high grade debt securities secured by mortgages on
commercial real estate or residential rental properties, and (v)
high grade asset-backed securities.

The Fund may also (i) invest in repurchase agreements
pertaining to the types of securities in which it invests, (ii)
enter into forward commitments for the purchase or sale of
securities, (iii) purchase put and call options written by others
and write covered put and call options on the types of securities
in which the Fund may invest for hedging purposes, (iv) enter
into interest rate swaps, caps and floors, (v) enter into
interest rate futures contracts, (vi) invest in variable floating
and inverse floating rate instruments, and (vii) lend portfolio
securities. The Fund will not invest in illiquid securities if,
as a result, more than 10% of its total assets would be illiquid.
For additional information on the use, risk and costs of these
practices, see "Additional Investment Practices."

<PAGE>

MULTI-MARKET FUNDS

The Multi-Market Funds are non-diversified investment
companies that have been designed to offer investors a higher
yield than a money market fund and less fluctuation in net asset
value than a longer-term bond fund.

ALLIANCE WORLD INCOME TRUST
ALLIANCE SHORT-TERM MULTI-MARKET TRUST
ALLIANCE MULTI-MARKET STRATEGY TRUST

Alliance World Income Trust, Inc. ("World Income"), Alliance
Short-Term Multi- Market Trust, Inc. ("Short-Term Multi-Market")
and Alliance Multi-Market Strategy Trust, Inc. ("Multi-Market
Strategy") each seek the highest level of current income,
consistent with what Alliance considers to be prudent investment
risk, that is available from a portfolio of high quality debt
securities having remaining maturities of not more than, with
respect to WORLD INCOME, one year, with respect to SHORT-TERM
MULTI-MARKET, three years, and with respect to MULTI-MARKET
STRATEGY, five years. Each Fund seeks high current yields by
investing in a portfolio of debt securities denominated in the
U.S. Dollar and selected foreign currencies. The Multi-Market
Funds seek investment opportunities in foreign, as well as
domestic, securities markets. WORLD INCOME, which is not a money
market fund, will maintain at least 35% of its net assets in U.S.
Dollar-denominated securities. SHORT-TERM MULTI-MARKET will
normally maintain a substantial portion of its assets in debt
securities denominated in foreign currencies but will invest at
least 25% of its net assets in U.S. Dollar-denominated
securities. MULTI-MARKET STRATEGY normally expects to maintain at
least 70% of its assets in debt securities denominated in foreign
currencies.

In pursuing their investment objectives, the Multi-Market
Funds seek to minimize credit risk and fluctuations in net asset
value by investing only in short-term debt securities. Normally,
a high proportion of these Funds' portfolios consists of money
market instruments. Alliance actively manages the Multi-Market
Funds' portfolios in accordance with a multi-market investment
strategy, allocating a Fund's investments among securities
denominated in the U.S. Dollar and the currencies of a number of
foreign countries and, within each such country, among different
types of debt securities. Alliance adjusts each Multi-Market
Fund's exposure to each currency such that the percentage of
assets invested in securities of a particular country or
denominated in a particular currency varies in accordance with

<PAGE>

Alliance's assessment of the relative yield and appreciation
potential of such securities and the relative strength of a
country's currency. Fundamental economic strength, credit quality
and interest rate trends are the principal factors considered by
Alliance in determining whether to increase or decrease the
emphasis placed upon a particular type of security or industry
sector within the Fund's investment portfolio. None of the Multi-
Market Funds invests more than 25% of its net assets in debt
securities denominated in a single currency other than the U.S.
Dollar.

The returns available from short-term foreign currency-
denominated debt instruments can be adversely affected by changes
in exchange rates. Alliance believes that the use of foreign
currency hedging techniques, including "cross-hedges" (see
"Additional Investment Practices-Forward Foreign Currency
Exchange Contracts"), can help protect against declines in the
U.S. Dollar value of income available for distribution to
shareholders and declines in the net asset value of a Fund's
shares resulting from adverse changes in currency exchange rates.
For example, the return available from securities denominated in
a particular foreign currency would diminish in the event the
value of the U.S. Dollar increased against such currency. Such a
decline could be partially or completely offset by an increase in
value of a cross-hedge involving a forward exchange contract to
sell a different foreign currency, where such contract is
available on terms more advantageous to a Fund than a contract to
sell the currency in which the position being hedged is
denominated. It is Alliance's belief that cross-hedges can
therefore provide significant protection of net asset value in
the event of a general rise in the U.S. Dollar against foreign
currencies. However, a cross-hedge cannot protect against
exchange rate risks perfectly, and if Alliance is incorrect in
its judgment of future exchange rate relationships, a Fund could
be in a less advantageous position than if such a hedge had not
been established.

Each Multi-Market Fund invests in debt securities denominated
in the currencies of countries whose governments are considered
stable by Alliance. In addition to the U.S. Dollar, such
currencies include, among others, the Australian Dollar, Austrian
Schilling, British Pound Sterling, Canadian Dollar, Danish Krone,
Dutch Guilder, European Currency Unit ("ECU"), French Franc,
Irish Pound, Italian Lira, Japanese Yen, Mexican Peso, New
Zealand Dollar, Norwegian Krone, Spanish Peseta, Swedish Krona,
Swiss Franc and German Mark.

<PAGE>

An issuer of debt securities purchased by a Multi-Market Fund
may be domiciled in a country other than the country in whose
currency the instrument is denominated. In addition, the Funds
may purchase debt securities (sometimes referred to as "linked"
securities) that are denominated in one currency while the
principal amounts of, and value of interest payments on, such
securities are determined with reference to another currency. In
this regard, as of the date of this Prospectus each Fund has
invested in U.S. Dollar denominated securities issued by Mexican
issuers and/or Peso-linked securities. The value of these
investments may fluctuate inversely in correlation with changes
in the Peso-Dollar exchange rate and with the general level of
interest rates in Mexico. For a general description of Mexico,
see Appendix B and each Multi-Market Fund's Statement of
Additional Information.

Each Multi-Market Fund may invest in debt securities
denominated in the ECU, which is a "basket" consisting of
specified amounts of the currencies of certain of the member
states of the European Union, a twelve-nation organization
engaged in cooperative economic activities. The specific amounts
of currencies comprising the ECU may be adjusted by the Council
of Ministers of the European Union to reflect changes in relative
values of the underlying currencies.

Each Multi-Market Fund may invest in debt securities issued
by supranational organizations including the World Bank, which
was chartered to finance development projects in developing
member countries; the European Union; the European Coal and Steel
Community, which is an economic union of various European
nations' steel and coal industries; and the Asian Development
Bank, which is an international development bank established to
lend funds, promote investment and provide technical assistance
to member nations in the Asian and Pacific regions.

Each Multi-Market Fund seeks to minimize investment risk by
limiting its portfolio investments to debt securities of high
quality, and WORLD INCOME will invest 65% (and normally
substantially all) of its total assets in high quality income-
producing debt securities. Accordingly, the Multi-Market Funds'
portfolio securities will consist of (i) U.S. Government
securities, (ii) high quality foreign government securities,
(iii) obligations issued by supranational entities and corporate
debt securities having a triple-A rating, with respect to WORLD
INCOME, or a high quality rating, with respect to SHORT-TERM
MULTI-MARKET and MULTI-MARKET STRATEGY, (iv) certificates of
deposit and bankers' acceptances issued or guaranteed by, or time
deposits maintained at, banks (including foreign branches of

<PAGE>

foreign banks) having total assets of more than $1 billion, with
respect to WORLD INCOME, or $500 million, with respect to SHORT-
TERM MULTI-MARKET and MULTI-MARKET STRATEGY, and determined by
Alliance to be of high quality, and (v) prime commercial paper
or, if not rated, determined by Alliance to be of equivalent
quality and issued by U.S. or foreign companies having
outstanding: in the case of WORLD INCOME, triple-A rated debt
securities; in the case of MULTI-MARKET STRATEGY, high quality
debt securities; and in the case of SHORT-TERM MULTI-MARKET, high
grade debt securities.

As a matter of fundamental policy, each Multi-Market Fund
concentrates at least 25% of its total assets in debt instruments
issued by domestic and foreign companies engaged in the banking
industry, including bank holding companies. Such investments may
include certificates of deposit, time deposits, bankers'
acceptances, and obligations issued by bank holding companies, as
well as repurchase agreements entered into with banks (as
distinct from non-banks) in accordance with the policies set
forth with respect to the Funds in "Additional Investment
Practices-Repurchase Agreements." See "Risk Considerations-
Investment in the Banking Industry."

Each Multi-Market Fund may also (i) invest in indexed
commercial paper, (ii) enter into futures contracts and purchase
and write options on futures contracts, (iii) purchase and write
put and call options on foreign currencies, (iv) purchase or sell
forward foreign currency exchange contracts, (v) with respect to
SHORT-TERM MULTI-MARKET and MULTI-MARKET STRATEGY, enter into
interest rate swaps, caps and floors, (vi) invest in variable,
floating and inverse floating rate instruments, (vii) make
secured loans of its portfolio securities, and (viii) enter into
repurchase agreements. A Multi-Market Fund will not invest in
illiquid securities if as a result more than 10% of its assets
would be so invested. For additional information on the use,
risks and costs of these practices, see "Additional Investment
Practices." MULTI-MARKET STRATEGY maintains borrowings of
approximately 25% of its total assets less liabilities (other
than the amount borrowed). See "Risk Considerations-Effects of
Borrowing."

GLOBAL BOND FUNDS

The Global Bond Funds are non-diversified investment
companies that have been designed to offer investors a high level
of current income through investments primarily in foreign
government securities.

<PAGE>

ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST

Alliance North American Government Income Trust, Inc. ("North
American Government Income") seeks the highest level of current
income, consistent with what Alliance considers to be prudent
investment risk, that is available from a portfolio of debt
securities issued or guaranteed by the United States, Canada and
Mexico, their political subdivisions (including Canadian
provinces but excluding states of the United States), agencies,
instrumentalities or authorities ("Government securities"). The
Fund invests in investment grade securities denominated in the
U.S. Dollar, the Canadian Dollar and the Mexican Peso and expects
to maintain at least 25% of its assets in securities denominated
in the U.S. Dollar. In addition, the Fund may invest up to 25% of
its total assets in debt securities issued by governmental
entities of Argentina ("Argentine Government securities"). The
Fund expects that it will not retain a debt security which is
down-graded below BBB or Baa, or, if unrated, determined by
Alliance to have undergone similar credit quality deterioration,
subsequent to purchase by the Fund. There may be circumstances,
however, such as the downgrading to below investment grade of all
of the securities of a governmental issuer in one of the
countries in which the Fund has substantial investments, under
which the Fund, after considering all the circumstances, would
conclude that it is in the best interests of the shareholders to
retain its holdings in securities of that issuer. The average
weighted maturity of the Fund's portfolio of fixed-income
securities is expected to vary between one year or less and 30
years.

Alliance believes that the increasingly integrated economic
relationship among the United States, Canada and Mexico,
characterized by the reduction and projected elimination of most
barriers to free trade among the three nations and the growing
coordination of their fiscal and monetary policies, will over the
long term benefit the economic performance of all three countries
and promote greater correlation of currency fluctuation among the
U.S. and Canadian Dollars and the Mexican Peso. See, however,
Appendix B and the Fund's Statement of Additional Information
with respect to the current economic crisis and Peso devaluation
in Mexico.

Alliance will actively manage the Fund's assets in relation
to market conditions and general economic conditions and adjust
the Fund's investments in an effort to best enable the Fund to
achieve its investment objective. Thus, the percentage of the
Fund's assets invested in a particular country or denominated in
a particular currency will vary in accordance with Alliance's

<PAGE>

assessment of the relative yield and appreciation potential of
such securities and the relationship of the country's currency to
the U.S. Dollar. The Fund invests at least, and normally
substantially more than, 65% of its total assets in Government
securities. To the extent that its assets are not invested in
Government securities, however, the Fund may invest the balance
of its total assets in investment grade debt securities issued by
the governments of countries located in Central and South America
or any of their political subdivisions, agencies,
instrumentalities or authorities, provided that such securities
are denominated in their local currencies. The Fund will not
invest more than 10% of its total assets in debt securities
issued by the governmental entities of any one such country,
except that the Fund may invest up to 25% of its total assets in
Argentine Government securities. The Fund will normally invest at
least 65% of its total assets in income-producing securities. For
a general description of Canada, Mexico and Argentina, see
Appendix B and the Fund's Statement of Additional Information.

Canadian Government securities include the sovereign debt of
Canada or any of its provinces and Government of Canada bonds and
Government of Canada Treasury bills. Canada Treasury bills are
debt obligations with maturities of less than one year. A new
issue of Government of Canada bonds frequently consists of
several different bonds with maturities ranging from one to 25
years.

All Canadian provinces have outstanding bond issues and
several provinces also guarantee bond issues of provincial
authorities, agents and Crown corporations. Each new issue yield
is based upon a spread from an outstanding Government of Canada
issue of comparable term and coupon. Many Canadian
municipalities, municipal financial authorities and Crown
corporations raise funds through the bond market in order to
finance capital expenditures. Unlike U.S. municipal securities,
which have special tax status, Canadian municipal securities have
the same tax status as other Canadian Government securities and
trade similarly to such securities. The Canadian municipal market
may be less liquid than the provincial bond market.

Canadian Government securities in which the Fund may invest
include a modified pass-through vehicle issued pursuant to the
program established under the National Housing Act of Canada.
Certificates issued pursuant to this program benefit from the
guarantee of the Canada Mortgage and Housing Corporation, a
federal Crown corporation that is (except for certain limited
purposes) an agency of the Government of Canada whose guarantee
is an unconditional obligation of the Government of Canada in

<PAGE>

most circumstances (similar to that of GNMA in the United
States).

Mexican Government securities denominated and payable in the
Mexican Peso include (i) Cetes, which are book-entry securities
sold directly by the Mexican Government on a discount basis and
with maturities that range from seven to 364 days, (ii) Bonds,
which are long-term development bonds issued directly by the
Mexican Government with a minimum term of 364 days, and (iii)
Ajustabonos, which are adjustable-rate bonds with a minimum
three-year term issued directly by the Mexican Government with
the face amount adjusted each quarter by the quarterly inflation
rate.

The Fund may invest up to 25% of its total assets in
Argentine Government securities that are denominated and payable
in the Argentine Peso. Argentine Government securities include
(i) Bono de Inversion y Crecimiento ("BIC"), which are investment
and growth bonds issued directly by the Argentine Government with
maturities of up to ten years, (ii) Bono de Consolidacion
Economica ("BOCON"), which are economic consolidation bonds
issued directly by the Argentine Government with maturities of up
to ten years and (iii) Bono de Credito a la Exportacion
("BOCREX"), which are export credit bonds issued directly by the
Argentine government with maturities of up to four years. To
date, Argentine Government securities are not rated by either
S&P, Moody's, Duff & Phelps or Fitch. Alliance, however,
believes, that there are Argentine Government securities that are
of investment grade quality.

The fund may also (i) enter into futures contracts and
purchase and write options on futures contracts for hedging
purposes, (ii) purchase and write put and call options on foreign
currencies, (iii) purchase or sell forward foreign currency
exchange contracts, (iv) write covered put and call options and
purchase put and call options on U.S. Government and foreign
government securities traded on U.S. and foreign securities
exchanges, and write put and call options for cross-hedging
purposes, (v) enter into interest rate swaps, caps and floors,
(vi) enter into forward commitments for the purchase or sale of
securities, (vii) invest in variable, floating and inverse
floating rate instruments, (viii) make secured loans of its
portfolio securities, and (ix) enter into repurchase agreements.
The Fund will not invest in illiquid securities if as a result
10% of its net assets would be so invested. For additional
information on the use, risks and costs of these practice, see
"Additional Investment Practices." The Fund also maintains
borrowings of approximately one-third of the Fund's total assets

<PAGE>

less liabilities (other than the amount borrowed). See "Risk
Considerations-Effects of Borrowing."

ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND

Alliance Global Dollar Government Fund, Inc. ("Global Dollar
Government") seeks primarily a high level of current income, and
secondarily capital appreciation. In seeking to achieve these
objectives, the Fund invests at least 65% of its total assets in
sovereign debt obligations. The Fund's investments in sovereign
debt obligations will emphasize obligations of a type customarily
referred to as "Brady Bonds" that are issued as part of debt
restructurings and that are collateralized in full as to
principal due at maturity by zero coupon U.S. Government
securities ("collateralized Brady Bonds"). See "Additional
Investment Practices-Brady Bonds." The Fund may also invest up to
35% of its total assets in U.S. and non-U.S. corporate fixed-
income securities. See "Risk Considerations-U.S. Corporate Fixed-
Income Securities." The Fund will limit its investments in
sovereign debt obligations and U.S. and non-U.S. corporate fixed-
income securities to U.S. Dollar-denominated securities. Alliance
expects that, based upon current market conditions, the Fund's
portfolio of U.S. fixed-income securities will have an average
maturity range of approximately nine to 15 years and the Fund's
portfolio of non-U.S. fixed-income securities will have an
average maturity range of approximately 15 to 25 years. Alliance
anticipates that the Fund's portfolio of sovereign debt
obligations will have a longer average maturity.

Substantially all of the Fund's assets will be invested in
lower-rated securities, which may include securities having the
lowest rating for non-subordinated debt instruments (i.e., rated
C by Moody's or CCC or lower by S&P, Duff & Phelps and Fitch) and
unrated securities of comparable investment quality. These
securities are considered to have extremely poor prospects of
ever attaining any real investment standing, to have a current
identifiable vulnerability to default, to be unlikely to have the
capacity to pay interest and repay principal when due in the
event of adverse business, financial or economic conditions,
and/or to be in default or not current in the payment of interest
or principal. For a description of bond ratings, see Appendix A.

The Fund may also invest in investment grade securities.
Unrated securities will be considered for investment by the Fund
when Alliance believes that the financial condition of the
issuers of such obligations and the protection afforded by the
terms of the obligations themselves limit the risk to the Fund to
a degree comparable to that of rated securities which are

<PAGE>

consistent with the Fund's investment objectives and policies. As
of August 31, 1995, the percentages of the Fund's assets invested
in securities rated (or considered by Alliance to be of
equivalent quality to securities rated) in particular rating
categories were 3% in A and above 57% in Ba or BB, 34% in B, 4%
in Caa or CCC, and 2% in non-rated. See "Risk Considerations-
Securities Ratings," "-Investment in Fixed-Income Securities
Rated Baa and BBB," "-Investment in Lower-Rated Fixed-Income
Securities" and Appendix A.

With respect to its investments in sovereign debt obligations
and non-U.S. corporate fixed-income securities, the Fund will
emphasize investments in countries that are considered at the
time of purchase to be emerging or developing countries by the
World Bank. A substantial part of the Fund's initial investment
focus is expected to be in securities or obligations of
Argentina, Brazil, Mexico, Morocco, the Philippines and Venezuela
because these countries are now, or are expected by Alliance at a
future date to be, the principal participants in debt
restructuring programs (including, in the case of Argentina,
Mexico, the Philippines and Venezuela, issuers of currently
outstanding Brady Bonds) that, in Alliance's opinion, will
provide the most attractive investment opportunities for the
Fund. See Appendix A to the Fund's Statement of Additional
Information for information about those six countries. Alliance
anticipates that other countries that will provide initial
investment opportunities for the Fund include, among others,
Bolivia, Costa Rica, the Dominican Republic, Ecuador, Jordan,
Nigeria, Panama, Peru, Poland, Thailand, Turkey and Uruguay. See
"Additional Investment Practices-Brady Bonds."

The Fund may invest up to 30% of its total assets in the
sovereign debt obligations and corporate fixed-income securities
of issuers in any one of Argentina, Brazil, Mexico, Morocco, the
Philippines or Venezuela, each of which is an emerging market
country, and the Fund will limit investments in the sovereign
debt obligations of each such country (or of any other single
foreign country) to less than 25% of its total assets. The Fund
expects that it will not invest more than 10% of its total assets
in the sovereign debt obligations and corporate fixed-income
securities of issuers in any other single foreign country and is
not required to invest any minimum amount of its assets in the
securities or obligations of issuers located in any particular
country.

A substantial portion of the Fund's investments will be in
(i) securities which were initially issued at discounts from
their face values ("Discount Obligations") and (ii) securities

<PAGE>

purchased by the Fund at a price less than their stated face
amount or, in the case of Discount Obligations, at a price less
than their issue price plus the portion of "original issue
discount" previously accrued thereon, i.e., purchased at a
"market discount."

The Fund may also (i) invest in structured securities, (ii)
invest in fixed and floating rate loans that are arranged through
private negotiations between an issuer of sovereign debt
obligations and one or more financial institutions and in
participations in and assignments of these types of loans, (iii)
invest in other investment companies, (iv) invest in warrants,
(v) enter into interest rate swaps, caps and floors, (vi) enter
into forward commitments for the purchase or sale of securities,
(vii) make secured loans of its portfolio securities, (viii)
enter into repurchase agreements pertaining to the types of
securities in which it invests, (ix) use reverse repurchase
agreements and dollar rolls, (x) enter into standby commitment
agreements, (xi) make short sales of securities or maintain a
short position, (xii) write put and call options on securities of
the types in which it is permitted to invest and write call
options for cross-hedging purposes, (xiii) purchase and sell
exchange-traded options on any securities index composed of the
types of securities in which it may invest, and (xiv) invest in
variable, floating and inverse floating rate instruments. The
Fund may also at any time, with respect to up to 35% of its total
assets, temporarily invest funds awaiting reinvestment or held
for reserves for dividends and other distributions to
shareholders in U.S. Dollar-denominated money market instruments.
For additional information on the use, risks and costs of these
practices, see "Additional Investment Practices." While the Fund
does not currently intend to do so, it reserves the right to
borrow an amount not to exceed one-third of the Fund's assets
less liabilities (other than the amount borrowed). See "Risk
Considerations-Effects of Borrowing."

CORPORATE BOND FUND
CORPORATE BOND PORTFOLIO

Corporate Bond Portfolio ("Corporate Bond") is a diversified
investment company that seeks primarily to maximize income over
the long term consistent with providing reasonable safety in the
value of each shareholder's investment, and secondarily to
increase its capital through appreciation of its investments in
order to preserve and, if possible, increase the purchasing power
of each shareholder's investment. In pursuing these objectives,
the Fund's policy is to invest in readily marketable securities
which give promise of relatively attractive yields, but which do

<PAGE>

not involve substantial risk of loss of capital. The Fund follows
a policy of maintaining at least 65% of its net assets invested
in debt securities. Such objectives and policies cannot be
changed without the approval of the shareholders. Although the
Fund also follows a policy of maintaining at least 65% of its
total assets invested in corporate bonds, it is permitted to
invest in securities of non-corporate issuers.

There is no minimum rating requirement applicable to the
Fund's investments in fixed-income securities, except the Fund
expects that it will not retain a security that is downgraded
below B, or if unrated, determined by Alliance to have undergone
similar credit quality deterioration subsequent to purchase.
Currently, the Fund believes its objectives and policies may best
be implemented by investing at least 65% of its total assets in
fixed-income securities considered investment grade or higher.
The remainder of the Fund's assets may be invested in lower-rated
fixed-income securities. See "Risk Considerations-Securities
Ratings," "-Investment in Fixed-Income Securities Rated Baa and
BBB," "-Investment in Lower-Rated Fixed-Income Securities" and
Appendix A. During the fiscal year ended June 30, 1995, on a
weighted average basis, the percentages of the Fund's assets
invested in securities rated (or considered by Alliance to be of
equivalent quality to securities rated) in particular rating
categories were 23% in A and above, 44% in Baa or BBB, 25% in Ba
or BB, and 8% in B. The Fund did not invest in securities rated
below B by each of Moody's, S&P, Duff & Phelps and Fitch or, if
not rated, considered by Alliance to be of equivalent quality to
securities so rated.

The Fund has complete flexibility as to the types of
securities in which it will invest and the relative proportions
thereof, and the Fund plans to vary the proportions of its
holdings of long-and short-term fixed-income securities and of
equity securities in order to reflect its assessment of
prospective cyclical changes even if such action may adversely
affect current income. However, substantially all of the Fund's
investments will be income producing. The average weighted
maturity of the Fund's portfolio of fixed-income securities is
expected to vary between one year or less and 30 years.

The Fund may invest up to 50% of the value of its total
assets in foreign debt securities which will consist primarily of
corporate fixed-income securities and sovereign debt obligations.
Not more than 15% of the Fund's total assets may be invested in
these other sovereign debt obligations, which may be lower rated
and considered to be predominantly speculative as regards the
issuer's capacity to pay interest and repay principal.

<PAGE>

ADDITIONAL INVESTMENT PRACTICES

Some or all of the Funds may engage in the following
investment practices to the extent described in this Prospectus.
See the Statement of Additional Information of each Fund for a
further discussion of the uses, risks and costs of engaging in
these practices.

DERIVATIVES. The Funds may use derivatives in furtherance of
their investment objectives. Derivatives are financial contracts
whose value depends on, or is derived from, the value of an
underlying asset, reference rate or index. These assets, rates,
and indices may include bonds, stocks, mortgages, commodities,
interest rates, currency exchange rates, bond indices and stock
indices. Derivatives can be used to earn income or protect
against risk, or both. For example, one party with unwanted risk
may agree to pass that risk to another party who is willing to
accept the risk, the second party being motivated, for example,
by the desire either to earn income in the form of a fee or
premium from the first party, or to reduce its own unwanted risk
by attempting to pass all or part of that risk to the first
party.

Derivatives can be used by investors such as the Funds to
earn income and enhance returns, to hedge or adjust the risk
profile of a portfolio, and either in place of more traditional
direct investments or to obtain exposure to otherwise
inaccessible markets. Each of the Funds is permitted to use
derivatives for one or more of these purposes, although most of
the Funds generally use derivatives primarily as direct

<PAGE>

investments in order to enhance yields and broaden portfolio
diversification. Each of these uses entails greater risk than if
derivatives were used solely for hedging purposes. Derivatives
are a valuable tool which, when used properly, can provide
significant benefit to Fund shareholders. Alliance is not an
aggressive user of derivatives with respect to any of the Funds.
However, a Fund may take a significant position in those
derivatives that are within its investment policies if, in
Alliance's judgement, this represents the most effective response
to current or anticipated market conditions. The MULTI-MARKET
FUNDS in particular generally make extensive use of carefully
selected forwards and other derivatives to achieve the currency
hedging that is an integral part of their investment strategy.
Alliance's use of derivatives is subject to continuous risk
assessment and control from the standpoint of each Fund's
investment objectives and policies.

Derivatives may be (i) standardized, exchange-traded
contracts or (ii) customized, privately negotiated contracts.
Exchange-traded derivatives tend to be more liquid and subject to
less credit risk than those that are privately negotiated.

There are four principal types of derivative instruments-
options, futures, forwards and swaps-from which virtually any
type of derivative transaction can be created.

. OPTIONS-An option, which may be standardized and exchange-
traded, or customized and privately negotiated, is an agreement
that, for a premium payment or fee, gives the option holder (the
buyer) the right but not the obligation to buy or sell the
underlying asset (or settle for cash an amount based on an
underlying asset, rate or index) at a specified price (the
exercise price) during a period of time or on a specified date. A
call option entitles the holder to purchase, while a put option
entitles the holder to sell, the underlying asset (or settle for
cash an amount based on an underlying asset, rate or index).
Likewise, when an option is exercised the writer of the option
would be obligated to sell (in the case of a call option) or to
purchase (in the case of a put option) the underlying asset (or
settle for cash an amount based on an underlying asset, rate or
index).

. FUTURES-A futures contract is an agreement that obligates
the buyer to buy and the seller to sell a specified quantity of
an underlying asset (or settle for cash the value of a contract
based on an underlying asset, rate or index) at a specific price
on the contract maturity date. Futures contracts are
standardized, exchange-traded instruments and are fungible (i.e.,

<PAGE>

considered to be perfect substitutes for each other). This
fungibility allows futures contracts to be readily offset or
cancelled through the acquisition of equal but opposite
positions, which is the primary method in which futures contracts
are liquidated. A cash-settled futures contract does not require
physical delivery of the underlying asset but instead is settled
for cash equal to the difference between the values of the
contract on the date it is entered into and its maturity date.

. FORWARDS-A forward contract is an obligation by one party
to buy, and the other party to sell, a specific quantity of an
underlying commodity or other tangible asset for an agreed upon
price at a future date. Forward contracts are customized,
privately negotiated agreements designed to satisfy the
objectives of each party. A forward contract usually results in
the delivery of the underlying asset upon maturity of the
contract in return for the agreed upon payment.

. SWAPS-A swap is a customized, privately negotiated
agreement that obligates two parties to exchange a series of cash
flows at specified intervals (payment dates) based upon or
calculated by reference to changes in specified prices or rates
(interest rates in the case of interest rate swaps, currency
exchange rates in the case of currency swaps) for a specified
amount of an underlying asset (the "notional" principal amount).
The payment flows are netted against each other, with the
difference being paid by one party to the other. Except for
currency swaps, the notional principal amount is used solely to
calculate the payment streams but is not exchanged. With respect
to currency swaps, actual principal amounts of currencies may be
exchanged by the counterparties at the initiation, and again upon
the termination, of the transaction.

Debt instruments that incorporate one or more of these
building blocks for the purpose of determining the principal
amount of and/or rate of interest payable on the debt instruments
are often referred to as "structured securities." An example of
this type of structured security is indexed commercial paper. The
term is also used to describe certain securities issued in
connection with the restructuring of certain foreign obligations.
See "Indexed Commercial Paper" and "Structured Securities" below.
The term "derivative" is also sometimes used to describe
securities involving rights to a portion of the cash flows from
an underlying pool of mortgages or other assets from which
payments are passed through to the owner of, or that
collateralize, the securities. These securities are described
below under "Mortgage-Related Securities" and "Other Asset-Backed
Securities."

<PAGE>

While the judicious use of derivatives by highly experienced
investment managers such as Alliance can be quite beneficial,
derivatives also involve risks different from, and, in certain
cases, greater than, the risks presented by more traditional
investments. Following is a general discussion of important risk
factors and issues concerning the use of derivatives that
investors should understand before investing in a Fund.

. MARKET RISK-This is the general risk attendant to all
investments that the value of a particular investment will change
in a way detrimental to the Fund's interest.

. MANAGEMENT RISK-Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions. In particular, the use and complexity of
derivatives require the maintenance of adequate controls to
monitor the transactions entered into, the ability to assess the
risk that a derivative adds to a Fund's portfolio and the ability
to forecast price, interest rate or currency exchange rate
movements correctly.

. CREDIT RISK-This is the risk that a loss may be sustained
by a Fund as a result of the failure of another party to a
derivative (usually referred to as a "counterparty") to comply
with the terms of the derivative contract. The credit risk for
exchange-traded derivatives is generally less than for privately
negotiated derivatives, since the clearing house, which is the
issuer or counterparty to each exchange-traded derivative,
provides a guarantee of performance. This guarantee is supported
by a daily payment system (i.e., margin requirements) operated
by the clearing house in order to reduce overall credit risk. For
privately negotiated derivatives, there is no similar clearing
agency guarantee. Therefore, the Funds consider the
creditworthiness of each counterparty to a privately negotiated
derivative in evaluating potential credit risk.

. LIQUIDITY RISK-Liquidity risk exists when a particular
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous price.

<PAGE>

. LEVERAGE RISK-Since many derivatives have a leverage
component, adverse changes in the value or level of the
underlying asset, rate or index can result in a loss
substantially greater than the amount invested in the derivative
itself. In the case of swaps, the risk of loss generally is
related to a notional principal amount, even if the parties have
not made any initial investment. Certain derivatives have the
potential for unlimited loss, regardless of the size of the
initial investment.

. OTHER RISKS-Other risks in using derivatives include the
risk of mispricing or improper valuation of derivatives and the
inability of derivatives to correlate perfectly with underlying
assets, rates and indices. Many derivatives, in particular
privately negotiated derivatives, are complex and often valued
subjectively. Improper valuations can result in increased cash
payment requirements to counterparties or a loss of value to a
Fund. Derivatives do not always perfectly or even highly
correlate or track the value of the assets, rates or indices they
are designed to closely track. Consequently, a Fund's use of
derivatives may not always be an effective means of, and
sometimes could be counterproductive to, furthering the Fund's
investment objective.

DERIVATIVES USED BY THE FUNDS. Following is a description of
specific derivatives currently used by one or more of the Funds.

OPTIONS ON SECURITIES. In purchasing an option on securities,
a Fund would be in a position to realize a gain if, during the
option period, the price of the underlying securities increased
(in the case of a call) or decreased (in the case of a put) by an
amount in excess of the premium paid; otherwise the Fund would
experience a loss not greater than the premium paid for the
option. Thus, a Fund would realize a loss if the price of the
underlying security declined or remained the same (in the case of
a call) or increased or remained the same (in the case of a put)
or otherwise did not increase (in the case of a put) or decrease
(in the case of a call) by more than the amount of the premium.
If a put or call option purchased by a Fund were permitted to
expire without being sold or exercised, its premium would
represent a loss to the Fund.

A Fund may write a put or call option in return for a
premium, which is retained by the Fund whether or not the option
is exercised. Except with respect to uncovered call options
written for cross-hedging purposes, none of the Funds will write
uncovered call or put options on securities. A call option
written by a Fund is "covered" if the Fund owns the underlying

<PAGE>

security, has an absolute and immediate right to acquire that
security upon conversion or exchange of another security it
holds, or holds a call option on the underlying security with an
exercise price equal to or less than that of the call option it
has written. A put option written by a Fund is covered if the
Fund holds a put option on the underlying securities with an
exercise price equal to or greater than that of the put option it
has written.

The risk involved in writing an uncovered put option is that
there could be a decrease in the market value of the underlying
securities. If this occurred, a Fund could be obligated to
purchase the underlying security at a higher price than its
current market value. Conversely, the risk involved in writing an
uncovered call option is that there could be an increase in the
market value of the underlying security, and a Fund could be
obligated to acquire the underlying security at its current price
and sell it at a lower price. The risk of loss from writing an
uncovered put option is limited to the exercise price of the
option, whereas the risk of loss from writing an uncovered call
option is potentially unlimited.

A Fund may write a call option on a security that it does not
own in order to hedge against a decline in the value of a
security that it owns or has the right to acquire, a technique
referred to as "cross-hedging." A Fund would write a call option
for cross-hedging purposes, instead of writing a covered call
option, when the premium to be received from the cross-hedge
transaction exceeds that to be received from writing a covered
call option, while at the same time achieving the desired hedge.
The correlation risk involved in cross-hedging may be greater
than the correlation risk involved from other hedging strategies.

SHORT-TERM U.S. GOVERNMENT, MORTGAGE SECURITIES INCOME, NORTH
AMERICAN GOVERNMENT INCOME, GLOBAL DOLLAR GOVERNMENT and
CORPORATE BOND generally purchase or write privately negotiated
options on securities. A Fund that purchases or writes privately
negotiated options on securities will effect such transactions
only with investment dealers and other financial institutions
(such as commercial banks or savings and loan institutions)
deemed creditworthy by Alliance, and Alliance has adopted
procedures for monitoring the creditworthiness of such
counterparties. Privately negotiated options purchased or written
by a Fund may be illiquid, and it may not be possible for the
Fund to effect a closing transaction at an advantageous time. See
"Illiquid Securities" below. Neither MORTGAGE SECURITIES INCOME
nor CORPORATE BOND will purchase an option on a security if,
immediately thereafter, the aggregate cost of all outstanding

<PAGE>

options purchased by such Fund would exceed 2% of the Fund's
total assets. Nor will either such Fund write an option if,
immediately thereafter, the aggregate value of the Fund's
portfolio securities subject to outstanding options would exceed
15% of the Fund's total assets.

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

OPTIONS ON FOREIGN CURRENCIES. A Fund invests in options on
foreign currencies that are privately negotiated or traded on
U.S. or foreign exchanges for the purpose of protecting against
declines in the U.S. Dollar value of foreign currency denominated
portfolio securities and against increases in the U.S. Dollar
cost of securities to be acquired. The purchase of an option on a
foreign currency may constitute an effective hedge against
fluctuations in exchange rates, although if rates move adversely,
a Fund may forfeit the entire amount of the premium plus related
transaction costs.

WARRANTS. GLOBAL DOLLAR GOVERNMENT may invest in warrants,
which are option securities permitting their holders to subscribe
for other securities. GLOBAL DOLLAR GOVERNMENT may invest in
warrants for debt securities or for equity securities that are
acquired in connection with debt instruments. Warrants do not
carry with them dividend or voting rights with respect to the
underlying securities, or any rights in the assets of the issuer.
As a result, an investment in warrants may be considered more
speculative than certain other types of investments. In addition,
the value of a warrant does not necessarily change with the value
of the underlying securities, and a warrant ceases to have value
if it is not exercised prior to its expiration date.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Futures
contracts that a Fund may buy and sell may include futures
contracts on fixed-income or other securities or foreign
currencies, and contracts based on interest rates or financial
indices, including any index of U.S. Government securities,
foreign government securities or corporate debt securities.

Options on futures contracts are options that call for the
delivery upon exercise of futures contracts. Options on futures

<PAGE>

contracts written or purchased by a Fund will be traded on U.S.
or foreign exchanges and, except with respect to SHORT-TERM U.S.
GOVERNMENT, will be used only for hedging purposes.

LIMITED MATURITY GOVERNMENT, WORLD INCOME, SHORT-TERM MULTI-
MARKET, MULTI-MARKET STRATEGY and NORTH AMERICAN GOVERNMENT
INCOME will not enter into a futures contract or option on a
futures contract if immediately thereafter the market values of
the outstanding futures contracts of the Fund and the currencies
and futures contracts subject to outstanding options written by
the Fund would exceed 50% of its total assets. Nor will LIMITED
MATURITY GOVERNMENT, MORTGAGE SECURITIES INCOME, WORLD INCOME,
SHORT-TERM MULTI-MARKET, MULTI-MARKET STRATEGY or NORTH AMERICAN
GOVERNMENT INCOME do so if immediately thereafter the aggregate
of initial margin deposits on all the outstanding futures
contracts of the Fund and premiums paid on outstanding options on
futures contracts would exceed 5% of the market value of the
total assets of the Fund. In addition, MORTGAGE SECURITIES INCOME
will not enter into (i) any futures contract other than one on
fixed-income securities or based on interest rates, (ii) any
futures contract if immediately thereafter the sum of the then
aggregate futures market prices of financial instruments required
to be delivered under open futures contract sales and the
aggregate futures market prices of instruments required to be
delivered under open futures contract purchases would exceed 30%
of the value of the Fund's total assets, or (iii) options on
futures contracts.

EURODOLLAR INSTRUMENTS. Eurodollar instruments are
essentially U.S. Dollar-denominated futures contracts or options
thereon that are linked to LIBOR. Eurodollar futures contracts
enable purchasers to obtain a fixed rate for the lending of funds
and sellers to obtain a fixed rate for borrowings. LIMITED
MATURITY GOVERNMENT intends to use Eurodollar futures contracts
and options thereon to hedge against changes in LIBOR (to which
many short-term borrowings and floating rate securities in which
the Fund invests are linked).

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. Each Fund that
purchases or sells forward contracts on foreign currencies
("forward contracts") attempts to minimize the risk to it from
adverse changes in the relationship between the U.S. Dollar and
other currencies. A Fund may enter into a forward contract, for
example, when it enters into a contract for the purchase or sale
of a security denominated in a foreign currency in order to "lock
in" the U.S. Dollar price of the security ("transaction hedge").
When a Fund believes that a foreign currency may suffer a
substantial decline against the U.S. Dollar, it may enter into a

<PAGE>

forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund
believes that the U.S. Dollar may suffer a substantial decline
against a foreign currency, it may enter into a forward purchase
contract to buy that foreign currency for a fixed dollar amount
("position hedge"). Instead of entering into a position hedge, a
Fund may, in the alternative, enter into a forward contract to
sell a different foreign currency for a fixed U.S. Dollar amount
where the Fund believes that the U.S. Dollar value of the
currency to be sold pursuant to the forward contract will fall
whenever there is a decline in the U.S. Dollar value of the
currency in which portfolio securities of the Fund are
denominated ("cross-hedge").

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

When forward commitments with respect to fixed-income
securities are negotiated, the price, which is generally
expressed in yield terms, is fixed at the time the commitment is
made, but payment for and delivery of the securities take place
at a later date. Normally, the settlement date occurs within two
months after the transaction, but settlements beyond two months
may be negotiated. Securities purchased or sold under a forward
commitment are subject to market fluctuation, and no interest or
dividends accrues to the purchaser prior to the settlement date.
At the time a Fund enters into a forward commitment, it records
the transaction and thereafter reflects the value of the security
purchased or, if a sale, the proceeds to be received, in
determining its net asset value. Any unrealized appreciation or
depreciation reflected in such valuation would be canceled if the
required conditions did not occur and the trade were canceled.

The use of forward commitments helps a Fund to protect
against anticipated changes in interest rates and prices. For
instance, in periods of rising interest rates and falling bond
prices, a Fund might sell securities in its portfolio on a
forward commitment basis to limit its exposure to falling bond
prices. In periods of falling interest rates and rising bond
prices, a Fund might sell a security in its portfolio and
purchase the same or a similar security on a when-issued or

<PAGE>

forward commitment basis, thereby obtaining the benefit of
currently higher cash yields. No forward commitments will be made
by LIMITED MATURITY GOVERNMENT, NORTH AMERICAN GOVERNMENT INCOME
or GLOBAL DOLLAR GOVERNMENT if, as a result, the Fund's aggregate
forward commitments under such transactions would be more than
30% of its total assets.

A Fund's right to receive or deliver a security under a
forwaPrd commitment may be sold prior to the settlement date. The
Funds enter into forward commitments, however, only with the
intention of actually receiving securities or delivering them, as
the case may be. If a Fund, however, chooses to dispose of the
right to acquire a when-issued security prior to its acquisition
or dispose of its right to deliver or receive against a forward
commitment, it may incur a gain or loss.

INTEREST RATE TRANSACTIONS (SWAPS, CAPS AND FLOORS). Each
Fund that may enter into interest rate swap, cap or floor
transactions expects to do so primarily for hedging purposes,
which may include preserving a return or spread on a particular
investment or portion of its portfolio or protecting against an
increase in the price of securities the Fund anticipates
purchasing at a later date. The Funds do not intend to use these
transactions in a speculative manner.

Interest rate swaps involve the exchange by a Fund with
another party of their respective commitments to pay or receive
interest (e.g., an exchange of floating rate payments for fixed
rate payments) computed based on a contractually-based principal
(or "notional") amount. Interest rate swaps are entered into on a
net basis (i.e., the two payment streams are netted out, with the
Fund receiving or paying, as the case may be, only the net amount
of the two payments). Interest rate caps and floors are similar
to options in that the purchase of an interest rate cap or floor
entitles the purchaser, to the extent that a specified index
exceeds (in the case of a cap) or falls below (in the case of a
floor) a predetermined interest rate, to receive payments of
interest on a notional amount from the party selling the interest
rate cap or floor. A Fund may enter into interest rate swaps,
caps and floors on either an asset-based or liability-based
basis, depending upon whether it is hedging its assets or
liabilities.

There is no limit on the amount of interest rate transactions
that may be entered into by a Fund that is permitted to enter
into such transactions. SHORT-TERM MULTI-MARKET, MULTI-MARKET
STRATEGY and NORTH AMERICAN GOVERNMENT INCOME may enter into
interest rate swaps involving payments to the same currency or in

<PAGE>

different currencies. SHORT-TERM U.S. GOVERNMENT, LIMITED
MATURITY GOVERNMENT, MORTGAGE SECURITIES INCOME, GLOBAL DOLLAR
GOVERNMENT and CORPORATE BOND will not enter into an interest
rate swap, cap or floor transaction unless the unsecured senior
debt or the claims-paying ability of the other party thereto is
then rated in the highest rating category of at least one
nationally recognized rating organization. Each of SHORT-TERM
MULTI-MARKET, MULTI-MARKET STRATEGY and NORTH AMERICAN GOVERNMENT
INCOME will enter into interest rate swap, cap or floor
transactions with its respective custodian, and with other
counterparties, but only if: (i) for transactions with maturities
under one year, such other counterparty has outstanding prime
commercial paper; or (ii) for transactions with maturities
greater than one year, the counterparty has outstanding high
quality debt securities.

The swap market has grown substantially in recent years, with
a large number of banks and investment banking firms acting both
as principals and as agents utilizing standardized swap
documentation. As a result, the swap market has become well
established and relatively liquid. Caps and floors are less
liquid than swaps. These transactions do not involve the delivery
of securities or other underlying assets or principal.
Accordingly, unless there is a counterparty default, the risk of
loss to a Fund from interest rate transactions is limited to the
net amount of interest payments that the Fund is contractually
obligated to make.

STANDBY COMMITMENT AGREEMENTS. Standby commitment agreements
are similar to put options that commit a Fund, for a stated
period of time, to purchase a stated amount of a security that
may be issued and sold to the Fund at the option of the issuer.
The price and coupon of the security are fixed at the time of the
commitment. At the time of entering into the agreement, the Fund
is paid a commitment fee regardless of whether the security
ultimately is issued. The Funds will enter into such agreements
only for the purpose of investing in the security underlying the
commitment at a yield and price considered advantageous and
unavailable on a firm commitment basis. The Funds will not enter
into standby commitments with a remaining term in excess of 45
days and will limit their investments in such commitments so that
the aggregate purchase price of the securities subject to the
commitments does not exceed 20% of their respective assets.

There is no guarantee that the security subject to a standby
commitment will be issued. In addition, the value of the
security, if issued, on the delivery date may be more or less
than its purchase price. Since the issuance of the security is at

<PAGE>

the option of the issuer, a Fund will bear the risk of capital
loss in the event the value of the security declines and may not
benefit from an appreciation in the value of the security during
the commitment period if the issuer decides not to issue and sell
the security to the Fund.

INDEXED COMMERCIAL PAPER. Indexed commercial paper may have
its principal linked to changes in foreign currency exchange
rates whereby its principal amount is adjusted upwards or
downwards (but not below zero) at maturity to reflect changes in
the referenced exchange rate. Each Fund that invests in such
commercial paper may do so without limitation. A Fund will
receive interest and principal payments on such commercial paper
in the currency in which such commercial paper is denominated,
but the amount of principal payable by the issuer at maturity
will change in proportion to the change (if any) in the exchange
rate between the two specified currencies between the date the
instrument is issued and the date the instrument matures. While
such commercial paper entails the risk of loss of principal, the
potential for realizing gains as a result of changes in foreign
currency exchange rates enables a Fund to hedge (or cross-hedge)
against a decline in the U.S. Dollar value of investments
denominated in foreign currencies while providing an attractive
money market rate of return. A Fund will only, not for
speculation.

U.S. GOVERNMENT SECURITIES. U.S. Government securities may be
backed by the full faith and credit of the United States,
supported only by the right of the issuer to borrow from the U.S.
Treasury or backed only by the credit of the issuing agency
itself. These securities include:

(i) the following U.S. Treasury securities, which are
backed by the full faith and credit of the United States and
differ only in their interest rates, maturities and times of
issuance: U.S. Treasury bills (maturities of one year or less
with no interest paid and hence issued at a discount and repaid
at full face value upon maturity), U.S. Treasury notes
(maturities of one to ten years with interest payable every six
months) and U.S. Treasury bonds (generally maturities of greater
than ten years with interest payable every six months);

(ii) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities that are supported by the full
faith and credit of the U.S. Government, such as securities
issued by GNMA, the Farmers Home Administration, the Department
of Housing and Urban Development, the Export-Import Bank, the

<PAGE>

General Services Administration and the Small Business
Administration; and

(iii) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities that are not supported by the full
faith and credit of the U.S. Government, such as securities
issued by FNMA and FHLMC, and governmental CMOs.

The maturities of the U.S. Government securities listed in
paragraphs (i) and (ii) above usually range from three months to
30 years. Such securities, except GNMA certificates, normally
provide for periodic payments of interest in fixed amounts with
principal payments at maturity or specified call dates. For
information regarding GNMA, FNMA and FHLMC certificates and CMOs,
see "Mortgage-Related Securities" above.

U.S. Government securities also include zero coupon
securities and principal-only securities and certain SMRS. In
addition, other U.S. Government agencies and instrumentalities
have issued stripped securities that are similar to SMRS. Such
securities include those that are issued with an IO class and a
PO class. See "Mortgage-Related Securities" and "Zero Coupon and
Principal-Only Securities" below. Although these stripped
securities are purchased and sold by institutional investors
through several investment banking firms acting as brokers or
dealers, these securities were only recently developed. As a
result, established trading markets have not yet developed and,
accordingly, these securities may be illiquid.

Guarantees of securities by the U.S. Government or its
agencies or instrumentalities guarantee only the payment of
principal and interest on the securities, and do not guarantee
the securities' yield or value or the yield or value of the
shares of a Fund that holds the securities.

U.S. Government securities are considered among the safest of
fixed-income investments. As a result, however, their yields are
generally lower than the yields available from other fixed-income
securities.

MORTGAGE-RELATED SECURITIES. The mortgage-related securities
in which a Fund may invest typically are securities representing
interests in pools of mortgage loans made to home owners. The
mortgage loan pools may be assembled for sale to investors (such
as a Fund) by governmental or private organizations. Mortgage-
related securities issued by GNMA are backed by the full faith
and credit of the United States; those issued by FNMA and FHLMC
are not so backed. Mortgage-related securities bear interest at

<PAGE>

either a fixed rate or an adjustable rate determined by reference
to an index rate. Mortgage-related securities frequently provide
for monthly payments that consist of both interest and principal,
unlike more traditional debt securities, which normally do not
provide for periodic repayments of principal.

Securities representing interests in pools created by private
issuers generally offer a higher rate of interest than securities
representing interests in pools created by governmental issuers
because there are no direct or indirect governmental guarantees
of the underlying mortgage payments. However, private issuers
sometimes obtain committed loan facilities, lines of credit,
letters of credit, surety bonds or other forms of liquidity and
credit enhancement to support the timely payment of interest and
principal with respect to their securities if the borrowers on
the underlying mortgages fail to make their mortgage payments.
The ratings of such non-governmental securities are generally
dependent upon the ratings of the providers of such liquidity and
credit support and would be adversely affected if the rating of
such an enhancer were downgraded. A Fund may buy mortgage-related
securities without credit enhancement if the securities meet the
Fund's investment standards. Although the market for mortgage-
related securities is becoming increasingly liquid, those of
certain private organizations may not be readily marketable.

One type of mortgage-related security is of the "pass-
through" variety. The holder of a pass-through security is
considered to own an undivided beneficial interest in the
underlying pool of mortgage loans and receives a pro rata share
of the monthly payments made by the borrowers on their mortgage
loans, net of any fees paid to the issuer or guarantor of the
securities. Prepayments of mortgages resulting from the sale,
refinancing or foreclosure of the underlying properties are also
paid to the holders of these securities, which, as discussed
below, frequently causes these securities to experience
significantly greater price and yield volatility than experienced
by traditional fixed-income securities. Some mortgage-related
securities, such as securities issued by GNMA, are referred to as
"modified pass-through" securities. The holders of these
securities are entitled to the full and timely payment of
principal and interest, net of certain fees, regardless of
whether payments are actually made on the underlying mortgages.
Another form of mortgage-related security is a "pay-through"
security, which is a debt obligation of the issuer secured by a
pool of mortgage loans pledged as collateral that is legally
required to be paid by the issuer regardless of whether payments
are actually made on the underlying mortgages.

<PAGE>

Collateralized mortgage obligations (CMOs) are the
predominant type of "pay-through" mortgage-related security. In a
CMO, a series of bonds or certificates is issued in multiple
classes. Each class of a CMO, often referred to as a "tranche,"
is issued at a specific coupon rate and has a stated maturity or
final distribution date. Principal prepayments on collateral
underlying a CMO may cause it to be retired substantially earlier
than the stated maturities or final distribution dates. The
principal and interest on the underlying mortgages may be
allocated among several classes of a series of a CMO in many
ways. In a common structure, payments of principal, including any
principal prepayments, on the underlying mortgages are applied to
the classes of the series of a CMO in the order of their
respective stated maturities or final distribution dates, so that
no payment of principal will be made on any class of a CMO until
all other classes having an earlier stated maturity or final
distribution date have been paid in full. One or more tranches of
a CMO may have coupon rates that reset periodically, or "float",
at a specified increment over an index such as LIBOR. Floating-
rate CMOs may be backed by fixed or adjustable rate mortgages. To
date, fixed-rate mortgages have been more commonly utilized for
this purpose. Floating-rate CMOs are typically issued with
lifetime caps on the coupon rate thereon. These caps, similar to
the caps on adjustable-rate mortgages described below, represent
a ceiling beyond which the coupon rate on a floating-rate CMO may
not be increased regardless of increases in the interest rate
index to which the floating-rate CMO is tied.

The collateral securing the CMOs may consist of a pool of
mortgages, but may also consist of mortgage-backed bonds or pass-
through securities. CMOs may be issued by a U.S. Government
instrumentality or agency or by a private issuer. Although
payment of the principal of, and interest on, the underlying
collateral securing privately issued CMOs may be guaranteed by
GNMA, FNMA or FHLMC, these CMOs represent obligations solely of
the private issuer and are not insured or guaranteed by GNMA,
FNMA, FHLMC, any other governmental agency or any other person or
entity.

Another type of mortgage-related security, known as
adjustable-rate mortgage securities (ARMS), bears interest at a
rate determined by reference to a predetermined interest rate or
index. There are two main categories of rates or indices: (i)
rates based on the yield on U.S. Treasury securities and (ii)
indices derived from a calculated measure such as a cost of funds
index or a moving average of mortgage rates. Some rates and
indices closely mirror changes in market interest rate levels,

<PAGE>

while others tend to lag changes in market rate levels and tend
to be somewhat less volatile.

ARMS may be secured by adjustable-rate mortgages or fixed-
rate mortgages. ARMS secured by fixed-rate mortgages generally
have lifetime caps on the coupon rates of the securities. To the
extent that general interest rates increase faster than the
interest rates on the ARMS, these ARMS will decline in value. The
adjustable-rate mortgages that secure ARMS will frequently have
caps that limit the maximum amount by which the interest rate or
the monthly principal and interest payments on the mortgages may
increase. These payment caps can result in negative amortization
(i.e., an increase in the balance of the mortgage loan).
Furthermore, since many adjustable-rate mortgages only reset on
an annual basis, the values of ARMS tend to fluctuate to the
extent that changes in prevailing interest rates are not
immediately reflected in the interest rates payable on the
underlying adjustable-rate mortgages.

Stripped mortgage-related securities (SMRS) are mortgage-
related securities that are usually structured with two classes
of securities collateralized by a pool of mortgages or a pool of
mortgaged-backed bonds or pass-through securities, with each
class receiving different proportions of the principal and
interest payments from the underlying assets. A common type of
SMRS has one class of interest-only securities (IOs) receiving
all of the interest payments from the underlying assets, while
the other class of securities, principal-only securities (POs),
receives all of the principal payments from the underlying
assets. IOs and POs are extremely sensitive to interest rate
changes and are more volatile than mortgage-related securities
that are not stripped. IOs tend to decrease in value as interest
rates decrease, while POs generally increase in value as interest
rates decrease. If prepayments of the underlying mortgages are
greater than anticipated, the amount of interest earned on the
overall pool will decrease due to the decreasing principal
balance of the assets. Changes in the values of IOs and POs can
be substantial and occur quickly, such as occurred in the first
half of 1994 when the value of many POs dropped precipitously due
to increases in interest rates. For this reason, none of the
Funds relies on IOs and POs as the principal means of furthering
its investment objective.

The value of mortgage-related securities is affected by a
number of factors. Unlike traditional debt securities, which have
fixed maturity dates, mortgage-related securities may be paid
earlier than expected as a result of prepayment of the underlying
mortgages. If property owners make unscheduled prepayments of

<PAGE>

their mortgage loans, these prepayments will result in the early
payment of the applicable mortgage-related securities. In that
event a Fund may be unable to invest the proceeds from the early
payment of the mortgage-related securities in an investment that
provides as high a yield as the mortgage-related securities.
Consequently, early payment associated with mortgage-related
securities causes these securities to experience significantly
greater price and yield volatility than experienced by
traditional fixed-income securities. The occurrence of mortgage
prepayments is affected by the level of general interest rates,
general economic conditions and other social and demographic
factors. During periods of falling interest rates, the rate of
mortgage prepayments tends to increase, thereby tending to
decrease the life of mortgage-related securities. During periods
of rising interest rates, the rate of mortgage prepayments
usually decreases, thereby tending to increase the life of
mortgage-related securities. If the life of a mortgage-related
security is inaccurately predicted, a Fund may not be able to
realize the rate of return it expected.

As with fixed-income securities generally, the value of
mortgage-related securities can also be adversely affected by
increases in general interest rates relative to the yield
provided by such securities. Such adverse effect is especially
possible with fixed-rate mortgage securities. If the yield
available on other investments rises above the yield of the
fixed-rate mortgage securities as a result of general increases
in interest rate levels, the value of the mortgage-related
securities will decline. Although the negative effect could be
lessened if the mortgage-related securities were to be paid
earlier (thus permitting a Fund to reinvest the prepayment
proceeds in investments yielding the higher current interest
rate), as described above the rate of mortgage prepayments and
early payment of mortgage-related securities generally tends to
decline during a period of rising interest rates.

Although the value of ARMS may not be affected by rising
interest rates as much as the value of fixed-rate mortgage
securities is affected by rising interest rates, ARMS may still
decline in value as a result of rising interest rates. Although,
as described above, the yield on ARMS varies with changes in the
applicable interest rate or index, there is often a lag between
increases in general interest rates and increases in the yield on
ARMS as a result of relatively infrequent interest rate reset
dates. In addition, adjustable-rate mortgages and ARMS often have
interest rate or payment caps that limit the ability of the
adjustable-rate mortgages or ARMS to fully reflect increases in
the general level of interest rates.

<PAGE>

LIMITED MATURITY GOVERNMENT may invest up to 15% of the value
of its total assets in debt securities denominated in U.S.
Dollars or in foreign currencies and issued or guaranteed by
foreign governments or issued by foreign non-governmental
issuers, provided that such foreign debt securities are of high
quality. The percentage of LIMITED MATURITY GOVERNMENT'S assets
invested in foreign debt securities will vary and its portfolio
of foreign debt securities may include those of a number of
foreign countries or, depending upon market conditions, those of
a single country. See "Risk Considerations-Foreign Investment."

OTHER ASSET-BACKED SECURITIES. The securitization techniques
used to develop mortgage-related securities are being applied to
a broad range of financial assets. Through the use of trusts and
special purpose corporations, various types of assets, including
automobile loans and leases, credit card receivables, home equity
loans, equipment leases and trade receivables, are being
securitized in structures similar to the structures used in
mortgage securitizations. These asset-backed securities are
subject to risks associated with changes in interest rates and
prepayment of underlying obligations similar to the risks of
investment in mortgage-related securities discussed above.

Each type of asset-backed security also entails unique risks
depending on the type of assets involved and the legal structure
used. For example, credit card receivables are generally
unsecured obligations of the credit card holder and the debtors
are entitled to the protection of a number of state and federal
consumer credit laws, many of which give such debtors the right
to set off certain amounts owed on the credit cards, thereby
reducing the balance due. There have also been proposals to cap
the interest rate that a credit card issuer may charge. In some
transactions, the value of the asset-backed security is dependent
on the performance of a third party acting as credit enhancer or
servicer. Furthermore, in some transactions (such as those
involving the securitization of vehicle loans or leases) it may
be administratively burdensome to perfect the interest of the
security issuer in the underlying collateral and the underlying
collateral may become damaged or stolen.

ZERO COUPON AND PRINCIPAL-ONLY SECURITIES. Zero coupon
securities and principal-only (PO) securities are debt securities
that have been issued without interest coupons or stripped of
their unmatured interest coupons, and include receipts or
certificates representing interests in such stripped debt
obligations and coupons. Such a security pays no interest to its
holder during its life. Its value to an investor consists of the

<PAGE>

difference between its face value at the time of maturity and the
price for which it was acquired, which is generally an amount
significantly less than its face value. Such securities usually
trade at a deep discount from their face or par value and are
subject to greater fluctuations in market value in response to
changing interest rates than debt obligations of comparable
maturities and credit quality that make current distributions of
interest. On the other hand, because there are no periodic
interest payments to be reinvested prior to maturity, these
securities eliminate reinvestment risk and "lock in" a rate of
return to maturity.

Zero coupon Treasury securities are U.S. Treasury bills
issued without interest coupons. Principal-only Treasury
securities are U.S. Treasury notes and bonds that have been
stripped of their unmatured interest coupons, and receipts or
certificates representing interests in such stripped debt
obligations and coupons. Currently the only U.S. Treasury
security issued without coupons is the Treasury bill. Although
the U.S. Treasury does not itself issue Treasury notes and bonds
without coupons, under the U.S. Treasury STRIPS program interest
and principal payments on certain long-term Treasury securities
may be maintained separately in the Federal Reserve book entry
system and may be separately traded and owned. In addition, in
the last few years a number of banks and brokerage firms have
separated ("stripped") the principal portions from the coupon
portions of U.S. Treasury bonds and notes and sold them
separately in the form of receipts or certificates representing
undivided interests in these instruments (which instruments are
generally held by a bank in a custodial or trust account). The
staff of the Commission has indicated that, in its view, these
receipts or certificates should be considered as securities
issued by the bank or brokerage firm involved and, therefore,
should not be included in a Fund's categorization of U.S.
Government securities. The Funds disagree with the staff's
position but will not treat such securities as U.S. Government
securities until final resolution of the issue.

Current federal tax law requires that a holder (such as a
Fund) of a zero coupon security accrue a portion of the discount
at which the security was purchased as income each year even
though the holder receives no interest payment in cash on the
security during the year. As a result, in order to make the
distributions necessary for a Fund not to be subject to federal
income or excise taxes, the Fund might be required to pay out as
an income distribution each year an amount, obtained by
liquidation of portfolio securities or borrowings if necessary,
greater than the total amount of cash that the Fund has actually

<PAGE>

received as interest during the year. Each Fund believes,
however, that it is highly unlikely that it would be necessary to
liquidate portfolio securities or borrow money in order to make
such required distributions or to meet its investment objective.
For a discussion of the tax treatment of zero coupon Treasury
securities, see "Dividends, Distributions and Taxes-Zero Coupon
Treasury Securities" in the Statement of Additional Information
of each Fund that is permitted to invest in such securities.

CORPORATE BOND may also invest in "pay-in-kind" debentures
(i.e., debt obligations the interest on which may be paid in the
form of obligations of the same type rather than cash), which
have characteristics similar to zero coupon securities.

VARIABLE, FLOATING AND INVERSE FLOATING RATE INSTRUMENTS.
Fixed-income securities may have fixed, variable or floating
rates of interest. Variable and floating rate securities pay
interest at rates that are adjusted periodically, according to a
specified formula. A "variable" interest rate adjusts at
predetermined intervals (e.g., daily, weekly or monthly), while a
"floating" interest rate adjusts whenever a specified benchmark
rate (such as the bank prime lending rate) changes.

A Fund may invest in fixed-income securities that pay
interest at a coupon rate equal to a base rate, plus additional
interest for a certain period of time if short-term interest
rates rise above a predetermined level or "cap." The amount of
such an additional interest payment typically is calculated under
a formula based on a short-term interest rate index multiplied by
a designated factor.

Leveraged inverse floating rate debt instruments are
sometimes known as inverse floaters. The interest rate on an
inverse floater resets in the opposite direction from the market
rate of interest to which the inverse floater is indexed. An
inverse floater may be considered to be leveraged to the extent
that its interest rate varies by a magnitude that exceeds the
magnitude of the change in the index rate of interest. The higher
degree of leverage inherent in inverse floaters is associated
with greater volatility in market value, such that, during
periods of rising interest rates, the market values of inverse
floaters will tend to decrease more rapidly than those of fixed
rate securities.

STRUCTURED SECURITIES. Structured securities in which GLOBAL
DOLLAR GOVERNMENT and CORPORATE BOND may invest represent
interests in entities organized and operated solely for the
purpose of restructuring the investment characteristics of

<PAGE>

sovereign debt obligations, with respect to GLOBAL DOLLAR
GOVERNMENT, or foreign government securities, with respect to
CORPORATE BOND. This type of restructuring involves the deposit
with or purchase by an entity, such as a corporation or trust, of
specified instruments (such as commercial bank loans or Brady
Bonds) and the issuance by that entity of one or more classes of
structured securities backed by, or representing interests in,
the underlying instruments. The cash flow on the underlying
instruments may be apportioned among the newly issued structured
securities to create securities with different investment
characteristics such as varying maturities, payment priorities
and interest rate provisions, and the extent of the payments made
with respect to structured securities is dependent on the extent
of the cash flow on the underlying instruments. Because
structured securities typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the
underlying instruments. Structured securities of a given class
may be either subordinated or unsubordinated to the right of
payment of another class. Subordinated structured securities
typically have higher yields and present greater risks than
unsubordinated structured securities. GLOBAL DOLLAR GOVERNMENT
may invest up to 25% of its total assets, and CORPORATE BOND may
invest without limit, in these types of structured securities.

LOAN PARTICIPATIONS AND ASSIGNMENTS. A Fund's investments in
loans are expected in most instances to be in the form of
participations in loans and assignments of all or a portion of
loans from third parties. A Fund's investment in loan
participations typically will result in the Fund having a
contractual relationship only with the lender and not with the
borrower. A Fund will acquire participations only if the lender
interpositioned between the Fund and the borrower is a lender
having total assets of more than $25 billion and whose senior
unsecured debt is rated investment grade or higher. When a Fund
purchases a loan assignment from a lender it will acquire direct
rights against the borrower on the loan. Because loan assignments
are arranged through private negotiations between potential
assignees and potential assignors, however, the rights and
obligations acquired by a Fund as the purchaser of an assignment
may differ from, and be more limited than, those held by the
assigning lender. The assignability of certain sovereign debt
obligations, with respect to GLOBAL DOLLAR GOVERNMENT, or foreign
government securities, with respect to CORPORATE BOND, is
restricted by the governing documentation as to the nature of the
assignee such that the only way in which the Fund may acquire an
interest in a loan is through a participation and not an
assignment. A Fund may have difficulty disposing of assignments
and participations because to do so it will have to assign such

<PAGE>

securities to a third party. Because there is no liquid market
for such securities, such securities can probably be sold only to
a limited number of institutional investors. The lack of a liquid
secondary market may have an adverse effect on the value of such
securities and a Fund's ability to dispose of particular
assignments or participations when necessary to meet its
liquidity needs in response to a specific economic event such as
a deterioration in the creditworthiness of the borrower. The lack
of a liquid secondary market for assignments and participations
also may make it more difficult for the Fund to assign a value to
these securities for purposes of valuing the Fund's portfolio and
calculating its net asset value.

GLOBAL DOLLAR GOVERNMENT may invest up to 25%, and CORPORATE
BOND may invest up to 15%, of their total assets, in loan
participations and assignments. The government that is the
borrower on the loan will be considered by a Fund to be the
issuer of a loan participation or assignment for purposes of its
fundamental investment policy that it may not invest 25% or more
of its total assets in securities of issuers conducting their
principal business activities in the same industry (i.e., foreign
government).

BRADY BONDS. Brady Bonds are created through the exchange of
existing commercial bank loans to foreign entities for new
obligations in connection with debt restructurings under a plan
introduced by former U.S. Secretary of the Treasury, Nicholas F.
Brady (the "Brady Plan"). Brady Bonds have been issued only
recently, and, accordingly, do not have a long payment history.
They may be collateralized or uncollateralized and issued in
various currencies (although most are U.S. Dollar-denominated)
and they are actively traded in the over-the-counter secondary
market.

U.S. Dollar-denominated, collateralized Brady Bonds, which
may be fixed-rate par bonds or floating rate discount bonds, are
generally collateralized in full as to principal due at maturity
by U.S. Treasury zero coupon obligations that have the same
maturity as the Brady Bonds. Interest payments on these Brady
Bonds generally are collateralized by cash or securities in an
amount that, in the case of fixed rate bonds, is equal to at
least one year of rolling interest payments based on the
applicable interest rate at that time and is adjusted at regular
intervals thereafter. Certain Brady Bonds are entitled to "value
recovery payments" in certain circumstances, which in effect
constitute supplemental interest payments but generally are not
collateralized. Brady Bonds are often viewed as having up to four
valuation components: (i) collateralized repayment of principal

<PAGE>

at final maturity, (ii) collateralized interest payments, (iii)
uncollateralized interest payments, and (iv) any uncollateralized
repayment of principal at maturity (these uncollateralized
amounts constitute the "residual risk"). In the event of a
default with respect to collateralized Brady Bonds as a result of
which the payment obligations of the issuer are accelerated, the
U.S. Treasury zero coupon obligations held as collateral for the
payment of principal will not be distributed to investors, nor
will such obligations be sold and the proceeds distributed. The
collateral will be held by the collateral agent to the scheduled
maturity of the defaulted Brady Bonds, which will continue to be
outstanding, at which time the face amount of the collateral will
equal the principal payments that would have then been due on the
Brady Bonds in the normal course. In addition, in light of the
residual risk of Brady Bonds and, among other factors, the
history of defaults with respect to commercial bank loans by
public and private entities of countries issuing Brady Bonds,
investments in Brady Bonds are to be viewed as speculative.

CONVERTIBLE SECURITIES. Convertible securities include bonds,
debentures, corporate notes and preferred stocks that are
convertible into common stock. Prior to conversion, convertible
securities have the same general characteristics as non-
convertible debt securities, which provide a stable stream of
income with generally higher yields than those of equity
securities of the same or similar issuers. The price of a
convertible security will normally vary with changes in the price
of the underlying stock, although the higher yield tends to make
the convertible security less volatile than the underlying common
stock. As with debt securities, the market value of convertible
securities tends to decline as interest rates increase and
increase as interest rates decline. While convertible securities
generally offer lower interest or dividend yields than non-
convertible debt securities of similar quality, they enable
investors to benefit from increases in the market price of the
underlying common stock. Convertible debt securities that are
rated Baa or lower by Moody's or BBB or lower by S&P, Duff &
Phelps or Fitch and comparable unrated securities may share some
or all of the risks of debt securities with those ratings. For a
description of these risks, see "Risk Considerations-Investment
in Lower-Rated Fixed-Income Securities."

SHORT SALES. A short sale is effected by selling a security
that a Fund does not own, or if the Fund owns the security, it is
not to be delivered upon consummation of the sale. A short sale
is "against the box" if a Fund owns or has the right to obtain
without payment securities identical to those sold short. SHORT-
TERM U.S. GOVERNMENT and GLOBAL DOLLAR GOVERNMENT each may make

<PAGE>

short sales only against the box and only for the purpose of
deferring realization of gain or loss for U.S. federal income tax
purposes. In addition, each of these Funds may not make a short
sale if, as a result, more than 10% of net assets (taken at
market value), with respect to GLOBAL DOLLAR GOVERNMENT, and 10%
of total assets, with respect to SHORT-TERM U.S. GOVERNMENT,
would be held as collateral for short sales. If the price of the
security sold short increases between the time of the short sale
and the time a Fund replaces the borrowed security, the Fund will
incur a loss; conversely, if the price declines, the Fund will
realize a capital gain. Certain special federal income tax
considerations may apply to short sales entered into by a Fund.
See "Dividends, Distributions and Taxes" in the relevant Fund's
Statement of Additional Information.

REPURCHASE AGREEMENTS. A repurchase agreement arises when a
buyer purchases a security and simultaneously agrees to resell it
to the vendor at an agreed-upon future date, normally a day or a
few days later. The resale price is greater than the purchase
price, reflecting an agreed-upon interest rate for the period the
buyer's money is invested in the security. Such agreements permit
a Fund to keep all of its assets at work while retaining
"overnight" flexibility in pursuit of investments of a longer-
term nature. A Fund requires continual maintenance of collateral
in an amount equal to, or in excess of, the resale price. If a
vendor defaults on its repurchase obligation, a Fund 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, a Fund might be delayed in, or prevented from, selling
the collateral for its benefit. There is no percentage
restriction on any Fund's ability to enter into repurchase
agreements, except that SHORT-TERM U.S. GOVERNMENT may enter into
repurchase agreements on not more than 25% of its total assets.
The Funds may enter into repurchase agreements with member banks
of the Federal Reserve System or "primary dealers" (as designated
by the Federal Reserve Bank of New York), although LIMITED
MATURITY GOVERNMENT, WORLD INCOME, SHORT-TERM MULTI-MARKET,
MULTI-MARKET STRATEGY, NORTH AMERICAN GOVERNMENT INCOME and
GLOBAL DOLLAR GOVERNMENT currently enter into repurchase
agreements only with their custodians and such primary dealers.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. Reverse
repurchase agreements involve sales by a Fund of portfolio assets
concurrently with an agreement by the Fund to repurchase the same
assets at a later date at a fixed price. During the reverse
repurchase agreement period, the Fund continues to receive
principal and interest payments on these securities. Generally,
the effect of such a transaction is that a Fund can recover all

<PAGE>

or most of the cash invested in the portfolio securities involved
during the term of the reverse repurchase agreement, while it
will be able to keep the interest income associated with those
portfolio securities. Such transactions are advantageous only if
the interest cost to a Fund of the reverse repurchase transaction
is less than the cost of otherwise obtaining the cash.

Dollar rolls involve sales by a Fund of securities for
delivery in the current month and the Fund's simultaneously
contracting to repurchase substantially similar (same type and
coupon) securities on a specified future date. During the roll
period, a Fund forgoes principal and interest paid on the
securities. A Fund is compensated by the difference between the
current sales price and the lower forward price for the future
purchase (often referred to as the "drop") as well as by the
interest earned on the cash proceeds of the initial sale.

Reverse repurchase agreements and dollar rolls involve the
risk that the market value of the securities a Fund is obligated
to repurchase under the agreement may decline below the
repurchase price. In the event the buyer of securities under a
reverse repurchase agreement or dollar roll files for bankruptcy
or becomes insolvent, a Fund's use of the proceeds of the
agreement may be restricted pending a determination by the other
party, or its trustee or receiver, whether to enforce the Fund's
obligation to repurchase the securities.

Reverse repurchase agreements and dollar rolls are
speculative techniques and are considered borrowings by the
Funds. SHORT-TERM U.S. GOVERNMENT may enter into reverse
repurchase agreements with commercial banks and registered
broker-dealers in order to increase income, in an amount up to
33-1/3% of its total assets. Under normal circumstances, LIMITED
MATURITY GOVERNMENT does not expect to engage in reverse
repurchase agreements and dollar rolls with respect to greater
than 50% of its total assets. Reverse repurchase agreements and
dollar rolls together with any borrowings by GLOBAL DOLLAR
GOVERNMENT will not exceed 33% of its total assets less
liabilities (other than amounts borrowed). See "Risk
Considerations-Effects of Borrowing."

LOANS OF PORTFOLIO SECURITIES. A Fund may make secured loans
of portfolio securities to brokers, dealers and financial
institutions, provided that cash, liquid high-grade debt
securities or bank letters of credit equal to at least 100% of
the market value of the securities loaned is deposited and
maintained by the borrower with the Fund. The risks in lending
portfolio securities, as with other extensions of credit, consist

<PAGE>

of possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, Alliance will consider all relevant facts
and circumstances, including the creditworthiness of the
borrower. While securities are on loan, the borrower will pay the
Fund any income earned thereon and the Fund may invest any cash
collateral in portfolio securities, thereby earning additional
income, or receive an agreed upon amount of income from a
borrower who has delivered equivalent collateral. Each Fund will
have the right to regain record ownership of loaned securities or
equivalent securities in order to exercise ownership rights such
as voting rights, subscription rights and rights to dividends,
interest or distributions. A Fund may pay reasonable finders',
administrative and custodial fees in connection with a loan. A
Fund will not lend portfolio securities in excess of 25%, with
respect to SHORT-TERM U.S. GOVERNMENT, and 20%, with respect to
each of LIMITED MATURITY GOVERNMENT, MORTGAGE SECURITIES INCOME,
WORLD INCOME, SHORT-TERM MULTI-MARKET, MULTI-MARKET STRATEGY,
NORTH AMERICAN GOVERNMENT INCOME and GLOBAL DOLLAR GOVERNMENT, of
its total assets, nor will a Fund lend portfolio securities to
any officer, director, employee or affiliate of the Fund or
Alliance.

ILLIQUID SECURITIES. Subject to any more restrictive
applicable investment policies, none of the Funds will maintain
more than 15% of its net assets in illiquid securities. Illiquid
securities generally include (i) direct placements or other
securities that are subject to legal or contractual restrictions
on resale or for which there is no readily available market
(e.g., when trading in the security is suspended or, in the case
of unlisted securities, when market makers do not exist or will
not entertain bids or offers), including many currency swaps and
any assets used to cover currency swaps, (ii) over-the-counter
options and assets used to cover over-the-counter options, and
(iii) repurchase agreements not terminable within seven days.
Rule 144A securities that have legal or contractual restrictions
on resale but have a readily available market are not deemed
illiquid. Alliance will monitor the liquidity of each Fund's Rule
144A portfolio securities under the supervision of the Directors
of that Fund. A Fund that invests in illiquid securities may not
be able to sell such securities and may not be able to realize
their full value upon sale.

INVESTMENT IN OTHER INVESTMENT COMPANIES. GLOBAL DOLLAR
GOVERNMENT may invest in other investment companies whose
investment objectives and policies are consistent with those of
the Fund. Under the 1940 Act, the Fund may invest not more than
10% of its total assets in securities of other investment

<PAGE>

companies. In addition, under the 1940 Act the Fund may not own
more than 3% of the total outstanding voting stock of any
investment company and not more than 5% of the value of the
Fund's total assets may be invested in the securities of any
investment company. If the Fund acquired shares in investment
companies, shareholders would bear both their proportionate share
of expenses in the Fund (including management and advisory fees)
and, indirectly, the expenses of such investment companies
(including management and advisory fees).

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

DEFENSIVE POSITION. For temporary defensive purposes, each
Fund may invest in certain types of short-term, liquid, high
grade or high quality (depending on the Fund) debt securities.

These securities may include U.S. Government securities,
qualifying bank deposits, money market instruments, prime
commercial paper and other types of short-term debt securities
including notes and bonds. For Funds that may invest in foreign
countries, such securities may also include short-term, foreign-
currency denominated securities of the type mentioned above
issued by foreign governmental entities, companies and
supranational organizations. For a complete description of the
types of securities in which a Fund may invest while in a
temporary defensive position, see the Fund's Statement of
Additional Information.

PORTFOLIO TURNOVER. Portfolio turnover rates are set forth
under "Financial Highlights." These rates of portfolio turnover
are greater than those of most other investment companies. A high
rate of portfolio turnover involves correspondingly greater
brokerage and other expenses than a lower rate, which must be
borne by the Fund and its shareholders. High portfolio turnover
also may result in the realization of substantial net short-term
capital gains. See "Dividends, Distributions and Taxes" in each
Fund's Statement of Additional Information.

<PAGE>

CERTAIN FUNDAMENTAL INVESTMENT POLICIES

Each Fund has adopted certain fundamental investment policies
listed below, which may not be changed without the approval of
its shareholders. Additional investment restrictions with respect
to a Fund are set forth in its Statement of Additional
Information.

SHORT-TERM U.S. GOVERNMENT may not (i) invest more than 5% of
its total assets in the securities of any one issuer (other than
U.S. Government securities and repurchase agreements relating
thereto), although up to 25% of the Fund's total assets may be
invested without regard to this restriction, or (ii) invest 25%
or more of its total assets in the securities of any one
industry.

U.S. GOVERNMENT may not (i) borrow money except from banks
for temporary or emergency purposes and then only in an amount
not exceeding 5% of the value of its total assets at the time the
borrowing is made, (ii) make loans to other persons, (iii) effect
a short sale of any security, (iv) purchase securities on margin,
but it may obtain such short-term credits as may be necessary for
the clearance of purchases and sales of securities, or (v) write,
purchase or sell puts, calls or combinations thereof.

LIMITED MATURITY GOVERNMENT may not (i) invest more than 5%
of its total assets in the securities of any one issuer or own
more than 10% of the outstanding voting securities of such issuer
(other than U.S. Government securities), except that up to 25% of
the value of the Fund's total assets may be invested without
regard to the 5% and 10% limitations, (ii) invest 25% or more of
its total assets in securities of companies engaged principally
in any one industry, except that this restriction does not apply
to investments in the mortgage and mortgage-financed industry (in
which more than 25% of the value of the Fund's total assets will,
except for temporary defensive positions, be invested) or U.S.
Government securities, (iii) borrow money except from banks for
emergency or temporary purposes in an amount not exceeding 5% of
the value of the total assets of the Fund, except that the Fund
may engage in reverse repurchase agreements and dollar rolls in
an amount up to 50% of the Fund's total assets, and (iv) pledge,
hypothecate, mortgage or otherwise encumber its assets, except to
secure permitted borrowings.

MORTGAGE SECURITIES INCOME may not (i) invest more than 5% of
the value of its total assets in the securities of any one issuer
(other than U.S. Government securities), except that up to 25% of
the value of the Fund's total assets may be invested without

<PAGE>

regard to this limitation, (ii) invest more than 25% of the value
of its total assets in the securities of issuers conducting their
principal business activities in a single industry, except that
this limitation shall not apply to investments in the mortgage
and mortgage-financed industry (in which more than 25% of the
value of the Fund's total assets will, except for temporary
defensive positions, be invested) or U.S. Government securities,
(iii) borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests which
might require the untimely disposition of securities, borrowing
in the aggregate may not exceed 15%, and borrowing for purposes
other than meeting redemptions may not exceed 5% of the value of
the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the
borrowing is made, outstanding borrowings in excess of 5% of the
value of the Fund's total assets will be repaid before any
subsequent investments are made, (iv) pledge, hypothecate,
mortgage or otherwise encumber its assets, except in an amount of
not more than 15% of the value of its total assets to secure
borrowings for temporary or emergency purposes and except as
provided in (vi) below, provided, however, that this limitation
does not apply to deposits made in connection with the entering
into and holding of interest rate futures contracts, (v) invest
more than 10% of the value of its total assets in the aggregate
in illiquid securities or other illiquid investments and
repurchase agreements maturing in more than seven days, or (vi)
lend its portfolio securities if immediately after such a loan
more than 20% of the value of the Fund's total assets would be
subject to such loans.

WORLD INCOME may not (i) invest 25% or more of its total
assets in securities of companies engaged principally in any one
industry other than the banking industry except that this
restriction does not apply to U.S. Government securities, (ii)
borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests which
might require the untimely disposition of securities; borrowing
in the aggregate may not exceed 15%, and borrowing for purposes
other than meeting redemptions may not exceed 5% of the value of
the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the
borrowing is made; securities will not be purchased while
borrowings in excess of 5% of the value of the Fund's total
assets are outstanding, or (iii) pledge, hypothecate, mortgage or
otherwise encumber its assets, except to secure permitted
borrowings.

<PAGE>

SHORT-TERM MULTI-MARKET may not (i) invest 25% or more of its
total assets in securities of companies engaged principally in
any one industry other than the banking industry, except that
this restriction does not apply to U.S. Government securities,
(ii) borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests which
might require the untimely disposition of securities; borrowing
in the aggregate may not exceed 15%, and borrowing for purposes
other than meeting redemptions may not exceed 5% of the value of
the Fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the
borrowing is made; securities will not be purchased while
borrowings in excess of 5% of the value of the Fund's total
assets are outstanding, or (iii) pledge, hypothecate, mortgage or
otherwise encumber its assets, except to secure permitted
borrowings.

MULTI-MARKET STRATEGY may not (i) invest 25% or more of its
total assets in securities of companies engaged principally in
any one industry other than the banking industry, except that
this restriction does not apply to U.S. Government securities,
(ii) borrow money, except the Fund may, in accordance with
provisions of the 1940 Act, (a) borrow from a bank, if after such
borrowing, there is asset coverage of at least 300% as defined in
the 1940 Act, and (b) borrow for temporary or emergency purposes
in an amount not exceeding 5% of the value of the total assets of
the Fund, or (iii) pledge, hypothecate, mortgage or otherwise
encumber its assets, except to secure permitted borrowings.

NORTH AMERICAN GOVERNMENT INCOME may not (i) invest 25% or
more of its total assets in securities of companies engaged
principally in any one industry except that this restriction does
not apply to U.S. Government securities, (ii) borrow money,
except that the Fund may, in accordance with provisions of the
1940 Act, (a) borrow from a bank, if after such borrowing, there
is asset coverage of at least 300% as defined in the 1940 Act,
and (b) borrow for temporary or emergency purposes in an amount
not exceeding 5% of the value of the total assets of the Fund, or
(iii) pledge, hypothecate, mortgage or otherwise encumber its
assets, except to secure permitted borrowings.

GLOBAL DOLLAR GOVERNMENT may not (i) invest 25% or more of
its total assets in the securities of issuers conducting their
principal business activities in any one industry, except that
this restriction does not apply to U.S. Government securities,
(ii) purchase more than 10% of any class of the voting securities
of any one issuer, (iii) borrow money, except the Fund may, in
accordance with provisions of the 1940 Act, (a) borrow from a

<PAGE>

bank, if after such borrowing, there is asset coverage of at
least 300% as defined in the 1940 Act, and (b) borrow for
temporary or emergency purposes in an amount not exceeding 5% of
the value of the total assets of the Fund, (iv) pledge,
hypothecate, mortgage or otherwise encumber its assets, except to
secure permitted borrowings, or (v) purchase a security if, as a
result (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange), the Fund would own more
than 3% of the total outstanding voting stock of any investment
company or more than 5% of the value of the Fund's net assets
would be invested in securities of any one or more investment
companies.

CORPORATE BOND may not (i) invest more than 5% of its total
assets in the securities of any one issuer other than U.S.
Government securities, or (ii) own more than 10% of the
outstanding voting securities of any issuer.

RISK CONSIDERATIONS

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

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

U.S. CORPORATE FIXED-INCOME SECURITIES. The U.S. corporate
fixed-income securities in which GLOBAL DOLLAR GOVERNMENT invests
may include securities issued in connection with corporate
restructurings such as takeovers or leveraged buyouts, which may
pose particular risks. Securities issued to finance corporate
restructurings may have special credit risks due to the highly
leveraged conditions of the issuer. In addition, such issuers may
lose experienced management as a result of the restructuring.
Finally, the market price of such securities may be more volatile

<PAGE>

to the extent that expected benefits from the restructuring do
not materialize. The Fund may also invest in U.S. corporate
fixed-income securities that are not current in the payment of
interest or principal or are in default, so long as Alliance
believes such investment is consistent with the Fund's investment
objectives. The Fund's rights with respect to defaults on such
securities will be subject to applicable U.S. bankruptcy,
moratorium and other similar laws.

FOREIGN INVESTMENT. The securities markets of many foreign
countries are relatively small, with the majority of market
capitalization and trading volume concentrated in a limited
number of companies representing a small number of industries.
Consequently, a Fund whose investment portfolio includes such
securities may experience greater price volatility and
significantly lower liquidity than a portfolio invested solely in
securities of U.S. companies. These markets may be subject to
greater influence by adverse events generally affecting the
market, and by large investors trading significant blocks of
securities, than is usual in the United States. Securities
settlements may in some instances be subject to delays and
related administrative uncertainties. Furthermore, foreign
investment in the securities markets of certain foreign countries
is restricted or controlled to varying degrees. These
restrictions or controls may at times limit or preclude
investment in certain securities and may increase the cost and
expenses of a Fund. In addition, the repatriation of investment
income, capital or the proceeds of sales of securities from
certain of the countries is controlled under regulations,
including in some cases the need for certain advance government
notification or authority, and if a deterioration occurs in a
country's balance of payments, the country could impose temporary
restrictions on foreign capital remittances. A Fund could be
adversely affected by delays in, or a refusal to grant, any
required governmental approval for repatriation, as well as by
the application to it of other restrictions on investment.
Investing in local markets may require a Fund to adopt special
procedures or seek local governmental approvals or other actions,
any of which may involve additional costs to a Fund. The
liquidity of a Fund's investments in any country in which any of
these factors exists could be affected and Alliance will monitor
the effect of any such factor or factors on a Fund's investments.
Furthermore, transaction costs including brokerage commissions
for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the U.S.

Issuers of securities in foreign jurisdictions are generally
not subject to the same degree of regulation as are U.S. issuers

<PAGE>

with respect to such matters as insider trading rules,
restrictions on market manipulation, shareholder proxy
requirements and timely disclosure of information. The reporting,
accounting and auditing standards of foreign countries may
differ, in some cases significantly, from U.S. standards in
important respects and less information may be available to
investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S.
issuers.

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

WORLD INCOME may invest a portion of its net assets in
securities denominated in the ECU. There are risks associated
with concentration of investments in a particular region of the
world such as Western Europe since the economies and markets of
the countries in the region tend to be interrelated and may be
adversely affected by political, economic and other events in a
similar manner.

Alliance believes that, except for currency fluctuations
between the U.S. Dollar and the Canadian Dollar, the matters
described above are not likely to have a material adverse effect
on NORTH AMERICAN GOVERNMENT INCOME'S investments in the
securities of Canadian issuers or investments denominated in
Canadian issuers or investments denominated in Canadian Dollars.
The factors described above are more likely to have a material
adverse effect on the Fund's investments in the securities of
Mexican and other non-Canadian foreign issuers, including
investments in securities denominated in Mexican Pesos or other
non-Canadian foreign currencies. If not hedged, however, currency
fluctuations could affect the unrealized appreciation and

<PAGE>

depreciation of Canadian Government securities as expressed in
U.S. Dollars.

CURRENCY CONSIDERATIONS. Those Funds that invest some portion
of their assets in securities denominated in, and receive
revenues in, foreign currencies will be adversely affected by
reductions in the value of those currencies relative to the U.S.
Dollar. These changes will affect a Fund's net assets,
distributions and income. If the value of the foreign currencies
in which a Fund receives income falls relative to the U.S. Dollar
between receipt of the income and the making of Fund
distributions, a Fund may be required to liquidate securities in
order to make distributions if the Fund has insufficient cash in
U.S. Dollars to meet the distribution requirements that the Fund
must satisfy to qualify as a regulated investment company for
federal income tax purposes. Similarly, if an exchange rate
declines between the time a Fund incurs expenses in U.S. Dollars
and the time cash expenses are paid, the amount of the currency
required to be converted into U.S. Dollars in order to pay
expenses in U.S. Dollars could be greater than the equivalent
amount of such expenses in the currency at the time they were
incurred. In light of these risks, a Fund may engage in certain
currency hedging transactions, which themselves, involve certain
special risks. See "Additional Investment Practices" above.

SOVEREIGN DEBT OBLIGATIONS. No established secondary markets
may exist for many of the sovereign debt obligations in which
GLOBAL DOLLAR GOVERNMENT will invest. Reduced secondary market
liquidity may have an adverse effect on the market price and the
Fund's ability to dispose of particular instruments when
necessary to meet its liquidity requirements or in response to
specific economic events such as a deterioration in the
creditworthiness of the issuer. Reduced secondary market
liquidity for certain sovereign debt obligations may also make it
more difficult for the Fund to obtain accurate market quotations
for the purpose of valuing its portfolio. Market quotations are
generally available on many sovereign debt obligations only from
a limited number of dealers and may not necessarily represent
firm bids of those dealers or prices for actual sales.

By investing in sovereign debt obligations, the Fund will be
exposed to the direct or indirect consequences of political,
social and economic changes in various countries. Political
changes in a country may affect the willingness of a foreign
government to make or provide for timely payments of its
obligations. The country's economic status, as reflected, among
other things, in its inflation rate, the amount of its external

<PAGE>

debt and its gross domestic product, will also affect the
government's ability to honor its obligations.

The sovereign debt obligations in which the Fund will invest
in many cases pertain to countries that are among the world's
largest debtors to commercial banks, foreign governments,
international financial organizations and other financial
institutions. In recent years, the governments of some of these
countries have encountered difficulties in servicing their
external debt obligations, which led to defaults on certain
obligations and the restructuring of certain indebtedness.
Restructuring arrangements have included, among other things,
reducing and rescheduling interest and principal payments by
negotiating new or amended credit agreements or converting
outstanding principal and unpaid interest to Brady Bonds, and
obtaining new credit to finance interest payments. Certain
governments have not been able to make payments of interest on or
principal of sovereign debt obligations as those payments have
come due. Obligations arising from past restructuring agreements
may affect the economic performance and political and social
stability of those issuers.

The ability of governments to make timely payments on their
obligations is likely to be influenced strongly by the issuer's
balance of payments, including export performance, and its access
to international credits and investments. To the extent that a
country receives payment for its exports in currencies other than
dollars, its ability to make debt payments denominated in dollars
could be adversely affected. To the extent that a country
develops a trade deficit, it will need to depend on continuing
loans from foreign governments, multi-lateral organizations or
private commercial banks, aid payments from foreign governments
and on inflows of foreign investment. The access of a country to
these forms of external funding may not be certain, and a
withdrawal of external funding could adversely affect the
capacity of a government to make payments on its obligations. In
addition, the cost of servicing debt obligations can be affected
by a change in international interest rates since the majority of
these obligations carry interest rates that are adjusted
periodically based upon international rates.

The Fund is permitted to invest in sovereign debt obligations
that are not current in the payment of interest or principal or
are in default so long as Alliance believes it to be consistent
with the Fund's investment objectives. The Fund may have limited
legal recourse in the event of a default with respect to certain
sovereign debt obligations it holds. For example, remedies from
defaults on certain sovereign debt obligations, unlike those on

<PAGE>

private debt, must, in some cases, be pursued in the courts of
the defaulting party itself. Legal recourse therefore may be
significantly diminished. Bankruptcy, moratorium and other
similar laws applicable to issuers of sovereign debt obligations
may be substantially different from those applicable to issuers
of private debt obligations. The political context, expressed as
the willingness of an issuer of sovereign debt obligations to
meet the terms of the debt obligation, for example, is of
considerable importance. In addition, no assurance can be given
that the holders of commercial bank debt will not contest
payments to the holders of securities issued by foreign
governments in the event of default under commercial bank loan
agreements.

EFFECTS OF BORROWING. A Fund's loan agreements provide for
additional borrowings and for repayments and reborrowings from
time to time, and each Fund that may borrow expects to effect
borrowings and repayments at such times and in such amounts as
will maintain investment leverage in an amount approximately
equal to its borrowing target. The loan agreements provide for a
selection of interest rates that are based on the bank's short-
term funding costs in the U.S. and London markets.

Borrowings by a Fund result in leveraging of the Fund's
shares of common stock. Utilization of leverage, which is usually
considered speculative, however, involves certain risks to a
Fund's shareholders. These include a higher volatility of the net
asset value of a Fund's shares of common stock and the relatively
greater effect on the net asset value of the shares. So long as a
Fund is able to realize a net return on its investment portfolio
that is higher than the interest expense paid on borrowings, the
effect of leverage will be to cause the Fund's shareholders to
realize a higher current net investment income than if the Fund
were not leveraged. On the other hand, interest rates on U.S.
Dollar-denominated and foreign currency-denominated obligations
change from time to time as does their relationship to each
other, depending upon such factors as supply and demand forces,
monetary and tax policies within each country and investor
expectations. Changes in such factors could cause the
relationship between such rates to change so that rates on U.S.
Dollar-denominated obligations may substantially increase
relative to the foreign currency-denominated obligations in which
the Fund may be invested. To the extent that the interest expense
on borrowings approaches the net return on a Fund's investment
portfolio, the benefit of leverage to the Fund's shareholders
will be reduced, and if the interest expense on borrowings were
to exceed the net return to shareholders, a Fund's use of
leverage would result in a lower rate of return than if a Fund

<PAGE>

were not leveraged. Similarly, the effect of leverage in a
declining market could be a greater decrease in net asset value
per share than if the Fund were not leveraged. In an extreme case
if a Fund's current investment income were not sufficient to meet
the interest expense on borrowings, it could be necessary for the
Fund to liquidate certain of its investments, thereby reducing
the net asset value of a Fund's shares.

In the event of an increase in rates on U.S. Government
securities or other changed market conditions, to the point where
leverage by either MULTI-MARKET STRATEGY or NORTH AMERICAN
GOVERNMENT INCOME could adversely affect the Funds' shareholders,
as noted above, or in anticipation of such changes, either Fund
may increase the percentage of its investment portfolio invested
in U.S. Government securities, which would tend to offset the
negative impact of leverage on Fund shareholders. Either Fund may
also reduce the degree to which it is leveraged by repaying
amounts borrowed.

Under the 1940 Act, a Fund is not permitted to borrow unless
immediately after such borrowing there is "asset coverage," as
that term is defined and used in the 1940 Act, of at least 300%
for all borrowings of the Fund. In addition, under the 1940 Act,
in the event asset coverage falls below 300%, a Fund must within
three days reduce the amount of its borrowing to such an extent
that the asset coverage of its borrowings is at least 300%.
Assuming, for example, outstanding borrowings representing not
more than one-third of a Fund's total assets less liabilities
(other than such borrowings), the asset coverage of the Fund's
portfolio would be 300%; while outstanding borrowings
representing 25% of the Fund's total assets less liabilities
(other than such borrowings), the asset coverage of the Fund's
portfolio would be 400%. A Fund will maintain asset coverage of
outstanding borrowings of at least 300% and if necessary will, to
the extent possible, reduce the amounts borrowed by making
repayments from time to time in order to do so. Such repayments
could require a Fund to sell portfolio securities at times
considered disadvantageous by Alliance. In the event that a Fund
is required to sell portfolio securities in order to make
repayments, such sales of portfolio securities could cause the
Fund to incur related transaction costs and might cause the Fund
to realize gains on securities held for less than three months.
Because not more than 30% of a Fund's gross income may be derived
from the sale or disposition of stocks and securities held for
less than three months to maintain the Fund's tax status as a
regulated investment company, such gains would limit the ability
of a Fund to sell other securities held for less than three
months that a Fund might wish to sell in the ordinary course of

<PAGE>

its portfolio management and thus might adversely affect the
Fund's yield. See "Dividends, Distributions and Taxes."

Each of MULTI-MARKET STRATEGY, NORTH AMERICAN GOVERNMENT
INCOME and GLOBAL DOLLAR GOVERNMENT may also borrow to repurchase
its shares or to meet redemption requests. In addition, each Fund
may borrow for temporary purposes (including the purposes
mentioned in the preceding sentence) in an amount not exceeding
5% of the value of the assets of the Fund. Borrowings for
temporary purposes are not subject to the 300% asset average
limit described above. See "Certain Fundamental Investment
Policies." SHORT-TERM U.S. GOVERNMENT, MULTI-MARKET STRATEGY,
NORTH AMERICAN GOVERNMENT INCOME and GLOBAL DOLLAR GOVERNMENT may
also borrow through the use of reverse repurchase agreements, and
GLOBAL DOLLAR GOVERNMENT also through the use of dollar rolls to
the extent permitted by the 1940 Act. See "Investment Objectives
and Policies-Reverse Repurchase Agreements and Dollar Rolls."

INVESTMENT IN THE BANKING INDUSTRY. Due to the investment
policies of MULTI-MARKET STRATEGY, WORLD INCOME and SHORT-TERM
MULTI-MARKET with respect to investments in the banking industry,
those Funds will have greater exposure to the risk factors which
are characteristic of such investments. In particular, the value
of and investment return on each Fund's shares will be affected
by economic or regulatory developments in or related to the
banking industry. Sustained increases in interest rates can
adversely affect the availability and cost of funds for a bank's
lending activities, and a deterioration in general economic
conditions could increase the exposure to credit losses. The
banking industry is also subject to the effects of: the
concentration of loan portfolios in particular business such as
real estate, energy, agriculture or high technology-related
companies; national and local regulation; and competition within
those industries as well as with other types of financial
institutions. In addition, each Fund's investments in commercial
banks located in several foreign countries are subject to
additional risks due to the combination in such banks of
commercial banking and diversified securities activities. As
discussed above, however, the Funds will seek to minimize their
exposure to such risks by investing only in debt securities which
are determined to be of high quality.

SECURITIES RATINGS. The ratings of fixed-income securities by
S&P, Moody's, Duff & Phelps and Fitch are a generally accepted
barometer of credit risk. They are, however, subject to certain
limitations from an investor's standpoint. The rating of an
issuer is heavily weighted by past developments and does not
necessarily reflect probable future conditions. There is

<PAGE>

frequently a lag between the time a rating is assigned and the
time it is updated. In addition, there may be varying degrees of
difference in credit risk of securities within each rating
category.

INVESTMENT IN FIXED-INCOME SECURITIES RATED BAA AND BBB.
Securities rated Baa or BBB are considered to have speculative
characteristics and share some of the same characteristics as
lower-rated securities, as described below. Sustained periods of
deteriorating economic conditions or of rising interest rates are
more likely to lead to a weakening in the issuer's capacity to
pay interest and repay principal than in the case of higher-rated
securities.

INVESTMENT IN LOWER-RATED FIXED-INCOME SECURITIES. Lower-
rated securities are subject to greater risk of loss of principal
and interest than higher-rated securities. They are also
generally considered to be subject to greater market risk than
higher-rated securities, and the capacity of issuers of lower-
rated securities to pay interest and repay principal is more
likely to weaken than is that of issuers of higher-rated
securities in times of deteriorating economic conditions or
rising interest rates. In addition, lower-rated securities may be
more susceptible to real or perceived adverse economic conditions
than investment grade securities, although the market values of
securities rated below investment grade and comparable unrated
securities tend to react less to fluctuations in interest rate
levels than do those of higher-rated securities.

Securities rated Ba or BB are judged to have speculative
elements or to be predominantly speculative with respect to the
issuer's ability to pay interest and repay principal. Securities
rated B are judged to have highly speculative elements or to be
predominantly speculative. Such securities may have small
assurance of interest and principal payments. Securities rated
Baa by Moody's are also judged to have speculative
characteristics.

The market for lower-rated securities may be thinner and less
active than that for higher-rated securities, which can adversely
affect the prices at which these securities can be sold. To the
extent that there is no established secondary market for lower-
rated securities, a Fund may experience difficulty in valuing
such securities and, in turn, the Fund's assets. Under the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989, federally-insured savings and loan associations were
required to have divested their investments in non-investment
grade corporate debt securities by July 1, 1994. Such divestiture

<PAGE>

and continuing restrictions on the ability of such associations
to acquire lower-rated securities could have a material adverse
effect on the market and prices of such securities.

Alliance will try to reduce the risk inherent in investment
in lower-rated securities through credit analysis,
diversification and attention to current developments and trends
in interest rates and economic and political conditions. However,
there can be no assurance that losses will not occur. Since the
risk of default is higher for lower-rated securities, Alliance's
research and credit analysis are a correspondingly more important
aspect of its program for managing a Fund's securities than would
be the case if a Fund did not invest in lower-rated securities.
In considering investments for the Fund, Alliance will attempt to
identify those high-yielding securities whose financial condition
is adequate to meet future obligations, has improved, or is
expected to improve in the future. Alliance's analysis focuses on
relative values based on such factors as interest or dividend
coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.

NON-RATED SECURITIES. Non-rated securities will also be
considered for investment by NORTH AMERICAN GOVERNMENT INCOME,
GLOBAL DOLLAR GOVERNMENT and CORPORATE BOND when Alliance
believes that the financial condition of the issuers of such
securities, or the protection afforded by the terms of the
securities themselves, limits the risk to the Fund to a degree
comparable to that of rated securities which are consistent with
the Fund's objective and policies.

NON-DIVERSIFIED STATUS. Each of WORLD INCOME, SHORT-TERM
MULTI-MARKET, MULTI-MARKET STRATEGY, NORTH AMERICAN GOVERNMENT
INCOME and GLOBAL DOLLAR GOVERNMENT is a "non-diversified"
investment company, which means the Fund is not limited in the
proportion of its assets that may be invested in the securities
of a single issuer. However, each Fund intends to conduct its
operations so as to qualify to be taxed as a "regulated
investment company" for purposes of the Code, which will relieve
the Fund of any liability for federal income tax to the extent
its earnings are distributed to shareholders. See "Dividends,
Distributions and Taxes" in each Fund's Statement of Additional
Information. To so qualify, among other requirements, each Fund
will limit its investments so that, at the close of each quarter
of the taxable year, (i) not more than 25% of the Fund's total
assets will be invested in the securities of a single issuer, and
(ii) with respect to 50% of its total assets, not more than 5% of
its total assets will be invested in the securities of a single
issuer and the Fund will not own more than 10% of the outstanding

<PAGE>

voting securities of a single issuer. A Fund's investments in
U.S. Government securities are not subject to these limitations.
Because each of WORLD INCOME, SHORT-TERM MULTI-MARKET, MULTI-
MARKET STRATEGY, NORTH AMERICAN GOVERNMENT INCOME and GLOBAL
DOLLAR GOVERNMENT is a non-diversified investment company, it may
invest in a smaller number of individual issuers than a
diversified investment company, and an investment in such Fund
may, under certain circumstances, present greater risk to an
investor than an investment in a diversified investment company.

Foreign government securities are not treated like U.S.
Government securities for purposes of the diversification tests
described in the preceding paragraph, but instead are subject to
these tests in the same manner as the securities of non-
governmental issuers. In this regard sovereign debt obligations
issued by different issuers located in the same country are often
treated as issued by a single issuer for purposes of these
diversification tests. Certain issuers of structured securities
and loan participations may be treated as separate issuers for
the purposes of these tests. Accordingly, in order to meet the
diversification tests and thereby maintain its status as a
regulated investment company, NORTH AMERICAN GOVERNMENT INCOME
will be required to diversify its portfolio of foreign government
securities in a manner which would not be necessary if the Fund
had made similar investments in U.S. Government securities.

________________________________________________________________

PURCHASE AND SALE OF SHARES
________________________________________________________________

HOW TO BUY SHARES

You can purchase shares of any of the Funds through broker-
dealers, banks or other financial intermediaries, or directly
through Alliance Fund Distributors, Inc. ("AFD"), each Fund's
principal underwriter. The minimum initial investment in each
Fund (except WORLD INCOME) is $250. The minimum for subsequent
investments in each Fund is $50. Investments of $25 or more are
allowed under the automatic investment program of each Fund.
Share certificates are issued only upon request. See the
Subscription Application and Statements of Additional Information
for more information.

Each Fund offers three classes of shares, Class A, Class B
and Class C, except that WORLD INCOME offers only one class of
shares that you can purchase without any initial sales charge or
contingent deferred sales charge ("CDSC").

<PAGE>

CLASS A SHARES-INITIAL SALES CHARGE ALTERNATIVE

You can purchase Class A shares at net asset value plus an
initial sales charge, as follows:

Initial Sales Charge
as % of Commission to
Net Amount as % of Dealer/Agent as %
Amount Purchased Invested Offering Price of Offering Price
- -------------------------------- --------- -------------- -----------------
Less than $100,000 4.44% 4.25% 4.00%
$100,000 to less than $250,000 3.36 3.25 3.00
$250,000 to less than $500,000 2.30 2.25 2.00
$500,000 to less than $1,000,000 1.78 1.75 1.50

On purchases of $1,000,000 or more, you pay no initial sales
charge but may pay a CDSC equal to 1% of the lesser of net asset
value at the time of redemption or original cost if you redeem
within one year; Alliance may pay the dealer or agent a fee of up
to 1% of the dollar amount purchased. Certain purchases of Class
A shares may qualify for reduced or eliminated sales charges in
accordance with a Fund's Combined Purchase Privilege, Cumulative
Quantity Discount, Statement of Intention, Privilege for Certain
Retirement Plans, Reinstatement Privilege and Sales at Net Asset
Value programs. Consult the Subscription Application and
Statements of Additional Information.

CLASS B SHARES-DEFERRED SALES CHARGE ALTERNATIVE

You can purchase Class B shares at net asset value without an
initial sales charge. However, you may pay a CDSC if you redeem
shares within three years after purchase. Shares obtained from
dividend or distribution reinvestment are not subject to the
CDSC. The amount of the CDSC (expressed as a percentage of the
lesser of the current net asset value or original cost) will vary
according to the number of years from the purchase of Class B
shares until the redemption of those shares. The amount of the
CDSC for each Fund is as set forth below. Class B shares of a
Fund purchased prior to the date of this Prospectus may be
subject to a different CDSC schedule, which was disclosed in the
Fund's prospectus in use at the time of purchase and is set forth
in the Fund's current Statement of Additional Information.

<PAGE>

Year Since Purchase CDSC
-----------------------------
First 3.0%
Second 2.0%
Third 1.0%
Thereafter None

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

CLASS C SHARES-ASSET-BASED SALES CHARGE ALTERNATIVE You can
purchase Class C shares without any initial sales charge or a
CDSC. A Fund will thus receive the full amount of your purchase,
and you will receive the entire net asset value of your shares
upon redemption. Class C shares incur higher distribution fees
than Class A shares and do not convert to any other class of
shares of the Fund. The higher fees mean a higher expense ratio,
so Class C shares pay correspondingly lower dividends and may
have a lower net asset value than Class A shares.

APPLICATION OF THE CDSC

Shares obtained from dividend or distribution reinvestment
are not subject to the CDSC on Class A and Class B shares. The
CDSC is deducted from the amount of the redemption and is paid to
AFD. The CDSC will be waived on redemptions of shares following
the death or disability of a shareholder, to meet the
requirements of certain qualified retirement plans or pursuant to
a systematic withdrawal plan. See the Statements of Additional
Information.

HOW THE FUNDS VALUE THEIR SHARES

The net asset value of each class of shares of a Fund is
calculated by dividing the value of the Fund's net assets
allocable to that class by the outstanding shares of that class.
Shares are valued each day the New York Stock Exchange (the
"Exchange") is open as of the close of regular trading (currently
4:00 p.m. Eastern time). The securities in a Fund are valued at
their current market value determined on the basis of market
quotations or, if such quotations are not readily available, such
other methods as the Fund's Directors believe would accurately
reflect fair market value.

<PAGE>

GENERAL

The decision as to which class of shares is more beneficial
to you depends on the amount and intended length of your
investment. If you are making a large investment, thus qualifying
for a reduced sales charge, you might consider Class A shares. If
you are making a smaller investment, you might consider Class B
shares because 100% of your purchase is invested immediately. If
you are unsure of the length of your investment, you might
consider Class C shares because there are no initial or
contingent deferred sales charges. Consult your financial agent.
Dealers and agents may receive differing compensation for selling
Class A, Class B or Class C shares. There is no size limit on
purchases of Class A shares. The maximum purchase of Class B
shares is $250,000. The maximum purchase of Class C shares is
$5,000,000. The Funds may refuse any order to purchase shares.

In addition to the discount or commission paid to dealers or
agents, AFD from time to time pays additional cash or other
incentives to dealers or agents, including Equico Securities,
Inc., an affiliate of AFD, in connection with the sale of shares
of the Funds. Such additional amounts may be utilized, in whole
or in part, in some cases together with other revenues of such
dealers or agents, to provide additional compensation to
registered representatives who sell shares of the Funds. On some
occasions, such cash or other incentives will be conditioned upon
the sale of a specified minimum dollar amount of the shares of a
Fund and/or other Alliance Mutual Funds during a specific period
of time. Such incentives may attendance at seminars, meals,
sporting events or theater performances, or payment for travel,
lodging and entertainment incurred in connection with travel by
persons associated with a dealer or agent and their immediate
family members to urban or resort locations within or outside the
United States. Such dealer or agent may elect to receive cash
incentives of equivalent amount in lieu of such payments.

HOW TO SELL SHARES

You may "redeem", i.e., sell your shares in a Fund to the
Fund on any day the Exchange is open, either directly or through
your financial intermediary. The price you will receive is the
net asset value (less any applicable CDSC for Class A and Class B
shares) next calculated after the Fund receives your request in
proper form. Proceeds generally will be sent to you within seven
days. However, for shares recently purchased by check or
electronic funds transfer, a Fund will not send proceeds until it
is reasonably satisfied that the check or electronic funds
transfer has been collected (which may take up to 15 days).

<PAGE>

SELLING SHARES THROUGH YOUR BROKER

A Fund must receive your broker's request before 4:00 p.m.
Eastern time for you to receive that day's net asset value (less
any applicable CDSC for Class A and Class B shares). Your broker
is responsible for furnishing all necessary documentation to a
Fund and may charge you for this service.

SELLING SHARES DIRECTLY TO A FUND

Send a signed letter of instruction or stock power form to
Alliance Fund Services, Inc. ("AFS"), each Fund's registrar,
transfer agent and dividend-disbursing agent, along with
certificates, if any, that represent the shares you want to sell.
For your protection, signatures must be guaranteed by a bank, a
member firm of a national stock exchange or other eligible
guarantor institution. Stock power forms are available from your
financial intermediary, AFS, and many commercial banks.
Additional documentation is required for the sale of shares by
corporations, intermediaries, fiduciaries and surviving joint
owners. For details contact:

Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
800-221-5672

Alternatively, a request for redemption of shares for which
no stock certificates have been issued can also be made by
telephone to 800-221-5672 by a shareholder who has completed the
Subscription Application or an "Autosell" application obtained
from AFS. Telephone redemption requests must be for at least $500
and may not exceed $100,000, and must be made between 9 a.m. and
4 p.m. Eastern time on a Fund business day. Proceeds of telephone
redemptions will be sent by electronic funds transfer. Proceeds
of telephone redemptions also may be sent by check to a
shareholder's address of record, but only once in any 30-day
period and in an amount not exceeding $50,000. Telephone
redemption by check is not available for shares purchased within
15 calendar days prior to the redemption request, shares held in
nominee or "street name" accounts or retirement plan accounts or
shares held by a shareholder who has changed his or her address
of record within the previous 30 calendar days.

<PAGE>

GENERAL

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

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

SHAREHOLDER SERVICES

AFS offers a variety of shareholder services. For more
information about these services or your account, call AFS's
toll-free number, 800-221-5672. Some services are described in
the attached Application. A shareholder's manual explaining all
available services will be provided upon request. To request a
shareholder manual, call 800-227-4618.

HOW TO EXCHANGE SHARES

You may exchange your shares of WORLD INCOME for Class A
shares of other Alliance Mutual Funds and shares of most Alliance
money market funds. You may exchange your shares of any other
Fund for shares of the same class of other Alliance Mutual Funds
(including AFD Exchange Reserves, a money market fund managed by
Alliance). Exchanges of shares are made at the net asset values
next determined, without sales or service charges. Exchanges may
be made by telephone or written request.

Class A and Class B shares will continue to age without
regard to exchanges for the purpose of determining the CDSC, if
any, upon redemption and, in the case of Class B shares, for the
purpose of conversion to Class A shares. After an exchange, your
Class B shares will automatically convert to Class A shares in
accordance with the conversion schedule applicable to the Class B

<PAGE>

shares of the Alliance Mutual Fund you originally purchased for
cash ("original shares"). When redemption occurs, the CDSC
applicable to the original shares is applied.

Please read carefully the prospectus of the mutual fund into
which you are exchanging before submitting the request. Call AFS
at 800-221-5672 to exchange uncertificated shares. An exchange is
a taxable capital transaction for federal tax purposes. The
exchange service may be changed, suspended, or terminated on 60
days' written notice.

________________________________________________________________

MANAGEMENT OF THE FUNDS
________________________________________________________________

ADVISER

Alliance, which is a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an advisory agreement (the
"Advisory Agreement") to provide investment advice and, in
general, to conduct the management and investment program of each
Fund, subject to the general supervision and control of the
Directors or Trustess of the Fund.

Alliance is a leading international investment manager
supervising client accounts with assets as of September 30, 1995
totaling more than $140 billion (of which more than $47 billion
represented the assets of investment companies). Alliance's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds. The 50 registered investment
companies managed by Alliance comprising 104 separate investment
portfolios currently have over two million shareholders. As of
September 30, 1995, Alliance was retained as an investment
manager for 29 of the Fortune 100 companies.

Alliance Capital Management Corporation ("ACMC"), the sole
general partner of, and the owner of a 1% general partnership
interest in, Alliance, is an indirect wholly-owned subsidiary of
The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States, which is a wholly-owned subsidiary of The
Equitable Companies Incorporated, a holding company controlled by
AXA, a French insurance holding company. Certain information
concerning the ownership and control of Equitable by AXA is set

<PAGE>

forth in each Fund's Statement of Additional Information under
"Management of the Fund."

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

Principal occupation
Employee; time period; during the past
Fund title with ACMC five years
____ _______________________ _____________________

Short-Term U.S. Patricia J. Young since 1995 Associated with
Government -Senior Vice President Alliance since
March 1992;
prior thereto, a
managing director
and portfolio
manager for
Hyperion Capital
since March
1991 and a
managing director
with Fischer, Francis,
Trees & Watts

Paul A. Ullman Associated with
since 1995-Vice President Alliance since
March 1992; prior
thereto, a director and
portfolio manager for
Hyperion Capital since
July 1990 and a
Vice President at
Salomon Brothers Inc.

U.S. Government Wayne D. Lyski since 1983 Associated with
Alliance

Paul J. DeNoon since Associated with
January 1992- Alliance
Vice President since January 1992;
prior thereto, a
Vice President at

<PAGE>

Manufacturers
Hanover Trust

Limited Maturity
Government Patricia J. Young since (see above)
inception-
(see above)

Paul A. Ullman (see above)
since inception-
(see above)

Mortgage Securities Patricia J. Young (see above)
March 1992-(see above)

World Income Douglas J. Peebles since Associated with
inception-Vice President Alliance

Short-Term Douglas J. Peebles since (see above)
Multi-Market 1995-(see above)

Multi-Market Strategy Douglas J. Peebles since (see above)
inception-(see above)

North American Wayne D. Lyski since inception (see above)
Government Income -(see above)

Global Dollar Wayne D. Lyski since inception (see above)
Government -(see above)

Corporate Bond Wayne D. Lyski since (see above)
1987-(see above)

Paul J. DeNoon since (see above)
January 1992-(see above)

DISTRIBUTION SERVICES AGREEMENTS

Rule 12b-1 adopted by the Commission under the 1940 Act
permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a duly adopted
plan. Each Fund has adopted one or more "Rule 12b-1 plans" (for
each Fund, a "Plan") and has entered into a Distribution Services
Agreement (the "Agreement") with AFD. Pursuant to its Plan, a
Fund pays to AFD a Rule 12b-1 distribution services fee, which
may not exceed for each Fund other than WORLD INCOME an annual
rate of .30% (.50% with respect to SHORT-TERM U.S. GOVERNMENT) of

<PAGE>

the Fund's aggregate average daily net assets attributable to the
Class A shares, 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B shares and 1.00% of the Fund's
aggregate average daily net assets attributable to the Class C
shares, and for WORLD INCOME may not exceed an annual rate of
.90% of the Fund's aggregate average daily net assets, for
distribution expenses. The Trustees of SHORT-TERM U.S. GOVERNMENT
currently limit payments with respect to Class A shares under the
Plan to .30% of the Fund's aggregate average daily net assets
attributable to Class A shares. The Plans provide that a portion
of the distribution services fee in an amount not to exceed .25%
of the aggregate average daily net assets of each Fund
attributable to each class of shares constitutes a service fee
used for personal service and/or the maintenance of shareholder
accounts.

The Plans provide that AFD will use the distribution services
fee received from a Fund in its entirety for payments (i) to
compensate broker-dealers or other persons for providing
distribution assistance, (ii) to otherwise promote the sale of
shares of the Fund, and (iii) to compensate broker-dealers,
depository institutions and other financial intermediaries for
providing administrative, accounting and other services with
respect to the Fund's shareholders. In this regard, some payments
under the Plans are used to compensate financial intermediaries
with trail or maintenance commissions in an amount equal to, with
respect to each Fund other than WORLD INCOME, .25%, annualized,
with respect to Class A shares and Class B shares, and 1.00%,
annualized, with respect to Class C shares, and, with respect to
WORLD INCOME, .90%, annualized, of the assets maintained in a
Fund by their customers. Distribution services fees received from
WORLD INCOME and the other Funds, except SHORT-TERM U.S.
GOVERNMENT, with respect to Class A shares will not be used to
pay any interest expenses, carrying charges or other financing
costs or allocation of overhead of AFD. Distribution services
fees received from the Funds, with respect to Class B and Class C
shares, may be used for these purposes. The Plans also provide
that Alliance may use its own resources to finance the
distribution of each Fund's shares.

The Funds are not obligated under the Plans to pay any
distribution services fee in excess of the amounts set forth
above. Except as noted below for SHORT-TERM U.S. GOVERNMENT, with
respect to Class A shares of each Fund, distribution expenses
accrued by AFD in one fiscal year may not be paid from
distribution services fees received from the Fund in subsequent
fiscal years. AFD's compensation with respect to Class B and
Class C shares under the Plans of the other Funds is directly

<PAGE>

tied to the expenses incurred by AFD. Actual distribution
expenses for Class B and Class C shares for any given year,
however, will probably exceed the distribution services fees
payable under the applicable Plan with respect to the class
involved and, in the case of Class B shares, payments received
from CDSCs. The excess will be carried forward by AFD and
reimbursed from distribution services fees payable under the Plan
with respect to the class involved and, in the case of Class B
shares, payments subsequently received through CDSCs, so long as
the Plan is in effect. Since AFD's compensation under the Plan of
SHORT-TERM U.S. GOVERNMENT is not directly tied to its expenses
incurred, the amount of compensation received by it during any
year may be more or less than its actual expenses.

Unreimbursed distribution expenses incurred as of the end of
each Fund's most recently completed fiscal year, and carried over
for reimbursement in future years in respect of the Class B and
Class C shares for all Funds (except SHORT-TERM U.S. GOVERNMENT),
were, as of that time, as follows:

<PAGE>

Amount of Unreimbursed Distribution Expenses
(as % of Net Assets of Class)
--------------------------------------------
Class B Class C
- ---------------------------------------------------------------
Short-Term U.S.
Government $ 348,789 (5.47%) $500,617 (9.67%)
U.S. Government $13,511,108 (1.75%) $2,224,264 (1.22%)
Limited Maturity
Government $ 1,042,848 (.76%) $1,875,176 (1.32%)
Mortgage Securities
Income $16,372,116 (1.78%) $1,459,018 (2.50%)
Short-Term
Multi-Market $12,115,694 (1.21%) $ 798,673 (9.82%)
Multi-Market
Strategy $ 7,254,301 (3.10%) $ 286,168 (22.85%)
North American
Government Income $29,558,594 (1.80%) $2,355,558 (.64%)
Global Dollar
Government $ 1,832,297 (2.94%) $ 174,111 (1.87%)
Corporate Bond $ 5,476,418 (2.27%) $ 607,167 (1.19%)

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

The Glass-Steagall Act and other applicable laws may limit
the ability of a bank or other depository institution to become
an underwriter or distributor of securities. However, in the
opinion of the Funds' management, based on the advice of counsel,
these laws do not prohibit such depository institutions from
providing services for investment companies such as the
administrative, accounting and other services referred to in the
Agreements. In the event that a change in these laws prevented a
bank from providing such services, it is expected that other
service arrangements would be made and that shareholders would
not be adversely affected. The State of Texas requires that
shares of a Fund may be sold in that state only by dealers or

<PAGE>

other financial institutions that are registered there as broker-
dealers.

________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________

DIVIDENDS AND DISTRIBUTIONS

Dividends on shares of a Fund will be declared on each Fund
business day from the Fund's net investment income. Dividends on
shares for Saturdays, Sundays and holidays will be declared on
the previous business day. Each Fund pays dividends on its shares
after the close of business on the 20th day of each month or, if
such day is not a business day, the first business day
thereafter. At your election (which you may change at least 30
days prior to the record date for a particular dividend or
distribution), dividends and distributions are paid in cash or
reinvested in additional shares without charge.

If you receive an income dividend or capital gains
distribution in cash you may, within 30 days following the date
of its payment, reinvest the dividend or distribution in
additional shares of that Fund without charge by returning to
Alliance, with appropriate instructions, the check representing
such dividend or distribution. Thereafter, unless you otherwise
specify, you will be deemed to have elected to reinvest all
subsequent dividends and distributions in shares of that Fund.

Cash dividends can be paid by check or, if the shareholder so
elects, electronically via the ACH network. There is no sales or
other charge in connection with the reinvestment of dividends and
capital gains distributions. Dividends paid by a Fund, if any,
with respect to Class A, Class B and Class C shares will be
calculated in the same manner at the same time on the same day
and will be in the same amount, except that the higher
distribution services fees applicable to Class B and Class C
shares, and any incremental transfer agency costs relating to
Class B shares, will be borne exclusively by the class to which
they relate.

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

<PAGE>

assurance that a Fund will pay any dividends or realize any
capital gains.

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

FOREIGN INCOME TAXES

Investment income received by a Fund from sources within
foreign countries may be subject to foreign income taxes withheld
at the source. To the extent that any Fund is liable for foreign
income taxes withheld at the source, each Fund intends, if
possible, to operate so as to meet the requirements of the Code
to "pass through" to the Fund's shareholders credits for foreign
income taxes paid, but there can be no assurance that any Fund
will be able to do so.

U.S. FEDERAL INCOME TAXES

Each Fund intends to qualify to be taxed as a "regulated
investment company" under the Code. To the extent that a Fund
distributes its taxable income and net capital gain to its
shareholders, qualification as a regulated investment company
relieves that Fund of federal income and excise taxes on that
part of its taxable income including net capital gains which it
pays out to its shareholders. Dividends out of net ordinary
income and distributions of net short-term capital gains are
taxable to the recipient shareholders as ordinary income. In the
case of corporate shareholders, such dividends from certain Funds
may be eligible for the dividends-received deduction, except that
the amount eligible for the deduction is limited to the amount of
qualifying dividends received by the Fund. A corporation's
dividends-received deduction will be disallowed unless the
corporation holds shares in the Fund at least 46 days.
Furthermore, the dividends-received deduction will be disallowed
to the extent a corporation's investment in shares of a Fund is
financed with indebtedness.

The excess of net long-term capital gains over the net short-
term capital losses realized and distributed by each Fund to its
shareholders as capital gains distributions is taxable to the
shareholders as long-term capital gains, irrespective of the
length of time a shareholder may have held his or her stock.
Long-term capital gains distributions are not eligible for the
dividends-received deduction referred to above.

100

<PAGE>

Under the current federal tax law the amount of an income
dividend or capital gains distribution declared by a Fund during
October, November or December of a year to shareholders of record
as of a specified date in such a month that is paid during
January of the following year is includable in the prior year's
taxable income of shareholders that are calendar year taxpayers.

Any dividend or distribution received by a shareholder on
shares of a Fund will have the effect of reducing the net asset
value of such shares by the amount of such dividend or
distribution. Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder,
although in effect a return of capital to that particular
shareholder, would be taxable to him or her as described above.
If a shareholder held shares six months or less and during that
period received a distribution taxable to such shareholder as
long-term capital gain, any loss realized on the sale of such
shares during such six-month period would be a long-term capital
loss to the extent of such distribution.

A dividend or capital gains distribution with respect to
shares of a Fund held by a tax-deferred or qualified plan, such
as an individual retirement account, 403(b)(7) retirement plan or
corporate pension or profit-sharing plan, will not be taxable to
the plan. Distributions from such plans will be taxable to
individual participants under applicable tax rules without regard
to the character of the income earned by the qualified plan.

Distributions by a Fund may be subject to state and local
taxes. U.S. GOVERNMENT, LIMITED MATURITY GOVERNMENT, MORTGAGE
SECURITIES INCOME, WORLD INCOME, SHORT-TERM MULTI-MARKET, MULTI-
MARKET STRATEGY, NORTH AMERICAN GOVERNMENT INCOME and CORPORATE
BOND are qualified to do business in the Commonwealth of
Pennsylvania and, therefore, are subject to the Pennsylvania
foreign franchise and corporate net income tax in respect of
their business activities in Pennsylvania. Accordingly, shares of
such Funds are exempt from Pennsylvania personal property taxes.
These Funds anticipate continuing such business activities but
reserve the right to suspend them at any time, resulting in the
termination of the exemptions.

A Fund will be required to withhold 31% of any payments made
to a shareholder if the shareholder has not provided a certified
taxpayer identification number to the Fund, or the Secretary of
the Treasury notifies a Fund that a shareholder has not reported
all interest and dividend income required to be shown on the
shareholder's Federal income tax return.

101

<PAGE>

Shareholders will be advised annually as to the federal tax
status of dividends and capital gains distributions made by a
Fund for the preceding year. Shareholders are urged to consult
their tax advisers regarding their own tax situation.

________________________________________________________________

GENERAL INFORMATION
________________________________________________________________

PORTFOLIO TRANSACTIONS

Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking
best price and execution, a Fund may consider sales of its shares
as a factor in the selection of dealers to enter into portfolio
transactions with the Fund.

ORGANIZATION

Each of the following Funds is a Maryland corporation
organized in the year indicated: U.S. GOVERNMENT PORTFOLIO and
CORPORATE BOND PORTFOLIO (each a series of Alliance Bond Fund,
Inc.) (1973), ALLIANCE LIMITED MATURITY GOVERNMENT FUND, INC.
(1992), ALLIANCE MORTGAGE SECURITIES INCOME FUND, INC. (1983),
ALLIANCE WORLD INCOME TRUST, INC. (1990), ALLIANCE SHORT-TERM
MULTI-MARKET TRUST, INC. (1989), ALLIANCE MULTI-MARKET STRATEGY
TRUST, INC. (1991), ALLIANCE NORTH AMERICAN GOVERNMENT INCOME
TRUST, INC. (1992) and ALLIANCE GLOBAL DOLLAR GOVERNMENT FUND,
INC. (1993). Prior to January 4, 1993, CORPORATE BOND PORTFOLIO
was known as Monthly Income Portfolio. Prior to [ ], 1996,
LIMITED MATURITY GOVERNMENT was known as Alliance Mortgage
Strategy Trust, Inc. ALLIANCE SHORT-TERM U.S. GOVERNMENT FUND is
a series of The Alliance Portfolios, a Massachusetts business
trust that was organized in 1987. Prior to August 2, 1993, The
Alliance Portfolios was known as The Equitable Funds and SHORT-
TERM U.S. GOVERNMENT was known as The Equitable Short-Term U.S.
Government Fund.

It is anticipated that annual shareholder meetings will not
be held; shareholder meetings will be held only when required by
federal, or in the case of the Funds organized as Maryland
corporations, state law. Shareholders have available certain
procedures for the removal of Directors.

A shareholder in a Fund will be entitled to his or her pro
rata share of all dividends and distributions arising from the
Fund's assets and, upon redeeming shares, will receive the then

102

<PAGE>

current net asset value of the Fund represented by the redeemed
shares less any applicable CDSC. The Funds are empowered to
establish, without shareholder approval, additional portfolios,
which may have different investment objectives, and additional
classes of shares. If an additional portfolio or class were
established in a Fund, each share of the portfolio or class would
normally be entitled to one vote for all purposes. Generally,
shares of each portfolio and class would vote together as a
single class on matters, such as the election of Directors, that
affect each portfolio and class in substantially the same manner.
Class A, Class B and Class C shares have identical voting,
dividend, liquidation and other rights, except that each class
bears its own distribution and transfer agency expenses. Each
class of shares votes separately with respect to a Fund's Rule
12b-1 distribution plan and other matters for which separate
class voting is appropriate under applicable law. Shares are
freely transferable, are entitled to dividends as determined by
the Directors and, in liquidation of a Fund, are entitled to
receive the net assets of the Fund. Since this Prospectus sets
forth information about all the Funds, it is theoretically
possible that a Fund might be liable for any materially
inaccurate or incomplete disclosure in this Prospectus concerning
another Fund. Based on the advice of counsel, however, the Funds
believe that the potential liability of each Fund with respect to
the disclosure in this Prospectus extends only to the disclosure
relating to that Fund. Certain additional matters relating to a
Fund's organization are discussed in its Statement of Additional
Information.

PENDING LEGAL PROCEEDINGS INVOLVING NORTH AMERICAN
GOVERNMENT INCOME

On July 25, 1995; a Consolidated and Supplemental Class
Action Complaint ("Complaint") styled IN RE ALLIANCE NORTH
AMERICAN GOVERNMENT INCOME TRUST, INC. SECURITIES LITIGATION was
filed in the United States District Court for the Southern
District of New York against the Fund, Alliance, ACMC, AFD, The
Equitable Companies Incorporated, a parent of Alliance, certain
officers of the Fund, certain current and former directors of the
Fund, certain current and former officers of ACMC and certain
directors of ACMC; alleging violations of federal securities
laws, fraud and breach of fiduciary duty in connection with the
Fund's investments in Mexican and Argentine securities. The
Complaint seeks certification of a plaintiff class of all persons
who purchased or owned Class A, B or C shares of the Fund from
March 27, 1992 through December 23, 1994. The Complaint alleges
that as of the date of the Complaint, the Fund's losses exceeded

103

<PAGE>

$750,000,000. The Complaint seeks as relief unspecified damages,
costs and attorneys' fees.

The principal allegations of the Complaint are that upon the
advice of Alliance the Fund purchased debt securities issued by
the Mexican and Argentine governments in amounts that were not
permitted by the Fund's investment objective, and that there was
no shareholder vote to change the investment objective to permit
purchases in such amounts. The Complaint further alleges that the
decline in the value of the Mexican and Argentine securities held
by the Fund caused the Fund's net asset value to decline to the
detriment of the Fund's shareholders.

On September 26, 1995, defendants jointly filed a motion to
dismiss the Complaint in its entirety. The Fund and Alliance
believe that the allegations in the Complaint are without merit
and intend to vigorously defend against these claims.

REGISTRAR, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

AFS, an indirect wholly-owned subsidiary of Alliance, located
at 500 Plaza Drive, Secaucus, New Jersey 07094, acts as each
Fund's registrar, transfer agent and dividend-disbursing agent
for a fee based upon the number of shareholder accounts
maintained for the Fund. The transfer agency fee with respect to
Class B shares will be higher than the transfer agency fee with
respect to Class A shares or Class C shares.

PRINCIPAL UNDERWRITER

AFD, an indirect wholly-owned subsidiary of Alliance, located
at 1345 Avenue of the Americas, New York, New York 10105, is the
principal underwriter of shares of the Funds.

PERFORMANCE INFORMATION

From time to time, the Funds advertise their "yield" and
"total return," which are computed separately for Class A, Class
B and Class C shares. A Fund's yield for any 30-day (or one-
month) period is computed by dividing the net investment income
per share earned during such period by the maximum public
offering price per share on the last day of the period, and then
annualizing such 30-day (or one-month) yield in accordance with a
formula prescribed by the Commission which provides for
compounding on a semi-annual basis. A Fund may also state in
sales literature an "actual distribution rate" for each class
which is computed in the same manner as yield except that actual
income dividends declared per share during the period in question

104

<PAGE>

are substituted for net investment income per share. The actual
distribution rate is computed separately for Class A, Class B and
Class C shares. Advertisements of a Fund's total return disclose
its average annual compounded total return for the periods
prescribed by the Commission. A Fund's total return for each such
period is computed by finding, through the use of a formula
prescribed by the Commission, the average annual compounded rate
of return over the period that would equate an assumed initial
amount invested to the value of the investment at the end of the
period. For purposes of computing total return, income dividends
and capital gains distributions paid on shares of a Fund are
assumed to have been reinvested when paid and the maximum sales
charges applicable to purchases and redemptions of a Fund's
shares are assumed to have been paid. A Fund will include
performance data for each class of its shares in any
advertisement or sales literature using performance data of that
Fund. These advertisements may quote performance rankings or
ratings of a Fund by financial publications or independent
organizations such as Lipper Analytical Services, Inc. and
Morningstar, Inc. or compare a Fund's performance to various
indices.

ADDITIONAL INFORMATION

This Prospectus and the Statements of Additional Information,
which have been incorporated by reference herein, do not contain
all the information set forth in the Registration Statements
filed by the Funds with the Commission under the Securities Act.
Copies of the Registration Statements 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.

105
00250110.AM5

<PAGE>

APPENDIX A: BOND RATINGS

MOODY'S INVESTORS SERVICE, INC.

Aaa-Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally
strong position of such issues.

Aa-Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear
somewhat larger than the Aaa securities.

A-Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and
interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the
future.

Baa-Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payment and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba-Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and principal payments may
be very moderate and thereby not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal

A-1

<PAGE>

payments or of maintenance of other terms of the contract
over any long period of time may be small.

Caa-Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger
with respect to principal or interest.

Ca-Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.

C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.

Absence of Rating-When no rating has been assigned or where a
rating has been suspended or withdrawn, it may be for reasons
unrelated to the quality of the issue.

Should no rating be assigned, the reason may be one of the
following:

1. An application for rating was not received or accepted.

2. The issue or issuer belongs to a group of securities or
companies that are not rated as a matter of policy.

3. There is a lack of essential data pertaining to the issue or
issuer.

4. The issue was privately placed, in which case the rating is
not published in Moody's publications.

Suspension or withdrawal may occur if new and material
circumstances arise, the effects of which preclude satisfactory
analysis; if there is no longer available reasonable up-to-date
data to permit a judgment to be formed; if a bond is called for
redemption; or for other reasons.

Note-Moody's applies numerical modifiers, 1, 2 and 3 in each
generic rating classification from Aa through B in its corporate
bond rating system. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic
rating category.

A-2

<PAGE>

STANDARD & POOR'S RATINGS SERVICES

AAA-Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.

AA-Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues
only in small degree.

A-Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

BBB-Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.

BB, B, CCC, CC, C-Debt rated BB, B, CCC, CC and C is regarded as
having predominantly speculative characteristics with respect
to capacity to pay interest and repay principal. BB indicates
the least degree of speculation A-1 and CCC the highest.
While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties
or major exposures to adverse conditions.

CI-The rating CI is reserved for income bonds on which no
interest is being paid.

D-Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not
made on the date due even if the applicable grace period has
not expired, unless S&P believes that such payments will be
made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service
payments are jeopardized.

Plus (+) or Minus (-)-The ratings from AA to CCC may be modified
by the addition of a plus or minus sign to show relative
standing within the major rating categories.
NR-Not rated.

A-3

<PAGE>

DUFF & PHELPS CREDIT RATING CO.

AAA-Highest claims paying ability. Risk factors are negligible.

AA+, AA, AA-Very high claims paying ability. Protection factors
are strong. Risk is modest, but may vary slightly over time
due to economic and/or underwriting conditions.

A+, A, A--High claims paying ability. Protection factors are
average and there is an expectation of variability in risk
over time due to economic and/or underwriting conditions.

BBB+, BBB, BBB--Adequate claims paying ability. Protection
factors are adequate. There is considerable variability in
risk over time due to economic and/or underwriting
conditions.

BB+, BB, BB--Uncertain claims paying ability and less than
investment-grade quality. However, the company is deemed
likely to meet these obligations when due. Protection factors
will vary widely with changes in economic and/or underwriting
conditions.

B+, B, B--Possessing risk that policy holder and contract-holder
obligations will not be paid when due. Protection factors
will vary widely with changes in economic and/or underwriting
conditions or company fortunes.

CCC-There is substantial risk that policy holder and contract
holder obligations will not be paid when due. Company has
been or is likely to be placed under state insurance
department supervision.

DD-Company is under an order of liquidation.

FITCH INVESTORS SERVICE, INC.

AAA-Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.

AA-Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable

A-4

<PAGE>

future developments, short-term debt of these issuers is
generally rated F- 1+.

A-Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB-Bonds considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes
in economic conditions and circumstances, however, are more
likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than
for bonds with higher ratings.

BB-Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by
adverse economic changes. However, business and financial
alternatives can be identified which could assist the obligor
in satisfying its debt service requirements.

B-Bonds are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the
probability of continued timely payment of principal and
interest reflects the obligor's limited margin of safety and
the need for reasonable business and economic activity
throughout the life of the issue.

CCC-Bonds have certain identifiable characteristics which, if not
remedied, may lead to default.

The ability to meet obligations requires an advantageous business
and economic environment.

CC-Bonds are minimally protected. Default in payment of interest
and/or principal seems probable over time.

C-Bonds are in imminent default in payment of interest or
principal.

DDD, DD, D-Bonds are in default on interest and/or principal
payments. Such bonds are extremely speculative and should be
valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents

A-5

<PAGE>

the highest potential for recovery on these bonds, and D
represents the lowest potential for recovery.

Plus (+) Minus (-)-Plus and minus signs are used with a rating
symbol to indicate the relative position of a credit within
the rating category. Plus and minus signs, however, are not
used in the AAA, DDD, DD or D categories.

NR-Indicates that Fitch does not rate the specific issue.

A-6
00250110.AM5

<PAGE>

APPENDIX B:

GENERAL INFORMATION ABOUT CANADA, MEXICO AND ARGENTINA

GENERAL INFORMATION ABOUT CANADA

Canada consists of a federation of ten Provinces and two federal
territories (which generally fall under federal authority) with a
constitutional division of powers between the federal and
Provincial governments. The Parliament of Canada has jurisdiction
over all areas not assigned exclusively to the Provincial
legislatures, and has jurisdiction over such matters as the
federal public debt and property, the regulation of trade and
commerce, currency and coinage, banks and banking, national
defense, the postal services, navigation and shipping and
unemployment insurance.

The Canadian economy is based on the free enterprise system with
business organizations ranging from small owner-operated
businesses to large multinational corporations. Manufacturing and
resource industries are large contributors to the country's
economic output, but as in many other highly developed countries,
there has been a gradual shift from a largely goods-producing
economy to a predominantly service-based one. Agriculture and
other primary production play a small but key role in the
economy. Canada is also an exporter of energy to the United
States in the form of natural gas (of which Canada has
substantial reserves) and hydroelectric power, and has
significant mineral resources.

Canadian Dollars are fully exchangeable into U.S. Dollars without
foreign exchange controls or other legal restriction. Since the
major developed country currencies were permitted to float freely
against one another, the range of fluctuation in the U.S.
Dollar/Canadian Dollar exchange rate has been narrower than the
range of fluctuation between the U.S. Dollar and most other major
currencies. During the last several years, Canada has experienced
a weakening of its currency. In January 1995, the Canadian Dollar
fell to a nine-year low against the U.S. dollar, decreasing in
value compared to the U.S. Dollar by approximately 25% from
October 1991. From January 31, 1995, through September 29, 1995,
the Canadian Dollar increased in value by approximately 5%. The
range of fluctuation that occurred in the past is not necessarily
indicative of the range of fluctuation that will occur in the
future. Future rates of exchange cannot be predicted.

B-1

<PAGE>

GENERAL INFORMATION ABOUT THE UNITED MEXICAN STATES

The United Mexican States ("Mexico") is a nation formed by 31
states and a Federal District (Mexico City). The Political
Constitution of Mexico, which took effect on May 1, 1917,
established Mexico as a Federal Republic and provides for the
separation of executive, legislative and judicial branches. The
President and the members of the General Congress are elected by
popular vote.

While in recent years the Mexican economy has experienced
improvement in a number of areas, including five consecutive
years of growth in gross domestic product and a substantial
reduction in the rate of inflation and in public sector financial
deficit, beginning in 1994, Mexico has experienced an economic
crisis that led to the devaluation of the Peso in December 1994.
Much of the past improvement in the Mexican economy has been
attributable to a series of economic policy initiatives initiated
by the Mexican government over the past decade, which seek to
modernize and reform the Mexican economy, control inflation,
reduce the financial deficit, increase public revenues through
the reform of the tax system, establish a competitive and stable
currency exchange rate, liberalize trade restrictions and
increase investment and productivity, while reducing the
government's role in the economy. In this regard, the Mexican
government has been proceeding with a program for privatizing
certain state owned enterprises, developing and modernizing the
securities markets, increasing investment in the private sector
and permitting increased levels of foreign investment. The recent
adoption by Canada, the United States and Mexico of the North
American Free Trade Agreement could also contribute to the growth
of the Mexican economy.

In 1994 Mexico faced internal and external conditions that
resulted in an economic crisis that continues to affect the
Mexican economy adversely. Growing trade and current account
deficits, which could no longer be financed by inflows of foreign
capital, were factors contributing to the crisis. A weakening
economy and unsettling political and social developments caused
investors to lose confidence in the Mexican economy. This
resulted in a large decline in foreign reserves followed by a
sharp and rapid devaluation of the Mexican Peso. The ensuing
economic and financial crisis resulted in higher inflation and
domestic interest rates, a contraction in real gross domestic
product and a liquidity crisis.

In response to the adverse economic conditions that developed at
the end of 1994, the Mexican government instituted a new economic

B-2

<PAGE>

programs; and a new social accord among the government, business
and labor sectors of the country was entered into in an effort to
stabilize the economy and the financial markets. To help relieve
Mexico's liquidity crisis and restore financial assistance from
the United States, other countries and certain international
agencies conditioned upon the implementation and continuation of
the economic reform program.

While the Mexican economy has stabilized, it is still in a
recession and suffers from high inflation and high interest
rates. Mexico's economy may also be influenced by international
economic conditions, particularly those in the United States, and
by world prices for oil and other commodities. The recovery of
the economy will require continued economic and fiscal discipline
as well as stable political and social conditions.

There is no assurance that Mexico's economic policy initiatives
will be successful or that succeeding administrations will
continue these initiatives.

In August 1976, the Mexican government established a policy of
allowing the Mexican Peso to float against the U.S. Dollar and
other currencies. Under this policy, the value of the Mexican
Peso consistently declined against the U.S. Dollar. Under
economic policy initiatives implemented since December

1987, the Mexican government introduced a series of schedules
allowing for the gradual devaluation of the Mexican Peso against
the U.S. Dollar. These gradual devaluations continued until
December 1994. On December 20, 1994, the Mexican government
announced a new policy that would allow a more substantial yet
still controlled devaluation of the Mexican Peso. On December 22,
1994, the Mexican government announced that it would not continue
with the policy announced two days earlier and would instead
permit the Peso to float against other currencies, resulting in a
continued decline against the U.S. Dollar.

In 1982, Mexico imposed strict foreign exchange controls which
shortly thereafter were relaxed and were eliminated in 1991.
There is no assurance that future regulatory actions in Mexico
would not affect the Fund's ability to obtain U.S. Dollars in
exchange for Mexican Pesos.

GENERAL INFORMATION ABOUT THE REPUBLIC OF ARGENTINA

The Republic of Argentina ("Argentina") consists of 23 provinces
and the federal capital of Buenos Aires. Its federal constitution
provides for an executive branch headed by a President, a

B-3

<PAGE>

legislative branch and a judicial branch. Each province has its
own constitution, and elects its own governor, legislators and
judges, without the intervention of the federal government.

The military has intervened in the political process on several
occasions since the 1930's and has ruled the country for 22 of
the past 62 years. The most recent military government ruled the
country from 1976 to 1983. Four unsuccessful military uprisings
have occurred since 1983, the most recent in December 1990.

Shortly after taking office in 1989, the country's current
President adopted market-oriented and reformist policies,
including a large privatization program, a reduction in the size
of the public sector and an opening of the economy to
international competition.

In the decade prior to the current announcement of a new economic
plan in March 1991, the Argentine economy was characterized by
low and erratic growth, declining investment rates and rapidly
worsening inflation. Despite its strengths, which include a well-
balanced natural resource base and a high literacy rate, the
Argentine economy failed to respond to a series of economic plans
in the 1980's. The Economy Minister's plan represented a
pronounced departure from its predecessors in calling for raised
revenues, reduced expenditures and a reduced public deficit. The
extensive privatization program commenced in 1989 was
accelerated, the domestic economy deregulated and opened up to
foreign trade and the frame-work for foreign investment reformed.
As a result of the economic stabilization reforms, gross domestic
product has increased and inflation has decreased.

Significant progress was also made in 1992 in rescheduling
Argentina's debt with both external and domestic creditors, which
improved fiscal cash flows in the medium terms and allowed a
return to voluntary credit markets. Further reforms are currently
being implemented in order to sustain and continue the progress
to date. There is no assurance that Argentina's economic policy
initiatives will be successful or that succeeding administrations
will continue these initiatives.

In 1991 the Argentine government enacted currency reforms, which
required the domestic currency to be fully backed by foreign
exchange reserves, in an effort to make the Argentine Peso fully
convertible into the U.S. Dollar at a rate of one to one.

The Argentine Peso has been the Argentine currency since
January 1, 1992. Since that date, the rate of exchange from the
Argentine Peso to the U.S. Dollar has remained approximately one

B-4

<PAGE>

to one. However, the historic range is not necessarily indicative
of fluctuations that may occur in the exchange rate over time and
there can be no assurance that future rates of exchange can be
accurately predicted. The Argentine foreign exchange market was
highly controlled until December 1989, when a free exchange rate
was established for all foreign currency transactions. Argentina
has eliminated restrictions on foreign direct investment and
capital repatriation. On September 8, 1993, legislation was
adopted abolishing previous requirements of a three-year waiting
period for capital repatriation. Under the new legislation,
foreign investors will be permitted to remit profits at any time.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.

THIS PROSPECTUS IS INTENDED TO CONSTITUTE AN OFFER BY EACH FUND
ONLY OF THE SECURITIES OF WHICH IT IS THE ISSUER AND IS NOT
INTENDED TO CONSTITUTE AN OFFER BY ANY FUND OF THE SECURITIES OF
ANY OTHER FUND WHOSE SECURITIES ARE ALSO OFFERED BY THIS
PROSPECTUS. NO FUND INTENDS TO MAKE ANY REPRESENTATION AS TO THE
ACCURACY OR COMPLETENESS OF THE DISCLOSURE IN THIS PROSPECTUS
RELATING TO ANY OTHER FUND. SEE "GENERAL INFORMATION-
ORGANIZATION."

B-5
00250110.AM5

<PAGE>

________________________________________________________________

ALLIANCE SUBSCRIPTION APPLICATION
________________________________________________________________

ALLIANCE BOND FUNDS

SHORT-TERM U.S. GOVERNMENT FUND SHORT-TERM MULTI-MARKET TRUST
U.S. GOVERNMENT PORTFOLIO MULTI-MARKET STRATEGY TRUST
LIMITED MATURITY GOVERNMENT FUND NORTH AMERICAN GOVERNMENT INCOME TRUST
MORTGAGE SECURITIES INCOME FUND GLOBAL DOLLAR GOVERNMENT FUND
WORLD INCOME TRUST CORPORATE BOND PORTFOLIO

INFORMATION AND INSTRUCTIONS
_____________________________________________________________________________

TO OPEN YOUR NEW ALLIANCE ACCOUNT

Please complete the application and mail it to:
Alliance Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520

SIGNATURES-PLEASE BE SURE TO SIGN THE APPLICATION (SECTION 7)

If shares are registered in the name of:
. an individual, the individual should sign.
. joint tenants, both should sign.
. a custodian for a minor, the custodian should sign.
. a corporation or other organization, an authorized officer should sign
(please indicate corporate office or title).
. a trustee or other fiduciary, the fiduciary or fiduciaries should sign
(please indicate capacity).

REGISTRATION

To ensure proper tax reporting to the IRS:
. Individuals, Joint Tenants and Gift/Transfer to a Minor:
- Indicate your name exactly as it appears on your social security
card.
. Trust/Other:
- Indicate the name of the entity exactly as it appeared on the notice
you received from the IRS when your Employer Identification number
was assigned.

PLEASE NOTE:

Certain legal documents will be required from corporations or other
organizations, executors and trustees, or if a redemption is requested by

<PAGE>

anyone other than the shareholder of record. If you have any questions
concerning a redemption, contact the Fund at the number below.

. In the case of redemptions or repurchases of shares recently purchased by
check, redemption proceeds will not be made available until the Fund is
reasonably assured that the check has cleared, normally up to 15 calendar
days following the purchase date.

IF WE CAN ASSIST YOU IN ANY WAY, PLEASE DO NOT HESITATE TO CALL US AT: 1-
(800) 221-5672.

<PAGE>

_____________________________________________________________________________
SUBSCRIPTION APPLICATION
_____________________________________________________________________________

ALLIANCE BOND FUNDS
(SEE INSTRUCTIONS AT THE FRONT OF THE APPLICATION)

1. YOUR ACCOUNT REGISTRATION (PLEASE PRINT)
______________________________________________________________________________

[ ] INDIVIDUAL OR JOINT ACCOUNT

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Owner's Name (First Name) (MI) (Last Name)

|___|___|___| - |___|___| - |___|___|___|___|
Social Security Number (Required to open account)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_
|
Joint Owner's Name* (First Name ) (MI) (Last Name)

*JOINT TENANTS WITH RIGHT OF SURVIVORSHIP UNLESS OTHERWISE INDICATED

[ ]GIFT/TRANSFER TO A MINOR

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Custodian-One Name Only(First Name) (MI) (Last Name)

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Minor's (First Name) (MI) (Last Name)

|___|___|___| - |___|___| - |___|___|___|___|
Minor's Social Security Number (Required to open account)

Under the State of_____(Minor's Residence)Uniform Gifts/Transfer to Minor's
Act

[ ] TRUST ACCOUNT

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trustee

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Trust

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|

<PAGE>

Name of Trust (cont'd)

|_|_|_|_|_|_|_|_|_|_|_|_|_|
Trust Dated
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Tax ID or Social Security Number (Required to open account)

[ ] OTHER

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of Corporation, Partnership or other Entity

|_|_|_|_|_|_|_|_|_|
Tax ID Number

2. ADDRESS

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Street

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City State Zip Code

|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
If Non-U.S., Specify Country

|_|_|_| - |_|_|_| - |_|_|_|_| |_|_|_| - |_|_|_| - |_|_|_|_|
Daytime Phone Evening Phone

I am a: [ ] U.S. Citizen [ ] Non-Resident Alien [ ] Resident
Alien [ ] Other ________________________________________

For Alliance Use Only

<PAGE>

_____________________________________________________________________________
3. INITIAL INVESTMENT
_____________________________________________________________________________

MINIMUM: $250; MAXIMUM: CLASS B ONLY - $250,000; CLASS C ONLY - $5,000,000.
MAKE ALL CHECKS PAYABLE TO THE ALLIANCE BOND FUND IN WHICH YOU ARE INVESTING.

I hereby subscribe for shares of the following Alliance Bond Fund(s):

<TABLE>
<CAPTION>
Class B Class C
Class A (CONTINGENT (ASSET-
(INITIAL DEFERRED BASED
SALES DOLLAR SALES DOLLAR SALES DOLLAR
CHARGE) AMOUNT CHARGE) AMOUNT CHARGE) AMOUNT
-------- ------- -------- ------- -------- ------
<S> <C> <C> <C>
[ ]Short-Term U.S. Government [ ] (37) [ ] (51) [ ] (337)
[ ]U.S. Government [ ] (46) [ ] (76) [ ] (346)
[ ]Limited Maturity Government[ ] (88) [ ] (89) [ ] (388)
[ ]Mortgage Securities Income [ ] (52) [ ] (63) [ ] (352)
[ ]World Income [ ] (54) not offered not offered
[ ]Short-Term Multi-Market [ ] (70) [ ] (68) [ ] (370)
[ ]Multi-Market Strategy [ ] (22) [ ] (23) [ ] (322)
[ ]North American Government [ ] (55) [ ] (56) [ ] (355)
[ ]Global Dollar Government [ ] (166) [ ] (266) [ ] (366)
[ ]Corporate Bond [ ] (95) [ ] (295) [ ] (395)

</TABLE>

to be purchased with the enclosed check or draft for $ _______________
+ NO CHECKWRITING AVAILABLE ON THESE FUNDS.

________________________________________________________________________
4. REDUCED CHARGES (CLASS A ONLY)
________________________________________________________________________

If you, your spouse or minor children own shares in other Alliance funds, you
may be eligible for a reduced sales charge. Please list below any existing
accounts to be considered and complete the Right of Accumulation section or
the Statement of Intent section.

_______________ _______________ ________________ _________________
Fund Account Number Fund Account Number

<PAGE>

A. RIGHT OF ACCUMULATION
[ ] Please link the accounts listed above for Right of Accumulation
privileges, so that this and future purchases will receive any discount for
which they are eligible.

B. STATEMENT OF INTENT
[ ] I want to reduce my sales charge by agreeing to invest the following
amount over a 13-month period:
[ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1,000,000

If the full amount indicated is not purchased within 13 months, I understand
an additional sales charge must be paid from my account

_______________ ________________ ________________ ________________
Name on Account Account Number Name on Account Account Number

________________________________________________________________________
5. DISTRIBUTION OPTIONS
________________________________________________________________________

IF NO BOX IS CHECKED, ALL DISTRIBUTIONS WILL BE REINVESTED IN ADDITIONAL
SHARES OF THE FUND

INCOME DIVIDENDS:(elect one)
[ ] Reinvest dividends [ ] Pay dividends in cash
[ ] Use Dividend Direction Plan

CAPITAL GAINS DISTRIBUTION: (elect one)
[ ] Reinvest capital gains [ ] Pay capital gains in cash
[ ] Use Dividend Direction Plan

If you elect to receive your income dividends or capital gains distributions
in cash, please enclose a PREPRINTED VOIDED CHECK from the bank account you
wish to have your dividends deposited into.**

If you wish to utilize the Dividend Direction Plan, please designate the
Alliance account you wish to have your dividends reinvested in:

_____________________________________ ________________________________________
Name Existing Account No.

SPECIAL DISTRIBUTION INSTRUCTIONS:
[ ] Please pay my distributions via check and send to the address indicated
in Section 2.
[ ] Please mail my distributions to the person and/or address designated
below:

_____________________________________ _______________________________________

<PAGE>

Name Address

_____________________________________ ____________________ __________________
City State Zip

_____________________________________________________________________________
6. SHAREHOLDER OPTIONS
_____________________________________________________________________________

A. AUTOMATIC INVESTMENT PROGRAM (AIP) **

I hereby authorize Alliance Fund Services, Inc. to draw on my bank account, on
or about the ______ day of each month for a monthly investment in my Fund
account in the amount of $____________ (minimum $25 per month). Please attach
a PREPRINTED VOIDED CHECK from the bank account you wish to use. NOTE: If your
bank is not a member of the NACHA, your Alliance account will be credited on
or about the 20th of each month.

The Fund requires signatures of bank account owners exactly as they appear on
bank records.

______________________ _____________ _________________________ _____________
Individual Account Date Joint Account Date

**YOUR BANK MUST BE A MEMBER OF THE NATIONAL AUTOMATED CLEARING HOUSE
ASSOCIATION (NACHA).

B. TELEPHONE TRANSACTIONS

You can call our toll-free number 1-800-221-5672 and instruct Alliance Fund
Services, Inc. in a recorded conversation to purchase, redeem or exchange
shares for your account. Purchase and redemption requests will be processed
via electronic funds transfer (EFT) to and from your bank account.

Instructions: . Review the information in the Prospectus about telephone
transaction services.
. Check the box next to the telephone transaction service(s)
you desire.
. If you select the telephone purchase or redemption
privilege, you must write "VOID" across the face of a check
from the bank account you wish to use and attach it to this
application.

PURCHASES AND REDEMPTIONS VIA EFT**
[ ] I hereby authorize Alliance Fund Services, Inc. to effect the purchase
and/or redemption of Fund shares for my account according to my telephone
instructions or telephone instructions from my Broker/Agent, and to withdraw

<PAGE>

money or credit money for such shares via EFT from the bank account I have
selected.

The fund requires signatures of bank account owners exactly as they appear on
bank records.

_________________________ ______________ ____________________ ______________
Individual Account Owner Date Joint Account Owner Date

TELEPHONE EXCHANGES AND REDEMPTIONS BY CHECK

Unless I have checked one or both boxes below, these privileges will
automatically apply, and by signing this application, I hereby authorize
Alliance Fund Services, Inc. to act on my telephone instructions, or on
telephone instructions from any person representing himself to be an
authorized employee of an investment dealer or agent requesting a redemption
or exchange on my behalf. (NOTE: Telephone exchanges may only be processed
between accounts that have identical registrations.) Telephone redemption
checks will only be mailed to the name and address of record; and the address
must have no change within the last 30 days. The maximum telephone redemption
amount is $50,000 per check. This service can be enacted once every 30 days.

[ ] I do NOT elect the telephone exchange service.
[ ] I do NOT elect the telephone redemption by check service.

C. SYSTEMATIC WITHDRAWAL PLAN (SWP) **

In order to establish a SWP, an investor must own or purchase shares of the
Fund having a current net asset value of at least:
. $10,000 for monthly payments; . $5,000 for bi-monthly payments; . $4,000
for quarterly or less frequent payments

[ ] I authorize this service to begin in ___________, 19____, for the amount
Month of $_____________($50.00 MINIMUM)

Frequency: (Please select one) [ ] Monthly [ ] Bi-Monthly [ ] Quarterly
[ ] Annually [ ] In the months circled: J F M A M J J A S O N D

Please send payments to: (please select one)
[ ] My checking account. Select the date of the month on or about which you
wish the EFT payments to be made: _______________. Please enclose a
preprinted voided check to ensure accuracy.
[ ] My address of record designated in Section 2.
[ ] The payee and address specified below:

<PAGE>

______________________________________ ______________________________________
Name of Payee Address

______________________________________ ____________________ _________________
City State Zip

D. AUTO EXCHANGE

[ ] I authorize Alliance Fund Services, Inc. to initiate a monthly exchange
for $__________ ($25.00 minimum) on the _______ day of the month, into the
Alliance Fund noted below:

Fund Name: _____________________________________

[ ] Existing account number:____________________ [ ] New account

Shares exchanged will be redeemed at net asset value computed on the date of
the month selected. (If the date selected is not a fund business day the
transaction will be processed on the next fund business day.) Certificates
must remain unissued.

_____________________________________________________________________________
7. SHAREHOLDER AUTHORIZATION This section MUST be completed
_____________________________________________________________________________

I certify under penalty of perjury that the number shown in Section 1 of this
form is my correct tax identification number or social security number and
that I have not been notified that this account is subject to backup
withholding.

By selecting any of the above telephone privileges, I agree that neither the
Fund nor its Investment Adviser, Principal Underwriter, Transfer Agent or
other Fund Agent will be liable for any loss, injury, damage or expense as a
result of acting upon telephone instructions purporting to be on my behalf,
that the Fund reasonably believes to be genuine, and that neither the Fund nor
any such party will be responsible for the authenticity of such telephone
instructions. I understand that any or all of these privileges may be
discontinued by me or the Fund at any time. I understand and agree that the
Fund reserves the right to refuse any telephone instructions and that my
investment dealer or agent reserves the right to refuse to issue any telephone
instructions I may request.

For non-residents only: Under penalties of perjury, I certify that to the best
of my knowledge and belief, I qualify as a foreign person as indicated in
Section 2.

I am of legal age and capacity and have received and read the Prospectus and
agree to its terms.

<PAGE>

____________________________________________ _________________________________
Signature Date

_____________________________________________________________________________
DEALER/AGENT AUTHORIZATION For selected Dealers or Agents ONLY.
- -----------------------------------------------------------------------------
We hereby authorize Alliance Fund Services, Inc. to act as our agent in
connection with transactions under this authorization form; and we guarantee
the signature(s) set forth in Section 7, as well as the legal capacity of the
shareholder.

Dealer/Agent Firm __________________________________________________________
Authorized Signature
__________________________________________________________
Representative First Name _________________MI ________ Last Name____________
Representative NumberBranch Office Address City
________________________________ State ________ Zip Code _________________
Branch Number _______________________ Branch Phone
(_____)_____________________

** YOUR BANK MUST BE A MEMBER OF THE NATIONAL AUTOMATED CLEARING HOUSE
ASSOCIATION (NACHA).

<PAGE>

SIGNATURE CARD NAME OF FUND:
CLASS A OR CLASS C ACCOUNT #
(if known)
_____________________________________________________________________________
ACCOUNT NAME(S) AS REGISTERED
_____________________________________________________________________________
SOCIAL SECURITY NUMBER
_____________________________________________________________________________
AUTHORIZED SIGNATURE(S)-for joint accounts, all owners, or their legal
representatives, must sign this card.
1............................................................................
2............................................................................
3............................................................................
_____________________________________________________________________________
Check One Box _ All the above signatures are required on checks written
against this account.
_ Any one signature is acceptable on checks written against
this account.
_ A combination of signatures is required (specify number).

SUBJECT TO CONDITIONS PRINTED ON REVERSE SIDE.
STATE STREET BANK AND TRUST COMPANY

The payment of funds is authorized by the signature(s) appearing on the
reverse side.

If this card is signed by more than one person, all checks will require all
signatures appearing on the reverse side unless a lesser number is indicated.
If no indication is given, all checks will require all signatures. Each
signatory guarantees the genuineness of the other signatures.

The Bank is hereby appointed agent by the person(s) signing this card (the
"Depositor[s]") and, as agent, is authorized and directed to present checks
drawn on this checking account to Alliance

_________________________________________ ("the Fund") or its transfer agent
as requests to redeem shares of "the Fund" registered in the name of the
Depositor(s) in the amounts of such checks and to deposit the proceeds of such
redemptions in this checking account. The Bank shall be liable only for its
own negligence. The Depositor(s) agrees to be subject to the rules and
regulations of the Bank pertaining to this checking account as amended from
time to time. The Bank and "the Fund" reserve the right to change, modify or
terminate this checking account and authorization at any time.

CHECKS MAY NOT BE FOR LESS THAN $500 or such other minimum amount as may from
time to time be established by "the Fund" upon prior written notice to its

<PAGE>

shareholders. Shares purchases by check (including certified or cashier's
check) will not be redeemed within 15 calendar days of such purchase by
checkwriting or any other method of redemption.

No checkwriting available on Alliance World Income and Alliance Corporate
Bond.

ENCLOSE THIS CARD WITH THE APPLICATION FORM

<PAGE>

ALLIANCE LIMITED MATURITY
(LOGO)(R) GOVERNMENT FUND, INC.

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
_________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION
[ ], 1996

_________________________________________________________________

This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Fund's current Prospectus.
A copy of the Prospectus may be obtained by contacting Alliance
Fund Services, Inc. at the address or telephone numbers shown
above.

TABLE OF CONTENTS

PAGE

Description of the Fund...................................

Management of the Fund....................................

Expenses of the Fund......................................

Purchase of Shares........................................

Redemption and Repurchase of Shares.......................

Shareholder Services......................................

Net Asset Value ..........................................

Dividends, Distributions and Taxes........................

Portfolio Transactions....................................

General Information.......................................

Report of Independent Auditors and Financial..............
Statements

Appendix A (Bond and Commercial Paper Ratings)............A-1

<PAGE>

Appendix B (Futures Contracts and Options on
Futures Contracts and Foreign Currencies).................B-1

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

<PAGE>

_________________________________________________________________

DESCRIPTION OF THE FUND
_________________________________________________________________

The following investment policies and restrictions
supplement, and should be read in conjunction with, the
information set forth in the Prospectus of Alliance Limited
Maturity Government Fund, Inc. (the "Fund") under the heading
"Description of the Fund." Except as otherwise indicated,
investment policies of the Fund are not designated "fundamental
policies" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), and may, therefore, be changed
by the Fund's Board of Directors without a shareholder vote.
However, the Fund will not change its investment policies without
contemporaneous written notice to shareholders. The Fund's
investment objective may not be changed without shareholder
approval. There can be, of course, no assurance that the Fund
will achieve its investment objective.

INVESTMENT OBJECTIVE

The Fund is a diversified, open-end management investment
company which seeks the highest level of current income,
consistent with low volatility of net asset value. As a
fundamental policy, the Fund normaly has at least 65% of the
value of its total assets invested in securities that are issued
or guaranteed by the United States Government, its agencies or
instrumentalities ("U.S. Government Securities"), including
mortgage-related securities, and repurchase agreements relating
to U.S. Government Securities.

In pursuing its investment objective and policies, the Fund
takes advantage of a wide range of maturities of debt securities
and adjusts the dollar-weighted average maturity of its portfolio
from time to time, depending on its assessment of relative yields
on securities of different maturities and the expected effect of
future changes in interest rates on the market value of its
portfolio. At all times, however, each security held by the Fund
has either a final maturity of not more than 10 years or a
duration 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 debt 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.

<PAGE>

The Fund believes that because of the nature of the Fund's
assets, it is not exposed to any material risk of loss as a
result of default on any securities held by the Fund. Like all
investors in interest-bearing securities, however, the Fund is
exposed to the risk that the prices of individual securities held
by it can fluctuate, in some cases significantly, in response to
changes in prevailing interest rates.

The Fund's investment policy of investing at least 65% of the
value of its total assets in U.S. Government securities,
including mortgage related securities, and repurchase agreements
relating to U.S. Government Securities (except when in a
temporary defensive posture) is deemed fundamental and may not be
changed without shareholder approval. The Fund's other
investment polices are not fundamental and, therefore, may be
changed by the Board of Directors without shareholder approval.
For this purpose (and for the purpose of changing the Fund's
investment restrictions and approving the Fund's advisory
agreement, each as more fully described below), the approval of a
majority of the Fund's outstanding voting securities means the
affirmative vote of (i) 67% or more of the shares represented at
a meeting at which more than 50% of the outstanding shares are
present in person or by proxy, or (ii) more than 50% of the
outstanding shares, whichever is less.

The Fund may invest up to 35% of the value of its total
assets in (i) securities backed by assets such as automobile or
credit card receivables or home equity loans ("asset-backed
securities"), including mortgage-related securities that are not
U.S. Government securities, rated at least Aa by Moody's
Investors Service, Inc. ("Moody's") or AA by Standard & Poor's
Ratings Services ("S&P"), Duff & Phelps Credit Rating Co. ("Duff
& Phelps") or Fitch Investors Service, Inc. ("Fitch") or, if not
rated, of equivalent investment quality as determined by the
Adviser ("high quality securities"), (ii) "zero coupon" Treasury
securities issued by private corporate issuers,
(iii) certificates of deposit, bankers' acceptances and interest-
bearing savings deposits of domestic and foreign banks having
total assets of more than $1 billion, (iv) commercial paper rated
at least Prime-2 by Moody's or A-2 by S&P, Duff 2 by Duff &
Phelps or Fitch-2 by Fitch or, if not rated, issued by companies
which have outstanding high quality debt issues and (v) high
quality debt securities of corporate issuers. When business or
financial conditions warrant, the Fund may take a temporary
defensive position and invest without limit in the foregoing
securities.

<PAGE>

The Adviser continuously monitors the ratings of securities
held by the Fund and the creditworthiness of their issuers. For
a description of the commercial paper ratings used by Moody's,
S&P, Duff & Phelps and Fitch, see Appendix A.

NEW INSTRUMENTS. The Fund expects that new types of
securities in which the Fund may invest will be developed and
marketed from time to time. Consistent with the Fund's
investment objective, policies and quality standards, the Adviser
will consider investing in such new types of securities.

ADDITIONAL INVESTMENT POLICIES AND PRACTICES

The following additional investment policies supplement those
set forth above.

FUTURES CONTRACTS AND OPTIONS THEREON. The Fund may enter
into contracts for the purchase or sale for future delivery of
fixed-income securities or foreign securities, or contracts based
on financial indices including any index of (i) securities issued
or guaranteed by the United States Government, its agencies or
instrumentalities or (ii) corporate debt securities ("futures
contracts"), and may purchase and write put and call options to
buy or sell futures contracts ("options on futures contracts").
A "sale" of a futures contract means the acquisition of a
contractual obligation to deliver the securities or foreign
securities called for by the contract at a specified price on a
specified date. A "purchase" of a futures contract means the
incurring of a contractual obligation to acquire the securities
or foreign securities called for by the contract at a specified

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions
"Financial Highlights", "Shareholder Services - Statements and
Reports" and "General Information - Independent Auditors" and to
the use of our report dated January 13, 1995, in this
Registration Statement (Form N-1A 33-47031) of Alliance Mortgage
Strategy Trust, Inc.

/s/ ERNST & YOUNG LLP

New York, New York
December 28, 1995

00250110.AN3

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>

Mortgage Strategy Fund
<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 238,975,864
<INVESTMENTS-AT-VALUE> 240,062,233
<RECEIVABLES> 15,198,804
<ASSETS-OTHER> 170,607
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 236,783,503
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 16,784,737
<OTHER-ITEMS-LIABILITIES> 1,863,404
<TOTAL-LIABILITIES> 18,648,141
<SENIOR-EQUITY> 24,931
<PAID-IN-CAPITAL-COMMON> 257,945,572
<SHARES-COMMON-STOCK> 24,930,434
<SHARES-COMMON-PRIOR> 33,782,826
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 848,879
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 21,424,490
<ACCUM-APPREC-OR-DEPREC> 1,086,369
<NET-ASSETS> 236,783,503
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10,301,737
<OTHER-INCOME> 0
<EXPENSES-NET> 3,519,625
<NET-INVESTMENT-INCOME> 6,782,112
<REALIZED-GAINS-CURRENT> (9,164,526)
<APPREC-INCREASE-CURRENT> 8,372,611
<NET-CHANGE-FROM-OPS> 5,990,197
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,956,041
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 37,989,532
<NUMBER-OF-SHARES-REDEEMED> 124,590,852
<SHARES-REINVESTED> 2,881,814
<NET-CHANGE-IN-ASSETS> 5,990,197
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 674,950
<OVERDIST-NET-GAINS-PRIOR> 12,259,964
<GROSS-ADVISORY-FEES> 892,847
<INTEREST-EXPENSE> 919,560
<GROSS-EXPENSE> 3,519,625
<AVERAGE-NET-ASSETS> 275,476,827

<PAGE>

<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>

<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> YEAR
<EISCAL-YEAR-END> NOV-30-1994
<PERIOD-END> NOV-30-l994
[INVESTMENTS-AT-COST] 448,196,953
[INVESTMENTS-AT-VALUE] 440,910,711
[RECEIVABLES] 3,778,470
[ASSETS-OTHER] 2,214,117
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 446,903,298
[PAYABLE-FOR-SECURITIES] 53,202,656
<SENIOR-LONG-TERM-DEST> 0
[OTHER-ITEMS-LIABILITIES] 72,231,789
[TOTAL-LIABILITIES] 125,434,445
<SENIOR-EOUITY> 33,783
[PAID-IN-CAPITAL-COMMON] 341,656,226
[SHARES-COMMON-STOCK] 33,782,826
[SHARES-COMMON-PRIOR] 45,884,976
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 674,950
[ACCUMULATED-NET-GAINS] (12,259,964)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (7,286,242)
[NET-ASSETS] 321,468,853
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 27,927,070
[OTHER-INCOME] 565,857
[EXPENSES-NET] 8,962,826
[NET-INVESTMENT-INCOME] 19,530,101
[REALIZED-GAINS-CURRENT] (11,827,131)
[APPREC-INCREASE-CURRENT] (5,594,513)
[NET-CHANGE-FROM-OPS] 2,108,457
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 20,254,067
[DISTRIBUTIONS-OF-GAINS] 1,694,221
[DISTRIBUTIONS-OTHER] 533,811
[NUMBER-OF-SHARES-SOLD] 471,664,748
[NUMBER-OF-SHARES-REDEEMED] 600,627,629
[SHARES-REINVESTED] 14,730,330
[NET-CHANGE-IN-ASSETS] (134,606,193)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 472,755
[OVERDISTRIB-NII-PRIOR] 322,761
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,005,558
[INTEREST-EXPENSE] 729,234
[GROSS-EXPENSE] 8,962,826
[AVERAGE-NET-ASSETS] 462,393,559
[PER-SHARE-NAV-BEGIN] 0

<PAGE>

[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 0
[EXPENSE-RATIO] 0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0

00250110.AN2

</TABLE>