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(LOGO(R) AFD EXCHANGE RESERVES
Supplement Dated November 9, 1995, to Prospectus Dated
February 1, 1995
This Supplement to the current Prospectus of the Fund
supplements the information under the heading "Purchase and Sale
of Shares," and supersedes the information under the heading
"Expense Information."
PURCHASE AND SALE OF SHARES
Previously, shares of the Fund were available only upon exchange
from another Alliance Mutual Fund. Effective November 9, 1995,
shares of the Fund may be purchased for cash and thereafter
txchanged for shares of the same class of other Alliance Mutual
Funds. Under the Alliance Dollar Cost Averaging Program,
exchanges may be made automatically each month, thus producing a
dollar cost averaging effect. Exchanges also may be made at
other times of an investor's choosing. Shares of the Fund should
be purchased for cash only as a temporary investment pending
exchange into another Alliance Mutual Fund and should not be held
as a long-term investment. Shares of the Fund will continue to
be available upon exchange from other Alliance Mutual Funds.
HOW TO BUY SHARES
You can purchase shares of the Fund for cash through broker-
dealers, banks or other financial intermediaries. Purchases of
shares for cash directly through Alliance Fund Distributors, Inc.
("AFD"), the Fund's principal underwriter, may be made only if
the purchaser has a financial intermediary of record. The
minimum initial investment is $250. The minimum for subsequent
investments is $50. Investments of $25 or more are allowed under
the automatic investment program. See the Subscription
Application and Statement of Additional Information for more
information.
Class A Shares
You can purchase Class A shares for cash at net asset value.
Class A shares are sold without any initial sales charge at the
time of purchase. On cash purchases of $1,000,000 or more,
however, you may pay a contingent deferred sales charge ("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;
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Alliance may pay the dealer or agent a fee of up to 1% of the
dollar amount purchased. See "Application of the CDSC" in the
Prospectus. As discussed below, Class A shares may be exchanged
for Class A shares of other Alliance Mutual Funds, subject to any
applicable initial sales charge at the time of exchange. On cash
purchases of less than $1,000,000, a commission will not be paid
to the dealer or agent until the shares are exchanged for Class A
shares of another Alliance Mutual Fund. Consult the Subscription
Application and Statement of Additional Information.
Class B Shares -- Deferred Sales Charge Alternative
You can purchase Class B shares for cash at net asset value
without an initial sales charge. However, you may pay a CDSC if
you redeem shares within four years after purchase. The amount
of the CDSC (expressed as a percentage of the lesser of net asset
value at the time of redemption 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 on Class B shares is set forth below.
Year Since Purchase CDSC
First................. 4.0%
Second................ 3.0%
Third................. 2.0%
Fourth................ 1.0%
Fifth................. None
Class B shares will automatically convert to Class A shares
eight years after the end of the calendar month in which the
shareholder's order to purchase was accepted. As discussed
below, Class B shares may be exchanged at net asset value
for Class B shares of other Alliance Mutual Funds.
Following an exchange, Class B shares will continue to age
for purposes of determining the CDSC, if any, upon
redemption and for purposes of conversion to Class A shares.
Class C Shares -- Asset-Based Sales Charge Alternative
You can purchase Class C shares for cash without any initial
sales charge or a CDSC. Thus you will receive the entire
net asset value of your shares upon redemption. Class C
shares do not convert to any other class of shares of the
Fund. As discussed below, Class C shares may be exchanged
at net asset value for Class C shares of other Alliance
Mutual Funds.
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General
The decision as to which class of shares is more beneficial to
you depends on the amount and intended length of your investment
and whether you intend to subsequently exchange your shares for
shares of another Alliance Mutual Fund. If you are making a
large cash purchase, thus qualifying for a reduced sales charge
on a subsequent exchange, you might consider purchasing Class A
shares. If you are making a smaller cash purchase, you might
consider purchasing Class B shares because no sales charge will
be assessed on subsequent exchanges of those shares. 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 different compensation for selling Class A, Class B
or Class C shares. Class B and Class C shares have higher
distribution fees, and thus higher expense ratios, and pay
correspondingly lower dividends than Class A shares. There is no
size limit on cash purchases of Class A shares. The maximum cash
purchase of Class B shares is $250,000. The maximum purchase of
Class C shares is $5,000,000. The Fund may refuse any order to
purchase shares.
In addition to the discount or commission paid to dealers, 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
Fund. 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 Fund. On some occasions,
such cash or other incentives will be conditioned upon the sale
of a specified minimum dollar amount of the shares of the Fund
and/or other Alliance Mutual Funds during a specific period of
time. Such incentives may take the form of payment for
attendance at seminars, meals, sporting events or theater
performances, or payment for travel, lodging and entertainment
incurred in connection with travel by persons associated with a
dealer and their immediate family members to urban or resort
locations within or outside the United States. Such a dealer may
elect to receive cash incentives of equivalent amount in lieu of
such payments.
HOW TO EXCHANGE SHARES
You may exchange your investment in the Fund for shares of the
same class of other Alliance Mutual Funds. Exchanges of Class A
shares are made at the net asset value next determined plus any
applicable initial sales charge imposed on the Class A shares of
the other Alliance Mutual Fund. Consult the prospectus of the
applicable Alliance Mutual Fund for a further explanation of
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those sales charges. Exchanges of Class B and Class C shares are
made at the net asset values next determined, without sales or
service charges.
Under the Alliance Mutual Funds' Right of Accumulation, exchanges
of Class A shares made pursuant to the Alliance Dollar Cost
Averaging Program or otherwise will be assessed an initial sales
charge based on the shareholder's total Alliance Mutual Funds
holdings, including shares of the Fund, and therefore may be
eligible for a reduced sales charge. Consult with your financial
representative or Alliance regarding the Alliance Dollar Cost
Averaging Program, Rights of Accumulation and other time and
money saving services to investors.
Class A and Class B shares will age without regard to exchanges
for purposes of determining the CDSC, if any, upon redemption
and, in the case of Class B shares, for the purposes of
conversion to Class A shares. After an exchange, your Class B
shares will automatically convert to Class A shares in accordance
with the conversion schedule applicable to the Class B shares of
the Alliance Mutual Fund you originally purchased for cash
("original shares"). When redemption occurs, the CDSC applicable
to the original shares is applied.
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EXPENSE INFORMATION
Shareholder Transaction Expenses are one of several factors to
consider when you invest in the Fund. The following table
summarizes your maximum transaction costs from investing in the
Fund and estimated annual expenses for each class of shares. The
example following the table shows the cumulative expenses
attributable to a hypothetical $1,000 investment in each class
for the periods specified.
Class A Class B Class C
Shares Shares Shares
Maximum sales charge imposed
on
purchases (as a percentage
of offering price)....... None 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(a) 4.0% None
during the
first year,
decreasing 1.0%
annually to 0%
after the fourth
year (b)(c)
Exchange fee............... None None None
(a) Purchases of Class A shares of $1,000,000 or more (or that were received
in exchange or following a series of exchanges of Class A shares of an
Alliance Mutual Fund that were part of an original purchase of $1,000,000
or more) may be subject to a 1% deferred sales charge on redemptions
within one year of the original purchase for cash. See "Purchase and Sale
of Shares - How to Buy Shares - Class A Shares" in this Supplement.
(b) For Class B shares purchased for cash. The contingent deferred sales
charge schedule applicable to a shareholder's redemption of Class B shares
that were received in exchange of Class B shares of an Alliance Mutual
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Fund is the schedule applicable to redemptions of Class B shares of the
Alliance Mutual Fund originally purchased for cash by the shareholder.
(c) Class B shares will automatically convert to Class A shares a certain
number of years after the end of the calendar month in which the
shareholder's order to purchase was accepted. For Class B shares
purchased for cash, the number of years is eight. For Class B shares that
were received in exchange of Class B shares of an Alliance Mutual Fund,
the number of years depends on the conversion schedule of the Class B
shares of the Alliance Mutual Fund originally purchased. Currently, the
longest such period is eight years. See "Purchase and Sale of Shares -
General - Class B shares" - page 5.
<TABLE>
Operating Expenses Example
<CAPTION>
Class Class Class Class Class Class Class
A B C A B+ B++ C
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .25 .25 .25 After 1 year $ 13 $ 73 $ 18 $ 16
12b-1 fees .50 1.00 .75 After 3 years $ 41 $ 91 $ 56 $ 48
Other expenses(a) .53 .53 .53 After 5 years $ 70 $111 $ 96 $ 83
Total fund After 10 years $155 $196(b) $196(b) $182
operating
expenses(a) 1.28 1.78 1.53
_______________________________________
+ Assumes redemption at end of period and the highest applicable deferred sale charge schedule. See note (b)
above.
++ Assumes no redemption at end of period.
(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.
(b) Assumes the longest applicable conversion schedule. See note (c) above.
</TABLE>
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that an investor in
the Fund will bear directly or indirectly. Long-term
shareholders of the 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
Fund - Distribution Services Agreement." "Other Expenses" are
based on estimated amounts for the Fund's current fiscal year.
The example set forth above assumes reinvestment of all dividends
and distributions and utilizes a 5% annual rate of return as
mandated by Securities and Exchange Commission regulations.
The example should not be considered representative of past or
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future expenses; actual expenses may be greater or less than
those shown.
(R)/SM These are registered marks used under licenses from the
owner, Alliance Capital Management L.P.
00250163.AF4
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