ALLIANCE WORLDWIDE PRIVATIZATION FUND INC, 485APOS, 1998-11-27

ALLIANCE WORLDWIDE PRIVATIZATION FUND INC
485APOS, 1998-11-27

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As filed with the Securities and Exchange
Commission on November 27, 1998

File Nos. 33-76598
811-08426
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 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 11 X
____________________________________________________

Alliance Worldwide Privatization Fund, 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)

Copies of communications to:
Thomas G. MacDonald
Seward & Kissel
One Battery Park Plaza
New York, New York 10004

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)
60 days after filing pursuant to paragraph (a)(1)

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X on February 1, 1999 pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on (date) 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.

C-2

<PAGE>

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

N-1A Item No. Location in Prospectuses
(Caption)
PART A

Item 1. Front and Back Cover Pages..........Cover Pages

Item 2. Risk/Return Summary:
Investments, Risks, and
Performance.........................Risk/Return
Summary

Item 3. Risk/Return Summary:
Fee Table...........................Risk/Return
Summary

Item 4. Investment Objectives,
Principal Investment Strategies,
And Related Risks...................Other
Information
About the
Fund's
Objectives,
Strategies, and
Risks

Item 5. Management's Discussion of
Fund Performance....................Not Applicable

Item 6. Management, Organization,
And Capital Structure...............Management of
the Fund

Item 7. Shareholder Information.............Purchase and
Sale of Shares

Item 8. Distribution Arrangements...........Distribution
Arrangements

Item 9. Financial Highlights
Information.........................Financial
Highlights

C-3

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PART B Location in Statements
Of Additional Information
(Caption)

Item 10. Cover Page and
Table of Contents...................Cover Page

Item 11. Fund History........................Management of
the Fund;
General
Information

Item 12. Description of the Fund And
Its Investments and Risks...........Investment
Objectives and
Policies;
Investment
Restrictions

Item 13. Management of the Fund..............Management of
the Fund

Item 14. Control Persons and Principal
Holders of Securities ..............Management of
the Fund

Item 15. Investment Advisory and Other
Services............................Management of
the Fund

Item 16. Brokerage Allocation and
Other Practices.....................Brokerage and
Portfolio
Transactions;
General
Information

Item 17. Capital Stock and Other
Securities..........................Daily
Dividends -
Determination
of Net Asset
Value; General
Information

Item 18. Purchase, Redemption and Pricing
of Shares...........................Purchase and
Redemption of
Shares; Daily
Dividends -
Determination

C-4

<PAGE>

of Net Asset
Value

Item 19. Taxation of the Fund................Description of
the Fund;
Dividends,
Distributions
and Taxes

Item 20. Underwriters........................General
Information

Item 21. Calculation of Performance Data.....General
Information

Item 22. Financial Statements................Financial
Statements

C-5

<PAGE>

THE ALLIANCE STOCK FUNDS

PROSPECTUS

FEBRUARY 1, 1999

DOMESTIC STOCK FUNDS

-ALLIANCE PREMIER GROWTH FUND
-ALLIANCE GROWTH FUND
-ALLIANCE TECHNOLOGY FUND
-ALLIANCE QUASAR FUND
-THE ALLIANCE FUND

TOTAL RETURN FUNDS

-ALLIANCE GROWTH AND INCOME FUND
-ALLIANCE BALANCED SHARES
-ALLIANCE UTILITY INCOME FUND
-ALLIANCE REAL ESTATE INVESTMENT FUND

GLOBAL STOCK FUNDS

-ALLIANCE NEW EUROPE FUND
-ALLIANCE WORLDWIDE PRIVATIZATION FUND
-ALLIANCE INTERNATIONAL PREMIER GROWTH FUND
-ALLIANCE GLOBAL SMALL CAP FUND
-ALLIANCE INTERNATIONAL FUND
-ALLIANCE GREATER CHINA '97 FUND
-ALLIANCE ALL-ASIA INVESTMENT FUND
-ALLIANCE GLOBAL ENVIRONMENT FUND

The Alliance Stock Funds provide a broad selection of
investment alternatives to investors seeking capital
growth or high total return.

The Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

<PAGE>

TABLE OF CONTENTS

PAGE

RISK/RETURN SUMMARY.....................................
Domestic Stock Funds................................
Total Return Fund...................................
Global Stock Funds..................................
Summary of Principal Risks..........................
Principal Risks by Fund.............................

EXPENSE INFORMATION.....................................

GLOSSARY................................................

DESCRIPTION OF THE FUNDS................................
.....Investment Objectives and Policies.............

Description of Investment Practices.................
Additional Risk Considerations......................

MANAGEMENT OF THE FUND..................................

PURCHASE AND SALE OF SHARES.............................
How The Fund Values Its Shares......................
How To Buy Shares...................................
How to Exchange Shares..............................
How To Sell Shares..................................
How To Sell Shares..................................

DIVIDENDS, DISTRIBUTIONS AND TAXES......................

DISTRIBUTION ARRANGEMENT................................

GENERAL INFORMATION.....................................

FINANCIAL HIGHLIGHTS....................................

<PAGE>

RISK/RETURN SUMMARY

The following is a summary of certain key information about the
Alliance Stock Funds. You will find additional information about
each Fund including a detailed description of the risks of an
investment in each Fund after this summary.

The Funds' investment adviser is Alliance Capital Management
L.P., a global investment manager providing diversified services
to institutions and individuals through a broad line of
investments including more than 100 mutual funds. Since 1971,
Alliance has earned a reputation as a leader in the investment
world with over $[ ] billion in assets under management as of
December 31, 1998. Alliance provides investment management
services to employee benefit plans for __ of the FORTUNE 100
companies.

The Risk/Return Summary describes the Funds' objectives,
principal investment strategies, risks, and fees. More detailed
descriptions of the Funds can be found further back in the
Prospectus. Please be sure to read the more complete
descriptions of the Funds following this summary, including the
risks associated with investing in the Funds, BEFORE you invest.
Each of the Funds also may at times use certain types of
investment derivatives such as options, futures, forwards and
swaps. The use of these techniques includes special risks that
are discussed in this Prospectus.

The Summary includes a table showing the Fund's average annual
returns and a bar chart showing each Fund's annual returns. The
table and bar chart provide an indication of the historical risk
of an investment in each Fund by showing:

-- how the Fund's average annual returns for one, five and
10 years (or life of the Fund) compare to those of a
broad based securities market index; and

-- changes in the Fund's performance from year to year over
10 years or, if shorter, the life of the Fund.

A Fund's past performance, of course, does not necessarily
indicate how it will perform in the future.

Other important things for you to note:

-- You may gain or lose money by investing in the Funds.

-- An investment in the Funds is not a deposit in a bank
and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.

<PAGE>

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investments in equity
securities of a limited number of large, carefully
selected, high-quality U.S. companies that Alliance
believes are likely to achieve superior earnings growth.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of U.S. companies. In
contrast to most equity funds, the Fund focuses on a
relatively small number of intensively researched
companies. Alliance selects the Fund's investments from
a research universe of more than 600 companies that have
strong management, superior industry positions,
excellent balance sheets, and superior earnings growth
prospects.

Normally, the Fund invests in about 40-50 companies,
with the 25 most highly regarded of these companies
usually constituting approximately 70% of the Fund's net
assets. During market declines, while adding to
positions in favored stocks, the Fund becomes somewhat
more aggressive, gradually reducing the number of
companies represented in its portfolio. Conversely, in
rising markets, while reducing or eliminating fully-
valued positions, the Fund becomes somewhat more
conservative, gradually increasing the number of
companies represented in its portfolio. Through this
approach, Alliance seeks to gain positive returns in
good markets while providing some measure of protection
in poor markets. The Fund also may invest up to 20% of
its net assets in convertible securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index

<PAGE>

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Premier Growth Fund from 1992 through 1998:]

YEAR ANNUAL RETURN

1992* 9.29%
1993 9.98%
1994 -5.80%
1995 46.87%
1996 24.14%
1997 32.67%
1998

* Cumulative return since inception (9/28/92).

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will, however, fluctuate over
shorter periods. For example, during the period shown in the bar
chart, the Fund's:

Best Quarter was: up ____%, ________ quarter, 19__
Worst Quarter was: down ____%, _______quarter, 19__

ALLIANCE GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital. Current income is incidental to the
Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of companies with
favorable earnings outlooks and whose long-term growth
rates are expected to exceed that of the U.S. economy
over time. The Fund emphasizes investments in large-
and mid-cap companies. The Fund also may invest up to
25% of its total assets in lower rated fixed-income
securities and convertible bonds and generally up to 15%
in foreign securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %*
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Growth Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -0.22%
1991 63.61%
1992 10.67%
1993 28.99%
1994 -1.15%
1995 29.49%
1996 23.20%
1997 27.09%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE TECHNOLOGY FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation. Current income is
incidental to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of companies expected to benefit
from technological advances and improvements (i.e.,
companies that use technology extensively in the
development of new or improved products or processes).

<PAGE>

Within this framework, the Fund may invest in any
company and industry and in any type of security with
potential for capital appreciation. It invests in
well-known, established companies or in new or
unseasoned companies. The Fund also may invest in debt
securities and up to 10% of its total assets in foreign
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Technology Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 5.99%
1990 -3.08%
1991 54.24%
1992 15.60%
1993 21.63%
1994 28.50%
1995 45.80%
1996 19.41%
1997 4.54%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE QUASAR FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation by pursuing aggressive
investment policies. Current income is incidental to
the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of any company and
industry and in any type of security with potential for
capital appreciation. The Fund generally invests in a
widely-diversified portfolio spread among many
industries that offer the possibility of above-average
earnings growth. The Fund invests in well-known and
established companies and in new and unseasoned
companies. When selecting securities, Alliance
considers the economic and political outlook, the values
of specific securities relative to other investments,
trends in the determinants of corporate profits, and
management capabilities and practices. The Fund also
may invest in non-convertible bonds, preferred stocks,
and foreign securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
Russell 2000 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Quasar Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 28.20%
1990 -23.44%
1991 34.27%
1992 2.81%
1993 16.16%
1994 -7.27%
1995 47.64%
1996 32.62%
1997 17.24%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital and income primarily through
investments in common stocks.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund normally
invests substantially all of its assets in high-quality
common stocks that the Alliance expects to increase in
value. The Fund may invest in a broad range of
companies, from large to small, but tends to emphasize
attractive opportunities in medium-capitalization or
"mid-cap" companies. While the Fund's diversified and
high-quality investments cannot prevent fluctuations in
market values, they tend to limit investment risk and
contribute to achieving the Fund's objectives. The Fund
also can invest in convertible securities, U.S.
Government securities, and foreign securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of The Alliance Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 23.42%
1990 -4.36%
1991 33.91%
1992 14.70%
1993 14.26%
1994 -2.51%
1995 34.84%
1996 17.54%
1997 36.01%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

TOTAL RETURN FUNDS

The Total Return Funds offer investors both growth of capital and
current income through a range of investment alternatives.

ALLIANCE GROWTH & INCOME FUND

-- OBJECTIVE: The Fund's investment objective is capital
appreciation and income through investments in dividend-
paying common stocks of good quality, although the Fund

<PAGE>

also may invest in fixed-income and convertible
securities.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in dividend-paying common stocks of large,
well-established "blue-chip" companies. The Fund also
may invest in fixed income and convertible securities
and in securities of foreign issuers.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Growth And Income Fund from 1989 through
1998:]

YEAR ANNUAL RETURN

1989 25.56%
1990 -1.70%
1991 27.08%
1992 4.52%
1993 9.96%
1994 -4.20%
1995 37.86%
1996 24.13%
1997 28.86%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE BALANCED SHARES

-- OBJECTIVE: The Fund's investment objective is high
return by investing in a combination of equity and debt
securities.

-- PRINCIPAL INVESTMENT STRATEGIES: The percentage of the
Fund's assets invested in each type of security (equity
and fixed income) will vary, but at least 25% of the
Fund's total assets will be invested in fixed-income
securities. The Fund invests in U.S. Government
Securities, bonds, senior debt securities, preferred,
and common stocks. The Fund's investments in each type
of security depends on current economic conditions and
market outlooks. The Fund also may invest up to 15% of
its assets in foreign equity and fixed income
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index
Lehman Brothers
Government/Corporate
Bond Index
Salomon Brothers 1-Year
Treasury Bond Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Balanced Shares from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 14.13%
1990 -2.20%
1991 20.47%
1992 6.81%
1993 9.93%
1994 -5.79%
1995 26.64%
1996 9.36%
1997 27.13%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE UTILITY INCOME FUND

-- OBJECTIVE: The Fund's investment objective is current
income and capital appreciation through investments in
equity and fixed-income securities of companies in the
utilities industry.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of utility companies in the
electric, telecommunications, gas, and water utility
industries. The Fund may invest in both U.S. and
foreign utility companies, although the Fund will limit
its investments in issuers in any one foreign country to
no more than 15% of its assets. The Fund may invest up
to 35% of its net assets in lower-rated securities and
up to 30% of its net assets in convertible securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % N/A
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Utility Income Fund from 1993 through 1998:]

YEAR ANNUAL RETURN

1993* 4.42%
1994 -10.94%
1995 22.93%
1996 8.28%
1997 30.65%
1998

* Cumulative return since inception (10/18/93).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE REAL ESTATE INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
principally through investing in companies in equity
securities of companies that are primarily engaged in or
related to the real estate industry.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of real estate investment
trusts or "REITs" and other real estate industry

<PAGE>

companies. The Fund invests in real estate companies
that Alliance believes have strong property fundamentals
and management teams. The Fund seeks to invest in real
estate companies whose underlying portfolios are
diversified geographically and by property type. The
Fund may invest up to 35% of its total assets in
mortgage-backed securities, which are securities that
directly or indirectly represent participations in or
are collateralized by and payable from, mortgage loans
secured by real property.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A %
Class B %
Class C %
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Real Estate Investment Fund from 1996 through
1998:]

YEAR ANNUAL RETURN

1996* 20.29%
1997 22.98%
1998

* Cumulative return since inception (10/1/96).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors seeking long-term capital
appreciation a range of alternative approaches to investing in
foreign securities.

ALLIANCE NEW EUROPE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investments primarily in
the equity securities of companies based in Europe.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of European companies.
The Fund diversifies its investments among a number of
European countries and normally invests in companies
based in at least three of the countries, although it
may invest 25% or more or its assets in a single
country. The Fund may invest up to 35% of its total
assets in high-quality U.S. dollar or foreign currency
denominated fixed income securities issued by European
governmental entities, multinational companies, or
supranational organizations. At December 31, 1998, the
Fund had approximately 20% its assets invested in
securities of United Kingdom issuers.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance New Europe Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -11.92%
1991 3.31%
1992 -0.53%
1993 34.56%
1994 4.64%
1995 18.63%
1996 20.58%
1997 16.83%
1998

* Cumulative return since inception (4/2/90).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE WORLDWIDE PRIVATIZATION FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of companies that are
undergoing, or have undergone, privatization, although
normally the Fund will invest significantly more of its
assets in these securities. The Fund also invests in
securities of companies that will benefit from
privatizations. The Fund takes advantage of investment
opportunities, historically inaccessible to U.S.
individual investors, that result from the privatization
of state enterprises in both established and developing
economies. Because privatizations are integral to a
country's economic restructuring, securities sold in
initial public offerings often are attractively priced
to secure the issuer's transition to private sector
ownership. In addition, these enterprises often
dominate their local markets and have the potential for
significant managerial and operational efficiency gains.

The Fund diversifies its investments among a number of
countries and normally invests in issuers based in four,
and usually considerably more, countries. The Fund may

<PAGE>

invest up to 30% of its assets in any one of France,
Germany, Great Britain, Italy, and Japan and may invest
all of its assets in a single world region. The fund
also may invest up to 35% of its total assets in debt
securities and convertible debt securities of privatized
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI EAFE Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Worldwide Privatization Fund from 1994 through
1998:]

YEAR ANNUAL RETURN

1994* -0.20%
1995 4.91%
1996 23.14%
1997 13.18%
1998

* Cumulative return since inception (6/2/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investments in equity
securities of a limited number of carefully selected
non-U.S. companies that are judged likely to achieve
superior earnings growth. Current income is incidental
to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of comparatively large,
high-quality non-U.S. companies. The Fund invests in at
least four, and usually considerably more, countries.
Normally, the Fund invests no more than 15% of its total
assets in any one foreign country, but may invest up to
25% of its total assets in each of Canada, France,
Germany, Italy, Japan, The Netherlands, Switzerland, and
the United Kingdom. In contrast to more typical
international equity funds, the Fund focuses on a
relatively small number of intensively researched
companies. Alliance selects the Fund's investments from
a research universe of approximately 900 companies.

Normally, the Fund invests in about 60 companies, with
the 30 most highly regarded of these companies usually
constituting approximately 70% of the Fund's net assets.
The Fund invests in companies with market values in the
range, or in excess, of the mid-range of the EAFE index
(currently approximately $2.6 billion). Alliance may
take advantage of market volatility to adjust the Fund's
portfolio positions. To the extent consistent with
local market liquidity considerations, the Fund strives
to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on
weakness and to sell or reduce overpriced holdings. The
Fund invests primarily in equity securities and also may
invest in convertible securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

There is no bar chart for the Fund because it has not
completed a full calendar year of operations. The performance
information below is for the first six months of the Fund's
operations.
PERFORMANCE TABLE

6 MONTHS

Class A
Class B
Class C
MSCI World Index

ALLIANCE GLOBAL SMALL CAP FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital through investment in a global
portfolio of the equity securities of selected companies
with relatively small market capitalizations.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of global companies, both
domestic and foreign with relatively small market
capitalizations. The Fund's investments emphasize
companies with a size that are in the smallest 20% of
the U.S. stock market (or less than approximately $1.5
billion). Although these companies are small by U.S.
standards, they may be among the largest companies in
their own countries. The Fund may invest up to 35% of
its total assets in securities of companies whose market
capitalizations exceed the Fund's size standard. The
Fund invests in at least three countries including the
U.S.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

<PAGE>

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Global Small Cap Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 24.60%
1990 -24.89%
1991 25.29%
1992 -4.89%
1993 20.04%
1994 -4.55%
1995 27.18%
1996 19.37%
1997 8.08%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
through diversified investments in non-U.S. companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of established non-U.S.
countries, companies participating in foreign economies
with prospects for growth, including U.S. companies
having their principal activities and interests outside
the U.S., and foreign government securities. The Fund
diversifies its investments broadly among countries and
normally invests in at least three foreign countries,
although it may invest a substantial portion of its
assets in one or more foreign countries.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance International Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 29.62%
1990 -20.95%
1991 7.72%
1992 -5.86%
1993 27.51%
1994 5.68%
1995 10.10%
1996 7.20%
1997 1.41%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GREATER CHINA '97 FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of at least 80%
of its total assets in equity securities of Greater
China companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in
equity securities of Greater China companies, which are
companies in China, Hong Kong, and Taiwan. Of these

<PAGE>

countries, the Fund expects to invest a significant
portion of its assets, which may be greater than 50%, in
Hong Kong companies and may invest all of its assets in
Hong Kong companies or companies of either of the other
Greater China countries. The Fund may also invest in
convertible securities and equity-linked debt securities
issued or guaranteed by Greater China companies or
Greater China Governments, their agencies, or
instrumentalities. As of December 31, 1998 the Fund
had approximately ___% of its assets invested in
securities of Hong Kong companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A
Class B
Class C
MSCI All Country Asia
Pacific

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Greater China '97 Fund for 1998:]

YEAR ANNUAL RETURN

1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE ALL-ASIA INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

<PAGE>

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of varied types of companies
based in Asia and in the Pacific region. The Fund
invests in equity securities, preferred stocks, and
equity-linked debt securities issues by Asian companies
and may invest more than 50% of its total assets in
equity securities of Japanese issuers. The Fund also
may invest up to 35% of its total assets in debt
securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities,
and may invest up to 25% of its net assets in
convertible securities. At December 31, 1998, the Fund
had approximately ___% of its total assets invested in
securities of Japanese companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI All Country Asia
Pacific Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance All-Asia Investment Fund from 1994 through
1998:]

YEAR ANNUAL RETURN

1994* 0.10%
1995 10.21%
1996 4.58%
1997 -35.10%
1998

* Cumulative return since inception (11/28/94).

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will, however, fluctuate over

<PAGE>

shorter periods. For example, during the period shown in the bar
chart, the Fund's:

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GLOBAL ENVIRONMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of substantially
all of its assets in equity securities of companies in
the environmental sector.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in environmental companies, which are
companies whose principal business involves the sale of
environmental protection systems or services. The Fund
also invests in companies whose principal business lies
outside the environmental sector but anticipate
environmental regulations or consumer preferences
through the development of new products, services, or
services that would contribute to a cleaner and
healthier environment. The Fund will invest
substantially all of its assets in these two types of
companies. The Fund invests in securities of companies
in at least three, and normally considerably more,
countries. At December 31, 1998, the Fund had
approximately 82% invested in equity securities of U.S.
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % N/A N/A
Class C N/A N/A N/A
S&P 500 Index

Bar Chart

The annual returns in the bar chart are for the Fund's Class A
shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown.

<PAGE>

[GRAPHIC - A bar chart illustrates the annual return for Class A
shares of Alliance Global Environment Fund from 1990 through
1998:]

YEAR ANNUAL RETURN

1990* -5.48%
1991 6.17%
1992 -15.33%
1993 -0.44%
1994 -2.12%
1995 19.30%
1996 31.60%
1997 18.73%
1998

* Cumulative return since inception (6/1/90).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

SUMMARY OF PRINCIPAL RISKS

The value of an investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values.
In this summary, we describe the principal risks that may affect
a Fund's portfolio as a whole. These risks and the Funds subject
to the risks appear in a chart at the end of the section. All
Funds could be subject to additional principal risks because the
types of investments made by each Fund can change over time.
This Prospectus has additional descriptions of investments that
appear in bold type in the discussions under "Additional
Investment Practices" or "Risk Considerations." These sections
also include more information about the Funds, their investments,
and related risks.

-- MARKET RISK This is the risk that the value of a Fund's
investments will fluctuate as the stock or bond markets
fluctuate and that prices overall will decline over
short or longer-term periods. All of the Alliance Stock
Funds are subject to market risk. Market risk also can
apply to a particular industry sector and type of issuer
and includes risks associated with investing substantial
amounts in companies located in specific countries or
geographic regions. Factors affecting that sector,
issuer, or region could have a major effect on the value

<PAGE>

of a Fund's investments. While any Fund is subject to
specific market risk to the extent it invests in a
specific market, Alliance Stock Funds that are
particularly subject to this risk are:

- PARTICULAR INDUSTRIES: Technology Fund, Global
Environment Fund, Utility Income Fund, and Real
Estate Investment.

- TYPES OF ISSUERS: Alliance Fund and Growth Fund
(medium capitalization or mid-cap companies),
Technology Fund (companies using new technology),
Worldwide Privatization Fund (companies converting
to private sector ownership), and Global Small Cap
Fund (smaller, less seasoned companies or small cap
companies).

- COUNTRIES OR GEOGRAPHIC REGIONS: International
Fund, Worldwide Privatization Fund, New Europe
Fund, All-Asia Investment Fund, and Greater China
'97 Fund.

-- INTEREST RATE RISK This is the risk that changes in
interest rates will affect the value of a Fund's
investments in income-producing or fixed-income or debt
securities. Increases in interest rates may cause the
value of a Fund's investments to decline. Interest rate
risk is applicable to Funds that invest in fixed income
securities and is greater for those Alliance Funds that
invest a substantial portion of their assets in fixed-
income or debt securities such as Balanced Shares,
Utility Income Fund, and Growth and Income Fund.

Interest rate risk is greater for those Funds that
invest in lower-rated securities or comparable unrated
securities such as Utility Income Fund. Real Estate
Investment Trust, which invests in mortgage-backed
securities, is more susceptible to changes in interest
rates. Real Estate Investment Trust also has more
exposure to interest rate risk because it invests in
real estate industry companies.

-- CREDIT RISK This is the risk that the issuer of a
security will be unable or unwilling to make timely
payments of interest or principal, or to otherwise honor
its obligations. The degree of risk for a particular
security may be reflected in its credit rating. Credit
risk is applicable to Funds that invest in fixed-income
securities and is greater for those Alliance Stock Funds
that invest a substantial portion of their assets in
lower-rated securities, such as Utility Income Fund.

<PAGE>

-- FOREIGN RISK This is the risk of investments in issuers
located in foreign countries. All Alliance Stock Funds
with foreign investments are subject to this risk,
including, in particular, International Fund, Worldwide
Privatization Fund, New Europe Fund, All-Asia Investment
Fund, Greater China '97 Fund, Global Small Cap Fund, and
Global Environment Fund. Funds investing in foreign
securities may experience more rapid and extreme changes
in value than Funds with investments solely in
securities of U.S. companies. This is because the
securities markets of many foreign countries are
relatively small, with a limited number of companies
representing a small number of industries.
Additionally, foreign securities issuers are usually not
subject to the same degree of regulation as U.S.
issuers. Reporting, accounting, and auditing standards
of foreign countries differ, in some cases
significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation,
currency blockage, or political changes or diplomatic
developments could adversely affect a Fund's investments
in a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose
its entire investment.

-- CURRENCY RISK This is the risk that fluctuations in the
exchange rates between the U.S. dollar and foreign
currencies may negatively affect the value of a Fund's
investments. Funds with foreign investments are subject
to this risk, including, in particular, International
Fund, Worldwide Privatization Fund, New Europe Fund,
All-Asia Investment Fund, Greater China '97 Fund, Global
Small Cap Fund, and Global Environment Fund.

-- MANAGEMENT RISK Each Alliance Stock Fund is subject to
management risk because it is an actively managed
investment portfolio. Alliance will apply its
investment techniques and risk analyses in making
investment decisions for the Funds, but there is no
guarantee that its techniques will produce the intended
result.

-- FOCUSED PORTFOLIO RISK Funds, such as Premium Growth
and International Premium Growth, that invest in a
limited number of companies may have more risk because
changes in the value of a single security may have a
more significant effect, either negative or positive, on
the Fund's net asset value. Similarly, Greater China
'97 Fund may have more risk because it is "non-
diversified" meaning that it invests its assets in a

<PAGE>

smaller number of companies than many other
international funds.

-- ALLOCATION RISK Balanced Shares has the risk that
allocation of its investments between equity and debt
securities may have a more significant effect on the
Fund's net asset value when one of these asset classes
is performing more poorly than the other.

<PAGE>

PRINCIPAL RISKS BY FUND

The following chart summarizes the Principal Risks of each Fund.
Risks not marked for a particular Fund may, however, still apply
to some extent to that fund at various times.

INTEREST FOCUSED ALLO-
MARKET RATE CREDIT FOREIGN CURRENCY MANAGEMENT PORTFOLIO CATION
FUND RISK RISK RISK RISK RISK RISK RISK RISK

ALLIANCE
FUND X X

ALLIANCE
GROWTH
FUND X X

ALLIANCE
PREMIER
GROWTH
FUND X X X

ALLIANCE
TECHNOLOGY
FUND X X

ALLIANCE
QUASAR
FUND X X

ALLIANCE
INTERNATIONAL
FUND X X X X

ALLIANCE
INTERNATIONAL
PREMIER
GROWTH
FUND X X X X X

ALLIANCE
WORLDWIDE
PRIVATIZATION
FUND X X X X

ALLIANCE
NEW EUROPE
FUND X X X X

<PAGE>

ALLIANCE
ALL-ASIA
INVESTMENT
FUND X X X X

ALLIANCE
GREATER
CHINA
'97 FUND X X X X X

ALLIANCE
GLOBAL
SMALL CAP
FUND X X X X

ALLIANCE
GLOBAL
ENVIRONMENT
FUND X X X X

ALLIANCE
BALANCED
SHARES X X X X X

ALLIANCE
UTILITY
INCOME
FUND X X X X X X

ALLIANCE
GROWTH AND
INCOME
FUND X X X X X X

ALLIANCE
REAL ESTATE
INVESTMENT
FUND X X X

EXPENSE INFORMATION

This table describes the fees and expenses that you may pay if
you buy and hold shares of the Funds.

<PAGE>

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)

CLASS A CLASS B CLASS C
SHARES SHARES SHARES

Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% None None

Maximum Deferred Sales Charge None 4.0% during 1.0% during
(Load) (as a percentage of the 1st the 1st
original purchase price year, year, 0%
or redemption proceeds, decreasing thereafter
whichever is lower) 1.0%
annually to
0% after the
4th year*

Exchange Fee None None None

* Class B Shares of every Fund automatically convert to Class A
Shares after 8 years.

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) AND EXAMPLE

The example is to help you compare the cost of investing in the
Fund with the cost of investing in other funds. It assumes that
you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. It
also assumes that your investment has a 5% return each year and
that the Fund's operating expenses stay the same. Your actual
costs may be higher or lower.

<TABLE>
<CAPTION>
OPERATING EXPENSES EXAMPLES

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PREMIER GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.00% 1.00% 1.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .33% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

<PAGE>

GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .75% .75% .75% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

TECHNOLOGY CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.11% 1.11% 1.11% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

QUASAR CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.15% 1.15% 1.15% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .21% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

ALLIANCE FUND CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .70% .70% .70% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .19% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

GROWTH AND INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .51% .51% .51% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .21% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

BALANCED SHARES CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .63% .63% .63% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .24% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

<PAGE>

UTILITY INCOME CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 0.00% 0.00% 0.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

REAL ESTATE INVESTMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees % % % After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees % % % After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

NEW EUROPE CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.07% 1.07% 1.07% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

WORLDWIDE PRIVATIZATION CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees 1.00% 1.00% 1.00% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Net Expenses % % %

INTERNATIONAL PREMIER GROWTH CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees % % % After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees % % % After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GLOBAL SMALL CAP CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

<PAGE>

INTERNATIONAL CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .92% .92% .92% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .17% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GREATER CHINA '97 CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

ALL-ASIA INVESTMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

Management Fees .75% .75% .75% After 1 Yr. $ $ $ $ $
Rule 12b-1 Fees .30% 1.00% 1.00% After 3 Yrs. $ $ $ $ $
Other Expenses % % % After 5 Yrs. $ $ $ $ $
Administration Fees
Total Fund Operating Expenses % % % After 10 Yrs. $ $(b) $(b) $ $
Waiver and/or Expense
Reimbursement (a) % % %
Net Expenses % % %

GLOBAL ENVIRONMENT CLASS A CLASS B CLASS C CLASS A CLASS B+ CLASS B++ CLASS C+ CLASS C++

<FN>
+ Assumes redemption at end of period.
++ Assumes no redemption at end of period.
(a) Reflects Alliance's waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating
expenses. The level of waiver or reimbursement may be
changed upon 60 days' notice to the Fund.
(b) Assumes Class B shares convert to Class A after eight years.
</TABLE>

<PAGE>

GLOSSARY

This Prospectus uses the following terms.

TYPES OF SECURITIES

CONVERTIBLE SECURITIES are fixed-income securities that are
convertible into common stock.

DEBT SECURITIES are bonds, debentures, notes, bills, loans, other
direct debt instruments, and other fixed, floating and variable
rate debt obligations, but do not include convertible securities.

DEPOSITARY RECEIPTS include American Depositary Receipts
("ADRS"), Global Depositary Receipts ("GDRS") and other types of
depositary receipts.

EQUITY SECURITIES include (i) common stocks, partnership
interests, business trust shares and other equity or ownership
interests in business enterprises, and (ii) securities
convertible into, and rights and warrants to subscribe for the
purchase of, such stocks, shares and interests.

FIXED-INCOME SECURITIES are debt securities and dividend-paying
preferred stocks and include floating rate and variable rate
instruments.

FOREIGN GOVERNMENT SECURITIES are securities issued or
guaranteed, as to payment of principal and interest, by
governments, quasi-governmental entities, governmental agencies
or other governmental entities.

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

RULE 144A SECURITIES are securities that may be resold under Rule
144A under the Securities Act.

U.S. GOVERNMENT SECURITIES are securities issued or guaranteed by
the United States Government, its agencies or instrumentalities.

TYPES OF COMPANIES

ASIAN COMPANY is an entity that (i) is organized under the laws
of an Asian country and conducts business in an Asian country,
(ii) derives 50% or more of its total revenues from business in
Asian countries, or (iii) issues equity or debt securities that
are traded principally on a stock exchange in an Asian country.

<PAGE>

ASIAN COUNTRIES are Australia, the Democratic Socialist Republic
of Sri Lanka, the Hong Kong Special Administrative Region of the
People's Republic of China (Hong Kong), the Islamic Republic of
Pakistan, Japan, the Kingdom of Thailand, Malaysia, Negara Brunei
Darussalam (Brunei), New Zealand, the People's Republic of China,
the People's Republic of Kampuchea (Cambodia), the Republic of
China (Taiwan), the Republic of India, the Republic of Indonesia,
the Republic of Korea (South Korea), the Republic of the
Philippines, the Republic of Singapore, the Socialist Republic of
Vietnam and the Union of Myanmar.

BENEFICIARY COMPANIES are Eligible Companies whose principal
businesses lie outside the environmental sector but nevertheless
anticipate environmental regulations or consumer preferences
through the development of new products, processes or services
that are intended to contribute to a cleaner and healthier
environment, such as companies that anticipate the demand for
plastic substitutes, aerosol substitutes, alternative fuels and
processes that generate less hazardous waste.

ELIGIBLE COMPANIES are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.

ENVIRONMENTAL COMPANIES are Eligible Companies that have a
principal business involving the sale of systems or services
intended to foster environmental protection, such as waste
treatment and disposal, remediation, air pollution control and
recycling.

GREATER CHINA COMPANY is an entity that (i) is organized under
the laws of a Greater China country and conducts business in a
Greater China country, (ii) derives 50% or more of its total
revenues from businesses in Greater China countries, or
(iii) issues equity or debt securities that are traded
principally on a stock exchange in a Greater China country. A
company of a particular Greater China country is a company that
meets any of these criteria with respect to that country.

GREATER CHINA COUNTRIES are the People's Republic of China
("China"), the Hong Kong Special Administrative Region of the
People's Republic of China ("Hong Kong") and the Republic of
China ("Taiwan").

NON-U.S. COMPANY is an entity that (i) is organized under the
laws of a foreign country and conducts business in a foreign
country, (ii) derives 50% or more of its total revenues from
business in foreign countries, or (iii) issues equity or debt
securities that are traded principally on a stock exchange in a
foreign country.

<PAGE>

RATING AGENCIES, RATED SECURITIES, AND INDEXES

DUFF & PHELPS is Duff & Phelps Credit Rating Co.

EAFE INDEX is Morgan Stanley Capital International Europe,
Australasia and Far East ("EAFE") Index.

FITCH is Fitch IBCA, Inc.

INVESTMENT GRADE SECURITIES are fixed-income securities rated Baa
and above by Moody's or B and above by S&P, Duff & Phelps or
Fitch, or determined by Alliance to be of equivalent quality.

LOWER-RATED SECURITIES are fixed-income securities rated Ba or
below by Moody's or BB or below by S&P, Duff & Phelps or Fitch,
or determined by Alliance to be of equivalent quality, and are
commonly referred to as "JUNK BONDS."

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

PRIME COMMERCIAL PAPER is commercial paper rated Prime 1 by
Moody's or A-1 or higher by S&P or, if not rated, issued by
companies that have an outstanding debt issue rated Aa or higher
by Moody's or AA or higher by S&P.

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

S&P 500 INDEX is S&P's 500 Composite Stock Price Index, a widely
recognized unmanaged index of market activity.

OTHER

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.

EXCHANGE is the New York Stock Exchange.

SECURITIES ACT is the Securities Act of 1933, as amended.

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DESCRIPTION OF THE FUNDS
_______________________________________________________________

This section of the Prospectus provides a more complete
description of the principal investment objectives, strategies,
and risks of the Alliance Stock Funds. Of course, there can be
no assurance that any Fund will achieve its investment objective.

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Please note that:

- -- Additional discussion of the Funds' investments, including
the risks of the investments, can be found in the discussion
under DESCRIPTION OF INVESTMENT PRACTICES following this
section.

- -- The description of the principal risks for a Fund may include
risks defined in the SUMMARY OF RISKS above. Additional
information about risks of investing in a Fund can be found
in the discussion under ADDITIONAL RISK CONSIDERATIONS.

- -- Additional descriptions of each Fund's strategies,
investments, and risks can be found in the Fund's Statement
of Additional Information or SAI.

- -- Except as noted, (i) the Funds' investment objectives are
"fundamental" and cannot be changed without shareholder vote,
and (ii) the Funds' investment policies are not fundamental
and thus can be changed without a shareholder vote.

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
the U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

Premier Growth Fund seeks long-term growth of capital by
investing predominantly in the equity securities of a limited
number of large, carefully selected, high-quality U.S. companies
that are judged likely to achieve superior earnings growth. As a
matter of fundamental policy, the Fund normally invests at least
85% of its total assets in the equity securities of U.S.
companies. A U.S. company is a company that is organized under
United States law, has its principal office in the United States
and issues equity securities that are traded principally in the
United States. Normally, about 40-50 companies will be
represented in the Fund's portfolio, with the 25 most highly
regarded of these companies usually constituting approximately
70% of the Fund's net assets. The Fund is thus atypical from most
equity mutual funds in its focus on a relatively small number of
intensively researched companies. The Fund is designed for those
seeking to accumulate capital over time with less volatility than
that associated with investment in smaller companies.

Alliance's investment strategy for the Fund emphasizes stock
selection and investment in the securities of a limited number of

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issuers. Alliance relies heavily upon the fundamental analysis
and research of its large internal research staff, which
generally follows a primary research universe of more than 600
companies that have strong management, superior industry
positions, excellent balance sheets and superior earnings growth
prospects. An emphasis is placed on identifying companies whose
substantially above average prospective earnings growth is not
fully reflected in current market valuations.

In managing the Fund, Alliance seeks to utilize market volatility
judiciously (assuming no change in company fundamentals),
striving to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on weakness
and to sell or reduce overpriced holdings. The Fund normally
remains nearly fully invested and does not take significant cash
positions for market timing purposes. During market declines,
while adding to positions in favored stocks, the Fund becomes
somewhat more aggressive, gradually reducing the number of
companies represented in its portfolio. Conversely, in rising
markets, while reducing or eliminating fully valued positions,
the Fund becomes somewhat more conservative, gradually increasing
the number of companies represented in its portfolio. Alliance
thus seeks to gain positive returns in good markets while
providing some measure of protection in poor markets.

Alliance expects the average market capitalization of companies
represented in the Fund's portfolio normally to be in the range,
or in excess, of the average market capitalization of companies
included in the S&P 500.

The Fund also may:

- -- invest up to 20% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
it;

- -- invest up to 5% of its net assets in rights or warrants;

- -- invest up to 15% of its total assets in securities of foreign
issuers whose common stocks are eligible for purchase by it;

- -- purchase and sell exchange-traded index options and stock
index futures contracts; and

- -- write covered exchange-traded call options on its securities
of up to 15% of its total assets, and purchase and sell
exchange-traded call and put options on common stocks written
by others of up to, for all options, 10% of its total assets.

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that

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changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GROWTH FUND

Alliance Growth Fund seeks long-term growth of capital. Current
income is only an incidental consideration. The Fund seeks to
achieve its objective by investing primarily in equity securities
of companies with favorable earnings outlooks, which have long-
term growth rates that are expected to exceed that of the U.S.
economy over time. The Fund's investment objective is not
fundamental.

The Fund also may invest up to 25% of its total assets in lower-
rated fixed-income and convertible bonds. The Fund generally
will not invest in securities rated at the time of purchase below
Caa- by Moody's and CCC- by S&P, Duff & Phelps or Fitch or in
securities judged by Alliance to be of comparable investment
quality. However, from time to time, the Fund may invest in
securities rated in the lowest grades (i.e., C by Moody's or D or
equivalent by S&P, Duff & Phelps or Fitch), or securities
Alliance judges to be of comparable investment quality, if there
are prospects for an upgrade or a favorable conversion into
equity securities. If the credit rating of a security held by
the Fund falls below its rating at the time of purchase (or
Alliance determines that the credit quality of the security has
deteriorated), the Fund may continue to hold the security if such
investment is considered appropriate under the circumstances.

The Fund also may:

- -- invest in zero-coupon and payment-in-kind bonds;

- -- invest in foreign securities although not generally in excess
of 15% of its total assets;

- -- buy or sell foreign currencies, options on foreign
currencies, foreign currency futures contracts (and related
options) and deal in forward foreign exchange contracts;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to 25% of its total
assets;

- -- purchase and sell securities on a forward commitment basis;

- -- buy and sell stock index futures contracts and options on
those contracts and on stock indices;

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- -- purchase and sell futures contracts and options on futures
and U.S. Treasury securities;

- -- write covered call and put options; and

- -- purchase and sell put and call options.

ALLIANCE TECHNOLOGY FUND

Alliance Technology Fund emphasizes growth of capital and invests
for capital appreciation. Current income is only an incidental
consideration. The Fund may seek income by writing listed call
options. The Fund invests primarily in securities of companies
expected to benefit from technological advances and improvements
(i.e., companies that use technology extensively in the
development of new or improved products or processes). The Fund
will normally have at least 80% of its assets invested in the
securities of these companies. The Fund normally will have
substantially all its assets invested in equity securities, but
it also invests in debt securities offering an opportunity for
price appreciation. The Fund will invest in listed and unlisted
securities, in U.S. securities and up to 10% of its total assets
in foreign securities.

The Fund's policy is to invest in any company and industry and in
any type of security with potential for capital appreciation. It
invests in well-known and established companies and in new and
unseasoned companies.

The Fund also may:

- -- write covered call options on its securities of up to 15% of
its total assets and purchase exchange-listed call and put
options, including exchange-traded index put options of up
to, for all options, 10% of its total assets;

- -- invest up to 10% of its total assets in warrants; and

- -- make loans of portfolio securities of up to 30% of its total
assets.

Because the Fund invests primarily in technology companies,
factors affecting those types of companies could have a
significant effect on the Fund's net asset value. In addition,
the Fund's investments in technology stocks, especially those of
smaller, less-seasoned companies, tend to be more volatile than
the overall market. The Fund's investments in debt and foreign
securities have credit risk and foreign risk.

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ALLIANCE QUASAR FUND

Alliance Quasar Fund seeks growth of capital by pursuing
aggressive investment policies. The Fund invests for capital
appreciation and only incidentally for current income. Selecting
securities based on the possibility of appreciation cannot
prevent loss in value. Moreover, because the Fund's investment
policies are aggressive, an investment in the Fund is risky and
investors who want assured income or preservation of capital
should not invest in the Fund.

The Fund invests in any company and industry and in any type of
security with potential for capital appreciation. It invests in
well-known and established companies and in new and unseasoned
companies. When selecting securities for the Fund, Alliance
considers the economic and political outlook, the values of
specific securities relative to other investments, trends in the
determinants of corporate profits and management capability and
practices.

The Fund invests principally in equity securities, but it also
invests to a limited degree in non-convertible bonds and
preferred stocks. The Fund invests in listed and unlisted U.S.
and foreign securities. The Fund periodically invests in special
situations, which occur when the securities of a company are
expected to appreciate due to a development particularly or
uniquely applicable to that company regardless of general
business conditions or movements of the market as a whole.

The Fund also may:

- -- make short sales of securities against the box but not more
than 15% of its net assets may be deposited on short sales;
and

- -- write covered call options of up to 15% of its total assets
and purchase and sell put and call options written by others
of up to, for all options, 10% of its total assets.

Investments in smaller companies may have more risk because they
tend to be more volatile than the overall stock market. The
Fund's investments in non-convertible bonds, preferred stocks,
and foreign stocks may have credit risk and foreign risk.

THE ALLIANCE FUND

The Alliance Fund seeks long-term growth of capital and income
primarily through investment in common stocks. The Fund normally
invests substantially all of its assets in common stocks that
Alliance believes will appreciate in value. The Fund also may
invest in other types of securities such as convertible

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securities, investment grade instruments, U.S. Government
securities and high quality, short-term obligations such as
repurchase agreements, bankers' acceptances and domestic
certificates of deposit, and may invest without limit in foreign
securities. The Fund generally does not effect portfolio
transactions in order to realize short-term trading profits or
exercise control.

The Fund also may:

- -- write exchange-traded covered call options on up to 25% of
its total assets;

- -- make secured loans of portfolio securities equal in value up
to 25% of its total assets to brokers, dealers and financial
institutions;

- -- enter into repurchase agreements of up to seven days'
duration with commercial banks, but only if those agreements
together with any restricted securities and any securities
which do not have readily available market quotations do not
exceed 10% of its net assets;

While the diversification and generally high quality of the
Fund's investments cannot prevent fluctuations in market values,
they tend to limit investment risk and contribute to achieving
the Fund's objective.

TOTAL RETURN FUNDS

The Total Return Funds provide a range of investment alternatives
to investors seeking both growth of capital and current income.

ALLIANCE GROWTH AND INCOME FUND

Alliance Growth and Income Fund seeks appreciation through
investments primarily in dividend-paying common stocks of good
quality. The Fund also may invest fixed-income securities and
convertible securities.

The Fund also may try to realize income by writing covered call
options listed on domestic securities exchanges. The Fund also
invests in foreign securities. Since the purchase of foreign
securities entails certain political and economic risks, the Fund
restricts its investments in these securities to issues of high
quality. The Fund also may also purchase and sell financial
forward and futures contracts and options on these securities for
hedging purposes.

<PAGE>

ALLIANCE BALANCED SHARES

Alliance Balanced Shares seeks a high return through a
combination of current income and capital appreciation. Although
the Funds investment objective is not fundamental, the Fund is a
"balanced" fund as a matter of fundamental policy. The Fund
invests in equity securities of high-quality, financially strong,
dividend-paying companies. Normally, the Fund's investments will
consist of about 60% in stocks, but stocks may make up to 75% of
its investments. The Fund will invest at least 25% of its total
assets in investment grade debt securities. These investments
may include short- and long-term debt securities, preferred
stocks, and convertible debt securities and convertible preferred
stocks to the extent that their values are attributable to their
fixed-income characteristics. Other than this restriction, the
percentage of the Fund's assets invested in each type of security
will vary.

The Fund invests in U.S. Government securities, bonds, senior
debt securities, and preferred and common stocks in such
proportions and of such type as Alliance deems best adapted to
the current economic and market outlooks. The Fund may invest up
to 15% of the value of its total assets in foreign equity and
fixed-income securities eligible for purchase by the Fund under
its investment policies described above.

The Fund also may:

- -- enter into contracts for the purchase or sale for future
delivery of foreign currencies;

- -- purchase and write put and call options on foreign currencies
and enter into forward foreign currency exchange contracts
for hedging purposes

- -- subject to market conditions, write covered call options
listed on a domestic exchange to realize income.

As a balanced fund, the Fund has the risk that the allocation of
its investments between equity and debt securities may have a
more significant effect on the Fund's net asset value when one on
these asset classes is performing more poorly than the other.

ALLIANCE UTILITY INCOME FUND

Alliance Utility Income Fund seeks current income and capital
appreciation by investing primarily in equity and fixed-income
securities of companies in the utilities industry. As a
fundamental policy, the Fund normally invests at least 65% of its
total assets in securities of companies in the utilities
industry.

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The utilities industry consists of companies engaged in:

- -- the manufacture, production, generation, provision,
transmission, sale and distribution of gas and electric
energy, and communications equipment and services, including
telephone, telegraph, satellite, microwave, and other
companies providing communication facilities for the public;
or

- -- the provision of other utility or utility-related goods and
services, including, but not limited to, entities engaged in
water provision, cogeneration, waste disposal system
provision, solid waste electric generation, independent power
producers, and non-utility generators.

The Fund seeks to take advantage of the characteristics and
historical performance of securities of utility companies, many
of which pay regular dividends and increase their common stock
dividends over time. The Fund considers a company to be in the
utilities industry if, during the most recent twelve-month
period, at least 50% of the company's gross revenues, on a
consolidated basis, were derived from its utilities activities.

The Fund may invest in securities of both U.S. and foreign
issuers, although the Fund will invest no more than 15% of its
total assets in issuers in any one foreign country. The Fund
invests at least 65% of its total assets in income-producing
securities, but there is otherwise no limit on the allocation of
the Fund's investments between equity securities and fixed-income
securities. The Fund may invest up to 35% of its net assets in
lower-rated securities. The Fund will not retain a security that
is downgraded below B or determined by Alliance to have undergone
similar credit quality deterioration following purchase.

The Fund may invest up to 35% of its total assets in equity and
fixed-income securities of domestic and foreign corporate and
governmental issuers other than utility companies. These
securities include U.S. Government securities and repurchase
agreements for those securities, foreign government securities,
corporate fixed-income securities of domestic issuers, corporate
fixed-income securities of foreign issuers denominated in foreign
currencies or in U.S. dollars (in each case including fixed-
income securities of an issuer in one country denominated in the
currency of another country), qualifying bank deposits and prime
commercial paper.

The Fund also may:

- -- invest up to 30% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

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- -- invest up to 5% of its net assets in rights or warrants;

- -- invest in depositary receipts, securities of supranational
entities denominated in the currency of any country,
securities denominated in European Currency Units and "semi-
governmental securities;"

- -- write covered call and put options, purchase call and put
options on securities of the types in which it is permitted
to invest that are exchange-traded and over-the-counter, and
write uncovered call options for cross-hedging purposes;

- -- purchase and sell exchange-traded options on any securities
index composed of the types of securities in which it may
invest;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including an index of
U.S. Government securities, foreign government securities,
corporate fixed-income securities, or common stock, and may
purchase and write options on futures contracts;

- -- purchase and write call and put options on foreign currencies
traded on U.S. and foreign exchanges or over-the-counter for
hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities of up to 20% of
its total assets.

The Fund's principal risks include its investing primarily in
electric utility companies. Factors affecting that industry
sector can have a significant effect on the Fund's net asset
value. The United States utilities industry has experienced
significant changes in recent years. Electric utility companies

<PAGE>

in general have been favorably affected by lower fuel costs, the
full or near completion of major construction programs and lower
financing costs. In addition, many utility companies have
generated cash flows in excess of current operating expenses and
construction expenditures, permitting some degree of
diversification into unregulated businesses. Regulatory changes,
however, could increase costs or impair the ability of nuclear
and conventionally fueled generating facilities to operate their
facilities and reduce their ability to make dividend payments of
their securities. Rates of return of utility companies generally
are subject to review and limitation by state public utilities
commissions and tend to fluctuate with marginal financing costs.
Rate changes ordinarily lag behind changes in financing costs and
can favorably or unfavorably affect the earnings or dividend pay-
outs of utilities stocks depending upon whether the rates and
costs are declining or rising.

Gas transmission companies, gas distribution companies and
telecommunications companies are also undergoing significant
changes. Declines in the prices of alternative fuels have
adversely affected gas utilities. Oversupply conditions and
competition also have affected gas utilities. Telephone
utilities are still experiencing the effects of the break-up of
American Telephone & Telegraph Company, including increased
competition and rapidly developing technologies with which
traditional telephone companies now compete. Although there can
be no assurance that increased competition and other structural
changes will not adversely affect the profitability of gas and
telephone utilities, or that other negative factors will not
develop in the future, in Alliance's opinion, increased
competition and change may provide better positioned utility
companies with opportunities for enhanced profitability.

Utility companies historically have been subject to the risks of
increases in fuel and other operating costs, high interest costs,
costs associated with compliance with environmental and nuclear
safety regulations, service interruptions, economic slowdowns,
surplus capacity, competition and regulatory changes. There can
also be no assurance that regulatory policies or accounting
standards changes will not negatively affect utility companies'
earnings or dividends. Utility companies are subject to
regulation by various authorities and may be affected by the
imposition of special tariffs and changes in tax laws. To the
extent that rates are established or reviewed by governmental
authorities, utility companies are subject to the risk that such
authorities will not authorize increased rates. Because of the
Fund's policy of concentrating its investments in utility
companies, the Fund is more susceptible than most other mutual
funds to economic, political or regulatory occurrences affecting
the utilities industry.

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Foreign utility companies, like those in the U.S., are generally
subject to regulation, although the regulation may or may not be
comparable to domestic regulations. Foreign utility companies in
certain countries may be more heavily regulated by their
respective governments than utility companies located in the U.S.
As in the U.S., utility companies generally are required to seek
government approval for rate increases. In addition, many
foreign utility companies use fuels that cause more pollution
than those used in the U.S. and may yet be required to invest in
pollution control equipment. Foreign utility regulatory systems
vary from country to country and may evolve in ways different
from regulation in the U.S. The percentage of the Fund's assets
invested in issuers of particular countries will vary.

Increases in interest rates may cause the value of the Fund's
investments to decline and the decrease in value may not be
offset by higher interest rate income. The Fund's investments in
lower-rated securities may be subject to more credit risk than a
fund that invests in higher-rated securities.

ALLIANCE REAL ESTATE INVESTMENT FUND

Alliance Real Estate Investment Fund seeks a total return from
long-term growth of capital and from income principally through
investing in a portfolio of equity securities of issuers that are
primarily engaged in or related to the real estate industry.

The Fund normally invests at least 65% of its total assets in
equity securities of real estate investment trusts, or REITs, and
other real estate industry companies. A "real estate industry
company" is a company that derives at least 50% of its gross
revenues or net profits from the ownership, development,
construction, financing, management or sale of commercial,
industrial or residential real estate or interests in these
properties. The Fund invests in equity securities that include
common stock, shares of beneficial interest of REITs, and
securities with common stock characteristics, such as preferred
stock or convertible securities ("Real Estate Equity
Securities").

The Fund may invest up to 35% of its total assets in
(a) securities that directly or indirectly represent
participations in, or are collateralized by and payable from,
mortgage loans secured by real property ("Mortgage-Backed
Securities"), such as mortgage pass-through certificates, real
estate mortgage investment conduit ("REMIC") certificates and
collateralized mortgage obligations ("CMOs") and (b) short-term
investments. These instruments are described below.

In selected Real Estate Equity Securities, Alliance's analysis
will focus on determining the degree to which the company

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involved can achieve sustainable growth in cash flow and dividend
paying capability. Alliance believes that the primary
determinant of this capability is the economic viability of
property markets in which the company operates and that the
secondary determinant of this capability is the ability of
management to a value through strategic focus and operating
expertise. The Fund will purchase Real Estate Equity Securities
when, in the judgment of Alliance, their market price does not
adequately reflect this potential. In making this determination,
Alliance will take into account fundamental trends in underlying
property markets as determined by proprietary models, site visits
conducted by individuals knowledgeable in local real estate
markets, price-earnings ratios (as defined for real estate
companies), cash flow growth and stability, the relationship
between asset value and market price of the securities, dividend
payment history, and such other factors which Alliance may
determine from time to time to be relevant. Alliance will
attempt to purchase for the Fund Real Estate Equity Securities of
companies whose underlying portfolios are diversified
geographically and by property type.

The Fund may invest without limitation in shares of REITs. REITs
are pooled investment vehicles that invest primarily in income
producing real estate or real estate related loans or interests.
REITs are generally classified as equity REITs, mortgage REITs,
or a combination of equity and mortgage REITs. Equity REITs
invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of
their assets in real estate mortgages and derive income from the
collection of interest payments. Similar to investment companies
such as the Fund, REITs are not taxed on income distributed to
shareholders provided they comply with several requirements of
the Code. The Fund will indirectly bear its proportionate share
of expenses incurred by REITs in which the Fund invests in
addition to the expenses incurred directly by the Fund.

The Fund's investment strategy with respect to Real Estate Equity
Securities is based on the premise that property market
fundamentals are the primary determinant of growth underlying the
performance of Real Estate Equity Securities. Value and
management further distinguishes the most attractive Real Estate
Equity Securities. The Fund's research and investment process is
designed to identify those companies with strong property
fundamentals and strong management teams. This process is
comprised of real estate market research, specific property
inspection, and securities analysis. Alliance believes that this
process will result in a portfolio that will consist of Real
Estate Equity Securities of companies that own assets in the most

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desirable markets across the country, diversified geographically
and by property type.

To implement the Fund's research and investment process, Alliance
has retained the consulting services of CB Richard Ellis, Inc.
("CBRE"), a publicly held company and the largest real estate
services company in the United States. CBRE business includes
real estate brokerage, property and facilities management, and
real estate finance and investment advisory activities. As
consultant to Alliance, CBRE provides access to its proprietary
model, REIT-Score, which analyzes the approximately 18,000
properties owned by these 142 companies. Using proprietary
databases and algorithms, CBRE analyzes local market rent,
expense, and occupancy trends, market specific transaction
pricing, demographic and economic trends, and leading indicators
of real estate supply such as building permits. Over 1,000
asset-type specific geographic markets are analyzed and ranked on
a relative scale by CBRE in compiling its REIT-Score database.
The relative attractiveness of these real estate industry
companies is similarly ranked based on the composite rankings of
the properties they own.

The universe of property-owning real estate industry firms
consists of approximately 142 companies of sufficient size and
quality to merit consideration for investment by the Fund. Once
the universe of real estate industry companies has been distilled
through the market research process, CBRE's local market presence
provides the capability to perform site specific inspections of
key properties. This analysis examines specific location,
condition, and sub-market trends. CBRE's use of locally based
real estate professionals provides Alliance with a window on the
operations of the portfolio companies as information can
immediately be put in the context of local market events. Only
those companies whose specific property portfolios reflect the
promise of their general markets will be considered for initial
and continued investment by the Fund.

Alliance further screens the universe of real estate industry
companies by using rigorous financial models and by engaging in
regular contact with management of targeted companies. Each
management's strategic plan and ability to execute the plan are
determined and analyzed. Alliance makes extensive use of CBRE's
network of industry analysts in order to assess trends in tenant
industries. This information is then used to further interpret
management's strategic plans. Financial ratio analysis is used
to isolate those companies with the ability to make value-added
acquisitions. This information is combined with property market
trends and used to project future earnings potential.

The Fund may invest in short-term investments including:
corporate commercial paper and other short-term commercial

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obligations, in each case rated or issued by companies with
similar securities outstanding that are rated Prime-1, Aa or
better by Moody's or A-1, AA or better by S&P; obligations
(including certificates of deposit, time deposits, demand
deposits and bankers' acceptances) of banks with securities
outstanding that are rated Prime-1, Aa or better by Moody's or
A-1, AA or better by S&P; and obligations issued or guaranteed by
the U.S. Government or its agencies or instrumentalities with
remaining maturities not exceeding 18 months.

The Fund may invest in debt securities rated BBB or higher by S&P
or Baa or higher by Moody's or, if not rated, of equivalent
credit quality as determined by Alliance. The Fund expects that
it will not retain a debt security that is downgraded below BBB
or Baa or, if unrated, determined by Alliance to have undergone
similar credit quality deterioration, subsequent to purchase by
the Fund.

The Fund also may:

- -- invest up to 10% of its net assets in rights or warrants;

- -- invest up to 15% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
the Fund;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to seven days'
duration;

- -- enter into forward commitment transactions as long as the
Fund's aggregate commitments under such transactions are not
more than 30% of the Fund's total assets;

- -- enter into standby commitment agreements; and

- -- make short sales of securities or maintain a short position
but only if at all times when a short position is open not
more than 25% of the Fund's net assets (taken at market
value) is held as collateral for such sales.

Because the Fund invests a substantial portion of its assets in
the real estate market, it has many of the same risks as direct
ownership of real estate. For example, the value of real estate
could decline due to a variety of factors affecting the real
estate market generally, such as overbuilding, increases in
interest rates, or declines in rental rates. In addition, REITs
are dependent on the capability of their managers, may have

<PAGE>

limited diversification, and could be significantly affected by
changes in tax laws.

The fund's investments in mortgage-backed securities have
prepayment risk, which is the risk that mortgage loans will be
repaid when interest rates decline and the Fund will have to
reinvest in securities with lower interest rates. This risk
causes mortgage-backed securities to have significantly greater
price and yield volatility than traditional fixed-income
securities. The Fund's investments in REMICs, CMOs and other
types of mortgage-backed securities may be subject to special
risks which are described under the Additional Risks Section.

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors the opportunity to
participate in the potential for long-term capital appreciation
available from investment in foreign securities.

ALLIANCE NEW EUROPE FUND

Alliance New Europe Fund seeks long-term capital appreciation
through investment primarily in the equity securities of
companies based in Europe. The Fund intends to invest
substantially all of its assets in the equity securities of
European companies and has a fundamental policy of normally
investing at least 65% of its total assets in these securities.
Up to 35% of its total assets may be invested in high quality
U.S. dollar or foreign currency denominated fixed-income
securities issued or guaranteed by European governmental
entities, or by European or multinational companies or
supranational organizations.

Alliance believes that the quickening pace of economic
integration and political change in Europe creates the potential
for many European companies to experience rapid growth. In
addition, the emergence of new market economies in Europe and the
broadening and strengthening of other European economies may
significantly accelerate economic development. The Fund will
invest in companies that Alliance believes possess rapid growth
potential. The Fund will emphasize investments in larger,
established companies, but will also invest in smaller, emerging
companies.

In recent years, economic ties between the former "east bloc"
countries of Eastern Europe and certain other European countries
have been strengthened. Alliance believes that as this
strengthening continues, some Western European financial
institutions and other companies will have special opportunities
to facilitate East-West transactions. The Fund will seek
investment opportunities among such companies and, as such become

<PAGE>

available, within the former "east bloc," although the Fund will
not invest more than 20% of its total assets in these companies,
or more than 10% of its total assets in issuers based in any one
country.

The Fund diversifies its investments among a number of European
countries and, under normal circumstances, will invest in
companies based in at least three of these countries. The Fund,
however, may invest without limit in a single European country.
While the Fund does not intend to concentrate its investments in
a single country, at times 25% or more of its assets may be
invested in companies located in a single country. During such
times, the Fund would be subject to a correspondingly greater
risk of loss due to adverse political or regulatory developments,
or an economic downturn, within that country.

The Fund also may:

- -- invest up to 20% of its total assets in warrants and rights
to purchase equity securities of European companies;

- -- invest in depositary receipts or other securities convertible
into securities of companies based in European countries,
debt securities of supranational entities denominated in the
currency of any European country, debt securities denominated
in European Currency Units of an issuer in a European country
(including supranational issuers) and "semi-governmental
securities";

- -- purchase and sell forward contracts;

- -- write covered call or put options and sell and purchase
exchange-traded put and call options, including exchange-
traded index options;

- -- enter into financial futures contracts, including contracts
for the purchase or sale for future delivery of foreign
currencies and futures contracts based on stock indices, and
purchase and write options on futures contracts;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make secured loans of portfolio securities of up to 30% of
its total assets;

- -- enter into forward commitments for the purchase or sale of
securities; and

- -- enter into standby commitment agreements.

<PAGE>

The Fund's investments in non-U.S. countries and smaller
countries may have more risk because they tend to be more
volatile than the overall stock market. To the extent the Fund
invests a substantial amount of its assets in a particular
European country, your investment has the risk that market
changes or other events affecting that country may have a more
significant effect on the Fund's net asset value. The Fund's
investments in U.S. dollar or foreign currency denominated fixed-
income securities have interest rate and credit risk.

ALLIANCE WORLDWIDE PRIVATIZATION FUND

Alliance Worldwide Privatization Fund seeks long-term capital
appreciation. As a fundamental policy, the Fund invests at least
65% of its total assets in equity securities issued by
enterprises that are undergoing, or have undergone, privatization
(as described below), although normally significantly more of its
assets will be invested in such securities. The balance of its
investments will include securities of companies believed by
Alliance to be beneficiaries of privatizations. The Fund is
designed for investors desiring to take advantage of investment
opportunities, historically inaccessible to U.S. individual
investors, that are created by privatizations of state
enterprises in both established and developing economies. These
companies include those in Western Europe and Scandinavia,
Australia, New Zealand, Latin America, Asia and Eastern and
Central Europe and, to a lesser degree, Canada and the United
States.

The Fund's investments in enterprises undergoing privatization
may comprise three distinct situations. First, the Fund may
invest in the initial offering of publicly traded equity
securities (an "initial equity offering") of a government- or
state-owned or controlled company or enterprise (a "state
enterprise"). Secondly, the Fund may purchase securities of a
current or former state enterprise following its initial equity
offering. Finally, the Fund may make privately negotiated
purchases of stock or other equity interests in a state
enterprise that has not yet conducted an initial equity offering.
Alliance believes that substantial potential for capital
appreciation exists as privatizing enterprises rationalize their
management structures, operations and business strategies in
order to compete efficiently in a market economy, and the Fund
will thus emphasize investments in such enterprises.

The Fund diversifies its investments among a number of countries
and normally invests in issuers based in at least four, and
usually considerably more, countries. The Fund invests up to 15%
of its total assets in issuers in any one foreign country, except
that the Fund may invest up to 30% of its total assets in issuers
in any one of France, Germany, Great Britain, Italy and Japan.

<PAGE>

The Fund may invest all of its assets within a single region of
the world.

A major premise of the Fund's approach is that the equity
securities of privatized companies offer opportunities for
significant capital appreciation. In particular, because
privatizations are integral to a country's economic
restructuring, securities sold in initial equity offerings often
are priced attractively to secure the issuer's successful
transition to private sector ownership. Additionally, these
enterprises often dominate their local markets and typically have
the potential for significant managerial and operational
efficiency gains.

The Fund may invest up to 35% of its total assets in debt
securities and convertible debt securities of issuers whose
common stocks are eligible for purchase by the Fund. The Fund
invests up to 5% of its net assets in lower-rated securities.
The Fund will not retain a non-convertible security that is
downgraded below C or determined by Alliance to have undergone
similar credit quality deterioration following purchase.

The Fund also may:

- -- invest up to 20% of its total assets in rights or warrants;

- -- write covered call and put options, purchase put and call
options on securities of the types in which it is permitted
to invest and on exchange-traded index options, and write
uncovered options for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, foreign government securities, or
common stock and may purchase and write options on future
contracts;

<PAGE>

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities equal in value of
up to 30% of its total assets to entities with which it can
enter into repurchase agreements.

Investments in non-U.S. companies and smaller companies may have
more risk because they tend to be more volatile than the overall
stock market. The Fund's investments in debt securities and
convertible securities have interest risk and credit risk.

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

Alliance International Premier Growth Fund seeks long term
capital appreciation by investing predominately in the equity
securities of a limited number of carefully selected non-U.S.
companies that are judged likely to achieve superior earnings
growth. As a matter of fundamental policy, the Fund will invest
under normal circumstances at least 85% of its total assets in
equity securities. The Fund makes investments based upon their
potential for capital appreciation. Current income is incidental
to that objective.

In the main, the Fund's investments will be in comparatively
large, high-quality companies. Normally, about 60 companies will
be represented in the Fund's portfolio, and the 30 most highly
regarded of these companies usually will constitute approximately
70% of the Fund's net assets. The Fund thus differs from more
typical international equity mutual funds by focusing on a
relatively small number of intensively researched companies. The
Fund is designed for investors seeking to accumulate capital over
time. Because of market risks inherent in any investment, the
selection of securities on the basis of their appreciation
possibilities cannot ensure against possible loss in value, and

<PAGE>

there is, of course, no assurance that the Fund's investment
objective will be met.

Alliance expects the average weighted market capitalization of
the companies represented in the Fund's portfolio (i.e., the
number of a company's outstanding shares multiplied by the price
per share) normally will be in the range of, or in excess of,
that of the companies comprising the EAFE Index. As of
December 31, 1998, the average weighted market capitalization of
those companies was approximately $__ billion.

Within the investment framework of the Fund, Alliance's Large Cap
Growth Group, headed by Alfred Harrison, Alliance's Vice
Chairman, has responsibility for managing the Fund's portfolio.
As discussed below, in selecting the Fund's portfolio investments
Alliance's Large Cap Growth Group will follow a structured,
disciplined research and investment process that is essentially
similar to that which it employs in managing Premier Growth Fund.

In managing the Fund's assets, Alliance's investment strategy
will emphasize stock selection and investment in the securities
of a limited number of issuers. Alliance depends heavily upon
the fundamental analysis and research of its large global equity
research team situated in numerous locations around the world.
Its global equity analysts follow a research universe of
approximately 900 companies. As one of the largest multinational
investment management firms, Alliance has access to considerable
information concerning the companies in its research universe, an
in-depth understanding of the products, services, markets and
competition of these companies and a good knowledge of their
management. Research emphasis is placed on the identification of
companies whose superior prospective earnings growth is not fully
reflected in current market valuations.

Alliance constantly adds to and deletes from this universe as
fundamentals and valuations change. Alliance's global equity
analysts rate companies in three categories. The performance of
each analyst's ratings is an important determinant of his or her
incentive compensation. The equity securities of "one-rated"
companies are expected to significantly outperform the local
market in local currency terms. All equity securities purchased
for the Fund's portfolio will be selected from the universe of
approximately 100 "one-rated" companies. As noted above,
approximately 70% of the Fund's net assets will usually be
invested in the approximately 30 most highly regarded such
companies. The Fund will not concentrate more than 25% of its
total assets in any one industry. Within this limit, portfolio
emphasis upon particular industries or sectors will be a by-
product of the stock selection process rather than the result of
assigned targets or ranges.

<PAGE>

The Fund's investments will be diversified among at least four,
and usually considerably more, countries. No more than 15% of
the Fund's total assets will be invested in issuers in any one
foreign country, except that the Fund may invest up to 25% of its
total assets in issuers in each of Canada, France, Germany,
Italy, Japan, The Netherlands, Switzerland and the United
Kingdom. Within these limits, geographic distribution of the
Fund's investments among countries or regions will also be a
product of the stock selection process rather than predetermined
allocation. To the extent that the Fund's assets will be
concentrated within one region, the Fund may be subject to any
special risks that may be associated with that region. While the
Fund may engage in currency hedging programs in periods in which
Alliance perceives extreme exchange rate risk, the Fund will not
normally make significant use of currency hedging strategies.

In the management of the Fund's investment portfolio, Alliance
will seek to utilize market volatility judiciously (assuming no
change in company fundamentals) to adjust the Fund's portfolio
positions. To the extent consistent with local market liquidity
considerations, the Fund will strive to capitalize on apparently
unwarranted price fluctuations, both to purchase or increase
positions on weakness and to sell or reduce overpriced holdings.
Under normal circumstances, the Fund will remain substantially
fully invested in equity securities and will not take significant
cash positions for market timing purposes. Rather, through
"buying into declines" and "selling into strength," Alliance
seeks superior relative returns over time.

The Fund also may:

- -- invest up to 20% of its total assets in convertible
securities of issuers whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its total assets in rights or warrants;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

<PAGE>

- -- purchase or sell forward contracts;

- -- enter into standby commitment agreements;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain short positions of
no more than 5% of its net assets as collateral for short
sales; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that
changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GLOBAL SMALL CAP FUND

Alliance Global Small Cap Fund seeks long-term growth of capital
through investment in a global portfolio of the equity securities
of selected companies with relatively small market
capitalization. The Fund's portfolio emphasizes companies with
market capitalizations that would have placed them (when
purchased) in about the smallest 20% by market capitalization of
actively traded U.S. companies, or market capitalizations of up
to about $1.5 billion. Because the Fund applies the U.S. size
standard on a global basis, its foreign investments might rank
above the lowest 20%, and, in fact, might in some countries rank
among the largest, by market capitalization in local markets.
Normally, the Fund invests at least 65% of its assets in equity
securities of these smaller capitalization companies. These
companies are located in at least three countries, one of which
may be the U.S. Up to 35% of the Fund's total assets may be
invested in securities of companies whose market capitalizations
exceed the Fund's size standard. The Fund's portfolio securities
may be listed on an U.S. or foreign exchange or traded
over-the-counter.

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts or other securities
representing securities of companies based in countries other
than the U.S.;

- -- purchase or sell forward foreign currency contracts;

- -- write covered call options on its securities of up to 15% of
its total assets, and purchase exchange-traded call and put
options, including put options on market indices of up to,
for all options, 10% of its total assets; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

One of the Fund's principal risks is its investments in smaller
capitalization companies. Alliance believes that smaller
capitalization companies often have sales and earnings growth
rates exceeding those of larger companies and that these growth
rates tend to cause more rapid share price appreciation.
Investing in smaller capitalization stocks, however, involves
greater risk than is associated with larger, more established
companies. For example, smaller capitalization companies often
have limited product lines, markets, or financial resources.
They may be dependent for management on one or a few key persons
and can be more susceptible to losses and risks of bankruptcy.
Their securities may be thinly traded (and therefore have to be
sold at a discount from current market prices or sold in small
lots over an extended period of time), may be followed by fewer
investment research analysts, and may be subject to wider price
swings. For these reasons, the Fund's investments may have a
greater chance of loss than investments in securities of larger
capitalization companies. In addition, transaction costs in
small capitalization stocks may be higher than in those of larger
capitalization companies.

The Fund's investments in non-U.S. companies and in smaller
companies will be more volatile and may differ substantially from
the overall market.

ALLIANCE INTERNATIONAL FUND

Alliance International Fund seeks a total return on its assets
from long-term growth of capital and from income primarily
through a broad portfolio of marketable securities of established
non-U.S. companies, companies participating in foreign economies
with prospects for growth, including U.S. companies having their

<PAGE>

principal activities and interests outside the U.S., and foreign
government securities. Normally, the Fund will invest more than
80% of its assets in these types of companies.

The Fund expects to invest primarily in common stocks of
established non-U.S. companies that Alliance believes have
potential for capital appreciation or income or both, but the
Fund is not required to invest exclusively in common stocks or
other equity securities. The Fund may invest in any other type
of investment grade security, including convertible securities,
as well as in warrants, or obligations of the U.S. or foreign
governments and their political subdivisions.

The Fund intends to diversify its investments broadly among
countries and normally invests in at least three foreign
countries, although it may invest a substantial portion of its
assets in one or more of such countries. The Fund may invest in
companies, wherever organized, that Alliance judges have their
principal activities and interests outside the U.S. These
companies may be located in developing countries, which involves
exposure to economic structures that are generally less diverse
and mature, and to political systems which can be expected to
have less stability, than those of developed countries. The Fund
currently does not intend to invest more than 10% of its total
assets in companies in, or governments of, developing countries.

The Fund also may:

- -- purchase or sell forward foreign currency exchange contracts;

- -- write covered call or put options, sell and purchase U.S. or
foreign exchange-listed put and call options, including
exchange-traded index options;

- -- enter into financial futures contracts, including contracts
for the purchase or sale for future delivery of foreign
currencies and stock index futures, and purchase and write
put and call options on futures contracts traded on U.S. or
foreign exchanges or over-the-counter;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make loans of portfolio securities equal in value up to 30%
of its total assets; and

- -- enter into repurchase agreements of up to seven days'
duration of up to 10% of the Fund's total assets.

<PAGE>

Investments in non-U.S. countries may have more risk because they
tend to be more volatile than the U.S. stock market. To the
extent that the Fund invests a substantial amount of its assets
in a particular foreign country, an investment in the Fund has
the risk that market changes or other events affecting that
country may have a more significant effect, either negative or
positive, on the Fund's net asset value.

ALLIANCE GREATER CHINA '97 FUND, INC.

Alliance Greater China '97 Fund is a non-diversified investment
company that seeks long-term capital appreciation through
investment of at least 80% of its total assets in equity
securities issued by Greater China companies. The Fund expects
to invest a significant portion, which may be greater than 50%,
of its assets in equity securities of Hong Kong companies and may
invest, from time to time, all of its assets in Hong Kong
companies or companies of either of the other Greater China
countries.

In recent years, China, Hong Kong and Taiwan have each
experienced a high level of real economic growth, although growth
is expected to slow in 1998. This growth has resulted from
advantageous economic conditions, including favorable
demographics, competitive wage rates, and rising per capita
income and consumer demand. Significantly, the growth has also
been fueled by an easing by both China and Taiwan of government
restrictions and an increased receptivity to foreign investment.
This expanded, if not yet complete, openness to foreign
investment extends as well to the securities markets of both
countries. Hong Kong's free-market economy has historically
included securities markets completely open to foreign
investments. All three countries have regulated stock exchanges
upon which shares of an increasing number of Greater China
companies are traded.

With its population estimated at more than 1.2 billion as a
driving force, and notwithstanding its continuing political
rigidity, China's economic growth has been coupled with
significantly reduced government economic intervention and basic
economic structural change. Recent years have seen large
increases in industrial production with a significant decline in
the state sector share of industrial output, and increased
involvement of local governmental units and the private sector in
establishing new business enterprises.

With China's growth has come an increasing direct and indirect
economic involvement of all three Greater China countries. For
some time, Hong Kong, a world financial and trade center in its
own right, with a large stock exchange and offices of many of the
world's multinational companies, has been the gateway to trade

<PAGE>

with and foreign investment in China. With the long-awaited
transfer on July 1, 1997 of the sovereignty of Hong Kong from
Great Britain to China, not only the political but the economic
ties between China and Hong Kong are expected to continue to
intensify, with the continuation of Hong Kong's economic system
as provided for in the law governing its sovereignty.

Notwithstanding the, at times considerable, political tension
between the two countries, it is generally recognized that
substantially increased trade and investment with China has been
generated from Taiwan, in many cases through Hong Kong. Along
with this increased interaction with China, Taiwan is becoming a
regional technological and telecommunication center, while
continuing the process of opening its economy up to foreign
investment. Although geographically limited, Taiwan boasts an
economy among the world's twenty largest and its foreign exchange
reserves are third largest in the world measured in U.S. dollars.
As China's economy continues to expand, it is expected that
Taiwan's economic interaction with China will likewise increase.

Alliance believes that over the long term conditions are
favorable for continuing and expanding economic growth in all
three Greater China countries. It is this potential which the
Fund hopes to take advantage of by investing both in established
and new and emerging companies. Appendix A has additional
Information about the Greater China countries.

In addition to investing in equity securities of Greater China
companies, the Fund may invest up to 20% of its total assets in
(i) debt securities issued or guaranteed by Greater China
companies or by Greater China governments, their agencies or
instrumentalities, and (ii) equity or debt securities issued by
issuers other than Greater China companies. The Fund will invest
only investment grade securities. If the Fund has an investment
in a debt security that is downgraded below investment grade or
is determined by Alliance to have undergone a similar credit
quality deterioration, the Fund will dispose of that security.

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

<PAGE>

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 20% of its net assets in loans and other direct
debt securities;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, securities issued by foreign
government entities, or common stock, and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for u.s. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

All or some of the policies and practices listed above may not be
available to the Fund in the Greater China countries and the Fund
will utilize these policies only to the extent permissible.

The Fund's investments in Greater China companies will be
significantly more volatile and differ from the overall market.
Your investment also has the risk that market changes or other
events affecting the Greater China countries may have a more
significant effect on the Fund's net asset value. In addition

<PAGE>

the Fund is "nondiversified" meaning that it invests its assets
in a smaller number of companies than many other international
funds. As a result, changes in the value of a single security
may have a more significant effect, either negative or positive,
on the Fund's net asset value.

ALLIANCE ALL-ASIA INVESTMENT FUND

Alliance All-Asia Investment Fund's investment objective is long-
term capital appreciation. The Fund will invest at least 65% of
its total assets in equity securities (for the purposes of this
investment policy, rights, warrants and options to purchase
common stocks are not deemed to be equity securities), preferred
stocks and equity-linked debt securities issued by Asian
companies. The Fund may invest up to 35% of its total assets in
debt securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities. The Fund
will invest at least 80% of its total assets in Asian companies
and Asian debt securities but also may invest in securities
issued by non-Asian issuers. The Fund expects to invest, from
time to time, a significant portion, which may be in excess of
50%, of its assets in equity securities of Japanese companies.

In the past decade, Asian countries generally have experienced a
high level of real economic growth due to political and economic
changes, including foreign investment and reduced government
intervention in the economy. Alliance believes that certain
conditions exist in Asian countries that create the potential for
continued rapid economic growth. These conditions include
favorable demographics and competitive wage rates, increasing
levels of foreign direct investment, rising per capita incomes
and consumer demand, a high savings rate, and numerous
privatization programs. Asian countries are also becoming more
industrialized and are increasing their intra-Asian exports while
reducing their dependence on Western export demand. Alliance
believes that these conditions are important to the long-term
economic growth of Asian countries.

As the economies of many Asian countries move through the
"emerging market" stage, thus increasing the supply of goods,
services and capital available to less developed Asian markets
and helping to spur economic growth in those markets, the
potential is created for many Asian companies to experience rapid
growth. In addition, many Asian companies the securities of
which are listed on exchanges in more developed Asian countries
will be participants in the rapid economic growth of the lesser-
developed countries. These companies generally offer the
advantages of more experienced management and more developed
market regulation.

<PAGE>

As their economies have grown, the securities markets in Asian
countries have also expanded. New exchanges have been created
and the number of listed companies, annual trading volume and
overall market capitalization have increased significantly.
Additionally, new markets continue to open to foreign
investments. The Fund also offers investors the opportunity to
access relatively restricted markets. Alliance believes that
investment opportunities in Asian countries will continue to
expand.

The Fund will invest in companies believed to possess rapid
growth potential. Thus, the Fund will invest in smaller,
emerging companies, but will also invest in larger, more
established companies in such growing economic sectors as capital
goods, telecommunications, and consumer services.

With respect to its investments in debt securities, the Fund will
primarily invest in investment grade debt securities but may
invest up to 5% of its net assets in lower-rated securities and
lower-rated loans and other lower-rated direct debt instruments.
The Fund will not retain a security that is downgraded below C or
determined by Alliance to have undergone similar credit quality
deterioration following purchase.

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 25% of its net assets in loans and other direct
debt instruments;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of

<PAGE>

U.S. Government securities, securities issued by foreign
government entities, or common stock and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for u.s. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in Asian and Pacific region countries will
be significantly more volatile and may differ significantly from
the overall market. To the extent the Fund invests a substantial
amount of its assets in Japanese companies, your investment has
the risk that market changes or other events affecting that
country may have a more significant effect on the Fund's net
assets value. The Fund's investments in debt securities have
interest rate and credit risk.

ALLIANCE GLOBAL ENVIRONMENT FUND

Alliance Global Environment Fund is a non-diversified investment
company that seeks long-term capital appreciation through
investment in equity securities of Eligible Companies. For
purposes of the Fund's investment objective and investment
policies, "equity securities" are common stocks (but not
preferred stocks), rights or warrants to subscribe for or
purchase common stocks, and preferred stocks or debt securities
that are convertible into common stocks without the payment of
any further consideration.

The Fund invests in two categories of Eligible Companies --
Environmental Companies and Beneficiary Companies. The Fund may

<PAGE>

invest in a company with a broadly diversified business only a
part of which provides such products, processes, or services,
when Alliance believes that these products, processes or services
will yield a competitive advantage that significantly enhances
the issuer's growth prospects. As a matter of fundamental
policy, the Fund will, under normal circumstances, invest
substantially all of its total assets in equity securities of
Eligible Companies.

A major premise of the Fund's investment approach is that
environmental concerns will be a significant source of future
growth opportunities, and that Environmental Companies will see
an increased demand for their systems and services.
Environmental Companies operate in the areas of pollution
control, clean energy, solid waste management, hazardous waste
treatment and disposal, pulp and paper recycling, waste-to-energy
alternatives, biodegradable cartons, packages, plastics and other
products, remedial projects and emergency cleanup efforts,
manufacture of environmental supplies and equipment, the
achievement of purer air, groundwater, and foods, and the
detection, evaluation and treatment of both existing and
potential environmental problems including, among others, air
pollution and acid rain.

The environmental services industry generally is positively
affected by increasing governmental action intended to foster
environmental protection. As environmental regulations are
developed and enforced, Environmental Companies providing the
means of compliance with such regulations are afforded
substantial opportunities for growth. Beneficiary Companies may
also derive an advantage to the extent that they have anticipated
environmental regulation and are therefore at a competitive
advantage.

In the view of Alliance, increasing public and political
awareness of environmental concerns and resultant environmental
regulations are long-term phenomena that are driven by an
emerging global consensus that environmental protection is a
vital and increasingly immediate priority. Alliance believes
that Eligible Companies based in the United States and other
economically developed countries will have increasing
opportunities for earnings growth resulting not only from an
increased demand for their existing products or services but also
from innovative responses to changing regulations and priorities
and enforcement policies. Such opportunities will arise, in the
opinion of Alliance, not only within developed countries but also
within many economically developing countries, such as those of
Eastern Europe and the Pacific Rim. These countries lag well
behind developed countries in the conservation and efficient use
of natural resources and in their implementation of policies that
protect the environment.

<PAGE>

Alliance believes that global investing offers opportunities for
superior investment returns. The Fund spreads investment risk
among the capital markets of a number of countries and invests in
equity securities of companies based in at least three, and
normally considerably more, such countries. The percentage of
the Fund's assets invested in securities of companies in a
particular country or denominated in a particular currency will
vary in accordance with Alliance's assessment of the appreciation
potential of such securities and the strength of that currency.

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- enter into forward foreign currency transactions for hedging
purposes;

- -- invest in currency futures and options on such futures for
hedging purposes; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in non-U.S. companies and in specific
types of companies that provide environmental services will be
more volatile and may differ substantially from the overall
market. The Fund's investments also have the risk that
government regulations or other action could negatively affect
the business of environmental companies.

DESCRIPTION OF INVESTMENT PRACTICES

This section describes the investment practices of the Funds and
risks associated with these practices. Unless otherwise noted, a
Fund's use of any of these practices was specified in the
previous section.

ASSET-BACKED SECURITIES. Asset-backed securities (unrelated to
first mortgage loans) represent fractional interests in pools of
leases, retail installment loans, revolving credit receivables,
and other payment obligations, both secured and unsecured. These
assets are generally held by a trust and payments of principal
and interest or interest only are passed through monthly or
quarterly to certificate holders and may be guaranteed up to
certain amounts by letters of credit issued by a financial

<PAGE>

institution affiliated or unaffiliated with the trustee or
originator of the trust.

Like mortgages underlying mortgage-backed securities, underlying
automobile sales contracts or credit card receivables are subject
to prepayment, which may reduce the overall return to certificate
holders. Certificate holders may also experience delays in
payment on the certificates if the full amounts due on underlying
sales contracts or receivables are not realized by the trust
because of unanticipated legal or administrative costs of
enforcing the contracts or because of depreciation or damage to
the collateral (usually automobiles) securing certain contracts,
or other factors.

CONVERTIBLE SECURITIES. Prior to conversion, convertible
securities have the same general characteristics as non-
convertible debt securities, which generally provide a stable
stream of income with yields that are generally higher 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 equity security, although the higher
yield tends to make the convertible security less volatile than
the underlying equity security. As with debt securities, the
market value of convertible securities tends to decrease as
interest rates rise 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 offer investors the potential 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 as determined by Alliance may share
some or all of the risks of non-convertible debt securities with
those ratings.

CURRENCY SWAPS. Currency swaps involve the individually
negotiated exchange by a Fund with another party of a series of
payments in specified currencies. A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency. Therefore, the entire principal value of a
currency swap is subject to the risk that the other party to the
swap will default on its contractual delivery obligations. A
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the counterparty is rated in the highest rating category of at
least one nationally recognized rating organization at the time
of entering into the transaction. If there is a default by the
counterparty to the transaction, the Fund will have contractual
remedies under the transaction agreements.

<PAGE>

DEPOSITARY RECEIPTS AND SECURITIES OF SUPRANATIONAL ENTITIES.
Depositary receipts may not necessarily be denominated in the
same currency as the underlying securities into which they may be
converted. In addition, the issuers of the stock of unsponsored
depositary receipts are not obligated to disclose material
information in the United States and, therefore, there may not be
a correlation between such information and the market value of
the depositary receipts. ADRs are depositary receipts typically
issued by an U.S. bank or trust company that evidence ownership
of underlying securities issued by a foreign corporation. GDRs
and other types of depositary receipts are typically issued by
foreign banks or trust companies and evidence ownership of
underlying securities issued by either a foreign or an U.S.
company. Generally, depositary receipts in registered form are
designed for use in the U.S. securities markets, and depositary
receipts in bearer form are designed for use in foreign
securities markets. For purposes of determining the country of
issuance, investments in depositary receipts of either type are
deemed to be investments in the underlying securities except with
respect to GROWTH FUND, where investments in ADRs are deemed to
be investments in securities issued by U.S. issuers and those in
GDRs and other types of depositary receipts are deemed to be
investments in the underlying securities.

A supranational entity is an entity designated or supported by
the national government of one or more countries to promote
economic reconstruction or development. Examples of
supranational entities include, among others, the World Bank
(International Bank for Reconstruction and Development) and the
European Investment Bank. A European Currency Unit is a basket
of specified amounts of the currencies of the member states of
the European Economic Community. "Semi-governmental securities"
are securities issued by entities owned by either a national,
state or equivalent government or are obligations of one of such
government jurisdictions that are not backed by its full faith
and credit and general taxing powers.

EQUITY-LINKED DEBT SECURITIES. Equity-linked debt securities are
securities on which the issuer is obligated to pay interest
and/or principal that is linked to the to the performance of a
specified index of equity securities. The interest or principal
payments may be significantly greater or less than payment
obligations for other types of debt securities. Adverse changes
in equity securities indices and other adverse changes in the
securities markets may reduce payments made under, and/or the
principal of, equity-linked debt securities held by a Fund. As
with any debt securities, the values of equity-linked debt
securities will generally vary inversely with changes in interest
rates. A Fund's ability to dispose of equity-linked debt
securities will depend on the availability of liquid markets for

<PAGE>

such securities. Investment in equity-linked debt securities may
be considered to be speculative.

FORWARD COMMITMENTS. Forward commitments for the purchase or
sale of securities may include 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 (i.e., a "when, as and if issued" trade).

When forward commitment transactions are negotiated, the price is
fixed at the time the commitment is made, but delivery and
payment for the securities take place at a later date. Normally,
the settlement date occurs within two months after the
transaction, but a Fund may negotiate settlements beyond two
months. Securities purchased or sold under a forward commitment
are subject to market fluctuations and no interest or dividends
accrue to the purchaser prior to the settlement date.

The use of forward commitments enables 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 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 forward commitment basis to
obtain the benefit of currently higher cash yields. However, if
Alliance were to forecast incorrectly the direction of interest
rate movements, a Fund might be required to complete such when-
issued or forward transactions at prices inferior to the then
current market values. When-issued securities and forward
commitments may be sold prior to the settlement date, but a Fund
enters into when-issued and forward commitments only with the
intention of actually receiving securities or delivering them, as
the case may be. If a Fund 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. Any significant
commitment of Fund assets to the purchase of securities on a
"when, as and if issued" basis may increase the volatility of the
Fund's net asset value. No forward commitments will be made by
INTERNATIONAL PREMIER GROWTH FUND, WORLDWIDE PRIVATIZATION FUND,
NEW EUROPE FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97
FUND, UTILITY INCOME FUND, or REAL ESTATE INVESTMENT FUND if, as
a result, the Fund's aggregate commitments under the transactions
would be more than 30% of the Fund's total assets. In the event
the other party to a forward commitment transaction were to
default, a Fund might lose the opportunity to invest money at
favorable rates or to dispose of securities at favorable prices.

<PAGE>

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A Fund purchases or
sells forward foreign currency exchange contracts to minimize the
risk to it from adverse changes in the relationship between the
U.S. dollar and other currencies. A forward contract is an
obligation to purchase or sell a specific currency for an agreed
price at a future date, and is individually negotiated and
privately traded.

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"). A Fund will
not engage in transaction hedges with respect to the currency of
a particular country to an extent greater than the aggregate
amount of the Fund's transactions in that currency. When a Fund
believes that a foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a 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"). A Fund will not position hedge with respect to a
particular currency to an extent greater than the aggregate
market value (at the time of making such sale) of the securities
held in its portfolio denominated or quoted in that currency.
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").
Unanticipated changes in currency prices may result in poorer
overall performance for the Fund than if it had not entered into
such forward contracts.

Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value
of the hedged currency should rise. Moreover, it may not be
possible for a Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to
sell the currency at a price above the devaluation level it
anticipates. INTERNATIONAL FUND, NEW EUROPE FUND and GLOBAL
SMALL CAP FUND will not enter into a forward contract with a term
of more than one year or if, as a result, more than 50% of its
total assets would be committed to such contracts. INTERNATIONAL
FUND, NEW EUROPE FUND and GLOBAL SMALL CAP FUND investments in

<PAGE>

forward contracts will be limited to hedging involving either
specific transactions or portfolio positions. GROWTH FUND also
may also purchase and sell foreign currency on a spot basis.

ILLIQUID SECURITIES. None of the Funds will invest more than 15%
of its net assets in illiquid securities and some may invest less
than 15%. THE ALLIANCE FUND and the GROWTH FUND may invest up to
5% of their total assets in illiquid securities. The TECHNOLOGY
FUND, the QUASAR FUND, the NEW EUROPE FUND, and the GLOBAL SMALL
CAP FUND may invest up to 10% of their total 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 individually negotiated currency swaps and any
assets used to cover currency swaps and most privately negotiated
investments in state enterprises that have not yet conducted an
initial equity offering, (ii) over-the-counter options and assets
used to cover over-the-counter options, and (iii) repurchase
agreements not terminable within seven days.

Because of the absence of a trading market for illiquid
securities, a Fund may not be able to realize their full value
upon sale. Alliance will monitor each Fund's investments in
illiquid securities under the supervision of the Directors of the
Fund. To the extent permitted by applicable law, Rule 144A
securities will not be treated as "illiquid" for purposes of the
limit on investments so long as the securities meet liquidity
guidelines established by a Fund's Directors.

A Fund that invests in securities for which there is no ready
market may not be able to readily sell such securities. Such
securities are unlike securities that are traded in the open
market and can be expected to be sold immediately if the market
is adequate. The sale price of illiquid securities may be lower
or higher than Alliance's most recent estimate of their fair
value. Generally, less public information is available about the
issuers of such securities than about companies whose securities
are traded on an exchange. To the extent that these securities
are foreign securities, there is no law in many of the countries
in which a Fund may invest similar to the Securities Act
requiring an issuer to register the sale of securities with a
governmental agency or imposing legal restrictions on resales of
securities, either as to length of time the securities may be
held or manner of resale. However, there may be contractual
restrictions on resales of non-publicly traded foreign
securities.

<PAGE>

INTEREST RATE TRANSACTIONS. Each Fund that may enter into
interest rate transactions expects to do so primarily to preserve
a return or spread on a particular investment or portion of its
portfolio or to protect against any 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). Interest rate swaps are entered 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). With respect TO ALL-ASIA INVESTMENT FUND, GREATER
CHINA '97 FUND and UTILITY INCOME FUND, the exchange commitments
can involve payments in the same currency or in different
currencies. The purchase of an interest rate cap entitles the
purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payments of interest on a
contractually-based principal amount from the party selling such
interest rate cap. The purchase of an interest rate floor
entitles the purchaser, to the extent that a specified index
falls below a predetermined interest rate, to receive payments of
interest on an agreed principal amount from the party selling the
interest rate 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. A Fund 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 is rated in the highest rating category of at least
one nationally recognized rating organization. Alliance will
monitor the creditworthiness of counterparties on an ongoing
basis. 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
relatively liquid. Caps and floors are more recent innovations
for which standardized documentation has not yet been developed
and, accordingly, they are less liquid than swaps.

The use of interest rate transactions is a highly specialized
activity that involves investment techniques and risks different
from those associated with ordinary portfolio securities
transactions. If Alliance were to incorrectly forecast market
values, interest rates and other applicable factors, the
investment performance of a Fund would be adversely affected by
the use of these investment techniques. Moreover, even if
Alliance is correct in its forecasts, there is a risk that the

<PAGE>

transaction position may correlate imperfectly with the price of
the asset or liability being hedged. 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. These
transactions do not involve the delivery of securities or other
underlying assets or principal. Accordingly, the risk of loss
with respect to interest rate transactions is limited to the net
amount of interest payments that a Fund is contractually
obligated to make. If the counterparty to an interest rate
transaction defaults, a Fund's risk of loss consists of the net
amount of interest payments that the Fund contractually is
entitled to receive.

LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Loans and other direct
debt instruments are interests in amounts owed by a corporate,
governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans
and loan participations), to suppliers of goods or services
(trade claims or other receivables), or to other creditors.
Direct debt instruments involve the risk of loss in case of
default or insolvency of the borrower and may offer less legal
protection to a Fund in the event of fraud or misrepresentation
than debt securities. In addition, loan participations involve a
risk of insolvency of the lending bank or other financial
intermediary. Direct debt instruments may also include standby
financing commitments that obligate a Fund to supply additional
cash to the borrower on demand. Loans and other direct debt
instruments are generally illiquid and may be transferred only
through individually negotiated private transactions.

Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment
of principal and interest. Direct debt instruments may not be
rated by any nationally recognized rating service. Failure to
receive scheduled interest or principal payments on these types
of investments could adversely affect a Fund's net asset value
and yield. Loans that are fully secured offer a Fund more
protection than unsecured loans in the event of non-payment of
scheduled interest or principal. However, there is no assurance
that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral can be
liquidated. Making loans to borrowers whose creditworthiness is
poor may involve substantial risks and may be highly speculative.

Borrowers that are in bankruptcy or restructuring may never pay
off their indebtedness, or may pay only a small fraction of the
amount owed. Direct indebtedness of government issuers will also
involve a risk that the governmental entities responsible for the
repayment of the debt may be unable, or unwilling, to pay
interest and repay principal when due.

<PAGE>

Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve
additional risks to a Fund. For example, if a loan is
foreclosed, a Fund could become part owner of any collateral and
would bear the costs and liabilities associated with owning and
disposing of the collateral. Direct debt instruments may also
involve a risk of insolvency of the lending bank or other
intermediary.

A loan is often administered by a bank or other financial
institution that acts as agent for all holders. The agent
administers the terms of the loan, as specified on the loan
agreement. Unless, under the terms of the loan or other
indebtedness, a Fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit
remedies against a borrower. If assets held by the agent for the
benefit of a Fund were determined to be subject to the claims of
the agent's general creditors, the Fund might incur certain costs
and delays in realizing payment on the loan or loan participation
and could suffer a loss of principal or interest.

Direct indebtedness purchased by a Fund may include letters of
credit, revolving credit facilities, or other standby financing
commitments obligating a Fund to pay additional cash on demand.
These commitments may have the effect of requiring a Fund to
increase its investment in a borrower at a time when it would not
otherwise have done so, even if the borrower's condition makes it
unlikely that the amount will ever be repaid.

LOANS OF PORTFOLIO SECURITIES. The risk in lending portfolio
securities, as with other extensions of credit, consists of the
possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, 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 from the securities. The Fund may invest any
cash collateral in portfolio securities and earn 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.

MORTGAGE-BACKED SECURITIES AND ASSOCIATED RISKS. Interest and
principal payments (including prepayments) on the mortgages
underlying mortgage-backed securities are passed through to the
holders of the securities. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-

<PAGE>

backed securities are often subject to more rapid prepayment of
principal than their stated maturity would indicate. Prepayments
occur when the mortgagor on a mortgage prepays the remaining
principal before the mortgage's scheduled maturity date. Because
the prepayment characteristics of the underlying mortgages vary,
it is impossible to predict accurately the realized yield or
average life of a particular issue of pass-through certificates.
Prepayments are important because of their effect on the yield
and price of the mortgage-backed securities. During periods of
declining interest rates, prepayments can be expected to
accelerate and a Fund that invests in these securities would be
required to reinvest the proceeds at the lower interest rates
then available. Conversely, during periods of rising interest
rates, a reduction in prepayments may increase the effective
maturity of the securities, subjecting them to a greater risk of
decline in market value in response to rising interest rates. In
addition, prepayments of mortgages underlying securities
purchased at a premium could result in capital losses.

Mortgage-Backed Securities include mortgage pass-through
certificates and multiple-class pass-through securities, such as
REMIC pass-through certificates, CMOs and stripped mortgage-
backed securities ("SMBS"), and other types of Mortgage-Backed
Securities that may be available in the future.

Guaranteed Mortgage Pass-Through Securities. REAL ESTATE
INVESTMENT FUND may invest in guaranteed mortgage pass-through
securities which represent participation interests in pools of
residential mortgage loans and are issued by U.S. governmental or
private lenders and guaranteed by the U.S. Government or one of
its agencies or instrumentalities, including but not limited to
the Government National Mortgage Association ("Ginnie Mae"), the
Federal National Mortgage Association ("Fannie Mae") and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"). Ginnie
Mae certificates are guaranteed by the full faith and credit of
the United States Government for timely payment of principal and
interest on the certificates. Fannie Mae certificates are
guaranteed by Fannie Mae, a federally chartered and privately-
owned corporation, for full and timely payment of principal and
interest on the certificates. Freddie Mac certificates are
guaranteed by Freddie Mac, a corporate instrumentality of the
United States Government, for timely payment of interest and the
ultimate collection of all principal of the related mortgage
loans.

Multiple-Class Pass-Through Securities and Collateralized
Mortgage Obligations. Mortgage-Backed Securities also include
CMOs and REMIC pass-through or participation certificates that
may be issued by, among others, U.S. Government agencies and
instrumentalities as well as private lenders. CMOs and REMIC
certificates are issued in multiple classes and the principal of

<PAGE>

and interest on the mortgage assets may be allocated among the
several classes of CMOs or REMIC certificates in various ways.
Each class of CMOs or REMIC certificates, often referred to as a
"tranche," is issued at a specific adjustable or fixed interest
rate and must be fully retired no later than its final
distribution date. Generally, interest is paid or accrues on all
classes of CMOs or REMIC certificates on a monthly basis. REAL
ESTATE INVESTMENT FUND will not invest in the lowest tranche of
CMOs and REMIC certificates.

Typically, CMOs are collateralized by Ginnie Mae or Freddie Mac
certificates but also may be collateralized by other mortgage
assets such as whole loans or private mortgage pass-through
securities. Debt service on CMOs is provided from payments of
principal and interest on collateral of mortgaged assets and any
reinvestment income thereon.

A REMIC is a CMO that qualifies for special tax treatment under
the Code and invests in certain mortgages primarily secured by
interests in real property and other permitted investments.
Investors may purchase "regular" and "residual" interest shares
of beneficial interest in REMIC trusts, although REAL ESTATE
INVESTMENT FUND does not intend to invest in residual interests.

OPTIONS ON SECURITIES. An option gives the purchaser of the
option, upon payment of a premium, the right to deliver to (in
the case of a put) or receive from (in the case of a call) the
writer a specified amount of a security on or before a fixed date
at a predetermined price. A call option written by a Fund is
"covered" if the Fund owns the underlying 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.

A call option is for cross-hedging purposes if a Fund does not
own the underlying security, and is designed to provide a hedge
against a decline in value in another security which the Fund
owns or has the right to acquire. 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 would exceed that which would be received from
writing a covered call option, while at the same time achieving
the desired hedge.

In purchasing an option, a Fund would be in a position to realize
a gain if, during the option period, the price of the underlying
security increased (in the case of a call) or decreased (in the

<PAGE>

case of a put) by an amount in excess of the premium paid;
otherwise the Fund would experience a loss equal to the premium
paid for the option.

If an option written by a Fund were exercised, the Fund would be
obligated to purchase (in the case of a put) or sell (in the case
of a call) the underlying security at the exercise price. The
risk involved in writing an option is that, if the option were
exercised, the underlying security would then be purchased or
sold by the Fund at a disadvantageous price. Entering into a
closing transaction (i.e., by disposing of the option prior to
its exercise) could reduce these risks. A Fund retains the
premium received from writing a put or call option whether or not
the option is exercised. The writing of covered call options
could result in increases in a Fund's portfolio turnover rate,
especially during periods when market prices of the underlying
securities appreciate.

TECHNOLOGY FUND and GLOBAL SMALL CAP FUND will not write a call
option if the premium to be received by the Fund would not
produce an annualized return of at least 15% of the then current
market value of the securities subject to the option (without
giving effect to commissions, stock transfer taxes and other
expenses that are deducted from premium receipts.

Options purchased or written by a Fund in negotiated transactions
are illiquid and it may not be possible for the Fund to effect a
closing transaction at an advantageous time.

Options on Securities Indices. An option on a securities index
is similar to an option on a security except that, rather than
the right to take or make delivery of a 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.

Futures Contracts and Options on Futures Contracts. A "sale" of
a futures contract means the acquisition of a contractual
obligation to deliver the securities or foreign currencies or
other commodity called for by the contract at a specified price
on a specified date. A "purchase" of a futures contract means
the incurring of an obligation to acquire the securities, foreign
currencies or other commodity called for by the contract at a
specified price on a specified date. The purchaser of a futures
contract on an index agrees to take or make delivery of an amount
of cash equal to the difference between a specified dollar
multiple of the value of the index on the expiration date of the
contract ("current contract value") and the price at which the

<PAGE>

contract was originally struck. No physical delivery of the
securities underlying the index is made.

Options on futures contracts written or purchased by a Fund will
be traded on U.S. or foreign exchanges or over-the-counter.
These investment techniques will be used only to hedge against
anticipated future changes in market conditions and interest or
exchange rates which otherwise might either adversely affect the
value of the Fund's portfolio securities or adversely affect the
prices of securities which the Fund intends to purchase at a
later date.

No Fund will enter into any futures contracts or options on
futures contracts 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, or in the case of
INTERNATIONAL PREMIER GROWTH FUND 100% of its total assets.
PREMIER GROWTH FUND AND GROWTH AND INCOME FUND may not purchase
or sell a stock index future if immediately thereafter more than
30% of its total assets would be hedged by stock index futures.
PREMIER GROWTH FUND and GROWTH AND INCOME FUND may not purchase
or sell a stock index future if, immediately thereafter, the sum
of the amount of margin deposits on the Fund's existing futures
positions would exceed 5% of the market value of the Fund's total
assets.

Options on Foreign Currencies. As in the case of other kinds of
options, the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and a Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates and incur
losses. The purchase of an option on a foreign currency may
constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to a
Fund's position, it may forfeit the entire amount of the premium
plus related transaction costs. See the Statement of Additional
Information of each Fund that may invest in options on foreign
currencies for further discussion of the use, risks and costs of
options on foreign currencies.

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. If a vendor defaults on its repurchase obligation,
a Fund would suffer a loss to the extent that the proceeds from

<PAGE>

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. Alliance
monitors the creditworthiness of the vendors with which the Fund
enters into repurchase agreements.

RIGHTS AND WARRANTS. A Fund will invest in rights or warrants
only if Alliance deems the underlying equity securities
themselves appropriate for inclusion in the Fund's portfolio.
Rights and warrants entitle the holder to buy equity securities
at a specific price for a specific period of time. Rights are
similar to warrants except that they have a substantially shorter
duration. Rights and warrants may be considered more speculative
than certain other types of investments in that they do not
entitle a holder to dividends or voting rights with respect to
the underlying securities nor do they represent any rights in the
assets of the issuing company. The value of a right or warrant
does not necessarily change with the value of the underlying
security, although the value of a right or warrant may decline
because of a decrease in the value of the underlying security,
the passage of time or a change in perception as to the potential
of the underlying security, or any combination of these factors.
If the market price of the underlying security is below the
exercise price set forth in the warrant on the expiration date,
the warrant will expire worthless. Moreover, a right or warrant
ceases to have value if it is not exercised prior to the
expiration date.

SHORT SALES. A short sale is effected by selling a security that
a Fund does not own, or, if the Fund does own such security, it
is not to be delivered upon consummation of the sale. A short
sale is "against the box" to the extent that a Fund
contemporaneously owns or has the right to obtain securities
identical to those sold short without payment. WORLDWIDE
PRIVATIZATION FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97
Fund and UTILITY INCOME FUND EACH may make short sales of
securities or maintain short positions only for the purpose of
deferring realization of gain or loss for U.S. federal income tax
purposes, provided that at all times when a short position is
open the Fund owns an equal amount of securities of the same
issue as, and equal in amount to, the securities sold short. In
addition, each of those Funds may not make a short sale if as a
result more than 10% of the Fund's net assets would be held as
collateral for short sales, except that ALL-ASIA INVESTMENT FUND,
GREATER CHINA '97 FUND and REAL ESTATE INVESTMENT FUND may not
make a short sale if as a result more than 25% of the Fund's net
assets 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.

<PAGE>

STANDBY COMMITMENT AGREEMENTS. Standby commitment agreements
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, typically equal to
approximately 0.5% of the aggregate purchase price of the
security the Fund has committed to purchase. A Fund will enter
into such agreements only for the purpose of investing in the
security underlying the commitment at a yield and price
considered advantageous to the Fund and unavailable on a firm
commitment basis. Investments in standby commitments will be
limited so that the aggregate purchase price of the securities
subject to the commitments will not exceed 25% with respect to
NEW EUROPE FUND AND REAL ESTATE INVESTMENT FUND, 50% with respect
to INTERNATIONAL PREMIER GROWTH FUND, WORLDWIDE PRIVATIZATION
FUND, ALL-ASIA INVESTMENT FUND and GREATER CHINA '97 FUND and 20%
with respect to UTILITY INCOME FUND, of the Fund's assets at the
time of making the commitment.

There is no guarantee that a security subject to a standby
commitment will be issued and 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 underlying
the commitment is at 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.

ZERO-COUPON AND PAYMENT-IN-KIND BONDS. Zero-coupon bonds are
issued at a significant discount from their principal amount in
lieu of paying interest periodically. Payment-in-kind bonds
allow the issuer to make current interest payments on the bonds
in additional bonds. Because zero-coupon bonds and payment-in-
kind bonds do not pay current interest in cash, their value is
generally subject to greater fluctuation in response to changes
in market interest rates than bonds that pay interest in cash
currently. Both zero-coupon and payment-in-kind bonds allow an
issuer to avoid the need to generate cash to meet current
interest payments. These bonds may involve greater credit risks
than bonds paying interest currently. Although these bonds do
not pay current interest in cash, a Fund is nonetheless required
to accrue interest income on such investments and to distribute
such amounts at least annually to shareholders. Thus, a Fund
could be required at times to liquidate other investments in
order to satisfy its dividend requirements.

FUTURE DEVELOPMENTS. A Fund may, following written notice to its
shareholders, take advantage of other investment practices that

<PAGE>

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
activities described above.

GENERAL. The successful use of the investment practices
described above draws upon Alliance's special skills and
experience and usually depends on Alliance's ability to forecast
price movements, interest rates, or currency exchange rate
movements correctly. Should interest rates, prices or exchange
rates move unexpectedly, a Fund may not achieve the anticipated
benefits of the transactions or may realize losses and thus be in
a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on
futures contracts, there are no daily price fluctuation limits
with respect to certain options and forward contracts, and
adverse market movements could therefore continue to an unlimited
extent over a period of time. In addition, the correlation
between movements in the prices of futures contracts, options and
forward contracts and movements in the prices of the securities
and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses.

A Fund's ability to dispose of its position in futures contracts,
options, and forward contracts depends on the availability of
liquid markets in such instruments. Markets in options and
futures with respect to a number of types of securities and
currencies are relatively new and still developing, and there is
no public market for forward contracts. It is impossible to
predict the amount of trading interest that may exist in various
types of futures contracts, options and forward contracts. If a
secondary market does not exist with respect to an option
purchased or written by a Fund, it might not be possible to
effect a closing transaction in the option (i.e., dispose of the
option), with the result that (i) an option purchased by the Fund
would have to be exercised in order for the Fund to realize any
profit and (ii) the Fund may not be able to sell currencies or
portfolio securities covering an option written by the Fund until
the option expires or it delivers the underlying security,
futures contract or currency upon exercise. Therefore, no
assurance can be given that the Funds will be able to utilize
these instruments effectively for the purposes set forth above.
In addition, a Fund's ability to engage in options and futures
transactions may be limited by tax considerations and the use of
certain hedging techniques may adversely impact the
characterization of income to a Fund for U.S. federal income tax
purposes.

<PAGE>

PORTFOLIO TURNOVER. The portfolio turnover rate for each Fund is
included in the FINANCIAL HIGHLIGHTS section. The Funds are
actively managed and, in some cases in response market
conditions, a Fund's portfolio turnover may exceed 100%. A
higher rate of portfolio turnover increases brokerage and other
expenses, 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, which, when
distributed, are taxable to shareholders.

TEMPORARY DEFENSIVE POSITION. For temporary defensive purposes,
each Fund may reduce its position in equity securities and invest
in, without limit, 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.

ADDITIONAL RISK CONSIDERATIONS

Investment in certain of the Funds involves the special
risk considerations described below. These risks may be
heightened when investing in emerging markets.

CURRENCY CONSIDERATIONS. Substantially all of the assets of
INTERNATIONAL FUND, INTERNATIONAL PREMIER GROWTH FUND, NEW EUROPE
FUND, ALL-ASIA INVESTMENT FUND, GREATER CHINA '97 FUND and
WORLDWIDE PRIVATIZATION FUND and a substantial portion of the
assets of GLOBAL SMALL CAP FUND and GLOBAL ENVIRONMENT FUND are
invested in securities denominated in foreign currencies. The
Funds receive a corresponding portion of their revenues in
foreign currencies. Therefore, the dollar equivalent of their
net assets, distributions, and income will be adversely affected
by reductions in the value of certain foreign currencies relative
to the U.S. dollar. If the value of the foreign currencies in
which a Fund receives its income falls relative to the U.S.
dollar between receipt of the income and the making of Fund
distributions, the Fund may be required to liquidate securities
in order to make distributions if it has insufficient cash in
U.S. dollars to meet 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

<PAGE>

expenses in the currency at the time they were incurred. In
light of these risks, a Fund may engage in currency hedging
transactions, as described above, which involve certain special
risks.

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
equity 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. These problems are
particularly severe in India, where settlement is through
physical delivery, and, where, currently, a severe shortage of
vault capacity exists among custodial banks, although efforts are
being undertaken to alleviate the shortage. Certain foreign
countries require governmental approval prior to investments by
foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a
specific class of securities which may have less advantageous
terms (including price) than securities of the company available
for purchase by nationals. These restrictions or controls may at
times limit or preclude investment in certain securities and may
increase the costs and expenses of a Fund. In addition, the
repatriation of investment income, capital, or the proceeds of
sales of securities from certain countries is controlled under
regulations, including in some cases the need for certain advance
government notification or authority. If a deterioration occurs
in a country's balance of payments, the country could impose
temporary restrictions on foreign capital remittances.

A Fund could also 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, 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 United States.

<PAGE>

INTERNATIONAL FUND, ALL-ASIA INVESTMENT FUND and GREATER CHINA
'97 FUND may invest substantial amounts of their assets in United
Kingdom issuers, Japanese issuers, and Greater China issuers,
respectively. Please refer to Appendix A for a discussion of
risks associated with investments in these countries.

INVESTMENT IN PRIVATIZED ENTERPRISES BY WORLDWIDE PRIVATIZATION
FUND. In certain jurisdictions, the ability of foreign entities,
such as the Fund, to participate in privatizations may be limited
by local law, or the price or terms on which the Fund may be able
to participate may be less advantageous than for local investors.
Moreover, there can be no assurance that governments that have
embarked on privatization programs will continue to divest their
ownership of state enterprises, that proposed privatizations will
be successful or that governments will not re-nationalize
enterprises that have been privatized. Furthermore, in the case
of certain of the enterprises in which the Fund may invest, large
blocks of the stock of those enterprises may be held by a small
group of stockholders, even after the initial equity offerings by
those enterprises. The sale of some portion or all of those
blocks could have an adverse effect on the price of the stock of
any such enterprise.

<PAGE>

Most state enterprises or former state enterprises go through an
internal reorganization of management prior to conducting an
initial equity offering in an attempt to better enable these
enterprises to compete in the private sector. However, certain
reorganizations could result in a management team that does not
function as well as the enterprise's prior management and may
have a negative effect on such enterprise. After making an
initial equity offering, enterprises that may have enjoyed
preferential treatment from the respective state or government
that owned or controlled them may no longer receive such
preferential treatment and may become subject to market
competition from which they were previously protected. Some of
these enterprises may not be able to effectively operate in a
competitive market and may suffer losses or experience bankruptcy
due to such competition. In addition, the privatization of an
enterprise by its government may occur over a number of years,
with the government continuing to hold a controlling position in
the enterprise even after the initial equity offering for the
enterprise.

INVESTMENT IN SMALLER, EMERGING COMPANIES. The Funds may invest
in smaller, emerging companies. GLOBAL SMALL CAP FUND and NEW
EUROPE FUND will emphasize investment in, and ALL-ASIA INVESTMENT
FUND, GREATER CHINA '97 FUND and GLOBAL ENVIRONMENT FUND may
emphasize investment in, smaller, emerging companies. Investment
in such companies involves greater risks than is customarily
associated with securities of more established companies.
Companies in the earlier stages of their development often have
products and management personnel which have not been thoroughly
tested by time or the marketplace; their financial resources may
not be as substantial as those of more established companies.
The securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market
movements than securities of larger companies or broad market
indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also
contribute to stock price volatility.

Extreme Governmental Action; Less Protective Laws. In contrast
with investing in the United States, foreign investment may
involve in certain situations greater risk of nationalization,
expropriation, confiscatory taxation, currency blockage or other
extreme governmental action which could adversely impact a Fund's
investments. In the event of certain such actions, a Fund could
lose its entire investment in the country involved. In addition,
laws in various foreign countries, including in certain respects
each of the Greater China countries, governing, among other
subjects, business organization and practices, securities and
securities trading, bankruptcy and insolvency may provide less
protection to investors such as the Fund than provided under
United States laws.

<PAGE>

INVESTMENTS IN ENVIRONMENTAL COMPANIES BY GLOBAL ENVIRONMENT
FUND. Governmental regulations or other action can inhibit an
Environmental Company's performance, and it may take years to
translate environmental legislation into sales and profits.
Environmental Companies generally face competition in fields
often characterized by relatively short product cycles and
competitive pricing policies. Losses may result from large
product development or expansion costs, unprotected marketing or
distribution systems, erratic revenue flows and low profit
margins. Additional risks that Environmental Companies may face
include difficulty in financing the high cost of technological
development, uncertainties due to changing governmental
regulation or rapid technological advances, potential liabilities
associated with hazardous components and operations, and
difficulty in finding experienced employees.

THE REAL ESTATE INDUSTRY. Although REAL ESTATE INVESTMENT FUND
does not invest directly in real estate, it invests primarily in
Real Estate Equity Securities and has a policy of concentration
of its investments in the real estate industry. Therefore, an
investment in the Fund is subject to certain risks associated
with the direct ownership of real estate and with the real estate
industry in general. These risks include, among others: possible
declines in the value of real estate; risks related to general
and local economic conditions; possible lack of availability of
mortgage funds; overbuilding; extended vacancies of properties;
increases in competition, property taxes and operating expenses;
changes in zoning laws; costs resulting from the clean-up of, and
liability to third parties for damages resulting from,
environmental problems; casualty or condemnation losses;
uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in
interest rates. To the extent that assets underlying the Fund's
investments are concentrated geographically, by property type or
in certain other respects, the Fund may be subject to certain of
the foregoing risks to a greater extent.

In addition, if REAL ESTATE INVESTMENT FUND receives rental
income or income from the disposition of real property acquired
as a result of a default on securities the Fund owns, the receipt
of such income may adversely affect the Fund's ability to retain
its tax status as a regulated investment company. Investments by
the Fund in securities of companies providing mortgage servicing
will be subject to the risks associated with refinancings and
their impact on servicing rights.

REITS. Investing in REITs involves certain unique risks in
addition to those risks associated with investing in the real
estate industry in general. Equity REITs may be affected by
changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any

<PAGE>

credit extended. REITs are dependent upon management skills, are
not diversified, are subject to heavy cash flow dependency,
default by borrowers and self-liquidation. REITs are also
subject to the possibilities of failing to qualify for tax-free
pass-through of income under the Code and failing to maintain
their exemptions from registration under the 1940 Act.

REITs (especially mortgage REITs) also are subject to interest
rate risks. When interest rates decline, the value of a REIT's
investment in fixed rate obligations can be expected to rise.
Conversely, when interest rates rise, the value of a REIT's
investment in fixed rate obligations can be expected to decline.
In contrast, as interest rates on adjustable rate mortgage loans
are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in
market interest rates, causing the value of such investments to
fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Investing in REITs involves risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a
limited volume and may be subject to more abrupt or erratic price
movements than larger company securities. Historically, small
capitalization stocks, such as REITs, have been more volatile in
price than the larger capitalization stocks included in the S&P
500.

MORTGAGE-BACKED SECURITIES. Investing in Mortgage-Backed
Securities involves certain unique risks in addition to those
risks associated with investment in the real estate industry in
general. These risks include the failure of a counterparty to
meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. When interest
rates decline, the value of an investment in fixed rate
obligations can be expected to rise. Conversely, when interest
rates rise, the value of an investment in fixed rate obligations
can be expected to decline. In contrast, as interest rates on
adjustable rate mortgage loans are reset periodically, yields on
investments in such loans will gradually align themselves to
reflect changes in market interest rates, causing the value of
such investments to fluctuate less dramatically in response to
interest rate fluctuations than would investments in fixed rate
obligations.

Further, the yield characteristics of Mortgage-Backed Securities,
such as those in which REAL ESTATE INVESTMENT FUND may invest,
differ from those of traditional fixed-income securities. The
major differences typically include more frequent interest and
principal payments (usually monthly), the adjustability of
interest rates, and the possibility that prepayments of principal

<PAGE>

may be made substantially earlier than their final distribution
dates.

Prepayment rates are influenced by changes in current interest
rates and a variety of economic, geographic, social and other
factors, and cannot be predicted with certainty. Both adjustable
rate mortgage loans and fixed rate mortgage loans may be subject
to a greater rate of principal prepayments in a declining
interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Early
payment associated with Mortgage-Backed Securities causes these
securities to experience significantly greater price and yield
volatility than that experienced by traditional fixed-income
securities. Under certain interest rate and prepayment rate
scenarios, the Fund may fail to recoup fully its investment in
Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When the Fund reinvests
amounts representing payments and unscheduled prepayments of
principal, it may receive a rate of interest that is lower than
the rate on existing adjustable rate mortgage pass-through
securities. Thus, Mortgage-Backed Securities, and adjustable
rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. Government securities as a
means of "locking in" interest rates.

U.S. AND FOREIGN TAXES. A Fund's investment in foreign
securities may be subject to taxes withheld at the source on
dividend or interest payments. Foreign taxes paid by a Fund may
be creditable or deductible by U.S. shareholders for U.S. income
tax purposes. No assurance can be given that applicable tax laws
and interpretations will not change in the future. Moreover,
non-U.S. investors may not be able to credit or deduct such
foreign taxes.

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 in fixed-income securities will change as the
general level of interest rates fluctuates. During periods of
falling interest rates, the values of fixed-income securities
generally rise. Conversely, during periods of rising interest
rates, the values of fixed-income securities generally decline.

Under normal market conditions, the average dollar-weighted
maturity of a Fund's portfolio of debt or other fixed-income
securities is expected to vary between five and 30 years in the
case of ALL-ASIA INVESTMENT FUND, between five and 25 years in
the case of UTILITY INCOME FUND, and between one year or less and
30 years in the case of all other Funds that invest in such
securities. In periods of increasing interest rates, each of the
Funds may, to the extent it holds mortgage-backed securities, be
subject to the risk that the average dollar-weighted maturity of

<PAGE>

the Fund's portfolio of debt or other fixed-income securities may
be extended as a result of lower than anticipated prepayment
rates.

INVESTMENT IN LOWER-RATED FIXED-INCOME SECURITIES. Lower-rated
securities, i.e., those rated Ba and lower by Moody's or BB and
lower by S&P, Duff & Phelps or Fitch, are subject to greater
credit risk or loss of principal and interest than higher-rated
securities. They also are generally considered to be subject to
greater market risk than higher-rated securities. 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.

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 the
securities for the purpose of computing a Fund's net asset value.
In addition, adverse publicity and investor perceptions about
lower-rated securities, whether or not factual, may tend to
impair their market value and liquidity.

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 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.

Certain lower-rated may contain call or buy-back features that
permit the issuers thereof to call or repurchase such securities.
Such securities may present risks based on prepayment

<PAGE>

expectations. If an issuer exercises such a provision, a Fund
may have to replace the called security with a lower-yielding
security, resulting in a decreased rate of return to the Fund.

YEAR 2000 AND EURO. Many computer systems and applications in
use today process transactions using two-digit date fields for
the year of the transaction, rather than the full four digits.
If these systems are not modified or replaced, transactions
occurring after 1999 could be processed as year "1900", which
could result in processing inaccuracies and computer system
failures. This is commonly known as the Year 2000 problem. In
addition to the Year 2000 problem, the European Economic and
Monetary Union has established a single currency, the Euro
Currency ("Euro") that will replace the national currency of
certain European countries effective January 1, 1999. Computer
systems and applications must be adapted in order to be able to
process Euro sensitive information accurately beginning in 1999.
Should any of the computer systems employed by the Funds' major
service providers fail to process Year 2000 or Euro related
information properly, that could have a significant negative
impact on the Funds' operations and the services that are
provided to the Funds' shareholders. In addition, to the extent
that the operations of issuers of securities held by the Funds
are impaired by the Year 2000 problem or the Euro, or prices of
securities held by the Funds decline as a result of real or
perceived problems relating to the Year 2000 or the Euro, the
value of the Funds' shares may be materially affected.

With respect to the Year 2000, the Funds have been advised that
Alliance, each Fund's investment adviser, Alliance Fund
Distributors, Inc, ("AFD"), each Fund's principal underwriter,
and Alliance Fund Services, Inc. ("AFS"), each Fund's registrar,
transfer agent and dividend disbursing agent (collectively,
"Alliance") began to address the Year 2000 issue several years
ago in connection with the replacement or upgrading of certain
computer systems and applications. During 1997, Alliance began a
formal Year 2000 initiative, which established a structured and
coordinated process to deal with the Year 2000 issue. Alliance
reports that it has completed its assessment of the Year 2000
issues on its domestic and international computer systems and
applications. Currently, management of Alliance expects that the
required modifications for the majority of its significant
systems and applications that will be in use on January 1, 2000,
will be completed and tested by the end of 1998. Full
integration testing of these systems and testing of interfaces
with third-party suppliers will continue through 1999. At this
time, management of Alliance believes that the costs associated
with resolving this issue will not have a material adverse effect
on its operations or on its ability to provide the level of
services it currently provides to the Funds.

<PAGE>

With respect to the Euro, the Funds have been advised that
Alliance has established a project team to assess changes that
will be required in connection with the introduction of the Euro.
Alliance reports that its project team has assessed all systems,
including those developed or managed internally, as well as those
provided by vendors, in order to determine the modifications that
will be required to process accurately transactions denominated
in Euro after 1998. At this time, management of Alliance expects
that the required modifications for the introduction of the Euro
will be completed and tested before the end of 1998. Management
of Alliance believes that the costs associated with resolving
this issue will not have a material adverse effect on its
operations or on its ability to provide the level of services it
currently provides to the Funds.

The Funds and Alliance have been advised by the Funds' Custodians
that they are also in the process of reviewing their systems with
the same goals. As of the date of this prospectus, the Funds and
Alliance have no reason to believe that the Custodians will be
unable to achieve these goals.

<PAGE>

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Each Fund's Adviser is Alliance Capital Management, L.P.,
1345 Avenue of the Americas, New York, NY 10105. Alliance is a
leading international investment adviser supervising client
accounts with assets as of December 31, 1998 totaling more than
$___ billion (of which approximately $__ billion represented
assets of investment companies). Alliance's clients are
primarily major corporate employee benefit plans, public employee
retirement systems, investment companies, foundations, and
endowment funds. The __ registered investment companies, with
more than ___ separate portfolios, managed by Alliance currently
have over two million shareholders. As of December 31, 1998,
Alliance was retained as investment manager for over [ ] of the
Fortune 100 Companies.

Alliance provides investment advisory services and order
placement facilities for the Funds. For these advisory services,
the Funds paid Alliance as a percentage of net assets:

FEE AS A FISCAL
PERCENTAGE YEAR
FUND OF NET ASSETS * ENDING

Premier Growth
Growth
Technology
Quasar
Alliance Fund
Growth and Income Fund
Balanced Shares
Utility Income Fund
Real Estate Investment
New Europe
Worldwide Privatization
International Premier Growth
Global Small Cap
International
Greater China '97
All-Asia Investment
Global Environment

* Fees are stated net of waivers and/or reimbursements. See the
"Fee Table" at the beginning of the Prospectus for more
information about fee waivers.

In connection with providing advisory services to GREATER CHINA
'97 FUND, Alliance has, at its expense, retained as a consultant
New Alliance, a joint venture company headquartered in Hong Kong,

<PAGE>

which was formed in 1997 by Alliance and Sun Hung Kai Properties
Limited. New Alliance provides Alliance with ongoing, current,
and comprehensive information and analysis of conditions and
developments in Greater China countries.

In connection with investments in real estate securities,
Alliance has, at its expense, retained as a consultant CB Richard
Ellis, Inc. ("CBRE"). CBRE is a publicly held company and the
largest real services company in the United States, comprised of
real estate brokerage, property, and facilities management, and
real estate finance, and investment advisory services.

PORTFOLIO MANAGER

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
DURING THE PAST FIVE
FUND EMPLOYEE; YEAR; TITLE (5) YEARS

Premier Growth Alfred Harrison; since Associated with Alliance
inception--Vice Chairman of
Alliance Capital Management
Corporation (ACMC)

Growth Tyler Smith; since inception-- Associated with Alliance
Senior Vice President of ACMC

Technology Peter Anastos; since 1992-- Associated with Alliance
Senior Vice President of ACMC
Gerald T. Malone; since 1992-
-Senior Vice President of ACMC

Quasar Alden M. Stewart since 1994-- Associated with Alliance
Executive Vice President of
ACMC*
Randall E. Haase since 1994-- Associated with Alliance
Senior Vice President of ACMC

Alliance Fund Alden M. Stewart; since 1997-- (see above)
(see above)

Randall E. Haase; since 1997- (see above)
(see above)

Growth & Income Paul Rissman; since 1994-- Associated with Alliance
Senior Vice President of ACMC

<PAGE>

Balanced Shares Paul Rissman since 1997--(see (see above)
above)

Utility Income Paul Rissman since 1996--(see (see above)
above)

Real Estate
Investment Daniel G. Pine; since 1996-- Associated with Alliance
Senior Vice President of ACMC since 1996; prior
thereto; Senior Vice
President of Desai
Capital Management

David Kruth; since 1997--Vice Associated with Alliance
President of ACMC since 1997; prior
thereto; Senior Vice
President of Yarmouth
Group

New Europe Steven Beinhacker; since 1997-- Associated with Alliance
Vice President of ACMC

Worldwide
Privatization Mark H. Breedon; since inception Associated with Alliance
Senior Vice President of
ACMC and Director and
Vice President of
Alliance Capital
Limited **

International
Premier Growth Alfred Harrison; since 1998-- (see above)
(see above)
Thomas Kamp since 1998--Senior Associated with Alliance
Vice President of ACMC

Global Small Cap Alden M. Stewart; since 1994-- (see above)
(see above)
Randall E. Haase; since 1994-- (see above)
(see above)
Ronald L. Simcoe; since 1993-- Associated with Alliance
Vice President of ACMC

International Bruce W. Calvert; since 1998-- Associated with Alliance
Vice Chairman and Chief
Investment Officer of ACMC

Greater China '97 Matthew W.S. Lee; since 1997-- Associated with Alliance
Vice President of ACMC since 1997; prior
thereto; associated with
National Mutual Funds

<PAGE>

Management (Asia) and
James Capel and Co.
since prior to 1994

All-Asia
Investment Hiroshi Motoki; since 1998-- Associated with Alliance
Senior Vice President of ACMC since 1994; prior
and director of Japanese/Asian thereto; associated with
Equity research Ford Motor Company

Global Environment Linda Bolton Weiser; since Associated with Alliance
1998-- Vice President of ACMC

* The sole general partner of Alliance.
** An indirect wholly-owned subsidiary of Alliance.

PERFORMANCE OF SIMILARLY MANAGED PORTFOLIOS. In addition to
managing the assets of PREMIER GROWTH FUND, Mr. Harrison has
ultimate responsibility for the management of discretionary tax-
exempt accounts of institutional clients managed as described
below without significant client-imposed restrictions
("Historical Portfolios"). These accounts have substantially the
same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and
techniques as those for PREMIER GROWTH FUND, except for the
ability of PREMIER GROWTH FUND to use futures and options as
hedging tools and to invest in warrants. The Historical
Portfolios also are not subject to certain limitations,
diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which PREMIER GROWTH FUND, as a
registered investment company, is subject and which, if
applicable to the Historical Portfolios, may have adversely
affected the performance results of the Historical Portfolios.
See "Investment Objective and Policies."

Set forth below is performance data provided by Alliance relating
to the Historical Portfolios for each of the nineteen full
calendar years during which Mr. Harrison has managed the
Historical Portfolios as an employee of Alliance and cumulatively
through September 30, 1998. As of September 30, 1998, the assets
in the Historical Portfolios totaled approximately $12.3 billion
and the average size of an institutional account in the
Historical Portfolio was $412 million. Each Historical Portfolio
has a nearly identical composition of investment holdings and
related percentage weightings.

<PAGE>

GROWTH FUND, which are higher than the fees imposed on the
Historical Portfolio and will result in a higher expense ratio
and lower returns for PREMIER GROWTH FUND. Expenses associated
with the distribution of Class A, Class B and Class C shares of
PREMIER GROWTH FUND in accordance with the plan adopted by
PREMIER GROWTH FUND's Board of Directors pursuant to Rule 12b-1
under the 1940 Act ("distribution fees") are also excluded. See
"Expense Information." The performance data has also not been
adjusted for corporate or individual taxes, if any, payable by
the account owners.

Alliance has calculated the investment performance of the
Historical Portfolios on a trade-date basis. Dividends have been
accrued at the end of the month and cash flows weighted daily.
Composite investment performance for all portfolios has been
determined on an asset weighted basis. New accounts are included
in the composite investment performance computations at the
beginning of the quarter following the initial contribution. The
total returns set forth below are calculated using a method that
links the monthly return amounts for the disclosed periods,
resulting in a time-weighted rate of return.

As reflected below, the Historical Portfolios have over time
performed favorably when compared with the performance of
recognized performance indices. The S&P 500 Index is a widely
recognized, unmanaged index of market activity based upon the
aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The S&P 500
Index reflects the total return of securities comprising the
Index, including changes in market prices as well as accrued
investment income, which is presumed to be reinvested. The
Russell 1000 universe of securities is compiled by Frank Russell
Company and is segmented into two style indices, based on the
capitalization-weighted median book-to-price ratio of each of the
securities. At each reconstitution, the Russell 1000
constituents are ranked by their book-to-price ratio. Once so
ranked, the breakpoint for the two styles is determined by the
median market capitalization of the Russell 1000. Thus, those
securities falling within the top fifty percent of the cumulative
market capitalization (as ranked by descending book-to-price)
become members of the Russell Price-Driven Indices. The Russell
1000 Growth Index is, accordingly, designed to include those
Russell 1000 securities with a greater-than-average growth
orientation. In contrast with the securities in the Russell
Price-Driven Indices, companies in the Growth Index tend to
exhibit higher price-to-book and price-earnings ratios, lower
dividend yield and higher forecasted growth values.

To the extent PREMIER GROWTH FUND does not invest in U.S. common
stocks or utilizes investment techniques such as futures or

<PAGE>

options, the S&P 500 Index and Russell 1000 Growth Index may not
be substantially comparable to PREMIER GROWTH FUND. The S&P 500
Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time
period shown. The S&P 500 Index and Russell 1000 Growth Index do
not reflect the deduction of any fees. If PREMIER GROWTH FUND
were to purchase a portfolio of securities substantially
identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, PREMIER GROWTH FUND's performance
relative to the index would be reduced by PREMIER GROWTH FUND's
expenses, including brokerage commissions, advisory fees,
distribution fees, custodial fees, transfer agency costs and
other administrative expenses, as well as by the impact on
PREMIER GROWTH FUND's shareholders of sales charges and income
taxes.

The Lipper Growth Fund Index is prepared by Lipper Analytical
Services, Inc. and represents a composite index of the investment
performance for the 30 largest growth mutual funds. The
composite investment performance of the Lipper Growth Fund Index
reflects investment management and administrative fees and other
operating expenses paid by these mutual funds and reinvested
income dividends and capital gain distributions, but excludes the
impact of any income taxes and sales charges.

The following performance data is provided solely to illustrate
Mr. Harrison's performance in managing the Historical Portfolios
and the PREMIER GROWTH FUND as measured against certain broad
based market indices and against the composite performance of
other open-end growth mutual funds. Investors should not rely on
the following performance data of the Historical Portfolios as an
indication of future performance of PREMIER GROWTH FUND. The
composite investment performance for the periods presented may
not be indicative of future rates of return. Other methods of
computing investment performance may produce different results,
and the results for different periods may vary.

SCHEDULE OF COMPOSITE INVESTMENT PERFORMANCE--
HISTORICAL PORTFOLIOS*

RUSSELL LIPPER
PREMIER HISTORICAL S&P 500 100 GROWTH
GROWTH PORTFOLIOS INDEX GROWTH INDEX FUND INDEX
FUND TOTAL RETURN** TOTAL RETURN TOTAL RETURN TOTAL RETURN

Year ended December:
1998
1997*** 27.05% 34.64% 33.36% 30.49% 25.30%
1996*** 18.84 22.06 22.96 23.12 17.48
1995*** 40.66 39.83 37.58 37.19 32.65
1994 (9.78) (4.82) (1.32) (1.57)

100

<PAGE>

1993 5.35 10.54 10.08 11.98
1992 --- 12.18 7.62 7.63
1991 --- 38.91 30.47 35.20
1990 --- (1.57) (3.10) (0.26) (5.00)
1989 --- 38.80 31.69 35.92 28.60
1988 --- 10.88 16.61 11.27 15.80
1987 -- 8.49 5.25 5.31 1.00
1986 --- 27.40 18.67 15.36 15.90
1985 --- 37.41 31.73 32.85 30.30
1984 --- (3.31) 6.27 (.95) (2.80)
1983 --- 20.80 22.56 15.98 22.30
1982 --- 28.02 21.55 20.46 20.20
1981 --- (1.09) (4.92) (11.31) (8.40)
1980 --- 50.73 32.50 39.57 37.30
1979 --- 30.76 18.61 23.91 27.40
Cumulative total
return for
the period
January 1, 1979 to
December 31, 1998

--- %

* Total return is a measure of investment performance that is
based upon the change in value of an investment from the
beginning to the end of a specified period and assumes
reinvestment of all dividends and other distributions. The
basis of preparation of this data is described in the
preceding discussion. Total returns for PREMIER GROWTH FUND
are for Class A shares, with imposition of the maximum
4.25% sales charge.

** Assumes imposition of the maximum advisory fee charged by
Alliance for any Historical Portfolio for the period
involved.

*** During this period, the Historical Portfolios differed from
PREMIER GROWTH FUND in that PREMIER GROWTH FUND invested a
portion of its net assets in warrants on equity securities
in which the Historical Portfolios were unable, by their
investment restrictions, to purchase. In lieu of warrants,
the Historical Portfolios acquired the common stock upon
which the warrants were based.

The average annual total returns presented below are based upon
the cumulative total return as of December 31, 1998 and, for more
than one year, assume a steady compounded rate of return and are
not year-by-year results, which fluctuated over the periods as
shown.

101

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS

PREMIER RUSSELL LIPPER
GROWTH HISTORICAL S&P 1000 GROWTH
FUND PORTFOLIOS INDEX GROWTH INDEX FUND INDEX
One year % % % % %
Three years
Five years
Ten years
Since January 1,
1979 ---

+ Since inception on 9/28/92

The Funds' Statements of Additional Information has more detailed
information about Alliance and other Fund service providers.

PURCHASE AND SALE OF SHARES

HOW THE FUND VALUES ITS SHARES

The Funds' net asset value or NAV is calculated at 4 p.m. Eastern
time each day the Exchange is open for business. To calculate
NAV, the Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the
number of shares outstanding. The Funds' value their securities
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 Funds' directors believe accurately
reflect fair market value.

Your order for purchase, sale, or exchange of shares is priced at
the next NAV calculated after your order is accepted by the Fund.
Your purchase of Fund shares may be subject to an initial sales
charge. Sales of Fund shares may be subject to a contingent
deferred sales charge or CDSC. See the next section of this
Prospectus, DISTRIBUTION ARRANGEMENTS, for details.

HOW TO BUY SHARES

You may purchase a Funds' shares through broker-dealers, banks,
or other financial intermediaries. You also may purchase shares
directly from the Funds' principal underwriter, Alliance Fund
Distributors, Inc., or AFD.

102

<PAGE>

Minimum investment amounts are:

-- Initial: $250
-- Subsequent: $ 50
-- Automatic Investment Program: $ 25

If you are an existing Fund shareholder, you may purchase shares
by electronic funds transfer in amounts not exceeding $500,000 if
you have completed the appropriate section of the Shareholder
Application. Call 800-221-5672 to arrange a transfer from your
bank account.

A Fund is required to withhold 31% of taxable dividends, capital
gains distributions, and redemptions paid to shareholders who
have not provided the Fund with their certified taxpayer
identification number. To avoid this, you must provide your
correct Tax Identification Number (Social Security Number for
most investors) on your account application.

A Fund may refuse any order to purchase shares. In this regard,
the Funds' reserve the right to restrict purchases of shares
(including through exchanges) when they appear to evidence a
pattern of frequent purchases and sales made in response to
short-term considerations.

HOW TO EXCHANGE SHARES

You may exchange your Fund shares for shares of the same class of
other Alliance Mutual Funds (including AFD Exchange Reserves, a
money market fund managed by Alliance). Exchanges shares are
made at the next-determined NAV, without sales or service
charges. You may request an exchange by mail or telephone. You
must call by 4:00 p.m. Eastern time to receive that day's NAV.
The Funds may change, suspend, or terminate the exchange service
on 60 days' written notice.

HOW TO SELL SHARES

You may "redeem" your shares (i.e., sell your shares to a Fund)
on any day the NYSE is open, either directly or through your
financial intermediary. Your sales price will be the next-
determined NAV, less any applicable CDSC, after the Fund receives
your sales request in proper form. Normally, proceeds will be
sent to you within 7 days. If you recently purchased your shares
by check or electronic funds transfer, you cannot redeem any
portion of it until the Fund is reasonably satisfied that the
check or electronic funds transfer has been collected (which may
take up to 15 days).

103

<PAGE>

-- Selling Shares Through Your Broker

Your broker must receive your sales request by 4:00 p.m., Eastern
time, and submit it to the Fund by 5:00 p.m., Eastern time, for
you to receive that day's NAV, less any applicable CDSC. Your
broker is responsible for submitting all necessary documentation
to the Fund and may charge you for this service.

-- Selling Shares Directly to the Fund

BY MAIL:

- Send a signed letter of instruction or stock power,
along with certificates, to:

Alliance Fund Services
P.O. Box 1520
Secaucus, N.J. 07906-1520
800-221-5672

- For your protection, a bank, a member firm of a national
stock exchange, or other eligible guarantor institution,
must guarantee signatures. 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.
If you have any questions about these procedures,
contact AFS.

BY TELEPHONE:

- You may redeem your shares for which no stock
certificates have been issued by telephone request.
Call AFS at 800-221-5672 with instructions on how you
wish to receive your sale proceeds.

- A telephone redemption request must be received by
4:00 p.m. Eastern time for you to receive that day's
NAV, less any applicable CDSC.

-- If you have selected electronic funds transfer in your
Shareholder Application, the redemption proceeds may be
sent directly to your bank. Otherwise, the proceeds
will be mailed to you.

-- Redemption requests by electronic funds transfer may not
exceed $100,000 per day and redemption requests by check
cannot exceed $50,000 per day.

104

<PAGE>

-- Telephone redemption is not available for shares held in
nominee or "street name" accounts, retirement plan
accounts, or shares held by a shareholder who has
changed his or her address of record within the previous
30 calendar days.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Fund's income dividend and capital gains distribution, if
any, declared by a Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or in additional
shares of the same class of shares of that Fund. If paid in
additional shares, the shares will have an aggregate net asset
value as of the close of business on the day following the
declaration date of the dividend or distribution equal to the
cash amount of the dividend or distribution. You may make an
election to receive dividends and distributions in cash or in
shares at the time you purchase shares. Your election can be
changed at any time prior to a record date for a dividend. There
is no sales or other charge in connection with the reinvestment
of dividends or capital gains distributions. Cash dividends may
be paid in check, or at your election, electronically via the ACH
network. There is no sales or other charge on the reinvestment
of Fund distributions.

If you receive an income dividend or capital gains distribution
in cash you may, within 120 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 the 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.

The Funds expect that distributions will consist either of net
income or long-term capital gains. For federal income tax
purposes, the Fund's dividend distributions of net income (or
short-term taxable gains) will be taxable to you as ordinary
income. Any capital gains distributions may be taxable to you as
capital gains. A Fund's distributions also may be subject to
certain state and local taxes.

105

<PAGE>

distributions paid to REAL ESTATE INVESTMENT FUND and
subsequently distributed to shareholders may be a nontaxable
return of capital. The final determination of the amount of a
Fund's return of capital distributions for the period will be
made after the end of each calendar year.

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 (or to permit shareholders to claim a deduction for
such foreign taxes), but there can be no assurance that any Fund
will be able to do so. Furthermore, a shareholder's ability to
claim a foreign tax credit or deduction in respect of foreign
taxes paid by a Fund may be subject to certain limitations
imposed by the Code, as a result of which a shareholder may not
be permitted to claim a full credit or deduction for the amount
of such taxes.

Under certain circumstances, if a Fund realizes losses (e.g.,
from fluctuations in currency exchange rates) after paying a
dividend, all or a portion of the dividend may subsequently be
characterized as a return of capital. Returns of capital are
generally nontaxable, but will reduce a shareholder's basis in
shares of a Fund. If that basis is reduced to zero (which could
happen if the shareholder does not reinvest distributions and
returns of capital are significant), any further returns of
capital will be taxable as capital gain. See the Fund's SAI for
a further explanation of these tax issues.

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.

The sale or exchange of Fund shares is a taxable transaction for
Federal income tax purposes.

Each year shortly after December 31, the Funds will send you tax
information stating the amount and type of all its distributions
for the year. Consult your tax adviser about the federal, state,
and local tax consequences in your particular circumstances.

DISTRIBUTION ARRANGEMENT

Share Classes. The Fund offers three classes of shares.

106

<PAGE>

CLASS A SHARES--INITIAL SALES CHARGE ALTERNATIVE

You can purchase Class A shares at NAV with an initial sales
charge as follows.

INITIAL SALES CHARGE
Commission to
Dealer/Agent
As % of Net As % of as % of
Amount Purchased Amount Invested Offering Price Offering Price

Up to $100,000 4.44% 4.25% 4.00%
$100,000 up to $250,000 3.36 3.25 3.00
$250,000 up to $500,000 2.30 2.25 2.00
$500,000 up to $1,000,000 1.78 1.75 1.50

You pay no initial sales charge on purchases of Class A Shares in
the amount of $1,000,000, but may pay a 1% CDSC if you redeem
your shares within 1 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 under 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 a Fund's SAI for additional information about
these options.

CLASS B SHARES--DEFERRED SALES CHARGE ALTERNATIVE

You can purchase Class B Shares at NAV without an initial sales
charge. A Fund will thus receive the full amount of your
purchase. Your investment, however, will be subject to a CDSC if
you redeem shares within 4 years of purchase. The CDSC varies
depending of the number of years you hold the shares. The CDSC
amounts are:

YEARS SINCE PURCHASE CDSC
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth None

If you exchange your shares for the Class B shares of another
Alliance Mutual Fund, the CDSC also will apply to those Class B
shares. The CDSC period begins with the date of your original
purchase, not the date of exchange for the other Class B shares.

107

<PAGE>

The Fund's Class B shares purchased for cash automatically
convert to Class A shares eight years after the end of the month
of your purchase. If you purchase shares by exchange for the
Class B shares of another Alliance Mutual Fund, the conversion
period runs from the date of your original purchase.

CLASS C SHARES--ASSET-BASED SALES CHARGE ALTERNATIVE

You can purchase shares at NAV without an initial sales charge.
A Fund will thus receive the full amount of your purchase. Your
investment, however, will be subject to a 1% CDSC if you redeem
your shares within 1 year. If you exchange your shares for the
Class C shares of another Alliance Mutual Fund, the 1% CDSC also
will apply to those Class C shares. The 1-year period for the
CDSC begins with the date of your original purchase, not the date
of the exchange for the other Class C shares.

Class C shares do not convert to any other class of shares of the
Fund.

Asset-based Sales Charge or Rule 12b-1 Fees. Each Fund has
adopted a plan under SEC Rule 12b-1 that allows the Fund to pay
asset-based sales charges or distribution and service fees for
the distribution and sale of its shares. The amount of these
fees for each class of the Fund's shares is:

RULE 12B-1 FEE (AS A PERCENT OF
AGGREGATE AVERAGE DAILY NET ASSETS)

Class A .30%*
Class B 1.00%
Class C 1.00%

* The fee under the Rule 12b-1 Plan for the Class A shares of
GROWTH FUND and PREMIER GROWTH FIND is .50% of the aggregate
average daily net assets. The Directors of GROWTH FUND
currently limit the payments to .30%. The Directors of
PREMIER GROWTH FUND limit payments for Class A shares
purchased after November 1993 to .30% of net assets.

Because these fees are paid out of the Fund's assets on an on-
going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
fees. Class B and Class C shares are subject to higher
distribution fees than Class A shares (Class B shares are subject
to these higher fees for a period of eight years, after which
they convert to Class A shares). The higher fees mean a higher
expense ratio, so Class B and Class C shares pay correspondingly
lower dividends and may have a lower net asset value than Class A
shares.

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Choosing a Class of Shares. 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 purchasing Class A shares. If you are making a smaller
investment, you might consider purchasing 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 is no initial sales charge and no CDSC as
long as the shares are held for one year or more. 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 $1,000,000.

You should consult your financial agent to assist in choosing a
class of Fund shares.

Application of the CDSC. The CDSC is applied to the lesser of
the original cost of shares being redeemed or NAV at the time of
redemption (or, as to Fund shares acquired through an exchange,
the cost of the Alliance Mutual Fund shares originally purchased
for cash). Shares obtained from dividend or distribution
reinvestment are not subject to the CDSC. The Fund may waive the
CDSC on redemptions of shares following the death or disability
of a shareholder, to meet the requirements of certain qualified
retirement plans, or under a monthly, bimonthly, or quarterly
systematic withdrawal plan. See the Fund's SAI or further
information about CDSC waivers.

Other. A transaction, service, administrative or other similar
fee may be charged by your broker-dealer, agent, financial
intermediary or other financial representative with respect to
the purchase, sale or exchange of Class A, Class B or Class C
shares made through such financial representative. Such financial
intermediaries may also impose requirements with respect to the
purchase, sale, or exchange of shares that are different from, or
in addition to, those imposed by a Fund, including requirements
as to the minimum initial and subsequent investment amounts.

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 for 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 take the form of payment for

109

<PAGE>

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 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.

GENERAL INFORMATION

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 in reaching AFS by telephone, in which event you
should issue written instructions to AFS. AFS is not responsible
for the authenticity of telephone 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
telephone 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 Subscription Application.
You also may request a shareholder's manual explaining all
available services by calling 800-227-4618.

Employee Benefit Plans. Certain employee benefit plans,
including employer-sponsored tax-qualified 401(k) plans and other
defined contribution retirement plans ("Employee Benefit Plans"),
may establish requirements as to the purchase, sale or exchange
of shares, including maximum and minimum initial investment
requirements, that are different from those described in this
Prospectus. Employee Benefit Plans also may not offer all
classes of shares of the Funds. In order to enable participants
investing through Employee Benefit Plans to purchase shares of
the Funds, the maximum and minimum investment amounts may be
different for shares purchased through Employee Benefit Plans
from those described in this Prospectus. In addition, the
Class A, Class B, and Class C CDSC may be waived for investments
made through Employee Benefit Plans.

110

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FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand
a Fund's financial performance for the period of the Fund's
operations. Certain information reflects financial information
for a single Fund share. The total return in the table
represents the rate that an investor would have earned (or lost)
on an investment in the Fund (assuming investment of all
dividends and distributions). The information has been audited
by ______________, the Fund's independent auditors, whose report,
along with Fund's financial statements, appears in the Statement
of Additional Information, which is available upon request.

CLASS A
YEAR ENDED
_______________________________________

1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

111

<PAGE>

CLASS B
YEAR ENDED
_________________________________________
1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

112

<PAGE>

CLASS C
YEAR ENDED
_________________________________________
1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

113

<PAGE>

For more information about the Funds, the following documents are
available upon request:

- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS

The Funds' annual and semi-annual reports to shareholders contain
additional information on the Funds' investments. In the annual
report, you will find a discussion of the market conditions and
investment strategies that significantly affected a Fund's
performance during its last fiscal year.

- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)

Each Fund has an SAI, which contains more detailed information
about the Fund, including its operations and investment policies.
The Funds' SAIs are incorporated by reference into (and is
legally part of) this prospectus.

You may request a free copy of the current annual/semi-annual
report or the SAI, by contacting your broker or other financial
intermediary, or by contacting Alliance:

BY MAIL: c/o Alliance Fund Services, Inc.
P.B. Box 1520
Secaucus, NJ 07096-1520

BY PHONE: For Information: (800) 221-5672
For Literature: (800) 227-4618

Or you may view or obtain these documents from the SEC:

IN PERSON: at the SEC's Public Reference Room in
Washington, D.C.

BY PHONE: 1-800-SEC-0330

BY MAIL: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

ON THE INTERNET: www.sec.gov

Your also may find more information about Alliance and the Funds
on the Internet at: www.Alliancecapital.com

114

<PAGE>

APPENDIX A

The following is additional information about the United Kingdom,
Japan and Greater China countries.

Investment in United Kingdom Issuers. Investment in securities
of United Kingdom issuers involves certain considerations not
present with investment in securities of U.S. issuers. As with
any investment not denominated in the U.S. dollar, the U.S.
dollar value of the Fund's investment denominated in the British
pound sterling will fluctuate with pound sterling-dollar exchange
rate movements. Between 1972, when the pound sterling was
allowed to float against other currencies, and the end of 1992,
the pound sterling generally depreciated against most major
currencies, including the U.S. dollar. Between September and
December 1992, after the United Kingdom's exit from the Exchange
Rate Mechanism of the European Monetary System, the value of the
pound sterling fell by almost 20% against the U.S. dollar. The
pound sterling has since recovered due to interest rate cuts
throughout Europe and an upturn in the economy of the United
Kingdom. The average exchange rate of the U.S. dollar to the
pound sterling was 1.50 in 1993 and 1.64 in 1997. On October 13,
1998 the U.S. dollar-pound sterling exchange rate was 1.71.

The United Kingdom's largest stock exchange is the London Stock
Exchange, which is the third largest exchange in the world. As
measured by the FT-SE 100 index, the performance of the 100
largest companies in the United Kingdom reached 5,135.5 at the
end of 1997, up approximately 25% from the end of 1996. On
October 5, 1998 the FT-SE 100 index closed at 4648.7, the lowest
close in the 12-month period prior to that date, after reaching a
high of 6179.0 on July 20, 1998. The FT-SE 100 index closed at
4990.1 on October 14, 1998.

In January 1999, the Economic and Monetary Union ("EMU") is
scheduled to take effect. The EMU will establish a common
currency for European countries that meet the eligibility
criteria and choose to participate. Although the United Kingdom
meets the eligibility criteria, the government has not taken any
action to join the EMU.

From 1979 until 1997 the Conservative Party controlled
Parliament. In the May 1, 1997 general elections, however, the
Labour Party, led by Tony Blair, won a majority in Parliament,
holding 418 of 658 seats in the House of Commons. Mr. Blair, who
was appointed Prime Minister, has launched a number of reform
initiatives, including an overhaul of the monetary policy
framework intended to protect monetary policy from political
forces by vesting responsibility for setting interest rates in a
new Monetary Policy Committee headed by the Governor of the Bank
of England, as opposed to the Treasury. Prime Minister Blair has

A-1

<PAGE>

also undertaken a comprehensive restructuring of the regulation
of the financial services industry. For further information
regarding the United Kingdom, see the Statement of Additional
Information of New Europe Fund.

Investment in Japanese Issuers. Investment in securities of
Japanese issuers involves certain considerations not present with
investment in securities of U.S. issuers. As with any investment
not denominated in the U.S. dollar, the U.S. dollar value of each
Fund's investments denominated in the Japanese yen will fluctuate
with yen-dollar exchange rate movements. Between 1985 and 1995,
the Japanese yen generally appreciated against the U.S. dollar,
but has since fallen from its post-World War II high (in 1995)
against the U.S. dollar.

Japan's largest stock exchange is the Tokyo Stock Exchange, the
First Section of which is reserved for larger, established
companies. As measured by the TOPIX, a capitalization-weighted
composite index of all common stocks listed in the First Section,
the performance of the First Section reached a peak in 1989.
Thereafter, the TOPIX declined approximately 50% through the end
of 1997. On October 13, 1998 the TOPIX closed at 998.98, down
approximately 15% from the end of 1997. Certain valuation
measures, such as price-to-book value and price-to-cash flow
ratios, indicate that the Japanese stock market is near its
lowest level in the last twenty years relative to other world
markets.

In recent years, Japan has consistently recorded large current
account trade surpluses with the U.S. that have caused
difficulties in the relations between the two countries. On
October 1, 1994, the U.S. and Japan reached an agreement that may
lead to more open Japanese markets with respect to trade in
certain goods and services. In June 1995, the two countries
agreed in principle to increase Japanese imports of American
automobiles and automotive parts. Nevertheless it is expected
that the continuing friction between the U.S. and Japan with
respect to trade issues will continue for the foreseeable future.

Each Fund's investments in Japanese issuers will be subject to
uncertainty resulting from the instability of recent Japanese
ruling coalitions. From 1955 to 1993, Japan's government was
controlled by a single political party. Between August 1993 and
October 1996 Japan was ruled by a series of four coalition
governments. As the result of a general election on October 20,
1996, however, Japan returned to a single-party government led by
Ryutaro Hashimoto, a member of the Liberal Democratic Party
("LDP"). While the LDP does not control a majority of the seats
in the parliament, it is only three seats short of the 251 seats
required to attain a majority in the House of Representatives
(down from a 12-seat shortfall just after the October 1996

A-2

<PAGE>

election). The popularity of the LDP declined, however, due to
the dissatisfaction with Mr. Hashimoto's leadership. In the July
1998 House of Councillors election, the LDP's representation fell
to 103 seats from 120 seats. As a result of the LDP's defeat,
Mr. Hashimoto resigned as prime minister and leader of the LDP.
Mr. Hashimoto was replaced by Keizo Obuchi. For the past several
years, Japan's banking industry has been weakened by a
significant amount of problem loans. Japan's banks also have
significant exposure to the current financial turmoil in other
Asian markets. Following the insolvency of one of Japan's
largest banks in November 1997, the government proposed several
plans designed to strengthen the weakened banking sector. In
October 1998, the Japanese parliament approved several new laws
that will make $508 billion in public funds available to increase
the capital of Japanese banks, to guarantee depositors' accounts
and to nationalize the weakest banks. It is unclear whether
these new laws will achieve their intended effect. For further
information regarding Japan, see the Statements of Additional
Information of ALL-ASIA INVESTMENT FUND and INTERNATIONAL FUND.

Investment in Greater China Issuers. China, in particular, but
Hong Kong and Taiwan, as well, in significant measure because of
their existing and increasing economic, and now in the case of
Hong Kong, direct political ties with China, may be subject to a
greater degree of economic, political and social instability than
is the case in the United States.

China's economy is very much in transition. While the government
still controls production and pricing in major economic sectors,
significant steps have been taken toward capitalism and China's
economy has become increasingly market oriented. China's strong
economic growth and ability to attract significant foreign
investment in recent years stem from the economic liberalization
initiated by Deng Xiaoping who assumed power in the late 1970s.
The economic growth, however, has not been smooth and has been
marked by extremes in many respects of inordinate growth, which
has not been tightly controlled, followed by rigid measures of
austerity.

The rapidity and erratic nature of the growth have resulted in
inefficiencies and dislocations, including at times high rates of
inflation.

China's economic development has occurred notwithstanding the
continuation of the power of China's Communist Party and China's
authoritarian government control, not only of centrally planned
economic decisions, but of many aspects of the social structure.
While a significant portion of China's population has benefited
from China's economic growth, the conditions of many leave much
room for improvement. Notwithstanding restrictions on freedom of
expression and the absence of a free press, and notwithstanding

A-3

<PAGE>

the extreme manner in which past unrest has been dealt with, the
1989 Tianamen Square uprising being a recent reminder, the
potential for renewed popular unrest associated with demands for
improved social, political and economic conditions cannot be
dismissed.

Following the death of Deng Xiaoping in February 1997, Jian Zemin
became the leader of China's Communist Party. The transfer of
political power has progressed smoothly and Jiang's popularity
and credibility have gradually increased. Jiang continues to
consolidate his power, but as of yet does not appear to have the
same degree of control as did Deng Xiaoping. Jiang has continued
the market-oriented policies of Deng. Currently, China's major
economic challenge centers on reforming or eliminating
inefficient state-owned enterprises without creating an
unacceptable level of unemployment. Recent capitalistic policies
have in many respects effectively outdated the Communist Party
and the governmental structure, but both remain entrenched. The
Communist Party still controls access to governmental positions
and closely monitors governmental action. Essentially there
exists an inefficient set of parallel bureaucracies and attendant
opportunities for corruption.

In addition to the economic impact of China's internal political
uncertainties, the potential effect of China's actions, not only
on China Itself, but on Hong Kong and Taiwan as well, could also
be significant.

China is heavily dependent on foreign trade, particularly with
Japan, the United States, South Korea and Germany. Political
developments adverse to its trading partners, as well as
political and social repression, could cause the United States
and others to alter their trading policy towards China. For
example, in the United States, the continued extension of most
favored nation trading status to China which is reviewed
regularly and was reviewed in 1998 is an issue of significant
controversy. Loss of that status would clearly hurt China's
economy by reducing its exports. With much of China's trading
activity being funneled through Hong Kong and with trade through
Taiwan becoming increasingly significant, any sizable reduction
in demand for goods from China would have negative implications
for both countries. China is believed to be the largest investor
in Hong Kong and its markets and an economic downturn in China
would be expected to reverberate through Hong Kong's markets as
well.

Although China has committed by treaty to preserve Hong Kong's
autonomy and its economic, political and social freedoms for
fifty years from the July 1, 1997 transfer of sovereignty from
Great Britain to China. Hong Kong is headed by a chief
executive, appointed by the central government of China, whose

A-4

<PAGE>

power is checked by both the government of China and a
Legislative Council. Although Hong Kong voters voted
overwhelmingly for pro-democracy candidates in the recent
election, it remains possible that China could exert its
authority so as to alter the economic structure, political
structure or existing social policy of Hong Kong. Investor and
business confidence in Hong Kong can be significantly affected by
such developments, which in turn can affect markets and business
performance. In this connection, it is noted that a substantial
portion of the companies listed on the Hong Kong Stock Exchange
are involved in real estate-related activities.

The securities markets of China and to a lesser extent Taiwan,
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, GREATER
CHINA '97 Fund may experience greater price volatility and
significantly lower liquidity than a portfolio invested solely in
equity 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 U.S. Securities
settlements may in some instances be subject to delays and
related administrative uncertainties.

Foreign investment in the securities markets of China and Taiwan
is restricted or controlled to varying degrees. These
restrictions or controls, which apply to the Greater CHINA '97
FUND may at times limit or preclude investment in certain
securities and may increase the cost and expenses of the Fund.
China and Taiwan require governmental approval prior to
investments by foreign persons or limit investment by foreign
persons to only a specified percentage of an issuer's outstanding
securities or a specific class of securities which may have less
advantageous terms (including price) than securities of the
company available for purchase by nationals. In addition, the
repatriation of investment income, capital or the proceeds of
sales of securities from China and Taiwan 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 restrictions on foreign capital remittances.

GREATER CHINA '97 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. The liquidity of the Fund's
investments in any country in which any of these factors exists
could be affected by any such factor or factors on the Fund's
investments. The limited liquidity in certain Greater China
markets is a factor to be taken into account in the Fund's

A-5

<PAGE>

valuation of portfolio securities in this category and may affect
the Fund's ability to dispose of securities in order to meet
redemption requests at the price and time it wishes to do so. It
is also anticipated that transaction costs, including brokerage
commissions for transactions both on and off the securities
exchanges in Greater China countries, will be higher than in the
U.S.

Issuers of securities in Greater China countries are generally
not subject to the same degree of regulation as are U.S. issuers
with respect to such matters as timely disclosure of information,
insider trading rules, restrictions on market manipulation and
shareholder proxy requirements. Reporting, accounting and
auditing standards of Greater China countries may differ, in some
cases significantly, from U.S. standards in important respects,
and less information may be available to investors in securities
of Greater China country issuers than to investors in securities
of U.S. issuers.

Investment in Greater China companies which are in the initial
stages of their development involves greater risk than is
customarily associated with securities of more established
companies. The securities of such companies may have relatively
limited marketability and may be subject to more abrupt or
erratic market movements than securities of established companies
or broad market indices.

A-6

<PAGE>

THE ALLIANCE STOCK FUNDS

ADVISOR CLASS

PROSPECTUS

FEBRUARY 1, 1999

DOMESTIC STOCK FUNDS

-ALLIANCE PREMIER GROWTH FUND
-ALLIANCE GROWTH FUND
-ALLIANCE TECHNOLOGY FUND
-ALLIANCE QUASAR FUND
-THE ALLIANCE FUND

TOTAL RETURN FUNDS

-ALLIANCE GROWTH AND INCOME FUND
-ALLIANCE BALANCED SHARES
-ALLIANCE UTILITY INCOME FUND
-ALLIANCE REAL ESTATE INVESTMENT FUND

GLOBAL STOCK FUNDS

The Alliance Stock Funds provide a broad selection of
investment alternatives to investors seeking capital
growth or high total return.

The Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

<PAGE>

TABLE OF CONTENTS

PAGE

EXPENSE INFORMATION.....................................

GLOSSARY................................................

DESCRIPTION OF THE FUNDS................................
.....Investment Objectives and Policies.............

Description of Investment Practices.................
Additional Risk Considerations......................

MANAGEMENT OF THE FUND..................................

DIVIDENDS, DISTRIBUTIONS AND TAXES......................

CONVERSION FEATURE......................................

GENERAL INFORMATION.....................................

FINANCIAL HIGHLIGHTS....................................

<PAGE>

RISK/RETURN SUMMARY

-- how the Fund's average annual returns for one, five and
10 years (or life of the Fund) compare to those of a
broad based securities market index; and

-- changes in the Fund's performance from year to year over
10 years or, if shorter, the life of the Fund.

A Fund's past performance, of course, does not necessarily
indicate how it will perform in the future.

Other important things for you to note:

-- You may gain or lose money by investing in the Funds.

-- An investment in the Funds is not a deposit in a bank
and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.

<PAGE>

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index

<PAGE>

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Premier Growth Fund from 1992 through 1998:]

YEAR ANNUAL RETURN

1992* 9.29%
1993 9.98%
1994 -5.80%
1995 46.87%
1996 24.14%
1997 32.67%
1998

* Cumulative return since inception (9/28/92).

Best Quarter was: up ____%, ________ quarter, 19__
Worst Quarter was: down ____%, _______quarter, 19__

ALLIANCE GROWTH FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital. Current income is incidental to the
Fund's objective.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %*
Class B % % %
Class C % % N/A
S&P 500 Index

<PAGE>

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Growth Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -0.22%
1991 63.61%
1992 10.67%
1993 28.99%
1994 -1.15%
1995 29.49%
1996 23.20%
1997 27.09%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE TECHNOLOGY FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation. Current income is
incidental to the Fund's objective.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in securities of companies expected to benefit
from technological advances and improvements (I.E.,
companies that use technology extensively in the
development of new or improved products or processes).
Within this framework, the Fund may invest in any
company and industry and in any type of security with
potential for capital appreciation. It invests in
well-known, established companies or in new or
unseasoned companies. The Fund also may invest in debt
securities and up to 10% of its total assets in foreign
securities.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Technology Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 5.99%
1990 -3.08%
1991 54.24%
1992 15.60%
1993 21.63%
1994 28.50%
1995 45.80%
1996 19.41%
1997 4.54%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE QUASAR FUND

-- OBJECTIVE: The Fund's investment objective is growth
through capital appreciation by pursuing aggressive
investment policies. Current income is incidental to
the Fund's objective.

<PAGE>

established companies and in new and unseasoned
companies. When selecting securities, Alliance
considers the economic and political outlook, the values
of specific securities relative to other investments,
trends in the determinants of corporate profits, and
management capabilities and practices. The Fund also
may invest in non-convertible bonds, preferred stocks,
and foreign securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % N/A
Class C % % N/A
Russell 2000 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Quasar Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 28.20%
1990 -23.44%
1991 34.27%
1992 2.81%
1993 16.16%
1994 -7.27%
1995 47.64%
1996 32.62%
1997 17.24%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
growth of capital and income primarily through
investments in common stocks.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of The
Alliance Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 23.42%
1990 -4.36%
1991 33.91%
1992 14.70%
1993 14.26%
1994 -2.51%
1995 34.84%
1996 17.54%
1997 36.01%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

<PAGE>

TOTAL RETURN FUNDS

The Total Return Funds offer investors both growth of capital and
current income through a range of investment alternatives.

ALLIANCE GROWTH & INCOME FUND

-- OBJECTIVE: The Fund's investment objective is capital
appreciation and income through investments in dividend-
paying common stocks of good quality, although the Fund
also may invest in fixed-income and convertible
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Growth And Income Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 25.56%
1990 -1.70%
1991 27.08%
1992 4.52%
1993 9.96%
1994 -4.20%
1995 37.86%
1996 24.13%
1997 28.86%
1998

You should consider an investment in the Fund as a long-term
investment. The Fund's returns will, however, fluctuate over

<PAGE>

shorter periods. For example, during the period shown in the bar
chart, the Fund's:

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE BALANCED SHARES

-- OBJECTIVE: The Fund's investment objective is high
return by investing in a combination of equity and debt
securities.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
S&P 500 Index
Lehman Brothers
Government/Corporate
Bond Index
Salomon Brothers 1-Year
Treasury Bond Index

Bar Chart

<PAGE>

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Balanced Shares from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 14.13%
1990 -2.20%
1991 20.47%
1992 6.81%
1993 9.93%
1994 -5.79%
1995 26.64%
1996 9.36%
1997 27.13%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE UTILITY INCOME FUND

-- OBJECTIVE: The Fund's investment objective is current
income and capital appreciation through investments in
equity and fixed-income securities of companies in the
utilities industry.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % N/A
Class B % % N/A
Class C % % N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Utility Income Fund from 1993 through 1998:]

YEAR ANNUAL RETURN

1993* 4.42%
1994 -10.94%
1995 22.93%
1996 8.28%
1997 30.65%
1998

* Cumulative return since inception (10/18/93).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE REAL ESTATE INVESTMENT FUND

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests
primarily in equity securities of real estate investment
trusts or "REITs" and other real estate industry
companies. The Fund invests in real estate companies
that Alliance believes have strong property fundamentals
and management teams. The Fund seeks to invest in real
estate companies whose underlying portfolios are

<PAGE>

diversified geographically and by property type. The
Fund may invest up to 35% of its total assets in
mortgage-backed securities, which are securities that
directly or indirectly represent participations in or
are collateralized by and payable from, mortgage loans
secured by real property.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A %
Class B %
Class C %
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Real Estate Investment Fund from 1996 through 1998:]

YEAR ANNUAL RETURN

1996* 20.29%
1997 22.98%
1998

* Cumulative return since inception (10/1/96).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors seeking long-term capital
appreciation a range of alternative approaches to investing in
foreign securities.

ALLIANCE NEW EUROPE FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investments primarily in
the equity securities of companies based in Europe.

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR 5 YEARS INCEPTION

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
New Europe Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -11.92%
1991 3.31%
1992 -0.53%
1993 34.56%
1994 4.64%
1995 18.63%
1996 20.58%
1997 16.83%
1998

* Cumulative return since inception (4/2/90).

Best Quarter was: up ___%, ______quarter, 19__

<PAGE>

Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE WORLDWIDE PRIVATIZATION FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

The Fund diversifies its investments among a number of
countries and normally invests in issuers based in four,
and usually considerably more, countries. The Fund may
invest up to 30% of its assets in any one of France,
Germany, Great Britain, Italy, and Japan and may invest
all of its assets in a single world region. The fund
also may invest up to 35% of its total assets in debt
securities and convertible debt securities of privatized
companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI EAFE Index

Bar Chart

<PAGE>

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Worldwide Privatization Fund from 1994 through 1998:]

YEAR ANNUAL RETURN

1994* -0.20%
1995 4.91%
1996 23.14%
1997 13.18%
1998

* Cumulative return since inception (6/2/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

<PAGE>

portfolio positions. To the extent consistent with
local market liquidity considerations, the Fund strives
to capitalize on apparently unwarranted price
fluctuations, both to purchase or increase positions on
weakness and to sell or reduce overpriced holdings. The
Fund invests primarily in equity securities and also may
invest in convertible securities.

PERFORMANCE INFORMATION AND BAR CHART

There is no bar chart for the Fund because it has not
completed a full calendar year of operations. The performance
information below is for the first six months of the Fund's
operations.

PERFORMANCE TABLE

6 MONTHS

Class A
Class B
Class C
MSCI World Index

ALLIANCE GLOBAL SMALL CAP FUND

<PAGE>

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Global Small Cap Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 24.60%
1990 -24.89%
1991 25.29%
1992 -4.89%
1993 20.04%
1994 -4.55%
1995 27.18%
1996 19.37%
1997 8.08%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE INTERNATIONAL FUND

-- OBJECTIVE: The Fund's investment objective is total
return from long-term growth of capital and income
through diversified investments in non-U.S. companies.

<PAGE>

although it may invest a substantial portion of its
assets in one or more foreign countries.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % % %
Class C % % %
MSCI World Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
International Fund from 1989 through 1998:]

YEAR ANNUAL RETURN

1989 29.62%
1990 -20.95%
1991 7.72%
1992 -5.86%
1993 27.51%
1994 5.68%
1995 10.10%
1996 7.20%
1997 1.41%
1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GREATER CHINA '97 FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of at least 80%
of its total assets in equity securities of Greater
China companies.

-- PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in
equity securities of Greater China companies, which are
companies in China, Hong Kong, and Taiwan. Of these
countries, the Fund expects to invest a significant

<PAGE>

portion of its assets, which may be greater than 50%, in
Hong Kong companies and may invest all of its assets in
Hong Kong companies or companies of either of the other
Greater China countries. The Fund may also invest in
convertible securities and equity-linked debt securities
issued or guaranteed by Greater China companies or
Greater China Governments, their agencies, or
instrumentalities. As of December 31, 1998 the Fund
had approximately ___% of its assets invested in
securities of Hong Kong companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A
Class B
Class C
MSCI All Country Asia
Pacific

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Greater China '97 Fund for 1998:]

YEAR ANNUAL RETURN

1998

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE ALL-ASIA INVESTMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation.

<PAGE>

and may invest more than 50% of its total assets in
equity securities of Japanese issuers. The Fund also
may invest up to 35% of its total assets in debt
securities issued or guaranteed by Asian companies or by
Asian governments, their agencies or instrumentalities,
and may invest up to 25% of its net assets in
convertible securities. At December 31, 1998, the Fund
had approximately ___% of its total assets invested in
securities of Japanese companies.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

SINCE
1 YEAR INCEPTION

Class A % %
Class B % %
Class C % %
MSCI All Country Asia
Pacific Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
All-Asia Investment Fund from 1994 through 1998:]

YEAR ANNUAL RETURN

1994* 0.10%
1995 10.21%
1996 4.58%
1997 -35.10%
1998

* Cumulative return since inception (11/28/94).

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

ALLIANCE GLOBAL ENVIRONMENT FUND

-- OBJECTIVE: The Fund's investment objective is long-term
capital appreciation through investment of substantially

<PAGE>

all of its assets in equity securities of companies in
the environmental sector.

PERFORMANCE INFORMATION AND BAR CHART

PERFORMANCE TABLE

1 YEAR 5 YEARS 10 YEARS

Class A % % %
Class B % N/A N/A
Class C N/A N/A N/A
S&P 500 Index

Bar Chart

[GRAPHIC - A bar chart illustrates the annual returns of Alliance
Global Environment Fund from 1990 through 1998:]

YEAR ANNUAL RETURN

1990* -5.48%
1991 6.17%
1992 -15.33%
1993 -0.44%
1994 -2.12%
1995 19.30%
1996 31.60%
1997 18.73%
1998

* Cumulative return since inception (6/1/90).

<PAGE>

Best Quarter was: up ___%, ______quarter, 19__
Worst Quarter was: down ___%, ______quarter, 19__

SUMMARY OF PRINCIPAL RISKS

- PARTICULAR INDUSTRIES: Technology Fund, Global
Environment Fund, Utility Income Fund, and Real
Estate Investment.

- TYPES OF ISSUERS: Alliance Fund and Growth Fund
(medium capitalization or mid-cap companies),
technology Fund (companies using new technology),
Worldwide Privatization Fund (companies converting
to private sector ownership), and Global Small Cap
Fund (smaller, less seasoned companies or small cap
companies).

<PAGE>

- COUNTRIES OR GEOGRAPHIC REGIONS: International
Fund, Worldwide Privatization Fund, New Europe
Fund, All-Asia Investment Fund, and Greater China
'97 Fund.

<PAGE>

of foreign countries differ, in some cases
significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation,
currency blockage, or political changes or diplomatic
developments could adversely affect a Fund's investments
in a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose
its entire investment.

<PAGE>

PRINCIPAL RISKS BY FUND

The following chart summarizes the Principal Risks of each Fund.
Risks not marked for a particular Fund may, however, still apply
to some extent to that fund at various times.

INTEREST FOCUSED ALLO-
MARKET RATE CREDIT FOREIGN CURRENCY MANAGEMENT PORTFOLIO CATION
FUND RISK RISK RISK RISK RISK RISK RISK RISK

ALLIANCE
FUND X X

ALLIANCE
GROWTH
FUND X X

ALLIANCE
PREMIER
GROWTH
FUND X X X

ALLIANCE
TECHNOLOGY
FUND X X

ALLIANCE
QUASAR
FUND X X

ALLIANCE
INTERNATIONAL
FUND X X X X

ALLIANCE
INTERNATIONAL
PREMIER
GROWTH
FUND X X X X X

ALLIANCE
WORLDWIDE
PRIVATIZATION
FUND X X X X

ALLIANCE
NEW EUROPE
FUND X X X X

<PAGE>

ALLIANCE
ALL-ASIA
INVESTMENT
FUND X X X X

ALLIANCE
GREATER
CHINA
'97 FUND X X X X X

ALLIANCE
GLOBAL
SMALL CAP
FUND X X X X

ALLIANCE
GLOBAL
ENVIRONMENT
FUND X X X X

ALLIANCE
BALANCED
SHARES X X X X X

ALLIANCE
UTILITY
INCOME
FUND X X X X X X

ALLIANCE
GROWTH AND
INCOME
FUND X X X X X X

ALLIANCE
REAL ESTATE
INVESTMENT
FUND X X X

EXPENSE INFORMATION

This table describes the fees and expenses that you may pay if
you buy and hold shares of the Funds.

<PAGE>

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)

ADVISOR
CLASS
SHARES

Maximum Deferred Sales Charge
(Load) (as a percentage of original
purchase price or redemption
proceeds, whichever is lower) None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) AND EXAMPLE

OPERATING EXPENSES EXAMPLES

PREMIER GROWTH Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

GROWTH Advisor Class Advisor Class

Management Fees .74% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

TECHNOLOGY Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $

<PAGE>

Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

QUASAR Advisor Class Advisor Class

Management Fees 1.16% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

ALLIANCE FUND Advisor Class Advisor Class

Management Fees .68% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

GROWTH AND INCOME Advisor Class Advisor Class

Management Fees .49% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

BALANCED SHARES Advisor Class Advisor Class

Management Fees .63% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

UTILITY INCOME Advisor Class Advisor Class

Management Fees 0% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

<PAGE>

REAL ESTATE
INVESTMENT Advisor Class Advisor Class

Management Fees .90% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

NEW EUROPE Advisor Class Advisor Class

Management Fees 1.02% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

WORLDWIDE
PRIVATIZATION Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

INTERNATIONAL PREMIER
GROWTH Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GLOBAL SMALL CAP Advisor Class Advisor Class

Management Fees 1.00% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

<PAGE>

INTERNATIONAL Advisor Class Advisor Class

Management Fees .85% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GREATER CHINA '97 Advisor Class Advisor Class

ALL-ASIA INVESTMENT Advisor Class Advisor Class

Management Fees .65% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Administration Fees
Total Fund Operating
Expenses % After 10 Yrs. $
Waiver and/or Expense
Reimbursement + %
Net Expenses %

GLOBAL ENVIRONMENT Advisor Class Advisor Class

Management Fees 1.10% After 1 Yr. $
12b-1 Fees None After 3 Yrs. $
Other Expenses % After 5 Yrs. $
Total Fund Operating
Expenses % After 10 Yrs. $
Net Expenses %

+ Reflects Alliance's waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating
expenses. The level of waiver or reimbursement may be
changed upon 60 days' notice to the Fund.

<PAGE>

GLOSSARY

This Prospectus uses the following terms.

TYPES OF SECURITIES

CONVERTIBLE SECURITIES are fixed-income securities that are
convertible into common stock.

DEBT SECURITIES are bonds, debentures, notes, bills, loans, other
direct debt instruments, and other fixed, floating and variable
rate debt obligations, but do not include convertible securities.

DEPOSITARY RECEIPTS include American Depositary Receipts
("ADRS"), Global Depositary Receipts ("GDRS") and other types of
depositary receipts.

FIXED-INCOME SECURITIES are debt securities and dividend-paying
preferred stocks and include floating rate and variable rate
instruments.

RULE 144A SECURITIES are securities that may be resold under Rule
144A under the Securities Act.

U.S. GOVERNMENT SECURITIES are securities issued or guaranteed by
the United States Government, its agencies or instrumentalities.

TYPES OF COMPANIES

<PAGE>

ELIGIBLE COMPANIES are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.

GREATER CHINA COUNTRIES are the People's Republic of China
("China"), the Hong Kong Special Administrative Region of the
People's Republic of China ("Hong Kong") and the Republic of
China ("Taiwan").

<PAGE>

RATING AGENCIES, RATED SECURITIES, AND INDEXES

DUFF & PHELPS is Duff & Phelps Credit Rating Co.

EAFE INDEX is Morgan Stanley Capital International Europe,
Australasia and Far East ("EAFE") Index.

FITCH is Fitch IBCA, Inc.

INVESTMENT GRADE SECURITIES are fixed-income securities rated Baa
and above by Moody's or B and above by S&P, Duff & Phelps or
Fitch, or determined by Alliance to be of equivalent quality.

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

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

S&P 500 INDEX is S&P's 500 Composite Stock Price Index, a widely
recognized unmanaged index of market activity.

OTHER

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.

EXCHANGE is the New York Stock Exchange.

SECURITIES ACT is the Securities Act of 1933, as amended.

_______________________________________________________________

DESCRIPTION OF THE FUNDS
_______________________________________________________________

<PAGE>

Please note that:

- -- Additional discussion of the Funds' investments, including
the risks of the investments, can be found in the discussion
under DESCRIPTION OF INVESTMENT PRACTICES following this
section.

- -- Additional descriptions of each Fund's strategies,
investments, and risks can be found in the Fund's Statement
of Additional Information or SAI.

INVESTMENT OBJECTIVES AND POLICIES

DOMESTIC STOCK FUNDS

The Domestic Stock Funds offer investors seeking capital
appreciation a range of alternative approaches to investing in
the U.S. equity markets.

ALLIANCE PREMIER GROWTH FUND

Alliance's investment strategy for the Fund emphasizes stock
selection and investment in the securities of a limited number of

<PAGE>

The Fund also may:

- -- invest up to 20% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
it;

- -- invest up to 5% of its net assets in rights or warrants;

- -- invest up to 15% of its total assets in securities of foreign
issuers whose common stocks are eligible for purchase by it;

- -- purchase and sell exchange-traded index options and stock
index futures contracts; and

Because the Fund invests in a smaller number of securities than
many other equity funds, your investment also has the risk that

<PAGE>

changes in the value of a single security may have a more
significant effect, either negative or positive, on the Fund's
net asset value.

ALLIANCE GROWTH FUND

The Fund also may:

- -- invest in zero-coupon and payment-in-kind bonds;

- -- invest in foreign securities although not generally in excess
of 15% of its total assets;

- -- buy or sell foreign currencies, options on foreign
currencies, foreign currency futures contracts (and related
options) and deal in forward foreign exchange contracts;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to 25% of its total
assets;

- -- purchase and sell securities on a forward commitment basis;

- -- buy and sell stock index futures contracts and options on
those contracts and on stock indices;

<PAGE>

- -- purchase and sell futures contracts and options on futures
and U.S. Treasury securities;

- -- write covered call and put options; and

- -- purchase and sell put and call options.

ALLIANCE TECHNOLOGY FUND

The Fund also may:

- -- invest up to 10% of its total assets in warrants; and

- -- make loans of portfolio securities of up to 30% of its total
assets.

<PAGE>

ALLIANCE QUASAR FUND

The Fund also may:

- -- make short sales of securities against the box but not more
than 15% of its net assets may be deposited on short sales;
and

- -- write covered call options of up to 15% of its total assets
and purchase and sell put and call options written by others
of up to, for all options, 10% of its total assets.

THE ALLIANCE FUND

<PAGE>

The Fund also may:

- -- write exchange-traded covered call options on up to 25% of
its total assets;

- -- make secured loans of portfolio securities equal in value up
to 25% of its total assets to brokers, dealers and financial
institutions;

TOTAL RETURN FUNDS

The Total Return Funds provide a range of investment alternatives
to investors seeking both growth of capital and current income.

ALLIANCE GROWTH AND INCOME FUND

<PAGE>

ALLIANCE BALANCED SHARES

The Fund also may:

- -- enter into contracts for the purchase or sale for future
delivery of foreign currencies;

- -- purchase and write put and call options on foreign currencies
and enter into forward foreign currency exchange contracts
for hedging purposes

- -- subject to market conditions, write covered call options
listed on a domestic exchange to realize income.

ALLIANCE UTILITY INCOME FUND

<PAGE>

The utilities industry consists of companies engaged in:

The Fund also may:

- -- invest up to 30% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

<PAGE>

- -- invest up to 5% of its net assets in rights or warrants;

- -- purchase and sell exchange-traded options on any securities
index composed of the types of securities in which it may
invest;

- -- purchase and write call and put options on foreign currencies
traded on U.S. and foreign exchanges or over-the-counter for
hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities of up to 20% of
its total assets.

<PAGE>

ALLIANCE REAL ESTATE INVESTMENT FUND

In selected Real Estate Equity Securities, Alliance's analysis
will focus on determining the degree to which the company

<PAGE>

desirable markets across the country, diversified geographically
and by property type.

The Fund may invest in short-term investments including:
corporate commercial paper and other short-term commercial

<PAGE>

The Fund also may:

- -- invest up to 10% of its net assets in rights or warrants;

- -- invest up to 15% of its net assets in convertible securities
of companies whose common stocks are eligible for purchase by
the Fund;

- -- make loans of portfolio securities of up to 25% of its total
assets;

- -- enter into repurchase agreements of up to seven days'
duration;

- -- enter into forward commitment transactions as long as the
Fund's aggregate commitments under such transactions are not
more than 30% of the Fund's total assets;

- -- enter into standby commitment agreements; and

<PAGE>

limited diversification, and could be significantly affected by
changes in tax laws.

GLOBAL STOCK FUNDS

The Global Stock Funds offer investors the opportunity to
participate in the potential for long-term capital appreciation
available from investment in foreign securities.

ALLIANCE NEW EUROPE FUND

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants and rights
to purchase equity securities of European companies;

- -- purchase and sell forward contracts;

- -- write covered call or put options and sell and purchase
exchange-traded put and call options, including exchange-
traded index options;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make secured loans of portfolio securities of up to 30% of
its total assets;

- -- enter into forward commitments for the purchase or sale of
securities; and

- -- enter into standby commitment agreements.

<PAGE>

ALLIANCE WORLDWIDE PRIVATIZATION FUND

<PAGE>

The Fund may invest all of its assets within a single region of
the world.

The Fund also may:

- -- invest up to 20% of its total assets in rights or warrants;

<PAGE>

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position;
and

- -- make secured loans of portfolio securities equal in value of
up to 30% of its total assets to entities with which it can
enter into repurchase agreements.

ALLIANCE INTERNATIONAL PREMIER GROWTH FUND

<PAGE>

there is, of course, no assurance that the Fund's investment
objective will be met.

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in convertible
securities of issuers whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its total assets in rights or warrants;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

<PAGE>

- -- purchase or sell forward contracts;

- -- enter into standby commitment agreements;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain short positions of
no more than 5% of its net assets as collateral for short
sales; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

ALLIANCE GLOBAL SMALL CAP FUND

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts or other securities
representing securities of companies based in countries other
than the U.S.;

- -- purchase or sell forward foreign currency contracts;

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

The Fund's investments in non-U.S. companies and in smaller
companies will be more volatile and may differ substantially from
the overall market.

ALLIANCE INTERNATIONAL FUND

<PAGE>

principal activities and interests outside the U.S., and foreign
government securities. Normally, the Fund will invest more than
80% of its assets in these types of companies.

The Fund also may:

- -- purchase or sell forward foreign currency exchange contracts;

- -- write covered call or put options, sell and purchase U.S. or
foreign exchange-listed put and call options, including
exchange-traded index options;

- -- purchase and write put options on foreign currencies traded
on securities exchanges or boards of trade or over-the-
counter;

- -- make loans of portfolio securities equal in value up to 30%
of its total assets; and

- -- enter into repurchase agreements of up to seven days'
duration of up to 10% of the Fund's total assets.

<PAGE>

ALLIANCE GREATER CHINA '97 FUND, INC.

<PAGE>

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

<PAGE>

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 20% of its net assets in loans and other direct
debt securities;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of
U.S. Government securities, securities issued by foreign
government entities, or common stock, and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. Government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

All or some of the policies and practices listed above may not be
available to the Fund in the Greater China countries and the Fund
will utilize these policies only to the extent permissible.

<PAGE>

ALLIANCE ALL-ASIA INVESTMENT FUND

<PAGE>

The Fund also may:

- -- invest up to 25% of its net assets in the convertible
securities of companies whose common stocks are eligible for
purchase by the Fund;

- -- invest up to 20% of its net assets in rights or warrants;

- -- invest in depositary receipts, instruments of supranational
entities denominated in the currency of any country,
securities of multinational companies and "semi-governmental
securities;"

- -- invest up to 25% of its net assets in equity-linked debt
securities with the objective of realizing capital
appreciation;

- -- invest up to 25% of its net assets in loans and other direct
debt instruments;

- -- write covered call and put options, sell or purchase
exchange-traded index options, and write uncovered options
for cross-hedging purposes;

- -- enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of

<PAGE>

U.S. Government securities, securities issued by foreign
government entities, or common stock and may purchase and
write options on future contracts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- purchase or sell forward contracts;

- -- enter into interest rate swaps and purchase or sell interest
rate caps and floors;

- -- enter into forward commitments for the purchase or sale of
securities;

- -- enter into standby commitment agreements;

- -- enter into currency swaps for hedging purposes;

- -- enter into repurchase agreements for U.S. government
securities;

- -- make short sales of securities or maintain a short position,
in each case only if against the box; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

ALLIANCE GLOBAL ENVIRONMENT FUND

The Fund invests in two categories of Eligible Companies --
Environmental Companies and Beneficiary Companies. The Fund may

<PAGE>

The Fund also may:

- -- invest up to 20% of its total assets in warrants to purchase
equity securities;

- -- invest in depositary receipts;

- -- purchase and write put and call options on foreign currencies
for hedging purposes;

- -- enter into forward foreign currency transactions for hedging
purposes;

- -- invest in currency futures and options on such futures for
hedging purposes; and

- -- make secured loans of portfolio securities of up to 30% of
its total assets.

DESCRIPTION OF INVESTMENT PRACTICES

<PAGE>

institution affiliated or unaffiliated with the trustee or
originator of the trust.

<PAGE>

such securities. Investment in equity-linked debt securities may
be considered to be speculative.

<PAGE>

forward contracts will be limited to hedging involving either
specific transactions or portfolio positions. GROWTH FUND also
may also purchase and sell foreign currency on a spot basis.

<PAGE>

In purchasing an option, a Fund would be in a position to realize
a gain if, during the option period, the price of the underlying
security increased (in the case of a call) or decreased (in the

<PAGE>

case of a put) by an amount in excess of the premium paid;
otherwise the Fund would experience a loss equal to the premium
paid for the option.

Options purchased or written by a Fund in negotiated transactions
are illiquid and it may not be possible for the Fund to effect a
closing transaction at an advantageous time.

<PAGE>

contract was originally struck. No physical delivery of the
securities underlying the index is made.

<PAGE>

FUTURE DEVELOPMENTS. A Fund may, following written notice to its
shareholders, take advantage of other investment practices that

<PAGE>

ADDITIONAL RISK CONSIDERATIONS

Investment in certain of the Funds involves the special
risk considerations described below. These risks may be
heightened when investing in emerging markets.

<PAGE>

expenses in the currency at the time they were incurred. In
light of these risks, a Fund may engage in currency hedging
transactions, as described above, which involve certain special
risks.

<PAGE>

may be made substantially earlier than their final distribution
dates.

<PAGE>

the Fund's portfolio of debt or other fixed-income securities may
be extended as a result of lower than anticipated prepayment
rates.

Certain lower-rated may contain call or buy-back features that
permit the issuers thereof to call or repurchase such securities.
Such securities may present risks based on prepayment

<PAGE>

expectations. If an issuer exercises such a provision, a Fund
may have to replace the called security with a lower-yielding
security, resulting in a decreased rate of return to the Fund.

<PAGE>

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Each Fund's Adviser is Alliance Capital Management, L.P., 1345
Avenue of the Americas, New York, NY 10105. Alliance is a
leading international investment adviser supervising client
accounts with assets as of December 31, 1998 totaling more than
$___ billion (of which approximately $__ billion represented
assets of investment companies). Alliance's clients are
primarily major corporate employee benefit plans, public employee
retirement systems, investment companies, foundations, and
endowment funds. The __ registered investment companies, with
more than ___ separate portfolios, managed by Alliance currently
have over two million shareholders. As of December 31, 1998,
Alliance was retained as investment manager for over [ ] of the
Fortune 100 Companies.

Alliance provides investment advisory services and order
placement facilities for the Funds. For these advisory services,
the Funds paid Alliance as a percentage of net assets:

FEE AS A PERCENTAGE FISCAL YEAR
FUND OF NET ASSETS* ENDING

* Fees are stated net of waivers and/or reimbursements. See
the "Fee Table" at the beginning of the Prospectus for more
information about fee waivers.

In connection with providing advisory services to GREATER CHINA
'97 FUND, Alliance has, at its expense, retained as a consultant
New Alliance, a joint venture company headquartered in Hong Kong,
which was formed in 1997 by Alliance and Sun Hung Kai Properties

<PAGE>

Limited. New Alliance provides Alliance with ongoing, current,
and comprehensive information and analysis of conditions and
developments in Greater China countries.

PORTFOLIO MANAGER

EMPLOYEE; PRINCIPAL OCCUPATION
YEAR; DURING THE PAST
FUND TITLE (5) YEARS

Premier Growth Alfred Harrison; since Associated with Alliance
inception-Vice Chairman of
Alliance Capital Management
Corporation (ACMC)

Growth Tyler Smith; since inception- Associated with Alliance
Senior Vice President of ACMC

Technology Peter Anastos; since 1992- Associated with Alliance
Senior Vice President of ACMC
Gerald T. Malone; since 1992-
Senior Vice President of ACMC

Quasar Alden M. Stewart since 1994- Associated with Alliance
Executive Vice President of
ACMC*
Randall E. Haase since 1994- Associated with Alliance
Senior Vice President of ACMC

Alliance Fund Alden M. Stewart; since 1997- (see above)
(see above)
Randall E. Haase; since 1997- (see above)
(see above)

Growth & Income Paul Rissman; since 1994- Associated with Alliance
Senior Vice President of ACMC

Balanced Shares Paul Rissman since 1997- (see above)

<PAGE>

(see above)

Utility Income Paul Rissman since 1996- (see above)
(see above)

Real Estate Daniel G. Pine, since 1996- Associated with Alliance
Investment Senior Vice President of since 1996; prior thereto;
ACMC Senior Vice President of
Desai Capital Management
David Kruth; since 1997- Associated with Alliance
Vice President of ACMC since 1997; prior thereto;
Senior Vice President of
Yarmouth Group

New Europe Steven Beinhacker; since Associated with Alliance
1997-Vice President of ACMC

Worldwide Mark H. Breedon; since Associated with Alliance
Privatization inception Senior Vice
President of ACMC and Director
and Vice President of Alliance
Capital Limited**

International Alfred Harrison; since 1998- (see above)
Premier Growth (see above)
Thomas Kamp since 1998- Associated with Alliance
Senior Vice President of ACMC

Global Small Cap Alden M. Stewart; since 1994- (see above)
(see above)
Randall E. Haase; since 1994- (see above)
(see above)
Ronald L. Simcoe; since 1993- Associated with Alliance
Vice President of ACMC

International Bruce W. Calvert; since 1998- Associated with Alliance
Vice Chairman and Chief
Investment Officer of ACMC

Greater China '97 Matthew W.S. Lee; since 1997- Associated with Alliance
Vice President of ACMC since 1997; prior thereto;
associated with National
Mutual Funds Management
(Asia) and James Capel and
Co. since prior to 1994

All-Asia Investment Hiroshi Motoki; since 1998- Associated with Alliance
Senior Vice President of since 1994; prior thereto;
ACMC and director of associated with Ford Motor
Japanese/Asian Equity Company
research

<PAGE>

Global Environment Linda Bolton Weiser; since Associated with Alliance
1998- Vice President of ACMC

* The sole general partner of Alliance.
** An indirect wholly-owned subsidiary of Alliance.

PERFORMANCE OF SIMILARLY MANAGED PORTFOLIOS. In addition to
managing the assets of PREMIER GROWTH FUND, Mr. Harrison has
ultimate responsibility for the management of discretionary tax-
exempt accounts of institutional clients managed as described
below without significant client-imposed restrictions
("Historical Portfolios"). These accounts have substantially the
same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and
techniques as those for PREMIER GROWTH FUND, except for the
ability of PREMIER GROWTH FUND to use futures and options as
hedging tools and to invest in warrants. The Historical
Portfolios are also not subject to certain limitations,
diversification requirements and other restrictions imposed under
the 1940 Act and the Code to which PREMIER GROWTH FUND, as a
registered investment company, is subject and which, if
applicable to the Historical Portfolios, may have adversely
affected the performance results of the Historical Portfolios.
See "Investment Objective and Policies."

Set forth below is performance data provided by Alliance relating
to the Historical Portfolios for each of the nineteen full
calendar years during which Mr. Harrison has managed the
Historical Portfolios as an employee of Alliance and cumulatively
through September 30, 1998. As of September 30, 1998, the assets
in the Historical Portfolios totaled approximately $[ ] billion
and the average size of an institutional account in the
Historical Portfolio was $[ ] million. Each Historical
Portfolio has a nearly identical composition of investment
holdings and related percentage weightings.

The performance data is net of all fees (including brokerage
commissions) charged to those accounts. The performance data is
computed in accordance with standards formulated by the
Association of Investment Management and Research and has not
been adjusted to reflect any fees that will be payable by PREMIER
GROWTH FUND, which are higher than the fees imposed on the
Historical Portfolio and will result in a higher expense ratio
and lower returns for PREMIER GROWTH FUND. Expenses associated
with the distribution of Class A, Class B and Class C shares of
PREMIER GROWTH FUND in accordance with the plan adopted by
PREMIER GROWTH FUND's Board of Directors pursuant to Rule 12b-1
under the 1940 Act ("distribution fees") are also excluded. See
"Expense Information." The performance data has also not been
adjusted for corporate or individual taxes, if any, payable by
the account owners.

<PAGE>

As reflected below, the Historical Portfolios have over time
performed favorably when compared with the performance of
recognized performance indices. The S&P 500 Index is a widely
recognized, unmanaged index of market activity based upon the
aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The S&P 500
Index reflects the total return of securities comprising the
Index, including changes in market prices as well as accrued
investment income, which is presumed to be reinvested. The
Russell 1000 universe of securities is compiled by Frank Russell
Company and is segmented into two style indices, based on the
capitalization-weighted median book-to-price ratio of each of the
securities. At each reconstitution, the Russell 1000 constituents
are ranked by their book-to-price ratio. Once so ranked, the
breakpoint for the two styles is determined by the median market
capitalization of the Russell 1000. Thus, those securities
falling within the top fifty percent of the cumulative market
capitalization (as ranked by descending book-to-price) become
members of the Russell Price-Driven Indices. The Russell 1000
Growth Index is, accordingly, designed to include those Russell
1000 securities with a greater-than-average growth orientation.
In contrast with the securities in the Russell Price-Driven
Indices, companies in the Growth Index tend to exhibit higher
price-to-book and price-earnings ratios, lower dividend yield and
higher forecasted growth values.

To the extent PREMIER GROWTH FUND does not invest in U.S. common
stocks or utilizes investment techniques such as futures or
options, the S&P 500 Index and Russell 1000 Growth Index may not
be substantially comparable to PREMIER GROWTH FUND. The S&P 500
Index and Russell 1000 Growth Index are included to illustrate
material economic and market factors that existed during the time
period shown. The S&P 500 Index and Russell 1000 Growth Index do
not reflect the deduction of any fees. If PREMIER GROWTH FUND
were to purchase a portfolio of securities substantially
identical to the securities comprising the S&P 500 Index or the
Russell 1000 Growth Index, PREMIER GROWTH FUND's performance
relative to the index would be reduced by PREMIER GROWTH FUND's
expenses, including brokerage commissions, advisory fees,

<PAGE>

distribution fees, custodial fees, transfer agency costs and
other administrative expenses, as well as by the impact on
PREMIER GROWTH FUND's shareholders of sales charges and income
taxes.

<PAGE>

SCHEDULE OF COMPOSITE INVESTMENT PERFORMANCE-
HISTORICAL PORTFOLIOS*

RUSSELL LIPPER
1000 GROWTH
HISTORICAL S&P 500 GROWTH FUND
PREMIER PORTFOLIOS INDEX INDEX INDEX
GROWTH TOTAL TOTAL TOTAL TOTAL
FUND RETURN** RETURN RETURN RETURN

Year ended December:
1998
1997*** 27.05% 34.64% 33.36% 30.49% 25.30%
1996*** 18.84 22.06 22.96 23.12 17.48
1995*** 40.66 39.83 37.58 37.19 32.65
1994 (9.78) (4.82) (1.32) (1.57)
1993 5.35 10.54 10.08 11.98
1992 --- 12.18 7.62 7.63
1991 --- 38.91 30.47 35.20
1990 --- (1.57) (3.10) (0.26) (5.00)
1989 --- 38.80 31.69 35.92 28.60
1988 --- 10.88 16.61 11.27 15.80
1987 -- 8.49 5.25 5.31 1.00
1986 --- 27.40 18.67 15.36 15.90
1985 --- 37.41 31.73 32.85 30.30
1984 --- (3.31) 6.27 (.95) (2.80)
1983 --- 20.80 22.56 15.98 22.30
1982 --- 28.02 21.55 20.46 20.20
1981 --- (1.09) (4.92) (11.31) (8.40)
1980 --- 50.73 32.50 39.57 37.30
1979 --- 30.76 18.61 23.91 27.40

Cumulative total
return for
the period
January 1, 1979 to
December 31, 1998 --- %

** Assumes imposition of the maximum advisory fee charged by
Alliance for any Historical Portfolio for the period
involved.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS

RUSSELL LIPPER
PREMIER S&P 1000 GROWTH
GROWTH HISTORICAL 500 GROWTH FUND
FUND PORTFOLIOS INDEX INDEX INDEX
% % % % %

One year
Three years
Five years
Ten years
Since January 1,
1979

__________________________

* Since inception on 9/28/92

The Funds' Statements of Additional Information has more detailed
information about Alliance and other Fund service providers.

PURCHASE AND SALE OF SHARES

HOW THE FUND VALUES ITS SHARES

The Funds' net asset value or NAV is calculated at 4 p.m. Eastern
time each day the Exchange is open for business. To calculate
NAV, a Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the
number of shares outstanding. The Funds' value their securities
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 Funds' directors believe accurately
reflect fair market value.

Your order for purchase, sale, or exchange of shares is priced at
the next NAV calculated after your order is accepted by the Fund.

HOW TO BUY SHARES

You may purchase Advisor Class shares through your financial
representative at NAV. Advisor Class shares are not subject to
any initial or contingent sales charges or distribution expenses.
You may purchase and hold shares solely:

100

<PAGE>

-- through accounts established under a fee-based program,
sponsored and maintained by a registered broker-dealer
or other financial intermediary and approved by the
Fund's principal underwriter, Alliance Fund
Distributors, Inc. or AFD;

-- through a self-directed defined contribution employee
benefit plan (e.g., a 401(k) plan) that has at least
1,000 participants or $25 million in assets;

-- by investment advisory clients of, and certain other
persons associated with, Alliance and its affiliates or
the Funds; and

-- through registered investment advisers or other
financial intermediaries who charge a management,
consulting or other fee for their services and who
purchase shares through a broker or agent approved by
AFD and clients of such registered investment advisers
or financial intermediaries whose accounts are linked to
the master account of such investment adviser or
financial intermediary on the books of such approved
broker or agent.

Generally, a fee-based program must charge an asset-based or
other similar fee and must invest at least $250,000 in Advisor
Class shares to be approved by AFD for investment in Advisor
Class shares. The Fund's Statement of Additional Information has
more detailed information about who may purchase and hold Advisor
Class shares.

A Fund may refuse any order to purchase Advisor Class shares. In
this regard, the Funds' reserve the right to restrict purchases
of Advisor Class shares (including through exchanges) when there
appears to be evidence a pattern of frequent purchases and sales
made in response to short-term considerations.

HOW TO EXCHANGE SHARES

You may exchange your Advisor Class shares for Advisor Class
shares of other Alliance Mutual Funds. Exchanges of Advisor
Class shares are made at the next-determined NAV without any
sales or service charge. You may request an exchange by mail or
telephone. You must call by 4:00 p.m. Eastern time to receive
that day's NAV. The Funds may change, suspend, or terminate the
exchange service on 60 days' written notice.

101

<PAGE>

HOW TO SELL SHARES

You may "redeem" your shares (i.e., sell your shares to a Fund)
on any day the NYSE is open, either directly or through your
financial intermediary. Your sales price will be the next-
determined NAV after the Fund receives your sales request in
proper form. Normally, proceeds will be sent to you within 7
days. If you recently purchased your shares by check or
electronic funds transfer, you cannot redeem any portion of it
until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up
to 15 days). If you are in doubt about what procedures or
documents are required by your fee-based program or employee
benefit plan to sell your shares, you should contact your
financial representative.

-- Selling Shares Through Your Financial Representative

Your financial representative must receive your sales request by
4:00 p.m., Eastern time, and submit it to the Fund by 5:00 p.m.,
Eastern time, for you to receive that day's NAV. Your financial
representative is responsible for submitting all necessary
documentation to the Fund and may charge you for this service.

-- Selling Shares Directly to the Fund

BY MAIL:

-- Send a signed letter of instruction or stock power,
along with certificates, to:

Alliance Fund Services
P.O. Box 1520
Secaucus, N.J. 07906-1520
800-221-5672

-- For your protection, a bank, a member firm of a national
stock exchange, or other eligible guarantor institution,
must guarantee signatures. 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.
If you have any questions about these procedures,
contact AFS.

BY TELEPHONE:

-- You may redeem your shares for which no stock
certificates have been issued by telephone request.

102

<PAGE>

Call AFS at 800-221-5672 with instructions on how you
wish to receive your sale proceeds.

-- A telephone redemption request must be received by
4:00 p.m. Eastern time for you to receive that day's
NAV.

-- If you have selected electronic funds transfer in your
Shareholder Application, the redemption proceeds may be
sent directly to your bank. Otherwise, the proceeds
will be mailed to you.

-- Redemption requests by electronic funds transfer may not
exceed $100,000 per day and redemption requests by check
cannot exceed $50,000 per day.

OTHER

If you are a Fund shareholder through an account established
under a fee-based program, your fee-based program may impose
requirements with respect to the purchase, sale, or exchange of
Advisor Class shares of a Fund that are different from those
described in this prospectus. A transaction, service,
administrative or other similar fee may be charged by your
broker-dealer, agent, financial intermediary or other financial
representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.
Such financial intermediaries may also impose requirements with
respect to the purchase, sale or exchange of shares that are
different from, or in addition to, those imposed by a Fund,
including requirements as to the minimum initial and subsequent
investment amounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

103

<PAGE>

to a record date for a dividend. There is no sales or other
charge in connection with the reinvestment of dividends or
capital gains distributions. Cash dividends may be paid in
check, or at your election, electronically via the ACH network.
There is no sales or other charge on the reinvestment of Fund
distributions.

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 dividend or distribution will depend on the realization by
the Fund of income and capital gains from investments. There is
no fixed dividend rate and there can be no assurance that a Fund
will pay any dividends or realize any capital gains. Since REITs
pay distributions based on cash flow, without regard to
depreciation and amortization, it is likely that a portion of the
distributions paid to REAL ESTATE INVESTMENT FUND and
subsequently distributed to shareholders may be a nontaxable
return of capital. The final determination of the amount of a
Fund's return of capital distributions for the period will be
made after the end of each calendar year.

104

<PAGE>

be permitted to claim a full credit or deduction for the amount
of such taxes.

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

The sale or exchange of Fund shares is a taxable transaction for
Federal income tax purposes.

105

<PAGE>

CONVERSION FEATURE

CONVERSION

As described above, Advisor Class shares may be held solely
through certain fee-based program accounts, employee benefit
plans and registered investment advisory or other financial
intermediary relationships, and by investment advisory clients
of, and certain persons associated with, Alliance and its
affiliates or the Funds. If a holder of Advisor Class shares
(i) ceases to participate in the fee-based program or plan, or to
be associated with an eligible investment advisor or financial
intermediary or (ii) is otherwise no longer eligible to purchase
Advisor Class shares (each a "Conversion Event"), then all
Advisor Class shares held by the shareholder will convert
automatically and without notice, to Class A shares of the same
Fund during the calendar month following the month in which the
Fund is informed of the occurrence of the Conversion Event. The
failure of a shareholder or a fee-based program to satisfy the
minimum investment requirements to purchase Advisor Class shares
will not constitute a Conversion Event. The conversion would
occur on the basis of the relative NAV of the two classes and
without the imposition of any sales load, fee or other charge.

DESCRIPTION OF CLASS A SHARES

The Class A shares of each Fund have a distribution fee of .30%
under the Fund's Rule 12b-1 plan that allows the Fund to pay
distribution and service fees for the distribution and sale of
its shares. Because this fee is paid out of the Fund's assets,
Class A shares have a higher expense ratio and may pay lower
dividends and may have a lower NAV than Advisor Class shares.

GENERAL INFORMATION

106

<PAGE>

telephone requests. The telephone service may be suspended or
terminated at any time without notice.

107

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand
the Fund's financial performance for the period of the Fund's
operations. Certain information reflects financial information
for a single Fund share. The total return in the table
represents the rate that an investor would have earned (or lost)
on an investment in the Fund (assuming investment of all
dividends and distributions). The information has been audited
by ______________, the Fund's independent auditors, whose report,
along with Fund's financial statements, appears in the Statement
of Additional Information, which is available upon request.

YEAR ENDED
_______________________________________

1998 1997 1996 1995 1994

Net asset value, beginning of
period $ $ $ $ $

INCOME FROM INVESTMENT OPERATIONS
Net investment income (Loss)

Net Realized and Unrealized Gain
(Loss) on Investments
Net Increases (Decrease) in Net
Asset Value From Operations

LESS: DISTRIBUTIONS
Dividends From Net Investment
Income
Dividends From Net Realized Gains
Total Dividends and Distributions

Net asset value, end of period

TOTAL RETURN
Total investment return based on
net asset value

RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000's
omitted)
Ratio of Expenses To Average Net
Assets
Ration of Net Investment Income
(Loss) To Average Net Assets
Portfolio Turnover Rate

108

<PAGE>

For more information about the Funds, the following documents are
available upon request:

- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS

- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)

You may request a free copy of the current annual/semi-annual
report or the SAI, by contacting your broker or other financial
intermediary, or by contacting Alliance:

BY MAIL: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, N.J. 07096-1520

BY PHONE: For Information: (800) 221-5672
For Literature: (800) 227-4618

Or you may view or obtain these documents from the SEC:

IN PERSON: at the SEC's Public Reference Room in
Washington, D.C.

BY PHONE: 1-800-SEC-0330

BY MAIL: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

ON THE INTERNET: www.sec.gov

You also may find more information about Alliance and the Funds
on the internet at www.Alliancecapital.com

109

<PAGE>

APPENDIX A

The following is additional information about the United Kingdom,
Japan and Greater China countries.

INVESTMENT IN UNITED KINGDOM ISSUERS. Investment in securities
of United Kingdom issuers involves certain considerations not
present with investment in securities of U.S. issuers. As with
any investment not denominated in the U.S. dollar, the U.S.
dollar value of the Fund's investment denominated in the British
pound sterling will fluctuate with pound sterling-dollar exchange
rate movements. Between 1972, when the pound sterling was
allowed to float against other currencies, and the end of 1992,
the pound sterling generally depreciated against most major
currencies, including the U.S. dollar. Between September and
December 1992, after the United Kingdom's exit from the Exchange
Rate Mechanism of the European Monetary System, the value of the
pound sterling fell by almost 20% against the U.S. dollar. The
pound sterling has since recovered due to interest rate cuts
throughout Europe and an upturn in the economy of the United
Kingdom. The average exchange rate of the U.S. dollar to the
pound sterling was 1.50 in 1993 and 1.64 in 1997. On October 13,
1998 the U.S. dollar-pound sterling exchange rate was 1.71.

A-1

<PAGE>

of England, as opposed to the Treasury. Prime Minister Blair has
also undertaken a comprehensive restructuring of the regulation
of the financial services industry. For further information
regarding the United Kingdom, see the Statement of Additional
Information of New Europe Fund.

INVESTMENT IN JAPANESE ISSUERS. Investment in securities of
Japanese issuers involves certain considerations not present with
investment in securities of U.S. issuers. As with any investment
not denominated in the U.S. dollar, the U.S. dollar value of each
Fund's investments denominated in the Japanese yen will fluctuate
with yen-dollar exchange rate movements. Between 1985 and 1995,
the Japanese yen generally appreciated against the U.S. dollar,
but has since fallen from its post-World War II high (in 1995)
against the U.S. dollar. Japan's largest stock exchange is the
Tokyo Stock Exchange, the First Section of which is reserved for
larger, established companies. As measured by the TOPIX, a
capitalization-weighted composite index of all common stocks
listed in the First Section, the performance of the First Section
reached a peak in 1989. Thereafter, the TOPIX declined
approximately 50% through the end of 1997. On October 13, 1998
the TOPIX closed at 998.98, down approximately 15% from the end
of 1997. Certain valuation measures, such as price-to-book value
and price-to-cash flow ratios, indicate that the Japanese stock
market is near its lowest level in the last twenty years relative
to other world markets.

A-2

<PAGE>

the dissatisfaction with Mr. Hashimoto's leadership. In the July
1998 House of Councillors election, the LDP's representation fell
to 103 seats from 120 seats. As a result of the LDP's defeat,
Mr. Hashimoto resigned as prime minister and leader of the LDP.
Mr. Hashimoto was replaced by Keizo Obuchi. For the past several
years, Japan's banking industry has been weakened by a
significant amount of problem loans. Japan's banks also have
significant exposure to the current financial turmoil in other
Asian markets. Following the insolvency of one of Japan's
largest banks in November 1997, the government proposed several
plans designed to strengthen the weakened banking sector. In
October 1998, the Japanese parliament approved several new laws
that will make $508 billion in public funds available to increase
the capital of Japanese banks, to guarantee depositors' accounts
and to nationalize the weakest banks. It is unclear whether
these new laws will achieve their intended effect. For further
information regarding Japan, see the Statements of Additional
Information of ALL-ASIA INVESTMENT FUND and INTERNATIONAL FUND.

INVESTMENT IN GREATER CHINA ISSUERS. China, in particular, but
Hong Kong and Taiwan, as well, in significant measure because of
their existing and increasing economic, and now in the case of
Hong Kong, direct political ties with China, may be subject to a
greater degree of economic, political and social instability than
is the case in the United States.

The rapidity and erratic nature of the growth have resulted in
inefficiencies and dislocations, including at times high rates of
inflation.

A-3

<PAGE>

1989 Tianamen Square uprising being a recent reminder, the
potential for renewed popular unrest associated with demands for
improved social, political and economic conditions cannot be
dismissed.

A-4

<PAGE>

Legislative Council. Although Hong Kong voters voted
overwhelmingly for pro-democracy candidates in the recent
election, it remains possible that China could exert its
authority so as to alter the economic structure, political
structure or existing social policy of Hong Kong. Investor and
business confidence in Hong Kong can be significantly affected by
such developments, which in turn can affect markets and business
performance. In this connection, it is noted that a substantial
portion of the companies listed on the Hong Kong Stock Exchange
are involved in real estate-related activities. The securities
markets of China and to a lesser extent Taiwan, 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, GREATER CHINA '97
Fund may experience greater price volatility and significantly
lower liquidity than a portfolio invested solely in equity
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 U.S. Securities settlements may
in some instances be subject to delays and related administrative
uncertainties.

A-5

<PAGE>

redemption requests at the price and time it wishes to do so. It
is also anticipated that transaction costs, including brokerage
commissions for transactions both on and off the securities
exchanges in Greater China countries, will be higher than in the
U.S.

A-6

<PAGE>

(LOGO) ALLIANCE WORLDWIDE
PRIVATIZATION 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
February 1, 1999
________________________________________________________________

This Statement of Additional Information is not a
prospectus but supplements and should be read in conjunction with
the current Prospectus for Alliance Worldwide Privatization Fund,
Inc. (the "Fund") that offers the Class A, Class B and Class C
shares of the Fund and the current Prospectus for the Fund that
offers the Advisor Class shares of the Fund (the "Advisor Class
Prospectus" and, together with the Prospectus for the Fund that
offers the Class A, Class B, and Class C shares of the Fund, the
"Prospectus"). Copies of such Prospectuses may be obtained by
contacting Alliance Fund Services, Inc. at the address or the
"For Literature" telephone number 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..........................
BROKERAGE AND PORTFOLIO TRANSACTIONS........................
GENERAL INFORMATION.........................................
REPORT OF INDEPENDENT AUDITORS AND
FINANCIAL STATEMENTS......................................
APPENDIX A: OPTIONS........................................ A-1
APPENDIX B: FUTURES CONTRACTS, OPTIONS ON FUTURES
CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES.... B-1
APPENDIX C: BOND RATINGS................................... C-1
APPENDIX D: CERTAIN EMPLOYEE BENEFIT PLANS................. D-1

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

<PAGE>

___________________________________________________________

DESCRIPTION OF THE FUND
___________________________________________________________

Alliance Worldwide Privitization Fund, Inc. (the "Fund")
is a non-diversified, open-end investment company. Except as
otherwise indicated, the investment policies of the Fund are not
"fundamental policies" and may, therefore, be changed by the
Board of Directors without a shareholder vote. However, the Fund
will not change its investment policies without contemporaneous
written notice to its 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 non-diversified, open-end management
company whose investment objective is to seek long term capital
appreciation. In seeking to achieve its investment objective, as
a fundamental policy, the Fund will invest at least 65% of its
total assets in equity securities that are issued by enterprises
that are undergoing, or that have undergone, privatization as
described below, although normally, significantly more of the
Fund's total assets will be invested in such securities. The
balance of the Fund's investment portfolio will include
securities of companies that are believed by Alliance Capital
Management L.P., the Fund's investment adviser (the "Adviser") to
be beneficiaries of the privatization process. Equity securities
include common stock, preferred stock, rights or warrants to
subscribe for or purchase common or preferred stock, securities
(including debt securities) convertible into common or preferred
stock and securities that give the holder the right to acquire
common or preferred stock.

How The Fund Pursues Its Objective

Investment in Privatizations. The Fund is designed for
investors desiring to take advantage of investment opportunities,
historically inaccessible to U.S. individual investors, that are
created by privatizations of state enterprises in both
established and developing economies, including those in Western
Europe and Scandinavia, Australia, New Zealand, Latin America,
Asia and Eastern and Central Europe and, to a lesser degree,
Canada and the United States.

The Fund's investments in the securities of enterprises
undergoing privatization may comprise three distinct situations.
First, the Fund may invest in the initial offering of equity
securities of a government- or state-owned or controlled company

<PAGE>

or enterprise (a "state enterprise") that are traded in a
recognized national or international securities market (an
"initial equity offering"). Secondly, the Fund may invest in the
securities of a current or former state enterprise following its
initial equity offering, including the purchase of securities in
any secondary offerings. Finally, the Fund may make privately
negotiated investments in a state enterprise that has not yet
conducted an initial equity offering. Investments of this type
may be structured, for example, as privately negotiated sales of
stock or other equity interests in joint ventures, cooperatives
or partnerships. In the opinion of the Adviser, substantial
potential for appreciation in the value of equity securities of
an enterprise undergoing or following privatization exists as the
enterprise rationalizes its management structure, operations and
business strategy to position itself to compete efficiently in a
market economy, and the Fund will seek to emphasize investments
in the equity securities of such enterprises.

The Fund intends to spread its portfolio investments
among the capital markets of a number of countries and, under
normal market conditions, will invest in the equity securities of
issuers based in at least four, and normally considerably more,
countries. The percentage of the Fund's assets invested in
equity securities of companies based in a particular country will
vary in accordance with the Adviser's assessment of the
appreciation potential of such securities. Notwithstanding the
foregoing, no more than 15% of the Fund's total assets will be
invested in securities of issuers in any one foreign country,
except that the Fund may invest up to 30% of its total assets in
securities of issuers in any one of France, Germany, Great
Britain, Italy and Japan.

Privatization is a process through which the ownership
and control of companies or assets changes in whole or in part
from the public sector to the private sector. Through
privatization a government or state divests or transfers all or a
portion of its interest in a state enterprise to some form of
private ownership. In contrast, nationalization is the process
through which a government or state assumes control of a
privately owned enterprise. Privatizations may take the form of
individually negotiated transactions, including trade sales or
management buy-outs, or an offering of equity securities.
Governments and states with established economies, including,
among others, France, Great Britain, Germany and Italy, and those
with developing economies, including, among others, Argentina,
Mexico, Chile, Indonesia, Malaysia, Poland and Hungary, are
currently engaged in privatizations. The Fund will invest in the
securities of enterprises, in any country, that in the Adviser's
opinion present attractive investment opportunities, and the
countries in which the Fund invests will change from time to
time. It is the Adviser's current intention to invest

<PAGE>

approximately 70% of the Fund's total assets in securities of
enterprises located in countries with established economies and
the remainder of the Fund's assets in securities of enterprises
located in countries with developing economies.

The trend toward privatization of state enterprises is a
global phenomenon that the Adviser expects will continue into the
next century. In addition, the Adviser believes that a global
portfolio of equity securities of state enterprises that are
undergoing privatization offers investors the opportunity for
significant capital appreciation relative to local and regional
stock market indices.

A major premise of the Fund's investment approach is
that, because of the particular characteristics of privatized
companies, their equity securities offer investors opportunities
for significant capital appreciation. In particular, because
privatization programs are an important part of a country's
economic restructuring, equity securities that are brought to the
market by means of initial equity offerings frequently are priced
to attract investment in order to secure the issuer's successful
transition to private sector ownership. In addition, these
enterprises generally tend to enjoy dominant market positions in
their local markets. Because of the relaxation of government
controls upon privatization, these enterprises typically have the
potential for significant managerial and operational efficiency
gains, which, among other factors, can increase their earnings
due to the restructuring that accompanies privatization and the
incentives management frequently receives.

Individual regions and countries have different
histories of involvement in the privatization process. For
example, the countries that formerly constituted the Soviet Union
and the Eastern Bloc are currently exploring privatization partly
as a means of integrating into the international community, while
certain Western European and Latin American countries have had
privatization programs in place for more than ten years. The
cumulative gross proceeds from major privatizations worldwide has
dramatically increased in recent years.

Privatization programs are established to address a
range of economic, political or social needs. Privatization is
generally viewed as a means to achieve increased efficiency and
improve the competitiveness of state enterprises. Western
European countries are currently engaged in privatization
programs partly as a means of increasing government revenues,
thereby reducing budget deficits. The reduction of budget
deficits recently has become an important objective as Western
European countries attempt to meet the directives of the European
Commission regarding debt and achieve the target budget deficit
levels established by the Maastricht Treaty. In developing

<PAGE>

market countries, including many of those in Latin America and
Asia, privatization is viewed as an integral part of broad
economic measures that are designed to reduce external debt and
control inflation as these countries attempt to meet the
directives of the International Bank for Reconstruction and
Development (the "World Bank") and the International Monetary
Fund regarding desirable debt levels. Within Eastern and Central
Europe, privatization is also being used as a means of achieving
structural economic changes that will enable Eastern and Central
European countries to develop market economies and compete in the
world markets.

The privatization of state enterprises is achieved
through various methods. A gradual approach is commonly taken at
the early stages of privatization within a country. Oftentimes,
the government will transfer partial ownership of the enterprise
to a corporation or similar entity and occasionally also broaden
ownership to employees and citizens while retaining an interest.
Occasionally, a few selected foreign minority shareholders are
permitted to make private investments at this stage. After the
new corporation has operated under this form of ownership for a
few years, the government may divest itself completely by means
of an equity offering in national and international securities
markets. Another approach is the formation of an investment fund
owned by employees and citizens that, with the assistance of
international managers, operates one or many state enterprises
for a set term, after which the government may divest itself of
its remaining interest. Foreign investors are often permitted to
become minority shareholders of these investment funds. In less
gradual privatizations, state enterprises are auctioned to
qualified investors through competitive bidding processes in
private transactions. Alternatively, equity offerings may be
made directly through the local and international securities
markets.

Although the Fund anticipates that it generally will not
concentrate its investments in any industry, it is permitted,
under certain conditions, to invest more than 25% of its total
assets in the securities of issuers whose primary business
activity is that of national commercial banking. Prior to
concentrating in the securities of national commercial banks, the
Fund's Board of Directors would have to determine, based on
factors in existence at the time of the determination, such as
liquidity, availability of investments and anticipated returns,
that the Fund's ability to achieve its investment objective would
be adversely affected if the Fund were not permitted to invest
more than 25% of its total assets in those securities. The
Adviser anticipates that such circumstances could include periods
during which returns on or market liquidity of investments in
national commercial banks substantially exceed those available on
investments in other industries. The staff of the Securities and

<PAGE>

Exchange Commission (the "Commission") has indicated that, in its
view, registered investment companies may not, absent shareholder
approval, change between concentration and non-concentration in
the securities of issuers in a single industry. The Fund
disagrees with the staff's position but has undertaken that it
will not concentrate in the securities of national commercial
banks until final resolution of the issue. There can be no
assurance that the issue will be resolved so as to permit the
Fund to change between concentration and non-concentration in the
manner described above in this paragraph. To the extent that the
Fund invests more than 25% of its total assets in the national
commercial banks, the Fund's performance could be significantly
influenced by events or conditions affecting this industry and
the Fund's investments may be subject to greater risk and market
fluctuation than those of a fund that has in its portfolio
securities representing a broader range of investment
alternatives. The national commercial banking industry is
subject to, among other things, increases in interest rates and
deterioration in general economic conditions.

Except as otherwise noted, the Fund's investment
policies described below are not designated "fundamental
policies" within the meaning of the Investment Company Act of
1940 (the "1940 Act") and, therefore, may be changed by the
Directors of the Fund without a shareholder vote. However, the
Fund will not change its investment policies without
contemporaneous written notice to shareholders.

Warrants. The Fund may invest up to 20% of its total
assets in rights or warrants which entitle the holder to buy
equity securities at a specific price for a specific period of
time, but will do so only if the equity securities themselves are
deemed appropriate by the Adviser for inclusion in the Fund's
portfolio; however, the Fund does not presently intend to invest
more than 10% of its total assets in such warrants. Rights and
warrants may be considered more speculative than certain other
types of investments in that they do not entitle a holder to
dividends or voting rights with respect to the securities which
may be purchased nor do they represent any rights in the assets
of the issuing company. Also, the value of a right or warrant
does not necessarily change with the value of the underlying
securities and a right or warrant ceases to have value if it is
not exercised prior to the expiration date.

Debt Securities and Convertible Debt Securities. The
Fund may invest up to 35% of its total assets in debt securities
and convertible debt securities of issuers whose common stocks
are eligible for purchase by the Fund under the investment
policies described above. Debt securities include bonds,
debentures, corporate notes and preferred stocks. Convertible
debt securities are such instruments that are convertible at a

<PAGE>

stated exchange rate into common stock. Prior to their
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 market
value of debt securities and convertible debt securities tends to
decline as interest rates increase and, conversely, to increase
as interest rates decline. While convertible securities
generally offer lower interest yields than non-convertible debt
securities of similar quality, they do enable the investor to
benefit from increases in the market price of the underlying
common stock.

When the market price of the common stock underlying a
convertible security increases, the price of the convertible
security increasingly reflects the value of the underlying common
stock and may rise accordingly. As the market price of the
underlying common stock declines, the convertible security tends
to trade increasingly on a yield basis, and thus may not
depreciate to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks in an
issuer's capital structure. They are consequently of higher
quality and entail less risk than the issuer's common stock,
although the extent to which such risk is reduced depends in
large measure upon the degree to which the convertible security
sells above its value as a fixed income security.

The Fund may maintain not more than 5% of its net assets
in debt securities rated below Baa by Moody's Investors Service,
Inc. ("Moody's") and BBB by Standard and Poor's Ratings Services
("S&P"), or, if not rated, determined by the Adviser to be of
equivalent quality. The Fund will not purchase a debt security
that, at the time of purchase, is rated below B by Moody's and
S&P, or determined by the Adviser to be of equivalent quality,
but may retain a debt security the rating of which drops below B.
See "Certain Risk Considerations--Securities Ratings."

Defensive Position. For temporary defensive purposes,
the Fund may vary from its fundamental investment policy during
periods in which conditions in securities markets or other
economic or political conditions warrant. The Fund may reduce
its position in equity securities and increase without limit its
position in short-term, liquid, high-grade debt securities, which
may include securities issued by the U.S. government, its
agencies and instrumentalities ("U.S. Government Securities"),
bank deposits, money market instruments, short-term (for this
purpose, securities with a remaining maturity of one year or
less) debt securities, including notes and bonds, and short-term
foreign currency denominated debt securities rated A or higher by
S&P or Moody's or, if not so rated, of equivalent investment
quality as determined by the Adviser. For this purpose, the Fund

<PAGE>

will limit its investments in foreign currency denominated debt
securities to securities that are denominated in currencies in
which the Fund anticipates its subsequent investments will be
denominated.

Subject to its policy of investing at least 65% of its
total assets in equity securities of enterprises undergoing
privatization, the Fund may also at any time temporarily invest
funds awaiting reinvestment or held as reserves for dividends and
other distributions to shareholders in money market instruments
referred to above.

Additional Investment Policies and Practices

Options. The Fund may write covered put and call
options and purchase put and call options on securities of the
types in which it is permitted to invest that are traded on U.S.
and foreign securities exchanges and over-the-counter, including
options on market indices. The Fund will only write "covered"
put and call options, unless such options are written for
cross-hedging purposes. There are no specific limitations on the
Fund's writing and purchasing of options.

A put option gives the purchaser of such option, upon
payment of a premium, the right to deliver a specified amount of
a security to the writer of the option on or before a fixed date
at a predetermined price. A call option gives the purchaser of
the option, upon payment of a premium, the right to call upon the
writer to deliver a specified amount of a security on or before a
fixed date at a predetermined price. A call option written by
the Fund is "covered" if the Fund owns the underlying security
covered by the call or has an absolute and immediate right to
acquire that security without additional cash consideration (or
for additional cash consideration held in a segregated account by
its custodian) upon conversion or exchange of other securities
held in its portfolio. A call option is also covered if the Fund
holds a call on the same security and in the same principal
amount as the call written where the exercise price of the call
held (i) is equal to or less than the exercise price of the call
written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in liquid
assets in a segregated account with its custodian. A put option
written by the Fund is "covered" if the Fund maintains liquid
assets with a value equal to the exercise price in a segregated
account with its Custodian, or else holds a put on the same
security and in the same principal amount as the put written
where the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by
the purchaser of an option will reflect, among other things, the
relationship of the exercise price to the market price and
volatility of the underlying security, the remaining term of the

<PAGE>

option, supply and demand and interest rates. It would realize a
loss if the price of the underlying security increased or
remained the same or did not decrease during that period by more
than the amount of the premium. If a put or call option
purchased by the Fund were permitted to expire without being sold
or exercised, its premium would be lost by the Fund.

A call option is for cross-hedging purposes if the Fund
does not own the underlying security but seeks to provide a hedge
against a decline in value in another security which the Fund
owns or has the right to acquire. In such circumstances, the
Fund collateralizes its obligation under the option by
maintaining in a segregated account with the Fund's custodian
liquid assets in an amount not less than the market value of the
underlying security, marked to market daily. The 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 would exceed that which would be
received from writing a covered call option, while at the same
time achieving the desired hedge.

In purchasing a call option, the Fund would be in a
position to realize a gain if, during the option period, the
price of the underlying security increased by an amount in excess
of the premium paid. It would realize a loss if the price of the
underlying security declined or remained the same or did not
increase during the period by more than the amount of the
premium. In purchasing a put option, the Fund would be in a
position to realize a gain if, during the option period, the
price of the underlying security declined by an amount in excess
of the premium paid. It would realize a loss if the price of the
underlying security increased or remained the same or did not
decrease during that period by more than the amount of the
premium. If a put or call option purchased by the Fund were
permitted to expire without being sold or exercised, its premium
would be lost by the Fund.

If a put option written by the Fund were exercised, the
Fund would be obligated to purchase the underlying security at
the exercise price. If a call option written by the Fund were
exercised, the Fund would be obligated to sell the underlying
security at the exercise price. The risk involved in writing a
call option is that there could be an increase in the market
value of the underlying security caused by declining interest
rates or other factors. If this occurred, the option could be
exercised and the underlying security would then be sold by the
Fund at a lower price than its current market value. The risk
involved in writing a call option is that there could be an
increase in the market value of the underlying security caused by
declining interest rates or other factors. If this occurred, the
option could be exercised and the underlying security would then

<PAGE>

be sold by the Fund at a lower price than its current market
value. These risks could be reduced by entering into a closing
transaction prior to the option expiration dates if a liquid
market is available. The Fund retains the premium received from
writing a put or call option whether or not the option is
exercised. For additional information on the use, risk and costs
of options, see Appendix A.

The Fund may purchase or write options on securities of
the types in which it is permitted to invest in privately
negotiated (i.e., over-the-counter) transactions. The Fund will
effect such transactions only with investment dealers and other
financial institutions (such as commercial banks or savings and
loan institutions) deemed creditworthy by the Adviser, and the
Adviser has adopted procedures for monitoring the
creditworthiness of such entities. Options purchased or written
by the Fund in negotiated transactions are illiquid and it may
not be possible for the Fund to effect a closing transaction at a
time when the Adviser believes it would be advantageous to do so.
See "Illiquid Securities."

Options on Market Indices. An option on a securities
index is similar to an option on a security except that, rather
than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder
the right to receive, upon exercises 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. There are no specific limitations
on the Fund's purchasing and selling of options on securities
indices.

Futures Contracts and Options on Futures Contracts. The
Fund may enter into contracts for the purchase or sale for future
delivery of fixed-income securities or foreign currencies, or
contracts based on financial indices, including any index of U.S.
Government Securities, securities issued by foreign government
entities, or common stocks ("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 currencies 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 currencies called for by the
contract at a specified price on a specified date. The purchaser
of a futures contract on an index agrees to take or make delivery
of an amount of cash equal to the difference between a specified
dollar multiple of the value of the index on the expiration date
of the contract ("current contract value") and the price at which

<PAGE>

the contract was originally struck. No physical delivery of the
securities underlying the index is made.

Options on futures contracts written or purchased by the
Fund will be traded on U.S. or foreign exchanges or over-the-
counter. These investment techniques will be used only to hedge
against anticipated future changes in market conditions and
interest or exchange rates which otherwise might either adversely
affect the value of the Fund's portfolio securities or adversely
affect the prices of securities which the Fund intends to
purchase at a later date.

The Fund will not enter into any futures contracts or
options on futures contracts if immediately thereafter the
aggregate of the market value of the outstanding futures
contracts of the Fund and the market value of the currencies and
futures contracts subject to outstanding options written by the
Fund would exceed 50% of the market value of the total assets of
the Fund.

The successful use of such instrument draws upon the
Adviser's special skills and experience with respect to such
instruments and usually depends on the Adviser's ability to
forecast interest rate and currency exchange rate movements
correctly. Should interest or exchange rates move in an
unexpected manner, the Fund may not achieve the anticipated
benefits of futures contracts or options on futures contracts or
may realize losses and thus will be in a worse position than if
such strategies had not been used. In addition, the correlation
between movements in the price of futures contracts or options on
futures contracts and movements in the price of the securities
and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses. The Fund's Custodian will
place liquid assets in a segregate account of the Fund having a
value equal to the aggregate amount of the Fund's commitments
under futures contracts.

For additional information on the use, risks and costs
of futures contracts and options on futures contracts, see
Appendix B.

Options on Foreign Currencies. The Fund may purchase
and write put and call options on foreign currencies 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 such securities to be
acquired. As in the case of other kinds of options, however, the
writing of an option on a foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and the
Fund could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The

<PAGE>

purchase of an option on a foreign currency may constitute an
effective hedge against fluctuations in exchange rates although,
in the event of rate movements adverse to the Fund's position, it
may forfeit the entire amount of the premium plus related
transaction costs. Options on foreign currencies to be written
or purchased by the Fund are traded on U.S. and foreign exchanges
or over-the-counter. There is no specific percentage limitation
on the Fund's investments in options on foreign currencies. For
additional information on the use, risks and costs of options on
foreign currencies, see Appendix B.

Forward Foreign Currency Exchange Contracts. The Fund
may purchase or sell forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund
from adverse changes in the relationship between the U.S. Dollar
and foreign currencies. A forward contract is an obligation to
purchase or sell a specific currency for an agreed price at a
future date, and is individually negotiated and privately traded
by currency for an agreed price at a future date, and is
individually negotiated and privately traded by currency traders
and their customers. The 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"). The Fund may not engage in transaction hedges with
respect to the currency of a particular country to an extent
greater than the aggregate amount of the Fund's transactions in
that currency. Additionally, for example, when the Fund believes
that a foreign currency may suffer a substantial decline against
the U.S. Dollar, it may enter into a 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"). In this situation the 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"). To the extent
required by applicable law, the Fund's Custodian will place
liquid assets in a segregated account of the Fund having a value
equal to the aggregate amount of the Fund's commitments under
forward contracts entered into with respect to position hedges
and cross-hedges. If the value of the assets placed in a
segregated account declines, additional liquid assets will be
placed in the account on a daily basis so that the value of the
account will equal the amount of the Fund's commitments with

<PAGE>

respect to such contracts. As an alternative to maintaining all
or part of the segregated account, the Fund may purchase a call
option permitting the Fund to purchase the amount of foreign
currency being hedged by a forward sale contract at a price no
higher than the forward contract price or the Fund may purchase a
put option permitting the Fund to sell the amount of foreign
currency subject to a forward purchase contract at a price as
high or higher than the forward contract price. Unanticipated
changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such
contracts. In addition, the Fund may use other methods of
"cover" as are permitted by applicable law.

While these contracts are not presently regulated by the
Commodity Futures Trading Commission ("CFTC"), the CFTC may in
the future assert authority to regulate forward contracts. In
such event the Fund's ability to utilize forward contracts in the
manner set forth in the Prospectus may be restricted. Forward
contracts will reduce the potential gain from a positive change
in the relationship between the U.S. Dollar and foreign
currencies. Unanticipated changes in currency prices may result
in poorer overall performance for the Fund than if it had not
entered into such contracts. The use of foreign currency forward
contracts will not eliminate fluctuations in the underlying U.S.
Dollar equivalent value of the proceeds of or rates of return on
the Fund's foreign currency-denominated portfolio securities and
the use of such techniques will subject the Fund to certain
risks.

The matching of the increase in value of a forward
contract and the decline in the U.S. Dollar equivalent value of
the foreign-currency denominated asset that is the subject of the
hedge generally will not be precise. In addition, the Fund may
not always be able to enter into foreign currency forward
contracts at attractive prices and this will limit the Fund's
ability to use such contracts to hedge or cross-hedge its assets.
Also, with regard to the Fund's use of cross-hedges, there can be
no assurance that historical correlation between the movement of
certain foreign currencies relative to the U.S. Dollar will
continue. Thus, at any time poor correlation may exist between
movements in the exchange rates of the foreign currencies
underlying the Fund's cross-hedges and the movements in the
exchange rates of the foreign currencies in which the Fund's
assets that are the subject of such cross-hedges are denominated.
For additional information on the use, risks and costs of forward
foreign currency exchange contracts, see Appendix B.

Forward Commitments. The Fund may enter into forward
commitments for the purchase or sale of securities. Such
transactions may include purchases on a "when-issued" basis or
purchases or sales on a "delayed delivery" basis. In some cases,

<PAGE>

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 (i.e., a "when, as
and if issued" trade).

When forward commitment transactions are negotiated, the
price, which generally is expressed in yield terms, is fixed at
the time the commitment is made, but delivery and payment for the
securities take place at a later date. Normally, the settlement
date occurs within two months after the transaction, but delayed
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 accrue to the
purchaser prior to the settlement date. At the time the Fund
intends to enter into a forward commitment, it will record the
transaction and thereafter reflect 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 of a "when, as and if
issued" security would be canceled in the event that the required
conditions did not occur and the trade was canceled.

The use of forward commitments enables the Fund to
protect against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling
bond prices, the Fund might sell securities in its portfolio on a
forward commitment basis to limit its exposure to falling prices.
In periods of falling interest rates and rising bond prices, the
Fund might sell a security in its portfolio and purchase the same
or a similar security on a when-issued or forward commitment
basis, thereby obtaining the benefit of currently higher cash
yields. However, if the Adviser were to forecast incorrectly the
direction of interest rate movements, the Fund might be required
to complete such when-issued or forward transactions at prices
inferior to the then current market values. No forward
commitments will be made by the Fund if, as a result, the Fund's
aggregate commitments under such transactions would be more than
30% of the then current value of the Fund's total assets.

The Fund's right to receive or deliver a security under
a forward commitment may be sold prior to the settlement date,
but the Fund will enter into forward commitments only with the
intention of actually receiving or delivering the securities, as
the case may be. To facilitate such transactions, the Fund's
Custodian will maintain, in a segregated account of the Fund,
liquid assets having value equal to, or greater than, any
commitments to purchase securities on a forward commitment basis
and, with respect to forward commitments to sell portfolio
securities of the Fund, the portfolio securities themselves. If
the Fund, however, chooses to dispose of the right to receive or
deliver a security subject to a forward commitment prior to the

<PAGE>

settlement date of the transaction, it may incur a gain or loss.
In the event the other party to a forward commitment transaction
were to default, the Fund might lose the opportunity to invest
money at favorable rates or to dispose of securities at favorable
prices.

Standby Commitment Agreements. The Fund may from time
to time enter into standby commitment agreements. Such
agreements commit the Fund, for a stated period of time, to
purchase a stated amount of a security which 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 or not the security
ultimately is issued, which is typically approximately 0.5% of
the aggregate purchase price of the security which the Fund has
committed to purchase. The Fund will enter into such agreements
only for the purpose of investing in the security underlying the
commitment at a yield and price which are considered advantageous
to the Fund and which are unavailable on a firm commitment basis.
The Fund will not enter into a standby commitment with a
remaining term in excess of 45 days and will limit its investment
in such commitments so that the aggregate purchase price of the
securities subject to the commitments will not exceed 50% of its
assets taken at the time of acquisition of such commitment. The
Fund will at all times maintain a segregated account with its
Custodian of liquid assets in an aggregate amount equal to the
purchase price of the securities underlying the commitment.

There can be no assurance that the securities subject to
a standby commitment will be issued and 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
underlying the commitment is at the option of the issuer, the
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.

The purchase of a security subject to a standby
commitment agreement and the related commitment fee will be
recorded on the date on which the security can reasonably be
expected to be issued and the value of the security will
thereafter be reflected in the calculation of the Fund's net
asset value. The cost basis of the security will be adjusted by
the amount of the commitment fee. In the event the security is
not issued, the commitment fee will be recorded as income on the
expiration date of the standby commitment.

Currency Swaps. The Fund may enter into currency swaps
for hedging purposes. Currency swaps involve the exchange by the

<PAGE>

Fund with another party of a series of payments in specified
currencies. Since currency swaps are individually negotiated,
the Fund expects to achieve an acceptable degree of correlation
between its portfolio investments and its currency swaps
positions. A currency swap may involve the delivery at the end
of the exchange period of a substantial amount of one designated
currency in exchange for the other designated currency. Therefore
the entire principal value of a currency swap is subject to the
risk that the other party to the swap will default on its
contractual delivery obligations. The net amount of the excess,
if any, of the Fund's obligations over its entitlements with
respect to each currency swap will be accrued on a daily basis
and an amount of liquid assets having an aggregate net asset
value at least equal to the accrued excess will be maintained in
a segregated accounting by the Fund's custodian. The Fund will
not enter into any currency swap unless the credit quality of the
unsecured senior debt or the claims-paying ability of the other
party thereto is rated in the highest rating category of at least
one nationally recognized rating organization at the time of
entering into the transaction. If there is a default by the other
party to such a transaction, the Fund will have contractual
remedies pursuant to the agreements related to the transactions.

Repurchase Agreements. The Fund may enter into
repurchase agreements pertaining to U.S. Government Securities
with member banks of the Federal Reserve System or "primary
dealers" (as designated by the Federal Reserve Bank of New York)
in such securities. There is no percentage restriction on the
Fund's ability to enter into repurchase agreements. Currently,
the Fund intends to enter into repurchase agreements only with
its custodian and such primary dealers. 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 one day or a few days later. The resale price is
greater than the purchase price, reflecting an agreed-upon
interest rate which is effective for the period of time the
buyer's money is invested in the security and which is related to
the current market rate rather than the coupon rate on the
purchased security. This results in a fixed rate of return
insulated from market fluctuations during such period. Such
agreements permit the Fund to keep all of its assets at work
while retaining "overnight" flexibility in pursuit of investments
of a longer-term nature. The Fund requires continual maintenance
by its Custodian for its account in the Federal Reserve/Treasury
Book Entry System of collateral in an amount equal to, or in
excess of, the resale price. In the event a vendor defaulted on
its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. In the event of a vendor's
bankruptcy, the Fund might be delayed in, or prevented from,
selling the collateral for its benefit. The Fund's Board of

<PAGE>

Directors has established procedures, which are periodically
reviewed by the Board, pursuant to which the Adviser monitors the
creditworthiness of the dealers with which the Fund enters into
repurchase agreement transactions.

Illiquid Securities. The Fund will not maintain more
than 15% of the Fund's net assets (taken at market value) in
illiquid securities. For this purpose, illiquid securities
include, among others (a) direct placement or other securities
which are subject to legal or contractual restrictions on resale
or for which there is no readily available market (e.g., many
individually negotiated currency swaps and any assets used to
cover currency swaps, most privately negotiated investments in
state enterprises that have not yet conducted initial equity
offerings, 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), (b) over-the-counter options
and all assets used to cover over-the-counter options, and (c)
repurchase agreements not terminable within seven days.

The Fund may not be able to readily sell illiquid
securities. Such securities are unlike securities which are
traded in the open market and which can be expected to be sold
immediately if the market is adequate. The sale price of
illiquid securities may be lower or higher than the Adviser's
most recent estimate of their fair value. Generally, less public
information is available with respect to the issuers of such
securities than with respect to companies whose securities are
traded on an exchange. Illiquid securities are more likely to be
issued by small businesses and therefore subject to greater
economic, business and market risks than the listed securities of
more well-established companies. Adverse conditions in the public
securities markets may at certain times preclude a public
offering of an issuer's securities. To the extent that the Fund
makes any privately negotiated investments in state enterprises,
such investments are likely to be in securities that are not
readily marketable. It is the intention of the Fund to make such
investments when the Adviser believes there is a reasonable
expectation that the Fund would be able to dispose of its
investment within three years. There is no law in a number of the
countries in which the Fund may invest similar to the U.S.
Securities Act of 1933, as amended (the "1933 Act") requiring an
issuer to register the public sale of securities with a
governmental agency or imposing legal restrictions on resales of
securities, either as to length of time the securities may be
held or manner of resale. However, there may be contractual
restrictions on resale of securities. In addition, many
countries do not have informational disclosure requirements
similar in scope to those required under the U.S. Securities
Exchange Act of 1934, as amended (the "1934 Act"). The Adviser

<PAGE>

will monitor the illiquidity of such securities under the
supervision of the Board of Directors.

Short Sales. The Fund may make short sales of
securities or maintain a short position only for the purpose of
deferring realization of gain or loss for U.S. federal income tax
purposes, provided that at all times when a short position is
open the Fund owns an equal amount of such securities of the same
issue as, and equal in amount to, the securities sold short. In
addition, the Fund may not make a short sale if more than 10% of
the Fund's net assets (taken at market value) is held as
collateral for short sales at any one time. Pursuant to the
Taxpayer Relief Act of 1997, if the Fund has unrealized gain with
respect to a security and enters into a short sale with respect
to such security, the Fund generally will be deemed to have sold
the appreciated security and thus will recognize a gain for tax
purposes. If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces
the borrowed security, the Fund will incur a loss; conversely, if
the price declines, the Fund will realize a capital gain. See
"Investment Restrictions." Certain special federal income tax
considerations may apply to short sales which are entered into by
the Fund. See "Dividends, Distributions and Taxes-United States
Federal Income Taxation of the Fund-Tax Straddles."

General. The successful use of the foregoing investment
practices draws upon the Adviser's special skills and experience
with respect to such instruments and usually depends on the
Adviser's ability to forecast price movements or currency
exchange rate movements correctly. Should exchange rates move in
an unexpected manner, the Fund may not achieve the anticipated
benefits of futures contracts, options or forward contracts or
may realize losses and thus be in a worse position than if such
strategies had not been used. Unlike many exchange-traded
futures contracts and options on futures contracts, there are no
daily price fluctuation limits with respect to options on
currencies and forward contracts, and adverse market movements
could therefore continue to an unlimited extent over a period of
time. In addition, the correlation between movements in the
prices of such instruments and movements in the prices of the
securities and currencies hedged or used for cover will not be
perfect and could produce unanticipated losses.

The Fund's ability to dispose of its position in futures
contracts, options and forward contracts will depend on the
availability of liquid markets in such instruments. Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still
developing, and there is no public market for forward contracts.
It is impossible to predict the amount of trading interest that
may exist in various types of futures contracts, options and

<PAGE>

forward contracts. If a secondary market does not exist with
respect to an option purchased or written by the Fund over-the-
counter, it might not be possible to effect a closing transaction
in the option (i.e., dispose of the option) with the result that
(i) an option purchased by the Fund would have to be exercised in
order for the Fund to realize any profit and (ii) the Fund may
not be able to sell currencies or portfolio securities covering
an option written by the Fund until the option expires or it
delivers the underlying futures contract or currency upon
exercise. Therefore, no assurance can be given that the Fund
will be able to utilize these instruments effectively for the
purposes set forth above. Furthermore, the Fund's ability to
engage in options and futures transactions may be limited by tax
considerations. See "Dividends, Distributions and Taxes--U.S.
Federal Income Taxes."

Additional Investment Policies

Loans of Portfolio Securities. The Fund may make
secured loans of its portfolio securities to entities with which
it can enter into repurchase agreements, provided that liquid
assets equal to at least 100% of the market value of the
securities loaned are deposited and maintained by the borrower
with the Fund. See "Repurchase Agreements" above. The risks in
lending portfolio securities, as with other extensions of credit,
consist of possible loss of rights in the collateral should the
borrower fail financially. In determining whether to lend
securities to a particular borrower, the Adviser (subject to
review by the Board of Directors) 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. The
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. The Fund may pay
reasonable finders', administrative and custodial fees in
connection with a loan. The Fund will not lend portfolio
securities in excess of 30% of the value of its total assets, nor
will the Fund lend its portfolio securities to any officer,
director, employee or affiliate of the Fund or the Adviser. The
Board of Directors will monitor the Fund's lending of portfolio
securities.

Future Developments. The Fund may, following written
notice to its shareholders, take advantage of other investment
practices which are not at present contemplated for use by the
Fund or which currently are not available but which may be

<PAGE>

developed, to the extent such investment practices are both
consistent with the Fund's investment objective and legally
permissible for the Fund. Such investment practices, if they
arise, may involve risks which exceed those involved in the
activities described above.

Portfolio Turnover. Generally, the Fund's policy with
respect to portfolio turnover is to sell any security whenever,
in the judgment of the Adviser, its appreciation possibilities
have been substantially realized or the business or market
prospects for such security have deteriorated, irrespective of
the length of time that such security has been held. The Adviser
anticipates that the Fund's annual rate of portfolio turnover
will not exceed 200%. A 200% annual turnover rate would occur if
all the securities in the Fund's portfolio were replaced twice
within a period of one year. The turnover rate has a direct
effect on the transaction costs to be borne by the Fund, and as
portfolio turnover increases it is more likely that the Fund will
realize short-term capital gains.

Certain Risk Considerations

Investment in the Fund involves the special risk
considerations described below.

Investment in Privatized Enterprises. The governments
of certain foreign countries have, to varying degrees, embarked
on privatization programs contemplating the sale of all or part
of their interests in state enterprises. In certain
jurisdictions, the ability of foreign entities, such as the Fund,
to participate in privatizations may be limited by local law, or
the price or terms on which the Fund may be able to participate
may be less advantageous than for local investors. Moreover,
there can be no assurance that governments that have embarked on
privatization programs will continue to divest their ownership of
state enterprises, that proposed privatizations will be
successful or that governments will not re-nationalize
enterprises that have been privatized. Furthermore, in the case
of certain of the enterprises in which the Fund may invest, large
blocks of the stock of those enterprises may be held by a small
group of stockholders, even after the initial equity offerings by
those enterprises. The sale of some portion or all of those
blocks could have an adverse effect on the price of the stock of
any such enterprise.

Most state enterprises or former state enterprises go
through an internal reorganization of management prior to making
an initial equity offering in an attempt to better enable these
enterprises to compete in the private sector. However, certain
reorganizations could result in a management team that does not
function as well as the enterprise's prior management and may

<PAGE>

have a negative effect on such enterprise. After making an
initial equity offering enterprises which may have enjoyed
preferential treatment from the respective state or government
that owned or controlled them may no longer receive such
preferential treatment and may become subject to market
competition from which they were previously protected. Some of
these enterprises may not be able to effectively operate in a
competitive market and may suffer losses or experience bankruptcy
due to such competition. In addition, the privatization of an
enterprise by its government may occur over a number of years,
with the government continuing to hold a controlling position in
the enterprise even after the initial equity offering for the
enterprise.

Currency Considerations. Because substantially all of
the Fund's assets will be invested in securities denominated in
foreign currencies and a corresponding portion of the Fund's
revenues will be received in such currencies, the dollar
equivalent of the Fund's net assets and distributions will be
adversely affected by reductions in the value of certain foreign
currencies relative to the U.S. dollar. Such changes will also
affect the Fund's income. The Fund will, however, have the
ability to attempt to protect itself against adverse changes in
the values of foreign currencies by engaging in certain of the
investment practices listed above. While the Fund has this
ability, there is no certainty as to whether and to what extent
the Fund will engage in these practices. If the value of the
foreign currencies in which the Fund receives its income falls
relative to the U.S. dollar between receipt of the income and the
making of Fund distributions, the Fund may be required to
liquidate securities in order to make distributions if the Fund
has insufficient cash in U.S. dollars to meet distribution
requirements. Similarly, if an exchange rate declines between
the time the 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.

Risk of 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, the Fund's investment portfolio may
experience greater price volatility and significantly lower
liquidity than a portfolio invested in equity 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

<PAGE>

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 the Fund. As illustrations,
certain countries require governmental approval prior to
investments by foreign persons, or limit the amount of investment
by foreign persons in a particular company, or limit the
investment by foreign persons to only a specific class of
securities of a company which may have less advantageous terms
than securities of the company available for purchase by
nationals or impose additional taxes on foreign investors. The
national policies of certain countries may restrict investment
opportunities in issuers deemed sensitive to national interests.
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. The 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 the Fund to adopt special procedures, seek local
governmental approvals or other actions, any of which may involve
additional costs to the Fund. The liquidity of the Fund's
investments in any country in which any of these factors exist
could be affected and the Adviser will monitor the effect of any
such factor or factors on the 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 United States.

Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are
U.S. issuers 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. Foreign issuers are subject to accounting, auditing
and financial standards and requirements that differ, in some
cases significantly, from those applicable to U.S. issuers. In
particular, the assets and profits appearing on the financial
statements of a foreign issuer may not reflect its financial
position or results of operations in the way they would be
reflected had the financial statements been prepared in
accordance with U.S. generally accepted accounting principles. In

<PAGE>

addition, for an issuer that keeps accounting records in local
currency, inflation accounting rules in some of the countries in
which the Fund will invest require, for both tax and accounting
purposes, that certain assets and liabilities be restated on the
issuer's balance sheet in order to express items in terms of
currency of constant purchasing power. Inflation accounting may
indirectly generate losses or profits. Consequently, financial
data may be materially affected by restatements for inflation and
may not accurately reflect the real condition of those issuers
and securities markets. 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, the 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. The Fund intends to spread its
portfolio investments among the capital markets of a number of
countries and, under normal market conditions, will invest in the
equity securities of issuers based in at least four, and normally
considerably more, countries. There is no restriction, however,
on the percentage of the Fund's assets that may be invested in
countries within any one region of the world. To the extent that
the Fund's assets are invested within any one region, the Fund
may be subject to any special risks that may be associated with
that region.

U.S. and Foreign Taxes. Foreign taxes paid by the Fund
may be creditable or deductible by U.S. shareholders for U.S.
income tax purposes. No assurance can be given that applicable
tax laws and interpretations will not change in the future.
Moreover, non-U.S. investors may not be able to credit or deduct
such foreign taxes. Investors should review carefully the
information discussed under the heading "Dividends, Distributions
and Taxes" and should discuss with their tax advisers the
specific tax consequences of investing in the Fund.

Investments in Lower-Rated Debt Securities. Debt
securities rated below investment grade, i.e., Ba and lower by
Moody's or BB and lower by S&P ("lower-rated securities"), or, if

<PAGE>

not rated, determined by the Adviser to be of equivalent quality,
are subject to greater risk of loss of principal and interest
than higher-rated securities and are considered to be
predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal, which may in any case
decline during sustained periods of deteriorating economic
conditions or rising interest rates. They are also generally
considered to be subject to greater market risk than higher-rated
securities in times of deteriorating economic conditions. In
addition, lower-rated securities may be more susceptible to real
or perceived adverse economic and competitive industry 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. Debt securities
rated Ba by Moody's or BB by S&P are judged to have speculative
characteristics or to be predominantly speculative with respect
to the issuer's ability to pay interest and repay principal.
Debt securities rated B by Moody's and S&P are judged to have
highly speculative characteristics or to be predominantly
speculative. Such securities may have small assurance of
interest and principal payments. Debt securities having the
lowest ratings for non-subordinated debt instruments assigned by
Moody's or S&P (i.e., rated C by Moody's or CCC and lower by S&P)
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.

Adverse publicity and investor perceptions about
lower-rated securities, whether or not based on fundamental
analysis, may tend to decrease the market value and liquidity of
such lower-rated securities. The Adviser 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, the Adviser's research and credit
analysis are a correspondingly important aspect of its program
for managing the Fund's securities than would be the case if the
Fund did not invest in lower-rated securities. In considering
investments for the Fund, the Adviser will attempt to identify
those high-risk, high-yield securities whose financial condition
is adequate to meet future obligations, has improved or is
expected to improve in the future. The Adviser'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.

<PAGE>

Non-rated securities will also be considered for
investment by the Fund when the Adviser 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.

The ratings of debt securities by S&P and Moody's 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 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. Securities rated BBB by S&P or Baa by Moody's
are considered to be investment grade. Securities rated BBB by
S&P or Baa by Moody's are considered to have speculative
characteristics. Sustained periods of deteriorating economic
conditions or 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. See
Appendix C for a description of Moody's and S&P's bond and
commercial paper ratings.

Non-Diversified Status. The Fund 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, the 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-U.S. Federal Income Taxes."
To so qualify, among other requirements, the Fund will limit its
investments so that, at the close of each quarter of the taxable
year, (i) not more than 25% of the market value of the Fund's
total assets will be invested in the securities of a single
issuer, and (ii) with respect to 50% of the market value of its
total assets, not more than 5% of the market value 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 voting
securities of a single issuer. Investments in U.S. Government
Securities are not subject to these limitations. Because the
Fund, as a non-diversified investment company, may invest in a
smaller number of individual issuers than a diversified
investment company, an investment in the Fund may, under certain
circumstances, present greater risk to an investor than an
investment in a diversified investment company.

<PAGE>

Securities issued or guaranteed by foreign governments
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.

Certain Fundamental Investment Policies. The following
restrictions, which supplement those set forth in the Fund's
Prospectus, may not be changed without approval by the vote of a
majority of the Fund's outstanding voting securities, which means
the affirmative vote of the holders of (i) 67% or more or the
shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the
outstanding shares, whichever is less.

To reduce investment risk, as a matter of fundamental
policy the Fund may not:

(i) invest 25% or more of its total assets in
securities of issuers conducting their principal
business activities in the same industry, except
that this restriction does not apply to (a) U.S.
Government Securities; or (b) the purchase of
securities of issuers whose primary business
activity is in the national commercial banking
industry, so long as the Fund's Directors
determine, on the basis of factors such as
liquidity, availability of investments and
anticipated returns, that the Fund's ability to
achieve its investment objective would be
adversely affected if the Fund were not
permitted to invest more than 25% of its total
assets in those securities, and so long as the
Fund notifies its shareholders of any decision
by the Directors to permit or cease to permit
the Fund to invest more than 25% of its total
assets in those securities, such notice to
include a discussion of any increased investment
risks to which the Fund may be subjected as a
result of the Director's determination;

(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 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

<PAGE>

excess of 5% of the value of the Fund's total
assets will be repaid before any investments are
made;

(iii) pledge, hypothecate, mortgage or otherwise
encumber its assets, except to secure permitted
borrowings;

(iv) make loans except through (i) the purchase of
debt obligations in accordance with its
investment objectives and policies; (ii) the
lending of portfolio securities; or (iii) the
use of repurchase agreements;

(v) participate on a joint or joint and several
basis in any securities trading account;

(vi) invest in companies for the purpose of
exercising control;

(vii) issue any senior security within the meaning of
the 1940 Act except that the Fund may write put
and call options;

(viii) make short sales of securities or maintain a
short position, unless at all times when a short
position is open it on an equal amount of such
securities or securities convertible into or
exchangeable for, without payment of any further
consideration, securities of the same issue as,
and equal in amount to, the securities sold
short ("short sales against the box"), and
unless not more than 10% of the Fund's net
assets (taken at market value) is held as
collateral for such sales at any one time (it is
the Fund's present intention to make such sales
only for the purpose of deferring realization of
gain or loss for Federal income tax purposes);
or

(ix) (a) purchase or sell real estate, except that it
may purchase and sell securities of companies
which deal in real estate or interests therein;
(b) purchase or sell commodities or commodity
contracts including futures contracts (except
foreign currencies, foreign currency options and
futures, options and futures on securities and
securities indices and forward contracts or
contracts for the future acquisition or delivery
of securities and foreign currencies and related
options on futures contracts and similar

<PAGE>

contracts); (c) invest in interests in oil, gas,
or other mineral exploration or development
programs; (d) purchase securities on margin,
except for such short-term credits as may be
necessary for the clearance of transactions; and
(e) act as an underwriter of securities, except
that the Fund may acquire restricted securities
under circumstances in which, if such securities
were sold, the Fund might be deemed to be an
underwriter for purposes of the 1933 Act.

The exception contained in clause (i)(b) above is
subject to the operating policy regarding concentration described
in the Prospectus.

In addition to the restrictions set forth above, in
connections with the qualifications of its shares for sale in
certain states, the Fund may not invest in warrants (other than
warrants acquired by the Fund as a part of a unit or attached to
securities at the time of purchase) if as a result of such
warrants valued at the lower of such cost or market would exceed
10% of the value of the Fund's assets at the time of purchase.

_____________________________________________________________

MANAGEMENT OF THE FUND
_____________________________________________________________

Directors and Officers

The Directors and principal officers of the Fund, their
ages and their primary occupations during the past five years are
set forth below. Each such Director and officer is also a
director, trustee or officer of other registered investment
companies sponsored by the Adviser. Unless otherwise specified,
the address of each of the following persons is 1345 Avenue of
the Americas, New York, New York 10105.

Directors

JOHN D. CARIFA,* 53, Chairman of the Board, is the
President, Chief Operating Officer and a Director of ACMC, with
which he has been associated since prior to 1993.

RUTH BLOCK, 67, was formerly an Executive Vice President
and the Chief Insurance Officer of Equitable. She is a Director
of Ecolab Incorporated (specialty chemicals) and Amoco
____________________

* An "interested person" of the Fund as defined in the 1940
Act.

<PAGE>

Corporation (oil and gas). Her address is P.O. Box 4623,
Stamford, Connecticut 06903.

DAVID H. DIEVLER, 69, is an independent consultant. He
was formerly a Senior Vice President of ACMC until December 1994.
His address is P.O. Box 167, Spring Lake, New Jersey 07762.

JOHN H. DOBKIN, 56, has been the President of Historic
Hudson Valley (historic preservation) since prior to 1993.
Previously, he was Director of the National Academy of Design.
His address is 150 White Plains Road, Tarrytown, New York 10591.

WILLIAM H. FOULK, JR., 66, is an Investment Adviser and
an independent consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1993. His address is
Room 100, 2 Greenwich Plaza, Greenwich, Connecticut 06830.

DR. JAMES M. HESTER, 74, is President of the Harry Frank
Guggenheim Foundation, with which he has been associated since
prior to 1993. He was formerly President of New York University,
the New York Botanical Garden and Rector of the United Nations
University. His address is 25 Cleveland Lane, Princeton, New
Jersey 08540.

CLIFFORD L. MICHEL, 59, is a member of the law firm of
Cahill Gordon & Reindel, with which he has been associated since
prior to 1993. He is President and Chief Executive Officer of
Wenonah Development Company (investments) and a Director of
Placer Dome, Inc. (mining). His address is St. Bernard's Road,
Gladstone, New Jersey 07934.

DONALD J. ROBINSON, 64, is Senior Counsel to the law
firm of Orrick, Herrington & Sutcliffe and was formerly a senior
partner and a member of the Executive Committee of that firm. He
was also a Trustee of the Museum of the City of New York from
1977 to 1995. His address is 98 Hell's Peak Road, Weston,
Vermont 05161.

Officers

JOHN D. CARIFA, Chairman and President, (see biography,
above).

MARK H. BREEDON, Senior Vice President, 45, has been a
Vice President of ACMC and a Director and Vice President of
Alliance Capital Limited since prior to 1993.

KATHLEEN A. CORBET, Senior Vice President, 38, is an
Executive Vice President of ACMC, with which she has been
associated since July 1993. Prior thereto she headed Equitable

<PAGE>

Capital Management Corporation's Fixed Income Management
Department since prior to 1993.

THOMAS J. BARDONG, Vice President, 53, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1993.

RUSSELL BRODY, Vice President, 31, is a Vice President
of ACMC, with which he has been associated since April 1997.
Prior thereto, he was the head of European Equity Dealing at
Lombard Odier et Cie since prior to 1993.

DAVID EDGERLY, Vice President, 56, is the General
Manager of Alliance Capital Management (Turkey) Ltd., with which
he has been associated since prior to 1993.

DANIEL V. PANKER, Vice President, 59, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1993.

JEAN VAN DE WALLE, Vice President, 39, has been Vice
President of ACMC since prior to 1993.

EDMUND P. BERGAN, Jr., Secretary, 48, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services ("AFS"), with which he
has been associated since prior to 1993.

ANDREW L. GANGOLF, Assistant Secretary, 44, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since December 1994. Prior thereto he was a Vice
President and Assistant Secretary of Delaware Management Company,
Inc. since prior to 1993.

DOMENICK PUGLIESE, Assistant Secretary, 37, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since May 1995. Prior thereto, he was a Vice
President and Counsel of Concord Holding Corporation since 1994
and Vice President and Associate General Counsel of Prudential
Securities since prior to 1993.

EMILIE D. WRAPP, Assistant Secretary, 42, is a Vice
President and Assistant General Counsel of AFD, with which she
has been associated since prior to 1993.

MARK GERSTEN, Treasurer and Chief Financial Officer, 48,
is a Senior Vice President of AFS, with which he has been
associated since prior to 1993.

VINCENT S. NOTO, Controller, 34, is a Vice President of
AFS with which he has been associated since prior to 1993.

<PAGE>

The aggregate compensation paid by the Fund to each of
the Directors during its current fiscal year, the aggregate
compensation paid to each of the Directors during calendar year
1998 by all of the funds to which the Adviser provides investment
advisory services (collectively, the "Alliance Fund Complex") and
the total number of registered investment companies (and separate
investment portfolios within those companies) in the Alliance
Fund Complex with respect to which each of the Directors serves
as a director or trustee, are set forth below. Neither the Fund
nor any other fund in the Alliance Fund Complex provides
compensation in the form of pension or retirement benefits to any
of its directors or trustees.

Total Number
Total Number of Investment
of Funds in Portfolios Within
the Alliance the Alliance Fund
Total Fund Complex, Complex,
Compensation Including the Including the
From the Fund, as to Fund, as to
Alliance Fund which the which the
Aggregate Complex, Director is a Director is a
Name of Compensation Including the Director or Director or
Director From the Fund Fund Trustee Trustee
___________ _____________ _____________ _____________ _______________

John D. Carifa $0 $0 53 118
Ruth Block $3,036 $_____ 40 81
David H. Dievler $3,039 $_____ 46 83
John H. Dobkin $2,997 $_____ 43 80
William H. Foulk, Jr. $3,053 $_____ 48 113
Dr. James M. Hester $3,019 $_____ 40 77
Clifford L. Michel $3,019 $_____ 41 93
Donald J. Robinson $2,994 $_____ 44 107

As of [ ], 1999, the Directors and officers of
the Fund as a group owned _____% of the Advisor Class shares of
the Fund and less than 1% of the shares of the Fund.

Adviser

Alliance Capital Management L.P., a Delaware limited
partnership with principal offices at 1345 Avenue of the
Americas, New York, New York 10105, has been retained under an
investment advisory agreement (the "Advisory Agreement") to
provide investment advice and, in general, to conduct the
management and investment program of the Fund under the
supervision of the Fund's Board of Directors (see "Management of
the Fund" in the Prospectus).

<PAGE>

The Adviser is a leading international investment
manager supervising client accounts with assets as of December
31, 1998, totaling more than $______ billion (of which more than
$______ billion represented the assets of investment companies).
The Adviser's clients are primarily major corporate employee
benefit funds, public employee retirement systems, investment
companies, foundations and endowment funds. The [ ] registered
investment companies managed by the Adviser, comprising [ ]
separate investment portfolios, currently have more than 3.5
million shareholders. As of December 31, 1998, the Adviser and
its subsidiaries employed approximately 2,000 employees who
operate out of domestic offices and the offices of subsidiaries
in Bahrain, Bangalore, Cairo, Chennai, Hong Kong, Istanbul,
Johannesburg, London, Luxembourg, Madrid, Moscow, Mumbai, New
Delhi, Paris, Pune, Sao Paolo, Seoul, Singapore, Sydney, Tokyo,
Toronto, Vienna and Warsaw. As of December 31, 1998, the Adviser
was retained as an investment manager for employee benefit plan
assets of [ ] of the FORTUNE 100 companies.

ACMC, the sole general partner of, and the owner of a 1%
general partnership interest in the Adviser, is an indirect
wholly-owned subsidiary of the Equitable Life Assurance Society
of the United States ("Equitable"), one of the largest life
insurance companies in the United States and a wholly-owned
subsidiary of the Equitable Companies Incorporated ("ECI"). ECI
is a holding company controlled by AXA-UAP ("AXA"), a French
insurance holding company which at March 1, 1998, beneficially
owned approximately 59% of the outstanding voting shares of ECI.
As of June 30, 1998, ACMC, Inc. and Equitable Capital Management
Corporation, each a wholly-owned direct or indirect subsidiary of
Equitable, together with Equitable, owned in the aggregate
approximately 57% of the issued and outstanding units
representing assignments of beneficial ownership of limited
partnership interests in the Adviser.

AXA is a holding company for an international group of
insurance and related financial services companies. AXA's
insurance operations include activities in life insurance,
property and casualty insurance and reinsurance. The insurance
operations are diverse geographically, with activities
principally in Western Europe, North America and the Asia/Pacific
area. AXA is also engaged in asset management, investment
banking, securities trading, brokerage, real estate and other
financial services activities principally in the United States,
as well as in Western Europe and the Asia/Pacific area.

Based on information provided by AXA, as of March 31,
1998, more than 30% of the voting power of AXA was controlled
directly and indirectly by FINAXA, a French holding company. As
of March 31, 1998 approximately 74% of the voting power of FINAXA
was controlled directly and indirectly by four French mutual

<PAGE>

insurance companies (the "Mutuelles AXA"), one of which, AXA
Assurances I.A.R.D. Mutuelle, itself controlled directly and
indirectly more than 42% of the voting power of FINAXA. Acting
as a group, the Mutuelles AXA control AXA and FINAXA.

Certain other clients of the Adviser may have investment
objectives and policies similar to those of the Fund. The
Adviser may, from time to time, make recommendations which result
in the purchase or sale of a particular security by its other
clients simultaneously with the Fund. If transactions on behalf
of more than one client during the same period increase the
demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price or quantity.
It is the policy of the Adviser to allocate advisory
recommendations and the placing of orders in a manner which is
deemed equitable by the Adviser to the accounts involved,
including the Fund. When two or more of the clients of the
Adviser (including the Fund) are purchasing or selling the same
security on a given day from the same broker-dealer, such
transactions may be averaged as to price.

Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Directors and officers of
the Fund who are affiliated persons of the Adviser. The Adviser
or its affiliates also furnishes the Fund, without charge,
management supervision and assistance and office facilities and
provides persons satisfactory to the Fund's Board of Directors to
serve as the Fund's officers. For the fiscal years ended June
30, 1996, June 30, 1997 and June 30, 1998, the Adviser received
from the Fund advisory fees of $5,562,841, $6,703,589, and
$6,894,591, respectively.

The Fund has, under the Advisory Agreement, assumed the
obligation for payment of all of its other expenses. As to the
obtaining of services other than those specifically provided to
the Fund by the Adviser, the Fund may employ its own personnel.
For such services, it also may utilize personnel employed by the
Adviser or by other subsidiaries of Equitable. In such event,
the services will be provided to the Fund at cost and the
payments specifically approved by the Fund's Board of Directors.
The Fund paid to the Adviser a total of $109,342 in respect of
such services during the fiscal year of the Fund ended June 30,
1998.

Under the Advisory Agreement, the Fund pays the Adviser
a fee at the annual rate of 1.00% of the value of the average
daily net assets of the Fund. The fee is accrued daily and paid
monthly.

<PAGE>

The Advisory Agreement became effective on April 22,
1994 having been approved by the unanimous vote, cast in person,
of the Fund's Directors, including the Directors who are not
parties to the Advisory Agreement or interested persons as
defined in the 1940 Act of any such party, at a meeting called
for that purpose and held on April 19, 1994, and by the Fund's
initial shareholder on April 19, 1994.

The Advisory Agreement will remain in effect until
January 31, 1999 and thereafter for successive twelve-month
periods (computed from each February 1), provided that such
continuance is approved at least annually by a vote of a majority
of the Fund's outstanding voting securities or by the Fund's
Board of Directors, including in either case, approval by a
majority of the Directors who are not parties to the Advisory
Agreement or interested persons of any such party as defined by
the 1940 Act, of any such party at a meeting in person called for
the purpose of voting on such matter. Most recently, continuance
of the Advisory Agreement was approved for the period ending
January 31, 1999 by the Board of Directors, including a majority
of the Directors who are not "interested persons" as defined in
the 1940 Act, at their Regular Meeting held on January 16, 1998 .

The Advisory Agreement is terminable without penalty by
a vote of a majority of the Fund's outstanding voting securities
or by a vote of a majority of the Fund's Directors on 60 days'
written notice, or by the Adviser on 60 days' written notice, and
will automatically terminate in the event of its assignment. The
Advisory Agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence on the part of the
Adviser, or of reckless disregard of its obligations thereunder,
the Adviser shall not be liable for any action or failure to act
in accordance with its duties thereunder.

The Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies,
and is investment adviser to the following registered investment
companies: AFD Exchange Reserves, The Alliance Fund, Alliance
All-Asia Investment Fund, Inc., Alliance Balanced Shares, Inc.,
Alliance Bond Fund, Inc., Alliance Capital Reserves, Alliance
Global Dollar Government Fund, Inc., Alliance Global Environment
Fund, Inc., Alliance Global Small Cap Fund, Inc., Alliance Global
Strategic Income Trust, Inc., Alliance Government Reserves,
Alliance Greater China '97 Fund, Inc., Alliance Growth and Income
Fund, Inc., Alliance High Yield Fund, Inc., Alliance
Institutional Funds, Inc., Alliance Institutional Reserves, Inc.,
Alliance International Fund, Alliance International Premier
Growth Fund, Inc., Alliance Limited Maturity Government Fund,
Inc., Alliance Money Market Fund, Alliance Mortgage Securities
Income Fund, Inc., Alliance Multi-Market Strategy Trust, Inc.,
Alliance Municipal Income Fund, Inc., Alliance Municipal Income

<PAGE>

Fund II, Alliance Municipal Trust, Alliance New Europe Fund,
Inc., Alliance North American Government Income Trust, Inc.,
Alliance Premier Growth Fund, Inc., Alliance Quasar Fund, Inc.,
Alliance Real Estate Investment Fund, Inc., Alliance/Regent
Sector Opportunity Fund, Inc., Alliance Select Investor Series,
Inc., Alliance Technology Fund, Inc., Alliance Utility Income
Fund, Inc., Alliance Variable Products Series Fund, Inc., The
Alliance Portfolios, and The Hudson River Trust, all registered
open-end investment companies; and to ACM Government Income Fund,
Inc., ACM Government Securities Fund, Inc., ACM Government
Spectrum Fund, Inc., ACM Government Opportunity Fund, Inc., ACM
Managed Income Fund, Inc., ACM Managed Multi-Market Trust, Inc.,
ACM Managed Dollar Income Fund, Inc., ACM Municipal Securities
Income Fund, Inc., Alliance All-Market Advantage Fund, Inc.,
Alliance World Dollar Government Fund, Inc., Alliance World
Dollar Government Fund II, Inc., The Austria Fund, Inc., The
Korean Investment Fund, Inc., The Southern Africa Fund, Inc. and
The Spain Fund, Inc., all registered closed-end investment
companies.

_________________________________________________________________

EXPENSES OF THE FUND
_________________________________________________________________

Distribution Services Agreement

The Fund has entered into a Distribution Services
Agreement (the "Agreement") with Alliance Fund Distributors,
Inc., the Fund's principal underwriter (the "Principal
Underwriter"), to permit the Principal Underwriter to distribute
the Funds shares and to permit the Fund to pay distribution
services fees to defray expenses associated with distribution of
its Class A shares, Class B shares and Class C shares in
accordance with a plan of distribution which is included in the
Agreement and has been duly adopted and approved in accordance
with Rule 12b-1 under the 1940 Act (the "Rule 12b-1 Plan").

In approving the Agreement, the Directors of the Fund
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. The
distribution services fee of a particular class will not be used
to subsidize the provision of distribution services with respect
to any other class.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class A shares, in amounts aggregating
$1,560,842 which constituted approximately .30% of the average
daily net assets attributable to Class A shares during the
period, and the Adviser made payments from its own resources as

<PAGE>

described above aggregating $308,534. Of the $1,869,376 paid by
the Fund and the Adviser with respect to the Class A shares under
the Agreement, $64,811 was spent on advertising, $8,945 on the
printing and mailing of prospectuses for persons other than
current shareholders, $1,307,710 for compensation to broker-
dealers and other financial intermediaries (including, $131,414
to the Fund's Principal Underwriters), $160,197 for compensation
to sales personnel, $327,713 was spent on printing of sales
literature, travel, entertainment, due diligence and other
promotional expenses, and $______ was spent on interest on
Class A shares financing.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class B shares, in amounts aggregating
$1,460,673 which constituted approximately 1.00% of the average
daily net assets attributable to Class B shares during the
period, and the Adviser made payments from its own resources as
described above aggregating $1,596,312. Of the $3,056,985 paid
by the Fund and the Adviser with respect to the Class B shares
under the Agreement, $88,383 was spent on advertising, $12,552 on
the printing and mailing of prospectuses for persons other than
current shareholders, $2,403,800 for compensation to broker-
dealers and other financial intermediaries (including, $193,456
to the Fund's Principal Underwriters), $122,921 for compensation
to sales personnel, $275,020 was spent on printing of sales
literature, travel, entertainment, due diligence and other
promotional expenses, and $154,309 was spent on interest on
Class B shares financing.

During the Fund's fiscal year ended June 30, 1998, the
Fund paid distribution services fees for expenditures under the
Agreement, with respect to Class C shares, in amounts aggregating
$219,003, which constituted approximately 1.00% of the average
daily net assets attributable to Class C shares during the
period, and the Adviser made payments from its own resources as
described above aggregating $286,840. Of the $505,843 paid by
the Fund and the Adviser with respect to the Class C shares under
the Agreement, $32,151 was spent on advertising, $3,946 on the
printing and mailing of prospectuses for persons other than
current shareholders, $307,153 for compensation to broker-dealers
and other financial intermediaries (including, $67,162 to the
Fund's Principal Underwriters), $43,586 for compensation to sales
personnel, $95,080 was spent on printing of sales literature,
travel, entertainment, due diligence and other promotional
expenses, and $23,927 was spent on interest on Class C shares
financing.

Distribution services fees are accrued daily and paid
monthly and are charged as expenses of the Fund as accrued. The
distribution services fees attributable to the Class B shares and

<PAGE>

Class C shares are designed to permit an investor to purchase
such shares through broker-dealers without the assessment of an
initial sales charge, and at the same time to permit the
Principal Underwriter to compensate broker-dealers in connection
with the sale of such shares. In this regard the purpose and
function of the combined contingent deferred sales charge and
distribution services fee on the Class B shares and Class C
shares are the same as those of the initial sales charge and
distribution services fee with respect to the Class A shares in
that in each case the sales charge and distribution services fee
provide for the financing of the distribution of the relevant
class of the Fund's shares.

In the event that the Agreement is terminated or not
continued with respect to the Class A shares, Class B shares,
Class C shares or Advisor Class shares, (i) no distribution
services fees (other than current amounts accrued but not yet
paid) would be owed by the Fund to the Principal Underwriter with
respect to that class and (ii) the Fund would not be obligated to
pay the Principal Underwriter for any amounts expended under the
Agreement not previously recovered by the Principal Underwriter
from distribution services fees in respect of shares of such
class or through deferred sales charges.

The Agreement will continue in effect for successive
twelve-month periods (computed from each February 1) with respect
to each class of the Fund, provided, however, that such
continuance is specifically approved at least annually by the
Directors of the Fund or by vote of the holders of a majority of
the outstanding voting securities (as defined in the 1940 Act) of
that class, and in either case, by a majority of the Directors of
the Fund who are not parties to the Agreement or interested
persons, as defined in the 1940 Act, of any such party (other
than as directors of the Fund) and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 Plan or any
agreement related thereto. The Agreement was most recently
approved for the period ending January 31, 1999 by the Directors
of the Fund, including all of the disinterested Directors, at a
meeting held on January 13, 1998.

The Adviser may from time to time and from its own funds
or such other resources as may be permitted by rules of the
Commission make payments for distribution services to the
Principal Underwriter; the latter may in turn pay part or all of
such compensation to brokers or other persons for their
distribution assistance.

Unreimbursed distribution expenses incurred as of the
end of the Fund's most recently completed fiscal period, and
carried over for reimbursement in future years in respect of the

<PAGE>

Class B and Class C shares for the Fund were, as of that time, as
follows: Class B - ($6,609,791) (4.23% as % of Net Assets of
Class); Class C - ($537,949) (2.02% as % of Net Assets of
Class).

The Rule 12b-1 Plan is 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 Fund's 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
services arrangements would be made and that shareholders would
not be adversely affected.

Transfer Agency Agreement

Alliance Fund Services, Inc., an indirect wholly-owned
subsidiary of the Adviser located at 500 Plaza Drive, Secaucus,
New Jersey 07904, receives a transfer agency fee per account
holder of the Class A shares, Class B shares, Class C shares and
Advisor Class shares of the Fund, plus reimbursement for
out-of-pocket expenses. The transfer agency fee with respect to
the Class B and Class C shares is higher than the transfer agency
fee with respect to the Class A and Advisor Class shares,
reflecting the additional costs associated with the Class B and
Class C contingent deferred sales charge. For the fiscal year
ended June 30, 1998, the Fund paid Alliance Fund Services, Inc.
$659,710 pursuant to the Transfer Agency Agreement.

<PAGE>

________________________________________________________________

PURCHASE OF SHARES
________________________________________________________________

The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How To Buy Shares."

General

Shares of the Fund are offered on a continuous basis at
a price equal to their net asset value plus an initial sales
charge at the time of purchase ("Class A shares"), with a
contingent deferred sales charge ("Class B shares"), without any
initial sales charge and, as long as the shares are held for one
year or more, without any contingent deferred sales charge
("Class C shares"), or, to investors eligible to purchase Advisor
Class shares, without any initial, contingent deferred or asset-
based sales charge, in each case as described below. Shares of
the Fund that are offered subject to a sales charge are offered
through (i) investment dealers that are members of the National
Association of Securities Dealers, Inc. and have entered into
selected dealer agreements with the Principal Underwriter
("selected dealers"), (ii) depository institutions and other
financial intermediaries or their affiliates, that have entered
into selected agent agreements with the Principal Underwriter
("selected agents"), and (iii) the Principal Underwriter.

Advisor Class shares of the Fund may be purchased and
held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers
or other financial intermediaries and approved by the Principal
Underwriter, (ii) through self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least
1,000 participants or $25 million in assets, (iii) by the
categories of investors described in clauses (i) through (iv)
under "--Sales at Net Asset Value" (other than officers,
directors and present and full-time employees of selected dealers
or agents, or relatives of such person, or any trust, individual
retirement account or retirement plan account for the benefit of
such relative, none of whom is eligible on the basis solely of
such status to purchase and hold Advisor Class shares), or
(iv) by directors and present or retired full-time employees of
CB Richard Ellis, Inc. Generally, a fee-based program must
charge an asset-based or other similar fee and must invest at
least $250,000 in Advisor Class shares of the Fund in order to be
approved by the Principal Underwriter for investment in Advisor
Class shares.

<PAGE>

Investors may purchase shares of the Fund either through
selected broker-dealers, agents, financial intermediaries or
other financial representatives or directly through the Principal
Underwriter. A transaction, service, administrative or other
similar fee may be charged by your broker-dealer, agent,
financial intermediary or other financial representative with
respect to the purchase, sale or exchange of Class A, Class B,
Class C or Advisor Class shares made through such financial
representative. Such financial representative may also impose
requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed
by the Fund, including requirements as to the minimum initial and
subsequent investment amounts. Sales personnel of selected
dealers and agents distributing the Fund's shares may receive
differing compensation for selling Class A, Class B, Class C or
Advisor Class shares.

The Fund may refuse any order for the purchase of
shares. The Fund reserves the right to suspend the sale of its
shares to the public in response to conditions in the securities
markets or for other reasons.

The public offering price of shares of the Fund is their
net asset value, plus, in the case of Class A shares, a sales
charge which will vary depending on the purchase alternative
chosen by the investor, as shown in the table below under "Class
A Shares." On each Fund business day on which a purchase or
redemption order is received by the Fund and trading in the types
of securities in which the Fund invests might materially affect
the value of Fund shares, the per share net asset value is
computed as of the next close of regular trading on the New York
Stock Exchange (the "Exchange") (currently 4:00 p.m. Eastern
time) by dividing the value of the Fund's total assets, less its
liabilities, by the total number of its shares then outstanding.
A Fund business day is any day on which the Exchange is open for
trading.

The respective per share net asset values of the Class
A, Class B, Class C and Advisor Class shares are expected to be
substantially the same. Under certain circumstances, however,
the per share net asset values of the Class B and Class C shares
may be lower than the per share net asset value of the Class A
and Advisor Class shares, as a result of the differential daily
expense accruals of the distribution and transfer agency fees
applicable with respect to those classes of shares. Even under
those circumstances, the per share net asset values of the four
classes eventually will tend to converge immediately after the
payment of dividends, which will differ by approximately the
amount of the expense accrual differential among the classes.

<PAGE>

The Fund will accept unconditional orders for its shares
to be executed at the public offering price equal to their net
asset value next determined (plus applicable Class A sales
charges), as described below. Orders received by the Principal
Underwriter prior to the close of regular trading on the Exchange
on each day the Exchange is open for trading are priced at the
net asset value computed as of the close of regular trading on
the Exchange on that day (plus applicable Class A sales charges).
In the case of orders for purchase of shares placed through
selected dealers, agents or financial representatives, as
applicable, the applicable public offering price will be the net
asset value as so determined, but only if the selected dealer,
agent or financial representative receives the order prior to the
close of regular trading on the Exchange and transmits it to the
Principal Underwriter prior to 5:00 p.m. Eastern time. The
selected dealer, agent or financial representative, as
applicable, is responsible for transmitting such orders by
5:00 p.m. Eastern time (certain selected dealers, agents or
financial representatives may enter into operating agreements
permitting them to transmit purchase information to the Principal
Underwriter after 5:00 p.m. Eastern time and receive that day's
net asset value). If the selected dealer, agent or financial
representative fails to do so, the investor's right to that day's
closing price must be settled between the investor and the
selected dealer, agent or financial representative, as
applicable. If the selected dealer, agent or financial
representative, as applicable, receives the order after the close
of regular trading on the Exchange, the price will be based on
the net asset value determined as of the close of regular trading
on the Exchange on the next day it is open for trading.

Following the initial purchase of Fund shares, a
shareholder may place orders to purchase additional shares by
telephone if the shareholder has completed the appropriate
portion of the Subscription Application or an "Autobuy"
application obtained by calling the "Literature" telephone number
shown on the cover of this Statement of Additional Information.
Except with respect to certain omnibus accounts, telephone
purchase orders may not exceed $500,000. Payment for shares
purchased by telephone can be made only by Electronic Funds
Transfer from a bank account maintained by the shareholder at a
bank that is a member of the National Automated Clearing House
Association ("NACHA"). If a shareholder's telephone purchase
request is received before 3:00 p.m. Eastern time on a Fund
business day, the order to purchase shares is automatically
placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of
the close of business on such following business day.

Full and fractional shares are credited to a
subscriber's account in the amount of his or her subscription.

<PAGE>

As a convenience to the subscriber, and to avoid unnecessary
expense to the Fund, stock certificates representing shares of
the Fund are not issued except upon written request to the Fund
by the shareholder or his or her authorized selected dealer or
agent. This facilitates later redemption and relieves the
shareholder of the responsibility for and inconvenience of lost
or stolen certificates. No certificates are issued for
fractional shares, although such shares remain in the
shareholder's account on the books of the Fund.

In addition to the discount or commission amount paid to
dealers or agents, the Principal Underwriter from time to time
pays additional cash or other incentives to dealers or agents, in
connection with the sale of shares of the Fund. Such additional
amounts may be utilized, in whole or in part, 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, as defined below, during a specific period
of time. On some occasions, such cash or other 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
taken by persons associated with a dealer or agent 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.

Class A, Class B, Class C and Advisor Class shares each
represent an interest in the same portfolio of investments of the
Fund, have the same rights and are identical in all respects,
except that (i) Class A shares bear the expense of the initial
sales charge (or contingent deferred sales charge, when
applicable) and Class B and Class C shares bear the expense of
the deferred sales charge, (ii) Class B shares and Class C shares
each bear the expense of a higher distribution services fee than
do Class A shares, and Advisor Class shares do not bear such a
fee, (iii) Class B and Class C shares bear higher transfer agency
costs than do Class A and Advisor Class shares, (iv) each of
Class A, Class B and Class C shares has exclusive voting rights
with respect to provisions of the Rule 12b-1 Plan pursuant to
which its distribution services fee is paid and other matters for
which separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would
materially increase the amount to be paid thereunder with respect
to the Class A shares, then such amendment will also be submitted
to the Class B and Advisor Class shareholders and the Class A,
Class B and Advisor Class shareholders will vote separately by
class and (v) Class B and Advisor Class shares are subject to a

<PAGE>

conversion feature. Each class has different exchange privileges
and certain different shareholder service options available.

The Directors of the Fund have determined that currently
no conflict of interest exists between or among the Class A,
Class B, Class C and Advisor Class shares. On an ongoing basis,
the Directors of the Fund, pursuant to their fiduciary duties
under the 1940 Act and state law, will seek to ensure that no
such conflict arises.

Alternative Retail Purchase Arrangements -- Class A, Class B
and Class C Shares**

Class A, Class B and Class C shares have the following
alternative purchase arrangements: Class A shares are sold to
investors choosing the initial sales charge alternative, Class B
shares are sold to investors choosing the deferred sales charge
alternative, and Class C shares are sold to investors choosing
the asset-based sales charge alternative. These alternative
purchase arrangements permit an investor to choose the method of
purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the
shares, and other circumstances. Investors should consider
whether, during the anticipated life of their investment in the
Fund, the accumulated distribution services fee and contingent
deferred sales charges on Class B shares prior to conversion, or
the accumulated distribution services fee and contingent deferred
sales charges on Class C shares, would be less than the initial
sales charge and accumulated distribution services fee on Class A
shares purchased at the same time, and to what extent such
differential would be offset by the higher return of Class A
shares. Class A shares will normally be more beneficial than
Class B shares to the investor who qualifies for reduced initial
sales charges on Class A shares, as described below. In this
regard, the Principal Underwriter will reject any order (except
orders from certain retirement plans and certain employee benefit
plans) for more than $250,000 for Class B shares. (See Appendix D
for information concerning the eligibility of certain employee
benefit plans to purchase Class B shares at net asset value
without being subject to a contingent deferred sales charge and
the ineligibility of certain such plans to purchase Class A
Shares.) Class C shares will normally not be suitable for the
investor who qualifies to purchase Class A shares at net asset
value. For this reason, the Principal Underwriter will reject
any order for more than $1,000,000 for Class C shares.

____________________

** Advisor Class shares are sold only to investors described
above in this section "--General."

<PAGE>

Class A shares are subject to a lower distribution
services fee and, accordingly, pay correspondingly higher
dividends per share than Class B shares or Class C shares.
However, because initial sales charges are deducted at the time
of purchase, investors purchasing Class A shares would not have
all their funds invested initially and, therefore, would
initially own fewer shares. Investors not qualifying for reduced
initial sales charges who expect to maintain their investment for
an extended period of time might consider purchasing Class A
shares because the accumulated continuing distribution charges on
Class B shares or Class C shares may exceed the initial sales
charge on Class A shares during the life of the investment.
Again, however, such investors must weigh this consideration
against the fact that, because of such initial sales charges, not
all their funds will be invested initially.

Other investors might determine, however, that it would
be more advantageous to purchase Class B shares or Class C shares
in order to have all their funds invested initially, although
remaining subject to higher continuing distribution charges and,
being subject to a contingent deferred sales charge for a four-
year and one-year period, respectively. For example, based on
current fees and expenses, an investor subject to the 4.25%
initial sales charge on Class A shares would have to hold his or
her investment approximately seven years for the Class C
distribution services fee, to exceed the initial sales charge
plus the accumulated distribution services fee of Class A shares.
In this example, an investor intending to maintain his or her
investment for a longer period might consider purchasing Class A
shares. This example does not take into account the time value
of money, which further reduces the impact of the Class C
distribution services fees on the investment, fluctuations in net
asset value or the effect of different performance assumptions.

Those investors who prefer to have all of their funds
invested initially but may not wish to retain Fund shares for the
four-year period during which Class B shares are subject to a
contingent deferred sales charge may find it more advantageous to
purchase Class C shares.

During the Fund's fiscal years ended June 30, 1998, June
30, 1997, and June 30, 1996, the aggregate amount of underwriting
commission payable with respect to shares of the Fund was
$1,205,560, $816,186 and $295,136, respectively. Of that amount,
the Principal Underwriter received the amount of $79,491, $36,182
and $6,949, respectively, representing that portion of the sales
charges paid on shares of the Fund sold during the year which was
not reallowed to selected dealers (and was, accordingly, retained
by the Principal Underwriter). During the Fund's fiscal years
ended in 1998, 1997 and 1996, the Principal Underwriter received
contingent deferred sales charges of $257, $0, and $0,

<PAGE>

respectively, on Class A shares, $273,885, $309,365, and
$458,792, respectively, on Class B shares, and $17,603, $1,116,
and $0, respectively on Class C shares.

Class A Shares

The public offering price of Class A shares is the net
asset value plus a sales charge, as set forth below.

Sales Charge

Commission Discount Or
Charge Sales Charge
As % of To Dealers
As % of the Public Or Agents
Amount of Net Amount Offering As % of
Purchase Invested Price Offering Price
_________ __________ __________ ______________

Less than
$100,000 4.44% 4.25% 4.00%
$100,000 but
less than
$250,000 3.36 3.25 3.00
$250,000 but
less than
$500,000 2.30 2.25 2.00
$500,000 but
less than
$1,000,000* 1.78 1.75 1.50

* There is no initial sales charge on transactions of $1,000,000
or more.

With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a
contingent deferred sales charge equal to 1% of the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption. Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions. The
contingent deferred sales charge on Class A shares will be waived
on certain redemptions, as described below under "--Class B
shares." In determining the contingent deferred sales charge
applicable to a redemption of Class A shares, it will be assumed
that the redemption is, first, of any shares that are not subject
to a contingent deferred sales charge (for example, because an
initial sales charge was paid with respect to the shares, or they
have been held beyond the period during which the charge applies

<PAGE>

or were acquired upon the reinvestment of dividends or
distributions) and, second, of shares held longest during the
time they are subject to the sales charge. Proceeds from the
contingent deferred sales charge on Class A shares are paid to
the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sales of Class A shares, such as the payment
of compensation to selected dealers and agents for selling Class
A Shares. With respect to purchases of $1,000,000 or more made
through selected dealers or agents, the Adviser may, pursuant to
the Distribution Services Agreement described above, pay such
dealers or agents from its own resources a fee of up to 1% of the
amount invested to compensate such dealers or agents for their
distribution assistance in connection with such purchases.

No initial sales charge is imposed on Class A shares
issued (i) pursuant to the automatic reinvestment of income
dividends or capital gains distributions, (ii) in exchange for
Class A shares of other "Alliance Mutual Funds" (as that term is
defined under "Combined Purchase Privilege" below), except that
an initial sales charge will be imposed on Class A shares issued
in exchange for Class A shares of AFD Exchange Reserves ("AFDER")
that were purchased for cash without the payment of an initial
sales charge and without being subject to a contingent deferred
sales charge or (iii) upon the automatic conversion of Class B
shares or Advisor Class shares as described below under "Class B
Shares--Conversion Feature" and "--Conversion of Advisor Class
Shares to Class A Shares." The Fund receives the entire net
asset value of its Class A shares sold to investors. The
Principal Underwriter's commission is the sales charge shown
above less any applicable discount or commission "reallowed" to
selected dealers and agents. The Principal Underwriter will
reallow discounts to selected dealers and agents in the amounts
indicated in the table above. In this regard, the Principal
Underwriter may elect to reallow the entire sales charge to
selected dealers and agents for all sales with respect to which
orders are placed with the Principal Underwriter. A selected
dealer who receives reallowance in excess of 90% of such a sales
charge may be deemed to be an "underwriter" under the 1933 Act.

Set forth below is an example of the method of computing
the offering price of the Class A shares. The example assumes a
purchase of Class A shares of the Fund aggregating less than
$100,000 subject to the schedule of sales charges set forth above
at a price based upon the net asset value of Class A shares of
the Fund on June 30, 1998.

<PAGE>

Net Asset Value per Class A share
at June 30, 1998 $12.67

Class A Per Share Sales Charge -
4.25% of offering price
(4.44% of net asset value per share) $0.56
_____
Class A Per Share Offering Price to
the Public $13.23
======

Investors choosing the initial sales charge alternative
may under certain circumstances be entitled to pay (i) no initial
sales charge (but may be subject in most such cases to a
contingent deferred sales charge) or (ii) a reduced initial sales
charge. The circumstances under which such investors may pay a
reduced initial sales charge are described below.

Combined Purchase Privilege. Certain persons may
qualify for the sales charge reductions indicated in the schedule
of such charges above by combining purchases of shares of the
Fund into a single "purchase," if the resulting "purchase" totals
at least $100,000. The term "purchase" refers to: (i) a single
purchase by an individual, or to concurrent purchases, which in
the aggregate are at least equal to the prescribed amounts, by an
individual, his or her spouse and their children under the age of
21 years purchasing shares of the Fund for his, her or their own
account(s); (ii) a single purchase by a trustee or other
fiduciary purchasing shares for a single trust, estate or single
fiduciary account although more than one beneficiary is involved;
or (iii) a single purchase for the employee benefit plans of a
single employer. The term "purchase" also includes purchases by
any "company," as the term is defined in the 1940 Act, but does
not include purchases by any such company which has not been in
existence for at least six months or which has no purpose other
than the purchase of shares of the Fund or shares of other
registered investment companies at a discount. The term
"purchase" does not include purchases by any group of individuals
whose sole organizational nexus is that the participants therein
are credit card holders of a company, policy holders of an
insurance company, customers of either a bank or broker-dealer or
clients of an investment adviser. A "purchase" may also include
shares, purchased at the same time through a single selected
dealer or agent, of any other "Alliance Mutual Fund." Currently,
the Alliance Mutual Funds include:

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.

<PAGE>

-Corporate Bond Portfolio
-U.S. Government Portfolio
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance International Fund
Alliance Limited Maturity Government Fund, Inc.
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
-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
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios
-Alliance Growth Fund
-Alliance Conservative Investors Fund
-Alliance Growth Investors Fund
-Alliance Short-Term U.S. Government Fund

Prospectuses for the Alliance Mutual Funds may be
obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "Literature" telephone number shown on
the front cover of this Statement of Additional Information.

Cumulative Quantity Discount (Right of Accumulation).
An investor's purchase of additional Class A shares of the Fund

<PAGE>

may qualify for a Cumulative Quantity Discount. The applicable
sales charge will be based on the total of:

(i) the investor's current purchase;

(ii) the net asset value (at the close of business on
the previous day) of (a) all shares of the Fund
held by the investor and (b) all shares of any
other Alliance Mutual Fund held by the investor;
and

(iii) the net asset value of all shares described in
paragraph (ii) owned by another shareholder
eligible to combine his or her purchase with that
of the investor into a single "purchase" (see
above).

For example, if an investor owned shares of an Alliance
Mutual Fund worth $200,000 at their then current net asset value
and, subsequently, purchased Class A shares of the Fund worth an
additional $100,000, the initial sales charge for the $100,000
purchase would be at the 2.25% rate applicable to a single
$300,000 purchase of shares of the Fund, rather than the 3.25%
rate.

To qualify for the Combined Purchase Privilege or to
obtain the Cumulative Quantity Discount on a purchase through a
selected dealer or agent, the investor or selected dealer or
agent must provide the Principal Underwriter with sufficient
information to verify that each purchase qualifies for the
privilege or discount.

Statement of Intention. Class A investors may also
obtain the reduced sales charges shown in the table above by
means of a written Statement of Intention, which expresses the
investor's intention to invest not less than $100,000 within a
period of 13 months in Class A shares (or Class A, Class B, Class
C and/or Advisor Class shares) of the Fund or any other Alliance
Mutual Fund. Each purchase of shares under a Statement of
Intention will be made at the public offering price or prices
applicable at the time of such purchase to a single transaction
of the dollar amount indicated in the Statement of Intention. At
the investor's option, a Statement of Intention may include
purchases of shares of the Fund or any other Alliance Mutual Fund
made not more than 90 days prior to the date that the investor
signs a Statement of Intention; however, the 13-month period
during which the Statement of Intention is in effect will begin
on the date of the earliest purchase to be included.

Investors qualifying for the Combined Purchase Privilege
described above may purchase shares of the Alliance Mutual Funds

<PAGE>

under a single Statement of Intention. For example, if at the
time an investor signs a Statement of Intention to invest at
least $100,000 in Class A shares of the Fund, the investor and
the investor's spouse each purchase shares of the Fund worth
$20,000 (for a total of $40,000), it will only be necessary to
invest a total of $60,000 during the following 13 months in
shares of the Fund or any other Alliance Mutual Fund, to qualify
for the 3.25% sales charge on the total amount being invested
(the sales charge applicable to an investment of $100,000).

The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated. The
minimum initial investment under a Statement of Intention is 5%
of such amount. Shares purchased with the first 5% of such
amount will be held in escrow (while remaining registered in the
name of the investor) to secure payment of the higher initial
sales charge applicable to the shares actually purchased if the
full amount indicated is not purchased, and such escrowed shares
will be involuntarily redeemed to pay the additional sales
charge, if necessary. Dividends on escrowed shares, whether paid
in cash or reinvested in additional Fund shares, are not subject
to escrow. When the full amount indicated has been purchased,
the escrow will be released. To the extent that an investor
purchases more than the dollar amount indicated on the Statement
of Intention and qualifies for a further reduced sales charge,
the sales charge will be adjusted for the entire amount purchased
at the end of the 13-month period. The difference in the sales
charge will be used to purchase additional shares of the Fund
subject to the rate of the sales charge applicable to the actual
amount of the aggregate purchases.

Investors wishing to enter into a Statement of Intention
in conjunction with their initial investment in Class A shares of
the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus while current
Class A shareholders desiring to do so can obtain a form of
Statement of Intention by contacting Alliance Fund Services, Inc.
at the address or telephone numbers shown on the cover of this
Statement of Additional Information.

Certain Retirement Plans. Multiple participant payroll
deduction retirement plans may also purchase shares of the Fund
or any other Alliance Mutual Fund at a reduced sales charge on a
monthly basis during the 13-month period following such a plan's
initial purchase. The sales charge applicable to such initial
purchase of shares of the Fund will be that normally applicable,
under the schedule of sales charges set forth in this Statement
of Additional Information, to an investment 13 times larger than
such initial purchase. The sales charge applicable to each
succeeding monthly purchase will be that normally applicable,
under such schedule, to an investment equal to the sum of (i) the

<PAGE>

total purchase previously made during the 13-month period and
(ii) the current month's purchase multiplied by the number of
months (including the current month) remaining in the 13-month
period. Sales charges previously paid during such period will
not be retroactively adjusted on the basis of later purchases.

Reinstatement Privilege. A shareholder who has caused
any or all of his or her Class A or Class B shares of the Fund to
be redeemed or repurchased may reinvest all or any portion of the
redemption or repurchase proceeds in Class A shares of the Fund
at net asset value without any sales charge, provided that (i)
such reinvestment is made within 120 calendar days after the
redemption or repurchase date, and (ii) for Class B shares, a
contingent deferred sales charge has been paid and the Principal
Underwriter has approved, at its discretion, the reinstatement of
such shares. Shares are sold to a reinvesting shareholder at the
net asset value next determined as described above. A
reinstatement pursuant to this privilege will not cancel the
redemption or repurchase transaction; therefore, any gain or loss
so realized will be recognized for Federal income tax purposes
except that no loss will be recognized to the extent that the
proceeds are reinvested in shares of the Fund within 30 calendar
days after the redemption or repurchase transaction. Investors
may exercise the reinstatement privilege by written request sent
to the Fund at the address shown on the cover of this Statement
of Additional Information.

Sales at Net Asset Value. The Fund may sell its Class A
shares at net asset value (i.e., without any initial sales
charge) and without any contingent deferred sales charge to
certain categories of investors including: (i) investment
management clients of the Adviser or its affiliates; (ii)
officers and present or former Directors of the Fund; present or
former directors and trustees of other investment companies
managed by the Adviser; present or retired full-time employees of
the Adviser, the Principal Underwriter, Alliance Fund Services,
Inc. and their affiliates; officers and directors of ACMC, the
Principal Underwriter, Alliance Fund Services, Inc. and their
affiliates; officers, directors and present full-time employees
of selected dealers or agents; or the spouse, sibling, direct
ancestor or direct descendant (collectively "relatives") of any
such person; or any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative; or the estate of any such person or relative, if such
sales are made for investment purposes (such shares may not be
resold except to the Fund); (iii) the Adviser, Principal
Underwriter, Alliance Fund Services, Inc. and their affiliates;
certain employee benefit plans for employees of the Adviser, the
Principal Underwriter, Alliance Fund Services, Inc. and their
affiliates; (iv) registered investment advisers or other
financial intermediaries who charge a management, consulting or

<PAGE>

other fee for their service and who purchase shares through a
broker or agent approved by the Principal Underwriter and clients
of such registered investment advisers or financial
intermediaries whose accounts are linked to the master account of
such investment adviser or financial intermediary on the books of
such approved broker or agent; (v) persons participating in a
fee-based program, sponsored and maintained by a registered
broker-dealer or other financial intermediary and approved by the
Principal Underwriter, pursuant to which such persons pay an
asset-based fee to such broker-dealer or financial intermediary,
or its affiliate or agent, for services in the nature of
investment advisory or administrative services; (vi) persons who
establish to the Principal Underwriter's satisfaction that they
are investing within such time period as may be designated by the
Principal Underwriter, proceeds of redemption of shares of such
other registered investment companies as may be designated from
time to time by the Principal Underwriter; and (vii) employer-
sponsored qualified pension or profit-sharing plans (including
Section 401(k) plans), custodial accounts maintained pursuant to
Section 403(b)(7) retirement plans and individual retirement
accounts (including individual retirement accounts to which
simplified employee pension ("SEP") contributions are made), if
such plans or accounts are established or administered under
programs sponsored by administrators or other persons that have
been approved by the Principal Underwriter.

Class B Shares

Investors may purchase Class B shares at the public
offering price equal to the net asset value per share of the
Class B shares on the date of purchase without the imposition of
a sales charge at the time of purchase. The Class B shares are
sold without an initial sales charge so that the Fund will
receive the full amount of the investor's purchase payment.

Proceeds from the contingent deferred sales charge are
paid to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class B shares, such as the
payment of compensation to selected dealers and agents for
selling Class B shares. The combination of the contingent
deferred sales charge and the distribution services fee enables
the Fund to sell the Class B shares without a sales charge being
deducted at the time of purchase. The higher distribution
services fee incurred by Class B shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares.

Contingent Deferred Sales Charge. Class B shares that
are redeemed within four years of purchase will be subject to a

<PAGE>

contingent deferred sales charge at the rates set forth below
charged as a percentage of the dollar amount subject thereto. The
charge will be assessed on an amount equal to the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption. Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.

To illustrate, assume that an investor purchased 100
Class B shares at $10 per share (at a cost of $1,000) and in the
second year after purchase, the net asset value per share is $12
and, during such time, the investor has acquired 10 additional
Class B shares upon dividend reinvestment. If at such time the
investor makes his or her first redemption of 50 Class B shares
(proceeds of $600), 10 Class B shares will not be subject to the
charge because of dividend reinvestment. With respect to the
remaining 40 Class B shares, the charge is applied only to the
original cost of $10 per share and not to the increase in net
asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds will be charged at a rate of 3.0% (the
applicable rate in the second year after purchase, as set forth
below).

The amount of the contingent deferred sales charge, if
any, will vary depending on the number of years from the time of
payment for the purchase of Class B shares until the time of
redemption of such shares.

Year Contingent Deferred Sales Charge as a %
Since Purchase of Dollar Amount Subject to Charge

First 4.00%
Second 3.00%
Third 2.00%
Fourth 1.00%
Fifth and thereafter None

In determining the contingent deferred sales charge
applicable to a redemption of Class B shares, it will be assumed,
that the redemption is, first, of any shares that were acquired
upon the reinvestment of dividends or distributions and, second,
of shares held longest during the time they are subject to the
sales charge. When shares acquired in an exchange are redeemed,
the applicable contingent deferred sales charge and conversion
schedules will be the schedules that applied at the time of the
purchase of shares of the corresponding class of the Alliance
Mutual Fund originally purchased by the shareholder.

The contingent deferred sales charge is waived on
redemptions of shares (i) following the death or disability, as

<PAGE>

defined in the Internal Revenue Code of 1986, as amended (the
"Code"), of a shareholder, (ii) to the extent that the redemption
represents a minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who
has attained the age of 70-1/2, (iii) that had been purchased by
present or former Directors of the Fund, by the relative of any
such person, by any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative, or by the estate of any such person or relative, or
(iv) pursuant to a systematic withdrawal plan (see "Shareholder
Services - Systemic Withdrawal Plan" below).

Conversion Feature. Eight years after the end of the
calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A
shares and will no longer be subject to a higher distribution
services fee. Such conversion will occur on the basis of the
relative net asset values of the two classes, without the
imposition of any sales load, fee or other charge. The purpose
of the conversion feature is to reduce the distribution services
fee paid by holders of Class B shares that have been outstanding
long enough for the Principal Underwriter to have been
compensated for distribution expenses incurred in the sale of
such shares.

For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's account will
be considered to be held in a separate sub-account. Each time
any Class B shares in the shareholder's account (other than those
in the sub-account) convert to Class A, an equal pro-rata portion
of the Class B shares in the sub-account will also convert to
Class A.

The conversion of Class B shares to Class A shares is
subject to the continuing availability of an opinion of counsel
to the effect that the conversion of Class B shares to Class A
shares does not constitute a taxable event under federal income
tax law. The conversion of Class B shares to Class A shares may
be suspended if such an opinion is no longer available at the
time such conversion is to occur. In that event, no further
conversions of Class B shares would occur, and shares might
continue to be subject to the higher distribution services fee
for an indefinite period which may extend beyond the period
ending eight years after the end of the calendar month in which
the shareholder's purchase order was accepted.

<PAGE>

Class C Shares

Investors may purchase Class C shares at the public
offering price equal to the net asset value per share of the
Class C shares on the date of purchase without the imposition of
a sales charge either at the time of purchase or, as long as the
shares are held for one year or more, upon redemption. Class C
shares are sold without an initial sales charge so that the Fund
will receive the full amount of the investor's purchase payment
and, as long as the shares are held for one year or more, without
a contingent deferred sales charge so that the investor will
receive as proceeds upon redemption the entire net asset value of
his or her Class C shares. The Class C distribution services fee
enables the Fund to sell Class C shares without either an initial
or contingent deferred sales charge, as long as the shares are
held for one year or more. Class C shares do not convert to any
other class of shares of the Fund and incur higher distribution
services fees than Class A shares, and will thus have a higher
expense ratio and pay correspondingly lower dividends than Class
A shares.

Class C shares that are redeemed within one year of
purchase will be subject to a contingent deferred sales charge of
1%, charged as a percentage of the dollar amount subject thereto.
The charge will be assessed on an amount equal to the lesser of
the cost of the shares being redeemed or their net asset value at
the time of redemption. Accordingly, no sales charge will be
imposed on increases in net asset value above the initial
purchase price. In addition, no charge will be assessed on
shares derived from reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge on Class C
shares will be waived on certain redemptions, as described above
under "--Class B Shares." In determining the contingent deferred
sales charge applicable to a redemption of Class C shares, it
will be assumed that the redemption is, first, of any shares that
are not subject to a contingent deferred sales charge (for
example, because the shares have been held beyond the period
during which the charge applies or were acquired upon the
reinvestment of dividends or distributions) and, second, of
shares held longest during the time they are subject to the sales
charge.

Proceeds from the contingent deferred sales charge are
paid to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class C shares, such as the
payment of compensation to selected dealers and agents for
selling Class C shares. The combination of the contingent
deferred sales charge and the distribution services fee enables
the Fund to sell the Class C shares without a sales charge being

<PAGE>

deducted at the time of purchase. The higher distribution
services fee incurred by Class C shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares.

Conversion of Advisor Class Shares to Class A Shares

Advisor Class shares may be held solely through the fee-
based program accounts, employee benefit plans and registered
investment advisory or other financial intermediary relationships
described above under "Purchase of Shares--General" and by
investment advisory clients of, and by certain other persons
associated with, the Adviser and its affiliates or the Fund. If
(i) a holder of Advisor Class shares ceases to participate in the
fee-based program or plan or, to be associated with the
investment adviser or financial intermediary, in each case that
satisfies the requirements to purchase shares set forth under
"Purchase of Shares--General" or (ii) the holder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Advisor Class Prospectus and this Statement of Additional
Information (each, a "Conversion Event"), then all Advisor Class
shares held by the shareholder will convert automatically and
without notice to the shareholder, other than the notice
contained in the Advisor Class Prospectus and this Statement of
Additional Information, to Class A shares of the Fund during the
calendar month following the month in which the Fund is informed
of the occurrence of the Conversion Event. The failure of a
shareholder of a fee-based program to satisfy the minimum
investment requirements to purchase Advisor Class shares will not
constitute a Conversion Event. The conversion would occur on the
basis of the relative net asset values of the two classes and
without the imposition of any sales load, fee or other charge.
Class A shares currently bear a .30% distribution services fee
and have a higher expense ratio than Advisor Class shares. As a
result, Class A shares may pay correspondingly lower dividends
and have a lower net asset value than Advisor Class shares.

The conversion of Advisor Class shares to Class A shares
is subject to the continuing availability of an opinion of
counsel to the effect that the conversion of Advisor Class shares
to Class A shares does not constitute a taxable event under
federal income tax law. The conversion of Advisor Class shares
to Class A shares may be suspended if such an opinion is no
longer available at the time such conversion is to occur. In
that event, the Advisor Class shareholder would be required to
redeem his Advisor Class shares, which would constitute a taxable
event under federal income tax law.

<PAGE>

________________________________________________________________

REDEMPTION AND REPURCHASE OF SHARES
________________________________________________________________

The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Sell Shares." If you are an Advisor Class
shareholder through an account established under a fee-based
program your fee-based program may impose requirements with
respect to the purchase, sale or exchange of Advisor Class shares
of the Fund that are different from those described herein. A
transaction fee may be charged by your financial representative
with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial representative.

Redemption

Subject only to the limitations described below, the
Fund's Articles of Incorporation require that the Fund redeems
the shares tendered to it, as described below, at a redemption
price equal to their net asset value as next computed following
the receipt of shares tendered for redemption in proper form.
Except for any contingent deferred sales charge which may be
applicable to Class A, Class B or Class C shares, there is no
redemption charge. Payment of the redemption price will be made
within seven days after the Fund's receipt of such tender for
redemption. If a shareholder is in doubt about what documents
are required by his or her fee-based program or employee benefit
plan, the shareholder should contact his or her financial
representative.

The right of redemption may not be suspended or the date
of payment upon redemption postponed for more than seven days
after shares are tendered for redemption, except for any period
during which the New York Stock Exchange (the "Exchange") is
closed (other than customary weekend and holiday closings) or
during which the Commission determines that trading thereon is
restricted, or for any period during which an emergency (as
determined by the Commission) exists as a result of which
disposal by the Fund of securities owned by it is not reasonably
practicable or as a result of which it is not reasonably
practicable for the Fund fairly to determine the value of its net
assets, or for such other periods as the Commission may by order
permit for the protection of security holders of the Fund.

Payment of the redemption price will be made in cash.
The value of a shareholder's shares on redemption or repurchase
may be more or less than the cost of such shares to the
shareholder, depending upon the market value of the Fund's

<PAGE>

portfolio securities at the time of such redemption or
repurchase. Redemption proceeds on Class A, Class B and Class C
shares will reflect the deduction of the contingent deferred
sales charge, if any. Payment received by a shareholder upon
redemption or repurchase of his shares, assuming the shares
constitute capital assets in his hands, will result in long-term
or short-term capital gains (or loss) depending upon the
shareholder's holding period and basis in respect of the shares
redeemed.

To redeem shares of the Fund for which no share
certificates have been issued, the registered owner or owners
should forward a letter to the Fund containing a request for
redemption. The signature or signatures on the letter must be
guaranteed by an institution that is an "eligible guarantor" as
defined in Rule 17Ad-15 under the 1934 Act.

To redeem shares of the Fund represented by stock
certificates, the investor should forward the appropriate stock
certificate or certificates, endorsed in blank or with blank
stock powers attached, to the Fund with the request that the
shares represented thereby, or a specified portion thereof, be
redeemed. The stock assignment form on the reverse side of each
stock certificate surrendered to the Fund for redemption must be
signed by the registered owner or owners exactly as the
registered name appears on the face of the certificate or,
alternatively, a stock power signed in the same manner may be
attached to the stock certificate or certificates or, where
tender is made by mail, separately mailed to the Fund. The
signature or signatures on the assignment form must be guaranteed
in the manner described above.

Telephone Redemption By Electronic Funds Transfer. Each
Fund shareholder is entitled to request redemption by electronic
fund transfer of shares for which no stock certificates have been
issued by telephone at (800) 221-5672 by a shareholder who has
completed the appropriate portion of the Subscription Application
or, in the case of an existing shareholder, an "Autosell"
application obtained from Alliance Fund Services, Inc. A
telephone redemption request may not exceed $100,000 (except for
certain omnibus accounts), and must be made by 4:00 p.m. Eastern
time on a Fund business day as defined above. Proceeds of
telephone redemptions will be sent by electronic funds transfer
to a shareholder's designated bank account at a bank selected by
the shareholder that is a member of the NACHA.

Telephone Redemption By Check. Each Fund shareholder is
eligible to request redemption by check of Fund shares for which
no stock certificates have been issued by telephone at
(800) 221-5672 before 4:00 p.m. Eastern time on a Fund business
day in an amount not exceeding $50,000. Proceeds of such

<PAGE>

redemptions are remitted by check to the shareholder's address of
record. A shareholder otherwise eligible for telephone
redemption by check may cancel the privilege by written
instruction to Alliance Fund Services, Inc., or by checking the
appropriate box on the Subscription Application found in the
Prospectus.

Telephone Redemptions - General. During periods of
drastic economic or market developments, such as the market break
of October 1987, it is possible that shareholders would have
difficulty in reaching AFS by telephone (although no such
difficulty was apparent at any time in connection with the 1987
market break). If a shareholder were to experience such
difficulty, the shareholder should issue written instructions to
Alliance Fund Services, Inc. at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Telephone redemption is not available
with respect to shares (i) for which certificates have been
issued, (ii) held in nominee or "street name" accounts,
(iii) held by a shareholder who has changed his or her address of
record within the preceding 30 calendar days or (iv) held in any
retirement plan account. Neither the Fund nor the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
redemptions that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that
telephone requests for redemptions are genuine, including, among
others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Selected dealers or agents
may charge a commission for handling telephone requests for
redemptions.

Repurchase

The Fund may repurchase shares through the Principal
Underwriter, selected financial intermediaries or selected
dealers or agents. The repurchase price will be the net asset
value next determined after the Principal Underwriter receives
the request (less the contingent deferred sales charge, if any,
with respect to the Class A, Class B and Class C shares), except
that requests placed through selected dealers or agents before
the close of regular trading on the Exchange on any day will be
executed at the net asset value determined as of such close of
regular trading on that day if received by the Principal
Underwriter prior to its close of business on that day (normally
5:00 p.m. Eastern time). The financial intermediary or selected
dealer or agent is responsible for transmitting the request to

<PAGE>

the Principal Underwriter by 5:00 p.m. Eastern time (certain
selected dealers, agents or financial representatives may enter
into operating agreements permitting them to transmit purchase
information to the Principal Underwriter after 5:00 p.m. Eastern
time and receive that day's net asset value). If the financial
intermediary or selected dealer or agent fails to do so, the
shareholder's right to receive that day's closing price must be
settled between the shareholder and the dealer or agent. A
shareholder may offer shares of the Fund to the Principal
Underwriter either directly or through a selected dealer or
agent. Neither the Fund nor the Principal Underwriter charges a
fee or commission in connection with the repurchase of shares
(except for the contingent deferred sales charge, if any, with
respect to Class A, Class B and Class C shares). Normally, if
shares of the Fund are offered through a financial intermediary
or selected dealer or agent, the repurchase is settled by the
shareholder as an ordinary transaction with or through the
selected dealer or agent, who may charge the shareholder for this
service. The repurchase of shares of the Fund as described above
is a voluntary service of the Fund and the Fund may suspend or
terminate this practice at any time.

General

The Fund reserves the right to close out 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. No contingent
deferred sales charge will be deducted from the proceeds of this
redemption. In the case of a redemption or repurchase of shares
of the Fund 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.

________________________________________________________________

SHAREHOLDER SERVICES
________________________________________________________________

The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--Shareholder Services." The shareholder services set
forth below are applicable to Class A, Class B, Class C and
Advisor Class shares unless otherwise indicated. If you are an
Advisor Class shareholder through an account established under a
fee-based program your fee-based program may impose requirements
with respect to the purchase, sale or exchange of Advisor Class
shares of the Fund that are different from those described
herein. A transaction fee may be charged by your financial

<PAGE>

representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.

Automatic Investment Program

Investors may purchase shares of the Fund through an
automatic investment program utilizing electronic funds transfer
drawn on the investor's own bank account. Under such a program,
pre-authorized monthly drafts for a fixed amount (at least $25)
are used to purchase shares through the selected dealer or
selected agent designated by the investor at the public offering
price next determined after the Principal Underwriter receives
the proceeds from the investor's bank. In electronic form,
drafts can be made on or about a date each month selected by the
shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment
should complete the appropriate portion of the Subscription
Application found in the Prospectus. Current shareholders should
contact Alliance Fund Services, Inc. at the address or telephone
numbers shown on the cover of this Statement of Additional
Information to establish an automatic investment program.

Exchange Privilege

You may exchange your investment in the Fund for shares
of the same class of other Alliance Mutual Funds (including AFD
Exchange Reserves, a money market fund managed by the Adviser).
In addition, (i) present officers and full-time employees of the
Adviser, (ii) present Directors or Trustees of any Alliance
Mutual Fund and (iii) certain employee benefit plans for
employees of the Adviser, the Principal Underwriter, Alliance
Fund Services, Inc. and their affiliates may exchange Class A
shares of the Fund for Advisor Class shares of the Fund.
Exchanges of shares are made at the net asset value next
determined and without sales or service charges. Exchanges may
be made by telephone or written request. Telephone exchange
requests must be received by Alliance Fund Services, Inc. by
4:00 p.m. Eastern time on a Fund business day in order to receive
that day's net asset value.

Shares will continue to age without regard to exchanges
for 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 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.

<PAGE>

Please read carefully the prospectus of the mutual fund
into which you are exchanging before submitting the request.
Call Alliance Fund Services, Inc. at (800) 221-5672 to exchange
uncertificated shares. Except with respect to exchange of Class
A shares of the Fund for Advisor Class shares of the Fund,
exchange of shares as describe above in this section are taxable
transactions for federal tax purposes. The exchange service may
be changed, suspended, or terminated on 60 days written notice.

All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
Prospectus for the Alliance Mutual Fund whose shares are being
acquired. An exchange is effected through the redemption of the
shares tendered for exchange and the purchase of shares being
acquired at their respective net asset values as next determined
following receipt by the Alliance Mutual Fund whose shares are
being exchanged of (i) proper instructions and all necessary
supporting documents as described in such fund's Prospectus, or
(ii) a telephone request for such exchange in accordance with the
procedures set forth in the following paragraph. Exchanges
involving the redemption of shares recently purchased by check
will be permitted only after the Alliance Mutual Fund whose
shares have been tendered for exchange is reasonably assured that
the check has cleared, normally up to 15 calendar days following
the purchase date. Exchanges of shares of Alliance Mutual Funds
will generally result in the realization of a capital gain or
loss for Federal income tax purposes.

Each Fund shareholder, and the shareholder's selected
dealer, agent or financial representative, as applicable, are
authorized to make telephone requests for exchanges unless
Alliance Fund Services, Inc., receives written instruction to the
contrary from the shareholder, or the shareholder declines the
privilege by checking the appropriate box on the Subscription
Application found in the Prospectus. Such telephone requests
cannot be accepted with respect to shares then represented by
stock certificates. Shares acquired pursuant to a telephone
request for exchange will be held under the same account
registration as the shares redeemed through such exchange.

Eligible shareholders desiring to make an exchange
should telephone Alliance Fund Services, Inc. with their account
number and other details of the exchange, at (800) 221-5672
before 4:00 p.m., Eastern time, on a Fund business day as defined
above. Telephone requests for exchange received before 4:00 p.m.
Eastern time on a Fund business day will be processed as of the
close of business on that day. During periods of drastic
economic or market developments, such as the market break of
October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in

<PAGE>

connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information.

A shareholder may elect to initiate a monthly "Auto
Exchange" whereby a specified dollar amount's worth of his or her
Fund shares (minimum $25) is automatically exchanged for shares
of another Alliance Mutual Fund. Auto Exchange transactions
normally occur on the 12th day of each month, or the following
Fund business day prior thereto.

None of the Alliance Mutual Funds, the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
exchanges that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that
telephone requests for exchanges are genuine, including, among
others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Selected dealers, agents or
financial representatives, as applicable, may charge a commission
for handling telephone requests for exchanges.

The exchange privilege is available only in states where
shares of the Alliance Mutual Fund being acquired may be legally
sold. Each Alliance Mutual Fund reserves the right, at any time
on 60 days' notice to its shareholders, to reject any order to
acquire its shares through exchange or otherwise to modify,
restrict or terminate the exchange privilege.

Retirement Plans

The Fund may be a suitable investment vehicle for part
or all of the assets held in various types of retirement plans,
such as those listed below. The Fund has available forms of such
plans pursuant to which investments can be made in the Fund and
other Alliance Mutual Funds. Persons desiring information
concerning these plans should contact Alliance Fund Services,
Inc. at the "For Literature" telephone number on the cover of
this Statement of Additional Information, or write to:

Alliance Fund Services, Inc.
Retirement Plans
P.O. Box 1520
Secaucus, New Jersey 07096-1520

Individual Retirement Account ("IRA"). Individuals who
receive compensation, including earnings from self-employment,

<PAGE>

are entitled to establish and make contributions to an IRA.
Taxation of the income and gains paid to an IRA by the Fund is
deferred until distribution from the IRA. An individual's
eligible contribution to an IRA will be deductible if neither the
individual nor his or her spouse is an active participant in an
employer-sponsored retirement plan. If the individual or his or
her spouse is an active participant in an employer-sponsored
retirement plan, the individual's contributions to an IRA may be
deductible, in whole or in part, depending on the amount of the
adjusted gross income of the individual and his or her spouse.

Employer-Sponsored Qualified Retirement Plans. Sole
proprietors, partnerships and corporations may sponsor qualified
money purchase pension and profit-sharing plans, including
Section 401(k) plans ("qualified plans"), under which annual tax-
deductible contributions are made within prescribed limits based
on compensation paid to participating individuals. The minimum
initial investment requirement may be waived with respect to
certain of these qualified plans.

If the aggregate net asset value of shares of the
Alliance Mutual Funds held by a qualified plan reaches $1 million
on or before December 15 in any year, all Class B shares and
Class C shares of the Fund held by such plan can be exchanged at
the plan's request, without any sales charge, for Class A shares
of the Fund.

Simplified Employee Pension Plan ("SEP"). Sole
proprietors, partnerships and corporations may sponsor a SEP
under which they make annual tax-deductible contributions to an
IRA established by each eligible employee within prescribed
limits based on employee compensation.

403(b)(7) Retirement Plan. Certain tax-exempt
organizations and public educational institutions may sponsor
retirements plans under which an employee may agree that monies
deducted from his or her compensation (minimum $25 per pay
period) may be contributed by the employer to a custodial account
established for the employee under the plan.

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of Equitable, which serves as custodian or trustee
under the retirement plan prototype forms available from the
Fund, charges certain nominal fees for establishing an account
and for annual maintenance. A portion of these fees is remitted
to Alliance Fund Services, Inc. as compensation for its services
to the retirement plan accounts maintained with the Fund.

Distributions from retirement plans are subject to
certain Code requirements in addition to normal redemption

<PAGE>

procedures. For additional information please contact Alliance
Fund Services, Inc.

Dividend Direction Plan

A shareholder who already maintains, in addition to his
or her Class A, Class B, Class C or Advisor Class Fund accounts,
a Class A, Class B, Class C or Advisor Class account with one or
more other Alliance Mutual Funds may direct that income dividends
and/or capital gains paid on the shareholder's Class A, Class B,
Class C or Advisor Class Fund shares be automatically reinvested,
in any amount, without the payment of any sales or service
charges, in shares of the same class of such other Alliance
Mutual Fund(s). Further information can be obtained by
contacting Alliance Fund Services, Inc. at the address or the
"For Literature" telephone number shown on the cover of this
Statement of Additional Information. Investors wishing to
establish a dividend direction plan in connection with their
initial investment should complete the appropriate section of the
Subscription Application found in the Prospectus. Current
shareholders should contact Alliance Fund Services, Inc. to
establish a dividend direction plan.

Systematic Withdrawal Plan

General. Any shareholder who owns or purchases shares
of the Fund having a current net asset value of at least $4,000
(for quarterly or less frequent payments), $5,000 (for bi-monthly
payments) or $10,000 (for monthly payments) may establish a
systematic withdrawal plan under which the shareholder will
periodically receive a payment in a stated amount of not less
than $50 on a selected date. Systematic withdrawal plan
participants must elect to have their dividends and distributions
from the Fund automatically reinvested in additional shares of
the Fund.

Shares of the Fund owned by a participant in the Fund's
systematic withdrawal plan will be redeemed as necessary to meet
withdrawal payments and such payments will be subject to any
taxes applicable to redemptions and, except as discussed below,
any applicable contingent deferred sales charge. Shares acquired
with reinvested dividends and distributions will be liquidated
first to provide such withdrawal payments and thereafter other
shares will be liquidated to the extent necessary, and depending
upon the amount withdrawn, the investor's principal may be
depleted. A systematic withdrawal plan may be terminated at any
time by the shareholder or the Fund.

Withdrawal payments will not automatically end when a
shareholder's account reaches a certain minimum level. Therefore,
redemptions of shares under the plan may reduce or even liquidate

<PAGE>

a shareholder's account and may subject the shareholder to the
Fund's involuntary redemption provisions. See "Redemption and
Repurchase of Shares -- General." Purchases of additional shares
concurrently with withdrawals are undesirable because of sales
charges when purchases are made. While an occasional lump-sum
investment may be made by a holder of Class A shares who is
maintaining a systematic withdrawal plan, such investment should
normally be an amount equivalent to three times the annual
withdrawal or $5,000, whichever is less.

Payments under a systematic withdrawal plan may be made
by check or electronically via the Automated Clearing House
("ACH") network. Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in
shares of the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus, while current
Fund shareholders desiring to do so can obtain an application
form by contacting Alliance Fund Services, Inc. at the address or
the "For Literature" telephone number shown on the cover of this
Statement of Additional Information.

CDSC Waiver for Class B Shares and Class C Shares.
Under a systematic withdrawal plan, up to 1% monthly, 2%
bi-monthly or 3% quarterly of the value at the time of redemption
of the Class B or Class C shares in a shareholder's account may
be redeemed free of any contingent deferred sales charge.

With respect to Class B shares, the waiver applies only
with respect to shares acquired after July 1, 1995. Class B
shares that are not subject to a contingent deferred sales charge
(such as shares acquired with reinvested dividends or
distributions) will be redeemed first and will count toward the
foregoing limitations. Remaining Class B shares that are held
the longest will be redeemed next. Redemptions of Class B shares
in excess of the foregoing limitations will be subject to any
otherwise applicable contingent deferred sales charge.

With respect to Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing
limitations. Redemptions in excess of those limitations will be
subject to any otherwise applicable contingent deferred sales
charge.

Statements and Reports

Each shareholder of the Fund receives semi-annual and
annual reports which include a portfolio of investments,
financial statements and, in the case of the annual report, the
report of the Fund's independent accountants, Price Waterhouse
LLP, as well as a confirmation of each purchase and redemption.
By contacting his or her broker or Alliance Fund Services, Inc.,

<PAGE>

a shareholder can arrange for copies of his or her account
statements to be sent to another person.

________________________________________________________________

NET ASSET VALUE
________________________________________________________________

The per share net asset value is computed in accordance
with the Fund's Articles of Incorporation and By-Laws at the next
close of regular trading on the Exchange (ordinarily 4:00 p.m.
Eastern time) following receipt of a purchase or redemption order
by the Fund on each Fund business day on which such an order is
received and on such other days as the Board of Directors deems
appropriate or necessary in order to comply with Rule 22c-1 under
the 1940 Act. The Fund's per share net asset value is calculated
by dividing the value of the Fund's total assets, less its
liabilities, by the total number of its shares then outstanding.
A Fund business day is any weekday on which the Exchange is open
for trading.

In accordance with applicable rules under the 1940 Act,
portfolio securities are valued at current market value or at
fair value as determined in good faith by the Board of Directors.
The Board of Directors has delegated to the Adviser certain of
the Board's duties with respect to the following procedures.
Readily marketable securities listed on the Exchange or on a
foreign securities exchange (other than foreign securities
exchanges whose operations are similar to those of the United
States over-the-counter market) are valued, except as indicted
below, at the last sale price reflected on the consolidated tape
at the close of the Exchange or, in the case of a foreign
securities exchange, at the last quoted sale price, in each case
on the business day as of which such value is being determined.
If there has been no sale on such day, the securities are valued
at the mean of the closing bid and asked prices on such day. If
no bid or asked prices are quoted on such day, then the security
is valued in good faith at fair value by, or in accordance with
procedures established by, the Board of Directors. Readily
marketable securities not listed on the Exchange or on a foreign
securities exchange but listed on other United States national
securities exchanges or traded on The Nasdaq Stock Market, Inc.
are valued in like manner. Portfolio securities traded on the
Exchange and on one or more foreign or other national securities
exchanges, and portfolio securities not traded on the Exchange
but traded on one or more foreign or other national securities
exchanges are valued in accordance with these procedures by
reference to the principal exchange on which the securities are
traded.

<PAGE>

Readily marketable securities traded in the over-the-
counter market, securities listed on a foreign securities
exchange whose operations are similar to those of the United
States over-the-counter market, and securities listed on a U.S.
national securities exchange whose primary market is believed to
be over-the-counter (but excluding securities traded on The
Nasdaq Stock Market, Inc.), are valued at the mean of the current
bid and asked prices as reported by Nasdaq or, in the case of
securities not quoted by Nasdaq, the National Quotation Bureau or
another comparable sources.

Listed put or call options purchased by the Fund are
valued at the last sale price. If there has been no sale on that
day, such securities will be valued at the closing bid prices on
that day.

Open futures contracts and options thereon will be
valued using the closing settlement price or, in the absence of
such a price, the most recent quoted bid price, If there are no
quotations available for the day of valuations, the last
available closing settlement price will be used.

U.S. Government Securities and other debt instruments
having 60 days or less remaining until maturity are valued at
amortized cost if their original maturity was 60 days or less, or
by amortizing their fair value as of the 61st day prior to
maturity if their original term to maturity exceeded 60 days
(unless in either case the Board of Directors determines that
this method does not represent fair value).

Fixed-income securities may be valued on the basis of
prices provided by a pricing service when such prices are
believed to reflect the fair market value of such securities.
The prices provided by pricing service take into account many
factors, including institutional size trading in similar groups
of securities and any developments related to specific
securities.

All other assets of the Fund are valued in good faith at
fair value by, or in accordance with procedures established by,
the Board of Directors.

Trading in securities on Far Eastern and European
securities exchanges and over-the-counter markets is normally
completed well before the close of business of each Fund business
day. In addition, trading in foreign markets may not take place
on all Fund business days. Furthermore, trading may take place
in various foreign markets on days that are not Fund business
days. The Fund's calculation of the net asset value per share,
therefore, does not always take place contemporaneously with the
most recent determination of the prices of portfolio securities

<PAGE>

in these markets. Events affecting the values of these portfolio
securities that occur between the time their prices are
determined in accordance with the above procedures and the close
of the Exchange will not be reflected in the Fund's calculation
of net asset value unless it is believed that these prices do not
reflect current market value, in which case the securities will
be valued in good faith by, or in accordance with procedures
established by, the Board of Directors at fair value.

The Board of Directors may suspend the determination of
the Fund's, net asset value (and the offering and sale of
shares), subject to the rules of the Commission and other
governmental rules and regulations, at a time when: (1) the
Exchange is closed, other than customary weekend and holiday
closings, (2) an emergency exists as a result of which it is not
reasonably practicable for the Fund to dispose of securities
owned by it or to determine fairly the value of its net assets,
or (3) for the protection of shareholders, the Commission by
order permits a suspension of the right of redemption or a
postponement of the date of payment on redemption.

For purposes of determining the Fund's net asset value
per share, all assets and liabilities initially expressed in a
foreign currency will be converted into U.S. dollars at the mean
of the current bid and asked prices of such currency against the
U.S. dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the
basis of a pricing service that takes into account the quotes
provided by a number of such major banks. If such quotations are
not available as of the close of the Exchange, the rate of
exchange will be determined in good faith by, or under the
direction of, the Board of Directors.

The assets attributable to the Class A shares, Class B
shares, Class C shares and Advisor Class shares will be invested
together in a single portfolio. The net asset value of each
class will be determined separately by subtracting the
liabilities allocated to that class from the assets belonging to
that class in conformance with the provisions of a plan adopted
by the Fund in accordance with Rule 18f-3 under the 1940 Act.

________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________

Dividends paid by the Fund, if any, with respect to
Class A, Class B, Class C and Advisor Class 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 applicable to Class B and C shares, and any

<PAGE>

incremental transfer agency costs relating to Class B and Class C
shares, will be borne exclusively by the class to which they
relate.

United States Federal Income Taxation
Of Dividends and Distributions

General. The Fund intends for each taxable year to
qualify to be taxed as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). To so
qualify, the Fund must, among other things, (i) derive at least
90% of its gross income in each taxable year from dividends,
interest, payments with respect to securities loans, gains from
the sale or other disposition of stock or securities or foreign
currency, or certain other income (including, but not limited to,
gains from options, futures and forward contracts) derived with
respect to its business of investing in stock, securities or
currency; (ii) diversify its holdings so that, at the end of each
quarter of its taxable year, the following two conditions are
met: (a) at least 50% of the value of the Fund's assets is
represented by cash, U.S. Government Securities, securities of
other regulated investment companies and other securities with
respect to which the Fund's investment is limited, in respect of
any one issuer, to an amount not greater than 5% of the Fund's
assets and 10% of the outstanding voting securities of such
issuer, and (b) not more than 25% of the value of the Fund's
assets is invested in securities of any one issuer (other than
U.S. Government Securities or securities of other regulated
investment companies).

If the Fund qualifies as a regulated investment company
for any taxable year and makes timely distributions to its
shareholders of 90% or more of its net investment income for that
year (calculated without regard to its net capital gain, i.e.,
the excess of its net long-term capital gain over its net short-
term capital loss), it will not be subject to federal income tax
on the portion of its taxable income for the year (including any
net capital gain) that it distributes to shareholders.

The Fund also intends to avoid the 4% federal excise tax
that would otherwise apply to certain undistributed income for a
given calendar year if it makes timely distributions to the
shareholders equal to the sum of (i) 98% of its ordinary income
for that year; (ii) 98% of its capital gain net income and
foreign currency gains for the twelve-month period ending on
October 31 of that year; and (iii) any ordinary income or capital
gain net income from the preceding calendar year that was not
distributed during that year. For this purpose, income or gain
retained by the Fund that is subject to corporate income tax will
be considered to have been distributed by the Fund by year-end.
For federal income and excise tax purposes, dividends declared

<PAGE>

and payable to shareholders of record as of a date in October,
November or December of a given year but actually paid during the
immediately following January will be treated as if paid by the
Fund on December 31 of that calendar year, and will be taxable to
these shareholders for the year declared, and not for the year in
which the shareholders actually receive the dividend.

The Fund intends to make timely distributions of the
Fund's taxable income (including any net capital gain) so that
the Fund will not be subject to federal income or excise taxes.
However, exchange control or other regulations on the
repatriation of investment income, capital or the proceeds of
securities sales, if any exist or are enacted in the future, may
limit the Fund's ability to make distributions sufficient in
amount to avoid being subject to one or both of such federal
taxes.

Dividends and Distributions. The Fund intends to make
timely distributions of the Fund's taxable income (including any
net capital gain) so that the Fund will not be subject to federal
income and excise taxes. Dividends of the Fund's net ordinary
income and distributions of any net realized short-term capital
gain are taxable to shareholders as ordinary income. The
investment objective of the Fund is such that only a small
portion, if any, of the Fund's distributions is expected to
qualify for the dividends-received deduction for corporations.

Distributions of net capital gain are taxable as long-
term capital gain, regardless of how long a shareholder has held
shares in the Fund. Any dividend or distribution received by a
shareholder on shares of the 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 as described
above. Dividends are taxable in the manner discussed regardless
of whether they are paid to the shareholder in cash or are
reinvested in additional shares of the Fund.

After the end of the taxable year, the Fund will notify
shareholders of the federal income tax status of any
distributions made by the Fund to shareholders during such year.

It is the present policy of the Fund to distribute to
shareholders all net investment income and to distribute realized
capital gains, if any, annually. There is no fixed dividend rate
and there can be no assurance that the Fund will pay any
dividends. The amount of any dividend or distribution paid on
shares of the Fund must necessarily depend upon the realization
of income and capital gains from the Fund's investments.

<PAGE>

A dividend or capital gains distribution with respect to
shares of the 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, generally 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.

Sales and Redemptions. Any gain or loss arising from a
sale or redemption of Fund shares generally will be capital gain
or loss except in the case of a dealer or a financial
institution, and will be long-term capital gain or loss if such
shareholder has held such shares for more than one year at the
time of the sale or redemption; otherwise it will be short-term
capital gain or loss. If a shareholder has held shares in the
Fund for six months or less and during that period has received a
distribution of net capital gain, any loss recognized by the
shareholder on the sale of those shares during the six-month
period will be treated as a long-term capital loss to the extent
of the distribution. In determining the holding period of such
shares for this purpose, any period during which a shareholder's
risk of loss is offset by means of options, short sales or
similar transactions is not counted.

Any loss realized by a shareholder on a sale or exchange
of shares of the Fund will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30
days before and ending 30 days after the shares are sold or
exchanged. For this purpose, acquisitions pursuant to the
Dividend Reinvestment Plan would constitute a replacement if made
within the period. If disallowed, the loss will be reflected in
an upward adjustment to the basis of the shares acquired.

Foreign Taxes. Income received by the Fund may also be
subject to foreign income taxes, including withholding taxes. The
United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of such taxes
or exemption from taxes on such income. It is impossible to
determine the effective rate of foreign tax in advance since the
amount of the Fund's assets to be invested within various
countries is not known. If more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of
stocks or securities of foreign corporations, the Fund will be
eligible and intends to file an election with the Internal
Revenue Service to pass through to its shareholders the amount of
foreign taxes paid by the Fund. However, there can be no
assurance that the Fund will be able to do so. Pursuant to this
election a United States shareholder will be required to
(i) include in gross income (in addition to taxable dividends
actually received) his pro rata share of foreign taxes paid by

<PAGE>

the Fund, (ii) treat his pro rata share of such foreign taxes as
having been paid by him, and (iii) either deduct such pro rata
share of foreign taxes in computing his taxable income or treat
such foreign taxes as a credit against United States federal
income taxes. Shareholders who are not liable for federal income
taxes, such as retirement plans qualified under section 401 of
the Code, will not be affected by any such pass through of taxes
by the Fund. No deduction for foreign taxes may be claimed by an
individual United States shareholder who does not itemize
deductions. In addition, certain individual United States
shareholders may be subject to rules which limit or reduce their
ability to fully deduct, or claim a credit for, their pro rata
share of the foreign taxes paid by the Fund. A shareholder's
foreign tax credit with respect to a dividend received from the
Fund will be disallowed unless the shareholder holds shares in
the Fund on the ex-dividend date and for at least 15 other days
during the 30-day period beginning 15 days prior to the ex-
dividend date. Each shareholder will be notified within 60 days
after the close of the Fund's taxable year whether the foreign
taxes paid by the Fund will pass through for that year and, if
so, such notification will designate (i) the shareholder's
portion of the foreign taxes paid to each such country and
(ii) the portion of dividends that represents income derived from
sources within each such country.

Backup Withholding. The Fund may be required to
withhold United States federal income tax at the rate of 31% of
all taxable distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer identification
numbers or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to
backup withholding. Corporate shareholders and certain other
shareholders specified in the Code are exempt from such backup
withholding. Backup withholding is not an additional tax; any
amounts so withheld may be credited against a shareholder's
United States federal income tax liability or refunded.

United States Federal Income Taxation of the Fund

The following discussion relates to certain significant
United States federal income tax consequences to the Fund with
respect to the determination of its "investment company taxable
income" each year. This discussion assumes that the Fund will be
taxed as a regulated investment company for each of its taxable
years.

Passive Foreign Investment Companies. If the Fund owns
shares in a foreign corporation that constitutes a "passive
foreign investment company" (a "PFIC") for federal income tax
purposes and the Fund does not elect to treat the foreign
corporation as a "qualified electing fund" within the meaning of

<PAGE>

the Code, the Fund may be subject to United States federal income
taxation on a portion of any "excess distribution" it receives
from the PFIC or any gain it derives from the disposition of such
shares, even if such income is distributed as a taxable dividend
by the Fund to its shareholders. The Fund may also be subject to
additional interest charges in respect of deferred taxes arising
from such distributions or gains. Any tax paid by the Fund as a
result of its ownership of shares in a PFIC will not give rise to
any deduction or credit to the Fund or to any shareholder. A
PFIC means any foreign corporation if, for the taxable year
involved, either (i) it derives at least 75% of its gross income
from "passive income" (including, but not limited to, interest,
dividends, royalties, rents and annuities), or (ii) on average,
at least 50% of the value (or adjusted tax basis, if elected) of
the assets held by the corporation produce "passive income."
Pursuant to the Taxpayer Relief Act of 1997, the Fund could elect
for taxable years beginning after 1997 to "mark-to-market" stock
in a PFIC. Under such an election, the Fund would include in
income each year an amount equal to the excess, if any, of the
fair market value of the PFIC stock as of the close of the
taxable year over the Fund's adjusted basis in the PFIC stock.
The Fund would be allowed a deduction for the excess, if any, on
the adjusted basis of the PFIC stock over the fair market value
of the PFIC stock as of the close of the taxable year, but only
to the extent of any net mark-to-market gains included by the
Fund for prior taxable years. The Fund's adjusted basis in the
PFIC stock would be adjusted to reflect the amounts included in,
or deducted from, income under this election. Amounts included
in income pursuant to this election, as well as gain realized on
the sale or any other disposition of the PFIC stock, would be
treated as ordinary income. The deductible portion of any mark-
to-market loss, as well as loss realized on the sale or other
disposition of the PFIC stock to the extent that such loss does
not exceed the net mark-to-market gains previously included by
the Fund, would be treated as ordinary loss. The Fund generally
would not be subject to the deferred tax and interest charge
provisions discussed above with respect to PFIC stock for which a
mark-to-market election has been made. If the Fund purchases
shares in a PFIC and the Fund does elect to treat the foreign
corporation as a "qualified electing fund" under the Code, the
Fund may be required to include in its income each year a portion
of the ordinary income and net capital gains of the foreign
corporation, even if this income is not distributed to the Fund.
Any such income would be subject to the 90% and calendar year
distribution requirements described above.

Currency Fluctuations-"Section 988" Gains or Losses.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues
interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the

<PAGE>

Fund actually collects such receivables or pays such liabilities
are treated as ordinary income or ordinary loss. Similarly,
gains or losses from the disposition of foreign currencies, from
the disposition of debt securities denominated in a foreign
currency, or from the disposition of a forward contract
denominated in a foreign currency which are attributable to
fluctuations in the value of the foreign currency between the
date of acquisition of the asset and the date of disposition also
are treated as ordinary gain or loss. These gains or losses,
referred to under the Code as "section 988" gains or losses,
increase or decrease the amount of the Fund's investment company
taxable income available to be distributed to its shareholders as
ordinary income, rather than increasing or decreasing the amount
of the Fund's net capital gain. Because section 988 losses
reduce the amount of ordinary dividends the Fund will be allowed
to distribute for a taxable year, such section 988 losses may
result in all or a portion of prior dividend distributions for
such year being recharacterized as a non-taxable return of
capital to shareholders, rather than as an ordinary dividend,
reducing each shareholder's basis in his Fund shares. To the
extent that such distributions exceed such shareholder's basis,
each distribution will be treated as a gain from the sale of
shares.

Options, Futures and Forward Contracts. Certain listed
options, regulated futures contracts, and forward foreign
currency contracts are considered "section 1256 contracts" for
federal income tax purposes. Section 1256 contracts held by the
Fund at the end of each taxable year will be "marked to market"
and treated for federal income tax purposes as though sold for
fair market value on the last business day of such taxable year.
Gain or loss realized by the Fund on section 1256 contracts other
than forward foreign currency contracts will be considered 60%
long-term and 40% short-term capital gain or loss. Gain or loss
realized by the Fund on forward foreign currency contracts will
be treated as section 988 gain or loss and will therefore be
characterized as ordinary income or loss and will increase or
decrease the amount of the Fund's net investment income available
to be distributed to shareholders as ordinary income, as
described above. The Fund can elect to exempt its section 1256
contracts which are part of a "mixed straddle" (as described
below) from the application of section 1256.

The Treasury Department has the authority to issue
regulations that would permit or require the Fund either to
integrate a foreign currency hedging transaction with the
investment that is hedged and treat the two as a single
transaction, or otherwise to treat the hedging transaction in a
manner that is consistent with the hedged investment. The
regulations issued under this authority generally should not

<PAGE>

apply to the type of hedging transactions in which the Fund
intends to engage.

With respect to equity options or options traded over-
the-counter or on certain foreign exchanges, gain or loss
realized by the Fund upon the lapse or sale of such options held
by the Fund will be either long-term or short-term capital gain
or loss depending upon the Fund's holding period with respect to
such option. However, gain or loss realized upon the lapse or
closing out of such options that are written by the Fund will be
treated as short-term capital gain or loss. In general, if the
Fund exercises an option, or an option that the Fund has written
is exercised, gain or loss on the option will not be separately
recognized but the premium received or paid will be included in
the calculation of gain or loss upon disposition of the property
underlying the option.

Gain or loss realized by the Fund on the lapse or sale
of put and call options on foreign currencies which are traded
over-the-counter or on certain foreign exchanges will be treated
as section 988 gain or loss and will therefore be characterized
as ordinary income or loss and will increase or decrease the
amount of the Fund's net investment income available to be
distributed to shareholders as ordinary income, as described
above. The amount of such gain or loss shall be determined by
subtracting the amount paid, if any, for or with respect to the
option (including any amount paid by the Fund upon termination of
an option written by the Fund) from the amount received, if any,
for or with respect to the option (including any amount received
by the Fund upon termination of an option held by the Fund). In
general, if the Fund exercises such an option on a foreign
currency, or such an option that the Fund has written is
exercised, gain or loss on the option will be recognized in the
same manner as if the Fund had sold the option (or paid another
person to assume the Fund's obligation to make delivery under the
option) on the date on which the option is exercised, for the
fair market value of the option. The foregoing rules will also
apply to other put and call options which have as their
underlying property foreign currency and which are traded over-
the-counter or on certain foreign exchanges to the extent gain or
loss with respect to such options is attributable to fluctuations
in foreign currency exchange rates.

Tax Straddles. Any option, futures contract, forward
foreign currency contract, currency swap, or other position
entered into or held by the Fund in conjunction with any other
position held by the Fund may constitute a "straddle" for federal
income tax purposes. A straddle of which at least one, but not
all, the positions are section 1256 contracts may constitute a
"mixed straddle". In general, straddles are subject to certain
rules that may affect the character and timing of the Fund's

<PAGE>

gains and losses with respect to straddle positions by requiring,
among other things, that (i) loss realized on disposition of one
position of a straddle not be recognized to the extent that the
Fund has unrealized gains with respect to the other position in
such straddle; (ii) the Fund's holding period in straddle
positions be suspended while the straddle exists (possibly
resulting in gain being treated as short-term capital gain rather
than long-term capital gain); (iii) losses recognized with
respect to certain straddle positions which are part of a mixed
straddle and which are non-section 1256 positions be treated as
60% long-term and 40% short-term capital loss; (iv) losses
recognized with respect to certain straddle positions which would
otherwise constitute short-term capital losses be treated as
long-term capital losses; and (v) the deduction of interest and
carrying charges attributable to certain straddle positions may
be deferred. The Treasury Department is authorized to issue
regulations providing for the proper treatment of a mixed
straddle where at least one position is ordinary and at least one
position is capital. No such regulations have yet been issued.
Various elections are available to the Fund which may mitigate
the effects of the straddle rules, particularly with respect to
mixed straddles. In general, the straddle rules described above
do not apply to any straddles held by the Fund all of the
offsetting positions of which consist of section 1256 contracts.

Taxation of Foreign Stockholders

The foregoing discussion relates only to United States
federal income tax law as it affects shareholders who are United
States citizens or residents or United States corporations. The
effects of federal income tax law on shareholders who are non-
resident alien individuals or foreign corporations may be
substantially different. Foreign investors should therefore
consult their counsel for further information as to the United
States tax consequences of receipt of income from the Fund.

Other Taxation

The Fund may be subject to other state and local taxes.

________________________________________________________________

BROKERAGE AND PORTFOLIO TRANSACTIONS
________________________________________________________________

The management of the Fund has the responsibility for
allocating its brokerage orders and may direct orders to any
broker. It is the Fund's general policy to seek favorable net
prices and prompt reliable execution in connection with the
purchase or sale of all portfolio securities. In the purchase
and sale of over-the-counter securities, it is the Fund's policy

<PAGE>

to use the primary market makers except when a better price can
be obtained by using a broker. The Board of Directors has
approved, as in the best interests of the Fund and the
shareholders, a policy of considering, among other factors, sales
of the Fund's shares as a factor in the selection of broker-
dealers to execute portfolio transactions, subject to best
execution. The Adviser is authorized under the Advisory
Agreement to place brokerage business with such brokers and
dealers. The use of brokers who supply supplemental research and
analysis and other services may result in the payment of higher
commissions than those available from other brokers and dealers
who provide only the execution of portfolio transactions. In
addition, the supplemental research and analysis and other
services that may be obtained from brokers and dealers through
which brokerage transactions are affected may be useful to the
Adviser in connection with advisory clients other than the Fund.

Investment decisions for the Fund are made independently
from those for other investment companies and other advisory
accounts managed by the Adviser. It may happen, on occasion,
that the same security is held in the portfolio of the Fund and
one or more of such other companies or accounts. Simultaneous
transactions are likely when several funds or accounts are
managed by the same Adviser, particularly when a security is
suitable for the investment objectives of more than one of such
companies or accounts. When two or more companies or accounts
managed by the Adviser are simultaneously engaged in the purchase
or sale of the same security, the transactions are allocated to
the respective companies or accounts both as to amount and price,
in accordance with a method deemed equitable to each company or
account. In some cases this system may adversely affect the
price paid or received by the Fund or the size of the position
obtainable for the Fund.

Allocations are made by the officers of the Fund or of
the Adviser. Purchases and sales of portfolio securities are
determined by the Adviser and are placed with broker-dealers by
the order department of the Adviser.

The extent to which commissions that will be charged by
broker-dealers selected by the Fund may reflect an element of
value for research cannot presently be determined. To the extent
that research services of value are provided by broker-dealers
with or through whom the Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise
bear. Research services furnished by broker-dealers could be
useful and of value to the Adviser in servicing its other clients
as well as the Fund; but, on the other hand, certain research
services obtained by the Adviser as a result of the placement of
portfolio brokerage of other clients could be useful and of value
to it in serving the Fund. Consistent with the Conduct Rules of

<PAGE>

Fair Practice of the National Association of Securities Dealers,
Inc. and subject to seeking best execution, the Fund may consider
sales of shares of the Fund or other investment companies managed
by the Adviser as a factor in the selection of brokers to execute
portfolio transactions for the Fund.

The Fund may from time to time place orders for the
purchase or sale of securities (including listed call options)
with Donaldson, Lufkin & Jenrette Securities Corporation (DLJ),
an affiliate of the Adviser, and with brokers which may have
their transactions cleared or settled, or both, by the Pershing
Division of DLJ, for which DLJ may receive a portion of the
brokerage commissions. In such instances, the placement of
orders with such brokers would be consistent with the Fund's
objective of obtaining best execution and would not be dependent
upon the fact that DLJ is an affiliate of the Adviser.

Many of the Fund's portfolio transactions in equity
securities will occur on foreign stock exchanges. Transactions
on stock exchanges involve the payment of brokerage commissions.
On many foreign stock exchanges these commissions are fixed.
Securities traded in foreign over-the-counter markets (including
most fixed-income securities) are purchased from and sold to
dealers acting as principal. Over-the-counter transactions
generally do not involve the payment of a stated commission, but
the price usually includes an undisclosed commission or markup.
The prices of underwritten offerings, however, generally include
a stated underwriter's discount. The Adviser expects to effect
the bulk of its transactions in securities of companies based in
foreign countries through brokers, dealers or underwriters
located in such countries. U.S. Government or other U.S.
securities constituting permissible investments will be purchased
and sold through U.S. brokers, dealers or underwriters.

During the fiscal years ended June 30, 1998, 1997 and
1996, the Fund incurred brokerage commissions amounting in the
aggregate to $1,667,217, $1,512,610, and $1,479,941,
respectively. During the fiscal years ended June 30, 1998, 1997
and 1996, brokerage commissions amounting in the aggregate to $0,
$0 and $0 respectively, were paid to DLJ and brokerage
commissions amounting in the aggregate to $360, $0 and $0,
respectively, were paid to brokers utilizing the Pershing
Division of DLJ. During the fiscal year ended June 30, 1998, the
brokerage commissions paid to DLJ constituted 0% of the Fund's
aggregate brokerage commissions and the brokerage commissions
paid to brokers utilizing the Pershing Division of DLJ
constituted .02% of the Fund's aggregate brokerage commissions.
During the fiscal year ended June 30, 1998, of the Fund's
aggregate dollar amount of brokerage transactions involving the
payment of commissions, 0% were effected through DLJ and .02%
were effected through brokers utilizing the Pershing Division of

<PAGE>

DLJ. During the fiscal year ended June 30, 1998, transactions in
portfolio securities of the Fund aggregating $794,510 with
associated brokerage commissions of approximately $1,633,976 were
allocated to persons or firms supplying research services to the
Fund or the Adviser.

________________________________________________________________

GENERAL INFORMATION
________________________________________________________________

Capitalization

The Fund was organized as a corporation in Maryland in
1994. The Fund's capital stock of the Fund currently consists of
60,000,000 shares of Class A Common Stock, 3,000,000,000 shares
of Class B Common Stock, 3,000,000,000 shares of Class C and
3,000,000,000 shares of Advisor Class Common Stock, each having a
par value $.01 per share. All shares of the Fund, when issued,
are fully paid and non-assessable. The Directors are authorized
to reclassify and issue any unissued shares to any number of
additional series and classes without shareholder approval.
Accordingly, the Directors in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class or series would be governed by the 1940
Act and the law of the State of Maryland. If shares of another
series were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be
entitled to one vote for all purposes. Generally, shares of both
portfolios would vote as a single series on matters, such as the
election of Directors, that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as a separate series. Procedures for calling a
shareholders' meeting for the removal of Directors of the Fund,
similar to those set forth in Section 16(c) of the 1940 Act will
be available to shareholders of the Fund. The rights of the
holders of shares of a series may not be modified except by the
vote of a majority of the outstanding shares of such series.

It is anticipated that annual shareholder meetings will
not be held; shareholder meetings will be held only when required
by federal or state law. Shareholders have available certain
procedures for the removal of Directors.

A shareholder will be entitled to share pro rata with
other holders of the same class of shares all dividends and
distributions arising from the Fund's assets and, upon redeeming

<PAGE>

shares, will receive the then current net asset value of the Fund
represented by the redeemed shares less any applicable CDSC. The
Fund is empowered to establish, without shareholder approval,
additional portfolios, which may have different investment
objectives and policies than those of the Fund, and additional
classes of shares within the Fund. If an additional portfolio or
class were established in the 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, B, C and Advisor Class shares have identical
voting, dividend, liquidation and other rights, except that each
class bears its own transfer agency expenses, each of Class A,
Class B and Class C shares of the Fund bears its own distribution
expenses and Class B shares and Advisor Class shares convert to
Class A shares under certain circumstances. Each class of shares
of the Fund votes separately with respect to the 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 the Fund, are entitled to
receive the net assets of the Fund.

At [ ], 1999 there were [ ] shares of
common stock of the Fund outstanding including [ ] Class
A shares, [ ] Class B shares, [ ] Class C shares
and [ ] Advisor Class shares. To the knowledge of the
Fund, the following persons owned of record or beneficially, 5%
or more of a class of the outstanding shares of the Fund as of
[ ], 1999:

No. of % of
Shares % of % of % of Advisor
Name and Address Class Class A Class B Class C Class

Custodian

Brown Brothers Harriman & Co. ("Brown Brothers"), 40
Water Street, Boston, Massachusetts, will act as the Fund's
custodian for the assets of the Fund but plays no part in
deciding the purchase or sale of portfolio securities. Subject
to the supervision of the Fund's Directors, Brown Brothers may
enter into sub-custodial agreements for the holding of the Fund's
foreign securities.

<PAGE>

Principal Underwriter

Alliance Fund Distributors, Inc., 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 Fund. Under the Distribution Services
Agreement, the Fund has agreed to indemnify the Principal
Underwriter, in the absence of its willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations
thereunder, against certain civil liabilities, including
liabilities under the 1933 Act.

Counsel

Legal matters in connection with the issuance of the
shares offered hereby are passed upon by Seward & Kissel, New
York, New York. Seward & Kissel has relied upon the opinion of
Venable, Baetjer and Howard, LLP, Baltimore Maryland, for matters
relating to Maryland law.

Independent Accountants

PricewaterhouseCoopers LLP, New York, New York, serves
as independent accountants for the Fund.

Performance Information

From time to time, the Fund advertises its "total
return," which is computed separately for Class A, Class B,
Class C and Advisor Class shares. Such advertisements disclose
the Fund's average annual compounded total return for the periods
prescribed by the Commission. The 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 the Fund are
assumed to have been reinvested when paid and the maximum sales
charges applicable to purchases and redemptions of the Fund's
shares are assumed to have been paid.

The Fund's average annual total return for Class A
shares for the one-year period ended June 30, 1998 was ___% and
for the period June 2, 1994 (commencement of operations) through
June 30, 1998 was ____%.

The Fund's average annual total return for Class B
shares for the one-year period ended June 30, 1998 was _____ and
for the period December 2, 1994 (commencement of operations)
through June 30, 1998 was _____.

<PAGE>

The Fund's average annual total return for Class C
shares for the one-year period ended June 30, 1998 was ____% and
for the period February 8, 1995 (commencement of distribution)
through June 30, 1998 was ____%.

The Fund's average annual total return for Advisor Class
shares for the one-year period ended June 30, 1998 was ____% and
for the period October 2, 1996 (commencement of distribution)
through June 30, 1998 was ____%.

The Fund's total return is computed separately for Class
A, Class B, Class C and Advisor Class shares. The Fund's total
return is not fixed and will fluctuate in response to prevailing
market conditions or as a function of the type and quality of the
securities in the Fund's portfolio and its expenses. Total
return information is useful in reviewing the Fund's performance
but such information may not provide a basis for comparison with
bank deposits or other investments which pay a fixed yield for a
stated period of time. An investor's principal invested in the
Fund is not fixed and will fluctuate in response to prevailing
market conditions.

Advertisements quoting performance ratings of the Fund
as measured by financial publications or by independent
organizations such as Lipper Analytical Services, Inc. ("Lipper")
and Morningstar, Inc. and advertisements presenting the
historical record of payments of income dividends by the Fund may
also from time to time be sent to investors or placed in
newspapers, magazines such as Barrons, Business Week, Changing
Times, Forbes, Investor's Daily, Money Magazine, The New York
Times and The Wall Street Journal or other media on behalf of the
Fund.

Additional Information

Any shareholder inquiries may be directed to the
shareholder's broker or other financial adviser or to Alliance
Fund Services, Inc. at the address or telephone numbers shown on
the front cover of this Statement of Additional Information. This
Statement of Additional Information does not contain all the
information set forth in the Registration Statement filed by the
Fund with the Commission under the 1933 Act. Copies of the
Registration Statement may be obtained at a reasonable charge
from the Commission or may be examined, without charge, at the
offices of the Commission in Washington, D.C.

<PAGE>

___________________________________________________________

REPORT OF INDEPENDENT ACCOUNTANTS AND FINANCIAL
STATEMENTS
___________________________________________________________

<PAGE>

______________________________________________________________

APPENDIX A: OPTIONS
________________________________________________________________

Options

The Fund will only write "covered" put and call options,
unless such options are written for cross-hedging purposes. The
manner in which such options will be deemed "covered" is
described in the Prospectus under the heading "Investment
Objective and Policies -- Investment Practices -- Options."

The writer of an option may have no control over when
the underlying securities must be sold, in the case of a call
option, or purchased, in the case of a put option, since with
regard to certain options, the writer may be assigned an exercise
notice at any time prior to the termination of the obligation.
Whether or not an option expires unexercised, the writer retains
the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period.
If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option
is exercised, the writer must fulfill the obligation to purchase
the underlying security at the exercise price, which will usually
exceed the then market value of the underlying security.

The writer of a listed option that wishes to terminate
its obligation may effect a "closing purchase transaction." This
is accomplished by buying an option of the same series as the
option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing
corporation. However, a writer may not effect a closing purchase
transaction after being notified of the exercise of an option.
Likewise, an investor who is the holder of a listed option may
liquidate its position by effecting a "closing sale transaction".
This is accomplished by selling an option of the same series as
the option previously purchased. There is no guarantee that
either a closing purchase or a closing sale transaction can be
effected in any particular situation.

Effecting a closing transaction in the case of a written
call option will permit the Fund to write another call option on
the underlying security with either a different exercise price or
expiration date or both, or in the case of a written put option
will permit the Fund to write another put option to the extent
that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction
will permit the cash or proceeds from the concurrent sale of any
securities subject to the option to be used for other Fund

A-1

<PAGE>

investments. If the Fund desires to sell a particular security
from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale
of the security.

The Fund will realize a profit from a closing
transaction if the price of the transaction is less than the
premium received from writing the option or is more than the
premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is
more than the premium received from writing the option or is less
than the premium paid to purchase the option. Because increases
in the market price of a call option will generally reflect
increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option is likely to
be offset in whole or in part by appreciation of the underlying
security owned by the Fund.

An option position may be closed out only where there
exists a secondary market for an option of the same series. If a
secondary market does not exist, it might not be possible to
effect closing transactions in particular options with the result
that the Fund would have to exercise the options in order to
realize any profit. If the Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able
to sell the underlying security until the option expires or it
delivers the underlying security upon exercise. Reasons for the
absence of a liquid secondary market include the following:
(i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national
securities exchange ("Exchange") on opening transactions or
closing transactions or both, (iii) trading halts, suspensions or
other restrictions may be imposed with respect to particular
classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal
operations on an Exchange, (v) the facilities of an Exchange or
the Options Clearing Corporation may not at all times be adequate
to handle current trading volume, or (vi) one or more Exchanges
could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a
particular class or series of options), in which event the
secondary market on that Exchange (or in that class or series of
options) would cease to exist, although outstanding options on
that Exchange that had been issued by the Options Clearing
Corporation as a result of trades on that Exchange would continue
to be exercisable in accordance with their terms.

The Fund may write options in connection with buy-and-
write transactions; that is, the Fund may purchase a security and
then write a call option against that security. The exercise
price of the call the Fund determines to write will depend upon

A-2

<PAGE>

the expected price movement of the underlying security. The
exercise price of a call option may be below ("in-the-money"),
equal to("at-the-money") or above ("out-of-the-money") the
current value of the underlying security at the time the option
is written. Buy-and-write transactions using in-the-money call
options may be used when it is expected that the price of the
underlying security will remain flat or decline moderately during
the option period. Buy-and-write transactions using at-the-money
call options may be used when it is expected that the price of
the underlying security will remain fixed or advance moderately
during the option period. Buy-and-write transactions using out-
of-the-money call options may be used when it is expected that
the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to
the exercise price will be greater than the appreciation in the
price of the underlying security alone. If the call options are
exercised in such transactions, the Fund's maximum gain will be
the premium received by it for writing the option, adjusted
upwards or downwards by the difference between the Fund's
purchase price of the security and the exercise price. If the
options are not exercised and the price of the underlying
security declines, the amount of such decline will be offset in
part, or entirely, by the premium received.

The writing of covered put options is similar in terms
of risk/return characteristics to buy-and-write transactions. If
the market price of the underlying security rises or otherwise is
above the exercise price, the put option will expire worthless
and the Fund's gain will be limited to the premium received. If
the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the
position or take delivery of the security at the exercise price
and the Fund's return will be the premium received from the put
option minus the amount by which the market price of the security
is below the exercise price. Out-of-the-money, at-the-money, and
in-the-money put options may be used by the Fund in the same
market environments that call options are used in equivalent buy-
and-write transactions.

The Fund may purchase put options to hedge against a
decline in the value of its portfolio. By using put options in
this way, the Fund will reduce any profit it might otherwise have
realized in the underlying security by the amount of the premium
paid for the put option and by transaction costs. The Fund may
purchase call options to hedge against an increase in the price
of securities that the Fund anticipates purchasing in the future.
The premium paid for the call option plus any transaction costs
will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to
the Fund.

A-3

<PAGE>

________________________________________________________________

APPENDIX B: FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS
AND OPTIONS ON FOREIGN CURRENCIES
________________________________________________________________

Futures Contracts

The Fund may enter into contracts for the purchase or
sale for future delivery of fixed-income securities or foreign
currencies, or contracts based on financial indices including any
index of U.S. Government Securities, securities issued by foreign
government entities or common stocks. U.S. futures contracts
have been designed by exchanges which have been designated
"contracts markets" by the Commodity Futures Trading Commission
("CFTC"), and must be executed through a futures commission
merchant, or brokerage firm, which is a member of the relevant
contract market. Futures contracts trade on a number of exchange
markets, and, through their clearing corporations, the exchanges
guarantee performance of the contracts as between the clearing
members of the exchange.

At the same time a futures contract is purchased or
sold, the Fund must allocate cash or securities as a deposit
payment ("initial deposit"). It is expected that the initial
deposit would be approximately 1 1/2% to 5% of a contract's face
value. Daily thereafter, the futures contract is valued and the
payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or
increase in the contract's value.

At the time of delivery of securities pursuant to such a
contract, adjustments are made to recognize differences in value
arising from the delivery of securities with a different price or
interest rate from that specified in the contract. In some (but
not many) cases, securities called for by a futures contract may
not have been issued when the contract was written.

Although futures contracts by their terms call for the
actual delivery or acquisition of securities, in most cases the
contractual obligation is fulfilled before the date of the
contract without having to make or take delivery of the
securities. The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for
delivery in the same month. Such a transaction, which is
effected through a member of an exchange, cancels the obligation
to make or take delivery of the securities. Since all
transactions in the futures market are made, offset or fulfilled
through a clearinghouse associated with the exchange on which the

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<PAGE>

contracts are traded, the Fund will incur brokerage fees when it
purchases or sells futures contracts.

Stock Index Futures

The Fund may purchase and sell stock index futures as a
hedge against movements in the equity markets. There are several
risks in connection with the use of stock index futures by the
Fund as a hedging device. One risk arises because of the
imperfect correlation between movements in the price of the stock
index futures and movements in the price of the securities which
are the subject of the hedge. The price of the stock index
futures may move more than or less than the price of the
securities being hedged. If the price of the stock index futures
moves less than the price of the securities which are the subject
of the hedge, the hedge will not be fully effective but, if the
price of the securities being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had
not hedged at all. If the price of the securities being hedged
has moved in a favorable direction, this advantage will be
partially offset by the loss on the index future. If the price
of the future moves more than the price of the stock, the Fund
will experience either a loss or gain on the future which will
not be completely offset by movements in the price of the
securities which are subject to the hedge. To compensate for the
imperfect correlation of movements in the price of securities
being hedged and movements in the price of the stock index
futures, the Fund may buy or sell stock index futures contracts
in a greater dollar amount than the dollar amount of securities
being hedged if the volatility over a particular time period of
the prices of such securities has been greater than the
volatility over such time period of the index, or if otherwise
deemed to be appropriate by Alliance. Conversely, the Fund may
buy or sell fewer stock index futures contracts if the volatility
over a particular time period of the prices of the securities
being hedged is less than the volatility over such time period of
the stock index, or it is otherwise deemed to be appropriate by
Alliance. It is also possible that, where the Fund has sold
futures to hedge its portfolio against a decline in the market,
the market may advance and the value of securities held in the
Fund may decline. If this occurred, the Fund would lose money on
the futures and also experience a decline in value in its
portfolio securities. However, over time the value of a
diversified portfolio should tend to move in the same direction
as the market indices upon which the futures are based, although
there may be deviations arising from differences between the
composition of the Fund and the stocks comprising the index.

Where futures are purchased to hedge against a possible
increase in the price of stock before the Fund is able to invest
its cash (or cash equivalents) in stocks (or options) in an

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<PAGE>

orderly fashion, it is possible that the market may decline
instead. If the Fund then concludes not to invest in stock or
options at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss
on the futures contract that is not offset by a reduction in the
price of securities purchased.

In addition to the possibility that there may be an
imperfect correlation, or no correlation at all, between
movements in the stock index futures and the portion of the
portfolio being hedged, the price of stock index futures may not
correlate perfectly with movement in the stock index due to
certain market distortions. Rather than meeting additional
margin deposit requirements, investors may close futures
contracts through offsetting transactions which could distort the
normal relationship between the index and futures markets.
Secondly, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased
participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price
distortion in the futures market, and because of the imperfect
correlation between the movements in the stock index and
movements in the price of stock index futures, a correct forecast
of general market trends by the investment adviser may still not
result in a successful hedging transaction over a short time
frame.

Positions in stock index futures may be closed out only
on an exchange or board of trade which provides a secondary
market for such futures. Although the Fund intends to purchase
or sell futures only on exchanges or boards of trade where there
appear to be active secondary markets, there is no assurance that
a liquid secondary market on any exchange or board of trade will
exist for any particular contract or at any particular time. In
such event, it may not be possible to close a futures investment
position, and in the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of
variation margin. However, in the event futures contracts have
been used to hedge portfolio securities, such securities will not
be sold until the futures contract can be terminated. In such
circumstances, an increase in the price of the securities, if
any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee
that the price of the securities will in fact correlate with the
price movements in the futures contract and thus provide an
offset on a futures contract.

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Options on Futures Contracts

The Fund intends to purchase and write options on
futures contracts for hedging purposes. The Fund is not a
commodity pool and all transactions in futures contracts and
options on futures contracts engaged in by the Fund must
constitute bona fide hedging or other permissible transactions in
accordance with the rules and regulations promulgated by the
CFTC. The purchase of a call option on a futures contract is
similar in some respects to the purchase of a call option on an
individual security. Depending on the pricing of the option
compared to either the price of the futures contract upon which
it is based or the price of the underlying debt securities, it
may or may not be less risky than ownership of the futures
contract or underlying debt securities. As with the purchase of
futures contracts, when the Fund is not fully invested it may
purchase a call option on a futures contract to hedge against
adverse market conditions.

The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
security or foreign currency which is deliverable upon exercise
of the futures contract or securities comprising an index. If
the futures price at expiration of the option is below the
exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any decline
that may have occurred in the Fund's portfolio holdings. The
writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or
foreign currency which is deliverable upon exercise of the
futures contract or securities comprising an index. If the
futures price at expiration of the option is higher than the
exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any
increase in the price of securities which the Fund intends to
purchase. If a put or call option the Fund has written is
exercised, the Fund will incur a loss which will be reduced by
the amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, the
Fund's losses from existing options on futures may to some extent
be reduced or increased by changes in the value of portfolio
securities.

The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities. For example, the Fund may
purchase a put option on a futures contract to hedge the Fund's
portfolio against the risk of rising interest rates.

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<PAGE>

The amount of risk the Fund assumes when it purchases an
option on a futures contract is the premium paid for the option
plus related transaction costs. In addition to the correlation
risks discussed above, the purchase of an option also entails the
risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased.

Options on Foreign Currencies

The Fund may purchase and write options on foreign
currencies for hedging purposes in a manner similar to that in
which futures contracts on foreign currencies, or forward
contracts, will be utilized. For example, a decline in the
dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities,
even if their value in the foreign currency remains constant. In
order to protect against such diminutions in the value of
portfolio securities, the Fund may purchase put options on the
foreign currency. If the value of the currency does decline, the
Fund will have the right to sell such currency for a fixed amount
in dollars and will thereby offset, in whole or in part, the
adverse effect on its portfolio which otherwise would have
resulted. The purchase of an option on a foreign currency may
constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the
Fund's position, it may forfeit the entire amount of the premium
plus related transaction costs. Options on foreign currencies to
be written or purchased by the Fund are traded on U.S. and
foreign exchanges or over-the-counter.

Conversely, where a rise in the dollar value of a
currency in which securities to be acquired are denominated is
projected, thereby increasing the cost of such securities, the
Fund may purchase call options thereon. The purchase of such
options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Fund deriving from
purchases of foreign currency options will be reduced by the
amount of the premium and related transaction costs. In
addition, where currency exchange rate do not move in the
direction or to the extent anticipated, the Fund could sustain
losses on transactions in foreign currency options which would
require it to forego a portion or all of the benefits of
advantageous changes in such rates.

The Fund may write options on foreign currencies for the
same types of hedging purposes. For example, where the Fund
anticipates a decline in the dollar value of foreign currency
denominated securities due to adverse fluctuations in exchange
rates it could, instead of purchasing a put option, write a call
option on the relevant currency. If the expected decline occurs,

B-5

<PAGE>

the option will most likely not be exercised, and the diminution
in value of portfolio securities will be offset by the amount of
the premium received.

Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar cost of securities
to be acquired, the Fund could write a put option on the relevant
currency which, if rates move in the manner projected, will
expire unexercised and allow the Fund to hedge such increased
cost up to the amount of the premium. As in the case of other
types of options, however, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of
the premium, and only if rates move in the expected direction. If
this does not occur, the option may be exercised and the Fund
would be required to purchase or sell the underlying currency at
a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, the Fund
also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements
in exchange rates.

The Fund intends to write covered call options on
foreign currencies. A call option written on a foreign currency
by the Fund is "covered" if the Fund owns the underlying foreign
currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a
segregated account by its Custodian) upon conversation or
exchange of other foreign currency held in its portfolio. A call
option is also covered if the Fund has a call on the same foreign
currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less
than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is
maintained by the Fund in cash, U.S. Government Securities and
other high-grade liquid debt securities in a segregated account
with its Custodian.

The Fund also intends to write call options on foreign
currencies for cross-hedging purposes. An option that is cross-
hedged is not covered, but is designed to provide a hedge against
a decline in the U.S. dollar value of a security which the Fund
owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the
exchange rate. In such circumstances, the Fund collateralizes
the option by maintaining in a segregated account with the Fund's
Custodian, cash or other high-grade liquid debt securities in an
amount not less than the value of the underlying foreign currency
in U.S. dollars marked to market daily.

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<PAGE>

Additional Risks of Options on Futures Contracts,
Forward Contracts and Options on Foreign Currencies

Unlike transactions entered into by the Fund in futures
contracts, options on foreign currencies and forward contracts
are not traded on contract markets regulated by the CFTC or (with
the exception of certain foreign currency options) by the SEC. To
the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency
options are also traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board
Options Exchange, subject to SEC regulation. Similarly, options
on securities may be traded over-the-counter. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. Although the
purchaser of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could
be lost. Moreover, the option writer and a trader of forward
contracts could lose amounts substantially in excess of their
initial investments, due to the margin and collateral
requirements associated with such positions.

Options on foreign currencies traded on national
securities exchanges are within the jurisdiction of the SEC, as
are other securities traded on such exchanges. As a result, many
of the protections provided to traders on organized exchanges
will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on
a national securities exchange are cleared and guaranteed by the
Options Clearing Corporation ("OCC"), thereby reducing the risk
of counterparty default. Further, a liquid secondary market in
options traded on a national securities exchange may be more
readily available than in the over-the-counter market,
potentially permitting the Fund to liquidate open positions at a
profit prior to exercise or expiration, or to limit losses in the
event of adverse market movements.

The purchase and sale of exchange-traded foreign
currency options, however, is subject to the risks of the
availability of a liquid secondary market described above, as
well as the risks regarding adverse market movements, margining
of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects
of other political and economic events. In addition, exchange-
traded options on foreign currencies involve certain risks not
presented by the over-the-counter market. For example, exercise
and settlement of such options must be made exclusively through
the OCC, which has established banking relationships in
applicable foreign countries for this purpose. As a result, the
OCC may, if it determines that foreign governmental restrictions
or taxes would prevent the orderly settlement of foreign currency

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<PAGE>

option exercise, or would result in undue burdens on the OCC or
its clearing member, impose special procedures on exercise and
settlement, such as technical changes in the mechanics of
delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.

In addition, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies
may be traded on foreign exchanges. Such transactions are
subject to the risk of governmental actions affecting trading in
or the prices of foreign currencies or securities. The value of
such positions also could be adversely affected by (i) other
complex foreign political and economic factors, (ii) lesser
availability than in the United States of data on which to make
trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during nonbusiness
hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) lesser trading
volume.

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________________________________________________________________

APPENDIX C: 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 edged." 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 impair 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 payments 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 payments or of maintenance of other terms
of the contract over any long period of time may be small.

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<PAGE>

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.

Unrated: When no rating has been assigned or when 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: Those bonds in the Aa, A, Baa, Ba and B groups
which Moody's believe possess the strongest investment attributes
are designated by the symbols Aa 1, A-1, Baa 1, Ba 1 and B 1.

Standard & Poor's Ratings Services

AAA: Bonds rated AAA have the highest rating assigned
by Standard & Poor's. Capacity to pay interest and repay
principal is extremely strong.

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<PAGE>

AA: Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest rated
issues only in small degree.

A: Bonds rated A have a strong capacity to pay interest
and repay principal although they are somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions than bonds in higher rated categories.

BBB: Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas they
normally exhibit 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 bonds
in this category than in higher rated categories.

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

C1: The rating C1 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: Indicates that no rating has been requested, that
there is insufficient information on which to base a rating, or
that S&P does not rate a particular type of obligation as a
matter of policy.

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_______________________________________________________________

APPENDIX D:

CERTAIN EMPLOYEE BENEFIT PLANS
_______________________________________________________________

Employee benefit plans described below which are
intended to be tax-qualified under section 401(a) of the Internal
Revenue Code of 1986, as amended ("Tax Qualified Plans"), for
which Merrill Lynch, Pierce, Fenner & Smith Incorporated or an
affiliate thereof ("Merrill Lynch") is recordkeeper (or with
respect to which recordkeeping services are provided pursuant to
certain arrangements as described in paragraph (ii) below)
("Merrill Lynch Plans") are subject to specific requirements as
to the Fund shares which they may purchase. Notwithstanding
anything to the contrary contained elsewhere in this Statement of
Additional Information, the following Merrill Lynch Plans are not
eligible to purchase Class A shares and are eligible to purchase
Class B shares of the Fund at net asset value without being
subject to a contingent deferred sales charge:

(i) Plans for which Merrill Lynch is the recordkeeper on a
daily valuation basis, if when the plan is established
as an active plan on Merrill Lynch's recordkeeping
system:

(a) the plan is one which is not already
investing in shares of mutual funds or
interests in other commingled investment
vehicles of which Merrill Lynch Asset
Management, L.P. is investment adviser or
manager ("MLAM Funds"), and either (A) the
aggregate assets of the plan are less than
$3 million or (B) the total of the sum of
(x) the employees eligible to participate in
the plan and (y) those persons, not
including any such employees, for whom a
plan account having a balance therein is
maintained, is less than 500, each of (A)
and (B) to be determined by Merrill Lynch in
the normal course prior to the date the plan
is established as an active plan on Merrill
Lynch's recordkeeping system (an "Active
Plan"); or

(b) the plan is one which is already investing
in shares of or interests in MLAM Funds and
the assets of the plan have an aggregate
value of less than $5 million, as determined

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<PAGE>

by Merrill Lynch as of the date the plan
becomes an Active Plan.

For purposes of applying (a) and (b), there
are to be aggregated all assets of any Tax-
Qualified Plan maintained by the sponsor of
the Merrill Lynch Plan (or any of the
sponsor's affiliates) (determined to be such
by Merrill Lynch) which are being invested
in shares of or interests in MLAM Funds,
Alliance Mutual Funds or other mutual funds
made available pursuant to an agreement
between Merrill Lynch and the principal
underwriter thereof (or one of its
affiliates) and which are being held in a
Merrill Lynch account.

(ii) Plans for which the recordkeeper is not Merrill Lynch,
but which are recordkept on a daily valuation basis by
a recordkeeper with which Merrill Lynch has a
subcontracting or other alliance arrangement for the
performance of recordkeeping services, if the plan is
determined by Merrill Lynch to be so eligible and the
assets of the plan are less than $3 million.

Class B shares of the Fund held by any of the
above-described Merrill Lynch Plans are to be replaced at
Merrill Lynch's direction through conversion, exchange or
otherwise by Class A shares of the Fund on the earlier of
the date that the value of the plan's aggregate assets first
equals or exceeds $5 million or the date on which any Class
B share of the Fund held by the plan would convert to a
Class A share of the Fund as described under "Purchase of
Shares" and "Redemption and Repurchase of Shares."

Any Tax Qualified Plan, including any Merrill Lynch
Plan, which does not purchase Class B shares of the Fund
without being subject to a contingent deferred sales charge
under the above criteria is eligible to purchase Class B
shares subject to a contingent deferred sales charge as well
as other classes of shares of the Fund as set forth above
under "Purchase of Shares" and "Redemption and Repurchase of
Shares.

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<PAGE>

PART C
OTHER INFORMATION

ITEM 23. Exhibits

(a) (1) Articles of Incorporation - Incorporated by
reference to Exhibit 1 to Post-Effective
Amendment No. 8 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 31, 1997.

(2) Articles of Amendment to Articles of
Incorporation dated and filed April 21, 1994 -
Incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 8 of Registrant's
Registration Statement on Form N-1A (File Nos.
33-76598 and 811-08426) filed with the
Securities and Exchange Commission on October
31, 1997.

(3) Articles of Transfer of Registrant dated and
filed October 27, 1995 - Incorporated by
reference to Exhibit 1(c) to Post-Effective
Amendment No. 9 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 30, 1998.

(4) Articles Supplementary to Articles of
Incorporation of Registrant dated September
30, 1996 and filed October 1, 1996 -
Incorporated by reference to Exhibit 1(d) to
Post-Effective Amendment No. 9 of Registrant's
Registration Statement on Form N-1A (File Nos.
33-76598 and 811-08426) filed with the
Securities and Exchange Commission on October
30, 1998.

(b) By-Laws of the Registrant - Incorporated by
reference to Exhibit 2 to Post-Effective
Amendment No. 8 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 31, 1997.

(d) Advisory Agreement between the Registrant and
Alliance Capital Management L.P. -
Incorporated by reference to Exhibit 5 to

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<PAGE>

Post-Effective Amendment No. 8 of Registrant's
Registration Statement on Form N-1A (File Nos.
33-76598 and 811-08426) filed with the
Securities and Exchange Commission on October
31, 1997.

(e) (1) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors,
Inc. - Incorporated by reference to Exhibit
6(a) to Post-Effective Amendment No. 8 of
Registrant's Registration Statement on Form N-
1A (File Nos. 33-76598 and 811-08426) filed
with the Securities and Exchange Commission on
October 31, 1997.

(2) Amendment to Distribution Services Agreement
dated July 16, 1996 - Incorporated by
reference to Exhibit 6 to Post-Effective
Amendment No. 7 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 1, 1996.

(3) Selected Dealer Agreement between Alliance
Fund Distributors, Inc. and selected dealers
offering shares of Registrant - Incorporated
by reference to Exhibit 6(b) to Post-Effective
Amendment No. 8 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 31, 1997.

(4) Selected Agent Agreement between Alliance Fund
Distributors, Inc. and selected agents making
available shares of Registrant - Incorporated
by reference to Exhibit 6(c) to Post-Effective
Amendment No. 8 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and
811-08426) filed with the Securities and
Exchange Commission on October 31, 1997.

(f) Not applicable.

(g) Custodian Contract between the Registrant and Brown
Brothers Harriman & Co. - Incorporated by reference
to Exhibit 8 to Post-Effective Amendment No. 9 of
Registrant's Registration Statement on Form N-1A
(File Nos. 33-76598 and 811-08426) filed with the
Securities and Exchange Commission on October 30,
1998.

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<PAGE>

(h) Transfer Agency Agreement between the Registrant
and Alliance Fund Services, Inc. - Incorporated by
reference to Exhibit 9 to Post-Effective Amendment
No. 9 of Registrant's Registration Statement on
Form N-1A (File Nos. 33-76598 and 811-08426) filed
with the Securities and Exchange Commission on
October 30, 1998.

(i) (1) Opinion and Consent of Seward & Kissel -
Incorporated by reference to Exhibit 10(a) to
Post-Effective Amendment No. 8 of Registrant's
Registration Statement on Form N-1A (File Nos.
33-76598 and 811-08426) filed with the
Securities and Exchange Commission on October
31, 1997.

(2) Opinion and Consent of Venable, Baetjer &
Howard, LLP - Incorporated by reference to
Exhibit 10(b) to Post-Effective Amendment No.
8 of Registrant's Registration Statement on
Form N-1A (File Nos. 33-76598 and 811-08426)
filed with the Securities and Exchange
Commission on October 1, 1997.

(j) Not applicable.

(k) Not applicable.

(l) Not applicable.

(m) Rule 12b-1 Plan - See Exhibit (e)(1) hereto.

(n) Not applicable

(o) Rule 18f-3 Plan - Incorporated by reference to
Exhibit 18 to Post-Effective Amendment No. 6 of
Registrant's Registration Statement on Form N-1A
(File Nos. 33-76598 and 811-08426) filed with the
Securities and Exchange Commission on April 23,
1996.

Other Exhibits: Powers of Attorney for Ruth Block,
John D. Carifa, David H. Dievler, John H. Dobkin,
William H. Foulk, Jr., James M. Hester, Clifford L.
Michel, Donald J. Robinson - Incorporated by
reference to Other Exhibits to Post-Effective
Amendment No. 9 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-76598 and 811-
08426) filed with the Securities and Exchange
Commission on October 30, 1998.

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ITEM 24. Persons Controlled by or under Common Control with
Registrant.

None

ITEM 25. Indemnification.

It is the Registrant's policy to indemnify its directors
and officers, employees and other agents to the maximum
extent permitted by Section 2-418 of the General
Corporation Law of the State of Maryland and as set
forth in Article EIGHTH of Registrant's Articles of
Incorporation, filed as Exhibit (a) in response to Item
23, Article VII and Article VIII of Registrant's
By-Laws, filed as Exhibit (b) in response to Item 23,
and Section 10 of the proposed Distribution Services
Agreement, filed as Exhibit (e)(1) in response to
Item 23, all as set forth below. The liability of the
Registrant's directors and officers is dealt with in
Article EIGHTH of Registrant's Articles of
Incorporation, as set forth below. The Adviser's
liability for any loss suffered by the Registrant or its
shareholders is set forth in Section 4 of the proposed
Advisory Agreement, filed as Exhibit (d) in response to
Item 23, as set forth below.

Section 2-418 of the Maryland General Corporation Law
reads as follows:

"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS.--(a) In this section the
following words have the meanings indicated.

(1) "Director" means any person who is or was
a director of a corporation and any person who,
while a director of a corporation, is or was
serving at the request of the corporation as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, other
enterprise, or employee benefit plan.

(2) "Corporation" includes any domestic or
foreign predecessor entity of a corporation in a
merger, consolidation, or other transaction in
which the predecessor's existence ceased upon
consummation of the transaction.

(3) "Expenses" include attorney's fees.

(4) "Official capacity" means the following:

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(i) When used with respect to a director,
the office of director in the corporation; and

(ii) When used with respect to a person other
than a director as contemplated in subsection (j),
the elective or appointive office in the
corporation held by the officer, or the employment
or agency relationship undertaken by the employee
or agent in behalf of the corporation.

(iii) "Official capacity" does not include
service for any other foreign or domestic
corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.

(5) "Party" includes a person who was, is, or is
threatened to be made a named defendant or
respondent in a proceeding.

(6) "Proceeding" means any threatened, pending or
completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative.

(b)(1) A corporation may indemnify any director
made a party to any proceeding by reason of service
in that capacity unless it is established that:

(i) The act or omission of the director was
material to the matter giving rise to the
proceeding; and

1. Was committed in bad faith; or

2. Was the result of active and deliberate dishonesty;
or

(ii) The director actually received an
improper personal benefit in money, property, or
services; or

(iii) In the case of any criminal proceeding,
the director had reasonable cause to believe that
the act or omission was unlawful.

(2)(i) Indemnification may be against judgments,
penalties, fines, settlements, and
reasonable expenses actually incurred by
the director in connection with the
proceeding.

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<PAGE>

(ii) However, if the proceeding was one by or
in the right of the corporation,
indemnification may not be made in
respect of any proceeding in which the
director shall have been adjudged to be
liable to the corporation.

(3)(i) The termination of any proceeding by
judgment, order or settlement does not
create a presumption that the director
did not meet the requisite standard of
conduct set forth in this subsection.

(ii) The termination of any proceeding by
conviction, or a plea of nolo contendere
or its equivalent, or an entry of an
order of probation prior to judgment,
creates a rebuttable presumption that the
director did not meet that standard of
conduct.

(c) A director may not be indemnified under
subsection (b) of this section in respect of any
proceeding charging improper personal benefit to
the director, whether or not involving action in
the director's official capacity, in which the
director was adjudged to be liable on the basis
that personal benefit was improperly received.

(d) Unless limited by the charter:

(1) A director who has been successful, on the
merits or otherwise, in the defense of any
proceeding referred to in subsection (b) of
this section shall be indemnified against
reasonable expenses incurred by the director
in connection with the proceeding.

(2) A court of appropriate jurisdiction upon
application of a director and such notice as
the court shall require, may order
indemnification in the following
circumstances:

(i) If it determines a director is entitled
to reimbursement under paragraph (1) of
this subsection, the court shall order
indemnification, in which case the
director shall be entitled to recover the
expenses of securing such reimbursement;
or

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<PAGE>

(ii) If it determines that the director is
fairly and reasonably entitled to
indemnification in view of all the
relevant circumstances, whether or not
the director has met the standards of
conduct set forth in subsection (b) of
this section or has been adjudged liable
under the circumstances described in
subsection (c) of this section, the court
may order such indemnification as the
court shall deem proper. However,
indemnification with respect to any
proceeding by or in the right of the
corporation or in which liability shall
have been adjudged in the circumstances
described in subsection (c) shall be
limited to expenses.

(3) A court of appropriate jurisdiction may
be the same court in which the proceeding
involving the director's liability took
place.

(e)(1) Indemnification under subsection (b)
of this section may not be made by the
corporation unless authorized for a specific
proceeding after a determination has been made
that indemnification of the director is
permissible in the circumstances because the
director has met the standard of conduct set
forth in subsection (b) of this section.

(2) Such determination shall be made:

(i) By the board of directors by a
majority vote of a quorum consisting of
directors not, at the time, parties to the
proceeding, or, if such a quorum cannot be
obtained, then by a majority vote of a
committee of the board consisting solely of
two or more directors not, at the time,
parties to such proceeding and who were duly
designated to act in the matter by a majority
vote of the full board in which the designated
directors who are parties may participate;

(ii) By special legal counsel selected by
the board of directors or a committee of the
board by vote as set forth in subparagraph (i)
of this paragraph, or, if the requisite quorum
of the full board cannot be obtained therefor

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<PAGE>

and the committee cannot be established, by a
majority vote of the full board in which
directors who are parties may participate; or

(iii) By the stockholders.

(3) Authorization of indemnification and
determination as to reasonableness of
expenses shall be made in the same manner
as the determination that indemnification
is permissible. However, if the
determination that indemnification is
permissible is made by special legal
counsel, authorization of indemnification
and determination as to reasonableness of
expenses shall be made in the manner
specified in subparagraph (ii) of
paragraph (2) of this subsection for
selection of such counsel.

(4) Shares held by directors who are parties
to the proceeding may not be voted on the
subject matter under this subsection.

(f)(1) Reasonable expenses incurred
by a director who is a party to a
proceeding may be paid or reimbursed by
the corporation in advance of the final
disposition of the proceeding, upon
receipt by the corporation of:

(i) A written affirmation by the director of
the director's good faith belief that the
standard of conduct necessary for
indemnification by the corporation as
authorized in this section has been met;
and

(ii) A written undertaking by or on behalf of
the director to repay the amount if it
shall ultimately be determined that the
standard of conduct has not been met.

(2) The undertaking required by subparagraph
(ii) of paragraph (1) of this subsection
shall be an unlimited general obligation
of the director but need not be secured
and may be accepted without reference to
financial ability to make the repayment.

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<PAGE>

(3) Payments under this subsection shall be
made as provided by the charter, bylaws,
or contract or as specified in subsection
(e) of this section.

(g) The indemnification and advancement of
expenses provided or authorized by this
section may not be deemed exclusive of
any other rights, by indemnification or
otherwise, to which a director may be
entitled under the charter, the bylaws, a
resolution of stockholders or directors,
an agreement or otherwise, both as to
action in an official capacity and as to
action in another capacity while holding
such office.

(h) This section does not limit the
corporation's power to pay or reimburse
expenses incurred by a director in
connection with an appearance as a
witness in a proceeding at a time when
the director has not been made a named
defendant or respondent in the
proceeding.

(i) For purposes of this section:

(1) The corporation shall be deemed
to have requested a director to serve an
employee benefit plan where the
performance of the director's duties to
the corporation also imposes duties on,
or otherwise involves services by, the
director to the plan or participants or
beneficiaries of the plan:

(2) Excise taxes assessed on a
director with respect to an employee
benefit plan pursuant to applicable law
shall be deemed fines; and

(3) Action taken or omitted by the
director with respect to an employee
benefit plan in the performance of the
director's duties for a purpose
reasonably believed by the director to be
in the interest of the participants and
beneficiaries of the plan shall be deemed

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<PAGE>

to be for a purpose which is not opposed
to the best interests of the corporation.

(j) Unless limited by the charter:

(1) An officer of the corporation
shall be indemnified as and to the extent
provided in subsection (d) of this
section for a director and shall be
entitled, to the same extent as a
director, to seek indemnification
pursuant to the provisions of subsection
(d);

(2) A corporation may indemnify and
advance expenses to an officer, employee,
or agent of the corporation to the same
extent that it may indemnify directors
under this section; and

(3) A corporation, in addition, may
indemnify and advance expenses to an
officer, employee, or agent who is not a
director to such further extent,
consistent with law, as may be provided
by its charter, bylaws, general or
specific action of its board of directors
or contract.

(k)(1) A corporation may purchase and
maintain insurance on behalf of any
person who is or was a director, officer,
employee, or agent of the corporation, or
who, while a director, officer, employee,
or agent of the corporation, is or was
serving at the request, of the
corporation as a director, officer,
partner, trustee, employee, or agent of
another foreign or domestic corporation,
partnership, joint venture, trust, other
enterprise, or employee benefit plan
against any liability asserted against
and incurred by such person in any such
capacity or arising out of such person's
position, whether or not the corporation
would have the power to indemnify against
liability under the provisions of this
section.

(2) A corporation may provide
similar protection, including a trust

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<PAGE>

fund, letter of credit, or surety bond,
not inconsistent with this section.

(3) The insurance or similar
protection may be provided by a
subsidiary or an affiliate of the
corporation.

(l) Any indemnification of, or advance of
expenses to, a director in accordance
with this section, if arising out of a
proceeding by or in the right of the
corporation, shall be reported in writing
to the stockholders with the notice of
the next stockholders' meeting or prior
to the meeting."

Article EIGHTH of the Registrant's Articles of
Incorporation reads as follows:

"(1) To the full extent that limitations on
the liability of directors and officers are
permitted by the Maryland General Corporation
Law, no director or officer of the Corporation
shall have any liability to the Corporation or
its stockholders for damages. This limitation
on liability applies to events occurring at
the time a person serves as a director or
officer of the Corporation whether or not such
person is a director or officer at the time of
any proceeding in which liability is asserted.

"(2) The Corporation shall indemnify and
advance expenses to its currently acting and
its former directors to the full extent that
indemnification of directors is permitted by
the Maryland General Corporation Law. The
Corporation shall indemnify and advance
expenses to its officers to the same extent as
its directors and may do so to such further
extent as is consistent with law. The Board
of Directors may by By-Law, resolution or
agreement make further provision for
indemnification of directors, officers,
employees and agents to the full extent
permitted by the Maryland General Corporation
Law.

"(3) No provision of this Article shall be
effective to protect or purport to protect any
director or officer of the Corporation against

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<PAGE>

any liability to the Corporation or its
stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard
of the duties involved in the conduct of his
office.

"(4) References to the Maryland General
Corporation Law in this Article are to that
law as from time to time amended. No
amendment to the charter of the Corporation
shall affect any right of any person under
this Article based on any event, omission or
proceeding prior to the amendment."

Article VII, Section 7 of the Registrant's By-Laws reads
as follows:

Section 7. Insurance Against Certain Liabilities.
The Corporation shall not bear the cost of
insurance that protects or purports to protect
directors and officers of the Corporation against
any liabilities to the Corporation or its security
holders to which any such director or officer would
otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the
conduct of his office.

ARTICLE VIII of the Registrant's By-Laws reads as
follows:

Section 11. Indemnification of Directors and
Officers. The Corporation shall indemnify its
directors to the full extent that indemnification
of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify
its officers to the same extent as its directors
and to such further extent as is consistent with
law. The Corporation shall indemnify its directors
and officers who while serving as directors or
officers also serve at the request of the
Corporation as a director, officer, partner,
trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust,
other enterprise or employee benefit plan to the
full extent consistent with law. The
indemnification and other rights provided by this
Article shall continue as to a person who has
ceased to be a director or officer and shall inure
to the benefit of the heirs, executors and

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<PAGE>

administrators of such a person. This Article
shall not protect any such person against any
liability to the Corporation or any stockholder
thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office
("disabling conduct").

Section 12. Advances. Any current or former
director or officer of the Corporation seeking
indemnification within the scope of this Article
shall be entitled to advances from the Corporation
for payment of the reasonable expenses incurred by
him in connection with the matter as to which he is
seeking indemnification in the manner and to the
full extent permissible under the Maryland General
Corporation Law. The person seeking
indemnification shall provide to the Corporation a
written affirmation of his good faith belief that
the standard of conduct necessary for
indemnification by the Corporation has been met and
a written undertaking to repay any such advance if
it should ultimately be determined that the
standard of conduct has not been met. In addition,
at least one of the following additional conditions
shall be met: (a) the person seeking
indemnification shall provide a security in form
and amount acceptable to the Corporation for his
undertaking; (b) the Corporation is insured against
losses arising by reason of the advance; or (c) a
majority of a quorum of directors of the
Corporation who are neither "interested persons" as
defined in Section 2(a)(19) of the Investment
Company Act of 1940, as amended, nor parties to the
proceeding ("disinterested non-party directors"),
or independent legal counsel, in a written opinion,
shall have determined, based on a review of facts
readily available to the Corporation at the time
the advance is proposed to be made, that there is
reason to believe that the person seeking
indemnification will ultimately be found to be
entitled to indemnification.

Section 13. Procedure. At the request of any
person claiming indemnification under this Article,
the Board of Directors shall determine, or cause to
be determined, in a manner consistent with the
Maryland General Corporation Law, whether the
standards required by this Article have been met.
Indemnification shall be made only following:

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<PAGE>

(a) a final decision on the merits by a court or
other body before whom the proceeding was brought
that the person to be indemnified was not liable by
reason of disabling conduct or (b) in the absence
of such a decision, a reasonable determination,
based upon a review of the facts, that the person
to be indemnified was not liable by reason of
disabling conduct by (i) the vote of a majority of
a quorum of disinterested non-party directors or
(ii) an independent legal counsel in a written
opinion.

Section 14. Indemnification of Employees and
Agents. Employees and agents who are not officers
or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such
employees or agents, as may be provided by action
of the Board of Directors or by contract, subject
to any limitations imposed by the Investment
Company Act of 1940.

Section 15. Other Rights. The Board of Directors
may make further provision consistent with law for
indemnification and advance of expenses to
directors, officers, employees and agents by
resolution, agreement or otherwise. The
indemnification provided by this Article shall not
be deemed exclusive of any other right, with
respect to indemnification or otherwise, to which
those seeking indemnification may be entitled under
any insurance or other agreement or resolution of
stockholders or disinterested directors or
otherwise. The rights provided to any person by
this Article shall be enforceable against the
Corporation by such person who shall be presumed to
have relied upon it in serving or continuing to
serve as a director, officer, employee, or agent as
provided above.

Section 16. Amendments. References in this
Article are to the Maryland General Corporation Law
and to the Investment Company Act of 1940 as from
time to time amended. No amendment of these
By-Laws shall affect any right of any person under
this Article based on any event, omission or
proceeding prior to the amendment.

The Advisory Agreement between the Registrant and
Alliance Capital Management L.P. provides that
Alliance Capital Management L.P. will not be liable
under such agreements for any mistake of judgment

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<PAGE>

or in any event whatsoever except for lack of good
faith and that nothing therein shall be deemed to
protect Alliance Capital Management L.P. against
any liability to the Registrant or its security
holders to which it would otherwise be subject by
reason of wilful misfeasance, bad faith or gross
negligence in the performance of its duties
thereunder, or by reason of reckless disregard of
its duties and obligations thereunder.

The Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc.
provides that the Registrant will indemnify, defend
and hold Alliance Fund Distributors, Inc., and any
person who controls it within the meaning of
Section 15 of the Securities Act of 1933 (the
"Securities Act"), free and harmless from and
against any and all claims, demands, liabilities
and expenses which Alliance Fund Distributors, Inc.
or any controlling person may incur arising out of
or based upon any alleged untrue statement of a
material fact contained in the Registrant's
Registration Statement, Prospectus or Statement of
Additional Information or arising out of, or based
upon any alleged omission to state a material fact
required to be stated in any one of the foregoing
or necessary to make the statements in any one of
the foregoing not misleading.

The foregoing summaries are qualified by the entire
text of Registrant's Articles of Incorporation and
By-Laws, the proposed Advisory Agreement between
Registrant and Alliance Capital Management L.P. and
the proposed Distribution Services Agreement
between Registrant and Alliance Fund Distributors,
Inc. which are filed herewith as Exhibits 1, 2, 5
and 6(a), respectively, in response to Item 24 and
each of which are incorporated by reference herein.

Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to
directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in
the opinion of the Securities and Exchange
Commission, such indemnification is against public
policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the Registrant of
expenses incurred or paid by a director, officer or

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<PAGE>

controlling person of the Registrant in the
successful defense of any action, suit or
proceeding) is asserted by such director, officer
or controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of
whether such indemnification by it is against
public policy as expressed in the Securities Act
and will be governed by the final adjudication of
such issue.

In accordance with Release No. IC-11330
(September 2, 1980), the Registrant will indemnify
its directors, officers, investment manager and
principal underwriters only if (1) a final decision
on the merits was issued by the court or other body
before whom the proceeding was brought that the
person to be indemnified (the "indemnitee") was not
liable by reason or willful misfeasance, bad faith,
gross negligence or reckless disregard of the
duties involved in the conduct of his office
("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the
facts, that the indemnitee was not liable by reason
of disabling conduct, by (a) the vote of a majority
of a quorum of the directors who are neither
"interested persons" of the Registrant as defined
in section 2(a)(19) of the Investment Company Act
of 1940 nor parties to the proceeding
("disinterested, non-party trustees"), or (b) an
independent legal counsel in a written opinion.
The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers,
investment adviser or principal underwriters in
defending a proceeding, upon the undertaking by or
on behalf of the indemnitee to repay the advance
unless it is ultimately determined that he is
entitled to indemnification and, as a condition to
the advance, (1) the indemnitee shall provide a
security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason
of any lawful advances, or (3) a majority of a
quorum of disinterested, non-party directors of the
Registrant, or an independent legal counsel in a
written opinion, shall determine, based on a review
of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be
found entitled to indemnification.

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<PAGE>

The Registrant participates in a joint
trustees/directors and officers liability insurance
policy issued by the ICI Mutual Insurance Company.
Coverage under this policy has been extended to
directors, trustees and officers of the investment
companies managed by Alliance Capital Management
L.P.

Under this policy, outside trustees and directors
are covered up to the limits specified for any
claim against them for acts committed in their
capacities as trustee or director. A pro rata
share of the premium for this coverage is charged
to each investment company and to the Adviser.

ITEM 26. Business and Other Connections of Investment
Adviser.

The descriptions of Alliance Capital Management
L.P. under the captions "Management of the Fund" in
the Prospectus and in the Statement of Additional
Information constituting Parts A and B,
respectively, of this Registration Statement are
incorporated by reference herein.

The information as to the directors and executive
officers of Alliance Capital Management
Corporation, the general partner of Alliance
Capital Management L.P., set forth in Alliance
Capital Management L.P.'s Form ADV filed with the
Securities and Exchange Commission on April 21,
1988 (File No. 801-32361) and amended through the
date hereof, is incorporated by reference.

ITEM 27. Principal Underwriters

(a) Alliance Fund Distributors, Inc., the Registrant's
Principal Underwriter in connection with the sale
of shares of the Registrant. Alliance Fund
Distributors, Inc. also acts as Principal
Underwriter or Distributor for the following
investment companies:

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.

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<PAGE>

Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China 97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Institutional Funds, Inc.
Alliance Institutional Reserves, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income
Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios

(b) The following are the Directors and Officers of Alliance
Fund Distributors, Inc., the principal place of business
of which is 1345 Avenue of the Americas, New York, New
York, 10105.

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<PAGE>

POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT

Michael J. Laughlin Director and Chairman

John D. Carifa Director

Robert L. Errico Director and President

Geoffrey L. Hyde Director and Senior Vice President

Dave H. Williams Director

David Conine Executive Vice President

Richard K. Saccullo Executive Vice President

Edmund P. Bergan, Jr. Senior Vice President, Secretary
General Counsel and
Secretary

Richard A. Davies Senior Vice President
and Managing Director

Robert H. Joseph, Jr. Senior Vice President
and Chief Financial Officer

Anne S. Drennan Senior Vice President and Treasurer

Karen J. Bullot Senior Vice President

James S. Comforti Senior Vice President

James L. Cronin Senior Vice President

Daniel J. Dart Senior Vice President

Byron M. Davis Senior Vice President

Mark J. Dunbar Senior Vice President

Donald N. Fritts Senior Vice President

Bradley F. Hanson Senior Vice President

Richard E. Khaleel Senior Vice President

Stephen R. Laut Senior Vice President

Susan L. Matteson-King Senior Vice President

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<PAGE>

Daniel D. McGinley Senior Vice President

Ryne A. Nishimi Senior Vice President

Antonios G. Poleondakis Senior Vice President

Robert E. Powers Senior Vice President

Raymond S. Sclafani Senior Vice President

Gregory K. Shannahan Senior Vice President

Joseph F. Sumanski Senior Vice President

Peter J. Szabo Senior Vice President

Nicholas K. Willett Senior Vice President

Richard A. Winge Senior Vice President

Gerard J. Friscia Vice President and Controller

Jamie A. Atkinson Vice President

Benji A. Baer Vice President

Kenneth F. Barkoff Vice President

Casimir F. Bolanowski Vice President

Michael E. Brannan Vice President

Timothy W. Call Vice President

Kevin T. Cannon Vice President

John R. Carl Vice President

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Richard W. Dabney Vice President

Stephen J. Demetrovits Vice President

John F. Dolan Vice President

John C. Endahl Vice President

Sohaila S. Farsheed Vice President

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<PAGE>

Shawn C. Gage Vice President

Andrew L. Gangolf Vice President and Assistant
Assistant General Secretary
Counsel

Mark D. Gersten Vice President Treasurer and
Chief Financial
Officer

Joseph W. Gibson Vice President

John Grambone Vice President

George C. Grant Vice President

Charles M. Greenberg Vice President

Alan Halfenger Vice President

William B. Hanigan Vice President

Scott F. Heyer Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo Vice President

Scott Hutton Vice President

Richard D. Keppler Vice President Vice President

Gwenn M. Kessler Vice President

Donna M. Lamback Vice President

Henry Michael Lesmeister Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Jerry W. Lynn Vice President

Christopher J. MacDonald Vice President

Michael F. Mahoney Vice President

Shawn P. McClain Vice President

Jeffrey P. Mellas Vice President

C-21

<PAGE>

Thomas F. Monnerat Vice President

Christopher W. Moore Vice President

Timothy S. Mulloy Vice President

Joanna D. Murray Vice President

Nicole Nolan-Koester Vice President

John C. O'Connell Vice President

John J. O'Connor Vice President

James J. Posch Vice President

Domenick Pugliese Vice President and Assistant
Assistant General Secretary
Counsel

Bruce W. Reitz Vice President

Karen C. Satterberg Vice President

John P. Schmidt Vice President

Robert C. Schultz Vice President

Richard J. Sidell Vice President

Teris A. Sinclair Vice President

Scott C. Sipple Vice President

Elizabeth Smith Vice President

Martine H. Stansbery, Jr. Vice President

Andrew D. Strauss Vice President

Michael J. Tobin Vice President

Joseph T. Tocyloski Vice President

Thomas J. Vaughn Vice President

Martha D. Volcker Vice President

Patrick E. Walsh Vice President

Mark E. Westmoreland Vice President

C-22

<PAGE>

William C. White Vice President

David E. Willis Vice President

Emilie D. Wrapp Vice President and
Assistant General
Counsel

Patrick Look Assistant Vice President
and Assistant Treasurer

Michael W. Alexander Assistant Vice President

Richard J. Appaluccio Assistant Vice President

Charles M. Barrett Assistant Vice President

Robert F. Brendli Assistant Vice President

Maria L. Carreras Assistant Vice President

John P. Chase Assistant Vice President

Russell R. Corby Assistant Vice President

Jean A. Cronin Assistant Vice President

John W. Cronin Assistant Vice President

Terri J. Daly Assistant Vice President

Ralph A. DiMeglio Assistant Vice President

Faith C. Deutsch Assistant Vice President

John E. English Assistant Vice President

Duff C. Ferguson Assistant Vice President

James J. Hill Assistant Vice President

Theresa Iosca Assistant Vice President

Erik A. Jorgensen Assistant Vice President

Eric G. Kalender Assistant Vice President

Edward W. Kelly Assistant Vice President

Michael Laino Assistant Vice President

C-23

<PAGE>

Nicholas J. Lapi Assistant Vice President

Kristine J. Luisi Assistant Vice President

Kathryn Austin Masters Assistant Vice President

Richard F. Meier Assistant Vice President

Mary K. Moore Assistant Vice President

Richard J. Olszewski Assistant Vice President

Catherine N. Peterson Assistant Vice President

Rizwan A. Raja Assistant Vice President

Carol H. Rappa Assistant Vice President

Clara Sierra Assistant Vice President

Gayle S. Stamer Assistant Vice President

Eileen Stauber Assistant Vice President

Vincent T. Strangio Assistant Vice President

Marie R. Vogel Assistant Vice President

Wesley S. Williams Assistant Vice President

Matthew Witschel Assistant Vice President

Christopher J. Zingaro Assistant Vice President

Mark R. Manley Assistant Secretary

ITEM 28. Location of Accounts and Records.

The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the rules thereunder
are maintained as follows: journals, ledgers,
securities records and other original records are
maintained principally at the offices of Alliance Fund
Services, Inc., 500 Plaza Drive, Secaucus, New Jersey,
07094 and at the offices of Brown Brothers Harriman &
Co., the Registrant's custodian, 40 Water Street,
Boston, Massachusetts 02109. All other records so
required to be maintained are maintained at the offices
of Alliance Capital Management L.P., 1345 Avenue of the
Americas, New York, New York, 10105.

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ITEM 29. Management Services.

Not applicable.

ITEM 30. Undertakings.

(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the Registrant's
latest report to Shareholders, upon request and without charge.

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SIGNATURES

Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on the 24th day of November, 1998.

ALLIANCE WORLDWIDE PRIVATIZATION FUND, INC.

By: /s/John D. Carifa
John D. Carifa
Chairman and President

Pursuant to the requirements of the Securities Act of
1933, as amended, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities
and on the date indicated.

Signature Title Date

1. Principal Executive Officer:

/s/John D. Carifa Chairman November 24, 1998
_________________ and President
John D. Carifa

2. Principal Financial
and Accounting
Officer:

/s/Mark D. Gersten Treasurer November 24, 1998
__________________
Mark D. Gersten

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3. All of the Directors
Ruth Block
John D. Carifa
David H. Dievler
John H. Dobkin
William H. Foulk, Jr.
James M. Hester
Clifford L. Michel
Donald J. Robinson

By:/s/Edmund P. Bergan, Jr. November 24, 1998
_______________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.

C-27

<PAGE>

Index To Exhibits

Exhibit No. Description of Exhibits Page

None.

C-28
00250202.AU8