ALLIANCE ALL ASIA INVESTMENT FUND INC, 485BPOS, 1995-06-01

ALLIANCE ALL ASIA INVESTMENT FUND INC
485BPOS, 1995-06-01

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<PAGE>

As filed with the Securities and Exchange
Commission on June 1, 1995

File Nos. 33-84270
811-8776

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. 2 X
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 3 X

___________________________________

ALLIANCE ALL-ASIA INVESTMENT 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:
Bruce D. Senzel, Esq.
Seward & Kissel
One Battery Park Plaza
New York, New York 10004

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

<PAGE>

__X__ immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)
_____ on (date) pursuant to paragraph (a)(i)
_____ 75 days after filing pursuant to paragraph (a)(ii)
_____ on (date) pursuant to paragraph (a)(ii) of rule 485

If appropriate, check the following box:

_____ this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

Registrant has registered an indefinite number of shares of
common stock pursuant to Rule 24f-2 under the Investment Company
Act of 1940.

Page of Sequentially Numbered Pages
Exhibit Index Appears on Page

<PAGE>

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

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

PART A

Item 1. Cover Page Cover Page

Item 2. Synopsis Expense Information

Item 3. Condensed Financial Information Not Applicable

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

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

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

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

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

Item 9. Pending Legal Proceedings Not Applicable

LOCATION IN STATEMENT OF
PART B ADDITIONAL INFORMATION
(caption)

Item 10. Cover Page Cover Page

Item 11. Table of Contents Cover Page

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

Item 13. Investment Objectives and Policies Description of the Fund

Item 14. Management of the Registrant Management of the Fund

Item 15. Control Persons and Principal
Holders of Securities Not Applicable

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

<PAGE>

Item 17. Brokerage Allocation and
Other Practices Brokerage and Portfolio
Transactions

Item 18. Capital Stock and Other Securities General Information

Item 19. Purchase, Redemption and Pricing
of Securities Being Offered Purchase of Shares; Redemption
and Repurchase of Shares;
Dividends, Distributions and
Taxes

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

Item 21. Underwriters General Information

Item 22. Calculation of Performance Data General Information

Item 23. Financial Statements Financial Statement; Report of
Independent Accountants

<PAGE>

Alliance Capital [Logo] The Alliance Stock Funds
_________________________________________________________________

June [ ], 1995

Supplement to Prospectus dated February 1, 1995

This supplement sets forth unaudited per share income and
capital change information for the periods indicated for Alliance
All-Asia Investment Fund, Inc. ("All-Asia Fund"), pursuant to the
requirements of the Securities and Exchange Commission applicable
to registered investment companies in their first year of
operations and for Alliance International Fund ("International
Fund"), Alliance Worldwide Privatization Fund, Inc. ("Worldwide
Privatization Fund"), Alliance New Europe Fund, Inc. ("New Europe
Fund"), Alliance Global Small Cap Fund, Inc. ("Global Small Cap
Fund"), Strategic Balanced Fund and Alliance Balanced Shares,
Inc. ("Balanced Shares") (collectively, the "Funds"). Unaudited
financial statements and related notes as of the same dates for
the respective Funds have also been added to the Statement of
Additional Information for each Fund.

The following information supplements the information under
the heading "Financial Information" on pages 7 through 15 of the
Prospectus.

<PAGE>

Net Realized
and Net Increase
Net Asset Unrealized (Decrease) Dividends Distributions
Value Net Gain in Net Asset from Net from Net
Beginning Investment (Loss) on Value from Investment Realized
Fiscal Period of Period Income (Loss) Investments Operations Income Gains
_____________ _________ _____________ ___________ ____________ ___________ _____________

International Fund

Class A
Six months
ended 12/31/94.... $18.38 $(.05) $(.26) $(.31) $0.00 $(1.62)
Class B
Six months
ended 12/31/94.... $17.90 $(.06)(b) $(.31) $(.37) $0.00 $(1.62)
Class C
Six months
ended 12/31/94.... $17.91 $(.03) $(.34) $(.37) $0.00 $(1.62)

Worldwide
Privatization Fund

Class A
Six months
ended 12/31/94.... $9.75 $(.01) $.24 $.23 $0.00 $0.00
Class B
Six months
ended 12/31/94.... $9.74 $(.03) $.23 $.20 $0.00 $0.00

New Europe Fund

Class A
Six months
ended 1/31/95..... $12.66 $(.07) $.23 $.16 $(.09) $0.00
Class B
Six months
ended 1/31/95..... $12.41 $(.11) $.22 $.11 $(.09) $0.00
Class C
Six months
ended 1/31/95..... $12.42 $(.12) $.23 $.11 $(.09) $0.00

All Asia Fund

Class A
11/28/94**

<PAGE>

- 4/30/95......... $10.00 $.11(c) $.13 $.24 $0.00 $0.00
Class B
11/18/94**
- 4/30/95......... $10.00 $.09(c) $.13 $.22 $0.00 $0.00
Class C
11/28/94**
- 4/30/95......... $10.00 $.08(c) $.16 $.24 $0.00 $0.00

</TABLE>

<PAGE>

Total Net Assets Ratio of Net
Total Net Asset Investment At End of Ratio Of Investment
Dividends Value Return Based Period Expenses Income (Loss)
And End of On Net Asset (000's) To Average To Average Portfolio
Distributions Period Value (a) omitted) Net Assets Net Assets Turnover Rate
_____________ _________ _____________ ____________ ____________ ___________ _____________

$(1.62) $16.45 (1.57)% $176,845 1.77%* (.46)%* 57%

$(1.62) $15.91 (1.94)% $49,532 2.56%* (1.32)%* 57%

$(1.62) $15.92 (1.94)% $29,173 2.56%* (1.29)%* 57%

$0.00 $9.98 2.36% $14,226 2.30%* (.04)%* 16%

$0.00 $9.94 2.05% $81,181 2.99%* (.75)%* 16%

$(.09) $12.73 1.29% $76,095 2.04%* (.89)%* 39%

$(.09) $12.43 .91% $29,978 2.74%* (1.59)%* 39%

$(.09) $12.44 .91% $8,863 2.73%* (1.59)%* 39%

$0.00 $10.24 2.40% $1,917 .19%*(d) 3.44%* 51%

<PAGE>

$0.00 $10.22 2.20% $3,019 .90%*(d) 2.73%* 51%

$0.00 $10.24 2.40% $185 .71%*(d) 2.87%* 51%

</TABLE>

<PAGE>

Net Realized
and Net Increase
Net Asset Unrealized (Decrease) Dividends Distributions
Value Net Gain in Net Asset from Net from Net
Beginning Investment (Loss) on Value from Investment Realized
Fiscal Period of Period Income (Loss) Investments Operations Income Gains
_____________ _________ ____________ ____________ ____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>

Global Small
Cap Fund

Class A
Six months
ended 1/31/95..... $11.08 $(.04)(b) $(.23) $(.27) $(2.11) $0.00
Class B
Six months
ended 1/31/95..... $10.78 $(.02) $(.28) $(.30) $(2.11) $0.00
Class C
Six months
ended 1/31/95..... $10.79 $(.09) $(.22) $(.31) $(2.11) $0.00

Strategic
Balanced Fund

Class A
Six months
ended 1/31/95..... $16.26 $.18(c) $(.47) $(.29) $(.22) $(.04)
Class B
Six months
ended 1/31/95..... $14.10 $.11(c) $(.40) $(.29) $(.12) $(.04)
Class C
Six months
ended 1/31/95..... $14.11 $.10(c) $(.39) $(.29) $(.12) $(.04)

Balanced Shares

Class A
Six months
ended 1/31/95..... $13.38 $.23 $(.23) $0.00 $(.20) $(.02)
Class B
Six months
ended 1/31/95..... $13.23 $.16 $(.21) $(.05) $(.16) $(.02)
Class C
Six months
ended 1/31/95..... $13.24 $.16 $(.21) $(.05) $(.16) $(.02)

</TABLE>

<PAGE>

$(2.11) $8.70 (2.26)% $53,830 2.52%* (1.24)%* 65%

$(2.11) $8.37 (2.61)% $4,574 3.24%* (2.00)%* 65%

$(2.11) $8.37 (2.73)% $1,131 3.21%* (1.96)%* 65%

$(.26) $15.71 (1.79)% $9,102 1.40%*(d) 2.14%* 34%

$(.16) $13.65 (2.07)% $39,008 2.10%*(d) 1.44%* 34%

$(.16) $13.66 (2.07)% $4,119 2.10%*(d) 1.45%* 34%

$(.22) $13.16 .09% $146,840 1.26%* 3.36%* 61%

$(.18) $13.00 (.32)% $13,350 2.04%* 2.58%* 61%

$(.18) $13.01 (.32)% $4,690 2.03%* 2.56%* 61%

___________________________________________
* Annualized
** Commencement of operations

<PAGE>

(a) Total investment return is calculated assuming an initial investment made at the net asset value at
the beginning of the period, reinvestment of all dividends and distributions at the net asset value
during the period, and a redemption on the last day of the period. Initial sales charge or
contingent deferred sales charge is not reflected in the calculation of total investment return.
Total investment returns calculated for periods of less than one year are not annualized.
(b) Based on average shares outstanding.
(c) Net of fee waived and expenses reimbursed by Alliance
(d) Net of expenses waived/reimbursed. If All-Asia Fund had borne all expenses, the expense ratios
would have been, with respect to Class A shares 11.71% (annualized), with respect to Class B shares
12.35% (annualized) and with respect to Class C shares 11.80% (annualized). If Strategic Balanced
Fund had borne all expenses, the expense ratios would have been, with respect to Class A shares
1.59% (annualized) and with respect to Class B and Class C shares 2.29% (annualized).
</TABLE>

Additionally, as of May 1, 1995, the portfolio manager of
Strategic Balanced Fund is Bruce W. Calvert. Mr. Calvert is a
Vice Chairman and the Chief Investment Officer of Alliance
Capital Management Corporation, the sole general partner of
Alliance Capital Management L.P., with which he has been
associated since prior to 1990.

<PAGE>

Prospectus for Alliance All-Asia Investment Fund, Inc. -
Incorporated by reference to Alliance All-Asia Investment Fund,
Inc. Prospectus in Post-Effective Amendment No. 1 of Registration
Statement on Form N-1A (File Nos. 33-84270 and 811-8776), filed
January 27, 1995.

<PAGE>

ALLIANCE ALL-ASIA
(Logo)(R) INVESTMENT 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, 1995 (amended June 1, 1995)
_________________________________________________________________

This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the current
Prospectus. Copies of such Prospectus may be obtained by
contacting Alliance Fund Services, Inc. at the address or the
"Literature" telephone number shown above.

TABLE OF CONTENTS

Page

Description of the Fund . . . . . . . . . . . . . . 3

Management of the Fund . . . . . . . . . . . . . . . . . 29

Expenses of the Fund . . . . . . . . . . . . . . . . . . 38

Purchase of Shares . . . . . . . . . . . . . . . . . . . 40

Redemption and Repurchase of Shares . . . . . . . . . . 55

Shareholder Services . . . . . . . . . . . . . . . . . . 59

Net Asset Value . . . . . . . . . . . . . . . . . . . . 65

Dividends, Distributions and Taxes . . . . . . . . . . . 66

Brokerage and Portfolio Transactions . . . . . . . . . . 74

General Information . . . . . . . . . . . . . . . . . . 75

Report of Independent Auditors and Financial Statements. 80

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

<PAGE>

Appendix D: Japan . . . . . . . . . . . . . . . . . . . D-1

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

<PAGE>

________________________________________________________________

DESCRIPTION OF THE FUND
________________________________________________________________

Except as otherwise indicated, the investment policies
of Alliance All-Asia Investment Fund, Inc. (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 is fundamental and 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
investment company whose investment objective is to seek long-
term capital appreciation. In seeking to achieve its investment
objective, the Fund will invest at least 65% of its total assets
in equity 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 may also invest in
equity or debt securities issued by non-Asian issuers provided
that the Fund will invest at least 80% of its total assets in
equity securities issued by Asian companies and Asian debt
securities referred to above. The Fund expects to invest, from
time to time, a significant portion, but less than 50t, of its
assets in equity securities of Japanese companies. For a
description of Japan, see Appendix D. Equity securities are
common and preferred stocks, securities convertible into common
and preferred stocks and equity-linked debt securities, but do
not include rights, warrants or options to subscribe for or
purchase common and preferred stocks.

The Fund defines an Asian company to be 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.

For purposes of this Statement of Additional
Information, Asian countries include Australia, the Democratic
Socialist Republic of Sri Lanka ("Sri Lanka"), Hong Kong, the
Islamic Republic of Pakistan ("Pakistan"), Japan, the Kingdom of
Thailand ("Thailand"), Malaysia, Negara Brunei Darussalam
("Brunei"), New Zealand, the People's Republic of China
("China"), the People's Republic of Kampuchea ("Cambodia"), the

<PAGE>

Republic of China ("Taiwan"), the Republic of India ("India"),
the Republic of Indonesia ("Indonesia"), the Republic of Korea
("South Korea"), the Republic of the Philippines ("the
Philippines"), the Republic of Singapore ("Singapore"), the
Socialist Republic of Vietnam ("Vietnam") and the Union of
Myanmar ("Myanmar").

How The Fund Pursues Its Objective

Investment in Asian Countries. 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 Capital Management L.P., the Fund's investment
adviser (the "Adviser"), believes that certain conditions exist
in Asian countries which 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. The Adviser believes that
these conditions are important to the long-term economic growth
of Asian countries.

As the economics 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.

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. For example, Korea and India have recently relaxed
investment restrictions and Vietnamese direct investments have
recently become available to U.S. investors. The Fund also
offers investors the opportunity to access relatively restricted
markets. The Adviser believes that investment opportunities in
Asian countries will continue to expand.

<PAGE>

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.

The Fund may maintain not more than 5% of its net assets
in lower-rated securities and lower-rated loans and other lower-
rated direct debt instruments rated below Baa by Moody's
Investors Service, Inc. ("Moody's") and BBB by Standard and
Poor's Rating Group ("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" and Appendix C for a description of such ratings.

Defensive Position. For temporary defensive purposes,
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
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 Asian companies, 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

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

<PAGE>

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. 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.

Convertible Securities. The Fund may invest up to 25%
of its total assets in convertible securities of issuers whose
common stocks are eligible for purchase by the Fund under the
investment policies described above. Convertible securities
include bonds, debentures, corporate notes and preferred stocks.
Convertible securities are such instruments that are convertible
at a stated exchange rate into common stock. Prior to their
conversion, convertible securities have the same general
characteristics as non-convertible 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 convertible 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.

<PAGE>

Depositary Receipts and Securities of Supranational
Entities. The Fund may invest in depositary receipts, securities
of supranational entities denominated in the currency of any
country, securities of multinational companies and "semi-
governmental securities". 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 a 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 a 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. The
investments of the Fund in 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. "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 which are not backed by its full faith
and credit and general taxing powers.

Equity-Linked Debt Securities. The Fund may, with the
objective of realizing capital appreciation, invest up to 25% of
its net assets in equity-linked debt securities. Equity-linked
debt securities are securities with respect to which the amount
of interest and/or principal that the issuer thereof is obligated
to pay is linked to the performance of a specified index of
equity securities. Such amount may be significantly greater or
less than payment obligations in respect of 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 the Fund. Furthermore, as with any debt
securities, the values of equity-linked debt securities will
generally vary inversely with changes in interest rates. The
Fund's ability to dispose of equity-linked debt securities will
depend on the availability of liquid markets for such securities.
Investment in equity-linked debt securities may be considered to

<PAGE>

be speculative. As with other securities, the Fund could lose
its entire investment in equity-linked debt securities.

Loans and other Direct Debt Instruments. The Fund may
invest up to 25% of its net assets in 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 the 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 the 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. If the Fund does not receive scheduled interest or
principal payments on such indebtedness, the Fund's share price
and yield could be adversely affected. Loans that are fully
secured offer the 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. Indebtedness of 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
Asian countries 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.

Investments in loans through direct assignment of a
financial institution's interests with respect to a loan may
involve additional risks to the Fund. For example, if a loan is
foreclosed, the 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.

<PAGE>

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, the 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 the 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 the Fund may include
letters of credit, revolving credit facilities, or other standby
financing commitments obligating the Fund to pay additional cash
on demand. These commitments may have the effect of requiring
the 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.
The Fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under
standby financing commitments.

The Fund's investment in lower-rated loans and other
lower-rated direct debt instruments is subject to the Fund's
policy of maintaining not more than 5% of its net assets in
lower-rated securities.

Interest Rate Transactions. The Fund may enter into
interest rate swaps and may purchase or sell interest rate caps
and floors. The use of interest rate swaps is a highly
specialized activity which involves investment techniques and
risks different from those associated with ordinary portfolio
securities transactions. If the Adviser is incorrect in its
forecasts of market values, interest rates and other applicable
factors, the investment performance of the Fund would diminish
compared with what it would have been if these investment
techniques were not used. Moreover, even if the Adviser is
correct in its forecasts, there is a risk that the swap position
may correlate imperfectly with the price of the asset or
liability being hedged.

There is no limit on the amount of interest rate swap
transactions that may be entered into by the Fund. These
transactions do not involve the delivery of securities or other
underlying assets of principal. Accordingly, the risk of loss
with respect to interest rate swaps is limited to the net amount
of interest payments that the Fund is contractually obligated to
make. If the other party to an interest rate swap defaults, the
Fund's risk of loss consists of the net amount of interest
payments that the Fund contractually is entitled to receive. The

<PAGE>

Fund may purchase and sell (i.e., write) caps and floors without
limitation, subject to the segregated account requirement
described in the Prospectus under "Description of the Fund -
Additional Investment Policies and Practices - Interest Rate
Transactions."

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 cash and
liquid high-grade debt securities in a segregated account with
its custodian. A put option written by the Fund is "covered" if
the Fund maintains cash or liquid high-grade debt securities 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 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.

<PAGE>

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
cash or liquid high-grade debt securities 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
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.

<PAGE>

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 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

<PAGE>

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 instruments 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 cash not available for investment or liquid high-grade debt
securities in a segregated 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
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

<PAGE>

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"). The Fund's
Custodian will place cash not available for investment, U.S.
Government Securities or other liquid high-grade debt securities
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 securities placed in a segregated
account declines, additional cash or securities 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 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

<PAGE>

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.

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 correlations 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,
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

<PAGE>

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,
cash and/or liquid high-grade debt securities 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 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

<PAGE>

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 cash and/or liquid high-grade debt securities 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
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.

<PAGE>

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 cash or high-grade liquid debt securities
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
Directors has established procedures, which are periodically
reviewed by the Board, pursuant to which Alliance monitors the
creditworthiness of the dealers with which the Fund enters into
repurchase agreement transactions.

<PAGE>

Illiquid Securities. The Fund will not invest in
illiquid securities if immediately after such investment more
than 15% of the Fund's net assets (taken at market value) would
be invested in such 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 Adviser will monitor the illiquidity of
such securities under the supervision of the Board of Directors.

Securities Not Readily Marketable. The Fund may invest
up to 15% of its net assets in illiquid securities which include,
among others, securities for which there is no readily available
market. The Fund may therefore not be able to readily sell such
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
securities not readily marketable 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. Securities not readily
marketable 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 (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.

<PAGE>

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 as a result more
than 25% of the Fund's net assets (taken at market value) is held
as collateral for short sales at any one time. 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
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

<PAGE>

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 cash
and/or liquid high-grade debt securities 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 to exercise beneficial
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
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.

<PAGE>

Portfolio Turnover. Generally, the Fund's policy with
respect to portfolio turnover is to purchase securities with a
view to holding them for periods of time sufficient to assure
that the Fund will realize less than 30% of its gross income from
the sale or other disposition of securities held for less than
three months (see "Dividends, Distributions and Taxes-United
States Federal Income Taxation of Dividends and Distributions-
- -General" and to hold its securities for six months or longer.
However, it is also the Fund's policy 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 150%. A 150% annual turnover
rate would occur if all the securities in the Fund's portfolio
were replaced one and one-half times 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 Asian Countries; Risks of Foreign
Investment. The securities markets of many Asian 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 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.

Foreign investment in the securities markets of certain
Asian 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

<PAGE>

a particular company, or limit the investment by foreign persons
to only a specified percentage of an issuer's outstanding
securities or a specific class of securities of a company which
may have less advantageous terms (including price) 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
Asian countries are generally higher than in the United States.

Issuers of securities in Asian 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 Asian 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. Asian 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 an Asian issuer may not reflect its financial
position or results of operations in the way they would be
reflected had the financial statements been prepared in
accordance with U.S.generally accepted accounting principles. In
addition, for an issuer that keeps accounting records in local
currency, inflation accounting rules in some of the countries in
which the Fund will invest require, for both tax and accounting
purposes, that certain assets and liabilities be restated on the

<PAGE>

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 Asian 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 an
Asian 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 Asian 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.

Investment in smaller, emerging Asian companies involves
greater risk than is customarily associated with securities 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.

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

<PAGE>

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.

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
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 SEP 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 SEP)
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.

<PAGE>

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.

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.

Securities Ratings. 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

<PAGE>

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.

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;

(ii) borrow money except from banks for temporary
or emergency purposes, including the meeting of
redemption requests which might require the untimely
disposition of securities; borrowing in the aggregate
may not exceed 15%, and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value
of the Fund's total assets (including the amount
borrowed) less liabilities (not including the amount

<PAGE>

borrowed) at the time the borrowing is made; outstanding
borrowings in excess of 5% of the value of the Fund's
total assets will be repaid before any 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 Act;

(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 25% 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 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

<PAGE>

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
Securities Act.

________________________________________________________________

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,* [ ], Chairman and President, is the
President and Chief Operating Officer, the Chief Financial
Officer and a Director of ACMC** with which he has been
associated since prior to 1990.

DAVID H. DIEVLER, [ ], is a Senior Vice President of
ACMC, with which he has been associated since prior to 1990.

JOHN H. DOBKIN, [ ], has been the President of
Historic Hudson Valley (historic preservation) since 1990. From
1987 to 1992, he was a Director of ACMC. His address is 105 West
55th Street, New York, New York 10019.

_____________________

* An "interested person" of the Fund as defined in the 1940 Act.

** For purposes of this Statement of Additional Information, ACMC
refers to Alliance Capital Management Corporation, the sole
general partner of the Adviser, and to the predecessor general
partner of the Adviser of the same name.

<PAGE>

W.H. HENDERSON, [ ], has been an oil and gas consultant
since prior to 1990. He is also a Director of Nippon Peroxide
Co. Limited, Fidelity Japan OTC and Regional Markets Fund and a
consultant to Laporte Industries PLC and Reckitt and Colman PLC.
His address is Quarrey House, Charlton Horethorne, Sherborne,
Dorset, DT9 4NY, England.

STIG HOST, [ ], is the Chairman and Chief Executive
Officer of International Energy Corp. (oil and gas exploration)
with which he has been associated since prior to 1990. He is
also Chairman and Director of Kriti Exploration, Inc. (oil and
gas exploration and production), Managing Director of Kriti Oil
and Minerals, N.V., Chairman of Kriti Properties and Development
Corporation (real estate), Chairman of International marine
Sales, Inc. (marine fuels), a Director of Florida Fuels, Inc.
(marine fuels) and President of Alexander Host Foundation. He is
also a Trustee of the Winthrop Focus Funds. His address is 36
Keofferam Road, Old Greenwich, Connecticut 06870.

RICHARD M. LILLY, [ ], is retired and was formerly
President and Chief Executive Officer of Esso Italiana, S.p.A.,
Esso Europe-Africa Services and Esso North Europe A/S since prior
to 1990. His address is 70 Palace Gardens Terrace, London W8 4RR
England.

ALAN STOGA, [ ], has been a Managing Director and a
member of the Board of Directors of Kissinger Associates, Inc.
since prior to 1990. His address is Kissinger Associates, Inc.,
350 Park Avenue, New York, New York 10022.

HON. JOHN C. WEST, [ ], has been an attorney in private
practice since prior to 1990. Prior thereto he was United States
Ambassador to Saudi Arabia, Governor of South Carolina and a
Distinguished Professor of Middle East Studies, University of
south Carolina. He is also a Director of Whittaker Corp.
(chemical and aero space) and BioWhittaker Corp. (technology).
His address is P.O. Drawer 13, Hilton Head, South Carolina 29938.

ROBERT C. WHITE, [ ], is a Vice President and the Chief
Financial Officer of the Howard Hughes Medical Institute with
which he has been associated since prior to 1990. He is also a
Trustee of St. Clair Fixed Income Fund, St. Clair Tax-Free Fund
and St. Clair Equity Fund (registered investment companies) and a
Director of MEDSTAT Systems, Inc. (healthcare information).
Prior thereto he was Assistant Treasurer of Ford Motor Company.
His address is 8101 Connecticut Avenue, Apartment S501, Chevy
Chase, Maryland, 20815.

<PAGE>

Officers

JOHN D. CARIFA, Chairman and President, (see biography
above).

A. RAMA KRISHNA, Senior Vice President, [ ], is a Vice
President of ACMC, with which he has been associated with since
1993. Previously he was Chief Investment Strategist and
Director- Equity Research at First Boston Corporation since prior
to 1990.

KARAN TREHAN, Senior Vice President, [ ], is a Senior
Vice President of ACL with which he has been associated since
prior to 1991. Prior thereto, he was Managing Director of
Potomac Capital since prior to 1990.

DANIEL V. PANKER, Vice President, [ ], is a Senior Vice
President of ACMC with which he has been associated since prior
to 1990.

THOMAS BARDONG, Vice President, [ ], is a Senior Vice
President of ACMC with which he has been associated since prior
to 1990.

NICHOLAS CROSSLAND, Vice President, [ ], is an
Assistant Vice President with ACL with which he has been
associated since 1991. Prior thereto, he was a trading assistant
at Brewin, Dolphin since prior to 1990.

MARK D. GERSTEN, Treasurer and Chief Financial Officer,
[ ], is a Senior Vice President of Alliance Fund Services, Inc.
("AFS") with which he has been associated since prior to 1990.

EDMUND P. BERGAN. JR., Secretary, [ ], is Senior Vice
President and General Counsel of AFD and AFS and Vice President
and Assistant General Counsel of ACMC with which he has been
associated since prior to 1990.

PATRICK J. FARRELL, Controller, [ ], is a Vice
President of AFS with which he has been associated since prior to
1990.

STEPHEN M. ATKINS, Assistant Controller, [ ], is a
Manager of International Mutual Fund Accounting of AFS since
July, 1992. Prior thereto, he was Supervisor in International
Mutual Fund Accounting since prior to 1990.

JOSEPH J. MANTINEO, Assistant Controller, [ ], is a
Vice President of AFS with which he has been associated since
prior to 1990.

<PAGE>

The Fund does not pay any fees to, or reimburse expenses
of its Directors who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Directors during its fiscal year ended October 31, 1994, and the
aggregate compensation paid to each of the Directors during
calendar year 1994 by all of the registered investment companies
to which the Adviser provides investment advisory services
(collectively, the "Alliance Fund Complex"), are set forth below.
Each of the Directors is a director or trustee of one or more
other registered investment companies in the Alliance Fund
Complex.

Total
Pension or Compensation
Retirement Estimated from the
Benefits Annual Alliance Fund
Aggregate Accrued As Benefits Complex
Name of Director Compensation Part of Fund upon including the
of the Fund from the Fund Expenses Retirement Fund
________________ _____________ _____________ __________ _____________

John D. Carifa $-0- $-0- $-0- $-0-
David H. Dievler $-0- $-0- $-0- $-0-
John H. Dobkin $5,000 $-0- $-0- $110,750
W.H. Henderson $4,000 $-0- $-0- $ 22,250
Stig Host $4,000 s-0- $-0- $ 22,250
Richard M. Lilly $4,000 $-0- $-0- $ 22,250
Alan Stoga $4,000 $-0- $-0- $ 21,500
Hon. John C. West $4.000 $-0- $-0- $ 22,500
Robert C. White $5,000 $-0- $-0- $133,500

_____________________

As of January 12, 1995, the Directors and officers of the
Fund as a group owned less than 1% of the shares of the Fund.

Adviser

Alliance Capital Management L.P., (the "Adviser"), 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") as the Fund's Adviser (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, 1994 of more than $121 billion (of which more than
$36 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 and included, as of December 31,
1994, 29 of the FORTUNE 100 Companies. As of that date, the
Adviser and its subsidiaries employed approximately 1,450
employees who operated out of domestic offices and the overseas
offices of subsidiaries in Bombay, Istanbul, London, Sydney,
Tokyo, Toronto, Bahrain, Luxembourg and Singapore. The 51
registered investment companies comprising 103 separate
investment portfolios managed by the Adviser currently have more
than one million shareholders.

Alliance Capital Management Corporation, 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"), a holding company controlled by
AXA, a French insurance holding company. As of December 31,
1994, ACMC, Inc. and Equitable Capital Management Corporation,
each a wholly-owned direct or indirect subsidiary of Equitable,
owned in the aggregate approximately 59% of the issued and
outstanding units representing assignments of beneficial
ownership of limited partnership interests in the Adviser
("Units"). As of December 31, 1994, approximately 32% and 9% of
the Units were owned by the public and employees of the Adviser
and its subsidiaries, respectively, including employees of the
Adviser who serve as Directors of the Fund.

AXA owns approximately 60% of the outstanding voting
shares of common stock of ECI. AXA is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations are comprised of
activities in life insurance, property and casualty insurance and
reinsurance. The insurance operations are diverse geographically
with activities in France, the United States, the United Kingdom,
Canada and other countries, principally in Europe. AXA is also
engaged in asset management, investment banking and brokerage,
real estate and other financial services activities in the United
States and Europe. Based on information provided by AXA, as of
January 1, 1995, 42.3% of the issued shares (representing 54.7%
of the voting power) of AXA were owned by Midi Participations, a
French corporation that is a holding company. The voting shares
of Midi Participations are in turn owned 60% by Finaxa, a French
corporation that is a holding company, and 40% by subsidiaries of
Assicurazioni Generali S.p.A., an Italian corporation

<PAGE>

("Generali") (one of which, Belgica Insurance Holding S.A., a
Belgian corporation, owned 34.1%). As of January 1, 1995, 62.1%
of the issued shares (representing 75.7% of the voting power) of
Finaxa were owned by five French mutual insurance companies (the
"Mutuelles AXA") (one of which, AXA Assurances I.A.R.D. Mutuelle,
owned 31.8% of the issued shares) (representing 39.0% of the
voting power), and 26.5% of the issued shares (representing 16.6%
of the voting power) of Finaxa were owned by Banque Paribas, a
French bank ("Paribas"). Including the shares owned by Midi
Participations, as of January 1, 1995, the Mutuelles AXA directly
or indirectly owned 51.3% of the issued shares (representing
65.8% of the voting power) of AXA. In addition, certain
subsidiaries of AXA own 0.4% of the shares of AXA which are not
entitled to be voted. Acting as a group, the Mutuelles AXA
control AXA, Midi Participations 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.

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.

<PAGE>

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. This fee is higher than the
management fees paid by most U.S. registered investment companies
investing exclusively in securities of U.S. issuers, although the
Adviser believes the fee is generally comparable to the
management fees paid by other open-end registered investment
companies that invest in the securities of foreign issuers and it
is justified by the special care that must be given to the
selection and supervision of the particular types of securities
in which the Fund will invest. The fee is accrued daily and paid
monthly.

The Advisory Agreement provides that the Adviser will
reimburse the Fund for its net expenses (exclusive of interest,
taxes, brokerage, expenditures pursuant to the Distribution
Services Agreement described below, and extraordinary expenses,
all to the extent permitted by applicable state securities laws
and regulations) which in any year exceed the limits prescribed
by any state in which the Fund's shares are qualified for sale.
The Fund may not qualify its shares for sale in every state. The
Fund believes that at present the most restrictive state expense
ratio limitation imposed by any state in which the Fund has
qualified its shares for sale is 2.5% of the first $30 million of
the mutual fund's average net assets, 2.0% of the next $70
million of its average net assets and 1.5% of its average net
assets in excess of $100 million. Expense reimbursements, if
any, are accrued daily and paid monthly.

The Advisory Agreement became effective on October 21,
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 Investment Company Act of 1940 (the "Act") of any such
party, at a meeting called for that purpose and held on
October 20, 1994, and by the Fund's initial shareholder on
October 20, 1994.

The Advisory Agreement will remain in effect until
June 30, 1996, and thereafter for successive twelve-month periods
(computed from each July 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 Act.

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

<PAGE>

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 ACM Institutional Reserves, Inc.,
AFD Exchange Reserves, The Alliance Fund, Inc., Alliance Balanced
Shares, Inc., Alliance Bond Fund, Inc., Alliance Capital
Reserves, Alliance Counterpoint Fund, Alliance Developing Markets
Fund, Inc., Alliance Global Dollar Government Fund, Inc.,
Alliance Global Small Cap Fund, Inc., Alliance Government
Reserves, Alliance Growth and Income Fund, Inc., Alliance Income
Builder Fund, Inc., Alliance International Fund, Alliance Money
Market Fund, Alliance Mortgage Securities Income Fund, Inc.,
Alliance Mortgage Strategy Trust, 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 Short-Term Multi-
Market Trust, Inc., Alliance Technology Fund, Inc., Alliance
Utility Income Fund, Inc., Alliance Variable Products Series
Fund, Inc., Alliance World Income Trust, Inc., Alliance Worldwide
Privatization Fund, Inc., The Alliance Portfolios, Fiduciary
Management Associates and The Hudson River Trust, all registered
open-end investment companies; and ACM Government Income Fund,
Inc., ACM Government Securities Fund, Inc., ACM Government
Spectrum Fund, Inc., ACM Government Opportunity Fund, Inc., ACM
Managed Dollar Income Fund, Inc., ACM Managed Income Fund, Inc.,
ACM Municipal Securities Income Fund, Inc., Alliance Global
Environment Fund, Inc., Alliance World Dollar Government Fund,
Inc., Alliance World Dollar Government Fund II, Inc., The Austria
Fund, Inc., The Global Privatization Fund, Inc., The Korean
Investment Fund, Inc., The Southern Africa Fund, Inc. and The
Spain Fund, Inc., all registered closed-end investment companies.

Consultant

The Adviser has retained at its expense OCBC Asset
Management Limited ("OAM") as a consultant to provide to Alliance
such statistical and other factual information, research, advice
and assistance with respect to economic, financial, political,
technological and social conditions and trends in Asian

<PAGE>

countries, including information on markets and industries, as
Alliance shall from time to time request. OAM will not furnish
investment advice or make recommendations regarding the purchase
and sale of securities by the Fund nor will it be responsible for
making investment decisions involving Fund Assets.

OAM is one of the largest Singapore-based investment
management companies specializing in investment in Asia-Pacific
markets. OAM provides consulting and advisory services to
institutions and individuals, including mutual funds. As of
June 30, 1994, OAM had approximately S1 billion in assets under
management.

OAM is a wholly-owned subsidiary of Oversea-Chinese
Banking Corporation Limited ("OCBC Bank"), which is based in
Singapore. The OCBC Bank Group has an extensive network of
banking offices in the Asia Pacific region. The OCBC Bank Group
engages in a wide variety of activities including commercial
banking, investment banking, and property and hotel investment
and management. OCBC Bank is the third largest company listed on
the Stock Exchange of Singapore with a market capitalization as
of June 30, 1994 of $6.3 billion.

Administrator

Alliance Capital Management L.P. has been retained under
an administration agreement (the "Administration Agreement") to
perform administrative services necessary for the operation of
the Fund (in such capacity, the "Administrator").

Pursuant to the Administration Agreement and in
consideration of its administrative fee, the Administrator will
perform or arrange for the performance of the following services
(i) prepare and assemble reports required to be sent to Fund
shareholders and arrange for the printing and dissemination of
such reports to shareholders; (ii) assemble reports required to
be filed with the Securities and Exchange Commission and file
such completed reports with the Securities and Exchange
Commission; (iii) arrange for the dissemination to shareholders
of the Fund's proxy materials and oversee the tabulation of
proxies by the Fund's transfer agent; (iv) negotiate the terms
and conditions under which custodian services will be provided to
the Fund and the fees to be paid by the Fund to its custodian in
connection therewith; (v) negotiate the terms and conditions
under which dividend disbursing services will be provided to the
Fund, and the fees to be paid by the Fund in connection
therewith; review the provision of dividend disbursing services
to the Fund; (vi) calculate, or arrange for the calculation of,
the net asset value of the Fund's shares; (vii) determine the
amounts available for distribution as dividends and distributions
to be paid by the Fund to its shareholders; prepare and arrange

<PAGE>

for the printing of dividend notices to shareholders; and provide
the Fund's dividend disbursing agent and custodian with such
information as is required for it to effect the payment of
dividends and distributions and to implement the Fund's dividend
reinvestment plan; (viii) assist in providing to the Fund's
independent accountants such information as is necessary for such
accountants to prepare and file the Fund's federal income and
excise tax returns and the Fund's state and local tax returns;
(ix) monitor compliance of the Fund's operations with the 1940
Act and with its investment policies and limitations as currently
in effect; (x) provide accounting and bookkeeping services
(including the maintenance of such accounts, books and records of
the Fund as may be required by Section 31(a) of the 1940 Act and
the rules and regulations thereunder); and (xi) make such reports
and recommendations to the Board as the Board reasonably requests
or deems appropriate.

For the services rendered to the Fund and related
expenses borne by the Administrator, the Fund will pay the
Administrator a monthly fee at the annual rate of .15 of 1% of
the Fund's average daily net assets.

________________________________________________________________

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 Fund directly or indirectly to pay
expenses associated with distribution of its 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 adopted by the Commission under the Act (the "Plan").

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
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, in the case of Class C shares, without
the assessment of a contingent deferred 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 the distribution services fee on the Class C shares,
are the same as those of the initial sales charge (or contingent

<PAGE>

deferred sales charge, when applicable) and distribution services
fee with respect to the Class A shares in that in each case the
sales charge and/or distribution services fee provide for the
financing of the distribution of the Fund's shares.

Under the Agreement, the Treasurer of the Fund reports
the amounts expended under the Rule 12b-1 Plan and the purposes
for which such expenditures were made to the Directors of the
Fund on a quarterly basis. Also, the Agreement provides that the
selection and nomination of Directors who are not "interested
persons" of the Fund, as defined in the 1940 Act, are committed
to the discretion of such disinterested Directors then in office.
The Agreement was initially approved by the Directors of the Fund
at a meeting held on October 20, 1994, and by the Fund's initial
shareholder on October 20, 1994.

The Agreement became effective on October 21, 1994. The
Agreement will continue in effect until June 30, 1995 and
thereafter for successive twelve-month periods (computed from
each July 1), 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 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.

In the event that the Agreement is terminated or not
continued with respect to the Class A shares, Class B shares or
Class C 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.

All material amendments to the Agreement must be
approved by a vote of the Directors or the holders of the Fund's
outstanding voting securities, voting separately by class, and in

<PAGE>

either case, by a majority of the disinterested Directors, cast
in person at a meeting called for the purpose of voting on such
approval; and the Agreement may not be amended in order to
increase materially the costs that a particular class may bear
pursuant to the Agreement without the approval of a majority of
the holders of the outstanding voting shares of the class
affected. The Agreement may be terminated (a) by the Fund
without penalty at any time by a majority vote of the holders of
the outstanding voting securities of the Fund, voting separately
by class or by a majority vote of the Directors who are not
"interested persons" as defined in the 1940 Act, or (b) by the
Principal Underwriter. To terminate the Agreement, any party
must give the other parties 60 days' written notice; to terminate
the Rule 12b-1 Plan only, the Fund need give no notice to the
Principal Underwriter. The Agreement will terminate
automatically in the event of its assignment.

Transfer Agency Agreement

Alliance Fund Services, Inc., an indirect wholly-owned
subsidiary of the Adviser, receives a transfer agency fee per
account holder of each of the Class A shares, Class B shares and
Class C shares of the Fund, plus reimbursement for out-of-pocket
expenses. The transfer agency fee with respect to the Class B
shares is higher than the transfer agency fee with respect to the
Class A shares reflecting the additional costs associated with
the Class B contingent deferred sales charge.

________________________________________________________________

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 (the "initial sales charge
alternative"), with a contingent deferred sales charge (the
"deferred sales charge alternative"), or without any initial or
contingent deferred sales charge (the "asset-based sales charge
alternative"), as described below. Shares of the Fund are
offered on a continuous basis 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

<PAGE>

affiliates, that have entered into selected agent agreements with
the Principal Underwriter ("selected agents"), or (iii) the
Principal Underwriter. The minimum for initial investments is
$250; subsequent investments (other than reinvestments of
dividends and capital gains distributions in shares) must be in
the minimum amount of $50. As described under "Shareholder
Services," the Fund offers an automatic investment program and a
403(b)(7) retirement plan which permit investments of S25 or
more. The subscriber may use the Subscription Application found
in the Prospectus for his or her initial investment. Sales
personnel of selected dealers and agents distributing the Fund's
shares may receive differing compensation for selling Class A,
Class B or Class C shares.

Investors may purchase shares of the Fund in the United
States either through selected dealers or agents or directly
through the Principal Underwriter. Shares may also be sold in
foreign countries where permissible. 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 most purchases of Class A
shares, a sales charge which will vary depending on the purchase
alternative chosen by the investor and the amount of the
purchase, as shown in the table below. 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 in accordance with the Fund's
Articles of Incorporation and By-Laws as of the next close of
regular trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m. New York time) by dividing the value of the
Fund's total assets, less its liabilities, by the total number of
its shares then outstanding. The respective per share net asset
values of the Class A, Class B and Class C 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
shares as a result of the daily expense accruals of the
distribution and transfer agency fees applicable with respect to
the Class B and Class C shares. Even under those circumstances,
the per share net asset values of the three 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. A Fund business day is
any weekday, exclusive of national holidays on which the Exchange
is closed and Good Friday. For purposes of this computation,
Exchange-listed securities and over-the-counter securities
admitted to trading on the NASDAQ National List are valued at the

<PAGE>

last quoted sale or, if no sale, at the mean of closing bid and
asked prices and portfolio bonds are presently valued by a
recognized pricing service. If accurate quotations are not
available, securities will be valued at fair value determined in
good faith by the Board of Directors.

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 or agents, the applicable public offering price
will be the net asset value as so determined, but only if the
selected dealer or agent receives the order prior to the close of
regular trading on the Exchange and transmits it to the Principal
Underwriter prior to its close of business that same day
(normally 5:00 p.m. New York time). The selected dealer or agent
is responsible for transmitting such orders by 5:00 p.m. If the
selected dealer or agent fails to do so, the investor's right to
that day's closing price must be settled between the investor and
the selected dealer or agent. If the selected dealer or agent
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.
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. New York
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.
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

<PAGE>

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 bonuses or other incentives to dealers or
agents, including Equico Securities, Inc., an affiliate of the
Principal Underwriter, 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,
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 by
persons associated with a dealer or agent and their immediate
family members to urban or resort locations within or outside the
United States. Such dealer or agent may elect to receive cash
incentives of equivalent amount in lieu of such payments.

Alternative Purchases Arrangements

The Fund issues three classes of shares: 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. The
three classes of 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 shares bear
the expense of the contingent deferred sales charge, (ii) Class B
shares and Class C shares each bear the expense of a higher
distribution services fee and, in the case of Class B shares
higher transfer agency costs, (iii) each class has exclusive
voting rights with respect to provisions of the Rule 12b-1 Plan
pursuant to which its distribution services fee is paid which
relates to a specific class and other matters for which separate
class voting is appropriate under applicable law, provided that,
if the Fund submits to a vote of both the Class A shareholders
and the Class B 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, the Class A shareholders and
the Class B shareholders will vote separately by Class, and

<PAGE>

(iv) only the Class B shares are subject to a conversion feature.
Each class has different exchange privileges and certain
different shareholder service options available.

The 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 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) for more than $250,000 for Class B 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 t5,000,000 for Class C shares.

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, most 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,
in the case of Class B shares, being subject to a contingent
deferred sales charge for a four-year period. For example, based
on current fees and expenses, an investor subject to the 4.25%
initial sales charge would have to hold his or her investment
approximately seven years for the Class C distribution services

<PAGE>

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.

The Directors of the Fund have determined that currently
no conflict of interest exists between or among the Class A,
Class B and Class C shares. On an ongoing basis, the Directors
of the Fund, pursuant to their fiduciary duties under the 1940
Act and state laws, will seek to ensure that no such conflict
arises.

Initial Sales Charge Alternative--Class A Shares

The public offering price of Class A shares for
purchasers choosing the initial sales charge alternative is the
net asset value plus a sales charge, as set forth below.

<PAGE>

Sales Discount or
Sales Charge Commission
Charge As % of to Dealers
As % of the or Agents
Net Public As % of
Amount of Amount Offering Offering
Purchase Invested Price 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 "Deferred Sales
Charge Alternative--Class B Shares." Proceeds from the contingent
deferred sales charge on Class A shares are paid to the Principal
Underwriter and are used by 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 or agents for selling Class A
Shares. With respect to purchases of $1,000,000 or more made
through selected dealers or agents, the Manager may, pursuant to
the 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.

Shares issued pursuant to the automatic reinvestment of
income dividends or capital gains distributions are not subject
to any sales charges. The Fund receives the entire net asset

<PAGE>

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. The Principal Underwriter may, however, 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 Securities Act of 1933, as amended.

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
$50,000 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 at April 30, 1995.

Net Asset Value per Class A Share at $10.24
April 30, 1994
Class A Per Share Sales Charge
- 4.25% of offering price 4.39 of
net asset value per share) .45
______
Class A Per Share Offering Price to
the public $10.69
======

An investor choosing the initial sales charge
alternative may under certain circumstances be entitled to pay a
reduced initial sales charge or no initial sales charge but
subject in most cases to a contingent deferred sales charge. The
circumstances under which an investor may pay a reduced initial
sales charge or no 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

<PAGE>

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
The Alliance Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
-Corporate Bond Portfolio
-U.S. Government Portfolio
Alliance Counterpoint Fund
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, 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.

<PAGE>

Alliance Quasar Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Portfolios
-The Alliance Growth Fund
-The Alliance Conservative Investors Fund
-The Alliance Growth Investors Fund
-The Alliance Strategic Balanced Fund
-The 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
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 Class A, Class B and
Class C 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 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.

<PAGE>

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 and/or
Class C 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
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 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 sales charge will
be used to purchase additional shares of the Fund subject to the
rate of sales charge applicable to the actual amount of the
aggregate purchases.

<PAGE>

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
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 Class A shareholder who has
caused any or all of his or her 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 such reinvestment
is made within 30 calendar days after the redemption or
repurchase date. 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 tax purposes except
that no loss will be recognized to the extent that the proceeds
are reinvested in shares of the Fund. The reinstatement
privilege may be used by the shareholder only once, irrespective
of the number of shares redeemed or repurchased, except that the
privilege may be used without limit in connection with
transactions whose sole purpose is to transfer a shareholder's
interest in the Fund to his or her individual retirement account
or other qualified retirement plan account. 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.

<PAGE>

Sales at Net Asset Value

The Fund may sell its Class A shares at net asset value,
(i.e., without an 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; officers, directors and present or retired
full-time employees 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
descendent (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) certain employee benefit plans for employees of the
Adviser, the Principal Underwriter, Alliance Fund
Services, Inc. and their affiliates;

(iv) in exchange for securities valued in the same
manner as securities held by the Fund; and

(v) persons participating in a fee-based program,
sponsored and maintained by a registered broker-
dealer and approved by the Principal Underwriter,
pursuant-to which such persons pay an asset-based
fee to such broker-dealer, or its affiliate or
agent, for service in the nature of investment
advisory or administrative services.

Deferred Sales Charge Alternative--Class B Shares

Investors choosing the deferred sales charge alternative
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

<PAGE>

charge so that the Fund will receive the full amount of the
investor's purchase payment.

Proceeds from the contingent deferred sales charge on
the Class B 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 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 which
are redeemed within four years of purchase will be subject to a
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
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).

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.

<PAGE>

Contingent Deferred Sales Charge as a %
Years Since Purchase of Dollar Amount Subject to Charge
____________________ _______________________________________

Less than one 4.00%
One 3 00%
Two 2.00%
Three 1.00%
Four or more None

In determining the contingent deferred sales charge
applicable to a redemption, it will be assumed, in the case of
Class B shares purchased on or after November 19, 1993, that the
redemption is first of any shares in the shareholder's Fund
account that are not subject to a contingent deferred sales
charge, second of Class B shares held for over three years and
third of Class A shares held shortest during the one year period
during which such shares are subject to the sales charge. When
Class B shares acquired in an exchange are redeemed, the
applicable contingent deferred sales charge and conversion
schedules will be the schedules that applied to Class B shares of
the Alliance Mutual Fund originally purchased by the shareholder
at the time of their purchase.

The contingent deferred sales charges on Class A and
Class B shares are waived on redemptions of shares (i) following
the death or disability, as 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 or (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.

Conversion Feature. At the end of the period ending
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 be 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.

<PAGE>

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 (i) the assessment of the higher distribution
services fee and transfer agency costs with respect to Class B
shares does not result in the Fund's dividends or distributions
constituting "preferential dividends" under the Code, and (ii)
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.

Asset-Based Sales Charge Alternative--Class C Shares

Investors choosing the asset-based sales charge
alternative 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 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 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.
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.

<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."

Redemption

Subject only to the limitations described below, the
Fund's Articles of Incorporation require that the Fund redeem 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 shares or Class B 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.

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
permits for the protection of security holders of the Fund.

Payment of the redemption price may be made either in
cash or in portfolio securities (selected in the discretion of
the Directors of the Fund and taken at their value used in
determining the redemption price), or partly in cash and partly
in portfolio securities. However, payments will be made wholly
in cash unless the Directors believe that economic conditions
exist which would make such a practice detrimental to the best
interests of the Fund. The Fund has filed a formal election with
the Commission pursuant to which the Fund will only effect a
redemption in portfolio securities where the particular
shareholder of record is redeeming more than $250,000 or 1% of
the Fund's total net assets, whichever is less, during any 90-day
period. In the opinion of the Fund's management, however, the
amount of a redemption request would have to be significantly
greater than $250,000 or 1% of total net assets before a

<PAGE>

redemption wholly or partly in portfolio securities would be
made. If payment for shares redeemed is made wholly or partly in
portfolio securities, brokerage costs may be incurred by the
investor in converting the securities to 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
portfolio securities at the time of such redemption or
repurchase. Redemption proceeds on Class B shares will reflect
the deduction of the contingent deferred sales charge, if any.
Payment (either in cash or in portfolio securities) received by a
shareholder upon redemption or repurchase of his or her shares,
assuming the shares constitute capital assets in his, 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 stock
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 Securities Exchange Act of
1934, as amended.

Telephone Redemption By Electronic Funds Transfer.
Requests for redemption of shares for which no stock certificates
have been issued can also be made 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 must be for
at least $500 and may not exceed $100,000, and must be made
between 9:00 a.m. and 4:00 p.m. New York 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. Except as noted below,
each Fund shareholder is eligible to request redemption, once in
any 30-day period, of Fund shares by telephone at (800) 221-5672
before 4:00 p.m. New York time on a Fund business day in an
amount not exceeding $25,000. Proceeds of such redemptions are
remitted by check to the shareholder's address of record.
Telephone redemption by check is not available with respect to
shares (i) for which certificates have been issued, (ii) held in
nominee or "street name" accounts, (iii) purchased within 15
calendar days prior to the redemption request, (iv) held by a
shareholder who has changed his or her address of record within

<PAGE>

the preceding 30 calendar days or (v) held in any retirement plan
account. 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.

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
Alliance Fund Services, Inc. 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. 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.

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.

Repurchase

The Fund may repurchase shares through the Principal
Underwriter or selected dealers or agents. The repurchase price
will be the net asset value next determined after the Principal

<PAGE>

Underwriter receives the request (less the contingent deferred
sales charge, if any, with respect to the Class A shares and
Class B 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. New York time). The
selected dealer or agent is responsible for transmitting the
request to the Principal Underwriter by 5:00 p.m. If the
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 shares and Class B
shares). Normally, if shares of the Fund are offered through a
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 at least 60 days
after at least 30 days' written notice to the shareholder
subsequent to such period. 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 all three classes of shares of the Fund.

<PAGE>

Automatic Investment Program

Investors may purchase shares of the Fund through an
automatic investment program utilizing "pre-authorized check"
drafts 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. Drafts may be
made in paper form or, if the investor's bank is a member of the
NACHA, in electronic form. If made in paper form, the draft is
normally made on the 20th day of each month, or the next business
day thereafter. If made 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

Class A shareholders of the Fund can exchange their
Class A shares for Class A shares of any other Alliance Mutual
Fund that offers Class A shares and for shares of Alliance World
Income Trust, Inc. without the payment of any sales or service
charges. For purposes of applying any applicable contingent
deferred sales charge upon the newly acquired Class A shares, the
period of time the Class A shares surrendered in the exchange
have been held is added to the period of time the newly acquired
shares have been held. Prospectuses for each Alliance Mutual
Fund may be obtained by contacting Alliance Fund Services, Inc.
at the address shown on the cover of this Statement of Additional
Information or by telephone at (800) 227-4618 or, in Illinois,
(800) 227-4170.

Class B shareholders of the Fund can exchange their
Class B shares ("original Class B shares") for Class B shares of
any other Alliance Mutual Fund that offers Class B shares ("new
Class B shares") without the payment of any contingent deferred
sales or service charges. For purposes of computing both the
time remaining before the new Class B shares convert to Class A
shares of that fund and the contingent deferred sales charge
payable upon disposition of the new Class B shares, the period of
time for which the original Class B shares have been held is
added to the period of time for which the new Class B shares have
been held, and the original fund's contingent deferred sales
charge schedule is applied.

<PAGE>

Class C shareholders of the Fund can exchange their
Class C shares for Class C shares of any other Alliance Mutual
Fund that offers Class C shares.

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 or agent, 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
between 9:00 a.m. and 4:00 p.m., New York time, on a Fund
business day as defined above. Telephone requests for exchange
received before 4:00 p.m. New York 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 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.

<PAGE>

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 Fund
business day prior thereto.

Neither the Alliance Funds nor 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 or agents
may charge a commission for handling telephone requests for
exchanges.

The exchange privilege is available only in states where
shares of the Alliance Mutual Funds 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 "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,
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

<PAGE>

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.

If the aggregate net asset value of shares of the
Alliance Mutual Funds held by the qualified plan reaches $5
million on or before December 15 in any year, all Class B 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 such 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 The Equitable Life Assurance Society of the United
States, 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
procedures. For additional information please contact Alliance
Fund Services, Inc.

<PAGE>

Dividend Direction Plan

A shareholder who already maintains, in addition to his
or her Class A, Class B or Class C Fund account, a Class A, Class
B or Class C account with one or more other Alliance Mutual Funds
may direct that income dividends and/or capital gains paid on his
or her Class A, Class B or Class C 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
"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

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 withdrawal payments will be subject
to any taxes applicable to redemptions. 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 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

<PAGE>

occasional lump-sum investment may be made by a shareholder 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.

For Class A shareholders, Class B shareholders that
purchased their Class B shares under a retirement plan and
Class C shareholders, 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 "Literature" telephone number shown on the
cover of this Statement of Additional Information.

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 auditors, Ernst & Young LLP, as
well as a confirmation of each purchase and redemption. By
contacting his or her broker or Alliance Fund Services, Inc., a
shareholder can arrange for copies of his or her account
statements to be sent to another person.

________________________________________________________________

NET ASSET VALUE
________________________________________________________________

Shares of the Fund will be priced at the net asset value
per share next determined after receipt of a purchase or
redemption order. The net asset value per share is computed in
accordance with the Fund's Articles of Incorporation and By-Laws
as of the next close of regular trading on the Exchange following
receipt of a purchase order or tender of a redemption order on
each Fund business day on which such an order is received and
trading in the types of securities in which the Fund invests
might materially affect the value of the Fund's shares and on
such other days as the Directors of the Fund deems necessary in
order to comply with Rule 22c-1 under the 1940 Act. The net
asset value per share is calculated by adding the market value of
all securities in the Fund's portfolio and other assets,
subtracting liabilities incurred or accrued and dividing by the
total number of the Fund's shares then outstanding.

<PAGE>

For purposes of this computation, readily marketable
portfolio securities listed on the Exchange are valued, except as
indicated below, at the last sale price reflected on the
consolidated tape at the close of the Exchange 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
by such method as the Directors of the Fund shall determine in
good faith to reflect its fair market value. Readily marketable
securities including options, not listed on the Exchange but
listed on other national securities exchanges or admitted to
trading on the National Association of Securities Dealers
Automatic Quotations, Inc. ("NASDAQ") National List ("List") are
valued in like manner. Portfolio securities traded on more than
one national securities exchange are valued at the last sale
price on the business day as of which such value is being
determined as reflected on the tape at the close of the exchange
representing the principal market for such securities. Stock
index futures contracts will be valued in a like manner, except
that open futures contracts sales will be valued using the
closing settlement price or, in the absence of such a price, the
most recent quoted asked price.

Readily marketable securities including options, traded
only in the over-the-counter market, including listed securities
whose primary market is believed by the Adviser to be over-the-
counter but excluding those admitted to trading on the List, 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 such other comparable
sources as the Directors of the Fund deem appropriate to reflect
their fair market value. United States Government obligations
and other debt instruments having sixty days or less remaining
until maturity are stated at amortized cost which approximates
market value. All other assets of the Fund, including restricted
and not readily marketable securities, are valued in such manner
as the Directors of the Fund in good faith deem appropriate to
reflect their fair market value.

The assets belonging to the Class A shares, Class B and
the Class C shares will be invested together in a single
portfolio. The net asset value of each class will be determined
separately by subtracting the accrued expenses and liabilities
allocated to that class from the assets belonging to that class
pursuant to an order issued by the Securities and Exchange
Commission.

<PAGE>

________________________________________________________________

DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________

United States Federal Income Taxation
Of Dividends and Distributions

General. The Fund intends to qualify and elect to be
treated as a "regulated investment company" under sections 851
through 855 of 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) derive less than
30% of its gross income in each taxable year from the sale or
other disposition within three months of their acquisition by the
Fund of stocks, securities, options, futures or forward contracts
and foreign currencies (or options, futures or forward contracts
on foreign currencies) that are not directly related to the
Fund's principal business of investing in stock or securities (or
options and futures with respect to stocks or securities); and
(iii) 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). These requirements, among other things, may limit
the Fund's ability to write and purchase options, futures and
forward foreign currency contracts.

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 intends to also avoid the 4% federal excise tax
that would otherwise apply to certain undistributed income for a

<PAGE>

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
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 excess of net long-term capital gains over the net
short-term capital losses realized and distributed by the Fund to
its shareholders will be taxable to the shareholders as long-term
capital gains, irrespective of the length of time a shareholder
may have held his Fund shares. 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.

<PAGE>

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.

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. However, if a shareholder has held shares
in the Fund for six months or less and during that period has
received a distribution taxable to the shareholder as a long-term
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 dividend. 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

<PAGE>

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
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
availability to fully deduct their pro rata share of the foreign
taxes paid by the Fund. 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 United States
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." The
Treasury has issued proposed regulations which would provide a
"marked to market" election solely with respect to gain inherent
in PFIC stock held by a regulated investment company, such as the
Fund, which does not elect to treat the PFIC as a "qualified
electing fund." If the proposed regulations are adopted in final
form and the election provided therein were to be made by the
Fund, the Fund would recognize a gain as of the last business day
of its taxable year equal to the excess of the fair market value
of each share of stock in the PFIC over the Fund's adjusted tax
basis in that share. This gain, which would be treated as
derived from securities held by the Fund for at least three
months, generally would not be subject to the deferred tax and
interest charge amounts to which it might otherwise be subject,
as discussed above, in the event of an "excess distribution" or
gain with regard to shares of a PFIC. 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
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

<PAGE>

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
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

<PAGE>

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 swaps, 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
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

<PAGE>

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

As noted above, 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
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

<PAGE>

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 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, an
affiliate of the Adviser, and with brokers which may have their
transactions cleared or settled, or both, by the Pershing
Division of Donaldson, Lufkin & Jenrette Securities Corporation,
for which Donaldson, Lufkin & Jenrette Securities Corporation 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 Donaldson, Lufkin &
Jenrette Securities Corporation 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

<PAGE>

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.

________________________________________________________________

GENERAL INFORMATION
________________________________________________________________

Capitalization

The authorized capital stock of the Fund currently
consists of 3,000,000,000 shares of Class A Common Stock,
3,000,000,000 shares of Class B Common Stock, 3,000,000,000
shares of Class C Common Stock and 3,000,000,000 shares of Class
Y Common Stock, each having a par value of $.001 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 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 Investment Advisory Contract 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.

An order has been received from the Securities and
Exchange Commission permitting the issuance and sale of the Class
A, Class B, Class C and Class Y shares representing interests in
the Fund.

<PAGE>

The outstanding voting shares of the Fund as of January
12, 1995 consisted of 316,811 shares of common stock. Of this
amount 106,258 shares were Class A, 197,056 shares were Class B
and 13,497 were Class C. Set forth below is certain information
as to all persons who owned of record or beneficially 5% or more
of either class of the Fund's outstanding shares at January 12,
1995.

Name and Address No. of % of % of % of
Shares Class A Class B Class C
_______ ________ _______ _______

Merrill Lynch
4800 Deer Lake Dr East
Jacksonville, FL 32246 27,124 25
78,688 40

Alliance Capital Mgmt. 10,000 9
1345 Avenue of the Americas
New York, NY 10105

Rauscher Pierce Refsnes 9,834 9
FBO John P. Thompson IRA
2711 W Haskell
Dallas, TX 75204

Alliance Plans Div/FTC 2,965 22
C/F Sarah J. Sonnette IRA
5585 East Evergreen Blvd.
Apt. 5203
Vancouver, WA 98661

Yo-Sung Cho 4,439 33
58 Crescent Place
Short Hills, NJ 07078

Jonathan Francis 956 7
ADA Gonzalez-Francis JTWROS
330 Central Park Avenue
Apt. 9F
Scarsdale, NY 10583

Resources Trust Co. 1,053 8
C/F Raymond C Loemr DRP
PO Box 5900
Denver, CO 80217

<PAGE>

Custodian

Brown Brothers Harriman & Co. ("Brown Brothers"), 40
Wall Street, Boston, Massachusetts, will act as the Fund's
custodian. The Fund's securities and cash are held under a
custodian agreement by Brown Brothers. Rules adopted under the
1940 Act permit the Fund to maintain its securities and cash in
the custody of certain eligible banks and securities
depositories. Pursuant to those rules, the Fund's portfolio of
securities and cash, when invested in securities of foreign
countries, will be held by its subcustodians, subject to approval
by the Board of Directors of the Fund as and when appropriate in
accordance with the rules of the Securities and Exchange
Commission. Selection of the subcustodians will be made by the
Board of Directors of the Fund following a consideration of a
number of factors, including, but not limited to, the reliability
and financial stability of the institution, the ability of the
institution to capably perform custodial services of the Fund,
the reputation of the institution in its national market, the
political and economic stability of the countries in which the
subcustodians will be located, and risks of potential
nationalization or exportation of Fund assets. In addition, the
1940 Act requires that foreign bank subcustodians, among other
things, have shareholder equity in excess of $200,000,000, have
no lien on the Fund's asset and maintain adequate and accessible
records.

Principal Underwriter

Alliance Fund Distributors, Inc., 1345 Avenue of the
Americas, New York, New York 10105, serves as the Fund's
Principal Underwriter, and as such may solicit orders from the
public to purchase shares of the Fund. Alliance Fund
Distributors, Inc. is not obligated to sell any specific amount
of shares and will purchase shares for resale only against orders
for shares. Under the Agreement between the Fund and the
Principal Underwriter, 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 Securities Act of 1933, as
amended.

Counsel

Legal matters in connection with the issuance of the
shares offered hereby are passed upon by Messrs. Seward & Kissel,
One Battery Park Plaza, New York, New York 10004. Seward &
Kissel has relied upon the opinion of Venable, Baetjer and
Howard, Baltimore Maryland, for matters relating to Maryland law.

<PAGE>

Independent Auditors

Ernst & Young LLP, 787 Seventh Avenue, New York, New
York, has been appointed as independent auditors for the Fund.

Total Return Quotations

From time to time the Fund advertises its "total
return." Computed separately for each class, the Fund's "total
return" is its average annual compounded total return for recent
one, five, and ten-year periods (or the period since the Fund's
inception). The Fund's total return for such a period is
computed by finding, through the use of a formula prescribed by
the Securities and Exchange Commission, the average annual
compounded rate of return over the period that would equate an
assumed initial amount invested to the value of such investment
at the end of the period. For purposes of computing total
return, income dividends and capital gains distributions paid on
shares of the Fund are assumed to have been reinvested when paid
and the maximum sales charge applicable to purchases of Fund
shares is assumed to have been paid. The Fund will include
performance data for Class A and Class B shares in any
advertisement or information including performance data of the
Fund.

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 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 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

<PAGE>

Additional Information does not contain all the information set
forth in the Registration Statement filed by the Fund with the
Securities and Exchange Commission under the Securities Act of
1933. Copies of the Registration Statement may be obtained at a
reasonable charge from the Securities and Exchange Commission or
may be examined, without charge, at the offices of the Securities
and Exchange Commission in Washington, D.C.

80
00250157.AU2

<PAGE>

PORTFOLIO OF INVESTMENTS Alliance All-Asia Investment Fund
April 30, 1995 (unaudited)

Company Shares U.S. $ Value
- ----------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-86.0%
AUSTRALIA-2.4%
Boral, Ltd. 24,539 $ 62,291
Renison Goldfields
Consolidated, Ltd. 18,000 62,188
rights expiring 5/24/95* 4,176 -0-
124,479

HONG KONG-18.1%
Cheung Kong
Holdings, Ltd. 19,000 80,261
Citic Pacific, Ltd. 30,000 74,021
Dao Heng Bank Group, Ltd. 10,000 25,578
Hong Kong & China Gas Co., Ltd. 60,000 87,198
Hong Kong & Shanghai Hotels 18,500 22,465
Hopewell Holdings 100,000 71,050
Jardine International Motor
Holdings, Ltd. 8,000 8,164
New World Development Co., Ltd. 30,000 77,897
Orient Telecom & Technology
Holdings, Ltd.* 237,000 76,541
Peregrine Investment
Holdings, Ltd. 60,000 63,170
Shun Tak Holdings, Ltd. 70,000 42,275
Sun Hung Kai Properties, Ltd. 16,000 102,106
Swire Pacific, Ltd. Cl.A 6,000 40,111
Television Broadcasts, Ltd. 24,000 89,136
Yizheng Chemical
Fibre Co., Ltd. 200,000 65,883
925,856

INDIA-4.0%
Bajaj Auto, Ltd. (GDR) 6,000 $152,280
Hindalco Industries, Ltd. (GDR)(a) 2,000 52,000
204,280

INDONESIA-5.7%
PT Astra International 19,000 24,250
PT Indosat 20,000 72,100
PT HM Sampoerna 28,000 164,263
PT Indo-Rama Synthetics 10,500 32,210
292,823

JAPAN-25.7%
Asahi Bank, Ltd. 2,000 25,701
Bank of Tokyo, Ltd. 1,000 18,086
Canon, Inc. 2,000 33,078
Chiba Bank 1,000 10,114
DDI Corp. 4 35,219
Dai-Ichi Kangyo Bank 4,000 81,861
Dai Nippon Printing Co., Ltd. 1,000 16,777
Daiwa Securities Co., Ltd. 1,000 12,612
Fuji Photo Film Co. 3,000 73,532
Heiwa Corp. 3,000 79,243
Hitachi, Ltd. 2,000 20,346
House Food Industry Corp. 1,000 20,227
Kao Corp. 2,000 24,273
Kirin Brewery Co., Ltd. 1,000 11,875
Kuraray Co., Ltd. 4,000 47,546
Matsushita Electric Industrial Co. 3,000 50,330
Matsushita Electric Works 2,000 24,035
Mitsubishi Heavy Industries, Ltd. 2,000 14,516
Mitsui Marine & Fire Insurance Co. 7,000 53,055

PORTFOLIO OF INVESTMENTS (continued) Alliance All-Asia Investment Fund

Company Shares U.S. $ Value
- ----------------------------------------------------------------------
Mitsui Trust & Banking Co., Ltd. 5,000 $ 56,041
National House Industrial 1,000 20,465
Nikko Securities Co., Ltd. 2,000 19,609
Nintendo Corp., Ltd. 1,200 76,959
Nippon Paper Industries Co. 1,000 7,770
Nippon Telegraph & Telephone Corp. 3 26,522
Nippon Express Co., Ltd. 1,000 9,888
Nippon Steel Corp. 4,000 15,896
Nippon Electric Glass Co., Ltd. 1,000 17,729
Nomura Securities Co., Ltd. 3,000 60,682
NTN Corp. 2,000 13,231
Osaka Gas Co. 5,000 20,525
Rohm Co. 1,000 46,285
Sanyo Electric Co., Ltd. 2,000 11,280
Sumitomo Bank, Ltd. 3,000 64,965
Takara Shuzo Co. 1,000 8,174
Takeda Chemical Industries 1,000 13,326
Tokyo Electric Power Co., Ltd. 1,000 32,007
Tokyo Gas Co., Ltd. 8,000 36,552
Tostem Corp. 1,000 36,290
Toyota Motor Corp. 2,000 40,692
UBE Industries, Ltd. 1,000 4,117
Yamanouchi Pharmaceutical Co.,Ltd. 1,000 22,488
1,313,919

MALAYSIA-10.2%
Aokam Perdana Berhad 10,000 $ 44,912
AMMB Holdings Berhad 11,000 108,598
Lion Land Berhad 60,000 69,188
Malaysian International Shipping Berhad30,000 77,686
Perusahaan Otomobil Nasional Berhad 20,000 67,975
Resorts World Berhad 16,000 84,158
YTL Corp. Berhad 15,000 67,975
520,492

PHILIPPINES-4.5%
International Container
Terminal Services, Inc.* 131,250 73,057
Manila Electric Company Series B 15,000 159,789
232,846

SINGAPORE-8.4%
Fraser & Neave, Ltd. 5,000 54,898
Oversea-Chinese Banking Corp., Ltd. 5,000 54,538
Overseas Union Bank, Ltd. 14,000 80,875
Singapore Airlines, Ltd. 14,000 134,625
Singapore Press Holdings 6,000 103,337
428,273

SOUTH KOREA-1.5%
Korea Mobile Telecom (GDS) 2,700 77,976

Alliance All-Asia Investment Fund

Company Shares U.S. $ Value
- ----------------------------------------------------------------------
THAILAND-5.5%
Bangkok Bank Co., Ltd. 10,000 $ 96,768
Bank of Ayudhya, Ltd. 20,000 89,448
Thai Airways International, Ltd. 42,000 96,483
282,699

Total Common Stocks & Other Investments
(cost $4,341,688) 4,403,643

TIME DEPOSIT-19.5%
BNP
5.95%, 5/01/95
(cost $1,000,000) US $1,000 $1,000,000

TOTAL INVESTMENTS-105.5%
(cost $5,341,688) 5,403,643
Other assets less liabilities-(5.5%) (282,851)
NET ASSETS-100% $5,120,792

* Non-income producing security.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At April 30, 1995 this security
amounted to $52,000 or 1.0% of net assets.
Glossary of Terms:
GDR-Global depository receipt
GDS-Global depository security
See notes to financial statements.

STATEMENT OF ASSETS AND LIABILITIES Alliance All-Asia Investment Fund
April 30, 1995 (unaudited)]

ASSETS
Investments in securities, at value (cost $5,341,688) $5,403,643
Cash, at value (cost $382,749) 382,401
Receivable for investment securities sold 1,290,672
Receivable from investment advisor 180,530
Deferred organization expense 174,261
Receivable for capital stock sold 48,349
Dividends and interest receivable 14,856
Total assets 7,494,712
LIABILITIES
Payable for investment securities purchased 2,276,122
Advisory fee payable 15,721
Payable for capital stock redeemed 3,123
Distribution fee payable 2,915
Accrued expenses 76,039
Total liabilities 2,373,920
NET ASSETS $5,120,792
COMPOSITION OF NET ASSETS
Capital stock, at par $5,005
Additional paid-in capital 5,023,552
Undistributed net investment income 47,184
Accumulated net realized loss on investments and foreign
currency transactions (18,904)
Net unrealized appreciation of investments and foreign currency
denominated assets and liabilities 63,955
$5,120,792
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share ($1,916,569/187,137
shares of capital stock issued and outstanding) $10.24
Sales charge--4.25% of public offering price .45
Maximum offering price $10.69
Class B Shares
Net asset value and offering price per share ($3,018,837/295,243
shares of capital stock issued and outstanding) $10.22
Class C Shares
Net asset value, redemption and offering price per share
($185,386/18,109 shares of capital stock issued and outstanding) $10.24

* Commencement of operations.
See notes to financial statements.

STATEMENT OF OPERATIONS
November 28, 1994* to April 30, 1995 (unaudited)
Alliance All-Asia Investment Fund

INVESTMENT INCOME
Interest $ 36,697
Dividends (net of foreign taxes withheld of $855) 20,376 $ 57,073
EXPENSES
Advisory fee 15,722
Distribution fee-Class A 1,774
Distribution fee-Class B 9,291
Distribution fee-Class C 515
Custodian 40,978
Audit and legal 30,862
Registration 28,321
Transfer agency 17,226
Amortization of organization expenses 15,725
Printing 13,912
Trustees' fees 10,125
Administrative 2,358
Miscellaneous 3,258
Total expenses 190,067
Less expenses waived and assumed by
advisor (see Note B) (180,178)
Net expenses 9,889
Net investment income 47,184

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on security transactions 28,741
Net realized loss on foreign currency transaction (47,645)
Net change in unrealized appreciation of:
Investments 61,955
Foreign currency denominated assets and liabilities 2,000
Net gain on investments and foreign currency transactions 45,051
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 92,235

* Commencement of operations
See notes to financial statements.

STATEMENT OF CHANGES IN NET ASSETS
November 28, 1994* to April 30, 1995 (unaudited)
Alliance All-Asia Investment Fund

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income. $47,184
Net realized loss on investments and foreign currency transactions (18,904)
Net change in unrealized appreciation of investments and foreign
currency denominatied assets and liabilities 63,955
Net increase in net assets from operations 92,235
CAPITAL STOCK TRANSACTIONS
Net increase 4,926,557
Total increase 5,018,792
NET ASSETS
Beginning of period 102,000
End of period $5,120,792

* Commencement of operations
See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS
April 30, 1995 (unaudited) Alliance All-Asia Investment Fund

NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance All-Asia Investment Fund, Inc. (the 'Fund'), organized as a Maryland
corporation on September 21, 1994, is registered under the Investment Company
Act of 1940 as a non-diversified, open-end management investment company. The
Fund had no operations other than the sale to Alliance Capital Management L.P.
(the 'Adviser') of 10,000 shares of Class A common stock and 100 shares of
Class B and Class C shares, of common stock for the aggregate amount of
$102,000 on October 18, 1994. Class A, Class B and Class C shares commenced
operations on November 28, 1994. The Fund offers three classes of shares. Class
A shares are sold with an initial sales charge of up to 4.25%. Class B shares
are sold with a contingent deferred sales charge which declines from 4.00% to
zero depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares eight years after the end of the
calendar month of purchase. Class C shares are sold without an initial or
contingent deferred sales charge. All three classes of shares have identical
voting, dividend, liquidation and other rights, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. The following is a summary of significant accounting
policies followed by the Fund.

1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange for which market
quotations are readily available are valued at the last quoted sales price on
that exchange prior to the time when assets are valued. Securities listed or
traded on certain foreign exchanges whose operations are similar to the U.S.
over-the-counter market are valued at the price within the limits of the latest
available current bid and asked price deemed best to reflect fair value.
Securities which mature in 60 days or less are valued at amortized cost which
approximates market value. Restricted securities are valued at fair value as
determined by the Board of Directors. In determining fair value, consideration
is given to cost, operating and other financial data.

2. ORGANIZATION EXPENSES
Organization expenses of approximately $192,000 have been deferred and are
being amortized on a straight-line basis through October, 1999.

3. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.

Net realized loss on foreign currency transactions of $47,645 represents
foreign exchange gains and losses from the holding of foreign currencies,
exchange gains or losses realized between the trade and settlement dates on
security transactions, and the difference between the amounts of dividends,
interest and foreign taxes receivable recorded on the Fund's books and the U.S.
dollar equivalent of the amounts acutally received or paid. Net currency gains
and losses from valuing foreign currency denominated assets and liabilities at
period end exchange rates are reflected as a component of net unrealized
appreciation of investments and foreign currency denominated assets and
liabilities.

4. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.

5. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Security transactions are accounted for on the date securities are
purchased or sold. Security gains and losses are determined on the identified
cost basis. The Fund accretes discounts on short-term securities as adjustments
to interest income.

6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in
accordance with tax regulations, which may differ from generally accepted
accounting principles.

NOTES TO FINANCIAL STATEMENTS (continued) Alliance All-Asia Investment Fund

NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an investment advisory agreement, the Fund pays its Adviser, Alliance
Capital Management, L.P., (the 'Adviser'), a fee at an annual rate of 1% of the
Fund's average daily net assets. Such fee is accrued daily and paid monthly.
The Adviser has agreed, under the terms of the advisory agreement, to reimburse
the Fund to the extent that its aggregate expenses (exclusive of interest,
taxes, brokerage, distribution fee, extraordinary expenses and certain other
expenses) exceed the limits prescribed by any state in which the Fund's shares
are qualified for sale. The Fund believes that the most restrictive expense
ratio limitation currently imposed by any state is 2.5% of the first $30
million of its average daily net assets, 2% of the next $70 million of its
average daily net assets and 1.5% of its average daily net assets in excess of
$100 million. No such reimbursement was required for the six months ended.

The Fund compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of
the Adviser) under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The Distributor received
front-end sales charges of $1,829 from the sale of Class A shares and $475 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class B for the period ended April 30, 1995.

Brokerage commissions paid on securities transactions for the period ended
April 30, 1995, amounted to $40,400, none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp., an affiliate of the Adviser.

NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays a distribution fee to the Distributor at an annual
rate of up to .30 of 1% of the Fund's average daily net assets attributable to
Class A shares and 1% of the average daily net assets attributable to the Class
B shares. The fees are accrued daily and paid monthly. The Agreement provides
that the Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has incurred expenses in
excess of the distribution costs reimbursed by the Fund in the amount of
$349,576 and $3,891 for Class B and Class C shares respectively; such costs may
be recovered from the Fund in future periods so long as the Agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs, incurred by the Distributor, beyond the
current fiscal year for Class A shares. The Agreement also provides that the
Adviser may use its own resources to finance the distribution of the Fund's
shares.

NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
aggregated $5,333,591 and $1,020,644, respectively, for the period ended April
30, 1995. There were no purchases or sales of U.S. Government and government
agency obligations for the period ended April 30, 1995. At April 30, 1995, the
cost of securities for federal income tax purposes was the same as the cost for
financial reporting purposes.

Alliance All-Asia Investment Fund

NOTE E: CAPITAL STOCK
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C. Each class
consists of 3,000,000,000 authorized shares.

Transactions in capital stock were as follows:

SHARES AMOUNT
-------------- --------------
November 28, November 28
1994* 1994*
to to
April 30, 1995 April 30, 1995
-------------- --------------
CLASS A
Shares sold 208,281 $2,089,368
Shares redeemed (31,144) (311,012)
Net increase 177,137 $1,778,356
CLASS B
Shares sold 331,357 $3,331,911
Shares redeemed (36,214) (364,848)
Net increase 295,143 $2,967,063
CLASS C
Shares sold 37,741 $ 379,025
Shares redeemed (19,732) (197,887)
Net increase 18,009 $ 181,138

NOTE F: CONCENTRATON OF RISK
Investing in securities of foreign companies involves special risks which
include revaluation of currency and future adverse political and economic
developments. Moreover, securities of many foreign companies and their markets
may be less liquid and their prices more volatile than those of comparable U.S.
companies. The Fund invests in securities issued by enterprises that are
undergoing, or that have undergone, privatization. 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. Therefore, the Fund is
susceptible to the government renationalization of these enterprises and
economic factors adversely affecting the economies of these emerging market
countries. In addition, these securities created through privatization may be
less liquid and subject to greater volatility than securities of more developed
countries.

* Commencement of operations

FINANCIAL HIGHLIGHTS Alliance All-Asia Investment Fund

Selected Data For A Share of Capital Stock Outstanding Throughout Each Period

CLASS A CLASS B CLASS C
------------ ---------- -----------
Nov. 28, Nov. 28, Nov. 28,
1994* to 1994* to 1994* to
April 30, April 30, April 30,
1995 1995 1995
--------- ---------- ------------
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income .11** .09** .08**
Net realized and unrealized loss on
investments .13 .13 .16
Net increase in net asset value from
operations .24 .22 .24
Net asset value, end of period $ 10.24 $ 10.22 $ 10.24

TOTAL RETURN
Total investment return based on
net asset value(b) 2.40% 2.20% 2.40%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,917 $3,019 $ 185
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .19%(a) .90%(a) .71%(a)
Expenses, before waivers/reimbursements 11.71%(a) 12.35%(a) 11.80%(a)
Net investment income, net of
waivers/reimbursements 3.44%(a) 2.73%(a) 2.87%(a)
Portfolio turnover rate 51% 51% 51%

* Commencement of operations.
** Net of fee waived and expenses reimbursed by the Adviser.
(a) Annualized.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for period of less than one year is
not annualized.

<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 cancelled 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
00250157.AU2

<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

B-1

<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, when 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

B-2

<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.

B-3

<PAGE>

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.

B-4

<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.

B-6

<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

B-7

<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.

B-8
00250157.AU2

<PAGE>

________________________________________________________________

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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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 Rating Group

AAA: Bonds rated AAA have the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal
is extremely strong.

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.

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<PAGE>

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.

Duff & Phelps Long-Term Rating Scale

AAA: Highest credit quality. The risk factors are
negligible.

AA+, AA, AA-: High credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to
time because of economic conditions.

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<PAGE>

A+, A, A-: Protection factors are average but adequate.
However, risk factors are more variable and greater in periods of
economic stress.

BBB+, BBB, BBB-: Below average protection factors but
still considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.

BB+, BB, BB-: Below investment grade but deemed likely
to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or
company fortunes. Overall quality may move up or down frequently
within this category.

B+, B, B-: Below investment grade and possessing risk
that obligations will not be met when due. Financial protection
factors will fluctuate widely according to economic cycles,
industry conditions and/or company fortunes. Potential exists
for frequent changes in the rating within this category or into a
higher or lower rating grade.

CCC: Well below investment grade securities.
Considerable uncertainty exists as to timely payment of
principal, interest or preferred dividends. Protection factors
are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company
developments.

DD: Defaulted debt obligations. Issuer failed to meet
scheduled principal and/or interest payments.

Fitch Investors Service Bond Ratings

AAA. Securities of this rating are regarded as strictly
high-grade, broadly marketable, suitable for investment by
trustees and fiduciary institutions, and liable to but slight
market fluctuation other that through changes in the money rate.
The factor last named is of importance varying with the length of
maturity. Such securities are mainly senior issues of strong
companies, and are most numerous in the railway and public
utility fields, though some industrial obligations have this
rating. The prime feature of an AAA rating is showing of
earnings several times or many times interest requirements with
such stability of applicable earnings that safety is beyond
reasonable question whatever changes occur in conditions. Other
features may enter in, such as a wide margin of protection
through collateral security or direct lien on specific property
as in the case of high class equipment certificates or bonds that
are first mortgages on valuable real estate. Sinking funds or
voluntary reduction of the debt by call or purchase are often

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<PAGE>

factors, while guarantee or assumption by parties other than the
original debtor may also influence the rating.

AA. Securities in this group are of safety virtually
beyond question, and as a class are readily salable while many
are highly active. Their merits are not greatly unlike those of
the AAA class, but a security so rated may be of junior though
strong lien-- in many cases directly following an AAA security-
- -or the margin of safety is less strikingly broad. The issue may
be the obligation of a small company, strongly secured but
influenced as to ratings by the lesser financial power of the
enterprise and more local type of market.

A. A securities are strong investments and in many
cases of highly active market, but are not so heavily protected
as the two upper classes or possibly are of similar security but
less quickly salable. As a class they are more sensitive in
standing and market to material changes in current earnings of
the company. With favoring conditions such securities are likely
to work into a high rating, but in occasional instances changes
cause the rating to be lowered.

BBB. BBB rated bonds are considered to be investment
grade and of satisfactory quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to weaken this ability than bonds with
higher ratings.

Fitch Commercial Paper and
Certificate of Deposit Ratings

Fitch Commercial Paper Ratings are assigned at the
request of an issuer to debt obligations with an original
maturity not in excess of Z70 days. The ratings reflect Fitch
current appraisal of the degree of assurance of timely payment of
such debt. Fitch compensated for this service by an annual fee
paid by the issuer under a contractual agreement which specifies
among other things that ratings may be changed or withdrawn at
any time if, in Fitch's sole judgment, changing circumstances
warrant such action.

Fitch Certificate of Deposit ratings are assigned at the
request of the issuer to deposits with maturities of up to three
years. Ratings apply to uninsured principal and interest and
reflect only those credit characteristics inherent in
certificates of deposit. Such ratings should be considered only
in the context of ratings assigned to certificates of deposit and
not to ratings which may be assigned to non-deposit liabilities.
Ratings for CDs with maturities over 3 years will be assigned

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<PAGE>

bond rating symbols. For definitions refer to page 1 of the
Rating Register.

Fitch commercial paper ratings are grouped into four
categories, two of which are defined below:

Fitch-1 (Highest Grade) Commercial paper assigned this
rating is regarded as having the strongest degree of assurance
for timely payment.

Fitch-2 (Very Good Grade) issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than the strongest issues.

Fitch Investment Note Ratings

Fitch investment Note Ratings are grouped into four
categories with the indicated symbols. The ratings on notes with
maturities generally up to three years reflect Fitch's current
appraisal of the degree of assurance of timely payment, whatever
the source.

FIN-1 -- Notes assigned this rating are regarded as
having the strongest degree of assurance for timely payment.

FIN-2 -- Notes assigned this rating reflect a degree of
assurance for timely payment only slightly less in degree than
the highest category.

A plus symbol may be used in the three highest
categories to indicate relative standing. The Note Ratings will
usually correspond with Bond Ratings, although certain security
enhancements or market access may mean that notes will not track
bond.

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00250157.AU2

<PAGE>

APPENDIX D: JAPAN

Japan, located in eastern Asia, consists of four main
islands, Hokkaido, Honshu, Kyushu and Shikoku, and many small
islands. Its population is approximately 125 million.

The government of Japan is a representative democracy
whose principal executive is the Prime Minister. Japan's
legislature (known as the Diet) consists of two houses, the House
of Representatives (the lower house) and the House of Councillors
(the upper house).

Politics

From 1955 to 1993, Japan's government was controlled by
the Liberal Democratic Party (the "LDP"), the major conservative
party. In August 1993, after a main faction left the LDP over
the issue of political reform, a non-LDP coalition government was
formed consisting of centrist and leftist parties and was headed
by Prime Minister Morihiro Hosokawa. In April 1994, Mr. Hosokawa
resigned due to allegations of personal financial irregularities.
The coalition members thereafter agreed to choose as prime
minister the foreign minister, Tsutomu Hata. As a result of the
formation of a center-right voting bloc, however, the Social
Democratic Party of Japan (the "SDPJ"), a leftist party, withdrew
from the coalition. Consequently, Mr. Hata's government was a
minority coalition, the first since 1955, and was therefore
inherently unstable. In June 1994, Mr. Hata and his coalition
were replaced by a new coalition made up of the SDPJ, the LDP and
the New Party Harbinger. This coalition is led by the present
prime minister Tomiichi Murayama, the first Socialist prime
minister in 47 years. Various political parties within the
present coalition are calling for political reform that could
split the government and lead to new political alignments. Thus,
the stability of the current ruling coalition is not assured.

Economy

The Japanese economy maintained an average annual growth
rate of 3.9% in real GDP terms from 1980 through 1992, compared
with 2.1% for the United States during the same period. In 1992,
Japan's real GDP growth rate fell to 1.3% and there was little or
no growth in GDP in 1993. Inflation has remained low, estimated
at 1.5% for 1993. Consumer expenditures dropped 0.9% in 1993
from 1992 due to prevalent fears that have affected consumer and
business sentiment, such as the fear of corporate restructuring.
Recently, Japanese companies have taken steps designed to address
the economic downturn. These steps include reducing overtime and
bonus payments and initiating or accelerating early retirement

D-1

<PAGE>

programs. Overall employment, however, increased in 1993.
Employment growth has been shifting from the manufacturing to the
service industry, a trend expected to continue in 1994. Although
investment has declined from the high levels of the late 1980s
and the recent appreciation of the Japanese Yen against the U.S.
Dollar has curtailed business profits and weakened exports,
increases in housing and public investment and a decline in
imports in the early part of 1993 have provided some buffers to
the economy's recent downturn.

Japan's post World War II reliance on heavy industries
has shifted to higher technology products assembly and, most
recently, to automobile, electrical and electronic production.
Japan's success in exporting its products has generated sizeable
trade surpluses. Japan is in a difficult phase in its relations
with its trading partners that is partly due to the concentration
of Japanese exports in products such as automobiles, machine
tools and semiconductors and the large trade surpluses ensuing
therefrom, recent large and visible Japanese real estate
investments in the U.S. and an overall trade imbalance as
indicated by Japan's balance of payments. Although probable that
the recent improvement of the U.S. economy, a significant
decrease in the U.S. trade deficit with Japan and an increased
competitiveness and success in manufacturing, such as with the
U.S. automobile industry, has had a negative effect on Japan's
growth, Japan's overall trade surplus for 1993 remained the
largest in its history, amounting to $120 billion. Exports
totaled $362 billion, up 6.2% from 1992, and imports were $242
billion, up 3.5% from 1992. The current account surplus in 1993
was a record $131 billion. Consequently, Japan has become the
largest creditor nation and a significant donor of foreign aid.
On October 1, 1994, the U.S. and Japan reached an agreement that
may lead to more open Japanese markets with respect to insurance,
glass and medical and telecommunications equipment. The two
countries failed to agree, however, with respect to Japanese
imports of American automobiles and automotive parts. In
response to this failure, the U.S. has initiated the process of
imposing limited trade sanctions on Japan. The sanctions process
takes twelve to eighteen months and, therefore, it will be late
1995 at the earliest before any trade sanctions are imposed upon
Japanese exports.

In response to pressures exerted by the slumping economy
and the growing trade surplus, the government, in April and
September 1993, announced emergency economic packages which
included stimulus plans totaling 19.2 trillion Yen for 1994 and
numerous legislative provisions. A significant amount of the
expenditures was allocated for improving infrastructure, public
works projects, low-interest loans used for housing, and low
interest small business loans. Most importantly, the September
1993 package includes an elimination or relaxation of government

D-2

<PAGE>

regulations, a reduction of import costs, an extension of
subsidies to companies for sustaining excess workers in order to
curb unemployment, and an offer of tax breaks to middle-
incometaxpayers for educational expenses and to companies for
operational streamlining in order to influence lower retail
costs. In early 1994, the government responded to the business
and financial communities by providing an immediate income-tax
cut.
The Japanese Yen has been generally appreciating against
the U.S. Dollar for the past decade. In 1994, through September
30, the Japanese Yen high against the U.S. Dollar was 96.81 Yen
per dollar and the low was i113.10 per dollar. The average for
1994 through September 30 was W103.37 per dollar. On October 19,
1994, the exchange rate was i97.36 per dollar.

Japanese Stock Exchanges

Currently, there are eight stock exchanges in Japan.
The Tokyo Stock Exchange (the "TSE"), the Osaka Securities
Exchange and the Nagoya Stock Exchange are the largest, together
accounting for approximately 99% of the share trading volume and
for about 98.9% of the overall market value of all shares traded
on Japanese stock exchanges during the year ended December 31,
1993. The other stock exchanges are located in Kyoto, Hiroshima,
Fukuoka, Niigata and Sapporo. The chart below presents share
trading volume and overall market value information of each of
the three major Japanese stock exchanges for the years 1989
through 1993.

Share Trading Volume and Market Value
on Japanese Stock Exchanges
(mils. of shares, yen bils.)

<TABLE>
<CAPTION>
All Exchanges Tokyo Osaka Nagoya
Volume Value Volume Value Volume Value Volume Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1989 256,296 386,395 222,599 332,617 25,096 41,679 7,263 10,395
1990 145,837 231,837 123,099 186,667 17,187 35,813 4,323 7,301
1991 107,844 134,160 93,606 110,897 10,998 18,723 2,479 3,586
1992 82,563 80,456 66,408 60,110 12,069 15,575 3,300 3,876
1993 101,173 106,123 86,935 86,889 10,440 14,635 2,780 3,459
</TABLE>
Sources: The Tokyo Stock Exchange 1994 Fact Book and 1993 Fact
Book. Trading volume and value of foreign stocks are
not included.

At end of the third quarter of 1994, the market
capitalization of the First Section of the TSE (described below)
was approximately 40% below its all-time high reached in 1989.

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<PAGE>

Although the price/earnings ratios of individual companies vary
widely from company to company, absolute Japanese price/earnings
ratios are high in comparison with other major stock markets.
Other valuation measures, such as price-to-book value and price-
to-cash flow ratios, show that the Japanese market is near its
lowest level in the last 20 years relative to other world
markets.

The Tokyo Stock Exchange

Overview of the Tokyo Stock Exchange. The TSE is the
largest of the Japanese stock exchanges and as such is widely
regarded as the principal securities exchange for all of Japan.
In 1993, the TSE accounted for 81.9% of the market value and
85.9% of the share trading volume on all Japanese stock
exchanges. A foreign stock section on the TSE, consisting of
shares of non-Japanese companies, listed 110 non-Japanese
companies at the end of 1993. The market for stock of Japanese
issuers on the TSE is divided into a First Section and a Second
Section. The First Section is generally for larger, established
companies (in existence for five years or more) that meet
stringent listing criteria relating to the size and business
condition of the issuing company, the liquidity of its securities
and other factors pertinent to investor protection. The TSE's
Second Section is for smaller companies and newly listed issuers.

Sector Analysis of the First and Second Sections. The
TSE's domestic stocks include a broad cross-section of companies
involved in many different areas of the Japanese economy. At the
end of 1993, the four largest industry sectors, based on market
value, listed on the TSE were banking, with 101 companies
representing 23.8% of all domestic stocks listed on the TSE;
electric appliances, with 172 companies representing 10.2% of all
domestic stocks so listed; transportation equipment, with 82
companies representing 6.6% of all domestic stocks so listed; and
electric power and gas, with 16 companies representing 5.4% of
all domestic stocks so listed. No other industry sector
represented more than 5% of TSE listed domestic stocks.

Market Growth of the TSE. The First and Second Sections
of the TSE grew in terms of both average daily trading value and
aggregate year-end market value from 1982, when they were
Y128,320 million and Y98,090 billion, respectively, through the
end of 1989, when they were Y1,335,810 million and Y611,152
billion, respectively. Following the peak in 1989, both average
daily trading value and aggregate year-end market value declined
through 1992 when they were #243,362 million and Y289,483
billion, respectively. In 1993, both average daily trading value
and aggregate year-end market value increased and were Y353,208
million and i324,357 billion, respectively.

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<PAGE>

Market Performance of the First Section. 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 46% through the beginning of 1993. In
1993, the TOPIX increased by approximately 9% from the end of
1992, and by the end of the third quarter of 1994 increased by
approximately 8% from the end of 1993.

Japanese Foreign Exchange Controls

Under Japan's Foreign Exchange and Foreign Trade Control
Law and cabinet orders and ministerial ordinances thereunder (the
"Foreign Exchange Controls"), prior notification to the Minister
of Finance of Japan (the "Minister of Finance") of the
acquisition of shares in a Japanese company from a resident of
Japan (including a corporation) by a non-resident of Japan
(including a corporation) is required unless the acquisition is
made from or through a securities company designated by the
Minister of Finance or if the yen equivalent of the aggregate
purchase price of shares is not more than 100 million Yen. Even
in these situations, if a foreign investor intends to acquire
shares of a Japanese corporation listed on a Japanese stock
exchange or traded on a Japanese over-the-counter market
(regardless of the person from or through whom the foreign
investor acquires such shares) and as a result of the acquisition
the foreign investor would directly or indirectly hold 10% or
more of the total outstanding shares of that corporation., the
foreign investor must file a report within 15 days from and
including the day of such acquisition with the Minister of
Finance and any other minister with proper jurisdiction. In
instances where the acquisition concerns national security or
meets certain other conditions specified in the Foreign Exchange
Controls, the foreign investor must file a prior notification
with respect to the proposed acquisition with the Minister of
Finance and any other minister with proper jurisdiction. The
ministers may make a recommendation to modify or prohibit the
proposed acquisition if they consider that the acquisition would
impair the safety and maintenance of public order in Japan or
harmfully influence the smooth operation of the Japanese economy.
If the foreign investor does not accept the recommendation, the
ministers may issue an order modifying or prohibiting the
acquisition. In certain limited and exceptional circumstances,
the Foreign Exchange Controls give the Minister of Finance the
power to require prior approval for any acquisition of shares in
a Japanese company by a non-resident of Japan.

In general, the acquisition of shares by non-resident
shareholders by way of stock splits, as well as the acquisition
of shares of a Japanese company listed on a Japanese stock
exchange by non-residents upon exercise of warrants or conversion

D-5

<PAGE>

of convertible bonds, are not subject to any of the foregoing
notification or reporting requirements. Under the Foreign
Exchange Controls, dividends paid on shares held by non-residents
of Japan and the proceeds of any sales of shares within Japan
may, in general, be converted into any foreign currency and
remitted abroad.

Regulation of the Japanese Equities Markets

The principal securities law in Japan is the Securities
and Exchange Law which provides overall regulation for the
issuance of securities in public offerings and private placements
and for secondary market trading. Insider trading provisions are
applicable to debt and equity securities listed on a Japanese
stock exchange and to unlisted debt and equity securities issued
by a Japanese corporation that has securities listed on a
Japanese stock exchange or registered with the Japan Securities
Dealer's Association (the "JSDA"). In addition, each of the
eight stock exchanges in Japan has its own constitution,
regulations governing the sale and purchase of securities and
standing rules for exchange contracts for the purchase and sale
of securities on the exchange, as well as detailed rules and
regulations covering a variety of matters, including rules and
standards for listing and delisting of securities.

The loss compensation incidents involving preferential
treatment of certain customers by certain Japanese securities
companies, which came to light in 1991, provided the impetus for
amendments to the Securities and Exchange Law, which took effect
in 1992, as well as two reform bills passed by the Diet in 1992.
The amended Securities Exchange Law now prohibits securities
companies from the operation of discretionary accounts, loss
compensation or provision of artificial gains in securities
transactions, directly or indirectly, to their customers and
making offers or agreements with respect thereto. To ensure that
securities are traded at their fair value, the JSDA and the TSE
have promulgated certain rules, effective in 1992, which, among
other things, explicitly prohibit any transaction undertaken with
the intent to provide loss compensation or illegal gains
regardless of whether the transaction otherwise technically
complies with the rules. The reform bills passed by the Diet,
which took effect in 1992 and 1993, provide for the establishment
of a new Japanese securities regulator and for a variety of
reforms designed to revitalize the Japanese financial and capital
markets by permitting banks and securities companies to compete
in each other's field of business, subject to various regulations
and restrictions.

D-6
00250157.AU2

<PAGE>

PART C

OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits.

(a) Financial Statements

Included in the Registrant's Statement of
Additional Information

Statement of Assets and Liabilities
Notes to Financial Statements
Report of Independent Auditors

Included in Part C of the Registration Statement

All other financial statements or schedules are not
required or the required information is shown in
the Statement of Assets and Liabilities or the
notes thereto

(b) Exhibits

(1) Copy of Articles of Incorporation - Incorporated by
reference by Registrant's Registration Statement on
Form N-1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
September 21, 1994.

(2) Copy of By-Laws of the Registrant - Incorporated by
reference by Registrant's Registration Statement on
Form N-1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
September 21, 1994.

(3) Not applicable.

(4) (a) Form of Share Certificate for Class A Shares -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October
21, 1994.

(b) Form of Share Certificate for Class B Shares -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October
21, 1994.

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<PAGE>

(c) Form of Share Certificate for Class C Shares -
Incorporated by reference by
Registrant'sRegistration Statement on Form N-
1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
October 21, 1994.

(5) Advisory Agreement between the Registrant and
Alliance Capital Management L.P. - Incorporated by
reference by Registrant's Registration Statement on
Form N-1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
January 27, 1995.

(6) (a) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors,
Inc. - Incorporated by reference by
Registrant's Registration Statement on Form N-
1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
January 27, 1995.

(b) Form of Selected Dealer Agreement between
Alliance Fund Distributors, Inc. and selected
dealers offering shares of Registrant -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October
21, 1994.

(c) Form of Selected Agent Agreement between
Alliance Fund Distributors, Inc. and selected
agents making available shares of Registrant -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October
21, 1994.

(7) Not applicable.

(8) Custodian Contract between the Registrant and Brown
Brothers Harriman & Co. - Incorporated by reference
by Registrant's Registration Statement on Form N-1A
(File Nos. 33-84270 and 811-8776) filed with the

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<PAGE>

Securities and Exchange Commission on January 27,
1995.

(9) (a) Transfer Agency Agreement between the
Registrant and Alliance Fund Services, Inc. -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on January
27, 1995.

(b) Administration Agreement between the
Registrant and Alliance Capital Management
L.P. - Incorporated by reference by
Registrant's Registration Statement on Form N-
1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
January 27, 1995.

(10) (a) Opinion and Consent of Seward & Kissel -
Incorporated by reference by Registrant's
Registration Statement on Form N-1A (File Nos.
33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October
21, 1994.

(b) Opinion and Consent of Venable, Baetjer and
Howard - Incorporated by reference by
Registrant's Registration Statement on Form N-
1A (File Nos. 33-84270 and 811-8776) filed
with the Securities and Exchange Commission on
October 21, 1994.

(11) Consent of Independent Auditors - filed herewith.

(12) Not applicable.

(13) Investment representation letter of Alliance
Capital Management L.P. - Incorporated by reference
by Registrant's Registration Statement on Form N-1A
(File Nos. 33-84270 and 811-8776) filed with the
Securities and Exchange Commission on October 21,
1994.

(14) Not applicable.

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<PAGE>

(15) Rule 12b-1 Plan - Incorporated by reference to
Exhibit 15 to Post-Effective No. 1 of Registrants'
Registration Statement on Form N-1A, filed on
January 27, 1995.

(16) Schedule for computation of performance
quotations.*

________________________
* To be filed in a post-effective amendment.

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<PAGE>

Other Exhibit: Not applicable.

ITEM 25. Persons Controlled by or under Common Control with
Registrant.

None.

ITEM 26. Number of Holders of Securities.

Title of Class Number of Record Holders
(as of May 25, 1995)
Shares of Common Stock
Par Value .001
Class A 130
Class B 200
Class C 33

ITEM 27. 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 1 in response to Item
24, Article VII and Article VIII of Registrant's By-
Laws, filed as Exhibit 2 in response to Item 24, and
Section 10 of the proposed Distribution Services
Agreement, filed as Exhibit 6(a) in response to Item 24,
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 5 in response to
Item 24, as set forth below. The Administrator's
liability for any loss suffered by the Registrant or its
shareholders is set forth in Section 6 of Administration
Agreement, filed as Exhibit 9(b) in response to Item 24,
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.

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<PAGE>

(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:

(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:

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(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.

(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:

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<PAGE>

(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

(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

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<PAGE>

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 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.

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(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.

(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 to be for a purpose which
is not opposed to the best interests of the
corporation.

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(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 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

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<PAGE>

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 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:

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<PAGE>

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 1. 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
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 2. 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

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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 3. 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:
(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 4. 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

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to any limitations imposed by the Investment
Company Act of 1940.

Section 5. 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 6. 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 to be 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
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

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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 Administration Agreement between the Registrant
and Alliance Capital Management L.P. provides that
Alliance Capital Management L.P. will not be liable
for any error of judgment or mistake of law or for
any loss suffered by the Registrant or its
shareholders in connection with the performance of
its duties under the Administration Agreement,
except a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the
performance of its duties or from reckless
disregard by it of its duties under the
Administration Agreement.

The foregoing summaries are qualified by the entire
text of Registrant's Articles of Incorporation and
By- Laws, the Advisory Agreement between Registrant
and Alliance Capital Management L.P., the
Distribution Services Agreement between Registrant
and Alliance Fund Distributors, Inc. and the
Administration Agreement between the Registrant and
Alliance Capital Management L.P. 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
controlling person of the Registrant in the
successful defense of any action, suit or
proceeding) is asserted by such director, officer

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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.

The Registrant participates in a joint
trustees/directors and officers liability insurance

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<PAGE>

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 28. 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 29. Principal Underwriters.

(a) Alliance Fund Distributors, Inc. is 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:

ACM Institutional Reserves Inc.
AFD Exchange Reserves Inc.
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Counterpoint Fund
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.

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<PAGE>

Alliance Global Small Cap Fund, Inc.
Alliance Government Reserves
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund, Inc. 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 Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Alliance Fund, Inc.
The Alliance Portfolios
The Hudson River Trust

(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.

Positions and
Positions and Offices Offices with
Name With Underwriter Registrant
____ _____________________ _______________

Michael J. Laughlin Chairman

Robert L. Errico President

Kimberly A.
Baumgardner Senior Vice President

Daniel J. Dart Senior Vice President

Byron M. Davis Senior Vice President

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<PAGE>

Geoffrey L. Hyde Senior Vice President

Barbara J. Krumsiek Senior Vice President

William F. O'Grady Senior Vice President

Dusty W. Paschall Senior Vice President

Antonios G.
Poleonadkis Senior Vice President

Richard K. Saccullo Senior Vice President

Gregory K.
Shannahan Senior Vice President

James P. Syrett Senior Vice President

Peter J. Szabo Senior Vice President

Richard A. Winge Senior Vice President

Jim A. Yockey Senior Vice President

Edmund P.
Bergan, Jr. Senior Vice President, Secretary
Secretary and General Counsel

Robert H. Joseph Vice President & Controller

Stacia D. Petrou Vice President & Treasurer

Michael T. Anderson Vice President

Kenneth F. Barkoff Vice President

William P.
Beanblossom Vice President

Kevin T. Cannon Vice President

Mark J. Dunbar Vice President

Deirdre E. Duffy Vice President

Linda A. Finnerty Vice President

Sheila M. Flynn Vice President

Robert M. Frank Vice President

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<PAGE>

Gerard J. Friscia Vice President

Andrew L. Gangolf Vice President & Assistant
Assistant General Secretary
Counsel

Mark D. Gersten Vice President Treasurer and
Chief Financial
Officer

Troy L. Glawe Vice President

James E. Gunter Vice President

Alan Halfenger Vice President

Steven P. Hecht Vice President

George R. Hrabovsky Vice President

Valerie J. Hugo Vice President

Mark H. Huston Vice President

Marek E. Lakotko Vice President

Sheila F. Lamb Vice President

Stephen R. Laut Vice President

Thomas Leavitt, III Vice President

Christopher J.
MacDonald Vice President

John A. McClain Vice President

Gregory T. McCombs Vice President

Daniel D. McGinley Vice President

Matthew P. Mintzer Vice President

Nicole M. Nolan Vice President

Robert T. Pigozzi Vice President

Bruce W. Reitz Vice President

Joseph F. Sumanski Vice President

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<PAGE>

Nicholas K. Willett Vice President

Emilie D. Wrapp Vice President & Assistant
Special Counsel Secretary

Richard D. Allen Assistant Vice President

Warren W.
Babcock III Assistant Vice President

Benji A. Baer Assistant Vice President

Angela F. Bisagna Assistant Vice President

Casimir F.
Bolanowski Assistant Vice President

Maria L. Carreras Assistant Vice President

Leo H. Cook Assistant Vice President

John W. Cronin Assistant Vice President

Richard W. Dabney Assistant Vice President

Gerard P. DiSalvo Assistant Vice President

Sohaila S. Farsheed Assistant Vice President

Leon M. Fern Assistant Vice President

William C. Fisher Assistant Vice President

Joseph W. Gibson Assistant Vice President

James E. Gunter Assistant Vice President

William B. Hanigan Assistant Vice President

Alan C. Hanson Assistant Vice President

Vicky M. Hayes Assistant Vice President

Daniel M. Hazard Assistant Vice President

John C. Hershock Assistant Vice President

Kenneth R. Hill Assistant Vice President

William C. Howard Assistant Vice President

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<PAGE>

Thomas K. Intoccia Assistant Vice President

Edward W. Kelly Assistant Vice President

Donna M. Lamback Assistant Vice President

David P. Lambert Assistant Vice President

Nicholas J. Lapi Assistant Vice President

Michael F. Mahoney Assistant Vice President

Renate S. Mars Assistant Vice President

Daniel G. McCabe Assistant Vice President

Shawn P. McClain Assistant Vice President

Maura A. McGrath Assistant Vice President

Paul J. McIntyre Assistant Vice President

Kevin M. McLoughlin Assistant Vice President

Charles R. Mechler Assistant Vice President

Thomas F. Monnerat Assistant Vice President

Mark A. Moore Assistant Vice President

Joanna D. Murray Assistant Vice President

Jeanette M.
Nardella Assistant Vice President

William E. Noe Assistant Vice President

Marilyn I. Noonan Assistant Vice President

Robert E. Powers Assistant Vice President

Patrick J. Pung Assistant Vice President

Carol H. Rappa Assistant Vice President

Karen C. Satterberg Assistant Vice President

Raymond S. Scalfani Assistant Vice President

Rodney J. Schull Assistant Vice President

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<PAGE>

Robert M. Smith Assistant Vice President

William J. Strott Assistant Vice President

Joseph T. Tocyloski Assistant Vice President

Neil B. Wood Assistant Vice President

Mark R. Manley Assistant Secretary

ITEM 30. 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.

ITEM 31. Management Services.

Not applicable.

ITEM 32. Undertakings.

The Registrant undertakes to furnish each person whom
the prospectus is delivered with a copy of the
Registrant's latest report to Shareholders, upon request
and without charge.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant certifies that it needs all of the
requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and 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 1st day of June, 1995.

ALLIANCE ALL-ASIA
INVESTMENT 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 its 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 and June 1, 1995
John D. Carifa President

(2) Principal Financial
and Accounting Officer:

/s/ Mark D. Gersten Treasurer and June 1, 1995
Mark D. Gersten Chief Financial
Officer

(3) Majority of Directors:

David H. Dievler
John D. Carifa
W.H. Henderson
Stig Host
John H. Dobkin
Richard M. Lilly

C-25

<PAGE>

Alan Stoga
Hon. John C. West
Robert C. White

By: /s/ Edmund P. Bergan, Jr.
Edmund P. Bergan, Jr. June 1, 1995
Attorney-in-Fact

C-26
00250157.AU2