AFD EXCHANGE RESERVES
SEMI-ANNUAL REPORT
MARCH 31, 2000
LETTER TO SHAREHOLDERS AFD EXCHANGE RESERVES
_______________________________________________________________________________
May 9, 2000
Dear Shareholder:
We are pleased to provide an overview of economic conditions during AFD
Exchange Reserves' semi-annual reporting period ended March 31, 2000. AFD
Exchange Reserves (the "Fund") serves as the money market fund exchange vehicle
for the Alliance mutual funds. The Fund's investment objective is to provide
maximum current income consistent with safety of principal liquidity.
The Fund's net assets as of March 31, 2000 totaled approximately $1,034.6
million, and the average weighted maturity of the Fund's portfolio was 16 days.
ECONOMIC COMMENTARY
The U.S. Federal Reserve ("Fed") raised the Fed Funds target 25-basis points to
6.00% on March 21, 2000. This was the fifth policy adjustment since June 1999.
The U.S. economy continued its rapid expansion with a 5.4% gross domestic
product ("GDP") growth in the first quarter of 2000, following a 6.5% growth in
the second half of 1999. Unsustainably strong consumer and business spending
continues to offset deterioration in U.S. trade performance and slow inventory
accumulation. We expect the 5.0% GDP growth rate in 2000 to slow down to a 4.3%
rate in 2001. Overall, the U.S. economy remains healthy but an excessively
strong demand for labor, driving the unemployment rate down to 3.9%, has
created the risk of accelerating wage inflation. In addition, the current
account deficit, which will approach a -5.0% rate of GDP in 2000, renders the
U.S. economy increasingly susceptible to global shocks.
Headline inflation edged up in the first quarter due to the recovery of energy
prices. The total consumer product index ("CPI") rose 3.2% year-on-year versus
a 2.6% in the fourth quarter. Underlying ex-food and energy CPI rose 2.1%
versus a 2.0% in the fourth quarter. Although oil prices have receded from
their early March highs, Brent Crude, at $26.00 per barrel remains 60% above
the year-ago level. Therefore, oil will continue to impact U.S. inflation
performance in the upcoming quarters. No pass-through of the recent
acceleration in wage growth, to a 3.8% year-on-year in April, has been observed
in inflation data. The potential for this pass-through remains a key concern
motivating the Federal Reserve to raise interest rates.
We expect further Fed Funds increases led by slightly higher bond yields in the
next six months as the Federal Reserve and the bond market respond to the need
for additional restraint on U.S. economic growth.
We appreciate your continued interest in AFD Exchange Reserves.
Sincerely,
John D. Carifa
AN INVESTMENT IN THE FUND IS NOT (I) INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, (II) A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY ANY
BANK, OR (III) FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT
THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
1
STATEMENT OF NET ASSETS
MARCH 31, 2000 (UNAUDITED) AFD EXCHANGE RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
-------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS-86.1%
FEDERAL HOME LOAN BANK
$290,200 4/03/00 6.05% $290,200,000
17,500 2/09/01 MTN 6.40 17,496,584
40,000 10/06/00 FRN 6.66 39,986,094
FEDERAL HOME LOAN
MORTGAGE CORP.
59,700 4/11/00 5.23 59,621,063
286,600 4/03/00 6.05 286,600,000
FEDERAL NATIONAL
MORTGAGE ASSOCIATION
100,000 4/03/00 6.05 100,000,000
20,000 10/05/00 FRN MTN 6.65 19,995,058
STUDENT LOAN MARKETING ASSOCIATION
40,000 10/12/00 FRN 6.59 39,977,444
17,500 10/04/00 FRN 6.65 17,495,699
U.S TREASURY BILLS
20,000 4/20/00 5.98 19,943,522
Total U.S. Government Agency
Obligations
(amortized cost $891,315,464) 891,315,464
COMMERCIAL PAPER-10.0%
AMERICAN EXPRESS CO.
4,000 5/19/00 5.55 3,969,231
ASSOCIATES FIRST
CAPITAL CORP.
14,000 4/03/00 6.23 14,000,000
BEAR STEARNS COS., INC.
8,000 4/28/00 6.06 7,966,333
BELL ATLANTIC NETWORK FUNDING
8,000 4/28/00 6.00 7,966,667
DUPONT (E. I.) DE
NEMOURS & CO.
5,000 5/25/00 (a) 6.02 4,956,522
EASTMAN KODAK CO.
8,000 6/22/00 6.09 7,891,733
GENERAL MOTORS
ACCEPTANCE CORP.
8,000 5/30/00 6.06 7,923,240
PRIVATE EXPORT FUNDING CORP.
12,000 5/10/00 6.02 11,925,754
PRUDENTIAL FUNDING CORP.
8,000 4/28/00 6.01 7,966,611
SBC COMMUNICATIONS, INC.
8,000 5/23/00 6.05 7,932,778
UNILEVER N.V.
12,800 4/03/00 (a) 6.28 12,800,000
WAL-MART STORES, INC.
8,000 5/09/00 5.41 7,951,840
Total Commercial Paper
(amortized cost $103,250,709) 103,250,709
CERTIFICATES OF DEPOSIT-1.4%
CHASE MANHATTAN BANK
7,000 5.37%, 5/22/00 5.89 6,994,577
WACHOVIA BANK NA
8,000 5.95%, 9/11/00 5.95 8,000,000
Total Certificates of Deposit
(amortized cost $14,994,577) 14,994,577
CORPORATE DEBT OBLIGATION-0.8%
DORADA FINANCE, INC.
8,000 6.02%, 9/15/00 MTN (a)
(amortized cost $8,000,000) 6.02 8,000,000
BANK OBLIGATION-0.8%
FIRST NATIONAL BANK OF CHICAGO
8,000 5.60%, 6/14/00
(amortized cost $7,999,243) 5.96 7,999,243
TOTAL INVESTMENTS-99.1%
(amortized cost $1,025,559,993) 1,025,559,993
Other assets less
liabilities-0.9% 9,022,270
2
AFD EXCHANGE RESERVES
_______________________________________________________________________________
VALUE
-------------------------------------------------------------------------------
NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
701,777,532 Class A shares;
194,405,536 Class B shares;
130,709,589 Class C shares
and 7,646,731 Advisor Class
shares outstanding) $1,034,582,263
(a) Securities issued in reliance on Section (4) 2 or Rule 144A of the
Securities Act of 1933. Rule 144A securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At March
31, 2000, these securities amounted to $25,756,522, representing 2.5% of net
assets.
Glossary of Terms:
FRN - Floating Rate Note
MTN - Medium Term Note
See notes to financial statements.
3
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) AFD EXCHANGE RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $20,513,511
EXPENSES
Advisory fee $ 891,951
Distribution fee - Class A 914,394
Distribution fee - Class B 1,222,726
Distribution fee - Class C 363,295
Transfer agency 380,261
Registration fees 120,617
Custodian 107,407
Administrative 52,144
Printing 35,322
Audit and legal 31,855
Trustees' fees 12,731
Miscellaneous 6,103
Total expenses 4,138,806
Net investment income 16,374,705
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 36,558
NET INCREASE IN NET ASSETS FROM OPERATIONS $16,411,263
See notes to financial statements.
4
STATEMENTS OF CHANGES IN NET ASSETS AFD EXCHANGE RESERVES
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30,
(UNAUDITED) 1999
--------------- ---------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 16,374,705 $ 19,166,124
Net realized gain on investment
transactions 36,558 7,937
Net increase in net assets from
operations 16,411,263 19,174,061
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (8,790,898) (8,793,553)
Class B (5,222,117) (6,755,553)
Class C (2,192,515) (3,331,654)
Advisor Class (169,175) (285,364)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase 337,483,262 248,788,147
Total increase 337,519,820 248,796,084
NET ASSETS
Beginning of year 697,062,443 448,266,359
End of period $1,034,582,263 $697,062,443
See notes to financial statements.
5
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) AFD EXCHANGE RESERVES
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
AFD Exchange Reserves (the "Fund") is registered under the Investment Company
Act of 1940 as a diversified, open-end investment company. The Fund's
investment objective is to provide maximum current income to the extent
consistent with safety of principal and liquidity. The Fund offers Class A,
Class B, Class C and Advisor Class shares. All four classes of shares have
identical voting, dividend, liquidation and other rights, except that each
class bears its own distribution and transfer agency expenses and has exclusive
voting rights with respect to its distribution plan.
Class A shares are sold for cash without an initial sales charge at the time of
purchase. On cash purchases of $1,000,000 or more, however, 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 redeemed within one year may be
charged. Class A shares may be exchanged for Class A shares of other Alliance
Mutual Funds, subject, in the case of Class A shares of the Fund that were
purchased for cash, to any applicable initial sales charge at the time of
exchange. Class A shares of the Fund also are offered in exchange for Class A
shares of other Alliance Mutual Funds without any sales charge at the time of
purchase, but on Class A shares that were received in exchange for Alliance
Mutual Fund Class A shares that were not subject to an initial sales charge
when originally purchased for cash because the purchase was of $1,000,000 or
more, a 1% CDSC may be assessed if shares of the Fund are redeemed within one
year of the Alliance Mutual Fund Class A shares originally purchased for cash.
Class B shares are sold for cash without an initial sales charge. However, a
CDSC is charged if shares are redeemed within four years after purchase. The
CDSC charge declines from 4% to zero depending on the period of time the shares
are held. Class B shares purchased for cash will automatically convert to Class
A shares after eight years. Class B shares may be exchanged for Class B shares
of other Alliance Mutual Funds. Class B shares also are offered in exchange for
Class B shares of other Alliance Mutual Funds without an initial sales charge.
However, a CDSC may be charged if shares are redeemed within a certain number
of years of the original purchase of Alliance Mutual Fund Class B shares. When
redemption occurs, the applicable CDSC schedule is that which applied to the
Alliance Mutual Fund Class B shares originally purchased for cash at the time
of their purchase.
Class C shares are sold for cash or in exchange for Class C shares of another
Alliance Mutual Fund without an initial sales charge at the time of purchase.
Class C shares are subject to a CDSC of 1% on redemptions made within the first
year after purchase. Class C shares do not convert to any other class of shares
of the Fund. Class C shares may be exchanged for Class C shares of other
Alliance Mutual Funds.
Advisor Class shares are sold for cash or in exchange for Advisor Class shares
of another Alliance Mutual Fund without an initial sales charge or CDSC and are
not subject to ongoing distribution expenses. Advisor Class shares are offered
solely to investors participating in fee-based programs and to certain
retirement plan accounts.
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
1. VALUATION OF SECURITIES
Securities in which the Fund invests are traded primarily in the
over-the-counter market and are valued at amortized cost, under which method a
portfolio instrument is valued at cost and any premium or discount is amortized
on a constant basis to maturity.
2. TAXES
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. DIVIDENDS
The Fund declares dividends daily and automatically reinvests such dividends in
additional shares at net asset
6
NOTES TO FINANCIAL STATEMENTS (CONTINUED) AFD EXCHANGE RESERVES
_______________________________________________________________________________
value. Net realized capital gains on investments, if any, are expected to be
distributed near year end.
4. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's Class
B and Class C shares bear higher distribution and transfer agent fees than
Class A shares and the Advisory Class shares have no distribution fees.
5. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are recorded on the
date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. It is the Fund's policy to take
possession of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund pays its Adviser, Alliance Capital Management L.P. an advisory fee at
the annual rate of .25% on the first $1.25 billion of average daily net assets;
.24% on the next $.25 billion; .23% on the next $.25 billion; .22% on the next
$.25 billion; .21% on the next $1 billion; and .20% in excess of $3 billion. In
addition to the advisory fee, the Fund also reimburses the Adviser for certain
legal and accounting services provided to the Fund by the Adviser. For the six
months ended March 31, 2000, such reimbursements totaled $52,144.
For the six months ended March 31, 2000, the Fund's expenses were reduced by
$17,185 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received $311,168, $991,741, and $86,564 in
contingent deferred sales charges imposed upon redemption by shareholders of
Class A, Class B, and Class C shares, respectively, for the six months ended
March 31, 2000.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $312,776 for the six months ended March 31, 2000.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A,
Class B and Class C. Under the Agreement, the Fund pays distribution and
servicing fees to the Distributor at an annual rate of up to .50% of the Fund's
average daily net assets attributable to Class A shares, 1.00% of the average
daily net assets attributable to Class B shares and .75% of the average daily
net assets attributable to Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. Such fee is accrued daily and paid
monthly. The Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities. The
Agreement also provides that the Adviser may use its own resources to finance
the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
At March 31, 2000, the cost of securities for federal income tax purposes was
the same as the cost for financial reporting purposes.
7
AFD EXCHANGE RESERVES
_______________________________________________________________________________
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At March 31,
2000, capital paid-in aggregated $701,777,532 for Class A, $194,405,536 for
Class B, $130,709,589 for Class C and $7,646,731 for Advisor Class.
Transactions, all at $1.00 per share, were as follows:
CLASS A
----------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30,
(UNAUDITED) 1999
--------------- ---------------
Shares sold 8,886,713,462 7,526,806,604
Shares issued on reinvestments of dividends 8,790,898 8,793,553
Shares converted from Class B 3,425,356 5,089,768
Shares redeemed (8,486,838,269) (7,419,466,877)
Net increase 412,091,447 121,223,048
CLASS B
----------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30,
(UNAUDITED) 1999
--------------- ---------------
Shares sold 374,687,526 691,292,049
Shares issued on reinvestments of dividends 5,222,117 6,755,553
Shares converted to Class A (3,425,356) (5,089,768)
Shares redeemed (449,570,010) (577,199,891)
Net increase (decrease) (73,085,723) 115,757,943
CLASS C
----------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30,
(UNAUDITED) 1999
--------------- ---------------
Shares sold 1,747,651,905 2,430,472,681
Shares issued on reinvestments of dividends 2,192,515 3,331,654
Shares redeemed (1,747,437,753) (2,430,333,424)
Net increase 2,406,667 3,470,911
ADVISOR CLASS
----------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30,
(UNAUDITED) 1999
--------------- ---------------
Shares sold 235,425,952 255,695,937
Shares issued on reinvestments of dividends 169,175 285,364
Shares redeemed (239,524,256) (247,645,056)
Net increase (decrease) (3,929,129) 8,336,245
8
FINANCIAL HIGHLIGHTS AFD EXCHANGE RESERVES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
2000 ---------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0240 .0408 .0454 .0411 .0416 .0453
LESS: DIVIDENDS
Dividends from net investment income (.0240) (.0408) (.0454) (.04110) (.0416) (.0453)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN
Total investment return based on net
asset value (a) 2.39% 4.16% 4.64% 4.19% 4.24% 4.64%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $702 $290 $168 $41 $41 $41
Ratios to average net assets of:
Expenses, net of waivers .98%(b) .99% 1.06% 1.38% 1.29% 1.21%
Expenses, before waivers .98%(b) .99% 1.06% 1.38% 1.29% 1.29%
Net investment income 4.91%(b) 4.06% 4.56% 4.10% 4.15% 4.63%(c)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
2000 ---------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0215 .0357 .0404 .0361 .0366 .0404
LESS: DIVIDENDS
Dividends from net investment income (.0215) (.0357) (.0404) (.0361) (.0366) (.0404)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN
Total investment return based on net
asset value (a) 2.14% 3.64% 4.13% 3.67% 3.72% 4.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $194 $267 $152 $74 $65 $65
Ratios to average net assets of:
Expenses, net of waivers 1.48%(b) 1.50% 1.58% 1.88% 1.79% 1.70%
Expenses, before waivers 1.48%(b) 1.50% 1.58% 1.88% 1.79% 1.78%
Net investment income 4.31%(b) 3.57% 4.05% 3.61% 3.67% 4.17%(c)
</TABLE>
See footnote summary on page 10.
9
AFD EXCHANGE RESERVES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
2000 ---------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0227 .0383 .0430 .0386 .0390 .0430
LESS: DIVIDENDS
Dividends from net investment income (.0227) (.0383) (.0430) (.0386) (.0390) (.0430)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN
Total investment return based on net
asset value (a) 2.27% 3.90% 4.39% 3.93% 3.98% 4.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $131 $128 $125 $24 $13 $10
Ratios to average net assets of:
Expenses, net of waivers 1.22%(b) 1.24% 1.29% 1.61% 1.55% 1.45%
Expenses, before waivers 1.22%(b) 1.24% 1.29% 1.61% 1.55% 1.52%
Net investment income 4.59%(b) 3.86% 4.34% 3.90% 3.89% 4.41%(c)
</TABLE>
<TABLE>
<CAPTION>
ADVISOR CLASS
--------------------------------------------------
SIX MONTHS JANUARY 30,
ENDED 1997(D)
MARCH 31, YEAR ENDED SEPTEMBER 30, TO
2000 ------------------------ SEPTEMBER 30,
(UNAUDITED) 1999 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0265 .0458 .0505 .0254
LESS: DIVIDENDS
Dividends from net investment income (.0265) (.0458) (.0505) (.0254)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
TOTAL RETURN
Total investment return based on
net asset value (a) 2.64% 4.68% 5.18% 3.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $7,647 $11,576 $3,240 $35
Ratio of expenses to average net assets .45%(b) .49% .55% .88%(b)
Ratio of net investment income to
average net assets 5.37%(b) 4.57% 5.08% 4.15%(b)
</TABLE>
(a) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total investment return calculated
for a period of less than one year is not annualized.
(b) Annualized.
(c) Net of expenses waived by the Adviser.
(d) Commencement of distribution.
10
AFD EXCHANGE RESERVES
_______________________________________________________________________________
AFD EXCHANGE RESERVES
1345 Avenue of the Americas
New York, NY 10105
Toll-free 1(800) 221-5672
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
P.O. Box 1912
Boston, MA 02105
LEGAL COUNSEL
SEWARD & KISSEL LLP
One Battery Park Plaza
New York, NY 10004
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
DISTRIBUTION OF THIS REPORT OTHER THAN TO SHAREHOLDERS MUST BE PRECEDED OR
ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS, WHICH CONTAINS FURTHER
INFORMATION ABOUT THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
11
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Health Care Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
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